REG - Surgical Innovations - Half-year Report
30/09/2024 07:00
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RNS Number : 1048G Surgical Innovations Group PLC 30 September 2024
Surgical Innovations Group plc
("Surgical Innovations", the "Group" or the "Company")
Half-year Report
Interim results for the six months ended 30 June 2024
Surgical Innovations Group plc (AIM: SUN), the designer, manufacturer and
distributor of innovative medical technology for minimally invasive surgery,
reports its unaudited financial results for the six-month period ended 30 June
2024 ("2024 H1").
Commercial and Operational Highlights
· Surgical Innovations ("SI") branded products saw strong growth across all key
markets as sustainability continues to resonate with healthcare providers.
· Strong OEM sales performance, as supply chain issues were resolved and
backorder position cleared.
· Enhanced sustainability training and marketing positively impacting key
markets, especially in Europe and Canada.
· Transition to EU Medical Device Regulation ("MDR") remains on track; cost
burden beginning to reduce.
· Operational improvement plan implemented to reduce costs and improve margins,
with benefits expected to begin to be realised in the second half.
· Inventory reduction programme initiated to return working capital towards
normalised levels.
· New UK distribution expanded contract signed with Apsen Surgical and a new
contract signed with Cipher Surgical, both providing continuing and new
revenue streams.
Financial Highlights
· Revenues increased 9.3% on prior year to £6.2m (2023 H1: £5.7m)
· Gross profit margin of 32.9% (2023 FY: 28.7%; 2023 H1: 33.0%). Gross margins
have recovered from weaker margins experienced in 2023 H2 of 24.9%
· Adjusted EBITDA(1) profit of £0.2m (2023 H1: £0.1m)
· Adjusted operating loss(1) of £0.1m (2023 H1: £0.3m loss)
· Adjusted EPS amounted to a loss(1) of 0.020p per share (2023 H1: 0.037p loss)
· Net debt(2) at end of period of £0.5m (as at 31 Dec 2023: £0.4m net cash)
· Gross cash headroom at the end of the period of £1.2m (as at 31 Dec 2023:
£2.2m)
(1) Adjusted EBITDA, adjusted operating (loss)/ profit and adjusted EPS are
stated before deducting non-recurring exceptional costs of £0.30m (2023 H1:
£0.01) and share based payment costs of nil (2023 H1 £0.02m).
(2) Net debt is presented Pre-IFRS 16 and equals cash less bank debt
Current Trading and Outlook
· Challenges persist in the UK market with changes in the NHS Supply Chain
("NHSSC") inventory management and industrial action impacting purchasing
patterns; however, new product introductions and the operational restructuring
enables the Group to offset these headwinds.
· Sales of SI-branded products in key markets remains strong, further supported
by the enhanced training and marketing provided to partners.
· OEM sales expected to normalise in H2.
· LogiTube presents significant global opportunities, with plans to roll it out
to key international markets in H2.
· Operational restructuring through H1 and into H2 will improve efficiencies and
drive margin growth towards the year-end and into 2025.
· Inventory reduction will improve working capital towards the end of 2024.
· Improvements to processes and structure are expected to drive the Group's
future profitability from 2025 onwards.
Jonathan Glenn, Chairman of Surgical Innovations Group Plc, said: "I am
pleased with the progress Surgical Innovations has made over the first half of
this financial year. We have continued to grow revenues and have delivered an
adjusted EBITDA profit in the period.
"The operational plan implemented is expected to deliver cost benefits in the
second half of the year and positions the business for increased profitability
in 2025. The strength of SI-branded products remains robust, though challenges
in the UK market are likely to persist over the near term. However, additional
new product introductions and the realignment of the sales structure are
anticipated to improve the UK business. In the first half, OEM sales were
boosted by the clearing of backorders and will return to more normalised
levels in the second half. Modest revenue and margin improvements are expected
to materialise in Q4 and continue into 2025.
