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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Healthcare Ent. | LSE:HCEG | London | Ordinary Share | GB00B6030H73 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 20.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:3212F Healthcare Enterprise Group PLC 17 November 2004 Healthcare Enterprise Group PLC Interim Results for the six months ended 31 August 2004 Acquisition of Crest Medical From Unichem Ltd - A Division of Alliance Unichem plc Interim results for the international healthcare company focused on specialised, high-value products, supply and services in the UK, Europe and the US. Key points * Maiden profit of #0.3 million profit after interest, tax and exceptionals, on turnover of #5.6 million following the company's expansion into UK occupational health and first aid sub-sector where it now has a leadership position * 51% stake in Ebiox and focus on marketing distribution channels * 62% stake in Optiscope Technologies, developer of disposable rigid endoscopes using proprietary technology * Acquisition of First Aid UK Ltd in June this year * Focus on UK, US and EU growth sectors in healthcare Post Period * Announced today: Transaction valued up to #7.5 million acquisition of Crest Medical from Unichem Ltd, a division of Alliance Unichem plc * $10 million contract for use of Ebiox in USA - distribution agreement with Midwest Medical Supply Company LLC * Optiscope Technologies development/manufacturing agreement with Wahl Optoparts GmbH, a division of Jenoptik AG * Acquisition of Distrimatch GmbH - opens Germany and US markets * 1 for 25 share consolidation Stuart Bruck, Chairman, commented: "Healthcare Enterprise Group has come a long way in a short time. It has achieved leadership in several niches in a large and diverse industry and will move forward decisively with its proprietary technologies: Ebiox and Optiscope. These will be followed by other technologies under development. "The next six months will see the company integrating the four occupational healthcare companies which form Safa-IPS Healthcare Ltd and enhanced momentum behind the Ebiox commercialisation plan. In addition the ball is now rolling with regard to Optiscope which, in the directors' belief, could equal the commercial opportunities available to Ebiox." Enquiries: 17 November 2004 Healthcare Enterprise Group PLC 020 7351 7500 Stuart Bruck, Chairman Lyndon Gaborit, Finance Director College Hill 020 7457 2020 Nicholas Nelson Corinna Dorward CHAIRMAN'S STATEMENT Results The first half of the year has been successful in achieving major new milestones including an acquisition to further ensure the Group's position as the dominant operator in the occupational healthcare marketplace. It has also seen significant development of proprietary products from the SafaTec portfolio. Despite absorbing significant integration costs in relation to the occupational healthcare business, plus start up costs in relation to Ebiox and its now established presence on the market, HCEG has for the first time moved into profitability. The Group reported profit after interest, tax and exceptional items of #0.3 on turnover of #5.6m at the interim period. Occupational Healthcare and First Aid Products Safa-IPS Healthcare Ltd The focus in the first half has been on the consolidation of the businesses acquired in late 2003 in the first aid and occupational healthcare sectors. Consolidating these on one site in Warrington, accomplished in October of this year, has further reduced overheads and helped achieve further synergies. During the period, cross selling opportunities were assessed and incorporated into the marketing effort such as the Group's catalogue which now includes over 4,000 product lines - making it the most comprehensive in UK occupational health and first aid. In June 2004 HCEG acquired First Aid UK Limited, a supplier of first aid kits to customers including the NHS, local authority customers and high street retailers, contributing revenues of approximately #2 million per annum. The acquisition further strengthened the Group's market leading position in the niche occupational healthcare sector. Also in Summer, the Group announced its first steps into the German marketplace by appointing Distrimatch GmbH as the distribution partner to Safa-IPS Healthcare Ltd. The agreement, which covers German speaking countries