TIDMDXRX
RNS Number : 6378L
Diaceutics PLC
14 September 2021
14 September 2021
Diaceutics PLC
("Diaceutics", the "Company" or the "Group")
Half Year Report
Diaceutics PLC (AIM: DXRX), the diagnostic commercialisation
company, announces its unaudited interim results for the six months
ended 30 June 2021.
Financial highlights
H1 2021 H1 2020
Revenue (GBPm) 6.0 5.3
Gross profit (GBPm) 4.4 3.8
Gross margin 74% 71%
EBITDA (GBPm) 0.3 0.3
(Loss)/profit before tax
(GBPm) (0.5) 0.03
Net cash (GBPm) 23.7 29.8
Earnings per share (pence) 0.40 1.52
-- Positive first half performance despite the challenging COVID-19
headwinds, with growth in Revenue, Gross margin, and a positive
EBITDA
-- Revenue increased by 13% to GBP6.0m (H1 2020: GBP5.3m) or
24% on a constant currency basis
-- The DXRX platform contributed 44% of total revenue in H1 2021,
well ahead of the Board's target at the beginning of the year
of 20% of full year revenue to be generated via the platform
-- Reported Gross margin increased by 4% in comparison to the
comparative period
-- EBITDA, of GBP0.3m (H1 2020: GBP0.3m) net of investments during
H1 in business development, sales commission, and legal and
professional costs
-- Loss before tax of GBP0.5m (H1 2020: Profit GBP0.03m) which
is primarily driven by an expected increase in amortisation
as a result of the DXRX platform launch on 28 October 2020
-- Closing cash position of GBP23.7m (H1 2020: GBP29.8m)
Operational highlights
-- 15 pharmaceutical clients now engaged on the DXRX platform
-- DXRX's second phase launch on track for H2 2021 for four additional
modules
-- Contracts with 33 clients for H1 2021 (H1 2020: 29), and 48
brands (H1 2020: 42) with the addition of two new clients,
one of which is our first diagnostic client
-- High level of repeat business at 93% (H1 2020: 91%)
-- Global pharmaceutical teams re-engaging at pre-COVID levels,
led by the US which represents 63% of revenue in H1 2021 (H1
2020: 59%)
-- Continued investment in R&D, with GBP2.7m invested in platform
development and our 49 Diagnostic Deductive Pathways in conjunction
with adding 44 million patient testing records to our current
data repository
Outlook
The Group has made a good start to the 2021 financial year,
despite the ongoing challenges presented by the COVID-19 pandemic,
and currency headwinds. Our financial performance provides the
early indicators of a more balanced first half, second half
weighting compared to prior years.
Having successfully launched our DXRX platform in Q4 2020, the
Group has built the initial foundations for platform adoption and
improved our competitive position to service the unmet diagnostic
commercialisation needs of the pharmaceutical industry. The
engagement from our clients on the platform, which is ahead of the
Board's expectations, and the progress made with our laboratory
network during H1, sets us in good stead for H2.
Peter Keeling, Diaceutics' Chief Executive, commented:
"Our focus for 2021 was on switching our clients over to the
DXRX platform to gain more of our clients investment in diagnostic
commercialisation as well as benefit from the internal efficiencies
which accrue from a platform business model. I am pleased with our
achievement against that goal with twice the predicted level of
business flowing through DXRX. "
Enquiries:
Diaceutics PLC
Philip White, Chief Financial Officer Via Alma PR
Stifel Nicolaus Europe Limited (Nomad & Broker Tel: +44 (0)20
) 7710 7600
Ben Maddison
Stewart Wallace
Nick Adams
Alma PR Tel: +44(0)20 3405
0205
Caroline Forde diaceutics@almapr.co.uk
Robyn Fisher
Kieran Breheny
About Diaceutics
At Diaceutics we believe that every patient should have access
to the right treatment at the right time. We provide the world's
leading pharmaceutical companies with an end-to-end solution for
the launch of precision medicine diagnostics enabled by DXRX - The
Diagnostic Network(R).
DXRX is the world's first diagnostic commercialisation platform
for precision medicine, integrating multiple pipelines of
real-world diagnostic testing data from a global network of
laboratories.
CHIEF EXECUTIVE REVIEW
Business and strategic overview
I am pleased to report that, despite the ongoing challenge which
the global pandemic presents and a weakening US Dollar for H1 2021,
the Group has delivered a positive trading performance for H1 2021,
with growth in pound sterling revenue of 13% (24% on a constant
currency basis), growth in Gross margin, an expected Operating loss
result which is driven by the increase in amortisation as a result
of the commercialisation of the DXRX platform and a satisfactory
EBITDA performance.
The growth of the precision medicine industry, and accompanying
companion diagnostics requirements, presents us with a long-term
significant opportunity which, through the launch of our
ground-breaking DXRX platform in Q3 2020, we are increasingly well
positioned to capture.
The DXRX platform gives us the ability to fundamentally change
the diagnostics marketplace for the better. The platform enables an
acceleration of the commercialisation of precision medicine through
creating a more efficient diagnostics marketplace. Our platform
reduces the diagnostic hurdles ensuring that laboratories globally
are test ready for each new precision medicine at launch. In this
way, we can significantly increase pharmaceutical companies' Return
on Investment on developing new drugs. Ultimately, we help
physicians deliver the right medicine to each individual patient in
relation to their own personal pathology.
We have continued to add scale and operational efficiency to our
DXRX platform with the shift of laboratories online in all the
regions we currently operate.
A greater amount of client work in H1 was delivered via our
platform, onboarding 15 pharmaceutical clients. DXRX is now
delivering many of our data projects in minutes as opposed to
weeks, enabling 22 of our data projects in H1 2021, and
contributing to the 4% uptick in gross margin.
Our platform adoption strategy across 2021, has been to ensure
key pharmaceutical clients and laboratories gain hands-on use and
experience with the platform which we believe will help expand
their engagement through 2022. Already two pharmaceutical clients
have expanded to use our technology enabled services to effect
change at a laboratory level therein removing barriers to
testing.
We have continued to enhance our world-leading data repository
to 409m patient testing records (an increase of 44m since 31
December 2020) and have increased our disease level insights. This
has enabled us to continue the development of our 49 Diagnostic
Deductive Pathways (DDPs) of which 19 are outside oncology.
It currently takes over three years for more than 70% of labs to
be able to offer a new diagnostic, and we estimate that even after
a precision medicine has been launched, up to 50% of eligible
patients do not get access to the medicine, due to testing hurdles.
The impact of this is that patients are not receiving the most
effective medicines at the right time, and the pharmaceutical
industry is losing potential revenues, which could be reinvested
into the development of further medicines.
With the potential of 150 precision medicines scheduled for
launch within the next 3 years, and each requiring a companion
diagnostic, our opportunity has never been more significant. With
our blue-chip client base, global laboratory network, world-leading
data repository and strong balance sheet, we are confident we are
well placed to capture this opportunity.
Operating overview
Good progress has been made on key operational drivers in
H1:
Platform uptake:
The primary growth driver for the Group will be the transition
of clients onto our DXRX platform. We anticipate that this will
facilitate our ability to provide additional DXRX modules to those
clients thereby, securing a greater proportion of the client spend
per therapy.
15 clients engaged with our platform modules, which represented
44% of our revenues in H1, and is currently materially ahead of our
stated target to deliver 20% of revenues in 2021 using the DXRX
platform. Offering our client more modules enabled by the platform
increases the value proposition to our clients and enhances the
opportunity for us through client engagement and increased project
pricing. I am pleased to report that we won our first platform
enabled multi-module project worth more than GBP500k during H1 2021
across more than 9 countries. Client engagement via DXRX has
enabled us to accelerate our revenues associated with
Implementation Services.
