Consort Medical PLC Posting of Annual Financial Report and AGM Notice (4841M)

TIDMCSRT

RNS Number : 4841M

Consort Medical PLC

28 July 2017

Consort Medical plc

28 July 2017

Posting of Annual Report and AGM Notice

Consort Medical plc announces that it has published its Annual Report and Accounts 2017 and Notice of 2017 Annual General Meeting. The Annual General Meeting will be held at 2.00 p.m on Wednesday 6 September 2017 at the Company's registered office, Suite B, Breakspear Park, Breakspear Way, Hemel Hempstead, Hertfordshire HP2 4TZ.

Copies of the following documents will shortly be available to view on the Company's website at www.consortmedical.com

   --     Annual Report and Accounts 2017; and 
   --     Notice of 2017 Annual General Meeting. 

In accordance with Listing Rule 9.6.1, a copy of each of these documents has been uploaded to the National Storage Mechanism and will be available for viewing shortly at www.hemscott.com/nsm.do

Hard copies have also been sent to those shareholders who have elected to continue to receive paper communications.

The Preliminary Results for the year ended 30 April 2017 were announced on 15 June 2017.

The information contained in Appendix 1 (Principal Risks and Uncertainties) and Appendix 2 (Statement of Directors' Responsibilities), which is extracted from the Annual Report and Accounts, is also included in the announcement for the sole purpose of complying with Rule 6.3.5 of the Disclosure and Transparency Rules. Page numbers and cross-references in the extracted information refer to page numbers and cross-references in the Annual Report and Accounts.

ENQUIRIES:

John Ilett

Company Secretary

01442 867920

Appendix 1

Principal Risks & Uncertainties

The Group's performance and prospects may be affected by risks and uncertainties relating to our business and operating environment.

Our internal controls include risk management processes to identify key risks and, where possible, to manage those risks through systems and processes and by implementing specific mitigation strategies. The most significant risks identified through our progressive review of the risk register that could materially affect the Group's ability to achieve its financial and operating objectives are summarised in this section. Other risks are either unknown or deemed less material.

