REG - Immunodiagnostic Sys - Final Results <Origin Href="QuoteRef">IDH.L</Origin> <Origin Href="QuoteRef">RXP.L</Origin> - Part 2
16/07/2015 12:07
- Part 2: For the preceding part double click ID:nRSW8877Qa
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Remeasurement of defined benefit plan (108) -
Other comprehensive income not to be reclassified to profit or loss in subsequent periods, before tax: (108) -
Tax relating to other comprehensive income not to be reclassified to profit or loss in subsequent periods 36 -
Other comprehensive income, net of tax: (5,977) (1,477)
Total comprehensive income for the year attributable to owners of the parent (3,625) 5,476
Consolidated Balance Sheet as at 31 March 2015
2015 2014
Notes £000 £000
Assets
Non-current assets
Property, plant and equipment 10,264 9,161
Goodwill 5 15,326 16,016
Other intangible assets 30,574 32,680
Investments - -
Deferred tax assets 115 1,752
Other non-current assets 273 314
56,552 59,923
Current assets
Inventories 6,805 6,458
Trade and other receivables 7,414 7,239
Income tax assets 2,600 2,151
Cash and cash equivalents 23,730 26,690
40,549 42,538
Total assets 97,101 102,461
Liabilities
Current liabilities
Short-term borrowings 252 -
Short-term portion of long-term borrowings 110 -
Trade and other payables 5,632 7,096
Income tax liabilities 971 267
Provisions 82 292
Deferred income 147 105
7,194 7,760
Net current assets 33,355 34,778
Non-current liabilities
Long-term portion of long-term borrowings 1,238 -
Repayable grants 1,357 1,533
Provisions 1,135 850
Deferred tax liabilities 5,769 5,732
9,499 8,115
Total liabilities 16,693 15,875
Net assets 80,408 86,586
Total equity
Called up share capital 584 583
Share premium account 31,857 31,809
Other reserves (1,281) 4,624
Retained earnings 49,248 49,570
Equity attributable to owners of the parent 80,408 86,586
Consolidated statement of cash flows for the year ended 31 March 2015
2015 2014
£000 £000
Operating activities
Cash generated from operations 10,797 15,631
Cash outflow related to exceptional costs (1,168) (1,807)
Income taxes paid (161) (1,535)
Net cash from operating activities 9,468 12,289
Investing activities
Acquisition of subsidiary (net of cash acquired) (2,540) -
Purchases of other intangible assets (3,587) (3,698)
Disposals of other intangible assets - (50)
Purchases of property, plant and equipment (2,872) (2,226)
Disposals of property, plant and equipment 229 (82)
Interest received 158 141
Net cash used by investing activities (8,612) (5,915)
Financing activities
Proceeds from issue of shares for cash 49 1,784
Repayments of borrowings (116) -
Interest paid (58) (64)
Dividends paid (2,479) (866)
Net cash used by financing activities (2,604) 854
Net (decrease) / increase in cash and cash equivalents (1,748) 7,228
Effect of exchange rate differences (1,212) (103)
Cash and cash equivalents at beginning of year 26,690 19,565
Cash and cash equivalents at end of year 23,730 26,690
Consolidated statement of changes in equity for the year ended 31 March 2015
Share Share Other Retained Total
capital premium Reserves earnings
account
£000 £000 £000 £000 £000
At 1 April 2013 567 30,041 6,101 43,084 79,793
Profit for the year - - - 6,953 6,953
Other comprehensive income
Foreign exchange translation differences on foreign currency net investment in subsidiaries - - (1,411) - (1,411)
Tax effect of treatment of foreign currency translation differences - - (66) - (66)
Total comprehensive income - - (1,477) 6,953 5,476
Transactions with owners
Share based payments - - - 41 41
Tax benefit on exercise of share options - - - 358 358
Dividends paid - - - (866) (866)
Shares issued in the year 16 1,768 - - 1,784
At 31 March 2014 583 31,809 4,624 49,570 86,586
At 1 April 2014 583 31,809 4,624 49,570 86,586
Profit for the year - - - 2,352 2,352
Other comprehensive income
Foreign exchange translation differences on foreign currency net investment in subsidiaries - - (5,905) - (5,905)
Remeasurement of defined benefit plan - - - (108) (108)
Tax effect on remeasurement of defined benefit plan - - - 36 36
Total comprehensive income - - (5,905) 2,280 (3,625)
Transactions with owners
Share based payments - - - (71) (71)
Tax recognised on share based payments - - - (52) (52)
Dividends paid - - - (2,479) (2,479)
Shares issued in the year 1 48 - - 49
At 31 March 2015 584 31,857 (1,281) 49,248 80,408
Notes to the consolidated financial statements for the year ended 31 March
2015
1. Segmental information
The Group applies IFRS 8 Operating Segments. IFRS 8 provides segmental
information for the Group on the basis of information reported internally to
the chief operating decision-maker for decision-making purposes. The Group
considers that the role of chief operating decision-maker is performed by the
Board of Directors.
