REG - Allergy Therapeutics - Audited Preliminary Results 2024
06/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241106:nRSF0821La&default-theme=true
RNS Number : 0821L Allergy Therapeutics PLC 06 November 2024
Allergy Therapeutics PLC
("Allergy Therapeutics" or the "Group")
Audited Preliminary Results for the Year ended 30 June 2024
- Financial turnaround progressing with revenue growth in the second
half, marking the first period of half year growth since 2021
- EBITDA pre-R&D and exceptionals loss of £6.8m for the year
(2023: loss £10.6m), an improvement of 36%
- Post period, strengthened cash position through new £40m Hayfin
facility, comprising £20m committed five-year term loan and £20m uncommitted
incremental facility
- Pivotal Phase III Grass MATA MPL trial (G306) successfully meets
primary endpoint; clinical development expanded to paediatric population with
commencement of G308 Phase III trial and positive discussions with regulators
on pathway to marketing authorisation application (MAA) submission
- Phase I/IIa VLP Peanut PROTECT trial remains on target with healthy
and peanut allergic patients receiving subcutaneous doses with no unexpected
safety signals
6 November 2024 Allergy Therapeutics (AIM: AGY), the fully integrated
specialty pharmaceutical company specialising in allergy vaccines, today
announces its audited preliminary results for the year ended 30 June 2024.
Highlights (including post-period events)
Financial
- Revenue of £55.2m (2023: £59.6m) from commercial portfolio,
with encouraging H2 performance showing first period of half-year growth since
2021. Full year revenue impacted by supply constraints to key markets of
Germany and Spain.
- Operating loss pre-R&D and exceptional costs improved to
£11.1m (2023: £14.8m loss), reflecting successful implementation of cost
control initiatives which have significantly reduced the Group's cost base
pre-R&D.
- Exceptional costs of £1.2m consisting of one-off restructuring
costs in connection with implementing the cost control initiatives.
- R&D investment increased to £22.9m (2023: £20.1m),
reflecting continued advancement of key clinical programmes including pivotal
Phase III G306 trial for Grass MATA MPL and VLP Peanut PROTECT study.
- Full year net loss of £40.2m (2023: net loss of £43.1m)
despite the reduction in revenue and strategic increase in R&D costs.
- Completed a £40.75m equity financing in October 2023, the
proceeds of which were used to repay amounts drawn at that time under the
original shareholder loan facility ("Loan Facility") arranged with ZQ Capital
Management Limited (acting through its affiliate SkyGem International Holdings
Limited) and Southern Fox Investments. At 30 June 2024, £22.5m of the secured
facility had been drawn with £17.5m of the uncommitted facility remaining
- Cash balance of £12.9m at 30 June 2024 (2023: £14.8m).
Post Period Financial Events
- Secured additional £5m funding support from major shareholders
SkyGem Acquisition Limited and Southern Fox Investments Limited through
existing amended loan facility.
- Strengthened cash position with new £40m Hayfin Healthcare
Opportunities facility, comprising £20m committed five-year term loan and
£20m uncommitted incremental facility. Arrangement includes issuance of
warrants representing 2.7% of issued share capital.
- Increase of the amended Loan Facility from £40m to £50m.
- Implemented new Long Term Incentive Plan to align key leadership
interests with long-term shareholder value creation and strategic objectives.
Operational
- Pivotal G306 Phase III trial to evaluate efficacy and safety of
Grass MATA MPL met primary endpoint; positive discussions held with Paul
Ehrlich Institut (PEI) on pathway to MAA submission in Q4 2024 under the TAV
programme in Germany.
- Post period, commencement of G308, long term Phase III
paediatric trial for Grass MATA MPL underway following the success of the
pivotal G306 Phase III trial.
- Second cohort of peanut allergic patients in the Phase I/IIa VLP
Peanut PROTECT trial completed dosing in September 2024 with up to 50-fold
dose increase from initial dose. No relevant safety or tolerability findings
observed in either peanut allergy patients or healthy subjects at higher
doses. Preliminary biomarker analysis of efficacy expected by end of 2024.
Manuel Llobet, CEO of Allergy Therapeutics, stated: "This year has been one of
continued resilience, progress, and commitment. While navigating our
challenges, we've remained laser-focused on what matters most - advancing our
critical R&D programmes and strengthening our core operations.
"I'm particularly proud of what we've achieved with our Grass MATA MPL
programme, where our pivotal Phase III G306 trial delivered exceptional
results, showing a 20.3% improvement over placebo. Our VLP Peanut PROTECT
trial is also progressing well, with safety data that continues to reinforce
our confidence in the programme, and we look forward to our first
biomarker-led efficacy data expected in Q4 2024.
"On the operational side, we've made significant strides in enhancing our
manufacturing capabilities and implementing effective cost controls across the
business. Meanwhile, our commercial performance has shown encouraging signs,
with revenue growth in the second half - our first such growth since 2021.
With the recent Hayfin facility and continued backing from our major
shareholders, we now have the financial foundation to advance our key R&D
programmes, particularly the upcoming regulatory submission for Grass MATA MPL
and the continued development of our VLP Peanut programme. Looking ahead,
Allergy Therapeutics is in its strongest strategic position in years, and I'm
excited about what we can achieve."
This announcement contains inside information for the purposes of the market
abuse regulation (EU) no. 596/2014 as it forms part of United Kingdom domestic
law by virtue of the European (withdrawal) act 2018, as amended ("MAR").
- ENDS -
For further information, please contact: Allergy Therapeutics
+44 (0) 1903 845 820
Manuel Llobet, Chief Executive Officer
Shaun Furlong, Chief Financial Officer
Cavendish Capital Markets Limited (Nominated Adviser and Broker)
Geoff Nash /Giles Balleny/ Seamus Fricker / Rory Sale
Nigel Birks - Life Science Specialist Sales
Harriet Ward/Tamar Cranford Smith - ECM/Sales
+44 (0)20 7220 0500
ICR Healthcare
+44 20 3709 5700
Mary-Jane Elliott / David Daley / Davide Salvi
allergytherapeutics@consilium-comms.com
(mailto:allergytherapeutics@consilium-comms.com)
Notes for editors:
About Allergy Therapeutics
Allergy Therapeutics is an international commercial biotechnology Group,
headquartered in the UK, focused on the treatment and diagnosis of allergic
disorders, including aluminium free immunotherapy vaccines that have the
potential to cure disease. The Group sells proprietary and third-party
products from its subsidiaries in nine major European countries and via
distribution agreements in an additional ten countries. Its broad pipeline of
products in clinical development includes vaccines for grass, tree, house dust
mite and peanut. For more information, please see www.allergytherapeutics.com
(http://www.allergytherapeutics.com/) . (http://www.allergytherapeutics.com/)
Chairman and Chief Executive Officer Review
Introduction
This past year has been one of continued resilience, progress, and commitment.
Through our highly focused approach to the Group's business priorities and a
steadfast commitment to our Grass and Peanut allergy R&D programmes, we
have continued our financial recovery and achieved notable clinical progress.
Both showcase our determination in the face of adversity and demonstrate how
we live our values everyday.
