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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Healthcare Ent. | LSE:HCEG | London | Ordinary Share | GB00B6030H73 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 20.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMHCEG
RNS Number : 5709E
Healthcare Enterprise Group PLC
23 December 2009
Healthcare Enterprise Group plc
Final results
Healthcare Enterprise Group plc (AIM: HCEG, "HCEG", the "Group", the "Company"),
the international healthcare products group, today reports results for the year
ended 30 June 2009.
Highlights (12 month period 2009, 16 month period 2008)
* Turnover from continuing operations GBP0.5m (2008: GBP0.8m)
* Normal net operating expenses GBP1.5m (2008: GBP2.4m)
* Operating loss before exceptional items GBP1.3m (2008: Loss GBP2.1m)
* Net loss for the period was GBP2.3m (2008: Loss GBP20.0m)
* Loss per share 0.5p (2007: Loss 6.4p)
John Gunn, Chairman, said:
"The year under review was one of further significant change for Healthcare
Enterprise Group plc ("HCEG"), as the Group engaged in a process of refinancing
whereby certain significant liabilities, including secured loan stock and
convertible unsecured loan stock, were converted into a combination of equity in
HCEG and HCEG's underlying investments in Ebiox Limited ("Ebiox"), Reproductive
Sciences Limited ("RSL") and First Aid Holdings Limited ("FAH"). This
refinancing exercise announced on 19 June 2009 was approved by shareholders in
general meeting on 15 July 2009."
"Following the approval by shareholders of the refinancing exercise, the Company
became an "investing company" under AIM rule 15.
The Company's Investing Policy, following approval by shareholders of the
refinancing exercise, is to seek complimentary acquisitions in the healthcare
market. The Company intends to focus on the healthcare and wellness markets and
act as a consolidator of smaller quoted and unquoted companies in that sector.
With its established shareholder base, access to institutional and private
funding and its experienced team, the Directors believe that the Company is well
placed to expand by acquiring smaller businesses which have good products or
services but which lack the critical mass to gain significant market entry. The
creation of a larger listed entity will allow entrepreneurs and business
managers the opportunity to combine with a larger entity to provide both
diversification of risk and economies of scale.
The Directors anticipate that for its immediate future, the Group will operate
as a holding company for its investments with substantially reduced overheads.
Any ongoing capital requirement of the Group will be funded through further
fundraisings or further partial or full realisations of the Group's existing
investments. Notwithstanding the current economic climate and the existing
financial constraints upon the Group, the Directors remain convinced that the
Company has a number of valuable investments in exciting niches of the
healthcare market."
Enquiries:
Healthcare Enterprise Group plc 020 7680 3649
Lyndon Gaborit, Executive Deputy Chairman
Daniel Stewart 020 7776 6550
Graham Webster/Stewart Dickson
Chairman's statement
I present the results for the year ended 30 June 2009.
The year under review was one of further significant change for Healthcare
Enterprise Group plc ("HCEG"), as the Group engaged in a process of refinancing
whereby certain significant liabilities, including secured loan stock and
convertible unsecured loan stock, were converted into a combination of equity in
HCEG and HCEG's underlying investments in Ebiox Limited ("Ebiox"), Reproductive
Sciences Limited ("RSL") and First Aid Holdings Limited ("FAH"). This
refinancing exercise announced on 19 June 2009 was approved by shareholders in
general meeting on 15 July 2009.
The refinancing exercise has helped to reduce the Group's current indebtedness
to a level that the Directors consider to be more manageable. The Capitalisation
will also reduce the Group's funding obligations in respect of and the Group's
interests in, RSL and Ebiox, although the Group will remain materially
interested in the future performance of these companies. Following the
refinancing exercise the holding in FAH has been reduced to 9% and it is the
board's intention to sell the remaining stake in FAH at the appropriate time.
Ebiox Limited
In September 2008, the Company announced that Ebiox had secured the services of
Mr. John Honey, former senior VP with Reckitt Benckiser plc as Executive
Chairman.
On 4 June 2009, the Company announced that Ebiox had witnessed a surge in demand
following the outbreak of swine flu, and that the Ebiox management team, headed
by John Honey, was keen to take advantage of the flow of new orders.
Accordingly, the Ebiox board determined that the best way for Ebiox to raise new
funds (whilst the Company was still finalising its own restructuring) was to
undertake a fundraising exercise directly. Subscriptions for GBP700,000
representing 37% of the enlarged share capital of Ebiox were received, of which
GBP100,000 was repaid to the Company in the form of management fees. The Ebiox
board believes that the balance of funds available to it should leave Ebiox
adequately funded for the short and medium term. On 15 July, the Company
subsequently announced that it had sold 39% of its equity in Ebiox to partly
repay secured loan stock holders, convertible loan stock holders and other
lenders.
It is hoped that, with the injection of new funds (as mentioned above), and the
introduction of Mr. Nigel Wray to its board of directors, Ebiox will be able to
achieve additional sales such as those which have now been contracted to Great
Ormond Street Hospital under the Ebiox brand, and generate further revenue by
distributing additional complimentary non-proprietary products.
Reproductive Sciences Limited (RSL)
RSL is currently focussed on Fertiligent's "Evie" product, a high quality, low
cost intrauterine sperm pump to help assist infertile couples conceive. For a
marginal price increase, Fertiligent offers infertile couples a dramatically
enhanced IUI success rate and the chance of avoiding invasive and costly
artificial reproductive techniques such as in vitro fertilisation.
At the 30 June 2009 RSL owned 35% of the issued capital in the Israeli company
Fertiligent Limited, with options to increase that holding to 65% of the fully
diluted capital. RSL also owns the exclusive, worldwide sale & marketing rights
to Fertiligent's products.
A two-centre clinical study already conducted in Germany and Israel demonstrated
that the Fertiligent "Evie" product increases the IUI success rate by a factor
of 2.7, from 6% to 16%. A further clinical trial (supervised by Professor Martha
Dirnfeld an acknowledged leader in the field) is currently being conducted at
the Carmel Medical Centre, Israel. Professor Dirnfeld is also a medical
consultant to the London Bridge Clinic. Data from these trials will be used to
support market entry in Europe, the US and in selected Asian and Latin American
countries.
The Fertiligent "Evie" product is the first and only CE-approved slow release
IUI device. The company received CE Mark clearance in Q2 2007 and has submitted
an application to the US FDA in Q3 2008. FDA approval is expected in 2010.
Once the product has received acceptable trial results (defined as not less than
bolus IUI pregnancy rates), RSL and Fertiligent will initiate a global
commercialisation plan, including contract manufacture in the US, with the aim
of commencing sales in 2010.
As announced on 27 April 2009, RSL raised an additional US$100,000
(approximately GBP70,000) by the sale of a 25% equity stake to persons
associated with Nigel Wray, this reduced the Group's interest to 75%. Those
funds were necessary to meet RSL's working capital requirements and to fund
Fertiligent's FDA application. In order to achieve its commercial objectives,
RSL will be required to raise additional capital, and the Company is currently
involved in discussions with various potential new investors. On 15 July, the
Company subsequently announced that it had sold 31% of its equity in RSL to
partly repay secured loan stock holders, convertible loan stock holders and
other lenders.
