TIDMODX
RNS Number : 4256H
Omega Diagnostics Group PLC
24 November 2022
OMEGA DIAGNOSTICS GROUP PLC
("Omega" or the "Company" or the "Group")
INTERIM RESULTS
FOR THE SIX MONTHSED 30 SEPTEMBER 2022
Omega (AIM: ODX), the specialist medical diagnostics company
focused on promoting a personalised and functional approach to
health and nutrition, announces its unaudited interim results for
the six months ended 30 September 2022.
Operational Highlights:
-- Pivoted the business to focus solely and strategically on the
Health and Nutrition diagnostics business ( formerly known as Food
Intolerance)
-- Disposal of loss-making CD4 business for GBP6.3m completed in July 2022
o Positive WHO data received for VISITECT(R) CD4 test
o Accubio have approved the release from escrow of the full
GBP4.0m deferred consideration
-- Automation project delivered, bringing greater laboratory
efficiencies and helping to attract new customers
-- Lease extension agreed for current premises at Eden Research Park, Littleport
-- My Health Tracker by Omega app in final stage beta testing
Financial Highlights:
-- Revenue down by 18% to GBP3.4m (H1 2021: GBP4.2m)
-- Gross margin decreased to 54.0% (H1 2021: 64.4%)
-- Loss before tax of GBP0.7m (H1 2021: GBP0.0m)
-- Adjusted EBITDA loss(1) of GBP0.2m (H1 2021: profit GBP0.4m)
-- Loss on discontinued operations GBP1.4m (H1 2021: GBP3.4m)
-- Gross equity fund raise of GBP2.2m completed
-- Cash balance GBP2.7m (H1 2021: GBP4.7m)
(1) Adjusted for exceptional items, amortisation of intangible
assets and share based payment charges
Post period highlights:
-- Initial product range expansion complete, concluding with heads of terms signed for:
-- Development of a bespoke microbiome test
-- Development of a bespoke nutrigenomics test
-- My Health Tracker by Omega App in final beta testing phase ahead of January 2023 launch
-- New all-staff share incentive plan launched to help retain and motivate employees
Commenting on the results, Simon Douglas, Chairman, said: " We
are pleased to have executed on our strategic decision to re-align
the Group in the period, disposing of the loss-making business in
Alva, reducing operating costs and focusing solely on the
profitable and cash generative Health and Nutrition business and we
are delighted to be notified of the impending release of the full
CD4 deferred consideration of GBP4.0m. We have implemented the plan
we set out to shareholders, growing our installed base, introducing
our new digital platform and signing two partnership agreements
which will expand our product portfolio and drive additional
revenue growth. Our plans to create a US market presence will be
progressed following the receipt of the remainder of the CD4 sale
proceeds.
"Whilst we expect a stronger second half, our full year sales
will be marginally lower than previously anticipated to reflect the
delayed US investment plans. The performance expectations of the
remainder of our business remain unchanged and the Group continues
to target EBITDA break even this year."
Investor presentation
Jag Grewal, CEO, and Chris Lea, CFO, will provide a live
presentation relating to the Interim Results via the Investor Meet
Company platform today at 4:30pm GMT. The presentation is open to
all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and add
to meet OMEGA DIAGNOSTICS GROUP PLC via:
https://www.investormeetcompany.com/omega-diagnostics-group-plc/register-investor
The investor presentation will be available later this morning
on the Company website:
https://www.omegadx.com/Investor-Relations/Corporate-Information
The information communicated in this announcement is inside
information for the purposes of Article 7 of EU Regulation
596/2014.
Contacts:
Omega Diagnostics Group PLC www.omegadiagnostics.com
Jag Grewal, Chief Executive via Walbrook PR
Chris Lea, Chief Financial
Officer
finnCap Ltd Tel: 020 7220 0500
Geoff Nash/Edward Whiley (Corporate
Finance)
Alice Lane/ Harriet Ward (ECM)
Walbrook PR Limited Tel: 020 7933 8780 or omega@walbrookpr.com
Paul McManus / Lianne Applegarth Mob: 07980 541 893 / Mob: 07584 391 303
/ /
Sam Allen Mob: 07502 558 258
About Omega
Omega manufactures and distributes high quality in-vitro
diagnostic products for use in hospitals, clinics, laboratories and
healthcare practitioners in over 85 countries.
Chairman's Statement
This period marks the start of an exciting time and a new era
for Omega. The new management team has, in a relatively short time,
disposed of the Alva site to reduce operating costs, raised
additional capital and successfully divested the loss-making CD4
business, re-aligning the Group to allow the Board to exclusively
focus on the profitable and cash generative Health and Nutrition
business.
In terms of the continuing menu expansion of our diagnostic
tests, and in-line with our stated strategy, we were delighted to
announce the signing of two successful heads of term agreements
after the period end to develop both a bespoke microbiome and
nutrigenomic test. For a modest initial outlay, these tests have
the potential to generate more than GBP1m in additional revenue in
the year ending 31 March 2024.
We recently began beta testing a mobile application that is
available via Apple iPhone and Google Android. The My Health
Tracker by Omega App is a health and wellbeing tool designed to be
used alongside a trained healthcare professional, allowing the
patient to receive laboratory test results direct to their
smartphone thereby helping the patient make personalised changes to
their diet for optimal health. The app is currently in the final
beta testing stage, being trialled using our own CNS Lab data,
before the planned market launch early in the new year.
