REG-Bioventix Plc: Results for the year ended 30 June 2019
21/10/2019 07:05
Bioventix plc
(“Bioventix” or “the Company”)
Results for the year ended 30 June 2019
Bioventix plc (BVXP), a UK company specialising in the development and
commercial supply of high-affinity monoclonal antibodies for applications in
clinical diagnostics, announces its audited results for the year ended 30 June
2019.
Highlights:
* Revenue up 6% to £9.3 million
* Profit before tax up 1% to £7.0 million
* Cash down £0.5 million to £6.5 million
* Second interim dividend of 43p per share (2018: 36p)
* Special dividend of 47p per share (2018: 55p)
Introduction and Technology
Bioventix creates and supplies antibodies for use on blood-testing machines
that are used in hospitals and other labs around the world. These
blood-testing machines are supplied by large multinationals such as Roche
Diagnostics, Siemens Healthineers, Abbott Diagnostics & Beckman Coulter.
Antibody-based tests are used to diagnose many different conditions in the
fields of heart disease, thyroid function, fertility, infectious disease,
cancer etc. Bioventix makes antibodies using our sheep monoclonal antibody
(SMA) technology for supply to diagnostic companies for subsequent manufacture
into reagent packs that are used on the blood-testing machines. Our antibodies
are preferred for use if they confer an improved performance when compared to
other antibodies available to the machine manufacturers, which are often made
in their own antibody creation labs.
Testosterone testing is a good example of a hormone test in which a Bioventix
antibody facilitates an improvement. Testosterone tests sold by a number of
customers using our 6A3 antibody enable reliable testing of testosterone
levels not only in men, but also in women and children where testosterone
levels are much lower.
We currently sell a total of around 10 grams of purified physical antibody per
year which is mostly exported and charged in $/mg and Euro/mg. In addition to
revenues for physical antibody supplies, the sale by our customers of
diagnostic products (based on our antibodies) to their downstream end-users
attracts a modest royalty payable to Bioventix. These downstream royalties
currently account for approximately 70% of our annual revenue.
Bioventix has own-risk antibody projects which results in our complete freedom
to commercialise the antibodies produced. We also engage in contract antibody
creation projects where customers supply materials, know-how and funding which
results in antibodies that can only be commercialised with the partner
company. In both cases, after initiation of a new project, it takes around a
year for our scientists to create a panel of purified antibodies for
evaluation by our customers. The evaluation process at customers’ labs
generally requires the fabrication of prototype reagent packs which can be
compared to other tests (eg the customer’s existing sales test or perhaps
another “gold standard” method) on the assay platform being considered.
The process of subsequent development thereafter at our customers can take
many years before registration or approval (eg from the US FDA or EU
authorities) is obtained and products can be sold to the benefit of the
customers – and Bioventix - through the agreed sales royalty. This does mean
that there is a gap of 4-10 years between our own research work and receipt by
Bioventix of royalty revenue from product sales. It does also mean however,
that after having achieved approval of an accurate diagnostic test using a
Bioventix antibody, there is a natural continuity of use as a result of a
reluctance by a customer to change from one antibody to another.
Another consequence of the approval process is that the antibodies discussed
in the revenue review below for the current accounting period were created
many years ago. Indeed, growth over the next few years will come from research
work already carried out. By the same dynamics, the current research work
active at our labs now is more likely to influence sales in the period
2023-2030.
2018/19 Financial Results
We are pleased to report our results for the financial year ended 30 June
2019. Revenues for the year increased by 16% to £9.29 million (2017/18:
£7.98 million, excluding a back-royalty of £772k described in detail last
year). This revenue increase, when coupled to a modest increase in costs has
resulted in increased profits before tax of £6.97 million, 14% up on the
2017/18 figure of £6.09 million (again, excluding the back-royalty above).
Despite increased dividend distribution, cash balances at the year-end stood
at £6.5 million.
Our most significant revenue stream continues to come from the vitamin D
antibody called vitD3.5H10. This antibody is used by a number of small, medium
and large diagnostic companies around the world for use in vitamin D
deficiency testing. Sales of vitD3.5H10 increased by 27% to £4.3 million
during the year. Once again, sales have surpassed our expectations. Despite
this pleasing news, we are increasingly sure that price pressure
(i.e. $/test prices achieved in the downstream market) is balancing the
increase in market volume leading to a flattening total market in US Dollar
terms. This is clearly evidenced by a number of our vitamin D customer revenue
streams which, after a period of significant growth now appear to have reached
a plateau.
