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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Celadon Pharmaceuticals Plc | LSE:CEL | London | Ordinary Share | GB00BDQYGP38 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.50 | 2.52% | 61.00 | 57.00 | 65.00 | 61.00 | 59.50 | 59.50 | 12,246 | 14:00:11 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investment Advice | 149k | -7.14M | -0.1082 | -5.64 | 39.26M |
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RNS No 2739f
CELSIS INTERNATIONAL PLC
12th May 1998
CELSIS INTERNATIONAL PLC
Preliminary Results for the Year Ended 31st March, 1998
HIGHLIGHTS
* Revenues increased by 46% to #16.2 million (1997: #11.1
million)
* Loss before taxation and exceptional costs reduced by 91% to #0.4 million
(1997: #4.1 million)
* Profit before exceptional costs and taxation of #0.5 million in the second
half (second half of 1997: loss of #1.4 million)
* Healthy balance sheet position at 31st March 1998 with #3.6 million in
cash and marketable securities
* Record year for instruments sold, with revenue of #4.0 million (1997: #3.3
million) and tests sold, with revenue of #5.6 million (1997:#2.7 million)
* Acquisition and successful integration of Scientific Associates Inc. ("SAI")
as a part of the Celsis Laboratory Group ("CLG") expansion strategy
* Strong progress in product development with "SUREwipe" ready for test market
evaluation six months ahead of schedule
* Global distribution for systemSURE(TM) established with Becton
Dickinson
Commenting on the results for the year, Jack Rowell, Chief
Executive, said:
"Celsis has had another year of considerable achievement during
which we have sold a record number of instruments and tests.
Our range of products and services and our commitment to
servicing the needs of customers have clearly established
Celsis as the leading supplier of rapid methods testing in what
is the fastest growing segment of industrial microbiology.
"The strength of sterling, the currency crisis in Asia and the
decision not to conclude a licence for our deviceless hygiene
monitor, SUREwipe, meant that the group fell just short of
achieving a profit for the year as a whole. Nevertheless, the
fundamental business strategy is unaffected and the profit
achieved in the second half of the year represents a
significant milestone. I remain confident and optimistic about
the prospects for future growth from the solid base established
over the past year."
Enquiries:
Celsis International plc Mark Harris, Financial Director
+44 (0)1223 426-008
Brunswick James Garthwaite / Katharine Sharkey
+44 (0)171 404-5959
FINANCIAL REVIEW
Turnover for the year to 31st March 1998 increased by 46% to
#16.2 million (1997: #11.1 million), although the translation
effect of the continued strengthening of sterling is estimated
to have reduced turnover by approximately #0.6 million. The
purchase of Scientific Associates Inc. ("SAI") in October 1997
added #1.6 million to turnover for the year, giving underlying
organic growth in the business of 31%.
The full year effect of the operating efficiencies achieved
last year through the integration of manufacturing at a single
site in Landgraaf, Holland, has contributed to the significant
improvement in gross margins. Gross profit was #10.1 million,
up 67% (1997: #6.0 million), with an improved gross margin of
63% (1997: 54%).
Sales and administrative expenses increased by 12% to #8.5
million (1997: #7.6 million) despite an increase in headcount
with the acquisition of SAI from 200 employees in March 1997 to
260 employees in March 1998, reflecting tight financial control
over expenses. The cost savings arising from the
reorganisation following the Lumac acquisition in 1996 also fed
through this year, such that the underlying change in selling
and administration expenses, after adjusting for the full year
effects of the Lumac and SAI acquisitions, is a reduction of
7%. The Company is committed to continued improvements in its
operational efficiency and, post year-end, has reduced costs
further through the integration of SAI and by implementing a
management re-organisation.
Whilst maintaining a strong pipeline of new products,
expenditure on research and development was #2.3 million (1997:
#2.8 million) reflecting completion of the development of
systemSURE(TM) in 1997 and the lower development costs associated
with SUREwipe which does not involve an instrument.
