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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
IntelliAM AI plc | AQSE:INT | Aquis Stock Exchange | Ordinary Share | GB00BR56LJ77 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 110.00 | 105.00 | 120.00 | 112.50 | 110.00 | 110.00 | 0.00 | 16:29:49 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:3743P Intercare Group PLC 04 September 2003 4 September 2003 The Intercare Group plc The Intercare Group plc, the pharmaceutical manufacturer and distributor, today announces its interim results for the six months ended 30 June 2003. Key Financials H1 H1 2003 2002 Turnover #156.2m #129.3m Operating profit* #10.2m #12.6m Profit before tax* #7.3m #10.7m Adjusted earnings per share* 6.3p 9.5p Dividend per share 2.3p 2.2p Cash inflow from operations #13.7m #1.4m * Before goodwill and licence amortisation and exceptional items Statutory Figures H1 H1 2003 2002 Operating profit+ #3.2m #7.0m Profit before tax+ #0.3m #5.1m Basic (loss)/earnings per share+ (2.1p) 2.5p + After goodwill and licence amortisation and exceptional items Highlights * Record turnover achieved during period, with sales up 21% * Excellent results from core Manufacturing Division o Sales up 73% o Operating profits before amortisation up 39% * LCO Sante, acquired in October 2002, successfully integrated * Distribution Division significantly affected by strength of Euro * Strong operating cash inflow of #13.7m (2002: #1.4m) * Trading in line with expectations at commencement of second half Mr Ken Harvey, Chairman, commented: "The Group's core Manufacturing Division continues to perform strongly and we are confident of its prospects for the second half. Despite the major setback experienced by the Distribution Division in the first half, there are slow but tentative signs of progress in the distribution market as we commence the second half, with margins showing some improvement. Historically, Group profitability has been higher in the second half than the first. As indicated earlier this year, this effect is expected to be more marked than in the past. Overall trading in the early part of the second half of the year is in line with expectations." Enquiries The Intercare Group plc Tel: 01423 535500 John Parker, Chief Executive www.intercareplc.co.uk Jeremy Earnshaw, Group Finance Director Andrew Kay, Chief Operating Officer Financial Dynamics Tel: 020 7831 3113 David Yates/Ben Atwell High resolution images are available for the media to download free of charge from www.vismedia.co.uk Chairman's Statement Introduction During the first half of 2003, Intercare has benefited from its strategy to grow the Group's presence in the pharmaceutical manufacturing market. Trading across our core Manufacturing Division has been strong, particularly at Martindale, the specialist pharmaceutical manufacturer acquired in 2000. LCO Sante, acquired in October 2002, has been successfully integrated into the Group and is also performing well. However, the Group's results have been affected by a significant decline in the profitability of the Distribution Division in the first half of the year. Although generics performed in line with expectations, the parallel import sector in the Distribution Division suffered from a number of external factors outside the Group's control, in particular from movements in currency exchange rates. The rapid strengthening of the Euro in the earlier part of the year increased the costs of the products bought in Europe by about 10%. However, due to competitive pressures, it was very difficult to raise prices. As a result of this combination of events together with the expected patent expiry of Zocor, the leading cholesterol lowering drug, margins came under severe pressure. We have undertaken a thorough review of our costs and, where appropriate, have taken the necessary action. Sales, however, grew ahead of the market as a result of the recent completion of our national distribution network and the twice daily, efficient delivery service that we are able to supply to our retail customers. Going forward, the Group will continue to focus its efforts on pharmaceutical manufacturing. Driven by continuing consolidation amongst the world's major pharmaceutical companies, demand for the outsourced supply chain services provided by the Group continues to grow strongly. Worldwide demand for pharmaceutical contract manufacturing is forecast to increase by more than 10% per year and, within this, the pre-filled syringe market, where Intercare is particularly well-positioned through its operations at Federa in Belgium and France, is expected to experience above average growth. Group Results As highlighted earlier the results for the six months to 30th June 2003 demonstrate the strong performance of the Manufacturing Division offset by a significant decline in profit at the Distribution Division. The Group achieved a record turnover during the period