We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Horizon Discovery Group Plc | LSE:HZD | London | Ordinary Share | GB00BK8FL363 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 184.50 | 184.50 | 185.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMHZD
RNS Number : 3630M
Horizon Discovery Group plc
16 September 2019
RNS
Horizon Discovery Group plc
Results for the Six Months Ended 30 June 2019
Cambridge, UK, 16 September 2019: Horizon Discovery Group plc (LSE: HZD) ("Horizon", "the Group" or "the Company"), a global leader in the application of gene editing and gene modulation technologies, today announces its results for the six months ended 30 June 2019.
Group Financial highlights
-- Reported revenue of GBP28.6m an increase of 13.9% on the prior year (HY18: GBP25.1m) or growth of 8.8% on a constant currency basis(1)
-- Gross margin increased by 5.3 percentage points to 68.5% (HY18: 63.2%)
-- Adjusted EBITDA(1) loss of GBP0.9m(2) (HY18: GBP2.2m loss), including a positive impact of GBP1.3m from the implementation of IFRS 16 Leases
-- Loss after taxation(2) of GBP5.3m for the half year (HY18: GBP7.6m) -- Cash position at 30 June 2019 of GBP24.8m (HY18: GBP24.9m)
Business Unit performance*
-- Research Reagents: Reported revenue of GBP16.5m up 11.5% on the prior half year period (HY18: GBP14.8m) or growth of 6.8% on a constant currency basis(1)
-- Screening: Reported revenue of GBP4.3m up 38.7% on the prior half year period (HY18: GBP3.1m) or growth of 32.3% on a constant currency basis(1)
-- Bioproduction: Reported revenue of GBP2.8m up 154.5% on the prior half year period (HY18: GBP1.1m) or growth of 145.5% on a constant currency basis(1)
-- Diagnostics: Reported revenue of GBP2.5m down 28.6% on the prior half year period (HY18: GBP3.5m) or a decline of 31.4% on a constant currency basis(1)
-- In Vivo: Reported revenue of GBP2.5m down 3.8% on the prior half year period (HY18: GBP2.6m) or a decline of 11.5% on a constant currency basis(1)
Other
-- Post period end, licensing partner Celyad received FDA acceptance of an IND filing for CYAD-02 its CAR-T cell therapy based on Horizon's optimized SMARTvector(TM) shRNA technology, triggering the first milestone payment to the Group
-- Product revenue increased 14.6% to GBP22.8m (HY18: GBP19.9m); Service revenue increased 11.5% to GBP5.8m (HY18: GBP5.2m)
Financial Outlook
-- Strong start to trading in H2 2019
-- Revenues for FY19 are expected to be second half weighted (consistent with previous years) and in line with current market expectations
-- The Group is trading in line with expectations for FY 2019
(1) Refer to the financial review for the definition and reconciliation of alternate performance measures
(2) The HY19 results incorporate the impact of adopting IFRS16 Leases. Refer to the financial review for the reconciliation
*New market aligned business unit structure introduced in January 2019. Prior year equivalents provided for comparison. A detailed explanation of the performance of each Business Unit is provided in the CEO Review.
Terry Pizzie, Chief Executive Officer of Horizon Discovery, commented:
"Horizon has enjoyed a solid performance in the first half of the year with the business as a whole performing in line with expectations."
"I am pleased to report Group revenues of GBP28.6m, an increase of 13.9% on the prior year (HY18: GBP25.1m) or a growth of 8.8% on a constant currency basis. This growth has largely been driven by strong performance in the Group's Bioproduction and Screening business units, which increased revenues by 154.5% and 38.7% respectively. The Group's Research Reagent business unit, which encompasses more than half of Group revenues, also had a good start to the year and we expect strong growth in the second half as this Business Unit benefits from the increased capacity in Cell Line engineering that we have implemented in the first half. We have experienced some organisational challenges with our Diagnostics business unit, but the corrective action that we have put in place should lead to an improved performance in the second half."
"I am pleased to report that the business is on track to complete the delivery of the productivity and eCommerce initiatives that we are implementing as part of our Investing for Growth strategy. We expect these investments to generate significant payback in the short and long-term, by reducing costs, increasing capacity and operating leverage, whilst also opening up new avenues of growth."
"With our traditional second-half weighting and strong order book for the remainder of 2019, we are well positioned to deliver on our strategy, as we continue to transform Horizon from a scientifically-led business, into a fully commercial tools and services company with industrialised processes and customer-directed R&D."
Analyst briefing
An analyst briefing will be held at 12:00pm BST on Monday 16 September 2019 at the offices of Numis, 10 Paternoster Sq., London, EC4M 7LT. There will be a simultaneous live conference call.
Conference call details:
-- Participant UK dial--in: 0800 376 7922 -- Participant US dial--in: 1 866 966 1396 -- International dial--in: +44 (0) 2071 928000 -- Participant code: 6674702
A live webcast of the meeting and presentation slides, will be available on the Group's website:
https://www.horizondiscoveryplc.com/category/presentations-recordings/
For further information from Horizon Discovery Group plc, please contact:
Horizon Discovery Group plc
Terry Pizzie, Chief Executive Officer
Jayesh Pankhania, Chief Financial Officer
Jon Davies, Head of Investor Relations
Tel: +44 (0) 1223 655 580
Numis Securities Limited (Broker and NOMAD)
Freddie Barnfield / Tom Ballard / Duncan Monteith
Tel: +44 (0) 207 260 1000
Consilium Strategic Communications (UK Financial Media and Investor Relations)
Mary-Jane Elliott / Matthew Neal / Melissa Gardiner
Tel: +44 (0) 20 3709 5700
Email: horizon@consilium-comms.com
Westwicke, an ICR Company (US Investor Relations)
Stephanie Carrington
Tel. 646-277-1282
Email: horizondisovery@icrinc.com
About Horizon Discovery Group plc www.horizondiscovery.com
Horizon Discovery Group plc (LSE: HZD) ("Horizon") drives the application of gene editing and gene modulation within the global life science market - supporting scientists on the path from research to therapy.
