REG - hVIVO PLC - Final results
10/04/2025 07:00
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RNS Number : 4106E hVIVO PLC 10 April 2025
hVIVO plc
("hVIVO", the "Company" or the "Group")
Final results
Record revenue and EBITDA
Key strategic progress post year end in diversification of business
hVIVO plc (AIM: HVO), a full-service Contract Research Organisation ("CRO")
and the world leader in human challenge clinical trials, announces its audited
results for the year ended 31 December 2024.
Financial highlights
• Revenue up 11.9% to £62.7 million (2023: £56.0 million)
• EBITDA up 25.9% to £16.4 million (2023: £13.0 million)
• EBITDA margin of 26.2% (2023: 23.3%)
• Underlying EBITDA of £13.4 million (23.0%) excluding the Canary Wharf
facility fee and overlapping facility costs
• Basic adjusted earnings per share up 33.3% to 1.69p (2023: 1.27p)
• Cash of £44.2 million as at 31 December 2024 (31 December 2023: £37.0
million)
• Weighted contracted orderbook of £67 million as at 31 December 2024 (31
December 2023: £80 million) post-delivery of £62.7 million in the year
• Dividend for the year of 0.2p per Ordinary Share (2023: 0.2p)*
*Excludes special dividend of £3.1m (0.45p/share) paid in June 2023
Operational highlights
Key Contracts
• £6.3 million Human Rhinovirus (HRV - common cold virus) human challenge trial
("HCT") contract signed with biotech client
• £2.5 million Omicron characterisation study contract with mid-sized pharma
client
• £11.5 million Respiratory Syncytial Virus ("RSV") HCT contact with existing
top-tier global pharma client
• Master Services Agreement ("MSA") signed with mid-sized pharma client for HCT
services
• Five hLAB contracts signed post standalone services launch and a 99% growth in
hLAB proposals within a 12-month period
• Venn expanded its multi-year consultancy agreement with a major global pharma
client
Enhanced Operations
• Record number of participants inoculated in 2024 across nine challenge trials
and seven challenge agents
• Outstanding delivery of largest field trial to date with 817 participants
recruited in just 43 days, following launch of clinical site services offering
• Greater automation at FluCamp resulting in significant efficiency gains and
reduced cost of volunteer/patient recruitment despite record number of trial
participants
• Flu B challenge model established and world's first Flu B HCT completed
• FluCamp volunteer and patient recruitment service offering launched with first
contracts executed
• Investment in new "off-the-shelf" models with new H1N1, H3N2, RSV A, and RSV B
models
Post-period end highlights
• Letter of Intent (LOI) signed with ILiAD Biotechnologies ("ILiAD") for world's
first pivotal Phase III HCT to assess BPZE1, ILiAD's whooping cough vaccine
candidate - expected to be the Group's largest HCT to date
• Synergistic acquisition of two Clinical Research Units from CRS, a
German-based full-service early-stage clinical development CRO, for €10.0
million in cash funded from hVIVO's existing cash resources. Expected to be
earnings enhancing following the first full year of ownership and adds a
significant new revenue stream
• Immediately earnings enhancing acquisition of Cryostore, a provider of
temperature-controlled storage solutions for biological and clinical materials
in London, for up to £3.2 million, bolstering hLAB offering
• RSV HCT contract signed with new client, Inhalon Biopharma, to test an inhaled
(mucosal) antiviral candidate
• Successful pilot characterisation study for hVIVO's human metapneumovirus
(hMPV) challenge agent, validating the viability of the model
• £2.0 million contract with a new biopharmaceutical client to complete the
final stage of the hMPV characterisation study ahead of future HCTs
• £3.2 million hLAB contract signed with US-based biotech for an international,
multi-site Phase II field trial
• Shionogi & Co., Ltd. ("Shionogi"), a major Japanese pharmaceutical
company, reported positive results from a Phase IIa RSV HCT conducted by hVIVO
• Memorandum of Understanding signed with the UK Heath Security Agency (UKHSA)
with the aim of sharing preclinical insights, supporting vaccine innovation,
working on human challenge trials, pandemic preparedness and promoting greater
collaboration
Annual dividend
As part of the Company's annual dividend policy, a dividend of c.£1.4
million, being 0.2p per Ordinary Share will be payable on 11 June 2025 to
shareholders on the register on 16 May 2025. The corresponding ex-dividend
date is 15 May 2025.
Outlook
• Revenue guidance of £73 million for 2025 with H2 2025 weighting reflecting
the scheduling of HCT contracts and the timing of the two acquisitions
• EBITDA profit margins anticipated to be mid-high teens (excluding one-off
costs), reflecting integration of CRS into the Group
• Excluding potential ILiAD Phase III HCT, 70% of 2025 revenue guidance already
contracted with good visibility into 2026
• The vast majority of the medium-term potential opportunities of c.£40 million
announced in September 2024 have now been signed, with the exception of the
final contract with ILiAD
• In 2025, the Group is managing an increasingly active pipeline of
opportunities which includes a number of hMPV HCTs
• Integration of the acquisition of two Clinical Research Units from CRS
underway, with the units expected to be earnings accretive in 2026
• Focus on integration and delivery against guidance
• Reiterating medium-term target of growing Group revenue to £100 million by
2028
• Robust cash position with continued profitability and cash generation in 2025
and beyond
Director Change
Since co-founding the business in 2017, and having been Chair for the past
eight years, Cathal Friel has informed the Company that he does not intend to
seek re-election to the Board of the Company at the Annual General Meeting in
2025. The Nominations Committee has already initiated a process to appoint a
new Chair and the Company will announce the results of this process in due
course.
Dr Yamin 'Mo' Khan, Chief Executive Officer of hVIVO, said: "2024 demonstrated
further evidence of the strength of our long-term sustainable growth model,
with record revenue and EBITDA coupled with strong cash generation. An
increasing number of global biopharma companies have expressed their interest
in our world-leading services, with additional models in various new
indications underlining the value that HCTs can offer to the development of
innovative new therapies.
"To meet this demand, we have built a world class organisation in personnel
and infrastructure, with our new cutting-edge facility in Canary Wharf, which
was largely funded by our clients, enabling the execution of larger more
complex trials. The facility has also opened the door to new revenue streams
such as laboratory, participant recruitment, and clinical site services. I
would like to thank all of our employees across the Group who work diligently
every day to efficiently deliver our services, to speed up drug development
and bring important new therapies to patients in need. We look forward to
delivering further progress in 2025 as we integrate our new revenue streams
and build towards our £100 million revenue target in 2028.
"Finally, I would like to take this opportunity to thank our Chair, Cathal
Friel. Cathal identified two loss making companies, Venn and hVIVO, and at
personal risk, invested in the combined entity and transformed it into a long-
term sustainable business model. He foresaw an opportunity and helped grow the
business to where it stands today. It has been a pleasure to work with Cathal
over the last three years and I would like to thank him, on behalf of everyone
at the hVIVO Group, for his vision and leadership. We all wish him the best
for the future."
For further information please contact:
hVIVO plc +44 (0)20 7756 1300
Yamin 'Mo' Khan, Chief Executive Officer
Stephen Pinkerton, Chief Financial Officer
Cavendish Capital Markets Limited (Nominated Adviser and Joint Broker) +44 (0)20 7220 0500
Geoff Nash, Camilla Hume, Harriet Ward
Nigel Birks - Life Science Specialist Sales
Louise Talbot - Sales
Peel Hunt LLP (Joint Broker) +44 (0)20 7418 8900
James Steel, Dr Christopher Golden
Davy (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
Paul McManus / Phillip Marriage / +44 (0)7980 541 893 / +44 (0)7867 984 082 /
Louis Ashe-Jepson
+44 (0)7747 515 393
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
("MAR") EU no.596/2014. Upon the publication of this announcement via
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.
Notes to Editors
hVIVO plc (https://hvivo.com/) (Ticker: HVO) is a full-service Contract
Research Organisation (CRO) and the global leader in human challenge trials.
The Company delivers end-to-end clinical development services to a diverse and
expanding client base, including seven of the world's ten largest biopharma
companies.
hVIVO specialises in conducting human challenge trials across multiple
infectious and respiratory indications, leveraging its state-of-the-art
quarantine facility in London-the largest of its kind worldwide. The company
also offers comprehensive virology and immunology laboratory services under
the hLAB (https://hlabservices.com/) brand.
Through its German subsidiary, CRS (https://crs-earlyphase.com/) , hVIVO
operates a 120-bed capacity across Mannheim and Kiel, providing early-phase
clinical trial services, including first-in-human and proof-of-concept
studies. Its second subsidiary, Venn Life Sciences
(https://www.vennlifesciences.com/) , offers Early Drug Development Consulting
and Biometry services to the biopharma sector.
The Group provides fully integrated drug development solutions from
preclinical stages through Phase II trials, alongside patient recruitment via
FluCamp (https://flucamp.com/) . Additionally, its five clinical sites support
outpatient Phase II and III trials, ensuring a seamless and efficient pathway
from discovery to late-stage development.
