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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Omega Diagnostics Group Plc | LSE:ODX | London | Ordinary Share | GB00B1VCP282 | ORD 4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.20 | 2.00 | 2.40 | 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
TIDMODX
RNS Number : 1977N
Omega Diagnostics Group PLC
23 September 2019
OMEGA DIAGNOSTICS GROUP PLC
("Omega" "Company" or the "Group")
FINAL RESULTS
FOR THE YEARED 31 MARCH 2019
Omega (AIM: ODX), the medical diagnostics company focused on allergy, food intolerance and infectious disease, announces its audited results for the year ended 31 March 2019.
Omega provide high quality in-vitro diagnostics products for use in hospitals, clinics, laboratories and healthcare practitioners in over 75 countries and specialise in the areas of allergy and autoimmune, food intolerance and infectious disease. These results reflect the actions taken last year as part of the Board's strategic review to divest the non-core infectious disease business and to close the German allergy business.
Financial Highlights:
-- Like for like revenue of continuing operations increased by 5% to GBP8.75m (2018: GBP8.33m)
-- Reported revenues down 28% to GBP9.76m (2018: GBP13.55m) reflecting the divestitures noted above
-- Exceptional gains of GBP1.66m (2018: Exceptional charges of GBP6.51m) as detailed in the Financial Review below
-- Statutory profit for the year of GBP0.97m (2018: loss of GBP7.27m) -- Adjusted loss before tax* of GBP0.30m (2018: loss of GBP0.73m) -- EBITDA from continuing operations of GBP0.20m (2018: loss of GBP0.8m) -- Adjusted EPS (0.2p) (2018: (0.4p))
-- Positive cashflow generated from operating activities, with cash inflow of GBP0.37m (2018: GBP0.83m outflow)
* Adjusted for exceptional items, amortisation of intangible assets and share based payment charges.
Operational & Post-Period End Highlights:
-- Closure of Germany and Pune sites eliminating associated losses -- Disposal of legacy Infectious disease business to Novacyt SA for proceeds of GBP1.975m -- IDS officially launch allergy range and first stocking orders are received -- 62 allergens CE marked to run on the fully automated IDS system
-- VISITECT(R) CD4 Advanced Disease test achieves CE mark and first orders received for both VISITECT(R) CD4 350 cut off test and Advanced Disease test
-- VISITECT(R) CD4 Advanced Disease test added to Global Fund procurement list following review by Expert Review Panel for Diagnostics
-- Food intolerance division returns to growth and makes progress with partner in China -- GBP0.64m raised in May 2019 via direct subscription from key shareholders
-- Placing and subscription for GBP1.7m, announced separately today, to ensure the Group has access to sufficient working capital to continue to develop the commercialisation of both versions of the VISITECT(R) CD4 test
Commenting, William Rhodes, Interim Non-executive Chairman, said: "We have made substantial, industry-leading advances in the area of CD4 testing, having achieved commercial launch of the first, and still only, handheld, lateral flow CD4 test and have rapidly progressed the Advanced Disease test to commercial launch as well. We are confident that we will receive the necessary approvals for CD4 but note the existence of material uncertainties with respect to timing of approvals and receipt of significant purchase orders and the resulting impact on short term working capital requirements
In recognising the existence of material uncertainties, we are encouraged as:
-- our existing and new shareholders have committed to invest GBP1.7m subject only to approval at the forthcoming general meeting;
-- our VISITECT(R) CD4 Advanced Disease test has received ERPD approval; -- our new Chinese partner for Food Detective(R) has placed two significant purchase orders;
-- our partner, IDS, has committed resources and trained its sales personnel, with Omega's involvement, to focus on and build the market for our allergy tests; and
-- we continue to explore unlocking the value within our three business units, whilst still managing to progress all three of them, namely, CD4 testing, allergy and food intolerance testing.
Until such time as we have recruited a new Chairman, I look forward to continuing to serve as Interim Chairman, working with the Board and management to ultimately achieve significant shareholder value."
The information communicated in this announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.
Contacts:
Omega Diagnostics Group PLC Tel: 01259 763 030 Colin King, Chief Executive Kieron Harbinson, Group Finance www.omegadiagnostics.com Director Jag Grewal, Group Sales and Marketing Director finnCap Ltd Tel: 020 7220 0500 Geoff Nash / James Thompson (Corporate Finance) Camille Gochez (Corporate Broking) Walbrook PR Limited Tel: 020 7933 8780 or omega@walbrookpr.com Paul McManus Mob: 07980 541 893 Lianne Cawthorne Mob: 07584 391 303
Chairman's Statement
Allow me to begin my Chairman's Statement by expressing our collective thanks to David Evans for his many years of leadership as Omega's Non-executive Chairman. His astute guidance and input, as well as his active engagement and personal investment have led the Company through many ups and downs over the years, and his opinions and insights are missed at the Board table.
I would also like to introduce myself to our shareholders. Whilst I have been a Non-executive Director of the Company since 2013, I have only recently been asked to assume the role of Interim Chairman. Upon my retirement as an Executive Officer of Becton Dickinson and Company, I was asked by David to consider joining the Omega Board. He had specifically sought me out as he knew that I had extensive mergers and acquisitions experience, a background in in-vitro diagnostics in general and, more specifically, I had been the Worldwide President for BD Biosciences, the global leader in the development, manufacture and sales of CD4 tests. After meeting the management team at Alva, talking with the other Board members and looking carefully at the VISITECT(R) programme, I accepted the invitation to join in 2013 and I am glad to act as Interim Non-executive Chairman until such time as a permanent successor is appointed
.
The Omega team has accomplished much in achieving the CE marking and commercial launch of the VISITECT(R) 350 test, especially when considering the many technical challenges that had to be successfully resolved in the process. The VISITECT(R) CD4 Advanced Disease test, targeting patients with advanced HIV disease (T lymphocyte cell counts of <200 cells/ul of blood) who are at risk of opportunistic infections, is also swiftly approaching commercial launch. Bearing in mind that no other handheld, lateral flow test exists in the marketplace for CD4 detection, our VISITECT(R) CD4 Advanced Disease test is uniquely placed to improve healthcare outcomes at near-patient level by allowing people living with HIV in the most rural settings and clinics to have immediate access to a critically important test.
Adding to the Chief Executive's Review, I would like to make the following observations and comments:
VISITECT(R) CD4 350 test
The 350 test has now been registered in three countries and is in the process of being registered in nine more. Registration can be both time consuming and complicated in many countries, requiring not only paperwork submissions but also at times in-country clinical evaluations. In addition, we have signed agreements with distributors in 13 countries for the 350 test and will endeavour to add the Advanced Disease test to their portfolios when it becomes commercially available. Initial orders have been received for the 350 test from five countries and, whilst to date modest in value, we expect higher levels of repeat sales, and expect that this will also enable rapid market access for the Advanced Disease test once available. Our required evaluation testing in Nigeria of the 350 test has recently been completed, and we are awaiting finalisation of the registration process there. We continue to regard Nigeria as the largest commercial market for the 350 test.
