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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 |
RNS Number:0485O Goldshield Group PLC 3 December 2001 FOR IMMEDIATE RELEASE: 07.00, Monday 3 December 2001 GOLDSHIELD GROUP PLC Interim Results for the six months ended 30 September 2001 Goldshield Group plc, the profitable, marketing-led, emerging British pharmaceutical company, has pleasure in reporting its interim results for the six months ended 30 September 2001. HIGHLIGHTS - Turnover up by 54% to #50m (2000: #32.6) - Profit before tax increased by 34% to #7.3m (2000: #5.5m) - Diluted earnings per share up 33% to 12.5p (2000: 9.4p) - Interim dividend 1.45p per share (2000: 1.1p per share) - Sales in US in line with internal expectations: - Some disruption being experienced in 2H 2002 in US business following September 11 attacks and the anthrax scares - Final #4 million payment made to GlaxoSmithKline plc for product licences and trademarks - Successful US acquisitions of both products and distributor lists within US, Canada and UK - Following the period under review the strengthening of injectable portfolio through acquisition of Antigen assets - announced post period under review Commenting on the results, Ajit Patel, Executive Chairman of Goldshield Group, said: " The first half of this year has been excellent with progress made in product development - operational consolidations in both US and UK head office has set the tone for further growth in years to come. Despite the unexpected events in the US, which we expect to temporarily slow market development until the anthrax situation is resolved, the recent Antigen acquisition will keep the Group on track to deliver another successful set of results for the year." For further information, please contact: Goldshield Group plc Tel on 03.12.01: +44 (0) 20 7466 5000 Ajit Patel, Executive Chairman Thereafter: +44 (0) 20 8649 8500 Rakesh Patel, Finance Director Buchanan Communications Tel: +44 (0) 20 7466 5000 Nicola How / Louise Bolton Chairman's Statement Overview The Goldshield Group sells a large range of healthcare products as well as branded and generic pharmaceuticals to a well-defined customer base using a range of direct to consumer techniques. Today the Group announces another set of strong results for the six months ended 30 September 2001. Sales in all the geographic regions across both the pharmaceutical and the healthcare products have continued to perform in line with expectations. Group turnover has increased by 54% to #50.0 million (30 Sep. 2000: #32.6 million) and profit before tax by 34% to #7.3 million (30 Sep. 2000: #5.5 million). Diluted earnings per share have increased by 33% to 12.5 pence (30 Sept. 2000: 9.4 pence) enabling Goldshield to continue its payment of an interim dividend. A dividend of 1.45 pence (30 Sep. 2000: 1.1 pence) is due to be paid on 21 January 2002 to those shareholders on the Register on 14 December 2001. The increase in turnover seen above is due to the impact of acquisitions, including that of Changes International of the US acquired earlier this year, and increases in pharmaceutical sales through dispensing doctors, of generics and within Europe. Sales of the pharmaceutical products grew by 21.6% to #19.2 million (30 Sep. 2000: #15.8 million) while sales in the healthcare division grew even more strongly to #30.8 million (30 Sep. 2000: #16.8 million). Sales in Western Europe accounted for approximately 65% of total sales and were split equally between pharmaceutical products and healthcare at #16.9 million and #15.7 million respectively. Elsewhere in the world, the USA and Canada saw a growth of 717% in sales of healthcare products with turnover for the period being # 14.8 million (30 Sep. 2000: #1.8 million). Revenue received from sales to the Rest of the World was only slightly ahead of last year, reflecting the Management's current focus on expansion within the world's largest healthcare market, the US. Rest of World sales for the period under review were #2.6 million (30 Sep. 2000: #2.3 million) and made up 5.2% of overall sales. As announced in August this year, Goldshield fulfilled its commitments to GlaxoSmithKline plc with the third and final installment of consideration relating to the acquisition of product licenses and trademarks announced in 1999. The payment of approximately #4 million reflected a reimbursement from GlaxoSmithKline plc of approximately #1.5 million as referred to in the Report and Accounts for the year ended 31 March 2001. Operating Review During the period under review the Group acquired the following significant products and businesses: In April 2001, Goldshield Group plc announced the