RNS Number:5383I
Biotrace International PLC
06 September 2006
For Immediate Release 6 September 2006
BIOTRACE INTERNATIONAL PLC
("Biotrace", "the Company" or "the Group")
INTERIM RESULTS
for the six months ended 30 June 2006
Biotrace International Plc, a leading manufacturer of industrial microbiology
products, today announces its interim results for the six months ended 30 June
2006.
Highlights
Financial
* Revenue up 24% to #16.9M (2005: #13.6M)
* Pre-tax profit up 27% to #1.7M (2005: #1.4M)
* Earnings per share up 31% to 3.15p (2005: 2.40p)
* Operational cash flow up 35% to #3.1M (2005: #2.3M)
* Interim dividend increased 37% to 0.55p (2005: 0.40p)
Operational
* Revenues in the period benefited from a full six month contribution from the
acquisition of Microsafe in September 2005 and four month contribution from
Target Diagnostica which was acquired in March this year
* #0.5M profit before tax generated from the sale of the Bridgend HQ
property in April this year
* Disposal of Ruskinn Life Sciences in February 2006 for #1M and 10%
equity in ongoing business
* Signed agreement with Pall Corporation in January this year to expand
sales in the pharmaceutical sector
Commenting on the interim results, Terry Clements, Non-executive Chairman of
Biotrace, said:
"I am pleased to report a substantial improvement in the financial performance
of the Group for the first half of the year compared with the corresponding
period last year. Revenues have grown as a result of focussing the business
through acquisitions and disposals, expanding the customer base and broadening
the product offering. The acquisitions have been aimed at significantly
expanding the Company's presence in the pharmaceutical market, whilst the
disposal of the Bridgend HQ property announced earlier in the year generated a
gain of #0.5M pre-tax, boosting earnings in the period. This together with the
disposal of the Ruskinn Life Sciences business in February will generate an
additional #1.7M of cash this year.
The Company is continuing to make good progress by broadening the business base
and developing a world class global sales channel for industrial diagnostics.
Organic growth is beginning to improve despite continuing tough trading
conditions. We are therefore confident in our ability to deliver a good full
year performance and remain optimistic about the Company's long term prospects."
Further information:
Biotrace International Plc on the day tel: +44 (0) 207 466 5000
Ian Johnson, Chief Executive Officer thereafter tel: +44 (0) 1656 641 492
Peter Morgan, Finance Director
Buchanan Communications tel: +44 (0) 207 466 5000
Tim Anderson/James Strong/Mary-Jane Johnson
Analyst meeting:
An analyst briefing will be held at 09:30 am today at the offices of Buchanan
Communications, 45 Moorfields, London EC2Y 9AE.
BIOTRACE INTERNATIONAL PLC
INTERIM RESULTS
for the six months ended 30 June 2006
Chief Executive's Review:
The Company has made steady progress in the first half of the year preparing the
way for a solid full year performance. Growth in the period was generated from
the contributions of MicroSafe which was acquired in September 2005 and Target
Diagnostica, which was acquired by MicroSafe in March this year. Underlying
sales improved during the period, aided by favourable exchange movements to
reverse the negative trend over the previous twelve months. The disposal of the
Ruskinn Life Sciences business has led to more focus on our core industrial
markets and, coupled with the sale of the HQ property, has reduced the Group's
net debt position. The Group is in a strong position going forward, benefiting
from a high percentage of revenues generated from own brands, recurring sales of
consumables and direct sales.
Sales increased by 24% to #16.9M (2005: #13.6M) in the first half of 2006
compared with the corresponding period last year. Adjusting for acquisitions
and exchange movements, underlying sales declined by #0.2M, largely as a result
of a reduction of #0.4M in defence sales in the period compared to the same
period last year. Profit before tax rose 27% to #1.7M (2005: #1.4M); pre-tax
profits excluding the discontinued business were 6% higher than the
corresponding period last year.
Operating margins, excluding the discontinued business, remained steady at
approximately 10%.
Earnings per share increased to 3.15p (2005: 2.40p) including the one-off HQ
disposal profit and to 3.45p excluding the discontinued activity.
The Directors have declared an increased interim dividend of 0.55p per share
(2005: 0.40p), which will be paid on 9 October 2006 to shareholders on the
register as at 15 September 2006.