We have committed to enhance the Group's manufacturing capabilities and reduce
operating costs in all areas, pre-R&D and exceptionals, to ensure Allergy
Therapeutics is on a strong footing for the future. Alongside these
commitments and considering our challenges, our commercial business in Europe
has performed well in its fundamentals. The second half of the year brought
the first period of half year revenue growth seen since 2021, which the board
believe signals the return to sustainable growth.
Board Composition
Throughout the year, there were changes in our Board composition. We were
pleased to appoint Dr. Shaun Furlong as an Executive Director. Shaun has
proven himself to be an invaluable asset to us since his appointment as Group
Financial Controller in April 2022 and more recently as Chief Financial
Officer in August 2023. We also welcomed David Ball as an independent
Non-Executive Director and Chair of the Board's Audit and Risk Committee,
bringing over 25 years of financial markets expertise to our team.
Additionally, we bid farewell to Mary Tavener, who resigned from her position
as a Non-Executive Director after five years of dedicated service, and we
thank her for her contributions. As a result of these changes, we reviewed
the membership of our Committees.
Financial Performance and Clinical Development - Two Halves
Two Halves - Financial Performance
This year was a year of two halves. On one side, financially, the Company
continued to face challenges. Nonetheless, it continued to extend its cash
runway with cost saving initiatives and by securing investment. On the other
side, we have celebrated success in the clinical development of our products.
Following the satisfaction of FDI clearance conditions the open offer and
subscription was launched. This led to the mandatory cash offer by SkyGem.
These events saw a dramatic change to our shareholder base, approximately 93%
of which now sits with SkyGem and Southern Fox. The loan facility provided by
SkyGem and Southern Fox was amended twice in the period. In December 2023 we
announced a £40m loan facility with SkyGem and Southern Fox, of which £7.5m
was initially committed. Through successful discussions with our major
shareholders, we have secured a further £15m drawdown from our existing
facility. This additional funding extended our cash runway into Q1 FY2025,
providing us with the financial flexibility to advance our innovative R&D
pipeline. We would like to express our gratitude to our shareholders for their
continued support and trust in Allergy Therapeutics, which has been
instrumental in our ability to pursue our growth objectives.
We have experienced two years of extraordinary events and acknowledge the
effect this has had, particularly on minority shareholders, our employees who
have navigated the financial constraints together with the Company every day
and our communities, who we have had to support in a different way based on
our cash runway.
Two Halves - Clinical development
Successes in our clinical development initiatives provide further drive to
continue the pursuit of our goals.
Grass MATA MPL - a new approach to managing allergic rhinoconjunctivitis due
to grass pollen
The successful completion of the pivotal Phase III G306 trial for Grass MATA
MPL in November 2023 provided further evidence demonstrating the beneficial
treatment effect of our grass pollen allergy immunotherapy candidate
supporting our strategy to register the product with the Paul Ehrlich
Institute (PEI) under the TAV programme in Germany.
The primary endpoint of G306 demonstrated a statistically significant
improvement of 20.3% (p=0.00024) for Grass MATA MPL compared to placebo,
providing evidence of a substantial reduction in daily symptoms and use of
relief medication among participants receiving the immunotherapy candidate. A
highly statistically significant improvement in the rhinoconjunctivitis
quality of life questionnaire (p=0.0003) was also observed during the peak
season and the protective biomarker immunoglobulin (IgG4), measured during the
grass pollen season, showed an approximately five-fold increase after
treatment with Grass MATA MPL compared to placebo (p<0.0001), consistent
with data from the earlier G309 exploratory field trial.
These robust results support our plans for regulatory submission, with
discussions progressing well with the PEI on the clinical data package and
also in chemistry, manufacturing, and controls. We are on track for submission
in Germany in calendar Q4 2024, positioning Grass MATA MPL as the first
subcutaneous grass allergy immunotherapy registered via the TAV programme.
Concurrently, we are exploring US registration opportunities, with plans to
engage with the FDA regarding the clinical programme to meet US requirements.
Our long term paediatric trial, G308, has commenced marking another milestone
toward regulatory approval. We are excited to bring this innovative therapy to
market, addressing a critical need for new treatments for grass pollen
allergies, which significantly impact the quality of life for many
individuals.
Bringing Grass MATA MPL to this point in its development has been a huge
undertaking for the Group, with significant investment. We are extremely
encouraged by the possibility of bringing this state-of-the-art immunotherapy
to the market. Grass pollen, a common cause of seasonal allergy, significantly
impacts the lives of many people, and new treatment options are desperately
needed. The continued investment, particularly over the last two years, has,
of course, been challenging and we would like to especially thank the major
shareholders SkyGem and Southern Fox for their support.
VLP Peanut - Delivering a paradigm shift in the treatment of peanut allergy
The clinical development of the Group's innovative, short-course peanut
allergy vaccine candidate, VLP Peanut, via subcutaneous injection, is
progressing well. We believe this product has the potential to be a
ground-breaking, disease-modifying immunotherapy that could bring a
significant positive impact to the lives of patients, families and health
systems affected by peanut allergy,. As one of the most common food allergies,
peanut allergies affect approximately 1-2% of the US population.
The Phase I/IIa PROTECT trial, our first-in-human study evaluating the safety
and tolerability of VLP Peanut in healthy and peanut allergic adult subjects,
has progressed over the past 12 months.
Our promising safety and tolerability data have provided a solid basis for the
design of our upcoming Phase IIb study. Ahead of that, the PROTECT trial will
generate the first biomarker-led efficacy data, among higher-dose peanut
allergic patients. This data is expected to be available in Q4 2024.
Post Period Funding
Post period, on 15 October 2024, the Group entered into a £40m secured senior
loan facility (the "Hayfin Facility") with Hayfin Healthcare Opportunities
LuxCo S.a.r.l., a fund advised by Hayfin Capital Management LLP ("Hayfin").
Also on 15 October 2024, following discussions with major shareholders, SkyGem
Acquisition Limited (an affiliate of ZQ Capital Management Limited) and
Southern Fox Investments Limited (together the "Shareholder Lenders"), the
existing loan facility of £40m, details of which were announced on 27
December 2023, has been increased to £50m and its term extended to October
2030. For further information please see Note 21 below.
Outlook
Looking ahead, we remain focused on advancing our pipeline of innovative
allergy vaccines, expanding our market presence, and delivering value to
patients and shareholders alike. As we navigate the path forward, we remain
committed to our mission of transforming the lives of people affected by
allergies through our immunotherapy treatments.
Financial review
Overview
The financial turnaround of the Group continues to progress well, in line with
expectations, with the Group experiencing revenue growth in the second half of
the financial year, marking the first period of half year growth since 2021.
Revenue for H2 increased by 2% to £21.6m (H2 2023: £21.2m).
Effective cost controls implemented during the year have significantly reduced
the cost base of the Group. Total administrative expenses, pre-R&D and
exceptionals, decreased by 13% to £42.4m (2023: £48.9m).
The Group has continued to selectively invest in its programme of clinical
trials, with spend increasing by 14% to £22.9m (2023: £20.1m), which has
delivered successful progression of patient cohorts in the VLP Peanut PROTECT
trial and positive primary and secondary endpoints for the G306 Phase III
Grass MATA MPL trial.
