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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Cobra Bio-Man. | LSE:CBF | London | Ordinary Share | GB0031704835 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:7231S Cobra Bio-Manufacturing PLC 02 December 2003 For Immediate Release 2 December 2003 Cobra Biomanufacturing Plc Preliminary Results for the year ended 30 September 2003 Cobra Biomanufacturing Plc, the international manufacturer of biopharmaceuticals, today announces its preliminary results for the twelve months ended 30 September 2003. Highlights Operational: * June 2003 Acquisition of additional biological manufacturing capacity * June 2003 Placing and open offer raised #5.2m before expenses * Major progress in the US during 2003 revenue up 158% * 24 global customers, 27 programmes ongoing Financial: * Manufacturing revenue up 137% to #6.0 million (2002: #2.5 million) * Profit before tax #0.8 million (2002: #0.9 million loss) * Profit after tax #1.0 million (2002: #0.1 million profit) * EPS up 590% to 6.9 pence (2002: 1.0 pence) * Increase in gross margin to 57% (2002: 34%) * Cash at bank #7.3 million (2002: #2.6 million) Commenting on the results, Peter Fothergill, Executive Chairman said: "We are extremely pleased with the excellent progress Cobra has made throughout the year. The placing in June 2003 was well over subscribed and we look forward to the additional facilities coming on-line in 2004. Together with the increase in repeat business from existing clients and our strong headway in the US market, 2004 promises to be an exciting year for Cobra." For further information, please contact: Cobra Biomanufacturing Plc Tel: +44 (0) 1782 714 181 David Thatcher, Chief Executive Buchanan Communications Tel: +44 (0) 207 466 5000 Mark Court/ Rebecca Skye Dietrich Chairman's Statement Cobra's first full financial year as an independent Plc has fulfilled the promise of the business on its listing on the Alternative Investment Market in June 2002. Contract manufacturing revenue for the financial year ended 30 September 2003 of #6.0 million is 137% ahead of the previous year (2002 #2.5million) with a profit before tax of #0.8 million (2002 #0.9 million loss) and cash flow from our existing Keele Facility remaining positive. These results have been achieved through increased business development activity particularly in the US following the opening of our office in Chicago in November 2002. Revenue from the US, the world's largest biopharmaceutical market, provided 24% of the Group's increased revenue in the year; supported by repeat business from customers worldwide, representing 67% of the revenue for 2003. Cobra's scale of potential business in the supply of early-stage clinical trials provided the impetus behind a doubling of capacity in June 2003, through the acquisition of an additional manufacturing site in Oxford ("the Oxford Facility "), and a Placing and Open Offer raising #5.2 million before expenses, which was 5 times oversubscribed. The Oxford Facility will be a dedicated process development and production unit. This will expand both DNA and Virus manufacturing capacity, and importantly, will also allow for Phase I and II Protein manufacture. This makes Cobra the only organisation that we know of able to offer customers all forms of biopharmaceutical products during their critical development phases. During the financial year we completed contracts for 24 customers, we maintained 27 customer programmes and entered into an increasing number of agreements. These agreements provide the option for Cobra to supply late stage clinical trial materials and in-market supply and they cover products with a relatively high probability of clinical and commercial success. The Group is currently investigating ways of accessing larger scale facilities in anticipation of such an outcome. It should be appreciated that even without such facilities, our business model provides for the Group to participate in a customer's product success via technology transfer fees and/or royalties on sales where products incorporate the Group's patents and know-how. Accordingly, we continue to research new ways of formulating and manufacturing with several new patent applications in progress. During the year our unique DNA process patent was granted in Europe following its earlier approval in the US. This patent relates to the large-scale