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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 | |
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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:4487Z Axis-Shield PLC 08 March 2006 8 March 2006 AXIS-SHIELD PLC PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2005 Axis-Shield plc (LSE:ASD, OSE:ASD), the in vitro diagnostics (IVD) company based in Scotland and Norway, today announces its preliminary results for the year ended 31 December 2005. These results have been prepared under International Financial Reporting Standards ("IFRS"). Financial Highlights * Revenues up 11% at #58.2 million, compared to 2004 turnover of #52.3 million * First annual net operating profit of #1.9 million before tax (2004: loss of #0.8 million) * Net operating profit of #1.9 million includes redundancy costs of #0.5 million * Gross margins improved to 53.9% (2004: 53.3%) * R&D expenditure reduced as planned to #8.7 million (2004: #9.9 million) * Strong balance sheet with cash of #11.5 million at year end (2004: #11.9 million) Operating Highlights * AFINIONTM Point-of-Care System and first test for HbA1c (for monitoring treatment compliance in diabetes) received marketing clearance from US FDA; CLIA waiver granted post-year end; manufacturing scale up on track for US launch in H2 2006 * Abbott granted exclusive distribution rights for AFINIONTM in the USA * NycoCardTM sales showed increase of 14.8% to #15.7 million (2004: #13.7 million) * Homocysteine sales improved by 26% to #8.2 million (2004: #6.5 million), with units reaching 10.1 million * Sustained successful sales of BNP for diagnosis of heart failure on Abbott's AxSYM(R) platform, and launch on Abbott IMx(R), generating total revenues of #3.2 million, up 79% (2004: #1.8 million) * Sales of anti-CCP kit for effective detection of early rheumatoid arthritis reached #1.5 million (2004: #936,000) * First markers developed under the Abbott AxSYM(R)xtra menu extension programme due for launch H1 2006 * New Abbott contract for anti-CCP and homocysteine on its high throughput ARCHITECT(R) system Commenting on the results, Nigel Keen, Chairman of Axis-Shield said: "This has been a very successful year for the Company with good all-round performances across all divisions, enabling us to sustain the profitability we reported at the half year and record the first full year of profits since the 1999 merger of Axis and Shield. This was achieved on the strength of our existing products and without the benefit of sales from the AFINIONTM system, the substantive roll-out of which is now planned for the second half of 2006, or from our other major investment in developing new Axis-Shield labelled markers for Abbott's AxSYM(R) platform." "Market feedback on AFINIONTM has been very positive and we are confident that this new system will make a substantial contribution to revenues going forward. Additionally we will launch the first AxSYM(R)xtra tests in the first half of 2006 and continue the new programme to develop two of our tests for the ARCHITECT(R) system. Together, these events will increase our industry and customer profile and position the Company for strong revenue growth in the coming years, creating increased shareholder value." There will be an analyst group meeting at 9:30 am on Wednesday 8 March 2006 in London at the offices of Financial Dynamics at Holborn Gate, 26 Southampton Buildings, WC2. There will be a simultaneous conference call and webcast. For further details, please contact Mo Noonan on +44 (0)20 7831 3113. A meeting for Oslo analysts will take place at 8:00 am on Thursday 9 March 2006 at the Continental Hotel, Oslo. For further details, please contact Lilian Manderson on +44(0)1382 422000. Enquiries: Axis-Shield plc Tel: +44 (0)1382 422000 Svein Lien, Chief Executive Officer Paul Garvey, Finance Director Financial Dynamics Tel: +44 (0)207 831 3113 David Yates / Sarah MacLeod Notes to Editors: Axis-Shield is an international in vitro diagnostics company, headquartered in Dundee with R&D and manufacturing bases in Dundee and Oslo. The Group specialises in the development, manufacture and marketing of innovative proprietary diagnostics kits in areas of clinical need, including cardiovascular and neurological diseases, rheumatoid arthritis, alcohol abuse and diabetes. It has a special focus on effective testing at the point of care for improved patient management. For more information on Axis-Shield, please refer to www.axis-shield.com Chairman's Statement Business Overview This has been a very successful year for the Company with good all-round performances across the divisions, enabling us to sustain the profitability we reported at the half year and record the first full year of profits since the 1999 merger of Axis and Shield. This was achieved on the strength of our existing products and without the benefit of sales from our new AFINIONTM Point-of-Care system, the substantive roll-out of which is now planned for the second half of 2006, or from our other major investment in developing new