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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Byotrol Plc | LSE:BYOT | London | Ordinary Share | GB00B0999995 | ORDS 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.125 | 0.05 | 0.20 | 0.125 | 0.125 | 0.125 | 2,351,048 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Chemicals & Chem Preps, Nec | 4.59M | -1.69M | -0.0037 | -0.32 | 544.67k |
From Apr 2019 to Apr 2024
TIDMBYOT
RNS Number : 4838H
Byotrol PLC
18 August 2016
Byotrol Plc
("Byotrol" or the "Company")
FINAL RESULTS
FOR THE YEARED 31 MARCH 2016
POSTING OF ANNUAL REPORT AND ACCOUNTS AND NOTICE OF AGM
Byotrol plc, the specialist anti-microbial technology company, is pleased to announce its final results for the 12 months ended 31 March 2016.
We last updated the market in early July; we are pleased to confirm that our final, audited results are in line with that update. Highlights of the year include:
-- EBITDA loss before exceptionals of GBP449k versus GBP526k in the previous year
-- Sharply narrowed loss after tax of GBP532k (after all exceptionals and tax credits) versus a loss of GBP749k the previous year
-- Cash and cash equivalents of over GBP1mn, compared to GBP287k in the prior year
-- Continued moves to higher margin transactions, especially by way of licensing and development deals, including with KYORIN Pharmaceutical Co., Ltd (hand sanitisers in Japan), Rentokil Initial plc (hand sanitisers in UK washrooms) and Beaphar NA (surface care products for pet environments) in continental Europe
-- Further and expanded agreement to develop and commercialise long-lasting biocidal products for hard surfaces with Solvay Novecare, a world leader in specialty polymers and surfactants and a global business unit of the international chemical group Solvay SA ("Solvay").
We also confirm continued progress in the technical tests required for formal Environmental Protection Agency (EPA) approval of our surface sanitising products in the US, with an expected registration filing date in early December 2016.
Annual Report & Accounts for the year ended 31 March 2016 have today been posted to shareholders together with the Notice of Annual General Meeting, which will be held at 10am on 22 September 2016 at the offices of finnCap at 60 Broad Street, London EC2M 1JJ.
An electronic copy of the Annual Report and Accounts is also available from the Company's website: www.byotrol.co.uk.
Outlook
Trading for the current year to 31 March 2017 is proceeding to plan, with continued emphasis on higher margin contracts and customers.
As previously notified to shareholders, under the terms of the agreement with Solvay, Solvay will be making substantial payments to the Company. All of those payments are fully committed and will be made in the second half of the current financial year.
David Traynor, Chief Executive of Byotrol plc comments:
"We are now showing progress in turning our low-margin, product sales business into a higher margin technology company. We are very confident about our future."
Enquiries:
Byotrol plc 01925 742 000
David Traynor - Chief Executive
finnCap Ltd 020 7220 0500 (Nominated Adviser & Broker)
Geoff Nash/Carl Holmes/James Thompson - Corporate Finance
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Notes to Editors:
Byotrol plc (BYOT.L), quoted on AIM, is a specialist developer of residual antimicrobial technologies, identifying, developing, formulating and commercialising cutting-edge antimicrobial solutions.
Our patented suite of technologies deliver powerful broad-spectrum efficacy with residual performance optimised against commonly occurring and industry-specific pathogens
Founded in 2005, the Company has developed the technology that creates easier, safer and cleaner lives
For more information, please go to www.byotrol.co.uk
Chairman's Statement
What is Byotrol?
Put simply: we are THE experts in long lasting and safe anti-microbial chemistry. A bold statement and one that is worth examining in detail. At this point let me emphasise that you will not see such a statement in our technical or commercial writings. The words that I have chosen, as within my statement generally and as always when talking to shareholders, are layman's words. Within our industry we would use vocabulary such as performance, efficacy, validation, protected claims, value proposition and positioning to name but a few. Words such as "safe" and "gentle" are not in our lexicon. You would be right to assume that I am not an industry practitioner and I am going to assume that most of my readers are not either, so please forgive me if I stick to my use of a layman's turn of phrase and rest assured that our Executive Directors would never let me talk in such terms to our clients or partners.
Nobody else, that we have met or heard of, can match our combination of safety and long lasting effectiveness. These are two very important attributes in a world where differentiation is the order of the day. Of course there are plenty of chemicals that will kill bugs for a long period of time but generally the rule is that the more effective they are then the more harm that they will cause to you and me. Byotrol's expertise and unique claims are centred on formulations that are effective and long lasting whilst at the same time being gentle and safe.
Our formulations are gentle to humans, and to pets for that matter. Dangerous or unpleasant chemicals in my mind have no place in the home and are a concern in the workplace for that matter, and this is where our gentle formulations come out so favourably. If you are in any doubt about the benefits that we can bring to the home and the workplace, may I suggest that you try this simple experiment. Apply an alcohol based hand sanitiser ten times a day for a week and experience first-hand (excuse the pun) the problem of chapped hands that nurses have to contend with. Anecdotally we have been told that the NHS has to buy more hand cream than ever to counteract this problem. To complete the experiment, use Byotrol Hand Sanitiser for a week. The comparison will speak for itself.
We hope that the NHS and other hospitals around the world will come to adopt alcohol free hand sanitisation as standard and there are signs of interest but old habits do change slowly in this environment.
Amongst the many thousands of chemical companies in the world, we are claiming to be the leaders, and possibly the only true experts, in the niche of 'long lasting and gentle'. Our opinion is backed by some very large companies around the world who want to co-operate with us and also by the excellent progress that we have made towards passing the Environmental Protection Agency's (EPA's) stringent tests. We are not aware of any government test in any country that is more challenging
Reading this report, you might have thought that my opening remarks applied to our scientific lead in the UK or maybe Europe but from the list of our current and future partners which I will set out later, I hope it is becoming apparent that we are the leaders worldwide in our chosen field.
What we were
Over the past 10 years our unique selling point has not always been in great demand for the uses that were anticipated. For sure we have some very keen customers who trust us with their reputation to ensure absolute safety in their work or at home. We had thought that this was revolutionary and would be welcomed but frankly Byotrol was born about 10 years too early and adoption was slow.
Long lasting anti-microbial products were a novel concept for many consumers but I am pleased to say that the trend is now firmly in our favour. This is not just our opinion from a closeted position within our own laboratories. Our clients have conducted their own independent market research and as a result are keen to partner with us and put their resources behind our technology. They are voting with their chequebooks.
Where we are going
Our products are now fully compliant with the recent EU Regulatory changes and Byotrol is moving strongly into the commercialisation stage. We are a small company with less than 20 people and our budget is finite, so we are carrying out this stage in partnership with companies that have the appropriate resources, the expertise and the market reach. In doing so, we have to share the profit but the prize is many times what we could hope to manage on our own and comes sooner too.
