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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bioventix Plc | LSE:BVXP | London | Ordinary Share | GB00B4QVDF07 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -50.00 | -1.10% | 4,475.00 | 4,450.00 | 4,500.00 | 4,525.00 | 4,475.00 | 4,525.00 | 1,079 | 13:19:14 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Coml Physical, Biologcl Resh | 12.82M | 8.37M | 1.6071 | 27.85 | 233.12M |
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Bioventix plc
("Bioventix" or "the Company")
Results for the year ended 30 June 2020
Bioventix plc (BVXP), a UK company specialising in the development and
commercial supply of high-affinity monoclonal antibodies for applications in
clinical diagnostics, announces its audited results for the year ended 30 June
2020.
Highlights:
* Revenue up 11% to GBP10.31 million (2019: GBP9.29 million)
* Profit before tax up 18% to GBP8.23 million (2019: GBP6.97 million)
* Cash at year end up 27% to GBP8.1 million (30 June 2019: GBP6.5 million)
* Second interim dividend of 52p per share (2019: 43p)
* Special dividend of 53p per share (2019: 47p)
Introduction and Technology
Bioventix creates, manufactures and supplies high affinity sheep monoclonal
antibodies (SMAs) for use in diagnostic applications. Bioventix antibodies are
preferred for use when they confer an improved test performance compared to
other available antibodies.
The majority of our antibodies are used on blood-testing machines installed in
hospitals and other laboratories around the world. Bioventix makes antibodies
using our SMA technology for supply to diagnostic companies for subsequent
manufacture into reagent packs used on blood-testing machines. These
blood-testing machines are supplied by large multinational in vitro diagnostics
(IVD) companies such as Roche Diagnostics, Siemens Healthineers, Abbott
Diagnostics & Beckman Coulter. Antibody-based blood tests are used to help
diagnose many different conditions including, amongst others, heart disease,
thyroid function, fertility, infectious disease and cancer.
Over the past 15 years, we have created and supplied approximately 20 different
SMAs that are used by IVD companies around the world. We currently sell a total
of 10-20 grams of purified physical antibody per year, the vast majority of
which is exported. In addition to revenues from physical antibody supplies, the
sale by our customers of diagnostic products (based on our antibodies) to their
downstream end-users attracts a modest royalty payable to Bioventix. These
downstream royalties currently account for approximately 60-70% of our annual
revenue. Physical antibody sales and royalty revenues from our multinational
customers are made in either US dollars or Euros.
Bioventix has own-risk antibody creation projects which gives Bioventix the
complete freedom to commercialise the antibodies produced. We have also engaged
in contract antibody creation projects where customers supply materials,
know-how and funding which creates antibodies that can only be commercialised
with the partner company. In both cases, after initiation of a new project, it
takes around a year for our scientists to create a panel of purified antibodies
for evaluation by our customers. The evaluation process at customers'
laboratories generally requires the fabrication of prototype reagent packs
which can be compared to other tests, for example the customer's existing sales
test or perhaps another "gold standard" method, on the assay machine platform
being considered. The process of subsequent development thereafter by our
customers can take many years before registration or approval from the relevant
authority, for example the US FDA or EU authorities, is obtained and products
can be sold to the benefit of the customers, and of course Bioventix, through
the agreed sales royalty. This does mean that there is a lead time of 4-10
years between our own research work and the receipt by Bioventix of royalty
revenue from product sales. However, because of the resource required to gain
such approvals, after having achieved approval for an accurate diagnostic test
using a Bioventix antibody, there is a natural incentive for continued antibody
use. This results in a barrier to entry for potential replacement antibodies
which would require at least partial repetition of the approval process arising
on a change from one antibody to another.
Another consequence of the lengthy approval process is that the antibodies
discussed in the revenue review of the current accounting period were created
many years ago. Indeed, growth over the next few years from, for example the
troponin antibodies, will come from research work already carried out many
years ago. By the same dynamics, the current research work active at our
laboratories now is more likely to influence sales in the period 2025-2035.