Built upon more than a decade of experience in the engineering of cell lines, Horizon offers an unmatched portfolio of tools and services to help scientists gain a greater understanding of gene function, identify genetic drivers behind human disease, deliver biotherapeutics, cellular and gene therapies for precision medicine as well as develop and validate diagnostic workflows.
Horizon's solutions enable almost any gene to be altered, or its function modulated, in human and other mammalian cell lines.
The Company's customers include many of the world's foremost academic institutes, global biopharmaceutical and biotechnology companies as well as clinical diagnostic laboratories. Insight into the challenges faced by these organizations enables Horizon to focus efforts on development of innovative solutions that not only differentiate the Company's offering, but also fuel development of the next wave of precision medicines.
Horizon is headquartered in Cambridge, UK with offices in USA and Japan. The Group is listed on the London Stock Exchange's AIM market under the ticker HZD.
CEO REVIEW
I am pleased to report a solid performance in the first half of the financial year with the Group as a whole performing in line with expectations. Reported revenues of GBP28.6m increased 13.9% on the prior year (HY18: GBP25.1m) representing growth of 8.8% on a constant currency basis(1) . Gross Margins increased by 5.3 percentage points to 68.5% (HY18: 63.2%) largely driven by a strong performance in our Bioproduction business unit. Our adjusted EBITDA(1) loss of GBP0.9m(2) (HY18: GBP2.2m) is in line with our expectations as we continue to invest in our business with a focus on achieving growth and market share. We report a loss after tax(2) of GBP5.3m for the period, representing an improvement over the prior period (HY18: GBP7.6m loss).
As we indicated in our FY18 results statement, from the start of this year we implemented a new Business Unit structure to allow the Group to better develop and target the product and service offerings increasingly required by our evolving markets. As a result, we replaced the former reporting structure of Research Products, Applied Products and Services (reported as Products and Services at a Group level), with five market-aligned Business Units: Research Reagents, Screening, Bioproduction, Diagnostics and In Vivo. Each of these business units comprise a mix of products and services that are tailored to the specific needs of their respective customer segments.
The implementation of this new structure has resulted in some organisational changes within the business, some of which are still bedding down. However, I am pleased to report that the increased focus that it has delivered, through having dedicated Business Unit Managers and Product Managers, has largely delivered the expected results, with the exception of Diagnostics, where some organisational challenges led to a disappointing first half performance (see Performance by Business Unit)
This set of results is the first in which the Group has reported according to this new structure. Further details of the composition of these Business Units and their performance in the half year are set out below. In summary, revenue growth for the first six months was driven by a notably strong performance in Bioproduction (up 154.5% on the prior year equivalent) and Screening (up 38.7% on the prior year equivalent).
Research Reagents, which encompassed 58% (HY18: 59%) of Group revenues, grew by 11.5% in the period. We expect continued strong growth in the second half of the year, as this business unit benefits from the substantially increased capacity in Cell Line engineering achieved in the first half.
In Vivo's performance was down 3.8% on the prior year reflecting the continuing challenges the business is facing in its market.
Diagnostics was down 28.6% on the prior year due to organisational issues in this business unit. These have been identified and the corrective action that we have put in place should lead to an improved performance in the second half.
Whilst we will henceforth report according to this new structure, for this period we have also provided commentary on the way we formerly reported, in order to help investors track performance in the first half of the financial year. Accordingly, Group Product revenue increased 14.6% to GBP22.8m (HY18: GBP19.9m); whilst Group Services revenue increased 11.5% to GBP5.8m (HY18: GBP5.2m).
Investing for Growth
This time last year, the Group announced its new "Investing for Growth" strategy to support our goal to become the 'go-to' provider of IP-rich cell engineering solutions and to establish leadership positions in key target markets. This has led us to prioritise the highest value, highest growth areas of our core markets, in particular CRISPR screening and reagents, cell engineering, bioproduction and diagnostic reference standards.
To support this growth, we have committed GBP5m over an 18 month period to an investment program which is focussed on supporting growth across the Group and includes investments in automation to increase production capacity, in Laboratory Information Management Systems (LIMS) to improve data handling, in Business Intelligence to add customer and business insight, and in digitisation to enhance customer experience through our eCommerce channel. Alongside this, we are continuing to invest in commercially led, scientific innovation in order to stay at the forefront of emerging technologies and maintain our market-leading position.
We are now nine months into this programme and the work is still ongoing, but I am pleased to report that the goals we set ourselves in the first half of the year have all been achieved. As planned, by re-engineering our existing process we have successfully delivered the expected tripling of capacity in Cell Line Engineering with no additional headcount. We expect to increase this further through the addition of automation by the end of the first quarter of 2020, which will result in a five-fold increase in capacity compared to the start of 2019. The redevelopment of the Group's web and e-commerce project is also progressing to plan and is on track for completion in October 2019. This will consolidate what are currently two separate web sites (former Horizon and Dharmacon) into a single platform that will provide an enhanced customer experience and opportunities for cross-selling across the Group's entire portfolio.
We expect these investments to generate significant payback in the short and long-term, by reducing costs, increasing capacity and operating leverage, whilst also opening up new avenues of growth.
Performance by Business Unit
The metrics included below are all reported measures unless otherwise stated.