An element of the growth in sales this year has come from certain individual
customers who appear to be performing well in the downstream market with our
antibody. Diazyme (San Diego, US) have made progress with their vitamin D
assay which has the attractive feature of being run on general “chemistry”
analysers. Boditech (South Korea) is another Bioventix customer who use the
vitD3.5H10 antibody and has achieved significant success in the growing Asian
vitamin D market with their vitamin D assay.
Sales of some other established “core” antibodies also enjoyed increased
sales in the year. These are listed below together with the respective
percentage increase/decrease from 2017/18:
- NT-proBNP: approximately £ 1.25M (+19%) [note: expires July
2021]
- testosterone: approximately £ 0.80M (+23%);
- T3: approximately £ 0.64M (+40%);
- drug-testing antibodies: approximately £ 0.49M (-24%);
- progesterone: approximately £ 0.47 (+18%);
- estradiol: approximately £ 0.33M (+14%)
The increase in most of these core antibodies that are sold to a number of
customers in many countries does not have a single explanation over and above
the 5-10% increase in the global diagnostics industry that is reported by
third party analysts.
We have reported previously on the importance of our troponin project with
Siemens Healthineers and troponin-related revenues via another separate
technology sub-license. Total troponin sales during the reporting period were
£120k. Whilst sales have materialised during the year, we are still in the
early stages of product roll-outs for the new high sensitivity troponin assays
support by SMAs. We have no reason to question our belief that these assays
will generate significant value into the future and we look forward to
continuing growth in the current financial year.
Our shipments of physical antibody to China continued to increase. Some sales
are made directly but the majority are made through five appointed
distributors. We are increasingly optimistic that these physical antibody
sales will result in additional royalty payments which already flow in modest
terms.
As with previous reporting periods, our revenues continue to be dominated by
US Dollars and Euros. We have commented in recent reports on the effect of
exchange rates on our revenues in the absence of any hedging mechanisms. We
have no current plans to institute any hedging mechanisms and therefore any
future changes in exchange rates, up or down will impact our reported Sterling
revenues accordingly.
The cost of sales has been influenced (ie increased) to some extent by a
reduction in antibody stocks. This is a transient effect that should be
reversed during 2019/20 of approximately £200k on external contract chemistry
services linked to the biotin and pollution projects described below. This
level of expenditure will be maintained in 2019/20 reflecting continued
activity with these research projects. All such research costs appear in full
in the profit and loss account as there is no capitalisation of these costs.
Cash Flows and Dividends
The strong performance of the business during the year has resulted in cash
balances of £6.5 million despite increased dividend distribution during the
year. Over previous years, the Board has followed a cautious dividend policy
that embraces continuity and it is the general intention of the Board to
continue with this policy into the future. For the current year, the Board is
pleased to announce a second interim dividend of 43 pence per share which,
when added to the first interim dividend of 30 pence per share makes a total
of 73 pence per share for the current year.
Our current view is that a cash balance of approximately £5 million is
sufficient to facilitate operational and strategic agility with respect to
possible corporate or technological opportunities that could arise in the
foreseeable future. On this occasion, we have decided to distribute some
surplus cash that is in excess of anticipated needs and we are pleased to
announce a special dividend of 47 pence per share.
Accordingly, dividends totalling 90 pence per share will be paid in November
2019. The shares will be marked ex-dividend on 31 October 2019 and the
dividend will be paid on 15 November 2019 to shareholders on the register at
close of business on 1 November 2019.
Research and Future developments
As mentioned above, we expect that the commercial development of the new
troponin assays will have a significant influence on Bioventix sales in the
next few years. There are no antibodies in the future pipeline that are
comparable to troponin in clear potential value and the ability to influence
revenues in the next few years.
We have undertaken a range of research projects over the previous few years
and have attempted to define these in terms of value and probability of
success in the tables below:
- Increasing potential value high Secretoneurin (CardiNor) Amyloid (Pre-Diagnostics) MyC (King’s/St Thomas’s) Pollution monitoring
medium Biotin (own-risk) virus (contract) T4 (thyroxine)
Low thyroglobulin (contract) Vitamin (contract) Cancer (contract)
Low Medium high
Increasing probability of success -
At our lab, we have reached a pause point in our work with secretoneurin and
have transferred a series of antibodies and assay protocols to our partners at
CardiNor (Oslo) and their Scandinavian collaborators. We await news in 2020 of
their work to validate secretoneurin as a useful cardiac biomarker.