and certain US markets, was kicked off with a supply agreement to Asklepios Kliniken GmbH, one of Germany's largest private hospital chains. Today, the Group has announced the conditional acquisition of Crest Medical Limited a subsidiary of Unichem Ltd., a division of Alliance Unichem plc. Second only to HCEG, Crest Medical is the largest supplier of first aid and medical product supplies to the UK occupational healthcare and first aid market with 40 major customers making up 80% of their #7 million annual sales. HCEG has achieved in a short space of time dominance in this marketplace with the largest share of the UK occupational healthcare sub-sector. Its customer base includes 67 FTSE 100 companies in the UK, and will be enlarged further through the addition of Crest's customer base. Proprietary Technology Ebiox In July 2004, HCEG acquired a further 2% in Ebiox Limited ("Ebiox") giving the Group a majority holding of 51%. Ebiox is a range of proprietary cleansing and decontamination products for use in healthcare and other industries. The Group also holds an option to acquire the remaining share capital of Ebiox. During the period the Ebiox Handrub passed clinical tests carried out by the NHS Hospital Infection Research Laboratory City Hospital, Birmingham which show that the Ebiox Handrub is compliant with EN1500, the EU standard for continental Europe and the UK. HCEG believes that the Ebiox Hand rub is the first non-alcohol based product that is compliant with EU standards and has been developed to be better than alcohol as a hand hygiene solution. The Ebiox non-alcohol Hand rub decontaminates hands without drying or irritating the skin, and has been specifically designed to be user-friendly to encourage more hand cleaning than the existing washing protocol achieves. During the period Ebiox achieved US Environment Protection Agency approval for a range of five Ebiox decontamination products including Neozyme, Ultra P, Ultra L, RDA and SSC. These products are directed at the surgical instrument cleaning market. Through its agreement with major UK distributor to the NHS, Vernon Carus, initial sales have been secured and Ebiox products are being supplied to 50 NHS hospitals in the UK. Distribution agreements have been secured with Fannins Healthcare in Ireland, Norse Crown in Malaysia and Thai Gauze in Thailand during the period. Earlier this month. the Group announced an agreement with Midwest Medical Supply Company, LLC of St. Louis Missouri ("MMS"), to supply its Ebiox range of products into the $3 billion industrial clean room marketplace. The agreement gives MMS the exclusive right to sell a variety of Ebiox products to the industrial clean room market in the United States, provided that such sales aggregate $10 million within the first year of the agreement. MMS, which reported group sales in 2003 of $150 million, is a significant regional distributor to the US healthcare industry. Acquisition of Distrimatch Concurrent with the execution of the MMS transaction, HCEG has agreed to acquire the remaining shares of Distrimatch GmbH for a total maximum consideration of approximately Euro1 million to be paid in a combination of conversion of a debt facility and shares of HCEG, and linked to a performance related earn out. Optiscope In July 2004 HCEG announced that the Group had increased its stake in Optiscope Technologies Ltd to 62%, giving it a controlling interest in this developer of disposable rigid endoscopes using proprietary technology. HCEG believes that, as the only disposable endoscope in the market, Optiscope has significant advantages over endoscopes currently in use, which will underpin the adoption of the product throughout hospitals and clinics worldwide. HCEG is already securing Optiscope's production and distribution channels and earlier this month announced an agreement with Wahl Optoparts GmbH, a division of JENOPTIKS AG, for the development and manufacture of Optiscope. JENOPTIKS AG is a world leader in photonics technologies operating out of twenty countries with group sales of Euro3 billion. It is thought that the partnership with Wahl Optoparts will accelerate time to market for the finished product by nearly a year. HCEG now anticipates that a commercial product will be available for FDA inspection in 2005. Outlook Healthcare Enterprise Group has come a long way in a short time. It has achieved leadership