RNS Number:8547J
Bioquell PLC
10 April 2003
TO: CITY EDITORS
FOR IMMEDIATE RELEASE
10 April, 2003
BIOQUELL PLC
BIOQUELL announces its preliminary results for the year
ended 31 December 2002
Launch of RBDS - Room Bio-Decontamination Service
Financials
* Turnover #12.2 million (2001: #15.9 million)
* Gross margin 36% (2001: 29%)
* R&D #1.66 million (2001: #1.17 million) and exceptional costs associated
with factory closure #0.76 million (2001: #nil), totalling #2.4 million
* Loss before tax #2.5 million (2001: #1.3 million)
* Loss after tax #2.2 million (2001: #1.3 million), reflecting #0.3m R&D tax
credit
* Net assets #8.2 million (2001: #4.1 million)
* Net cash #2.2 million (2001: net debt of #1.8 million)
* Reduction in turnover and increase in gross margin percentage due to
movement away from bidding for large, low margin laboratory equipment
contracts
* Significant financial resources to fund growth of new bio-decontamination
service businesses and expansion of group - bank facilities of #2.0 million
in place
Room bio-decontamination service ("RBDS") launched
* Unique low temperature, residue-free room / building bio-decontamination
service business launched in the UK with revenue generation already started
* Technology effective against bacteria, including anthrax and antibiotic
resistant "superbugs". Also effective against viruses and fungi
* Potential client base includes pharmaceutical, biotech, bio-defence and
healthcare market
* In discussions to franchise RBDS service overseas - BIOQUELL to take
rental fee and percentage of revenues
Continuing progress in "superbug" (antibiotic resistant Hospital Acquired
Infection) bio-decontamination
* Technology confirmed as effective in bio-deactivating a range of
antibiotic-resistant bacteria commonly found in hospitals
* Research programme progressed from BIOQUELL's laboratories to London
teaching hospital
* Hospital Acquired Infection continuing to create significant problems (and
hence costs) for hospitals worldwide - eg. bacteria such as MRSA; viruses
such as "Norwalk" and SARS (current virus epidemic in Asia)
* Two confirmed cases of VRSA (Vancomycin-resistant Staphyloccocus aureus)
in the US within the last 9 months - potentially untreatable "superbug"
Continuing progress in bio-defence - potential for chemical deactivation
* RBDS technology selected for priority verification for US "Safe Building
Program" - testing agreement signed with US Government contractor
* Successful anthrax room bio-decontamination trials undertaken with US
Government agency
* RBDS technology also being tested for efficacy against chemical weapons
giving potential for dual use against bio-agent / chemical agent
* Pursuing other civil defence / homeland security opportunities in the UK
and overseas
* In the event of biological attack, potential for a number of defence
applications including military equipment bio-decontamination prior to
repatriation
* Continuing demand for NBC (Nuclear, Biological and Chemical) filtration
systems for vehicles and shelters in UK and overseas. (BIOQUELL's NBC
systems fitted to Challenger 2 tank currently in service in the Gulf.)
Strong interest in technology from US market
* BIOQUELL Inc incorporated in Pennsylvania to support demand for
technology
* Network of sales companies put in place across US
* Network of service support put in place across US
* Demand for both bio-decontamination equipment and bio-decontamination
service from North American market
* Strong interest in bio-decontamiantion technology relating to
bio-defence - both civil and military applications
* Patent litigation filed by STERIS against BIOQUELL in the US; BIOQUELL
has been advised by its US patent counsel that its technology does not infringe
and the case is without merit. BIOQUELL will be vigorously defending the action.
Transformation of Group from UK laboratory equipment manufacturing business to
international bio-decontamination solutions provider
* Consolidation of manufacturing and sales facilities to Andover
headquarters - closure of Weston-super-Mare operations
* Launch of RBDS - Room Bio-Decontamination Service
* Launch of EBDS - Equipment Bio-Decontamination Service (highly
complementary to existing after-sales service business in UK)
* Continuing sales of bio-decontamination and laboratory equipment
Trading at Cape Engineering improving
* Cape Engineering, the Group's environmental stress testing business, has
started the year well
* The benefits of a new management team are beginning to be seen with a
return to profitability and an increase in turnover
* Cape is about to expand the services offered to its clients
* Strong interest is being shown by clients in complete outsourcing as the
large UK engineering / manufacturing group's cut costs and concentrate on
core competencies
Prospects
BIOQUELL is now positioned in the market as a bio-decontamination solutions
provider using unique and patent protected technology. The launch of RBDS -the
Room Bio-Decontamination Service - in the UK represents a critical stage in the
Group's development. The opening of BIOQUELL's US operations should
significantly increase revenues from North America. Micro-organisms - bacteria,
viruses and fungi - will continue to create problems, and hence opportunities
for BIOQUELL, in a range of sectors around the world, as vividly demonstrated at
the current time by the SARS virus in Asia. Cape Engineering, the Group's
environmental stress testing service business, is enjoying a much better start
to 2003 than 2002. Underlying trading for the Group is improving and
notwithstanding the increased level of sales and marketing spend, the Group is
moving towards breakeven. The rate of expansion of the Group should accelerate
as the bio-decontamination service businesses are rolled out internationally
later in the year.
