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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bioquell | LSE:BQE | London | Ordinary Share | GB0004992003 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 597.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMBQE
RNS Number : 4945V
Bioquell PLC
24 July 2018
24 July 2018
Bioquell PLC - 2018 interim results
Bioquell PLC ("Bioquell") (LSE symbol: BQE) - a leading provider of bio decontamination solutions and modular isolators for the Pharmaceutical, Life Science and Healthcare markets today announces its interim results for the six month period ended 30 June, 2018.
Financial highlights
-- Total revenues including defence sales increased by 9% to GBP15.7 million (2017: GBP14.3 million), an increase of 13% at constant currency rates
-- Revenues excluding defence increased by 7% to GBP15.0 million (2017: GBP14.0 million). Like-for-like revenues, adjusting for the disposal of the AirFlow Spares and Service business ("AirFlow"), were up 15% at constant currency rates
-- EBITDA increased 28% to GBP3.3 million (2017: GBP2.5 million)
-- Profit before tax increased by 41% to GBP2.0 million (2017: GBP1.4 million)
-- Basic earnings per share were up 38% to 7.6p (2017: 5.5p)
-- Cash and cash equivalents of GBP15.0 million at 30 June 2018 (2017: GBP11.8 million)
Operational highlights
-- Disposed of final non-core asset, MDH Defence, for an initial consideration of GBP0.4 million and a possible future consideration of GBP0.6 million contingent on financial performance
-- Completed the disposal of AirFlow
-- Repositioned business with focus on bio decontamination solutions and modular isolators
Commenting on the 2018 interim results, Ian Johnson, Executive Chairman of Bioquell PLC, said:
"I am pleased to report continued growth in revenues despite exchange rate headwinds, a strong comparative first half in 2017 and the effect of disposals. Our core business increased by 15% on like for like sales at constant currency. Profit before tax increased by 41% with further improvement in gross margins from 52% to 54%.
The final non-core asset disposal of MDH Defence (which will cease to generate revenue from the end of 2018) provides the business with more predictable revenues and higher quality earnings from bio decontamination solutions and modular isolators. Given the continued improvements, particularly with respect to profitability, the Board believes that the Company will exceed current market expectations for profit for the full year."
Enquiries:
Ian Johnson Executive Chairman Bioquell PLC 01264 835900
Michael Roller Finance Director
Notes to Editors:
Bioquell is a UK-headquartered, international technology company (www.bioquell.com) which develops, manufactures and markets bio decontamination solutions and modular isolators into the Pharmaceutical, Life Sciences, and healthcare sectors, with most of its revenues generated from overseas customers.
-- Bioquell's bio-decontamination technology uses vaporised hydrogen peroxide (VH202) which is highly effective at eradicating micro-organisms such as bacteria and viruses at room temperature - and is subsequently broken down at the end of the bio-decontamination process into residue-free water vapour and oxygen (hence an extremely 'green' technology). Bioquell has a number of patents associated with this technology.
-- Bioquell has also developed a number of products which complement its core VH202 technology. The Bioquell-Qube, is a novel, modular isolator which may be used for a variety of applications, including Sterility testing, drug compounding and cell therapy.
-- The Bioquell-POD is a fast-to-deploy semi-permanent single patient room primarily used in multi-bed units to control infections in hospitals.
-- Bioquell's products and services are sold by wholly-owned Bioquell organisations in the UK, USA, France, Germany, Ireland, Singapore, China and through a network of international distributors.
Further information for investors can be found at www.bioquellplc.com.
CHAIRMAN'S STATEMENT
INTRODUCTION
Total revenues for the half year increased by 9% to GBP15.7 million (2017: GBP14.3 million), up 13% at constant currency rates.
Following the announcement on 25th May 2018 regarding the disposal of MDH Defence, the business is now exclusively focussed on developing, manufacturing and marketing two product lines - bio decontamination solutions (products and services) and modular isolators as its core business of providing 'risk reduction solutions' to pharmaceutical, life science and healthcare customers.
BUSINESS REVIEW
Revenues generated from core business increased 7% over the prior half year to GBP15.0 million (2017: GBP14.0 million), up 11% at constant currency rates and an increase of 15% on like-for-like sales (excluding sales of Airflow products) at constant currency rates.