Research Reagents
-- Revenue of GBP16.5m up 11.5% on the prior year (HY18: GBP14.8m) -- On a constant currency basis Revenue of GBP15.8m up 6.8%
The Research Reagents business unit comprises the tools (both products and services) that allow scientists in both academia and drug discovery to better understand disease mechanisms, and to identify the drivers behind disease via both permanent and transient changes in gene expression. It includes Horizon's extensive catalogue of off-the-shelf (OTS) cell models (formerly classified under Research Products) and bespoke cell engineering services (formerly classified under Services) and Dharmacon's custom-made and OTS gene modification (RNAi) and gene editing (CRISPR) reagents (formerly categorised under Research Products) which are delivered from the Group's manufacturing and global logistics centre in Boulder, Colorado.
Horizon's main customers for this revenue stream are academic research labs and early-stage biopharmaceutical companies, which are leveraging Dharmacon's leadership position in RNAi/siRNA and CRISPR reagents to perform gene modulation and editing. Sales are typically high volume and transactional in nature, captured primarily through the Group's website, with some sold via field sales.
Horizon's OTS cell models are sold from the Group's website. Off-the shelf models are available for immediate delivery, with an express service that delivers cell models selected from a predefined menu. Horizon's bespoke cell line engineering service is available to those customers with highly specific requirements and is predominantly sold to biotech and biopharmaceutical companies through the Group's field sales and Key Accounts sales organisation.
Research Reagents delivered sales of GBP16.5m in HY19, up 11.5% on the prior year, with the Group benefiting from increased cross-selling and continuing recovery in the former Dharmacon business. This accounted for 58% of the Group's revenues and delivered solid growth during the period.
We expect the overall growth rate of Research Reagents to increase in the second half, as the business unit benefits from the three-fold increase in cell line engineering capacity delivered in H1 (through re-engineering existing processes) with automation bringing this up to a five-fold increase by the end of the first quarter of 2020.
Since the Group's inception, cell line engineering has been a core capability of Horizon and is also an enabler for other business units (e.g. Diagnostics and Screening). The market is currently fragmented with no dominant players and our ambition is to significantly grow revenues over the next 18-24 months. The increase in capacity is key to this, as it will enable us to decrease our manufacturing costs and extend our offering, with more compelling solutions on both price and turnaround times.
This will have two main effects. Firstly, it will significantly increase our addressable market, as we will now have a more competitive offering and secondly, the increased project volumes will allow us to increase operational leverage across other business units, for example Diagnostics.
Screening (including leveraged R&D)
-- Revenue of GBP4.3m up 38.7% on the prior year (HY18: GBP3.1m) -- On a constant currency basis Revenue of GBP4.1m up 32.3%
The Screening business unit comprises tools and services that address major challenges in drug development, including Horizon's CRISPR Screening and high throughput compound screening (both formerly categorised under Services) and Dharmacon's CRISPR and RNAi libraries (formerly categorised under Research Products). Customers for this revenue stream are mid-to-large biotech and biopharmaceutical companies, which are targeted by the Group's field sales and Key Accounts team and have the choice of buying either a fully outsourced service or just the tools they need (CRISPR libraries) to do their own screening in-house.
Horizon has a market-leading position in this arena with more than 500 CRISPR screens completed and ongoing, including with 8 out of the top 20 global biopharmaceutical companies. In the early part of 2019, we announced the launch of the world's first primary human T-Cell CRISPR screening service, underlining our leading position in this important developing market.
In addition to this extensive know-how and track record, Horizon's ability to leverage Dharmacon's manufacturing expertise is a major differentiator, as it means that we do not need to source CRISPR reagents from other suppliers. The ability to package CRISPR reagents into libraries for sale to organisations seeking to do their own CRISPR screening is also a major factor in helping us to engage with biopharmaceutical companies on both a tool supply and outsourcing basis.
Screening delivered revenues of GBP4.3m for the period (HY18: GBP3.1m), an increase of 38.7% on the prior year. Much of this growth has been driven by an increase in the number of highly complex large-scale screens for major biopharmaceutical companies. Demand continues to be very strong in the second half. We have received an order for GBP850k - the largest single order to date and we will begin to see revenue from this contract in H2 2019. Given the complexity and timescales of some of these major projects, there can be a long time period between initiation of a project and full revenue recognition. We are therefore evaluating the development of simpler, standardised screens that can provide run-rate business alongside these major projects, in order to iron-out some of the lumpiness in the revenues.
Bioproduction
-- Reported revenue of GBP2.8m up 154.5% on the prior year (HY18: GBP1.1m) -- On a constant currency basis Revenue of GBP2.7m up 145.5%
The Bioproduction business unit was formerly categorised under Applied Products. The business unit's offering is a Chinese Hamster Ovary (CHO) cell line which has been modified by gene editing to improve the speed and efficacy of production of biologic drugs. The cell line is available off-the-shelf as a product, which is sold under license, with bespoke CHO cell line development also available. The customers for this cell line are biotech, biopharmaceutical and contract manufacture organisations globally, which are served by Horizon's Key Account Partner sales team.
Biologics have revolutionised the treatment of many diseases and now account for six out of the top 10 'blockbuster' drugs. CHO cells are the predominant system used in the biologics manufacturing processes due to their ability to produce complex biologics at scale and their track record of regulatory approval.
There is strong demand from companies pursuing biologic drugs and looking for cost-effective ways to commence biomanufacturing. However, high entry costs and restrictive licensing conditions can make it difficult to gain access to CHO cells suitable for manufacturing biologics. Horizon is differentiated in this market by offering a high-quality gene edited, proprietary cell line, with a clear IP position, freedom to operate and a disruptive, predictable pricing model.
