REG - IXICO plc - Half-year Report
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RNS Number : 2957J IXICO plc 20 May 2025
IXICO plc
("IXICO", the "Company" or the "Group")
Interim results for six months ending 31 March 2025
20 May 2025 IXICO plc (AIM: IXI), a global leader in neuroscience imaging
and biomarker analytics, using its AI-driven platform to help advance drug
development in neurological disorders, today announces its unaudited interim
results for the six months ended 31 March 2025 ('H1 2025' or the 'period').
Financial highlights
· Revenues up 26% to £3.2 million (H1 2024: £2.5m) putting the
Company in a strong position to deliver or exceed guidance
· Gross margin increased by 23% to a level of 49.6% (H1 2024:
40.2%), reflecting increased revenues and thereby accessing operational
leverage
· Order book of £13.1m as at 31 March 2025 (H1 2024: £12.7m)
· EBITDA loss of £0.7m to 31 March 2025 (H1
2024: £1.3m loss)
· Strong cash position £5.0 million at 31 March 2025 (H1 2024:
£2.5m). The Group raised £3.7 million of new capital (net of placing costs)
in October 2024
Operational highlights
· Strengthening of operations with key hires that enhance US
footprint and deepen C-Suite expertise
· Exciting technology and product roadmap progress announced in
Alzheimer's and Parkinson's disease that increases commercial opportunities
· Diversification of projects across therapeutic areas,
clinical phases, geographies and customer types
· Focussed execution on the Innovate, Lead, Scale strategy, building a
foundation for growth that will become increasingly visible across the second
half of 2025 and into 2026.
Post period activity
· Contract signed with a major global pharmaceuticals company to
provide trial management and neuroimaging analytics for a Phase 1 Huntington's
Disease clinical trial.
Bram Goorden, CEO of IXICO, commented: "The first half of 2025 indicates that
our 'Innovate Lead Scale' strategy has created the foundations for a return to
growth driven by the diversification of revenue streams, therapeutic areas and
market verticals, together with the scope extension of existing client
programs. It has been a positive first six months defined by disciplined
commercial execution, scientific innovation and truly differentiated
technology development. My conviction has been further strengthened that the
Company is going to make an accelerated impact in the thriving space of
neurodegenerative disease research."
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
Bram Goorden, Chief Executive Officer
Grant Nash, Chief Financial Officer
Cavendish Capital Markets Limited +44 (0) 20 7220 0500
(Nominated Adviser and Sole Broker)
Giles Balleny (Corporate Finance)
Nigel Birks (Healthcare Specialist Sales)
Harriet Ward (Corporate Broking)
Michael F Johnson (Sales)
About IXICO
IXICO is dedicated to delivering insights in neuroscience to help transform
the advancement of investigational therapies for neurological diseases, such
Alzheimer's disease, Parkinson's disease and Huntington's disease. The
Company's purpose is to advance medicine and human health by turning biomarker
data into clinically meaningful information, 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 and broader
biomarker 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 as they develop novel
solutions for high unmet challenges in the space of neurodegenerative diseases
.
More information is available on www.IXICO.com (http://www.IXICO.com)
CHIEF EXECUTIVE OFFICER'S STATEMENT
Overview
IXICO continues to grow, and be highly respected for, its position as an
AI-driven neuroscience imaging and biomarker analytics company using its
proprietary technology platform to help the biopharmaceutical industry develop
treatments for neurological disease.
The first six months of this financial year can be characterised as a period
of focussed execution on the Innovate, Lead, Scale strategy outlined as part
of the successful £3.7m net capital raise conducted in October 2024. The
strategy aims to deepen the use of IXICO's platform across multiple
neurological disease areas, clinical trial phases and geographies,
particularly expanding further into Alzheimer's Disease (AD) and Parkinson's
Disease (PD) to deliver a clear path to continued revenue growth, increased
visibility and extended market penetration.
Relative to the same period in the prior year, this focus has led to a 26%
increase in H1 revenues to £3.2m (H1 2024: £2.5m) and growth in the order
book to £13.1m (H1 2024: £12.7m). The positive commercial momentum is the
result of three key drivers: i) greater diversification of projects across
therapeutic areas, clinical phases, geographies and customer types, ii)
scope extensions on existing contracts, iii) entering new vertical areas such
as the validation of clinical diagnostics. At the same time the Company has
progressed scientific innovation combined with global operational delivery
excellence and continued to deploy the next generation of IXICO's end-to-end
analytics platform, equipped with the latest technology and algorithms to help
address evolutions in neurological R&D.
