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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Premier Veterinary Group Plc | LSE:PVG | London | Ordinary Share | GB00BSZLMS59 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 34.50 | 32.00 | 37.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPVG
RNS Number : 7320D
Premier Veterinary Group PLC
28 June 2019
PREMIER VETERINARY GROUP PLC
("PVG", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 31 MARCH 2019
London, UK, 28 June 2019 - Premier Veterinary Group plc today announces its unaudited interim results for the six months ended 31 March 2019.
HIGHLIGHTS
-- 30% increase in total number of pets on fee-generating pet care plans under PVG's preventative healthcare programme for pets branded "Premier Pet Care Plan" ("PPCP") to 275,000 (31 March 2018: 212,000).
Hot Features
Premium
2019 2018 Change
000's 000's
----- ----- ------
United Kingdom 214 171 +25%
----- ----- ------
Europe 47 35 +34%
----- ----- ------
US 14 6 +133%
----- ----- ------
Total 275 212 +30%
----- ----- ------
-- 21% increase in total revenue
Six months ended 31 March 2019 2018 Change
UK GBP1,048k GBP1,042k +1%
----------- ----------- -------
Europe GBP468k GBP352k +33%
----------- ----------- -------
US GBP351k GBP146K +140%
----------- ----------- -------
Total revenue GBP1,867k GBP1,540k +21%
----------- ----------- -------
-- Loss before interest and tax to 31 March 2019 GBP1.39m (31 March 2018: GBP1.90m).
-- Cash and short-term deposits of GBP1.68m as at 31 March 2019 (at 31 March 2018: GBP1.10m).
-- Cash outflow from operating activities for six months to 31 March 2019 of GBP1.50m (six months ended 31 March 2018: GBP1.98m).
Post period events
-- W.H. Ireland appointed sole broker effective from 25 June 2019.
Dominic Tonner, CEO of PVG commented:
"Over the last six months PVG has continued to see solid progress in the number of pets on plan across the UK, Europe and US and this progress has continued in April and May. The rollout of the US plan with PVCC continues and growth in the US is encouraging. We expect revenues to increase incrementally in the second half year as compared to the first half and for profits to remain in line with Management expectations. We continue to explore options that will enable the Group to accelerate profitability in Europe, capitalise on the investment that has already been made in the US and consolidate our position in the UK"
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information, please contact:
Premier Veterinary Group plc www.premiervetgroup.co.uk Dominic Tonner, Chief Executive Officer +44 (0)117 970 4130 Andy Paull, Chief Financial Officer WH Ireland Limited (Broker) www.whirelandplc.com Mike Coe / Chris Savidge +44 (0) 207 220 1666
INTERIM MANAGEMENT REPORT
To the members of Premier Veterinary Group plc
Cautionary statement
This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
The IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report, but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information.
This interim management report has been prepared for the Group as a whole and, therefore, gives greater emphasis to those matters which are significant to Premier Veterinary Group plc and its subsidiary undertakings when viewed as a whole.
Introduction
Premier Veterinary Group plc provides its services to third party veterinary practices through its wholly-owned subsidiary, Premier Vet Alliance Limited ("PVA"). The Company also operates a number of wholly-owned overseas subsidiaries to market its services in the respective country.
The principal activity of the Group is the development, administration and support of a preventative healthcare programme for pets branded "Premier Pet Care Plan" ("PPCP"). PPCP is a structured, monthly payment preventative healthcare programme for cats, dogs and rabbits covering many of the fixed cost non-insurable items to help maintain the health and wellbeing of a pet. The programme facilitates gold standard care for pets at an affordable price for the pet owner, by way of fixed monthly payments.
Overview and strategic update
As stated in the Annual Report and Accounts for the year ended 30 September 2018 (the "2018 Annual Report"), the Group's objectives are to:
-- leverage the success of the PVA business; -- develop the business through its global strategic partnerships and growing data set; -- continue to invest in PVA's global transaction platform; and, -- develop new opportunities for growth.
In the first half of the financial year, the Group has continued to pursue its strategy of targeted geographical expansion in order to maximise the Group's growth potential. Over the last six months, the Group has grown its PPCP businesses in all regions and the management team continues to explore opportunities to accelerate growth. The number of clinics and hospitals contracted to sell preventative health programmes continues to increase.
We continue to invest in our IT department and platform to ensure the business delivers enhanced levels of customer support and experience in an efficient way.