Our cell lines have now been validated by five successful Investigational New Drug (IND) filings by customers (three in the USA and two in China) which means the Group's market access and credentials are now well established. The growing acceptance in the market has meant that during H1, an increasing number of customers have proceeded directly to full commercial licenses without going through an initial evaluation period, significantly shortening the sales cycle.
We remain optimistic for revenue growth during the second half, but mindful of the fact that the sales of these high value contracts tend to be lumpy in nature and that the strong performance reported at the end of FY18, in which two new commercial licences in excess of GBP1m were signed, has set a high bar for a year-on-year comparison.
Diagnostics
-- Revenue of GBP2.5m down 28.6% on the prior year (HY18: GBP3.5m) -- On a constant currency basis Revenue of GBP2.4m down 31.4%
The Diagnostics business unit comprises gene-edited cell lines that have been developed to mimic human genetic diseases (especially cancer). These standards are used to check the performance of diagnostic tests and to validate new diagnostic tests. The business unit was formerly categorised as Molecular Diagnostics under Applied Products.
Horizon is a leading innovator of cell line-derived reference standards and provides a source of genetically defined, quantitative, sustainable and independent third-party reference material, critical to the validation and routine performance monitoring of assays.
The business unit's offering includes off-the-shelf cell-based reference standards, which are typically sold through the Group's eCommerce platform, and both tailored and bespoke reference standards that are developed to customers' specific requirements and predominantly sold via the Group's field sales team. The customers for these reference standards include academic laboratories, drug discovery companies and clinical laboratories (including clinical R&D).
The key drivers for these tools are the need for fast, minimally invasive, methods for detection of disease (as opposed to patient derived biopsies) against a regulatory backdrop for increased standardisation to remove subjectivity.
Performance in the first half of the year has been disappointing, the root cause of which was internal organisational issues rather than external market factors. We have now implemented a number of changes in this business unit and are confident that these will lead to an improved performance in the second half.
In Vivo
-- Revenue of GBP2.5m down 3.8% on the prior year (HY18: GBP2.6m) -- On a constant currency basis Revenue of GBP2.3m down 11.5%
The In Vivo Business Unit provides genetically engineered rat and mice models from its premises in Boyertown, Pennsylvania and St Louis, Missouri, USA. In Vivo's animal models feature specific gene deletions, insertions, repressions and modifications, and are used as pre-clinical models for human genetic disease for drug discovery. They are available as both OTS models and bespoke models developed to customers' specific requirements. Customers include academic researchers and drug discovery and development companies, who are served by a dedicated specialist In Vivo sales team.
In our FY2018 results statement issued in April 2019, we highlighted that In Vivo was facing some challenging market headwinds and that we had reset our expectations for the growth of the business. Against this backdrop, it is pleasing that revenues in the period were broadly in line with the previous year.
There are a number of contributing factors for these market challenges, including a decreasing demand for custom animal models and pricing pressure. Additionally, In Vivo's market is dominated by a handful of very large dedicated incumbents and gene editing is not a disruptive force in this market, which means it will be challenging for the Group to establish a market leading position in this segment. We are therefore continuing to monitor the situation carefully to determine the best course of action for this business.
Maintaining market leadership
Horizon is committed to investing in partnerships and high-value technologies that maintain the Group's market leadership positions.
In October 2018, we announced a partnership with Celyad (Euronext Brussels and Paris, and Nasdaq: CYAD) a clinical-stage biopharmaceutical company focused on the development of CAR-T cell-based therapies, which had licensed the Horizon's novel shRNA technology to generate its second non-gene-edited allogeneic platform.
Post period end, in early July 2019, Celyad secured FDA Acceptance of an Investigational New Drug (IND) application for CYAD-02, the autologous NKG2D based CAR-T cell therapy that deploys Horizon's optimised SMARTvector(TM) shRNA technology. The Phase 1 trial with initiation planned for early 2020, will be the first CAR-T cell therapy to employ the SMARTvector(TM) platform. Horizon will receive a milestone payment for the successful IND filing.
In January 2019, Horizon signed a strategic partnership with Rutgers, The State University of New Jersey (US), to develop and commercialise base editing, a novel technology platform that has the potential to provide more accurate gene editing and fewer unintended genomic changes than currently available gene editing methodologies.
As part of the agreement, Horizon has an option to exclusively license the base editing technology for use in all therapeutic applications. During the first half of the year, Horizon has been working through the one-year evaluation phase of the technology prior to taking the full licence. Data collated so far is consistent with expectations and we expect to complete our evaluation in the second half of 2019.
Also, in January, we announced the launch of the world's first primary human T-Cell CRISPR screening service to meet the requirements of immunology-based research in drug discovery.
In the past, the use of CRISPR screens in primary T lymphocytes has proved to be challenging, owing to complex issues around the introduction of the screening components and Cas9 in particular. Horizon has adapted its established CRISPRko (knockout) platform to address these issues enabling us to deliver a robust screening platform, which allows customers working in the immuno-oncology space to find gene targets and potential therapeutic avenues in primary cells (T lymphocytes freshly isolated from the body) rather than having to work through surrogate cell lines.
This is significant because we believe that the therapeutic development pipeline for all diseases will move away from screening in immortalised (cancer) cell lines and move towards screens in primary cells, as they more closely represent real patients.
In order to capitalise on this market shift, Horizon has leveraged its proprietary manufacturing expertise to make guide RNAs as a long single strand, rather than as two separate components (CRISPR RNA (crRNA) and tracrRNA) which is how they are usually supplied.
