REG-Bioventix Plc: Preliminary results for the year ended 30 June 2014 <Origin Href="QuoteRef">BVXP.L</Origin>
24/11/2014 14:30
Bioventix plc
("Bioventix" or the "Company")
Preliminary results for the year ended 30 June 2014
The Company announces its audited results for the year ended 30 June 2014
Highlights
* Revenue up 31% to £3.5m (2012: £2.7m)
* Gross profit up 28% to £3.2m (2012: £2.5m)
* Profit before tax, after flotation and staff option costs, up 22% to £2.2m
(2012: £1.8m)
* Second interim dividend 14.4p per share, giving total of 24p per share
* Admitted to AIM in April 2014
Business review
We are pleased to report the results for the financial year ended 30 June 2014.
Revenues for the year of £3.535m (2013:£2.706m) were 31% up on the previous
year. Profits after tax have increased by 19% year on year.
The core business has remained strong and has been supplemented by growth in
other areas. We have reported consistently on our positive outlook for our
vitamin D activities and a leading antibody called vitD3.5H10. Revenue from
this product has continued to grow and increasing royalties are now being
generated as customer products (assays for vitamin D deficiency) reach markets
around the world. Bioventix now has thirteen licensees for vitD3.5H10 ranging
from large to small diagnostics companies. We remain optimistic that revenues
from vitD3.5H10 will continue to grow over the next year or so as more
vitD3.5H10-based products reach the market.
We recently announced the conclusion to a license agreement with DIAsource of
Belgium which was effective in removing an element of uncertainty for our
customers and shareholders and allows all parties to continue with developing
business in this area.
We would like to draw attention to three items in the accounts. There is an
exceptional revenue item of £190k which resulted from an internal audit at one
of our licensees that revealed a product code on which back-royalties were owed
for preceding years. The exceptional item of cost featured in the accounts of £
169k covers the preparation for, and listing on the AIM market in London. These
two items are approximately balanced resulting in an insignificant effect on
profits. There is also a new entry in the costs of £79k which relates to the
treatment of staff share options and the "cost" that this attracts under the
Black Scholes model, one of the established mechanisms for such valuations.
Cash balances at 30 June 2014 of £3.351m (2013: £2.585m) were significantly
higher than the previous year despite significantly increased dividend
payments.
The Company remains focused on the creation, development and manufacture of
high affinity sheep monoclonal antibodies (SMAs) for use in diagnostics. Niche
opportunities arise where other antibody technologies available to our
customers fail to deliver the required assay (i.e. test) performance and
results in an opportunity for the company to supply SMAs with superior
properties. We do not foresee a deviation from this focus.
The order of importance with respect to revenues for the year of different
antibodies/analytes in the Bioventix portfolio was: NT proBNP (heart failure);
vitamin D; testosterone; FT3 (thyroid hormone); estradiol; various drugs (eg
THC/cannabis).
Future developments
On-going pipeline development has resulted in new antibodies being supplied to
customers in the form of evaluation samples as follows:
- androstenedione (an androgenic steroid similar to testosterone)
- TSH (thyroid stimulating hormone)
- T4 (thyroxine, a thyroid hormone)
- estriol (an estrogen)
Over the next year, we expect that new antibodies will be added to our
portfolio as follows:
- BNP (similar to NT proBNP for heart failure testing)
- p24 (part of HIV testing protocols)
- PTH (parathyroid hormone testing)
Another route to pipeline development comes from sponsored antibody creation
projects whereby customers pay for antibody creation in return for exclusive
use of the antibodies created. We have had one such project during the last
year which was for a large multinational healthcare company in the field of
near-patient therapeutic drug monitoring. This proceeded well technically and
we are optimistic that this technical success will lead to further development
and revenue.
We have also recently started another new sponsored project in the field of
infectious disease.
The natural dynamics of product development and launch at our customers imposes
a delay of approximately two to five years between delivering evaluation
samples to customers and possible product launches by such customers.
Our core customer base consists of five large multinational diagnostics
companies though the company is expanding its influence in "second tier"
companies, often through our vitamin D antibody.
We remain cautiously optimistic about growth prospects in China. There are
rapidly emerging Chinese customers and this represents a growth opportunity.