Regional review
UK
In the UK, the number of pets on plan has increased by 25% to 214,000 as at 31 March 2019 (31 March 2018: 171,000). The pipeline of opportunities to sign new clinics on to PPCP remains strong and the ongoing rate of growth in Pets on Plan in this well-established market is encouraging. Market consolidation driven by corporate acquisition continues to provide challenge to improve and diversify services and the opportunity to win substantial contracts. The increase in revenues from veterinary clinics relating to the continued growth in pets on plan has been partly offset by a reduction in revenues from other third parties.
Europe
The number of pets on plan in Europe has increased by 34% to 47,000 (31 March 2018: 35,000).
The Group's most significant territory in Europe is the Netherlands which made a small loss in the first half year and remains on course to become profitable during the financial year ending 30 September 2019. The number of pets on plan has grown by 29% to 36,000 as at 31 March 2019 (31 March 2018: 28,000). The Group is implementing different service offerings to widen the appeal of PPCP to other segments of the Dutch veterinarian market.
In France, at 31 March 2019, there were 10,000 pets on plan (31 March 2018: 4,000). Revenue doubled year on year for the first half of this financial year with operating expense at the same levels as 2018.
US
The number of pets on plan has increased to 14,000 (31 March 2018: 6,000). The investment made in the US and the changes implemented to our operating model over the previous financial year have established a platform from which we are seeing encouraging growth.
The net growth in pets on plan, being new pets signed up less pets cancelled, has continued to improve following the technological enhancements implemented in January 2018 and with the carefully implemented roll out across the PVCC estate, the sign up rate is strong and improving. The care taken to ensure that these launches are done well has meant that the roll out is taking longer than anticipated but the resulting performance is stronger than expected.
We are continuing to explore opportunities with other corporate groups to enable the Group to capitalise on the performance we have seen to date.
Financial and non-financial key performance indicators ("KPIs")
As set out in the 2018 Annual Report, the Group monitors its performance in implementing the Group's strategy with reference to four KPIs. The KPIs are applied on a Group-wide basis. Performance against those KPIs in the six months ended 31 March 2018 was as follows:
Sales volume and revenue growth
A key element underpinning the Group's strategy is to deliver sales volume growth and revenue growth from PPCP. Sales volume growth is measured by the number of active pets who are members of a PPCP.
PPCP fees are generated from the number of pets who are members of a PPCP each month and are recognised on a receipts basis. A flat fee is received for every active pet.
The Group's revenues for the continuing business for the six months ended 31 March 2019 increased by 21% to GBP1.87m (31 March 2018: GBP1.54m).
The total number of active pet members increased to 1,601,000 over the six-month period to 31 March 2019 (31 March 2018: 1,234,000), an increase of 30%.
Number of member clinics
Management recognises the value of its relationships with clinics and monitors the number of member clinics as a KPI. This is tracked and reviewed in each territory on a monthly basis. Management has concluded that shareholder value will be derived from this KPI and recognises the need to achieve growth in this KPI within a cost-base suited to the business. An individual customer (or practice) may operate a number of clinics.
At 31 March 2019, the number of PPCP member clinics in each region was:
Total as at Total as at
31 March 2019 31 March 2018 % growth
000's 000's
--------------- --------------- ---------
UK (including Northern Ireland) 743 644 15%
--------------- --------------- ---------
* Netherlands 272 234 16%
--------------- --------------- ---------
* France 237 108 119%
--------------- --------------- ---------
* Other European countries 71 71 0%
--------------- --------------- ---------
Europe 580 413 40%
--------------- --------------- ---------
US 261 241 8%
--------------- --------------- ---------
Total 1,584 1,298 22%
--------------- --------------- ---------
Pets on Plan
Whilst clinic relationships indicate the future growth potential for the Group, it is also important to monitor the number of pets on plan as this is the key revenue driver. This KPI enables management to ensure member clinics are achieving the levels of penetration that are expected and to focus attention on clinics that are underperforming.
The number of fee generating pets on plan represents those pets on plan where a fee has been generated for the Group in that month, i.e. a direct debit (or equivalent) has been processed for that pet. Due to the time required by banking protocols to set up these transactions, there will be joiners and leavers in a month who are not included in this measure as they have not yet been processed by (or removed from) the system.
The following table shows the quarterly growth in the number of pets on plan over the last 12 months.
