Preliminary Results

RNS Number:7634X
Maelor PLC
05 June 2007


5th June 2007 

                                   Maelor plc

                        ("Maelor", "Group" or "Company")


            Maelor results ahead of expectations - profitable in H2


             Preliminary Results for the year ended 31st March 2007


Maelor plc (AIM: MLR), the specialist hospital medicines company, announces
preliminary results for the year ended 31st March 2007.


Financial Highlights - Results ahead of expectations - profitable in H2

    - Turnover up 53% to #2.84m (2006: #1.86m)
    - Operating loss down to #73k (2006:#609k / H1 #93k)
    - Earnings/loss per share reduced to 0.10p (2006:1.93p)
    - Net cash position improved to #1.43m (2006:#1.10m)

Operational Highlights - Transformational year

-   Strong performance from underlying business

    - Volplex sales tripled Vs 2005/06
    - ISOplex and AquiHex into late stage development and on schedule
    - Licence secured to supply "specials"
    - Initial payment received for Micelle Lidocaine
    - 8% improvement in gross margin to 48% (2006: 40%)

-   Further strengthened management team 

    - New Finance Director & Commercial Manager

-   Transforming acquisition of Acorus Therapeutics Limited ("Acorus") 
    post year end

    - Enlarged group profitable and growing
    - Highly synergistic portfolio of products 
    - Integration progressing to schedule


Tim Wright, Chief Executive of Maelor plc said:


"This year has been transformational for Maelor. In line with our new strategy
developed in 2005/6 we have focused the Company on late stage and launched
products, managed the business to profitability in the second half of the year
and completed the acquisition of Acorus, thereby creating a substantial
specialist hospital medicine business which is profitable and cash generative.


Trading since the period end is in line with expectations and the integration of
Acorus is, as anticipated, proceeding smoothly. The enlarged business provides
us with a platform for further growth both organically and through further
acquisitions."

                                    - Ends -

For further information, call:
Tim Wright, Chief Executive                  T: [phone]
Maelor plc

Matthew Hall/Sam Reynolds                    T: [phone]
Noble & Company Limited

Billy Clegg/Edward Westropp                  T: [phone]
Financial Dynamics


Chairman's Statement


Introduction


I am pleased to present the results for the past financial year, a year of
significant achievements for Maelor. Under the leadership of our CEO, Tim Wright
, the new management team has worked to transform the Company into a profitable
business with a focus on late stage specialist hospital medicines.


In my statement in the 2005-06 Annual Report I noted that for Maelor to
accelerate its growth we needed to succeed in marketing core products in our own
right and in partnering non-core products. In the year end March 2007 we
achieved both of these objectives with a threefold increase in sales of Volplex
and the exploitation of our micelle technology in a partnership with Plethora.
In addition we have further expanded our portfolio of critical care products
with the addition of AquiHexTM and ISOplexTM.


Our financial performance this year is much improved with the company reaching
breakeven in the second half of the year, resulting from an outstanding 53%
revenue growth. Our cash position has also strengthened and margins have been
substantially improved.



Acquisition


Since the year end, we have delivered a transforming, earnings enhancing
acquisition, which has made us profitable and built a strong platform for
growth. Acorus is a successful specialist pharmaceuticals and medical devices
company, which we acquired for a total consideration of #13 million. The initial
cash consideration was satisfied by the issue to institutional investors of
80,000,000 new Ordinary Shares of 10 pence each, which raised #8 million and was
oversubscribed.


Acorus is significantly profitable and growing with a portfolio of assets
primarily focused in critical care and neurology. It was established in 2000 and
has been built as a virtual company; thus the speed and success of our
integration process to date.


Outlook


Trading since the period end is in line with expectations and the integration of
Acorus is on schedule.


The existing business is now performing well. The acquisition of Acorus, with
its portfolio of marketed products will make us significantly profitable
creating a strong platform upon which to grow the business both organically and
through further acquisitions. The Board would like to thank the Maelor team for
its efforts and achievements during the year and it looks to the future with
confidence.