There is a growing body of research that indicates that such synthetic single guide RNA strands are able to edit genes in primary cells without any detectable changes elsewhere in the genome. The research also indicates that synthetic single guide RNAs are more effective in primary cells, suggesting that screens might work better in primary cells with a synthetic single guide library.
Horizon's work during the first half of the year should lead to the launch of its first pooled synthetic single guide library in Q4 2019, which will include subset libraries of our well established druggable genome library. The whole genome library will be complete later in 2020.
Summary and outlook 2019
The market opportunity for gene editing and gene modulation is substantial and growing rapidly. Horizon is at the forefront of this innovation wave and our products and services are powering three key areas in the therapeutics ecosystem:
-- Research: the demand for life science tools designed to understand the genetic basis of disease;
-- Development: the need to improve the speed and reduce the costs of drug development and associated companion diagnostics; and
-- Therapy: providing the tools to enable new therapeutic approaches, including personalised medicines (cell and gene therapies) and immuno-oncology
Scientific interest in these fields continues to accelerate as gene editing and gene modulation become embedded in basic research and drug discovery programmes. The Group's core competence in cell-line engineering (which underpins all of our business units) enables us to create a unique and high value portfolio of tools and services, which combined with our commercial reach, provides the basis for sustainable competitive advantage and strong prospects for growth.
In line with previous years, we anticipate a strong second half weighting to our performance. With an already strong order book for the second half of 2019, the Board expects FY19 revenues to be in-line with market expectations and to maintain a positive adjusted EBITDA.
On 23 June 2016, the UK held a referendum on continuing membership of the EU, the outcome of which was a decision for the UK to leave the EU (Brexit). Unless and until the Brexit negotiation and parliamentary-ratification processes are complete, it is difficult to anticipate the potential impact on the Group's performance.
The Group has responded by engaging proactively with key external stakeholders and establishing a cross-functional team to understand, assess, plan and implement operational actions that may be required. The Group has adopted a base case planning assumption of a hard Brexit/no deal. The Board reviews the potential impact of Brexit regularly.
Terry Pizzie
Chief Executive Officer
16 September 2019
FINANCIAL REVIEW
A solid revenue performance during HY19 of GBP28.6m (HY18: GBP25.1m), represents growth of 13.9% against the equivalent prior period, being in line with market expectations. Revenue growth is 8.8% on a constant currency basis(1) and consistent with prior years we expect revenues to be second half weighted.
Reported gross margins for HY19 were 68.5% (HY18: 63.2%), which benefitted from an increasing proportion of Bioproduction and screening revenues.
Our reported adjusted EBITDA(1) loss improved to GBP0.9m(2) (HY18: GBP2.2m loss). This included the benefit of GBP1.3m due to the implementation of IFRS 16 Leases. On a like for like basis, the adjusted EBITDA(1) loss was GBP2.2m.
Exceptional items for the period totalled GBP0.1m (HY18: GBP1.6m) relating to the departure of Richard Vellacott as Chief Financial Officer.
We report a loss after tax(2) of GBP5.3m for the period, representing an improvement over the prior period (HY18: GBP7.6m loss) substantially due to the implementation of IFRS 16 Leases and an increase in the tax credit.
Management consider the following as additional alternative performance measures to supplement statutory measures of performance as they provide additional insight. Constant currency is the measured current year revenues based on the prevailing foreign exchange rates from the prior year.
Hot Features
Premium
HY HY
2019 2018
Adjusted EBITDA GBPm GBPm
Operating loss (5.7) (7.8)
------------------------------- ------ ------
Amortisation and depreciation 4.7 4.0
------------------------------- ------ ------
EBITDA (1.0) (3.8)
------------------------------- ------ ------
Exceptional items (note
3) 0.1 1.6
Adjusted EBITDA (0.9) (2.2)
------------------------------- ------ ------
Exceptional items
Exceptional items, due to their size, nature or the expected infrequency of the events giving rise to them, are presented separately on the face of the income statement.
The reported income statement for HY19 incorporates the modified retrospective adoption of IFRS 16 (refer to Notes 1 and 10 to the Financial Statements). The impact on the HY2019 alternative performance measure is depicted below:
Adjusted EBITDA Prior to IFRS 16 As Reported Impact of adopting IFRS16 Impact HY2019 IFRS 16 GBPm GBPm GBPm HY2019 Operating loss (6.0) 0.3 (5.7) ------------------------------- ---------- -------- ------------ Amortisation and depreciation 3.7 1.0 4.7 ------------------------------- ---------- -------- ------------ EBITDA (2.3) 1.3 (1.0) ------------------------------- ---------- -------- ------------ Exceptional items (note 3) 0.1 0.1 Adjusted EBITDA (2.2) 1.3 (0.9) ------------------------------- ---------- -------- ------------ Balance Sheet Prior impact IFRS 16 As Reported Impact of adopting IFRS16 Impact HY2019 IFRS 16 GBPm GBPm GBPm HY2019 Right of use assets - 11.2 11.2 ------------------------------- -------------- -------- ------------ Trade and other payables (10.1) 0.6 (9.5) Current lease liabilities - (3.0) (3.0) Non-current lease liabilities - (11.3) (11.3) ------------------------------- -------------- -------- ------------
Operating costs
Total operating expenses (excluding exceptional items) for the period are GBP25.2m (HY18: GBP22.1m). This is in line with expectations as we invest in our people and infrastructure in order to deliver our ambitious strategic objectives.
Balance sheet
Overall net assets of the Group were GBP136.8m at the end of the period (31 December 2018: GBP143.3m). Group working capital (net current assets less cash) is GBP6.9m (31 December 2018: GBP10.8m), after allowing for the GBP2.4m impact of IFRS 16 to current liabilities.