acquisition from Twinlab Corporation ('Twinlab') of two operating divisions, Changes International (' Changes') and PR Nutrition ('PR') for a cash consideration of $5 million including stock and tangible assets. Based in Long Island, New York, Twinlab is a nutritional supplement company and hence has products that complement the Goldshield range. Changes develops, markets and sells a range of health products using direct selling methods while PR is a mail order provider of nutritional products for weight loss and sports within the US marketplace. As a result of this acquisitions Goldshield has gained immediate access to both divisions' extensive lists of US, Canadian and UK distributors. After the end of the period under review, Goldshield announced the acquisition of assets from Irish based Antigen Holdings Limited ('Antigen'). Antigen is a privately owned pharmaceutical company which specialises in the production of sterile injectable products. The three subsidiaries and their related assets were acquired for an aggregate consideration of up to #IR12 million (#9.4 million) subject to a post completion audit. Marketing and Sales Review Pharmaceutical Products Goldshield operates in three segments within this sector - branded generic products, niche pharmaceuticals and volume generics. In the UK and Eire the sales and marketing of these products is carried out using a small field based sales force targeted at dispensing doctors, an offshore telemarketing operation based in India and selective mail marketing. Overall sales of pharmaceutical products grew by 21.7% to #19.2 million (30 Sep. 2000 #15.8 million). The increases in sales were as a result of new generic product introductions and earlier acquisitions. Sales within the generics business were #3.0 million. In the UK the dispensing doctor business continues to grow steadily and is currently annualised at around #3.0 million. With new product introductions over the next few months we expect the growth to continue. Despite heavy pricing pressures within the UK generics market our business is growing at about 15% helped by three new product introductions. With several new products coming on line over the next eighteenth months we expect a similar trend. Sales in mainland Europe increased by 52% over the period under review to #2.8 million helped mainly by product acquisitions, while sales in the Rest of the World amounted to #2.6 million - again a significant improvement over the same period last year. With the recent post period end acquisition of Antigen assets we have gained a significant marketing and selling base within the niche hospital injectables market. Antigen markets niche injectable products to the hospital market in the UK and Ireland. It currently holds 115 product licenses in Ireland, 78 in the UK and 129 in international markets, including 20 in Europe. Most of these products are within the areas of anesthesia, pain management, psychiatry and cardiovascular. With such extensive assets, many of which have not been developed commercially, these licences provide considerable growth potential. The UK and Irish market for these group of products is around #70 million and the developing mainland European market is estimated at around #320 million. Over the coming months significant resources will be allocated to gaining market authorisations in Europe for as many existing products as possible, whilst at the same time developing more injectables with the above mentioned therapeutic areas. Healthcare Products Goldshield's healthcare products include analgesics, skincare products and in particular vitamins, minerals, herbal products and other nutritional supplements. Sales of these products have grown by 83% over the period under review to #30.8 million (30 Sep. 2000: #16.8 million). This is predominantly due to sales of our acquired product assets in the US plus the use of new methods to encourage sales in the near-saturated UK market place. UK and Europe Due to the maturing nature of the UK market, in which the Goldshield has an estimated overall market share of above 10% selling exclusively through mail order, the Management has spent considerable time devising ways to stimulate sales growth. This work has been done in parallel with the more usual methods of product advertising and awareness raising through educational promotions. One of the more successful employed has been the development of new combinations of existing products, as well as further extending a product's life, through different drug delivery techniques e.g. a once-a-day sustained release formulation. Additionally, the team at Goldshield has introduced a number of new products to the market, such as a TENS