REG-Bioventix Plc: Results for the year ended 30 June 2022
24/10/2022 07:15
Bioventix plc
(“Bioventix” or “the Company”)
Results for the year ended 30 June 2022
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
2022.
Highlights:
· Revenue up 7% to £11.72 million (2021: £10.93 million)
· Profit before tax up 14% to £9.28 million (2021: £8.12
million)
· Cash at year end of £6.1 million (30 June 2021: £6.5 million)
· Second interim dividend of 74p per share (2021: 62p)
· Special dividend of 26p per share (2021: 38p)
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.
Over the past 18 years, we have created and supplied approximately 20
different SMAs that are used by IVD companies around the world. We currently
sell a total of 15-20 grams of purified physical antibody per year, the vast
majority of which is exported. In addition to revenues from physical antibody
supplies, the sale by our customers of diagnostic products (based on our
antibodies) to their downstream end-users attracts a modest percentage royalty
payable to Bioventix. These downstream royalties currently account for
approximately 70% of our annual revenue.
Bioventix adopts one of two commercial approaches when creating new
antibodies. The first is own-risk antibody creation projects which gives
Bioventix the complete freedom to commercialise the antibodies produced. The
second is contract antibody creation projects in partnership with customers
who supply materials, know-how and funding and 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 Food and Drug Administration (FDA) or EU authorities, is
obtained and products can be sold to the benefit of the customers, and of
course Bioventix, through the agreed sales royalty. This does mean that there
is a lead time of 4-10 years between our own research work and the receipt by
Bioventix of royalty revenue from product sales. However, because of the
resource required to gain such approvals, after having achieved approval for
an accurate diagnostic test using a Bioventix antibody, there is a natural
incentive for continued antibody use. This results in a barrier to entry for
potential replacement antibodies which would require at least partial
repetition of the approval process arising on a change from one antibody to
another. This barrier to antibody replacement arises from a combination of
factors driven by the clinical criticality of the test and the potential
consequences of making such a change which include the time and cost to
register any changes required to validate the performance of the replacement
antibody.
Another consequence of the lengthy approval process is that the revenue for
the current accounting period is derived from antibodies created many years
ago. Indeed, revenue growth over the next few years from, for example the
troponin antibodies, will come from research work already carried out 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 2026-2036.
2021/2022 Financial Results
We are pleased to report our results for the financial year ended 30 June
2022. Revenues for the year increased by 7% to £11.72 million (2020/21:
£10.93 million). Profits before tax for the year increased by 14% to £9.28
million (2020/21; £8.12million). Cash balances at the year-end were lower at
£6.1 million (30 June 2021 £6.5 million).
Our most significant revenue stream continues to come from the vitamin D
antibody called vitD3.5H10. This antibody is used by a number of small, medium
and large diagnostic companies around the world for use in vitamin D
deficiency testing. Sales of vitD3.5H10 increased by 13% to £5.4 million
which we believe reflects an improved downstream market for vitamin D testing
following a degree of recovery from coronavirus pandemic effects.
Sales of our other core historic antibodies are featured below with the
respective percentage increase/decrease from 2020/21:
- T3 (tri-iodothyronine): £0.93 million (+25%);
- biotins and biotin blockers: £0.90 million (+67%)
- progesterone: £0.62 million (+14%);
- estradiol: £0.59 million (+34%);
- testosterone: £0.47 million (+7%);
- drug-testing antibodies: £0.38 million (-7%);
As expected, revenues from NT-proBNP terminated in August 2021 and resulted in
a loss of £1.2 million of revenues. This loss has been balanced by the
increase in revenues from the core antibodies together with increased troponin
sales.
Total troponin antibody sales from Siemens Healthineers and another separate
technology sub-license almost doubled during the year to £1.23 million
(2020/21: £0.68 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.
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 continued antibody technology
development in China and elsewhere does constitute a longer-term threat. In
addition, relative global geopolitical stability will be important for the
continued trade in technology products such as our antibodies.