Investor briefing
David Marsh, Chief Executive Officer, and Chris Martin, Chief Financial
Officer, will provide a live presentation relating to the interim results via
the Investor Meet Company platform on the new date of Monday 14 October 2024
at 4:00 p.m. BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9:00 a.m. the day before the meeting or at any time during the live
presentation. Investors can sign up to Investor Meet Company for free and add
to meet Surgical Innovations Group plc via:
https://www.investormeetcompany.com/surgical-innovations-group-plc/register-investor
(https://www.investormeetcompany.com/surgical-innovations-group-plc/register-investor)
Investors who already follow Surgical Innovations Group plc on the Investor
Meet Company platform will automatically be invited.
For further information please contact:
Surgical Innovations Group Plc www.sigroupplc.com (http://www.sigroupplc.com/)
David Marsh, CEO Tel: +44 (0)113 230 7597
Chris Martin, CFO
Walbrook PR Tel: +44 (0)20 7933 8780 or si@walbrookpr.com
(Financial PR & Investor Relations)
Paul McManus / Charlotte Edgar Mob: +44 (0)7980 541 893 / +44 (0)7884 664 686
Singer Capital Markets +44 (0)20 7496 3000
(Nominated Adviser & Broker)
Alex Bond / Oliver Platts
About Surgical Innovations Group plc
Strategy
The Group specialises in the design, manufacture, sale and distribution of
innovative, high quality medical products, primarily for use in minimally
invasive surgery. Our product and business development is guided and supported
by a key group of nationally and internationally renowned surgeons across the
spectrum of minimally invasive surgical activity.
We design, manufacture and source our branded port access systems, surgical
instruments and retraction devices which are sold directly in the UK home
market through our subsidiary, Elemental Healthcare ("Elemental"), and
exported widely through a global network of trusted distribution partners.
Many of our products in this field are based on a "resposable" concept, in
which the products are part reusable, part disposable, offering a high quality
and environmentally responsible solution at a cost that is competitive against
fully disposable alternatives.
Elemental also has exclusive UK distribution for a select group of specialist
products employed in laparoscopy, bariatric and metabolic surgery, hernia
repair and breast reconstruction.
In addition, we design and develop medical devices for carefully selected OEM
partners. We have a number of long-term relationships with key partners
including the design, development and manufacture of the FIX8 device for
Advanced Medical Solutions plc ("AMS") and more recently for a new
collaboration with robotic surgery company, CMR Surgical Limited ("CMR"), to
design and develop an access device for their unique instrumentation.
We aim for our brands to be recognised and respected by healthcare
professionals in all major geographical markets in which we operate and
provide, by development, partnership or acquisition, a broad portfolio of cost
effective, procedure specific surgical instruments and implantable devices
that offer reliable solutions to genuine clinical needs in the operating
theatre environment.
Operations
The Group currently employs approximately 80 people across one site in Leeds
in the UK. Elemental was acquired by the Group on 1 August 2017 and provides
direct sales representation in the UK home market and a range of third-party
products for UK distribution. Elemental was originally based in Berkshire and
was successfully relocated in 2021, with all operations now located at the
Leeds site.
Further information
Further details of the Group's businesses are available on the following
websites:
www.sigroupplc.com (http://www.sigroupplc.com)
www.surginno.com (http://www.surginno.com)
www.elementalhealthcare.co.uk (http://www.elementalhealthcare.co.uk)
Investors and others can register to receive regular updates by emailing
si@walbrookpr.com
Surgical Innovations Group plc
Chairman's Statement
For the six-month period ended 30 June 2024
Market and Financial Overview
Trading in the first half of the year increased 9% to £6.17m (2023 H1:
£5.65m). This was predominantly as a result of strong SI-branded and OEM
sales, however the UK saw an overall drop in revenue with some significant
headwinds especially in the early part of 2024.
In Europe, Canada and the UK, our investment in training and the development
of marketing tools to promote the sustainability message has proven
successful, resulting in strong sales growth in these regions. In Europe, this
effort has led to an impressive underlying sales increase of 28%, driving
revenue to £0.89m in 2024 H1, up from £0.69m in 2023 H1.