Following a significant restructuring of the Group that began in 2013/14 the
business was directed and monitored on a functional basis during 2014/15.
Analysis of revenue is prepared and monitored on a geographical basis due to
the organisation of the sales teams as well as by product type. However
earnings on a geographical basis are not considered the most appropriate
measure of performance given the differing nature of operations across the
different territories. All earnings, balance sheet and cash flow information
received and reviewed by the Board of Directors is prepared at a Group level.
The Group determined that, consistently with 2013/14, during 2014/15 it had
one operating segment as defined under IFRS 8, being the whole of the Group.
No further detailed segmental information is provided in this note, there
being only one operating segment.
Revenues from customers located in individual countries are as follows:
2015 2014
£'000 £'000
UK (country of domicile) 1,677 2,705
US 12,166 16,011
Germany 6,241 7,086
France 4,138 5,782
Other 21,140 20,679
Total revenues 45,362 52,263
Non-current assets, excluding deferred tax and goodwill located in individual
countries is as follows:
2015 2014
£000 £000
UK (country of domicile) 11,182 10,363
France 8,835 10,017
Belgium 9,783 12,149
Other 11,311 9,626
Total 41,111 42,155
2. Profit from operations
Profit from operations is stated after charging / (crediting):
2015 2014
£000 £000
Amortisation of government grants re fixed assets (16) (17)
Amortisation of other intangible assets 4,439 4,164
Impairment of other intangible assets - 317
Loss on disposal of other intangible assets 17 -
Loss on disposal of owned plant, property and equipment 219 82
Depreciation of owned plant, property and equipment 2,400 2,682
Depreciation of assets held under finance leases 65 -
Operating lease costs 892 845
Share-based payments 76 41
Other staff costs 16,950 18,136
Cost of inventories recognised as an expense 4,703 3,205
Write downs of inventories recognised as an expense 1,303 1,638
Net (gain) / loss on foreign currency translation of trading items (688) 469
Auditor's remuneration (see below) 183 169
Amounts payable to Ernst & Young LLP and their associates in respect of both
audit and non-audit services:
2015 ` 2014
£000 £000
Audit services
- statutory audit of parent and consolidated accounts 162 139
Other services relating to taxation
- compliance services 21 30
183 169
3. Taxation on ordinary activities
a) Analysis of charge in the year
2015 2014
£000 £000
Current tax:
UK Corporation tax based on the results for the year at 21% (2014: 23%) 859 540
Over provision in prior year (137) (360)
Foreign tax on income (449) 547
Total current tax 273 727
Deferred tax:
Excess of taxation allowances over depreciation on fixed assets (548) (19)
Other (35) (510)
Tax losses carried forward 2,039 1,019
Deferred tax on share-based payments charge 22 (9)
(Over) / under provision in prior year (50) 174
Total deferred tax 1,428 655
Tax on profit on ordinary activities 1,701 1,382
In addition, total current and deferred tax of £16,000 has been charged to
equity in respect of items credited/charged directly to equity (2014:
£292,000 credited to equity).
b) Factors affecting tax charge
The tax assessed for the period is higher (2014: lower) than the standard rate
of corporation tax in the UK, 21% (2014: 23%). The differences are explained
below.