VISITECT(R) CD4 Advanced Disease test
The Advanced Disease test was CE marked just before the end of the financial year. The technical file supporting the CE mark formed the basis of the additional regulatory approvals that the Company submitted to the UNITAID-funded Expert Review Panel for Diagnostics (ERPD). As announced on 16 September 2019, following the conclusion of a quality risk assessment review by the ERPD, The Global Fund has informed the Company that its VISITECT(R) CD4 Advanced Disease test will be included in The Global Fund procurement list. This means that VISITECT(R) CD4 Advanced Disease tests may be procured by organisations with access to The Global Fund or UNITAID funds, following a review of procurement requests and the issue of a No-objection letter from the Global Fund. The Global Fund requires the Company to submit its VISITECT(R) CD4 Advanced Disease test for WHO Prequalification review in order to reach prequalification before the end of the ERPD authorised period which runs to 11 September 2020 and we look forward to updating you on progress throughout this financial year.
Allergy
We now have 62 allergens available for use on our commercialisation partner's worldwide installed base of analysers. IDS has been working together with Omega staff to ensure IDS sales personnel are well trained and prepared for positioning our products into the diagnostics laboratory marketplace, particularly focusing on reaching immunology practitioners who will be interested in adding allergens to their test menus. Our expectation is that Allergy will become an important contributor to both organisations' businesses over the medium term, and we are encouraged by IDS's commitment as evidenced by its willingness to assign people and resources to the programme.
Food intolerance
As detailed in the CEO's note, our Food intolerance business has returned to growth, and we are excited about our prospects for geographic expansion. Our management team has long identified China and North America, particularly the US, as natural targets for our tests. We have determined through discussions with potential and existing partners that a direct to consumer approach - that is, allowing individuals to assess their food intolerances in order to make informed decisions regarding diet, potentially adding to their overall health and wellness - is something consumers in both countries would be interested in. We have recently received a significant first and second purchase order from our new Chinese partner for a China-specific 46-food panel test we developed for it and we expect significant business going forward. We are also exploring how best to grow the US market, in light of and in full compliance with any regulatory requirements there.
Strategic reviews
As announced by David Evans previously, the management team, led by Colin King, undertook an in-depth strategic review of the overall Omega business, which in the opinion of the Board, shareholders may remember, determined that the sum of the parts exceeded the market's perceived value of the Group as a whole, as determined by share price. This, whilst perhaps surprising to some, is not an unusual finding, in that the market value of publicly listed companies does not always represent the enterprise value of the business, whether below or above.
Upon performing this review, we took a decision to engage with third-party strategic and private equity organisations to explore likely valuations of parts of our business that were fair and matched the Board's expectations of value.
Whilst we have received feedback from several interested parties, some of whom have provided non-binding expressions of interest confirming the Board's view, we are not yet in a position to have selected an opportunity that would realise the value to the business that the Board, the management team and ultimately the shareholders should expect. Whilst this process will continue, we will maintain our focus and efforts on running and growing the value of all our business units.
Going Concern
The Directors are required to prepare financial statements on a going concern basis unless the Directors either intend to cease trading or have no realistic alternative but to do so. These financial statements have been prepared on a going concern basis, which contemplates the realisation of assets and the payment of liabilities in the ordinary course of business. The Group realised a profit of GBP974k for the year ended 31 March 2019 (2018: loss of GBP7,270k). As at 31 March 2019, the Group had net current assets of GBP1,185k and an undrawn overdraft facility of GBP1,255k. Management has negotiated an extension to the overdraft facility, which is now renewable at 30 September 2020.
The Directors have considered the future funding requirements of the Group and have prepared detailed forecasts which take into account its anticipated business activities with regards to its two VISITECT(R) CD4 products (VISITECT(R) CD4 350 and VISITECT(R) CD4 Advanced Disease), its current banking facilities, the principal risks and uncertainties the Group faces and other factors impacting the Group's future performance.
These forecasts extend to September 2020. There are a number of assumptions applied by the Directors underpinning the forecasts which are uncertain and outside of management's control:
Timing of regulatory approvals and associated orders
The forecasts are prepared on the assumption that approval from the Nigerian Ministry of Health ("MOH") in relation to the Company's VISITECT(R) CD4 350 test will be received by November 2019.
The Directors are encouraged that there will be a favourable outcome in respect of the MOH approval, given that an in-country product evaluation in six Nigerian States has completed with the product performing in line with expectations. The evaluation co-ordinator is in the process of submitting a report for review by the MOH and, if successful, the VISITECT(R) CD4 350 test will be adopted into the national HIV policy in Nigeria.
Committed orders for 20k units of the VISITECT(R) CD4 Advanced Disease test have been received with other low value orders for the VISITECT(R) CD4 350 test having already been completed. The fulfilment of these customer orders provides comfort to the Directors that there is a market for the CD4 product range. However, volume sales of both products are intrinsically dependent upon the approval outlined above with management already having received an order for 50k VISITECT(R) CD4 350 tests contingent upon the receipt of the MOH approval. Any delay in receiving approvals would influence the timing of receipt of significant customer orders.
Short term working capital funding
The Directors recognise the implications to short term working capital levels should there be delays in regulatory approval processes and subsequent timing of receipt of orders from customers. Management forecasts highlight a potential funding requirement if regulatory approval and subsequent receipt of purchase orders is delayed.
The Directors have today announced a conditional placing and subscription to raise GBP1.7m from existing and new shareholders. This funding is only conditional on shareholder approval at a General Meeting on 10 October 2019.
At the date of finalising the financial statements, the material uncertainties identified by the Directors as being outside of their control, that may cast significant doubt on the Group's ability to continue as a going concern, are as follows:
-- the timing of the in-country approval from the Nigerian MOH in relation to VISITECT(R) CD4 350 test
-- the timing and volume of sales orders for both VISITECT(R) CD4 350 & VISITECT(R) CD4 Advanced Disease tests
-- the approval of the proposed equity raise
These financial statements do not include the adjustments that would be required if the Group was unable to continue as a going concern. If the going concern basis of preparation was no longer appropriate, adjustments would be required which would include reducing the balance sheet values of assets to their recoverable amounts and to provide for further liabilities that might arise.
Outlook
In summary, then, we have made substantial, industry-leading advances in the area of CD4 testing, having achieved commercial launch of the first, and still only, handheld, lateral flow CD4 test and have rapidly progressed the Advanced Disease test to commercial launch as well. We are confident that we will receive the necessary approvals for CD4 but note the existence of material uncertainties with respect to timing of approvals and receipt of significant purchase orders and the resulting impact on short term working capital requirements.
In recognising the existence of material uncertainties, we are encouraged as:
-- our existing and new shareholders have committed to invest GBP1.7m subject only to approval at the forthcoming general meeting;
-- our VISITECT(R) CD4 Advanced Disease test has received ERPD approval; -- our new Chinese partner for Food Detective(R) has placed two significant purchase orders;
-- our partner, IDS, has committed resources and trained its sales personnel, with Omega's involvement, to focus on and build the market for our allergy tests; and
-- we continue to explore unlocking the value within our three business units, whilst still managing to progress all three of them, namely, CD4 testing, allergy and food intolerance testing.
