REG - Physiomics PLC - Annual Financial Report
27/09/2024 07:00
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RNS Number : 9085F Physiomics PLC 27 September 2024
27 September 2024
Physiomics plc
("Physiomics" or the "Company")
Final Results for the year ended 30 June 2024
Physiomics plc (AIM: PYC), a leading mathematical modelling and data science
company supporting the development of new therapeutics and personalised
medicine solutions, is pleased to announce its audited results for its
financial year ended 30 June 2024.
Highlights
Financial Highlights
• The financial year ending 30 June 2024 resulted in a
record year for the total value of new contracts won (more than £1.1m) during
the period and ended with a record level (based on last six years of data) of
contracted revenue to be taken forward into the following year (more than
£500k)
• Total income (revenue and grant income) decreased 6% to
£570,561 (2023: £605,734)
• The operating loss increased 17% to £670,816 (2023:
£573,733)
• The loss after taxation increased 28% to £609,352 (2023:
£477,257)
• At 30 June 2024, the surplus of shareholders' funds was
£282,527 (30 June 2023: £531,720)
• Cash and cash equivalents at 30 June 2024, and before the
post year end funding, of £191,072 (30 June 2023: £416,592)
Operational highlights
• Appointment of Chief Operating Officer, Dr Peter Sargent
in September 2023, with his transition to Chief Executive Officer and Director
in January 2024; coinciding with Dr Jim Millen's appointment as Non-Executive
Chairman
• Awarded a grant by Innovate UK and the Office for Life
Sciences to advance the development of the Company's G-CSF dosing tool. The
Company will receive £137,376 out of the total £570,651 grant award
• Implementation of the Company's Personalised Dosing
Software onto DoseMe's newly launched platform, allowing access to the
software for research purposes initially, with the aim to add paid for
functionality later
• Awarded two large contracts exceeding £286k, in
aggregate, with two new clients, one of whom is at the forefront of AI driven
drug discovery
• Follow-on contracts with Bicycle Therapeutics, Numab
Therapeutics, Merck KGaA and Sheffield University exceeding, in aggregate,
£822k
• Continued operational build of a Biostatistics service
line, with the initial appointment of a Head of Biostatistics and then the
onboarding of a Principal Biostatistics consultant
Post period end
• Successful completion of a fundraise, with gross proceeds
raised of £406,417. Funds were raised to continue driving growth in the
business, including the following key activities:
• Recruitment of a Head of Modelling & Simulation:
currently in final stages of candidate recruitment
• Continued investment into business development and marketing
across Modelling and Biostatistics service lines
• Exploration of strategic opportunities in Biostatistics
• Development of personalised dosing tool with reengagement
with DoseMe
Dr Peter Sargent, Chief Executive Officer, commented: "The impact of the
Company's strategic review has already resulted in key performance metrics
hitting record levels, enabling us to start the financial year ending 30 June
2025 with more than £500k of contracted revenue and good momentum across our
key initiatives. We are actively seeking to build upon this solid base and the
Board looks forward to a successful financial year 2025."
Enquiries:
Physiomics plc
Dr Peter Sargent, CEO
+44 (0)1235 841575
Hybridan LLP (Broker)
Claire Louise Noyce
+44 (0) 203 764 2341
Strand Hanson Ltd (NOMAD)
James Dance & James Bellman
+44 (0)20 7409 3494
Notes to Editor
About Physiomics
Physiomics' strategy is to grow its consulting business across modelling &
simulation and biostatistics while actively applying this expertise in the
development of personalised medicine assets.
Physiomics combines cutting edge PKPD and QSP modelling and data science
techniques, along with deep biology expertise, to help biotech and pharma
companies streamline their drug development journeys.
Our approach is to derive insight from all relevant data in order to de-risk
decision making and optimise design research across discovery, pre-clinical
and clinical studies.
Through use of bespoke models and our proprietary Virtual Tumour technology,
the Physiomics team has informed the development of over 100 commercial
projects, over 50 targets and 75 drugs. Clients include Merck KGaA, Astellas,
Bicycle Therapeutics, Numab Therapeutics & CRUK.
Chairman and Chief Executive Officer's Statement
Overview
Following a strategic review at the start of the year, the Company has begun
implementing the operating model changes necessary to position the business
for growth. Even though these changes are yet to effect total income, which
was down approx. 6% on the previous year, significant increases in other
performance metrics were seen. The Company achieved record levels of contract
awards, with more than £1.1m of new contracts signed during the financial
year and a record level of contracted revenue (more than £500k) to be taken
forward into the next financial year ending 30 June 2025. Additional revenue
has also been contracted for the two years ended 2026 and 2027.
The Company's primary focus remains its core Modelling and Simulation
service-line. For this, the business continues to broaden its offering into
new therapeutic areas and drug development phases, as well as diversifying its
client base. Driven by an increase in presence at both physical key global
conferences and virtually through various online channels, the Company has
achieved a 5-fold increase in the total value of new client contract wins
compared with the previous year, whilst still nurturing and delivering on work
for established clients (i.e. Numab, Merck KGaA, CRUK, Bicycle Therapeutics).
The financial year ended 30 June 2024 has seen the Company win contracts
outside oncology, in areas such as dermatology, as well as in areas outside
its typical translational modelling focus, such as data science and target
identification (discovery phase).
Progress has also been made with the Company's Personalised Dosing Software
initiative. In November 2023, the Company was awarded a grant from Innovate UK
and the Office for Life Sciences to fund a project in collaboration with
Beyond Blood Diagnostics and Blackpool Teaching Hospital NHS Foundation Trust
to further develop its personalised dosing tool. Physiomics will receive
£137,376 of the £570,651 total award over the course of the project, which
is due to complete in October 2025. In June 2024, the Company also announced
the re-engagement of its US partner, DoseMe, resulting in an agreement to
implement its Personalised Dosing Software on the partner's newly updated
platform. Through the platform, the Company's dosing software will be made
available to selected DoseMe clients on a research basis with an objective of
adding paid for functionality later.
Finally, the Company continues to build out its second consultancy
service-line providing biostatistics solutions. During the year, both organic
and in-organic options to build this capability have been progressed in
parallel. Shortly following recruitment of a Head of Biostatistics in October
2023, the Company decided that alternative expertise was required and that
until a suitable replacement Head of Biostatistics can be identified,
experienced biostatistician contractors will be utilised. The Company now has
two senior biostatistics contractors and with their support, it has started
early engagement with prospective clients. In addition to organic development
of this service-line, a European-wide search for Biostatistics service
companies was conducted and the Company continues partnership and acquisition
discussions with a number of targets.
Financial Review
The Company's total income for the year ended 30 June 2024 of £570,561, which
represents a 6% decrease from the financial year ended 30 June 2023, despite
the Company having signed a record £1.1m of new contracts during the period.
The relatively long sale cycle of 6-18 months associated with modelling and
simulation services means that only approximately 44% of this total contract
value has been recognised as revenue in the financial year ended 30 June 2024,
however, as noted above, over £500k of carried forward contracts are expected
to be completed in the current financial year ending 30 June 2025.
The disappointing lack of revenue growth, combined with necessary investment
in operating model changes led to an increase in loss after taxation of 28% to
£609,352 (2023: £477,257).
At 30 June 2024, the surplus of shareholders' funds was £282,527 (30 June
2023: £531,720) of which cash and cash equivalents were £191,072 (30 June
2023: £416,592). However, this was just prior to the receipt of funds from
a fundraise completed on 4 July 2024 the gross proceeds of which were
£406,417.
Staff
As a result of a strategic review of its operating model, the Company has
completed a restructuring at both Board and operating level staff to better
position the business for growth. This includes the recruitment of Dr Peter
Sargent as Chief Executive Officer and Director, the decision to recruit
service-line leads and the redundancy of the Chief Scientific Officer role.
Staff utilisation rates are regularly reviewed as part of the Company's
workforce planning process and the Company would like to thank all its staff
for their continuing hard work and commitment during the year.
Outlook
The impact of the Company's strategic review of its operating model earlier in
the year and its increased investment in business development and marketing
activities has already resulted in key performance metrics hitting record
levels. As a result, the Company started the financial year ending 30 June
2025 with more than £500k of contracted revenue and momentum across its key
initiatives, such as its personalised dosing software and biostatistics
service line. The Company is actively seeking to build upon this solid base
and the Board looks forward to a successful financial year 2025.
Strategic Report
Principal activities
Physiomics is engaged in providing consulting services to pharmaceutical
companies and research institutes in the areas of outsourced quantitative
pharmacology, computational biology and biostatistics, using a combination of
industry standard technologies and its own proprietary technology platform,
Virtual Tumour™. In simple terms, this means helping drug developers
accelerate the development of their therapies towards market by supporting
them gain insights from their data that will better inform their research
decisions and support regulatory review.
Modelling and simulation using Virtual Tumour™ and other tools
The Company's focus is almost exclusively on the provision of modelling,
simulation and data science services, to support discovery, preclinical and
clinical drug development activities. The Company generates fee for service
revenues by providing insights to clients based on its modelling. The
Company utilises its proprietary Virtual Tumour™ predictive software,
industry standard tools (such as MATLAB), as well as developing bespoke models
using the R programming language. Extensions to Virtual Tumour™ have been
developed over the last few years to address specialist areas such as
immuno-oncology, DNA damage repair inhibitors, radiation therapy and other
areas of specialism. Projects often require a blend of several approaches to
deliver the optimal insights to clients. Client companies rely heavily on the
knowledge and experience of our team when evaluating data and devising new
programmes. The team's exposure to and expanding expertise in a wide range of
cancer treatment modalities, as well as in other therapeutic areas, is
attractive to new and existing clients.
