REG - IXICO plc - Half year report
23/05/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230523:nRSW2580Aa&default-theme=true
RNS Number : 2580A IXICO plc 23 May 2023
23 May 2023
IXICO plc
("IXICO", the "Company" or the "Group")
Half yearly report to 31 March 2023
IXICO plc (AIM: IXI), the medical imaging advanced analytics company
delivering intelligent insights in neuroscience, announces its unaudited
interim results for the six months ended 31 March 2023.
Commercial and operational highlights
· Client contracts worth £2.8m signed during the period;
· Order book of £13.3 million at 31 March 2023 (H1 2022: £12.6m)
following the signing of contracts totalling £11.6m across the last twelve
months;
· Expansion of core imaging (MRI, PET and SPECT) services to
provide an extended offering to address clinical trial opportunities in
Alzheimer's Disease (AD), Multiple Sclerosis (MS) and Parkinson's Disease
(PD); and
· £1.0m additional funding secured for the IXICO-led HD-IH
Consortium which is now committed to the analysis of over 6,000 Huntington's
disease MRI data sets utilising IXICO's proprietary IXIQ.Ai analysis platform.
Financial highlights
· Revenues of £3.2 million for the six months to 31 March 2023 (H1
2022: £3.9m);
· Gross margin at 46.1% (H1 2022: 59.8%);
· Loss before interest, taxation, depreciation and amortisation
('EBITDA') of £0.6m (H1 2022: £0.5m profit);
· £5.0 million cash as at 31 March 2023 (H1 2022: £5.8m);
· £0.2m operational cash inflow (H1 2022: £0.2m);
· Net assets of £11.9m (H1 2022: £11.8m); and
· Loss per share of 1.50p (H1 2022: 0.35p profit).
Giulio Cerroni, CEO of IXICO, commented:
"We complete the first six months of the year on track to achieve our full
year guidance of £7.0m revenues for the year. We expect the combination of
our diversified order book and near-term opportunities to deliver revenue
growth in the second half of this financial year, relative to the first half,
and return the Company to year-on-year revenue growth in 2024.
Following a multi-year programme of ongoing investment in our IT
infrastructure, we are excited by the anticipated launch of our next
generation TrialTracker image data collection and management system in the
coming year.
This highly scalable platform will ensure that IXICO continues to be able to
satisfy our clients' increasingly stringent data security requirements as we
look to further penetrate a highly regulated clinical trials market. The new
platform ensures that our business can easily scale as we anticipate levels of
investment in neurological development to accelerate further as tangible drug
development progress in disease areas such as Alzheimer's disease is delivered
by the biopharmaceutical industry.
As we look forward, the development of our order book remains a priority which
we are addressing through further investment in our commercial capabilities.
Successfully executing on our five-pillar strategy will enable IXICO to secure
more contracts from a more extensive customer base and capture a more
substantial share of the growing market opportunity from the investments made
in addressing a broader range of neurological diseases."
A recording of the results presentation will be made available on the Group's
website here: https://ixico.com/investors/company-information/investor-videos/
(https://ixico.com/investors/company-information/investor-videos/)
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.
For further information please contact:
IXICO plc +44 (0)20 3763 7499
Giulio Cerroni, Chief Executive Officer
Grant Nash, Chief Financial Officer
Cenkos Securities PLC (Nominated adviser and sole broker) +44 (0)20 7397 8900
Giles Balleny / Max Gould (Corporate Finance)
Michael F Johnson / Tamar Cranford-Smith (Sales)
About IXICO
IXICO is dedicated to delivering insights in neuroscience 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 goal is to be a leading advocate of artificial
intelligence in medical image analysis.
IXICO has developed and deployed breakthrough data analytics, at scale,
through its remote access technology platform, to improve the return on
investment in drug development and reduce risk and uncertainty in clinical
trials for the Company's pharmaceutical clients.
More information is available on www.IXICO.com (http://www.IXICO.com)
CHIEF EXECUTIVE OFFICER'S STATEMENT
Statement from Giulio Cerroni
Across the past six months, we have delivered revenues of £3.2 million (H1
2022: £3.9m) and, as at 31 March 2023, our order book totalled £13.3 million
(H1 2022: £12.6 million). These two figures reflect the full and final
negative revenue impact in 2023 of the large client trial cessations reported
in 2021 and 2022 and also provide improved visibility to future contracted
revenues, as compared to twelve months ago. This supports our expectation
that revenues would bottom out during the first half of 2023 before returning
to revenue growth, relative to H1 2023, across H2 2023 and 2024.
