REG - BioVentix PLC - Results for the year ended 30 June 2024
28/10/2024 07:00
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RNS Number : 7443J BioVentix PLC 28 October 2024
Bioventix plc
("Bioventix" or "the Company")
Results for the year ended 30 June 2024
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
2024.
Highlights:
· Revenue up 6% to £13.6 million (2023: £12.82 million)
· Profit before tax up 5% to £10.6 million (2023: £10.13 million)
· Cash at year end of £6.0 million (30 June 2023: £5.7 million)
· Second interim dividend of 87p per share (2023: 90p)
· Total dividends 155p per share (2023: 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 still
use this antibody for revised tests that more accurately measure lower levels
of testosterone.
Over the past 20 years, we have created and supplied approximately 25
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 which
accounts for 25-30% of our annual revenue. In addition to revenues from
these 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 the remaining 70-75% 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 tests 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), the Medicines and Healthcare
products Regulatory Agency (MHRA), 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 largely from antibodies created many
years ago.
2023/2024 Financial Results
We are pleased to report our results for the financial year ended 30 June
2024. Revenues for the year increased by 6% to £13.6 million (2022/23:
£12.8 million). Profits before tax for the year increased by 5% to £10.6
million (2022/23: £10.1million). Cash balances at the year-end were £6.0
million (30 June 2023 £5.7 million).
Our most significant revenue stream continues to come from the vitamin D
antibody called vitD3.5H10. This antibody is used by a significant number of
diagnostic companies around the world for use in vitamin D deficiency
testing. Sales of vitD3.5H10 increased by 1% to £5.9 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 (+/-) in sales compared to the
previous year 2022/23:
- T3 (tri-iodothyronine): £.1.38 million (+21%)
- biotins and biotin blockers: £1.14 million (+35%)
- progesterone: £0.63 million (-15%)
- estradiol: £0.52 million (-7%)
- testosterone: £0.33 million (-29%)
- drug-testing antibodies: £0.32 million (-21%)
During the year the Company became aware that, due to a customer error in the
incorrect application of an historic royalty percentage, they had overreported
and overpaid troponin royalty revenues since July 2021. Royalty revenues for
the financial years 2021/22 and 2022/23 were overstated by £132k and £195k
respectively. These amounts are immaterial in respect of each of the
affected periods and therefore the Company is not required to restate the
audited financial statements for those years, however the cumulative effect of
a reduction of £327k in respect of such royalty revenue has been included in
the financial statements for the current year to 30 June 2024.
After correctly allocating the revenue to each of the years 2023/24 and
2022/23 our total troponin antibody royalty revenue from Siemens Healthineers
and another separate technology sub-license increased by 3% during the year
from £1.41 million to £1.45 million. The level of these royalties and
their growth are below our previous expectations based on downstream
assumptions.
In contrast to the disappointment of troponin sales in the current application
of acute chest pain (ie suspected heart attack in A&E centres), we are
pleased to note that Siemens have received FDA approval for a revised label
claim for their troponin assay that covers a new prognostic application.
This enables troponin levels to be measured in "at risk" patients and/or
patients who have already been diagnosed with a cardiac condition, whose
troponin levels may now be measured to assess their impending risk of a future
adverse cardiac event. This risk information can then be used to help
clinicians consider additional diagnostic procedures or to review therapeutic
alternatives. We expect that this new application will stimulate additional
troponin assay use and our associated royalties, thus increasing the market
opportunity. As previously disclosed, Siemens troponin revenues will
terminate for contractual reasons in June 2032.
Our shipments of physical antibody to China continued to increase. Some
sales are made directly and some are made through five appointed
distributors. More regulatory approvals for domestic Chinese customers using
our antibodies have been registered leading to more significant flows of
royalty payments flowing from these customers.
