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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Clinigen Group Plc | LSE:CLIN | London | Ordinary Share | GB00B89J2419 | 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% | 925.00 | 924.50 | 925.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMCLIN
RNS Number : 4819Z
Clinigen Group plc
15 March 2017
15 March 2017
STRONG H1 PERFORMANCE WITH ADJUSTED EPS UP 31%*
Clinigen Group plc (AIM: CLIN, 'Clinigen' or 'the Group'), the global pharmaceuticals and services company, today publishes its half year results for the six months ended 31 December 2016.
FINANCIAL SUMMARY
Six months ended 31 December 2016 2015 Growth GBPm GBPm ------------------------------ ------- ------- ------- Reported gross profit 58.0 40.3 44% ------------------------------ ------- ------- ------- Adjusted gross profit 59.1 44.1 34% ------------------------------ ------- ------- ------- Adjusted EBITDA 30.0 22.4 34% ------------------------------ ------- ------- ------- Adjusted earnings per share 19.0p 14.5p 31% ------------------------------ ------- ------- ------- Reported earnings per share 2.3p 1.4p 64% ------------------------------ ------- ------- ------- Dividend per share 1.6p 1.3p 23% ------------------------------ ------- ------- ------- Net debt (70.9) (81.5) ------------------------------ ------- ------- -------
Note: adjusted EBITDA and adjusted EPS metrics are now shown after share based payments of GBP1.1m (2015: GBP1.1m). Prior year has been restated accordingly.
HIGHLIGHTS
-- Adjusted gross profit* up 34% driven by organic growth across all divisions, a full six months contribution from Link Healthcare and currency benefits
-- Adjusted EPS* up 31% to 19.0p (2015: 14.5p)
-- Interim dividend increased 23% to 1.6p (2015: 1.3p)
-- Excellent performances by Link Healthcare and Clinical Trial Services
-- Launch of Japanese business, enhancing licensed and unlicensed presence in Asia
-- Global Access added further exclusive supply agreements
-- First contracts converted from Managed Access to Global Access
Shaun Chilton, Group Chief Executive Officer of Clinigen, said:
"We have delivered another strong half of progress, achieving more than 30% growth across all our key financial measures.
"Link Healthcare has achieved an outstanding performance, demonstrating the value of the acquisition. Clinical Trial Services delivered another excellent performance whilst Managed Access and Specialty Pharma continued to see strong growth. It is particularly pleasing that all the divisions contributed well to the growth.
"Our focus now is to capitalise on our international market leading positions and the geographical footprint we have built. We will also look for selective bolt-on acquisitions to enhance our product portfolio, geographical footprint and / or service capabilities.
"We have started the second half positively and are well positioned to complete another year of strong growth."
*Adjusted results exclude amortisation, non-underlying costs and include the 50% share of the unaudited results from the Joint Venture in South Africa. Adjusted results are now shown after share based payments and the prior year has been restated accordingly.
-Ends-
An analyst briefing will be held at 9:00am on Wednesday, 15 March 2017 at the offices of Instinctif Partners,
65 Gresham Street, London EC2V 7NQ.
An audio replay of the meeting will be made available shortly afterwards via the Group's website: www.clinigengroup.com.
Contact details
Clinigen Group plc Tel: +44 (0) 1283 495010 Shaun Chilton, Group Chief Executive Officer Martin Abell, Group Chief Financial Officer Matt Parrish, Head of Investor Relations Numis Securities Limited Tel: +44 (0) 20 7260 1000 Michael Meade / Freddie Barnfield (Nominated Adviser) James Black / Tom Ballard (Corporate Broking) RBC Capital Markets - Joint Tel: +44 (0) 20 Broker 7653 4000 Marcus Jackson / Elliot Thomas / Jack Wood Instinctif Partners Tel: +44 (0) 20 7457 2020 Adrian Duffield / Melanie Toyne-Sewell / Alex Shaw Email: clinigen@instinctif.com
Notes to Editors
About Clinigen Group
Clinigen Group plc (AIM: CLIN) is a global pharmaceutical and services company with a unique combination of businesses focused on providing access to medicines. Its mission is to deliver the right medicine to the right patient at the right time and is focused in three areas of global medicine supply; clinical trial, unlicensed and licensed medicines.
Clinigen Clinical Trial Services is the global market leader in the management and supply of commercial medicines for clinical trials.
The Group is also the trusted global leader in ethically sourcing and supplying unlicensed medicines to hospital pharmacists and physicians for patients with a high unmet need, through three of its divisions: Idis Managed Access runs early access programmes for innovative new medicines. Idis Global Access and Link Healthcare work directly with healthcare professionals to enable compliant access to unlicensed medicines on a global basis and niche essential licensed and generic medicines across Australasia, Africa and Asia (AAA region).
Clinigen Specialty Pharmaceuticals acquires global rights, revitalises and markets its own portfolio of niche hospital medicines.
For more information, please visit www.clinigengroup.com
Cautionary statement
This announcement contains certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Clinigen Group plc. These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. Except as required by law, Clinigen undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances.
The information contained in this statement has not been audited and may be subject to further review.
OVERVIEW
This has been another important six months for Clinigen combining a strong financial performance with further progress on driving the strategy to cement the Group's market leading positions.
Financial performance
Revenue* was GBP134.6m (2015: GBP157.1m) due to a shift in mix of Managed Access ('MA') programmes towards products provided to patients by its pharma clients free of charge, a change in mix in Clinical Trial Services ('CTS') towards higher margin products and activity, and in Global Access ('GA'), the termination last year of a large low margin commercial contract.
Gross profit* increased 34% compared to last year driven by organic growth across all divisions, a full six months contribution from Link Healthcare ('Link') and currency benefits following the depreciation of Sterling.
EBITDA* increased by 34% to GBP30.0m and EPS* increased 31% to 19.0p (2015: 14.5p). Reported EPS was 2.3p (2015: 1.4p) after taking account of the revision to the estimate for the deferred consideration of the Link acquisition, which is charged to the profit and loss account.
Cash generated from operations was GBP7.7m (2015: GBP22.1m). This was a result of an increase in net working capital, due to timing of cash flows around period ends, and the completion of a large contract with favourable working capital characteristics.
In view of the strong trading performance and confident outlook, the Board has increased the interim dividend by 23% to 1.6p per share (2015: 1.3p).
