REG - hVIVO PLC - Final results
25/04/2023 07:00
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RNS Number : 2904X hVIVO PLC 25 April 2023
hVIVO plc
("hVIVO" or the "Company")
Final results
Transformational year with record EBITDA underlining strong operational
delivery
hVIVO plc (AIM & Euronext: HVO), (formerly Open Orphan plc) a rapidly
growing specialist contract research organisation (CRO) and world leader in
testing infectious and respiratory disease products using human challenge
clinical trials, announces its audited results for the 12 months ended 31
December 2022.
Financial highlights
· Revenue up 30% to £50.7m (2021: £39.0m)
· EBITDA increased threefold to £9.1m (2021: £2.9m)
· EBITDA margins of 17.9% (2021: 7.4%), ahead of guidance due to
positive impacts of over £1m
· Cash and cash equivalents of £28.4m as at 31 December 2022 (2021:
£15.7m)
· Adjusted diluted EPS increased to 0.90p per share (2021: (0.19)p)
· Contracted orderbook increased by 65% to £76m as at 31 December 2022
(2021: £46m)
· One-off special dividend of c.£3.0m, being 0.45p per share
reflecting strong cash generation during the year, payable on 9 June 2023 to
shareholders on the register on 5 May 2023. The corresponding ex-dividend date
is 4 May 2023
Non-core assets
Due to the challenging market conditions, the Board are providing the
following updates in relation to hVIVO's non-core assets:
· PrEP Biopharm - hVIVO holds 62.62% of PrEP Biopharm Limited. The
directors of PrEP Biopharm Limited have made the decision to commence the
process of a solvent liquidation in the coming months
· Imutex - hVIVO have performed an impairment assessment on its 49%
holding in Imutex Limited and have determined that a full impairment of the
carrying amount of the investment in Imutex is prudent. This impairment
reflects a write down from £7m to nil as at 31 December 2022
· Disease in Motion - the Board has decided to postpone all activities
relating to the spin-out of Disease in Motion and pursue other growth
opportunities that are more aligned with our near term strategic objectives as
a human challenge trial business
Operational highlights
· Delivered seven challenge studies and inoculated 413 volunteers in
2022, a 32% increase on the prior year
· Positive impact from efficiency initiatives, including concurrent
running of multiple challenge trials, a flexible booking model, and a
re-vamped FluCamp platform, resulted in improved staff and volunteer
utilisation and lead conversion. This is reflected in the much improved EBITDA
margins
· Larger trial sizes, award of multiple unique full-service challenge
contracts, and the expansion into new markets (APAC) as a result of increase
market awareness of human challenge study benefits
· Expanded portfolio of human challenge models with launch of the
Malaria and development of Omicron models
· Facilities expanded in London and Manchester, doubling screening
capacity, and increasing bed capacity
· Broadened the scope of the business to offer Phase II / III field
based studies
- First contract awarded by existing Big Pharma client to act as a
vaccination site for a Phase II field study
· hVIVO laboratories achieved the College of American Pathologists
(CAP) accreditation, confirming high standards of excellence and increasing
the marketability of our laboratory services
Management strengthened
· The executive management team strengthened with appointments of Yamin
'Mo' Khan as CEO, bringing substantial CRO experience and expertise, and
Stephen Pinkerton as CFO
· Martin Gouldstone appointed Independent Non-Executive Director,
adding strong corporate development experience in the CRO, healthcare and
pharmaceutical sectors
Outlook
· Revenue guidance for 2023 of £55m
· Full visibility on 2023 revenue and into H1 of 2024
· Targeting 2023 EBITDA margin in the mid-to-high teens
· Strong contracted orderbook continues to grow into 2023 despite
cancellation of recent contract win
Yamin 'Mo' Khan, Chief Executive Officer of hVIVO, said: "2022 marked a
transformative year for hVIVO, as we achieved record financial and operational
performance, providing strong validation of our sustainable growth model. With
exceptional financial strength, and an impressive orderbook, we are proud to
have full visibility of 2023 revenue guidance with strong visibility into H1
2024.
Moving forward, we will continue to leverage our world leading position in the
industry, taking advantage of favourable market dynamics. We are expanding our
services and challenge models to better support our clients' clinical
development portfolios, while simultaneously improving our margins with
impactful efficiency initiatives. I have full confidence in the team's ability
to deliver operational excellence as well as orderbook conversions, paving the
way for long-term sustainable growth and profitability."
Investor presentation
Yamin 'Mo' Khan, Chief Executive Officer, and Stephen Pinkerton, Chief
Financial Officer, will provide a live presentation relating to the final
results via the Investor Meet Company platform on Tuesday 25 April
2023 at 17:00 BST. Investors can sign up to Investor Meet Company and add
to meet hVIVO here
(https://www.investormeetcompany.com/hvivo-plc-1/register-investor) .
For further information please contact:
hVIVO plc +44 (0) 20 7756 1300
Yamin 'Mo' Khan, Chief Executive Officer
Stephen Pinkerton, Chief Financial Officer
Liberum Capital (Nominated Adviser and Joint Broker) +44 (0) 20 3100 2000
Ben Cryer, Edward Mansfield, Phil Walker, Will King
finnCap plc (Joint Broker) +44 (0) 20 7220 0500
Geoff Nash, Charlie Beeson, Nigel Birks, Harriet Ward (ECM)
Davy (Euronext Growth Adviser and Joint Broker) +353 (0) 1 679 6363
Anthony Farrell, Niall Gilchrist
Walbrook PR (Financial PR & IR) +44 (0) 20 7933 8780 or hvivo@walbrookpr.com (mailto:hvivo@walbrookpr.com)
Stephanie Cuthbert / Phillip Marriage / +44 (0) 7796 794 663 / +44 (0) 7867 984 082 /
Louis Ashe-Jepson
+44 (0) 7747 515 393
Notes to Editors
About hVIVO
hVIVO plc (ticker: HVO) (formerly Open Orphan plc) is a rapidly growing
specialist contract research organisation (CRO) and the world leader in
testing infectious and respiratory disease vaccines and therapeutics using
human challenge clinical trials. The Group provides end-to-end early clinical
development services to its large, established and growing repeat client base,
which includes four of the top 10 largest global biopharma companies.
The Group's fast-growing services business includes a unique portfolio of 11
human challenge models, with a number of new models under development, to test
a broad range of infectious and respiratory disease products. The Company has
world class challenge agent manufacturing, specialist drug development and
clinical consultancy services via its Venn Life Sciences brand, and a lab
offering via its hLAB brand, which includes virology, immunology biomarker
and molecular testing. The Group offers additional clinical field trial
services such as patient recruitment and clinical trial site services.
hVIVO runs challenge studies in London from its Whitechapel quarantine
clinic, its state-of-the-art QMB clinic with its highly specialised on-site
virology and immunology laboratory, and its clinic in Plumbers Row. To
recruit volunteers / patients for its studies, the Company leverages its
unique clinical trial recruitment capability via its FluCamp
(https://eur05.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.flucamp.com%2F&data=05%7C01%7CCarol.Dalton%40openorphan.com%7Cfb9f1a50aaa9492d81ed08da875cca71%7C131abc777e104bbd90170559abc5d601%7C1%7C0%7C637971129881295595%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=fQdtQTHu9Bo70yRgWcZW5liNTXPYiWl9YayUA01E%2FlA%3D&reserved=0)
volunteer screening facilities in London and Manchester.
Chairman's Statement
For the year ended 31 December 2022
2022 - A Transformative Year for hVIVO
2022 was a record year for hVIVO and its subsidiaries (the "Group"), in which
we delivered another period of profitable and significant growth, as the Group
reaffirmed its position as the world leader in the testing of vaccines and
therapeutics using human challenge studies. hVIVO ended the year in a strong
financial position, with revenues up 30% year-on-year, EBITDA increasing
threefold and EBITDA margins increasing to 17.9%, substantially above market
expectations. This exceptional performance has resulted in strong cash
generation in 2022. To recognise the Group's performance, the Group will make
a one‐off, special dividend to shareholders of 0.45p per share (c. £3.0
million aggregate payment).
hVIVO made excellent operational progress during the year, as the Group
delivered seven challenge trials supported by expanded FluCamp screening
facilities while building a record contracted orderbook that provides
excellent visibility on future revenues that now stretches into H1 2024. hVIVO
also broadened and diversified its offering to include new human challenge
models, as well as new laboratory and clinical services, which have added
additional revenue streams and improved both utilisation and margins.
Organisational excellence
In 2022, the Group continued to deliver on its strategy to build a world-class
and focused CRO business. In February 2022, we appointed Yamin 'Mo' Khan as
CEO to continue our growth trajectory and build upon the Group's foundations.
Mo brought over 25 years of specialist CRO experience to hVIVO and significant
industry pedigree, and I am delighted by his impact on the business. Under
his leadership, the Group has built a record orderbook of £76m, a sixfold
growth since 2019, and demonstrated highly efficient operational delivery,
resulting in much improved margins, continued outstanding growth and
significant momentum.