I must emphasise that we are not just a technology company, outsourcing our products for others to sell. Our Executive Directors and management team have significant marketing and commercialisation expertise. Having these skills in-house greatly helps us to do the right deal with the right partner in each of our chosen markets, and to act as equals in negotiating the deals and in their execution. We punch way above our weight.
And the list of deals is getting longer every month. In February we updated the market on our progress and several of the deals that were under discussion at the time have now come to fruition, as described more fully in the CEO report.
Not all initiatives will end up with the magic inked signatures. For example, our efforts to introduce our surface products into the NHS are still not coming to fruition, although we are making encouraging headway with our hand sanitisers.
Last year we introduced our shareholders to our "Friday Afternoon" project which is a new hand sanitiser that complies with the latest EU Regulations. It showed great promise so we applied for a patent and talked to potential customers. The feedback was so good that this is now a priority for us and I am delighted that you can see a project happening almost in real time. We are booking revenue already and are currently applying for our second patent and further developing the technology.
There are two points that have come out of this exercise that our management would like me to highlight. The first is that our customers are talking more and more about non-alcohol hand sanitisers and we therefore have very good reason to believe that this will give us a favourable tail wind. The second point is that we have gone from concept to customer in a very quick time and at a very reasonable cost and this has been achieved against a backdrop of meeting all of our expectations in our other areas too, where there were defined project briefs. You may remember from last year that this particular product came about from the free thinking that we encourage in our laboratory and we considered it a very interesting extra bonus at the time. Now it is very much a part of our mainstream activity. The downside for our technical team is that we now strongly discourage them from going home early on Fridays.
Being a small company with rather large aspirations does mean that we will have to focus on our most promising income streams. Some of our historic areas of concentration, especially within Professional must be considered as candidates either for sale or for alliances/joint ventures with third parties.
The upcoming Biocide Regulations (BPR) requirements will be demanding of our resources too and it does make sense to concentrate on our biggest bets. Complying with the new regime might very well dictate that we can realistically support no more than 3 technology platforms.
Leaving aside our legacy businesses, we have 3 big opportunities for the future. These are 1) our consumer surface care formula currently going through the EPA process; 2) our EU compliant consumer-targeted surface care formulation which we are marketing in conjunction with Solvay SA and 3) our new hand sanitiser. Each of these has the capability of being a large standalone business. Having three strings to our bow is a wonderful position to be in.
In each of the areas that I have highlighted above, we have an identifiable lead over competitors and this lead is likely to be maintained for some time. With our EPA claims we will be the only company in America to be able to make the long lasting claim for consumer products. With our Solvay formula we are compliant with all EU regulations and have superior cleaning claims. With our hand sanitiser we are also compliant with new EU regulations and will be one of only a very small number of suppliers of non-alcohol hand sanitisers in this country and many others.
Value and judgement
Our focus may be on the future but we continue to be judged to some extent by the financial results of the past. Our results do show a reduced loss from a year ago. Progress has been made but our historic markets are difficult and the regulatory changes have thrown up extra costs and absorbed management time and effort. Also a quality problem in our wipes supply chain that was specific to our old and now superseded wipes formulation at the end of their production run has not helped either. Amongst this struggle we have to plan for the future.
My own view of our Company is that the future is all important and I would value the Company on that basis. This is very much the opposite of the view that past performance is a reliable indicator of future results. The past may be a good indicator of how the management have coped with an extremely difficult transition but actually the results say very little about our future prospects. It is akin to valuing a graduate on his future earnings capability rather than on the cost of his tuition. With this in mind I ask that you pay very close attention to our comments on the future and come and ask for more and yet more detail at our AGM.
Management and the Board
The Board of Directors is four strong which we have considered appropriate for a company of our size. We have elected for a balance between having a spread of expertise and keeping the overhead to a minimum. We are not paid generously (one shareholder last year suggested we should pay ourselves better!) but all Directors including the Non-Executives have been awarded Options which incentivise us to work for the benefit of the Company's Shareholders and employees. The Board all together, rather like turkeys wondering if they should be voting for Christmas, have to carefully consider our own skills and suitability for the next stage. The Company will be quite different in a year's time and it is right and proper that we equip the Board accordingly.
Currently we are actively spreading our net looking for new Non-Executives. We are not looking for the usual suspects of accountants, financiers or retired Company men, but rather those leaders who have been successful in a similar field before, or know how to commercialise technology and to sell innovative products to either business or consumer customers. It can be difficult for a small company such as us to attract the right people but the stature of those that I have spoken to recently is a sign of just how interesting they regard our future prospects. I might add that if any shareholder reading this has a recommendation for a suitable Non-Executive then I am very happy to hear from them.
Brexit
After considerable thought, we see no change in any respect other than the currency fluctuations which, as an exporter, are currently in our favour. At some point in more than two years' time, the UK may or may not adopt different chemical regulations, but the regulations may change in any of our markets over that period of time and we are adept at managing change. The short answer is that for us it is very much business as usual.
AGM and Shareholders
I do encourage you to come and see us at our AGM. Last year we had some very searching questions and received some excellent free advice from experienced shareholders. We welcome the two-way communication and hope for even more questions this year. After 2 years of holding the AGM in our offices, which is definitely our preference, we have decided to hold this year's meeting in London in order to encourage those southern shareholders who would like to come but would otherwise be discouraged by the journey north.
In summary
If you take away only one message after reading this Chairman's Statement, then I would want you to appreciate that the past sales for Byotrol have been heavily weighted towards us selling directly to commercial customers, whereas we see our future as gaining several income streams from alliances with larger companies, some in commercial sectors but increasingly in the consumer markets, and also from an increasing geographical footprint. We are very optimistic about our future and I hope that you are too.
Nicholas Martel
Chairman
Chief Executive's Report
I am pleased to report that we have delivered to plan this year; our technical base has continued to strengthen, gross margins are still improving and we have added further alliances and partners to aid us in distribution and technical development.
This has all been achieved without a rise in costs and against a background of continued regulatory change, particularly in the food manufacturing industry.
Financial Overview
Our results show our continued efforts to focus on higher margin business, on more efficient commercial structures and to de-emphasise many of the legacy products, businesses and initiatives from before the Company was restructured in late 2013.
Financial highlights include:
-- Gross profit marginally increased to GBP1,154k on turnover of GBP2,648k (compared to turnover of GBP3,251k in the previous year)
-- Narrowed EBITDA loss of GBP469k (GBP449k before exceptionals) versus GBP526k the previous year
-- Sharply narrowed loss after tax of GBP532k (after all exceptionals and tax credits) versus a loss of GBP749k the previous year
-- Cash and cash equivalents of over GBP1m, compared to GBP287k in the prior year
Markets
Professional
Year on year revenues fell to GBP1,431k from GBP2,021k and gross profit to GBP419k from GBP562k.