The combined effect of increased revenues, improved gross
margins, greater manufacturing efficiencies and cost
containment programmes resulted in a 91% reduction in the loss
before exceptional costs and taxation to #0.4 million (1997:
#4.1 million). The Company believes that it would have
reported a profit for the full year had it not been for the
translation effect of the strength of sterling and the loss of
sales due to the currency crisis in Asia. Similarly, the
Company would also have reported a full year profit had it
proceeded with a licence for SUREwipe, its new deviceless
hygiene monitoring test. The decision not to conclude such a
licence was because the Company believes that the terms on
offer did not fairly reflect the long term potential of the
product and that prospects for stronger and more commercially
attractive distribution arrangements should present themselves
once the test market data and feed-back is available.
The Company incurred exceptional costs of #0.5 million during
the year. Costs of #0.3 million were incurred to integrate the
operations of SAI with those of the rest of the CLG group and
an additional #0.2 million of costs for business development
activities were written off. Despite these costs, the net loss
for the year was reduced by 83% to #0.9 million (1997: #5.6
million). The loss per share was similarly reduced by 85% to
0.97p (1997: 6.54p).
The balance sheet position remains healthy, with cash and
marketable securities at 31st March 1998 of #3.6 million (1997:
#5.4 million). The Company believes that this provides it with
sufficient resources to finance its activities going forward
without the need to raise additional funds for working capital
purposes.
REVIEW OF OPERATIONS
Screening (Quality Control) (sales: 189 instruments for #2.9
million; 6.4 million tests for #4.6 million)
Sales of Celsis' range of rapid screening instruments and test
kits for detecting microbial contamination in food and beverage
products, toiletries, cosmetics, water and pharmaceutical
products rose to record levels. The installed base of
instruments increased by 9% to 2,388 (1997: 2,199), with
considerably more high end units being placed. In addition,
6.4 million tests were sold (1997: 2.9 million), a 121%
increase.
This performance affirms the growing acceptance of the
financial and operational benefits of rapid methods testing.
In certain markets, such as the dairy sector in the UK, Germany
and the Benelux countries, general acceptance of rapid methods
has already reached a very high level. It is in these markets
that the Company's products have achieved the greatest success
and where the Company holds a leadership position, with market
shares in excess of 70%. Acceptance in the US dairy market is
also growing rapidly and Celsis' expertise in this sector,
combined with the launch of the Celsis Advance(TM) in early 1997
resulted in sales to the US screening market recording the
strongest growth of 67%.
Celsis has also achieved success in a number of new markets,
including parts of Latin America, South Africa and Scandinavia
and continued penetration of these markets provides the
potential for future growth. It is clear, however, that new
territories and market segments are relatively conservative.
Accordingly, the pace of adoption is somewhat slower than the
Company had originally anticipated. To counter this, the
Company will continue to focus its sales and marketing efforts
on educating potential customers that not only do rapid methods
provide financial and operational advantages, they are also
more accurate than conventional testing.
The alliance with Millipore to access the pharmaceutical sector
continues to progress and the MicroCount(TM) digital platform is
gaining increasing acceptance, despite this being the most
regulated market sector for the Company's products.. As a
result, sales in the year were down on the previous year by
#0.3 million, when initial stocking orders to Millipore were
placed. Despite this, there are a number of significant
prospects in hand for the current year and stronger progress is
anticipated.
Celsis Laboratory Group (sales: #4.2 million)
Significant progress has been made by CLG during the year, with
turnover increasing by 71% to #4.2 million. The acquisition of
SAI in October 1997 boosted the scale of operations and on a
full year basis, CLG's service revenues are expected to account
for approximately one third of the total group turnover.
The effectiveness of the New Jersey operations was considerably
improved during the year as the activities were consolidated
into one facility in the second half of the year. Although
this caused a certain amount of disruption, the new site
provides a more efficient operating environment, significant
scope for expansion and the ability to undertake services which
previously were not possible.
SAI is a well-established contract service laboratory based in
St Louis, Missouri, whose success and reputation has been built
upon its commitment to quality and customer service. Many of
its operating and quality control procedures and practices have
been adopted as the CLG standard and joint market development
initiatives launched. Various functions have also been
integrated across CLG and the addition of SAI significantly
improved the strength of the management leadership for this
business activity. Through more aggressive and unified
marketing strategies, the "CLG" brand name is rapidly becoming
recognised as the market leader for providing responsive, high
quality services to its customers in the pharmaceutical,
personal care products and medical markets.
