Last checked at 29 Sep 2008 07:00
Embargoed Release: 07:00hrs Monday 29 September 2008
MeDaVinci plc ("MeDaVinci" or the "Company") Preliminary Statement of Results for the Year Ended 31 March 2008
MeDaVinci (AIM:MVC.L), the investment company focussed on technologies, products and services in the health and wellness markets, announces its unaudited Preliminary Statement of Results for the period ended 31 March 2008.
Chairman's Statement
I present the results for the year ended 31 March 2008.
MeDaVinci plc operates as an investor in the international health and wellness markets and we currently have 3 key investments in the following companies:
Demecal Europe B.V. 30% ErgoDynamics 49% Emotion Fitness Kft 47%
The 30% interest in Demecal Europe B.V. was acquired on 1st August 2007 for ‚£ 2.1million, satisfied by the issue of 17,500,000 new ordinary shares of MeDaVinci. This equated to a share price of 12 pence per share, which was at a premium of 30% to the then current mid market price of MeDaVinci of 9.25p.
During the financial year, we issued a further 14.9m shares to Phoenix Foundation raising ‚£969,000 for additional working capital.
Demecal Europe B.V.
Demecal has developed a patented technology for the analysis of blood, which it shares the patents with Leisure Incorporated, a Japanese company. Demecal owns the rights exclusively to Europe and jointly to the USA.
Demecal's equipment enables on-the-spot plasma production using only one drop of blood, which has multiple benefits. The complete blood testing market in Europe is currently estimated at 3.8bn laboratory tests and 3.9bn self tests per year. Although still in the development stages, we have finalised tests on over 6,500 patients in the Netherlands and believe that the potential for Demecal could be substantial.
ErgoDynamics
ErgoDynamics has developed and is commercialising patented technology for the treatment and relief of back pain in the work place. As with Demecal, we are still at the development stage, although we have tested successfully on hundreds of clients and currently have over 2,000 systems in use.
Emotion Fitness Kft
Emotion Fitness has successfully opened what is the prominent health centre in the City of Vezprem in Hungary. This facility serves a model for the future rollout of more clubs in Eastern Europe as and when the economies improve.
Outlook
Despite the current world economic climate we believe that MeDavinci has three outstanding investments which are in very exciting sectors. The limited availability of capital to the Company through the financial markets has challenged our short term growth ambitions and we have been very diligent in our R&D and marketing spend. Over the next two years it is our ambition to be able to capitalise on at least one of these investments.
P TeerlinkChairman29 September 2008For further information:Peter Teerlink, Chairman Tel: 0031 10 288 4343 MeDavinci Plc Adam Reynolds Tel: 020-7245-1100 Hansard Group Hugh Field Tel: 020-7523-8000 Collins Stewart (NOMAD) CONSOLIDATED BALANCE SHEETFOR THE YEAR ENDED 31 MARCH 2008 Notes 2008 2007 ‚£'000 ‚£'000 Assets Non-current assets Property, plant and equipment 1 8 1 Investments in associates 2 3,787 1,364 Other financial assets 3 40 - Loans to investments in associates 4 1,613 516 Conversion rights 5 105 45 ___________ __________ 5,553 1,926 ___________ __________ Current assets Trade and other receivables 6 106 108 Cash and cash equivalents 7 730 892 ___________ __________ 836 1,000 ___________ __________ Total assets 6,389 2,926 ___________ __________ EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 9 736 412 Other reserves 9 6,338 2,858 Retained earnings 9 (830) (496) ___________ __________ Total equity 6,244 2,774 ___________ __________ Current liabilities Trade and other payables 10 135 146 Current tax payable 10 6 ___________ __________ Total liabilities 145 152 ___________ __________ Total equity and liabilities 6,389 2,926 ___________ __________
The financial statements were approved and authorised for issue by the board on 29 September 2008 and were signed on its behalf by P Teerlink.
