REG - IXICO plc - Financial Results for year ended 30 September 2024
04/12/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241204:nRSD6863Oa&default-theme=true
RNS Number : 6863O IXICO plc 04 December 2024
IXICO plc
("IXICO" or the "Group")
Financial Results for year ended 30 September 2024 & Notice of AGM
04 December 2024 - London, UK. IXICO plc (AIM: IXI, "IXICO" or "the Company")
a global leader in neuroscience imaging, using its AI-driven platform to help
advance therapy research in neurological disorders, announces its audited
results for the year ended 30 September 2024 ("FY24").
The Group has repositioned itself during 2024, slowing down revenue decline,
delivering robust commercial recovery in H2 and defining a new path towards
sustainable performance at scale. The appointment of Bram Goorden as CEO
towards the end of H2, the completion of an oversubscribed £4 million capital
raise in October, and the launch of the Group's next generation TrialTracker
AI-driven imaging platform, underpinned by growth in the Group's orderbook
towards the end of the year, provide strong foundations for a return of the
Group to growth in 2025.
Financial:
Financial performance for the full year marginally outperformed the trading
update provided ahead of the Group's capital raise that completed on 28
October 2024, thanks to a stronger second half. Gross margin and EBITDA
followed suit.
· Revenues of £5.8 million (2023: £6.7 million). The reduction
on the prior period reflects a slower pace of new client contract wins in the
first six months of the year. The Group recorded 27% increase in revenues in
the second half of the year as compared to the first half;
· Gross Profit margin of 47% (2023: 49%); Gross profit margin has
remained largely stable, despite revenue reduction due to careful cost
management across the year;
· EBITDA(1) loss of £1.7 million (2023: £0.8 million); EBITDA
losses improved compared to market expectations, with the increase compared to
prior year due to a combination of lower revenues and a decrease in cost
capitalisation (resulting in increased cost expense) partially offset by cost
reductions delivered across the year;
· Closing, debt-free, cash of £1.8 million (2023: £4.0 million);
Cash was subsequently augmented by £3.7 million net proceeds from an
oversubscribed capital raise completed after the financial year end; and
· Closing Net Asset value of £9.5 million (2023: £11.4 million).
Operational & Commercial:
· Several key appointments were made:
o Bram Goorden appointed in August 2024, to be a commercially focussed
scale-up CEO;
o Mark Warne appointed Independent Chair of the Board in January 2024
o Deepened Board expertise with the appointment of Dr Dipti Amin as a
Non-Executive Director in October 2023.
· The Group's next generation AI-driven platform TrialTracker live
on client trials; Capitalised investment in this platform during the year of
£0.5 million (2023: £1.9 million) and investment in US commercial and
operational presence initiated;
· Important strategic collaborations signed during the year with
the Global Alzheimer's Platform ('GAP') for their BioHermes 2 AD study, and
the expansion of the HD-IH HD consortium. The GAP contract is a high-profile
contract, with several large pharma companies contributing to it, from which
IXICO can build its profile further in AD. The HD-IH HD study is anticipated
to become the leading HD dataset, with over 6,000 MRI datasets analysed by
IXICO, and consolidates IXICO's position in HD;
· £8.9 million in new contracts won during the period reflecting a
combination of new contracts (11 clients) and client contract extensions (15
clients);
· Careful cost management resulted in a 12% annual reduction in
salary costs; and
· Closing order book of £15.3 million (2023: £14.8 million), with
over 75% of forecast revenues for FY25 contracted.
((1) ) EBITDA is defined as earnings before interest, tax,
depreciation, and amortisation
Bram Goorden, CEO of IXICO, said: "We expect 2024 to reflect a transition from
the recent periods of revenue decline. Thanks to careful cost management, a
successful capital raise and by redirecting efforts towards areas of growth,
we have defined a clear strategy for scale. Going into 2025, I am confident we
will continue to see renewed growth, already partly witnessed in the second
half of last year, thanks to the completion and deployment of TTNx, the next
generation of our advanced AI platform, further market leading scientific
innovation, an expanded global footprint and strengthened customer-facing
teams."
Notice of AGM
IXICO announces that its 2025 Annual General Meeting ("AGM") will be held at
IXICO's office, 4(th) Floor Griffin Court, 15 Long Lane, London, EC1A 9PN on
24 January 2025 at 10.30 a.m.
The full Annual Report and Accounts, along with Notice of AGM, will be sent to
shareholders on 20 December 2024 and at the same time will be made available
on the Company's website in accordance with AIM Rule 20.
This announcement contains inside information as stipulated under the retained
EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR")
which is part of UK law by virtue of the European Union (Withdrawal) Act 2018.
The information is disclosed in accordance with the Company's obligations
under Article 17 of the UK MAR.
For further information please contact:
IXICO plc +44 (0) 20 3763 7499
Bram Goorden, Chief Executive Officer
Grant Nash, Chief Financial Officer
Cavendish Capital Markets Limited (Nominated adviser and sole broker) +44 (0)20 7220 0500
Giles Balleny / Dan Hodkinson (Corporate Finance)
Nigel Birks (Life Sciences Specialist Sales)
Harriet Ward (Corporate Broking)
Michael F Johnson / Tamar Cranford-Smith (Sales)
About IXICO
IXICO is dedicated to delivering insights in neuroscience based on its
AI-driven platform to help transform the advancement of investigational
therapies for neurological diseases, such as Huntington's disease, Parkinson's
disease and Alzheimer's disease. The Company's purpose is to advance medicine
and human health by turning data into clinically meaningful information,
providing valuable new insights in neuroscience by supporting pharmaceutical
companies across all phases of CNS clinical research. IXICO's ambition is to
be a leading advocate of artificial intelligence in medical image analysis.
IXICO is a global group, serving large pharma and biotech customers with
breakthrough data analytics at scale via its remote access AI platform.
IXICO's technology provides critical neurodegenerative disease clinical trial
support and insight, helping to reduce R&D risk and uncertainty while
enhancing disease understanding and drug development efficiencies. IXICO is
headquartered in the UK, with subsidiaries in the US and across several other
international territories.
More information is available on www.IXICO.com (http://www.IXICO.com) and
follow us on Twitter @IXICOnews
Chair's Statement
I am delighted to present this statement on behalf of the Board of IXICO plc,
a leader in neuroscience imaging, using AI to drive advanced therapy research
in neurological and neurodegenerative disorders.
The Board has been resolutely focused on strengthening the foundations of the
Group to create value for IXICO's shareholders. The opportunity for IXICO's
innovative AI-driven platform in the rapidly growing multi-billion-dollar
neuroscience imaging market has never been more relevant. During the year
there has been significant progress made towards returning the Group to
growth. In the second half of the year, revenues have grown 27% compared to
H1, the order book has expanded to £15.3 million exceeding 2023 levels, and
the pipeline of new contract opportunities is growing.
Growth strategy
IXICO already has established repeat customer partnerships with global
biopharmaceutical companies and contract research organisations in Phase I, II
and III clinical trials. However, until now, due to a focussed effort to make
progress in a selective number of disease areas, the Group has not fully
exploited the value of its technology. Extensive development of novel
AI-driven algorithms during the year has delivered a platform now capable of
scale - not only across a broader array of neurological diseases, but also in
new areas of revenue such as clinical decision making and precision medicine.
In the last quarter of the year, the Board has undertaken two specific
initiatives to capitalise on an expanding market opportunity:
· The appointment of Bram Goorden as CEO. An experienced leader
in BioPharma and precision medicine, Bram has updated the Group's strategy
with three pillars; Innovate, Lead and Scale. We are seeing immediate results
from the execution of this optimised strategy across operations, product
development and commercial momentum.
· The completion of a substantially oversubscribed £4 million
capital raise concluded in October 2024, putting the Group on a firm financial
footing. The fundraise provides resource certainty to execute the Innovate,
Lead and Scale strategy at pace.
I am confident that these actions, together with additional operational and
commercially focussed activities the Group has undertaken in the last twelve
months, are a solid foundation for sustainable growth.
Financial performance
As previously reported, the macro-economic backdrop during this trading year
has been challenging. However, the sophistication of the Group's technology,
the continued broadening and deepening of its product offering, together with
a dedicated commercial effort has resulted in financial resilience. Latterly,
as reported in the Trading Update on 14 August 2024, the revenue outlook for
IXICO is positive with new contract wins driving revenue growth across the
second half of the year. The Board are pleased to report, as outlined in these
year-end results, this trend to growth continues. Through the activities of
the Audit Committee, the Board, and the Leadership Team, the Group continues
to implement and maintain robust financial controls and reporting.
Organisation
Our people, as ever, remain critical to our success. IXICO is a dynamic
collaborative place to work where innovation thrives. This is demonstrated by
a continued ability to create commercially attractive proprietary technology
while leveraging broader industry advances in AI and imaging. During the year
we broadened the Board with the appointment of Dr Dipti Amin as an Independent
Non-Executive Director. Dr Amin is a medically trained senior executive with
extensive commercial, leadership and operational experience, in medicine,
pharmacology and the highly regulated healthcare and research sectors. I would
like to thank our people for their hard work, passion, and dedication which
has been instrumental in driving us forward.
Governance
As an AIM-quoted company the Board remains committed to high standards of
corporate governance that ensures the Group operates in a transparent and
ethical way that delivers value for employees, shareholders and stakeholders.
During the year the activities of the Board, highlighted above, have aimed to
secure the financial stability, minimise risk, and optimise the organisational
structure of IXICO.
Outlook
With the new skillsets within the team, and the operations of the business
appropriately resourced, we are now seeing financial performance improving and
anticipate a period of sustained commercial momentum. I would like to extend
my gratitude to all our shareholders, partners, and customers for their trust
and support. Together, we are poised to achieve a differentiated leading
position across the neurological imaging market, at scale.
Always with the end goal in mind, such activity can deliver a deeper
understanding of neurological diseases, and consequently, lead to the
discovery and development of new medicines to improve the lives of patients
around the world.
Mark Warne
Non-Executive Chair
Chief Executive's statement
Executive Summary
As incoming CEO, joining towards the end of our 2024 financial year, I made it
my priority to complete the year on a high for the Group and for our
customers. Together with the excellent IXICO team, we increased commercial
momentum, enacted actions to strengthen the balance sheet, all whilst freeing
up resources for innovation and future expansion in novel areas for our
AI-driven precision medicine platform in neurology.
Two of my initial observations and drivers to join the Group have been
strengthened during these first few months of my tenure:
1. IXICO's science and global operations teams are excellent, and the
technology is groundbreaking as confirmed by customers, key opinion leaders
and the numerous partners with which our Group is collaborating; and
2. The platform and footprint have the potential for significantly more
impact in terms of customer numbers, patient reach and shareholder value.
The Group is preparing to celebrate its 20(th) anniversary, which is a
testament to the heritage and early involvement in helping change the course
of clinical development in the area of neurodegenerative diseases. With many
of the pioneering scientists and technology experts still part of today's
IXICO team, the face of the Group has changed a great deal across recent
years. Particularly, the next generation of our proprietary platform TTNx has
been completed and is now enabled with the latest technological advances in
neuroimaging analytics, as well as guaranteeing future-proof levels of
security, regulatory compliance, scale and user friendliness.
IXICO's leading position in Huntington's Disease (HD) remains unparalleled.
This has been proven by important contracts and collaborations, including the
long-term contract with a US based Pharma announced in August 2024, and our
place in the increasingly influential Huntington's Disease Imaging
Harmonization Consortium (HD-IH). Based on more than 6,000 data sets, we
witness how the insights derived from the work of the HD-IH consortium will
create long term value to the biopharmaceutical partners and support them and
the broader HD research community.
Novel algorithms powered by our proprietary IXIQ.Ai platform in the areas of
Alzheimer's Disease (AD) and Parkinson's Disease (PD) enable the Group to
continue to play a prominent role in those two fields, where we have
long-standing expertise in MRI, PET and other imaging analytics. As a result,
we supported seven major global AD programmes and we further strengthened the
collaboration with the Global Alzheimer's Platform (GAP). This builds on the
previous year's completion of an initial 1,000 participant trial, notable for
achieving a secondary recruitment target requiring a minimum of 20% of the
study participants to be from traditionally underrepresented populations.
