TIDMPRM
RNS Number : 5660V
Proteome Sciences PLC
10 August 2020
10 August 2020
Proteome Sciences plc
("Proteome Sciences" or the "Company")
Interim results for the six months ended 30 June 2020
Proteome Sciences announces its unaudited interim results for
the six months ended 30 June 2020.
Financial highlights:
-- Proteomics services revenues increased 71% to GBP0.60m (H1 2019: GBP0.35m)
-- TMT(R) reagent sales and royalties down 8% to GBP1.27m (H1 2019: GBP1.37m)
-- Total revenues increased 9% to GBP1.90m (H1 2019: GBP1.74m)
-- Gross profit increased 11% to GBP1.07m (H1 2019: GBP0.96m)
-- Costs increased 11% to GBP2.22m (H1 2019: GBP1.99m)
-- Loss before tax was GBP0.48m (H1 2019: GBP0.41m)
Commenting on these results, Dr. Ian Pike, Interim Chief
Executive Officer of Proteome Sciences, said:
"We reported our first post-tax profit last year and saw this as
the basis for further growth towards sustainable profitability. The
first six months of 2020 have been extraordinary as the world
confronts the ongoing COVID-19 pandemic and I am profoundly
grateful to our dedicated staff and extended customer base for
their unstinting support during these challenging times. Challenges
during the period around laboratory access due to the COVID-19
lockdown had some negative impact on TMT(R) revenues, which
declined marginally compared to the strong performance in H1 2019
prior to the launch of TMTpro(TM). However, we expect sales to show
good growth in the second half and for the full year.
Our service business started the year with a strong order book
and large bank of samples, allowing us to remain fully operational.
Consequently, I am delighted to report 71% growth in service
revenues during the period, further accelerating the progress made
in 2019. Despite cancellation of all physical conferences and trade
shows, we have maintained an aggressive programme of customer
engagement and the number of quotes and orders for new business is
running at double the value of the same period last year.
The increase in revenues was matched by a disproportionate
increase in costs as we had to bring forward some TMTpro(TM)
re-stocking in light of strong sales in the last quarter of 2019.
Costs otherwise remained flat and the net impact is a similar loss
before tax with the equivalent period last year.
We expect full year revenues to be similar to last year, with
improved TMT(R) and TMTpro(TM) sales in the second half alongside
strong demand for proteomic services in the second half as
laboratory access for research and development activities is
re-starting in many countries. Whilst there remains a degree of
risk that a second wave of COVID-19 may yet require reinstatement
of movement restrictions, we are well set to meet these challenges
and continue to improve our financial performance through the full
year."
For further information:
Proteome Sciences plc
Dr Ian Pike, Interim Chief Executive Tel: +44 (0)20 7043 2116
Officer
Richard Dennis, Chief Commercial Officer
Allenby Capital Limited (AIM Nominated Adviser & Broker)
John Depasquale / Jeremy Porter (Corporate Tel: +44 (0) 20 3328 5656
Finance)
Tony Quirke (Sales)
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
Following the good growth attained across the business in 2019,
which led to our first operating profit, the outlook for 2020 was
very positive. Despite the difficulties of operating a global sales
operation during the coronavirus outbreak, we still managed to grow
revenues in the first half of the year. We have been able to
leverage strong relationships with our existing customers to secure
new orders during the lockdown, and with only a moderate drop in
TMT(R) sales at a time when many laboratories have remained closed
for non-essential research, this is encouraging for the future. We
have also seen a strong presence of TMT(R) and TMTpro(TM) usage in
COVID-19 research, though we lack the required biological
containment facilities to handle infectious samples ourselves. With
positive growth in overall revenue and the receipt of the GBP0.75m
TMT(R) sales milestone in March, we have improved our cash position
over the past six months and remain focused on meeting the needs of
our customers and licensees through the remainder of the year.
Services
Recognised revenues from the proteomics services business
increased 71% in the first half to GBP0.60m (2019: GBP0.35m),
reflecting the strong order book and banked samples we had in-hand
prior to the COVID-19 restrictions. We completed 13 projects during
the period with another 8 initiated and running into H2. A further
12 projects are ordered with samples expected during the current
quarter. Importantly, despite the shut-down of most of our
customers' laboratories, 40 quotes and pricing requests were issued
compared with 29 during the equivalent period last year. We have
also booked new orders worth over GBP0.77m, representing a 115%
increase over H1 2019 (GBP0.36m) with the balance between US (60%)
and EU (40%) customers reflecting our reversion to a direct sales
model in Europe in the summer last year. We also maintained a
strong level of repeat orders from existing customers, which
accounted for 55% of the total by value, as we become established
as preferred suppliers.
Overall, these metrics show the benefits of our focus on
improving our sales cycle to speed up project execution and revenue
generation. Inevitably, the lead times to placing and execution of
orders has extended slightly during the lockdown, but we expect
things to improve in the second half of the year. We continue to
have strong orders for our TMTcalibrator(TM) blood and CSF
biomarker discovery workflow with two major projects in
neurodegeneration completed in the first half of the year, and
further orders received across a range of different disease areas.