CONSOLIDATED INCOME STATEMENTFOR THE YEAR ENDED 31 MARCH 2008 Year ended Year ended 31 March 2008 31 March 2007 ‚£'000 ‚£'000 Revenue - - Cost of sales - - ___________ ___________ Gross profit - - Administrative expenses (257) (150) Finance income 80 20 Share of associates operating loss (155) (32) ___________ ___________ Loss before taxation (332) (162) Income tax expense (2) (6) ___________ ___________ Loss for the year (334) (168) ___________ ___________ Earnings per share Basic (0.6) (0.8) Diluted (0.5) (0.7) ___________ __________
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE YEAR ENDED 31 MARCH 2008
Notes Year ended Year ended 31 March 2008 31 March 2007 ‚£'000 ‚£'000 Loss for the year (334) (167) Net exchange differences on translating 9 745 -foreign operations __________ __________ Total recognised income and expense for 411 (167)the year __________ __________ Attributable to equity holders of the 411 (167)parent __________ __________CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 MARCH 2008 Notes 2008 2007 ‚£'000 ‚£'000 Cash flows from operating activities Cash generated from operations 11 (140) (204) Interest received 80 20 __________ __________ Net cash flow from operating activities (60) (184) __________ __________ Cash flows from investing activities Acquisition of investments (2,196) (370) Purchase of property, plant and equipment (8) (1) __________ __________ Net cash flow from investing activities (2,204) (371) __________ __________ Cash flows from financing activities Proceeds from issue of equity instruments 3,059 1,741 Costs relating to issue of equity - (67)instruments Increase in loans to investments in (957) (391)associates Other loans - (170) __________ __________ Net cash flow from financing activities 2,102 1,113 __________ __________ Net (decrease)/increase in cash and cash (162) 558equivalents Cash and cash equivalents at beginning of 892 334the year __________ __________ Cash and cash equivalents at end of the 7 730 892year __________ __________ NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2008
1. ACCOUNTING POLICIES
MeDaVinci plc. is a public limited liability company governed by UK law, established in the UK and listed on the Alternative Investment Market (AIM). The company's registered office is in the UK. Its office address is 49 Rodney Street, Liverpool L1 9EW.
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS). IFRS 1, First-time Adoption of International Financial Reporting Standards, has been applied in preparing these financial statements. These consolidated financial statements are the first MeDaVinci plc financial statements to be prepared in accordance with IFRS.
The policies set out below have been consistently applied to all the years unless stated otherwise.
Consolidated financial statements of the Group until 31 March 2008 had been prepared in accordance with Generally Accepted Accounting Principles (GAAP). GAAP differs in certain respects from IFRS. When preparing the group's IFRS balance sheet at April 2006, the following optional exceptions from full retrospective application of IFRS accounting policies have been adopted:
* Business combinations prior to 1 April 2006 have not been restated * IFRS2 has not been applied to equity instruments granted before 7 November 2002
Group accounting
Subsidiaries are those entities in which the group has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the group controls another entity.
Subsidiaries are consolidated from the date on which control is transferred to the group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets required and liabilities and contingent liabilities assumed in a business contribution are measured initially at their fair values at the acquisition date. The excess of the cost of the acquisition over the fair value of the group's share of the identifiable net assets required is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired the difference is recognised directly in the income statement. Inter company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, the accounting policies of subsidiaries have been changed in order to ensure consistency with the policies adopted by the group.
