TIDMEKF
RNS Number : 8408Z
EKF Diagnostics Holdings PLC
20 September 2022
EKF Diagnostics Holdings plc
("EKF", the "Company" or the "Group")
Half-year Report
Strong half-year, positioning the Group for sustainable and
diversified growth
Life Sciences investment in increased capacity progressing
well
Year of transition into non-COVID related revenues
EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global
diagnostics business , announces its unaudited interim results for
the six months ended 30 June 2022.
Despite this being a year of transition, as the business pivots
away from a busy COVID period, EKF has successfully maintained good
momentum, recording a strong first half in line with management
expectations and positioning the business for sustainable,
diversified growth over the long term.
Financial highlights
-- Revenues of GBP37.5m (H1 2021: GBP38.6m)
- 74.8% up from pre-pandemic levels (H1 2019: GBP21.4m)
-- Revenue growth, excluding largely COVID-related activities in
Contract Manufacturing and Laboratory Testing, of 11.5% in
period
-- Adjusted EBITDA* of GBP9.7m (H1 2021: GBP12.8m)
- 73.9% up from pre-pandemic levels (H1 2019: GBP5.6m)
-- Gross profit of GBP17.7m (H1 2021: GBP18.5m) with GM% maintained at 47% (H1 2021: 48%)
-- Profit before tax of GBP4.1m (H1 2021: GBP11.4m)
-- Net cash generated from operations of GBP8.4m (H1 2021: GBP1.1m)
-- Cash and cash equivalents of GBP19.1m (30 June 2021: GBP20.8m) (31 December 2021: GBP20.3m)
* Earnings before interest, tax, depreciation and amortisation
adjusted for exceptional items and share-based payments
Operational highlights
-- Business division revenues
- Point-of-Care: up 9.7% to GBP13.8m (H1 2021: GBP12.5m)
- Central Laboratory: stable at GBP6.3m (H1 2021: GBP6.3m), returned to growth in July
- Life Sciences: doubled to GBP2.0m (H1 2021: GBP1.0m)
- Contract Manufacturing: GBP8.6m (H1 2021: GBP17.5m) reflecting
expected drop in COVID revenues
- Laboratory Testing: GBP2.1m (H1 2021: nil, laboratory acquired in H2 2021)
- Other: GBP4.7m (H1 2021: GBP1.2m) including GBP3.5m relating
to cash received for US inventory
-- Life Sciences: Investment to bring increased fermentation
capacity online from 2023 - customer onboarding processes are
already underway with audits, validation batches and tech transfer
ongoing
-- Laboratory Testing: new clinical toxicology testing service
launched, further test portfolio launches in Q4 2022 and Q1 2023,
and non-invasive prenatal test service with Yourgene Health to
launch next month
-- Implementation of reorganisation programme across the
business to align resources with the expansion opportunities
-- Share Buyback programme completed successfully, 9m shares
cancelled, offsetting dilution from shares issued in H2 2021 as
consideration for laboratory testing business
Mike Salter, Chief Executive Officer of EKF, commented: "Whilst
2022 is a year of transition, positioning EKF for long-term
sustainable and diversified growth, the strong first half delivery
has been pleasing. This performance shows the strength and
robustness of our core established business and provides the Board
with confidence that the Group, as a whole, remains on track to
deliver an adjusted EBITDA result in line with its expectations for
the full year and is well positioned for the years ahead."
A copy of the investor presentation is available here:
https://www.ekfdiagnostics.com/documents-reports.html
EKF Diagnostics will be hosting a live online presentation open
to all investors on Tuesday 20 September at 4.30pm (BST), via the
Investor Meet Company platform. Investors can sign up to Investor
Meet Company for free and add to meet EKF Diagnostics via:
https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor
EKF Diagnostics Holdings plc www.ekfdiagnostics.com
Mike Salter, CEO / Marc Davies, CFO Tel: +44 (0)29 2071
0570
Singer Capital Markets (Nominated Adviser & Joint Tel: +44 (0)20 7496
Broker) 3000
Aubrey Powell / George Tzimas / Oliver Platts
Investec Bank plc (Joint Broker) Tel: +44 (0)20 7597
4000
Gary Clarence / Daniel Adams / Ben Farrow
Walbrook PR (Media & Investor Tel: +44 (0)20 7933 8780 or ekf@walbrookpr.com
Relations)
Paul McManus / Lianne Applegarth Mob: +44 (0)7980 541 893 / +44 (0)7584
391 303
BUSINESS REVIEW
We are delighted to announce such a positive first half
performance for our core established business, and a strong overall
performance that has delivered considerable growth compared to
pre-pandemic levels. It also demonstrates our robustness in the
face of significant commercial change due to the near total
reduction after the first quarter of our COVID related
activities.
Revenues for the six months ended 30 June 2022 were GBP37.5m (H1
2021: GBP38.6m) and adjusted EBITDA was GBP9.7m (H1 2021:
GBP12.8m). Considering our core established business units, which
excludes largely COVID-related revenue from Contract Manufacturing
and Laboratory Testing, the Group delivered double-digit revenue
growth compared to H1 2021. Compared to the performance in 2019 as
a pre-pandemic benchmark, when no COVID related activities were
recorded, total Group revenues are 74.8% up from 2019 levels (H1
2019: GBP21.4m) and adjusted EBITDA is 73.9% ahead (H1 2019:
GBP5.6m).
It is clear that, despite this being a year of transition, EKF
has successfully maintained good momentum, recording a strong first
half in line with management expectations and positioning the
business for long-term sustainable and diversified growth. We have
strong foundations from which to execute on our mission to build a
leading Global Diagnostics company, providing quality products and
services to support the continued improvement in patient healthcare
and outcomes.
EKF is also well placed to build on this success, as we enter
our next phase of sustainable growth. The Board remains focused on
delivering its strategy, primarily to:
1. Drive organic growth from our stable and established
Point-of-Care & Central Laboratory businesses, leveraging
existing products and routes to markets, innovating and expanding
into new territories;
2. Invest in the highly-scalable Life Sciences business unit,
through expansion plans for our fermentation capacity and
capabilities which are led by customer demand and will accelerate
organic growth; and
3. Pivot Contract Manufacturing & Laboratory Testing to
non-COVID activities and build revenues by broadening our
high-value services offering.
We have made good progress in the above three areas and will
cover them in more detail below.
Operations
1. Point-of-Care & Central Laboratory
Our established Point-of-Care ("POC") and Central Laboratory
divisions have returned to growth, with revenues now exceeding
pre-COVID levels. These businesses remain the cornerstone of EKF,
contributing 53.5% to Group revenues. They both supply a regular
flow of high margin consumables providing a steady recurring
revenue and are both profitable and cash generative enabling
investment and further diversification of the Group.
POC has continued to experience steady growth post COVID, up
9.7% to GBP13.8m (H1 2021: GBP12.5m), as a result of growth in the
existing customer base and new market initiatives. With increasing
pressures on healthcare systems, including an ageing population and
the growing incidence of chronic diseases, EKF is well placed to
meet the rising demand for quality POC products that can be
performed at home or in primary care settings.
