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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ekf Diagnostics Holdings Plc | LSE:EKF | London | Ordinary Share | GB0031509804 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.10 | 4.00% | 28.60 | 27.10 | 28.70 | 28.60 | 28.60 | 28.60 | 162,947 | 08:10:38 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Med, Dental, Hosp Eq-whsl | 52.61M | 2.35M | 0.0052 | 55.00 | 130.11M |
From Apr 2019 to Apr 2024
TIDMEKF
RNS Number : 2984Q
EKF Diagnostics Holdings PLC
11 September 2017
EKF Diagnostics Holdings plc
("EKF", the "Company" or the "Group")
Half Yearly Report
EKF Diagnostics Holdings plc (AIM: EKF), the AIM listed point-of-care business, announces its unaudited interim results for the six months ended 30 June 2017.
Financial Highlights
-- Revenue up 22.8% to GBP21.50m (H1 2016: GBP17.51m) -- Gross profit up 40.6% to GBP11.84m (H1 2016: GBP8.42m) -- Adjusted EBITDA* up 126.7% to GBP4.58m (H1 2016: GBP2.02m) -- Cash generated from operations of GBP5.07m (H1 2016: GBP1.35m).
-- Net cash GBP4.44m (30 June 2016: net debt of GBP4.28m), (31 December 2016: net cash of GBP2.16m)
* Before exceptional items and share based payments
Operational Highlights
-- Streamlined the Group successfully reducing the cost base
-- Poland manufacturing facility closed and business transferred to the factory in Barleben, Germany
-- The company has 7 sites in total, from a peak of 12 -- Improved performance across every business area due to organic growth -- Sold 7,496 analysers and c.34m tests during the first half of 2017 -- Investment in enzyme manufacturing technology at EKF Life Sciences, USA.
Commenting on outlook, Christopher Mills, Non-Executive Chairman of EKF, said:
"By following the business plan we set out of simplifying and streamlining the company, the Board is pleased to report continued good progress in the first half of 2017, illustrated by improved performance across every business area. It remains the Board's intention to tightly control costs and therefore the Board is comfortable that current trading is in line with management expectations for 2017."
Enquiries:
Hot Features
Premium
www.ekfdiagnostics.com
EKF Diagnostics Holdings plc Tel: +44 (0) 29 2071 0570
Julian Baines, CEO Mob: +44 (0) 7788 420 859
Richard Evans, COO Mob: +49 (0) 1603 519 054
N+1 Singer Tel: 020 7496 3000
Alex Price/Alex Laughton-Scott
Walbrook PR Limited Tel: +44 (0) 20 7933 8780 or ekf@walbrookpr.com
Paul McManus Mob: +44 (0) 7980 541 893
Lianne Cawthorne Mob: +44 (0) 7584 391 303
BUSINESS REVIEW
The Board of EKF Diagnostics Holdings plc (EKF) is pleased to report continued good progress in the first half of 2017, with revenue and adjusted earnings before interest, tax, depreciation, and amortisation (adjusted EBITDA) both ahead of our original expectations at the start of the year.
Strategy and operations
Strategy
It remains our intention to keep the Group's activities focussed on delivering growth from our Point-of-Care and Central Laboratory businesses. We continue to tightly control costs and to work towards simplifying the business, however, we will be investing in our enzyme facility in Elkhart, Indiana.
Restructuring update
In June 2017 our facility in Poland was closed and the business transferred to our main factory in Barleben, Germany. As a result there were a small number of redundancies and we would like to thank those affected and wish them well for the future. We are now operating from seven sites, down from a peak of twelve.
Capital reduction and share buyback
On 20 March we announced that the Board was evaluating plans under which they would split the Company into two separate companies based on the business divisions, namely Point of Care and Lab Diagnostics. However, following extensive discussions with our tax advisers, it now appears to be highly unlikely that any business separation can be carried out. The board will revisit a possible demerger should the tax position within the US change.
The Board remain committed to returning shareholder value through a limited share buyback plan of up to 15% of the current share capital. On 27 July shareholders approved a capital reduction whereby, subject to court approval, EKF's share premium account will be cancelled and the amount credited to a distributable reserve. The court granted approval on 6 September 2017. The EKF Board will determine from time to time whether it is appropriate to use this authority and further announcements will be made at the appropriate time.
Share options
On 26 June the Group announced the cancellation, at the election of holders, of 21,614,766 share options held by directors and senior management, for a total payment of GBP1.51m. The purpose of this cancellation was to simplify the Company's capital structure in addition to the proposed share buyback and to reduce future dilution to shareholders.
Following the cancellation, share options remain over a total of 1,950,000 Ordinary Shares. These are exercisable at various prices of between 20p and 37.625p and expire between 7 July 2023 and 6 April 2025.
Operations
The period has seen improved performance across every business area.
Point-of-care
i. Hematology
Hematology sales have increased by 29% with Hemo Control (known as HemoPoint H2 in the Americas) up by 35%. Transition of sales activities in the USA from Alere back in-house was completed in early June 2016. The DiaSpect Tm product has also seen strong growth, up by 20%, - both through our own sales and through our blood bank market partner Fresenius. Our strategy here is to increase market share in India through the Diaspect Tm product. Sales of HemataStat II are up 48%.
ii. Diabetes
The Diabetes product lines have seen sales increase by 22%, with strong performances coming from the Quo-Test and Quo-Lab products which combined are up 34%, and Biosen products (up 16%) as we focus on appointing new Biosen distributors in China. We have continued to supply Quo-Test instruments and consumables to Saudi Arabia under the contract won in 2015. Sales in STAT-Site M BHB are up 52%.