The Company's expertise in discovery, preclinical and clinical phases of
pharmaceutical R&D, enables it to add value by helping companies to
efficiently derive insights from their data. This is achieved in a variety
of ways ranging from data analysis, visualisation and interpretation to
mathematical modelling of the performance of drugs. The result is that our
clients are in a better position to optimise the treatments they are
developing by selecting the right targets, drugs, dosages, timing and
combinations. We believe that we add particular value in early development
during the transition from pre-clinical to first-in-human studies. We believe
our experience and capabilities have been helpful in supporting clients in
identifying optimal clinical trial designs and justifying them to regulatory
authorities. In recent projects, the Company has been able to:
· Work with one biotech company to support the selection of its first
human dose for its lead product
· Work with another biotech company to model the PK of its drug,
confirming its potential advantages vs a competitor and contributing to its
eventual acquisition
· Support a big pharma company in optimising the balance of efficacy
and toxicity for complex combination cancer regimens
· Support another big pharma in exploring the mechanism of action of a
new immune-oncology drug targeting NK cells and creating a model to predict
its efficacy in preclinical and clinical settings
Biostatistics
In addition to its core modelling and simulation business, the Company has
started building capabilities in biostatistics, expanding its offering to
clients as part of a second service line. Biostatistics is an essential
component of clinical research, playing a pivotal role in the setup, conduct
and reporting of trials. It ensures studies are well designed, data are
accurately collected and analysed, and results are interpreted correctly.
The strategic rationale for developing Biostatistics service capabilities is
three-fold; firstly, the application of Modelling & Simulation and
Biostatistics in drug development overlaps, with often the output of the
former being a key input to the latter, allowing for natural follow-on work to
be offered to clients. Secondly, biostatistics is a necessary component to the
setup, conduct and reporting of any interventional clinical trial, from Phase
1 through to Phase 4, regardless of the therapeutic area. This opens up a
significant market for the Company, giving greater opportunity to scale.
Finally, with both service lines utilising the same business model and similar
expertise across mathematics and data science, this allows the Company to
operate flexible staffing across service lines to meet demand and maximise
utilisation.
Personalised Medicine
In addition to its consultancy service business, the Company has continued to
develop its technology for use in the field of personalised medicine.
Physiomics' approach is to apply its technology and expertise in interpreting
pre-clinical and clinical cancer data to help predict when to treat patients
and with what dose of drug. This approach relies on advanced analytical
techniques, many of which (such as machine learning and neural networks) are
in the field of artificial intelligence (AI).
To date this work has been funded by three Innovate UK grants and one NIHR
grant and has not drawn materially on shareholder funds. The Company completed
its observational "PARTNER" study at Portsmouth University Hospitals NHS Trust
which validated the ability of the software to predict levels of neutropenia.
Although this was felt to be of interest by clinicians, it was determined that
the software's use to guide the use of the expensive biological drug GCSF
(used to counteract neutropenia) might have a higher commercial value. Funded
through the latest Innovate UK grant award announced in November 2023, the
Company has kicked off project (PREDICT-ONC) in partnership with UK based
start-up Beyond Blood Diagnostics and Blackpool Teaching Hospital NHS
Foundation Trust to generate data that will help further validate the
software's use to guide dosing of GCSF. The project, which is due to run until
October 2025, will leverage Beyond Blood Diagnostics' miniature device that
allows blood count measurement in community and primary care settings.
During the year, the Company re-engaged with its US partner DoseMe and entered
an agreement to implement its personalised medicine software onto their newly
updated platform. Once implemented, the software will be initially made
available to a selection of DoseMe's clients for research purposes only, with
an objective of adding paid for functionality later.
Business Model
The Company's main commercial business is the provision of consulting services
which rely substantially on its Virtual Tumour™ pre-clinical and clinical
models that are proprietary to the Company. Physiomics works primarily on a
fee for service basis, although we are open to and continue to explore other
approaches including risk sharing and collaboration.
Although the Company continues to be open to alternative approaches, it is
envisaged that fee-for-service consulting will continue to be the main driver
of revenues in the short to medium term.
Key strengths
The consulting business is the core of the Company's commercial activity and
we believe that it is unique in a number of respects:
· Our expertise and tools can be applied across multiple therapeutic
areas. Our team has accumulated over 140 years of combined experience in the
development of new drugs and computational biology, and in particular of
quantitative pharmacology (essentially analysing how much drug to use and
trying to predict what effect it will have). Over the Company's lifetime it
has completed over 120 projects covering hundreds of targets, cell lines and
drugs. A large percentage of these projects have focussed on oncology
therapies; however, the Company is increasingly working in other therapeutic
areas;
· We use a proprietary in-house platform called Virtual Tumour™.
Although the team can take advantage of all commonly used modelling,
simulation and data analysis techniques in the cancer field, we also have
access to an internally developed platform that is uniquely useful when
considering combinations of cancer drugs (and most anti-cancer regimes
eventually involve using multiple agents simultaneously);
· We have particular expertise in the sourcing, curating and analysis
of healthcare data. Whether originating from clients or within the public
domain, our team comprises experts in data analysis, coding and machine
learning (AI) techniques that underpin the modelling activities we carry out
on behalf of our clients; and
· We provide a flexible and bespoke service. We differentiate ourselves
in the market by offering flexible, bespoke services that best answers our
client's questions and fits in with their timelines. Some competitor companies
often try and answer their clients' questions with off the shelf models and
offer less flexibility in their service.
Our strategy
Physiomics' strategy is to grow its consulting business across modelling &
simulation and biostatistics while actively applying this expertise in the
development of personalised medicine assets. Our main strategic aims are as
follows:
· Continue to expand and diversify our core consulting business
(Modelling & Simulation) both through repeat business and through the
acquisition of new clients;
· Expand our services into related fields, starting with biostatistics.
This will be the subject of further announcements later this calendar year;
· Supplement our core consulting revenues through grant funded
projects, especially in the field of personalised medicine (CRUK, Innovate UK,
NIHR etc);
· Develop new, complementary areas of business such as personalised
medicine and other service offerings in drug discovery and development that
can add long term value to the business.
Obligations under s172 of the Companies Act
The Directors are mindful of their obligations under s172(1) of the Companies
Act 2006 to act in good faith to promote the success of the Company for the
benefit of its members as a whole, and in doing so have regard (amongst other
matters) to the following:
Principle Company's actions
The likely consequences of any decision in the long term. The Company has a long term vision as set out in this report.
The interests of the Company's employees. The Company values its employees and implements training, offers development
opportunities and has in place appropriate incentive programs to support their
retention.
The need to foster the Company's business relationships with suppliers, The Company spends significant effort in reaching out to new and existing
customers and others. customers and in soliciting their feedback following engagements.
The impact of the Company's operations on the community and the environment. The Company's operations have minimal impact on the community and environment.
The desirability of the Company maintaining a reputation for high standards of The Company maintains a high standard of business ethics, complying with the
business conduct. QCA code for corporate governance.
The need to act fairly as between members of the Company. The Company treats all members equitably and attempts to ensure a timely and
accurate flow of information to all members.
Review of Business
The Company is principally engaged in providing consulting services to
pharmaceutical companies in the areas of outsourced quantitative pharmacology
and computational biology.
· Total income (revenue and grant income) decreased 6% to £570,561
(2023: £605,734)
· The operating loss increased 17% to £670,816 (2023: £573,733)
· The loss after taxation increased 28% to £609,352 (2023: £477,257)
· At 30 June 2024, the surplus of shareholders' funds was £282,527 (30
June 2023: £531,720)
· Cash and cash equivalents at 30 June 2024 of £191,072 (30 June 2023:
£416,592)
Consulting Business
Physiomics' consulting business is at the heart of its offering to clients.
The Company uses its proprietary Virtual Tumour™ software platform but also
develops mathematical models from scratch and leverages models in the public
domain. It is a combination of our technology and the oncology experience of
our team that enables us to be able to deliver clients both a targeted product
offering that meets their needs whilst at the same time delivering value for
money. We believe that we are unique in offering a combination of:
· Deep experience and knowledge of oncology;
· An exclusive focus on model-based approaches to supporting our
clients' R&D projects; and
· A level of flexibility and responsiveness that is not typically found
in larger organisations.
We have continued to develop our brand through a variety of marketing and
business development activities including:
· Engagement of external social media and marketing expertise to advise
and support our Head of Business Development in the execution of key marketing
initiatives.
· Continued use of social media to engage with current and potential
new clients;
· Increased attendance at key conferences such as this year at
AACR-EORTC where we presented a poster in collaboration with Ankyra,
sponsoring the World ADC event, BIOEurope, Bio International and
Immuno-oncology UK; and
· Further development of our website to refine our messaging and
include case studies based on actual client projects.
The Company continues to be successful in attracting repeat business this year
from clients such as Merck KGaA, Numab Therapeutics and Bicycle Therapeutics,
whilst also driving business with new clients.
The Company's clients in this financial year have been located in the USA, UK,
EU and Switzerland. In terms of the mix of work, we continue to work across
the full spectrum of R&D from discovery to development. Even though our
primary focus is still on translational projects involving assets entering
clinical development for the first time, we are also delivering on projects
supporting R&D activities as far upstream as discovery in areas such as
target identification, as well as projects outside of oncology, such as
dermatology and immunology. We are also supporting clients across a wide array
of disease modalities, including but not limited to antibody drug conjugates,
radiopharmaceuticals, DNA damage repair agents and combination therapies.