This enabled IXICO to report on initial findings on differences between racial
and ethnic groups at the CTAD opening symposium (Boston, October 2023). During
2024, IXICO was awarded the Bio-Hermes 2 trial, extending the program into Tau
PET and MRI and further strengthening the partnership with GAP.
Operationally, we delivered seamlessly for our clients, providing services to
more than 35 neurology trials, broadening our offering across therapeutic
indications whilst improving our service level metrics to exceed our clients'
expectations. Our next generation TrialTracker platform went live and enabled
by the IXIQ.Ai system, we saw the first benefits of this powerful new
platform. I look forward to reporting more progress in 2025 and properly
introducing TTNx to the market.
I am convinced that IXICO can play an even bigger role in the development of
the next generation of treatments for neurodegenerative diseases. This has
resulted in the "Innovate / Lead / Scale" strategy that sets out to accelerate
the development of novel algorithms on our platform to increase our reach and
penetration in the global arena. Important scientific themes such as
neuromelanin as a proxy for dopamine loss in PD and identification of the
vascular fingerprint in Dementia / AD, will define the course of breakthrough
innovation the coming years. IXICO was part of some of the initial biomarker
discovery work in these areas and we are determined to now play a major role
in helping biopharma sponsors with the technology and expertise to equip their
trials with these latest analytics.
These are exciting times as we are part of generating increased understanding
of neurodegenerative diseases whilst seeing important regulatory approvals
come through for drugs such as Eisai's Lecanemab and Eli Lilly's Donanemab.
Several major biopharma companies have expressed heightened focus and
investments in the areas which IXICO has been supporting since its inception.
We are convinced that this will positively impact our ability to deliver on
our purpose of harnessing medical imaging data to advance human health,
strengthening our position as a platform for neuroscience imaging data
analytics, and importantly scaling these efforts to grow our share in the
market of the clinical trials industry.
2024 has been a year of transition for IXICO with lower revenues in the first
half of the year, but an initial trend reversal in the subsequent six months,
thanks to some major contract wins. This trend continues as we build up a
healthier growth trajectory going into 2025. To accelerate this trend and
allow the above-mentioned innovation to act as a driver for revenues, we went
to existing and new investors and successfully concluded a capital raise of
£4 million. The interactions with our key investors, both institutional and
retail and the strong confidence they showed in IXICO (resulting in a
significant oversubscription of the fundraising) were important indicators for
me personally confirming my view that IXICO is poised to play a bigger role in
the current positive innovation landscape, an area which the Group has called
home for 20 years.
We enter our financial year 2025 with an order book of signed contracts valued
at £15.3 million and a stronger pipeline of client opportunities, with
visibility of new contracts to provide a platform for double digit revenue
growth in 2025 and beyond. In addition, I expect to report the results from
our strategy to develop the role of our TTNx platform as an enabler in areas
such as post marketing surveillance (PMS) and clinical decision making,
potentially bringing our solutions closer to patients and their care.
The IXICO team is a highly motivated group of scientists and technology
experts and it is quite the privilege to be leading this team of innovators,
serving some of the most important development programs in solving what's
rapidly becoming society's biggest healthcare challenge: helping patients with
neurodegenerative diseases lead more healthy and fulfilling lives. As I look
forward, 2025 will be a year where we solidify the role of our Group in
supporting this while exploring additional new avenues for increased revenue
generation.
Revenues
IXICO's FY24 revenues were £5.8 million. We expect improved conditions for
the biopharmaceutical industry supporting revenue growth in FY25. As shown in
the chart below, IXICO has historically demonstrated its ability to grow
quickly, delivering strong growth in the 30-40% range between 2017 and 2020
following the win of a large phase III trial. As we have built out the
diversity of our order book following the cancellation of that large trial, we
are now in a good position to win further such studies and return to revenue
growth.
Revenues and revenue growth
R
Source: Company data. Cavendish estimates
Growth strategy & Corporate outlook
Ambition
I have set the target of growing revenues towards £20 million+ in the medium
term based upon the Innovate / Lead / Scale strategy, with an expectation of a
return to revenue growth over 2025 and an initial target beyond this of
reaching £10 million revenues on the back of the recent capital raise. Key
targets to drive revenue growth are:
- Increase the serviceable market to £65m+ by increasing traction in
the AD and PD clinical trial markets.
- Expanding the commercial footprint and pipeline, particularly in the
US.
- Improving the pipeline to order book conversion success rate by
increased differentiation in our analysis offerings.
Future revenues will be supported by expansion of the AI-driven platform into
new revenue streams with a particular focus on moving into post-market
assessments and clinical practice, targeting the large market opportunities
beyond the current contract research organisation model.
In addition, we plan to expand our next-generation AI-powered imaging
biomarker platform, TTNx. TTNx is a full redevelopment of the Group's
TrialTracker platform, making use of Microsoft Azure cloud technology and has
been the subject of significant investment over the past few years. This
platform is validated and is regulatory compliant and provides the Group with
the opportunity to further strengthen its position in the market. We strongly
believe we are well positioned to capitalise on the latent value held within
this platform and unique data assets through the application of our proven
advanced IXIQ.Ai analytics platform.
Over the medium term, the Board has identified opportunities to tap into new
future revenue streams using TTNx by bridging R&D and clinical practice,
facilitating the consolidation of analytics, and supporting clinical decision
making via Software as a Service, licensing or strategic co-development
models. This opportunity arises as TTNx, using Microsoft Azure technologies,
is highly extensible and scalable. This then enables the augmentation of the
platform's capabilities in response to specific opportunities such as the
potential to support clients and clinicians as drugs showing efficacy in
neurological conditions achieve market approval and move into post market
assessment and clinical practice.
The Innovate / Lead / Scale strategy
Innovate
We aim to differentiate IXICO through novel biomarker analytics, enabling the
Group to better penetrate new and larger key disease areas such as AD and PD,
thereby increasing the Group's serviceable market by an estimated factor of
three. In the next 6-12 months, we will seek to further differentiate our
offering through the application of our proven IXIQ.Ai analytics platform in
AD and PD with three new MRI-driven biomarkers to analyse a subject's vascular
"fingerprint", neuromelanin accumulation and inflammatory processes.
More accurate assessment of vascular pathology in AD trials can support
targeted trial recruitment, specifically in populations with an increased
level of vascular pathology as has been shown for some traditionally
underrepresented populations. Furthermore, it allows more informed treatment
decisions and can potentially help identify subjects at risk for
Amyloid-related imaging abnormalities (ARIA) which is important both in
clinical trials and post market assessment. Neuromelanin analysis is used in
PD trials as a proxy for dopamine loss and is considered a potential
alternative to currently used dopamine SPECT / PET biomarkers. MRI-based
quantification of inflammatory processes can support both AD and PD trials as
inflammation plays a role in disease hypotheses across both indications and is
increasingly relevant as a treatment target. The additions of these three
biomarkers to our analysis offering is expected to activate a significantly
enhanced pipeline. In focussing on next generation AI powered biomarkers
services, the Group seeks to address a larger proportion of the global
neuroimaging clinical trials market, valued at $13.5 billion in 2022.
Lead
IXICO is focused on solidifying its presence and impact in the CNS precision
medicine space by reinforcing its medical key opinion leadership. We are
investing in medical thought leadership to become even more visible on the
global stage by increasing interaction with key opinion leaders ("KOLs") in
the neurology space. We want to give visibility to the work in collaboration
with KOLs that aligns with and showcases our leading technology. We intend to
build on our existing partnerships to validate and position our technology in
AD and PD, such as Global Alzheimer's Platform Foundation (GAP), the Critical
Path For Alzheimer's Disease (CPAD) and the Critical Path for Parkinson's
disease (CPP). GAP seeks to accelerate the delivery of innovative therapies
to individuals living with AD and PD and conducts natural history trials to
assess techniques that support the accurate and cost-effective identification
of individuals with AD. IXICO has provided the imaging services to this
platform since 2020. CPAD is a consortium of commercial and charitable
organisations that work together to support drug development in AD. CPP is the
equivalent consortium focussed on PD.
In 2025 we will increase our conference engagement and demonstrate thought
leadership and engagement, building upon recent success at the Alzheimer's
Association International Conference (AAIC), the Alzheimer's & Parkinson's
Diseases Conference (ADPD) and the Clinical Trials on Alzheimer's Disease
(CTAD) conference. We have shown success of this approach in HD, specifically
through the Huntington's Disease Imaging Harmonization (HD-IH) consortium,
where our team is analysing over 6,000 datasets in partnership with the CHDI
foundation and several biopharmaceutical companies. This project validates
IXICO's analysis capabilities, with KOLs publishing and presenting on the
results from this consortium. A consequence of this, we have further
cemented our position as being the leading provider of image analysis services
in HD.
Scale & Execute
Rapid change in the design and execution of clinical trials requires global
commercial reach for clinical trial neuroimaging services, particularly into
North America.
The significance of the North American market cannot be understated: 83, or
44%, of current AD clinical trials are exclusively conducted in North America.
The region is home to a significant proportion of key neurological imaging
decision makers, including those employed by Biogen, Roche, Lilly, Takeda, and
Janssen. Furthermore, North America is the centre for key scientific
collaborations and consortia, including the Global Alzheimer's Platform
Foundation (GAP), CHDI Foundation, Alzheimer's Disease Neuroimaging Initiative
(ADNI) and CPAD amongst others. As a result, we believe that increased focus
on the North American market will drive the Group's exposure to key industry
players, widen IXICO's geographic reach in line with changing client needs,
and expand the Group's addressable market. We are not starting from scratch
with our focus on North America. 14 of the 26 projects that are currently in
the Group's orderbook are US based (or US focused) projects. This equates to
c.45% of the Group's orderbook by value and US based projects have contributed
c.40% of the Group's 2024 revenues. It is a focus on accelerating this growth
further, that is a key strut in the Group's strategy.
To scale our operations effectively, we plan to grow our global pipeline and
revenue potential through increased access to client and large Contract
Research Organisation (CRO) decision-makers, driving business development. We
aim to increase our serviceable market by an estimated factor of three, expand
our commercial pipeline by a factor of four, and improve our pipeline-to-order
book conversion success rate.
In the medium term, IXICO will focus on accelerating growth by actively
pursuing new addressable markets beyond the traditional CRO model, through
extending our technology platform into post market assessment and, in
partnership with others, investigate utility in clinical decision support.
This reflects the extensibility IXICO has built into its TTNx platform which
enables us, via partnership opportunities, to support the provision of
multi-biomarker platforms and/or bring closer the interactions and seamless
communication of data with large scale CROs, analysis groups, imaging
providers and/or providers of electronic health records (EHR). We have
identified these as opportunities to leverage our TTNx platform into areas
that require highly resilient, secure but bespoke technologies to underpin the
collection, collation and analysis of large-scale data. TTNx has been
developed to enable the delivery of post marketing assessment studies, the
potential of which has been shown, albeit on a relatively small scale.
Bram Goorden
Chief Executive Officer
Financial review
Right sizing the Group for future growth.
In late 2024, IXICO raised just over £4.0 million (£3.7 million net) to
deliver the next phase of the Group's strategy. This strategy is focussed on
leveraging the significant latent value the Group has developed within its
science and technology platform. It is anticipated that the investments made
subsequent to this capital raise will return the Group to revenue growth which
will, over the medium term, return improved margins, profitability and cash
generation.
The capital raise was completed at a relatively challenging time in the
clinical trials and financial markets and reflects the depth of existing and
new shareholder interest, conviction and enthusiasm for the strategy laid out
by the Group.
Looking to 2025, a strengthening of the clinical trials market is anticipated,
reflecting a return to 2022 investment levels in drug development. The
capital raise concluded in October 2024, in addition to cost management
decisions executed earlier in the year mean the Group is well placed to
leverage this market improvement by investing in a clearly defined set of
strategic priorities.