Industrial:
Industrial sales accounted for 95% of Group turnover in the period and grew 26%
to #16.0M (2005: #12.6M).
The food and environmental segment accounted for 73% of Industrial revenues in
the first half. Sales increased 3% to #11.7M (2005: #11.4M), benefiting from a
#0.4M contribution from Target Diagnostica, which offset a small decline in
underlying sales, predominantly from lower revenues of hygiene and Tecra
products. The Group has responded well to the tough trading conditions and
pricing pressures in this sector and continues to expand the customer base, by
providing high quality products and excellent customer service.
The pharmaceutical, personal care and cosmetics segment grew by 227% over the
same period last year with revenues of #3.5M (2005: #1.1M), accounting for 22%
of industrial revenues. MicroSafe contributed #2.6M to the growth by
broadening the Group's product offering and increasing the customer base. During
the period, MicroSafe secured an order worth over #0.8M from a major
pharmaceutical company, which will boost second half sales.
With the growing incidence of hospital acquired infections, the Biotrace rapid
hygiene kits are beginning to be used to assess hospital cleanliness and
surgical instrument cleanliness. This emerging business together with sales of
products to educational and research institutions grew 38% to #0.8M (2005:
#0.6M), accounting for 5% of Industrial revenues.
Defence:
Sales of defence products have in previous years been predominantly to the UK
MoD, however, since the acquisition of MicroSafe in September last year, the
customer base has expanded to include the Italian Army and the national fire
departments, who have the responsibility for first response to civilian
incidents involving possible biological agents. More recently the Company
announced that MicroSafe had also been awarded a NATO contract, worth #1.2M, to
supply three NBC mobile laboratories. This latter order is scheduled to be
delivered in the fourth quarter of this year.
Revenues in the first half were #0.4M, down 16% on the corresponding period last
year (2005: #0.5M). MicroSafe contributed #0.3M in the period with UK MoD sales
falling to #0.1M from #0.5M last year. It is anticipated that defence revenues
will improve significantly in the second half, benefiting particularly from the
NATO order.
Life sciences:
As announced in February this year, the Ruskinn Life Sciences business was sold
to management for #1M with the Company retaining 10% of the new business.
Biotrace agreed to manufacture product for Ruskinn until the end of the current
year, consequently, the Group has recognised the #0.5M of revenues generated
from Ruskinn in the period as a discontinued activity (2005: #0.4M).
Financial:
Profit before tax increased by 27% to #1.7M (2005: #1.4M) benefiting from an
improvement in operating profit and a profit arising on the disposal of the
Bridgend property in our joint venture, Mansford Biotrace Limited. Operating
profit increased by #0.2M to #1.6M (2005: #1.4M) with this profit being struck
after a charge for intangible asset amortisation of #0.4M (2005: #0.2M). The
operating profit before intangible asset amortisation was up 18% compared with
the corresponding period in 2005 despite the benefit in 2005 of #0.1M of grant
income which was not repeated in 2006.
Gross margin percentage for the period was 47% (2005: 53%) due mainly to the
inclusion of MicroSafe and Target at lower gross margins than those earned
within the Group prior to these acquisitions being made. In addition, product
mix changes through lower defence sales in the UK combined with a small decline
in hygiene margins and the low margin derived from the subcontract manufacture
of Ruskinn workstations included in discontinued activities, reduced overall
gross margins of the Group. However, continuing business gross margins were 48%.
Overheads, excluding development expenditure, increased from #5.2M to #5.8M as a
result of the acquisition of MicroSafe and Target adding #1.0M of expenses
offset by savings following the disposal of the Ruskinn business. The Group
continues to invest in technology and product development, incurring R&D costs
in the period of #0.5M (2005: #0.6M) which have been reduced through the
capitalisation of #0.1M of development expenditure on certain products which
satisfied the criteria specified by IFRS.
A strong feature of the business remains the cash flow with cash generated from
operations up 35% to #3.1M (2005: #2.3M). This was augmented by a dividend
received and other balances repaid from Mansford Biotrace amounting to #0.6M and
a #0.6M cash inflow arising from the disposal of Ruskinn. A final payment of
#0.5M from the Ruskinn disposal is contracted to be received in December 2006.