The Group remains well funded with cash resources of GBP24.8m (31 December 2018: GBP26.7m). This funding provides a robust position to support our investment in key strategic projects such as the new eCommerce platform which will be launched later this year.
Current trading and outlook
We anticipate a stronger second half performance in line with prior years, underpinned by a robust order book, the launch of our eCommerce platform and the three-fold increase in capacity in Cell Line engineering.
Independent review report to Horizon Discovery Group plc
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 which comprises the consolidated income statement, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes 1 to 10. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the accounting policies the Group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with accounting policies the Group intends to use in preparing its next annual financial statements and the AIM Rules of the London Stock Exchange.
Deloitte LLP
Statutory Auditor
Cambridge, UK
13 September 2019
HORIZON DISCOVERY GROUP PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months ended 30 June 2019
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP`000 GBP`000 GBP`000
Note
REVENUE 2 28,554 25,112 58,733
Cost of sales (9,002) (9,241) (19,205)
Gross profit 19,552 15,871 39,528
Other operating income 2 1,014 269 2,204
Sales, marketing and distribution
costs (7,065) (5,724) (13,003)
Research and development costs (7,864) (7,363) (15,241)
Corporate and administrative expenses (10,892) (9,159) (20,737)
Share of results of joint ventures (313) (137) (299) Exceptional items 3 (143) (1,583) (33,185) OPERATING LOSS (5,711) (7,826) (40,733) Investment income 2 40 61 90 Finance costs (463) (3) (11) LOSS BEFORE TAX (6,134) (7,768) (40,654) Taxation 884 149 4,833 LOSS FOR THE PERIOD (5,250) (7,619) (35,821) LOSS PER SHARE Basic and diluted (pence) 4 (3.5p) (5.1p) (23.9p)
HORIZON DISCOVERY GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Six months ended 30 June 2019
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP`000 GBP`000 GBP`000
LOSS FOR THE PERIOD (5,250) (7,619) (35,821)
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations 482 2,911 6,936
Tax on items that may be reclassified
subsequently to profit or loss - - 314
Other comprehensive income for the
period net of tax 482 2,911 7,250
TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD (4,768) (4,708) (28,571)
Total comprehensive income attributable
to:
Owners of the Company (4,768) (4,708) (28,571)
HORIZON DISCOVERY GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEET
Six months ended 30 June 2019
Unaudited Unaudited Audited
As at 30 As at 30 As at 31
June 2019 June 2018 December
GBP`000 GBP`000 2018
Note GBP`000
Non current assets
Goodwill 5 51,940 75,263 51,750
Other intangible assets 44,558 51,426 45,644
Property, plant and equipment 10,905 12,482 11,680
Right of use assets 11,161 - -
Investments 2,647 1,723 2,960
Other receivables 433 433 433
121,644 141,327 112,467
Current assets
Inventories 2,272 2,533 2,541
Trade and other receivables 15,280 18,441 19,071
Corporation tax receivable 1,820 - 3,053
Cash and cash equivalents 24,831 24,867 26,740
44,203 45,841 51,405
Total assets 165,847 187,168 163,872
Current liabilities
Trade and other payables (9,481) (10,662) (13,912)
Lease liabilities 10 (2,990) - -
Net current assets 31,732 35,179 37,493
Non-current liabilities
Deferred tax (5,043) (9,057) (5,955)
Long term provisions (201) (191) (197)
Other payables - (338) (495)
Lease liabilities 10 (11,349) - -
Total liabilities (29,064) (20,248) (20,559)
Net assets 136,783 166,920 143,313
Equity
Share capital 6 3,135 3,125 3,134
Share premium account 139,195 137,975 139,102
Share option reserve 3,418 2,651 3,100
Merger reserve 67,457 67,457 67,457
Retained earnings (76,422) (44,288) (69,480)
Total equity 136,783 166,920 143,313
HORIZON DISCOVERY GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 June 2019
Unaudited Unaudited Unaudited Unaudited Unaudited
Share Share premium Share option Merger Retained
capital account reserve reserve earnings Total
GBP`000 GBP`000 GBP`000 GBP`000 GBP`000 GBP`000
Balance at 1 January
2019 3,134 139,102 3,100 67,457 (69,480) 143,313
Restatement of opening
retained earnings for
IFRS16 - - - - (2,174) (2,174)
Loss for the period - - - - (5,250) (5,250)
Other comprehensive
income for the period - - - - 482 482
Shares issued 1 93 - - - 94
Credit to equity for
equity settled share
based payment transactions - - 318 - - 318
Balance at 30 June
2019 3,135 139,195 3,418 67,457 (76,422) 136,783
Unaudited Unaudited Unaudited Unaudited Unaudited
Share Share premium Share option Merger Retained
capital account reserve reserve earnings Total
GBP`000 GBP`000 GBP`000 GBP`000 GBP`000 GBP`000
Balance at 1 January
2018 3,121 137,681 2,478 67,457 (39,580) 171,157
Loss for the period - - - - (7,619) (7,619)
Other comprehensive
income for the period - - - - 2,911 2,911
Shares issued 4 294 - - - 298
Credit to equity for
equity settled share
based payment transactions - - 173 - - 173
Balance at 30 June
2018 3,125 137,975 2,651 67,457 (44,288) 166,920
HORIZON DISCOVERY GROUP PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2019
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31
June 2019 June 2018 December
GBP`000 GBP`000 2018
Note GBP`000
Net cash inflow/(outflow) from
operating activities 7 1,309 (2,243) 1,519
Investing activities
Interest and bank charges paid (602) (123) (11)
Interest received 38 60 90
Acquisition of investment in joint
venture - - (1,400)
Purchases of property, plant and
equipment (607) (718) (2,708)
Purchase of intangible assets (1,182) (512) (851)
Net cash outflow from investing
activities (2,353) (1,293) (4,880)
Financing activities
Proceeds on issue of shares net
of expenses 93 298 1,433
Principal elements of lease payments
(2018 - principal elements of
finance lease payments) (982) - -
Net cash (outflow)/inflow from
financing activities (889) 298 1,433
Net decrease in cash and cash
equivalents (1,933) (3,238) (1,928)
Cash and cash equivalents at beginning
of period 26,740 28,084 28,084
Effect of exchange rate changes 24 21 584
Cash and cash equivalents at end
of period 24,831 24,867 26,740
1. ACCOUNTING POLICIES
General information
This condensed consolidated interim financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2018 were approved by the Board of Directors and have been delivered to the Registrar of Companies. The audit report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.