Mo has been supported by Stephen Pinkerton, who was appointed CFO in October
2022. Stephen has been with hVIVO since 2017 and has played a leading role in
transforming hVIVO's financial position and how we report and forecast our
business model, developing pricing models for contracts to help improve
average contract value as well as driving margin improvements across the
business.
There have also been further changes to the Board, with Martin Gouldstone
joining as an Independent Non‐Executive Director in June 2022. Martin brings
30 years of corporate development experience in the CRO, healthcare and
pharmaceutical sectors. His experience executing deals across Europe has been
important as we continue to internationalise the use of human challenge
trials. Following Mo's appointment, I have reverted to the position of
Non-Executive Chairman of the Board. I remain fully committed to hVIVO and
look forward to continuing to support Mo as he continues to drive our growth
strategy forward.
In February 2022, the results from the world's first COVID‐19 human
challenge trial were published in peer reviewed journal Nature Medicine. The
results provided unique insights into COVID‐19 disease progression and
underlined that a COVID‐19 human challenge trial is safe in healthy young
adults. The study was a strong endorsement for human challenge trials and we
believe it was pivotal in bringing greater worldwide attention to hVIVO,
acting as a catalyst to our subsequent growth.
ESG has become an area of significant importance for UK corporates, and I am
delighted to report that the Group has established a cross‐business working
group ("ESG Group"), which is focused on identifying the risks and
opportunities arising from climate change and other social and governance
topics. Mo leads the ESG Group which contains representatives from each area
of our business and reports directly into the Audit and Risk Committee. The
ESG Group will report twice yearly to the Committee, which are responsible for
reviewing the Group's ESG reporting and making recommendations to the Board.
Non-core assets
Due to the challenging market conditions, the Board has made a number of
updates in relation to hVIVO's non-core assets. The Group holds 62.62% of PrEP
Biopharm Limited and despite dedicating resources to realising value from this
asset over the past number of years, due to difficult market conditions the
directors of PrEP Biopharm will commence the process of a solvent liquidation
of PrEP Biopharm in the coming months. In 2018 the Group's investment in PrEP
Biopharm was fully impaired and since then has had a nil value in the Group's
financial statements.
The Group also holds 49% of Imutex Limited with PepTcell Limited holding 51%.
Management have performed an impairment assessment of this asset and
determined that a full impairment of the carrying amount of the investment in
Imutex is prudent. This impairment reflects a write down from £7,005,000
to Nil as at 31 December 2022.
The Board has decided to postpone all activities relating to the spin-out of
Disease in Motion and pursue other growth opportunities that are more aligned
with our near term strategic objectives as a human challenge trial business.
Outlook
hVIVO has had a strong start to 2023 with the Group well capitalised, debt
free, and with full visibility for the current financial year and into H1
2024. I believe we have a world‐class organisation led by a specialist
management team that is well placed to lead and leverage the growth in the
human challenge trial market and further strengthen our position as the world
leader in the field. While we have had one cancellation in the year, the
growing and diverse orderbook from new and existing Big Pharma and biotech
clients provides excellent forward visibility and the ability to drive
operational leverage through improved utilisation. We remain confident that
the Group will continue to leverage its world leading position amidst
favourable market dynamics and that hVIVO will continue to deliver profitable
and sustainable growth into 2023 and beyond.
Cathal Friel
Chairman
24 April 2023
CEO Statement
For the year ended 31 December 2022
Building a long-term sustainable business model
I am pleased to report that hVIVO has delivered its most significant year of
growth to date, establishing our position as the leading provider of human
challenge trial services. Our strong performance has resulted in record
revenues and EBITDA, with no debt and a robust cash balance of £28.4 million,
laying a strong foundation for building sustainable future growth. The record
contracted orderbook is indicative of the growing human challenge market and
positions us well for 2023 and beyond.
Since my appointment in February 2022, building our contracted orderbook has
been our first priority to provide a strong foundation, increase our forward
visibility and open avenues for increased efficiencies in managing our cost
base. Our contracted orderbook and operational model of running multiple
challenge trials concurrently have enabled us to increase the utilisation of
our quarantine facility, achieve operational efficiencies, and drive our
EBITDA margins to record levels. I am also delighted with Venn Life Sciences'
solid performance, where we continue to provide drug development consulting
services to a broad range of clients. We are now generating an increased
volume of cross‐selling opportunities between Venn and hVIVO, creating an
end‐to‐end early clinical development service offering.
The excellent growth and operational delivery in 2022 are a testament to our
outstanding team of world‐class scientists, clinicians and staff who are
turning the human challenge trials concept into a vital cog in the global
clinical development pathway. I would also like to take this opportunity to
thank our volunteers who unselfishly dedicate their time to improving
healthcare for the rest of society.
Record results
The Group reported record full year revenues of £50.7 million (2021: £39.0
million), a significant increase of 30% compared to 2021. The Group's
contracted orderbook increased to £76 million, up 65% year‐on‐year (2021:
£46 million), and over sixfold since 2020 (2019: £12 million). Driving this
growth is the continued expansion of the human challenge market and the
increasing utility of challenge study data. hVIVO has led the industry in
creating market awareness and educating the global biopharma industry to the
value of human challenge data as a means of de‐risking late‐stage clinical
trials. This has manifested in increased demand for larger sample sizes (i.e.,
more volunteers) and unique full‐service contracts that include bespoke
challenge agent manufacturing, characterisation study, and human challenge
trial. hVIVO is in the unique position to deliver these end‐to‐end
full‐service projects.
EBITDA profit margins increased to 17.9% (2021: 7.4%), significantly ahead of
previous guidance of 13‐15%. This was driven by strong trading and execution
of challenge trials, operational efficiencies achieved through running
multiple concurrent trials and the recognition of postponement and
cancellation fees (for a one‐time aggregate of over £1 million). The
advanced fees from the orderbook growth and increased operational delivery
resulted in a record cash position of £28.4 million as at 31 December 2022
(2021: £15.7 million).
Due to the excellent financial performance in 2022, the Group will make a
one‐off, special dividend to shareholders of 0.45p per share, to be
approved at the Annual General Meeting. This reflects the Group's exceptional
cash generation in the year, in addition to its robust balance sheet.
Superb customer delivery
In 2022, hVIVO continued to solidify its position as the world leader in human
challenge trials by serving several new and repeat customers. Our global
client base has access to our unrivalled portfolio of infectious and
respiratory disease challenge models. Most notable of these is four of the top
10 global biopharma companies. This trend highlights the growing inclusion of
human challenge trials into the clinical development pathway of their clinical
assets. We anticipate that this year‐on‐year repeat business from
influential decision makers in the global biopharma industry will continue to
have a positive impact on the worldwide demand for human challenge trials.
hVIVO also provided services to several new and repeat biotech customers,
further expanding our diverse and loyal client base across the biopharma
spectrum. As a result, there is immense potential for growth among biotech
companies, as the cost‐effective human efficacy data generated by human
challenge trials becomes increasingly appealing in a tight funding
environment. Positive efficacy data can significantly boost the value of an
asset, which can be transformative for biotechs. Additionally, challenge trial
data can accelerate time‐to‐market for vaccines and antivirals by up to
three years, enabling biopharma companies to maximise revenues for their
products whilst their patents are active.
Key projects
In 2022, we delivered several landmark projects for our clients across our
world‐leading portfolio of human challenge study models. These projects
included the inoculation of 413 volunteers, representing a 32% increase from
the previous year.
Two key themes among our contract wins in 2022 were the end‐to‐end human
challenge contracts and larger volunteer sample size per challenge study.
Notably, the trend towards larger sample sizes indicates that the industry is
recognising the value of human challenge data as a means of achieving greater
utility of data and pursuing lower frequency trial endpoints to further
de‐risk their programs ahead of late‐stage field studies.
Our enhanced sales strategy and increased market awareness have led to record
sales numbers, with several significant contracts highlighted below:
· £14.7m contract for manufacture, characterisation and
challenge study for Big Pharma client
· £13.6m contract for a challenge trial with a US‐based
biopharmaceutical client
· £10.4m contract for manufacture and challenge trial for a Big
Pharma client
· £7.3m challenge trial for a leading biotech
· £7.2m challenge trial with a Big Pharma client
The value proposition of human challenge trials has been further reinforced by
the positive results from human challenge trials conducted by hVIVO. For
example, Pfizer received FDA breakthrough designation for its RSV vaccine
candidate for older adults following a successful Phase IIa human challenge
study conducted by hVIVO. The FDA is now expected to make a final decision on
whether to approve the candidate in 2023 as the world's first RSV vaccine.
Similarly, Bavarian Nordic received FDA breakthrough designation in 2022 for
its RSV vaccine candidate, MVA‐BN(®) RSV, following a successful human
challenge trial conducted by hVIVO. We are proud to have played a significant
role in advancing the clinical development of several important RSV vaccine
and antiviral candidates that have the potential to alleviate the significant
burden of RSV on patients as well as global healthcare systems.
