REG - SkinBioTherapeutics - Final Results
15/12/2022 16:30
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RNS Number : 8954J SkinBioTherapeutics PLC 15 December 2022
15 December 2022
SkinBioTherapeutics plc
Unaudited full year results
Newcastle upon Tyne, UK - SkinBioTherapeutics plc (AIM: SBTX or the "Group"),
a life sciences company focused on skin health, announces its unaudited full
year consolidated results for the 12 months to 30 June 2022.
Operational and financial highlights
· Commercial progress of probiotic food supplement, AxisBiotix-Ps™
o Influencer marketing programme initiated February 2022
o Retention rates of subscribers at 80%+; steady but slow sales growth
· Partnership with Croda plc is in the product development stage, with
timing controlled by Croda. Product launch expected to occur in 2023 which
would trigger initial royalties revenues from Croda later in the calendar year
· Continued progress on formulation of acne food supplement with
consumer study to start in 2023
· Oral research programme and skin health and disease programme at the
University of Manchester
· Appointments of full time Chief Financial Officer and non-executive
director
· Cash as of 30 June 2022, £1.8m (2021: £4.6m)
Stuart Ashman, CEO of SkinBioTherapeutics, said:
"This financial year has been a mixed one for the Group. The team experienced
the excitement of launching its first direct to consumer product, and the
flow of positive feedback from customers who have found relief for their
conditions - for some, for the first time in decades. The testimonials taken
from these patients and the ongoing high retention rates of 80%+ on a monthly
basis reinforce the high level of confidence that management has in the
product and its long-term market potential. Progress from the other pillars
illustrate the additional commercial opportunities within the Group and
support the early discussions ongoing with potential industry partners.
"Post initial launch of the AxisBiotix-Ps™ product, the Board believes it is
in the interests of the Company and a better way to generate long term value
to its shareholders to seek to secure an exclusive deal with a global
multinational for AxisBiotix-Ps™, rather than signing multiple distribution
deals across different markets. While the Company looks to undertake
out-licensing discussions, it will continue to roll out the AxisBiotix-Ps™
product into Europe and the Rest of World.
"SkinBioTherapeutics has a small team which has achieved a significant amount
in 12 months. Development continues apace in the post year period and another
busy, exciting year is anticipated in 2023."
The Company's audited report and accounts for the year ended 30 June 2022,
including all notes to the financial statements, are expected to be published
and sent to shareholders by 23 December 2022.
-Ends-
For more information, please contact:
SkinBioTherapeutics plc Tel: +44 (0) 191 495 7325
Stuart J. Ashman, CEO
Manprit Randhawa, CFO
Cenkos Securities Plc (Nominated Adviser & Broker) Tel: +44 (0) 20 7397 8900
Giles Balleny, Max Gould (Corporate Finance)
Dale Bellis / Michael Johnson (Sales)
Instinctif Partners Tel: +44 (0) 20 7457 2020
Melanie Toyne-Sewell / Tim Field / Jonjo Cordey SkinBioTherapeutics@instinctif.com (mailto:SkinBioTherapeutics@instinctif.com)
About SkinBioTherapeutics plc
SkinBioTherapeutics is a life science company focused on skin health. The
Group's proprietary platform technology, SkinBiotix®, is based upon
discoveries made by Professor Catherine O'Neill and Professor Andrew McBain.
The Group is targeting a number of skin healthcare sectors, the most advanced
of which are cosmetic skincare and food supplements to modulate the immune
system by harnessing the gut-skin axis. In each area SkinBioTherapeutics plans
to exemplify its technology through human studies. The Group's first product,
AxisBiotix-Ps™, a food supplement to address the symptoms of mild to
moderate psoriasis was launched on 29 October - World Psoriasis Day.
The Group listed on AIM in April 2017 and is based in Newcastle upon Tyne, UK.
For more information, visit: www.skinbiotherapeutics.com
(http://www.skinbiotherapeutics.com) .
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Group's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
Chairman and Chief Executive's Statement
Financial year 2022 saw a significant milestone in the Group's commercial
development with the successful launch of AxisBiotix-Ps™. Following the
BRIGHT Study in early 2021, there were very encouraging signs that
AxisBiotix-Ps™ could become a truly remarkable treatment of psoriasis
symptoms. As such, we ran a soft sales launch of the product in October 2021
from which we have seen sales growth and very high retention rates from
subscribers of the product.
The rate of sales growth has been significantly lower than the Group
originally anticipated which was disappointing to all stakeholders. The
Directors believe that growth could have been accelerated faster if
distribution had been handed over to third party distributors, however, the
terms discussed with regional providers were deemed by the Directors as not
beneficial to the Group in the longer term.
Post year end, sales have continued to increase albeit still at a slow pace,
however, the retention rate of approximately 80% on a monthly basis supports
management's belief of the long-term potential for the AxisBiotix-Ps™
product. The Board believes it is in the interests of the Company and a
better way to generate long term value to its shareholders to seek to secure
an exclusive deal with a global multinational for AxisBiotix-Ps™, rather
than signing multiple distribution deals across different markets.
The Company's strategy also involves the evaluation of inorganic opportunities
that would provide synergies and accelerated routes to market. The Group
continues to review acquisition opportunities. More information is provided
below on the current acquisition strategy.
Over the year, the Group has also been pushing forward other strategic
pillars, including the cosmetic active ingredient programme with Croda, the
oral programme, and the formulation of the acne programme. The Group has
generated positive progress across these three areas post year end and the
Directors anticipate further progress in the new financial year.