The Group made an operating loss pre-R&D and exceptional costs of £11.1m
(2023: £14.8m loss). The loss is a consequence of the manufacturing capacity
allocated to investigational medicinal product batches for use in clinical
trials, and the ongoing programme of continuous improvement across the supply
chain and quality systems paving the way for increased capacity.
The Group measures the commercial performance of the business by monitoring
EBITDA pre-R&D and exceptionals (see Note 4), the Group achieved an EBITDA
pre-R&D and exceptionals loss of £6.8m for the year (2023: loss £10.6m),
an improvement of 36%.
The Company completed the £40.75m equity financing on 13 October 2023,
proceeds of which were used to repay amounts drawn at that time under the
shareholder loan facility with SkyGem Acquisition and Southern Fox, this
restructured the Group's balance sheet enhancing financial stability and
improving the net asset position.
Subsequent to the equity financing a further £40m secured loan facility was
agreed with the shareholders, of which £7.5m was initially committed. As at
30 June 2024 £22.5m had been drawn from the facility, following further
amounts becoming committed, and was used to fund the ongoing clinical trials,
capital expenditure and working capital.
Thank you to our major shareholders, SkyGem Acquisition and Southern Fox, who
have remained supportive of the Company throughout the period.
Revenue
Reported revenue decreased by 7% to £55.2m (2023: £59.6m). Revenue was down
in Germany and Spain as a consequence of supply constraints, with sales
outside of Germany and Spain remaining relatively flat or growing slightly.
Germany continues to be our largest sales market which accounted for 49%
(2023: 53%) of total revenue.
Revenue in H2 increased by 2% to £21.6m (H2 2023: £21.2m), representing the
first period of half year growth seen since 2021, with higher sales of
Pollinex and Pollinex Quattro compared to the prior period.
Gross profit
Cost of sales decreased to £25.5m (2023: £26.3m) reflecting the lower volume
of sales. The gross margin was 54% (2023: 56%) reflecting the slightly lower
sales contribution from Germany and Spain as a proportion of total sales,
resulting in a gross profit of £29.7m (2023: £33.2m).
Operating expenses
Sales, marketing and distribution costs decreased by £4.1m to £19.6m (2023:
£23.7m) mainly as a result of cost control activities.
Total administrative expenses were £6.5m lower than the prior year at £42.4m
(2023: £48.9m) mainly due to the ongoing effective cost controls that have
been implemented and have significantly reduced the cost base of the Group, a
strong performance given the backdrop of continued elevated levels of
inflation earlier in the year. The Group incurred £1.2m of one-off
restructuring costs in connection with implementing the cost control
initiatives, these have been treated as exceptional costs (see Note 6).
R&D expenditure rose by £2.8m due to investment in the G306 and G308
trials for Grass MATA MPL and the VLP Peanut PROTECT study.
Other income in the year of £1.5m (2023: £0.9m) was due to R&D tax
credits in the UK and Spain.
Financing costs
Financing costs increased by £1.8m to £4.2m (2023: £2.4m) as a result of
the greater usage of shareholder loans in the year primarily to fund its
R&D program, capital expenditure and working capital.
Earnings per share
Basic loss per share for the year was (1.07) pence (2023: (6.43) pence), the
main change being due to the issue of new shares in the year as a result of
the completion of the £40.75m equity conversion in October 2023 which
increased the number of issued ordinary shares.
Tax
The current year tax charge is predominantly comprised of liabilities for tax
in the Spanish and German subsidiaries. The overall charge in the income
statement is £1.1m (2023: £1.3m). As at 30 June 2024, the Group had
approximately £170m of unutilised tax losses (2023: approximately £130m)
available for offset against future profits.
Balance sheet
The Group has continued to develop the Energy Centre in Worthing to strengthen
business continuity and establish independence from GSK. The Energy Centre is
expected to be commissioned for use later in 2024. Property, plant and
equipment additions in the year were £4.1m (2023: £6.3m) primarily
reflecting investment in the Worthing Energy Centre and upgrade of plant in
the UK.
Inventories have increased to £12.7m (2023: £11.6m) as the Company continues
to stock build ahead of the next peak season following the impact of the
temporary manufacturing pause in 2022.
Cash and cash equivalents decreased to £12.9m (2023: £14.8m). The operating
cash outflow was £32.0m (2023: £28.4m) and £1.2m investing outflow (2023:
£4.6m) offset by a net £31.4m inflow from financing activities (2023:
£27.8m).
Retirement benefit obligations, which relate solely to the German pension
scheme, increased to £8.6m (2023: £7.9m).
The increase in the liability was mainly driven by changes to financial
assumptions with the discount rate at the end of the year decreasing to 3.85%
from 4.16%
Net assets of the Group increased from £2.1m to £3.7m primarily reflecting
the equity financing offset by the trading losses.
Currency
Group Treasury Policy mandates the use of forward exchange contracts to
mitigate exposure to the effects of exchange rates where expenditure/income is
committed and/or reasonably certain, however, throughout the financial year
previous hedge contracts were allowed to complete and all hedging contracts
came to an end in or around September 2023. This was due to security being
transferred from our primary banking provider to the shareholders as security
for the loans.
With over 85% of revenues and approximately 40% of costs (excluding research
and development costs) denominated in Euros, and approximately 40% of research
and development costs denominated in US dollars, movements in the currency
markets may have an effect on the Group's operational finances. It is the
Group's intention to reinstate its hedging policy as soon as practicable.
Financing
The Group completed a £40.75m equity financing on 13 October 2023 the
proceeds of which were used to repay amounts drawn at that time under the
original shareholder loan facility ("Loan Facility") arranged with ZQ Capital
Management Limited (acting through its affiliate SkyGem International Holdings
Limited) and Southern Fox Investments.
The Loan Facility agreement was amended twice (the "Amended Loan Facility"),
on 27 September 2023 and subsequently on 27 December 2023.
The Amended Loan Facility provided the Group with a £40.0m secured loan
facility of which £7.5m was committed from the outset and £32.5m initially
uncommitted. The Amended Loan Facility was available to be drawn down until 15
January 2026 with interest payable semi-annually at 12% per annum and a
repayment date of 15 January 2027. The Company issued warrants to the Lenders
following each drawdown under the Amended Loan Facility entitling the holders
to subscribe for new ordinary shares at a price of 4 pence per share. The
entitlement to warrants is 25 warrants for each £1 drawn down up to a maximum
of 1,000,000,000 warrants. The warrants are exercisable in whole or in part
from 1 July 2024 until 15 January 2027. The Company has agreed that the
proceeds of the warrants will be used to repay the principal amounts
outstanding under the Amended Loan Facility.
At 30 June 2024, £22.5m of the secured facility had been drawn with £17.5m
of the uncommitted facility remaining.
