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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Allergy Therapeutics Plc | LSE:AGY | London | Ordinary Share | GB00B02LCQ05 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.85 | 2.80 | 2.90 | 2.85 | 2.85 | 2.85 | 850,862 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Pharmaceutical Preparations | 59.59M | -43.07M | -0.0090 | -3.17 | 135.84M |
From Apr 2019 to Apr 2024
TIDMAGY
RNS Number : 8178A
Allergy Therapeutics PLC
29 March 2017
Manuel Llobet, Chief Executive Officer, and Nick Wykeman, Finance Director, will host a meeting and call for analysts to provide an update on the Group, followed by a Q&A session, at 0900 BST today. Dial-in details are: +44 (0) 1452 555566. Conference ID: 75062637.
Allergy Therapeutics plc
("Allergy Therapeutics" or "the Group")
Interim Results for the six months ended 31 December 2016
29 March 2017 Allergy Therapeutics plc (AIM:AGY), the fully integrated specialty pharmaceutical group specialising in allergy vaccines, announces its unaudited interim results for the six months ended 31 December 2016.
Highlights (including post period end highlights)
Financial highlights
-- Revenue increased by 18% at constant currency to GBP34.2m (H1 2016: GBP29.0m)* while reported revenue increased by 39% to GBP40.4m (H1 2016: GBP29.0m)
-- R&D expenditure of GBP3.8m (H1 2016: GBP6.5m) following a higher level of investment in Phase II trials in H1 2016
-- Strong growth in operating profit pre R&D of 40% as a result of broad investment in the business to GBP11.1m (H1 2016: GBP7.9m) and the strength of the euro against sterling
-- Cash balance of GBP27.8m (H1 2016: GBP33.2m)
Products and pipeline highlights
-- Increased market share in the Group's main European markets to 13% (2016: 12%) against a low to flat market
-- Pollinex franchise continues to expand and shape the market as a more convenient treatment -- First patient recruited in pivotal Pollinex Quattro Birch Phase III study in Europe
-- US Grass MATA MPL programme proceeding as planned with the safety trial (G104) advancing to a dosing trial in H2 2017
-- CTA approval in Spain for Phase I clinical study investigating the safety and tolerability of Acarovac MPL (monophosphoryl lipid A)
-- Positive proof of concept preclinical trial results announced with Polyvac(R) Peanut, the Group's peanut allergy vaccine
Commenting on the interim results, Manuel Llobet, Chief Executive Officer, said: "In the first half of this year, we delivered an increase of 18% in revenue at constant currency, despite flat or low growth in European markets, driven by the quality of the Group's highly convenient, ultra-short course, aluminium-free therapy enabling us to continue to gain market share. This, linked to the recent announcements on progress with our pipeline projects, illustrates that the approach of investing both in the current business as well as the pipeline is working, paving the way for our long-term strategic international plans for a world-class allergy vaccines portfolio."
*Constant currency uses prior year weighted average exchange rates to translate current year foreign currency denominated revenue to give a year on year comparison excluding the effects of foreign exchange movements. See table in financial review for an analysis of revenue.
Conference call
Manuel Llobet, Chief Executive Officer, and Nick Wykeman, Finance Director, will host a conference call for analysts at 0900 BST today.
UK: +44 1452 555 566
Conference ID: 75062637
A replay of the call will be available for 30 days after the event and can be accessed through the numbers below.
UK: +44 1452 550 000 USA: +1 866 247 4222
Conference ID: 75062637
The results presentation will be made available on the Investor section of Allergy Therapeutics' website shortly before the call.
For further information, please contact:
Allergy Therapeutics
+44 (0) 1903 845 820
Manuel Llobet, Chief Executive Officer
Nick Wykeman, Finance Director
Panmure Gordon
+44 (0) 20 7886 2500
Freddy Crossley / Duncan Monteith, Corporate Finance
Tom Salvesen, Corporate Broking
Consilium Strategic Communications
+44 20 3709 5700
Mary-Jane Elliott / Ivar Milligan
allergytherapeutics@consilium-comms.com
Notes for editors:
About Allergy Therapeutics
Allergy Therapeutics is an international specialty pharmaceutical company focussed on the treatment and diagnosis of allergic disorders including immunotherapy vaccines that cure disease. The Company sells proprietary products and third party products from its subsidiaries in nine major European countries and via distribution agreements in an additional ten countries.
