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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Consort Medical Plc | LSE:CSRT | London | Ordinary Share | GB0000946276 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,010.00 | 1,005.00 | 1,010.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCSRT
RNS Number : 3623Y
Consort Medical PLC
05 December 2017
Consort Medical plc
5 December 2017
Interim results
Consort Medical delivers good growth in the first half
Outlook remains in line with its expectations
Consort Medical plc (LSE: CSRT) ("Consort", "Consort Medical" or the "Group"), a leading one-stop developer and manufacturer of drugs and premium drug delivery devices, today announces its interim results for the six months ended 31 October 2017.
Financial Highlights
Hot Features
Premium
H1 FY2018 H1 FY2017 <DELTA> <DELTA>
Reported Reported Reported CER(1)
GBPm 6 months ended 31 Oct 2017 31 Oct 2016
------------------------- ------------ ------------ ---------- --------
Revenue 153.7 144.9 6.1% 4.2%
EBIT(2) 20.3 18.9 7.3% 6.3%
PBT(2) 17.9 16.6 7.7% 6.4%
Adjusted Basic EPS(2) 29.3p 28.6p 2.6% 1.2%
Statutory Measures
Profit before tax (PBT) 7.5 10.1 (25.9)%
Basic EPS 14.2p 20.1p (29.4)%
(1) Underlying/CER - at constant exchange rates; H1 FY2017 actuals retranslated at average H1 FY2018 exchange rates. (2) Before special items of GBP10.4m (H1 FY2017: GBP6.5m) that includes amortisation of acquired intangible assets, reorganisation and impairment costs.
-- Consort has delivered a 6.1% increase in sales and 7.3% EBIT growth in the first half -- Bespak grew underlying(1) revenue by 2.9% and EBIT(1) by 2.1%
-- Aesica grew underlying(1) revenue by 5.0% and EBIT(1) by 14.0% with a 60bps margin improvement from this time last year
-- Adjusted basic EPS grew 2.6% to 29.3p -- Generated good free cash-flow to reinvest in the Group for further growth
-- Net debt at GBP97.1 million (30 April 2017: GBP92.6m) with good working capital management. Net debt to EBITDA at 1.8x
-- Interim Dividend increased 5.0% to 7.44p
Operational Highlights
-- Good progress on the Syrina(R) / Vapoursoft(R) auto-injector development contract with our leading global biopharmaceutical customer
-- Continued good performance across our broad range of leading advance drug delivery devices with our established customer relationships
-- On track with Mylan in supporting their generic Advair programme
-- Further awards of API, finished dose and packaging contracts in Aesica supplementing our established long-term relationships with existing customers
-- Secured a new customer on the semi-continuous processing line and technology installed in our Queenborough site
Jon Glenn, Chief Executive Officer of Consort Medical, commented:
"Consort has continued to deliver underlying(1) revenue and profit growth in both divisions. Bespak has delivered another solid performance and made good progress in developing our devices business including our Syrina(R) / VapourSoft(R) auto-injectors that present exciting growth opportunities. Aesica has been awarded new API, finished dose and packaging contracts and secured a second contract on the semi-continuous processing line.
We remain focussed on the organic development of Consort while considering acquisition opportunities that allow access to new geographic markets and complementary technologies. The Board remains confident of Consort's future prospects supported by a robust financial position and a strong development pipeline."
Enquiries:
Consort Medical Tel: +44 (0) 1442
867920
Jonathan Glenn - Chief Executive
Officer
Paul Hayes - Chief Financial
Officer
FTI Consulting Tel: +44 (0) 20
3727 1000
Ben Atwell / Simon Conway
Notes:
1. Foreign Exchange Rates a. Period end exchange rates 31 Oct 2017: GBP1=EUR1.14; GBP1=$1.32 b. Average exchange rate 1 May 2017 to 31 Oct 2017: GBP1=EUR1.13; GBP1=$1.30 c. Period end exchange rates 31 Oct 2016: GBP1=EUR1.11; GBP1=$1.22 d. Average exchange rate 1 May 2016 to 31 Oct 2016: GBP1=EUR1.20; GBP1=$1.34 e. Period end exchange rates 30 April 2017: GBP1=EUR1.19; GBP1=$1.29 f. Average exchange rates 1 May 2016 to 30 April 2017: GBP1=EUR1.18: GBP1=$1.29
Consort Medical plc is a leading one-stop developer and manufacturer of drugs and premium drug delivery devices. We partner with pharmaceutical businesses in providing innovative life improving treatments to patients across the world through two integrated activities:
The design, development and manufacture of high performance medical devices for inhaled, injectable, nasal and ocular drug delivery, as well as point of care diagnostics products.
The development, formulation and manufacture of active pharmaceutical ingredients (APIs) and finished dose drugs to the highest quality standards.
We employ over 2,000 people globally and are committed to investing in patient, clinician and customer driven innovation to create new treatments.
Consort Medical is a public company quoted on the premium list of the London Stock Exchange (LSE: CSRT) and is organised in two divisions: Bespak and Aesica. www.consortmedical.com.
Forward looking statements
This document may contain certain forward-looking statements with respect to Consort Medical's financial condition, performance, position, strategy, results and plans based on management's current expectations or beliefs as well as assumptions about future events. These forward-looking statements are not guarantees of future performance. Undue reliance should not be placed on forward-looking statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Consort Medical's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. Consort Medical undertakes no obligation to update any of the forward-looking statements contained in this document or any other forward-looking statements it may make. Past performance is not an indicator of future results and the results of Consort Medical in this document may not be indicative of, and are not an estimate, forecast or projection of, Consort Medical's future results.
Alternative Performance Measures
In addition to statutory measures, a number of alternative performance measures are included in this announcement to provide a clear understanding of the Group's performance. These measures assist investors in gaining a balanced view of the Company's performance and in the comparison of performance across the industry. The alternative performance measures used include EBIT (or operating profit), EBITDA, PBT and EPS performance adjusted to eliminate special items that are costs relating to acquisitions or significant items not linked to the underlying performance of the business. Constant exchange rate measures eliminate the impact of currency movements by comparing the current measure against the comparative restated at this period's average exchange rate. Where we provide adjusted performance measures, they are compared to the equivalent measures in the prior period.
Consort Medical plc
Group Interim Results Review
Financial Performance
Consort delivered underlying(1) growth in both businesses and a continued improvement in Group margins in the first half of the financial year.
Revenue increased by 6.1% to GBP153.7m (H1 FY2017: GBP144.9m) with Bespak delivering growth of 2.9% to GBP60.6m (H1 FY2017: GBP58.9m), and Aesica growing 8.2% to GBP93.1m (H1 FY2017: GBP86.0m). Aesica grew by 5.0% at constant exchange rates with the weakness of sterling against the Euro delivering a translational increase of GBP2.8m on the prior period performance.
EBIT before special items increased by 7.3% to GBP20.3m (H1 FY2017: GBP18.9m). This included 2.1% growth from Bespak to GBP12.5m (H1 FY2017: GBP12.2m). Bespak's EBIT margin was maintained at a sector leading 20.5% (H1 FY2017: 20.7%). Aesica EBIT increased by 16.8% to GBP7.8m (H1 FY2017: GBP6.7m) with an increase of 14.0% at constant exchange rates. The Aesica EBIT margin grew by 60bps compared to the same period last year to 8.4% reflecting continuing improvements to operating performance.
Special items before taxation amounted to GBP10.4m in the period (H1 FY2017: GBP6.5m), comprising GBP6.1m amortisation of acquired intangibles (H1 FY2017: GBP6.5m); a restructuring charge of GBP1.4m and a one-off non-cash impairment of GBP2.9m for specific fixed assets. The restructuring charge includes streamlining certain activities within the Aesica business to strengthen the business for the future and delivers an attractive return. These restructuring plans are anticipated to incur a further one-off cash cost of approximately GBP3.0m once completed. The GBP2.9m non-cash impairment charge relates to specific equipment relating to a non-core activity.
