REG - Aptamer Group PLC - Full Year Results for the 12mths to 30 June 2024
22/10/2024 07:00
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RNS Number : 0322J Aptamer Group PLC 22 October 2024
22 October 2024
Aptamer Group plc
("Aptamer", the "Company" or the "Group")
Full year results for the twelve months ended 30 June 2024
Significant advances in Optimer asset development with a focus on licensing;
increasing commercial traction
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 2024 (the "Period").
Highlights
· New strategic approach launched in August 2024 with a focus on
the development and partnering of high-value Optimer assets with licensing
potential.
· Group reorganisation with a refreshed Board and cost base reduced
to enable strategy delivery.
· Dr Adam Hargreaves appointed Non-Executive Chair of Aptamer
Group, Dr Arron Tolley re-appointed as Chief Executive Officer, Andrew Rapson
appointed as Chief Financial Officer in August 2024 and Tim Sykes appointed to
the Board as Non-Executive Director in September 2024.
· Commercial pipeline rebuilt with increasing revenue momentum in
the second half of the financial year and £1.0 million in orders won in the
last quarter.
· Delivering on our strategic milestones, including:
· Increased commercial traction and advancing to licensing of
critical reagent with a top five pharmaceutical partner.
· Planned on-person functionality tests of Optimer as active
ingredient in deodorants by Unilever, with the potential for further
development and downstream licensing if successful.
· Second phase of Optimer development for early Alzheimer's disease
lateral flow test.
· Proof of fibrotic liver delivery vehicle with AstraZeneca's siRNA
payload.
· Planned identification of the fibrotic liver biomarker to satisfy
significant interest from multiple partners and support the mechanism of
action, which has the potential to unlock multiple significant high-value
deals.
Financial summary
· Revenue £0.9 million (2023: £1.8 million).
· Cash balance at 30 June 2024 £0.9 million (2023: £0.2 million).
· Adjusted EBITDA loss of £2.8 million (2023: £4.7 million).
· Administration expenses £3.2 million (2023: £5.0 million).
· £3.5 million net proceeds received from equity raising in August
and September 2023.
Post-period end
· Successful fundraise in August 2024 of £2.6 million (net).
· Further to project with a genetic medicines biotechnology company
in December 2023,(1) completed development of the Optimer delivery vehicle and
shipped material to the partner for testing. This delivery vehicle could form
a critical part of precision gene therapy with the potential for downstream
licensing.
· Developed Optimer binders for a new non-invasive prenatal
diagnostic platform that avoids amniocentesis, with material shipped to
Bioliquid Innovative Genetics for testing on human samples.
· Revenue from contracts progressing through the laboratory of
£0.9 million, (subject to scientific attrition), including contracts with top
10 pharmaceutical companies and many of these contracts with licensing
potential.
Commenting on the results, Arron Tolley, Chief Executive Officer of Aptamer
Group, said: "Over the past year, we have made significant progress
commercially and technically, under challenging market conditions. The Group
has focused on three key aspects of our strategy, being 1. internal asset
development, 2. regaining commercial traction and 3. cost discipline. We have
rebuilt and expanded the pipeline over the year, demonstrating a positive
trajectory in revenue recognition with 65% of the year's total revenue
realised in the second half and increased our collaborations with top ten
pharmaceutical partners. We have underscored the growing demand for Optimer
technology and the rising recognition of our platform within the industry.
"Aptamer's strong technical delivery across both immunohistochemistry (IHC)
and gene therapy delivery has been instrumental in driving commercial
interest. The Group has secured an increasing number of contracts for Optimer
IHC development, reinforcing our growing reputation in this segment of the
market. In the drug delivery space, data generated internally facilitated the
signing of a substantial contract for Optimer delivery vehicles for gene
therapies and initiated a post-period collaboration with AstraZeneca to
explore the use of our molecules for drug delivery in fibrotic liver disease.
"The Group's partnership with Unilever has made considerable progress towards
the use of Optimer binders in treating malodour in deodorant products.
Finally, a soft launch of our new Optimer+ platform has been well received
across the industry, leading to two new contracts, one with a top ten
pharmaceutical partner, in the first few months of launch. This provides us
with a unique position within the market to continue progression.
"These developments have been made in parallel with substantial reductions to
the cost base and a continued commitment to tight cost discipline supporting
the future of the Group. We thank investors for their support during our
placing in August 2024, which enables us to focus on advancing our Optimer
assets and pursuing new opportunities through additional partnerships."
Investor webinar
Dr Arron Tolley, Chief Executive Officer, and Andrew Rapson, Chief Financial
Officer will provide a live presentation relating to the Full Year Results via
Investor Meet Company on Tuesday, 22 October 2024, 14:00 BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted 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.
(1. ) (Aptamer Group signs material agreement with genetic
medicines company
(https://polaris.brighterir.com/public/aptamer_group/news/rns/story/rdly38x) )
- Ends -
For further information, please contact:
Aptamer Group plc +44 (0) 1904 217 404
Arron Tolley
SPARK Advisory Partners Limited - Nominated Adviser +44 (0) 20 3368 3550
Andrew Emmott / Adam Dawes
Turner Pope Investments (TPI) Limited - Broker +44 (0) 20 3657 0050
James Pope / Andrew Thacker
Northstar Communications +44 (0) 113 730 3896
Sarah Hollins
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 pharmaceutical
companies, diagnostic development companies, and research institutes covering
a range of targets and applications to establish 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 life sciences sector.
Chairman's statement
I am delighted to have recently taken the role of Non-Executive Chairman at
Aptamer Group. With a background in drug development, it is inspiring to be
working at the forefront of the cutting-edge innovations and technical
advancements the Group is driving across various sectors.
Recent changes over the last twelve months, both within the Company and across
the macroeconomic and investment landscape, have encouraged the new Board of
Directors to fortify a strategy that aims for three objectives: 1. accelerated
development of wholly-owned and partnered internal assets; 2. revenue
maximisation from our fee-for-service work; and, 3. prudency of spending.
Having raised the requisite funding to support our next phase of growth, we
have refocused the Company from a primary fee-for-service operation to a
synergised contract research/internal portfolio business, restructured the
Board to provide the requisite expertise to support this new strategy and
substantially realigned the operational cost-base. The Group has set
achievable targets to maximise the cash runway while maintaining our ability
to advance its in-house platform of wholly-owned and partnered licensing
opportunities.
Delivering internal projects and developing assets
Excellent technical progress has been made over the period in developing
Optimer assets within each of the business units. The Optimer platform has
diverse applications across the life sciences, and as recognition of our
technology's advantages has increased, this has driven the expansion of the
customer base beyond the standard markets of reagents, diagnostics, and
therapeutics. A key example of this is our ongoing partnership with Unilever,
which aims to develop Optimer binders for the treatment of malodour in
personal care products. The fast-moving consumer goods market is a
non-exploited territory for aptamer use, and we are excited to partner with
the leading global player in this commercially-attractive space.
In more traditional applications, key assets are under development in
diagnostics and therapeutics. The Group is working in partnership with
Neuro-Bio to develop Optimers to enable the world's first lateral flow tests
for the pre-symptomatic diagnosis of Alzheimer's disease. The diagnostic
market value for Alzheimer's disease was worth over $4 billion in 2022, and we
believe an Optimer-based test could be revolutionary for this disease, as it
would allow patients access to treatments earlier, with the potential to halt
this cruel disease.
Aptamer has developed an Optimer delivery vehicle targeting the cells that
cause liver fibrosis which could ultimately lead to a therapeutic. Estimates
show 4.6% of the global population suffer with advanced stages of this disease
and numbers have been increasing since 2016. With no therapies currently
available for liver fibrosis, this is a serious area of unmet need that could
potentially be addressed by our delivery vehicle. We are not aware of any
other company that has been able to generate delivery vehicles targeting liver
fibrosis to date. The demonstration data developed during the period for this
Optimer is highly encouraging and has led to a post-period collaboration with
AstraZeneca, exploring the potential of this product in delivering their siRNA
payloads.