Revenues were driven substantially by a strong performance in sales of the Bioquell Qube modular isolator, which were up 90%. This was partially offset by a small decline in revenues from the Group's other product line, bio decontamination solutions, as a result of both the disposal of AirFlow and of lower equipment sales by comparison with strong comparative first half sales in 2017 (which included a large one-off equipment order worth GBP1.1 million).
Hot Features
Premium
GBP'000 H1 2018 H1 2017
Bio decontamination solutions (products and
services) 11,506 11,978
-------- --------
Modular isolators 3,510 2,044
-------- --------
Bio decontamination business segment (see note
3 to accounts) 15,016 14,022
-------- --------
Approximately 80% of revenues are generated from direct sales, with the balance of 20% coming from sales to distributors.
Pharma/Life Science revenues were up 8% to GBP12.3 million (2017: GBP11.4 million).
Healthcare revenues were up 12% to GBP2.7 million (2017: GBP2.4 million).
Recurring revenues from services and product support sales (excl. AirFlow) were GBP5.5 million (2017: GBP5.1 million) representing 37% of total revenues.
Bio decontamination Solutions
Bioquell's patented 'Vapourised Hydrogen Peroxide' (VH202) technology has been adopted around the world as the 'gold standard' for bio-decontamination. It provides the highest level of efficacy and ensures a 6 log kill (99.9999%) of all microorganisms present. It is used in pharmaceutical manufacturing and life science research laboratories to eradicate contamination and in critical care facilities in hospitals to control the spread of infection. There are a growing number of regulations affecting these markets, increasing the demand for Bioquell's highly effective bio decontamination products and services as our clients remain focussed on attaining - and retaining - regulatory compliance.
Bio decontamination solutions provides equipment, services and product support globally via direct sales offices and a network of distributors.
The Company provides a full range of equipment to meet customer requirements including portable and fixed systems.
Services includes Bioquell's Rapid Bio Decontamination Service (RBDS), which will carry out bio decontamination for customers on a standby, emergency or regular basis using specialised equipment and highly trained staff. The Company is currently investing in upgrading and extending the fleet of equipment to meet growing global demand, particularly for pharma customers.
Also included in services is the Bioquell POD which can be quickly deployed to convert multi-bed, open plan hospital units at high risk of spreading infections, into single-occupancy rooms and is available to purchase or rent.
Product support includes recurring revenues from maintenance, service and spares, supply of consumables (peroxides & biological/chemical indicators), POD rentals and proactive RBDS engagements in hospitals.
Revenues from bio decontamination solutions slightly decreased in the first half of 2018 to GBP11.5 million (2017: GBP11.9 million). This included GBP4.4 million of associated product support revenues (2017: GBP4.6 million). The disposal of AirFlow in 2017 meant that approximately GBP0.5 million of revenues were not repeated in the first half of 2018, therefore, like-for-like bio decontamination revenues were marginally up. The first half of 2017 also included a large 'one-off' equipment sale of GBP1.1 million. Taking these factors into account, growth was 12%.
Modular Isolators
The Bioquell - QUBE comprises a novel, modular isolator incorporating VH202 technology. The QUBE is used to provide an aseptic environment for a range of applications including: sterility testing; the production of toxic, intravenous oncology drugs; and the production of small-scale cell-based healthcare (cell therapy) products. Over time we expect the range of specialist applications for the QUBE to increase, with an associated growth in revenues.
Recurring revenues are generated via product support comprising validation, service contracts and spares, together with supply of consumables (peroxide & biological/chemical indicators).
Modular Isolator revenues in the first half of 2018 increased by 67% to GBP3.5 million (2017: GBP2.1 million). This included Qube sales of GBP3.0 million (2017: GBP1.6 million) and associated product support revenues of GBP0.5 million (2017: GBP0.5 million).
Defence
The Company announced on 25(th) May that it had disposed of its MDH Defence business. The initial consideration for the sale was GBP0.4 million, and Bioquell may also benefit from a further GBP0.6 million in additional contingent consideration for the disposal should MDH be successful in bidding for a specific contract which was initiated prior to disposal, although none of this possible additional consideration has been recognised at 30 June 2018.
