Final Results
29 Mars 2007 - 9:01AM
UK Regulatory
RNS Number:9145T
Chromogenex PLC
29 March 2007
Chromogenex plc
Preliminary results for the year ended 31 December 2006
Chromogenex plc ("Chromogenex" or the "Group"), the advanced medical and
aesthetic laser device company targeting acne, wrinkles and vascular lesions,
announces its preliminary results for the year ended 31 December 2006.
Financial Highlights
2006 2005 % Change
Turnover #4.46m #3.29m +36
Gross Profit Margin 47% 49%
Operating Profit #497k #133k * +274
Profit after Tax #493k #129k * +282
EPS 0.83p 0.28p * +196
Net Assets #2.35m #1.71m +37
* as restated after adopting FRS20
Operational Highlights
*Trading in Q4 2006 was the strongest quarter to date
*US FDA clearance for ChromoliteTM
*Canadian CMDCAS certification for N-LiteTM and ChromoliteTM
*Strong orders from new distributors in Spain and Canada
*Existing markets in France and Germany continue steady growth
Post Year End
*Manufacturing agreement with US aesthetics company Smoothshapes for the
production of an advanced new laser treatment for cellulite and body shaping
Peter McGuinness, Executive Chairman, commented:
"2006 has been a highly successful year for the Group. A very strong financial
performance has been achieved through growth in our existing markets, as well as
encouraging demand in new territories.
"Our agreement with Smoothshapes is further evidence of the Board's commitment
to add complementary products and opportunities, whether by collaboration or
acquisition, to enable the Group to increase its profitability, and we look
forward to the coming year with confidence."
For further information:
Chromogenex plc 020 8434 0540
Peter McGuinness, Chairman 07775 834 777
Corporate Synergy 020 7448 4400
Olly Cairns
Threadneedle Communications 020 7936 9605
Graham Herring/Josh Royston
CHAIRMAN'S STATEMENT
I am pleased to present the consolidated accounts of Chromogenex plc and its
subsidiaries for the year ended 31 December 2006.
Introduction and overview
Following flotation on AIM in July 2005 the Group has consolidated its position
with significant improvements being made in manufacturing capability and sales.
Over the past year, the Group has increased manufacturing capacity by 50%
through the introduction of more efficient processes and increased resource,
which has enabled the manufacture of an increased number of ChromoliteTM
devices. In addition the quality systems have been upgraded and the US FDA has
given clearance for ChromoliteTM, and the Canadian CMDCAS has given
certification for N-LiteTM and ChromoliteTM.
Trading in the final quarter was the strongest quarter to date with sales of the
N-Lite laser systems performing well after a sluggish performance in the first
half of the year. There were also increases in the sales of ChromoliteTM
following introduction into the US market. The Group has also received strong
orders for the whole range of products from new distributors in Spain and Canada
and the existing markets in France and Germany continue their steady growth.
Results
Turnover for the year increased 36% to #4,462,000 (2005: #3,287,000) primarily
as a result of increased sales of ChromoliteTM. The gross profit percentage has
fallen slightly to 47% (2005: 49%) as with increasing competition prices have
been reduced to increase market share and profits.
The Earnings before Interest Tax Depreciation and Amortisation (EBITDA) amounted
to #413,000 (operating profit #497,000 less amortisation of negative goodwill of
#158,000 plus depreciation charge #74,000) (2005 restated: #(94,000) - operating
profit #133,000 less amortisation of negative goodwill of #310,000 plus
depreciation charge of #83,000).
Overall we achieved a profit after tax for the year of #493,000 (2005 restated:
#129,000). This is after the Group has changed its accounting policy for
accounting for share options so that it follows FRS 20 - Share based payments.
As a result of the change in policy an additional charge of #41,000 has been
made in the current year and in 2005 the additional charge was #52,000. The
earnings per share is 0.83p (2005: 0.28p).
The Group has net assets of #2,347,000 (2005: #1,707,000), with cash at bank of
#362,000 (2005: #277,000).
Post Balance Sheet Event
On 20 February 2007 the Group announced that it had completed a manufacturing
agreement with the US aesthetics company, Smoothshapes, for the production of an
advanced new laser treatment for cellulite and body shaping. The contract is for
an initial quantity of 200 systems over the next 24 months with the first
shipment of devices planned for Q2 2007. This contract has been achieved as a
result of the continued investment in our manufacturing and quality systems and
will further enhance the Group's earnings.
