We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Goldshield Grp | LSE:GSD | London | Ordinary Share | GB0002893823 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 486.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
RNS Number:8024U
Goldshield Group PLC
29 November 2005
GOLDSHIELD INTERIM RESULTS
Goldshield Group plc ("Goldshield"), the marketing-led pharmaceutical company,
today announces its interim results for the six months to 30 September 2005.
* Turnover #39.9 million (2004: #39.2 million)
* Earnings before tax, amortisation, impairment losses and
exceptional costs #7.3 million (2004: #7.1 million)
* EPS 3.4p (2004: loss 5.8p)
* Net Cash #8.2 million (March 2005: # 6.2 million)
* Interim dividend 1.7p (2004: 1.5p)
* Exciting opportunities in India
* Successful reorganisation of management in readiness for next phase of
growth
Commenting on the results, Ajit Patel, Chief Executive, said,
" I am pleased with the progress that the Group has made during the first six
months of the year. The reorganisation at management level is nearly complete
and the calibre of the new recruits means we are well positioned for our next
phase of growth."
" The strength of the Indian economy is opening up a number of exciting
opportunities for the Group, including the development of care villages for the
retirement market.
" We continue to assist the Department of Health and SFO in their enquiries. Our
stance remains unchanged and we believe that we have not acted in any way that
was unlawful or improper.
" The Group's balance sheet remains strong and we have remained debt free while
strengthening our cash position. The Board is confident that we will maintain
our progress and that we can approach the future with confidence."
Date: 29 November 2005
For further information contact:
Goldshield Group PLC City Profile Group
Ajit Patel, Chief Executive Jonathan Gillen
Rakesh Patel, Finance Director Simon Courtenay
020-8649-8500 020-7448-3244
www.goldshieldplc.com
-------------------------
Chairman's Overview
Overview
The Group has had a successful six months with figures in line with our
expectations.
The continuing issues with the Department of Health and the Serious Fraud Office
have inevitably distracted senior management but the new executive structure has
proved its worth in ensuring that the company continues to progress satisfactorily
at an operating level. The Chief Executive's Operating Review describes the board's
strategic plans to expand into the clinical and wellbeing centre market in India
and elsewhere.
We are pursuing actively the search for an additional non-executive independent
director. The nominations committee has interviewed candidates and we would expect
the appointee to be in place by the end of the financial year.
Peter M Brown
Chairman
28 November 2005
Chief Executive Officer's Operating Review
Operating Review
I am pleased with the progress the company has made in the first six months of
the year. Having focused on the executive reorganisation and the achievement of
a debt free position rather than sales growth, we continue to build cash. I now
believe we are well positioned for our next phase of growth.
Sales for the period ended were #39.9 million (2004: #39.2 million) and profit
before tax at #3.2 million(2004:loss #1.0 million). Pre-exceptional earnings
before tax, amortisation and impairment losses #7.3 million
(2004: #7.1 million). The exceptional costs of #0.7 million relate to the SFO
enquiry and DOH litigation. The net cash at the end of the period was #8.2 million
(March 2005: #6.2 million). The results are in line with expectations I am
therefore pleased to announce that the Board is recommending an increased interim
dividend of 1.7 pence (2004: 1.5p).
We have continued to introduce management changes with special focus on the
reorganisation of our business ensuring that they deliver the expected results.
We continue to recruit more experienced and senior people throughout the World
in readiness for the next phase of our company's growth.
Since August, we have been reviewing the strategic options for the Group's future
growth. I am pleased that very shortly we will be in a position to announce our
vision for the years to 2010. The Board is excited about the future prospects of
our business.
The transfer of our support operations to India has given us a very competitive
operational edge, additionally we are able to provide a support infrastructure to
other small and mid-sized businesses based in Europe and the United States.
Whilst to-date, we have been developing this side on a limited budget, we have
made a strategic decision to fully exploit this strength and develop a new income
stream from outsourced services.
We have also identified a great opportunity for developing care and retirement
villages in India.We expect to start work in this area in the latter part of this
year with a view to building our first facilities by the end of 2007. These will
cater to people of retirement age from across Europe as well as the Indian
Sub-Continent.
With the Indian economy booming, we are also now evaluating Indian Product
launches and the establishment of clinics for providing healthcare services.
Marketing and Sales Review
Whilst I will give you a more in-depth review at the year end, I will give key
highlights of our various businesses during the first six months.
Overall the business units have done well. On a like for like basis, the sales
performance at #39.9 million is slightly better than the same period last year.
The Branded Retail businesses in Europe have been broken down into smaller units
to give them more focus. These collectively have performed better than expected
at #16.1 million compared to #14.5 million in the corresponding period last year.
In recognition of the opportunities in the OTC sector in UK, we have set up a
new unit which will focus on the multiple pharmacy and grocery sectors. Likewise,
we have set up a unit to develop the OTC business in Central Europe.
The Retail Generics business in Europe has generated sales of #5.1 million
compared to #4.2 million for the same period last year. However, the margin has
been lower - largely due to added intense competition. In addition a significant
level of consolidation in the industry is causing a lot of price volatility.
The Hospital Business in Europe achieved sales of #5.6 million as against
#6.2 million for the corresponding period last year. There have been a number of
regulatory delays as a result of new directives which require packaging to be
redesigned, resulting in lost sales.
New initiatives in mainland Europe have been slow to progress and changed NHS
contracts have also contributed to slower than expected sales. That said, there
are many new product introductions on the horizon and several countries have seen
increases in sales. With several new products planned for Europe, we should see a
greater impact on our revenues. Niche distribution opportunities outside of the
NHS are also being targeted.
The Country Distributors business recorded sales of #1.7 million as against
#2.1 million in the same period last year. Mostly the sales lag is timing related.