T he Board has made the sensible and prudent decision to delay
the planned investment in the US market until after receipt of the
remaining CD4 sale proceeds. We are delighted that Accubio share
the Board's view that the CD4 test performs well and that they have
now agreed to the release of the full GBP4.0m held in escrow,
rather than wait for the report to be published by the World Health
Organization. The Company remains committed to geographical
expansion in the US and remains confident for the prospects of
future growth in the US food sensitivity testing market, as it is
estimated to be the largest and most established market in the
world. This model would replicate our CNS Laboratory service
direct-to-health-care-professionals, which is growing strongly in
the UK this year.
Finally, we launched a new all-employee share incentive plan,
'Omega Diagnostics Group PLC Share Incentive Plan' which has been
adopted to support the principles of wider share ownership amongst
all the Company's staff, supporting retention and motivation of our
employees.
Financial performance
As previously indicated revenues have been softer than the prior
period, down 18% to GBP3.4m (2021: GBP4.2m) primarily due to a
number of product re-registrations being in process following a
significant regulatory-driven technical product change undertaken
in May 2022, and variability in the ordering profile of many of the
Group's FoodPrint(R) distributors, including those in the Middle
East and North America. The Board confirms its expectation that
revenues will be stronger in the second half of the financial
year.
Revenue by product group:
-- Sales of FoodPrint(R) were down 24% to GBP2.2m (2021:
GBP2.9m)
-- Five new FoodPrint(R) installations were implemented in the
period, with a further two installations implemented since the
period end
-- Representation secured in seven territories for the first
time, now selling into over 85 countries
-- A new FoodPrint(R) installation has been agreed for the US,
the first new installation in that market for five years
-- Sales of Food Detective(R) were GBP0.7m, down by 4% from the
prior year
-- After a two-year hiatus, the Group's largest partner in China
has now re-commenced ordering for delivery in H2, which will
support growth into the second part of the financial year.
-- CNS Lab sales were up 67% to GBP0.4m (2021: GBP0.3m)
-- Due in large part to extensive work with a business partner
to better commercialise FoodPrint(R) direct to consumer, as well as
the UK commercial team onboarding 134 new Practitioner accounts in
the first half of the financial year.
Gross profit from operations decreased to GBP1.9m (2021:
GBP2.7m) with a lower gross margin percentage of 54.0% (2021:
64.4%). The reduction in margin principally reflects the lower
proportion of the higher margin FoodPrint(R) tests in the product
mix , coupled with lower labour efficiency given the reduced
volumes. The Board are confident that margins will improve in H2 as
the Company will benefit from improved operational efficiencies
going forward.
Overheads reduced by 6% to GBP2.5m (2021: GBP2.7m). Despite
centralised sales and marketing activities being wholly allocated
to Health and Nutrition this year, significant reductions have been
achieved in corporate costs. During the period we also restructured
our quality assurance and regulatory teams, combining the two
functions to reduce costs and better reflect the needs of our new
business model.
In order to continually evolve as a business, remain competitive
and further improve the customer experience and efficiency,
especially for our larger customers, Omega has recently completed
the validation processes to allow laboratories to automate their
FoodPrint(R) testing using the Dynex DS2(R) instrument. This has
already allowed our partner in the United Arab Emirates to secure a
new three-year contract with the Dubai Health Authority and will
allow our larger laboratory customers to process more tests more
effectively and efficiently than ever before.
The Group continues to consider EBITDA and adjusted EBITDA
(adjusted for exceptional items and share based payment costs) as
being the more appropriate measures of profitability which are
better aligned with the cash generating activities of the business.
The EBITDA for the period was a loss of GBP0.3m (2021: profit of
GBP0.3m) and the adjusted EBITDA loss was GBP0.2m (2021: profit of
GBP0.4m).
The cash balance on 30 September 2022 was GBP2.7m (31 March
2022: GBP4.7m). The overdraft facility of GBP2.0m was withdrawn
effective 30 September 2022 as previously advised and the current
cash balance remains stable at GBP2.5m. The Company expects to
receive the full GBP4.0m of deferred consideration from the sale of
the CD4 business in the very near future.
Product Menu Expansion
As previously set out in the Company's strategic plan, in order
to build a wider menu of complementary gut health tests, the Board
remains committed to expanding the product menu and post-period end
have successfully concluded two partnership agreements for the
development of bespoke reports for microbiome and nutrigenomic
testing.
The first agreement was announced in October 2022, when the
Company signed a heads of terms partnership agreement to
commercialise microbiome testing into its existing sales channels.
We are working in partnership with our microbiome test provider to
develop and commercialise a bespoke report for Omega, utilising the
partner's proprietary software and Omega's sales channel, in order
to provide a more comprehensive gut health assessment.
Understanding the microbiome is the new frontier of understanding
chronic inflammatory conditions arising from poor gut health and is
an area the Company has recently seen a growing demand from its
existing customer base.
The second agreement was secured earlier this month, when the
Company signed heads of terms with a leading nutrigenomics software
provider to develop and commercialise a bespoke DNA report.
Nutrigenomics allows the healthcare professional to understand
genetic strengths and weaknesses, helping to identify dietary
changes that can help achieve better health.
These two tests require a combined up-front investment of
GBP0.3m which mainly covers the advance purchase of future test
reports and these new reports have the potential to generate over
GBP1m in additional revenue in the year ending 31 March 2024.
New facility update
The Company has long planned to relocate to a new, purpose-built
facility in Ely, Cambridgeshire, which would improve the
manufacturing environment and provide the capacity needed for
longer term expansion, however we continue to face unresolved
issues with regards to the completion of the building to the agreed
standard. The Company has appointed surveyors to identify remedial
works and to assist in the re-negotiation of the Agreement for
Lease, but it is not certain these issues can be overcome to the
Company's satisfaction. Given the funding challenges currently
faced by the new landlord and the likely timescale involved, an
agreement has been reached with the existing landlord to extend the
Littleport lease by two years to June 2025, thus providing
sufficient time to resolve the outstanding issues and facilitate an
orderly relocation in due course.