Our underlying revenues are dominated by foreign currencies such as US Dollars
and Euros. When converting revenues to Sterling, our functional currency, in
the absence of any appropriate hedging mechanisms, they will be influenced by
movements in exchange rates. When Dollar and Euro monies are received, they
are immediately converted into Sterling at the exchange rate applying on the
date of arrival. We have no current plans to institute any hedging mechanisms
to cover future periods and therefore any future changes in exchange rates, up
or down, may impact our reported Sterling revenues accordingly. The majority
of our physical antibody sales are priced in US$. Our royalty revenues from
our multinational customers typically arrive in either US Dollars or Euros
depending on the location of the global finance centre of the customer.
However, the underlying assay sales that support the royalties will comprise a
basket of local currencies, dominated by Dollars, Euros and Asian currencies.
Overall, we estimate that 50-60% of our total sales are directly or indirectly
linked to US Dollars.
In the reporting period, US Dollar royalty revenues received in August
relating to sales by our customers in the period January to June 2022 were
converted at an exchange rate of approximately $1.2 to £1 compared to an
exchange rate of between $1.35-$1.40 to £1 for the same periods in the
previous financial year. This effect was additive to our Sterling revenues for
the second half of the year and contributed to a forex benefit in the year; on
a constant currency basis our turnover for 2021/22 would have been circa
£11.3million and the benefit therefore circa £0.4 million.
During the coronavirus pandemic, activity in the diagnostic pathways that
exist at hospitals and clinics around the world declined. We believe that the
activity within healthcare pathways has recovered more recently in some
territories and our sales have responded accordingly. We hope that this
represents a return to normality but predicting the dynamics of the pandemic
has confounded experts over the last 30 months.
Cash Flows and Dividends
As reported above, the performance of the business during the year generated
cash balances at the year-end of £6.1 million and royalties received during
quarter 3 of 2022 have added to this balance. 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 74 pence per share which, when added to the first interim
dividend of 52 pence per share makes a total of 126 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. 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 26 pence per share.
Accordingly, dividends totaling 100 pence per share will be paid in November
2022. The shares will be marked ex-dividend on 3 November 2022 and the
dividend will be paid on 18 November 2022 to shareholders on the register at
close of business on 4 November 2022.
Research and Future Developments
Over the next few years, the continued commercial development of the new
troponin assays and their roll out by our customers will have the most
significant influence on Bioventix sales.
We have undertaken a range of new research projects over the previous few
years and in the table below we have illustrated our current view of their
potential value and probability of success:
Increasing potential value high Secretoneurin (CardiNor) Amyloid (Pre-Diagnostics) Tau (Alzheimer’s, own-risk)
medium Biotin blockers 1
Low Industrial biomonitoring (benzene, isocyanates) Pyrene biomonitoring THC sandwich 1
Low Medium high
Increasing probability of success ->
Table notes:
1 Projects were successful and modest sales now contribute total sales
Whilst antibodies in the future pipeline are at stages of testing and
development that do not allow us to make any prediction about their potential
value and influence on future revenues there has still been encouraging
progress.
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 (ICDs). Data from recent patient sample studies does show a link with
heart disease read-outs. The next step for CardiNor will be to define the
potential utility of secretoneurin diagnostics in cardiac health.
Pre-Diagnostics (also in Oslo) and their clinical collaborators have two
amyloid beta assays based on Bioventix antibodies available for research use.
The goal of the project is to identify fragments of amyloid beta in patient
samples that would be helpful in Alzheimer’s diagnostics. A new area of
interest is the diagnosis of ARIA, a side-effect related to new anti-amyloid
drugs.
Another biomarker that has shown potential in Alzheimer’s diagnostics is the
Tau protein in the form of total Tau and phosphorylated Tau. During the year
we created more anti-Tau antibodies and this work will continue into 2023. Our
academic collaborators at the University of Gothenburg have used our
antibodies to create prototype assays and have generated encouraging data from
patient blood samples. The levels of Tau detected using our antibodies are
approximately 2 times higher in Alzheimer’s samples compared to controls, a
ratio of 2 times being similar to other research groups. Our scientific target
ratio is slightly higher at 4-5 times. We are encouraged by this progress and
plan to create more antibodies to support further work with our collaborators
in Gothenburg during 2023. The recent success of the Eisai/Biogen lecanemab
clinical trial is likely to increase the need for early diagnostics and we are
very fortunate to be working with one of the world’s leading labs focussed
on Alzheimer’s biomarkers and tests.