Finance costs were broadly unchanged at GBP2.4m (H1 FY2017: GBP2.3m), with Earnings before tax and special items increasing by 7.7% to GBP17.9m (H1 FY2017: GBP16.6m). This is an increase of 6.4% at constant exchange rates. Adjusted basic EPS increased by 2.6% to 29.3p per share (H1 FY2017: 28.6p), an increase of 1.2% at constant exchange rates. Basic EPS decreased by 29.4% to 14.2p per share (H1 FY2017: 20.1p).
Cash generated from operations increased by GBP7.6m to GBP17.7m (H1 FY2017: GBP10.1m). EBITDA before special items grew GBP1.8m (7.5%) to GBP27.0m (H1 FY2017: GBP25.2m). Bespak EBITDA grew 2.7% to GBP15.6m, with Aesica's EBITDA growing by GBP1.5m to GBP11.5m. There has been a lower increase in working capital during the period than normal seasonal trends with an GBP8.6m increase in the first half (H1 FY2017: GBP14.8m increase). Capital expenditure increased GBP4.1m to GBP10.3m (H1 FY2017: GBP6.2m).
The Group balance sheet closed with a net debt position of GBP97.1m (FY2017: GBP92.6m), representing gearing of 1.8x Net Debt: EBITDA (H1 FY2017: 1.9x). Interest cover was 18.8x (H1 FY2017: 15.8x). The Group is in a strong financial position, with total committed facilities of GBP169.0m, of which GBP125.7m was drawn at 31 October 2017.
The Board is declaring a 5.0% increase in the interim dividend per share to 7.44p (H1 FY2017: 7.09p). Payment will be on 16 February 2018 to holders on the register on the record date of 19 January 2018. The Company has a Dividend Reinvestment Plan that allows shareholders to reinvest dividends to purchase additional shares in the Company. For shareholders to apply the proceeds of this and future dividends to the plan, application forms must be received by the Company's Registrars by no later than Friday 26 January 2018.
(1) Underlying - at constant exchange rates; H1 FY2017 actuals retranslated at average H1 FY2018 exchange rates.
Delivering the Group's strategy
Consort Medical is successfully executing its well-established strategy, which has four key elements:
1. Driving sustainable organic revenue growth
Consort is driving sales growth through leveraging its strong relationships with existing customers, developing opportunities with new customers and broadening its product offering.
We have deep, long-term contractual relationships with many leading pharmaceutical companies in both Bespak and Aesica, supplying customers with high quality products from our highly regulated facilities. There is a broad range of existing production programmes where we work closely with customers to support their growth strategies. We supplement this with development opportunities by providing innovative solutions utilising our market-leading expertise.
We provide a summary of the more significant Bespak opportunities in our development pipeline where we are working with certain customers on specific devices. In Aesica, there is also a significant amount of activity on API manufacturing and finished dose development opportunities although we do not disclose this commercially sensitive information.
2. Delivering margin improvement
Consort has a track-record of improving its underlying(1) Group margins with the Aesica margin increasing from 5.2% at acquisition to 8.4% during the period. Our strategy is to continue to deliver further margin improvement through organic growth and a continued process of improving our operational efficiency.
Whilst delivering margin improvement, we will continue to invest in our strong product innovation and development capabilities, both important elements of our growth strategy.
3. Innovating and developing new devices and formulation technologies
Alongside our own product innovations, we partner with pharmaceutical businesses in providing innovative life improving treatments and are committed to investing in patient, clinician and customer driven innovation to create new treatments.
Since 2010, Consort has consistently invested in innovation and expanded from a predominantly respiratory products business to leading positions in a number of growth markets. We have well established development programmes in both divisions including new devices, APIs and finished dose formulations. We are differentiated by our one-stop capability of being able to develop and manufacture both a drug and its delivery device within a single group.
The Group has continued to broaden its capabilities including growing its medical device business by adding highly innovative proprietary injectable delivery technologies to its well established respiratory franchise.
Our injectables activities include an innovative gas powered auto-injector technology designed to support the safe operation of single-use syringes capable of injecting higher viscosity liquids. There is a growing demand for products serving this technically challenging area particularly with the growth of large molecule biological drugs which are often very viscous. We are developing specific products using our proprietary technology including a significant programme with a global biopharmaceutical customer. The Group believes that its auto-injector business has the potential to be at least the size of our respiratory franchise in the medium to long term.
4. Making selective acquisitions and investments
Consort generates strong free cash flow that supports investment in organic growth and has allowed us to grow the dividend. The strategy is to supplement this with appropriate strategic investments.
Our non-organic growth strategy is to make selective acquisitions or investments in new geographical markets and complementary technologies that have the potential to broaden our geographic footprint and customer base. We will continue to review appropriate opportunities that present attractive long-term shareholder value.
Bespak Business Review
Operations
H1 FY2018 Underlying(1) <DELTA>% Currency <DELTA>% H1 FY2017
<DELTA> <DELTA>
------------- ---------- -------------- --------- --------- --------- ----------
Revenue GBP60.6m GBP1.7m 2.9% - - GBP58.9m
------------- ---------- -------------- --------- --------- --------- ----------
EBITDA(2) GBP15.6m GBP0.4m 2.7% - - GBP15.2m
------------- ---------- -------------- --------- --------- --------- ----------
EBITDA
margin
%(2) 25.7% 25.7%
------------- ---------- -------------- --------- --------- --------- ----------
EBIT(2) GBP12.5m GBP0.3m 2.1% - - GBP12.2m
------------- ---------- -------------- --------- --------- --------- ----------
EBIT margin
%(2) 20.5% 20.7%
------------- ---------- -------------- --------- --------- --------- ----------
(1) Underlying/CER - at constant exchange rates; H1 FY2017 actuals retranslated at average H1 FY2018 exchange rates. (2) Before special items of GBP10.4m (H1 FY2017: GBP6.5m) that includes amortisation of acquired intangible assets, reorganisation and impairment costs.
Bespak has built a well-established and diverse core business of designing, developing and manufacturing high performance medical devices. Bespak now has a strong pipeline of innovative products including: respiratory, injector, nasal and ocular drug delivery, as well as point of care diagnostics.
Once again, the business has performed well in the first half with increased demand for its broad range of leading advanced drug delivery devices. This growth was with its established customer relationships while continuing to invest in and make good progress on development programmes.
Revenue grew 2.9% to GBP60.6m. The Non-respiratory sales were 15.8% of Bespak's turnover. Across the business service revenue continues to perform well, reflecting the strength and depth of the Development and Innovation pipelines.
The good revenue performance delivered a 2.1% increase in EBIT to GBP12.5m. The EBIT margin remained strong and was broadly similar to H1 FY2017 with a 20bps decrease to 20.5%.
Product Development
In line with our strategy, we have built a broad product development pipeline of underlying growth opportunities to supplement our strong core business. Successful conversion of these opportunities is providing progressive revenue and profit growth, in both contract manufacturing and products with our own proprietary IP. This is across a range of therapeutic areas, including commercial drug handling.
Our published development portfolio provides an update on the key development projects in the business. For inclusion in the published portfolio, projects must have a reasonable expectation of success, though timescales are difficult to predict, and are expected to produce peak annual sales of at least GBP3m per annum.
Overall we have continued to make good progress with the development pipeline which now reflects the progression of two successful development programmes that are complete and now form part of our underlying manufacturing activities. These are the UCB auto-injector and Astra-Zeneca MDI valve / actuator.
In terms of ongoing development programmes, we are making good progress and remain on schedule with the Syrina(R) / Vapoursoft(R) auto-injector development contract with our leading global biopharmaceutical customer. This programme alongside our other auto-injector activities remains an important element of our sales growth strategy.
We also continue to work closely with Mylan in supporting their generic Advair programme. Mylan have confirmed on their recent earnings call that no further clinical or device related studies are required by the FDA and Mylan have resubmitted their ANDA filing with a target action date of mid-June 2018.