The Group aims to attract other large pharmaceutical companies into this
intellectual space and foster a vertical market in this arena of unmet medical
needs. The targeted delivery of siRNA to precise cell types and tissues
remains a significant challenge for the wider therapeutic application of siRNA
therapies. Despite this limitation, the siRNA market was valued at over $13
billion in 2023. Optimer technology could represent a paradigm shift in the
targeted delivery of siRNA molecules.
These three examples testify to the potential of the technology and skill of
our scientific team. Developing new diagnostics and therapeutics in an
emerging field is challenging and Aptamer is leading the market in these
specific areas.
Of particular note concerning the work undertaken during the past six months
has been the soft launch of our Optimer+ platform. This combines all the
advantages of an aptamer with additional protein constructs akin to
protein-based ligands, such as antibodies and bicyclic peptides. Optimer+ is a
wholly-owned and patent-protected technology. Initial contracts for this
platform, including from a large pharmaceutical company, have been signed.
Following validation and optimisation of the platform, we expect this area of
the business to become a key offering.
Increasing the commercial trajectory
Commercially, the start of the FY23-24 year was very challenging for Aptamer.
The Group experienced a reduction in customer confidence due to the strength
of our balance sheet and a downturn in market conditions across the life
sciences sector. Despite these factors, extremely proactive work by all
employees across the Group has returned confidence in our technology, as
methodology and operational advancement have continued apace. Over the year,
the Group has seen increasing revenue recognition, with 65% realised in the
second half and £0.98 million in orders won in the last quarter.
Tight cost discipline over the last twelve months reduced the cost base from a
budgeted £6.4 million per annum at the start of the financial year to £3.6
million per annum as of August 2024. These reductions were achieved through
operational headcount, premises, leadership team costs, and overheads. Due to
this rightsizing of the business and the successful post-period fundraise in
August 2024, Aptamer can begin to capitalise on its technological and
commercial traction, with the security of a significant cash runway. Revenues
from fee-for-service work and income from any licensing deals will continue to
extend this cash runway as the Group continues to develop to a scale that can
sustain itself.
With funding now in place, Aptamer is well-positioned to traverse the next
phase in its evolution, namely, delivering shareholder value across several
potential inflection targets.
Board changes
Since joining Aptamer's Board as a Non-Executive Director in 2023, I have been
impressed with the talent and dedication of the entire staff. It has been a
privilege to step into the role of Chair as of August 2024. I would like to
express my thanks to former Executive Chairman Steve Hull, who returned to the
Group's management team in August 2023 to help successfully reset the
business. I would also like to thank Non-Executive Director Dean Fielding, who
joined Aptamer in August 2023, for his valued commitment and contribution over
the year. Both have been instrumental in reshaping the Group and have now
stepped down from the Board as we focus to capitalise on the technical Optimer
assets that have been developed.
Integral to the dynamic shift of direction have been further exciting changes.
Aptamer co-founder Dr. Arron Tolley returned to the Group as Chief Technical
Officer in August 2023. His technical focus and commercial expertise have been
critical in shaping fit-for-purpose product development methods and building a
fresh and enthusiastic customer base, keen to explore our technology. Arron
has been notable in his ability to create commercial opportunities and
maximise the Group's scientific potential. As of August 2024, we welcomed
Arron to the role of Chief Executive Officer.
Andrew Rapson has joined the Board of Directors as Chief Financial Officer and
Company Secretary in August 2024, and Tim Sykes joined as a Non-Executive
Director in September 2024. Andrew brings shrewd financial awareness,
foresight, and fiscal prudency to the team, having previously worked with the
financial team here at Aptamer. Tim brings a wealth of industrial and economic
knowledge, with comprehensive experience in both public and private companies.
We welcome them both and look forward to working together.
Dr. David Bunka remains as Chief Scientific Officer of the Group. David is a
co-founder of the Company, and his leadership and international reputation
have been paramount in rebuilding our network of key clients and solving
myriad scientific challenges whenever they have arisen. David is integral to
the Group, and we are proud to have him in this role.
Outlook
The previous twelve months have undoubtedly been challenging at Aptamer. I
would like to thank all shareholders, both current and new, who supported us
in the latest fundraising, and who continue to support the Company. Following
the raise, the Group is now sufficiently well-funded to enable the development
of Optimer assets, crystallising value inflection opportunities over the
coming years.
Aptamer's strategic focus going forward is to advance the development of our
valued internal assets, and plans are in place with relevant partners to
enable this. Unilever intends to move to on-person functionality studies in
2024 for the application of our Optimer as an active ingredient in deodorants,
which will be another key step in the demonstration of our technology. If
successful, we anticipate project completion within the next two years, with a
potential for licensing. The Group is in multiple discussions with interested
parties around the Optimer delivery vehicles for liver fibrosis. We are
delighted to continue the partnership with AstraZeneca and aim to extend the
current dataset to encompass in vivo proof-of-concept studies. Such work has
the potential to unlock multiple significant high-value deals.
The Board will continue to apply its rigorous cost management principles and
has identified up to £0.6 million of further annualised savings. In addition,
the Group expects to continue growing the fee-for-service development work,
which is important in its objective of being self-sustaining. This work also
acts as a horizon-scanning method with which the Group can determine future
potential high-value Optimer assets.
The progress across the Group over the past year has been transformational. I
would like to extend our gratitude to all team members at Aptamer. They have
displayed admirable enthusiasm, dedication, and commitment to overhauling the
business model and maintaining a sharp focus on ongoing projects and
activities. They have also been pivotal in growing Aptamer's new innovative
scientific and entrepreneurial culture.
In closing, I thank shareholders for their ongoing support and enthusiasm in
what we as a Company are trying to achieve.
Chief Executive Officer's statement
Last year, major changes were seen in the aptamer market: in July 2023,
Astellas, a pharmaceutical giant, acquired Iveric Bio, a therapeutic aptamer
company, for $5.9BN,(1) followed by FDA approval of the second-ever aptamer
therapy in August 2024.(2) In concert with these milestones, the therapeutic
pipeline for aptamers continues to advance and grow through various stages of
clinical trials for a range of indications. This increasing maturation of
aptamer technology has also been noted across research and diagnostic sectors,
where antibodies' shortcomings mean they fail ~50% of the time,(3) leading to
a requirement for alternatives to fulfil unmet needs.
The rising awareness and exploration of aptamer technology across the life
sciences industry has fuelled growth in the market, leading to the emergence
of numerous smaller competitors. As a leading global player, Aptamer Group is
strategically positioned with unique expertise and advanced development
capabilities, creating substantial barriers for other companies attempting to
match our pace of innovation and progress.
The past financial year was challenging for Aptamer. However, since
recapitalising, customer confidence has returned, and our skilled team and
well-equipped laboratory have enabled us to deliver on exciting projects, and
to rebuild and grow a sales pipeline that we aim to maintain and diversify
into the new financial year. As part of last year's technical progress,
multiple assets developed from our fee-for-service offering have reached, or
are approaching, key value inflection points. This means that we are getting
closer to the crystallisation of potential licensing revenues.
Going forward, we aim to increase shareholder value by focusing on the
generation of high-value assets, alongside generating fee-for-service revenue,
to drive high-value licensing opportunities. Therefore, the following are our
key strategic objectives:
For the current financial year, we expect to deliver:
- out-licensing of a developed Optimer asset to a leading
pharmaceutical company subject to successful testing in partners' labs;
- on-person functionality studies with Unilever demonstrating the use
of Optimers in the treatment of malodour;
- a rebuilt and expanded commercial pipeline.