Defence revenues in the first half of 2018 were GBP0.6 million (2017: GBP0.3 million) and we anticipate a further GBP0.7 million in the second half as a result of pre-existing commitments for Bioquell to complete current contracts which were not transferred to the purchaser as part of the sale.
FINANCIAL RESULTS
The Group has direct sales operations in the UK, Ireland, France, Germany, USA, China and Singapore and a network of distributors around the world.
Revenues from non-UK sales
The average US Dollar rate in H1 2018 was $1.376, compared to $1.259 in H1 2017, providing something of a currency headwind for much of the first half, although the dollar rate at the end of June 2018 was very similar to the rate at the end of June 2017. The average Euro rates in H1 2018 and H1 2017 were similar. We estimate that approximately 48% of revenues were denominated in US dollars in the first half, with a further 29% denominated in Euros.
Gross margin in the period increased from 52% to 54% as a result of strong activity levels.
Research & development and engineering costs
As is set out in the table below, the accounting charge for Research & Development ("R&D") costs in the period increased by 3% to GBP1.2 million (2017: GBP1.1 million). Cash R&D costs were GBP775k in the first half (2017: GBP808k), representing a 4% decrease.
R&D costs (GBP000) H1 2018 H1 2017 Amount of R&D expensed in period (637) (690) Amortisation & impairment of previously capitalised development costs (539) (449) ------------------------------------------ -------- -------- Total R&D charge under IFRS (1,176) (1,139) ------------------------------------------ -------- -------- Total R&D cash expenditure (775) (808) Amount of development costs capitalised (138) (118) ------------------------------------------ -------- --------
Sales and marketing costs and administrative expenses increased respectively by 8% and 11%.
EBITDA (Earnings before interest, tax, depreciation and amortisation) increased by 28% in the period to GBP3.3 million (2017: GBP2.5 million). Operating profit was GBP2.0 million compared to a GBP1.4 million profit in H1 2017.
Pre-tax profit increased 41% to GBP2.0 million (H1 2017: GBP1.4m). There was an aggregate GBP0.1 million (H1 2017: nil) gain on the disposal of the AirFlow and Defence businesses in the period.
Basic earnings per share increased 38% to 7.6p (H1 2017: 5.5p)
Capital expenditure was GBP0.5 million (H1 2017: GBP0.4 million)
Balance sheet
The Group continues to have a very strong balance sheet. Cash and cash equivalents at 30 June 2018 was GBP15.0 million (30 June 2017: GBP11.8 million).
During the period the Group repurchased 285,000 shares at a cash cost of GBP0.84 million and paid corporation tax of GBP0.5 million (H1 2017: GBP nil) as a result of its tax losses in the UK and US becoming fully utilised.
SUMMARY & OUTLOOK
The Company has made good progress in the first half of the year with revenues increasing despite currency headwinds, disposals and difficult comparisons with the first half of 2017. Gross margins continue to improve and pre-tax profits together with earnings per share have increased significantly.
The defence business was the final non-core disposal which means Bioquell can now exclusively focus on developing, manufacturing and marketing bio decontamination solutions and modular isolators for pharmaceutical, life science and healthcare customers worldwide.
Going forward our objective is to grow the core business globally through organic growth and to increase Bioquell's presence in key strategic markets. Investment in upgrading equipment and strengthening our sales and marketing effort is ongoing together with continuous improvements in operational efficiency. The absence of the defence business, which historically has been unpredictable with lower margins, should have a positive impact on future financial performance.
The Board anticipates broadly similar financial performance in the second half of the year and that the Company's full year pre-tax profit will exceed market expectations.