The make-up of the Company changed significantly during 2022, with the
addition of several new members to the team. Doug Quinn, who has left the
Company with the best wishes of the Board, was replaced by a full-time CFO,
Manprit Randhawa, whose previous experience in growth companies will be
invaluable to the Company as we move from R&D to commercialization across
several pillars over the coming years. In addition, staff numbers have
increased from 3 full time members of staff to 8 during 2022, highlighting the
investments into the commercial delivery of AxisBiotix-Ps™, as well as the
build-out of the internal formulation and scientific capabilities the Company
has at its disposal.
Financial review
In the year to 30 June 2022, the Group reported sales of £75k (2021: £nil).
Cost of sales, including the initial introductory offer and shipping, were
£29k (2021: £nil), and gross profits were £46k (2021: £nil). As stated at
the interims, as shipping volumes increase, the operating margin should
improve due to economies of scale (bulk shipping) and onward local
distribution.
Overall expenses were £2,761k (2021: £1,497k). This included research and
development expenditure of £861k (2021: £506k), which covered the consumer
study for AxisBiotix-Ps™ and the oral research programme. In addition,
ongoing operating expenses of £1,856k (2021: £991k) reflected the adaption
of the business infrastructure to conduct direct sales to consumers and
ongoing marketing costs.
The operating loss was £2,716k (2021: £1,497k).
The cash balance as at 30 June 2022 was £1,805k (2021: £4,610k) reflecting
the increased cost base and initial stocking prior to the AxisBiotix-Ps™
launch.
Current trading and outlook
Post year end, revenues of AxisBiotix-Ps™ have continued to increase
gradually from the sales run rate as at 30 June 2022, as consumers adopt the
product. Marketing spend on the AxisBiotix-Ps product has been significantly
reduced from earlier in 2022 including the halting of the influencer
campaign. Retention rates for subscribers are currently at least 80% with
retention rates being measured as the number of subscribers who are remaining
as a subscriber at the end of each month, compared to the same cohort that
were in existence at the start of the previous month.
Acquisition strategy
The Group is in ongoing discussions to acquire a private company that provides
a variety of branded topical products for common dermatological conditions
such as psoriasis and eczema to NHS hospitals, dispensing practices and retail
pharmacies. The proposed target is profitable and the Group sees a number of
synergies to improve this. However, there is no certainty of timing or
execution as the Company would need to agree additional funding using debt
and/or equity and any acquisition would be conditional on satisfactory
diligence.
Operational review
SkinBiotix Pillar (skincare/cosmetics)
This is the first pillar for the Group, based on its proprietary discovery
platform. In November 2019, SkinBiotix® signed a deal with Sederma, the
specialist cosmetic division of Croda Plc, to develop, manufacture and
commercialise the SkinBiotix® platform. The aim was to develop an active
ingredient which would be incorporated in consumer skincare indications.
During the financial year, Sederma has been scaling-up the manufacturing
process, identifying additional potential scientific and marketing claims for
the end ingredient, and started to engage with its 12,000+ strong customer
base. Post year end, the Company continues to engage with Croda Plc on the
launch plan of SkinBiotix®. The product development timing is controlled by
Croda, however the Directors believe that the product launch will occur in
2023 and thus the Directors expect some initial royalties revenues from Croda
to commence in 2023.
As part of the agreement with Croda/Sederma, SkinBioTherapeutics is able to
develop its own line of cosmetic-related SkinBiotix® products. The
formulation is based on the one from Sederma.
AxisBiotix Pillar (gut-skin axis)
- AxisBiotix-Ps™ (Psoriasis)
The first product to be commercially launched by SkinBioTherapeutics is
Axis-Biotix-Ps™, a probiotic food supplement developed to help alleviate the
symptoms associated with psoriasis. Following a soft launch on 29 October
2021, an active marketing initiative began running from February 2022.
Although the primary focus of the Group is to partner its products and
technologies with industry players, the global pandemic forced a change in
strategy with this pillar, to sell direct to consumers. The restrictions of
COVID-19 resulted in a consumer participant study rather than a hospital-based
study. However, the results of the study were still compelling and have
played a significant part in the ongoing marketing of the product to the
psoriasis community.
The soft launch for the UK and US markets took place in October 2021 and was
followed by a more concerted marketing push in February 2022.
Axis-Biotix-Ps™ is sold in boxes of 28 sachets with sufferers taking one
sachet per day. Results from the consumer study indicated it can take 3-4
weeks for the benefits of AxisBiotix-Ps™ to be achieved and so during the
launch period, customers received an additional box for free. The product can
be bought as a single purchase (box of 28 sachets) or subscribed for on a 28-
or 56-day cycle. The website can be found here (https://axisbiotix.com/) .
The marketing push was focused around social media "influencers" who were
themselves sufferers of psoriasis. The Group commissioned 10 of these
influencers to engage with their followers via social media, telling the story
from receipt of the box and taking the supplement to talking about its
effects. These posts and the profile of AxisBiotix-Ps™ were amplified
further through online advertising and video testimonials. The ultimate aim is
to educate the psoriatic community about the AxisBiotix-Ps™ brand and the
potential for probiotic supplements in managing and supporting their
condition. The influencer campaign has now concluded.
Geographically, the main focus was consumers in the UK and US. While there
are early discussions with potential parties around out-licensing, management
continues to look at developing new markets and refining its operations to
build a stronger validation case around the AxisBiotix-Ps™ product. Since
financial year end, the Group has been preparing to launch in Europe, starting
with Spain and Italy, following regulatory approval. European sales can be
managed directly via the Group's e-commerce platform with distribution from
warehouses in the UK (for UK customers) and the Netherlands (for European
customers).