As at As at As at As at As at
Mar-18 Jun-18 Sept-18 Dec-18 Mar-19
000's 000's 000's 000's 000's
------- ------- -------- ------- -------
United Kingdom 171 181 193 206 214
------- ------- -------- ------- -------
Europe 35 38 42 45 47
------- ------- -------- ------- -------
US 6 7 9 11 14
------- ------- -------- ------- -------
Total no of fee generating
pets on plan 212 226 244 262 275
------- ------- -------- ------- -------
Overall, the number of pets administered by PPCP has increased by 30% to 275,000 as at 31 March 2019 (31 March 2018: 212,000). In the UK, the number of pets on plan has increased by 25% to 214,000 as at 31 March 2019 (31 March 2018: 171,000). The number of pets on plan in Europe has increased by 34% to 47,000 (31 March 2018: 35,000).
In the US the number of pets on plan has increased by 133% to 14,000 (31 March 2018: 6,000).
Cash processed through the platform
Member clinic numbers and pets on plan are internal points of reference for the Group. By monitoring cash (inclusive of sales tax) processed through the platform management is able to monitor the benefit to partners of the Group's member clinics operating PPCPs. The table below shows the value of transactions processed in the six months to 31 March 2019 compared to the same period last year.
Value of transactions processed 31 March 31 March
in 6 months ended 2019 2018 % growth
GBP000s GBP000s
--------- --------- ---------
UK 18,164 14,512 25%
--------- --------- ---------
Europe 4,046 2,844 42%
--------- --------- ---------
US 2,014 829 143%
--------- --------- ---------
Total 24,224 18,185 33%
--------- --------- ---------
Results for the six months ended 31 March 2019
The Group's total continuing revenues increased by 21% to GBP1.87m for the six months ended 31 March 2019 (GBP1.54m six months ended 31 March 2018). The operating loss for the six months ended 31 March 2019 was GBP1.57m (31 March 2018: GBP1.94m).
The table below shows the performance of the continuing business of the UK and overseas:
Revenue Operating profit/(loss)
GBP000's GBP000's
-------------- --------------------------
Six months ended 2019 2018 2019 2018
------ ------ ------------ ------------
UK 1,048 1,042 183 244
------ ------ ------------ ------------
Europe 468 352 (354) (565)
------ ------ ------------ ------------
US 351 146 (487) (758)
------ ------ ------------ ------------
Total 1,867 1,540 (658) (1,079)
------ ------ ------------ ------------
Central unallocated costs (732) (825)
------ ------ ------------ ------------
Loss before interest and
tax (1,390) (1,904)
------ ------ ------------ ------------
Interest (185) (31)
------ ------ ------------ ------------
Loss from operations (1,575) (1,935)
------ ------ ------------ ------------
The UK business has seen a 1% growth in revenue. Whilst the number of fee generating pets on plan grew by 25% there was a reduction in other income which, despite operating costs being in line with the same period last year, has in turn impacted operating profit.
In Europe, the investment in previous years has driven strong pets on plan and revenue growth of over 33% over last year whilst the cost base has been controlled to deliver improved profitability.
US operating costs in the US have further reduced by GBP0.1m year on year in the first half of the year despite supporting the roll out of the PVCC clinic contract and delivering 140% growth in revenue. The operating cost reduction coupled with GBP0.17m increase in revenues has reduced the operating loss in the territory from GBP0.76m to GBP0.49m. Whilst the year on year impact of cost reductions will lessen in the second half of the year, we anticipate continued revenue growth.
At 31 March 2019, the staff headcount was 50 (31 March 2018: 56).
Headcount 31 March 31 March 30 September
as at 2019 2018 2018
No No No
UK 33 35 34
Europe 10 11 11
USA 7 10 9
--------- -------------
50 56 54
--------- --------- -------------
Central unallocated costs have decreased by 11% compared to the same period in the prior year.
The share-based compensation charge for both periods was GBPNil.
Interest charges were GBP185k (2018: GBP31k) and relate solely to interest and amortised arrangement fee on the unsecured loan note facility that was entered into in November 2017 and the replacement facility entered into in January 2019.
Dividends and dividend policy
It is, at present, intended that no dividends will be paid by the Group. The position will be reviewed if future operations lead to significant levels of distributable profits, having taken into account any cash that needs to be reinvested in the Group's business.
Financial position
Total assets less current liabilities were GBP2.165m as at 31 March 2019 (31 March 2018: GBP1.18).
Net liabilities were GBP1.79m at 31 March 2019 including long term financing of GBP3.85m (31 March 2018: net assets GBP1.18m).
Cash and short-term deposits were GBP1.68m as at 31 March 2019 (at 31 March 2018: GBP1.10m).
Cash flow
Net cash outflow from continuing operating activities for the six months ended 31 March 2019 was GBP1.50m (six months ended 31 March 2018: GBP1.98m).
Post-retirement benefits
The PVG Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the PVG Group to the fund and into personal arrangements in respect of the period.