The USA has seen a 15% increase bringing revenue to £0.63m in 2024 H1, up
from £0.55m in the same period the previous year. This growth has been
primarily driven by sales of scissors and instruments, with access devices
beginning to gain traction.
APAC revenues showed modest growth of 2% over the previous year, reaching
£0.54m. In 2024 H1, purchasing slowed due to stocking orders in India and
Japan in 2023. However, this trend has normalized in 2024 H2, with India in
particular, seeing some significant account conversions to drive disposable
sales.
The UK faced a challenging start to the year, with H1 revenues falling 8% to
£2.74m. Sales were adversely affected by NHS industrial action and changes in
NHSSC inventory management. Additionally, the shift away from lower-margin,
time consuming products has allowed focus on key distribution and SI branded
devices. SI Branded products grew 17% to £1.02m up from £0.87m in H1 2023.
ROW has experienced robust growth, up 23% from the previous year, with sales
of £0.28m, largely driven by our new Canadian partner who has embraced our
sustainability messaging. Significant account conversions are planned for H2
and are expected to further support growth in this region.
OEM revenues increased by 63%, reaching £1.1m, primarily due to clearing
backorders. Increasing supply chain and labour costs have impacted margins.
Revenues from OEM are expected to normalise in H2.
Commercial or underlying margins of 34.4% have reduced in H1 by 3.5% compared
to 2023 FY margins (2023 H1: 40.53%, 2023 FY: 37.87%). This reflects
significant inflationary increases in material costs. While commercial margins
have declined, the reported gross margin of 32.9%, which includes the net cost
of manufacturing, is in line with 2023 H1 and has improved by 4.2% on the 2023
FY margins (2023 H1: 33.0%; 2023 FY: 28.7%). This is the result of operational
improvements in efficiency and manning levels and less disruption within our
supply chain.
A number of customer price increases have been implemented in H1 with further
rises planned in H2 as fixed term customer agreements are renewed. This,
together with continuing operational improvements, will help maintain gross
margins in H2.
Other operating expenses increased to £2.47m (2023 H1: £2.17m). The increase
is due to one-off costs relating to a restructuring programme across the
business. Excluding the effect of non-recurring items, operating expenses were
on a par with 2023 H1 at £2.16m. Other operating expenses in 2024 H2 are
expected to reduce from 2024 H1 as the benefits from the re-structure begin to
be fully realised.
The Group generated an adjusted EBITDA profit for the period of £0.19m (2023
H1: £0.09m). The full effect of the savings from the restructuring, actions
on price and further operational efficiencies will deliver improved
profitability in H2.
Adjusted operating loss before tax for the period (before non-recurring items
and share based payment charges) was £0.13m (2023 H1: £0.28m loss). The
reported net loss before taxation amounted to £0.49m against a net loss of
£0.37m in 2023 H1.
There was no reported tax charge/credit in the period (2023 H1: nil). In terms
of deferred tax, the Group continues to hold substantial corporation tax
losses on which management takes a cautious view, and consequently, the Group
does not recognise a corresponding deferred tax asset.
Adjusted net earnings per share amounted to a loss of £0.020p (2023 H1:
£0.037p loss). The net total comprehensive income for the period amounted to
a loss of £0.49m (2023 H1: loss of £0.37m).
For the first half of 2024, cash used in operations was £0.49m (2023 FY:
£0.26m generated, 2023 H1: £0.07m used). The outflow of £0.49m, however,
does include £0.30m of non-recurring costs relating to the restructure. After
continued investment into R&D of £0.16m (2023 FY: £0.40m, 2023 H1:
£0.12m), capital expenditure of £0.04m (2023 FY: £0.28m, 2023 H1: £0.18m)
and the financing costs of the existing bank loan and lease liabilities, the
Group had available cash balances of £1.23m (31 Dec 2023: £2.21m).
The Directors have considered the available cash resources of the Group and
the current internal anticipated forecasts and have a reasonable expectation
that the Group have adequate resources. The Group is expected to continue to
generate cash from operations over the next 12 months as the Group benefits
from a lower cost base following restructuring, continues to improve
operational efficiencies and reduce inventory. This will therefore provide
ample support to continue in operational existence for the foreseeable future,
considered to be at least 12 months from the date of approval of the financial
statements. The covenant test for the period ending 30 June 2024 has been
passed.
