TIDMPXS
RNS Number : 2479Y
Provexis PLC
29 December 2023
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
29 December 2023
Provexis plc
UNAUDITED INTERIM RESULTS FOR SIX MONTHS TO 30 SEPTEMBER
2023
Provexis plc ("Provexis" or the "Company"), the business that
develops, licenses and sells the proprietary, scientifically-proven
Fruitflow(R) heart-health functional food ingredient, announces its
unaudited interim results for the six months ended 30 September
2023.
Highlights
-- DSM's existing and prospective pipeline customers for
Fruitflow as a straight ingredient transferred to become direct
customers of Provexis WEF 1 January 2023, and the customer transfer
process has continued to progress well, with strong and growing
interest in the Company's Fruitflow II SD ingredient.
-- Total revenue for the period GBP388k (2022: GBP179k), to
include GBP299k from Fruitflow II SD (2022: DSM Alliance Agreement
income of GBP97k) and GBP89k (2022: GBP82k) from Fruitflow+
Omega-3.
-- Fruitflow II SD sales of more than GBP270k have been made in
the quarter ending on 31 December 2023, and confirmed sales orders
for Fruitflow II SD in excess of GBP320k are currently being
processed. The Company is dealing with numerous sales enquiries
from existing and new customers for further direct sales of
Fruitflow in 2024 and beyond.
-- The new long term partnership with DSM based on the use of
Fruitflow to confer health benefits in modulating the gut
microbiome of humans has continued to progress well. Strong launch
of this new technology by DSM in January 2023, with widespread
trade press coverage and encouraging early interest from some
significant global customers.
-- Planned launch by BYHEALTH, a circa GBP4bn listed Chinese
dietary supplement business, of a number of Fruitflow based
products in the Chinese market has been progressing well, with
potential sales volumes remaining at a significant multiple of
existing Fruitflow sales.
-- BYHEALTH has been working since 2015 on an extensive
regulatory submission to the Chinese State Administration for
Market Regulation (SAMR) for Fruitflow, seeking to establish a new
permitted health function claim for foods such as Fruitflow that
can demonstrate an anti-platelet effect.
-- In August 2023 BYHEALTH submitted: i) the first application
under the new SAMR Implementation Rules, seeking to obtain a new
permitted health function claim for foods such as Fruitflow which
help to 'maintain normal platelet aggregation function and benefit
blood flow health'; and ii) some related product registration
applications. BYHEALTH stated publicly that it has been working on
the project since 2015, with 'tens of millions of funds' (RMB)
invested by BYHEALTH in the research and development work.
-- The exclusive Fruitflow supply and distribution agreement
which was agreed with BYHEALTH in 2021 took full effect from 1
January 2023, with exclusive supply and distribution rights for
BYHEALTH to commercialise Fruitflow in China and Australia.
Provexis Chairman Dawson Buck and CEO Ian Ford commented:
'The Company is pleased to report on another strong period of
progress, to include GBP388k of revenue in the period from sales of
the Company's Fruitflow II SD ingredient and its consumer product
Fruitflow+ Omega-3.
Fruitflow II SD sales of more than GBP270k have been made in the
quarter ending on 31 December 2023, and confirmed sales orders for
Fruitflow II SD in excess of GBP320k are currently being processed.
The Company is dealing with numerous sales enquiries from existing
and new customers for further direct sales of Fruitflow in 2024 and
beyond.
The new long term partnership with DSM based on the use of
Fruitflow to confer health benefits in modulating the gut
microbiome of humans has continued to progress well, with a strong
launch of this new technology by DSM in January 2023 to include
widespread trade press coverage. There has been some encouraging
interest in this technology from some significant global
customers.
The Company has been delighted to welcome and serve the majority
of DSM's existing customers for Fruitflow from January this year,
and was pleased to take over control of the supply chain /
production process for Fruitflow at the same time.
There have been some clear synergies from January 2023 as the
Company has been looking to sell Fruitflow to: (i) former DSM
customers for Fruitflow; (ii) DSM and its Premix and Market-Ready
Solutions businesses; (iii) new customers for Fruitflow as a
straight ingredient; and (iv) BYHEALTH and its customers, through
the Company's long term supply and distribution agreement for
Fruitflow with BYHEALTH. Provexis will continue to sell its
Fruitflow+ Omega-3 dietary supplement product direct to consumers,
and serve its Chinese Cross-Border e-commerce distributor for this
product in China.
Provexis has been working with BYHEALTH for more than seven
years to support the planned launch of a number of Fruitflow based
products in the Chinese market. Clinical studies conducted in China
are typically required to obtain the necessary regulatory
clearances in China, and a significant investment in eight separate
Fruitflow studies has been undertaken at BYHEALTH's expense.