Efficiency initiatives
The significant growth in profitability during the period can be attributed to
the implementation of operational efficiency initiatives across the business.
Previously, hVIVO conducted only one challenge trial at a time, which
heightened the financial impact of any cancellations or postponements.
However, the Group can now concurrently run multiple human challenge trials
across its facilities and has devised a flexible booking model with quarterly
slot assignments that provides greater adaptability. This capability enables
hVIVO to maintain high levels of occupancy at its quarantine clinics,
regardless of changes or delays in clients' programs. This will be a key
driver in improving EBITDA margins from historical levels.
The increased throughput of challenge studies is supported by the re‐vamped
FluCamp platform. Enhancements to the volunteer recruitment system include the
implementation of online self‐booking, online screening, and a new CRM to
manage more effectively the database of volunteers. These technological
upgrades, in addition to the new London and Manchester volunteer screening
sites and greater utilisation of volunteers, have resulted in more consistent
lead generation through new and existing marketing channels, as well as
improved conversion rates. A considerable number of volunteers recruited
possess pre‐existing immunity to specific strains, and we now screen
volunteers against multiple challenge agents, significantly increasing the
probability of volunteers entering our challenge trials and improving
volunteer utilisation. These changes have been vital as hVIVO continues to
expand and deliver on its growth strategy.
Diversifying our services
hVIVO has continued to expand its revenue streams by offering additional
services which can benefit our clients' clinical development portfolios. Our
full‐service offering is a unique proposition that involves custom
challenge agent manufacturing and characterisation followed by a human
challenge trial. This has generated significant interest from both Big Pharma
and biotechs, especially as the global biopharma industry seeks to test
vaccine and antivirals against specific virus subtypes that are circulating in
the population.
In 2022, we launched our Malaria human challenge model and completed the
manufacture of an Omicron human challenge agent in Q1 2023. We are in
discussions with a number of potential customers in relation to these new
models. The continued diversification of our portfolio of challenge models
will be a key market differentiator, consolidating our position as the world
leader in challenge trials. We plan to add more new models in 2023 and beyond
to address growing demand from new and existing customers.
We have also expanded our CRO service offering, increasing staff and
facility utilisation at our clinical and laboratory facilities. Our new
clinical site services include utilising the upgraded infrastructure at our
Plumbers Row facility for single site or multi‐centre Phase II‐III vaccine
field trials. Our first contract in this area was signed with a global pharma
company in 2022. These studies enable us to leverage our valuable database of
volunteers who are ineligible to participate in human challenge trials.
In addition, our laboratory services have been expanded by increasing the
volume of stand‐alone laboratory services contracts. We received the College
of American Pathologists (CAP) accreditation as part of our ongoing commitment
to maintaining the best‐in‐class quality systems. This key accreditation
provides additional quality assurances of our laboratory services for our
clients, particularly in the US, and has increased the marketability of our
laboratory services.
A long-term market focus - APAC
While our main client base remains in the US and Europe, we have identified
the Asia Pacific (APAC) region as a key long term market focus. The APAC
clinical market is growing rapidly, with nearly 8,000 clinical trials
initiated in the APAC region in 2021, with China being the main driver. At the
start of 2023, the Group signed its first human challenge trial contract with
an APAC client in over a decade, and this region remains a key focus for our
BD team. We will continue to capitalise on opportunities from the APAC region.
Venn Life Sciences
The Venn Life Sciences subsidiary has demonstrated solid performance in 2022,
buoyed by ongoing robust relationships with repeat customers. The team in
Breda (Netherlands) has shown steady growth across all disciplinary areas
(CMC, Non‐Clinical, Clinical, QA). The Pharmacokinetics and Biomarker PM
Services in particular have experienced a strong business expansion by
providing dedicated services. The Paris team continues to deliver Data
Management and Biostatistics services to third‐party customers, as well as
increasing collaboration on hVIVO's challenge studies. We are excited by the
cross‐selling opportunities with hVIVO in the areas of clinical site and
laboratory services and seamless drug development support service
("Bench‐to‐Bed") through our expertise, making it attractive for clients
to conduct hVIVO challenge studies.
Summary
I am delighted to report that the Group's performance in 2022 exceeded
expectations, with hVIVO delivering record growth numbers across the board. I
am very proud of our team's adaptability and commitment to achieving these
results despite the changes we have implemented. The financial performance for
2022 is only beginning to reflect the commitment of the team and the
excitement we have as we start this new journey.
Looking forward, it is critical to establish a long‐term sustainable growth
model. A key forward looking metric is our record contracted orderbook, with
full visibility for the current financial year and into H1 2024. I am
confident that our improved sales and operational strategies will enable us to
address the growing human challenge market. Our focus will be on marketing our
existing challenge models, developing new models and targeting new markets,
such as the APAC region. Furthermore, we will expand our non‐challenge work
including clinical consulting in new areas such drug‐device combination and
ATMP, as well as Laboratory Services and Clinical Site Services.
I strongly believe that our operational model is now optimised to deliver
long‐ term, sustainable growth and improved profitability. As the world
leader in the human challenge market, we remain confident in our ability to
deliver value for our shareholders.
Yamin 'Mo' Khan
CEO
24 April 2023
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Year to Year to
31 December 31 December
2022 2021
£'000 £'000
Operations
Revenue, from contracts with customers 48,477 36,864
Other operating income 2,220 2,141
Direct project and administrative costs (41,625) (36,117)
EBITDA before exceptional items 9,072 2,888
Depreciation & amortisation (2,930) (2,565)
Exceptional items (119) 267
Operating profit 6,023 590
Finance income/(expense) 617 (215)
Share based payment charge - (27)
Impairment of investment in associate (6,957) -
Share of loss of associate using equity method (48) (71)
(Loss)/Profit before income tax (365) 277
Income tax (charge) (411) (351)
(Loss) for the year (776) (74)
(Loss) for the year is attributable to:
Shareholders (776) (74)
Other comprehensive income
Currency translation differences 27 (111)
Total comprehensive (loss) for the year (749) (185)
Earnings per share from operations attributable to shareholders during the
year:
Basic and diluted (loss) per ordinary share
From operations (0.12p) (0.01p)
Earnings per share from operations attributable to shareholders during the
year:
Adjusted and diluted profit/(loss) per ordinary share
From operations 0.90p (0.19p)
All activities relate to continuing operations.
Consolidated and Company's Statement of Financial Position
As at 31 December 2022
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 6,023 6,219 - -
Property, plant and equipment 1,513 927 - -
Investment in associates - 7,005 - -
Investments in subsidiaries - - 22,377 22,377
Right of use asset 1,610 2,788 - -
Total non-current assets 9,146 16,939 22,377 22,377
Current assets
Inventories 499 659 - -
Trade and other receivables 12,900 8,944 11,636 9,692
Current tax recoverable 391 38 15 10
Cash and cash equivalents 28,444 15,694 2,799 8,663
Total current assets 42,234 25,335 14,450 18,364
Total assets 51,380 42,274 36,827 40,741
Equity attributable to owners
Share capital 671 671 671 671
Share premium account 4 1 4 1
Merger reserves (6,856) (6,856) (2,241) (2,241)
Share based payment reserve 578 327 578 327
Foreign currency reserves 1,358 1,331 2,014 2,014
Retained earnings 24,463 25,206 35,438 36,767
Total equity 20,218 20,680 36,464 37,539
Liabilities
Non-current liabilities
Lease liabilities 737 863 - -
Leasehold provision 660 40 - -
Total non-current liabilities 1,397 903 - -
Current liabilities
Trade and other payables 28,869 18,396 363 3,202
Lease liabilities 826 1,991 - -
Leasehold provision 70 10 - -
Borrowings - 294 - -
Total current liabilities 29,765 20,691 363 3,202
Total liabilities 31,162 21,594 363 3,202
Total equity and liabilities 51,380 42,274 36,827 40,741
The notes following the financial statements are an integral part of these
financial statements.
The financial statements were approved and authorised for issue by the Board
on 24 April 2023.