Business development in China does present challenges but we expect that the
quality of our antibodies will help the company meet its objectives.
Over the previous years, the Board has followed a cautious dividend policy that
embraces continuity in the absence of special dividends. It is the intention of
the Board to continue with this policy into the future, albeit from a higher
base level.
The new higher base level was initiated with the increased first interim
dividend of 9.6p per ordinary share (2013: 4.84p) announced with the interim
results in spring 2014.
We are pleased to declare a second interim dividend of 14.4p per Ordinary
share. This gives a total for the year of 24p which completes the step up to a
higher base level.
The shares will be marked ex-dividend on 16th October 2014 and the dividend
will be paid on 31st October 2014 to shareholders on the register at close of
business on 17th October 2014..
There has been significant change in the composition of the Bioventix team over
the last two years. We thank members of the team who have left and welcome new
members to the team. The changes have been achieved without loss of know-how or
capability and this is a reflection of the quality of the new staff together
with the patience and loyalty of leaving and retiring staff.
The continued excellent performance of the company in a globally competitive
market for antibodies is very satisfying. Our sheep monoclonal antibody
technology continually delivers performance antibodies to our customers.
However, the operation of the antibody technology is made possible by the
efforts of our expert staff and we would like to thank them for their
remarkable achievements over the last year.
For further information please contact:
Bioventix plc
Peter Harrison
Chief Executive Officer Tel: 01252 728 001
finnCap Ltd
Geoff Nash/Simon Hicks
Steve Norcross
Corporate Finance
Corporate Broking Tel: 020 7220 0500
About Bioventix plc:
Bioventix (www.bioventix.com) specialises in the development and commercial
supply of high-affinity monoclonal antibodies with a primary focus on their
application in clinical diagnostics, such as in automated immunoassays used in
blood testing. The antibodies created at Bioventix are generated in sheep and
are of particular benefit where the target is present at low concentration and
where conventional monoclonal or polyclonal antibodies have failed to produce a
suitable reagent. Bioventix currently offers a portfolio of antibodies to
customers for both commercial use and R&D purposes, for the diagnosis or
monitoring of a broad range of conditions, including heart disease, cancer,
fertility, thyroid function and drug abuse. Bioventix currently supplies
antibody products and services to the majority of multinational clinical
diagnostics companies. Bioventix is based in Farnham, UK and its shares are
traded on AIM under the symbol BVXP.
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2014
2014 2013
Note £ £
Turnover 3,345,629 2,706,436
Back dated royalty income 189,729 -
TURNOVER 1,2 3,535,358 2,706,436
Cost of sales 1,2 (302,865) (188,328)
GROSS PROFIT 3,232,493 2,518,108
Administrative expenses (860,966) (708,697)
Exceptional costs of listing on AIM (169,400)
Total administrative expenses (1,030,366) (708,697)
OPERATING PROFIT 2,202,127 1,809,411
Interest receivable and similar income 28,584 12,043
Interest payable and similar charges (104) (97)
PROFIT ON ORDINARY ACTIVITIES BEFORE 2,230,607 1,821,357
TAXATION
Tax on profit on ordinary activities 3 (415,178) (299,903)
PROFIT FOR THE FINANCIAL YEAR 1,815,429 1,521,454
Earnings per share: 5
Basic 36.09p 30.28p
Diluted 35.42p 30.28p
Basic adjusted 36.53p
- Basic diluted 35.86p
All amounts relate to continuing operations.
There were no recognised gains and losses for 2014 or 2013 other than those
included in the Profit and loss account.