Central Laboratory
In Central Laboratory, we have continued to see strong performance from sales of Beta-Hydroxybutyrate 'Liquicolor, reagent which are up 11%, with total central laboratory sales up 15%. We have seen considerable interest in the Altair 240 clinical chemistry analyser launched last year, and chemistry sales have increased by 16%.
Regulatory Update
We have long recognised that a key driver for future growth is gaining additional registrations for our products in our major markets. As well as US FDA registrations we are working on, amongst others, new registrations for: multiple products in China, where Quo-Test is currently in Lab testing phase; Brazil for Hemo Control, Diaspect Tm, Quo-Test and Quo-Lab; and India where registration of Diaspect Tm is anticipated in Q1 2018. At the same time in Europe a new regulatory regime IVDR (In Vitro Diagnostics Regulations) has been introduced which significantly increases the regulatory burden. As a result we are investing in additional regulatory support for the business in both Europe and the USA.
Financial review
Revenue
Revenue for the period was GBP21.50m (H1 2016: GBP17.51m), an increase of 22.8%.
Unaudited Unaudited +/- %
6 months ended 6 months ended
30 June 2017 30 June 2016
GBP'000 GBP'000
Hematology 6,664 5,182 +29%
Diabetes 5,899 4,816 +22%
Other Point of Care 1,411 1,390 +2%
-------------------- --------------------
Total Point of Care 13,974 11,388 +23%
-------------------- --------------------
Total Central Laboratory 6,579 5,699 +15%
-------------------- --------------------
Other 945 420 +125%
Total revenue 21,498 17,507 +23%
-------------------- --------------------
Gross profit
Gross profit is GBP11.84m (H1 2016: GBP8.42m). Gross profit as a percentage of revenue is 55% (H1 2016: 48%). The increase in margin is largely the result of increased activity as well as inventory provision releases which have been possible because of sales of inventory that had provisions recorded against it.
Administrative expenses
In H1 2017, administrative expenses are GBP10.16m including research and development (R & D) costs of GBP0.40m. In addition, further R & D costs of GBP0.43m have been capitalised. The reduction in R & D expenses reflects the strategic decision in 2015 to close down or mothball many of the programmes then being run, which took effect gradually through H1 2016.
To aid understanding, administrative expenses in each period are made up as follows:
Unaudited Unaudited Audited year
6 months ended 6 months ended ended December
30 June 2017 30 June 2016 2016
-------------------- -------------------- --------------------
Non-exceptional administration
expenditure before R &
D capitalisation 9,718 9,279 17,844
Effect of share based payments 894 55 976
Less R & D capitalised (426) (363) (618)
Effect of exceptional items (23) 387 532
-------------------- -------------------- --------------------
Total administrative expenses 10,163 9,358 18,734
-------------------- -------------------- --------------------
The charge for depreciation of fixed assets and for the amortisation of intangibles is GBP2.01m (H1 2016: GBP2.49m).
Operating profit and adjusted earnings before interest tax and depreciation
The Group has made an operating profit of GBP1.70m (H1 2016: loss of GBP0.91m). We consider a more meaningful measure of underlying performance to be adjusted EBITDA which for H1 2017 was GBP4.58m (H1 2016: GBP2.02m). This excludes the effects of share-based payments of GBP0.89m (H1 2016: GBP0.06m) and exceptional profits of GBP0.02m (H1 2016: exceptional loss of GBP0.39m).
Finance costs
Finance costs have remained steady at GBP0.30m (H1 2016: GBP0.30m). A higher charge for the increase in fair value of deferred consideration has offset reduced interest on bank borrowings.
Tax
There is a tax charge of GBP1.63m (H1 2016: GBP0.23m). The increase is partly a result of improved income, and partly the result of a deferred tax charge resulting from the cancellation of share options.
Balance sheet
We have invested GBP0.72m (H1 2016: GBP0.80m) in property plant and equipment. The expenditure mainly relates to additional production equipment in Germany.
Intangible assets
The value of intangible fixed assets is GBP45.16m (31 December 2016: GBP46.50m). The decrease is mainly as a result of amortisation, and the impairment of the remaining goodwill associated with our Polish company of GBP0.33m. An amount of GBP0.54m has been capitalised, being largely development expenditure.
Deferred consideration
The remaining deferred consideration relates to the share-based payment to the former owner of EKF-Diagnostic GmbH. Finalisation of the contracts to conclude the position is expected to take place in 2017.
Cash and working capital
The unaudited gross cash position at 30 June 2017 was GBP5.72m (31 Dec 2016: GBP7.87m), and the Group had net cash of GBP4.44m (31 Dec 2016: GBP2.16m). Gross cash has reduced largely because of the repayment of debt. In total GBP4.4m was repaid in H1 2017 and GBP6.2m has been repaid over the past 12 months.
Cash generated from operations in H1 2017 is GBP5.07m (H1 2016: GBP1.35m). Trade debtors at period end are unchanged from the 2016 year end. Efforts to reduce inventory have been successful, although a continuing mismatch between the product mix held in stock and the mix of sales means that inventory remains higher than target. Trade creditors have increased, mainly because of higher activity levels and timing differences.
Outlook
The immediate aim of the Board is to build on the recent success of the streamlined Group with its lower cost base. We continue to look to achieve further manufacturing savings based where necessary on limited and highly targeted capital expenditure. In the medium term, the Board look for growth opportunities from new registrations and customers. Draft agreements are in place with OEM partners in the USA for DiaSpect Tm and Quo-Test A1c.
The Board is comfortable that current trading is in line with management expectations for 2017.
