REG - BioVentix PLC - Results for the year ended 30 June 2023
30/10/2023 07:15
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RNS Number : 6183R BioVentix PLC 30 October 2023
Bioventix plc
("Bioventix" or "the Company")
Results for the year ended 30 June 2023
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
2023.
Highlights:
• Revenue up 9% to £12.82 million (2022: £11.72 million)
• Profit before tax up 9% to £10.13 million (2022: £9.28 million)
• Cash at year end of £5.7 million (30 June 2022: £6.1 million)
• Second interim dividend of 90p per share (2022: 74p)
• Total dividends 152p per share (2022: 152p)
Introduction and Technology
Bioventix creates, manufactures and supplies high affinity sheep monoclonal
antibodies (SMAs) for use in diagnostic applications. Bioventix antibodies
are preferred for use when they confer an improved test performance compared
to other available antibodies.
Most of our antibodies are used on blood-testing machines installed in
hospitals and other laboratories around the world. Bioventix makes
antibodies using our SMA technology for supply to diagnostic companies for
subsequent manufacture into reagent packs used on blood-testing machines.
These blood-testing machines are supplied by large multinational in vitro
diagnostics (IVD) companies such as Roche Diagnostics, Siemens Healthineers,
Abbott Diagnostics & Beckman Coulter. Antibody-based blood tests are
used to help diagnose many different conditions including, amongst others,
heart disease, thyroid function, fertility, infectious disease and cancer.
Testosterone is an example of a blood test where a Bioventix SMA has
facilitated an improved test. In 2003, it became clear that testosterone
tests performed on automated IVD platforms were deficient. Whilst the higher
levels of testosterone in healthy adult males were accurately reported, the
lower levels of testosterone in pre-pubescent boys and women were inaccurately
reported. In 2005, Bioventix created an antibody called testo3.6A3 which was
evaluated by customers during 2006. Evaluations were successful and
following the necessary regulatory approvals, the first testosterone assays
based on testo3.6A3 were launched in 2009. A number of IVD companies now use
this antibody for revised tests that more accurately measure lower levels of
testosterone.
Over the past 18 years, we have created and supplied approximately 20
different SMAs that are used by IVD companies around the world. We currently
sell a total of 15-20 grams of purified physical antibody per year, the vast
majority of which is exported. In addition to revenues from physical
antibody supplies, the sale by our customers of diagnostic products (based on
our antibodies) to their downstream end-users attracts a modest percentage
royalty payable to Bioventix. These downstream royalties currently account
for approximately 70% of our annual revenue.
Bioventix adopts one of two commercial approaches when creating new
antibodies. The first is own-risk antibody creation projects which gives
Bioventix the complete freedom to commercialise the antibodies produced. The
second is contract antibody creation projects in partnership with customers
who supply materials, know-how and funding and to create 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' laboratories generally requires the
fabrication of prototype reagent packs which can be compared to other tests,
for example the customer's existing commercial test or perhaps another "gold
standard" method, on the assay machine platform being considered. The
process of subsequent development thereafter by our customers can take many
years before registration or approval from the relevant authority, for example
the US Food and Drug Administration (FDA) or EU authorities, is obtained and
products can be sold to the benefit of the customers, and of course Bioventix,
through the agreed sales royalty. This does mean that there is a lead time
of 4-10 years between our own research work and the receipt by Bioventix of
royalty revenue from product sales. However, because of the resource
required to gain such approvals, after having achieved approval for an
accurate diagnostic test using a Bioventix antibody, there is a natural
incentive for continued antibody use. This results in a barrier to entry for
potential replacement antibodies which would require at least partial
repetition of the approval process arising on a change from one antibody to
another. This barrier to antibody replacement arises from a combination of
factors driven by the clinical criticality of the test and the potential
consequences of making such a change which include the time and cost to
register any changes required to validate the performance of the replacement
antibody.
Another consequence of the lengthy approval process is that the revenue for
the current accounting period is derived from antibodies created many years
ago. Indeed, revenue growth over the next few years from, for example the
troponin antibodies, will come from research work already carried out more
than ten years ago. By the same dynamics, the current research work active
at our laboratories now is more likely to generate sales in the period
2028-2038.