On 15 October the Group entered into a £40m secured senior loan facility (the
"Hayfin Facility") with Hayfin Healthcare Opportunities LuxCo S.a.r.l., a
fund advised by Hayfin Capital Management LLP ("Hayfin"). The Hayfin Facility
consists of a committed £20m five year term loan and an additional
uncommitted £20m incremental facility. As part of these financing
arrangements, the Company also issued to Hayfin 131,603,616 warrants to
subscribe for new ordinary shares, representing approximately 2.7% of the
issued share capital of the Company, with a nominal exercise price of 0.1
pence per warrant and exercisable for a period of ten years from the date of
issue. The committed Hayfin £20m loan is subject to an upfront arrangement
fee and has a variable interest rate based on SONIA plus 9.5% per annum with
interest payable based on Company selected interest periods.
Also on 15 October, the Amended Loan Facility, was increased to £50m and its
term extended to October 2030. The Amended Loan Facility has been further
amended to be unsecured and is subordinate in ranking to the Hayfin Facility.
In addition, interest will no longer be paid and instead interest will be
rolled up into capital.
As explained more fully in Note 1, basis of preparation, the Directors have
adopted the Going Concern basis in preparing the audited consolidated
financial statements.
Post balance sheet events
Please refer to Note 21 for details of events after the balance sheet date.
Consolidated income statement
for the year ended 30 June 2024
Year to Year to Year to Year to
30 June 2024 30 June 30 June 2023 30 June
£'000 2024 £'000 2023
Note £'000 £'000
Revenue 3 55,199 59,587
Cost of sales (25,462) (26,342)
Gross profit 29,737 33,245
Sales, marketing and distribution costs (19,591) (23,705)
Administration expenses - other (22,790) (25,179)
Total administrative expenses (42,381) (48,884)
Other income 7 1,526 856
Operating loss pre-R&D and exceptional costs (11,118) (14,783)
Research and development costs (22,900) (20,121)
Exceptional costs 6 (1,239) (4,750)
Operating loss (35,257) (39,654)
Finance income 9 285 329
Finance expense 8 (4,194) (2,441)
Loss before taxes (39,166) (41,766)
Income tax (1,050) (1,305)
Loss for the year (40,216) (43,071)
Loss per share 10
Basic (pence per share) (1.07)p (6.43)p
Diluted (pence per share) (1.07)p (6.43)p
Consolidated statement of comprehensive income
for the year ended 30 June 2024
Year to Year to
30 June 2024 30 June 2023
£'000 £'000
Note
Loss for the year (40,216) (43,071)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of retirement benefit obligations 18 (617) 603
Remeasurement of investments - retirement benefit assets 12 549 (867)
Revaluation gains -land and buildings 11 281 428
Deferred tax movement -land and buildings (30) -
Total other comprehensive income 183 164
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (86) 193
Total comprehensive loss (40,119) (42,714)
Consolidated statement of financial position
as at 30 June 2024
30 June 2024 30 June 2023
£'000 £'000
Note
Assets
Non-current assets
Property, plant and equipment - right-of-use assets 11 7,457 8,465
Property, plant and equipment - other 11 16,288 14,776
Intangible assets - goodwill 3,317 3,346
Intangible assets - other 1,370 1,790
Investments - retirement benefit assets 12 2,913 4,866
Total non-current assets 31,345 33,243
Current assets
Inventories 13 12,744 11,593
Trade and other receivables 14 7,823 7,088
Cash and cash equivalents 12,915 14,845
Total current assets 33,482 33,526
Total assets 64,827 66,769
Liabilities
Current liabilities
Trade and other payables 15 (15,940) (16,683)
Borrowings 16 (600) (648)
Provisions 17 (2,489) -
Lease liabilities (1,516) (1,155)
Derivative financial instruments - (79)
Total current liabilities (20,545) (18,565)
Net current assets 12,937 14,961
Non-current liabilities
Retirement benefit obligations 18 (8,611) (7,917)
Deferred taxation liability (382) (454)
Provisions 17 (2,708) (3,581)
Lease liabilities (6,372) (7,747)
Long-term borrowings 16 (22,500) (26,439)
Total non-current liabilities (40,573) (46,138)
Total liabilities (61,118) (64,703)
Net assets 3,709 2,066
Equity
Capital and reserves
Issued share capital 19 4,776 689
Share premium 154,639 119,030
Merger reserve 40,128 40,128
Reserve - share-based payments 408 2,906
Revaluation reserve 1,782 1,501
Reserve - warrants 1,719 412
Foreign exchange reserve (816) (730)
Retained earnings (198,927) (161,870)
Total equity 3,709 2,066
Consolidated statement of changes in equity
for the year ended 30 June 2024
Issued capital Share premium Merger reserve Reserve - share - Revaluation reserve Reserve - warrants Foreign exchange Retained earnings Total equity
£'000 £'000 £'000 based payment £'000 £'000 reserve £'000 £'000
£'000 £'000
At 30 June 2022 654 112,576 40,128 2,799 1,073 - (923) (118,542) 37,765
Exchange differences on translation of foreign operations - - - - - - 193 - 193
Valuation gains taken to equity (land and buildings) - - - - 428 - - - 428
Remeasurement of net defined benefit liability - - - - - - - 603 603
Remeasurement of investments - retirement benefit assets - - - - - - - (867) (867)
Total other comprehensive (loss)/income - - - - 428 - 193 (264) 357
Loss for the period after tax - - - - - - - (43,071) (43,071)
Total comprehensive loss - - - - 428 - 193 (43,335) (42,714)
Transactions with owners:
Share-based payments - - - 114 - - - - 114
Shares issued 35 6,454 - - - - - - 6,489
Transfer of exercised/lapsed options to retained earnings - - - (7) - - - 7 -
Warrants issued - - - - - 412 - - 412
At 30 June 2023 689 119,030 40,128 2,906 1,501 412 (730) (161,870) 2,066
Exchange differences on translation of foreign operations - - - - - - (86) - (86)
Valuation gains taken to equity (land and buildings) - - - - 281 - - - 281
Deferred tax - land and buildings - - - - - - - (30) (30)
Remeasurement of net defined benefit liability - - - - - - - (617) (617)
Remeasurement of investments - retirement benefit assets - - - - - - - 549 549
Total other comprehensive income - - - - 281 - (86) (98) 97
Loss for the period after tax - - - - - - - (40,216)
(40,216)
Total comprehensive loss - - - - 281 - (86) (40,314) (40,119)
Transactions with owners:
Share-based payments - - - 759 - - - - 759
Shares issued 4,087 36,672 - - - - - - 40,759
Share issue costs - (1,063) - - - - - - (1,063)
Transfer of exercised/lapsed options to retained earnings - - - (3,257) - - - 3,257 -
Warrants issued - - - - - 1,307 - - 1,307
At 30 June 2024 4,776 154,639 40,128 408 1,782 1,719 (816) (198,927) 3,709
Consolidated cash flow statement
for the year ended 30 June 2024
Year to Year to
30 June 2024 30 June 2023
Note £'000 £'000
Cash flows from operating activities
Loss before tax (39,166) (41,766)
Adjustments for:
Finance income 9 (285) (329)
Finance expense 8 4,194 2,441
Non-cash movement on defined benefit pension scheme 121 (79)
Depreciation and amortisation 4,319 4,224
R&D tax credit 7 (1,526) (856)
Charge for share-based payments 759 114
Payments for retirement benefit investments 12 (19) (159)
Movement in fair valuation of derivative financial instruments (79) (37)
Decrease in trade and other receivables 144 3,380
Increase in inventories (1,239) (183)
Increase in trade and other payables 788 4,818
Net cash used by operations (31,989) (28,432)
Income tax paid (149) (449)
Net cash used by operating activities (32,138) (28,881)
Cash flows from investing activities
Interest received 135 82
Payments for property, plant and equipment (3,401) (4,669)
Receipts from disposal of investment assets 2,067 -
Net cash used in investing activities (1,199) (4,587)
Cash flows from financing activities
Proceeds from issue of equity shares 2,417 7,000
Share issue expenses (1,062) (511)
Proceeds of bank borrowings 514 -
Repayment of bank loan borrowings (647) (961)
Interest paid on bank loan borrowings (86) (2,117)
Repayment of principal on lease liabilities (1,734) (1,281)
Interest paid on lease liabilities (295) (334)
Proceeds from shareholder loan 36,575 36,000
Repayment of shareholder loan (2,135) (9,288)
Interest paid on shareholder loan (2,116) (712)
Net cash generated from financing activities 31,431 27,796
Net decrease in cash and cash equivalents (1,906) (5,672)
Effects of exchange rates on cash and cash equivalents (24) 2
Cash and cash equivalents at the start of the period 14,845 20,515
Cash and cash equivalents at the end of the period 12,915 14,845
Cash at bank and in hand 12,915 14,845
Notes to the financial statements
For the year ended 30 June 2024
1. Basis of preparation
The financial information in this announcement has been extracted from the
Group's Annual Report and Accounts for the year ended 30 June 2024 and is
prepared in accordance with UK-adopted International Accounting Standards.
