TIDMVENN
RNS Number : 9910N
Venn Life Sciences Holdings PLC
22 May 2015
Venn Life Sciences Holdings Plc
("Venn" the "Company" or the "Group")
FINAL RESULTS
For the Year ended 31 December 2014
Venn Life Sciences (AIM: VENN), a growing Clinical Research
Organisation (CRO) providing clinical trial management and
resourcing solutions to pharmaceutical, biotechnology and medical
device clients, announces Its audited final results for the year
ended 31 December 2014.
Financial Highlights
-- Revenue of EUR4.9m increase of 140% over 2013 (EUR2.04m)
-- Group EBITDA Loss (before exceptional items) of EUR1.53m (2013 EUR1.65m)
-- Group Loss for the year EUR1.8m (2013 EUR1.8m)
-- EBITDA Losses attributable to CRO Business down by 36% to EUR0.95m (2013 EUR1.56m)
-- EBITDA Losses attributable to investment in Innovenn EUR0.58m (2013 EUR0.09m)
-- Cash and cash equivalents of EUR0.8m (2013 EUR0.54m)
Operational Highlights
-- Acquisition of Cardinal Systems France bringing IRT, Data
Management and additional clinical capabilities to Venn
-- Resource base increased from 43 to 100 personnel
-- Successful integration of German, Paris and Northern Ireland acquisitions
-- Successful deployment of resources in Mexico, Brazil, Israel and USA
Post Period End
-- Strong rate of business wins and new proposals continues
-- EUR4.1m contract secured in March
-- Revenues of EUR2.0m booked for Q1 2015
-- First Innovenn revenues with sales of Labskin to global pharmaceutical company
-- Board strengthened with two new appointments, Gracielle
Schutjens as COO and Jonathan Hartshorn as CFO (effective 15(th)
June 2015)
-- Completion of GBPGBP2m fundraise underpinning growing book of
business and providing funds for systems investment and expansion
of business development coverage
Commenting on the Group's outlook, David Evans, Non-Executive
Chairman of Venn:
"In 2014 we have seen key financial indicators moving in the
right direction. A significant increase in revenues, reduced losses
on the core business and a stronger balance sheet all point to real
progress and sustainable business growth. The addition of IRT and
data management services through the acquisition of Cardinal
Systems has been instrumental in Venn winning larger full service
contracts as evidenced by the announcement of a EUR4m contract in
March of this year. With a healthy pipeline of project
opportunities the business is poised for further growth. This can
be strongly underpinned by solid execution of existing contracts,
which in turn will result in repeat business.
Although we are still in a period of investment with Innovenn I
am particularly pleased to see the first sales of Labskin and
greatly encouraged by the calibre of initial customers. I look
forward to progress at Innovenn in 2015 through the addition of
microbiology services, the launch of Clarogel and further sales of
Labskin."
Enquiries:
Venn Life Sciences Holdings Plc www.vennlifesciences.com
Tony Richardson, Chief Executive Officer Tel: +353 154 99 341
Orla Mc Guinness, Marketing Manager Tel: +353 153 73 269
Zeus Capital (Nominated Adviser and
Broker)
Andrew Jones / Ross Andrews Tel: +44 (0)161 831 1512
Dominic Wilson 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 and resourcing solutions to
pharmaceutical, biotechnology and medical device organisations.
With dedicated operations in France, Germany, the Netherlands, the
UK, 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,
2014 has been a year of significant progress for Venn. CRO
revenues have increased substantially, losses reduced and a
projects pipeline has been built to drive the business through to
profitability. Venn completed and integrated a key acquisition
during the year and continued to make strong progress in terms of
the scale and quality of project wins. In addition Innovenn has
delivered on its 2014 objectives of securing the IP and knowhow
associated with Labskin and Clarogel (anti-acne compound),
successful reactivation of manufacturing and engagement with the
customer base resulting in initial sales.