Chinese customers declare and pay royalties in arrears on a calendar year
basis and we therefore have to accrue for such revenue, in both full year and
interim results, basing our revenue expectation on previous experience. As a
result of internal and external audit processes it was only in May 2024 that
we received payment from a Chinese customer for the royalties earned in 2023
and therefore our revenue for 2023/24 has benefited by £239k from our prudent
assessment of accrued royalty revenue in respect of previous periods.
The prospects for further short term growth in China are good. Longer term,
price pressures and continued antibody technology development in China
constitute an anticipated threat. In addition to this, the current global
geopolitical climate has stimulated the desire for "on-shoring" supply chains
and our Chinese customers are likely to be influenced by this trend.
Our research into Tau antibodies and Alzheimer's diagnostics continues to
progress and we are delighted that our early work has now translated into a
modest revenue stream from antibodies now entering commercial manufacture.
Our commercial policy is to supply initial evaluation samples of antibodies
free of charge. If antibodies perform well on prototype assay systems at our
IVD customers and additional supplies are ordered, these are charged at
regular prices and such repeat sales have generated revenues during the
year. These revenues are not only additive but also indicate that our
antibodies could feature in future commercial assays. In addition to our
conventional IVD customers, we have also supplied antibodies to specialist
platform customers, for example Quanterix Corporation who specialise in assays
for the research market. The research market is established earlier than
more regulated tests for routine clinical use
and it is pleasing that royalty revenues from such activities have already
been established. Total Tau revenues for the year were above our expectation
at £155k.
We estimate that 50-60% of our total sales are directly linked to US Dollars
via physical product pricing in US Dollars or indirectly linked to US Dollars
via royalties based on downstream US Dollar sales. The remainder of the
currency split is dominated by Euros and important Asian currencies. 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 £6.0 million and royalties received during
quarter 3 of 2024 have added to this balance.
Increases in the rate of Corporation Tax from 19% to 25%, effective from 1
April 2023, have had a full year impact on profit after tax, EPS, cashflow and
dividends for the year to 30 June 2024.
In consideration of our established dividend policy and the available
cashflows, the Board is pleased to announce a second interim dividend of 87
pence per share which, when added to the first interim dividend of 68 pence
per share makes a total of 155 pence per share for the current year.
Accordingly, a dividend of 87 pence per share will be paid in November 2024.
The shares will be marked ex-dividend on 7 November 2024 and the dividend will
be paid on 21 November 2024 to shareholders on the register at close of
business on 8 November 2024.
Research and Future Developments
Over the last few years, a considerable amount of our laboratory 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 AD pathway that progresses many years before
patient symptoms become more obvious.
Recently, the approval of first generation AD therapeutics (Lecanemab™
jointly developed by EISAI and Biogen and Donanemab™ from Eli Lilly) have
changed the perception of AD therapy, and it is likely that second generation
therapeutics, or combination therapies will further help to slow the disease
process. Patients presenting early in the ATN pathway appear to benefit most
from therapy. Therefore, ATN assessments can be used not only to screen for
patients suitable for therapy but 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 highly desirable if such
diagnostic procedures could be replaced or augmented with cheaper and more
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. The view of many neurological opinion leaders - and shared by our IVD
customers - is that blood-testing machines will soon offer a panel of new
neurological tests that will reveal information about patient brain health
which will be useful for screening and therapy monitoring purposes.
We have supplied a number of major IVD companies with antibodies from our
growing Tau antibody portfolio. It is encouraging that a small number of
these companies have requested additional quantities of the antibodies
supplied. Not only does this add modestly to our overall revenues but it
also offers some encouragement that our antibodies will play some part in the
future neurological panel offerings of our customers.
Whilst our major IVD customers' primary interest is in developing regulated
tests for routine clinical use, expert neurology centres are already adopting
"research use only" tests in advance of the availability of other tests
through hospital-orientated IVD companies. Some of these R&D tests are
run on Quanterix Corporation (Billerica, MA) machines and our partnership with
Quanterix has resulted in one commercial R&D test for neurodegeneration
(N) that uses an SMA and which has generated on-going royalty revenues.