During the period IXICO announced a number of commercial partnerships and
contracts for global imaging trial management and analysis, including a Phase
II Huntington's Disease (HD) clinical trial as announced on 10 December 2024
and the validation analysis of a new biomarker in AD as announced on 27
February 2025 using the dataset from the Global Alzheimer's Platform
Foundation's groundbreaking Bio-Hermes-001 study, of which IXICO is a key
participant. What is particularly encouraging about these contract wins is the
longer term nature of these agreements that provide the potential for
additional future revenues.
It is a positive start to the FY25 period and one that provides confidence
that the strategy is delivering and generating opportunities for growth and
market differentiation in the thriving space of neurodegenerative disease
research.
Operations
A key element of the capital raise at the start of FY25 was to strengthen
IXICO's commercial operations to accelerate contract wins. To that end the
Company has expanded its global footprint, hiring Terry Reilly, as VP, Head of
Commercial, who has a strong track record and network within the CNS biopharma
industry. Terry is based in the US, and oversees global commercial
development. In addition, hires have been made to broaden the number and
expertise of people in the US together with resource additions in the global
Science and Technology teams.
IXICO has also moved to broaden its leadership team adding two new members to
the C-Suite. Mark Austin, previously VP Technology at IXICO and the architect
of the IXICO Platform has been promoted to Chief Technology Officer (CTO).
Mark will continue to lead technology strategy and will accelerate further
scalability of the Platform internally and through partnerships. James
Chandler joins IXICO as Chief Business Officer (CBO) responsible for
amplifying the visibility of IXICO and overseeing marketing, investor
relations and corporate development, driving partnership and collaboration
opportunities.
These resource additions, together with the existing high performing senior
management team, will enable IXICO to utilise and expand its technology
advantage, accelerate commercial growth and seek new ways to enhance value.
The impact of the new hires is already being felt with positive momentum on
new commercial partnerships coming through the pipeline especially in the
areas of AD and PD. The Group also retains market dominance and growth in HD,
a foundational part of IXICO's business and a therapeutic area moving towards
having an FDA approved drug.
Product & Technology Roadmap
As ever, continued innovation and development of the IXICO Platform is
critical. Using imaging remains the gold standard to determine whether a
neurological treatment may have the anticipated effect. IXICO continually
invests in refining existing protocols, and developing some of the most
advanced new methods to assess how developmental drugs act on brain
function.
Analysing the impact of a drug is important, not only from an efficacy
perspective, but also for safety since there are potential side-effects which
require monitoring, for example in neurology measuring amyloid-related imaging
abnormalities (ARIA). In addition, these new drugs will come at a high cost
to prescribe, which is why we currently see regulators approving some of these
novel therapies, but governmental health organisations and decision makers are
still hesitating to reimburse as they want to better understand the patient
populations which will benefit most. This is the essence of precision
medicine, something we have seen develop enormously in the field of cancer
research and treatment which is now translating to neurological disease.
During the period IXICO has focussed on building a pipeline of highly
innovative new products, and on bringing those products to the market as
quickly as possible. The product pipeline demonstrates market leading
expertise and clear differentiation that will broaden IXICO's commercial
opportunities in AD, PD and a range of other neurological disease areas.
Proprietary technology development has been focussed around three key
innovation themes, offering new capabilities in AD and PD.
· Vascular biomarkers
IXICO is developing a series of biomarker algorithms to identify and measure
vascular abnormities, a common contributing factor in neurodegenerative
disease where MRI approaches remain the standard. While particularly
relevant for screening, safety and efficacy in AD, measuring vascular
components and abnormalities has wider applications in other neurological
therapeutic areas such as Cerebral Amyloid Angiopathy (CAA), Stroke, and
Multiple Sclerosis. The first in a series of planned vascular biomarker
algorithms will be available to clients on their clinical trials from Q3 FY25
with further releases planned for FY26.
