REG - Aptamer Group PLC - Full year results for the 12mths ended 30 Jun 2023
09/11/2023 07:00
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RNS Number : 8591S Aptamer Group PLC 09 November 2023
9 November 2023
Aptamer Group plc
("Aptamer", the "Company" or the "Group")
Full year results for the twelve months ended 30 June 2023
Aptamer Group plc (AIM: APTA), the developer of novel Optimer(®) binders to
enable innovation in the life sciences industry, today announces its full year
results for the twelve months ended 30 June 2023 (the "Period"). Shareholders
are directed to the Chairman's Statement, Financial Statements and
accompanying notes below.
Highlights
· Revenue of £1.8 million (2022: £4.0 million)
· Adjusted EBITDA loss of £4.7 million (2022: £1.7 million)
· Relocation to new premises
· Post year end:
o Refinanced with £3.5 million in two equity placings (balance at end of
October 2023: £2.6 million)
o New management team
o Strategy reset - focusing on achieving EBITDA and cash break even within
two years
o Cost base reduced
Operational Highlights
· Contracts signed with a top five pharmaceutical company to
develop multiple Optimer(®) binders as immunohistochemistry (IHC) reagents to
support pipeline development and early discovery targets (Jul 2022)
· Partnership to develop Optimer(®) therapeutics to block the
activity of naturally occurring antibodies within the body for use as a
potential therapy to prevent transplant rejection. (Nov 2022)
· Multiple deals signed with Novavax, a vaccine developer for
respiratory diseases, who require Optimer(®) binders to improve the
selectivity of their Quality Control (QC) assays (Nov 2022)
· Multiple deals signed (and expanded) with a multinational
consumer goods company for Optimer(®) binders supporting the development of
novel direct-to-consumer personal care products (Jan 2023)
· Partnership with a developer of custom enzymes based in Asia for
Optimer(®) binders to incorporate into a biosensor for convenient monitoring
of the company's manufacturing processes (Jan 2023)
· Deal signed with Basecure Therapeutics to identify cell-targeting
Optimer(®) binders for potential as targeted delivery vehicles for siRNA (Jan
2023)
· Optimer(®)-Fc tools launched to enable immunohistochemistry
research and diagnostic workflows (Mar 2023)
· Patent filed in a collaborative project with NeuroBio to support
early diagnostics for Alzheimer's disease (Jun 2023)
Post-period end
· A follow-on deal with a US-based vaccine development company to
develop Optimer(®) binders as QC reagents (Jul 2023)
· Refreshed Board with pre-IPO Chairman and co-founder returning to
support and direct the team to revenue generation & technical delivery
(Aug 2023)
· Net of costs, £3.5 million raised to support the Company target
to reach an EBITDA and cash breakeven position within two years (Aug/Sept
2023)
· Signed two deals with a top five pharma partner, valued at up to
£0.2 million for the development of tools for use in immunoassays and IHC in
detecting neuronal targets (Aug 2023)
· Completed the reset of the fixed cost base to £3.5m per annum,
whilst maintaining the ability to win sales and deliver projects (Sept 2023)
· Process improvements have been successfully trialled and
implemented across the platform to support lower sample requirements, increase
capacity and improve project margins (Oct 2023)
· Development of exemplification data, demonstrating Optimer(®)
binders as IHC reagents for research and diagnostics is underway with
promising early results (Oct 2023)
Commenting on the results, Steve Hull, Executive Chairman of Aptamer Group,
said: "I am pleased to return as the Executive Chairman of Aptamer Group. The
Company has a leading technology platform that is in high demand across the
life sciences industry, in supporting researchers and developers overcome many
of the limitations of antibodies and allow them to advance novel technology
solutions to drive healthcare forward. While the past year has been difficult
for Aptamer, with contributory challenging macroeconomic conditions, the
Company, invigorated by the new Board, is now showing good momentum and
success in expanding current partnerships and winning new contracts.
The new Board has reset the Group's cost-base and revenue expectations. In
addition, it has completed an extensive process improvement programme to
support improved selections, which will reduce sample requirements and improve
margins. We expect to continue to build on the Company's expertise to offer
excellent services using the Optimer(®) platform, with a key focus of
achieving a cash breakeven position over the next two years."
Webinar
Dr Arron Tolley, Dr David Bunka and Andrew Rapson will provide a live
presentation relating to the Final Results via Investor Meet Company on 9th
Nov 2023 at 3:00pm GMT.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to
meet APTAMER GROUP PLC via:
https://www.investormeetcompany.com/aptamer-group-plc/register-investor
(https://www.investormeetcompany.com/aptamer-group-plc/register-investor)
Investors who already follow Aptamer Group Plc on the Investor Meet Company
platform will automatically be invited
- End -
For further information, please contact:
Aptamer Group plc
Steve Hull
+44 (0) 1904 56 7790
SPARK Advisory Partners Limited - Nominated Adviser
Andrew
Emmott
+44 (0) 20 3368 3550
Turner Pope - Broker
James Pope/ Andrew
Thacker
+44 (0) 20 3657 0050
About Aptamer Group plc
Aptamer (http://www.aptamergroup.com/) Group develops custom affinity binders
through its proprietary Optimer(®) platform to enable new approaches in
therapeutics, diagnostics, and research applications. The Company strives to
deliver transformational solutions that meet the needs of life science
researchers and developers through the use of its proprietary Optimer(®)
platform.
Optimer(®) binders are oligonucleotide affinity ligands that can function as
an antibody alternative. The global affinity ligand market is currently worth
over $170 billion. Optimer(®) binders are engineered to address many of the
issues found with alternative affinity molecules, such as antibodies, and
offer new, innovative solutions to bioprocessing, diagnostic and
pharmaceutical scientists.
Aptamer has successfully delivered projects for global pharma companies,
diagnostic development companies and research institutes covering a range of
targets and applications with the objective of establishing royalty-bearing
licenses. Through the unique Optimer(®) technology and processes, scientists
and collaborators can make faster, more informed decisions that support
discovery and development across the Life Sciences.
Charmain's Statement
For the year under review, the Group's operational progress was not matched by
revenues. An encouraging and active pipeline of new business has taken
longer to convert into revenues, especially licensing and royalty-based
contracts, against a background of significant macro and sector headwinds. A
change in Aptamer Group's leadership which concluded in August 2023 has
re-evaluated the Company's commercial and operational strategies and set the
Company on a footing for success.
The new Board is composed of experienced individuals, all of whom are
investors in the Company and focused on increasing shareholder value while
delivering customer-centric improvements to the technology and business. With
these improvements, we aim to support increased commercial traction by
improving the product offering, broadening the applicable marketplace for our
technology and driving future opportunities of higher value and impact.
With the new leadership and focus embedded, the Board has confidence that
Aptamer Group's leadership position in the aptamer market is retained. The new
Board is focused on revenue generation and technical delivery, with an updated
realistic revenue plan in place along with tight cost discipline. The
Optimer(®) platform we have built will begin to yield positive momentum and
revenue growth with our key objective to move the company to an EBITDA and
cash breakeven position within the next two years and focus on acquiring
royalty-bearing licences.
The Company continues to see demand for its Optimer(®) technology from across
the life sciences. Due to the continued demand for Optimer(®) binders and the
Group's expertise in the affinity ligand industry, we believe we are
well-placed to use the platform to build lower-risk fee-for-service revenues
and drive positive momentum and revenue growth and to target opportunities to
licence its technology to the developers of diagnostic tests and therapeutics.
Strategy
Our mission at Aptamer Group is to remove the scientific barriers to our
partners' success by delivering high quality science underpinned by
innovation, integrity, and precision. As a well-established leader within the
aptamer market, we are focused on using our Optimer(®) platform to discover
and develop new affinity binders to support our global customer base, from
research and bioprocessing to diagnostics and therapeutics. Over the past
year, we have advanced our service offering to enable a turnkey service for
novel affinity binders, which includes binder discovery, development and
improved assay and validation services. This has been supported by the move to
new premises in November 2022, which provided increased capacity.
Going forward, the Company's focus is on tight cost discipline with the
intention of reaching an EBITDA and cash breakeven position within two years.
Consequently, budgeted costs for premises, overheads and development,
directors, and staff have been reduced from approximately £6.4 million
(unaudited) in the year ended 30 June 2023 to approximately £3.5 million for
the current financial year. This cost base reset was completed by 30 September
2023, including a reduction in operational headcount to the level required to
meet forecasted revenues over the next several years. The reduction in
operational headcount was achieved without any redundancies by allowing
natural attrition in staff numbers, with the top performers retained and
incentivised.
Research and development activities over the financial year 2023 have resulted
in a broader service offering, enabling us to offer validatory assays and
assay development activities post-Optimer(®) development. We have also
developed a new technology and service called Optimer(®)-Fc for the
development of reagents for automated IHC workflows to address the need for
improved reagents in this market vertical.
Current internal research activities are focused on process improvements to
reduce delivery timelines and increase margins. Of the £3.5 million raised
since the year end, £0.3 million has been reserved to support research and
development activities and process improvements to the technology and to
generate more supporting data. The Board believes that outcomes of these
research and development activities will enable further proof of the platform
supporting the signing of high value, high impact, deals. Future higher-risk
development work will, in whole or part, be funded via grants and
collaborations to minimise the impact on working capital requirements. A
collaboration with Bioliquid Innovative Genetics and Anima Design is a great
example of such work, funded through the European Eurostars programme to
support Optimer(®) development for an application in a novel prenatal and
foetal diagnostic platform.
During FY2023, the Group achieved revenues of £1.8 million from
fee-for-service contracts. There is a continued increase in demand for the
development of alternative ligands across the life science industry, which the
Group is well-positioned to capitalise on.
To achieve EBITDA and cash breakeven position during the year ending 30 June
2025, the Company is targeting revenue of £3.0 million for the current
financial year, rising to £6.0 million for the year ending 30 June 2026.
These figures are significantly lower than previous targets and reflect a
change of emphasis in setting expectations. These revised targets are mainly
based on expectations of fee-for-service revenues for contract research, with
minimal expectations for licensing revenues.
Aptamer's model will remain to use its contract research relationships as a
platform to build lower-risk fee-for-service revenues and horizon scan for
material licence fee opportunities. Under the revised strategy, the Group
will focus on developing the core fee-for-service revenues to achieve
profitability. Post-period, the Company has announced the signing of six
contracts with a combined value of up to £0.7 million for the current
financial year (subject to ongoing commercial and scientific attrition).
Aptamer will continue to target opportunities to out-licence its technology.
If successful, these opportunities have the potential to generate material
recurring revenue streams. Since IPO, Aptamer has found that whilst there is
significant appetite for its technology, reaching and securing licensing
agreements is taking much longer than anticipated and can be impacted by
factors outside the Group's control. Hence, the Group is refocusing its
efforts to ensure that it is sustainable on a lower level of fee-for-service
work whilst retaining the potential upside from these longer-term
opportunities.
Group Performance
Over the past financial year, Aptamer Group has signed contracts across all
divisions for research reagents and bioprocessing ligands in Aptamer
Solutions, diagnostic tools in Aptamer Diagnostics and therapeutic development
in Aptamer Therapeutics. This has delivered revenue of £1.8m from our
fee-for-service business. While revenue was lower than expected for FY23, the
new Board has reset target expectations and updated the timeframes around
downstream licensing revenues.