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. This has not progressed successfully and CardiNor are currently
restructuring both their operations and their financial position. We have
accordingly taken the decision to write off the entire cost of our investment
in CardiNor of £183k made between July 2016 and June 2020.
Our pyrene lateral flow system for industrial pollution biomonitoring is
proceeding steadily as planned. We have now completed a second manufacturing
batch of lateral flow cassettes and intend to conduct a field trial with
firefighters during 2025. The follow-on project for benzene exposure has
also progressed and lateral flow assay development has recently commenced.
Benzene exposure is known to be carcinogenic and is of relevance to the
petroleum industry. An additional industrial pollution biomonitoring project
featuring isocyanates (hazardous chemicals used in the manufacture of
polyurethane paints and plastics) has also progressed well and lateral flow
assay development is due to start early in 2025.
We have recently embarked on a new project focussing on sewage contamination
of rivers and lakes. Drugs contained in sewage such as paracetamol and
caffeine have each previously been used in research labs as a convenient
surrogate marker of sewage in waterways. The project concept is to harness
our experience with sandwich antibodies, lateral flow systems, together with
phone app technology, to facilitate rapid riverside tests, the results of
which can be uploaded, pooled and shared. This will allow for much greater
intensity and geographical coverage of analysis that will be available to all
the many interested parties. Antibodies have already been made for this
application and lateral flow assay development is due to commence soon.
The industrial biomonitoring and water pollution projects have required
significant external expenditure during the year of approximately £200k. As
we develop the projects, we expect this expenditure to continue and grow
modestly into the future. Using our cash resources to support the steady
internal organic growth of our business has been a consistent feature of our
strategy.
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 novel
"sandwich" assay formats for small molecules using a combination of primary
SMA technology and a secondary synthetic "anti-complex" antibody created using
the "antibody library" technology of a third party. We have recently created
new sandwich systems for benzene and isocyanates (to be more precise, the
urine metabolites of these chemicals) in addition to caffeine and paracetamol
to add to previous successes with pyrene and THC/cannabis.
The Bioventix Team and Facility
The composition of the Bioventix team of 12 full-time equivalents (14 staff in
total) has remained stable over the year facilitating excellent performance
and know-how retention. This level of stability has formed an excellent base
upon which we have been able to build our new products moving into the
exciting new areas described above. We are very fortunate to have such a
dedicated and loyal team and we are grateful to them for their continued
enthusiastic input and support.
Nick McCooke has recently informed the Board that he wishes to step down as a
Director of Bioventix plc and accordingly Nick will not be seeking
re-appointment as a Director at the Company's forthcoming Annual General
Meeting. The Board would like to acknowledge Nick's exceptional contribution
to Bioventix plc since his appointment to the Board in January 2014. Nick's
acumen, experience, independence of thought and wisdom are all highly valued
by his fellow Directors and the business and have played a full part in the
Company's progress and success over the last 10 years. We are very grateful
to him and wish him a very happy retirement. As is described in the
Nomination Committee report the Board will seek to appoint a further
independent non-Executive Director in due course.
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 in more mature
diagnostic markets. We remain very encouraged by the very early signs of
success for our Tau/Alzheimer's antibodies and we look forward to more
progress into the future.