Outlook
Following the approval by shareholders of the refinancing exercise, the Company
became an "investing company" under AIM rule 15.
The Company's Investing Policy, following approval by shareholders of the
refinancing exercise, is to seek complimentary acquisitions in the healthcare
market. The Company intends to focus on the healthcare and wellness markets and
act as a consolidator of smaller quoted and unquoted companies in that sector.
With its established shareholder base, access to institutional and private
funding and its experienced team, the Directors believe that the Company is well
placed to expand by acquiring smaller businesses which have good products or
services but which lack the critical mass to gain significant market entry. The
creation of a larger listed entity will allow entrepreneurs and business
managers the opportunity to combine with a larger entity to provide both
diversification of risk and economies of scale.
The Directors anticipate that for its immediate future, the Group will operate
as a holding company for its investments with substantially reduced overheads.
Any ongoing capital requirement of the Group will be funded through further
fundraisings or further partial or full realisations of the Group's existing
investments. Notwithstanding the current economic climate and the existing
financial constraints upon the Group, the Directors remain convinced that the
Company has a number of valuable investments in exciting niches of the
healthcare market.
JH Gunn
Chairman
22 December 2009
Healthcare Enterprise Group plc
Consolidated income statement
for the year ended 30 June 2009
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | Group | | | | Group | | Group | | | | Group | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | before | Exceptional | | after | | before | Exceptional | | after | |
+----------------+----------+---------------------+---------------------+----------+----------+----------+----------+---------------------+----------+----------+----------+
| | | exceptional | items | exceptional | exceptional | | items | exceptional | |
+----------------+----------+---------------------+---------------------+---------------------+---------------------+----------+----------+---------------------+----------+
| | | | items | | (note | | items | | items | | (note | items | |
| | | | | | 3) | | | | | | 3) | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+---------------------+----------+
| | | | Year to | Year to | | Year | | 16 | | 16 | 16 months | |
| | | | | | | to | | months | | months | | |
+----------------+----------+----------+----------+---------------------+----------+----------+----------+----------+----------+----------+---------------------+----------+
| | | | 30 June | 30 June | | 30 | to 30 June | to 30 June to 30 June | |
| | | | | | | June | | | |
+----------------+----------+----------+----------+---------------------+----------+----------+---------------------+-------------------------------------------+----------+
| | | | 2009 | | 2009 | | 2009 | | 2008 | | 2008 | | 2008 | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Continuing | Notes | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | |
| operations | | | | | | | | | | | | | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Revenue | 2 | 524 | | - | | 524 | | 793 | | - | | 793 | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Cost of | | | (319) | | - | | (319) | | (413) | | - | | (413) | |
| Sales | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Gross | | | 205 | | - | | 205 | | 380 | | - | | 380 | |
| profit | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Administrative | 3 | (1,533) | | (693) | | (2,226) | | (2,444) | | (10,966) | | (13,410) | |
| expenses | | | | | | | | | | | | | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Operating | 2 | (1,328) | | (693) | | (2,021) | | (2,064) | | (10,966) | | (13,030) | |
| loss | | | | | | | | | | | | | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Finance | | (256) | | - | | (256) | | (233) | | - | | (233) | |
| costs | | | | | | | | | | | | | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Loss | | | (1,584) | | (693) | | (2,277) | | (2,297) | | (10,966) | | (13,263) | |
| before | | | | | | | | | | | | | | |
| tax | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Income | | - | | - | | - | | - | | - | | - | |
| tax | | | | | | | | | | | | | |
| expense | | | | | | | | | | | | | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Loss for | | | | | | | | | | | | | | |
| the | | | | | | | | | | | | | | |
| period | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| from continuing operations | (1,584) | | (693) | | (2,277) | | (2,297) | | (10,966) | | (13,263) | |
+--------------------------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Discontinued | 3 | - | | - | | - | | (1,886) | | (4,804) | | (6,690) | |
| operations | | | | | | | | | | | | | |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Loss for | | | (1,584) | | (693) | | (2,277) | | (4,183) | | (15,770) | | (19,953) | |
| the | | | | | | | | | | | | | | |
| period | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Attributable | | | | | | | | | | | | | | |
| to: | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Equity holders of the parent | (1,584) | | (693) | | (2,277) | | (4,116) | | (15,770) | | (19,886) | |
+--------------------------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Minority | | | - | | - | | - | | (67) | | - | | (67) | |
| interest | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | (1,584) | | (693) | | (2,277) | | (4,183) | | (15,770) | | (19,953) | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Loss per | | | | | | | | | | | | | | |
| share | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| From continuing operations: | | | | | | | | | | | |
+-------------------------------------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Basic | 4 | | | | | (0.5) | p | | | | | (4.2) | p |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Diluted | 4 | | | | | (0.5) | p | | | | | (4.2) | p |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | | | |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| From continuing and | | | | | | | | | |
| discontinued operations: | | | | | | | | | |
+-----------------------------------------------------------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Basic | 4 | | | | | (0.5) | p | | | | | (6.4) | p |
+----------------+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Diluted | 4 | | | | | (0.5) | p | | | | | (6.4) | p |
+----------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
Healthcare Enterprise Group plc
Balance sheets
as at 30 June 2009
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | Group | | Group | | Company | | Company |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | 2009 | | 2008 | | 2009 | | 2008 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Assets |Notes | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Non-current assets | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Property, plant & | | | 14 | | 41 | | 13 | | 16 |
| equipment | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Goodwill | | | 2,084 | | 3,300 | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Other intangible assets | | | 440 | | 534 | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Investments in | | | - | | - | | 4,290 | | 4,325 |
| subsidiaries | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Available for sale | | | 1,016 | | 2,164 | | 651 | | 1,780 |
| investments | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | 3,554 | | 6,039 | | 4,954 | | 6,121 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Current assets | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Inventories | | | 19 | | 36 | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Trade and other | | | 423 | | 357 | | 266 | | 1,807 |
| receivables | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Cash and cash | | | 375 | | 47 | | 80 | | 22 |
| equivalents | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | 817 | | 440 | | 346 | | 1,829 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Total assets | 2 | | 4,371 | | 6,479 | | 5,300 | | 7,950 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Current liabilities | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Loans and borrowings | 5 | | (751) | | (549) | | (751) | | (549) |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Trade and other payables | | | (1,764) | | (1,706) | | (3,105) | | (3,191) |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Current tax payable | | | - | | - | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | (2,515) | | (2,255) | | (3,856) | | (3,740) |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Non-current liabilities | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Loans and borrowings | 5 | | (2,054) | | (1,900) | | (2,054) | | (1,900) |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Other payables | | | - | | (14) | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | (2,054) | | (1,914) | | (2,054) | | (1,900) |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Net liabilities/assets | 2 | | (198) | | 2,310 | | (610) | | 2,310 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Equity attributable to | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| the equity holders of the parent | | | | | | | | |
+----------------------------------+----+----------+--+----------+-------+----------+--+----------+
| Ordinary shares | | | 439 | | 339 | | 439 | | 339 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Share premium | | | 42,273 | | 42,088 | | 48,472 | | 48,287 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Deferred shares | | | 8,371 | | 8,371 | | 8,371 | | 8,371 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Retained earnings | | | (50,662) | | (47,736) | | (60,467) | | (57,262) |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Translation reserve | | | (68) | | (68) | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Other reserves | | | (684) | | (684) | | 2,575 | | 2,575 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | (331) | | 2,310 | | (610) | | 2,310 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Minority interest | | | 133 | | - | | - | | - |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| | | | | | | | | | |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
| Total equity | | | (198) | | 2,310 | | (610) | | 2,310 |
+--------------------------+-------+----+----------+--+----------+-------+----------+--+----------+
The financial statements were approved and authorised for issue by the Board of
Directors on 22 December 2009.