2019/2020 Financial Results
We are pleased to report our results for the financial year ended 30 June 2020
which were ahead of expectations. Revenues for the year increased by 11% to GBP
10.31 million (2018/19: GBP9.29 million). This revenue increase, when coupled to
a modest increase in costs has generated an increase in profit before tax of GBP
8.23 million, an improvement of 18% (2018/19, GBP6.97 million). Following
increased dividend distribution during the year, cash balances at the year-end
stood at GBP8.1 million (30 June 2019 GBP6.5 million).
Our most significant revenue stream continues to come from the vitamin D
antibody called vitD3.5H10. This antibody is used by a number of small, medium
and large diagnostic companies around the world for use in vitamin D deficiency
testing. Sales of vitD3.5H10 increased by 10% to GBP4.8 million during the year.
However, as we have commented previously, there is increasing evidence that the
downstream market for vitamin D testing is flattening in US Dollar terms,
regardless of any pandemic effects.
Sales of other lead antibodies are featured below with the respective
percentage increase/decrease from 2018/19:
* NT-proBNP: GBP1.2 million (-4%) [this revenue stream will expire in July
2021]
* drug-testing antibodies: GBP0.76 million (+56%);
* T3 (tri-iodothyronine): GBP0.72 million (+13%);
* testosterone: GBP0.48 million (-41%);
* progesterone: GBP0.47 million (no change);
* estradiol: GBP0.32 million (-5%);
Total troponin sales from Siemens Healthineers and another separate technology
sub-license were GBP0.33 million (2018/19: GBP0.12 million). This significant
increase clearly demonstrates a gathering momentum of product roll-outs for the
new high sensitivity troponin assays supported by SMAs and we believe that
these revenues will continue to grow in the next financial years.
Our shipments of physical antibody to China continued to increase. Some sales
are made directly but the majority are made through five appointed
distributors. Regulatory approvals for domestic Chinese customers have
considerable lead times but we are now seeing additional royalty payments flow
in modest terms.
Our underlying revenues continue to be dominated by US Dollars and Euros. When
converting revenues to Sterling, in the absence of any hedging mechanisms, they
will be influenced by movements in exchange rates. Sales invoiced in foreign
currencies are recorded in Sterling at the exchange rate on the date of sale.
When Dollar and Euro monies are received, they are immediately converted into
Sterling at the exchange rate applying on the date of arrival. Any difference
in exchange rate between the date of invoice and the date of receipt is
reported in the form of an exchange rate adjustment and is recorded in the
period as a loss or gain when it is crystallised. The effect of these
adjustments during the current year has been particularly large and provided a
benefit of GBP0.20 million which has been crystalised and recognised in our
results for this year. Conversely, the weakening of the US Dollar from 30th
June 2020 to August 2020 (1.23 to 1.32) will have a negative effect, currently
estimated to be approximately GBP0.15 million on our 2020/21 results. We have no
current plans to institute any hedging mechanisms and therefore any future
changes in exchange rates, up or down will impact our reported Sterling
revenues accordingly.
Included in the cost of sales are significant expenditures on external contract
services linked to the pollution exposure project described below. This level
of expenditure will be maintained in 2020/21 reflecting continued activity with
this research project. All such research costs are charged in full in the
profit and loss account when they are incurred as there is no capitalisation of
these costs.
Through our multinational in vitro diagnostics (IVD) customers, our main
business is intrinsically linked to the diagnostic pathways that exist at
hospitals and clinics around the world. The activity within these routine
diagnostic pathways has been adversely affected by the COVID-19 pandemic as
hospital resources have been diverted to cope with the additional patient
burden created by the pandemic. Even where diagnostic capability exists, there
is evidence that concerned patients have chosen not to enter diagnostic
pathways and have not presented to healthcare professionals as would normally
be expected.
There have been reports in the market that the routine global IVD market
suffered a 15-20% reduction in activity during the period April to June 2020
(eg Siemens Healthineers Q2.2020 revenues as reported on 2 August). The
six-monthly nature of our customer royalty reporting limits our visibility but
we can see clear evidence from our physical product sales during this Q2.2020
period that corroborate such a pandemic effect.