The biotin “blocker” antibodies and THC sandwich antibodies reviewed in
our previous reports have now progressed at customers and modest sales are now
being generated to add to our total revenues.
Our pyrene lateral flow system for industrial pollution biomonitoring
completed a trial at a UK industrial site during quarter 4 of 2021. This went
well and we plan to conduct additional site studies during 2023. 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 for benzene and isocyanates, also in the field of industrial health and
safety. Benzene exposure is of relevance to the petroleum industry and
isocyanates are hazardous chemicals used in the manufacture of polyurethane
paints and plastics. This work will continue into 2023 and 2024.
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. This pursuit will continue into the future to
support the internal organic growth of our business.
We will continue to rely on our core SMA antibody creation technology which
consistently helps us to create superior antibodies for our research projects.
We are also incorporating additional newer technologies where such
technologies are helpful to us. We have successfully created “sandwich”
assay formats for pyrene and THC/cannabis using a combination of primary SMA
technology and a secondary synthetic “anti-complex” antibody created using
the “antibody library” technology of a third party. The synergy of the two
technologies provided unique solutions to pyrene and THC/cannabis and we will
seek more such opportunities in the field of small molecule detection.
We are also using new production techniques to improve the yields of our
manufacturing processes. We have had success in transferring some antibody
production from sheep cells to more productive hamster cell systems. E.coli
bacteria have also been used to good effect with certain antibody production
systems. These technologies combine to increase yields and increase effective
production capacity whilst also reducing unit costs.
The Bioventix Team and Facility
The composition of the Bioventix team of 12 full-time equivalents has remained
stable over the year facilitating excellent performance and know how
retention. The past 30 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 to adapt and modify our business to cope with the
effects of the pandemic whilst still maintaining our progress.
Supply chain issues relating to plastics and chemical reagents have persisted
during the year but have been expertly managed by our procurement team.
Turmoil in the energy market has added another risk factor with some energy
commentators predicting power outages during the winter of 2022/23. We plan to
use our diesel generator and reserve fuel supplies to minimise any disruption
caused to the lab by any such power outages.
Environmental, Social and Governance
Our production processes do consume quantities of reagents and plastics. A key
goal for the company is to use our various technologies to reduce the
quantities of materials we consume. The use of bioreactor technology does
result in a significant reduction in plastics consumption and we have
converted one antibody to this production format during the year.
Genetic engineering techniques can also be used to enhance antibody
productivity and we have successfully implemented techniques for one antibody
during the year resulting in a four-fold increase in yield.
The mass immunisation of sheep to make serum-based reagents for clinical
assays has been common-place since the 1970s. SMAs made in vitro can
substitute for this large scale use of animals and our T4 (thyroxine) antibody
is reaching the market thereby resulting in a reduction in animal usage.
Over the last 20 years, our SMAs have been used to improve the diagnostic
processes at hospitals around the world. This has resulted in improved
diagnostic tests for heart disease, thyroid function & fertility. Our goal
over the next few years is to extend this success to dementia diagnostics.
Internally at Bioventix, we value our team and seek ways to help them as they
develop their lives. We have been supportive of recent parents in their desire
to return to work and we now have four parents who work part-time having
returned to the lab after parental leave.
Regarding corporate Governance, we continue to follow the guidelines of the
Quoted Companies Alliance as described in our Governance report above. We are
aware of the need to increase the diversity of our Board whilst maintaining
skills and experience to underpin corporate culture and support business
continuity which both bring benefits for all our stakeholders. Like many
businesses limited candidate availability has compromised our progress in this
regard but our efforts will continue.
