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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Yourgene Health Plc | LSE:YGEN | London | Ordinary Share | GB00BN31ZD89 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.515 | 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
TIDMYGEN
RNS Number : 9954E
Yourgene Health PLC
10 July 2019
Yourgene Health plc
("Yourgene" or the "Company" or the "Group")
Results for the Year Ended 31 March 2019,
Business Update and Director Change
Manchester, UK - 10 July 2019: Yourgene Health plc (AIM: YGEN), the international molecular diagnostics group which commercialises genetic products and services, announces its results for the year ended 31 March 2019, and provides a business update.
Full year results summary:
-- Comprehensive profit of GBP3.4m (2018: GBP9.6m loss), the first since 2014 IPO, due substantially to benefits of debt restructuring gains but also to improved trading
-- Revenues grew 45% to GBP8.9m (2018: GBP6.1m) -- Gross profit also grew 45% to GBP4.6m (2018: GBP3.2m)
-- Administrative expenses before separately disclosed items were held level at GBP9.0m, despite a GBP0.3m increase in net development expenditure
-- Adjusted EBITDA loss reduced by 29% to GBP3.1m (2018: GBP4.4m) -- Operating loss reduced by 44% to GBP4.8m (2018: GBP8.6m) -- Cash used in operations reduced to GBP4.0m (2018: GBP9.6m)
-- Net cash (cash less borrowings) at year-end of GBP1.0m (2018: GBP11.9m net debt), prior to post period-end fundraise and associated acquisition of Elucigene Diagnostics ("Elucigene")
Business update:
-- After the period-end, in April 2019, the Company completed an equity fundraise, raising gross proceeds of GBP11.8m and the acquisition of Elucigene for an enterprise value of GBP8.8m represented by GBP6.3m cash and GBP2.9m equity
-- Elucigene recently filed its calendar 2018 accounts with revenues of GBP3.6m and EBITDA of GBP1.0m (FRS102 basis)
-- Integration of the UK operations of Yourgene Health and Elucigene is proceeding well and annualised synergy cost savings of over GBP0.5m have been identified, many of which have already been implemented
-- The two commercial teams are now operating as a combined function and seeking opportunities for cross-selling, co-presenting at marketing events, and have since delivered the Group's first GBP1m+ revenue months
-- Penetration of existing markets is increasing, for example in India and France
-- New markets focus includes Japan, where early momentum is building, and the United States, where a diverse pipeline is expected to generate its first revenues in the current financial year
-- Development is progressing well for the new IONA(R) test compatible with the Illumina next generation sequencing platform and the test remains on schedule for launch in early 2020
-- The Group's first oncology product is in a soft launch phase with a number of UK and European clinical partners
Corporate update:
-- After a review of the Board's composition, it has been agreed that Keng Hsu will step down from the Board from today to improve the balance of Non-executive and Executive directors, and to allow greater focus on his business development work in Asia
-- It is anticipated that additional Non-executive directors will be appointed in due course to continue this rebalancing and bring relevant skills to the Group
-- The Group's Annual Report and Accounts for the financial year ended 31 March 2019 will be available on www.yourgene-health.com later today.
-- The Group's Annual General Meeting will be held in September 2019. Further details will be notified to shareholders in due course. For shareholders who have opted to receive printed copies of the Annual Report and Accounts, these will be posted in the next few weeks ahead of the AGM formal notice.
Lyn Rees, CEO of Yourgene, commented: "These results demonstrate the strong underlying growth of the business after the transformative realignment of our partnership with Thermo Fisher and formation of a new one with Illumina. We now have a strong balance sheet following the equity fundraise and Elucigene acquisition, the integration of which is progressing ahead of my expectations. We are now well positioned and very much focused on growth. I look forward to launching a new version of the IONA(R) test, our first oncology product and converting our exciting pipeline of new business opportunities into profitable growth."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For more information, please contact: Yourgene Health plc Tel: +44 (0)161 Lyn Rees, Chief Executive Officer 667 6865 Barry Hextall, Chief Financial Officer Joanne Cross, Head of Marketing investors@yourgene-health.com Cairn Financial Advisers LLP (Nomad) Tel: +44 (0)20 7213 Liam Murray / James Caithie / Ludovico Lazzaretti 0880 Stifel Nicolaus Europe Limited (Sole Broker) Tel: +44 (0)20 7710 Nicholas Moore / Matthew Blawat / Ben Maddison 7600 Vigo Communications (PR) Tel: +44 (0)20 7390 Ben Simons / Fiona Henson / Antonia Pollock 0238 yourgene@vigocomms.com
About Yourgene Health
Yourgene Health is an international molecular diagnostics group which develops and commercialises genetic products and services. The group works in partnership with global leaders in DNA technology to advance diagnostic science.
Yourgene develops and commercialises simple and accurate molecular diagnostic solutions, primarily for reproductive health. The Group's products include non-invasive prenatal tests (NIPT) for Down's Syndrome and other genetic disorders, Cystic Fibrosis screening tests, invasive rapid aneuploidy tests, male infertility tests and genetic disease tests. Yourgene's commercial footprint is already established in the UK, Europe, the Middle East, Africa and Asia.
Our product development, research service and commercial capabilities extend across the lifecycle of genetic test development including regulatory submissions. Through our technical expertise and partnerships, Yourgene Health is also extending its genetic testing offering into oncology.
Yourgene Health is headquartered in Manchester, UK with offices in Taipei and Singapore, and is listed on the London Stock Exchange's AIM market under the ticker "YGEN". For more information, visit www.yourgene-health.com and follow us on twitter @Yourgene_Health.
RESULTS FOR YEARED 31 MARCH 2019
Chairman's Statement
I am delighted to report that the 2018/19 financial year has been a defining one for your Company, led by the new Chief Executive Officer, Lyn Rees. We have taken the business through a period of transformational change and created a strong foundation for future growth.
Our business has always had exceptional potential but has had to deal with a number of unforeseen historic issues. During the course of the financial year all of these legacy issues were dealt with and we now have a clear path to substantial growth.