--
Until such time as we have recruited a new Chairman, I look forward to continuing to serve as Interim Chairman, working with the Board and management to ultimately achieve significant shareholder value.
William Rhodes
Interim Non-Executive Chairman
Chief Executive's Review
Our revenue in the twelve months to 31 March 2019 was GBP9.76 million which reflects the decisions taken last year as part of the Board's strategic review to divest the non-core Infectious disease business and to close the German Allergy business. Revenue declined by 28% on a headline basis (2018: GBP13.55 million) and increased 5.1% on a like-for-like basis for continuing operations. The growth on a like-for-like basis has been driven by the Food intolerance segment which returned to revenue growth of 7% over the prior year.
Our statutory profit for the year was GBP0.97 million compared to a loss of GBP7.3 million in the prior year. This profit includes a one-off gain of GBP0.9 million in relation to the Infectious disease division sale and GBP0.76 million in relation to the writing off of liabilities in Germany.
Our adjusted loss before taxation was GBP0.3 million versus GBP0.7 million in the prior year. The closures of loss-making sites in Germany and the manufacturing site in India were completed in the first half of the year and it was pleasing to note that in the second half of the year we made an adjusted profit of GBP0.2 million. Gross profit also increased in the year to 63.2% versus the prior year level of 60.5% - this is due to a higher level of Food intolerance sales which are higher margin products for the Group.
Core business
Food intolerance
-- The Food intolerance division sales reversed a previous year decline of 6% to an increase of 7%, resulting in sales in 2019 of GBP8.1 million (2018: GBP7.6 million). Encouragingly the recovery was across all regions and positions us for further growth in this current financial year.
-- Sales of Foodprint(R) increased by 19% to GBP5.46 million (2018: GBP4.59 million). The Group sold a further nine instruments taking the cumulative number of installations to 193 instruments in 41 countries, and revenue per instrument increased by 13% to GBP28,942 (2018: GBP25,503).
-- Sales of Food Detective(R) declined by 2% in the year to GBP1.67 million (2018: GBP1.71 million).
-- Following the consolidation of the US laboratory market we have adjusted our strategy and are now focused on two labs offering our tests. Both customers are in the process of implementing strategies that should capitalise on the significant market opportunity and we expect to start seeing the benefits of these activities in the second half of the coming financial year.
-- Our development team and our strategic partner in China have made excellent progress with the development and registration of our Food intolerance product in China. We had initially expected the registration not to be completed until Q2 2020 but now expect registration to be completed in Q4 2019. In preparation for the expected launch we have received our first and second orders for +48,000 tests.
-- The move into our new purpose built facility, in Ely, for our Food intolerance business unit, will be completed by the end of this financial year. The move is essential to deal with the increasing demand for our Food intolerance products.
Allergy and autoimmune
-- The Allergy and autoimmune division sales decreased by 70% on the prior year to GBP0.98 million (2018: GBP3.31 million). The main reason for the decline was the decision to discontinue the German Allergy business with the 2019 revenues including a contribution in the first quarter only.
-- IDS started to commercialise the 60 CE-Marked allergens in March 2019 and these tests cover many of the most prominent and clinically relevant allergens that are routinely tested for. We continue to make good progress with extending our allergen offering on the automated IDS instrument and now have 62 allergens CE marked, and we continue to trend towards ten allergens launched per year. We expect the first-year sales to be modest as IDS gears up commercialisation and we work to further extend our menu offering. Initially the target market will be the current IDS installed base and in particular the customers that are running its Autoimmune panel. Once we increase the menu to between 70 and 80 allergens this will allow IDS to be more competitive in the marketplace.
-- Autoimmune sales declined from GBP0.47 million to GBP0.35 million as a result of an ongoing exercise to rationalise the product range. As this range of products is non-core to our business, we have taken the decision to discontinue all of these products by the end of September 2019.
Infectious disease
The Infectious disease division sales decreased by 73% on the prior year to GBP0.73 million (2018: GBP2.68 million). The main reason for the decline was the decision to sell the legacy Infectious disease business with 2019 revenues including a contribution in the first quarter only.
VISITECT(R) CD4 - We achieved key milestones in CE marking the CD4 Advanced Disease test at the end of March 2019 and registering our first sales of the 350 reference line test. Our focus is now on commercialisation of both VISITECT(R) CD4 and VISITECT(R) CD4 Advanced Disease.
-- Commercialisation for our VISITECT(R) CD4 350 will be via our distribution partners in key countries. Indonesia and Nigeria represent the largest opportunities. Indonesia has purchased a stocking order and has commenced a marketing campaign. The Nigerian evaluation has just completed and, although it has taken longer than expected due to needing to collect a sufficient number of samples with lower CD4 counts, the initial feedback is positive towards the test. The next step in the process is the lead investigator will provide a report which will be submitted to the government for approval and once approved by the Minister of Health, sales can commence. We expect meaningful sales to commence later this calendar year.
-- We believe that VISITECT(R) CD4 Advanced Disease is the larger opportunity out of the two test formats - a recent publication by The Clinton Health Access Initiative (CHAI) estimated that one third of adults initiating treatment in low-to-middle-income countries are estimated to start care at a CD4 cell count of <200 cells/uL. The US government, through the US President's Emergency Plan for AIDS Relief (PEPFAR), has included support for a "lateral flow CD4 assay" in its current operational guidance and The Global Fund has indicated it will financially support the initiative. Unitaid has also recently set aside a $20 million fund to support patients with advanced HIV disease which CD4 will play a part in.
Our plans to commercialise VISITECT(R) CD4 products comprise three sales channels:
1. advanced Disease Initiative co-ordinated by Unitaid; 2. united Nations NGO network; and 3. our distribution partners.
Advanced HIV Disease Initiative - Unitaid is investing $20 million to run through to the end of 2020 in a package of care which includes a CD4 lateral flow assay with a cut off at 200 CD4 cells/uL. This initiative is being driven by Unitaid and will be implemented by CHAI. Following confirmation that the Global Fund has included our VISITECT(R) CD4 Advanced Disease test on its global procurement list, we are confident we can make progress with the seven countries being targeted (Malawi, Nigeria, South Africa, Tanzania, Uganda, Botswana and Lesotho). Unitaid/CHAI have indicated they will support us to accelerate country approvals and market entry.
United Nations NGO network - these are all prospective and significant buyers; however, procurement requires WHO prequalification to be completed. This approval incorporates three stages; the first is a review of technical documents which is currently underway. Once this is completed a WHO evaluation and site audit will be required prior to approval. This is unlikely to happen during the current financial year but should occur during FY21.
Sales will be via our distribution partners in key countries, of which we have identified 24 countries for phase 1. These countries have been identified according to a defined criteria:
a) prioritised by Unitaid/CHAI Advanced HIV Disease Initiative, e.g. Lesotho; b) HIV prevalence greater than 2%, e.g. Tanzania; c) a strong distribution partner having a proven track record of growing sales, e.g. Brazil; and d) a group of stakeholders in country actively driving advanced HIV disease agenda, e.g. Vietnam.
