TIDMPRM
RNS Number : 6459G
Proteome Sciences PLC
25 July 2019
25 July 2019
Proteome Sciences plc
("Proteome Sciences" or the "Company")
Interim results for the six months ended 30 June 2019
Proteome Sciences announces its unaudited interim results for
the six months ended 30 June 2019.
Financial highlights:
-- Proteomics services revenues increased 30% to GBP0.35m (2018: GBP0.27m)
-- TMT(R) reagent sales and royalties increased 30% to GBP1.37m (2018: GBP1.05m)
-- Total revenues increased 32% to GBP1.74m (2018: GBP1.32m)
-- Gross profit increased 30% to GBP0.96m (2018: GBP0.74m)
-- Administrative expenses decreased 40% to GBP1.21m (2018: GBP2.02m)
-- Loss before tax was GBP0.41m (2018: GBP1.41m)
Commenting on these results, Jeremy Haigh, Chief Executive
Officer of Proteome Sciences, said:
"Performance during the first six months of 2019 was very
encouraging, building on the momentum developed in the second half
of 2018. Recognised revenues from our services platform were
significantly ahead of the equivalent period in 2018 and, most
importantly, we issued a record number of quotes for new business
in the second quarter, a fundamental lead indicator of future
customer engagement. TMT(R) revenues also grew strongly in the
period, bolstered by initial sales of our new TMTpro(TM) 16-plex
isobaric mass tags which enable increased multiplexing and are now
available as a standard option across our upgraded services
portfolio. Administrative costs continue to reduce, and cash
reserves are stronger; as a consequence, the Company is beginning
to demonstrate a much-anticipated level of fiscal stability and
growth which should enable some near-term investment that will be
vital if we are to remain competitive in such a rapidly developing
market.
We are confident that our commercial strategy is starting to
gain traction after a slow start early in 2018 and, with the
promise of a stronger second half which has been characteristic of
previous years, we expect to report further progress."
For further information:
Proteome Sciences plc
Dr Jeremy Haigh, Chief Executive Officer Tel: +44 (0)20 7043 2116
Dr Ian Pike, Chief Scientific Officer
Richard Dennis, Chief Commercial Officer
Allenby Capital Limited (AIM Nominated Adviser & Broker)
John Depasquale / Jeremy Porter Tel: +44 (0) 20 3328 5656
About Proteome Sciences plc. (www.proteomics.com)
Proteome Sciences plc is a specialist provider of contract
proteomics services to enable drug discovery, development and
biomarker identification, and employs proprietary workflows for the
optimum analysis of tissues, cells and body fluids. SysQuant(R) and
TMT(R) MS2 are unbiased methods for identifying and contextualising
new targets and defining mechanisms of biological activity, while
analysis using Super-Depletion and TMTcalibrator(TM) provides
access to over 8,500 circulating plasma proteins for the discovery
of disease-related biomarkers. Targeted assay development using
mass spectrometry delivers high sensitivity, interference-free
biomarker analyses in situations where standard ELISA assays are
not available.
The Company has its headquarters in London, UK, with laboratory
facilities in Frankfurt, Germany.
Chief Executive Officer's Report
Services
Revenues recognised from the proteomics services business
increased 30% in the first half to GBP0.35m (2018: GBP0.27m),
maintaining the sales momentum established during the second half
of 2018. Importantly, 58 quotes and pricing requests were issued
compared with only 20 during the equivalent period last year, an
increase of nearly 200%, and this included a record number of 34
quotes in the second quarter alone. Such metrics are fundamental
lead indicators of future performance and although they do not
guarantee work orders (our current conversion rate is approximately
35%, in line with industry standards) they do provide a valuable
signal of early customer engagement alongside conventional lag
indicators such as revenue. Much attention has been directed
towards improving our sales cycle time in an effort to speed up
project execution and revenue generation, and it is encouraging to
note that the average time between issuing an initial quote and the
formal project purchase order has reduced to 43 days in the first
half (2018: 53 days).
