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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| EKF Diagnostics Holdings PLC | AQSE:EKF.GB | Aquis Stock Exchange | Ordinary Share | GB0031509804 | Ordinary Shares 1p |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 3.64% | 28.50 | 26.00 | 31.00 | 28.874 | 27.50 | 27.50 | 8,119 | 15:01:43 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2023 to May 2024
TIDMEKF
RNS Number : 5989N
EKF Diagnostics Holdings PLC
26 September 2023
EKF Diagnostics Holdings plc
("EKF", the "Company" or the "Group")
Half-year Report
EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global diagnostics business , announces its unaudited interim results for the six months ended 30 June 2023, a period of continued growth in Point-of-Care and good progress in the Life Sciences fermentation capacity expansion.
Trading in the first half of 2023 ("H1 2023") was in line with Board expectations, and revised guidance for the full year performance was provided in the 12 September 2023 Trading Update.
Financial highlights (from continuing operations)
-- Revenue from continuing operations of GBP26.9m (H1 2022: GBP37.5m)
- Revenue growth in continuing operations, excluding largely COVID-related activities in Contract Manufacturing and Laboratory Testing including the effect in 2022 of the US inventory payment, of 6.8%
-- Adjusted EBITDA* of GBP4.4m (H1 2022: GBP9.7m)
-- Gross profit of GBP11.8m (H1 2022: GBP17.7m) with GM% marginally improved to 44.0% (H1 2022: 43.3%)
-- Loss before tax of GBP0.03m (H1 2022: profit of GBP4.1m) -- Net cash generated from operations of GBP2.5m (H1 2022: GBP8.4m) -- Cash and cash equivalents of GBP9.2m (30 June 2022: GBP19.1m) (31 December 2022: GBP11.6m) - reflecting investment in South Bend enzyme fermentation facility
- of which GBP2.4m (30 June 2022: GBP2.6m, 31 Dec 2022: GBP2.4m) is held by EKF's Russian subsidiary and subject to regulatory restrictions.
* Earnings before interest, tax, depreciation and amortisation adjusted for exceptional items and share-based payments
Operational highlights
-- Business division revenues: - Point-of-Care: up 10.2% to GBP16.6m (H1 2022: GBP15.1m) - Life Sciences: excluding COVID-revenues up 14.5% to GBP7.5m (H1 2022: GBP6.5m)
- Other: GBP1.3m (H1 2022: GBP5.0m, which include GBP3.5m relating to cash received for US inventory)
-- Quality Management Audits completed at new fermentation facility in South Bend, with all fermenting units on site
-- First customer order received for new South Bend facility, with official site opening planned for 25 October 2023
-- Additional cost reduction and operational efficiency measures to further benefit FY 2024 performance
-- Board changes: Julian Baines, Executive Chair, remaining in role on a longer-term basis and Steve Young appointed as CFO in September 2023 after an orderly handover
Julian Baines, Executive Chair of EKF, commented: " Looking forward our core business is in a very strong position with continued growth momentum seen in our Point-of-Care division and in sales of <BETA>-HB. With the capacity expansion at our South Bend facility nearing completion, and having already received our first purchase order we look forward to delivering strong growth in enzyme fermentation revenues in 2024."
Copies of the interim results and associated investor presentation are available here:
https://www.ekfdiagnostics.com/documents-reports.html
EKF Diagnostics will be hosting a live online presentation open to all existing and potential investors on Tuesday 26 September at 5.30pm (BST), via the Investor Meet Company platform. Investors can sign up to Investor Meet Company for free and add to meet EKF Diagnostics via:
https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor
Investors who already follow EKF on the Investor Meet Company platform will automatically be invited.
A recording of the presentation, a PDF of the slides used, and responses to the Q&A session will be available on the Investor Meet Company platform afterwards.
Hot Features
Premium
EKF Diagnostics Holdings plc www.ekfdiagnostics.com
Julian Baines, Executive Chair / Stephen Young, via Walbrook PR
CFO
Singer Capital Markets (Nominated Adviser & Broker) Tel: +44 (0)20 7496
3000
Aubrey Powell / Oliver Platts
Walbrook PR (Media & Investor Tel: +44 (0)20 7933 8780 or ekf@walbrookpr.com
Relations)
Paul McManus / Lianne Applegarth Mob: +44 (0)7980 541 893 / +44 (0)7584
391 303
The persons responsible for arranging the release of this announcement
on behalf of the Company are Julian Baines, Executive Chair, and Stephen Young, CFO.
About EKF Diagnostics Holdings plc ( www.ekfdiagnostics.com )
EKF is an AIM-listed global diagnostics business focussed on:
-- Point-of-Care analysers in the key areas of Hematology and Diabetes, as well as Central Laboratory products including clinical chemistry reagents, analysers and centrifuges
-- Life Sciences services provide specialist manufacture of enzymes and custom products for use in diagnostic, food and industrial applications, as well as other higher value Contract Manufacturing services
EKF has headquarters in Penarth (near Cardiff) and operates five manufacturing sites across the US and Germany, selling into over 120 countries world-wide.
BUSINESS REVIEW
Despite 2023 remaining a transitional year for EKF, we are very pleased with the strong performance delivered by our core established business in the first half of the year. In particular, our Point-of-Care division has delivered double digit organic growth with growth recorded across our Diabetes and Hematology ranges. Our Life Sciences business has also benefitted from a 27% year-on-year increase in sales of Beta-Hydroxybutyrate (<BETA>-HB) and remains an opportunity for significant growth once new fermentation capacity comes online.
Revenues for the six months ended 30 June 2023 were GBP26.9m (H1 2022: GBP37.5m) and adjusted EBITDA was GBP4.4m (H1 2022: GBP9.7m). However, growth in our continuing operations, excluding largely COVID-related activities in Contract Manufacturing and Laboratory Testing, was 6.8% to GBP24.9m (H1 2022: GBP23.3m).
OPERATIONAL OVERVIEW
The strong first half performance from both Point-of-Care ("POC") and the Life Sciences division can be seen below once the impact on the prior year comparison of historical COVID-related revenues is separated out.
Divisional revenues H1 2023 H1 2022 +/- %
GBP millions Yr-on-Yr
-------------------------------------------------------- ------------ ------------ --------------
Point-of-Care (POC) 16.6 15.1 +9.9%
Life Sciences 8.5 15.3 -44.4%
-------------------------------------------------------- ------------ ------------ --------------
Life Sciences: <BETA>-HB and Fermentation
sales 7.5 6.6 +13.6%
Life Sciences: other COVID-related revenues 1.0 8.7 - 88.5%
Other* 1.8 7.1 -74.6%
-------------------------------------------------------- ------------ ------------ --------------
Total Group Revenues 26.9 37.5 -28.3%
-------------------------------------------------------- ------------ ------------ --------------
Total Group Revenues (excluding all COVID-related
revenues) 24.9 23.3 +6.8%
-------------------------------------------------------- ------------ ------------ --------------
* Other revenue relating to US inventory payment, shipping and handling recharges, repairs and other sundries
Includes GBP3.5m relating to US inventory receipt
Point-of-Care
Point-of-Care Providing a portfolio of Point-of-Care analysers and
(POC) consumables, particularly for use in the area of Hematology
and Diabetes, for use in hospital and research laboratories,
doctors' offices, blood banks and for in-field anaemia
screening programmes. EKF has an estimated 80,000
hemoglobin, hematocrit, HbA1c, glucose and lactate
analysers in regular use across more than 100 countries.
