TIDMRVG
RNS Number : 3802E
Retroscreen Virology Group PLC
09 April 2014
For immediate release 07.00: 9 April 2014
RETROSCREEN VIROLOGY GROUP PLC
("Retroscreen" or the "Company" or the "Group")
AUDITED PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2013
Retroscreen Virology Group plc (AIM: RVG), the pioneer of hVIVO
human challenge models of disease, is pleased to announce its
audited preliminary results for the year ended 31 December
2013.
Financial Highlights
-- Revenue increased by 91% to GBP27.5m (2012: GBP14.4m);
-- Gross profit was GBP8.3m and gross profit margin 30.2% (2012:
gross profit GBP3.7m and gross profit margin 25.7%);
-- Loss before tax of GBP1.2 million (Year ended 31 December
2012: GBP0.4 million) as investment in broadening our capability
continues;
-- Profit for the year of GBP1.5 million (2012: profit of GBP0.5
million);
-- Successful fundraising completed in the year raising GBP25.5m
before expenses, from new and existing institutional investors;
-- Strong financial position with short-term deposits, cash and
cash equivalents at 31 December 2013 of GBP35.8 million (31
December 2012: GBP16.3 million);
Operational Highlights
-- Managed over 500 volunteers safely through quarantine studies
in the year;
-- Opened new volunteer screening centre in Manchester and
increased the number of
volunteers participating in studies by 210% year on year;
-- Conducted landmark "EMIT" flu transmission study and the
largest ever "RSV" viral challenge
study;
-- Successfully characterised new "HRV-16" virus for challenge
model studies;
-- Launched new branding and business structure for our hVIVO
human challenge model platform;
Commenting on today's results, Kym Denny, Chief Executive
Officer, said:
"I am pleased to report that 2013 was another great year for the
Group. It was a year in which we grew our revenues 91% to GBP27.5
million (2012: GBP14.4 million), increased our gross margin to
30.2% from 25.7% in 2012, completed a GBP25.5 million fundraise,
invested in broadening our capability and completed some tremendous
projects for our clients. Most excitingly, 2013 was a launchpad
year, paving the way for Retroscreen to enter its next phase of
growth: new diseases and new patient populations, for which 2014
promises to be a watershed year."
For further information please contact:
Retroscreen Virology Group plc +44 207 756 1300
Kym Denny (CEO)
Graham Yeatman (FD)
Numis Securities Limited +44 207 260 1000
Michael Meade / Freddie Barnfield (Nominated Adviser)
James Black / Michael Burke (Corporate Broking)
Notes to Editors:
Retroscreen Virology Group plc ("Retroscreen" or the "Company")
is a rapidly growing UK lifesciences company pioneering a
technology platform called hVIVO which uses human challenge models
of disease involving healthy volunteers to study new drugs and
investigate disease in a safe, controlled environment.
Retroscreen has established itself as the world leader in this
field through the provision of clinical research services to third
party study sponsors. To date, the Company has conducted 35
clinical studies, involving more than 1600 volunteers for a range
of leading industry, governmental and academic clients.
However, Retroscreen's hVIVO platform has a much wider
application in helping to understand illness because the Company
believes that the best way to understand human disease is by
studying it in humans, not laboratory models.
CHIEF EXECUTIVE OFFICER'S STATEMENT
A year in review
I am pleased to report that 2013 was another great year for the
Group. It was a year in which we grew our revenues 91% to GBP27.5
million (2012: GBP14.4 million), increased our gross margin to
30.2% from 25.7% in 2012, completed a GBP25.5 million fundraise
before expenses, invested in broadening our capability and
completed some tremendous projects for our clients. Most
excitingly, 2013 was a launchpad year, paving the way for
Retroscreen to enter its next phase of growth: new diseases and new
patient populations, for which 2014 promises to be a watershed
year.
In 2013 we decided we needed a way to describe what we do that
was as unique and as original as the pioneering work we undertook
every day. Thus, we introduced a new brand, hVIVO, to capture the
full spectrum of our platform and its utility beyond our existing
disease repertoire in 'flu, RSV and HRV (the "common cold"). hVIVO
underlines what we as a Group firmly believe: we are the next
evolutionary step in drug development - from in vitro (research in
labs) to in vivo (research in animal models) to hVIVO (research in
human models). The brand recognises the revolution of putting
humans at the heart of disease modelling, as denoted by the 'h' in
hVIVO.