For further information please contact:
Bioventix plc Tel: 01252 728 001
Peter Harrison Chief Executive Officer
Cavendish (NOMAD and broker)
Geoff Nash/Abigail Kelly 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 THE YEAR ENDED 30 JUNE 2024
2024 2023
Note £ £
Turnover 4 13,606,584 12,816,225
Cost of sales (925,527) (828,410)
Gross profit 12,681,057 11,987,815
Administrative expenses (1,994,691) (1,768,950)
Difference on foreign exchange (42,180) (36,679)
Research and development tax credit 29,230 25,243
Share option charge (89,223) (174,080)
Operating profit 5 10,584,193 10,033,349
Impairment charge on value of investments (183,306) -
Interest receivable and similar income 8 201,962 101,094
Profit before tax 10,602,849 10,134,443
Tax on profit 9 (2,506,131) (1,762,202)
Profit for the financial year 8,096,718 8,372,241
Total comprehensive income 8,096,718 8,372,241
for the year
Earnings per share:
2024 2023
Basic (pence per share) 155.12 160.63
Diluted (pence per share) 152.86 158.28
The notes on pages 08 to 24 form part of these financial statements.
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
Note £ £
Fixed assets
Tangible assets 11 477,997 575,726
Investments 12 426,733 610,039
904,730 1,185,765
Current assets
Stocks 13 615,345 565,366
Debtors: amounts falling due within 14 6,211,919 5,814,761
one year
Cash at bank and in hand 15 5,998,953 5,715,819
12,826,217 12,095,946
Creditors: amounts falling due within
one year
16 (1,728,289) (1,199,714)
Net current assets 11,097,928 10,896,232
Total assets less current liabilities 12,002,658 12,081,997
Provisions for liabilities
Deferred tax 17 - (18,224)
17 - (18,224)
Deferred tax
Net assets 12,002,658 12,063,773
Capital and reserves
Called up share capital 18 260,983 260,983
Share premium account 19 1,471,315 1,471,315
Capital redemption reserve 19 1,231 1,231
Profit and loss account 19 10,269,129 10,330,244
12,002,658 12,063,773
The financial statements were approved and authorised for issue by the board
and were signed on its behalf on:
Peter Harrison
Director
The notes on pages 08 to 24 form part of these financial statements.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024
Called up share Share premium account Capital redemption reserve Profit and loss account
capital
Total equity
£ £ £ £ £
At 1 July 2023 260,983 1,471,315 1,231 10,330,244 12,063,773
Comprehensive income for the year
Profit for the year - - - 8,096,718 8,096,718
Other comprehensive income - - - - -
for the year
Total comprehensive - - - 8,096,718 8,096,718
income for the year
Contributions by and distributions to owners
Dividends: Equity capital - - - (8,247,056) (8,247,056)
Share option charge - - - 89,223 89,223
Total transactions with owners - - - (8,157,833) (8,157,833)
At 30 June 2024 260,983 1,471,315 1,231 10,269,129 12,002,658
Called up share Share premium account Capital redemption reserve Profit Total equity
capital
and loss account
£ £ £ £ £
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
Other comprehensive income - - - - -
for the year
Total comprehensive income for the year - - - 8,372,241 8,372,241
Contributions by and distributions to owners - - - - -
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
The notes on pages 08 to 24 form part of these financial statements.
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
£ £
Cash flows from operating activities
Profit for the financial year 8,096,718 8,372,241
Adjustments for:
Depreciation of tangible assets 113,636 129,227
Interest received (201,962) (101,094)
Taxation charge 2,506,131 1,762,202
(Increase) in stocks (49,979) (103,551)
(Increase) in debtors (394,670) (626,550)
Increase/(decrease) in creditors 83,019 (52,612)
Corporation tax (paid) (2,081,287) (1,751,587)
Share option charge 89,223 174,080
Impairment of investment 183,306 -
Net cash generated from operating activities 8,344,135 7,802,356
Cash flows from investing activities
Purchase of tangible fixed assets (15,907) (10,583)
Interest received 201,962 101,094
Net cash from investing activities 186,055 90,511
Cash flows from financing activities
Issue of ordinary shares - 139,360
Dividends paid (8,247,056) (8,443,058)
Net cash used in financing activities (8,247,056) (8,303,698)
Net increase/(decrease) in cash and cash equivalents 283,134 (410,831)
Cash and cash equivalents at beginning of year 5,715,819 6,126,650
Cash and cash equivalents at the end of year 5,998,953 5,715,819
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand 5,998,953 5,715,819
5,998,953 5,715,819
The notes on pages 08 to 24 form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
1. General information
Bioventix Plc (04923945) is a public limited company registered in England and
Wales. The Registered Office is 27-28 Eastcastle Street, London, W1W 8DH.