The focus during the period has been on building a team capable of exploiting the
full potential of this channel of distribution.
Progress has been steady in the Direct to Consumer business, which is broken down
into several independent business units.
The US businesses showed a similar performance compared with the same period last
year. Most of the progress has come from the mail order business, whilst the
Multi Level Marketing (MLM) business has lost some ground. A good sign of future
potential is that we have enlisted in excess of 15,000 new customers. A great
many new opportunities are being evaluated in these businesses.
The European Direct to Consumer businesses lost further ground in the first half
with sales falling by #1.0 million to #7.2 million. However, progress in France
is good - and we have seen sales growth and an increase in new customers recruited.
Most of the other units are concentrating on recruiting new customers and reducing
operating costs, which will allow us to increase our marketing spend.
The Indian Direct to Consumer businesses have just started operating, primarily
in Mumbai. The initial test programmes are showing some very encouraging signs.
There are a lot of teething problems - operational and regulatory - which are
being addressed. Mostly, the hurdles to be overcome arise from operating in a new
territory, initial set-ups and people development.
Finally, the Services Business which has been developed on the back of our
internal support infrastructure is also growing steadily. We have highlighted
this as an area of growth and accordingly will invest more in business development
during the second half of the year.
Product Development
The product groups rationalised last year are in the process of being re-built.
We have re-organised our product development units into four areas concentrating
on niche pharmaceuticals, over-the-counter drugs, natural and alternative care
products and medical devices. The current year will be spent in bolstering the
management and giving them renewed focus, which will be the key driver of future
growth.
Legal Issues
During the first six months considerable resources, in both management time and
in financial terms, have been spent preparing our case against the Departments
of Health in England & Wales, Scotland and Northern Ireland and continuing to assist
the Serious Fraud Office with their investigation. Our position with regard to both
these cases has not changed and we maintain our belief that we did not act in
any way that was unlawful or improper. We are prepared to rigorously defend our
position and ultimately prove our case.
Current Trading and Future Prospects
The new areas of growth being considered by your Board are very exciting. Having
achieved a debtfree position, we have continued to build cash. This cash will
help to fuel future growth. Sales and profits continue to be in line with our
expectations. Whilst the Department of Health litigation and SFO enquiry are
distracting, I remain very excited about the future prospects of the Group.
Transition to IFRS
The interim financial statements have been prepared as per the requirements of
the International Financial Reporting Standards (IFRS) and the impact of this
transition is explained in Note 11 of the financial statements.
Ajit Patel
Chief Executive Officer
28 November 2005
Note: Earnings before tax, amortisation, impairment and exceptional costs
are calculated as follows:-
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
#'000 #'000 #'000
Revenue 39,860 39,248 80,767
================================================================================
Profit/(loss) before tax 3,239 (984) (4,503)
Amortisation 3,000 3,103 6,185
Impairment losses 336 4,607 4,623
Exceptional legal and professional costs 690 378 1,004
--------------------------------------------------------------------------------
Earnings before tax, 7,265 7,104 16,315
amortisation,impairment and exceptional
costs
================================================================================
Consolidated Income Statement for the six months ended 30 September 2005
Total Total Total
Before Six months Six months Year
goodwill ended ended ended
impairment and 30 September 30 September 31 March
Notes exceptional Exceptional Goodwill 2005 2004 2005
items items impairment (unaudited) (unaudited) (unaudited)
#'000 #'000 #'000 #'000 #'000 #'000
Revenue 2 39,860 - - 39,860 39,248 80,767
Cost of sales (14,109) - - (14,109) (13,895) (28,947)
------------------------------------------------------------------------------------------------------------
Gross profit 25,751 - - 25,751 25,353 51,820
Distribution costs (2,706) - - (2,706) (2,826) (3,824)
Impairment losses 6 - - (336) (336) (4,607) (4,623)
Exceptional legal and
professional costs - (690) - (690) (378) (1,004)
Other administrative
expenses (18,862) - - (18,862) (18,424) (37,548)
------------------------------------------------------------------------------------------------------------
Administrative expenses (18,862) (690) (336) (19,888) (23,409) (43,175)
------------------------------------------------------------------------------------------------------------
Operating profit/(loss) 4,183 (690) (336) 3,157 (882) 4,821
Net interest 82 - - 82 (102) (318)
------------------------------------------------------------------------------------------------------------
Profit/(loss) before tax 4,265 (690) (336) 3,239 (984) 4,503
Income tax expense 3 (2,185) 207 - (1,978) (1,164) (4,032)
------------------------------------------------------------------------------------------------------------
Profit/(loss) after tax 2,080 (483) (336) 1,261 (2,148) 471
============================================================================================================
Attributable to
shareholders of parent 2,080 (483) (336) 1,261 (2,148) 471
------------------------------------------------------------------------------------------------------------
Attributable to
minority interest - - - - - -
============================================================================================================
Earnings per share
Basic 5 3.4 (5.8) 1.3
============================
Diluted 5 3.4 (5.8) 1.3
============================
Dividends
Proposed dividend
per share (pence) 1.7 1.5 4.5
Proposed dividend (#'000) 631 556 1,668
Dividends paid
during the period (pence) 4.5 - 4.0
Dividends paid
during the period (#'000) 1,669 - 1,482
The accompanying accounting policies and notes form an integral part of these financial statements.