Step Change in Scope and Scale
Scale is critical to the delivery of above normal returns to
shareholders. Scale is required in terms of geographic coverage,
range of services and personnel numbers. Venn has made good
progress in addressing all of these ingredients. The acquisition
and integration of Cardinal Systems, a France based company
specialising in Biometry and IRT, has resulted in greater depth of
service capability, the addition of twenty five skilled resources
and a new client base to which we can now offer a full suite of
services. The business now has a sufficiently strong platform on
which we can generate strong organic growth, and this coupled with
possibly a further strategic acquisition in Europe should see the
company increase its number of preferred provider
relationships.
Key Initiatives
To-date the business has developed through a combination of
small acquisitions, coupled with organic growth. Key to preparing
the business for the next step is the implementation of a systems
infrastructure capable of accommodating a steep growth curve. We
communicated to recent investors that management would commit a
portion of recent placing funds to systems initiatives and I am
pleased to report that these programmes are well underway.
A further key initiative is the enhancement of Venn's business
development team and coverage. The current team has delivered a
strong book of business however there are key markets in which we
do not have any business development presence and management is
committed to addressing these gaps through the appointment of
business development resources in Germany and USA.
Looking Forward
The success achieved in 2014 through winning larger contracts
has ensured that significant revenues are already contracted for
2015 and beyond. Management's focus on excellence of execution
should ensure that a recurring revenue stream begins to grow
through repeat business and broader engagement with clients as
Venn's service capabilities and regions continue to grow. At 100+
personnel Venn is building a strong resource base which management
plans to further strengthen by means of continued organic growth
and possibly a further acquisition in 2015.
Having successfully acquired and positioned our skin-science
assets in 2014, Labskin, we look forward to reaping commercial
rewards during 2015 and beyond and continue to look at
complementary technologies that could add further value.
David Evans
Non-Executive Chairman
Chief Executive's Review
2014 was a bumper year for investment into the biotechnology
sector and signs are this will continue into 2015. While our client
base remains diverse, with 50+ active clients, we have seen the
development of some key biotechnology clients during 2014. These
are well funded clients with a strong pipeline of compounds looking
for a one stop solution for all of their clinical requirements. We
have been very responsive to the needs of this sector and our
challenge now is to execute the business to the highest possible
standards and thereafter reap the rewards of a strong pipeline of
repeat business.
I am very pleased to see our fee income grow at such a rate
(140% YOY) and with a strong book of secured business for 2015 we
are well positioned to deliver further growth. Ordinarily such
growth could overstretch an organisation however during 2013 and
2014 we laid a solid foundation with heavy investment in our
resource base that I believe will support us through the next
phase.
Results and Commentary
Fee income for the full year was up to EUR4.9m (2013 - EUR2.04m)
amounting to an increase of 140% year on year. This increase in fee
income is attributable to an effective business development effort
delivering larger international projects coupled with an effective
recruitment drive to support the workload. EBITDA loss for the year
was EUR1.53m (2013 - EUR1.65m). The EBITDA loss attributable to our
CRO business reduced by 36% to EUR0.95m (2013 - EUR1.56m) and what
has been a year of significant investment in Innovenn has resulted
in an EBITDA deficit of EUR0.58 attributable to that part of the
business. The consolidated balance sheet as at 31 December 2014 had
total net assets of EUR5.98m, EUR0.8m of which was represented by
cash and cash equivalents.
Losses in 2014 are principally attributable to the time lag
between building a resource base and securing the necessary work to
utilise the resource pool. With larger contracts secured in H2 2014
and into 2015, resource utilisation has improved to normal industry
levels and this will correspondingly flow through to our P&L.
2015 will see a sustained effort to recruit more billable personnel
resulting in the business achieving a normal balance between
billable and non-billable headcount. This will all contribute to
greater profitability in 2015.
Plans and Outlook
We will continue to improve our geographical coverage and deepen
our service capability during 2015. We are actively screening
acquisition opportunities in Central and Eastern Europe as clients
request capability in this region and the operating cost
differential could have a beneficial impact on profit margins. We
are also looking at extensions of our service offering in line with
client requirements as we seek to become indispensible to our
target audience. 2015 should see Innovenn make significant
progress. With initial sales secured we look forward to
accelerating Labskin sales and services and delivering Clarogel as
a marketable product to the right partner.