In respect of laboratory onboarding, we have moved 12.5% (312
labs) of our network onto the platform moving from an offline to an
online relationship. The DXRX laboratory universe is a key part of
our ecosystem as stakeholders engage in sponsored collaborations
using the DXRX platform. During H1 2021, this laboratory network
supported 11 collaboration programmes with External Quality
Assessment (EQA) providers such as NEQAS ICC and Targos PDL1
Professional training.
Data
Commercialisation of our data has also progressed to plan with
data representing 69% of our H1 revenues (H1 2020: 90%). We have
also introduced a new weekly data feed in the US (formerly monthly
/quarterly) to several clients to support their field force,
targeting specific physicians based on their real-world testing
approaches.
Geographic scope:
Regionally, US Pharmaceutical teams are engaging at pre covid
levels, with US revenue representing 63% of our revenue delivered
for H1 2021 (H1 2020: 59%). Our EU revenues recovered towards the
end of the half year representing 25% of total revenue delivered
for H1 2021 (H1 2020: 15%) and UK revenues, which is a smaller part
of our business, representing 3% (H1 2020: 13%). Our investment in
the APAC region is at an early stage and having now won business
locally, we will continue to build on this during the remainder of
the financial year.
Network effect:
The Group's focus is on building and advertising the attractions
of the DXRX network to build momentum for new laboratories and
partners joining organically, with the target of reaching a tipping
point where it attracts not only new laboratories and pharma
clients but other stakeholders, thus supporting a more efficient
diagnostic marketplace. We are pleased that seven solution
providers have joined the platform. These solution providers
underpin and enable our Tech Enabled Services on the platform by
providing services to clients and supporting collaborations. Each
of these solution providers allow Diaceutics to offer better
testing solutions to our clients and include Porterhouse Medical
and European Society of Pathology.
Additional indications
Expanding the Group's operations beyond oncology, with
additional datasets from testing in cardiovascular, central nervous
system, autoimmune and infectious disease will present
opportunities in these large therapeutic areas. In H1 we announced
contracts with the value of GBP1m to brand teams working on IRD
(Inherited Retinal Dystrophy). In addition, we provided our first
data sets relating to COVID-19 to our clients which evidences our
expansion of commercial relationships into new therapy areas.
During the period the Company won its first contract with a
global diagnostic company supplying data and insights within the
European region.
Operations:
Across H1 we have invested in business development and marketing
strategy. We recruited eight individuals to our business
development team to help serve the anticipated increase in client
numbers throughout the 2021 financial year. In March 2021, we
announced our move in Belfast - to Kings Hall Life Sciences Park,
that opened in August 2021. This relocation gives us a further
opportunity to support our highly skilled and cost-effective
operational team, advancing the corporate strategy of providing us
access to leading university resources in AI and data science to
pursue growth opportunities from H2 2021 and beyond.
We hosted our first Capital Markets Day in June of this year to
showcase DXRX as well as to bring the views of an industry panel,
including clients to our shareholders and underpin the value of the
platform in addressing the needs of industry. The recording of this
Capital Markets Day can be accessed via the Investor Relations
section on our website, www.diaceutics.com .
As we look towards the remainder of the financial year, we
continue to focus on driving adoption of DXRX with our clients and
unlocking the benefits this delivers internally in terms of
efficiency and externally to our clients.
Market opportunity
The treatment landscape continues to accelerate at pace from
'one size fits all' therapies towards personalised medicine, where
patients are prescribed medicines based on their genetic or
molecular factors ("Precision Medicine"). These include therapies
for diseases such as HIV, Alzheimer's, Cystic Fibrosis, and
Irritable Bowel Disease. However, it is in oncology (cancer) where
the greatest penetration of Precision Medicine has occurred to
date.
Despite some negative impacts on the biopharmaceutical research
space because of COVID-19, this has resulted in an acceleration of
the need for AI and technology-based solutions for drug
commercialisation. Growth in the precision medicine market is
evident, with major pharmaceutical companies such as AstraZeneca
confirming that approximately 90% of their clinical development
pipeline is currently driven by precision therapeutics. In 2020 it
is estimated that the precision medicine industry was valued at
$58billion. It has been predicted that the precision medicine
industry will grow by 9.2% CAGR by 2026 to over $98billion. Leading
pharmaceutical companies working in precision medicine include
Novartis, Roche/Genentech, Astra Zeneca, Pfizer, BMS, Merck and
Amgen, all of whom are our clients.
Despite the increasing importance of effective diagnostic
testing, the testing market itself is currently highly fragmented
and the pharmaceutical industry has varied insight into it. The
addressable market for Diaceutics specific services today is
approximately US$0.25 billion annually based on our current
forecast. We expect this to increase to $0.45billion annually by
2026.
Investment in R&D
Our commitment to research and development is critical to us as
a business on our growth trajectory. As a business, we understand
that having better diagnostic data than our competitors is not
enough - we must strengthen our position by ensuring we have a
comprehensive supply of this data and transform this to insights
that are unique.
We continue to invest in our Diagnostic Deductive Pathways
(DDPs) this year with work already underway for approximately half
of the target number of DDP's as of 30 June. Each DDP represents a
series of algorithms used to describe specific disease biomarker
datapoint to track trends which are disease specific.
Our second DXRX product launch is scheduled for October 2021,
with modules for Patient Journey, Lab Benchmark, Test Announcement
and Test re-imbursement adding to the twelve modules launched on 28
October 2020. For the first time, these new tools we are building
are intended to permit DXRX users to explore patient level testing
data, to understand how diseases are tested for, and the overall
diagnostic journey of a patient with that disease. We believe our
cutting-edge technology will further embed us with our clients and
facilitate onward growth for the Group.
People
The Group relies on the talent of our people to deliver
innovative, high quality healthcare services.
The continued resilience of our people throughout the COVID-19
pandemic has contributed to the positive operational and financial
performance of the Group during H1 2021.
On behalf of the board of directors (the "Board"), I would like
to take this opportunity to thank all our people for their
dedication, professionalism, and skilful contribution to our
organisation as we closed H1 2021 and move towards the remainder of
the financial year.
Current trading and outlook
The Group has made a good start to the 2021 financial year,
despite the ongoing challenges presented by the COVID-19 pandemic,
and currency headwinds. Our financial performance provides the
early indicators of a more balanced first half, second half
weighting compared to prior years.
Having successfully launched our DXRX platform in Q4 2020, the
Group has built the initial foundations for platform adoption and
improved our competitive position to service the unmet diagnostic
commercialisation needs of the pharmaceutical industry. The
engagement from our clients on the platform, which is ahead of the
Board's expectations, and the progress made with our laboratory
network during H1, sets us in good stead for H2.
FINANCIAL REVIEW
Diaceutics' underlying financial performance for H1 2021 was
positive despite the continued challenges arising from the global
pandemic.
A summary of the key financial indicators for the six months to
30 June 2021 is outlined in the table below:
H1 2021 H1 2020
Unaudited Unaudited
GBP000's GBP000's
Revenue 5,966 5,301
Gross profit 4,386 3,756
Gross margin (%) 74% 71%
EBITDA 275 261
(Loss)/profit before tax (537) 27
Revenue
Revenue increased by 13% to GBP6.0m (H1 2020: GBP5.3m), or 24%
growth based on a constant currency, which has been driven
primarily by the impact of increased product volume sales with the
introduction of products following the launch of DXRX. The US
Dollar weakened against Pound Sterling over the period by 10% to an
average rate of 1.39 (H1 2020: 1.26)
The launch of DXRX has enabled the Group the opportunity to
service clients via the newly structured product offering whilst
maintaining our existing consulting services in Data and
Implementation services. With the launch of the platform, we
continue to see a strong demand for our data services which
represents 69% of total revenue delivered in H1 2021 (H1 2020:
90%), a return to pre-COVID-19 levels which has historically
represented approximately two thirds of revenue generation in a
period. Currently 44% of our revenue relates specifically to our
newly launched DXRX product offering which is ahead of our budgeted
expectations at this point in the financial year. DXRX currently
represents more than 40% of our overall sales pipeline.
