TIDMBVXP
RNS Number : 6183R
BioVentix PLC
30 October 2023
Bioventix plc
("Bioventix" or "the Company")
Results for the year ended 30 June 2023
Bioventix plc (BVXP), a UK company specialising in the
development and commercial supply of high-affinity monoclonal
antibodies for applications in clinical diagnostics, announces its
audited results for the year ended 30 June 2023.
Highlights:
-- Revenue up 9% to GBP12.82 million (2022: GBP11.72
million)
-- Profit before tax up 9% to GBP10.13 million (2022: GBP9.28
million)
-- Cash at year end of GBP5.7 million (30 June 2022: GBP6.1
million)
-- Second interim dividend of 90p per share (2022: 74p)
-- Total dividends 152p per share (2022: 152p)
Introduction and Technology
Bioventix creates, manufactures and supplies high affinity sheep
monoclonal antibodies (SMAs) for use in diagnostic applications.
Bioventix antibodies are preferred for use when they confer an
improved test performance compared to other available
antibodies.
Most of our antibodies are used on blood-testing machines
installed in hospitals and other laboratories around the world.
Bioventix makes antibodies using our SMA technology for supply to
diagnostic companies for subsequent manufacture into reagent packs
used on blood-testing machines. These blood-testing machines are
supplied by large multinational in vitro diagnostics (IVD)
companies such as Roche Diagnostics, Siemens Healthineers, Abbott
Diagnostics & Beckman Coulter. Antibody-based blood tests are
used to help diagnose many different conditions including, amongst
others, heart disease, thyroid function, fertility, infectious
disease and cancer.
Testosterone is an example of a blood test where a Bioventix SMA
has facilitated an improved test. In 2003, it became clear that
testosterone tests performed on automated IVD platforms were
deficient. Whilst the higher levels of testosterone in healthy
adult males were accurately reported, the lower levels of
testosterone in pre-pubescent boys and women were inaccurately
reported. In 2005, Bioventix created an antibody called testo3.6A3
which was evaluated by customers during 2006. Evaluations were
successful and following the necessary regulatory approvals, the
first testosterone assays based on testo3.6A3 were launched in
2009. A number of IVD companies now use this antibody for revised
tests that more accurately measure lower levels of
testosterone.
Over the past 18 years, we have created and supplied
approximately 20 different SMAs that are used by IVD companies
around the world. We currently sell a total of 15-20 grams of
purified physical antibody per year, the vast majority of which is
exported. In addition to revenues from physical antibody supplies,
the sale by our customers of diagnostic products (based on our
antibodies) to their downstream end-users attracts a modest
percentage royalty payable to Bioventix. These downstream royalties
currently account for approximately 70% of our annual revenue.
Bioventix adopts one of two commercial approaches when creating
new antibodies. The first is own-risk antibody creation projects
which gives Bioventix the complete freedom to commercialise the
antibodies produced. The second is contract antibody creation
projects in partnership with customers who supply materials,
know-how and funding and to create antibodies that can only be
commercialised with the partner company. In both cases, after
initiation of a new project, it takes around a year for our
scientists to create a panel of purified antibodies for evaluation
by our customers. The evaluation process at customers' laboratories
generally requires the fabrication of prototype reagent packs which
can be compared to other tests, for example the customer's existing
commercial test or perhaps another "gold standard" method, on the
assay machine platform being considered. The process of subsequent
development thereafter by our customers can take many years before
registration or approval from the relevant authority, for example
the US Food and Drug Administration (FDA) or EU authorities, is
obtained and products can be sold to the benefit of the customers,
and of course Bioventix, through the agreed sales royalty. This
does mean that there is a lead time of 4-10 years between our own
research work and the receipt by Bioventix of royalty revenue from
product sales. However, because of the resource required to gain
such approvals, after having achieved approval for an accurate
diagnostic test using a Bioventix antibody, there is a natural
incentive for continued antibody use. This results in a barrier to
entry for potential replacement antibodies which would require at
least partial repetition of the approval process arising on a
change from one antibody to another. This barrier to antibody
replacement arises from a combination of factors driven by the
clinical criticality of the test and the potential consequences of
making such a change which include the time and cost to register
any changes required to validate the performance of the replacement
antibody.
Another consequence of the lengthy approval process is that the
revenue for the current accounting period is derived from
antibodies created many years ago. Indeed, revenue growth over the
next few years from, for example the troponin antibodies, will come
from research work already carried out more than ten years ago. By
the same dynamics, the current research work active at our
laboratories now is more likely to generate sales in the period
2028-2038.
2022/2023 Financial Results
We are pleased to report our results for the financial year
ended 30 June 2023. Revenues for the year increased by 9% to
GBP12.8 million (2021/22: GBP11.7 million). Profits before tax for
the year also increased by 9% to GBP10.1 million (2021/22;
GBP9.3million). Cash balances at the year-end were GBP5.7 million
(30 June 2022 GBP6.1 million).
Our most significant revenue stream continues to come from the
vitamin D antibody called vitD3.5H10. This antibody is used by a
number of small, medium and large diagnostic companies around the
world for use in vitamin D deficiency testing. Sales of vitD3.5H10
increased by 7% to GBP5.8 million which reflects analysts'
expectation for a relatively mature global IVD market.