We continue to see an increasing demand for Optimer(®) binders as a novel
alternative to antibodies, supporting researchers and developers with both
novel applications that are intractable with antibody technology and with
standard applications where antibody performance has proven insufficient.
Aptamer Solutions
Aptamer Solutions provides services for the custom development of
oligonucleotide-based Optimer(®) binders for use as research tools, quality
control reagents and affinity ligands to support bioprocessing applications.
The Aptamer Solutions business has shown good momentum in deal flow and
variety during 2023, reflecting the need across the life science industry for
alternatives to antibodies to support new and improved applications and the
detection and monitoring of new biomarkers.
At the beginning of the period, we signed multiple contracts with a top-five
pharma partner for the development of Optimer(®) binders as IHC reagents to
support improved sensitivity and selectivity in biomarker identification.
Post-period end, this partnership was expanded with two further contracts
signed for Optimer(®) IHC reagents to new targets and for Optimer(®) binders
to support immunoassays for targets associated with neurodegeneration.
A contract was signed with vaccine manufacturer Novavax in November 2022 to
develop Optimer(®) binders to enable multiplex analysis in Quality Control
(QC) assays. Following initial positive results, further agreements were
signed during the period to develop Optimer(®) binders to additional targets
for use in their assays.
At the start of the second half of the fiscal year (H2), a follow-on deal was
signed with a multinational consumer goods company following positive results
in an earlier project. The second deal will focus on the development of
Optimer(®) binders for a direct-to-consumer personal care product,
demonstrating a novel application in the fast-moving consumer goods sector.
A further partnership agreed at the beginning of H2 is for the development of
Optimer(®) binders for 'process monitoring', another QC application, for an
enzyme manufacturer based in Asia. Once developed, the binders will be
incorporated into a biosensor to allow the partner company to conveniently
monitor reactants and products in the company's manufacturing process.
Finally, a contract was signed with a large US-based gene therapy company for
Optimer(®) binders to a key target in neurodegenerative disease. Here,
developed Optimer(®) binders will enable reliable measurements of a disease
biomarker in the company's research immunoassays. These binders will be used
with an antibody in a sandwich pair format, demonstrating that Optimer(®)
reagents can be used as replacements and in conjunction with antibodies.
As the identification of novel disease biomarkers continues and novel
therapeutics are progressing through the clinic, our partners are increasingly
investigating Optimer(®) technology to meet their need for affinity ligands
that can support these new targets, many of which have proven intractable with
alternative technologies. Delivering benefits of ethical compliance, the
ability to tune development for success with a wider target range, and both
cost-efficiencies and security in supply, Optimer(®) binders are offering
much-needed innovation to enable new research and bioprocessing solutions.
Aptamer Diagnostics
Aptamer Diagnostics focuses on the development and integration of Optimer(®)
binders into diagnostic platforms. Optimer(®) binders offer significant
advantages, including development against previously intractable targets,
improved binding characteristics and greater batch-to-batch consistency in
manufacture. This leads to potential improvements in multiple diagnostic
formats, such as Enzyme-Linked Immunosorbent Assay (ELISA), flow cytometry,
biosensors and cell and tissue imaging.
Within the period, the Company signed an agreement with Neuro-Bio to develop
Optimer(®) binders against a novel biomarker for Alzheimer's disease. The
Optimer(®) binders will be used to enable the development of a novel lateral
flow test for the early diagnosis of Alzheimer's disease. This agreement has
progressed successfully with a panel of binders being patented by Neuro-Bio.
Further integration of the binders into a routine lateral flow test will
support the clinical and commercial development of rapid diagnostics for
Alzheimer's disease through simple nasal sampling.
Aptamer was awarded a portion of a €1.125m Eurostars grant. The consortium
also includes Bioliquid Innovative Genetics and Anima Design of Spain. As part
of this consortium, Aptamer will develop Optimer(®) binders to novel
biomarkers to support improved non-invasive prenatal testing and the diagnosis
of placental disease.
As the global need for diagnostics continues to grow, Optimer(®) binders are
being explored by our partners across the diagnostic industry for a range of
applications. Their excellent target recognition, consistent and ethical
supply, temperature stability and batch consistency enable simple global
logistics and position our Optimer(®)-based tests as an antibody alternative,
or antibody partner, for use in diagnostics.
Aptamer Therapeutics
Aptamer Therapeutics delivers contract research services in the field of
therapeutic development for example, developing Optimer(®)-drug conjugates,
Optimer(®)-enabled gene therapies and Optimer(®) agonists and antagonists
for potential therapeutic application.
During the period, Aptamer entered the second phase of development with CRUK
to develop a bifunctional Optimer(®) therapeutic for the treatment of chronic
myelomonocytic leukaemia (CMML) and other myeloid malignancies. In the first
phase, an Optimer(®) has been developed that is effective in lab-based
experiments in overcoming a causative gene mutation in CMML. The second phase
of development is focused on developing an Optimer(®) as a delivery vehicle
to target treatment to the required cell type, with the intention to develop
the two Optimer(®) binders as a single bifunctional therapeutic.
A new partnership was developed with an organ transplantation tolerance
biotechnology company to develop Optimer(®) binders to block the activity of
naturally occurring antibodies within the body. The developed Optimer(®)
binders will be used as a potential therapy to prevent transplant rejection.
Following the signing of the contract in November, the initial development
phase has been completed and candidate Optimer(®) binders shipped to the
partner company for internal validation and assessment.
During H2, a new contract was agreed with Basecure Therapeutics; a
pre-clinical stage biotech company dedicated to the discovery and development
of innovative siRNA-based medicines. Aptamer and BaseCure Therapeutics will
work together to develop cell-targeting Optimer(®) binders that could be used
as potential delivery vehicles to improve siRNA uptake into target cells and
tissues. If this Optimer(®)-directed targeted delivery is successful, this
would offer new therapeutic opportunities of siRNA-mediated gene knockdown
using the Optimer(®) platform to develop targeting molecules.
Aptamer's partnership with PinotBio remains active, and we continue to
progress with the development of candidate Optimer(®) binders for development
as precision Optimer(®) drug conjugates for a number of solid tumour targets.
Targeted delivery of therapeutic payloads remains a significant challenge.
Optimer(®) binders have a significant advantage as small,
oligonucleotide-based molecules offer a novel solution for our partners to
deliver diverse payloads, such as chemotherapeutics, gene therapies and
radiotherapies. Optimer(®) advantages can include increased tissue
penetration, low immunogenicity and the potential for convenient manufacture
with site-directed conjugations.
Operational Update
As awareness of Aptamer Group's technology continues to increase there is an
increasing demand for Optimer(®) binders as synthetic antibody alternatives.
The Company relocated to new purpose-built laboratory facilities to meet this
demand in November 2022. These new facilities have allowed the expansion of
the Optimer(®) platform and will support the anticipated sales pipeline and
the integration of further service lines for turnkey solutions for several
years to come.
Over 2021 and 2022, the Group built up its operational scale capabilities to
cope with anticipated demand and larger contracts. In practice, targeted
opportunities have not converted into revenue in 2023. Under the new
management team, the decision was taken to reduce the business's cost base to
match more closely with commercial activity. Post-period end, the new Board
has worked to right-size the business and this has resulted in a significant
reduction in leadership team costs and a 33% reduction in headcount since
December 2022 (through natural attrition of team members). This exercise in
cost discipline was completed by 30 September 2023 and provides a reduction in
total costs for premises, overheads and development, directors, and staff from
£6.4 million to £3.5 million for FY24 to support the Group's move to a
positive cash flow position over the next two years. The leadership team is
continuing to pursue tight cost discipline and seeking to further reduce costs
through a reduction in the Company's operational footprint.
Research & Development
Over the period, Aptamer's research and development activities have allowed
the development of increased assay and validation services, which are being
offered to customers as additional services. The improved translation of the
final Optimer(®) binders into functional products in the customer's hands is
a vital validation of the platform for internal research projects and customer
projects.
Post-period, the Company's cost restructuring has reduced the focus on
internal research and development activities. The new Board has reviewed the
existing research and development progress and identified areas of important
development, so in September 2023, an additional placing through existing
shareholders raised a further £0.3 million that has been ringfenced to
support research and development and allow further validation of the
Optimer(®) platform in key focus areas. Process improvement R&D work to
improve margins and capacity has been completed. The leadership remains
committed to moving Aptamer towards a positive cash flow position and, as
such, that the cost of higher-risk development work is offset in part or whole
by grant funding.
Board and Senior Management Changes
During the period, Jenny Cutler served as Interim Chief Financial Officer and
was replaced by Dr Rob Quinn. Dr Quinn became Interim Chief Executive Officer
upon Dr Arron Tolley leaving the Company in April 2023.
Following the fundraise in August 2023, the Board has restructured to include
Stephen Hull returning to the Company as Executive Chairman, after leading the
Group to flotation in 2021 with Dr Arron Tolley . Dr Tolley returns as Chief
Technical Officer, with Dr David Bunka moving to Chief Scientific Officer to
concentrate on research and development activities for the Group. Dean
Fielding and Dr Adam Hargreaves have joined the Company as new Independent
Non-Executive Directors. Dean Fielding is an experienced senior company
director with extensive prior involvement as a board member of listed
companies. Dr Adam Hargreaves is a board-certified pathologist who brings a
broad range of expertise in both diagnostics and early-stage pharmaceutical
efficacy and safety development to support Aptamer's technical strategy. The
Company intends to appoint a Chief Executive Officer when appropriate to do
so.
Andrew Rapson, the previous Head of Finance, has been promoted to Chief
Financial Officer and Company Secretary, and Alastair Fleming remains as Chief
Operating Officer.
The previous Board members, Dr Ian Gilham (Executive Chairman), Dr Rob Quinn
(Interim Chief Executive Officer and Chief Financial Officer), Dr John
Richards (Non-Executive Director) and Angela Hildreth (Non-Executive
Director), resigned on 21 August 2023. We thank them for their service over
the past 20 months.
Macro environment
The Board and senior management team actively monitor risk factors that could
potentially affect the business, including the broader macroeconomic
environment and global supply chain, to ensure that the business is well
placed to act and mitigate such risks where possible.
In FY23, Aptamer Group saw a reduction in available investment and tighter
budgeting across the life science industry impact sales numbers. This affected
clients, from top pharma companies to small biotech companies, resulting in
reduced outsourcing of R&D. Consequently, the Group's pipeline conversion
was affected, with many of our partner's projects stalled, and licensing
revenue was slower to achieve than anticipated. Consequently, the Board has
reset Company targets and focused on fee-for-service revenue, removing
anticipation of product licensing from the revenue forecast until clearer
timelines are available.
Summary and outlook
Having completed a successful £3.2 million placing in August, with a further
£0.3 million raised in September to support research and development,
management believes that the Group has sufficient cash resources to fund
progress beyond 12 months from the signing date of the accounts. This will
allow us to implement our near-term strategy of maintaining tight cost
discipline with the intention of reaching an EBITDA and cash breakeven
position within two years.