manufacture of Plasmid DNA medicines and vaccines to the rigorous quality standards required by the regulatory authorities. The funding environment for biotechnology companies in the UK and Europe remains an issue, and many of these companies are Cobra's potential customers. The US market remains relatively buoyant and a further expansion of business development in the US is underway. Recruitment of high calibre people is also now taking place in Oxford to progressively staff the new facility with the result that over the next financial year employee numbers will almost double. We anticipate key appointments in Human Resource Management, Account Management and Quality Assurance. As indicated, further expansion is now under review and as the scale of the business increases so too will the range of corporate development options on the one hand and corporate compliance requirements on the other. It is therefore with pleasure that I am able to announce from today the appointment of a third non-executive director, Michael Gatenby (see separate press release), a chartered accountant who graduated from Cambridge University with an Honours degree in Law, followed by a successful career in the City. Cobra is a knowledge-led business driven by its highly qualified and experienced staff, whose commitment and enthusiasm have resulted in demonstrable success. Maintaining this momentum in the present environment will be challenging, but the fundamentals are in place to leverage our position in the world-wide marketplace for biopharmaceuticals with market leadership as our goal. G Peter Fothergill Executive Chairman 2 December 2003 Chief Executive's Review The year ended 30 September 2003 was a critical year in Cobra's development, being the first full financial year as an independent Plc. Under challenging market conditions, we have increased our contract manufacturing revenue by 137% to #6.0 million (2002 #2.5 million) and generated a pre-tax profit of #0.8 million (2002 #0.9 million loss). The foundation for further expansion was laid with a further successful fundraising of #5.2 million before expenses and the acquisition of the new Oxford Facility, doubling our present capacity. In addition, during 2003 we concluded a number of deals, which demonstrate the value of the Group's technology. Our Business Cobra's mission is to work in partnership with our customers to accelerate the clinical development of their products and in so doing add significant value to their businesses. This added value is achieved by the application of the most advanced manufacturing technologies available that deliver products to our customers of the highest quality standards. Cobra specialises in the manufacture of new wave, high value, potent medicines, whose origins are in the DNA revolution and whose commercialisation requires the development of innovative manufacturing solutions. Business Climate Manufacturing Revenue 2003 2002 Increase by region (#000's) UK 2,114 843 151% US 1,426 553 158% Europe 711 972 -27% Rest of the World 1,769 172 928% Total 6,020 2,540 137% The Group has been able to increase manufacturing revenue in a difficult trading environment. Revenue from the US has increased by 158%, this is the primary target market for our services because 75% of the global biotechnology research and development spend is in the US. We have increased revenue by 151% in the UK, the location of the most exciting product oriented companies in Europe. In 2003, Continental Europe revenue dropped by 27%; a reflection of the appetite for biotechnology funding in Europe. The strength of Cobra's offering is validated by our increased sales under such an adverse trading environment. We have also been able to establish strong sales in regions not normally associated with biotechnology, in particular Australia and South Africa, with revenue up 928% in the Rest of the World. Although the reduced level of funds flowing into the biotechnology sector has weakened the overall market for Phase I/II biomanufacturing, the reduction in demand has been offset by the increasing involvement of non-governmental organisations in vaccines development and also investment by government agencies in measures to protect against bio-terrorism. During the year the sentiment towards the US biotechnology sector has rebounded and 2003 is set to become the second best year ever in terms of financing. This