Whist the financial information included in this preliminary announcement has
been prepared in accordance with International Financial Reporting Standards
(IFRS), this announcement itself does not contain sufficient information to
comply with IFRS. The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in Section 435
of the Companies Act 2006.
Statutory accounts for the years ended 30 June 2024 and 30 June 2023 have been
reported on by the independent auditor. The independent auditor's report for
the years ended 30 June 2024 and 30 June 2023 were unqualified. The report for
the year ended 30 June 2023 drew attention to a material uncertainty related
to going concern, the report for the year ended 30 June 2024 did not draw
attention to any matters by way of emphasis. The reports for the years ended
30 June 2024 and 30 June 2023 did not contain a statement under section 498(2)
or (3) Companies Act 2006. Statutory accounts for the year ended 30 June 2023
have been delivered to the Registrar of Companies and those for the year to 30
June 2024 will be delivered following the Company's annual general meeting.
The consolidated financial statements for the year ended 30 June 2024
(including comparatives) have been prepared under the historical cost
convention modified by the revaluation of certain items, as stated in the
accounting policies.
New standards adopted
There are no IFRS or IAS interpretations that are effective for the first time
in this financial period that have had a material impact on the Group.
Standards, amendments and interpretations to existing standards that are not
yet effective and have not been adopted early by the Group
At the date of authorisation of these financial statements, several new, but
not yet effective, standards and amendments to existing standards and
interpretations have been published by the IASB. None of these standards or
amendments to existing standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for
the first period beginning on or after the effective date of the
pronouncement. New standards, amendments and interpretations not adopted in
the current year have not been disclosed as they are not expected to have a
material impact on the Group's financial statements.
Going concern
The going concern period has been assessed as the period from the date of
approval of the financial statements to 30 November 2025. The financial
statements have been prepared on a going concern basis after considering the
Group's and the Company's current cash position and reviewing budgets and cash
flow forecasts for a period of at least 12 months from the date of approval of
these financial statements.
On 15 October 2024 the Group entered into a £40m secured senior loan facility
(the "Hayfin Facility") with Hayfin Healthcare Opportunities LuxCo S.a.r.l., a
fund advised by Hayfin Capital Management LLP. The Hayfin Facility consists of
a committed £20m five year term loan which has been fully drawn and an
additional uncommitted £20m incremental facility.
Furthermore, following discussions with the major shareholders, SkyGem
Acquisition and Southern Fox (together the "Shareholder Lenders"), the
existing loan facility of £40m (the "Shareholder Facility"), details of which
were announced on 27 December 2023, has been increased to £50m and its term
extended to October 2030. To date, £27.5m has been drawn and is outstanding
under the Shareholder Facility, leaving an undrawn but uncommitted balance of
£22.5m. The Shareholder Facility has been amended ("the Amended Shareholder
Facility") to be unsecured and rank behind the Hayfin Facility. In addition,
interest under the Shareholder Facility will no longer be paid and instead
interest will be rolled up into capital.
The Group continues to require funding for the foreseeable future, in
particular to fund the ongoing R&D programme. With the £20m committed
Hayfin funding and £42.5m of uncommitted facilities, from both Hayfin and the
Shareholder Lenders, the Group has access to sufficient funding. The Directors
have confidence in the ability to access at least £20m of the uncommitted
funding during the next twelve months with the shareholders undertaking that
funding would be available from them including under the Amended Shareholder
Facility in the event that it was required. Furthermore, in severe but
plausible downside scenarios the group has the ability to preserve cash
through the deferral of capital expenditure and other spend items.
The Directors have prepared cash flow forecasts for the period to 30 November
2025 based on the binding arrangements in place for funding with Hayfin and
representations provided by the Shareholder Lenders over the Group's ability
to access funding under the Amended Shareholder Facility. These forecasts show
that the Group has access to sufficient funds for the 12 month going concern
review period.
2. Use of accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year
are discussed below.
Judgements
a) Deferred tax assets are only recognised to the extent that it is probable
that taxable profit will be available against which the deductible temporary
difference can be utilised. At 30 June 2024 the Group had £170m (2023:
£130m) of unutilised tax losses available for offset against future profits.
At the UK's current rate of corporation tax the unutilised tax losses equate
to a potential deferred tax asset of £40.8m; all of this potential deferred
tax asset is unrecognised at the balance sheet date as there is not currently
sufficient convincing evidence that taxable profits will be available against
which these losses will be utilised in the foreseeable future. Management
reassesses the probable availability of future taxable profits on a regular
basis.
Estimates and assumptions
a) The Group operates equity-settled share-based compensation plans for
remuneration of its employees comprising LTIP schemes. As explained in Note
30, employee services received in exchange for the grant of any share-based
compensation are measured at their fair values and expensed over the vesting
period. The fair value of this compensation is dependent on whether the
provisional share awards will ultimately vest, which in turn is dependent on
future events which are uncertain. The Directors use their judgement and
experience of previous awards to estimate the probability that the awards will
vest, which impacts the fair valuation of the compensation.
The key variables to be estimated are the number of awards that will lapse
before the vesting date due to leavers, and the number of awards that will
vest in relation to the non-market condition performance tests. The
sensitivity to these variables can be seen in the table in Note 30.
b) The Group operates a partly funded non-contributory defined benefit pension
scheme for certain employees in Germany. The defined assets and liabilities of
this scheme and the related investments - retirement benefit assets are
estimated using actuarial methods by third party experts. The net defined
benefit liability is most sensitive to changes in the discount rate applied,
see Note 28 for sensitivity analysis.