A detailed timeline of key stages to achieve first sales in each of the 24 countries has been defined and includes appointing a relevant distribution partner, product registration and product evaluation (not required in all countries) and is being actively project managed.
Going Concern
As noted in Bill's Chairman's statement, we recognise the material uncertainties that exist within our forecast models, namely, with the awaited in-country approval from the Nigerian MOH in relation to the VISITECT(R) CD4 350 test, and the rate at which customer demand will pick up for both versions of the CD4 test. In order to recognise potential delays with these events, we have decided to raise additional funding of GBP1.7m from existing and new shareholders as announced separately today. The fund raise will complete, subject to passing the resolutions proposed for the forthcoming general meeting on 10 October 2019 and we are grateful for the support shown by shareholders in supporting our growth opportunities.
Outlook
The Board's decisions since the strategic review announced last year have enabled the Company to focus on its key growth areas and to achieve delivery targets against development timelines.
The Food intolerance division has returned to revenue growth of 7% over the prior year and has made good progress with partners in developing the opportunities for this division in China and the US, which the Board anticipates will lead to further growth in the current financial year.
There are now two CE marked versions of the Company's VISITECT(R) CD4 test and the Board is confident that, following the approval from the ERPD process, the advanced disease version of this unique test will benefit many people living with HIV.
The Company's allergy range of 60 tests was commercially launched by IDS in March this year and we look forward to working with IDS as we expand the menu offering beyond the current 62 allergens that are CE-Marked.
We are therefore confident as we look forward that all three focused areas are well positioned to deliver growth to the business.
Finally, I would like to thank all the Group employees for their continued support and commitment; without their hard work we would not have been able to make progress against our vision. We are all looking forward to a return to profitability and delivering on our strategic aims which will ultimately return value to all stakeholders.
Colin King
Chief Executive
Financial review
Following the implementation of our strategic review, our financial results in the profit and loss account have been presented to highlight the results from continuing operations and discontinued operations to provide for a like-for-like comparison.
Financial performance
Given that results for the year have been impacted by the decision to close our loss-making operations in Germany and Pune, India, I will deal first with a summary of financial performance from continuing operations, excluding the effects of closures, followed by a summary of the discontinued operations.
Continuing operations financial summary
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Premium
2019 2018
GBP GBP
------------------------ --------- -----------
Food intolerance
revenue 8,050,142 7,556,078
Allergy and autoimmune
revenue 401,251 487,885
Infectious disease
revenue 305,363 285,508
------------------------ --------- -----------
Total revenue 8,756,756 8,329,471
Gross profit 5,632,329 5,479,283
Gross profit percentage 64.3% 65.8%
Exceptional items - (225,720)
EBITDA 199,668 (812,375)
Adjusted loss before
taxation (218,061) (1,079,165)
------------------------ --------- -----------
Group revenue from continuing operations increased by 5.1% to GBP8.75 million, due mainly to a return to revenue growth in our Food intolerance division which benefited from a strong performance, particularly with Foodprint(R), which achieved sales of GBP5.46 million (2018: GBP4.59 million) with the majority of growth coming from "top ten" markets. Food Detective(R) revenues of GBP1.67 million were similar to last year (2018: GBP1.71 million) with key markets holding their position. Revenues for Autoimmune and Infectious disease were principally derived of sales through our Indian subsidiary and amounted to GBP0.7 million.
The reduction in gross profit percentage of 1.5 percentage points is mainly due to a reallocation of quality control staff previously expensed through administrations costs now being included in direct labour costs within cost of sales. This reallocation more than offset a smaller reduction in material costs due to improved product mix relating to higher sales of Foodprint(R).
Administrative overheads from continuing operations reduced by GBP0.67 million to GBP4.69 million (2018: GBP5.36 million). Approximately half of the reduction related to the reallocation of headcount to other departments (QC heads reallocated to production labour and customer service heads reallocated to selling and marketing). The other half related to savings in personnel/travel costs and reduced bank and forex charges.
Selling and marketing costs increased marginally to GBP1.53 million (2018: GBP1.37 million) reflecting the reallocation of headcount into this department as noted in the paragraph immediately above.
There were no exceptional items in the year ended 31 March 2019 and the prior year charge relates to the termination cost of the previous CEO (Andrew Shepherd).
Discontinued operations financial summary
2019 2018
GBP GBP
------------------------ --------- -----------
Food intolerance
revenue - -
Allergy and autoimmune
revenue 578,907 2,826,075
Infectious disease
revenue 423,656 2,397,180
------------------------ --------- -----------
Total revenue 1,002,563 5,223,255
Gross profit 531,095 2,713,532
Gross profit percentage 53% 52.0%
Exceptional items 1,660,683 (5,662,306)
EBITDA (73,370) 498,885
Adjusted (loss)/profit
before taxation (85,177) 269,240
------------------------ --------- -----------
The discontinued operations comprise the Allergy business that was closed down and operated by our German subsidiary, Omega Diagnostics GmbH, the manufacturing operations in Pune, India (infectious disease), that were closed down and operated by our Indian subsidiary, Omega Dx (Asia) Pvt Limited, and the legacy Infectious disease business that was sold by Omega Diagnostics Limited to Lab 21 Healthcare Ltd in June 2018.
Exceptional items summary (pre-taxation)
2019 2018
---------- ------------ ---------- ------------
Continuing Discontinued Continuing Discontinued
operations operations operations operations
GBP GBP GBP GBP
------------------------------------------ ---------- ------------ ---------- ------------
Gain on sale of Infectious disease
business - 901,808 - -
Omega Diagnostics GmbH closure - 758,875 - (4,677,799)
Omega Dx (Asia) Pvt Limited manufacturing
closure - - - (984,507)
Andrew Shepherd deferred settlement - - (225,720) -
------------------------------------------ ---------- ------------ ---------- ------------
Total - 1,660,683 (225,720) (5,662,306)
------------------------------------------ ---------- ------------ ---------- ------------
The exceptional items in 2019 are credits to the profit and loss account, comprised of a write-back of net liabilities in relation to Omega Diagnostics GmbH of GBP758,875 and a gain on sale of the legacy Infectious disease business of GBP901,808, as disclosed more fully in Note 7 to the financial statements.
The remainder of the Financial Review addresses the results for total operations.
Adjusted loss before tax
Adjusted loss before tax (statutory profit before tax of GBP1.26 million with a deduction of GBP1.74 million for exceptional item gains, and an add-back for amortisation of intangibles of GBP0.14 million and share-based payment charges of GBP0.03 million) was GBP0.30 million compared to an adjusted loss before tax of GBP0.73 million the year before. Segmental performance as presented in the notes to the financial statements still shows that the Food intolerance division is the only profitable segment currently after an allocation for Group overheads. Losses in the Allergy and autoimmune segment have reduced significantly following the closure of the German business and future segment performance is reliant on our relationship with IDS and its ability to grow its market share as we add new allergens to the menu. The Infectious disease segment shows an increased loss due to the decision to retain manufacturing staff in the business, following the divestment of the legacy Infectious disease business to Lab 21 Healthcare Ltd ('Lab 21'), to cope with the anticipated increase in demand from VISITECT(R) CD4 and to provide a time-limited product assembly service to Lab 21 as it continues its technology transfer activities.