This review includes a comparison of the financial KPIs used to compare
performance to the prior year, a summary of which is shown below:
KPI 2024 result 2023 result Movement
Revenue £5.8m £6.7m £0.9m↓
Gross profit £2.7m £3.3m £0.6m↓
Gross margin 47.0% 49.1% 210bps↓
EBITDA loss (£1.7m) (£0.8m) £0.9m↓
Operating loss (£2.2m) (£1.4m) £0.8m↓
Loss per share (4.14p) (2.44p) 1.70p↓
Order book £15.3m £14.8m £0.5m↑
Net assets £9.5m £11.4m £1.9m↓
Cash £1.8m £4.0m £2.2m↓
Non-current asset investments £0.5m £1.9m £1.4m↓
Revenue
Revenue for the year of £5.8 million (2023: £6.7 million) represents a
year-on-year contraction of 13%. This contraction was caused by the weak
market conditions across the clinical trials market throughout 2023 and the
first half of 2024 resulting in lower levels of contract wins during this
period. As 2024 progressed, a material uptick in the number and value of
contracts wins has resulted in a £0.5 million increase in the value of the
order book at the end of the year (£15.3 million) as compared to the same
timepoint in the prior year (£14.8 million). Growth in the orderbook is an
important metric for the Group, as this provides a strong lead indicator of
future revenues.
Gross profit
The Group reports gross profit of £2.7 million for the year (2023: £3.3
million). This equates to a gross margin of 47.0% (2023: 49.1%). Whilst this
is a strong gross margin, the reduction on the prior year reflects the
reduction in revenues and the relatively fixed cost base of the Group.
Gross profit is driven by both the revenue volume itself as well as the mix of
revenues being delivered. Across 2024, approximately 60% of the Group's
revenues have been from phase I and phase II clinical trials (which tend to be
lower margin than later phase trials). Positively, this portfolio provides a
strong base for future revenue growth, as those trials which successfully move
from early to late phase provide the Group with the opportunity to continue
providing services as these trials transition to larger, later phase, more
profitable trials.
Earnings before interest, tax, depreciation, and amortisation ('EBITDA')
The Group delivered an EBITDA loss of £1.7 million in the year (2023: £0.8
million). This reflects the reduction in revenues, tighter margins, a couple
of non-recurring items that supressed profitability in 2024 and a reduced
level of cost capitalisation. These negative impacts have then been
partially offset by careful cost management including the completion of a
headcount reduction exercise that removed 12% of salary costs between 2023 and
2024.
2024 2023
£000 £000
Profit attributable to equity holders (2,001) (1,178)
Depreciation of fixed assets 239 400
Amortisation of fixed assets 236 225
Interest on lease liabilities 21 29
Other interest payable 3 -
Interest on cash held at bank (85) (105)
Taxation (93) (183)
EBITDA (1,680) (812)
Operating profit
Operating expenditure in the year reflected careful cost management alongside
targeted investment, specifically:
· research and development expenses of £1.3 million (2023: £0.9
million) included the development of new algorithms to support image analysis
in new and existing therapeutic indications. In addition, the Group
capitalised £0.3 million of internal development expenditure primarily in
respect of its next generation Trial Tracker platform (2023: £1.2 million);
· sales and marketing expenses of £1.4 million (2023: £1.3
million) reflecting the investment in sales executives and marketing and
product capabilities as well as £0.1 million of one-time costs related to
commercial consultancy; and
· general and administrative expenses of £2.9 million (2023: £2.9
million) reflecting savings in headcount following a restructure at the start
of the year, offset by additional one-time expenditure of approximately
£0.3million relating to CEO succession.
Operating losses totalled £2.2 million (2023: £1.4 million) equated to an
operating loss margin of 37% (2023: 22%).
Order book
The Group grew its contracted order book during the year. On 30 September 2024
this totalled £15.3 million (2023: £14.8 million), which takes account of
£5.8 million of revenues delivered during the financial year, £8.9 million
of new and expanded multi-year contracts secured during the year and £2.7
million of trial descopes due to client trial failures and minor foreign
exchange movement in the year. This net growth in the order book reflects the
improvements in the clinical trials market in the latter part of 2024.
Growth in orderbook provides a leading indicator of future growth. The
orderbook increase is 3% across the year, with an increase of 20% since the
half-year reflecting the marked increase in new contract wins in this latter
part of the year.
Looking forward, the Group aims to report accelerated growth in orderbook on
an annual basis such that a sustainable level of greater than 10% revenue
growth is achieved.
New contracts won were with 11 clients with contract extensions with 15
clients.
2024 2023
£000 £000
Opening orderbook 14,753 16,019
New wins 8,947 8,030
Revenue (5,766) (6,665)
Net descoping, inflation and FX (2,674) (2,631)
Closing orderbook 15,260 14,753
Cash
The Group reported a cash balance on 30 September 2024 of £1.8 million (2023:
£4.0 million). The reduction in cash reflects operating cash outflows after
tax receipts of £1.7 million in the year (2023: £0.3 million cash inflow),
£0.4 million (2023: £1.9 million) of capitalised investment in data and
technology assets designed to support future scalability and £0.1 million
(2023: £0.2 million) of lease payments on the Group offices.
The Group completed a successful capital raise of just over £4.0 million
(£3.7 million after fees) soon after the close of the 2024 financial year.
Non-current asset investments
The Group capitalised £0.5 million of non-current assets in the year to 30
September 2024 (2023: £1.9 million). This decrease in non-current assets
investment reflects that the Group's next generation TrialTracker platform was
completed and ready for use early in the financial year and consequently saw a
reduced level of capital expenditure invested during 2024. 2025 capitalised
investment in its platform to deliver additional functionality is expected to
be approximately the same level as 2024.
The next generation TrialTracker platform, equipped with the Group's leading
analysis algorithms, positions the Group to further enhance its services into
clinical trials as well as providing opportunities to penetrate adjacent
markets such as post-market and clinical safety assessments in a robust,
secure and regulatory-compliant centralised manner. The platform utilises
Microsoft Azure's cloud infrastructure and technologies.
Net assets
The Group's net asset position decreased by £1.9 million to £9.5 million
across the year (2023: £11.4 million). This reflects losses reported,
partially offset by the investments made in technology assets to underpin
long-term future growth aspirations and market demands.
This net asset position was enhanced soon after the financial year on the
successful completion of a £4.0 million capital raise (£3.7 million after
fees).
Loss per share
The Group reports a loss per share of 4.14p (2023: 2.44p).
Grant Nash
Chief Financial Officer
Financial Statements
Consolidated Statement of Comprehensive Income
for the years ended 30 September 2024 and for 30 September 2023
30-Sep-24 30-Sep-23
Notes £000 £000
Revenue 6 5,766 6,665
Cost of sales (3,055) (3,395)
Gross profit 2,711 3,270
Other income 8 781 393
Operating expenses
Research and development expenses (1,337) (925)
Sales and marketing expenses (1,396) (1,321)
General and administrative expenses (2,913) (2,854)
Total operating expenses 11 (5,646) (5,100)
Operating loss (2,154) (1,437)
Finance income 85 105
Finance expense (25) (29)
Loss on ordinary activities before taxation 11 (2,094) (1,361)
Taxation 12 93 183
Loss attributable to equity holders for the period (2,001) (1,178)
Other comprehensive income/(expense):
Items that will be reclassified subsequently to profit or loss
Foreign exchange translation differences (2) (21)
Movement in fair value of cash flow hedges 23 32 111
Cash flow hedges recycled to revenue 23 (5) (27)
Total other comprehensive income 25 63
Total comprehensive expense attributable
to equity holders for the period (1,976) (1,115)
Loss per share (pence)
Basic loss per share 13 (4.14) (2.44)
Diluted loss per share 13 (4.14) (2.44)
Consolidated Statement of Financial Position
as at 30 September 2024 and 30 September 2023
30-Sep-24 30-Sep-23
Notes £000 £000
Assets
Non-current assets
Property, plant and equipment 14 313 518
Intangible assets 15 6,374 6,147
Commission assets 17 9 39
Total non-current assets 6,696 6,704
Current assets
Trade and other receivables 17 2,213 1,706
Current tax receivables 12 492 549
Cash and cash equivalents 1,787 4,031
Total current assets 4,492 6,286
Total assets 11,188 12,990
Liabilities and equity
Non-current liabilities
Trade and other payables 18 - 2
Lease liabilities 19 150 275
Total non-current liabilities 150 277
Current liabilities
Trade and other payables 18 1,410 1,142
Derivative financial liabilities 23 - 27
Lease liabilities 19 164 112
Total current liabilities 1,574 1,281
Total liabilities 1,724 1,558
Equity
Ordinary shares 21 484 484
Share premium 21 84,802 84,802
Merger relief reserve 21 1,480 1,480
Reverse acquisition reserve 21 (75,308) (75,308)
Cash flow hedge reserve 21,23 - (27)
Foreign exchange translation reserve 21 (97) (95)
Capital redemption reserve 21 7,456 7,456
Accumulated losses 21 (9,353) (7,360)
Total equity 9,464 11,432
Total liabilities and equity 11,188 12,990
Company Statement of Financial Position
as at 30 September 2024 and 30 September 2023
30-Sep-24 30-Sep-23
Restated(1)
Notes £000 £000
Assets
Non-current assets
Investments in Group undertakings 16 5,865 5,857
Trade and other receivables 17 2,224 2,450
Total non-current assets 8,089 8,307
Current assets
Trade and other receivables 17 39 31
Cash and cash equivalents 681 1,469
Total current assets 720 1,500
Total assets 8,809 9,807
Liabilities and equity
Current liabilities
Trade and other payables 18 45 60
Total current liabilities 45 60
Equity
Ordinary shares 21 484 484
Share premium 21 84,802 84,802
Merger relief reserve 21 1,480 1,480
Capital redemption reserve 21 7,456 7,456
Accumulated losses 21 (85,458) (84,475)
Total equity 8,764 9,747
Total liabilities and equity 8,809 9,807
(1)See note 3
Parent Company Income Statement
As permitted by Section 408 of the Companies Act 2006, the income statement of
the Company is not presented as part of these financial statements. The
Company's loss for the financial year was £991,000 (2023: £707,000).
Consolidated Statement of Changes in Equity
for the years ended 30 September 2024 and 30 September 2023
Foreign Cash
Merger Reverse exchange flow Capital
Ordinary Share relief acquisition translation hedge redemption Accumulated
shares premium reserve reserve reserve reserve reserve Losses Total
£000 £000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 October 2022 482 84,802 1,480 (75,308) (74) (111) 7,456 (6,234) 12,493
Total comprehensive income
Loss for the year - - - - - - - (1,178) (1,178)
Other comprehensive income/(expense)
Foreign exchange translation - - - - (21) - - - (21)
Movement in fair value of cash flow - - - - - 111 - - 111
Cash flow hedges recycled to revenue - - - - - (27) - - (27)
Total comprehensive income/(expense) - - - - (21) 84 - (1,178) (1,115)
Transactions with owners
Charge in respect of share options - - - - - - - 52 52
Exercise of share options 2 - - - - - - - 2
Total transactions with owners 2 - - - - - - 52 54
Balance at 30 September 2023 484 84,802 1,480 (75,308) (95) (27) 7,456 (7,360) 11,432
Total comprehensive income
Loss for the year - - - - - - - (2,001) (2,001)
Other comprehensive income/(expense)
Foreign exchange translation - - - - (2) - - - (2)
Movement in fair value of cash flow - - - - - 32 - - 32
Cash flow hedges recycled to revenue - - - - - (5) - - (5)
Total comprehensive income/(expense) - - - - (2) 27 - (2,001) (1,976)
Transactions with owners
Charge in respect of share options - - - - - - - 8 8
Total transactions with owners - - - - - - - 8 8
Balance at 30 September 2024 484 84,802 1,480 (75,308) (97) - 7,456 (9,353) 9,464
Company Statement of Changes in Equity
for the years ended 30 September 2024 and 30 September 2023
Capital
Ordinary Share Merger relief redemption Accumulated
shares premium reserve reserve losses Total
£000 £000 £000 £000 £000 £000
Balance at 1 October 2022 482 84,802 1,480 7,456 (83,820) 10,400
Loss and total comprehensive expense for the year - - - - (707) (707)
Transactions with owners
Charge in respect of share options - - - - 52 52
Exercise of share options 2 - - - - 2
Total transactions with owners 2 - - - 52 54
Balance at 30 September 2023 484 84,802 1,480 7,456 (84,475) 9,747
Loss and total comprehensive expense for the year - - - - (991) (991)
Transactions with owners
Charge in respect of share options - - - - 8 8
Total transactions with owners - - - - 8 8
Balance at 30 September 2024 484 84,802 1,480 7,456 (85,458) 8,764
Consolidated Statements of Cash Flows
for the years ended 30 September 2024 and 30 September 2023
30-Sep-24 30-Sep-23
£000 £000
Cash flows from operating activities
Loss for the financial year (2,001) (1,178)
Finance income (85) (105)
Finance expense 25 29
Taxation (93) (183)
Depreciation of fixed assets 239 400
Amortisation of intangibles 236 225
Research and development expenditure credit (405) (355)
Impairment of intangible assets - 14
Share option charge 8 52
(2,076) (1,101)
Changes in working capital
(Increase)/decrease in trade and other receivables (559) 1,290
Increase/(decrease) in trade and other payables 351 (327)
Cash (used in)/generated from operations (2,284) (138)
Taxation received 553 456
Taxation paid (1) (16)
Net cash generated from operating activities (1,732) 302
Cash flows from investing activities
Purchase of property, plant and equipment (34) (100)
Purchase of intangible assets including staff costs capitalised (437) (1,863)
Finance income 94 99
Net cash used in from investing activities (377) (1,864)
Cash flows from financing activities
Issue of shares - 2
Repayment of lease liabilities (134) (158)
Net cash used in from financing activities (134) (156)
Movements in cash and cash equivalents in the period (2,243) (1,718)
Cash and cash equivalents at start of year 4,031 5,769
Effect of exchange rate fluctuations on cash held (1) (20)
Cash and cash equivalents at end of year 1,787 4,031
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
The financial information set out in these results does not constitute the
Group's consolidated statutory accounts for the years ended 30 September 2024
or 2023. Statutory accounts for the year ended 30 September 2023 have been
filed with the Registrar of Companies. The statutory accounts for the year
ended 30 September 2024 will be delivered to the Registrar in due course.