· Neuromelanin biomarker
The presence of neuromelanin, a dark pigment found in specific brain regions,
is associated with Parkinson's disease. Currently there are no imaging-based
tools robust enough to measure neuromelanin for clinical trial use. IXICO has
passed the proof of concept phase in developing a neuromelanin imaging
solution with the support of a leading external Key Opinion Leader (KOL) and
is making rapid progress towards commercialising a neuromelanin product that
will be available to clients on their clinical trials from Q4 FY25.
· Inflammation measurement
Building on an already competitive offering, IXICO is working to expand its
services in inflammation measurement, looking at how diffusion tensor imaging
(DTI) approaches could be used to better understand inflammatory processes in
the brain by measuring microstructural changes early in the disease process.
Separately, IXICO is also developing markers of vascular pathology to enable
the measurement of down-stream damage linked to neuroinflammatory processes
when it becomes visible on conventional MRI.
Biopharma market
The role of neuroimaging remains a key component in neurological clinical
trials. Analyses derived from radiology such as MRI and PET scans are an
effective way to show signals of efficacy and safety, especially early-on, so
biopharma companies can advance or fail fast through development cycles.
Upon approval of therapies, there is a further need for precision biomarker
analysis to bring new treatments to market and continue to monitor the
effectiveness and safety of new medicines through post-marketing surveillance.
Funding and financial health of the biopharmaceutical industry climate remains
conservative, while the impact of US tariff decisions as it relates to drug
R&D remains uncertain. Early public commentary from the management teams
of many pharmaceutical companies indicate that they are taking some actions to
mitigate risk. Regarding US 'tariff' uncertainty, IXICO has not directly
experienced any immediate impact from customers changing clinical development
plans, descoping or delaying potential projects. In particular, in
neurological research, interest in developing new medicines for many
conditions that currently do not have effective treatments is high with
projected growth estimates for the neurological disorder drugs market varying
between 5.1% to 7.9% CAGR. 1 (#_ftn1)
Post period activity
In May 2025, IXICO signed a contract with a major global pharmaceuticals
company to provide trial management and neuroimaging analytics for a Phase 1
Huntington's Disease clinical trial. The contract value is over £0.5 million,
revenue from which will be recognised over the 3 year-period of the clinical
trial.
Outlook
It has been a good six months. The new strategy is bearing fruit, with 2025
trading showing a growing trajectory in line with expectations. It is early in
the execution of that strategy with the full impact expected to become more
visible across the second half of 2025 and into 2026. The expansion of the
IXICO biomarker Platform into more therapeutic areas and more verticals offers
an exciting opportunity to realise a greater proportion of the significant
potential of the technology.
The Group's role as a transformative global partner enabling the R&D into
precision medicine in neurological disease, undoubtedly has a positive impact.
One that not only translates into a medium term return to profitability for
the Group, but more importantly one that will improve the future lives of
patients around the world suffering from currently untreated neurological
diseases.
Bram Goorden
CEO, IXICO plc
Financial Review
KPI H1-25 H1-24 Movement FY24
Revenue £3.2m £2.5m £0.7m ↑ £5.8m
Gross profit £1.6m £1.0m £0.6m ↑ £2.7m
Gross margin 49.6% 40.2% 8.4% ↑ 47.0%
EBITDA loss (£0.7m) (£1.3m) £0.6m ↑ (£1.7m)
Operating loss (£0.9m) (£1.6m) £0.7m ↑ (£2.2m)
Loss per share (1.11p) (2.92p) 1.89p ↑ (4.14p)
Order book(1) £13.1m £12.7m £0.4m ↑ £15.3m
Net assets £12.3m £10.0m £2.3m ↑ £9.5m
Cash £5.0m £2.5m £2.5m ↑ £1.8m
Non-current asset investments £0.3m £0.3m £0.0m ̶ £0.5m
(1)Order book is contracted but not yet recognised revenue adjusted down to
reflect the Company's best estimate of delivery.
Revenue
· The Group reports revenue of £3.2 million (H1 2024: £2.5m)
representing a 26% increase on the equivalent prior period.
· This revenue increase was caused by a strengthening in new
contract bookings across the second six months of FY24 and the first six
months of FY25. This reflects an improvement in the Company's commercial
approach and positioning as a global service provider in what otherwise
remains a challenging market for the biopharmaceutical industry (and biotech
in particular) created by an uncertain global economy and tight capital
markets. This continues to impact the start-up of planned new trials.
