REG-Bioventix Plc: Results for the year ended 30 June 2021
18/10/2021 07:05
Bioventix plc
(“Bioventix” or “the Company”)
Results for the year ended 30 June 2021
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
2021.
Highlights:
* Revenue up 6% to £10.93 million (2020: £10.31 million)
* Profit before tax down 1% to £8.12 million (2020: £8.23 million)
* Cash at year end of £6.5 million (30 June 2020: £8.1 million)
* Second interim dividend of 62p per share (2020: 52p)
* Special dividend of 38p per share (2020: 53p)
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.
The majority of our antibodies are used on blood-testing machines installed in
hospitals and other laboratories around the world. Bioventix makes antibodies
using its 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.
Over the past 17 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 60-70% of our annual revenue. Physical antibody sales and
royalty revenues from our multinational customers are made in either US
dollars or Euros.
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 creates 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 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.
Another consequence of the lengthy approval process is that the antibodies
discussed in the revenue review of the current accounting period were created
many years ago. Indeed, growth over the next few years from, for example the
troponin antibodies, will come from research work already carried out many
years ago. By the same dynamics, the current research work active at our
laboratories now is more likely to influence sales in the period 2025-2035.
2020/2021 Financial Results
We are pleased to report our results for the financial year ended 30 June
2021. Revenues for the year increased by 6% to £10.93 million (2019/20:
£10.31 million). Operating profit for the year was flat at £8.09 million
(2019/20; £8.18million) due in the main to the adverse impact of foreign
exchange movements and an increased charge in respect of share options issued
in previous years. Cash balances at the year-end were lower at £6.5 million
(30 June 2020 £8.1 million) reflecting increases in the turnover generated
from a material level of royalties in respect of the year received post year
end and dividends paid in the year of £7.71 million (2019/20 £6.50 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 remained relatively unchanged at £4.8
million during the year due to a flatter downstream market for vitamin D
testing and pandemic effects. The importance of vitamin D in human biology is
widely acknowledged and does indicate that vitamin D testing will continue to
be part of clinical diagnostics in the long term.
Sales of our other lead antibodies are featured below with the respective
percentage increase/decrease from 2019/20:
- NT-proBNP: £1.28 million (+6%) (this revenue
stream expired in July 2021)
- T3 (tri-iodothyronine): £0.74 million (+2%);
- progesterone: £0.54 million (+15%);
- estradiol: £0.44 million (+40%);
- testosterone: £0.44 million (-7%);
- drug-testing antibodies: £0.40 million (-48%);
Total troponin antibody sales from Siemens Healthineers and another separate
technology sub-license doubled during the year to £0.68 million (2019/20:
£0.33 million). This significant increase clearly demonstrates a gathering
momentum of product roll-outs for the new high sensitivity troponin assays
supported by SMAs and we believe that these revenues will continue to grow in
the next financial years.
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 are now seeing modest increases in royalty
payments flowing from these customers. The prospects for further growth in
China are good though we recognise that the development of antibody technology
companies in China represents a longer term challenge. In addition, relative
global geopolitical stability will be important for the continued trade in
technology products such as our antibodies.
Our underlying revenues continue to be dominated by US Dollars and Euros. When
converting revenues to Sterling, in the absence of hedging mechanisms, they
will be influenced by movements in exchange rates. Sales invoiced in foreign
currencies are recorded in Sterling at the exchange rate on the date of sale.
When Dollar and Euro monies are received, they are immediately converted into
Sterling at the exchange rate applying on the date of arrival. Any difference
in exchange rate between the date of invoice and the date of receipt is
reported in the form of an exchange rate adjustment and is recorded in the
period as a loss or gain when it is crystallised. The effect of these
adjustments during the current year has been particularly large and provided a
negative effect of £0.29 million which has been crystalised and recognised in
our results for this year compared to a positive effect of £0.20 million for
the previous year; a total movement between the years of almost £0.5 million.
The critical period for such differences arises around the time of royalty
receipts in February and August when debtors, in respect of turnover
recognised in the six month periods ended 31st December and 30th June
respectively, is recorded in Sterling at exchange rates applicable at those
balance sheet dates rather than at the exchange rates at the date the
royalties are received. We have no current plans to institute any hedging
mechanisms to cover these short periods or indeed any longer periods and
therefore any future changes in exchange rates, up or down, may impact our
reported Sterling revenues accordingly.