Formed in 1999 out of Smith Kline Beecham, Allergy Therapeutics is headquartered in Worthing, UK with MHRA-approved manufacturing facilities. The Company employs c.495 employees and is listed on the London Stock Exchange (AIM:AGY). For more information, please see www.allergytherapeutics.com.
Joint Statement from the Chairman and Chief Executive Officer
Operating Review
Overview
During the first six months of the year, the Group's revenues grew by 18% (at constant currency) compared to 16% on a like-for-like basis (19% including acquisition) during the year ended 30 June 2016, despite flat or low growth in European markets. This continued high level of growth reflects both the quality of the Group's highly convenient, aluminium-free therapy and the service levels of the Group's supply chain and customer teams which has enabled the Group to continue to gain market share. In terms of markets, Germany, Austria, Spain and The Netherlands have contributed the most although all markets have shown growth.
Furthermore, the overall performance of the business continued strongly with operating profit pre R&D growing 40% to GBP11.1m (H1 2016: GBP7.9m). This performance underpins the investment in R&D to support the current product portfolio and pipeline and underscores the long-term ambitions for the Group.
The Market
Allergy Therapeutics continues to gain market share in its core European markets. In the year to 31 December 2016, market share grew to 13% compared to 12% in the year ended 30 June 2016 in the markets in which the Group competes. The revenue figures for the first half of the financial year show that that the Pollinex franchise continues to expand and shape the market as a more convenient treatment. The value of this to patients cannot be underestimated given that most competitor products have on average 12-14 injections or need daily dosing, requiring additional time and effort as well as cost. Moreover, the investment made in commercial infrastructure in the last financial year continues to benefit the Group. Acarovac Plus(TM) continues to grow well in Spain and has been launched in Austria while Synbiotics product sales in Italy and Spain have performed well.
The Group has continued to invest in regulatory, quality assurance and manufacturing facilities to ensure a robust and high quality supply chain. This has led to gains in market share when competitors have had supply chain problems. In an industry where there is a high level of interaction between the doctor/allergist and patient, product quality and credibility is critical and this has benefited the Group.
Regulatory Affairs & Clinical Development
Good progress continues to be made in the German TAV (Therapy Allergy Ordinance) process. As disclosed in March, the Group has now recruited the first patient for the pivotal Phase III Pollinex Quattro Birch study in Europe (B301), which is expected to start in H2 2017. If successful, and if approved, the next step is expected to lead to a market authorisation. All ten of the Group's products which were submitted to the TAV process are still in development. The data available shows that 30% of the products that were on the market and submitted for the TAV process have dropped out and are no longer allowed to be sold in Germany (Dr Vieths, 2016).
On the US Pollinex Quattro Grass MATA MPL studies, the safety study to evaluate an additional dosing strength is currently being undertaken in the US (G104). Following the previous Phase II trial undertaken in the US, an additional Phase II trial for Pollinex Quattro Grass (G205) using conjunctival provocation testing is expected to start in H2 2017 in Europe ahead of the planned pivotal Phase III trial (G306).
As disclosed in February, the Group has received CTA approval to start a Phase I trial for Acarovac MPL (AM101), a subcutaneous house dust mite immunotherapy using the Pollinex Quattro technology platform. This trial is expected to be completed in the second half of this calendar year.
During the period under review, further patents were granted for the manufacturing process of the Pollinex platform in both Europe and the US, adding to the microcrystalline tyrosine (MCT(R) ) patent which runs to 2032.
Bencard Adjuvant Systems
This division of the Group focuses on adjuvants and their application in fields outside of allergy. Initial work has focused on MCT and its use as a key part of different adjuvant systems and to enhance immunogenicity of different vaccines. Further studies have been undertaken using MCT in combination with 1- Influenza (Heath et al, in press) and 2- with malaria (Cabral-Miranda et al, submitted) and 3- malaria, and virus like particles (VLP) (Cabral-Miranda et al, submitted) all showing enhanced efficacy improving T and B cell immunogenicity and protection against P.berghei/vivax.