As previously communicated, our revenue mix has shifted significantly across
the last three years from revenues principally related to a single large late
phase clinical trial, to revenues from a greater number of individually
smaller, early phase clinical trials. This highlights the requirement to
build operational capabilities and scale to service all phases of development
in servicing the clinical trials market. Clinical trials commence with
relatively small, more labour-intensive, early phase trials before, if
successful, progressing into much larger trials requiring significant analysis
of imaging data. Whilst this change in mix to early phase trials is
accompanied by a reduction in gross margin over the last few months at 46% (H1
2022: 60%), we are well positioned to accompany more successful trials to
later phases in the coming years, which can be expected to deliver revenues at
higher margins.
Our strengthened order book compared to twelve months ago, continues to
reflect the recent trend of a more diversified client base with our largest
client expected to deliver approximately 20% of our 2023 revenues, as compared
to almost 40% in the prior year. Similarly, whilst we continue to see our
expertise contracted in Huntington's disease ('HD') we are also delivering
over 25% of our revenues from Alzheimer's disease ('AD') studies as we pursue
growth in this important and large neurological clinical trials market.
Despite recent reports by multiple pharma companies of cuts to R&D
budgets, AD continues to represent a multi-billion-dollar market for
successful disease modifying drugs and the recent progress achieved in this
therapeutic indication is anticipated to attract long term investment into AD
research and development. This is exemplified by the accelerated FDA
approval of Eisai's Leqembi drug and reported successes of Eli Lilly's
Donanemab, which has been shown to reduce clinical decline by approximately a
third compared to placebo in early-stage AD patients. Further, the approval
of these drugs, and their application in the clinic, opens further
opportunities for image analysis service providers such as IXICO, particularly
around safety monitoring. The monitoring of known potential side effects of
these drugs such as the risk of ARIA (Amyloid-related imaging abnormalities)
will be an important accompaniment in the healthcare setting to the
prescription of these drugs.
At IXICO, this confidence in the growth opportunity for a specialist provider
of neurological disease biomarker analysis has underpinned our continued
investment program. A significant and critical investment for IXICO is our
next generation image capture and analysis platform, which is approaching
completion. In an increasingly regulated market environment, the platform will
provide regulation and cyber-security risk-driven capabilities that are
required to achieve seamless image data collection in an efficient, robust and
secure CFR 11 compliant manner; irrespective of the global location of the
original data collection. The nature of the technology that forms the basis
of this platform (developed using Microsoft's Azure cloud platform) will
provide IXICO with a highly scalable, extensible platform and it underpins our
growth ambitions to become a leading neuroimaging clinical-trials service
provider to the global pharmaceutical industry.
Alongside this we continue to strengthen our portfolio in both MRI and PET
imaging technologies, including novel PET and SPECT analysis solutions that
will launch later in the year, to provide a full offering across a wide range
of CNS clinical trials, across all stages of development.
These investments follow the success of our IXIQ.Ai MRI imaging analysis
platform, launched in 2022, which led to the formation of the HD-IH
consortium. The consortium now constitutes three biopharmaceutical companies
alongside IXICO and CHDI, securing additional funding to accelerate and
complete the analysis of over 6,000 HD datasets which will enhance research
and drug development in this therapeutic indication.
In reporting an EBITDA loss of £0.6m for the first six months of 2023 (H1
2022: £0.5m profit), careful cost management will continue to be a focus in
2023 as we balance a period of lower revenues and increased inflationary
pressures alongside the commitment to investments designed to enhance growth
across the medium- and long-term. As we rebuild our order book, we expect to
see increased revenues in 2024.
We hold a strong, debt-free, cash position of £5.0m as at 31 March 2023 (H1
2022: £5.8m), and have generated £0.2m operating cash inflows across the six
month period (H1 2022: £0.2m), which provide a resilience to our financial
position, important at a time of wider global and market uncertainty, and
which allows us to continue to pursue the growth opportunities presented by
the attractive CNS clinical trials space.