This was a challenging year for our professional business, particularly in the food manufacturing industry, where new EU rules aimed at reducing biocide and pesticide build-ups in the food chain have now been introduced. The industry has been forced to limit the use of quaternary ammonium compounds in food contact areas, which is one of the core ingredients of our formulations until recently (as it was for many of the chemical suppliers to the industry). We have at substantial cost reformulated our products and have now received the key industry accreditation - M&S approval - to support our sales programme. However, the outlook for this business is still uncertain as (1) sales fell substantially during the interregnum and (2) it is not yet clear whether our product offer is going to be competitive in price and performance terms.
Food service continues to perform satisfactorily, despite heavy price competition. We still have an issue of scale compared to our competitors, including a narrow product and service offer, but the efficacy of our formulations - especially wipes - is such that we continue to make progress in these markets from our small base.
Sales into industrial markets remain steady, particularly into and around washroom areas, both in hand hygiene and surface care products. We are expecting to expand our activities in these areas in the future.
We have now completed trials of our surface care products in the NHS, in alliance with ISS; and the results have been positive in comparison to existing products used in the NHS. However, we have learnt that we still need longer term, more detailed data, ideally including clinical studies to generate the size of contracts needed to justify the sales effort. The Board has now decided to postpone any further effort in healthcare - our limited resources can generate a better return elsewhere.
A main area of focus in the future will be the commercialisation of our newly-developed (and patented) hand hygiene formulations that, unlike first-generation Byotrol hand products, will meet the new and stringent standards of the BPR. This initiative has led to two new alliances, namely:
-- A 5-year exclusive license on hand sanitising products with the Japanese pharmaceutical company KYORIN Pharmaceutical Co., Ltd, the core subsidiary of the Japanese healthcare group KYORIN, which reports annual sales in excess of Yen100bn. This agreement is aimed at product launches in the Japanese professional medical care market in late 2016 with the consumer market to follow thereafter.
-- A short development contract in long-lasting hand sanitisers with Rentokil Initial plc to support their Ultraprotect range of products in (mostly) European countries, which, assuming successful test results, will then become a 3-year license agreement. This is a newly-developed formulation.
Petcare
Year on year revenues fell in the year to GBP690k from GBP938k and gross profit to GBP207k from GBP293k.
The first half of the year was hurt by one of our key customers going through a period of de-stocking, all as reported in our interims statement. Sales since that point to said customer have not returned to previous levels, although there has been a marginal increase in H2 and indeed a further increase since year end
Towards the end of the year, we were pleased to sign up a new licensee in continental Europe for our new BPR-ready surface care products. The licensee, Beaphar NA, headquartered in Holland is one of Europe's premier petcare brands. We are very pleased to be in alliance with such a successful European business.
We have also made progress in pet grooming in continental EU, with a new customer HCP (France) now distributing our products in the French veterinary market.
Sales into our key retail customer Pets@Home remained strong in the year, as did exports to agents and customers in Japan, Singapore and France.
Consumer
This business segment is almost all licensing-based and is starting to perform very well. Year on year revenues - and hence gross profit - increased substantially in the year, from GBP292k to GBP528k.
The consumer segment has been making excellent progress on all fronts in the year under review, and also in the period immediately following the year end
-- In June 2015 we completed a 10 year joint marketing and development agreement with Solvay Novecare, a world leader in specialty polymers and surfactants with an annual turnover in excess of Euro 2 billion and a subsidiary of the listed international chemical group Solvay SA ("Solvay"). This agreement was then further expanded in late July 2016. It is built upon the joint development of anti-microbials for surface care, combining the best of Byotrol's long-lasting antimicrobial formulations and Solvay's world-leading polymer and surfactant technologies. The Company has already completed (and patented) one such product for the EU consumer market and is actively marketing it jointly with Solvay to customers. Following the subsequent deal expansion, Byotrol is now pooling technical, commercial and sales resource with Solvay Novecare in targeting products at the worldwide consumer market and some professional markets. The two parties will then be sharing gross profit from any jointly produced products, at a percent split that varies depending on market and product type. As part of the agreement Solvay is making a substantial payment to Byotrol for the rights involved.
-- Our surface care formulations in the US continue to make excellent progress in the technical tests required for formal EPA approval. We now expect to file the completed regulatory technical dossier in October this year. This formulation sits outside our agreement with Solvay and is already generating considerable commercial interest in the US.
The year also saw continued healthy sales of our disinfecting trigger sprays in Tesco (via an ongoing license with Robert Mcbride plc), boosted by Tesco's refocus on its private label ranges.
Boots hand sanitisers, powered by Byotrol, are also selling well. Indeed our hand sanitising products are in general generating a healthy following - including amongst international sports teams and well-known sporting organisations, especially in cycling teams. It is a source of pride that such high profile organisations and individuals are using our products, though also a source of frustration that we are not allowed to publicise it without substantial sponsorship payments to the organisations involved.
Our license in floor cleaning products in Nigeria, with PZ Cussons, has now matured and is not being renewed - market conditions for such products in Nigeria are not strong.
Technology and Regulatory Environment
Much of Byotrol's technical programme is driven by the need to stay in-line and ahead of the EU regulators as well as keeping the differentiated properties of our core technologies. Our main technical efforts are in the following areas:
-- Some of our key ingredients continue to come under increasing pressure on their use, as our competitors are also experiencing. This has been managed by identifying new ways to deliver our anti-microbial residual performance on surfaces and hands - and patents are being filed as a result.
-- In our Professional (foods) business where another key ingredient has been captured by separate legislation that took the whole industry by surprise and which is now being challenged by the industry, albeit somewhat late.
-- Preparing for the ever-closer BPR and the submission of dossiers to support our products
-- Against this backdrop, over the last 2 years, the tech team has completely revamped our formulations to be EU compliant and we are now in the market seeking commercial opportunities across different sectors
-- The test method that Byotrol developed to measure residual anti-microbial efficacy with the support of British Standards Institute ( BSI), is now on the agenda to seek approval at the EU's European Test Committee level ( WG3), with our Senior Microbiologist co-opted on to the committee.
-- Real progress has continued to be made with our formulation in tests under US EPA conditions and a viable product is now close to reality.
-- Outside of our mainstream technical programme, we continue to probe innovation opportunities in peripheral activities such as seaweed and other alternative substances that might enhance our technical capability into the future
Financing
As reported fully in our interims statement, we completed a GBP1.3m (net of expenses) equity financing in September 2015 to strengthen the Company's balance sheet and to invest in the main strategic initiatives. The financing also allowed the Company to pay down an expensive invoice discounting facility and invest in a new financing/operations system, including a new IT server.
Thornton Science Park
In January the Company moved from Daresbury to the Thornton Science Park, just north of Chester. The site was until 2013 the Shell Technology Centre and was then acquired by the University of Chester.
We are delighted with our new state-of-the-art facilities, which includes best in class laboratories and workshops, all at very good value to the Company, plus ample room for expansion. We are also benefitting from links with the university, including with academics (especially microbiology and mathematical modelling) and students (research work and laboratory manpower); it all adds to our positioning as a technology company.