Market Outlook
The UK faced a challenging start to the year, primarily due to the NHSSC
shifting to a 'Just-in-Time' model, which led to reduced inventory levels and
lower purchasing activity. Purchasing levels have now normalised.
Additionally, ongoing industrial action by junior doctors impacted the volume
of elective surgery.
The strategic decision to withdraw from the low-margin, time-intensive
synthetic hernia mesh business, allowing for a greater focus on own branded
products and higher margin third-party opportunities has impacted sales.
However, this has allowed the sales team to refocus on SI-Branded product
resulting in significant revenue growth of 17%, rising from £0.87m in 2023 H1
to £1.02m in 2024 H1.
Elemental has expanded its portfolio by adding several third-party suppliers,
some of which already generate revenue in the UK. While this is expected to
have a modest impact on revenue in 2024, the effect will be more pronounced in
2025. Additionally, there is a pipeline of new third-party opportunities set
for introduction in 2024 Q4 which, should the Company convert, will further
contribute to revenue growth in 2025.
Sustainability messaging initiatives continue to drive sales across key
markets, supported by ongoing investments in sales support, marketing,
training, and the ongoing development of the financial and environmental
calculator. These tools have proven highly effective in fostering growth. The
increase in SI-branded product sales is largely driven by a strong focus on
sustainability; this focus continues in H2 and significant account conversions
in key markets will continue to drive growth into 2025.
The rollout of LogiTube is accelerating in the second half of the year, with
key market launches in Europe, Canada, the Middle East, and Australia.
Additionally, the rapid development of the Yelloport Elite XL cannula is
enabling deeper penetration into the bariatric market, particularly for
gastric bypass and gastric sleeve procedures. The cost-down project
highlighted at YE 2023 continues to progress focusing on both material and
design changes to improve manufacturing efficiencies.
Operational and Regulatory Activities
An operational improvement plan has been implemented to enhance manufacturing
efficiency, reduce costs, and improve margins. The restructuring process is
now complete, and the benefits are expected to be realised throughout the
second half of the year, with a significant boost to profitability anticipated
in 2025.
The new CFO brings extensive manufacturing expertise to the company, enhancing
reporting accuracy and cost management. With a focus on improving financial
control, the business is actively implementing cost controls to drive greater
operational efficiency.
The regulatory pathway for the EU Medical Device Regulation ("MDR") remains on
track, despite the transition deadline to MDR being revised, which has shifted
the notified body's focus to more immediate priorities. The Company's Quality
Management System, technical files, and microbiology data have been made
MDR-compliant, successfully audited by BSI, and fully approved. Progress
continues on the product technical files, with two out of three approved for
MDR, while the final file is currently under clinical review. Additionally,
the UKCA mark has been obtained, and the Medical Device Single Audit Program
("MDSAP") audit has been successfully completed.
Current Trading and Outlook
The operational plan implemented is expected to deliver cost benefits in the
second half of the year and positions the business for increased profitability
in 2025. The strength of SI-branded products remains robust, though challenges
in the UK market are likely to persist over the near term. However, additional
new product introductions and the restructuring of the organisation, already
implemented, are anticipated to improve the performance of the business going
forward.
Jonathan Glenn
Chairman
30 September 2024
Unaudited consolidated income statement for the six months ended 30 June 2024
Unaudited Unaudited Audited
six months six months Year ended
ended 30 June ended 30 June 31 December
2024 2023 2023
Notes £'000 £'000 £'000
Revenue 3 6,175 5,650 12,014
Cost of sales (4,141) (3,786) (8,566)
Gross profit 2 2,034 1,864 3,448
Other operating expenses (2,466) (2,170) (4,044)
Other income - - -
Adjusted EBITDA profit * 189 95 211
Amortisation of intangible assets (84) (140) (279)
Impairment of intangible assets - - -
Depreciation of tangible assets (233) (231) (476)
Exceptional items (304) (8) (8)
Share based payments (22) (44)
Operating (loss)/profit (432) (306) (596)
Finance costs 4 (55) (68) (132)
Finance income - - -
Loss before taxation (487) (374) (728)
Taxation credit/(charge) 5 - 219
(Loss)/profit and total comprehensive income (487) (374) (509)
Earnings per share
Basic 6 (0.052p) (0.040p) (0.055p)
Diluted 6 (0.052p) (0.040p) (0.055p)
* Adjusted EBITDA is earnings before interest, depreciation, amortisation
(including impairment) and exceptional items.