Chair Statement
For the year ended 31 December 2024
A long-term sustainable growth model
2024 saw hVIVO deliver another year of record growth across all financial and
operational metrics. An increasing number of global biopharma companies
continue to express interest in our world-leading services, with additional
models in various new indications underlining the value that HCTs can offer to
the development of innovative new therapies. To meet this demand, we have
strengthened our world class organisation, completing the move to our new
facility in Canary Wharf, with 50 containment level 3 (CL-3) quarantine rooms,
cutting-edge virology, immunology and CL-3 laboratories, and an outpatient
unit. The new facility, which was largely funded by our clients, has enabled
the execution of larger, more complex, and a wider range of trials than ever
before, and has also opened the door to new revenue streams across the
business, underpinning our growth strategy to 'Optimise, Scale and Diversify'
the business.
We previously stated our intention to pursue M&A growth opportunities,
underpinned by our excellent cash position. I was delighted that post-period
end we executed on two acquisitions - two Clinical Research Units from CRS
in Germany and London-based biobank service provider Cryostore. These
businesses are synergistic with our existing operations and will support our
long-term growth strategy, diversifying our revenue streams and providing
incremental growth opportunities across the Group.
A diversified full-service specialist CRO
hVIVO continues to cement its position as the world leading human challenge
trial (HCT) provider, further expanding its human challenge model portfolio
and delivering larger and more complex trials for its diverse and global
client base. The move to Canary Wharf has led to rapid growth in new revenue
streams, with hLAB revenue up considerably following the launch of its
standalone services, and clinical site services delivering its largest
contract to date. In combination with the CRS Mannheim and Kiel and Cryostore
acquisitions, we believe we have significantly underpinned hVIVO's aim of
achieving its target of £100 million Group revenue by 2028. These
achievements are a testament to the world-class expertise of our team and the
world-leading science that we deliver for our Big Pharma and biotechnology
clients.
We have also benefitted from increasing awareness of HCTs with existing and
new client demand for the development of new challenge models, especially in
indications such as Flu B where disease seasonality is irregular, making the
achievement of suitable infection rates in traditional field trials very
challenging. It is also very promising to see the LOI signed with ILiAD
Biotechnologies for the world's first Phase III HCT for a whooping cough
vaccine candidate. ILiAD signed the LOI with us after consultation with the
FDA - this is a potentially pivotal development for the Company, and a very
exciting sign of regulator acceptance of HCTs as an effective means of
demonstrating efficacy and accelerating marketing authorisation. This would
also represent our first bacterial human challenge trial, which could open
doors to exciting new indications, supported by the capacity for a bacterial
lab at Canary Wharf. Coupled with growth in the core business, the team have
done an excellent job of growing new revenue streams for hLAB and our clinical
site services which we expect to make an increasing contribution to Group
revenue going forward.
The integration of the two Clinical Research Units in Mannheim and Kiel as
well as Cryostore into the wider Group is ongoing with the initial audit
complete. We believe we have secured a fantastic business in CRS at an
excellent price, around 0.5x revenue, and together the Group now boasts a full
service early clinical development offering, including first-in-human and
proof-of-concept studies with a footprint in both the UK and Germany, two
important European countries for the biopharma industry. We have identified a
large number of cost synergies and cross selling opportunities across hVIVO,
Venn and CRS, and returning CRS to profitability is a core objective for the
Board and management team. The Board has a track record of successfully
integrating loss-making businesses (including Venn and hVIVO) and implementing
successful operational improvement programmes to bring businesses to
profitability. We certainly expect CRS to be earnings accretive from 2026 as
previously guided, supported by an experienced and motivated local management
team in Germany.
Annual dividend
As part of the Company's annual dividend policy, we will pay an annual
dividend to shareholders reflecting the cash generative qualities of the
business and the substantial cash balances on hand. A dividend of c.£1.4
million, being 0.2p per Ordinary Share will be payable on 11 June 2025 to
shareholders on the register on 16 May 2025, subject to shareholder approval
at the AGM. The corresponding ex-dividend date is 15 May 2025.
Outlook
hVIVO entered 2025 with a healthy weighted contracted orderbook of £67
million, bolstered by a stream of new contract wins in the first quarter, with
good visibility over revenue into 2026 and a very strong cash position due to
our continued strong cash generation. We also note that a number of pharma
service providers have echoed our sentiment in recent months that there are
positive signs that activity levels are returning which is evidenced by the
momentum of contract wins we have seen within hVIVO in recent weeks. This is
also a reflection of the continued demand for HCTs and increasingly positive
attitudes from regulators, such as the FDA, towards HCTs. Additionally, we
expect our new service lines of clinical site services and hLAB, enhanced by
CRS and Cryostore, to continue their strong growth trajectory and diversify
and strengthen our world-leading business. Following the two M&A deals we
closed earlier in the year, hVIVO is firmly focussed on the integration of
these two new businesses into the Group and delivering continued growth across
the Group. We will continue to consider further small bolt-on acquisitions
that meet the Company's strategic and financial criteria, but integration is
the key focus in the short term.
As a result of the outlook and robust operational performance of the Company,
the Board expects to achieve Group revenue of £73 million in 2025,
anticipated to be weighted towards the second half, reflecting the scheduling
of HCT contracts and the timing of the two acquisitions. As indicated at the
time of the acquisition, the integration of CRS into the wider Group is
expected to result in EBITDA margins in the mid-high teens in 2025 (excluding
any one-off costs) and the Group expects to remain highly cash generative. CRS
is expected to be earnings accretive from 2026 and following its successful
integration into the Group, is expected to contribute towards a significant
improvement in EBITDA margins going forward. Alongside a world-class team,
hVIVO now boasts state-of-the-art facilities at Canary Wharf with
world-leading capabilities, which underpins our target of growing Group
revenue to £100 million by 2028.
Over the past eight years since co-founding the Company, I am incredibly proud
of the progress we have made. Leveraging my twenty years of corporate finance
and M&A experience, I have overseen the successful acquisition and
integration of two loss-making businesses (Venn Life Sciences plc and hVIVO
plc), transforming them into a strong, profitable, and cash-generative
company. Since acquiring hVIVO and Venn, Group revenue has grown by 181% and
Group EBITDA has grown from a loss of £6.7 million to a profit of £16.4
million-a testament to the exceptional team in London and Dublin whose efforts
have established hVIVO as the world leader in human challenge trials. A
defining moment in my tenure as Chair was initiating discussions and
successfully contracting and executing the world's first COVID-19 human
challenge trial with the UK Government, which generated significant global
interest in both human challenge trials and also giving hVIVO brand
recognition in many parts of the world, which was pivotal in the Company's
evolution.
Having co-founded Open Orphan (now named hVIVO) in 2017 I have decided that it
is the right time for me to step down from the Board, and as such, I will not
be seeking re-election at this year's Annual General Meeting. The Nominations
Committee has already initiated a process to appoint a new Chair and the
Company will announce the results of this process in due course.
With hVIVO having successfully completed two acquisitions in early 2025, and
having strategically diversified its services, the Company is well positioned
for sustainable growth in the years ahead. Having completed five IPOs on the
AIM market in the past decade, I see significant opportunities for growth and
value creation in the public markets and I look forward to working across
further opportunities on AIM in the years ahead.
Cathal Friel
Chair
9 April 2025
CEO Statement
For the year ended 31 December 2024
A record set of results
2024 has been a transformational year for hVIVO - from record financial
performance to the move to the largest state-of-the-art facility of its kind,
the Company has laid the foundations for long-term growth. During 2024, the
Group inoculated a record number of volunteers across nine challenge trials
and seven challenge agents. This was reflected in hVIVO's record revenue of
£62.7 million (2023: £56.0 million), an increase of 11.9% versus the prior
period. The Company also saw a strong increase in EBITDA to £16.4 million
(2023: £13.0 million), an increase of 25.9%, and recorded an EBITDA margin of
26.2% (2023: 23.3%). This was primarily driven by the expedited delivery of
multiple projects and the recognition of the £4.3 million client funding
towards our new Canary Wharf facility. The funding for the facility was
provided by our clients to expedite these projects to meet their timelines,
during 2024 we were able to concurrently utilise multiple sites to maximise
capacity and conduct trials faster. Excluding the benefit of the client
funding towards the new Canary Wharf facility and overlapping facility costs,
underlying EBITDA is £13.4 million with an EBITDA margin of 23.0%. Our cash
position also grew to £44.2 million, a reflection of the strong operational
execution of our contracts and our highly optimised cash generative business
model - we remain free of any debt. Despite a record conversion of our
orderbook to revenue in 2024, we have a healthy weighted orderbook of £67
million, excluding the potential pivotal Phase III HCT with ILiAD, we have 70%
of 2025 revenue guidance already contracted with good visibility into 2026.
These record operational and financial results were achieved in a year when
the Company completed the move to the world's largest commercial human
challenge trial unit, developed a number of new challenge models, launched
three new service lines, and began implementation of several new software
systems. This is a testament to the hard work and commitment of our
world-leading team. I would like to thank each and every colleague for their
dedication and adaptability in evolving circumstances. The team has never lost
sight of our mission of delivering today's healthcare by empowering tomorrow's
innovation.
