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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 |
TIDMODX
RNS Number : 4256H
Omega Diagnostics Group PLC
24 November 2022
OMEGA DIAGNOSTICS GROUP PLC
("Omega" or the "Company" or the "Group")
INTERIM RESULTS
FOR THE SIX MONTHSED 30 SEPTEMBER 2022
Omega (AIM: ODX), the specialist medical diagnostics company focused on promoting a personalised and functional approach to health and nutrition, announces its unaudited interim results for the six months ended 30 September 2022.
Operational Highlights:
-- Pivoted the business to focus solely and strategically on the Health and Nutrition diagnostics business ( formerly known as Food Intolerance)
-- Disposal of loss-making CD4 business for GBP6.3m completed in July 2022
o Positive WHO data received for VISITECT(R) CD4 test
o Accubio have approved the release from escrow of the full GBP4.0m deferred consideration
-- Automation project delivered, bringing greater laboratory efficiencies and helping to attract new customers
-- Lease extension agreed for current premises at Eden Research Park, Littleport -- My Health Tracker by Omega app in final stage beta testing
Financial Highlights:
-- Revenue down by 18% to GBP3.4m (H1 2021: GBP4.2m) -- Gross margin decreased to 54.0% (H1 2021: 64.4%) -- Loss before tax of GBP0.7m (H1 2021: GBP0.0m) -- Adjusted EBITDA loss(1) of GBP0.2m (H1 2021: profit GBP0.4m) -- Loss on discontinued operations GBP1.4m (H1 2021: GBP3.4m) -- Gross equity fund raise of GBP2.2m completed -- Cash balance GBP2.7m (H1 2021: GBP4.7m)
(1) Adjusted for exceptional items, amortisation of intangible assets and share based payment charges
Post period highlights:
-- Initial product range expansion complete, concluding with heads of terms signed for:
-- Development of a bespoke microbiome test
-- Development of a bespoke nutrigenomics test
-- My Health Tracker by Omega App in final beta testing phase ahead of January 2023 launch -- New all-staff share incentive plan launched to help retain and motivate employees
Commenting on the results, Simon Douglas, Chairman, said: " We are pleased to have executed on our strategic decision to re-align the Group in the period, disposing of the loss-making business in Alva, reducing operating costs and focusing solely on the profitable and cash generative Health and Nutrition business and we are delighted to be notified of the impending release of the full CD4 deferred consideration of GBP4.0m. We have implemented the plan we set out to shareholders, growing our installed base, introducing our new digital platform and signing two partnership agreements which will expand our product portfolio and drive additional revenue growth. Our plans to create a US market presence will be progressed following the receipt of the remainder of the CD4 sale proceeds.
"Whilst we expect a stronger second half, our full year sales will be marginally lower than previously anticipated to reflect the delayed US investment plans. The performance expectations of the remainder of our business remain unchanged and the Group continues to target EBITDA break even this year."
Investor presentation
Jag Grewal, CEO, and Chris Lea, CFO, will provide a live presentation relating to the Interim Results via the Investor Meet Company platform today at 4:30pm GMT. The presentation is open to all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and add to meet OMEGA DIAGNOSTICS GROUP PLC via:
https://www.investormeetcompany.com/omega-diagnostics-group-plc/register-investor
The investor presentation will be available later this morning on the Company website:
https://www.omegadx.com/Investor-Relations/Corporate-Information
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 www.omegadiagnostics.com Jag Grewal, Chief Executive via Walbrook PR Chris Lea, Chief Financial Officer finnCap Ltd Tel: 020 7220 0500 Geoff Nash/Edward Whiley (Corporate Finance) Alice Lane/ Harriet Ward (ECM) Walbrook PR Limited Tel: 020 7933 8780 or omega@walbrookpr.com Paul McManus / Lianne Applegarth Mob: 07980 541 893 / Mob: 07584 391 303 / / Sam Allen Mob: 07502 558 258
About Omega
Omega manufactures and distributes high quality in-vitro diagnostic products for use in hospitals, clinics, laboratories and healthcare practitioners in over 85 countries.
Chairman's Statement
This period marks the start of an exciting time and a new era for Omega. The new management team has, in a relatively short time, disposed of the Alva site to reduce operating costs, raised additional capital and successfully divested the loss-making CD4 business, re-aligning the Group to allow the Board to exclusively focus on the profitable and cash generative Health and Nutrition business.
In terms of the continuing menu expansion of our diagnostic tests, and in-line with our stated strategy, we were delighted to announce the signing of two successful heads of term agreements after the period end to develop both a bespoke microbiome and nutrigenomic test. For a modest initial outlay, these tests have the potential to generate more than GBP1m in additional revenue in the year ending 31 March 2024.
We recently began beta testing a mobile application that is available via Apple iPhone and Google Android. The My Health Tracker by Omega App is a health and wellbeing tool designed to be used alongside a trained healthcare professional, allowing the patient to receive laboratory test results direct to their smartphone thereby helping the patient make personalised changes to their diet for optimal health. The app is currently in the final beta testing stage, being trialled using our own CNS Lab data, before the planned market launch early in the new year.
T he Board has made the sensible and prudent decision to delay the planned investment in the US market until after receipt of the remaining CD4 sale proceeds. We are delighted that Accubio share the Board's view that the CD4 test performs well and that they have now agreed to the release of the full GBP4.0m held in escrow, rather than wait for the report to be published by the World Health Organization. The Company remains committed to geographical expansion in the US and remains confident for the prospects of future growth in the US food sensitivity testing market, as it is estimated to be the largest and most established market in the world. This model would replicate our CNS Laboratory service direct-to-health-care-professionals, which is growing strongly in the UK this year.