Included in the cost of sales are significant expenditures on external
contract services linked to the industrial pollution exposure project
described below. This level of expenditure will be maintained in 2021/22
reflecting the continued investment in this research project. In accordance
with our longstanding accounting policy, all such research and development
costs are charged in full in the profit and loss account when they are
incurred and there is no capitalisation of these costs.
As we observed earlier in the pandemic, through our multinational in vitro
diagnostics (IVD) customers, our main business is intrinsically linked to the
diagnostic pathways that exist at hospitals and clinics around the world. The
activity within these routine diagnostic pathways continues to be adversely
affected by the COVID-19 pandemic as hospital resources are diverted to cope
with the additional patient burden created by the pandemic. Even where
diagnostic capability exists, there is still evidence that concerned patients
have chosen not to enter diagnostic pathways and have not presented to
healthcare professionals as would normally be expected.
The evolution of the pandemic has proved difficult for Governments and their
expert advisors to forecast and the timing of a return to normality remains
uncertain. Nevertheless, we are confident of the robustness of our business
and that as circumstances change and as healthcare pathways continue to be
re-established and normalised, Bioventix sales will revert to an established
trajectory.
Cash Flows and Dividends
As reported above, the performance of the business during the year generated
cash balances at the year-end of £6.5 million and royalties received during
Q3.2021 have added to this balance. Whilst considering the impact of the
pandemic on the core business, the Board has determined that 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 62
pence per share which, when added to the first interim dividend of 43 pence
per share makes a total of 105 pence per share for the current year.
Our current 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 and to provide
comfort against the ongoing impact of the pandemic and any economic
uncertainty arising from it. We have therefore decided to distribute surplus
cash that is in excess of anticipated needs and we are pleased to announce a
special dividend of 38 pence per share.
Accordingly, dividends totalling 100 pence per share will be paid in November
2021. The shares will be marked ex-dividend on 28 October 2021 and the
dividend will be paid on 12 November 2021 to shareholders on the register at
close of business on 29 October 2021.
Research and Future Developments
Over the next few years, the commercial development of the new troponin assays
will have the most significant influence on Bioventix sales. There are
currently no antibodies in the future pipeline that are comparable to our
troponin products in potential value and the ability to influence revenues in
the next few years.
We have undertaken a range of research projects over the previous few years
and in the table below we have illustrated our current view of their potential
value and probability of success;
^ high Secretoneurin (CardiNor) Amyloid (Pre-Diagnostics) Tau (alzheimers, own-risk)
| Increasing potential value
medium Industrial biomonitoring (new markers) Pyrene biomonitoring T4 (thyroxine) 1 Biotin blockers
Low Thyroglobulin (contract) 2 Cancer (contract) 1 THC (sandwich)
Low Medium high
Increasing probability of success -->
Table notes:
1 Modest sales now contribute to miscellaneous sales
2 Project de-prioritised at customer
Our partners at CardiNor (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 .This work is on-going and we hope to have more definitive news in the
months to come.
Pre-Diagnostics (also in Oslo) and their clinical collaborators now have two
amyloid beta assays in development based on Bioventix antibodies. The goal of
the project is to identify fragments of amyloid beta in patient samples that
would be helpful in Alzheimers diagnostics. Additional data on patient samples
will be generated next year to help define the utility of these assays in
Alzheimers diagnostics.
Another biomarker that has shown potential in Alzheimers diagnostics is the
Tau protein in the form of total Tau and phosphorylated Tau. During the year
we created a number of anti-Tau antibodies and this work will continue into
2022. Our objective is to use our antibody skills to create useful antibodies
and to work with a leading academic group to investigate their use in
Alzheimers assays.
We now have two candidate biotin “blocker” antibodies that are intended to
mitigate the interference that biotin vitamin supplements can have on certain
blood tests supplied by some IVD manufacturers. Some customer results from
evaluation samples have demonstrated the effectiveness of these blocker
antibodies. However, as this project has evolved, it has become clear through
FDA guidelines that much larger quantities of biotin blockers will be required
in assay reagent packs. This imposes cost/price constraints in addition to
manufacturing/capacity challenges. Over the next year, we will explore
production systems (such as e.coli) in order to identify improved production
techniques which could facilitate commercial feasibility.
We are particularly pleased with the progress of the pyrene exposure project.