To complement our new nomenclature, and to accommodate our
expanding medical and scientific capabilities, we restructured the
business into three divisions: hUMATICS, which is responsible for
volunteer recruitment as well as data management, hSITE, which
undertakes the challenge studies, and hLAB, which is responsible
for sample analysis ("bioanalytics"). These divisions are
underpinned by our general corporate and business services
functions.
In December 2012, we announced that Retroscreen had reached a
significant milestone in the Group's history: our 1,000th volunteer
inoculated since the model was first developed. Barely one year
later, in January 2014, we had inoculated an additional 500+
volunteers, effectively doing in one year half of what it had taken
us 25 years to achieve previously. Such a dramatic increase in our
inoculation numbers speaks volumes about how firmly industry has
embraced hVIVO as its research platform of choice, and we continue
to go from strength to strength in this area, with 34% more long
term leads in our sales pipeline than this time last year. Thus,
2013 was about scaling our capacity and capability to deliver both
client work and our internal R&D activities over the next few
years. We opened a temporary second quarantine unit at Bourn Hall
in Cambridgeshire, UK and for the first time, Retroscreen was able
to conduct simultaneous HCM engagements at two different quarantine
facilities. We also undertook the search for a permanent second
quarantine facility, which culminated in our recent announcement
that we have plans to open a cutting edge biomedical facility at
Chesterford Research Park near Cambridge, UK expected to be
operational in 2015.
This bespoke 42,000 square foot facility will house a 40
isolation bed quarantine unit and a suite of state of the art
laboratories. Bringing these capabilities together under one roof
will enable us to conduct clinical and fundamental research with a
continuous flow of data from bedside to bench. It will also give us
the additional capacity to leverage the new human disease models
which we are currently developing.
Working to our theme of expanded capabilities, in July 2013 we
opened a new volunteer screening centre in Manchester, UK to sit
alongside our existing UK screening centres in London and Ely,
Cambridgeshire. We benefited immediately from the additional
geographic reach in screening volunteers for our hVIVO studies and
increased the number of volunteers participating in studies by 210%
year on year.
Our increased capability translated into a year of strong client
delivery in which we initiated a range of studies for a multitude
of new customers with tremendous results. This included the
successful completion of the largest respiratory syncytial virus
("RSV") challenge study ever performed with an investigational
drug. Not only was this the RSV challenge study, but it was also
Retroscreen's largest Human Challenge Model ("HCM") study to date.
In the first half of 2013 we also had the honour of conducting the
largest and most definitive investigation into how flu is
transmitted, in collaboration with Nottingham University, UK and
via funding from the Centres for Disease Control and Prevention
("CDC") in the US.
We also ran a HCM validation study for our newly manufactured
HRV--16 cold virus, prior to its use in a study for a global
pharmaceutical client in the second half of 2013, and which will be
our flagship inoculum for our Airways Disease HCM ("AD-HCM"). We
now also have our new H3N2 ('Perth') influenza virus added to our
portfolio and this is ready for use by large pharmaceutical clients
during 2014.
New human models of disease
Having demonstrated how revolutionary our hVIVO human challenge
models of disease could be in the flu, cold and RSV space, we
turned our attention to related disease areas of high unmet medical
need and began mapping our strategy to go 'beyond flu' and develop
new HCMs that could help revolutionise the way we conduct research
as an industry. To that end, in July 2013, we raised an additional
GBP25.5 million before expenses from existing and new shareholders
to enable us to push forward with our ambitious plans to diversify
our platform into new disease areas and new patient populations, as
well as to build our bioanalytical capability.
Our first new hVIVO model will be our "Over 45" model, which
involves healthy adult volunteers over the age of forty five. It is
well documented that the immune system declines with age to the
extent that many very elderly patients are not adequately protected
by current vaccines putting them at serious risk. Furthermore, the
Over 45 model is a prerequisite to our planned COPD--HCM as
outlined below. We are currently preparing to launch this model,
with first subject first sample ("FSFS") slated for summer
2014.
The next new hVIVO model to come on line will be our first
AD-HCM, in asthma. It is estimated that approximately 80% of asthma
attacks ("exacerbations") are caused by seasonal respiratory
viruses, principally HRV16 and influenza. The AD-HCM Asthma concept
is that by inoculating mild asthmatic volunteers in our quarantine
facility, we can cause these patients to exacerbate in a safe,
controlled environment so that we can study these diseases and new
therapies to be tested in our hVIVO platform. After significant
consultation with key opinion leaders and regulatory authorities,
including a meeting with the FDA in March 2014, we are pleased to
announce that the FSFS for our AD--HCM asthma will be summer 2014,
followed by COPD in 2015. We are also actively evaluating the
opportunity and feasibility of developing a number of other new
disease models that we can exploit using our hVIVO platform.