factor coupled with the predominance of the US in this sector, makes Cobra's penetration of the US market pivotal to our continued growth and we will increase our sales and marketing effort in the US through 2004. Cobra's Strategy The Group's short-term goal is to become a leader in the supply of high value, high potency biopharmaceuticals for early phase clinical trials with a mid-term objective of moving into the supply of commercial quantities of these drugs. The foundation of this growth is in the application of those innovative manufacturing technologies, which can capture long-term value for the Group. Achieving the mid-term objective is the critical next stage of the Group's development. Biopharmaceutical drugs require expensive specialist manufacturing facilities. There is a significant risk of product failure in clinical testing, and investment in manufacturing plant is high risk for all pharmaceutical companies. To manage such risks contract manufacturers like Cobra need a diverse pipeline of promising projects feeding through from early clinical trials. Cobra's current strategy is to develop a pipeline of successful innovative products in early clinical trials to mitigate the effect of drug failure on investment in commercial manufacture. Expansion in Oxford In June 2003, the Group acquired the Oxford Facility, previously operated by Accentus Plc (a division of AEA Technology Plc). This acquisition is the keystone in our expansion strategy. The facility, originally built by British Biotech Plc for the GMP ("Good Manufacturing Practice") manufacture of vaccines, is being completely refurbished and will more than double the Group's current capacity. Three GMP manufacturing suites, one microbial, one animal cell and one equipped to manufacture either type of product will be fully validated and operational by the second quarter of 2004. This expansion will give Cobra the capacity to support up to six GMP microbial and four animal cell programmes simultaneously and will also double our process development capability. Our Success is Our Clients Success Cobra not only manufactures products per se but also provides a comprehensive support service from cloning through to preparation of the chemistry, manufacturing and controls ("CMC") dossier for regulatory submission and then supporting our clients with their ongoing dialogue with the regulatory agencies. The success of this business is founded on excellence in molecular biology, an innovative approach to bioprocessing, an overriding commitment to quality and where possible, exceeding the requirements of the regulatory authorities. This core competency in advanced molecular biology allows Cobra to manufacture all the major types of biopharmaceutical products; Plasmid DNA, genetically engineered Viruses, recombinant Proteins and Cell Therapies. Molecular and Cell Biology Manufacturing revenue 2003 2003% 2002 increase by product (#000's) DNA 3,189 53% 1,236 158% Virus 1,063 18% 554 92% Protein 1,576 26% 565 179% Cell line 192 3% 185 4% Total 6,020 2,540 Although Cell Line construction revenue in 2003 only increased by 4%, molecular biology underpins Cobra's competitive edge. Most projects handled by the Group require upfront molecular biology to tailor the final production cell line for scale up and regulatory approval. In addition, our Molecular Biology Team continues to engineer proprietary cell lines; the cornerstone of our process intellectual property. This research is aimed at improving the productivity and/ or safety of our partners' products in ways that can significantly add value to their programmes. Our Cell Line intellectual property ranges from UCOE, an animal cell expression technology, to Cobra's microbial strains designed to enhance quality: ORT(R) for antibiotic free manufacture of biopharmaceuticals; high potency strains of Salmonella for oral delivery of vaccine antigens and strains of Escherichia coli and Bacillus subtilis genetically engineered to reduce contaminant profiles. Plasmid DNA and DNA Vaccines DNA Revenue 2003 2003% (#000's) DNA HIV/AIDS vaccines 2,033 64% DNA other vaccines 209 6% Total DNA vaccines 2,242 70% DNA other 947 30% Total 3,189 Cobra has a global reputation for the quality of its Plasmid DNA. DNA manufacture represented 53% of total revenue for 2003, a 158% increase on 2002. We have continued to consolidate our position as a major