Also includes Central Laboratory products including
clinical chemistry reagents, analysers and centrifuges.
We are delighted that the Point-of-Care division continues to deliver steady growth and sales growth of just over 10% reflecting an increase in product sales across our Diabetes and Hematology ranges to GBP16.6m (H1 2022: GBP15.1m). Revenues from this division contributed 63.1% of total revenues and continues to offer EKF a solid foundation with the majority of sales representing steady recurring revenue from high margin consumables.
Our POC hematology product portfolio demonstrated good growth in the first half recording sales of GBP7.21m, an increase of 11.4% year-on-year (H1 2022: GBP5.68m). We have continued to benefit from the growth in anaemia screening programmes post-pandemic and our stand-out performer in the first half was the DiaSpect Tm, a hand-held hemoglobin analyzer, which saw H1 sales increase by 44% to GBP3.21m (H1 2022: GBP2.23m). Sales in Hemocontrol, our point-of-care hemoglobin analyser, were GBP2.90m (H1 2022: GBP3.10m) after showing a significant uplift from H1 2021 (GBP2.13m sales) and sales for other hematology products such as HemataSTAT and Ultracrit remained broadly flat.
Our diabetes product range delivered sales growth of 6.9% to GBP6.07m (H1 2022: GBP5.68m). The biggest contributor to sales in this range is our Biosen series of glucose analyzers, a familiar name in laboratories and diabetes clinics round the world. In H1 2022 we recorded sales of GBP2.70m (H1 2022: GBP2.85m). Revenues from our HbA1c analyzer product lines grew during the period: Quo-Lab sales were up 15.7% to GBP1.92m (H1 2022: GBP1.66m), and sales of Quo-Test were up 24.0% to GBP1.45m (H1 2022: GBP1.16m).
During the period we also derived our first revenues from our EKF Link product, a digital connectivity solution for the secure management of POC analysers and associated data on one centralised platform. Integrated with hospital and laboratory IT systems, EKF Link enables real-time remote management of data, such as patient test results, allowing physicians and other healthcare professionals to easily evaluate patients' data securely and accurately from a remote setting.
H1 2023 has seen the best revenue performance to date from our Point-of-Care Division and we are delighted to see that this strong performance has continued into the third quarter, as the high-level of demand for reagent-free hemoglobin and HbA1c analyzers continues.
This division is also expected to benefit from a number of initiatives that will improve productivity, margins and our competitive advantage. The automation process for the manufacture of disposable cuvettes for the DiaSpect Tm is being consolidated into our own manufacturing site in Barleben, Germany, from a third-party producer. In addition, the manufacturing automation of our Hemocontrol single-pack cuvette at Barleben will be completed and online by the end of the year. Not only will this have a positive impact on margins, but also positions EKF as the only company offering single-pack cuvettes, giving us an advantage in emerging markets where wastage is a problem.
The regulatory team at EKF continues to work towards meeting the additional requirements under the new In Vitro Diagnostic Regulation (IVDR) and other legislation.
Life Sciences
Life Sciences Providing specialist manufacture of enzymes and custom
products for use in diagnostic, food and industrial
applications, as well as other higher value Contract
Manufacturing services. Also included the production
of <BETA>-HB, a reagent used to identify patients
suffering from diabetic ketoacidosis.
Our Life Sciences division delivered revenues of GBP8.5m, contributing 31.6% of total revenues. The year-on-year comparative for 2022 (H1 2022: GBP15.3m) includes GBP8.7m of COVID-related revenues from Contract Manufacturing, however focussing solely on the on-going <BETA>-HB and enzyme fermentation sales, Life Sciences produced 14.5% organic growth, driven by strong <BETA>-HB sales.
We remain one of the clear market leaders for the supply of <BETA>-HB, a reagent used to detect ketones for patients suffering from diabetic ketoacidosis, as well as many other clinical applications. <BETA>-HB sales for H1 2023 were up 27.3% to GBP6.31m (H1 2022: GBP4.96m).
Our specialist enzyme fermentation business recorded revenues of GBP1.23m (H1 2022: GBP1.63m) from our existing site in Elkhart, with continued demand from our large corporate customers to create and deliver high quality enzymes and biomolecules for use in a variety of industrial applications.
As outlined in our recent Trading Update, good progress is being made to complete the increased fermentation capacity at the South Bend facility in Indiana. All of the new fermenting units are on site and in the process of installation, validation and verification. We have successfully completed ISO 9001:2015 and ISO 13485:2016 Quality Management Audits at our sites and we expect to see a steady build-up of revenues from this new capacity during FY 2024. We expect to host a ribbon cutting ceremony for the official opening of the new site on 25 October 2023.
We are very pleased to announce receipt of our first purchase order for enzyme manufacturing services for our new facility and this will contribute limited revenues in Q4 FY 2023 and, as these scale-up, will cornerstone the substantial revenue growth we expect to see next year from this new capacity.
Operational efficiencies and continued cost control
We continue to expect that improvements in adjusted EBITDA margin will be seen in the second half. We also recognise that there are further cost savings and efficiency measures that can be implemented, and these will benefit FY 2024. We expect to see FY 2024 margins benefit further from the ramp-up in higher margin enzyme fermentation revenues within Life Sciences as utilisation of our additional capacity builds.
Russia and Ukraine
EKF owns 60% of O.O.O. EKF Diagnostika, a distribution subsidiary located in Moscow which sells EKF POC products and other third-party products into Russia and neighbouring states. We continue to provide essential medical supplies to the region, and whilst sales have continued in the first half of the year, the number of products that we can supply into the region has reduced in line with current sanctions.
Cash held in Russia totalled GBP2.39m at the period end. Restrictions remain in place regarding the payment of foreign dividends in Russia and so this cash remains partly inaccessible. We have been able to arrange for limited dividends to be paid over in July and August, however there can be no assurance that this will be able to continue. The Board continues to explore options available to realise the value tied up in Russia.
Board Changes
Post-period end we announced the appointment of Steve Young as CFO, who has been working as a consultant over the summer to ensure an orderly handover from his predecessor. Steve is an experienced FD and CFO with a strong working knowledge of how AIM companies operate. I worked closely with Steve at BBI Holdings plc for a number of years and am delighted to have him on board at EKF.