The timing of a return to normality remains uncertain. Nevertheless, we are
confident of the robustness of our business and as circumstances change and as
healthcare pathways are re-established and normalised, Bioventix sales will
revert to an established trajectory.
Cash Flows and Dividends
The strong performance of the business during the year has generated cash
balances at the year-end of GBP8.1 million. Whilst considering the impact of the
pandemic on the core business, the Board has determined that is appropriate to
maintain the established dividend policy in the immediate future. For the
current year, the Board is pleased to announce a second interim dividend of 52
pence per share which, when added to the first interim dividend of 36 pence per
share makes a total of 88 pence per share for the current year.
Our current view is that maintaining a cash balance of approximately GBP5 million
is sufficient to facilitate operational and strategic agility both with respect
to possible corporate or technological opportunities that might arise in the
foreseeable future and to provide comfort against the ongoing impact of the
pandemic and any economic uncertainty arising from it. We have therefore
decided to distribute surplus cash that is in excess of anticipated needs and
we are pleased to announce a special dividend of 53 pence per share.
Accordingly, dividends totalling 105 pence per share will be paid in November
2020. The shares will be marked ex-dividend on 29 October 2020 and the dividend
will be paid on 13 November 2020 to shareholders on the register at close of
business on 30 October 2020.
Research and Future developments
Over the next few years, the commercial development of the new troponin assays
will have the most significant influence on Bioventix sales. There are no
antibodies in the future pipeline that are comparable to our troponin product
in clear potential value and that have the ability to influence revenues in the
next few years.
We have undertaken a range of research projects over the previous few years and
in the table below we have attempted to illustrate our current view of their
potential value and probability of success;
high Secretoneurin (
^ CardiNor) Amyloid
| (Pre-Diagnostics) MyC
(Kings) [1]
Increasing
potential medium THC (sandwich) Pollution monitoring
value Virus (contract) T4 (thyroxine) Biotin
[2] blockers
Low Thyroglobulin Cancer (contract)
(contract)
Vitamin (contract)
[3]
Low Medium high
Increasing probability of success -->
Our partners at CardiNor (Oslo) have continued in their work to try and
identify the possible utility of secretoneurin in heart failure patients and in
particular those patients who might be candidates for implantable cardiac
devices (ICDs). This work is continuing and we hope to have more definitive
news in the months to come.
Research work on amyloid beta has been on-going for four years and will
continue at Bioventix into 2021 as we work with our partners at Pre-Diagnostics
(also in Oslo) and their clinical collaborators. The goal of the project is to
identify fragments of amyloid beta in patient samples that would be helpful in
dementia diagnostics. Pre- Diagnostics have completed development on their
first amyloid fragment assay and plan to seek clinical research projects where
the assay could provide pharmaceutical companies with additional data on
amyloid biology during their clinical trials. We made a further investment in
Pre-Diagnostics of GBP0.19 million during the year.
We have now made a number of biotin "blocker" antibodies that are intended to
mitigate the interference that biotin vitamin supplements can have on certain
blood tests supplied by some IVD manufacturers. Early evaluation samples have
had mixed results at different customers. We will pursue this further during
the coming year both with existing antibodies and some new candidates.
We are particularly pleased with the progress of the pollution exposure
project. We now have a prototype ELISA kit that is entering manufacturing
development at a third party contractor. During 2021, we plan to distribute
this kit to academic researchers working in the field of pollution research. We
have also had success with a lateral flow prototype format that would be suited
to field use, perhaps linked to an optical reader or even a mobile phone app
that uses the phone camera to quantify the pollution exposure result line. This
field use format could have utility in worker biomonitoring within a health and
safety setting and we will explore this further in 2021. The creation,
manufacture and supply of final assay products is outside our normal focus of
bulk antibody sales. However, we believe that through our own efforts we can
substantiate the viability of such products and generate demand, thereby
stimulating the interest of future commercial partners.
The MyC project with King's [1] has produced interesting assays for
experimental use but these come at a time in which troponin assays are becoming
increasingly dominant in cardiac diagnostics and so MyC will not feature in the
2021 table. The contracts in the table that feature antibodies and diagnostics
for a certain virus [2] and a vitamin [3] have been technically successful.