Board changes and Board composition
Will Evans resigned from the role of Chief Financial Officer with effect from 30 November 2018 and has been replaced by Andrew Paull. The Board thanks Will for his services to the Company and wishes him all the best for the future.
Following Andrew Paull's appointment to Chief Financial Officer with effect from 30 November 2018 and Neil Wood's appointment to Non-Executive Director with effect from 3 September 2018, both Andrew and Neil were put forward for election at the AGM on 27 March 2019. The resolutions were duly passed on a show of hands.
Related party transactions
Related party transactions are disclosed in note 7 to the condensed set of financial statements.
Risk and uncertainties
The principal risks and uncertainties affecting the business activities of the Group were identified under the heading "Risk management and principal and financial risks" in the Strategic Report on pages 20 to 23 of the 2018 Annual Report, a copy of which is available on the Company's website www.premiervetgroup.co.uk.
These comprise:
-- Market competition -- Consumer spending and preferences -- Brand reputation -- Litigation and consequent impact on reputation -- New initiatives and failure to expand the pet healthcare services -- PVA's status as a Direct Debit originator being revoked -- Information security and data protection -- Attraction and retention of key employees -- Continuity of operations -- Management of growth and expansion -- International expansion risk -- Financial liquidity risk
In the view of the Board, the key risks and uncertainties for the remaining six months of the financial year continue to be those set out in the 2018 Annual Report. In particular the market competition risk is impacted by the increasing levels of corporate consolidation within veterinary practices which is changing the dynamics of the pharmaceutical product supply chain. This is placing increased pressure on margins for manufacturers.
These changes present both challenges and opportunities to the Group. Customer retention can be impacted by corporate acquisitions and there is ongoing pressure on pricing. However, the Group also benefits by supporting its corporate customers who are acquiring new practices. In addition, the changes in the industry provide opportunities for the Group to offer solutions to its customers to address these pressures but may result in less support from third parties in the form of sponsorship by manufacturers for example.
Going concern
As stated in note 2 to the condensed financial statements, The Group made a loss from continuing operations for the period of GBP1.6m (six months ended 31 March 2018: GBP1.9m) and had net liabilities of GBP1.8m (31 March 2018: net assets of GBP1.2m). The Group had cash balances of GBP1.7m (2018: GBP1.1m).
On 25 January 2019, the Company entered into a loan agreement with Bybrook Finance Solutions Limited ("BFSL") whereby BFSL agreed to provide a committed loan facility of GBP3.85m repayable by the Group on or before 25 April 2019. The Company subsequently exercised the right to extend the repayment date to 25 January 2021 by issuing warrants to BFSL to acquire 767,347 of ordinary GBP0.10 shares at par. The facility was used to repay the previous loan notes issued and provided GBP2.0m of additional working capital which was drawn down upon completion of the agreement. Crossroads Finance Limited, a company jointly owned and controlled by Dominic Tonner, Chief Executive Officer of PVG, and his spouse, participated in the funding by entering into direct arrangements with BFSL. Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL.
The Directors consider that with its current cash reserves and the additional funds available from the committed funding facility, the Group has sufficient resources to meet all current liabilities as they fall due. This takes into consideration current market conditions, the Group's financial position and the Group's forecasts and projections, which include mitigations within the control of the Group. After allowing for reasonable possible changes in trading performance and mitigating actions (including cost cutting measures and withdrawal from loss making territories), and after making enquiries, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For these reasons, the directors continue to adopt the going concern basis in preparing the financial statements.
Outlook
Continued growth in the number of pets on plan across all geographical territories is expected.
The UK business is expected to remain profitable, our business in the Netherlands is expected to become profitable on a monthly basis by the end of this financial year and the business in France has grown strongly year over year.
The US market has begun to deliver results and we now have a model which we are confident to expand.
We will continue to strengthen our team and implement high quality IT developments which will enable us to continue to efficiently and effectively deliver our ongoing expansion strategy.
RESPONSIBILITY STATEMENT
For the six months ended 31 March 2019, we confirm to the best of our knowledge that:
(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that have done so).