Unaudited consolidated statement of changes in equity for the six months ended 30 June 2024
Notes Share capital Share premium Capital Merger Retained Total
reserve reserve earnings
£'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 January 2024 9,328 6,587 329 1,250 (7,010) 10,484
Employee share-based payment charge - - - -
Total - Transaction with owners 9,328 6,587 329 1,250 (7,010) 10,484
Loss and total comprehensive income for the period - - - - (487) (487)
Unaudited balance as at 30 June 2024 9,328 6,587 329 1,250 (7,497) 9,997
Unaudited consolidated balance sheet as at 30 June 2024
Unaudited Unaudited Audited
30 June 30 June 31 December
2024 2023 2023
Notes £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 806 925 898
Right of Use Assets 700 903 804
Intangible assets 6,605 6,387 6,529
8,111 8,215 8,231
Current assets
Inventories 3,300 3,566 2,854
Trade and other receivables 9 2,443 2,137 2,023
Cash at bank and in hand 232 1,412 1,212
5,975 7,115 6,089
Total assets 14,086 15,330 14,320
Equity and liabilities
Equity attributable to equity holders of the parent company
Share capital 9,328 9,328 9,328
Share premium account 6,587 6,587 6,587
Capital reserve 329 329 329
Merger reserve 1,250 1,250 1,250
Retained earnings (7,497) (6,883) (7,010)
Total equity 9,997 10,611 10,484
Non-current liabilities
Dilapidation provision 165 165 165
Lease liability 485 670 549
Borrowings 8 356 679 502
1,006 1,514 1.216
Current liabilities
Trade and other payables 9 1,977 2,188 1,632
Accruals 551 411 377
Lease liability 203 254 259
Borrowings 8 352 352 352
3,083 3,205 2,620
Total liabilities 4,089 4,719 3,836
Total equity and liabilities 14,086 15,330 14,320
Unaudited consolidated cash flow statement for the six months ended 30 June
2024
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Notes £'000 £'000 £'000
Cash flows from operating activities
Loss after tax for the year (487) (374) (509)
Adjustments for:
Taxation - (219)
Finance Income - - -
Finance Costs 4 55 68 131
Other Income-CBILS interest grant - - -
Depreciation of property, plant and equipment 129 115 244
Amortisation and impairment of intangible assets 84 140 279
Depreciation of right of use assets 104 116 234
Share-based payment charge 22 30
Foreign Exchange (loss)/gain (29) 32 27
Increase in inventories (446) (404) 308
Increase in current receivables (421) (82) 34
Increase in trade and other payables 518 292 (299)
Cash (used in)/ generated from operations (493) (73) 260
Taxation received 5 - 219
Interest received - - -
Interest paid (34) (39) (79)
Net cash (used in)/generated from operating activities (527) (112) 400
Payments to acquire property, plant and equipment (37) (181) (284)
Acquisition of intangible assets (159) (124) (404)
Net cash used in investment activities (196) (305) (688)
Repayment of CBILS 8 (147) (176) (353)
Repayment of lease liabilities 7 (139) (162) (319)
Net cash used in financing activities (286) (338) (672)
Net decrease in cash and cash equivalents (1,009) (755) (960)
Cash and cash equivalents at beginning of period 1,212 2,199 2,199
Effective exchange rate fluctuations on cash held 29 (32) (27)
Net cash and cash equivalents at end of period 232 1,412 1,212
Notes to the Interim Financial Information
1. Basis of preparation of interim financial information
The interim financial information was approved by the Board of Directors on 27
September 2024. The financial information set out in the interim report is
unaudited.