Understanding human disease: unlocking hVIVO's potential
A key driver behind the building of Retroscreen's capability is
our ambition to unlock additional value from all our HCMs by using
them in a novel way, as tools to better understand the course of
and susceptibility to disease. By conducting HCMs without
investigational drug, we intend to study the mechanics of virus
induced disease and disease exacerbations to give a much better
understanding of disease pathways and how they differ between
patient types.
The precise ability to elicit, monitor and measure the
volunteer's response to a challenge agent, from start to finish,
will help us to gain a better understanding of the underlying
mechanisms in our target diseases. Using samples taken from our HCM
studies, we will gain insights at the molecular level which we
believe will lead to the development of better treatments and
diagnostics. To that end, 2013 saw us designing the IT
infrastructure and data analytical capability we would need to
harvest and mine our proprietary samples.
Retroscreen is about to launch an e--Source system that will
allow us to capture data from all subjects and we are collaborating
with Professor Yike Guo, Imperial College London, a world leading
expert in the development and implementation of bioinformatics
architecture. We also announced in March 2014 the GBP4.0 million
all--share acquisition of Activiomics Ltd, a start--up company with
a powerful proteomics technology called TIQUAS. This technology is
capable of revealing crucial differences in the protein content of
our study samples, enabling us to follow the course of the disease
and any impact of an investigational drug at the mechanistic
level.
Board changes
We also announced today a number of strategic changes to our
Board. Professor John Oxford, one of the founders of the Group, and
Duncan Peyton, who has represented the Northern Entrepreneurs Fund
on the Board since its investment in October 2009 through until
Retroscreen's IPO in May 2012, are both standing down from the
Board after making key contributions to the development of
Retroscreen Virology Group plc to date.
We have also announced our intention that Dr Trevor Nicholls, a
company director with an outstanding track record over 30 years of
building international businesses in the life science industry,
will be joining the Board. Trevor has valuable experience in the
genomics and proteomics field, including roles as the previous
Chairman of both Oxford Nanopore Technologies Limited and
Activiomics Limited, and as the current Chairman of Avacta Group
plc, which will be enormously helpful to Retroscreen as we continue
to grow and utilise our bioanalytical activities.
2014: the year of new models
After two consecutive years of exceptional growth, 2014 sees
Retroscreen wholeheartedly entering its next phase of growth as we
expand beyond our existing human models into new disease areas and
patient populations. Much of the last two years has been spent
preparing for this moment, spearheading industry adoption of our
hVIVO platform and building our capacity and capability to develop
new models and unlock the value of our proprietary samples whilst
delivering a great clinical service to our customers. The Group's
focus in 2014 thus shifts from building to doing: we are scheduled
to deliver FSFS on two new models this year, and will conduct, for
the first time, dedicated hVIVO projects to harvest proprietary
samples so that we can begin analysing them. I would like to thank
our staff and our investors for delivering Retroscreen to this
exciting juncture in the Group's journey, and I look forward to
updating you further as we progressively pioneer our hVIVO platform
in new and novel ways.
Kym Denny
Chief Executive Officer
8 April 2014
FINANCE DIRECTOR'S REPORT
The preliminary announcement for the year ended 31 December 2013
is presented in accordance with the Group's accounting policies
based on international Financial Reporting Standards ("IFRS") as
adopted by the European Union.
Consolidated statement of comprehensive income
Revenue for the year ended 31 December 2013 was GBP27.5 million
(2012: GBP14.4 million).
Gross profit was GBP8.3 million and gross profit margin 30.2%
(2012: gross profit GBP3.7 million and gross profit margin
25.7%).
Loss before taxation was GBP1.2 million (2012: GBP0.4
million).
Profit for the year was GBP1.5 million (2012: profit of GBP0.5
million).
Research and development expenses
The Group's separate independent research and development
expenses (excluding provision against virus inventory) were GBP1.2m
million this year (2012: GBP0.3 million), primarily in respect of
the Group investing in its research and development capability and
starting to evaluate the opportunity and feasibility for new hVIVO
human models of disease.