2. PROPERTY, PLANT AND EQUIPMENT
Plant, 2008 Plant, 2007 Machinery & Machinery & Total Total Equipment Equipment ‚£'000 ‚£'000 ‚£'000 ‚£'000 Cost At 1 March 1 1 1 1 Additions 8 8 - - Acquisitions via business - - - -combination Disposals - - - - ________ ________ ________ ________ 31 March 9 9 1 1 ________ ________ ________ ________ Depreciation At 31 March - - - - Charge for the year 1 1 - - Disposals - - - - ________ ________ ________ ________ At 31 March 1 1 - - ________ ________ ________ ________ Net book value At 31 March 8 8 1 1 ________ ________ ________ ________ 3. INVESTMENTS IN ASSOCIATES 2008 2007 ‚£'000 ‚£'000 At cost At 1 April 1,364 597 Additions 2,196 799 Share in the result (155) (32) Transfer to other financial assets (40) - Exchange rate movement 422 - __________ __________ At 31 March 3,787 1,364 __________ __________
Details of the investments held are as follows:-
No. of % Cost Nature of ordinary shares Held ‚£'000 Business ErgoDynamicsParticipations 89 49 986 Holding companyBV for investment in Ergodynamics Applications BV Emotion Fitness Mag Kft 2,700 47 370 Fitness centres Demecal Europe BV 5,400 30 2,196 Development and Selling of blood tests
The above named companies prepare its financial statements as of 31 December each year. The latest figures were for the year ended 31 December 2007 and these were used to determine the net equity value at 31 March 2008, allowing for the effect of significant transactions in the period of 31 December 2007 to 31 March 2008. It is not possible for the financial year-end dates of MeDaVinci plc and the above investments to be coterminous.
Included in the additions is an amount invested in Demecal Europe BV. Demecal owns a patent that part of the amount invested has been assigned to and so under IFRS amortisation must be charged. The fair value assigned to the patent at the date of investment was ‚£571K. This has a useful life of ten years so this has been amortised over this period. A full years depreciation has not been charged due to the investment being made part way through the year.
The group's share of the associates results and equity are as follows:
2008 2007 ‚£'000 ‚£'000 Sales 180 78 Result for the year (510) 150 Total assets 2,781 1,236 Total liabilities and obligations (2,956) (1,292) Total equity (175) (56) __________ __________ 4. OTHER FINANCIAL ASSETS 2008 2007 ‚£'000 ‚£'000 At 1 April - - Transferred from investments in associates 40 - _________ _________ At 31 March 40 - _________ _________ No. of Type of % Cost Nature of Shares Shares Held ‚£'000 business MeDaVinci 25 Ordinary 5% 40 Development ofDevelopment BV innovative products in the medical industry
5. LOANS TO INVESTMENTS IN ASSOCIATES
2008 2007 ‚£000 ‚£000 Loan to ErgoDynamics Participations BV 456 391 Loan to Emotion Fitness Mag Kft 318 125 Loan to Demecal Europe BV 839 - ----------- ----------- 1,613 516 ----------- -----------
Interest on the loan to ErgoDynamics Participations BV accrues on the amount outstanding at a rate of 6% per annum. Interest accrues on a day to day basis and is due for repayment on final repayment date. The final repayment date is 17 March 2011.
The directors consider that there is no significant difference between the fair value and the book value of the loans above.
6. CONVERSION RIGHTS 2008 2007 ‚£'000 ‚£'000 Conversion rights 105 45 ___________ ___________
The conversion right is part of a zero interest convertible loan note facility of ¢â€š¬ 2.500K (‚£1,981K) whereby conversion of the full facility will lead to 68,68% of the outstanding share capital post conversion or any pro rata percentage thereof post conversion as a result of a partial conversion. At balance sheet date ¢â€š¬ 535 K (‚£424K) is drawn under the facility so that partial conversion will lead to 14,7% of the outstanding share capital post conversion.
This conversion right is valued at the net present value of the difference in interest between a comparable loan without conversion rights at market rate and this zero coupon convertible.
Further MeDaVinci has a convertible loan note with a conversion right on shares Demecal Europe BV as well as warrant instruments on shares Ergo Dynamics Participations BV. Both instruments were acquired at zero cost. In determining the fair value of both instruments the directors have considered that there is no active market for both instruments and therefore the value of these instruments have been approached with the Black & Scholes option pricing model. Given the range of outcomes with different volatilities and the lack of determining a peer-group volatility analysis, consequently both instruments have not been valued.