With the new leadership in place at Aptamer, the Company's focus is on
delivering commercial and scientific improvements to maintain its position as
a leader in the field while using the planned technical and customer-centric
advances to drive increased value and impact for future partnerships.
The Company has maintained good progress in deal flow over the past year,
expanding current partnerships and winning new contracts across all business
divisions. Our strategic focus is on growing the fee-for-service line, where
we continue to see demand for Optimer(®) binders to address the limitations
of antibodies across research, bioprocessing, diagnostic and therapeutic
sectors. We have already signed a number of contracts with significant
partners during the first quarter of FY23, demonstrating the focus of the new
Board and the need for such antibody alternatives across the industry.
Strong growth in the aptamer market is predicted for the next nine years(1)
and Aptamer Group is a recognised leader in the field with a high-throughput
platform able to support this growth. We are well placed to support the broad
demand from the life science industry. We believe our development services for
antibody alternatives offer a much needed solution to the life science
industry and look forward to continuing to support our current customer base
while expanding on our current pipeline.
We would like to thank all our employees for their hard work, dedication and
commitment during the past year despite our challenges in an uncertain
economic climate and significant changes to the Company's strategy and
leadership. We would also like to thank our shareholders for their support. We
are confident that with our contract services customer base and growing
pipeline, we are well-positioned to grow the Group's business and deliver
shareholder value going forward.
1. Future Market Insights. Aptamers Market: Global Industry
Analysis and Opportunities Assessment | Forecast 2022 to 2032. Report ID:
Rep-GB-1759. (2023).
Financial Review
Despite a challenging 12-month period for Aptamer, with the loss of
significant contracts and a tightening in the macroeconomic environment, the
move to new purpose-built facilities has left us well placed to gain financial
performance through improved operational efficiencies. The slowdown in revenue
this year, combined with the increased spend required to complete the site
relocation, left cash reserves at £0.2 million at the year-end. Post-period,
fundraises totalling net proceeds of £3.5 million have been completed and a
new Board established, focusing on tight cost discipline, revenue generation
and technical delivery.
Revenue
The Group reported revenues for the year ended 30 June 2023 of £1.8 million
(year ended 30 June 2022: £4.0 million). FY22 included two large proteomics
contracts which did not progress in FY23.
Gross profit
Gross profit decreased from 69% in 2022 to 20% in 2023 reflecting the impact
of lower revenue and a stock impairment charge of £0.2m.
Research and development costs
During the year, the Group expensed through the income statement £1.0m (2022:
£1.4 million), relating to the continued development of the Optimer(®)+
platform technology and the design and optimisation of novel aptamer library
architectures. The fundraise completed in September 2023 has enabled the
continuation of this work in the first half of the 2024 financial year.
Administrative Expenses
Administrative costs were £5.0 million for the year compared to £4.4 million
for the year to 30 June 2022. This increase in costs comes from employee costs
of £3.3 million (2022: £2.9 million) and an increase in operating costs
following the relocation to larger premises, which was completed in November
2022. The headcount has decreased slightly from 49 at 30 June 2022 to 46 at 30
June 2023.
Adjusted EBITDA
The Group uses adjusted EBITDA as a profit performance metric as this excludes
items which can distort comparability of underlying trading as well as being
the measure of profit which most accurately reflects the cash generating
activities of the Group. The reconciliation of adjusted EBITDA to Operating
Loss is as follows:
Year ended Year ended
30 June 2022 30 June 2022
£'000 £'000
Adjusted EBITDA (4,672) (1,664)
Share based payment expense (84) (457)
Impairment of tangible and intangible assets (2,601) -
Statutory EBITDA (7,357) (2,121)
Amortisation (44) (22)
Depreciation (756) (433)
Operating Loss (8,157) (2,576)
The Group incurred impairment losses of £2.6 million following a review of
the carrying value of the cash-generating unit in light of the conditions
prevailing as at 30 June 2023. The impairment loss has been recognised
across intangibles, property, plant and equipment and right-of-use assets.
Share-based payment charges
The non-cash charge for the year decreased to £0.1 million (2022: £0.5m).
The prior year included a one-off charge of £0.3 million in respect of a
warrant that the Company issued to SPARK to subscribe for up to 689,417
Ordinary Shares on 15 December 2021.
Tax
The Group claims each year for research and development tax credits. Since it
is loss-making, the Group elects to surrender these tax losses for a cash
rebate. The amount is included within the taxation line of the income
statement and amounts to £0.5 million (2022: £0.5 million). The Group has
not recognised any tax assets in respect of trading losses arising in the
current financial year or accumulated losses in previous financial years.
Loss for the year
The loss for the year was £7.8 million (2022: £2.1 million loss). The basic
loss per ordinary share increased to 11.35 pence (2022: 3.24 pence per share)
based on an average number of shares in issue during the period of 69,055,369
(2022: 64,546,622).
Cash flow
The Group had £0.2 million of cash at 30 June 2023 (2022: £6.7 million).
The cash outflow for the year was £6.5 million (2022: £6.3 million inflow).
This primarily reflects the cash outflow from operating activities of £4.6
million (2022: £3.0 million outflow), cash receipts relating to research and
development tax credits of £0.5 million which represented the tax refund for
the prior period (2022: £0.6 million), payment of leases of £0.4 million
(2022: £0.5 million) and an investment in capital expenditure and intangible
assets of £2.0 million (2022: £0.4 million). The £2.0 million capital
expenditure was in relation to the fit out of the new laboratory and office
space.
Financial position
Net assets at 30 June 2023 were £0.3 million (2022: £8.1 million) of which
cash amounted to £0.2 million (2022: £6.7 million) reflecting the
operating cash outflows and the spend fitting out the new laboratory and
office space. Although there were significant additions to non-current
assets in the period, the overall carrying value of these assets has reduced
by £1.4 million which reflects impairment charges recognised in respect of
these assets (Note 5).
Following the year end, the Company has successfully raised £3.5 million in
net proceeds through equity fundraises. This was completed in conjunction
with an appraisal of the ongoing cost base, which has been reduced
considerably along with the appointment of a new Board of Directors.
Consolidated statement of comprehensive income
For the year ended 30 June 2023
Notes
2023 2022
£'000 £'000
Revenue 4 1,752 4,036
Cost of sales 6 (1,393) (1,351)
Gross profit 359 2,685
Administrative expenses (5,034) (4,352)
Other operating income 7 3 3
Adjusted EBITDA 9 (4,672) (1,664)
Amortisation and impairment of intangible assets 16 (324) (22)
Depreciation and impairment (including loss on disposal of assets) 17, 18 (3,077) (433)
Share-based payment expense 34 (84) (457)
6 (8,157) (2,576)
Operating loss
Finance costs 12 (141) (62)
Loss before taxation (8,298) (2,638)
Taxation 13 462 545
Loss and total comprehensive loss (7,836) (2,093)
Basic loss per share 14 11.35p 3.24p
Diluted loss per share 14 11.35p 3.24p
There were no items of other comprehensive income in the current or prior
period. Accordingly, no statement of other comprehensive income has been
prepared.
Loss and total comprehensive loss for the year is all attributable to the
owners of the Parent Company.
All activities relate to continuing operations.
Consolidated statement of financial position
At as 30 June 2023
Notes 2023
£'000 2022
£'000
Non-current assets
Intangible assets 16 70 341
Property, plant and equipment 17 561 483
Right-of-use assets 18 160 1,340
Other receivables 22 373 379
1,164 2,543
Current assets
Inventories 21 204 420
Trade and other receivables 22 678 1,321
Tax receivable 473 545
Cash and cash equivalents 29 234 6,691
1,589 8,977
Total assets 2,753 11,520
Current liabilities
Trade and other payables 23 (1,329) (2,126)
Borrowings 25 (50) (39)
Leases 26 (264) (209)
(1,643) (2,374)
Net current (liabilities)/assets (54) 6,603
Non-current liabilities
Trade and other payables 24 (7) -
Borrowings 25 (19) -
Leases 26 (745) (1,060)
Provisions for liabilities 27 (35) (35)
(806) (1,095)
Net assets 304 8,051
Equity
Issued share capital 32 69 69
Share premium 33 9,578 9,573
Group reorganisation reserve 33 185 185
Share-based payment reserve 34 544 538
Accumulated losses (10,072) (2,314)
Equity attributable to shareholders 304 8,051
Consolidated statement of changes in equity
For the year ended 30 June 2023
Notes Issued Share premium Group reorganisation reserve Share-based payment reserve Total equity
share £'000 £'000 £'000 Retained earnings £'000
capital £'000
£'000
Balance at 1 July 2021 30 5,203 185 83 (5,396) 105
Loss and total comprehensive expense for the year - - - - (2,093) (2,093)
Transactions with the owners of the Parent Company:
Issue of share capital net of transaction costs 9 9,573 - - - 9,582
Share capital bonus issue 30 - - - (30) -
Capital reduction - (5,203) - - 5,203 -
Credit to equity for equity-settled share-based payments 34 - - - 455 2 457
Balance at 30 June 2022 69 9,573 185 538 (2,314) 8,051
Loss and total comprehensive expense for the year - - - - (7,836) (7,836)
Transactions with the owners of the Parent Company:
Issue of share capital net of transaction costs 32 - 5 - - - 5
Credit to equity for equity-settled share-based payments 34 - - - 84 - 84
Exercised & forfeited equity-settled share-based payments 34 - - - (78) 78 -
Balance at 30 June 2023 69 9,578 185 544 (10,072) 304
Consolidated statement of cash flows
For the year ended 30 June 2023
Notes 2023 2022
£'000 £'000
Cash flows from operating activities
Cash used in operations 35 (4,598) (2,973)
Income taxes received 534 598
Net cash used in operating activities (4,064) (2,375)
Investing activities
Purchase of intangible assets 16 (53) (141)
Purchase of tangible assets 17 (1,975) (277)
Net cash used in investing activities (2,028) (418)
Financing activities
Issue of share capital, net of issue costs 32 5 9,582
Repayment of borrowings (37) (10)
Payment of lease liabilities 26 (192) (395)
Interest paid (141) (62)
Net cash generated from financing activities (365) 9,115
Net increase in cash and cash equivalents (6,457) 6,322
Cash and cash equivalents at beginning of year 6,691 369
Cash and cash equivalents at end of year 234 6,691
Notes to the financial statements
For the year ended 30 June 2023
1 Accounting policies
Company information
Aptamer Group PLC ("the Company") is a company limited by shares, domiciled,
and incorporated in the United Kingdom and registered in England and Wales.
The registered office is Windmill House, Innovation Way, York, YO10 5BR.
The Group consists of Aptamer Group PLC and all of its subsidiaries. The Group
is a leading provider of Optimer(®) reagents for use by customers in
research, diagnostics and therapeutics. Aptamer Group has developed a platform
technology which is utilised by its three trading subsidiary companies to
solve problems for pharmaceutical and biotechnology customers in the
bioprocessing, research reagents, diagnostic and therapeutic areas of the life
sciences.
1.1 Basis of preparation
The financial information included in this annual results announcement for the
year ended 30 June 2023 does not constitute the Group's statutory accounts.
Statutory accounts for the period ended 30 June 2022 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 30 June
2023 were approved by the Board on 8 November 2023 and will be delivered to
the Registrar of Companies in due course. The Auditor's report on those
accounts for the year ended 30 June 2023 was unqualified, made reference to
material uncertainty with regard to the going concern basis, and did not
contain a statement under 498(2) or 498(3).