We are now supplying our proprietary Easifill primeless valve to a new global for a regulatory approved product due to be launched shortly. This is the same valve as the Easifill primeless valve (VAL310) and replaces the initial customer who has decided not to launch a product using this technology.
The development of the Patchpump(R) infusion system for Treprostinel (INJ600) is no longer on our development pipeline following SteadyMed Therapeutics Inc's decision to award commercial manufacture to a US manufacturer.
The status of the major programmes in our development pipeline is listed below.
Project Description Customer Status
-------- ------------------------------------- ----------------- --------------------------------
VAL310* Easifill primeless valve US Pharma Programme terminated, however,
the Easifill primeless
valve has been approved
and is expected to be launched
shortly as part of another
programme with a major
global customer
VAL020 MDI valve Global Pharma Customer progressing towards
approval and launch
POC010 POC Test Cartridge Atlas Genetics Combined Chlamydia / Gonorrhoea
test cartridge development
progressing
NAS020 Nasal device Global Generic Formulation change; brief
under review
DEV610 DPI Mylan Awaiting FDA approval
NAS030 Nasal device Pharma Co. Early stage programme
INJ600* PatchPump(R) for Treprostinel SteadyMed Commercial manufacture
Therapeutics awarded to a US manufacturer
Inc.
INJ650 ASI(R) Auto-injector Global Generic Early stage programme
INJ700 Lila(R) Mix Injector Pharma Co. Development programme on
track
IDC300 Oral IDC Pharma Co. Good progress; launch expected
mid 2018
VAL050 MDI valve / actuator Aeropharm Development contract ongoing
OCU050 Ocular device/ formulation / filling Oxular Early stage programme
SYR075 Syrina(R) / Vapoursoft(R) Global Biopharma Development proceeding
according to plan
*As these products have been terminated, going forwards, they will not be included in the development pipeline
DPI = Dry Powder Inhaler, MDI = Metered Dose Inhaler, POC = Point of Care, IDC = Integrated Dose Counter
Innovation
The innovation team continues to work on a number of opportunities in its dedicated facilities in Cambridge. We have maintained our investment and remain committed to investing in developing our new technology platforms on a range of opportunities.
This innovation team has been exceedingly busy particularly with the growing interest in the injectables franchise with biotech and pharmaceutical companies that complement our current customer portfolio. This demonstrates the strength and success of our innovation drive and strategy to broaden and diversify our product and customer base.
Syrina(R) , Lila(R) & Lapas(R) Update
Vapoursoft(R) powered Syrina(R) auto-injectors, Vapoursoft(R) powered Lapas(R) auto-injectors, and our Lila(R) Mix and Duo technologies have continued to generate widespread interest as innovative and novel drug delivery systems and devices, with several biotech and pharmaceutical companies initiating feasibility and development programmes for their injectable drug portfolios.
The product range includes the Syrina(R) AR 2.25 auto--injector that is suitable for delivering volumes of up to 2.0ml using a standard 2.25ml pre-filled syringe. The Syrina(R) AR 2.25 provides patients with a fully-automatic two-step, compact device for the self-administration of viscous drug formulations. It is able to deliver 2.0 ml of viscous drug solutions smoothly and safely in less than 15 seconds. Designed with a hidden needle, Syrina(R) AR 2.25 offers automatic needle insertion and retraction, as well as drug delivery with a single push-on-skin operation. Syrina(R) AR 2.25 has been tailored specifically for higher viscosities while still enabling the safe use of glass syringes.
Aesica Business Review
Operations
H1 FY2018 Underlying(1) <DELTA>% Currency <DELTA>% H1 FY2017
<DELTA> <DELTA>
------------- ---------- -------------- --------- --------- --------- ----------
Revenue GBP93.1m GBP4.3m 5.0% GBP2.8m 3.2% GBP86.0m
------------- ---------- -------------- --------- --------- --------- ----------
EBITDA(2) GBP11.5m GBP1.2m 12.3% GBP0.3m 2.5% GBP10.0m
------------- ---------- -------------- --------- --------- --------- ----------
EBITDA
margin
%(2) 12.3% 11.6%
------------- ---------- -------------- --------- --------- --------- ----------
EBIT(2) GBP7.8m GBP0.9m 14.0% GBP0.2m 2.8% GBP6.7m
------------- ---------- -------------- --------- --------- --------- ----------
EBIT margin
%(2) 8.4% 7.8%
------------- ---------- -------------- --------- --------- --------- ----------
(1) Underlying/CER - at constant exchange rates; H1 FY2017 actuals retranslated at average H1 FY2018 exchange rates. (2) Before special items of GBP10.4m (H1 FY2017: GBP6.5m) that includes amortisation of acquired intangible assets, reorganisation and impairment costs.
Aesica develops, formulates and manufactures active pharmaceutical ingredients (APIs) and finished dose drugs to the highest quality standards. It has strong and well-established relationships with leading pharmaceutical companies and works closely with them to support their growth strategies. The business has regulatory approved facilities in the UK, Germany and Italy.
The business performed well in the first half of the year with increased demand from the established customer base supplemented by opportunities with new customers.
Aesica revenue grew 8.2% to GBP93.1m (H1 FY2017: GBP86.0m) or by 5.0% at constant exchange rates. EBIT grew by 16.8% to GBP7.8m (H1 FY2017: GBP6.7m) or 14.0% at constant exchange rates.
As a result the operating margin(2) increased by 60bps to 8.4% with another successive increase in margins since the business was acquired.
Business Development and Innovation
The further underlying growth in both sales and profits includes winning a number of new contracts. We continue to focus on providing a high quality performance to our customers alongside our broad range of capabilities that helps differentiate our offering in this market. Aesica has also maintained its good regulatory compliance record following several routine compliance audits, and this expertise is successfully being shared across the wider Group.
The business has identified a number of attractive business development opportunities with pharma companies looking to source oral products and has seen further growth in demand for its liquid formulation services at the Pianezza site, in Italy. There have also been new contract awards for our finished dose business based in Monheim and Zwickau, Germany.
The Aesica commercial team is focused on a growing number of formulation development and manufacturing opportunities. This includes making good progress on a significant new API opportunity.
We have also secured a new customer for our semi-continuous processing line and technology installed at the Queenborough site and will commence supply in the second half of the year. We are continuing to explore opportunities with further customers and support them with their development work.
Aesica has continued to progress and invest in serialisation capabilities which allow the identification of products at the individual pack level. Aesica is starting to benefit from being an early provider of this technology to support customers in countries such as China and Latin America that have implemented this technology to trace authentic drugs. Aesica is well advanced in developing the service to support and take on customers for the next wave of countries adopting serialisation including the EU.
Other Financial
Pensions
The IAS 19 pension valuation at 31 October 2017 showed a total deficit of GBP25.1m (30 April 2017: GBP44.6m). The bulk of the decrease in the deficit arises from a decrease in the benefit obligation due to changes in the discount rate, inflation and census data. Recovery contributions of GBP1.5m per annum are being made to the Bespak scheme. The triennial actuarial valuation is being reviewed with an effective date of 30 April 2017.
Tax
The effective tax rate on PBT before special items is 19.9% (H1 FY2017: 16.1%). The increase in the rate from the prior period reflects the non-repetition of the benefit in the prior year where historic development losses in the Medical House (ASI) Ltd. were recognised as a tax asset following the approval and launch of UCB's Cimzia(R) autoinjector. This is line with our expectations of an effective tax rate of c.16% for the full year with the first half reflecting the anticipated higher mix of European profits at higher effective tax rates in the first half of the year.
Principal risks and uncertainties
The principal risks and uncertainties deemed relevant for the remainder of the financial year are considered in note 14 to the financial statements.