Financial Review
KPI H1-23 H1-22 Movement FY22
Revenue £3.2m £3.9m (£0.7m) â £8.6m
Gross profit £1.5m £2.3m (£0.8m) â £5.2m
Gross margin 46.1% 59.8% (13.7%) â 60.7%
EBITDA profit /(loss) (£0.6m) £0.5m (£1.1m) â £1.5m
EBITDA margin (18.9%) 12.5% (31.6%) â 17.9%
Operating profit / (loss) (£0.9m) £0.2m (£1.1m) â £0.9m
Profit / (loss) per share (1.50p) 0.35p (1.85p) â 2.14p
Order book(1) £13.3m £12.6m £0.7m á £16.0m
Cash £5.0m £5.8m (£0.8m) â £5.8m
Net Assets £11.9m £11.8m £0.1m á £12.5m
(1)Order book is contracted but not yet recognised revenue adjusted down to
reflect the Company's best estimate of delivery.
Revenue
· The Company reports revenue of £3.2 million (H1 2022: £3.9m)
representing an 18.3% decrease on the prior period.
· This reduction was caused by the final tail effects of large
client trials being cancelled during 2021 and 2022. The contract cycle typical
of the clinical trials market leads to a recovery in the contracted order book
before it is seen in revenue.
· The Company anticipates a stronger second half of the financial
year as the trials relating to contracts won over the last 12 months commence
and progress beyond start-up phases.
Gross profit and margin
· Gross profit of £1.5 million (H1 2022: £2.3m) with a gross
margin of 46.1% (H1 2022: 59.8%).
· The year-on-year change is reflective of reduced revenue, and a
greater proportion of this revenue consisting of services to smaller-scale
early-phase clinical trials. These earlier phase trials tend to be more
labour intensive and therefore lower margin.
· The Company has been impacted by high market-driven inflation,
both in relation to its employee and non-employee cost base. These cost
increases are seen within the Company's margins when it has not been possible
to pass these onto clients.
Operating expenses and capital expenditure
· Operating expenditure of £2.6 million (H1 2022: £2.6m)
· Careful management of operating expenditure has been offset by
the impact of inflation plus increased expenditure within sales and marketing
as the Company continues to rebuild its commercial team.
· Capitalised R&D expenditure in the period totalled £0.8
million (H1 2022: £1.0m), predominantly in the Company's next generation
image capture and analysis platform and also in new image analysis
capabilities.
EBITDA and operating profit / (loss)
· EBITDA loss of £0.6 million (H1 2022: £0.5m profit) and
operating loss of £0.9m (H1 2022: £0.2m profit). Both reflecting the
reduced revenues across the period whilst the Company's cost base has remained
largely flat (with cost management actions largely offset by inflation and
increased sales and marketing expenditure).
Order book
· Order book of £13.3m at 31 March 2023 (H1 2022: £12.6m).
Across the last twelve months the order book has increased by £0.7m
reflecting £11.6m of new contract wins, offset by £7.9m revenues recognised
and £2.9m of contract value reductions reflecting the cancellation or descope
of a small number of clinical trials, the most significant resulting in a
descope of £0.6m from the order book (as announced on 8 December 2022).
· The order book has also seen a relatively minor (£0.1m) negative
foreign exchange impact driven by the strengthening of GBP relative to USD
across the past twelve months.
Cash
· Cash of £5.0 million at 31 March 2023 (H1 2022: £5.8m). This
reflects operating cash inflows of £0.2m (H1 2022: £0.2m) offset by capital
investment of £0.9m (H1 2022: £1.1m).
Net Assets
· Reported net assets at 31 March 2023 of £11.9m (H1 2022:
£11.8m). This reflects the increase of the Company's non-current asset
position to £6.0m (H1 2022: £4.5m) partially offset by a reduction in its
working capital to £6.3m (H1 2022: £7.7m).
Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2023 - unaudited
31-Mar-23 31-Mar-22 30-Sep-22
6 months 6 months 12 months
Unaudited Restated Audited
Unaudited
Notes £000 £000 £000
Revenue 3,203 3,922 8,643
Cost of sales (1,727) (1,576) (3,400)
Gross profit 1,476 2,346 5,243
Other income 175 393 689
Operating expenses
Research and development expenses (464) (631) (1,217)
Sales and marketing expenses (617) (545) (1,226)
General and administrative expenses (1,483) (1,394) (2,581)
Total operating expenses (2,564) (2,570) (5,024)
Operating profit / (loss) (913) 169 908
Finance income 44 - 10
Finance expense (15) (16) (33)
Profit / (loss) on ordinary activities before taxation (884) 153 885
Taxation 159 15 147
Profit / (loss) attributable to equity holders for the period (725) 168 1,032
Other comprehensive expense:
Items that will be reclassified subsequently to profit or loss
Foreign exchange translation differences (21) 12 14
Movement in fair value of cash flow hedges 135 (5) (214)
Cash flow hedges recycled to revenue 16 - 103
Total other comprehensive expense 130 7 (97)
Total comprehensive income / (loss) attributable (595) 175 935
to equity holders for the period
Profit / (loss) per share (pence)
Basic profit / (loss) per share 3 (1.50) 0.35 2.14
Diluted profit / (loss) per share 3 (1.50) 0.33 2.03
Consolidated Statement of Financial Position
As at 31 March 2023 - unaudited
31-Mar-23 31-Mar-22 30-Sep-22
6 months 6 months 12 months
Unaudited Restated Audited
Unaudited
Notes £000 £000 £000
Assets
Non-current assets
Property, plant and equipment 707 890 817
Intangible assets 5,309 3,647 4,587
Total non-current assets 6,016 4,537 5,404
Current assets
Trade and other receivables 1,962 2,671 3,029
Current tax receivables 789 658 453
Derivative financial asset 39 - -
Cash and cash equivalents 5,021 5,801 5,769
Total current assets 7,811 9,130 9,251
Total assets 13,827 13,667 14,655
Liabilities and equity
Non-current liabilities
Trade and other payables 17 51 33
Lease liabilities 321 469 394
Total non-current liabilities 338 520 427
Current liabilities
Trade and other payables 1,373 1,308 1,502
Derivative financial liability - 5 111
Lease liabilities 186 76 122
Total current liabilities 1,559 1,389 1,735
Total liabilities 1,897 1,909 2,162
Equity
Ordinary shares 4 484 482 482
Share premium 4 84,802 84,802 84,802
Merger relief reserve 1,480 1,480 1,480
Reverse acquisition reserve (75,308) (75,308) (75,308)
Cash flow hedge reserve 40 (5) (111)
Foreign exchange translation reserve (95) (76) (74)
Capital redemption reserve 7,456 7,456 7,456
Accumulated losses (6,929) (7,073) (6,234)
Total equity 11,930 11,758 12,493
Total liabilities and equity 13,827 13,667 14,655
Consolidated Statement of Changes in Equity
For the six months ended 31 March 2023 - unaudited
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 30 September 2021 482 84,802 1,480 (75,308) (88) - 7,456 (7,345) 11,479
Total comprehensive income
Profit for the period - - - - - - - 1,032 1,032
Other comprehensive income:
Foreign exchange translation - - - - 14 - - - 14
Movement in fair value of cash flow hedges - - - - - (214) - - (214)
Cash flow hedges recycled to revenue - - - - - 103 - - 103
Total comprehensive income - - - - 14 (111) - 1,032 935
Transactions with owners
Charge in respect of share options - - - - - - - 79 79
Exercise of share options - - - - - - - - -
Total transactions with owners - - - - - - - 79 79
Balance at 30 September 2022 482 84,802 1,480 (75,308) (74) (111) 7,456 (6,234) 12,493
Total comprehensive income / (expense)
Loss for the period - - - - - - - (725) (725)
Other comprehensive expense: - - - - - - - - -
Foreign exchange translation - - - - (21) - - - (21)
Movement in fair value of cash flow hedges 135 135
Cash flow hedges recycled to revenue - - - - - 16 - - 16
Total comprehensive income / (loss) - - - - (21) 151 - (725) (595)
Transactions with owners
Charge in respect of share options - - - - - - - 30 30
Exercise of share options 2 - - - - - - - 2
Total transactions with owners 2 - - - - - - 30 32
Balance at 31 March 2023 484 84,802 1,480 (75,308) (95) 40 7,456 (6,929) 11,930
Consolidated Statement of Cashflows
For the six months ended 31 March 2023 - unaudited
31-Mar-23 31-Mar-22 30-Sep-22
6 months 6 months 12 months
Unaudited Restated Audited
Unaudited
£000s £000s £000s
Cash flows from operating activities
Profit / (loss) for the period (725) 168 1,032
Finance income (44) - (10)
Finance expense 15 16 33
Taxation (159) (15) (147)
Depreciation of fixed assets 202 228 451
Amortisation of intangibles 103 91 188
Dilapidation provision release - - -
Impairment of intangible assets - - 41
Research and development expenditure credit (136) (153) (316)
Share option charge 30 104 79
(714) 439 1,351
Decrease in trade and other receivables 1,047 639 280
Decrease in trade and other payables (145) (850) (696)
Cash generated from operations 188 228 935
Taxation received - - 499
Taxation paid (15) (10) (10)
Net cash generated from operating activities 173 218 1,424
Purchase of property, plant and equipment (89) (37) (187)
Purchase of intangible assets including staff costs capitalised (828) (1,032) (2,058)
Finance income 39 - 6
Net cash used in investing activities (878) (1,069) (2,239)
Issue of shares 2 - -
Repayment of lease liabilities (25) (44) (114)
Net cash generated from financing activities (23) (44) (114)
Movements in cash and cash equivalents in the period (728) (895) (929)
Cash and cash equivalents at start of period 5,769 6,684 6,684
Effect of exchange rate fluctuations on cash held (20) 12 14
Cash and cash equivalents at end of period 5,021 5,801 5,769
Notes to the financial statements
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 a parent of a number of subsidiaries, together referred to
throughout as 'the Group'. The Group is an established provider of
technology-enabled imaging services to the global biopharmaceutical industry.