Many people who suffer from psoriasis are highly engaged when it comes to
talking about the condition and different treatments; we have seen this in
real time about AxisBiotix-Ps™ during the consumer study and post launch. As
a result of this engagement and also with the US and UK Psoriasis patient
associations, internal expectations for sales growth were high. However, even
though management are happy with the retention rates levels, sales have grown
significantly slower than expected, as disclosed to shareholders in the HY
results. Sales at year end were £75k (2021: £Nil).
The sales rate of growth up to and post year end might have accelerated more
steeply with a greater marketing spend and/or by using third party
distributors. The Group was not set up to be a B2C business with the
associated sales spend, with this initial B2C strategy coming about as a
result of adaptation from COVID-19; management has always managed resources in
a careful manner and was not prepared to redirect resources to the detriment
of the other products and pillars being developed. As a result, the Board
decided it was not in the best interests of the Group to pursue third party
distribution deals which might jeopardise future potential strategic tie-ups
with industry partners.
- Acne
The next product in development under the AsixBiotix pillar is one targeting
acne. Early signs of efficacy were seen in the participant study with benefits
reported by people suffering from other conditions, from acne, rosacea and
eczema.
During the year, the Group has been developing a new bacterial blend.
Management is pleased to report that the pilot formulation is stable and it is
looking to design a consumer study in the same form as the BRIGHT study for
Axis-Biotix-Ps™. This study is anticipated to commence during 2023. In the
meantime, the team is assessing the options for the most appropriate
commercialisation strategy, on the basis of a positive outcome.
MediBiotix Pillar (MedTech applications e.g. woundcare)
The MediBiotix Pillar is focusing on applying SkinBiotix technology in medical
device applications, looking at targeting eczema in the first instance. The
aim would be to alleviate eczema symptoms using the gut-skin axis in the same
way that AxisBiotix acts to alleviate symptoms in psoriasis. This development
route is still being explored by management.
Other areas for application include various classes of skin wounds. Due to the
complexity but significant opportunity of the woundcare area, Management
believes a joint development agreement with an industry partner is the best
way forward. Early discussions with potential global partners in the medtech
sector have commenced.
CleanBiotix Pillar (anti-infection)
With the impact of the pandemic coupled with the increasing incidence of
healthcare acquired infections, such as MRSA, preventing infection is of
paramount concern to healthcare practitioners. From early studies of
SkinBiotix, there is data demonstrating its effectiveness in preventing the
most common skin pathogen, Staphylococcus aureus (SA), from sticking to and
growing on skin surfaces. The potential for SkinBiotix technology in this area
is exciting, but is also challenging, therefore, this would be another area
where outlicensing the programme would be the obvious option.
Other Research Programmes
During the year, the Group has been running two research programmes with the
University of Manchester; an oral programme and an inflammation study.
The first phase of the oral programme was completed in August 2022. The study
was conducted by Professor Andrew McBain of the University of Manchester, and
results strongly supported the use of specific bacterial (probiotic) strains
or lysates in the prevention of periodontal (gum) disease. Application of a
mixture of bacteria and lysates to oral cells showed protection against the
pathogen associated with periodontal disease and also a dampening effect on
inflammation. Different bacteria/lysates showed different abilities, therefore
further work is required to identify the optimal mix to take forward into
human studies. Management is encouraged by the strong foundation this data
provides for the Group's continued research into the benefits of probiotics on
oral health and positions the team to commence early licensing talks.
The second programme is looking at how the microbiome can influence and
rebalance the body's response to inflammation in skin health and skin
disease. This study is progressing as expected and is due to read-out at the
end of 2023.
Board and management appointments
In April 2022, the Group appointed its first full time Chief Financial Officer
and non-executive director, Manprit Randhawa. Manprit was previously CFO at
the leading educational technology firm, Juniper Education Group, and before
then, he was CFO at Smoothwall and also at Onbone Oy, a medical technology
business. He took over from Doug Quinn after an orderly handover during Q2
2022.
The Group also strengthened the Board with the appointment of Danielle Bekker
as a non-executive Director. She has considerable experience in
direct-to-consumer marketing, including a focus on the use of influencers and
digital media in the FMCG space, which has been helpful with the campaigns run
to promote AxisBiotix-Ps™.
