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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Allergy Therapeutics Plc | LSE:AGY | London | Ordinary Share | GB00B02LCQ05 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.85 | 2.80 | 2.90 | 2.85 | 2.85 | 2.85 | 614,349 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Pharmaceutical Preparations | 59.59M | -43.07M | -0.0090 | -3.17 | 135.84M |
TIDMAGY
RNS Number : 9227E
Allergy Therapeutics PLC
04 March 2020
Allergy Therapeutics plc
("Allergy Therapeutics", "ATL" or the "Group")
Interim Results for the six months ended 31 December 2019
- Record level of operating profit pre R&D supported by strong sales - Strong cash position with Grass MATA MPL Phase III programme fully funded for H2 2020 start - Publication of promising preclinical data from VLP Peanut candidate
4 March 2020 Allergy Therapeutics plc (AIM: AGY), the fully integrated commercial biotechnology company specialising in allergy immunotherapy, today announces its unaudited interim results for the six months ended 31 December 2019.
Highlights
Financial highlights
-- Revenue increased by 9% at constant rate(*) and 8% in actual terms to GBP50.5m (H1 2019: GBP46.7m)
-- 10% growth in pre-R&D operating profit to GBP17.3m (H1 2019: GBP15.7m) largely as a result of
continued sales growth
-- Operating profit pre R&D margin of 34% (H1 2019 34%)
-- R&D expenditure lower at GBP1.3m (H1 2019: GBP5.0m) due to receipt of Inflamax legal costs (GBP3.2m)
-- Strong cash balance of GBP39.7m (30 June 2019: GBP27.4m)
Operational highlights
-- Good growth across all key products in the portfolio with small increase in market share in European business
-- First stage of Grass MATA MPL Phase III programme to start in H2 2020 in EU and USA -- Preclinical VLP Peanut data published in highly respected journal post period end
Manuel Llobet, CEO at Allergy Therapeutics , stated: "The Group has made a steady start to the year with good sales growth supporting our strategy. The regulatory environment remains uncertain but we continue to perform well commercially and to progress our high potential pipeline."
(*) Constant currency uses prior year weighted average exchange rates to translate current year foreign currency denominated revenue to give a year on year comparison excluding the effects of foreign exchange movements. See table in finance review for an analysis of revenue.
This announcement contains inside information for the purposes of Article 7 of Regulatory (EU) No596/2014.
-S -
Analyst briefing and webcast today
Manuel Llobet, Chief Executive Officer, and Nick Wykeman, Chief Financial Officer, will host a meeting and webcast for analysts to provide an update on the Group, followed by a Q&A session, at 09.30am GMT today at the offices of Panmure Gordon & Co, One New Change, London, EC4M 9AF.
Dial-in details are:
Webcast link: https://edge.media-server.com/mmc/p/mhc6ku2o
UK dial-in: +44 (0) 2071 928000
US dial-in: +16315107495
Conference ID: 3622619
For further information, please contact:
Allergy Therapeutics
+44 (0) 1903 845 820
Manuel Llobet, Chief Executive Officer
Nick Wykeman, Chief Financial Officer
Panmure Gordon
+44 (0) 20 7886 2500
Freddy Crossley, Emma Earl, Corporate Finance
James Stearns, Corporate Broking
Consilium Strategic Communications
+44 20 3709 5700
Mary-Jane Elliott / David Daley / Nicholas Brown / Olivia Manser
allergytherapeutics@consilium-comms.com
Stern Investor Relations, Inc.
+1 212 362 1200
Christina Tartaglia
christina@sternir.com
Notes for editors:
About Allergy Therapeutics
Allergy Therapeutics is an international commercial biotechnology company focussed on the treatment and diagnosis of allergic disorders, including aluminium free immunotherapy vaccines that have the potential to cure disease. The Group sells proprietary and third party products from its subsidiaries in nine major European countries and via distribution agreements in an additional ten countries. Its broad pipeline of products in clinical development include vaccines for grass, tree and house dust mite, and peanut allergy vaccine in pre-clinical development. Adjuvant systems to boost performance of vaccines outside allergy are also in development.