Strategic progress
Clinigen has a unique combination of businesses providing access to medicines across clinical trials, unlicensed and licensed medicines - the key stages of a pharmaceutical product's lifecycle. It is able to offer access and supply solutions to both pharmaceutical companies and hospital physicians and pharmacists through a combination of a global reach and local knowledge.
Underlying the business remains the mission: 'Right Medicine, Right Patient, Right Time'.
Clinical Trials
The changing nature of generating data in support of commercialising medicines is reflected in the ongoing strategy for CTS to add complementary services to the core business. The rising prominence of Investigator Initiated Trials ('IITs'), in addition to the more traditional randomised clinical trials, is an important growth driver for CTS.
These changes in the clinical environment are driving an increase in demand for larger service providers such as Clinigen who have a global reach and are capable of offering a broader and more complex solution.
Unlicensed medicines
Clinigen's goal is to become the trusted global leader in the ethical access to unlicensed medicines.
The management continues to see significant long term opportunity for the Group to leverage its market leading position and capability to drive organic growth across all divisions and multiple geographies. Access to products and deeper relationships with customers remain the major drivers of the unlicensed medicines businesses, MA and GA.
Progress towards this goal saw the addition of new MA products along with further long-term GA exclusive supply agreements and the conversion of contracts from MA to GA.
There are two key technological priorities which are both progressing to plan - the implementation of the Group ERP system and the launch of Cliniport. The Group ERP system will help make the business more efficient and scalable. Cliniport is the online proprietary medicines access platform which aims to strengthen Clinigen's market proposition and interaction with customers.
Licensed medicines
Specialty Pharmaceuticals ('SP') is making good progress on the revitalisation of its newer global products, applying many of the same revitalisation principles that has made its original asset, Foscavir, such a successful product for the Group.
In September 2016, the transfer of the US license for Ethyol to Cumberland was completed with the benefits expected to follow in H2. In January 2017, Clinigen signed another exclusive agreement with Cumberland to commercialise Totect in the US.
As a result of the Link acquisition and its regional licensed medicines capabilities, the Group is now being presented with new collaboration opportunities. In December 2016, Eisai and Clinigen agreed to collaborate to provide women in South Africa with access to Halaven for advanced breast cancer. This is the first distribution agreement of this kind for Clinigen and marks the continuation of a successful relationship with Eisai.
CURRENT TRADING AND SECOND HALF PRIORITIES
The second half of the year has started positively and the Group is trading in line with the Board's expectations.
The priority is to capitalise on Clinigen's international market leading positions and geographical footprint in order to drive organic growth across the Group.
Longer term the Board is confident that the Group is in an excellent position to capitalise on the substantial opportunity in its markets.
OPERATIONAL REVIEW
Gross profit by division
Six months ended 31 December 2016 2015 Growth Adjusted results* GBPm GBPm ------------------------------ ----- ----- ---------- Specialty Pharmaceuticals 17.0 14.3 19% ------------------------------ ----- ----- ---------- Clinical Trial Services 10.0 8.0 25% ------------------------------ ----- ----- ---------- Managed Access 13.9 12.2 14% ------------------------------ ----- ----- ---------- Global Access 7.2 6.9 4% ------------------------------ ----- ----- ---------- Link Healthcare 11.0 2.7 >100% ------------------------------ ----- ----- ---------- 59.1 44.1 34% ------------------------------ ----- ----- ----------
Specialty Pharmaceuticals
SP is a global specialty pharmaceutical business that acquires the global rights to niche hospital-only and critical care medicines. SP has five products in two therapy areas (oncology support and infectious disease).
This division, which represents 29% of Group gross profit, increased its gross profit by 19%. The gross margin of 84% was broadly unchanged.
Foscavir is an anti-viral targeted at human herpes viruses and used primarily in bone marrow transplant patients. Gross profit increased by 50% due to a good overall underlying performance (in-market sales increased by 4% in the period), the phasing of bulk shipments into the US, and currency benefits.
Whilst the major revitalisation work has been done on Foscavir, the SP team continues to look at new applications such as in the treatment of human herpes virus 6, HHV6. The team is also preparing for the launch of the Foscavir product bag line extension in the next financial year.
Ethyol, used to reduce the incidence of dry mouth in patients undergoing high dose radiation treatment, saw a reduction in gross profit due to the transfer of the US license to Clinigen's strategic partner, Cumberland. This caused a temporary reduction in volumes as product from the previous distributor works its way through the supply chain. Volumes are already normalising in H2 and it is expected that the additional focus and expertise that the strategic partnership provides will drive future volume growth.
The Group's dexrazoxane portfolio now comprises Cardioxane, Savene and the newly acquired Totect product. Cardioxane is used as a cardio protectant in oncology (anthracycline) treatment. Savene and Totect are used as important emergency treatments for extravasation (leakage) at the site of injection of oncology (anthracycline) treatments. The dexrazoxane portfolio performed as expected with a reduction in gross profit as last year benefited from the supply of Cardioxane as an adjuvant drug into a clinical trial.
An exclusive agreement with Cumberland to commercialise Totect was announced in January 2017. Totect is the US market equivalent product of Savene, providing an important entry for the dexrazoxane product into the US. This product is expected to start producing sales in the final quarter of this financial year.
The license variation to remove the paediatric contraindication (applied to Cardioxane via an Article 31 referral) submitted by Clinigen in 2014 has been referred to the European Medicines Agency ('EMA') after the Member States failed to reach consensus. Clinigen remains confident in the safety and efficacy data submitted to the EMA and the support of Key Opinion Leaders ('KOLs') in paediatric oncology and cardiology.
For SP, the focus in H2 is on continuing the revitalisation of the existing products and evaluating opportunities to add new products.
Clinical Trial Services
CTS is the global market leader in the specialist supply and management of quality-assured medicines and services to clinical trials. CTS served 67 clients in the period with the top 10 clients representing 86% of gross profits. Half of CTS' revenue in the period was generated from clients who spent between GBP1m and GBP5m.
The division, representing 17% of Group gross profit, had an excellent first half, increasing gross profit by 25%.
The gross margin of 26% increased significantly versus prior year (2015: 15%) due to the change in mix towards higher margin products and activity.
Further progress was made in adding sales of expanded added value services, which is intended to deepen relationships with clients and reinforce CTS' market-leader status. For instance, CTS supported 19 IITs in the period (2015: 2).