device for pain control for arthritis relief. As a result of imaginative new sales initiatives healthcare sales in the UK and Europe continue to grow by 8.9% compared to the same period last year. North America This region performed in line with Managements' expectations over the period under review. However a short term effect is likely to be seen in the second half of the year due to the horrific events of September 11 and the subsequent anthrax scares throughout the US postal system. Three of the Groups' US marketing offices are based in Florida, Maryland and New Jersey - the only states affected by anthrax problems - causing severe problems with inbound and outbound mail. Goldshield has made a range of acquisitions over the past 18 months which have provided the Group with a broad base of direct marketing operations, ranging from mail order, direct telesales and network marketing. The latest, Changes International and PR Nutrition, were made in April 2001 from Twinlab Corporation of the US. There was strong growth in US sales from #1.8 million to #14.8 million led by the two latest acquisitions. The operating profit before goodwill amortisation was up to #0.8 million The last few months have been spent on consolidating most of the infrastructure into Florida and hence there has been a significant level of integration costs. In October 2001 most of the transaction was completed and new marketing, sales and financial systems, linked to our central systems in London, were installed. As a result we would expect efficiencies to start impacting our profit and loss from the last quarter this financial year. However, US healthcare sales in the second half are expected to be lower than those in the first as Changes International was acquires with declining sales which we believe will bottom out in December this year. The horrific events of September 11 and the anthrax scares have led to the postponement of several marketing initiatives. Once US consumer confidence is restored, we will resume our efforts to grow sales and profits in this significant healthcare market. We believe that we should at the latest, be in a position to resume marketing initiatives in the second quarter of next calendar year. Product Development We are continuing very satisfactorily with product development projects previously announced. We are currently evaluating new areas of product in - licensing and development to complement the Antigen acquisition and the Board looks forward to announcing these at the end of the year. Cash Flow At 30 September 2001 cash balances were #3.4 million overdrawn (31 Mar.. 2001: #3.4 million credit). Net current liabilities at 30 September 2001 were #2.7 million (31 Mar. 2001 : #4.5 million) of which #3.5 million related to the financing of intangible asset additions. Long term liabilities were #8.1 million (31 Mar. 2001 : #12.2 million) comprising #4.5 million relating to earn-outs payable on the North American acquisitions (31 Mar. 2001 : #9.5 million). The balance of long term liabilities relates to bank loans payable on more than one year. The Directors are confident that all current and future liabilities can be met when they fall due out of the Group's operating cash flow. In addition the Group's bankers have indicated that funds' would be made available in appropriate circumstances. Future Prospects Save for the US businesses, down by around 15%, since September 11 and the anthrax scares, the Board is very satisfied with current trading. Continuing stability in the UK healthcare business, several new pharmaceutical products introductions, the growth of prospects for our current European and International pharmaceutical businesses and the recent acquisition of the injectable business of Antigen should provide sufficient growth prospects to more than offset the temporary difficulties faced in US. Ajit Patel Executive Chairman 30 November 2001 Summarised Consolidated Profit and Loss Account for the six months ended 30 September 2001 Six months Six months Year Ended Ended Ended 30 September 30 September 31 March Notes 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Turnover Continuing operations 40,282 32,547 70,513 Acquisitions 1 9,720 - - 2 50,002 32,547 70,513 Operating profit/(loss) Continuing operations 7,576 5,344 12,421 Acquisitions 1 (131) - - 2 7,445 5,344 12,421 The operating profit is stated after charging the following items: - Research and development expenditure 445 512 1,004 Amortisation of intangible assets 3,906 3,003 6,644 Shares issued at a discount (UITF 17) - 63 124 Net Interest (101) 145 137 Profit on ordinary activities before taxation 7,344 5,489 12,558 Tax on profit on ordinary activities 3 (2,619) (1,950) (4,572) Profit on ordinary activities after taxation 4,725 3,539 7,986 Minority interest (37) - - Profit for the financial period 4,688 3,539 7,986 Equity dividends 4 (533) (398) (1,249) Profit Retained for the period 4,155 3,141 6,737 Earnings per share Basic (pence) 5 12.9 9.8 22.1 Diluted (pence) 5 12.5 9.4 21.2 Dividend per share (pence) 4 1.45 1.10 3.45 Consolidated Balance Sheet as at 30 September 2001 As at As at As at 30 30 31 March September September 2001 2000 2001 Notes (unaudited) (unaudited) (audited) #'000 #'000 #'000 Fixed assets Goodwill 6 27,088 28,780 27,328 Other intangible assets 6 30,914 30,437 32,704 Intangible assets 6 58,002 59,217 60,032 Tangible assets 1,929 1,756 1,674 59,931 60,973 61,706 Current assets Stocks 9,796 6,771 8,201 Debtors 10,443 7,517 7,209 Cash at bank and in hand 2,742 2,535 6,707 22,981 16,823 22,117 Creditors: amounts falling due within one year (25,649) (27,629) (26,576) Net current liabilities (2,668) (10,806) (4,459) Total assets less current liabilities 57,263 50,167 57,247 Creditors: amounts falling due after more than one year (8,091) (9,745) (12,207) Provisions for liabilities and charges (2,582) (2,043) (2,487) 46,590 38,379 42,553 Capital and reserves Share capital 1,837 1,810 1,811 Share premium account 20,931 20,821 20,858 Profit and loss account 23,644 15,748 19,743 Shareholders' funds 46,412 38,379 42,412 Minority interest 178 - 141 Total capital employed 46,590 38,379 42,553 Consolidated Cash Flow Statement for the six months ended 30 September 2001 Six months Six months Year Ended Ended Ended 30 September 30 September 31 March Notes 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Net cash inflow from operating 7 7,786 7,095 17,955 activities Returns on investments and servicing of finance Interest received 101 145 229 Interest paid (202) - (92) Net cash (outflow)/inflow from returns on investments and servicing of financing (101) 145 137 Taxation UK Corporation tax paid (1,665) (145) (2,052) Capital expenditure and financial investment Purchase of intangible fixed assets (6,355) (13,731) (14,329) Purchase of tangible fixed assets (102) (1,545) (248) Proceeds on disposal of tangible fixed - - 4 assets Net cash outflow from capital expenditure and financial investment (6,457) (15,276) (14,573) Acquisitions and disposals Purchase of businesses (5,630) - (8,592) Equity dividends paid (851) (652) (1,050) Proceeds of investment by minority - - 141 interest Net cash outflow before financing (6,918) (8,833) (8,034) Financing New bank loan 3,450 - 3,500 Bank loan payments (596) - (165) Issue of shares 99 15 53 Decrease in cash 9 (3,965) (8,818) (4,646) Statement of Total Recognised Gains and Losses and Reconciliation of Movements in Shareholders' Funds for the six months ended 30 September 2001 Six months Six months Year Ended Ended Ended 30 September 30 September 31 March Notes 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Profit for the financial period 4,688 3,539 7,986 Currency differences on foreign currency net Investments 8 (254) 51 389 Total recognised gains and losses for the period and total gains and losses recognised since last financial statements 4,434 3,590 8,375 Reconciliation of movements in shareholders' funds Six months Six months Year Ended Ended Ended 30 30 31 March September September Notes 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Profit for the financial period 4,688 3,539 7,986 Equity dividends (533) (398) (1,249) Issue of shares 99 15 53 Share option accrued costs - 63 124 Currency difference on foreign currency net Investments 8 (254) 51 389 Net increase in shareholders' funds 4,000 3,270 7,303 Shareholders' funds at 1 April 2001 42,412 35,109 35,109 Shareholders' funds at 30 September 46,412 38,379 42,412 2001 NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Acquisitions Acquisitions in the period comprise the subsidiary businesses acquired in the period, namely Changes and PR Nutrition. 2. Segmental reporting Turnover,profit on ordinary activities before taxation are attributable to the principal activity of the Group. Six months Six months Year ended ended ended 30 September 30 September 31 March 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Turnover by destination: United Kingdom 29,821 26,015 53,098 Western Europe excluding the United 2,772 2,455 5,413 Kingdom North America 14,812 1,763 7,473 Rest of the World 2,597 2,314 4,529 50,002 32,547 70,513 Turnover by origin: United Kingdom 35,190 30,784 63,040 North America 14,812 1,763 7,473 50,002 32,547 70,513 Operating profit/(loss): United Kingdom 7,955 5,263 12,692 North America (510) 81 (271) 7,445 5,344 12,421 3. Tax on profit on ordinary activities The tax charge for the six months has been calculated at an effective rate of 35.7%. 