Consolidated Balance Sheet as at 30 September 2005
As at As at As at
30 September 30 September 31 March
Notes 2005 2004 2005
(unaudited) (unaudited) (unaudited)
#'000 #'000 #'000
Assets
Non-current
Goodwill 6 11,153 11,495 11,308
Other intangible assets 6 23,788 29,872 26,789
Property, plant and equipment 976 1,476 1,118
Deferred tax assets 734 258 841
--------------------------------------------------------------------------------
36,651 43,101 40,056
Current
Inventories 12,512 13,575 11,301
Trade and other receivables 12,122 13,459 11,916
Cash and cash equivalents 8,175 1,286 6,168
--------------------------------------------------------------------------------
32,809 28,320 29,385
--------------------------------------------------------------------------------
Total assets 69,460 71,421 69,441
================================================================================
Equity
Equity attributable to shareholders of Goldshield Group plc
Share capital 7 1,856 1,852 1,854
Share premium 7 21,438 21,285 21,359
Translation reserve 93 291 (400)
Retained earnings 19,859 18,981 20,370
--------------------------------------------------------------------------------
43,246 42,409 43,183
Minority interest 106 106 106
--------------------------------------------------------------------------------
Total equity 43,352 42,515 43,289
================================================================================
Liabilities
Non-current
Deferred tax liabilities 2,665 2,261 2,639
--------------------------------------------------------------------------------
2,665 2,261 2,639
Current
Bank loan - 2,250 -
Trade and other payables 17,666 17,089 17,079
Other liabilities 2,462 3,755 2,995
Current tax liabilities 3,315 3,551 3,439
--------------------------------------------------------------------------------
23,443 26,645 23,513
--------------------------------------------------------------------------------
Total liabilities 26,108 28,906 26,152
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 69,460 71,421 69,441
================================================================================
The accompanying accounting policies and notes form an integral part of these financial statements.
Consolidated Cash Flow Statement for the six months ended 30 September 2005
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
#'000 #'000 #'000
Operating activities
Result for the period before tax 3,239 (984) 4,503
Depreciation 273 259 651
Amortisation 3,000 3,103 6,185
Impairment losses 336 4,607 4,623
Equity settled share options 45 27 72
Profit on disposal of tangible - - (96)
fixed assets
Interest (net) (82) 102 318
(Increase)/decrease in inventories (1,211) 416 2,690
(Increase)/decrease in trade and (206) (32) 1,510
other receivables
Increase/(decrease) in trade payables 413 (170) (1097)
and other liabilities
Taxes paid (2,094) (2,462) (5,670)
--------------------------------------------------------------------------------
Net cash from operating activities 3,713 4,866 13,689
Investing activities
Additions to property, plant
and equipment (90) (398) (639)
Proceeds from disposals of property,
plant and equipment - - 282
Purchase of businesses and deferred
consideration (35) (36) (75)
Interest received 83 3 40
--------------------------------------------------------------------------------
Net cash from investing activities (42) (431) (392)
Financing activities
Repayment of bank loans - (3,250) (5,500)
Proceeds from share issue 6 20 25
Interest paid (1) (105) (358)
Dividends paid (1,669) - (1,482)
--------------------------------------------------------------------------------
Net cash from financing activities (1,664) (3,335) (7,315)
Cash and cash equivalents at
beginning of period 6,168 186 186
Net increase in cash and
cash equivalents 2,007 1,100 5,982
--------------------------------------------------------------------------------
Cash and cash equivalents at
end of period 8,175 1,286 6,168
================================================================================
Consolidated statement of changes in equity
Equity attributable to equity holders of Minority Total
Goldshield Group plc Interest Equity
Share Share Translation Retained
Capital premium reserve earnings
#'000 #'000 #'000 #'000 #'000 #'000
Balance 1 April 2004 1,851 21,234 - 21,189 106 44,380
Currency translation differences - - 291 - - 291
Deferred tax on translation reserve - - - (87) - (87)
---------------------------------------------------------------------------------------------------
Net gains/(losses) not
recognised in income statement - - 291 (87) - 204
(Loss) for the period - - - (2,148) - (2,148)
---------------------------------------------------------------------------------------------------
Total recognised income and
expense for the period - - 291 (2,235) - (1,944)
Shares issued 1 51 - - - 52
Employee share based
compensation - - - 27 - 27
---------------------------------------------------------------------------------------------------
Balance at 30 September 2004 1,852 21,285 291 18,981 106 42,515
===================================================================================================
Balance 1 April 2004 1,851 21,234 - 21,189 106 44,380
Currency translation differences - - (400) - - (400)
Deferred tax on translation reserve - - - 120 - 120
---------------------------------------------------------------------------------------------------
Net gains/(losses) not recognised
in income statement - - (400) 120 - (280)
Profit for the period - - - 471 - 471
---------------------------------------------------------------------------------------------------
Total recognised income and
expense for the period - - (400) 591 - 191
Shares issued 3 125 - - - 128
Employee share based
compensation - - - 72 - 72
Dividends paid - - - (1,482) - (1,482)
---------------------------------------------------------------------------------------------------
Balance at 31 March 2005 1,854 21,359 (400) 20,370 106 43,289
===================================================================================================
Balance 1 April 2005 1,854 21,359 (400) 20,370 106 43,289
Currency translation differences - - 493 - - 493
Deferred tax on translation reserve - - - (148) - (148)
---------------------------------------------------------------------------------------------------
Net gains/(losses) not recognised
in income statement - - 493 (148) - 345
Profit for the period - - - 1,261 - 1,261
---------------------------------------------------------------------------------------------------
Total recognised income and
expense for the period - - 493 1,113 - 1,606
Shares issued 2 79 - - - 81
Employee share based
compensation - - - 45 - 45
Dividends paid - - - (1,669) - (1,669)
----------------------------------------------------------------------------------------------------
Balance at 30 September 2005 1,856 21,438 93 19,859 106 43,352
====================================================================================================
Notes to the Interim Financial Statements
1. Principal accounting policies
Statement of compliance
The interim financial statements have been prepared in accordance with International
Accounting Standard 34 "Interim Financial Reporting" and the requirements of IFRS
1 - First - time Adoption of International Financial Reporting Standards relevant
to interim financial statements.