CTS has established a leading position in the market as a trusted partner capable of delivering high quality services across the world with extensive understanding of the complex regulatory environment. These strengths, combined with the strategy of over-layering the core service offering with added value services, positions CTS to take advantage of the rapidly developing market opportunity.
CTS is demonstrating good momentum underpinned by a robust pipeline.
Managed Access
MA is the global market leader in providing exclusive access to early phase, innovative medicines in disease areas where there is high unmet medical need.
During the period, MA ran programmes for 18 of the top 25 pharma and biotech companies in the world. MA had 102 programmes running at 31 December, of which 14 had started within the previous six months. A total of 98,000 units of drugs were shipped across 100 countries and 86% of products shipped on behalf of MA's clients were provided free of charge to patients.
The division, representing 23% of Group gross profit, had a strong first half as new programmes ramped up. Approximately half the gross profit is generated by the top 10 programmes, underlining that quality is as important as the quantity.
MA continues to add new clients. In January, the launch of a new MA programme for TESARO's Niraparib for patients with ovarian cancer was announced, representing the first MA programme with this company.
A good pipeline of new programmes positions MA well for the second half.
Global Access
GA is a market leader in the ethical supply of on demand unlicensed or short supply medicines via physicians to their patients. In total it shipped 183,000 units (2015: 220,000) to physicians across 43 countries.
This division, representing 12% of Group gross profit made solid progress, recording a gross profit increase of 4%. The gross margin increased to 37% from 27% last year due to the termination of a low margin contract last year, partially offset by a change in product mix and margin compression from currency effects.
A key focus in GA is to increase the number of exclusive supply agreements for certain high demand or niche medicines. During the first half, the number of these agreements increased to six and further exclusive supply agreements are expected to complete in the short term.
Growth was supported by the conversion of multiple contracts from early access to on demand access. This is also a key part of the strategy.
The 'Point of Care' journal was launched in the period. This independent, open access journal, funded by Clinigen, via an educational grant, is targeted at pharmacists and healthcare professionals around the world. The journal has been developed with the goal of raising awareness around hot topics, issues and solutions relating to access to medicines.
For GA, the focus for the remainder of the year is to capitalise on the considerable long term international opportunity in the on demand supply of unlicensed medicines. The business will leverage the infrastructure in place, adding exclusive supply agreements and increasing the profile with physicians, pharmacists and KOLs through targeted marketing activity.
Link Healthcare
Link provides local and regional commercial access to licensed and unlicensed products and specialist pharmaceutical and medical technology products in the regions of Australia, Africa and Asia ('AAA'). It is enabling the Group to offer global reach to its customers with local expertise.
Link, representing 19% of the Group's gross profit, delivered an outstanding performance. On a pro forma basis, comparing six months versus six months last year, gross profits increased by more than 35%. This performance was driven by the combination of significant organic growth and support from the translation effects from the depreciation in Sterling. Growth was particularly strong in South Africa.
The gross margin increased from 36% to 39% due to a change in product mix and the appreciation of the local currencies, particularly in South Africa, making the cost of drugs cheaper to purchase.
The launch of the Japanese business in October 2016 further strengthens Clinigen's presence in Asia. It is a significant milestone for the Group in expanding the global footprint in a country which is the third largest pharmaceutical market globally. The Japanese business enables Clinigen to supply and distribute both licensed and unlicensed medicines in the country and has also allowed the Group to take direct control of Foscavir.
In addition, a wholesale license was obtained in Hong Kong in February 2017, allowing the Group to progress its infrastructure expansion strategy and take back control of distribution in this region.
Link's performance continues to be strong and the new business pipeline is promising.
FINANCIAL REVIEW
Summary income statement
Six months ended 31 December 2016 2015 Growth Adjusted results* GBPm GBPm ------------------------------ ------------------- ------- ------- Revenue 134.6 157.1 (14)% ------------------------------ ------------------- ------- ------- Gross profit 59.1 44.1 34% ------------------------------ ------------------- ------- ------- Administrative expenses (28.0) (20.6) (36)% ------------------------------ ------------------- ------- ------- EBITDA (before SBP) 31.1 23.5 32% ------------------------------ ------------------- ------- ------- Share based payments (1.1) (1.1) ------------------------------ ------------------- ------- ------- EBITDA (after SBP) 30.0 22.4 34% ------------------------------ ------------------- ------- ------- Depreciation (0.4) (0.2) ------------------------------ ------------------- ------- ------- EBITA 29.6 22.2 33% ------------------------------ ------------------- ------- ------- Finance cost (1.3) (1.8) ------------------------------ ------------------- ------- ------- Profit before tax 28.3 20.4 39% Basic earnings per share (after SBP) 19.0p 14.5p 31% ------------------------------ ------------------- ------- ------- Dividend per share 1.6p 1.3p 23% ------------------------------ ------------------- ------- -------
In order to better understand the performance of the Group, the results presented throughout this overview of the interim results are on an adjusted basis unless otherwise indicated. Adjusted gross profit and adjusted EBITDA are viewed as the best measures of financial performance, together providing the best insight into top line and profit growth.
Now that the IPO related share based payments ('SBP') have concluded and consequently the SBP are at a normalised level, SBP costs are now included in adjusted EBITDA, with the prior year comparative restated accordingly.
Revenue* was GBP134.6m (2015: GBP157.1m) due to a combination of factors. The main driver was a shift in mix of MA programmes towards products provided to patients by its pharma clients free of charge, largely due to the ramp up of a single large contract. Other contributing factors were a change in mix in CTS towards higher margin products and activity, and in GA, the termination last year of a large low margin commercial contract which accounted for GBP4.5m reduction in revenue and GBP0.4m reduction in gross profit.
Gross profit*, which is viewed as the key indicator of top line performance, increased by 34% due to a combination of good organic growth across all divisions, a full six months contribution from Link and currency benefits. The currency benefits following the depreciation of Sterling mostly affected the SP and Link divisions.
Administrative expenses* increased in line with gross profit as planned. Contributing to the increase in overheads were a full six months of Link, increased cost of overseas overheads on translation following the depreciation in Sterling (over 35% of employees are overseas), and increased spend to strengthen the infrastructure and management team to support the Group's long term growth ambitions. The SBP charge, relating to long term incentive plans, was GBP1.1m (2015: GBP1.1m).
EBITDA* increased by 34%, benefiting from the increase in gross profits.
The table below shows the reconciling items between the adjusted EBITDA of GBP30.0m (2015: GBP22.4m) and the reported EBITDA of GBP29.5m (2015: GBP13.9m).