Hygiene Monitoring (Quality Assurance) (sales: 526 instruments
for #1.1 million; 1.1 million tests for #1.2 million)
The Company's award winning systemSURE(TM) continues to be
recognised for its superior quality, sensitivity and design,
making it a clear market leader, and it has recently been
accepted as one of the Department of Trade and Industry's
Millennium Products. During the year, exclusive rights to
distribute systemSURE(TM) world-wide were awarded to Celsis' US
alliance partner, Becton Dickinson. Although this is expected
to provide a more effective and efficient route to market long
term, implementing this change half way through the year
inevitably led to a loss of business and momentum, particularly
in Europe.
Although general competition and the change of distribution
arrangements combined to make this a difficult year, the
progress which has been achieved in hygiene monitoring is all
the more creditable, with an increased numbers of instruments
placed and tests sold. The launch of Swabmate, an integrated
swabbing device, during the year will provide a further
marketing advantage and should help sales future growth. In
addition, strong growth in hygiene monitoring is expected with
the introduction of SUREwipe planned for the first quarter of
1999.
REVIEW OF RESEARCH & DEVELOPMENT
During the year, a number of new products were introduced to
the market. Following the success of the Celsis Advance(TM), a
smaller version called the Celsis Advance(TM) coupe has been
launched to meet the needs of lower volume customers. Although
this product was only launched towards the end of the year the
initial response has been very encouraging.
The Company has also developed a 24 hour test for predicting
shelf life in pasteurised milk. This unique product has been
independently validated by Silliker Laboratories and has been
launched, initially in the US market. As pasteurised milk
accounts for over 80% of total milk production in most
developed countries, this test has significant potential.
The Celsis Connect Programme, a collaborative research
initiative with a significant number of major corporations,
which has financial support from the Department of Trade and
Industry, is now in its final year. This programme has
pioneered the development of a patented technique to convert a
bioluminescent reaction into a visible colour change. This
technique provides the platform for the first deviceless
hygiene monitor, SUREwipe. Strong interest in this product has
already been shown and Celsis is about to enter a test market
evaluation phase with five leading food service and production
companies in the UK and the US. Commercial launch is
programmed for early 1999 and will focus initially on food
production, food service and consumer applications.
The Celsis Connect Programme has also resulted in solid
progress towards development of a test which can provide
detection of microbial contamination within single shift
working hours. This test is based upon the use of adenylate
kinase as a part of the detection system under technology which
has been exclusively licensed from the Ministry of Defence's
Defence Establishment Research Agency ("DERA").
PROSPECTS
1997/98 was a year of considerable achievement for the group.
Strong sales growth, manufacturing efficiencies and cost
containment resulted in a profit for the second half of the
year and only a small loss for the year as a whole. The Group
has achieved good penetration in key markets world-wide which
provide a solid platform on which to build going forward.
Although the rate of acceptance in certain sectors and new
markets is slower than had been anticipated there is clear
evidence from the more mature dairy markets that a high level
of acceptance is achievable and that Celsis is able to obtain a
commanding position in those markets. There is every reason to
believe that a similar pattern will emerge in more recently
targeted markets. The introduction of significant new
products, such as the Celsis Advance(TM) coupe, the 24 hour shelf
life predictor test and the SUREwipe hygiene monitoring test,
should also keep the Company at the forefront of technological
innovation in the industry.
The successful integration of SAI into CLG has greatly
strengthened this operation. The growing acceptance of the
quality performance and service standards offered by the CLG
organisation will help to improve the CLG's profitability in
its own right as well as providing greater acceptance of the
"Celsis" brand as the leading provider of value added products
and services for microbial risk management.
With the progress made over the last year, the successful
integration and stream-lining of the various business
activities in the group, the Company is confident of achieving
sustained growth in revenues and in earnings in the year ahead.
