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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Axis-Shield | LSE:ASD | London | Ordinary Share | GB0008039975 | ORD 35P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 469.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:4548H Axis-Shield PLC 17 March 2000 Axis-Shield plc Preliminary Results for the Year Ended 31 December 1999 Axis-Shield plc ("Axis-Shield") announces its preliminary results for the year ended 31 December 1999. Highlights - Merger of Axis Biochemicals with Shield Diagnostics completed in May 1999 - Merger integration successfully completed with significant benefits already accruing - Several important distribution agreements signed during 1999/2000 with: 1999 Bio-Rad Laboratories for Activated Factor XII (AFT) Abbott Laboratories for homocysteine 2000 Bayer Corporation for AFT and homocysteine - Patents received for homocysteine and %CDT and US FDA 510k approval for %CDT - #4.5m acquisition of Medinor in October 1999 gives direct sales presence in Scandinavia - #22m acquisition of the diagnostics division of Nycomed Pharma in February 2000 brings strength in point-of-care diagnostics market - Project X now disclosed as Holo-Tc, a test used to measure levels of cobalamin for the diagnosis of neurological and psychiatric disorders, as well as anaemias, fatigue syndromes and common gastric disorders. (A copy of the patent application is available on the Company's website - www.axis-shield.com) Commenting on the results, Svein Lien, Chief Executive of Axis-Shield, said: "Axis-Shield has had an extremely active year and has made very considerable progress during the period. The major highlight was the merger of Axis and Shield which has been successfully integrated and which gives the Group real critical mass in the in-vitro diagnostics market. We have also announced several major partnerships for the distribution of our diagnostics kits and two key acquisitions (Medinor and the diagnostics division of Nycomed Pharma) to strengthen our presence in the sector. With the successes achieved over the past twelve months, Axis-Shield is well placed to make further good progress during the coming year." Enquiries: Axis-Shield plc Today: +44 (0) 772 0292152 Svein Lien, Chief Executive Officer Thereafter: +44 1382 422000 Jane Karwoski, Finance Director Financial Dynamics Tel: +44 207 831 3113 David Yates / Sophie Pender-Cudlip An analyst conference call will take place at 9.30am, please call Mo Noonan on 0207 269 7116 for further details. CHAIRMAN'S STATEMENT My first year as Chairman of Shield Diagnostics and then Axis-Shield has coincided with a dramatic year of growth for the organisation. This period has seen Axis-Shield emerge as a powerful new entity in global in-vitro diagnostics with the capacity to deliver innovative products both to the traditional laboratory market and to the developing near patient or point-of- care sector. During the first half of the year, we completed the merger between Shield Diagnostics Group plc and Axis Biochemicals ASA to form Axis-Shield plc. This created critical mass and consolidated our product portfolio with a particularly strong position in the area of cardiovascular disease risk prediction, and a highly talented and focussed R&D capability. Our strategy is to develop proprietary new markers of real utility to both our direct end-user customers and to the major players with global sales and marketing organisations. We also intend to grow our presence in the burgeoning market for rapid diagnostic testing at the time of patient referral/consultation. This approach has already resulted in two acquisitions. In October, the Company purchased Medinor AS, Norway's largest distributor of diagnostic products and medical supplies. The acquisition provided Axis-Shield with a direct sales force in Norway, our second home market, which complemented the Company's existing direct sales force in the UK. In February 2000, Axis- Shield strengthened its position in the point-of-care (PoC) market by acquiring the diagnostics division of Nycomed Pharma AS. The division is one of Europe's leading developers, producers and marketeers of PoC diagnostic products. By merging its regional PoC sales forces into Medinor, the acquisition will also facilitate the expansion of Medinor as a pan- Scandinavian sales organisation. Throughout this period of expansion, the Company has continued with the commercialisation of its existing portfolio of innovative patent-protected products for the laboratory