REG - RUA Life Sciences - Final results
26/07/2023 07:00
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RNS Number : 1707H RUA Life Sciences PLC 26 July 2023
RUA Life Sciences plc
("RUA Life Sciences", the "Company" or the "Group")
Final results for the year ended 31 March 2023
RUA Life Sciences, the holding company of a group of medical device businesses
focused on the exploitation of the world's leading long-term implantable
biostable polymer (Elast-Eon(TM)), announces its audited final results for
the year ended 31 March 2023.
Highlights:
· Revenue growth of 34% to £2,179,000 (2022: £1,625,000)
· Recruitment of high-calibre people with 26% headcount increase
· Despite continued investment, loss after tax reduced 3% to
£2,003,000 (2022:£2,067,000)
· RUA Biomaterials enjoyed 14% revenue growth to £554,000 (2022:
£487,000)
· RUA Contract Manufacture strong year with 43% revenue growth and
78% growth in operating profit to £794,000 (2022: £447,000)
· Regulatory pathway for RUA Vascular agreed with FDA and global
distribution agreement concluded
· Structural Heart achieved outstanding results on testing of novel
heart valve leaflet material.
· Year-end cash £1,484,000 (2022: £2,963,000)
Bill Brown, Chairman of RUA Life Sciences, commented: "RUA has a portfolio of
four businesses, all of which have made good progress during the period. The
mature businesses of Biomaterials and Contract Manufacture are growing revenue
and generating attractive net margins and the development business segments of
Vascular and Structural Heart have made good regulatory and technological
progress respectively on relatively low levels of investment".
For further information contact:
RUA Life Sciences
Bill Brown,
Chairman
Tel: +44 (0)1294 317073
Caroline Stretton, Group Managing
Director
Tel: +44 (0)1294 317073
Cenkos Securities plc (Nominated Advisor and Stockbroker)
Tel: +44 (0)20 7397 8900
Max Gould (Corporate Finance)
Giles Balleny (Corporate Finance)
Michael Johnson (Sales)
About RUA Life Sciences
RUA Life Sciences plc is the ultimate parent company of the Group, whose
principal activities comprise exploiting the value of its IP & know-how,
medical device contract manufacturing and development of cardiovascular
devices.
Our vision is to improve the lives of millions of patients by enabling medical
devices with Elast-Eon(TM), the world's leading long-term implantable
polyurethane.
Whether it is licensing Elast-Eon(TM), manufacturing a device or component, or
developing next generation medical devices, a RUA Life Sciences business unit
is pursuing our vision.
Elast-Eon™'s biostability is comparable to silicone while exhibiting
excellent mechanical, blood contacting and flex-fatigue properties. These
polymers can be processed using conventional thermoplastic extrusion and
moulding techniques. With over 8 million implants and 15 years of successful
clinical use, RUA's polymers are proven in long-term life enabling
applications.
The Group's four business units are:
RUA Contract Manufacture: End-to-end contract developer and manufacturer of medical devices and
implantable fabric specialist.
RUA Biomaterials: Licensor of Elast-Eon(TM) polymers to the medical device industry.
RUA Vascular: Development of Elast-Eon(TM) sealed vascular grafts
RUA Structural Heart: Development of Elast-Eon(TM) polymeric heart valves and leaflet
technology.
A copy of this announcement will be available shortly
at www.rualifesciences.com/investor-relations/regulatory-news-alerts
(http://www.rualifesciences.com/investor-relations/regulatory-news-alerts) .
CHAIRMAN'S STATEMENT
On behalf of the Board, I am pleased to present the Company's results for the
year ended 31 March 2023.
Trading for Year
Trading during the period was positive with strong revenue growth of 34% year
on year resulting in revenue for the year of £2,179k (2022: £1,625k).
We have continued to invest in the growth and development of the business as
demonstrated by the 26% increase in the average employee numbers from 38 last
year to 48 in the current year. Despite this investment in people during the
development stages of the Group, it is pleasing that Group loss before tax
reduced marginally from £2,360k to £2,322k. At the post tax level, the
reduction in loss was greater as R&D tax credits increased.
Cash was tightly controlled with total cash burn of £1,479k resulting in a
halving of cash balances from £2,963k to £1,484k.