GP Ffoulkes-Davies
Director
Healthcare Enterprise Group plc
Cash flow statements
for the year ended 30 June 2009
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | Group | | Group | | Company | | Company |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | Year | | 16 months | | Year | | 16 months |
| | | | to | | | | to | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | 30 | | to 30 | | 30 | | to 30 |
| | | | June | | June | | June | | June |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | Notes | 2009 | | 2008 | | 2009 | | 2008 |
+------------------------------------+-------+---------+--+-----------+-----+---------+--+-----------+
| Cash flows from operating | | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
| activities | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Operating loss | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - continuing operations | | | (2,021) | | (13,030) | | (3,205) | | (29,705) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - discontinued operations (see | | | - | | (6,628) | | - | | - |
| note 3) | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - exceptional operating costs | | | 693 | | 15,770 | | 2,142 | | 28,216 |
| charged | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Total group operating loss before | | | (1,328) | | (3,888) | | (1,063) | | (1,489) |
| exceptional items | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Cash payments in respect of | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| exceptional costs and provisions | | | - | | (789) | | - | | (441) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Depreciation and amortisation | | | 77 | | 209 | | 3 | | 24 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Decrease in working capital | | | 295 | | 2,576 | | 103 | | 965 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Other | | | - | | 32 | | - | | 24 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Net cash from operations | | | (956) | | (1,860) | | (957) | | (917) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Interest paid | | | - | | (295) | | - | | (233) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Net cash from operating activities | | | (956) | | (2,155) | | (957) | | (1,150) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Cash flows from investing | | | | | | | | | |
| activities | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Purchase of plant and equipment | | (2) | | (69) | | (1) | | (3) |
+------------------------------------+-------+---------+--+-----------+-----+---------+--+-----------+
| Proceeds from sale of business | | | 436 | | 437 | | - | | 462 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Purchase of other investments | | | (150) | | (111) | | - | | - |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Proceeds from sale of other | | | 615 | | 180 | | 567 | | 180 |
| investments | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Net cash from investing activities | | | 899 | | 437 | | 566 | | 639 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Cash flows from financing | | | | | | | | | |
| activities | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Net proceeds from issue of | | | 285 | | - | | 285 | | - |
| ordinary share capital | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Debt due within one year | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - repayment of sterling borrowings | | | - | | (1,500) | | - | | (1,500) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - issue of sterling borrowings | | | - | | 500 | | - | | 500 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Debt due after more than one year | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - net movements on long term | | | - | | 1,750 | | - | | 1,750 |
| facilities | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| - other | | | 100 | | 300 | | 100 | | 300 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Inception of finance leases | | | - | | 26 | | - | | - |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Finance lease principal repayments | | | - | | (1) | | - | | (1) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Amounts received by subsidiaries | | | - | | - | | 64 | | (918) |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Net cash from financing activities | | | 385 | | 1,075 | | 449 | | 131 |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Net increase in cash and cash | | | 328 | | (643) | | 58 | | (380) |
| equivalents | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Cash and cash equivalents at 1 | | | 47 | | 690 | | 22 | | 402 |
| July/1 March | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| | | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
| Cash and cash equivalents at 30 | | 375 | | 47 | | 80 | | 22 |
| June | | | | | | | | |
+------------------------------------+----+--+---------+--+-----------+-----+---------+--+-----------+
Healthcare Enterprise Group plc
Statements of changes in equity
for the year ended 30 June 2009
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | Attributable to equity shareholders of the parent | | |
+--------+----------------+----------------------------------------------------------------------------------------+----------+----------+
| | | Issued | Shares | Share | Deferred | Other | Translation | Retained | | Minority | Total |
| | | | to | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Group | capital | be | premium | shares | reserves | reserve | earnings | Total | interest | equity |
| | | | issued | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | At 28 | 7,555 | 271 | 42,065 | 746 | (903) | (58) | (27,850) | 21,826 | 57 | 21,883 |
| | February | | | | | | | | | | |
| | 2007 | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Exchange | - | - | - | - | - | (10) | - | (10) | - | (10) |
| | losses | | | | | | | | | | |
| | offset | | | | | | | | | | |
| | in | | | | | | | | | | |
| | reserves | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Net | - | - | - | - | - | (10) | - | (10) | - | (10) |
| | income | | | | | | | | | | |
| | recognised | | | | | | | | | | |
| | directly | | | | | | | | | | |
| | in equity | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Loss | - | - | - | - | - | - | (19,886) | (19,886) | (67) | (19,953) |
| | for | | | | | | | | | | |
| | the | | | | | | | | | | |
| | period | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Total | - | - | - | - | - | (10) | (19,886) | (19,896) | (67) | (19,963) |
| | recognised | | | | | | | | | | |
| | expense | | | | | | | | | | |
| | for the | | | | | | | | | | |
| | year | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Issue | 409 | (271) | 23 | - | - | - | - | 161 | - | 161 |
| | of | | | | | | | | | | |
| | shares | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Share | - | - | - | - | 75 | - | - | 75 | - | 75 |
| | based | | | | | | | | | | |
| | payments | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Capital | (7,625) | - | - | 7,625 | - | - | - | - | - | - |
| | reorganisation | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Equity | - | - | - | - | 144 | - | - | 144 | - | 144 |
| | element | | | | | | | | | | |
| | of | | | | | | | | | | |
| | convertible | | | | | | | | | | |
| | debt | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Disposal | - | - | - | - | - | - | - | - | 10 | 10 |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | At 30 | 339 | - | 42,088 | 8,371 | (684) | (68) | (47,736) | 2,310 | - | 2,310 |
| | June | | | | | | | | | | |
| | 2008 | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Loss | - | - | - | - | - | - | (2,277) | (2,277) | - | (2,277) |
| | for | | | | | | | | | | |
| | the | | | | | | | | | | |
| | year | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Total | - | - | - | - | - | - | (2,277) | (2,277) | - | (2,277) |
| | recognised | | | | | | | | | | |
| | expense | | | | | | | | | | |
| | for the | | | | | | | | | | |
| | year | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Issue | 100 | - | 185 | - | - | - | - | 285 | - | 285 |