Enquiries
John Salkeld BIOQUELL PLC 01264 835 900
Nick Adams
Mark Bodeker
Katharine Sharkey Redleaf Communications 020 7955 1410
CHAIRMAN'S STATEMENT
Overview
2002 was a crucial year for BIOQUELL. The Group completed the research and
development needed to build a bio-decontamination service business with
applications in a broad range of sectors, including pharmaceutical,
biotechnology, bio-defence and healthcare sectors. The Group consolidated its
manufacturing and sales operations at Andover by the closure of its
Weston-super-Mare facilities. A successful fund raising was carried out to
provide the Group with the financial resources to fund its expansion.
The problems associated with bio-burden remain legion - and BIOQUELL's low
temperature, residue-free technology continues to demonstrate its rapid
effectiveness against bacteria, including anthrax, and viruses. The Group
continues to carry out research into the efficacy of its technology against
antibiotic resistant bacteria found in many hospitals - so-called "superbugs".
Further, BIOQUELL has recently signed an agreement to undertake testing of its
room bio-decontamination technology against bio-agents for a US Government
contractor.
Results
Turnover for the year was #12.2 million (2001: #15.9 million). The reduction in
turnover reflected the Group's strategic decision to move away from writing low
margin, large contracts in the competitive and mature laboratory equipment
sector and the impact of consolidating the Group's manufacturing facilities onto
one site. The decline also reflected tough trading conditions in 2002 for Cape,
the Group's environmental stress testing business.
Gross margin increased by seven percentage points from 29% to 36% reflecting a
shift towards higher added value bio-decontamination revenues.
The pre-tax loss was #2.5 million (2001: #1.3 million), which included R&D
expenditure of #1.7 million (2001: #1.2 million) and exceptional costs of #0.8
million associated with the costs of closing Weston-super-Mare.
Finance
The Group has strong cash resources with a net cash position at the end of the
year of #2.2 million (2001: net indebtedness of #1.8 million) and bank
facilities of #2.0 million. Capital expenditure was #0.4 million (2001: 0.8
million).
Loss per share was 5.9p (2001: 4.2p)
Dividends
The Board is proposing the payment of the dividend for the year on the
preference shares of 7.5p per preference share, representing a total payment of
#11,250.
The Board is not recommending the payment of an ordinary dividend.
Launch of RBDS - Room Bio-Decontamination Service
BIOQUELL today announced the launch of its unique RBDS service business in the
UK which your Board believe will play a substantial part in the growth of
BIOQUELL. There is an increasing requirement for fast, safe room and building
bio-decontamination in a range of sectors - from bio-defence to healthcare. This
technology is being tested against both bio-agents and chemical agents. The
recent outbreak of the SARS virus in Asia shows dramatically how quickly a
micro-organism can spread internationally and how substantial the consequential
economic impact can be.
USA
BIOQUELL has seen increasing interest in the US for its products and services.
Accordingly BIOQUELL has spent considerable time in the last year establishing a
sales and service network there. BIOQUELL Inc. has been incorporated and is
based in Pennsylvania. The Board is confident of strong growth in BIOQUELL's
bio-decontamination business in the US across a range of sectors.
BIOQUELL has received notification that STERIS, a US corporation which is the
Group's principal competitor, has filed legal proceedings against BIOQUELL in
Pennsylvania relating to alleged infringement of a US patent. BIOQUELL has
appointed US patent counsel who have advised that BIOQUELL's technology does not
infringe and the case is without merit. BIOQUELL will vigorously defend the
action. BIOQUELL is committed to providing its technology and unique
bio-decontamination solutions to the important United States market.