Formed in 1999 out of Smith Kline Beecham, Allergy Therapeutics is headquartered in Worthing, UK with more than 11,000m(2) of state-of-the-art MHRA-approved manufacturing facilities and laboratories. The Group, which has achieved over 9% compound annual growth since formation, employs c.600 employees and is listed on the London Stock Exchange (AIM:AGY). For more information, please see www.allergytherapeutics.com .
Joint Statement from the Chairman and Chief Executive Officer
Operating Review
Overview
The Group performed well in a challenging market and continued to drive growth in operating profit before R&D (10% up on 2019). There has been increased regulatory activity across Europe in the period creating uncertainty in the market. The growth achieved in the last six months highlights the quality and convenience of our products, our robust supply chain and strong marketing and sales team.
The Market
Allergy Therapeutics achieved sales growth in constant terms(1) of 9% (8% at actual rates). This growth came from across the portfolio with particularly strong performances by Pollinex, Venomil and Pollinex Quattro. The strong 2019 tree season has driven a strong demand for our tree allergy products while the grass season was less pronounced.
We have seen a strong performance in H1 2020 from Germany, Spain, Netherlands and Switzerland, driven by improved market positions, promotion of our ultra-short course products and more focus on key products in the portfolio. The market is generally becoming more aware of the importance of data-driven products, which benefits the Group's products which use advanced science and technology to validate performance.
Regulatory Affairs & Clinical Development
The first half of FY 2020 has been a very busy time for the clinical team with the analysis of the Birch MATA MPL Phase III (B301) trial results leading to a revised approach to the Grass MATA MPL trial. The upcoming Grass development study will now take a stepwise approach, with two stages covering both the 2021 and 2022 pollen seasons. The stepwise approach has been designed with input from regulatory consultants. It enables a phase III-scale development to begin in 2020 and includes a data review to gain insights into the trial, before continuing to the second part of the Phase III development. The first stage of the Grass MATA MPL phase III programme will start in the autumn of this year with read out in 2021.
A significant amount of work has been carried out by the Group in relation to the German TAV (Therapy Allergy Ordinance) process and the products that are part of that process. The German TAV process is in response to EU legislation relating to named patient products which requires immunotherapies to the most common allergens to undergo a market authorisation process. This is also starting to apply to the Italian and Spanish markets and is likely, in time, to affect the whole EU market. Further trials are not expected to be needed for each additional country.
The Group is in dialogue with the German regulatory authorities about the results of the Birch MATA MPL Phase III trial. The team will focus first on applying the lessons to the Grass MATA MPL trials before returning to a further clinical trial in relation to Birch.
The Group announced the publication, in January 2020, of encouraging preclinical results of its peanut allergy vaccine candidate in The Journal of Allergy and Clinical Immunology (JACI), the most frequently cited allergy and immunology journal in the field.
The study, which used the Group's novel virus like particle (VLP) platform, potentially offers an effective way to treat peanut allergies and prevent anaphylaxis. It provided validation of proof of concept for the generation of sustained immunity and protection through vaccination. The study illustrated that a single injection protected against systemic anaphylaxis, as demonstrated via subsequent in vivo challenge, skin prick testing and oral challenge.
(1) Constant currency uses prior year weighted average exchange rates to translate current year foreign currency denominated revenue to give a year on year comparison excluding the effects of foreign exchange movements. See table in finance review for an analysis of revenue.
With manufacturing scale-up of the product now underway and following agreement with several regulatory authorities on the clinical trial design, the programme to initiate first-in-human studies is progressing well. Given the importance of the trial and scale of the opportunity, the Group is implementing robust protocols with the regulatory authorities and plans to introduce additional in vitro human cell testing to its preclinical programme to ensure the initial studies will support global registration plans. Submission of the clinical trial application is anticipated in 2021.
