REG - Tristel PLC - Half-year Report
21/02/2022 07:01
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RNS Number : 1925C Tristel PLC 21 February 2022
TRISTEL plc
("Tristel", the "Company" or the "Group")
Half-year Report
Product rationalisation to deliver faster top-line growth and higher
profitability
Continued progress towards commercial launch in North America
Tristel plc (AIM: TSTL), the manufacturer of infection prevention products
utilising proprietary chlorine dioxide technology, announces unaudited interim
results for the six months to 31 December 2021.
During the period the Company refocused the business to accelerate top-line
growth and increase profitability as it exits the pandemic. This focus is on
Tristel's proprietary chlorine dioxide technology and the hospital market.
These represent "Continuing operations". The Company has discontinued the
manufacture and sale of most products in its Anistel and Crystel product
ranges and these represent "Discontinued operations". The Discontinued
operations command substantially lower margins, and the Board considers that
they will not contribute to future revenue growth without significant
investment.
Financial highlights (from Continuing operations unless otherwise stated)
· Underlying revenues* up 5% to £14.5m (H1 21: £13.8m) and 17% higher
than pre-pandemic H1 20
o Reported revenues down 7% to £13.6m (H1 21: £14.7m)
· Gross margin of 83% (H1 21: 83%) against 53% for Discontinued
products
· Reported EBITDA of £2.4m (H1 21: £3.6m)
o Adjusted† EBITDA of £3.3m (H1 21: £3.9m)
· Reported EBITDA margin of 18% (H1 21: 25%)
o Adjusted† EBITDA margin 24% (H1 21: 26%)
· Reported Profit before tax of £1m (H1 21: £2.4m)
o Adjusted† Profit before tax of £1.9m (H1 21: £2.6m)
· Diluted EPS 2.5p (H1 21: 3.96p)
· Interim dividend 2.62p per share (H1 21: 2.62p)
· Cash generated from operations £3.4m (H1 21: £4.2m)
· Cash of £8.8m (H1 21: £7.3m)
· Write down of intangible assets associated with Discontinued
operations of £2.4m
· Revenue from Discontinued operations £1.5m (H1 21: 2.0m) down 27%
* Underlying revenues adjusted for £0.9m NHS Brexit pre-stocking in H1 21,
unwound in H1 22
† Adjusted for share-based payment charge of £0.9m (H1 21: £0.3m)
Operational highlights
· Tristel (medical device disinfection) and Cache (hospital surface
disinfection) are the two product portfolio brands that represent Continuing
operations and, in the view of the Board, the best opportunity to deliver a
faster rate of top-line growth and increased profitability
· Animal health (Anistel) and pharma/life sciences (Crystel) product
ranges discontinued
· Restarted state-by-state registration of EPA-approved Duo and
progressed FDA De Novo submission for Duo, anticipating submission to FDA by
30 June
Commenting on current trading, Paul Swinney, Chief Executive of Tristel, said:
"We are pleased with our progress in the first half. We are observing a
recovery in hospital activity in most of our markets.
"We are getting closer to entering the North American market, preparing to
launch Duo Ophthalmology in Canada before the end of the year. In the USA we
have re-commenced state-by-state registration of Duo Ultrasound under our EPA
approval and are confident we will complete the FDA De Novo submission for Duo
by June this year.
"The focus of the business is now solely on our core hospital market and our
proprietary chlorine dioxide chemistry. The rationalisation of our business
was substantially completed during the half, and we expect it to deliver
faster top-line growth and higher profitability in the short and long term. We
are going to exit this past two-year period of pandemic uncertainty with a
sharper focus on the hospital market and will be better placed to capitalise
on the enormous growth opportunities in healthcare where the need for our
chlorine dioxide chemistry is greatest."