However, these projects have been deprioritised at the customers and will also
not feature in the 2021 table.
Regarding our core SMA antibody technology, we have successfully generated
superior antibodies over the last
15 years and these antibodies are now in routine use at our customers. The
antibody technology landscape has evolved over this time-period. We are aware
that rabbit monoclonal technology - a competitive antibody technology - does
exist at some of our customers laboratories and this is likely to have resulted
in some lost opportunities for our SMA technology. In addition, the steady
development of "synthetic" antibody technology (known in the industry as
antibody "library" technology") has continued. This technology is perhaps not
so directly competitive but is useful for targets which are fragile and liable
to dissociation upon immunisation into sheep.
During 2020, we have used this library technology by contracting work at a
third party to make a "sandwich" assay format for THC/cannabis using parental
SMAs that we created many years ago. This has yielded antibody "pair"
candidates that we plan to offer to customers during 2021 who are interested in
more sensitive tests for THC/cannabis in saliva.
The Bioventix Team
We were delighted to welcome Bruce Hiscock to Bioventix in July 2020 as our
part-time Executive Finance Director. Bruce has over 30 years experience in
board roles at fast-growing listed and private companies, including as CFO and
then CEO at Protec plc, an AIM listed security and technology services
business. Most recently Bruce was CFO and CEO for everyLIFE Technologies
Limited a software developer delivering digital care planning for social care
providers. Bruce will not only add breadth and specific expertise to Bioventix
but will also bring a fresh perspective on our business and strategy.
More recently Treena Turner, non-executive finance director, has stepped down
from the Board. Treena has been a key constituent of our team for many years
and we would like to thank Treena for all that she has done for our business
and wish her well in the future.
The composition of the remainder of the Bioventix team of 12 full-time
equivalents has remained relatively stable over the year facilitating excellent
performance and know how retention.
During March, we implemented COVID-19 secure working practices and have
developed these over the year as Government guidance has evolved. The staff
have responded with dedication and flexibility such that manufacturing,
research and support/admin functions were not materially affected.
Development of the lab facilities continued during the year with the
refurbishment of the antibody technology lab. New lab furniture and lab
equipment were acquired which will assist our technology development
activities, including a significant expansion of our e.coli (bacterial)
fermentation capability. This capability is particularly well suited to the
library antibodies such as the THC sandwich candidates mentioned above. This
further underlines our long-term commitment to the Farnham facility.
Conclusion and Outlook
We are delighted to be able to report such excellent financial results for the
year despite the negative impact of the global pandemic during April-June 2020.
The core business is linked to routine testing at hospitals around the world
and this has undoubtedly been affected by the COVID-19 pandemic. The timing of
a return to normality is uncertain but when it does, we expect our business
will revert to an established trajectory, albeit without the income from
NT-proBNP which will cease from July 2021. Regardless of the pandemic effects,
we anticipate the continued roll-out of the high sensitivity troponin assays
and the royalties associated with this. Remarkable technical progress has been
made with the pollution exposure project and we anticipate that this project
and others in our pipeline will create additional shareholder value in the
period 2025 to 2035.
For further information please contact:
Bioventix plc Tel: 01252 728 001
Peter Harrison Chief Executive Officer
finnCap Ltd Tel: 020 7220 0500
Geoff Nash/Simon Hicks Corporate Finance
Alice Lane ECM
About Bioventix plc:
Bioventix (www.bioventix.com) specialises in the development and commercial
supply of high-affinity monoclonal antibodies with a primary focus on their
application in clinical diagnostics, such as in automated immunoassays used in
blood testing. The antibodies created at Bioventix are generated in sheep and
are of particular benefit where the target is present at low concentration and
where conventional monoclonal or polyclonal antibodies have failed to produce a
suitable reagent. Bioventix currently offers a portfolio of antibodies to
customers for both commercial use and R&D purposes, for the diagnosis or
monitoring of a broad range of conditions, including heart disease, cancer,
fertility, thyroid function and drug abuse. Bioventix currently supplies
antibody products and services to the majority of multinational clinical
diagnostics companies. Bioventix is based in Farnham, UK and its shares are
traded on AIM under the symbol BVXP.