Personalised Medicine
The personalised medicine and digital health space continues to generate
significant interest from both investors and healthcare systems. Many
start-ups in this area focus on the use of genetic markers or the
pattern-recognition capabilities of artificial intelligence applications.
However, we believe that there is a significant opportunity in the analysis of
existing clinical data to identify better ways to treat patient using existing
drugs and procedures.
The Company has developed a tool for personalised dosing, funded mainly by
three Innovate UK and one NIHR grant as noted above.
Strategic and financial performance indicators
The Company is focused on the creation of long-term value for its
shareholders.
The Directors consider that the key performance indicators are those that
communicate the financial performance and strength of the Company as a whole,
these being revenue, profitability, and shareholders' funds, as well as
indicators of future performance, being value of new contracts won, contracted
future revenue and pipeline value.
Total revenues during the last five financial years (year ended June 2020 to
year ended June 2024) exceed the total revenues of the first seventeen
accounting periods (from incorporation to June 2019).
Considering performance trends across periods, total income for the past 3
financial years (year ended June 2022 to year ended June 2024) has averaged
£692k annually, compared with £785k for the 3 years before that (year ended
June 2019 to year ended June 2021) and £360k for the 3 years before that
(year ended June 2016 to year ended June 2018). The recent performances of
FY23 and FY24 with delayed client projects in both periods have caused the
3-year average trend to pause its upward growth.
Similarly, loss after tax for the past 3 financial years (year ended June 2022
to year ended June 2024) has averaged £447k, compared with an average of
£128k for the 3 years before that (year ended June 2019 to year ended June
2021). These increases result mainly from increased investment in technical
and business staff intended to drive the Company's key strategic initiatives
and increase revenues over time.
Year-end net assets at 30 June 2024 of £282k have fallen from their year-end
peak at June 2020 of £1,315k, primarily due to contracting delays affecting
income, along with increased investment in people and technology needed to
drive future growth.
The financial year ending 30 June 2024 resulted in a record year for the total
value of new contracts won (more than £1.1m), a peak unweighted pipeline
value of more than £1.7m and a record level (based on last six years of data)
of contracted revenue to be taken forward into the following year (more than
£500k).
Principal Risks
The Company faces a number of risks and maintains a risk register that
identifies specific risks, their potential impact, their likelihood and
mitigating actions. This register is updated as required and on an annual
basis as a minimum. Selected key risks are addressed below.
Risk Description Mitigation
Loss of major customer The business has a high dependence on repeat business. This leads to the For the year ending 30 June 2024, new contracts from repeat clients
risk that these existing customers could significantly reduce or cancel its contributed to 74% of the value of all contracts won in that period, with 26%
contracts with the Company. of the value coming from contracts signed with new clients. The contracts
resulting from repeat business however came from four different clients. The
total value of new client contracts has increased 5-fold from the previous
year, financial year ending 30 June 2023.
Competition Physiomics operates in a competitive environment which could lead to pricing Our focus on oncology and the way in which we employ Virtual Tumour™
pressure. Whilst the business uses its own proprietary technology a requires a combination of technology and specialised skills, which we believe
competitor could attempt to replicate its Virtual Tumour™ technology. is hard to replicate.
We continually develop our model to improve the scope and applicability of the
technology, adding further value to our clients and differentiating our
service from our competitors.
In addition, in the last four years we have developed a personalised medicine
offering that we are currently seeking to commercialise and which would help
reduce dependency on our consulting business.
We are in parallel seeking other ways in which to broaden the base of
activities of the Company, including the expansion of its consulting business
into the field of biostatistics. It is our intention in the future to develop
further service-lines beyond Biostatistics.
Personnel & skills The success and future growth of the Company is in part dependent on the The Company seeks to recruit, develop, and manage talent on a continuous basis
continued performance and delivery of certain Directors, managers, key staff and has built a network of contracted specialists who can provide additional
and contractors. The Company operates in a highly specialised field where resource when required.
there is strong competition for required skills and talent.
In order to attract the best talent, the Company offers competitive packages
Key personnel leaving the Company could lead to a short-term reduced capacity to its staff which includes a share option scheme, private medical insurance
to service client projects. and flexible working. A collegiate working environment and opportunities for
personal and professional development also help to maintain staff
satisfaction.
Over the course of this financial year, the Company restructured its
management team, taking on a new CEO and terminating the CSO position in order
to focus resource on revenue generating activities.
Financial The financial risks faced by the Company include the ability to cover working The Board addresses financial uncertainties by monitoring actual performance
capital needs, raise sufficient funds to support the Company through to against internal projections and responding to significant variances. The
profitability and failure to secure further contracts. Company also employs tight cost controls across the business and has from time
to time raised funds from investors.
The process of winning major contracts is typically protracted and the Company
operates in a competitive environment. This means the Company often faces The Company seeks to ensure cash availability for working capital purposes and
significant uncertainties in its cash flow. to reduce credit risk arising from cash and short-term deposits with banks and
other financial institutions by holding deposits with an institution with a
medium grade credit rating or better.
In July 2024 the Company completed a fundraise of £406k gross to support
expansion of the core modelling and simulation service-line, continued
development of biostatistics capability and continued development of its
personalised medicine software.
Regulation Changes The Company's customers are predominately pharmaceutical companies who require The Company regularly reviews regulations changes through proactive
outsourced quantitative pharmacology and computational biology services. discussions with key industry officials, professional advisors and regulatory
There is a risk that the business model is impacted by future changes in bodies where appropriate.
regulations in the medical and pharmaceutical industry.
Major agencies such as the FDA are actively promoting the use of modelling and
simulation and issue advisory papers which set out their thinking.
Systems & infrastructure The Company is dependent on its IT technical infrastructure and systems for Continuity of access to data and integrity of data is maintained through the
the management of its core operations and research and development programmes. implementation of a system of data storage, offsite backup and monitoring of
key coding and modelling data. The Company maintains CyberEssentials
accreditation of its systems hardware and processes in order to increase
resilience vs cyber related attacks and risks.
Prevailing economic conditions The biotech market has seen a significant reduction in funding from both Due to the drop in revenues in the financial year 2023, the Company is still
public and private sources since the beginning of 2022. Publicly listed to recover back to revenue levels seen previously. This primarily is down to
biotech companies share prices have come under some pressure as a result and the long sale cycles (12+ months) typical of such service business. Therefore,
our clients' ability to raise capital may be impacted by this as well as efforts made during the year ending June 2022 and start of the following year
adverse sentiment related to energy prices and the war in Ukraine. are only just converting into contracts. This is evidenced by this year being
a record year for total value of contracts won, whilst only approx. 44% of
this total contract value materialising into recognised revenue for the year.
Directors' Report
The Directors submit their report and the audited financial statements of
Physiomics Plc for the year ended 30 June 2024.
Results
There was a loss for the year after taxation amounting to £609,352 (2023 loss
after tax: £477,257). In view of accumulated losses, and given the stage of
the Company's development, the Directors are unable to recommend the payment
of a dividend.
Directors
The Directors who served during the year were:
Dr J S Millen
Dr C D
Chassagnole
(Resigned 31 May 2024)
Dr T H Corn
Mr S Kumar
Dr P J Sargent
(Appointed 22 January 2024)
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by United Kingdom (UK). Under company law the
Directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Company and
the financial performance and cash flows of the Company for that year.
The financial statements are required by law, and IFRS as adopted by the UK,
to give a true and fair view of the state of affairs of the Company.
In preparing the Company financial statements, the Directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether in preparation of the financial statements the Company has
complied with IFRS as adopted by the UK, subject to any material departures
disclosed and explained in the financial statements; and
d. prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are also responsible for the maintenance and integrity of the
Physiomics Plc website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Substantial shareholdings
The Company has been informed, based on a beneficial ownership search carried
out by its registrar, as at 16 August 2024, there are no individual
shareholders who hold an interest of more than 3% in the issued ordinary
shares of the Company.
On 16 August 2024, Dr Jim Millen held 1,884,393 ordinary shares a holding
percentage of 0.93%.
Directors' remuneration
Details of Directors' remuneration in the year ended 30 June 2024 is set out
below:
Emoluments Bonus Benefits Pension Contributions Total 2024 Total 2023
£ £ £ £ £ £
Dr J S Millen 61,361 - 2,245 3,827 67,433 138,606
Dr C D Chassagnole 69,117 - 1,667 9,681 80,465 87,477
Mr S Kumar 20,000 - - - 20,000 23,667
Dr T H Corn 20,000 - - - 20,000 20,000
Dr P J Sargent 72,946 - - 5,800 78,746 -
Total 243,424 - 3,913 19,308 266,644 269,750
Corporate governance
Physiomics Plc has chosen to comply with the Quoted Companies Alliance ("QCA")
Corporate Governance Code. High standards of corporate governance are a
priority for the Board, and details of how Physiomics addresses key governance
principles defined in the QCA code are set out below.