In the following financial year, we expect to deliver:
- a completed demonstration of the malodour technology with Unilever
and potential licensing if successful;
- proof of concept lateral flow tests for Alzheimer's disease
diagnosis with Neuro-Bio; and
- an expanded commercial pipeline with a general focus on repeat
business.
Additionally, we aim to:
- further validate our platform by demonstrating the functionality of
AstraZeneca's siRNA with our fibrotic liver Optimer delivery vehicles with a
view to progressing to in vivo studies which will unlock multiple significant
high-value deals.
Group performance
Over the past year, Aptamer has secured and delivered contracts from new and
repeat customers, including major pharmaceutical companies leading to a
position where we are now working with all the top 10 pharmaceutical companies
globally. The Group is confident that our technologies are fully accepted
within the portfolio of options that the market requires for the challenging
targets that antibodies cannot serve.
Important validatory datasets for the Optimer-based fibrotic liver delivery
vehicle, immunohistochemistry (IHC) reagents, and small molecule binders have
been generated. These datasets were enabled by the ring-fencing of R&D
budget from our last fundraise and have been essential in the rebuilding of
the sales pipeline.
We have advanced our Optimer+ platform and won two contracts to demonstrate
the platform to strategic partners. We have also implemented a range of
post-development validation assays that were added to the Group's service
offering and should lead to increased revenue over time.
Following the fundraise in August 2023, the Group's commercial pipeline has
been rebuilt and demonstrated increasing traction over the period, with £0.6
million in revenue generated in the second half of the year and an increase in
order book values, including £1.0 million contracts won in the last quarter.
We are now well-placed to maintain this commercial momentum and deliver on our
new strategy with a focus on the development and licensing of high-value
Optimer assets.
Current pipeline
We have continued to build on our pipeline since the year-end which now stands
at £4.3 million across 28 advanced stage opportunities compared to the £2.1
million at 8 July 2024. Deals in this space can take 3-6 months or longer to
identify, negotiate and sign, with a further 6 months or more to recognise the
revenue. This is due to customer materials that are manufactured being sent
to us, which can be delayed between contract signing and the start of revenue
recognition and cash flows. At the end of September 2024, we have signed deals
progressing through the laboratory giving a current total of £0.9 million of
revenue visibility this financial year. This value is subject to scientific
attrition, with our average realisation being approximately 60-70% of the
maximum.
Advancement of Optimer assets
Over the past year, the Group has progressed multiple Optimer assets in
fast-moving consumer goods, critical reagents, diagnostics, and precision
medicine. Notable progress includes our continued collaboration with Unilever
to develop Optimer binders as potential active ingredients in deodorants.
Evaluation within Unilever's labs has shown consistent and effective
performance. Based on the strength of the data, Unilever plans to progress the
Optimers to on-person functionality studies in the second half of 2024, which,
on successful completion, will represent a key inflection point in the value
of this asset, with on-person efficacy trials expected to further reinforce
the commercial viability of these innovative binders.
An Optimer critical reagent developed for a top five pharmaceutical partner
has shown promising results in our partner's labs, with additional testing
underway in multiple drug development programs within the Group, and the
potential for commercial licensing.
Within diagnostics, we are developing a lateral flow test for the simple
diagnosis of early Alzheimer's disease in partnership with Neuro-Bio. The
Group entered the second phase of development in February 2024, to develop an
additional Optimer binder against the innovative target implicated in
Alzheimer's disease and evaluate complementary antibodies to identify a
matched pair of binders to underpin the development of a prototype lateral
flow device. As part of the European Eurostar project, we have successfully
developed Optimer binders for use in a medical device for improved
non-invasive prenatal testing and the diagnosis of placental disease. These
binders are currently progressing through in-house and partner-led testing
phases.
Our advances in therapeutics have focussed on targeted drug and gene therapy
delivery for precision medicines. Over the past year, we have validated an
Optimer delivery vehicle that targets the cells responsible for liver
fibrosis, showing excellent targeting and significant therapeutic effects in
lab-based tests. The quality of this dataset attracted a new collaboration
with AstraZeneca to evaluate this technology with their proprietary RNA
payloads.
Significant commercial contracts
Aptamer has seen a particular rise in demand for Optimer IHC reagent
development this year, following the launch of Optimer-Fc last year.
Agreements were signed for Optimer IHC reagents, including one with a top five
pharmaceutical company with a value of up to £175,000 and another with a
second top five pharmaceutical company for the development of a binder to a
neurological biomarker. The Group also made the first direct sale of our new
Optimer-Fc platform to a biotechnology company, with a deal value of up to
£147,500. Post-period, an additional contract with a biopharmaceutical
company has been signed to develop Optimer IHC reagents to targets known to be
intractable with antibodies, which, if successful, may be integrated into
companion diagnostics.
Within diagnostics, a material contract signed with Timser Group for the
development of Optimer binders to enable the world's first blood test for
cervical cancer, with a value of up to £465,000.
Within therapeutics, a further material contract was signed in December 2023
with a genetic medicines company for the development of therapeutic Optimer
delivery vehicles, with a value of up to £553,000. Post-period end, the Group
successfully developed and validated the Optimer delivery vehicles and
transitioned this to the partner for testing within their labs. Additionally,
we partnered with a leading pharmaceutical company to assess Optimer binders
for the targeted delivery of their nanoparticles, which could enable the
delivery of larger therapeutic payloads, such as mRNA. The Group also
progressed our early-stage partnership with Kairos Biotech, with an agreement
to leverage the new Optimer+ platform to develop binders that could offer new
therapeutic approaches to overcome the complex area of transplant rejection.
Further contracts won in the period include Optimer reagent generation for a
gene therapy company, a contract signed with a top ten pharmaceutical company
to develop Optimer binders to improve biologic drug purification and the first
sale of Optimer+ to a top ten pharmaceutical company for use in a highly
sensitive immunoassay platform. Optimer development was also sought from a
global speciality enzyme provider for inclusion in assay kits. This deal
includes downstream royalties. Additionally, a top five pharmaceutical company
signed an agreement to develop Optimer binders in flow cytometry assays used
in their internal development of a clinical asset, worth up to £110,000.
Looking forward, Aptamer is strategically positioned for growth as the Group
continues to refine our technology platforms, develop strategic partnerships,
and generate compelling datasets to support our expanding client base.
1. Reuters. Astellas Pharma buys Iveric Bio for $5.9 billion. (1 May, 2023)
https://www.reuters.com/markets/deals/astellas-pharma-buys-iveric-bio-59-bln-2023-04-30/
2. PR Newswire. Iveric Bio Receives U.S. FDA Approval for IZERVAY™
(avacincaptad pegol intravitreal solution), a New Treatment for Geographic
Atrophy. (4 Aug, 2023)
https://www.prnewswire.com/news-releases/iveric-bio-receives-us-fda-approval-for-izervay-avacincaptad-pegol-intravitreal-solution-a-new-treatment-for-geographic-atrophy-301894042.html
3. Bradbury & Plcukthun. Standardize antibodies used in research. Nature.
518:27-29 (2015)
4. https://polaris.brighterir.com/public/aptamer_group/news/rns/story/x21gjmw
Operational progress
As part of our Board reconfiguration, we have appointed a preclinical drug
development expert Dr Adam Hargreaves as Chairman to help guide the Group into
its next stage of evolution. Alongside this, we completed a successful
fundraise in August 2024 to allow us to unlock the potential of our high-value
Optimer assets. Our goal is to partner with key industry leaders identified
through our fee-for-service opportunities and build on the positive
relationships forged through solving challenging technical problems for those
partners. We will then aim to drive these assets toward licensing
opportunities over several years. During this process, we will maintain
rigorous cost discipline across the Group. In parallel, we are expanding our
fee-for-service pipeline with more chargeable offerings to support ongoing
operations and identify future commercial opportunities and revenue streams.