Outlook
Consort has continued to deliver underlying(1) revenue and profit growth in both divisions. Bespak has delivered another solid performance and made good progress in developing our devices business including our Syrina(R) / VapourSoft(R) auto-injectors that present exciting growth opportunities. Aesica has been awarded new API, finished dose and packaging contracts and secured a second contract on the semi-continuous processing line.
We remain focussed on the organic development of Consort while considering acquisition opportunities that allow access to new geographic markets and complementary technologies. The Board remains confident of Consort's future prospects supported by a robust financial position and a strong development pipeline.
Statement of directors' responsibilities
The directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The directors of Consort Medical plc are listed in the Consort Medical plc Annual Report for the year ended 30 April 2017. A list of current directors is maintained on the Consort Medical plc website: www.consortmedical.com.
By order of the Board
Paul Hayes
Chief Financial Officer
4 December 2017
Independent review report to Consort Medical plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2017 which comprises the consolidated Income Statement, consolidated Statement of Comprehensive Income, consolidated Balance Sheet, consolidated Statement of Changes in Shareholders' Equity, consolidated Cash Flow Statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2017 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Lynton Richmond
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
4 December 2017
Condensed Consolidated Income Statement
For the half year ended 31 October
2017
Unaudited Unaudited Audited
1 May 1 May 1 May
to 31 to 31 to 30
October October April
2017 2016 2017
Note GBPm GBPm GBPm
-------------------------------------------- ----- ------------ ---------- --------
Revenue 2 153.7 144.9 294.0
Operating expenses before
special items (133.4) (126.0) (254.0)
-------------------------------------------- ----- ------------ ---------- --------
Operating profit before special
items 20.3 18.9 40.0
Special items 3 (10.4) (6.5) (13.7)
-------------------------------------------- ----- ------------ ---------- --------
Operating profit 9.9 12.4 26.3
Finance income - - 0.1
Finance costs 4 (1.4) (1.6) (3.0)
Other finance costs 4 (1.0) (0.7) (1.5)
-------------------------------------------- ----- ------------ ---------- --------
Profit before tax and special
items 17.9 16.6 35.6
Special items 3 (10.4) (6.5) (13.7)
-------------------------------------------- ----- ------------ ---------- --------
Profit before tax 7.5 10.1 21.9
-------------------------------------------- ----- ------------ ---------- --------
Tax on profit before special
items 5 (3.5) (2.6) (3.8)
Special items - tax 3 3.0 2.3 4.5
Tax (charge) / credit 5 (0.5) (0.3) 0.7
-------------------------------------------- ----- ------------ ---------- --------
Profit for the financial period 7.0 9.8 22.6
--------------------------------------------------- ------------ ---------- --------
Earnings per share, attributable to
the ordinary equity holders of the parent
From continuing operations:
Basic earnings per ordinary
share 6 14.2p 20.1p 46.2p
Diluted earnings per
ordinary share 6 14.1p 19.9p 45.7p
Non-GAAP measures
From continuing operations: GBPm GBPm GBPm
Profit before tax before
special items 17.9 16.6 35.6
Profit after tax before
special items 14.4 14.0 31.8
Adjusted basic earnings
per ordinary share 6 29.3p 28.6p 65.1p
Adjusted diluted earnings
per ordinary share 6 29.1p 28.2p 64.4p
Condensed Consolidated Statement of Comprehensive
Income
For the half year ended
31 October 2017
Unaudited Unaudited Audited
1 May 1 May 1 May
to 31 to 31 to 30
October October April
2017 2016 2017
GBPm GBPm GBPm
------------------------------------------------- ---------- ---------- ---------
Profit for the period from
continuing operations 7.0 9.8 22.6
Other comprehensive income
Items that may be reclassified
subsequently to profit and
loss:
Net loss on hedge of a net
investment (1.3) (4.8) (2.5)
Exchange movements on translation
of foreign subsidiaries 5.7 17.9 9.0
Items that will not be reclassified
subsequently to profit and
loss:
Actuarial gains / (losses)
on defined benefit pension
scheme 19.4 (15.9) (18.3)
Deferred tax on actuarial
gains /(losses) (3.3) 2.9 3.3
Impact of change in tax rates - (0.4) (0.4)
------------------------------------------------- ---------- ---------- ---------
Other comprehensive income
/ (loss) for the period 20.5 (0.3) (8.9)
------------------------------------------------- ---------- ---------- ---------
Total comprehensive income
for the period 27.5 9.5 13.7
------------------------------------------------- ---------- ---------- ---------
Attributable to equity holders
of the parent
From continuing operations 27.5 9.5 13.7
------------------------------------------------- ---------- ---------- ---------
Condensed Consolidated
Balance Sheet
at 31 October 2017
Unaudited Unaudited Audited
31 October 31 October 30 April
2017 2016 2017
Note GBPm GBPm GBPm
---------------------------------- ----- ------------- ------------- -----------
Assets
Non-current assets
Property, plant and equipment 8 144.8 139.1 143.6
Goodwill 129.6 131.1 126.8
Other intangible assets 52.5 66.3 57.1
Investments 9 11.4 8.3 11.4
Trade and other receivables 9 3.1 - -
---------------------------------- ----- ------------- ------------- -----------
341.4 344.8 338.9
---------------------------------- ----- ------------- ------------- -----------
Current assets
Inventories 38.6 35.0 34.4
Trade and other receivables 9 55.4 62.5 54.9
Current tax asset 8.5 6.2 10.7
Cash and cash equivalents 10 27.9 16.2 22.2
---------------------------------- ----- ------------- ------------- -----------
130.4 119.9 122.2
---------------------------------- ----- ------------- ------------- -----------
Total assets 471.8 464.7 461.1
---------------------------------- ----- ------------- ------------- -----------
Liabilities
Current liabilities
Borrowings 10 (125.0) (123.0) (112.0)
Trade and other payables 9 (62.7) (56.3) (67.1)
Derivative financial instruments 9 (0.1) (0.3) (0.2)
Provisions for other liabilities (3.3) (4.4) (2.5)
---------------------------------- ----- ------------- ------------- -----------
(191.1) (184.0) (181.8)
---------------------------------- ----- ------------- ------------- -----------
Net current liabilities (60.7) (64.1) (59.6)
---------------------------------- ----- ------------- ------------- -----------
Non-current liabilities
Trade and other payables 9 (7.3) (9.5) (8.5)
Deferred tax liabilities (15.7) (16.5) (13.8)
Defined benefit pension
scheme deficit 12 (25.1) (43.3) (44.6)
Provisions for other liabilities (0.5) (0.4) (0.3)
---------------------------------- ----- ------------- ------------- -----------
(48.6) (69.7) (67.2)
---------------------------------- ----- ------------- ------------- -----------
Total liabilities (239.7) (253.7) (249.0)
---------------------------------- ----- ------------- ------------- -----------
Net assets 232.1 211.0 212.1
---------------------------------- ----- ------------- ------------- -----------
Shareholders' equity
Share capital 15 4.9 4.9 4.9
Share premium 138.5 137.9 138.0
Retained earnings 78.4 55.7 63.3
Other reserves 10.3 12.5 5.9
---------------------------------- ----- ------------- ------------- -----------
Total equity 232.1 211.0 212.1
---------------------------------- ----- ------------- ------------- -----------
Condensed Consolidated Statement of Changes in Shareholders' Equity
For the half year
ended 31 October
2017
Share Share Retained Translation
capital premium earnings reserve Total
GBPm GBPm GBPm GBPm GBPm
---------------------------- --------- --------- ---------- ------------ -------
Balance at 1 May
2016 (audited) 4.9 137.4 67.4 (0.6) 209.1
---------------------------- --------- --------- ---------- ------------ -------
Profit for the financial
period - - 9.8 - 9.8
Exchange movements
on translation of
foreign subsidiaries - - - 13.1 13.1
Actuarial losses
on defined benefit
scheme - - (15.9) - (15.9)
Tax on amounts taken
directly to equity - - 2.5 - 2.5
---------------------------- --------- --------- ---------- ------------ -------
Total comprehensive
income - - (3.6) 13.1 9.5
---------------------------- --------- --------- ---------- ------------ -------
Recognition of share-based
payments - - 1.0 - 1.0