By order of the Board,
Dominic Tonner Andy Paull Chief Executive Officer Chief Financial Officer 28 June 2018 28 June 2018 Registered office Registered number New Bond House 04313987 Bond Street Bristol BS2 9AG
Condensed consolidated statement of comprehensive income
For the six months ended 31 March 2019 (unaudited)
6 months 6 months
ended ended
31 March 2019 31 March
Note 2018
GBP'000 GBP'000
Continuing operations Total Total
Revenue 1,867 1,540
Cost of sales (125) (75)
Gross profit 1,742 1,465
Other administrative expenses (3,132) (3,369)
Loss from operations (1,390) (1,904)
Finance expense (185) (31)
Loss before income tax (1,575) (1,935)
Income tax - -
Loss and total comprehensive loss
for the period attributable to equity
holders of the parent company (1,575) (1,935)
---------------------------------------- ----- --------------- ----------
Loss per share for loss attributable
to the owners of the parent during
the period 3
Basic (pence) (10.3) (12.6)
Diluted (pence) (10.0) (12.3)
Condensed consolidated statement of comprehensive income
For the six months ended 31 March 2019 (unaudited)
6 months 6 months
ended ended
31 March 2019 31 March
Note 2018
GBP'000 GBP'000
Total Total
Loss for the year (1,575) (1,935)
Other comprehensive (expense)/income:
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations 40 (190)
------------------------------------------------------- --------------- ----------
Other comprehensive (expense)/income
for the year attributable to equity
holders of the parent (1,535) (2,125)
------------------------------------------------------- --------------- ----------
Condensed consolidated statement of financial position
As at 31 March 2019 (unaudited)
As at As at As at
31 March 31 March 30 September
Note 2019 2018 2018
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 26 45 32
Intangible assets 551 462 471
Total non-current assets 577 507 503
Current assets
Trade and other receivables 825 656 534
Cash and cash equivalents 1,677 1,095 648
---------- ---------- --------------
Total current assets 2,502 1,751 1,182
Total assets 3,079 2,258 1,685
========== ========== ==============
Equity attributable to equity holders of the Company
Called up share capital 5 1,535 1,535 1,535
Share premium 5 5 5
Share based payments reserve 35 35 35
Reverse acquisition reserves 3,671 3,671 3,671
Retained earnings (7,035) (4,064) (5,500)
---------- ---------- --------------
Total equity (1,789) 1,182 (254)
Current liabilities
Trade and other payables 782 810 703
Current tax liabilities 132 132 133
Total current liabilities 914 942 836
Non-current liabilities
Loans and borrowings 3,850 - 1,000
Deferred tax provision 104 134 103
---------- ---------- --------------
Total non-current liabilities 3,954 134 1,103
Total liabilities 4,868 1,076 1,939
Total equity and liabilities 3,079 2,258 1,685
========== ========== ==============
Condensed consolidated statement of changes in equity
For the six months ended 31 March 2019 (unaudited)
Share
based Reverse
Share Share payments acquisition Retained
Note capital premium reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
October 2017 1,535 5 35 3,671 (1,939) 3,307
Loss and total comprehensive
income for the period: - - - - (2,125) (2,125)
Balance as at 31
March 2018 1,535 5 35 3,671 (4,064) 1,182
Loss and total comprehensive
income for the period: - - - - (1,436) (1,436)
Balance as at 1
October 2018 1,535 5 35 3,671 (5,500) (254)
-------------------------------------- ----------- --------- ---------- ------------- ---------- --------
Loss and total comprehensive
income for the period: - - - - (1,535) (1,535)
Balance as at 31
March 2019 1,535 5 35 3,671 (7,035) (1,789)
-------------------------------------- ----------- --------- ---------- ------------- ---------- --------
Condensed consolidated statement of cash flows
For the six months ended 31 March 2019 (unaudited)
6 months 6 months
ended Ended
31 March 31 March
2019 2018
GBP '000 GBP '000
Cash flows from:
Operating activities
Loss before income tax (1,575) (1,935)
Finance expense 185 31
Depreciation of property, plant and equipment 16 19
Amortisation of intangible assets 90 86
(Increase)/decrease in trade and other receivables (291) 12
Increase/(decrease) in trade and other payables 79 (191)
--------- ---------
Cash used in operations (1,496) (1,978)
Income taxes - -
--------- ---------
Net cash outflow from operating activities (1,496) (1,978)
Investing activities
Purchase of property, plant and equipment (9) (1)
Purchase of intangible assets (171) (116)
--------- ---------
Net cash used in investing activities (180) (117)
Loan notes issues 2,850 -
Interest paid (185) (31)
--------- ---------
Net cash generated from/(used in) financing activities 2,665 (31)
Net increase/(decrease) in cash and cash equivalents 989 (2,126)
Cash and cash equivalents at beginning of period 648 3,218
Effect of foreign exchange rate changes 40 3
Cash and cash equivalents at end of period 1,677 1,095
========= =========
Shown as:
Cash and cash equivalents 1,677 1,095
1,677 1,095
========= =========
Notes to the financial information
1 General information
This interim financial information was authorised for issue on 28 June 2018. The information for the period ended 31 March 2019 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. They have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with IFRS.