The net cash generated from the Group after investing activities was #2.5M and
this was applied to decrease net borrowings by #2.1M and pay shareholders a
dividend of #0.4M.
The tax charge for the period was #0.5M, with the Group benefiting from #0.1M of
tax relief arising on R&D expenditure. This charge represents an expected
effective rate of 32%.
Outlook:
Management is continuing to focus on developing a global sales channel for
industrial diagnostics by expanding direct customer access in its core business
segments and delivering a broad and expanding product range of innovative
products that meet or exceed customer expectations.
As a result of restructuring initiatives taken in 2005, the business now has
direct control of many of its major markets with a more predictable revenue
stream from which to continue to implement its plans. Further opportunities lie
ahead to continue building the Group, enabled by the significant cash generation
from the high level of recurring consumables sales.
With the uplift anticipated from defence and pharmaceutical orders already
received, the Group is confident of showing further progress.
Ian Johnson
Chief Executive Officer
6 September 2006
Consolidated Income Statement
for the six months ended 30 June 2006
Continued Discontinued Unaudited Unaudited
Activities Activity 6 months to 6 months to 12 months to
30 June 30 June 30 June 30 June 31 December
Note 2006 2006 2006 2005 2005
#'000 #'000 #'000 #'000 #'000
Revenue (2) 16,442 434 16,876 13,559 29,336
Cost of sales (8,625) (390) (9,015) (6,350) (14,655)
Gross profit 7,817 44 7,861 7,209 14,681
Selling, marketing and
administrative costs before
restructuring (5,772) (55) (5,827) (5,058) (10,327)
Restructuring costs (7) - - - (132) (337)
Total selling, marketing and
administrative costs (5,772) (55) (5,827) (5,190) (10,664)
Research and development costs (390) (76) (466) (581) (1,215)
Total costs (6,162) (131) (6,293) (5,771) (11,879)
Operating profit (2) 1,655 (87) 1,568 1,438 2,802
Financial income - interest 45 - 45 19 38
receivable and other income
Financial expenses - interest (248) - (248) (120) (298)
payable and other charges
Net financing costs (203) - (203) (101) (260)
Share of profit and loss in
joint venture and associate (12) 366 - 366 31 64
Profit before income tax 1,818 (87) 1,731 1,368 2,606
UK tax (47) 26 (21) (191) (240)
Overseas tax (440) - (440) (253) (663)
Income tax expense (3) (487) 26 (461) (444) (903)
Loss on sale of discontinued - (57) (57) - -
operations after taxation
Profit for the period 1,331 (118) 1,213 924 1,703
Attributable to:
Equity of the holders of the 1,354 (118) 1,236 932 1,711
parent Company
Minority interests (23) - (23) (8) (8)
1,331 (118) 1,213 924 1,703
Earnings per ordinary share (5)
- basic 3.45p (0.30)p 3.15p 2.40p 4.39p
- diluted 3.44p (0.30)p 3.14p 2.39p 4.37p
Dividend per share (4) 1.15p 1.15p 1.55p
Dividends declared (#'000) 446 447 619
Consolidated Balance Sheet
for the six months ended 30 June 2006
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2006 2005 2005
Notes #'000 #'000 #'000
Assets
Intangible assets 16,402 14,285 17,971
Property, plant and equipment 2,330 2,664 2,561
Investments in joint venture and associate 152 160 380
Deferred tax asset 159 335 171
Other receivables 30 100 100
Total non current assets 19,073 17,544 21,183
Inventories 5,108 4,579 5,380
Trade and other receivables 7,601 4,938 7,627
Cash and cash equivalents 734 724 466
Total current assets 13,443 10,241 13,473
Total assets (2) 32,516 27,785 34,656
Equity
Issued share capital 3,925 3,887 3,925
Share premium 10,221 9,921 10,221
Other reserves 535 1,077 1,243
Retained earnings 4,846 3,288 3,932
Total equity attributable to shareholders of 19,527 18,173 19,321
the parent
Minority interest share in net assets 182 469 205
Total Equity 19,709 18,642 19,526
Liabilities
Interest bearing loans and borrowings 3,211 2,594 4,289
Deferred tax liabilities 425 629 356
Other payables - deferred consideration 1,883 - 1,200
Provisions 224 135 120
Total non current liabilities 5,743 3,358 5,965
Trade and other payables 4,134 3,606 5,181