Anthony Richardson
Chief Executive Officer
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2014
2014 2013
Notes EUR'000 EUR'000
----------------------------------------- ------ -------- --------
Continuing operations
Revenue 2 4,883 2,035
Direct Project and Administrative Costs 3 (6,817) (3,829)
Other operating income 167 -
Operating loss (1,767) (1,794)
-------- --------
Depreciation and amortisation (187) (32)
Exceptional items 3 (47) (117)
EBITDA before exceptional items 2 (1,533) (1,645)
-------- --------
Finance income 4 9 12
Finance costs 4 (71) (41)
----------------------------------------- ------ -------- --------
Loss before income tax (1,829) (1,823)
Income tax credit 5 20 23
----------------------------------------- ------ -------- --------
Loss for the year (1,809) (1,800)
----------------------------------------- ------ -------- --------
Loss attributable
Owners of the parent (1,533) (1,800)
Non-controlling interest (276) -
----------------------------------------- ------ -------- --------
Loss for the year (1,809) (1,800)
Currency translation differences 8 (8)
----------------------------------------- ------ -------- --------
Total comprehensive loss for the year (1,801) (1,808)
----------------------------------------- ------ -------- --------
Loss per ordinary share 6 EUR EUR
Basic and diluted (0.06) (0.09)
----------------------------------------- ------ -------- --------
Consolidated Statement of Financial Position
As at 31 December 2014
2014 2013
Notes EUR'000 EUR'000
------------------------------- ------ -------- --------
Assets
Non-current assets
Property, plant and equipment 194 53
Intangible assets 7 2,820 1,039
Investments 31 31
Total non-current assets 3,045 1,123
------------------------------- ------ -------- --------
Current assets
Trade and other receivables 2,097 656
Income tax recoverable 32 52
Cash and cash equivalents 806 541
------------------------------- ------ -------- --------
Total current assets 2,935 1,249
------------------------------- ------ -------- --------
Total assets 5,980 2,372
------------------------------- ------ -------- --------
Equity attributable to owners
Share capital 112 102
Share premium account 5,483 3,431
Group re-organisation reserve (541) (541)
Reverse acquisition reserve 45 45
Foreign currency reserves - (8)
Retained earnings (3,841) (2,308)
------------------------------- ------ -------- --------
1,258 721
Non-controlling interest 544 -
------------------------------- ------ -------- --------
Total equity 1,802 721
------------------------------- ------ -------- --------
Liabilities
Non-current liabilities
Deferred consideration - 54
Borrowings 99 -
Total non-current liabilities 99 54
------------------------------- ------ -------- --------
Current liabilities
Trade and other payables 3,302 1,178
Deferred taxation 271 17
Deferred consideration 213 77
Borrowings 293 325
Total current liabilities 4,079 1,597
------------------------------- ------ -------- --------
Total liabilities 4,178 1,651
------------------------------- ------ -------- --------
Total equity and liabilities 5,980 2,372
------------------------------- ------ -------- --------
Consolidated Statement of Cash Flows
For the year ended 31 December 2014
Group Group
2014 2013
Notes EUR'000 EUR'000
Cash Flow from operating activities
Cash used in operations 8 (994) (1,804)
Interest paid (54) (39)
Income tax received/(paid) 20 (16)
------------------------------------------------------- ------ -------- --------
Net cash used in operating activities (1,028) (1,859)
------------------------------------------------------- ------ -------- --------
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired (307) (54)
Purchase of property, plant and equipment
equipment (PPE) (99) (31)
Proceeds from sale of property, plant and equipment 5 -
Interest received 9 12
------------------------------------------------------- ------ -------- --------
Net cash used in investing activities (392) (73)
------------------------------------------------------- ------ -------- --------
Cash flow from financing activities
Proceeds from issuance of ordinary shares 1,194 -
Payment of deferred consideration (154) -
Financing from non-controlling interests 800 -
Repayments on borrowings (40) (362)
Net cash generated by financing activities 1,800 (362)
------------------------------------------------------- ------ -------- --------
Net increase/ (decrease) in cash and cash equivalents 380 (2,294)
Cash and cash equivalents at beginning of year 216 2,588
Exchange losses on cash and cash equivalents - (78)
------------------------------------------------------- ------ -------- --------
Cash and cash equivalents at end of year 596 216
------------------------------------------------------- ------ -------- --------
Consolidated Statement of Changes in Shareholders' Equity
Group Reverse Foreign