Outlook
We are now having some success in turning our low-margin, product sale business into a higher margin technology company. We will continue on this path, targeting development contracts and licensing fees for our technologies, particularly with global or super-regional companies with the resources to distribute and promote the resulting products.
The good news is that the markets in which we operate are huge, in the US$ billions - and growing (we estimate global growth in antibacterial products of over 3% per annum) and consumers and business users will continue to need protection from harmful microbes. But suppliers and manufacturers in our industry are being increasingly controlled by expensive and complex regulations, so the barriers to entry are substantial.
As we progress, it is likely our income may appear a little lumpy, dependent on occasional, large one-off payments until we reach sustainable profitability through regular royalties and profit-shares. The Board is therefore balancing a continued investment programme against a need to show regular improvement in our financial condition. We believe we are managing this relatively well at present (3 years ago Byotrol reported a net loss of GBP1.7m on turnover of GBP2.1m and very low cash reserves). We have come a long way since then - the financial outlook for FYE 2017 is already looking very promising, with substantial (already notified) cash-generating contracts already in place and to be fully reflected in our H2 results in particular. We are very confident about our future.
David Traynor
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2016
Hot Features
Premium
2016 2015
Notes GBP GBP
REVENUE 1 2,647,923 3,251,512
Cost of sales 1 (1,494,198) (2,103,783)
---------------- ----------------
GROSS PROFIT 1,153,725 1,147,729
Administrative expenses excluding
depreciation and amortisation 1 (1,570,614) (1,565,254)
Share based compensation 18 (52,604) (107,750)
---------------- ----------------
LOSS BEFORE INTEREST, DEPRECIATION,
AMORTISATION AND TAX 2 (469,493) (525,725)
Amortisation 9 (77,797) (66,787)
Depreciation 8 (39,220) (73,357)
Finance income 5 1,403 966
Finance costs 5 (84,378) (84,207)
Research and development (R
& D) tax credits 1 136,516 -
---------------- ----------------
LOSS BEFORE TAX (532,969) (748,660)
Taxation 6 - -
---------------- ----------------
LOSS FOR THE FINANCIAL YEAR (532,969) (748,660)
---------------- ----------------
OTHER COMPREHENSIVE INCOME,NET
OF TAX
Other comprehensive income
which may be reclassified
to profit or loss in subsequent
periods:
Exchange differences on translation
of foreign operations (542) (3,284)
---------------- ----------------
Other comprehensive expenditure (542) (3,284)
---------------- ----------------
TOTAL COMPREHENSIVE LOSS FOR
THE YEAR (533,511) (751,944)
Basic and fully diluted loss
per share - pence 7 (0.21) (0.35)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 March 2016
2016 2015
Notes GBP GBP
ASSETS
Non-current assets
Property, plant
and equipment 8 22,422 46,364
Other intangible
assets 9 565,078 510,641
---------------- ----------------
587,500 557,005
Current assets
Inventories 11 220,318 230,022
Trade and other
receivables 12 783,881 926,890
Cash and cash equivalents 13 1,017,188 286,731
---------------- ----------------
2,021,387 1,443,643
---------------- ----------------
2,608,887 2,000,648
LIABILITIES
Current liabilities
Trade and other
payables 14 590,724 850,159
Convertible loan
notes 15 359,975 -
---------------- ----------------
950,699 850,159
---------------- ----------------
Non-current liabilities
Convertible loan
notes 15 - 328,625
---------------- ----------------
- 328,625
---------------- ----------------
Equity
Share capital 20 670,129 562,587
Share premium account 22,849,284 21,639,595
Merger reserve 1,064,712 1,064,712
Translation reserve (46,248) (45,706)
Convertible loan
note reserve 69,301 69,301
Retained deficit (22,948,990) (22,468,625)
---------------- ----------------
TOTAL EQUITY 1,658,188 821,864
---------------- ----------------
TOTAL EQUITY AND
LIABILITIES 2,608,887 2,000,648
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ending 31 March 2016
Convertible Retained
Share Merger Translation loan note earnings
capital Share premium reserve reserve reserve reserve Total equity
GBP GBP GBP GBP GBP GBP GBP
At as 1 April
2014 458,420 20,586,758 1,064,712 (42,422) 69,301 (21,827,715) 309,054
Loss for the
year - - - - - (748,660) (748,660)
Exchange
differences
on
translation
of foreign
operations - - - (3,284) - - (3,284)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Total
comprehensive
loss for the
year - - - (3,284) - (748,660) (751,944)
Share issue 104,167 1,145,833 - - - - 1,250,000
Share issue
costs - (92,996) - - - - (92,996)
Share based
payments - - - - - 107,750 107,750
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Equity as at
31 March 2015 562,587 21,639,595 1,064,712 (45,706) 69,301 (22,468,625) 821,864
Loss for the
year - - - - - (532,969) (532,969)
Exchange
differences
on
translation
of foreign
operations - - - (542) - - (542)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Total
comprehensive
loss for the
year - - - (542) - (532,969) (533,511)
Share issue 107,542 1,290,504 - - - - 1,398,046
Share issue
costs - (80,815) - - - - (80,815)
Share based
payments - - - - - 52,604 52,604
-------------- -------------- -------------- -------------- -------------- -------------- --------------
Equity as at
31 March 2016 670,129 22,849,284 1,064,712 (46,248) 69,301 (22,948,990) 1,658,188
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2016
2016 2015
GBP GBP
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year before tax (532,969) (748,660)
Adjustments for:
Share based payments 52,604 107,750
Depreciation 39,220 73,357
Amortisation 77,797 66,787
Impairment of intangible asset 7,222 -
Finance income (1,403) (966)
Finance costs 84,378 84,207
Changes in working capital
Decrease in inventories 9,704 48,329
(Increase) / decrease in trade
and other receivables 143,009 (164,777)
Decrease in trade and other payables (259,435) (256,013)
---------------- ----------------
CASH USED IN OPERATING ACTIVITIES (349,873) (789,986)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire property,
plant and equipment (15,278) (1,041)
Payments to acquire intangible
assets (139,456) (113,581)
Interest received 1,403 966
---------------- ----------------
NET CASH USED IN INVESTING ACTIVITIES (153,331) (113,656)
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on issue of ordinary
shares 1,398,046 1,250,000
Share issue costs (80,815) (92,996)
Interest paid (53,028) (65,152)
---------------- ----------------
NET CASH INFLOW FROM FINANCING 1,264,203 1,091,852
---------------- ----------------
Net increase/(decrease) in cash
and cash equivalents 730,999 188,210
Cash and cash equivalents at
the beginning of the financial
year 286,731 98,521
Effect of foreign exchange rate
changes (542) -
---------------- ----------------
Cash and cash equivalents at
the end of the financial year 1,017,188 286,731
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2016
1 SEGMENTAL INFORMATION
Revenue recognised in Consolidated Statement of Comprehensive Income is analysed as follows:
2016 2015
GBP GBP
Product sales 2,070,407 2,931,805
Royalty and licensing income 577,516 314,707
Other revenue - 5,000
---------------- ------------------
Revenue 2,647,923 3,246,512
The Group considers the Group's revenue lines to be split into three reportable segments; being Professional (including food service, food manufacturing, industrial and health), Consumer and Pet. This disclosure correlates with the information which is presented to the Group's Chief Decision Maker, the Board. The Group's revenue, result before taxation and net assets were all derived from its principal activities.