BALANCE SHEET
AS AT 30 JUNE 2014
2014 2013
£ £ £ £
FIXED ASSETS
Intangible assets 10,000
Tangible assets 419,743 438,766
419,743 448,766
CURRENT ASSETS
Stocks 164,107 148,530
Debtors 1,831,748 1,329,362
Cash at bank and in hand 3,351,479 2,585,506
5,347,334 4,063,398
CREDITORS: amounts falling due (530,913) (299,737)
within one year
NET CURRENT ASSETS 4,816,421 3,763,661
TOTAL ASSETS LESS CURRENT LIABILITIES 5,236,164 4,212,427
PROVISIONS FOR LIABILITIES
Deferred Tax - (7,602)
NET ASSETS 5,236,164 4,204,825
CAPITAL AND RESERVES
Called up share capital 252,210 251,269
Share premium account 57,768 -
Capital redemption reserve 1,231 1,231
Profit and loss account 4,924,955 3,952,325
SHAREHOLDERS' FUNDS 5,236,164 4,204,825
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2014
2014 2013
£ £
Net cash flow from operating activities 1,765,290 1,341,108
Returns on investments and servicing of 28,480 11,946
finance
Taxation (163,145) (269,040)
Capital expenditure and financial (1,909) (21,331)
investment
Equity dividends paid (921,452) (656,315)
CASH INFLOW BEFORE FINANCING 707,264 406,368
Financing 58,709 - -
INCREASE IN CASH IN THE YEAR 765,973 406,368
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT
FOR THE YEAR ENDED 30 JUNE 2014
2014 2013
£ £
Increase in cash in the year 765,973 406,368
MOVEMENT IN NET DEBT IN THE YEAR 765,973 406,368
Net funds at 1 July 2013 2,585,506 2,179,138
NET FUNDS AT 30 JUNE 2014 3,351,479 2,585,506
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
1. ACCOUNTING POLICIES
Basis of preparation of financial statements
The financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.
2. TURNOVER
An analysis of turnover by class of business is as follows:
2014 2013
£ £
Royalty and licence fee income 2,759,599 2,051,643
Product revenue and R&D income 775,759 654,793
3,535,358 2,706,436
The geographical split of turnover is:
2014 2013
£ £
United Kingdom 114,555 95,895
Other EU 1,566,702 1,309,774
USA 1,577,690 1,020,956
Rest of the World 276,411 279,811
Total 3,535,358 2,706,436
3. TAXATION
2014 2013
£ £
Analysis of tax charge in the year
Current tax (see note below)
UK corporation tax charge on profit 434,176 302,221
for the year
Adjustments in respect of prior - (3,204)
periods
Total current tax 434,176 299,017
Deferred tax (see note 14)
Origination and reversal of timing (18,998) 886
differences
Tax on profit on ordinary activities 415,178 299,903
Factors affecting tax charge for the year
The tax assessed for the year is lower than(2013 - lower than) the standard
rate of corporation tax in the UK of 21%(2013 - 23%). The differences are
explained below:
2014 2013
£ £
Profit on ordinary activities before 2,230,607 1,821,357
tax
Profit on ordinary activities 468,427 418,912
multiplied by standard rate of
corporation tax in the UK of 21%(2013 -
23%)
Effects of:
Expenses not deductible for tax 52,163 300
purposes, other than goodwill
amortisation and impairment
Depreciation for year in excess of 3,534 472
capital allowances
Refunded after uplifted research and - (3,204)
development claims
Tax deduction arising from exercise of (13,080) -
employee options
Other differences leading to an 28,971 9,552
increase (decrease) in the tax charge
Research and development enhanced (105,839) (127,015)
expenditure relief
Current tax charge for the year (see 434,176 299,017
note above)
Factors that may affect future tax charges
The standard rate of corporation tax will reduce to 20% from 1 April 2015. This
will therefore reduce the future tax liabilities accordingly, as well as
affecting the deferred tax balance.
The know how was acquired in December 2003, and the company continues to derive
economic benefit from it. The Directors considered it to be appropriate to
amortise the know how over its estimated economic life of 10 years.
4. DIVIDENDS
2014 2013
£ £
Dividends paid on equity capital 921,452 656,315
A dividend of 14.49 per share has been declared following the year end. This
equated to £726,365.
5. EARNINGS PER SHARE
The weighted average number of shares in issue for both the basic earnings per
share calculations is 5,032,247 (2013 5,025,385) and for both the diluted
earnings per share, assuming the exercise of all share options is 5,126,718
(2013 5,025,385).