The Group will prepare its first full set of IFRS financial statements for the
year ended 31 March 2006. The date of transition to IFRS for the Group was 1 April
2004. A summary of the accounting policies applied in the preparation of financial
statements is given below. These policies have been consistently applied to all
the periods presented, unless otherwise stated. The impact of the transition from
UK GAAP to IFRS is explained in the notes to financial statements.
Basis of preparation
The Group's financial statements have been prepared in accordance with IFRS
1 - First - time Adoption of International Financial Reporting Standards. IFRS 1
requires full retrospective application of all applicable accounting standards,
but exemptions are permitted in specific areas. The Group has elected to make use
of the following exemptions:
Business combinations
The Group has elected not to apply IFRS 3 - Business Combinations, retrospectively
to business combinations prior to 1 April 2004.
Share - based payment transactions
The Group has applied IFRS 2 - Share Based Payments, retrospectively to equity
instruments granted after 7 November 2002 and vesting on or after 1 January 2005.
Cumulative Translation Differences
Translation differences that arose prior to the date of transition have not been
presented as a seperate component of equity.
An explanation of how the transition to IFRSs has affected the reported financial
position, financial performance and cash flows of the Group is provided in note 11.
This note includes reconciliations of equity and profit or loss for comparative
periods reported under UK GAAP to those reported for those periods under IFRS.
These consolidated interim financial statements have been prepared on the basis
of IFRS's in issue that are expected to be effective or available for early
adoption at the Group's first IFRS annual reporting date, 31 March 2006. Based on
these IFRS's, the Board of Directors have made assumptions about the accounting
policies expected to be adopted when the first IFRS annual financial statements
are prepared for the year ended 31 March 2006.
The IFRS's that will be effective and available for voluntary early adoption in
the annual financial statements for the year ended 31 March 2006 are still subject
to change and to the issue of additional interpretations and therefore cannot be
determined with certainty. Accordingly, the accounting policies for that annual
period that are relevant to these interim financial statements will only be
determined when the first IFRS financial statements are prepared at 31 March 2006.
Basis of consolidation
The Group financial statements consolidate those of the Company and of its
subsidiary undertakings drawn up to 30 September 2005. Profits or losses on
intra-group transactions are eliminated in full. The results of the subsidiary
undertakings acquired during the year have been included from the date of
acquisition. On acquisition of a subsidiary, all of the subsidiary's assets and
liabilities which exist at the date of acquisition are recorded at the fair values
reflecting their condition at that date. Goodwill arising on consolidation,
representing the excess of the fair value of the consideration given over the
fair values of the identifiable net assets acquired, is capitalised net of any
provision for impairment.
Sales revenue
Sales revenue is the total amount receivable by the Group for goods supplied and
services provided, excluding value added tax and trade discounts. Sales revenue
is recognised on the delivery of goods and services to customers.
Intangible assets
Goodwill
All business combinations are accounted for under the purchase method and goodwill
has been recognised on acquisitions of subsidiaries. In respect of business
combinations that have occurred since 1 April 2004, goodwill represents the
difference between the cost of the acquisition and the fair value of the net
identifiable assets acquired. Goodwill is stated at cost less any accumulated
impairment losses. Goodwill arising on acquisitions before 1 April 2004 has been
retained at the previous UK GAAP amounts. Goodwill is allocated to cash generating
units and is no longer amortised but tested for impairment annually or more
frequently if events or changes in circumstances indicate that it might be impaired.
Other intangible assets
Externally purchased product licenses, trademarks, brand-names, know-how and
similar intangible items are capitalised at historical cost, net of any provision
for impairment and amortised on a straight line basis over their estimated useful
economic lives which range between 7 and 10 years.
Impairment
The Group's goodwill and other intangible assets are tested for impairment annually
or more frequently, if events or changes in circumstances indicate that it might
be impaired. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash
generating units). An impairment loss is recognised for the amount by which the
asset's or cash generating unit's carrying amount exceeds its recoverable amount.
The recoverable amount is based on internal discounted cash - flow evaluation.
If at the balance sheet date there is any indication that an impairment loss
recognised in prior periods for an asset other than goodwill no longer exists,
the recoverable amount is reassessed and the asset is reflected at the recoverable
amount.
Property, plant and equipment
Property, plant and equipment are stated at cost less the accumulated depreciation
on the same. Depreciation is charged on a straight line basis over the estimated
useful lives on the cost of the assets less their residual value. The estimated
useful lives are as follows:
Freehold buildings - 25 Years
Office equipment - 5 Years
Plant and equipment - 6 to 7 Years
Motor vehicles - 5 Years
Residual values are re-assessed annually.
Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of
inventories are valued using the weighted average price method.
Accounting for income taxes
Current income tax assets and / or liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting period,
that are unpaid at the balance sheet date. They are calculated according to the
tax rates and tax laws applicable to the fiscal periods to which they relate,
based on the taxable profit for the year.
Deferred tax is recognised on all temporary differences. This involves comparison
of the carrying amount of assets and liabilities in the consolidated financial
statements with their respective tax bases. Deferred tax liabilities are always
provided for in full. Deferred tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to the period when asset is
realised or the liability is settled, based on tax rates (tax laws) that have been
enacted or substantially enacted by the balance sheet date. All changes in deferred
tax assets or liabilities are recognised as a component of tax expense in the
income statement.
Tax losses available to be carried forward as well as other income tax credits to
the Group are assessed for recognition as deferred tax assets. Deferred tax assets
are only recognised to the extent that it is probable that future taxable profits
will be available against which the asset can be recognised and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original
maturity of three months or less. Bank overdrafts that are repayable on demand and
form an integral part of the Group's cash management are included as a component
of cash.