1.1 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. 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 2024
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 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.
2.6 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.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
2. Accounting policies (continued)
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.
2.7 Research and development
Research and development expenditure is written off in the year in which it is
incurred.
2.8 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 - 15% straight line
Motor Vehicles - 25% straight line
Fixtures & Fittings - 15% straight line
Equipment - 25% straight line
2.9 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.
2.10 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.
2.11 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.
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.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
2. Accounting policies (continued)
2.12 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.
2.13 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.
2.14 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.
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.
2.15 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.
2.16 Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a
legal or constructive obligation, a transfer of economic benefits is probable
and a reliable estimate can be made. Provisions are measured as the best
estimate of the amount required to settle the obligation, taking into account
the related risks and uncertainties. Increases in provisions are generally
charged as an expense to profit or loss.
2.17 Financial instruments
The Company has elected to apply the provisions of Section 11 "Basic Financial
Instruments" of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and
bank balances, are initially measured at their transaction price including
transaction costs and are subsequently carried at their amortised cost using
the effective interest method, less any provision for impairment, unless the
arrangement constitutes a financing transaction, where the transaction is
measured at the
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
2. Accounting policies (continued)
2.17 Financial instruments (continued)
present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The
Company's cash and cash equivalents, trade and most other receivables due with
the operating cycle fall into this category of financial instruments.
Financial liabilities
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instruments
any contract that evidences a residual interest in the assets of the Company
after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank
loans and other loans are initially measured at their transaction price after
transaction costs. When this constitutes a financing transaction, whereby the
debt instrument is measured at the present value of the future payments
discounted at a market rate of interest. Discounting is omitted where the
effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the
effective interest rate method.
Trade payables are obligations to pay for goods and services that have been
acquired in the ordinary course of business from suppliers. Trade payables are
classified as current liabilities if the payment is due within one year. If
not, they represent non-current liabilities. Trade payables are initially
recognised at their transaction price and subsequently are measured at
amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial.
2.18 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.
2.19 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.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
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.
An impairment provision against the value of the investment in shares of
CardiNor AS has been made in the year ended 30 June 2024 following
notification of that company's intention to file for bankruptcy received on
11th July 2024. Subsequently CardiNor AS has raised further equity thereby
substantially diluting existing shareholdings and has also stated its
intention to further dilute shareholdings by the conversion of debt into
equity. The Impairment charge is shown in the Statement of comprehensive
income and the carrying value of investments in Note 12 to the accounts.
The carrying value of the remaining investment will continue to be historic
cost.
Royalty Revenue Accrual
The Company is notified and receives royalty revenue from one customer on a
calendar year basis annually in arrears it is therefore necessary to estimate
this revenue for the first 6 months of the calendar year and process an
accrual in respect of it.
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.
4. Turnover
An analysis of turnover by class of business is as follows:
2024 2023
£ £
Product revenue and R&D income 4,459,290 4,232,829
Royalty and licence fee income 9,147,294 8,583,396
13,606,584 12,816,225
2024 2023
£ £
United Kingdom 405,455 961,904
Other EU 1,507,551 1,604,187
Rest of the world 11,693,578 10,250,134
13,606,584 12,816,225
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
5. Operating profit
The operating profit is stated after charging:
2024 2023
£ £
Depreciation of tangible fixed assets 113,636 129,227
Fees payable to the Company's auditor and its associates for the audit of the
Company's annual financial statements
32,500 25,000
Exchange differences 42,180 36,679
Research and development costs 999,418 1,201,398
6. Employees
Staff costs, including directors' remuneration, were as follows:
2024 2023
£ £
Wages and salaries 1,153,004 1,001,959
Social security costs 138,056 119,075
Share option charge 89,223 174,080
Cost of defined contribution scheme 91,692 71,513
1,471,975 1,366,627
The average monthly number of employees, including the directors, during the
year was as follows:
2024 2023
No. No.