1. Establish a strategy and business model which promote long-term
value for shareholders
The Company's business model is focused on helping big pharma and biotech
clients to reduce costs and optimise outcomes of their oncology R&D though
modelling and analysis of client and other data. In particular, the Company
leverages its own in-house technology, Virtual Tumour™, which is
specifically focused on predicting the effects of combination drug
treatments. The Company operates mainly on a fee for service basis but is
also open to other arrangements such as risk-based milestones and licensing
although these have not formed a material part of the Company's revenues
historically. In addition to its commercial business the Company engages in
grant driven projects which do not generate profit but which provide valuable
"paid for" R&D which can then be leveraged through the Company's
commercial activities. The Company aims to deliver shareholder value by
increasing the number and value of its commercial clients and by increasing
the amount and value of grant projects and by investigating the commercial
potential of new areas such as personalised medicine. The Company believes
that its strategy will be effective in helping it to meet challenges such as
competitive pressure and the rapid pace of technological change in the
pharmaceutical industry.
2. Seek to understand and meet shareholder expectations
The Company maintains a dedicated email address which investors can use to
contact the Company which is prominently displayed on its website together
with the Company's address and phone number. The Company holds an Annual
General Meeting ("AGM") to which all members are invited and during the AGM,
time is set aside specifically to allow questions from attending members to
any Board member. As the Company is too small to have a dedicated investor
relations department, the CEO is responsible for reviewing all communications
received from members and determining the most appropriate response. In
addition to these passive measures, the CEO typically engages with members
through a roadshow once or twice each year and the Company subscribes to the
InvestorMeetCompany online investor relations platform.
3. Take into account wider stakeholder and social responsibilities
and their implications for long-term success
In addition to members, the Company believes its main stakeholder groups are
its employees and clients. The Company dedicates significant time to
understanding and acting on the needs and requirements of each of these groups
via meetings dedicated to obtaining feedback (see principle 2 above).
In addition, the Company has a close relationship with the University of
Oxford and the Oxford University Hospitals NHS Foundation Trust. Prof Mark
Middleton, who leads oncology research at these institutions is an advisor to
the Company and has been a collaborator on several grant projects. The
relationship with the Company is mutually beneficial as the University and NHS
Trust also has a mandate to encourage and collaborate with local businesses.
With regards corporate social responsibility, there is little direct impact of
the Company's day-to-day activities however the Company is proud that its
overarching goal is to support the treatment of cancer, a disease that has a
profound impact on society.
4. Embed effective risk management, considering both opportunities
and threats, throughout the organisation
The Company maintains a register of risks across several categories including
personnel, clients, competition, finance, technical and legal. For each risk
we estimate the impact, likelihood as well as identify mitigating
strategies. This register is reviewed periodically as the Company's
situation changes and as a minimum annually. During such reviews, each risk
category is considered by the Directors with a view to understanding (i)
whether the nature, impact or likelihood of any risks has changed, (ii)
whether the mitigating actions taken by the Company should change as a result
and (iii) whether any new risks or categories of risk have arisen since the
last review. The Company's risk register is reviewed by its auditor as part
of its annual audit process, providing a degree of external assurance as to
the suitability of its risk management strategy.
5. Maintain the board as a well-functioning, balanced team led by
the Chairman
The Board of Physiomics Plc currently comprises one Executive Director, two
independent Non-Executive Directors, one Non-Executive Chairman and a
secretary (non-director). The Board meets at least monthly for one day
(except August) and all current Board members have attended all Board meetings
in the current financial year (since their appointment). Each Director is
re-elected to the Board on a rotating basis by a vote of members at the
Company's AGM.
Executive Directors are employees of the Company. Non-Executive Directors'
contracts require that directors dedicate a minimum of one day per month. In
addition, non-executive directors may provide additional paid consulting
services at rates specified in their contracts.
Following a period when Dr Jim Millen has fulfilled the roles of both
Executive Chairman and CEO, there is now a more balanced ratio of executive
and non-executives on the Company's Board. This also addresses the guidance in
the QCA Code regarding separation of the roles of Chairman and Chief Executive
Officer.
6. Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities
The current Directors of the Company, together with their experience, skills,
and personal qualities relevant to the Company's business are outlined below:
· Dr Peter Sargent (Chief Executive Officer) joined Physiomics in
September 2023, initially joining the Board as Chief Operating Officer before
transitioning to Chief Executive Officer in January 2024. He brings over 20
years of experience in life sciences, leading R&D and commercial teams
across drug and diagnostic development businesses. Prior to joining
Physiomics, Dr Sargent held a senior management role at global consultancy
business Syneos Health Inc (NASDAQ: SYNH), leading large teams of
professionals and servicing a variety of clients in the biopharmaceuticals
space. Among his earlier roles, Dr Sargent has also been Head of Business
Development for the UK's National Institute for Health and Care Research
(NIHR), leading a team supporting global life science businesses access to
funding and research infrastructure in the UK. He holds a PhD in Biochemistry
from King's College London.
· Dr Jim Millen (Non-Executive Chairman) joined Physiomics in April
2016, bringing over 15 years' experience in pharmaceuticals and biotechnology
gained at a number of blue-chip global companies as well as smaller UK-based
organisations. At Allergan, Jim was responsible for corporate development in
its Europe, Africa and Middle East region where he was pivotal in expanding
the Company's geographical footprint before moving to a senior role
responsible for commercial strategy and market access. Prior to that, at GSK,
Jim held business development roles of increasing responsibility including
within the Company's innovative Centre of Excellence for External Drug
Discovery. Jim has also supported a number of smaller companies in fund
raising and strategic partnering activities. Over the course of his career he
has completed an array of deals worth many hundreds of millions of dollars,
spanning licencing, acquisition, divestment, development and
commercialisation. Jim studied medicine at Queens' College, Cambridge
University and qualified as a doctor from the London Medical School. He holds
an MBA from INSEAD. Jim's ability to develop and grow businesses and drive
towards ambitious goals is of great value in his role as Non-Executive
Chairman.
· Dr Tim Corn (Non-Executive Director) qualified in medicine at King's
College Hospital and, after becoming honorary Consultant and Senior Lecturer,
joined the pharmaceutical industry in 1983. He has held senior positions in
both big and small pharma as well as at the MHRA and became CMO of several
small but highly successful venture-backed companies, such as EUSA Pharma and
Zeneus Pharma. He has played a key role in more than twenty regulatory
approvals in the USA and Europe, is the author of more than forty scientific
publications, and was elected Fellow of both the Faculty of Pharmaceutical
Medicine and the Royal College of Psychiatrists.
· Mr Shalabh Kumar (Non-Executive Director) is a proven business
executive with over 30 years of experience within the life sciences consulting
and services industry. Shalabh co-founded, and subsequently was the Chief
Executive Officer of Kinapse, a life sciences consulting and outsourcing
service provider. The company was later acquired by Syneos Health® (Nasdaq:
SYNH) after growing to employ over 600 people across UK, India and US. Prior
to that he has worked in Accenture, Gillette (Procter & Gamble) and
Unilever. More recently, Shalabh has been working as an independent strategy
consultant and angel investor in the life sciences industry, working with
biopharmaceutical companies, life sciences services and technology companies
and private equity firms. Recent roles include Chairman of the Board of
Clustermarket Ltd, a lab software start-up; independent strategy consultant to
the life sciences R&D group of Accenture plc (NYSE: ACN); and Global Head
of Services at Navitas Life Sciences, a technology-backed life sciences
contract research organisation. Shalabh is also Chairman of Pharmalancers Ltd,
a UK-based life sciences services tech start-up.
· Anthony Clayden, of Strategic Finance Director Ltd (Company
Secretary) is Head of Finance and Company Secretary with over 24 years'
experience directing or advising over 50 high growth potential businesses of
differing size and complexity and brings broad experience of strategic,
operational, and financial matters. His career encompasses numerous businesses
in the life sciences and healthcare sector including 6 years as Chief
Financial Officer of AIM quoted Futura Medical Plc where he was involved in
its IPO and a series of placings. Previously, Anthony worked with KPMG and PwC
on a range of corporate finance matters including fundraisings, company sales
and acquisition advice. Anthony has a B.Sc. (Hons) in Natural Sciences from
Durham University and is a Qualified Chartered Accountant. Although Anthony
is not a Director of the Company, he provides invaluable advice on all matters
financial.
The Company holds annual briefings for the Board covering regulations that are
relevant to their role as Directors of an AIM-quoted company.
The Company has not to date sought external advice on keeping Director's
skills up to date but believes that their blend of past and ongoing experience
provides them with the relevant up to date skills needed to act as board
members for a small company. The Company keeps close contact with its NOMAD
and nominated broker on all such issues
7. Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
Evaluation of the performance of the Board has historically been implemented
in an informal manner. The Board will review and consider the performance of
each Director at or around the time of the Company's annual general meeting.
On an ongoing basis, Board members maintain a watching brief to identify
relevant internal and external candidates who may be suitable additions to or
backup for current Board members, however, the Directors consider that the
Company is too small to have either an internal succession plan and that it
would not be cost effective to maintain an external candidate list prior to
the need arising.
8. Promote a corporate culture that is based on ethical values and
behaviours
The Board believes that the promotion of a corporate culture based on sound
ethical values and behaviours is essential to maximise shareholder value.
The Company maintains and annually reviews a handbook that includes clear
guidance on what is expected of every employee and officer of the Company.
Adherence of these standards is a key factor in the evaluation of performance
within the Company, including during annual performance reviews. In
addition, staff matters are a standing topic at every Board meeting and the
CEO reports on any notable examples of behaviours that either align with or
are at odds with the Company's stated values. The Directors believe that the
Company culture encourages collaborative, ethical behaviour which benefits
employees, clients and shareholders. The Directors further believe that all
employees and consultants have worked in line with the Company's values during
this financial year.
9. Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
The Board of the Company, together with its sub-committees, is responsible for
the following:
· The setting of and execution of the overall strategy of the Company;
· The setting of financial targets and monitoring of the Company's
performance vs these targets on a monthly basis;
· The preparation and approval of interim and final results for the
Company;
· The commissioning and oversight of the audit of the Company's full
year results;
· The preparation and approval of the Company's Annual Report;
· The preparation of resolutions to be voted upon in the Company's
Annual General Meeting;
· Approval of regulatory communications;
· The setting of guidelines for remuneration of employees, Directors
and consultants, including where appropriate long-term incentives such as
share option schemes;
· The approval and oversight of any changes to the capital structure of
the Company such as the raising of capital through placings;
· The identification, evaluation and monitoring of key strategic risks
to the Company's business; and
· The employment of key officers and Directors of the Company (the
latter as recommendations to be voted on at the Company's AGM).
The key Board roles are as follows:
· Chairman: The primary responsibility of the chair is to lead the
Board effectively and to oversee the adoption, delivery and communication of
the Company's corporate governance model. The chair is also responsible for
making sure that the Board agenda concentrates on the key issues, both
operational and financial, with regular reviews of the Company's strategy and
its overall implementation
· CEO: Charged with the delivery of the business model within the
strategy set by the Board. Works with the other directors in an open and
transparent way. Keeps the Board up-to-date with operational performance,
risks and other issues to ensure that the business remains aligned with the
strategy
The Board has two sub-committees appointed by the Board of Directors. They
are as follows:
· Audit Committee: The Committee meets to consider matters relating to
the Company's financial position and financial reporting. The Committee
reviews the independence and objectivity of the external auditors, Shipleys
LLP, as well as the amount of non-audit work undertaken by them, to satisfy
itself that this will not compromise their independence. Details of the fees
paid to Shipleys LLP during the current accounting period are given in the
notes to the accounts. The Audit Committee currently comprises Dr Peter
Sargent and Mr Shalabh Kumar, with Strategic Finance Director Ltd (Company
Secretary) attending as secretary.
· Remuneration Committee: The Remuneration Committee has been
established primarily to determine the remuneration, terms and conditions of
employment of the Executive Directors of the Company. Any remuneration issues
concerning Non-Executive Directors are resolved by this Committee and no
Director participates in decisions that concern his own remuneration. The
Remuneration Committee comprises Dr Tim Corn and Dr Jim Millen, with Strategic
Finance Director Ltd (Company Secretary) attending as secretary
Finally, the Company gives regular consideration to how best to evolve its
governance framework as it grows. It currently does not have a nominations
committee.
10. Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
On the Company's website shareholders can find all historical RNS
announcements, interim reports and annual reports. Annual Reports and Annual
General Meeting Circulars are made available to all registered shareholders or
nominees via electronic shareholder communication system managed by the
Company's registrar and results of Annual General Meeting votes are also
published on the Company's website. The Company's website allows
shareholders and other interested parties to sign up to a mailing list to
enable them to directly receive regulatory and other Company releases. As
described earlier, the Company also maintains email and phone contacts which
shareholders can use to make enquiries or requests.
Environmental and Social Governance
The Company has a relatively small environmental footprint and implements
various policies to ensure it is kept to a minimum, including:
· Use of modular office space with services shared with other occupiers
· Adoption of flexible "hot-desking", especially in light of new more
flexible home/ office working models post-COVID
· Recycling of office waste where possible
The activities of the Company are targeted at supporting companies developing
drugs and therapies to fight cancer and in addition, the computer-based
modelling we undertake serves to reduce the volume of animal testing needed in
developing such therapies.
Finally, in terms of diversity and inclusion, of seven employees, five are
women and two are non-UK nationals.
Post balance sheet events
On 9 July 2024, a date which is after the reporting date but prior to the date
of signing these financial statements, the Board allotted 67,736,240 ordinary
shares. All shares were placed at £0.006 per share, with gross proceeds
raised of £406,417.
There were no additional post reporting events to note.
Statement as to disclosure of information to auditors
The Directors in office on 26 September 2024 have confirmed that, as far as
they are aware, there is no relevant audit information of which the auditors
are unaware. Each of the Directors have confirmed that they have taken all
the steps that they ought to have taken as Directors in order to make
themselves aware of any relevant audit information and to establish that it
has been communicated to the auditors.
Going concern, responsibilities and disclosure
After making appropriate enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to
adopt the going concern basis in preparing the financial statements.
Internal controls and risk management
The Board is responsible for the Company's system of internal control and risk
management and for reviewing its effectiveness. The Directors have a
reasonable expectation that the Company will safeguard the Company's assets.
The risk management process and internal control systems are designed to
manage rather than eliminate the risk of failing to achieve business
objectives and can only provide reasonable, but not absolute, assurance
against material misstatement or loss. The key features of the Company's
system of internal control are as follows:
· a clearly defined organisational structure and set of objectives;
· the executive Directors play a significant role in the day to day
operation of the business; and
· detailed monthly management accounts are produced for the Board to
review and take appropriate action.
Annual General Meeting
The Company values the views of its shareholders and recognises their interest
in the Company's strategy, performance and the ability of the Board. The AGM
provides an opportunity for two-way communication and all shareholders are
encouraged to attend and participate. Separate resolutions will be put to
shareholders at the AGM, giving them the opportunity to discuss matters of
interest. The Company counts all proxy votes and will indicate the level of
proxies lodged on each resolution, after each has been dealt with on a show of
hands.
The Company intends to hold an in-person (rather than online) AGM this year,
further details of which will be announced shortly.
Independent Auditors' Report to the Members of Physiomics Plc
Opinion
We have audited the financial statements of Physiomics Plc for the year ended
30 June 2024 which comprise the income statement, the statement of
comprehensive income, the statement of financial position, the cash flow
statement, the statement of changes in equity and the related notes. The
financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the United Kingdom.
In our opinion:
· the financial statements give a true and fair view of the state of
the Company's affairs as at 30 June 2024 and of its loss for the year then
ended;
· the financial statements have been properly prepared in accordance
with IFRSs as adopted by the United Kingdom; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the company's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are those that had
the greatest effect on our audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team.
Risk How the Scope of our audit responded to the risk
Management override of controls
Journals can be posted that significantly alter the Financial Statements and We examined journals posted around the year end, specifically focusing on
give rise to fraud and/or material misstatement in the financial statements areas which are more easily manipulated such as accruals, prepayments,
investment valuation and the bank reconciliation.
Going Concern We reviewed the Directors' assessment of the business remaining a Going
Concern. We compared this assessment to our own understanding of the risks,
There is a risk that the Company is not a going concern. and the nature of the Company's operations and customer base. We then
conducted a review of going concern in respect of reviewing forecasts and
current trading performance, and carrying out stress testing. The work
undertaken considered a period of at least 12 months from the date of
approving these financial statements.
The disclosures in the financial statements adequately reflect the Directors'
conclusions around the going concern assumption remains appropriate
Fraud in Revenue Recognition
There is a risk that revenue is materially understated due to fraud. Income was tested on a sample basis from contracts. No evidence of fraud or
other understatement was identified.
Accounting Estimates
Potential risk of inappropriate accounting estimates giving rise to All areas were examined to identify any potential accounting estimates. These
misstatement in the accounts. estimates were then reviewed and tested for adequacy.
Overstatement of Administrative Expenses
There is a risk that the Company's administrative expenses are overstated. A proof in total calculation and substantive testing were both undertaken and
no evidence of overstatement was identified.
Grant Income
There is a risk that grant income may be materially misstated. Grant income was reviewed and a sample basis from contracts. No evidence of
misstatement was identified.
Trade Debtors The trade debtors were reviewed and all relevant amounts were recovered after
the year end and by time of this audit report.
There is a risk that the trade debtors are not recoverable
R&D Tax Credit The assumptions and calculations behind the R&D Tax Credit were reviewed
and tested and agree that they are in line with current guidance.
There is risk that the Research and Development Tax Credit is overstated and
not recoverable from HMRC
Our audit procedures relating to these matters were designed in the context of
our audit of the Financial Statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Our application of materiality
We define materiality as the magnitude of misstatement in the Financial
Statements that of materiality makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We use
materiality both in planning and in the scope of our audit work and in
evaluating the results of our work.
We determined materiality for the Company to be £17,117. Performance
materiality was determined for the company to be £11,982 and triviality was
determined for the company to be £856 We agreed with the Audit Committee
that we would report to them all audit differences in excess of 5% of
materiality, as well as differences below that which would, in our view,
warrant reporting on a qualitative basis. We also report to the Audit
Committee on disclosure matters that we identified when assessing the overall
presentation of the Financial Statements.
An overview of the scope of our audit
An audit involves obtaining evidence about the amounts and disclosures in the
Financial Statements sufficient to give reasonable assurance that the
Financial Statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the Directors; and the overall
presentation of the Financial Statements. In addition we read all the
financial and non-financial information in the Annual Report to identify
material inconsistencies with the audited Financial Statements and to identify
any information that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material misstatement
or inconsistencies we consider the implications for our report.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns adequate
for our audit have not been received from branches not visited by us; or
· the financial statements are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out
on page 17, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Our responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the legal and regulatory frameworks
that are applicable to the Company and determined the most significant are
those that relate to the reporting framework (IFRS, the Companies Act 2006))
and the relevant tax compliance regulations in which the Company operates.
· We understood how the Company is complying with those frameworks by
making enquiries on the management and those responsible for legal and
compliance procedures. We corroborated our enquiries through our review of
board minutes and any correspondence received from regulatory bodies.