Those accounts have been reported on by the Independent Auditors; their report
for the accounts for both financial years was (i) unqualfied; (ii) did not
include a reference of any matters to which the auditor drew attention by way
of emphasis without qualifying their report; and (iii) did not contain a
statement under 498 (2) or 498 (3) of the Companies act 2006.
1. Presentation of the financial statements
a. General information
IXICO plc (the 'Company') is a public limited company incorporated in England
and Wales and is admitted to trading on the AIM market of the London Stock
Exchange under the symbol IXI. The address of its registered office is 4th
Floor, Griffin Court, 15 Long Lane, London EC1A 9PN.
The Company is the parent of the subsidiaries detailed in note 16, together
referred to throughout as 'the Group'. The Group is an established provider of
technology-enabled services to the global biopharmaceutical industry. The
Group's services are used to select participants for clinical trials and
assess the safety and efficacy of new drugs in development within the field of
neurological disease.
b. Basis of preparation
The consolidated financial statements have been prepared on a going concern
basis and in accordance with international accounting standards in conformity
with the requirement of the Companies Act 2006.
The consolidated financial statements comprise a Statement of Comprehensive
Income, a Statement of Financial Position, a Statement of Changes in Equity, a
Statement of Cash Flows, and accompanying notes. These financial statements
have been prepared under the historical cost convention modified by the
revaluation of certain financial instruments.
The consolidated financial statements are presented in Great British Pounds
('£' or 'GBP') and are rounded to the nearest thousand unless otherwise
stated. This is the predominant functional currency of the Group, and is the
currency of the primary economic environment in which it operates. Foreign
currency transactions are accounted in accordance with the policies set out
below.
The Company has elected to use Financial Reporting Standard - 'The Reduced
Disclosure Framework' (FRS101). In preparing these financial statements the
Company has taken advantage of all disclosure exemptions conferred by FRS 101.
Therefore, these financial statements do not include:
· A statement of cash flows and related notes;
· The requirement to produce a statement of financial position at
the beginning of the earliest comparative period;
· The requirements of IAS 24 'Related Party Disclosures' to
disclose related party transactions entered in to between two or more members
of the group as they are wholly owned within the group;
· The effect of future accounting standards not adopted;
· Paragraphs 45(b) and 46 to 52 of IFRS 2, 'Share-based payment'
(details of the number and weighted average exercise prices of share options,
and how the fair value of goods or services received was determined);
· Paragraphs 91 to 99 of IFRS 13, 'Fair value measurement'
(disclosure of valuation techniques and inputs used for fair value measurement
of assets and liabilities).
· Disclosures in relation to impairment of assets
· IFRS 7, 'Financial instruments: Disclosures'.
c. Basis of consolidation
The consolidated financial statements incorporate the accounts of the Company
and its subsidiary companies adjusted to eliminate intra-Group balances and
any unrealised gains and losses or income and expenses arising from
intra-Group transactions. The Company's subsidiaries are detailed in note 16.
When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the Group's
accounting policies.
The Group controls a subsidiary when the Group is exposed to, or has rights
to, variable returns from its involvement with a subsidiary and has the
ability to affect those returns through its power over a subsidiary. In
assessing control, potential voting rights that are currently exercisable or
convertible are taken into account.
The results of subsidiary companies are included in the consolidated financial
statements from the date that control commences until the date that control
ceases. The assets and liabilities of foreign operations are translated into
GBP at exchange rates prevailing at the end of the reporting period. Income
statements and cash flows of foreign operations are translated into GBP at
average monthly exchange rates which approximate foreign exchange rates at the
date of the transaction. Foreign exchange differences arising on retranslation
are recognised directly in a separate translation reserve.
d. Going concern
Following the completion of a £4 million oversubscribed capital raise in
October 2024, the Group is well capitalised to deliver on its strategic
goals. This capital raise was supported by both existing and new
institutional investors confirming strong alignment to the Group's strategy.
In addition, the commercial traction of the Group, following a challenging
eighteen-month period, improved materially during the second half of the 2024
financial year, resulting in a larger orderbook (book of signed contracts)
compared to twelve months previous.
The Group has a strong balance sheet for its size with financial year end net
assets of £9.5 million, a £1.8 million cash balance that was subsequently
bolstered by a capital raise in October 2024. During the year the Group
secured £8.9 million of new contracts providing it with good visibility of
future revenues across a diversified portfolio of clients and projects..
In assessing going concern, management has prepared detailed sensitised
forecasts which consider different scenarios through to December 2025. These
include the risk to current projects and expected future sales pipelines. The
Directors have considered these forecasts, alongside the Group's strong
balance sheet and cash balance as well as the ability for the Group to
mitigate costs if necessary. After due consideration of these forecasts, the
Directors concluded with confidence that the Group has adequate financial
resources to continue in operation for the foreseeable future.
2. New and amended accounting standards and interpretations
a. Adoption of new accounting standards for the year ended 30
September 2024
The Group has adopted all new and amended accounting standards and
interpretations issued by the International Accounting Standards Board
('IASB') that are mandatory for the current reporting period.
There was no impact on the Group's financial statements as a result of
adopting these standards.
b. Accounting developments affecting financial statements in
subsequent periods
At the date of authorisation of these financial statements, several new, but
not yet effective, standards and amendments to existing standards and
interpretations have been published by the IASB. The standards and amendments
that are not yet effective and have not been adopted early by the Group
include:
• Classification of liabilities as current or non-current
(Amendments to IAS 1)
• Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
• Definition of Accounting Estimates
• Disclosure of Accounting Policies
The Directors anticipate, based on current business processes, that the
introduction of the above standards and amendments will not have a material
impact on the Group and Company financial statements and therefore the impact
of these changes on the financial statements has not been assessed.
3. Prior period adjustment
The Company has reclassified Amounts due from subsidiary undertakings to
non-current assets based on the likelihood of this being repaid in the
following 12 months, this is in line with the assessment of the subsidiary
undertaking. Following this assessment, the Company reassessed the
classification of this in the previous financial year. The Company has
determined the available information in the previous year would lead to this
same conclusion and has so restated this comparative information in the
current year.
The impact on the Company's Financial Statements is limited to the non-current
and current asset lines with no effect on loss for the financial year or net
assets, as restated in the Company balance sheet and note 17.
4. Material accounting policies
4.1 Revenue
Revenue is principally derived from service revenue. Revenue comprises the
transaction price, being the amount of consideration the Group expects to be
entitled to in exchange for transferring promised goods or services to a
customer in the ordinary course of business net of value-added tax, returns,
rebates and discounts and after eliminating sales within the Group.
In determining whether to recognise revenue, the Group follows a 5-step
process:
1. Identifying the contract with a client;
2. Identifying the performance obligations;
3. Determining the transaction price;
4. Allocating the transaction price to the performance obligations; and
5. Recognising revenue when/as performance obligation(s) are satisfied.
All services provided to clients are agreed at the inception of a project
through contracts, wherein the transaction price is determined and agreed for
each performance obligation in the schedule of work. The transaction price
agreed at the outset is not variable or subject to any refunds or warranties,
and this is consistent across all revenue streams. A critical part of the
contract is a detailed schedule of work that provides the list of services to
be provided by the Group. Under the requirements of IFRS 15 - Revenue from
Contracts with Customers, the Group is required to identify individual and
distinct performance obligations within each contract. This represents a
judgement, and the Group has considered whether each individual service
provided meets these requirements in its own right and in the context of the
contract, by assessing in particular the level of interrelationship between
each type of service and the nature of the contract entered in to with
clients.
The Group has identified performance obligations within each of the revenue
streams as set out below. The transaction price associated to each performance
obligation is allocated based on their relative stand-alone selling price.
Revenue is recognised once the performance obligation is met for each distinct
service. Deferred income and advanced payments are recognised where
consideration is received before all performance considerations have been
completed. They are then released in line with contractual terms which dictate
which performance obligations they relate to. In some instances the Group
invoices in advance of work being completed, a corresponding contract
liability is therefore created to account for this. The Group also invoices on
completion of contractual milestone. In these instances accrued income is
recognised until the invoices are issued to reflect the Group's right to
compensation for these completed but not invoiced performance obligations.
Revenue types
The Group's contracts comprise a variety of performance obligations. These
obligations are all considered streams of a single revenue type, being service
revenue. Most of the Group's revenue is recognised at a point in time; the
Group recognises this revenue once control is passed to the client, or once
the service has been delivered on behalf of the client.
The Group's most significant streams of service revenue are outlined below and
have the respective recognition criteria:
Service type Performance obligations Revenue recognition policy
Project & site set up This service type includes the initial project set up documentation, such as Revenue for this service is recognised at a point in time once the Group has
scientific protocols and operational guides, and close out activities such as delivered the relevant material on behalf of the client.
Training materials and delivery scientific reports. Where a tangible product is created, the performance
obligation is met once the item is transferred to the client.
Scientific reports
For training materials and delivery, revenue is recognised at the point in
time when a site has completed its training.
In respect of training, materials are prepared in advance and provided to
clients as tools for site training. Site training is provided either through
live online training or through a self-paced training module. The performance
obligation is met once each individual site has completed the training.
Project management Each contract requires various project management activities. These services The services provided for project and site management represents a provision
are provided throughout the duration of a contract. Site management services of ongoing services. As the fee is charged monthly to the client over the
Site management are provided throughout the duration of a site being operational and would duration for which management services are provided, revenue for these items
typically be shorter than the project management cycle. For both activities, is recognised over a series of points in time across the contract.
the costs and time spent delivering these services are generally spread evenly
over the project lifetime. As such the performance obligation is met when the
specific service is provided each month.
TrialTracker configuration and access The TrialTracker platform delivers a robust and comprehensive set of The deployment of TrialTracker is recognised over time as the platform is
centralised imaging services designed to efficiently manage the complex configured for the customer. This is because an asset is being created that
imaging workflow, including image upload, quality control, reading and has no alternative use for the Group and there is an enforceable entitlement
analysis. The platform also allows for reporting and data transfer. This to receive payment for the work completed to date.
involves the initial configuration and deployment of TrialTracker, and access
granted to client trial sites for upload of clinical information.
The ongoing access fee is charged monthly to the client and so revenue is
recognised over a series of points in time across the contract.
Due to the lack of interrelationship between the two distinct services
provided, each are recognised independently. The performance obligations for
each are:
· The performance obligation for deployment is met over a period of
time during the configuration and development of TrialTracker.