Taxation
The current year tax charge of GBP0.21 million (2018: GBP0.27 million credit) is comprised of:
-- a credit of GBP0.12 million relating to a receipt from HMRC for surrendering SME R&D tax credits relating to the year ended 31 March 2018.
-- a movement in deferred tax charges relating to the giving up of those losses for future offset that gave rise to those tax credits.
-- a tax charge relating to the sale of the legacy infectious disease business, offset by SME R&D tax credits for the current year.
We have cumulative tax losses of approximately GBP6.5 million that are carried forward and available for offset against future profits. Our UK companies continue to benefit from government policies on tax that encourage investment in research and development activities. In the year a research and development tax credit of GBP0.2 million was accrued in the income statement included within administration costs (2018: GBP0.2 million).
Earnings per share
Adjusted earnings per share were (0.2) pence versus (0.4) pence in the prior year. The adjusted loss after tax of GBP0.27 million is an improvement on the prior year adjusted loss after tax of GBP0.47 million, calculated on a fully diluted 127.1 million (2018: 122.8 million) shares in issue. Statutory earnings per share were 0.8 pence (2018: (6.0 pence)) on statutory profit after tax of GBP0.97 million (2018: loss of GBP7.27 million).
Research and development
During the year, we invested a total of GBP2.60 million in all development activities (2018: GBP3.04 million), representing 26.6% of Group turnover. Expenditure on our Allergy project reduced to GBP0.98 million (2018: GBP1.25 million) as we brought certain previously outsourced functions in house. Despite this, we were able to extend the menu to 62 allergens in total at the end of the financial year. Expenditure on VISITECT(R) CD4 increased to GBP0.96 million (2018: GBP0.64 million) due to an increase in material costs reflecting more external evaluations taking place and more activity with the internal validation of manufacturing scale-up processes. Staff costs increased reflecting higher regulatory activity as we achieved CE marking for our VISITECT(R) CD4 Advanced Disease test and the support of applications to the ERPD and WHO prequalification processes.
We also increased expenditure on enhancements to our Food intolerance products, investing GBP0.51 million in the year (2018: GBP0.33 million).
There was GBPNil expenditure (2018: GBP0.47 million) on Allergodip(R) and GBPNil expenditure on malaria (2018: GBP0.20m) following the strategic closure decisions in the prior year, as noted above.
Of the total expenditure, GBP2.45 million (2018: GBP2.90 million) has been capitalised on the balance sheet in accordance with IAS 38 - Development Costs whilst earlier stage R&D expenditure of GBP0.15 million (2018: GBP0.15 million) has been expensed through the income statement.
A summary of the carrying value of capitalised development costs is shown in the table below:
Incurred
2018 in year 2019
GBP GBP GBP
------------ --------- --------- ----------
Allergy 5,859,530 940,709 6,800,239
VISITECT(R)
CD4 2,859,815 955,362 3,815,177
Food/other 466,870 553,930 1,020,800
------------ --------- --------- ----------
Total 9,186,215 2,450,001 11,636,216
------------ --------- --------- ----------
Property, plant and equipment
Expenditure on fixed assets in the year was GBP0.34 million, lower than in the prior year (2018: GBP0.47 million). Expenditure was split evenly across the two main UK sites with GBP0.19 million for the Alva site in Scotland and GBP0.15 million in the Littleport site in England and included expenditure on equipment for IT, manufacturing and development needs. Of this expenditure, GBP0.04 million was offset through new asset finance leases.
Financing
The Group generated a positive cash flow from its operating activities, principally from its Food intolerance testing segment, and this has been supplemented by its funding initiatives from other sources since the financial year end. The Group continues to have a strong relationship with the Bank of Scotland as principal bankers to the Group and, in September of this year, we agreed a further renewal of the overdraft facility of GBP2.0 million (2018: GBP2.0 million) until 30 September 2020.
Following the year end, the Group also received GBP0.18 million representing a contractual deferred consideration payment from the sale of the Infectious disease business.
In May 2019, the Group raised GBP0.64 million of new equity capital through a direct subscription from certain shareholders, resulting in the issue of 6,347,950 new ordinary shares of 4 pence each bringing the total number of shares issued at the date of this report to 133,307,010.
My colleagues have outlined the material uncertainties that exist with assumptions underpinning our internal forecasts. As a result, we have embarked on a fundraise to provide additional working capital to provide headroom for at least the next 12 months. As announced separately today, we propose to issue 17,000,000 new ordinary shares of 4 pence each through a placing and direct subscription with existing and new shareholders, to raise GBP1.7m and I thank all shareholders for their ongoing support.
Operating cash flow
The Group monitors its cash requirement carefully and it is a key priority to manage working capital efficiently and to be effective in converting operating income into cash.
Cash inflow from operating activities during the year was GBP0.37 million (2018: outflow of GBP0.83 million). The Group has achieved a conversion rate of adjusted operating loss (operating loss plus amortisation of intangible assets plus share-based payments) to operating cash of 379% (2018: 82%). At 31 March 2019, the Group was utilising its overdraft facility in the amount of GBP1.05 million, offset by positive cash balances of GBP0.31 million, giving a net overdraft utilisation of GBP0.74 million (2018: GBP0.1 million of cash). Certain post-balance sheet fundraising activities are noted in the financing section above. Our ability to continue to generate sufficient future operating cashflow is dependent, to a certain extent, on the sales traction achieved with VISITECT(R) CD4 once we receive the regulatory approvals that are expected shortly.