Below is a summary of our progress against each of the Group's strategic
objectives.
1. To license an Optimer critical reagent to a leading pharmaceutical
company
While we have several similar opportunities in our pipeline, one specific
example is an asset developed through a fee-for-service project that commenced
in 2019 with a top five pharmaceutical company. The Optimer is specific for a
key disease biomarker that will be used as a critical reagent to develop the
partner's clinical assets. Data generated by Aptamer and the partner company
has demonstrated the performance of the Optimer in IHC applications. This
evaluation work has now been expanded to several other teams within the
partner company, evaluating the Optimer in different research areas. If
successful, the pharmaceutical company aims to license the Optimer binder for
use during drug development and clinical trials.
2. To advance the Optimer for the potential treatment of malodour with
Unilever
The Group undertook a fee-for-service development project with Unilever in
2022 to develop Optimers to treat malodour in personal care products, such as
deodorants. The binders have been rigorously tested at both Aptamer and
Unilever and have shown highly positive and reproducible results. Based on
these results, a patent was submitted in March 2024 to protect the
intellectual property. Unilever plans to begin on-person functionality studies
of the technology in deodorants in 2024. Aptamer has recently signed a
contract extension to allow this advancement to on-person functionality
studies using the Optimer binders. As with the vast majority of our
opportunities, if successful, there is potential for licensing, and passive
income remains.
3. To develop lateral flow tests for Alzheimer's disease diagnosis with
Neuro-Bio
The Group partnered with Neuro-Bio to develop Optimer binders to enable a
novel Alzheimer's disease diagnostic in 2023. The relationship started as a
fee-for-service project, where Optimer binders were developed to enable the
development of a lateral flow test for the early diagnosis of Alzheimer's
disease. A panel of binders were successfully developed in the project's first
phase and characterised for use in lateral flow and biosensor tests. The
binders have been transitioned to Neuro-Bio, and testing is currently underway
in their labs using a biosensor platform. The project's second phase began in
February 2024 to develop an additional Optimer binder for the target, to
enable the development of a simple lateral flow assay.
4. To secure a committed development partner for the fibrotic liver
delivery vehicle
The delivery vehicle targeting fibrotic liver has been validated through
in-house studies, demonstrating its function as a therapeutic delivery
vehicle with the potential to selectively deliver drugs for new treatment
approaches in liver fibrosis. The data generated shows its selectivity along
with its ability to deliver functional drug cargo for therapeutic effect. This
data spurred AstraZeneca's interest in the delivery vehicle and resulted in a
post-period agreement to trial this delivery vehicle with the partner's siRNA
cargo. This project has the potential to progress to generating demonstrator
data in animal models for evaluation by AstraZeneca.
5. To achieve a full market launch of the Optimer+ platform
Significant technical progress has been made over the last year in the
development of our Optimer+ platform, with a soft launch and two commercial
sales being made to evaluate the platform. Optimer+ is a novel affinity ligand
platform that can be considered among the next generation of binding reagents.
Data shows the platform's performance in terms of development time and
affinity is superior to our current offering and that Optimer+ carries the
basic requirements for therapeutic applications.
Summary and outlook
I am pleased to report that the Group's new strategy, with a focus on strict
cost controls, increased commercial focus, and a heavy tilt towards R&D
for asset development and licensing potential, has allowed us to make
substantial technical progress and solid commercial headway.
The assets we have developed both internally and with strategic partners hold
the potential for significant impact in their specific markets. Continued
demonstration of each of these assets over time will further validate Optimer
technology to support commercial traction.
Looking ahead to the next financial year, the Group aims to progress each
Optimer asset to meet our strategic milestones and crystallise value
inflection points for shareholders. Our commercial pipeline is now robust,
with multiple deals in late-stage negotiations. Additionally, projects are
advancing smoothly through the laboratory, thanks to the enhancements
implemented last year.
The new streamlined management team and focus across the business positions us
well to move forward with impact. I am excited about delivering on our
strategy to drive long-term value for Aptamer and its shareholders.
Financial Review
Over the period, Aptamer's sales pipeline has been re-established and the
fixed cost base reduced substantially, which has put the Group on a good
footing to move forward. Increases in the sales pipeline culminated in
contracts being signed in the final quarter worth up to £1 million. A
significant cost-cutting exercise was carried out in the first quarter,
reducing the fixed costs to £3.6 million per annum from approximately £6.4
million.
Post-period fundraises totalling net proceeds of £2.6 million have been
completed with the issuance of 1,453,000,000 ordinary shares at 0.2 pence per
share.
Revenue
The Group reported revenues for the year ended 30 June 2024 of £0.9 million
(year ended 30 June 2023: £1.8 million).
Gross profit
Gross profit for the year of £0.25 million (year end 30 June 2023: £0.36
million) following a lull in commercial customer work, particularly in the
first half of the year when the Group had to focus on rebuilding the pipeline.
Costs are largely fixed staff costs which have not been leveraged on such low
volumes of work, but the team is now operating on the minimum possible skill
base.
Research and development costs
During the year, the Group expensed through the income statement £0.5 million
(2023: £1.0 million), relating to the continued development of the
Optimer(®)+ platform technology and the development of Optimer delivery
vehicles to cells associated with liver fibrosis. The fundraise completed in
August 2024 has enabled the continuation of this work.
Administrative expenses
Administrative costs were £3.2 million for the year compared to £5.0 million
for the year to 30 June 2023. This decrease in costs is a result of employee
costs reducing to £2.1 million (2023: £3.3 million) and a decrease in
operational footprint and consultancy and other administrative costs. The
headcount has decreased slightly from 46 at 30 June 2023 to 34 at 30 June
2024. Since the year end, the Group has reduced the cost base by a further
£0.3 million.
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 2024 30 June 2023
£'000 £'000
Adjusted EBITDA (2,790) (4,672)
Share based payment expense (49) (84)
Impairment of tangible and intangible assets - (2,601)
Statutory EBITDA (2,839) (7,357)
Amortisation (13) (44)
Depreciation (232) (756)
Operating Loss (3,084) (8,157)
In the prior period an impairment loss of £2.6 million was recognised
following a review of the carrying value of the cash-generating unit in light
of the conditions prevailing as at 30 June 2023. No further impairment of this
cash generating unit was considered necessary at 30 June 2024.
Share-based payment charges
The non-cash charge for the year was £0.49 million (2023: £0.84m).
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 of the rebate is included within the taxation line of the
income statement and amounts to £0.2 million (2023: £0.5 million) and
represents a tax loss surrender of £1.9 million. Tax losses carried forward
totalled £11.4 million (2023: £9.0 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 £3.0 million (2023: £7.8 million loss). The basic
loss per ordinary share decreased to 0.71 pence (2023: 11.35 pence per share)
based on an average number of shares in issue during the period of 415,107,581
(2023: 69,055,369).
Cash flow
The Group had £0.9 million of cash at 30 June 2024 (2023: £0.2 million). The
net cash inflow for the year was £0.6 million (2023: £6.5 million net
outflow). This reflects a cash outflow from operations of £2.7 million (2023:
£4.6 million), a cash inflow from fundraising activities of £3.5 million
(2023: £Nil), cash receipts relating to research and development tax credits
of £0.5 million which represented the tax refund for the prior period (2023:
£0.5 million), payment of leases of £0.4 million (2023: £0.4 million) and
an investment in capital expenditure and intangible assets of £0.1 million
(2023: £2.0 million). The £2.0 million capital expenditure in the prior year
was in relation to the fit-out of the new laboratory and office space.
Financial position
Net assets at 30 June 2024 were £0.9 million (2023: £0.3 million) of which
cash amounted to £0.9 million (2023: £0.2 million) reflecting the remainder
of funds from the equity raising earlier in the year. Non-current assets were
slightly higher than the prior period which is largely due to a small
impairment reversal following the recognition of investment property.