Discontinued Operations update
CD4
Effective 31 July 2022, Omega successfully disposed of its
loss-making CD4 business in Alva to Accubio Limited, a wholly-owned
subsidiary of Zhejiang Orient Gene Biotech Co. Ltd for up to
GBP6.3m, having concluded that the business would be more
successful under new ownership.
Under the terms of the sale the Company received an immediate
cash payment of approximately GBP1.3m for fixed assets and
inventory, representing the book values of these assets. As
previously announced, contingent on the successful outcome of the
WHO review of a now-completed clinical study in Kenya the Company
expected to receive up to an additional GBP4.0m for the
intellectual property and a future royalty income stream capped at
GBP1.0m in aggregate. The Company provided comments on the draft
performance evaluation report arising from the study in October,
with the main area of discussion being the content of the
instructions for use leaflet. To the Company's knowledge, all
outstanding points have now been resolved and the Company awaits
publication of the final report by the WHO. On 23 November 2022,
Accubio confirmed that in their opinion it was no longer necessary
to await the publication of the final performance evaluation report
by the WHO prior to funds being released and they have instructed
their legal advisers to release the full GBP4.0m to Omega with
immediate effect.
DHSC dispute
The Group remains in an ongoing dispute with the Department of
Health and Social Care ('DHSC') regarding the potential repayment
of a pre-production payment of GBP2.5m under a contract to
manufacture COVID-19 lateral flow tests. The negotiations are
continuing slowly, with mediation now expected to take place toward
the end of Q1 2023. The Company can confirm that it has recently
advised the DHSC of its substantial counter claim, claiming an
additional GBP1m+ over and above the disputed GBP2.5m
pre-production payment. Details of this counter claim will not be
made public as this may be prejudicial to the dispute resolution
process.
Outlook
We are pleased to have executed on our strategic decision to
re-align the Group in the period, disposing of the loss-making
business in Alva, reducing operating costs and focusing solely on
the profitable and cash generative Health and Nutrition business
and we are delighted to be notified of the impending release of the
full CD4 deferred consideration of GBP4.0m. We have implemented the
plan we set out to shareholders, growing our installed base,
introducing our new digital platform and signing two partnership
agreements which will expand our product portfolio and drive
additional revenue growth. Our plans to create a US market presence
will be progressed following the receipt of the remainder of the
CD4 sale proceeds.
Whilst we expect a stronger second half, our full year sales
will be marginally lower than previously anticipated to reflect the
delayed US investment plans. The performance expectations of the
remainder of our business remain unchanged and the Group continues
to target EBITDA break even this year.
Simon Douglas
Non-Executive Chairman
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2022
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
------------------------------------------------ ---- ------------- ------------- ----------
Continuing operations
Revenue 4 3,434 4,167 8,539
Cost of sales (1,581) (1,485) (3,437)
------------------------------------------------ ---- ------------- ------------- ----------
Gross profit 1,853 2,682 5,102
Administration costs (1,773) (2,146) (4,438)
Selling and marketing costs (730) (512) (1,256)
Other income - - -
------------------------------------------------ ---- ------------- ------------- ----------
Operating (loss)/profit before exceptional
items (650) 24 (592)
Exceptional items - - (337)
------------------------------------------------ ---- ------------- ------------- ----------
Operating (loss)/profit after exceptional
items (650) 24 (929)
Finance costs 5 (6) (12) (21)
------------------------------------------------ ---- ------------- ------------- ----------
(Loss)/profit before taxation (656) 12 (950)
Tax credit/(expense) 6 - 682 (459)
------------------------------------------------ ---- ------------- ------------- ----------
(Loss)/profit for the period from continuing
operations (656) 694 (1,409)
------------------------------------------------ ---- ------------- ------------- ----------
Discontinued operations
Loss after tax for the period from discontinued
operations 7 (1,431) (3,443) (9,924)
------------------------------------------------ ---- ------------- ------------- ----------
Loss for the period (2,087) (2,749) (11,333)
------------------------------------------------ ---- ------------- ------------- ----------
Other comprehensive income/(losses) to be
reclassified to profit and loss in subsequent
periods
Exchange differences on translation of foreign
operations 22 (18) 10
Recycling of translation reserve - 38 -
Tax charge - (7) -
------------------------------------------------ ---- ------------- ------------- ----------
Other comprehensive income for the period 22 13 10
------------------------------------------------ ---- ------------- ------------- ----------
Total comprehensive losses
for the period (2,065) (2,736) (11,323)
------------------------------------------------ ---- ------------- ------------- ----------
Earnings per share (EPS)
Basic and diluted EPS on loss for the period 8 (0.9)p (1.5)p (6.2)p
Earnings per share for continuing operations
Basic and diluted EPS on (loss)/profit for
the period from continuing operations 8 (0.3)p 0.4p (0.9)p
------------------------------------------------ ---- ------------- ------------- ----------
Consolidated Balance Sheet
as at 30 September 2022
As restated*
30 September 30 September 31 March
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
-------------------------------------------- ---- ------------ ------------- --------
ASSETS
Non-current assets
Intangibles 9 4,556 9,906 4,745
Property, plant and equipment 10 1,062 3,524 1,138
Right of use assets 10 62 1,692 106
Deferred taxation 1,120 2,754 1,107
-------------------------------------------- ---- ------------ ------------- --------
Total non-current assets 6,800 17,876 7,096
-------------------------------------------- ---- ------------ ------------- --------
Current assets
Inventories 1,074 2,232 1,094
Trade and other receivables 6,544 2,606 3,045
Cash and cash equivalents 2,712 4,698 1,605
-------------------------------------------- ---- ------------ ------------- --------
Total current assets 10,330 9,536 5,744
-------------------------------------------- ---- ------------ ------------- --------
Assets held for sale - - 4,995
-------------------------------------------- ---- ------------ ------------- --------
Total assets 17,130 27,412 17,835
-------------------------------------------- ---- ------------ ------------- --------
EQUITY AND LIABILITIES
Equity
Share capital 10,244 8,042 8,044
Share premium 25,100 25,331 25,340
Retained deficit (23,534) (13,064) (21,537)