Finally, we launched a new all-employee share incentive plan, 'Omega Diagnostics Group PLC Share Incentive Plan' which has been adopted to support the principles of wider share ownership amongst all the Company's staff, supporting retention and motivation of our employees.
Financial performance
As previously indicated revenues have been softer than the prior period, down 18% to GBP3.4m (2021: GBP4.2m) primarily due to a number of product re-registrations being in process following a significant regulatory-driven technical product change undertaken in May 2022, and variability in the ordering profile of many of the Group's FoodPrint(R) distributors, including those in the Middle East and North America. The Board confirms its expectation that revenues will be stronger in the second half of the financial year.
Revenue by product group:
-- Sales of FoodPrint(R) were down 24% to GBP2.2m (2021: GBP2.9m)
-- Five new FoodPrint(R) installations were implemented in the period, with a further two installations implemented since the period end
-- Representation secured in seven territories for the first time, now selling into over 85 countries
-- A new FoodPrint(R) installation has been agreed for the US, the first new installation in that market for five years
-- Sales of Food Detective(R) were GBP0.7m, down by 4% from the prior year
-- After a two-year hiatus, the Group's largest partner in China has now re-commenced ordering for delivery in H2, which will support growth into the second part of the financial year.
-- CNS Lab sales were up 67% to GBP0.4m (2021: GBP0.3m)
-- Due in large part to extensive work with a business partner to better commercialise FoodPrint(R) direct to consumer, as well as the UK commercial team onboarding 134 new Practitioner accounts in the first half of the financial year.
Gross profit from operations decreased to GBP1.9m (2021: GBP2.7m) with a lower gross margin percentage of 54.0% (2021: 64.4%). The reduction in margin principally reflects the lower proportion of the higher margin FoodPrint(R) tests in the product mix , coupled with lower labour efficiency given the reduced volumes. The Board are confident that margins will improve in H2 as the Company will benefit from improved operational efficiencies going forward.
Overheads reduced by 6% to GBP2.5m (2021: GBP2.7m). Despite centralised sales and marketing activities being wholly allocated to Health and Nutrition this year, significant reductions have been achieved in corporate costs. During the period we also restructured our quality assurance and regulatory teams, combining the two functions to reduce costs and better reflect the needs of our new business model.
In order to continually evolve as a business, remain competitive and further improve the customer experience and efficiency, especially for our larger customers, Omega has recently completed the validation processes to allow laboratories to automate their FoodPrint(R) testing using the Dynex DS2(R) instrument. This has already allowed our partner in the United Arab Emirates to secure a new three-year contract with the Dubai Health Authority and will allow our larger laboratory customers to process more tests more effectively and efficiently than ever before.
The Group continues to consider EBITDA and adjusted EBITDA (adjusted for exceptional items and share based payment costs) as being the more appropriate measures of profitability which are better aligned with the cash generating activities of the business. The EBITDA for the period was a loss of GBP0.3m (2021: profit of GBP0.3m) and the adjusted EBITDA loss was GBP0.2m (2021: profit of GBP0.4m).
The cash balance on 30 September 2022 was GBP2.7m (31 March 2022: GBP4.7m). The overdraft facility of GBP2.0m was withdrawn effective 30 September 2022 as previously advised and the current cash balance remains stable at GBP2.5m. The Company expects to receive the full GBP4.0m of deferred consideration from the sale of the CD4 business in the very near future.
Product Menu Expansion
As previously set out in the Company's strategic plan, in order to build a wider menu of complementary gut health tests, the Board remains committed to expanding the product menu and post-period end have successfully concluded two partnership agreements for the development of bespoke reports for microbiome and nutrigenomic testing.
The first agreement was announced in October 2022, when the Company signed a heads of terms partnership agreement to commercialise microbiome testing into its existing sales channels. We are working in partnership with our microbiome test provider to develop and commercialise a bespoke report for Omega, utilising the partner's proprietary software and Omega's sales channel, in order to provide a more comprehensive gut health assessment. Understanding the microbiome is the new frontier of understanding chronic inflammatory conditions arising from poor gut health and is an area the Company has recently seen a growing demand from its existing customer base.
The second agreement was secured earlier this month, when the Company signed heads of terms with a leading nutrigenomics software provider to develop and commercialise a bespoke DNA report. Nutrigenomics allows the healthcare professional to understand genetic strengths and weaknesses, helping to identify dietary changes that can help achieve better health.
These two tests require a combined up-front investment of GBP0.3m which mainly covers the advance purchase of future test reports and these new reports have the potential to generate over GBP1m in additional revenue in the year ending 31 March 2024.
New facility update
The Company has long planned to relocate to a new, purpose-built facility in Ely, Cambridgeshire, which would improve the manufacturing environment and provide the capacity needed for longer term expansion, however we continue to face unresolved issues with regards to the completion of the building to the agreed standard. The Company has appointed surveyors to identify remedial works and to assist in the re-negotiation of the Agreement for Lease, but it is not certain these issues can be overcome to the Company's satisfaction. Given the funding challenges currently faced by the new landlord and the likely timescale involved, an agreement has been reached with the existing landlord to extend the Littleport lease by two years to June 2025, thus providing sufficient time to resolve the outstanding issues and facilitate an orderly relocation in due course.