Our financial performance provides the early indicators of a
more balanced first half, second half weighting compared to prior
years. This shift in the trend of seasonality is reflected in
revenue result reported for H1 2021 which represents 44% of the
external revenue expectations for the 2021 financial year (H1 2020:
41% of total revenue for the 2020 financial year).
The Group's therapy brand engagement remains consistently strong
with the Group generating revenue from 48 brands (H1 2020: 42) and
33 clients (H1 2020: 31) across 22 countries (H1 2020: 27). Our
repeat revenues are continuing to perform strongly at 93% (H2 2020:
91%) with the largest proportion of revenue for H1 2021 generated
from our 2020 and 2021 brand cohorts. On a net basis, we increased
our client base by two (H1 2020: 5) during H1 2021.
On a regional basis, we saw positive traction in our US based
revenue which increased to 63% of revenue, an increase of 4% from
H1 2020. Our EU based revenue contributed a total of 25%, which is
a 10% increase from the H1 2020 revenue contribution. Both the US
and EU markets have demonstrated signs of growth when compared with
H1 2020, and recovery as we emerge from COVID-19. Our investment in
the Asia-Pacific region is beginning to show early signs of
positivity and we look to build upon this during the remainder of
the financial year.
Gross Profit
Gross profit for H1 2021 was GBP4.4m which reflects a 17%
increase in comparison to the reported gross profit for H1 2020 of
GBP3.8m, with gross margin improved 4%. This increased efficiency
is largely because of the benefits of delivering our products to
client using our DXRX platform, and ongoing travel restrictions
owing to COVID-19. This increased gross margin percentage is
reported after charging GBP0.8m of amortisation (H1 2020: GBP0.2m)
and platform related maintenance of GBP0.1m (H1 2020: GBPnil)
associated with the launch of the DXRX platform on 28 October 2020.
Excluding amortisation, our Gross margin increased by 15% when
compared with H1 2020.
Operating loss, and EBITDA
Operating loss for H1 2021 was GBP0.5m (H1 2020: Profit
GBP0.03m) which is inclusive of a GBP0.1m loss associated with
foreign exchange (H1 2020: gain GBP0.7m). In addition, there was a
net increase in administration expenses of GBP0.4m when compared to
H1 2020, which was a result of increases in building the business
development team, including the introduction of their sales
commission and other incentives and provision for holiday pay and
legal and professional costs, depreciation, offset by savings in
travel due to the ongoing restrictions in travel because of
COVID-19. Overall, the Executive management team has remained
focused on repositioning the Group's cost base to support growth
and platform adoption.
During H1 2021, the Group incurred net foreign exchange losses
of GBP0.1m (H1 2020: gain GBP0.7m). The Group mitigated
transactional foreign exchange losses using derivative products to
hedge its short-term exposure to fluctuations in foreign exchange
rates (GBP:USD). The Group's hedging policy allows for forward
contracts to be entered into up to a period of 12 months from the
end of the next reporting period. Currently the additional costs of
meeting the extensive documentation requirements of IFRS 9 to apply
hedge accounting to these foreign exchange hedges is not justified
and accordingly, the Group is not using hedge accounting for
derivatives. Net movements on mark-to-market derivatives in respect
of transactional currency exposures of the Group in future periods
are recognised in the profit and loss account and amounted to a
cost of GBP0.01m for the period.
Reconciliation of operating profit H1 2021 H1 2020
to EBITDA
GBP000's GBP000's
Operating profit (531) 32
Depreciation & Amortisation 806 229
EBITDA 275 261
Corporation Tax
The Group has taken advantage of the UK and Irish Research and
Development Tax Credits regimes, in particular the RDEC and SME
R&D tax credit regime. Total R&D tax credits of GBP0.45m in
the UK and Ireland have been recognised.
A total current income tax credit of GBP0.2m has been recognised
during the period. This credit includes the net effect of the
aforementioned R&D tax credits, a current tax charge of GBP0.3m
and a deferred tax credit of GBP0.17m.
The current tax charge is calculated after adjusting for
non-deductible expenditure of GBP0.06m, difference in foreign tax
rates of GBP0.06m and the impact of a change in tax rates
GBP0.11m.
In the prior year the Group recognised UK and Irish Research
& Development credits under the RDEC and SME R&D tax
regimes of approximately GBP1m which included an adjustment for
prior periods of GBP0.6m.
Balance Sheet
The Group had a strong Balance Sheet as at 30 June 2021
reflecting net assets of GBP40.0m (30 June 2020: GBP41.1m).
The Group's closing cash balance as at 30 June 2021 was GBP23.7m
(30 June 2020: GBP29.8m).
The Group's debt at 30 June 2021 was GBP0.1m (30 June 2020:
GBP0.1m).
Investment in Intangible Assets
Total intangible investment of GBP2.7m was incurred in the
period (H1 2020: GBP2.9m). Investment in data amounted to GBP1.0m
(H1 2020: GBP0.6m) supporting the depth of the data lake and adding
approximately 44m patient test records (H1 2020: 53m). Capitalised
development expenditure relating to the DXRX platform amounted to
GBP1.7m (H1 2020: GBP2.0m). The continued investment in the DXRX
platform is progressing as planned and in line with budget, and it
is anticipated that the second phase products will be available to
clients by Q4 2021.
DDPs are a series of algorithms used to manage specific disease
biomarker data to track trends which are disease specific. These
DDPs underpin the methodology on which we base our insights and
professional services provided to our clients and underpin the
pathway in which a patient will have their optimal diagnostic
journey. These algorithms can be used on multiple projects which
improves Diaceutics' efficiency in project delivery as well as
building up datasets which have higher disease coverages and
breadth of data per patient. Total investment during H1 2021 was
GBP0.2m which is included within development expenditure within
note 8.
Net Cash
As at 30 As at 31 As at 30
June 2021 Dec 2020 June 2020
Net Cash GBP23.7m GBP25.3m GBP29.8m
=========== ========== ===========
The Group incurred GBP1.5m of a cash outflow during H1 2021 (H1
2020: Cash inflow of GBP17.9m - after cash generated from the
Company's capital raise of GBP20.5m net of expenses). This cash
outflow represents the net position after continued capital
investment in the DXRX platform and data related purchases of
GBP2.7m.
Net cash generated from operations was GBP1.3m (H1 2020: inflow
GBP1.3m).
The Company continued its relationship with Silicon Valley Bank
and currently has an unused working capital facility of GBP4.0m.
This facility will remain in place subject to a minimum Quarterly
Revenue test calculated on a trailing twelve-month basis and a
minimum Adjusted Quick Ratio test as stipulated by the agreement.
The capital facility is as described in the 2020 Annual Report.
Other financial liabilities, not included above, relate to
convertible loan notes and the change in fair value of embedded
derivatives. The convertible loan notes of GBP0.1m are exercisable
by March 2022.
Going concern
The Directors have performed a detailed assessment, including a
review of the Group's budget and forecasts for the 2021 financial
year and its long-term plans, including consideration of the
principal risks faced by the Group, including uncertainties which
remain in light of the global pandemic. In assessing these
uncertainties, the Directors have applied downside sensitivities to
the Group's cash flow projections. The Board have satisfied
themselves that notwithstanding these downsides, the Group has
adequate headroom with existing cash and banking facilities to
continue to operate and meet its liabilities as they fall due to
the foreseeable future, a period of which is at least 12 months
from the date of signing these interim financial statements.