I have also confirmed to the Board my increased commitment as Executive Chairman and I have a singular focus to ensure we are on track to meet or exceed revised guidance and to deliver the significant long-term growth prospects that I am confident our Life Sciences division offers to shareholders.
Outlook
In our recent guidance update we confirmed that for the full year ending 31 December 2023 we expect to deliver revenues of around GBP53m and adjusted EBITDA in the region of GBP10m.
Looking forward our core business is in a very strong position, with continued growth momentum seen in our Point-of-Care division and in sales of <BETA>-HB. With the capacity expansion at our South Bend facility nearing completion, and already having received our first purchase order and we look forward to delivering strong growth in enzyme fermentation revenues in 2024.
Increased utilisation of our additional capacity at South Bend is key to our future growth. My colleagues and I are determined to ensure we succeed in delivering this and the Board thanks the wider team for its diligent commitment to our expansion plans. With strong engagement from current and prospective customers to underpin increasing utilisation over time, our confidence in the longer-term, significant growth prospects for EKF remains high.
Julian Baines
Executive Chair
26 September 2023
Financial review
In March 2023, all of the share capital of Advanced Diagnostic Laboratory LLC was sold to certain members of its management for a consideration consisting of 1,200,000 EKF ordinary shares which were returned to EKF. These shares were valued at GBP343,800 and are held in treasury. Costs of the transaction were GBP107,000. In February 2023, the UK manufacturing operations, which had largely serviced UK COVID-related customers were closed down, resulting in a small number of redundancies.
Revenue
Revenue for the period was GBP26.8m (H1 2022: GBP37.5m).
Revenue by Business Unit:
Unaudited Unaudited
6 months ended 6 months ended
30 June 2023 30 June 2022
GBP'000 GBP'000 +/- %
Point-of-Care 16,627 15,093 10.2%
Life Sciences 8,511 15,244 (44.2%)
Other* 1,734 7,134 (78.2%)
------------
Total revenue 26,872 37,471 (28.3%)
--------------------- --------------------- ------------
Considering our core established business units , which excludes largely COVID-related revenue including that from Contract Manufacturing and Laboratory Services totalling GBP2.0m in 2023 (H1 2022: GBP14.7m), the Group delivered growth of 6.8% compared with the equivalent period in 2022.
* Other revenue relating to US inventory payment, shipping and handling recharges, repairs and other sundries
Revenue by Geographical Segment:
Unaudited Unaudited
6 months ended 6 months ended
30 June 2023 30 June 2022
GBP'000 GBP'000 +/- %
Continuing business
Germany 11,014 13,583 (18.9%)
USA 13,376 20,925 (36.1%)
Russia 1,690 2,037 (17.0%)
UK 792 926 (14.5%)
------------
Total revenue 26,872 37,471 (28.3%)
--------------------- --------------------- ------------
Geographic regions showing a decline is primarily due to the reduction in COVID-related Contracted Manufacturing activity. The 2022 amount for USA includes the GBP3.5m inventory payment. The Group's Russian subsidiary, which is 60% owned by the Group, is consolidated in full in accordance with accounting standards. The interest of the minority shareholders is included as a separate item in the Consolidated Income statement.
Gross profit
Gross profit was GBP11.8m (H1 2022: GBP17.7m). The gross profit margin was 44.0% (H1 2022: 43.3%). The gross profit has increased marginally mainly as a result of the mix of products and services.
Administrative expenses
In H1 2023, administration expenses (excluding exceptionals) reduced to GBP10.9m (H1 2022: GBP12.8m), representing 40.7% of revenue for the period (H1 2022: 34.1%, FY 2022: 34.8%). The increase is largely due to the reduced revenue. The Boards expects that cost savings and efficiency measures will be implemented in the second half which will benefit FY 2024.
The charge for depreciation of fixed assets and for the amortisation of intangibles is GBP3.3m (H1 2022: GBP3.4m).
Operating profit and adjusted earnings before interest tax and depreciation
The Group generated an operating loss of GBP0.07m (H1 2022: profit of GBP4.1m). We continue to consider that adjusted EBITDA gives a more meaningful measure of performance which for H1 2023 was GBP4.4m (H1 2022: GBP9.7m).
In H1 2023 adjusted EBITDA excludes a charge for share-based payments of GBPnil (H1 2022: charge of GBP0.5m) and exceptional charges of GBP1.2m (H1 2022: charge of GBP1.7m). The exceptional charge relates mainly to transition and restructure costs of certain operations in the US and Germany including provisions against inventory and the impairment of certain lease assets where the property is no longer required. The reduction in operating profit and adjusted EBITDA, in particular in the US and German regions relates to lower revenues associated with the end of the COVID-19 pandemic, and increased cost inflation.
Finance income
Net finance income is GBP0.04m (H1 2022: GBP0.01m). The income has increased because of higher interest income on funds held in Russia.
Tax
There is a tax charge of GBP0.1m (H1 2022: GBP1.7m). The decrease largely reflects the decrease in profit.
Earnings per share
Basic earnings per share from continuing operations has decreased to nil (H1 2022: 0.48p). There is no dilutive effect from the remaining share options, which have now lapsed.
Balance sheet
Fixed assets
We have capitalised GBP3.4m (H1 2022: GBP2.3m) of property, plant and equipment. The expenditure includes continuing work on adding capacity for Life Sciences in the US. Further expenditure in Life Sciences to complete the new facility in South Bend is planned for the second half of the year.
Intangible assets
The value of intangible fixed assets is GBP31.2m (31 December 2022: GBP33.8m). The decrease is mainly the result of exchange rate movements. An amount of GBP0.1m (H1 2022: GBP0.8m) has been capitalised during the first half.
Investments
Investments are held at fair value which has been calculated based on the market value of the shares which at 30 June 2023 was GBP1.1125 (31 December 2022: GBP0.725) per share for Renalytix and GBP0.1175 (31 December 2022: GBP0.125) per share for Verici Dx. The majority of the Group's shares in Verici were transferred to EKF shareholders in 2022 through a dividend in specie. In July 2023 the remaining Renalytix shares were sold for a consideration of GBP1.33m.
Deferred consideration
The deferred consideration at 30 June 2022 related to the acquisition of Advanced Diagnostic Laboratory LLC. (ADL). The remaining deferred consideration was cancelled as part of the disposal of ADL earlier this year.
Cash and working capital
The gross cash position at 30 June 2023 was GBP9.2m (31 Dec 2022: GBP11.6m), and the Group had cash net of bank borrowings of GBP9.1m (31 Dec 2022: GBP11.4m).
Cash generated from operations in H1 2023 is GBP2.5m (H1 2022: GBP8.4m). Trade debtors have increased as a result of timing effects in the run-up to period end.