Conclusion and Outlook
We are pleased with our financial results for the year which we believe
reflect both the growth in the use of our products and of course some relief
from the global pandemic. In particular the continued roll-out of the high
sensitivity troponin assays and the royalties associated with them have
combined to help replace revenues from NT-proBNP which ceased from August
2021. After stripping out the impact of these 2 significant changes the growth
in our underlying business over the year is in the range 8-10% which we
believe is sustainable for the immediate future as our sales mix continues to
change.
Excellent technical progress has been made with our research projects and we
anticipate that our pipeline of opportunities will create additional
shareholder value in the period 2026 to 2036.
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
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 2022
2022 £ 2021 £
Turnover 11,719,271 10,930,588
Cost of sales (710,446) (817,448)
Gross profit 11,008,825 10,113,140
Administrative expenses (1,605,446) (1,506,741)
Difference on foreign exchange 92,856 (294,046)
Research and development tax credit 22,160 32,878
Share option charge (244,871) (257,629)
Operating profit 9,273,524 8,087,602
Interest receivable and similar income 4,804 30,628
Interest payable and expenses (303) -
Profit before tax 9,278,025 8,118,230
Tax on profit (1,603,874) (1,386,882)
Profit for the financial year 7,674,151 6,731,348
Other comprehensive income for the year
Total comprehensive income for the year 7,674,151 6,731,348
Earnings per share:
Basic 2022 £ 147.32 2021 £ 129.22
Diluted 145.90 127.94
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022
2022 £ 2021 £
Tangible assets 694,370 843,720
Investments 610,039 610,039
1,304,409 1,453,759
Current assets
Stocks 461,815 332,459
Debtors: amounts falling due within one year 5,224,717 4,625,967
Cash at bank and in hand 6,126,650 6,494,985
11,813,182 11,453,411
Creditors: amounts falling due within one year (1,252,165) (1,008,772)
Net current assets 10,561,017 10,444,639
Total assets less current liabilities 11,865,426 11,898,398
Provisions for liabilities
Deferred tax (44,276) (78,084)
(44,276) (78,084)
Net assets 11,821,150 11,820,314
Capital and reserves
Called up share capital 260,467 260,467
Share premium account 1,332,471 1,332,471
Capital redemption reserve 1,231 1,231
Profit and loss account 10,226,981 10,226,145
11,821,150 11,820,314
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total equity
£ £ £ £ £
At 1 July 2021 260,467 1,332,471 1,231 10,226,145 11,820,314
Comprehensive income for the year
Profit for the year - - - 7,674,151 7,674,151
Dividends: Equity capital - - - (7,918,186) (7,918,186)
Transfer to/from profit and loss account - - - 244,871 244,871
Total transactions with owners - - - (7,673,315) (7,673,315)
At 30 June 2022 260,467 1,332,471 1,231 10,226,981 11,821,150
STATEMENT OF 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 CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022
2022 £ 2021 £
Cash flows from operating activities
Profit for the financial year Adjustments for: 7,674,151 6,731,348
Depreciation of tangible assets 143,392 135,103
Loss on disposal of tangible assets 17,714 (500)
Interest paid 303 -
Interest received (4,804) (30,628)
Taxation charge 1,603,874 1,386,882
(Increase) in stocks (129,356) (87,036)
(Increase) in debtors (598,752) (976,596)
Increase in creditors 76,347 59,514
Corporation tax (paid) (1,470,634) (1,138,410)
Share option charge 244,871 257,629
Net cash generated from operating activities 7,557,106 6,337,306
Cash flows from investing activities
Purchase of tangible fixed assets (11,756) (260,327)
Sale of tangible fixed assets - 500
Interest received 4,804 30,628
Net cash from investing activities (6,952) (229,199)
Cash flows from financing activities
Issue of ordinary shares - 20,223
Dividends paid (7,918,186) (7,709,813)
Interest paid (303) -
Net cash used in financing activities (7,918,489) (7,689,590)
Net (decrease) in cash and cash equivalents (368,335) (1,581,483)
Cash and cash equivalents at beginning of year 6,494,985 8,076,468
Cash and cash equivalents at the end of year 6,126,650 6,494,985
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand 6,126,650 6,494,985
6,126,650 6,494,985
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
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 (see note
3).
