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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 Number:6783E
Celsis International PLC
5 June 2001
Embargo: 7.00am, 5 June 2001
CELSIS INTERNATIONAL PLC
Preliminary Results For The Year Ended To 31 March 2001
A challenging year but new management team in place and delivering turnaround.
Action plan in progress to grow profits and realise growth potential.
Highlights:
* Operating Profit before Tax, Interest and Exceptionals of #1.9 million
(restated 2000: #0.6 million)
* Revenues increased by 6% to #17.5 million (restated 2000: #16.5 million)
* Profit Before Tax of #0.9 million (restated 2000: #0.6 million)
* Gross margin improvement to 67% (restated 2000: 63%)
* Products business recovers to #9.2 million (restated 2000: #9.2 million)
after first half under-performance (#3.9 million), with profit of #1.0
million (restated 2000: breakeven)
* Celsis Laboratory Group profits up 50% to #0.9 million (2000: #0.6
million), revenue up 13.6% to #8.3 million (2000: #7.3 million)
* Completed acquisition of European dairy competitor and consolidated
European dairy position
* New global sales policy introduced with focus on driving consumables
sales
* Restructured business to emphasise importance of account management
* Restated accounts to reflect nature of business
Commenting on the results, Jay Le Coque, Chief Executive said:
"After a difficult start to the year, the new management team has taken a
number of decisive steps to turn around our business, including a fundamental
restructuring of the products division. As a result, Celsis is today in a
stronger position to capitalise on its leading market position to deliver
future sustainable growth, organically and, as appropriate, through selective
acquisitions."
Enquiries:
Celsis Jay Le Coque, Chief Today: +44 (0) 207 404 5959
International plc Executive Thereafter +44 (0) 1223 426008
Christian Madrolle,
Finance Director
Peter Grant, Business
Development Director
Jenny Parsons, Corporate
Communications
Brunswick Group Melissa Miller/Christina +44 (0) 207 404 5959
Limited Freyberg
Overview
The year to March 2001 has been a significant year for Celsis with the
introduction of a new management team. Since their appointment six months
ago, they have initiated a number of fundamental changes to the business. The
key challenge was to focus on the weak European performance, particularly in
the dairy sector. As a result, European sales and marketing organisations
have been restructured. The reorganisation culminated in the acquisition of
ConCell, a key competitor in the European region. In turn, the new structure
has already resulted in a dramatic increase in sales and is anticipated to
deliver improved performance for shareholders going forward.
Management
In November 2000, the Board of Celsis introduced a new management team headed
by Chief Executive, Jay LeCoque, who was previously general manager of the
fast growing North and South America regions. He is supported by Christian
Madrolle, an experienced Finance Director, who comes to Celsis with strong
hands-on experience in international business expansion and financial
operations in the biotechnology sector, and Dr Peter Grant, Director of
Technology and Business Development, who was one of the original founders of
Celsis and continues to bring new technologies and opportunities into Celsis'
view.
Financial Results
Turnover for the year to 31st March 2001 increased by 6% to #17.5 million
(restated 2000: #16.5 million). Performance in the Products business
recovered strongly during the second half (#5.3 million), having suffered from
a substantial decline during the first half (#3.9 million). Total Products
business revenues were #9.2 million (restated 2000: #9.2 million). Revenue
from the Celsis Laboratory Group grew 13.6% to #8.3 million (restated 2000:
#7.3 million). Gross profit for the Group was up 12.5% to #11.7 million (re-
stated 2000: #10.4 million), with an improvement in gross margin to 67%
(restated 2000: 63%).
Operating and Administration Costs were #9.0 million, an increase on the prior
year (#8.4 million) but they include a new accrual for bad debt of #0.15
million on the remaining accounts receivable after restatement of previous
years' results. We expect operating and administrative costs to be
significantly reduced by the restructuring plan that will impact fully in the
2001-02 year.
Expenditure on Research and Development was #0.8 million, compared to #1.4
million last year. Following the successful acquisition of ConCell, the
Celsis product range was expanded, compensating for the reduced spend in
Research and Development this year. R & D expenditure remains a priority for
the company, with concentration on product improvements, line extensions and
delivery of specific new products with substantial revenue potential.