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the parent Company's Statement of
Comprehensive Income. The loss for the parent Company for the year was
£1,362,000 (2021: loss of £1,522,000).
hVIVO Plc (formerly Open Orphan Plc)
Yamin Mo Khan -
CEO
Registered no: 07514939
Consolidated and Company's Statement of Changes in Shareholders' Equity
Share Foreign
Share Share Merger Option currency Retained
capital premium reserve reserve reserve earnings Total
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 731 44,480 (6,856) 493 1,442 (17,993) 22,297
Changes in equity for the Year ended 31 Dec 2021
Loss for the year - - - - - (74) (74)
Currency differences - - - - (111) - (111)
Total comprehensive losses for the year - - - - (111) (74) (185)
Transactions with the owners
Share based payment res. - - - (166) - 193 27
Shares issued 3 37 - - - - 40
Capital reduction (63) (44,516) - 44,579 -
Distribution in specie - - - - - (1,500) (1,500)
Total contributions by and distributions to owners (60) (44,479) - (166) - 43,272 (1,433)
At 31 December 2021 671 1 (6,856) 327 1,331 25,206 20,680
Changes in equity for the Year ended 31 Dec 2022
Loss for the year - - - - (776) (776)
Currency differences - - - - 27 - 27
Total comprehensive income/(loss) for the year - - - - 27 (776) (749)
Transactions with the owners
Share based payment res. - - - 251 - 33 284
Shares issued - 3 - - - - 3
Total contributions by and distributions to owners - 3 - 251 - 33 287
At 31 December 2022 671 4 (6,856) 578 1,358 24,463 20,218
Share Foreign
Share Share Merger option currency Retained
capital premium reserve reserve reserve earnings Total
Company £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 731 44,480 (2,241) 493 2,573 (4,983) 41,053
Changes in equity for the year ended 31 December 2021
Total comprehensive loss for year - - - - - (1,522) (1,522)
Share based payment res. - - - (166) - 193 27
Currency differences - - - - (559) - (559)
Shares issued 3 37 - - - - 40
Capital reduction (63) (44,516) - - - 44,579 -
Distribution in specie - - - - - (1,500) (1,500)
Total contributions by and distributions to owners (60) (44,479) - (166) (559) 41,750 (3,514)
At 31 December 2021 671 1 (2,241) 327 2,014 36,767 37,539
Changes in equity for the year ended 31 December 2021
Total comprehensive loss for year - - - - - (1,362) (1,362)
Share based payment res. - - - 251 - 33 284
Shares issued - 3 - - - - 3
Total contributions by and distributions to owners - 3 - 251 - (1,329) (1,075)
At 31 December 2022 671 4 (2,241) 578 2,014 35,438 36,464
Consolidated and Company's Statement of Cash Flows
For the year ended 31 December 2022
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Cash Flow from operating activities
Continuing operations
Cash generated/(used) in operations 14,508 (539) (5,888) 680
Income tax (R & D) received 1,473 1,304 -
Net cash generated /(used) in operating activities 15,981 765 (5,888) 680
Cash flow from investing activities
Investment in new subsidiary - - - (43)
Purchase of property, plant and equipment (1,275) (329) - -
Purchase of intangible asset (87) (410) -
Net cash used in investing activities (1,362) (739) - (43)
Cash flow from financing activities
Lease payments (2,178) (2,329) - -
Proceeds from issuance of ordinary shares & options 3 40 3 40
Exceptional Costs re RTO, spin‐out & restructuring - (1,169) - (409)
Interest & FX gains received /(paid) 635 (21) 19 -
Stamp Duty re capital reduction - - - (7)
Repayment of Convertible Debenture Security (294) (45) - (45)
Net cash (used)/generated by financing activities (1,834) (3,524) 22 (421)
Net increase/(decrease) in cash and cash equivalents 12,785 (3,498) (5,866) 216
Cash and cash equivalents at beginning of year 15,694 19,205 8,663 8,689
FX translation (35) (13) 2 (242)
Cash and cash equivalents at end of year 28,444 15,694 2,799 8,663
Notes to the Financial Statements
For the year ended 31 December 2022
1. Presentation of the financial statements
Description of business
hVIVO Plc (formerly Open Orphan Plc) is a rapidly growing specialist CRO
pharmaceutical services group of companies which is the world leader in the
testing of vaccines and antivirals using human challenge clinical trials.
The Group has a presence in the UK, Ireland, France and Netherlands.
Its parent company hVIVO Plc is a company incorporated in England and Wales.
The Company is a public limited company, limited by shares, listed on the AIM
market of the London Stock Exchange and on Euronext Growth in Dublin.
Basis of preparation
The financial statements have been prepared in accordance with the Group's
accounting policies approved by the Board, 'Critical accounting estimates and
judgements. The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The financial statements have been prepared in accordance with UK adopted
international accounting standards ("IFRS"), and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRSFigures are
presented in £000s.
Parent company financial statements
The financial statements of the parent company, hVIVO plc, have been prepared
in accordance with IFRS and with UK accounting presentation.
Composition of financial statements
The consolidated financial statements are drawn up in GBP£, the functional
currency of hVIVO plc, and in accordance with IFRS accounting presentation.
The financial statements comprise:
· Consolidated statement of comprehensive income
· Consolidated statement of financial position
· Consolidated statement of changes in equity
· Consolidated cash flow statement
· Notes to the financial statements
Composition of the Group
The Group comprises hVIVO Plc (formerly Open Orphan Plc) and its subsidiary
companies.
Financial period
These financial statements cover the financial year from 1 January to 31
December 2022, with comparative figures for the financial year from 1 January
to 31 December 2021.
Accounting principles and policies
Going Concern
The financial statements have been prepared using the historical cost
convention modified by the revaluation of certain items, as stated in the
accounting policies, and on a going concern basis. The Directors consider the
use of the going concern basis to be appropriate given the significant cash
reserves at year end and strong contracted order book. The Directors have
prepared working capital projections which show that the Group & Company
will be able to continue as a going concern.
2. Summary of significant accounting policies
Consolidation
The consolidated financial statements include:
· the assets and liabilities, the results and cash flows, of
the Company and its subsidiaries.
· the Group's share of the results and net assets of
associates.
· the Group's share of assets, liabilities, revenue and
expenses of associates.
Entities over which the Group has the power to direct the relevant activities
so as to affect the returns to the Group, generally through control over the
financial and operating policies, are accounted for as subsidiaries. Where the
Group has the ability to exercise significant influence over entities, they
are accounted for as associates. The results and assets and liabilities of
associates are incorporated into the consolidated financial statements using
the equity method of accounting. The assets, liabilities, revenue and expenses
of associates are included in the consolidated financial statements in
accordance with the Group's rights and obligations. Interests acquired in
entities are consolidated from the date the Group acquires control and
interests sold are de‐consolidated from the date control ceases.
Transactions and balances between subsidiaries are eliminated and no profit
before tax is taken on sales between subsidiaries until the products are sold
to customers outside the Group. The relevant proportion of profits on
transactions with associates is also deferred until the products are sold to
third parties. Transactions with non‑controlling interests are recorded
directly in equity. Deferred tax relief on unrealised intra‐Group profit is
accounted for only to the extent that it is considered recoverable.
New accounting requirements
Amendments to accounting standards issued by the IASB and adopted in the year
ended 31 December 2022 did not have a material impact on the results or
financial position of the Group. Certain new accounting standards, amendments
to accounting standards and interpretations have been published that are not
mandatory for 31 December 2022 reporting periods and have not been adopted
early by the Group. These standards, amendments and interpretations are not
expected to have a material impact on the results or financial position of the
Group in future reporting periods.
Business combinations
The Group uses the acquisition method of accounting to account for business
combinations. The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred, the liabilities
incurred, and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration agreement. Acquisition related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date. On an acquisition by acquisition basis,
the Group recognises any non‑controlling interest in the acquiree either at
fair value or at the non‐controlling interest's proportionate share of the
acquiree's net assets.
The excess of the consideration transferred, the amount of any
non‐controlling interest in the acquiree and the acquisition date fair value
of any previous equity interest in the acquiree over the fair value of the
Group's share of the identifiable net assets acquired is recorded as goodwill.
If this is less than the fair value of the net assets of the subsidiary
acquired in the case of a bargain purchase, the difference is recognised
directly in the Statement of Comprehensive Income.
Investments in subsidiaries are accounted for at cost less impairment. Cost is
adjusted to reflect changes in consideration arising from contingent
consideration amendments.
Associates
Associates are all entities over which the group has significant influence but
not control or joint control as defined under IAS28. Investments in associates
are accounted for using the equity method of accounting (see equity method
below), after initially being recognised at cost less any fair value
adjustment.
Equity Method:
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the group's share of
the post‐acquisition profits or losses of the investee in profit or loss,
and the group's share of movements in other comprehensive income of the
investee in other comprehensive income. Dividends received or receivable from
associates are recognised as a reduction in the carrying amount of the
investment.
When the group's share of losses in an equity‐accounted investment equals or
exceeds its interest in the entity, including any other unsecured long‐term
receivables, the group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the group and its associates are
eliminated to the extent of the group's interest in these entities. Unrealised
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
Accounting policies of equity accounted investees have been changed where
necessary to ensure consistency with the policies adopted by the group. The
carrying amount of equity‐accounted investments is tested for impairment.
Foreign currency translation
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The consolidated financial
statements are presented in GBP£, which is the functional and presentation
currency of the main operating entities.
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions where
items are re‐measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year‐end
exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the Statement of Comprehensive Income within
'direct project and administrative expenses', except when deferred in other
comprehensive income as qualifying cash flow hedges and qualifying net
investment hedges.
The results and financial position of all the Group entities (none of which
has the currency of a hyper‐inflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentational currency as follows:
· assets and liabilities presented are translated at the
closing rate at the date of that reporting period;
· income and expenses are translated at average exchange
rates; and
· all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation of the
net investment in foreign operations are taken to other comprehensive income.