The world's largest HCT CL-3 quarantine facility
I am delighted that we achieved our key operational goals for 2024 by
delivering on our contracted orderbook while also completing the fit out and
the move to our new facility on time and on budget. The facility provides
significant advantages with larger quarantine capacity, expanded laboratories
including a CL-3 laboratory, outpatient beds, and the ability to expand
further if required. This bespoke fit-for-purpose facility ensures the
efficient running of multiple challenge trials concurrently, even with
different challenge agents. The facility includes the a dedicated air handling
system, negative air pressure and multiple power redundancies. It allows for
improved clinician to participant ratio, a tiered two-way call system
increasing efficiency in interactions with participants, faster transfer of
laboratory samples, and efficiencies related to resource assignment. In July
2024, we hosted an open day for our clients and a capital markets event to
showcase the facility's capabilities, and I have been thrilled with the
feedback received from clients and investors alike. Looking to the future, we
believe the facility provides a robust foundation to our growth strategy to
'Optimise, Scale and Diversify' the business.
Delivering on our growth strategy: Optimise, Scale and Diversify
Optimising the delivery of challenge trials
The key driver of efficiency gains was the efficient use of overlapping
facilities during the first half of 2024 when we benefitted from the
availability of three quarantine facilities, resulting in the expedited
delivery of several key projects. Since we have settled into our new Canary
Wharf facility, we have also seen additional benefits as the space has been
optimised to our needs. While our previous quarantine facilities included an
adapted former boutique hotel, every detail of our new facility has been
designed by our operational team and is specifically fit-for-purpose for the
efficient delivery of HCTs. We strongly believe the devil is in the detail,
and features such as our pneumatic chute system that delivers samples to our
labs in c.30 seconds and our tiered volunteer communications system that
allows participants to efficiently communicate their needs will have a
meaningful positive impact. This is an important feature as it leads to
additional participant recruitment efficiencies, as we are able to test
volunteer serosuitability across many different challenge agents, meaning
their likelihood of being recruited onto a trial increases.
We have also introduced several new technologies and software upgrades that
will either automate or improve our existing operations. These include a
laboratory information management system (LIMS) which went live with the first
phase of its launch in April 2025. Also launching in 2025 is our new Clinical
eSource system, which will streamline our data management processes in the
trials we deliver, and upgrades to automation and the cloud-based Volunteer
Management System at FluCamp, our participant recruitment platform. Coupled
with the improved participant experience delivered by our new facility which
maximises comfort for those participating in our HCTs (earning a 4.4 out of
5.0 score on TrustPilot), FluCamp has also continued to improve the efficiency
with which it recruits participants. Despite recruiting a record number of
participants onto our trials in 2024, our advertising spend has seen a
significant fall versus 2023. Efficient recruitment remains a key driver for
the business, and it is pleasing to see the efficiencies we have made to date.
Scaling our existing and new services
Our new facility expands the number of pathogens that we can work with given
the CL-3 designation of the site and increases our quarantine rooms to
50-beds. Demand for our services has been supported by an MSA signed with a
mid-sized pharma company, highlighting this client's intention to use HCTs as
part of their drug development pathway across their portfolio of infectious
disease assets, as well a steady stream of positive client announcements
reporting the results of their HCTs with hVIVO. Post-period end, Shionogi, a
major Japanese pharmaceutical company, reported positive results from a Phase
IIa RSV HCT conducted by the Company. The positive announcements from our
clients provide strong validation of our unique capabilities and help to grow
global biopharma's awareness of HCTs. The Company has also signed a Memorandum
of Understanding (MoU) with the UK Heath Security Agency (UKHSA) to
collaborate going forward with the aim of sharing preclinical insights,
supporting vaccine innovation, working on human challenge trials, pandemic
preparedness and promoting greater collaboration. This is a further
demonstration of the recognition of HCTs and the benefits they can bring to
global health security.
Flu and RSV continued to be hVIVO's leading indications, and even with several
RSV vaccines being approved in recent years, there remains considerable demand
for our services to help bring an effective RSV antiviral to market, as
highlighted by a number of recent RSV contract wins. Effective therapeutics
for RSV remain a key focus of the industry, with a market projected to reach
US$3.6 billion by 2032(1). Post-period end we saw contract wins and commercial
progress in some areas we previously highlighted as key growth areas including
mucosal therapies, hMPV, and bacterial challenge.
Canary Wharf offers three times the usable lab space compared to our previous
facility for our newly launched virology and immunology laboratory services
under the hLAB banner, where we are targeting a global virology testing market
which expected to reach >$14.2 billion by 2029(2). We have already seen a
significant rise in contract wins and work at hLAB. In the past year,
standalone hLAB study proposals have doubled and the team were awarded five
standalone lab services contracts in 2024 - with the largest standalone
project to date in early 2025 for £3.2 million. The growth of the hLAB
offering has been bolstered by the acquisition of Cryostore post-period end,
with multiple services benefitting from the added capacity that Cryostore can
provide. Additionally, given clinical sample storage timelines typically range
from two to 15 years, this represents an earnings enhancing, highly stable and
recurring revenue stream. As the Group's standalone lab services, field trial
offering, and HCT business continues to grow, this ancillary service will
further support the future growth of the business whilst adding an additional
revenue and profit stream.
As part of the move to Canary Wharf and the launch of our clinical site
services, we converted our former corporate office at Plumbers Row to an
enlarged outpatient site. Post-period end, our acquisition of two Clinical
Research Units from CRS has allowed us to scale our clinical site services
offering across multiple sites in the UK and Germany. Given the strong
delivery of our largest Phase II field trial contract to date last year, in
which we enrolled 817 participants in just over six weeks, we are particularly
excited about the potential for further growth in this new service line with
our expanded footprint, therapeutic expertise, and client base. With the
acquisition of CRS, we expect to realise significant cross-selling
opportunities and for this to positively impact the average size of contracts
the Group can win given our ability to now cover two key geographies.
Specifically, we expect this to be of substantial benefit to Venn and its
ability to expand its early drug development consulting services package to a
larger pool of non-overlapping clients. As we expand our FluCamp brand and
participant recruitment offering across to CRS we expect to see both
efficiency gains and further growth in our tiered participant recruitment
offering, which successfully delivered its first two standalone contracts in
2024.
A diversified full-service specialist CRO
Across the Group, we have continued to progress towards our strategic
long-term goal of becoming a diversified full service CRO, whilst maintaining
and strengthening our core specialism in HCTs. Within our HCT business, we
have continued to diversify our portfolio of challenge models, with a new
model and first HCT completed for Flu B, and a contract signed with a new
biopharmaceutical client to complete the final stage of an hMPV
characterisation study ahead of potential future hMPV HCTs. We also signed a
contract to conduct an Omicron BA.5 characterisation study, a study which
would not have been possible to conduct in our previous facilities, and are
developing several new challenge models including influenza H1N1 and a new
H3N2, and RSV A and RSV B.
Our diversified human challenge model portfolio is a strong indicator of the
growing awareness of HCTs and their ability to generate valuable efficacy data
in new disease areas, especially within indications where there are
considerable yearly variations in global infection rates, making traditional
field trials more costly and challenging. This has been further underlined by
the post-period end signing of an LOI with ILiAD to perform the world's first
Phase III HCT for a whooping cough vaccine candidate - this would also be
hVIVO's first bacterial HCT. HCTs can overcome the difficulties associated
with conducting traditional Phase III field studies for whooping cough due to
unpredictability of the disease outbreaks - after consultation with the FDA,
ILiAD decided to conduct a pivotal Phase III HCT. Both hVIVO and ILiAD are
working to finalise the definitive agreement as ILiAD actively advances its
financing initiatives to support the collaboration.
The development of new service lines and revenue streams continued in 2024,
with the launch of three new service lines - hLAB standalone services,
FluCamp's tiered recruitment services and our clinical site services offering.
Our strategy has been to develop new services within our areas of core
competence where we have an established market reputation, existing expertise
and capacity to deliver for our clients, and this strategy has been rewarded
with immediate contract wins largely using existing Group infrastructure,
benefitting our margins. The addition of CRS and Cryostore also broadens our
offering to include a number of new services, including:
• Multi-site capabilities acting as a clinical site for inpatient or outpatient
trials and Phase I-III trials with 200 beds
• New therapeutic areas of expertise in cardiometabolic, immunology,
dermatology, and in renal and hepatic impaired patient population
• International capabilities in trial participant recruitment with a database of
over 400,000 active participants
• Phase I-II field trials, Single Ascending Dose/ Multi Ascending Dose trials,
Proof of Concept trials and BE/BA, QTc and DDI studies
• Industry standard, temperature-controlled storage solutions for biological and
clinical materials
The Board is pleased to have completed two strategic acquisitions as part of
its M&A strategy and strongly believes CRS and Cryostore are significantly
synergistic with the Group - together, we are a diversified full-service
specialist CRO with increased cross-selling and growth opportunities in
existing and new service areas.
Realising CRS and Cryostore's potential
After completing the acquisition of CRS and Cryostore, our focus for 2025 is
on integrating the businesses into the Group. The integration of Cryostore is
expected to realise enhanced cross-selling opportunities across our existing
hLAB services, field trial offerings, and HCT business. This will be supported
by our strong focus on active business development and marketing.