2 Significant accounting policies
The financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) as adopted by the European Union.
The nancial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.
Basis of preparation
The half-year condensed consolidated financial statements for the six months ended 31 March 2019 have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Services Authority and with IAS 34 'Interim Financial Reporting'. The half-year condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 30 September 2018, which have been prepared in accordance with IFRS as adopted by the European Union.
This half-year condensed consolidated financial information does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 September 2018 were approved by the Board of Directors on 30 January 2019. These accounts, which contained an unqualified audit report under Section 495 of the Companies Act 2006 and which did not make any statements under Section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
There have been no significant changes to estimates of amounts reported in prior financial years.
The accounting policies adopted in the preparation of the half-year condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 September 2018.
Going concern
The Group made a loss from continuing operations for the period of GBP1.6m (six months ended 31 March 2018: GBP1.9m) and had net liabilities of GBP1.8m (31 March 2018: net assets of GBP1.2m). The Group had cash balances of GBP1.7m (2018: GBP1.1m). Cash used in continuing operations for the six months to 31 March 2018 was GBP1.50m (6 months ended 31 March 2018: GBP1.98m).
On 25 January 2019, the Company entered into a loan agreement with Bybrook Finance Solutions Limited ("BFSL") whereby BFSL agreed to provide a committed loan facility of GBP3.85m repayable by the Group on or before 25 April 2019. The Company subsequently has exercised the right to extend the repayment date to 25 January 2021 by issuing warrants to BFSL to acquire 767,347 of ordinary GBP0.10 shares at par. The facility was used to repay the previous loan notes issued and provided GBP2.0m of additional working capital which was drawn down upon completion of the agreement. Crossroads Finance Limited, a company jointly owned and controlled by Dominic Tonner, Chief Executive Officer of PVG, and his spouse, participated in the funding by entering into direct arrangements with BFSL. Rajan Uppal, a director of PVG, is the sole shareholder and director of BFSL.
The Directors consider that with its current cash reserves and the additional funds available from the committed funding facility, the Group has sufficient resources to meet all current liabilities as they fall due. This takes into consideration current market conditions, the Group's financial position and the Group's forecasts and projections, which include mitigations within the control of the Group. After allowing for reasonable possible changes in trading performance and mitigating actions (including cost cutting measures and withdrawal from loss making territories), and after making enquiries, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For these reasons, the Directors continue to adopt the going concern basis in preparing the financial statements.
Basis of consolidation
The condensed consolidated financial statements consolidate those of the parent company and all of its subsidiaries as of 31 March 2019.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
Revenue
Revenue for the Group is measured at the fair value of the consideration received or receivable. The Group recognises revenue for services provided when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity. All intercompany revenues are eliminated on consolidation.
The Group's primary income stream is generated from Premier Pet Care Plan. Fees received for the collection and management of monthly transactions on behalf of veterinary practices external to the Group are recognised on a receipts basis. There are four main elements within this income stream:
-- Launch fees: Fee received from a new clinic upon launch of scheme. -- Admin fees: Fee paid by pet owner upon introduction to scheme. -- Transaction fees: A flat fee received for every transaction processed. -- Other: Additional external support fees.
Expenditure
Expenditure is recognised in respect of goods and services received when supplied in accordance with contractual terms. Provision is made when an obligation exists for a future liability relating to a past event and where the amount of the obligation can be reliably estimated.
Financial assets
The Group classifies its financial assets into the categories discussed below in accordance with the purpose for which the asset was acquired.
Loans and receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value plus transactions costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
The Group's loans and receivables comprise of trade and other receivables included within the consolidated statement of financial position.
Cash and cash equivalents include cash held at bank and bank deposits available on demand.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the income statement. On confirmation that the trade receivables will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Financial liabilities
The Group classifies its financial liabilities as other financial liabilities which include the following:
-- Bank overdrafts which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
-- Bank loans which are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost ensuring the interest element of the borrowing is expensed over the repayment period at a constant rate.
-- Loans which are initially recognised at fair value net any of transaction costs directly attributable to the issue of the instrument. Where the terms of a loan facility are re-arranged, associated fees are amortised over the remaining term of the facility. Such interest-bearing liabilities are subsequently measured at amortised cost ensuring the interest element of the borrowing is expensed over the repayment period at a constant rate.