The Group is evaluating further opportunities in the immunology field that could utilise VLP technology alongside the adjuvant systems that the Group owns.
Financial Review
Reported revenues for the first half of the financial year were GBP50.5m (H1 2019: GBP46.7m), representing a growth of 9% at constant currency (see table below) and 8% in actual terms. The sales growth has been driven primarily by the Group's investment in marketing and sales teams and broadening of the product portfolio as it continues to increase its market share in all of its main markets. Rebates were higher this period due to increased sales and price rises of certain products.
A reconciliation between reported revenues and revenues in constant currency(1) is provided in the table below:
6 months to 6 months to Increase Increase 31-Dec-19 31-Dec-18 GBPm GBPm GBPm % Revenue 50.5 46.7 3.8 8.1% Adjustment to retranslate to prior year foreign exchange rate 0.3 - 0.3 ------------------------------------------------------------ ------------ ------------------ ----------- --------- Revenue at constant currency (1) 50.8 46.7 4.1 8.8% Add rebates at constant currency 3.3 2.4 0.9 ------------------------------------------------------------ ------------ ------------------ ----------- --------- Gross revenue at constant currency 54.1 49.1 5.0 10.2%
As in previous years, owing to the seasonality of the pollen allergy market, between 60% to 70% of Allergy Therapeutics' revenues are generated in the first half of the financial year and, as a consequence, the Group typically reports profits in the first half of the year and losses in the second half.
Cost of goods sold increased in the period to GBP11.4m (H1 2019: GBP9.4m), mainly due to higher volumes being sold, Brexit costs and reversal of stock provisions in the prior year. Gross profit increased to GBP39.1m (H1 2019: GBP37.3m), which represents a gross margin of 77% (H1 2019: 80%).
Sales, marketing and distribution costs of GBP13.6m (H1 2019: GBP13.6m) were in line with the previous period. Administration expenses of GBP8.2m (H1 2019: GBP8.1m) were broadly in line with the previous period.
Research and development costs of GBP1.3m (H1 2019: GBP5.0m) reflected the lower level of activity in H1 2020 with the key Grass MATA MPL trials starting in autumn 2020 and included the GBP3.2m received in settlement of legal costs relating to the litigation with Inflamax.
The tax charge in the period of GBP0.6m (H1 2019: GBP0.4m) relates to overseas subsidiaries. It should be noted that IFRIC 23 (Uncertainty over income tax treatment) has been implemented in the period ended 31 December 2019. The Group prepares provisions against uncertain tax positions in accordance with IFRIC 23. IFRIC 23 has been adopted by the Group with effect from 1 July 2019, with the modified retrospective approach being applied (i.e. the cumulative effect of initially applying the Interpretation is recognised as an adjustment to the opening balance of retained earnings, with no change being made to the prior year comparative numbers).
The effect of IFRIC 23 provisions in these interim financial statements amounts to GBP0.7m and this has been dealt with through retained earnings.
Property, plant and equipment excluding IFRS16 increased by GBP1.3m to GBP11.3m compared to the year before, mainly as a result of investment in new storage facilities as part of our Brexit contingency planning. IFRS16 additions amounted to GBP9m and depreciation of GBP0.7m. Goodwill was GBP3.3m (H1 2019: GBP3.4m) and was lower than the prior year due to changes in the foreign exchange rates. Other intangible assets have decreased by GBP0.2m due to the amortisation charge being in excess of additions.
Total current assets excluding cash have decreased by GBP1.6m to GBP17.8m (H1 2019: GBP19.4m) mainly due to a reduction in debtor days.
Retirement benefit obligations, which relate solely to the German pension scheme, increased to GBP12.3m (H1 2019: GBP10.5m) due to a decrease in the discount rate primarily as a result of lower corporate bond yields in Germany.