manufacturer of DNA vaccines (70% of the total DNA revenue for 2003) and a leader in the provision of DNA HIV/AIDS vaccines (64% of the total DNA revenue for 2003). The current mode of vaccination used in DNA vaccination programmes uses a prime with Plasmid DNA then either a boost with DNA or with a genetically engineered Virus. Cobra is the only contract manufacturer providing a "one-stop shop" for all these strategies. HIV/AIDS Vaccines Cobra now supports three DNA HIV/AIDS vaccine programmes sponsored by the International AIDS Vaccine Initiative ("IAVI"), two for the South African AIDS Vaccine Initiative ("SAAVI") and two for the EUROVAC/CHIVAC Consortium. The lead vaccine candidate globally is a DNA vaccine approach (HIV.A) manufactured by Cobra. The vaccine was developed by Professor Andrew McMichael, at the University of Oxford and Professor Bwayo at the University of Kenya. This product has just completed a blinded Phase I/II trial at St Mary's Hospital, London and in Kenya, the results of which will be available in the first quarter of 2004. A prime-boost strategy with a DNA.HIVA prime and boosting with MVA.HIVA is being investigated in an additional trial in the UK. A second vaccine, DNA.RENTA sponsored by Professor Andrew McMichael's laboratory was also manufactured by Cobra in 2003. Phase I trials are expected to start in the first quarter of 2004. A third vaccine sponsored by IAVI and originating from Professor Peter Liljstrom's laboratory at the Karolinska Institute, Stockholm has been prepared. Pre-clinical studies will begin in the fourth quarter of 2003. Clinical evaluation is expected to start in the third quarter of 2004. In November 2002 we announced a long-term manufacturing deal with SAAVI providing the Group with the option to manufacture for the South African market and also giving the Group the commercialisation rights on the vaccine for the rest of the world. These vaccines have now been manufactured and will enter clinical trials in 2004 in the US, sponsored by the National Institute of Health HIVTN Network. Multiple Sclerosis This year we initiated work on two DNA vaccines against multiple sclerosis developed by Bayhill Therapeutics Inc. a spin out of Stanford University in the US. Multiple sclerosis is a degenerative disease caused by the destruction of nerve tissue by the body's immune system. We are pleased to be working with such an innovative company, which has invented a pioneering approach to prevent the devastating affects of autoimmune disease. Virus Manufacture Revenue from Virus manufacture increased by 92% in 2003, driven largely by a prostate gene therapy project with the Australian pharmaceutical company, Mayne Pharma. We are pleased to report that our other client in prostate cancer gene therapy, ML Laboratories Plc, entered a Phase II clinical trial, and we have also initiated a contract for the manufacture of lenti-virus with Europe's leading gene therapy company; Oxford Biomedica Plc. Protein Manufacture Group revenue from Protein manufacture rose by 179% in 2003, largely due to the process development and GMP production of a generic interferon for clinical evaluation. We were also pleased to begin work with Dr Shirley Longacre of the Institute Pasteur on an exciting protein sub-unit vaccine for malaria. Sponsored by the Institute, the French Ministry of Research, the European Union and the World Health Organisation this vaccine is manufactured in baculovirus and is the only vaccine, which shows sterilising immunity in a Sri Lankan macaque model. In November 2002 we announced that one of our customers, Evolutec Limited, had obtained permission to carry out a Phase I clinical trial for a Protein biopharmaceutical to treat conjunctivitis. This project was the first clinical programme involving a Protein manufactured by Cobra under scrutiny from the US Food and Drugs Agency ("FDA"). Protein biopharmaceuticals constitute over 90% of the global research and development spend on biopharmaceuticals. We expect Protein manufacture will be a growth area for Cobra as the Group gains a track record for delivery in this sector. Cell Therapies The use of live cells or organisms as pharmaceutical agents or vaccines is by no means new. However the use of molecular biology to manipulate and enhance the safety and efficacy of such organisms is a new and fertile area of clinical research. In July 2003 it was a