-- Trade payables, other borrowings and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
-- Finance charges, including premiums payable on settlement or redemption, are accounted for on an accruals basis and are calculated using the effective interest method and are added to the carrying amount of the liability to the extent that they are not settled in the period in which they arise.
-- Where a financial instrument contains an embedded derivative within a non-derivative host contract and the embedded derivative is not closely related to the host contract the derivative component is accounted for separately as a fair value adjustment through the income statement. The fair value of the instrument is recognised on the statement of financial position with gains and losses going through the income statement. No hedge accounting is applied.
Fair value hierarchy
Certain of the disclosures about fair value of nancial instruments include the classification of fair values within a three-level hierarchy. The three levels are defined based on the observability of signi cant inputs into the measurements as follows:
-- Level 1: Quoted prices, in active markets;
-- Level 2: Level 1 quoted prices are not available but fair value is based on observable market data;
-- Level 3: Inputs that are not based on observable market data.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments.
The share premium reserve represents the surplus of consideration paid for shares above their nominal value.
Share-based payments
The cost of equity-se-ttled transactions is measured by reference to the fair value at the date at which they are granted and is recognised as an expense over the vesting period which ends on the date on which the relevant party become fully entitled to the award. Fair value is determined by using the Black-Scholes pricing model. No account is taken of any vesting conditions other than conditions linked to the price of shares of the Company in measuring fair value.
At each period end date before vesting, the cumulative expense is calculated; representing the extent to which the vesting period has expired and Management's best estimate of the achievement or otherwise of non-market conditions and of the number of equity instruments that will ultimately vest. The movement in cumulative expenses since the previous period end date is recognised in the income statement with a corresponding entry in the statement of financial position.
Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team (excluding Non-Executive Directors) including the Chief Executive Officer.
Management review revenue and gross profit of two continuing separate operating segments against budget. The remaining costs, including administrative costs and finance expenses, are reviewed in total. Assets and liabilities of the Group are not allocated to an operating segment.
Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held for sale when:
-- they are available for immediate sale; -- management is committed to a plan to sell;
-- it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn;
-- an active programme to locate a buyer has been initiated;
-- the asset or disposal group is being marketed at a reasonable price in relation to its fair value; and,
-- a sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of:
-- their carrying amount immediately prior to being classified as held for sale in accordance with the Group's accounting policy; and,
-- fair value less costs of disposal.
Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated.
The results of operations disposed during the year are included in the consolidated statement of comprehensive income up to the date of disposal.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale. Profit or loss from discontinued operations comprises the post-tax profit or loss of discontinued operations and the post-tax gain or loss resulting from the measurement and disposal of assets classified as held for sale.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed on Page 8.
Software development
Software development is amortised over the useful lives of the assets. Useful lives are based on the management's estimates of the period that the assets will generate revenue, which are reviewed annually for continued appropriateness. The carrying values are tested for impairment when there is an indication that the value of the assets might be impaired. When carrying out impairment tests these would be based upon future cash flow forecasts and these forecasts would be based upon management judgement. Future events could cause the assumptions to change, therefore this could have an adverse effect on the future results of the Group.
3 Loss per share
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
The calculation of the basic and diluted earnings per share is based on the following data:
6 months 6 months
ended ended
31 March 31 March
2019 2018
GBP'000 GBP'000
Loss per share attributable to the
owners of the parent during the period
Loss for the period from continuing
operations (1,575) (1,935)
Profit/(loss) per share attributable
to the owners of the parent during
the period (1,575) (1,935)
-------------------------------------------- ----------- -----------
31 March 31 March
2019 2018
Number of shares
Weighted average number of ordinary shares
of the purposes of basic earnings per
share 15,346,950 15,346,950
Effect of dilutive potential ordinary
shares from share options 403,995 399,035
-------------------------------------------- ----------- -------------
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 15,750,945 15,745,985
4 Segmental reporting
Management have defined operating segments as those on which results are considered by the Board. Administrative expenses (including amortisation, impairment and depreciation), finance costs and income tax expenses are monitored centrally and are not allocated to operating segments. Further to this, assets and liabilities are not allocated to operating segments as they are shared by the Group. These operating segments are monitored and strategic decisions are made on the basis of adjusted segment operating results. The categorised as follows:
All revenue is derived from external customers.