Jack Rowell Mark Harris
Chief Executive Financial Director
Unaudited Consolidated Profit and Loss Account
for the year ended 31 March 1998
Pre-
except Except Total
-ional -ional
costs costs 1998 1997
#'000 #'000 #'000 #'000
------ ---- ----- ------
-
Turnover
Continuing operations 14,552 - 14,552 11,123
Acquisitions 1,623 - 1,623 -
------- ----- ------ -------
Total turnover 16,175 - 16,175 11,123
Cost of sales (6,065) - (6,065) (5,086)
Gross profit 10,110 - 10,110 6,037
Sales & marketing expenses (6,603) - (6,603) (6,126)
General & administrative
expenses (1,848) - (1,848) (1,460)
Research & development
expenditure (2,252) - (2,252) (2,798)
Exceptional costs - (484) (484) (1,435)
Continuing operations (770) (484) (1,254) (5,782)
Acquisitions 177 - 177 -
-------- ----- ------- -------
Total operating loss (593) (484) (1,077) (5,782)
Interest receivable & similar
income 240 - 240 409
Interest payable (20) - (20) (149)
------- ----- ------ -------
Loss on ordinary activities
before taxation (373) (484) (857) (5,522)
======= ===== ====== =======
Tax on loss on ordinary
activities (77) (65)
------- -------
Retained loss for the year (934) (5,587)
====== =======
Loss per Ordinary Share
(Note 1)
Before exceptional costs 0.47p 4.86p
Exceptional costs 0.50p 1.68p
------ -------
Loss per Ordinary Share 0.97p 6.54p
====== =======
Statement of total recognised
losses
Loss for the financial year (934) (5,587)
Currency translation differences
on foreign currency net
investments (462) (506)
------- -------
Total losses recognised since
last annual report (1,396) (6,093)
======= =======
Unaudited Consolidated Balance Sheets
at 31 March
1998 1997
#'000 #'000
----- ------
Fixed assets
Intangible assets 444 -
Tangible assets 4,019 2,609
Investments 75 119
------- ------
4,538 2,728
Current assets
Stocks 1,950 1,740
Investments 2,415 4,369
Debtors 5,080 4,088
Cash at bank and in hand 1,213 1,058
------- -------
10,658 11,255
Creditors: amounts falling due within one year (3,200) (3,048)
------- -------
Net current assets 7,458 8,207
Total assets less current liabilities 11,996 10,935
Creditors: amounts falling due after more than
one year (496) (86)
------- -------
Net assets 11,500 10,849
======= =======
Capital and reserves
Called up share capital 996 940
Shares to issue 23 -
Share premium account 42,060 38,158
Profit and loss account (Note 4) (32,620) (29,290)
Reserve arising on consolidation 1,041 1,041
-------- --------
Equity shareholders' funds 11,500 10,849
======== ========
Unaudited Cashflow Statement
for the year ended 31 March 1998
1998 1997
#'000 #'000
------- --------
Net cash outflow from continuing
operating activities (Note 2) (1,368) (5,502)
------- --------
Returns on investments and servicing
of finance
Interest received from investments 206 727
Interest paid (20) (149)
------- --------
186 578
Taxation ------- --------
UK corporation tax paid (9) -
Overseas corporation tax paid (92) (315)
------- --------
(101) (315)
------- --------
Capital expenditure and financial investment
Proceeds from shares distributed by Employee
Share Ownership Trust - 65
Purchase of tangible fixed assets (1,323) (897)
Sale of tangible fixed assets 81 220
Purchase of intangible fixed assets (450) -
------- --------
(1,692) (612)
Acquisitions ------- --------
Purchase of subsidiaries (2,885) (10,776)
Deferred consideration and expenses in respect
of prior year acquisitions (18) (1,248)
Net cash acquired with subsidiaries 86 1,152
------- ---------
(2,817) (10,872)
------- ---------
Cash outflow before management of liquid
resources and financing (5,792) (16,723)
------- --------
Management of liquid resources
Sale of current asset investments 1,954 3,923
------- --------
Financing
Issue of shares 4,006 14,319
Incidental costs of share issues (79) (736)
New finance leases 114 -
Repayment of principal under finance leases (10) (1)
------ --------
4,031 13,582
------ --------
Increase in cash in the year (Notes 2 and 3) 193 782
======= =========