When a foreign operation is partially disposed of or sold, exchange
differences that were recorded in equity are recognised in the Statement of
Comprehensive Income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
monthly management reporting provided to the chief operating
decision‐makers. The chief operating decision‐makers ("CODM"), who are
responsible for allocating resources and assessing performance of the
operating segments, have been identified as the Executive Directors and
Non‐Executive Chairman who make strategic decisions.
The first principal activity of the Group is conducting human challenge trials
and related laboratory services in London though the hVIVO Services
subsidiary. This work is supported by our second principal activity, which is
providing a suite of consulting and early clinical trial services to
pharmaceutical, biotechnology and medical device organisations, in London and
also in Paris and Breda though Venn Life sciences Biometry Services, Venn Life
Sciences Ltd and Venn Life Sciences ED B.V.
Previously the Group reported results under two segments, hVIVO and Venn but
as the Group has become more integrated, internal management reporting
provided to the CODM is on a consolidated basis. As many of our business
contracts are multi‐country contracts, pulling resources from many
different locations, the CODM considers the group to be one business unit.
Management therefore considers both operating segments to form one reporting
segment for disclosure purposes.
Revenue
Revenue from contracts
The Group enter into fixed‐price and multi‐service contracts with
customers. Revenue from contracts with customers is recognised at an amount
that reflects the consideration to which the Group expects to be entitled in
exchange for the goods or services and is shown net of Value Added Tax.
Revenue is recognised based on the actual service provided to the end of the
reporting period as a proportion of the total services to be provided because
the customer receives and uses the benefits simultaneously. This is determined
by labour hours incurred to the period end as a percentage of the total
estimated labour hours for the contract or as considered recoverable in
respect of each individual performance obligation.
Payment terms tend to vary between 30 and 90 days.
Provisions for losses to be incurred on contracts are recognised in full in
the period in which it is determined that a loss will result from the
performance of the contractual arrangement.
The difference between the amount of revenue from contracts with customers
recognised and the amount invoiced on a particular contract is included in the
statement of financial position as deferred income. Amounts become billable in
advance upon the achievement of certain milestones, in accordance with
pre‐agreed invoicing schedules included in the contract or on submission of
appropriate detail. Any cash payments received as a result of this advance
billing are not representative of revenue earned on the contract as revenues
are recognised over the period during which the specified contractual
obligations are fulfilled. Amounts included in deferred income are expected to
be recognised within one year and are included within current liabilities.
In the event of contract termination, if the value of work performed and
recognised as revenue from contracts with customers is greater than aggregate
milestone billings at the date of termination, cancellation clauses provide
for the Group to be paid for all work performed to the termination date.
Other operating income (mainly research & development tax credits/R&D
tax credits)
R&D tax credits are multi‐government backed tax incentive that allows
companies to claim back some of the costs they have incurred on research,
development and innovation. These are non taxable and involve high level of
management judgement.
Interest income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable.
Exceptional items
These are items of an unusual or non‐recurring nature incurred by the Group
and include transactional costs and one‑off items relating to business
combinations, such as acquisition expenses, restructuring and redundancy
costs.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated
depreciation and any provision for impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the asset and
bringing the asset to its working condition for its intended use.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only where it is probable that future
economic benefits associated with the asset will flow to the Group and the
cost of the asset can be measured reliably. The carrying amount of the
replaced part is derecognised. All other repairs and maintenance are charged
to the Statement of Comprehensive Income during the financial period in which
they are incurred. Any borrowing costs associated with qualifying property,
plant and equipment are capitalised and depreciated at the rate applicable to
that asset category.
Depreciation on assets is calculated using the straight‐line method or
reducing balances method to allocate their cost to its residual values over
their estimated economic useful lives, as follows:
Leasehold Improvements the shorter of five years or the
life of the lease
Plant & Machinery four years
Fixtures and fittings three to five
years
The assets' residual values and useful economic lives are reviewed regularly,
and adjusted if appropriate, at the end of each reporting period.
An asset's carrying value is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on the disposal of assets are determined by comparing the
proceeds with the carrying amount and are recognised in direct project
administration expenses in the Statement of Comprehensive Income.
Intangible assets
(a) Goodwill
Goodwill represents the excess amount of the cost of an acquisition over the
fair value of the Group's share of the net identifiable assets of the acquired
underlying businesses at the date of the acquisition. Goodwill on acquisitions
of businesses is included in intangible assets. In normal cases goodwill has
an indefinite useful life and is tested annually for impairment and carried at
cost less accumulated impairment losses. Impairment losses on goodwill are not
reversed. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Goodwill is allocated to cash‐generating units for the purpose of impairment
testing. The allocation is made to those cash‐generating units or groups of
cash‐generating units that are expected to benefit from the business
combination in which the goodwill arose.
(b) Intellectual property rights
Intellectual property rights relate to patents acquired by the Group.
Amortisation is calculated using the straight‐line method over the expected
life of no more than 10 years and is charged to direct project and
administrative expenses in the Statement of Comprehensive Income.
(c) Capitalised Software development and wearables development
Internally generated intangible assets involving research and development
expenditure.
Expenditure on research activities is recognised as an expense in the period
in which it is incurred. Development costs are capitalised when the related
products meet the recognition criteria of an internally generated intangible
asset, the key criteria being as follows:
· technical feasibility of the completed intangible asset has
been established;
· it can be demonstrated that the intangible asset will
generate probable future economic benefits;
· adequate technical, financial and other resources are
available to complete the development;
· the expenditure attributable to the intangible asset can be
reliably measured; and
· management has the ability and intention to use or sell the
intangible asset.
Expenses for research and development include associated wages and salaries,
material costs, depreciation on non‑current assets and directly attributable
overheads. Development costs recognised as assets are amortised over their
expected useful life.
Impairment of non-financial assets
Assets that have an indefinite life such as Goodwill are not subject to
amortisation and are tested annually for impairment. Assets that are subject
to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the carrying amount
exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less costs to
sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre‐tax discount rate
that reflects current market assessments of the time value of money and the
risks specific to the asset which the estimates of future cash flows have not
been adjusted.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows. Impairment
losses recognised for cash‐generating units, to which Goodwill has been
allocated, are credited initially to the carrying amount of Goodwill. Any
remaining impairment loss is charged pro rata to the other assets in the
cash‐generating unit.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash‐generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash‐generating unit) in the prior period. A
reversal of an impairment loss is recognised in the Statement of Comprehensive
Income immediately. If Goodwill is impaired however, no reversal of the
impairment is recognised in the financial statements.
Investments in associates
Investments in associates are carried in the Consolidated Statement of
Financial Position at the Group's share of their net assets at date of
acquisition and of their post‐acquisition retained profits or losses and
other comprehensive income together with any goodwill arising on the
acquisition. The Group recognises the assets, liabilities, revenue and
expenses of joint operations in accordance with its rights and obligations.
As of 31 December 2022, in view of little progress made to move either of
Imutex's portfolio towards commercialisation, management does not consider
carrying value of the investment in Imutex Limited of £6.9m supported. Full
impairment is therefore considered appropriate.
Right of use assets
The Group recognises right of use assets at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Right of use
assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of
right of use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the Group is
reasonably certain to obtain ownership of the leased asset at the end of the
lease term, the recognised right of use assets is depreciated on a
straight‐line basis over the shorter of its estimated useful life and the
lease term.
Short-term leases and leases of low-value assets
The Group applies the short‐term lease recognition exemption to its
short‐term leases of machinery and equipment (i.e., those leases that have a
lease term of 12 months or less from the commencement date and do not contain
a purchase option). It also applies the lease of low‐value assets
recognition exemption to leases of office equipment that are considered of low
value (i.e., below $5,000). Lease payments on short‐term leases and leases
of low‐value assets are recognised as expense on a straight‐line basis
over the lease term.
Inventories
Inventories are reported at the lower of cost (purchase price and/or
production cost) and net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business, less estimated
costs of completion and applicable variable selling expenses.
Financial instruments
Financial assets
The financial assets of the group consist of trade receivables, accrued
income, cash and other receivables. Financial assets are measured at amortised
cost, fair value through other comprehensive income or fair value through
profit or loss. The measurement basis is determined by reference to both the
business model for managing the financial asset and the contractual cash flow
characteristics of the financial asset. A lifetime expected credit loss (ECL)
allowance is recorded on initial recognition of a financial asset. If there is
subsequent evidence of a significant increase in the credit risk of an asset,
the allowance is increased to reflect the full lifetime ECL. If there is no
realistic prospect of recovery, the asset is written off. ECLs are recognised
in the Statement of Comprehensive Income.
Cash and cash equivalents
Cash and short‐term deposits in the Statement of Financial Position comprise
cash at bank and in hand and short‑term deposits with an original maturity
of less than three months, reduced by overdrafts to the extent that there is a
right of offset against other cash balances.
Financial liabilities
The financial liabilities of the group consist of trade payables, accrued
expenses, lease liabilities, and borrowings. Financial liabilities are
classified as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
Borrowings
Borrowings are recognised initially at the fair value of proceeds received,
net of transaction costs incurred. Borrowings are subsequently carried at
amortised cost. Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting period date.