Interest bearing loans and borrowings 1,596 1,138 2,534
Current tax liabilities 137 41 247
Derivative financial instruments - 71 23
Provisions 1,197 929 1,180
Total current liabilities 7,064 5,785 9,165
Total liabilities (2) 12,807 9,143 15,130
Total equity and liabilities 32,516 27,785 34,656
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2006
Attributable to equity holders of the parent company
Share Other reserves Retained Minority Total
capital (see below) earnings Total interest equity
JUNE 2006 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 2006 3,925 11,464 3,932 19,321 205 19,526
Recycled to the income statement - 23 - 23 - 23
Transferred to retained earnings - (89) 89 - - -
Revaluation reserve released - (29) - (29) - (29)
Fair value gains on hedging - 19 - 19 - 19
Currency translation - (632) - (632) - (632)
Net income recognised directly in - (708) 89 (619) - (619)
equity
Profit for the year - - 1,236 1,236 (23) 1,213
Total income and expense for the year - (708) 1,325 617 (23) 594
Dividends paid - - (446) (446) - (446)
Equity settled transactions - - 35 35 - 35
Balance at 30 June 2006 3,925 10,756 4,846 19,527 182 19,709
Share Revaluation Merger Translation Hedging Total other
premium reserve reserve reserve Reserve Reserves
Other reserves - June 2006 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 2006 10,221 29 390 847 (23) 11,464
Recycled to the income statement - - - - 23 23
Transferred to retained earnings - - (89) - - (89)
Revaluation reserve released - (29) - - - (29)
Fair value gains on hedging - - - - 19 19
Currency translation - - - (632) - (632)
Net income recognised directly in - (29) (89) (632) 42 (708)
equity
Balance at 30 June 2006 10,221 - 301 215 19 10,756
Attributable to equity holders of the parent company
Share Other reserves Retained Minority Total
capital (see below) earnings Total interest equity
June 2005 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 2005 3,887 10,622 2,766 17,275 483 17,758
Opening balance IAS 39 adjustment - 20 - 20 - 20
Revised balance at 1 January 2005 3,887 10,642 2,766 17,295 483 17,778
Recycled to the income statement - (20) - (20) - (20)
Fair value losses on hedging - (71) - (71) - (71)
Currency translation - 447 - 447 (6) 441
Net income recognised directly in - 356 - 356 (6) 350
equity
Profit for the year - - 932 932 (8) 924
Total income and expense for the year - 356 932 1,288 (14) 1,274
Dividends paid - - (447) (447) - (447)
Equity settled transactions - - 37 37 - 37
Balance at 30 June 2005 3,887 10,998 3,288 18,173 469 18,642
Share Revaluation Merger Translation Hedging Total other
premium reserve reserve reserve Reserve Reserves
Other reserves - June 2005 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 2005 9,921 29 390 282 - 10,622
Opening balance IAS 39 adjustment - - - - 20 20
Revised balance at 1 January 2005 9,921 29 390 282 20 10,642
Recycled to the income statement - - - - (20) (20)
Fair value losses on hedging - - - - (71) (71)
Currency translation - - - 447 - 447
Net income recognised directly in - - - 447 (91) 356
equity
Balance at 30 June 2005 9,921 29 390 729 (71) 10,998
Attributable to equity holders of the parent company
Share Other reserves Retained Minority Total
capital (see below) earnings Total interest equity
DECEMBER 2005 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 2005 3,887 10,622 2,766 17,275 483 17,758
Opening balance IAS 39 adjustment - 20 - 20 - 20
Revised balance at 1 January 2005 3,887 10,642 2,766 17,295 483 17,778
Recycled to the income statement - (20) - (20) - (20)
Fair value losses on hedging - (23) - (23) - (23)
Currency translation - 565 - 565 (5) 560
Net income recognised directly in - 522 - 522 (5) 517
equity
Profit for the year - - 1,711 1,711 (8) 1,703
Total income and expense for the year - 522 1,711 2,233 (13) 2,220
Dividends paid - - (619) (619) - (619)
Minority interest purchased - - - - (265) (265)
Equity settled transactions - - 74 74 - 74
Shares issued 38 300 - 338 - 338
Balance at 31 December 2005 3,925 11,464 3,932 19,321 205 19,526