We are also seeing good interest in our new workflows for
immune-oncology and protein degradation therapies with both
attracting orders from new customers.
Prior to the shut-down of global travel, we concluded a 2-week
business development visit to California through which we gained
three new orders. Subsequently, we have been using a mixture of
videoconferencing and presentation at virtual trade shows to
broaden further our outreach and customer base. As we do not expect
there to be much opportunity to engage in physical meetings during
the remainder of 2020, we are reviewing the mix of sales and
marketing tools at our disposal to ensure we can continue to grow
sustainable revenues.
TMT(R)
TMT(R) revenue of GBP1.27m was 8% lower than the same period
last year (H1 2019: GBP1.37m), reflecting the impact of temporary
laboratory closures during the COVID-19 control measures in most
major markets, and the pre-sale of TMTpro(TM) bulk materials ahead
of the launch in the first half of 2019. We are encouraged that
whilst slightly down in absolute terms, the first half sales are
broadly consistent with the same period last year, with no evidence
that the launch of TMTpro(TM) is impacting on sales of TMT(R)
reagents.
To meet the strong uptake of TMTpro(TM) we have completed
re-synthesis of the early tags made in smaller batch sizes during
initial development. This work was completed ahead of schedule in
the second quarter, contributing to a slight increase in operating
costs, and we now have sufficient stocks of all 16 tags to meet the
expected requirements of our licensee Thermo Scientific well into
2021. We also have good stock levels of all standard TMT(R)
reagents.
We also saw that a number of early proteomics studies of
SARS-Cov-2, the virus causing COVID-19 infection, used TMT(R) and
TMTpro(TM), revealing the main sites of virus/host protein
interactions and identifying blood biomarkers predicting severe
disease, as well as potential drug targets and established drugs
that could be re-purposed for treatment of the infection. Whilst we
are unable to work with SARS-Cov-2 infected material directly, we
are pursuing a number of academic collaborations based on our
TMTpro(TM) plasma workflows and the Tryptophan Metabolite assay
that uses TMT(R) for sample multiplexing as several metabolites
including kynurenine have been reported as potential predictors of
severe infection.
Other Licences
Developments of clinical stroke diagnostic tests by our
licensees Randox Laboratories and Galaxy CCRO are ongoing. The
impact of COVID-19 on global clinical trials has inevitably delayed
progress of Randox's development but we expect this to now progress
as enrolment re-starts as the pandemic eases. Galaxy is continuing
to progress development of a point-of-care test and currently hopes
to initiate clinical trials in the UK before the end of the
year.
Outlook
Over the last three years we have achieved good growth in our
services revenues whilst restructuring the business to improve
operating efficiency and manage costs. The outlook for our
portfolio of TMT(R) and TMTpro(TM) tags remains positive as more
academic and pharmaceutical laboratories are re-opening following
relaxing of COVID-19 restrictions. Whilst we saw a small decline in
revenues in the first half of the year, we expect revenues to be
higher in the second half of the year, and anticipate modest growth
in like-for-like sales for the full year.
Having carried a strong order book over into the first half of
2020, we are seeing significant growth of recognised proteomics
services revenues and orders being placed, despite the challenges
imposed by COVID-19. With over half of our revenues now coming from
existing customers, we are clearly becoming established as
preferred providers of proteomic services. In the current climate
we consider these relationships as critical to our long-term
success and we have dedicated more sales and marketing resources to
continue to build our presence across multiple teams in each
organisation. A review of our customer engagement channels in the
current climate will be reflected later in the year with an
enhanced website and greater visibility on professional media
platforms.
Based on orders received to date and the steady number of
requests for quotes relating to projects in the second half of 2020
we expect to demonstrate significant increases in both full year
proteomics services revenues and order book value to carry into
2021. We expect this, combined with improved TMT(R) and TMTpro(TM)
sales, will deliver total revenues similar to last year.
Dr. Ian Pike
Interim Chief Executive Officer
7 August 2020
Finance Director's Report
Revenues in the first half of GBP1.90m were 9% higher than the
equivalent period in 2019 (GBP1.74m), with the slight decrease in
TMT(R) and TMTpro(R) sales due to the COVID-19 lockdown
restrictions offset by a strong increase of proteomic service
sales.
Costs of sales and administrative expenses increased by 11% to
GBP2.22m, slightly above revenue growth. This was the result of
bringing forward ordering of critical materials originally planned
for later in the year. Financing costs for the first half increased
marginally to GBP0.17m in comparison with GBP0.16m in the previous
year.
The loss of before taxation of GBP0.48m is above that for the
first half of 2019 (GBP0.41m) and is primarily attributable to
increased production costs and decrease in sales and royalties of
TMT(R) and TMTpro(TM) reagents. As at 30 June 2020 the Group had
cash resources of GBP1.45m (30 June 2019: GBP0.84m).