Chief Executive's Review


In my report last year we outlined our strategy to transform Maelor into a
specialist hospital medicine business, focused initially in critical care. We
identified the importance of focusing on late stage products, thereby reducing
the risk and expense of early stage development as well as leveraging our
non-critical care portfolio through efficient partnerships.


I am pleased to report that the implementation of this plan is progressing well
and has been significantly accelerated following the recently announced;
transforming acquisition of Acorus, creating a strong and profitable enlarged
Company.


Separating out the recent acquisition of Acorus, I am also pleased to report
that the underlying Maelor business has performed well over the year and in
particular has delivered a strong and profitable second half:

Building a specialist hospital medicines business


A significant contributor to this performance has been the successful
re-acquisition and re-launch of Volplex, a product Maelor originally developed
and licensed. Used in operating theatres and wards to maintain blood volume,
Volplex competes primarily with one other long established product.


We have succeeded in trebling sales of Volplex since March 2006 and MAT (moving
annual total) market share has grown from 12% to 20%. We have recruited an
experienced Commercial Manager and with substantial room for further market
share growth, the management team is confident that Maelor can continue to win
new customers and further grow sales of Volplex.


During the year we announced the late stage development of ISOplex and AquiHex,
both products which will be used in critical care settings. ISOplex, in common
with Volplex will be used in situations where an increase in blood volume is
required. ISOplex has been designed to mimic natural blood plasma, particularly
in the balance of electrolytes. The use of these "isotonic" formulations is an
area of significant interest amongst critical care clinicians. Given our
experience and existing data in this sector it is anticipated that development
will be relatively rapid and inexpensive for a pharmaceutical product.
Development has continued to progress on schedule and regulatory approval
remains to be forecast for the end of 2008.


AquiHex is a 2% aqueous formulation of chlorhexidine, an antibacterial product
commonly used prior to surgical incision or insertion of IV lines. To date all
products of this type are alcohol based and therefore present problems in
settings where flammability is of concern such as operating theatres. Use of
alcohol based products is also recommended against when using certain IV lines
as it can make them brittle. AquiHex is being supplied as a "special" ahead of
registration, which is currently forecast for late 2009.


In the middle of the year we succeeded in gaining approval to supply un-licensed
medicines. Generally known as "specials" these products can be requested by
physicians for use in patients where there is a specific requirement which is
presently unmet by any medicine licensed in the UK. In addition to establishing
closer relationships with the critical care community this strategy will enable
Maelor to gauge demand for products and where this demand is sufficient,
progress these products to licence in the UK. We have recently gained
distribution rights to a selection of fluid and volume replacement products from
Germany which we also make available as part of this service.


Leverage non-critical care portfolio through efficient partnerships


We will continue to select strong partners to commercialise the heritage
portfolio of products and technologies that do not fit directly with the
Company's hospital specialist strategy, in particular our catheter flushing
solutions OptiFlo and Contisol and our proprietary early stage micelle
nanotechnology.


OptiFlo, the UK brand of catheter flushing solutions distributed by Bard,
continues to perform well, with sales up 6% versus 2005/2006, and remains the UK
market leader with a market share of 54%.


Included in the first half of the year is an initial payment following the
licensing of our proprietary micelle nanotechnology, micelle lidocaine.  The
partnership with Plethora Solutions Holdings plc, a specialist urology company,
is progressing well and the product has successfully passed through the first
stage of its preclinical development programme.  Under the terms of the
agreement Plethora is responsible for product development and distribution and
Maelor is entitled to milestone and royalty payments. The micelle lidocaine
technology will be incorporated into Plethora's on going product development
programme for the treatment of interstitial cystitis and painful bladder
syndrome. These distressing conditions are estimated to afflict up to two
million women in the United States and Europe.



Financial Summary


Financial results for the year ended 31 March 2007 have been delivered ahead of
expectations.


Turnover for the year to 31 March 2007 was #2.84m (2006: #1.86m), representing
an increase of 53% over prior year. This significant increase can be attributed
to the management team's continued focus on growing Volplex, the sales growth of
Optiflo as well as an initial payment received for our micelle lidocaine
nanotechnology.


Gross margins increased from last year by almost 8% to 48% as a result of
further efficiencies in manufacturing and supply.