Segmental information is presented using Group policies.
Continuing operations
Professional Consumer Pet Total
Year ended 31 March 2016 GBP GBP GBP GBP
REVENUE
United Kingdom 1,356,233 102,155 402,294 1,860,682
North America 16,241 375,000 - 391,241
Rest of World 58,096 50,366 287,538 396,000
---------------- ---------------- ---------------- ----------------
Total revenue 1,430,570 527,521 689,832 2,647,923
Cost of sales (1,011,313) - (482,885) (1,494,198)
---------------- ---------------- ---------------- ----------------
Gross profit 419,257 527,521 206,947 1,153,725
Centrally incurred income and expenditure not attributable to individual segments:
Administrative costs (1,570,614)
Depreciation and amortisation (117,018)
Share-based payments (52,604)
Finance income 1,403
Finance costs (84,378)
Research and development (R &
D) tax credits 136,517
----------------
Loss before tax (532,969)
Included within the revenues of the Professional segment is revenue of GBP439,544 relating to customer A (2015: GBPNIL) and GBP242,939 relating to customer B (2015: GBP343,536). Included within the revenues of the Pet segment is revenue of GBP360,789 relating to customer C (2015: GBP372,368) and GBP89,115 from customer D (2015: GBP71,211).
Continuing operations
Professional Consumer Pet Total
Year ended 31 March 2015 GBP GBP GBP GBP
REVENUE
United Kingdom 1,811,812 226,009 716,194 2,754,015
North America 50,550 - - 50,550
Rest of World 159,033 65,756 222,158 446,947
---------------- ---------------- ---------------- ----------------
Total revenue 2,021,395 291,765 938,352 3,251,512
Cost of sales (1,485,870) - (644,913) (2,103,783)
---------------- ---------------- ---------------- ----------------
Gross Profit 562,525 291,765 293,439 1,147,729
Central income and expenditure not attributable to individual segments:
Administrative costs (1,565,254)
Depreciation and amortisation (140,144)
Share-based payments (107,750)
Finance income 966
Finance costs (84,207)
----------------
Loss before tax (748,660)
Geographical segments
The Group's operations are located in the United Kingdom.
The following table provides an analysis of the Group's assets and liabilities, where identifiable, by segment.
Professional Pet Consumer Total
Year ended 31 March 2016 GBP GBP GBP GBP
External revenue 1,430,570 689,832 527,521 2,647,923
Segment current assets 1,229,969 491,219 300,199 2,021,387
Segment current liabilities 318,991 153,588 118,145 590,724
Professional Pet Consumer Total
Year ended 31 March 2015 GBP GBP GBP GBP
External revenue 2,021,395 938,352 291,765 3,251,512
Segment current assets 909,163 425,254 109,226 1,443,643
Segment current liabilities 527,098 246,546 76,515, 850,159
2 LOSS BEFORE TAX
Loss before tax is stated after charging / (crediting):
2016 2015
GBP GBP
Loss before tax is stated
after charging / (crediting):
Amortisation 77,798 66,786
Depreciation of property,
plant and equipment 39,220 73,358
(Profit) / Loss on sale
of property, plant and equipment - (1,042)
Auditor's remuneration
- as auditor 23,000 22,500
- other services 14,500 13,000
Research & development costs 361,040 351,474
Research and development 136,516 -
(R & D) tax credits
Stock write-off (exceptional) 20,000 -
Operating lease costs -
office rent 31,018 40,796
Impairment of trade receivables 4,426 -
Foreign exchange differences (19,680) (23,741)
During the period there was a quality issue in the supply chain of our wipes business which involved a write-off of damaged stock which could not be recovered from suppliers or insurers with this classed as an exceptional item within cost of sales.
Amounts payable to Mazars LLP and their associates (2015: Mazars LLP) in respect of both audit and non-audit services:
2016 2015
GBP GBP
Audit Services
- Statutory audit of parent
and consolidated financial
statements 23,000 22,500
Other Services
Audit of subsidiaries where
such services are provided
by Mazars LLP and their
associates 10,000 10,000
Other services 4,500 3,000
---------------- ------------------
37,500 38,950
3 PARTICULARS OF EMPLOYEES
The average number of staff employed by the Group, including Executive Directors, during the financial period amounted to:
2016 2015
No No
Executive Directors 2 2
Research and development 6 6
Administration and sales 8 10
---------------- ------------------
16 18
The aggregate payroll costs, including Directors' emoluments, of the above were:
2016 2015
GBP GBP
Wages and salaries 855,665 731,527
Social security costs 96,991 75,806
Other pension costs 23,585 25,559
---------------- ----------------
976,241 832,892
4 DIRECTORS' EMOLUMENTS
The Directors' aggregate emoluments in respect of qualifying services were:
2016 2015
GBP GBP
Emoluments receivable 229,000 170,919
---------------- ----------------
Total emoluments 229,000 170,919
The emoluments of the highest paid director were:
2016 2015
GBP GBP
Emoluments receivable 101,000 95,000
---------------- ----------------
101,000 95,000
Number of Directors accruing benefits under money purchase scheme
2016 2015
Number Number
- -
The Directors remuneration report can be found on pages 14 to 16.
5 FINANCE (COST) / INCOME
2016 2015
GBP GBP
Loan interest - (6,375)
Convertible loan interest (63,750) (57,055)
Invoice discounting interest (20,628) (20,777)
---------------- ------------------
Interest payable (84,378) (84,207)
Bank interest receivable 1,403 966
6 INCOME TAX
2016 2015
GBP GBP
Corporation tax at 20% (2015: - -
21%)
Research and development tax - -
credits received
Adjustment in respect of prior - -
periods
---------------- ------------------
Total current tax - -
Deferred tax - -
---------------- ------------------
- -
There is no tax charge as the Group has made losses in both the current and the previous year. At 31 March 2016 the Group had an unrecognised deferred tax asset relating to unutilised trading losses and other temporary differences of GBP3,768,667 (2015: GBP3,666,486).
The charge for the year can be reconciled to the loss per the Consolidated Statement of Comprehensive Income as follows:
2016 2015
GBP GBP
Loss for the year (532,969) (748,660)
Income tax credit -
---------------- ------------------
Loss on ordinary activities
before tax (532,969) (748,660)
Tax at the UK corporation tax
rate of 20% (2015: 21%) (106,594) (157,218)
Expenses not deductible for
tax purposes 4,413 1,205
Unrecognised, unrelieved tax
losses 102,181 156,013
---------------- ------------------
Total tax - -
7 LOSS PER SHARE
2016 2015
GBP GBP
Loss on ordinary activities
after taxation (532,969) (748,660)
Weighted average number of
shares (No)
For basic and fully diluted
loss per ordinary share 250,699,942 211,450,294
Loss per ordinary share - basic
and fully diluted (0.21)p (0.35)p
The weighted average number of shares and the loss for the year for the purposes of calculating the fully diluted earnings per share are the same as for the basic loss per share calculation. This is because the outstanding share options and warrants would have the effect of reducing the loss per ordinary share and would, therefore, not be dilutive under the terms of IAS 33.