| | of | | | | | | | | | | |
| | shares | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Dilution | - | - | - | - | - | - | (649) | (649) | 133 | (516) |
| | of | | | | | | | | | | |
| | interest | | | | | | | | | | |
| | in | | | | | | | | | | |
| | subsidiary | | | | | | | | | | |
| | undertakings | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | At 30 | 439 | | 42,273 | 8,371 | (684) | (68) | (50,662) | (331) | 133 | (198) |
| | June | | | | | | | | | | |
| | 2009 | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | Issued | Sharesto | Share | Deferred | Other | Retained | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Company | capital | beissued | premium | shares | reserves | earnings | Total | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | At 28 | 7,555 | 271 | 48,264 | 746 | 2,356 | (27,324) | 31,868 | | | |
| | February | | | | | | | | | | |
| | 2007 | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Loss | - | - | - | - | - | (29,938) | (29,938) | | | |
| | for | | | | | | | | | | |
| | the | | | | | | | | | | |
| | period | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Total | - | - | - | - | 144 | (29,938) | (29,794) | | | |
| | recognised | | | | | | | | | | |
| | expense | | | | | | | | | | |
| | for the | | | | | | | | | | |
| | year | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Issue | 409 | (271) | 23 | - | - | - | 161 | | | |
| | of | | | | | | | | | | |
| | shares | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Share | - | - | - | - | 75 | - | 75 | | | |
| | based | | | | | | | | | | |
| | payments | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Capital | (7,625) | - | - | 7,625 | - | - | - | | | |
| | reorganisation | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Equity | - | - | - | - | 144 | - | 144 | | | |
| | element | | | | | | | | | | |
| | of | | | | | | | | | | |
| | convertible | | | | | | | | | | |
| | debt | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | At 30 | 339 | - | 48,287 | 8,371 | 2,575 | (57,262) | 2,310 | | | |
| | June | | | | | | | | | | |
| | 2008 | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Loss | - | - | - | - | - | (3,205) | (3,205) | | | |
| | for | | | | | | | | | | |
| | the | | | | | | | | | | |
| | year | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Total | - | - | - | - | - | (3,205) | (3,205) | | | |
| | recognised | | | | | | | | | | |
| | expense | | | | | | | | | | |
| | for the | | | | | | | | | | |
| | year | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Issue | 100 | - | 185 | - | - | - | 285 | | | |
| | of | | | | | | | | | | |
| | shares | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | Share | - | - | - | - | - | - | - | | | |
| | based | | | | | | | | | | |
| | payments | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | At 30 | 439 | - | 48,472 | 8,371 | 2,575 | (60,467) | (610) | | | |
| | June | | | | | | | | | | |
| | 2009 | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
| | | | | | |
+--------+----------------+---------+----------+---------+----------+----------+-------------+----------+----------+----------+----------+
Healthcare Enterprise Group plc
Notes to the financial statements
for the year ended 30 June 2009
1. Principal Accounting Policies
(a) Basis of preparation
The consolidated financial statements of Healthcare Enterprise Group plc for the
year ended 30 June 2009 were authorised for issue by the Directors on 22
December 2009. The financial information contained in these financial statements
is derived from those financial statements. The financial information in this
document does not constitute the Group's statutory accounts for the year ended
30 June 2009 or for the year ended 30 June 2008, but is derived from those
accounts. Statutory accounts for 2008 have been delivered to the Registrar of
Companies and those for 2009 will shortly be delivered. The auditors report on
the prior year accounts was unqualified and did not contain statements under
sections 237 (2) or (3) of the Companies Act 1985 but did contain an emphasis of
matter paragraph regarding the going concern basis of preparation. The auditors
have reported on the current period accounts and their report did not contain
statements under sections 498 of the Companies Act 2006. Their report was
unqualified but did include an emphasis of matter paragraph
as follows:
Emphasis of matter - going concern
In forming our opinion
on the financial statements, which is not qualified, we have considered the
adequacy of the disclosures made in note 1 to the financial statements
concerning the group's and company's ability to continue as a going concern.
In July 2009 the group completed a re-financing whereby GBP3,268,110 of
indebtedness was converted into a combination of equity in HCEG plc, Ebiox
Limited, Reproductive Sciences Limited and First Aid Holdings Limited. Given the
Group's continuing losses however, further funding will be required to meet the
Group's continuing operating costs and liabilities.
Going forwards the
Group expects to function as an investment holding company with a minimal
overhead base which will be funded through small fund-raising exercises, the
first of which was completed in November 2009, and the further realisation of
the Group's investments. The Group is reliant upon raising these funds to meet
its ongoing liabilities as they fall due. The directors have a reasonable
expectation that shareholders will support the business through additional
funding or further asset realisations. However, the raising of these additional
funds is not certain. Should the Group be unable to raise these funds, it may
not be able to meet its ongoing operating costs and liabilities.
These
conditions , along with the matters disclosed in note 1 to the financial
statements indicate the existence of a material uncertainty which may cast
significant doubt about the Group's and Company's ability to continue as a going
concern. The financial statements do not include the adjustments that would
result if the Group and Company were unable to continue as a going concern.
(b) New standards and interpretations applied
The following standards and interpretations to existing standards have been
published but are not mandatory for the period ended 30 June 2009 and have not
been applied during the period:
Effective dates
(periods beginning on or after)
+------------------------------------------------------------------------------------+
| IFRS 8 - Operating Segments 1 January 2009 |
| IFRS 7 - Improving disclosures about financial statements1 |
| January 2009 |
| IAS 23 - Borrowing costs - revised1 January 2009 |
| IFRIC 15 - Agreements for the Construction of Real Estate1 |
| January 2009 |
| IFRS 2 - Share-based payments - amended1 January 2009 |
| IAS 1 - Presentation of Financial Statements - revised1 January |
| 2009 |
| IAS 32, IAS 1 - Puttable Financial Instruments and |
| Obligations Arising on Liquidation1 January 2009 |
| Improvements to IFRSs1 January 2009 |
| IFRS 1, IAS 27 - Cost of an Investment in a Subsidiary, |
| Jointly-controlled Entity or Associate1 January 2009 |
| IFRIC 9, IAS 39 - Embedded derivatives - amended30 June 2009 |
| IAS 39 - Financial Instruments: Eligible Hedged Items1 July 2009 |
| IFRS 3 - Business Combinations - revised1 July 2009 |
| IAS 27 - Consolidated and Separate Financial Statements1 July |
| 2009 |
| IFRIC 17 - Distributions of Non-cash Assets to Owners1 July 2009 |
| IFRIC 18 - Transfer of Assets from Customers1 July 2009 |
| Improvements to IFRSs1 January 2010 |
| IFRS 2 - Group Cash-settled |
| Share-based Payment Transactions - amended1 January 2010 |
| IAS 32 - Classification of Rights Issues - amended1 February |
| 2010 |
| IAS 24 - Related Party Disclosures - revised1 January 2011 |
| IFRS 9 - Financial Instruments1 January 2013 |
| |
+------------------------------------------------------------------------------------+
The directors do not anticipate that the adoption of these standards and
interpretations will have a material impact on the group's financial statements
in the period of initial application.
