TIDMVENN
RNS Number : 3584H
Venn Life Sciences Holdings PLC
16 May 2014
Venn Life Sciences Holdings Plc
("Venn" or the "Company" or the "Group")
Final results for the year ended 31 December 2013
Venn Life Sciences (AIM: VENN), A growing Clinical Research
Organisation (CRO) providing clinical trial management solutions
and resourcing solutions to pharmaceutical, biotechnology and
medical device clients, announces its audited final results for the
year ended 31 December 2013.
Financial Highlights
-- Revenue of EUR2.04m (2012 - EUR2.68m)
-- EBITDA loss (before exceptional items) of EUR1.65m (2012 - EUR0.53m)
- Continued Investment in geographic capability, strategic
business development and innovation acquisition screening
-- Loss for the year of EUR1.8 (2012 - EUR1.17m)
-- Cash and cash equivalents of EUR0.54m (2012 - EUR2.88m)
Operational Highlights
-- Acquisition of Clinical Research operations in UK , Germany
and commencement of operations in Russia facilitating Enterprise
Level contract wins
-- Significantly stronger deal pipeline in excess of EUR11m inc.
3 multi-country Enterprise Level contracts (each over EUR1.5m)
-- Letters of Intent signed on two further European CRO
acquisitions and commencement of formal due diligence
-- Launch of innovation division innoVenn, facilitating
Intellectual Property acquisition and or co-development
-- Acquisition of the trading assets and associated Intellectual
Property rights of Evocutis PLC
Post Period End
-- Continued increase in proposals pipeline to more than EUR12m
- including an additional Enterprise contract
-- Enterprise level contract signed today worth in excess in EUR3m (see separate announcement)
-- Labskin technology development, manufacturing and customer
engagement reactivated - sales expected later this year
-- Commencement of due diligence on one further potential CRO acquisition
-- Raised GBP1m in placing to support recent innoVenn initiatives
Commenting on the Group's outlook, David Evans, Non-Executive
Chairman of Venn, said:
"Venn is continuing to make strong progress, both organically
and via suitable acquisition, on its strategy of becoming a leading
mid-sized agile European CRO with an acknowledged expertise in
managing complex multi-country clinical trials. Venn's clear 2013
focus has been on building this type of capability in terms of
geographic input, operating procedures and personnel and management
experience and expertise.
"I am particularly encouraged by the significant progress in the
scale and quality of our deal flow pipeline, where we are now
seeing four Enterprise Level potential deals (multi country deals
each in excess of EUR1.5m) in our approved contract pipeline. We
are very pleased to announce that the largest of these 4 contracts
was signed today. In addition, our commitment to acquiring or
co-developing suitable innovative technology platforms via
innoVenn, our dedicated innovation division, has borne fruit in the
form of the completed acquisition of the intellectual property
rights of Evocutis PLC."
Enquiries:
Venn Life Sciences Holdings Plc www.vennlifesciences.com
David Evans, Non-Executive Chairman Tel: +44 (0)7740 084 452
Tony Richardson, Chief Executive Officer Tel: +353 154 99 341
Zeus Capital (Nominated Adviser and
Broker)
Ross Andrews/Andrew Jones(Corporate Tel: +44 (0)161 831 1512
Finance)
Dominic Wilson (Institutional Sales) Tel: +44 (0)20 7533 7727
Walbrook PR Ltd Tel: +44 (0)20 7933 8780 or venn@walbrookpr.com
Paul McManus Mob: +44 (0)7980 541 893
Lianne Cawthorne Mob: +44 (0)7584 391 303
About Venn Life Sciences Limited:
Venn Life Sciences is a Clinical Research Organisation providing
clinical trial management solutions and resourcing solutions to
pharmaceutical, biotechnology and medical device organisations.
With dedicated operations in France, Germany, the Netherlands, the
UK and Ireland and Europe wide representation - Venn specialises in
rapid deployment and management of multisite projects. Venn
recently established an innovation division - InnoVenn - focused
primarily on breakthrough development opportunities in Skin
Science.
Chairman's Statement
Dear Fellow Shareholder,
2013 has been a transformative year for Venn both in terms of
investment, acquisition and overall capability upgrade. Last year
the board re-stated its commitment to delivering shareholder value
throughout the development and growth of the core CRO business, and
additional value through smart participation in successful medical
technologies. Significant progress has been made on both of these
fronts.