The malaria study indicated that MCT is superior in comparison with aluminium and that MCT offers optimal compatibility and immunological synergy with other adjuvants and immunomodulators such as VLPs. Work on VLP, the technology licenced last year, will continue to focus mainly on peanut allergy.
VLP- Peanut Allergy
As announced in February, positive results were achieved from preclinical research into its unique therapeutic peanut allergy vaccine, Polyvac(R) Peanut. Having delivered these positive preclinical Proof of Concept results, the Group will now progress the vaccine in accordance with its stated strategic plan when funding the programme and will proceed to Phase I development following completion of the pre-clinical studies.
The findings demonstrate that a single dose of the Group's VLP adjuvant combined with recombinant peanut allergen successfully protected against anaphylaxis when challenged with peanut. Additionally, when examining symptom scores in the investigational model, those vaccinated with the candidate vaccine exhibited no symptoms compared to placebo when challenged with peanut. Furthermore, the safety profile of the product was evaluated via an intravenous challenge and found that the vaccine itself did not induce anaphylaxis in peanut sensitised subjects (a hypoallergenic vaccine).
Allergy Therapeutics' innovative peanut vaccine is focussed on a subcutaneous application of recombinant peanut allergen coupled with its state-of-the-art VLP adjuvant to increase the safety and efficacy profile. This approach aims to induce protective immunity, enabling shorter therapy duration and an enhanced safety profile and thus has significant implications for peanut allergy therapy with the potential to redefine the market for food allergy products. Alternative peanut vaccines in development often require repeated and long-lasting exposure transdermally or orally, which may limit patient adherence.
Food allergy represents a significant and strategically important area for the Group, with peanut allergy treatments alone being an $8 billion p.a. (The Journal of Allergy and Clinical Immunology 2016. 1% of US population. EACCI Food Allergy and Anaphylaxis Guidelines Group 2016 0.2% of Western European Population. Management assumption of annual treatment of $2k) addressable market globally. Allergy Therapeutics has the exclusive rights to develop VLP technology, a carrier system to present allergens to the immune system, for allergy vaccines.
Financial Review
Reported revenues for the first half of the financial year were GBP40.4m (H1 2016: GBP29.0m), representing a growth of 18% at constant currency, despite low to flat markets in Europe. The growth rate reported after taking into account currency movements was 39% with the positive impact on revenues from the strengthening euro being GBP6.2m. This double digit sales growth has been driven primarily by the Group's investment in infrastructure and broadening of the product portfolio as it continues to increase its market share in all of its main markets.
A reconciliation between reported revenues and revenues in constant currency is provided in the table below:
Hot Features
Premium
6 months to 6 months to Increase Increase
31-Dec-16 31-Dec-15
GBPm GBPm GBPm %
Revenue 40.4 29.0 11.4 39%
Adjustment to retranslate to prior year foreign exchange (6.2) -
rate
------------------------------------------------------------ ------------ ------------------ ----------- ---------
Revenue at constant currency 34.2 29.0 5.2 18%
Add rebates at constant currency 3.2 2.4 0.8
------------------------------------------------------------ ------------ ------------------ ----------- ---------
Gross revenue at constant currency 37.4 31.4 6.0 19%
As in previous years, owing to the seasonality of the pollen allergy market, between 60% to 70% of Allergy Therapeutics' revenues are generated in the first half of the financial year and, as a consequence, the Group typically records profits in the first half of the year and losses in the second half.
Cost of goods sold increased marginally in the period to GBP8.9m (H1 2016: GBP7.3m), mainly due to higher volumes and currency effect on Spanish manufacturing. Gross profit improved to GBP31.5m (H1 2016: GBP21.6m), which represents a gross margin of 78% (H1 2016: 75%), reflecting the currency impact on the revenue line.