Completed studies have shown excellent results in use for
Fruitflow, and they provide strong evidence for the efficacy of
Fruitflow on platelet function.
The Chinese regulatory system for functional health food
ingredients, such as Fruitflow, is governed by the State
Administration for Market Regulation (the 'SAMR') and it is based
on a defined list of permitted health function claims which brand
owners are permitted to use on product labels.
In August 2023 the Company was delighted to report that BYHEALTH
had submitted: i) the first application for a new permitted health
function claim and ii) some related product registration
applications.
The significance of these major developments for Fruitflow in
China is further outlined here
www.nutraingredients-asia.com/Article/2023/09/05/china-set-to-approve-new-function-claims-for-health-foods#.
BYHEALTH has noted that it has been working on the project since
2015, with 'tens of millions of funds' (RMB) invested by BYHEALTH
in the research and development work.
Fruitflow is well placed to play an important role in the
Chinese cardiovascular health market under the permitted health
function claim legislation, and we look forward to working closely
with BYHEALTH seeking to maximise the commercial success of this
agreement for the benefit of both companies.
The Company has developed a strong, long lasting and
wide-ranging patent portfolio for Fruitflow, and it owns outright
four existing patent families for Fruitflow. The new microbiome
patent application takes this to a potential total of five patent
families, with potential patent protection now running out to 2042.
The four existing patent families have a truly global footprint,
and the Company also holds other valuable intellectual property and
trade secrets for Fruitflow. The intellectual property for
Fruitflow is of fundamental importance to the Company and its
current and future commercial partners, to include DSM and
BYHEALTH, and it underpins the numerous commercial opportunities
which the Company and its partners are pursuing for Fruitflow.
The Company expects that the new gut microbiome patent
application, the significant changes to the sales and supply chain
structure for Fruitflow from January 2023, and the recent BYHEALTH
regulatory developments in China, will have a strongly beneficial
effect on the current and future commercial prospects for Fruitflow
and the business worldwide.
The Company would like to thank its customers and shareholders
for their continued support, and the Board remains strongly
positive about the outlook for Fruitflow and the Provexis business
for the coming year and beyond.'
For further information please contact:
Provexis plc Tel: 07490 391888
Ian Ford, CEO enquiries@provexis.com
Dawson Buck, Non-executive Chairman
Allenby Capital Limited (Nominated Adviser Tel: 020 3328 5656
and Broker)
Nick Naylor / Lauren Wright / Liz Kirchner
Chairman and CEO's statement
The Company has had an extremely active first six months of the
year, and it has made some further significant progress with the
commercial prospects of its innovative, patented Fruitflow(R)
heart-health ingredient.
DSM Nutritional Products - new agreements for Fruitflow(R)
Provexis entered into a long-term Alliance Agreement with DSM
Nutritional Products in 2010 to commercialise Fruitflow through
sales as an ingredient to brand owners in the food, beverage and
dietary supplement categories, with a contractual term for the
Agreement which ran to 31 December 2022.
More than 100 regional consumer healthcare brands have now been
launched by direct customers of DSM, and a number of further
regional brands have been launched through DSM's distributor
channels. An increasing number of commercial projects have been
initiated by DSM with prospective customers in recent years,
including some prospective customers which are part of global
businesses, and the total projected annual sales value of the
prospective sales pipeline for Fruitflow, which is now shared
across Provexis and DSM, continues to stand at a substantial
multiple of existing annual sales.
In June 2022 Provexis announced it had secured two new
agreements with DSM for Fruitflow, to replace the Alliance
Agreement: (i) a Transfer of Business agreement and (ii) a Premix
and Market-Ready Solutions supply agreement, which both took effect
on 1 January 2023.
The Company also announced the filing of a new patent
application in June 2022 relating to the use of Fruitflow to confer
health benefits in modulating the gut microbiome of humans. This
followed the completion of a successful human study, the results of
which strongly support the use of Fruitflow for modulating gut
microbiota to confer a number of health benefits, to include a
reduction in TMAO (trimethylamine-n-oxide).
Under the terms of the two new agreements with DSM, and the new
patent application:
-- DSM's existing and prospective pipeline customers for
Fruitflow as a straight ingredient (not a Premix or Market-Ready
solution) transferred to become direct customers of Provexis WEF 1
January 2023, and the Company took over the wholly outsourced
supply chain / production process for Fruitflow from DSM at that
time.
-- A royalty will be payable to DSM on the gross profits
generated from Fruitflow sales to customers transferred from DSM
over the first four years of the Transfer of Business
agreement.
-- From 1 January 2023 the net profit accruing to Provexis on
sales of Fruitflow in the calendar year - on a pro-forma basis,
assuming like for like sales and margins - would be materially
ahead of the net share of the profit that would have accrued to
Provexis with like for like sales and margins under the 2010
Alliance Agreement. On the same pro-forma basis, assuming like for
like sales and margins, the net profit accruing to Provexis would
further increase in each of the subsequent three calendar
years.