The Group's services are used to select patients 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 condensed consolidated interim financial statements were approved by the
Board of Directors for issue on 23(rd) May 2023. The condensed consolidated
interim financial statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. The condensed consolidated
interim financial statements for the six months ended 31 March 2023, together
with the comparative information for the six months ended 31 March 2022, are
unaudited.
The statutory accounts of the Company for the year ended 30 September 2022
were approved by the Board of Directors on 6 December 2022 and delivered to
the Registrar of Companies. The report of the auditors on those accounts was
unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under section 498 of the Companies Act 2006.
The condensed consolidated interim 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 condensed consolidated interim financial statements are presented in Great
British Pounds ('£' or 'GBP') and are rounded to the nearest thousand unless
otherwise stated. This is the functional currency of the Group, and is the
currency of the primary economic environment in which it operates. Foreign
currency transactions are accounted for in accordance with the policies set
out below.
c. Basis of consolidation
The condensed consolidated interim 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. 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 condensed 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
At the time of approving the condensed consolidated financial statements, the
Directors have considered the expected future performance together with the
Group's estimated future cash inflows from existing long-term contracts and
sales pipeline.
In assessing going concern, management prepare forecasts which are updated
monthly that consider different scenarios throughout the course of the
financial year, as well as ad-hoc forecasts that extend into future years. 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. Significant accounting policies, judgements, and estimation
uncertainty
The unaudited condensed consolidated interim financial statements have been
prepared using the accounting policies as described in the 30 September 2022
audited year end Annual Report and have been consistently applied.
When preparing the condensed consolidated interim 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.
Determination of acting as agent or principal
The scope of the project or contract terms are reviewed to determine whether
the Group is acting as principal or agent. This determination depends on the
facts and circumstances of each individual project or contract and requires
judgement, which are made in accordance with the applicable standards. The
primary indicator used to determine whether the Group is acting as a principal
is whether control of the good or service is gained prior to the good or
service transferring to the client. If control is gained, revenue is
recognised on a gross basis. If no control is achieved, then revenue is
recognised on a net basis. The Group has entered into a contract with a client
to arrange the delivery of products from a third party to various client trial
sites. The Group determined this was an agency relationship. If this judgement
was incorrect and the Group was acting as principal, it would result in a
material increase in revenue and cost of sales recognised in the period and a
decrease in profit margins achieved.
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. 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 period ended 31 March 2023, research and development expenses
totalled £1,035,000 (H1 2022: £1,678,000). Of this amount, £571,000 (H1
2022: £1,027,000) was capitalised as an intangible asset relating to employee
costs. The balance of expenditure being £464,000 (H1 2022: £631,000) 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.
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 period.
Determination of transaction prices in revenue recognition
Client contracts include an agreed work order so the transaction price for a
contract is allocated against each distinct performance obligations for each
service, based on their relative stand-alone selling prices. For legacy
contracts prior to the adoption of IFRS 15, management were required to
estimate the standalone price allocated to each distinct service that were
previously grouped in a single price. For new contracts, the fair value of
individual components is based on actual amounts charged by the Group on a
stand-alone basis. Management have determined that for items recognised on a
straight-line basis, including project, site and data management, the demands
of this on the company are spread evenly over the life of the revenue stream.
This was determined through an understanding of the work required to deliver
the various revenue streams and the obligations within the contract needing to
be met.
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.
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.
Commission assets
The Group capitalises incremental costs incurred through contracts in line
with IFRS 15. These costs are spread over 3 years which is the average length
of a contract, as opposed to using a tailored time period for each project.
Management annually reviews this assessment to determine that there are no
material variances.