4. Equity dividends The Directors have declared an interim dividend of 1.45 pence per share (2000/ 01 interim dividend: 1.1 pence, 2000/01 final dividend: 2.35 pence). The dividend will be paid on 21 January 2002 to those shareholders on the Register on 14 December 2001. 5. Earnings per share Basic earnings per share Diluted Earnings per share Earnings attributable Dilutive effect to ordinary of securities Adjusted shareholders - share options earnings 6 months to 30 September 2001 Earnings (#000) 4,688 4,688 Weighted average number of shares ('000) 36,471 1,004 37,475 Per Share amount (pence) 12.9 12.5 6 months to 30 September 2000 Earnings (#000) 3,539 3,539 Weighted average number of shares ('000) 36,203 1,381 37,584 Per Share amount (pence) 9.8 9.4 12 months to 31 March 2001 Earnings (#000) 7,986 7,986 Weighted average number of shares ('000) 36,208 1,441 37,649 Per Share amount (pence) 22.1 21.2 6. Intangible fixed assets Brand names Goodwill Total know-how licences and trade marks #'000 #'000 #'000 Cost At 1 April 2001 39,163 32,968 72,131 Additions 330 2,010 2,340 Disposals (100) (43) (143) Differences on exchange - (512) (512) At 30 September 2001 39,393 34,423 73,816 Amortisation At 1 April 2001 6,459 5,640 12,099 Provided for the period 2,040 1,866 3,906 Disposals (20) (9) (29) Differences on exchange - (162) (162) At 30 September 2001 8,479 7,335 15,814 Net book amount At 30 September 2001 30,914 27,088 58,002 Net book amount At 31 March 2001 32,704 27,328 60,032 7. Net cash inflow from operating activities Six months Six months Year Ended Ended Ended 30 30 September September 31 March Notes 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Operating profit 7,445 5,344 12,421 Depreciation 394 125 319 Amortisation 3,906 3,003 6,644 Currency differences on foreign currency net Investments 99 51 398 Profit on disposed of fixed assets - Intangible - - (233) -Tangible - - (4) (Increase) in stocks (491) (1,418) (1,633) (Increase) in debtors (3,234) (1,108) (800) (Decrease)/increase in creditors (333) 1,035 719 Share option accrued costs - 63 124 Net cash inflow from operating 7,786 7,095 17,955 activities 8. Currency differences on foreign currency net investments The #254,000 currency difference on foreign currency net investments relates to the unrealised loss made on translating the assets and liabilities of the US subsidiaries at the period-end date (September 2000:51,000 gain). 9. Reconciliation of net cash flow to movement in net funds Six months Six months Year Ended Ended Ended 30 30 31 March September September Notes 2001 2000 2001 (unaudited) (unaudited) (audited) #'000 #'000 #'000 Decrease in cash for the period (3,965) (8,818) (4,646) Decrease in financing (2,854) - (3,335) Changes in net funds arising from (6,819) (8,818) (7,981) cashflows Net funds at 31 March 2001 3,372 11,353 11,353 Net (debt)/funds at 30 September 2001 (3,447) 2,535 3,372 10. Preparation of interim statements The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The principal accounting policies of the Group are set out in the Group's 2001 annual report and financial statements. The policies have remained unchanged from the previous annual report other than from the implementation of FRS19 and deferred taxation. The effects of these changes have not had a significant impact on the profit for the period or the statement of total recognised gains and losses. The interim statements are unaudited but have been reviewed by the auditors. The comparative figures for the financial year ended 31 March 2001 are based on the Company's statutory accounts for that year and have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The interim statements do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 11. Approval of interim statement The interim statement was approved by the Board of Directors on 30 November 2001. 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, CR0 0XT. Introduction We have been instructed by the company to review the financial information for the six months ended 30 September 2001 which comprise the Summarised Consolidated Profit and Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Statement of Total Recognised Gains and Losses, Reconciliation in Movements in Shareholders Funds and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report including the financial information contained therein is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists primarily of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2001. GRANT THORNTON CHARTERED ACCOUNTANTS LONDON 30 November 2001
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