-- A new partnership was agreed with DSM in 2022 relating to the
gut microbiome patent, giving DSM preferential access to the use,
marketing, and sale of Fruitflow based products which are based on
the patent, subject to certain milestones which have been agreed
between the parties.
-- In addition to the patent's core claim for Fruitflow, for
modulating gut microbiota to confer a number of health benefits,
the patent also sets out some potential new uses for Fruitflow in
treating a wide variety of human health conditions, beyond
Fruitflow's existing established use in heart-health. The global
digestive health market size was US$38 billion in 2019 and it is
projected to grow to US$72 billion in 2027 at a high single-digit
CAGR in the 2020-2027 period (see
www.fortunebusinessinsights.com/digestive-health-market-104750
).
-- The results of the successful gut microbiome human study have
been submitted for publication in a peer reviewed scientific
journal www.sciencedirect.com/science/article/pii/S0022316622131275
.
-- DSM conducted a strong launch of the new microbiome technology in January 2023 ( www.dsm.com/human-nutrition/en/talking-nutrition/press-releases/2023-01-20-new-study-reveals-dsms-fruitflow-activates-gut-heart.html ), with widespread trade press coverage and encouraging early interest shown from some significant global customers.
-- Provexis will sell Fruitflow as a straight ingredient to DSM
exclusively for use in DSM's Premix Solutions and Market-Ready
Solutions businesses, with DSM then looking to sell the resulting
Premix and Market-Ready Solutions products on to its customers.
DSM's Premix and Market-Ready Solutions businesses are part of
DSM's Customized Solutions business which also offers personalised
nutrition solutions to customers, a rapidly developing growth area.
The Company looks forward to supporting DSM and its Premix and
Market-Ready Solutions customers for many years to come.
-- A number of DSM's customers for Fruitflow which have been
transferred to Provexis have been Fruitflow customers for several
years, including some distributor customers which sell Fruitflow on
to third parties. The Company has been progressing these sales
relationships since the Transfer of Business agreement was
announced in June 2022, and confirms it will be able to generate
new customers for Fruitflow outside the royalty arrangements with
DSM, in addition to its existing supply and distribution agreement
for Fruitflow with BYHEALTH.
From 1 January 2023 the Group's sales channels for Fruitflow
therefore included:
1. Former DSM customers for Fruitflow;
2. DSM and its Premix and Market-Ready Solutions businesses,
which will leverage the resources and relationships of DSM in some
of the major global markets;
3. New customers for Fruitflow as a straight ingredient;
4. BYHEALTH and its customers, through the Company's long term
supply and distribution agreement for Fruitflow with BYHEALTH;
and
5. The Group's Fruitflow+ Omega-3 dietary supplement product
which is sold direct to consumers, the Group will also look to
serve its Chinese Cross-Border e-commerce distributor for this
product in China.
The Company is in discussions with a number of third parties
seeking to progress new sales and distribution opportunities for
Fruitflow, and it can be contacted for all Fruitflow sales
enquiries by email at fruitflow@provexis.com .
Fruitflow(R) transfer arrangements from 1 January 2023, and
trading for the year
The customer transfer process from DSM to Provexis has continued
to progress well, with sales commencing to customers for Fruitflow
II SD (Fruitflow II SD is Fruitflow as an ingredient, in Spray
Dried powder form) in February 2023, when the first batch of
Fruitflow inventory was transferred from DSM's fulfilment centre in
The Netherlands to the Company's outsourced fulfilment centre in
the UK.
Total revenue:
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
Fruitflow II SD ingredient - from
1 January 2023 298,879 - 74,239
DSM Alliance Agreement - up to 31
December 2022 - 97,194 170,269
Fruitflow+ Omega-3 88,655 82,175 145,408
387,534 179,369 389,916
----------------------------------- ------------- ------------- ---------
Fruitflow II SD sales of more than GBP270k have been made in the
quarter ending on 31 December 2023, and confirmed sales orders for
Fruitflow II SD in excess of GBP320k are currently being processed.
The Company is dealing with numerous sales enquiries from existing
and new customers for further direct sales of Fruitflow in 2024 and
beyond.
Fruitflow II SD is currently manufactured in the EU. Rules of
origin under the BREXIT trade deal announced in December 2020 have
meant that shipments of Fruitflow II SD from a UK fulfilment centre
for re-export and sale to EU customers are at potential risk of
additional tariffs on re-entry into the EU (see
www.bbc.co.uk/news/55648201 ). Consequently, the Company is in the
process of setting up a new Irish subsidiary company, which will
use an outsourced fulfilment centre in Ireland to serve EU
customers for Fruitflow. This is expected to be an attractive new
sales channel for EU customers, facilitating greater sales of
Fruitflow II SD into the EU.