· We assessed the susceptibility of the Company's financial statements
to material misstatement, including how fraud might occur by enquiring with
management during the planning, fieldwork and completion phase of our audit.
We considered the controls that the Company has established to address risks
identified, or that otherwise prevent, deter and detect fraud and how
management monitors those controls. Where the risk was considered to be
higher, we performed audit procedures to address each identified fraud risk
including revenue recognition. These procedures included testing manual
journals and were designed to provide reasonable assurance that the financial
statements were free from fraud or error.
· Based on this understanding we designed our audit procedures to
identify non-compliance with such laws and regulations. Our procedures
involved journal entry testing, with a focus on manual journals and journals
indicating large or unusual transactions based on our understanding of the
business; enquiries of the management and focus testing.
An auditor conducting an audit in accordance with ISAs (UK) is responsible for
obtaining reasonable assurance that the financial statements taken as a whole
are free from material misstatement, whether caused by fraud or error and in
our audit procedures described above. Owing to the inherent limitations of an
audit, there is an unavoidable risk that some material misstatements of the
financial statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK).
In our opinion, based on the work undertaken in the course of our audit:
· The information given in the strategic report and the director's
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· The strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
As part of an audit in accordance with ISAs (UK), we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
internal control.
· Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
director.
· Conclude on the appropriateness of the director's use of the going
concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast
significant doubt on the company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the company
to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Income Statement for the year ended 30 June 2024
Year Year
ended ended
30 June 30 June
2024 2023
Notes £ £
Revenue 3 543,250 597,354
Other operating income 3 27,311 8,380
Total income 570,561 605,734
Net operating expenses (1,241,377) (1,179,467)
Operating loss 4 (670,816) (573,733)
Finance income 7 2,095 1,724
Finance costs 8 (33) -
Loss before taxation (668,754) (572,009)
Income tax income 9 59,402 94,752
Loss for the year attributable to equity shareholders 25 (609,352) (477,257)
Earnings per share (shown in pence) 10
Basic and diluted (0.45)p (0.49)p
Statement of Comprehensive Income
Year ended 30 June Year ended 30 June
2024 2023
£ £
Loss for the year (609,352) (477,257)
Other comprehensive income - -
Total comprehensive income/ (expense) for the year (609,352) (477,257)
Attributable to:
Equity holders (609,352) (477,257)
Statement of Financial Position as at 30 June 2024
Non-current assets 2024 2023
Notes £ £
Intangible assets 12 4,379 5,479
Property, plant and equipment 13 16,829 7,757
Other receivables 14 - 180
21,208 13,416
Current assets
Trade and other receivables 14 210,323 244,385
Cash and cash equivalents 191,072 416,592
401,395 660,977
Total assets 422,603 674,393
Current liabilities
Trade and other payables 18 106,002 122,656
Deferred revenue 19 34,074 20,017
140,076 142,673
Total liabilities
Net current assets 261,319 518,304
Net assets 282,527 531,720
Equity
Called up share capital 22 1,435,287 1,283,096
Share premium account 23 6,122,115 5,936,478
Other reserves 24 151,387 147,651
Retained earnings 25 (7,426,262) (6,835,505)
Total equity 282,527 531,720
Statement of Changes in Equity for the year ended 30 June 2024
Share capital Share Other Reserves Profit and loss reserves Total
premium
account
Notes £ £ £ £ £
Balance at 1 July 2022 1,283,096 5,936,478 281,660 (6,526,427) 974,807
Year ended 30 June 2023:
Loss and total comprehensive income for the year - - - (477,257) (477,257)
Transfer to other reserves 23 - - 34,170 - 34,170
Other movements - - (168,179) 168,179 -
Balance at 30 June 2023 1,283,096 5,936,478 147,651 (6,835,505) 531,720
Year ended 30 June 2024:
Loss and total comprehensive income for the year
- - - (609,352) (609,352)
Issue of share capital 23 152,191 185,637 - - 337,828
Transfer to other reserves - - 22,331 - 22,331
Other movements - - (18,595) 18,595 -
Balance at 30 June 2024 1,435,287 6,122,115 151,387 (7,426,262) 282,527
Cash Flow Statement for the year ended 30 June 2024
2024 2023
Notes £ £ £ £
Cash flows from operating activities
Cash absorbed by operations 32 (642,852) (372,422)
Interest paid (33)
Tax refunded 94,752 105,835
Net cash outflow from operating activities
(548,133) (266,587)
Investing activities
Purchase of intangible assets - (3,350)
Purchase of tangible fixed assets (17,310) (3,286)
Proceeds on disposal of tangible fixed assets - 416
Interest received 2,095 1,724
Net cash used in investing activities (15,215) (4,495)
Financing activities
Proceeds from issue of shares 380,477 -
Share issue costs (42,649) -
Net cash generated from financing activities
337,828 -
Net decrease in cash and cash equivalents
(225,520) (271,082)
Cash and cash equivalents at beginning of year
416,592 687,674
Cash and cash equivalents at end of year 191,072 416,592
Notes to the Financial Statements
1 Accounting policies
Company information
Physiomics PLC is a Company limited by shares incorporated in England and
Wales. The registered office and principal place of business is Bee House,
140 Easten Avenue, Milton Park, Abingdon, OX14 4SB. The Company's ordinary
shares of 0.4p each are admitted to trading on the AIM market of the London
Stock Exchange plc.
1.1 Accounting convention
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom
and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS, except as otherwise stated.
The financial statements have been prepared on the historical cost basis. The
principal accounting policies adopted are set out below.
1.2 Application of new and revised International Financial Reporting
Standards ("IFRSs")
The following new standards, and amendments to standards, have been adopted by
the group for the first time during the year commencing 1 July 2023
- Amendments to IAS 8 - Definition of Accounting Estimates.
Standards, amendments and interpretations to existing standards that are not
yet effective and have not been early adopted by the group and/or company
At the date of authorisation of these financial statements, the Directors have
reviewed the standards in issue by the International Accounting Standards
Board ("IASB") and IFRIC, which are effective for annual accounting periods
ending on or after the stated effective date. In their view, none of these
standards would have a material impact on the consolidated financial
statements.
1.3 Going concern
The accounts have been prepared on the going concern basis. The Company
primarily operates in the relatively defensive pharmaceutical industry.
The Company had £191,072 of cash and cash equivalents as at 30 June 2024
(2023: £416,592).
The Board operates an investment policy under which the primary objective is
to invest in low-risk cash or cash equivalent investments to safeguard the
principal.
The Company's projections, taking into account anticipated revenue streams,
show that the Company has sufficient funds to operate for the next twelve
months. In coming to this conclusion, the Company notes that current cash and
currently contracted projects are projected to cover budgeted expenses for the
majority of this period. In addition to currently contracted projects the
Company anticipates a number of new clients as well as repeat business from
some existing clients.
After reviewing the Company's projections, the Directors believe that the
Company is adequately placed to manage its business and financing risks for
the next twelve months. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.
1.4 Revenue recognition
The revenue shown in the income statement relates to amounts received or
receivable from the provision of services associated with outsourced systems
and computational biology services to pharmaceutical companies.
Revenue from the provision of the principal activities is recognised by
reference to the stage of completion of the transaction at the balance sheet
date where the amount of revenue can be measured reliably and sufficient work
has been completed with certainty to ensure that the economic benefit will
flow to the Company.
1.5 Intangible assets other than goodwill
Intangible assets acquired separately from third parties are recognised as
assets and measured at cost.
Following initial recognition, intangible assets are measured at cost or fair
value at the date of acquisition less any amortisation and any impairment
losses. Amortisation costs are included within the net operating expenses
disclosed in the income statement.
Intangible assets are amortised over their useful lives as follows:
Useful life Method
Trademarks 10 years Straight line
Licenses 5 years Straight line
Useful lives are also examined on an annual basis and adjustments, where
applicable are made on a prospective basis. The Company does not have any
intangible assets with indefinite lives.
1.6 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured
at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives on the following bases:
Fixtures and
fittings
3 years straight line
IT
Equipment
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset and
is recognised in the profit and loss account.
1.7 Research and development expenditure
Expenditure on research activity is recognised as an expense in the period in
which it is incurred.
1.8 Impairment of tangible and intangible assets
Property, plant and equipment and intangible assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. For purposes of assessing impairment, assets
that do not individually generate cash flows are assessed as part of the cash
generating unit to which they belong. Cash generating units are the lowest
levels for which there are cash flows that are largely independent of the cash
flows from other assets or groups of assets.
1.9 Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value
measurements. IFRS 13 does not change when an entity is required to use fair
value, but rather provides guidance on how to measure fair value under IFRS
when fair value is required or permitted. The resulting calculations under
IFRS 13 affected the principles that the company uses to assess the fair
value, but the assessment of fair value under IFRS 13 has not materially
changed the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the company. It requires specific disclosures about fair value
measurements and disclosures of fair values, some of which replace existing
disclosure requirements in other standards.
1.10 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less.
1.11 Financial assets
Financial assets are recognised in the Company's statement of financial
position when the Company becomes party to the contractual provisions of the
instrument.
Financial assets are classified into specified categories. The
classification depends on the nature and purpose of the financial assets and
is determined at the time of recognition.
Financial assets are initially measured at fair value plus transaction costs,
other than those classified as fair value through the income statement,
which are measured at fair value.
Trade and other receivables
Trade receivables are recognised and carried at the lower of their original
invoiced value and recoverable amount. Balances are written off when the
probability of recovery is considered to be remote.