Post balance sheet events
As at 30 June 2021, the Group had entered into an agreement for
the lease of a new headquarters based in Belfast. Subsequent to 30
June 2021, control and access passed to the Group and the Group
recognised a Right-of-use asset and lease liability in line with
IFRS 16 - Leases. Details have been disclosed in note 14.
Principal risks and uncertainties of the Group
The risk factors that are most significant to the Group's
operations, and where applicable an explanation of how these are
managed or mitigated, are outlined below. The risks described do
not necessarily comprise all those associated with the Group and
are not set out in any order of priority. Additional risks and
uncertainties that are currently not known by the Directors, or
that are currently deemed immaterial, may also have an adverse
effect on the Group.
Operational, commercial, and financial risks
RISK MITIGATION
Certainty of contracts and The Group has visibility over a
pipeline proportion of its revenues through
Any cancellations, material signed up service agreements, contracted
amendments, delays in adoption work, or high-probability tenders.
of DXRX and uncertainty around The pipeline of the business is
the Group's Order Book could continually reviewed by senior
have an impact on the revenues management with both leading (proposal
of the Group. generation) and lagging (order
intake) indicators. Using the Customer
Relationship Management (CRM) system,
key account management team and
client plans, this provides foresight
and momentum for project closure
and creates the ability to assess
the products and capacity required
going forward.
We operate in several global precision
medicine markets with the aim of
increasing our access to market
opportunity, and diversifying risk
across a number of geographical
territories.
Dependence on key executives
and personnel The Executive continues to review
The Directors believe that the business structure to ensure
the future success of the it is appropriate to support the
Group will depend in part business model and strategic growth.
upon the expertise and continued Succession and retention planning
service of key executives are in place for senior management
and technical personnel. The posts and the Operational Management
loss of the services of any Committee (OPCO) has been put in
of the key management personnel place to add a management level
or the failure to retain key below the Executive Management
employees could adversely Committee (EXCO) team and provide
affect the Group's ability a succession and mentoring platform
to maintain and/or improve for this management layer.
its operating and financial The Group remains committed to
performance. the recruitment, engagement, retention,
continuing development, and reward
of experienced management, and
highly skilled scientific, marketing
and sales personnel. Furthermore,
it has implemented several remuneration
schemes to incentivise and retain
key personnel.
Loss of a major client The Group's client base is well
A small number of clients, diversified due to the number of
with which the Group has a brand teams, both global and in-country,
long-term historical relationship, that we engage within each client,
contribute over 10% of annual all having individual budget allocation
revenue. The loss of any such and control. The number of brands
major client would have a supported by the growth has been
direct impact on the earnings maintained and there has been growth
potential of the business. in the number of clients that the
The relationship for a major Group services, including contracting
contract usually takes time with new clients. The senior management
to establish and the responsibility team regularly review the revenue
to deliver a significant project generated by key clients to ensure
is typically developed over that the Group does not become
a number of years. reliant on a small number of key
clients.
The Group has a very good working
relationship with all its major
clients, and regularly seeks feedback
to improve and maintain a high
level of client service.
The Group has a significant Diaceutics has made a significant
dependency on its ongoing investment in our data lake over
access to patient diagnostic recent years and has 2,500+ global
data laboratories in our network. We
Diaceutics acquires data from have amalgamated over 409m real-world
multiple sources including patient records from multiple sources
government, laboratory collaborators, and key precision testing markets
key bodies, and public domain into this data lake. We have laboratory
sources. The failure of a liaison teams supporting "first
significant data supplier launch" markets for the pharmaceutical
may be disruptive to the Group's industry and, with an extensive
operations, although is not network of data sources, the failure
expected to provide a long-term of any one data source would not
issue to the Group in relation have a lasting impact on operations.
to the supply of data.
The Group's growth strategy Patient data is held by the Group
is subject to compliance with on an anonymised and aggregated
information security and data basis.
privacy laws and requirements The Group's executive and legal
The rules on data protection counsel reviews the impact of changes
afforded to patient data in to information security and data
different countries varies privacy regulations in countries
widely and there can be no that the Group operates in.
assurance that the Group will Systems and processes are in place
be able to secure such datasets to ensure compliance with these
or that the basis of acquisition regulations and protect against
will be commensurate with data loss. Strong IT measures have
the agreements in place to been implemented and are reviewed
date. Furthermore, data protection regularly to ensure adequate protection
laws are highly heterogeneous is in place.
around the world and subject A Global Privacy and Compliance
to evolution as privacy issues officer was hired in 2020 and staff
come to the fore. are made aware of the potential
impact of changing regulations
and targeted training is provided.
The increasing instances and A security framework is in place,
sophistication of Cyber-Attacks combining prevention technology
globally bring increased risk with continuous threat monitoring.
to operations, reputation, Two-factor identification controls
staff and finances. have been implemented and organisational-wide
The launch of DXRX and Software training on identification of threats
as a Service, brings increased has been implemented.
stakeholder connectivity and An incident management and breach
an increased exposure to such response plan is in place if security
risk. controls were to be bypassed. Mitigation
has been improved with the adoption
of industry best practice such
as Security Guideline v 4.0 and
OWASP 10 and the use of specialist
software such as SonarCloud to
eliminate bugs and vulnerabilities
in the development process. Best
in class penetration testing was
undertaken prior to the launch
of DXRX and remains a core component
of our security strategy.
Market risks and economic The Group's business model includes
conditions flexibility in both service offering
The Group may be affected and cost structure which can react
by general market trends which to downturns in the market to lessen
are unrelated to the performance the immediate effect.
of the Group itself. Ongoing engagement with stakeholders,
Any economic downturn either regular dialogue with clients,
globally or locally in any research and marketing activities
area in which the Group operates and regular strategic reviews of
may have an adverse effect the overall business assist in
on the demand for the Group's maintaining a sustainable business.
revenue, profit, growth and
cash flow over a sustained
period.
Events beyond the control The Directors have considered the
of the Group may have adverse financial impact of the spread
effects on the business of COVID-19 globally. Based on
The possible threat of natural current information, we believe
disasters affecting the ability the impact on proposals conversion,
to trade. new client product launches and
The Group faces risks in relation deferral of spend on client brands
to the political and economic is temporary. A COVID-19 strategy
instability associated with has been implemented around client
the UK leaving the European engagement and data ingestion which
Union, as well as potential will continue to be reviewed and
changes to the legal framework developed as additional information
applicable to its business. is provided.
The possible threat of natural The overall impact of Brexit on
disasters affecting the ability the Group's business is expected
to trade. to be low risk and to-date the
Directors have not witnessed any
material adverse impact. Executives
continue to monitor the situation
and a Brexit strategy has been
implemented, which includes the
ability to attract talent from
outside the UK and the use of the
corporate structure to hold assets
in Ireland as part of the EU regional
activity.
Foreign exchange rate fluctuations A working capital model and cash
may adversely affect the Group's flow projections are used to plan
results for business transacted into different
The Group prepares its financial currencies so that exchange rate
statements in pounds sterling, risk is minimised. The Group seeks
but a substantial proportion to match foreign currency costs
of the Group's income and and flex cash flows to align with
costs are and will continue corresponding foreign currency
to be in foreign currencies. receivables.
To the extent that the Group's The Group operates current bank
foreign currency assets and accounts in multiple currencies.
liabilities are not matched It aims to ensure that the receipts
or hedged, fluctuations in and payments in a particular currency
exchange rates between pounds are made through the bank account
sterling and other currencies in that currency to reduce the
may result in realised or amount of translation exposure.
unrealised exchange gains In addition, the Group maintains
and losses on translation a revolving credit facility which
of the underlying currency can be drawn in US dollars, pounds
into pounds sterling. sterling or euro.