Our Portfolio
The RUA Group has a portfolio of four medical device businesses and during the
year, we changed the basis of reporting on these businesses as part of a
review of segmental reporting and analysis. The four businesses are
Biomaterials, Contract Manufacture, Vascular and Structural Heart. The Group
Managing Director's Report provides detailed analysis on each of the
businesses, but I am pleased to set out below the key valuation metrics and
opportunities for the constituent parts.
RUA Biomaterials is the owner of our biostable polymer technology being
exploited through a licensing model. Revenues for the year amounted to £554k
(2022: £487k) and due to the limited costs associated with the business it
enjoys an operating profit margin of 89% (2022: 86%) and contributed £493k
(2022: £418k) to the group operating loss. RUA considers the cash flows from
the business segment as a "growing perpetuity" which at a discount rate of 12%
and growth of rate 5% would value this business segment at around £7 million.
RUA Contract Manufacture was acquired as part of the £2.45 million
acquisition of RUA Medical in April 2020. During the year the business grew
revenues strongly to £1,625k (2022: £1,138k) and has an operating profit
margin of 49% (2022: 39%) contributing £794k (2022: £447k) to the Group
operating loss. New and existing customers are actively reviewing projects
with RUA that could double the current scale of the business over a two-year
period. The purchase of RUA Contract Manufacture represents a multiple of
contribution of around 3 times which is proving to be attractive when compared
to revenue multiples of 7 times paid in the sector. Given the growth
opportunities available to the business and the potential for multiple
expansion, the contract manufacturing business has the potential to add
significant value.
Subsequent to the financial year end, we announced that the Group had
undertaken a reorganisation of its R&D development activities with the
hive down of the vascular graft business to RUA Vascular Limited (a 100%
subsidiary of the Company) and the hive down of the heart valve business to
RUA Structural Heart Limited (also a 100% subsidiary).
RUA Vascular is the business unit developing the large bore vascular graft
range. This part of the business disappointed by failing to meet the KPI's set
for it at the start of the period. The pre-sub process with the FDA has
highlighted supplemental pre-clinical testing that is required in addition to
the clinical trial itself. As a result, there have been further delays to the
commencement of the clinical trial and subsequent applications for regulatory
approvals. Despite this set back, a review of the project demonstrates how
much has been achieved to date with the development of the polymerically
sealed graft range, a regulatory pathway agreed with regulators, significant
biocompatibility testing, improvements in manufacturability of the graft and
establishment of commercial manufacturing capabilities required to meet
initial launch demand, and agreement reached to ensure global distribution.
These not inconsiderable achievements have been done on a relatively small
budget with investment of around £4.4million. Further investment will be
required for RUA Vascular to reach its potential, including the clinical
trials agreed with the FDA as part of the pre-sub 510k process, and plans to
facilitate this funding are being explored.
As part of the review of the holding values for RUA Vascular, financial
forecasts have been prepared. This demonstrates that the pilot plant has the
capacity to generate revenues of over £6 million and a net contribution of
over 70%. Valuation metrics in the vascular graft sector would appear to be
based on revenue multiples. Comparative transactions have been at revenue
multiples of 4 and above. Applying these multiples to RUA Vascular based on
pilot plant capacity values the business at £25 million representing an
EBITDA multiple of 5.4 times. After factoring in the anticipated costs of
completing the project, the Internal Rate of Return is a very attractive 43%.
RUA Structural Heart, the business unit developing next generation heart
valves and materials is estimated to have had around £3.1million of
investment since the business was restarted in financial year 2019. The key
objective for the period was to evaluate heart valve leaflet material and
compare the performance of 100% polymeric valves with a novel composite
developed by the Group. The computational modelling of the composite material
at the design stage suggested that its mechanical properties would be ideal
for heart valve leaflets and that there should not be a risk of delamination.
The team within the Structural Heart business segment has very recently
achieved the initial milestones set for the composite material. We are
delighted to report that after 200 million cycles the material shows no signs
of delamination and cut edges remain unchanged as a result of flex fatigue
testing undertaken in house. From a performance perspective, the composite
material is very thin and flexible and little energy is required to open a
valve, and once opened does not restrict blood flow with a good EOA (Effective
Orifice Area). Comparing the EOA with published data on current biological
valves suggests that the EOA of the RUA design is up to two times greater for
equivalent valve size. Testing has also demonstrated that the properties of
the composite restrict crack propagation.