2022/2023 Financial Results
We are pleased to report our results for the financial year ended 30 June
2023. Revenues for the year increased by 9% to £12.8 million (2021/22:
£11.7 million). Profits before tax for the year also increased by 9% to
£10.1 million (2021/22; £9.3million). Cash balances at the year-end were
£5.7 million (30 June 2022 £6.1 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 7% to £5.8 million
which reflects analysts' expectation for a relatively mature global IVD
market.
Sales of our other core historic antibodies are featured below with the
respective percentage increase/decrease from 2021/22:
- T3 (tri-iodothyronine): £.1.14 million (+23%)
- biotins and biotin blockers: £0.85 million (-5%)
- progesterone: £0.75 million (+21%)
- estradiol: £0.56 million (-6%)
- testosterone: £0.46 million (-3%)
- drug-testing antibodies: £0.40 million (+6%)
Troponin is the preferred biomarker to help diagnose heart attacks. Under an
antibody creation contract previously undertaken with a company subsequently
acquired by Siemens, SMAs were created that facilitated an improved troponin
test that was launched by Siemens in 2017. Total troponin antibody sales
from Siemens Healthineers and another separate technology sub-license
increased by 30% during the year to £1.61 million (2021/22: £1.23 million).
Whilst the percentage growth is less than last year, we have no reason to
doubt that prospective troponin sales in 2024 and beyond will increase in line
with analysts' forecast until June 2032 when contractual payments from our
contract with Siemens will cease.
Our shipments of physical antibody to China continued to increase. Some
sales are made directly but the majority are made through five appointed
distributors. Regulatory approvals for domestic Chinese customers have
considerable lead times but we continue to see modest increases in royalty
payments flowing from these customers. The prospects for further growth in
China are good although we detect pressure on downstream final assay prices
that has resulted from aggressive purchasing on the part of centralised
procurement organisations. This could exert pressure on Bioventix as we
supply relatively high-cost reagents. We also recognise that continued
antibody technology development in China and elsewhere constitutes a
longer-term threat. In addition, relative global geopolitical stability will
be important for the continued trade in technology products such as our
antibodies.
We estimate that between 50% and 60% of our total revenue is either directly
linked to US Dollars via physical product pricing in Dollars or indirectly
linked to US Dollars via royalties based on downstream Dollar sales. The
remainder of the currency split is dominated by Euros and important Asian
currencies. In past year, exchange rates have been relatively stable
compared to the previous 12 months. Our view continues to be that hedging
mechanisms would not, in the longer term, add value and may have the potential
to add risk to our business. Consequently, future movements in exchange
rates may therefore affect our Sterling revenues.
Cash Flows and Dividends
As reported above, the performance of the business during the year generated
cash balances at the year-end of £5.7 million and royalties received during
quarter 3 of 2023 have added to this balance.
The Board has determined that it is appropriate to maintain the established
dividend policy in the immediate future. For the current year, the Board is
pleased to announce a second interim dividend of 90 pence per share which,
when added to the first interim dividend of 62 pence per share makes a total
of 152 pence per share for the current year.
Our view continues to be that maintaining a cash balance of approximately £5
million is sufficient to facilitate operational and strategic agility both
with respect to possible corporate or technological opportunities that might
arise in the foreseeable future. We have therefore decided to distribute
surplus cash in our second interim dividend thereby maintaining our total
distribution to shareholders at 152 pence per share, the same value as that
paid for the previous financial year
Accordingly, a dividend of 90 pence per share will be paid in November 2023.
The shares will be marked ex-dividend on 9 November 2023 and the dividend
will be paid on 24 November 2023 to shareholders on the register at close of
business on 10 November 2023.
Changes in the rate of Corporation Tax came into effect from 1 April 2023
increasing the rate of tax from 19% to 25%. This affected the business for the
last quarter of 2022/23 and will reduce full year cashflows in 2023/24.
Research and Future Developments
Over the next few years, the continued commercial development of the new
troponin assays and their roll out by our customers will have the most
significant influence on Bioventix sales.