Sales in the POC diabetes segment have seen good growth in the
period, reaching GBP5.7m (H1 2021: GBP4.8m), an increase of 18.3%.
Biosen sales are up 31.0% driven by strong growth in EMEA and APAC.
Sales of Quo-Test and Quo-Lab are up 8.2% and 7.4%
respectively.
We have seen good growth across our POC hematology portfolio,
with sales up 10.5% to GBP6.5m (H1 2021: GBP5.9m) as screening
anaemia programmes have continued to return to more normalised
levels following the COVID pandemic. Hemocontrol, a point-of-care
hemoglobin analyser, delivered significant growth with sales up
45.2% to GBP3.1m (H1 2021: GBP2.1m) due to the return of global
testing programmes post pandemic.
In the period we enhanced our POC analyser portfolio by
launching EKF Link, a digital connectivity solution for the secure
management of POC analysers and associated data on one centralised
platform. This solution significantly increases the target market
for our analyser products where connectivity is becoming
increasingly attractive if not essential. The development and
launch of EKF Link was driven by customer demand and designed in
partnership with hospital POC managers to ensure the software meets
their specific needs. Integrated with hospital and laboratory IT
systems, EKF Link enables real-time remote management of data, such
as patient test results, allowing physicians and other healthcare
professionals to easily evaluate patients' data securely and
accurately from a remote setting.
In Central Laboratory, we remain one of the clear market leaders
for the supply of <BETA>-HB (Beta-Hydroxybutyrate), a reagent
used to detect ketones for patients suffering from diabetic
ketoacidosis, as well as many other clinical applications. Our
<BETA>-HB reagent is used by over 1,100 hospitals in the USA.
Total <BETA>-HB sales for H1 2022 were marginally impacted by
temporary supply delays at period end, but these have since been
resolved and sales for the 7 months to the end of July 2022 have
shown a 9.9% improvement on the same period year-on-year. Glycated
Albumin sales were up 138.9% with first half sales already in
excess of 2021 full year performance.
In the first six months Central Laboratory was flat at GBP6.3m
(H1 2021: GBP6.3m), but as described above <BETA>-HB sales
have immediately caught up post period end, putting it back on
track for its expected growth performance year-on-year.
2. Life Sciences
Strong organic growth from our specialist enzyme fermentation
business saw revenues doubling to GBP2.0m (H1 2021: GBP1.0m). This
growth was driven by increased demand from our large corporate
customers utilising our existing contract fermentation services to
create and deliver high quality enzymes and biomolecules for use in
a variety of industrial applications.
EKF has established a dedicated team of highly skilled
fermentation project specialists who are uniquely positioned to
deliver customer requirements and expand these long-term strategic
partnerships. The strong customer relationships established by this
unit over the years has led to customer-led interest in increased
volume services. EKF's current fermentation suites in Elkhart
utilise 10, 100, 250 and 1,600 litre (L) vessels, and as already
reported, we are investing around $10m to increase this capacity at
our new South Bend site and also our existing site in Elkhart, to
meet existing customer needs and attract new customers with higher
volume requirements.
Progress in the construction and installation of the six new
vessels in South Bend - comprising 65, 300, 1,500, 3,000, 10,000
and 14,500L units - is going well and remains on track to be
completed by the year end. The 1,500 and 3,000L vessels have been
delivered to the South Bend site and will be installed and
validated next month, with the larger 10,000L and 14,500L vessels
scheduled to be delivered in Q4 2022. A number of potential
customers interested in our larger volume vessels have already
begun the process of internal audit, validation and tech transfer
to allow them to utilise this capacity when it comes on stream. We
would expect to produce pilot batches in early 2023 moving to
commercial scale production throughout 2023.
The global speciality enzymes market is experiencing rapid
growth, driven by the increased application of enzymes in the
diagnostic industry, as well as the food and industrial sectors,
and as a result we are seeing increasing demand for precision
fermentation services. We are confident in the growth trajectory of
this business, which is closely aligned with the strong ongoing
customer demand which is driving our investment decision. We have a
robust contract pipeline and expect to see revenues build in 2023
and continue this upward trajectory into 2024.
3. Contract Manufacturing & Laboratory Testing
As previously highlighted, the main challenges in our year of
transition are in Contract Manufacturing & Laboratory Testing,
as we seek to shift our operations to non-COVID revenues. The first
six months certainly reflect this change, as we still experienced a
strong Q1 as COVID-related demand from our diagnostic and
healthcare customers continued for our end-to-end contract
manufacturing services across all of our sites in the US, Germany
and UK. However, as expected, there was a sharp drop in COVID
related revenues in our Contract Manufacturing division after the
first quarter, which saw revenues for the half reduce substantially
to GBP8.6m from the higher levels seen during the pandemic when
COVID testing was more widespread (H1 2022: GBP17.5m). This Q1
weighted demand for COVID-related services was also seen in
Laboratory Testing, which delivered H1 sales of GBP2.1m (H1 2021:
GBPnil, laboratory acquired in H2 2021).
In anticipation of this decline, during the period we began
restructuring our Contract Manufacturing business, reducing costs
and focusing our capabilities outside of COVID. Further costs
associated with the restructuring are expected in the second half
of the financial year. We continue to execute our strategy to pivot
away from COVID products and services, utilising our capabilities
and capacity to focus on higher value contract manufacturing in the
supply of products and services for alternative applications. We
expect Contract Manufacturing revenues to build in the later part
of 2022 and into 2023 as new opportunities come online.
In Laboratory Testing, our efforts remain focussed on utilising
the expertise of Advanced Diagnostic Laboratory LLC ("ADL Health"),
which specialises in high complexity testing, to bring new tests
online and expand our CLIA laboratory testing portfolio beyond
COVID assays. To this end, the team has recently launched a new
clinical toxicology method geared towards medication adherence and
developed an analysis of cannabis potency, with the first samples
being processed this month. Further tests in oncology, wound health
and women's health are on track to launch later in the year and
into early 2023. At the beginning of the year, we signed a
strategic partnership agreement with Yourgene Health plc
("Yourgene") to offer a non-invasive prenatal test ("NIPT") service
from our accredited US laboratory. We expect this service to launch
in October 2022 and we believe this is an exciting growth
opportunity.
Our challenge with the Laboratory Testing division is to ensure
that investment into these areas quickly adds new revenue streams
to the Group, and to return this business to profitable growth
before the year end based on a wider portfolio of non-COVID testing
services.
Operational efficiencies
As well as the restructuring of the Contract Manufacturing
operations during the first half, post-period end the new
management team has implemented a reorganisation programme across
the business to align the cost base to match the expansion
opportunities being seen across the Group, and to ensure a smooth
transition into a sustainable growth business unrelated to the
external pandemic. Like many businesses, we have experienced
supply-chain availability challenges and input-costs inflationary
pressure. To mitigate this, we increased the focus on
forward-looking sourcing requirements and have responsibly adjusted
our prices to customers.
In the first half, we began implementing new initiatives to
drive efficiency and integration across the global EKF Group, as
well as bolstering our current working practices. This included
vertically integrating our supply chain, the commencement of an IT
standardisation project to consolidate global systems and utilise
new technologies, and the enhancement of financial analysis,
controls and the sharing of resources throughout the Group.