The interim financial information has been prepared in accordance with the AIM
Rules for Companies and on a basis consistent with the accounting policies and
methods of computation as published by the Group in its annual report for the
year ended 31 December 2023, which is available on the Group's website.
The Group has chosen not to adopt IAS 34 Interim Financial Statements in
preparing these interim financial state- ments and therefore the interim
financial information is not in full compliance with International Financial
Re- porting Standards as adopted for use in the European Union.
The financial information set out in this interim report does not constitute
statutory financial statements as de- fined in section 434 of the Companies
Act 2006. The figures for the year ended 31 December 2023 have been extracted
from the statutory financial statements which have been filed with the
Registrar of Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under sections 498(2) and 498(3)
of the Companies Act 2006.
Going concern and funding
The Directors have considered the available cash resources of the Group and
the current internal anticipated forecasts and have a reasonable expectation
that the Group have adequate resources. The Group is expected to continue to
generate cash from operations over the next 12 months as the Group benefits
from a lower cost base following restructuring, continues to improve
operational efficiencies and reduce inventory. This will therefore provide
ample support to continue in operational existence for the foreseeable future,
considered to be at least 12 months from the date of approval of the financial
statements.
2. Disaggregation of gross margin
The Group has disaggregated margins in the following table: Six months Six months 12 months
ending 30 ending 30 June 2023 ending 31
June 2024 (unaudited) (unaudited) Dec 2023
(audited)
£'000 £'000 £'000
Revenue 6,175 5,650 12,014
Cost of Sales (4,053) (3,360) (7,464)
Underlying Gross Margin 2,122 2,290 4,550
Underlying Gross Margin % 34.36% 40.53% 37.87%
Net Cost of Manufacturing (88) (426) (1,102)
Contribution Margin 2,034 1,864 3.448
Contribution Margin % 32.94% 32.99% 28.70%
Underlying gross margin (excluding net costs of manufacturing) is an adjusted
KPI measure. Nets costs of Manufacturing are overheads that have not been
effectively absorbed due to reduced productivity.
Adjusted KPIs are used by the Board to understand underlying performance and
exclude items which distort comparability. The method of adjustments is
consistently applied but are not defined in International Financial Reporting
Standards (IFRS) and, therefore, are considered to be non-GAAP (Generally
Accepted Accounting Principles) measures. Accordingly, the relevant IFRS
measures are also presented where appropriate.
3. Disaggregation of revenue
The Group has disaggregated revenues in the following table: SI Brand Distribution OEM Total
Six months ended 30 June 2024 (unaudited) £'000 £'000 £'000 £'000
United Kingdom 1,074 1,734 1,021 3,829
Europe 888 - - 888
US 535 - 92 627
APAC 549 - - 549
Rest of World 282 - - 282
3,328 1,734 1,113 6,175
SI Brand Distribution OEM Total
Six months ended 30 June 2023 (unaudited) £'000 £'000 £'000 £'000
United Kingdom 920 2,105 614 3,639
Europe 694 - - 694
US 479 - 69 548
APAC 541 - - 541
Rest of World 228 - - 228
2,862 2,105 683 5,650
SI Brand Distribution OEM Total
Year ended 31 December 2023 (audited) £'000 £'000 £'000 £'000
United Kingdom 1,935 4,255 1,508 7,698
Europe 1,478 - - 1,478
US 1,032 - 326 1,358
APAC 998 - - 998
Rest of World 482 - - 482
5,925 4,255 1,834 12,014
Revenues are allocated geographically on the basis of where revenues were
received from and not from the ultimate final destination of use.
4. Finance Costs
Finance costs: Six month ended 30 June 2024 Six month ended 30 June 12 months
2023 ended 31 Dec
2023
£'000 £'000 £'000
On bank borrowings 34 40 79
On right-of-use assets lease liabilities 21 28 53
55 68 132
5. Tax
Current taxation
There was no reported tax charge/credit in the period.