· The performance obligation for ongoing access to TrialTracker for
the upload of data by client trial sites is recognised over the duration of
the project once TrialTracker is deployed.
Data management and quality control Ensuring data are managed appropriately and that the data are of a high In respect of data quality control, revenue will be recognised at the point in
quality is critical in the delivery of the Group's service. The data time when data is quality checked.
management and imaging teams work in collaboration to ensure ongoing integrity
of data.
The services provided for data management represents a provision of ongoing
services.
The data will go through a series of quality control reviews prior to being
used in the Group's performance of reading and analysis. Therefore, the
performance obligation is met once the data is quality checked.
As the fee is charged monthly to the client over the duration for which data
management is required, revenue for these items is recognised over a series of
points in time across the contract.
Data management is an ongoing service performed throughout the duration of a
project whilst data is being received and managed on a project. The respective
costs and time spent delivering this service is generally spread evenly over
the duration in which data is being managed and as such the performance
obligation is met when the specific service is provided each month.
Data reading and analysis The Group provides data analysis services across a range of biomarkers, Revenue from reading and analysis of clinical data is recognised at the point
providing high-quality, clinically meaningful data. The performance obligation in time when the work is complete.
for these services is met once the analysis is completed.
Licence revenue Revenue relating to licencing is entirely attributable to TrialTracker. Each Revenue for both the licencing and support are recognised on a straight-line
agreement will grant the user rights to access the software for their own use basis over the duration of the contract and is therefore recognised over time.
and receive associated technical support during the licence period. Licence revenue in the current year is not material.
The granting of the licence and its associated support are distinct
performance obligations and are met on a straight-line basis over the contract
term.
Change orders
Throughout the duration of a contract, the client may request additional
services or service changes to be made. For revenue recognition purposes, the
Group treats a change order or contract modification to a client agreement as
a separate contract, if both:
· the scope changes due to the addition, or reduction, of
'distinct' services; and
· the price change reflects the services stand-alone selling prices
('SSP') under the circumstances of the modified contract.
The revenue recognition for the change order is applied in the same way as the
original contract, as detailed above, with the original client agreement
remaining unchanged.
The Group has determined that it acted as an agent in no material contracts in
the year. The Group charges a management fee and recognises this as revenue.
This contract delivered £nil (2023: £13,000) of revenues in the year.
4.2 Other income
Government grants and assistance
A government grant is recognised only when there is reasonable assurance that
the Group will comply with any conditions attached to the grant and the grant
will be received. The grants are recognised as income over the period
necessary to match them with the related costs, for which they are intended to
compensate, on a systematic basis. The Group recognises grant income as an
item of other income.
Research and Development Expenditure Credit ('RDEC')
The Group has elected to take advantage of the RDEC introduced in the Finance
Act 2013. A company may surrender corporation tax losses on research and
development expenditure incurred on or after 1 April 2013 for a corporation
tax refund. Relief is given as a taxable credit on 13% of qualifying research
and development expenditure, with the rate increasing to 20% for expenses
incurred from 1 April 2024. The Group recognises research and development
expenditure credit as an item of other income, taking advantage of the 'above
the line' presentation, and is recognised in the year for which the research
and development relates.
4.3 Research and development expenditure
In all instances across the Group, research expenditure is expensed through
the income statement. For development expenditure, items will be expensed
where the recognition criteria for internally generated intangible assets is
not met.
The main criteria used to assess this, as required under IAS 38 - Intangible
Assets, are:
- Demonstrating technical feasibility of completing the intangible
asset;
- Intention to complete the asset;
- Ability to use or sell the asset in order to generate future
economic benefit;
- Availability of adequate technical or other resources to complete
development; and
- Ability to measure reliably the expenditure attributable to the
asset.
It was determined that the Group continued to meet the above criteria in
respect of specific developments to its TrialTracker platform and data
analytics service offering. As a result, associated development costs are
capitalised in the year and an intangible asset is recognised as set out in
note 15.
4.4 Share-based payments
Equity-settled share-based payments are measured at the fair value of the
equity instruments at the grant date. The fair value determined at the grant
date of the equity-settled share-based payment is expensed on a straight-line
basis over the performance period, based on the Group's estimate of equity
instruments that will eventually vest. At each reporting date, the Group
revises its estimate of the number of equity instruments expected to vest as a
result of the effect of any non-market-based performance conditions.
Any changes that impact the original estimates, for example the effect of
employees who have left the Group in the year and have forfeited their
options, is recognised in the Consolidated Statement of Comprehensive Income
such that the cumulative expense reflects the revised estimate, with a
corresponding adjustment to equity reserves.
Details regarding the determination of the fair value of equity-settled
share-based transactions are set out in note 22 of the consolidated financial
statements.
4.5 Employee benefits
All employee benefit costs are recognised in the Consolidated Statement of
Comprehensive Income as they are incurred. These principally relate to holiday
pay and contributions to the Group defined contribution pension plan.
The assets of the Group pension scheme are held separately from those of the
Group in independently administered pension funds. The Group does not offer
any other post-retirement benefits.
4.6 Leased assets
A lease is defined as a contract that gives the Group the right to use an
asset for a period of time in exchange for consideration. The Group identifies
from the contract the total length and cost of the lease contract, and
determines whether it meets the definition of a right-of-use asset.
Recognition of a right-of-use asset is met if it is longer than 12 months and
of a high value. For those leases that do not meet these criteria, the rental
charge payable under these leases are charged to the Consolidated Statement of
Comprehensive Income on a straight-line basis over the lease term.
The initial recognition and subsequent measurement of right-of-use asset
leases are:
Initial recognition
At the commencement date, the Group measures the lease liability at the
present value of future lease payments, discounted using the Group's
incremental borrowing rate. The Group also recognises a right-of-use asset
which is measured at cost, which is made up of the initial measurement of the
lease liability, any initial direct costs and an estimate of any costs to
reinstate the asset to its original condition.
Subsequent measurement
The lease liability is reduced for payments made and increased for interest
accrued, and is remeasured for any modifications made to the lease. The
right-of-use asset is depreciated on a straight-line basis over the expected
lease term. The asset is also assessed for impairment when such indicators
exist.
On the statement of financial position, right-of-use assets are included in
property, plant and equipment and lease liabilities are shown separately.
Please see note 19 for more information.
4.7 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and, where appropriate, less provisions for impairment. The initial
recognition and subsequent measurement of property, plant and equipment are:
Initial recognition
Property, plant and equipment is initially recognised at acquisition cost,
including any costs directly attributable to bringing the assets to the
location and condition necessary for them to be capable of operating. In most
circumstances, the cost will be its purchase cost, together with the cost of
delivery.
Subsequent measurement
An asset will only be depreciated once it is ready for use. Depreciation is
charged so as to write off the cost of property, plant and equipment, less its
estimated residual value, over the expected useful economic lives of the
assets.
Depreciation is charged on a straight-line basis as follows:
- Office buildings over expected lease term
- Leasehold improvements shorter of 5 years or the lease term
- Fixtures and fittings 3 years
- Equipment 3 years
The disposal or retirement of an asset is determined by comparing the sales
proceeds with the carrying amount. Any gains or losses are recognised within
the Consolidated Statement of Comprehensive Income.
4.8 Intangible assets
Acquired intangibles
Intangible assets that are acquired through business combinations are
recognised as intangible assets if they are separable from the acquired
business or arise from contractual or legal rights. These assets will only be
recognised if they are also expected to generate future economic benefits and
their fair value can be reliably measured.
Initial recognition
Intangible assets acquired separately are measured on initial recognition at
cost. The cost of intangible assets acquired in a business combination is
their fair value at the date of acquisition.
Subsequent measurement
Following capitalisation, the intangible assets are carried at cost less any
accumulated amortisation, and where appropriate, less provisions for
impairment.
Intangible assets are amortised using the straight-line method over their
estimated useful economic life as follows:
- Intangibles acquired through business combinations 5 years
- Computer software 3 years
- Data acquisition 5 years
Amortisation is charged to the Consolidated Statement of Comprehensive Income
and is included within cost of sales for those items directly related to
project activities, or otherwise within general and administrative expenses.
Internally generated intangible assets
Intangible assets that are capitalised internally are deemed to have met the
recognition criteria set out in IAS 38. These items relate to research and
development costs and are considered in note 4.3.
Initial recognition
Internally generated intangible assets are initially recognised at cost once
the recognition criteria of IAS 38 are met.
Subsequent measurement
Any assets that are not yet ready for use will be capitalised as assets under
construction and will not be amortised. Once the asset is ready for use,
amortisation will begin. The amortisation rates adopted are based on the
expected useful economic life of the projects to which they relate, with the
charges recognised in accordance with how the Group receives the benefit from
the technology. The assets useful economic life is as follows:
- Internally generated technology 3 - 5 years
- Proprietary clinical trial platform 15 years based on revenue generated by the asset
4.9 Impairment of non-current assets
Each category of non-current assets is reviewed for impairment annually when
under construction or when there is an indication that an asset may be
impaired, being when events or changes in circumstances indicate that the
carrying value may not be recoverable. An impairment loss is recognised in the
Consolidated Statement of Comprehensive Income for the amount by which the
asset's carrying value exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less cost to
sell and value in use. Non-financial assets, other than goodwill, which have
suffered an impairment are reviewed for possible reversal of the impairment at
each reporting date.
4.10 Investments in Group undertakings
Investments in Group undertakings are initially recognised at cost and
subsequently measured at cost less any impairment provision. Investments are
subject to an annual impairment review, with any impairment charge being
recognised through the Consolidated Statement of Comprehensive Income.
Additions to investments are amounts relating to share options for the
services performed by employees of the subsidiaries of the Company and are
classified as capital contributions within note 16.
4.11 Trade and other receivables
Trade and other receivables are initially recognised at fair value and
subsequently stated at amortised cost using the effective interest method,
less any expected credit losses. The Group makes use of a simplified approach
in accounting for trade and other receivables as well as contract assets and
records the loss allowance as lifetime expected credit losses. These are the
expected shortfalls in contractual cash flows, considering the potential for
default at any point during the life of the financial instrument. In
calculating, the Group uses its historical experience, external indicators and
forward-looking information to calculate the expected credit losses.
The Group assess impairment of trade receivables on an individual basis as
they possess individual credit risk characteristics based on each client.
Refer to note 17 for further information on aging of trade receivables and an
analysis of any expected credit losses.
The Group recognises commission payments as incremental costs from obtaining a
contract. Those that are paid immediately are capitalised under IFRS 15 and
amortised over 3 years (2023: 3 years), being the average length of contracts
entered into by the Group, as opposed to using a tailored time period for each
project. Management reviews this assessment annually to determine that there
are no material variances. Those not paid immediately are accrued over a
period of time as this element of the commission payment requires the
respective employee to remain in service for a specific period. Commission
assets.
4.12 Taxation
Current tax
Current tax represents amounts recoverable within the United Kingdom and is
provided at amounts expected to be recovered using the tax rates and laws that
have been enacted at the Statement of Financial Position date.
Research and development credits
The benefit associated with UK-based research and development is recognised
under the UK's Research and Development Expenditure Credit scheme. Details of
the recognition are set out in note 4.2.
Deferred taxation
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements in accordance with
IAS 12 - Income taxes. Deferred tax liabilities are recognised for all taxable
temporary differences. A deferred tax asset is recognised only to the extent
that it is probable that sufficient taxable profit will be available in future
years to utilise the temporary difference. Deferred tax is not accounted for
if it arises from initial recognition of an asset or liability in a
transaction, other than a business combination, that at the time of the
transaction affects neither the accounting, nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the Statement of Financial Position date
and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset only when there is a legally
enforceable right to set off current tax assets against current tax
liabilities, they relate to income taxes levied by the same taxation authority
and the Group intends to settle these on a net basis.
Deferred tax assets are recognised to the extent it is probable that the
underlying tax loss or deductible temporary difference will be utilised
against future taxable income. This is assessed based on the Group's forecast
of future operating results, adjusted for significant non-taxable income and
expenses and specific limits on the use of any unused tax loss or credit. As
such, the Group does not recognise any deferred tax assets, see note 20.
4.13 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand with original
maturities at inception of 3 months or less.