(c) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the company and entities controlled by the company. Control is achieved where
the company has the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
the group. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Associates are all entities over which the Group exercises significant
influence. Investments in associates are accounted for by the equity method of
accounting and are initially recognised at cost, in accordance with the
alternative treatment allowed by IAS 31 and IAS 28. The Group's share of any
associate profits or losses after tax are recognised in the income statement and
its share of post-acquisition movements in reserves is recognised in reserves.
The cumulative post-acquisition movements are adjusted against the carrying
amount of the investment.
When the Group's share of losses after tax in an associate equals or exceeds its
interest or participation, the Group does not recognise further losses, unless
it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Group and any associates are
eliminated to the extent of its interest or participation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.
(d) Acquisition method of accounting
The cost of the acquisition is measured at the aggregate of the fair values, at
the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the group in exchange for control of the acquiree,
plus any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date. The results of acquired operations are included in the
consolidated income statement from the date on which control is obtained.
(e) Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the group's interest in the fair value of the identifiable
assets and liabilities, including contingent liabilities, of a subsidiary.
Goodwill is initially recognised as an asset at cost and is subsequently
measured at cost less any accumulated impairment losses. Goodwill which is
recognised as an asset is reviewed for impairment at least annually. Any
impairment is recognised immediately in the income statement and is not
subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to each of the
group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired if the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro rata on the basis of the
carrying amount of each asset in the unit. Recoverable amount is defined as the
higher of an asset's fair value less costs to sell and its value in use. An
Impairment loss recognised for goodwill is not reversed in a subsequent period.
Goodwill arising on other acquisitions before the date of transition to IFRSs, 1
March 2007, has been retained at the previous UK GAAP amounts subject to being
tested for impairment at that date.
(f) Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for product sales provided in the
normal course of business, net of discounts, VAT and other sales related taxes.
Revenue is recognised when the Group has transferred to the buyer the
significant risks and rewards of ownership of the goods, the Group retains
neither the continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold, the amount of revenue
can be measured reliably, it is probable that the economic benefits associated
with the transaction will flow to the Group and the costs incurred or to be
incurred in respect of the transaction can be measured reliably.
(g) Operating loss
Operating loss is stated after exceptional items, but before finance income and
finance costs.
(h) Exceptional items
Exceptional items are material items that are unusual in nature, where separate
disclosure is necessary and relevant to provide an understanding of the group's
financial performance (see note 3).
(i)Plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets over
their estimated useful lives. The rates generally applicable are:
Leasehold improvements - Over the length of the lease
Plant, machinery, fixtures & fittings - 15-25% per annum on cost
Motor vehicles - 25% per annum on cost
(j)Development costs
Development costs are capitalised by the group where:
· it is technically feasible to develop the product for it to be sold
· adequate resources are available to complete the development
· there is an intention to complete and sell the product
· the group is able to sell the product
· sale of the product will generate future economic benefits
· expenditure on the project can be measured reliably
Development costs are recognised as an internally generated intangible asset
with a definite useful life and are amortised over that useful life, generally
10 years, they are also reviewed for impairment at least annually. Amortisation
of development costs is included in depreciation and amortisation costs in the
consolidated income statement on page 16. Any impairment is recognised
immediately in the income statement and not subsequently reversed.
(k)Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of
an asset or liability in the balance sheet differs from its tax base, except for
differences arising on:
· the initial recognition of goodwill,
· goodwill for which amortisation is not tax deductible,
· the initial recognition of an asset or liability in a transaction which is not
a business combination and at the time of the transaction affects neither
accounting nor taxable profit, and
· investments in subsidiaries and jointly controlled entities where the group is
able to control the timing of the reversal of the difference and it is probable
that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is
probable that taxable profit will be available against which the difference can
be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the balance sheet date and are expected
to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the group has a legally
enforceable right to offset current tax assets and liabilities and the deferred
tax assets and liabilities relate to taxes levied by the same tax authority on
either:
· the same taxable group company, or
· different group entitles which intend either to settle current tax assets and
liabilities on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred
tax assets or liabilities are expected to be settled or recovered.
(l)Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is
based on the cost of purchase on a first in, first out basis. Net realisable
value is based on estimated selling price.
(m) Financial instruments
The only categories the directors consider the group to have financial
instruments in are as follows:
Available for sale financial assets
Available for sale financial assets are non-derivatives that are either
designated in this category or not classified in any of the other categories.
They are included within non-current assets unless the Group intends to dispose
of them within a year of the balance sheet date. When investments classified as
available for sale assets are sold or impaired, the accumulated fair value
adjustments recognised in equity are included in the income statement.
If the market for a financial asset is not active (and for unlisted securities),
the Group establishes fair value by using valuation techniques. If the fair
value of an unquoted entity cannot be measured reliably, it is measured at cost.
Loans and receivables
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally through
the provision of goods and services to customers (e.g. trade receivables), but
also incorporate other types of contractual monetary asset. They are initially
recognised at fair value plus transaction costs that are directly attributable
to their acquisition or issue, and are subsequently carried at amortised cost
using the effective interest rate method, less provision for impairment.
Impairment provisions are recognised when there is objective evidence (such as
significant financial difficulties on the part of the counterparty or default or
significant delay in payment) that the group will be unable to collect all of
the amounts due under the terms receivable, the amount of such a provision being
the difference between the net carrying amount and the present value of the
future expected cash flows associated with the impaired receivable. For trade
receivables, which are reported net, such provisions are recorded in a separate
allowance account with the loss being recognised within administrative expenses
in the income statement. On confirmation that the trade receivable will not be
collectable, the gross carrying value of the assets is written off against the
associated provision. In the case of equity securities classified as available
for sale, a significant or prolonged decline in the fair value of the security
below its cost is considered an indicator that the securities are impaired. If
any such evidence exists for available-for-sale financial assets, the cumulative
loss - measured as the difference between the acquisition cost and current fair
value, less any impairment loss on that financial asset previously recognized in
profit or loss - is removed from equity and recognized in the income statement.
Impairment losses recognized in the income statement on equity instruments are
not reversed through the income statement.
From time to time, the group elects to renegotiate the terms of trade
receivables due from customers with which it has previously had a good trading
history. Such renegotiations will lead to changes in the timing of payments
rather than changes to the amounts owed and, in consequence, the new expected
cash flows are discounted at the original effective interest rate.
The group's loans and receivables comprise trade and other receivables and cash
and cash equivalents in the balance sheet.
Cash and cash equivalents includes cash in hand and deposits held with banks.
Leases and hire purchase contracts
Where assets are financed by leasing agreements that give rights approximating
to ownership (finance leases), the assets are treated as if they had been
purchased outright. The amount capitalised is the present value of the minimum
lease payments payable over the term of the lease. The corresponding leasing
commitments are shown as amounts payable to the lessor. Depreciation on the
relevant assets is charged to the income statement.
Lease payments are analysed between capital and interest components so that the
interest element of the payment is charged to the income statement over the
period of the lease and represents a constant proportion of the balances of
capital repayments outstanding. The capital part reduces the amounts payable to
the lessor.
All other leases are treated as operating leases. Their annual rentals are
charged to the income statement on a straight-line basis over the term of the
lease, even if the payments are not made on such a basis.
Other financial liabilities
These include trade payables and other short-term monetary liabilities, which
are recognised at fair value and thereafter at amortised cost.