Share Share re-organisation acquisition currency Retained Non-controlling
capital premium reserve reserve reserve earnings Total interests Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
At 1 January
2013 102 3,431 (541) 45 - (508) 2,529 - 2,529
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
Changes in
equity for the
year
ended 31
December 2013
Loss for the
year - - - - - (1,800) (1,800) - (1,800)
Currency
translation
differences - - - - (8) - (8) - (8)
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
Total
comprehensive
loss
for the year - - - - (8) (1,800) (1,808) - (1,808)
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
At 31 December
2013 102 3,431 (541) 45 (8) (2,308) 721 - 721
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
Changes in
equity for the
year
ended 31
December 2014
Loss for the
year - - - - - (1,533) (1,533) (276) (1,809)
Currency
translation
differences - - - - 8 - 8 - 8
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
Total
comprehensive
loss for
the year - - - - 8 (1,533) (1,525) (276) (1,801)
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
Transactions
with the
owners
Shares issued 10 2,052 - - - - 2,062 820 2,882
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
Total
contributions
by and
distributions
to owners 10 2,052 - - - - 2,062 820 2,882
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
At 31 December
2014 112 5,483 (541) 45 - (3,841) 1,258 544 1,802
--------------- --------- --------- ---------------- ------------ ---------- ---------- -------- ----------------- --------
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 2014 and comprises the Company and its subsidiaries.
The consolidated financial statements were authorised for issuance
on 21 May 2015. The financial information set out below does not
constitute the Company's statutory accounts for the years ended 31
December 2014 or 2013 within the meaning of Section 434 of the
Companies Act 2006, but is derived from those accounts. Statutory
accounts for 2013 which were of the parent company only have been
delivered to the Registrar of Companies and those for 2014 will be
delivered soon before Companies House deadline. The auditors'
reports on the statutory accounts for the years ended 31 December
2013 and 31 December 2014 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 2013 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 2014 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, 30 June 2015.
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 2014 is as follows:
2014 France Netherlands Germany Other Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------------------- -------- ------------ -------- -------- -------------
Income statement
External revenue 3,531 747 418 187 4,883
---------------------------------- -------- ------------ -------- -------- -------------
Adjusted EBITDA (51) (263) (53) (1,166) (1,533)
Exceptional items (11) - (20) (16) (47)
----------------------------------
EBITDA (62) (263) (73) (1,182) (1,580)
Depreciation (63) (10) (86) (28) (187)
---------------------------------- -------- ------------ -------- -------- -------------
Operating profit/(loss) (125) (273) (159) (1,210) (1,767)
Net finance costs (23) 1 - (40) (62)
Income tax - 2 - 18 20
----------------------------------
Retained profit/(loss) (148) (270) (159) (1,232) (1,809)
---------------------------------- -------- ------------ -------- -------- -------------
Segment assets
Operating assets 3,442 265 674 5,419 9,800
Inter segment assets (47) (113) - (3,922) (4,082)
---------------------------------- -------- ------------ -------- -------- -------------
External operating assets 3,395 152 674 1,497 5,718
Cash 275 93 62 376 806
---------------------------------- -------- ------------ -------- -------- -------------
Total assets 3,670 245 736 1,873 6,524
---------------------------------- -------- ------------ -------- -------- -------------
Segment liabilities
Operating liabilities 3,331 283 850 3,948 8,412
Inter segment liabilities (705) - (735) (2,642) (4,082)
---------------------------------- -------- ------------ -------- -------- -------------
External operating liabilities 2,626 283 115 1306 4,330
Borrowings 205 - - 187 392
---------------------------------- -------- ------------ -------- -------- -------------
Total liabilities 2,831 283 115 1,493 4,722
---------------------------------- -------- ------------ -------- -------- -------------
Other segmental information
Non current assets - PPE 81 11 26 76 194
Non current assets - Intangibles 1765 105 523 427 2,820
---------------------------------- -------- ------------ -------- -------- -------------
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
---------------------------------- -------- ------------ -------- --------
* 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 in 2014 EUR1.3m the equivalent of 26%
of revenue was derived from 2 customers.