During the period, the key milestones have been the appointment of Lyn Rees as Chief Executive Officer, the settlement of all litigation issues and entering into a new partnership with Illumina, the appointment of Hayden Jeffreys as Group Commercial Director and then Chief Operating Officer, and the corporate and commercial restructuring with Life Technologies (a division of Thermo Fisher) which resulted in the Company being substantially debt free and gaining a significant blue chip shareholder and an ongoing and strengthened commercial relationship.
The momentum has continued post the period end with the acquisition of Elucigene Diagnostics and the associated GBP11.8m oversubscribed equity fundraising in April 2019.
I would like to take this opportunity to thank all of our employees and my Board colleagues who have worked with extreme dedication and determination to get us into the best position your Company has ever been in. I would also like to thank the shareholders who supported us through the difficult periods and who continue to support us; we do not underestimate the effort required to execute the strategy and deliver the Company's potential value. It is also a pleasure to warmly welcome our new Elucigene colleagues who join us on this exciting journey.
Board changes
During the year, we announced a number of Board changes designed to prepare the Group for its next phase of development. We continue to look at the Board composition to ensure it remains fit for purpose. Having strengthened the Executive Management during the year I am now looking to add Non-executive Directors to further strengthen the Board during the new financial year. To avoid the Board becoming too large, and to allow him to focus on the many exciting business development opportunities in Asia, Keng Hsu has agreed to step down from the Board with effect from today. I thank him for his contribution both on and off the Board and I look forward to continuing to work with him in his senior management capacity.
Outlook
With our growing global presence, de-risked business and the newly acquired Elucigene operations, Yourgene is now well placed to realise its potential. We still face the usual business dynamics of competition, regulation and rapid technological change but the progress made over the last financial year and in recent months has been astounding and we now have a global genetics business that I am convinced will continue to grow very rapidly in the coming years.
Adam Reynolds
Chairman
Chief Executive's Review
I am very pleased to be reporting on a year of significant growth and development for Yourgene in my first year as Chief Executive Officer after my appointment in July 2018. The year has focused on creating a stable base for the future and having achieved this I am now focused on the execution of our strategic growth plans. Setting this base has been realised through a number of significant and transformational achievements in settling the long-running Illumina litigation and the high levels of debt owed to Life Technologies. We now have strategic partnerships with both of these prestigious blue-chip organisations who dominate the next generation sequencing market.
Strategy
In late 2018, we launched a strategic planning process which has delivered an ambitious plan to create a significant molecular genetics business and deliver material increases in shareholder value in the next 3-5 years. We aim to achieve this through a combination of greater penetration of our existing markets with our current products, geographic expansion, bringing new products to market, scalable business processes, a dynamic performance-oriented culture and inorganic growth through acquisition and/or licensing. This business plan is being embedded and cascaded throughout the Group to ensure that execution of the strategy and our customers are at the forefront of everything we do.
Elucigene
The Elucigene acquisition, completed in April 2019, creates a very exciting combined business with sales now into over 60 countries and an expanded commercial team. We are already realising synergies and the two teams are working very well together and quickly becoming a single unit, predominantly based on a single site. This combined operation will be a powerful engine for the future growth of the Group.
Geographic expansion
We have continued to build out the strong commercial pipeline expanding our geographic reach in the regions in which we operate whilst also ensuring we increase penetration in existing territories such as India, where we continue to make encouraging commercial progress, and have in a short time built strong commercial pipelines in these regions. We have also commenced market entry planning for the USA, Japan and China. These are sizeable opportunities in complex markets with significant regulatory barriers and we are developing plans that are deliverable and prioritised. As the Group grows we are announcing fewer deals to the stockmarket as the threshold for meeting commerciality becomes proportionally higher, but I am delighted to report that we continue to win new customers in all major regions supporting the +45% revenue growth that we have reported in the last 12 months.
People
We have brought into the business some exceptional talent to complement incumbent skillsets. Our people have a strong mix of experience and can-do attitudes, working all over the world for our customers and our stakeholders. As we grow our business and market reach I look forward to recruiting additional new talent into the organisation to support our ambitious growth plans.
Product development
Part of the Illumina partnership is to develop a version of the IONA(R) test to operate on Illumina's market-leading next-generation sequencing (NGS) instrument platform. This work has been the principal focus of our development activities in the year and we are very excited about the quality of the product that is emerging for launch in 2020.
I am also pleased with the launch of our Gateway process for evaluating future product opportunities and I look forward to updating investors as those plans proceed through the development pathway. Our focus for new products is primarily in the reproductive health and oncological clinical areas though we have some additional more longer-term target areas too. The Elucigene acquisition also brings some exciting new products into our pipeline including a US version of Cystic Fibrosis screening and a chemo-toxicity diagnostic assay for our first oncology product which we hope to launch soon.
Application support
Our training and application support services are critical to customer laboratories and the feedback has been extremely positive as we endeavour to routinely outperform our competitors.
Delivering great customer service will be vitally important in retaining and growing customers as the NIPT market matures and we believe we have market-leading capabilities in this regard.
Clinical service laboratory
The clinical service laboratory in Manchester and its Taipei equivalent have continued to deliver outstanding service performance to an increasing number of hospitals and medical professionals around the world. The laboratory back-up service has been invaluable to customers in the process of installing laboratories, experiencing workflow challenges, spikes in demand and cover for religious or national holiday periods.
Financial performance
It is very heartening to report the Group's first profitable year. Even though this is due primarily to the debt restructuring with Life Technologies, the underlying business has also made significant progress towards profitability through sales and gross profit growth, coupled with control of expenditure. Achieving sustainable profitability and generating free cashflows under our own steam remains a very current focus for myself and the business.
Lyn Rees
Chief Executive Officer
Financial Review
Income statement
In the trading year revenues grew 45% to GBP8.9m (2018: GBP6.1m).
Gross profit also grew 45% to GBP4.6m (2018: GBP3.2m) at a consistent gross margin of 52% (2018: 52%). General administrative expenses were kept under control at GBP9.0m (2018: GBP9.0m) despite research and development expenditure excluding people costs and net of tax credits being GBP0.3m higher at GBP0.2m (2018: net credit of GBP0.1m). This reflects our ongoing commitment to developing high quality products and specifically the development of the new version of the IONA(R) test for the Illumina NGS platform. Total administrative expenses were GBP9.4m (2018: GBP11.8m) after separately disclosed items as explained below.