Upgrading the Clinical Trials Business
Following the listing of the company's shares in December 2012
management embarked on its plan to evolve Venn from a small
regional clinical trials business, offering local single country
support services, to an international Clinical Services support
business with full multi-centred capability.
A key indicator of progress towards the achievement of this goal
is, in the first instance, the extent to which the profile of the
Clinical Trials business development pipeline has changed. We have
now seen a consistent increase in total value terms, and a notable
shift to what we categorise as Enterprise level deals - each more
than EUR1.5m in value and all involving multiple countries. During
2013 we saw the emergence of the first of these deals and the
latest pipeline features four Enterprise level multi-site
contracts, one of which has been signed today
Positioning the business so that we can compete at this level
has required a considerable investment during 2013 across all areas
of the business including business development, systems
infrastructure, quality and training. The emergence of these
significantly higher value, higher tenure proposals within our
qualified deal pipeline is clear evidence that this investment is
beginning to pay off.
The existence of an integrated multi-country service capability
is another essential ingredient critical to being invited to tender
for Enterprise level contracts especially within the European
marketplace. To address this opportunity, during 2013 Venn acquired
two CRO's, one in Germany and one in Northern Ireland. The addition
of these locations, coupled with the development of capabilities in
Russia has opened a much greater market opportunity for Venn.
It is our intention to continue this international capability
expansion through further strategic acquisitions and suitable
partnerships in 2014. Efficiently and effectively integrating these
additional geographies into a seamless and agile Venn Clinical
Services Network remains a clear on-going management focus.
Technology Acquisition and Development
In addition to the international expansion of our core Clinical
Services capabilities, Venn is committed to generating shareholder
value through the acceleration to market of carefully selected
developed life science technologies.
2013 was a year in which we screened and evaluated a number of
prospective opportunities and importantly the full cost of this
assessment has been booked to P&L during the period. We were
pleased to announce in February our first technology initiative,
the acquisition of certain assets and the associated Intellectual
Property of Evocutis PLC. In the two months since acquisition
considerable progress has been made towards re-activation of one of
these assets - Labskin: a breakthrough skin substitute technology
for skincare testing - in terms of manufacture and re-engagement
with the customer base. We have re-located development and
production to a new facility, engaged the necessary technology
development expertise and expect to generate our first revenues
from Labskin later this year.
Looking Forward
Overall considerable progress has been made during the company's
first year as a public company. The core Clinical Services business
capability to win higher value, higher tenure contracts have been
elevated through investing in a significant upgrade in expertise,
processes and wider European footprint. Foundations have been laid
for the addition of strong intellectual property to the asset base
of the business and a move for our development services business
into a higher value arena.
The conversion of the Enterprise value deal announced today and
plus others that hope to complete should provide a solid platform
for accelerated services revenue growth and the commencement of
first technology revenues via the start of sales of the Labskin
offering will mark another key milestone for Venn.
The board looks forward to a transformative second half of the
year in 2014 with significant gains in revenue in the core Clinical
Services business as we seek to achieve a critical mass of revenue.
Additionally we anticipate initial technology driven revenues in
the second six months and further value-enhancing deals being
consummated.
David Evans
Executive Chairman
Chief Executive's Review
Our efforts in 2013 have been focused on transforming the
infrastructure and capabilities of our business and transitioning
it to a place where we can genuinely compete with a compelling and
differentiated offer in a market that has become increasingly
internationalised.
Critically we completed two Clinical Services acquisitions in
December 2013, the financial benefits of which we will see in 2014
and beyond. The addition of these new locations has enhanced our
ability to credibly respond to multi-country tenders, which by
their very nature are significantly higher value proposals than
Venn has seen historically and where we expect a further growth in
demand.
We classify these higher value (more than EUR1.5m), higher
tenure, multi-country contracts as Enterprise level proposals and
our 2013 and on-going focus is on building a pipeline of such
Enterprise deals. We have been very pleased to announce the signing
of such a deal today, details of which are contained within a
separate announcement.