An investment and restructuring programme has commenced to support the
integration of CRS into the business, which, as previously indicated, is
expected to cost c.€2.5 million in 2025. Prior to the acquisition, CRS
Mannheim and Kiel had already introduced a new business development team and
commercial leadership which has seen early success in building a stronger
sales pipeline. We have further strengthened this by integrating our own
business development team to support cross-selling opportunities across the
Group which now has a larger and broader geographical client base than ever
before. We also believe that by deploying hVIVO's existing systems to CRS,
such as our Volunteer Recruitment Management system, Clinical eSource and
LIMS, we can quickly realise efficiency gains without considerable additional
costs. CRS outsources a number of services, such as laboratory, biometry,
consulting, and regulatory services, some of which the Group will now be
able to provide in-house, benefitting the bottom line. We have identified
EUR1.6 million opportunities for Venn in CRS' current pipeline. We also expect
to implement our own high-performance culture that has been the backbone to
our success to date, which focuses on innovation, business performance, KPI
monitoring and rewarding success. To date we have identified £0.8 million in
annualised cost savings and as we progress, we expect to identify further cost
savings. This process is led by our cross-company integration team which is
making strong progress, and we look forward to providing further updates to
the market in due course. Overall, we are very confident in our ability to
successfully integrate the businesses in 2025, with Cryostore expected to
enhance earnings in the current year and CRS Mannheim and Kiel becoming
earnings accretive in 2026.
Building on our track record of delivery
The Company's strong performance over the past few years demonstrates solid
execution of our long-term growth strategy, which has been supported by the
team's superb operational delivery coupled with a growing evidence base of how
HCTs can accelerate the pathway to market for new therapies, including pivotal
Phase III trials. While significant progress was made across our entire growth
strategy, 2024 saw considerable transformation in the business with regards to
broadening and diversifying our revenue streams. Our new facility has enhanced
our ability to deliver three new service lines in hLAB, clinical site
services, and FluCamp tiered recruitment services. These service lines have
been enhanced by the addition of CRS and Cryostore which have cemented our
position as a diversified full-service CRO.
Looking forward, we are confident that our track record of delivery is a
strong indicator of our ability to continue to execute on the Company's growth
strategy to 'Optimise, Scale and Diversify' the business. We believe the tide
is turning with regards to converting our substantial sales pipeline into
signed contracts, and following integration, we believe CRS will be earnings
accretive in 2026, with additional growth opportunities and synergies realised
across the Group. We believe that the continued execution of our growth
strategy, combined with our excellent cash position and dividend paying status
means that we are well-positioned to create further value for shareholders as
investors seek profitable AIM Healthcare companies with strong, long-term
fundamentals as the wider market sentiment improves. We remain confident in
the outlook for hVIVO and look forward to further progress in 2025.
Finally, I would like to take this opportunity to thank our Chair, Cathal
Friel. Cathal identified two loss making companies, Venn and hVIVO, and at
personal risk, invested in the combined entity and transformed it into a long-
term sustainable business model. He foresaw an opportunity and helped grow the
business to where it stands today. It has been a pleasure to work with Cathal
over the last three years and I would like to thank him, on behalf of everyone
at the hVIVO Group, for his vision and leadership. We all wish him the best
for the future.
Dr Yamin 'Mo' Khan
CEO
9 April 2025
References
(1) Credence Research, Human Respiratory Syncytial Virus (RSV) Treatment
Market By Treatment, Dec 2024
(2) Mordor Intelligence, Virology Testing Market- Size & Growth
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
Note £'000 £'000
Operations
Revenue, from contracts with customers 4 62,725 56,043
Other operating income 5 3,492 2,623
Direct project and administrative costs 6 (49,802) (45,629)
EBITDA before exceptional items 16,415 13,037
Depreciation & amortisation 13, 14, 16 (3,559) (2,716)
Exceptional items 6 - (219)
Operating profit 12,856 10,102
Net finance income 10 462 1,055
Share of loss of associate using equity method (29) (10)
Profit before income tax 13,289 11,147
Income tax (charge)/credit 11 (2,637) 4,968
Profit for the year 10,652 16,115
Profit for the year is attributable to:
Shareholders 10,652 16,115
Other comprehensive income
Items that will not be subsequently reclassified to income statement:
Currency translation differences 219 (49)
Total comprehensive income for the year 10,871 16,066
Earnings per share attributable to shareholders during the year:
Basic earnings per share 12 1.57p 2.38p
Diluted earnings per share 12 1.55p 2.35p
Adjusted earnings per share attributable to shareholders during the year:
Basic adjusted earnings per share 12 1.69p 1.27p
Diluted adjusted earnings per share 12 1.67p 1.25p
All activities relate to continuing operations.
The notes following the financial statements are an integral part of these
financial statements.
Consolidated and Company Statements of Financial Position
As at 31 December 2024
Group Group Company Company
2024 2023 2024 2023
Note £'000 £'000 £'000 £'000
Assets
Non‐current assets
Intangible assets 13 5,701 5,667 - -
Property, plant and equipment 14 7,500 6,203 - -
Investments in subsidiaries 15 - - 22,377 22,377
Right of use asset 16 11,801 13,835 - -
Deferred Tax Asset 11 3,662 5,519 - -
Total non‐current assets 28,664 31,224 22,377 22,377
Current assets
Inventories 17 804 426 - -
Trade and other receivables 18 15,245 14,605 1,573 1,527
Cash and cash equivalents 19 44,180 36,973 42 2,281
Total current assets 60,229 52,004 1,615 3,808
Total assets 88,893 83,228 23,992 26,185
Equity attributable to owners
Share capital 25 680 680 680 680
Share premium account 26 516 516 516 516
Merger reserves 26 (6,856) (6,856) (2,241) (2,241)
Foreign currency reserves 26 1,528 1,309 2,014 2,014
Retained earnings 48,807 38,677 19,570 21,970
Total equity 44,675 34,326 20,539 22,939
Liabilities
Non‐current liabilities
Lease liabilities 16 10,391 12,163 - -
Leasehold provision 21 1,912 1,559 - -
Total non‐current liabilities 12,303 13,722 - -
Current liabilities
Trade and other payables 20 29,405 34,228 3,453 3,246
Lease liabilities 16 2,510 367 - -
Leasehold provision 21 - 585 - -
Total current liabilities 31,915 35,180 3,453 3,246
Total liabilities 44,218 48,902 3,453 3,246
Total equity and liabilities 88,893 83,228 23,992 26,185
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 9 April 2025.
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
£1,878,000 (2023: loss of £11,567,000).
Consolidated and Company's Statement of Changes in Shareholders' Equity
For the year ended 31 December 2024
Share capital Share premium Merger reserve Foreign currency reserve Retained earnings Total
Group £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 671 4 (6,856) 1,358 25,041 20,218
Changes in equity for the year ended 31 December 2023
Profit for the year - - - - 16,115 16,115
Currency differences - - - (49) - (49)
Total comprehensive income for the year - - - (49) 16,115 16,066
Transactions with the owners
Share based payments (note 27) - - - - 575 575
Shares issued 9 512 - - - 521
Dividends paid - - - - (3,054) (3,054)
Total contributions by and distributions to owners 9 512 - - (2,479) (1,958)
At 31 December 2023 680 516 (6,856) 1,309 38,677 34,326
Changes in equity for the year ended 31 December 2024
Profit for the year - - - - 10,652 10,652
Currency differences - - - 219 - 219
Total comprehensive income for the year - - - 219 10,652 10,871
Transactions with the owners
Share based payments (note 27) - - - - 836 836
Dividends paid - - - - (1,358) (1,358)
Total contributions by and distributions to owners - - - - (522) (522)
At 31 December 2024 680 516 (6,856) 1,528 48,807 44,675
Share capital Share premium Merger reserve Foreign currency reserve Retained earnings Total
Company £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 671 4 (2,241) 2,014 36,016 36,464
Changes in equity for the year ended 31 December 2023
Loss for the year - - - - (11,567) (11,567)
Share based payments (note 27) - - - - 575 575
Shares issued 9 512 - - - 521
Dividends paid - - - - (3,054) (3,054)
Total contributions by and distributions to owners 9 512 - - (14,046) (13,525)
At 31 December 2023 680 516 (2,241) 2,014 21,970 22,939
Changes in equity for the year ended 31 December 2024
Loss for the year - - - - (1,878) (1,878)
Share based payments (note 27) - - - - 836 836
Dividends - - - - (1,358) (1,358)
paid
Total contributions by and distributions to owners - - - - (2,400) (2,400)
At 31 December 2024 680 516 (2,241) 2,014 19,570 20,539
Consolidated and Company's Statement of Cash Flows
For the year ended 31 December 2024
Group Group Company Company
2024 2023 2024 2023
Note £'000 £'000 £'000 £'000
Cash used in operations
Profit/(loss) before income tax 13,289 11,147 (1,651) (11,565)
Adjustments for:
- Depreciation & amortisation 6 3,559 2,716 - -
- Impairment of intangible assets 13 - 254 - -
- Exceptional items 6 - 219 - -
- Net finance income 10 (462) (1,055) 226 (182)
- Share based payment charge 27 836 575 - -
- R&D credit incl. in other income 5 (3,356) (2,432) - -
- Share of associate loss 29 10 - -
- Impairment of intercompany balances - - - 10,428
Changes in working capital:
- (Decrease)/increase in provisions (326) 155 - -
- Decrease/(increase) in trade and other receivables 1,745 (1,158) 336 3,325
- (Increase)/decrease in inventories (378) 73 - -
- (Decrease)/increase in trade and other payables (4,755) 5,187 206 15
Cash generated from/(used in) operating activities 10,181 15,691 (883) 2,021
Income tax (R&D credit) received/(paid) 155 1,548 - (24)
Net cash generated from/(used in) operating activities 10,336 17,239 (883) 1,997
Cash flow from investing activities
Purchase of property, plant and equipment 14 (2,416) (5,177) - -
Purchase of intangible assets 13 (44) - - -
Interest received 1,800 1,181 2 21
Net cash (used in)/generated from investing activities (660) (3,996) 2 21
Cash flow from financing activities
Lease payments 16 (984) (2,044) - -
Dividends paid 28 (1,358) (3,054) (1,358) (3,054)
Proceeds from issue of shares 25 - 521 - 521
Finance costs (63) (127) - -
Net cash used in financing activities (2,405) (4,704) (1,358) (2,533)
Net increase/(decrease) in cash and cash equivalents 7,271 8,539 (2,239) (515)
Cash and cash equivalents at beginning of year 36,973 28,444 2,281 2,799
FX translation (64) (10) - (3)
Cash and cash equivalents at end of year 19 44,180 36,973 42 2,281
Notes to the financial statements
For the year ended 31 December 2024
1. Presentation of the financial statements
Description of business
The hVIVO plc Group is a rapidly growing specialist CRO pharmaceutical
services group which is the world leader in the testing of vaccines and
antivirals using human challenge clinical trials.