Martin Hunt (Non-executive Chairman)
Stuart J. Ashman (Chief Executive Officer)
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2022
Continuing operations Revenue Notes 2022 2021
£ £
74,761 -
3
Cost of sales (29,424) -
Gross profit 45,337 -
Selling and distribution costs (43,804) -
Research and development (861,383) (505,627)
Operating expenses (1,856,272) (991,481)
Total administrative expenses (2,761,459) (1,497,108)
Loss from operations 4 (2,716,122) (1,497,108)
Finance costs 5 (10,135) (926)
Loss before taxation (2,726,257) (1,498,034)
Taxation 7 199,622 65,065
Loss for the year (2,526,635) (1,432,969)
Other comprehensive income - -
Total comprehensive loss for the year (2,526,635) (1,432,969)
Basic and diluted loss per share (pence) 8 (1.61) (0.98)
Consolidated Statement of Financial Position
As at 30 June 2022
Notes 2022 2021
£ £
Assets
Non-current assets
Property, plant and equipment
10 - -
Right-of-use assets 11 126,903 143,328
Intangible assets 12 625,504 528,941
Total non-current assets 752,407 672,269
Current assets
Inventories
14 388,537 -
Trade and other receivables 15 138,150 268,946
Corporation tax receivable 15 266,916 183,828
Cash and cash equivalents 1,804,923 4,609,889
Total current assets 2,598,526 5,062,663
Total assets 3,350,933 5,734,932
Equity and liabilities
Equity
Capital and reserves
Called up share capital
19 1,567,802 1,567,802
Share premium 19 8,758,037 8,758,037
Other reserves 437,316 384,612
Accumulated deficit (8,021,828) (5,495,193)
Total equity 2,741,327 5,215,258
Liabilities
Non-current liabilities
Lease liabilities
17 100,647 114,780
Total non-current liabilities 100,647 114,780
Current liabilities
Trade and other payables
16 481,742 379,820
Lease liabilities 17 27,217 25,074
Total current liabilities 508,959 404,894
Total liabilities 609,606 519,674
Total equity and liabilities 3,350,933 5,734,932
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2022
2022 2021
£ £
Cash flows from operating activities
Loss before tax for the period (2,726,257) (1,498,034)
Net interest
Depreciation of property, plant and equipment - 1,700
Right-of-use assets depreciation and interest 39,557 3,355
Amortisation of IP 250 -
Share based payments charge 52,704 61,257
(2,633,746) (1,431,722)
Changes in working capital
lncrease in inventories (388,537) -
(lncrease)/decrease in trade and other receivables 130,796 (198,324)
Increase in trade and other payables 101,922 74,999
Cash used in operations (155,819) (123,325)
Taxation received 116,534 -
Net cash used in operating activities (2,673,031) (1,555,047)
Investing activities
Purchase of IP (96,813) (108,403)
Purchase of right-of-use assets - (3,902)
Net cash used in investing activities (96,813) (112,305)
Cash flows from financing activities
Net proceeds from issue of shares - 4,121,114
Lease payments made (35,122) (2,927)
Net cash generated by/(used in) financing activities (35,122) 4,118,187
Net (decrease)/increase in cash and cash equivalents (2,804,966) 2,450,835
Cash and cash equivalents at the beginning of the period Cash 4,609,889 2,159,054
and cash equivalents at the end of the period 1,804,923 4,609,889
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2022
Share capital Share premium Other reserves Retained earnings
£ £ £ £ Total
£
As at 1 July 2020 1,280,835 4,923,890 403,483 (4,142,352) 2,465,856
Loss for the period - - - (1,432,969) (1,432,969)
Issue of shares 286,967 4,242,189 - - 4,529,156
Costs of share issue - (408,042) - - (408,042)
Exercise of share warrants - - (80,128) 80,128 -
Share-based payments - - 61,257 - 61,257
As at 30 June 2021 1,567,802 8,758,037 384,612 (5,495,193) 5,215,258
Loss for the period - - - (2,526,635) (2,526,635)
Intercompany loan - - -
- -
Share-based payments - - - 52,704
52,704
As at 30 June 2022 1,567,802 8,758,037 437,316 (8,021,828) 2,741,327
Share capital is the amount subscribed for shares at nominal value.
Share premium is the amount subscribed for share capital in excess of nominal
value.
Other reserves arise from the equity element of a convertible loan issued and
converted in the period to 30 June 2017, and from share options granted.
Retained earnings represents accumulated profit or losses to date.
Company Statement of Financial Position
As at 30 June 2022
Notes 2022 2021
£ £
Assets
Non-current assets
Property, plant and equipment 10 - -
Right-of-use assets 11 126,903 143,328
Intangible assets 12 624,255 528,941
Investments 13 325,755 113,733
Other receivables 15 1,142,891 623,688
Total non-current assets 2,219,804 1,409,690
Current assets
Trade and other receivables 15 91,427 59,888
Corporation tax receivable 15 230,391 183,828
Cash and cash equivalents 1,561,402 4,264,690
Total current assets 1,883,220 4,508,406
Total assets 4,103,024 5,918,096
Equity and liabilities
Equity
Capital and reserves
Called up share capital 19 1,567,802 1,567,802
Share premium 19 8,758,037 8,758,037
Other reserves 437,316 384,612
Accumulated deficit (7,249,098) (5,284,889)
Total equity 3,514,057 5,425,562
Liabilities
Non-current liabilities
Lease liabilities 17 100,647 114,780
Total non-current liabilities 100,647 114,780
Current liabilities
Trade and other payables 16 461,103 352,680
Lease liabilities 17 27,217 25,074
Total current liabilities 488,320 377,754
Total liabilities 588,967 492,534
Total equity and liabilities 4,103,024 5,918,096
No Statement of Comprehensive Income is presented in these financial
statements for the Parent Company as provided by Section 408 of the Companies
Act 2006. The loss for the financial year dealt with in the financial
statements of the Parent Company was £1,964,209 (2020: £1,222,665)
Company Statement of Cash Flows
For the Year Ended 30 June 2022
2022 2021
£ £
Cash flows from operating activities
Loss before tax for the period (2,127,306) (1,287,730)
Depreciation of property, plant and equipment - 1,700
Right-of-use assets depreciation and interest 39,557 3,355
Impairment of financial assets 28,407 34,124
Share based payments charge 52,704 61,257
(2,006,638) (1,187,294)
Changes in working capital
(lncrease)/decrease in trade and other receivables (31,539) 10,734
Increase in trade and other payables 108,423 47,859
Cash generated by operations 76,884 58,593
Taxation received 116,534 -
Net cash used in operating activities (1,813,220) (1,128,701)
Investing activities
Purchase of IP (95,314) (108,403)
Investment in subsidiaries (759,632) (771,545)
Purchase of Right-of-Use Assets - (3,902)
Net cash used in investing activities (854,946) (883,850)
Financing activities
Net proceeds from issue of shares - 4,121,114
Lease payments made (35,122) (2,927)
Net cash generated by/(used in) financing activities (35,122) 4,118,187
Net (decrease)/increase in cash and cash equivalents (2,703,288) 2,105,636
Cash and cash equivalents at the beginning of the period Cash 4,264,690 2,159,054
and cash equivalents at the end of the period 1,561,402 4,264,690
Company Statement of Changes in Equity
For the Year Ended 30 June 2022
Share capital Share premium Other reserves Retained earnings
£ £ £ £ Total
£
As at 1 July 2020 1,280,835 4,923,890 403,483 (4,142,352) 2,465,856
Loss for the period - - - (1,222,665) (1,222,665)
Issue of shares 286,967 4,242,189 - - 4,529,156
Costs of share issue - (408,042) - - (408,042)
Exercise of share warrants - - (80,128) 80,128 -
Share-based payments - - 61,257 - 61,257
As at 30 June 2021 1,567,802 8,758,037 384,612 (5,284,889) 5,425,562
Loss for the period - - - (1,964,209) (1,964,209)
Share-based payments - - 52,704 - 52,704
As at 30 June 2022 1,567,802 8,758,037 437,316 (7,249,098) 3,514,057
Share capital is the amount subscribed for shares at nominal value.