Prospects
BIOQUELL is now positioned in the market as a bio-decontamination solutions
provider using unique and patent protected technology. The launch of RBDS -the
Room Bio-Decontamination Service - in the UK represents a critical stage in the
Group's development. The opening of BIOQUELL's US operations should
significantly increase revenues from North America. Micro-organisms - bacteria,
viruses and fungi - will continue to create problems, and hence opportunities
for BIOQUELL, in a range of sectors around the world, as vividly demonstrated at
the current time by the SARS virus in Asia. Cape Engineering, the Group's
environmental stress testing service business, is enjoying a much better start
to 2003 than 2002. Underlying trading for the Group is improving and
notwithstanding the increased level of sales and marketing spend, the Group is
moving towards breakeven. The rate of expansion of the Group should accelerate
as the bio-decontamination service businesses are rolled out internationally
later in the year.
John Salkeld
Chairman
10 April, 2003
BIOQUELL PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002
2002 2001
--------- ---------
#000s #000s
--------- ---------
Turnover 12,243 15,869
------------------------------ --------- ---------
Cost of sales (7,812) (11,196)
Gross profit 4,431 4,673
--------- ---------
Operating loss before R&D and exceptional items (110) (34)
R&D (1,656) (1,168)
Exceptional items (763) -
------------------------------ --------- ---------
Net operating expenses (6,960) (5,875)
--------- ---------
Operating loss (2,529) (1,202)
------------------------------ --------- ---------
Net interest payable and other similar charges (6) (142)
--------- ---------
Loss on ordinary activities before tax (2,535) (1,344)
Tax credit on loss on ordinary activities 300 -
--------- ---------
Loss on ordinary activities after tax (2,235) (1,344)
Dividends on non equity shares (11) (11)
--------- ---------
Retained loss for the year (2,246) (1,355)
------------------------------ --------- ---------
Loss per share - basic and diluted (5.9p) (4.2p)
------------------------------ --------- ---------
BIOQUELL PLC
GROUP BALANCE SHEET
At 31 December 2002
2002 2001
#000s #000s
Fixed assets:
Tangible assets 2,393 2,748
Investments - -
------------------------------ --------- ---------
2,393 2,748
--------- ---------
Current assets:
Stocks 2,753 2,313
Debtors 3,263 3,503
Cash at bank and in hand 2,594 10
------------------------------ --------- ---------
8,610 5,826
Creditors:
Amounts falling due within one year (2,313) (3,835)
------------------------------ --------- ---------
Net current assets 6,297 1,991
------------------------------ --------- ---------
Total assets less current liabilities 8,690 4,739
------------------------------ --------- ---------
Creditors:
Amounts falling due after more
than one year (377) (390)
Provisions for liabilities and charges (123) (203)
------------------------------ --------- ---------
Net assets 8,190 4,146
------------------------------ --------- ---------
Capital and reserves:
Called up share capital 4,112 3,502
Share premium 10,110 4,413
Capital reserve 255 255
Profit and loss account (6,287) (4,024)
------------------------------ --------- ---------
Shareholders' funds 8,190 4,146
------------------------------ --------- ---------
Shareholders' funds may be analysed as:
Equity interests 8,040 3,996
Non equity interests 150 150
------------------------------ --------- ---------
8,190 4,146
--------- ---------
BIOQUELL PLC
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2002
2002 2001
#000s #000s
--------- ---------
Net cash outflow from operating activities (1,882) (795)
Returns on investments and servicing of finance (17) (153)
Capital expenditure and financial investment (441) (757)
Financing 6,271 1,016
--------- ---------
Increase / (decrease) in cash in the year 3,931 (689)
------------------------------ --------- ---------
Reconciliation of net cash flow to movement in net debt
Increase / (decrease) in cash in the year 3,931 (689)
Cash outflow from decrease in debt financing 36 303
------------------------------ --------- ---------
Change in net debt resulting from cash flows 3,967 (386)
New finance leases - (17)
Exchange difference (12) (6)
Movement in net debt in the year 3,955 (409)
Net cash / (debt) at 1 January (1,759) (1,350)
------------------------------ --------- ---------
Net cash / (debt) at 31 December 2,196 (1,759)
------------------------------ --------- ---------
BIOQUELL PLC
STATEMENT OF
TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2002
2002 2001
#000s #000s
--------- ---------
Loss for the financial year (2,235) (1,344)
Foreign exchange adjustment (17) (3)
------------------------------------- --------- ---------
Total recognised loss for the financial year (2,252) (1,347)