Adjusted EBITDA loss was reduced by 29% to GBP3.1m (2018: GBP4.4m loss). Adjusted EBITDA is measured as the operating loss before depreciation, amortisation, separately disclosed items and operating lease commitments which will be affected by the implementation of IFRS16 in the 2020 accounts and beyond (see note 2 in the Group's Annual Report and Accounts).
Separately disclosed items
Significant items within administrative expenses are shown separately in the Consolidated Statement of Comprehensive Income, with further details in note 5 of the Annual Report and Accounts published today. Litigation expense was minimal in the year (2018: GBP2.7m) due to utilisation of prior year provisions and the September 2018 settlement with Illumina. Other separately disclosed items are non-cash accounting charges for share-based payments and warrant expenses of GBP0.3m (2018: GBP0.1m), plus GBP0.2m forward-looking potential impairment losses on trade and other receivables arising from the implementation of IFRS9 (not applied in 2018).
Operating loss
There is a resultant much-reduced operating loss after total administrative expenses of GBP4.8m (2018: GBP8.6m loss) due to rising revenues and gross profits, whilst maintaining administrative expenses at consistent levels year on year.
Finance income/(expenses)
During the period, the Group secured net finance income of GBP8.2m (2018: net expense GBP0.9m), principally due to the restructured relationship with Life Technologies which involved a significant debt write-off (see notes).
Taxation and foreign exchange
The net finance income led to a profit on ordinary activities before and after taxation of GBP3.4m (2018: loss of GBP9.5m). Historic tax losses not previously recognised were utilised to offset the resulting taxable profit for the reporting period. Due to the one-off nature of this taxable profit, the deferred tax associated with other historic losses will remain unrecognised until the Group can be more certain of recoverability through future profitability.
The Group made a small gain of less than GBP0.1m (2018: charge of GBP0.1m) on translation of its foreign subsidiaries and foreign currency balances to the presentational currency.
Total comprehensive profit
The Group recorded its first total comprehensive profit of GBP3.4m (2018: loss of GBP9.6m) due to the benefits of the debt restructure gains, although improved trading also contributed significantly.
Earnings per share
The total comprehensive profit of GBP3.4m (2018: loss of GBP9.6m) represents a gain per share of 1 pence (2018: 3 pence loss per share).
Statement of financial position
At the balance sheet date, the Group had total assets of GBP15.6m (2018: GBP14.6m). Property, plant and equipment increased to GBP2.1m (2018: GBP1.9m) with capital expenditure more than offsetting the depreciation of test workflow equipment supplied to customers in the first trading year of the Company to encourage adoption of the IONA(R) test. Current assets increased to GBP5.3m (2018: GBP4.3m) due to growth-associated working capital.
Total equity and liabilities increased to GBP15.6m (2018: GBP14.6m) with a significant switch away from loans to equity as a result of the debt restructuring agreed with Life Technologies in February 2019 (see notes).
Cash flow
The Group had an opening cash position of GBP0.3m (2018: GBP1.3m) and a net cash increase of GBP1.0m (2018: GBP1.0m outflow). Cash and cash equivalents at the end of the period were GBP1.3m (2018: GBP0.3m). During the period the Group used GBP4.0m (2018: GBP9.6m) of cash in operating activities. Cash used in investing activities was GBP0.6m (2018: GBP0.6m) due to classification of an unused escrow facility as a short-term financial asset. Underlying investment in property, plant and equipment was GBP1.1m (2018: GBP0.2m). Financing activities generated a surplus of GBP5.6m (2018: GBP9.2m) with equity fundraisings in May and October 2018, plus a warrant conversion whose proceeds were used to reduce Life Technologies loan funding, as described in the notes.
As with all businesses at this early stage of development, the Board assesses carefully the Group's ability to operate as a going concern and has detailed plans for revenue growth, margin improvement and cash flow control which are intended to achieve positive cash flows in the near future. More detail on these plans can be found in the notes to the accounts.
Dividends
No dividend is recommended (2018: GBPnil) due to the early stage nature of the Group.
Capital management
The Board's objective is to maintain a balance sheet that is both efficient at delivering long-term shareholder value and also safeguards the Group's financial position in light of variable economic cycles and the principal risks and uncertainties outlined in this report. As at 31 March 2019, the Group had net cash of GBP1.0m (2018: GBP11.9m net debt). Business growth and the increased scale achieved through the post-period Elucigene acquisition are expected to enable the Group to operate as a going concern for the foreseeable future.
Post-balance sheet events
In April 2019 the Group completed a gross GBP11.8m equity fundraise, partly to acquire Elucigene Diagnostics and also to increase the Group's working capital. See notes for further details.