Sales, marketing and distribution costs of GBP13.8m (H1 2016: GBP9.8m) were higher than the previous period reflecting in roughly equal measures the impact of the strong euro and the investment in distribution made in the second half of 2016 to help accelerate revenue growth. Administration expenses of GBP6.6m (H1 2016: GBP3.9m) rose due to the benefit last year of the stronger dollar revaluing US dollar deposits favourably by GBP1.1m, investment in compliance and the current year negative impact of the fair valuation of euro denominated derivatives (GBP0.4m).
Research and development costs of GBP3.8m (H1 2016: GBP6.5m), reflected the higher level of activity in H1 2016 due to Phase II work in Europe and US last year.
The tax charge in the period of GBP0.4m (H1 2016: GBP0.2m) relates to overseas subsidiaries and the increase reflects the growing profitability of the subsidiaries.
Property, plant and equipment was unchanged in the period but increased by GBP0.9m to GBP9.7m compared to the year before, mainly as a result of investment in new plant to increase capacity and efficiency and improvements to the Worthing offices. The depreciation charge increased GBP0.1m reflecting this investment in the plant. Goodwill increased to GBP3.4m reflecting the currency impact of the goodwill in Spain (H1 2016: GBP3.1m), whilst other intangible assets have risen by GBP0.1m.
Total current assets excluding cash have increased by GBP3.7m to GBP17.7m (H1 2016: GBP14.0m). This is mainly due to an increase in debtors reflecting the higher sales and the different sales channel used for Synbiotics.
Retirement benefit obligations, which relate solely to the German pension scheme, increased to GBP9.6m (H1 2016: GBP7.5m) as a result of the movement in the sterling-euro exchange rate as well as the reduction in the discount rate.
Net cash generated by operations was strongly positive, due to significantly lower R&D spending in H1 2017 as well as the strong trading result, with a reported inflow of GBP5.4m (H1 2016: GBP0.6m).
Financing
The Group had debt on its balance sheet at the close of the financial year relating to loans held in the Spanish subsidiary of GBP3.4m (H1 2016 GBP1.6m). The seasonal overdraft was not used during the calendar year 2016 but the Group expects to renew its banking facilities when they are due for review in April 2017. The Group drew down GBP0.1m of debt from its facility in Spain during the period.
The Directors believe that the Group will have adequate facilities for the foreseeable future and accordingly they have applied the going concern principle in preparing these interim financial statements.
Movements in the currency markets between the respective values of the euro and sterling have an effect on the Group's operations. The Group manages its cash exposure in this respect by foreign currency hedges. Over 90% of our gross sales are denominated in euros whereas approximately 50% of costs are incurred in the United Kingdom and denominated in sterling.
Other Matters
As disclosed in Note 4 (Contingent liabilities), on 23 February 2015, the Group received notification that The Federal Office for Economics and Export ("BAFA") had made a decision to reverse their preliminary exemption to the increased manufacturers rebate in Germany for the period July to December 2012. After taking legal advice, the Group has lodged an appeal against this decision and our advice gives us confidence that the exemption will be re-instated. Therefore, as at 31 December 2016, no provision has been recognised for the repayment of the rebate refund. This position will be kept under review. The potential liability is EUR1.4m (GBP1.1m).
The European Commission has concluded its investigation into whether the exemption of pharmaceutical manufacturers from the increase in rebates in Germany constitutes state aid. The European Commission has determined that the exemptions do not constitute state aid but an appeal has been lodged at the EU Court against this decision. If successful, this would lead to a repayment of approximately GBP5m (including the GBP1.1m referred to above); however, following advice that this is an unlikely outcome, the Group has not disclosed any contingent liability.
The Group is in discussion with one of its suppliers and their lawyers over potential cost overruns on one of its clinical trials which may lead to additional expense for the Group.
Outlook
The Board and management team expect that growth in net sales will continue in the second half of the year and have great confidence in the future of the business. As planned, research and development costs are expected to rise significantly in the second half of the year compared to the first half, reflecting the exciting preparation for the expected start of two major trials (US Grass MATA MPL Phase II and PQ Birch Phase III) as well as investment in infrastructure to progress the important TAV process. Other costs are expected to be similar to H1 2017.