Borrowing costs are expensed in the consolidated Statement of Comprehensive
Income under the heading 'finance costs'. Arrangement and facility fees
together with bank charges are charged to the Statement of Comprehensive
Income under the heading 'direct project and administrative costs'.
Current and deferred income tax
The tax expense comprises current and deferred tax. Tax is recognised in the
Statement of Comprehensive Income, except to the extent that it relates to
items recognised in other comprehensive income where the associated tax is
also recognised in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws
enacted at the reporting period date in the countries where the Company and
its subsidiaries operate and generate taxable income. Management evaluates
positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred tax assets are recognised for all deductible temporary differences,
carry‐forward of unused tax assets and tax losses, to the extent that they
are regarded as recoverable. They are regarded as recoverable where, on the
basis of available evidence, there will be sufficient taxable profits against
which the future reversal of the underlying temporary differences can be
deducted.
The carrying value of the amount of deferred tax assets is reviewed at each
reporting period date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all, or part, of the
tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is
settled, based on the tax rates (and tax laws) that have been substantively
enacted at the reporting period date.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities and when the deferred income tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable
entity or different taxable entities where there is an intention to settle
the balances on a net basis.
Share capital
Ordinary Shares and Deferred shares are classified as equity. Proceeds in
excess of the nominal value of shares issued are allocated to the share
premium account and are also classified as equity. Incremental costs directly
attributable to the issue of new Ordinary Shares or options are deducted from
the share premium account.
Merger reserve
The reserve represents a premium on the issue of the ordinary shares for the
acquisition of subsidiary undertakings. The relief is only available to the
issuing company securing at least a 90% equity holding in the acquired
undertaking in pursuance of an arrangement providing for the allotment of
equity shares in the issuing company on terms that the consideration for the
shares allotted is to be provided by the issue to the issuing company of
equity shares in the other company.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments (including in‐substance
fixed payments) less any lease incentives receivable, variable lease payments
that depend on an index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and
payments of penalties for terminating a lease, if the lease term reflects the
Group exercising the option to terminate. The variable lease payments that do
not depend on an index or a rate are recognised as expense in the period on
which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the interest rate
implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in‐substance fixed lease payments or a
change in the assessment to purchase the underlying asset.
Employee benefits
Pension obligations
Group companies operate a pension scheme with defined contribution plans,
under which the Group pays fixed contributions into a separate entity with the
pension cost charged to the Statement of Comprehensive Income as incurred.
The Group has no further obligations once the contributions have been paid.
Share-based payment
Where equity settled share options and warrants are awarded to Directors and
employees, the fair value of the options and warrants at the date of grant is
charged to the consolidated statement of comprehensive income over the vesting
period and the corresponding entry recorded in the share‐based payment
reserve. Non‐market vesting conditions are reflected by adjusting the number
of equity instruments expected to vest at each reporting date so that, the
cumulative amount recognised over the vesting period is based on the number of
options that eventually vest.
Leasehold provision
Provisions for dilapidations and onerous lease commitments are recognised when
the Group has a present or constructive obligation as a result of past events.
The recognition of a provision requires management to make best estimates of
the consideration required to settle the present obligation at the end of the
reporting period, reflecting the risks and uncertainties surrounding the
obligation. There is reasonable uncertainty around the likelihood and timing
of the exit of the lease as negotiations will involve third parties.
3. Expenses - analysis by nature
The following items have been included in operating profit:
2022 2021
£'000 £'000
Employee benefit expense 18,081 15,897
Other expenses 23,544 20,220
Total direct project and administrative costs 41,625 36,117
Also included within operating profit are the below depreciation and
amortisation charges:
PPE Depreciation and amortisation 999 523
Depreciation related to Right of use Assets 1,931 2,039
Also included within operating profit are exceptional items as shown below:
2022 2021
£'000 £'000
Exceptional items include:
- Transaction costs relating to business combinations, acquisitions & 119 923
Re‐organisations
- Transaction gain relating to Capital Reduction and spin out - (1,190)
Total exceptional items 119 (267)
Services provided by the Company's auditor and its associates. During the year
the Group (including its overseas subsidiaries) obtained the following
services from the Company's auditor and its associates:
2022 2021
£'000 £'000
Fees payable to Company's auditor for the audit of the parent Company and 52 38
consolidated financial statements
Fees payable to Company's auditor for the audit of subsidiaries and their 37 39
consolidated financial statements
Total paid to the Company auditor 89 77
Fees payable to the auditors of subsidiaries for services:
- The audit of Company's subsidiaries pursuant to legislation paid to other 55 62
auditors
- Other services paid to other auditors 1 7
- Tax services paid to other auditors 2 11
Total paid to other auditors 58 80
Total auditor's remuneration 147 157
4. Directors' emoluments
2022 2021
£'000 £'000
Aggregate emoluments 995 526
Social Security Costs 119 62
Contribution to defined contribution pension scheme 42 17
Total Directors' remuneration 1,156 605
See further disclosures within the Report of the Remuneration Committee.
2022 2021
Highest paid Director £'000 £'000
Total emoluments received 518 172
Defined contribution pension scheme 27 17
A Long‐Term Incentive Plan ("LTIP") was agreed with the highest paid
director during the year. No options were exercised during the year by the
highest paid director.
5. Employee benefit expense
2022 2021
£'000 £'000
Wages and salaries 15,077 13,179
Social security costs 2,100 1,846
Pension costs 904 872
Total employee benefit expense 18,081 15,897
6. Average number of people employed
2022 2021
No No
Average number of people (including Executive Directors) employed was:
Administration 43 38
Clinical research 161 172
Sales and marketing 6 8
Total average number of people employed 210 218
Monthly weighted average used in above calculation.
7. Finance income and costs
2022 2021
£'000 £'000
Interest expense:
- Interest on Lease liabilities (133) (227)
- Interest on other loans 1 7
Finance costs (132) (220)
Finance income
- FX gain on sales & expenses 613 -
- Interest income on cash and short‐term deposits 136 5
Finance income 749 5
Net finance income/(expense) 617 (215)
8. Income tax expense
2022 2021
Group £'000 £'000
Current tax:
Current year research and development tax charge 352 350
Current year other 50 -
Current year hVIVO Inc US tax charge 9 6
Total current tax charge 411 356
Deferred tax (note 20):
Origination and reversal of temporary differences - (5)
Total deferred tax - (5)
Income tax charge 411 351
The income tax charge on the Group's results before tax differs from the
theoretical amount that would arise using the standard tax rate applicable to
the profits of the consolidated entities as follows:
2022 2021
£'000 £'000
(Loss)/Profit before tax (365) 277
Tax calculated at domestic tax rates applicable to UK standard rate of tax of (69) 53
19.00% (2021: 19%)
Tax effects of:
- Expenses not deductible for tax purposes 1,488 168
- VLS Germany tax risk on liquidation 51 -
- Current Year R & D Tax (credit) (194) (108)
- Temporary timing differences (153) (182)
- Adjustments in respect of prior year 33 37
- Additional allowances deductible for tax purposes 125 (79)
- Losses carried forward (870) 462
Income tax charge 411 351
There are no tax effects on the items in the Statement of Comprehensive
Income.
9. Earnings/(Losses) per share
(a) Basic
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the year.
2022 2021
£'000 £'000
Losses for the year (776) (74)
Total (776) (74)
Weighted average number of Ordinary Shares in issue 670,943,918 670,187,313
Losses per share from operations (0.12p) (0.01p)
(b) Adjusted
Adjusted Profit/(Loss) per share is calculated by dividing the Profit/(Loss)
attributable to equity holders of the Company excluding one‐off large
non‐recurring items by the weighted average number of ordinary shares in
issue during the year. In 2022 the impairment of the investment in Imutex is
excluded. In 2021 the net gain on the spin out of the Pilau license asset is
excluded.
2022 2021
£'000 £'000
Losses for the year (776) (74)
Add back Imutex impairment (2022) / Deduct net gain re Pilau (2021) 6,957 (1,190)
Adjusted profit/(Loss) for the year 6,181 (1,264)
Total 6,181 (1,264)
Weighted average number of Ordinary Shares in issue 670,943,918 670,187,313
Earnings/(loss) per share from operations 0.92p (0.19p)
(c) Diluted Basic
Due to the losses in the periods the effect of the share options and warrants
noted below were considered to be anti‐dilutive.
2022 2021
Potential dilutive ordinary shares:
Options 15,502,029 8,393,213
Warrants 2,264,427 2,264,427
Total 17,766,456 10,657,640
(d) Diluted Adjusted
Due to adjusted losses in the prior year the effect of the share options and
warrants noted above were considered to be anti‐dilutive.