Research and development expenses also included a provision in
full of GBP1.3m (2012: GBPnil) against the carrying value of "Virus
- work in progress" relating to a virus to be used in the
development and commercialisation of new Human Challenge Models
("HCM"), where the new HCM models have not yet demonstrated
technically feasibility. This expense has been presented separately
as "Research and development expense - provision against virus
inventory" in the Consolidated Statement of Comprehensive
Income.
In addition, significant research and development was undertaken
as a natural consequence of operating and pioneering the HCM during
client HCM studies. These expenses are included within cost of
sales.
Administrative expenses
Administrative expenses were GBP7.3 million (2012: GBP3.9
million). The increase is primarily due to the Group's significant
growth, increasing staff cost base and expanding capability.
Finance income
The Group invests its surplus funds in bank deposits and money
market investments of up to one year. In the year ended 31 December
2013 interest receivable was GBP0.2 million (2012: GBP0.1 million).
The increase is due to the Group's increased cash balances,
primarily as a result of GBP25 million (net) raised via a placing
in June 2013.
Financial KPIs
2013 2012
------------------------------- --------- ---------
Revenue GBP27.5m GBP14.4m
------------------------------- --------- ---------
Gross profit GBP8.3m GBP3.7m
------------------------------- --------- ---------
Gross profit margin 30.2% 25.7%
------------------------------- --------- ---------
Research and development
(excluding provision against
virus inventory) GBP1.2m GBP0.3m
------------------------------- --------- ---------
Profit for the year GBP1.5m GBP0.5m
------------------------------- --------- ---------
Short-term deposits, cash
and cash equivalents GBP35.8m GBP16.3m
------------------------------- --------- ---------
Taxation
The Group makes claims each year for research and development
tax credits and, since it is loss-making, elects to surrender these
tax credits for a cash rebate. The amount credited to the
consolidated income statement in respect of amounts received and
receivable for the surrender of research and development
expenditure is GBP2.7 million for the year ended 31 December 2013
(2012: GBP1.0 million).
Consolidated statement of financial position
As at 31 December 2013 total assets less liabilities amounted to
GBP42.9 million (2012: GBP16.3 million) including short-term
deposits of GBP22.5m (2012: GBPnil) and cash and cash equivalents
of GBP13.3 million (2012: GBP16.3 million).
The principal movements in the consolidated statement of
financial position during the year were:
-- purchases of intangible assets of GBP1.1 million;
-- purchases of property, plant and equipment of GBP3.1 million;
-- increase in inventories of GBP1.5 million;
-- increase in research and development tax credit receivable of GBP1.4 million;
-- increase in trade and other receivables of GBP3.2million;
-- increase in cash on short-term deposit of GBP22.5 million;
-- decrease in cash and cash equivalents of GBP3.1 million; and
-- increase in trade and other payables of GBP1.6million.
Cash flow
The principal cash flows in the year were as follows:
Inflows:
-- cash outflow from operating activities of GBP2.2 million
(2012: cash inflow GBP2.1 million);
-- other payables received of GBP0.75 million (2012: GBPnil);
-- proceeds on issue of shares of GBP25.0 million (2012: GBP14.1 million); and
-- finance income of GBP0.2 million (2012: GBP0.1 million).
Outflows:
-- purchases of intangible assets of GBP1.1 million (2012: GBPnil);
-- purchases of property, plant and equipment of GBP3.1 million (2012: GBP1.2 million); and
-- other payables repaid of GBP0.05 million (2012: loans repaid of GBP0.4 million).
Key performance indicators
The Directors consider the principal financial performance
indicators of the Group to be:
-- revenue;
-- gross profit;
-- gross profit margin;
-- research and development;
-- net profit; and
-- cash on short-term deposit, cash and cash equivalents.
The Directors consider the principal non-financial performance
indicators of the Group to be:
-- the expansion of the HCM and its increasing acceptance by
global pharmaceutical companies and regulatory authorities;
-- organic growth and building of capability;
-- development of new human challenge models; and
-- research and development in other disease areas including asthma and COPD.
These elements are discussed within the Chief Executive
Officer's statement.