Kieron Harbinson
Group Finance Director
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2019
Year ending 31 March Year ending 31 March
2019 2018
Continuing Discontinued Continuing Discontinued
operations operations TOTAL operations operations TOTAL
GBP GBP GBP GBP GBP GBP
Revenue 8,756,756 1,002,563 9,759,319 8,329,471 5,223,255 13,552,726
Cost of sales (3,124,427) (471,468) (3,595,895) (2,850,188) (2,509,723) (5,359,911)
------------ ------------- ------------ ------------ ------------- ------------
Gross profit 5,632,329 531,095 6,163,424 5,479,283 2,713,532 8,192,815
GP% 64.3% 53.0% 63.2% 65.8% 52.0% 60.5%
Administration
costs (4,695,486) (445,550) (5,141,036) (5,356,261) (1,567,454) (6,923,715)
Selling and
marketing costs (1,532,980) (195,295) (1,728,275) (1,369,950) (920,567) (2,290,517)
Other income 324,794 0 324,794 31,080 0 31,080
------------ ------------- ------------ ------------ ------------- ------------
Operating (loss)
/ profit
before
exceptional
items (271,343) (109,750) (381,093) (1,215,848) 225,511 (990,337)
Exceptional
items 0 1,660,683 1,660,683 (225,720) (5,662,306) (5,888,026)
------------ ------------- ------------ ------------ ------------- ------------
Operating profit
after
exceptional
items (271,343) 1,550,933 1,279,590 (1,441,568) (5,436,795) (6,878,363)
Finance costs (97,085) 0 (97,085) (36,351) 0 (36,351)
Finance income 11 0 11 751 0 751
------------ ------------- ------------ ------------ ------------- ------------
(Loss)/profit
before taxation (368,417) 1,550,933 1,182,516 (1,477,168) (5,436,795) (6,913,963)
Tax credit /
(charge) 28,891 (237,154) (208,263) 265,404 0 265,404
Tax -
exceptional
item 0 0 0 0 (621,038) (621,038)
(Loss)/profit
for the year (339,526) 1,313,779 974,253 (1,211,764) (6,057,833) (7,269,597)
------------ ------------- ------------ ------------ ------------- ------------
Other
comprehensive
income
to be
reclassified
to P&L in
subsequent
periods
Exchange
differences on
translation of
foreign
operations 20,568 (2,331) 18,237 (8,431) 41,483 33,052
Recycling of
translation
reserve on
foreign
operations 0 41,886 41,886 0 0 0
Tax charge (91) 0 (91) (11,988) 0 (11,988)
Other comprehensive income not to be reclassified
to P&L in
subsequent
periods
Actuarial loss
on defined
benefit
pensions 0 0 0 (258,449) (258,449)
Tax credit 0 0 0 0 49,105 49,105
------------ ------------- ------------ ------------ ------------- ------------
Other
comprehensive
income
for the year 20,477 39,555 60,032 (20,419) (167,861) (188,280)
Total
comprehensive
income
for the year (319,049) 1,353,334 1,034,285 (1,232,183) (6,225,694) (7,457,877)
------------ ------------- ------------ ------------ ------------- ------------
Earnings Per
Share (EPS)
Basic and
Diluted EPS on
profit for the
year (0.3p) 1.0p 0.8p (1.0p) (5.0p) (6.0p)
Adjusted PBT
(Loss)/profit
before taxation (368,417) 1,550,933 1,182,516 (1,477,168) (5,436,795) (6,913,963)
Exceptional
items 0 (1,660,683) (1,660,683) 225,720 5,662,306 5,888,026
IAS 19 pension
charges 0 0 0 0 1,646 1,646
Amortisation of
intangibles 116,156 24,573 140,729 120,013 118,458 238,471
Share based
payments 34,201 0 34,201 52,270 0 52,270
Adjusted
(Loss)/profit
before
taxation (218,060) (85,177) (303,237) (1,079,165) 345,615 (733,550)
------------ ------------- ------------ ------------ ------------- ------------
Adjusted EPS on
loss for
the year (0.1p) (0.1p) (0.2p) (0.7p) 0.3p (0.4p)
Adjusted loss before taxation is derived by taking statutory profit before taxation and adding back exceptional items, IAS19 pension charges, amortisation of intangible assets and share based payment charges. This is not a primary statement and the reported numbers are non-GAAP measures.
Consolidated Balance Sheet
as at 31 March 2019
2019 2018
GBP GBP
ASSETS
Non-current assets
Intangibles 17,044,293 15,029,448
Property, plant and equipment 1,569,581 1,712,933
Deferred taxation 1,371,260 1,250,082
19,985,134 17,992,463
------------ ------------
Current assets
Inventories 1,000,700 1,823,961
Trade and other receivables 2,489,389 2,969,410
Cash and cash equivalents - 115,719
3,490,089 4,909,090
------------ ------------
Total assets 23,475,223 22,901,553
------------ ------------
EQUITY AND LIABILITIES
Equity
Issued capital 19,797,343 19,797,343
Retained earnings (1,677,106) (2,685,469)
Other reserves 70,405 10,282
Total equity 18,190,642 17,122,156
------------ ------------
Liabilities
Non-current liabilities
Long-term borrowings 78,478 728,830
Deferred taxation 2,036,593 1,619,795
Deferred income 864,255 357,360
Retirement benefit deficit - 317,294
Total non-current liabilities 2,979,326 3,023,279
------------ ------------
Current liabilities
Short-term borrowings 98,574 154,049
Bank overdraft 744,708 -
Trade and other payables 1,461,973 2,602,069
Total current liabilities 2,305,255 2,756,118
------------ ------------
Total liabilities 5,284,581 5,779,397
------------ ------------
Total equity and liabilities 23,475,223 22,901,553
------------ ------------
Consolidated Statement of Changes in Equity
for the year ended 31 March 2019
Issued Retained Translation
Capital earnings reserve Total
GBP GBP GBP GBP
Balance at 31 March 2017 16,727,516 4,753,190 (22,770) 21,457,936
------------------------------- ----------- ------------ ------------ ------------
Issue of share capital for
cash consideration 3,264,910 - - 3,264,910
Expenses in connection with
share issue (195,083) - - (195,083)
Loss for the year ended
31 March 2018 - (7,269,597) - (7,269,597)
Other comprehensive income
- net - - 33,052 33,052
exchange adjustments
Other comprehensive income
- actuarial
loss on defined benefit
pensions - (258,449) - (258,449)
Other comprehensive income
- tax charge - 37,117 - 37,117
Total comprehensive income
for the year - (7,490,929) 33,052 (7,457,877)
Share-based payments - 52,270 - 52,270
Balance at 31 March 2018 19,797,343 (2,685,469) 10,282 17,122,156
------------------------------- ----------- ------------ ------------ ------------
Profit for the year ended
31 March 2019 - 974,253 - 974,253
Other comprehensive income
- net - - 18,237 18,237
exchange adjustments
Other comprehensive income
- net
exchange adjustments recycled - - 41,886 41,886
Other comprehensive income
- tax charge - (91) - (91)
Total comprehensive income
for the year - 974,162 60,123 1,034,285
Share-based payments - 34,201 - 34,201
Balance at 31 March 2019 19,797,343 (1,677,106) 70,405 18,190,642
------------------------------- ----------- ------------ ------------ ------------
Consolidated Cash Flow Statement
for the year ended 31 March 2019
2019 2018
GBP GBP
Cash flows generated from operations
Profit/(loss) for the year 974,253 (7,269,597)
Adjustments for:
Taxation 208,263 (265,404)
Taxation - exceptional item - 621,038
Finance costs 97,085 36,351
Finance income (11) (751)
------------------------------------------- ------------ ------------
Operating profit/(loss) before working
capital movement 1,279,590 (6,878,363)
Decrease/(increase) in trade and
other receivables 620,452 (508,994)
Decrease in inventories 196,438 553,614
(Decrease)/increase in trade and
other payables (1,078,435) 839,110
Loss on sale of property, plant and
equipment - 1,648
(Net liabilities written off)/asset
provisions (758,875) 4,476,316
Gain on sale of legacy infectious
disease business (901,808) -
Depreciation 332,461 386,105
Amortisation of intangible assets 140,729 238,471
Movement in grants 382,234 119,293
Share-based payments 34,201 52,270
Taxation 121,832 (107,967)
Cash flow from/(used in) operating
activities 368,819 (828,497)
------------------------------------------- ------------ ------------
Investing activities
Finance income 11 751
Proceeds from sale of legacy infectious
disease business 1,800,000 -
Purchase of property, plant and equipment (339,817) (472,140)
Purchase of intangible assets (2,354,659) (2,806,900)
Net cash used in investing activities (894,465) (3,278,289)
------------------------------------------- ------------ ------------
Financing activities
Finance costs (97,085) (36,351)
Proceeds from issue of share capital - 3,264,910
Expenses of share issue - (195,083)
New asset backed finance 40,500 625,330
Drawdown of overdraft facility 744,708 -
Finance lease repayments (153,153) (173,837)
Net cash from financing activities 534,970 3,484,969
------------------------------------------- ------------ ------------
Net increase/(decrease) in cash and
cash equivalents 9,324 (621,817)
Effects of exchange rate movements (125,043) 205
Cash and cash equivalents at beginning
of year 115,719 737,331
Cash and cash equivalents at end
of year - 115,719
------------------------------------------- ------------ ------------
Notes to the Preliminary Announcement
for the year ended 31 March 2019
1. Basis of preparation
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 434(3) of the Companies Act 2006.