7. TRADE AND OTHER RECEIVABLES
2008 2007 ‚£'000 ‚£'000 Other receivables 4 1 Amounts owed by participating interests 88 107 Prepayments and accrued income 14 - __________ __________ 106 108 __________ __________
8. CASH AND CASH EQUIVALENTS
2008 2007 ‚£'000 ‚£'000 Cash at bank and in hand 730 892 __________ _________ 9. CALLED UP SHARE CAPITAL 2008 2007 Numbers Numbers (`000) (`000) Ordinary shares of 1pence each Authorised 500,000 100,000 __________ _________ Issued At beginning of year 41,188 13,599 Issued in year 32,412 27,589 __________ _________ At end of year 73,600 41,188 __________ _________
On 31 July 2007 the company issued 17,500,000 shares of 1 pence each. The total consideration received amounted to ‚£2,100,000.
On 4 January 2008 the company issued 14,912,000 shares of 1 pence each. The total consideration amounted to ‚£969,280.
On 12 November 2007, a resolution was passed to increase the authorised share capital to ‚£5,000,000 by the creation of 400,000,000 new ordinary shares of 1 pence each.
10. SHAREHOLDERS' FUNDS AND STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share Share Retained Foreign Total capital premium earnings Currency ‚£'000 ‚£'000 ‚£'000 ‚£'000 Reserve ‚£'000 For the year ended 31 March 2008 At 1 April 412 2,570 (218) 10 2,774 _______ ______ _______ _______ _______ Profit for the year - - (334) - (334)attributable to equity shareholders Unrealised exchange - - - 745 745movement Issue of shares 324 2,745 - - 3,069 Transaction costs - (10) - - (10)deducted from equity _______ _______ _______ _______ _______ Movement in year 324 2,735 (334) 745 3,470 _______ _______ _______ _______ _______ At 31 March 736 5,305 (830) 755 6,244 _______ _______ _______ _______ _______ For the year ended 31 March 2007 At 1 April 136 743 (48) - 831 _______ _______ _______ _______ _______ Loss for the year (168) - (168)attributable to equity shareholders Unrealised exchange - - 8 - 8movement Reserve transfer in terms - - (10) 10 -of IFRS 1 Issue of shares 276 1,894 - - 2,170 Transaction cash deducted - (67) - - (67)from equity _______ _______ _______ _______ _______ Movement in year 276 1,827 (170) 10 1,943 _______ _______ _______ _______ _______ At 31 March 412 2,570 (218) 10 2,774 _______ _______ _______ _______ _______
The authorised, called up and fully paid share capital relates to 73,600,000 shares at a nominal value of 1 pence each.
The share premium reserve relates to the excess of amounts received for shares issued above the nominal value of the shares less any costs directly relating to the issue of the shares. During the year the company issued 14.9 million shares at 6.5 pence each resulting in a premium on issue of ‚£820K. A further share issue was made during the year issuing 17.5 million shares at 12 pence each resulting in a premium on issue of ‚£1,925K.
The foreign currency reserve consists of all the translation differences as from 1 April 2006 resulting from the translation of the net investment in activities denominated in a currency other than UK sterling. These foreign exchange differences are initially recognised in this reserve. In the event of disposing of the foreign net investment in question, the related part recognised in the reserve is transferred to the income statement.
The retained earnings reserve relates to the cumulative result since incorporation plus any results of acquisitions from the date of the particular acquisition.
11. TRADE AND OTHER PAYABLES
2008 2007 ‚£'000 ‚£'000 Trade creditors 79 99 Other creditors 1 - Accruals 55 47 __________ __________ 135 146 __________ __________
12. CASH FLOW FROM OPERATING ACTIVITIES
2008 2007 ‚£'000 ‚£'000 Loss before taxation (332) (162) Exchange rate differences - 8 Finance income (80) (20) Share of loss in investments in associates 155 32 _________ _________ (257) (142) Changes in working capital (excluding effect of acquisitions and disposals) Decrease/(increase) in trade and other receivables 2 (108) Increase in trade and other payables 115 46 __________ __________ Cash outflow from operations (140) (204) __________ __________
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