Translation reserve (8) (21) (31)
Total equity 11,802 20,288 11,816
-------------------------------------------- ---- ------------ ------------- --------
Liabilities
Non-current liabilities
Long-term borrowings 35 628 51
Lease liabilities - 1,670 23
Corporation tax - 13 -
Deferred income 2,500 2,643 2,500
-------------------------------------------- ---- ------------ ------------- --------
Total non-current liabilities 2,535 4,954 2,574
-------------------------------------------- ---- ------------ ------------- --------
Current liabilities
Short-term borrowings 31 186 204
Lease liabilities 69 168 92
Trade and other payables 2,282 1,816 2,674
-------------------------------------------- ---- ------------ ------------- --------
Total current liabilities 2,382 2,170 2,970
-------------------------------------------- ---- ------------ ------------- --------
Liabilities directly associated with assets
held for sale 411 - 475
-------------------------------------------- ---- ------------ ------------- --------
Total liabilities 5,328 7,124 6,019
-------------------------------------------- ---- ------------ ------------- --------
Total equity and liabilities 17,130 27,412 17,835
-------------------------------------------- ---- ------------ ------------- --------
* See note 2 for details regarding the restatement.
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2022
As restated*
Share Share Retained Translation As restated*
capital premium deficit reserve Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Balance at 31 March 2021 as reported 8,028 25,288 (9,601) (41) 23,674
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Development costs written off 2 - - (290) - (290)
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Restated balance at 31 March 2021 8,028 25,288 (9,891) (41) 23,384
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Loss for the period to 30 September 2021 - - (2,749) - (2,749)
Other comprehensive losses - net exchange adjustments - - - (18) (18)
Other comprehensive (losses)/income - net exchange
adjustments recycled - - (38) 38 -
Other comprehensive losses - - (7) - (7)
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Total comprehensive (losses)/income for the period - - (2,794) 20 (2,774)
Share options exercised 14 43 - - 57
Share-based payments - - 90 - 90
Deferred tax debit related to share-based payments - - (469) - (469)
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Restated balance at 30 September 2021 8,042 25,331 (13,064) (21) 20,288
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Loss for the period to 31 March 2022 - - (8,584) - (8,584)
Other comprehensive income - net exchange adjustments - - - 28 28
Other comprehensive income/(losses) - net exchange
adjustments recycled - - 38 (38) -
Other comprehensive income - - 7 - 7
Total comprehensive losses for the period - - (8,539) (10) (8,549)
Share options exercised 2 9 - - 11
Share-based payments - - 192 - 192
Deferred tax debit related to share-based payments - - (126) - (126)
At 31 March 2022 8,044 25,340 (21,537) (31) 11,816
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Loss for the period to 30 September 2022 - - (2,087) - (2,087)
Other comprehensive income - net exchange adjustments - - - 23 23
Total comprehensive (losses)/income for the period - - (2,087) 23 (2,064)
Issue of share capital for cash consideration 2,200 - - - 2,200
Expenses in connection with share issue - (240) - - (240)
Share-based payments - - 90 - 90
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
Balance at 30 September 2022 10,244 25,100 (23,534) (8) 11,802
----------------------------------------------------- ---- ------- ------- ------------ ----------- ------------
* See note 2 for details regarding the restatement.
Consolidated Cash Flow Statement
for the six months ended 30 September 2022
As restated*
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------------- ------------- ---------
Cash flows generated from operations
(Loss)/profit for the year from continuing
operations (656) 694 (1,409)
Loss for the year from discontinued operations (1,431) (3,443) (9,924)
Adjustments for:
Gain on disposal of fixed assets - - (7)
Loss on disposal of Alva site fixed assets - - 226
Depreciation 120 301 671
Amortisation of intangible assets 225 352 618
Impairment and derecognition of intangible
assets 15 80 47
Impairment of fixed assets 27 - -
Impairment loss recognised on the remeasurement
to fair value 149 - 1,915
Share-based payments 90 90 282
Taxation - (682) 833
Omega Diagnostic GmbH liability settlement - - (126)
Finance costs 21 92 180
--------------------------------------------------- ------------- ------------- ---------
Cash outflow from operating activities before
working capital movement (1,440) (2,516) (6,694)
Decrease in trade and other receivables 672 1,569 1,130
(Increase)/decrease in inventories (168) 6 480
Decrease in trade and other payables (843) (856) (137)
Movement in grants (4) (5) (8)
Receipt of advance funding from the DHSC - 2,000 2,000
--------------------------------------------------- ------------- ------------- ---------
Cash (outflow)/inflow from operating activities (1,783) 198 (3,229)
--------------------------------------------------- ------------- ------------- ---------
Investing activities
Income from sale of inventory 852 - -
Income from sale of property, plant and equipment 463 - 985
Purchase of property, plant and equipment (25) (673) (968)
Purchase of intangible assets (51) (411) (510)
--------------------------------------------------- ------------- ------------- ---------
Net cash inflow/(outflow) in investing activities 1,239 (1,084) (493)
--------------------------------------------------- ------------- ------------- ---------
Financing activities
Finance costs - (1) (2)
Proceeds from issue of share capital 2,200 57 68
Expenses in connection with share issue (240) - -
Principal portion of asset finance payments (243) (104) (198)
Interest portion of asset finance payments (16) (19) (34)
Principal portion of lease liability payments (46) (86) (192)
Interest portion of lease liability payments (5) (72) (144)
--------------------------------------------------- ------------- ------------- ---------
Net cash inflow/(outflow) from financing
activities 1,650 (225) (502)
--------------------------------------------------- ------------- ------------- ---------
Net increase/(decrease) in cash and cash
equivalents 1,106 (1,111) (4,224)
Effects of exchange rate movements 1 (18) 2
Cash and cash equivalents at beginning of
period 1,605 5,827 5,827
--------------------------------------------------- ------------- ------------- ---------
Cash and cash equivalents at end of the period 2,712 4,698 1,605
--------------------------------------------------- ------------- ------------- ---------
Notes to the Interim Report
for the six months ended 30 September 2022
1. BASIS OF PREPARATION
For the purpose of preparing the 31 March 2022 annual financial
statements the Directors used IFRS as adopted by the EU and in
accordance with the AIM Rules issued by the London Stock Exchange.