100% polymeric valves rely in part on the leaflet design to reduce stress and
operate within the performance window of the polymer, meaning that the polymer
would not work in all designs. The composite material retains the blood
contacting properties of Elast-Eon(TM) but is significantly stronger. Suture
retention testing shows the composite is highly resistant to pull through.
Given these properties the RUA composite may be appropriate for valve designs
that 100% polymer would not be appropriate for, allowing a like for like swap
of RUA composite for the biological tissue used in currently marketed designs.
This creates the opportunity for RUA Structural Heart to become a supplier of
heart valve leaflets to other companies to incorporate in current designs.
The opportunity to broaden the business model for the Structural Heart
business not only increases the potential value of the business unit but
reduces the timeframe to be able to realise this value. The Structural Heart
business has always had the potential to generate substantial value for the
Group but with recent developments has increased the chances of achieving its
potential. The major medical device companies have always been prepared to buy
in novel technology and we believe we are getting much closer to having a
commercialisable offering.
Conclusion
RUA has a portfolio of four businesses, all of which have made substantial
progress during the period. The mature businesses are growing revenue and
generating attractive operating margins and the development business segments
of Vascular and Structural Heart have made good regulatory and technological
progress respectively on relatively low levels of investment. The stability of
Biomaterials coupled with the long term contractual but growth opportunities
of Contract Manufacture more than support the valuation of the Group and still
provide attractive upside. The developing businesses of Vascular and
Structural Heart both require further investment to achieve their considerable
potential and funding options are currently being explored to provide this
investment. The progress of Structural Heart over the past year has more than
compensated for the delay to the Vascular clinical trial.
William Brown
Chairman
25 July 2023
GROUP MANAGING DIRECTOR'S REPORT
"This period has seen continuing sales growth from our two highly profitable
and cash generative business units, RUA Biomaterials and RUA Contract
Manufacture, which underpin current Group valuation. We have continued to
de-risk the regulatory process and formalised the route to market for RUA
Vascular's large bore graft range, and identified additional positive
properties within RUA Structural Heart's polymeric heart valve technology
platform."
Caroline Stretton
GROUP MANAGING DIRECTOR
Sales performance has surpassed expectations
Contract manufacturing and polymer licensing business units are performing
ahead of expectations. Total revenue of £2,179,000 (2022: £1,625,000)
represents an increase of 34% over the same period in the previous year (2022:
6%). The strategic changes that we made to business processes and working
practices during the period have transitioned the business from a narrowly
focused contract developer and manufacturer to a fully-fledged medical device
manufacturing business that is focused on bringing our pipeline products to
market. Key to this is our continuing investment and commitment to Research
and Development activities, with R&D spend increasing 19% to £1,072,000
(2022: £903,000). Loss before tax for the period has decreased marginally
to £2,322,000 (2022: £2,360,000) as a result of increased growth from our
two cash generative businesses.
RUA Biomaterials
The Group's platform technology is based upon Elast-Eon, and RUA Biomaterials
owns all the Elast-Eon IP, and licenses use of Elast-Eon to medical device
companies. Elast-Eon has been proven to have all of the characteristics
necessary for a long-term implantable biomaterial, and has been the enabling
technology behind over 8 million life-sustaining devices over the last 15
years. Elast-Eon polymer licence and royalty income of £554,000 (£2022:
£487,000) represents growth of 14% during the period. This increased uptake
is due to successfully promoting the Elast-Eon polymer as a world leading
material to the medical device industry. RUA Biomaterials is akin to an
annuity business, and maintains a high operating profit margin (89%) (2022:
86%), since its only real outlays are IP costs. The Group continues to use the
Elast-Eon polymer within its vascular and heart valve product pipelines, with
the aim of improving device performance and eliminating the risks of
animal-derived material in cardiovascular devices.
RUA Contract Manufacture
Third party contract manufacturing revenue surpassed expectations by
increasing 43% to £1,625,000 (2022: £1,138,000). This was due to our
continued focus on quality and delivery leading to increased demand from
existing customers and the onboarding of a new global medical technology
company and resultant long term manufacturing and supply contract. Significant
process efficiencies and effective cost control measures have been realised
during the period, resulting in an attractive operating profit margin of 49%
(2022: 39%), 100% on-time-in-full (OTIF) service levels were maintained during
the entire period, and a recent customer satisfaction survey scored an average
of 98%, which reflects the organisation's commitment to quality and service.