We have undertaken a range of new research projects over the previous few
years and in the table below we have illustrated our current view of their
potential value and probability of success:
Increasing potential value high Secretoneurin (CardiNor) Tau (Alzheimer's, own-risk)
Amyloid (Pre-Diagnostics)
medium
Low Industrial biomonitoring (benzene, isocyanates) Pyrene biomonitoring
Low Medium high
Increasing probability of success →
Whilst antibodies in the future pipeline are at stages of testing and
development that do not allow us to make any prediction about their definitive
value and influence on future revenues there has still been encouraging
progress.
Over the last few years, a considerable amount of lab resource has been
allocated to the tau project and Alzheimer's disease (AD) diagnostics. AD is
a complex disease that manifests itself differently across the patient
population. At a cellular level, nerve cells (neurons) become associated
with amyloid (A) plaques that build up outside the neurons. This is followed
by the build-up of tau (T) tangles inside the neurons. These pathological
processes then result in neuronal cell death and the symptoms of
neurodegeneration (N) that accompany this. This "ATN" framework is used by
neurologists to define the disease pathway that progresses many years before
patient symptoms become more obvious.
Recent clinical trials of AD therapeutics have produced remarkable results and
there are now two therapeutic agents (Lecanemab from EISAI Pharma and
Donenamab from Eli Lilly) that whilst not a cure, have been demonstrated to
slow the disease process. Patients presenting early in the ATN pathway
appear to benefit most from therapy and ATN assessments can therefore be used
to screen for patients suitable for therapy and also for monitoring patients
whilst on therapy.
The ATN status of patients can be defined with the use of PET scans using
appropriate amyloid and/or tau contrast agents together with other assays for
biomarkers in cerebral spinal fluid. It would be desirable if such
diagnostic procedures could be replaced or augmented with cheaper convenient
blood tests.
Bioventix has been working with the University of Gothenburg since early 2020
to create new antibodies to tau and to develop prototype assays for use in
AD.
A leading blood biomarker for "A" is a phosphorylated form of tau called
pTau217. A prototype assay from Gothenburg using an SMA has now been
established which has performed well with frozen patient samples from a number
of different cohorts. The "effect size" (AD patients relative to controls)
has been x2-4 which is similar to other leading groups and likely to be
clinically useful. The percentage of false positives and false negatives is
also relatively modest confirming potential clinical utility.
For more scientific detail, see: "A novel ultrasensitive assay for plasma
p-tau217: performance in individuals with subjective cognitive decline and
early Alzheimer's disease", Fernando Gonzalez-Ortiz, Journal of the
Alzheimer's Association, accepted for publication October 2023.
A novel blood-based prototype assay for neurodegeneration (N) using another
Tau SMA has also been developed in Gothenburg. This work clearly supports
the potential utility of this blood test and further work is on-going in
Gothenburg with further publications planned.
For more detailed scientific information, see:
"Brain-derived tau: a novel blood-based biomarker for Alzheimer's disease-type
neurodegeneration", Fernando Gonzalez-Ortiz, BRAIN 2022: 00, and:
"Levels of plasma brain-derived tau and p-tau181 in Alzheimer's disease and
rapidly progressive dementias", Fernando Gonzalez-Ortiz, Journal of the
Alzheimer's Association, accepted for publication October 2023".
Precisely how Alzheimer's therapies will be adopted in the future and how
blood tests will be used to support these therapies will become clearer over
the coming years. It is quite likely that large IVD companies will be part
of this development and we have already sent sample SMAs to some interested
parties, accepting that other tau antibodies and assays already exist.
Expert neurology centres are likely to adopt "research use only" tests in
advance of the availability of other tests through hospital-orientated IVD
companies. The prototype Gothenburg tests are run on Quanterix (Billerica,
MA) machines and so a partnership with Quanterix would be desirable in this
research use field.
Pre-Diagnostics, in Oslo, and their clinical collaborators have two amyloid
beta assays based on Bioventix antibodies available for research use. A
current focus for Pre-Diagnostics is ARIA (amyloid related imaging
abnormality) which is an important side-effect of new anti-amyloid drugs for
Alzheimer's. Pre-Diagnostics assays relate to amyloid metabolism and could
help screen for ARIA vulnerable patients, before or during treatment.