hVIVO plc (the "Company") 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.
Basis of preparation
The financial statements have been prepared in accordance with the Group's
accounting policies approved by the Board and described in Note 2, 'Summary of
significant accounting policies'. Information on the application of these
accounting policies, including areas of estimation and judgement is given in
Note 3, 'Critical accounting estimates and judgements'. The preparation of the
financial statements in conformity with generally accepted accounting
principles requires management to make estimates that affect the reported
amounts of assets and liabilities, 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 IFRS. Figures are
presented in thousands of pounds sterling (£'000), unless otherwise
indicated.
These financial statements comprise the accounts of hVIVO plc and its
subsidiaries (the "Group") for the year ended 31 December 2024. A list of
subsidiaries is set out in note 15.
Parent company financial statement
The financial statements of the parent company, hVIVO plc, 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 IFRS.
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 and Company
will be able to continue as a going concern for the foreseeable future.
2. Summary of significant accounting policies
Consolidation
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. 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.
Associates
Investments in associates are accounted for using the equity method of
accounting, after initially being recognised at cost less any fair value
adjustment.
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.
New accounting requirements
Amendments to accounting standards issued by the IASB and adopted in the year
ended 31 December 2024 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 2024 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.
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 pounds sterling, 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
(CODM). The CODM have been identified as the Executive Directors and
Non‐Executive Chair.
Internal management reporting provided to the CODM is on a consolidated basis.
Management therefore considers the Group to be one business unit and therefore
one reporting segment for disclosure in these financial statements.
Revenue from contracts with customers
The Group enters into fixed‐price and multi‐service contracts with
customers. Revenue 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.
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 either deferred income or accrued 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 are government backed tax incentives that allows companies
to claim back some of the costs they have incurred on research, development
and innovation. Credits which are taxable receipts are shown in other
operating income. Credits which reduce the amount of income tax due are
included in the income tax charge/(credit).
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.
All other repairs and maintenance are charged to the Statement of
Comprehensive Income during the financial period in which they are incurred.
Depreciation on assets is calculated using the straight‐line method to
allocate asset cost to its residual value over its estimated economic useful
life, as follows:
· Leasehold improvements the expected life of the lease, three to ten
years
· Plant & machinery four years
· Fixtures & fittings three to ten years
The assets' residual values and useful economic lives are reviewed annually,
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
sale proceeds with the carrying amount and are recognised in direct project
and administrative costs in the Statement of Comprehensive Income.
Intangible assets
Goodwill
Goodwill is stated at cost less impairments. Goodwill is deemed to have an
indefinite useful life and is tested for impairment annually.
Other intangible assets
Intangible assets are stated at cost less provisions for amortisation and
impairments.
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.
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 for which the estimates of future cash flows have
not been adjusted.
Impairment of goodwill is not reversed. For other intangible assets, where
an impairment loss subsequently reverses, the carrying amount of the asset 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.
Leases
The Group recognises right of use assets under lease arrangements in which it
is the lessee, except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets, which are charged
to the Statement of Comprehensive Income as incurred. Right of use assets
owned by third parties under lease agreements are capitalised at the inception
of the lease and recognised in the Statement of Financial Position. The
corresponding liability to the lessor is recognised as a lease liability. The
carrying amount is subsequently increased to reflect interest on the lease
liability and reduced by lease payments made.
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.
Finance costs are charged to the Statement of Comprehensive Income so as to
produce a constant periodic rate of charge on the remaining balance of the
lease liabilities for each accounting period.
If modifications or reassessments of lease obligations occur, the lease
liability and right of use asset are remeasured.
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.
The Group recognises specific costs of developing a new challenge model virus
as Virus inventory once technical and commercial feasibility are certain.
Costs of development prior to confirmed feasibility are expensed as incurred.
Financial instruments
Financial assets
The financial assets of the Group consist of trade receivables, other
receivables, accrued income and cash and cash equivalents. The Group's
financial assets are measured at amortised cost. 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.
Financial liabilities
The financial liabilities of the Group consist of trade payables, other
payables, accrued expenses and lease liabilities. The Group's financial
liabilities are measured at amortised cost.
Fair value hierarchy
Inputs used in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the valuation
technique utilised are (the 'fair value hierarchy'):
· Level 1: Quoted prices in active markets for identical items.
· Level 2: Observable direct or indirect inputs other than Level 1
inputs.
· Level 3: Unobservable inputs (i.e. not derived from market data).
The level of fair value hierarchy for the Group's financial assets and
liabilities is shown below:
Financial assets:
Trade receivables Level 3
Other receivables Level 3
Accrued income Level 3
Cash and cash equivalents Level 1
Financial liabilities:
Trade payables Level 3
Other payables Level 3
Accrued expenses Level 3
Lease liabilities Level 3
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.
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. Merger reserve is non-distributable.
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 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.
3. Critical accounting estimates and judgements
In the process of applying the Group's accounting policies, management has
made accounting judgements in the determination of the carrying value of
certain assets and liabilities. Due to the inherent uncertainty involved in
making assumptions and estimates, actual outcomes may differ from those
assumptions and estimates. The following judgements have the most significant
effect on the amounts recognised in the financial statements.
(a) Impairment of goodwill and cost of investments and
associates
The Group tests annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated in note 2. The recoverable amount
of the cash‐generating unit has been determined based on value‐in‐use
calculations. These calculations require the use of estimates as set out in
note 13. In addition, the Group has also considered the impairment of the
investments in subsidiary undertakings and associates as set out in note 15.
No impairments of subsidiaries or associates were recognised in the current or
prior years.
(b) Impairment of receivables
Trade and other receivables are carried at the contractual amount due less any
estimated provision for non‐recovery. Provision is made based on a number of
factors including the age of the receivable, previous collection experience
and the financial circumstances of the counterparty. In the prior year, an
impairment was recognised in the Company accounts for receivables from
subsidiaries that are no longer trading. The impairment will only be
reversed if the amounts are later paid.
(c) Deferred tax assets
Deferred tax assets are only recognised to the extent that it is probable that
future taxable profits will be available against which deductible temporary
differences can be utilised. See note 11. In the current and prior years,
only losses relating to hVIVO Services Ltd have been recognised as a deferred
tax asset.
(d) Revenue
Estimates of revenues, costs or extent of progress toward completion are
revised if circumstances change. Any resulting increases or decreases in
estimated revenues or costs are reflected in profit or loss in the period in
which the circumstances that give rise to the revision become known by
management. At each period end, management reviews each material individual
contract to assess whether any anticipated losses should be recognised
immediately.
(e) Virus inventory
In valuing virus inventory, management is required to make assumptions in
relation to the future commercial use of the inventory, which is primarily for
external client revenue engagements. This includes consideration of both the
current business pipeline and management's estimates of the future virus
requirements, based on its significant knowledge and experience in the field
of virology.
(f) Research and development tax credits
The Group's research and development tax credits claims in its various
jurisdictions are complex and require management to make assumptions, with
appropriate external tax advice, in building the methodology for the claim,
interpreting research and development tax legislation in relation to the
Group's specific circumstances, and agreeing the basis of the Group's tax
computations with relevant Tax Authorities.
(g) Leasehold provisions
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 provision requires management to make best estimates of the
consideration required to settle the present obligation at the end of the
reporting period, taking into account the risks and uncertainties surrounding
the obligation. There is reasonable uncertainty around the likelihood and
timing of the exit of the lease. The provision is discounted for the time
value of money.