Employee benefits
The Group operates a defined contribution pension scheme whereby contributions are
made to individual employee pension plans of certain employees. These costs are
charged against profits in respect of the accounting period in which they are paid.
Indian Gratuity costs, which represent a form of long term service benefits are
accrued based on actuarial valuation at the balance sheet date, carried out by an
independent actuary.
Leased assets
Payments made under operating leases are charged to the profit and loss account
on a straight line basis over the period of the lease.
Foreign currencies
The functional currency for these financial statements is GB sterling (#).
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign currencies
are translated at the rates of exchange ruling at the balance sheet date. Foreign
exchange differences arising on translation are recognised in profit or loss.
Non monetary assets and liabilities that are measured in terms of historical cost
in a foreign entity are translated using the exchange rate at the date of the
transaction.
All assets and liabilities in the financial statements of foreign subsidiaries are
translated at the closing rate at the balance sheet date. The results of foreign
operations have been converted into Group's reporting currency at the actual rates
over the reporting period and the exchange differences arising have been taken to
translation reserve, a component of equity. The exchange differences arising from
re-translation of the net investments in subsidiaries are directly taken to
translation reserve. All other exchange differences are dealt with through the
income statement.
Research and development expenditure
Expenditure on development activities is capitalised if the product or process is
technically and commercially feasible, the costs are separately identifiable and
the Group has sufficient resources to complete development. Capitalised development
costs are stated at cost less accumulated amortisation and impairment losses. All
other research and development expenditure is written off to the income statement
in the period in which it is incurred.
Share options
For all employee share options granted after 7 November 2002 and vesting on or
after 1 January 2005, an expense is recognised in the income statement with a
corresponding credit to equity. The equity share based payment is measured at the
fair value at the grant date using the binomial lattice method. If vesting periods
or other vesting conditions apply, the expense is allocated over the vesting
period, based on the best available estimate of the number of share options
expected to vest.
Legal and other disputes
Provision is made where a reliable estimate can be made of the likely outcome of
legal or other disputes against the Group. In addition, provision is made for
legal and other expenses arising from claims received or other disputes. No
provision is made for other possible claims or where an obligation exists but it
is not possible to make a reliable estimate. Costs associated with claims made by
the Group against third party are charged to the profit and loss account as they
are incurred.
Dividends
Dividends proposed or declared after the balance sheet dates are not recognised
as a liability. However the amounts of such dividends are disclosed in the notes
to the financial statements.
Segmental reporting
A segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment) or in providing products or
services within a particular economic environment (geographic segment) which is
subject to risks and rewards that are different from those of other segments.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual terms of the instrument.
- Trade receivables
Trade receivables do not carry any interest and are stated at their nominal
amounts as reduced to equal the estimated present value of the future cash flows.
- Bank borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds received,
net of direct issue costs. Finance charges including premiums payable on settlement
or redemption and direct issue costs, are accounted for on an accruals basis to
the profit and loss account using the effective interest method and are added to
the carrying value of instrument to the extent that they are not settled in the
period in which they arise.
- Trade payables
Trade payables are not interest bearing and are stated at their nominal value.
- Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs.
2. Segmental Reporting
Segment information is presented in the consolidated interim financial statements
in respect of the Group's business segments, which are the primary basis of segment
reporting. The business segment-reporting format reflects the Group's management
and internal reporting structure.
Primary - Business segments
The Group is organised into five major business units - Retail Brands, Retail
Generics, Hospitals, Direct to Consumer Western Europe (D2C WE) and, Direct to
Consumer North America (D2C NA). Certain small business units like Country
Distributors, Global Services and Management services constitute the other segments.
These units form the basis for the Group's reporting of primary segment information.
Segment results
Segment results include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis.
Unallocated segment income and expenses
Unallocated segment income comprises interest income and miscellaneous receipts
not directly attributable to any particular segment. Unallocated segment expenditure
represents interest on loans and provision for income taxes, which cannot be
directly attributed to any segment.
Primary segment disclosure - Business segments
6 months ended Retail Retail Other
30 September 2005 Brands Generics Hospitals D2C WE D2C NA Segments Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
External sales 16,098 5,050 5,618 7,165 3,422 2,507 39,860
-----------------------------------------------------------------------------------------------------
Total revenue 16,098 5,050 5,618 7,165 3,422 2,507 39,860
-----------------------------------------------------------------------------------------------------
Result
Segment result 2,489 161 1,088 516 (588) (509) 3,157
-----------------------------------------------------------------------------------------------------
Operating profit 3,157
Interest expense (1)
Interest income 83
Income taxes (1,978)
-----------------------------------------------------------------------------------------------------
Profit for the period 1,261
=====================================================================================================
6 months ended Retail Retail Other
30 September 2004 Brands Generics Hospitals D2C WE D2C NA Segments Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
External sales 14,481 4,216 6,247 8,120 3,523 2,661 39,248
-----------------------------------------------------------------------------------------------------
Total revenue 14,481 4,216 6,247 8,120 3,523 2,661 39,248
-----------------------------------------------------------------------------------------------------
Result
Segment result 1,817 725 450 799 (4,843) 170 (882)
-----------------------------------------------------------------------------------------------------
Operating profit (882)
Interest expense (105)
Interest income 3
Income taxes (1,164)
-----------------------------------------------------------------------------------------------------
Profit for the period (2,148)
=====================================================================================================
Year ended Retail Retail Other
31 March 2005 Brands Generics Hospitals D2C WE D2C NA Segments Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
External sales 30,898 9,653 12,244 15,929 6,668 5,375 80,767
-----------------------------------------------------------------------------------------------------
Total revenue 30,898 9,653 12,244 15,929 6,668 5,375 80,767
-----------------------------------------------------------------------------------------------------
Result
Segment result 5,640 1,161 3,013 281 (5,023) (251) 4,821
-----------------------------------------------------------------------------------------------------
Operating profit 4,821
Interest expense (358)
Interest income 40
Income taxes (4,032)
-----------------------------------------------------------------------------------------------------
Profit for the period 471
=====================================================================================================
3. Tax on profit on ordinary activities
Tax on profits on ordinary activities is calculated at the standard rate of
corporation tax in the United Kingdom of 30%.