Share premium is the amount subscribed for share capital in excess of nominal
value.
Other reserves arise from the equity element of a convertible loan issued and
converted in the period to 30 June 2017, and from share options granted.
Retained earnings represents accumulated profit or losses to date.
Notes to the Financial Statements
For the Year Ended 30 June 2021
1 General information
SkinBioTherapeutics plc ('the Company') is a public limited company
incorporated in England under the Companies Act and quoted on the AIM market
of the London Stock Exchange (AIM: SBTX). The address of its registered office
is given on page 1.
The principal activity of the Group is the identification and development of
technology that harnesses the human microbiome to improve health.
2 Significant accounting policies and basis of preparation
a) Statement of compliance
The consolidated and company financial statements of SkinBioTherapeutics plc
have been prepared in accordance with International Financial Reporting
Standards ('IFRS') as adopted by the European Union, IFRS Interpretations
Committee (IFRIC) and the Companies Act 2006 applicable to companies reporting
under IFRS.
b) Basis of preparation
The consolidated and company financial statements have been prepared under the
historical cost convention modified by the revaluation of certain financial
instruments. The accounting policies have been applied consistently in all
material respects.
The consolidated and company financial statements are presented in Sterling
(£) as this is the predominant functional currency of the Group and Company,
and is the currency of the primary economic environment in which it operates.
Foreign transactions are accounted in accordance with the policies set out
below.
c) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up
to 30 June each year. Control is achieved where the Company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
d) Application of new and revised International Financial Reporting
Standards (IFRSs) (continued)
Reference Title Summary Application date of standard (Periods commencing on or after)
IFRS3 Business Combinations Amendments updating a reference 1 January 2022
to the Conceptual Framework
IFRS17 Insurance contracts Principles for the recognition, measurement, 1 January 2023
presentation and disclosure of insurance
contracts
Amendments to address concerns and implementation challenges that were 1 January 2023
identified
after IFRS 17 was published
IAS1 Presentation of Amendments regarding the classification of 1 January 2023
Financial Statements liabilities as current or non-current
IAS8 Accounting Policies, Amendments regarding the definition of 1 January 2023
Changes in Accounting accounting estimates
Estimates and Errors
IAS16 Property, Plant and Amendments regarding the treatment of 1 January 2022
Equipment proceeds before intended use
IAS37 Provisions, Contingent Amendments regarding the recogniton of 1 January 2022
Liabilities and cost of fulfilling a contract
Contingent Assets
Annual improvements 2018 - 2020 Cycle Improvements to to IFRS1, IFRS9, IAS41 and IFRS16 1 January 2022 (except for IFRS16
which has no date)
Amendments to IAS 1 Amendments regarding disclosure of 1 January 2023
and IFRS Practice material accounting policies
Statement 2
The adoption of these Standards and Interpretations is not expected to have a
material impact on the financial information of the Group in the period of
initial application when they come into effect.
3 Segmental information
IFRS 8 'Operating Segments' requires operating segments to be determined based
on The Group's internal reporting to the Chief Operating Decision Maker. The
Chief Operating Decision Maker has been determined to be The Board of
Directors which receives information on the basis of the Group's operations in
key geographical territories, based on the Group's management and internal
reporting structure. Based on this assessment the Group consider there to be 2
operating segments.
Administrative expenses are not segmented for accounting purposes.
Year Ended 30 June 2022
UK US Total
£ £ £
Retail sales 57,687 17,074 74,761
Cost of sales (23,264) (6,160) (29,424)
Gross profit 34,423 10,914 45,337
Due to the nature of its activities The Group is not reliant on any individual
major customers.
4
Expenses - analysis by nature
Group
2022 2021
£ £
Other
income
(1,032) (137)
Selling and distribution
costs
43,804 -
Depreciation of right-of-use
asset
29,422 2,429 Depreciation of plant and
equipment
- 1,700
Research and
development
861,383 505,627
Directors remuneration (including share-based
compensation)
624,563 577,216
Staff
costs
142,342 36,224
Foreign exchange
differences
1,127 2,755
Auditors remuneration
- audit
fees
26,250 17,000
- other
services
2,260 3,200
Other operating costs 1,031,340 351,094
Total operating
expenses
2,761,459 1,497,108
5 Finance costs
Group
2022 2021
£ £
Interest
payable
10,135 926
10,135 926
Interest payable represents amounts arising on leases accounted for under IFRS
16.
6 Employees and Directors
Group and company 2022 2021
The average monthly number of employees and senior management was: Number Number
Executive directors 2 2
Non-executive directors 2 2
Employees 4 3
Average total persons employed 8 7
As at 30 June 2022 the Company had 12 employees (2021: 7).
