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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Mls Multimedia | ASE:MLS | Athens | Ordinary Share |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.569 | 0.565 | 0.638 | 0.00 | 00:00:00 |
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RNS Number:8475P
Medical Solutions PLC
17 September 2003
17 September 2003
MEDICAL SOLUTIONS
INTERIM RESULTS FOR THE PERIOD TO 30 JUNE 2003
Financial Highlights
* Turnover (on continuing operations) increases three fold to #2.9m
(2002: #1m)
* Profit after tax #0.5m (2002: #0.4m loss)
* Gross margin increased to 63% from 49%
* Continued investment in new services
Operational Highlights
* Consolidation of activities at Nottingham
* Widened services to support drug development - first contracts now in place
* NICE approval of Liquid Based Cytology (LBC) for Cervical Cancer Screening
in UK
* Acquisition of histopathology laboratory in London:
- Provides entry into private market
* Joint venture with Sonic for Cytology and LBC
* Acquisition of two private laboratories in Dubai, rapidly becoming a
centre of excellence for private healthcare services to the region
* Board strengthened with the appointment of Prof Karol Sikora to an
executive role on the board and the appointment of Dr Sue Foden as a non
executive director
Commenting the Chairman, Sir Gareth Roberts, said:
"Medical Solutions has transformed into a highly focused business specialising
in laboratory diagnosis and pathology for healthcare providers and support
services for drug developers. This has been a significant period of growth for
the company with turnover on continuing operations increasing threefold and the
completion of a number of key acquisitions.
We have a clear focus, and the necessary infrastructure and strategic alliances,
skills and technology to build a substantial and very profitable business."
For further information, please contact:
Medical Solutions
Charles Green, CEO Tel: +44 (0) 207 398 3300 (today only)
Andy Longstaffe, FD +44 (0) 115 973 9010
Beattie Financial
Mike Wort/Ann-marie Wilkinson Tel: +44 (0) 207 398 3300/07730 415019
Introduction
Medical Solutions has transformed into a highly focused business specialising in
laboratory diagnosis and pathology for healthcare providers and support services
for drug developers. During the first six months of 2003 we have taken several
key steps in achieving our vision of developing the new Nottingham facility into
an international centre of excellence. The combination of world-renowned
expertise, state of the art reference laboratory facilities and innovative image
analysis and quantitation technology puts Medical Solutions in a unique position
to fully exploit the increasing demand for outsourced support services.
The Group's business is divided into two main areas:
The Services Division delivers a range of services including specialist
pathology, biomaterials resources and expertise coupled with a number of its own
laboratory facilities. These services are provided to the global pharmaceutical
and biotechnology Industry as well as public and private healthcare providers.
Through creating new support services for drug development we are able to
develop new technologies and create a pipeline of products and services which we
can offer to our healthcare customers.
The Technology Division has a range of products, which includes specialist
software in telemedicine and imaging, and includes SurePath, our system for
preparing Liquid Based Cytology smear samples.
Operational Highlights
Key to the development and delivery of our range of services is the
consolidation of all activities at the new freehold premises on the new business
park in Nottingham. The building consists of 22,000sq metre of office and
laboratory space with room for expansion. The facilities will be fully
compliant with the requirements of IS9002, Clinical Pathology Accreditation
(CPA) and current Good Laboratory Practice (GLP) regulations. We have already
relocated our imaging businesses from Liverpool and Tunbridge Wells, and will be
moving our existing laboratories in Nottingham to the new site within the next 5
months.
During the period we have secured significant contracts with major
pharmaceutical companies and anticipate repeat orders of increasing magnitude as
they build up confidence in our capabilities. We have an expanding order book,
currently #2.3million, and order pipeline of some #4.5m with several individual
tenders valued over #1million.
In May we established an operation in Research Triangle Park(RTP), North
Carolina, USA, headed up by Dr Mark Browne, the founder of Kinetic Imaging to
meet the demand, centered around RTP, for expert analysis using our imaging
products to support drug discovery.
On 26 June 2003 we acquired a private laboratory in Dubai with annual post tax
profits of approximately #1million, and have established the company as a
provider and partner in Dubai Healthcare City (DHCC), the planned $2 billion
green-field development currently being constructed. The aim of the Dubai
Healthcare City initiative is to provide the highest quality healthcare services
through the creation of a world class cluster of healthcare professionals and
service providers to satisfy the needs of the expanding private hospital market
in Dubai, the Gulf, and its catchment area of 2 billion people in the region.