4.14 Foreign currency translation
Transactions denominated in foreign currencies are translated into Great
British Pounds at actual rates of exchange prevailing at the date of
transaction. Monetary assets and liabilities expressed in foreign currencies
are translated into Great British Pounds at rates of exchange prevailing at
the end of the financial year. All foreign currency exchange differences are
taken to the Consolidated Statement of Comprehensive Income in the year in
which they arise.
Non-monetary items are not retranslated at year end and are measured at
historical cost (translated using the exchange rates at the transaction date),
except for non-monetary items measured at fair value which are translated
using the exchange rates at the date when fair value was determined.
4.15 Trade and other payables
Trade and other payables are non-interest-bearing, unless significantly
overdue, and are initially recognised at fair value and subsequently stated at
amortised cost.
4.16 Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of
economic resources will be required from the Group and amounts can be
estimated reliably. The timing of such outflows may still be uncertain. Such
provisions are measured at the estimated expenditure required to settle the
present obligation based on the most reliable estimate available at the
reporting date, discounted to the present value where material.
Any reimbursement that the Group is virtually certain to collect from a third
party in relation to the related provision will be recognised as a separate
asset.
Liabilities are not recognised where the outflow of economic resources is not
probable, but are instead disclosed as contingent liabilities.
4.17 Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs.
4.18 Financial instruments
Financial assets and financial liabilities are recognised on the Consolidated
Statement of Financial Position when the Group or the Company becomes a party
to the contractual provisions of the instrument. Debt and equity instruments
are classified as either financial liabilities or as equity in accordance with
the substance of the contractual arrangement.
The Group utilises one type of derivative financial instrument - forward
contracts used for the purposes of hedging. These are designated as cash flow
hedges and held at fair value with changes held in the cash flow hedge
reserve. On crystallisation the gain or loss is recycled to revenue to reflect
the risks being hedged. The ineffective portion of the hedging instrument is
recognised in the profit or loss account immediately.
Further information relating to financial instruments and the policies adopted
by the Group to manage risk is found in note 23.
5. Significant management judgement in applying accounting policies
and estimation uncertainty
When preparing the consolidated financial statements, the Directors make a
number of judgements, estimates and assumptions about the recognition and
measurement of assets, liabilities, income and expenses.
Significant management judgements
The following are significant management judgements in applying the accounting
policies of the Group that have the most significant effect on the
consolidated financial statements.
Capitalisation of internally developed software
Distinguishing the research and development phases of a new software product
and determining whether the requirements for the capitalisation of development
costs are met requires judgement. Management will assess whether a project
meets the recognition criteria as set out in IAS 38 based on an individual
project basis. More detail is included in note 4.3 as to the specific
considerations given to each project when determining whether to capitalise
internally developed software. Where the criteria are not met, the research
and development expenditure will be expensed in the Consolidated Statement of
Comprehensive Income. Where the recognition criteria are met, the items will
be capitalised as an intangible asset.
During the year ended 30 September 2024, research and development expenses
totalled £1,659,000 (2023: £2,152,000). Of this amount, £322,000 (2023:
£1,211,000) was capitalised as an intangible asset relating to employee
costs. The balance of expenditure being £1,337,000 (2023: £925,000) is
recognised in the Consolidated Statement of Comprehensive Income as an
expense.
Recovery of deferred tax assets
Deferred tax assets have not been recognised for deductible temporary
differences and tax losses. The Directors consider that there is not
sufficient certainty that future taxable profits will be available to utilise
those temporary differences and tax losses. Further information on the Group's
deferred tax asset can be found in note 20 of the consolidated financial
statements.
Estimation uncertainty
Information about estimates and assumptions that have the most significant
effect on recognition and measurement of assets, liabilities, income and
expenses is provided below. Changes to these estimations may result in
substantially different results for the year.
Share-based payments
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which
they are granted. The fair value of the options granted is measured using an
option valuation model, taking into account the terms and conditions upon
which the options were granted. Details of the estimations used in determining
the fair value of the options in issue are detailed in note 22. In line with
IAS 2, management assess whether non-market conditions will be achieved and
adjusts appropriately.
Useful lives of depreciable assets
The useful lives of depreciable assets are determined by management at the
date of purchase based on the expected useful lives of the assets. These are
subsequently monitored and reviewed annually and where there is objective
evidence of changes in the useful economic lives, these estimates are
adjusted. Any changes to these estimates may result in significantly different
results for the period.
The Group amortises its newly developed proprietary clinical trial platform
(TTNx) in accordance with its anticipated usage pattern. The platform's useful
life has been estimated at 15 years. Amortisation is applied on an escalating
basis, aligned with the increasing utilisation of the platform as additional
clinical trials are deployed on the platform. Once the platform reaches an
equivalent operational capacity to the existing platform, defined as
accommodating the number of trials supported by the previous platform, a
straight-line amortisation method will be adopted for the remainder of its
useful life.
6. Revenue
An analysis of the Group's revenue by type is as follows:
2024 2023
£000 £000
Service revenue 5,766 6,665
All material revenue streams derived by the Group relate to the delivery of
services in support of clinical trials. As such, all revenue is deemed to
belong to one stream, being service revenue.
Revenue derived from services provided over time do not constitute a material
portion of revenue and therefore disclosure distinguishing between revenue
recognised at a point in time versus over time is not made.
For the year ended 30 September 2024, revenue includes £22,000 (2023:
£214,000) held in contract liabilities within trade and other payables at the
beginning of the period. This amount also includes performance obligations
relating to advance payments that were not yet complete at the end of the
prior year. Advance payments are charged to clients to de-risk start-up
activities and are recognised at a point in time once an activities
performance obligation is met. At 30 September 2024, £532,000 (2023:
£343,000) of advanced payments were recognised on the balance sheet.
7. Segmental information
The Board considers there to be only one core operating segment for the
Group's activities. This is based on the Group's development, commercial and
operational delivery teams operating across the entirety of the Group, which
is primarily based in the United Kingdom. The projects undertaken by the Group
are managed by project managers, who receive inputs for each project from
other team members. Performance information is reported as a single business
unit to the management team.
The information gathered for each project is subsequently reported to the
Group's Chief Executive Officer, who is considered to be the chief operating
decision-maker. This information is used for resource allocation and
assessment of performance. Therefore, the entirety of the Group's revenue and
assets can be attributed wholly to this operating segment with reference to
the Consolidated Statement of Comprehensive Income and Consolidated Statement
of Financial Position.
During the year ended 30 September 2024, the Group had three clients (2023:
five clients) that exceeded 10% of total revenue. In 2024, the individual
percentage revenue associated with these clients was 13% (£771,000), 13%
(£742,000) and 13% (£729,000). In 2023, the individual percentage revenue
associated with the five largest clients 14% (£966,000), 14% (£949,000), 13%
(£862,000), 12% (£792,000) and 10% (£699,000).
Geographical information
The Group's revenue can be categorised by country, based on the location of
the contracting client. Sometimes clients of the Group, which include global
biopharmaceutical companies with offices in multiple locations across the
world, request the Group to contract directly with their regional offices in
the United Kingdom or European locations. In such circumstances the associated
revenues are reported as being based in the contracting location even though
much of the operational execution of the contract will include entities or
partners of the client based elsewhere in the world.
2024 2023
£000 £000
United States of America 2,365 3,053
United Kingdom 1,330 952
Netherlands 742 862
Ireland 557 689
Switzerland 500 816
Other - Europe 272 293
Revenue 5,766 6,665
As the Group is domiciled in the United Kingdom, the entirety of the revenue
originates from this location.
8. Other income
Items of other income principally relate to government grants received. Grants
are recognised as income over the period required to match them with the
related costs, for which they are intended to compensate, on a systematic
basis.
The Group also recognises Research and Development Expenditure Credit ('RDEC')
as other income.
2024 2023
£000 £000
Grant income 376 38
RDEC 405 355
Other income 781 393
9. Auditor's remuneration
2024 2023
£000 £000
Audit services
- Group and Parent Company 51 56
- subsidiary companies 34 37
Total audit fees 85 93
Audit-related assurance services 8 8
Total auditor's remuneration 93 101
10. Employees and Directors
The average monthly number of persons (including Executive and Non-Executive
Directors) employed by the Group was:
2024 2023
Number Number
Administration 15 14
Operations, research and development 66 75
Average total persons employed 81 89
The aggregate remuneration of employees in the Group was:
2024 2023
£000 £000
Wages and salaries 5,474 5,944
Social security costs 671 702
Other pension costs 279 303
Share-based payments charge 8 52
Total remuneration for employees 6,432 7,001
Employee costs capitalised (322) (1,211)
Net employee costs 6,110 5,790
The Group operates a defined contribution pension scheme for employees. The
assets of the scheme are held separately from those of the Group in
independently administered funds. The amounts outstanding at 30 September 2024
in respect of pension costs were £40,000 (2023: £46,000).
The remuneration of the Group's Directors is set out in the Directors'
Remuneration Report in the full annual report, as well as in note 24 under
related party transactions.
The Company did not directly employ any staff and therefore there is no cost
recognised in respect of staff costs.
11. Loss on ordinary activities before taxation
The Group's loss on ordinary activities before taxation has been achieved
after charging:
2024 2023
£000 £000
Research and development expenses 1,304 903
Research and development related impairment - 14
Research and development related amortisation 33 8
Sales and marketing expenses 1,347 1,262
Amortisation of commission assets 49 59
Expenses relating to lease of low-value assets 1 1
Depreciation of tangible assets 239 400
Amortisation of intangible assets 15 24
Foreign exchange (gain) / loss 52 85
Administrative expenses 2,606 2,344
Total operating expenses 5,646 5,100
Interest income from cash held at bank (85) (105)
Interest incurred on finance leases 22 29
Interest due on overdue taxation 3 -
5,586 5,024
There is a further amortisation charge of £188,000 (2023: £193,000)
recognised in cost of sales for those items directly related to project
activities. The total amortisation charge for the year is £236,000 (2023:
£225,000).
12. Taxation
The tax charge for each period can be reconciled to the result per the
Consolidated Statement of Comprehensive Income as follows:
2024 2023
£000 £000
Loss on ordinary activities before taxation (2,094) (1,361)
Loss before tax at the effective rate of corporation tax
in the United Kingdom of 25% (2023: 22%) (524) (299)
Effects of:
Expenses not deductible for tax purposes (13) (17)
Origination and reversal of temporary differences (51) (291)
Research and development uplifts net of losses surrendered for tax credits 520 406
Overseas taxation 1 16
Prior period adjustment (26) 2
Tax credit for the period (93) (183)
The tax credit for each period can be reconciled as follows:
2024 2023
£000 £000
Small or medium enterprise research and development credit (172) (276)
Deduction for corporation tax on RDEC 104 75
Overseas taxation 1 16
Prior period adjustment (26) 2
Tax credit for the period (93) (183)
The Group has elected to take advantage of the RDEC, introduced in the Finance
Act 2013 whereby a company may surrender corporation tax losses on research
and development expenditure incurred on or after 1 April 2013 for a
corporation tax refund.
The following is a reconciliation between the tax charge and the tax
receivable within the Consolidated Statement of Financial Position:
2024 2023
£000 £000
Current tax receivable at start of period 549 453
Current period credit 497 552
Corporation tax repayment (554) (456)
Current tax receivable at end of period 492 549
The tax credit for each period can be reconciled to the current period credit
recognised in tax receivable within the Consolidated Statement of Financial
Position in each period as follows:
2024 2023
£000 £000
Tax credit for the year 93 183
RDEC gross of corporation tax deduction 405 355
Overseas taxation (1) 15
Tax recoverable - (1)
Current period credit 497 552
13. Earnings per share
The calculation of basic and diluted earnings per share ('EPS') of the Group
is based on the following data:
2024 2023
Earnings
Earnings for the purposes of basic and diluted EPS, being net profit
attributable to the owners of the Company (£000)
(2,001) (1,178)
Number of shares
Weighted average number of shares for the purposes of basic EPS 48,309,181 48,309,181
Weighted average number of shares for the purposes of diluted EPS 48,309,181 48,309,181
Basic earnings per share is calculated by dividing earnings attributable to
the owners of the Company by the weighted average number of shares in issue
during the year. The diluted EPS is calculated by dividing earnings
attributable to the owners of the Company by the weighted average number of
shares in issue taking into account the share options outstanding during the
year. For the year ended to 30 September 2024, there was no dilutive effect as
the share options in issue would have decreased the loss per share.