Work on amyloid beta continues in our lab and we expect to spend around
another year making antibodies and constructing assays for the testing of
amyloid beta fragments in human samples. Our partners at Pre-Diagnostics
(coincidentally, also in Oslo) and their clinical collaborators are performing
work to identify the utility of these antibodies and assays in dementia
diagnostics. We made a further investment in Pre-Diagnostics of approximately
£100k during the year and a further £200k shortly after the year-end.
Biotin is a vitamin supplement that is widely available and has been
associated by some people with claims relating to hair and skin health. Biotin
is also part of a “chemical Velcro” that is used in assay formats by some
of our customers. It has become clear that high dose consumption of these
biotin supplements can result in aberrant results from some clinical assays
and a solution to this problem could have value. During the year, we have
(through external chemistry contractors) made progress in synthesising the
reagents required to support antibody creation. The first antibodies are
emerging from this pipeline and should be delivered to candidate customers
before the end of the calendar year. We believe that the largest potential
customer for these antibodies has solved their particular biotin problem
through internal means and no longer represent a sales opportunity for
Bioventix. However, we know that other customers exist reassuring us that a
modest potential market exists for these biotin interference products should
we find a technical solution.
A new project that was initiated during the year relates to air pollution.
Currently, atmospheric pollution is monitored using static air analysers but
direct human exposure or “biomonitoring” is not routinely performed as no
convenient tests exist. We are currently making antibodies and prototype tests
that could be used in such direct human exposure biomonitoring. This project
is outside our normal clinical focus but we speculate that human pollution
biomonitoring could become significant in the years to come as populations
become increasingly aware of the impact of pollution on health.
Regarding our core SMA antibody technology, we have successfully generated
superior antibodies over the last 10-15 years and these antibodies are now in
routine use at our customers. The antibody technology landscape has evolved
over this time period. We are aware that rabbit monoclonal technology – a
competitive antibody technology – does exist at some of our customers labs
and this is likely to have resulted in some lost opportunities for our SMA
technology. In addition, the steady development of “synthetic” antibody
technology (known in the industry as “library” or “display”
technology”) has continued. This technology is perhaps not so directly
competitive but is useful for targets which are fragile and liable to
dissociation upon immunisation into sheep.
We continue to be aware of such technology developments and shape our research
efforts accordingly into the future.
The Bioventix Team
The composition of the Bioventix team has remained relatively stable over the
year facilitating excellent performance and know how retention. The total
head-count of 12 full-time equivalents is expected to remain largely unchanged
as this adequately serves our manufacturing and research needs.
Starting towards the end of the financial year and continuing during Autumn
2019, we have embarked on a modest expansion of the production and research
labs. Together with furniture and lab equipment upgrades, an investment of
approximately £300k will be made in the Farnham facility, demonstrating our
long-term commitment to the site.
The continued outstanding performance of the Company in a globally competitive
market for antibodies is very satisfying. Our sheep monoclonal antibody
technology continually delivers high 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.
Conclusion
We are delighted to be able to report such positive news for the current year
which is in line with the Board’s expectations. Looking ahead to the future,
we keenly anticipate the roll-out of high sensitivity troponin assays and
modest growth from additional vitamin D and other antibody sales and
royalties. Beyond that, growth will be linked not only to the troponin project
but also our continued research activities as we look to seed additional
projects that will germinate in the period 2025/2030 to create additional
shareholder value.
For further information please contact:
Bioventix plc Peter Harrison Chief Executive Officer Tel: 01252 728 001
finnCap Ltd Geoff Nash/Simon Hicks Alice Lane Corporate Finance ECM 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.
The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014.