Regulatory and ESG strategy
We believe we are well positioned to meet the new and additional
requirements under In Vitro Diagnostic Regulation (IVDR). Our
experienced regulatory team is already connected with our Notified
Body, who is aware of our plan for the number of products subject
to the conformity assessment requirements of IVDR, and we have
built in a safety buffer to ensure we are prepared.
We have also appointed a dedicated senior ESG resource to lead
the development of our Environmental and Sustainability strategy.
This investment is a sign of how EKF recognises the importance of
analysing ESG performance going forward to help investors gain a
more holistic view of our business, better understand how we manage
ESG risks and incorporate sustainability as a core value.
Russia and Ukraine
EKF owns 60% of O.O.O. EKF Diagnostika, a distribution
subsidiary located in Moscow which sells EKF POC products and other
third-party products into Russia and neighbouring states. As a
supplier of medical products with no dual use it would not be
appropriate to end supplies to the region, and sales have continued
in the first half of the year. We are working with the staff and
management of this business to keep it as stable as possible, but
it is becoming more challenging as we comply with the current
sanction guidance. At present there are controls over the payment
of foreign dividends in Russia hence the cash disclosed in Russia
(30 June 2022: GBP2.6m) is currently not accessible. Financial
details of our business in Russia are shown in the segmental
analysis in Note 3.
We also have a distributor in Ukraine with whom we have worked
for some years, who we have continued to support during this time
of substantial challenge.
Outlook
Our Point-of-Care & Central Laboratory business units are
expected to continue to grow steadily and contribute a solid base
of stable revenues and earnings. The investment in our Life
Sciences business, and its increased fermentation capacity, is
expected to generate further significant revenue growth from next
year onwards. This expectation is underpinned by the advanced
nature of our work with new and existing customers keen to utilise
this capacity as it becomes available. The transition of Contract
Manufacturing and Laboratory Services into non-COVID-related
revenues is our key challenge. We have already identified a number
of opportunities that are advancing, and a wider portfolio of tests
are beginning to come online, which we forecast will start to
deliver revenues in the second half of the year.
Whilst 2022 is a year of transition, positioning EKF for
long-term sustainable and diversified growth, the strong first half
delivery has been pleasing. This performance shows the strength and
robustness of our core established business and provides the Board
with confidence that the Group, as a whole, remains on track to
deliver an adjusted EBITDA result in line with its expectations for
the full year and is well positioned for the years ahead.
Mike Salter
Chief Executive Officer
20 September 2022
Financial review
Revenue
Revenue for the period was GBP37.5m (H1 2021: GBP38.6m).
Revenue by Business Unit:
Unaudited Unaudited +/-
6 months ended 6 months ended %
30 June 2022 30 June 2021
GBP'000 GBP'000
Point-of-Care 13,756 12,534 9.7%
Central Laboratory 6,295 6,325 (0.5%)
Life Sciences 2,024 1,033 95.9%
Contract Manufacturing 8,570 17,469 (50.9%)
Laboratory Testing 2,141 - n/a
Other* 4,685 1,198 291.1%
Total revenue 37,471 38,559 (2.8%)
-------------------- --------------------
Considering our core established business units , which excludes
largely COVID-related revenue including that from Contract
Manufacturing and Laboratory Services, the Group delivered growth
of 11.5% compared with the equivalent period in 2021.
* Other revenue relating to US inventory payment, shipping and
handling recharges, repairs and other sundries
Revenue by Geographical Segment:
Unaudited Unaudited +/-
6 months ended 6 months ended %
30 June 2022 30 June 2021
GBP'000 GBP'000
Germany 13,582 14,542 (6.6%)
USA 20,925 18,156 15.3%
Russia 2,037 1,384 47.2%
UK 925 4,477 (79.3%)
Total revenue 37,471 38,559 (2.8%)
-------------------- --------------------
Geographic regions showing a decline is primarily due to the
reduction in COVID-related Contracted Manufacturing activity. The
2022 amount for USA includes the GBP3.5m inventory payment.
Gross profit
Gross profit was GBP17.7m (H1 2021: GBP18.5m). The gross profit
margin was 47% (H1 2021: 48%). The gross profit has reduced mainly
as a result of the transition to COVID-related products and
services.
Administrative expenses
In H1 2022, administration expenses increased to GBP14.5m (H1
2021: GBP7.0m), representing 38.6% of revenue for the period (H1
2021: 18.2%, FY 2021: 21.6%). The increase is largely due to a
number of non-recurring events. In H1 2022, a charge of GBP1.2m was
recorded in relation to the $5.5m (GBP4.4m) cash payment received
in May 2022 with regard to US inventory. The total adjusted revenue
and EBITDA impact of this transaction is GBP3.5m and GBP1.2m,
respectively.
In addition, exceptional costs in relation to the transition and
restructure of certain operations in the US, UK and Germany of
GBP1.7m are recorded in administration expenses in H1 2022.
Finally, administrative expenses in H1 2021 benefited from a net
write back of GBP1.4m in share-based payments (H1 2022: charge of
GBP0.5m) stemming from the termination of the previous cash settled
share-based incentive scheme. The 2022 charge relates to the
replacement scheme which was described in the 2021 Annual
Report.
To aid understanding, administrative expenses in each period are
made up as follows:
Unaudited Unaudited Audited Year
6 months ended 6 months ended ended 31 December
30 June 2022 30 June 2021 2021
Non-exceptional administration
expenditure before R &
D capitalisation and share-based
payments 13,076 8,960 19,511
Effect of share-based payments 517 (1,392) (1,238)
Less capitalised R & D (802) (317) (659)
Effect of exceptional items 1,682 (234) 95
-------------------- -------------------- -----------------------
Total administrative expenses 14,473 7,017 17,709
-------------------- -------------------- -----------------------
The charge for depreciation of fixed assets and for the
amortisation of intangibles is GBP3.4m (H1 2021: GBP2.8m).
Operating profit and adjusted earnings before interest tax and
depreciation
The Group generated an operating profit of GBP4.1m (H1 2021:
GBP11.4m). We continue to consider that adjusted EBITDA gives a
more meaningful measure of performance which for H1 2022 was
GBP9.7m (H1 2021: GBP12.8m).
Adjusted EBITDA excludes a charge for share-based payments of
GBP0.5m (H1 2021: credit of GBP1.4m) and exceptional charges of
GBP1.7m (H1 2021: profit of GBP0.2m). The exceptional charge
relates mainly to transition and restructure costs of certain
operations in the US, UK and Germany including provisions against
inventory and the impairment of certain lease assets where the
property is no longer required. The reduction in operating profit
and adjusted EBITDA relates to the transition to a post-COVID
business.
Finance costs
Finance costs are GBP0.01m (H1 2021: GBP0.16m). The charge has
reduced because of lower charges relating to deferred
consideration.
Tax
There is a tax charge of GBP1.7m (H1 2021: GBP2.2m). The
decrease largely reflects the decrease in profit, offset partially
by an increased deferred tax rate.
Earnings per share
Basic earnings per share has decreased to 0.48p (H1 2021:
1.99p). Diluted earnings per share are 0.48p (H1 2021: 1.99p),
dilutive effects having largely ended.