Cash and cash equivalents held by the Russian subsidiary at 30 June 2023 totalled GBP2.4m (31 Dec 2022: GBP2.4m). These deposits are subject to regulatory restrictions, and therefore may not be available for general use by the other entities within the Group.
In July 2023, we disposed of our remaining shareholding in Renalytix plc for a consideration of GBP1.33m.
In March 2023 the Company agreed a loan facility of GBP3.0m. At 30 June 2023 this facility had not been utilised.. In addition the Group expects to finalise a further GBP3m undrawn facility from HSBC from late September 2023. The strength of the Group's balance sheet and the cash and loan resources available to it, aligned to the continuing performance of the business gives the Directors confidence that the business can continue to meet its obligations as they fall due, even under our worst-case scenarios, for at least the next 12 months.
Capital structure
1,200,000 ordinary shares were returned to the Company in April 2023 by the acquirer of ADL, at a value of GBP348,000. These shares are currently held in treasury. We have maintained shareholder authority to buy back shares, however we currently have no plans to make any further purchases.
Dividend
At the Annual General Meeting in May 2023, shareholders approved the payment of a dividend of 1.2p per ordinary share, to be paid on 1 December 2023 to shareholders on the register at close of business on 3 November 2023. As this declaration is irrevocable, the value of GBP5.445m is shown as a liability with the debit shown in the statement of changes in equity.
Stephen Young
Chief Financial Officer
26 September 2023
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 30 JUNE
2023
Unaudited
Unaudited 6 months Audited
6 months ended Year ended
ended 30 30 June 31 December
June 2023 2022 2022
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3 26,872 37,471 66,635
Cost of sales (14,855) (19,727) (35,823)
Exceptional items - other
charged to cost of sales (196) (1,499) (6,774)
--------------- -------------- -----------------
Gross profit 11,821 16,245 24,038
Administrative expenses (10,939) (12,791) (23,177)
Exceptional items - impairment
of assets (671) (183) (10,384)
Exceptional items - other (341) - (367)
Other income 63 880 919
--------------- -------------- -----------------
Operating (loss)/profit (67) 4,151 (8,971)
------------------------------------- ----------
Depreciation and amortisation (3,274) (3,361) (6,658)
Share-based payments - (517) 308
Exceptional items 4 (1,209) (1,682) (17,525)
EBITDA before exceptional
items and share-based payments 4,416 9,711 14,904
------------------------------------- ---------- --------------- -------------- -----------------
Finance income 59 57 131
Finance costs (18) (68) (102)
--------------- -------------- -----------------
(Loss)/profit before income
tax (26) 4,140 (8,942)
Income tax charge 5 (144) (1,717) (634)
--------------- -------------- -----------------
(Loss)/profit for the period (170) 2,423 (9,576)
--------------- -------------- -----------------
(Loss)/profit is attributable
to:
Owners of the parent (358) 2,213 (10,101)
Non-controlling interest 188 210 525
(170) 2,423 (9,576)
--------------- -------------- -----------------
(Loss)/earnings per ordinary
share attributable to the
owners of the parent during
the period 6
Pence Pence Pence
Basic (0.08) 0.48 (2.21)
Diluted (0.08) 0.48 (2.21)
----------- ---------- -----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE 6 MONTHSED 30
JUNE 2023
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (170) 2,423 (9,576)
Other comprehensive income/(expense):
Items that will not be reclassified
to profit or loss
Changes in fair value of equity
instruments at fair value
through other comprehensive
income (net of tax) 437 (5,307) (6,096)
Items that may be subsequently
reclassified to profit or
loss
Currency translation differences (3,502) 6,520 6,811
Other comprehensive (loss)/income
(net of tax) (3,065) 1,213 715
--------------- --------------- -----------------
Total comprehensive (loss)/income
for the period (3,235) 3,636 (8,861)
--------------- --------------- -----------------
Attributable to:
Owners of the parent (3,139) 3,024 (9,420)
Non-controlling interests (96) 612 559
--------------- --------------- -----------------
Total comprehensive (loss)/income
for the period (3,235) 3,636 (8,861)
--------------- --------------- -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Unaudited Unaudited Audited as
as at 30 as at 30 at 31 December
June 2023 June 2022 2022
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant
and equipment 7 21,576 18,170 20,435
Right-of-use
assets 7 507 1,495 1,279
Intangible assets 8 31,163 43,387 33,772
Investments 1,556 1,566 1,119
Deferred tax
assets 878 23 925
Total non-current
assets 55,680 64,641 57,530
---------------- ------------------- -----------------------
Current Assets
Inventories 9,414 12,969 9,434
Trade and other
receivables 7,979 12,236 10,739
Corporation tax
receivable 13 408 10
Cash and cash
equivalents 9,165 19,138 11,578
Total current
assets 26,571 44,751 31,761
---------------- ------------------- -----------------------
Total assets 82,251 109,392 89,291
================ =================== =======================
Equity
attributable
to owners of the
parent
Share capital 4,537 4,549 4,549
Share premium 7,375 7,375 7,375
Other reserve (182) (184) (629)
Foreign currency
reserves 6,129 8,931 9,590
Retained earnings 46,326 64,775 52,461
---------------- ------------------- =======================
64,185 85,446 73,346
Non-controlling
interest 1,081 1,230 1,177
---------------- ------------------- =======================
Total equity 65,266 86,676 74,523
---------------- ------------------- =======================
Liabilities
Non-current
liabilities
Borrowings - 44 -
Lease liabilities 223 793 537
Deferred
consideration - 173 -
Deferred tax
liability 2,140 3,795 2,493
---------------- ------------------- -----------------------
Total non-current
liabilities 2,363 4,805 3,030
---------------- ------------------- -----------------------
Current
liabilities
Trade and other
payables 11,702 14,148 8,288
Lease liabilities 400 902 873
Deferred -
consideration - 72
Current income tax
liabilities 2,476 2,611 2,440
Borrowings 44 178 137
---------------- ------------------- -----------------------
Total current
liabilities 14,622 17,911 11,738
---------------- ------------------- -----------------------
Total liabilities 16,985 22,716 14,768
---------------- ------------------- -----------------------
Total equity and
liabilities 82,251 109,392 89,291
================ =================== =======================
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHSED 30 JUNE 2023
Audited
Unaudited Year
Unaudited 6 months to 31
6 months ended ended 30 December
30 June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
(Loss)/profit before income tax (26) 4,140 (8,942)
Adjustments for
- Depreciation 1,590 1,505 3,098
- Amortisation and impairment charges 1,684 1,856 3,560
- Exceptional items 1,209 1,682 17,525
- (Profit)/loss on disposal of assets 5 19 28
- Share-based payments - 517 (308)
- Cash outflows relating to exceptional
items (157) - (617)
- Foreign Exchange - - (71)
- Bad debt written down 174 - 127
- Net finance costs (41) 11 (29)
Changes in working capital
- Inventories (445) (693) (815)
- Trade and other receivables 1,708 1,698 1,276
- Trade and other payables (2,862) (323) (2,177)
------------------------------ ---------------------- ----------------
Cash generated from operations 2,839 10,412 12,655
Interest received 59 57 85
Interest paid (3) (39) (46)
Income tax paid (389) (1,945) (3,006)
------------------------------ ---------------------- ----------------
Net cash generated from operating
activities 2,506 8,428 9,688
Cash flow from investing activities
Payment for investments - (2,930) (2,930)
Payment for property, plant and
equipment (PPE) (3,345) (2,167) (4,434)
Payment for intangibles (138) (819) (1,394)
Payment for acquisition of subsidiaries,