Christopher Mills
Non-Executive Chairman
11 September 2017
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 30 JUNE 2017
Unaudited
Unaudited 6 months Audited
6 months ended Year ended
ended 30 30 June 31 December
June 2017 2016 2016
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3 21,498 17,507 38,589
Cost of sales (9,659) (9,091) (20,267)
--------------- -------------- -----------------
Gross profit 11,839 8,416 18,322
Administrative expenses (10,163) (9,358) (18,734)
Other income 19 32 85
--------------- -------------- -----------------
Operating profit/(loss) 1,695 (910) (327)
------------------------------------- ----------
Depreciation and amortisation (2,011) (2,487) (4,961)
Share-based payments (894) (55) (973)
Exceptional items 4 23 (387) (532)
EBITDA before exceptional
items and share based payments 4,577 2,019 6,139
------------------------------------- ---------- --------------- -------------- -----------------
Finance income 35 22 37
Finance costs (303) (304) (713)
--------------- -------------- -----------------
Profit/(loss) before income
tax 1,427 (1,192) (1,003)
Income tax (charge)/credit 5 (1,626) (230) 1,172
--------------- -------------- -----------------
(Loss)/profit for the period
from continuing operations (199) (1,422) 169
--------------- -------------- -----------------
(Loss)/profit attributable
to:
Owners of the parent (267) (1,508) (18)
Non-controlling interest 68 86 187
(199) (1,422) 169
--------------- -------------- -----------------
Loss per ordinary share
attributable to the owners
of the parent during the
period 6
From continuing operations Pence Pence Pence
Basic
Basic (0.06) (0.35) (0.00)
Diluted (0.06) (0.35) (0.00)
----------- ----------- -----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE 6 MONTHSED 30
JUNE 2017
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period
- continuing (199) (1,422) 169
Other comprehensive income:
Currency translation differences (277) 6,740 9,343
Other comprehensive loss/gain
for the period (277) 6,740 9,343
--------------- --------------- -----------------
Total comprehensive (loss)/profit
for the period (476) 5,318 9,512
--------------- --------------- -----------------
Attributable to:
Owners of the parent (579) 5,232 9,198
Non-controlling interests 103 86 314
--------------- --------------- -----------------
Total comprehensive (loss)/profit
for the period (476) 5,318 9,512
--------------- --------------- -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE
2017
Unaudited Unaudited Audited as
as at 30 as at 30 at 31 December
June 2017 June 2016 2016
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current
assets
Property, plant
and equipment 12,096 11,978 12,124
Intangible
assets 7 45,165 46,778 46,503
Investments 152 402 152
Deferred tax
assets 35 366 371
----------------------------- ------------------------------ ----------------------------------
Total
non-current
assets 57,448 59,524 59,150
----------------------------- ------------------------------ ----------------------------------
Current Assets
Inventories 5,638 7,915 6,025
Trade and other
receivables 9,366 8,137 9,370
Deferred tax
assets 13 53 13
Cash and cash
equivalents 5,719 3,242 7,874
Total current
assets 20,736 19,347 23,282
----------------------------- ------------------------------ ----------------------------------
Total assets 78,184 78,871 82,432
============================= ============================== ==================================
Equity
attributable to
owners of the
parent
Share capital 4,643 4,643 4,643
Share premium
account 95,393 95,393 95,393
Other reserve 41 41 41
Foreign currency
reserves 4,762 3,033 5,609
Retained
earnings (46,467) (46,863) (45,236)
----------------------------- ------------------------------ ----------------------------------
58,372 56,247 60,450
Non-controlling
interest 410 365 521
----------------------------- ------------------------------ ----------------------------------
Total equity 58,782 56,612 60,971
----------------------------- ------------------------------ ----------------------------------
Liabilities
Non-current
liabilities
Borrowings 1,275 2,122 1,130
Deferred tax
liability 4,063 3,795 3,751
----------------------------- ------------------------------ ----------------------------------
Total
non-current
liabilities 5,338 5,917 4,881
----------------------------- ------------------------------ ----------------------------------
Current
liabilities
Trade and other
payables 10,728 7,914 9,401
Deferred
consideration 915 505 693
Current income
tax liabilities 2,231 1,886 1,160
Deferred tax
liabilities 182 642 738
Borrowings 8 5,395 4,588
----------------------------- ------------------------------ ----------------------------------
Total current
liabilities 14,064 16,342 16,580
----------------------------- ------------------------------ ----------------------------------
Total
liabilities 19,402 22,259 21,461
----------------------------- ------------------------------ ----------------------------------
Total equity and
liabilities 78,184 78,871 82,432
============================= ============================== ==================================
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHSED 30 JUNE 2017
Unaudited
Unaudited 6 months Audited Year
6 months ended ended 30 to 31 December
30 June 2017 June 2016 2016
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Profit/(loss) before income tax 1,427 (1,192) (1,003)
Adjustments for
- Warranty claim (223) (20) (129)
- Depreciation 592 566 1,209
- Amortisation and impairment charges 1,419 1,921 3,752
- Deferred consideration (FV adjust) - - 481
- Provision movement - - (360)
- Loss on disposal of assets 28 30 30
- Share-based payments 545 55 220
- Net finance costs 268 282 676
Changes in working capital
- Inventories 286 530 2,767
- Trade and other receivables (481) (408) (1,127)
- Trade and other payables 1,134 (206) 2,300
----------------------------- --------------------------- ------------------------------------
Cash generated by operations 4,995 1,558 8,816
Interest paid (68) (284) (496)
Income tax received 141 80 623
----------------------------- --------------------------- ------------------------------------
Net cash generated by operating
activities 5,068 1,354 8,943
Cash flow from investing activities
Sale of investments - - 250
Purchase of property, plant and
equipment (PPE) (717) (796) (1,261)