8 PROPERTY, PLANT & EQUIPMENT
Group - 2016 Plant
Leasehold Computer and
Improvements equipment Machinery Total
GBP GBP GBP GBP
Cost
At 1 April
2015 - 37,010 225,686 262,696
Additions - 968 14,309 15,277
---------------- ---------------- ---------------- ----------------
At 31 March
2015 - 37,978 239,995 277,973
Depreciation
At 1 April
2015 - 35,913 180,418 216,331
Charge for
the year - 671 38,549 39,220
---------------- ---------------- ---------------- ----------------
At 31 March
2016 - 36,584 218,967 255,551
Net Book
Value 1,394 21,028 22,422
At 31 March
2016 -
Group - 2015 Plant
Leasehold Computer and
Improvements equipment Machinery Total
GBP GBP GBP GBP
Cost
At 1 April
2014 22,647 64,711 282,964 370,322
Additions - 1,041 - 1,041
Disposals (22,647) (28,742) (57,278) (108,667)
---------------- ---------------- ---------------- ----------------
At 31 March
2015 - 37,010 225,686 262,696
Depreciation
At 1 April
2014 22,647 62,440 166,555 251,642
Charge for
the year - 2,217 71,140 73,357
On disposals (22,647) (28,742) (57,278) (108,667)
---------------- ---------------- ---------------- ----------------
At 31 March
2015 - 35,915 180,417 216,332
Net Book
Value
At 31 March
2015 - 1,095 45,269 46,364
9 OTHER INTANGIBLE ASSETS
Group - 2016 Development Patents
costs and licences Total
GBP GBP GBP
Cost
At 1 April 2015 153,037 629,727 782,764
Additions 93,299 46,158 139,457
---------------- ---------------- ----------------
At 31 March
2016 246,336 675,885 922,221
Amortisation
At 1 April 2015 6,333 265,790 272,123
Charge for the
year 12,868 64,930 77,798
Impairment - (7,222) (7,222)
---------------- ---------------- ----------------
At 31 March
2016 19,201 337,942 357,143
Net Book Value
At 31 March
2016 227,135 337,943 565,078
The Directors, having reviewed the Company's patent base, have concluded that all patents are still of use in the business and therefore no impairment has been made.
Group - 2015 Development Software Patents
costs intangibles and licences Total
GBP GBP GBP
Cost
At 1 April 2014 84,437 42,946 584,746 712,129
Additions 68,600 - 44,981 113,581
Disposals - (42,946) - (42,946)
---------------- ---------------- ---------------- ----------------
At 31 March
2015 153,037 - 629,727 782,764
Amortisation
At 1 April 2014 - 42,946 205,336 248,282
Charge for the
year 6,333 - 60,454 66,787
On disposals - (42,946) - (42,946)
---------------- ---------------- ---------------- ----------------
At 31 March
2015 6,333 - 265,790 272,123
Net Book Value
At 31 March
2015 146,704 - 363,937 510,641
Company 2016
Patents 2015
and Patents
Licences and licences
GBP GBP
Cost
At 1 April 629,727 584,746
Additions 46,158 44,981
---------------- ----------------
At 31 March 675,885 629,727
Amortisation
At 1 April 265,790 205,336
Charge for the
year 64,930 60,454
On disposals (7,222) -
---------------- ----------------
At 31 March 337,942 265,790
Net Book Value
At 31 March 337,943 363,937
The intangible assets relate to the development of patents and also to the acquisition of the Byofresh licence.
10 INVESTMENTS IN SUBSIDIARIES
COMPANY Shares Shares
in in
Subsidiary Subsidiary
Undertakings Undertakings
2016 2015
GBP GBP
At 1 April 2015 2,480,311 2,480,311
Additions relating to share
options issued to employees 27,097 58,759
Impairment - (58,759)
---------------- ----------------
At 31 March 2016 2,507,408 2,480,311
In the prior year, the Company determined that, due to the trading losses incurred by the subsidiaries of the Company, it was reasonable to reflect an impairment in the value of short term loans and trading advances made to its subsidiaries by the Company.
Details of all subsidiary undertakings included in the consolidated financial statements are as follows:
Country Holding Proportion Nature of
of incorporation of voting business
rights
and shares
held
Byotrol Technology England Ordinary 100% Anti-microbial
Limited share capital products
Byotrol Inc United Ordinary 100% Anti-microbial
States share capital products
Byotrol Consumer England Ordinary 100% Anti-microbial
Products share capital products
11 INVENTORIES
Group Company
2016 2015 2016 2015
GBP GBP GBP GBP
Raw materials
and consumables 36,124 76,147 - -
Finished goods
and goods for
resale 184,194 153,875 - -
---------------- ---------------- ---------------- ----------------
220,318 230,022 - -
Included above are inventories of GBP Nil (2015: GBP Nil) carried at net realisable value. During the year, there was a quality issue in the supply chain of our wipes business which resulted in an unrecovered write-off of damaged stock of GBP20,000.
The cost of Inventories expensed, included in the Consolidated Statement of Comprehensive Income as Cost of Sales is GBP1,286,833 (2015: GBP1,788,823).
No earlier write downs were reversed during the current or preceding period.
12 TRADE AND OTHER RECEIVABLES
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
Trade receivables 486,143 697,492 - -
Tax repayable - - 24,307 10,251
Amount owed by
group undertakings - - 723,508 -
Other receivables 212,419 16,409 7,263 7,263
Prepayments and
accrued income 85,319 212,989 34,558 22,333
---------------- ---------------- ---------------- ----------------
781,881 926,890 789,636 39,847
The Directors consider that the carrying amount of trade and other receivables approximates their fair value. The Group had 67days of revenue outstanding in trade receivables as at 31 March 2016 (2015: 53 days). Included within trade receivables is GBP98,711 (2015: GBP51,497) denominated in US dollars and GBP13,371 (2015: GBPNIL) denominated in Euros.
The Group's maximum exposure to credit risk equates to the carrying value of cash held on deposit and trade and other receivables.
The Group's credit risk is primarily attributable to trade receivables. The amounts presented in the consolidated statement of financial position are net of allowances of GBP30,285 (2015: GBP25,859) for doubtful receivables. This allowance has been based on the knowledge of the financial circumstances of individual receivables at the reporting date. The Group has some concentration of credit risk with some exposure to two major customers whose year end balances totalled GBP137,428 (2014: GBP219,638). The majority of the exposure is spread over a number of counterparties and customers.
