REG - Ergomed plc - Ergomed Interim Results 2015 <Origin Href="QuoteRef">ERGO.L</Origin> - Part 2
29/09/2015 07:03
- Part 2: For the preceding part double click ID:nRSc4986Aa
a material impact on the Group.
2. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the
following data:
UnauditedSix months ended 30 June 2015£000s UnauditedSix months ended 30 June 2014£000s AuditedYear ended 31 December 2014£000s
Earnings for the purposes of basic earnings per share being net profit attributable to owners of the Company 792 746 578
Effect of dilutive potential ordinary shares - - -
Earnings for the purposes of diluted earnings per share 792 746 578
No. No. No.
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share 28,750,000 20,000,000 24,075,342
Effect of dilutive potential ordinary shares
Share options 1,043,764 993,750 993,600
Weighted average number of ordinary shares for the purposes of diluted earnings per share 29,793,764 20,993,750 25,068,942
3. GOODWILL
£000s
Cost
At 1 January 2014 and 30 June 2014 1,332
Accumulated impairment losses
At 1 January 2014 and 30 June 2014 -
Net book value
At 31 December 2013 and 30 June 2014 1,332
£000s
Cost
At 1 January 2014 1,332
Arising on acquisition of subsidiary 6,827
Revaluation of provisional values in accordance with IFRS 3 (877)
At 31 December 2014 7,282
Arising on acquisition of subsidiary 374
At 30 June 2015 7,656
Accumulated impairment losses
1 January 2014, 31 December 2014 and 30 June 2015 -
Net book value
At 30 June 2015 7,656
At 30 June 2014 1,332
At 31 December 2014 7,282
The goodwill at 1 January 2014 and 30 June 2014 related to the acquisition of
Ergomed Virtuoso Sarl on 30 September 2013. That valuation of goodwill was a
preliminary assessment. During the second half of the year ended 31 December
2014, a valuation exercise was completed on Intangible assets acquired as part
of Ergomed Virtuoso Sarl, resulting in a revaluation of goodwill in accordance
with IFRS 3 during 2014.
The goodwill arising during the year ended 31 December 2014 relates to the
acquisition of PrimeVigilance Limited and its subsidiaries on 15 July 2014.
The goodwill arising during the period ended 30 June 2015 relates to the
acquisition of Sound Opinion Limited on 26 May 2015 (see note 6).
4. TRADE AND OTHER RECEIVABLES
Unaudited30 June 2015£000s Unaudited30 June 2014£000s Audited31 December 2014£000s
Trade receivables 4,383 2,319 4,675
Amounts receivable from related parties 33 252 14
Other receivables 302 259 327
Prepayments 306 219 205
Accrued income 1,416 - 999
Corporation tax receivable 56 - 123
6,496 3,049 6,343
5. TRADE AND OTHER PAYABLES
Unaudited30 June 2015£000s Unaudited30 June 2014£000s Audited31 December 2014£000s
Trade creditors 2,390 1,290 2,650
Amounts payable to related parties 11 654 12
Social security and other taxes 251 88 332
Other payables 381 62 275
Accruals 2,072 932 1,741
5,105 3,026 5,010
6. ACQUISITION OF SUBSIDIARY - SOUND OPINION LIMITED
On 26 May 2015, Ergomed plc acquired 100 per cent of the issued share capital
of Sound Opinion Limited, a leading provider of medical information services.
Sound Opinion Limited was acquired in order to broaden the range of healthcare
services provided by the business and to thereby increase the profitability of
Ergomed plc.
The amounts provisionally recognised in respect of the identifiable assets
acquired and liabilities assumed are as set out in the table below.
£000s
Property, Plant and Equipment 2
Total non current assets 2
Trade and other debtors 36
Accrued income 4
Cash and equivalents 62
Current assets 102
Trade and other creditors (54)
Tax payable (24)
Financial liabilities (78)
Total identifiable net assets 26
Goodwill 374
Total consideration 400
Satisfied by:
Cash 320
Deferred consideration 80
Total consideration transferred 400
Net cash outflow arising on acquisition
Cash consideration 320
Less: cash and cash equivalent balances acquired (62)
258
The provisional fair value of the financial assets includes receivables with a
fair value of £36,000 and a gross contractual value of £36,000. The best
estimate at acquisition date of the contractual cash flows not to be collected
is £nil.