Purchase of intangibles (539) (399) (663)
Proceeds from sale of PPE 119 44 211
Interest received 22 22 37
----------------------------- --------------------------- ------------------------------------
Net cash used in investing activities (1,115) (1,129) (1,426)
----------------------------- --------------------------- ------------------------------------
Cash flow from financing activities
Proceeds from issuance of ordinary
shares (net of costs) - 4,539 4,539
New borrowings 199 - 5,613
Repayment of borrowings (4,434) (3,749) (12,211)
Dividends paid to non-controlling
interests (215) (54) (54)
Cancellation of share options (1,509) - -
----------------------------- --------------------------- ------------------------------------
Net cash (used in)/generated by
financing activities (5,959) 736 (2,113)
----------------------------- --------------------------- ------------------------------------
Net (decrease)/increase in cash
and cash equivalents (2,006) 961 5,404
Cash and cash equivalents at beginning
of period 7,874 2,017 2,017
Exchange gains on cash and cash
equivalents (149) 264 453
----------------------------- --------------------------- ------------------------------------
Cash and cash equivalents at end
of period 5,719 3,242 7,874
============================= =========================== ====================================
STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHSED 30 JUNE
2017
Share Share Other Foreign Retained Total Non-controlling Total
Capital Premium Reserve Currency earnings interest equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 4,221 91,276 41 (3,607) (45,438) 46,493 261 46,754
Comprehensive
income
Profit for the
period - - - - (1,508) (1,508) 86 (1,422)
Other
comprehensive
income
Currency
translation
differences - - - 6,640 28 6,668 72 6,740
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Total
comprehensive
income - - - 6,640 (1,480) 5,160 158 5,318
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Transactions
with
owners
Proceeds from
shares
issued 422 4,117 - - - 4,539 - 4,539
Dividends to
non-controlling
interest - - - - - - (54) (54)
Share based
payments - - - - 55 55 - 55
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Total
contributions
by and
distributions
to owners 422 4,117 - - 55 4,594 (54) 4,540
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
At 30 June 2016 4,643 95,393 41 3,033 (46,863) 56,247 365 56,612
Comprehensive
income
Profit for the
period - - - - 1,490 1,490 101 1,591
Other
comprehensive
income
Currency
translation
differences - - - 2,576 (28) 2,548 55 2,603
Total
comprehensive
income - - - 2,576 1,462 4,038 156 4,194
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Transactions
with
owners
Share based
payments - - - - 165 165 - 165
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Total
contributions
by and
distributions
to owners - - - - 165 165 - 165
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
At 31 December
2016 4,643 95,393 41 5,609 (45,236) 60,450 521 60,971
Comprehensive
income
(Loss)/profit
for
the period - - - - (199) (199) 68 (131)
Other
comprehensive
income
Currency
translation
differences - - - (847) (68) (915) 36 (879)
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Total
comprehensive
income - - - (847) (267) (1,114) 104 (1,010)
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Transactions
with
owners
Dividends to
non-controlling
interest - - - - - - (215) (215)
Share based
payments - - - - (964) (964) - (964)
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
Total
contributions
by and
distributions
to owners - - - - (964) (964) (215) (1,179)
------------------- --------------- ------------ --------------- ------------- ------------ -------------------- ------------
At 30 June 2017 4,643 95,393 41 4,762 (46,467) 58,372 410 58,782
=================== =============== ============ =============== ============= ============ ==================== ============
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
EKF Diagnostics Holdings plc is a public limited company incorporated in the United Kingdom (Registration Number 04347937). The address of the registered office is Avon House, 19 Stanwell Road, Penarth, CF64 2EZ.
The Group's principal activity continues to be that of a business focused within the In-Vitro Diagnostics devices ("IVD") market place.
The financial information in these interim results is that of the holding company and all of its subsidiaries. It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2016 and which will form the basis of the 2017 financial statements except for a number of new and amended standards which have become effective since the beginning of the previous financial year. These new and amended standards are not expected to materially affect the Group with the exception of IFRS 15 "Revenue from contracts with customers" and IFRS 16 "Leases". The Group is continuing to review the potential effect of these standards.
The financial information presented herein does not constitute full statutory accounts under Section 434 of the Companies Act 2006 and was not subject to a formal review by the auditors. The financial information in respect of the year ended 31 December 2016 has been extracted from the statutory accounts which have been delivered to the Registrar of Companies. The Group's Independent Auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the half years ended 30 June 2017 and 30 June 2016 is unaudited and the twelve months to 31 December 2016 is audited.
These interim accounts have not been prepared in accordance with IAS 34.
2. Significant accounting policies
Going concern
The Group meets its day-to-day working capital requirements through the use of cash reserves and existing bank facilities. The Group has seen a substantial improvement in its cash position over the last 12 months.
The Directors have considered the applicability of the going concern basis in the preparation of these financial statements. This included the review of internal budgets and financial results which show, taking into account reasonably probable changes in financial performance, that the Group should be able to operate within the level of its current funding arrangements. The Directors believe that the Group has adequate resources to continue in operation for the future. For this reason they have adopted the going concern basis in the preparation of the financial statements.