net of cash acquired - (403) (403)
Proceeds from sale of PPE 59 6 229
------------------------------ ---------------------- ----------------
Net cash used in investing activities (3,424) (6,256) (8,932)
------------------------------ ---------------------- ----------------
Cash flow from financing activities
Dividend paid to company shareholders - - (5,459)
Payment for shares bought back - (3,896) (3,896)
Repayments of borrowings (93) (525) (613)
Principal elements of lease payments (507) (551) (1,071)
Dividends payment to non-controlling -
interests - -
------------------------------ ---------------------- ----------------
Net cash used in financing activities (600) (4,972) (11,039)
------------------------------ ---------------------- ----------------
Net decrease in cash and cash
equivalents (1,518) (2,800) (10,283)
Cash and cash equivalents at beginning
of period 11,578 20,341 20,341
Exchange gains on cash and cash
equivalents (895) 1,597 1,520
------------------------------ ---------------------- ----------------
Cash and cash equivalents at end
of period 9,165 19,138 11,578
============================== ====================== ================
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
FOR THE 6 MONTHSED 30 JUNE
2023
Share Share Other Foreign Retained Total Non-controlling Total
Capital Premium Reserve Currency earnings interest equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2022 4,639 7,375 5,033 2,813 74,264 94,124 618 94,742
Comprehensive
income/(expense)
Profit for the
period - - - - 2,213 2,213 210 2,423
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - (5,307) - - (5,307) - (5,307)
Currency
translation
differences - - - 6,118 - 6,118 402 6,520
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
comprehensive
income/(expense) - - (5,307) 6,118 2,213 3,024 612 3,636
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Acquisition of
own
shares (90) - 90 - (3,896) (3,896) - (3,896)
Dividends to
owners - - - - (7,806) (7,806) - (7,806)
Dividends to - - - - - - - -
non-controlling
interest
Total
contributions
by and
distributions
to owners (90) - 90 - (11,702) (11,702) - (11,702)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 30 June 2022 4,549 7,375 (184) 8,931 64,775 85,446 1,230 86,676
Comprehensive
income/(expense)
Profit for the
period - - - - (12,314) (12,314) 315 (11,999)
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - (445) - - (445) - (445)
Acquisition of
own
shares - - (344) - - (344) - (344)
Currency
translation
differences - - - 659 (1) 658 (368) 290
Total
comprehensive
income/(expense) - - (789) 659 (12,315) (12,445) (53) (12,498)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Reserve transfer - - 344 - 1 345 - 345
Total
contributions
by and
distributions
to owners - - 344 - 1 345 - 345
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 31 December
2022 4,549 7,375 (629) 9,590 52,461 73,346 1,177 74,523
Comprehensive
income
Profit for the
period - - - - (358) (358) 188 (170)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - 437 - - 437 - 437
Currency
translation
differences - - (2) (3,461) 12 (3,451) (284) (3,735)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
comprehensive
income/(expense) - - 435 (3,461) (346) (3,372) (96) (3,468)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Acquisition of
own
shares (12) - 12 - (344) (344) - (344)
Dividends to
owners - - - - (5,445) (5,445) - (5,445)
Total
contributions
by and
distributions
to owners (12) - 12 - (5,789) (5,789) - (5,789)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 30 June 2023 4,537 7,375 (182) 6,129 46,326 64,185 1,081 65,266
============= ============= ============ ============= ============= ============= ==================== =============
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
EKF Diagnostics Holdings Plc is a company incorporated and domiciled in the United Kingdom. The Company is a public limited company, which is listed on the Alternative Investment Market of the London Stock Exchange. The address of the registered office is Avon House, 19 Stanwell Road, Penarth, Cardiff CF64 2EZ.
The principal activity of the Group is the development, manufacture, and supply of products and services into the in-vitro diagnostic (IVD) market place. The Group has presence in the UK, USA, Germany, and Russia, and sells throughout the world including Europe, the Middle East, the Americas, Asia, and Africa.
The financial statements are presented in British Pounds Sterling, the currency of the primary economic environment in which the Company's headquarters is operated. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial liabilities at fair value through profit and loss and certain financial assets measured at fair value through other comprehensive income.
The financial information in these interim results is that of the holding company and all of its subsidiaries as at 30 June 2023. It has been prepared in accordance with UK-adopted International Accounting Standards and the Companies Act 2006 as applicable to companies reporting under those standards. The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2022 and which will form the basis of the 2023 financial statements except for a number of new and amended standards which have become effective since the beginning of the previous financial year. These new and amended standards are not expected to materially affect the Group. The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.
Certain statements in this announcement constitute forward-looking statements. Any statement in this announcement that is not a statement of historical fact including, without limitation, those regarding the Company's future expectations, operations, financial performance, financial condition and business is a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, amongst other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this announcement and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this announcement should be construed as a profit forecast.
The financial information presented herein does not constitute full statutory accounts under Section 434 of the Companies Act 2006 and was not subject to a formal review by the auditors. The financial information in respect of the year ended 31 December 2022 has been extracted from the statutory accounts which have been delivered to the Registrar of Companies. The Group's Independent Auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the half years ended 30 June 2023 and 30 June 2022 is unaudited and the twelve months to 31 December 2022 is audited.
2. Significant accounting policies
Going concern
The Directors have considered the applicability of the going concern basis in the preparation of these financial statements. This included the review of internal budgets and financial results which show, taking into account reasonably plausible changes in financial performance, that the Group will be able to operate within the level of its current funding arrangements.
Following the end of the COVID-19 pandemic, the Group's core established business has now returned to normal. The business has seen a significant reduction in pandemic-related contract manufacturing and testing activities and as a result has closed its UK manufacturing operations and disposed of its US laboratory testing business, ADL Health.
The Group has revenues from customers in Russia which are serviced by our entity based in Moscow. As a result of the continuing sanctions imposed on Russia by the EU, the USA and other countries, there are enhanced risks in respect of our Russian entity, including regulatory restrictions and credit risk to cash balances, its ability to collect debtors, and EKF's ability to import products into Russia. In addition, action by the Russian Government is currently restricting the Russian entity's ability to pay dividends to its shareholders. In preparing a downside going concern forecast we have discounted future sales and cash from this region entirely.