This consolidated interim financial information has been reviewed, not audited.
Basis of preparation
The annual financial statements of Horizon Discovery Group plc are prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS. The condensed consolidated set of financial statements included in this half-yearly financial report has not been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
The accounting policies adopted in the preparation of the condensed consolidated interim information are consistent with those followed in the preparation of the Group's financial statements for the year ended 31 December 2018 except where disclosed otherwise in this note.
Risks and uncertainties
An outline of the key risks and uncertainties faced by the Group was described on pages 36 and 37 of the Company's Annual Report and Financial Statements for the year ended 31 December 2018. The identified critical accounting estimates in the 2018 Annual Report and Financial Statements were:
-- Revenue recognition; and -- Deferred tax assets.
The critical accounting judgements identified and disclosed in the 2018 Annual Report and Financial Statements were:
-- Goodwill, other intangible assets and other asset valuation; and -- Forecasts and discount rates.
A further assessment was made at the half year and the significant risks identified were unchanged from those in the annual report. It is anticipated that the risk profile will not significantly change for the remainder of the year. Risk is an inherent part of doing business and the strong cash position of the Group, along with the growth profile of the business, leads the Directors to believe that the Group is well placed to manage business risks successfully.
Going concern
The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, support the conclusion that there is a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report. Accordingly, the going concern basis has been adopted in preparing the half-yearly financial information.
Adoption of new and revised standards
In the current period the Group had to change its accounting policies and make retrospective adjustments as a result of adopting IFRS 16 Leases following the modified retrospective approach. The impact of the adoption of the leasing standard and the new accounting policies are disclosed in note 10 below.
On adoption of IFRS 16 the Group has recognised within the balance sheet a right of use asset and lease liability on all applicable leases. Within the income statement, rent expense has been replaced by depreciation and interest expense.
There are no new standards that have been issued but are not yet effective that are expected to have a material impact on the Group.
2. REVENUE
An analysis of the Group's revenue is as follows:
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP`000 GBP`000 GBP`000
Revenue 28,554 25,112 58,733
Other operating income 1,014 269 2,204
Interest received 40 61 90
29,608 25,442 61,027
3. EXCEPTIONAL ITEMS
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP`000 GBP`000 GBP`000
Impairment charges - - (32,124)
CFO exit costs (143) - -
Acquisition and integration
costs - (297) -
Restructuring costs - (11) -
CEO exit costs - (445) (476)
Legal and advisory costs - (598) (585)
Rebranding costs - (232) -
(143) (1,583) (33,185)
The exceptional items in the current period are costs relating to the departure of Richard Vellacott as Chief Financial Officer.
4. LOSS PER SHARE
The calculations of basic and diluted loss per share are based upon the following data:
Unaudited Unaudited Audited Year
Six months Six months ended 31
ended 30 June ended 30 June December
2019 2018 2018
GBP`000 GBP`000 GBP`000
Loss
Loss for the purposes of
basic and diluted loss per
share being net loss attributable
to owners of the Company (5,250) (7,619) (35,821)
Number of shares
Weighted average number of
ordinary shares for the purposes
of basic and diluted loss
per share 150,421,755 149,188,169 149,597,584
Loss per share (3.5p) (5.1p) (23.9p)
Basic EPS is calculated by dividing the earnings attributable to ordinary owners of the parent by the weighted average number of shares outstanding during the period. Diluted EPS is calculated on the same basis as basic EPS but with a further adjustment to the weighted average shares in issue to reflect the effect of all potentially dilutive share options. The number of potentially dilutive share options is derived from the number of share options and awards granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the period.
IAS 33 - Earnings per Share, requires presentation of diluted earnings per share where a company could be called upon to issue shares that would decrease net profit or increase net loss per share. No adjustment has been made to the basic loss per share as at 30 June 2019, as the exercise of share options would have the effect of reducing the loss per ordinary share, and therefore is not dilutive.
5. GOODWILL
Unaudited
GBP000
Cost
At 30 June 2018 75,263
Effects of movements in foreign exchange 2,379
At 31 December 2018 77,642
Effects of movements in foreign exchange 314
At 30 June 2019 77,956
Accumulated impairment losses
At 30 June 2018 -
Impairment losses for the period (25,892)
At 31 December 2018 (25,892)
Effects of movements in foreign exchange (124)
At 30 June 2019 (26,016)
Net book value
At 30 June 2019 51,940
At 31 December 2018 51,750
At 30 June 2018 75,263
As part of the FY18 goodwill and intangibles impairment review enhanced disclosures were presented in relation to the Genomic Products CGU which management consider are still relevant. These were described on page 74 of the annual report.
6. SHARE CAPITAL
Share capital as at 30 June 2019 amounted to GBP3,135,000. During the period, the Group issued 81,606 GBP0.01 ordinary shares through the exercise of employee share options.