Group and company 2022 2021
Staff costs in respect of these employees were: £ £
Wages and salaries 631,789 561,762
Social security costs 68,816 65,408
Defined contribution pensions 16,883 12,218
Share-based payments (see note 20) 52,704 61,257
Total remuneration 770,192 700,645
All staff were directly employed by SkinBioTherapeutics Plc.
Some of these staff costs are included within research and development and
some in share issue costs.
All the directors above can be considered to be key management and have the
responsibility for planning, directing and controlling, directly or
indirectly, the activities of the Company.
The remuneration of directors and key executives is determined by the
remuneration committee having regard to the performance of individuals and
market trends.
The Company operates a defined contribution pension scheme for employees and
directors. The assets of the scheme are held separately from those of the
Company in independently administered funds. The amounts outstanding at 30
June 2022 are £2,633 (2021: £1,650).
Group and company 2022 2021
Directors' remuneration: £ £
Stuart J. Ashman 368,449 372,718
Manprit Randhawa 14,951 -
Doug Quinn 140,414 136,989
Martin Hunt 63,000 76,509
Dr Cathy Prescott 31,500 35,000
Danielle Bekker 6,250 -
Total remuneration 624,564 621,216
Which is made up of:
Remuneration 572,151 557,747
Amounts receivable under long term incentive schemes 42,603 54,748
Company contributions to pension schemes 9,810 8,721
Total remuneration 624,564 621,216
The number of directors to whom retirement benefits are accruing in respect of
qualifying services under defined contribution pension schemes is 2 (2021: 2).
The highest paid director received total emoluments of £368,449 (2021:
£372,718) during the year.
7 Taxation
Group
Income taxes recognised in profit or
loss
2022 2021
£ £
Current tax
Current period - UK corporation
tax
- -
R&D tax
credit
173,729 67,294
R&D tax credit - prior year 25,893 (2,229)
Tax credit for the
year
199,622 65,065
The tax charge for each period can be reconciled to the loss per the statement
of comprehensive income as follows:
(2,726,257) (1,498,034)
Normal applicable rate of tax 19.00% 19.00%
Loss on ordinary activities multiplied by (517,989) (284,626)
normal rate of tax
Effects of: Depreciation
- 323
Disallowables Capital allowances 12,525 12,015
R&D enhanced deductions - (128,668) - (67,899)
R&D tax credit (199,622) (65,065)
Losses surrendered 227,644 88,179
Unused tax losses carried forward 406,488 252,008
UK tax charge/(credit) (199,622) (65,065)
The Group has an unrecognised deferred tax asset of £1,132,844 (2021:
£765,964) at the period end, which has not been recognised in the financial
statements due to uncertainty of future profits. The Group has an estimated
tax loss of £5,962,339 (2021: £4,031,388) available to be carried forward
against future profits.
8 Loss per share
Group
2022 2021
£ £
Basic and diluted loss per share
(2,526,635) (1,432,969)
Weighted average number of shares 156,780,236 146,697,033
Basic and diluted loss per share (pence) (1.61) (0.98)
As the Group and Company are reporting a loss from continuing operations for
the year then, in accordance with IAS 33, the share options are not considered
dilutive because the exercise of the share options would have an anti-dilutive
effect. The basic and diluted earnings per share as presented on the face of
the income statement are therefore identical.
9 Company's result for the period
The Group has elected to take the exemption under section 408 of the Companies
Act 2006 not to present the Parent Company income statement account.
The loss for the Parent Company for the period was £1,964,209 (2021:
£1,222,665)
10 Property, plant and equipment
Group Company
£ £
Cost
At 1 July 2020 10,200 10,200
Additions - -
At 30 June 2021 10,200 10,200
Additions - -
At 30 June 2022 10,200 10,200
Accumulated amortisation
At 1 July 2020 8,500 8,500
Charge for the period 1,700 1,700
At 30 June 2021 10,200 10,200
Charge for the period - -
At 30 June 2022 10,200 10,200
Net book value At 1 July 2020
1,700 1,700
At 30 June 2021 - -
At 30 June 2022 - -
11 Right-of-use assets
Group Company
£ £
Cost
At 1 July 2020 - -
Additions 145,757 145,757
At 30 June 2021 145,757 145,757
Additions 12,997 12,997
At 30 June 2022 158,754 158,754
Accumulated amortisation
At 1 July 2020 - -
Charge for the period 2,429 2,429
At 30 June 2021 2,429 2,429
Charge for the period 29,422 29,422
At 30 June 2022 31,851 31,851
Net book value At 1 July 2020
- -
At 30 June 2021 143,328 143,328
At 30 June 2022 126,903 126,903
12
Intangible assets
Group Company
£ £
Cost
At 1 July
2020
420,538 420,538
Additions 108,403 108,403
At 30 June
2021
528,941 528,941
Additions 96,813 95,314
At 30 June
2022
625,754 624,255
Accumulated amortisation
At 1 July
2020
- -
Charge for the period - -
At 30 June
2021
- -
Charge for the period 250 -
At 30 June
2022
250 -
Net book value
At 1 July 2020 420,538 420,538
At 30 June
2021
528,941 528,941
At 30 June 2022 625,504 624,255
Intellectual property is to be amortised over the expected period that the
asset generates income. A small part of the IP belonging to the active
subsidiary, AxisBiotix Limited, commenced amortisation in the year ending 30
June 2022. Other IP amortisation is expected to commence in the year ending 30
June 2023.