3. Revenue
An analysis of revenue by category is set out in the table below:
2024 2023
£'000 £'000
Sale of goods at a point in time 55,199 59,587
55,199 59,587
All revenue recognised in the income statement is from contracts with
customers. No assets were recognised from costs to obtain or fulfil a contract
with any customer.
4. Alternative performance measures ("APMs")
The Group's APMs are not defined by IFRS and therefore may not be directly
comparable with other companies' APMs. These measures are not intended to be a
substitute for, or superior to, IFRS measurements.
EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA) is
included as an alternative performance measure in order to aid users in
understanding the underlying operating performance of the
Group.
Note 2024 2023
£'000 £'000
Loss before taxation (39,166) (41,766)
Net finance expense 11,12 3,909 2,112
Depreciation 18 3,787 3,670
Amortisation 17 532 554
EBITDA (30,938) (35,430)
EBITDA pre-R&D and exceptionals
Earnings before interest, tax, depreciation, amortisation, research and
development and exceptionals (EBITDA pre-R&D and exceptionals) is included
as an alternative performance measure in order to aid users in understanding
the underlying operating performance of the Group.
These can be reconciled to the IFRS measure of loss before taxation as below:
2024 2023
£'000 £'000
EBITDA (30,938) (35,430)
Research and development 22,900 20,121
Exceptional costs 1,239 4,750
EBITDA pre-R&D and exceptionals (6,799) (10,559)
5. Segmental reporting
The Group's operating segments are reported based on the financial information
provided to the Executive Directors, who are defined as the CODM, to enable
them to allocate resources and make strategic decisions. In the opinion of the
Directors, there is one class of business, being the manufacture and sale of
allergy-related medicines.
The CODM reviews information based on geographical market sectors and assesses
performance at an EBITDA (operating loss before interest, tax, depreciation
and amortisation) and operating loss level. Management have identified that
the reportable segments are Central Europe (which includes the following
operating segments: Germany, Austria, Switzerland and the Netherlands),
Southern Europe (Italy, Spain and Other), the Rest of the World (including the
UK).
For all material regions that have been aggregated, management consider that
they share similar economic characteristics. They are also similar in respect
of the products sold, types of customer, distribution channels and regulatory
environments.
Revenue by segment
Revenue from external customers Inter- segment revenue Total segment revenue Revenue from external customers Inter- segment revenue Total segment revenue
2024 2024 2024 2023 2023 2023
£'000 £'000 £'000 £'000 £'000 £'000
Central Europe
--Germany 27,298 - 27,298 31,755 - 31,755
--Austria 4,947 - 4,947 4,903 - 4,903
--Netherlands 4,062 - 4,062 4,017 - 4,017
--Switzerland 2,864 - 2,864 2,838 - 2,838
39,171 - 39,171 43,513 - 43,513
Southern Europe
--Italy 3,074 - 3,074 3,053 - 3,053
--Spain 8,878 - 8,878 9,379 - 9,379
--Other 368 - 368 396 - 396
12,320 - 12,320 12,828 - 12,828
Rest of World (including UK) 3,708 30,412 34,120 3,246 28,731 31,977
55,199 30,412 85,611 59,587 28,731 88,318
Revenues from external customers in all segments are derived principally from
the sale of a range of pharmaceutical products designed for the immunological
treatment of the allergic condition.
Rest of World (including UK) revenues include sales through distributors and
agents in several markets including the Czech Republic, Slovakia and South
Korea. Inter-segment revenues represent sales of product from the UK to the
operating subsidiaries. The price is set on an arm's-length basis which is
eliminated on consolidation.
The CODM also reviews revenue by segment on a budgeted constant currency
basis, to provide relevant year-on-year comparisons.
The Group has no customers which individually account for 10% or more of the
Group's revenue.
Depreciation and amortisation by segment
2024 2023
£'000 £'000
Central Europe 1,265 1,217
Southern Europe 831 740
Rest of World (including UK) 2,223 2,267
4,319 4,224
EBITDA by segment
2024 2023
£'000 £'000
Allocated EBITDA
Central Europe 2,079 (252)
Southern Europe 1,585 1,362
Rest of World (including UK) (34,602) (36,540)
Allocated EBITDA (30,938) (35,430)
Depreciation and amortisation (4,319) (4,224)
Operating loss (35,257) (39,654)
Finance income 285 329
Finance expense (4,194) (2,441)
Loss before tax (39,166) (41,766)
Total assets by segment
2024 2023
£'000 £'000
Central Europe 31,031 25,522
Southern Europe 13,815 10,555
Rest of World (including UK) 77,788 75,041
122,634 111,118
Inter-segment assets (20,518) (11,558)
Inter-segment investments (37,289) (32,791)
Total assets per balance sheet 64,827 66,769
Included within Central Europe are non-current assets to the value of £2.5m
(2023: £2.6m) relating to goodwill and within Southern Europe assets to the
value of £3.0m (2023: £3.7m) relating to land and buildings and £0.8m
goodwill (2023: £0.8m). There were no material additions (excluding foreign
exchange differences) to non-current assets in any country except the UK where
non-current asset additions totalled £3.0m and comprised plant and machinery
£2.9m, fixtures and fittings £0.05m and computer equipment £0.05m, (2023:
£4.3m total).
Total liabilities by segment
2024 2023
£'000 £'000
Central Europe (23,290) (22,234)
Southern Europe (7,204) (6,553)
Rest of World (including UK) (51,142) (47,474)
(81,636) (76,261)
Inter-segment liabilities 20,518 11,558
Total liabilities per balance sheet (61,118) (64,703)
6. Exceptional items
2024 2023
£'000 £'000
Restructuring costs 1,239 -
Fundraising costs - 2,681
German rebate provision - 2,069
1,239 4,750
Restructuring costs
During the year ended 30 June 2024, the Group incurred £1.2m of one-off
costs, predominantly for the payment of termination benefits, in connection
with implementing a number of cost control initiatives aimed at significantly
reducing the ongoing cost base of the Group.
Fundraising costs
For the year ended 30 June 2023, the Group incurred costs of £2.7m relating
to consultancy in connection with a material gap in funding caused by a
short-term pause in production which occurred during October and November
2022. A number of debt and equity transactions were carried out during the
period; where costs met the definition of transaction costs as set out in
IFRS9 they were included as part of the initial recognition of the relevant
liability or equity instrument. Where costs were one-off and exceptional in
nature but were not directly attributable to the acquisition of a specific
financial liability or equity issuance they were taken to the consolidated
income statements as exceptional expenses.
German rebate provision
In the prior year, the Group's German subsidiary received notification from
the German national health insurance association that manufacturers' rebates
were due for the sale of certain products. Whilst the legal situation was
still being clarified, the Group made a provision for the best possible
estimate of the amounts to be reimbursed. Amounts in respect of the year ended
30 June 2023 were taken to the consolidated income statement as a reduction of
revenue, amounts in respect of earlier periods were taken to the consolidated
income statement as an exceptional expense so as not to distort 2023 revenue.