Tristel plc www.tristel.com (http://www.tristel.com/)
Paul Swinney, Chief Executive Tel: 01638 721 500
Liz Dixon, Finance Director
FinnCap
Geoff Nash/Charles Beeson, Corporate Finance Tel: 020 7220 0500
Alice Lane, Corporate Broking
Walbrook PR Ltd Tel: 020 7933 8780 or tristel@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Applegarth Mob: 07584 391 303
Chairman's statement
Trading
Throughout the first half, COVID-19 has put enormous pressure on healthcare
provision in all our markets. However, there are signs that hospitals are
returning to pre-pandemic levels of service, although this improvement is
neither uniform nor consistent. Whilst we expect this "start-stop-start"
pattern to continue through the second half, the number of diagnostic
procedures that generate demand for our products is reviving globally.
We anticipate that second half revenue from Continuing operations will be
higher than first half revenue.
Revenues
In H1 21 the NHS purchased Tristel products in preparation for Brexit. During
the first half of the current financial year this inventory was fed back into
the NHS system and used. Revenue in the comparative period last year was
boosted by the Brexit purchase of £0.9m and this year's first half revenue
has been reduced by the same amount. Adjusting for this distortion, sales of
our Tristel and Cache products increased by 5% on H1 21 and were 17% higher
than in H1 20, preceding the pandemic.
£m H1 H1 H1
2019-20 2020-21 2021-22
Continuing product revenue:
Tristel 11.9 12.8 12.2
Cache 0.5 1.9 1.4
Total Continuing product revenue 12.4 14.7 13.6
Year on year growth/(decline) 19% (7%)
Discontinued product revenue 2.3 2.0 1.5
Year on year growth/(decline) (13%) (25%)
£m H1 H1 H1
2019-20 2020-21 2021-22
Continuing product revenue 12.4 14.7 13.6
Brexit inventory - (0.9) 0.9
Underlying Continuing product revenue 12.4 13.8 14.5
Underlying year on year growth 11% 5%
Product range rationalisation and Discontinued operations
The Company's focus in the first half has been on our Tristel and Cache brands
which represent our most significant growth opportunity. To sharpen this
focus, we have discontinued the manufacture and sale of products that are:
· Non-chlorine dioxide based
· Not sold into our core hospital market
Sales of our non-chlorine dioxide products have been declining for several
years (as shown above) and have been at lower gross margins than our core
chlorine dioxide portfolio. Whilst the product ranges have always made a net
profit contribution and have generated cash, the revenue decline could only be
reversed by making a substantial and high-risk investment in bulking up our
sales and marketing activities in markets which are dominated by
multinationals manufacturing generic cleaning and disinfectant products at a
scale which we did not believe we would be able to match.
During the half we have discontinued over 150 SKUs. In the period, revenue of
these products was £1.5m, generating gross profit of £0.8m (gross margin
53%); in the comparable period last year revenue of these products was £2.0m,
generating gross profit of £1.1m (gross margin 52%). In the full year to 30
June 2021, revenue was £3.8m, generating gross profit of £2.0m (gross margin
54%).
By contrast, a gross margin of 83% was achieved on the continuing chlorine
dioxide hospital product range.
Manufacturing activity in the first half was unaffected by the rationalisation
which was phased in during the period. Production volumes were in fact
constant as we enabled customers to stockpile inventory so they could locate
alternative products and switch to them. The positive impact of the
rationalisation on overhead will start to be felt in the second half, and the
full impact will be experienced next financial year.
Overheads associated with Continuing operations were £0.2m lower than in the
comparative period. Group headcount on 31 December 2021 was 196, compared with
189 on 30 June 2021.
We are experiencing labour cost increases and component and raw material price
increases across the Group and are increasing prices this year to match them.
Group profit before tax from Continuing operations fell to £1.0m (H1 21:
£2.4m), impacted by a share-based payment charge of £0.9m, which compared to
£0.3m in the comparative period last year.
Discontinued operations produced a loss in the period of £2.2m (H1 21: profit
£0.7m). The loss included a loss arising from the write down of intangible
assets of £2.4m (H1 21: £nil).
We benefitted from a tax credit in the period of £0.2m, compared to a tax
charge of £0.5m in H1 21. The write down of intangible assets has given rise
to a tax deduction, creating tax losses for the UK group. As these losses can
be carried forward to be utilised against profits in future years, a deferred
tax asset has been recognised in respect of the losses and results in an
overall tax credit for the period.