Share Revaluation Merger Translation Hedging Total other
premium reserve reserve reserve Reserve Reserves
Other reserves - December 2005 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 2005 9,921 29 390 282 - 10,622
Opening balance IAS 39 adjustment - - - - 20 20
Revised balance at 1 January 2005 9,921 29 390 282 20 10,642
Recycled to the income statement - - - - (20) (20)
Fair value losses on hedging - - - - (23) (23)
Currency translation - - - 565 - 565
Net income recognised directly in - - - 565 (43) 522
equity
Shares issued 300 - - - - 300
Balance at 31 December 2005 10,221 29 390 847 (23) 11,464
Consolidated Cash Flow Statement
for the six months ended 30 June 2006
Unaudited Unaudited
6 months 6 months 12 months to
at 30 June 2006 at 30 June 2005 31 December 2005
#'000 #'000 #'000
Profit for the period 1,213 924 1,703
Adjustments for:
Depreciation 418 465 1,047
Amortisation 377 209 531
Equity settled transactions 35 37 74
Foreign exchange losses/(gains) 24 6 (93)
Financial income (45) (19) (38)
Financial expenses 248 121 298
Share in joint venture and associate results (366) (7) (64)
Gain on sale of property, plant and equipment 57 2 16
Income tax expense 461 444 903
Operating profit before changes in
working capital and provisions 2,422 2,182 4,377
Decrease in accounts receivable 1,108 194 (308)
Decrease/(Increase) in inventories 187 (547) (885)
(Decrease)/Increase in accounts payable and provisions (638) 451 741
Cash generated from operations 3,079 2,280 3,925
Interest paid (156) (121) (298)
Income tax paid (588) (460) (1,175)
Net cash from operating activities 2,335 1,699 2,452
Investing activities
Acquisition of subsidiary, net of cash acquired (256) (369) (3,147)
Receipts from sale of subsidiary 398 - -
Receipts from joint venture 447 - -
Acquisition of minority interest share in subsidiary - - (474)
Payments to acquire property, plant and equipment (349) (386) (708)
Receipts from sales of property, plant and equipment 34 43 53
Payments to acquire intangible assets (152) - (156)
Interest received 45 18 38
Net cash used in investing activities 167 (694) (4,394)
Financial activities
Proceeds from borrowings - - 2,793
Repayments of borrowings (958) (585) (1,341)
Payment of finance lease liabilities (17) (12) (18)
Dividend paid to equity shareholders (413) (447) (625)
Net cash used in financing activities (1,388) (1,044) 809
Net cash inflow/(outflow) 1,114 (39) (1,133)
Net cash inflow/(outflow) 1,114 (39) (1,133)
Cash and cash equivalents at start of year (375) 758 758
Effect of exchange rate fluctuations on cash held (5) 5 -
Cash and cash equivalents at end of year 734 724 (375)
Cash and cash equivalents consist of: 734 724 466
Cash and cash equivalents - - (841)
Overdrafts
734 724 (375)
Notes to the Interim Accounts
for the six months ended 30 June 2006
1. ACCOUNTING POLICIES
a. Basis of preparation
This interim financial information has been prepared applying the accounting
policies and presentation that were applied in the preparation of the company's
published consolidated financial statements for the year ended 31 December 2005.
The interim accounts included in this financial information are not audited and
do not constitute full statutory accounts within the meaning of section 240 of
the Companies Act 1985. The comparative figures for the financial year ended 31
December 2005 are not the Company's statutory accounts for that financial year.
Those accounts, which were prepared under UK GAAP, have been reported on by the
Company's Auditors and delivered to the registrar of companies. The report of
the Auditors was unqualified and did not contain statements under section 237(2)
or (3) of the Companies Act 1985.
2 SEGMENTAL ANALYSIS
Segmental information is presented in the condensed consolidated interim
financial statements in respect of the Group's geographical segments which are
the primary basis of segmental reporting.
a. Geographical analysis
The results below are allocated based on the region from which the businesses
are located; this reflects the Group's management and internal reporting
structure.