Prior to publication, the information contained within this announcement was deemed to constitute inside information under the Market Abuse Regulations (EU) No. 596/2104 ("MAR")
Ian Johnson
Executive Chairman
Bioquell PLC
24 July 2018
Consolidated income statement
Unaudited results for the six months ended 30 June 2018
12
6 6 months
months months to
to to 31
30 June 30 June December
2018 2017 2017
Continuing operations Notes GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Revenue 1 15,660 14,336 29,190
Cost of sales (7,263) (6,940) (13,986)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Gross profit 8,397 7,396 15,204
Gross profit margin 54% 52% 52%
Operating expenses:
Sales and marketing costs (3,072) (2,842) (5,654)
Administration costs (2,268) (2,036) (4,459)
R&D and engineering costs (1,176) (1,139) (2,168)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Profit from operations before adjusted
items 1,881 1,379 2,923
Profit on sale of Airflow and Defence businesses 2 76 - 315
Profit from operations 1,957 1,379 3,238
Investment revenues 121 111 53
Finance costs (119) (97) (8)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Profit before tax 1,959 1,393 3,283
Tax charge on profit on ordinary activities (254) (169) (591)
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Profit for the period attributable to equity
holders of the parent 1,705 1,224 2,692
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Earnings per share attributable to the
owners of the parent - basic 7.6p 5.5p 11.6p
-
diluted 7.1p 5.0p 10.8p
---------------------------------------------------------------------------------------------------------------- ----- ------- ------- --------
Supplementary notes 1. The financial information for the six months ended 30 June 2018 and the comparative figures for the six months ended 30 June 2017 have not been reviewed or audited by the Group's auditors and have been prepared on the basis of the accounting policies adopted by the Group under IFRS. The same accounting policies and methods of computation are followed in the interim financial report as were published by the Company on 7 March 2018 in its annual financial statements, which are available on the Company's website at www.bioquellplc.com. The Group has adopted IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Customers) in 2018, neither have resulted in a change to the reported accounts.
2. The comparative figures for the twelve months to 31 December 2017 have been prepared under IFRS. They do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The unqualified audited accounts for the twelve months ended 31 December 2017 have been filed with the Registrar of Companies and they did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
3. The tax charge shown on the income statement represents a combined corporation tax charge and deferred tax credit. The charge is based on the Group's anticipated effective tax rate for the full year of 13.0% (2017: 18.0%), the reduced rate being mainly due to the movement in deferred tax.
4. Earnings per share for the half year have been calculated on the profit on ordinary activities on continuing operations after taxation and the total earnings attributable to the owners of the parent divided by the weighted average number of ordinary shares in issue during the period. The Group's diluted earnings per share are calculated by including dilutive share options in the denominator.
5. There have been no related party transactions during the first six months of the financial year that have materially affected the financial position or performance of the Group during that period and there have been no changes in the related party transactions described in the last Annual Report that could do so.
6. Copies of this statement will be available to members of the public at the Company's registered office: 52 Royce Close, West Portway, Andover, Hampshire SP10 3TS and on the Group's website at www.bioquellplc.com.
Principal risks and uncertainties
The Board believes that the principal risks and uncertainties facing the Group have not changed materially from those described in the 2017 Annual Report, including the summary of risks and uncertainties set out on pages 5 and 6 therein. The Group provides complex equipment and specialist services to a large number of clients in the UK and internationally. Accordingly the Group is subject to a broad range of strategic, operational and financial risks and uncertainties, including the following principal risks:
-- Regulatory Risk
The Group operates in a number of countries and sectors which are highly regulated. These regulations affect both the Group's customers and the Group's products. There is a risk that the relevant regulations could be changed and such changes could significantly adversely affect the Group's business in a specific country or sector.
-- Technological Risk
The Group is dependent on its technology, and on its products and services, continuing to be efficacious, cost effective and attractive to the marketplace. There is the risk that new technologies, products or services are developed by competitors which perform better, are easier to use or are more cost effective than those of the Group
-- Financial Risk
The Group has a number of international subsidiaries and trades with companies located throughout the world. The international nature of many of its business activities results in elevated financial risk, including, but not limited to: foreign exchange exposure, credit risk and cash collections/retention/management (together "Key Financial Risks").
Going concern
The Group has sufficient financial resources to cover budgeted future cash flows, together with contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Directors confirm that they have a reasonable expectation that the Group has adequate financial resources to continue to trade for the foreseeable future. Thus, they continue to adopt the going concern basis in preparing the financial statements.