The strength of the Group's balance sheet aligned to the continuing performance of the business gives the Directors confidence that the business can continue to meet its obligations as they fall due, even under our worst-case scenarios, for at least the next 12 months. In addition, the Group has secured a committed GBP3m of funding from the North Atlantic Smaller Companies Investment Trust, to be drawn down if necessary. Accordingly, the Directors are satisfied they can prepare the accounts on a going concern basis.
3. Segmental reporting
Management has determined the Group's operating segments based on the monthly management reports presented to the Chief Operating Decision Maker ('CODM'). The CODM is the Executive Directors and the monthly management reports are used by the Group to make strategic decisions and allocate resources.
The principal activity of the Group is the design, development, manufacture and sale of diagnostic instruments, reagents and certain ancillary products, as well as central laboratory reagents, primarily into the in-vitro diagnostic (IVD) market . This activity takes place across various countries, such as the USA, Germany, Russia, and the United Kingdom, and as such the Board considers the business primarily from a geographic perspective. Although not all the segments meet the quantitative thresholds required by IFRS 8, management has concluded that all segments should be maintained and reported. In addition, the COMD considers the segmental revenue performance of business segments.
The reportable segments derive their revenue primarily from the manufacture and sale of medical diagnostic equipment and reagents. Other services include the servicing and distribution of third party company products under separate distribution agreements. Transactions between segments consist of the sale of products for resale. The basis of accounting for these transactions is the same as for external revenue.
Currently the key operating performance measures used by the CODM are Revenue and adjusted EBITDA (earnings before interest, tax, depreciation and amortisation, adjusted for exceptional items and share-based payments).
The segment information provided to the Board for the reportable geographic segments is as follows:
Period ended 30 June 2023 unaudited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Income statement
Revenue 13,419 13,376 1,690 792 29,277
Inter-segment (2,405) - - - (2,405)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
External revenue 11,014 13,376 1,690 792 26,872
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Adjusted EBITDA* 2,765 3,059 546 (1,954) 4,416
Share-based payment - - - - -
Exceptional items 37 (719) - (527) (1,209)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
EBITDA 2,802 2,340 546 (2,481) 3,207
Depreciation (418) (967) (25) (180) (1,590)
Amortisation (880) (125) - (679) (1,684)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Operating profit/(loss) 1,504 1,248 521 (3,340) (67)
Net finance costs (1) - 57 (15) 41
Income tax (321) 163 (109) 123 (144)
Profit/(loss) for the
period 1,182 1,411 469 (3,232) (170)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Segment assets
Operating assets 32,860 74,876 578 (21,265) 87,049
Inter-segment assets 254 (18,662) - 4,445 (13,963)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
External operating assets 33,114 56,214 578 (16,820) 73,086
Cash and cash equivalents 2,592 4,100 2,388 85 9,165
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Total assets 35,706 60,314 2,966 (16,735) 82,251
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Segment liabilities
Operating liabilities (3,824) 21,217 324 13,187 30,904
Inter-segment liabilities 9,494 (17,775) - (5,682) (13,963)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
External operating liabilities 5,670 3,442 324 7,505 16,941
Borrowings 44 - - - 44
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Total liabilities 5,714 3,442 324 7,505 16,985
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Other segmental information
Non-current assets - PPE 6,043 14,143 95 1,295 21,576
Non-current assets - Right-of-use
assets 197 288 2 20 507
Non-current assets - Intangibles 18,554 8,292 68 4,249 31,163
Intangible assets -additions 112 26 - - 138
PPE - additions 428 2,910 - 7 3,345
Right-of-use assets - additions 52 - - - 52
Year ended December 2022 audited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================== =============== ================= ============== ================ ================
Income statement
Revenue 30,384 37,220 4,202 1,427 73,233
Inter-segment (6,192) (398) - (8) (6,598)
============================== =============== ================= ============== ================ ================
External revenue 24,192 36,822 4,202 1,419 66,635
============================== =============== ================= ============== ================ ================
Adjusted EBITDA* 8,089 8,309 1,563 (3,057) 14,904
Exceptional items -
impairments (32) (10,324) - (28) (10,384)
Exceptional items - other (1,857) (4,909) - (375) (7,141)
Share-based payments - - - 308 308
============================== =============== ================= ============== ================ ================
EBITDA 6,200 (6,924) 1,563 (3,152) (2,313)
Depreciation (744) (1,925) (21) (408) (3,098)
Amortisation (1,667) (1,835) - (58) (3,560)
============================== =============== ================= ============== ================ ================
Operating profit 3,789 (10,684) 1,542 (3,618) (8,971)
Finance income 1 1 118 11 131
Finance cost (33) (4) - (65) (102)
Income tax (790) 644 (348) (140) (634)
Profit for the year 2,967 (10,043) 1,312 (3,812) (9,576)
============================== =============== ================= ============== ================ ================
Segment assets
Operating assets 41,835 57,213 873 13,246 113,167
Inter-segment assets (10,608) (22,634) - (2,212) (35,454)
============================== =============== ================= ============== ================ ================
External operating assets 31,227 34,579 873 11,034 77,713
Cash and cash equivalents 2,774 5,785 2,366 653 11,578
============================== =============== ================= ============== ================ ================
Total assets 34,001 40,364 3,239 11,687 89,291
============================== =============== ================= ============== ================ ================
Segment liabilities
Operating liabilities 7,211 27,125 207 15,542 50,085
Inter-segment liabilities (986) (21,908) - (12,560) (35,454)
============================== =============== ================= ============== ================ ================
External operating
liabilities 6,225 5,217 207 2,982 14,631
Borrowings (excluding
lease liabilities) 137 - - - 137
============================== =============== ================= ============== ================ ================
Total liabilities 6,362 5,217 207 2,982 14,768
Other segmental
information
Non-current assets -
PPE 5,982 13,590 155 1,987 21,714
Non-current assets -
Intangibles 18,606 8,822 87 6,257 33,772
PPE - additions 877 5,909 84 102 6,972
Intangible assets -