The consolidated balance sheet at 31 March 2019 and the consolidated statement of comprehensive income, consolidated cash flow statement, consolidated statement of changes in equity and associated notes for the year then ended have been extracted from the Group's financial statements which were approved by the Board of Directors on 20 September 2019 and are audited. The comparative consolidated financial information for the year ended 31 March 2018 is based on an abridged version of the Group's published financial statements for that year, which contained an unqualified audit report and which have been filed with the Registrar of Companies.
The statutory accounts for 2019 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the registrar of companies.
The consolidated financial statements have been prepared in accordance with IFRS as adopted by the European Union as they apply to the financial statements of the Group for the year ended 31 March 2019.
Basis of consolidation
The Group financial statements consolidate the financial statements of Omega Diagnostics Group PLC and the entities it controls (its subsidiaries). Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are based on consistent accounting policies. All intercompany balances and transactions, including unrealised profits arising from them, are eliminated.
Going concern
The Directors are required to prepare financial statements on a going concern basis unless the Directors either intend to cease trading or have no realistic alternative but to do so. These financial statements have been prepared on a going concern basis, which contemplates the realisation of assets and the payment of liabilities in the ordinary course of business. The Group realised a profit of GBP974k for the year ended 31 March 2019 (2018: loss of GBP7,270k). As at 31 March 2019, the Group had net current assets of GBP1,185k and an undrawn overdraft facility of GBP1,255k. Management has negotiated an extension to the overdraft facility, which is now renewable at 30 September 2020.
The Directors have considered the future funding requirements of the Group and have prepared detailed forecasts which take into account its anticipated business activities with regards to its two VISITECT(R) CD4 products (VISITECT(R) CD4 350 and VISITECT(R) CD4 Advanced Disease), its current banking facilities, the principal risks and uncertainties the Group faces and other factors impacting the Group's future performance.
These forecasts extend to September 2020. There are a number of assumptions applied by the Directors underpinning the forecasts which are uncertain and outside of management's control:
Timing of regulatory approvals and associated orders
The forecasts are prepared on the assumption that approval from the Nigerian Ministry of Health ("MOH") in relation to the Company's VISITECT(R) CD4 350 test will be received by November 2019.
The Directors are encouraged that there will be a favourable outcome in respect of the MOH approval, given that an in-country product evaluation in six Nigerian States has completed with the product performing in line with expectations. The evaluation coordinator is in the process of submitting a report for review by the MOH and, if successful, the VISITECT(R) CD4 350 test will be adopted into the national HIV policy in Nigeria.
Committed orders for 20k units of the VISITECT(R) CD4 Advanced Disease test have been received with other low value orders for the VISITECT(R) CD4 350 test having already been completed. The fulfilment of these customer orders provides comfort to the Directors that there is a market for the CD4 product range. However, volume sales of both products are intrinsically dependent upon the approval outlined above with management already having received an order for 50k VISITECT(R) CD4 350 tests contingent upon the receipt of the MOH approval. Any delay in receiving approvals would influence the timing of receipt of significant customer orders.
Short term working capital funding
The Directors recognise the implications to short term working capital levels should there be delays in regulatory approval processes and subsequent timing of receipt of orders from customers. Management forecasts highlight a potential funding requirement if regulatory approval and subsequent receipt of purchase orders is delayed.
The Directors have commenced an equity fund raising intended to raise GBP1.7m from existing and new shareholders. After meeting with shareholders and their advisors, the Directors are confident that a fundraise would be successful with the key next step being gaining the required approvals in General Meeting.
At the date of finalising the financial statements, the timing of in-country approval from the Nigerian MOH in relation to VISITECT(R) CD4 350 test, timing and volume of sales orders for both VISITECT(R) CD4 350 & VISITECT(R) CD4 Advanced Disease tests and status of the proposed equity raise are circumstances that are outside of management's control. As a result, these represent material uncertainties, that may cast significant doubt on the Group's ability to continue as a going concern.
These financial statements do not include the adjustments that would be required if the Group was unable to continue as a going concern. If the going concern basis of preparation was no longer appropriate, adjustments would be required which would include reducing the balance sheet values of assets to their recoverable amounts and to provide for further liabilities that might arise.