The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 30 JUNE 2020
2020 2019
GBP GBP
Turnover 10,313,576 9,290,029
Cost of sales (821,823) (875,089)
Gross profit 9,491,753 8,414,940
Administrative expenses (1,416,766) (1,268,937)
Difference on foreign exchange 202,668 (99,559)
Research and development tax credit 21,817 17,906
Share option charge (115,481) (133,490)
Operating profit 8,183,991 6,930,860
Interest receivable and similar income 41,068 34,628
Profit before tax 8,225,059 6,965,488
Tax on profit (1,022,362) (1,103,825)
Profit for the financial year 7,202,697 5,861,663
Total comprehensive income for the year 7,202,697 5,861,663
Earnings per share:
2020 2019
pence pence
Basic 139.41 114.04
Diluted 137.93 112.12
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
2020 2019
GBP GBP
Fixed assets
718,496 514,821
Tangible assets
610,039 388,377
Investments
1,328,535 903,198
Current assets
245,423 239,295
Stocks
3,649,369 3,933,915
Debtors: amounts falling due
within one year
8,076,468 6,537,322
Cash at bank and in hand
11,971,260 10,710,532
(728,630) (756,573)
Creditors: amounts falling due
within one year
11,242,630 9,953,959
Net current assets
Total assets less current 12,571,165 10,857,157
liabilities
Provisions for liabilities
(50,238) (30,854)
Deferred tax
(50,238)
(30,854)
Net assets 12,520,927 10,826,303
Capital and reserves
260,392 257,134
Called up share capital
1,312,323 435,908
Share premium account
1,231 1,231
Capital redemption reserve
10,946,981 10,132,030
Profit and loss account
12,520,927 10,826,303
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30 JUNE 2020
Called up Share Capital
share premium redemption Profit and
capital account reserve loss Total
account equity
GBP GBP GBP GBP GBP
At 1 July 2019 257,134 435,908 1,231 10,132,030 10,826,303
Comprehensive income for
the year
Profit for the year - - - 7,202,697 7,202,697
Dividends: Equity capital - - - (6,503,227) (6,503,227)
Shares issued during the 3,258 876,415 - - 879,673
year
Share option charge - - - 115,481 115,481
Total transactions with 3,258 876,415 - (6,387,746) (5,508,073)
owners
At 30 June 2020 260,392 1,312,323 1,231 10,946,981 12,520,927
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30 JUNE 2019
Called up Share Capital
share premium redemption Profit and
capital account reserve loss Total
account equity
GBP GBP GBP GBP GBP
At 1 July 2018 256,934 395,108 1,231 10,357,693 11,010,966
Comprehensive income for
the year
Profit for the year - - - 5,861,663 5,861,663
Dividends: Equity capital - - - (6,220,816) (6,220,816)
Shares issued during the 200 40,800 - - 41,000
year
Share option charge - - - 133,490 133,490
Total transactions with 200 40,800 - (6,087,326) (6,046,326)
owners
At 30 June 2019 257,134 435,908 1,231 10,132,030 10,826,303
STATEMENT OF CASH FLOWS FOR THE YEARED 30 JUNE 2020
2020 2019
GBP GBP
Cash flows from operating activities
Profit for the financial year 7,202,697 5,861,663
Adjustments for:
Depreciation of tangible assets 133,569 67,499
Loss on disposal of tangible assets 2,376 -
Interest received (41,068) (34,628)
Taxation charge 1,022,362 1,103,825
(Increase)/decrease in stocks (6,128) 43,797
Decrease/(increase) in debtors 284,546 (117,124)
Increase in creditors 133,976 26,047
Corporation tax (paid) (1,164,897) (1,207,102)
Share option charge 115,481 133,490
Net cash generated from operating activities 7,682,914 5,877,467
Cash flows from investing activities
Purchase of tangible fixed assets (339,620) (84,518)
Purchase of unlisted and other investments (221,662) (96,953)
Interest received 41,068 34,628
Net cash from investing activities (520,214) (146,843)
Cash flows from financing activities
Issue of ordinary shares 879,673 41,000
Dividends paid (6,503,227) (6,220,816)
Net cash used in financing activities (5,623,554) (6,179,816)
Net increase/(decrease) in cash and cash equivalents 1,539,146 (449,192)
Cash and cash equivalents at beginning of year 6,537,322 6,986,514
Cash and cash equivalents at the end of year 8,076,468 6,537,322
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand 8,076,468 6,537,322
8,076,468 6,537,322
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 30 JUNE 2020
1. Accounting policies
1.1 Basis of preparation of financial statements
The financial statements have been prepared under the historical cost
convention unless otherwise specified within these accounting policies and in
accordance with Financial Reporting Standard 102, the Financial Reporting
Standard applicable in the UK and the Republic of Ireland and the Companies Act
2006.