Cash flow
We have continued to be very cash generative. Cash generated from operations
was £3.4m in the first half (H1 21: 4.2m). Cash increased to £8.8m at
31.12.21 from £7.3m the previous year.
Earnings and Dividend
Basic earnings per share from Continuing operations decreased from 4.07p to
2.53p. Basic loss per share from both Continuing and Discontinued operations
was 2.08p in the period (H1 21: basic earnings per share of 5.62p).
Diluted earnings per share from Continuing operations was 2.50p (H1 21:
3.96p). Diluted loss per share from both Continuing and Discontinued
operations was 2.05p (H1 21: diluted earnings per share of 5.47p).
The Company's policy has been to pay out half of adjusted EPS in the form of
an ordinary dividend each year. Given the extraordinary circumstances caused
by COVID-19, we have decided to deviate from this policy, and we will maintain
the interim dividend at the same level as last year. The dividend will be
2.62p per share and will be paid to shareholders on the register on 8 April
2022. The associated ex-dividend date is 7 April 2022.
North America
We have made good progress with our De Novo submission for the USA FDA for our
DUO ULT product for ultrasound equipment, and expect to make the submission by
the end of the financial year.
Working closely with our USA manufacturing and distribution partner, Parker
Laboratories ("Parker"), we took the decision during the half to restart the
state registration of DUO under its USA EPA approval. As background, we
received EPA federal approval in two stages over the past few years and had
started to register the product in individual states. However, we decided to
put this programme on hold as Parker and ourselves were unsure of the
commercial opportunity for the use of DUO with the EPA approval. Whilst this
approval relates to ultrasound equipment it restricts DUO's use to skin
surface ultrasound probes and other surfaces of the ultrasound console. Only
FDA approval would permit DUO's use on intra-cavity probes which go inside the
body and are considered higher risk procedures from an infection prevention
standpoint.
There is a groundswell of professional opinion in the USA that a product like
DUO, with the efficacy claims it has achieved, is more appropriate for skin
surface probe disinfection, when the probe is used to guide the placement of
venous catheters than more expensive equipment-based disinfection products
that have FDA approval. A growing body of ultrasound practitioners is lobbying
for the use of intermediate level disinfection in such circumstances rather
than high-level disinfection. Our EPA approval confers intermediate-level
disinfection status on DUO and the future FDA approval will confer high-level
status on DUO.
We believe that we have a substantially expanded commercial opportunity in the
United States ultrasound market with the regulatory strategy that we have
pursued.
In Canada we are discussing the market launch of DUO for ophthalmology with
various potential distributors.
Outlook
As the impact of the pandemic recedes and the number of endoscopies,
ultrasound scans and other diagnostic procedures return to their pre-COVID-19
levels, we are confident that we will return to the growth trajectory we were
on before 2020. The backlog for these procedures is front page news in all
countries.
We have simplified the business and sharpened our focus on the hospital and
our proprietary chlorine dioxide chemistry. We are better placed than before
COVID-19 to capitalise upon a return to normal service in global healthcare.
We look forward to growing our two core brands - Tristel and Cache - and
expanding our global reach.