Discontinued Operations update
CD4
Effective 31 July 2022, Omega successfully disposed of its loss-making CD4 business in Alva to Accubio Limited, a wholly-owned subsidiary of Zhejiang Orient Gene Biotech Co. Ltd for up to GBP6.3m, having concluded that the business would be more successful under new ownership.
Under the terms of the sale the Company received an immediate cash payment of approximately GBP1.3m for fixed assets and inventory, representing the book values of these assets. As previously announced, contingent on the successful outcome of the WHO review of a now-completed clinical study in Kenya the Company expected to receive up to an additional GBP4.0m for the intellectual property and a future royalty income stream capped at GBP1.0m in aggregate. The Company provided comments on the draft performance evaluation report arising from the study in October, with the main area of discussion being the content of the instructions for use leaflet. To the Company's knowledge, all outstanding points have now been resolved and the Company awaits publication of the final report by the WHO. On 23 November 2022, Accubio confirmed that in their opinion it was no longer necessary to await the publication of the final performance evaluation report by the WHO prior to funds being released and they have instructed their legal advisers to release the full GBP4.0m to Omega with immediate effect.
DHSC dispute
The Group remains in an ongoing dispute with the Department of Health and Social Care ('DHSC') regarding the potential repayment of a pre-production payment of GBP2.5m under a contract to manufacture COVID-19 lateral flow tests. The negotiations are continuing slowly, with mediation now expected to take place toward the end of Q1 2023. The Company can confirm that it has recently advised the DHSC of its substantial counter claim, claiming an additional GBP1m+ over and above the disputed GBP2.5m pre-production payment. Details of this counter claim will not be made public as this may be prejudicial to the dispute resolution process.
Outlook
We are pleased to have executed on our strategic decision to re-align the Group in the period, disposing of the loss-making business in Alva, reducing operating costs and focusing solely on the profitable and cash generative Health and Nutrition business and we are delighted to be notified of the impending release of the full CD4 deferred consideration of GBP4.0m. We have implemented the plan we set out to shareholders, growing our installed base, introducing our new digital platform and signing two partnership agreements which will expand our product portfolio and drive additional revenue growth. Our plans to create a US market presence will be progressed following the receipt of the remainder of the CD4 sale proceeds.
Whilst we expect a stronger second half, our full year sales will be marginally lower than previously anticipated to reflect the delayed US investment plans. The performance expectations of the remainder of our business remain unchanged and the Group continues to target EBITDA break even this year.
Simon Douglas
Non-Executive Chairman
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2022
6 months 6 months 12 months ended ended ended 30 September 30 September 31 March 2022 2021 2022 Note GBP'000 GBP'000 GBP'000 ------------------------------------------------ ---- ------------- ------------- ---------- Continuing operations Revenue 4 3,434 4,167 8,539 Cost of sales (1,581) (1,485) (3,437) ------------------------------------------------ ---- ------------- ------------- ---------- Gross profit 1,853 2,682 5,102 Administration costs (1,773) (2,146) (4,438) Selling and marketing costs (730) (512) (1,256) Other income - - - ------------------------------------------------ ---- ------------- ------------- ---------- Operating (loss)/profit before exceptional items (650) 24 (592) Exceptional items - - (337) ------------------------------------------------ ---- ------------- ------------- ---------- Operating (loss)/profit after exceptional items (650) 24 (929) Finance costs 5 (6) (12) (21) ------------------------------------------------ ---- ------------- ------------- ---------- (Loss)/profit before taxation (656) 12 (950) Tax credit/(expense) 6 - 682 (459) ------------------------------------------------ ---- ------------- ------------- ---------- (Loss)/profit for the period from continuing operations (656) 694 (1,409) ------------------------------------------------ ---- ------------- ------------- ---------- Discontinued operations Loss after tax for the period from discontinued operations 7 (1,431) (3,443) (9,924) ------------------------------------------------ ---- ------------- ------------- ---------- Loss for the period (2,087) (2,749) (11,333)
------------------------------------------------ ---- ------------- ------------- ---------- Other comprehensive income/(losses) to be reclassified to profit and loss in subsequent periods Exchange differences on translation of foreign operations 22 (18) 10 Recycling of translation reserve - 38 - Tax charge - (7) - ------------------------------------------------ ---- ------------- ------------- ---------- Other comprehensive income for the period 22 13 10 ------------------------------------------------ ---- ------------- ------------- ---------- Total comprehensive losses for the period (2,065) (2,736) (11,323) ------------------------------------------------ ---- ------------- ------------- ---------- Earnings per share (EPS) Basic and diluted EPS on loss for the period 8 (0.9)p (1.5)p (6.2)p Earnings per share for continuing operations Basic and diluted EPS on (loss)/profit for the period from continuing operations 8 (0.3)p 0.4p (0.9)p ------------------------------------------------ ---- ------------- ------------- ----------