The preparation of financial statements in compliance with FRS 102 requires the
use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The following principal accounting policies have been applied: 1.2 Revenue Turnover is recognised for product supplied or services rendered to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria determine when turnover will be recognised: Direct sales Direct sales are generally recognised at the date of dispatch unless contractual terms with customers state that risk and title pass on delivery of goods, in which case revenue is recognised on delivery. R&D income Subcontracted R&D income is recognised based upon the stage of completion at the year-end. Licence revenue and royalties Annual licence revenue is recognised, in full, based upon the date of the invoice, and royalties are accrued over the period to which they relate. Revenue is recognised based on the returns and notifications received from customers and in the event that subsequent adjustments are identified, they are recognised in the period in which they are identified. 1.3 Foreign currency translation Functional and presentation currency The Company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non- monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. 1.4 Interest income Interest income is recognised in the Statement of comprehensive income using the effective interest method. 1.5 Pensions Defined contribution pension plan The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds. 1.6 Current and deferred taxation The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that: · The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and · Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date. 1.7 Research and development Research and development expenditure is written off in the year in which it is incurred. 1.8 Tangible fixed assets Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful live Freehold property - 2% straight line Plant and equipment - 25% reducing balance Motor Vehicles - 25% straight line Fixtures & Fittings - 25% reducing balance Equipment - 25% straight line 1.9 Valuation of investments Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment. 1.10 Stocks Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads. At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss. 1.11 Debtors Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment. 1.12 Cash and cash equivalents Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management. 1.13 Creditors Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. 1.14 Provisions for liabilities Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. Provisions are charged as an expense to the Statement of comprehensive income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of financial position. 1.15 Financial instruments The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. 1.16 Dividends Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. 1.17 Employee benefits-share-based compensation The company operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each balance sheet date, the company will revise its estimates of the number of options are expected to be exercisable. It will recognise the impact of the revision of original estimates, if any, in the profit and loss account, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. 2. Judgments in applying accounting policies and key sources of estimation uncertainty In the application of the company's accounting policies (as described in note 1), management is required to make judgments, estimates and assumptions. These estimates and underlying assumptions and are reviewed on an ongoing basis. There were no areas requiring significant management judgment during the year ended 30 June 2020.
3. Turnover
An analysis of turnover by class of business is as follows:
2020 2019
GBP GBP
Product revenue and R&D income 4,048,847 3,010,496
Royalty and licence fee income 6,264,729 6,279,533
10,313,576 9,290,029
2020 2019
GBP GBP
United Kingdom 832,895 468,692
Other EU 1,206,854 1,759,224
Rest of the world 8,273,827 7,062,113
10,313,576 9,290,029
4. Operating profit
The operating profit is stated after charging:
2020 2019
GBP GBP
Depreciation of tangible fixed assets 133,569 67,499
Fees payable to the Company's auditor and its associates
for the audit of the Company's annual financial statements 10,650 10,350
Exchange differences (202,668) 99,559
Research and development costs 1,175,602 1,116,210
5. Taxation
2020 2019
GBP GBP
Corporation tax
1,002,978 1,099,196
Current tax on profits for the year
1,002,978 1,099,196
Total current tax 1,002,978 1,099,196
Deferred tax
19,384 4,629
Origination and reversal of timing differences
Total deferred tax 19,384 4,629
Taxation on profit on ordinary activities 1,022,362 1,103,825
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2019 - lower than) the standard
rate of corporation tax in the
UK of 19% (2019 - 19%). The differences are explained below:
2020 2019
GBP GBP
Profit on ordinary activities before tax 8,225,059 6,965,488
Profit on ordinary activities multiplied by standard rate
of corporation tax in the UK of 19% (2019 - 19%) 1,562,761 1,323,443
Effects of:
Expenses not deductible for tax purposes, other than
goodwill amortisation and impairment
559 403
Capital allowances for year in excess of depreciation (21,325) (3,390)
Research and development tax credit (246,383) (238,848)
Share based payments (292,634) 17,588
Other differences leading to an increase in the tax charge 19,384 4,629
Total tax charge for the year 1,022,362 1,103,825
Factors that may affect future tax charges
There were no material factors that may affect future tax
charges.