The calculation of adjusted earnings per share, on profit after tax from
continuing activities, is based on the profit for the period of £1,815,429,
after adding back AIM listing costs of £169,400 and deducting back dated
royalty income of £189,729, together with the associated taxation adjustment to
reflect the underlying profit. Based on the weighted average number of shares
in issue during the year of 5,032,247 (2013 5,025,385) the basic earnings per
share is 36.52p (2013 30.28p). The diluted earnings per share is based on
5,126,718 shares (2013 5,025,385) and is 35.85p (2013 30.28p)
The calculation of the basic earnings per share is based on the profit for the
period of £1,746,912 (2013 £1,521,454) divided by the weighted average number
of shares in issue of 5,032,247 (2013 5,025,385), the basic earnings per share
is 36.08p (2013 (30.28p). The diluted earnings per share, assuming the exercise
of all of the share options is based on 5,126,718 (2013 5,025,385) shares and
is 35.41p (2013 30.28p).
6. SHARE BASED PAYMENTS
During the year the company operated an Approved Share Option Scheme (the
"Option Scheme"), to incentivise employees.
The company have applied the requirements of FRS 20 Share-based Payment to all
the options granted. The Option Scheme provides for a grant price equal to the
market value of the Company's shares on the date of the grant, as agreed with
HMRC Shares and Assets Valuation Division.
The contractual life of an option is 10 years from the date of grant. Options
granted become exercisable on the third anniversary of the date of grant.
Exercise of an option is normally subject to continued employment, but there
are also considerations for good leavers. All share based remuneration is
settled in equity shares.
On 7 February 2014, 2 employees exercised their options on 12,411 ordinary
shares of £0.05 each, at a price of £3.12 per share. The difference between the
total consideration received of £38,722.32 and the nominal value of the shares
of £620.55, has been transferred to the share premium account.
On 10 March 2014, 1 employee exercised their options on 6,406 ordinary shares
of £0.05 each, at a price of £3.12 per share. The difference between the total
consideration received of £19,986.72 and the nominal value of the shares of £
320.30, has been transferred to the share premium account.
The share option cost in relation to the options exercised during the year, and
also those that are to be exercised by a good leaver, amounted to £38,319 and
this amount has been charged to the profit and loss account for the year ended
30 June 2014.
At 30 June 2014, 80,048 share options of £3.12 and 14,424 options of £6.40 were
outstanding. The number of staff holding share options at 30 June 2014 was 10.
The share options have been issued to underpin staff service conditions.
There were 98,865 options granted on 4 July 2013, when the share price was £
3.12. Of these 18,817 have been exercised as noted above, and 6,729 need to be
exercised or will lapse in the coming year. The Fair Value of the remaining
73,319 options, based on the Black Scholes model was £1.50 based on a risk-free
interest rate of 2.47% and a volatility of 33.82%. The options are exercisable
on or after 4 July 2016. A share option charge of £36,358 has been made in the
year ended 30 June 2014.
The 14,424 options were granted on 25 March 2014, when the share price was £
6.40. The Fair Value of these options, based on the Black Scholes model was £
3.08 based on a risk-free interest rate of 2.47% and a volatility of 33.82%.
The options are exercisable on or after 25 March 2017. A share option charge of
£3,976 has been made in the year ended 30 June 2014.
Expected volatility was based on past volatility since the shares have been
listed on AIM.
7. PUBLICATION OF NON-STATUORY ACCOUNTS
The financial information set out in this preliminary announcement does not
constitute the Group's financial statements for the year ended 30 June 2014 and
the year ended 30 June 2013.
The financial statements for the year ended 30 June 2013 have been delivered to
the Registrar of Companies. The financial statements for the year ended 30 June
2014 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting. The auditors' report on both accounts was unqualified,
did not include references to any matters to which the auditors drew attention
by way of emphasis without qualifying their report and did not contain
statements under sections 498(2) or (3) of the Companies Act 2006.
The audited financial statements of Bioventix plc for the period ended 30 June
2014 are expected to be posted to shareholders shortly, will be available to
the public at the Company's registered office, 7 Romans Business Park, East
Street, Farnham, Surrey, GU9 7SX and available to view on the Company's website
at www.bioventix.com once posted.
8. ANNUALGENERALMEETING
The Annual General Meeting will be held at 4.00pm on Wednesday 3 December 2014
at the Company's registered office, 7 Romans Business Park, East Street,
Farnham, Surrey, GU9 7SX.
END
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