As interest in our proteomics platform increases it is essential
that we can access our prospective customers quickly and easily,
particularly in Europe (EU) which currently contributes only about
one third of our revenues. To this end, and in line with our
strategy to invest in the services business, we have recruited a
Sales Manager for the European region and are delighted that Dr
Illip Burmester has agreed to join the Company from 1 September
2019 based out of our German facility. Consequently, we have
terminated our sales agency agreement with Cenibra GmbH and thank
them for their support commercialising our services across central
EU over the last 18 months. Promotional activities have also been
increased, with a particular focus on the machine learning and
artificial intelligence communities which we believe will provide a
strong source of new business.
TMT(R)
TMT(R) revenues of GBP1.37m were strong during the first half,
ahead of plan and 30% above sales and royalties for the equivalent
period in 2018 (GBP1.05m) suggesting continued growth in the core
11-plex market and recognising the introduction of TMTpro(TM) .
TMTpro(TM) (16-plex isobaric mass tags) was introduced by Thermo
Scientific at the American Society for Mass Spectrometry (ASMS)
meeting in Atlanta last month and is a completely re-designed set
of isobaric mass tags developed and patented by Proteome Sciences,
with multiple benefits over previous TMT(R) reagents. As well as
offering five extra channels, this new chemistry also provides a
9-plex set of single-Dalton resolved tags for use with TMT(R)
complement ion quantification. Moreover, the reporter ion is more
readily fragmented and offers gains in signal-to-noise both in MS2
and MS3 analyses. Testing has shown that these new reagents perform
equivalently to the current 11-plex TMT(R) in terms of the numbers
of quantified peptides and proteins, while providing a 50% increase
in the number of samples that can be analysed in a single
experiment. Proteome Sciences is the only contract research
organisation able to provide customers with access to the higher
plexing rates and extended performance of TMTpro(TM): adding these
16-plex reagents to our standard service workflows will provide
significant benefits in both the size and speed of our biomarker
discovery projects, and justifies the dedication of our research
efforts towards refining this technology over the last year.
Other Licences
In recent months Randox has increased publicity about its
putative stroke diagnostic (which incorporates some of our
intellectual property) including presentations at EuroMedLab in
Barcelona and at the Goodwood Festival of Speed. This is obviously
encouraging and has led to much speculation about the revenue
potential of the stroke biochip array which is now functional as a
30-minute test on a fully automated point of care platform (the
MultiSTAT analyser). However, its research-use only (RUO) status
will not change until the ongoing clinical validation study at
University College London Hospitals (UCLH) has been completed, the
device is Conformité Européene (CE) marked and the product is
officially released for commercial sale.
Outlook
With both our primary revenue streams demonstrating strong year
on year growth, and operating expenditure held under tight control,
the Company is increasingly well placed to take advantage of the
market opportunity afforded by quantitative mass spectrometric (MS)
proteomics. To achieve this our service platform must remain
competitive and investment will be necessary to ensure that we can
continue to provide a high quality, cost effective portfolio of
services to a broad range of bioscience clients primarily in the US
and EU, but eventually other regions of the world. Such investment
has begun with the addition of a Sales Manager dedicated to the EU
region, more aggressive promotional activities, research into new
workflows and targeted assays, and the prospect of upgraded
instrumentation.
Proteome Sciences now holds a unique position as the only
contract research organisation licensed to provide customers with
access to the higher plexing rates and extended performance of
TMTpro(TM), an advance critical to realising the power of
proteomics in support of larger cohort studies which are
fundamental to the delivery of precision medicines. As providers of
an enabling technology, we must understand our role in the evolving
landscape of healthcare delivery and be agile enough to collaborate
with others who either require our services or offer complementary
capabilities on which we may depend. As I have stated often in the
last three years, much has yet to be done to achieve our goal, but
the Company is making solid progress and we fully expect 2019
revenues to be well ahead of 2018 in our pursuit of
profitability.
Jeremy Haigh
Chief Executive Officer
24 July 2019
Finance Director's Report
Revenues in the first half (GBP1.74m) were higher than the
equivalent period in 2018 (GBP1.32m), the major reasons being a
particularly strong second quarter for TMT(R) sales accompanied by
higher sales of proteomics services.
Ongoing efforts to reduce administrative expenses realised a 40%
reduction to GBP1.21m (2018: GBP2.02m), while the cost of sales
increased by 32% to GBP0.78m (2018: GBP0.59m) in line with our
higher sales revenues. Financing costs for the first half increased
to GBP0.16m in comparison with GBP0.13m in the previous year.