Impairment of financial assets
Financial assets, other than those at fair value through the income statement,
are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial
recognition of the financial asset, the estimated future cash flows of the
investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
1.12 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair
value through the income statement or other financial liabilities.
Financial liabilities are classified according to the substance of the
contractual arrangements entered into.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Company's
obligations are discharged, cancelled, or they expire.
1.13 Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs. An equity instrument is any contract that
evidences a residual interest in the assets of the Company after deducting all
of its liabilities.
1.14 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the
initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when the Company has a legally enforceable right to offset current
tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
1.15 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an
expense.
The cost of any unused holiday entitlement is recognised in the period in
which the employee's services are received.
Termination benefits are recognised immediately as an expense when the Company
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
1.16 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
1.17 Share-based payments
The Company issues equity settled share based payments to certain employees.
Equity settled share based payments are measured at fair value at the date of
grant. The fair value determined at the grant date is expensed on a
straight-line basis over the vesting period. Fair value is measured by use of
a Black-Scholes model.
1.18 Leases
At inception, the Company assesses whether a contract is, or contains, a lease
within the scope of IFRS 16. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. Where a tangible asset is
acquired through a lease, the company recognises a right-of-use asset and a
lease liability at the lease commencement date. Right-of-use assets are
included within tangible fixed assets, apart from those that meet the
definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date plus any initial direct costs and an estimate
of the cost of obligations to dismantle, remove, refurbish or restore the
underlying asset and the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of
other tangible fixed assets. The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is initially measured at the present value of the lease
payments that are unpaid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate. Lease payments included
in the measurement of the lease liability comprise fixed payments, variable
lease payments that depend on an index or a rate, amounts expected to be
payable under a residual value guarantee, and the cost of any options that the
Company is reasonably certain to exercise, such as the exercise price under a
purchase option, lease payments in an optional renewal period, or penalties
for early termination of a lease.
The Company has elected not to recognise right-of-use assets and lease
liabilities for short-term leases of machinery that have a lease term of 12
months or less, or for leases of low-value assets including IT equipment. The
payments associated with these leases are recognised in profit or loss on a
straight-line basis over the lease term.
1.19 Government grants
Government grants are recognised when there is reasonable assurance that the
grant conditions will be met and the grants will be received.
Government grants of a revenue nature are credited to the profit and loss
account in the same period as the related expenditure.
1.20 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing at the dates of the transactions. At each
reporting end date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
end date. Gains and losses arising on translation are included in the income
statement for the period.
1.21 Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that
are subject to risks and return that are different from those of segments
operating in other economic environments.
2 Critical accounting estimates and judgements
Revenue for projects started and completed during the financial year is
recognised in full during the year. Revenue from a project which commences in
one financial year and is completed in a subsequent financial year is
recognised over the life of the project based on the expected period to
completion as anticipated at each balance sheet date less what has already
been recognised during a previous financial period or periods.
There were no other material accounting estimates or areas of judgements
required.
3 Revenue & segmental reporting
An analysis of the Company's revenue is as follows:
2024 2023
£ £
Revenue 543,250 597,354
Other operating income
Grant income 27,311 8,380
The principal activities are the provision of outsourced systems and
computational biology services to pharmaceutical companies.
This activity comprises a single segment of operation of a sole UK base and
entirely UK based assets. Revenue was derived in the UK, European Union
Switzerland and USA (2023: UK, European Union Switzerland and USA) from its
principal activity.
4 Operating loss
2024 2023
£ £
Operating loss for the period is stated after charging/(crediting):
Net foreign exchange losses/(gains) 109 491
Government grants (27,311) (8,380)
Fees paid to the Company's auditor, refer to below 11,250 11,025
Depreciation of property, plant and equipment 7,850 9,563
Profit on disposal of property, plant and equipment 388 - (85)
Amortisation of intangible assets 1,100 (876)
Share-based payments 22,331 34,170
5 Auditors remuneration
2024 2023
Fees payable to the Company's auditor and associates: £ £
For audit services
Audit of the Company's financial statements 11,250 11,025
6 Employees
The average monthly number of persons (including directors) employed by the
Company during the year was:
2024 2023
Number Number
11 10
Their aggregate remuneration comprised:
2024 2023
£ £
Wages and salaries 612,186 514,836
Social security costs 69,811 55,419
Other pension and insurance benefit costs 57,220 47,312
739,217 617,567
Details of the remuneration of Directors are included in the Directors Report
on page 18.
7 Finance income
2024 2023
£ £
Interest income
Bank deposits
2,095 1,724
8 Finance costs
2023 2022
£ £
Interest income
Other interest payable
33 -
Interest rate risk
The Company finances its operations by cash and short-term deposits. The
Company's policy on interest rate management is agreed at board level and is
reviewed on an ongoing basis. Other creditors, accruals and deferred revenue
values do not bear interest.
Interest rate profile
The Company had no bank borrowings at the 30 June 2024 and 30 June 2023.
9 Income tax expense
Continuing operations
2024 2023
£ £
Current tax
Research and development tax credit: current year (59,402) (94,752)
(59,402) (94,752)
The charge for the year can be reconciled to the loss per the income statement
as follows:
2024 2023
£ £
Loss before taxation (668,754) (572,009)
Expected tax charge based on a corporation tax rate of 25% (2023: 20.5%) (167,189) (117,262)
Expenses not deductible in determining taxable profit 7,154 9,645
Unutilised tax losses carried forward 91,439 45,198
Research and development expenditure tax credit (59,402) (94,752)
Deferred / (accelerated) capital allowances (4,357) (667)
Research and development enhancement (58,515) (72,462)
Loss surrendered for tax credits 131,468 135,548
Tax charge for the year (59,402) (94,752)
At 30 June 2024 tax losses of £4,478,755, (2023: £4,112,999) remained
available to carry forward against future taxable trading profits. These
amounts are in addition to any amounts surrendered for Research and
Developments tax credits. There is an unrecognised deferred tax asset of
£1,122,797. (2023: £1,028,250).
Unrecognised deferred tax is calculated at 25%, the rate enacted at the
balance sheet date. (2023: 25%)
10 Earnings per share
2024 2023
£ £
Number of shares
Weighted average number of ordinary shares for basic earnings per share 135,368,238 97,424,778
Earnings - Continuing operations
Loss for the period from continued operations (609,352) (477,257)
Earnings for basic and diluted earnings per share being net profit (609,352) (477,257)
attributable to equity shareholders of the Company for continued operations
Earnings per share for continuing operations
Basic and diluted earnings per share (shown in pence) (0.45) (0.49)
Basic and diluted earnings per share
Loss from continuing operations (shown in pence) (0.45) (0.49)
The loss attributable to equity holders (holders of ordinary shares) of the
Company for the purpose of calculating the fully diluted loss per share is
identical to that used for calculating the loss per share. The exercise of
share options would have the effect of reducing the loss per share and is
therefore anti- dilutive under the terms of IAS 33 'Earnings per Share'.
11 Financial instruments recognised in the statement of financial
position
2024 2023
Held at amortised cost: £ £
Current financial assets 117,743 114,002
Trade and other receivables
Cash and cash equivalents 191,072 416,592
308,815 530,594
Current financial liabilities Trade and other payables
84,942 91,986
84,942 91,986
The Company's financial instruments comprise cash and short-term deposits. The
Company has various other financial instruments, such as trade debtors and
creditors that arise directly from its operations.
The main risks arising from the Company's financial instruments are interest
rate risk, liquidity risk and foreign currency risk. The policies for managing
these are regularly reviewed and agreed by the Board.
It is and has been throughout the year under review, the Company's policy that
no trading in financial instruments shall be undertaken.
12 Intangible assets
Licenses Trademarks Total
£ £ £
Cost
At 1 July 2022 - 4,298 4,298
Additions 3,350 - 3,350
At 30 June 2023 3,350 4,298 7,648
At 30 June 2024 3,350 4,298 7,648
Amortisation and impairment
At 1 July 2022 - 1,293 1,293
Charge for the year 447 429 876
At 30 June 2023 447 1,722 2,169
Charge for the year 670 430 1,100
At 30 June 2024 1,117 2,152 3,269
Carrying amount
At 30 June 2024 2,233 2,146 4,379
At 30 June 2023 2,903 2,576 5,479
13 Tangible fixed assets
Fixtures and fittings IT equipment Total
Cost £ £ £
At 1 July 2022 2,849 80,981 83,830
Additions - 3,286 3,286
Disposals - (2,539) (2,539)
At 30 June 2023 2,849 81,728 84,577
Additions 288 17,022 17,310
Disposals (953) (7,826) (8,779)
At 30 June 2024 2,184 90,924 93,108
Accumulated depreciation and impairment
At 1 July 2022 2,848 66,617 69,465
Charge for the year 1 9,561 9,562
Eliminated on disposal - (2,207) (2,207)
At 30 June 2023 2,849 73,971 76,820
Charge for the year 88 7,762 7,850
Eliminated on disposal (951) (7,440) (8,391)
At 30 June 2024 1,986 74,293 76,279
Carrying amount
At 30 June 2024 198 16,631 16,829
At 30 June 2023 - 7,757 7,757
At 30 June 2022 1 14,364 14,365
14 Trade and other receivables
Due within one year
2024 2023
£ £
Trade debtors 102,510 32,320
Other receivables 6,705 16,008
Corporation tax recoverable 59,401 94,751
VAT recoverable - 1,853
Prepayments and accrued income 41,707 99,453
210,323 244,385
Due after one year
2024 2023
£ £
Prepayments and accrued income - 180
- 180
15 Fair value of trade receivables
There are no material differences between the fair value of financial assets
and the amount at which they are stated in the financial statements.