Movement on tax arising
on share-based payments - - (0.1) - (0.1)
Proceeds from exercise
of employee options - 0.5 - - 0.5
Consideration paid
for purchase of own
shares (held in trust) - - (2.9) - (2.9)
Equity dividends - - (6.1) - (6.1)
---------------------------- --------- --------- ---------- ------------ -------
- 0.5 (8.1) - (7.6)
---------------------------- --------- --------- ---------- ------------ -------
Balance at 31 October
2016 (unaudited) 4.9 137.9 55.7 12.5 211.0
---------------------------- --------- --------- ---------- ------------ -------
Balance at 1 May
2016 (audited) 4.9 137.4 67.4 (0.6) 209.1
Profit for the financial
period - - 22.6 - 22.6
Exchange movements
on translation of
foreign subsidiaries - - - 6.5 6.5
Actuarial losses
on defined benefit
scheme - - (18.3) - (18.3)
Tax on amounts taken
directly to equity - - 2.8 - 2.8
---------------------------- --------- --------- ---------- ------------ -------
Total comprehensive
loss - - 7.1 6.5 13.6
---------------------------- --------- --------- ---------- ------------ -------
Recognition of share-based
payments - - 1.3 - 1.3
Movement on tax arising
on share-based payments - - 0.1 - 0.1
Proceeds from exercise
of employee options - 0.6 - - 0.6
Consideration paid
for purchase of own
shares (held in trust) - - (3.0) - (3.0)
Equity dividends - - (9.6) - (9.6)
---------------------------- --------- --------- ---------- ------------ -------
- 0.6 (11.2) - (10.6)
---------------------------- --------- --------- ---------- ------------ -------
Balance at 1 May
2017 (audited) 4.9 138.0 63.3 5.9 212.1
---------------------------- --------- --------- ---------- ------------ -------
Profit for the financial
period - - 7.0 - 7.0
Exchange movements
on translation of
foreign subsidiaries - - - 4.4 4.4
Actuarial gains on
defined benefit scheme - - 19.4 - 19.4
Tax on amounts taken
directly to equity - - (3.3) - (3.3)
---------------------------- --------- --------- ---------- ------------ -------
Total comprehensive
income - - 23.1 4.4 27.5
---------------------------- --------- --------- ---------- ------------ -------
Recognition of share-based
payments - - 0.7 - 0.7
Proceeds from exercise
of employee options - 0.5 - - 0.5
Consideration paid
for purchase of own
shares (held in trust) - - (2.2) - (2.2)
Equity dividends - - (6.5) - (6.5)
---------------------------- --------- --------- ---------- ------------ -------
- 0.5 (8.0) - (7.5)
---------------------------- --------- --------- ---------- ------------ -------
Balance at 31 October
2017 (unaudited) 4.9 138.5 78.4 10.3 232.1
---------------------------- --------- --------- ---------- ------------ -------
Condensed Consolidated Cash Flow Statement
For the half year ended 31 October 2017
Unaudited Unaudited Audited
1 May 1 May to 31 1 May
to 31 October 2016 to 30
October April
2017 2017
GBPm GBPm GBPm
--------------------------------- --- ---------- -------------- ---------
Cash flows from operating
activities
Profit before taxation
from continuing operations 7.5 10.1 21.9
Finance income - - (0.1)
Finance costs 1.4 1.6 3.0
Other finance costs 1.0 0.7 1.5
----------------------------------------- ---------- -------------- ---------
Operating profit 9.9 12.4 26.3
Depreciation 6.6 6.1 12.1
Amortisation 6.2 6.7 13.4
Profit on disposal of
property, plant and equipment - - 0.2
Impairment charge 2.9 - -
Share-based payments 0.7 1.0 1.3
Pension charge in excess
of cash contributions - - 0.1
Increase in inventories (3.8) (2.5) (2.7)
(Increase) / decrease
in trade and other receivables (2.9) (5.4) 0.7
(Decrease) / increase
in trade and other payables (2.5) (8.2) 1.0
Increase / (decrease)
in provisions 0.8 - (3.4)
Increase in financial
instruments (0.2) - (0.1)
----------------------------------------- ---------- -------------- ---------
Cash generated from operations 17.7 10.1 48.9
Interest paid (1.5) (2.0) (2.9)
Payments to fund defined
benefit pension scheme (0.8) (0.8) (2.0)
Tax received
/ (paid) - 1.7 (3.3)
---------------------------------- --- ---------- -------------- ---------
Net cash inflow from operating
activities 15.4 9.0 40.7
Cash flows from investing
activities
Purchases of property,
plant and equipment (10.2) (6.2) (18.0)
Purchases of intangible
assets (0.1) - (0.1)
Interest received - 0.1 0.1
Purchase of equity
investment - - (3.1)
------------------------------------ ---------- -------------- ---------
Net cash used in investing
activities (10.3) (6.1) (21.1)
Cash flows from financing
activities
Proceeds from issues of
ordinary share capital 0.5 0.5 0.6
Purchase of own shares (2.2) (2.9) (3.0)
Equity dividends paid
to shareholders (6.5) (6.1) (9.6)
Proceeds from new bank
funding 12.7 10.8 12.3
Repayment of amounts borrowed (1.2) (6.0) (16.4)
Net cash generated from
/ (used in) financing
activities 3.3 (3.7) (16.1)
Net increase / (decrease)
in cash and cash equivalents 8.4 (0.8) 3.5
Effects of exchange rate
changes 0.1 0.8 (0.3)
Cash and cash equivalents
at start of period 19.4 16.2 16.2
----------------------------------------- ---------- -------------- ---------
Cash and cash equivalents
at end of period 27.9 16.2 19.4
----------------------------------------- ---------- -------------- ---------
Notes to the accounts
1. Basis of preparation
The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is Breakspear Park, Breakspear Way, Hemel Hempstead, Herts HP2 4TZ. The Company is listed on the London Stock Exchange.
This condensed consolidated interim financial information was approved for issue on 4 December 2017.
This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 April 2017 were approved by the Board of directors on 14 June 2017 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.
This condensed consolidated interim financial information has been reviewed by the Group's auditor, not audited - see Independent Review Report.
This condensed consolidated interim financial information for the six months ended 31 October 2017 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority) and with IAS 34, 'Interim financial reporting', as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 April 2017, which have been prepared in accordance with IFRSs as adopted by the European Union.
Accounting policies
The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 April 2017, as described in those annual financial statements except where disclosed otherwise in this note. Taxes on income in the interim periods are accrued using the estimated tax rate that would be applicable to expected total annual earnings.
Critical accounting estimates and judgments
The preparation of interim financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this condensed consolidated interim financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 30 April 2017, with the exception of changes in estimates required in determining the provision for income taxes.
Going concern
The directors have, at the time of approving the interim financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.
Non-GAAP performance measures
The directors believe that the 'adjusted' profit and earnings per share measures provide additional useful information for shareholders on the underlying performance of the business. These measures are consistent with how business performance is measured internally. The adjusted profit before tax measure is not a recognised profit measure under IFRS and may not be directly comparable with 'adjusted' profit measures used by other companies.
Notes to the accounts (continued)
1. Basis of preparation (continued)
Further details on the special items can be found in note 3.
Alternative Performance Measures and the treatment of special items
In addition to statutory measures, a number of alternative performance measures are included in this Interim report to provide a clear understanding of the Group's performance. These measures assist investors in gaining a balanced view of the Company's performance across the industry. The alternative performance measures used include EBIT (or operating profit), EBITDA, PBT and EPS performance adjusted to eliminate special items that are costs relating to acquisitions or significant items which are not linked to the underlying performance of the business. Constant exchange rate measures eliminate the impact of currency movements by comparing the current measure against the comparative restated at this year's average exchange rate. Where we provide adjusted performance measures, they are compared to the equivalent measures in the prior year.