A loss of GBP0.43m after taxation is significantly lower than
for the first half of 2018 (GBP1.43m) and this can be explained by
the increase in revenues coupled with a reduction of administrative
expenses, partially offset by the higher cost of sales and
financing. As at 30 June 2019 the Group had cash resources of
GBP0.83m (30 June 2018: GBP0.50m).
Stefan Fuhrmann
Finance Director
24 July 2019
Consolidated income statement
For the six months ended 30 June 2019
Six months Six months
ended ended
30 June 30 June
2019 2018
(unaudited) (unaudited)
Note GBP'000 GBP'000
Continuing operations
Revenue
Licences, sales & services 1,726 1,319
Grant services 14 5
-------- --------
Revenue- Total 1,740 1,324
Cost of sales (782) (586)
-------- --------
Gross profit 958 738
Administrative expenses (other) (1,207) (2,016)
-------- --------
Administrative expenses - Total (1,207) (2,016)
-------- --------
Operating loss (249) (1,278)
Finance costs (161) (134)
-------- --------
Loss before taxation (410) (1,412)
Tax (16) (14)
-------- --------
Loss for the period (426) (1,426)
-------- --------
Loss per share
Basic and diluted 2 (0.14p) (0.48p)
-------- --------
Consolidated statement of comprehensive income
For the six months ended 30 June 2019
Six months Six months
ended ended
30 June 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Loss for the period (426) (1,426)
-------- ----------
Other comprehensive income for the period
Exchange differences on translation of foreign
operations 11 3
-------- ----------
Total comprehensive expense for the period (415) (1,423)
======== ==========
Consolidated balance sheet
As at 30 June 2019
30 June 31 December
2019 2018
(unaudited) (audited)
GBP'000 GBP'000
Non-current assets
Goodwill 4,218 4,218
Property, plant and
equipment 81 56
4,299 4,274
------------- ------------
Current assets
Inventories 1,012 1,147
Trade and other receivables 1,523 320
Contract assets 272 328
Cash and cash equivalents 835 958
------------- ------------
3,642 2,753
------------- ------------
Total assets 7,941 7,027
------------- ------------
Current liabilities
Trade and other payables (1,678) (541)
Contract liabilities - (25)
Borrowings (10,097) (9,936)
(11,775) (10,502)
------------- ------------
Net current liabilities (8,133) (7,749)
------------- ------------
Non-current liabilities
Provisions (358) (343)
------------- ------------
(358) (343)
------------- ------------
Total liabilities (12,133) (10,845)
------------- ------------
Net liabilities (4,192) (3,818)
============= ============
Equity
Share capital 2,952 2,952
Share premium account 51,466 51,466
Share-based payment
reserve 3,553 3,532
Merger reserve 10,755 10,755
Translation reserve (12) (43)
Retained loss (72,906) (72,480)
------------- ------------
Total (deficit) (4,192) (3,818)
============= ============
Consolidated cash flow statement
For the six months to 30 June 2019
Six months Six months
ended ended
30 June 30 June
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Loss before tax (410) (1,412)
Adjustments for:
Net finance costs 161 134
Depreciation of property, plant and equipment 21 131
Share-based payment expense 22 46
----------------------------------------------- -------- --------
Operating cash flows before movements
in working capital (206) (1,101)
Decrease/(increase) in inventories 135 155
Decrease/(increase) in receivables 1,147 202
(Decrease)/increase in payables (1,111) (84)
Increase in provisions 15 15
----------------------------------------------- -------- --------
Cash used in operations (92) (813)
Tax refunded / (paid) (16) 400
----------------------------------------------- -------- --------
Net cash outflow from operating activities (108) (413)
----------------------------------------------- -------- --------
Cash flows from investing activities
Purchases of property, plant and equipment (46) -
Net cash outflow from investing activities (46) -
----------------------------------------------- -------- --------
Financing activities
Net cash outflow from financing activities - -
----------------------------------------------- -------- --------
Net decrease in cash and cash equivalents (154) (413)
Cash and cash equivalents at beginning
of period 958 908
Effect of foreign exchange rate changes 31 2
----------------------------------------------- -------- --------
Cash and cash equivalents at end of period 835 497
----------------------------------------------- -------- --------
Notes
For the six months to 30 June 2019
1 Basis of preparation and accounting policies
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the EU. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 December 2018 Annual
Report. The financial information for the half years ended 30 June
2019 and 30 June 2018 does not constitute statutory accounts within
the meaning of Section 434 (3) of the Companies Act 2006 and both
periods are unaudited.