.
3. Exceptional items
Included within Administrative expenses are exceptional items as
shown below:
2014 2013
EUR'000 EUR'000
------------------------------------------------------- -------- --------
Exceptional items includes:
- Transaction costs relating to business combinations
and acquisitions 47 117
Total exceptional items 47 117
------------------------------------------------------- -------- --------
4. Finance income and costs
2014 2013
EUR'000 EUR'000
--------------------------------------------------- -------- --------
Interest expense:
- Bank borrowings 29 25
- Deferred consideration unwinding of discount 17 2
- Interest on other loans 25 14
--------------------------------------------------- -------- --------
Finance costs 71 41
--------------------------------------------------- -------- --------
Finance income
- Interest income on cash and short-term deposits 9 12
--------------------------------------------------- -------- --------
Finance income 9 12
--------------------------------------------------- -------- --------
Net finance costs 62 29
--------------------------------------------------- -------- --------
5. Income tax expense
2014 2013
Group EUR'000 EUR'000
--------------------------------------------------- -------- --------
Current tax:
Current tax for the year - (22)
--------------------------------------------------- -------- --------
Total current tax (credit)/charge - (22)
--------------------------------------------------- -------- --------
Deferred tax:
Origination and reversal of temporary differences (20) (1)
--------------------------------------------------- -------- --------
Total deferred tax (20) (1)
--------------------------------------------------- -------- --------
Income tax (credit)/charge (20) (23)
--------------------------------------------------- -------- --------
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:
2014 2013
EUR'000 EUR'000
------------------------------------------------- -------- --------
Loss before tax (1,829) (1,823)
------------------------------------------------- -------- --------
Tax calculated at domestic tax rates applicable
to UK standard rate of tax of 20% (2013 - 20%) (366) (365)
Tax effects of:
- Expenses not deductible for tax purposes 35 34
- Losses carried forward/(utilised) 311 308
Tax (credit)/charge (20) (23)
------------------------------------------------- -------- --------
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.
2014 2013
EUR'000 EUR'000
---------------------------------------------------- ----------- -----------
Loss attributable to equity holders of the Company (1,533) (1,800)
---------------------------------------------------- ----------- -----------
Weighted average number of Ordinary Shares in
issue 26,960,835 20,099,994
---------------------------------------------------- ----------- -----------
Basic loss per share EUR0.06 EUR 0.09
---------------------------------------------------- ----------- -----------
(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 2014 or 31 December
2013 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
Group Customer Intellectual
relationships Trade secrets Goodwill Property Rights Workforce Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Cost
At 1 January 2013 - - 836 - - 836
On acquisition of
subsidiary
undertaking 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
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Cost
At 1 January 2014 24 37 980 - - 1,041
Addition 420 - 180 224 - 824
Exchange differences 1 2 10 - - 13
On acquisition of
subsidiary
undertaking (note 9) 160 670 150 - 104 1,084
At 31 December 2014 605 709 1,320 224 104 2,962
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Amortisation
At 1 January 2014 1 1 - - - 2
Charge for the year 94 32 - 5 9 140
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
At 31 December 2014 95 33 - 5 9 142
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Net book value
At 31 December 2014 510 676 1,320 219 95 2,820
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
No amortisation charge has been charged on the goodwill in the
income statement.
On 13 January 2014 the Group completed the acquisition of trade
and certain business assets and liabilities of a German based CRO
for EUR600,000 satisfied through issue of 1,962,583 Ordinary shares
of 0.01p each. Fair value exercise has conducted on the acquisition
of German based CRO.
On 13 March 2014 the Group acquired intellectual property rights
in Labskin(TM) for EUR224,000 satisfied through issue of 864,706
Ordinary shares of 0.01p each.
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.