Consolidated Balance Sheet
as at 30 September 2022
As restated* 30 September 30 September 31 March 2022 2021 2022 Note GBP'000 GBP'000 GBP'000 -------------------------------------------- ---- ------------ ------------- -------- ASSETS Non-current assets Intangibles 9 4,556 9,906 4,745 Property, plant and equipment 10 1,062 3,524 1,138 Right of use assets 10 62 1,692 106 Deferred taxation 1,120 2,754 1,107 -------------------------------------------- ---- ------------ ------------- -------- Total non-current assets 6,800 17,876 7,096 -------------------------------------------- ---- ------------ ------------- -------- Current assets Inventories 1,074 2,232 1,094 Trade and other receivables 6,544 2,606 3,045 Cash and cash equivalents 2,712 4,698 1,605 -------------------------------------------- ---- ------------ ------------- -------- Total current assets 10,330 9,536 5,744 -------------------------------------------- ---- ------------ ------------- -------- Assets held for sale - - 4,995 -------------------------------------------- ---- ------------ ------------- -------- Total assets 17,130 27,412 17,835 -------------------------------------------- ---- ------------ ------------- -------- EQUITY AND LIABILITIES Equity Share capital 10,244 8,042 8,044 Share premium 25,100 25,331 25,340 Retained deficit (23,534) (13,064) (21,537) Translation reserve (8) (21) (31) Total equity 11,802 20,288 11,816 -------------------------------------------- ---- ------------ ------------- -------- Liabilities Non-current liabilities Long-term borrowings 35 628 51 Lease liabilities - 1,670 23 Corporation tax - 13 - Deferred income 2,500 2,643 2,500 -------------------------------------------- ---- ------------ ------------- -------- Total non-current liabilities 2,535 4,954 2,574 -------------------------------------------- ---- ------------ ------------- -------- Current liabilities Short-term borrowings 31 186 204 Lease liabilities 69 168 92 Trade and other payables 2,282 1,816 2,674 -------------------------------------------- ---- ------------ ------------- -------- Total current liabilities 2,382 2,170 2,970 -------------------------------------------- ---- ------------ ------------- -------- Liabilities directly associated with assets held for sale 411 - 475 -------------------------------------------- ---- ------------ ------------- -------- Total liabilities 5,328 7,124 6,019 -------------------------------------------- ---- ------------ ------------- -------- Total equity and liabilities 17,130 27,412 17,835 -------------------------------------------- ---- ------------ ------------- --------
* See note 2 for details regarding the restatement.
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2022
As restated* Share Share Retained Translation As restated* capital premium deficit reserve Total Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Balance at 31 March 2021 as reported 8,028 25,288 (9,601) (41) 23,674 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Development costs written off 2 - - (290) - (290) ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Restated balance at 31 March 2021 8,028 25,288 (9,891) (41) 23,384 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Loss for the period to 30 September 2021 - - (2,749) - (2,749) Other comprehensive losses - net exchange adjustments - - - (18) (18) Other comprehensive (losses)/income - net exchange adjustments recycled - - (38) 38 - Other comprehensive losses - - (7) - (7) ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Total comprehensive (losses)/income for the period - - (2,794) 20 (2,774) Share options exercised 14 43 - - 57 Share-based payments - - 90 - 90 Deferred tax debit related to share-based payments - - (469) - (469) ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Restated balance at 30 September 2021 8,042 25,331 (13,064) (21) 20,288 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Loss for the period to 31 March 2022 - - (8,584) - (8,584) Other comprehensive income - net exchange adjustments - - - 28 28 Other comprehensive income/(losses) - net exchange adjustments recycled - - 38 (38) - Other comprehensive income - - 7 - 7 Total comprehensive losses for the period - - (8,539) (10) (8,549) Share options exercised 2 9 - - 11 Share-based payments - - 192 - 192 Deferred tax debit related to share-based payments - - (126) - (126) At 31 March 2022 8,044 25,340 (21,537) (31) 11,816 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Loss for the period to 30 September 2022 - - (2,087) - (2,087) Other comprehensive income - net exchange adjustments - - - 23 23 Total comprehensive (losses)/income for the period - - (2,087) 23 (2,064) Issue of share capital for cash consideration 2,200 - - - 2,200 Expenses in connection with share issue - (240) - - (240) Share-based payments - - 90 - 90 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------ Balance at 30 September 2022 10,244 25,100 (23,534) (8) 11,802 ----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
* See note 2 for details regarding the restatement.