additions 832 192 - 370 1,394
Period ended 30 June 2022 unaudited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Income statement
Revenue 16,283 21,323 2,037 927 40,570
Inter-segment (2,701) (398) - - (3,099)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External revenue 13,582 20,925 2,037 927 37,471
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Adjusted EBITDA* 4,989 6,911 665 (2,854) 9,711
Share-based payment - - - (517) (517)
Exceptional items (795) (755) - (132) (1,682)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
EBITDA 4,194 6,156 665 (3,503) 7,512
Depreciation (370) (898) (37) (200) (1,505)
Amortisation (468) (138) - (1,250) (1,856)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Operating profit/(loss) 3,356 5,120 628 (4,953) 4,151
Net finance costs (25) (3) 56 (39) (11)
Income tax (493) (996) (158) (70) (1,717)
Profit/(loss) for the
period 2,838 4,121 526 (5,062) 2,423
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Segment assets
Operating assets 32,707 89,337 1,047 (16,294) 106,797
Inter-segment assets (47) (16,699) - 203 (16,543)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External operating assets 32,660 72,638 1,047 (16,091) 90,254
Cash and cash equivalents 7,833 8,220 2,585 500 19,138
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Total assets 40,493 80,858 3,632 (15,591) 109,392
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Segment liabilities
Operating liabilities 1,046 24,045 439 14,524 40,054
Inter-segment liabilities 4,986 (19,199) - (3,347) (17,560)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External operating liabilities 6,032 4,846 439 11,177 22,494
Borrowings 222 - - - 222
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Total liabilities 6,254 4,846 439 11,177 22,716
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Other segmental information
Non-current assets - PPE 6,087 10,445 101 1,537 18,170
Non-current assets - Right-of-use
assets 139 1,072 4 280 1,495
Non-current assets - Intangibles 19,600 19,222 117 4,448 43,387
Intangible assets -additions 394 145 - 280 819
PPE - additions 357 1,769 - 41 2,167
Right-of-use assets - additions 78 72 - - 150
* Adjusted EBITDA represents earnings before interest, tax, depreciation and amortisation adjusted for exceptional items and share-based payments
Russian operations
In the context of an increased level of uncertainty, the Group has exercised critical judgements in applying its accounting policies in whether the Group should continue to consolidate its Russian business. The Group has applied judgement in regards to whether the Group continues to control its Russian subsidiary due to the restrictions imposed by the Russian government or any other authority. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The Russian government introduced various sanctions in recent months, including restrictions on the payment of dividends to "unfriendly states" that require consent from the Ministry of Finance of Russia. Since the Group continued to direct the operations and the Russian regulations currently do not prohibit the declaration and payment of dividends, the Group has taken the view that it has retained control through the six months ended 30 June 2023. Were the Group to conclude that it no longer retains control, the Russian operations would be treated as if they had been disposed of, with the associated assets and liabilities derecognised.
In July 2023, the Group sought and gained permission for its Russian entity to commence limited dividend payments, totalling around EUR70,000 per month. There is no certainty how long these payments will be able to continue.
Disclosure of Group revenues by geographic location
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP000 GBP000 GBP000
Americas
United States of America 10,832 17,620 30,941
Rest of Americas 1,689 1,771 4,126
Europe, Middles East and Africa
(EMEA)
Germany 4,248 4,245 8,001
United Kingdom 374 1,165 1,886
Ireland 1,006 5,229 5,253
Rest of Europe 2,207 1,641 3,715
Russia 1,690 2,037 4,202
Middle East 859 561 1,449
Africa 1,340 656 1,945
Asia and Rest of World
China 640 538 1,014
Rest of Asia and Oceania 1,987 2,008 4,103
Total Revenue 26,872 37,471 66,635
=============== =============== =================
Revenue by business segment, which is presented for illustrative purposes only, is as follows:
Unaudited Unaudited
6 months 6 months
ended 30 ended 30
June 2023 June 2022
GBP'000 GBP'000 +/- %
Continuing business
Point-of-Care 16,627 15,093 10.2%
Life Sciences 8,511 15,244 (44.2%)
Other* 1,734 7,134 (78.2%)
------------
Total revenue 26,872 37,471 (28.3%)
--------------- --------------- ------------
4. Exceptional items
Included within administration expenses and cost of sales are exceptional items as shown below:
Unaudited Unaudited Audited
6 months 6 months year
ended 30 ended 30 ended
June 2023 June 2022 31
December
2022
Note GBP000 GBP000 GBP000
Exceptional items include:
* Deferred consideration and settlement of warranty
claim a - - 2
* Business reorganisation costs - other charged to cost
of sales b (196) (1,499) (6,774)
* Business reorganisation costs - Impairment c (671) (183) (10,384)
* Business reorganisation costs - other charged to
operating expenses d (342) - (369)
Exceptional items (1,209) (1,682) (17,525)
-------------- -------------- -------------
a. Change in the value of deferred consideration relating to the acquisition of Advanced Diagnostic Laboratory LLC.
b. Costs associated with the transition and restructure of certain operations in the US, UK and Germany, which have been charged to cost of sales. The costs include provisions against certain COVID-19 related and other inventory and provisions for certain onerous contracts following the decision to focus on its other businesses.
c. Impairments associated with the transition and restructure of certain operations in the US, UK and Germany, which have been charged to operating expenses.
d. Costs associated with the transition and restructure of certain operations in the US, UK and Germany, which have been charged to operating expenses.
5. Income tax
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 30 2022
June 2023 June 2022
GBP000 GBP000 GBP000
Current tax
Current tax on profit for
the period 431 1,692 2,815
Adjustments for prior periods (9) - 62
--------------- --------------- -----------------
Total current tax 422 1,692 2,877
--------------- --------------- -----------------
Deferred tax
Origination and reversal of
temporary differences (278) 25 (2,243)
Total deferred tax (278) 25 (2,243)
--------------- --------------- -----------------
Income tax charge 144 1,717 634
=============== =============== =================
6. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period.
Diluted profit per share is calculated by adjusting the weighted average number of ordinary shares outstanding assuming conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary share, being share options. In August 2023 the remaining share options lapsed. The Company is holding 1,200,000 ordinary shares in treasury. These shares have therefore been excluded from the earnings per share calculation.