Deferred taxation
Overall, the Group continues to hold substantial tax losses on which it holds
a cautious view and consequently the Group has chosen not to recognise those
losses fully.
6. Earnings per share
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Earnings per share
Basic (0.052p) (0.040p) (0.055p)
Diluted (0.052p) (0.040p) (0.055p)
Adjusted (0.020p) (0.037p) (0.051p)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of shares in issue.
Diluted earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the diluted weighted average number of shares in
issue. Adjusted Earnings per share is calculated by dividing the adjusted
earnings attributable to ordinary shareholders (profit before non-recurring
costs, amortisation, impairment costs and share based payments) by the
weighted average number of shares in issue.
The anti-dilutive effect of unexercised shares options has not been taken into
account and therefore the diluted earnings per share is equal to the basic
earnings per share.
The Group has one category of dilutive potential ordinary shares being share
options issued to Directors and employees. The impact of dilutive potential
ordinary shares on the calculation of weighted average number of shares is set
out below.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
'000s '000s '000s
Number of shares in issue 932,816 932,816 932,816
Dilutive effect of unexercised share options 1,211 1,240 850
Diluted number of shares 934,027 934,056 933,666
7. Leases
Impact on the statement of financial position
30 June 2024 30 June 2023 31 December 2023
Assets Liabilities Assets Liabilities Assets Liabilities
£'000 £'000 £'000 £'000 £'000 £'000
Right of use assets and lease liabilities 700 688 903 924 804 808
Of which are:
Current lease liabilities 203 254 259
Non-Current lease liabilities 485 670 549
Impact on Equity 12 (21) (4)
Total impact on statement of financial position 700 700 903 903 804 804
8. Net borrowings
At amortised cost Six months ended Six months ended 12 months ended 31 December 2023
30 June 2024 30 June 2023
£'000 £'000 £'000
Cash & cash equivalents 232 1,412 1,212
Current bank borrowings (352) (352) (352)
Non-current bank borrowings (356) (679) (502)
Adjusted Net Cash (476) 381 358
Current lease liabilities (203) (254) (259)
Non-current lease liabilities (485) (670) (549)
Net Cash (1,164) (543) (450)
· Group borrowings consist of a CBILS loan (initially £1.5m) with Virgin Money
repayable by May 2026. Interest rate of 2.94% repayable monthly over the Bank
of England base rate. Monthly instalments are £0.029m.
· Covenants attached to the CBILS comprise of EBITDA to debt servicing costs
minimum 1.25x on a 12month rolling basis.
· The covenant test for the period ending 30 June 2024 was passed.
· The Group has an Invoice Discounting facility of £1.0m with Virgin Money,
with a 2.5% margin and a minimum administration fee of £0.018m.
9. Financial Instruments
The financial assets of the Group are categorised as follows:
At amortised cost Six months ended 30 Six months ended 30 June 12 months
June 2024 2023 ended 31 Dec
2023
£'000 £'000 £'000
Trade receivables 1,874 1,566 1,582
Cash and cash equivalents 232 1,412 1,212
2,106 2,978 2,794
The financial liabilities of the Group are categorised as follows:
At amortised cost Six months ended 30 June Six months ended 30 June 12 months
2024 2023 ended 31 Dec
2023
£'000 £'000 £'000
Trade payables 1,458 1,756 1,169
Other payables 312 268 245
Current lease liabilities 203 254 259
Non-current lease liabilities * 485 670 549
Current bank borrowings 352 352 352
Non-current bank borrowings * 356 679 502
3,166 3,979 3,076
*Amortised costs are considered to the equivalent amount of fair value
Trade and other payables Six months ended 30 Six months ended 30 June 12 months
June 2024 2023 ended 31 Dec
2023
£'000 £'000 £'000
Trade payables 1,458 1,756 1,169
Other tax and social security 207 164 218
Corporation tax - - -
Other payables 312 268 245
1,977 2,188 1,632
10. Interim Report
This interim report is available at www.sigroupplc.com
(http://www.sigroupplc.com/) . (http://www.sigroupplc.com/)
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