4. Segmental analysis
The Directors are responsible for resource allocation and the assessment of
performance. In the performance of this role, the Directors review the Group's
activities, in the aggregate. The Group has therefore determined that it has
only one reportable segment under IFRS 8 Operating Segments, which is 'medical
and scientific research services'.
The following table summarises the external revenue generated from customers
and information about the Group's segment assets (non-current assets excluding
financial instruments, deferred tax assets and other financial assets) by
geographical location. The Group has identified its geographical segments
for revenue from external customers based on the regions in which its
customers are
incorporated.
Revenue from external customers Non current assets
2024 2023 2024 2023
Geographical Region £'000 £'000 £'000 £'000
UK 2,277 5,896 24,649 25,199
Europe 17,394 9,663 354 506
North America 43,054 40,484 - -
Total 62,725 56,043 25,003 25,705
During the year ended 31 December 2024, the Group had four customers who each
generated revenue greater than 10% of total revenue (2023: two customers).
These customers generated 31%, 16%, 14% and 13% of revenue (2023: 34% and 21%
of revenue).
5. Other operating income
Other operating income mainly represents research and development tax credits
(R&D tax credits) received to fund research and development activities
around the Group.
2024 2023
£'000 £'000
Gross RDEC credits 3,044 2,267
Other R&D related credits 312 165
Recharge of staff to third parties 136 191
3,492 2,623
hVIVO Services Limited, can claim UK R&D incentives under both the RDEC
scheme and the SME scheme in the UK. 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
6. Expenses - analysis by nature
The following items have been included in operating profit:
2024 2023
£'000 £'000
Employment benefit expense (note 8) 22,838 20,884
Share based payments (note 27) 836 575
Other expenses 26,128 24,170
Total direct project and administrative costs 49,802 45,629
Also included within operating profit are the below depreciation and
amortisation charges:
PPE depreciation (note 14) and amortisation (note 13) 1,128 827
Depreciation related to right of use assets (note 16) 2,434 1,889
Also included within operating profit are exceptional items as shown below:
2024 2023
£'000 £'000
Exceptional items include:
- Write off of receivables from associates - 219
Total exceptional items - 219
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:
2024 2023
£'000 £'000
Fees payable to Company's auditor for the audit of the parent Company and 62 53
consolidated financial statements
Fees payable to Company's auditor for the audit of subsidiaries and their 65 42
consolidated financial statements
Total paid to the Company auditor 127 95
Fees payable to the auditors of subsidiaries for services:
- The audit of Company's subsidiaries pursuant to legislation paid to other 21 55
auditors
- Tax services paid to other auditors 2 2
Total paid to other auditors 23 57
Total auditor's remuneration 150 152
7. Directors' emoluments
Group Group
2024 2023
£'000 £'000
Aggregate emoluments 1,282 1,189
Social security costs 203 154
Contribution to defined contribution pension scheme 66 57
Total directors' remuneration 1,551 1,400
See further disclosures within the Report of the Remuneration Committee.
Group Group
2024 2023
Highest paid director £'000 £'000
Total emoluments received 657 587
Defined contribution pension scheme 40 34
697 621
8. Staff costs
Group Group
2024 2023
£'000 £'000
Wages and salaries 19,056 17,447
Social security costs 2,757 2,520
Pension costs 1,024 917
Employee benefits expense 22,838 20,884
Share based payments 836 575
Total staff costs 23,674 21,459
Group Group
2024 2023
£'000 £'000
Average number of people (including Executive Directors) employed was:
Administration 50 48
Clinical research 237 218
Sales and marketing 14 8
Total average number of people employed 301 274
9. Pensions
The Group operates a number of defined contribution pension schemes whose
assets are independently administered. The charge for the year in respect of
these defined contribution schemes was £1,024,000 (2023: £917,000).
Contributions of £85,000 were payable to the funds at the year end and are
included within trade and other payables (2023: £100,000).
10. Finance income and costs
2024 2023
£'000 £'000
Interest expense:
Interest on Lease liabilities (955) (155)
Foreign exchange loss (259) -
Other finance costs (157) (21)
Finance costs (1,371) (176)
Finance income:
Foreign exchange gain - 50
Interest income on cash and short‐term deposits 1,833 1,181
Finance income 1,833 1,231
Net finance income 462 1,055
11. Taxation
Group 2024 2023
£'000 £'000
Current tax:
Current year research and development tax charge 747 537
Current year tax in foreign jurisdictions 33 14
Current tax charge 780 551
Deferred tax:
Current year 1,857 2,588
Adjustment in respect of prior years - (8,107)
Deferred tax charge/(credit) 1,857 (5,519)
Income tax charge/(credit) 2,637 (4,968)
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:
Group 2024 2023
£'000 £'000
Profit before tax 13,289 11,147
Tax calculated at domestic tax rates applicable to UK standard rate of tax of 3,322 2,620
25% (2023: 23.5%)
Tax effects of:
- Expenses not deductible for tax purposes 230 236
- Current Year R&D Tax credit (519) (190)
- Temporary timing differences (364) 565
- Effect of tax rates in foreign jurisdiction (8) -
- Utilisation of losses not previously recognised (127) -
- Adjustments in respect of prior year - (8,107)
- Losses carried forward - (92)
- Current year losses for which no deferred tax asset is recognised 103 -
Income tax charge/(credit) 2,637 (4,968)
Management only recognises a deferred tax asset when there is evidence that
recoverability of the asset is probable, taking into account business
forecasts and tax regulations. The Group, and entity in which losses are
recognised, has seen underlying profitability for both the current and prior
year, and expects to continue to be profit making. Therefore, management
considers it appropriate to recognise a deferred tax asset.
Deferred tax assets and liabilities are only offset where there is a legally
enforceable right of offset and there is an intention to settle the balances
on a net basis.
The reconciliation of the deferred tax asset is shown below:
Group Tax losses Accelerated capital allowances Total
£'000 £'000 £'000
At 1 January 2023 8,251 (144) 8,107
Statement of Comprehensive Income movement (2,213) (375) (2,588)
At 31 December 2023 6,038 (519) 5,519
Statement of Comprehensive Income movement (535) (1,322) (1,857)
At 31 December 2024 5,503 (1,841) 3,662
The current portion of the deferred tax asset cannot be reliably estimated.
12. Earnings per share
Basic earnings per share has been calculated by dividing the profit
attributable to shareholders by the weighted average number of shares in issue
during the year.
2024 2023
Basic earnings per share (p) 1.57p 2.38p
Basic adjusted earnings per share (p) 1.69p 1.27p
Diluted earnings per share (p) 1.55p 2.35p
Diluted adjusted earnings per share (p) 1.67p 1.25p
Diluted earnings per share has been calculated after adjusting the weighted
average number of shares used in the basic calculation to assume the
conversion of all potentially dilutive shares. A potentially dilutive share is
a warrant or option where its exercise price is below the average market price
of hVIVO shares during the year and any performance conditions attaching to
the scheme have been met at the Statement of Financial Position date. The
adjusted profit is used in the calculation of adjusted earnings per share as
reconciled below:
2024 2023
£'000 £'000
Profit for the year 10,652 16,115
Initial recognition of deferred tax assets - (8,107)
Share based payments 836 575
Adjusted profit for the year 11,488 8,583
The numbers of shares used in calculating basic and diluted earnings per share
are reconciled below.
2024 2023
Weighted average number of shares in issue No. No.
Basic 680,371,877 677,444,133
Dilution for share options and warrants 7,883,099 8,403,182
Diluted 688,254,976 685,847,315
13. Intangible assets
Goodwill Software Other Intangible Assets Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2023 7,228 2,286 685 10,199
Additions - - - -
At 31 December 2023 7,228 2,286 685 10,199
Transfer from property plant and equipment - 63 - 63
Additions - 44 - 44
Disposals - - (685) (685)
At 31 December 2024 7,228 2,393 - 9,621
Amortisation and impairment -
At 1 January 2023 1,628 2,192 356 4,176
Charge for the year - 27 75 102
Impairment - - 254 254
At 31 December 2023 1,628 2,219 685 4,532
Charge for the year - 30 - 30
Transfer from property plant and equipment - 43 - 43
Disposals - - (685) (685)
At 31 December 2024 1,628 2,292 - 3,920
Net book value
At 1 January 2023 5,600 94 329 6,023
At 31 December 2023 5,600 101 - 5,667
At 31 December 2024 5,600 101 - 5,701
Goodwill was allocated to the Group's single cash‐generating unit (CGU)
identified according to a single operating segment.
2024 2023
£'000 £'000
hVIVO Group 5,600 5,600
Goodwill is tested for impairment at the Statement of Financial Position date.
Management considers that there is adequate headroom when comparing the net
present value of the cash flows to the carrying value of goodwill to conclude
that no impairment of Goodwill is necessary.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 2024 were as
follows:
Longer‐term growth rate (from 2025 onwards) 5%
Discount rate
10%
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 had no intangible assets at 31 December 2024 (2023: nil).