Net cash generated by operations was strongly positive, due to lower R&D spending in the first half of the year 2020 as well as the strong trading result, with an inflow of GBP14.3m (H1 2019: GBP6.8m).
It should be noted that the financial results for H1 2020 now incorporate IFRS16, the new accounting standard on leased assets. This requires companies reporting under International Accounting Standards to place operating lease assets on the balance sheet with an accompanying liability. Furthermore, depreciation is charged on these assets (GBP0.7m) as well as a finance charge (GBP0.2m) with removal of lease charges (GBP0.9m). The impact of this is that lease costs in the P&L reduce and depreciation increases. Hence, the measure of earnings before interest, tax and depreciation and amortisation has benefited to the order of GBP0.9m. There is no material impact on the operating profit.
Financing
The Group had cash of GBP39.7m (30 June 2019 GBP27.4m) and debt on its balance sheet at the close of the period relating to loans held in the Spanish subsidiary of GBP2.0m (H1 2019: GBP2.8m). The seasonal overdraft was not used during the calendar year 2019 but the Group expects to renew its banking facilities when they are due for review in August 2020.
The Directors believe that the Group will have sufficient facilities for the foreseeable future and, accordingly, they have applied the going concern principle in preparing these interim financial statements.
Movements in the currency markets between the respective values of the euro and sterling have an effect on the Group's operations. The Group manages its cash exposure in this respect by foreign currency hedges. Over 90% of our gross sales are denominated in euros whereas approximately 60% of costs are incurred in the United Kingdom and denominated in sterling.
Outlook
This calendar year is key in order to prepare for several important trials for the 2021 financial year.
The Board and management team expect that net sales will continue to grow in line with market expectations in the second half of the year and have confidence in the future of the business. The gross margin is expected to be lower in the second half of the year compared with the first, as volumes through the factory are likely to be lower, leaving gross margin for the whole year in line with last year. As planned, research and development costs, excluding the Inflamax legal cost recovery, are expected to double in the second half of the year compared with the first half, reflecting the period of higher activity of the Grass MATA MPL trial and further work on peanut study as well as TAV costs. Other costs for the full year are expected to be in line with market expectations due to phasing and Brexit.
As noted in the Group Risks section of the 2019 Annual Report, management has taken action to try to mitigate the impact of Brexit. It will be difficult to determine precisely what impact Brexit will have on the business until a trade deal is concluded.
The Group continues to grow well while developing a very exciting and valuable pipeline of products.
The regulatory environment is a challenge but the Group is best placed to meet it with its strong portfolio of products and high potential pipeline.
Peter Jensen
Chairman
Manuel Llobet
Chief Executive Officer
4 March 2020
ALLERGY THERAPEUTICS PLC Consolidated income statement Note 6 months 6 months 12 months to to to 31 Dec 31 Dec 30 Jun 2019 2018 2019 2 GBP'000 GBP'000 GBP'000 unaudited unaudited audited Revenue 50,472 46,713 73,717 Cost of sales (11,414) (9,411) (18,379) ---------- ---------- ------------- Gross profit 39,058 37,302 55,338 Sales, marketing and distribution costs (13,614) (13,563) (26,995) Administration expenses - other (8,177) (8,063) (17,595) Research and development costs (includes GBP3.2m received relating to the litigation with Inflamax. FY19:GBP6.0m received) (1,273) (4,968) (6,950) ---------- ---------- ------------- Administration expenses (9,450) (13,031) (24,545) Other income - 31 593 Operating profit 15,994 10,739 4,391 Finance income 152 118 103 Finance expense (291) (124) (201) ---------- ---------- ------------- Profit before tax 15,855 10,733 4,293 Income tax (579) (408) (826) ---------- ---------- ------------- Profit for the period 15,276 10,325 3,467 ========== ========== ============= Earnings per share 3 Basic (pence per share) 2.40p 1.64p 0.55p Diluted (pence per share) 2.27p 1.55p 0.52p Consolidated statement of comprehensive income