Our partners at CardiNor, also in Oslo, have continued with their work to try
and identify the possible utility of secretoneurin in heart failure patients
and in particular those patients who might be candidates for implantable
cardiac devices (ICDs).
Our pyrene lateral flow system for industrial pollution biomonitoring
completed a second field trial at a UK industrial site during quarter 2 of
2023. This went well and we plan to conduct additional site studies during
2024. The progress of the pyrene project has encouraged us to develop
additional assays for benzene and isocyanates, also in the field of industrial
health and safety. Benzene exposure is of relevance to the petroleum
industry and isocyanates are hazardous chemicals used in the manufacture of
polyurethane paints and plastics. This work will continue into 2024 and
2025.
Future Strategy
We have previously identified diagnostic biomarkers that we believe suit our
antibody technology and have found academic collaborators who have seen merit
in working with Bioventix. The tau project and our collaboration with the
University of Gothenburg is an excellent example of this strategy and we will
seek additional such opportunities in the future.
We will continue to rely on our core SMA antibody creation technology which
consistently helps us to create superior antibodies for our research projects.
We are also incorporating additional newer technologies where such
technologies are helpful to us. We have successfully created "sandwich"
assay formats for pyrene and THC/cannabis using a combination of primary SMA
technology and a secondary synthetic "anti-complex" antibody created using the
"antibody library" technology of a third party. The synergy of the two
technologies provided unique solutions to pyrene and THC/cannabis and we will
seek more such opportunities in the field of small molecule detection.
The Bioventix Team and Facility
The composition of the Bioventix team of 12 full-time equivalents has remained
stable over the year facilitating excellent performance and know-how
retention. The past few years have been a challenging period for everyone
and we are very grateful to the team at Bioventix for their dedication over
this period. This has allowed us to adapt and modify our business to cope
with changing circumstances and to maintain the progress of our business.
Supply chain issues relating to plastics and chemical reagents have eased
considerably since the pandemic but price increases have been imposed by most
suppliers. This has added further incentive to increase the productivity of
our manufacturing processes.
Change of Name of Nominated Adviser and Broker
The Company also announces that its Nominated Adviser (NOMAD) and Broker has
changed its name to Cavendish Capital Markets Limited following completion of
its own corporate merger.
Conclusion and Outlook
We are pleased with our financial results for the year which we believe
reflect steady growth in the use of our established products and the continued
roll-out of the high sensitivity troponin assays.
Excellent technical progress has been made with our research projects and we
anticipate that our pipeline of opportunities will create additional
shareholder value in the later 2020s and 2030s and we look forward to further
progress in the years ahead.
For further information please contact:
Bioventix plc Tel: 01252 728 001
Peter Harrison Chief Executive Officer
Cavendish (NOMAD and broker)
Geoff Nash/Simon Hicks Corporate Finance Tel: 020 7220 0500
Nigel Birks/Harriet Ward ECM
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.