The Group continues to strive for excellence in its products, the supply chain and convenience for patients leading to increased medical compliance which are key factors in the continuing growth and success of the business.
We look forward to the future with confidence.
Peter Jensen
Chairman
Manuel Llobet
Chief Executive Officer
28 March 2017
ALLERGY THERAPEUTICS PLC
Consolidated income statement
Note 6 months 6 months 12 months
to to to
31 Dec 31 Dec 30 Jun
2016 2015 2016
2 GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Revenue 40,427 28,959 48,509
Cost of sales (8,924) (7,328) (14,070)
---------- ---------- -------------
Gross profit 31,503 21,631 34,439
Sales, marketing and distribution
costs (13,842) (9,842) (20,223)
Administration expenses
- other (6,611) (3,879) (10,094)
Research and development
costs (3,820) (6,537) (16,223)
---------- ---------- -------------
Administration expenses (10,431) (10,416) (26,317)
Other income - - 150
Operating profit/(loss) 7,230 1,373 (11,951)
Finance income 90 84 180
Finance expense (112) (154) (293)
---------- ---------- -------------
Profit/(loss) before tax 7,208 1,303 (12,064)
Income tax (367) (249) (1,008)
---------- ---------- -------------
Profit/(loss) for the period 6,841 1,054 (13,072)
========== ========== =============
Earnings/(loss) per share 3
Basic (pence per share) 1.16p 0.19p (2.29p)
Diluted (pence per share) 1.10p 0.18p (2.29p)
Consolidated statement of
comprehensive income
6 months 6 months 12 months
to to to
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Profit/(loss) for the period 6,841 1,054 (13,072)
Items that will not be reclassified
subsequently to profit or
loss:
Remeasurement of net defined
benefit liability 1,105 (255) (1,688)
Remeasurement of investments-retirement
benefit
assets (78) (51) (16)
Deferred tax- freehold land
and buildings - - (43)
Revaluation gains - freehold
land and buildings
Items that may be reclassified
subsequently to profit or
loss: - - 119
Exchange differences on
translation of foreign operations (81) 366 (744)
Total comprehensive income/
(loss) 7,787 1,114 (15,444)
========== ========== ==========
Consolidated balance sheet
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Assets
Non-current assets
Property, plant and equipment 9,708 8,787 9,667
Intangible assets - goodwill 3,382 3,053 3,271
Intangible assets - other 2,038 1,925 2,084
Investment - retirement benefit asset 4,291 3,451 4,045
Total non-current assets 19,419 17,216 19,067
Current assets
Inventories 7,025 6,826 7,692
Trade and other receivables 10,653 7,141 6,514
Cash and cash equivalents 27,763 33,206 23,406
- 3 -
Derivative financial instruments
Total current assets 45,441 47,176 37,612
Total assets 64,860 64,392 56,679
---------- ---------- ----------
Liabilities
Current liabilities
Trade and other payables (12,375) (7,906) (11,045)
Current borrowings (306) (262) (295)
Derivative financial instruments (486) - (1,180)
Total current liabilities (13,167) (8,168) (12,520)
Net current assets 32,274 39,008 25,092
---------- ---------- ----------
Non-current liabilities
Retirement benefit obligations (9,553) (7,465) (10,174)
Deferred taxation liability (315) (296) (334)
Non-current provisions (291) (252) (257)
Other non-current liabilities - (113) -
Long term borrowings (3,071) (1,378) (3,070)
---------- ---------- ----------
Total non-current liabilities (13,230) (9,504) (13,835)
Total liabilities (26,397) (17,672) (26,355)
Net assets 38,463 46,720 30,324
========== ========== ==========
Equity
Capital and reserves
Issued share capital 603 597 599
Share premium 102,420 102,389 102,392
Merger reserve - shares issued by subsidiary 40,128 40,128 40,128
Reserve - shares held by EBT - 67 -
Reserve - share based payments 1,061 761 741
Revaluation reserve 1,254 1,178 1,254
Foreign exchange reserve (965) 226 (884)
Retained earnings (106,038) (98,626) (113,906)
---------- ---------- ----------
Total equity 38,463 46,720 30,324
========== ========== ==========
Consolidated statement of changes in equity
Issued Share Merger Reserve Reserve Foreign Retained Total
Capital premium reserve - - share Revaluation exchange earnings equity
- shares shares based reserve reserve
issued held payment
by in
subsidiary EBT