Foreign currency translation
(a) Functional and presentational currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in British Pounds Sterling, which is the Company's functional and presentational currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement within 'administrative expenses'.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentational currency are translated into the presentational currency as follows:
-- assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
-- income and expenses for each income statement are translated at average exchange rates; and -- all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Government grants
Government grants receivable in connection with expenditure on property, plant and equipment are accounted for as deferred income, which is credited to the income statement over the expected useful economic life of the related assets, on a basis consistent with the depreciation policy. Revenue grants for the reimbursement of costs charged to the income statement are credited to the Income Statement in the year in which the costs are incurred.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any provision for impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the asset and bringing the asset to its working condition for its intended use.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only where it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Any borrowing costs associated with qualifying property plant and equipment are capitalised and depreciated at the rate applicable to that asset category.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method or reducing balances method to allocate their cost to its residual values over their estimated useful lives, as follows:
Buildings 2%-2.5% Fixtures and fittings 20%-25% Plant and machinery 20%-33.3% Motor vehicles 25%
The assets' residual values and useful economic lives are reviewed regularly, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying value is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on the disposal of assets are determined by comparing the proceeds with the carrying amount and are recognised in administration expenses in the income statement.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary at the date of the acquisition. Goodwill on acquisitions of subsidiaries is included in 'intangible assets'. Goodwill has an infinite useful life and is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment.
(b) Trademarks, trade names and licences
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licences over their estimated useful lives of between 8 and 12 years and is charged to administrative expenses in the income statement.
(c) Customer relationships
Contractual customer relationships acquired in a business combination are recognised at fair value at the acquisition date. The contractual customer relationships have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the expected life of the customer relationship of between 6 and 15 years and is charged to administrative expenses in the income statement.
(d) Trade secrets
Trade secrets, including technical know-how, operating procedures, methods and processes, acquired in a business combination are recognised at fair value at the acquisition date. Trade secrets have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trade secrets over their estimated useful lives of between 6 and 15 years and is charged to administrative expenses in the income statement.
(e) Development costs
Development costs acquired in a business combination are recognised at fair value at the acquisition date. Development costs have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over their estimated useful lives of 15 years and is charged to administrative expenses in the income statement.
Expenditure incurred on the development of new or substantially improved products or processes is capitalised, provided that the related project satisfies the criteria for capitalisation, including the project's technical feasibility and likely commercial benefit. All other research and development costs are expensed as incurred.
Development costs are amortised over the estimated useful life of the products with which they are associated, currently 4 to 5 years. Amortisation commences when a new product is in commercial production. The amortisation is charged to administrative expenses in the income statement. The estimated remaining useful lives of development costs are reviewed at least on an annual basis.
The carrying value of capitalised development costs is reviewed for potential impairment at least annually and if a product becomes unviable and an impairment is identified the deferred development costs are immediately charged to the income statement.
(f) Non-compete agreements
Non-compete agreements arising from a business combination are recognised at fair value at the acquisition date. Non-compete agreements have a finite life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of non-compete agreements over their estimated useful lives of three years and is charged to administrative expenses in the income statement.
Impairment of non-financial assets
Assets that have an indefinite life such as goodwill are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of the money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in the prior period. A reversal of an impairment loss is recognised in the income statement immediately. If goodwill is impaired however, no reversal of the impairment is recognised in the financial statements.
Investments
Investments where the Group does not have a controlling interest are initially recognised at cost. The carrying value is tested annually for impairment and an impairment loss is recognised for the amount by which the carrying amount exceeds its recoverable amount.
Financial assets
Classification
The Company classifies its financial assets in the following categories: loans and receivables and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired and management determines the classification of its financial assets at initial recognition.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets.
(b) Available-for-sale financial assets
Available-for-sale assets are non-derivatives that are either designated in this category or not classified as loans and receivables. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.
Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Company commits to purchase the asset. Assets are initially recognised at fair value plus transaction costs. Financial assets are derecognised when the risk and rewards of ownership have been transferred.
Loans and receivables are subsequently carried at amortised cost using the effective interest rate method.
Available-for-sale financial assets are subsequently carried at fair value. Gains and losses arising from changes in fair value are recognised in other comprehensive income until the asset is disposed at which time the cumulative gain or loss previously recognised in equity is included in the consolidated income statement for the period. If an available-for-sale investment is determined to be impaired, the cumulative loss previously recognised in equity is included in the income statement for the period.
Inventories
Inventories and work in progress are stated at the lower of cost and net realisable value. Cost is calculated on a first in and first out basis and includes raw materials, direct labour, other direct costs and attributable production overheads, where appropriate. Net realisable value represents the estimated selling price less all estimated costs of completion and applicable selling costs. Where necessary, provision is made for slow-moving and obsolete inventory. Inventory on consignment and their related obligations are recognised in current assets and payables respectively.
Trade and other receivables
Trade receivables are initially recognised at fair value, being the original invoice amount, and subsequently measured at amortised cost less provision for impairment. A provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. Trade receivables that are less than three months past due are not considered impaired unless there are specific financial or commercial reasons that lead management to conclude that the customer will default. Older debts are considered to be impaired unless there is sufficient evidence to the contrary that they will be settled. The amount of the provision is the difference between the asset's carrying value and the present value of the estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within administrative expenses. When a trade receivable is uncollectible it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against
administrative expenses in the income statement.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of less than three months, reduced by overdrafts to the extent that there is a right of offset against other cash balances.
For the purposes of the consolidated cash flow statement, cash and cash equivalents consist of cash and short-term deposits as defined above net of outstanding bank overdrafts where there is a right of offset.
Share capital
Ordinary Shares are classified as equity. Proceeds in excess of the nominal value of shares issued are allocated to the share premium account and are also classified as equity. Incremental costs directly attributable to the issue of new Ordinary Shares or options are deducted from the share premium account.
Financial liabilities
Debt is measured at fair value, being net proceeds after deduction of directly attributable issue costs, with subsequent measurement at amortised cost with the exception of deferred equity consideration which is categorised as a financial liability at fair value through profit and loss. Debt issue costs are recognised in the income statement over the expected term of such instruments at a constant rate on the carrying amount.
Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised initially at the fair value of proceeds received, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
Borrowing costs are expensed in the consolidated Group income statement under the heading 'finance costs'. Arrangement and facility fees together with bank charges are charged to the income statement under the heading 'administrative expenses'.