STATEMENT OF COMPREHENSIVE INCOME FOR YEAR ENDED 30 JUNE 2023
2023 2022
Note £ £
Turnover 4 12,816,225 11,719,271
Cost of sales (828,410) (710,446)
Gross profit 11,987,815 11,008,825
Administrative expenses (1,768,950) (1,605,446)
Difference on foreign exchange (36,679) 92,856
Research and development tax credit 25,243 22,160
Share option charge (174,080) (244,871)
Operating profit 5 10,033,349 9,273,524
Interest receivable and similar income 8 101,094 4,804
Interest payable and expenses 9 - (303)
Profit before tax 10,134,443 9,278,025
Tax on profit 10 (1,762,202) (1,603,874)
Profit for the financial year 8,372,241 7,674,151
Other comprehensive income for the year
Total comprehensive income for the year 8,372,241 7,674,151
Earnings per share:
2023 2022
160.63 147.32
Basic (pence per share)
Diluted (pence per share) 158.28 145.90
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023
2023 2022
Note £ £
Fixed assets
Tangible assets 12 575,726 694,370
Investments 13 610,039 610,039
1,185,765 1,304,409
Current assets
Stocks 14 565,366 461,815
Debtors: amounts falling due within one year 15 5,814,761 5,224,717
Cash at bank and in hand 16 5,715,819 6,126,650
12,095,946 11,813,182
Creditors: amounts falling due within one year
17 (1,199,714) (1,252,165)
Net current assets 10,896,232 10,561,017
Total assets less current liabilities 12,081,997 11,865,426
Provisions for liabilities
Deferred tax 18 (18,224) (44,276)
(18,224) (44,276)
Net assets 12,063,773 11,821,150
Capital and reserves
Called up share capital 19 260,983 260,467
Share premium account 20 1,471,315 1,332,471
Capital redemption reserve 20 1,231 1,231
Profit and loss account 20 10,330,244 10,226,981
12,063,773 11,821,150
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2023
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2022 260,467 1,332,471 1,231 10,226,981 11,821,150
Comprehensive income for the year
Profit for the year - - - 8,372,241 8,372,241
Dividends: Equity capital - - - (8,443,058) (8,443,058)
Shares issued during the year 516 138,844 - - 139,360
Share option charge - - - 174,080 174,080
Total transactions with owners 516 138,844 - (8,268,978) (8,129,618)
At 30 June 2023 260,983 1,471,315 1,231 10,330,244 12,063,773
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2021 260,467 1,332,471 1,231 10,226,145 11,820,314
Comprehensive income for the year
Profit for the year - - - 7,674,151 7,674,151
Dividends: Equity capital - - - (7,918,186) (7,918,186)
Transfer to/from profit and loss account - - - 244,871 244,871
Total transactions with owners - - - (7,673,315) (7,673,315)
At 30 June 2022 260,467 1,332,471 1,231 10,226,981 11,821,150
STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2023
2023 2022
£ £
Cash flows from operating activities
Profit for the financial year 8,372,241 7,674,151
Adjustments for:
Depreciation of tangible assets 129,227 143,392
Loss on disposal of tangible assets - 17,714
Interest paid - 303
Interest received (101,094) (4,804)
Taxation charge 1,762,202 1,603,874
(Increase) in stocks (103,551) (129,356)
(Increase) in debtors (626,550) (598,752)
(Decrease)/increase in creditors (52,612) 76,347
Corporation tax (paid) (1,751,587) (1,470,634)
Share option charge 174,080 244,871
Net cash generated from operating activities 7,802,356 7,557,106
Cash flows from investing activities
Purchase of tangible fixed assets (10,583) (11,756)
Interest received 101,094 4,804
Net cash from investing activities 90,511 (6,952)
Cash flows from financing activities
Issue of ordinary shares 139,360 -
Dividends paid (8,443,058) (7,918,186)
Interest paid - (303)
Net cash used in financing activities (8,303,698) (7,918,489)
Net (decrease) in cash and cash equivalents (410,831) (368,335)
Cash and cash equivalents at beginning of year 6,126,650 6,494,985
Cash and cash equivalents at the end of year 5,715,819 6,126,650
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand 5,715,819 6,126,650
5,715,819 6,126,650
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
1. General information
Bioventix Plc (04923945), a company creating and manufacturing sheep
monoclonal antibodies, is a public limited company registered in England and
Wales. The Registered Office is 27-28 Eastcastle Street, London, W1W 8DH and
its principal place of business is 7 Romans Business Park, East Street,
Farnham GU9 7SX.
2. Accounting policies
2.1 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 (see note
3).
The following principal accounting policies have been applied:
2.2 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 generally recognised at the date of dispatch unless
contractual terms with customers state that risk and title pass on delivery of
goods, in which case revenue is recognised on delivery.
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 invoice.
Royalties are accrued over period to which they relate and revenue is
recognised based upon returns and notifications received from customers. In
the event that subsequent adjustments to royalties are identified they are
recognised in the period in which they are identified.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
2. Accounting policies (continued)
2.3 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.
2.4 Interest income
Interest income is recognised in profit or loss using the effective interest
method.
2.5 Finance costs
Finance costs are charged to profit or loss 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.