Responsibility statement
We confirm that to the best of our knowledge: (i) the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting; (ii) the financial statements give a true and fair view of the assets, liabilities, financial position and profit of the undertakings included in the consolidation as a whole as required by DTR 4.2.4R; (iii) the Interim Management Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and a description of principal risks and uncertainties for the remaining six months of the year); and (iv) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
IAN JOHNSON MICHAEL ROLLER Executive Chairman Group Finance Director
24 July 2018
Consolidated statement of comprehensive income
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
----------------------------------------------- ------------- ------------- ------------
Profit for the period 1,705 1,224 2,692
Exchange differences on translation of foreign
operations * 24 (111) (68)
----------------------------------------------- ------------- ------------- ------------
Total recognised income for the period 1,729 1,113 2,624
----------------------------------------------- ------------- ------------- ------------
* May be reclassified subsequently to profit or loss in accordance with IFRS
Consolidated statement of changes in equity
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
Notes 2018 GBP'000 2017 GBP'000 GBP'000
---------------------------------------------- ----- ------------- ------------- ------------
Profit for the period 1,705 1,224 2,692
Exchange differences on the translation
of foreign operations 24 (111) (68)
---------------------------------------------- ----- ------------- ------------- ------------
Total comprehensive income in the period 1,729 1,113 2,624
Other movements in the period:
Issued share capital 12 26 33
Issued share premium 44 187 237
Acquisition of own shares for cancellation 6 (842) - -
Acquisition of own shares to be held in
Treasury - (304) (304)
Credit to equity reserve for share-based
payments 89 78 223
Deferred tax credit to equity for share-based
payments 56 94 -
Charge to equity for deferred tax - - 115
Charge to equity on exercise of share options
under the SARS scheme (6) - (2)
Net increase in equity shareholders' funds 1,082 1,194 2,926
---------------------------------------------- ----- ------------- ------------- ------------
Equity shareholders' funds at beginning
of period 26,760 23,834 23,834
Equity shareholders' funds at end of period 27,842 25,028 26,760
---------------------------------------------- ----- ------------- ------------- ------------
Consolidated balance sheet
Unaudited results at 30 June 2018
31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
--------------------------------------------- ------------- -------------- -----------
Non-current assets
Other intangible assets 6,112 7,228 6,817
Property, plant and equipment 3,745 4,248 3,910
Deferred tax assets 468 90 422
--------------------------------------------- ------------- -------------- -----------
10,325 11,566 11,149
--------------------------------------------- ------------- -------------- -----------
Current assets
Inventories 3,578 3,140 3,204
Trade and other receivables 6,451 5,355 5,822
Derivative financial instruments 5 86 88
Cash and cash equivalents 15,011 11,771 14,586
--------------------------------------------- ------------- -------------- -----------
25,045 20,352 23,700
--------------------------------------------- ------------- -------------- -----------
Total assets 35,370 31,918 34,849
--------------------------------------------- ------------- -------------- -----------
Current liabilities
Trade and other payables (5,414) (5,467) (5,508)
Derivative financial instruments (80) (62) (30)
Current tax liabilities (553) (483) (768)
Provisions (295) (186) (594)
--------------------------------------------- ------------- -------------- -----------
Net current assets 18,703 14,154 16,800
--------------------------------------------- ------------- -------------- -----------
Non-current liabilities
Cash settled share based payments (115) - (49)
Deferred tax liabilities (1,071) (692) (1,140)
Total liabilities (7,528) (6,890) (8,089)
--------------------------------------------- ------------- -------------- -----------
Net assets 27,842 25,028 26,760
--------------------------------------------- ------------- -------------- -----------
Equity
Share capital 2,310 2,320 2,327
Share premium account 1,777 1,683 1,733