The directors believe that the "adjusted" profit and earnings per share measures provide additional useful information for shareholders on the underlying performance of the business. These measures are consistent with how business performance is measured internally.
Further detail on the special items in the year can be found in note 3. The directors also refer to EBITDA (earnings before interest, tax, depreciation and amortisation) as a performance indicator. EBITDA also adds back any profit or loss on disposal of property, plant and equipment.
Reconciliations of the significant APMs are included below:
Unaudited Unaudited Audited
1 May to 1 May to 1 May
31 31 to 30
October October April
2017 2016 2017
GBPm GBPm GBPm
---------- ---------- ----------
Operating profit (EBIT)
before special items 20.3 18.9 40.0
Depreciation 6.6 6.1 12.1
Amortisation 6.2 6.7 13.4
Less: Amortisation of
acquired intangibles (note
3) (6.1) (6.5) (13.0)
Loss on disposal of property,
plant and equipment - - 0.2
---------- ---------- --------
EBITDA before special
items 27.0 25.2 52.7
EBIT before special items 20.3 18.9 40.0
Finance income - - 0.1
Finance costs (1.4) (1.6) (3.0)
Other finance
costs (1.0) (0.7) (1.5)
Profit before tax before
special items (PBT) 17.9 16.6 35.6
At constant exchange rates (CER) - H1 FY2017 restated at the average rate (see above) in H1 FY2018:
Reported CER
2017 2017
GBPm GBPm
--------- ------
Revenue 144.9 147.7
EBIT before special items 18.9 19.1
PBT before special items 16.6 16.8
Adjusted basic EPS (p) 28.6 29.0
Notes to the accounts (continued)
1. Basis of preparation (continued)
New standards, amendments and interpretations
The following accounting standards and amendments are effective for the year commencing 1 May 2017 but are not expected to have a material impact on the Group:
-- IAS 7 Disclosure Initiative (Amendments to IAS 7) -- IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)
-- Annual Improvements to IFRSs 2014-2016 Cycle (Amendments to IFRS 12 Disclosure of Interests in Other Entities)
The following accounting standards relevant to the Group have not been early adopted as the Group carries out an assessment of their potential impact:
-- IFRS15 Revenue from Contracts with Customers -- Clarifications to IFRS 15 Revenue from Contracts with Customers -- IFRS 9 Financial Instruments -- Classification and Measurement of Share Based Payment Transactions (Amendments to IFRS 2)
-- Annual Improvements to IFRSs 2014-2016 Cycle (Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 28 Investments in Associates and Joint Ventures)
-- IFRIC 22 Foreign Currency Transactions and Advance Consideration
Further progress has been made in assessing the impact of IFRS 15 on the Group's revenue streams and analysis of this will be included in the FY2018 Annual Report and Accounts.
2. Segmental information
The Group's operating segments are determined with reference to the information which is supplied to the Executive Committee in order for it to allocate the Group's resources and to monitor the performance of the Group. Following the acquisition of Aesica Holdco Limited ("Aesica") on 12 November 2014, that information analyses the Group between two divisions, Bespak and Aesica. Prior to this acquisition, the Group only had one operating segment. The Executive Committee assesses the performance of the operating segments based on a measure of adjusted operating profit which excludes the impact of special items from the operating segments. Special items are analysed in note 3.
Consequently, the segment information provided to the Executive Committee for both of these reportable segments for the period ended 31 October 2017 is as follows:
Notes to the accounts (continued)
2. Segmental information (continued)
Bespak Aesica Unallocated Total
For the six months ended GBPm GBPm GBPm GBPm
31 October 2017
------------------------------- ------- ------- ------------ --------
Revenue from products 56.1 85.9 - 142.0
Revenue from services 4.5 7.2 - 11.7
------------------------------- ------- ------- ------------ --------
Revenue by business segment 60.6 93.1 - 153.7
------------------------------- ------- ------- ------------ --------
Segment operating profit
before special items 12.5 7.8 - 20.3
Special items excluding
amortisation of acquired
intangible assets (note
3) (2.9) (1.4) - (4.3)
Amortisation of acquired
intangible assets (0.4) (5.7) - (6.1)
------------------------------- ------- ------- ------------ --------
Segment operating profit 9.2 0.7 - 9.9
------------------------------- ------- ------- ------------ --------
Finance costs (1.4)
Other finance costs (1.0)
------------------------------- ------- ------- ------------ --------
Profit before tax 7.5
Taxation (0.5)
------- ------- ------------ --------
Profit for the financial
year 7.0
------------------------------- ------- ------- ------------ --------
Segmental balance sheet
Total assets 141.2 302.7 27.9 471.8
Total liabilities (43.2) (65.2) (131.3) (239.7)
------------------------------- ------- ------- ------------ --------
Net assets 98.0 237.5 (103.4) 232.1
------------------------------- ------- ------- ------------ --------
Bespak Aesica Unallocated Total
For the six months ended GBPm GBPm GBPm GBPm
31 October 2016
------------------------------- ------- ------- ------------ --------
Revenue from products 49.0 76.8 125.8
Revenue from services 9.9 9.2 19.1
------------------------------- ------- ------- ------------ --------
Revenue by business segment 58.9 86.0 - 144.9
------------------------------- ------- ------- ------------ --------
Segment operating profit
before special items 12.2 6.7 - 18.9
Amortisation of acquired
intangible assets (0.4) (6.1) - (6.5)
------------------------------- ------- ------- ------------ --------
Segment operating profit 11.8 0.6 - 12.4
------------------------------- ------- ------- ------------ --------
Finance income -
Finance costs (1.6)
Other finance costs (0.7)
------------------------------- ------- ------- ------------ --------
Profit before tax 10.1
Taxation (0.3)
------- ------- ------------ --------
Profit for the financial
year 9.8
------------------------------- ------- ------- ------------ --------
Segmental balance sheet
Total assets 117.3 316.5 30.9 464.7 Total liabilities (64.2) (73.4) (116.1) (253.7) ------------------------------- ------- ------- ------------ -------- Net assets 53.1 243.1 (85.2) 211.0 ------------------------------- ------- ------- ------------ --------
Notes to the accounts (continued)
2. Segmental information (continued)
Bespak Aesica Unallocated Total
For the year ended 30 GBPm GBPm GBPm GBPm
April 2017
--------------------------- ------- ------- ------------ --------
Revenue from products 105.3 155.4 - 260.7
Revenue from services 15.8 17.5 - 33.3
--------------------------- ------- ------- ------------ --------
Total revenue 121.1 172.9 - 294.0
Segment operating profit
before special items 26.1 13.9 - 40.0
Special items excluding
amortisation of acquired
intangible assets (note
3) - - (0.7) (0.7)
Amortisation of acquired
intangible assets (0.8) (12.2) - (13.0)
--------------------------- ------- ------- ------------ --------
Segment operating profit 25.3 1.7 (0.7) 26.3
--------------------------- ------- ------- ------------ --------
Finance income 0.1
Finance costs (3.0)
Other finance costs (1.5)
--------------------------- ------- ------- ------------ --------
Profit before tax 21.9
Taxation 0.7
------- ------- ------------ --------
Profit for the financial
year 22.6
--------------------------- ------- ------- ------------ --------
Segmental balance sheet
Total assets 139.1 299.7 22.3 461.1
Total liabilities (63.5) (69.8) (115.7) (249.0)
--------------------------- ------- ------- ------------ --------
Net assets 75.6 229.9 (93.4) 212.1
--------------------------- ------- ------- ------------ --------
The Group's operating locations are based in the United Kingdom and Europe, with the Group also making sales in the USA and the rest of the world.