Barry Hextall
Chief Financial Officer
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2019
Hot Features
Premium
2019 2018
-------------------------- ---------------------------
GBP GBP GBP GBP
---------------------------------------------------------- ------------ ------------ ------------ -------------
Revenue 8,882,362 6,146,863
Cost of sales (4,271,941) (2,973,730)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Gross profit 4,610,421 3,173,133
Other operating income 25,821 28,350
Administrative expenses
General administrative expenses (9,049,646) (8,956,324)
Revaluation of foreign currency denominated loan - -
Litigation expenses 37,864 (2,692,556)
Share-based payments and warrant expenses (251,004) (144,247)
Costs associated with the acquisition of subsidiary - (10,084)
Impairment (losses)/gains on financial assets (155,962) -
---------------------------------------------------------- ------------ ------------ ------------ -------------
Total administrative expenses (9,418,748) (11,803,211)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Operating loss (4,782,506) (8,601,728)
Financing income 9,381,761 45,264
Financing expenses (1,209,554) (981,979)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Profit / (loss) on ordinary activities before taxation 3,389,701 (9,538,443)
Tax credit / (charge) on loss on ordinary activities (491) 55,516
----------------------------------------------------------- ------------ ------------ ------------ -------------
Profit / (loss) for the year 3,389,210 (9,482,927)
Other comprehensive expense
Exchange translation differences 31,563 (121,096)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Profit / (loss) and total comprehensive profit (loss) for
the Year 3,420,773 (9,604,023)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Earnings per share GBP
Basic: Profit / (Loss) GBP0.01 (GBP0.03)
Diluted: Profit / (Loss) GBP0.01 (GBP0.03)
Consolidated Statement of Financial Position
As at 31 March 2019
2019 2018
GBP GBP
----------------------------------------------- ------------- -------------
Assets
Non-current assets
Goodwill 7,014,447 7,014,447
Intangible assets 1,228,928 1,384,160
Property, plant and equipment 2,054,163 1,919,406
Total non-current assets 10,297,538 10,318,013
------------------------------------------------ ------------- -------------
Current assets
Inventories 739,126 276,766
Other short-term assets - 475,385
Trade and other receivables 2,832,695 2,075,301
Tax asset 478,232 1,158,765
Cash and cash equivalents 1,250,362 282,432
------------------------------------------------ ------------- -------------
Total current assets 5,300,415 4,268,649
------------------------------------------------ ------------- -------------
Total assets 15,597,953 14,586,662
------------------------------------------------ ------------- -------------
Equity and liabilities attributable to equity
holders
Equity
Called up share capital 32,403,969 32,266,188
Share premium account 37,971,265 28,482,061
Merger relief reserve 10,012,644 10,012,644
Reverse acquisition reserve (39,947,033) (39,947,033)
Foreign exchange translation reserve (147,897) (179,460)
Warrants reserve 3,069,382 4,085,546
Retained losses (32,662,380) (37,318,758)
Total equity 10,699,950 (2,598,812)
------------------------------------------------ ------------- -------------
Current liabilities
Trade and other payables 4,172,464 3,792,112
Current tax liabilities - 9,487
Borrowings 76,388 59,344
Provisions 780,000
Total current liabilities 4,248,852 4,640,943
------------------------------------------------ ------------- -------------
Non-current liabilities
Borrowings 209,302 12,098,883
Deferred tax liability 233,496 262,990
Long-term provisions 206,353 182,658
Total non-current liabilities 649,151 12,544,531
------------------------------------------------ ------------- -------------
Total equity and liabilities 15,597,953 14,586,662
------------------------------------------------ ------------- -------------
The financial statements were approved and signed by the Directors and authorised for issue on 9 July 2019.
Adam Reynolds
Chairman
Company Registration No. 03971582
Consolidated Statement of Changes in Equity
For the year ended 31 March 2019
Share Share Merger Warrants Reverse Foreign Retained Total
capital premium relief reserve acquisition exchange losses
account reserve reserve reserve
GBP GBP GBP GBP GBP GBP GBP GBP
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Balance at
1 April 2017 32,266,188 28,482,061 10,012,644 3,069,382 (39,947,033) (58,364) (27,980,078) 5,844,800
Year ended
31 March 2018:
Loss for the
year - - - - - - (9,482,927) (9,482,927)
Other
comprehensive
loss - - - - - (121,096) - (121,096)
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
comprehensive
loss for the
year - - - - - (121,096) (9,482,927) (9,604,023)
Transactions
with owners
Share-based
payments - - - - - - 144,247 144,247
Warrants issued - - - 1,016,164 - - - 1,016,164
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
transactions
with owners - - - 1,016,164 - - 144,247 1,160,411
Balance at
31 March 2018 32,266,188 28,482,061 10,012,644 4,085,546 (39,947,033) (179,460) (37,318,758) (2,598,812)
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Balance at
1 April 2018 32,266,188 28,482,061 10,012,644 4,085,546 (39,947,033) (179,460) (37,318,758) (2,598,812)
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Year ended
31 March 2019:
Profit for
the year - - - - - - 3,389,210 3,389,210
Other
comprehensive
loss - - - - - 31,563 - 31,563
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
comprehensive
profit for
the year - - - - - 31,563 3,389,210 3,420,773
Transactions
with owners
Issue of share
capital 137,781 9,716,143 - - - - - 9,853,924
Share issue
expenses (226,939) - - - (226,939)
Issue of share - - - - - - - -
capital on
acquisition
Share-based
payments - - - - - - 251,004 251,004
Warrants
exercised - - - (1,016,164) - - 1,016,164 -
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
transactions
with owners 137,781 9,489,204 - (1,016,164) - - 1,267,168 9,877,989
Balance at
31 March 2019 32,403,969 37,971,265 10,012,644 3,069,382 (39,947,033) (147,897) (32,662,380) 10,699,950
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Consolidated Statement of Cash Flows
For the year ended 31 March 2019
2019 2018
GBP GBP
------------------------------------------------------ ------------ ------------
Cash flows from operating activities
Profit / (loss) for the year after tax 3,389,210 (9,482,927)
Adjustments for:
Taxation (credited)/charged 491 (55,516)
Finance costs 1,209,554 981,979
Finance income (35,672) (45,264)
Loan payable waived (9,346,089) -
Depreciation and impairment of property, plant
and equipment 944,524 1,046,951
Loss on disposal of property, plant and equipment 469 16,293
Amortisation of intangible non-current assets 155,232 155,232
Impairment on financial assets (IFRS9) 155,962 -
Foreign exchange movements 334,864 (357,127)
Share-based payment and warrant expense 251,004 144,247
Decrease in provisions (756,305) (2,533,298)
Movements in working capital:
(Increase)/decrease in inventories (462,360) 151,159
(Increase)/decrease in trade and other receivables (910,663) 137,961
Increase/(decrease) in trade and other payables 380,352 301,843
Decrease/(increase) in tax asset 653,994 (57,420)
------------------------------------------------------ ------------ ------------
Cash used by operations (4,035,433) (9,595,887)
Tax (paid) / received (12,933) 25,413
Investing activities
Purchase of property, plant and equipment (1,066,699) (163,268)
Proceeds on disposal of property, plant and
equipment - 4,500
(Investment)/reduction in short-term financial
assets 475,385 (475,385)
Interest received 553 -
------------------------------------------------------ ------------ ------------
Net cash (used in)/generated from investing
activities (590,761) (634,153)
Financing activities
Net proceeds from issue of shares 9,626,985 -
Proceeds from borrowings 128,992 9,388,732
Repayment of borrowings (4,139,100) (185,922)
Interest paid (9,820) (16,418)
------------------------------------------------------ ------------ ------------
Net cash generated from financing activities 5,607,057 9,186,392
------------------------------------------------------ ------------ ------------
Net increase/(decrease) in cash and cash equivalents 967,930 (1,018,235)
Cash and cash equivalents at beginning of
period 282,432 1,300,667
Cash and cash equivalents at end of period 1,250,362 282,432
------------------------------------------------------ ------------ ------------
Accounting policies
Basis of Preparation
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined by section 434 and 435 of the Companies Acct 2006. The financial information for the year ended 31 March 2019 has been extracted from the Group's financial statements upon which the auditor's opinion is unmodified and does not include any statement under section 498(2) or (498(3) of the Companies Act 2006.