Management and administration 6 5
Scientific 11 11
17 16
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
7. Directors' remuneration
2024 2023
£ £
Directors' emoluments 537,847 412,059
Company contributions to defined contribution pension schemes 50,815 36,890
588,662 448,949
During the year retirement benefits were accruing to 1
director (2023 - 1) in respect of defined contribution pension
schemes.
8. Interest receivable
2024 2023
£ £
Other interest receivable 201,962 101,094
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
9. Taxation
2024 2023
£ £
Corporation tax
Current tax on profits for the year 2,526,844 1,788,254
Deferred tax
Origination and reversal of timing differences (20,713) (26,052)
Taxation on profit on ordinary activities 2,506,131 1,762,202
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2023 - lower than) the standard
rate of corporation tax in the UK of 25% (2023 - 25%). The differences are
explained below:
2024 2023
£ £
Profit on ordinary activities before tax 10,602,849 10,134,444
Profit on ordinary activities multiplied by standard rate of corporation
tax in the UK of 25% (2023 - 25%)
2,650,712 2,533,611
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and
impairment
381 341
Capital allowances for year in excess of depreciation 22,493 27,289
Amounts written off investments 45,827 -
Research and development tax credit (214,875) (356,784)
Share based payments 22,306 (23,222)
Deferred tax movement (20,713) (26,052)
Change in tax rate during the year - (392,981)
Total tax charge for the year 2,506,131 1,762,202
Factors that may affect future tax charges
There were no factors that may affect future tax charges.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
10. Dividends
2024 2023
£ £
Dividends paid 158 pence per share (2023:162 pence per share) 8,247,056 8,443,058
8,247,056 8,443,058
11. Tangible fixed assets
Freehold Plant & Motor Fixtures & Office
property Machinery Vehicles Fittings Equipment
£ £ £ £ £
Cost or valuation
At 1 July 2023 475,000 479,527 13,090 407,115 39,525
Additions - 10,586 - 5,321 -
At 30 June 2024 475,000 490,113 13,090 412,436 39,525
Depreciation
At 1 July 2023 156,750 382,026 8,182 263,594 27,979
Charge for the year on owned assets
7,125 41,490 3,273 56,754 4,994
At 30 June 2024 163,875 423,516 11,455 320,348 32,973
Net book value
At 30 June 2024 311,125 66,597 1,635 92,088 6,552
At 30 June 2023 318,250 97,501 4,908 143,521 11,546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
11. Tangible fixed assets
Freehold Plant & Motor Fixtures & Office
property Machinery Vehicles Fittings Equipment
£ £ £ £ £
Cost or valuation
At 1 July 2023 475,000 479,527 13,090 407,115 39,525
Additions - 10,586 - 5,321 -
At 30 June 2024 475,000 490,113 13,090 412,436 39,525
Depreciation
At 1 July 2023 156,750 382,026 8,182 263,594 27,979
Charge for the year on owned assets
7,125 41,490 3,273 56,754 4,994
At 30 June 2024 163,875 423,516 11,455 320,348 32,973
Net book value
At 30 June 2024 311,125 66,597 1,635 92,088 6,552
At 30 June 2023 318,250 97,501 4,908 143,521 11,546
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
11. Tangible fixed assets (continued)
Total
£
Cost or valuation
At 1 July 2023 1,414,257
Additions 15,907
At 30 June 2024 1,430,164
Depreciation
At 1 July 2023 838,531
Charge for the year on owned assets 113,636
At 30 June 2024 952,167
Net book value
At 30 June 2024 477,997
At 30 June 2023 575,726
Included within land and buildings is freehold land at cost of £118,750 which
is not depreciated.