· The Group anticipates that the actions it has taken since it
raised capital in October 2024 will lead to increased order volumes across the
second half of the financial year. This is expected to deliver an order book
that will grow across the remainder of the year.
Gross profit and margin
· Gross profit for H1-2025 is £1.6 million (H1 2024: £1.0m) with
a gross margin of 49.6% (H1 2024: 40.2%).
· The year-on-year absolute change is reflective of increased
revenue in the period and the relatively fixed cost nature of IXICO's costs of
delivery.
· The gross profit of the Group is a factor of the total revenues
achieved, and the specific margins of the projects delivered (sales mix) with
later phase trials tending to deliver higher gross margins. As the Group
further diversifies its order book, wins more trials and increases the number
of trials that are late stage, so the gross margin of the Group will further
improve.
Operating expenses and capital expenditure
· The Group's operating expenditure for H1 2025 is £2.8 million
(H1 2024: £2.9m)
· Careful management of operating expenditure, including the
reduction of headcount in the prior year, has been partially offset by
specific, growth-targeted investments made since the Group raised capital in
October 2024. These investments are within R&D (Innovation) and S&M
(Lead & Scale) and are designed to drive commercial traction, especially
in the therapeutic indications of AD and PD.
· Capitalised R&D expenditure relating to staff costs in the
period totalled £0.2 million (H1 2024: £0.2m). This reflects ongoing
development of the Group's technology platform, expanding both the analysis
pipelines, particularly in AD and PD, and to further streamline clinical trial
data capture and their management for clients.
EBITDA and operating loss
· The Group has reported an EBITDA loss of £0.7 million (H1 2024:
£1.3m) and operating loss of £0.9 million (H1 2024: £1.6m). Both reflect
the increased revenues across the period, increased gross margins and stable
operating expenditure.
H1-25 H1-24
£000 £000
Loss attributable to equity holders (955) (1,412)
Depreciation of tangible assets 123 140
Amortisation of intangible assets 85 101
Interest on lease liabilities 7 11
Interest on cash held at bank (47) (55)
Taxation 69 (131)
EBITDA (718) (1,346)
Order book
· The Group's order book totalled £13.1 million at 31 March 2025
(H1 2024: £12.7m). Across the last twelve months the order book has increased
by £0.4 million reflecting £9.7 million of new contracts and contract value
increases, offset by £6.4 million revenues recognised and £2.9 million of
contract value reductions reflecting the cancellation or descope of contracts
and other minor adjustments including foreign exchange losses.
Cash
· The Group had a cash balance of £5.0 million at 31 March 2025
(H1 2024: £2.5m). The Group raised £3.7 million of new capital (net of
placing costs) in October 2024. Excluding this capital raise, the Group
reports net cash outflows of £0.5 million in the six months to 31 March 2025
(H1 2024: £1.5m).
· Operating cash outflows totalled £0.9 million (H1 2024: £1.5m)
before accounting for timing differences relating to movements in receivables
and payables.
Net Assets
· The Group reports net assets at 31 March 2025 of £12.3 million
(H1 2024: £10.0m). This reflects the increase of the Group's working capital
position to £5.6 million (H1 2024: £3.5m) and maintaining of its non-current
asset position at £6.8 million (H1 2024: £6.8m).