Bruno Holthof
Chairman
21 February 2022
Condensed Consolidated Income Statement for the six months ended 31 December
2021
6 months ended 6 months ended Year ended
31-Dec-21 31-Dec-20 30-Jun-21
(unaudited) (unaudited) (audited)
Continuing operations Note £'000 £'000 £'000
Revenue 2 13,646 14,726 27,236
Cost of sales (2,334) (2,453) (4,536)
Gross profit 11,312 12,273 22,700
Admin expenses - share based payments (884) (260) (824)
Admin expenses - depreciation and amortisation (1,300) (1,156) (2,321)
Admin expenses - other (8,177) (8,377) (16,170)
Other operating income 162 - -
Operating profit 1,113 2,480 3,385
Movement in fair value of investments - - (807)
Finance income - - 1
Finance costs (102) (100) (195)
Profit before taxation 1,011 2,380 2,384
Taxation 183 (501) (789)
Profit for the period from continuing operations 1,194 1,879 1,595
Discontinued operations
Gross profit for the period from discontinued operations 783 1,057 2,043
Admin expenses - discontinued operations (520) (341) (666)
Disposal of intangible assets - discontinued operations (2,439) - -
(Loss)/profit for the period from discontinued operations (2,176) 716 1,377
(Loss)/profit for the period attributable to the Group's equity shareholders (982) 2,595 2,972
Earnings per share from continuing operations
attributable to equity holders of the parent
Basic (pence) 4 2.53 4.07 3.43
Diluted (pence) 2.50 3.96 3.39
Earnings per share from both continuing and discontinued operations
attributable to equity holders of the parent
Basic (pence) 4 (2.08) 5.62 6.39
Diluted (pence) (2.05) 5.47 6.32
Earnings from continuing operations before interest, tax depreciation and
amortisation for the period ended 31 December 2021 were £2,413,000. (Period
ended 31 December 2020 £3,636,000. Year ended 30 June 21 £4,899,000).
Condensed Consolidated Statement of Comprehensive Income for the six months
ended 31 December 2021
6 months ended 6 months ended Year ended
31-Dec-21 31-Dec-20 30-Jun-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
(Loss)/ profit for the period (982) 2,595 2,972
Items that will be reclassified subsequently to Profit and loss
Exchange differences on translation of foreign operations 75 (30) (600)
Other comprehensive income for the period 75 (30) (600)
Total comprehensive income for the period (907) 2,565 2,372
Attributable to:
Equity holders of the parent (907) 2,565 2,372
(907) 2,565 2,372
Condensed Consolidated Statement of Financial Position as at 31 December 2021
6 months ended 6 months ended Year ended
31-Dec-21 31-Dec-20 30-Jun-21
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Non-current assets
Investment - 807 -
Goodwill and other Intangible assets 9,190 12,770 11,969
Property, plant and equipment 8,263 8,603 8,542
Deferred tax asset 1,990 852 1,805
19,443 23,032 22,316
Current assets
Inventories 3,751 3,993 4,266
Trade and other receivables 4,842 5,888 5,255
Cash and cash equivalents 8,779 7,307 8,094
17,372 17,188 17,615
Total assets 36,815 40,220 39,931
Capital and reserves
Called up share capital 472 465 471
Share premium account 13,929 12,891 13,600
Merger reserve 2,205 2,205 2,205
Foreign exchange reserves (128) 367 (203)
Retained earnings 11,255 13,150 14,003
Equity attributable to equity holders of parent 27,733 29,078 30,076
Minority interest 7 7 7
Total equity 27,740 29,085 30,083
Current liabilities
Trade and other liabilities 2,897 3,688 3,476
Contingent liability - 76 -
Current tax liabilities (474) 688 (170)
Current leased asset liabilities 629 870 629
Total current liabilities 3,052 5,322 3,935
Non-current liabilities
Deferred tax 874 612 637
Non-current leased asset liabilities 5,149 5,201 5,276
Total liabilities 9,075 11,135 9,848
Total equity and liabilities 36,815 40,220 39,931
Condensed Consolidated Statement of Changes in Equity for the six months ended
31 December 2021
Share Capital Share Premium Merger reserve Foreign exchange reserve Retained earnings Total attributable to owners of the parent Non-controlling interests Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
30 June 2020 453 12,634 2,205 397 12,767 28,456 7 28,463
Transactions with owners
Dividends paid (1,785) (1,785) (1,785)
Shares issued 12 257 269 269
Share-based payments 260 260 260