Thegroup financial statements have been prepared in accordance with UK adopted
International Financial Reporting Standards ("IFRS") and International
financial Reporting Committee ("IFRC") Interpretations that are applicable to
the consolidated financial statements for the year ending 30 June 2023, in
conformity with the requirements of the Companies Act 2006.
These financial statements are prepared in sterling which is the functional
currency of the Group and the Company. Monetary amounts in these financial
statements are rounded to the nearest £000.
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of certain financial
instruments at fair value.
The principal accounting policies adopted are set out below. The accounting
policies have been consistently applied to all the periods presented, unless
otherwise stated.
1.2 Basis of consolidation
The consolidated financial statements incorporate those of Aptamer Group PLC
and all of its subsidiaries (i.e. entities that the Group controls through its
power to govern the financial and operating policies so as to obtain economic
benefits). The subsidiaries consolidated in these Group accounts were acquired
via Group reorganisation and as such merger accounting principles have been
applied. The financial statements of the Company and its subsidiaries are made
up to 30 June 2023.
All intra-group transactions, balances and unrealised gains on transactions
between Group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
1.3 Going concern
The Group has reported a loss after tax for the year ended 30 June 2023 of
£7.8 million (year ended 30 June 2022: £2.1 million). The Group had a cash
balance of £0.2 million at 30 June 2023 (30 June 2022: £6.7 million).
The Directors have considered the applicability of the going concern basis in
the preparation of these financial statements, which includes assessing an
internal forecast extending out to June 2025. The Directors consider that
this forecast represents a reasonable best estimate of the performance of the
Group over the period to June 2025.
In August 2023 the Company completed a fundraise which raised gross proceeds
of £3.6 million before expenses and followed this up with a further fundraise
in September 2023 raising gross proceeds of £0.3 million before expenses.
The cash balance at the end of September 2023 was £2.7 million.
A new Board was appointed following the successful completion of the fundraise
in August 2023. Former Chairman Steve Hull has returned to the business as
executive Chairman and co-founder Arron Tolley has returned at Chief Technical
Officer. In the short time since the new Board has been in situ work has
been undertaken to refresh the Aptamer library and a number of process
improvements are already well progressed. This has already started to yield
results in more robust outputs and significantly improved data and sequencing.
The pipeline remains healthy, with over 120 leads being processed. More
importantly we have been able to revisit some of the large pharma customers
and offer an improved process as we continue to develop our Aptamer offering.
Following the fundraises, the fixed cost base has been cut back to less than
£0.3 million per month. This reduction in costs has come primarily from a
reduction in headcount and a significant reduction in Board and management
remuneration. At the same time, a share option scheme has been launched to
all staff, designed to incentivise and aid recovery and future growth.
In the forecast, full year revenue is anticipated to be higher than was the
case in the year to June 2023. Within this forecast, delivery of these
expectations would ensure that the resultant positive cashflows together with
the current cash balance are sufficient to see the Group through to
profitability and positive cash generation after taking account of the reduced
cost base. It should be noted that the forecast also includes a significant
decrease in capital expenditure compared to the year to 30 June 2023 with the
move to the Group's new facility now complete.
The Directors have also considered reasonable likely downside scenarios, which
includes slower growth in core revenues.
Should these downside scenarios materialise, the Group may need to seek
additional funding. The Directors have a reasonable expectation that the
Group could access further funding, from both dilutive and non-dilutive
sources. However, there can be no guarantee that the Group would be able to
raise additional funding from an equity fundraise to new and existing
investors, nor that the Group will successfully develop assets for licensing
within the next 12 months.
Based on the above factors the Directors believe that it remains appropriate
to prepare the financial statements on a going concern basis. However, the
above factors give rise to a material uncertainty which may cast significant
doubt over the Group's ability to continue as a going concern and to continue
realising its assets and discharging its liabilities in the normal course of
business. The financial statements do not include any adjustments that would
result from the basis of preparation being inappropriate.
1.4 Revenue from contracts with customers
Research activities
The Group's main source of revenue is fees for research activities carried out
under contracts with customers. These contracts can be in progress over
accounting period ends and consist of separate phases with fixed attributable
income attached to each phase. The contract contains performance obligations
set out for each phase. In most cases that customer has a right to proceed or
cease the research work at the end of each phase.
The Group recognises revenue when it satisfies the performance obligations in
respect of each phase of work. As a result, revenue is recognised over time as
each performance obligation is satisfied, by reference to the work performed
in delivering the performance obligations to the customer. Where consideration
is received in advance of the performance obligations being fulfilled, a
contract liability is recognised; where performance obligations are fulfilled
in advance of an invoice being delivered to the customer, a contract asset is
recognised.
No revenue is recognised in relation to subsequent contract phases until the
customer has elected to progress to that phase and the above criteria in
relation to satisfaction of performance obligations has been met.
Revenue is measured at the amount of consideration to which the Group expects
to receive. If the consideration is receivable more than 12 months after the
transaction date and the effect of discounting is material, the revenue amount
recognised is discounted to its present value at the transaction date, using a
discount rate which reflects customer risk, and the unwinding of this discount
is recognised as financial income over the period until the date the
consideration is due. Typically, the Group does not enter into transactions
whereby revenue is variable or contains non-cash consideration, or is subject
to reversals of income.
Costs incurred in fulfilling a contract phase, which include internal labour
costs and materials, are recognised in the balance sheet until the
satisfaction of performance obligations where:
· the costs relate directly to a contract that the Group can
specifically identify;
· the costs generate or enhance resources of the entity that will
be used in satisfying (or in continuing to satisfy) performance obligations in
the future; and
· the costs are expected to be recovered.
Following performance obligations being satisfied, the constraint of costs
incurred is removed and the revenue is recognised by reference to the
contractual value of that performance obligation.
1.5 Research and development expenditure
An intangible asset arising from development (or from the development phase of
an internal project) is recognised where the following criteria are met:
· it is technically feasible to complete the intangible asset so
that it will be available for use or sale;
· management intends to complete the intangible asset and use or
sell it;
· there is ability to use or sell the intangible asset;
· it can be demonstrated that the intangible asset will generate
probable future economic benefits;
· there is evidence of existence of a market for the output of the
intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset;
· adequate technical, financial and other resources exist to
complete the development and to use or sell the intangible asset; and
· the expenditure attributable to the intangible asset during its
development can be reliably measured.
Research expenditure and development expenditure that do not meet the criteria
above are written off against profits in the year in which they are incurred.
Identifiable development expenditure is capitalised to the extent that the
technical, commercial and financial feasibility can be demonstrated.
Similarly, any research costs relating to revenue-generating contracts are not
capitalised on the grounds that the Group does not retain rights to any
intellectual property generated as part of this work.
1.6 Intangible assets
Intangible assets acquired separately from a business are recognised at cost
and are subsequently measured at cost less accumulated amortisation and
accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately
from goodwill at the acquisition date where it is probable that the expected
future economic benefits that are attributable to the asset will flow to the
entity and the fair value of the asset can be measured reliably.
The depreciable amount of an intangible asset with a finite life is allocated
on a systematic basis over its useful life. Amortisation begins when the
asset is available for use.
The amortisation period and the amortisation method for intangible assets with
a finite useful life is reviewed each financial year end. If the expected
useful life of the asset is different from previous estimates, the
amortisation period is changed accordingly.
Amortisation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
· Product development and registrations Up to 15 years on a
straight-line basis
1.7 Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Cost may also include transfers from equity of any
gains or losses on qualifying cash flow hedges of foreign currency purchases
of property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate the cost
or revalued amounts of the assets, net of their residual values, over their
estimated useful lives or, in the case of leasehold improvements and certain
leased plant and equipment, the shorter lease term as follows:
· Fixtures, fittings and equipment
6 years on a straight-line basis
· Leasehold
improvements
Over the remaining life of the lease*
· Other property, plant and equipment
6 years on a straight-line basis
* Amounts are charged on a straight line basis from the date of costs being
incurred to the expiry of the lease to which the improvement attracts. This is
typically less than 5 years.
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with
carrying amount. These are included in profit or loss. When revalued assets
are sold, it is Group policy to transfer any amounts included in other
reserves in respect of those assets to retained earnings.
1.8 Right-of-use assets
A right-of-use asset is recognised at commencement of the lease and initially
measured at the amount of the lease liability, plus any incremental costs of
obtaining the lease and any lease payments made at or before the leased asset
is available for use by the Group.
The right-of-use asset is subsequently measured at cost less accumulated
depreciation and any accumulated impairment losses. The depreciation methods
applied are as follows:
· Right-of use assets Shorter of the asset's
useful life and the lease term on a
straight-line basis
A number of assets have historically been recognised under lease but where
there is a final balloon payment which transfers unconditional ownership into
the Group's name. For these assets they have been depreciated over a longer
period in accordance with the depreciation policy for the asset class (as
shown in 1.7), and on the end date of the lease have been transferred to that
asset class.
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT equipment and small items of
office furniture.
The right-of-use asset is subject to impairment testing, and adjusted for any
remeasurement of the lease liability and lease modifications.
1.9 Impairment of tangible and intangible assets
At each reporting end date, the Group reviews the carrying amounts of its
tangible and intangible assets on an individual and on a cash-generating unit
basis to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell, and value
in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time-value of money and the risks specific
to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in the Statement of Comprehensive Income, unless the
relevant asset is carried at a revalued amount in which case the impairment
loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the
impairment loss have ceased to apply. Where an impairment loss subsequently
reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (or
cash-generating unit) in prior years. A reversal of an impairment loss is
recognised immediately in the income statement, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
1.10 Fixed asset investments
Equity investments are measured at fair value through profit or loss, except
for those equity investments that are not publicly traded and whose
fair value cannot otherwise be measured reliably, which are
recognised at cost less impairment until a reliable measure of fair value
becomes available.
In the parent Company financial statements, investments in subsidiaries are
initially measured at cost and subsequently measured at cost less any
accumulated impairment losses. The investments are assessed for impairment at
each reporting date and any impairment losses or reversals of impairment
losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the Company. Control is the power to
govern the financial and operating policies of the entity so as to obtain
benefits from its activities.
1.11 Inventories
Raw materials, work in progress and finished goods are stated at the lower of
cost and estimated selling price less costs to complete and sell. Cost
comprises direct materials, direct labour and an appropriate proportion of
variable and fixed overhead expenditure, the latter being allocated on the
basis of normal operating capacity. Cost includes the reclassification from
equity of any gains or losses on qualifying cash flow hedges relating to
purchases of raw materials but excludes borrowing costs. Costs are assigned to
individual items of inventory on the basis of weighted average costs. Costs of
purchased inventory are determined after deducting rebates and discounts.
At each reporting date, an assessment is made for impairment. Any excess of
the carrying amount of inventories over its estimated selling price less costs
to complete and sell is recognised as an impairment loss in the income
statement. Reversals of impairment losses are also recognised in the income
statement.