Unaudited Unaudited
6 months 6 months Audited
ended 30 ended year ended
June 2023 30 June 31 December
2022 2022
GBP'000 GBP'000 GBP'000
(Loss)/profit attributable
to owners of the parent (358) 2,213 (10,101)
---------------- ---------------- -----------------
Weighted average number of
ordinary shares
in issue 454,492,995 459,474,072 457,180,086
Assumed conversion of share
awards - 4,987 -
Assumed payment of equity deferred
consideration - 157,580 -
-----------------
Weighted average number of
ordinary shares - diluted 454,492,995 459,636,639 457,180,186
---------------- -----------------
Pence Pence Pence
Basic (0.08) 0.48 (2.21)
Diluted (0.08) 0.48 (2.21)
7. Property, plant and equipment
Group
Fixtures Right-of-use
Land and and Plant and Motor Assets under assets
buildings fittings machinery vehicles construct-ion GBP'000 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------------- -------------- -------------- ------------------ ------------------ ----- -------------
Cost
At 1 January
2022 10,711 2,012 13,188 160 2,470 3,010 31,551
Additions 304 101 683 - 1,079 150 2,317
Transfers - 215 (215) - - - -
Disposal - - (213) - - (207) (420)
Exchange
differences 694 72 951 79 255 192 2,243
------------- -------------- -------------- -------------- ------------------ ------------------
At 30 June
2022 11,709 2,400 14,394 239 3,804 3,145 35,691
Additions 260 32 905 48 3,158 252 4,655
Transfers 40 (205) 608 - (443) - -
Disposals (3) (363) (1,064) (20) (125) (78) (1,653)
Exchange
differences 144 108 34 (57) 21 3 253
------------- -------------- -------------- -------------- ------------------ ------------------
At 31
December
2022 12,150 1,972 14,877 210 6,415 3,322 38,946
Additions 1,033 23 1,432 - 857 52 3,397
Transfers 88 - 636 - (724) - -
Disposal (5) (403) (1,676) - (8) (960) (3,052)
Discontinued
operations - - - - - (176) (176)
Exchange
differences (435) (48) (516) (44) (296) (127) (1,466)
------------- -------------- -------------- -------------- ------------------ ------------------ ----- ---------------
At 30 June
2023 12,831 1,544 14,753 166 6,244 2,111 35,538
Depreciation
At 1 January
2022 2,595 1,249 8,625 81 - 1,135 13,685
Exchange
differences 222 50 666 43 - 67 1,048
Disposal - - (188) - - (207) (395)
Impairment - - 51 - - 132 183
Transfers - 194 (194) - - - -
Charge for
the period 255 158 555 14 - 523 1,505
------------- -------------- -------------- -------------- ------------------ ------------------ ----- ---------------
At 30 June
2022 3,072 1,651 9,515 138 - 1,650 16,026
Exchange
differences 4 100 (55) (33) - (15) 1
Disposal (3) (336) (1,029) (14) - (64) (1,466)
Impairment 1 - 1,078 - - (21) 1,058
Transfers - (194) 194 - - - -
Charge for
the period 270 150 694 (14) - 493 1,593
------------- -------------- -------------- -------------- ------------------ ------------------
At 31
December
2022 3,344 1,371 10,397 77 - 2,043 17,232
Exchange
differences (143) (31) (352) (16) - (74) (616)
Disposal (5) (378) (1,499) - - (960) (2,842)
Impairment - - - - - 353 353
Transfers 18 - (18) - - - -
Charge for
the period 310 193 682 11 - 394 1,590
----- ---------------
At 30 June
2023 3,524 1,155 9,211 72 - 1,604 15,566
------------- -------------- -------------- -------------- ------------------ ------------------ ----- ---------------
Net book value
30 June 2023 9,307 389 5,542 94 6,244 507 22,083
-------------
31 December 2022 8,806 601 4,480 133 6,415 1,279 21,714
---------- -------- ---------- -------- ---------- ---------- -------------
30 June 2022 8,637 749 4,879 101 3,804 1,495 19,665
---------- -------- ---------- -------- ---------- ---------- -------------
8. Intangible Fixed Assets
Group
Trademarks
trade
names & Customer Trade Develop-ment Software
Good-will licences relationships secrets costs GBP'000 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ---------------- ------------------ ------------- ------------------ -------------- -------------
Cost
At 1 January
2022 28,558 4,284 15,706 17,328 5,023 3,370 74,269
Additions - 15 - - 802 2 819
Disposal - - - - - - -
Impairment (1,177) - - (3,950) (28) - (5,155)
Exchange
differences 1,553 296 1,422 355 257 359 4,242
At 30 June
2022 28,934 4,595 17,128 13,733 6,054 3,731 74,175
Additions - (15) - - 590 - 575
Disposals - - - - (570) (25) (595)
Exchange
differences 442 52 145 317 92 25 1,073
At 31
December
2022 29,376 4,632 17,273 14,050 6,166 3,731 75,228
Additions - 15 - - 118 5 138
Disposal (4,161) (517) (1,293) - (427) (2,975) (9,373)
Transfer - 726 - (520) (206) - -
Exchange
differences (911) (211) (739) (366) (182) (94) (2,503)
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
At 30 June
2023 24,304 4,645 15,241 13,164 5,469 667 63,490
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
Amortisation
At 1 January
2022 1,177 3,021 11,825 14,664 1,579 109 32,375
Exchange
differences - 205 1,066 292 126 23 1,712
Disposal - - - - - - -
Impairment (1,177) - - (3,950) (28) - (5,155)
Charge for
the period - 110 705 494 228 319 1,856
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
At 30 June
2022 - 3,336 13,596 11,500 1,905 451 30,788
Exchange
differences - 31 100 246 24 (10) 391
Disposal - - - - (598) - (598)
Impairment 4,254 463 1,157 - 636 2,661 9,171
Charge for
the period - 217 733 268 244 242 1,704
At 31
December
2022 4,254 4,047 15,586 12,014 2,211 3,344 41,456
Exchange
differences (93) (154) (668) (323) (129) (78) (1,445)
Disposal (4,161) (517) (1,293) - (423) (2,975) (9,369)
Charge for
the period - 208 620 191 584 81 1,684
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
At 30 June
2023 - 3,584 14,245 11,882 2,243 372 32,326
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
Net book value
30 June 2023 24,304 1,061 996 1,282 3,226 295 31,164
----------- ---------- ---------- ---------- ---------- ---------- -----------
31 December 2022 25,122 585 1,687 2,036 3,955 387 33,772
----------- ---------- ---------- ---------- ---------- ---------- -----------
30 June 2022 28,934 1,259 3,532 2,233 4,149 3,280 43,387
----------- ---------- ---------- ---------- ---------- ---------- -----------
9. Disposal
In March 2023 Advanced Diagnostic Laboratory LLC, which traded as ADL Health, was sold to a company controlled by its Chief Executive.
The summary results from this business in the period from 1 January 2023 to disposal are as follows:
Advanced
Diagnostic
Laboratory
GBP000
Revenue 475
Cost of sales (505)
----------------
Gross loss (30)
Administrative expenses (114)
Net loss for the period (144)
----------------
Depreciation included in
administrative expenses 55
10. Dividends
A dividend to shareholders of the holding company of 1.2p per ordinary share has been provided during the period following shareholder approval at the Annual General Meeting of the Company in May 2023 (six months to 30 June 2022 and year to 31 December 2022: both 1.2p). It will be paid on Friday 1 December 2023 to shareholders on the register of members at the close of business on Friday 3 November 2023.
10. Availability of this announcement
This announcement and the Group's Interim Report for the six months ended 30 June 2023 are available from the Company's website, www.ekfdiagnostics.com . If you would like to receive a hard copy of the Interim Report, please contact the EKF Diagnostics Holdings plc offices on +44 (0)29 2071 0570 to request a copy.
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END
IR FELLLXKLZBBX
(END) Dow Jones Newswires
September 26, 2023 02:00 ET (06:00 GMT)
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