Consolidated Cash Flow Statement
for the six months ended 30 September 2022
As restated* 6 months 6 months 12 months ended ended ended 30 September 30 September 31 March 2022 2021 2022 GBP'000 GBP'000 GBP'000 -------------------------------------------------- ------------- ------------- --------- Cash flows generated from operations (Loss)/profit for the year from continuing operations (656) 694 (1,409) Loss for the year from discontinued operations (1,431) (3,443) (9,924) Adjustments for: Gain on disposal of fixed assets - - (7) Loss on disposal of Alva site fixed assets - - 226 Depreciation 120 301 671 Amortisation of intangible assets 225 352 618 Impairment and derecognition of intangible assets 15 80 47 Impairment of fixed assets 27 - - Impairment loss recognised on the remeasurement to fair value 149 - 1,915 Share-based payments 90 90 282 Taxation - (682) 833 Omega Diagnostic GmbH liability settlement - - (126) Finance costs 21 92 180 --------------------------------------------------- ------------- ------------- --------- Cash outflow from operating activities before working capital movement (1,440) (2,516) (6,694) Decrease in trade and other receivables 672 1,569 1,130 (Increase)/decrease in inventories (168) 6 480 Decrease in trade and other payables (843) (856) (137) Movement in grants (4) (5) (8) Receipt of advance funding from the DHSC - 2,000 2,000 --------------------------------------------------- ------------- ------------- --------- Cash (outflow)/inflow from operating activities (1,783) 198 (3,229) --------------------------------------------------- ------------- ------------- --------- Investing activities Income from sale of inventory 852 - - Income from sale of property, plant and equipment 463 - 985 Purchase of property, plant and equipment (25) (673) (968) Purchase of intangible assets (51) (411) (510) --------------------------------------------------- ------------- ------------- --------- Net cash inflow/(outflow) in investing activities 1,239 (1,084) (493) --------------------------------------------------- ------------- ------------- --------- Financing activities Finance costs - (1) (2) Proceeds from issue of share capital 2,200 57 68 Expenses in connection with share issue (240) - - Principal portion of asset finance payments (243) (104) (198) Interest portion of asset finance payments (16) (19) (34) Principal portion of lease liability payments (46) (86) (192) Interest portion of lease liability payments (5) (72) (144) --------------------------------------------------- ------------- ------------- --------- Net cash inflow/(outflow) from financing activities 1,650 (225) (502) --------------------------------------------------- ------------- ------------- --------- Net increase/(decrease) in cash and cash equivalents 1,106 (1,111) (4,224) Effects of exchange rate movements 1 (18) 2 Cash and cash equivalents at beginning of period 1,605 5,827 5,827 --------------------------------------------------- ------------- ------------- --------- Cash and cash equivalents at end of the period 2,712 4,698 1,605 --------------------------------------------------- ------------- ------------- ---------
Notes to the Interim Report
for the six months ended 30 September 2022
1. BASIS OF PREPARATION
For the purpose of preparing the 31 March 2022 annual financial statements the Directors used IFRS as adopted by the EU and in accordance with the AIM Rules issued by the London Stock Exchange. In preparing these interim financial statements, the accounting policies used in the Group's Annual Report for the year ended 31 March 2022 have been applied consistently. The Group has not applied IAS 34 Interim Financial Reporting, which is not mandatory for AIM companies, in the preparation of these interim financial statements.
The interim financial statements are unaudited. The information shown in the consolidated balance sheet as at 30 September 2022 does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and the information in respect of the year ended 31 March 2022 has been extracted from the Group's 2022 Annual Report which has been filed with the Registrar of Companies. The report of the auditors on the financial statements contained within the Group's 2022 Annual Report was unqualified and did not contain a statement under sections 498 (2) and 498 (3) of Chapter 3, Part 16 of the Companies Act 2006. These interim financial statements were approved by the Board of Directors on 23 November 2022.
2. RESTATEMENT OF COMPARATIVES
Group
Intangible assets
Following a review of intangible assets, one project has been identified which was not adequately defined in previous reporting periods and which does not meet the requirements of IAS 38, in that the probability of generating future economic benefits arising from the development expenditure cannot be established. The capitalised costs relating to this project are GBP235,000, all of which were incurred prior to 1 April 2020 and were incorrectly capitalised at the time.
In addition, a legacy research and development project valued at GBP55,000 has been identified which relates to the Group's infectious disease business, which was sold in June 2018. This amount was incorrectly not written off in the year ended 31 March 2019.
The costs associated with both of these projects have been written off effective 31 March 2020 through means of a prior year adjustment in accordance with the requirements of IAS 8, resulting in a reduction of the carrying value of intangible assets of GBP290,000 as at that date. There has been no impact on the earnings reported for the period ended 30 September 2021.
Deferred tax
Historically, deferred tax assets and liabilities were incorrectly reported as separate balances in prior years. The 30 September 2021 balance sheet has been restated to net off the deferred tax asset and liability, reducing the previously reported deferred tax asset by GBP1,200,000 with a corresponding reduction in the deferred tax liability.
2. RESTATEMENT OF COMPARATIVES (CONTINUED)
The effect of the restatements noted above on the consolidated balance sheet as at 30 September 2021 is as follows:
As reported Restatement As restated 30 September 30 September 30 September 2021 2021 2021 GBP'000 GBP'000 GBP'000 ------------------------------ ------------ ------------ ------------ ASSETS Non-current assets Intangibles 10,196 (290) 9,906 Property, plant and equipment 3,524 - 3,524 Right of use assets 1,692 - 1,692 Deferred taxation 3,954 (1,200) 2,754 ------------------------------ ------------ ------------ ------------ Total non-current assets 19,366 (1,490) 17,876 ------------------------------ ------------ ------------ ------------ Current assets Inventories 2,232 - 2,232 Trade and other receivables 2,606 - 2,606 Cash and cash equivalents 4,698 - 4,698 ------------------------------ ------------ ------------ ------------ Total current assets 9,536 - 9,536 ------------------------------ ------------ ------------ ------------ Total assets 28,902 (1,490) 27,412 ------------------------------ ------------ ------------ ------------ EQUITY AND LIABILITIES Equity Issued capital 33,373 -- 33,373 Retained deficit (12,774) (290) (13,064) Translation reserve (21) -- (21) ------------------------------ ------------ ------------ ------------ Total equity 20,578 (290) 20,288 ------------------------------ ------------ ------------ ------------ Liabilities Non-current liabilities Long-term borrowings 628 - 628 Lease liabilities 1,670 - 1,670 Corporation tax 13 - 13 Deferred tax 1,200 (1,200) - Deferred income 2,643 - 2,643 ------------------------------ ------------ ------------ ------------ Total non-current liabilities 6,154 (1,200) 4,954 ------------------------------ ------------ ------------ ------------ Current liabilities Short-term borrowings 186 - 186 Lease liabilities 168 - 168 Trade and other payables 1,816 - 1,816 ------------------------------ ------------ ------------ ------------ Total current liabilities 2,170 - 2,170 ------------------------------ ------------ ------------ ------------ Total liabilities 8,324 (1,200) 7,124 ------------------------------ ------------ ------------ ------------ Total equity and liabilities 28,902 (1,490) 27,412 ------------------------------ ------------ ------------ ------------
3. SEGMENT INFORMATION
Following the withdrawal from COVID-19 products and the decision taken in March 2022 to dispose of the CD4 business, the sale of which was completed on 31 July 2022, the only remaining division is Health and Nutrition. The Global Health division specialised in the research, development, production and marketing of kits to aid the diagnosis of infectious diseases, including COVID-19.