------------------------------------- --------- ---------
RECONCILIATION OF MOVEMENTS IN
SHAREHOLDERS' FUNDS
for the year ended 31 December 2002
Group Company
2002 2001 2002 2001
#000s #000s #000s #000s
-------- -------- -------- --------
(Loss) / profit (2,235) (1,344) (178) 581
Dividends on non equity shares (11) (11) (11) (11)
---------------------------- -------- -------- -------- --------
(2,246) (1,355) (189) 570
Foreign exchange adjustment (17) (3) - -
Shares issued and associated share 6,307 1,319 6,307 1,319
premium
Net increase / (decrease) 4,044 (39) 6,118 1,889
Opening shareholders' funds 4,146 4,185 9,366 7,477
---------------------------- -------- -------- -------- --------
Closing shareholders' funds 8,190 4,146 15,484 9,366
---------------------------- -------- -------- -------- --------
The total amount of non equity interests in shareholders' funds is as follows:
2002 2001
#000s #000s
-------- --------
7.5% redeemable cumulative preference shares of #1 each
(First Preference Shares) 150 150
--------------------------------------- -------- --------
Notes:
1. The financial information set out above in respect of the years ended 31
December 2002 and 31 December 2001 does not constitute the Company's statutory
financial statements for those periods but has been derived from the audited
Statutory Accounts for those years. Statutory financial statements for the
period ended 31 December 2001 have been delivered to the Registrar of Companies
and those for 2002 will be delivered following the Company's Annual General
Meeting. The auditors have reported on those accounts; their report was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985. The financial statements for the year ended 31 December 2002
will be posted to shareholders shortly.
2.The financial information set out above has been prepared using
accounting policies which are consistent with those adopted in the full
financial statements of the Company.
3.The directors are proposing payment of the dividend for the year on the
First Preference Shares of 7.5p per share (a total payment of #11,250).
4.Payment of the second instalment of the dividend on the non-equity share
(preference shares) of #5,625 will be made on 29 August 2003.
NOTES TO EDITORS
The BIOQUELL Group in summary
BIOQUELL: BIO-DECONTAMINATION SOLUTIONS
BIOQUELL has developed the ClarusTM range of unique and patent protected
bio-decontamination technology which uses hydrogen peroxide vapour as a source
of free-radicals to bio-deactivate micro-organisms such as bacteria (including
anthrax), viruses and fungi.
BIOQUELL is fast developing the service side to its business via the provision
of a Room Bio-Decontamination Service ("RBDS") and an Equipment
Bio-Decontamination Service ("EBDS"). These services will be franchised
internationally in certain sectors. BIOQUELL also sells and manufactures Clarus
bio-decontamination equipment.
The Group also designs and manufactures specialist filtration equipment,
principally for the laboratory sector, using HEPA filtration to filter
particulates, including bacteria, and activated carbon to absorb chemicals.
BIOQUELL also designs and manufactures a range of Nuclear, Biological and
Chemical ("NBC") filtration systems used in the defence and civil defence
sectors.
Full after-sales service, including preventative maintenance contracts, is
provided on all the equipment sold in the UK via a team of 30 service engineers.
BIOQUELL's equipment and services are used in the following sectors:
* pharmaceutical * healthcare * defence
* biotechnology * laboratory * food
In addition to focussing on the pharmaceutical / biotechnology market, BIOQUELL
is investing in providing bio-decontamination solutions for:
i. the increasing level of Hospital Acquired Infection - such as
MRSA - which is being exacerbated by antibiotic resistance (so-called
"superbugs"); and
ii. the rapid, "infinitely scalable" bio-decontamination of
buildings following terrorist (or military) bio-agent attack (and is also
currently testing its ability to deactivate chemical weapons).
BIOQUELL has a direct sales force in the UK and sales offices in France and the
US, where a network of sales and service organisations have been put in place to
cover the important US market.
CAPE: SPECIALIST STRESS TESTING SERVICES
Cape Engineering provides specialist environmental stress testing services to a
broad range of "blue chip" companies in the aerospace, automotive, defence, rail
and telecoms sectors. Cape also provides a software-based stress analysis
service.
Cape is seeing increasing opportunities to expand its business by way of
out-sourcing, taking on testing currently undertaken in-house by many
corporates.
This information is provided by RNS
The company news service from the London Stock Exchange
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