The Group's operating loss for the year reduced significantly to #73k from #609k
in 2006, including achieving a #20k operating profit in the second half of the
year. The improvement was driven by the sales growth, the initial licensing
payment and careful cost control.


Group cash balances, net of debt, at 31 March 2007 were #1.43m compared with
#1.10m last year. At the end of the year we sold our office building and
relocated to a modern leasehold property on Chester Business Park. Proceeds from
the sale of the building enabled the bank mortgage to be cleared leaving the
Company debt free at the year end. Since the year end we have negotiated a #2.0m
bank facility for further business expansion.



Acquisition of Acorus Therapeutics Limited


In line with the Company's strategy the most recent achievement was to
successfully complete a deal to acquire privately owned Acorus for a total
consideration of approximately #13.0m, comprising #7.0m in cash, 10 million
ordinary shares at 10p each and loan notes of #4.88m, contingent on achievement
of certain sales milestones.


The deal was funded by an oversubscribed placing of 80 million 10p ordinary
shares issued at 10p each and was completed on 10 May 2007. It is a transforming
move for Maelor, with the enlarged group becoming immediately profitable and
cash generative.


Acorus is a particularly synergistic acquisition. The product range is
complementary to Maelor's with the same customers, distribution channels and
regulatory systems and processes. The integration process is progressing well
and on schedule.


Outlook


Our vision remains to build a new force in specialist hospital medicine,
leveraging our expertise in both pharmaceuticals and medical devices. We have
re-focused the business, taken it to profitability in the second half and in
Acorus made a synergistic transformational acquisition. With a strong team in
place, Maelor is well-positioned to drive growth organically and through
acquisition.


Consolidated Profit and Loss Account
for the year ended 31 March 2007

                                                  Year ended         Year ended
                                             31 March 2007 #    31 March 2006 #
-------------------------------                    ----------         ----------
Turnover                                         2,842,002          1,858,750
Cost of sales                                   (1,485,669)        (1,117,782)
-------------------------------                    ----------         ----------
Gross profit                                     1,356,333            740,968
Research and development                           (97,187)           (89,888)
Administration                                  (1,331,910)        (1,259,627)
-------------------------------                    ----------         ----------
Operating loss                                     (72,764)          (608,547)
Interest receivable and similar income              51,673             51,784
Interest payable                                   (11,539)           (13,351)
-------------------------------                    ----------         ----------
Loss on ordinary activities before
taxation                                           (32,630)          (570,114)
Taxation                                                 -            (90,478)
-------------------------------                    ----------         ----------
Loss sustained attributable to the Group           (32,630)          (660,592)
-------------------------------                    ----------         ----------
Basic loss per ordinary share                        (0.10)p            (1.93)p
Diluted loss per ordinary share                      (0.10)p            (1.93)p
-------------------------------                    ----------         ----------

All operations are continuing.


Statement of recognised income and expenses
for the year ended 31 March 2007

There were no recognised income and expenses other than as reflected in the
Profit and Loss Account above (2006: nil)


Note of historical cost profits and losses
for the year ended 31 March 2007

                                                            2007          2006
                                                               #             #
---------------------------------                        ---------      --------
Reported loss on ordinary activities before taxation     (32,630)     (570,114)
Realisation of property revaluation losses of previous
years                                                     (7,287)            -
---------------------------------                        ---------      --------
Difference between an historical cost depreciation
charge and the actual depreciation charge for the year
calculated on the revalued amount                          2,310         2,520
---------------------------------                        ---------      --------
Historical cost loss on ordinary activities before
taxation                                                 (37,607)     (567,594)
---------------------------------                        ---------      --------
Historical cost loss for the year sustained after
taxation                                                 (37,607)     (658,072)
---------------------------------                        ---------      --------



