REG - RUA Life Sciences - Trading Update & Change of Accounting Date

Rua Life SciencesAnnouncement

30/10/2024 07:00

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RNS Number : 1194K  RUA Life Sciences PLC  30 October 2024

 

 

30 October 2024

 

 

 

RUA Life Sciences plc

("RUA Life Sciences", the "Company" or the "Group")

 

Trading update and change of accounting reference date

 

 

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)), is pleased to announce a trading update for
the six months ended 30 September 2024 ("H1 2025" or "the period").

Trading
update

Revenue

The Group expects to report substantial first-half revenue growth from £790k
in HY23 to £1,485k in the current period. This growth is stated before the
benefit of the Group's acquisition of the Abiss Group announced on 9 September
2024.

·    Biomaterials royalties for the period from Elast-Eon increased to
£237k, representing year-on-year growth of 19% (H1 2024: £199k)

·    Contract Manufacture revenues for the period increased to £1,247k.
This represents a 110% increase over the depressed H1 revenues reported last
year. Like for like growth over normalised revenues last year was 49%.

Cost Control

Costs in the period of approximately £1.6 million benefited from stringent
cost control measures and are expected to be down by approximately 25% on
those incurred in H1 2024.

Cash

Cash and cash equivalents at 30 September 2024 were £3.5m compared to £3.9m
at 31 March 2024 (H1 2024: £0.5m)

Profit for the period

The Group is expected to announce a pre-tax profit of £0.4m for the period
compared to a loss of £1.4m last year.

This turnaround is attributed to the increased revenues and cost control
described above together with, as described in more detail below, other income
of £0.9m on consolidation of Abiss.

 

RUA Vascular and Structural Heart

The objective for RUA Vascular and Structural Heart is to find alternative
ways to fund the remaining regulatory pathway for the polymer sealed graft
products and to introduce the Group's heart valve leaflet material (AurTex) to
the wider industry as a realistic alternative to animal tissue in heart
valves. The teams working on these projects have continued to make good
progress with significant improvements made in the handling of the graft to
address feedback from potential partners.

In addition, the AurTex material has positively advanced in both manufacturing
consistency and testing milestones. The materials tested under the Company's
Material Transfer Agreement ("MTA") with a heart valve company have
successfully met all the expected results for the tests undertaken; however,
at this point, it is not expected to lead to a commercial agreement due to
current priorities of the Company's MTA partner.  Notwithstanding this, the
results of the MTA have confirmed the management's belief in the potential for
AurTex.

Several opportunities are being pursued for each of the Vascular and
Structural Heart businesses, and further updates will be made as appropriate.

 

Acquisition of ABISS

On 6 September 2024, the Group acquired the entire issued share capital of
Abiss (France) and its 60% subsidiary, Abiss (Poland), (together the "Abiss
Group"). The sale of the Abiss Group was conducted as an auction by the court
appointed liquidator of the former parent company of the Abiss Group. The
total consideration paid for the Abiss Group was €80,000.

Abiss is the legal manufacturer of several implantable surgical products,
mainly for pelvic floor repair procedures. In addition, it is a subcontract
manufacturer of similar products for other companies, including a shared
customer of the RUA Group.

Based on the provisional management accounts of Abiss (France), shareholders funds amounted to £1 million which will result in other income of some £900k being recognised in the Interim Results of the Group. This bargain purchase gain is provisional and is expected to be revised once the fair value calculations have been finalised.

 

Shortly after the acquisition of the Abiss Group, it was subject to a rigorous
FDA audit of its activities and systems and came through the audit process
with no issues to report, which provides a strong confirmation of the quality
of the team and systems employed at the Abiss Group.

The Board's short-term priorities with the Abiss Group are to ensure that the
€1m order backlog caused by supply chain issues relating to packaging
components (now resolved) is dispatched to customers over the next quarter.
 A business and strategy review is underway to seek to grow the Abiss
business further and incorporate the Abiss Group into the overall strategy for
the device manufacturing business unit of RUA.

 

Change of accounting reference date

The Group announces that it will be changing its accounting reference date and
financial year end from 31 March to 30 September. Going forward, interim and
annual accounts will be prepared and published for the six months ending 31
March and the twelve months ending 30 September, respectively.

The Company has changed its financial year end to better guide business
planning and international business unit assimilation.

As a result of this change, the Company's future reporting calendar is
expected to be as follows:

•           Publication of unaudited accounts for the six-month
period ending 30 September 2024 in mid-December 2024.

•           Publication of unaudited accounts for the 12-month
period ending 31 March 2025 in mid-June 2025.

•           Publication of audited accounts for the 18-month period
ending 30 September 2025 by end of January 2026.

•           Publication of unaudited interim accounts for the
six-month period ending 31 March 2026 in mid-June 2026; and

•           Publication of audited accounts for the 12-month period
ending 30 September 2026 by the end of January 2027.

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK version of the EU
Market Abuse Regulation (2014/596), which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018, as amended and supplemented from
time to time.

 

For further information contact:

 

RUA Life Sciences
                                            Tel: +44
(0)1294 317073

Geoffrey Berg, Non-Executive
Chairman

Bill Brown, Chief Executive
 
 

Lachlan Smith, Group Chief Financial Officer

 

 

Cavendish Capital Markets Limited

(Nominated Adviser and Broker)
 
              Tel: +44 (0)20 7220 0500

Giles Balleny/Dan Hodkinson (Corporate
Finance)

Charlie Combe (Broking)

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 medical devices.

 

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