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019
2019 2018
£ £
Turnover 9,290,029 7,979,217
Back dated royalty income - 772,391
Total turnover 9,290,029 8,751,608
Cost of sales (875,089) (573,204)
Gross profit 8,414,940 8,178,404
Administrative expenses (1,268,937) (1,177,711)
Share option charge (133,490) (136,127)
Difference on foreign exchange (99,559) (71,901)
Research and development tax credit 17,906 40,223
Operating profit 6,930,860 6,832,888
Interest receivable and similar income 34,628 33,825
Interest payable and expenses - (15)
Profit before tax 6,965,488 6,866,698
Tax on profit (1,103,825) (1,203,351)
Profit for the financial year 5,861,663 5,663,347
Total comprehensive income for the year 5,861,663 5,663,347
Earnings per share:
2019 2018
Basic 114.04 110.21
Diluted 112.12 108.31
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019
2019 2018
£ £
Fixed assets
Tangible assets 514,821 497,802
Investments 388,377 291,424
903,198 789,226
Current assets
Stocks 239,295 283,093
Debtors: amounts falling due within one year 3,933,915 3,816,790
Cash at bank and in hand 6,537,322 6,986,514
10,710,532 11,086,397
Creditors: amounts falling due within one year (756,573) (838,432)
Net current assets 9,953,959 10,247,965
Total assets less current liabilities 10,857,157 11,037,191
Provisions for liabilities
Deferred tax (30,854) (26,225)
(30,854) (26,225)
Net assets 10,826,303 11,010,966
Capital and reserves
Called up share capital 257,134 256,934
Share premium account 435,908 395,108
Capital redemption reserve 1,231 1,231
Profit and loss account 10,132,030 10,357,693
10,826,303 11,010,966
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2018 256,934 395,108 1,231 10,357,693 11,010,966
Comprehensive income for the year
Profit for the year - - - 5,861,663 5,861,663
Total comprehensive income for the year - - - 5,861,663 5,861,663
Dividends: Equity capital - - - (6,220,816) (6,220,816)
Shares issued during the year 200 40,800 - - 41,000
Share option charge - - - 133,490 133,490
Total transactions with owners 200 40,800 - (6,087,326) (6,046,326)
At 30 June 2019 257,134 435,908 1,231 10,132,030 10,826,303
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2017 256,934 395,108 1,231 9,491,347 10,144,620
Comprehensive income for the year
Profit for the year - - - 5,663,347 5,663,347
Total comprehensive income for the year - - - 5,663,347 5,663,347
Dividends: Equity capital - - - (4,933,128) (4,933,128)
Share option charge - - - 136,127 136,127
Total transactions with owners - - - (4,797,001) (4,797,001)
At 30 June 2018 256,934 395,108 1,231 10,357,693 11,010,966
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019
2019 2018
£ £
Cash flows from operating activities
Profit for the financial year 5,861,663 5,663,347
Adjustments for:
Depreciation of tangible assets 67,499 58,498
Loss on disposal of tangible assets - 353
Interest paid - 15
Interest received (34,628) (33,825)
Taxation charge 1,103,825 1,203,351
Decrease/(increase) in stocks 43,797 (56,918)
(Increase) in debtors (117,124) (509,732)
Increase in creditors 26,047 27,237
Corporation tax (paid) (1,207,102) (566,356)
Share option charge 133,490 136,127
Net cash generated from operating activities 5,877,467 5,922,097
Cash flows from investing activities
Purchase of tangible fixed assets (84,518) (107,591)
Sale of tangible fixed assets - 250
Purchase of unlisted and other investments (96,953) (95,864)
Interest received 34,628 33,825
Net cash from investing activities (146,843) (169,380)
Cash flows from financing activities
Issue of ordinary shares 41,000 -
Dividends paid (6,220,816) (4,933,128)
Interest paid - (15)
Net cash used in financing activities (6,179,816) (4,933,143)
Net (decrease)/increase in cash and cash equivalents (449,192) 819,574
Cash and cash equivalents at beginning of year 6,986,514 6,166,940
Cash and cash equivalents at the end of year 6,537,322 6,986,514
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand 6,537,322 6,986,514
6,537,322 6,986,514
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
1. Accounting policies
1.1 Basis of preparation of financial statements
The financial statements have been prepared under the historical cost
convention unless otherwise specified within these accounting policies and in
accordance with Financial Reporting Standard 102, the Financial Reporting
Standard applicable in the UK and the Republic of Ireland and the Companies
Act 2006.
The preparation of financial statements in compliance with FRS 102 requires
the use of certain critical accounting estimates. It also requires management
to exercise judgment in applying the Company's accounting policies.
The following principal accounting policies have been applied:
1.2 Revenue
Turnover is recognised for product supplied or services rendered to the extent
that it is probable that the economic benefits will flow to the Company and
the turnover can be reliably measured. Turnover is measured as the fair value
of the consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes. The following criteria determine when
turnover will be recognised:
Direct sales
Direct sales are recognised at the date of dispatch.
R&D income
Subcontracted R&D income is recognised based upon the stage of completion at
the year-end.
Licence revenue and royalties
Annual licence revenue is recognised, in full, based upon the date of the
invoice, and royalties are accrued over the period to which they relate.
Revenue is recognised based on the returns and notifications received from
customers and in the event that subsequent adjustments are identified, they
are recognised in the period in which they are identified.