In preparing these interim financial statements, the accounting
policies used in the Group's Annual Report for the year ended 31
March 2022 have been applied consistently. The Group has not
applied IAS 34 Interim Financial Reporting, which is not mandatory
for AIM companies, in the preparation of these interim financial
statements.
The interim financial statements are unaudited. The information
shown in the consolidated balance sheet as at 30 September 2022
does not constitute statutory accounts as defined in Section 435 of
the Companies Act 2006 and the information in respect of the year
ended 31 March 2022 has been extracted from the Group's 2022 Annual
Report which has been filed with the Registrar of Companies. The
report of the auditors on the financial statements contained within
the Group's 2022 Annual Report was unqualified and did not contain
a statement under sections 498 (2) and 498 (3) of Chapter 3, Part
16 of the Companies Act 2006. These interim financial statements
were approved by the Board of Directors on 23 November 2022.
2. RESTATEMENT OF COMPARATIVES
Group
Intangible assets
Following a review of intangible assets, one project has been
identified which was not adequately defined in previous reporting
periods and which does not meet the requirements of IAS 38, in that
the probability of generating future economic benefits arising from
the development expenditure cannot be established. The capitalised
costs relating to this project are GBP235,000, all of which were
incurred prior to 1 April 2020 and were incorrectly capitalised at
the time.
In addition, a legacy research and development project valued at
GBP55,000 has been identified which relates to the Group's
infectious disease business, which was sold in June 2018. This
amount was incorrectly not written off in the year ended 31 March
2019.
The costs associated with both of these projects have been
written off effective 31 March 2020 through means of a prior year
adjustment in accordance with the requirements of IAS 8, resulting
in a reduction of the carrying value of intangible assets of
GBP290,000 as at that date. There has been no impact on the
earnings reported for the period ended 30 September 2021.
Deferred tax
Historically, deferred tax assets and liabilities were
incorrectly reported as separate balances in prior years. The 30
September 2021 balance sheet has been restated to net off the
deferred tax asset and liability, reducing the previously reported
deferred tax asset by GBP1,200,000 with a corresponding reduction
in the deferred tax liability.
2. RESTATEMENT OF COMPARATIVES (CONTINUED)
The effect of the restatements noted above on the consolidated
balance sheet as at 30 September 2021 is as follows:
As reported Restatement As restated
30 September 30 September 30 September
2021 2021 2021
GBP'000 GBP'000 GBP'000
------------------------------ ------------ ------------ ------------
ASSETS
Non-current assets
Intangibles 10,196 (290) 9,906
Property, plant and equipment 3,524 - 3,524
Right of use assets 1,692 - 1,692
Deferred taxation 3,954 (1,200) 2,754
------------------------------ ------------ ------------ ------------
Total non-current assets 19,366 (1,490) 17,876
------------------------------ ------------ ------------ ------------
Current assets
Inventories 2,232 - 2,232
Trade and other receivables 2,606 - 2,606
Cash and cash equivalents 4,698 - 4,698
------------------------------ ------------ ------------ ------------
Total current assets 9,536 - 9,536
------------------------------ ------------ ------------ ------------
Total assets 28,902 (1,490) 27,412
------------------------------ ------------ ------------ ------------
EQUITY AND LIABILITIES
Equity
Issued capital 33,373 -- 33,373
Retained deficit (12,774) (290) (13,064)
Translation reserve (21) -- (21)
------------------------------ ------------ ------------ ------------
Total equity 20,578 (290) 20,288
------------------------------ ------------ ------------ ------------
Liabilities
Non-current liabilities
Long-term borrowings 628 - 628
Lease liabilities 1,670 - 1,670
Corporation tax 13 - 13
Deferred tax 1,200 (1,200) -
Deferred income 2,643 - 2,643
------------------------------ ------------ ------------ ------------
Total non-current liabilities 6,154 (1,200) 4,954
------------------------------ ------------ ------------ ------------
Current liabilities
Short-term borrowings 186 - 186
Lease liabilities 168 - 168
Trade and other payables 1,816 - 1,816
------------------------------ ------------ ------------ ------------
Total current liabilities 2,170 - 2,170
------------------------------ ------------ ------------ ------------
Total liabilities 8,324 (1,200) 7,124
------------------------------ ------------ ------------ ------------
Total equity and liabilities 28,902 (1,490) 27,412
------------------------------ ------------ ------------ ------------
3. SEGMENT INFORMATION
Following the withdrawal from COVID-19 products and the decision
taken in March 2022 to dispose of the CD4 business, the sale of
which was completed on 31 July 2022, the only remaining division is
Health and Nutrition. The Global Health division specialised in the
research, development, production and marketing of kits to aid the
diagnosis of infectious diseases, including COVID-19.