Pyrene is a common industrial combustion pollutant and we now have a prototype
lateral flow device that would be suited to testing for pyrene exposure in
industrial field use. After running the urine sample, the plastic lateral flow
cassette is loaded into 3-D printed phone holder and an app directs the phone
camera to quantify the result line. The operator then estimates the urine
strength by colour enabling the workers’ recent pyrene exposure to be
estimated. Internal results (using a small bank of industrial urine samples)
are encouraging and we are working with a UK industrial site to conduct a
field trial of the device and app over the next few months. We accept that the
creation, manufacture and supply of final assay products is outside our normal
focus of bulk antibody sales but we believe that through our own efforts we
can substantiate the viability of such products and generate demand, thereby
stimulating the interest of future commercial partners.
The progress of the pyrene project has encouraged us to consider additional
assays in the field of industrial health and safety. Work on these new
analytes has only just started and is planned to continue into 2022 and 2023.
Regarding our core SMA antibody technology, we have successfully generated
superior antibodies over the last 17 years and these antibodies are now in
routine use at our customers. The antibody technology landscape has evolved
over this time-period. We are aware that rabbit monoclonal technology – a
competitive antibody technology – does exist at some of our customers’
laboratories and this is likely to have resulted in some lost opportunities
for our SMA technology. In addition, the steady development of “synthetic”
antibody technology (known in the industry as antibody “library”
technology”) has continued. This technology is perhaps not so directly
competitive but is useful for targets which are fragile and liable to
dissociation upon immunisation into sheep.
During 2020, we used this library technology by contracting work at a third
party to make a “sandwich” assay format for THC/cannabis using a parental
SMA that we created many years ago. This has yielded an antibody “pair”
candidate that does appear to facilitate improved lateral flow tests for
THC/cannabis in saliva. The quantity of antibody used per test together with
the modest selling price of THC tests does present cost/price challenges. We
will attempt to utilise improved manufacturing technology (eg using e.coli)
during 2022 to improve the economics of this project.
The Bioventix Team and Facility
The composition of the Bioventix team of 12 full-time equivalents has remained
relatively stable over the year facilitating excellent performance and know
how retention. The past 18 months has been a challenging period for everyone
and we are very grateful to the team at Bioventix for their dedication over
this period which has allowed us the adapt and modify our business to cope
with the effects of the pandemic whilst still maintaining our progress.
Development of the lab facilities concluded earlier in 2021 with some updated
and additional laboratory utilities including a new autoclave machine and the
modernisation and upgrading of office areas. This significant investment in
our Farnham facility will provide an excellent base for our future and ongoing
research activities as well as giving us room to explore and deliver improved
production systems for our SMAs.
In the general manufacturing sector, there have been a variety of reports
relating to supply chain issues caused by a range of contributing factors. We
have also experienced such supply delays during the year covering reagents,
plastics and filters. We have successfully managed these issues through
careful stock planning and sourcing alternatives where possible and we will
continue to utilise such mitigations to minimise any future impact.
Conclusion and Outlook
We are pleased with our financial results for the year considering the
continued negative impact of the global pandemic. The core business is linked
to routine testing at hospitals around the world and this has undoubtedly been
affected by the COVID-19 pandemic. The timing of a return to normality is
uncertain but when it does, we expect our business will revert to an
established trajectory, albeit without the income from NT-proBNP which ceased
from July 2021. Regardless of the pandemic effects, we anticipate the
continued roll-out of the high sensitivity troponin assays and the royalties
associated with this. Excellent technical progress has been made with our
research projects including the industrial pollution exposure project and we
anticipate that this project and others in our pipeline will create additional
shareholder value in the years ahead.
For further information please contact:
Bioventix plc Peter Harrison Chief Executive Officer Tel: 01252 728 001
finnCap Ltd Geoff Nash/Simon Hicks Alice Lane Corporate Finance ECM Tel: 020 7220 0500
About Bioventix plc:
Bioventix (www.bioventix.com) specialises in the development and commercial
supply of high-affinity monoclonal antibodies with a primary focus on their
application in clinical diagnostics, such as in automated immunoassays used in
blood testing. The antibodies created at Bioventix are generated in sheep and
are of particular benefit where the target is present at low concentration and
where conventional monoclonal or polyclonal antibodies have failed to produce
a suitable reagent. Bioventix currently offers a portfolio of antibodies to
customers for both commercial use and R&D purposes, for the diagnosis or
monitoring of a broad range of conditions, including heart disease, cancer,
fertility, thyroid function and drug abuse. Bioventix currently supplies
antibody products and services to the majority of multinational clinical
diagnostics companies. Bioventix is based in Farnham, UK and its shares are
traded on AIM under the symbol BVXP.