Revenue by destination Unaudited Unaudited Audited
from continuing operations 1 May to 31 1 May 1 May
October 2017 to 31 to 30
October April
2016 2017
GBPm GBPm GBPm
----------------------------- -------------- ---------- --------
United Kingdom 13.3 19.8 24.9
United States of America 25.0 24.6 47.9
Europe 100.0 92.5 181.3
Rest of the world 15.4 8.0 39.9
------------------------------- -------------- ---------- --------
Revenue from continuing
operations 153.7 144.9 294.0
------------------------------- -------------- ---------- --------
Notes to the accounts (continued)
3. Special items
Unaudited Unaudited Audited
1 May 1 May 1 May
to 31 to 31 to 30
October October April
2017 2016 2017
GBPm GBPm GBPm
------------------------------------- ---------- ---------- --------
Reorganisation and restructuring
costs (1.4) - (0.5)
Advisory and acquisition
costs - - (0.2)
Amortisation of acquisition-related
intangibles (6.1) (6.5) (13.0)
Impairment of property,
plant and equipment (2.9) - -
Special items before taxation
from continuing operations (10.4) (6.5) (13.7)
Tax on special items 2.3 1.8 3.6
Special tax item - other prior
year adjustments - - 0.4
Special tax item - deferred
tax credit as a result of rate
change 0.7 0.5 0.5
Special items after
taxation from continuing
operations (7.4) (4.2) (9.2)
--------------------------------------- ---------- ---------- --------
-- Reorganisation and restructuring costs relate primarily to restructuring activities within the Aesica business including employee redundancy/termination costs, property exit and other related costs.
-- Advisory and acquisition costs of GBP0.2m in the prior year to 30 April 2017 include advisory costs in relation to the evaluation of potential transactions.
-- Amortisation of acquired intangible assets represents the charge for other intangible assets within Aesica (acquired in 2014) of GBP5.7m (H1 FY2017: GBP6.1m) and of GBP0.4m (H1 FY2017: GBP0.4m) in relation to The Medical House acquired in 2009.
-- Impairment of property, plant and equipment in the period relates to a write-down of the carrying values of property, plant and equipment due to a lack of future anticipated economic value from this part of the business.
-- A special tax item of GBP0.4m was recognised in the prior year to 30 April 2017 as the impact of a number of prior year adjustments made.
-- The special tax item of GBP0.7m recognised in the period arises as a result of movement in the deferred tax recognised on the Aesica acquired intangibles in Europe from the change in the weighted average tax rate of the territories to which they relate. In the prior year the credit related to the recalculation of the Group's deferred tax assets and liabilities using the lower rate of UK Corporation Tax of 17% from 1 April 2020 (reduced from 18%).
Notes to the accounts (continued)
4. Finance costs
Unaudited Unaudited Audited
1 May to 1 May to 1 May
31 31 to 30
October 2017 October April
2016 2017
GBPm GBPm GBPm
----------------------------- -------------- ---------- --------
Interest on bank overdrafts
and loans including
amortised fees (1.4) (1.6) (3.0)
------------------------------- -------------- ---------- --------
Total finance costs (1.4) (1.6) (3.0)
Other finance costs
Net interest cost on
defined benefit scheme (0.6) (0.4) (0.8)
Foreign exchange losses (0.4) (0.3) (0.7)
------------------------------ -------------- ---------- --------
Total other finance
costs (1.0) (0.7) (1.5)
------------------------------- -------------- ---------- --------
5. Taxation
Unaudited Unaudited Audited
1 May to 1 May to 1 May
31 31 to 30
October October April
2017 2016 2017
GBPm GBPm GBPm
-------------------------------- ---------- ---------- --------
Current income tax from
continuing operations
UK corporation tax 0.5 0.9 2.0
Adjustments in respect
of prior periods 0.2 (0.2) (1.1)
Foreign tax 1.9 1.4 1.5
Deferred taxation (2.1) (1.8) (3.1)
---------------------------------- ---------- ---------- --------
Income tax expense / (credit)
reported in the consolidated
income statement 0.5 0.3 (0.7)
--------------------------------- ---------- ---------- --------
The tax charge from continuing
operations is analysed
between:
Tax on profit before
special items 3.5 2.6 3.8
Tax on special items (2.3) (1.8) (3.6)
Special tax item - other
prior year adjustments - - (0.4)
Special tax item - deferred
tax credit as a result of
the rate change (0.7) (0.5) (0.5)
Income tax expense / (credit)
reported in the consolidated
income statement 0.5 0.3 (0.7)
--------------------------------- ---------- ---------- --------
Special tax items above are described further in note 3.
Notes to the accounts (continued)
6. Earnings per share
Unaudited Unaudited Audited
1 May 1 May to 1 May
to 31 31 to
October October 30
2017 2016 April
2017
GBPm GBPm GBPm
-------------------------------------- ---------- ---------- --------
The calculation of earnings per ordinary
share is
based on the following:
Continuing operations (basic
and diluted)
Profit for the period - attributable
to ordinary shareholders 7.0 9.8 22.6
Add back: Special items after
taxation 7.4 4.2 9.2
-------------------------------------- ---------- ---------- --------
Adjusted earnings 14.4 14.0 31.8
-------------------------------------- ---------- ---------- --------
Total (basic and diluted)
Profit for the period - attributable
to ordinary shareholders 7.0 9.8 22.6
Add back: Special items after
taxation 7.4 4.2 9.2
-------------------------------------- ---------- ---------- --------
Adjusted earnings 14.4 14.0 31.8
-------------------------------------- ---------- ---------- --------
Number of shares
Weighted average number of
ordinary shares in issue for
basic earnings 49,232,289 49,154,593 49,181,247
Weighted average number of
shares owned by Employee Share
Ownership Trust (299,568) (300,759) (300,569)
---------------------------------- ----------- ----------- -----------
Average number of ordinary
shares for in issue for basic
earnings 48,932,721 48,853,834 48,880,678
Dilutive impact of share options
outstanding 468,652 622,701 504,543
---------------------------------- ----------- ----------- -----------
Diluted weighted average number
of ordinary shares in issue 49,401,373 49,476,535 49,385,221
Pence Pence Pence
Continuing operations
---------------------------------- ----------- ----------- -----------
Adjusted basic earnings per
share 29.3 28.6 65.1
Unadjusted basic earnings per
share 14.2 20.1 46.2
Adjusted diluted earnings per
share 29.1 28.2 64.4
Unadjusted diluted earnings
per share 14.1 19.9 45.7
Notes to the accounts (continued)
7. Dividends
Unaudited Unaudited Audited
1 May 1 May 1 May
to 31 to 31 to
October October 30
2017 2016 April
2017
GBPm GBPm GBPm
------------------------------------ ---------- ---------- --------
Final dividend for the year ended
30 April 2017 of 13.21p per share
(2017: final dividend for 2016
of 12.56p per share) 6.5 6.1 6.1
Interim dividend paid in 2017:
7.09p per share - - 3.5
------------------------------------- ---------- ---------- --------
6.5 6.1 9.6
------------------------------------ ---------- ---------- --------
The directors are proposing an interim dividend for the year ending 30 April 2018 of 7.44p per share which will absorb an estimated GBP3.7 million of shareholders' equity. It will be paid on 16 February 2018 to shareholders who are on the register on 19 January 2018.
8. Capital expenditure
In the period there were additions to property, plant and equipment of GBP9.7 million (H1 FY2017: GBP5.7 million). Capital commitments contracted for but not provided for by the Group amounted to GBP12.8 million (H1 FY2017: GBP5.4 million).
9. Financial assets and liabilities
The following table sets out the classification of the Group's financial assets and liabilities. Receivables and payables have been included to the extent that they are classified as financial assets and liabilities in accordance with IAS 32, Financial Instruments: Presentation. Provisions have been included where there is a contractual obligation to settle in cash.