Overview and Future Outlook
The Group has strong manufacturing capability and distribution networks and the
directors are actively seeking new complementary products and opportunities,
whether by collaboration or acquisition, to enable the Group to increase its
profitability.
Peter McGuinness
Chairman
OPERATING REVIEW
Long term strategy and business objectives
Chromogenex designs, manufactures and distributes aesthetic and therapeutic
laser and aesthetic light based technology devices. The Group has developed this
light based technology and holds a number of patents in respect of it. It has
two main multifunctional products:
*The ChromoliteTM, an intense Xenon pulse light system for permanent hair
reduction, skin rejuvenation, treatment of pigmented lesions and other
applications ; and
*The N-LiteTM-V, a 585mm pulse dye laser used for the treatment of Acne
Vulgaris and other clinical skin lesions, as well as for aesthetic skin
rejuvenation
It is the directors' intention to continue to expand the Group's business
worldwide and, accordingly, the directors have developed a strategy for the
Group as follows:
*Geographic expansion
*Continued development of existing products and development of future
products
*Acquisition of businesses with complementary skills, technologies and
products
Resources
The Group has the following key resources which assist it in the pursuit of its
key activities:-
*Employees who have extensive knowledge and expertise in development and
manufacture
*Employees with extensive knowledge of the key markets
*Intellectual property knowledge covering design and manufacture of
products
Our people
We have consistently sought to recruit and retain the best employees in our
market and this has contributed to our success in developing, manufacturing and
selling our products in the UK and overseas. The Group has a policy of equal
opportunities which applies to the recruitment of all new employees and to the
management of existing personnel.
Patents
The Group has a range of pending and granted patents protecting aspects of its
technology and its products. When appropriate, the Group seeks to protect its
ideas and technology through the filing of patent applications.
Future Outlook
The financial year has been one of consolidation following the flotation of the
Group onto AIM in 2005. The Group is operating in a competitive market and
anticipates making further significant inroads into that market. There has been
a resurgence in demand for the N-LiteTM laser product especially in Europe and
this is expected to continue over the next twelve months.
After a significant investment we are looking forward to the launch of
Smoothshapes 100TM in the second quarter of 2007 which will further enhance the
Group's earnings.
Les Russell
Managing Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2006
2006 2005
Notes #'000 #'000
restated
TURNOVER 4,462 3,287
Cost of sales (2,375) (1,685)
--------- ---------
Gross profit 2,087 1,602
Administrative expenses (1,748) (1,779)
Amortisation of negative goodwill 158 310
--------- ---------
OPERATING PROFIT 497 133
Interest payable and
similar charges (4) (5)
---------- ---------
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION 493 128
Taxation 2 - 1
---------- ---------
PROFIT ON ORDINARY
ACTIVITIES AFTER TAXATION 3 493 129
========== =========
EARNINGS PER
ORDINARY SHARE (PENCE) 4
Basic 0.83p 0.28p
Diluted 0.75p 0.25p
========== =========
All results relate to continuing activities.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2006 2005
For the year ended 31 December, 2006 #'000 #'000
Profit for the financial year 493 129
-------- ---------
Total recognised gains and losses
relating to the year 493 129
=========
Prior year adjustment 5 (52)
--------
Total gains and losses recognised
since last annual report 441
========
CONSOLIDATED BALANCE SHEET
as at 31 December 2006
As at As at
31 December 31 December
2006 2005
Notes #'000 #'000
FIXED ASSETS
Intangible assets
- negative goodwill - (158)
- other 343 153
Tangible assets 64 77
-------- ---------
407 72
-------- ---------
CURRENT ASSETS
Stocks 1,245 1,219
Debtors 1,226 878
Cash at bank 362 277
-------- --------
2,833 2,374
CREDITORS:
Amounts falling due
within one year (893) (739)
-------- --------
NET CURRENT ASSETS 1,940 1,635
-------- --------
TOTAL ASSETS LESS
CURRENT LIABILITIES 2,347 1,707
-------- --------
NET ASSETS 2,347 1,707
======== ========
CAPITAL AND RESERVES
Called up share capital 605 592
Share premium 1,539 1,500
Merger reserve (302) (302)
Profit and loss account 505 (83)
-------- --------
EQUITY SHAREHOLDERS' FUNDS 3 2,347 1,707
======== ========
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2006