The financial information has been prepared in accordance with International Financial Reporting Standards (IFRS), adopted for use in the European Union and including IFRIC interpretations issued by the International Accounting Standards Board (IASB) and the Companies Act (2006).
The consolidated financial information has been prepared on the basis of accounting policies set out in the Group's financial statements for 2019.
Company information
Yourgene Health plc (Premaitha Health plc until 7 November 2018, 'the Company' or 'Yourgene') is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is Enterprise House, Lloyd Street North, Manchester M15 6SE.
The principal activity of Yourgene Health plc and its subsidiaries is that of a molecular diagnostics business for research into, and the development and commercialisation of gene analysis techniques for prenatal screening and other clinical applications in the early detection, monitoring and treatment of disease.
The financial statements are presented in British Pounds Sterling, the currency of the primary economic environment in which the Company's headquarters is operated.
Going concern
In their assessment of the Group's ability to continue as a going concern, the directors have focused on the implications of the patent infringement legal cases which were settled in September 2018, the exercise of warrants by Life Technologies and the cancellation of all remaining related loans in February 2019, the post period end fundraise and acquisition of the profitable Elucigene Diagnostics in April 2019, the rate of growth of gross profits, decisions available to them for management of the cost base of the Group and the potential for future fundraising.
The Group has introduced a strategic planning process which has delivered a revised and ambitious business plan.
As described in the strategic report, the Group has made progress towards achieving positive cashflows through growth in revenues since launching the IONA(R) test in February 2015, acquiring Yourgene Bioscience in March 2017 and acquiring Elucigene Diagnostics ("Elucigene") in April 2019. The Group has reported a profit for the first time due to the Life Technologies debt restructure, however it continues to use cash in its trading operations albeit at a much-reduced level; which reflects that break-even levels of revenues have not yet been reached. The Group's forecasts include assumptions of further growth in revenue, which are key in achieving positive cashflows. The Directors have also assessed the Group's cost structure as part of the strategic planning process and implemented a number of cost reduction factors.
There is an ongoing commitment to keep costs and working capital under control so that increasing gross profits can drive positive cashflows. Detailed sensitivity analysis has been performed to assess the potential impact on the Group's liquidity caused by delays in revenue growth against expected levels along with potential mitigating actions which can be taken to safeguard the Group's cash position. These include working capital controls and reductions in discretionary spending. If events transpire differently to this assessment, for example if revenues fail to grow at the anticipated pace, then there could be lower cash headroom. Given the successful fundraise which took place alongside the acquisition of Elucigene the Directors believe there is sufficient cash available to avoid a cash shortfall.
The Directors have concluded that considering the circumstances described above and mitigation strategies in place, the Directors have a reasonable expectation that the Group and Company will have adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.
Revenue
IFRS 15 Revenue from Contracts with Customers, became effective for annual reporting periods beginning on or after 1 January 2018, and is applied to these accounts. The standard, which replaces IAS 18, covering contracts for goods and services, and IAS 11, covering construction contracts, addresses the recognition of revenue. The new standard is based on the principle that revenue is recognised to depict the satisfaction of performance obligations stated explicitly or implied in customer contracts in amounts that reflect the consideration to which the Group expects to be entitled in exchange for those goods or services. In adopting the new standard the Group has applied the modified retrospective approach. Comparatives for the year ended 31 March 2018 are not restated and whilst there was no cumulative impact of adoption, such an impact would have been recognised in retained losses as at 1 April 2018.
Revenue from the sale of goods, equipment and related services is recognised in the Statement of Comprehensive Income when the deemed Contractual Performance Obligations have been have been completed, which is determined to be at the point of despatch of the product or service unless there are specific provisions in the relevant contract. Revenue from the provision of testing and reporting services is recognised upon delivery of the report to the customer. Grant income and income for research projects is recognised when all conditions for receiving the grant or research income have been satisfied. The application of IFRS15 has had no impact on the Group accounts.
Separately disclosed items
Separately disclosed items are those significant items which in management's judgement should be highlighted on the face of the Statement of Comprehensive Income by virtue of their size or incidence to enable a full understanding of the Group's financial performance. Significant items in Finance Income are disclosed in the relevant note below.
Financial assets
IFRS 9 Financial Instruments has been adopted in these accounts and introduces extensive changes to IAS39's guidance on the classification and measurement of financial assets and their impairment. The impact of this adoption is described in Note 2.
Financial assets are recognised in the Group's statement of financial position when the Group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.
Financial assets are initially measured at fair value plus transaction costs, other than those classified as fair value through profit and loss, which are measured at fair value.
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 goods and services to customers (trade receivables), but also incorporate other types of contractual monetary assets. They are measured subsequent to initial recognition at amortised cost using the effective interest rate method.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired (a) where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected, or (b) where there are expected credit losses in the next reporting period as required by IFRS 9.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Treatment of Thermo Fisher concurrent loan and warrant arrangements
In December 2015, the Group entered into a loan arrangement with Life Technologies Limited, a company in the Thermo Fisher Scientific Group ('Thermo Fisher'), under the terms of which Thermo Fisher provided a loan facility of GBP5m to the Group. On the same day, the Group entered into a share warrant agreement with Thermo Fisher ('2015 warrants'). During the prior year, the Group entered into an amended and restated loan facility granted by Thermo Fisher. In return for an increase in the facility of GBP4m, the Group granted two tranches of warrants to Thermo Fisher ('2016 and first 2017 warrants'). In June 2017 a further increase of $5m was agreed in return for two further tranches of warrants (the 'second 2017 warrants' and the '2018 warrants').
The Group assessed the accounting treatment of the loans and warrant agreements and reached the judgement that, although they are separate financial instruments, it was necessary to allocate the initial proceeds received between the loan and the warrants based on their fair values, because the instruments were entered into at the same time.