Equity reserve 2,167 1,909 2,069
Capital reserve 255 255 255
Translation reserve 229 162 205
Retained earnings 21,104 18,699 20,171
--------------------------------------------- ------------- -------------- -----------
Equity attributable to equity holders of the
parent 27,842 25,028 26,760
--------------------------------------------- ------------- -------------- -----------
Consolidated cash flow statement
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
Notes 30 June 2018 30 June 2017
GBP'000 2017 GBP'000 GBP'000
----------------------------------------------- -------- ------------- ------------- ------------
Net cash from operating activities 1,296 3,772 6,949
--------------------------------------------------------- ------------- ------------- ------------
Investing activities
Purchases of property, plant and equipment (480) (379) (757)
Purchases of intangible assets - - (52)
Expenditure on capitalised product development (138) (124) (132)
Proceeds on sale of businesses 494 - -
--------------------------------------------------------- ------------- ------------- ------------
Net cash used in investing activities (124) (503) (941)
--------------------------------------------------------- ------------- ------------- ------------
Financing activities
Proceeds on issue of ordinary shares 56 213 270
Acquisition of own shares for cancellation (842) - -
Acquisition of own shares to be held in
Treasury - (304) (304)
Net cash used in financing activities (786) (91) (34)
--------------------------------------------------------- ------------- ------------- ------------
Increase in cash and cash equivalents 386 3,178 5,974
--------------------------------------------------------- ------------- ------------- ------------
Cash and cash equivalents at beginning
of period 14,586 8,756 8,756
Effect of foreign exchange rate changes 39 (163) (144)
Cash and cash equivalents at end of period 15,011 11,771 14,586
--------------------------------------------------------- ------------- ------------- ------------
Note to the cash flow statement
Unaudited results for the six months ended 30 June 2018
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
------------------------------------------------- ------------- ------------- ------------
Profit before tax 1,959 1,393 3,283
Adjustments for:
Investment revenues (121) (111) (53)
Finance costs 119 97 8
Depreciation of property, plant and equipment 645 703 1,393
Amortisation and impairment losses of intangible
assets 539 464 936
Share-based payments charge 149 78 272
Profit from sale of AirFlow & Defence businesses (76) - -
(Decrease)/increase in provisions (299) (54) 354
------------------------------------------------- ------------- ------------- ------------
Operating cash flows before movements in working
capital 2,915 2,570 6,193
Increase in inventories (419) (367) (515)
(Increase)/decrease in receivables (629) 1,492 717
(Decrease)/increase in payables (45) 63 509
------------------------------------------------- ------------- ------------- ------------
Cash generated by operations 1,822 3,758 6,904
Income tax expense (528) - -
Investment revenues 121 111 53
Interest paid (119) (97) (8)
Net cash from operating activities 1,296 3,772 6,949
------------------------------------------------- ------------- ------------- ------------
Notes to the interim results
1. Revenue
The Group's bio-decontamination equipment is manufactured within the UK and sold into the UK, Europe, US and Rest of World markets.
The following table provides an analysis of the Group's sales by geographical market, irrespective of the origination of the goods or services.
12 months
6 months 6 months to
to to 31 December
30 June 30 June 2017
2018 GBP'000 2017 GBP'000 GBP'000
------ ------------- ------------- ------------
UK 3,469 3,056 5,780
EU 4,595 3,872 8,800
US 4,127 4,300 9,060
ROW 3,469 3,108 5,550
------ ------------- ------------- ------------
Total 15,660 14,336 29,190
------ ------------- ------------- ------------
The majority of revenue is recognised at a point in time. Revenue that is recognised over the term of a contract amounted to GBP1.7 million in the period (2017 H1: GBP1.9 million) and is typically that which is spread evenly over the contract period as services are provided, for instance preventative maintenance contracts and regular decontamination services.
2. Disposal of AirFlow and MDH Defence
The Group completed the disposal of the AirFlow business and sold its subsidiary MDH Defence in the period.