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 Finance costs
Finance costs are charged to profit or loss over the term of the debt using
the effective interest method so that the amount charged is at a constant rate
on the carrying amount. Issue costs are initially recognised as a reduction in
the proceeds of the associated capital instrument.
1.6 Pensions
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined
contribution plan is a pension plan under which the Company pays fixed
contributions into a separate entity. Once the contributions have been paid
the Company has no further payment obligations.
The contributions are recognised as an expense in 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.
1.7 Current and deferred taxation
Current and deferred tax are recognised as an expense or income in the
Statement of Comprehensive Income, except when they relate to items credited
or debited directly to equity, in which case the tax is also recognised
directly in equity. The current income tax charge is calculated on the basis
of tax rates and laws that have been enacted or substantively enacted by the
reporting date in the countries where the Company operates and generates
income.
Deferred tax balances are recognised in respect of all timing differences that
have originated but not reversed by the reporting date, except that:
· The recognition of deferred tax assets is limited to the extent
that it is probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits; and
· Any deferred tax balances are reversed if and when all conditions
for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences
except in respect of business combinations, when deferred tax is recognised on
the differences between the fair values of assets acquired and the future tax
deductions available for them and the differences between the fair values of
liabilities acquired and the amount that will be assessed for tax. Deferred
tax is determined using tax rates and laws that have been enacted or
substantively enacted by the reporting date.
1.8 Research and development
Research and development expenditure is written off in the year in which it is
incurred.
1.9 Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less
accumulated depreciation and any accumulated impairment losses. Historical
cost includes expenditure that is directly attributable to bringing the asset
to the location and condition necessary for it to be capable of operating in
the manner intended by management.
Land is not depreciated. Depreciation on other assets is charged so as to
allocate the cost of assets less their residual value over their estimated
useful live
Freehold property
- 2% straight line
Plant and equipment - 25%
straight line
Motor Vehicles
- 25% straight line
Fixtures & Fittings
- 25% straight line
Equipment
- 25% straight line
1.10 Valuation of investments
Investments in unlisted Company shares, whose market value can be reliably
determined, are remeasured to market value at each 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.
1.11 Stocks
Stocks are stated at the lower of cost and net realisable value, being the
estimated selling price less costs to complete and sell. Cost includes all
direct costs and an appropriate proportion of fixed and variable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is
impaired, the carrying amount is reduced to its selling price less costs to
complete and sell. The impairment loss is recognised immediately in profit or
loss.
1.12 Debtors
Short-term debtors are measured at transaction price, less any impairment.
Loans receivable are measured initially at fair value, net of transaction
costs, and are measured subsequently at amortised cost using the effective
interest method, less any impairment.
1.13 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions
repayable without penalty on notice of not more than 24 hours. Cash
equivalents are highly liquid investments that mature in no more than 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.
1.14 Creditors
Short-term creditors are measured at the transaction price. Other financial
liabilities, including bank loans, are measured initially at fair value, net
of transaction costs, and are measured subsequently at amortised cost using
the effective interest method.
1.15 Provisions for liabilities
Provisions are made where an event has taken place that gives the Company a
legal or constructive obligation that probably requires settlement by a
transfer of economic benefit, and a reliable estimate can be made of the
amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the
Company becomes aware of the obligation, and are measured at the best estimate
at the reporting date of the expenditure required to settle the obligation,
taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried
in the Statement of financial position.
1.16 Financial instruments
The Company only enters into basic financial instrument transactions that
result in the recognition of financial assets and liabilities like trade and
other debtors and creditors, loans from banks and other third parties, loans
to related parties and investments in ordinary shares.
1.17 Dividends
Equity dividends are recognised when they become legally payable. Interim
equity dividends are recognised when paid. Final equity dividends are
recognised when approved by the shareholders at an annual general meeting.