Convertible debt
The proceeds received on issue of the group's convertible debt are allocated
into their liability and equity components. The amount initially attributed to
the debt component equals the discounted cash flows using a market rate of
interest that would be payable on a similar debt instrument that did not include
an option to convert. Subsequently, the debt component is accounted for as a
financial liability measured at amortised cost.
The difference between the net proceeds of the convertible debt and the amount
allocated to the debt component is credited directly to equity and is not
subsequently remeasured if converted, the debt and equity elements are credited
to share capital and share premium, as appropriate.
(n) Share-based employee remuneration
The fair value of options granted is recognised as an employee expense, with a
corresponding increase in equity reserves. The fair value is recognised at the
grant date and spread over the period the employees become unconditionally
entitled to the options. The fair value of the options granted is measured using
the binomial option pricing model, taking into account the terms and conditions
on which the options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that vest except where
variations are due only to share prices not achieving the threshold for vesting.
(o) Pension costs
Certain subsidiaries of the Company operate defined contribution pension schemes
for their employees and directors. The assets of the schemes are held separately
from those of the Group. The annual contributions payable are charged to the
Group consolidated income statement. The Company provides no other
post-retirement benefits to its employees and directors.
(p) Provisions
Provisions are recognised when the group has a present obligation as a result of
a past event, and it is probable that the group will be required to settle that
obligation.
Provisions are measured at the directors' best estimate of the expenditure
required to settle the obligation at the balance sheet date, and are discounted
to present value where the effect is material.
(q) Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held for sale when:
· they are available for immediate sale
· management is committed to a plan to sell
· it is unlikely that significant changes to the plan will be made or that the
plan will be withdrawn
· an active programme to locate a buyer has been initiated
· the asset or disposal group is being marketed at a reasonable price in
relation to its fair value
· a sale is expected to complete within 12 months from the date of
classification
Non-current assets and disposal groups classified as held for sale are measured
at the lower of:
· their carrying amount immediately prior to being classified as held for sale
in accordance with the Groups accounting policy
· fair value less costs to sell
Following their classification as held for sale, non-current assets (including
those in a disposal group) are not depreciated.
Results of operations disposed during the period are included in the
consolidated income statement up to the date of disposal.
A discontinued operation is a component of the Group's business that represents
a separate major line of business or geographical area of operations or its
subsidiary acquired exclusively with a view to resale, that has been disposed
of, has been abandoned or that meets the criteria to be classified as held for
sale.
Discontinued operations are presented in the income statement (including the
comparative period) as a single line which comprises the post-tax profit or loss
of the discontinued operation and the post-tax gain or loss recognised on the
re-measurement to fair value less costs to sell or on disposal of the
assets/disposal groups constituting discontinued operations.
(r) Foreign currency translation
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions or valuation
where items are remeasured.
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.
Foreign exchange gains and losses that relate to borrowings and cash and cash
equivalents are presented in the income statement within 'finance income or
cost'. All other foreign exchange gains and losses are presented in the income
statement within 'other (losses)/gains' - net.
(s) Transactions with minority interests
The Group follows the economic entity model for transactions with minority
interests. A transaction with a minority is treated as a transaction between
equity participants. For a disposal to a minority the difference between the
proceeds and the share of net assets including goodwill disposed of is accounted
for in equity. For the purchase of a minority any excess over the group's share
of net assets is recorded in equity.
(t) Critical accounting estimates and judgments
The group makes certain estimates and assumptions regarding the future.
Estimates and judgments are continually evaluated based on historical experience
and other factors, including expectations of future events that are believed to
be reasonable under the circumstances in the future. Actual experience may
differ from these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial period are discussed below.
Estimates and assumptions
(i) Going concern basis of preparation
The Group has prepared these financial statements on a going concern basis. The
Group was refinanced on the 15 July 2009 (see note 6) which reduced Group
indebtedness by GBP3.3m. Going forwards the Group expects to function as an
investment holding company with a minimal overhead base which will be funded
through small fund-raising exercises, the first of which was completed in
November 2009, and the further realisation of the Group's investments. However
given the Group's continuing losses, management's judgement on its ability to
continue as a going concern is a key assumption.
(ii) Impairment of goodwill
The group is required to test, on an annual basis, whether goodwill has suffered
any impairment. The recoverable amount is determined based on fair value less
costs to sell. Fair value has been estimated by prices achieved in transactions
post year end. Actual outcomes may vary.
The increase in debt to capital ratio for the year resulted from the sale and
write down of some significant assets within the Group. After the completion of
a refinancing in July 2009 (see note 6) all of the GBP2.8m debt was redeemed,
resulting in an improved capital position.
2. Segmental reporting
Primary reporting format - business segments
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | Ebiox | Fertiligent | Other and | | Total |
| | | | corporate | | |
+--------------+-------------------+-------------------+--------------------+--------+--------------------+
| Continuing | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | | 2009 | 2008 |
| operations | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Segment | 524 | 793 | - | - | - | - | | 524 | 793 |
| revenue | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Operating | (230) | (479) | (139) | (32) | (960) | (1,553) | | (1,328) | (2,064) |
| loss | | | | | | | | | |
| before | | | | | | | | | |
| exceptional | | | | | | | | | |
| items | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Exceptional | - | (36) | - | - | (693) | (10,930) | | (693) | (10,966) |
| operating | | | | | | | | | |
| costs | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Segment | (230) | (515) | (139) | (32) | (1,653) | (12,483) | | (2,021) | (13,030) |
| result | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Interest | | | | | | | | (256) | (233) |
| payable | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Loss | | | | | | | | (2,277) | (13,263) |
| before | | | | | | | | | |
| taxation | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Taxation | | | | | | | | - | - |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Loss | | | | | | | | | |
| for | | | | | | | | | |
| the | | | | | | | | | |
| year | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| from | | | | | | | | (2,277) | (13,263) |
| continuing | | | | | | | | | |
| operations | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Assets | | | | | | | | | |
| and | | | | | | | | | |
| liabilities | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Segment | | | | | | | | | |
| intangible | | | | | | | | | |
| assets: | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Goodwill | 2,084 | 3,300 | - | - | - | - | | 2,084 | 3,300 |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Intangible | 414 | 508 | - | - | 26 | 26 | | 440 | 534 |
| assets | | | | | | | | | |
| with | | | | | | | | | |
| finite | | | | | | | | | |
| useful | | | | | | | | | |
| lives | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Property, | 2 | 11 | - | - | 12 | 30 | | 14 | 41 |
| plant and | | | | | | | | | |
| equipment | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Other | - | - | 364 | 214 | 652 | 1,950 | | 1,016 | 2,164 |
| investments | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Other | 686 | 130 | - | - | 131 | 310 | | 817 | 440 |
| segment | | | | | | | | | |
| assets | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Total | 3,186 | 3,949 | 364 | 214 | 821 | 2,316 | | 4,371 | 6,479 |
| assets | | | | | | | | | |
| - | | | | | | | | | |
| continuing | | | | | | | | | |
| operations | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Total | (293) | (177) | (100) | (1) | (4,176) | (3,991) | | (4,569) | (4,169) |
| liabilities | | | | | | | | | |
| -continuing | | | | | | | | | |
| operations | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Net | | | | | | | | (198) | 2,310 |
| assets | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Other segment | | | | | | | | |
| items - | | | | | | | | |
| continuing | | | | | | | | |
| operations | | | | | | | | |
+------------------------+---------+---------+---------+---------+----------+--------+---------+----------+
| Capital | 2 | 11 | 160 | 112 | - | 3 | | 162 | 126 |
| expenditure | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Depreciation | 73 | 31 | - | - | 4 | 23 | | 77 | 54 |
| and | | | | | | | | | |
| amortisation | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| Impairment | - | - | - | - | 693 | 1,092 | | 693 | 1,092 |
| losses | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+----------+--------+---------+----------+
At 30 June 2009, the Group's operations are organised on a worldwide basis into
three main business segments. These segments are:
Ebiox - worldwide sale and distribution of disinfectant products
Fertiligent - development of an early stage fertility medical device
Other and corporate - Portfolio investment, head office and other costs
There are immaterial sales between the business segments.