Net operating cash flow, excluding investment in acquisitions, and exceptional
items, improved by #1.6 million compared with the previous year. Further
improvement should be achieved with our new revenue recognition policy and the
strengthening of our cash collection procedures. The Group's bank balances
improved to #1.6 million, up #1.0 million on last year.
Global Sales Strategy & Revenue Recognition Policy
Following a comprehensive review of Celsis' operating systems upon arrival of
the new management team, a new global sales policy has been adopted.
Historically the company strategy has been to focus on the placement of
instruments (using the 'razor' as an analogy) with the intent that the sale of
reagents (the 'razor blades') would follow. This strategy enables significant
progress and Celsis now has a reasonably large installed base.
However, it became evident that some of the instruments placed were not
burning reagents, particularly in the poorly performing European division, for
several reasons including 1) over-commitment by the customer to implement
within a Celsis time frame; 2) competition placing instruments free of charge;
and 3) changes in customers and/or Celsis personnel. Whilst pursuit of these
accounts remains an option, it is not the most practical solution. Equally,
Celsis customer management has to be more systematic in following up each
instrument placed with a schedule for implementation. This situation has been
rectified by the reorganisation into the four global operating units and
restructure of the entire European unit in particular with sales management
changed as necessary to impose the customer driven culture now required
In addition, the company has adopted a new sales strategy that has
necessitated a change in policy on revenue recognition for the products
business. The selling cycle of any new technical product is typically
lengthy. Celsis' revenue recognition policy previously had been to recognise
a sale on dispatch of the instrument. The new policy now only recognises a
sale upon receipt of a written commitment by the customer to implement Celsis
technology at the dispatching stage. If these agreements are not in place at
the time of dispatch, revenue will not be recognised. Management believes
these changes are not only prudent but are strategically aligned with changes
within the business.
This new policy has been adhered to for the whole of the 2000-01 year.
However, it requires Celsis to re-state comparative historical financial
information. The new revenue recognition policy reflects the reality of
Celsis' operations in the marketplace and that of its customers.
Following a commitment to review the high level of receivables, the company
has seen a dramatic improvement in its overall receivables position. As a
result, the company has realised a stronger balance sheet from which to
continue developing and growing the business.
Operations
Products Division
Following a disappointing performance by the European group in the first
half, Celsis has restructured its products division into four regional
profit centres. Each division is headed by a profit centre manager, who
reports directly to the Chief Executive. This means that for the first
time, there is unified approach to sales and marketing on a global basis and
with it a more focused customer facing activity with less cost. This will
allow respective sales and technical support groups to be more proactive in
insuring the continued adoption of Celsis' technology in each region. The
new structure has already yielded positive results, with sales in each
region increasing significantly in the fourth quarter.
In addition, the Head of the Global Corporate Account Management (GCAM)
programme now reports directly to the Chief Executive. This programme
promises to produce accelerated results through strong partnerships and key
customers being recruited all over the world. The GCAM programme has yielded
important results, with plans to develop further the products business
together with services to meet the continuing need for microbial testing.
Celsis has taken significant steps to consolidate its position in the dairy
sector through the acquisition of ConCell, a company operating out of
Germany and the Netherlands. This acquisition has accomplished two things
for the company. First, it takes a competitor out of the European dairy
sector, which has been hard hit this past year, and second, it provides
Celsis with a higher performance, yet lower cost instrumentation platform
and reagent technology that will soon be leveraged across the world in the
increasingly price sensitive dairy sector. ConCell's microplate-based
instrumentation platform is complementary to that offered by Celsis and will
be introduced into Celsis' existing regions.
Manufacturing capabilities have been restructured to better enable Celsis to
capitalise on growing market segments, with all instrument manufacturing out
sourced and loss making instruments and kits eliminated. This has resulted
in a significant downsizing of personnel in the Landgraaf facility, which is
always difficult, but has enabled Celsis to begin integrating ConCell
product lines and improve margins.
The products business has recovered to produce #9.2 million (restated 2000:
#9.2 million) after experiencing a difficult first half (#3.9 million).