6 months 6 months 12 months to 31 Dec to to 31 Dec 30 Jun 2019 2018 2019 GBP'000 GBP'000 GBP'000 unaudited unaudited audited Profit for the period 15,276 10,325 3,467 Items that will not be reclassified subsequently to profit or loss: Remeasurement of net defined benefit liability (1,060) 206 (906) Remeasurement of investments-retirement benefit assets 65 (83) (42) Revaluation gains - freehold land and buildings - - 312 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (286) 131 130 Total comprehensive income 13,995 10,579 2,961 =========== ========== ========== Consolidated balance sheet 31 Dec 31 Dec 30 Jun 2019 2018 2019 GBP'000 GBP'000 GBP'000 unaudited unaudited audited Assets Non-current assets Property, plant and equipment 11,336 10,034 11,481 Right of use assets (property, 9,004 - - plant and equipment) Intangible assets - goodwill 3,324 3,438 3,432 Intangible assets - other 1,245 1,437 1,408 Investment - retirement benefit asset 5,479 5,369 5,551 Total non-current assets 30,388 20,278 21,872 Current assets Inventories 8,716 9,033 9,409 Trade and other receivables 8,769 10,324 9,776 Cash and cash equivalents 39,725 31,642 27,440 Derivative financial instruments 324 - - Total current assets 57,534 50,999 46,625 Total assets 87,922 71,277 68,497 ---------- ---------- ---------- Liabilities Current liabilities Trade and other payables (12,903) (12,892) (15,736) Current borrowings (659) (664) (694) Lease liabilities (1,457) - - Derivative financial instruments - (65) (429) Total current liabilities (15,019) (13,621) (16,859) Net current assets 42,515 37,378 29,766 ---------- ---------- ---------- Non-current liabilities Retirement benefit obligations (12,299) (10,477) (11,747) Deferred taxation liability (284) (304) (318) Non-current provisions (264) (306) (273) Lease liabilities (7,536) - - Long term borrowings (1,317) (2,092) (1,742) Total non-current liabilities (21,700) (13,179) (14,080) Total liabilities (36,719) (26,800) (30,939) Net assets 51,203 44,477 37,558 ========== ========== ========== Equity Capital and reserves Issued share capital 646 646 646 Share premium 112,576 112,576 112,576 Merger reserve - shares issued by subsidiary 40,128 40,128 40,128 Reserve - share based payments 3,368 2,324 3,023 Revaluation reserve 1,207 949 1,207 Foreign exchange reserve (1,131) (844) (845) Retained earnings (105,591) (111,302) (119,177) ---------- ---------- ---------- Total equity 51,203 44,477 37,558 ========== ========== ==========
Consolidated statement of changes in equity
Issued Share Merger Reserve Foreign Retained Total Capital premium reserve - share Revaluation exchange earnings equity - shares based reserve reserve issued payment by subsidiary --------- --------------- --------- -------------- ---------- ---------- GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 31 December 2018 646 112,576 40,128 2,324 949 (844) (111,302) 44,477 --------- --------- --------------- --------- -------------- ---------- ---------- -------- Exchange differences on translation of foreign operations - - - - - (1) - (1) Valuation gains taken to equity (land and buildings) - - - - 312 - - 312 Remeasurement of net defined benefit liability - - - - - - (1,112) (1,112) Remeasurement of investments - retirement benefit assets - - - - - - 41 41 --------- --------- --------------- --------- -------------- ---------- ---------- -------- Total other comprehensive income - - - - 312 (1) (1,071) (760) Loss for the period after tax - - - - - - (6,858) (6,858) --------- --------- --------------- --------- -------------- ---------- ---------- -------- Total comprehensive income - - - - 312 (1) (7,929) (7,618) Share based payments - - - 699 - - - 699 Transfer of depreciation on revalued property - - - - (54) - 54 - --------- --------- --------------- --------- -------------- ---------- ---------- -------- At 30 June 2019 646 112,576 40,128 3,023 1,207 (845) (119,177) 37,558 Exchange differences on translation of foreign operations - - - - - (286) - (286) Remeasurement of net defined benefit liability - - - - - - (1,060) (1,060) Remeasurement