The Health and Nutrition division specialises in the research,
development and production of kits to aid the detection of immune
reactions to food. It also provides clinical analysis to the
general public, clinics and health professionals.
The Corporate segment consists of centralised corporate costs
which are not allocated to the trading activities of the Group.
Inter segment transfers or transactions are entered into under
the normal commercial conditions that would be available to
unrelated third parties.
3. SEGMENT INFORMATION (CONTINUED)
Business segment information
Health
and
Nutrition Corporate Total
6 months to 30 September 2022 GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- -------
Revenue 3,533 - 3,533
Inter-segment revenue (99) - (99)
---------------------------------- --------- --------- -------
Total revenue 3,434 - 3,434
Cost of sales (1,581) - (1,581)
---------------------------------- --------- --------- -------
Gross profit 1,853 - 1,853
Operating costs (1,947) (556) (2,503)
---------------------------------- --------- --------- -------
Operating loss before exceptional
items (94) (556) (650)
Exceptional items - - -
---------------------------------- --------- --------- -------
Operating loss after exceptional
items (94) (556) (650)
Depreciation 106 - 106
Amortisation 225 - 225
---------------------------------- --------- --------- -------
EBITDA 237 (556) (319)
---------------------------------- --------- --------- -------
Exceptional items - - -
Share-based payment charges - 90 (90)
---------------------------------- --------- --------- -------
Adjusted EBITDA 237 (466) (229)
Share-based payment charges - (90) (90)
Depreciation (106) - (106)
Amortisation (225) - (225)
Net finance costs (6) - (6)
Exceptional costs - - -
---------------------------------- --------- --------- -------
Loss before tax (100) (556) (656)
Exceptional items - - -
Share-based payment charges - 90 90
Amortisation 49 - 49
---------------------------------- --------- --------- -------
Adjusted loss before tax (51) (466) (517)
---------------------------------- --------- --------- -------
Health
and
Nutrition Corporate Total
6 months to 30 September 2021 GBP'000 GBP'000 GBP'000
------------------------------------------- --------- --------- -------
Revenue 4,297 - 4,297
Inter-segment revenue (130) - (130)
------------------------------------------- --------- --------- -------
Total revenue 4,167 - 4,167
Cost of sales (1,485) - (1,485)
------------------------------------------- --------- --------- -------
Gross profit 2,682 - 2,682
Operating costs (1,852) (806) (2,658)
------------------------------------------- --------- --------- -------
Operating profit/(loss) before exceptional
items 830 (806) 24
Exceptional items - - -
------------------------------------------- --------- --------- -------
Operating profit/(loss) after exceptional
items 830 (806) 24
Depreciation 96 - 96
Amortisation 220 - 220
------------------------------------------- --------- --------- -------
EBITDA 1,146 (806) 340
------------------------------------------- --------- --------- -------
Share-based payment charges - 90 90
Exceptional items - - -
------------------------------------------- --------- --------- -------
Adjusted EBITDA 1,146 (716) 430
------------------------------------------- --------- --------- -------
Share-based payment charges - (90) (90)
Depreciation (96) - (96)
Amortisation (220) - (220)
Exceptional items - - -
Net finance costs (12) - (12)
------------------------------------------- --------- --------- -------
Profit/(loss) before tax 818 (806) 12
Exceptional items - - -
Share-based payment charges - 90 90
Amortisation 49 - 49
------------------------------------------- --------- --------- -------
Adjusted profit/(loss) before tax 867 (716) 151
------------------------------------------- --------- --------- -------
The adjusted profit/(loss) before taxation is a key measure of
the Group's trading performance used by the Directors. The reported
numbers are non-GAAP measures.