Consolidated Statement of Comprehensive Income
For the six months ended 31 March 2025 - unaudited
31-Mar-25 31-Mar-24 30-Sep-24
6 months 6 months 12 months
Unaudited Unaudited Audited
Notes £000 £000 £000
Revenue 3,208 2,538 5,766
Cost of sales (1,618) (1,518) (3,055)
Gross profit 1,590 1,020 2,711
Other income 287 256 781
Operating expenses
Research and development expenses (626) (623) (1,337)
Sales and marketing expenses (862) (787) (1,396)
General and administrative expenses (1,318) (1,454) (2,913)
Total operating expenses (2,806) (2,864) (5,646)
Operating loss (929) (1,588) (2,154)
Finance income 47 55 85
Finance expense (7) (11) (25)
Loss on ordinary activities before taxation (889) (1,544) (2,094)
Taxation (69) 131 93
Loss attributable to equity holders for the period (958) (1,413) (2,001)
Other comprehensive income/(expense):
Items that will be reclassified subsequently to profit or loss
Foreign exchange translation differences 2 - (2)
Movement in fair value of cash flow hedges (13) 27 32
Cash flow hedges recycled to revenue 11 (3) (5)
Total other comprehensive income - 23 25
Total comprehensive expense attributable to equity holders for the period (958) (1,389) (1,976)
Loss per share (pence)
Basic loss per share 3 (1.11) (2.92) (4.14)
Diluted loss per share 3 (1.11) (2.92) (4.14)
Consolidated Statement of Financial Position
As at 31 March 2025 - unaudited
31-Mar-25 31-Mar-24 30-Sep-24
6 months 6 months 12 months
Unaudited Unaudited Audited
Notes £000 £000 £000
Assets
Non-current assets
Property, plant and equipment 232 418 313
Intangible assets 6,547 6,305 6,374
Commission assets 7 28 9
Total non-current assets 6,786 6,751 6,696
Current assets
Trade and other receivables 1,578 1,425 2,213
Current tax receivables 705 862 492
Cash and cash equivalents 5,010 2,532 1,787
Total current assets 7,293 4,819 4,492
Total assets 14,079 11,570 11,188
Liabilities and equity
Non-current liabilities
Trade and other payables 4 - -
Lease liabilities 82 208 150
Total non-current liabilities 86 208 150
Current liabilities
Trade and other payables 1,507 1,206 1,410
Derivative financial liability 2 3 -
Lease liabilities 193 115 164
Total current liabilities 1,702 1,324 1,574
Total liabilities 1,788 1,532 1,724
Equity
Ordinary shares 4 927 484 484
Share premium 4 88,056 84,802 84,802
Merger relief reserve 1,480 1,480 1,480
Reverse acquisition reserve (75,308) (75,308) (75,308)
Foreign exchange translation reserve (95) (95) (97)
Cash flow hedge reserve (2) (3) -
Capital redemption reserve 7,456 7,456 7,456
Accumulated losses (10,223) (8,778) (9,353)
Total equity 12,291 10,038 9,464
Total liabilities and equity 14,079 11,570 11,188
Consolidated Statement of Changes in Equity
For the six months ended 31 March 2025 - 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 1 October 2023 484 84,802 1,480 (75,308) (95) (27) 7,456 (7,360) 11,432
Total comprehensive expense
Loss for the period - - - - - - - (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
Total comprehensive expense
Loss for the period - - - - - - - (958) (958)
Other comprehensive income/(expense):
Foreign exchange translation - - - - 2 - - - 2
Movement in fair value of cash flow hedges - - - - - (13) - - (13)
Cash flow hedges recycled to revenue - - - - - 11 - - 11
Total comprehensive income/(expense) - - - - 2 (2) - (958) (958)
Transactions with owners
Issue of shares 426 3,623 - - - - - - 4,049
Transaction costs incurred on share issue - (369) - - - - - - (369)
Charge in respect of share options - - - - - - - 88 88
Exercise of share options 17 - - - - - - - 17
Total transactions with owners 443 3,254 - - - - - 88 3,785
Balance at 31 March 2025 927 88,056 1,480 (75,308) (95) (2) 7,456 (10,223) 12,291
Consolidated Statement of Cashflows
For the six months ended 31 March 2024 - unaudited
31-Mar-25 31-Mar-24 30-Sep-24
6 months 6 months 12 months
Unaudited Unaudited Audited
£000 £000 £000
Cash flows from operating activities
Loss for the period (958) (1,413) (2,001)
Finance income (47) (55) (85)
Finance expense 7 11 25
Taxation 69 (131) (93)
Depreciation of fixed assets 103 124 239
Amortisation of intangibles 105 117 236
Disposal of fixed assets - - (405)
Research and development expenditure credit (272) (163) -
Share option charge 88 (5) 8
(905) (1,515) (2,076)
Decrease/(increase) in trade and other receivables 569 129 (559)
Increase in trade and other payables 165 216 351
Cash used in operations (171) (1,170) (2,284)
Taxation received - - 553
Taxation paid - (1) (1)
Net cash used in operating activities (171) (1,171) (1,732)
Purchase of property, plant and equipment (22) (24) (34)
Purchase of intangible assets including staff costs capitalised (236) (291) (437)
Finance income 45 63 94
Net cash used in investing activities (213) (252) (377)
Issue of shares 4,066 - -
Transaction costs incurred on share issue (369) - -
Repayment of lease liabilities (90) (76) (134)
Net cash generated from/(used in) financing activities 3,607 (76) (134)
Movements in cash and cash equivalents in the period 3,223 (1,499) (2,243)
Cash and cash equivalents at start of period 1,787 4,031 4,031
Effect of exchange rate fluctuations on cash held - - (1)
Cash and cash equivalents at end of period 5,010 2,532 1,787
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 20 May 2025. 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 2025, together
with the comparative information for the six months ended 31 March 2024 are
unaudited.