It is encouraging to note that a number of our current
Enterprise level proposals are as a direct result of the expansion
through acquisition into new territories. It is our intention
during 2014 to complete further geographic and capability expansion
through M&A and we are currently conducting diligence on
specific opportunities.
In addition to improvements in our service offering we have
successfully leveraged our network and core-skills within our
group, to secure our first technology initiative and develop a
pipeline of follow-on opportunities. I believe through the
acquisition of the Labskin technology platform in particular and
additional skin science, we have enhanced the asset base of our
business in a very capital efficient manner. We expect first
revenue flows from Labskin later this year.
Results and Commentary
Service fee income for the full year amounted to EUR2.04m (2012
- EUR2.68m) and the reported EBITDA loss (before exceptional items)
was EUR1.65m (2012 - EUR0.53m). The consolidated Balance Sheet as
at 31 December 2013 had total assets of EUR2.37m, EUR0.54m of which
was represented by cash and cash equivalents.
Key areas of activity contributing to the loss for the year
include: external acquisition transaction costs, internal M&A
team costs, screening technology opportunities, significant
investment in Enterprise level business development, systems and
infrastructure. Investments made during the year were consistent
with commitments made to shareholders on admission to the market.
The results for 2013 include the costs associated with two
acquisitions, completed in December. 2014 will see the benefit of
the contribution from these acquired entities.
Encouragingly our first multi- country Enterprise level tender
proposal was executed in 2013 and we have added another three
Enterprise level proposals in the first half of 2014 with total
Enterprise level proposals now accounting for 60% of our
pipeline.
Plans and Outlook
The clinical research and development markets remain buoyant,
underpinned by committed Pharma spending and a more vibrant
biotechnology scene driven largely by better access to capital. We
believe that investments made during 2013 leave us well positioned
to benefit from this.
Management priorities remain both on the on-going build of a
strong deal-flow pipeline featuring at least 50% of target revenue
at the Enterprise level as well as the conversion of Enterprise
level deals already in the pipeline.
We expect to complete further acquisition activity in 2014
ideally focussing on more transformational transactions that bring
multiple geographies. We have solid evidence from our initial
transactions of a strong correlation between geographical coverage
and requests for proposals. We have letters of intent signed and
due diligence ongoing on three acquisition opportunities.
Anthony Richardson
Chief Executive Officer
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2013
2013 2012
Notes EUR'000 EUR'000
--------------------------------------- ------ -------- --------
Continuing operations
Revenue 2 2,035 2,680
Administrative expenses 3 (3,829) (3,804)
Operating loss (1,794) (1,124)
-------- --------
Depreciation and amortisation (32) (43)
Exceptional items 3 (117) (556)
EBITDA before exceptional items 2 (1,645) (525)
-------- --------
Finance income 4 12 3
Finance costs 4 (41) (29)
--------------------------------------- ------ -------- --------
Loss before income tax (1,823) (1,150)
Income tax charge 5 23 (22)
--------------------------------------- ------ -------- --------
Loss for the year (1,800) (1,172)
Currency translation differences (8) -
Total comprehensive loss for the year (1,808) (1,172)
--------------------------------------- ------ -------- --------
Loss per ordinary share 6 EUR EUR
Basic and diluted (0.09) (0.12)
--------------------------------------- ------ -------- --------
Consolidated Statement of Financial Position
As at 31 December 2013
2013 2012
Notes EUR'000 EUR'000
------------------------------- ------- -------- --------
Assets
Non-current assets
Property, plant and equipment 53 47
Intangible assets 7 1,039 836
Investments 31 31
Total non-current assets 1,123 914
------------------------------- ------- -------- --------
Current assets
Trade and other receivables 656 593
Income tax recoverable 52 14
Cash and cash equivalents 541 2,876
------------------------------- ------- -------- --------
Total current assets 1,249 3,483
------------------------------- ------- -------- --------
Total assets 2,372 4,397
------------------------------- ------- -------- --------
Equity attributable to owners
Share capital 102 102
Share premium account 3,431 3,431
Group re-organisation reserve (541) (541)
Reverse acquisition reserve 45 45
Foreign currency reserves (8) -
Retained earnings (2,308) (508)
------------------------------- ------- -------- --------
Total equity 721 2,529