pleasure to announce a long-term partnership with the US company Advaxis Inc for the manufacture of a vaccine against cervical cancer. Based on the pioneering work of Yvonne Patterson of the University of Pennsylvania, this vaccine is delivered by a live genetically engineered but harmless strain of Listeria. Cobra is also working on a long-term project with the UK government's Defence Science and Technology Laboratories (" DSTL") on an oral vaccine approach that could be used to immunise against bio-terrorist instigated and other diseases. Outlook Cobra Biomanufacturing Plc has a unique offering in the biopharmaceutical sector. Based on the advanced application of genetic engineering and bio-processing approaches we are able to significantly enhance the value of our clients' products and in exchange develop long-term value flowing back to the Group. We have demonstrated over the past year that the value of our process know how can be captured through commercial manufacturing agreements, through royalty deals on process intellectual property rights and in some cases through the acquisition of rights to commercialise the products themselves in designated territories. Dr David Thatcher Chief Executive 2 December 2003 Financial Review Cobra is a knowledge-led business, built and sustained through the innovation of its employees. However we also recognise that financial discipline is critical if the Group is to attain the profitable growth required to create long-term value for our shareholders. Profit after tax for the financial year 2003 was #1.0 million (2002 #0.1 million) and its achievement is a reflection of how each business unit of the Group responded to the target set at the beginning of the financial year, both in terms of securing and delivering revenue, and also ensuring that their expenditure remained within budget. Revenue Revenue in 2003 from contract manufacture was up by 137% to #6.0 million (2002 #2.5 million). This growth was achieved by an increase in productive staff, a greater utilisation of our existing assets and the successful launch of the new #2 million 270 litre fermentation suite at our Keele facility at the beginning of the financial year. This new suite contributed 30% (#1.8 million) of our total revenue. The Group has again maintained its diversity of product offering in 2003, with protein and virus contracts contributing 44% of the total revenue (2002 44%). DNA remains our lead product generating 53% of the total revenue in 2003 (2002 49%). Of the DNA segment 64% was from the manufacture of DNA HIV/AIDS vaccines, using our novel ORT(R) vector. With Cobra currently supplying 7 out of the 28 clinical trials currently being conducted worldwide, we feel we are justified in claiming that we are one of the world's leading outsourced supplier of HIV/AIDS vaccines. Cobra delivers product globally. Revenue from the US in 2003 increased by 158% to #1.4million (2002 #0.6 million), this represents 24% (2002 22%) of our total revenue. The growth in US revenue is primarily due to the successful launch of our sales office in Chicago last November 2002 and is extremely encouraging considering that 75% of Cobra's market is in the US. Profitability and Margins #000's 2003 2002 Manufacturing revenue 6,020 2,540 Gross profit margin 57% 34% Group operating profit 732 *(807) Group operating margin 12% *-32% EBITDA 1,032 *(565) PBT 817 (937) EPS 6.9p 1.0p Adjusted EPS 6.9p (9.6)p * excludes discontinued R&D operations Gross profit margin for the year increased to 57% (2002 34%). This was primarily due to the greater utilisation of our existing Keele facility, and cost of consumables coming in less than budget. The Group generated an operating profit of #0.7 million (2002 #0.8 million loss *), providing an operating margin for 2003 of 12% (2002 -32%*). The earnings before interest, taxation, depreciation and amortisation ("EBITDA") for the Group for 2003 were #1.0million (2002 #0.6million loss*) and the profit before tax ("PBT") was #0.8 million (2002 #0.9 million loss). Earnings per share ("EPS") for 2003 stands at 6.9 pence (2002 1.0 pence), the adjusted EPS 6.9 pence (2002 -9.6 pence) is included to highlight the underlying growth in earnings exclusively from continuing manufacturing operations. Contract manufacturing provided a 21% return on assets exclusively employed on that class of business (2002 -32%), as the Keele Facility