All business development activities during the period have focused on long
term high value strategic opportunities, and significant headway has been made
with plans to increase Original Equipment Manufacturer (OEM) customer demand
to create a high growth business. As well as onboarding the new global medical
technology customer during the period, an opportunity pipeline with Request
For Quote (RFQ) values of c£2m in annualised revenue over the next 2-3 years
is in place.
RUA Vascular
RUA Vascular is focused on the $1billion global vascular graft market, where
polyester vascular grafts have been available on the market for over 50 years
with little innovation. Many of these grafts contain animal-derived sealants.
RUA Vascular's Elast-Eon-enabled products for open surgical repair are an
innovative solution addressing the many risks associated with animal-derived
tissue (supply chain constraints, cross-species contamination, environmental
concerns, and ethical/patient choice). With a growing acceptance in the
surgical community of an inevitable switch away from animal-sourced products,
RUA Vascular has a real opportunity to become a significant player in the open
surgical graft market.
During this period, all R&D efforts have been focused on the first launch
from the vascular pipeline, a large bore straight graft, which will also be
the enabler for the development of more complex products in the vascular graft
portfolio. Whilst the regulatory pathway was being addressed, we also took the
opportunity to further improve the product and significant progress has been
made on product development activities, as well as the necessary precursor
activities required for market launch.
Data collection on the large bore graft continues with in-vivo and in-vitro
trials, which has provided a level of certainty around graft design, bench
performance and biocompatibility. A number of pre-submissions, or Q-subs, have
allowed interactive discussions between the Group and FDA to determine the
regulatory path to approval in the US, which will increase the certainty of
market clearance through the less onerous 510K route. During these
discussions, a Good Laboratory Practice (GLP) in-vivo study design and a
clinical trial design was agreed for demonstration of the safety and efficacy
of Elast-Eon as a graft sealant, and which aligns with FDA's expectations. The
clinical trial is a performance goal study rather than a complex randomised
trial, and will involve 121 patients, with a primary end point at 6 months
post operation to study graft performance, safety, and clinical efficacy. With
the trial being non-blinded, we will have sight of early clinical results well
before the end point. Recruitment of the first patient is anticipated in 2024,
with regulatory submissions planned to allow entry into the US market upon
completion. The data generated in the trial will be utilised to support
further marketing applications in multiple geographic regions including
Europe.
Significant work has been completed on manufacturing process refinements and
efficiencies of the existing pilot production line. Manufacturing methodology
has ensured consistent batch to batch sealing of the graft by machines,
eliminating the use of toxic chemicals used during the manufacturing process.
Initial production capacity plans indicate that this pilot line is capable of
meeting the volumes and margins required for the launch of the large bore
vascular grafts. The new facility purchased in November 2021 to accommodate a
high output cleanroom facility, to support scale up manufacturing of the
vascular graft range and associated support functions, will further allow for
future growth but will require further investment.
To be a leading player in the vascular graft market, it was felt that a route
to market would be much more efficient and cost effective through a
distribution model where existing and experienced sales teams would be
leveraged. The Group was therefore delighted to sign an agreement in January
2023 with Corcym, a global medical device company focussed on the structural
heart area, which provides a clear path to a global market for the range of
large bore vascular grafts. Corcym have an excellent sales network in place,
currently selling to cardiothoracic surgeons in over 100 countries, and RUA
Vascular's grafts are complementary to their existing product portfolio. To
allow Corcym the necessary flexibility to maximise market penetration, a novel
pricing model was agreed whereby rather than agree specific price points by
territory, the partnership ethos of the agreement will see RUA and Corcym
share the gross principal margin achieved on global sales on a 50:50 basis.
This agreement validates not only the design benefits of RUA's product
offering but also the regulatory pathway that has been adopted, and first
revenues through the Corcym sales outlet are expected upon clearance to market
from the FDA.
In parallel with the Corcym distribution route to market, interest continues
to be strong for OEM component supply of the RUA vascular graft to be used as
part of another device. These additional opportunities are also being advanced
and discussions will continue within the coming year.
RUA Structural Heart
Through incorporation of Elast-Eon polymer technology into a novel leaflet
system, the Group believes both valve failure and the need for lifetime
anticoagulant treatment (associated with currently marketed aortic heart
valves) will be avoided.