1.18 Employee benefits-share-based compensation
The company operates an equity-settled, share-based compensation plan. The
fair value of the employee services received in exchange for the grant of the
options is recognised as an expense over the vesting period. The total amount
to be expensed over the vesting period is determined by reference to the fair
value of the options granted. At each balance sheet date, the company will
revise its estimates of the number of options are expected to be exercisable.
It will recognise the impact of the revision of original estimates, if any, in
the profit and loss account, with a corresponding adjustment to equity. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options
are exercised.
2. Judgments in applying accounting policies and key sources
of estimation uncertainty
In the application of the company's accounting policies, 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. 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:
2022 £ 2021 £
Product revenue and R&D income 3,592,556 3,620,416
Royalty and licence fee income 8,126,715 7,310,172
11,719,271 10,930,588
2022 £ 2021 £
United Kingdom 787,046 824,518
European Union 1,327,360 1,246,024
Rest of the world 9,604,865 8,860,046
11,719,271 10,930,588
4. Operating profit The operating profit is stated after charging: 2022 2021
£ £
Depreciation of tangible fixed assets 143,392 135,104
Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements 25,000 12,500
Exchange differences (92,856) 294,046
Research and development costs 975,317 1,201,236
5. Taxation
2022 2021
£ £
Corporation tax
Current tax on profits for the year 1,637,682 1,359,036
Total current tax 1,637,682 1,359,036
Deferred tax
Origination and reversal of timing differences (33,808) 27,846
Total deferred tax (33,808) 27,846
1,603,874 1,386,882
Taxation on profit on ordinary activities
Factors affecting tax charge for the year
The tax assessed for the year is higher than (2021 - lower than) the standard
rate of corporation tax in the UK of 19% (2021 - 19%). The differences are
explained below:
2022 £ 2021 £
Profit on ordinary activities before tax 9,278,025 8,118,230
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%) 1,762,825 1,542,464
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment 83 42
Capital allowances for year in excess of depreciation 27,048 (6,398)
Research and development tax credit (198,799) (226,022)
Share based payments 46,525 48,950
Other differences leading to an increase in the tax charge (33,808) 27,846
Total tax charge for the year 1,603,874 1,386,882
Factors that may affect future tax charges
The rate of corporation tax in the UK is set to be increased from the current
rate of 19% to 25% with effect from 1 April 2023. This change will increase
the tax charge in future years such that, had the change been in place in the
current year, it would have increased by £517,163 from £1,603,874 to
£2,121,037.
6. Dividends
2022 £ 2021 £
Dividends paid 7,918,186 7,709,813
7,918,186 7,709,813
7. Share capital
Allotted, called up and fully paid 2022 £ 2021 £
5,209,333 (2021 - 5,209,333) Ordinary shares of £0.05 each 260,467 260,467
The holders of ordinary shares are entitled to receive dividends as declared
and are entitled to one vote per share at meetings of the Company. All
ordinary shares rank equally with regard to the Company's residual assets.
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) 2022 Number 2022 Weighted average exercise price (pence) 2021 Number 2021
Outstanding at the beginning of the year 2942.00 52,204 2,942.00 57,103
Granted during the year - - -
Forfeited during the year 3855.00 (1,706) 3855.00 (3,401)
Exercised during the year - - 1350.00 (1,498)
Outstanding at the end of the year 2896.00 50,498 2928.00 52,204
2022 2021
Option pricing model used Issue price
Exercise price (pence)
Black Scholes
£13.50-
£38.55
£13.50-
£38.55
Black Scholes
£13.50-
£38.55
£13.50-
£38.55
Option
life
10
years
10 years
Expected
volatility
25.15%
25.15%
Fair value at measurement date
£4.66 -
£26.91
£4.66 -
£26.91
Risk-free interest
rate
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.
The expense recognised for share-based payments during the year ended 30 June
2022 was £244,871 (2021 : £257,629).
The number of staff and officers holding share options at 30 June 2022 was 13
(2021: 14). The share options have been issued to underpin staff service
conditions.
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 2022.
The financial statements for the year ended 30 June 2021 have been delivered
to the Registrar of Companies. The financial statements for the year ended 30
June 2022 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
2022 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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