Balance sheet
Fixed assets
We have capitalised GBP2.3m (H1 2021: GBP1.5m) of property,
plant and equipment. The expenditure includes continuing work on
adding capacity for Life Sciences in the US. Further expenditure in
Life Sciences, and on new facilities in Germany, is planned for the
second half of the year.
Intangible assets
The value of intangible fixed assets is GBP43.4m (31 December
2021: GBP41.9m). The increase is mainly the result of exchange rate
movements. An amount of GBP0.8m (H1 2021: GBP0.6m) has been
capitalised during the first half.
Investments
During the period additional investments were made in the
ordinary share capital of Renalytix plc ("Renalytix") (GBP0.38m)
and Verici Dx plc ("Verici") (GBP2.5m). The majority of our holding
in Verici was subsequently transferred to shareholders by way of a
dividend in specie at a value of GBP1,455,232 (15.994p per Verici
share, equivalent to 0.31988p per EKF share). This represented a
discount from the prevailing market price of 27.3% reflecting the
lock-in period applied to the shares. Following this dividend the
Group's investments in Renalytix and Verici represented holdings of
1.53% and 0.42% respectively. The investments are held at fair
value which has been calculated based on the market value of the
shares which at 30 June 2022 was GBP1.05 (31 December 2021:
GBP6.20) per share for Renalytix and GBP0.23 (31 December 2021:
GBP0.53) per share for Verici. The resulting unrealised loss during
H1 2022 of GBP7.2m is shown as a movement in Other comprehensive
income.
Deferred consideration
The deferred consideration at 30 June 2022 relates to the
acquisition in September 2021 of Advanced Diagnostic Laboratory
LLC. At 30 June 2021 the deferred consideration related to a
contingent share-based payment to the former owner of
EKF-Diagnostic GmbH, which was resolved in H2 2021.
Cash and working capital
The gross cash position at 30 June 2022 was GBP19.1m (31 Dec
2021: GBP20.3m), and the Group had cash net of bank borrowings of
GBP18.9m (31 Dec 2021: GBP19.6m).
Cash generated from operations in H1 2022 is GBP8.4m (H1 2021:
GBP1.1m). Trade debtors have decreased as a result of timing
effects in the run up to period end. Major cash outflows have
included GBP3.9m on purchase of own shares and GBP2.9m for the
purchase of investments, as well as cash payments totalling GBP0.4m
required in connection with the acquisition of ADL.
Cash and cash equivalents held by the Russian subsidiary at 30
June 2022 totalled GBP2.6m (31 Dec 2021: GBP1.3m). These deposits
are subject to regulatory restrictions, and therefore may not be
available for general use by the other entities within the
Group.
Capital structure
We successfully completed the acquisition of 9,000,000 of our
own ordinary shares for a total consideration of GBP3.9m. These
shares have been cancelled. We received further authority to buy
back up to 69,589,585 ordinary shares at the Company's AGM on 18
May 2022 and we will make further purchases if considered
appropriate.
Dividend
At the Annual General Meeting in May 2022, shareholders approved
the payment of a dividend of 1.2p per ordinary share, to be paid on
1 December 2022 to shareholders on the register at close of
business on 4 November 2022. As this declaration is irrevocable,
the value of GBP5.459m is shown as a liability with the debit shown
in the statement of changes in equity.
Marc Davies
Chief Financial Officer
20 September 2022
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 30 JUNE
2022
Unaudited
Unaudited 6 months Audited
6 months ended Year ended
ended 30 30 June 31 December
June 2022 2021 2021
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3 37,471 38,559 81,836
Cost of sales (19,727) (20,019) (42,470)
--------------- -------------- -----------------
Gross profit 17,744 18,540 39,366
Administrative expenses (14,473) (7,017) (17,709)
Other income 880 34 90
--------------- -------------- -----------------
Operating profit 4,151 11,557 21,747
------------------------------------- ----------
Depreciation and amortisation (3,361) (2,830) (5,885)
Share-based payments (517) 1,392 1,238
Exceptional items 4 (1,682) 234 (95)
EBITDA before exceptional
items and share-based payments 9,711 12,761 26,489
------------------------------------- ---------- --------------- -------------- -----------------
Finance income 57 22 45
Finance costs (68) (155) (357)
--------------- -------------- -----------------
Profit before income tax 4,140 11,424 21,435
Income tax charge 5 (1,717) (2,237) (5,277)
--------------- -------------- -----------------
Profit for the period 2,423 9,187 16,158
--------------- -------------- -----------------
Profit attributable to:
Owners of the parent 2,213 9,069 15,851
Non-controlling interest 210 118 307
2,423 9,187 16,158
--------------- -------------- -----------------
Earnings per ordinary share
attributable to the owners
of the parent during the
period 6
Pence Pence Pence
Basic 0.48 1.99 3.47
Diluted 0.48 1.98 3.44
---------- ---------- ----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE 6 MONTHSED 30
JUNE 2022
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
GBP'000 GBP'000 GBP'000
Profit for the period 2,423 9,187 16,158
Other comprehensive income/(expense):
Items that will not be reclassified
to profit or loss
Changes in fair value of equity
instruments at fair value
through other comprehensive
income (net of tax) (5,307) 4,040 (321)
Items that may be subsequently
reclassified to profit or
loss
Currency translation differences 6,520 (1,334) (1,226)
Other comprehensive income/(loss)
(net of tax) 1,213 2,706 (1,547)
--------------- --------------- -----------------
Total comprehensive income
for the period 3,636 11,893 14,611
--------------- --------------- -----------------
Attributable to:
Owners of the parent 3,024 11,779 14,315
Non-controlling interests 612 114 296
--------------- --------------- -----------------
Total comprehensive income
for the period 3,636 11,893 14,611
--------------- --------------- -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Unaudited Unaudited Audited as
as at 30 as at 30 at 31 December
June 2022 June 2021 2021
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant
and equipment 7 18,170 12,957 15,991
Right-of-use
assets 7 1,495 890 1,875
Intangible assets 8 43,387 35,134 41,894
Investments 1,566 12,818 7,789
Deferred tax
assets 23 14 15
Total non-current
assets 64,641 61,813 67,564
---------------- ------------------- -----------------------
Current Assets
Inventories 12,969 9,766 13,238
Trade and other
receivables 12,236 16,107 13,428
Corporation tax
receivable 408 - 548
Cash and cash
equivalents 19,138 20,784 20,341
Total current
assets 44,751 46,657 47,555
---------------- ------------------- -----------------------
Total assets 109,392 108,470 115,119
================ =================== =======================
Equity
attributable
to owners of the
parent
Share capital 4,549 4,550 4,639
Share premium 7,375 200 7,375
Other reserve (184) 9,394 5,033
Foreign currency
reserves 8,931 2,698 2,813
Retained earnings 64,775 67,580 74,264
---------------- ------------------- -----------------------
85,446 84,422 94,124
Non-controlling
interest 1,230 435 618
---------------- ------------------- -----------------------
Total equity 86,676 84,857 94,742
---------------- ------------------- -----------------------
Liabilities
Non-current
liabilities
Borrowings 44 310 431
Lease liabilities 793 475 1,095
Deferred
consideration 173 - 170
Deferred tax
liability 3,795 4,586 5,031
---------------- ------------------- -----------------------
Total non-current
liabilities 4,805 5,371 6,727
---------------- ------------------- -----------------------
Current
liabilities
Trade and other
payables 14,148 13,152 9,078
Lease liabilities 902 456 838
Deferred
consideration 72 3,033 465
Current income tax
liabilities 2,611 1,512 3,004
Borrowings 178 89 265