Sales of our other core historic antibodies are featured below
with the respective percentage increase/decrease from 2021/22:
- T3 (tri-iodothyronine): GBP.1.14 million (+23%)
- biotins and biotin blockers: GBP0.85 million (-5%)
- progesterone: GBP0.75 million (+21%)
- estradiol: GBP0.56 million (-6%)
- testosterone: GBP0.46 million (-3%)
- drug-testing antibodies: GBP0.40 million (+6%)
Troponin is the preferred biomarker to help diagnose heart
attacks. Under an antibody creation contract previously undertaken
with a company subsequently acquired by Siemens, SMAs were created
that facilitated an improved troponin test that was launched by
Siemens in 2017. Total troponin antibody sales from Siemens
Healthineers and another separate technology sub-license increased
by 30% during the year to GBP1.61 million (2021/22: GBP1.23
million). Whilst the percentage growth is less than last year, we
have no reason to doubt that prospective troponin sales in 2024 and
beyond will increase in line with analysts' forecast until June
2032 when contractual payments from our contract with Siemens will
cease.
Our shipments of physical antibody to China continued to
increase. Some sales are made directly but the majority are made
through five appointed distributors. Regulatory approvals for
domestic Chinese customers have considerable lead times but we
continue to see modest increases in royalty payments flowing from
these customers. The prospects for further growth in China are good
although we detect pressure on downstream final assay prices that
has resulted from aggressive purchasing on the part of centralised
procurement organisations. This could exert pressure on Bioventix
as we supply relatively high-cost reagents. We also recognise that
continued antibody technology development in China and elsewhere
constitutes a longer-term threat. In addition, relative global
geopolitical stability will be important for the continued trade in
technology products such as our antibodies.
We estimate that between 50% and 60% of our total revenue is
either directly linked to US Dollars via physical product pricing
in Dollars or indirectly linked to US Dollars via royalties based
on downstream Dollar sales. The remainder of the currency split is
dominated by Euros and important Asian currencies. In past year,
exchange rates have been relatively stable compared to the previous
12 months. Our view continues to be that hedging mechanisms would
not, in the longer term, add value and may have the potential to
add risk to our business. Consequently, future movements in
exchange rates may therefore affect our Sterling revenues.
Cash Flows and Dividends
As reported above, the performance of the business during the
year generated cash balances at the year-end of GBP5.7 million and
royalties received during quarter 3 of 2023 have added to this
balance.
The Board has determined that it is appropriate to maintain the
established dividend policy in the immediate future. For the
current year, the Board is pleased to announce a second interim
dividend of 90 pence per share which, when added to the first
interim dividend of 62 pence per share makes a total of 152 pence
per share for the current year.
Our view continues to be that maintaining a cash balance of
approximately GBP5 million is sufficient to facilitate operational
and strategic agility both with respect to possible corporate or
technological opportunities that might arise in the foreseeable
future. We have therefore decided to distribute surplus cash in our
second interim dividend thereby maintaining our total distribution
to shareholders at 152 pence per share, the same value as that paid
for the previous financial year
Accordingly, a dividend of 90 pence per share will be paid in
November 2023. The shares will be marked ex-dividend on 9 November
2023 and the dividend will be paid on 24 November 2023 to
shareholders on the register at close of business on 10 November
2023.
Changes in the rate of Corporation Tax came into effect from 1
April 2023 increasing the rate of tax from 19% to 25%. This
affected the business for the last quarter of 2022/23 and will
reduce full year cashflows in 2023/24.
Research and Future Developments
Over the next few years, the continued commercial development of
the new troponin assays and their roll out by our customers will
have the most significant influence on Bioventix sales.
We have undertaken a range of new research projects over the
previous few years and in the table below we have illustrated our
current view of their potential value and probability of
success:
Increasing high Secretoneurin (CardiNor) Tau (Alzheimer's,
potential Amyloid (Pre-Diagnostics) own-risk)
value
medium
-------- ---------------------------- -------------------------- ----------------------
Low Industrial biomonitoring Pyrene biomonitoring
(benzene, isocyanates)
-------- ---------------------------- -------------------------- ----------------------
Low Medium high
-------- ---------------------------- -------------------------- ----------------------
Increasing probability of success ->
Whilst antibodies in the future pipeline are at stages of
testing and development that do not allow us to make any prediction
about their definitive value and influence on future revenues there
has still been encouraging progress.
Over the last few years, a considerable amount of lab resource
has been allocated to the tau project and Alzheimer's disease (AD)
diagnostics. AD is a complex disease that manifests itself
differently across the patient population. At a cellular level,
nerve cells (neurons) become associated with amyloid (A) plaques
that build up outside the neurons. This is followed by the build-up
of tau (T) tangles inside the neurons. These pathological processes
then result in neuronal cell death and the symptoms of
neurodegeneration (N) that accompany this. This "ATN" framework is
used by neurologists to define the disease pathway that progresses
many years before patient symptoms become more obvious.
Recent clinical trials of AD therapeutics have produced
remarkable results and there are now two therapeutic agents
(Lecanemab from EISAI Pharma and Donenamab from Eli Lilly) that
whilst not a cure, have been demonstrated to slow the disease
process. Patients presenting early in the ATN pathway appear to
benefit most from therapy and ATN assessments can therefore be used
to screen for patients suitable for therapy and also for monitoring
patients whilst on therapy.