The Group applies a number of key judgements to its impairment calculations,
including:
· Where inventories are used for research projects, these are fully
provided for;
· Inventories which have been owned for at least 18 months is fully
provided for;
· Any opened and partially used packages of inventories with a
residual value of less than £1,000 are fully provided for;
· Any other items which are close to or beyond the expiry date are
reviewed by laboratory management staff and considered whether these can be
used, then (where applicable) provided for.
1.12 Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand,
deposits held at call with financial institutions and other short-term, highly
liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Bank overdrafts are shown within
borrowings in current liabilities.
1.13 Financial instruments
Financial instruments are recognised in the Group's statement of financial
position when the Group becomes party to the contractual provisions of the
instrument.
Financial assets and liabilities are offset, and the net amounts presented in
the financial statements, when there is a legally enforceable right to set off
the recognised amounts and there is an intention to settle on a net basis or
to realise the asset and settle the liability simultaneously.
Financial assets
Financial assets are recognised in the Group's statement of financial position
when the Group becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories, depending on the
nature and purpose of the financial assets.
The Group classifies its financial assets in the following measurement
categories:
· those to be measured subsequently at fair value (either through
Other comprehensive income (OCI) or through profit or loss); and
· those to be measured at amortised cost.
Financial instruments are classified as financial assets measured at amortised
cost where the objective is to hold these assets in order to collect
contractual cash flows, and the contractual cash flows are solely payments of
principal and interest. They arise principally from the provision of goods and
services to customers (e.g. trade receivables). They are initially recognised
at fair value plus transaction costs directly attributable to their
acquisition r issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment where necessary
Financial assets with embedded derivatives are considered in their entirety
when determining whether their cash flows are solely payment of principal or
interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group's business
model for managing the asset and the cash flow characteristics of the asset.
There are three measurement categories into which the Group classifies its
debt instruments:
· Amortised cost: Assets that are held for collection of
contractual cash flows, where those cash flows represent solely payments of
principal and interest, are measured at amortised cost. Interest income from
these financial assets is included in finance income using the effective
interest rate method. Any gain or loss arising on derecognition is recognised
directly in profit or loss and presented in other gains/(losses) together with
foreign exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
· Fair value through other comprehensive income (FVOCI): Assets
that are held for collection of contractual cash flows and for selling the
financial assets, where the assets' cash flows represent solely payments of
principal and interest, are measured at FVOCI. Movements in the carrying
amount are taken through OCI, except for the recognition of impairment gains
or losses, interest income and foreign exchange gains and losses, which are
recognised in profit or loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other gains/(losses). Interest
income from these financial assets is included in finance income using the
effective interest rate method. Foreign exchange gains and losses are
presented in other gains/(losses), and impairment expenses are presented as a
separate line item in the statement of profit or loss.
· Fair value through profit or loss (FVPL): Assets that do not meet
the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss
on a debt investment that is subsequently measured at FVPL is recognised in
profit or loss and presented net within other gains/(losses) in the period in
which it arises.
Impairment of financial assets
An impairment loss is recognised for the expected credit losses on financial
assets where there is an increased probability that the counterparty will be
unable to settle an instrument's contractual cashflows on contractual due
dates, a reduction in the amounts expected to be recovered, or both.
The probability of default and expected amounts recoverable are assessed using
reasonable, and supportable past and forward-looking information that is
available without undue cost or effort. The expected credit loss on trade
receivables is a probability weighted amount determined from grouping the
receivables based on days overdue and making assumptions based on historic
information to allocate an overall expected credit loss rate for each group.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire or are settled, or when the Group transfers the
financial asset and substantially all the risks and rewards of ownership to
another entity, or if some significant risks and rewards of ownership are
retained but control of the asset has transferred to another party that is
able to sell the asset in its entirety to an unrelated third party.
Financial liabilities
Financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instruments.
Financial liabilities, including borrowings, trade payables and other
payables, are initially measured at fair value net of transaction costs
directly attributable to the issuance of the financial liability. They are
subsequently measured at amortised cost using the effective interest method.
For the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption, as well as
any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group's
obligations are discharged, cancelled, or they expire.
1.14 Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs. Dividends payable on equity instruments are
recognised as liabilities once they are no longer at the discretion of the
Group.
1.15 Taxation
The income tax expense or credit represents the sum of the tax currently
payable or receivable on the current period's taxable income or loss, based on
the applicable income tax rate for each jurisdiction, adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences and
to unused tax losses.
Current tax
The tax currently payable or receivable is based on taxable profit or loss for
the period. Taxable profit differs from net profit as reported in the profit
and loss account because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible.
The Group's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date. Management
periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It
establishes provisions, where appropriate, on the basis of amounts expected to
be paid to the tax authorities.
Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Deferred tax
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a transaction
other than a business combination that, at the time of the transaction,
affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantively
enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and tax bases of investments in
foreign operations where the Company is able to control the timing of the
reversal of the temporary differences and it is probable that the differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and where the
deferred tax balances relate to the same taxation authority.
1.16 Provisions
Provisions for legal claims, service warranties and make good obligations are
recognised when the Group has a legal or constructive present obligation as a
result of a past event, it is probable that the Group will be required to
settle that obligation and a reliable estimate can be made of the amount of
the obligation. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class
of obligations as a whole. A provision is recognised even if the likelihood of
an outflow with respect to any one item included in the same class of
obligations may be small.
The amount recognised as a provision is the management's best estimate of the
consideration required to settle the present obligation at the reporting end
date, taking into account the risks and uncertainties surrounding the
obligation. The discount rate used to determine the present value is a pre-tax
rate that reflects current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
1.17 Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual
leave and accumulating sick leave that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the
related service are recognised in respect of employees' services up to the end
of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
Termination benefits are recognised immediately as an expense when the Group
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
Retirement benefits
The Group operates a defined contribution pension plan. Payments to the
defined contribution pension plan are charged as an expense as they fall due.
Share-based payments
Share-based compensation benefits are provided to employees via the Aptamer
Group EMI Share Option Scheme and unapproved share options. Information
relating to these schemes is set out in note 34.
Employee options
The fair value of options granted under the Aptamer Group EMI Share Option
Scheme and unapproved share options is recognised as an employee benefits
expense, with a corresponding increase in equity. The total amount to be
expensed is determined by reference to the fair value of the options granted:
· including any market performance conditions (e.g., the entity's
share price);
· excluding the impact of any service and non-market performance
vesting conditions (e.g., profitability, sales growth targets and remaining an
employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (e.g., the
requirement for employees to save or hold shares for a specific period of
time).
The total expense is recognised over the vesting period, which is the period
over which all of the specified vesting conditions are to be satisfied. At the
end of each period, the entity revises its estimates of the number of options
that are expected to vest based on the non-market vesting and service
conditions. It recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to equity.
1.18 Leases
On commencement of a contract which gives the Group the right to use an asset
for a period of time in exchange for consideration, the Group recognises a
right-of-use asset and a lease liability unless the lease qualifies as a
'short-term' lease (term is 12 months or less with no option to purchase the
lease asset) or a 'low-value' lease (where the underlying asset is £4,000 or
less when new).
Initial measurement of the lease liability
The lease liability is initially measured at the present value of the lease
payments during the lease term, discounted using the interest rate implicit in
the lease, or the incremental borrowing rate if the interest rate implicit in
the lease cannot be readily determined.
To determine the incremental borrowing rate, the Group:
· where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes in
financing conditions since third-party financing was received;
· uses a build-up approach that starts with a risk-free interest
rate adjusted for credit risk for leases held by the Group, which does not
have recent third-party financing; and
· makes adjustments specific to the lease, e.g. term, country,
currency and security.
The lease is the non-cancellable period of the lease plus extension periods
that the Group is reasonably certain to exercise and termination periods that
the Group is reasonably certain not to exercise.
Lease payments include fixed payments, less any lease incentives receivable,
variable lease payments dependent on an index or a rate, amounts expected to
be payable by the Group under residual value guarantees and payments of
penalties for terminating the lease, if the lease term reflects the Group
exercising that option. Variable lease payments are initially measured using
the index or rate when the leased asset is available for use. The cost of the
right-of-use asset also includes any provisions expected to be settled on
termination of the lease.
Subsequent measurement of the lease liability
The lease liability is subsequently increased for a constant periodic rate of
interest on the remaining balance of the lease liability and reduced for lease
payments.
Interest on the lease liability is recognised in the income statement.
Variable lease payments not included in the measurement of the lease liability
as they are not dependent on an index or rate are recognised in the income
statement in the period in which the event or condition that triggers those
payments occurs.
When the lease liability is remeasured due to changes arising from the
original terms and conditions of the lease, the corresponding adjustment is
reflected in the right-of-use asset, or income statement if the right-of-use
asset is already reduced to nil.
A lease modification that was not part of the original terms and conditions of
the lease is accounted for as a separate lease or an adjustment to the lease
liability depending on the nature of the change.
1.19 Government grants
Government grants are recognised at the fair value of the asset received or
receivable when there is reasonable assurance that the grant conditions will
be met, and the grants will be received.
A grant that specifies performance conditions is recognised in income when the
performance conditions are met. Where a grant does not specify performance
conditions it is recognised in income when the proceeds are received or
receivable. A grant received before the recognition criteria is satisfied is
recognised as a liability.
Research and development expenditure credits
Where the Group receives research and development expenditure credits ("RDEC")
it accounts for these as government grant income within operating income as it
more closely aligns with grant income as opposed to a taxation credit. The
income is recognised on a systematic basis over the periods in which the
entity recognises expenses for the related costs for which the grants are
intended to compensate, under IAS 20 'Accounting for Government Grants and
Disclosures'.
As well as receiving RDEC, the Group also receives R&D tax credits on the
development expenditure it makes on the commercial projects it undertakes.
These taxation credits are considered to reflect enhanced tax relief and as
such are shown as a reduction in income tax or an increase in receivables due
from HM Revenue & Customs
1.20 Foreign exchange
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency"). The consolidated financial
statements are presented in Great British Pounds sterling, which is functional
and presentation currency of each of the Group's entities.
Transactions and balances
Transactions in currencies other than functional currency are recorded at the
rates of exchange prevailing at the dates of the transactions. At each
reporting end date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
end date. Gains and losses arising on translation in the period are recognised
in the income statement.
Foreign exchange gains and losses that relate to borrowings are presented in
the statement of profit or loss, within finance costs. All other foreign
exchange gains and losses are presented in the statement of profit or loss on
a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example,
translation differences on non-monetary assets and liabilities such as
equities held at fair value through profit or loss are recognised in profit or
loss as part of the fair value gain or loss, and translation differences on
non-monetary assets such as equities classified as at fair value through other
comprehensive income are recognised in other comprehensive income.
1.21 Finance costs
Finance costs are expensed in the period in which they are incurred. Interest
paid is included under financing activities in the statement of cash flows.
1.22 Earnings per share
Basic Earnings per share is calculated by dividing the profit or loss for the
year attributable to the ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted Earnings per share is calculated by dividing the profit or loss for
the year attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares that would be issued on conversion of all
the dilutive potential ordinary shares into ordinary shares. Details of the
calculations presented under this are given in note 14.