BYHEALTH Co., Ltd.
In November 2021 the Company announced it had entered into a
supply and distribution agreement (the 'BYHEALTH Agreement') for
Fruitflow with BYHEALTH, a listed Chinese dietary supplement
business with a market capitalisation of approximately GBP4
billion.
The BYHEALTH Agreement, which followed the Company's extensive
work with BYHEALTH over the last seven years, took full effect from
1 January 2023 and it gives BYHEALTH exclusive supply and
distribution rights to commercialise Fruitflow in Mainland China,
Hong Kong, Macau, Taiwan and Australia (the 'Territories').
Under the BYHEALTH Agreement Provexis will be responsible for
the manufacture, supply and sale of Fruitflow to BYHEALTH, and
BYHEALTH will be responsible for the manufacture, marketing, and
sale of Fruitflow based functional food and dietary supplement
finished products in the Territories, through BYHEALTH's extensive
sales network. BYHEALTH will also have exclusive rights to act as
the distributor of Fruitflow as an ingredient in the
Territories.
Provexis and BYHEALTH will seek to collaborate on research and
development projects which may result in the development and
approval of Fruitflow as a drug, for potential sale and
distribution in the Territories.
Regulatory progress in China - new permitted health function
claim
Provexis has been working with BYHEALTH for more than seven
years to support the planned launch of a number of Fruitflow based
products in the Chinese market. Clinical studies conducted in China
are typically required to obtain the necessary regulatory
clearances in China, and a significant investment in eight separate
Fruitflow studies has been undertaken at BYHEALTH's expense.
Completed studies have shown excellent results in use for
Fruitflow, and they provide strong evidence for the efficacy of
Fruitflow on platelet function.
The Chinese regulatory system for functional health food
ingredients, such as Fruitflow, is governed by the State
Administration for Market Regulation (the 'SAMR') and it is based
on a defined list of permitted health function claims which brand
owners are permitted to use on product labels.
The SAMR provides the possibility of adding new health function
claims to the list, with claims needing to demonstrate a
relationship between a food or nutrient and a consequent health
improvement, subject to evaluation and verification by the
SAMR.
SAMR certified functional health foods are required to use a
blue cap / blue hat logo on their product packaging, which
identifies products as approved functional health foods in
China.
BYHEALTH has been working on an extensive regulatory submission
to the SAMR seeking to establish a new permitted health function
claim for foods such as Fruitflow that can demonstrate an
anti-platelet effect, inhibiting platelet function and conferring
beneficial health effects.
On 28 August 2023 the SAMR announced in China that the
'Implementation Rules for Health Food New Functions and Product
Technology Evaluation' (the 'Implementation Rules') had been agreed
by the SAMR in June 2023, with these new rules to take effect from
28 August 2023.
On 29 August 2023 it was announced in China that BYHEALTH had
submitted: i) the first application under the Implementation Rules,
seeking to obtain a new permitted health function claim for foods
such as Fruitflow which help to 'maintain normal platelet
aggregation function and benefit blood flow health'; and ii) some
related product registration applications.
The significance of these major developments for Fruitflow in
China is further outlined here
www.nutraingredients-asia.com/Article/2023/09/05/china-set-to-approve-new-function-claims-for-health-foods#
. BYHEALTH has noted that it has been working on the project since
2015, with 'tens of millions of funds' (RMB) invested by BYHEALTH
in the research and development work.
The Company has previously stated that if BYHEALTH is successful
in obtaining a new permitted health function claim in China for
functional health foods, such as Fruitflow, that can demonstrate an
anti-platelet effect, it is expected that this would result in some
significant orders for Fruitflow, potentially at a multiple of
current total sales values.
Intellectual property
The Company is responsible for filing and maintaining patents
and trade marks for Fruitflow, and patent coverage for Fruitflow
now includes the following patent families which are all owned
outright by Provexis:
Patent family Developments in the period from
Sep-23 to Dec-23
Improved Fruitflow / Fruit Extracts A patent is expected to issue in Brazil in Q1 2024.
Improved Fruitflow / Fruit Extracts, with patents granted
by the European Patent Office in
January 2017, September 2020 and April 2023.
Patents have been granted in eleven other major
territories to include China and USA; and
applications are at a late stage of progression in a
further five global territories, with
potential patent protection out to November 2029.
----------------------------------------------------------
Antihypertensive (blood pressure lowering) effects Patent applications are pending in China and Japan.
This patent was originally developed in collaboration
with the University of Oslo, and it
has now been granted for Fruitflow in Europe, the US and
four other territories. Patent applications
are being progressed in China and Japan, with potential
patent protection out to April 2033.