2022 2021
£'000 £'000
Earning/(loss) per share 0.90p (0.19p)
10. Property, plant and equipment
Leasehold Plant & Fixtures & 2022 2021
Improvements Machinery Fittings Total Total
Group £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2022 842 2,507 1,111 4,460 5,770
Additions 450 540 286 1,276 329
Disposals - (90) - (90) (1,620)
Exchange differences - - 44 44 (19)
At 31 December 2022 1,292 2,957 1,441 5,690 4,460
Depreciation
At 1 January 2022 706 2,141 686 3,533 4,702
Charge for the year 333 166 217 716 406
Elimination on disposal - (90) - (90) (1,555)
Exchange differences - - 18 18 (20)
At 31 December 2022 1,039 2,217 921 4,177 3,533
Net book value
At 31 December 2022 253 740 520 1,513
At 31 December 2021 136 366 425 927
The Company had no property, plant and equipment at 31 December 2022 (2021:
Nil).
13. Intangible fixed assets
Software Pref right to WBS 2022 2021
Goodwill development reserve slot development Total Total
£'000 £'000 £'000 £'000 £'000 £.000
Cost
At 1 January 2022 7,228 2,199 274 411 10,112 9,701
Additions - 87 - - 87 411
At 31 December 2022 7,228 2,286 274 411 10,199 10,112
Amortisation
At 1 January 2022 1,628 2,173 92 - 3,893 3,801
Charge for the year - 19 182 82 283 92
At 31 December 2022 1,628 2,192 274 82 4,176 3,893
Net book value
At 31 December 2022 5,600 94 - 329 6,023
At 31 December 2021 5,600 26 182 411 6,219
Goodwill was allocated to the Group's single cash‐generating unit (CGU)
identified according to a single operating segment.
2022 2021
£'000 £'000
hVIVO Group 5,600 5,600
Goodwill is tested for impairment at the Statement of Financial Position date.
The recoverable amount of goodwill at 31 December 2022 was assessed at
£5,600,000 (2021: £5,600,000) on the basis of value in use. An impairment
loss was not recognised as a result of this review.
The key assumptions in the calculation to assess value in use are the future
revenues and the ability to generate future cash flows. The most recent
financial results and forecast approved by management for the next two years
were used followed by an extrapolation of expected cash flows at a constant
growth rate for a further seven years. The projected results were discounted
at a rate which is a prudent evaluation of the pre‐tax rate that reflects
current market assessments of the time value of money and the risks specific
to the cash‐generating units.
The key assumptions used for value in use calculations in 2022 were as
follows:
Longer‐term growth rate (from 2023 onwards) 7.5%
Discount rate 15%
The impairment review is prepared on the group basis rather than a single unit
basis.
The Directors have performed a sensitivity analysis to assess the impact of
downside risk of the key assumptions underpinning the projected results of the
Group. The projections and associated headroom used for the group is sensitive
to the EBITDA growth assumptions that have been applied.
The Company has no intangible assets.
11a. Investments in subsidiaries
2022 2021
Company £'000 £'000
Shares in Group undertakings
At 1 January 22,377 22,334
Transfer of services, knowhow and assets from Venn Life Sciences (VLS) France - 43
S.A.S to VLS Biometry Services S.A.S
At 31 December 22,377 22,377
Investments in Group undertakings are recorded at cost, which is the fair
value of the consideration paid. Following review an impairment provision of
Nil (2021: Nil) has been made to the investment in subsidiaries.
VLS Biometry Services S.A.S, a new subsidiary in France, acquired from VLS
France S.A.S all of their advisory services and global services to enterprises
for the integration of computer, statistics, data management techniques, study
design and methodology. The assets sold included the benefit and the liability
of all on‐going contracts and agreements in relation with the activity, and
the various contracts concluded with the customers and suppliers.
VLS France S.A.S subsequently ceased trading.
The subsidiaries of hVIVO Plc (formerly Open Orphan Plc) are as follows:
Name of Company Active/ 100% direct/ Country of Nature of business
Dormant
indirect shareholding
Registration
hVIVO Holdings Limited (formerly hVIVO Limited) Active Direct England & Wales Intermediate holding company
hVIVO Services Limited Active Indirect England & Wales Viral challenge and related laboratory services
hVIVO INC Active Indirect USA Sales & marketing services
Venn Life Sciences ED B.V Active Direct Netherlands Pre‐clinical & early clinical research services
Venn Life Science Biometry Services S.A.S Active Direct France Data management & statistics services
Open Orphan DAC Active Direct Ireland Group services company
Venn Life Sciences Limited Active Direct Ireland Intermediate holding company
Venn Life Sciences (Germany) Gmbh Dormant Direct Germany Clinical research organisation
Venn Life Sciences (France) S.A.S Dormant Direct France Data management & randomisation systems
All the subsidiaries are included in the consolidation. The proportions of
voting shares held by the parent Company do not differ from the proportion of
Ordinary Shares held.
11b. Investments in associates
The group, via its holding in hVIVO Holdings Limited, has investments in two
associated companies as follows:
Name of Company Country of Registration Nature of Business
Imutex Limited((1)) England & Wales Clinical development
PrEP Biopharm Limited((2)) England & Wales Clinical development
(1) hVIVO Holdings Limited owns 49% of the Ordinary Shares and
after adjusting for share of loss in 2022 of £48,000. the investment was
fully impaired and is valued at Nil at 31 December 2022 (2021: £7,005,000).
(2) hVIVO Holdings Limited owns 62.62% of Ordinary Shares. In 2018
the carrying value was fully impaired so the investment has a value of Nil at
31 December 2022.
12. Inventories
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Beginning of the year 659 953 - -
Laboratory and clinical consumables‐movement 38 (92) - -
Virus - movement (198) (202) - -
End of the year 499 659 - -
Inventories expensed in the consolidated Statement of Comprehensive income are
shown within direct project and administrative costs. All inventories are
carried at the lower of cost or net realisable value in the consolidated
statement of financial position. No provision against inventories was required
during 2022.
13. Trade and other receivables
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade receivables 8,276 4,774 - -
Prepayments 992 855 346 335
Accrued income 1,505 1,008 - -
Amounts owed by subsidiary undertakings - - 11,280 9,356
Other receivables (incl. R& D tax credits) 2,127 2,307 10 1
Total 12,900 8,944 11,636 9,692
The Directors consider that the carrying amount of trade and other receivables
approximates to their fair value.
The majority of the Group's contracts are based on milestone payments and the
Group seeks to ensure that contract milestones are timed to result in
invoicing occurring in advance where at all possible, prior to the
satisfaction of performance obligations. Therefore, projects that are in
progress are typically in a deferred income position. However, some smaller
contracts are on a time and materials basis and consequently work is
undertaken initially and invoiced subsequently, and this gives rise to the
accrued income balance noted above. The costs incurred to obtain or fulfil a
contract which has been recognised as accrued income have been determined with
reference to labour hours incurred to the period end as a percentage of the
total estimated labour hours to complete specified performance obligations as
stipulated by the relevant contracts. Accrued income is not amortised as it is
of a short‐term nature.
Contractual payment terms are typically 30 to 90 days from date of invoice.
The carrying amounts of the Group's trade and other receivables denominated in
all currencies were as follows:
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
GBP£ 9,553 6,746 632 1,467
Euro 2,066 2,198 11,004 8,225
USD$ 1,281 - - -
Total 12,900 8,944 11,636 9,692
14. Trade and other payables
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade payables 2,701 2,055 105 306
Amounts due to subsidiary undertakings - - - 2,761
Social security and other taxes 738 857 50 13
Other payables 718 436 - 2
Accrued expenses 3,946 1,856 208 120
Deferred income 20,766 13,192 - -
28,869 18,396 363 3,202
All balances are due within 1 year.
The Group seeks to ensure that study contract milestones are timed to result
in invoicing occurring in advance where at all possible, prior to the
satisfaction of performance obligations. Therefore, projects that are in
progress are typically in a contract liability position which gives rise to
the deferred income balance above. Performance obligations of contracts with
customers are satisfied on the delivery of study data to the customer along
with a final study report. Due to the nature of the business, there are no
warranties or refunds expected or provided for.
The Group is using the practical expedient not to adjust the amount of
consideration for the effects of a significant financing component as the
period between when the promised services are transferred and when the
customer pays for the service is less than twelve months.
15. Borrowings
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Current - falling due within 1 year
Convertible debenture securities ("CDS") - 294 - -
Total borrowings - 294 - -
The Company and Group do not have any borrowings.
As at 31 December 2021, there were 2 remaining CDS holders and they were
entitled to interest of 7% per annum on their securities. Neither of these CDS
holders chose to convert their securities into Ordinary shares in hVIVO Plc
(formerly Open Orphan Plc) at the time of the reverse takeover of the Venn
Group in June 2019. Consequently, these CDS holdings were redeemed by Open
Orphan DAC at redemption dates in April 2022 and October 2022 respectively.
16. Share capital
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
671,047,771 (2021 - 670,929,314) Ordinary shares of £0.001 671 671 671 671
The Company exercised its right in July 2021 to acquire all deferred shares
for an aggregate price of £1.