2 Adoption of new and revised standards and changes in
accounting policies
In the current year, the following new and revised standards and
interpretations have been adopted by the Group but have had no impact on its
reported results and financial position:
· Annual improvements to IFRS 2018-2020
· Amendments to IAS 37 'Onerous Contracts' - Cost of fulfilling a
contract
· Amendments to IAS 16 'Property, Plant and Equipment' - Proceeds
before intended use
· Amendments to IFRS 3 for reference to the conceptual framework
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, there were a
number of standards and interpretations in issue but not yet effective (and in
some cases not yet adopted by the UK). The adoption of all of these standards
is not expected to have any impact on the Group's financial statements.
3 Judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates, judgements, and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised, if the revision affects only that period, or
in the period of the revision and future periods if the revision affects both
current and future periods.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The estimates and judgements that have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within
the next financial year are addressed below.
(i) Recognition of revenue from multiple element contracts, and revenue
recognition
Management uses judgement in determining the fair value of multiple element
contracts in order to appropriately recognise the revenue attributable to each
element, which may be based on contractual terms or (for bundled contracts)
the standalone selling price that would be attributed to each service.
For revenues recognised over time, the value of revenue recognised in the
period is dependent on an assessment of work to completion.
(ii) Impairment of trade and other receivables
The Group makes an estimate of the recoverable value of trade and other
receivables. When assessing impairment of trade and other receivables,
management considers factors including the credit rating of the receivable,
the ageing profile of receivables and historical experience. As at 30 June
2023 the provision for trade receivables impairment amounted to £nil (2022:
£nil).
(iii) Impairment of investments and recoverability of intercompany loans
(Company only)
Interests in subsidiary undertakings are reviewed annually to assess whether
there is objective evidence to indicate that either the carrying value of
interests are impaired or impairments recognised in prior periods require to
be reversed. Recoverable value of the subsidiary undertaking is estimated as
the higher of value-in-use or fair value less cost of disposal. Fair value is
based on net assets and incorporates adjustments to reflect the fair market
value. See note 19 for the carrying amount of the investments.
Management further utilises judgement when assessing the recoverability of
intercompany loans using the expected credit loss method in accordance with
the requirements of IFRS 9 'Financial Instruments'. Based on these forecasts,
all receivables have been fully provided for at 30 June 2023.
(iv) Impairment of non-monetary assets
Product development and registration costs are recognised at historical cost
and are amortised on a straight-line basis over their useful life, which is
typically up to 15 years. In the case of registration costs where the asset
is not in use, amortisation commences from the date of grant.
The Group assesses these assets, and all other non-monetary assets including
property, plant and equipment and right-of-use assets, for impairment on an
annual basis by comparing the carrying value of the single cash-generating
unit ("CGU") with the recoverable amount, the recoverable amount being based
on an assessment of the CGU's value-in-use. The Group uses discounted
cashflows from the CGU to determine the value-in-use. The Group sensitises
these results and determines if there is an impairment of the non-monetary
assets. Further details are provided in notes 5, 16, 17 and 18.
4 Revenue
Group revenue analysed by class of business
The Group represents a single operating segment being research and
experimental development of biotechnology.
Group revenue analysed by geographical market
Revenue recognised in the income statement is analysed by geographical market
as follows:
2023 2022
£'000 £'000
United Kingdom 427 597
Europe 134 325
Rest of the World 1,191 3,114
1,752 4,036
All assets are located in, and services delivered from, the United Kingdom.
An analysis of revenue by customer is set out in the table below:
2023 2022
£'000 £'000
Customer A - 814
Customer B - 765
Customer C - 67
Customer D 400 -
Customer E 236 -
Customer F 216 -
All other customers 900 2,390
1,752 4,036
During the year the Group recognised revenue from performance obligations
satisfied during the year. All of the Group's contracts are for the delivery
of service within the next 12 months for which the practical expedient in
paragraph 121(a) of IFRS 15 applies. The entire revenue of the Group relates
to its contracts with customers.
5 Impairments
During the year the following impairments have been recognised
in the Income Statement:
2023 2022
Note £'000 £'000
Inventories 21 181 -
Total impairment expense charged to cost of sales 181 -
2023 2022
Note £'000 £'000
Property, plant and equipment (specific) 17 259 59
Intangible assets 16 80 -
Impairment of cash-generating unit 2,262 -
Total impairment expense charged to administrative costs 2,601 59
Details of the impairment of property, plant and equipment on a
specific basis is provided in note 17.
As a result of the ongoing trading conditions of the Group as at the year end,
combined with the well-publicised risks to viability ahead of the fundraising
described in note 39, the Directors have reviewed the carrying value of the
cash-generating unit ("CGU") in light of the conditions prevailing as at 30
June 2023. As a result, there has been an impairment recognised across all
non-monetary assets of the Group's single CGU, allocated first to specific
intangible assets which are not ongoing, and subsequently pro-rated across the
carrying value of all relevant assets.
6 Operating loss
Operating loss is stated after charging/(crediting):
2023 2022
£'000 £'000
Employee remuneration (note 10) 3,264 2,943
Share-based payment expenses 84 457
Amortisation of intangible assets (note 16) 44 22
Impairment of intangible assets (notes 5 & 16) 280 -
Depreciation of property, plant and equipment (note 17) 401 97
Impairment of property, plant and equipment (notes 5 & 17) 1,609 -
Depreciation of right-of-use assets (note 18) 355 276
Impairment of right-of-use assets (notes 5 & 18) 712 -
Loss on disposal of tangible fixed assets - 1
Research and development expenses (excluding R&D staff costs) 474 848
Raw materials and consumables used 1,212 490
Impairment of inventories charged as cost of sales (note 5) 181 -
7 Other operating income
2023 2022
£'000 £'000
Government grants 3 3
The Group received
funding from a government grant scheme and has complied with the conditions of
the funding throughout the year/period.
8 Auditors' remuneration
Fees payable to the Group's auditors and associates:
2023 2022
£'000 £'000
For audit services
Audit of the financial statements of the Group and Company 72 52
For non-audit services
Review of interim financial statements - 4
Reporting Accountant in relation to AIM admission document - 129
72 185
9 Alternative Performance Measures
The Directors have used an Alternative Performance Measure ("APM") in the
preparation of these financial statements. The consolidated income statement
has presented adjusted earnings before interest, tax, depreciation, and
amortisation ("Adjusted EBITDA"), which removes non-cash items including
depreciation, amortisation, and share-based payments which are not relevant to
the underlying cash generation of the business.
The Directors have presented this APM because they feel it most suitably
represents the underlying performance and cash generation of the business and
allows comparability between the current and comparative period in light of
the changes in the business, and will allow an ongoing trend analysis of this
performance based on current plans for the business.
10 Employees
The average monthly number of persons (including Directors) employed by the
Group and Company during the year was:
2023 2022
Number Number
Administration and support 13 9
Production 29 22
Research and development 4 5
Sales 8 8
54 44
Their aggregate remuneration comprised:
2023 2022
£'000 £'000
Wages and salaries 2,878 2,651
Social security costs 347 264
Other pension costs 39 28
Short-term staff compensation 3,264 2,943
Share-based payment charge 84 457
Staff costs charged to income statement 3,348 3,400
11 Directors' remuneration
Information about emoluments paid to Directors, including the highest paid
Director, have been included in the Remuneration Committee report shown in the
Annual Report.
12 Finance costs
2023 2022
£'000 £'000
Interest on financial liabilities measured at amortised cost
Bank interest and charges 2 2
Other interest on financial liabilities 7 23
9 25
Other finance costs
Interest payable on lease liabilities 125 23
Foreign exchange loss 7 14
Total finance costs 141 62
Refer to notes 25 and 26 for more details on the Group's outstanding
borrowings and leases.
13 Taxation
2023 2022
£'000 £'000
Current tax
UK corporation credit on loss for the current year/period (473) (546)
Adjustments in respect of prior periods 11 1
Deferred tax
Origination and reversal of timing differences - -
Total tax credit (462) (545)
The actual credit for the year/period can be reconciled to the expected credit
for the year/period based on the profit or loss and the standard rate of tax
as follows:
2023 2022
£'000 £'000
Loss before taxation (8,298) (2,638)
Expected tax credit based on the standard rate of corporation tax in the UK of (1,701) (501)
20.5% (2022: 19%)
Expenses that are not deductible in determining taxable profit 59 42
Research and development tax relief (388) (239)
Surrender of tax losses for R&D tax credit refund 243 -
Deferred tax asset not recognised 1,347 152
Adjustments in respect of prior periods 11 1
Other adjustments (33) -
Taxation credit in the financial statements (462) (545)
The UK corporation tax rate was 19% until 31 March 2023 and 25% thereafter. In
the disclosure above a hybrid rate of 20.5% has been used to pro-rate this
change.
Deferred tax balances at the reporting date are measured at 25% (2022: 19%).
As at 30 June 2023 the Group had unrelieved tax losses of approximately
£9,033,000 (2022: £3,805,000). A deferred tax asset has not been recognised
in respect of these losses. Further details are given in note 28.
14 Earnings per share
2023 2022
Basic loss per share 11.35p 3.24p
Diluted loss per share 11.35p 3.24p
Loss for the year/period £7,836,000 £2,093,000
Weighted average number of ordinary shares used as the denominator in 69,055,369 64,546,622
calculating the basic/diluted loss per share
The loss attributable to equity holders (holders of ordinary shares) of the
Company for the purpose of calculating the fully diluted loss per share is
identical to that used for calculating the loss per share. The exercise of
share options would have the effect of reducing the loss per share and is
therefore anti-dilutive under the terms of IAS 33 "Earnings per Share".
15 Dividends
No dividends were paid during the current or prior year, and no final
dividends are proposed to be declared subsequent to the year end.
16 Intangible assets
Product development & registrations
£'000s
Cost
At 1 July 2021 249
Additions - internally generated 141
At 30 June 2022 390
Additions - internally generated 53
443
At 30 June 2023
Accumulated amortisation
At 1 July 2021 27
Charge for the period 22
At 30 June 2022 49
Charge for the year 44
Impairment 280
373
At 30 June 2023
Carrying amount
At 30 June 2023 70
At 30 June 2022 341
.
Development costs capitalised are in relation to the generation of
intellectual property and the patenting of such intellectual property, some of
which are pending and thus not currently being amortised. As at the year end,
£31,000 (2022 - £173,000) of patents are pending and not yet being
amortised.
The Directors prepare forecasts which show the projected growth of the
business and use of these assets, which forms a key part of the Group's future
strategy. The forecasts include an assessment of the likely commercialisation
of the technology based on current demand and anticipated market growth
strategies, profiled on a discounted cash flow basis.
As a result of this cashflow forecast, and ongoing trading conditions
prevalent at the year end, the Directors have recognised an impairment at 30
June 2023 as explained in note 5. This has been allocated across all
non-monetary assets of the CGU, including property, plant and equipment, and
right-of-use assets. The forecasts were for a specific period of 3 years, with
6% and 5% revenue growth in years 4 and 5, subsequently growing at 3% per
annum.
The key unobservable inputs to the model were:
· A pre-tax discount rate of 34.50% (equating to a post-tax
discount rate of 25.80%).