market. It has entered into several important license agreements for the development of new tests, received further patent protection and key regulatory approvals for its existing novel analytes. It has also entered into major commercial arrangements to adapt these markers onto the widely placed high throughput instrumentation of the leading global IVD companies. The most recent of these agreements was announced on March 1 2000 with Bayer Corporation to commercialise its two main value drivers, tests for measuring homocysteine and Activated Factor XII, on Bayer Diagnostics' diagnostics instrumentation. Importantly, Bayer also agreed to employ AFT in clinical trials of its new statin, to assess drug efficacy in lowering elevated levels of AFT and in the reduction of cardiovascular events in various at-risk populations. This latest agreement means Axis-Shield has collaborations in place with the top three IVD companies in the world for homocysteine (Roche, Abbott and Bayer) and with Abbott and Bayer for AFT. It is also selling both analytes through Bio-Rad, another significant participant in the global market. Further agreements can be expected, reflecting the growing enthusiasm for novel and effective markers of cardiovascular risk, and Axis-Shield's strong intellectual property position. The acquisition of Nycomed Diagnostics, now known as Axis-Shield PoC, will facilitate the adaption of these value drivers onto PoC platforms, as well as accelerating the penetration of Axis-Shield into the fragmented but rapidly growing near patient arena. Because of the merger in May, Axis-Shield has prepared its reports and accounts using the principles of merger accounting. This means the accounts and comparative figures of the two merged companies have been combined from the beginning of each financial period (the full year for 1999 and the nine months ended 31 December 1998). Shareholders will recall that we changed our year-end from March to December as a result of the merger and the last audited accounts were for the nine month period to 31 December 1998. The financial performance of Axis-Shield during 1999 saw turnover grow to #14.7 million, nearly a 100% increase from the #7.4 million turnover during the nine month period ended 31 December 1998. The figure not only reflects the wider mix of the Axis-Shield product offering but also the rapid growth of one of our flagship products, homocysteine, representing 20% of our total 1999 turnover and continues to grow significantly. The results for the year ended 31 December 1999 yielded an operating loss from continuing operations of #6.8 million which includes exceptional costs of #1.8 million. After accounting for an additional #3.4 million of non-operating exceptional costs, mostly associated with the merger and acquisitions, the loss before tax was #9.9 million. To enable Axis-Shield to maximise the opportunities available in the laboratory and PoC sectors, the Company has reorganised its operating structure. David Evans remains Deputy CEO and leads our laboratory diagnostics division in both the UK and Norway. Olav Steinnes, who managed Nycomed Diagnostics, leads our Norway-based PoC diagnostics division. Erling Sundrehagen leads the R & D division which has facilities in both Dundee and Norway. This division will continue to develop analytes for both laboratory and PoC formats. Njaal Baardson, who joined us as a result of the acquisition of Medinor AS, will lead our Nordic region direct sales force. These business division leaders and the Finance Director will report to Svein Lien, our Chief Executive Officer. Together this group forms our Executive Committee which is represented on the Axis-Shield Board of Directors by Svein Lien, Erling Sundrehagen and David Evans, along with the Finance Director. We intend to introduce a new medium-term option scheme and shareholders will be asked to approve this at an Extraordinary General Meeting to be held on the same date as the Annual General Meeting. Jane Karwoski, our Finance Director, has resigned from the Company and will be leaving towards the end of April. We are sorry to lose her and thank her for her contribution to Axis-Shield. We wish her well in her new position in charge of a dot com company. After many years of serving on The Axis-Shield Board of Directors, Peter Smedvig has decided to step down as a non-executive director at the forthcoming AGM. We thank Peter for his advice and support during the Company's period of development and growth. With a solid corporate strategy and effective