2. Segment information - Continuing operations
Allergy Food Infectious/
and
Autoimmune Intolerance Other Corporate Group
2019 GBP GBP GBP GBP GBP
----------- ------------ ------------ ------------ ------------
Statutory presentation
Revenue 401,251 8,226,864 351,227 - 8,979,342
Inter-segment revenue - (176,722) (45,864) - (222,586)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Total revenue 401,251 8,050,142 305,363 - 8,756,756
Cost of sales (139,400) (2,468,212) (516,815) - (3,124,427)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Gross profit/(loss) 261,851 5,581,930 (211,452) - 5,632,329
Operating costs (114,508) (2,820,935) (1,578,500) (1,389,730) (5,903,672)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Operating profit/(loss) before
exceptional items 147,343 2,760,995 (1,789,952) (1,389,730) (271,344)
Share-based payment charges - - - 34,201 34,201
Depreciation 7,474 230,163 83,018 - 320,655
Amortisation 441 99,862 15,853 - 116,156
EBITDA 155,258 3,091,020 (1,691,081) (1,355,529) 199,668
-------------------------------- ----------- ------------ ------------ ------------ ------------
Share-based payment charges - - - (34,201) (34,201)
Depreciation (7,474) (230,163) (83,018) - (320,655)
Amortisation (441) (99,862) (15,853) - (116,156)
Net finance costs (102) (3,311) (11,706) (81,955) (97,074)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Profit / (loss) before tax 147,241 2,757,684 (1,801,658) (1,471,685) (368,418)
Share-based payment charges - - - 34,201 34,201
Amortisation 441 99,862 15,853 - 116,156
Adjusted profit/(loss) before
tax 147,682 2,857,546 (1,785,805) (1,437,484) (218,061)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Allergy Food Infectious/
and
Autoimmune Intolerance Other Corporate Group
2018 GBP GBP GBP GBP GBP
----------- ------------ ------------ ------------ ------------
Statutory presentation
Revenue 588,426 9,106,780 488,546 - 10,183,752
Inter-segment revenue (100,541) (1,550,702) (203,038) - (1,854,281)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Total revenue 487,885 7,556,078 285,508 - 8,329,471
Cost of sales (239,008) (2,132,733) (478,447) - (2,850,188)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Gross profit/(loss) 248,877 5,423,345 (192,939) - 5,479,283
Operating costs (383,375) (3,030,531) (1,238,354) (2,042,871) (6,695,131)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Operating (loss)/profit before
exceptional items (134,498) 2,392,814 (1,431,293) (2,042,871) (1,215,848)
Share-based payment charges - - - 52,270 52,270
Depreciation - 170,721 60,469 - 231,190
Amortisation 1,750 101,130 17,133 - 120,013
EBITDA (132,748) 2,664,665 (1,353,691) (1,990,601) (812,375)
-------------------------------- ----------- ------------ ------------ ------------ ------------
Share-based payment charges - - - (52,270) (52,270)
Depreciation - (170,721) (60,469) - (231,190)
Amortisation (1,750) (101,130) (17,133) - (120,013)
Net finance costs (333) (2,970) (14,372) (17,925) (35,600)
Exceptional items - - - (225,720) (225,720)
-------------------------------- ----------- ------------ ------------ ------------ ------------
(Loss)/profit before tax (134,831) 2,389,844 (1,445,665) (2,286,516) (1,447,168)
Share-based payment charges - - - 52,270 52,270
Amortisation 1,750 101,130 17,133 - 120,013
Exceptional items - - - 225,720 225,720
Adjusted (loss)/profit before
tax (133,081) 2,490,974 (1,428,532) (2,008,526) (1,079,165)
-------------------------------- ----------- ------------ ------------ ------------ ------------
3. Revenues - Continuing
operations
2019 2018
GBP GBP
---------------------------- ---- ---- ---------- ----------
UK 608,106 795,685
Germany -
Rest of Europe 2,785,310 2,848,962
North America 1,912,781 1,981,926
South/Central America 488,891 291,964
India 699,624 674,739
Asia and Far East 1,482,321 891,176
Africa and Middle East 779,723 845,019
8,756,756 8,329,471
---- ---- ---------- ----------
4. Finance costs
2019 2018
GBP GBP
------------------------------------- ------- ------------
Interest payable on bank overdrafts 86,849 21,676
Finance leases 10,236 14,675
97,085 36,351
------------------------------------- ------- ------------
5. Taxation
2019 2018
GBP GBP
----- ----------------------------------------------- --- ---------- ---------- -------------
Tax credited/(charged) in the income
statement
Current tax - prior year
adjustment 121,832 (59,447)
Deferred tax - current
year (92,833) 291,078
Deferred tax - prior year
adjustment (237,262) 33,773
(208,263) 265,404
-------- ----------------------------------------- ------ ---------- ---------- -------------
Tax relating to items charged or credited to other comprehensive
income
Deferred tax on actuarial
loss on
retirement benefit obligations - 49,105
Deferred tax on net exchange
adjustments (91) (11,988)
(91) 37,117
-------- ------------------------------------------ ------ --------- ---------- ---------
Reconciliation of total tax
charge/(credit)
Factors affecting the tax charge/(credit)
for the year:
Profit/(loss) before
tax 1,182,516 (6,913,963)
-------------------------------------------------------------- -------------- ------------
Effective rate of taxation 19% 19%
Profit/(loss) before tax multiplied by
the effective rate of tax 224,678 (1,313,653)
Effects of:
Expenses not deductible for tax purposes and permanent
differences 45,632 25,135
Research and development and deferred
tax credits (126,571) (148,579)
Losses in year not recognised (relating to
closed German and India operations) 127,048 168,733
Tax repayment on surrender of tax losses/tax
underprovided in prior
years 115,430 25,674
Exceptional items (relating to closed German
and India operations) (172,820) 1,075,838
Adjustment due to different overseas tax rate 7,124 (112,079)
Impact of UK rate change on deferred tax (12,258) 13,527
Tax charge/(credit) for
the year 208,263 (265,404)
---------------------------------------------- ------- --- -------------- ------------
6. Earnings per share
Basic Earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Diluting events are excluded from the calculation when the average market price of ordinary shares is lower than the exercise price.
2019 2018
GBP GBP
---------------------------------------------- -------- ------------
Profit/(loss) attributable to equity holders
of the Group 974,253 (7,269,597)
----------------------------------------------- -------- ------------
2019 2018
Number Number
------------------------------------------- ------------ ------------
Basic average number of shares 126,959,060 121,470,093
Share options 163,517 1,346,731
Diluted weighted average number of shares 127,122,577 122,816,824
-------------------------------------------- ------------ ------------
Adjusted Earnings per share on profit for the year
The Group presents adjusted earnings per share which is calculated by taking adjusted profit before taxation and adding the tax credit or deducting the tax charge in order to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends and financial performance.
2019 2018
GBP GBP
---------------------------------------------- ---------- ----------
Adjusted loss before taxation (303,237) (733,550)
Tax credit 28,891 265,404
Adjusted loss attributable to equity holders
of the Group (274,346) (468,146)
----------------------------------------------- ---------- ----------
The 2019 tax credit of GBP28,891 is derived from the total tax charge in the year of (GBP208,263) and deducting the tax charge of (GBP237,154) in relation to exceptional items giving the tax credit of GBP28,891.
7. Trade and other payables
2019 2018
GBP GBP
----------------------------- ---------- ---------------
Trade payables 548,325 1,436,159
Social security costs 180,688 232,801
Accruals and other payables 732,960 933,109
1,461,973 2,602,069
----------------------------- ---------- ---------------
Following the decision by Omega Diagnostics Group PLC ("ODG") to place Omega Diagnostics GmbH ("GmbH") into insolvency, formal proceedings were lodged in the German civil court on 1 September 2018 and a permanent administrator was appointed. The administrator's role is to protect creditors of GmbH and in this regard, he can review transactions between GmbH and other group companies for the period beginning 12 months before the insolvency commenced, to see if any creditor has been disadvantaged. In this period, there were intercompany cash transactions between ODG and GmbH through a loan account which operated as a current account through which payments and repayments were made between ODG and GmbH. In September 2017, GmbH made a repayment to ODG of EUR500k, subsequent to which, ODG made payments to GmbH totalling EUR400k up to March 2018. In February 2019, the administrator to GmbH wrote an out of court letter to ODG's German lawyer outlining why it believed it had a claim on ODG for repayment of the EUR500k. In March 2019, ODG's German lawyer responded to the administrator outlining why ODG's exposure is limited to EUR100k. The relevant parties remain in discussion and ODG is carrying a provision which, in the opinion of the directors, is sufficient to cover any claim that might arise.
The information usually provided by IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' is not disclosed on the grounds that it can be expected to seriously prejudice the position of the Group in the dispute.
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.
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FR SEMFWFFUSELU
(END) Dow Jones Newswires
September 23, 2019 02:00 ET (06:00 GMT)
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