2015 2014
£000 £000
Profit on ordinary activities before taxation 4,053 8,335
Profit on ordinary activities by rate of tax in the UK of 21% (2014: 23%) 851 1,917
Expenses not deductible / (Income not taxable) for tax purposes 242 (173)
Additional relief for R & D expenditure (1,285) (523)
Foreign profits taxable at different rates (51) 255
Losses carried forward 2,107 809
Losses brought forward utilised - (456)
Effect of change in tax rate on deferred tax balances (17) (264)
Exchange differences on deferred tax 41 3
Tax in respect of prior periods (187) (186)
Total tax charge at an effective rate of 42.0% (2014: 16.6%) 1,701 1,382
4. Earnings per ordinary share
Basic earnings per share is calculated by dividing the earnings attributable
to holders of Ordinary shares by the weighted average number of Ordinary
shares outstanding during the year.
For diluted earnings per share, the weighted average number of Ordinary shares
in issue is adjusted to assume conversion of all dilutive potential Ordinary
shares. The Group has dilutive potential Ordinary shares relating to
contingently issuable shares under the Group's share option scheme. At 31
March 2015, the performance criteria for the vesting of certain awards under
the option scheme had been met and consequently the shares in question are
included in the diluted EPS calculation.
The calculations of earnings per share are based on the following profits and
numbers of shares.
2015 2014
£000 £000
Profit on ordinary activities after tax 2,352 6,953
Weighted average number of shares: No. No.
For basic earnings per share 29,193,569 28,955,485
Effect of dilutive potential Ordinary shares:
-Share options 235,365 335,092
For diluted earnings per share 29,428,934 29,290,577
Basic earnings per share 8.1p 24.0p
Diluted earnings per share 8.0p 23.7p
2015 2014
£000 £000
Profit on ordinary activities after tax as reported 2,352 6,953
Exceptional items after tax 874 1,351
Profit on ordinary activities after tax as adjusted 3,226 8,304
Adjusted basic earnings per share 11.1p 28.7p
Adjusted diluted earnings per share 11.0p 28.4p
5. Goodwill
£000
Cost
At 1 April 2013 17,313
Exchange differences (330)
At 31 March 2014 16,983
Arising on acquisition of subsidiary 1,250
Exchange differences (1,940)
At 31 March 2015 16,293
Amortisation
At 1 April 2013 967
Charge for the year -
At 31 March 2014 967
Charge for the year -
At 31 March 2015 967
Net book value
At 31 March 2015 15,326
At 31 March 2014 16,016
At 1 April 2013 16,346
Consistently with the year ended 31 March 2014, during the year ended 2015 at
a Group level, the business was directed and monitored on a functional basis.
The Board monitored the business at a Group level and IDS recognised only one
operating segment. As a consequence of this, there were no smaller CGUs which
were identifiable and for which goodwill was monitored for internal management
purposes. Goodwill was only monitored at a whole Group level. Goodwill was
allocated to a single CGU, being the entirety of the Group, and was tested for
impairment at this overall Group level.
An impairment arises when the recoverable amount of the CGU is less than the
carrying value of the CGU. The recoverable amount is the higher of the fair
value less costs to dispose and the value in use.
At 31 January 2015, the Group performed its annual impairment test. At that
date, the fair value less costs to sell was in excess of the value in use, and
also in excess of the carrying value. Therefore there was no impairment. The
fair value less costs to sell was determined using the share price at 31
January of 330p per share. Although considered appropriate, this calculation
assumed no control premium, as this was not required to demonstrate no
impairment. Using those same assumptions, a fall of 37p per share would result
in the recoverable amount being equal to the carrying value. The addition of a
control premium would materially increase the fall in share price required to
demonstrate impairment.
As at 19 June 2015, the last working day before the signing of the Financial
Statements for the Year ended 31 March 2015, the share price was 282.50p.