In August 2020 the Company announced it had agreed to
purchase the background and joint foreground
blood pressure lowering IP owned by Inven2 AS, the
technology transfer office at the University
of Oslo, and Provexis now owns these important patents
outright.
----------------------------------------------------------
Fruitflow with nitrates in mitigating exercise-induced Patent applications are pending in Europe, Hong Kong and
inflammation and for promoting recovery the US.
from intense exercise
Patents have been granted around Europe and in the US,
Australia, Brazil, Canada, China, Hong
Kong, India, Israel, Japan, South Korea, the Philippines,
New Zealand and Mexico.
Further patent protection is being sought in three
territories, with potential patent protection
out to December 2033.
----------------------------------------------------------
Fruitflow for air pollution Brazilian and Malaysian Grant certificates issued.
The use of Fruitflow in protecting against the adverse
effects of air pollution on the body's
cardiovascular system.
Laboratory work has shown that Fruitflow can reduce the
platelet activation caused by airborne
particulate matter, such as that from diesel emissions,
by approximately one third.
US, Australian, Brazilian, Indonesian, Israeli, Japanese
and Malaysian patents have been secured
and there are pending applications in 10 jurisdictions
(including the US where a further application
has been filed) which extends potential patent protection
for Fruitflow out to November 2037.
----------------------------------------------------------
Fruitflow to confer health benefits in modulating the gut The international Patent Application published in
microbiome of humans December 2023.
The Company also announced the filing of a new patent
application in June 2022 relating to
the use of Fruitflow to confer health benefits in
modulating the gut microbiome of humans.
This followed the completion of a successful human study,
the results of which strongly support
the use of Fruitflow for modulating gut microbiota to
confer a number of health benefits.
An international Patent Application was filed in June
2023 (covering all major jurisdictions),
with potential patent protection out to June 2043.
----------------------------------------------------------
Outlook
The Company is pleased to report on another strong period of
progress, to include GBP388k of revenue in the period from sales of
the Company's Fruitflow II SD ingredient and its consumer product
Fruitflow+ Omega-3.
Fruitflow II SD sales of more than GBP270k have been made in the
quarter ending on 31 December 2023, and confirmed sales orders for
Fruitflow II SD in excess of GBP320k are currently being processed.
The Company is dealing with numerous sales enquiries from existing
and new customers for further direct sales of Fruitflow in 2024 and
beyond.
The new long term partnership with DSM based on the use of
Fruitflow to confer health benefits in modulating the gut
microbiome of humans has continued to progress well, with a strong
launch of this new technology by DSM in January 2023 to include
widespread trade press coverage. There has been some encouraging
interest in this technology from some significant global
customers.
The Company has been delighted to welcome and serve the majority
of DSM's existing customers for Fruitflow from January this year,
and was pleased to take over control of the supply chain /
production process for Fruitflow at the same time.
There have been some clear synergies from January 2023 as the
Company has been looking to sell Fruitflow to: (i) former DSM
customers for Fruitflow; (ii) DSM and its Premix and Market-Ready
Solutions businesses; (iii) new customers for Fruitflow as a
straight ingredient; and (iv) BYHEALTH and its customers, through
the Company's long term supply and distribution agreement for
Fruitflow with BYHEALTH. Provexis will continue to sell its
Fruitflow+ Omega-3 dietary supplement product direct to consumers,
and serve its Chinese Cross-Border e-commerce distributor for this
product in China.
Provexis has been working with BYHEALTH for more than seven
years to support the planned launch of a number of Fruitflow based
products in the Chinese market. Clinical studies conducted in China
are typically required to obtain the necessary regulatory
clearances in China, and a significant investment in eight separate
Fruitflow studies has been undertaken at BYHEALTH's expense.
Completed studies have shown excellent results in use for
Fruitflow, and they provide strong evidence for the efficacy of
Fruitflow on platelet function.
The Chinese regulatory system for functional health food
ingredients, such as Fruitflow, is governed by the State
Administration for Market Regulation (the 'SAMR') and it is based
on a defined list of permitted health function claims which brand
owners are permitted to use on product labels.
In August 2023 the Company was delighted to report that BYHEALTH
had submitted: i) the first application for a new permitted health
function claim and ii) some related product registration
applications.
The significance of these major developments for Fruitflow in
China is further outlined here
www.nutraingredients-asia.com/Article/2023/09/05/china-set-to-approve-new-function-claims-for-health-foods#
. BYHEALTH has noted that it has been working on the project since
2015, with 'tens of millions of funds' (RMB) invested by BYHEALTH
in the research and development work.
Fruitflow is well placed to play an important role in the
Chinese cardiovascular health market under the permitted health
function claim legislation, and we look forward to working closely
with BYHEALTH seeking to maximise the commercial success of this
agreement for the benefit of both companies.