------------------------------- ------- -------- --------
Liabilities
Non-current liabilities
Deferred consideration 54 -
Borrowings - 297
Total non-current liabilities 54 297
------------------------------- ------- -------- --------
Current liabilities
Trade and other payables 1,178 1,212
Deferred taxation 17 6
Deferred consideration 77 -
Borrowings 325 353
Total current liabilities 1,597 1,571
------------------------------- ------- -------- --------
Total liabilities 1,651 1,868
------------------------------- ------- -------- --------
Total equity and liabilities 2,372 4,397
------------------------------- ------- -------- --------
Consolidated Statement of Cash Flows
For the year ended 31 December 2013
2013 2012
Notes EUR'000 EUR'000
Cash Flow from operating activities
Cash used in operations 8 (1,804) (793)
Interest paid (39) (29)
Income tax paid (16) (17)
------------------------------------------------------ ------ -------- --------
Net cash used in operating activities (1,859) (839)
------------------------------------------------------ ------ -------- --------
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired (54) 436
Purchase of property, plant and equipment (PPE) (31) (18)
Proceeds from sale of PPE - 5
Proceeds from sale of investments - 31
Interest received 12 3
------------------------------------------------------ ------ -------- --------
Net cash (used in)/generated by investing activities (73) 457
------------------------------------------------------ ------ -------- --------
Cash flow from financing activities
Proceeds from issuance of ordinary shares - 2,777
New bank loans - 381
Repayments on borrowings (362) (19)
Net cash (used in)/generated by financing activities (362) 3,139
------------------------------------------------------ ------ -------- --------
Net (decrease)/increase in cash and cash equivalents (2,294) 2,757
Cash and cash equivalents at beginning of year 2,588 (169)
Exchange losses on cash and cash equivalents (78) -
------------------------------------------------------ ------ -------- --------
Cash and cash equivalents at end of year 216 2,588
------------------------------------------------------ ------ -------- --------
Consolidated Statement of Changes in Shareholders' Equity
Group Reverse Foreign
Share re-organisation acquisition currency Retained
Share capital premium reserve reserve reserve earnings Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------- -------------- --------- ---------------- --------------- --------------- ----------- --------
At 1 January
2012 2 - (541) - - 664 125
---------------- -------------- --------- ---------------- --------------- --------------- ----------- --------
Changes in
equity for the
year ended
31 December
2011
Total
comprehensive
loss for the
year - - - - - (1,172) (1,172)
Share capital
and share
premium as
recognised as
reverse
acquisition 90 664 - 45 - - 799
Proceeds from
share issue
(net of
expenses) 10 2,767 - - - - 2,777
---------------- -------------- --------- ---------------- --------------- --------------- ----------- --------
At 31 December
2012 102 3,431 (541) 45 - (508) 2,529
---------------- -------------- --------- ---------------- --------------- --------------- ----------- --------
Changes in
equity for the
year ended
31 December
2013
Loss for the
year - - - - - (1,800) (1,800)
Currency
translation
differences - - - - (8) - (8)
---------------- -------------- --------- ---------------- --------------- --------------- ----------- --------
Total
comprehensive
loss for the
year - - - - (8) (1,800) (1,808)
At 31 December
2013 102 3,431 (541) 45 (8) (2,308) 721
---------------- -------------- --------- ---------------- --------------- --------------- ----------- --------
Notes to the final results
1. Basis of preparation
Venn Life Sciences Holdings Plc is a company incorporated in
England and Wales. The Company is a public limited company listed
on the AIM market of the London Stock Exchange. The address of the
registered office is 4 Lombard Street, London, EC3V 9HD.
This preliminary announcement is an extract from the
consolidated financial statements of the Company for the year ended
31 December 2013 and comprises the Company and its subsidiaries.
The consolidated financial statements were authorised for issuance
on 16 May 2014. The financial information set out below does not
constitute the Company's statutory accounts for the years ended 31
December 2013 or 2012 within the meaning of Section 434 of the
Companies Act 2006, but is derived from those accounts. Statutory
accounts for 2012 which were of the parent company only have been
delivered to the Registrar of Companies and those for 2013 will be
delivered soon before Companies House deadline. The auditors'
reports on the statutory accounts for the years ended 31 December
2012 and 31 December 2013 were unqualified and do not contain
statements under s498(2) or (3) Companies Act 2006.