The statutory accounts of the Company for the year ended 30 September 2024
were approved by the Board of Directors on 3 December 2024 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
interim 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 £3.7 million capital raise (net of proceeds) in
October 2024, the Group is well positioned 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 and was
oversubscribed. This growth is supported by a strong balance sheet for its
size with period end net assets of £12.3 million, a £5.0 million cash
balance, as well as an orderbook of £13.1 million, representing future
contracted revenues.
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. 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 2024
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.
2. Significant accounting policies, judgements, and estimation
uncertainty (continued)
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 assesses 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 2025, research and development expenses
totalled £861,000 (H1 2024: £898,000). Of this amount, £235,000 (H1 2024:
£275,000) was capitalised as an intangible asset, £191,000 (H1 2024:
£230,000) relating to employee costs and £44,000 (H1 2024: £45,000)
relating to external costs. The balance of expenditure being £626,000 (H1
2024: £623,000) 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.
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 25 31 Mar 24 30 Sep 24
6 months 6 months 12 months
Unaudited Unaudited Audited
Earnings
Earnings for the purposes of basic and diluted EPS, being net profit
attributable to the owners of the Company (£000)
(958) (1,413) (2,001)
Number of shares
Weighted average number of shares for the purposes of basic EPS 86,226,376 48,351,373 48,309,181
Weighted average number of shares for the purposes of diluted EPS 86,226,376 48,351,373 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 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 2025, 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 25 31 Mar 24 30 Sep 24
6 months 6 months 12 months
Unaudited Unaudited Audited
Basic earnings per share (1.11p) (2.92p) (4.14)
Diluted earnings per share (1.11p) (2.92p) (4.14)
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 2024 48,351,373 484 84,802
Issue of shares 42,621,508 426 3,623
Transaction costs incurred on share issue - - (369)
Share options exercised 1,695,717 17 -
At 31 March 2025 92,668,598 927 88,056
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
10 October 2024 200,000 - 200,000 1.0 2
10 October 2024 - 1,495,717 1,495,717 1.0 15
Total 200,000 1,495,717 1,695,717 - 17
This resulted in an increase in share capital of £16,957.
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 2024: 2). Both
structures relate to a single scheme outlined in the EMI Share Option Plan
2014, which was subsequently renewed and updated in 2024.
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 9.3 years (H1
2024: 6.1 years). The total charge for the period relating to employee
share-based payment plans for continuing operations was a charge of £88,000
(H1 2024: £5,000 reversal).
During the period, share options were granted to the Executive Directors and
several employees. Those options granted to the Executive Directors were
discussed with the Group's largest shareholders alongside the capital raise
undertaken in October 2024 and were presented in the circular accompanying
this capital raise. An additional 7,413,488 of these options were put to
shareholder vote at the AGM in January 2025 and received support from 99.76%
of those shareholders who voted.
Details of the share options under the scheme outstanding during the period
are as follows:
As at 31 March 2025 As at 30 September 2024
Number Weighted average exercise price Number Weighted average exercise price
Outstanding at start of the period 3,034,505 £0.12 3,529,681 £0.15
Granted 11,233,546 £0.06 - -
Exercised (1,695,717) £0.01 - -
Lapsed (137,647) £0.01 (495,176) £0.34
Outstanding at end of the period 12,434,686 £0.04 3,034,505 £0.12
Exercisable at end of the period 726,140 £0.31 2,459,504 £0.10
1 (#_ftnref1)
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