The Health and Nutrition division specialises in the research, development and production of kits to aid the detection of immune reactions to food. It also provides clinical analysis to the general public, clinics and health professionals.
The Corporate segment consists of centralised corporate costs which are not allocated to the trading activities of the Group.
Inter segment transfers or transactions are entered into under the normal commercial conditions that would be available to unrelated third parties.
3. SEGMENT INFORMATION (CONTINUED)
Business segment information
Health and Nutrition Corporate Total 6 months to 30 September 2022 GBP'000 GBP'000 GBP'000 ---------------------------------- --------- --------- ------- Revenue 3,533 - 3,533 Inter-segment revenue (99) - (99) ---------------------------------- --------- --------- ------- Total revenue 3,434 - 3,434 Cost of sales (1,581) - (1,581) ---------------------------------- --------- --------- ------- Gross profit 1,853 - 1,853 Operating costs (1,947) (556) (2,503) ---------------------------------- --------- --------- ------- Operating loss before exceptional items (94) (556) (650) Exceptional items - - - ---------------------------------- --------- --------- ------- Operating loss after exceptional items (94) (556) (650) Depreciation 106 - 106 Amortisation 225 - 225 ---------------------------------- --------- --------- ------- EBITDA 237 (556) (319) ---------------------------------- --------- --------- ------- Exceptional items - - - Share-based payment charges - 90 (90) ---------------------------------- --------- --------- ------- Adjusted EBITDA 237 (466) (229) Share-based payment charges - (90) (90) Depreciation (106) - (106) Amortisation (225) - (225) Net finance costs (6) - (6) Exceptional costs - - - ---------------------------------- --------- --------- ------- Loss before tax (100) (556) (656) Exceptional items - - - Share-based payment charges - 90 90 Amortisation 49 - 49 ---------------------------------- --------- --------- ------- Adjusted loss before tax (51) (466) (517) ---------------------------------- --------- --------- ------- Health and Nutrition Corporate Total 6 months to 30 September 2021 GBP'000 GBP'000 GBP'000 ------------------------------------------- --------- --------- ------- Revenue 4,297 - 4,297 Inter-segment revenue (130) - (130) ------------------------------------------- --------- --------- ------- Total revenue 4,167 - 4,167 Cost of sales (1,485) - (1,485) ------------------------------------------- --------- --------- ------- Gross profit 2,682 - 2,682 Operating costs (1,852) (806) (2,658) ------------------------------------------- --------- --------- ------- Operating profit/(loss) before exceptional items 830 (806) 24 Exceptional items - - - ------------------------------------------- --------- --------- ------- Operating profit/(loss) after exceptional items 830 (806) 24 Depreciation 96 - 96 Amortisation 220 - 220 ------------------------------------------- --------- --------- ------- EBITDA 1,146 (806) 340 ------------------------------------------- --------- --------- ------- Share-based payment charges - 90 90 Exceptional items - - - ------------------------------------------- --------- --------- ------- Adjusted EBITDA 1,146 (716) 430 ------------------------------------------- --------- --------- ------- Share-based payment charges - (90) (90) Depreciation (96) - (96) Amortisation (220) - (220) Exceptional items - - - Net finance costs (12) - (12) ------------------------------------------- --------- --------- ------- Profit/(loss) before tax 818 (806) 12 Exceptional items - - - Share-based payment charges - 90 90 Amortisation 49 - 49
------------------------------------------- --------- --------- ------- Adjusted profit/(loss) before tax 867 (716) 151 ------------------------------------------- --------- --------- -------
The adjusted profit/(loss) before taxation is a key measure of the Group's trading performance used by the Directors. The reported numbers are non-GAAP measures.