1.3 Foreign currency translation
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the
closing rate. Non-monetary items measured at historical cost are translated
using the exchange rate at the date of the transaction and non-monetary items
measured at fair value are measured using the exchange rate when fair value
was determined.
1.4 Interest income
Interest income is recognised in the Statement of comprehensive income using
the effective interest method.
1.5 Finance costs
Finance costs are charged to the Statement of comprehensive income over the
term of the debt using the effective interest method so that the amount
charged is at a constant rate on the carrying amount. Issue costs are
initially recognised as a reduction in the proceeds of the associated capital
instrument.
1.6 Pensions
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined
contribution plan is a pension plan under which the Company pays fixed
contributions into a separate entity. Once the contributions have been paid
the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of
comprehensive income when they fall due. Amounts not paid are shown in
accruals as a liability in the Statement of financial position. The assets of
the plan are held separately from the Company in independently administered
funds.
1.7 Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is
recognised in the Statement of comprehensive income, except that a charge
attributable to an item of income and expense recognised as other
comprehensive income or to an item recognised directly in equity is also
recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws
that have been enacted or substantively enacted by the reporting date in the
countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that
have originated but not reversed by the Statement of financial position date,
except that:
* The recognition of deferred tax assets is limited to the extent that it is
probable that they will be recovered against the reversal of deferred tax
liabilities or other future taxable profits; and
* Any deferred tax balances are reversed if and when all conditions for
retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences
except in respect of business combinations, when deferred tax is recognised on
the differences between the fair values of assets acquired and the future tax
deductions available for them and the differences between the fair values of
liabilities acquired and the amount that will be assessed for tax. Deferred
tax is determined using tax rates and laws that have been enacted or
substantively enacted by the reporting date.
1.8 Research and development
Research and development expenditure is written off in the year in which it is
incurred.
1.9 Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less
accumulated depreciation and any accumulated impairment losses. Historical
cost includes expenditure that is directly attributable to bringing the asset
to the location and condition necessary for it to be capable of operating in
the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their
residual value over their estimated useful lives on the following basis:
Freehold property - 2% straight line
Plant and equipment - 25% reducing balance
Motor Vehicles - 25% straight line
Equipment - 25% straight line
1.10 Valuation of investments
Investments in unlisted Company shares, whose market value can be reliably
determined, are remeasured to market value at each balance sheet date. Gains
and losses on remeasurement are recognised in the Statement of comprehensive
income for the period. Where market value cannot be reliably determined, such
investments are stated at historic cost less impairment.
1.11 Stocks
Stocks are stated at the lower of cost and net realisable value, being the
estimated selling price less costs to complete and sell. Cost includes all
direct costs and an appropriate proportion of fixed and variable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is
impaired, the carrying amount is reduced to its selling price less costs to
complete and sell. The impairment loss is recognised immediately in profit or
loss.
1.12 Debtors
Short term debtors are measured at transaction price, less any impairment.
Loans receivable are measured initially at fair value, net of transaction
costs, and are measured subsequently at amortised cost using the effective
interest method, less any impairment.
1.13 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions
repayable without penalty on notice of not more than 24 hours. Cash
equivalents are highly liquid investments that mature in no more than three
months from the date of acquisition and that are readily convertible to known
amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of
bank overdrafts that are repayable on demand and form an integral part of the
Company's cash management.
1.14 Creditors
Short term creditors are measured at the transaction price. Other financial
liabilities, including bank loans, are measured initially at fair value, net
of transaction costs, and are measured subsequently at amortised cost using
the effective interest method.
1.15 Provisions for liabilities
Provisions are made where an event has taken place that gives the Company a
legal or constructive obligation that probably requires settlement by a
transfer of economic benefit, and a reliable estimate can be made of the
amount of the obligation.
Provisions are charged as an expense to the Statement of comprehensive income
in the year that the Company becomes aware of the obligation, and are measured
at the best estimate at the Statement of financial position date of the
expenditure required to settle the obligation, taking into account relevant
risks and uncertainties.
When payments are eventually made, they are charged to the provision carried
in the Statement of financial position.
1.16 Financial instruments
The Company only enters into basic financial instrument transactions that
result in the recognition of financial assets and liabilities like trade and
other debtors and creditors, loans from banks and other third parties, loans
to related parties and investments in non-puttable ordinary shares.