The ATN status of patients can be defined with the use of PET
scans using appropriate amyloid and/or tau contrast agents together
with other assays for biomarkers in cerebral spinal fluid. It would
be desirable if such diagnostic procedures could be replaced or
augmented with cheaper convenient blood tests.
Bioventix has been working with the University of Gothenburg
since early 2020 to create new antibodies to tau and to develop
prototype assays for use in AD.
A leading blood biomarker for "A" is a phosphorylated form of
tau called pTau217. A prototype assay from Gothenburg using an SMA
has now been established which has performed well with frozen
patient samples from a number of different cohorts. The "effect
size" (AD patients relative to controls) has been x2-4 which is
similar to other leading groups and likely to be clinically useful.
The percentage of false positives and false negatives is also
relatively modest confirming potential clinical utility.
For more scientific detail, see: "A novel ultrasensitive assay
for plasma p-tau217: performance in individuals with subjective
cognitive decline and early Alzheimer's disease", Fernando
Gonzalez-Ortiz, Journal of the Alzheimer's Association, accepted
for publication October 2023.
A novel blood-based prototype assay for neurodegeneration (N)
using another Tau SMA has also been developed in Gothenburg. This
work clearly supports the potential utility of this blood test and
further work is on-going in Gothenburg with further publications
planned.
For more detailed scientific information, see:
"Brain-derived tau: a novel blood-based biomarker for
Alzheimer's disease-type neurodegeneration", Fernando
Gonzalez-Ortiz, BRAIN 2022: 00 , and:
"Levels of plasma brain-derived tau and p-tau181 in Alzheimer's
disease and rapidly progressive dementias", Fernando
Gonzalez-Ortiz, Journal of the Alzheimer's Association, accepted
for publication October 2023" .
Precisely how Alzheimer's therapies will be adopted in the
future and how blood tests will be used to support these therapies
will become clearer over the coming years. It is quite likely that
large IVD companies will be part of this development and we have
already sent sample SMAs to some interested parties, accepting that
other tau antibodies and assays already exist. Expert neurology
centres are likely to adopt "research use only" tests in advance of
the availability of other tests through hospital-orientated IVD
companies. The prototype Gothenburg tests are run on Quanterix
(Billerica, MA) machines and so a partnership with Quanterix would
be desirable in this research use field.
Pre-Diagnostics, in Oslo, and their clinical collaborators have
two amyloid beta assays based on Bioventix antibodies available for
research use. A current focus for Pre-Diagnostics is ARIA (amyloid
related imaging abnormality) which is an important side-effect of
new anti-amyloid drugs for Alzheimer's. Pre-Diagnostics assays
relate to amyloid metabolism and could help screen for ARIA
vulnerable patients, before or during treatment.
Our partners at CardiNor, also in Oslo, have continued with
their work to try and identify the possible utility of
secretoneurin in heart failure patients and in particular those
patients who might be candidates for implantable cardiac devices
(ICDs).
Our pyrene lateral flow system for industrial pollution
biomonitoring completed a second field trial at a UK industrial
site during quarter 2 of 2023. This went well and we plan to
conduct additional site studies during 2024. The progress of the
pyrene project has encouraged us to develop additional assays for
benzene and isocyanates, also in the field of industrial health and
safety. Benzene exposure is of relevance to the petroleum industry
and isocyanates are hazardous chemicals used in the manufacture of
polyurethane paints and plastics. This work will continue into 2024
and 2025.
Future Strategy
We have previously identified diagnostic biomarkers that we
believe suit our antibody technology and have found academic
collaborators who have seen merit in working with Bioventix. The
tau project and our collaboration with the University of Gothenburg
is an excellent example of this strategy and we will seek
additional such opportunities in the future.
We will continue to rely on our core SMA antibody creation
technology which consistently helps us to create superior
antibodies for our research projects. We are also incorporating
additional newer technologies where such technologies are helpful
to us. We have successfully created "sandwich" assay formats for
pyrene and THC/cannabis using a combination of primary SMA
technology and a secondary synthetic "anti-complex" antibody
created using the "antibody library" technology of a third party.
The synergy of the two technologies provided unique solutions to
pyrene and THC/cannabis and we will seek more such opportunities in
the field of small molecule detection.
The Bioventix Team and Facility
The composition of the Bioventix team of 12 full-time
equivalents has remained stable over the year facilitating
excellent performance and know-how retention. The past few years
have been a challenging period for everyone and we are very
grateful to the team at Bioventix for their dedication over this
period. This has allowed us to adapt and modify our business to
cope with changing circumstances and to maintain the progress of
our business.
Supply chain issues relating to plastics and chemical reagents
have eased considerably since the pandemic but price increases have
been imposed by most suppliers. This has added further incentive to
increase the productivity of our manufacturing processes.
Change of Name of Nominated Adviser and Broker
The Company also announces that its Nominated Adviser (NOMAD)
and Broker has changed its name to Cavendish Capital Markets
Limited following completion of its own corporate merger.
Conclusion and Outlook
We are pleased with our financial results for the year which we
believe reflect steady growth in the use of our established
products and the continued roll-out of the high sensitivity
troponin assays.