The taxation charge of #2.0 million (2004:#1.2 million) represents an effective
tax rate of 61.7%(2004:118.3%)
4. Equity dividends
The amount of #1.68 million pertaining to the final dividend proposed as at 31
March, 2005 has been paid on 3 August 2005.
The Directors have declared an interim dividend of 1.70 pence per share for
2005/06 (2004/05 interim dividend: 1.50 pence, 2004/05 final dividend: 4.50 pence).
The dividend will be paid on 13 January 2006 to those shareholders on the register
on 9 December 2005.
5. Earnings per share
The earnings are based on the earnings attributable to ordinary shareholders and
the weighted average number of shares is based on ordinary shares outstanding
during the period.
Basic Diluted
earnings earnings
per share per share
6 months to 30 September 2005 earnings (#'000) 1,261 1,261
Weighted average number of share (000) 37,084 37,360
Per share amount (pence) 3.4 3.4
=====================================================================
6 months to 30 September 2004 earnings (#'000) (2,148) (2,148)
Weighted average number of share (000) 37,029 37,223
Per share amount (pence) (5.8) (5.8)
=====================================================================
Year to 31 March 2005 earnings (#'000) 471 471
Weighted average number of share (000) 37,043 37,239
Per share amount (pence) 1.3 1.3
=====================================================================
6. Intangible fixed assets
Brand names
know-how
licences and
trade marks Goodwill Total
#'000 #'000 #'000
Cost
At 1 April 2005 64,358 26,049 90,407
Differences on exchange (3) 950 947
--------------------------------------------------------------------------------
At 30 September 2005 64,355 26,999 91,354
--------------------------------------------------------------------------------
Amortisation and impairment
At 1 April 2005 37,570 14,742 52,312
Provided for the period 3,000 - 3,000
Differences on exchange (3) 768 765
Impairment losses - 336 336
--------------------------------------------------------------------------------
At 30 September 2005 40,567 15,846 56,413
--------------------------------------------------------------------------------
Net book amount
--------------------------------------------------------------------------------
At 30 September 2005 23,788 11,153 34,941
--------------------------------------------------------------------------------
Net book amount
--------------------------------------------------------------------------------
At 30 September 2004 29,872 11,495 41,367
--------------------------------------------------------------------------------
Net book amount
--------------------------------------------------------------------------------
At 31 March 2005 26,789 11,308 38,097
================================================================================
An impairment provision of #335,841 has been recognised for the US business as at
30 September 2005.
The Board had reviewed the carrying value of all of the intangible assets and
based on the performance of the US business it recognised an impairment provision
of #4,606,880 as at 30 September, 2004.
The performance of Regina business has also been reviewed and an impairment
provision of #123,326 has been made to comply with IFRS as at 31 March, 2005.
7. Share capital
During the period, 31,976 shares were issued under the unapproved employee share
option scheme and employee share save scheme. The difference between the total
consideration of #80,273 and nominal value of #1,599 has been credited to share
premium account.
8. Contingent liabilities
Indemnities and guarantees
At 30 September 2005, the Company had undertaken to provide support to certain
subsidiary undertakings.
There is a contingent liability in respect of bank borrowings of all the companies
within the Group which are secured by an inter company cross guarantee. The
aggregate Group liability at 30 September 2005 amounted to #nil
(30 September 2004: #2,250,000, 31 March 2005 #nil).
The Group has given indemnities in respect of advance payments, deferred purchase
consideration and import duty guarantees issued on its behalf in the normal course
of business. The indemnities given at 30 September 2005 were #410,496
(30 September 2004: #720,300, 31 March 2005:#417,383).
Irish operations
On 28 November 2001 the Group acquired the sales, marketing and distribution rights
for the Antigen brand from Antigen Holdings Limited. The companies and assets were
acquired at an estimated cost of #9.4 million. The estimated consideration was to
be settled in two parts, firstly by the payment of #5.2 million and secondly by
an obligation to discharge the scheme of arrangement liabilities of the acquired
Antigen companies. The Directors obtained legal opinion that the Group's exposure
to the debts covered by the scheme was restricted to the debts borne by the
companies it acquired.
On 29 October 2002, Miza Ireland Limited and each of its Irish subsidiaries,
parties to the wider scheme of arrangement, were placed into examinership. During
2004 the liquidator of Miza Ireland Limited claimed a sum of Euro20.8 million although
no grounds for the claim have been specified in detail. Liability for the claim has
been denied. On 26 October 2005, the liquidator, through his solicitors, served
court proceedings in the matter. The Directors have received legal opinion that
no basis for claim has been presented by the liquidator which could result in a
liability on the part of the company and that the subsidiary concerned has grounds
for defending the claim.
Serious Fraud Office (SFO) Investigation
On 10 April 2002 the Group's premises and those of the Chief Executive were visited
by the SFO and certain documentation taken away. A press statement issued by the
SFO stated that its operations formed part of an investigation into suspected
conspiracy to defraud the National Health Service (NHS) concerning the prices
charged for penicillin based antibiotics and Warfarin between 1 January 1996 and
31 December 2000.
The Directors do not believe the Group has acted in an unlawful or improper manner,
nor has it at any time conspired to defraud the NHS and no provision has been made
accordingly. Two of the Company Directors - Ajit Patel and Kirti Patel were
interviewed by the SFO and the company continues to provide co-operation in the
conduct of the enquiry. Unless and until any formal charges are made against the
Group, its maximum potential exposure under relevant legislation for the alleged
offences cannot be quantified. Legal and professional costs in this matter are
expensed as incurred.