14. Property plant and equipment
Leasehold improvements Plant & Machinery Computer Equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2023 1,292 2,957 1,441 5,690
Additions 4,808 414 194 5,416
Disposals - - (58) (58)
Exchange differences - (1) (10) (11)
At 31 December 2023 6,100 3,370 1,567 11,037
Additions 1,428 817 171 2,416
Disposals (725) (713) (268) (1,706)
Transfer to intangible assets - - (63) (63)
Exchange differences - - (21) (21)
At 31 December 2024 6,803 3,474 1,386 11,663
Depreciation
At 1 January 2023 1,039 2,217 921 4,177
Charge for the year 189 292 244 725
Elimination on disposal - - (58) (58)
Exchange differences - - (10) (10)
At 31 December 2023 1,228 2,509 1,097 4,834
Charge for the year 451 436 211 1,098
Elimination on disposal (725) (713) (268) (1,706)
Transfer to intangible assets - - (43) (43)
Exchange differences - - (18) (18)
At 31 December 2024 954 2,231 980 4,165
Net book value
At 1 January 2023 253 740 520 1,513
At 31 December 2023 4,872 861 470 6,203
At 31 December 2024 5,849 1,243 406 7,500
The Company had no property plant and equipment at 31 December 2024 (2023:
nil).
15. Investments in subsidiaries and associates
2024 2023
Company £'000 £'000
Shares in Group undertakings
At 1 January and 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 (2023: nil) has been made to the investment in subsidiaries.
The subsidiaries of hVIVO plc are as follows:
Proportion of ordinary shares and voting rights held (%)
Name of Company Country of Registration Principal activities 2024 2023
hVIVO Holdings Limited*^ England & Wales Intermediate holding company 100 100
hVIVO Services Limited* England & Wales Viral challenge and related laboratory services 100 100
hVIVO Inc. USA Sales & marketing services 100 100
Venn Life Sciences ED B.V^ Netherlands Pre‐clinical & early clinical research services 100 100
Venn Life Science Biometry Services S.A.S^ France Data management & statistics services 100 100
Open Orphan DAC^ Ireland Group services company 100 100
Venn Life Sciences Limited^ Ireland Dormant 100 100
Venn Life Sciences (Germany) GmbH^ Germany In liquidation 100 100
Venn Life Sciences (France) S.A.S^ France Liquidated in 2024 - 100
*Registered address 40 Bank Street, Floor 24, London, E14 5NR
^Directly owned by hVIVO plc
These consolidated financial statements incorporate the financial statements
of all entities controlled by the Company at 31 December 2024.
The Group, via its holding in hVIVO Holdings Limited, has investments in two
associated companies as follows:
Name of Company Country of Registration Principal activities Proportion of ordinary shares held/voting rights held (%)
Imutex Limited(1) England & Wales Clinical development 49/49
PrEP Biopharm Limited(2) England & Wales In liquidation 62.62/49.98
(1) Carrying value of nil at 31 December 2024 (2023: nil). The registered
office address is The Walbrook Building, 25 Walbrook, London, England, EC4N
8AF.
(2) Carrying value of nil at 31 December 2024 (2023: nil). The registered
office address is Unit 2 Spinnaker Court 1c Becketts Place, Hampton Wick,
Kingston Upon Thames, KT1 4EQ.
16. Leases and right of use assets
Right of use assets Lease Liabilities
2024 2023 2024 2023
£'000 £'000 £'000 £'000
As at 1 January 13,835 1,610 12,530 1,563
Additions 417 14,149 417 12,890
Leases exited - (22) - (24)
Depreciation expense (2,434) (1,889) - -
Interest expense - - 955 155
Payments - - (984) (2,044)
Exchange differences (17) (13) (17) (10)
As at 31 December 11,801 13,835 12,901 12,530
Current 2,510 367
Non-current 10,391 12,163
Maturity of lease liabilities:
31 December 2024 31 December 2023
Contractual undiscounted cash flows £'000 £'000
Within one year 2,510 367
Between one to two years 2,088 2,457
Between two to five years 12,883 9,706
Total undiscounted lease liability at 31 December 17,481 12,530
Short‐term lease payments expensed during the year ended 31 December 2024
were £2,000 (2023: £19,000).
17. Inventories
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Virus inventory 641 286 - -
Consumables 163 140 - -
Total inventories 804 426 - -
Inventories expensed in the Consolidated Statement of Comprehensive Income are
£800,000 (2023: 685,000) and are shown within direct project and
administrative costs. No provision against inventories was required during
2024.
18. Trade and other receivables
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade receivables 4,467 9,117 - -
Prepayments 1,288 1,405 286 72
Accrued income 4,843 760 - -
Amounts owed by subsidiary undertakings - - 1,025 1,445
Other receivables (incl. R&D tax credits) 4,647 3,323 262 10
15,245 14,605 1,573 1,527
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 an
accrued income balance. 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 60 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
2024 2023 2024 2023
£'000 £'000 £'000 £'000
GBP£ 13,900 13,167 548 90
Euro 1,345 1,438 1,025 1,437
Total 15,245 14,605 1,573 1,527
19. Cash and cash equivalents
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Cash at bank and on hand 44,180 36,973 42 2,281
The Directors consider that the carrying amount of cash and cash equivalents
approximates to its fair value.
20. Trade and other payables
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade payables 1,884 2,088 22 51
Amounts due to subsidiary undertakings - - 3,101 2,890
Social security and other taxes 851 814 28 28
Other payables 503 525 - -
Accrued expenses 6,610 5,857 303 277
Deferred income 19,557 24,944 - -
29,405 34,228 3,453 3,246
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 a
deferred income balance. 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 any 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.
21. Leasehold provision
2024 2023
£'000 £'000
As at 1 January 2,144 730
Additional provisions 259 1,484
Discount unwind 94 -
Utilisation of provisions (585) (70)
As at 31 December 1,912 2,144
Current - 585
Non-Current 1,912 1,559
1,912 2,144
Leasehold provisions relate to dilapidation provisions for the Group's various
property leases.
22. Capital commitments
Group
The Group had capital commitments of £240,000 relating to the facility build
in Canary Wharf at 31 December 2024 (2023: £1,248,000).
Company
The Company has agreed to act as surety to a lease agreement for its
subsidiary, hVIVO Services Ltd. No liability has been recognised in the
Company Statement of Financial Position.
23. Financial instruments
a) Assets
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
31 December
Assets
Trade and other receivables 9,946 11,486 1,287 1,455
Cash and cash equivalents 44,180 36,973 42 2,281
Total 54,126 48,459 1,329 3,736
Assets in the analysis above are all categorised as 'other financial assets at
amortised cost' for the Group and Company.
b) Liabilities
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
31 December
Liabilities
Lease liabilities (note 16) 12,901 12,530 - -
Trade and other payables 8,999 8,470 3,425 3,218
Total 21,900 21,000 3,425 3,218
Liabilities in the analysis above are all categorised as 'other financial
liabilities at amortised cost' for the Group and Company.
c) Credit quality of financial
assets
The Group is exposed to credit risk from its operating activities (primarily
for trade receivables and other receivables) and from its financing
activities, including deposits with banks and financial institutions, foreign
exchange transactions and other financial instruments.
The Group's maximum exposure to credit risk, due to the failure of counter
parties to perform their obligations as at 31 December 2024 and 31 December
2023, in relation to each class of recognised financial assets, is the
carrying amount of those assets as indicated in the accompanying Statement of
Financial Position.
Trade receivables
The credit quality of trade receivables that are neither past due date nor
impaired have been assessed based on historical information about the
counterparty default rate. The Group does not hold any other receivable
balances with customers, whose past default has resulted in the non‐recovery
of the receivables balances.
Cash at bank
The Company gives careful consideration to which organisations it uses for its
banking services in order to minimise credit risk. The Company seeks to limit
the level of credit risk on cash and cash equivalents by only depositing
surplus liquid funds with counterparty banks that have high credit ratings.
24. Financial risk management
The Group's activities expose it to a variety of financial risks: market risk
(foreign exchange risk and cash flow interest rate risk), credit risk,
liquidity risk and capital risk. The Group's risk management programme focuses
on the unpredictability of the financial markets and seeks to minimise the
potential adverse effects on the Group's financial performance. The Group does
use derivative financial instruments to hedge specific client contracted
currency risk exposures.
Risk management is carried out by the head office finance team. It evaluates
and mitigates financial risks in close cooperation with the Group's operating
units. The Board provides principles for overall risk management whilst the
head office finance team provides specific policy guidance for the operating
units in terms of managing foreign exchange risk, credit risk and cash and
liquidity management.
(a) Market risk
(i) Foreign exchange - cash flow risk
The Group's presentation currency is pounds sterling (GBP) although it
operates internationally and is exposed to foreign exchange risk arising from
various currency exposures, primarily between euro, US dollars and GBP such
that the Group's cash flows are affected by fluctuations in the rate of
exchange between GBP and the aforementioned foreign currencies.
The Group does not speculate in foreign currencies and no operating Company is
permitted to take unmatched positions in any foreign currency.
(ii) Foreign exchange - fair value risk
Translation exposures that arise on converting the results of overseas
subsidiaries are not hedged. Net assets held in foreign currencies are hedged
wherever practical by matching liabilities in the same currency. The principal
exchange rates used by the Group in translating overseas profits and net
assets into GBP are set out in the table below.