The basic and diluted earnings per share for the Group and Company is:
2024 2023
Basic earnings per share (4.14p) (2.44p)
Diluted earnings per share (4.14p) (2.44p)
14. Property, plant and equipment
Group
Office Leasehold Fixtures and
building improvement fittings Equipment Total
Cost £000 £000 £000 £000 £000
At 1 October 2022 777 185 5 1,117 2,084
Additions - 7 - 94 101
Disposals - - - (20) (20)
At 30 September 2023 777 192 5 1,191 2,165
Additions - 3 1 30 34
Disposals - - - (10) (10)
At 30 September 2024 777 195 6 1,211 2,189
Accumulated depreciation
At 1 October 2022 379 157 5 726 1,267
Charge for the period 102 19 - 279 400
Disposals - - - (20) (20)
At 30 September 2023 481 176 5 985 1,647
Charge for the period 101 14 0 124 239
Disposals - - - (10) (10)
At 30 September 2024 582 190 5 1,099 1,876
Net book value
At 30 September 2023 296 16 - 206 518
At 30 September 2024 195 5 1 112 313
The tangible right-of-use asset is held within the office building category.
At 30 September 2024, the carrying amount of the right-of-use asset was
£195,000 (2023: £296,000).
Company
At 30 September 2024 and 30 September 2023, the Company had no property, plant
and equipment.
15. Intangible assets
Group
Other Internally developed technology Next generation TrialTracker platform
Right-of-use asset Other acquired intangibles
Total
£000 £000 £000 £000 £000
Cost
At 1 October 2022 - 221 710 4,111 5,042
Additions - 121 89 1,589 1,799
Impairment - - (14) - (14)
At 30 September 2023 - 342 785 5,700 6,827
Additions 39 - 20 404 463
Disposals - (32) (218) - (250)
At 30 September 2024 39 310 587 6,104 7,040
Accumulated amortisation
At 1 October 2022 - 141 314 - 455
Amortisation - 47 178 - 225
At 30 September 2023 - 188 492 - 680
Amortisation 2 52 163 19 236
Disposals - (32) (218) - (250)
At 30 September 2024 2 208 437 19 666
Net book value
At 30 September 2023 - 154 293 5,700 6,147
At 30 September 2024 37 102 150 6,085 6,374
Amortisation is charged to the Consolidated Statement of Comprehensive Income
and is included within cost of sales for those items directly related to
project activities, research and development for those items directly related
to the research activities of the company or otherwise within general and
administrative expenses.
Internally developed technology
The Group has capitalised research and development costs during the year in
relation to the development of its proprietary TrialTracker software.
Development includes TrialTracker platform upgrades as well as additional
algorithm development. The costs capitalised include time and expenses in
relation to staff costs. In recognising these assets, the Group has applied
the recognition criteria of IAS 38 relating to internally generated intangible
assets, where costs in relation to the development phase must be capitalised
under certain circumstances. More information in relation to this is included
in the accounting policies of the Group in notes 4 and 5.
Assets under construction
Assets that are still under construction undergo an annual impairment test
which is carried out at the end of the reporting period. This impairment test
considers the carrying amount of the asset and compares it with its
recoverable amount, with an impairment being recognised if the recoverable
amount is lower than the carrying amount. Management have determined the
recoverable amount as being the value-in-use, which is calculated using
management expectations of future revenues, discounted at an applicable rate.
Whilst the asset remains under construction, amortisation is not charged.
Company
At 30 September 2024 and 30 September 2023, the Company had no intangible
assets.
16. Investments
The consolidated financial statements of the Group as at 30 September 2024 and
at 30 September 2023 include:
Name of subsidiary Class of share Country of incorporation Principal activities
Directly held:
IXICO Technologies Limited Ordinary United Kingdom Data collection and analysis of neurological diseases
Indirectly held:
IXICO Technologies Inc. Ordinary United States Sales and marketing
The Company and Group has no investments other than the holdings in the above
subsidiaries that are all 100% owned. The carrying amounts of the investments
in subsidiaries for the Company are:
2024 2023
£000 £000
Investments in subsidiary undertakings
At beginning of the period 5,857 5,805
Capital contribution 8 52
Total investments at end of the period 5,865 5,857
The capital contribution represents the charge in the year for share-based
awards issued by the Company to employees of IXICO Technologies Limited and
IXICO Technologies Inc.
17. Trade and other receivables
Group Company
2024 2023 2024 2023
Restated
Current receivables £000 £000 £000 £000
Trade receivables 1,634 945 - -
Less provision for bad and doubtful debts - - - -
Net carrying amount of trade receivables 1,634 945 - -
Other taxation and social security - 40 15 6
Prepayments and accrued income 518 684 22 20
Commission assets 24 27 - -
Other receivables 37 10 2 5
Current receivables 2,213 1,706 39 31
Non-current receivables
Commission assets 9 39 - -
Amounts due from subsidiary undertakings - - 2,224 2,450
Total trade and other receivables 2,222 1,745 2,263 2,481
All amounts are classified as short-term and are expected to be received
within one year. The average credit period granted to clients ranges from 30
to 90 days (2023: 30 to 90 days).
A provision for expected credit losses is made when there is uncertainty over
the ability to collect the amounts outstanding from clients. This is
determined based on specific circumstances relating to each individual client.
The Directors consider that there are immaterial credit losses (2023:
immaterial credit losses) due to the calibre of customers the Group has and so
the carrying amount of trade and other receivables approximates their fair
value.
Within the Company, there are expected to be immaterial credit losses (2023:
immaterial credit losses) from subsidiary companies due to the level of cash
available in the subsidiaries and expected future earnings. The amounts due
from subsidiary undertakings was reclassified to a non-current
asset in the year as the Group does not expect to recover these balances
within the next 12 months.
As at the year-end, the ageing of trade receivables which are past due but not
impaired is as follows:
Group Company
2024 2023 2024 2023
£000 £000 £000 £000
Amounts not past due 1,486 864 - -
Past due:
Less than 30 days 69 81 - -
Between 31 - 60 days 8 - - -
Between 61 - 90 days 18 - - -
More than 90 days 52 - - -
Total trade receivables 1,634 945 - -
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of financial assets disclosed in note 23.
18. Trade and other payables
Group Company
2024 2023 2024 2023
£000 £000 £000 £000
Current liabilities
Trade payables 83 86 2 -
Other taxation and social security 180 58 - -
Contract liabilities 591 529 - -
Accrued expenses 553 464 43 60
Other payables 3 5 - -
1,410 1,142 45 60
Non-current liabilities
Accrued expenses - 2 - -
Total trade and other payables 1,410 1,144 45 60
Trade payables and accrued expenses principally comprise amounts outstanding
for trade purchases and ongoing costs. No interest is charged on the trade
payables. The Group's policy is to ensure that payables are paid within the
pre-agreed credit terms and to avoid incurring penalties and/or interest on
late payments.
The fair value of trade and other payables approximates their current book
values.
Reconciliation of liabilities arising from financing activities
The only liabilities affecting financing activities arise solely from the
recognition of the lease liability:
£000
Lease liability as at 1 October 2022 516
Cash-flow: Repayment of lease (158)
Non-cash: Interest charge 29
Lease liability as at 30 September 2023 387
Leases acquired in the year 39
Cash-flow: Repayment of lease (134)
Non-cash: Interest charge 22
Lease liability as at 30 September 2024 314
19. Leases
All lease liabilities are presented in the statement of financial position as
follows:
2024 2023
£000 £000
Current 164 112
Non-current 150 275
314 387
The Group uses leases throughout the business for office space and IT
equipment. With the exception of short-term leases and leases of low value,
each lease is reflected on the balance sheet as a right-of-use asset in
property, plant and equipment and a lease liability.
Each lease generally imposes a restriction that, unless there is a contractual
right for the Group to sublet the asset to another party, the right-of-use
asset can only be used by the Group. For leases over office buildings, the
Group must keep those properties in a good state of repair.
The Group has identified one lease relating to the office building, and one
lease relating to a software licence that meet the definition of a
right-of-use asset. There is no option to purchase on either lease and
payments are not linked to an index. The remaining lease terms range between
24 - 34 months (2023: 36 months). The office building lease has the ability to
be extended at the end of this term.
The Group has elected to not recognise a lease liability for short-term
leases, being 12 months or less, or for leases of low value. Payments for
these are expensed on a straight-line basis.
Right-of-use asset and lease liability
Asset Depreciation Carrying amount
2024 £000 £000 £000
Office building 777 (582) 195
Software licence 39 (2) 37
816 (584) 232
Asset Depreciation Carrying amount
2023 £000 £000 £000
Office building 777 (481) 296
Additional information on the right-of-use asset is as follows:
The various elements recognised in the financial statements are as follows:
2024 2023
£000 £000
Statement of Comprehensive Income
Depreciation charge in the year 101 102
Amortisation charge in the year 2 -
Interest expense on lease liability 22 29
Low value leases expensed in the year 1 1
Statement of Cash Flows
Capital repayments on lease agreements 134 158
The undiscounted maturity analysis of lease liabilities for the office
building is as follows:
Within 1 year 1 - 2 years 2 - 3 years Total
30 September 2024
Lease payments 181 144 12 337
Finance charges (17) (6) - (23)
Net present values 164 138 12 314
30 September 2023
Lease payments 132 166 127 425
Finance charges (20) (14) (4) (38)
Net present values 112 152 123 387
At 30 September 2024, the Group's commitment to short-term and low-value
leases was £nil (2023: £nil).
20. Deferred tax
Deferred tax asset (unrecognised)
Group Company
2024 2023 2024 2023
£000 £000 £000 £000
Tax effect of temporary differences:
Tax allowances in excess of depreciation 1,615 1,581 (1) (1)
Accumulated losses (17,963) (17,618) (3,579) (3,331)
Losses on financial instruments debited to equity 1 5 - -
Accelerated commission charge 1 14 - -
Deductible temporary differences (2) (13) - -
Deferred tax asset (unrecognised) (16,348) (16,031) (3,580) (3,332)
The unrecognised deferred tax asset predominantly arises due to unused tax
losses carried forward that have originated but not reversed at the
Consolidated Statement of Financial Position date and from transactions or
events that result in an obligation to pay more tax in the future or a right
to pay less tax in the future.
The unrecognised deferred tax asset is measured on an undiscounted basis at
the tax rates that are expected to apply in the periods in which temporary
differences will reverse. Based on tax rates and laws enacted or substantively
enacted at the latest balance sheet date, the rate when the above temporary
differences are expected to reverse is currently 25% (2023: 25%).
21. Issued capital and reserves
Ordinary shares and share premium
The Company has one class of ordinary shares. The share capital issued has a
nominal value of £0.01 and each share carries the right to one vote at
shareholders' meetings and all shares are eligible to receive dividends. Share
premium is recognised when the amount paid for a share is in excess of the
nominal value.
The Group and Company's opening and closing share capital and share premium
reserves are:
Group and Company
Ordinary Share Share
shares capital premium
Number £000 £000
Authorised, issued and fully paid
At 30 September 2023 and at 30 September 2024 48,351,373 484 84,802
Exercise of share options
During the year, no share options were exercised.
Other reserves
Accumulated losses
This reserve relates to the cumulative results made by the Group and Company
in the current and prior periods.
Merger relief reserve
In accordance with Section 612 'Merger Relief' of the Companies Act 2006, the
Company issuing shares as consideration for a business combination, accounted
at fair value, is obliged, once the necessary conditions are satisfied, to
record the share premium to the merger relief reserve.
Reverse acquisition reserve
Reverse accounting under IFRS 3 'Business Combinations' requires that the
difference between the equity of the legal parent and the issued equity
instruments of the legal subsidiary, pre-combination, is recognised as a
separate component of equity.
Capital redemption reserve
This reserve holds shares that were repurchased and cancelled by the Company.
Foreign exchange translation reserve
This reserve represents the impact of retranslation of overseas subsidiaries
on consolidation.
Cash flow hedge reserve
This reserve represents the movement in designated hedging instruments in the
year that have not yet crystallised.