Department of Health (DoH) and related claims
On 20 December 2002, the DoH issued a legal claim against the Group and four other
companies (Norton Healthcare Limited, Norton Pharmaceuticals Limited, Kent
Pharmaceuticals Limited and Regent GM Laboratories Limited) amounting to
#28.6 million for alleged anti-competitive practices involving the fixing of
selling prices and controlling the market and production of Warfarin between
January 1997 and September 2000.
The Directors believe the Group is free from wrong-doing in respect of these
allegations. A defence has been filed. Similar claims have also been received from
the Scottish Health Authorities and the Department of Health and Social Services
and Public Safety for Northern Ireland claiming damages for around #3.3 million
and #1.0 million respectively. The company vigorously denies any liability for
these claims. The expected legal and professional costs for this action have been
accrued.
US operations
Changes Inc, which was acquired by Goldshield from Twinlabs Inc, has been named
in a legal action brought by the estate of a deceased customer of Twinlabs Inc
for a sum of around $8 million. The action relates to a period prior to the
acquisition of Changes. Goldshield only acquired the assets of Changes Inc. The
Directors have received US legal advice to the effect that the prospects of success
against Changes are remote.
There were no other contingent liabilities at 30 September 2005, 31 March 2005
or 30 September 2004.
9. Preparation of Interim Statements
The interim statement is unaudited but has been reviewed by the auditors and their
report is set out on page 22. The financial information does not constitute
statutory accounts within the meaning of section 240 of the Companies Act.
Statutory accounts for Goldshield Group plc for the year ended 31 March 2005 on
which the auditors gave an unqualified report have been delivered to the Registrar
of Companies.
10. Approval of Interim Statement
The interim statement was approved by the Board of Directors on 28 November 2005.
Copies of this statement will be available to members of the public, free of charge,
from the Company at NLA Tower, 12-16 Addiscombe Road, Croydon, Surrey, CRO OXT.
11. Explanation of transition to IFRS
As stated in the note 1 of the accounting policies, these are the Group's first
IFRS condensed consolidated interim financial statements for part of the period
covered by the first IFRS annual consolidated financial statements, prepared in
accordance with IFRS. The accounting policies as stated, in note 1 have been
consistently applied to all the periods presented.
IFRS 1 requires full retrospective applications of all applicable accounting
standards, but exemptions are permitted in specific areas. The Group has elected
to avail of the exemptions pertaining to Business combinations, Share - based
payment transactions and recognition of cumulative translation differences.
An explanation of how the transition from UK GAAP to IFRS has affected the Group's
financial position, financial performance and cash flows is set out in the
accompanying notes:
Reconciliation of equity for the six months ended 30 September 2005
Note 1 April 2004 30 September 2004 31 March 2005
Effect of Effect of Effect of
Previous transition IFRS Previous transition IFRS Previous transition IFRS
GAAP to IFRS GAAP to IFRS GAAP to IFRS
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Assets
Goodwill a,b 21,456 (5,674) 15,782 15,864 (4,369) 11,495 14,155 (2,847) 11,308
Other intangible assets b 27,300 5,674 32,974 24,937 4,935 29,872 22,597 4,192 26,789
Property, plant and
equipment 1,333 - 1,333 1,476 - 1,476 1,118 - 1,118
Deferred tax assets f 240 10 250 240 18 258 689 152 841
-----------------------------------------------------------------------------------------------------------------------
Total non-current assets 50,329 10 50,339 42,517 584 43,101 38,559 1,497 40,056
-----------------------------------------------------------------------------------------------------------------------
Inventories 13,991 - 13,991 13,575 - 13,575 11,301 - 11,301
Trade and other receivables 13,426 - 13,426 13,459 - 13,459 11,916 - 11,916
Cash and cash equivalents 186 - 186 1,286 - 1,286 6,168 - 6,168
-----------------------------------------------------------------------------------------------------------------------
Total current assets 27,603 - 27,603 28,320 - 28,320 29,385 - 29,385
-----------------------------------------------------------------------------------------------------------------------
Total assets 77,932 10 77,942 70,837 584 71,421 67,944 1,497 69,441
=======================================================================================================================
Equity
Share capital 1,851 - 1,851 1,852 - 1,852 1,854 - 1,854
Share premium 21,234 - 21,234 21,285 - 21,285 21,359 - 21,359
Translation reserve e - - - - 291 291 - (400) (400)
Retained earnings 20,254 935 21,189 17,294 1,687 18,981 16,805 3,565 20,370
-----------------------------------------------------------------------------------------------------------------------
Total equity attributable
to equity of parent 43,339 935 44,274 40,431 1,978 42,409 40,018 3,165 43,183
Minority interest 106 - 106 106 - 106 106 - 106
-----------------------------------------------------------------------------------------------------------------------
Total equity 43,445 935 44,380 40,537 1,978 42,515 40,124 3,165 43,289
-----------------------------------------------------------------------------------------------------------------------
Liabilities
Deferred tax liabilities g 829 - 829 2,174 87 2,261 2,639 - 2,639
-----------------------------------------------------------------------------------------------------------------------
Total non-current liabilities 829 - 829 2,174 87 2,261 2,639 - 2,639
-----------------------------------------------------------------------------------------------------------------------
Bank loan 5,500 - 5,500 2,250 - 2,250 - - -
Trade and other payables 17,959 - 17,959 18,570 (1,481) 17,089 17,079 - 17,079
Other liabilities d 4,106 (925) 3,181 3,755 - 3,755 4,663 (1,668) 2,995
Current tax liabilities 6,093 - 6,093 3,551 - 3,551 3,439 - 3,439
-----------------------------------------------------------------------------------------------------------------------
Total current liabilities 33,658 (925) 32,733 28,126 (1,481) 26,645 25,181 (1,668) 23,513