2014 2013
EUR'000 EUR'000
------------- -------- --------
France 881 731
Netherlands 105 105
UK 154 144
Germany 180 -
------------- -------- --------
Total 1,320 980
------------- -------- --------
Goodwill is tested for impairment at the balance sheet date. The
recoverable amount of goodwill at 31 December 2014 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 2014
for all the units were as follows:
%
-------------------------------------- ---
Longer-term growth rate (after 2015) 5
Discount rate 13
--------------------------------------- ---
The Group has been loss making for the last 3 years and in 2014
the Directors have transformed the infrastructure and capabilities
of the Group in order to work as a 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
2014 2013
EUR'000 EUR'000
---------------------------------------------- -------- --------
Loss before income tax (1,829) (1,823)
Adjustments for:
- Depreciation and amortisation 187 32
- Foreign currency translation of net assets 25 70
- Net finance costs 62 29
Changes in working capital
- Trade and other receivables (892) 97
- Trade and other payables 1,453 (209)
---------------------------------------------- -------- --------
Net cash used in operations (994) (1,804)
---------------------------------------------- -------- --------
Non-cash transactions
The principal non-cash transactions related to share issue in
respect to acquisition of intangible assets of EUR824,000 and
payment of deferred consideration of EUR44,000
9. Business Combinations
Acquisition of Cardinal Systems S.A.S.
On 5 August 2014, the Company acquired 85.2% of Cardinal Systems
S.A.S, a French based business, for a total consideration of
EUR670,000.
The goodwill of EUR150,000 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
Cardinal Systems S.A.S. and the amounts of the assets acquired and
liabilities assumed recognised at the acquisition date.
EUR'000
---------------------------------------------------------------------------- --------
Fair value consideration at 5 August 2014
Cash 400
Deferred consideration 252
Total fair value consideration 652
---------------------------------------------------------------------------- --------
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents 93
Property, plant and equipment 93
Customer relations - included in intangibles (note 7) 160
Trade secrets - included in intangibles (note 7) 670
Workforce - included in intangibles (note 7) 104
Trade and other receivables 549
Trade and other payables (671)
Borrowings (222)
Deferred tax liabilities (274)
Total identifiable net assets 502
---------------------------------------------------------------------------- --------
Goodwill 150
---------------------------------------------------------------------------- --------
The additional deferred consideration arrangement requires the
Company to pay the former owners of Cardinal Systems Limited an
additional consideration of EUR270,000. The additional
consideration has been discounted to its present value to
EUR252,000 using rate to reflect the time value of money. Unwinding
of discount in the post-acquisition period totals EUR4,000 and has
been included in the finance expense in the income statement (note
4).
The Company has also option to acquire the remaining interest of
14.8% in Cardinal Systems S.A.S. based on performance of the
acquired business for the year ended 30 September 2015.
The revenue included in the consolidated statement of
comprehensive income since 5 August 2014 contributed by Cardinal
Systems S.A.S. was EUR988,000. Cardinal Systems S.A.S. also
contributed a profit of EUR15,000 over the same period. Had
Cardinal Systems S.A.S. had been consolidated from 1 January 2014,
the consolidated statement of comprehensive income, would show
approximately revenue of EUR2.6m and loss of EUR0.7m.
Cardinal Systems S.A.S. changed its name to Venn Life Sciences
(France) S.A.S.
10. Post balance sheet events
The following events have taken place since the year end:
(a) On 28 January 2015 the Company granted options to 2
Executive Directors and key employees of the Group over 2,870,000
Ordinary shares of 0.01p per share at an exercise price of 25p per
share. The options will be exercisable between the third and tenth
anniversary of grant date. The 1,680,000 options granted to the
Directors will vest when the share price reaches 40p per share and
the remaining 1,190,000 options granted to key employees there are
no performance criteria.
(b) 2 April 2015 the Company raised EUR2.06m through issue of
10,868,411 Ordinary shares of 0.01p at 19p per share.
(c) Mars S.A.S (formerly known as Venn Life Science S.A.S.) was
voluntarily liquidated after the year end as part of a streamlining
of entities.
11. Annual Report & Accounts
Copies of the audited Annual Report & Accounts for the year
ended 31 December 2014 will be posted to shareholders 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 UAVWRVKAVUAR
Hvivo (LSE:HVO)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Hvivo (LSE:HVO)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024