Axis-Shield labelled markers for the AxSYM platform. Profit before tax for the year came in at #1.9 million, despite redundancy costs of #0.5 million in Oslo associated with restructuring in our Point-of-Care Division. Our three divisional businesses of Laboratory Diagnostics, Point-of-Care Testing and Medical Device Distribution recorded increased sales in 2005, with good growth potential moving forward. Our core competence remains the development of novel patentable diagnostic solutions in areas of clinical need, making use of our special skills in protein chemistry to devise more effective ways to measure technically challenging markers. In addition, we are finding that our expertise in adapting assays to run on automated platforms encompassing many different technologies is in increasing demand. In this part of the business we develop system menu extensions, including both novel and conventional markers, through OEM partnerships with the major global diagnostic companies which dominate the hospital laboratory marketplace. This is illustrated by our relationship with Abbott, one of the world's leading IVD companies, for which we make tests to run on IMx(R) and AxSYM(R), two of Abbott's widely placed instrument platforms. A special contract to develop tests on the latter instrument enables us to market our own-labelled products, thus giving us a quick route to the automated instrument market for our novel markers without the substantial costs associated with developing our own sophisticated high throughput instrumentation. Importantly we are now also developing tests for Abbott's flagship highest throughput ARCHITECT(R) analyser. We are targeting the rapidly expanding market for point-of-care (PoC) testing, particularly in the doctors' office. This sector is currently not dominated by any large companies and we have capitalised on our existing presence in the market established through our successful NycoCardTM system by our development of a next generation PoC platform, the AFINIONTM system. Although we have experienced some delays in scaling up instrument production, we recently received Clinical Laboratory Improvement Amendments (CLIA) waiver from the US FDA for the system and the first test, for HbA1c in monitoring treatment compliance in diabetes, and this will facilitate doctors' office marketing for the US launch in the second half of 2006. CLIA waiver permits use of the test and system by non-professional staff, acknowledging that waived tests are easy to use, accurate, reliable and very unlikely to produce false results. We also market diagnostic tests and medical devices to end-users in our home markets of the UK and the Nordic countries through Axis-Shield UK in Cambridgeshire and Medinor (with offices in Norway, Sweden, Finland and Denmark), and to the developing world through our Plasmatec subsidiary, based in Bridport, Dorset. Financial Overview Revenues for 2005 were #58.2 million, compared to #52.3 million in 2004, an increase of 11%. Gross margins continued to improve to 53.9 %, largely due to a more favourable product mix, producing a gross profit of #31.4 million. Operating profit before R&D was #10.6 million, compared to #9.1 million in 2004. Operating expenses increased from #18.8 million to #20.8 million. This included some "one-off" costs and a continuing investment in additional marketing expenditure related to the launch of AFINIONTM and the upcoming introduction of the AxSYM(R)xtra assays. Total R&D spend further decreased as planned by 12%, falling to #8.7 million from #9.9 million in 2004. #0.5 million of the spend during 2005 was attributable to the continuing but reducing external cost of the engineering and manufacturing development of the AFINIONTM instrument and cartridges (down from #2.9 million in 2004). Axis-Shield reported its first annual net operating profit (under IFRS reporting rules) of #1.9million before tax, which includes redundancy costs of #0.5 million in Norway (2004: loss of #0.8 million). Profitability was achieved on the strength of our existing businesses, without the benefit of any significant sales of the AFINIONTM system, which is undergoing instrument manufacturing scale-up in the Swedish factory of one of our production partners, or from our major R&D investment in new markers on AxSYM(R) and reflects strong trading performances across all our divisions. Our balance sheet remains strong with cash at the year end of #11.5 million, compared to #11.9 million at the end of 2004. It is important to recognise that a continuing key difference between Axis-Shield and other emerging healthcare companies is the strong cash flow from our commercial operations, derived from successful products which we have taken to market and those which were developed through our own research and development. This allows us to fund our substantial R&D programme without repeated recourse to the capital markets. Our businesses have produced increasingly favourable trading positions which have resulted in 2005 profitability and we expect to see further, sustainable growth as we reap the