approaches full capacity. Research and Development Cobra recognises that it has achieved its competitive advantage in the complex market of biopharmaceutical manufacturing, through investment in research and development. To maintain its position, Cobra invested #0.2 million in 2003 (2002 #0.2million*) on improving its manufacturing process and maintaining it's intellectual property portfolio. * 2002 comparatives exclude discontinued operations #000's 2003 2002 Operating cash inflow ** 445 (3,045) Capital investment The Keele facility (480) (2,040) Oxford freehold (1,387) - The Oxford facility (490) - (2,357) (2,040) Inflows Share issue 4,684 6,298 Disposal of R&D - 3,175 Mortgage 1,088 - R&D tax credit 497 240 Leasing & interest 290 314 6,559 10,027 Opening cash 2,615 (2,327) Closing cash 7,262 2,615 ** includes R&D tax credit repayments to the Group's former parent undertaking (see taxation section) Acquisitions and Funding On 23 June 2003, the Group completed the acquisition of additional biologics capacity, in Oxford, UK ("the Oxford Facility"). This acquisition represents a significant step in Cobra's development, in that it will not only double our existing Phase I/II capability, but it will allow us to expand our customer base, thereby increasing the likelihood of one of Cobra's customers entering the more lucrative phase III/in market product supply. The acquisition was for the freehold property and the existing plant and equipment for a total net cost of #1.4 million. The purchase of the freehold property at the Oxford Facility was partially funded by way of an 11-year #1.1 million property mortgage loan with HSBC Bank Plc. To fund the post acquisition investment required to transform the Oxford Facility into a multi-product facility by the end of the second quarter of 2004, the Company issued a further 6.5 million 10p ordinary shares at 80p each, raising #5.2 million (#4.7 million net of issue costs). Cash Flow (including Short Term Deposits) The cash balance (including short deposits) increased during the year by #4.7 million to #7.3 million (2002 #2.6 million). The source and application of those funds during the year are described in the table opposite. Taxation At 30 September 2003, the Group had tax losses carried forward of #12.5 million, ensuring that even though the Group is now profitable, it will not be obliged to pay UK corporation tax for the foreseeable future. Under Financial Reporting Standard ("FRS") 19 the Group is entitled to partially recognise this through a deferred tax asset in the Balance Sheet, included in debtors. As a result the profit and loss account in 2003 has been credited with deferred taxation of #0.2 million (2002 nil), as recognition of its recovery out of future profits. The taxation figure for the financial year 2002 (#1.0 million) relates to research and development tax relief, available to the Group under Schedule 20 of the Finance Act 2000, in respect of the financial years 2000, 2001 and 2002. The cash receipts are repaid in full to the Group's former parent undertaking (included in operating cash), under an agreement entered into on 6 June 2002. Peter Coleman Finance Director 2 December 2003 Cobra Biomanufacturing Plc Group Profit and Loss Account for the Year Ended 30 September 2003 Notes 2003 2002 Turnover Continuing operations 6,020,293 2,539,812 Discontinued operations - 30,000 Group turnover 2 6,020,293 2,569,812 Cost of sales (2,617,732) (1,700,067) Gross profit 3,402,561 869,745 Research and development (199,976) (1,916,254) Sales marketing and distribution costs (384,299) (65,015) Administrative expenses (2,086,410) (2,215,260) Operating profit/(loss) Continuing operations 731,876 (806,524) Discontinued operations - (2,520,260) Group operating profit /(loss) 731,876 (3,326,784) Profit on transfer of discontinued operations - 2,517,810 Discontinued reorganisation costs - (123,501) Profit/(loss) on ordinary activities before investment income, interest and taxation 731,876 (932,475) Bank interest receivable 131,528 27,264 Interest payable (46,523) (32,184) Profit/(loss) before tax 816,881 (937,395) Taxation 225,000 1,025,992 Retained profit for the year 1,041,881 88,597 Earnings/(loss) per share Basic 5 6.9p 1.0p Adjusted 5 6.9p (9.6)p Diluted 5 6.9p 1.0p Statement of total recognised gains and losses There are no recognised gains or losses other than the profit for the year