4. REVENUES - Continuing operations
6 months 6 months to to 30 September 30 September 2022 2021 GBP'000 GBP'000 --------------------------- ------------- ------------- Revenues UK 423 238 Rest of Europe 1,125 1,378 North America 606 894 South/Central America 141 242 India 286 279 Asia and the Far East 651 592 Africa and the Middle East 202 544 --------------------------- ------------- ------------- 3,434 4,167 --------------------------- ------------- ------------- 6 months 6 months inc/(dec) to to 30 September 30 September 2022 2021 GBP'000 GBP'000 % -------------- -------------- ---------- FoodPrint (R) 2,239 2,947 (24)% Food Detective (R) 706 735 (4)% CNS laboratory service 420 251 67% Food ELISA/other 69 234 (71)% -------------- -------------- ---------- 3,434 4,167 (18)% -------------- -------------- ----------
5. FINANCE COSTS
6 months 6 months to to 30 September 30 September 2022 2021 Continuing operations GBP'000 GBP'000 --------------------------------------------------------- ------------- ------------- Interest payable on bank overdraft - 2 Interest payable on lease liabilities 4 8 Interest on hire purchase and asset finance arrangements 2 2 --------------------------------------------------------- ------------- ------------- 6 12 --------------------------------------------------------- ------------- -------------
6. TAXATION
6 months 6 months to to 30 September 30 September 2022 2021 Continuing operations GBP'000 GBP'000 ------------------------------------- ------------- ------------- Tax credited in the income statement Current tax - current year - (13) Current tax - prior year adjustment - - Deferred tax - current year - 695 Deferred tax - prior year adjustment - - ------------------------------------- ------------- ------------- - 682 ------------------------------------- ------------- ------------- Tax relating to items charged to other comprehensive income Deferred tax on net exchange adjustments -(7) ----------------------------------------------------- --- -(7) ----------------------------------------------------- ---
6. TAXATION (CONTINUED)
Reconciliation of total tax credit Factors affecting the tax credit for the period: GBP'000 GBP'000 ------------------------------------------------------- ------- ------- Loss/(profit) taxable (656) 12 ------------------------------------------------------- ------- ------- Effective rate of taxation 19% 19% Loss before tax multiplied by the effective rate of tax - 2 Effects of: Expenses not deductible for tax purposes and permanent differences - (629) Research and development credits - (30) Deferred tax asset not recognised 125 - Adjustment for future tax deductions on notional gains on unexercised employee share options - (17) Tax under/(over) provided in prior years - (13) Adjustment due to different overseas tax rate - 5 ------------------------------------------------------- ------- ------- Tax credit for the period - (682) ------------------------------------------------------- ------- -------
7. DISCONTINUED OPERATIONS
6 months 6 months to to 30 September 30 September 2022 2021 GBP'000 GBP'000 ------------------------------------------------- ------------- ------------- Revenue 657 1,560 Cost of sales (567) (2,274) ------------------------------------------------- ------------- ------------- Gross profit/(loss) 90 (714) Administration costs (1,361) (2,201) Selling and marketing costs - (302) Other income 4 4 ------------------------------------------------- ------------- ------------- Operating loss before exceptional items (1,267) (3,213) Exceptional items - (150) ------------------------------------------------- ------------- ------------- Operating loss after exceptional items (1,267) (3,363) Finance costs (15) (80) Impairment loss recognised on the remeasurement to fair value less costs to sell (149) - ------------------------------------------------- ------------- ------------- Loss before taxation (1,431) (3,443) Tax - - ------------------------------------------------- ------------- ------------- Loss for the period from discontinued activities (1,431) (3,443) ------------------------------------------------- ------------- -------------
Adjusted loss before taxation
6 months 6 months to to 30 September 30 September 2022 2021 GBP'000 GBP'000 ------------------------------------------------- ------------- ------------- Loss for the period from discontinued activities (1,431) (3,443) Exceptional items - 150 Amortisation of intangible assets 7 3 ------------------------------------------------- ------------- ------------- Adjusted loss for the period from discontinued activities (1,424) (3,290) ------------------------------------------------- ------------- -------------
Earnings per share
6 months 6 months to to 30 September 30 September 2022 2021 GBP'000 GBP'000 ---------------------------------------------------------- ------------- ------------- Basic, loss for the period from discontinued operations (0.6)p (1.9)p Diluted, loss for the period from discontinued operations (0.6)p (1.9)p Adjusted, loss for the period from discontinued operations (0.6)p (1.8)p ---------------------------------------------------------- ------------- -------------
7. DISCONTINUED OPERATIONS (CONTINUED)
The major classes of assets and liabilities of the Global Health business as at 30 September 2022 are, as follows:
30 September 2022 GBP'000 ------------------------------------------------------------ ------------ Assets Property, plant and equipment - ------------------------------------------------------------ ------------ Total assets held for sale - ------------------------------------------------------------ ------------ Liabilities Borrowings (411) ------------------------------------------------------------ ------------ Total liabilities directly associated with the assets held for sale (411) ------------------------------------------------------------ ------------ Net liabilities directly associated with the disposal group (411) ------------------------------------------------------------ ------------
The property, plant and equipment relate primarily to COVID-19 plant and equipment no longer used in the business which have all been written down to zero value, the liabilities relate to the hire purchase on these assets.
8. EARNINGS PER SHARE
6 months 6 months to to 30 September 30 September 2022 2021 GBP'000 GBP'000 ------------------------------------------------- ------------- ------------- Loss attributable to equity holders of the Group Continuing operations (656) 694 Discontinued operations (1,431) (3,443) ------------------------------------------------- ------------- ------------- Loss attributable to equity holders of the Group for basic earnings (2,087) (2,749) ------------------------------------------------- ------------- ------------- 2022 2021 Continuing operations Number Number ------------------------------------------ ----------- ----------- Weighted average number of shares 225,443,711 182,269,637 Share options - 6,814,300 ------------------------------------------ ----------- ----------- Diluted weighted average number of shares 225,443,711 189,083,937 ------------------------------------------ ----------- -----------
The number of shares in issue at the period end was 237,685,180. Basic earnings per share are calculated by dividing 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 loss 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.
Adjusted earnings per share on loss for the period
The Group presents adjusted earnings per share which is calculated by taking adjusted loss before taxation and adding the tax credit 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 in financial performance.