---------------- ------------------- -----------------------
Total current
liabilities 17,911 18,242 13,650
---------------- ------------------- -----------------------
Total liabilities 22,716 23,613 20,377
---------------- ------------------- -----------------------
Total equity and
liabilities 109,392 108,470 115,119
================ =================== =======================
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHSED 30 JUNE 2022
Audited
Unaudited Year
Unaudited 6 months to 31
6 months ended ended 30 December
30 June 2022 June 2021 2021
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Profit before income tax 4,140 11,424 21,435
Adjustments for
- Warranty claim - (251) (285)
- Restructuring exceptional cost 1,682 - -
- Depreciation 1,505 919 2,041
- Amortisation and impairment charges 1,856 1,911 3,844
- Deferred consideration (FV adjust) - 132 285
- Foreign Exchange - (40) 61
- Bad debt written down - - 58
- (Profit)/loss on disposal of assets 19 (9) (13)
- Share-based payments 517 (1,392) (6,586)
- Net finance costs 11 1 26
Changes in working capital
- Inventories (693) (1,450) (4,601)
- Trade and other receivables 1,698 (2,960) (3,274)
- Trade and other payables (323) (5,126) 1,217
------------------------------ ---------------------- ----------------
Cash generated by operations 10,412 3,159 14,208
Interest paid (39) (11) (36)
Income tax paid (1,945) (2,019) (3,934)
------------------------------ ---------------------- ----------------
Net cash generated by operating
activities 8,428 1,129 10,238
Cash flow from investing activities
Purchase of investments (2,930) - -
Purchase of property, plant and
equipment (PPE) (2,167) (1,342) (4,335)
Purchase of intangibles (819) (623) (1,314)
Acquisition of subsidiaries (403) - 84
Proceeds from sale of PPE 6 14 43
Interest received 57 22 45
------------------------------ ---------------------- ----------------
Net cash used in investing activities (6,256) (1,929) (5,477)
------------------------------ ---------------------- ----------------
Cash flow from financing activities
Dividend - - (5,103)
Purchase of own shares (3,896) - -
Repayment of borrowings (525) (89) (178)
Principal lease payments (551) (257) (643)
Dividends paid to non-controlling
interests - (231) (231)
------------------------------ ---------------------- ----------------
Net cash used in financing activities (4,972) (577) (6,155)
------------------------------ ---------------------- ----------------
Net decrease in cash and cash
equivalents (2,800) (1,377) (1,394)
Cash and cash equivalents at beginning
of period 20,341 21,913 21,913
Exchange gains on cash and cash
equivalents 1,597 248 (178)
------------------------------ ---------------------- ----------------
Cash and cash equivalents at end
of period 19,138 20,784 20,341
============================== ====================== ================
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
FOR THE 6 MONTHSED 30 JUNE
2022
Share Share Other Foreign Retained Total Non-controlling Total
Capital Premium Reserve Currency earnings interest equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 4,550 200 5,354 4,028 63,516 77,648 552 78,200
Comprehensive
income/(expense)
Profit for the
period - - - - 9,069 9,069 118 9,187
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - 4,040 - - 4,040 - 4,040
Currency
translation
differences - - - (1,330) - (1,330) (4) (1,334)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
comprehensive
income/(expense) - - 4,040 (1,330) 9,069 11,779 114 11,893
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Dividends to
non-controlling
interest - - - - - - (231) (231)
Dividend declared
but not paid - - - - (5,005) (5,005) - (5,005)
Total
contributions
by and
distributions
to owners - - - - (5,005) (5,005) (231) (5,236)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 30 June 2021 4,550 200 9,394 2,698 67,580 84,422 435 84,857
Comprehensive
income/(expense)
Profit for the
period - - - - 6,782 6,782 189 6,971
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - (4,361) - - (4.361) - (4,361)
Currency
translation
differences - - - 115 - 115 (7) 108
Total
comprehensive
income/(expense) - - (4,361) 115 6,782 2,536 182 2,718
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Issue of ordinary
shares as
consideration
for a business
combination,
net of
transaction
costs 89 7,175 - - - 7,264 - 7,264
Dividend to
owners - - - - (98) (98) - (98)
Dividends to
non-controlling
interest - - - - - - 1 1
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
contributions
by and
distributions
to owners 89 7,175 - - (98) 7,166 1 7,167
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 31 December
2021 4,639 7,375 5,033 2,813 74,264 94,124 618 94,742
Comprehensive
income
Profit for the
period - - - - 2,213 2,213 210 2,423
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - (5,307) - - (5,307) - (5,307)
Currency
translation
differences - - - 6,118 - 6,118 402 6,520
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
comprehensive
income/(expense) - - (5,307) 6,118 2,213 3,024 612 3,636
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Acquisition of
own
shares (90) - 90 - (3,896) (3,896) - (3,896)
Dividends to
owners - - - - (7,806) (7,806) - (7,806)
Dividends to - - - - - - - -
non-controlling
interest
Total
contributions
by and
distributions
to owners (90) - 90 - (11,702) (11,702) - (11,702)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 30 June 2022 4,549 7,375 (184) 8,931 64,775 85,446 1,230 86,676
============= ============= ============ ============= ============= ============= ==================== =============
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
EKF Diagnostics Holdings Plc is a company incorporated and
domiciled in the United Kingdom. The Company is a public limited
company, which is listed on the AIM market of the London Stock
Exchange. The address of the registered office is Avon House, 19
Stanwell Road, Penarth, Cardiff CF64 2EZ.
The principal activity of the Group is the development,
manufacture and supply of products and services into the in-vitro
diagnostic (IVD) market and other industries. The Group has
presence in the UK, USA, Germany, Russia, and China, and sells
throughout the world including Europe, the Middle East, the
Americas, Asia, and Africa.
The financial statements are presented in British Pounds
Sterling, the currency of the primary economic environment in which
the Company's headquarters is operated.
The financial information in these interim results is that of
the holding company and all of its subsidiaries. It has been
prepared in accordance with the UK-adopted International Accounting
Standards and the Companies Act 2006. The accounting policies
applied by the Group in this financial information are the same as
those applied by the Group in its financial statements for the year
ended 31 December 2021 and which will form the basis of the 2022
financial statements except for a number of new and amended
standards which have become effective since the beginning of the
previous financial year. These new and amended standards are not
expected to materially affect the Group.
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.
The financial information presented herein does not constitute
full statutory accounts under Section 434 of the Companies Act 2006
and was not subject to a formal review by the auditors. The
financial information in respect of the year ended 31 December 2021
has been extracted from the statutory accounts which have been
delivered to the Registrar of Companies. The Group's Independent
Auditor's report on those accounts was unqualified, did not include
references to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain
a statement under section 498(2) or 498(3) of the Companies Act
2006. The financial information for the half years ended 30 June
2022 and 30 June 2021 is unaudited and the twelve months to 31
December 2021 is audited.