Inter segment pricing is determined on an arms length basis. Segment results
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
For the purposes of this analysis the following definitions are used:
Europe - includes all of Europe, Middle East, Africa and
Russia
Americas - includes all of North and South America and the
Caribbean
APAC (Asia Pacific region) includes Australasia, New Zealand, China, India,
Far East, Asia (apart from Russia)
Corporate - includes the activities of the Directors of the Company and certain
central finance and marketing costs not attributable to the individual regions.
6 months to 30 June 2006 Europe Americas APAC Corporate Eliminations Group
#'000 #'000 #'000 #'000 #'000 #'000
Revenue
- external 8,894 6,876 1,106 - - 16,876
- Intra-segment 1,993 222 1,142 - (3,357) -
Total segment revenue 10,887 7,098 2,248 - (3,357) 16,876
Operating profit 937 1,067 162 (598) - 1,568
Share of profit in associates and 366
joint ventures
Net financing costs (203)
Profit before income tax 1,731
Income tax (461)
Loss on sale of discontinued (57)
activities
Profit for period 1,213
Included in the above:
Depreciation 236 76 106 - - 418
Amortisation 204 - 173 - - 377
Balances at 30 June 2006 Europe Americas APAC Corporate Eliminations Group
#'000 #'000 #'000 #'000 #'000 #'000
Segment assets 16,320 7,260 7,669 381 - 31,630
Investment in associates and joint 152
venture
Unallocated assets 734
Total assets 32,516
Segment liabilities (4,910) (734) (1,173) (1,183) - (8,000)
Unallocated liabilities (4,807)
Total liabilities (12,807)
Capital expenditure
- property, plant and equipment 73 160 60 - - 293
- intangible 520 - 97 - - 617
Europe Americas APAC Corporate Eliminations Group
6 months to 30 June 2005 #'000 #'000 #'000 #'000 #'000 #'000
Revenue
- external 6,174 6,166 1,219 - - 13,559
- Intra-segment 3,112 1,625 1,517 - (6,254) -
Total segment revenue 9,286 7,791 2,736 - (6,254) 13,559
Operating profit 1,254 760 392 (968) - 1,438
Share of profit in associates and 31
joint ventures
Net financing costs (101)
Profit before income tax 1,368
Income tax (444)
Profit for period 924
Included in the above
Depreciation 282 87 96 - - 465
Amortisation 37 - 172 - - 209
Balances at 30 June 2005
Segment assets 3,987 9,271 2,186 12,181 - 27,625
Investment in associates and joint 160
ventures
Unallocated assets -
Total assets 27,785
Segment liabilities (2,167) (4,628) (1,405) (943) - (9,143)
Unallocated liabilities -
Total liabilities (9,143)
Capital expenditure
- property, plant and equipment 195 34 157 - - 386
- intangible - - 22 - - 22
2 SEGMENTAL ANALYSIS (continued)
b. Market sector analysis
The results below are allocated based on the market sector to which the
businesses sell - the Life Sciences business has been completely integrated into
the balance sheets of our Industrial companies, so these balances are no longer
separately identifiable.