Excellent technical progress has been made with our research
projects and we anticipate that our pipeline of opportunities will
create additional shareholder value in the later 2020s and 2030s
and we look forward to further progress in the years ahead.
For further information please contact:
Bioventix plc Tel: 01252 728 001
Peter Harrison Chief Executive Officer
Cavendish (NOMAD and broker)
Geoff Nash/Simon Hicks Corporate Finance Tel: 020 7220 0500
Nigel Birks/Harriet Ward ECM
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
STATEMENT OF COMPREHENSIVE INCOME FOR YEARED 30 JUNE 2023
2023 2022
Note GBP GBP
Turnover 4 12,816,225 11,719,271
Cost of sales (828,410) (710,446)
----------------- ------------------------
Gross profit 11,987,815 11,008,825
Administrative expenses (1,768,950) (1,605,446)
Difference on foreign exchange (36,679) 92,856
Research and development tax credit 25,243 22,160
Share option charge (174,080) (244,871)
----------------- ------------------------
Operating profit 5 10,033,349 9,273,524
Interest receivable and similar income 8 101,094 4,804
Interest payable and expenses 9 - (303)
----------------- ------------------------
Profit before tax 10,134,443 9,278,025
Tax on profit 10 (1,762,202) (1,603,874)
----------------- ------------------------
Profit for the financial year 8,372,241 7,674,151
================= ========================
Other comprehensive income for the year
----------------- ------------------------
Total comprehensive income for the year 8,372,241 7,674,151
================= ========================
Earnings per share:
2023 2022
160.63 147.32
Basic (pence per share)
Diluted (pence per share) 158.28 145.90
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023
2023 2022
Note GBP GBP
Fixed assets
Tangible assets 12 575,726 694,370
Investments 13 610,039 610,039
--------------- ---------------
1,185,765 1,304,409
Current assets
Stocks 14 565,366 461,815
Debtors: amounts falling due
within one year 15 5,814,761 5,224,717
Cash at bank and in hand 16 5,715,819 6,126,650
--------------- ---------------
12,095,946 11,813,182
Creditors: amounts falling
due within one year 17 (1,199,714) (1,252,165)
--------------- ---------------
Net current assets 10,896,232 10,561,017
--------------- ---------------
Total assets less current
liabilities 12,081,997 11,865,426
Provisions for liabilities
Deferred tax 18 (18,224) (44,276)
--------------- ---------------
(18,224) (44,276)
--------------- ---------------
Net assets 12,063,773 11,821,150
=============== ===============
Capital and reserves
Called up share capital 19 260,983 260,467
Share premium account 20 1,471,315 1,332,471
Capital redemption reserve 20 1,231 1,231
Profit and loss account 20 10,330,244 10,226,981
--------------- ---------------
12,063,773 11,821,150
=============== ===============
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30 JUNE 2023
Called Share Capital Profit and Total
up share premium redemption loss account equity
capital account reserve
GBP GBP GBP GBP GBP
At 1 July 2022 260,467 1,332,471 1,231 10,226,981 11,821,150
Comprehensive income
for the year
Profit for the year - - - 8,372,241 8,372,241
Dividends: Equity capital - - - (8,443,058) (8,443,058)
Shares issued during the
year 516 138,844 - - 139,360
Share option charge - - - 174,080 174,080
---------- ---------- ------------ -------------- ------------
Total transactions with
owners 516 138,844 - (8,268,978) (8,129,618)
---------- ---------- ------------ -------------- ------------
At 30 June 2023 260,983 1,471,315 1,231 10,330,244 12,063,773
========== ========== ============ ============== ============
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30 JUNE 2022
Called Share Capital Profit and Total
up share premium redemption loss account equity
capital account reserve
GBP GBP GBP GBP GBP
At 1 July 2021 260,467 1,332,471 1,231 10,226,145 11,820,314
Comprehensive income
for the year
Profit for the year - - - 7,674,151 7,674,151
Dividends: Equity capital - - - (7,918,186) (7,918,186)
Transfer to/from profit
and loss account - - - 244,871 244,871
---------- ---------- ------------ -------------- ------------
Total transactions with
owners - - - (7,673,315) (7,673,315)
---------- ---------- ------------ -------------- ------------
At 30 June 2022 260,467 1,332,471 1,231 10,226,981 11,821,150
========== ========== ============ ============== ============
STATEMENT OF CASHFLOWS FOR THE YEARED 30 JUNE 2023
2023 2022
GBP GBP
Cash flows from operating activities
Profit for the financial year
Adjustments for: 8,372,241 7,674,151
Depreciation of tangible assets 129,227 143,392
Loss on disposal of tangible assets - 17,714
Interest paid - 303
Interest received (101,094) (4,804)
Taxation charge 1,762,202 1,603,874
(Increase) in stocks (103,551) (129,356)
(Increase) in debtors (626,550) (598,752)
(Decrease)/increase in creditors (52,612) 76,347
Corporation tax (paid) (1,751,587) (1,470,634)
Share option charge 174,080 244,871
--------------- ----------------
Net cash generated from operating activities 7,802,356 7,557,106
--------------- ----------------
Cash flows from investing activities
Purchase of tangible fixed assets (10,583) (11,756)
Interest received 101,094 4,804
--------------- ----------------
Net cash from investing activities 90,511 (6,952)
--------------- ----------------
Cash flows from financing activities
Issue of ordinary shares 139,360 -
Dividends paid (8,443,058) (7,918,186)
Interest paid - (303)
--------------- ----------------
Net cash used in financing activities (8,303,698) (7,918,489)
--------------- ----------------
Net (decrease) in cash and cash equivalents (410,831) (368,335)
Cash and cash equivalents at beginning of year 6,126,650 6,494,985
--------------- ----------------
Cash and cash equivalents at the end of year 5,715,819 6,126,650
=============== ================
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand 5,715,819 6,126,650
--------------- ----------------
5,715,819 6,126,650
=============== ================
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
1. General information
Bioventix Plc (04923945), a company creating and manufacturing
sheep monoclonal antibodies, is a public limited company registered
in England and Wales. The Registered Office is 27-28 Eastcastle
Street, London, W1W 8DH and its principal place of business is 7
Romans Business Park, East Street, Farnham GU9 7SX.