In the context of an increased level of uncertainty, the Group
has exercised critical judgements in applying its accounting
policies in whether the Group should continue to consolidate its
Russian business. The Group has applied judgement in regard to
whether the Group continues to control its Russian subsidiary due
to the restrictions imposed by the Russian government or any other
authority. Control exists when the Group is exposed, or has rights,
to variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. The Russian government introduced various sanctions in
recent months, including restrictions on the payment of dividends
to "unfriendly states" that require consent from the Ministry of
Finance of Russia. Since the Group continued to direct the
operations and the Russian regulations currently do not prohibit
the declaration and payment of dividends, the Group has taken the
view that it has retained control through the six months ended 30
June 2022. Were the Group to conclude that it no longer retains
control, the Russian operations would be treated as if they had
been disposed of, with the associated assets and liabilities
derecognised .
2. Significant accounting policies
Going concern
The Directors have considered the applicability of the going
concern basis in the preparation of these financial statements.
This included the review of internal budgets and financial results
which show, taking into account reasonably plausible changes in
financial performance, that the Group will be able to operate
within the level of its current funding arrangements.
The Group has passed through the COVID pandemic successfully and
emerged with growth in its core established business. While there
is still some disruption in certain territories, healthcare
activities are continuing to return to normal levels. Through the
pandemic EKF has been able to learn new skills and develop a
business model which offers possibilities in the post-pandemic
world, the business has however now seen a significant reduction in
pandemic-related contract manufacturing and testing activities and
has adopted a pragmatic view that this will continue for the
remainder of the year.
The Group has revenues from customers in Russia and an entity
based there. As a result of the sanctions recently imposed on
Russia by the EU, the USA and other countries, there are enhanced
risks in respect of our Russian entity, including regulatory
restrictions and credit risk to cash balances, its ability to
collect debtors, and EKF's ability to import products into Russia.
In addition, action by the Russian Government is currently
restricting the Company's ability to pay dividends from its Russia
entity. In preparing a downside going concern forecast we have
discounted sales and cash from this region entirely.
The Group maintains a global supply chain and hence has
experienced supply-chain availability challenges and input-costs
inflationary pressure. Mitigating actions have been taken including
considering forward-looking sourcing requirements and responsible
price increases.
While any further economic disruption stemming from the pandemic
and other Global events is impossible to forecast, the strength of
the Group's balance sheet aligned to the continuing performance of
the business gives the Directors confidence that the business can
continue to meet its obligations as they fall due, even under our
worst-case scenarios, for at least the next 12 months. Accordingly,
the Directors are satisfied they can prepare the accounts on a
going concern basis.
3. 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 the development,
manufacture and supply of products and services into the in-vitro
diagnostic (IVD) market and other industries. This activity takes
place across various countries, such as the USA, Germany, Russia,
and the United Kingdom, 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 all segments should be maintained and
reported. In addition, the COMD considers the segmental revenue
performance of business segments.
The reportable segments derive their revenue primarily from the
development, manufacture and supply of products and services. Other
services include the servicing and distribution of third--party
company products under separate distribution agreements.
Currently the key operating performance measures used by the
CODM are Revenue and adjusted EBITDA (earnings before interest,
tax, depreciation and amortisation, adjusted for exceptional items
and share-based payments).
The segment information provided to the Board for the reportable
geographic segments is as follows:
Period ended 30 June 2022 unaudited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Income statement
Revenue 16,283 21,323 2,037 927 40,570
Inter-segment (2,701) (398) - - (3,099)
External revenue 13,582 20,925 2,037 927 37,471
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Adjusted EBITDA* 4,989 6,911 665 (2,854) 9,711
Share-based payment - - - (517) (517)
Exceptional items (795) 755) - (132) (1,682)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
EBITDA 4,194 6,156 665 (3,503) 7,512
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Depreciation (370) (898) (37) (200) (1,505)
Amortisation (468) (138) - (1,250) (1,856)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Operating profit/(loss) 3,356 5,120 628 (4,953) 4,151
Net finance costs (25) (3) 56 (39) (11)
Income tax (493) (996) (158) (70) (1,717)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Profit/(loss) for the
period 2,838 4,121 526 (5,062) 2,423
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Segment assets
Operating assets 32,707 89,337 1,047 (16,294) 106,797
Inter-segment assets (47) (16,699) - 203 (16,543)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External operating assets 32,660 72,638 1,047 (16,091) 90,254
Cash and cash equivalents 7,833 8,220 2,585 500 19,138
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Total assets 40,493 80,858 3,632 (15,591) 109,392
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Segment liabilities
Operating liabilities 1,046 24,045 439 14,524 40,054
Inter-segment liabilities 4,986 (19,199) - (3,347) (17,560)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External operating liabilities 6,032 4,846 439 11,177 22,494
Borrowings 222 - - - 222
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Total liabilities 6,254 4,846 439 11,177 22,716
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Other segmental information
Non-current assets - PPE 6,087 10,445 101 1,537 18,170
Non-current assets - Right-of-use
assets 139 1,072 4 280 1,495
Non-current assets - Intangibles 19,600 19,222 117 4,448 43,387
Intangible assets -additions 394 145 - 280 819
PPE - additions 357 1,769 - 41 2,167
Right-of-use assets - additions 78 72 - - 150
Year ended December 2021 audited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================================== =============== ============== ============ ============= ==============
Income statement
Revenue 39,665 38,974 3,286 8,514 90,439
Inter-segment (5,494) (2,918) - (191) (8,603)
==================================== =============== ============== ============ ============= ==============
External revenue 34,171 36,056 3,286 8,323 81,836
==================================== =============== ============== ============ ============= ==============
Adjusted EBITDA* 11,480 12,735 981 1,293 26,489
Exceptional items (452) - - 357 (95)
Share-based payments - - - 1,238 1,238
==================================== =============== ============== ============ ============= ==============
EBITDA 11,028 12,735 981 2,888 27,632
Depreciation (752) (938) (57) (294) (2,041)
Amortisation (1,525) (1,383) - (936) (3,844)
==================================== =============== ============== ============ ============= ==============
Operating profit/(loss) 8,751 10,414 924 1,658 21,747
Finance income - 7 38 - 45