1.17 Dividends
Equity dividends are recognised when they become legally payable. Interim
equity dividends are recognised when paid. Final equity dividends are
recognised when approved by the shareholders at an annual general meeting.
1.18 Employee benefits-share-based compensation
The company operates an equity-settled, share-based compensation plan. The
fair value of the employee services received in exchange for the grant of the
options is recognised as an expense over the vesting period. The total amount
to be expensed over the vesting period is determined by reference to the fair
value of the options granted. At each balance sheet date, the company will
revise its estimates of the number of options are expected to be exercisable.
It will recognise the impact of the revision of original estimates, if any, in
the profit and loss account, with a corresponding adjustment to equity. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options
are exercised.
2. Judgments in applying accounting policies and key sources of estimation
uncertainty
In the application of the company's accounting policies (as described in note
2), management is required to make judgments, estimates and assumptions. These
estimates and underlying assumptions and are reviewed on an ongoing basis.
There were no areas requiring significant management judgment during the year
ended 30 June 2019.
3. Turnover
An analysis of turnover by class of business is as follows:
2019 2018
£ £
Product revenue and R&D income 3,010,496 2,487,049
Royalty and licence fee income 6,279,533 5,492,168
Back dated royalty income - 772,391
9,290,029 8,751,608
2019 2018
£ £
United Kingdom 468,692 619,714
Other EU 1,759,224 1,522,545
Rest of the world 7,062,113 6,609,348
9,290,029 8,751,607
4. Operating profit
The operating profit is stated after charging:
2019 2018
£ £
Depreciation of tangible fixed assets 67,499 58,498
Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements 10,350 10,150
Exchange differences 99,559 71,901
Research and development costs 1,116,210 868,515
5. Taxation
2019 2018
£ £
Corporation tax
Current tax on profits for the year 1,099,196 1,193,240
1,099,196 1,193,240
Total current tax 1,099,196 1,193,240
Deferred tax
Origination and reversal of timing differences 4,629 10,111
Total deferred tax 4,629 10,111
Taxation on profit on ordinary activities 1,103,825 1,203,351
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2018 - lower than) the standard rate of corporation tax in the UK of 19% (2018 - 19%) . The differences are explained below:
2019 2018
£ £
Profit on ordinary activities before tax 6,965,488 6,866,698
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2018 - 19%) 1,323,443 1,304,673
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment 403 284
Capital allowances for year in excess of depreciation (3,390) (9,448)
Research and development tax credit (238,848) (128,131)
Share based payments 17,588 25,864
Other differences leading to an increase in the tax charge 4,629 10,109
Total tax charge for the year 1,103,825 1,203,351
Factors that may affect future tax charges
There were no material factors that may affect future tax charges.
6. Dividends
2019 2018
£ £
Dividends paid 6,220,816 4,933,128
6,220,816 4,933,128
7. Share capital
2019 2018
£ £
Allotted, called up and fully paid
5,142,674 (2018 - 5,138,674-) Ordinary shares of £0.05 each 257,134 256,934
The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company's residual assets.
8. Share based payments
During the year the company operated an Approved Share Option Scheme (the "Option Scheme"), to incentivise employees. The company has applied the requirements of FRS 102 Section 26 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.
Weighted average exercise price (pence) 2019 Number 2019 Weighted average exercise price (pence) 2018 Number 2018
Outstanding at the beginning of the year 13.40 89,938 13.40 89,938
Granted during the year - -
Exercised during the year 10.25 (4,000) -
Outstanding and exercisable at the end of the year 13.50 85,938 13.40 89,938
2019 2018
Option pricing model used Black Scholes Black Scholes
Issue price £3.12-£13.50 £3.12-£13.50
Exercise price (pence) £3.12-£13.50 £3.12-£13.50
Option life 10 years 10 years
Expected volatility 25.15% 25.15%
Fair value at measurement date £1.72-£4.66 £1.72-£4.66
Risk-free interest rate 1.02% 1.02%
Expected volatility was based on past volatility since the shares have been listed on AIM. The expense recognised for share-based payments during the year ended 30 June 2019 was £133,490 (2018 : £136,127). The number of staff and officers holding share options at 30 June 2019 was 15 (2018: 15). The share options have been issued to underpin staff service conditions.
10. Publication of Non-Statutory Accounts
The financial information set out in this preliminary announcement does not
constitute the Group's financial statements for the year ended 30 June 2019.
The financial statements for the year ended 30 June 2018 have been delivered
to the Registrar of Companies. The financial statements for the year ended 30
June 2019 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
2019 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.
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