2. Accounting policies
2.1 Basis of preparation of financial statements
The financial statements have been prepared under the historical
cost convention unless otherwise specified within these accounting
policies and in accordance with Financial Reporting Standard 102,
the Financial Reporting Standard applicable in the UK and the
Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS
102 requires the use of certain critical accounting estimates. It
also requires management to exercise judgment in applying the
Company's accounting policies (see note 3).
The following principal accounting policies have been
applied:
2.2 Revenue
Turnover is recognised for product supplied or services rendered
to the extent that it is probable that the economic benefits will
flow to the Company and the turnover can be reliably measured.
Turnover is measured as the fair value of the consideration
received or receivable, excluding discounts, rebates, value added
tax and other sales taxes. The following criteria determine when
turnover will be recognised:
Direct sales
Direct sales are generally recognised at the date of dispatch
unless contractual terms with customers state that risk and title
pass on delivery of goods, in which case revenue is recognised on
delivery.
R&D income
Subcontracted R&D income is recognised based upon the stage
of completion at the year-end.
Licence revenue and royalties
Annual licence revenue is recognised, in full, based upon the
date of invoice. Royalties are accrued over period to which they
relate and revenue is recognised based upon returns and
notifications received from customers. In the event that subsequent
adjustments to royalties are identified they are recognised in the
period in which they are identified.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
2. Accounting policies (continued)
2.3 Foreign currency translation Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the spot exchange rates at the dates of the
transactions.
At each period end foreign currency monetary items are
translated using the closing rate. Non- monetary items measured at
historical cost are translated using the exchange rate at the date
of the transaction and non-monetary items measured at fair value
are measured using the exchange rate when fair value was
determined.
2.4 Interest income
Interest income is recognised in profit or loss using the
effective interest method.
2.5 Finance costs
Finance costs are charged to profit or loss over the term of the
debt using the effective interest method so that the amount charged
is at a constant rate on the carrying amount. Issue costs are
initially recognised as a reduction in the proceeds of the
associated capital instrument.
2.6 Pensions
Defined contribution pension plan
The Company operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Company pays fixed contributions into a separate entity.
Once the contributions have been paid the Company has no further
payment obligations.
The contributions are recognised as an expense in profit or loss
when they fall due. Amounts not paid are shown in accruals as a
liability in the Statement of financial position. The assets of the
plan are held separately from the Company in independently
administered funds.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
2. Accounting policies (continued)
2.7 Current and deferred taxation
Current and deferred tax are recognised as an expense or income
in the Statement of Comprehensive Income, except when they relate
to items credited or debited directly to equity, in which case the
tax is also recognised directly in equity. The current income tax
charge is calculated on the basis of tax rates and laws that have
been enacted or substantively enacted by the reporting date in the
countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing
differences that have originated but not reversed by the reporting
date, except that:
-- The recognition of deferred tax assets is limited to the
extent that it is probable that they will be recovered against the
reversal of deferred tax liabilities or other future taxable
profits; and
-- Any deferred tax balances are reversed if and when all
conditions for retaining associated tax allowances have been
met.
Deferred tax balances are not recognised in respect of permanent
differences except in respect of business combinations, when
deferred tax is recognised on the differences between the fair
values of assets acquired and the future tax deductions available
for them and the differences between the fair values of liabilities
acquired and the amount that will be assessed for tax. Deferred tax
is determined using tax rates and laws that have been enacted or
substantively enacted by the reporting date.
2.8 Research and development
Research and development expenditure is written off in the year
in which it is incurred.
2.9 Tangible fixed assets
Tangible fixed assets under the cost model are stated at
historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is
directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by management.
Land is not depreciated. Depreciation on other assets is charged
so as to allocate the cost of assets less their residual value over
their estimated useful live
Freehold property - 2% straight line
Plant and equipment - 25% straight line
Motor Vehicles - 25% straight line
Fixtures & Fittings - 25% straight line
Office equipment - 25% straight line
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
2. Accounting policies (continued)
2.10 Valuation of investments
Investments in unlisted Company shares, whose market value can
be reliably determined, are remeasured to market value at each
reporting date. Gains and losses on remeasurement are recognised in
the Statement of comprehensive income for the period. Where market
value cannot be reliably determined, such investments are stated at
historic cost less impairment.