Reconciliation of Adjusted EBITDA to Reported EBITDA
Six months ended 31 December ----- ----- 2016 2015 GBPm GBPm --------------------------------------------------------------- ----- ----- Adjusted EBITDA (after SBP) 30.0 22.4 --------------------------------------------------------------- ----- ----- Acquisition costs - (1.3) --------------------------------------------------------------- ----- ----- Restructuring costs - (3.0) --------------------------------------------------------------- ----- ----- Impairment of intangible fixed assets - (0.5) --------------------------------------------------------------- ----- ----- Adjustment for fair value of acquired stock sold in the period (0.1) (3.4) --------------------------------------------------------------- ----- ----- EBITDA of Joint Venture in South Africa (0.4) (0.3) --------------------------------------------------------------- ----- ----- Total adjustments (0.5) (8.5) --------------------------------------------------------------- ----- ----- Reported EBITDA 29.5 13.9 --------------------------------------------------------------- ----- -----
The adjustments to EBITDA comprise the release of fair value profit margin on acquired inventory of GBP0.1m (2015: GBP3.4m) and an adjustment relating to the presentation of the Joint Venture ('JV') earnings of GBP0.4m (2015: GBP0.3m).
The GBP0.4m relating to the JV reflects that the adjusted results include the Group's 50% share of the South Africa JV in each of the lines above profit after tax, whilst in reported results the after tax income from the JV is included as only one line below profit from operations. The adjustment cancels to zero at the Group profit after taxation and earnings per share lines.
The non-underlying costs last year included acquisition costs relating to Link, restructuring costs relating mainly to the integration of the Idis and Link acquisitions and the regulatory and compliance costs relating to the Vibativ product that has now been transferred back to Theravance Biopharma.
Reconciliation of Adjusted results* to Reported results
2016 (GBPm) 2015 (GBPm) Six months Adjusted JV accounting Adjusted Adjustments Reported Adjusted JV accounting Reported ended 31 results* results results results* and results December post adjustments JV accounting --------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- Revenue 134.6 (3.4) 131.2 - 131.2 157.1 (1.2) 155.9 Cost of sales (75.5) 2.4 (73.1) (0.1) (73.2) (113.0) (2.6) (115.6) --------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- Gross profit 59.1 (1.0) 58.1 (0.1) 58.0 44.1 (3.8) 40.3 Admin expenses (28.0) 0.6 (27.4) - (27.4) (20.6) (4.7) (25.3) --------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- EBITDA (before SBP) 31.1 (0.4) 30.7 (0.1) 30.6 23.5 (8.5) 15.0 Share based payments (1.1) - (1.1) - (1.1) (1.1) - (1.1) --------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- EBITDA (after SBP) 30.0 (0.4) 29.6 (0.1) 29.5 22.4 (8.5) 13.9 Amortisation - - - (9.6) (9.6) - (9.9) (9.9) Depreciation (0.4) - (0.4) - (0.4) (0.2) - (0.2)
--------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- Profit from operations 29.6 (0.4) 29.2 (9.7) 19.5 22.2 (18.4) 3.8 Finance cost (1.3) - (1.3) (14.3) (15.6) (1.8) - (1.8) Share of profit of JV - 0.3 0.3 - 0.3 - 0.2 0.2 --------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- Profit before tax 28.3 (0.1) 28.2 (24.0) 4.2 20.4 (18.2) 2.2 Taxation (6.4) 0.1 (6.3) 4.7 (1.6) (4.2) 3.6 (0.6) --------------- --------- ------------- -------------- ----------- -------- --------- ------------- -------- Profit after tax 21.9 - 21.9 (19.3) 2.6 16.2 (14.6) 1.6 Basic EPS (after SBP) (p) 19.0 - 19.0 (16.7) 2.3 14.5 (13.1) 1.4 Diluted EPS (p) 18.8 - 18.8 (16.6) 2.2 14.2 (12.8) 1.4 --------------- --------- ------------- -------------- ----------- -------- --------- ------------- --------
The table above reconciles adjusted results to reported results.
The adjustments to EBITDA are as set out in the earlier table above. The GBP14.3m (2015: nil) adjustment to the net finance charge is the increase in the estimate for the deferred consideration for the Link business and the non-cash interest charge unwind of the discount applied to the deferred consideration payable in respect of Link (these items are described in more detail in the balance sheet section).
Depreciation and Amortisation
Depreciation was GBP0.4m (2015: GBP0.2m) relating principally to fixtures, fittings and equipment. Amortisation was GBP9.6m (2015: GBP9.9m), of which GBP6.7m related to corporate acquisitions, GBP2.5m related to SP products, and GBP0.4m related to software. Amortisation relating to the Group ERP system will begin during the next financial year after the system becomes operational.
Finance cost
The adjusted net finance cost*, excluding the amounts relating to the increase in the estimate for deferred consideration for Link and non-cash interest charge unwind relating to the Link deferred consideration, was GBP1.3m (2015: GBP1.8m). The majority relates primarily to bank debt and the reduction is principally due to lower debt levels and lower interest rates applied as leverage decreases. The average interest charge on gross debt during the period was 2.0%.
The reported finance cost was GBP15.6m (2015: GBP1.8m) with the increase attributable to the increase in the estimate for the deferred consideration for Link.
Taxation
Taxation was GBP1.6m (2015: GBP0.6m) based primarily on the prevailing UK and US tax rates. This charge is calculated as GBP6.4m based on the full year effective tax rate ('ETR') applicable to the adjusted profit*, offset by a credit of GBP4.8m in respect of the adjusted items.
The adjusted effective tax rate increased to 23% (2015: 21%) due to the increase in overseas earnings in territories with a higher tax rate following the Link acquisition.
Earnings per share
Adjusted basic earnings per share*, calculated excluding amortisation and non-underlying costs, increased by 31% to 19.0p (2015: 14.5p). The increase reflects the Group's higher adjusted profit from operations.
Reported basic earnings per share was 2.3p (2015: 1.4p) due to the revision to the estimated deferred consideration on the Link acquisition being charged to the profit and loss account.
Dividend
The Board is committed to a sustainable and progressive dividend policy and expect interim and final dividend payments to be split approximately one-third to two-thirds respectively.
In view of the strong trading performance in the first half and confident outlook, the Board is increasing the interim dividend by 23% to 1.6p per share.