Graham Yeatman
Finance Director
8 April 2014
Retroscreen Virology Group plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2013
2013 2012
Note GBP'000 GBP'000
--------- ---------
Revenue 27,490 14,395
Cost of sales (19,177) (10,694)
Gross profit 8,313 3,701
Research and development expense (excluding
provision against virus inventory) (1,198) (307)
Research and development expense - provision
against virus inventory 3 (1,270) -
Administrative expense (7,253) (3,921)
Loss from operations (1,408) (527)
Finance income 226 111
Finance costs (11) (12)
------------------------------------------------------ ----- --------- ---------
Loss before taxation (1,193) (428)
Taxation 4 2,705 957
------------------------------------------------------ ----- --------- ---------
Profit for the year 1,512 529
----- ---------
Total comprehensive profit for the year attributable
to owners of the parent 1,512 529
------------------------------------------------------ ----- --------- ---------
Earnings per share - basic (pence) 5 3.2p 1.5p
Earnings per share - diluted (pence) 5 2.9p 1.4p
------------------------------------------------------ ----- --------- ---------
All results derive from continuing operations.
The Group has no recognised gains or losses other than profit
for the year.
Retroscreen Virology Groupplc
Consolidated Statement of Financial Position
As at 31 December 2013
2013 2012
Note GBP'000 GBP'000
------------------------------------- ----- -------- --------
Assets
Non-current assets
Intangible assets 6 1,079 -
Property, plant and equipment 7 3,667 1,377
4,746 1,377
------------------------------------- ----- -------- --------
Current assets
Inventories 8 3,116 1,613
Trade and other receivables 9 5,851 2,695
Research and development tax credit
receivable 2,425 1,075
Short term deposits 10 22,500 -
Cash and cash equivalents 11 13,310 16,338
-------- --------
47,202 21,721
-------- --------
Total assets 51,948 23,098
------------------------------------- ----- -------- --------
Equity and liabilities
Equity
Share capital 2,686 2,049
Share premium account 37,363 13,013
Share-based payment reserve 239 217
Merger reserve 4,199 4,199
Retained deficit (1,630) (3,142)
------------------------------------- ----- -------- --------
Total equity 42,857 16,336
------------------------------------- ----- -------- --------
Non-current liabilities
Other payables 13 625 -
Provisions 110 -
735 -
------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 12 8,356 6,762
------------------------------------- ----- -------- --------
8,356 6,762
------------------------------------- ----- -------- --------
Total liabilities 9,091 6,762
------------------------------------- ----- -------- --------
Total liabilities and equity 51,948 23,098
------------------------------------- ----- -------- --------
Retroscreen Virology Group plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2013
Share-
Share based
Share premium payment Merger Retained Total
capital account reserve reserve deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- -------- --------- --------
As at 1 January 2012 1,096 - 5 4,196 (3,671) 1,626
Proceeds from shares
issued:
Issued in subsidiary
undertakings 6 - - 3 - 9
Placing on admission
to AIM, net of related
expenses 947 13,177 - - - 14,124
----------------------------- -------- -------- -------- -------- --------- --------
Total transactions with
owners
in their capacity as
owners 953 13,177 - 3 - 14,133
Profit for the year - - - - 529 529
Share-based payment expense - - 48 - - 48
Warrants issued - (164) 164 - - -
----------------------------- -------- -------- -------- -------- --------- --------
As at 31 December 2012 2,049 13,013 217 4,199 (3,142) 16,336
Proceeds from shares
issued:
Placing net of related
expenses 637 24,350 - - - 24,987
----------------------------- -------- -------- -------- -------- --------- --------
Total transactions with
owners
in their capacity as
owners 637 24,350 - - - 24,987
Profit for the year - - - - 1,512 1,512
Share-based payment expense - - 22 - - 22
As at 31 December 2013 2,686 37,363 239 4,199 (1,630) 42,857
----------------------------- -------- -------- -------- -------- --------- --------
Retroscreen Virology Group plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2013
2013 2012
GBP'000 GBP'000
-------------------------------------------- --------- --------
Cash flow from operating activities
Loss before income tax (1,193) (428)
Adjustments for:
Depreciation of property, plant and
equipment 812 230
Amortisation of intangible assets 2 -
Loss on disposal of property, plant
and equipment - 2
Share-based payment expense 22 48
Finance costs 11 12
Finance income (226) (111)
Gain on foreign exchange (48) (16)
Changes in working capital:
Increase in provisions 110 -
Increase in inventories (1,503) (168)
(Increase)/decrease in trade and other
receivables (3,156) 192
Increase in trade and other payables 1,640 1,941
Cash (used in)/generated from operations (3,529) 1,702
Finance costs (11) (12)
Income tax refund 1,355 383
Net cash (used in)/generated from
operating activities (2,185) 2,073
Cash flows from Investing activities
Acquisition of intangible assets (1,081) -
Acquisition of property, plant and
equipment (3,102) (1,214)
Increase in balances on short-term (22,500) -
deposit
Finance income 105 111
--------- --------
Net cash used in investing activities (26,578) (1,103)
Cash flows from financing activities
Net proceeds from issue of shares 24,987 14,133
Cash flow from other payables 750 -
Other payables repaid (50) -
Loans repaid - (374)
Net cash generated from financing
activities 25,687 13,759
-------------------------------------------- --------- --------
Net (decrease)/increase in cash and
cash equivalents (3,076) 14,729
Exchange gain on cash and cash equivalents 48 16
Cash and cash equivalents at the start
of year 16,338 1,593
Cash and cash equivalents at the end
of year 13,310 16,338
-------------------------------------------- --------- --------
Notes to the accounts
1. Basis of the announcement
The audited preliminary results for the year ended 31 December
2013 were approved by the Board of Directors on 8 April 2014. The
preliminary results do not constitute full accounts within the
meaning of section 434 of the Companies Act 2006 but are derived
from accounts for the year ended 31 December 2013 and year ended 31
December 2012.