Stefan Fuhrmann
Finance Director
7 August 2020
Consolidated income statement
For the six months ended 30 June 2020
Six months Six months
ended ended
30 June 30 June
2020 2019
(unaudited) (unaudited)
Note GBP'000 GBP'000
Continuing operations
Revenue
Licences, sales & services 1,872 1,726
Grant services 27 14
-------- --------
Revenue- Total 1,899 1,740
Cost of sales (833) (782)
-------- --------
Gross profit 1,066 958
Administrative expenses (1,382) (1,207)
Operating loss (316) (249)
Finance costs (168) (161)
-------- --------
Loss before taxation (484) (410)
Tax (30) (16)
-------- --------
Loss for the period (514) (426)
-------- --------
Loss per share
Basic and diluted 2 (0.17p) (0.14p)
-------- --------
Consolidated statement of comprehensive income
For the six months ended 30 June 2020
Six months Six months
ended ended
30 June 30 June
2020 2019
(unaudited) (unaudited)
GBP'000 GBP'000
Loss for the period (514) (426)
-------- --------
Other comprehensive income for the period
Exchange differences on translation of foreign
operations 42 11
-------- --------
Total comprehensive expense for the period (472) (415)
======== ========
Consolidated balance sheet
As at 30 June 2020
30 June 31 December
2020 2019
(unaudited) (audited)
GBP'000 GBP'000
Non-current assets
Goodwill 4,218 4,218
Property, plant and
equipment 68 75
Right-of-use asset 518 581
4,804 4,874
------------- ------------
Current assets
Inventories 957 871
Trade and other receivables 567 486
Contract assets 233 1,331
Cash and cash equivalents 1,451 799
------------- ------------
3,208 3,487
------------- ------------
Total assets 8,012 8,361
------------- ------------
Current liabilities
Trade and other payables (711) (738)
Contract liabilities (16) (26)
Borrowings (10,430) (10,262)
Lease Liabilities (524) (584)
(11,681) (11,610)
------------- ------------
Net current liabilities (8,473) (8,123)
------------- ------------
Non-current liabilities
Provisions
Pension Provisions (449) (403)
------------- ------------
(449) (403)
------------- ------------
Total liabilities (12,130) (12,013)
------------- ------------
Net liabilities (4,118) (3,652)
------------- ------------
Equity
Share capital 2,952 2,952
Share premium account 51,466 51,466
Share-based payment
reserve 3,620 3,615
Merger reserve 10,755 10,755
Translation reserve (66) (109)
Retained loss (72,845) (72,331)
------------- ------------
Total shareholders
deficit (4,118) (3,652)
============= ============
Consolidated cash flow statement
For the six months to 30 June 2020
Six months Six months
ended ended
30 June 30 June
2020 2019
(unaudited) (unaudited)
GBP'000 GBP'000
Loss before tax (484) (410)
Adjustments for:
Net finance costs 168 161
Depreciation of property, plant and equipment
and right of use assets 82 21
Share-based payment expense 5 22
----------------------------------------------- -------- --------
Operating cash flows before movements
in working capital (229) (206)
Decrease/(increase) in inventories (86) 135
Decrease/(increase) in receivables 1,016 (1,147)
(Decrease)/increase in payables (36) 1,111
Increase in provisions 46 15
----------------------------------------------- -------- --------
Cash generated from / (used in) operations 711 (92)
Tax refunded / (paid) (30) (16)
----------------------------------------------- -------- --------
Net cash inflow / (outflow) from operating
activities 681 (108)
----------------------------------------------- -------- --------
Cash flows from investing activities
Purchases of property, plant and equipment (6) (46)
Net cash outflow from investing activities (6) (46)
----------------------------------------------- -------- --------
Financing activities
Lease payments (60)
----------------------------------------------- -------- --------
Net cash outflow from financing activities (60) -
----------------------------------------------- -------- --------
Net increase / (decrease) in cash and
cash equivalents 615 (154)
Cash and cash equivalents at beginning
of period 799 958
Effect of foreign exchange rate changes 37 31
----------------------------------------------- -------- --------
Cash and cash equivalents at end of period 1,451 835
----------------------------------------------- -------- --------
Notes
For the six months to 30 June 2020
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 2019 Annual
Report. The financial information for the half years ended 30 June
2020 and 30 June 2019 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 2019 included within this report does not
constitute the full statutory Annual Report for that period. The
statutory Annual Report and Financial Statements for 2019 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 2019 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.
Proteome Sciences plc has applied the same accounting policies
and methods of computation in its interim consolidated financial
statements as in its 2019 annual financial statements.
There have been no new standards adopted since the presentation
of the financial statements 2019.
The Board of Directors approved this interim report on 7 August
2020.
2. Loss per share from continuing operations
Six months Six months
ended ended
30 June 30 June
2020 2019
(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) (514) (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
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