Following the year end, the Company has successfully raised £2.6 million in
net proceeds through an equity fundraise in August 2024.
Consolidated statement of comprehensive income
For the year ended 30 June 2024
Notes
2024 2023
£'000 £'000
Revenue 4 860 1,752
Cost of sales (610) (1,393)
Gross profit 250 359
Administrative expenses (3,167) (5,034)
Other operating income 7 127 3
Adjusted EBITDA 9 (2,790) (4,672)
Amortisation and impairment of intangible assets 16 (13) (324)
Depreciation and impairment (including loss on disposal of assets) 17,18 (232) (3,077)
Share-based payment expense 34 (49) (84)
6 (3,084) (8,157)
Operating loss
Investment revenue
12
24 -
Finance costs 12 (81) (141)
Loss before taxation (3,141) (8,298)
Taxation 13 183 462
Loss and total comprehensive loss (2,958) (7,836)
Basic loss per share 14 0.71p 11.35p
Diluted loss per share 14 0.71p 11.35p
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 2024
Notes 2024
£'000 2023
£'000
Non-current assets
Intangible assets 16 165 70
Property, plant and equipment 17 424 561
Right-of-use assets 18 187 160
Other receivables 22 373 373
1,149 1,164
Current assets
Inventories 21 119 204
Trade and other receivables 22 439 678
Tax receivable 192 473
Cash and cash equivalents 29 870 234
1,620 1,589
Total assets 2,769 2,753
Current liabilities
Trade and other payables 23 (1,027) (1,329)
Borrowings 25 (38) (50)
Leases 26 (215) (264)
(1,280) (1,643)
Net current assets / (liabilities) 340 (54)
Non-current liabilities
Trade and other payables 24 (3) (7)
Borrowings 25 (9) (19)
Leases 26 (555) (745)
Provisions for liabilities 27 (35) (35)
(602) (806)
Net assets 887 304
Equity
Issued share capital 32 467 69
Share premium 33 12,672 9,578
Group reorganisation reserve 33 185 185
Share-based payment reserve 34 504 544
Accumulated losses (12,941) (10,072)
Equity attributable to shareholders 887 304
Consolidated statement of changes in equity
For the year ended 30 June 2024
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 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
Loss and total comprehensive expense for the year - - - (2,958) (2,958)
Transactions with the owners of the Parent Company
Issue of share capital 32 398 3,613 - - - 4,011
Share issue costs - (519) - - - (519)
Credit to equity for equity-settled share-based payments 34 - - - 49 - 49
Exercised & forfeited equity-settled share-based payments 34 - - - (89) 89 -
Balance at 30 June 2024 467 12,672 185 504 (12,941) 887
Consolidated statement of cash flows
For the year ended 30 June 2024
Notes 2024 2023
£'000 £'000
Cash flows from operating activities
Cash used in operations 35 (2,772) (4,598)
Income taxes received 464 534
Investment income 24 -
Net cash used in operating activities (2,284) (4,064)
Investing activities
Purchase of intangible assets 16 (108) (53)
Purchase of tangible assets 17 (14) (1,975)
Net cash used in investing activities (122) (2,028)
Financing activities
Proceeds from issue of share capital 32 3,911 5
Share issue costs (419) -
Repayment of borrowings (22) (37)
Payment of lease liabilities 26 (347) (192)
Interest paid (81) (141)
Net cash generated from/ (used in) financing activities 3,042 (365)
Net increase/ (decrease) in cash and cash equivalents 636 (6,457)
Cash and cash equivalents at beginning of year 234 6,691
Cash and cash equivalents at end of year 870 234
Notes to the financial statements
For the year ended 30 June 2024
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. The Group has developed a platform technology
which is utilised by to solve problems for pharmaceutical and bio-technology
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 2024 does not constitute the Group's statutory accounts.
Statutory accounts for the period ended 30 June 2023 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 30 June
2024 were approved by the Board on 16 October 2024 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 2024 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).
The group 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 2024, 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 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 2024.
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 2024 of
£3.0 million (year ended 30 June 2023: £7.8 million). The Group had a cash
balance of £0.9 million at 30 June 2024 (30 June 2023: £0.2 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 2026. The Directors consider that
this forecast represents a reasonable best estimate of the performance of the
Group over the period to June 2026.
In August 2024 the Company completed a fundraise which raised gross proceeds
of £2.9 million before expenses. The cash balance at the end of June 2024
was £0.9 million.
We are encouraged by the health of our pipelines, with £0.9 million of
revenue visibility so far in the June 2025 financial year and a further £4.3
million of advanced stage sales negotiations.
As a result of Board changes and revisiting some of the operational spend, the
fixed cost base has been cut back to circa £3 million per annum. Management
continue to maintain close control of costs to maximise the cash runway.
In the forecast, full year revenue is anticipated to be higher than was the
case in the year to June 2024. 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 June 2026.
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 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 & equipment
Property, plant & equipment are 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.
Where a right-of-use asset is partially sublet to a third party, but is not
separable from the main right-of-use asset, the Group continues to account for
this as a right-of-use asset, continuing to depreciate the asset in line
across its lease term.
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 and have an effect on the
current period or a prior period or may have an effect on future periods:
IFRS17 Insurance Contracts: Withdrawal of IFRS4 Insurance Contracts
Amendments to IAS 12 'Income Taxes: Deferred tax relating to assets and
liabilities arising from a single transaction
Amendments to IFRS 10 19 and IAS 28: Sale or contribution of assets between an
investor and its associate or joint venture
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of accounting
policies
Amendments to IAS 8: Definition of an accounting estimate
Amendments to IAS 12 'Income Taxes': International tax reform - Pillar Two
Model Rules
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following
standards and interpretations, which have not yet been applied in these
financial statements, were in issue but not yet effective (and in some cases
had not yet been adopted by the UK Endorsement Board).
Amendments to IAS 1 'Presentation of Financial Statements': Non-current
liabilities with covenants
Amendments to IAS 1 'Presentation of Financial Statements': Classification of
liabilities as current or non-current
Amendments to IAS 7 and IFRS 7: Supplier finance arrangements
IFRS S1 'General Requirements for Disclosure of Sustainability-related
Financial Information' and IFRS S2 'Climate-related disclosures' :1 January
2025
Amendments to IAS 21 to clarify lack of exchangeability: 1 January 2025
Amendments to IFRS 7 and IFRS 9: Classification and measurement of financial
instruments: 1 January 2026.
IFRS 18 'Presentation and Disclosure in Financial Statements': 1 January 2027
IFRS 19 'Subsidiaries without public accountability': 1 January 2027
Effective dates refer to periods commencing on or after this date. The Group's
reported financial results are not expected to be materially affected by any
standard. However, the presentation and disclosure of its results are expected
to be impacted by the adoption of IFRS S1 and IFRS 18 which are both
predominantly disclosure-only standards. Given this impacts only disclosures,
the Directors do not expect there to be an impact on the reported profits or
net assets of the Group from adopting these standards. As these are
disclosure-led standards, the Directors have not presented a list of impacts
on the 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
2024 the provision for trade receivables impairment amounted to £nil (2023:
£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 2024.
(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.
(v) Share-based payments
Valuation of share-based payments requires assumptions about the achievement
of non-market conditions including staff retention and target achievement and
the number of options that will vest. If actual performance is different from
these assumptions, costs recorded in future periods will be different from
expectations and will include revisions to amounts recognised so far. Details
of the key inputs and assumptions are provided in note 34.
(vi) Sublet assets
The Group and Company have sublet part of a right-of-use asset during the year
on an operating lease. The portion let is not separable from the right-of-use
asset and therefore the Group has continued to classify this as a right-of-use
asset at cost less depreciation, despite the sublet portion otherwise meeting
the definition of an investment property.