2.11 Stocks
Stocks are stated at the lower of cost and net realisable value,
being the estimated selling price less costs to complete and sell.
Cost includes all direct costs and an appropriate proportion of
fixed and variable overheads.
At each balance sheet date, stocks are assessed for impairment.
If stock is impaired, the carrying amount is reduced to its selling
price less costs to complete and sell. The impairment loss is
recognised immediately in profit or loss.
2.12 Debtors
Short-term debtors are measured at transaction price, less any
impairment. Loans receivable are measured initially at fair value,
net of transaction costs, and are measured subsequently at
amortised cost using the effective interest method, less any
impairment.
2.13 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial
institutions repayable without penalty on notice of not more than
24 hours. Cash equivalents are highly liquid investments that
mature in no more than twelve months from the date of acquisition
and that are readily convertible to known amounts of cash with
insignificant risk of change in value.
2.14 Creditors
Short-term creditors are measured at the transaction price.
Other financial liabilities, including bank loans, are measured
initially at fair value, net of transaction costs, and are measured
subsequently at amortised cost using the effective interest
method.
2.15 Provisions for liabilities
Provisions are made where an event has taken place that gives
the Company a legal or constructive obligation that probably
requires settlement by a transfer of economic benefit, and a
reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the
year that the Company becomes aware of the obligation, and are
measured at the best estimate at the reporting date of the
expenditure required to settle the obligation, taking into account
relevant risks and uncertainties.
When payments are eventually made, they are charged to the
provision carried in the Statement of financial position.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
2. Accounting policies (continued)
2.16 Financial instruments
The Company only enters into basic financial instrument
transactions that result in the recognition of financial assets and
liabilities like trade and other debtors and creditors, loans from
banks and other third parties, loans to related parties and
investments in ordinary shares.
2.17 Dividends
Equity dividends are recognised when they become legally
payable. Interim equity dividends are recognised when paid. Final
equity dividends are recognised when approved by the shareholders
at an annual general meeting.
2.18 Employee benefits-share-based compensation
The company operates an equity-settled, share-based compensation
plan. The fair value of the employee services received in exchange
for the grant of the options is recognised as an expense over the
vesting period. The total amount to be expensed over the vesting
period is determined by reference to the fair value of the options
granted. At each balance sheet date, the company will revise its
estimates of the number of options are expected to be exercisable.
It will recognise the impact of the revision of original estimates,
if any, in the profit and loss account, with a corresponding
adjustment to equity. The proceeds received net of any directly
attributable transaction costs are credited to share capital
(nominal value) and share premium when the options are
exercised.
3. Judgments in applying accounting policies and key sources of estimation uncertainty
In the application of the company's accounting policies (as
described in note 2), management is required to make judgments,
estimates and assumptions. These estimates and underlying
assumptions are reviewed on an ongoing basis.
Carrying value of Unlisted investments
The Company holds two unlisted investments in companies carrying
out research in identifying biomarkers for diagnosing health
conditions. The directors have reviewed the progress of this
research over the last year. In common with much scientific
research there is uncertainty, both in relation to the science and
to the commercial outcome, and no information to be able to
reliably calculate a fair value for these investments. The carrying
value of these investments will continue to be historic cost.
Valuation of Share based payments
The Company operates two share option schemes: an Approved EMI
Share Option Scheme and an Unapproved Share Option Scheme. In
calculating the charge to profit or loss in respect of options
granted to employees under these schemes the Company has applied
the requirements of FRS 102 which includes making estimates for
both the expected volatility of the Company's shares and the risk
free interest rate the details of which are shown in Note 21 to the
accounts.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
4. Turnover
An analysis of turnover by class of business is
as follows:
2023 2022
GBP GBP
Product revenue and R&D income 4,232,829 3,592,556
Royalty and licence fee income 8,583,396 8,126,715
---------------- ----------------
12,816,225 11,719,271
================ ================
2023 2022
GBP GBP
United Kingdom 961,904 787,046
European Union 1,604,187 1,327,360
Rest of the world 10,250,134 9,604,865
---------------- ----------------
12,816,225 11,719,271
================ ================
5. Operating profit
The operating profit is stated after charging:
2023 2022
GBP GBP
Depreciation of tangible fixed assets 129,227 143,392
Fees payable to the Company's auditor and its
associates for the audit of the Company's annual
financial statements 25,000 22,000
Exchange differences 36,679 (92,856)
Research and development costs 1,201,398 975,317
================ ================
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
6. Employees
Staff costs, including directors' remuneration,
were as follows:
2023 2022
GBP GBP
Wages and salaries 1,001,959 876,375
Social security costs 119,075 105,337
Share option charge 174,080 244,871
Cost of defined contribution scheme 71,513 34,563
-------------- --------------
1,366,627 1,261,146
============== ==============
The average monthly number of employees, including the
directors, during the year was as follows:
2023 2022
No. No.