Unaudited Unaudited Audited
31 October 31 October 30
2017 2016 April
2017
Financial assets GBPm GBPm GBPm
------------------------------------ ------------ ------------ --------
Cash and cash equivalents* 27.9 16.2 22.2
-------------------------------------- ------------ ------------ --------
Trade receivables 43.1 46.8 43.2
Other receivables(^) 10.3 8.7 8.1
------------------------------------- ------------ ------------ --------
Total loans and receivables
* 53.4 55.5 51.3
Equity investments 11.4 8.3 11.4
------------------------------------- ------------ ------------ --------
Total available-for-sale financial
assets 11.4 8.3 11.4
------------------------------------- ------------ ------------ --------
^ This includes GBP3.2m of non-current receivables.
Unaudited Unaudited Audited
31 October 31 October 30
2017 2016 April
2017
Financial liabilities GBPm GBPm GBPm
--------------------------------- ------------ ------------ --------
Trade payables (37.0) (26.0) (30.2)
Bank overdraft - - (2.8)
Other creditors and accruals (19.4) (21.1) (24.7)
Interest bearing loans and
borrowings (125.7) (124.1) (113.0)
Total amortised cost * (182.1) (171.2) (170.7)
Currency exchange contracts (0.1) (0.3) (0.2)
---------------------------------- ------------ ------------ --------
Total fair value through profit
and loss financial liabilities (0.1) (0.3) (0.2)
---------------------------------- ------------ ------------ --------
* The directors consider that the carrying value of amounts of these financial assets and liabilities recorded at amortised cost in the financial statements are approximately equal to their fair values.
Notes to the accounts (continued)
9. Financial assets and liabilities (continued)
All financial liabilities have a contractual maturity date that is less than 12 months from the balance sheet date. The equity investments in Atlas Genetics Limited and Oxular Limited are unquoted investments and therefore held at cost, less any provision for impairment as their fair value cannot be measured reliably in the absence of an active market.
Interest bearing loans and borrowings includes a borrowing of GBP30.3m at 31 October 2017 (H1 FY2017: GBP37.4m) which has been designated as a hedge of the net investments in the two subsidiaries in Germany and Italy, Aesica Pharmaceuticals GmbH and Aesica Pharmaceuticals Srl. This borrowing is being used to hedge the Group's exposure to the Euro exchange risk on these investments. Gains or losses on the retranslation of this borrowing are transferred to OCI to offset any gains or losses on translation of the net investments in the subsidiaries.
Financial liabilities at
fair value
Unaudited Unaudited Audited
31 October 31 October 30 April
2017 2016 2017
GBPm GBPm GBPm
------------------------------ ------------ ------------ ----------
Level 2:
Currency exchange contracts (0.1) (0.3) (0.2)
10. Analysis of net debt
Unaudited Unaudited Audited
31 October 31 October 30 April
2017 2016 2017
GBPm GBPm GBPm
---------------------------- --------------- ------------ -----------
Current assets:
Cash and cash equivalents 27.9 16.2 22.2
---------------------------- --------------- ------------ -----------
27.9 16.2 22.2
-------------------------------- --------------- ------------ -----------
Current liabilities:
Bank overdrafts - - (2.8)
- - (2.8)
Group borrowings:
Interest-bearing loans
and borrowings (125.7) (124.1) (113.0)
Unamortised facility fees 0.7 1.1 1.0
Net borrowings (125.0) (123.0) (112.0)
--------------------------------- --------------- ------------ -----------
Net debt (97.1) (106.8) (92.6)
--------------------------------- --------------- ------------ -----------
The Group has a GBP160m multicurrency revolving facility and a GBP65m 'accordion' facility by which further facilities may be made available by Barclays, Lloyds, RBS and Santander under the current terms to support significant investment or acquisition opportunities which may arise. The existing revolving credit facilities expire in September 2019. Whilst the multi-year revolving committed credit facility does not expire for just under two years, the debt within this is disclosed as less than one year on the balance sheet, as it is drawn for one-month periods, and then redrawn as appropriate to minimise the amount of debt drawn relative to the Group's needs to minimise the interest payable. The undrawn facilities are unsecured. The bank loans and overdrafts are subject to cross-guarantees between Group undertakings. Interest on the multicurrency revolving credit facility is charged at LIBOR plus a margin of between 1.20% and 2.15%, depending upon the ratio of net debt to EBITDA (earnings before interest, tax, depreciation and amortisation), and on UK overdrafts at either 1.75% above UK base rate or at the prevailing rate per the revolving credit facility.
Notes to the accounts (continued)
11. Reconciliation of net cash
flow to movement in net debt
Unaudited Unaudited Audited
1 May 1 May 1 May
to 31 to 31 to 30
October October April
2017 2016 2017
GBPm GBPm GBPm
------------------------------------ ---------- ---------- --------
Net debt at the beginning
of the period (92.6) (97.0) (97.0)
Net (decrease) / increase
in cash and short-term borrowings (3.0) (5.1) 7.8
Effects of exchange rate
changes (1.4) (4.5) (3.1)
Amortisation of facility
fees (0.2) (0.2) (0.3)
Other non-cash movements 0.1 - -
------------------------------------ ---------- ---------- --------
Net debt at the end of the
period (97.1) (106.8) (92.6)
----------------------------------------- ---------- ---------- --------
12. Defined benefit pension
scheme deficit
Unaudited Unaudited Audited
1 May 1 May 1 May
to 31 to 31 to 30
October October April
2017 2016 2017
GBPm GBPm GBPm
---------------------------------- ---------- ---------- --------
Pension deficit at start
of the period 44.6 27.2 27.2
Current service cost - - 0.1
Interest income (1.4) (1.6) (3.1)
Interest cost 2.0 2.0 3.9
Return on scheme assets
excluding interest (2.3) (10.5) (14.5)
Effect of experience adjustments (9.5) - -
(Gain) / loss from changes
in financial assumptions (7.6) 26.4 32.8
Employer contributions (0.8) (0.8) (2.0)
Foreign exchange 0.1 0.6 0.2
------------------------------------ ---------- ---------- --------
Pension deficit at end of
the period 25.1 43.3 44.6
------------------------------------ ---------- ---------- --------
13. Related party transactions
The Group's significant related parties are its subsidiaries as disclosed in the Consort Medical plc annual report for the year ended 30 April 2017. There were no material related party transactions in the period.
Notes to the accounts (continued)
14. Principal risks and uncertainties
The principal risks and uncertainties which could impact the Group's long-term performance remain those detailed on pages 39 to 41 of the Group's 2017 Annual Report & Accounts, a copy of which is available on the Group's website www.consortmedical.com. The risks are summarised below:
-- Reliance upon key customers / products -- Major operational incident -- Growth risk -- Acquisition risk -- Legal risk -- Political / Socio-economic risk -- Development risk -- Product quality failure -- Corporate Social Responsibility -- Regulatory risk -- IT / Cyber risk -- Human Resources -- Financial risks including currency risk, interest rate risk, liquidity and leverage risk -- Pension risk -- Distributable reserves -- Impact of Brexit
15. Share capital
Share capital as at 31 October 2017 amounted to GBP4.9 million (30 April 2017: GBP4.9 million). During the period, the Group issued 68,213 shares (period to 31 October 2016: 75,590 shares) as part of exercises under the Consort Savings Related Share Option Scheme and the Long Term Incentive Plan for total consideration of GBP0.5 million.
The Group purchases its own shares using an Employee Share Ownership Trust (ESOT) to satisfy entitlements under the Group's long-term incentive plan. The cost of the shares held by the ESOT is deducted from retained earnings. The Group purchased 203,882 shares for a consideration of GBP2.2 million during the period (H1 FY2017: GBP2.9 million, FY2017: GBP3.0 million). As at 31 October 2017, the ESOT held a total of 300,579 ordinary shares (30 April 2017: 298,888 shares) at a cost of GBP3.0 million (30 April 2017: GBP2.8 million) and market value of GBP2.3 million (30 April 2017: GBP2.3 million).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFFIVFTLSIID
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