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:
2024 2023
£'000 £'000
United Kingdom 143 427
Europe 14 134
United States of America 593 1,026
Rest of the World 110 165
860 1,752
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:
2024 2023
£'000 £'000
Customer A 271 -
Customer B 62 -
Customer C 75 -
Customer D 101 400
Customer E - 236
Customer F - 216
All other customers 351 900
860 1,752
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:
2024 2023
Note £'000 £'000
Inventories 21 - 181
Total impairment expense charged to cost of sales - 181
2024 2023
Note £'000 £'000
Property, plant and equipment (specific) 17 - 259
Intangible assets (specific) 16 - 80
Impairment of cash-generating unit - 2,262
Total impairment expense charged to administrative costs - 2,601
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 previous
year end, combined with the well-publicised risks to viability ahead of the
fundraise in August 2023, the Directors reviewed the carrying value of the
cash-generating unit ("CGU") in light of the condition. As a result, an
impairment was 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.
An impairment review has been performed in the current year, detailed in note
16, which has concluded that there is no adjustment (either increased
impairment, or reversal of impairment) required as at 30 June 2024.
6 Operating loss
Operating loss is stated after charging:
2024 2023
£'000 £'000
Employee remuneration (note 10) 2,059 3,264
Share-based payment expenses 49 84
Amortisation of intangible assets (note 16) 13 44
Impairment of intangible assets (notes 5 & 16) - 280
Depreciation of property, plant and equipment (note 17) 151 401
Impairment of property, plant and equipment (notes 5 & 17) - 1,609
Depreciation of right-of-use assets (note 18) 81 355
Impairment of right-of-use assets (notes 5 & 18) - 712
Research and development expenses (excluding R&D staff costs) 317 474
Raw materials and consumables used 169 1,212
Impairment of inventories charged as cost of sales (note 5) - 181
All depreciation, amortisation and impairment are included
in administrative expenses.
7 Other operating income
2024 2023
£'000 £'000
Government grants 81 3
Rent 46 -
127 3
The Group received
funding from government grant schemes and has complied with the conditions of
the funding throughout the year.
Rent includes service charge of £22,000.
Rent is received from a sublease of a surplus portion of the group's premises.
Risk has been managed by requiring a written sublease including normal
conditions regarding use and condition of the property.
8 Auditors' remuneration
Fees payable to the Group's auditors and associates:
2024 2023
£'000 £'000
For audit services
Audit of the financial statements of the Group and Company 54 72
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:
2024 2023
Number Number
Administration and support 9 13
Production 21 29
Research and development 3 4
Sales 5 8
38 54
Their aggregate remuneration comprised:
2024 2023
£'000 £'000
Wages and salaries 1,812 2,878
Social security costs 218 347
Other pension costs 29 39
Short-term staff compensation 2,059 3,264
Share-based payment charge 49 84
Staff costs charged to income statement 2,108 3,348
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 and investment income
2024 2023
£'000 £'000
Interest on financial liabilities measured at amortised cost
Bank interest and charges 1 2
Other interest on financial liabilities 6 7
77 9
Other finance costs
Interest payable on lease liabilities 74 125
Foreign exchange loss - 7
Total finance costs 81 141
Refer to notes 25 and 26 for more details on the Group's outstanding
borrowings and leases.
2024 2023
£'000 £'000
Investment revenue
Bank interest 24 -
13 Taxation
2024 2023
£'000 £'000
Current tax
UK corporation credit on loss for the current year/period (192) (473)
Adjustments in respect of prior periods 9 11
Deferred tax
Origination and reversal of timing differences 7 -
Adjustments in respect of prior periods (7) -
Total tax credit (183) (462)
The actual credit for the year can be reconciled to the expected credit for
the year based on the profit or loss and the standard rate of tax as follows:
2024 2023
£'000 £'000
Loss before taxation (3,141) (8,298)
Expected tax credit based on the standard rate of corporation tax in the UK of (785)
25% (2023: 20.5%)
(1,701)
Expenses that are not deductible in determining taxable profit 11 59
Research and development tax relief (414) (388)
Surrender of tax losses for R&D tax credit refund 480 243
Deferred tax asset not recognised 406 1,347
Adjustments in respect of prior periods 1 11
Other adjustments 118 (33)
Taxation credit in the financial statements (183) (462)
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 in the prior year to
pro-rate this change.
Deferred tax balances at the reporting date are measured at 25% (2023: 25%).
As at 30 June 2024 the Group had unrelieved tax losses of approximately
£11,384,000 (2023: £9,033,000). A deferred tax asset has not been recognised
in respect of these losses. Further details are given in note 28.
14 Earnings per share
2024 2023
Basic loss per share 0.71p 11.35p
Diluted loss per share 0.71p 11.35p
Loss for the year £2,958,000 £7,836,000
Weighted average number of ordinary shares used as the denominator in 415,107,581 69,055,369
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 Software
£'000s £'000s Total
£'000s
Cost
At 1 July 2022 390 - 390
Additions - internally generated 53 - 53
At 30 June 2023 443 - 443
Additions - internally generated 70 - 70
Additions - acquired - 38 38
513 38
At 30 June 2024 551
Accumulated amortisation
At 1 July 2022 49 - 49
Charge for the period 44 - 44
Impairment 280 - 280
At 30 June 2023 373 - 373
Charge for the year 11 2 13
384 2 386
At 30 June 2024
Carrying amount
At 30 June 2024 129 36 165
.At 30 June 2023 70 - 70
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,
£75,000 (2023 - £31,000) 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 which is further
probability weighted for certain sensitivities around key forecasts and the
timing of these. This approach is consistent with the review performed in the
previous year.
As a result of this cashflow forecast, and ongoing trading conditions
prevalent at the previous year end, the Directors recognised an impairment at
30 June 2023 as explained in note 5. An impairment review at 30 June 2024
identified no further impairment; this showed that the cashflow forecasts on a
cautious basis continue to approximate to the carrying value of the CGU, and
were also substantially aligned with the previous year. As a result, no
adjustment has been made to the carrying value of the CGU, either in respect
of a new impairment or reversing the previous year's impairment charge.
In the prior year, the impairment expense was allocated across all
non-monetary assets of the CGU, including property, plant and equipment, and
right-of-use assets.
The forecasts used in the previous year were for a specific period of 1 year,
subsequently growing at 25% per annum. In the current year the forecasts
include specific growth rates between 0% and 25% annualised, which are
factored into the 15 year life on a specific basis. As each project covers a
defined term in the event of commercialisation, this has been predicated on a
specific basis beyond the 5 year window suggested by IAS 36 on the grounds
that this gives a more reliable and risk adjusted expectation than a
perpetuity model, and also includes long term growth rates for revenue and
costs on a specific basis. More detailed analysis is not provided as to do so
may be commercially sensitive.
The key unobservable input to the model was:
· A pre-tax discount rate of 32.30% (2023- 34.50%), equating to a
post-tax discount rate of 25.30% (2023 - 25.80%).
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 in July and
August 2024, which then secured the Group's status as a going concern. As
the fundraise successfully completed, management prepared two scenarios
addressing successful and unsuccessful completion of the fundraise, which was
consistent with the equivalent fundraise and impairment review as at 30 June
2023.
A weighting of 70:30 (2023 - 75:25) in favour of successful completion of the
fundraise was applied in calculating the value in use of the CGU. In the
current year, as the focus was on projects the successful route was further
split into two additional forecasts for timing of these risk-adjusted projects
commencing. The forecast for 2024 also reflected the risk to the timing and
included a probability weighting of 50% for the original forecast and 50% for
an alternative in which all income occurs one year later. If this alternative
happens the value in use of the CGU will be reduced to £nil.