The risks and uncertainties described above had no material
adverse impact on the results presented for H1 2021. These risks
and uncertainties are reviewed on an ongoing basis by the Board and
are not expected to materially change for the remainder of the 2021
financial year.
ESG
The Group has received a risk assessment of its impact on
Environmental, Social and Governance (ESG) strategy.
Whilst the Group are not considered to be a significant
contributor to carbon footprint, we recognise that pre COVID-19 we
contributed to carbon emission through international travel. Senior
management are working with its employees to identify opportunities
to reduce Diaceutics PLC's carbon footprint and to standardise
management of carbon emission data across the Group as we enter a
period of post-covid norm. A detailed assessment will commence
during H2 2021.
The Group are currently working with local academic institutions
to identify opportunities to support intake of students to the
business particularly considering the announcement of our new
Headquarters in Belfast - The Dataworks. The Group would like to
support undergraduates who are intending on taking internships and
who are seeking employment following the completion of their
studies. In addition, the Group are exploring sponsorship of
scholarships for MSc students.
The Group continues to support diversity and inclusion on all
levels with the aim of taking positive action which will ensure
that our staff are aware of the requirement for inclusivity which
aligns with our overall strategy. Senior Management are seeking to
ensure that data is standardised and transparent across the
business and seek to adopt a formal framework of reporting. In
addition, continuous development of our current employees through
internal training and development programs, our EFFECT leadership
courses, and our mentoring program seek to ensure that we develop
and invest in our workforce.
The Board are committed to continued improvement of the Group's
ESG strategy and will continue to identify opportunities to evolve
its strategy during the remainder of the 2021 financial year and
beyond.
Philip White
Chief Financial Officer
13 September 2021
Statement of Directors' responsibilities
The Directors confirm that the condensed consolidated interim
financial statements have been prepared in accordance with IAS 35
'Interim Financial Reporting' as adopted by the European Union and
that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 3.2.8, namely:
-- An indication of important events during the six-month period
ended 30 June 2021 and their impact on the interim financial
statements, and a description of the principal risks and
uncertainties for the remainder of the financial year ended 31
December 2021; and
-- Material related party transactions in the six-month period
and any material changes in related party transactions described in
the last annual report.
The Directors of Diaceutics PLC were listed in the 2020
Diaceutics PLC Annual report and financial statements. There have
been no changes in respect of Director appointments in the period
reported and up to the signing date of these interim financial
statements.
On behalf of the Board:
Peter Keeling Philip White
Chief Executive Officer Chief Financial Officer
13 September 2021 13 September 2021
Condensed Group Profit and Loss Account
for the six months ended 30 June 2021
Six months Six months
to 30 June to 30 June
2021 (Unaudited) 2020 (Unaudited)
Notes GBP000's GBP000's
Revenue 2 5,966 5,301
Cost of sales (1,580) (1,545)
----------------- -----------------
Gross profit 4,386 3,756
Administrative expenses (5,061) (3,826)
Other operating income 3 144 102
----------------- -----------------
Operating (loss)/profit (531) 32
Finance costs 4 (6) (5)
----------------- -----------------
(Loss)/profit before tax (537) 27
Income tax credit 5 202 1,050
(Loss)/profit for the financial period (335) 1,077
================= =================
All results relate to continuing operations.
Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2021
Six months Six months
to 30 June to 30 June
2021 (Unaudited) 2020 (Unaudited)
GBP000's GBP000's
(Loss)/profit for the financial period (335) 1,077
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of foreign operations (205) 267
Total comprehensive (loss)/profit for
the period, net of tax (540) 1,344
================= =================
Earnings per share
for the six months ended 30 June 2021
Six months Six months
to 30 June to 30 June
2021 (Unaudited) 2020 (Unaudited)
Pence Pence
Basic 7 (0.40) 1.52
Diluted 7 (0.40) 1.51
================= =================
Condensed Group Balance Sheet
as at 30 June 2021
31 December 30 June
30 June 2020 2020
Notes 2021 (Unaudited) (Audited) (Unaudited)
ASSETS GBP000's GBP000's GBP000's
Non-current assets
Intangible assets 8 11,205 9,361 6,540
Property, plant and equipment 9 483 238 234
Deferred tax asset 5 539 301 76
------------------ ----------- ------------
12,227 9,900 6,850
------------------ ----------- ------------
Current assets
Trade and other receivables 10 4,489 6,107 4,841
Income tax receivable 2,026 2,257 1,215
Cash at bank and in hand 23,745 25,255 29,766
------------------ ----------- ------------
30,260 33,619 35,822
------------------ ----------- ------------
TOTAL ASSETS 42,487 43,519 42,672
================== =========== ============
EQUITY AND LIABILITIES
Equity share capital 13 168 168 168
Share premium 36,864 36,864 36,864
Translation reserve (190) 15 287
Profit and loss account 3,149 3,191 3,798
TOTAL EQUITY 39,991 40,238 41,117
================== =========== ============
Non-Current Liabilities
Deferred tax liability 5 421 366 -
------------------ ----------- ------------
Current liabilities
Trade and other payables 11 1,846 2,346 1,442
Financial liabilities 12 124 118 113
Income tax payable 105 451 -
2,075 2,915 1,555
------------------ ----------- ------------
TOTAL LIABILITIES 2,496 3,281 1,555
================== =========== ============
TOTAL EQUITY AND LIABILITIES 42,487 43,519 42,672
================== =========== ============
Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2021
Called up share Share premium* Profit and loss Total
capital Translation reserve account equity
GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January 2020 139 17,335 20 2,638 20,132
===================== =============== ==================== ===================== =========
Profit for the period - - - 1,077 1,077
Other comprehensive
income - - 267 - 267
Total comprehensive
income for the
period - - 267 1,077 1,344
--------------------- --------------- -------------------- --------------------- ---------
Transactions with
owners, recorded
directly in equity
Exercise of warrant 1 264 - - 265
Share based payment - - - 83 83
Issue of shares on
Placing 28 19,265 - - 19,293
Total transactions
with owners 29 19,529 - 83 19,641
--------------------- --------------- -------------------- --------------------- ---------
At 30 June 2020
(unaudited) 168 36,864 287 3,798 41,117
===================== =============== ==================== ===================== =========
Loss for the period - - - (813) (813)
Other comprehensive
expenses - - (272) - (272)
Total comprehensive
expenses for the
period - - (272) (813) (1,085)
--------------------- --------------- -------------------- --------------------- ---------
Transactions with
owners, recorded
directly in equity
Share based payments - - - 206 206
Total transactions
with owners - - - 206 206
--------------------- --------------- -------------------- --------------------- ---------
At 31 December 2020
(audited) 168 36,864 15 3,191 40,238
===================== =============== ==================== ===================== =========
* Costs of GBP1.2m directly related to the secondary fund raise
were offset against the share premium account
Called up share Profit and loss Total
capital Share premium Translation reserve account equity
GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January 2021 168 36,864 15 3,191 40,238
===================== =============== ==================== ===================== =========
Loss for the period - - - (335) (335)
Other comprehensive
expenses - - (205) - (205)
Total comprehensive
expenses for the
period - - (205) (335) (540)
--------------------- --------------- -------------------- --------------------- ---------
Transactions with
owners, recorded
directly in equity
Share based payment - - - 293 293
Total transactions
with owners - - - 293 293
--------------------- --------------- -------------------- --------------------- ---------
At 30 June 2021
(unaudited) 168 36,864 (190) 3,149 39,991
===================== =============== ==================== ===================== =========
Condensed Group Statement of Cash Flows
for the six months ended 30 June 2021
.