4. REVENUES - Continuing operations
6 months 6 months
to to
30 September 30 September
2022 2021
GBP'000 GBP'000
--------------------------- ------------- -------------
Revenues
UK 423 238
Rest of Europe 1,125 1,378
North America 606 894
South/Central America 141 242
India 286 279
Asia and the Far East 651 592
Africa and the Middle East 202 544
--------------------------- ------------- -------------
3,434 4,167
--------------------------- ------------- -------------
6 months 6 months inc/(dec)
to to
30 September 30 September
2022 2021
GBP'000 GBP'000 %
-------------- -------------- ----------
FoodPrint (R) 2,239 2,947 (24)%
Food Detective (R) 706 735 (4)%
CNS laboratory service 420 251 67%
Food ELISA/other 69 234 (71)%
-------------- -------------- ----------
3,434 4,167 (18)%
-------------- -------------- ----------
5. FINANCE COSTS
6 months 6 months
to to
30 September 30 September
2022 2021
Continuing operations GBP'000 GBP'000
--------------------------------------------------------- ------------- -------------
Interest payable on bank overdraft - 2
Interest payable on lease liabilities 4 8
Interest on hire purchase and asset finance arrangements 2 2
--------------------------------------------------------- ------------- -------------
6 12
--------------------------------------------------------- ------------- -------------
6. TAXATION
6 months 6 months
to to
30 September 30 September
2022 2021
Continuing operations GBP'000 GBP'000
------------------------------------- ------------- -------------
Tax credited in the income statement
Current tax - current year - (13)
Current tax - prior year adjustment - -
Deferred tax - current year - 695
Deferred tax - prior year adjustment - -
------------------------------------- ------------- -------------
- 682
------------------------------------- ------------- -------------
Tax relating to items charged to other comprehensive
income
Deferred tax on net exchange adjustments -(7)
----------------------------------------------------- ---
-(7)
----------------------------------------------------- ---
6. TAXATION (CONTINUED)
Reconciliation of total tax credit
Factors affecting the tax credit for the period: GBP'000 GBP'000
------------------------------------------------------- ------- -------
Loss/(profit) taxable (656) 12
------------------------------------------------------- ------- -------
Effective rate of taxation 19% 19%
Loss before tax multiplied by the effective rate
of tax - 2
Effects of:
Expenses not deductible for tax purposes and permanent
differences - (629)
Research and development credits - (30)
Deferred tax asset not recognised 125 -
Adjustment for future tax deductions on notional
gains on unexercised employee share options - (17)
Tax under/(over) provided in prior years - (13)
Adjustment due to different overseas tax rate - 5
------------------------------------------------------- ------- -------
Tax credit for the period - (682)
------------------------------------------------------- ------- -------
7. DISCONTINUED OPERATIONS
6 months 6 months
to to
30 September 30 September
2022 2021
GBP'000 GBP'000
------------------------------------------------- ------------- -------------
Revenue 657 1,560
Cost of sales (567) (2,274)
------------------------------------------------- ------------- -------------
Gross profit/(loss) 90 (714)
Administration costs (1,361) (2,201)
Selling and marketing costs - (302)
Other income 4 4
------------------------------------------------- ------------- -------------
Operating loss before exceptional items (1,267) (3,213)
Exceptional items - (150)
------------------------------------------------- ------------- -------------
Operating loss after exceptional items (1,267) (3,363)
Finance costs (15) (80)
Impairment loss recognised on the remeasurement
to fair value less costs to sell (149) -
------------------------------------------------- ------------- -------------
Loss before taxation (1,431) (3,443)
Tax - -
------------------------------------------------- ------------- -------------
Loss for the period from discontinued activities (1,431) (3,443)
------------------------------------------------- ------------- -------------
Adjusted loss before taxation
6 months 6 months
to to
30 September 30 September
2022 2021
GBP'000 GBP'000
------------------------------------------------- ------------- -------------
Loss for the period from discontinued activities (1,431) (3,443)
Exceptional items - 150
Amortisation of intangible assets 7 3
------------------------------------------------- ------------- -------------
Adjusted loss for the period from discontinued
activities (1,424) (3,290)
------------------------------------------------- ------------- -------------
Earnings per share
6 months 6 months
to to
30 September 30 September
2022 2021
GBP'000 GBP'000
---------------------------------------------------------- ------------- -------------
Basic, loss for the period from discontinued operations (0.6)p (1.9)p
Diluted, loss for the period from discontinued operations (0.6)p (1.9)p
Adjusted, loss for the period from discontinued
operations (0.6)p (1.8)p
---------------------------------------------------------- ------------- -------------
7. DISCONTINUED OPERATIONS (CONTINUED)
The major classes of assets and liabilities of the Global Health
business as at 30 September 2022 are, as follows:
30 September
2022
GBP'000
------------------------------------------------------------ ------------
Assets
Property, plant and equipment -
------------------------------------------------------------ ------------
Total assets held for sale -
------------------------------------------------------------ ------------
Liabilities
Borrowings (411)
------------------------------------------------------------ ------------
Total liabilities directly associated with the assets held
for sale (411)
------------------------------------------------------------ ------------
Net liabilities directly associated with the disposal group (411)
------------------------------------------------------------ ------------
The property, plant and equipment relate primarily to COVID-19
plant and equipment no longer used in the business which have all
been written down to zero value, the liabilities relate to the hire
purchase on these assets.
8. EARNINGS PER SHARE
6 months 6 months
to to
30 September 30 September
2022 2021
GBP'000 GBP'000
------------------------------------------------- ------------- -------------
Loss attributable to equity holders of the Group
Continuing operations (656) 694
Discontinued operations (1,431) (3,443)
------------------------------------------------- ------------- -------------
Loss attributable to equity holders of the Group
for basic earnings (2,087) (2,749)
------------------------------------------------- ------------- -------------
2022 2021
Continuing operations Number Number
------------------------------------------ ----------- -----------
Weighted average number of shares 225,443,711 182,269,637
Share options - 6,814,300
------------------------------------------ ----------- -----------
Diluted weighted average number of shares 225,443,711 189,083,937
------------------------------------------ ----------- -----------
The number of shares in issue at the period end was 237,685,180.
Basic earnings per share are calculated by dividing profit for the
year attributable to ordinary equity holders of the Group by the
weighted average number of ordinary shares outstanding during the
year.
Diluted earnings per share are calculated by dividing the loss
attributable to ordinary equity holders of the Group by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares. Diluting events are excluded from the
calculation when the average market price of ordinary shares is
lower than the exercise price.
Adjusted earnings per share on loss for the period
The Group presents adjusted earnings per share which is
calculated by taking adjusted loss before taxation and adding the
tax credit in order to allow shareholders to understand better the
elements of financial performance in the year, so as to facilitate
comparison with prior periods and to assess better trends in
financial performance.