of investments - retirement benefit assets - - - - - - 65 65 --------- --------- --------------- --------- -------------- ---------- ---------- -------- Total other comprehensive income - - - - - (286) (995) (1,281) Profit for the period after tax - - - - - - 15,276 15,276 --------- --------- --------------- --------- -------------- ---------- ---------- -------- Total comprehensive income - - - - - (286) 14,281 13,995 Share based payments - - - 345 - - - 345 IFRIC 23 tax provision - - - - - - (695) (695) (See Note 2) At 31 December 2019 646 112,576 40,128 3,368 1,207 (1,131) (105,591) 51,203 ========= ========= =============== ========= ============== ========== ========== ======== Condensed consolidated cash flow statement 6 months 6 months 12 months
to to to 31Dec 31Dec 30Jun 2019 2018 2019 GBP'000 GBP'000 GBP'000 unaudited unaudited audited Cash flows from operating activities Profit before tax 15,855 10,733 4,293 Adjustments for: Finance income (152) (118) (103) Finance expense 291 124 201 Non cash movements on defined benefit pension plan 81 79 273 Depreciation and amortisation 1,922 1,014 2,090 Net monetary value of above the line R&D tax credit - (31) (593) Charge for share based payments 345 668 1,367 Movement in fair value of derivative financial instruments (753) (32) 332 Foreign exchange revaluation on US dollar cash deposits 53 4 (36) (Increase) in trade and other receivables (178) (4,024) (1,864) Decrease/(increase) in inventories 571 (183) (543) (Decrease)/increase in trade and other payables (3,727) (1,441) 162 ---------- ---------- ---------- Net cash generated by operations 14,308 6,793 5,579 Bank loan fees and Interest paid (291) (124) (204) Income tax received 572 353 225 Net cash generated by operating activities 14,589 7,022 5,600 Cash flows from investing activities Interest received 152 119 151 Payments for retirement benefit investments (101) (231) (405) Payments for intangible assets (53) (7) (289) Payments for property plant and equipment (998) (722) (2,810) Net cash used in investing activities (1,000) (841) (3,353) Cash flows from financing activities Proceeds from issue of equity shares - 10,600 10,600 Share issue costs - (404) (404) Repayment of bank loan borrowings (350) (346) (651) Repayments of lease creditor (683) - - Net cash (used in)/generated by financing activities (1,033) 9,850 9,545 ---------- ---------- ---------- Net increase in cash and cash equivalents 12,556 16,031 11,792 Effects of exchange rates on cash and cash equivalents (271) 78 115 Cash and cash equivalents at the start of the period 27,440 15,533 15,533 ---------- ---------- ---------- Cash and cash equivalents at the end of the period 39,725 31,642 27,440 ---------- ---------- ----------
1. Interim financial information
The unaudited consolidated interim financial information is for the six month period ended 31 December 2019. The financial information does not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2019, which were prepared under International Financial Reporting Standards (IFRS) as adopted by the European Union (EU).
The interim financial information has not been audited nor has it been reviewed under ISRE 2410 of the Auditing Practices Board. The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Company's statutory financial statements for the year ended 30 June 2019 prepared under IFRS have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006.
2. Basis of preparation
The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention except for land and buildings and derivative financial instruments which have been measured at fair value. The accounting policies adopted in this report are consistent with those of the annual financial statements for the year to 30 June 2019 as described in those financial statements. There are no accounting standards that have become effective in the current period that would have a material impact upon the financial statements except for IFRS16 "Leases" and IFRIC 23, "Uncertainty over income tax treatments" as below.
IFRS16 "Leases"
IFRS 16 "Leases" was published by the IASB and adopted by the EU. It came into effect from 1 January 2019. The Group adopted the standard with effect from 1 July 2019 and included related transactions in these interim financial statements.