The preliminary announcement is prepared on the same basis as
set out in the statutory accounts for the year ended 31 December
2013. Those accounts upon which the auditors issued an unqualified
opinion, also had no statement under section 498(2) or (3) of the
Companies Act 2006.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards, as adopted by the European Union (EU) (IFRS), this
announcement does not in itself contain sufficient information to
comply with IFRS.
The Company is a limited liability company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange. The
consolidated financial information of Retroscreen Virology Group
plc is presented in pounds Sterling (GBP), which is also the
functional currency of the Group.
The statutory accounts for the financial year ended 31 December
2013 will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
Going concern
In determining the appropriate basis of preparing the financial
statements, the Directors are required to consider whether the
Company can continue in operational existence for the foreseeable
future, being a period of not less than twelve months from the date
of the approval of the financial statements. During the year ended
31 December 2013, the Group has continued to focus on building
solid foundations for significant revenue growth and a strong
pipeline of HCM client engagements. As at 31 December 2013 the
Group had short-term deposits, cash and cash equivalents of GBP35.8
million (2012: GBP16.3 million) and net current assets of GBP38.8
million (2012: GBP15.0 million).
Management prepares detailed working capital forecasts which are
reviewed by the Board on a regular basis. The forecasts include
assumptions regarding the status of client engagements and sales
pipeline, future revenues and costs together with various scenarios
which reflect growth plans, opportunities, risks and mitigating
actions. Whilst there are inherent uncertainties regarding the cash
flows associated with the development of the HCM, together with the
timing of signature and delivery of HCM client engagements, the
Directors are satisfied that there is sufficient discretion and
control as to the timing and quantum of cash outflows to ensure
that the Company and Group are able to meet their liabilities as
they fall due for at least the next twelve months.
As part of its going concern review the Board has followed the
guidelines published by the Financial Reporting Council entitled
"Going Concern and Liquidity Risk Guidance for UK Companies 2009".
Having made relevant and appropriate enquiries, including
consideration of the Company's and Group's current cash resources
and the working capital forecasts, the Directors have a reasonable
expectation that the Company and Group will have adequate cash
resources to continue to meet the requirements of the business for
at least the next twelve months. Accordingly, the Board continues
to adopt the going concern basis in preparing the financial
statements.
2. Segmental information
The Group's Chief Operating Decision Maker, the Chief Executive
Officer, is responsible for resource allocation and the assessment
of performance. In the performance of this role, the Chief
Executive Officer reviews the Group's activities, in the aggregate.
The Group has therefore determined that it has only one reportable
segment under IFRS 8, Operating Segments, which is "medical and
scientific research services".
The Group carries out all its activities from the United
Kingdom.
During the year ended 31 December 2013 the Group had five
customers who generated revenues greater than 10% of total revenue.
These customers respectively generated 24%, 20%, 17%, 15% and 13%
of revenue. During the year ended 31 December 2012 the Group had
three customers who generated revenues greater than 10% of total
revenue. These customers respectively generated 54%, 26% and 12% of
revenue.
3. Provision against virus inventory
Following a review of the virus inventory valuations as at 31
December 2013, a provision in full of GBP1.3m (2012: GBPnil)
against the carrying value of "Virus - work in progress" has been
recognised relating to a virus to be used in the development and
commercialisation of new HCM models, where the new HCM models have
not yet demonstrated technically feasibility.