Alternative leaflet material is becoming much more important to the industry,
and polymeric valves are being talked about as the future. The heart valve
market is dominated by a small number of very large companies, but much of the
recent innovation in the sector has been undertaken by start-ups. RUA
recognises that a route to market which involves a partnership/license for
future regulatory testing, clinical trial and launch to be more realistic than
seeking to compete directly. A second route to market, namely OEM component
supply of the proprietary composite material to major Heart Valve companies as
a replacement for biologic material in their transcatheter aortic valves, has
also been identified during the period. This strategy of seeking to "own" the
leaflet material of choice may allow faster commercialisation with revenues
generated during the customer development phase.
During the current period, two heart valve programmes were running in parallel
- one with a 100% polymer leaflet and the other a textile polymer composite
leaflet. Both designs have been developed, tested and de-risked to a stage
where the design which ensured the most resilient and appropriate technology,
and greatest potential, was prioritised. Our chosen lead design was the
textile polymer composite leaflet, which is very thin and flexible, yet
demonstrates tear resistance many times greater than a simple polymeric sheet,
whilst retaining the blood contacting properties of Elast-Eon.
The valve manufacturing process has been refined, and valves of sufficient
quality have been produced that are able to withstand durability testing via
an Accelerated Wear Tester (where the valve is subjected to accelerated
conditions as if it had been implanted in a heart). Hydro dynamic performance
(which replicates conditions within the heart) has also been very promising,
with low opening and closing pressure gradients and orifice areas. Fatigue
testing capability has now been brought in-house, and a major milestone of
c200 million cycles has been achieved without any indication of delamination
or change to the structure of the material. Testing of the lead designs (valve
and leaflet) will be further advanced and if benefits are demonstrated as
anticipated, following on, proof of concept in vivo trials to assess
functionality, durability, thrombosis and calcification deposition.
Novel IP on valve design and method of manufacture has also been created.
Quality Management System
The Group extended scope of its ISO 13485:2016 certification in support of its
Quality Management System (QMS) to include the entire Group of companies and
to meet Medical Device Manufacturer requirements. This is the second year in a
row that no non-conformities were noted during the ISO 13485 audit by our
Notified Body, which reflects the increasing expertise within the Quality
department. Electronic QMS software implementation has begun which will enable
the business to operate a modern, efficient and compliant QMS to support
future business growth.
Outlook
Continuing sales growth from our two highly profitable and cash generative
business units have exceeded expectations, and our two pre-revenue business
units continue to de-risk the regulatory process and make good technological
progress. A clear route to market has been agreed for RUA Vascular's large
bore graft upon market clearance via Corcym, and we are progressing
additionality within our polymeric heart valve technology platform. We have
worked hard to build the solid foundations required by a fully fledged medical
device manufacturing business, and to empower staff within the business with
the necessary experience, knowledge and skillsets to help deliver on RUA's
ambitious plans. The Group looks forward to continuing to maximise revenues,
alongside further product development, in the coming year, and ultimately
delivering on our strategy to disrupt the cardiovascular market with
innovative products and grow shareholder value.
CAROLINE STRETTON
Group Managing Director
25 July 2023
STRATEGY
The mission of the Group is to enhance patients' lives through the development
of pioneering innovative cardiovascular medical devices using Elast-Eon™,
the world leading long-term implantable biostable polyurethane This is being
undertaken through:
· International growth via licensing Elast-Eon™ to third parties
through RUA Biomaterials;
· International growth through RUA Contract Manufacture; becoming a
centre of excellence for designing, developing and manufacturing Elast-Eon™
based medical devices, whilst continuing to serve and expand its current OEM
customer base;
· Developing and launching a range of Elast-Eon™ sealed vascular
grafts through RUA Vascular; and
· Developing innovative Elast-Eon™ polymeric heart valve and
leaflet technology through RUA Structural Heart.
RUA Life Sciences will seek to maximise shareholder value by growing each
business to achieve attractive levels of profitability or disposing of
business areas if the valuations are attractive.