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2015 597 102,389 40,128 67 761 1,178 226 (98,626) 46,720
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Exchange
differences
on
translation
of foreign
operations - - - - - - (1,110) - (1,110)
Remeasurement
of net
defined
benefit
liability - - - - - - - (1,433) (1,433)
Remeasurement
of
investments
- retirement
benefit
assets - - - - - - - 35 35
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total other
comprehensive
income - - - - - - (1,110) (1,398) (2,508)
Loss for
the period
after tax - - - - - - - (14,126) (14,126)
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total
comprehensive
income - - - - - - (1,110) (15,524) (16,634)
Deferred
tax (Land
buildings) - - - - - (43) - - (43)
Valuation
gain taken
to equity
(Land and
Buildings) - - - - - 119 - - 119
Share based
payments - - - - 157 - - - 157
Shares
issued 2 3 - - - - - - 5
Transfer
of EBT
reserve
to retained
earnings - - - (67) - - - 67 -
Transfer
of lapsed
options
to retained
earnings - - - - (177) - - 177 -
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
At 30 June
2016 599 102,392 40,128 - 741 1,254 (884) (113,906) 30,324
Exchange
differences
on
translation
of foreign
operations - - - - - - (81) - (81)
Remeasurement
of net
defined
benefit
liability - - - - - - - 1,105 1,105
Remeasurement
of
investments
- retirement
benefit
assets - - - - - - - (78) (78)
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total other
comprehensive
income - - - - - - (81) 1,027 946
Profit for
the period
after tax - - - - - - - 6,841 6,841
--------- -------- ----------- -------- -------- ------------- --------- ----------------- ---------
Total
comprehensive
income - - - - - - (81) 7,868 7,787
Share based
payments - - - - 320 - - - 320
Shares issued 4 28 - - - - - - 32
At 31 December
2016 603 102,420 40,128 - 1,061 1,254 (965) (106,038) 38,463
========= ======== =========== ======== ======== ============= ========= ================= =========
Condensed consolidated cash
flow statement
6 months 6 months 12 months
to to to
31Dec 31Dec 30Jun
2016 2015 2016
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Cash flows from operating
activities
Profit/(loss) before tax 7,208 1,303 (12,064)
Adjustments for:
Finance income (90) (84) (180)
Finance expense 112 154 293
Non cash movements on defined
benefit pension plan 122 148 295
Depreciation and amortisation 955 782 1,666
Charge for share based payments 320 170 327
Movement in fair value of
derivative financial instruments (694) 781 1,963
Foreign exchange revaluation
on US dollar cash deposits (296) (1,087) (2,394)
(Increase) in trade and other
receivables (4,202) (2,112) (368)
Decrease/(increase) in inventories 743 2 (585)
Increase/(decrease) in trade
and other payables 1,263 550 (497)
---------- ---------- ----------
Net cash generated/(used)
by operations 5,441 607 (11,544)
Bank loan fees and Interest
paid (112) (154) (388)
Income tax (paid)/received (6) 44 93
Net cash generated/(used)
by operating activities 5,323 497 (11,839)
Cash flows from investing
activities
Interest received 90 11 -
Investments (148) (128) (260)
Payments for intangible assets (22) (142) -
Payments for property plant
and equipment (1,341) (335) (1,232)
Net cash used in investing
activities (1,421) (594) (1,492)
Cash flows from financing
activities
Proceeds from issue of equity
shares (net of share issue
costs) - 10,967 10,967
Share options exercised 32 - -
Repayment of borrowings (161) (120) (86)
Proceeds from borrowings 77 - 1,658
Net cash (used)/generated
by financing activities (52) 10,847 12,539
---------- ---------- ----------
Net increase/(decrease) in
cash and cash equivalents 3,850 10,750 (792)
Effects of exchange rates
on cash and cash equivalents 507 1,257 2,999
Cash and cash equivalents
at the start of the period 23,406 21,199 21,199
---------- ---------- ----------
Cash and cash equivalents
at the end of the period 27,763 33,206 23,406
---------- ---------- ----------
1. Interim financial information
The unaudited consolidated interim financial information is for the six month period ended 31 December 2016. The financial information does not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2016, which were prepared under International Financial Reporting Standards (IFRS) as adopted by the European Union (EU).