Subsequently, the share capital of hVIVO Plc (formerly Open Orphan Plc)
consists only of fully paid ordinary shares. All shares are equally eligible
to share in declared dividends, appoint Directors, receive notice of, attend,
speak and vote at any general meeting of the Company.
During the year the Company issued 118,457 shares @ £0.02/Share as a result
of share options being exercised by former employees.
17. Other reserves
Group and Company
Share premium
Share premium is the difference between the nominal value of share capital
and the actual cash received on fund‐raising less any costs associated with
the fund‐raising.
Merger reserve
This includes reverse acquisition reserve which resulted from the reverse
takeover of Venn Life Sciences Holdings Plc by Open Orphan DAC on 28 June
2019. Also included is a Group re‐organisation reserve relating to previous
re‐organisation of the Venn Group.
Foreign currency reserve
The presentation currency of the Group became GBP£ in 2020. Previously the
presentation currency was Euro. This reserve arises from the translation of
the opening balances from Euro to GBP£ and also from the translation of the
subsidiaries which are denominated in Euro into GBP£ on consolidation.
The Euro denominated subsidiaries are Venn Life Sciences Limited, Venn Life
Sciences Germany GmbH, Venn Life Sciences France S.A.S, Venn Life Sciences
E.D. B.V., Venn Life Sciences Biometry Services and Open Orphan DAC.
Share based payments reserve
A share option reserve of £151,000 was created in June 2019, prior to the
reverse takeover of Venn Life Sciences Holdings PLC by Open Orphan DAC, in
relation to the share options and warrants issued in June 2019. After the
reverse takeover, further provisions of £102,000 (2019), £240,000 (2020),
£27,000 (2021) were made and an additional provision of £284,000 was made in
2022 and expensed to direct project and administration expenses. To date
£226,000 has been released from the share based payments reserve back to
retained earnings in respect of share options that have since been exercised.
Retained earnings
For the Group and Company, earnings reflect the earnings of hVIVO Plc
(formerly Open Orphan Plc).
18. Cash used in operations
Group Group Company Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
(Loss)/Profit before income tax (365) 277 (1,311) (1,522)
Adjustments for:
- Depreciation and amortisation 2,930 2,565 - -
- Exceptional Items 119 (267) - 409
- Impairment of associate 6,957 - - -
- Net (gain)/loss on disposals of PPE (12) 189 - -
- Net finance (Income)/costs (617) 215 (834) (768)
- Share based payment charge 284 27 - -
- R & D Credit incl. in other income (1,851) (1,842) - -
- Share of Imutex loss 48 71 - -
Changes in working capital
Impairments on intercompany balances - - 282 485
- (Increase)/Decrease trade and other receivables (4,309) 904 (1,135) (241)
- Decrease inventories 172 294 - -
- Increase/(Decrease) trade and other payables 11,152 (2,972) (2,890) 2,317
Net cash generated/(used) in operations 14,508 (539) (5,888) 680
25. Related Party Disclosures
Directors
Directors' emoluments are set out in the Report of the Remuneration Committee
Report.
Key management compensation for the year was as follows:
2022 2021
€'000 €'000
Aggregate emoluments 994 526
Employer contribution to pension scheme 42 17
1,036 543
Report of the Key management includes the Directors only.
Group
Non‐Executive Group Chairman, Cathal Friel, is a Director of Raglan Road
Capital group companies which has provided advisory and office related
services to Open Orphan DAC (2022 charge €9,798; 2021 charge €23,175). The
balance owed by Open Orphan DAC to Raglan Road Capital group companies at year
end 2022 was €2,000 (2021: €16,901).
There were no other related party transactions during the year.
The Company
During the year the Company absorbed net management charges of £141,598 (2021
- £109,547) from its subsidiaries. At 31 December 2022 the Company was owed
£11,280,000 (2021 - £6,594,000) by its subsidiaries.
19. Discontinued operations
Venn Life Sciences (NI) Ltd, Venn Life Sciences B.V. and Venn Life Sciences
Germany GmbH ceased to trade from 1 January 2021 onwards. Venn Life Sciences
(NI) Ltd and Venn Life Sciences B.V. were dissolved in 2022. Venn Life
Sciences Germany GmbH commenced a liquidation process in early 2022 and that
is expected to conclude in early 2023. There were no new discontinued
operations during 2022.
20. Share options and warrants
Share options
The Group has various share option plans under which it has granted share
options to certain Directors and senior management of the Group.
The number of outstanding share options remaining at 31 December 2022 are as
follows:
Exercise Date # Options at # of Options # of Options # Options at
Date of Issue Price of Expiry 01/01/2022 Exercised Granted 31/12/2022
2015 13p 2025 280,000 - - 280,000
2019 5.6p 2024 7,716,964 - - 7,716,964
2020 2p 2024 396,249 (118,457) - 277,792
2022 0.1p 2025 - - 7,227,273 7,227,273
8,393,213 (118,457) 7,227,273 15,502,029
The weighted‐average exercise price of all options outstanding at year end
is 3.1p and the weighted‐average remaining contractual life is 1.8 years.
Share based payment charge for the year was £284,000 included in direct
project and administration costs (2021 - £27,000). The only new share options
granted during the year relate to the implementation of a Long‐Term
Incentive Plan ("LTIP"). A reserve of £250,000 has been created in 2022 in
respect of this award. The following key assumptions were factored into the
model when valuing these options at the date of grant:
- expected volatility of 74%
- option life of 3 years
- expected dividends yield of 0%
- risk‐free interest rate of 0.72%
An additional £33,000 charge has been created in relation to the vesting of
shares under the existing SIP scheme.
Due to share options being exercised during the year £33,000 (2021:
£193,000) of the existing share‐based payment reserve was released back to
retained earnings.
The Company has used the Black Scholes model to value the options at 31
December 2022 and 31 December 2021.
Warrants
2,264,427 warrants existed at 31 December 2022 (2021: 2,264,427).
232,696 warrants were granted on 11 December 2018 and are exercisable from the
date of grant to 10 December 2023. The exercise price is 0.1p per ordinary
share under warrant. 424,589 warrants were granted on 11 December 2018 and are
exercisable from the date of grant to 10 December 2023. The exercise price is
2.2p per ordinary share under warrant.
1,607,142 warrants were granted on 28 June 2019 and are exercisable from the
date of grant to 27 June 2024. The exercise price is 5.6p per ordinary share
under warrant.
21. Other operating income
Other operating income represents government grants received to fund research
and development activities around the group.
2022 2021
£'000 £'000
hVIVO Gross RDEC credit 1,851 1,842
Venn R & D related credits 369 299
Total 2,220 2,141
The subsidiary, hVIVO Services Limited, can claim UK R&D incentives under
both the RDEC scheme (noted above) and the SME scheme (when the Company is
loss making). Venn Life Sciences Biometry services S.A.S. can claim Credit Tax
Research ('CIR') payments in France and Venn Life Sciences ED B.V. can claim R
& D credits against payroll taxes in the Netherlands.
21. Post reporting period date events
The following events have taken place since the year end:
a) The Directors propose a special, one off dividend of 0.45 pence
per share. The payment is subject to approval by shareholders at the Company's
Annual General Meeting on 23 May 2023.
b) On 28 March 2023 the Company issued 7,716,964 shares @
£0.056/Share as a result of share options being exercised by a former
employee.
c) hVIVO Holdings Limited owns 62.62% of PrEP Biopharm Limited. In
2018 the carrying value was fully impaired so the investment has a value of
Nil at 31 December 2022. The Directors of PrEP Biopharm have made a decision
to commence the process of a solvent liquidation. The liquidation is expected
to complete in 2023.
22. Pensions
The Group operates a number of defined contribution pension schemes whose
assets are held in independently administered funds. The pension charge
represents contributions payable by the Group and amounted to £904,000 for
the year (2021: £872,000). Contributions of £98,000 were payable to the
funds at the year end and are included within trade and other payables (2021:
£79,000).
23. Leases
Amounts recognised in the Statement of Financial Position
Right of Lease
use assets liabilities
2022 2021 2022 2021
£'000 £,000 £'000 £,000
As at 1 January 2,788 4,230 2,854 4,439
New leases acquired 740 1,399 739 1,399
Leases exited (8) (738) (20) (816)
Depreciation expense (1,931) (2,039) - -
Interest expense - - 133 227
Payments - - (2,178) (2,329)
Exchange differences 21 (64) 35 (66)
As at 31 December 1,610 2,788 1,563 2,854
Current - - 826 1,991
Non‐current 1,610 2,788 737 863
Maturity of lease liabilities
31 December 31 December
2022 2021
£'000 £.000
Current - Within one year 826 1,991
Non‐current - Between one to two years 271 477
Non‐current - Between two to five years 466 386
1,563 2,854
Short‐term lease payments expensed during year ended 31 December 2022:
£47,000 (2021: £32,000 (re‐stated)).
24. Leasehold provision
Leasehold provision relates to dilapidation.
Leasehold
provision
£'000
As at 1 January 2022 -
Addition 730
As at 31 December 2022 730
Current 70
Non‐current 670
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