Finance cost (31) (37) - (289) (357)
Income tax (2,806) (2,402) (193) 124 (5,277)
==================================== =============== ============== ============ ============= ==============
Profit for the year 5,914 7,982 769 1,493 16,158
==================================== =============== ============== ============ ============= ==============
Segment assets
Operating assets 29,672 59,803 431 29,860 119,766
Inter-segment assets (1,441) (16,712) - (6,835) (24,988)
==================================== =============== ============== ============ ============= ==============
External operating assets 28,231 43,091 431 23,025 94,778
Cash and cash equivalents 8,384 5,734 1,344 4,879 20,341
==================================== =============== ============== ============ ============= ==============
Total assets 36,615 48,825 1,775 27,904 115,119
==================================== =============== ============== ============ ============= ==============
Segment liabilities
Operating liabilities 6,387 24,796 167 13,319 44,669
Inter-segment liabilities (608) (17,703) - (6,677) (24,988)
==================================== =============== ============== ============ ============= ==============
External operating liabilities 5,779 7,093 167 6,642 19,681
Borrowings 303 393 - - 696
==================================== =============== ============== ============ ============= ==============
Total liabilities 6,082 7,486 167 6,642 20,377
Other segmental information
Non-current assets -
PPE 5,628 8,291 80 1,992 15,991
Non-current assets -
Right of use assets 111 1,379 18 367 1,875
Non-current assets -
Intangibles 15,429 16,911 76 9,478 41,894
Intangible assets - additions 694 8,171 - 521 9,386
PPE - additions 693 3,366 17 258 4,335
Right-of-use assets -
additions 82 1,082 31 156 1,351
==================================== =============== ============== ============ ============= ==============
Period ended 30 June 2021 unaudited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Income statement
Revenue 17,288 19,772 1,384 4,481 42,925
Inter-segment (2,746) (1,616) - (4) (4,366)
External revenue 14,542 18,156 1,384 4,477 38,559
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Adjusted EBITDA 5,326 7,521 364 (450) 12,761
Share-based payment - - - 1,392 1,392
Exceptional items 251 - - (17) 234
-------------------------- --------------------------- -------------- ------------ ------------- --------------
EBITDA 5,577 7,521 364 925 14,387
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Depreciation (342) (246) (11) (320) (919)
Amortisation (438) (61) - (1,412) (1,911)
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Operating
profit/(loss) 4,797 7,214 353 (807) 11,557
Net finance costs (8) 5 16 (146) (133)
Income tax (692) (1,464) (75) (6) (2,237)
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Profit/(loss) for the
period 4,097 5,755 294 (959) 9,187
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Segment assets
Operating assets 41,595 67,395 432 (618) 108,804
Inter-segment assets (143) (16,480) - (4,495) (21,118)
-------------------------- --------------------------- -------------- ------------ ------------- --------------
External operating
assets 41,452 50,915 432 (5,113) 87,686
Cash and cash
equivalents 4,382 6,177 966 9,259 20,784
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Total assets 45,834 57,092 1,398 4,146 108,470
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Segment liabilities
Operating liabilities 5,714 21,240 230 17,148 44,332
Inter-segment
liabilities (446) (17,794) - (2,878) (21,118)
-------------------------- --------------------------- -------------- ------------ ------------- --------------
External operating
liabilities 5,268 3,446 230 14,270 23,214
Borrowings 399 - - - 399
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Total liabilities 5,667 3,446 230 14,270 23,613
-------------------------- --------------------------- -------------- ------------ ------------- --------------
Other segmental
information
Non-current assets -
PPE 5,796 5,014 82 2,065 12,957
Non-current assets -
Right-of-use
assets 78 585 2 225 890
Non-current assets -
Intangibles 24,376 10,416 77 265 35,134
Intangible assets
-additions 366 120 - 137 623
PPE - additions 456 679 - 206 1,341
Right-of-use assets -
additions 44 (35) 15 103 127
* Adjusted EBITDA represents earnings before interest, tax,
depreciation and amortisation adjusted for exceptional items and
share-based payments
Disclosure of Group revenues by geographic location
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2022 June 2021 2021
GBP000 GBP000 GBP000
Americas
United States of America 17,620 16,016 31,522
Rest of Americas 1,771 1,026 3,248
Europe, Middles East and Africa
(EMEA)
Germany 4,245 4,286 7,942
United Kingdom 1,165 4,621 8,848
Ireland 5,229 4,384 14,292
Rest of Europe 1,641 2,920 4,616
Russia 2,037 1,384 3,286
Middle East 561 661 1,464
Africa 656 939 2,323
Rest of World
China 538 424 985
Rest of Asia 2,008 1,898 3,310
Total Revenue 37,471 38,559 81,836
=============== =============== =================
Revenue by business segment, which is presented for illustrative
purposes only, is as follows:
Unaudited Unaudited +/- %
6 months 6 months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
Point-of-Care 13,756 12,534 9.7%
Central Laboratory 6,295 6,325 (0.5%)
Life Sciences 2,024 1,033 95.9%
Contract Manufacturing 8,570 17,469 (50.9%)
Laboratory Testing 2,141 - n/a
Other 4,685 1,198 291.1%
--------------- --------------- ------------
Total revenue 37,471 38,559 (2.8%)
--------------- --------------- ------------
4. Exceptional items
Included within administration expenses and cost of sales are
exceptional items as shown below:
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note GBP000 GBP000 GBP000
Exceptional items include:
a (1,682) - -
* Restructuring costs
* Business reorganisation costs b - (17) (37)
* Warranty claim c - 251 285
* Settlement of warranty claim and deferred
consideration c - - (179)
* Acquisition costs d - - (164)
Exceptional items (1,682) 234 (95)
-------------- -------------- -----------------
(a) Costs associated with the transition and restructure of
certain operations in the US, UK and Germany
(b) Costs associated with the restructuring of the business
including the closure of EKF Ireland
(c) Change in the value of an estimated warranty claim which
offsets the deferred consideration of GBP3.2m (2020: GBP2.9m)
relating to a share-based payment to the former owner of
EKF-Diagnostic GmbH. The dispute was settled before 31 December
2021 resulting in a payment in cash to the former owner of
GBP179,000. The remaining warranty claim and deferred consideration
have both been written down and there is no further liability as at
30 June 2022.
(d) Professional fees relating to the acquisition of Advanced
Diagnostic Laboratory LLC in September 2021
5. Income tax
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 30 2021
June 2022 June 2021
GBP000 GBP000 GBP000
Current tax
Current tax on profit for
the period (1,692) (2,387) (5,096)
Adjustments for prior periods - (4) (96)
--------------- --------------- -----------------
Total current tax (1,692) (2,391) (5,192)
--------------- --------------- -----------------
Deferred tax
Origination and reversal of
temporary differences (25) 154 85
Total deferred tax (25) 154 85
--------------- --------------- -----------------
Income tax charge 1,717 (2,237) (5,277)
=============== =============== =================
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the parent by the weighted
average number of ordinary shares in issue during the period.
Diluted profit per share is calculated by adjusting the weighted
average number of ordinary shares outstanding assuming conversion
of all dilutive potential ordinary shares. The Company has one
category of dilutive potential ordinary share, being share
options.