The company is seeing a turnaround for this year in Europe and Asia
following the restructure and acquisition of ConCell. The acquisition of
ConCell and the subsequent increase in sales predicted for this year
contributes to Celsis' consolidation of the dairy UHT market. The
introduction of a new kit in the Americas has improved the company's sales
and customer base, supplying thirteen of the top 20 dairy producers in the
world with Celsis technology.
The personal care market continues to progress with Celsis technology now
being used by eight of the top 14 of the top 20 global personal care
products companies. The company's focus within the personal care sector is
now twofold. Celsis will continue to leverage this position through its
GCAM programme, which aims to further expand the number of manufacturing
sites that can benefit from Celsis technology within the growing customer
base. A global account management programme has been initiated
simultaneously to help each of these sites expand the number of products
lines that use of Celsis technology.
Steady progress has been made within the pharmaceutical market, spearheaded
by GCAM. This year has seen a significant increase in the adoption of
Celsis technology by the pharmaceutical industry. With just thirteen of the
top 20 companies using Celsis technology, there is room to grow this segment
both in the number of customers and the number of manufacturing sites per
customer.
Lastly, the hygiene monitoring business is now included within the Products
division and is operated by a distributor network.
Celsis Laboratory Group
Celsis Laboratory Group (CLG) financial statements are unaffected by the
change in our revenue recognition policy. CLG surpassed budget in both
revenues and profits. Revenues increased by #13.6 to #8.3 million (2000:
#7.3 million) with profits before tax up 50% to #0.9 million (2000: #0.6
million). This year growth was particularly strong in the chemistry area,
which showed an increase of 25% in revenue over the prior fiscal year.
Outsourcing of laboratory services in both the pharmaceutical and personal
care sectors continues to grow both in the US and European sectors and CLG
is well placed to take advantage of this. CLG is determined to continue
growth via its positioning as a high margin niche contract laboratory
services business. Customers range from the Fortune 50 to start ups, each
requiring their products to be analysed to the highest quality standard.
This has been a landmark year for the CLG business. Following a management
change last year, the new team under the leadership of Tony Grilli has
completed a substantial re-engineering of the business. Management
procedures, a re-organisation of core skills and an emphasis on customer
focus and service has seen the group turn in record profits. The potential
to expand its services at the Edison site allows CLG to be well positioned
to take advantage of its increasingly productive marketing programmes.
Review of Research and Development
The strategy within R&D has remained unchanged with a spend of #0.8 million
(2000: #1.4 million). The R&D team continues to support the existing product
lines having launched an improved kit for the detection of microbes in UHT
products. This kit was first implemented in the Americas and will be
introduced in Europe in the 2001/02 fiscal year. The acquisition of ConCell
has meant that some R&D projects have been terminated in favour of the
instrumentation platform and reagents provided by ConCell.
Further Research and Development is planned for the new year with projects
prioritised on a commercial basis in line with company strategy.
Strategy and Prospects
After an eventful first half, the product business is now stable and growing
and the global adoption of Celsis technology is accelerating. New markets and
new applications have been identified within the existing industry base.
Moreover, restructuring the European and Asian group operations, together with
the acquisition of ConCell have already seen an acceleration of growth rates
in sales and profits that are similar to the growth experienced in North and
South America over the past few years.
The company's technological base is well understood and accepted by personal
care products companies, pharmaceutical companies and leading dairy and food
companies throughout the world. The quiet capture of so many global blue chip
customers provides an indication of the growing value of Celsis technology to
industry worldwide. The focus will be to capitalise on this investment of
resource over the last few years and begin to realise the large amount of
reagent utilization that is capable from each one of these placements. Celsis
will continue to commercialise this potential both for shareholders and
customers and anticipates years of steady growth in the future.
Celsis has moved into the new financial year, therefore with robust
operations. The company operates in markets that are growing as the
requirement for product quality assurance based on testing intensifies. This
together with its highly relevant rapid testing products and services will
allow Celsis to expand its strong market position not least in the newly
structured European and Asian regions. Profit improvements based on cash
productive sales growth are planned. As appropriate, growth will be
accelerated by selective acquisition or licensing opportunities.