Having considered the terms of the 2015, 2016, first 2017, second 2017 and 2018 warrants, it was concluded that they represent equity instruments. The warrants are accounted for at fair value on inception in accordance with IAS 32. The loans were initially recognised at fair value on inception and subsequently measured at amortised cost using the effective interest rate method, in accordance with IAS 39.
Prior to drawdown of the relevant facilities, the value of the warrants when issued were treated as a commitment fee for the advancement of the increased loan facility. The commitment fee was reflected within prepayments and is released against the loan facility balance as the facilities are drawn by the Group.
During the reporting period Life Technologies exercised the second 2017 and 2018 warrants and the associated equity valuation was reassigned to retained profits. The proceeds from this warrant exercise were allocated against outstanding loans and then all remaining loans were cancelled as described in note 30.
Segment reporting
In the opinion of the Directors, the Group has one class of business in three geographic areas, a molecular diagnostics business sells into the UK, Europe and other countries referred to as 'International'. The Group is therefore considered to have a single operating segment which is monitored by the Group's chief operating decision makers. Strategic decisions are made on the basis of unadjusted operating results.
Revenue
Revenue, analysed by category, was as follows:
2019 2018
GBP GBP
----------------------- ---------- ----------
Turnover
Sale of goods 4,976,470 3,554,048
Rendering of services 3,905,892 2,592,815
8,882,362 6,146,863
----------------------- ---------- ----------
Revenue analysed by geographical market
2019 2018
GBP GBP
---------- ----------
UK 1,215,722 1,014,723
Europe 1,780,384 1,213,773
Rest of the World 5,886,256 3,918,367
8,882,362 6,146,863
------------------- ---------- ----------
During 2019, the fourth year of trading revenues for the Group, GBP2,374,372 (2018: GBP1,449,535) of the Group's revenue depended on a total of two (2018: two) customers who each represented more than 10% of Group revenues. These customers combined represent 26.7% of Group revenues (2018: 23.5%).
Non-current assets
The Group's non-current assets are located in the following geographic regions:
2019 2018
GBP GBP
-------------------------- ------------ ------------
UK 10,845,876 10,538,300
Europe - -
Rest of the World 748,352 921,170
Intra-Group eliminations (1,296,690) (1,141,457)
--------------------------
10,297,538 10,318,013
-------------------------- ------------ ------------
Separately disclosed items
2019 2018
GBP GBP
------------------------------------------- ---------- ------------
Litigation expenses 37,864 (2,692,556)
Share-based payments and warrant expenses (251,004) (144,247)
Costs associated with the acquisition
of subsidiary - (10,084)
Impairment (losses)/gains on financial (155,962) -
assets
-------------------------------------------
(369,102) (2,846,887)
------------------------------------------- ---------- ------------
Litigation expenses represents the release of the excess provision created for the patent infringement claim (see note 22).
Share-based payments and warrant expenses relate to the provision made in accordance with IFRS 2 'Share-based payment' following the issue of share options to employees during the year as set out in Note 29.
Costs associated with the acquisition of subsidiaries represents costs incurred during the acquisition of Yourgene Bioscience during the comparative period ended 31 March 2018.
Impairment of financial assets relates to one of the customer loan's which has been impaired by GBP107,473 and GBP48,489 of Expected Credit Losses arising from the implementation of IFRS 9, see note 19.
Operating loss
2019 2018
GBP GBP
----------------------------------------------- ---------- ----------
Operating loss for the year is stated
after charging/(crediting):
Research and development expenditure 691,239 501,438
Research and development tax credit (473,950) (628,688)
Depreciation of property, plant and equipment 944,524 1,046,951
Loss on disposal of property, plant and
equipment 469 16,293
Amortisation of non-current intangible
assets 155,232 155,232
----------------------------------------------- ---------- ----------
Employees
The average monthly number of persons (including Directors) employed by the Group during the year was:
2019 2018
Number Number
Directors 8 8
Administrative 49 53
Research and Development 37 30
------------------------- ------- -------
94 91
------------------------- ------- -------
Their aggregate remuneration comprised:
2019 2018
GBP GBP
Wages and salaries 3,832,974 4,283,919
Social security cost 347,938 344,440
Pension cost 150,971 115,982
Share-based payments (note 29) 251,004 242,419
------------------------------- -------------------------------
4,582,887 4,986,760
-------------------------------- ------------------------------- -------------------------------
Finance income
2019 2018
GBP GBP
---------------------------------------- ---------- -------
Interest income:
Bank deposits 285 11,602
Loans and receivables 35,387 33,662
Total interest income 35,672 45,264
---------------------------------------- ---------- -------
Other finance income:
Thermo Fisher loan (see separate note) 9,346,089 -
Total finance income 9,381,761 45,264
---------------------------------------- ---------- -------
Total interest income for financial assets that are not held at fair value through profit or loss is GBP35,672 (2018: GBP45,264).
Investment income earned on financial assets, analysed by category of asset, is as follows:
2019 2018
GBP GBP
---------------------- ====== ======
Loans and receivables 35,672 45,264
---------------------- ------ ------
Finance expense
2019 2018
GBP GBP
------------------------------------------------------ ---------- --------
Interest on bank overdrafts and loans 7,252 10,360
Interest on other loans and borrowings (see note 30) 1,202,302 971,619
Total finance expense 1,209,554 981,979
------------------------------------------------------ ---------- --------
Earnings per share
Basic
Basic earnings per share is calculated by dividing the total comprehensive profit for the period of GBP3,420,773 (2018: loss GBP9,604,023) by the weighted average number of ordinary shares in issue during the period 396,597,093 (2018: 321,218,709).
Diluted
Diluted earnings per share dilute the basic earnings per share to take into account share options and warrants. The calculation includes the weighted average number of ordinary shares that would have been issued on the conversion of all the dilutive share operations and warrants into ordinary shares. The adjusted weighted average number of shares used to calculate diluted earnings per share is 399,636,919 (2018: 321,218,709).
92,269,091 options and warrants (2018: 131,206,885) have been excluded from this calculation as the effect would be anti-dilutive.