The annual financial statements of Proteome Sciences plc ('the
Group') are prepared in accordance with IFRS as adopted by the
European Union. The comparative financial information for the year
ended 31 December 2018 included within this report does not
constitute the full statutory Annual Report for that period. The
statutory Annual Report and Financial Statements for 2018 have been
filed with the Registrar of Companies. The Independent Auditors'
Report on the Annual Report and Financial Statements for the year
ended 31 December 2018 was unqualified but did include a reference
to uncertainty surrounding going concern, to which the auditors
drew attention by way of emphasis and did not contain a statement
under 498(2) - (3) of the Companies Act 2006.
The directors have concluded that the Group has adequate
resources to continue operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing the half-yearly consolidated financial statements.
With only the addition of IFRS 16 Leasing standards Proteome
Sciences plc has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2018 annual financial statements.
New standards, interpretations and amendments adopted by the
Group
A new standard became applicable for the current reporting
period, and the group had to change accounting policies as a result
of adopting IFRS16 Leases. The impact of the adoption of the
leasing standard is disclosed in the note below.
IFRS 16 "Leases" - (effective for 2019 annual financial
report)
The Group adopted IFRS 16 Leases from the 1 January 2019, which
has resulted in the Group recognising right of use assets and lease
liabilities for all contracts that are, or contain, a lease which
extend over a period of more than 12 months. Leases currently
classified as operating leases, include operational leasing
contracts of equipment and rental contracts for building, office
space and equipment. The amounts recognised establish a lease
liability and a right of use asset shown on the balance sheet. The
amount is based on the future cash flow discounted by an assumed
interest rate of 2.5% above the Barclays Bank base rate and is
based on the fair assessment by the management. Where the amount
contains a separable service part, this amount will be treated
separately. For rental contracts, which include heating, cooling
and other services centrally provided by the landlord which cannot
be separately determined leases are not split out.
Under the former policy leases were classified as operating
leases. The Group did not recognise related assets or liabilities
but instead lease payments were spread over the lease term and the
total commitment was disclosed in its annual financial
statements.
The Group has not restated the prior year's figures in applying
IFRS 16 as there were no leases exceeding the 12 month recognition
threshold on the balance sheet date.
For the current year, at the 30 June 2019, the application of
IFRS 16 resulted in the recognition of a lease liability of
GBP1.16m. A right of use asset of the same amount is recognised on
the balance sheet. This is due to the extension of the lease at the
Group's Frankfurt facility for a period of 5 years. The Group will
recognise the right of use asset within the line items debtors and
other receivables and liabilities and other payables within the
balance sheet. This will ensure there is no immediate impact to net
assets on that date.
Instead of recognising an operating expense for its operating
lease payments, the Group will instead recognise interest on its
lease liabilities and amortisation on its right-of-use assets. This
will not change the loss per share for the Group.
The Board of Directors approved this interim report on 24 July
2019.
2. Loss per share from continuing operations
Six months Six months
ended ended
30 June 30 June
2019 2018
(unaudited) (unaudited)
Loss per share
Loss for the purpose of basic
loss per share being net loss
attributable to equity holders
of the parent (GBP'000) (426) (1,426)
-------------- ------------------
Number of shares
Weighted average number of ordinary
shares for the purpose of basic
loss per share 295,182,056 295,182,056
-------------- ------------------
Weighted average number of ordinary
shares for the purpose of diluted
loss per share 295,182,056 295,182,056
============== ==================
3. Cautionary statement
This document contains certain forward-looking statements
relating to Proteome Sciences plc ('the Group'). The Group
considers any statements that are not historical facts as
"forward-looking statements". They relate to events and trends that
are subject to risk and uncertainty that may cause actual results
and the financial performance of the Group to differ materially
from those contained in any forward-looking statement. These
statements are made by the directors in good faith based on
information available to them and such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such
forward-looking information.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR CKQDNBBKBAOB
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