The interim dividend payment date will be 13 April 2017 payable to shareholders on the register on 24 March 2017.
Cash flow and net debt
Cash generated from operations was GBP7.7m (2015: GBP22.1 m). As expected, net working capital increased due to the timing of cash flows around period ends and the completion of a large contract with favourable working capital characteristics in the period. The completion of this contract caused a GBP9.2m working capital outflow and a further GBP4.4m is expected in H2 as the working capital on this contract fully unwinds.
Capital expenditure was GBP5.6m (2015: GBP1.2m), of which GBP3.6m related to the Group ERP system, GBP1.4m related to office and warehouse refurbishments and GBP0.6m related to SP products. As previously guided, capital expenditure has been higher than usual due to budgeted spend on the Group ERP system, which is currently being implemented.
The other main cash flows were tax paid of GBP1.2m, interest paid of GBP0.9m and dividends paid of GBP3.1m.
Overall net debt decreased GBP10.6m versus last year to GBP70.9m.
Balance sheet
Intangible assets decreased from GBP334.1m at 30 June 2016 to GBP329.0m due to amortisation of GBP9.6m, offset by investment in the new ERP system (GBP3.6m), spend on products (GBP0.7m) and movement on foreign exchange of overseas assets (GBP0.2m). Net working capital increased to GBP11.7m (2015: GBP(9.3)m) for the reasons described above.
Total deferred consideration is GBP27.8m (2015: GBP7.8m). GBP22.8m (2015: GBP7.8m) of this relates to the estimated contingent consideration on the Link acquisition. The estimated contingent consideration, subject to performance criteria of Link and payable in October 2017 in cash, has been discounted and is calculated based on expected results for the 12 months ending 30 June 2017. The increase is largely due to the depreciation in Sterling, which results in an increase in the estimate for the earnings of Link when the results for the performance period are translated into Sterling for the purposes of calculating the earn-out.
Any further depreciation in Sterling is likely to increase the amount of deferred consideration payable. The maximum amount that could be paid in deferred consideration for the Link acquisition is GBP55.5m.
The remaining GBP5.0m (2015: nil) of deferred consideration is in respect of further milestone payments on last year's product acquisitions.
Treasury management
The Group's operations are financed by retained earnings and bank borrowings, and on occasion, the issue of shares to finance acquisitions.
As at 31 December 2016, the Group had a total bank facility of GBP126.5m, consisting of a five year term repayment loan of GBP31.5m which matures in June 2020 and a Revolving Credit Facility ('RCF') of GBP95.0m which is available until June 2020 and is renewable on a monthly basis. Covenant terms apply to the bank facilities comprising Interest Cover and Adjusted Leverage covenants.
Borrowings are in Sterling and are managed by the Group's UK based Treasury function, which manages the Group's treasury risk in accordance with policies set by the Board.
The Group reduces its exposure to currency fluctuations on translation by typically managing currencies at Group level using bank accounts denominated in foreign currencies. Where there is sufficient visibility of currency requirements, forward contracts are used to hedge exposure to foreign currency fluctuations. The Group's treasury function does not engage in speculative transactions and does not operate as a profit centre.
The Group has adopted Hedge Accounting to mitigate currency risk associated with future and committed sales.
Principal risks facing the business
Clinigen operates an embedded risk management framework, which is monitored and reviewed by the Board. There are a number of potential risks and uncertainties that could have a material impact on the Group's financial performance and position. These include risks relating to competitive threat, the regulatory environment, political environment, counterfeit product penetrating the supply chain, reliance on technology, reputational risk and foreign exchange. These risks and the Group's mitigating actions remain as set out in the 2016 Annual Report (pages 32 and 33).
The Directors of Clinigen confirm that, to the best of their knowledge:
-- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
-- the interim management report includes a fair review of the information required by:
- DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
- DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
This half year report was approved by the Board of Directors and authorised for issue on 14 March 2017.
Condensed consolidated income statement
Six Six Six Six Six Six months months months months months months to 31 to 31 to 31 to 31 to 31 to 31 Dec Dec Dec Dec Dec Dec 2016 2016 2016 2015 2015 2015 underlying non-underlying total underlying non-underlying total (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (note restated restated 4) (note (In GBPm) Note 4) ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------ Revenue 3 131.2 - 131.2 155.9 - 155.9 Cost of Sales (73.1) (0.1) (73.2) (112.2) (3.4) (115.6) ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------ Gross profit 3 58.1 (0.1) 58.0 43.7 (3.4) 40.3 Administrative expenses (31.8) (6.7) (38.5) (24.4) (12.1) (36.5) ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------ Profit from operations 26.3 (6.8) 19.5 19.3 (15.5) 3.8 Finance cost 5 (1.3) (14.3) (15.6) (1.8) - (1.8) Share of profit of investment 0.3 - 0.3 0.2 - 0.2 ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------ Profit before tax 25.3 (21.1) 4.2 17.7 (15.5) 2.2 Tax 6 (3.2) 1.6 (1.6) (3.7) 3.1 (0.6) ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------ Profit attributable to owners of the parent Company 22.1 (19.5) 2.6 14.0 (12.4) 1.6 ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------ Earnings per share Basic 7 2.3p 1.4p Diluted 7 2.2p 1.4p ---------------------- ---- ------------ --------------- ------------ ------------ --------------- ------------
All amounts relate to continuing operations.
See note 4 for a reconciliation of adjusted and reported profit.