3. Earnings per share
The calculation of basic and diluted earnings per share ('EPS') of the Group
is based on the following data:
31 Mar 23 31 Mar 22 30 Sep 22
6 months 6 months 12 months
Unaudited Unaudited Audited
Earnings
Earnings for the purposes of basic and diluted EPS, being net profit (725) 168 1,032
attributable to the owners of the Company (£000)
Number of shares
Weighted average number of shares for the purposes of basic EPS 48,267,395 48,151,373 48,151,373
Effect of potentially dilutive ordinary shares:
- Weighted average number of share options - 2,487,018 2,606,350
Weighted average number of shares for the purposes of diluted EPS 48,267,395 50,638,391 50,757,723
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 period. 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
period. For the 6 months to 31 March 2023, 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:
31 Mar 23 31 Mar 22 30 Sep 22
6 months 6 months 12 months
Restated
Unaudited Unaudited Audited
Basic earnings per share (1.50p) 0.35p 2.14p
Diluted earnings per share (1.50p) 0.33p 2.03p
4. 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 all carry the right to one vote at shareholders'
meetings and 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 2022 48,151,373 482 84,802
Share options exercised 200,000 2 -
At 31 March 2023 48,351,373 484 84,802
Exercise of share options
During the period, the following share options were exercised:
Key management personnel Other Total Exercise Value
Employees price
Date of exercise Shares Shares Shares Pence £000
16 December 2022 200,000 - 200,000 0.01 2
Total 200,000 - 200,000 0.01 2
5. Share-based payments
Certain Directors and employees of the Group hold options to subscribe for
shares in the Company under share option schemes. There are 2 distinct
structures to the share options in operation in the Group (H1 2022: 2). Both
structures 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 7.2 years (H1
2022: 7.3 years). The total charge for the period relating to employee
share-based payment plans for continuing operations is £30,000 (H1 2022:
£104,000).
Details of the share options under the scheme outstanding during the period
are as follows:
As at 31 March 2023 As at 30 September 2022
Number Weighted average exercise price Number Weighted average exercise price
Outstanding at start of the period 4,490,931 £0.18 3,815,931 £0.18
Granted - - 900,000 £0.20
Exercised (200,000) £0.01 - -
Lapsed (444,583) £0.01 (225,000) £0.35
Outstanding at end of the period 3,846,348 £0.20 4,490,931 £0.18
Exercisable at end of the period 1,883,014 £0.06 1,719,680 £0.07
6. Prior period adjustment
The Company restated its financials in the year ended 30 September 2022. This
related to the capitalisation of commission and the subsequent amortisation of
this, as outlined in IFRS 15. This restatement is required for our interim
statements for prior period comparative information.
The full extent of the restatement is to increase net assets by £210,000 for
the six months ending 31 March 2022:
Consolidated statement of financial position 31 March 2022 as originally presented Restatement 31 March 2022 restated
Trade and other receivables 2,589 82 2,671
Trade and other payables 1,436 (128) 1,308
Net assets 11,548 210 11,758
Consolidated statement of comprehensive income 31 March 2022 as originally presented Restatement 31 March 2022 restated
Sales and marketing expenses (497) (48) (545)
Total operating expenses (2,522) (48) (2,570)
Operating profit 217 (48) 169
Profit on ordinary activities before taxation 201 (48) 153
Profit attributable to equity holders for the period 216 (48) 168
Total comprehensive income attributable to equity holders for the period 223 (48) 175
Consolidated statement of cash flows 31 March 2022 as originally presented Restatement 31 March 2022 restated
Profit for the period 216 (48) 168
(Increase)/decrease in trade and other receivables 609 30 639
Increase/(decrease) in trade and other payables (868) 18 (850)
Cash (used in)/generated from operations 228 - 228
31 March 2022 as originally presented Restatement 31 March 2022 restated
Basic earnings per share 0.45 (0.10) 0.35
Diluted earnings per share 0.43 (0.10) 0.33
Please see the published full year accounts for the year ended 30 September
2022 for more details on this.
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 IR DLLFLXELLBBBRecent news on IXICO
See all newsRCS - IXICO plc - Life Molecular Imaging – Neuraceq Supply Agreement
AnnouncementRCS - IXICO plc - Imeka Collaboration Agreement
AnnouncementREG - IXICO plc - Trading Update
AnnouncementREG - IXICO plc - Holding(s) in Company
AnnouncementREG - IXICO plc - Result of AGM
Announcement