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 2021
2021 £ 2020 £
Turnover 10,930,588 10,313,576
Cost of sales (817,448) (821,823)
Gross profit 10,113,140 9,491,753
Administrative expenses (1,506,741) (1,416,766)
Difference on foreign exchange (294,046) 202,668
Research and development tax credit 32,878 21,817
Share option charge (257,629) (115,481)
Operating profit 8,087,602 8,183,991
Interest receivable and similar income 30,628 41,068
Profit before tax 8,118,230 8,225,059
Tax on profit (1,386,882) (1,022,362)
Profit for the financial year 6,731,348 7,202,697
Other comprehensive income for the year
Total comprehensive income for the year 6,731,348 7,202,697
Earnings per share:
Basic 2021 £ 129.22 2020 £ 139.41
Diluted 127.94 137.93
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
2021 £ 2020 £
Fixed assets
Tangible assets 843,720 718,496
Investments 610,039 610,039
1,453,759 1,328,535
Current assets
Stocks 332,459 245,423
Debtors: amounts falling due within one year 4,625,967 3,649,369
Cash at bank and in hand 6,494,985 8,076,468
11,453,411 11,971,260
Creditors: amounts falling due within one year (1,008,772) (728,630)
Net current assets 10,444,639 11,242,630
Total assets less current liabilities 11,898,398 12,571,165
Provisions for liabilities
Deferred tax (78,084) (50,238)
(78,084) (50,238)
Net assets 11,820,314 12,520,927
Capital and reserves
Called up share capital 260,467 260,392
Share premium account 1,332,471 1,312,323
Capital redemption reserve 1,231 1,231
Profit and loss account 10,226,145 10,946,981
11,820,314 12,520,927
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2020 260,392 1,312,323 1,231 10,946,981 12,520,927
Comprehensive income for the year
Profit for the year - - - 6,731,348 6,731,348
Dividends: Equity capital - - - (7,709,813) (7,709,813)
Shares issued during the year 75 20,148 - - 20,223
Share option charge - - - 257,629 257,629
Total transactions with owners 75 20,148 - (7,452,184) (7,431,961)
At 30 June 2021 260,467 1,332,471 1,231 10,226,145 11,820,314
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2019 257,134 435,908 1,231 10,132,030 10,826,303
Comprehensive income for the year
Profit for the year - - - 7,202,697 7,202,697
Dividends: Equity capital - - - (6,503,227) (6,503,227)
Shares issued during the year 3,258 876,415 - - 879,673
Share option charge - - - 115,481 115,481
Total transactions with owners 3,258 876,415 - (6,387,746) (5,508,073)
At 30 June 2020 260,392 1,312,323 1,231 10,946,981 12,520,927
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021
2021 £ 2020 £
Cash flows from operating activities
Profit for the financial year Adjustments for: 6,731,348 7,202,697
Depreciation of tangible assets 135,103 133,569
(Profit ) / Loss on disposal of tangible assets (500) 2,376
Interest received (30,628) (41,068)
Taxation charge 1,386,882 1,022,362
(Increase) in stocks (87,036) (6,128)
(Increase)/decrease in debtors (976,596) 284,546
Increase in creditors 59,514 133,976
Corporation tax (paid) (1,138,410) (1,164,897)
Share option charge 257,629 115,481
Net cash generated from operating activities 6,337,306 7,682,914
Cash flows from investing activities
Purchase of tangible fixed assets (260,327) (339,620)
Sale of tangible fixed assets Purchase of unlisted and other investments 500 - -
(221,662)
Interest received 30,628 41,068
Net cash from investing activities (229,199) (520,214)
Cash flows from financing activities
Issue of ordinary shares 20,223 879,673
Dividends paid (7,709,813) (6,503,227)
Net cash used in financing activities (7,689,590) (5,623,554)
Net (decrease)/increase in cash and cash equivalents (1,581,483) 1,539,146
Cash and cash equivalents at beginning of year 8,076,468 6,537,322
Cash and cash equivalents at the end of year 6,494,985 8,076,468
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
1. Accounting policies
1.1 Basis of preparation of financial statements
The financial statements have been prepared under the historical cost
convention unless otherwise specified within these accounting policies and in
accordance with Financial Reporting Standard 102, the Financial Reporting
Standard applicable in the UK and the Republic of Ireland and the Companies
Act 2006.