The Company has developed a strong, long lasting and
wide-ranging patent portfolio for Fruitflow, and it owns outright
four existing patent families for Fruitflow. The new microbiome
patent application takes this to a potential total of five patent
families, with potential patent protection now running out to 2042.
The four existing patent families have a truly global footprint,
and the Company also holds other valuable intellectual property and
trade secrets for Fruitflow. The intellectual property for
Fruitflow is of fundamental importance to the Company and its
current and future commercial partners, to include DSM and
BYHEALTH, and it underpins the numerous commercial opportunities
which the Company and its partners are pursuing for Fruitflow.
The Company expects that the new gut microbiome patent
application, the significant changes to the sales and supply chain
structure for Fruitflow from January 2023, and the recent BYHEALTH
regulatory developments in China, will have a strongly beneficial
effect on the current and future commercial prospects for Fruitflow
and the business worldwide.
The Company would like to thank its customers and shareholders
for their continued support, and the Board remains strongly
positive about the outlook for Fruitflow and the Provexis business
for the coming year and beyond.
Dawson Buck Ian Ford
Chairman CEO
Consolidated statement of comprehensive
income Unaudited Unaudited Audited
Six months ended 30 September 2023 six months six months year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
GBP GBP GBP
Notes
----------------------------------------- ------ ------------- ------------- ----------
Revenue 387,534 179,369 389,916
Cost of goods (249,870) (26,730) (95,497)
----------------------------------------- ------ ------------- ------------- ----------
Gross profit 137,664 152,639 294,419
Selling and distribution costs (32,744) (23,974) (51,609)
Research and development costs (140,225) (107,398) (237,221)
Administrative costs - share based
payment charges (60,526) (11,318) (40,591)
Administrative costs - other (180,504) (183,955) (385,925)
----------------------------------------- ------ ------------- ------------- ----------
Loss from operations (174,006) (420,927)
Finance income 1,029 264 1,011
Loss before taxation (275,306) (173,742) (419,916)
Taxation - R&D tax relief: receivable
tax credit 8,200 16,108 32,800
Loss and total comprehensive loss for
the period (267,106) (157,634) (387,116)
------------------------------------------------- ------------- ------------- ----------
Attributable to:
Owners of the parent (267,106) (155,759) (385,241)
Non-controlling interest - (1,875) (1,875)
Loss and total comprehensive loss for
the period (267,106) (157,634) (387,116)
------------------------------------------------- ------------- ------------- ----------
Loss per share to owners of the
parent
Basic and diluted - pence 3 (0.01) (0.01) (0.02)
----------------------------------------- ------ ------------- ------------- ----------
Consolidated statement of financial
position Unaudited Unaudited Audited
30 September 2023 30 September 30 September 31 March
2023 2022 2023
Notes GBP GBP GBP
------------------------------------- ------- ------------- ------------- -------------
Assets
Current assets
Inventories 145,863 63,964 327,797
Trade and other receivables 264,410 140,809 61,114
Corporation tax asset 41,000 61,268 77,960
Cash and cash equivalents 318,819 744,551 379,121
-------------
Total current assets 770,092 1,010,592 845,992
---------------------------------------------- ------------- ------------- -------------
Total assets 770,092 1,010,592 845,992
---------------------------------------------- ------------- ------------- -------------
Liabilities
Current liabilities
Trade and other payables (319,017) (152,728) (188,337)
Total current liabilities (319,017) (152,728) (188,337)
---------------------------------------------- ------------- ------------- -------------
Total liabilities (319,017) (152,728) (188,337)
---------------------------------------------- ------------- ------------- -------------
Total net assets 451,075 857,864 657,655
---------------------------------------------- ------------- ------------- -------------
Capital and reserves attributable
to
owners of the parent company
Share capital 2,217,822 2,217,822 2,217,822
Share premium reserve 18,703,321 18,703,321 18,703,321
Merger reserve 6,599,174 6,599,174 6,599,174
Retained earnings (26,537,368) (26,130,579) (26,330,788)
---------------------------------------------- ------------- ------------- -------------
982,949 1,389,738 1,189,529
Non-controlling interest (531,874) (531,874) (531,874)
Total equity 451,075 857,864 657,655
---------------------------------------------- ------------- ------------- -------------
Consolidated statement of cash flows Unaudited Unaudited Audited
30 September 2023 six months six months year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
GBP GBP GBP
Cash flows from operating activities
Loss after tax (267,106) (157,634) (387,116)
Adjustments for:
Finance income (1,029) (264) (1,011)
Tax credit receivable (8,200) (16,108) (32,800)
Share-based payment charge - share options 60,526 11,318 40,591
Changes in inventories 181,934 21,844 (241,989)
Changes in trade and other receivables (203,436) (36,292) 43,453
Changes in trade and other payables 130,680 (5,181) 30,428
----------