2.6 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 profit or loss 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.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
2. Accounting policies (continued)
2.7 Current and deferred taxation
Current and deferred tax are recognised as an expense or income in the
Statement of Comprehensive Income, except when they relate to items credited
or debited directly to equity, in which case the tax is also recognised
directly in equity. 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 reporting 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.
2.8 Research and development
Research and development expenditure is written off in the year in which it is
incurred.
2.9 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.
Land is not depreciated. Depreciation on other assets is charged so as to
allocate the cost of assets less their residual value over their estimated
useful live
Freehold property - 2%
straight line
Plant and equipment - 25% straight
line
Motor Vehicles - 25%
straight line
Fixtures & Fittings - 25%
straight line
Office equipment - 25%
straight line
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
2. Accounting policies (continued)
2.10 Valuation of investments
Investments in unlisted Company shares, whose market value can be reliably
determined, are remeasured to market value at each reporting 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.
2.11 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.
2.12 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.
2.13 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 twelve
months from the date of acquisition and that are readily convertible to known
amounts of cash with insignificant risk of change in value.
2.14 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.
2.15 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 profit or loss in the year that the
Company becomes aware of the obligation, and are measured at the best estimate
at the reporting 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.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
2. Accounting policies (continued)
2.16 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 ordinary shares.
2.17 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.
2.18 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.
3. 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 are reviewed on an ongoing basis.
Carrying value of Unlisted investments
The Company holds two unlisted investments in companies carrying out research
in identifying biomarkers for diagnosing health conditions. The directors have
reviewed the progress of this research over the last year. In common with much
scientific research there is uncertainty, both in relation to the science and
to the commercial outcome, and no information to be able to reliably calculate
a fair value for these investments. The carrying value of these investments
will continue to be historic cost.
Valuation of Share based payments
The Company operates two share option schemes: an Approved EMI Share Option
Scheme and an Unapproved Share Option Scheme. In calculating the charge to
profit or loss in respect of options granted to employees under these schemes
the Company has applied the requirements of FRS 102 which includes making
estimates for both the expected volatility of the Company's shares and the
risk free interest rate the details of which are shown in Note 21 to the
accounts.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
4. Turnover
An analysis of turnover by class of business is as follows:
2023 2022
£ £
Product revenue and R&D income 4,232,829 3,592,556
Royalty and licence fee income 8,583,396 8,126,715
12,816,225 11,719,271
2023 2022
£ £
United Kingdom 961,904 787,046
European Union 1,604,187 1,327,360
Rest of the world 10,250,134 9,604,865
12,816,225 11,719,271
5. Operating profit
The operating profit is stated after charging:
2023 2022
£ £
Depreciation of tangible fixed assets 129,227 143,392
Fees payable to the Company's auditor and its associates for the audit of the
Company's annual financial statements
25,000 22,000
Exchange differences 36,679 (92,856)
Research and development costs 1,201,398 975,317
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
6. Employees
Staff costs, including directors' remuneration, were as follows:
2023 2022
£ £
Wages and salaries 1,001,959 876,375
Social security costs 119,075 105,337
Share option charge 174,080 244,871
Cost of defined contribution scheme 71,513 34,563
1,366,627 1,261,146
The average monthly number of employees, including the directors, during the
year was as follows:
2023 2022
No. No.
Management and administration
5
5
Scientific
11 11
16 16
7. Directors' remuneration
2023 2022
£ £
Directors' emoluments
412,059 368,996
Company contributions to defined contribution pension schemes
36,890 12,578
448,949 381,574
During the year retirement benefits were accruing to 1
director (2022 - 1) in respect of defined contribution pension
schemes.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
8. Interest receivable
2023 2022
£ £
Other interest receivable
101,094 4,804
101,094 4,804
9. Interest payable and similar expenses
2023 2022
£ £
Other interest payable
- 303
- 303
10. Taxation
Corporation tax
2023 2022
£ £
Current tax on profits for the year
1,788,254
1,637,682
Total current tax
1,788,254 1,637,682
Deferred tax
Origination and reversal of timing differences
(26,052)
(33,808)
Total deferred tax
(26,052) (33,808)
Taxation on profit on ordinary activities 1,762,202 1,603,874
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
10. Taxation (continued)
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2022 - lower than) the standard
rate of corporation tax in the UK of 25% (2022 - 19%). The differences are
explained below:
2023 2022
£ £
Profit on ordinary activities before tax 10,134,443 9,278,025
Profit on ordinary activities multiplied by standard rate of corporation tax
in the UK of 25% (2022 - 19%)
2,533,611 1,762,825
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and
impairment
341 83
Capital allowances for year in excess of depreciation 27,289 27,048
Research and development tax credit (356,784) (198,799)
Share based payments (23,222) 46,525
Deferred tax movement (26,052) (33,808)
Change in tax rate during the year (392,981) -
Total tax charge for the year 1,762,202 1,603,874
Factors that may affect future tax charges
The rate of corporation tax increased from 19% to 25% on 1 April 2023. This
change will increase the tax charge in future years such that, had the change
been effective for in place throughout the current year, it would have
increased by £392,980, from £1,762,202 to £2,155,182.