6 months
to
30 June
2018 GBP'000
------------------------------------------------- -------------
Consideration 494
Intangible assets (303)
Inventory (45)
Trade and other receivables (59)
Fees (11)
------------------------------------------------- -------------
Profit on sale of AirFlow and Defence businesses 76
------------------------------------------------- -------------
3. Business and geographical segments
For management purposes, the Group is currently organised into two divisions - Bio-decontamination ("BIO", which includes the two product lines; Bio-decontamination Products & Services and Modular Isolators) and Defence. These divisions are consistent with the internal reporting as reviewed by the Executive Chairman. Segment information is available only within the Income Statement, the Group does not split out the balance sheet for the Defence business. Segment information about these businesses is presented below:
BIO Defence Consolidated
Six months ended 30 June 2018 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- ------------
Revenue
Total revenue 15,016 644 15,660
Result
Segment result before exceptional item 2,354 92 2,446
Sale of AirFlow and Defence businesses 76 - 76
--------------------------------------- -------- -------- ------------
Segment result 2,430 92 2,522
--------------------------------------- -------- -------- ------------
Unallocated head office costs (565)
--------------------------------------- -------- -------- ------------
Profit from operations 1,957
--------------------------------------- -------- -------- ------------
Finance costs and investment revenue 2
--------------------------------------- -------- -------- ------------
Profit before tax 1,959
--------------------------------------- -------- -------- ------------
Tax (254)
--------------------------------------- -------- -------- ------------
Profit for the period 1,705
--------------------------------------- -------- -------- ------------
BIO Defence Consolidated
Six months ended 30 June 2017 GBP'000 GBP'000 GBP'000
------------------------------------- -------- -------- ------------
Revenue
Total revenue 14,022 314 14,336
Result
Segment result 1,932 (21) 1,911
------------------------------------- -------- -------- ------------
Unallocated head office costs (532)
------------------------------------- -------- -------- ------------
Profit from operations 1,379
------------------------------------- -------- -------- ------------
Finance costs and investment revenue 14
------------------------------------- -------- -------- ------------
Profit before tax 1,393
------------------------------------- -------- -------- ------------
Tax (169)
------------------------------------- -------- -------- ------------
Profit for the period 1,224
------------------------------------- -------- -------- ------------
BIO Defence Consolidated
Year ended 31 December 2017 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- -------- ------------
Revenue
Total revenue 28,466 724 29,190
Result
Segment result before exceptional item 4,036 (35) 4,001
Sale of Airflow business 315 - 315
--------------------------------------- -------- -------- ------------
Segment result 4,351 (35) 4,316
Unallocated head office costs (1,078)
--------------------------------------- -------- -------- ------------
Profit from operations 3,238
--------------------------------------- -------- -------- ------------
Finance costs and investment revenue 45
--------------------------------------- -------- -------- ------------
Profit before tax 3,283
--------------------------------------- -------- -------- ------------
Tax (591)
--------------------------------------- -------- -------- ------------
Profit for the year 2,692
--------------------------------------- -------- -------- ------------
4. Financial Instruments
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts within 70 to 80% of the exposure generated. The Group also enters into forward foreign contracts to manage the risk associated with anticipated sales and purchase transactions out to six months (2017: nine months) within 40 to 50% of the exposure generated. Forward exchange contracts are carried at fair value through profit and loss.
At the balance sheet date the total notional amount of outstanding forward foreign exchange contracts to which the Group has committed are as below:
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
----------------------------------- --------- --------- -------------
Forward foreign exchange contracts 3,586 6,571 5,856
----------------------------------- --------- --------- -------------
At 30 June 2018, the fair value of the Group's forward foreign exchange contracts is estimated to be approximately GBP(75,000) (30 June 2017: GBP24,000). The fair value has been calculated as the present value of future expected cash flows at market related rates, which are current at the balance sheet date. The value is calculated using readily available market data and represents a level 2 measurement in the fair value hierarchy under IFRS 7.
Other financial (liabilities)/assets
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
----------------------------------------------------- --------- --------- -------------
Financial (liabilities)/assets carried at fair value
through profit and loss (75) 24 58
----------------------------------------------------- --------- --------- -------------
5. Alternative performance measures
The Group uses constant currency revenue growth and Earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA") as its alternative performance measures as it believes these give its investors a more realistic view of progress within the business.
Constant currency growth is recalculated by reference to the comparable period foreign exchange rates as follows:
GBP'000
--------------------------------------------------- ---------
Revenue 15,660
Impact of foreign exchange movements 558
--------------------------------------------------- ---------
Constant currency revenue - H1 2017 exchange rates 16,218
--------------------------------------------------- ---------
EBITDA calculations for the reported period are as follows:
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- -------------
Profit from operations("EBIT") 1,957 1,379 3,238
Depreciation 645 703 1,393
Amortisation 659 464 936
EBITDA 3,261 2,546 5,567
------------------------------- --------- --------- -------------
6. Acquisition of own shares for cancellation
In the six months to 30 June 2018 285,000 ordinary shares of 10p each were repurchased at a cost of GBP842,000 and cancelled.
During the first half of 2017 the company acquired 190,000 shares in the market for GBP304,000. These shares were transferred into Treasury.
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.
END
IR PGUCWMUPRGAW
(END) Dow Jones Newswires
July 24, 2018 02:00 ET (06:00 GMT)
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