Net cash flow from operations (106,631) (182,317) (548,444)
-------------------------------------------- ------------- ------------- ----------
Tax credits received 45,160 27,705 27,705
Total cash flow from operating activities (61,471) (154,612) (520,739)
-------------------------------------------- ------------- ------------- ----------
Cash flow from investing activities
Interest received 1,169 190 887
Total cash flow from investing activities 1,169 190 887
-------------------------------------------- ------------- ------------- ----------
Cash flow from financing activities
Proceeds from issue of share capital
- share options - 35,100 35,100
Total cash flow from financing activities - 35,100 35,100
-------------------------------------------- ------------- ------------- ----------
Net change in cash and cash equivalents (60,302) (119,322) (484,752)
Opening cash and cash equivalents 379,121 863,873 863,873
----------
Closing cash and cash equivalents 318,819 744,551 379,121
-------------------------------------------- ------------- ------------- ----------
Consolidated statement Total
of changes in equity Share Share Merger Retained equity Non- Total
30 September 2023 attributable
to owners controlling
capital premium reserve earnings of interests equity
the parent
GBP GBP GBP GBP GBP GBP GBP
------------------------ ---------- ----------- ---------- ------------- ------------- ------------- ----------
At 31 March 2022 2,210,822 18,675,221 6,599,174 (25,986,138) 1,499,079 (529,999) 969,080
Share-based charges -
share options - - - 11,318 11,318 - 11,318
Issue of shares - share
options exercised
23-May-22 7,000 28,100 - - 35,100 - 35,100
Total comprehensive
expense
for the period - - - (155,759) (155,759) (1,875) (157,634)
At 30 September 2022 2,217,822 18,703,321 6,599,174 (26,130,579) 1,389,738 (531,874) 857,864
------------------------ ---------- ----------- ---------- ------------- ------------- ------------- ----------
Share-based charges -
share options - - - 29,273 29,273 - 29,273
Total comprehensive
expense
for the period - - - (229,482) (229,482) - (229,482)
At 31 March 2023 2,217,822 18,703,321 6,599,174 (26,330,788) 1,189,529 (531,874) 657,655
------------------------ ---------- ----------- ---------- ------------- ------------- ------------- ----------
Share-based charges -
share options - - - 60,526 60,526 - 60,526
Total comprehensive
expense
for the period - - - (267,106) (267,106) - (267,106)
At 30 September 2023 2,217,822 18,703,321 6,599,174 (26,537,368) 982,949 (531,874) 451,075
------------------------ ---------- ----------- ---------- ------------- ------------- ------------- ----------
1. General information, basis of preparation and accounting
policies
General information
Provexis plc is a public limited company incorporated and
domiciled in the United Kingdom (registration number 05102907). The
address of the registered office is 2 Blagrave Street, Reading,
Berkshire RG1 1AZ, UK.
The main activities of the Group are those of developing,
licensing and selling the proprietary, scientifically-proven
Fruitflow(R) heart-health functional food ingredient.
Basis of preparation
This condensed financial information has been prepared using
accounting policies consistent with International Financial
Reporting Standards in the European Union (IFRS).
The same accounting policies, presentation and methods of
computation are followed in this condensed financial information as
are applied in the Group's latest annual audited financial
statements, except as set out below. While the financial figures
included in this half-yearly report have been computed in
accordance with IFRS applicable to interim periods, this
half-yearly report does not contain sufficient information to
constitute an interim financial report as that term is defined in
IAS 34.
Use of non-GAAP profit measure - underlying operating profit
The directors believe that the operating loss before share based
payments measure provides additional useful information for
shareholders on underlying trends and performance. This measure is
used for internal performance analysis. Underlying operating loss
is not defined by IFRS and therefore may not be directly comparable
with other companies' adjusted profit measures. It is not intended
to be a substitute for, or superior to IFRS measurements of
profit.
The interim financial information does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006 and
has been neither audited nor reviewed by the Company's auditors
Shipleys pursuant to guidance issued by the Auditing Practices
Board.
The results for the year ended 31 March 2023 are not statutory
accounts. The statutory accounts for the last year ended 31 March
2023 were approved by the Board on 29 September 2023 and are filed
at Companies House. The report of the auditors on those accounts
was unqualified, contained an emphasis of matter with respect to
going concern, and did not contain a statement under section 498 of
the Companies Act 2006.
The interim report for the six months ended 30 September 2023
can be downloaded from the Company's website www.provexis.com.
Further copies of the interim report and copies of the 2023 annual
report and accounts can be obtained by writing to the Company
Secretary, Provexis plc, 2 Blagrave Street, Reading, Berkshire RG1
1AZ, UK.
This announcement was approved by the Board of Provexis plc for
release on 29 December 2023.