6.
Dividends
2020 2019
GBP GBP
Dividends paid 6,503,227 6,220,816
6,503,227 6,220,816
7. Share capital
2020 2019
GBP GBP
Allotted, called up and fully paid
5,207,835 (2019 - 5,142,674) Ordinary shares of GBP0.05 each 260,392 257,134
The holders of ordinary shares are entitled to receive dividends as declared
and are entitled to one vote per share at meetings of the Company. All ordinary
shares rank equally with regard to the Company's residual assets.
8. Share based payments
During the year the company operated 2 share option schemes; an Approved EMI
Share Option Scheme and an Unapproved Share Option Scheme to incentivise
employees.
The company has applied the requirements of FRS 102 Section 26 Share-based
Payment to all the options granted under both schemes. The terms for granting
share options under both schemes are the same and provide for an option price
equal to the market value of the Company's shares on the date of the grant and
for the Approved EMI Share Option Scheme this price is subsequently agreed with
HMRC Shares and Assets Valuation Division.
The contractual life of an option under both schemes is 10 years from the date
of grant. Options granted become exercisable on the third anniversary of the
date of grant. Exercise of an option is normally subject to continued
employment, but there are also considerations for good leavers. All share based
remuneration is settled in equity shares.
Weighted Number Weighted Number
average 2020 average 2019
exercise exercise
price price
(pence) (pence)
2020 2019
Outstanding at the beginning of the 1350 85,938 1340 89,938
year
Granted during the year 3153 50,401 -
Forfeited during the year 1350 (14,075) -
Exercised during the year 1350 (66,659) 1025 (4,000)
Outstanding and exercisable at the end
of the year 2985 55,605 1350 85,938
2020 2019
Option pricing model used Black Scholes Black Scholes
Issue price GBP13.50 - GBP GBP3.12 - GBP
38.55 13.50
Exercise price (pence) GBP13.50 GBP3.12 - GBP
13.50
Option life 10 years 10 years
Expected volatility 25.15% 25.15%
Fair value at measurement date GBP4.66 - GBP GBP1.72 - GBP4.66
26.91
Risk-free interest rate 0.18% 1.02%
Expected volatility was based on past volatility since the shares have been
listed on AIM.
The expense recognised for share-based payments during the year ended 30 June
2020 was GBP115,481 (2019: GBP133,490).
The number of staff and officers holding share options at 30 June 2020 was 17
(2019: 15). The share options have been issued to underpin staff service
conditions.
9. Publication of Non-Statutory Accounts
The financial information set out in this preliminary announcement does not
constitute the Group's financial statements for the year ended 30 June 2020.
The financial statements for the year ended 30 June 2019 have been delivered to
the Registrar of Companies. The financial statements for the year ended 30 June
2020 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting. The auditors' report on both accounts was unqualified,
did not include references to any matters to which the auditors drew attention
by way of emphasis without qualifying their report and did not contain
statements under sections 498(2) or (3) of the Companies Act 2006. The audited
financial statements of Bioventix plc for the period ended 30 June 2020 are
expected to be posted to shareholders shortly, will be available to the public
at the Company's registered office, 7 Romans Business Park, East Street,
Farnham, Surrey, GU9 7SX and available to view on the Company's website at
www.bioventix.com once posted.
END
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