Other significant healthcare providers involved in the DHCC initiative include
The Harvard Medical School, The Johns Hopkins Medical Institute and The Mayo
Clinic. We are now well positioned to fulfil the laboratory needs, histopathogy
expertise and telepathology of this exciting new opportunity, in addition to
supporting its' public health systems.
On 14th August 2003 NICE (National Institute of Clinical Excellence) approved
Liquid Based Cytology for Cervical Cancer Screening in the UK. SurePath is one
of only two Food & Drug Agency approved Liquid Based Cytology smear test systems
which have been trialled by the NHS and reviewed by NICE, for implementation in
the UK. There are currently 4.7 million smear tests performed each year in
England and Wales. The continued delay of the announcement from the Department
of Health has caused great disappointment to the Company and this will impact
the full year performance. However, the Company believes that a full
contribution will come from SurePath in 2004.
On 4 July 2003 we acquired a private histopathology laboratory in London and
formed a joint venture with Sonic Healthcare, the listed Australian company, to
provide histopathology and cytology service in London and in the private
healthcare market outside London. This acquisition is also an important step in
creating the conduit through which we intend to offer LBC services to UK
healthcare providers.
Financial Overview
Turnover in this period from continuing operations trebled to #2.9 million (2002
#1.0 million), split as to #1.8 million (2002 #0.4million) from Services and
#1.1 million (2002 #0.6million) from Technology. Our order book is expanding
with contracts from a number of major pharmaceutical companies, and several
tenders worth in excess of #1million.
The Group's gross margin from continuing operations grew from 49% to 63%,
primarily due to the impact of the new business areas - reference laboratories,
drug development and private healthcare which attract significantly higher
margins than our historical business.
The operating loss from continuing operations was #1.07 million (2002 #1.08
million) including central costs. The gains in gross margin generated have been
offset by the investment in the expanded infrastructure built for our drug
development services in anticipation of the increased size of contracts and
order book.
Profit after tax for the period was #0.5 million (2002 #0.4million loss), helped
by the release of #1.5 million of the December 2002 provision for tax of #2.1
million, which related mainly to the disposal of Adams Healthcare.
At 30 June we had #4.4 million cash available. During the period we spent #4.3
million on capital expenditure including #3.7million on the freehold premises
in Nottingham, with the remainder on laboratory equipment. We acquired the
Welcare laboratory in Dubai for #7 million cash with #0.7million of costs. This
acquisition was partly financed by the issue of #2million worth of new ordinary
shares to the vendor with the remainder in cash. Deferred consideration of #3
million has been recognised in long-term creditors as we expect the laboratory
to exceed the warranted post tax profits of #0.95million for each of the first
three years under our ownership. During the period we also repaid the #2.4m
outstanding on Adams Healthcare debt, and assumed #4million of new debt. Cash
outflow from operations was #1.5 million in the period however #0.5 million
related to increased debtors as a result of sales made just prior to 30 June,
which have now been collected.
Board Changes
Dr Ian Ellis was appointed to the main Board as Medical Director in March. He
has been instrumental in the development of PathLore, our pathology diagnosis
business.
We were also delighted to appoint Professor Karol Sikora as Scientific Director,
who will have particular responsibility for leading our Drug Development
Services. Karol joined the group as a Non-Executive Director in April 2002. On
Karol's appointment as an Executive Director, we announced the appointment of Dr
Sue Foden as Non-Executive Director. Dr Foden has immense experience and
knowledge in the Biotechnology and Pharmaceutical markets having been Chief
Executive of Cancer Research Campaign Technology Limited (1987-2000) and Cancer
Research Ventures Limited (1998-2000). Dr Foden is currently a Venture Partner
of Merlin Biosciences Limited, the specialist life science investor trust.
Prospects
There remains a global shortage of pathologists, an increasing requirement for
specialist laboratories, a need for new technology and automation in pathology
and an expanding market for Private Healthcare. The support services we can now
offer in Drug Development represent a unique combination of services and
technologies which allows us to aid drug target identification, design and run
clinical trials, develop tests, and utilise those tests in expanding our service
offering for healthcare providers.
Our revenue streams are tangible and clear, and now include Dubai, the UK
private healthcare market, SurePath Liquid Based Cytology, and rapidly expanding
orders for our Drug Development services. We have the cash to finance the
business through to a cash generative position, and make positive additions to
our portfolio of skills and technologies.