-----------------------------------------------------------------------------------------------------------------------
Total liabilities 34,487 (925) 33,562 30,300 (1,394) 28,906 27,820 (1,668) 26,152
-----------------------------------------------------------------------------------------------------------------------
Total equity and liabilities 77,932 10 77,942 70,837 584 71,421 67,944 1,497 69,441
=======================================================================================================================
Note 30 September 31 March
2004 2005
Effect of Effect of
Previous transition IFRS Previous transition IFRS
GAAP to IFRS GAAP to IFRS
#'000 #'000 #'000 #'000 #'000 #'000
Reconciliation of Profit & Loss
Revenue 39,379 (131) 39,248 80,807 (40) 80,767
Cost of sales (13,983) 88 (13,895) (28,959) 12 (28,947)
------------------------------------------------------------------------------------------------------
Gross profit 25,396 (43) 25,353 51,848 (28) 51,820
------------------------------------------------------------------------------------------------------
Distribution expenses (2,842) 16 (2,826) (3,824) - (3,824)
Impairment losses a (4,000) (607) (4,607) (3,830) (793) (4,623)
Exceptional legal and
professional costs (378) - (378) (1,004) - (1,004)
Other administrative
expenses a,c,e (19,616) 1,192 (18,424) (39,524) 1,976 (37,548)
------------------------------------------------------------------------------------------------------
Administrative expenses (23,994) 585 (23,409) (44,358) 1,183 (43,175)
------------------------------------------------------------------------------------------------------
Operating profit (1,440) 558 (882) 3,666 1,155 4,821
Net Interest (102) - (102) (320) 2 (318)
------------------------------------------------------------------------------------------------------
Profit before tax (1,542) 558 (984) 3,346 1,157 4,503
Income tax expense f (1,175) 11 (1,164) (4,057) 25 (4,032)
------------------------------------------------------------------------------------------------------
Profit after tax (2,717) 569 (2,148) (711) 1,182 471
======================================================================================================
Attributable to shareholders
of parent (2,717) - (2,148) (711) - 471
a) Under UK GAAP goodwill arising on business combinations was amortised on a
straight - line basis over its estimated economic life which ranged between seven
and ten years. Under IFRS Goodwill is tested for impairment annually or more
frequently if events or changes in circumstances indicate that it might be impaired,
and not amortised. The Group has elected not to apply IFRS 3 retrospectively to
business combinations prior to IFRS adoption. The effect of the above adjustments
is to add back the amortisation charge (administrative expenses) by #563,231 as
on 30 September 2004 and by #1,342,329 as on 31 March 2005. As a result of the
above the carrying value of Goodwill is increased by #565,992 as on 30 September
2004 and by #1,344,004 as on 31 March 2005. The difference is because of conversion
of results at the average exchange rate and balance sheet items at closing rate.
b) Licenses related to acquired pharmaceutical products categorised as Goodwill
under UK GAAP have been reclassified and transferred to Brand Names, know-how,
Licenses and Trademarks (Other intangibles) there-by increasing the carrying value
of Brand names, Licenses and Trademarks by and correspondingly reducing the carrying
value of Goodwill by #5,675,274 as on 1 April 2004, The effect for 30 September 2004
and 31 March 2005 is reclassification of amortisation by #740,509 and #740,444
respectively. This will have no effect on retained earnings.
c) The Group applied IFRS 2- Share Based Payments, to all share options granted
after 7 November 2002 and vesting on or after 1 January 2005. Under UK GAAP, the
Group followed a policy of valuing the options at the difference between exercise
price and the market value at the date of grant and accruing the same over the
period to which the benefit relates. Under IFRS the fair value is estimated by
employing the binomial model. The resultant charges to the profit and loss account
of the respective periods under administrative expenses is #71,587 as on 31 March
2005, #26,792 as on 30 September 2004 and correspondingly an increase in equity
by the same amount.
d) Under UK GAAP, proposed dividends were accrued in the accounting period to
which they related. Under IAS 10, Events after balance sheet date, dividends are
recognised in the accounting period in which they are declared or approved by
shareholders. Under UK GAAP a provision for the dividend made was #1,668,185 as
on 31 March 2005, #555,443 as on 30 September 2004 and #925,443 as on 1 April 2004.
The dividends as on respective closing dates were not declared or approved by the
shareholders and as a result the accrual for dividend is reversed in each respective
periods.
e) Under UK GAAP, the results of foreign operations were translated at the closing
rate of the reporting currency i.e. Sterling Pound. Under IFRS the same is
translated at the average rate over the reporting period. The exchange difference
arising on translation is shown in translation reserve #21,267 (loss) as on
30 September 2004 and #112,751 (loss) as on 31 March 2005.
f) The above changes increased / decreased the deferred tax liability as follows:
1 April 30 September 31 March
2004 2004 2005
# # #
Translation reserve - 87,240 -
------------------------------------------------------------------
The above changes increased the deferred tax asset as follows:
1 April 30 September 31 March
2004 2004 2005
# # #
Translation reserve - - 120,048
Share options 9,827 8,038 21,477
------------------------------------------------------------------
9,827 8,038 141,525
------------------------------------------------------------------
The cumulative effect of the above adjustments on retained earnings are as follows:
Note 1 April 30 September 31 March
2004 2004 2005
#'000 #'000 #'000
Goodwill a - 566 1,345
Dividends d 925 1,481 1,668
Deferred tax (Net) f 10 (69) 152
Translation reserve e - (291) 400
------------------------------------------------------------------
Total 935 1,687 3,565
==================================================================
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FESFUASISEFF
1 Year Goldshield Chart |
1 Month Goldshield Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