After the reporting period end a further 140m new ordinary shares were issued as described in Note 34 of the Group's Annual Report and Accounts published today.
Trade and other receivables
2019 2018
GBP GBP GBP GBP
---------- ---------- ---------- ----------
Trade receivables 2,810,957 1,778,372
Provision for doubtful trade receivables (884,349) (887,071)
Loss allowance due to expected credit
losses under IFRS 9 adoption (48,489)
------------------------------------------ ---------- ---------- ---------- ----------
Net Trade Receivables 1,878,119 891,301
Other receivables 86,826 35,052
VAT recoverable 282,659 223,698
Other loans and receivables at amortised
cost 302,386 379,410
Loss allowance due to expected credit
losses under IFRS 9 adoption (107,473)
------------------------------------------ ---------- ---------- ---------- ----------
Net other loans and receivables at
amortised cost 194,913 379,410
Prepayments 390,179 545,840
------------------------------------------
2,832,695 2,075,301
------------------------------------------ ---------- ---------- ---------- ----------
An amount of GBP785,317 (2018: GBP785,317) remains provided for doubtful receivables relating to a customer which is now in bankruptcy proceedings and legal proceedings are ongoing to recover the outstanding monies. An additional amount of GBP99,032 (2018: GBP101,754) has been provided for smaller doubtful receivable balances.
A loss allowance against trade receivables of GBP48,489 (2018: GBPnil) for Expected Credit Losses (as defined by IFRS9) has been provided for due to the implementation of IFRS 9. These expected credit losses were calculated after analysing the Group's receivable risks in geographic groupings which are deemed to reflect appropriate credit risk categories. Delinquency rates and political stability are deemed to be very low in Europe and Asia, leading to no impairment of receivables. In the Middle East and Africa region, delinquency of 4%, greater distance from the Group's operating units and general political instability have been deemed to give an elevated risk rating of 10% expected credit losses, representing one smaller customer fully defaulting or one larger customer defaulting on c20% of their outstanding receivables.
Other loans and receivables relate to two loans to a customer of the Group. Under implementation of IFRS9 the loan has been impaired by a Loss allowance of GBP107,473 (2018: GBPnil) to reflect potential impairment in the next reporting period, due to customer-specific dynamics.
Included in prepayments are amounts totalling GBPnil (2018: GBP33,346) in respect of a commitment fee for the undrawn increased facility arising on issue of the 2016 and 2017 Thermo Fisher warrants as detailed in note 30.
Thermo Fisher Scientific loan and warrants
Thermo Fisher 2015 warrants
On 11 December 2015, the Group entered into a loan agreement with Life Technologies Limited ('Thermo Fisher'), under the terms of which Thermo Fisher provided a loan facility of GBP5m to the Group subject to their approval over the usage of drawn funds. The term of the loan was eight years and the rate of interest applied to the loan was 6%. The loan was secured by a fixed and floating charge against the intellectual property of the Group.
The Group simultaneously entered into a share warrant agreement with Thermo Fisher, issuing warrants over 20,325,204 shares to Thermo Fisher. The warrants have an exercise price of 24.6p per share and have a term of eight years.
Initial consideration received was GBP2,760,000. The Group allocated the proceeds of the 2015 warrant, according to the respective fair values of the loan and warrant instruments as follows:
GBP
--------- ---------
Loan 989,637
Warrants 1,770,363
--------- ---------
Thermo Fisher 2016 & March 2017 warrants
On 22 September 2016, the Group entered into an amended and restated eight-year loan facility granted by Thermo Fisher. In return for an increase in the facility of GBP4m, the Group granted two tranches of warrants to Thermo Fisher. These are respectively the 2016 and March 2017 warrants.
The 2016 warrants issued by the Group on 22 September 2016 are over 17,094,018 shares with an exercise price of 11.7p per share and a term of 7.25 years.
The March 2017 warrants issued by the Group on 31 March 2017 are over 16,913,319 shares with an exercise price of 11.825p per share and a term of 6.75 years.
July 2017 warrants and February 2018 warrants
On 11 July 2017 the Group entered into a USD loan facility agreement with Thermo Fisher. The Group also issued warrants over 28,938,797 shares to Thermo Fisher with an exercise price of 10.625p per share and a term of 6.5 years, being the July 2017 warrants.
The Group also simultaneously issued an additional tranche of warrants, being the February 2018 warrants, for which the exercise price and quantity of warrants were set on the later grant date of 9 February 2018. The exercise price was 5.775p and the number of warrants issued totalled 12,417,368.
On 17 February 2019 Thermo Fisher exercised the July 2017 and February 2018 warrants as part of a wider capital and commercial restructuring. The proceeds from this exercise were offset against loans outstanding as described below.
Application of IAS 32/IAS 39
The Group assessed the accounting treatment of the loans and warrant agreements and concluded that, although they were separate financial instruments, it was necessary to allocate the initial proceeds received between the loan and the warrants based on their fair values, because the instruments were entered into at the same time.
Having considered the terms of all of the warrants, it was concluded that they represented equity instruments. The warrants are accounted for at fair value on inception in accordance with IAS 32. The loan was initially recognised at fair value on inception and subsequently measured at amortised cost using the effective interest rate method, in accordance with IAS 39.
Prior to drawdown of the relevant facilities, the value of the warrants when issued were treated as a commitment fee for the advancement of the increased loan facility. The commitment fee was reflected within prepayments and was released against the loan facility balance as the facilities were drawn by the Group.
February 2019 Corporate and commercial restructure
In February 2019 the Group agreed a corporate and commercial restructure of the relationship with Thermo Fisher, through its Life Technologies subsidiary. As part of the restructure, Thermo Fisher exercised in full its July 2017 and February 2018 warrants as described above. The notional GBP3.8m proceeds of this warrant conversion were offset against the outstanding loans owed by the Group to Thermo Fisher. The second part of the restructure was the cancellation of GBP9.4m of debt being all remaining borrowings owing to Thermo Fisher, including any accrued interest. All security held by Thermo Fisher associated with these loans was also cancelled. The third part of the restructure was a new Commercial Agreement between the parties which gave Thermo Fisher certain exclusive commercial rights in specified South East Asian countries for a period of 3 years until 2022, and Thermo Fisher entered into a Lock-in Deed for its converted warrant shares for the same period. Under the terms of the Commercial Agreement the Group will pay a modest sales commission, once it achieves positive cashflows. This commission is capped at GBP6.5m. In addition the Group agreed to a GBP6.5m contingent liability as described below. Future share gains made by Thermo Fisher on the converted warrants will initially lower the commission cap and, once that is fully satisfied, will erode the contingent liability until that is extinguished.