 
Risk                                   Controls and Mitigating Actions           Trend 
-------------------------------------  ----------------------------------------  --------- 
Reliance upon key customers/products:  The Group has significant                  á 
 Both Aesica and Bespak                 Intellectual Property with 
 have a degree of reliance              associated barriers to entry. 
 on a relatively small                  Regulatory licencing reduces 
 number of key customers/products       customers' ability to transfer 
 and the loss of one such               business elsewhere so a loss 
 customer/product could                 of business once approved 
 lead to a significant                  on a customer programme is 
 reduction in revenues.                 unusual. The Group maintains 
                                        a close dialogue with all 
                                        of its customers and seeks 
                                        to enter into long term supply 
                                        agreements where appropriate. 
                                        The Group's strategy of diversification 
                                        has opened up a broader range 
                                        of products and customers, 
                                        and is progressively diluting 
                                        customer/product concentration. 
-------------------------------------  ----------------------------------------  --------- 
Major operational incident:            Where possible, manufacturing              à 
 A major incident (e.g.                 is split into discrete buildings 
 fire) at a manufacturing               for separate operations providing 
 site may result in the                 some level of isolation for 
 closure of a site causing              certain products. The Group 
 disruption to key supply               carries out critical plant 
 chain and loss of assets,              risk and remediation assessments 
 revenues and profit.                   at each of its manufacturing 
                                        sites. High-profile near-miss 
                                        reporting is performed to 
                                        raise awareness of potential 
                                        risks. Business continuity 
                                        plans are also in place at 
                                        major sites. 
-------------------------------------  ----------------------------------------  --------- 
Growth risk: The Group's               The Group has well-honed programme          à 
 growth strategy is achieved            planning and management processes. 
 through four key elements:             These provide good visibility 
 sustained organic revenue              of resource requirements, 
 growth, operating leverage,            whether capital, space, equipment 
 innovation and enhancing               or people, and enable timely 
 acquisitions/investments.              fulfilment on multiple parallel 
 Delivery of growth carries             programmes. Programme management 
 the risk of execution                  techniques are risk based 
 due to allocation of                   and highlight risks and challenges 
 resources and new areas                for increased management focus. 
 of expertise. 
-------------------------------------  ----------------------------------------  --------- 
Acquisition risk: Failure              The Group uses a clear set                  à 
 to successfully execute                of criteria for making acquisition 
 or attain strategic objectives         decisions while also engaging 
 from the Group's acquisitions          a long standing set of advisors 
 may adversely affect                   who provide advice throughout 
 the Group's financial                  an acquisition process. Appropriate 
 performance and position.              due diligence is performed 
 Despite due diligence,                 on all potential mergers and 
 changes in circumstances               acquisitions. All acquisition 
 could mean that initial                plans are reviewed and sanctioned 
 expectations are not                   by the Board. Warranties and 
 met in whole or in part.               indemnities are also sought 
                                        from the seller, which act 
                                        to further reduce risk/exposure 
                                        in certain areas. 
-------------------------------------  ----------------------------------------  --------- 
Legal risk: As an international        The Group limits such risks                 à 
 enterprise, the Group                  by means of review by the 
 must comply with differing             Legal department and, where 
 laws in different jurisdictions.       appropriate, by consulting 
 This can result in a                   external specialists on national 
 wide range of risks relating           laws in the jurisdictions 
 to contract, competition,              concerned. There is a specific 
 trademark, patent and                  anti-corruption and anti-bribery 
 anti-bribery/corruption                policy which all employees 
 laws. Significant penalties,           are required to comply with 
 such as fines, the requirement         and confirm their understanding. 
 to comply with monitoring              There is also a whistle blowing 
 or self-reporting obligations          policy in place and Bribery 
 could materially adversely             Act training is given to employees. 
 affect our reputation,                 The Group is not aware of 
 business or financial                  any risks from legal disputes 
 performance.                           that could have a significant 
                                        impact on its financial results 
                                        or net assets. 
-------------------------------------  ----------------------------------------  --------- 
Political/Socio-economic               The Group maintains open relationships     à 
 risk: The Group has operations         with its customers and suppliers 
 and customers in a number              to ensure that we are up to 
 of countries worldwide.                date on any political/economic 
 As a result it is subject              conditions which may impact 
 to political and socio-economic        the business. The Group continually 
 risks both globally and                reviews any economic policy 
 in individual countries.               changes in both the UK and 
 Political or economic                  Global markets and assesses 
 instability may impact                 if there is any impact on 
 the performance of our                 the business. 
 business both operationally 
 and financially. 
-------------------------------------  ----------------------------------------  --------- 
Development risk: Bespak               The Group follows rigorous                  à 
 is developing a range                  processes for the development 
 of medical device products.            of new products. Where possible, 
 Aesica is providing pharmaceutical     Bespak is developing its device 
 product formulation development,       technology as a platform for 
 analytics and manufacturing            multiple programmes to reduce 
 services to pharmaceutical             the exposure to any individual 
 and biotech companies.                 trial. Aesica's development 
 At any time, any of the                services are on a fee per 
 products may fail in                   project basis, with the large 