PPCP
PPCP UK PPCP Europe US Total
GBP'000 GBP'000 GBP'000 GBP'000
6 months ended
31 March 2019
Revenue 1,048 468 351 1,867
Cost of sales (28) (28) (69) (125)
------------------------ -------- -------------- -------- --------
Gross profit 1,020 440 282 1,742
------------------------ -------- -------------- -------- --------
Administrative expense (837) (794) (769) (2,400)
------------------------ -------- -------------- -------- --------
Loss before central
costs 183 (354) (487) (658)
------------------------ -------- -------------- -------- --------
Central costs (732)
Finance expense (185)
------------------------ -------- -------------- -------- --------
Loss before income
tax (1,575)
------------------------ -------- -------------- -------- --------
PPCP
PPCP UK PPCP Europe US Total
GBP'000 GBP'000 GBP'000 GBP'000
6 months ended
31 March 2018
Revenue 1,042 352 146 1,540
Cost of sales (21) (24) (30) (75)
------------------------------------ -------- -------------- -------- --------
Gross profit 1,021 328 116 1,465
------------------------------------ -------- -------------- -------- --------
Administrative expense (777) (893) (874) (2,544)
------------------------------------ -------- -------------- -------- --------
Profit/(loss) before central costs 244 (565) (758) (1,079)
------------------------------------ -------- -------------- -------- --------
Central costs (825)
Finance expense (31)
------------------------------------ -------- -------------- -------- --------
Loss before income tax (1,935)
------------------------------------ -------- -------------- -------- --------
5 Share capital
Ordinary shares Deferred shares Total
No GBP'000 No GBP'000 GBP'000
Shares 31 March 2018
(Ordinary 10 pence) 15,346,950 1,535 - - 1,535
------------- -------- ------ ---------- --------
Shares 30 September
2018 (Ordinary 10 pence) 15,346,950 1,535 - - 1,535
------------- -------- ------ ---------- --------
Shares 31 March 2019
(Ordinary 10 pence) 15,346,950 1,535 - - 1,535
============= ======== ====== ========== ========
6 Share-based payments - equity-settled share option schemes, LTIPs
On 13 February 2019 the 2017 underwater share options were surrendered, and new options were granted. The share price was set in accordance with the scheme rules at 46.17 pence. No options were granted in the period ended 31 March 2018.
Options and warrants outstanding
6 months to 6 months to 12 months to
31 March 31 March 30 September
2019 2018 2018
No. No. No.
At beginning of period 399,035 399,035 399,035
------------------------------- ------------ ------------ --------------
Granted during period 139,517 - -
Exercised during the period - - -
Surrendered during the period (80,000) - -
Lapsed during the period (40,000) - -
------------ ------------ --------------
At end of period 418,552 399,035 399,035
------------------------------- ------------ ------------ --------------
Options exercisable
Number Weighted Latest exercise
of options average exercise date
price
At 31/03/2019 418,552 22.1p 12/02/2029
--------------- ------------ ------------------ ----------------
At 31/03/2018 399,035 71.8p 03/03/2027
--------------- ------------ ------------------ ----------------
At 30/09/2018 399,035 71.8p 03/03/2027
--------------- ------------ ------------------ ----------------
The fair value of share options' expense recognised in the period is determined using the Black-Scholes model which takes into account the terms and conditions upon which the shares were awarded. The Company recognised a charge of GBPNil (2018: GBPNil) in relation to share based payment.
7 Related party transactions
Ark Therapeutics Group plc changed its name to Premier Veterinary Group plc in March 2015.
The Group operates the Ark Therapeutics Group plc Family Benefit Trust ("FBT"). Amounts due from the FBT were GBPNil (31 March 2018: GBPNil, 30 September 2018: GBPNil).
On 25 January 2019, the Company entered into a loan agreement with Bybrook Finance Solutions Limited ("BFSL") whereby BFSL agreed to provide a committed loan facility of GBP3.85m repayable by the Group on or before 25 April 2019. The Company subsequently exercised the right to extend the repayment date to 25 January 2021 by issuing warrants to BFSL to acquire 767,347 of ordinary GBP0.10 shares at par. The facility was used to repay the previous loan notes issued and provided GBP2.0m of additional working capital which was drawn down upon completion of the agreement. Crossroads Finance Limited, a company jointly owned and controlled by Dominic Tonner, Chief Executive Officer of PVG, and his spouse, has participated in the funding by entering into direct arrangements with BFSL. Rajan Uppal, a director of the Company, is the sole shareholder and director of BFSL. At 31 March 2019, amounts owed to BFSL were GBP3.85m (31 March 2018: GBPNil). Interest and arrangement fees charged during the period were GBP185,312 (2018: GBP30,750).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR BLGDLXUDBGCR
(END) Dow Jones Newswires
June 28, 2019 02:00 ET (06:00 GMT)
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