13 Investments
Company: Investments in subsiduary
undertakings
£
Cost
At 1 July
2020
5
Additions 113,728
At 30 June
2021
113,733
Additions 212,022
At 30 June
2022
325,755
As at 30 June 2022, the Company directly owned the following subsidiaries:
Name of
company
Country of incorporation Proportion of equity
interest
SkinBiotix
Limited
United Kingdom
100% of ordinary shares
AxisBiotix
Limited
United Kingdom
100% of ordinary shares
CleanBiotix
Limited
United Kingdom
100% of ordinary shares
MediBiotix
Limited
United Kingdom
100% of ordinary shares
PharmaBiotix
Limited
United Kingdom
100% of ordinary shares
14
Inventories
Group
2022 2021
£ £
Inventories 388,537 -
388,537 -
15
Trade and other receivables
Group
Company
2022 2021 2022 2021
£ £ £ £
Current
Trade debtors 1,800 - - -
Corporation tax 266,916 183,828 230,391 183,828
Sales taxes recoverable 48,669 19,597 13,560 7,793
Other receivables 11,101 10,000 11,101 10,000
Prepayments 76,580 239,349 66,766 42,095
405,066 452,774 321,818 243,716
Non-current
Amounts due from group undertakings - - 1,142,891 623,688
- - 1,142,891 623,688
The fair values of the Company's current trade and other receivables are
considered to equate to their carrying amounts. The maximum exposure to credit
risk for trade receivables is represented by their carrying amount. There are
no financial assets which are past due but not impaired. No current financial
assets are impaired.
The amounts owed by subsidiary undertakings include a loan to AxisBiotix
Limited for £1,531,177 (2021:
£771,544) which was discounted to £1,205,425 and then impaired by £0,000,
in addition to earlier years impairment of £34,124 to give a current value of
£1,142,891 (2021: £623,688) under IFRS 9, as set out in note
2. There is no interest payable on this loan which is assumed to be payable 3
years from the date of these statements. The Company has confirmed that it has
extended the original repayment date from 30th June 2023 to 30th June 2025.
16
Trade and other payables
Group
Company
2022 2021 2022 2021
£ £ £ £
Current
Trade creditors 72,610 78,842 66,277 71,352
Accruals 366,784 279,922 353,534 260,272
Sales taxes payable 85 - - -
Other taxes Intercompany 31,812 17,726 31,059 17,726
Other payables - 10,451 - 3,330 - 10,233 - 3,330
481,742 379,820 461,103 352,680
Trade and other payables principally consist of amounts outstanding for trade
purchases and ongoing costs. They are non-interest bearing and are normally
settled on 30-day terms. The directors consider that the carrying value of
trade and other payables approximates to their fair value. All trade and other
payables are denominated in Sterling. The Company has financial risk
management policies in place to ensure that all payables are paid within the
credit timeframe and no interest has been charged by any suppliers as a result
of late payment of invoices during the period.
The fair value of trade and other payables approximates their current book
values.
17 Lease liabilities
Group and company 2022 2021
£ £
Maturity analysis
Year 1 32,195 35,122
Year 2 33,989 32,195
Year 3 35,122 33,989
Year 4 32,195 35,122
Year 5 - 32,195
133,501 168,623
Less future interest charges (18,721) (28,769)
114,780 139,854
Analysed as
Current 27,217 25,074
Non-current 100,647 114,780
127,864 139,854
18 Financial instruments
Maturity analysis
A summary table with maturity of financial assets and liabilities presented
below is used by management to manage liquidity risks. The amounts disclosed
in the following tables are the contractual undiscounted cash flows.
Undiscounted cash flows in respect of balances due within 12 months generally
equal their carrying amounts in the statement of financial position, as the
impact of discounting is not material.
The maturity analysis of financial instruments at 30 June 2022 is as follows:
Group
Carrying amount On demand and less than 3 to 12 months 1 to 2 years 2 to 5 years
3 months
£ £ £ £ £
Assets
Cash and cash equivalents 1,804,923 1,804,923 - - -
Trade and other receivables 328,486 328,486 - - -
2,133,409 2,133,409 - - -
Liabilities
Trade and other payables 449,930 449,930 - - -
Lease Liabilities 133,501 5,854 26,341 33,989 67,317
583,431 455,784 26,341 33,989 67,317
18 Financial instruments (continued) Company
Carrying amount
On demand and less than
3 to 12 months
1 to 2 years 2 to 5 years
3 months
£ £ £ £ £
Assets
Cash and cash equivalents 1,561,402 1,561,402 - - -
Trade and other receivables 1,786,229 255,052 - - 1,531,177
3,347,631 1,816,454 - - 1,531,177
Liabilities
Trade and other payables 430,044 430,044 - - -
Lease Liabilities 133,501 5,854 26,341 33,989 67,317
563,545 435,898 26,341 33,989 67,317
The maturity analysis of financial instruments at 30 June 2021 is as follows:
Group
Carrying amount On demand and less than 3 to 12 months 1 to 2 years 2 to 5 years
3 months
£ £ £ £ £
Assets
Cash and cash equivalents 4,609,889 4,609,889 - - -
Trade and other receivables 213,425 213,425 - - -
4,823,314 4,823,314 - - -
Liabilities
Trade and other payables 362,094 362,094 - - -
Lease Liabilities 168,623 8,781 26,341 32,195 101,306
530,717 370,875 26,341 32,195 101,306
Company
Carrying amount On demand and less than 3 to 12 months 1 to 2 years 2 to 5 years
3 months
£ £ £ £ £
Assets
Cash and cash equivalents 4,264,690 4,264,690 - - -
Trade and other receivables 973,165 201,621 - 771,544 -
5,237,855 4,466,311 - 771,544 -
Liabilities
Trade and other payables 334,954 334,954 - - -
Lease Liabilities 168,623 8,781 26,341 32,195 101,306
503,577 343,735 26,341 32,195 101,306
19 Share capital
Share capital Share premium
Company - Issued and fully paid Number of
Shares £ £
As at 30 June 2020 128,083,494 1,280,835 4,923,890
Ordinary shares issued at 16p per share 27,806,428 278,064 4,170,964
Costs related to shares issued (408,042)
Warrants issued at 9p per share 890,314 8,903 71,225
As at 30 June 2021 156,780,236 1,567,802 8,758,037
As at 30 June 2022 156,780,236 1,567,802 8,758,037
On 2 November 2020 27,806,428 ordinary shares were issued by way of a placing
at a price of 16p per share to raise finance.