Six months Six months
to 30 June to 30 June
Notes 2021 (Unaudited) 2020 (Unaudited)
GBP000's GBP000's
Operating activities
(Loss)/profit before tax (537) 27
Adjustments to reconcile (loss) / profit
before tax to net cash flows from operating
activities
Net finance costs 4 6 5
Amortisation of intangible assets 8 775 226
Depreciation of property, plant and
equipment 9 31 3
Research and development tax credits 5 (123) (75)
Decrease in trade and other receivables 10 1,559 2,029
Increase in trade and other payables 11 (731) (763)
Effect of translation on intergroup
balances (7) (186)
Share based payments 293 83
------------------ ------------------
Cash generated in operations 1,266 1,349
Tax received/(paid) 26 (45)
------------------ ------------------
Net cash inflow from operating activities 1,292 1,304
------------------ ------------------
Investing activities
Purchase of intangible assets (2,481) (2,879)
Purchase of property, plant and equipment (277) (102)
------------------ ------------------
Net cash outflow from investing activities (2,758) (2,981)
------------------ ------------------
Financing activities
Issue of shares - 19,614
------------------ ------------------
Net cash inflow from financing activities - 19,614
------------------ ------------------
Net (decrease)/increase in cash and
cash equivalents (1,466) 17,937
Net foreign exchange movements (44) 109
Opening cash and cash equivalents 25,255 11,720
------------------ ------------------
Closing cash and cash equivalents 23,745 29,766
================== ==================
Notes to the Condensed Group Financial Statements
for the six months ended 30 June 2021
1. Summary of significant accounting policies
Basis of preparation
These condensed financial statements for the six months to 30
June 2021 have been prepared in accordance with IAS 34 'Interim
Financial Reporting' and should be read in conjunction with the
Group's last annual consolidated financial statements as at and for
the year ended 31 December 2020 ('last annual financial
statements'). They do not include all of the information required
for a complete set of financial statements prepared in accordance
with International Financial Reporting Standards (IFRS) pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
and in conformity with the requirements of the Companies Act 2006.
However, selected explanatory notes are included to explain events
and transactions that are significant to an understanding of the
changes in the Group's financial position and performance since the
last annual financial statements.
The financial information for the year ended 31 December 2020
set out in this interim report does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31
December 2020 have been filed with the Registrar of Companies and
can be found on the Group's website. The auditor's report on those
financial statements was unqualified and did not contain statements
under Section 498(2) or Section 498(3) of the Companies Act
2006.
The accounting policies, presentation and methods of computation
applied by the Group in these condensed financial statements are
the same as those applied in the Group's latest audited annual
consolidated financial statements for the year ended 31 December
2020. No newly introduced standard or amendments to standards had a
material impact on the condensed financial statements. The Group
has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements and are disclosed in the notes to these
interim financial statements.
Going Concern
The financial performance and balance sheet position at 30 June
2021 along with a range of scenario plans to 31 December 2023 has
been considered, applying different sensitives to the Group's
budgets and forecasts. Across these scenarios, including at the
lower end of the range, there remains significant headroom, and
therefore the Directors have satisfied themselves that the Group
has adequate funds in place to continue to meet its obligations as
they fall due to the foreseeable future, a period of which is at
least 12 months from the date of signing these interim financial
statements.
2. Segmental analysis
For all periods reported the Group operated under one reporting
segment but revenue is analysed under three (H1 2020: two) separate
revenue streams.
Revenue represents the amounts derived from the provision of
services which fall within the Group's ordinary activities, stated
net of value added tax. Revenue is principally generated from
Implementation services, Data and Network access.
The following tables present revenue of the Group for the six
months ended 30 June 2021 and 30 June 2020.
a) Revenue stream
Six months Six months
to 30 June to 30 June
2021 2020
GBP000's GBP000's
Implementation services 1,820 530
Data 4,101 4,771
Network access 45 -
5,966 5,301
============ ============
b) Geographical area
Six months Six months
to 30 June to 30 June
2021 2020
GBP000's GBP000's
USA 3,767 3,138
UK 212 679
Europe 1,472 806
Asia 515 678
5,966 5,301
============ ============
3. Other operating income
Six months Six months
to 30 June to 30 June
2021 2020
GBP000's GBP000's
Government grants 21 27
Research and developments credits 123 75
144 102
============ ============
4. Finance costs
Six months Six months
to 30 June to 30 June
2021 2020
GBP000's GBP000's
External loans 6 5
============ ============
5. Income tax
UK corporation tax is calculated at 19% (2020: 19%) of the
taxable profit or loss for the period. Taxation for other
jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
A reduction in the UK corporation tax rate from 19% to 17%
(effective from 1 April 2020) was enacted in Finance Act 2016. A
change to the main UK corporation tax rate, announced in the Budget
on 11 March 2020, was substantively enacted on 17 March 2020. The
rate applicable from 1 April 2020 now remains at 19%, rather than
the previously enacted reduction to 17%. The impact of this change
was GBP112,414.
The group is preparing an R&D Tax Credit claim for the
accounting period ended 31 December 2020. The total tax benefit
from the claim is estimated at GBP1,674,584 which after offsets is
expected to provide a cash tax refund of GBP1,546,667.
The Group has a deferred tax asset of GBP539,185 (H1 2020:
GBP422,647) and a deferred tax liability of GBP421,288 (H1 2020:
GBP347,215) which nets to deferred tax asset of GBP117,897 (H1
2020: GBP75,432).. The deferred tax asset is recognised on the
basis that the Group has forecasted sufficient profits on which the
deferred tax asset will be utilised in future periods. Tax losses
carried forward amount to GBP2,008,020 (H1 2020: GBP901,274) within
Diaceutics PLC.
The Group has tax losses carried arising in subsidiary
undertakings. Due to the uncertainty of the recoverability of the
tax losses within these subsidiaries, a potential deferred tax
asset of GBP262,419 (H1 2020: GBP76,336) has not been
recognised.
All other deferred tax assets and liabilities have otherwise
been recognised as they arise.
6. Share Based Payments
The Group currently has an Employee share Option Plan ("ESOP")
for employees and a Long-Term Incentive Plan ("LTIP") for key
management.
The ESOP and LTIP are designed to provide long term incentives
for senior management and above, and certain employees (including
executive directors) to deliver long-term shareholder returns and
promote staff retention. Under these schemes, employees are granted
options which only vest if certain performance standards are met.
For the ESOP and LTIP options that are outstanding as at 30 June
2021, the only performance obligations attached are continued
employment to date of vesting, with no more than two unsatisfactory
performance reviews.
On 1 April 2021, Diaceutics launched a Share Incentive Plan
("SIP Scheme") for all eligible UK and International employees. For
UK employees, the SIP Scheme is formed of Partnership Shares and
Matching Shares. Employees are offered the opportunity to purchase
ordinary shares in the Company on a monthly basis (up to a maximum
of GBP1,800 per person per tax year or 10% of an employee's pay if
this is lower), which will be held in an independent SIP trust
("Partnership Shares"). The Company will match these with the
allocation of two extra shares for every one share purchased, up to
and including April 2022. After which time, the allocation from the
Company will be one extra share per Partnership Share purchased
("Matching Shares"). Matching Shares must ordinarily be retained in
the SIP Trust for a minimum of three years.
6. Share Based Payments (continued)
The plan for international employees is drafted to mirror the UK
plan as far as possible but may not provide the same personal tax
advantages as the UK plan.
The total expense recognised in the six-month period in relation
to share based payment charges is GBP293,000 (H1 2020:
GBP83,000).