7. Other income
2024 2023
£'000 £'000
R&D tax credit 1,526 856
8. Finance expense
2024 2023
£'000 £'000
Interest on shareholder loans 3,495 1,824
Net interest expenses on defined benefit pension liability 317 283
Interest on lease liabilities 295 334
Other 87 -
4,194 2,441
9. Finance income
2024 2023
£'000 £'000
Bank interest 135 82
Interest on investment assets 150 247
285 329
10. Loss per share
2024 2023
£'000 £'000
Loss after tax attributable to equity shareholders (40,216) (43,071)
Shares Shares
'000 '000
Issued Ordinary Shares at start of the period 679,105 644,105
Ordinary Shares issued in the period 4,087,335 35,000
Issued Ordinary Shares at end of the period 4,766,440 679,105
Weighted average number of Ordinary Shares for the period 3,743,332 670,355
Potentially dilutive share options - -
Weighted average number of Ordinary Shares for diluted 3,743,332 670,355
earnings per share
Basic earnings per Ordinary Share (pence) (1.07)p (6.43)p
Diluted earnings per Ordinary Share (pence) (1.07)p (6.43)p
The diluted loss per share for 2024 does not differ from the basic loss per
share as the exercise of share options would have the effect of reducing the
loss per share and is therefore not dilutive under the terms of IAS 33.
11. Property, plant and equipment
Right-of-use Plant and Fixtures and Motor Computer Land and Total
assets machinery fittings vehicles equipment buildings £'000
£'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 July 2022 12,233 16,843 8,230 23 4,565 3,079 44,973
Reclassification (see Note 17) - (7) - - (22) - (29)
Additions 2,247 3,602 147 - 308 - 6,304
Foreign exchange - 3 (1) (3) - (2) (3)
Revaluations - - - - - (32) (32)
Disposals (557) (2) (2) - (3) - (564)
At 30 June 2023 13,923 20,439 8,374 20 4,848 3,045 50,649
Reclassification (see Note 17) - - - - 35 - 35
Additions 765 3,160 95 - 61 - 4,081
Foreign exchange (104) (23) (26) - (18) (44) (215)
Revaluations - - - - - 9 9
Disposals (293) - (1) - (1) - (295)
At 30 June 2024 14,291 23,576 8,442 20 4,925 3,010 54,264
Depreciation
At 1 July 2022 4,342 9,261 6,794 21 4,060 305 24,783
Reclassification - - - - - - -
Charge for the year 1,681 1,032 482 - 316 159 3,670
Revaluations - - - - - (460) (460)
Foreign exchange (8) (4) (2) (1) (2) (4) (21)
Disposals (557) (2) (2) - (3) - (564)
At 30 June 2023 5,458 10,287 7,272 20 4,371 - 27,408
Reclassification - - - - - - -
Charge for the year 1,728 1,109 389 - 286 275 3,787
Revaluations - - - - - (272) (272)
Foreign exchange (59) (12) (18) - (17) (3) (109)
Disposals (293) - (1) - (1) - (295)
At 30 June 2024 6,834 11,384 7,642 20 4,639 - 30,519
Net book value
At 1 July 2022 7,891 7,582 1,436 2 505 2,774 20,190
At 30 June 2023 8,465 10,152 1,102 - 477 3,045 23,241
At 30 June 2024 7,457 12,192 800 - 286 3,010 23,745
Included in Plant and machinery is £5.8m (2023: £2.5m) relating to assets
under the course of construction upon which no depreciation has been charged.
These are expected to be commissioned before June 2025.
12. Investments - retirement benefit asset
The Group carries insurance policies which are designed to contribute towards
the obligations in respect of the German defined benefit pension scheme (see
Note 28). Some of these policies include a right to reimbursement and
therefore do not meet the definition of a qualifying insurance policy under
IAS 19.8. Accordingly, the assets have been recognised separately on the
balance sheet. They are valued at fair value by Mercer Deutschland GmbH each
year. Mercer Deutschland GmbH value the insurance policies according to
contractual arrangements.
2024 2023
£'000 £'000
At 1 July 4,866 5,330
Additions 19 159
Finance income 150 247
Disposal of retirement benefit asset (2,598) -
Remeasurement of investment 549 (867)
Loss on foreign exchange (73) (3)
2,913 4,866
The valuation of the retirement benefit asset involves a number of complex
calculations and assumptions and as a result is subject to inherent
uncertainty.
13. Inventories
2024 2023
£'000 £'000
Raw materials and consumables 4,056 3,819
Work in progress 5,672 4,775
Finished goods 3,016 2,999
12,744 11,593
The value of inventories measured at fair value less cost to sell was
£182,000 (2023: £303,000). The movement in the value of inventories measured
at fair value less cost to sell during the year gave rise to a charge of
£121,000 which was included within the costs of goods sold in the
consolidated income statement.
14. Trade and other receivables
2024 2023
£'000 £'000
Trade receivables 3,198 2,733
Less: provision for impairment of trade receivables (336) (367)
Trade receivables - net 2,862 2,366
Other receivables 2,808 2,150
VAT 538 542
Prepayments and accrued revenue 1,615 2,030
7,823 7,088
All amounts due as shown above are short term. The carrying value of trade
receivables is considered a reasonable approximation of fair value. All trade
and other receivables have been reviewed for indicators of impairment. During
the year, £25,000 of trade receivables were provided for and £22,000 of the
provision utilised. The impaired trade receivables are mostly due from private
customers in the Italian market who are experiencing financial difficulties.
15. Trade and other payables
2024 2023
£'000 £'000
Due within one year
Trade payables 4,015 4,090
Social security and other taxes 4,734 4,443
Other creditors 102 99
Accrued expenses and deferred income 7,089 8,051
15,940 16,683
16. Borrowings
2024 2023
£'000 £'000
Due within one year
Bank loans 600 648
600 648
2023
£'000
2024
£'000
Due in more than one year
Shareholder loans 21,755 25,591
Bank loans 745 848
22,500 26,439
The Group completed a £40.75m equity financing on 13 October 2023 the
proceeds of which were used to repay amounts drawn at that time under the
shareholder loan facility entered into on 6 April 2023 ("Loan Facility")
arranged with ZQ Capital Management Limited (acting through its affiliate
SkyGem International Holdings Limited) and Southern Fox Investments.
The Loan Facility agreement was amended twice (the "Amended Loan Facility"),
on 27 September 2023 and subsequently on 27 December 2023.
The Amended Loan Facility provides the Group with a £40.0m loan facility,
secured against the shares held by Allergy Therapeutics Plc in other Group
companies (i.e. all the major assets of the Group), of which £7.5m was
committed from the outset and £32.5m initially uncommitted. The Amended Loan
Facility is available to drawn down from 15 January 2024 until 15 January 2026
with interest payable semi-annually at 12% per annum and a repayment date of
15 January 2027. The Company issues warrants to the Lenders following each
drawdown under the Amended Loan Facility entitling the holders to subscribe
for new ordinary shares at a price of 4 pence per share. The entitlement to
warrants is 25 warrants for each £1 drawn down up to a maximum of
1,000,000,000 warrants. The warrants entitle the holders to subscribe for new
ordinary shares at a price of 4 pence per warrant. The warrants are
exercisable in whole or in part from 1 July 2024 until 15 January 2027. The
Company has agreed that the proceeds of the warrants will be used to repay the
principal amounts outstanding under the Amended Loan Facility.