· A long term growth rate of 3.0%
The main forecasts assumed the going concern status of the Group through
anticipated trading following a new fundraising round (as explained in note
39), and its planned use of funds. This fundraise was completed after the
Group's year end in August 2023, which then secured the Group's status as a
going concern. As the fundraise successfully completed after the year end,
management prepared two scenarios addressing successful and unsuccessful
completion of the fundraise. A weighting of 75:25 in favour of successful
completion of the fundraise was applied in calculating the value in use of the
CGU.
The Directors have considered sensitivities to revenue and discount rate in
the cashflow forecast and the weighting applied between successful and
unsuccessful fundraise post period end. If forecasted revenue in the
cashflow forecast was reduced by more than 8%, this would result in a further
impairment charge of £791,000, which would reduce the value in use of the CGU
to nil. If weighting in favour of successful completion of the post period
end fundraise was reduced to 50:50, this would result in an additional
impairment of £650,000. If the post-tax discount rate was increased by 10%
to 35.8% then this would result in an additional impairment of £645,000.
The Directors are confident that the value of the CGU as at the date of
approval of the financial statements is significantly in excess of the
carrying value as at 30 June 2023, as a result of the removal of the
uncertainty relating to the fundraising event. However, this value has not
been quantified, and cannot be utilised for the purpose of impairment testing
as at 30 June 2023 under the requirements of IAS 36.
17 Property, plant and equipment
Other property, plant and equipment Fixtures, Total
Leasehold improvement fittings and equipment
£'000
£'000 £'000 £'000
Cost
At 1 July 2021 - 572 30 602
Additions - 346 10 356
Disposals - (10) - (10)
At 30 June 2022 - 908 40 948
Additions 1,603 363 9 1,975
Disposals - (31) (5) (36)
Transfers - 217 - 217
At 30 June 2023 1,603 1,457 44 3,104
Accumulated depreciation
At 1 July 2021 - 301 17 318
Charge for the period - 93 4 97
Disposals - (9) - (9)
Impairment - 59 - 59
At 30 June 2022 - 444 21 465
Charge for the year 270 126 5 401
Disposals - (31) (5) (36)
Impairment 988 604 17 1,609
Transfers - 104 - 104
At 30 June 2023 1,258 1,247 38 2,543
Carrying amount
At 30 June 2023 345 210 6 561
At 30 June 2022 - 464 19 483
Transfers in the year represent a reclassification from right-of-use assets
where the underlying lease has completed, with the assets being purchased and
having remaining useful life.
The impairment reflects one floor of the Group's head office, where ongoing
trading conditions mean that the space is not being fully utilised.
18 Right-of-use assets
Buildings Total
Plant
and
machinery
£'000 £'000 £'000
Cost
At 1 July 2021 169 223 392
Additions 1,225 204 1,429
Disposals (169) - (169)
At 30 June 2022 1,225 427 1,652
Transfers - (217) (217)
At 30 June 2023 1,225 210 1,435
Accumulated depreciation
At 1 July 2021 122 35 157
Charge for the period 230 46 276
Disposals (168) - (168)
Lease modification 47 - 47
At 30 June 2022 231 81 312
Charge for the year 217 138 355
Transfers - (104) (104)
Impairments 641 71 712
At 30 June 2023 1,089 186 1,275
Carrying amount
At 30 June 2023 136 24 160
At 30 June 2022 994 346 1,340
Transfers in the year represent a reclassification to property, plant and
equipment where the underlying lease has completed, with the assets being
purchased and having remaining useful life.
19 Investments
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Investment in subsidiaries - - 203 418
Movements in investments
Parent Company
Investments other than loans
£'000
Cost
At 1 July 2022 and 30 June 2023 418
Provision for impairment
At 1 July 2022 -
Impairment charge in the year 215
At 30 June 2023 215
Carrying amount
At 30 June 2023 203
At 30 June 2022 418
Details of the subsidiaries can be found in note 20. The Directors believe
that the carrying value of investments is supported by their underlying
assets.
20 Subsidiaries
Details of the Company's subsidiaries at 30 June 2023 are as follows:
Name of undertaking Registered office Nature of business Class of % Held
shares held
Direct
Aptamer Solutions Limited Windmill House, Innovation Way, York, YO10 5BR Research and development Ordinary 100
Aptamer Therapeutics Limited Windmill House, Innovation Way, York, YO10 5BR Research and development Ordinary 100
Aptamer Diagnostics Limited Windmill House, Innovation Way, York, YO10 5BR Research and development Ordinary 100
Aptasort Limited (dormant) Windmill House, Innovation Way, York, YO10 5BR Research and development Ordinary 100
Each trading entity is a trading division of the Group and offers commercial
services to customers.
21 Inventories
2023 2022
£'000 £'000
Raw materials and consumables 204 420
204 420
Inventories are stated after provision for impairment of £181,000 (2022:
£nil).
Details of amounts charged to the Income Statement are provided in note 6.
Inventories are charged to cost of sales when materials are consumed or
contractual commitments are complete.
22 Trade and other receivables
2023 2022
£'000 £'000
Amounts falling due within one year:
Trade receivables 356 629
Allowance for expected credit losses - -
Trade receivables - net 356 629
Other receivables 145 525
Prepayments 177 167
Amounts owed by Group undertakings - -
678 1,321
Amounts falling due after more than one year:
Other receivables 373 379
373 379
The Directors consider that the carrying value of trade and other receivables
is approximately equal to their fair value.
The Group's trade receivables have been reviewed for expected credit losses.
Allowances have been made at the year end amounting to £nil (2022 - £nil),
with movements on the allowances for doubtful debts as follows:
2023 2022
£'000 £'000
Balance at 1 July 2022 - -
Allowance for doubtful debts and accrued income 331 -
Release of irrecoverable debts (275) -
Balance at 30 June 2023 56 -
The expected credit loss provision fully relates to accrued income, which is
included within 'other receivables' in the above table.
The calculation of expected credit losses for trade receivables at 30 June
2023 was determined as follows:
Current Less than 3 months 3 to 6 months More than 6 months Total
Expected credit loss rate 0.25% 0.5% 1.0% 100.0%
Gross carrying amount of trade receivables (£'000) 324 32 - - 356
Gross carrying amount of accrued income (£'000) - - - 56 56
Expected credit loss (£'000) 1 - - 56 57
On the grounds that the above calculation is trivial in total with the
exception of accrued income, no expected credit loss has been provided against
trade receivables for at the current or comparative reporting period end date.
The expected credit loss has been provided against accrued income in full.
23 Current trade and other payables
2023 2022
Notes £'000 £'000
Trade payables 656 514
Other taxation and social security 85 105
Other payables 8 234
Accruals 463 959
Deferred income 117 314
1,329 2,126
The carrying amount of these liabilities approximates to their fair value.
Deferred income relates to amounts outstanding under existing customer
contracts where the delivery of service has not been completed at the
reporting date.
24 Non-current trade and other payables
2023 2022
Notes £'000 £'000
Deferred income 7 -
7 -
Deferred income represents government grants where amounts to which the Group
has an unconditional right are being recognised over a period of time related
to an underlying asset.
25 Borrowings
The contractual terms of the Group's interest-bearing loans and borrowings are
as follows:
2023 2022
£'000 £'000
Current
Other loans 50 39
50 39
Non-current
Other loans 19 -
19 -
Security of borrowings
Other loans represents a bounce-back loan of £29k which is repayable in fixed
instalments until 2026. The loan is not secured. It also represents £40k of
financing which is secured against assets which have been acquired and
subsequently had funding raised against them. All interest rates payable are
on an arm's length basis.
26 Lease liabilities
2023 2022
£'000 £'000
Maturity analysis - contractual undiscounted cash flows
Within one year 334 303
Years two to five inclusive 828 1,208
After five years - -
Total undiscounted lease liabilities 1,162 1,511
Future finance charges (153) (242)
Discounted lease liabilities 1,009 1,269
Consisting of:
Non-current 745 1,060
Current 264 209
Total discounted lease liabilities 1,009 1,269
Amounts of right-of-use assets recognised and the movements during the
year/period are disclosed in note 18.
The total cash outflow for leases during the year was £193,000 (2022:
£395,000).
27 Provisions for liabilities
2023 2022
£'000 £'000
Dilapidations 35 35
35 35
Movements on provisions:
2023 2022
£'000 £'000
Dilapidations
At 1 July 35 26
Additional provisions - 9
At 30 June 35 35
A provision was made in a prior period by the Directors to cover the expected
contractual commitments on termination of the licence agreement to occupy the
premises where the Group is based.
28 Deferred tax liabilities
No deferred tax balances were recognised in the prior year. The following are
the major deferred tax liabilities and assets recognised by the Group and
movements thereon during the current reporting period:
ACA's Tax losses Total
£'000 £'000 £'000
Deferred tax liability/(asset) at 1 July 2022 - - -
Deferred tax movement in the year
Charge/(credit) to profit or loss 6 (6) -
Change in tax rates - - -
Deferred tax liability/(asset) at 30 June 2023 6 (6) -
As at 30 June 2023, the Group had unrecognised tax losses of approximately
£9,033,000 (2022: £3,805,000). A deferred tax asset of £2,258,000 at 25%
(2022: £723,000 at 19%) has not been recognised in respect of these losses
due to uncertainty of timing of taxable profits.
29 Cash and cash equivalents
2023 2022
£'000 £'000
Cash and cash equivalents 234 6,691
30 Financial risk management
The Group's financial instruments comprise cash, receivables and payables held
at amortised cost that arise from its operations.
The Group is exposed to financial risks on these financial instruments. The
Group's risk management is coordinated by its Directors who focus actively on
securing the Group's short to medium term cash flows through regular reviews
of the operating activities of the business. The Group does not actively
engage in the trading of financial assets for speculative purposes, nor does
it write options. The most significant financial risks to which the Group is
exposed are described below.
Liquidity risk
Management control and monitor the Group's cash flow on a regular basis,
including forecasting future cash flows, available bank and other credit
facilities in comparison to the Group's outstanding commitments on a regular
basis to ensure that the Group has sufficient funds to meet the obligations of
the Group as they fall due. Having regard to the visibility of sales, the cash
forecasts are regularly reviewed and cover alternative income scenarios.
The undiscounted contractual maturity of the Group's financial liabilities at
the end of the reporting period was as follows:
Year ended 30 June 2023 Within 3 months £'000 3-12 months 1-2 years 2-5 years Over 5 years Total
£'000s £'000 £'000s £'000
Trade and other payables 1,177 - - - - 1,177
Deferred income 115 2 7 - - 124
Bank loans 13 38 19 - 70
Leases 31 303 311 517 - 1,162
Total financial liabilities 1,336 343 337 517 - 2,533
The undiscounted contractual maturity analysis of the Group's financial assets
at the end of the reporting period was as follows:
Year ended 30 June 2023 Within 3 months £'000 3-12 months 1-2 years 2-5 years Over 5 years Total
£'000s £'000 £'000s £'000
Trade and other receivables 356 - - 373 - 729
Accrued income * - - - - - -
Total financial liabilities 356 - - 373 - 729
* Stated after provision for expected credit loss.
Interest rate risk
The Group adopts a policy of ensuring that there is an appropriate mix of
fixed and floating rates in managing its exposure to changes in interest rates
on borrowings. There is no material exposure to changes in interest rates at
the reporting date.