Notes to the Accounts (Unaudited)
for the year ended 31 March 1998
1998 1997
---- -----
1 Loss per Ordinary Share
Loss on ordinary activities after
taxation (#'000) 934 5,587
Average number of Ordinary Shares in
issue (x 1,000) 96,661 85,393
Loss per Ordinary Share 0.97p 6.54p
======= =======
2 Net cash outflow from continuing 1998 1997
operating activities
#'000 #'000
------- -------
Operating loss (1,077) (5,782)
Depreciation of tangible fixed assets 898 948
Amortisation of intangible fixed assets 6 -
Distribution of shares by Employee Share
Ownership Trust 24 56
Provision for reduction in valuation of
shares held by 20 -
Trustee of Share Ownership Trust
(Profit) on disposal of tangible fixed assets (12) (2)
(Increase) in debtors (787) (549)
(Increase)/decrease in stocks (380) 121
(Decrease) in trade creditors (77) (145)
Increase in other taxation and social security 85 43
(Decrease) in accruals and deferred income (17) (34)
(Decrease) in other creditors (51) (158)
------- --------
Net cash outflow from continuing operating
activities (1,368) (5,502)
========== ========
The net cash outflow from continuing operating activities includes an
outflow of #252,000 (1997: #1,435,000) which relates to exceptional
reorganisation costs and an outflow of #232,000 which relates to
exceptional business development costs.
Reconciliation of net cash flow
to movement in net funds
1998 1997
#'000 #'000
--------- --------
Increase in cash in the
year 193 782
Cashflow from sale of
current asset
investments (1,954) (3,923)
New finance leases (145) -
New loans (390) -
Repayment of finance
lease obligations 10 1
------ --------
Movement in net funds in
the year (2,286) (3,140)
Exchange adjustment (38) (167)
Net funds at beginning
of the year 5,419 8,726
------ --------
Net funds at end of the
year 3,095 5,419
====== ========
3 Analysis of net funds
Other
non- Excha-
cash nge
At 1 Cashfl- chang- differ- At 31
Apr ow es ences Mar
#'000 #'000 #'000 #'000 #'000
Year ended 31
March 1998:
Cash at bank
and in hand 1,058 193 - (38) 1,213
Current asset
investments 4,369 (1,954) - - 2,415
Cash resources 5,427 (1,761) - (38) 3,628
Loans - - (404) 14 (390)
Finance leases (8) (114) (24) 3 (143)
----- ------- ----- ----- -----
Net funds 5,419 (1,875) (428) (21) 3,095
===== ====== ===== ===== =====
Year ended 31
March 1997:
Cash at bank
and in hand 443 782 - (167) 1,058
Current asset
investments 8,292 (3,923) - - 4,369
Cash resources 8,735 (3,141) - (167) 5,427
Finance leases (9) 1 - - (8)
----- ------ ----- ----- -----
Net funds 8,726 (3,140) - (167) 5,419
===== ====== ===== ====== =====
4 Profit and loss account 1998 1997
#'000 #'000
-------- --------
Retained loss brought forward (29,290) (15,185)
Retained loss for the year (934) (5,587)
Goodwill written off (1,934) (8,012)
Exchange difference (462) (506)
-------- --------
Retained loss carried forward (32,620) (29,290)
======== ========
5 Preparation of preliminary statement
The foregoing financial information, which has been prepared on
the basis of the accounting policies set out in Celsis
International plc's accounts for the year to 31 March 1997, does
not amount to full accounts within the meaning of section 240 of
the Companies Act 1985 (as amended).
The abridged comparative figures for the year to 31 March 1997
are from the accounts of Celsis International plc for the year
ended 31 March 1997. These accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies.
The report of the auditors was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985
6 Dividend
The Directors have not declared a final dividend.
7 Annual Report and Accounts
Copies of the Annual Report and Accounts will be sent to holders
of Celsis International plc's Ordinary Shares. Copies of this
announcement and of the Annual Report and Accounts will be made
available to the public at Celsis International plc's offices at
Cambridge Science Park, Milton Road, Cambridge, CB4 4FX.
END
FR SFMESFUAUFII
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