11. Dividends
2023 2022
£ £
Dividends paid
162 pence per share (2022: 142 pence per share) 8,443,058 7,918,186
8,443,058 7,918,186
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
12. Tangible fixed assets
Freehold propert Plant & Machinery Motor Vehicles Fixtures & Fittings Ofice Equipment
£ £ £
£ £
Cost
At 1 July 2022 475,000
472,107 13,090 407,115
36,610
Additions
- 7,420 -
- 3,163
Disposals
- - -
- (248)
At 30 June 2023 475,000
479,527 13,090 407,115
39,525
Depreciation
At 1 July 2022 149,625
326,064 4,909 205,457
23,497
Charge for the year on
owned assets 7,125
55,962 3,273 58,137
4,730
Disposals
- - -
- (248)
At 30 June 2023 156,750 382,026 8,182 263,594 27,979
Net book value
At 30 June 2023 318,250 97,501 4,908 143,521 11,546
At 30 June 2022 325,375 146,043 8,181 201,658 13,113
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
12. Tangible fixed assets (continued)
Total
£
Cost
At 1 July 2022 1,403,922
Additions 10,583
Disposals (248)
At 30 June 2023 1,414,257
Depreciation
At 1 July 2022 709,552
Charge for the year on owned assets 129,227
Disposals (248)
At 30 June 2023 838,531
Net book value
At 30 June 2023 575,726
At 30 June 2022 694,370
Included within land and buildings is freehold land at cost of £118,750 which
is not depreciated. (2022 -
£118,750).
13. Fixed asset investments
Unlisted Investments
£
Cost
At 1 July 2022
610,039
At 30 June 2023
610,039
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
14. Stocks
2023 2022
£ £
Finished goods and goods for resale 565,366 461,815
565,366 461,815
15. Debtors
2023 2022
£ £
Trade debtors 1,170,512 754,039
Other debtors 501 10,402
Prepayments and accrued income 4,643,748 4,460,276
5,814,761 5,224,717
16. Cash and cash equivalents
2023 2022
£ £
Cash at bank and in hand 5,715,819 6,126,650
5,715,819 6,126,650
Analysis of Net Debt: At 1 July 2022 Cash Flows At 30 June 2023
£ £ £
Cash at bank and in hand 6,126,650 (410,831) 5,715,819
17. Creditors: Amounts falling due within one year
2023 2022
£ £
Trade creditors 77,725 157,280
Corporation tax 709,259 709,098
Other taxation and social security 76,298 22,666
Accruals and deferred income 336,432 363,121
1,199,714 1,252,165
18. Deferred taxation
2023 2022
£ £
At beginning of year (44,276) (78,084)
Charged to profit or loss 26,052 33,808
At end of year (18,224) (44,276)
The provision for deferred taxation is made up as follows:
2023 2022
£ £
Accelerated capital allowances (18,224) (44,276)
(18,224) (44,276)
19. Share capital
2023 2022
£ £
Allotted, called up and fully paid
5,219,656 (2022 - 5,209,333) Ordinary shares of £0.05 each 260,983 260,467
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.
10,323 ordinary shares were issued during the year at £13.50 per share.
20. Reserves
Share premium account
The share premium reserve contains the premium arising on issues of equity
shares, net of issue expenses.