Industrial Life Science Defence Group
#'000 #'000 #'000 #'000
2006
Revenue from external customers 15,969 458 449 16,876
Balances at 30 June 2006
Segment assets 30,981 421 228 31,630
Investment in joint venture 152
Unallocated assets 734
Total assets 32,516
Liabilities (7,835) - (165) (8,000)
Unallocated liabilities (4,807)
Total liabilities (12,807)
Capital expenditure
- property, plant and equipment 293 - - 293
- intangible 617 - - 617
2005
Revenue from external customers 12,646 379 534 13,559
Balances at 30 June 2005
Assets 27,183 - 442 27,625
Investment in joint venture 160 - - 160
Unallocated assets -
Total assets 27,785
Liabilities (9,118) - (25) (9,143)
Unallocated liabilities -
Total liabilities (9,143)
Capital expenditure
- tangible 384 2 - 386
- intangible 22 - - 22
3 TAXATION
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
UK taxation at 30% (63) 191 240
Overseas taxation 453 131 597
Deferred taxation 71 122 66
461 444 903
4 DIVIDENDS
The dividends declared in the relevant periods are as follows:
Amount Payment Total dividend Based on
Dividend description per share date #'000 register dated
Final dividend 2004 1.15p 16/05/05 446 15/04/05
Interim dividend 2005 0.40p 11/10/05 155 16/09/05
Final dividend 2005 1.15p 15/05/06 451 18/04/06
Interim dividend 2006 0.55p 09/10/06 216 15/09/06
5 EARNINGS PER SHARE
Earnings per share is based on the profit on ordinary activities after taxation
and minority interests and on 39.3 million ordinary shares in issue during the
period (30 June 2005: 38.9 million; 31 December 2005: 39.0 million). Diluted
earnings per share is based on the profit after taxation and minority interests
and 39.1 million (30 June 2005: 39.0 million; 31 December 2005: 39.1 million)
ordinary shares. The Group has calculated an undiluted earnings per share before
restructuring costs and amortisation in order to inform shareholders of the
underlying performance of the Group. The adjusted earnings per share are
calculated in the following ways:
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
Earnings before restructuring costs
Profit for the period attributable to equity 1,236 932 1,711
holders
Add: restructuring costs (see note 7) - 132 337
Less: tax on restructuring costs - (40) (101)
1,236 1,024 1,947
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
Earnings before restructuring costs and
amortisation
Profit for the period before restructuring costs 1,236 1,024 1,947
Add: amortisation of intangibles 377 209 531
Less: tax on amortisation (113) (63) (159)
1,500 1,170 2,319
Weighted average number of ordinary shares No. of shares No. of shares No.of shares
Issued ordinary shares at the end of the period 39,252,627 38,865,149 39,252,627
Issued ordinary shares at the start of the period 39,252,627 38,865,149 38,865,149
Weighted average number of shares in period 39,252,627 38,865,149 38,978,738
Diluted number of shares in period 39,347,147 39,033,267 39,124,737
Pence Pence Pence
Earnings per ordinary share per share per share per share
- basic 3.15 2.40 4.39
- diluted 3.14 2.39 4.37
- before restructuring costs 3.15 2.63 5.00
- before restructuring cost and amortisation 3.82 3.01 5.95
6 PROPERTY, PLANT AND EQUIPMENT
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2006 2005 2005
#'000 #'000 #'000
Additions 293 386 726
Acquired through business combinations 6 - 467
Net book value of asset disposals (40) (45) (135)
Commitments for purchase of assets 79 - 159
7 RESTRUCTURING COSTS
There were no restructuring costs incurred in the period (2005: #0.1m).
8 ACQUISITION
Target Diagnostica srl
On 8 March 2006 the Company, through its Italian subsidiary company Biotrace
Microsafe srl ("Microsafe") acquired the remaining share capital of Target
Diagnostica srl ("Target") for #0.3m. Previously Microsafe held 39% of the
ordinary shares of Target as an associate. The provisional fair value of the
assets acquired with the company were:
Book Value Adjustments Fair value
#'000 #'000 #'000
Property, plant and equipment 9 - 9
Other intangible 21 - 21
Inventory 68 - 68
Receivables 498 - 498
Payables (439) - (439)
Cash acquired (13) - (13)
144 - 144
Goodwill 435
579
Satisfied by the following consideration:
Deferred consideration 343
Shares already owned at fair value 214
Acquisition costs 22
579
Target's operating profits in 2006 are set out below:
Post acquisition Pre acquisition
8 March - 1 January -
30 June 2006 8 March 2006
#'000 #'000
Revenue 427 239
Cost of sales (256) (147)
Gross profit 171 92
Selling and administrative expenses (153) (74)
Operating profit 18 18
9 DISPOSAL
Disposal of Ruskinn Technology Ltd
On 9 February 2006 the Group announced the disposal of Ruskinn Technology Ltd
including the IPR relating to the AC-TIVE development and the assets and trade
of the Ruskinn anaerobic work station business.