benefits of our continued investment in both internal and external research and development. Operating highlights Laboratory Division Laboratory product revenues in 2005 reached #19.6 million (#16.0 million in 2004), an increase of 22.3%. Growth has been largely due to increased homocysteine sales, together with the continued good performance of certain products we manufacture for Abbott. In particular, good growth was achieved through the AxSYM(R) BNP heart failure marker, the anti-Tg/anti-TPO thyroid marker tests and the IMx(R) sirolimus test, needed to monitor blood levels of this anti-rejection drug. Our anti-CCP kit for early diagnosis of rheumatoid arthritis has also continued to enjoy good sales growth. Further evidence of homocysteine clinical utility continues to be published, including an important updated evaluation of current epidemiological data from Dr David Wald at Southampton University Hospital, suggesting that a 15% reduction in coronary heart disease risk and a 25% reduction in risk of stroke are achievable by lowering serum homocysteine. In another important study Yang and colleagues at the Center for Disease Control in Atlanta examined mortality from stroke and ischaemic heart disease (IHD) in the USA before, and after, folic acid fortification of flour, looking at over eight million deaths in individuals over 40 years old. Average blood folate concentrations increased and homocysteine concentrations decreased after fortification, and there was a three-fold acceleration of decline in stroke mortality and a decline in mortality from IHD in some but not all segments of the population. The authors comment that the improvement in mortality for stroke and IHD were of the magnitude predicted for, and occurred concomitantly with, the average reduction in blood homocysteine concentration produced by folic acid fortification. A study by Flicker and colleagues at the Universities of Western Australia and Queensland suggests that not only is homocysteine a marker of cardiovascular disease risk but also that it should be measured in older individuals to assess risk of neurodegenerative disease so that, where necessary, homocysteine-lowering vitamins can be employed to reduce the rate of increase of amyloid protein levels, hopefully before brain plaque build-up becomes substantial. The build-up of brain amyloid plaques is thought to be an important parameter in the development of Alzheimer's disease. This positive scientific climate has been reflected in an increase in homocysteine sales to over 10 million units, compared to 8.0 million in 2004, an increase of 25%, with revenues up from #6.5 million to #8.2 million. The October launch of homocysteine testing on Dade Behring's BN platform assisted sales growth and we expect to see further sales growth shortly through the Instrumentation Laboratory launch on its Futura system, which is widely placed particularly in coagulation laboratories. We are now seeing the benefits of market stabilisation after the removal of certain unlicensed competition in the United States and the resolution of the Competitive Technologies Inc ("CTT") US patent dispute concerning homocysteine testing in vitamin deficiency. The majority of significant test providers to US laboratories have now settled with CTT, agreeing to pay royalties until patent expiry in 2007. All major homocysteine test providers now directly employ Axis-Shield technology or other Axis-Shield licensed methods. The success of homocysteine has continued to spawn unlicensed products in the marketplace, though none is believed to have any substantial sales. However we will continue our policy of vigorous defence of our intellectual property and the prosecution of any significant infringers of our patent rights. The favourable agreement with Catch Inc. in 2004 resolved the principal element of previously unlicensed competition and gave us commercialisation rights for Catch's adaptable technology for clinical chemistry instruments. The agreement between Beckman Inc. and Catch to use the Catch reagents on the popular Synchron analyser continues to provide us with royalties on a per test basis. Roche has decided not to pursue the Catch test for its clinical chemistry platforms, though it will be possible for our distributors to make the Axis-Shield branded test available for their customers to use on these open systems should they wish to do so. The Axis-Shield produced AxSYM(R) BNP assay marketed by Abbott continues to be very successful, with sales augmented by the launch in October of a complementary BNP assay on Abbott's widely-placed IMx(R) system, to service the smaller laboratory. BNP is considered the marker of choice in the diagnosis of heart failure and we expect further growth in sales of this test as the utility of this marker is extended to screening for this major problem in elderly populations. Sales in 2005 reached #3.2 million compared to #1.8 million in 2004, representing an increase of 79%. Food and Drug Administration (FDA) marketing approval in April 2005 and the subsequent US launch of the Axis-Shield