On 19 March 2021 890,314 ordinary shares were issued in connection with the
exercise of share warrants at an exercise price of 9p per share payable in
cash.
Share capital is the amount subscribed for shares at nominal value, issued and
fully paid. Share premium is the amount subscribed for share capital in excess
of nominal value.
20 Share-based payments
Share Options
The Group operates share-based payment arrangements to remunerate directors
and others providing similar services in the form of a share option scheme.
The exercise price of the option is normally equal to the market price of an
ordinary share in the Group at the date of grant. Each share option converts
into one ordinary share of the Group on exercise. No amounts are paid or
payable by the recipient on receipt of the option. The options carry neither
rights to dividends nor voting rights.
Movements in the number of share options outstanding and their related
weighted average exercise prices are as follows:
Group and company 2022 2021
Number of options Weighted average exercise Number of Weighted
price options average exercise price
£ £
Outstanding at 1 July 16,729,343 0.11 16,729,343 0.11
Granted during the year 650,000 0.38 - -
Forfeited/cancelled during the year - - - -
Outstanding at 30 June 17,379,343 0.12
16,729,343 0.11
On 11 January 2022, 650,000 options were granted at an exercise price of
£0.376 per share, split into 2 deed pools with an equal number of share
option in each pool. Deed pool 9 is exercisable based upon the achievement of
an 80p share price for more than a 30-day continuous period. Deed pool 10 is
exercisable based upon the achievement of an 150p share price for more than a
30-day continuous period. The total charge recognised for the year ended 30
June 2022 for these share options is £10,101 (2021: £nil).
20
Share-based payments (continued)
The fair values of the share options issued in the year were derived using the
Black Scholes model. The total charge recognised for the year ended 30 June
2022 for share options is £52,704 (2021: £61,257). The following assumptions
were used in the calculations:
Deed pool 1 2 3a 3b 3c
Grant date 05/04/17 05/04/17 05/04/17 05/04/17 05/04/17
Exercise price 9p 9p 9p 9p 9p
Share price at grant date 9p 9p 9p 9p 9p
Risk-free rate 0.24% 0.24% 0.16% 0.16% 0.16%
Volatility 60% 60% 60% 60% 60%
Expected life 3.5 years 3.5 years 2.75 years 2.75 years 2.75 years
Fair value 2.58p 1.85p 2.30p 2.30p 2.30p
Deed pool 4 5 6 7 8
Grant date 18/04/19 18/04/19 18/04/19 03/03/20 08/04/20
Exercise price 18p 18p 18p 9.5p 9p
Share price at grant date 18p 18p 18p 9.5p 7p
Risk-free rate 0.75% 0.75% 0.75% 0.29% 0.12%
Volatility 60% 60% 60% 80% 80%
Expected life 3.5 years 3.5 years 3.5 years 0 years 2 years
Fair value 2.85p 3.99p 3.48p 9.50p 0.87p
Deed pool 9 10
Grant date Exercise price 11/01/22 11/01/22
Share price at grant date 37.6p 37.6p
Risk-free rate 37.6p 37.6p
0.758% 0.856%
Volatility 75% 75%
Expected life Fair value 2 years 7.35p 3 years 8.87pp
The closing share price per share at 30 June 2022 was 20.25p (30 June 2021:
63.50p).
Expected volatility is based on a conservative estimate for an AIM listed
entity. The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
21 Related party transactions
Group and company 2022 2021
Key management personnel compensation £ £
Short-term employee benefits including social security costs 694,844 679,046
Post-employment benefits 11,239 10,036
Share-based payments 42,603 61,257
748,686 750,339
Compensation figures above include directors and key management personnel.
Detailed remuneration disclosures for directors are provided in the employees
and directors note on page 39, and in the Directors Report.
21
Related party transactions (continued)
Transactions with other related parties
During the period ended 30 June 2022, the Company was charged fees of
£125,609 (2021: £116,600) by Quinn Corporate Services Ltd, a company in
which Doug Quinn, a director of the Company, is also a director. These fees
relate to Doug Quinn's consultancy services to the Company. As at 30 June 2022
£nil (2021: £9,500) was outstanding.
During the period ended 30 June 2022, the Company was charged fees of £50,400
(2021: £58,000) by Invictus Management Ltd, a company in which Martin Hunt, a
director of the Company, is also a director. These fees relate to Martin
Hunt's consultancy services to the Company. As at 30 June 2022 £5,040 (2021:
£4,800) was outstanding.
During the period ended 30 June 2022, the Company was charged fees of £25,200
(2021: £29,000) by Biolatris Ltd, a company in which Dr Cathy Prescott, a
director of the Company, is also a director. These fees relate to Dr Cathy
Prescott's consultancy services to the Company. As at 30 June 2022 £nil
(2021: £nil) was outstanding.
22 Ultimate controlling party
No one shareholder has control of the Company.
23 Events after the reporting date
The Company has evaluated all events and transactions that occurred after 30
June 2022 up to the date of signing of the financial statements.
No material subsequent events have occurred that would require adjustment to
or disclosure in the financial statements.
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