This financial information has been prepared in accordance with
the Group's accounting policies as disclosed in the financial
statements for the year ended 31 December 2012 and International
Financial Reporting Standards ("IFRSs") and International Financial
Reporting Interpretations Committee (IFRIC) interpretations as
adopted by the European Union and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
Certain statements in this announcement constitute
forward-looking statements. Any statement in this announcement that
is not a statement of historical fact including, without
limitation, those regarding the Company's future expectations,
operations, financial performance, financial condition and business
is a forward-looking statement. Such forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, amongst
other factors, changing economic, financial, business or other
market conditions. These and other factors could adversely affect
the outcome and financial effects of the plans and events described
in this announcement and the Company undertakes no obligation to
update its view of such risks and uncertainties or to update the
forward-looking statements contained herein. Nothing in this
announcement should be construed as a profit forecast.
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 (IFRSs), this announcement does not itself contain
sufficient information to comply with IFRSs. The Company will
publish its full financial statements for the year ended 31
December 2013 shortly and will be available on the Company's
website at www.vennlifesciences.com and at the Company's head
office 19 Railway Road, Dalkey, Dublin, Ireland. The Annual General
Meeting will be held on Tuesday 24 June 2014.
2. Segmental reporting
Management has determined the Group's operating segments based
on the monthly management reports presented to the Chief Operating
Decision Maker ('CODM'). The CODM is the Executive Directors and
the monthly management reports are used by the Group to make
strategic decisions and allocate resources.
The principal activity of the Group is that of a Clinical
Research Organisation (CRO) providing a suite of consulting and
clinical trial services to pharmaceutical, biotechnology and
medical device organisations. This activity takes place across
various countries, including France, Netherlands, United Kingdom,
Ireland, and Russia and as such the Board considers the business
primarily from a geographic perspective. Although not all the
segments meet the quantitative thresholds required by IFRS 8,
management has concluded that given the recent acquisitions, all
segments should be maintained and reported, given the potential
future growth of the segments.
The reportable segments derive their revenue primarily from the
Group's principal activity.
Currently the key operating performance measures used by the
CODM are Revenue and adjusted EBITDA.
The segment information provided to the Board for the reportable
segments for the year ended 31 December 2013 is as follows:
2013 France Netherlands Other Total
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------------- -------- ------------ -------- --------
Income statement
External revenue 1,027 899 109 2,035
---------------------------------- -------- ------------ -------- --------
Adjusted EBITDA* (16) (102) (1,527) (1,645)
Exceptional costs - - (117) (117)
EBITDA (16) (102) (1,644) (1,762)
Depreciation (3) (8) (21) (32)
---------------------------------- -------- ------------ -------- --------
Operating profit (19) (110) (1,665) (1,794)
Net finance costs (13) - (16) (29)
Income tax - 23 - 23
Retained loss (32) (87) (1,681) (1,800)
---------------------------------- -------- ------------ -------- --------
Segment assets
Operating assets 1,184 554 4,179 5,917
Inter segment assets (241) (322) (3,523) (4,086)
---------------------------------- -------- ------------ -------- --------
External operating assets 943 232 656 1,831
Cash and cash equivalents - 33 508 541
---------------------------------- -------- ------------ -------- --------
Total assets 943 265 1,164 2,372
---------------------------------- -------- ------------ -------- --------
Segment liabilities
Operating liabilities 661 225 4,526 5,412
Inter segment liabilities (275) - (3,811) (4,086)
---------------------------------- -------- ------------ -------- --------
External operating liabilities 386 225 715 1,326
Borrowings 48 - 277 325
---------------------------------- -------- ------------ -------- --------
Total liabilities 434 225 992 1,651
---------------------------------- -------- ------------ -------- --------
Other segmental information
Non current assets - PPE 4 13 36 53
Non current assets - Intangibles 731 105 203 1,039
---------------------------------- -------- ------------ -------- --------
2012 France Netherlands Other Total
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------------- -------- ------------ -------- --------
Income statement
External revenue 1,621 1,059 - 2,680
---------------------------------- -------- ------------ -------- --------
Adjusted EBITDA* (87) 148 (586) (525)
Exceptional costs (74) (13) (469) (556)