16 Fair value of financial liabilities
There are no material differences between the fair value of financial
liabilities and the amount at which they are stated in the financial
statements.
17 Liquidity risk
The Company seeks to manage financial risk by ensuring that sufficient
liquidity is available to meet foreseeable needs and to invest cash assets
safely and profitably.
18 Trade and other payables
Due within one year
2024 2023
£ £
Trade creditors 34,787 18,130
Accruals 46,155 57,793
Social security and other taxation 21,060 30,670
Other creditors 4,000 16,063
106,002 122,656
19 Deferred revenue
2024 2023
£ £
Arising from invoices in advance 34,074 20,017
Analysis of deferred revenue
Deferred revenues are classified based on the amounts that are expected to be
settled within the next 12 months and after more than 12 months from the
reporting date, as
follows:
2024 2023
£ £
Current liabilities 34,074 20,017
20 Retirement benefit schemes
Defined contribution schemes
The Company operates a defined contribution pension scheme for all qualifying
employees. The assets of the scheme are held separately from those of the
Company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is
£49,459 (2023: £38,421).
As at the statement of financial position date the Company had unpaid pension
contributions totalling £4,000 (2023: £6,063).
21 Share-based payment transactions
The Company operates two share option schemes: (1) under the Enterprise
Management Initiative Scheme ("EMI") and (2) an unapproved share option
scheme. Both are equity settled. Options are granted with a fixed exercise
price equal to the market price of the shares under option at the date of
grant. Some options are subject to performance criteria relating to either
share price performance or the achievement of certain corporate milestones.
The contractual life of the options is 10 years from the date of issue.
A summary of the options at the start and end of period for directors and all
other employees is presented in the following table:
Holder Outstanding at start of period Granted during period Forfeited during period Exercised during period Outstanding at end of period Exercisable at end of period Exercise price (p) Date of grant Date of expiry
Dr. C. Chassagnole (FD) 322,615 - - - 322,615 322,615 6.17 24-Mar-15 24-Mar-25
Dr. C. Chassagnole (FD) 659,641 - - - 659,641 659,641 2.50 28-Feb-17 28-Feb-27
Dr. C. Chassagnole (FD) 350,000 - - - 350,000 350,000 5.35 26-Mar-18 26-Mar-28
Dr. C. Chassagnole (FD) 267,000 - - - 267,000 267,000 3.16 26-Mar-19 26-Mar-29
Dr. C. Chassagnole 694,287 - - - 694,287 694,287 7.55 02-Mar-21 01-Mar-31
Dr. J. Millen 520,000 - - - 520,000 520,000 5.35 26-Mar-18 26-Mar-28
Dr. J. Millen 400,000 - - - 400,000 400,000 3.16 26-Mar-19 26-Mar-29
Dr. J. Millen 985,454 - - - 985,454 985,454 7.55 02-Mar-21 01-Mar-31
Dr. P. Harper (FD) 129,046 - 129,046 - - - 6.17 24-Mar-15 24-Mar-25
Dr. P. Harper (FD) 258,092 - 258,092 - - - 3.50 21-Dec-15 21-Dec-25
Dr. P. Harper (FD) 140,000 - 140,000 - - - 5.35 26-Mar-18 27-Mar-28
Dr. P. Harper (FD) 448,760 - 448,760 - - - 7.55 02-Mar-21 01-Mar-31
Dr. P. Sargent - 1,354,725 1,354,725 677,363 1.55 06-Feb-24 05-Feb-34
Dr. P. Sargent - 1,354,725 1,354,725 - 2.55 06-Feb-24 05-Feb-34
Dr. P. Sargent - 1,354,725 1,354,725 - 3.55 06-Feb-24 05-Feb-34
Other staff 188,605 - - - 188,605 188,605 6.17 24-Mar-15 24-Mar-25
Other staff 54,596 - - - 54,596 54,596 3.50 21-Dec-15 21-Dec-25
Other staff 201,891 - - - 201,891 201,891 2.50 28-Feb-17 28-Feb-27
Other staff 240,000 - - - 240,000 240,000 5.35 26-Mar-18 26-Mar-28
Other staff 193,000 - - - 193,000 193,000 3.16 26-Mar-19 26-Mar-29
Other staff 582,333 - - - 582,333 582,333 7.55 02-Mar-21 01-Mar-31
Other staff 635,188 - - - 635,188 423,459 4.38 29-Apr-22 29-Apr-32
Total 7,270,508 4,064,175 975,898 - 10,358,785 6,760,243
Please note, FD denotes
Former director
There were 4,064,175 (2023: nil) share options granted during the year. The
weighted average share price at the date of grant in the year was £0.03. The
options vest according to time and performance-based criteria.
The options outstanding at 30 June 2024 had an exercise price ranging from
£0.0155 to £0.0755, and a remaining contractual life ranging between 9
months and 10 years.
Fair value is measured using Black-Scholes share option pricing model.
The expected volatility is based on the sixty-day average historical
volatility of the Company over 3 years.
The expected life of options is based on the share option exercise history
with the Company. The risk-free rate of return is derived from UK treasury
yields at 2 and 3 years.
Total expenses of £22,331 related to equity settled share-based payment
transactions were recognised in the year (2023: £34,170).
22 Share capital
2024 2023
£ £
Ordinary share capital, issued and fully paid
135,472,478 Ordinary of 0.4p each 541,890 389,699
2,481,657,918 Deferred of 0.036p each 893,397 893,397
1,435,287 1,283,096
The ordinary shares carry no rights to fixed income. The deferred shares
have no voting rights and have no rights to receive dividends or other income.
2024 2023
£ £
Reconciliation of movements during the year:
A 1 July 2023 97,424,778 2,481,657,918
Issue of fully paid shares 38,047,700 -
At 30 June 2024 135,472,478 2,481,657,918
Current year changes to Ordinary share capital
On 3 July 2023 the Company issued 38,047,400 ordinary shares of 0.4p at a
price of 1p per ordinary share, the proceeds of which were used for working
capital purposes.
23 Share premium account
£
At 1 July 2022 5,936,478
At 30 June 2023 5,936,478
Issue of new shares 228,286
Share issue expense (42,649)
At 30 June 2024 6,122,115
The share premium account consists of proceeds from the issue of shares in
excess of their par value (which is included in the share capital account)
less the direct costs of issue.
24 Other reserves: share-based compensation reserve
£
At 1 July 2022 281,660
Additions 34,170
Other movements (168,179)
At 30 June 2023 147,651
Additions 22,331
Other movements (18,595)
At 30 June 2024 151,387
The share-based compensation reserve represents the credit arising on the
charge for share options calculated in accordance with IFRS 2.
In respect of cancelled and exercised options that had vested, £18,595 (2023:
£168,179) was transferred from the share-based payment reserve to the
retained earnings.
25 Retained earnings
£
At 1 July 2022 (6,526,427)
Loss for the year (477,257)
Other movements 168,179
At 30 June 2023 (6,835,505)
Loss for the year (609,352)
Other movements 18,595
At 30 June 2024 (7,426,262)
Retained earnings includes an amount of £237,889 (2023: £237,889) in
relation to the Equity Swap Agreement in 2014 which under the Companies Act is
not distributable.
In respect of cancelled and exercised options that had vested, £18,595 (2023:
£168,179) was transferred from the share-based payment reserve to the
retained losses reserve.
26 Operating lease commitments
Lessee
Amounts recognised in the income statement as an expense during the period in
respect of operating lease arrangements are as
follows:
2024 2023
£ £
Minimum lease payments under operating leases 48,468 70,248
At the reporting end date, the Company had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due
as follows:
2024 2023
£ £
Within one year 3,825 7,354
3,825 7,354
27 Capital commitments
At 30 June 2024 and 30 June 2023 the Company had no capital commitments.
28 Capital risk management
The capital structure of the Company consists of cash and cash equivalents and
equity attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as disclosed in notes 22 to 25.
The Board's policy is to maintain an appropriate capital base so as to
maintain investor and creditor confidence and to sustain future development of
the business. The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to provide
returns for shareholders and benefits for stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. The Company has a
record of managing the timing and extent of discretionary expenditure in the
business.
In order to maintain or adjust the capital structure the Company may issue new
shares.
29 Events after the reporting date
On 9 July 2024, a date which is after the reporting date but prior to the date
of signing these financial statements, the Board allotted 67,736,240 ordinary
shares. All shares were placed at £0.006 per share, with gross proceeds
raised of £406,417.
There were no additional post reporting events to note.
30 Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the
Company, is set out on page 18.
There were no other related party transactions during the year.
31 Controlling party
The Company does not currently have an ultimate controlling party and did not
have one in this reporting year or the preceding reporting year.
32 Cash absorbed by operations
2024 2023
£ £
Loss for the year after tax (609,352) (477,257)
Adjustments for:
Taxation credited (59,402) (94,752)
Finance costs 33 -
Investment income (2,095) (1,724)
Gain on disposal of tangible fixed assets 388 (85)
Amortisation and impairment of intangible assets 1,100 876
Depreciation and impairment of tangible fixed assets 7,850 9,563
Equity settled share-based payment expense 22,331 34,170
Movements in working capital:
(Increase)/decrease in debtors (1,108) 154,724
Increase/(decrease) in creditors (16,654) (3,692)
(Decrease)/increase in deferred revenue outstanding 14,057 5,755
Cash absorbed by operations (642,852) (372,422)
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