Capital redemption reserve
The capital redemption arose on the buy-back of shares by the company.
Profit & loss account
The profit and loss reserve represents cumulative profits or losses, net of
dividends paid and other adjustments.
21. Share based payments
During the year the company operated 2 share option schemes; an Approved
EMI Share Option Scheme and an Unapproved Share Option Scheme to
incentivise employees.
The company has applied the requirements of FRS 102 Section 26 Share-based
Payment to all the options granted under both schemes. The terms for granting
share options under both schemes are the same and provide for an option price
equal to the market value of the Company's shares on the date of the grant and
for the Approved EMI Share Option Scheme this price is subsequently agreed
with HMRC Shares and Assets Valuation Division.
The contractual life of an option under both schemes 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) 2023 Number 2023 Weighted average
exercise price (pence) 2022 Number 2022
Outstanding at the beginning of the year 2896
51,996 2942 53,702
Granted during the year
3855 39,708
-
Forfeited during the year
3855 (4,101) 3855
(1,706)
Exercised during the year
1350 (10,323)
-
Outstanding at the end of the year 77,280 51,996
2023 2022
Option pricing model used Black Scholes Black Scholes
Issue price
£13.50- £38.50
£13.50-£38.55
Exercise price (pence)
£13.50-£38.50 £13.50- £38.55
Option life
10 years 10 years
Expected volatility
7.459% 25.15%
Fair value at measurement date
£4.66 -£26.91
£4.66 -£26.91
Risk-free interest rate
1.5% 1.8%
The expected volatility for the options issued in the year is based upon the
volatility over the past 12 months. For previous years it was based upon the
historical volatility over the period since the Company's shares were listed
on AIM.
The expense recognised for share-based payments during the year ended 30 June
2023 was £174,080 (2022 : £244,871).
The number of staff and officers holding share options at 30 June 2023 was 16
(2022: 13). The share options have been issued to underpin staff service
conditions.
21. Earnings per share
The weighted average number of shares in issue for the basic earnings per
share calculation is 5,212,220 (2022: 5,209,333) and for the diluted earnings
per share, assuming the exercise of all share options is 5,289,501 (2022:
5,259,831).
The calculation of the basic earnings per shares is based on the profit for
the period of £8,372,241 (2022:
£7,674,151) divided by the weighted average number of shares in issue of
5,212,220 (2022: 5,209,333), the basic earnings per share is 160.63p (2022:
147.32p). The diluted earnings per share, assuming the exercise of all of the
share options is based on 5,289,501 (2022: 5,259,831) shares and is 158.28p
(2022: 145.90).
22. Pension commitments
The company operates a defined contributions pension scheme. The assets of the
scheme are held separately from those of the company in an independently
adminstered fund. The pension charge represents contributions payable by the
company to the fund and amounted to £71,512 (2022: £34,563). No
contributions were owing at the year end (2022: £nil).
23. Related party transactions
During the year a dividend of £775,764 (2022: £633,348) was paid to a
director and his wife.
24. Controlling party
During the year there has not been an individual controlling party.
25. Earnings per share
The weighted average number of shares in issue for the basic earnings per
share calculation is 5,212,220 (2022: 5,209,333) and for the diluted earnings
per share, assuming the exercise of all share options is 5,289,501 (2022:
5,259,831).
The calculation of the basic earnings per shares is based on the profit for
the period of £8,372,241 (2022: £7,674,151) divided by the weighted average
number of shares in issue of 5,212,220 (2022: 5,209,333), the basic earnings
per share is 160.63p (2022: 147.32p). The diluted earnings per share, assuming
the exercise of all of the share options is based on 5,289,501 (2022:
5,259,831) shares and is 158.28p (2022: 145.90).
26. Pension commitments
The company operates a defined contributions pension scheme. The assets of the
scheme are held separately from those of the company in an independently
adminstered fund. The pension charge represents contributions payable by the
company to the fund and amounted to £71,512 (2022: £34,563). No
contributions were owing at the year end (2022: £nil).
27. Related party transactions
During the year a dividend of £775,764 (2022: £633,348) was paid to a
director and his wife.
28. Controlling party
During the year there has not been an individual controlling party.
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