in a niche but large and diverse industry and moved forward decisively with its proprietary technologies: Ebiox and Optiscope. These will be followed by other pipeline products from our Safatec portfolio, such as Bio-Silk wound dressing and Elisha medical airway devices and other products which HCEG is evaluating. The next six months will see the company integrating the four occupational healthcare companies which form Safa-IPS Healthcare Ltd and enhanced momentum behind the Ebiox commercialisation plan. In addition, the ball is now rolling with regard to Optiscope which, in the directors' belief, could equal the commercial opportunities available to Ebiox. 1 for 25 share consolidation HCEG proposes to seek approval from shareholders to consolidate its share capital on the basis of a 1 new ordinary share for every 25 ordinary shares held. It is currently anticipated that the meeting to approve this will take place before the end of the Group's financial year. Group profit and loss account for 6 months ended 31st August 2004 6 months 6 months to 6 months to 6 months 6 months 6 months to 6 months to 31 31 August 31 August to 31 to 31 31 August to 31 August 2004 2004 August August 2003 Goodwill August 2004 Exceptional 2004 2003 Amortisation 2003 Continuing items Goodwill Total Continuing #'000 Total operations Amortisation Operations operations Operations #'000 #'000 #'000 #'000 #'000 #'000 Turnover Continuing operations 5,264 - - 5,264 - - - Acquisitions 303 - - 303 - - - 5,567 - - 5,567 - - - Cost of sales (2,916) - - (2,916) - - - Gross profit 2,651 - - 2,651 - - - Administrative expenses (2,332) 116 - (2,216) (438) (849) (1,287) Continuing operations 304 116 - 419 (438) (849) (1,287) Acquisitions 16 - - 16 - - - Group operating profit 319 116 - 435 (438) (849) (1,287) Share of operating loss in associated undertakings (8) - - (8) - - - Total operating profit: Group and share of associates 311 116 - 427 (438) (849) (1,287) Profit on sale of fixed assets - 248 - 248 - - - Reorganisation costs - (247) - (247) - - - Net interest payable (66) - - (66) 3 - 3 Profit on ordinary activities 245 117 - 362 (435) (849) (1,284) before taxation Taxation on ordinary activities - - - - - - - Profit on ordinary activities 245 117 - 362 (435) (849) (1,284) after taxation Equity minority interests 8 - - 8 - - - Retained profit / (loss) for the 253 117 - 371 (435) (849) (1,284) financial year Earnings per ordinary share Adjusted - Before goodwill 0.01p - - 0.01p (0.03)p - (0.03)p amortisation Basic - After goodwill - - - 0.01 - - (0.1)p amortisation Group profit and loss account for 12 months ended 29th February 2004 12 months to 12 months to 12 months to 12 months to 29 February 29 February 29 February 29 February 2004 2004 2004 Goodwill 2004 Continuing Exceptional Amortisation Total operations items Operations #'000 #'000 #'000 #'000 Turnover Continuing operations 2,999 - - 2,999 Acquisitions - - - - 2,999 - - 2,999 Cost of sales (1,635) - - (1,635) Gross profit 1,364 - - 1,364 Administrative expenses (2,077) (891) (1,085) (4,053) Continuing operations (713) (891) (1,085) (2,689) Acquisitions - - - - Group operating profit (713) (891) (1,085) (2,689) Share of operating loss in associated undertakings (5) - - (5) Total operating profit: Group and share of associates (718) (891) (1,085) (2,694) Profit on sale of fixed assets - - - - Reorganisation costs - (148) - (148) Net interest payable (74) - - (74) Profit on ordinary activities before taxation (792) (1,039) (1,085) (2,916) Taxation on ordinary activities (92) 20 - (72) Profit on ordinary activities after taxation (884) (1,019) (1,085) (2,988) Equity minority interests 12 - - 12 Retained profit / (loss) for the financial year (872) (1,019) (1,085) (2,976) Earnings per ordinary share Adjusted - Before goodwill amortisation (0.05)p - - (0.05)p Basic - After goodwill amortisation - - - (0.17)p Group balance sheet at 31st August 2004 31st August 31st August 29th February 2004 2003 2004 #'000 #'000 #'000 Fixed assets Intangible assets 16,539 - 14,676 Tangible assets 322 10 960 Investment in associates 23 - 463 Other investments 120 40 52 17,004 50 16,151 Current assets Stocks 1,292 - 866 Debtors: due within one year 3,073 437 2,194 Current asset investments - - 4 Cash at bank and in hand 1,112 191 2,339 5,478 628 5,403 Creditors: amounts falling due within one year (4,935) (433) (4,294) Net current assets 