of #156.2m (2002: #129.3m) an increase of 21%. Operating profit before amortisation of goodwill and product licences decreased by 19% to #10.2m (2002: #12.6m). Profit before tax and amortisation of goodwill and product licences decreased by 32% to #7.3m (2002: #10.7m). Adjusted earnings per share reflects the earnings achieved excluding the impact of goodwill and product licence amortisation. Adjusted earnings per share decreased by 34% to 6.3p during the six months to 30th June 2003 (2002: 9.5p). Profit before tax and after amortisation of goodwill and product licences decreased to #0.3m (2002: #5.1m). There was a loss per share of 2.1p (2002: earnings per share of 2.5p). The Board continues to adopt a progressive dividend policy, and the interim dividend for the six months to 30th June 2003 is increased to 2.3p (2002: 2.2p). Operating cash inflow was excellent during the period. The Group generated a healthy #13.7m of cash from operations (2002: #1.4m), including a reduction in working capital of #1.5m. The Group remains firmly on target to achieve its aim of converting some 60%-70% of annualised operating profit into operating cash inflow. This cash generation allows the Group to continue to fund its Manufacturing Division's long-term capital investment programme, which amounted to expenditure of #8.1m in the period. Most of this is being invested in the new pre-filled syringe factory in Belgium. Net borrowings increased to #73.1m at 30th June 2003 from #71.0m at 31st December 2002 (30th June 2002: #63.0m). Net assets were #100.0m at the period end, compared to #94.6m at 30th June 2002 and #101.7m at 31st December 2002. Trading Review Pharmaceutical Manufacturing Division This division incorporates Martindale in the UK, which manufactures specialist off patent drugs under its own brand identity, LCO Sante, Federa France, Veramic and Federa Belgium. The latter companies provide contract manufacturing, product development and logistics support for international external customers. Federa Belgium also manufactures and develops products for Martindale. Trading in the first six months of the year was strong with Martindale an excellent performer. Divisional sales grew by 73% to #51.3m (2002: #29.6m) and operating profits before amortisation of goodwill and product licences rose by 37% to #9.9m (2002: #7.2m). An operating margin before amortisation of goodwill and product licences of 19.3% was generated. Given the traditionally stronger second half, a trading margin for the full year above 20% is expected. The first half of 2003 included a full six month contribution from LCO Sante in France, which has been successfully integrated. The new hormone manufacturing suite is now operational and is expected to become FDA compliant by mid 2004. Working closely with external international pharmaceutical companies, LCO's new product development programme is looking very healthy over the medium term. Martindale demonstrated good growth in the first half, particularly in the manufacture of specials, addiction and specialist parenteral products. There has also been a welcome improvement in the Export/International segment. Market demand for pre-filled syringes from external customers remains strong benefiting both Federa Belgium and Federa France. In Belgium, Federa produces pre-filled syringes for flu and other vaccines, heparins and critical care products. Heparin is a long established medicine used in the prevention and treatment of a number of illnesses, including deep vein thrombosis. Federa France also produces heparin products for one of the largest pharmaceutical companies in the world. Good progress has been made in the first six months of 2003 on building and fitting out the new factory in Belgium. This is expected to become FDA compliant and to commence operations in 2005, following production and validation tests in the second half of 2004. In May, the Belgian authorities inspected the fridges in the new factory building and approved them for the storage of vaccines produced by Federa at its existing Brussels facility. Once the new factory is fully operational, equipment from the existing factory will be transferred across and the building sold. Pharmaceutical Distribution Division Turnover for the period was #104.9m (2002: #99.7m) representing an increase of 5.2%. However, affected in particular by the impact of currency movements in the parallel import sector, the division's operating profit before amortisation of goodwill fell to #1.7m (2002: #6.2m), an operating margin of 1.6% (2002: 6.2%). Generics performed according to expectations. The Lord Hunt review of generics pricing is on-going whilst the OFT recommendation with respect to new pharmacy locations and openings has been turned down by the Government and a much more limited proposal put forward. This is anticipated to be neutral to Intercare as are the implications of the Lord Hunt review. Meanwhile Mr Justice