Management and administration
5 5
Scientific
11 11
16 16
7. Directors' remuneration
2023 2022
GBP GBP
Directors' emoluments
412,059 368,996
Company contributions to defined contribution pension schemes 36,890 12,578
448,949 381,574
During the year retirement benefits were accruing to 1 director
(2022 - 1) in respect of defined contribution pension schemes.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
8. Interest receivable
2023 2022
GBP GBP
Other interest receivable
101,094 4,804
101,094 4,804
9. Interest payable and similar expenses
2023 2022
GBP GBP
Other interest payable
- 303
- 303
10. Taxation
Corporation tax
2023 2022
GBP GBP
Current tax on profits for the year 1,788,254
1,637,682
Total current tax
1,788,254 1,637,682
Deferred tax
Origination and reversal of timing differences (26,052)
(33,808)
Total deferred tax
(26,052) (33,808)
Taxation on profit on ordinary activities 1,762,202
1,603,874
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
10. Taxation (continued)
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2022 - lower than)
the standard rate of corporation tax in the UK
of 25% (2022 - 19%) . The differences are explained below:
2023 2022
GBP GBP
Profit on ordinary activities before tax 10,134,443 9,278,025
================= ===============
Profit on ordinary activities multiplied by standard
rate of corporation tax in the UK of 25% (2022
- 19%) 2,533,611 1,762,825
Effects of:
Expenses not deductible for tax purposes, other
than goodwill amortisation and impairment 341 83
Capital allowances for year in excess of depreciation 27,289 27,048
Research and development tax credit (356,784) (198,799)
Share based payments (23,222) 46,525
Deferred tax movement (26,052) (33,808)
Change in tax rate during the year (392,981) -
----------------- ---------------
Total tax charge for the year 1,762,202 1,603,874
================= ===============
Factors that may affect future tax charges
The rate of corporation tax increased from 19%
to 25% on 1 April 2023. This change will increase
the tax charge in future years such that, had
the change been effective for in place throughout
the current year, it would have increased by GBP
392,980, from GBP 1,762,202 to GBP 2,155,182.
11. Dividends
2023 2022
GBP GBP
Dividends paid
162 pence per share (2022: 142 pence per share) 8,443,058 7,918,186
----------------- ---------------
8,443,058 7,918,186
================= ===============
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
12. Tangible fixed assets
Freehold propert Plant & Machinery Motor Vehicles Fixtures
& Fittings O fice Equipment
GBP GBP GBP GBP GBP
Cost
At 1 July 2022 475,000 472,107 13,090 407,115
36,610
Additions - 7,420 -
- 3,163
Disposals - - -
- (248)
At 30 June 2023 475,000 479,527 13,090 407,115
39,525
Depreciation
At 1 July 2022 149,625 326,064 4,909 205,457
23,497
Charge for the year on
owned assets 7,125 55,962 3,273 58,137
4,730
Disposals - - -
- (248)
At 30 June 2023 156,750 382,026 8,182 263,594 27,979
---------------- ---------------- ----------------- ---------------- ----------------
Net book value
At 30 June 2023 318,250 97,501 4,908 143,521 11,546
================ ================ ================= ================ ================
At 30 June 2022 325,375 146,043 8,181 201,658 13,113
================ ================ ================= ================ ================
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
12. Tangible fixed assets (continued)
Total
GBP
Cost
At 1 July 2022 1,403,922
Additions 10,583
Disposals (248)
------------------
At 30 June 2023 1,414,257
------------------
Depreciation
At 1 July 2022 709,552
Charge for the year on owned assets 129,227
Disposals (248)
------------------
At 30 June 2023 838,531
------------------
Net book value
At 30 June 2023 575,726
==================
At 30 June 2022 694,370
==================
Included within land and buildings is freehold land at cost of
GBP118,750 which is not depreciated. (2022 -
GBP118,750).
13. Fixed asset investments
Unlisted Investments
GBP
Cost
At 1 July 2022
610,039
At 30 June 2023
610,039
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE
2023
14. Stocks 2023 2022
GBP GBP
Finished goods and goods for resale 565,366 461,815
----------------- -----------------
565,366 461,815
================= =================
15. Debtors
2023 2022
GBP GBP
Trade debtors 1,170,512 754,039
Other debtors 501 10,402
Prepayments and accrued income 4,643,748 4,460,276
----------------- -----------------
5,814,761 5,224,717
================= =================
16. Cash and cash equivalents
2023 2022
GBP GBP
Cash at bank and in hand 5,715,819 6,126,650
----------------- -----------------
5,715,819 6,126,650
================= =================
Analysis of Net Debt: At 1 July 2022 Cash Flows At 30 June 2023
GBP GBP GBP
Cash at bank and in hand 6,126,650 (410,831) 5,715,819
--------------- ----------- ----------------
17. Creditors: Amounts falling due within one year
2023 2022
GBP GBP
Trade creditors 77,725 157,280
Corporation tax 709,259 709,098
Other taxation and social security 76,298 22,666
Accruals and deferred income 336,432 363,121
-------------- --------------
1,199,714 1,252,165
============== ==============
18. Deferred taxation 2023 2022
GBP GBP
At beginning of year (44,276) (78,084)
Charged to profit or loss 26,052 33,808
------------------ ------------------
At end of year (18,224) (44,276)
================== ==================
The provision for deferred taxation is made up
as follows:
2023 2022
GBP GBP
Accelerated capital allowances (18,224) (44,276)
------------------ ------------------
(18,224) (44,276)
================== ==================
19. Share capital
2023 2022
GBP GBP
Allotted, called up and fully paid
5,219,656 (2022 - 5,209,333) Ordinary shares
of GBP0.05 each 260,983 260,467
================== ==================
The holders of ordinary shares are entitled to receive dividends
as declared and are entitled to one vote per share at meetings of
the Company. All ordinary shares rank equally with regard to the
Company's residual assets.