manufactured Abbott IMx(R) assay for Wyeth's anti-rejection drug sirolimus, which has the brand name Rapamune(R), helped to increase revenues to #748,000 for this product in 2005, against #232,000 in the previous year. Our sales of AxSYM anti-Tg and anti-TPO thyroid tests to Abbott reached #1.4 million in 2005 (2004: #1.1 million). During the year we also began manufacturing an assay for Beta-2-microglobulin (to detect renal dysfunction) on the IMx(R) instrument platform, on behalf of Abbott. We continue to work on products to measure variants of the Activated Factor XII molecule and very encouraging results were presented at the November annual meeting of the American Heart Association in Dallas. These data demonstrated that our newly developed tests strongly predicted which patients admitted to hospital with chest pain had a subsequent heart attack or died. It is likely that we will commence development of commercial assays for two key species of this clotting factor if further studies confirm their utility in this important area. Data continue to be published on the utility of our patented anti-CCP (cyclic citrullinated peptides) test for early detection of rheumatoid arthritis (RA) with many instances of patients having circulating antibodies to CCP in their bloodstream several years before the appearance of symptoms. These findings strongly link the use of this new test with the use of the new generation of drugs to treat rheumatoid arthritis and we are now seeing significant interest from pharmaceutical companies and physicians using those drugs in the more widespread application of this test in the management of this debilitating disease. In the USA a Current Procedural Terminology (CPT) code for the test has been granted, making the test reimbursable at a set price, and we hope the American Rheumatology Congress criteria for the diagnosis of RA will soon incorporate an anti-CCP test alongside that for Rheumatoid Factor (RF). In 2005 our anti-CCP test sales reached #1.5 million, compared to #0.9 million in 2004. Our collaboration with Abbott Laboratories to produce a range of Axis-Shield kits for the AxSYM(R) analyser (branded AxSYM(R)xtra assays) has progressed and the first products are approaching launch. We expect that kits to measure anti-CCP, HoloTC (a more efficient method for the detection of vitamin B12 deficiency) and D-dimer for detection of deep vein thrombosis and pulmonary embolism will be available on this important platform in the first half of 2006. The launched assays will be in Axis-Shield livery and will be exclusively distributed by Abbott, with a higher return to Axis-Shield compared to conventional OEM arrangements. AxSYM(R) is one of the most successful automated immunoassay platforms, with over 17,000 instruments in place worldwide. Our access to AxSYM(R) instruments will not only substantially contribute to revenues over the next 10 years and beyond, but also give us brand recognition, particularly for our own unique markers, in an area where own-brand labelling by large laboratory instrument suppliers such as Roche, Bayer and Abbott has dominated up till now. We continue to work with the major IVD companies in order to ensure the widest commercialisation of our key markers, as these companies control the majority of the installed instrument base and therefore dominate the laboratory diagnostics market. Our most recent arrangement in this area has been to extend our collaboration with Abbott to develop tests for homocysteine and anti-CCP on its flagship highest throughput platform, known as ARCHITECT(R). This system integrates immunoassay and clinical chemistry testing onto one easy-to-use platform, delivering workstation integration, high throughput and fast turnaround to diagnostic laboratories worldwide. As a result of our ability to deliver assays onto various platforms utilising different technologies our skills in adapting assays to automated instrument platforms are now also being sought by large diagnostic organisations for OEM contracts involving system menu extensions with markers which are not proprietary to Axis-Shield. Point-of-Care Division Point-of-Care product revenues were #19.7 million compared to #18.3 million in 2004, representing an increase of 7.5%. The principal element of these sales continues to be the NycoCardTM platform and particularly our tests for CRP (for distinguishing between bacterial and viral infections) and HbA1c. NycoCardTM sales were up by 14.8% over 2004 to #15.7 million (versus #13.7 million in 2004) and 18% by volume, with good growth recorded in many markets including South and East Asia. The installed base of instruments continues to increase and more than 2,000 new instruments were supplied during 2005 increasing the total to more than 16,000 placements. CRP sales were assisted by a high incidence of influenza in key markets in early 2005, coupled with continued concerns regarding avian ' flu. Although our new AFINIONTM point-of-care system was launched at the end of 2004, we have limited sales to a small number of customers in