A further provision of GBP301,000 against the carrying value of
"Virus - finished goods" has been recognised due to management's
assessment that the carrying values exceeded the net realisable
values of such inventories resulting from changes in forecasted
usage. This expense is recorded within cost of sales.
4. Taxation
Year ended Year ended
31 December 31 December
2013 2012
GBP'000 GBP'000
---------------------------------------------------- -------------- --------------
Current tax:
Current year research and development
tax credit (2,425) (947)
Adjustments in respect of previous
periods (280) (10)
---------------------------------------------------- -------------- --------------
Income tax credit (2,705) (957)
---------------------------------------------------- -------------- --------------
Factors affecting the tax charge
for the period:
The income tax credit for the year differs from the theoretical amount that
would arise by applying the UK corporation tax rate of 23.25% (2012: 24.55%),
as explained below:
Loss before taxation (1,193) (428)
---------------------------------------------------- -------------- --------------
Tax at the UK corporation tax rate
of 23.25% (2012: 24.5%) (277) (104)
Expenses not deductible in determining
taxable profit 18 91
Fixed asset timing differences not
recognised (779) 3
Current year research and development
tax credit (1,425) (947)
Movement in unrecognised deferred
tax asset - 10
Temporary timing differences not
recognised 38 -
Adjustments in respect of prior
periods (280) (10)
---------------------------------------------------- -------------- --------------
Income tax credit (2,705) (957)
---------------------------------------------------- -------------- --------------
As at 31 December 2013, the Group had unrecognised deferred tax
assets of GBP2.0 million (2012: GBP0.57m) which primarily relates
to losses. The Group has not recognised this as an asset in the
consolidated statement of financial position due to the uncertainty
of recovery.
5. Earnings per share
Basic earnings per share is calculated by dividing profit for
the year by the weighted average number of ordinary shares in issue
during the year. Diluted EPS is computed based on the weighted
average number of ordinary shares plus the effect of dilutive
potential ordinary shares outstanding during the period based on
the number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
company's shares) based on the monetary value of the subscription
rights attached to outstanding share options and warrants. Dilutive
potential ordinary shares include share options and warrants.
The calculation of the basic and diluted EPS is based on the
following data:
31 December 31 December
2013 2012
GBP'000 GBP'000
---------------------------------- ------------ -----------
Earnings
Profit for the year 1,512 529
---------------------------------- ------------ -----------
Number of shares
Weighted average number of
ordinary shares for the purposes
of basic EPS 47,963,221 34,580,451
Effect of dilutive potential
ordinary shares:
- share options 3,744,509 3,582,103
- warrants 143,449 56,596
---------------------------------- ------------ -----------
Weighted average number of
ordinary shares for the purposes
of diluted EPS 51,851,179 38,219,150
---------------------------------- ------------ -----------
6. Intangibles
31 December 31 December
2013 2012
GBP'000 GBP'000
----------------------------------- ----------- -----------
At 1 January - -
Additions at cost - Software 1,081 -
Amortisation - charge for the year (2) -
----------------------------------- ----------- -----------
At 31 December 1,079 -
----------------------------------- ----------- -----------
Intangible assets comprise software acquired and capitalised
during the year.
7. Property, plant and equipment
Leasehold Plant Computer
and
improvements machinery equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------------ --------- --------- -------
Cost:
At 1 January 2012 239 499 129 867
Additions 479 503 232 1,214
Disposals - (106) (2) (108)
-------------------------- ------------ --------- --------- -------
At 31 December 2012 718 896 359 1,973
Additions 974 1,617 511 3,102
At 31 December 2013 1,692 2,513 870 5,075
-------------------------- ------------ --------- --------- -------
Accumulated depreciation:
At 1 January 2012 40 351 81 472
Charge for the year 65 109 56 230
Disposals - (105) (1) (106)
-------------------------- ------------ --------- --------- -------
At 31 December 2012 105 355 136 596
Charge for the year 277 356 179 812
At 31 December 2013 382 711 315 1,408
-------------------------- ------------ --------- --------- -------
Carrying amount:
At 1 January 2012 199 148 48 395
-------------------------- ------------ --------- --------- -------
At 31 December 2012 613 541 223 1,377
-------------------------- ------------ --------- --------- -------
At 31 December 2013 1,310 1,802 555 3,667
-------------------------- ------------ --------- --------- -------
8. Inventories
31 December 31 December
2013 2012
GBP'000 GBP'000
------------------------------------ ----------- -----------
Laboratory and clinical consumables 104 89
Virus - finished goods 2,527 1,122
Virus - work in progress 485 402
------------------------------------ ----------- -----------
3,116 1,613
------------------------------------ ----------- -----------
Inventories expensed in the consolidated statement of
comprehensive income are shown within cost of sales. All
inventories are carried at the lower of cost and net realisable
value. In the year to 31 December 2013 inventories with a carrying
value of GBP70,000 were written off (31 December 2012: GBP352,000)
and this expense is recognised in cost of sales.