EBITDA (161) 135 (1,055) (1,081)
Depreciation (6) (17) (20) (43)
---------------------------------- -------- ------------ -------- --------
Operating profit/(loss) (167) 118 (1,075) (1,124)
Net finance costs (3) 3 (26) (26)
Income tax - (22) - (22)
Retained profit/(loss) (170) 99 (1,101) (1,172)
---------------------------------- -------- ------------ -------- --------
Segment assets
Operating assets 1,151 595 266 2,012
Inter segment assets (141) (233) (117) (491)
---------------------------------- -------- ------------ -------- --------
External operating assets 1,010 362 149 1,521
Cash and cash equivalents - 106 2,770 2,876
---------------------------------- -------- ------------ -------- --------
Total assets 1,010 468 2,919 4,397
---------------------------------- -------- ------------ -------- --------
Segment liabilities
Operating liabilities 554 178 977 1,709
Inter segment liabilities (117) - (374) (491)
---------------------------------- -------- ------------ -------- --------
External operating liabilities 437 178 603 1,218
Borrowings 90 - 560 650
---------------------------------- -------- ------------ -------- --------
Total liabilities 527 178 1,163 1,868
---------------------------------- -------- ------------ -------- --------
Other segmental information
Non current assets - PPE 7 21 19 47
Non current assets - Intangibles 731 105 - 836
---------------------------------- -------- ------------ -------- --------
* Adjusted EBITDA excludes exceptional costs.
Other primarily relates to the holding company and head office
costs.
No more than 10% of the revenues have been derived from a single
external customer in 2013 and 2012.
3. Exceptional items
Included within Administrative expenses are exceptional items as
shown below:
2013 2012
Note EUR'000 EUR'000
-------------------------------------------------------------- -------- --------
Exceptional items includes:
- Transaction costs relating to business combinations
and listing a 117 306
- Deemed reverse acquisition costs b - 326
- Inter-company balances written back c - (76)
------------------------------------------------------- ------ -------- --------
Total exceptional items 117 556
--------------------------------------------------------------- -------- --------
(a) Transaction costs relating to business combinations.
The Group incurred acquisition expenses of GBP117,000 (2012 -
EUR306,000) associated with the acquisitions of subsidiaries which
are included within administrative expenses in the consolidated
income statement.
(b) Deemed reverse acquisition costs is made up of the excess
amount payable on the deemed acquisition consideration of the legal
parent company over its fair net assets at the date of
acquisition.
(c) Inter-company balances written back relate to balances owed
to the old Group of Venn Life Sciences Limited.
4. Finance income and costs
2013 2012
EUR'000 EUR'000
--------------------------------------------------- -------- --------
Interest expense:
- Bank borrowings 25 23
- Deferred consideration unwinding of discount 2 -
- Interest on other loans 14 6
--------------------------------------------------- -------- --------
Finance costs 41 29
--------------------------------------------------- -------- --------
Finance income
- Interest income on cash and short-term deposits 12 3
--------------------------------------------------- -------- --------
Finance income 12 3
--------------------------------------------------- -------- --------
Net finance costs 29 26
--------------------------------------------------- -------- --------
5. Income tax expense
2013 2012
EUR'000 EUR'000
--------------------------------------------------- -------- --------
Current tax:
Current tax for the year (22) 24
--------------------------------------------------- -------- --------
Total current tax (credit)/charge (22) 24
--------------------------------------------------- -------- --------
Deferred tax:
Origination and reversal of temporary differences (1) (2)
--------------------------------------------------- -------- --------
Total deferred tax (1) (2)
--------------------------------------------------- -------- --------
Income tax (credit)/charge (23) 22
--------------------------------------------------- -------- --------
The tax on the Group's results before tax differs from the
theoretical amount that would arise using the standard tax rate
applicable to the profits of the consolidated entities as
follows:
2013 2012
EUR'000 EUR'000
-------------------------------------------------------- -------- --------
Loss before tax (1,823) (1,150)
-------------------------------------------------------- -------- --------
Tax calculated at domestic tax rates applicable
to UK standard rate of tax of 20% (2012: 21%) (365) (242)
Tax effects of:
- Expenses not deductible for tax purposes 34 112
- Losses carried forward/(utilised) 308 135
- Impact of different tax rates in other jurisdictions - 17
-------------------------------------------------------- -------- --------
Tax charge (23) 22
-------------------------------------------------------- -------- --------
There are no tax effects on the items in the statement of
comprehensive income.
6. Loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of Ordinary Shares in issue during the year.
2013 2012
EUR'000 EUR'000
Loss attributable to equity holders of the
Company (1,800) (1,172)
-------------------------------------------- ----------- -----------
Weighted average number of Ordinary Shares
in issue 20,099,994 10,116,393
-------------------------------------------- ----------- -----------
Basic loss per share (EUR 0.09) (EUR 0.12)
-------------------------------------------- ----------- -----------
(b) Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of Ordinary Shares outstanding to assume
conversion of all dilutive potential Ordinary Shares. No share
options or warrants outstanding at 31 December 2013 or 31 December
2012 were dilutive and all such potential ordinary shares are
therefore excluded from the weighted average number of ordinary
shares for the purposes of calculating diluted earnings per
share.
7. Intangible fixed assets
Customer relationships Trade secrets Goodwill Total
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------------------------------- ----------------------- -------------- --------- ---------
Cost and Net book value
At 1 January 2012 and 31 December 2012 - - 836 836
---------------------------------------------------- ----------------------- -------------- --------- ---------
Cost
At 1 January 2013 - - 836 836
On acquisition of subsidiary undertaking (note 35) 24 37 144 205
---------------------------------------------------- ----------------------- -------------- --------- ---------
At 31 December 2013 24 37 980 1,041
---------------------------------------------------- ----------------------- -------------- --------- ---------
Amortisation
At 1 January 2013 - - - -
Charge for the year 1 1 - 2
---------------------------------------------------- ----------------------- -------------- --------- ---------
At 31 December 2013 1 1 - 2
---------------------------------------------------- ----------------------- -------------- --------- ---------
Net book value
At 31 December 2013 23 36 980 1,039
---------------------------------------------------- ----------------------- -------------- --------- ---------
No amortisation charge has been charged on the goodwill in the
income statement.
Goodwill is allocated to the Group's cash-generating units
(CGU's) identified according to geographic operating segment. An
operating segment-level summary of the goodwill allocation is
presented below.
2013 2012
EUR'000 EUR'000
France 731 731
Netherlands 105 105
UK 144 -
------------- -------- --------
Total 980 836
------------- -------- --------
Goodwill is tested for impairment at the balance sheet date. The
recoverable amount of goodwill at 31 December 2013 was assessed on
the basis of value in use. As this exceeded carrying value no
impairment loss was recognised.
The key assumptions in the calculation to assess value in use
are the future revenues and the ability to generate future cash
flows. The most recent financial results and initial budgets
approved by management for the next year were used and forecasts
for two further years, followed by an extrapolation of expected
cash flows at a constant growth rate of each unit. The projected
results were discounted at a rate which is a prudent evaluation of
the pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the cash-generating
units.
The key assumptions used for value in use calculations in 2013
for all the units were as follows:
%
-------------------------------------- ---
Longer-term growth rate (after 2015) 5
Discount rate 20
-------------------------------------- ---
The group has been loss making for the last 3 years and in 2013
the Directors have transformed the infrastructure and capabilities
of the group in order to work as group in providing services to
clinical research and development markets as one unit rather than
separate units. This meant that the impairment review is prepared
on the group basis rather than a single unit basis. The Directors
have made significant estimates on future revenues and EBITDA
growth over the next three years based on the Group's budgeted
investment in recruiting key employees and marketing the
services.
The Directors have performed a sensitivity analysis to assess
the impact of downside risk of the key assumptions underpinning the
projected results of the Group. The projections and associated
headroom used for the group is sensitive to the EBITDA growth
assumptions that have been applied. A 50% reduction in EBITDA
growth; in the first five years of the management projections would
not result in any impairment at the group level.