 clinical trials, be withdrawn          majority of its revenues coming 
 by the customer or may                 from manufacturing services. 
 not become commercially 
 successful once launched. 
-------------------------------------  ----------------------------------------  --------- 
Product quality failure:               The Group has rigorous quality              á 
 The Group operates in                  management and assurance systems 
 highly regulated markets               and processes. Incoming raw 
 with strict quality requirements.      materials are analysed, production 
 Any quality failure involving          processes are controlled and 
 the Group's products                   products are sampled for testing 
 could lead to loss of                  prior to release. Any issues 
 reputation, reduction                  are tracked and reported to 
 in revenues, recall costs              ensure that there is early 
 or sanction by the regulators.         communication with customers 
                                        and regulatory bodies regarding 
                                        any quality audits. 
-------------------------------------  ----------------------------------------  --------- 
Corporate Social Responsibility:       The Group continually reviews               à 
 Our manufactured products              and explores ways to ensure 
 or other activities/decisions          that its business operates 
 of the Group may not                   in a responsible manner across 
 be judged by the public,               the key focus areas of: health 
 governments or other                   and safety, environmental 
 stakeholders as being                  management, our people, ethical 
 socially responsible,                  business practices and how 
 leading to reputational                it interacts with and supports 
 harm.                                  local communities. The Corporate 
                                        Responsibility Committee meet 
                                        regularly and is responsible 
                                        for reviewing the divisions' 
                                        new programmes, assisting 
                                        with resourcing and ensuring 
                                        alignment to the overall Group 
                                        strategy. 
-------------------------------------  ----------------------------------------  --------- 
Regulatory risk: The                   A strong regulatory compliance              à 
 operations of the Group                regime is in place and the 
 are subject to various                 Group has invested heavily 
 stringent regulatory                   in ensuring compliance with 
 requirements which carry               health, safety and regulatory 
 an element of compliance               requirements. Regular reviews 
 risk (e.g. environmental,              and audits take place, not 
 health & safety).                      only by regulatory bodies 
                                        such as the FDA and MHRA but 
                                        also by customers. Bespak 
                                        is ISO 13485 accredited and 
                                        operates SAP in all its main 
                                        processes. Aesica's API facilities 
                                        are inspected and approved 
                                        by the FDA and all manufacturing 
                                        sites are approved by the 
                                        MHRA and comply with cGMP 
                                        manufacturing standards and 
                                        requirements. 
-------------------------------------  ----------------------------------------  --------- 
IT / Cyber Risk: The                   The Group adopts a risk based               à 
 Group is dependent on                  approach in responding to 
 information technology:                Cyber risks. The Group has 
 its systems and infrastructure         a dedicated IT department 
 face certain risks, including          who monitor and review access 
 service disruptions and                security, ensure that there 
 the loss or theft of                   are regular back-ups of confidential 
 sensitive or confidential              information and data, perform 
 information. Cyber crime               disaster recovery procedures 
 is increasing in sophistication,       when required and manage investment 
 consequences and incidence,            in the Group's IT infrastructure. 
 with risks including                   Continuous vigilance and training 
 virus "infection", unauthorised        are required to mitigate Cyber 
 access (hacking), and                  security risks, as perpetrators 
 email-based phishing                   are creative and dynamic on 
 frauds.                                a wide spectrum of strategies. 
-------------------------------------  ----------------------------------------  --------- 
Human Resources: The                   Remuneration packages are                   à 
 Group relies heavily                   reviewed on an annual basis 
 on recruiting and retaining            in order to ensure that the 
 talented employees with                Group can continue to attract, 
 a diverse range of skills              retain, incentivise and motivate 
 and capabilities to meet               its employees. The Group is 
 its strategic objectives.              also committed to working 
 A lack of training, recruitment,       on improving drivers of engagement, 
 securing the long term                 such as increasing our employees' 
 loyalty of sufficient                  understanding of our strategy, 
 numbers of qualified                   performance and core values. 
 personnel, demographic 
 change and any resulting 
 skills shortages could 
 have a considerable impact 
 on our success. 
-------------------------------------  ----------------------------------------  --------- 
Currency risk: As the                  Currency exposures are reviewed              à 
 Group is headquartered                 on a monthly basis. The Group 
 in the UK, its functional              has a currency hedging strategy 
 currency is pounds sterling.           in place to cover known transactional 
 As the Group conducts                  currency exposures. The Group's 
 a large part of its business           European operations are naturally 
 in Europe (Euro) and                   hedged whereas its UK operations 
 also contracts in other                hedge contracted non-GBP FX 
 currencies including                   flows. The Group hedges its 
 USD and Japanese Yen,                  Balance Sheet FX exposure 
 exchange rate fluctuations             by structuring its debt currency 
 can have an impact on                  composition in line with the 
 earnings.                              base currency of its assets. 
                                        The City and analysts are 
                                        aware of our currency exposures 
                                        and the Group's results are 
                                        reported in constant currency. 
-------------------------------------  ----------------------------------------  --------- 
Interest rate risk: The                The terms of the facility                   à 
 Group is subject to interest           are reviewed by the Board 
 rate risk on its revolving             on a regular basis. In the 
 credit facility which                  current low interest rate 
 is currently based on                  environment, the Group has 
 LIBOR/EURIBOR plus a                   decided not to hedge its floating 
 margin.                                rate debt into fixed rate 
                                        for the time being. However, 
                                        the Group actively monitors 
                                        interest rates and debt markets 
                                        and will manage any floating 
                                        rate interest rate exposure, 
                                        as appropriate. 
-------------------------------------  ----------------------------------------  --------- 
Liquidity and leverage                 The Group has strong cash                   à 
 risk: Whilst the Group                 flows, and good earnings visibility 
 has comfortable borrowing              ensures that its margins are 
 facilities and strong                  sufficient to exceed normal 
 cash flows, there is                   operating costs. The business 
 a risk of unforeseen                   is cash-generative, and there 
 short term working capital             are well-embedded cash and 
 fluctuations which it                  working capital management 
 may not be able to meet,               processes. Current borrowing 
 or which may breach covenants          levels and financial covenants 
 on its borrowing facilities.           can be supported comfortably 
                                        by forecast profit and cash 
                                        flows. Covenant tests are 
                                        performed bi-annually to determine 
                                        whether the covenant tests 
                                        are being met. Committed facilities 
                                        are in place until September 
                                        2019. 
-------------------------------------  ----------------------------------------  --------- 
Pension risk: The Group                The Group has full open dialogue            á 
 operates a number of                   with the Pension Trustees 
 defined benefit pension                and works closely with them 