#'000
Consideration:
Cash received 457
Cash due in December 2006 473
Shares in Ruskinn (10% of the equity capital in Ruskinn Life Sciences Ltd and 117
Ruskinn Holdings Ltd)
Transaction costs (59)
988
Net book value assets sold including intangibles (1,069)
Loss on disposal of subsidiary and Ruskinn business (81)
In addition to the amounts noted above, inter company balances of #120,000 owing
to other Group companies were repaid as part of the transaction.
Following the disposal of the business, the Group continues to manufacture
Ruskinn products for the Ruskinn Group, this contract is due to end in December
2006.
10 SHARE BASED PAYMENTS
No share options were granted during the six months ended 30 June 2006. The
fair value charge for the period of #35,000 (2005: #37,000) relates to the
charge arising on options issued in previous periods.
11 FINANCIAL INSTRUMENTS
a. Hedging fluctuations in foreign currency
The Group is exposed to foreign currency risk on sales, purchases and borrowings
that are denominated in a currency other than Pound Sterling. The currencies
giving rise to this risk are primarily US Dollars, Australian Dollars and Euros.
The Group uses forward exchange contracts to hedge its foreign currency risk.
The forward exchange contracts have maturities of less than one year after the
balance sheet date.
In respect of other monetary assets and liabilities held in currencies other
than Sterling, the Group ensures that the net exposure is kept to an acceptable
level by buying or selling foreign currencies at spot rates where necessary to
address short term imbalances.
The principal repayment amounts of the Group's US Dollar bank loans are
naturally hedged by trading cash flows.
b. Forecasted transactions
The Group classifies its forward exchange contracts hedging forecasted
transactions as cash flow hedges and measures them at fair value. The net fair
value of forward exchange contracts used as hedges of forecasted transaction at
30 June 2006 was #19,000 asset.
c. Recognised assets and liabilities
Changes in the fair value of forward exchange contracts that economically hedge
monetary assets and liabilities in foreign currencies and for which no hedge
accounting is applied are recognised in profits or loss. Both the changes in
fair value of the forward contracts and the foreign exchange gains and losses
relating to the monetary items are recognised as part of "net financing costs".
The fair value of forward exchange contracts used as economic hedges of monetary
assets and liabilities in foreign currencies at 30 June 2006 was nil (31
December 2005: #nil) recognised in fair value derivatives.
d. Fair values
The carrying amount of financial instruments is shown below. The fair value of
these instruments approximates to the carrying value because of the short
maturity of the deposits and borrowings and because the interest rates are based
on floating money market rates in the USA and UK.
To estimate the fair values of forward exchange contracts, they are marked to
market either using listed market prices or by discounting the contractual
forward price and deducting the current spot rate.
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2006 2005 2005
Financial Instruments #'000 #'000 #'000
Cash and cash equivalents 734 724 466
Bank overdrafts - - (841)
Loans - due within 1 year (1,596) (1,138) (1,676)
Loans - due after more than 1 year (3,211) (2,594) (4,289)
Finance lease liabilities - (12) (17)
Loan with joint venture - 100 100
Net debt (4,073) (2,920) (6,257)
Trade and other receivables 7,601 4,938 7,627
Trade and other payables (4,134) (3,606) (5,181)
(606) (1,588) (3,811)
12 RELATED PARTY TRANSACTIONS
Mansford Biotrace Ltd
The Directors consider the material transactions undertaken by the Group during
the year with Mansford Biotrace Ltd were as follows:
Vale of transaction Balance owed by/(to) related
party at 30 June
2006 2005 2006 2005
#'000 #'000 #'000 #'000
Rental charges (73) (68) - -
Loan stock held - repaid in 2006 139 - - 139
Long term debtor - repaid in 2006 100 - - 100
Interest payable on loan stock and 26 - - -
long term debtor
Dividends receivable 359 - 50 -
During the period, the leasehold of the building owned by Mansford Biotrace Ltd
(and occupied by Biotrace Ltd) was sold to Simrock Plc. The profits from this
sale have been distributed and it is expected that the joint venture company
will be closed in due course.
The effect of these transactions on the profit and loss of the Group is as
follows:-
2006
#'000
Share of profits on sale of leasehold to Simrock Plc 509
Share of other trading results in Mansford Biotrace Ltd (11)
498
Share of income tax (132)
366
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UUURGBUPQGMA
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