Management regularly reviews the Group's interest rate risk position and
considers the requirement for any hedging instruments to mitigate risk as part
of this regular monitoring. There were no such hedging instruments in place at
the year-end (2022: none).
The carrying amount of financial assets / (liabilities) which expose the Group
to cash flow interest rate risk are as follows:
2023 2022
£'000 £'000
Cash 234 6,691
Bank loans (29) (39)
205 6,652
Foreign currency risk
The main currencies in which the Group trades are the Pound Sterling and the
US Dollar.
The Group is exposed in its trading operations to the risk of changes in
foreign currency exchange rates and during the period the fluctuation in
exchange rates has had an impact on reported results. As at 30 June 2023, the
Group does not have any financial assets or liabilities denominated in a
currency other than Pound Sterling, so is not exposure to any foreign currency
risks at that date.
Credit risk
Credit risk predominantly arises from trade receivables and cash and cash
equivalents. Credit risk attributable to trade receivables is managed by
monitoring the aggregate amount and duration of exposure to any one customer
depending upon their credit rating. The amounts presented in the Consolidated
Statement of Financial Position are net of allowances for doubtful debts,
estimated by the Group's management based on prior experience and their
assessment of the current economic environment. The Group has no issues with
the impairment of debts at the reporting date. The historic trading activity
and the collection of balances due from customers does not indicate that
impairment risk will be significant in the future.
2023 2022
£'000 £'000
Financial assets measured at amortised cost
Trade and other receivables 730 1,866
Cash and cash equivalents 234 6,691
964 8,557
Financial liabilities measured at amortised cost
Trade and other payables 1,301 2,126
Interest-bearing loans and borrowings 1,232 1,308
2,533 3,434
All financial liabilities are measured at amortised cost.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to
continue as a going concern, so that it can provide returns for shareholders
and benefits for other stakeholders. The Group can implement a range of
measures to alter the capital structure including altering the dividends paid
to shareholders and arranging appropriate banking facilities.
The capital structure of the Group consists of net debt (borrowing offset by
cash and bank balances, see note 30) and equity (comprising issued share
capital, reserves and retained earnings).
The Directors of the Group review the capital structure on an ongoing basis.
As part of this review the Directors consider the cost of capital and risks
associated with each class of capital.
Effective interest rates and maturity analysis
30 June 2023 Effective interest rate Total One year or less 1-2 years 2-5 years More than 5 years
% £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 0.0 234 - - - -
Right-of-use lease liabilities 8.0 1,009 264 290 455 -
Other loans 2.5 70 51 19 - -
845 315 309 455 -
30 June 2022 Effective interest rate Total One year or less 1-2 years 2-5 years More than 5 years
% £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 0.0 6,691 - - - -
Right-of-use lease liabilities 8.0 1,269 209 335 725 -
Other loans 2.5 39 39 - - -
5,383 248 335 725 -
31 Retirement benefit schemes
Defined contribution schemes 2023 2022
£'000 £'000
Charge to income statement in respect of defined contribution schemes 39 28
A defined contribution pension scheme is operated for all qualifying
employees. The assets of the scheme are held separately from those of the
Group in an independently administered fund. Contributions totalling £7,846
(2022: £7,043) were payable to the fund at the balance sheet date.
32 Issued share capital
2023 2022
£'000 £'000
Ordinary share capital
Issued and fully paid
69,091,717 (2022: 69,022,594) Ordinary shares of £0.001 each 69 69
69 69
During the year, 69,123 share options (as shown in note 34) were exercised for
total consideration of £5,318. Subsequent to the year end, new share capital
was issued, as disclosed in note 39.
33 Reserves
Retained earnings
Cumulative profit and loss net of distribution to owners.
Share premium
Cumulative excess over nominal value of consideration received, net of
directly attributable issue costs, for shares issued.
Share-based payments reserve
Used to recognise the grant date fair value of options issued to employees but
not exercised.
Group reorganisation reserve
Difference between the consideration given and the net assets of acquired
entities at the date of acquisition.
34 Share-based payments
The Group operates an executive unapproved share option scheme and an EMI
employee share option scheme. The movement on share options issued was as
follows:
Exercise price Options
£
At 30 June 2021 15,954,000
Consolidation of shares of £0.0001 to £0.001 (14,358,600)
Bonus issue of shares at 1 for 2 1,595,400
At 29 November 2021 3,190,800
Issued in the period (unapproved share scheme) 1.1700 256,410
Issued in the period (EMI share option scheme) 0.6350 284,200
Lapsed in the period (EMI share option scheme) 0.6350 (1,000)
Exercised in the period (EMI share option scheme) 0.3108 (112,200)
Lapsed in the period (EMI share option scheme) 0.3108 (659,800)
At 30 June 2022 2,958,410
Exercised in the period (unapproved share scheme) 0.0768 (35,000)
0.0768 (34,123)
Forfeited and lapsed in the period (EMI share option scheme) 0.0768 (8,875)
Forfeited and lapsed in the period (EMI share option scheme) 0.1554 (70,200)
Forfeited and lapsed in the period (EMI share option scheme) 0.6350 (148,000)
At 30 June 2023 2,662,212
Share options outstanding at 30 June 2023 were:
Date of grant Expiry date Options
Exercise price
£
Granted on 1 April 2015 (executive share option scheme) 21 November 2030 0.0768 118,600
Granted on 1 April 2016 (executive share option scheme) 21 November 2030 0.0768 118,400
Granted on 1 April 2017 (executive share option scheme) 21 November 2030 0.0768 201,800
Granted on 1 April 2018 (executive share option scheme) 21 November 2030 0.1554 138,000
Granted on 1 April 2019 (executive share option scheme) 21 November 2030 0.1554 96,200
Granted on 1 April 2020 (executive share option scheme) 29 June 2031 0.1554 44,000
Granted on 1 February 2021 (executive share option scheme) 29 June 2031 0.1554 182,600
Granted on 31 July 2019 (EMI share option scheme) 31 July 2029 0.1554 153,202
Granted on 30 June 2021 (EMI share option scheme) 29 June 2031 0.1554 1,217,800
Granted on 15 December 2021 (executive share option scheme) 14 December 2031 1.1700 256,410
Granted on 16 December 2021 (EMI share option scheme) 15 December 2031 0.6350 135,200
2,662,212
The movement in options over ordinary shares of the Parent Company in the year
were as follows:
Number of share options Weighted average exercise price
2023 2023
Number £
Outstanding at 1 July 2022 2,958,410 0.271
Exercised in the year (69,123) 0.077
Forfeited in the year (102,900) 0.527
Lapsed in the year (124,175) 0.414
Outstanding at 30 June 2023 2,662,212 0.260
Exercisable at 30 June 2023 2,505,207 0.209
On 15 December 2021, the Company granted to SPARK a warrant to subscribe for
up to 689,417 Ordinary Shares (representing 1% of the Enlarged Share Capital)
at the Placing Price. The exercise period commences on Admission and ends on
the third anniversary of Admission.
No new share options or warrants have been granted in the current reporting
year. Subsequent to the year end a number of options have been granted, and
some replaced, as explained in note 39.
The total expense recognised in the income statement from equity-settled
share-based payments is disclosed in note 6.
35 Cash used in operations
2022
2023 £'000
£'000
Loss for the year after tax (7,836) (2,093)
Adjustments for:
Taxation credit (462) (545)
Finance costs 141 62
Amortisation and impairment of intangible assets 324 22
Depreciation and impairment of tangible assets 3,077 432
Loss on disposal of tangible fixed assets - 1
Equity-settled share-based payment expense 84 457
Increase in provisions - 9
(4,672) (1,655)
Movements in working capital:
Decrease/(increase) in inventory 216 (330)
Decrease/(increase) in debtors 648 (1,433)
(Decrease)/increase in creditors (790) 445
Cash used in operations (4,598) (2,973)
36 Changes in liabilities arising from financing activities
1 July 2022 Cash flows New Other non-cash changes 30 June 2023
leases
£'000 £'000
£'000 £'000
£'000
Loans 39 (37) - 67 69
Lease liabilities 1,269 (193) - (67) 1,009
1,308 (230) - - 1,078
1 July 2021 Cash flows New Other non-cash changes 30 June 2022
leases
£'000 £'000
£'000 £'000
£'000
Loans 49 (10) - - 39
Lease liabilities 205 (395) 1,506 (47) 1,269
254 (405) 1,506 (47) 1,308
Other non-cash changes in the year ended 30 June 2023 represent a
reclassification of certain borrowings from leases to more accurately
represent the nature of the funding arrangements.
37 Controlling party
The Directors consider that there is no ultimate controlling party.
38 Related party transactions
Transactions with related parties
Key management personnel
Key management personnel are those persons having authority and responsibility
for planning, directing and controlling the activities of the Group, including
the Directors of the Company.
The remuneration of key management personnel of the Group was:
2023 2022
£'000 £'000
Aggregate emoluments 1,161 1,397
Share-based payments 84 101
Value of Company contribution to defined contribution pension schemes 7 5
1,252 1,503
39 Events after the reporting period end date
On 31 July 2023 the Directors announced a significant new fundraising event
which resulted in a firm placing of 10,318,390 Ordinary shares for total
proceeds of £0.1million, a conditional placing of 339,281,610 ordinary shares
for total proceeds of £3.4million and a subscription of 10,400,000 ordinary
shares for total proceeds of £0.1m, all before expenses. The conditional
placing and subscription shares were approved at a General Meeting on 17
August 2023, and total net proceeds were £3.2m.
In connection with the fundraise, the following Board changes took place on
passing of the resolutions at the General Meeting on 17 August 2023
· Dr Ian Gilham, Dr Rob Quinn, Dr John Richards and Angela Hildreth
resigned.
· Dr Arron Tolley was reappointed to the Board as Director and
Chief Technical Officer
· Dr David Bunka remained as Director and his role changed to Chief
Scientific Officer
· Steve Hull was appointed as Executive Chairman.
· Dean Fielding and Adam Hargreaves were appointed as Independent
Non-Executive Directors
On 19 September 2023 the Group completed a further fundraising through the
issue of 28,251,956 ordinary shares by way of a subscription and placing.
This fundraise resulted in total gross proceeds of £311,000 before expenses.
Grant of new share options
On 9 October 2023 the Group granted 116,835,918 options over its Ordinary
share capital ("the Scheme") which exercise at a price of 1p where certain
conditions are met. The options are designed to provide a material incentive
to the Directors and other staff, but on stretching revenue and share price
performance criteria, which include achieving returns of at least 4-times and
up to 50-times the issue price within a 10 year period. All options have an
exercise price of 1p per share.
The total fair value of the Scheme has been determined to be £1,088,000,
based on a Monte-Carlo methodology taking into account the market conditions
of the price hurdle. However, the Scheme also includes non-market conditions
related to a requirement to have performance of the Group to meet expectations
(which will in each case require consultation with the Group's nominated
advisor). As a result, the actual fair value charged to profit and loss is
likely to be substantially lower than this, although the actual financial
impact cannot be quantified until such results are known.
As part of the grant of options under the Scheme, Dr Arron Tolley has agreed
to the cancellation of 700,000 existing options with an exercise price of
7.675p each and Dr David Bunka has agreed to the cancellation of 32,600 and
61,400 existing options with exercise prices of 15.54p and 7.675p each
respectively.
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