Using current forecasts (developed post year end) the value in use was
calculated to be c. £5m below the carrying value. The key assumptions were:
· Specific forecasts for 2015/16 - 2019/20
· Three further extrapolated years based on declining growth, then a
terminal value
· Long term EBIT margin of 15%
· Discount rate of 11%
6. Business combinations
On 9 September 2014, IDS completed the acquisition of the entire share capital
of Dia.Metra S.r.l. ("Diametra"), an Italian company specialised in the
development and commercialisation of manual immunoassays. The acquisition is
in line with the Group's strategy of building its presence as a leading
solution provider for speciality testing. In particular, the acquisition
augments the Group's endocrinology pipeline. It is IDS's intention to convert
a number of Diametra's manual assays in the area of steroid hormones onto the
IDS-iSYS automated instrument. In addition, the acquisition of Diametra
provides IDS with additional development and manufacturing capabilities.
£000
Fair value of cash consideration 2,879
Fair value of net assets acquired
Non-current assets
Property, plant & equipment 1,724
Intangible assets 1,301
Other non-current assets 4
Current assets
Inventory 327
Receivables and accrued income 884
Cash and cash equivalents 339
1,550
Current liabilities
Short term borrowings (452)
Trade and other payables (377)
Taxation (61)
Accruals (89)
(979)
Non-current assets
Long term borrowings (1,403)
Deferred taxation on intangibles (408)
Provisions (160)
(1,971)
Net Assets 1,629
Goodwill 1,250
The sale and purchase agreement allowed for a net assets adjustment on
finalisation of the completion balance sheet. Additional consideration of
E140,000 was paid subsequent to completion.
E500,000 was paid into Escrow as at the completion date. E150,000 will be
released upon the first anniversary of completion and the remaining E350,000
on the second anniversary, unless reduced by any warranty or other claim under
the terms of the agreement.
Revenue of £1,561,000 and a loss after tax of £45,000 have been included in
the consolidated results for the period from completion until the year end
date.
Goodwill recognised includes the workforce and expected synergies from
combining operations of IDS and Diametra, in particular in manufacturing and
research and development.
At the acquisition date, there were no receivables not expected to be
collected. The sale and purchase agreement contains a claim provision for any
amounts not collected within one year.
The transaction costs associated with the acquisition amounted to £0.2m and
are included within exceptional costs.
Had Diametra been acquired on 1 April 2014, the revenue and profit after tax
of the Group for the year ended 31 March 2015 would have been £46.7m and £2.4m
respectively.
Extract from Annual Report and Financial Statements
The financial information set out above does not constitute the Group's
statutory financial statements for the years ended 31 March 2015 or 2014 but
is derived from those financial statements. Statutory financial statements for
2014 have been delivered to the registrar of companies, and those for 2015
will be delivered in due course. The auditors have reported on those financial
statements; their reports were (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006. The annual
report and financial statements for the year ended 31 March 2015 will be
posted to shareholders in July 2015. This final results announcement and
results for the year ended 31 March 2015 were approved by the Board of
Directors on 22 June 2015 and are audited.
Basis of preparation
The final results announcement has been prepared under historical cost
convention on a going concern basis and in accordance with the recognition and
measurement principles of International Reporting Standards and IFRIC
interpretations as adopted by the EU ("IFRS").
The final results announcement has been prepared on the basis of the same
accounting policies as published in the audited financial statements of the
Group for the year ended 31 March 2014, with the exception of the presentation
item detailed in the following paragraph, and the accounting policies adopted
in the audited financial statements of the Group for the year ended 31 March
2015.
The cost categories on the face of the Consolidated income statement have been
increased and amended to give greater clarity. At the same time, certain
elements of depreciation and amortisation have been recategorised from
administrative expenses to cost of sales to allow benchmarking amongst peer
companies. There is no change to profit from operations, earnings per share,
net assets or cash flows of the Group. The 2014 comparatives have been
restated to reflect the same basis. A full disclosure of the reasons for the
change and the effects of the recategorisation is given in the Financial
Review section of this Final Results Announcement.
Annual report
The annual report will be sent to shareholders shortly and will also be
available at the registered office of Immunodiagnostic Systems Holdings PLC
at: 10 Didcot Way, Boldon Business Park, Boldon, Tyne & Wear NE35 9PD. It will
be made available on the Company's website at: www.idsplc.com.
This information is provided by RNS
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