Condensed consolidated statement of comprehensive income
Six Six months months to 31 to 31 Dec Dec 2016 2015 total total (In GBPm) (unaudited) (unaudited) -------------------------------- ------------ ------------ Profit / loss for the period attributable to the owners of the parent 2.6 1.6 Other comprehensive income Items that may be reclassified to profit or loss Exchange gains arising in the period on translation of foreign operations 1.4 0.6 Effective portion of fair value of cash flow hedges (0.4) - -------------------------------- ------------ ------------ Total comprehensive income attributable to owners of the parent 3.6 2.2 --------------------------------- ------------ ------------
Condensed consolidated balance sheet
31 Dec 31 Dec 30 June 2016 2015 2016 restated (In GBPm) Note (unaudited) (unaudited) (unaudited) ------------------------------- ---- ------------ ------------ ------------ Non-current assets Property, plant and equipment 3.7 2.1 2.7 Intangible assets 329.0 337.9 334.1 Investment in joint venture 8.2 7.2 7.4 Deferred tax asset 3.4 2.0 3.5 ------------------------------- ---- ------------ ------------ ------------ 344.3 349.2 347.7 Current assets Inventories 17.2 16.5 15.6 Trade and other receivables 63.3 62.6 68.8 Corporation tax recoverable - 0.6 - Cash and cash equivalents 20.2 26.3 27.8 ------------------------------- ---- ------------ ------------ ------------ 100.7 106.0 112.2 ------------------------------- ---- ------------ ------------ ------------ Total assets 445.0 455.2 459.9 ------------------------------- ---- ------------ ------------ ------------ Non-current liabilities Deferred consideration 2.7 7.8 11.0 Loans and borrowings 9 22.5 30.0 25.9 Deferred tax liability 18.1 22.9 22.2 ------------------------------- ---- ------------ ------------ ------------ 43.3 60.7 59.1 Current liabilities Trade and other payables 62.7 88.4 88.6 Provisions - 1.7 0.8 Deferred consideration 25.1 - 2.2 Loans and borrowings 9 68.6 77.8 70.0 Corporation tax liability 2.9 - 1.4 Deferred tax liability 2.6 2.7 - Financial instrument liability 1.4 - 1.3 ------------------------------- ---- ------------ ------------ ------------ 163.3 170.6 164.3 ------------------------------- ---- ------------ ------------ ------------ Total liabilities 206.6 231.3 223.4 ------------------------------- ---- ------------ ------------ ------------ Net assets 238.4 223.9 236.5 ------------------------------- ---- ------------ ------------ ------------ Equity Share capital 10 0.1 0.1 0.1 Share premium account 161.1 160.6 160.7 Merger reserve 5.4 5.4 5.4 Hedge reserve (0.4) - - Foreign exchange reserve 1.8 0.3 0.4 Retained earnings 70.4 57.5 69.9 ------------------------------- ---- ------------ ------------ ------------ Total shareholders' equity 238.4 223.9 236.5 ------------------------------- ---- ------------ ------------ ------------
Condensed consolidated cash flow statement
Six months Six months Year to 31 Dec to 31 Dec to 30 June 2016 2015 2016 (In GBPm) (unaudited) (unaudited) (audited) --------------------------------- ------------ ------------ ----------- Profit for the period before tax 4.2 2.2 15.9 Adjustments for: Depreciation of property, plant and equipment 0.4 0.2 0.8 Amortisation of intangible fixed assets 9.6 9.9 20.0 Loss on disposal of non-current assets - - 0.1 Share of profit from joint venture (0.3) (0.2) (0.4) Provision for restructuring costs - 0.4 0.8 Movement in fair value of derivatives (0.3) - 1.3 Release of fair value on
acquired inventory 0.1 3.4 4.6 Currency loss on deferred - - - consideration Finance cost 15.6 1.8 4.7 Share based payment expense 1.1 0.7 1.8 --------------------------------- ------------ ------------ ----------- Operating cash flow before movement in working capital 30.4 18.4 49.6 Changes in working capital Decrease in trade and other receivables 6.6 11.6 8.1 Increase in inventories (1.6) (0.9) (2.1) Decrease in trade and other payables (27.7) (7.0) (6.2) --------------------------------- ------------ ------------ ----------- Cash generated from operations 7.7 22.1 49.4 Income taxes paid (1.2) (2.0) (3.7) Interest paid (0.9) (1.8) (3.6) --------------------------------- ------------ ------------ ----------- Net cash flows from operating activities 5.6 18.3 42.1 Cash flows from investing activities Purchases of property, plant and equipment (1.4) - (1.3) Purchase of intangible fixed assets (4.2) (1.2) (6.7) Purchase of subsidiary net of cash acquired - (20.4) (22.4) --------------------------------- ------------ ------------ ----------- Net cash used in investing activities (5.6) (21.6) (30.4) Cash flows from financing activities Proceeds from issue of shares 0.4 0.2 0.3 Proceeds from loan - 16.1 27.6 Loan repayments (5.0) (12.5) (36.1) Derivative margin call (1.1) - - Dividends paid (3.1) (2.6) (4.1) --------------------------------- ------------ ------------ ----------- Net cash generated (used in) / from financing activities (8.8) 1.2 (12.3) Net decrease in cash and cash equivalents (8.8) (2.1) (0.6) Cash and cash equivalents at beginning of period 27.8 27.8 27.8 Exchange gains 1.2 0.6 0.6 --------------------------------- ------------ ------------ ----------- Cash and cash equivalents at end of period 20.2 26.3 27.8 --------------------------------- ------------ ------------ -----------
Condensed consolidated statement of changes in equity
Share Share Merger Own Foreign Retained Total capital premium reserve shares exchange earnings equity (In GBPm) account reserve ------------------------ -------- -------- -------- ------- --------- --------- ------- At 1 July 2015 0.1 141.0 5.4 - (0.3) 58.4 204.6 Profit for the period - - - - - 1.6 1.6 Other comprehensive income - - - - 0.6 - 0.6 ------------------------ -------- -------- -------- ------- --------- --------- ------- Total comprehensive income - - - - 0.6 1.6 2.2 Share based payment scheme - - - - - 0.7 0.7 Deferred taxation on share based payment scheme - - - - - (1.6) (1.6) Tax credit in respect of tax losses arising on exercise of share options - - - - - 1.0 1.0 Issue of new shares - 19.6 - - - - 19.6 Dividend paid - - - - - (2.6) (2.6) ------------------------ -------- -------- -------- ------- --------- --------- ------- At 31 December 2015 0.1 160.6 5.4 - 0.3 57.5 223.9 ------------------------ -------- -------- -------- ------- --------- --------- ------- Share Share Merger Hedge Foreign Retained Total capital premium reserve reserve exchange earnings equity (In GBPm) account reserve ------------------------ -------- -------- -------- -------- --------- --------- ------- At 1 July 2016 0.1 160.7 5.4 - 0.4 69.9 236.5 Loss for the period - - - - - 2.6 2.6 Other comprehensive income - - - - 1.4 - 1.4 Effective portion of fair value of cash flow hedges - - - (0.4) - - (0.4) ------------------------ -------- -------- -------- -------- --------- --------- ------- Total comprehensive income - - - (0.4) 1.4 2.6 3.6 Share based payment scheme - - - - - 0.8 0.8 Deferred taxation on share based payment scheme - - - - - (0.2) (0.2) Tax credit in respect of tax losses arising on exercise of share options - - - - - 0.4 0.4 Issue of new shares - 0.4 - - - - 0.4 Dividend paid - - - - - (3.1) (3.1) ------------------------ -------- -------- -------- -------- --------- --------- ------- At 31 December 2016 0.1 161.1 5.4 (0.4) 1.8 70.4 238.4 ------------------------ -------- -------- -------- -------- --------- --------- -------
Notes forming part of the condensed consolidated financial statements
1 Basis of preparation
The Group has elected to prepare the interim consolidated financial statements in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. The interim financial information does not comprise statutory accounts within the meaning of S434 of the Companies Act 2006. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2016.