ENDS
Unaudited Consolidated Profit and Loss Account
for the year ended 31 March 2001
Restated
2001 2000
#'000 #'000
Turnover __________ ____________
Continuing operations 17,509 16,488
Cost of sales (5,800) (6,040)
__________ ____________
Gross profit 11,709 10,448
Sales & marketing expenses (5,015) (7035)
(note 1)
General & administrative (4,005) (1,440)
expenses
Research & development (787) (1,352)
expenditure
__________ ____________
Operating profit 1,902 621
Exceptional costs (note 1) (924) -
Interest receivable & similar 290 55
income
Interest payable (189) (62)
__________ ____________
Profit on ordinary activities 1,079 614
before taxation
Tax on profit on ordinary (147) (299)
activities
__________ ____________
Retained profit for the year 932 315
========== ============
Basic Earnings per ordinary
share (note 2)
Before exceptional costs 1.80p 0.3p
Exceptional costs (0.90p) -
__________ ____________
Basic Earnings per Ordinary 0.90p 0.3p
Share ========== ============
The results above all relate to
continuing operations.
Statement of total recognised
gains/(losses)
Profit for the financial year 932 315
Currency translation
differences on foreign currency 504 (403)
net investments (3,312) -
Prior year adjustment (note 1)
__________ ____________
Total losses recognised since (1,876) (88)
last annual report ========== ============
Administrative and Sales and Marketing Expenses have been
reclassified in 2001 to reflect better the costs associated with
each activity.
There is no difference between the profit on ordinary activities
before taxation and the retained profit for the year stated above
and their historical cost equivalents.
Unaudited Consolidated Balance Sheets
at 31 March 2001
2001 Restated
2000
#'000 #'000
Fixed assets ____________ ___________
Intangible assets 1,321 414
Tangible assets 3,372 4,131
Investments 5 19
____________ ___________
4,698 4,564
Current assets
Stocks 2,556 2,551
Debtors 8,844 6,814
Cash at bank and in hand 1,590 591
____________ ___________
12,990 9,956
Creditors: amounts falling due (4,210) (2,819)
within one year
____________ ___________
Net current assets 8,780 7,137
Total assets less current 13,478 11,701
liabilities
Creditors: amounts falling due (300) (579)
after more than one year
____________ ___________
Net assets 13,178 11,122
============ ===========
Capital and reserves
Called up share capital 1,071 1,030
Share premium account (note 5) 14,564 13,985
Profit and loss account (note (3,498) (4,934)
5)
Reserve arising on consolidation 1,041 1,041
____________ ___________
Equity shareholders' funds 13,178 11,122
============ ===========
Unaudited Consolidated Cashflow Statement
for the year ended 31 March 2001
2001 Restated 2000
#'000 #'000
__________ _____________
Cash inflow/(outflow) from operating
activities(note 3)
Net cash inflow/(outflow) before 1,604 (70)
exceptional costs
Outflows related to exceptional (924) -
items (note 1) __________ _____________
Net cash outflow from operating 680 (70)
activities
Returns on investments and servicing
of finance
Interest received from investments 259 55
Interest paid (189) (62)
___________ _____________
70 (7)
___________ _____________
Taxation
Overseas corporation tax paid (47) (136)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (849) (1,032)
Disposal of tangible fixed assets 1,219 10
Purchase of intangible fixed assets (20) (3)
___________ _____________
350 (1,025)
___________ _____________
Acquisitions
Purchase of subsidiary undertaking (498) -
(less cash acquired)
___________ _____________
(498) -
Cash inflow/(outflow) before (1,238)
management of liquid resources and 555
financing
Financing
Proceeds from share options 5 30
exercised
Repayment of principal on finance (96) -
leases
Loan repayments (376) (81)
___________ _____________
(467) (51)
__________ _____________
Increase/(decrease) in cash in the 88 (1,289)
year (notes 3 and 4)
========== =============
Notes to the Accounts (Unaudited)
for the year ended 31 March 2001
1 Exceptional items and prior year adjustment
Operating exceptional items
Included in sales and marketing expenses is an exchange gain of
#955,000 resulting from the retranslation of intercompany balances
denominated in foreign currencies.
Non-operating exceptional items
Exceptional costs of #924,000 which relate to a fundamental
restructuring of the operations of the group have been included as
non-operating exceptional items.