Unaudited Unaudited
6 months 6 months Audited
ended 30 ended year ended
June 2022 30 June 31 December
2021 2021
GBP'000 GBP'000 GBP'000
Profit attributable to owners
of the parent 2,213 9,069 15,851
Weighted average number of
ordinary shares
in issue 459,474,072 454,993,227 457,001,067
Assumed conversion of share
awards 4,987 12,150 12,640
Assumed payment of equity deferred
consideration 157,580 4,043,940 3,944,226
-----------------
Weighted average number of
ordinary shares - diluted 459,636,639 459,049,317 460,957,933
---------------- -----------------
Pence Pence Pence
From continuing operations
Basic 0.48 1.99 3.47
Diluted 0.48 1.98 3.44
7. Property, plant and equipment
Group
Fixtures
Land and and Plant and Assets under Right-of-use
buildings fittings machinery Motor vehicles construct-ion assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------------- ---------------- --------------------- -------------------------- ------------------ ------------- -------------
Cost
At 1 January
2021 10,210 1,389 11,809 201 735 1,600 25,944
Additions 325 446 384 - 187 126 1,468
Transfers 58 332 (58) - (332) - -
Disposal (19) (37) (113) 7 - (64) (226)
Exchange
differences (209) (38) (414) - (18) (48) (727)
----------- ---------------------- ---------------- --------------------- -------------------------- ------------------
At 30 June
2021 10,365 2,092 11,608 208 572 1,614 26,459
Acquisition
of
subsidiary 4 - 818 - - 111 933
Additions 155 197 356 17 2,268 1,225 4,218
Transfers 161 (202) 397 - (356) - -
Disposals 12 (65) (134) (63) (13) - (222)
Exchange
differences 14 (10) 143 (2) (1) 60 204
----------- ---------------------- ---------------- --------------------- -------------------------- ------------------
At 31
December
2021 10,711 2,012 13,188 160 2,470 3,010 31,551
Additions 304 101 683 - 1,079 150 2,317
Transfers - 215 (215) - - - -
Disposal - - (213) - - (207) (420)
Exchange
differences 694 72 951 79 255 192 2,243
----------- ---------------------- ---------------- --------------------- -------------------------- ------------------ ------------- ---------------
At 30 June
2022 11,709 2,400 14,394 239 3,804 3,145 35,691
Depreciation
At 1 January
2021 2,300 1,102 8,214 108 - 581 12,305
Exchange
differences (41) (34) (301) (1) - (13) (390)
Disposal (19) (36) (110) 7 - (64) (222)
Transfers - 182 (182) - - - -
Charge for
the period 151 134 403 11 - 220 919
----------- ---------------------- ---------------- --------------------- -------------------------- ------------------ ------------- ---------------
At 30 June
2021 2,391 1,348 8,024 125 - 724 12,612
Exchange
differences 15 (8) 164 (1) - 18 188
Disposal 12 (65) (128) (56) - - (237)
Transfers - (182) 182 - - - -
Charge for
the period 177 156 383 13 - 393 1,122
----------- ---------------------- ---------------- --------------------- -------------------------- ------------------
At 31
December
2021 2,595 1,249 8,625 81 - 1,135 13,685
Exchange
differences 222 50 666 43 - 67 1,048
Disposal - - (188) - - (207) (395)
Impairment - - 51 - - 132 183
Transfers - 194 (194) - - - -
Charge for
the period 255 158 555 14 - 523 1,505
------------- ---------------
At 30 June
2022 3,072 1,651 9,515 138 - 1,650 16,026
----------- ---------------------- ---------------- --------------------- -------------------------- ------------------ ------------- ---------------
Net book value
30 June 2022 8,637 749 4,879 101 3,804 1,495 19,665
-------------
31 December 2021 8,116 763 4,563 79 2,470 1,875 17,866
---------- --------- ---------- -------- ---------- ---------- -------------
30 June 2021 7,974 744 3,584 83 572 890 13,847
---------- --------- ---------- -------- ---------- ---------- -------------
8. Intangible Fixed Assets
Group
Trademarks
trade names Customer Software
Goodwill & licences relationships Trade secrets Develop-ment costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------------ -------------------- -------------------- ------------------------- -------------- ------ -------------
Cost
At 1 January
2021 27,003 3,317 15,541 19,056 4,453 593 69,963
Additions - 238 - - 317 68 623
Disposal - (2) - - - - (2)
Exchange
differences (718) 275 (338) (498) (116) (14) (1,409)
At 30 June
2021 26,285 3,828 15,203 18,558 4,654 647 69,175
Acquisition
of
subsidiary 3,755 467 1,166 - - 2,684 8,072
Additions - (134) - - 820 5 691
Disposals (1,407) (17) (749) (1,073) (288) - (3,534)
Exchange
differences (75) (12) 86 (157) (11) 34 (135)
At 31
December
2021 28,558 4,284 15,706 17,328 5,023 3,370 74,269
Additions - 15 - - 802 2 819
Disposal - - - - - - -
Impairment (1,177) - - (3,950) (28) - (5,155)
Exchange
differences 1,553 296 1,422 355 257 359 4,242
------------ ------------------------ -------------------- -------------------- ------------------------- -------------- ------ ---------------
At 30 June
2022 28,934 4,595 17,128 13,733 6,054 3,731 74,175
------------ ------------------------ -------------------- -------------------- ------------------------- -------------- ------ ---------------
Amortisation
At 1 January
2021 2,605 2,947 11,556 14,461 1,343 - 32,912
Exchange
differences (54) (84) (251) (362) (30) - (781)
Disposal - (1) - - - - (1)
Impairment - - - - (8) - (8)
Charge for
the period - (52) 588 1,234 107 42 1,919
------------ ------------------------ -------------------- -------------------- ------------------------- -------------- ------ ---------------
At 30 June
2021 2,551 2,810 11,893 15,333 1,412 42 34,041
Exchange
differences 33 (60) 48 (92) 6 1 (64)
Disposal (1,407) (18) (749) (1,073) (288) - (3,535)
Impairment - - - - 8 - 8
Charge for
the period - 289 633 496 441 66 1,925
At 31
December
2021 1,177 3,021 11,825 14,664 1,579 109 32,375
Exchange
differences - 205 1,066 292 126 23 1,712
Disposal - - - - - - -
Impairment (1,177) - - (3,950) (28) - (5,155)
Charge for
the period - 110 705 494 228 319 1,856
------------ ------------------------ -------------------- -------------------- ------------------------- -------------- ------ ---------------
At 30 June
2022 - 3,336 13,596 11,500 1,905 451 30,788
------------ ------------------------ -------------------- -------------------- ------------------------- -------------- ------ ---------------
Net book value
30 June 2022 28,934 1,259 3,532 2,233 4,149 3,280 43,387
----------- ---------- ---------- ---------- ---------- ---------- -------------
31 December
2021 27,381 1,263 3,881 2,664 3,444 3,261 41,894
----------- ---------- ---------- ---------- ---------- ---------- -------------
30 June 2021 23,734 1,018 3,310 3,225 3,242 605 35,134
----------- ---------- ---------- ---------- ---------- ---------- -------------
9. Dividends
A dividend to shareholders of the holding company of 1.2p per
ordinary share has been provided during the period following
shareholder approval at the Annual General Meeting of the Company
in May 2022 (six months to 30 June 2021 and year to 31 December
2021: both 1.1p). It will be paid on 1 December 2022 to
shareholders on the register of members at the close of business on
4 November 2022.
10. Availability of this announcement
This announcement and the Group's Interim Report for the six
months ended 30 June 2022 are available from the Company's website,
www.ekfdiagnostics.com . If you would like to receive a hard copy
of the Interim Report, please contact the EKF Diagnostics Holdings
plc offices on +44 (0)29 2071 0570 to request a copy.
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END
IR BDGDCIDBDGDI
(END) Dow Jones Newswires
September 20, 2022 02:00 ET (06:00 GMT)
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