The interim financial information has not been audited nor has it been reviewed under ISRE 2410 of the Auditing Practices Board. The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Company's statutory financial statements for the year ended 30 June 2016 prepared under IFRS have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.
2. Basis of preparation
The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention except for land and buildings and derivative financial instruments which have been measured at fair value. The accounting policies adopted in this report are consistent with those of the annual financial statements for the year to 30 June 2016 as described in those financial statements. There are no accounting standards that have become effective in the current period that would have a material impact upon the financial statements.
Going Concern
The Group has been profit making in the six months to 31 December 2016, as it was in the corresponding period ending 31 December 2015.
Detailed budgets have been prepared, including cash flow projections for the periods ending 30 June 2017 and 30 June 2018. These projections include assumptions on the trading performance of the operating business and the continued availability of the existing bank facilities. The Group had a cash balance of GBP27.8m at 31 December 2016 and expects to renew its banking facilities when they are due for renewal in April 2017. After making appropriate enquiries, which included a review of the annual budget and latest forecast, by considering the cash flow requirements for the foreseeable future and the effects of sales and other sensitivities on the Group's funding plans, the Directors continue to believe that the Group will have adequate resources to continue in operational existence for the foreseeable future and accordingly have applied the going concern principle in preparing these interim financial statements.
3. Earnings per share
6 months 6 months 12 months
to 31 to 31 to 30
Dec 2016 Dec 2015 Jun 2016
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Profit/(loss) after tax attributable
to equity shareholders 6,841 1,054 (13,072)
Shares Shares Shares
'000 '000 '000
Issued ordinary shares at start
of the period 589,159 545,848 545,848
Ordinary shares issued in the
period 4,285 41,005 43,311
---------- ---------- ----------
Issued ordinary shares at end
of the period 593,444 586,853 589,159
Weighted average number of
shares in issue for the period 591,415 559,516 570,344
========== ========== ==========
Weighted average number of
shares for diluted earnings
per share 624,470 581,827 570,344
========== ========== ==========
Basic earnings per ordinary
share/(loss) (pence) 1.16p 0.19p (2.29p)
========== ========== ==========
Diluted earnings per ordinary
share/(loss) (pence) 1.10p 0.18p (2.29p)
====================================== ========== ========== ==========
4. Contingent liabilities
On 23 February 2015, the Company received notification that The Federal Office for Economics and Export ("BAFA") had made a decision to reverse its preliminary exemption to the increased manufacturers rebate in Germany for the period July to December 2012. The Company was granted a preliminary exemption to the increased rebate for this period by BAFA in 2013. The Company recognised revenue of EUR1.4m (GBP1.1m) against this exemption in the year ended 30 June 2013. All other preliminary exemptions (granted for periods up to 30 June 2012) have previously been ratified as final by BAFA. After taking legal advice, the Company has lodged an appeal against this decision and is confident that the exemption will be re-instated. Therefore, as at 31 December 2016, no provision has been recognised for the repayment of the rebate refund. This position will be kept under review.
The European Commission has concluded its investigation into whether the exemption of pharmaceutical manufacturers from the increase in rebates in Germany constitutes state aid. The European Commission has determined that the exemptions do not constitute state aid. Subsequent to this announcement, the Group has been advised that an appeal has been lodged at the EU Court against this decision. If successful, and the exemptions are determined to be illegal state aid, then the exemption refunds may have to be repaid. The maximum sum to be repaid would be approximately GBP5m (including the GBP1.1m referred to above); however, the Group considers this to be an unlikely outcome and consequently has not recognised any contingent liability.
This information is provided by RNS
The company news service from the London Stock Exchange
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(END) Dow Jones Newswires
March 29, 2017 02:01 ET (06:01 GMT)
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