7. NOTES TO THE CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2019 June 2018 2018
GBP`000 GBP`000 GBP`000
Loss for the period (5,250) (7,619) (35,821)
Adjustments for:
Investment revenues (40) (61) (90)
Finance costs 627 142 11
Depreciation of property, plant and equipment 1,354 1,709 2,876
Amortisation of intangible assets 2,363 2,318 5,354
Amortisation of right of use assets 1,000 - -
Goodwill, intangible asset and property,
plant and equipment impairment charges - - 32,124
Loss on disposal of property, plant and
equipment - - 7
Loss on disposal of intangible assets 71 - 145
RDEC tax credit in other operating income (125) - -
Tax credit (884) (149) (4,833)
Share option charge 318 150 622
Share of loss of joint venture 313 137 299
Operating cash flows before movements in
working capital (253) (3,373) 694
Decrease in inventories 271 63 33
Decrease/(increase) in receivables 4,429 2,116 (1,894)
(Decrease)/increase in payables (4,709) (1,602) 3,610
Cash generated by operations (262) (2,796) 2,443
Tax received/(paid) 1,571 553 (924)
Net cash from operating activities 1,309 (2,243) 1,519
8. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. There has been no material change in the type of related party transactions described in the financial statements for the year ended 31 December 2018.
9. SUBSEQUENT EVENTS
On 6 August 2019 the Company invested a further GBP700k in Avvinity Therapeutics Limited in return for 62,500 shares, increasing the Company's share of Avvinity's equity from 43% to 47%. At the date of this announcement there had been no other subsequent events to report.
10. ADOPTION OF IFRS16
This note explains the impact of the adoption of IFRS 16 Leases on the group's financial statements and discloses the new accounting policies that have been applied from 1 January 2019.
Until the 2018 financial year, leases of property, plant and equipment were classified as either finance or operating leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.
From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
-- fixed payments (including in-substance fixed payments), less any lease incentives receivable -- variable lease payment that are based on an index or a rate -- amounts expected to be payable by the lessee under residual value guarantees
-- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
-- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Right-of-use assets are measured at cost comprising the following:
-- the amount of the initial measurement of lease liability
-- any lease payments made at or before the commencement date less any lease incentives received
-- any initial direct costs, and -- restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss.
The group has adopted IFRS 16 retrospectively from 1 January 2019 but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019. Short-term leases are leases with a lease term of 12 months or less.
In applying IFRS 16 for the first time, the group has used the following practical expedients permitted by the standard:
-- reliance on previous assessments on whether leases are onerous -- the exclusion of short-term leases
-- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
-- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the group relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease.
Adjustments on adoption of IFRS 16
On adoption of IFRS 16, the group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The weighted average lessee's incremental borrowing rate applied to the lease liabilities on 1 January 2019 was between 5.13% and 8.85%. The group did not have any leases previously classified as finance leases prior to the adoption of IFRS 16.
The incremental borrowing rates have been determined on a lease by lease basis, using the reference rate and country risk premium, plus the entity credit risk premium, plus asset specific risk adjustments.
The reference rate has been derived from government bonds of the country with the leased asset with a term corresponding to the weighted average lease length and currency. No country risk premium was required for any of the leases as the country of the leased asset matched the country in whose currency the lease was denominated in, so there is no foreign currency risk. The entity credit risk premium was determined by reference to each entity within the group holding finance leases financial performance to 31 December 2018 (the date of transition to IFRS 16) compared to similar companies with external credit ratings. Using these credit ratings, the credit risk premium for each lease and entity has been estimated using corporate bond curves for companies in the Healthcare sector with a matching credit rating and term.
For property leases, asset risk adjustments were made based on operational risk of each asset, which includes whether security has been provided for the lease by the Group. This only asset which required an asset specific adjustment was the UK property, as it had a remaining term of more than ten years on transition to IFRS 16.
GBP'000
Operating lease commitments disclosed as at 31 December
2018 19,043
Discounted using the lessee's incremental borrowing
rate of at the date of initial application 15,217
Add: Additional identified leases not included in 2018
operating lease disclosure, discounted at lessee's incremental
borrowing rate of at the date of initial application 75
Total right of use assets 15,292
Of which are:
Current lease liabilities 2,967
Non-current lease liabilities 12,325
Total right of use assets 15,292
The associated right-of-use assets for all leases were measured on the modified retrospective basis as if the new rules had always been applied but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.
An impairment of the In Vivo CGU was made at 31 December 2018 so all assets valued at their recoverable amount. One lease identified related to this unit, so value of the right of use asset has been impaired to GBPnil at 1 January 2019. The effect of this additional impairment above the expected amortisation over the useful life of the asset was GBP687,000. This has been included as part of the restatement of opening reserves on transition to IFRS 16.
The recognised right-of-use assets relate to the following types of assets:
30 June 2019 1 January
GBP'000 2019
GBP'000
Properties 11,124 12,095
Equipment 42 50
Total right of use assets 11,166 12,145
The change in accounting policy affected the following items in the balance sheet on 1 January 2019:
-- Right of use assets - Increase by GBP12,145,000 -- Accruals - Decrease by GBP700,000 -- Lease liabilities - Increase by GBP15,292,000 -- Deferred taxation liabilities - Decrease by GBP97,000
The net impact on retained earnings at 1 January 2019 was a decrease of GBP2,350,000
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR KELFFKKFFBBF
(END) Dow Jones Newswires
September 16, 2019 02:00 ET (06:00 GMT)
1 Year Horizon Discovery Chart |
1 Month Horizon Discovery 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