our home markets and we are currently holding back on shipments to new accounts pending resolution of some issues relating to manufacturing scale up by our instrument suppliers in Sweden. We are determined to ensure that the system is completely robust and able to deliver consistent high quality and rapid results in the hands of all users and thus have delayed wider product availability and US launch until our exhaustive testing is complete, estimated to be in H2 2006. We have also taken the opportunity to restructure our Oslo operation to focus on our need for more instrumentation skills. Feedback from our current user base has been very positive, especially concerning the ease of use of the system, coupled with the fact that the novel and versatile detection technology employed in AFINIONTM will allow us to offer a menu of tests using the same standardised procedure, including analytes traditionally measured either by immunoassay or by clinical chemistry technology. Our market research continues to confirm that the demand for tests that can be performed quickly and accurately in doctors' surgeries is increasing and that point-of-care diagnostics is becoming an important part of better clinical practice, to the ultimate benefit of the patient. HbA1c, the first test which we have developed for use on AFINIONTM, is working well and during 2005 both the system and the HbA1c test received 510(k) marketing clearance in July from the FDA in the USA. This was followed up by the February 2006 receipt of CLIA waiver for the AFINIONTM platform with the HbA1c test from the FDA, facilitating its use in primary care. There are more than 100,000 CLIA-registered Physicians' Office Laboratories (POL) in the United States which can now use AFINIONTM, whereas without CLIA waiver, less than half would be eligible to use the system. A Swedish External Quality Assurance organisation (EQUALIS) has recently co-ordinated testing of the system across several sites, using the HbA1c cartridge and reported very good reproducibility of results. We were also pleased to see that the test was certified by the National Glycohemoglobin Standardisation Program (NGSP), achieving a Coefficient of Variation (the measure of variability of assay results) well within the criterion set by the NGSP. NGSP is an independent quality assessment run by the University of Missouri, USA. The importance of the certification is such that the American Diabetes Association only recommends, and many health care providers in the USA will only use, tests that are NGSP-certified. We are building our US operations at our base near Boston, in readiness for the AFINIONTM launch by Abbott Laboratories, our partner for the US distribution of AFINIONTM. The arrangement with Abbott will give us full access to one of the USA's strongest distribution networks and an extensive distribution support organisation for POL customers. Abbott will also sell the product directly to US hospitals using its own sales force. Outside the USA we continue to be approached by companies seeking AFINIONTM distribution rights and several exclusive arrangements have been signed. In addition to the existing AFINIONTM HbA1c test, we have supplied a CE-marked (permitting EU sale) test for CRP to our small panel of trial users and we intend to launch a test for ACR (albumin/creatinine ratio used to measure renal function) after we have commenced wider marketing of the instrument and received the necessary regulatory clearance for the test from the FDA. An assay for PT (prothrombin to measure anticoagulant efficacy) is planned for 2007 launch, with further markers following. Each individual test is represented by a single cartridge which is slotted into the front of the AFINIONTM instrument. We announced in November that Axis-Shield was involved in a new #10 million project co-ordinated and funded by ITI Techmedia to develop a biosensor-based instrument platform for theranostic applications. Axis-Shield believes that involvement in such cutting edge projects, particularly in helping to define commercial performance targets and applications, reinforces the Company's commitment to innovation in near patient diagnostic testing. ITI Techmedia is one of three institutions set up by the Scottish Executive (the devolved government for Scotland) to encourage and exploit Scottish innovations in certain key areas including healthcare. Direct Distribution Our distribution businesses are valuable to us, not only because they continue to grow with both Axis-Shield and third party distribution, but because they also allow us to maintain direct contact with our end-user customer base in our home markets. Sales in the Nordic countries through Medinor reached #17.7 million for third party products in 2005, against #16.6 million in 2004, an increase of 6.4%. Total sales, including Axis-Shield products, reached #25.4 million, representing a 2.7% increase over the previous year. Medinor's objective is to become a full range medical device supplier in the Nordic region, allowing it to compete in the tender process which favours