Laddie is still clarifying ongoing judgements which affect the packaging of parallel imported products but does not challenge their legality. With the opening of the Aberdeen depot in the first quarter of this year, the division's infrastructure is complete and the division is now able to offer at least a once-daily delivery to over 90% of its core customer base. Prospects The Group's core Manufacturing Division continues to perform strongly and we are confident of its prospects for the second half. Despite the major setback experienced by the Distribution Division in the first half, there are slow but tentative signs of progress in the distribution market with margins showing some improvement. Historically, Group profitability has been higher in the second half than the first. As indicated earlier this year, this effect is expected to be more marked than in the past. Overall trading in the early part of the second half of the year is in line with expectations. Ken Harvey Chairman 4th September 2003 Consolidated Profit and Loss Account for the six months ended 30 June 2003 6 months 6 months Year ended ended 30 ended 31 December June 2003 30 June 2002 2002 #'000 #'000 #'000 (unaudited) (unaudited) (audited) Note Group turnover 1 156,180 129,309 275,133 Operating profit Group operating profit before goodwill and licence amortisation 10,032 12,440 28,770 Goodwill and licence amortisation (6,769) (5,421) (11,515) _______ _______ _______ Group operating profit 3,263 7,019 17,255 Share of associate's 111 215 operating profit before goodwill amortisation 127 Goodwill amortisation (168) (168) (337) _______ _______ _______ Share of associate's operating loss (41) (57) (122) _______ _______ _______ Total operating profit 1 3,222 6,962 17,133 Net interest payable and similar charges (2,887) (1,894) (4,413) Exceptional finance fees - - (2,096) _______ _______ _______ Total net interest payable and similar charges (2,887) (1,894) (6,509) Profit on ordinary activities before taxation, goodwill and licence amortisation and exceptional item 7,272 10,657 24,572 Goodwill and licence amortisation (6,937) (5,589) (11,852) Exceptional finance fees 4 - - (2,096) _______ _______ _______ Profit on ordinary activities before taxation 335 5,068 10,624 Tax on profit on ordinary activities 5 (2,073) (3,091) (6,512) _______ _______ _______ (Loss)/Profit on ordinary activities after taxation (1,738) 1,977 4,112 Dividends (1,913) (1,768) (4,427) _______ _______ _______ Retained (loss)/profit for the financial period (3,651) 209 (315) Basic (loss)/earnings per share 6 (2.1)p 2.5 p 5.1 p _______ _______ _______ Adjusted earnings per share 6 6.3 p 9.5 p 21.7 p _______ _______ _______ Diluted (loss)/earnings per share 6 (2.1)p 2.4 p 5.1 p _______ _______ _______ Adjusted diluted earnings per 6 share 6.2 p 9.4 p 21.4 p _______ _______ _______ Dividend per share 7 2.3 p 2.2 p 5.4 p _______ _______ _______ Consolidated Balance Sheet as at 30 June 2003 30 June 30 June 31 December 2003 2002 2002 #'000 #'000 #'000 (unaudited) (unaudited) (audited) Fixed assets Intangible assets: Licences 3,147 3,723 3,613 Goodwill 98,376 84,661 104,816 Negative goodwill (1,429) (1,417) (1,449) _______ _______ _______ 100,094 86,967 106,980 Tangible assets 35,138 17,185 27,749 Investments 274 242 274 Interest in associate: Goodwill 2,477 2,812 2,645 Share of net assets 234 232 191 _______ _______ _______ 2,711 3,044 2,836 _______ _______ _______ Total fixed assets 138,217 107,438 137,839 Current assets Assets held for resale 334 483 336 Stocks 46,529 31,813 42,214 Debtors 60,503 61,304 66,085 Cash at bank and in hand 6,086 258 5,180 _______ _______ _______ 113,452 93,858 113,815 Creditors: Amounts falling due within one year (80,594) (74,416) (88,430) _______ _______ _______ Net current assets 32,858 19,442 25,385 _______ _______ _______ Total assets less current liabilities 171,075 126,880 163,224 Creditors: Amounts falling due after more than one year (71,100) (32,230) (61,484) _______ _______ _______ Net assets 99,975 94,650 101,740 _______ _______ _______ Capital and reserves Share capital 2,078 1,996 2,076 Share premium 59,590 59,488 59,535 Merger reserve 30,751 23,774 30,751 Profit and loss 7,556 9,392 9,378 _______ _______ _______ Equity shareholders' funds 99,975 94,650 101,740 _______ _______ _______ Consolidated Cash Flow Statement for the six months ended 30 June 2003 6 months 6 months Year ended ended 30 ended 31 December June 2003 30 June 2002 2002 #'000 #'000 #'000 (unaudited) (unaudited) (audited) Note Net cash inflow from operating activities 2 13,671 1,441 35,922 Dividends received from associate 40 - 100 Returns on investments and servicing of finance Interest received 119 5 54 Interest paid (2,320) (1,953) (4,621) Interest element of finance lease rental payments (2) (6) (4) _______ ______ _______ (2,203) (1,954) (4,571) Taxation (2,895) (2,669) (6,675) Capital expenditure and financial investment (8,110) (3,369) (8,564) Acquisitions and disposals (61) - (27,625) Equity dividends paid (2,659) (2,463) (4,207) _______ ______ _______ Cash outflow before financing (2,217) (9,014) (15,620) Financing Issue of ordinary share capital 57 288 335 New loans 6,899 500 65,010 Repayment of loans - - (39,500) Exceptional finance costs - - (2,096) Increase/(decrease) in debt factoring 1,795 10,420 (498) Principal payments under finance leases (9) (6) (6) _______ ______ _______ Net cash inflow from financing 8,742 11,202 23,245 _______ ______ _______ Increase in cash in the period 6,525 2,188 7,625 _______ ______ _______ Reconciliation of net cash flow to movement in net debt Increase in cash in the period 6,525 2,188 7,625 Cash outflow on finance leases 9 6 6 Cash inflow on loans (6,899) (500) (25,510) Cash (inflow)/outflow on debt factoring (1,795) (10,420) 498 _______ ______ _______ Change in net debt arising from cash flows (2,160) (8,726) (17,381) Non-cash flow movements - - (99) Translational differences 38 (68) 29 _______ ______ _______ Increase in net debt in the period (2,122) (8,794) (17,451) Net debt at start of period (70,976) (53,525) (53,525) _______ ______ _______ Net debt at end of period (73,098) (62,319) (70,976) _______ ______ _______ Notes to Interim Statements 1. The segmental analysis of turnover and operating profit is as follows. 6 months 6 months Year ended ended 30 ended 31 December June 2003 30 June 2002 2002 #'000 #'000 #'000 Turnover Pharmaceutical Manufacturing 51,327 29,618 67,897 Pharmaceutical Distribution 104,853 99,691 207,236 ________ _______ ________ 156,180 129,309 275,133 Operating profit Pharmaceutical Manufacturing before goodwill and licence amortisation 9,928 7,236 16,983 Goodwill and licence amortisation (5,851) (4,503) (9,680) ________ _______ ________ Total Pharmaceutical Manufacturing 4,077 2,733 7,303 Pharmaceutical Distribution before goodwill amortisation 1,701 6,153 13,813 Goodwill amortisation (918) (918) (1,835) ________ _______ ________ Total Pharmaceutical Distribution 783 5,235 11,978 Central costs (1,597) (949) (2,026) ________ _______ ________ Group operating profit 3,263 7,019 17,255 Associate 127 111 215 Goodwill amortisation (168) (168) (337) ________ _______ ________ (41) (57) (122) ________ _______ ________ Total operating profit 3,222 6,962 17,133 Notes to Interim Statements 2. Reconciliation of operating profit to operating cash flows 6 months 6 months Year ended ended 30 ended 31 December June 2003 30 June 2002 2002 #'000 #'000 #'000 Group operating profit 3,263 7,019 17,255 Depreciation charges 2,106 1,182 2,796 Amortisation of licences 288 292 584 Amortisation of goodwill 6,481 5,129 10,934 (Increase)/decrease in working capital: stocks (3,505) (6,524) (9,150) debtors 6,169 (12,300) (13,261) creditors (1,434) 6,643 26,332 currency translation adjustments 303 - 432 _______ _______ _______ Net cash inflow from operating activities 13,671 1,441 35,922 3. The financial information set out herein does not constitute full financial statements within the meaning of the Companies Act 1985. The financial information for the six months ended 30 June 2003 is unaudited and has been prepared on the basis of the accounting policies set out in the Group's 2002 Report and Accounts. The accounts for the period ended 31 December 2002 received an unqualified audit report and have been filed with the Registrar of Companies. 4. In 2002, the Group incurred exceptional finance arrangement fees totalling #2,096,000 in respect of securing bank facilities of #179,000,000. 5. The charge for taxation for the six months ended 30 June 2003 reflects the anticipated effective rate applicable for the year ending 31 December 2003. 6. The calculation of the (loss)/earnings per share for the six months ended 30 June 2003 is by reference to the loss after taxation of #1,738,000 (2002 six months #1,977,000 profit, 2002 twelve months #4,112,000 profit) and by reference to the weighted average number of ordinary shares in issue of 83,148,408 (2002 six months 79,665,287, 2002 twelve months 80,483,349). The calculation of adjusted earnings per share is by reference to the profits after taxation excluding amortisation of goodwill and licences and exceptional items of #5,199,000 (2002 six months #7,566,000, 2002 twelve months #17,431,000). The weighted average number of shares in issue is as defined above. 7. The interim dividend of 2.3p (2002: 2.2p) is payable on 28 November 2003 to shareholders on the register on 12 September 2003. The ordinary shares will be quoted ex-dividend from 10 September 2003. 8. Copies of the interim report will be sent to all shareholders. Further copies are available from the Company Secretary, The Intercare Group plc, Windsor House, Cornwall Road, Harrogate, HG1 2PW. This information is provided by RNS The company news service from the London Stock Exchange END IR ILFFAALIVIIV
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