(2023 - £118,750).
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
12. Fixed asset investments
Unlisted Investments
£
Cost or valuation
At 1 July 2023 610,039
Impairment (183,306)
At 30 June 2024 426,733
The value of the investment in shares of CardiNor AS was written down to nil
off following notification of that company's intention to file for bankruptcy
which was received on 11th July 2024.Subsequently CardiNor AS has raised
further equity thereby substantially diluting existing shareholdings and has
also stated its intention to further dilute shareholdings by the conversion of
debt into equity.
13. Stocks
2024 2023
£ £
Finished goods and goods for resale 615,345 565,366
14. Debtors
2024 2023
£ £
Trade debtors 1,521,963 1,170,512
Other debtors 26,375 501
Prepayments and accrued income 4,661,092 4,643,748
Deferred taxation 2,489 -
6,211,919 5,814,761
15. Cash and cash equivalents
2024 2023
£ £
Cash at bank and in hand 5,998,953 5,715,819
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
16. Creditors: Amounts falling due within one year
2024 2023
£ £
Trade creditors 169,982 77,725
Corporation tax 1,154,816 709,259
Other taxation and social security 28,428 76,298
Accruals and deferred income 375,063 336,432
1,728,289 1,199,714
17. Deferred taxation
2024 2023
£ £
At beginning of year (18,224) (44,276)
Charged to profit or loss 20,713 26,052
At end of year 2,489 (18,224)
The deferred taxation balance is made up as follows:
2024 2023
£ £
Accelerated capital allowances 2,489 (18,224)
2,489 (18,224)
18. Share capital
2024 2023
£ £
Allotted, called up and fully paid
5,219,656 (2023 - 5,219,656) Ordinary shares of £0.05 each 260,983 260,983
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.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
19. 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.
20. 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 Number 2024 Weighted average Number 2023
exercise
exercise
price
price
(pence)
(pence)
2024
2023
Outstanding at the beginning of the year 3544 77,281 2896 51,997
Granted during the year - - 3855 39,708
Forfeited during the year - - 3855 (4,101)
Exercised during the year - - 1350 (10,323)
Outstanding at the end of the year 3544 77,281 3544 77,281
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
2024 2023
Option pricing model used Black Scholes Black Scholes
Issue price £13.50-£38.50 £13.50-£38.50
Exercise price (pence) £13.50-£38.50 £13.50-£38.50
Option life 10 years 10 years
Expected volatility 7.459% 7.459%
Fair value at measurement date £4.66 - £26.91 £4.66 - £26.91
Risk-free interest rate 1.5% 1.5%
20. Share-based payments (continued)
The expected volatility for the options issued in the year to 30 June 2023 was
based upon the volatility over that 12 month period.
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
2024 was £89,223 (2023 : £174,080).
The number of staff and officers holding share options at 30 June 2024 was 16
(2023: 16). 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 5,219,656 (2023: 5,212,220) and for the diluted earnings
per share, assuming the exercise of all share options is 5,296,937 (2023:
5,289,501).
The calculation of the basic earnings per shares is based on the profit for
the period of £10,585,108 (2023: £8,372,241) divided by the weighted average
number of shares in issue of 5,219,656 (2023: 5,212,220), the basic earnings
per share is 155.12p (2023: 160.63p). The diluted earnings per share, assuming
the exercise of all of the share options is based on 5,296,937 (2023:
5,289,501) shares and is 152.86p (2023: 158.28p).
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
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
administered fund. The pension charge represents contributions payable by the
company to the fund and amounted to £91,692 (2023: £71,512). No
contributions were owing at the year end (2023: £nil).
23. Related party transactions
During the year a dividend of £525,199 (2023: £775,764) was paid to a
director and his wife.
24. Controlling party
During the year there has not been an individual controlling party.
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