Consolidated Balance Sheet

                                 31 March 2007              31 March 2006
                                ---------------             --------------
                                    #             #            #             #
------------------------  -----  --------     --------      -------     --------
Fixed assets
Tangible assets                                67,453                    383,305
------------------------        ---------     --------      -------     --------
Current assets
Stocks                           150,175                    205,590
Debtors -due within one year     597,956                    379,374
Cash at bank and in hand       1,427,332                  1,296,463
------------------------        --------      --------     --------     --------
                               2,175,463                  1,881,427
Creditors: amounts
falling due within one
year                            (867,101)                  (696,553)
------------------------         --------      --------    --------    ---------
Net current assets                          1,308,362                  1,184,874
------------------------         --------    --------      -------      --------
Total assets less current
liabilities                                 1,375,815                  1,568,179
Creditors: amounts
falling due after more
than one year                                       -                   (173,899)
------------------------       --------      --------      -------      --------
Net assets                                  1,375,815                  1,394,280
------------------------       --------      --------      -------      --------
Capital and reserves
Called up share capital                     3,428,083                  3,428,083
Shares to be issued                            37,182                     23,017
Share premium account                      12,154,094                 12,154,094
Revaluation reserve                                 -                    151,169
Profit and loss account                   (14,243,544)               (14,362,083)
------------------------       --------      --------      -------      --------
Shareholders' funds -
equity                                      1,375,815                  1,394,280
------------------------       --------      --------      -------      --------



Consolidated cash flow statement

for the year ended 31 March 2007

                                                    Year ended       Year ended
                                                 31 March 2007    31 March 2006
                                                           #                #

-----------------------------                        ---------       ----------
Cash flow from operating activities                  (14,185)        (300,746)
Returns on investments and servicing of
finance                                               40,134           38,433
Taxation                                               5,961          108,487
Capital expenditure                                  291,759          (15,857)
-----------------------------                        ---------       ----------
Cash inflow/(outflow) before management of
liquid resources and financing                       323,669         (169,683)
Financing                                           (192,800)          (1,546)
-----------------------------                        ---------       ----------
Increase/ (decrease) in cash in the year             130,869         (171,229)
-----------------------------                        ---------       ----------



Reconciliation of net cash flow to movement in net funds

for the year ended 31 March 2007

                                                     Year ended       Year ended
                                                  31 March 2007    31 March 2006
                                                            #                #

-----------------------------                         ---------       ----------
Increase/(decrease) in cash in the year               130,869         (171,229)
Cash outflow from decrease in debt and lease
financing                                             192,800           19,171
-----------------------------                         ---------       ----------
Changes in funds resulting from cash flows            323,669         (152,058)
-----------------------------                         ---------       ----------
Movement in net funds in the year                     323,669         (152,058)
Net funds at the start of the year                  1,103,663        1,255,721
-----------------------------                         ---------       ----------
Net funds at the end of the year                    1,427,332        1,103,663
-----------------------------                         ---------       ----------




Notes to the preliminary results for the year ended 31 March 2007


 1. The financial information set out in this report, which was approved by the
    directors on 4 June 2007, does not constitute the Company's statutory
    accounts for the year ended 31 March 2007 or 31 March 2006 but is derived
    from those accounts. Statutory accounts for 2006 have been delivered to the
    Registrar of Companies and those for 2007 will be delivered following the
    Company's Annual General Meeting. The auditors have still to report on the
    2007 accounts but have indicated that they will be issuing an unqualified
    report in all respects. The 2006 audit report was unqualified and did not
    contain statements under section 237 (2) or (3) of the Companies Act 1985.


 2. The preliminary results have been prepared on the basis of the accounting
    policies as set out in the financial statements for the year ended 31 March
    2006. Key elements of the Company's principal accounting policies are noted
    below.


Basis of preparation and consolidation

The financial statements of the Group consolidate the financial statements of
the Company and all its subsidiary undertakings, whose financial statements were
also made up to 31 March 2007.


The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules, modified to
include the revaluation of freehold property.



 3. Loss per ordinary share

The calculation for basic loss per share uses the numerators and denominators
noted below:
                                                           2007           2006
                                                              #              #
                                                       ----------     ---------
---------------------------
                                                       ----------     ---------
Loss attributable to the Group                          (32,630)      (660,592)
---------------------------                            ----------     ---------
Weighted average number of shares in issue during
the year - basic                                     34,280,833     34,280,833
---------------------------                            ----------     ---------

Basic and diluted loss per share are the same as there is no dilution at (0.10p)
(2006: (1.93p)).


4.       The directors do not propose the payment of a dividend.



                                      END




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