suppliers with the widest portfolios. In Norway, Medinor is already actively selling medical devices and has recently added high margin endoscopy equipment to its range, with orthopaedic implants brought in during early 2005. The State takeover of hospitals in Norway, with 5 regional authorities operating through a tender process, continues to make for difficult and competitive trading conditions but Medinor is well placed to benefit from this centralisation, particularly as it offers a wider range of products. In 2005 it exceeded targeted net profit margins and those achieved in 2004. Until recently Medinor sales in the other Nordic countries were confined to IVD and related products but this is changing, starting in Denmark where a range of pulmonary devices has been introduced. Medinor has begun commercialisation of AFINIONTM in the key Nordic markets, where PoC testing in the doctor's office is well established, though this has been restrained by the limited availability of instruments as explained above. UK sales reached #1.9 million (2004: #2.1 million). #1.1 million of this figure was from third party distributed products. The UK sales division has been repositioned for a greater focus in the point-of-care market to capitalise on the potential of AFINIONTM, and as a result this year's sales have suffered through delays in instrument supply. There are signs that the traditionally poor UK market potential for near patient testing will be improved by Government-sponsored moves towards practice-based commissioning, giving general practitioners more freedom to operate for the benefit of patients, to include PoC test reimbursement. Axis-Shield UK's move to new premises, with local warehousing and distribution, has worked well and the organisation is well placed for future growth as it attracts new distribution agencies. Plasmatec, our Dorset-based subsidiary selling mostly infectious disease assays and low cost commodity diagnostics to developing countries, achieved sales of #2.1 million, an increase of 5.4% over the corresponding period last year. This has been helped by increasing penetration into Central and Latin American markets. Board We announced today that we have appointed Staffan Ek as non-executive director. Staffan has extensive knowledge of the healthcare sector, acquired over thirty years in the industry, primarily with Pharmacia, Boehringer Mannheim and Roche Diagnostics. He recently retired from Roche, where he was Head of Diabetes Care, an Executive Director of Roche Diagnostics, and a permanent participant of the Corporate Executive Committee of F Hoffmann-La Roche AG, Basle, Switzerland. His wide experience within the healthcare sector at senior executive level will be an invaluable asset to Axis-Shield, particularly as the Company continues its expansion into primary care diagnostics via its AFINIONTM platform. Outlook We believe that our success during 2005 will be sustained and that our substantial investments of recent years will produce increasing returns. Market feedback on AFINIONTM has been very positive and we are confident that this new system will make a substantial contribution to revenues going forward. Additionally we will launch the first AxSYM(R)xtra markers in the first half of 2006 and continue the new programme to develop two of our tests for the ARCHITECT(R) system. Together, these events will increase our industry and customer profile and position the Company for strong revenue growth in the coming years, creating increased shareholder value. Our positive cash flow and strong balance sheet will allow us to continue to invest in our R&D and operational capabilities and gain further momentum in our drive to build a robust and profitable enterprise able to capitalise on the technological opportunities which are a feature of this rapidly changing but critically important area of healthcare. Consolidated Income Statement For the year ended 31 December 2005 2005 2004 #000 #000 Revenue - Continuing operations 58,174 52,288 Cost of Sales (26,802) (24,423) _____ _____ Gross Profit 31,372 27,865 Operating expenses (20,774) (18,803) _____ _____ Operating Profit before Research &Development 10,598 9,062 Research and Development Point of Care (internal) (3,318) (3,207) Point of Care (external) (520) (2,850) Lab Division (internal) (4,651) (3,616) Lab Division (external) (245) (8,734) (271) (9,944) _____ _____ _____ _____ Operating profit/(loss) 1,864 (882) Interest receivable 391 240 Interest payable (340) (142) _____ _____ Profit/ (Loss) on Ordinary Activities before Taxation 1,915 (784) Taxation (85) (51) _____ _____ Profit/(Loss) for the Financial Period after Taxation attributable to Equity Shareholders 1,830 (835) _____ _____ Profit/(Loss) per ordinary 35p share Basic 3.77p (1.72p) Fully diluted 3.74p (1.72p) Statement of Recognised Income and Expense for the year ended 31 December 2005 2005 2004 #000 #000 Profit/(Loss) for the financial year 1,830 (835) _____ _____ Net exchange adjustments offset in reserves (122) 422 Cash flow hedges - net fair value gains 68 - _____ _____ Net (losses)/gains not recognised in income statement (54) 422 _____ _____ Total recognised income/(expense) for the financial year 1,776 (413) _____ _____ Consolidated Balance Sheet At 31 December 2005 Group Group 2005 2004 #000 #000 Non-current Assets Goodwill 6,632 6,517 Development costs 546 355 Other intangible assets 9,670 11,113 Property, plant and equipment 13,480 10,156 Other non-current assets 67 108 _____ _____ 30,395 28,249 _____ _____ Current Assets Inventories 7,731 8,004 Trade and other receivables 10,934 9,820 Financial assets - Derivative financial instruments 36 - - Cash and cash equivalents 11,487 11,940 _____ _____ 30,188 29,764 _____ _____ Current Liabilities Trade and other payables 11,998 13,168 Financial liabilities - Derivative financial instruments 3 - - Borrowings 598 346 Provisions 773 223 _____ _____ 13,372 13,737 _____ _____ Net Current Assets 16,816 16,027 _____ _____ Total Assets Less Current Liabilities 47,211 44,276 Non-current liabilities Financial liabilities - Borrowings 4,754 3,471 Retirement benefit obligations 1,779 1,795 Provisions 13 204 Other non-current liabilities 1,606 1,784 _____ _____ 8,152 7,254 _____ _____ Net Assets 39,059 37,022 _____ _____ Equity Share Capital 16,987 16,987 Other Equity 440 168 Share Premium 49,189 49,189 Capital Redemption Reserve 244 244 Merger Reserve 17,922 17,922 Cumulative Translation Reserve 755 877 Hedging Reserve 68 - Retained Loss (46,546) (48,365) _____ _____ Total Shareholders' Equity 39,059 37,022 _____ _____ Consolidated Cash Flow Statement For the year ended 31 December 2005 2005 2004 #000 #000 Cash flows from operating activities Cash generated from operations 3,130 3,359 Interest paid (340) (142) Interest received 391 240 Tax paid (45) (38) _____ _____ Net cash from operating activities 3,136 3,419 _____ _____ Cash flows from investing activities Purchases of property, plant and equipment (PPE) (4,788) (2,622) Proceeds from sale of PPE - 31 Purchases of intangible assets (302) (249) Proceeds from disposal of associated business 26 - _____ _____ Net cash used in investing activities (5,064) (2,840) _____ _____ Cash flows from financing activities Finance lease proceeds 1,995 1,121 Finance lease principal repayments (404) (40) _____ _____ Net cash generating from financing activities 1,591 1,081 _____ _____ Net (decrease)/increase in cash and cash equivalents (337) 1,660 Cash and cash equivalents at beginning of period 11,924 10,106 Exchange (losses)/gains on cash and cash equivalents (122) 158 _____ _____ Cash and cash equivalents at end of period 11,465 11,924 _____ _____ Cash generated from operating activities For the year ended 31 December 2005 2005 2004 #000 #000 Profit/(loss) for the financial period 1,830 (835) Taxation 85 51 Depreciation of tangible fixed assets 1,486 1,337 Amortisation of intangible fixed assets 1,659 1,697 Capitalised development costs (233) (110) Profit on sale of property, plant & equipment - (8) Impairment of investment in associate 17 - Provisions for investments - 2 Interest payable 340 142 Interest receivable (391) (240) Share based payment - value of employee service 264 168 Increase/(Decrease) in provisions 528 (575) Decrease in inventories 277 260 Increase in trade and other receivables (1,104) (249) (Decrease)/increase in creditors (1,663) 1,719 Increase in derivative financial instruments at fair value through the income 35 - statement _____ _____ Cash generated from operations 3,130 3,359 _____ _____ 1. Notes to the preliminary results The financial information set out in the preliminary announcement does not constitute the Group's statutory accounts within the meaning of Section 240 of the Companies Act 1985 and has been extracted from the full accounts for the years ended 31 December 2005 and 31 December 2004 respectively. The information for the year ended 31 December 2004 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on the financial statements was unqualified and did not include a statement under section 237(2) or (3) of the Companies Act 1985. The statutory financial statements for the year ended 31 December 2005 have yet to be signed. They will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course. These financial statements have been prepared in accordance with the accounting policies based on International Financial Reporting Standards ("IFRS") and IFRIC interpretations endorsed by the European Union (EU) and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention as modified by the revaluation of derivative financial instruments. The 2004 comparative information has, as permitted by the exemption in IFRS 1, not been prepared in accordance with IAS 32, Financial Instruments: Disclosure and Presentation, and IAS 39, Financial Instruments: Recognition and Measurement. Instead, IAS 32 and IAS 39 have been implemented with effect from 1 January 2005. 