Average rate Average rate Year end rate Year end rate
Rate compared to GBP£ 2024 2023 2024 2023
Euro 1.18 1.15 1.21 1.15
USD$ 1.28 1.25 1.25 1.27
As a guide to the sensitivity of the Group's results to movements in foreign
currency exchange rates, a one penny movement in the GBP to euro rate would
impact profit for the year by approximately £24,000 (2023: £21,000).
(iii) Cash flow and fair value interest rate risk
The Group has assets in the form of cash and cash equivalents. Where possible,
the Group earns market interest rates on cash and cash equivalents on deposit.
The Group does not speculate on future changes in interest rates.
The Group does not use interest rate swaps.
(b) Credit risk
Credit risk is managed at the operating business unit level and monitored at
the Group level to ensure adherence to Group policies. Each local subsidiary
and operating business unit is responsible for managing and analysing the
credit risk for each of their new clients before standard payment and delivery
terms and conditions are offered. It is the Group policy to obtain prepayment
deposits from customers where possible. If there is no independent rating,
local management assesses the credit quality of the customer, taking into
account its financial position, past experience and other factors. The
utilisation of credit limits is regularly monitored.
Credit risk also arises from cash and cash equivalents, derivative financial
instruments and deposits with banks and financial institutions, as well as
credit exposures to customers. The Group manages this credit risk by holding
deposits across multiple institutions.
(c) Liquidity risk
Cash flow forecasting is performed in the individual operating entities of the
Group and is aggregated by the Head of Finance team. The Head of Finance team
monitors cash and cash flow forecasts and it is the Group's liquidity risk
management policy to maintain sufficient cash and available funding through an
adequate amount of cash and cash equivalents.
The Group's policy in relation to the finance of its overseas operations
requires that sufficient liquid funds be maintained in each of its territory
subsidiaries to support short and medium‐term operational plans. Where
necessary, short‐term funding is provided by the Company. Excess funds are
placed as short‐term deposits, to provide a balance between interest
earnings and flexibility.
The maturity groupings of the Group's non‐derivative financial liabilities,
namely trade and other payables and lease liabilities, are disclosed in notes
20 and 16 respectively.
(d) Capital risk management
The Group's objectives when managing capital are to safeguard the ability to
continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
The Group has no borrowings at 31 December 2024.
25. Share capital
Group Group Company Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
680,371,877 (2023 - 680,371,877) Ordinary shares of £0.001 680 680 680 680
During the year the Company did not issue any shares. During the prior year
the Company issued 9,324,106 shares @ £0.056 per share resulting in an
increase of £9,000 to share capital and £512,000 to share premium as a
result of share options and warrants being exercised (see note 27).
26. Other reserves
Group and Company
Share premium
Share premium is the difference between the nominal value of shares issued and
the actual cash received for the issued shares.
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 foreign currency reserve arises from a one off transition of the Group
from a presentational currency of euro to pounds sterling, and from the
translation of subsidiaries' results on consolidation which have a functional
currency other than pounds sterling.
27. 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 under its
Long-Term Incentive Plan.
The number of outstanding share options remaining at 31 December 2024, along
with the comparative period are as follows:
2024:
Date of issue Exercise price Vesting date # of options at 01/01/2024 # of options granted # of options exercised # of options lapsed # of options at 31/12/2024
2015 13p 2025 280,000 - - (280,000) -
2020 2p 2024 277,792 - - - 277,792
2022 0.1p 2025 7,227,273 - - - 7,227,273
2024 0.1p 2026-2027 - 7,391,451 - - 7,391,451
7,785,065 7,391,451 - (280,000) 14,896,516
2023:
Date of issue Exercise price Vesting date # of options at 01/01/2023 # of options granted # of options exercised # of options lapsed # of options at 31/12/2023
2015 13p 2025 280,000 - - - 280,000
2019 5.6p 2024 7,716,964 - (7,716,964) - -
2020 2p 2024 277,792 - - - 277,792
2022 0.1p 2025 7,227,273 - - - 7,227,273
15,502,029 - (7,716,964) - 7,785,065
The weighted‐average exercise price of all options outstanding at year end
is 0.14p (2023: 0.63p) and the weighted‐average remaining contractual life
is 6.8 years (2023: 1.0 years).
Share based payment charge for the year was £836,000 included in direct
project and administration costs (2023: £575,000).
New share options granted during the year relate to grants to senior employees
in the Long‐Term Incentive Plan (LTIP). The weighted average fair value of
the options at measurement date was 22.9p per option (2023: 14.7p). The
Company used the Black Scholes model to value the options. The following key
assumptions were factored into the model when valuing these options at the
date of grant (weighted average across all grants):
2024 2023
Share price at grant date 27.2p 19.1p
Exercise price 0.1p 0.1p
Risk free rate 4.0% 3.1%
Expected volatility 60% 74%
Expected life 3 years 3 years
Dividend yield 0.8% 0.0%
A discount has been applied to the fair values to reflect market conditions
contained in the option agreements.
Warrants
There were no warrants outstanding at 31 December 2024, or 31 December 2023.
Movements in the number of warrants outstanding for the prior period are as
follows:
2023:
Date of issue Exercise price Expiry date # of warrants at 01/01/2023 # of warrants expired # of warrants exercised # of warrants at 31/12/2023
11/12/2018 0.1p 10/12/2023 232,696 (232,696) - -
11/12/2018 2.2p 10/12/2023 424,589 (424,589) - -
28/06/2019 0.1p 27/06/2024 1,607,142 - (1,607,142) -
2,264,427 (657,285) (1,607,142) -
28. Dividends
2024 2023
Equity dividends £'000 £'000
Final dividend for 2023: 0.20p per ordinary share 1,358 -
Special dividend for 2022: 0.45p per ordinary share - 3,054
A final dividend for the year ended 31 December 2024 of £1,374,000 (0.20p per
ordinary share) is recommended by the Directors and is to be paid to all
ordinary shareholders on the register at the close of business on 16 May 2025
with payment being made on 11 June 2025, subject to shareholder approval at
the Annual General Meeting.
29. 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:
2024 2023
£'000 £'000
Aggregate emoluments 1,295 1,189
Employer contribution to pension scheme 66 57
1,361 1,246
Key management includes the Directors only.
Other transactions with Directors
Prior period disclosure:
As disclosed in the 2023 report, in December 2018, Venn Life Sciences Holdings
plc completed a £1 million financing from private individuals, including
Cathal Friel who participated via his pension fund, the CMF Pension Fund. The
financing was completed via the issue of a two-year loan note and as part of
their investment, the holders of the loan notes received warrants to purchase
shares in the Group with an expiry date in December 2023. Cathal Friel was
unable to exercise these warrants prior to their expiry due to his knowledge
of insider information for extended periods of time. As such, the Board
agreed that the Group would pay 19.95p per warrant share (being the closing
price on 8 December 2023, the last trading day prior to the Final Date of the
Warrant Instrument) minus the subscription price of £9,573.65 to the CMF
Pension Fund for a total of £121,554 in lieu of the unexercised warrants.
Group
Non‐Executive Group Chairman, Cathal Friel, is a Director of Raglan
Professional Services Limited which has provided advisory and administrative
services to the Group (2024 charge £61,000; 2023 charge £4,000). The balance
owed by the Group to Raglan Professional Services Limited at year end 2024 was
nil (2023: £1,000).
There were no other related party transactions during the year.
Company
During the year the Company absorbed net management charges of £343,000
(2023: £344,000) from its subsidiaries. At 31 December 2024 the Company was
owed £8,825,000 (2023: £11,874,000) by its subsidiaries, and the Company
owed £3,101,000 (2023: £2,890,000) to its subsidiaries. The Company holds a
provision of £7,800,000 against the receivable.
30. Post balance sheet events
In January 2025, the Company acquired 100% of the share capital of CRS
Clinical Research Services Kiel GmbH and CRS Clinical Research Services
Mannheim GmbH, which comprise a German full-service early-phase CRO providing
early clinical development services, including first-in-human and
proof-of-concept trials. The acquisition was completed for a cash
consideration of €10.0 million. The acquired companies recorded unaudited
revenues of €19.9 million in the financial year ended 31 December 2024, with
an adjusted EBITDA loss of €1.8 million.
In February 2025, the Company acquired 100% of the share capital of Cryo Store
Limited (https://cryostore.co.uk/) , a UK specialist provider of high industry
standard, temperature-controlled storage solutions for biological and clinical
materials. The acquisition has been completed for consideration of up to £3.2
million, comprising £2.7 million funded from the Group's existing cash
resources and up to £0.5 million in equity subject to certain terms. Cryo
Store Limited recorded unaudited revenues of £0.89 million in the financial
year ended 31 December 2024, with an EBITDA of £0.52 million.
In March 2025, in order to satisfy the exercise of Yamin 'Mo' Khan's 2022 LTIP
awards the Company issued 6,440,119 ordinary shares for a total consideration
of £6,440.12.
In April 2025, hVIVO Holdings Ltd entered into a share exchange agreement with
Conserv Bioscience Ltd to sell all of its shareholding in Imutex Ltd in
exchange for 100 ordinary shares, representing 10% of the total share capital,
of Conserv Bioscience Ltd.
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