Segment assets include property, plant and equipment, intangible assets,
inventories, receivables and operating cash. Segment liabilities comprise trade
and other payables. Taxation, borrowings, provisions and non-current liabilities
are managed centrally and are included in the Other and corporate segment.
Capital expenditure comprises additions to property plant and equipment,
intangible assets and other investments.
All revenue for the period comes from the sale of disinfectant products,
originating in the United Kingdom.
Secondary reporting format - geographical segments
The Group manages its business segments on a global basis. The operations are
based in three main geographical areas. The UK is the home country of the
parent. The main operations in the principal territories are as follows - UK,
Europe, and Rest of World.
+--------------------------------------------------+----------+----------+----------+--+---------+
| Year ended 30 June 2009 | | | Restof | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | UK | Europe | World | | Total |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Segment revenue from continuing operations | 275 | 194 | 55 | | 524 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Total assets (including cash) | 4,007 | - | 364 | | 4,371 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Capital expenditure relating to continuing | 2 | - | 160 | | 162 |
| operations | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| 16 month period ended 30 June 2008 | | | Restof | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | UK | Europe | World | | Total |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Segment revenue | 7,036 | 602 | 223 | | 7,861 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Less attributable to discontinued operations | (6,574) | (403) | (91) | | (7,068) |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Segment revenue from continuing operations | 462 | 199 | 132 | | 793 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Segment assets (including cash) | 6,265 | - | 214 | | 6,479 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Total assets | | | | | 6,479 |
+--------------------------------------------------+----------+----------+----------+--+---------+
| | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
| Capital expenditure relating to continuing | 14 | - | 112 | | 126 |
| operations | | | | | |
+--------------------------------------------------+----------+----------+----------+--+---------+
3. Exceptional items
+------------+-----------------------------------------------+--------------+--+-------------+
| | | Yearto | | 16months |
+------------+-----------------------------------------------+--------------+--+-------------+
| | | 30June | | to30June |
+------------+-----------------------------------------------+--------------+--+-------------+
| | | 2009 | | 2008 |
+------------+-----------------------------------------------+--------------+--+-------------+
| | | GBP'000 | | GBP'000 |
+------------+-----------------------------------------------+--------------+--+-------------+
| Exceptional items relating to continuing operations | | | |
+------------------------------------------------------------+--------------+--+-------------+
| Reorganisation costs | - | | 392 |
+------------------------------------------------------------+--------------+--+-------------+
| Impairment of other assets | 693 | | 1,092 |
+------------------------------------------------------------+--------------+--+-------------+
| Disposals of investments | - | | (170) |
+------------------------------------------------------------+--------------+--+-------------+
| Impairment of goodwill | - | | 9,652 |
+------------------------------------------------------------+--------------+--+-------------+
| | | 693 | | 10,966 |
+------------+-----------------------------------------------+--------------+--+-------------+
| | | | | |
+------------+-----------------------------------------------+--------------+--+-------------+
| Exceptional items relating to discontinued operations | | | |
+------------------------------------------------------------+--------------+--+-------------+
| Reorganisation costs | - | | 637 |
+------------------------------------------------------------+--------------+--+-------------+
| Impairment of Goodwill | - | | 3,918 |
+------------------------------------------------------------+--------------+--+-------------+
| Loss on disposal of Crest Medical Limited | - | | 249 |
+------------------------------------------------------------+--------------+--+-------------+
| | | - | | 4,804 |
+------------+-----------------------------------------------+--------------+--+-------------+
2009 Exceptional items
In December 2008 the directors reviewed the carrying value of its available for
sale investments for impairment. In light of this review the Group's investments
in First Aid Holdings Limited ("FAH"), Medilator Limited ("Medilator") and
Cancer Therapeutics Incorporated ("CTI") were impaired by GBP0.7m. Both the
investments in Medilator and CTI were written down to GBPnil. The remaining
holding in FAH is valued at GBP1.25 per share (30 June 2008: GBP2.00 per
share).
2008 Exceptional items
In October 2007 the Group's bankers requested early repayment of their loan.
After a strategic review and refinancing, management decided to restructure the
Group and to realise some of its value by selected asset sales. As part of this
financial and operational restructuring the group incurred reorganisation costs
of GBP1.0m, GBP0.4m of which related to the continuing operations of the Group.
During the period the continuing Group impaired available for sale investments
of GBP0.8m, goodwill of GBP9.7m and other intangible assets of GBP0.3m in
respect of continuing operations. There was also a prior year adjustment of
GBP1.5m to write down goodwill that has been recognised in 2007.
Disposals of investments comprises the sales of Alpha Trading (Asia) Limited,
the assets of Cross Infection Control Systems and shares in First Aid Holdings
Limited. The Group holds shares in First Aid Holdings Limited as consideration
for the sale of Crest Medical (see below).
The Crest Medical business incurred reorganisation costs of GBP0.6m to enable
its sale in April 2008. At the time of the reorganisation the carrying value of
the goodwill held by the Group was reviewed and was written down by GBP3.9m.
The Crest Medical business was sold for 980,000 shares worth GBP2.45m in First
Aid Holdings Limited the Company that now owns Crest Medical Limited. An
exceptional loss of GBP249,000 has been incurred in respect of the sale. During
the period 90,000 shares in First Aid Holdings Limited were disposed of at GBP2
each.
4. Loss per share
(a) Basic loss per share
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| | | | | | Year to | | 16 months |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| | | | | | 30 June | | to 30 June |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| | | | | | 2009 | | 2008 |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| | | | | | GBP'000 | | GBP'000 |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| | | | | | | | |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| Loss attributable to equity holders of the Company | (2,277) | | (19,886) |
+---------------------------------------------------------------+-------------+--+-------------+
| Discontinued operations | - | | 6,690 |
+---------------------------------------------------------------+-------------+--+-------------+
| | | | | | | | |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
| Loss attributable to equity holders of the Company from | (2,277) | | (13,196) |
| continuing operations | | | |
+------------+-----------+----------+-----------+---------------+-------------+--+-------------+
The weighted average number of ordinary shares of 0.1p each in issue during the
period was 426,405,558 (2008: 310,862,862).