The comparative figures for the financial year ended 30 June 2016 are not the Group's statutory accounts for that financial year. Those accounts have been reported on by the Group's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention to by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 of the Companies Act 2006.
Following the review of the previously disclosed provisional fair values of the acquired assets and liabilities of the Link Group, the Condensed Consolidated Balance Sheet at 30 June 2016 has been restated. The restatement impacts inventories and intangible fixed assets (see note 10 for an explanation of the adjustments).
Having reassessed the principal risks, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing the condensed consolidated financial statements.
2 Significant accounting policies
The preparation of interim consolidated financial statements in compliance with IAS 34 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed in the notes to the Group's statutory consolidated financial statements for the year ended 30 June 2016 in note 2 on page 56 and in the notes to these interim condensed consolidated financial statements.
Clinigen Group plc implemented hedge accounting during the period, hence the 'Derivative financial instruments and hedging activities' accounting policy has been amended to the following:
The Group uses derivative financial instruments to mitigate its exposure to foreign currency exchange risk on cash flow transactions. Derivative financial instruments are recognised initially at their fair value and re-measured at fair value at each period end. The designation is re-evaluated at each reporting date.
Changes in the fair value of derivative financial instruments designated as cash flow hedges are recognised in other comprehensive income to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised immediately in the income statement. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in other comprehensive income remains there until the forecast transaction occurs. When the hedged item is a non-financial asset, the amount recognised in other comprehensive income is transferred to the carrying amount of the asset when it is recognised. In other cases, the amount recognised in other comprehensive income is transferred to the income statement in the same period that the hedged item affects profit or loss.
The gain or loss on re-measurement to fair value of derivatives that have not been designated, is recognised immediately in the consolidated statement of comprehensive income. Foreign forward exchange derivative gains and losses are recognised net.
All other accounting policies and methods of computation have been applied in its interim consolidated financial statements as in its 2016 annual financial statements. None of the new standards, interpretations and amendments, effective for the first time from 1 July 2016, have had a material effect on the financial statements.
3 Segment information
The Group's reportable segments are strategic operating business units that provide different products and service offerings into different market environments. They are managed separately because each operational business focuses on a different product or service offering to a different customer group.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors including the CEO and the CFO.
Segmental analysis
Six months Six months Year to 31 Dec to 31 Dec to 30 June 2016 2015 2016 (In GBPm) (unaudited) (unaudited) (unaudited) --------------------------------- ------------------------ ------------ ------------- Revenue arises from: Clinical Trials Services 39.0 52.6 137.9 Managed Access 28.4 54.7 100.8 Global Access 19.4 25.2 39.6 Specialty Pharmaceuticals 20.2 17.0 37.1 Link Healthcare 24.2 6.4 24.5 --------------------------------- ------------------------ ------------ ------------- 131.2 155.9 339.9 --------------------------------- ------------------------ ------------ ------------- Gross profit arises from: Clinical Trials Services 10.0 8.0 19.7 Managed Access 13.9 12.2 26.5 Global Access 7.2 6.9 13.8 Specialty Pharmaceuticals 17.0 14.3 31.9 Link Healthcare 10.0 2.3 8.8 --------------------------------- ------------------------ ------------ ------------- 58.1 43.7 100.7 --------------------------------- ------------------------ ------------ ------------- Adjustment for fair value of acquired stock sold in period (0.1) (3.4) (4.6) --------------------------------- ------------------------ ------------ ------------- Gross profit 58.0 40.3 96.1 --------------------------------- ------------------------ ------------ ------------- Administrative expenses relating to underlying operations (31.8) (23.4) (51.1) Non-underlying administrative expenses (6.7) (13.1) (24.8) Finance cost (15.6) (1.8) (4.7) Share of joint venture 0.3 0.2 0.4 --------------------------------- ------------------------ ------------ ------------- Profit before tax 4.2 2.2 15.9 --------------------------------- ------------------------ ------------ -------------
All revenues arise from external customers.
See note 4 for explanation of the non-underlying items.
4 Non-underlying items
The reconciling items between the adjusted profit used for calculating basic and diluted adjusted EPS and the reported profit are:
Six months Six months to 31 Dec to 31 Dec 2016 2015 (In GBPm) (unaudited) (unaudited) ------------------------------------- ------------ ------------ Adjusted profit to calculate basic and diluted Adjusted EPS 21.9 16.2 Amortisation of intangible fixed assets included in underlying administrative expenses (2.9) (2.7) Credit in respect of tax on amortisation costs 0.6 0.5 Adjustment to full year tax rate 2.5 - ------------------------------------- ------------ ------------ Underlying profit after tax in Income Statement 22.1 14.0 Non-underlying items (see below) (19.5) (12.4) ------------------------------------- ------------ ------------ Reported profit 2.6 1.6 ------------------------------------- ------------ ------------
The non-underlying items have been split out in order to give the reader of the financial statements a better understanding of the operations of the Group. These items relate to share based payment items, amortisation and non-underlying items which are one off in nature.