operational structure in place, new analytes and diagnostic test formats under development and key commercial contracts signed, I am confident of future progress. We continue to make investments in R&D and Sales and Marketing, and therefore we expect to report operating losses during 2000 but at a continually reducing level. Thereafter our revenue stream should reflect substantial market penetration of our key products and we expect to report sustainable and increasing profitability. I look forward to continuing to report on our achievement of strategic objectives and focussed expansion, which I believe the current management team is well placed to deliver. We believe healthcare providers are becoming increasingly aware of the value of early and accurate diagnosis in disease management and that potential cost savings in identifying a disease process in advance of symptomatology and hospitalisation will represent an important consideration in future health care economics. Nigel Keen Chairman FINANCIAL REVIEW Axis-Shield has prepared its accounts under merger accounting principles, which means that the accounts are prepared as if Axis Biochemicals AS and Shield Diagnostics Group plc had been merged throughout the year and the comparative period. In other words, the profit and loss statements, balance sheets and cash flows of the companies are combined from the beginning of the financial period in which the merger occurred and in the period reported in these financial statements. The following review of Axis-Shield highlights the financial results for the year. However, due to the Company's change in year-end, which occurred during 1998, we cannot provide direct, audited comparative information on a year for year basis. Turnover for year ended 31 December 1999 was #14.7 million as compared to the nine-month figure for the period ending 31 December 1998 of #7.4 million. For a better understanding of the turnover during the year, the following two tables break down turnover by disease area and geographically. Turnover by disease area Year to 9 Months to 31 Dec 99 31 Dec 98 Total Total #'000 #'000 Cardiovascular 3,062.3 1,608.3 Autoimmune 2,325.7 1,351.0 Infectious Disease 3,118.6 1,973.4 Alcohol-Related 1,216.4 452.8 Distributed Products 3,988.9 761.7 TTP 927.1 1,124.6 Other 23.2 105.3 ______ ______ 14,662.2 7,377.1 ______ ______ Geographical Break down of Turnover Year to 9 Months to 31 Dec 99 31 Dec 98 #'000s #'000s UK 2,035.3 1,431.0 Norway 3,227.5 79.4 Rest of Europe 4,641.0 2,413.2 North America 2,580.5 1,499.5 Rest of World 2,177.9 1,954.0 ______ ______ 14,662.2 7,377.1 ______ ______ The table providing the break down by disease area shows that the Company's turnover reflects the increasing importance of sales from diagnostic tests for cardiovascular disease risk assessment. These sales accounted for 21% of turnover for the year. Gross profit for the year ended 31 December 1999 was #4.8 million as compared to the nine-month figure for the period ended 31 December 1998 of #3.0 million. Gross margins were impacted by the strength of sterling and a change in product mix. There have also been increases in the fixed overhead base involving the expansion of our premises in both Dundee and Oslo that has impacted margins. Operating expenses for the period were #9.8 million (the nine-month period to 31 December 1998: #5.1 million). This figure reflects the planned increase in spending on marketing costs and the commercialisation of our two leading cardiovascular disease products, tests to measure Homocysteine and Activated Factor XII, and on new product development, all of which will have a positive impact on future revenue flows. Administrative costs also rose as a result of the expansion of our premises in Oslo and new headcount particularly in manufacturing in Oslo. The total net operating expenses also include exceptional items of #1.8 million. In part these relate to compensation to senior executives in respect of changes required as a result of the merger to option schemes in place in each Company. The remainder of the exceptional costs relates to the investment the Company made during the year in A/C Diagnostics LLC. A/C Diagnostics has been accounted for as an investment reflecting the fact that the option agreement to acquire a further 40% expires in March 2001. It is unlikely the option will be exercised and in that case, the Group's initial investment would be repaid at 50 per cent of the initial cost. The increased costs resulted from the Group's planned investment in the continued