6 months 6 months
to to
30 September 30 September
2022 2021
GBP'000 GBP'000
------------------------------------------------- ------------- -------------
Loss attributable to equity holders of the Group (2,087) (2,749)
Exceptional items - 150
Amortisation of intangible assets 56 52
Share-based payment charges 90 90
------------------------------------------------- ------------- -------------
Adjusted loss attributable to equity holders of
the Group (1,941) (2,457)
------------------------------------------------- ------------- -------------
8. EARNINGS PER SHARE (CONTINUED)
Adjusted loss for the year - continuing operations
The reported numbers are non-GAAP measures
6 months 6 months
to to
30 September 30 September
2022 202 1
GBP'000 GBP'000
-------------------------------------------------------- ------------- --------------
(Loss)/profit for the period from continuing operations (656) 694
Exceptional items - -
Amortisation of intangible assets 49 49
Share-based payment charges 90 90
-------------------------------------------------------- ------------- --------------
Adjusted (loss)/profit for the period from continuing
operations (517) 833
-------------------------------------------------------- ------------- --------------
Adjusted EPS on loss for the period (0.8)p (1.3)p
Adjusted EPS on (loss)/profit for the period from
continuing operations (0.2)p 0.5p
Adjusted (loss)/profit before taxation, which is a key measure
of the Group's trading performance used by the Directors, is
derived by taking statutory profit before taxation and adding back
exceptional items, amortisation of intangible assets (excluding
development costs) and share-based payment charges
9. INTANGIBLES
As restated*
Licences/ Technology Customer Development As restated*
Goodwill software assets relationships costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- --------- ---------- ------------- ------------ ------------
Cost
At 31 March 2021 as reported 3,017 1,633 1,975 100 14,627 21,352
Prior year adjustment - - - - (290) (290)
----------------------------- -------- --------- ---------- ------------- ------------ ------------
Restated at 31 March 2021 3,017 1,633 1,975 100 14,337 21,062
Additions - - - - 78 78
Additions - internally
generated - - - - 368 368
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 30 September 2021 3,017 1,633 1,975 100 14,783 21,508
Additions - internally
generated - - - - 135 135
Currency translation - 1 - - - 1
Reclassified as assets
held for sale - - - - (5,706) (5,706)
Disposals - - - - (31) (31)
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 31 March 2022 3,017 1,634 1,975 100 9,181 15,907
Additions - - - - 16 16
Additions - internally
generated - - - - 35 35
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 31 March 2022 3,017 1,634 1,975 100 9,232 15,958
----------------------------- -------- --------- ---------- ------------- ------------ ------------
Accumulated amortisation
At 31 March 2021 - 1,597 1,341 100 8,132 11,170
Amortisation charge in
the period - 3 49 - 300 352
Impairment charge - - - - 80 80
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 30 September 2021 - 1,600 1,390 100 8,512 11,602
Amortisation charge in
the period - 3 50 - 213 266
Impairment charge - 16 - - (80) (64)
Reclassified as assets
held for sale - - - - (642) (642)
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 31 March 2022 - 1,619 1,440 100 8,003 11,162
Amortisation charge in
the period - - 49 - 176 225
Impairment charge - 15 - - - 15
At 31 March 2022 - 1,634 1,489 100 8,179 11,402
----------------------------- -------- --------- ---------- ------------- ------------ ------------
Net book value
At 30 September 2022 3,017 - 486 - 1,053 4,556
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 31 March 2022 3,017 15 535 - 1,178 4,745
----------------------------- -------- --------- ---------- ------------- ------------ ------------
At 30 September 2021 3,017 33 585 - 6,271 9,906
----------------------------- -------- --------- ---------- ------------- ------------ ------------
* See note 2 for details regarding the restatement.
10. FIXED ASSETS
Right Plant
of use Leasehold and
assets improvements machinery Total
Consolidated GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- ------- ------------ --------- -------
Cost
At 31 March 2021 2,259 1,409 5,411 9,079
Additions - 256 417 673
------------------------------------- ------- ------------ --------- -------
At 30 September 2021 2,259 1,665 5,828 9,752
Additions 64 138 157 359
Disposals (1,889) (1,107) (1,378) (4,374)
Reclassified as assets held for sale (22) - (2,147) (2,169)
Currency translation - - 1 1
------------------------------------- ------- ------------ --------- -------
At 31 March 2022 412 696 2,461 3,569
Additions - 1 24 25
Currency translation - - 1 1
------------------------------------- ------- ------------ --------- -------
At 30 September 2022 412 697 2,486 3,595
------------------------------------- ------- ------------ --------- -------
Accumulated depreciation
At 31 March 2021 458 679 3,063 4,200
Charge in the period 109 42 185 336
At 30 September 2021 567 721 3,248 4,536
Charge in the period 127 49 230 406
Disposals (375) (286) (970) (1,631)
Reclassified as assets held for sale (13) - (974) (987)
Currency translation - - 1 1
------------------------------------- ------- ------------ --------- -------
At 31 March 2022 306 484 1,535 2,325
Charge in the period 44 - 76 120
Disposals - - 27 27
Currency translation - (1) - (1)
------------------------------------- ------- ------------ --------- -------
At 30 September 2022 350 483 1,638 2,471
------------------------------------- ------- ------------ --------- -------
Net book value
At 30 September 2022 62 214 848 1,124
------------------------------------- ------- ------------ --------- -------
At 31 March 2022 106 212 926 1,244
------------------------------------- ------- ------------ --------- -------
At 30 September 2021 1,692 944 2,580 5,216
------------------------------------- ------- ------------ --------- -------
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END
IR DBBDBUSDDGDX
(END) Dow Jones Newswires
November 24, 2022 02:00 ET (07:00 GMT)
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