Current and deferred income tax
The tax expense comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income where the associated tax is also recognised in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is recognised, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised in respect of all temporary differences except where the deferred tax liability arises from the initial recognition of goodwill in business combinations.
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and tax losses, to the extent that they are regarded as recoverable. They are regarded as recoverable where, on the basis of available evidence, there will be sufficient taxable profits against which the future reversal of the underlying temporary differences can be deducted.
The carrying value of the amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all, or part, of the tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been substantively enacted at the balance sheet date.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Provisions
Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably measured.
Leases
Leases which transfer substantially all the risks and rewards of ownership of an asset are treated as a finance lease. Assets held under finance leases are capitalised at their fair value at the inception of the lease and depreciated over the estimated useful economic life of the asset or lease term if shorter. The finance charges are allocated to the income statement in proportion to the capital amount outstanding.
All other leases are classified as operating leases. Operating lease rentals are charged to the income statement in equal annual amounts over the lease term.
Deferred consideration
Deferred consideration is recognised at fair value. Where the value of deferred consideration is based on a future event, management estimate the likelihood of the consideration becoming payable. Deferred consideration is discounted to take account of the time value of money at rates based on those used for the valuation of related intangible assets.
Employee benefits
(a) Pension obligations
Group companies operate various pension schemes all of which are defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity with the pension cost charged to the income statement as incurred. The Group has no further obligations once the contributions have been paid.
The Group no longer has any defined benefit schemes.
(b) Share-based compensation
The Group operates a number of equity-settled, share-based compensation plans, under which the Group receives services from employees and others as consideration for equity instruments of the Group. Equity-settled share-based payments are measured at fair value at the date of grant and are expensed over the vesting period based on the number of instruments that are expected to vest. For plans where vesting conditions are based on share price targets, the fair value at the date of grant reflects these conditions. Where applicable the Group recognises the impact of revisions to original estimates in the income statement, with a corresponding adjustment to equity for equity-settled schemes. Fair values are measured using appropriate valuation models, taking into account the terms and conditions of the awards.
When the share-based payment awards are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.
The Group operates a cash-settled compensation plan for certain senior employees. Cash-settled share-based payments are measured at fair value at the date of grant and are expensed over the expected vesting period. The fair value amount is recognised in liabilities.
National insurance on share options
To the extent that the share price at the balance sheet date is greater than the exercise price on options granted under unapproved share-based payment compensation schemes, provision for any National Insurance Contributions has been based on the prevailing rate of National Insurance. The provision is accrued over the performance period attaching to the award.
Revenue recognition
(a) Sale of goods
Revenue for the sale of medical diagnostic instruments and reagents is measured at the fair value of the consideration received or receivable and represents the invoiced value for the sale of the goods net of sales taxes, rebates and discounts. Revenue from the sale of goods is recognised when a Group Company has delivered products to the customer, the customer has accepted delivery of the products and collectability of the related receivables is reasonably assured.
(b) Sale of services
Revenue for the sale of services is measured at the fair value of the consideration received or receivable and represents the invoiced value for the sale of the services net of sales taxes, rebates and discounts. Revenue from the sale of services is recognised when a Group Company has completed the services and collectability of the related receivables is reasonably assured.
(c) Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
(d) Royalty and licence income
Royalty and licence income is recognised on an accruals basis in accordance with the substance of the relevant agreements.
Dividend distribution
Dividend distributions to the Company's shareholders are recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders. Interim dividends are recognised when paid.
Other income
Other income includes grant income and R & D tax credits passed through income where this is permitted by the relevant jurisdiction.
Exceptional items
These are items of an unusual or non-recurring nature incurred by the Group and include transactional costs and one off items relating to business combinations, such as acquisition expenses.
3. Segmental reporting
Management has determined the Group's operating segments based on the monthly management reports presented to the Chief Operating Decision Maker ('CODM'). The CODM is the Executive Directors and the monthly management reports are used by the Group to make strategic decisions and allocate resources.
The principal activity of the Group is the design, development, manufacture and selling of diagnostic instruments, reagents and certain ancillary items. This activity takes place across various countries, such as the USA, Germany, Russia, and the United Kingdom, and as such the Board considers the business primarily from a geographic perspective. Although not all the segments meet the quantitative thresholds required by IFRS 8, management has concluded that all segments should be maintained and reported, given potential future growth of the segments.
The reportable segments derive their revenue primarily from the manufacture and sale of medical diagnostic equipment. Other services include the servicing and distribution of third party company products under separate distribution agreements.
Currently the key operating performance measures used by the CODM are Revenue and adjusted EBITDA.