R&D, commercialisation and marketing of its novel products during the year have meant an operating loss of #5.0 million as compared to #2.0 million during the nine months to 31 December 1998 before exceptional items. Further non-operating exceptional charges amounted to #3.4 million, the majority of which were transaction expenses from the merger. Net interest receivable amounted to #353,300 (for the nine-month period to 31 December 1998: #168,500). There was a taxation credit during the period amounting to #241,200 (taxation credit of #21,500 in the nine-month period to 31 December 1998) bringing the loss for the year to #9.6 million as compared to the loss for the nine-month period to 31 December 1998 of #7.0 million. Axis-Shield's tangible fixed assets at 31 December 1999 were #2.8 million (at 31 December 1998: #2.6 million). The Company's intangible assets increased during the year as a result of the goodwill arising on the acquisition of Medinor AS. Stocks at 31 December 1999 were #3.7 million (at 31 December 1998: #2.1 million) which reflects the minimum holding of raw material in both our Dundee and Oslo facilities required by certain of our major customers. Debtors at 31 December 1999 include #800,000 of costs relating to the acquisition of Nycomed Diagnostics. The cash position at 31 December 1999 was #9 million (at 31 December 1998: #6 million). The cash figure includes money raised from the rights issue in July 1999 but does not reflect the #7.3 million raised in February 2000 through a cash placing at the time of the acquisition of the diagnostics division of Nycomed Pharma AS. The proceeds of the rights issue were used to pay the balance of expenses relating to the merger and the purchase of shares not accepted under the voluntary offer. The funds raised in cash placing were used for acquisition expenses and the remaining balance is to be used for the future expansion of the Group. The reserves and merger expenses now being reported have changed from the figures previously reported in the interim statement. Some of the estimates for merger related items used at the time of preparing the interim report were based on the best estimates at that time, including estimates of prior year analyses as the two merging companies did not have co-terminus year-ends. Looking forward, a number of factors have been identified which could affect the Group's financial and business performance in 2000. These are highlighted below: - The timing of revenue flows for new products is dependent upon those products meeting the design control specifications of our major OEM customers. The Group has no control over such processes. - The Group is committed to the improvement of its management information systems and in February 2000 began the introduction of an Oracle Enterprise Resource Planning (ERP) System. The amount contractually committed during at the year-end was approximately #315,000. - Research and development spending will increase as a result of the work required to adapt the Group's novel analytes to the instrumentation platforms of our major OEM partners as well as the necessity to modify our HbA1c PoC product in order to achieve CLIA-waived status. - The increased regulatory climate both within the US and Europe will result in additional and on-going expenditure relating to validation. - Increased costs associated with the implementation of CE marking of the Group's products in relation to the European IVD Directive that becomes effective in June 2000. - The non-recurring costs associated with the transfer of certain production from Oslo to Dundee. - The Group is currently engaged in a number of commercial discussions relating to not only its leading products but also to a novel technology transfer opportunity related to therapeutic drug monitoring. It is not possible to anticipate the outcome of such discussions but if positively concluded, they will impact revenues during the year. Consolidated Profit and Loss Account For the year ended 31 December 1999 Before Exceptional Exceptional Items Items Total Total (figures presented Year Year Year 9 Months in #'000s) to to to to 31 Dec 31 Dec 31 Dec 31 Dec 99 99 99 98 Turnover Continuing operations 11,497.5 11,497.5 7,377.1 Acquired operations 3,164.7 - 3,164.7 - Group turnover 14,662.2 - 14,662.2 7,377.1 _______ ______ _____ _______ ______ _____ _______ Total Gross Profit 4,752.0 - 4,752.0 3,035.5 ______ ______ _____ ______ Operating Expenses Exceptional - merger costs - (1,278.9) (1,278.9) - Exceptional - provision for investment - (538.0) (538.0) - Exceptional - depreciation of acquired R & D - - - (5,179.5) Other operating expenses (9,796.6) - (9,796.6) (5,068.1) ______ ______ _____ Net operating (9,796.6) (1,816.9) (11,613.5) (10,247.6) expenses ______ ______ ______ ______ Operating loss Continuing (5,020.1) - (6,837.0)) (7,212.1) operations Acquired operations (24.5) - (24.5) - Group operating loss (5,044.6) - (6,861.5) (7,212.1) Share of and associate operating profit 11.8 - 11.8 - ______ ______ ______ ______ Operating loss including associate (5,032.8) - (6,849.7) (7,212.1) Exceptional - merger transaction costs - (3,370.6) (3,370.6) - ______ ______ ______ ______ Loss on ordinary activities before interest (5,032.8) (5,187.5) (10,220.3) (7,212.1) Net Interest receivable 353.3 - 353.3 168.5 ______ ______ ______ ______ Loss on ordinary activities before taxation (4,679.5) (5,187.5) (9,867.0) (7,043.6) Taxation credit on ordinary activities 241.2 - 241.2 21.0 ______ ______ ______ ______ Loss for the year (4,438.3) (5,187.5) (9,625.8) (7,022.6) ______ _______ _______ ______ Loss per Ordinary 35p Share Basic (23.48p) (18.56p) Diluted (23.31p) (18.33p) Balance Sheet At 31 December 1999 Group Group (figures presented in #'000s) 31 Dec 99 31 Dec 98 Fixed Assets Intangible 2,108.0 437.7 Tangible 2,796.6 2,639.4 Other investments 403.3 - ______ ______ 5,307.9 3,077.1 Current Assets Stocks 3,662.6 2,072.4 Debtors 4,982.2 6,251.9 Cash at bank 9,007.0 5,972.7 ______ _______ 17,651.8 14,297.0 Creditors: Due within one year 6,022.0 4,774.9 ______ ______ Net Current Assets 11,629.8 9,522.1 ______ ______ Total assets less current liabilities 16,937.7 12,599.2 Creditors: Due after one year 445.2 499.3 ______ ______ Net Assets 16,492.5 12,099.9 _______ _______ Capital and Reserves Called up share capital 14,765.9 13,319.4 Share premium account 21,271.6 8,825.2 Capital redemption reserve 244.1 244.1 Merger reserve 13,917.1 13,917.1 Profit and loss account (33,706.2) (24,205.9) ______ ______ Equity shareholders' funds 16,492.5 12,099.9 ______ ______ Consolidated Cash Flow Statement For the year ended 31 December 1999 Year 9 Months (figures presented in #'000s) to to 31 Dec 31 Dec 99 98 Net cash outflow from operating activities before reverse lease premium received (4,809.2) (2,070.1) Reverse lease premium received - 432.5 ______ ______ Net cash outflow from operating activities (4,809.2) (1,637.6) ______ ______ Returns on investments and servicing of finance Interest received 467.0 213.4 Interest paid (113.7) (44.9) ______ ______ Net cash inflow from returns on investments and servicing of finance 353.3 168.5 ______ ______ Taxation - (9.7) Capital expenditure and financial investments Purchase of tangible (958.5) fixed assets (597.8) Purchase of intangible fixed assets (38.6) (5,477.6) Proceeds of sale of tangible fixed assets 25.9 24.1 ______ ______ Net cash outflow from capital expenditure and financial investments (610.5) (6,412.0) ______ ______ Acquisitions Purchase of subsidiary undertakings (5,390.7) - Cash acquired with subsidiaries 693.5 - _______ ______ Net cash outflow from acquisitions (4,697.2) - ______ ______ Net cash outflow before use of liquid resources and financing (9,763.6) (7,890.8) Management of liquid resources (580.0) - Financing Proceeds of share issues 12,982.6 9,390.2 Hire purchase repayments (131.7) (43.9) ______ ______ Net cash inflow from financing 12,850.9 9,346.3 ______ ______ Increase in cash 2,507.3 1,455.5 ______ ______ Statement of total recognised losses Total recognised losses after tax for the financial period (9,625.8) (7,022.6) Exchange loss (101.0) (62.9) ______ ______ Total recognised losses relating to the year (9,726.8) (7,085.5) Notes: 1. The profit and loss account, balance sheet and cash flow statement are an abridged version of those that will appear in the Group's Annual Report for the year ended 31 December 1999. The Report will be sent to shareholders and will be made available for members of the public at the Group's registered office, The Technology Park, Dundee DD2 1XA and on our web site, www.axis-shield.com. 2. The loss per ordinary 35p share is calculated on the loss for the period divided by the weighted average number of shares in issue during the period (40,378,543) (31 December 1998: 37,584,248). For diluted losses per share, the weighted average number of shares in issue is adjusted to assume conversion of potentially dilutive ordinary shares (40,661,478) (31 December 1998: 38,038,089). END FR GUUGGWUPUPWQ
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