of #1,041,881 in the year ended 30 September 2003 and the profit of #88,597 in the year ended 30 September 2002. Cobra Biomanufacturing Plc Group Balance Sheet at 30 September 2003 Notes 2003 2002 # # Fixed assets Tangible assets 4,925,058 2,168,393 Investments - - 4,925,058 2,168,393 Current assets Stocks and work in progress 206,919 441,178 Debtors 2,480,378 2,373,389 Cash 7,261,751 2,614,546 9,949,048 5,429,113 Creditors: amounts falling due within one year (3,151,602) (2,612,744) Net current assets 6,797,446 2,816,369 Total assets less current liabilities 11,722,504 4,984,762 Creditors: amounts falling due after more than one year (1,173,497) (162,292) Net assets 2 10,549,007 4,822,470 Capital and reserves Called up share capital 6 1,950,000 1,300,000 Share premium 6 9,632,493 5,597,837 Merger reserve 6 29,728,872 29,728,872 Profit and loss account 6 (30,762,358) (31,804,239) Equity shareholders' funds 10,549,007 4,822,470 Cobra Biomanufacturing Plc Group Statement of Cash Flows for the Year Ended 30 September 2003 2003 2002 Notes # # Net cash inflow/(outflow) from operating activities 3 444,816 (3,031,757) Returns on investment and servicing of finance Interest received 131,528 27,264 Interest element of finance lease rental payments (46,523) (32,184) 85,005 (4,920) Taxation R&D tax credit 496,522 239,608 496,522 239,608 Capital expenditure Payments to acquire tangible fixed assets (2,356,888) (2,040,253) (2,356,888) (2,040,253) Acquisitions and disposals Transfer of discontinued operations - 3,298,391 Reorganisation costs - (123,501) - 3,174,890 Net cash outflow before the management of liquid resources and financing (1,330,545) (1,662,432) Management of liquid resources Increase in short term deposits (4,427,964) (2,350,000) Financing Issue of ordinary shares 5,200,000 7,000,000 Share issue costs (515,344) (702,163) New long-term loans 1,087,500 - Repayment of capital element of finance leases (71,228) (81,469) Lease finance acquired 276,822 400,598 Decrease in amount owed to former parent undertaking - (13,804) 5,977,750 6,603,162 Increase in cash 219,241 2,590,730 Cobra Biomanufacturing Plc Reconciliation of Net Cash Flow to Movement in Net Funds Notes 2003 2002 # # Increase in cash 219,241 2,590,730 Cash inflow from increase in loans (1,087,500) - Repayment of capital element of finance leases 71,228 81,469 Lease finance acquired (276,822) (400,598) Decrease in amount owed to former parent undertaking - 13,804 Cash outflow to short term deposits 4,427,964 2,350,000 Change in net funds resulting from cash flow 3,354,111 4,635,405 Other - 164,001 Movement in net funds during the period 3,354,111 4,799,406 Net funds/(debt) at the start of the year 2,320,823 (2,478,583) Net funds at the end of the year 4 5,674,934 2,320,823 Cobra Biomanufacturing Plc Notes to the Financial Statements for the Year Ended 30 September 2003 1. Basis of consolidation and presentation of preliminary statements The preliminary statements comprise the accounts of Cobra Biomanufacturing Plc and its subsidiary undertaking for the year ended 30 September 2003. 2. Turnover and segmental analysis (a) Group turnover by geographic segments All turnover originates from within the UK. The geographical analysis of turnover by destination is shown as follows: 2003 2002 # # Continuing operations United Kingdom 2,114,096 842,714 North America 1,425,841 553,280 Europe 711,303 971,737 Rest of the World 1,769,053 172,081 6,020,293 2,539,812 Discontinued operations United Kingdom - 10,000 North America - 20,000 - 30,000 6,020,293 2,569,812 (b) Segmental analysis by class of business The Group currently operates in one principal areas of activity, that of contract manufacture. The analysis by class of business of the Group's turnover, profit/(loss) on ordinary activities before tax and net assets is as follows: SsegSeS Contract manufacture Licensing Total 2003 2002 2003 2002 2003 2002 # # # # # # Group turnover Continuing operations 6,020,293 2,539,812 - - 6,020,293 2,539,812 Discontinued operations - - - 30,000 - 30,000 6,020,293 2,539,812 - 30,000 6,020,293 2,569,812 Cost of sales (2,617,732) (1,700,067) - - (2,617,732) (1,700,067) Research and development (199,976) (219,852) - (1,696,402) (199,976) (1,916,254) Selling, marketing & (384,299) (34,843) - (30,172) (384,299) (65,015) distribution Administration expenses (2,086,410) (1,391,574) - (823,686) (2,086,410) (2,215,260) Segmental