The segment information provided to the Board for the reportable geographic segments is as follows:
Period ended 30 June 2017 unaudited
Germany USA Poland Russia Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Income statement
Revenue 10,358 11,822 224 1,140 (2,046) 21,498
Inter segment (2,029) - (17) - 2,046 -
External revenue 8,329 11,822 207 1,140 - 21,498
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Adjusted EBITDA 2,751 4,056 (122) 222 (2,330) 4,577
Share based
payment - - - - (894) (894)
Exceptional
items 16 - (200) - 207 23
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
EBITDA 2,767 4,056 (322) 222 (3,017) 3,706
Depreciation (369) (157) (16) (17) (34) (593)
Amortisation (225) 426 - - (1,619) (1,418)
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Operating
profit/(loss) 2,173 4,325 (338) 205 (4,670) 1,695
Net finance
costs (33) 380 13 (366) (272) (278)
Income tax (139) (4) (43) (1,026) (404) (1,616)
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Profit/(loss)
for the period 2,001 4,701 (368) (1,187) (5,346) (199)
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Segment assets
Operating
assets 50,237 49,206 319 491 (4,305) 95,948
Inter segment
assets (125) - (76) - (23,282) (23,483)
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
External operating
assets 50,112 49,206 243 491 (27,587) 72,465
Cash and cash
equivalents 1,302 2,210 282 830 1,095 5,719
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Total assets 51,414 51,416 525 1,321 (26,492) 78,184
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Segment liabilities
Operating
liabilities 14,460 22,099 319 233 4,491 41,602
Inter segment
liabilities (8,305) (15,320) - - 142 (23,483)
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
External operating
liabilities 6,155 6,779 319 233 4,633 18,119
Borrowings 1,132 151 - - - 1,283
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Total liabilities 7,287 6,930 319 233 4,633 19,402
--------------------------- ------------ ------------- ------------ ------------ ------------- -------------
Other segmental
information
Non-current
assets - PPE 6,492 4,289 - 53 1,262 12,096
Non-current
assets - Intangibles 29,189 14,457 - 135 1,384 45,165
Intangible
assets -additions 221 67 - - 251 539
PPE - additions 575 137 (9) 1 13 717
Year ended December 2016 audited
Germany USA Poland Russia Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Income statement
Revenue 17,835 21,199 1,582 2,677 33 43,326
Inter segment (4,683) 1 (33) - (22) (4,737)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
External revenue 13,152 21,200 1,549 2,677 11 38,589
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Adjusted EBITDA* 3,074 6,136 908 599 (4,578) 6,139
Share based
payment - - - - (973) (973)
Exceptional
items (28) (525) - - 21 (532)
EBITDA 3,046 5,611 908 599 (5,530) 4,634
Depreciation (678) (405) (33) (27) (66) (1,209)
Amortisation (2,063) (1,519) (61) (29) (80) (3,752)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Operating profit/(loss) 305 3,687 814 543 (5,676) (327)
Net finance
costs (47) (155) 6 29 (509) (676)
Income tax 225 1,245 (157) (126) (15) 1,172
Profit/(loss)
for the year 483 4,777 663 446 (6,200) 169
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Segment assets
Operating assets 43,199 30,170 1,504 623 37,570 113,066
Inter-segment
assets (125) (3,870) (528) - (33,985) (38,508)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
External operating
assets 43,074 26,300 976 623 3,585 74,558
Cash and cash
equivalents 1,803 2,192 229 959 2,691 7,874
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Total assets 44,877 28,492 1,205 1,582 6,276 82,432
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Segment liabilities
Operating liabilities 17,277 27,463 82 137 9,290 54,249
Inter-segment
liabilities (10,490) (22,082) - - (5,934) (38,506)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
External operating
liabilities 6,787 5,381 82 137 3,356 15,743
Borrowings 1,191 195 - - 4,332 5,718
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Total liabilities 7,978 5,576 82 137 7,688 21,461
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Other segmental
information
Non-current
assets - PPE 5,898 4,538 106 71 1,511 12,124
Non-current
assets - Intangibles 29,351 15,555 329 151 1,117 46,503
Intangible
assets -additions 1,058 169 - 7 27 1,261
PPE - additions 285 308 - - 70 663
Period ended 30 June 2016 unaudited
Germany USA Poland Russia Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Income statement
Revenue 8,475 9,385 695 1,174 (2,222) 17,507
Inter segment (2,132) 3 (14) - 2,143 -
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
External revenue 6,343 9,388 681 1,174 (79) 17,507
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Adjusted EBITDA* 1,726 2,413 390 274 (2,784) 2,019
Share based
payment - - - - (55) (55)
Exceptional
items 20 (69) - - (338) (387)
EBITDA 1,746 2,344 390 274 (3,177) 1,577
Depreciation (296) (208) (16) (12) (33) (565)
Amortisation (329) - - - (1,593) (1,922)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Operating profit/(loss) 1,121 2,136 374 262 (4,803) (910)
Net finance
costs (14) 330 12 (397) (213) (282)
Income tax 120 177 (48) (441) (38) (230)
Discontinued - - - - - -
operations
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Profit/(loss)
for the year 1,227 2,643 338 (576) (5,054) (1,422)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Segment assets
Operating assets 50,245 50,755 1,263 633 13,747 116,643
Inter-segment
assets (635) (2,659) (180) - (37,540) (41,014)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
External operating
assets 49,610 48,096 1,083 633 (23,793) 75,629
Cash and cash
equivalents 210 1,304 38 563 1,127 3,242
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Total assets 49,820 49,400 1,121 1,196 (22,666) 78,871
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Segment liabilities
Operating liabilities 16,127 25,339 108 148 19,245 60,967
Inter-segment
liabilities (10,701) (20,611) - - (14,913) (46,225)
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
External operating
liabilities 5,426 4,728 108 148 4,332 14,742
Borrowings 1,371 2,023 - - 4,123 7,517
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Total liabilities 6,797 6,751 108 148 8,455 22,259
----------------------------- ------------- ------------- ------------ ------------ ------------- -------------
Other segmental
information
Non-current
assets - PPE 5,778 4,373 118 72 1,637 11,978
Non-current
assets - Intangibles 34,382 15,266 322 148 (3,340) 46,778
Intangible
assets -additions (50) - - - - (50)
PPE - additions 713 67 - 1 16 797
*- Adjusted EBITDA excludes exceptional items and share based payments
'Other' primarily relates to the holding company and head office costs.