At 30 June 2024, £22.5m of the secured facility had been drawn, of which
£1.3m was allocated to the warrants on initial recognition (in line with the
Group's accounting policy the debt component was valued first by discounting
the contractual cash flows using a market rate of interest that would be
payable on a similar debt instrument which did not include the warrants, the
remainder of the proceeds is allocated to the warrants and recognised in the
"Warrants reserve" within shareholders' equity).
17. Provisions
2024 2023
£'000 £'000
Italian Leaving indemnity 111 148
German rebate provision 5,086 3,433
5,197 3,581
Current 2,489 -
Non-current 2,708 3,581
5,197 3,581
German Rebate Provision
The movement in the German rebate provision during the year was as follows:
2024 2023
Total Total
£'000 £'000
At 1 July 3,433 -
Additions 1,732 3,433
Foreign exchange movement (79) -
At 30 June 5,086 3,433
Current 2,489 -
Non-current 2,597 3,433
5,086 3,433
In the previous year, the Group's German subsidiary received notification from
the German national health insurance association ("GKV-Spitzenverband") that
manufacturers' rebates were due for the sale of certain products. In agreement
with the GKV-Spitzenverband, adjusted discounts for the future were published
in the Lauertaxe from 1 March 2024. The legal situation for past periods is
still being clarified, but the best possible estimate of the amounts to be
reimbursed has been recognised as a provision.
18. Retirement benefit obligations
Defined contribution scheme
The Group operates a defined contribution pension scheme for all employees in
the UK except those that have opted out of the scheme. The assets of the
scheme are held separately from those of the Group in an independently
administered fund. A salary sacrifice scheme is in operation at Allergy
Therapeutics (UK) Ltd. The effect of the scheme is to transfer a proportion of
the payroll cost to pension contributions; see Note 9, Employees for further
details.
Defined benefit scheme
The Group operates a partly funded non-contributory defined benefit pension
scheme for certain employees in Germany. The actuarial valuation was carried
out by Mercer Deutschland GmbH at 30 June 2024.
The assets and liabilities in the scheme were as follows:
2024 2023
£'000 £'000
Fair value of plan assets 1,002 1,022
Present value of scheme liabilities (9,613) (8,939)
Deficit in the scheme (8,611) (7,917)
The weighted average duration of liabilities at 30 June 2024 is 13.2 years
(2023: 14.0 years).
Movement in assets during the year
2024 2023
£'000 £'000
Balance as at 1 July 1,022 1,215
Foreign currency differences (14) (1)
Interest income on plan assets 47 40
Remeasurement of defined benefit asset 32 (146)
Contributions from employer - -
Assets transferred to finance benefits paid (85) (86)
Balance as at 30 June 1,002 1,022
The expected contributions to linked investment asset products over the
forthcoming year are £nil (2023: £172,000)
Movement in liabilities in the year
2024 2023
£'000 £'000
Balance as at 1 July (8,939) (9,534)
Foreign currency differences 136 3
Current service costs (122) (134)
Interest cost (364) (323)
Remeasurement of defined benefit liability
- arising from changes in financial assumptions and experience losses/(gains) (649) 750
Benefits paid by employer 240 215
Benefits paid from assets 85 84
Balance as at 30 June (9,613) (8,939)
19. Issued share capital
2024 2023
Shares £'000 Shares £'000
Authorised share capital
Ordinary Shares of 0.10 pence each
1 July and 30 June 790,151,667 790 790,151,667 790
Deferred shares of 0.10 pence each
1 July and 30 June 9,848,333 10 9,848,333 10
Issued and fully paid
Ordinary Shares of 0.10 pence
At 1 July 679,104,621 679 644,104,621 644
Issued during the year:
Issue of shares 4,087,335,317 4,087 35,000,000 35
At 30 June 4,766,439,938 4,766 679,104,621 679
Issued and fully paid
Deferred shares of 0.10 pence
At 1 July 9,848,333 10 9,848,333 10
Issued during the year - - - -
At 30 June 9,848,333 10 9,848,333 10
Issued share capital 4,776,288,271 4,776 688,952,954 689
The deferred shares have no voting rights, dividend rights or value attached
to them.
20. Related party transactions and ultimate control
Allergy Therapeutics plc's related parties include its subsidiary companies
its key management and its shareholders.
The Group's ultimate controlling party at 30 June 2024 was SkyGem Acquisition
Limited (ZQ Capital) by virtue of its 65% holding of voting rights in the
share capital of Company. Prior to completion of the £40.75m Equity
Financing, announced on 13 October 2023, there was no single ultimate
controlling party.
21. Events after the balance sheet date
Hayfin Facility
On 15 October the Group entered into a £40m secured senior loan facility (the
"Hayfin Facility") with Hayfin Healthcare Opportunities LuxCo S.a.r.l., a
fund advised by Hayfin Capital Management LLP ("Hayfin"). The Hayfin Facility
consists of a committed £20m five year term loan and an additional
uncommitted £20m incremental facility. As part of these financing
arrangements, the Company has also issued to Hayfin 131,603,616 warrants to
subscribe for new ordinary shares, representing approximately 2.7% of the
issued share capital of the Company, with a nominal exercise price of 0.1
pence per warrant and exercisable for a period of ten years from the date of
issue. The Hayfin £20m loan is subject to an upfront arrangement fee and has
a variable interest rate based on SONIA plus 9.5% per annum with interest
payable based on Company selected interest periods.
Also on 15 October, following discussions with major shareholders, SkyGem
Acquisition Limited (an affiliate of ZQ Capital Management Limited) and
Southern Fox Investments Limited (together the "Shareholder Lenders"), the
existing loan facility of £40m, details of which were announced on 27
December 2023, has been increased to £50m and its term extended to October
2030. To date, £27.5m has been drawn and is outstanding under the Shareholder
Facility (£5m of which was drawn after the balance sheet date), leaving an
undrawn but uncommitted balance of £22.5m. The Shareholder Facility has been
amended ("the Amended Shareholder Facility") to be unsecured and rank behind
the Hayfin Facility. In addition, interest under the Shareholder Facility will
no longer be paid and instead interest will be rolled up into capital.
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
. END FR QKPBKNBDBPDKRecent news on Allergy Therapeutics
See all newsREG - Allergy Therapeutics - Interim Results for six months ended 31 Dec 2024
AnnouncementREG - Allergy Therapeutics - Advancement to final phase of PROTECT trial
AnnouncementREG - Allergy Therapeutics - New Executive Long Term Incentive Awards
AnnouncementRCS - Allergy Therapeutics - Presentations at 2025 AAAAI / WAO Joint Congress
AnnouncementREG - Allergy Therapeutics - Grass MATA MPL Phase III data published in Allergy
Announcement