The Directors 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 4.8% (2023 - 8%), this would result in a
further impairment charge of £734,000 (2023 - £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 52.1:47.9 (2023 -
50:50), this would result in an additional impairment of £734,000 (2023 -
£650,000). If the post-tax discount rate was increased by 10% to 35.30%
(2023 - 35.80%) then this would result in an additional impairment of
£734,000 (2023 - £645,000).
Cashflow projections have been produced for a 15 year period because this is a
prudent estimate of the expected product life cycle. No terminal values or
perpetuity growth factors have been considered.
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 2024, as a result of the removal of the
uncertainty relating to the 2024 fundraising event. However this value has not
been quantified, and cannot be utilised for the purpose of impairment testing
as at 30 June 2024 under the requirements of IAS 36.
Further, the Directors are confident that the carrying value of the CGU has
the potential to be significantly in excess of that recognised as
probabilities used for each project are considered cautious. If any
uncertainties around the timing and completion of projects are closed
positively then the forecasts present an outcome significantly in excess of
the carrying value of the CGU.
17 Property, plant and equipment
Other property, plant and equipment Fixtures, Total
Leasehold improvements fittings and equipment
£'000
Cost £'000 £'000 £'000
At 1 July 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
Additions 4 8 2 14
Disposals - - (10) (10)
At 30 June 2024 1,607 1,465 36 3,108
Accumulated depreciation
At 1 July 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
Charge for the year 99 52 - 151
Disposals - - (10) (10)
Impairment - - - -
Transfers - - - -
At 30 June 2024 1,357 1,299 28 2,684
Carrying amount
At 30 June 2024 250 166 8 424
At 30 June 2023 345 210 6 561
Transfers 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
Group Buildings Total
Plant and
machinery
£'000 £'000 £'000
Cost
At 1 July 2022 1,225 427 1,652
Transfers - (217) (217)
At 30 June 2023 1,225 210 1,435
Additions - 108 108
Disposals (212) - (212)
At 30 June 2024 1,013 318 1,331
Depreciation
At 1 July 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
Charge for the year 42 39 81
Disposals (212) - (212)
At 30 June 2024 919 225 1,144
Carrying amount
At 30 June 2024 94 93 187
At 30 June 2023 136 24 160
Transfers in the previous 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.
Included within Buildings is property formerly used by the Group but now
sublet to a third party. The sublease is an operating lease and covers part of
the remaining period to which the Group is entitled to use the property under
the headlease. Details of rent receivable during the current period are
provided in note 7.
19 Investments
Investment in subsidiaries
Company
Investments other than loans
£'000
Cost
At 1 July 2023 418
Transfers -
At 30 June 2024 418
Provision for impairment
At 1 July 2023
Transfers 215
-
Charge in the year -
At 30 June 2024 215
Carrying amount
At 30 June 2024 203
At 30 June 2023 203
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 2024 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 Non-trading Ordinary 100
Aptamer Diagnostics Limited Windmill House, Innovation Way, York, YO10 5BR Non-trading Ordinary 100
Aptasort Limited (non-trading)) Windmill House, Innovation Way, York, YO10 5BR Dormant Ordinary 100
Each trading entity is a trading division of the Group and offers commercial
services to customers.
21 Inventories
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Raw materials and consumables 119 204 - -
Inventories are stated after provision for impairment of £181,000 (2023:
£181,000).
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
2024 2023
£'000 £'000
Amounts falling due within one year:
Trade receivables 110 356
Allowance for expected credit losses - -
Trade receivables - net 110 356
Other receivables 66 145
Accrued income 101 -
Prepayments 162 177
439 678
Amounts falling due after more than one year:
Other receivables 373 373
373 373
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 (2023 - £nil),
with movements on the allowances for doubtful debts as follows:
2024 2023
£'000 £'000
Balance at 1 July 2023 56 -
Allowance for doubtful debts and accrued income - 331
Release of irrecoverable debts (56) (275)
Balance at 30 June 2024 - 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
2024 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) 90 - 20 - 110
Gross carrying amount of accrued income (£'000) (*) 70 15 - - 85
Expected credit loss (£'000) - - - - -
* This is stated net of £16,000 of government grants which are included
within accrued income, but excluded from the calculation of expected credit
losses as non-commercial in nature.
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, no expected credit loss
has been provided against trade receivables for at the current or comparative
reporting period end date.
23 Current trade and other payables
2024 2023
Notes £'000 £'000
Trade payables 452 656
Other taxation and social security 56 85
Other payables 79 8
Amounts owed to group undertakings - -
Accruals 304 463
Deferred income 136 117
1,027 1,329
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
2024 2023
Notes £'000 £'000
Deferred income 3 7
3 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:
2024 2023
£'000 £'000
Current
Other loans 38 50
38 50
Non-current
Other loans 9 19
9 19
Security of borrowings
Other loans represents a bounce-back loan of £19,000 (2023 - £29,000) which
is repayable in fixed instalments until 2026. The loan is not secured. It also
represents £28,000 (2023 - £40,000) 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
Group and parent company 2024 2023
£'000 £'000
Maturity analysis - contractual undiscounted cash flows
Within one year 271 334
Years two to five inclusive 595 828
After five years - -
Total undiscounted lease liabilities 866 1,162
Future finance charges (96) (153)
Discounted lease liabilities 770 1,009
Consisting of:
Non-current 555 745
Current 215 264
Total discounted lease liabilities 770 1,009
Amounts of right-of-use assets recognised and the movements during the year
are disclosed in note 18.
The total cash outflow for leases during the year was £421,000 (2023:
£193,000).
27 Provisions for liabilities
2024 2023
£'000 £'000
Dilapidations 35 35
35 35
Movements on provisions:
2024 2023
£'000 £'000
Dilapidations
At 1 July 35 35
Additional provisions - -
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 Lease assets Lease liabilities Short-term £'000 Total
£'000 £'000 £'000 £'000 £'000
Deferred tax liability/(asset) at 1 July 2023 as previously reported 6 (6) - - - -
Revision required by amendment to IAS 12 212 - 40 (252) - -
Deferred tax liability/(asset) at 1 July 2023 as restated 218 (6) 40 (252) - -
Deferred tax movement in the year
Charge/(credit) to profit or loss 1 (87) 37 60 (11)
Change in tax rates - - - - - -
Deferred tax liability/(asset) at 30 June 2024 219 (93) 77 (192) (11) -
ACA's Tax losses Lease assets Lease liabilities Total
£'000 £'000 £'000 £'000 £'000
Deferred tax liability/(asset) at 1 July 2022 as previously reported - - - - -
Revision required by amendment to IAS 12 (18) - 335 (317) -
Deferred tax liability/(asset) at 1 July 2022 as restated - - 335 (317) -
Deferred tax movement in the year
Charge/(credit) to profit or loss 236 (6) (295) 65 -
Change in tax rates - - -
Deferred tax liability/(asset) at 30 June 2023 218 (6) 40 (252) -
As at 30 June 2024, the Group had unrecognised tax losses of approximately
£11,384,000 (2023: £9,033,000). A deferred tax asset of £2,846,000 at 25%
(2023: £2,258,000 at 25%) has not been recognised in respect of these losses
due to uncertainty of timing of taxable profits.
29 Cash and cash equivalents
2024 2023
£'000 £'000
Cash and cash equivalents 870 234
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 2024 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 835 - - - - 835
Loans 30 8 9 - - 47
Leases 87 184 345 250 - 866
Total financial liabilities 952 192 354 250 - 1,748
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 2024 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 549 - - - - 549
Accrued income 101 - - - - 101
Cash 870 - - - - 870
Total financial assets 1,520 - - - 1,520
The undiscounted contractual maturity of the Group's financial liabilities at
the end of the previous 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
Loans 13 38 19 - - 70
Leases 31 303 311 517 - 1,162
Total financial liabilities 1,221 341 330 517 - 2,409
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 - - - - 356
Accrued income * - - - - - -
Cash 234 - - - - 234
Total financial assets 590 - - - - 590
* 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 (2023: none).