Group Company
2016 2015 2016 2015
GBP GBP GBP GBP
Impairment brought
forward 25,859 75,780 - -
Amounts written - (49,921) - -
off
Amounts recovered (23,525) - - -
Impairment charge 27,951 - - -
---------------- ---------------- ---------------- ----------------
Impairment carried
forward 30,285 25,859 - -
The age profile of the net trade receivables for the Group at the year end was as follows:
Debt age - "days overdue"
2016 Current 0-30 31-60 61-90 91-120 Over Total
Days Days Days days 120
Days
Not
impaired 294,214 51,882 70,203 6,134 162 63,548 486,143
Impaired - - - - - 30,285 30,285
_____________ _____________ _____________ _____________ _____________ _____________ _____________
Trade
receivables
Value
(GBP) 294,214 51,882 70,203 6,134 162 93,833 516,428
============= ============= ============= ============= ============= ============= =============
% 61 10 15 1 0 13 100
============= ============= ============= ============= ============= ============= =============
2015 Current 0-30 31-60 61-90 91-120 Over Total
Days Days days days 120
days
Not
impaired 430,479 91,029 107,677 26,766 29,462 12,079 697,492
Impaired - - - - - 25,859 25,859
_____________ _____________ _____________ _____________ _____________ _____________ _____________
Trade
receivables
Value
(GBP) 430,479 91,029 107,677 26,766 29,462 37,938 723,351
============= ============= ============= ============= ============= ============= =============
% 62 13 15 4 4 2 100
============= ============= ============= ============= ============= ============= =============
External trade receivables are generally on 30 to 90 day terms and are not considered to carry any significant risk of impairment as at the year end date.
As at 31 March 2016 there was GBP191,929 (2015: GBP175,984) worth of trade receivables overdue but not impaired.
12 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash held by the Group and Company. The carrying amount of the asset approximates the fair value.
Cash held by the Group is with government supported UK based banks GBP1,004,407 (2015: GBP273,574) and a limited amount GBP12,781 (2015: GBP13,156) with one US bank. All amounts held by the Company are with government supported UK based banks.
13 TRADE AND OTHER PAYABLES
Group Group Company Company
2016 2015 2016 2015
Current: GBP GBP GBP GBP
Trade payables 369,899 497,326 132,885 34,317
Invoice discounting
facility 73,716 157,266 - -
Other payables - - - 1,849
Other taxes 31,437 72,536 8,615 15,381
Accruals and deferred
income 115,672 123,031 50,400 72,810
---------------- ---------------- ---------------- ----------------
590,724 850,159 191,900 124,357
In both the Group and Company, the carrying amount of trade and other payables approximates to their fair values.
Included in trade payables is GBP23,305 (2015: GBP32,951) denominated in US dollars and GBP6,693 (2015:GBPNIL) denominated in Euros.
Byotrol Technology Limited, a 100% subsidiary, is party to an invoice discounting arrangement. The invoice discounting facility is secured by a fixed charge debenture on the assets of the Byotrol Technology Limited. Byotrol plc has provided a cross guarantee to Byotrol Technology Limited to support the invoice discounting facility. This arrangement ceased on 28(th) April 2016.
The age profile of the net trade and other payables for the Group at the year end was as follows:
Payables age - "days past due" at balance sheet date
2016 Current 0-30 31-60 61-90 91-120 Over Total
Days Days days days 120
Days
Trade
payables
value
(GBP) 212,045 130,577 11,583 9,916 0 5,778 369,899
============= ============= ============= ============= ============= ============= =============
% 57 35 3 3 0 2 100
============= ============= ============= ============= ============= ============= =============
Invoice
discounting
facility 73,716 - - - - - 73,716
============= ============= ============= ============= ============= ============= =============
Convertible
loan
notes 359,975 - - - - - 359,975
============= ============= ============= ============= ============= ============= =============
2015 Current 0-30 31-60 61-90 91-120 Over Total
Days Days days days 120
Days
Trade
payables
value
(GBP) 92,460 350,038 45,403 3,688 0 5,737 497,326
============= ============= ============= ============= ============= ============= =============
% 18 71 9 1 0 1 100
============= ============= ============= ============= ============= ============= =============
Invoice
discounting
facility 157,266 - - - - - 157,266
============= ============= ============= ============= ============= ============= =============
Convertible
loan
notes 328,625 - - - - - 328,625
============= ============= ============= ============= ============= ============= =============
14 BORROWINGS
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
Current:
Convertible loan
notes 359,975 - 359,975 -
============== ============== ============== ==============
Non-current:
Convertible loan
notes - 328,625 328,625
============== ============== ============== ==============
The Company issued 380 10% convertible bonds of GBP1,000 each, totalling a value of GBP380,000 on 20(th) December 2013. The bonds mature three years from the issue date at their nominal value of GBP380,000 or can be converted into shares at the holder's option at any time up to the maturity date at the rate of 18,315 shares per GBP1,000. The values of the liability component and the equity conversion component were determined at the issuance of the bond.
The fair value of the liability component was calculated using a market interest rate that would be available to the Company for an equivalent non-convertible bond. The residual amount, representing the value of the equity conversion option, is included in shareholders' equity in other reserves.
The convertible bond recognised in the balance sheet is calculated as follows:
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
Proceeds of issue
of convertible
loan note 380,000 380,000 380,000 380,000
Equity component (69,301) (69,301) (69,301) (69,301)
---------------- ---------------- ---------------- ----------------
Liability component
at date of issue 310,699 310,699 310,699 310,699
Interest charged
cumulative 125,276 55,926 125,276 55,926
Interest paid cumulative (76,000) (38,000) (76,000) (38,000)
---------------- ---------------- ---------------- ----------------
Liability component
at 31 March 359,975 328,625 359,975 328,625
At 31 March 2016, the carrying value of the liability component of the convertible loan note is considered to approximate its fair value.
15 FINANCIAL INSTRUMENTS
Details of the methods adopted for the categorisation and measurement of financial assets and liabilities are set out in the accounting policies.
Foreign currency risk
The Group operates in a number of markets across the world and is exposed to foreign exchange risk arising from various currency exposures in particular, with respect to the US dollar. The Group is exposed to foreign currency risk arising from recognised assets and liabilities as well as commitments arising from future trading transactions. Although the countries that the Group trades with have relatively stable economies, management has set up a policy which requires Group companies to manage their foreign exchange risk against their functional currency by closely monitoring spot rate to balance inflows and outflows. A sensitivity analysis of the Group's foreign exchange exposure is not presented as the risk is considered to be insignificant.
Interest rate risk
The Group's principal interest-bearing financial instrument is the convertible loan note (note 15). This instrument requires interest to be paid at a fixed rate of 10% per annum. The Group is also exposed to minimal interest rate risk arising on cash and cash equivalent balances and bank loans and overdrafts in the prior year. The Group does not consider that it is significantly exposed to interest rate risk, either in the current or prior year, and therefore an interest rate sensitivity analysis is not presented.