The effects of IFRS16 on the balance sheet at the reporting date is to increase lease liabilities by GBP9.0m of which GBP7.5m are within non-current liabilities and GBP1.5m within current liabilities and correspondingly a Right-of-Use Asset of GBP9.0m under tangible assets net of related depreciation costs of GBP0.7m.
The impact of IFRS16 on the income statement in these interim financial statements is an increase in EBITDA*** of GBP0.9m with no net effect on the profit before tax.
IFRIC 23 "Uncertainty over income tax treatments"
The Group prepares provisions against uncertain tax positions in accordance with IFRIC 23. IFRIC 23 has been adopted by the Group with effect from 1 July 2019, with the modified retrospective approach being applied (i.e. the cumulative effect of initially applying the interpretation is recognised as an adjustment to the opening balance of retained earnings, with no change being made to the prior year comparative numbers).
The effect of IFRIC 23 provisions in these interim financial statements amounts to a GBP0.7m adjustment dealt with through opening retained earnings and a current period additional tax charge of GBP0.1m.
Going Concern
The Group has been profit making in the six months to 31 December 2019, as it was in the corresponding period ending 31 December 2018.
Detailed budgets have been prepared, including cash flow projections for the periods ending 30 June 2020 and 30 June 2021. These projections include assumptions on the trading performance of the operating business and the continued availability of the existing bank facilities. The Group had a cash balance of GBP39.7m at 31 December 2019 and expects to renew its banking facilities when they are due for renewal in August 2020. After making appropriate enquiries, which included a review of the annual budget and latest forecast, by considering the cash flow requirements for the foreseeable future and the effects of sales and other sensitivities on the Group's funding plans, the Directors continue to believe that the Group will have sufficient resources to continue in operational existence for the foreseeable future and accordingly have applied the going concern principle in preparing these interim financial statements.
***EBITDA Profit before interest, tax, depreciation and amortisation.
3. Earnings per share
6 months 6 months 12 months to 31 Dec to 31 Dec to 30 Jun 2019 2018 2019 unaudited unaudited audited GBP'000 GBP'000 GBP'000 Profit after tax attributable to equity shareholders 15,276 10,325 3,467 Shares Shares Shares '000 '000 '000 Issued ordinary shares at start of the period 636,169 596,169 596,169 Ordinary shares issued in the period - 40,000 40,000 ----------- ----------- ----------- Issued ordinary shares at end of the period 636,169 636,169 636,169 Weighted average number of shares in issue for the period 636,169 629,502 632,835 =========== =========== =========== Weighted average number of shares for diluted earnings per share 672,321 667,845 669,703 =========== =========== =========== Basic earnings per ordinary share (pence) 2.40p 1.64p 0.55p =========== =========== =========== Diluted earnings per ordinary share (pence) 2.27p 1.55p 0.52p =========================================== =========== =========== ===========
4. Contingent liabilities
On 23 February 2015, the Company received notification that The Federal Office for Economics and Export ("BAFA") had made a decision to reverse their preliminary exemption to the increased manufacturers rebate in Germany for the period July to December 2012. The Company was granted a preliminary exemption to the increased rebate for this period by BAFA in 2013. The Company recognised revenue of EUR1.4m (GBP1.1m at that time, now GBP1.2m) against this exemption in the year ended 30 June 2013. All other preliminary exemptions (granted for periods up to 30 June 2012) have previously been ratified as final by BAFA. After taking legal advice, the Company has lodged an appeal against this decision and is confident that the exemption will be re-instated. Therefore, as at 31 December 2019, no provision has been recognised for the repayment of the rebate refund. This position will be kept under review.
In respect of net revenue relating to certain products, there is a risk that up to GBP5.8m cumulative revenue (2019: GBP3.5m) recorded in periods up to and including December 2019 may be subject to a retrospective change. This is due to the level of rebate being applied.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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