Six months Six months to 31 Dec to 31 Dec 2016 2015 (In GBPm) (unaudited) (unaudited) -------------------------------------------- ------------ ------------ a) Adjustment for fair value of acquired stock sold in the period 0.1 3.4 b) Acquisition costs - 1.3 c) Restructuring costs - 3.1 d) Impairment of intangible fixed assets - 0.5 e) Amortisation of intangible fixed assets acquired through business combinations 6.7 7.2 f) Finance cost: increase in contingent consideration in respect of Link 13.5 - g) Finance cost: unwind of discount on contingent consideration in respect of Link 0.8 - h) Credit in respect of tax on non-underlying costs (1.6) (3.1) 19.5 12.4 -------------------------------------------- ------------ ------------
a) Under IFRS 3, Business Combinations, inventory acquired in a business combination is valued at fair value on acquisition, which includes the profit margin in the stock's carrying value. The GBP0.1m above represents the profit margin on the stock sold in the period which was acquired with both the Idis and Link businesses.
b) The acquisition costs incurred in the period amounted to nil.
c) The restructuring costs incurred in the period amounted to nil.
d) The impairment of intangible fixed assets incurred in the period amounted to nil.
e) The amortisation of intangible assets acquired as part of the business combination with Idis and Link, (namely Brand, trade names, customer relationships and contracts) are reclassified to non-underlying items due to their significance and to provide the reader with a consistent view of the underlying costs of the operating Group.
f) Changes in the estimate of the contingent consideration payable in relation to an acquisition are charged to the profit and loss account. The contingent consideration is payable based on the earnings of the Link group for the year ending 30 June 2017. The increase in respect of Link is shown as finance costs as the primary reason for the increase is the depreciation of Sterling against the local functional currencies, since October 2015, when the contingent consideration was originally calculated.
g) This adjustment is the non-cash unwind of the discount applied to the contingent consideration payable in relation to the acquisition of Link.
h) The tax credit in respect of non-underlying items reflects the tax benefit on the costs incurred during the year.
5 Finance cost Six months Six months to 31 Dec to 31 Dec 2016 2015 (In GBPm) (unaudited) (unaudited) ------------------------------------- ------------ ------------ Interest, borrowing and facility costs 1.1 1.8 Unwind of discount on deferred consideration re: Totect and Foscavir 0.2 - ------------------------------------- ------------ ------------ Underlying finance cost 1.3 1.8 Unwind of discount on contingent consideration re: Link 0.8 - Increase in contingent consideration re: Link 13.5 - ------------------------------------- ------------ ------------ Total finance cost 15.6 1.8 6 Taxation
The Group has recognised a tax charge in the income statement based on the current projected full year tax rate for each territory. The reported effective tax rate of 37.1% is higher than the standard rate of UK corporation tax due to the additional contingent consideration payable in respect of the acquisition of Link which is not allowable for corporation tax purposes, and profits generated in higher tax jurisdictions. The deferred tax has been recognised at the applicable rate depending when the underlying position is likely to unwind.
7 Earnings per share Six months Six months to 31 Dec to 31 Dec 2016 2015 (In GBPm) (unaudited) (unaudited) ------------------------------------ ------------ ------------ Adjusted profit used in calculating basic and diluted EPS (note 4) 21.9 16.2 ------------------------------------ ------------ ------------ Reported profit used in calculating basic and diluted EPS 2.6 1.6 ------------------------------------ ------------ ------------ Number of shares (million) Weighted average number of shares 114.9 111.6 Dilution effect of share options 1.4 2.3 ------------------------------------ ------------ ------------ Weighted average number of shares used for diluted EPS 116.3 113.9 ------------------------------------ ------------ ------------ Adjusted EPS Basic 19.0p 14.5p Diluted 18.8p 14.2p Reported EPS Basic 2.3p 1.4p Diluted 2.2p 1.4p
EPS is calculated based on the share capital of Clinigen Group plc and the earnings of the combined Group.
8 Dividends
A final dividend in relation to the year ended 30 June 2016 of 2.7p (2015: 2.3p) per ordinary share was paid on 25 November 2016. This amounted to GBP3.1m (2015: GBP2.6m).
An interim dividend of 1.6p (2015: 1.3p) per ordinary share is proposed. This amounts to GBP1.8m (2015: GBP1.5m) and will be paid on 13 April 2017 to all shareholders on the register as at 24 March 2017.
9 Analysis of Net (Debt) / Cash 31 Dec 31 Dec 30 June 2016 2015 2016 (In GBPm) (unaudited) (unaudited) (unaudited) -------------------------- ------------ ------------ ------------ Bank loans (91.1) (107.8) (95.9) Cash and cash equivalents 20.2 26.3 27.8 -------------------------- ------------ ------------ ------------ (70.9) (81.5) (68.1) -------------------------- ------------ ------------ ------------
As at 31 December 2016, the Group had a total bank facility of GBP126.5m, consisting of a five year term repayment loan of GBP31.5m which matures in June 2020, and a RCF of GBP95.0m repayable within one month.
10 Share capital Ordinary shares of 0.1p each Authorised, issued and fully Number paid (m) At 31 December 2015 and 1 January 2016 114.6 Issue of new shares - ----------------------------- ------ ------ ------- At 30 June 2016 and at 1 July 2016 114.6 Issue of new shares 0.5 ----------------------------- ------ ------ ------- At 31 December 2016 115.1 ----------------------------- ------ ------ ------- 31 Dec 31 Dec 30 June (In GBPm) 2016 2015 2016 ----------------------------- ------ ------ ------- Ordinary shares of 0.1p each 0.1 0.1 0.1 ----------------------------- ------ ------ ------- 11 Business Combinations
Following the acquisition of Link in October 2015 and the disclosure of the provisional fair values in the annual report for the financial year ended 30 June 2016, the directors have reviewed the fair value of the assets and liabilities acquired. This review resulted in a reduction in the fair value of inventory of GBP0.4m.
The revised fair value of assets acquired and liabilities assumed on the Link acquisition were as follows:
(In GBPm) -------------------------------- ----- Intangible assets 17.1 Investment in joint venture 7.0 Property, plant and equipment 0.6 Inventories 6.9 Trade and other receivables 6.6 Cash 1.9 Trade and other payables (6.3) Deferred tax (5.4) ---------------------------------- ----- Net assets acquired 28.4 Goodwill arising on acquisition 23.1 ---------------------------------- ----- Total consideration 51.5 ---------------------------------- -----
The consideration of GBP51.5m used to calculate goodwill arising on acquisition, is made up of initial payments of GBP43.7m and the discounted, contingent consideration of GBP7.8m initially calculated based on expected earnings over the two financial years ended 30 June 2017.
The contingent consideration is re-measured each period end depending on the current forecasts for the earn-out period and the change in contingent consideration is charged or credited to the income statement. At
31 December 2016, the re-measurement of the contingent consideration resulted in a charge to the income statement of GBP13.5m. This increase is shown in finance costs as the primary reason for the increase is the depreciation of Sterling against the local functional currencies, since October 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVAVAISLID
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March 15, 2017 03:01 ET (07:01 GMT)
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