22. Share-based payments
Certain Directors and employees of the Group hold options to subscribe for
shares in the Company under share option schemes. All share options relate to
a single scheme outlined in the EMI Share Option Plan 2014.
The scheme is open, by invitation, to both Executive Directors and employees.
Participants are granted share options in the Company which contain vesting
conditions. These are subject to the achievement of individual employee and
Group performance criteria as determined by the Board. The vesting period
varies by award and the conditions approved by the Board. Options are usually
forfeited if the employee leaves the Group before the options vest.
Total share options outstanding have a range of exercise prices from £0.01 to
£0.70 per option and the weighted average contractual life is 5.5 years
(2023: 6.7 years). The total charge for each period relating to employee
share-based payment plans for continuing operations is disclosed in note 10 of
the consolidated financial statements.
Details of the share options under the scheme outstanding during the period
are as follows:
2024 2023
Number Weighted average exercise price Number Weighted average exercise price
Outstanding at start of the period 3,529,681 £0.15 4,490,931 £0.18
Exercised - - (200,000) £0.01
Lapsed (495,176) £0.34 (761,250) £0.29
Outstanding at end of the period 3,034,505 £0.12 3,529,681 £0.15
Exercisable at end of the period 2,459,504 £0.10 1,949,680 £0.08
23. Financial risk management
In common with all other areas of the business, the Group is exposed to risks
that arise from the use of financial instruments. This note describes the
Group's objectives, policies and processes for managing those risks and the
methods used to measure them.
The main risks arising from the Group's financial instruments are liquidity,
interest rate, foreign currency and credit risk. The Group's financial
instruments comprise cash and various items such as trade receivables and
trade payables, which arise directly from its operations.
Categories of financial instruments
2024 2023
£000 £000
Financial assets held at amortised cost
Trade and other receivables excluding prepayments 1,845 1,795
Cash and cash equivalents 1,787 4,031
3,632 5,826
Financial liabilities held at amortised cost
Trade and other payables excluding statutory liabilities 745 1,144
Lease liabilities 314 387
1,059 1,531
Financial liabilities held at fair value
Forward contracts held at fair value (Level 2) - 27
- 27
Fair value of financial assets and liabilities
There is no material difference between the fair values and the carrying
values of the financial instruments held at amortised cost because of the
short maturity period of these financial instruments or their intrinsic size
and risk.
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its
obligations as they fall due through having insufficient resources. The Group
monitors its levels of working capital to ensure that it can meet its
liabilities as they fall due. Ultimate responsibility for liquidity risk
management rests with the Board, which has built an appropriate framework for
the management of the Group's short-, medium- and long-term funding and
liquidity requirements.
The principal current asset of the business is cash and cash equivalents and
is therefore the principal financial instrument employed by the Group to meet
its liquidity requirements. The Board ensures that the business maintains
surplus cash reserves to minimise any liquidity risk.
The financial liabilities of the Group and Company are due within 3 months
(2023: 3 months) of the Consolidated Statement of Financial Position date,
with the exception of the lease liability. Further analysis of the lease
liability is provided in note 19. All other non-current liabilities are due
between 1 to 3 years after the period end. The Group does not have any
borrowings or payables on demand which would increase the risk of the Group
not holding sufficient reserves for repayment.
Market risk
Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rate. The Group operates an interest rate policy designed to minimise interest
costs and reduce volatility in reported earnings.
The Group holds all cash and cash equivalents with institutions with a
recognised high credit rating. Interest rates on current accounts are
floating. Changes in interest rates may increase or decrease the Group's
finance income.
The Group does not have any committed interest-bearing borrowing facilities
and consequently there is no material exposure to interest rate risk in
respect of financial liabilities.
Foreign currency risk management
Foreign currency risk is the risk that the fair value of future cash flows of
a foreign currency exposure will fluctuate because of changes in foreign
exchange rates.
The Group's exposure to the risk of changes in foreign exchange rates relates
to the Group's overseas operating activities, primarily denominated in US
Dollars, Euros and Swiss Francs. There is also an investment by the Company in
a foreign subsidiary. The Group's exposure to foreign currency changes for all
other currencies is not material. The Group seeks to minimise the exposure to
foreign currency risk by matching local currency income with local currency
costs where possible. The Group utilises US Dollar forward contracts to
mitigate the risk of US Dollar fluctuations on client contracts. It agrees
forward contracts based on forecasts of its US Dollar inflows and applies
hedge accounting to minimise currency risk.
The Group enters into forward contracts to sell US Dollars at regular
intervals and applies hedge accounting to these contracts. Under hedge
accounting, unrealised gains or losses are recognised in other comprehensive
income and the cash flow hedge reserve, with the ineffective portion being
recognised in the profit and loss as soon as they occur. The gains or losses
arising on these are allocated to revenue on settlement. The item hedged was a
portion of highly probable forecast US Dollar inflows. The hedged item is the
receipt of US Dollars, and the hedging instrument is the sale of a portion of
these. The Group has determined that a 1:1 ratio exists between the instrument
and items as the underlying risks of both are the same - the exchange rate of
USD:GBP. The Group uses the dollar offset method to monitor effectiveness,
which compares the change in fair value of the underlying derivative and the
change in fair value of future cash flows. Ineffectiveness can arise due to
the counterparties credit risk and inaccurate forecasting, which could leave
the Group over hedged. In the year some ineffectiveness arose where the
Group's actual inflows were below that of the hedging instrument. This
ineffective portion was recognised in general and administrative expenses.
At year end the Group had no contracts to sell (2023: $750,000), these hedges
are designated as effective under IFRS 9 and hence the fair value of these is
recognised in other comprehensive income. These balances are removed from the
Group's US Dollar exposure as there is deemed to be no foreign exchange
exposure. At 30 September 2024 there were no hedges (2023: $750,000 hedged to
period of March 2024, at an average rate of 1.2785). The contracts are valued
based on observable market exchange rates.
The hedging transactions in the year had the following effect on the Group's
results:
Without hedge accounting Hedging movements 2024
£000 £000 £000
Statement of Comprehensive Income
Revenue 5,761 5 5,766
Gross profit 2,706 5 2,711
General and administrative expenses (2,881) (32) (2,913)
Profit for the year (1,974) (27) (2,001)
Total other comprehensive expense (2) 27 25
Total comprehensive income attributable to equity holders for the period (1,976) - (1,976)
Statement of financial position
Accumulated losses (9,353) - (9,353)
Without hedge accounting Hedging movements 2023
£000 £000 £000
Statement of Comprehensive Income
Revenue 6,638 27 6,665
Gross profit 3,243 27 3,270
General and administrative expenses (2,743) (111) (2,854)
Profit for the year (1,094) (84) (1,178)
Total other comprehensive expense (21) 84 63
Total comprehensive income attributable to equity holders for the period (1,115) - (1,115)
Statement of financial position
Derivative financial liabilities 27 - 27
Cash flow hedge reserve - (27) (27)
Accumulated losses (7,387) 27 (7,360)
The carrying amounts of the Group's foreign currency denominated monetary
assets and monetary liabilities as at 30 September are as follows:
2024 2023
US Dollar exposure USD'000 USD'000
Balance at end of period
Monetary assets 587 14
Monetary liabilities (16) (27)
Total exposure 571 (13)
2024 2023
Euro exposure EUR'000 EUR'000
Balance at end of period
Monetary assets 37 156
Monetary liabilities (73) (13)
Total exposure (37) 143
2024 2023
Swiss Franc exposure CHF'000 CHF'000
Balance at end of period
Monetary assets 58 33
Monetary liabilities (22) -
Total exposure 35 33
The Company had no foreign currency exposure at the year end (2023: nil).
Foreign currency sensitivity analysis
As at 30 September 2024, the sensitivity analysis assumes a +/-10% change of
the USD/GBP, EUR/GBP and CHF/GBP exchange rates, which represents management's
assessment of a reasonably possible change in foreign exchange rates (2023:
10%). The sensitivity analysis was applied on the fair value of financial
assets and liabilities.
2024 2023
10% weaker¹ 10% stronger 10% weaker 10% stronger
£000 £000 £000 £000
US Dollar (43) 43 1 (1)
Euro 3 (3) (12) 12
Swiss Franc (3) 3 (3) 3
(43) 43 (14) 14
(1) 10% weaker relates to the Great British Pound strengthening against the
currency and therefore the Group would be in a weaker monetary position.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group's
financial assets are cash and cash equivalents and trade and other
receivables. The carrying value of these assets represents the Group's maximum
exposure to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade receivables.
The amounts presented in the Consolidated Statement of Financial Position are
net of allowances for any expected credit losses, estimated by the Group's
management based on prior experience and their assessment of the current
economic environment, and any specific criteria identified in respect of
individual trade receivables. An allowance for expected credit losses is made
where there is an identified loss event, which, based on previous experience,
is evidence of a reduction in the recoverability of future cash flows. There
are no outstanding expected credit losses identified at 30 September 2024
(2023: nil).
Prior to entering into an agreement to provide services, the Group makes
appropriate enquiries of the counterparty and independent third parties to
determine creditworthiness. The Group has not identified any significant
credit risk exposure to any single counterparty or Group of counterparties as
at the period end.
The Group and Company continually reviews client credit limits based on market
conditions and historical experience. Any provision for impairment, as well as
the ageing analysis of overdue trade receivables, is set out in note 17.
The Group and Company's policy is to minimise the risks associated with cash
and cash equivalents by placing these deposits with institutions with a
recognised high credit rating.
Capital risk management
The Group considers capital to be shareholders' equity as shown in the
Consolidated Statement of Financial Position, as the Group is primarily funded
by equity finance and is not yet in a position to pay a dividend. The Group
had no borrowings at 30 September 2024 (2023: £nil).
The objectives when managing capital are to safeguard the Group's ability to
continue as a going concern in order to provide returns for shareholders and
for other stakeholders. In order to maintain or adjust the capital structure
the Group may return capital to shareholders or issue new shares.
24. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note.
Remuneration and transactions of Directors and key management personnel
Key management remuneration:
2024 2023
£000 £000
Short-term employee benefits 1,147 1,113
Post-employment benefits 28 29
Other long-term benefits (24) (44)
Share-based payments (7) 19
Total remuneration 1,144 1,117
Key management includes Executive Directors, Non-Executive Directors and
senior management who have the responsibility for managing, directly or
indirectly, the activities of the Group.
The aggregate Directors' remuneration, including employers' National Insurance
and share-based payments' expense, was £875,000 (2023: £687,000) and
aggregate pension of £21,000 (2023: £16,000). Further detail of Directors'
remuneration is disclosed in the Directors' Remuneration Report in the full
annual report.
Transactions with group companies
The Company is responsible for financing and setting Group strategy. The
Company's subsidiaries carry out the Group's research and development
strategy, employ all employees, including the Executive Directors, and manage
the Group's intellectual property. As a result, a management charge is made
between the subsidiaries and the Company for the services provided by the
subsidiaries on behalf of the Company. Similarly, as share options are issued
in the Company for employees of the subsidiaries, a charge is made between the
Company and its subsidiaries.
Intercompany balances are unsecured and are interest bearing at 6%, with no
fixed date of repayment but are repayable on demand. The intercompany balance
also includes specific funding provided by the Company, which attracts a 0%
interest rate.
Outstanding balances related to subsidiary undertakings are disclosed in note
18. During the year, the following transactions occurred with related parties:
2024 2023
£000 £000
Charges from subsidiaries:
Management recharge from subsidiaries 625 530
Net interest charged (125) (100)
Charges to subsidiaries:
Share option charge 8 52
25. Post balance sheet events
In October 2024, the Company completed a share capital raise. The company
issued 42,621,508 new Ordinary shares for a total contribution of £4,050,000.
Included in this, certain Directors of the Company have subscribed for an
aggregate of 789,472 Ordinary shares for a total contribution of £75,000.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAEADELLLFAARecent news on IXICO
See all newsREG - IXICO plc - Trading Update
AnnouncementREG - IXICO plc - Contract Win
AnnouncementREG - IXICO plc - Further Validation of IXICO’s AI Imaging Platform
AnnouncementREG - IXICO plc - Issue of share options and PDMR dealing
AnnouncementREG - IXICO plc - Result of AGM
Announcement