Contingent Liability
A part of the February 2019 restructure was the creation of a GBP6.5m contingent liability, which is payable by the Company to Thermo Fisher only in the event of a sale of the Company or an insolvency event.
The 2015 warrants are accounted for, as noted above, as an equity instrument under IAS 32, and are not subsequently remeasured. As the loan is subsequently measured at amortised cost using the effective interest rate method, an accretion charge is recognised over the life of the loan to restore its carrying value to the amount drawn down. The charge recognised in the year is as follows:
GBP
-------------------------------- ------------------
Fair value brought forward 11,727,983
Amounts drawn down in the year 128,992
USD loan revaluation 308,948
Interest charges 851,609
Accretion charge 351,157
Commitment fee released (33,346)
Amounts repaid (3,946,133)
Loan waived (9,389,210)
-------------------------------- ------------------
Carrying value at 31 March 2019 -
-------------------------------- ------------------
The total amounts included in prepayments as a commitment fee for the undrawn increased facility in respect of the fair values of the various warrants totalled GBPnil (2018: GBP33,346) at the balance sheet date. This represented the fair value of the equity instrument issued in respect of the February 2018 warrants released against the balance of the loan on drawdown of amounts against the additional facility.
At 31 March 2019, the following warrants were outstanding in respect of ordinary shares:
Date of grant Exercise period 2019 Number 2018 Number ----------------- -------------------------------------- ----------- ----------- 11 December 2015 11 December 2015 to 10 December 2023 20,325,204 20,325,204 22 September 2016 22 September 2016 to 10 December 2023 17,094,018 17,094,018 31 March 2017 31 March 2017 to 10 December 2023 16,913,319 16,913,319 11 July 2017 11 July 2017 to 10 December 2023 - 28,938,797 9 February 2018 9 February 2018 to 10 December 2023 - 12,417,368 ----------------- -------------------------------------- ----------- -----------
The fair values of the warrants granted were determined using a variation of the Black-Scholes model, incorporating the dilutive effects of the warrants. The following principal assumptions were used in the valuations:
2015 2016 2017 July 2017 Feb 2018
warrants warrants warrants warrants warrants
------------------------ --------- ---------- ---------- --------- ---------
Share price 20.63p 10.625p 11.625p 10.725p 5.20p
Volatility 68% 48.63% 59% 52.9% 50.06%
Dividend yield 0% 0% 0% 0% 0%
Risk-free interest rate 1.74% 0.6% 0.979% 1.08% 1.43%
Expected option life 8 years 7.25 years 6.75 years 6.5 years 6 years
------------------------ --------- ---------- ---------- --------- ---------
Options and weighted average exercise prices are as follows for the reporting periods presented:
Weighted
Number average
of exercise
share price
options p
------------------------------------------- ---------- ---------
Outstanding at 1 April 2017 54,332,541 17
Granted 41,356,165 9
------------------------------------------- ---------- ---------
Outstanding at 31 March 2018 95,688,706 13
------------------------------------------- ---------- ---------
Exercised 41,356,165 9
------------------------------------------- ---------- ---------
Outstanding & Exercisable at 31 March 2019 54,332,541 17
------------------------------------------- ---------- ---------
In January 2018 Premaitha entered into a Secured Loan Facility with Thermo Fisher. The Facility from Thermo Fisher provided up to GBP2.1m to fund costs related to the now settled Illumina litigation against Premaitha. Thermo Fisher was not a party to the litigation. The Facility was provided on a commercial basis consistent with previous loans and was secured on the shares of the Company's Taiwanese subsidiary undertaking Yourgene Health (Taiwan) Co., Ltd, formerly Yourgene Bioscience Co., Ltd. There were no share warrants attached to the loan facility. Unused funds from the Facility were returned to the lender with no residual liabilities or charges. On 17 February the Facility was cancelled as part of wider capital and commercial restructuring as described above. As a result of this debt restructure all security held by the Facility was also cancelled.
Operating lease commitments
Lessee
2019 2018
GBP GBP
---------------------------------------------------------- ------- -------
Minimum lease payments made under operating leases during
the year 205,699 193,901
---------------------------------------------------------- ------- -------
At the reporting period end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2019 2018
GBP GBP
--------------------------- ------- -------
Within one year 227,336 182,701
Between two and five years 529,802 620,852
In over five years - -
--------------------------- ------- -------
757,138 803,553
--------------------------- ------- -------
Events after the reporting date
After the reporting date the Company acquired of Elucigene Diagnostics (the trading name of Delta Diagnostics UK Ltd) and completed an associated fundraise, both of which completed on 25 April 2019. The Company raised gross proceeds of GBP11.8m through the issuance of 115,418,869 new ordinary shares with a number of investors and Directors at a price of 10.25 pence per share. GBP6.75m of these proceeds were used as cash consideration for the acquisition of Elucigene with a further 24,581,111 new shares also issued to Elucigene shareholders at a price of 11.7 pence per share. The residual funds are intended to fund continued international expansion of the enlarged business. Excess cash in the Elucigene business at the time of completion, over and above GBP0.6m of cash which formed a contractual part of the acquired business, was returned to the former Elucigene shareholders in the form of additional cash consideration. Total consideration for the Elucigene business was GBP9.6m, with an enterprise value of GBP8.8m, paid as GBP6.75m cash and GBP2.88m shares. Net assets acquired were GBP2.2m plus GBP7.4m of intangible assets. Detailed IFRS3 allocations of the intangible value between goodwill, customer relationships and brand equity are ongoing. Elucigene's calendar 2018 accounts, as filed at Companies House and reported under FRS102, reported revenues of GBP3.6m and EBITDA of GBP1.0m.
Alongside the acquisition of Elucigene it was announced that 10.59m of new performance-based share options would be issued to existing and acquired directors and management to incentivise value creation in the enlarged group. These share options were issued on 3 June 2019.
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
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