543 195 1,109 Total assets less current liabilities 17,547 245 17,260 Creditors: amounts falling due after more than one year (1,250) - (1,516) Provisions for liabilities and charges - - (29) Net assets 16,297 245 15,715 Capital and reserves Called up share capital 3,684 2,121 3,558 Shares to be allotted 629 - 2,258 Warrants issued 358 - 364 Share premium account 16,130 1,967 14,219 Profit and loss account (2,981) (1,550) (3,291) Merger reserve (2,293) (2,293) (2,293) Other reserve 771 892 Shareholders' funds (including non-equity interests) 16,299 245 15,707 Equity minority interests (2) - 8 Capital employed 16,297 245 15,715 Group cash flow statement at 31st August 2004 31st August 31st August 29th February 2004 2003 2004 #'000 #'000 #'000 Net cash outflow from operating activities (695) (735) (1,323) Returns on investments and servicing of finance Interest received - 3 17 Interest paid (66) - (326) (66) 3 (309) UK Corporation tax paid - - (1) Capital expenditure and financial investment Purchase of tangible fixed assets (129) (1) (47) Sale of tangible fixed assets 1,030 - - Loan to associated undertakings - (50) Other loans - - (16) Purchase of fixed asset investments (72) (9) (20) 829 (10) (133) Acquisitions and disposals Purchase of subsidiary undertakings (1,084) - (9,091) Net cash acquired with subsidiaries 87 671 446 Purchase of interest in associated undertakings - - (21) (997) 671 (8,666) Cash outflow before management of liquid resources and financing (928) (71) (10,432) Financing Issue of ordinary shares 73 56 10,681 Increase / (decrease) in debt (372) (1) 1,883 (299) 55 12,564 Increase/(decrease) in cash in the period (1,227) (16) 2,132 Notes to the interim financial statements 1. Form of statements These financial statements do not constitute statutory accounts within the meaning of the Companies Act 1985 and are unaudited. The figures for the year to 29th February, 2004 have been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and contain an unqualified audit report. 2. Accounting policies The interim accounts have been prepared on a basis which is consistent with the accounting policies adopted for the year ended 29 February 2004 updated for new accounting standards applicable to the year ended 28 February 2005 with the exception of goodwill amortisation. The group's previous practice was to capitalise goodwill arising on acquisitions and amortise it over its estimated useful life, up to a maximum of 20 years. The Board is required to consider annually the useful economic life of goodwill. Having considered the goodwill arising on the previous acquisitions, the Board believes that the remaining goodwill has an indefinite life. Accordingly, goodwill is no longer subject to routine amortisation but will be reviewed annually for impairment. In the annual statutory accounts this will be a departure from paragraph 21 of Schedule 4 to the Companies Act, but is necessary so that these statutory accounts give a true and fair view. The Board has also considered the impact this change in approach would have had on the results for the six months to 31 August 2004. Had goodwill been amortised on the basis previously adopted the profit of #362,000 on ordinary activities would have been reduced by #373,000. In the case of the year ended 29 February 2004, had the new treatment been adopted the loss on ordinary activities would have been reduced by #245,000. 3. Earnings per share Earnings per share for the six months has been calculated using the profit attributable to ordinary shareholders before and after exceptional items and (in 2003 only) amortisation of #245,000 (2003: loss #435,000) and #362,000 (2003: loss #1,284,000) respectively divided by the weighted average number of shares in issue during that period of 2.890 bln (2003: 1.304 bil). 4. Acquisitions First Aid UK: First Aid UK was acquired on 12th July 2004 for a total consideration of #1.3m. Provisional goodwill of #1.1m was acquired. Ebiox Limited: Further equity investment in this company on 23rd July 2004 has increased total shareholding to 51%, reclassifying this business from an associate company to a subsidiary. Total consideration for this subsidiary was #0.4m resulting in provisional goodwill of #0.8m. This information is provided by RNS The company news service from the London Stock Exchange END IR DDLBFZFBXFBD
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