We are now well positioned to deliver expectations in the forthcoming years as
the prospects of rapidly increasing our revenues are tangible. We have a clear
focus, and the necessary infrastructure and strategic alliances, skills and
technology to build a substantial and very profitable business.
Sir Gareth Roberts FRS, FREng
Non-Executive Chairman
Unaudited consolidated profit and loss account
For the six months ended 30 June 2003
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
#000 #000 #000
Turnover 2,881 8,424 16,785
Gross profit 1,815 4,274 8,080
Selling & Distribution expenses (627) (2,013) (3,934)
Research & Development (447) (414) (893)
Administrative expenses (1,812) (2,447) (4,645)
Operating loss (1,071) (600) (1,392)
Operating loss before amortisation and
termination costs (1,000) 226 43
Amortisation of goodwill and knowhow (71) (608) (1,217)
Termination costs (218) (218)
(1,071) (600) (1,392)
Profit on sale of fixed assets 308 76
Loss on sale of discontinued operations (91) (8,678)
Interest receivable/(payable) 123 (87) (201)
Loss before taxation (1,039) (379) (10,195)
Taxation 1,537 9 (2,093)
Profit/(loss) on ordinary activities after
taxation 498 (370) (12,288)
Earnings/(loss) per ordinary share 0.63p (0.47p) (15.51p)
EBITDA (809) 619 634
Unaudited consolidated balance sheet
As at 30 June 2003
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Fixed assets
Tangible 5,009 3,818 1,144
Intangible 14,788 22,458 4,010
19,797 26,276 5,154
Current assets
Stocks 1,267 2,196 1,027
Debtors 2,013 4,449 1,302
Cash at Bank 6,105 2,516 16,320
9,385 9,161 18,649
Current Liabilities
Creditors: falling due within one year (3,814) (5,417) (5,420)
Net current assets 5,571 3,744 13,229
Total assets less current liabilities 25,368 30,020 18,383
Creditors: falling due after one year (6,844) (2,172) (2,355)
Net assets 18,524 27,848 16,028
Share capital & reserves 18,524 27,848 16,028
Unaudited consolidated cash flow statement
For the six months ended 30 June 2003
Six months ended Six months ended 30 Year ended
30 June 2003 30 June 2002 31 December
2002
#000 #000 #000
Net cash outflow from operating activities (1,458) (110) (36)
Returns on investments and servicing of
finance 123 (87) (198)
Taxation 9
Capital expenditure and financial investment (4,295) (499) (1,381)
Acquisitions and disposals (7,697) (2,203) 12,611
Cash (outflow)/inflow before management of
liquid resources (13,327) (2,890) 10,966
Financing
- issue of shares 2,000
- increase/(decrease) in debt 1,622 (249) 69
(Decrease)/increase in cash in the period (9,705) (3,139) 11,065
Reconciliation of operating loss to net cash
outflow from operating activities
Operating loss (1,071) (600) (1,392)
Depreciation 191 303 591
Amortisation 158 696 1,400
Profit on sale fixed assets -
Increase in stocks (240) (218) (732)
Increase in debtors (711) (999) (737)
Increase in creditors 215 708 834
Net cash outflow from operating activities (1,458) (110) (36)
Turnover and segmental analysis
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 December 2002
#000 #000 #000
Continuing operations:
Technology 1,040 590 1,192
Services 1,841 409 1,103
2,881 999 2,295
Discontinued 7,425 14,490
2,881 8,424 16,785
Notes
1 The interim accounts have been prepared using accounting practices stated
in the Group's report and accounts for the year ended 31 December 2002 and
are unaudited.
2 The comparative figures for the year ended 31 December 2002 are an abridged
version of the Group's full accounts and, together with other financial
information contained in these interim results, do not constitute statutory
accounts for Medical Solutions plc within the meaning of Section 240 of the
Companies Act 1985. Statutory accounts for the year ended 31 December 2002
have been filed with the Registrar of Companies for England and Wales and
have been reported on by the auditors to Medical Solutions plc. The report
of the auditors was unqualified.
3 No interim dividend has been declared (2002 - nil).
4 The calculation of profit(loss) per ordinary share is based on a weighted
average number of shares in issue during the six months of 79,623,020
(2001 - 78,975,348).
5 The interim statement is being sent to shareholders and further copies are
available from the Company's registered office at 1 Orchard Place,
Nottingham Business Park, Nottingham. NG8 6PX
This information is provided by RNS
The company news service from the London Stock Exchange
END
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