6 months 6 months to to 30 September 30 September 2022 2021 GBP'000 GBP'000 ------------------------------------------------- ------------- ------------- Loss attributable to equity holders of the Group (2,087) (2,749) Exceptional items - 150 Amortisation of intangible assets 56 52 Share-based payment charges 90 90 ------------------------------------------------- ------------- ------------- Adjusted loss attributable to equity holders of the Group (1,941) (2,457) ------------------------------------------------- ------------- -------------
8. EARNINGS PER SHARE (CONTINUED)
Adjusted loss for the year - continuing operations
The reported numbers are non-GAAP measures
6 months 6 months to to 30 September 30 September 2022 202 1 GBP'000 GBP'000 -------------------------------------------------------- ------------- -------------- (Loss)/profit for the period from continuing operations (656) 694 Exceptional items - - Amortisation of intangible assets 49 49 Share-based payment charges 90 90 -------------------------------------------------------- ------------- -------------- Adjusted (loss)/profit for the period from continuing operations (517) 833 -------------------------------------------------------- ------------- -------------- Adjusted EPS on loss for the period (0.8)p (1.3)p Adjusted EPS on (loss)/profit for the period from continuing operations (0.2)p 0.5p
Adjusted (loss)/profit before taxation, which is a key measure of the Group's trading performance used by the Directors, is derived by taking statutory profit before taxation and adding back exceptional items, amortisation of intangible assets (excluding development costs) and share-based payment charges
9. INTANGIBLES
As restated* Licences/ Technology Customer Development As restated* Goodwill software assets relationships costs Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ Cost At 31 March 2021 as reported 3,017 1,633 1,975 100 14,627 21,352 Prior year adjustment - - - - (290) (290) ----------------------------- -------- --------- ---------- ------------- ------------ ------------ Restated at 31 March 2021 3,017 1,633 1,975 100 14,337 21,062 Additions - - - - 78 78 Additions - internally generated - - - - 368 368 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 30 September 2021 3,017 1,633 1,975 100 14,783 21,508 Additions - internally generated - - - - 135 135 Currency translation - 1 - - - 1 Reclassified as assets held for sale - - - - (5,706) (5,706) Disposals - - - - (31) (31)
----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 31 March 2022 3,017 1,634 1,975 100 9,181 15,907 Additions - - - - 16 16 Additions - internally generated - - - - 35 35 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 31 March 2022 3,017 1,634 1,975 100 9,232 15,958 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ Accumulated amortisation At 31 March 2021 - 1,597 1,341 100 8,132 11,170 Amortisation charge in the period - 3 49 - 300 352 Impairment charge - - - - 80 80 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 30 September 2021 - 1,600 1,390 100 8,512 11,602 Amortisation charge in the period - 3 50 - 213 266 Impairment charge - 16 - - (80) (64) Reclassified as assets held for sale - - - - (642) (642) ----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 31 March 2022 - 1,619 1,440 100 8,003 11,162 Amortisation charge in the period - - 49 - 176 225 Impairment charge - 15 - - - 15 At 31 March 2022 - 1,634 1,489 100 8,179 11,402 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ Net book value At 30 September 2022 3,017 - 486 - 1,053 4,556 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 31 March 2022 3,017 15 535 - 1,178 4,745 ----------------------------- -------- --------- ---------- ------------- ------------ ------------ At 30 September 2021 3,017 33 585 - 6,271 9,906 ----------------------------- -------- --------- ---------- ------------- ------------ ------------
* See note 2 for details regarding the restatement.
10. FIXED ASSETS
Right Plant of use Leasehold and assets improvements machinery Total Consolidated GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------------- ------- ------------ --------- ------- Cost At 31 March 2021 2,259 1,409 5,411 9,079 Additions - 256 417 673 ------------------------------------- ------- ------------ --------- ------- At 30 September 2021 2,259 1,665 5,828 9,752 Additions 64 138 157 359 Disposals (1,889) (1,107) (1,378) (4,374) Reclassified as assets held for sale (22) - (2,147) (2,169) Currency translation - - 1 1 ------------------------------------- ------- ------------ --------- ------- At 31 March 2022 412 696 2,461 3,569 Additions - 1 24 25 Currency translation - - 1 1 ------------------------------------- ------- ------------ --------- ------- At 30 September 2022 412 697 2,486 3,595 ------------------------------------- ------- ------------ --------- ------- Accumulated depreciation At 31 March 2021 458 679 3,063 4,200 Charge in the period 109 42 185 336 At 30 September 2021 567 721 3,248 4,536 Charge in the period 127 49 230 406 Disposals (375) (286) (970) (1,631) Reclassified as assets held for sale (13) - (974) (987) Currency translation - - 1 1 ------------------------------------- ------- ------------ --------- ------- At 31 March 2022 306 484 1,535 2,325 Charge in the period 44 - 76 120 Disposals - - 27 27 Currency translation - (1) - (1) ------------------------------------- ------- ------------ --------- ------- At 30 September 2022 350 483 1,638 2,471 ------------------------------------- ------- ------------ --------- ------- Net book value At 30 September 2022 62 214 848 1,124 ------------------------------------- ------- ------------ --------- ------- At 31 March 2022 106 212 926 1,244 ------------------------------------- ------- ------------ --------- ------- At 30 September 2021 1,692 944 2,580 5,216 ------------------------------------- ------- ------------ --------- -------
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