(b) Diluted loss per share
Because the inclusion of potential ordinary shares would decrease the basic loss
per ordinary share they are not deemed to be dilutive and accordingly the basic
and diluted loss per ordinary share are identical.
5. Financial liabilities - loans and borrowings
Financial liabilities, measured at amortised cost, comprise the following:
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | Group | Group | | Company | Company |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | 2009 | 2008 | | 2009 | 2008 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| GBP0.5m 8% secured loan notes 2008 | | 500 | 490 | | 500 | 490 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| GBP1.75m 8% convertible unsecured loan notes 2012 | 1,654 | 1,600 | | 1,654 | 1,600 |
+---------------------------------------------------+---------+---------+----+---------+---------+
| GBP0.4m other unsecured loans | | 400 | 300 | | 400 | 300 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Other (including accrued interest) | | 251 | 59 | | 251 | 59 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Obligations under finance leases | | - | - | | - | - |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Invoice discounting | | - | - | | - | - |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Total | | 2,805 | 2,449 | | 2,805 | 2,449 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Borrowings repayable: | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Within one year or on demand | | 751 | 549 | | 751 | 549 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Between one and two years | | - | - | | - | - |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Between two and five years | | 2,054 | 1,900 | | 2,054 | 1,900 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Total | | 2,805 | 2,449 | | 2,805 | 2,449 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Current | | 751 | 549 | | 751 | 549 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Non-current | | 2,054 | 1,900 | | 2,054 | 1,900 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Total | | 2,805 | 2,449 | | 2,805 | 2,449 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Unsecured convertible loan notes | | 1,654 | 1,600 | | 1,654 | 1,600 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Secured loan notes | | 500 | 500 | | 500 | 500 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Other unsecured borrowings | | 651 | 349 | | 651 | 349 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Obligations under finance leases | | - | - | | - | - |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | 2,805 | 2,449 | | 2,805 | 2,449 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | 2009 | 2008 | | 2009 | 2008 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Gross borrowings repayable (including interest): | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
+---------------------------------------------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Within one year or on demand | | 927 | 755 | | 927 | 755 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Between one and two years | | 176 | 176 | | 176 | 176 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| Between two and five years | | 2,414 | 2,490 | | 2,414 | 2,490 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | | | | | |
+--------------------------------------+------------+---------+---------+----+---------+---------+
| | | 3,517 | 3,421 | | 3,517 | 3,421 |
+--------------------------------------+------------+---------+---------+----+---------+---------+
Facilities and loan notes above are shown net of their associated fees and
equity components. An equity component of GBP89,000 has been recognised in
respect of the GBP1.75m 2012 convertible loan notes which has been classified as
other reserves in accordance with IAS 32 and will be amortised to the
consolidated income statement over the respective lives of the loan notes. Fair
value at inception is calculated discounting estimated future cashflows using a
market rate of interest (10%). The holders of the convertible debt have the
option at any point before maturity to exchange debt with a face value of GBP1
for 80 0.1p ordinary shares in the company.
There were no defaults during the period on the GBP1.75m convertible loan notes
or the GBP0.3m other loans or on the interest payable from these loans. The
GBP0.5m loan notes became due at the end of 2008, however these were not
immediately redeemed. Management entered negotiations with the holders of these
notes as part of the wider refinancing of the Group which was completed in July
2009 and led to all the loan debt of the Group being converted into equity
shares in Healthcare Enterprise Group plc, First Aid Holdings Limited, Ebiox
Limited and Reproductive Sciences Limited.
6. Post balance sheet events
In July 2009 the Group completed a refinancing whereby GBP3,268,110 of
indebtedness owed by the company was deemed to have been satisfied by: the issue
of 2,635,728 Healthcare Enterprise Group plc ("HCEG") new ordinary shares, the
transfer of controlling interests in Ebiox Limited ("Ebiox") and Reproductive
Sciences Limited ("RSL") being 738,360 Ebiox ordinary shares and 16,240 RSL
ordinary shares, and the transfer of 303,688 First Aid Holdings Limited ordinary
shares. As part of this refinancing the share capital of the Company was
consolidated with one new ordinary share of 25p being issued for 250 old
ordinary shares of 0.1p.
Going forwards the Group expects to function as an investment holding company
with a minimal overhead base. However, given the Group's continuing losses,
further funding will be required to meet the Group's continuing operating costs
and liabilities. These will be funded through small fund-raising exercises, the
first of which was completed in November 2009, and the further realisation of
the Group's investments. The directors believe that the Group's plans are
achievable given the continued support of significant shareholders and the
ability to achieve piecemeal investment sales already evidenced. However these
conditions constitute a material uncertainty that may cast significant doubt
about the group's and company's ability to continue as a going concern. After
making enquiries, and considering the uncertainties surrounding funding and
future operations described above, the directors have a reasonable expectation
that the Group and the Company have adequate resources, or the expectation of
access to adequate resources, to continue trading for the foreseeable future.
By way of settlement of certain debts and assignment of two property leases
which originally formed part of the acquisition of Crest Medical Limited in
2004, HCEG has agreed to pay to Alliance Unichem GBP50,000 of the funds raised
pursuant to the November 2009 Placing and shall also issue secured redeemable
loan notes 2011 ("Loan Notes") up to a value of GBP150,000 which are secured on
50,000 Ebiox ordinary shares of GBP0.25 owned by HCEG. The loan notes shall bear
interest at 4% above LIBOR, are redeemable in 5 tranches between 15 December
2009 and 15 March 2011 or are redeemable in full by HCEG on an earlier date out
of any future fund raising conducted by HCEG. The debts relate to a reverse
premium arising on the assignment of two leases on properties (the "Properties")
occupied by Crest Medical Limited (formerly a subsidiary of HCEG) to Alliance
Unichem. Alliance Unichem has agreed to, up to and including 15 March 2011, and
in its sole discretion, release HCEG from any amount still outstanding under the
Loan Notes by setting off against such amounts 50% of any amount recouped over
and above the sum of GBP256,000 through successfully renting the Properties. The
repayment of loan notes is also guaranteed by John Gunn (a director of HCEG) for
which he is receiving a fee, to be settled by the issue of 100,000 HCEG shares,
amounting to GBP25,000. The settlement reduces HCEG's obligations in respect of
the two property leases by approximately GBP100,000 per annum, which would
otherwise continue until the leases expire in 2015.
HCEG has also agreed settlement of a dispute arising in 2006 relating to an
investment in its subsidiary, Healthcare Endoscopy Limited. The amount received
for the investment was fully provided for in the accounts of the company and
HCEG has now agreed to settle the amount in the following manner: GBP25,000 in
cash; 127,451 new ordinary shares of 25p in HCEG (the "Settlement Shares"); the
transfer of 4,500 ordinary shares in Reproductive Sciences Limited ("RSL"),
currently owned by HCEG (the "RSL Shares"); and the transfer of 50,000 ordinary
shares in Ebiox Limited ("Ebiox"), currently owned by HCEG (the "Ebiox Shares").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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