Summarised consolidated income statement
Year ended 31 March 2023 Year ended 31 March 2022
Notes GB£000 GB£000
Revenue 2,179 1,625
Cost of sales (388) (267)
Gross Profit 1,791 1,358
Other income 72 66
Administrative expenses (4,169) (3,776)
Operating loss (2,306) (2,352)
Finance expense (16) (8)
Loss before taxation (2,322) (2,360)
Taxation 319 293
Loss from continuing operations attributable to owners of the parent company (2,003) (2,067)
(2,003) (2,067)
Loss attributable to owners of the parent company
4
Loss per share (9.03) (9.32)
Basic & Diluted (GB Pence per share)
There was no other comprehensive income for 2023 (2022: £Nil)
Summarised consolidated statement of financial position
31 March 2023 31 March 2022
Notes GB£000 GB£000
Assets
Non current assets
Goodwill 301 301
Other intangible assets 470 521
Property, plant and equipment 2,739 2,597
3,510 3,419
Total non current assets
Current assets
Inventories 81 124
Trade and other receivables 588 1,120
Cash and cash equivalents 1,484 2,963
Total current assets 2,153 4,207
Total assets 5,663 7,626
Equity & Liabilities
Equity
Issued capital 1,109 1,109
Share premium 11,729 11,729
Other reserve (1,450) (1,552)
Capital redemption reserve 11,840 11,840
Profit and loss account (18,545) (16,542)
Total equity attributable to equity holders of the parent 4,683 6,584
Liabilities
Non-current liabilities
Borrowings 165 199
Lease liabilities 200 83
Deferred tax 85 75
Other liabilities 116 174
Total non-current liabilities 566 531
Current liabilities
Borrowings 29 23
Lease liabilities 81 39
Trade and other payables 255 410
Other liabilities 49 39
Total current liabilities 414 511
Total liabilities 980 1,042
Total equity and liabilities 5,663 7,626
Summarised consolidated cash flow statement
Year ended Year ended
31 March 2023 31 March 2022
GB£000 G
B
£
0
0
0
Cash flows from operating activities
Group loss after tax
(2,003) (2,067)
Adjustments for:
Amortisation of intangible assets 51 53
Depreciation of property, plant and equipment 307 259
Share-based payments 102 145
Net finance costs 16 8
Tax credit in year (319) (293)
Decrease / (increase) in trade and other receivables 327 (53)
Decrease / (increase) in inventories 43 (39)
Taxation received 533 87
Decrease in trade and other payables (203) (453)
Net cash flow from operating activities (1,146) (2,353)
Cash flows from investing activities
Purchase of property plant and equipment (449) (904)
Interest paid (28) (8)
Net cash flow from investing activities (477) (912)
Cash flows from financing activities
Proceeds from borrowing 229 -
Repayment of borrowings and leasing liabilities (97) (66)
Net cash flow from financing activities 132 (66)
Net (decrease)/increase in cash and cash equivalents (1,491) (3,331)
Cash and cash equivalents at beginning of year 2,963 6,294
Effect of foreign exchange rate changes 12 -
Cash and cash equivalents at end of year 1,484 2,963
Summarised consolidated statement of changes in equity
Issued share capital Share premium Other Capital redemption reserve Profit and loss account Total equity
GB£000 GB£000 reserve GB£000 GB£000 GB£000
GB£000
Balance at 31 March 2021 12,949 11,729 (1,697) - (14,475) 8,506
Share-based payments - - 145 - - 145
Buyback of deferred shares (11,840) - - 11,840 - -
Transactions with owners (11,840) - 145 11,840 - 145
Total comprehensive loss for the year - - - - (2,067) (2,067)
Balance at 31 March 2022 1,109 11,729 (1,552) 11,840 (16,542) 6,584
Share-based payments - - 102 - - 102
Transactions with owners - - 102 - - 102
Total comprehensive loss for the year - - - - (2,003) (2,003)
Balance at 31 March 2023 1,109 11,729 (1,450) 11,840 (18,545) 4,683
NOTES TO THE EXTRACTS FROM THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The extracts from the Consolidated financial statements are for the year
ended 31 March 2023. The Consolidated financial statements have been
prepared in compliance with UK-adopted International Accounting Standards.
The Consolidated financial statements have been prepared under the historical
cost convention, with the exception of fair value adjustments made in
connection with the acquisition of RUA Medical.
The accounting policies remain unchanged from the previous year.
2. Going concern
The Board has to consider that the Going Concern principle is appropriate for
the preparation of these accounts. At 31 March 2023, the Group had cash and
cash equivalents of £1.48m (2022: £2.96m) and, as at the date of signing
these Financial Statements, the cash balance was £0.9m.
