REG - Oxford Biomedica PLC - Interim Results <Origin Href="QuoteRef">OXB.L</Origin> - Part 2

Oxford BioMedicaAnnouncement

17/08/2017 07:05

- Part 2: For the preceding part double click  ID:nRSQ2112Oa 

reduce by 0.25% in the second year and a further 0.25%
in the third year. The loan was issued at an original discount of 2.5%, and
under the agreement the Company has issued 134,351,226 warrants to Oaktree
(note 17). The loan is secured over all assets of the Group including
intellectual property. The terms also include financial covenants relating to
the achievement of revenue targets and a requirement to hold a minimum of $5
million cash at all times. 
 
On initial recognition, the Oaktree loan, net of the expenses incurred in the
refinancing which are treated as prepaid expenses, was fair valued at £33.9
million. 
 
In May 2015, the Group entered into a $50 million loan facility with Oberland.
The Group drew down $40 million (£26.1million) of the facility to finance the
Group's expansion of its bioprocessing and laboratory capacity in order to
enable it to deliver on commitments under its bioprocessing agreement with
Novartis. Over the course of the loan term, cash interest was payable
quarterly at an annual interest rate of 9.5% plus the greater of 1% and three
month LIBOR. The loan was issued at an original discount of 2.5%, and a
repayment fee was also due on repayment. In addition to interest, the Group
would also have been required to pay an additional amount of 0.35% of its
annual worldwide net revenue from 1 April 2017 to 31 December 2025 for each $5
million of loan drawn down over $30 million. 
 
As the loan was repaid after the second anniversary, under the terms of the
agreement, there was a true-up payment payable to ensure that Oberland
received an aggregate return of 15% per annum over the period of the loan. The
Group was also required to maintain a cash balance of not less than $10
million in a ring-fenced account whilst the Oberland Facility was
outstanding. 
 
The Oberland Facility was fully repaid on 29 June 2017 at a cost of £36.3
million including the accrued interest of £5.3 million. 
 
15. Provisions 
 
The dilapidations provision of £0.6 million (2016: £0.6 million) relates to
anticipated costs of restoring the leasehold Yarnton property in Oxford, UK to
its original condition at the end of the present lease in 2024, discounted
using the rate per the Bank of England nominal yield curve. The equivalent
rate was used in 2016. The provision will be utilised at the end of the lease
if it is not renewed. 
 
16. Share capital and Share premium 
 
At 31 December 2016 and 30 June 2017 the Company had issued share capital of
3,088,047,310 and 3,088,726,215 ordinary 1p shares respectively. 
 
17. Warrant reserve 
 
Under the Oaktree loan agreement the Company has issued 134,351,226 warrants
to Oaktree, equivalent to 4.4% of the enlarged Group's share capital. The
warrants are exercisable at the nominal share price of 1p and may be exercised
at any time over the next ten years.  The warrants have been fair valued at
£1.2 million net of related expenses and this amount has been credited to the
warrant reserve. 
 
18. Cash flows from operating activities 
 
Reconciliation of operating loss to net cash used in operations 
 
                                                       Six months ended30 June 2017£'000  Six months ended30 June 2016£'000  
 Continuing operations                                                                                                       
 Operating loss                                        (2,220)                            (6,942)                            
                                                                                                                             
 Adjustment for:                                                                                                             
 Depreciation                                          2,008                              1,295                              
 Amortisation of intangible assets                     155                                172                                
 Charge in relation to employee share schemes          292                                263                                
 Revaluation of investments                            (2,297)                            -                                  
                                                                                                                             
 Changes in working capital:                                                                                                 
 (Increase) / decrease in trade and other receivables  (1,628)                            4,222                              
 Increase / (decrease) in trade and other payables     2,018                              (928)                              
 Increase in deferred income                           2,094                              1,348                              
 Increase in provisions                                4                                  7                                  
 Increase in inventories                               (1,694)                            (135)                              
 Net cash used in operations                           (1,268)                            (698)                              
 
 
19. Statement of Directors' responsibilities 
 
The Directors of Oxford BioMedica plc are set out on page 22 of this report. 
 
The condensed consolidated interim financial statements are the responsibility
of, and have been prepared by the Directors. The Directors confirm that they
have been prepared in accordance with the Disclosure and Transparency Rules of
the Financial Conduct Authority and with IAS 34 'Interim financial reporting'
as adopted by the European Union and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely: 
 
·      An indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and 
 
·      Material related party transactions in the first six months and any
material change in related-party transactions described in the last annual
report. 
 
By order of the Board 
 
John Dawson 
 
Chief Executive Officer 
 
16 August 2017

Shareholder Information 
 
 DirectorsLorenzo Tallarigo(Non-executive Chairman) John Dawson(Chief Executive Officer) Tim Watts(Chief Financial Officer and Company Secretary) Peter Nolan(Chief Business Officer) Andrew Heath(Deputy Chairman and Senior Independent Director) Martin Diggle(Non-executive Director) Stuart Henderson(Independent Non-executive Director)  Corporate BrokerJefferies International LimitedVintners Place68 Upper Thames StreetLondon EC4V 3BJ Financial AdviserWG Partners85 Gresham StreetLondon EC2V 7NQ Financial and Corporate CommunicationsConsilium Strategic Communications41 LothburyLondon EC2R  
                                                                                                                                                                                                                                                                                                                                                7HG Registered AuditorsPricewaterhouseCoopers LLP3 Forbury Place23 Forbury RoadReadingRG1 3JH SolicitorsCovington & Burling LLP265 StrandLondon WC2R 1BH RegistrarsCapita Asset ServicesThe Registry34 Beckenham RoadBeckenhamKent BR3 4TU Company Secretary and 
                                                                                                                                                                                                                                                                                                                                                Registered OfficeTim WattsWindrush CourtTransport WayOxford OX4 6LT Tel: +44 (0) 1865 783 000Fax:+44 (0) 1865 783 001 enquiries@oxfordbiomedica.co.ukwww.oxfordbiomedica.co.uk                                                                                  
 
 
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