Prior year adjustment
During the year ended 31 March 2001 the company has implemented a new
accounting policy for revenue recognition. In previous accounting
periods the company recognised revenue on despatch of equipment to
customers. The new accounting policy requires not only despatch but
written notification from the customer that the equipment has been
accepted.
The impact of the restatement on the results for the year ended 31
March 2000 is that the previously reported profit for the year of
#2,708,000 has been restated to a profit of #315,000. Net assets at
31 March 2000 were previously reported as #14,434,000 and have been
restated to #13,178,000.
Restated
2001 2000
_________ ________
2 Basic Earnings per Ordinary Share
Profit on ordinary activities after 932 315
taxation (#'000)
Average number of Ordinary Shares in issue 103,237 102,838
(x 1,000)
Basic Earnings per Ordinary Share 0.90p 0.3p
========= ========
Diluted earnings per share are not materially different to earnings per
share, being 0.90p in 2001 (based on 103,973 shares) and 0.3p in 2000
(based on 104,612 shares).
Restated
3 Net cash inflow/(outflow) from continuing 2001 2000
operating activities
#'000 #'000
_________ ________
Operating profit/(loss) before exceptional 1,902 621
costs
Depreciation of tangible fixed assets 963 995
Amortisation of intangible fixed assets 31 30
Provision for reduction in valuation of 14 (9)
shares held by Trustee of Share Ownership
Trust
(Profit)/Loss on disposal of tangible (262) 2
fixed assets
(Increase) in debtors (1,197) (1,076)
Decrease/(increase) in stocks 172 (400)
(Decrease) in creditors (17) (233)
_________ ________
Net cash inflow/(outflow)from continuing 1,604 (70)
operating activities ========== ========
Reconciliation of net cash flow to
movement in net funds
Restated
2001 2000
#'000 #'000
_________ ________
Increase/(decrease)in cash 88 (1,289)
in the year
New finance leases (208) (59)
Repayment of finance lease 472 81
obligations
________ ________
Movement in net funds in the 352 (1,267)
year
Exchange adjustment (31) (13)
Net funds at beginning of 22 1,302
the year
________ ________
Net funds at end of the year
(Note 3) 343 22
======== ========
4 Analysis of net
funds
Other
non-cash Exchange At 31
At 1 Apr Cashflow changes Differences Mar
#'000 #'000 #'000 #'000 #'000
_________ ______ _______ ________ ______
Year ended 31
March 2001:
Cash at bank 591 971 - 28 1,590
and in hand
Bank Overdraft - (883) - - (883)
Loans 376 - (28)
(348) -
Finance leases (221) 96 (208) (31) (364)
_________ _______ _______ _________ ______
Net funds 22 560 (208) (31) 343
========= ====== ======= ========= ======
Year ended 31
March 2000:
Cash at bank 1,887 (1,289) - (7) 591
and in hand
Loans (363) 18 - (3) (348)
Finance leases (222) 63 (59) (3) (221)
_________ ______ _______ _________ _______
Net funds 1,302 (1,208) (59) (13) 22
========= ======= ======= ======== ======
5 Profit and loss account Restated
2001 2000
#'000 #'000
_____________ ____________
Retained loss brought forward (4,934) (32,943)
Retained profit for the year 932 315
Reduction in share premium - 28,100
Goodwill written off - (3)
Exchange difference 504 (403)
______________ ____________
Retained loss carried forward (3,498) (4,934)
============== =============
In accordance with the special resolution passed by shareholders on 29
June 1999 and confirmed by Court order
dated 28 July 1999, the share premium account has been reduced by
#28,100,000. This amount was transferred to a special reserve in the
Company's balance sheet. This amount has been offset against reserves
during the year.
6 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 2001, does not amount to full
accounts within the meaning of section 240 of the Companies Act 1985
(as amended). Subject to the restatement referred to in note 1, the
accounting policies are consistent with those applied in the accounts
of previous years.
The auditors reported on the statutory accounts for the year ended 31
March 2000; their report was unqualified and did not contain a
statement under either section 237(2) or (3) of the Companies Act 1985.
Comparative information in these financial statements has been restated
for the effect of a change in accounting policy relating to revenue
recognition which is explained above. The statutory accounts for the
year ended 31 March 2001 will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
7 Dividend
The Directors have not declared a final dividend.
8 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 0FX.
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