10,323 ordinary shares were issued during the year at GBP13.50
per share.
20. Reserves
Share premium account
The share premium reserve contains the premium arising on issues
of equity shares, net of issue expenses.
Capital redemption reserve
The capital redemption arose on the buy-back of shares by the
company.
Profit & loss account
The profit and loss reserve represents cumulative profits or
losses, net of dividends paid and other adjustments.
21. Share based payments
During the year the company operated 2 share option schemes; an
Approved EMI Share Option Scheme and an Unapproved Share Option
Scheme to incentivise employees.
The company has applied the requirements of FRS 102 Section 26
Share-based Payment to all the options granted under both schemes.
The terms for granting share options under both schemes are the
same and provide for an option price equal to the market value of
the Company's shares on the date of the grant and for the Approved
EMI Share Option Scheme this price is subsequently agreed with HMRC
Shares and Assets Valuation Division.
The contractual life of an option under both schemes is 10 years
from the date of grant. Options granted become exercisable on the
third anniversary of the date of grant. Exercise of an option is
normally subject to continued employment, but there are also
considerations for good leavers. All share based remuneration is
settled in equity shares.
Weighted average exercise price (pence) 2023 Number 2023
Weighted average exercise price (pence) 2022 Number 2022
Outstanding at the beginning of the year 2896 51,996 2942
53,702
Granted during the year 3855 39,708
-
Forfeited during the year 3855 (4,101)
3855 (1,706)
Exercised during the year 1350 (10,323)
-
Outstanding at the end of the year 77,280
51,996
2023 2022
Option pricing model used
Black Scholes Black Scholes
Issue price
GBP13.50- GBP38.50 GBP13.50- GBP38.55
Exercise price (pence)
GBP13.50- GBP38.50 GBP13.50- GBP38.55
Option life
10 years 10 years
Expected volatility
7.459% 25.15%
Fair value at measurement date GBP4.66 -
GBP26.91 GBP4.66 - GBP26.91
Risk-free interest rate
1.5% 1.8%
The expected volatility for the options issued in the year is
based upon the volatility over the past 12 months. For previous
years it was based upon the historical volatility over the period
since the Company's shares were listed on AIM.
The expense recognised for share-based payments during the year
ended 30 June 2023 was GBP174,080 (2022 : GBP244,871).
The number of staff and officers holding share options at 30
June 2023 was 16 (2022: 13). The share options have been issued to
underpin staff service conditions.
21. Earnings per share
The weighted average number of shares in issue for the basic
earnings per share calculation is 5,212,220 (2022: 5,209,333) and
for the diluted earnings per share, assuming the exercise of all
share options is 5,289,501 (2022: 5,259,831).
The calculation of the basic earnings per shares is based on the
profit for the period of GBP8,372,241 (2022:
GBP7,674,151) divided by the weighted average number of shares
in issue of 5,212,220 (2022: 5,209,333), the basic earnings per
share is 160.63p (2022: 147.32p). The diluted earnings per share,
assuming the exercise of all of the share options is based on
5,289,501 (2022: 5,259,831) shares and is 158.28p (2022:
145.90).
22. Pension commitments
The company operates a defined contributions pension scheme. The
assets of the scheme are held separately from those of the company
in an independently adminstered fund. The pension charge represents
contributions payable by the company to the fund and amounted to
GBP71,512 (2022: GBP34,563). No contributions were owing at the
year end (2022: GBPnil).
23. Related party transactions
During the year a dividend of GBP775,764 (2022: GBP633,348) was
paid to a director and his wife.
24. Controlling party
During the year there has not been an individual controlling
party.
25. Earnings per share
The weighted average number of shares in issue for the basic
earnings per share calculation is 5,212,220 (2022: 5,209,333) and
for the diluted earnings per share, assuming the exercise of all
share options is 5,289,501 (2022: 5,259,831).
The calculation of the basic earnings per shares is based on the
profit for the period of GBP8,372,241 (2022: GBP7,674,151) divided
by the weighted average number of shares in issue of 5,212,220
(2022: 5,209,333), the basic earnings per share is 160.63p (2022:
147.32p). The diluted earnings per share, assuming the exercise of
all of the share options is based on 5,289,501 (2022: 5,259,831)
shares and is 158.28p (2022: 145.90).
26. Pension commitments
The company operates a defined contributions pension scheme. The
assets of the scheme are held separately from those of the company
in an independently adminstered fund. The pension charge represents
contributions payable by the company to the fund and amounted to
GBP71,512 (2022: GBP34,563). No contributions were owing at the
year end (2022: GBPnil).
27. Related party transactions
During the year a dividend of GBP775,764 (2022: GBP633,348) was
paid to a director and his wife.
28. Controlling party
During the year there has not been an individual controlling
party.
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END
FR NKFBNNBDDAKB
(END) Dow Jones Newswires
October 30, 2023 03:00 ET (07:00 GMT)
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