Goodwill is provisionally valued at £374,000 which arises from the excess of
purchase price of £400,000 over net assets of £26,000 and is attributable to
the broadened customer base and enhanced offering of the Ergomed group
following the acquisition. None of the goodwill is expected to be deductible
for income tax purposes. Deferred consideration represents the maximum
additional consideration payable, subject to the future performance of the
business.
Owing to the limited time between acquisition and the presentation of these
interim results, there has been insufficient time to complete an external
valuation exercise. Accordingly, the amounts presented are management best
estimates, and a full fair value exercise of identifiable assets acquired and
liabilities assumed will be performed within the measurement period which ends
on 25 May 2016.
It is intended that an updated acquisition note showing any amendments arising
from the valuation exercise will be included in the audited financial
statements for the year ended 31 December 2015. Ergomed plc has a 12 month
measurement period from the date of acquisition, and therefore the final
results will be included in the financial statements for the year ended 31
December 2016.
If the acquisition of Sound Opinion Limited had been completed on the first
day of the financial year, group revenues for the six months ended 30 June
2015 would have been £155,000 higher and group profit would have been £45,000
higher.
7. EXCEPTIONAL ITEMS
Six months ended 30 June 2015£000s Six months ended 30 June 2014£000s Yearended 31 December 2014£000s
Establishment of subsidiary 37 - -
M&A activity 125 - -
Expenses in relation to IPO - - 299
Expenses in relation to acquisition of PrimeVigilance - - 285
162 - 584
In line with the way the Board and chief operating decision makers reviews the
business, large one-off exceptional costs are separately identified and shown
as exceptional costs. In the first half of 2015, these are directly related to
the establishment of operations in Taipei, Taiwan and M&A activities. During
2014, these are directly related to IPO costs that were not eligible to be
taken to the Share premium account, and to the acquisition of PrimeVigilance.
8. SUBSEQUENT EVENTS
On 20 July 2015, the Chief Executive and founder of the Company placed
3,958,020 shares at 170p each to new institutional shareholders in UK and
Western Europe. Following this placing Dr Reljanovic's shareholding was
reduced from 73% to 60% of total issued share capital.
PRO FORMA FINANCIAL INFORMATION - UNAUDITED AND UNREVIEWED
On 15 July 2014, Ergomed plc acquired the entire share capital of
PrimeVigilance Limited. The following Pro Forma financial information combines
the financial results of Ergomed plc and PrimeVigilance Limited prior to that
date for illustrative purposes. The results of PrimeVigilance Limited for the
six months ended 30 June 2014 and the statement of financial position as at 30
June 2014 and the Pro forma adjustments are unaudited and unreviewed. In
addition, the results of Ergomed plc presented in this Pro Forma 2014
financial information are adjusted to remove the profit margin charged by a
related party in relation to services provided to Ergomed plc, as such
services will be provided from internal resources in the period following the
IPO.
Pro Forma Consolidated Statement of Comprehensive Income - Unaudited and
Unreviewed
For the six months ended 30 June 2014
Six months ended 30 June 2014
Ergomed £000s Prime Vigilance£000s Pro Forma £000s
REVENUE 7,849 2,539 10,388
Cost of sales (5,614) (1,475) (7,089)
Gross profit 2,235 1,064 3,299
Administrative expenses (1,040) (713) (1,753)
Depreciation expense (30) (18) (48)
Other operating income 10 2 12
OPERATING PROFIT 1,175 335 1,510
Finance costs (1) (1) (2)
PROFIT BEFORE TAXATION 1,174 334 1,508
Taxation (265) (35) (300)
PROFIT FOR THE PERIOD 909 299 1,208
PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2014
Unaudited and Unreviewed
30 June 2014
Ergomed£000s Prime Vigilance£000s Pro Forma£000s
Non current assets
Goodwill 1,332 - 1,332
Intangible assets - 280 280
Property, plant and equipment 134 62 196
Deferred tax asset 2 - 2
1,468 342 1,810
Current assets
Trade and other receivables 3,049 1,045 4,094
Cash and cash equivalents 1,601 302 1,903
4,650 1,347 5,997
Total assets 6,118 1,689 7,807
Current liabilities
Borrowings (7) - (7)
Trade and other payables (3,323) (1,035) (4,358)
Taxation (187) (8) (195)
Total current liabilities (3,517) (1,043) (4,560)
Net current assets 1,133 304 1,437
Non-current liabilities
Borrowings (4) - (4)
Deferred tax liability - (25) (25)
Total liabilities (3,521) (1,068) (4,589)
Net assets 2,597 621 3,218
This information is provided by RNS
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