The preparation of financial statements in compliance with FRS 102 requires
the use of certain critical accounting estimates. It also requires management
to exercise judgment in applying the Company's accounting policies.
The following principal accounting policies have been applied:
1.2 Revenue
Turnover is recognised for product supplied or services rendered to the extent
that it is probable that the economic benefits will flow to the Company and
the turnover can be reliably measured. Turnover is measured as the fair value
of the consideration received or receivable, excluding discounts, rebates,
value added tax and other sales taxes. The following criteria determine when
turnover will be recognised:
Direct sales
Direct sales are 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.
1.3 Foreign currency translation Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the
closing rate. Non- monetary items measured at historical cost are translated
using the exchange rate at the date of the transaction and non-monetary items
measured at fair value are measured using the exchange rate when fair value
was determined.
1.4 Interest income
Interest income is recognised in profit or loss using the effective interest
method.
1.5 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.
1.6 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.
The current income tax charge is calculated on the basis of tax rates and laws
that have been enacted or substantively enacted by the reporting date in the
countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that
have originated but not reversed by the Statement of financial position date,
except that:
· The recognition of deferred tax assets is limited to the extent
that it is probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits; and
· Any deferred tax balances are reversed if and when all
conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences
except in respect of business combinations, when deferred tax is recognised on
the differences between the fair values of assets acquired and the future tax
deductions available for them and the differences between the fair values of
liabilities acquired and the amount that will be assessed for tax. Deferred
tax is determined using tax rates and laws that have been enacted or
substantively enacted by the reporting date.
1.7 Research and development
Research and development expenditure is written off in the year in which it is
incurred.
1.8 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 -
25% reducing balance
Motor Vehicles -
25% straight line
Fixtures & Fittings
- 25% reducing balance
Equipment -
25% straight line
1.9 Valuation of investments
Investments in unlisted Company shares, whose market value can be reliably
determined, are remeasured to market value at each balance sheet date. Gains
and losses on remeasurement are recognised in the Statement of comprehensive
income for the period. Where market value cannot be reliably determined, such
investments are stated at historic cost less impairment.
1.10 Stocks
Stocks are stated at the lower of cost and net realisable value, being the
estimated selling price less costs to complete and sell. Cost includes all
direct costs and an appropriate proportion of fixed and variable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is
impaired, the carrying amount is reduced to its selling price less costs to
complete and sell. The impairment loss is recognised immediately in profit or
loss.
1.11 Debtors
Short term debtors are measured at transaction price, less any impairment.
Loans receivable are measured initially at fair value, net of transaction
costs, and are measured subsequently at amortised cost using the effective
interest method, less any impairment.
1.12 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.
1.13 Creditors
Short term creditors are measured at the transaction price. Other financial
liabilities, including bank loans, are measured initially at fair value, net
of transaction costs, and are measured subsequently at amortised cost using
the effective interest method.
1.14 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 Statement of financial position date of the expenditure required to
settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried
in the Statement of financial position.
1.15 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.
1.16 Dividends
Equity dividends are recognised when they become legally payable. Interim
equity dividends are recognised when paid. Final equity dividends are
recognised when approved by the shareholders at an annual general meeting.
1.17 Employee benefits-share-based compensation
The company operates an equity-settled, share-based compensation plan. The
fair value of the employee services received in exchange for the grant of the
options is recognised as an expense over the vesting period. The total amount
to be expensed over the vesting period is determined by reference to the fair
value of the options granted. At each balance sheet date, the company will
revise its estimates of the number of options are expected to be exercisable.
It will recognise the impact of the revision of original estimates, if any, in
the profit and loss account, with a corresponding adjustment to equity. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options
are exercised.
2. Judgments in applying accounting policies and key sources
of estimation uncertainty
In the application of the company's accounting policies, management is
required to make judgments, estimates and assumptions. These estimates and
underlying assumptions and 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 and, 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.