Set out below are summaries of options granted under the
plans:
ESOP:
2021 2020
Average exercise Number of options Average exercise Number of options
price per share price per share
option option
------------------ ------------------ ----------------- ------------------
As at 1 July GBP0.0002 168,000 GBP0.0002 197,400
------------------ ------------------ ----------------- ------------------
Granted during GBP0.0002 218,400 GBP0.0002 -
the year
------------------ ------------------ ----------------- ------------------
Exercised during - - - -
the year
------------------ ------------------ ----------------- ------------------
Forfeited during
the year GBP0.0002 92,400 GBP0.0002 29,400
------------------ ------------------ ----------------- ------------------
As at 30 June GBP0.0002 294,000 GBP0.0002 168,000
------------------ ------------------ ----------------- ------------------
LTIP:
2021 2020
Average exercise Number of options Average exercise Number of options
price per share price per share
option option
------------------ ------------------ ----------------- ------------------
As at 1 July GBP1.265 1,395,961 - -
------------------ ------------------ ----------------- ------------------
Granted during
the year GBP0.002 891,971 GBP1.265 1,430,244
------------------ ------------------ ----------------- ------------------
Exercised during - - - -
the year
------------------ ------------------ ----------------- ------------------
Forfeited during
the year GBP1.038 430,983 GBP1.265 34,283
------------------ ------------------ ----------------- ------------------
As at 30 June GBP0.711 1,856,949 GBP1.265 1,395,961
------------------ ------------------ ----------------- ------------------
6. Share Based Payments (continued)
SIP:
2021 2020
Average exercise Number of options Average exercise Number of options
price per share price per share
option option
----------------- ------------------ ----------------- ------------------
As at 1 July - - - -
----------------- ------------------ ----------------- ------------------
Granted during GBP0.002 17,984 - -
the year
----------------- ------------------ ----------------- ------------------
Exercised during - - - -
the year
----------------- ------------------ ----------------- ------------------
Forfeited during GBP0.002 706 - -
the year
----------------- ------------------ ----------------- ------------------
As at 30 June GBP0.002 17,278 - -
----------------- ------------------ ----------------- ------------------
Share options outstanding at the year-end have the following
expiry dates and exercise prices:
ESOP:
Grant Date Expiry Date Exercise Price Share options Share options
at 30 June at 30 June
2021 2020
June 2019 June 2022 GBP0.0002 121,800 168,000
------------- ---------------- -------------- --------------
June 2020 June 2023 GBP0.0002 172,200 -
------------- ---------------- -------------- --------------
LTIP:
Grant Date Expiry Date Exercise Price Share options Share options
at 30 June at 30 June
2021 2020
April 2020 April 2023 GBP1.265 1,042,349 1,395,961
------------- ---------------- -------------- --------------
April 2021 April 2024 GBP0.002 814,600 -
------------- ---------------- -------------- --------------
SIP:
Grant Date Expiry Date Exercise Price Share options Share options
at 30 June at 30 June
2021 2020
May 2021 May 2024 GBP0.002 7,214 -
------------ --------------- -------------- --------------
June 2021 June 2024 GBP0.002 10,064 -
------------ --------------- -------------- --------------
The weighted average remaining contractual life of options
outstanding at the end of the year was 2.11 years. No options
expired during the year.
6. Share Based Payments (continued)
Fair value of options granted:
The weighted average fair value at grant date of options granted
during the period-ended 30 June 2021 was GBP0.002 per option. The
fair value at grant date is independently determined using an
adjusted Black-Scholes model which takes into account the exercise
price, the term of the option, the impact of dilution, the share
price at grant date and the expected price volatility of the
underlying share, and the risk-free interest rate for the term of
the options.
ESOP LTIP SIP
2021 2020 2021 2020 2021 2020
---------- ---------- --------- --------- ----------- -----
Ex Price GBP0.0002 GBP0.0002 GBP0.002 GBP1.265 GBP0.002 -
---------- ---------- --------- --------- ----------- -----
Grant date June June April April May -
June
---------- ---------- --------- --------- ----------- -----
Expiry June 2023 June 2022 April April May 2024 -
date 2024 2023 June 2024
---------- ---------- --------- --------- ----------- -----
Share price GBP1.52 GBP0.85 GBP1.26 GBP1.265 GBP1.289 -
at Grant GBP1.3
date
---------- ---------- --------- --------- ----------- -----
Volatility 57.88% 57.88% 92.00% 57.88% 92.00% -
---------- ---------- --------- --------- ----------- -----
Risk-free
rate 0.53% 0.53% 0.41% 0.53% 0.41% -
---------- ---------- --------- --------- ----------- -----
Fair-value GBP1.49 GBP0.85 GBP0.002 GBP1.25 GBP0.002 -
---------- ---------- --------- --------- ----------- -----
The expected price volatility is based on the historical
volatility & companies within similar industries.
7. Earnings per share
Basic earnings per share are calculated based on the
(loss)/profit for the financial year attributable to equity holders
divided by the weighted average number of shares in issue during
the year. The weighted average number of shares for all periods
presented has been adjusted for the impact of the secondary fund
raise in June 2020.
Adjusted earnings per share are calculated based on the
(loss)/profit for the financial year adjusted for exceptional items
GBPnil (June 2020 GBPnil). Diluted earnings per share is calculated
on the basic earnings per share adjusted to allow for the issue of
ordinary shares on the assumed conversion of the convertible loan
notes and share options granted under the employee share option
plan.
7. Earnings per share (continued)
Profit attributable to shareholders
Six months Six months
to 30 June to 30 June
2021 2020
GBP000's GBP000's
(Loss)/profit for the financial period (335) 1,077
(335) 1,077
============ ============
Weighted average number of shares to shareholders
Six months Six months
to 30 June to 30 June
2021 2020
Number Number
Ordinary Shares in issue at the end
of the period 84,068,923 84,068,923
------------ ------------
Weighted average number of shares in
issue 84,068,923 70,996,870
Weighted average number of shares for
basic
and adjusted earnings per share 84,068,923 70,996,870
Effect of dilution of Convertible Loan
Notes 754 754
Effect of dilution of share options
granted 257,584 175,721
Weighted average number of shares for
diluted
earnings per share 84,327,261 71,173,345
============ ============
Earnings per share
Six months Six months
to 30 June to 30 June
2021 2020
Pence Pence
Basic (0.40) 1.52
------------ ------------
Diluted (0.40) 1.51
------------ ------------
8. Intangible assets
Patents Development Platform Software
and trademarks Datasets expenditure Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 1 January
2020 1,054 1,286 2,461 - 210 5,011
Foreign exchange 64 2 122 - - 188
Additions 57 649 2,023 - 150 2,879
---------------- ---------- ------------- ---------- ---------- ---------
At 30 June
2020 1,175 1,937 4,606 - 360 8,078
Foreign exchange (22) 5 (142) - - (159)
Transfer from
Development
expenditure
to Platform - - (6,577) 6,577 - -
Additions 37 813 2,535 - 125 3,510
---------------- ---------- ------------- ---------- ---------- ---------
At 31 December
2020 1,190 2,755 422 6,577 485 11,429
Foreign exchange (38) (17) (3) (79) - (137)
Transfer from
Development
expenditure
to Platform - - (9) 9 - -
Additions 5 982 1,691 - 35 2,713
At 30 June
2021 1,157 3,720 2,101 6,507 520 14,005
---------------- ---------- ------------- ---------- ---------- ---------
8. Intangible assets (continued)
Patents Development Platform Software
and trademarks Datasets expenditure Total
Amortisation GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January
2020 976 193 78 - 3 1,250
Foreign exchange 60 1 - - - 61
Charge for
the period 31 126 41 - 28 226
---------------- ---------- -------------- ---------- ---------- ---------
At 30 June
2020 1,067 320 119 - 31 1,537
Foreign exchange (17) (2) (1) - - (20)
Transfer from
Development
expenditure
to Datasets - 78 (78) - - -
Transfer from
Development
expenditure
to Platform - - (40) 40 - -
Charge for
the period 26 479 - - 46 551
---------------- ---------- -------------- ---------- ---------- ---------
At 31 December
2020 1,076 875 - 40 77 2,068
Foreign exchange (38) (5) - - - (43)
Charge for
the period 40 360 - 326 49 775
At 30 June
2021 1,078 1,230 - 366 126 2,800
---------------- ---------- -------------- ---------- ---------- ---------
Net book value
At 30 June
2021 79 2,490 2,101 6,141 394 11,205
================ ========== ============== ========== ========== =========
At 31 December
2020 114 1,880 422 6,537 408 9,361
================ ========== ============== ========== ========== =========
At 30 June
2020 107 1,617 4,487 - 328 6,540
================ ========== ============== ========== ========== =========
8. Intangible assets (continued)
Intangible assets relate to patents, trademarks, software and
datasets which are recorded at cost and amortised over their useful
economic life which has been assessed as two to five years.