operating profit/ 731,876 (806,524) - (2,520,260) 731,876 (3,326,784) (loss) Profit on transfer of - 2,517,810 discontinued operations Discontinued reorganisation - (123,501) costs Bank interest receivable 131,528 27,264 Interest payable (46,523) (32,184) Profit/(loss) before taxation 816,881 (937,395) Net operating assets 3,561,573 2,501,647 - - 3,561,573 2,501,647 The net operating assets are reconciled to shareholders' funds as follows: Segmental net assets 3,561,573 2,501,647 Cash at bank and in hand 7,261,751 2,614,546 Corporation tax 323,278 786,385 Deferred taxation 225,000 - Amounts owed to former parent undertaking (323,278) (786,385) Obligations under finance leases (499,317) (293,723) Net assets 10,549,007 4,822,470 3. Reconciliation of operating loss to net cash flow from operating activities 2003 2002 # # Operating profit/(loss) 731,876 (3,326,784) Depreciation of tangible fixed assets 299,837 432,993 Decrease/(increase) in stock 234,259 (162,146) Increase in debtors (259,854) (834,975) Decrease/(increase) in creditors (561,302) 859,155 Net cash inflow/(outflow) from operating activities 444,816 (3,031,757) 4. Analysis of net movement in net funds Cash 2002 Flow 2003 # # # Cash at bank and in hand 264,546 219,241 483,787 Bank loan - (1,087,500) (1,087,500) Short-term deposits* 2,350,000 4,427,964 6,777,964 Finance leases (293,723) (205,594) (499,317) 2,320,823 3,354,111 5,674,934 The majority of finance leases are arranged in respect of sale and leaseback transactions. Accordingly new finance leases are shown as a separate component of cash flow in the cash flow statement. * Short-term deposits are included within the cash at bank and in hand on the balance sheet. 5. Earnings per ordinary share The calculation of basic earnings per ordinary share is based on earnings of #1,041,881 (2002 #88,597) and on 15,124,531 ordinary shares (2002 8,438,953) being the weighted average number of shares in issue during the year. The basic and adjusted earnings per share for the year ended 30 September 2002 has been restated to reflect the dilutive effect of the placing and open offer of 6,500,000 ordinary 10 pence shares at 80 pence per share on 23 June 2003. 2003 2002 No. No. Basic weighted average number of shares 15,124,531 8,438,953 Dilutive potential ordinary shares: Employee share options - - 15,124,531 8,438,953 The adjusted earnings per share is shown to highlight the underlying earnings trend and is calculated using the same number of ordinary shares as the basic earnings calculation referred to above and the amounts shown below: 2003 2002 # # Profit for the financial year 1,041,881 88,597 Adjustments Profit on transfer of R&D operations - (2,517,810) Discontinued reorganisation costs - 123,501 Discontinued R&D operations - 2,520,260 R&D tax credit - (1,025,992) Adjusted earnings 1,041,881 (811,444) 6. Reconciliation of shareholder's funds and movement on reserves Share Share Merger Profit & capital premium Reserve loss account Total # # # # # As at 1 October 2002 1,300,000 5,597,837 29,728,872 (31,804,239) 4,822,470 Issue of shares 650,000 4,550,000 - - 5,200,000 Issue costs - (515,344) - - (515,344) Profit for the year - - - 1,041,881 1,041,881 At 30 September 2003 1,950,000 9,632,493 29,728,872 (30,762,358) 10,549,007 The Annual Report will be posted to shareholders on 12 January 2004. Further copies will be available on request from the Company Secretary, Cobra Biomanufacturing Plc, The Science Park, Keele, Staffordshire, ST5 5SP. The Annual General Meeting will be held on 26 February 2004 at 11.00 am at Collins Stewart Limited, 9th Floor, 88 Wood Street, London, EC2V 7QR. The figures for the year ended 30 September 2003 do not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The figures for the year ended 30 September 2003 are audited. The preliminary announcement is prepared on the same basis as set out the previous year's statutory accounts. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. Statutory Accounts for 2003 will be delivered to the Registrar of Companies following the Annual General Meeting. The board of directors of Cobra Biomanufacturing Plc approved the Preliminary Results on 2 December 2003. -------------------------- This information is provided by RNS The company news service from the London Stock Exchange END FR NKDKPFBDDABK
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