The carrying amount of financial assets / (liabilities) which expose the Group
to cash flow interest rate risk are as follows:
2024 2023
£'000 £'000
Cash 870 234
Bank loans (19) (29)
851 205
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 2024, 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.
2024 2023
£'000 £'000
Financial assets measured at amortised cost
Trade and other receivables 634 730
Cash and cash equivalents 870 234
1,504 964
Financial liabilities measured at amortised cost
Trade and other payables 835 1,301
Interest-bearing loans and borrowings 817 1,232
1,652 2,533
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 25) 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 6,691 6,671 - - -
Right-of-use lease liabilities 8.0 1,269 209 335 725 -
Other loans 2.5 39 39 - - -
5,383 248 335 725 -
30 June 2024 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 0.0 870 870 - - -
Right-of-use lease liabilities 8.0 770 215 313 242 -
Other loans 2.5 47 38 9 - -
817 253 322 242 -
31 Retirement benefit schemes
Defined contribution schemes 2024 2023
£'000 £'000
Charge to income statement in respect of defined contribution schemes 29 39
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 £6,899
(2023: £7,846) were payable to the fund at the balance sheet date.
32 Issued share capital
2024 2023
£'000 £'000
Ordinary share capital
Issued and fully paid
467,343,673 (2023: 69,091,717) Ordinary shares of £0.001 each 467 69
467 69
During July 2023 and August 2023, 370 million shares were issued at 1 pence
per share. In September 2023 a further 28.3 million shares were issued at 1.1
pence per share.
New share capital was issued after the year end, 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 2022 2,958,410
Exercised in the period (unapproved share scheme) 0.0768 (69,123)
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
Forfeited and lapsed in the period (EMI share option scheme) 0.0768 (32,600)
Forfeited and lapsed in the period (EMI share option scheme) 0.1554 (766,400)
Forfeited and lapsed in the period (executive share option scheme) 1.1700 (256,410)
Forfeited and lapsed in the period (EMI share option scheme) 0.6350 (6,600)
Granted in period (EMI share option scheme) 0.0100 116,835,918
Forfeited and lapsed in the period (EMI share option scheme) 0.0100 (2,630,349)
At 30 June 2024 115,805,771
Share options outstanding at 30 June 2024 were:
Effective date oDate 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 118,200
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 120,802
Granted on 30 June 2021 (EMI share option scheme) 29 June 2031 0.1554 451,400
Granted on 16 December 2021 (EMI share option scheme) 15 December 2031 0.6350 128,600
Granted on 9 October 2023 (EMI share option scheme) 9 October 2033 0.0100 114,205,569
115,805,771
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
2024 2024
Number £
Outstanding at 1 July 2023 2,662,212 0.260
Granted in year 116,835,918 0.010
Forfeited in the year (2,758,554) 0.064
Lapsed in the year (933,805) 0.295
Outstanding at 30 June 2024 115,805,771 0.012
Exercisable at 30 June 2024 1,600,202 0.172
New share options were granted ("the Award") as shown in the table above,
which are all equity-settled share based payments. These have been valued by
an independent valuation specialist using a Monte-Carlo simulation, which
takes into account only the share price hurdles necessary to achieve a payoff
at each date. There are additional non-market conditions, which are revenue
targets for each financial year.
The inputs used in assessing the value of the Award were as follows:
· Grant date - 9 October 2023
· Vesting period - up to 10 years (price targets can be achieved at
any time in this period)
· Volatility - 118.6%
· Dividend yield - 0%
· Risk-free rate - 5.0%
· Exercise price - £0.01/share
Notably, volatility is a significant input to the model and is unusually high.
The value used is the observable volatility of the Group's share price, as
priced on the Alternative Investment Market, from its flotation date to the
grant date. Given the recent challenges and changes detailed in note 39, it is
expected that similar volatility may be experienced in the short to medium
term as the Group continues to grow and commercialise its products. Based on
benchmarking of similar quoted companies, other similar companies have a
volatility around 60%; if this was used instead then the fair value of the
Award would fall from £1.088m to £0.66m.
The Award is expensed over the period in which entitlement to the Award is
established through the non-market conditions. This is split into five
tranches:
· Tranche 1 - total fair value £184,000. Entitlement is determined
via revenue targets in the year ended 30 June 2024. These targets have been
missed, therefore no expense is recognised to the P&L, and this portion of
the Award is permanently foregone.
· Tranche 2 - total fair value £276,000. Entitlement is determined
via revenue targets in the year ended 30 June 2025 ("FY25").
· Tranches 3 - 5 - total fair value £628,000. Entitlement is
determined via revenue targets in the year ended 30 June 2026 ("FY26").
The expense recognised reflects the Directors' best assessment (as at the year
end) of the likelihood of achieving revenue conditions in FY25 and FY26, as
well as an estimate of the level of staff retention at those dates. Should
targets be missed in those years, the amount charged to the P&L this year
would be credited back to the P&L, however should targets be met then an
additional charge would need to be recognised in future years in respect of
the current year's entitlement.
The total expense recognised in the income statement from equity-settled
share-based payments is disclosed in note 6.
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.
35 Cash used in operations
2023
2024 £'000
£'000
Loss for the year after tax (2,958) (7,836)
Adjustments for:
Taxation (183) (462)
Finance costs 81 141
Investment revenue (24) -
Amortisation and impairment of intangible assets 13 324
Depreciation and impairment of tangible assets 232 3,077
Equity-settled share-based payment expense 49 84
(2,790) (4,672)
Movements in working capital:
Decrease in inventory 85 216
Decrease in debtors 239 648
Decrease in creditors (306) (790)
Cash used in operations (2,772) (4,598)
36 Changes in liabilities arising from financing activities
1 July 2023 Cash flows New Other non-cash changes 30 June 2024
leases
£'000 £'000
£'000 £'000
£'000
Loans 69 (22) - - 47
Lease liabilities 1,009 (347) 108 - 770
1,078 (369) 108 - 817
Cash flows 30 June 2023
1 July 2022 £'000 £'000
£'000 New Other non-cash changes
leases
£'000
£'000
Loans 39 (37) - 67 69
Lease liabilities 1,269 (193) - (67) 1,009
1,308 (230) - - 1,078
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:
2024 2023
£'000 £'000
Aggregate emoluments 731 1,161
Share-based payments 49 84
Value of Company contribution to defined contribution pension schemes 6 7
786 1,252
39 Events after the reporting date
On 24 July 2024 the Directors announced a significant new fundraising event
which resulted in a firm placing of 116,835,918 Ordinary shares for total
proceeds of £0.2 million, a conditional placing of 1,272,164,082 ordinary
shares for total proceeds of £2.5 million and a subscription of 26,000,000
ordinary shares for total proceeds of £0.1 million, all before expenses. On 1
August 2024 a supplementary placing of 30,000,000 ordinary shares was
announced for total proceeds of £0.1 million. The conditional placing, the
supplementary placing and subscription shares were approved at a General
Meeting on 13 August 2024, and total net proceeds were £2.6 million.
In connection with the fundraise, the following Board changes took place on
passing of the resolutions at the General Meeting on 13 August 2024
· Stephen Hull and Dean Fielding resigned.
· Dr Arron Tolley remained as a Director and his role changed to
Chief Executive Officer
· Dr Adam Hargreaves remained as a Director and his role changed to
Non-Executive Chairman
· Andrew Rapson was appointed to the Board as Chief Financial
Officer.
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AnnouncementREG - Aptamer Group PLC - TR-1: Standard form notification of major holdings
Announcement