8. Cash used in operations
2013 2012
EUR'000 EUR'000
---------------------------------------------- -------- --------
Loss before income tax (1,823) (1,150)
Adjustments for:
- Depreciation 32 43
- Deemed reverse acquisition costs - 326
- Foreign currency translation of net assets 70 -
- Loss on disposal of PPE - 14
- Net finance costs / (income) 29 26
Changes in working capital
- Trade and other receivables 97 488
- Trade and other payables (209) (540)
---------------------------------------------- -------- --------
Net cash used in operations (1,804) (793)
---------------------------------------------- -------- --------
In the statement of cash flows, proceeds from the sale of
property, plant and equipment comprise:
2013 2012
EUR'000 EUR'000
--------------------------------------------------- -------- --------
Net book amount - 19
Loss on disposal of property, plant and equipment - (14)
--------------------------------------------------- -------- --------
Proceeds from disposal of property, plant and
equipment - 5
--------------------------------------------------- -------- --------
Non-cash transactions
The principal non-cash transactions relate to the issue of
shares as consideration for the acquisition discussed in note
9.
9. Business Combinations
Acquisition of Medevol Limited
On 9 December 2013, the Company acquired Medevol Limited, a CRO
business based in Belfast, Northern Ireland, for a total maximum
consideration of GBP670,000 (EUR803,000).
The goodwill of GBP121,000 (EUR144,000) arising from the
acquisition is attributable to the expected future profitability of
the acquired business and synergies expected to arrive from the
incorporation of the business within the Group.
The following table summarises the consideration paid for
Medevol Limited and the amounts of the assets acquired and
liabilities assumed recognised at the acquisition date.
EUR'000
---------------------------------------------------------------------------- --------
Fair value consideration at 9 December 2013
Cash 84
Deferred consideration 129
Total fair value consideration 213
---------------------------------------------------------------------------- --------
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents 30
Property, plant and equipment 5
Customer relations - included in intangibles 24
Trade secrets - included in intangibles 37
Trade and other receivables 160
Trade and other payables (175)
Deferred tax liabilities (12)
Total identifiable net assets 69
---------------------------------------------------------------------------- --------
Goodwill 144
---------------------------------------------------------------------------- --------
The additional deferred consideration arrangement requires the
Company to pay the former owners of Medevol Limited a maximum
additional consideration of GBP600,000 (EUR719,000). The additional
consideration is linked to Profit before taxation over a period
post acquisition. In the opinion of the Directors the full
consideration will not be paid and hence an adjustment of
EUR564,000 has been made to reduce the additional consideration to
GBP129,000 (EUR155,000). The additional consideration has also been
discounted to its net present value to GBP107,000 (EUR129,000)
using a rate to reflect the time value of money. Unwind of the
discount in the post-acquisition period totals GBP22,000
(EUR26,000) and has been included in the finance expense in the
income statement (note 4).
The revenue included in the consolidated statement of
comprehensive income since 9 December 2013 contributed by Medevol
Limited was EUR18,000. Medevol Limited also contributed loss of
EUR7,000 over the same period. Had Medevol Limited had been
consolidated from 1 January 2013, the consolidated statement of
comprehensive income, would show revenue of EUR156,000 and profit
of EUR40,000.
Medevol Limited changed its name to Venn Life Sciences (NI)
Limited on 12 February 2014.
10. Post balance sheet events
The following events have taken place since the year end:
(a) On 13 January 2014 the Company announced the acquisition of
the trade and certain business assets and liabilities of CRM
Clinical Trials GmbH, a German based Clinical Research Organisation
for a total consideration of EUR0.6m satisfied by the issue of
1,962,583 new ordinary shares at the price of GBP0.26 per share in
the Company.
(b) On 26 February 2014 the Company announced the acquisition of
the intellectual property rights in Labskin(TM), SYN1113 and
related equipment of Evocutis plc, for a consideration GBP210,000
satisfied by the issue of 864,706 new ordinary shares at a price of
GBP0.24 per share in the Company.
(c) On 31 March 2014 the Company completed its fund raising of
GBP1m by issuing 5,263,158 new ordinary shares at a price of
GBP0.19 per share.
11. Annual Report & Accounts
Copies of the audited Annual Report & Accounts for the year
ended 31 December 2013 will be posted to shareholders on shortly
and may also be obtained from the Company's head office at 19
Railway Road, Dalkey, Dublin, Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UNAARSKAVAAR
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