REG - hVIVO plc - Audited 2016 Preliminary Results <Origin Href="QuoteRef">HVO.L</Origin> - Part 2

hVIVOAnnouncement

20/04/2017 07:06

- Part 2: For the preceding part double click  ID:nRST7961Ca 

7,138  
 
 
Summarised consolidated financial information in respect of Imutex Limited is
set out below and has been prepared in accordance with IFRS: 
 
                                                               31 December  
                                                               2016         
                                                               £'000        
 Current assets                                                383          
 Non-current assets                                            14,247       
 Current liabilities                                           (383)        
 Net assets                                                    14,247       
 Interest in the joint venture                                 6,981        
 Goodwill                                                      158          
 Carrying amount of the Group's interest in the joint venture  7,139        
 
 
Imutex Limited generated no revenues during the period as the activity was
that of product development. 
 
It recorded a loss of £nil for the period ended 31 December 2016. 
 
9. Inventories 
 
                                      31 December  31 December  
                                      2016         2015         
                                      £'000        £'000        
 Laboratory and clinical consumables  35           33           
 Virus - finished goods               1,952        2,108        
                                      1,986        2,141        
 
 
Inventories expensed in the consolidated statement of comprehensive income are
shown within cost of sales or research and development expense. All
inventories are carried at the lower of cost or net realisable value in the
consolidated statement of financial position. 
 
During 2015 a provision of £1,614,000 was recognised against the carrying
value of "Virus - finished goods". During 2013 to 2014 hVIVO developed two
separate strains of H3N2 flu virus for use in both client, equity investment
and internal studies. Two strains were developed in order to mitigate the
scientific and manufacturing risk of one strain failing development and to
ensure that at least one strain was successful in the timeframe. As it is
likely that only one of these strains will be used in client studies going
forward, the second strain has been fully provided against. 
 
No additional provision was recognised during 2016. 
 
10. Current intangible asset 
 
                             31 December  31 December  
                             2016         2015         
                             £'000        £'000        
 At 1 January                2,935        -            
 Additions at cost           3,475        2,935        
 Recognised during the year  (6,410)      -            
 At 31 December              -            2,935        
 
 
During 2015 hVIVO commenced the PrEP-001 flu and asthma clinical studies with
a view to the study data generating future economic benefit through potential
licensing arrangements. Accordingly, the costs of performing these studies
were capitalised. On 1 November 2015, PrEP Biopharm Limited contracted to
licence the study data for the flu and asthma studies. The study data was
completed and provided to PrEP Biopharm Limited during 2016, at which point
these costs were transferred to cost of sales. 
 
11. Trade and other receivables 
 
                    31 December  31 December  
                    2016         2015         
                    £'000        £'000        
 Trade receivables  1,001        551          
 VAT recoverable    260          -            
 Other receivables  399          405          
 Prepayments        1,343        1,274        
 Accrued income     701          412          
                    3,704        2,642        
 
 
12. Short-term deposits 
 
                      31 December  31 December  
                      2016         2015         
                      £'000        £'000        
 Short-term deposits  -            37,031       
 
 
Balances held on short-term deposits have maturity dates between three and
twelve months at the time of investment. 
 
13. Cash and cash equivalents 
 
                           31 December  31 December  
                           2016         2015         
                           £'000        £'000        
 Cash at bank and in hand  25,679       14,205       
 
 
14. Trade and other payables 
 
                                  31 December  31 December  
                                  2016         2015         
                                  £'000        £'000        
 Trade payables                   2,204        2,265        
 Other taxes and social security  327          382          
 VAT payable                      -            984          
 Other payables                   178          5,134        
 Accruals                         1,370        1,303        
 Deferred income                  3,064        7,434        
                                  7,143        17,502       
 
 
15. Other payables 
 
                                        31 December  31 December  
                                        2016         2015         
                                        £'000        £'000        
 Amounts to be settled beyond one year  400          475          
 
 
On 11 March 2013, the Group signed an Agreement for Lease with Queen Mary
BioEnterprises Limited to develop the third floor of the QMB Innovation Centre
with a five-year term and an option to extend for another five years. As part
of the agreement, QMB advanced the Group a repayable interest-free lease
incentive of £750,000 to develop the third floor, with £75,000 per annum
repayable over a ten-year period. The lease incentive is recognised as a
liability. In the event that the Group does not exercise its option to extend
the lease agreement for another five years, the remaining unpaid principal of
the advance (£375,000) must be repaid at the end of the five-year contractual
lease term. 
 
16. Provisions 
 
                                   Onerous                            
                                   lease      Dilapidations           
                                   provision  provision      Total    
                                   £'000      £'000          £'000    
 At 1 January 2016                 3,000      140            3,140    
 Additional provision in the year  1,037      -              1,037    
 Used during the year              (1,046)    -              (1,046)  
 At 31 December 2016               2,991      140            3,131    
 
 
Onerous lease provision of £3.0 million (31 December 2015: £3.0 million)
represents management's best estimate of the costs to be incurred for the exit
of premises leased by the Group after considering the likely outcomes. There
is reasonable uncertainty around the likelihood and timing of the exit of the
lease as negotiations will involve third parties. The provision is expected to
be used between 2017 and 2019. Total expected costs to be incurred are £3.0
million. 
 
Buildings dilapidations of £140,000 (31 December 2015: £140,000) represent the
present value of costs to be incurred for the restoration of premises occupied
by the Group. The provision is expected to be used during 2018. Total expected
costs to be incurred are £140,000. 
 
17.     Note to the consolidated statement of cash flows 
 
                                                            Year ended   Year ended   
                                                            31 December  31 December  
                                                            2016         2015         
                                                            £'000        £'000        
 Cash flow from operating activities                                                  
 Loss before income tax                                     (22,631)     (21,625)     
 Adjustments for:                                                                     
 Share of loss of associates and joint ventures             7,371        146          
 Depreciation of property, plant and equipment              1,288        1,342        
 Amortisation of intangible assets                          315          318          
 Payment of Non-Executive Director fees by issue of shares  74           68           
 Share-based payment expense                                94           78           
 Finance costs                                              18           17           
 Finance income                                             (310)        (387)        
 Loss/(gain) on foreign exchange                            -            (8)          
 RDEC credit included in other income                       (267)        (352)        
 (Decrease)/increase in provisions                          (9)          10           
 Changes in working capital:                                                          
 Decrease in inventories                                    155          1,590        
 Decrease/(increase) in current intangible asset            2,935        (2,935)      
 (Increase)/decrease in trade and other receivables         (1,062)      249          
 (Decrease)/increase in trade and other payables            (10,359)     7,885        
 Cash used in operations                                    (22,388)     (13,604)     
 Finance costs                                              (18)         (17)         
 Income tax refund                                          4,575        3,775        
 Net cash used in operating activities                      (17,831)     (9,846)      
 
 
As at 31 December 2016, a £267,000 (31 December 2015: £352,000) asset has been
recognised in respect of a Research and Development Expenditure Credit. This
amount is presented within the research and development tax credit receivable
section in the consolidated statement of financial position. The remaining tax
credit is presented below loss from operations in the consolidated statement
of comprehensive income. 
 
This information is provided by RNS
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