2. Segmental analysis Pursuant to the "management approach" set out in IAS 14 our reporting follows the Group's internal structure. Accordingly, business activities in the Axis-Shield Group are divided into three business divisions. The Point of Care division comprises all activities associated with tests performed at the point of consultation with healthcare professionals. The Laboratory division concentrates on in vitro diagnostics tests for use in the clinical laboratory. The Distribution division is an independent arms-length operation which sells both our in-house products and third party products. Corporate consists of centralised corporate costs which are not allocated across the three business divisions. Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would be available to unrelated third parties. (a) Primary reporting format - business segments The segmental results for the 12 months to 31 December 2005 are as follows: Point-of-Care Laboratory Direct Division Division Distribution Corporate Elimination Group #000 #000 #000 #000 #000 #000 Total gross segment revenue 16,411 19,678 27,139 - - 63,228 Inter-segment revenue (4,637) (403) (14) - - (5,054) _____ _____ _____ _____ _____ _____ Total revenue 11,774 19,275 27,125 - - 58,174 _____ _____ _____ _____ _____ _____ Segment result before R & D 2,097 8,136 1,578 (1,270) 57 10,598 Research & Development (3,838) (4,896) - - - (8,734) _____ _____ _____ _____ _____ _____ Operating (Loss)/Profit (1,741) 3,240 1,578 (1,270) 57 1,864 Interest (payable)/receivable - net (508) (400) (154) 1,113 - 51 _____ _____ _____ _____ _____ _____ (Loss)/Profit on Ordinary (2,249) 2,840 1,424 (157) 57 1,915 Activities before Taxation Taxation - - (85) - - (85) _____ _____ _____ _____ _____ _____ (Loss)/Profit for the Financial Period after Taxation (2,249) 2,840 1,339 (157) 57 1,830 _____ _____ _____ _____ _____ _____ The segmental results for the 12 months to 31 December 2004 are as follows: Point-of-Care Laboratory Direct Division Division Distribution Corporate Elimination Group #000 #000 #000 #000 #000 #000 Total gross segment revenue 15,223 16,220 25,662 - - 57,105 Inter-segment revenue (4,439) (351) (27) - - (4,817) _____ _____ _____ _____ _____ _____ Total revenue 10,784 15,869 25,635 - - 52,288 _____ _____ _____ _____ _____ _____ Segment result before R & D 2,925 5,676 1,558 (1080) (17) 9,062 Research & Development (6,057) (3,887) - - - (9,944) _____ _____ _____ _____ _____ _____ Operating (Loss)/Profit (3,132) 1,789 1,558 (1080) (17) (882) Interest (payable)/receivable - net (245) (230) (78) 651 - 98 _____ _____ _____ _____ _____ _____ (Loss)/Profit on Ordinary (3,377) 1,559 1,480 (429) (17) (784) Activities before Taxation Taxation - - (51) - - (51) _____ _____ _____ _____ _____ _____ (Loss)/Profit for the Financial Period after Taxation (3,377) 1,559 1,429 (429) (17) (835) _____ _____ _____ _____ _____ _____ (b) Segmental Analysis by product area 2005 2005 2004 2004 #000 #000 #000 #000 Point of Care Nycocard 15,745 13,717 Coagulation 2,849 3,440 Other Point of Care 1,136 1,192 _____ _____ Total Point of Care Products 19,730 18,349 _____ _____ Laboratory Products Alcohol Related Diseases 1,002 1,458 Homocysteine 8,183 6,496 Infectious Disease 2,720 2,643 Autoimmune - 303 Anti-CCP 1,478 936 Anti-Tg/TPO 1,382 1,050 BNP 3,183 1,775 Sirolimus 748 232 Other 902 1,131 _____ _____ Total Laboratory Products 19,598 16,024 Distribution of third party products 18,846 17,915 _____ _____ 58,174 52,288 _____ _____ (c) External Sales geographically by destination 2005 2004 #000 #000 Europe 39,911 37,312 North America 12,588 9,342 Rest of World 5,675 5,634 _____ _____ 58,174 52,288 _____ _____ 3. Profit/(Loss) per ordinary share Basic earnings per share is calculated by dividing the profit/(loss) for the financial period after taxation by the weighted average number of ordinary shares in issue during the period. The basic earnings per share are calculated as follows:- Twelve months Twelve months ended ended December 2005 December 2004 Profit/(loss) after taxation (#000s) 1,830 (835) _____ _____ Weighted -average number of ordinary shares in issue 48,532,875 48,532,875 _____ _____ Basic earnings/(loss) per share (pence) 3.77p (1.72p) _____ _____ The difference between basic and diluted weighted-average shares results from the assumption that dilutive share options were exercised. Only those share options which have a dilutive effect were used for the purposes of calculating the weighted-average shares outstanding. The diluted earnings per share is calculated as follows:- Twelve months Twelve months ended ended December 2005 December 2004 Profit/(loss) after taxation (#000s) 1,830 (835) _____ _____ Weighted-average number of ordinary shares in issue 48,532,875 48,532,875 Adjustment for share options 371,877 - _____ _____ Weighted-average number of ordinary shares for diluted earnings per share 48,904,752 48,532,875 _____ _____ Diluted earnings/(loss) per share (pence) 3.74p (1.72p) _____ _____ There is no dilutive effect of the options outstanding in 2004, therefore no dilutive share options are included in the 2004 comparative calculations. This information is provided by RNS The company news service from the London Stock Exchange END FR UUUCAWUPQGQM
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