A provision of GBP301,000 (2002: GBPnil) against the carrying
value of "Virus - finished goods" has been recognised due to
management's assessment that the carrying values exceeded the net
realisable values of such inventories resulting from changes in
forecasted usage. This expense is recorded within cost of
sales.
Following a review of the virus inventory valuations as at 31
December 2013, a provision in full of GBP1,270,000 (2012:GBPnil)
against the carrying value of "Virus - work in progress" has been
recognised relating to a virus to be used commercially in HCM
models where the HCM model has not yet demonstrated technically
feasibility. This expense is recorded within research and
development expense and has been presented separately on the
Consolidated Statement of Comprehensive Income.
9. Trade and other receivables
31 December 31 December
2013 2012
GBP'000 GBP'000
------------------ ----------- -----------
Trade receivables 3,511 633
VAT recoverable 585 223
Other receivables 604 346
Prepayments 769 409
Accrued income 382 1,084
5,851 2,695
------------------ ----------- -----------
10. Short-term deposits
31 December 31 December
2013 2012
GBP'000 GBP'000
-------------------- ----------- -----------
Short term deposits 22,500 -
-------------------- ----------- -----------
Balances held on short term deposit have maturity dates between
six and twelve months from the point of investment.
11. Cash and cash equivalents
31 December 31 December
2013 2012
GBP'000 GBP'000
------------------------- ----------- -----------
Cash at bank and in hand 13,310 16,338
------------------------- ----------- -----------
12. Trade and other payables
31 December 31 December
2013 2012
GBP'000 GBP'000
-------------------------------- ----------- -----------
Trade payables 2,083 1,690
Other taxes and social security 490 305
Other payables 186 22
Accruals 2,705 1,102
Deferred income 2,892 3,643
8,356 6,762
-------------------------------- ----------- -----------
13. Other payables
31 December 31 December
2013 2012
GBP'000 GBP'000
-------------------------------------- ----------- -----------
Amounts to be settled beyond one year 625 -
-------------------------------------- ----------- -----------
625 -
-------------------------------------- ----------- -----------
On 11 March 2013, the Group signed an Agreement for Lease with
Queen Mary BioEnterprises Limited to develop the 3rd floor of the
QMB Innovation Centre with a five year term and an option to extend
for another five years. As part of the agreement, QMB offered a
lease incentive to advance the Group an interest--free loan of
GBP750,000 to develop the 3rd floor, with GBP75,000 per annum
repayable over a ten--year period. The lease incentive is
recognised as a liability. In the event the Group does not exercise
its option to extend the lease agreement for another five years,
the remaining unpaid principal of the advance (GBP375,000) must be
repaid at the end of the five-year contractual lease term.
14. Post Balance Sheet Event
On 4 March 2014, the Company announced the acquisition of
Activiomics Limited ("Activiomics") for a total consideration of up
to GBP4.0 million in new ordinary shares of 5 pence each in the
Company ("Ordinary Shares"). Activiomics is a private UK based
proteomics company founded in 2010 and spun out of Barts and the
London Medical School, part of Queen Mary University of London.
Activiomics has a powerful technology for protein identification
which will help enable Retroscreen to mine its biological samples
for novel insights into target diseases.
The GBP4.0 million consideration is for the entire issued share
capital of Activiomics (on a fully diluted basis including all
outstanding options), split between a GBP3.08 million initial
consideration payable on the date of the transaction and GBP0.71
million of contingent consideration payable on the first
anniversary of the date of transaction subject to the satisfaction
of certain conditions and warranties. Activiomics option holders
will roll over their options into Retroscreen options on similar
terms, with options valued at GBP171k in respect of the initial
consideration and GBP40k in respect of the contingent
consideration. Due to the timing of the acquisition the accounting
for the acquisition has not yet been finalised.
The initial consideration was satisfied by the issue of 996,901
Ordinary shares in the Company. Following admission of the new
shares to trading on AIM, Retroscreen's total number of Ordinary
Shares with voting rights in issue was 54,723,821.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QKFDNCBKDAQK
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