 schemes which are valued               to ensure that the Defined 
 based upon a number of                 Benefit Schemes are adequately 
 actuarial assumptions.                 funded and that the assets 
 Fluctuations as well                   are invested appropriately. 
 as errors or misstatements             The Bespak Scheme was closed 
 in these assumptions                   to future accrual in March 
 may result in the pension              2016 and has been closed to 
 schemes being underfunded              new members since 2002. The 
 or valued incorrectly.                 total deficit on the Bespak 
                                        pension scheme was GBP40.6m 
                                        at 30 April 2017. Aesica has 
                                        three defined benefit schemes 
                                        in Germany and Italy, two 
                                        of which are closed to new 
                                        members. The total deficit 
                                        on the Aesica pension schemes 
                                        was GBP4.0m at 30 April 2017 
                                        (See Note 21). 
-------------------------------------  ----------------------------------------  --------- 
Distributable reserves:                The Group monitors distributable          á 
 Following the Brexit                   reserves prior to key reporting 
 vote and subsequent changes            periods and in an amplified 
 in UK monetary policy,                 update provided within the 
 corporate bond yields                  Board dividend paper. The 
 have fallen sharply,                   Group's tax advisors EY have 
 leading to substantial                 also completed our strategy 
 increases in the Bespak                for repatriation of profits 
 pension deficit. The                   in overseas subsidiaries. 
 Group continues to monitor 
 the impact of this on 
 its ability to pay dividends 
 in future periods. 
-------------------------------------  ----------------------------------------  --------- 
Impact of Brexit: The                  We will continue to monitor               á 
 vote to leave the EU                   any impact on the group by 
 has resulted in some                   monitoring any decisions made 
 uncertainty, including                 by the UK government, maintaining 
 currency volatility and                regular interaction with tax 
 a significant weakening                colleagues and providing legal 
 of sterling. Whilst the                updates to the Board and the 
 weakening of sterling                  Executive Committee. 
 has had a beneficial 
 translation impact on 
 the Group's sterling 
 results, it continues 
 to monitor the impact 
 of Brexit on its principal 
 risks and any direct 
 or indirect resultant 
 complexities this may 
 bring. 
-------------------------------------  ----------------------------------------  --------- 
 

Appendix 2

Statement of directors' responsibilities

IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

The directors are responsible for preparing the Annual Report and the Group and parent company financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and parent company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the parent company financial statements on the same basis.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the directors are required to:

   --      select suitable accounting policies and then apply them consistently; 
   --      make judgements and estimates that are reasonable and prudent; 
   --      state whether they have been prepared in accordance with IFRSs as adopted by the EU; and 

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the directors in respect of the annual financial report

We confirm that to the best of our knowledge:

-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and

-- the strategic report and directors' report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

For and on behalf of the Board

John Ilett

Company Secretary

14 June 2017

This information is provided by RNS

The company news service from the London Stock Exchange

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