Disclosure of Group revenues by geographic location
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
GBP000 GBP000 GBP000
Americas
United States of America 8,721 6,642 15,122
Rest of Americas 1,524 1,785 3,979
Europe, Middles East and Africa
(EMEA)
Germany 3,300 2,668 6,082
United Kingdom 159 126 276
Rest of Europe 1,879 1,357 2,761
Russia 1,140 1,184 2,687
Middle East 1,679 1,322 2,870
Africa 962 467 882
Rest of World
China 563 486 929
Rest of Asia 1,499 1,422 2,922
New Zealand/Australia 72 48 79
--------------- --------------- -----------------
Total Revenue 21,498 17,507 38,589
=============== =============== =================
4. Exceptional items
Included within administration expenses (and cost of sales) are exceptional items as shown below:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Note GBP000 GBP000 GBP000
Exceptional items includes:
- Business reorganisation
costs a (200) (407) (661)
- Warranty claim b 223 20 129
Exceptional items 23 (387) (532)
-------------- -------------- -----------------
(a) Costs associated with the closure of STI, the transfer of production of Quo-Test and Quo-Lab from the UK to Germany, the mothballing of EKF Molecular, and with the closure of the Group's Dublin facility
(b) Warranty claim in relation to the acquisition of EKF-diagnostic GmbH
5. Income tax
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
GBP000 GBP000 GBP000
Current tax
Current tax on profit/loss
for the period (1,414) (681) (1,602)
Adjustments for prior periods - - 2,219
--------------- --------------- -----------------
Total current tax (1,414) (681) 617
--------------- --------------- -----------------
Deferred tax
Origination and reversal of
temporary differences (212) 451 555
Total deferred tax (212) 451 555
--------------- --------------- -----------------
Income tax (charge)/credit (1,626) (230) 1,172
=============== =============== =================
6. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period.
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding assuming conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary share, being share options. The potential shares are not dilutive in either H1 2017 or in H1 or FY 2016 as the Group made a loss per share.
Unaudited Unaudited Audited
year ended
31 December
2016
6 months 6 months
ended 30 ended
June 2017 30 June
2016
GBP'000 GBP'000 GBP'000
Loss attributable to owners
of the parent (267) (1,508) (18)
Weighted average number of
ordinary shares in issue 464,262,781 428,782,159 446,042,831
Effect of dilutive potential
ordinary shares 9,205,976 4,043,940 4,043,940
-----------------
Weighted average number of
ordinary shares - diluted 473,468,757 432,826,099 450,086,771
------------------ -----------------
Pence Pence Pence
Basic
Loss per share (0.06) (0.35) (0.00)
---------------- ------------------ -----------------
Pence Pence Pence
Diluted
Loss per share (0.06) (0.35) (0.00)
---------------- ------------------ -----------------
7. Intangible Fixed Assets
Group
Trademarks
trade
names & Customer Trade Develop-ment
Goodwill licences Non-compete relationships secrets costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ---------------- ---------------- ------------------ ------------- ------------------ -------------
Cost
At 1 January 2016 23,718 2,493 70 13,815 16,878 7,782 64,756
Additions - 36 - - - 363 399
Exchange differences 2,456 996 - 1,672 1,417 390 6,931
At 30 June 2016 26,174 3,525 70 15,487 18,295 8,535 72,086
Additions - 9 - - - 255 264
Exchange differences 863 (482) - 889 330 (5) 1,595
At 31 December 2016 27,037 3,052 70 16,376 18,625 8,785 73,945
Additions - 113 - - - 426 539
Reclassification/transfer - - - - - 360 360
Exchange differences 37 (45) - (354) 255 139 32
------------ ---------------- ---------------- ------------------ ------------- ------------------ ---------------------
At 30 June 2017 27,074 3,120 70 16,022 18,880 9,710 74,876
------------ ---------------- ---------------- ------------------ ------------- ------------------ ---------------------
Amortisation
At 1 January 2016 2,082 1,378 70 4,555 8,866 4,878 21,829
Exchange differences 122 234 - 542 531 129 1,558
Charge for the period - 437 - 695 469 320 1,921
------------ ---------------- ---------------- ------------------ ------------- ------------------ ---------------------
At 30 June 2016 2,204 2,049 70 5,792 9,866 5,327 25,308
Exchange differences 24 (47) - 301 123 (98) 303
Charge for the period - (105) - 723 605 608 1,831
At 31 December 2016 2,228 1,897 70 6,816 10,594 5,837 27,442
Exchange differences 30 (16) - (126) 114 488 490
Reclassification/transfer - - - - - 360 360
Charge for the period 333 157 - 662 453 (186) 1,419
------------ ---------------- ---------------- ------------------ ------------- ------------------ ---------------------
At 30 June 2017 2,591 2,038 70 7,352 11,161 6,499 29,711
------------ ---------------- ---------------- ------------------ ------------- ------------------ ---------------------
Net book value
30 June 2017 24,483 1,082 - 8,670 7,719 3,211 45,165
----------- ---------- ------ ---------- ---------- ---------- -----------
31 December 2016 24,809 1,155 - 9,560 8,031 2,948 46,503
----------- ---------- ------ ---------- ---------- ---------- -----------
30 June 2016 23,970 1,476 - 9,695 8,429 3,208 46,778
----------- ---------- ------ ---------- ---------- ---------- -----------
8. Dividends
No dividends to shareholders of the holding company were provided or paid during the six months to 30 June 2017 (to 30 June 2016 and 31 December 2016: GBPnil).
9. Press
A copy of this announcement is available from the Company's website, being www.ekfdiagnostics.com. If you would like to receive a hard copy of the interim report please contact the EKF Diagnostics Holdings plc offices on +44 (0) 29 2071 0570 to request a copy.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BDGDCGDBBGRG
(END) Dow Jones Newswires
September 11, 2017 02:00 ET (06:00 GMT)
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