Fair values of financial liabilities and financial assets
The fair values based upon the market value or discounted cash flows of financial liabilities and financial assets, held in the Group was not materially different from their book values.
Liquidity risk
All of the Group's financial instruments have been classified as current with the exception of its convertible loan note which is repayable (if not converted) within the following three years. The Group's ability and approach to manage its liquidity position is set out in its going concern accounting policy.
16 COMMITMENTS UNDER OPERATING LEASES
The minimum lease payments under non-cancellable operating lease rentals are in aggregate as follows:
Group Group Company Company
2016 2015 2016 2015
GBP GBP GBP GBP
Amounts due:
Within one year 65,137 55,456 65,137 -
In second to fifth
years inclusive 77,558 - 77,558 -
More than five - - - -
years
---------------- ---------------- ---------------- ----------------
142,695 55,456 142,695 -
Operating lease payments represent rentals payable by the Group and the Company for its office property. laboratory facilities and office equipment. The office property and laboratory lease is negotiated for a term of two years and the office equipment is for a term of five years. The office property and laboratory facilities can be terminated before the end of the term with a three-month notice period.
17 SHARE BASED PAYMENTS
The Company has granted equity settled share options to certain directors and employees. The exercise price is equal to or more than market value of the shares at the date of grant. The vesting period is two years. If the options remain unexercised after a period of ten years from the date of grant the options expire.
Details of the share options and warrants outstanding during the year are as follows:
2016 2015
Number Weighted Number Weighted
of share average of share average
options exercise options exercise
price price
(in p) (in p)
Outstanding at beginning
of year 24,722,500 7.10 8,210,000 14.40
Share options granted
during the year 4,300,000 3.50 16,662,500 3.50
Share options lapsed
during the year (2,260,000) 8.06 (150,000) 3.50
---------------- ---------------- ---------------- ----------------
Outstanding at the
end of the year 26,762,500 6.45 24,722,500 7.10
The number of options exercisable at 31 March 2016 is 1,680,000 (2015: 2,240,000).
The Group recognised the following expenses related to share based payments:
2016 2015
GBP GBP
Charged to Consolidated Statement
of Comprehensive Income 52,604 107,750
The fair value of options granted under the employee option schemes is measured using the Black-Scholes model.
New Grants
3 December
Grant date 2015
Share price at grant date 3.25p
Exercise price 3.5p
Number of employees 7
Share options granted 4,050,000
Vesting period (years) 1
Expected volatility 43.7%
Option life (years) 10
Expected life (years) 7
Risk free rate 1.06
Expected dividends expressed
as a dividend yield 0
Fair value per option 1.42p
The options outstanding at 31 March 2016 had a weighted average exercise price of 5.90 p (2015: 7.10p) and a weighted average remaining contractual life of 5.7 years (2015: 7.8 years).
The aggregate of the estimated fair values of the options granted in the year is GBP333,250 (2015: GBP 333,250).
At 31 March 2016 there were options outstanding over 26,762,500 (2015: 24,722,500) ordinary shares of 0.25p each which are exercisable at prices in the range from 3.5p to 79.5p under the company's various share option schemes exercisable at various times until 3 June 2023.
Expected volatility was based upon the historical volatility over the expected life of the schemes. The expected life is based upon historical data and has been adjusted based on management's best estimates for the effects of non-transferability, exercise restrictions and behavioural considerations.
18 RELATED PARTY TRANSACTIONS
Directors
Fees for Directors' services are set out in the Directors' Remuneration Report and in Note 4 to the financial statements.
Fees for Mr Martel are paid to Martel Northern Limited and amounted to GBP24,000 (2015: GBP24,000). Expenses are paid direct to Mr Martel and amounted to GBP5,607 (2015: GBPNIL). The amounts outstanding at the year end totalled GBP6,000 (2015: GBP18,000). Convertible loan note interest for Mr Martel (non-beneficial) is paid to Maunby Nominees and amounted to GBP5,000 (2015: GBP5,000).
Fees for Dr Medinger are paid to Medinger Associates and amounted to GBP24,000 (2015: GBP24,000). Expenses are paid direct to Dr Medinger and amounted to GBP2,354 (2015: GBPNIL). The amounts outstanding at the year end totalled GBP12,000 (2015: GBP30,000). Convertible loan note interest for Dr Medinger is paid direct to Dr Medinger and amounted to GBP3,000 (2015: GBP3,000).
Expenses are paid direct to Dr Francis and amounted to GBP3,994 (2015: GBP1,026). The amounts outstanding at the year end totalled GBPNIL (2015: GBP3,150).
Expenses are paid direct to David Traynor and amounted to GBP918 (2015: GBPNIL). The amounts outstanding at the year end totalled GBPNIL (2015: GBPNIL). Convertible loan note interest for David Traynor is paid direct to Mr Traynor and amounted to GBP5,000 (2015: GBP5,000).
Key management personnel
The Board is of the opinion that the key management personnel are the Executive Directors & Non-Executive Directors. In addition to their salaries the Group also provides certain non cash benefits to the Executive Directors. The total compensation comprised:
2016 2015
GBP GBP
Short term benefits 230,482 170,918
Share based payments 25,507 49,587
---------------- ----------------
Total 255,989 220,505
19 SHARE CAPITAL
2016 2015
Authorised:
375,057,945 (2015: 375,057,945)
Ordinary shares of 0.25p each 937,645 937,645
The Ordinary Shares have full equal voting rights, equal participation in dividends, equal participation in distribution on winding up with no redemption rights.
No GBP
Issued and fully paid Ordinary
Shares (par value 0.25 pence):
At 1 April 2015 225,034,769 562,587
Shares issued 43,016,796 107,543
---------------- ----------------
At 31 March 2016 268,051,565 670,130
Capital management
The Group's main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade in the foreseeable future. The Group also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital.
The Group considers its capital to include share capital, share premium, merger reserve and the retained deficit. The Group has no external debt.
The Group has no long-term gearing ratio target as it believes that it currently has no assets on which to secure funding.
Reserves
The nature and purpose of each of the reserves included within equity is as follows:
-- Share capital represents the nominal value of ordinary shares issued and fully paid.
-- Share premium represents the excess of funds raised from the placing of equity shares over the nominal value of the shares after deducting directly attributable placing costs.
-- The merger reserve was established in respect of previous acquisitions, which qualify for Section 131 merger relief.
-- The translation reserve represents the cumulative gains and losses on the translation of the Group's net investment in its overseas subsidiary.
-- The convertible loan note reserve is the equity component for the convertible loan notes issued by the Group, see note 15.
-- Retained deficit represent accumulated losses to date. 20 ULTIMATE CONTROLLING PARTY
The Company is listed on AIM. It has no single ultimate controlling party.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFSRTLIDLIR
(END) Dow Jones Newswires
August 18, 2016 02:00 ET (06:00 GMT)
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