3. Turnover An analysis of turnover by class of business is as follows:
2021 £ 2020 £
Product revenue and R&D income 3,620,416 4,048,847
Royalty and licence fee income 7,310,172 6,264,729
10,930,588 10,313,576
2021 £ 2020 £
United Kingdom 824,518 832,895
European Union 1,246,024 1,206,854
Rest of the world 8,860,046 8,273,827
10,930,588 10,313,576
4. Operating profit
The operating profit is stated after charging:
2021 £ 2020 £
Depreciation of tangible fixed assets 135,104 133,569
Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements 12,500 10,650
Exchange differences 294,046 (202,668)
Research and development costs 1,201,236 1,175,602
5. Taxation
2021 2020
£ £
Corporation tax
Current tax on profits for the year 1,359,036 1,002,978
1,359,036 1,002,978
Total current tax 1,359,036 1,002,978
Deferred tax
Origination and reversal of timing differences 27,846 19,384
Total deferred tax 27,846 19,384
Taxation on profit on ordinary activities 1,386,882 1,022,362
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2020 - lower than) the standard
rate of corporation tax in the UK of 19% (2020 - 19%). The differences are
explained below:
2021 £ 2020 £
Profit on ordinary activities before tax 8,118,230 8,225,059
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%) 1,542,464 1,562,761
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment 42 559
Capital allowances for year in excess of depreciation (6,398) (21,325)
Research and development tax credit (226,022) (246,383)
Share based payments 48,950 (292,634)
Other differences leading to an increase in the tax charge 27,846 19,384
Total tax charge for the year 1,386,882 1,022,362
Factors that may affect future tax charges
The
UK
rate
of
corp
orat
ion
tax
is
set
to
be
incr
ease
d
from
the
curr
ent
rate
of
19%
to
25%
with
effe
ct
from
1
Apri
l
2023
.
This
chan
ge
will
incr
ease
the
tax
char
ge
in
futu
re
year
s
such
that
,
had
the
chan
ge
been
in
plac
e
for
the
curr
ent
year
, it
woul
d
have
incr
ease
d by
£429
,169
from
£1,3
59,0
36
to
£1,7
88,2
05.
6. Dividends
2021 £ 2020 £
Dividends paid 7,709,813 6,503,227
7,709,813 6,503,227
7. Share capital
Allotted, called up and fully paid 2021 £ 2020 £
5,209,333 (2020 - 5,207,835) Ordinary shares of £0.05 each 260,467 260,392
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.
1,498 ordinary shares were issued during the year at £13.50 per share. The
aggregated nominal value was £74.90.
8. 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) 2021 Number 2021 Weighted average exercise price (pence) 2020 Number 2020
Outstanding at the beginning of the year 2942.00 57,103 1350.00 85,938
Granted during the year - 3153.00 50,401
Forfeited during the year 3855.00 (3,401) 1350.00 (14,075)
Exercised during the year 1350.00 (1,498) 1350.00 (65,161)
Outstanding at the end of the year 2928.00 52,204 2942.00 57,103
Option pricing model used Issue price Exercise price (pence) Option life Expected volatility Fair value at measurement date Risk-free interest rate
2021 Black Scholes 2020 Black Scholes
£13.50- £13.50 -
£38.55 £38.55
£13.50- £13.50 -
£38.55 £38.55
10 years 10 years
25.15% 25.15%
£4.66 - £4.66 -
£26.91 £26.91
0.18% 0.18%
The expected volatility is based upon the historical volatility over the
period since the Company’s shares were listed on AIM.
9. Publication of Non-Statutory Accounts
The financial information set out in this preliminary announcement does not
constitute the Group's financial statements for the year ended 30 June 2021.
The financial statements for the year ended 30 June 2020 have been delivered
to the Registrar of Companies. The financial statements for the year ended 30
June 2021 will be delivered to the Registrar of Companies following the
Company's Annual General Meeting. The auditors' report on both accounts was
unqualified, did not include references to any matters to which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain statements under sections 498(2) or (3) of the Companies Act 2006. The
audited financial statements of Bioventix plc for the period ended 30 June
2021 are expected to be posted to shareholders shortly, will be available to
the public at the Company's registered office, 7 Romans Business Park, East
Street, Farnham, Surrey, GU9 7SX and available to view on the Company's
website at www.bioventix.com once posted.
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