Year ended Year ended
31 December 1 December
2006 2005
Notes #'000 #'000
NET CASH FLOW FROM OPERATING ACTIVITIES 288 (1,089)
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Bank and other interest paid (4) (5)
TAXATION
UK corporation tax refunded 0 1
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Research and Development (190) (153)
Purchase of tangible fixed assets (61) (41)
-------- --------
NET CASH FLOW BEFORE FINANCING 33 (1,287)
FINANCING
Proceeds from the issue of shares 52 1,554
-------- --------
INCREASE IN CASH IN YEAR 85 267
======== ========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2006 2005
#'000 #'000
Movement in cash in year 85 267
Opening net funds 277 10
-------- --------
CLOSING NET FUNDS 362 277
NOTES
1 The financial information in this announcement does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985. Statutory accounts
for the previous financial year ended 31 December 2005 have been delivered to
the Registrar of Companies. The auditors' report on those accounts was
unqualified and did not contain any statement under section 237(2) or (3) of the
Companies Act 1985. The auditors have given an unqualified report on the
accounts for the year ended 31 December 2006, and did not contain any statement
under section 237(2) or (3) of the Companies Act 1985, on these statutory
accounts. Copies of the Company's Report and Accounts will be sent to
shareholders shortly and will be available at the registered office of the
company: Units 1 & 2, Heol Rhosyn, Dafen Park, Llanelli, Carmarthenshire, SA14
8QG.
2 The Group has no liability to UK corporation tax due to the availability of
brought forward tax losses.
3 RECONCILIATION OF SHAREHOLDERS' FUNDS AND STATEMENT OF MOVEMENT ON RESERVES
Share capital Merger Reserve Share premium Profit and Total
loss account
#'000 #'000 #'000 #'000 #'000
As at 1 January 2005 410 (302) 128 (304) (68)
Share option costs - - - 92 92
Profit for the year - restated - - - 129 129
Issue of shares 182 - 1,818 - 2,000
Share issue costs - - (446) - (446)
------ ------ ------ ------ ------
As at 31 December 2005 592 (302) 1,500 (83) 1,707
Share option costs - - - 95 95
Profit for the year - - - 493 493
Exercise of warrants 13 - 39 - 52
------ ------ ------ ------ -------
As at 31 December 2006 605 (302) 1,539 505 2,347
====== ====== ====== ====== =======
4 EARNINGS PER ORDINARY SHARE
The earnings per ordinary share has been calculated using the profit for the
year and the weighted average number of ordinary shares in issue during the year
as follows:
2006 2005
#'000 #'000
Profit for the year after taxation 493 129
========== ==========
No. No.
Basic weighted average of ordinary shares
of 1p each (comparatives adjusted for
share consolidation) 59,519,417 46,613,761
========== ==========
Basic earnings (pence per share) 0.83p 0.28p
========== ==========
Fully diluted earnings (pence per share) 0.75p 0.25p
========== ==========
The weighted average number of shares for the calculation of diluted earnings
per share at 31 December 2006 was 65,349,352 (2005: 51,194,857) reflecting the
unexercised share options and warrants in place.
5 IMPACT OF FRS 20 - SHARE-BASED PAYMENTS
In 2005 the Group accounted for share options under UITF 17. The cost of these
options, including the discount of any option price against the market value of
the options issued was spread over the vesting period of the options. From 1
January 2005 the Group has adopted FRS20 - 'share-based payments' whereby the
Group calculates the value of the option based upon the fair value at their
grant date. As a result of the adoption of FRS20 the results for the period
ended 31 December 2005 have been restated to reflect the fair value of share
options and share warrants issued but not vested at 1 January 2005.
6 CASH FLOWS
2006 2005
#'000 #'000
A Reconciliation of operating profit to net
cash flow from operating activities
Operating profit 497 133
Amortisation of negative goodwill (158) (310)
Depreciation 74 83
Movement in stock (26) (469)
Movement in debtors (348) (583)
Movement in creditors 154 (35)
Share option costs 95 92
--------------- ---------------
Net cash flow from operating activities 288 (1,089)
=============== ===============
2006 2005
#'000 #'000
B Analysis of change of net funds
Opening Cash at bank and in hand 277 10
Movement in Cash in year 85 267
--------------- ---------------
Closing Cash at bank and in hand 362 277
=============== ===============
7 The directors do not recommend the payment of a final dividend (2005: #nil).
This information is provided by RNS
The company news service from the London Stock Exchange
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