On 1 December 2020 the Group's platform - DXRX was commissioned
and brought into use. On this date GBP6,577,000 was transferred out
of development expenditure and into platform. A further GBP9,000
has been transferred in the 6 months to 30 June 2021.
The Group assesses the useful life of all assets on an annual
basis. On reviewing the useful life of the data sets it was
determined that based on latest information on commercial and
technical use, four years represented the best estimate of the
useful life of such assets.
The Group has determined that the useful life of data and the
useful life of platform is a significant area of estimation.
The platform has been assessed to have a useful life of 10 years
based on information on the estimated technical obsolescence of
such assets. However, the actual asset useful life may be shorter
or longer than 10 years depending on technical innovations and
other external factors. If the useful life were eight years, the
carrying amount of the asset would reduce by GBP30,000 to
GBP6,111,000. If the useful life of the asset were 12 years, the
carrying amount of the asset would increase by GBP20,000 to
GBP6,161,000.
Data sets have been assessed to have a useful life of four years
based on information on the estimated commercial and technical use
of such assets. However, the actual asset useful life may be
shorter or longer than 4 years depending on technical innovations
and other external factors. If the useful life were 3 years, the
carrying amount of the asset would reduce by GBP22,000 to
GBP2,468,000. If the useful life of the asset were 5 years, the
carrying amount of the asset would increase by GBP15,000 to
GBP2,505,000.
The recoverable value of intangible assets is measured using
discounted cash flow forecasts and the valuation model at 30 June
2021 indicated no impairment on these assets.
Amortisation in respect of Patents and trademarks and Software
is expensed to the Profit and Loss Account as Administrative
expenses. Platform and Datasets amortisation is included within
Cost of sales.
9. Property, plant and equipment
Leasehold Total
Office equipment Improvements
GBP000's GBP000's GBP000's
Cost
At 1 January 2020 257 - 257
Foreign exchange translation 3 - 3
Additions 103 - 103
At 30 June 2020 363 - 363
Foreign exchange translation (2) - (2)
Additions 34 - 34
At 31 December 2020 395 - 395
----------------- -------------- -----------
Foreign exchange translation (1) - (1)
Reclassification (59) 59 -
Additions 44 233 277
At 30 June 2021 379 292 671
----------------- -------------- -----------
Depreciation
At 1 January 2020 124 - 124
Foreign exchange translation 1 - 1
Charge for the period 3 - 3
At 30 June 2020 128 - 128
Foreign exchange translation (1) - (1)
Charge for the period 30 - 30
At 31 December 2020 157 - 157
----------------- -------------- -----------
Foreign exchange translation - - -
Charge for the period 31 - 31
At 30 June 2021 188 - 188
----------------- -------------- -----------
Net book value
At 30 June 2021 191 292 483
================= ============== ===========
At 31 December 2020 238 - 238
================= ============== ===========
At 30 June 2020 234 - 234
================= ============== ===========
10. Trade and other receivables
30 June 31 Dec 30 June
2021 2020 2020
GBP000's GBP000's GBP000's
Trade receivables 3,545 5,343 4,194
Other receivables 419 177 132
Prepayments 525 587 515
4,489 6,107 4,841
========= ========= =========
11. Trade and other payables
30 June 31 Dec 30 June
2021 2020 2020
GBP000's GBP000's GBP000's
Creditors : falling due within
one year
Trade payables 193 466 319
Accruals 1,489 1,259 772
Other tax and social security 3 318 219
Contract liabilities 151 303 132
Derivative financial instruments -
(note 13) 10 -
1,846 2,346 1,442
========= ========= =========
Contract liabilities of GBP151,000 (H1 2020: GBP132,000) which
arise in respect of amounts invoiced during the period for which
revenue recognition criteria have not been met by the period end.
The Group's contracts with clients are typically less than one year
in duration and any contract liabilities would be expected to be
recognised as revenue in the following period.
12. Financial instruments
30 June 31 Dec 2020 30 June
2021 2020
GBP000's GBP000's GBP000's
Financial assets at cost
Trade receivables 3,545 5,343 4,194
Other receivables 419 177 132
Cash at bank and in hand 23,745 25,255 29,766
Financial liabilities at cost
Trade payables (193) (466) (319)
Accruals (1,489) (1,259) (771)
Convertible loan note (124) (118) (113)
Financial liabilities at fair
value
Derivative financial instruments (10) - -
12. Financial instruments (continued)
Convertible loan notes
GBP100,000 of the Loan Notes issued on 15 February 2019 remain
in place (10% interest rate payable annually from 1 April 2019).
These loan notes can be converted into Ordinary Shares in the
Company on or before 31 March 2022.
Derivative financial instruments - forward contracts and
options
The group has entered into a number of foreign currency
derivative contracts during the year. The nominal value of the
Group's forward contracts is GBP2,158,000 (30 June 2020: GBPnil)
principally to sell US Dollars.
13. Share capital
30 June 31 Dec 2020 30 June
2021 2020
GBP000's GBP000's GBP000's
Allotted, called up and fully paid
84,068,923 (June 2020 and Dec 2020:
84,068,923)
Ordinary shares of GBP0.002 each 168,138 168,138 168,138
========= ============ =========
All Ordinary Shares rank pari passu in all respects including
voting rights and the right to receive all dividends and other
distributions (if any) declared or made or paid in respect of
Ordinary Shares.
14. Commitments and contingencies
Diaceutics PLC has signed an agreement to lease a 10,000 square
foot Grade A building for a ten year period called the "Dataworks"
at Kings Hall Life Sciences Park, with an annual rent of
GBP195,000. Under IFRS16 The Group will recognise the Right of Use
Asset and Lease Liability of GBP1,548,000 from commencement of the
lease September 2021. We have capitalised GBP292,000 for the
building fitout as at 30 June 2021.
15. Related Parties
The ownership of the "Dataworks" lease lies within the landlord
company, O'Connor & McCann Limited ("OCMCL"). Peter Keeling is
a director of OCMCL, his wife and two children have a 13% interest
in OCMCL in aggregate, and Ryan Keeling, Chief Innovation Officer
of the Company holds a 2.5% interest in OCMCL.
With the exception of Ryan and Peter Keeling as related parties
to the transaction, the Company's independent directors consider,
having consulted with its nominated adviser at the time, that the
terms of the transaction are fair and reasonable insofar as its
shareholders are concerned.
There were no related party transactions during the six-month
period to 30 June 2020.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR LJMMTMTJBTBB
(END) Dow Jones Newswires
September 14, 2021 02:00 ET (06:00 GMT)
Diaceutics (LSE:DXRX)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Diaceutics (LSE:DXRX)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