RUA Life Sciences has two cash-generative units (RUA Biomaterials and RUA
Contract Manufacture). These cash-generating units provide a healthy Gross
Margin (89% and 49%), and contributions to Group operating loss were £493,000
and £794,000. The Group has two cash-consuming units (RUA Vascular and RUA
Structural Heart), and both these units require further investment before
commercialisation and cash generation can be achieved. The investment will
chiefly be for a GLP animal study and Human Clinical Trials for RUA Vascular.
The Board anticipates the requirement for additional funding over the course
of the financial year as the internal cash generation will not cover the
additional investment required.
The Board has considered the current cash position, reviewed budgets and
profit and cash flow forecasts over the going concern period (to October 2024)
along with sensitivity analyses and made appropriate enquiries. The Board has
concluded that further financing is required and has taken advice from the
Company's Nomad and Broker on the current state of the equity market and the
chances of a successful fundraise. The Board has formed a judgement at the
time of approving the financial statements that the Group will have access to
adequate resources, including new financing, to continue in operational
existence for the period of the going concern assessment. If finance is not
successful, which management see as unlikely, management have a number of
mitigating actions which can be taken. There is a level of uncertainty around
the ability of management to implement the mitigations during the going
concern period, for this reason management have concluded a material
uncertainty is appropriate. For this reason, the Board considers that the
adoption of the going concern basis in preparing the consolidated financial
statements is appropriate.
The Financial Statements have been prepared on a going concern basis and do
not include the adjustments that would result if the Group was unable to
continue as a going concern. Due to the factors described above, specifically
the uncertainty around the ability to raise new financing and the ability to
implement mitigating actions, a material uncertainty exists, which may cast
significant doubt on the Group and the Company's ability to continue as a
going concern.
3. Preliminary announcement
The summary accounts set out above do not constitute statutory accounts as
defined by section 434 of the UK Companies Act 2006. The summarised
consolidated statement of financial position at 31 March 2023, the summarised
consolidated income statement, the summarised consolidated cash flow statement
and the summarised consolidated statement of changes in equity for the year
then ended have been extracted from the Group's statutory financial statements
for the year ended 31 March 2023 upon which the auditor's opinion includes
reference to material uncertainty relating to going concern but is unqualified
and did not contain a statement under either sections 498(2) or 498(3) of the
Companies Act 2006. The audit report for the year ended 31 March 2023 did
not contain statements under sections 498(2) or 498(3) of the Companies Act
2006. The statutory financial statements for the year ended 31 March
2022 have been delivered to the Registrar of Companies. The 31 March
2023 accounts were approved by the Directors on 25 July 2023, but have not
yet been delivered to the Registrar of Companies.
4. Earnings per share
The basic loss per ordinary share of 9.03 pence (2022: loss of 9.32 pence)
is calculated on the loss of the Group of £2,003,000 (2022: loss
of £2,067,000) and on 22,184,798 (2021: 22,184,798) ordinary shares, being
the weighted average number of shares in issue during the year. Diluted
earnings per share have not been calculated as the Group is loss making.
Posting and availability of accounts
The annual report and accounts for the year ended 31 March 2023 will be sent
by post or electronically to all registered shareholders on 28 July 2022.
Additional copies will be available for a month thereafter from the Company's
office 2 Drummond Crescent, Riverside Business Park, Irvine, Ayrshire KA11
5AN. Alternatively, the document may be viewed on, or downloaded from, the
Company's website: www.rualifesciences.com (http://www.rualifesciences.com/)
.
Notice of Annual General Meeting
Notice of the twenty-sixth Annual General Meeting of RUA Life Sciences
plc will be posted with the Annual Report and Accounts and will be held at
Gailes Hotel, Marine Drive, Irvine, Ayrshire KA11 5AE on Tuesday, 22 August
2023 at 11:00am.
FORMAT OF THE AGM
The AGM will be a physical meeting. The Board encourages all shareholders who
are unable to, or do not wish to, attend the AGM in person to vote by proxy.
If you wish to attend the AGM in person, it would assist the Company's
planning if you could please notify the Company in advance by email to
kate.full@rualifesciences.com, including your name as shown on the Company's
Register of Members.
Any changes to these arrangements will be published on the Company's website
as soon as possible before the date of the meeting and will also be circulated
via a Regulatory Information Service.
Further details of the AGM will be included in the Annual Report and will
published on the Company's website at www.rualifesciences.com
(http://www.rualifesciences.com/) .
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