Going concern
Under the terms of the DSM Transfer of Business agreement which
was announced in June 2022, DSM's existing and prospective pipeline
customers for Fruitflow II SD as a straight ingredient (not a DSM
Premix or DSM Market-Ready solution) transferred to become direct
customers of Provexis WEF 1 January 2023.
The Company has needed to hold Fruitflow II SD in stock from 1
January 2023 onwards, to sell to new and existing customers, and
the Company therefore agreed to purchase from DSM the remaining
stocks of Fruitflow which DSM held on 31 December 2022.
It was originally intended that the Company would pay DSM for
this inventory over the course of a three month sale back period,
commencing on 1 January 2023, with the Company having the option to
purchase some but not all of DSM's remaining stocks of Fruitflow at
31 December 2022.
The Company and DSM have been in further negotiations around the
inventory transfer throughout the course of 2023, and the parties
expect to be able to conclude these further negotiations in the
coming months. The amount of stock which the Company will finally
elect to purchase from DSM remains uncertain, and it will
ultimately depend on (i) the best before dates of this inventory,
which remain favourable / long dated in light of recent production
runs of new Fruitflow material, (ii) recent stability data which
suggests that the best before dates could be further extended,
(iii) estimated customer demand in 2024 and beyond, (iv) the
comparative costs and timing of a potential production run for a
new batch of material and (v) the Company's financial resources at
that time.
Based on its current level of cash it is expected that the Group
may therefore need to raise further equity finance, or potentially
new loan finance, in the coming months, a situation which is deemed
to represent a material uncertainty related to going concern.
Considering the success of previous fundraisings and the current
performance of the business, the Directors have a reasonable
expectation of raising sufficient additional equity capital or new
loan finance to continue in operational existence for the
foreseeable future. Subject to the outcome of ongoing negotiations
with a third party, the Company might also be able to hold some of
its future stock requirements on a consignment basis, only paying
for the stock when it was required for sale.
For these reasons the Directors are of the opinion that at 29
December 2023, the Group and Company's liquidity and capital
resources are adequate to deliver the current strategic objectives
and 2024 business plan and that the Group and Company remain a
going concern.
Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 March 2023, as
described in those annual financial statements.
2. Segmental reporting
The Group's operating segments are determined based on the
Group's internal reporting to the Chief Operating Decision Maker
(CODM). The CODM has been determined to be the Board of Directors
as it is primarily responsible for the allocation of resources to
segments and the assessment of performance of the segments. The
performance of operating segments is assessed on revenue.
The CODM uses revenue as the key measure of the segments'
results as it reflects the segments' underlying trading performance
for the financial period under evaluation. Revenue is reported
separately to the CODM and all other reports are prepared as a
single business unit.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
Fruitflow II SD ingredient - from
1 January 2023 298,879 - 74,239
DSM Alliance Agreement - up to 31
December 2022 - 97,194 170,269
Fruitflow+ Omega-3 88,655 82,175 145,408
387,534 179,369 389,916
----------------------------------- ------------- ------------- ---------
3. Earnings per share
Basic earnings per share amounts are calculated by dividing the
profit attributable to owners of the parent by the weighted average
number of ordinary shares in issue during the period.
The loss attributable to equity holders of the Company for the
purpose of calculating the fully diluted loss per share is
identical to that used for calculating the basic loss per share.
The exercise of share options would have the effect of reducing the
loss per share and is therefore anti-dilutive under the terms of
IAS 33 'Earnings per Share'.
Basic and diluted loss per share amounts are in respect of all
activities.
There were 188,500,000 share options in issue at 30 September
2023 (2022: 171,500,000) that are currently anti-dilutive and have
therefore been excluded from the calculations of the diluted loss
per share.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
Loss for the period attributable
to owners of the parent - GBP 267,106 155,759 385,241
Weighted average number of shares 2,217,821,523 2,215,794,201 2,216,805,085
Basic and diluted loss per share
- pence 0.01 0.01 0.02
----------------------------------- -------------- -------------- --------------
4. Share capital and Total Voting Rights
At 29 December 2023, the date of this announcement, the
Company's issued share capital comprises 2,217,821,523 ordinary
shares of 0.1 pence each, each with equal voting rights. The
Company does not hold any shares in treasury and therefore the
total number of ordinary shares and voting rights in the Company is
2,217,821,523.
The above figure may be used by shareholders in the Company as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or change to
their interest in, the share capital of the Company under the FCA's
Disclosure Guidance and Transparency Rules.
5. Cautionary statement
This document contains certain forward-looking statements with
respect to the financial condition, results and operations of the
business. These statements involve risk and uncertainty as they
relate to events and depend on circumstances that will incur in the
future. Nothing in this interim report should be construed as a
profit forecast.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
IR PPGMCPUPWGPB
(END) Dow Jones Newswires
December 29, 2023 07:48 ET (12:48 GMT)
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