Deferred tax through equity (686) (686) (686)
Total transactions with owners 12 257 (2,211) (1,942) (1,942)
Profit for the period ended 31 December 2020 2,594 2,594 2,594
Other comprehensive income :-
Exchange differences on translation of foreign operations (30) (30) (30)
Total comprehensive income (30) 2,594 2,564 2,564
31 December 2020 465 12,891 2,205 367 13,150 29,078 7 29,085
Transactions with owners
Dividends paid (1,232) (1,232) (1,232)
Shares issued 6 709 715 715
Share-based payments 564 564 564
Current tax through equity 593 593 593
Deferred tax through equity 550 550 550
Total transactions with owners 6 709 475 1,190 1,190
Profit for the period ended 30 June 2021 378 378 378
Other comprehensive income :-
Exchange differences on translation of foreign operations (570) (570) (570)
Total comprehensive income (570) 378 (192) (192)
30 June 2021 471 13,600 2,205 (203) 14,003 30,076 7 30,083
Transactions with owners
Dividends paid (1,854) (1,854) (1,854)
Shares issued 1 329 330 330
Share-based payments 884 884 884
Deferred tax through equity (796) (796) (796)
Total transactions with owners 1 329 (1,766) (1,436) (1,436)
Condensed Consolidated Statement of Changes in Equity for the six months ended
31 December 2021 (continued)
Share Capital Share Premium Merger reserve Foreign exchange reserve Retained earnings Total attributable to owners of the parent Non-controlling interests Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total transactions with owners brought forward 1 329 (1,766) (1,436) (1,436)
Profit for the period ended 31 December 2021 (982) (982) (982)
Other comprehensive income :-
Exchange differences on translation of foreign operations 75 75 75
Total comprehensive income 75 (982) (907) (907)
31 December 2021 472 13,929 2,205 (128) 11,255 27,733 7 27,740
Condensed Consolidated Statement of Cash Flows for the six months ended 31
December 2021
6 months ended 6 months ended Year ended
31-Dec-2021 31-Dec-2020 30-Jun-2021
(unaudited) (unaudited) (audited)
Cash flows from operating activities £'000 £'000 £'000
Operating profit before tax from continuing operations 1,011 2,380 2,384
Operating (loss)/profit from discontinued operations (2,176) 716 1,377
Group operating (loss)/profit before tax for the period (1,165) 3,096 3,761
Adjustments to cash flows from non-cash items
Depreciation of leased assets 369 346 772
Depreciation of plant, property & equipment 335 309 591
Amortisation of intangible asset 595 714 1,383
Impairment of intangible asset 33 33 67
Movement on fair value of investment - - 807
Share based payments - IFRS 2 884 260 824
(Profit)/loss on disposal of PPE and intangible assets 2,439 (3) 73
Lease interest 100 99 195
Unrealised loss in foreign exchange - 55 -
Finance income - - (1)
3,590 4,909 8,472
Working capital adjustments
Decrease/(increase) in inventories 515 626 353
Decrease/(increase) in trade and other receivables 413 534 1,167
(Decrease)/increase in trade and other payables (579) (872) (1,196)
Lease interest paid (100) - (195)
Corporation tax paid (488) (989) (1,925)
Net cash flow from operating activities 3,351 4,208 6,676
Cash flows from investing activities
Interest received - - 1
Purchase of intangible assets (428) (341) (608)
Purchase of subsidiary undertakings & deferred consideration - (36) -
Purchase of property plant and equipment (164) (730) (1,159)
Net cash used in investing activities (592) (1,107) (1,766)
Cash flows from financing activities
Payment of lease liabilities (400) (435) (797)
Share issues 330 269 984
Dividends paid (1,854) (1,785) (3,017)
Net cash used in financing activities (1,924) (1,951) (2,830)
Net increase/(decrease) in cash and cash equivalents 835 1,150 2,080
Cash and cash equivalents at the beginning of the period 8,094 6,212 6,212
Exchange differences on cash and cash equivalents (148) (55) (198)
Cash and cash equivalents at the end of the period 8,781 7,307 8,094
Notes to the Financial Statements for the six months ended 31 December 2021
1 Accounting policies
Basis of Preparation
For the year ended 30 June 2021, the Group prepared consolidated financial
statements under International Financial Reporting Standards ('IFRS') as
adopted by the European Union (EU). These condensed consolidated interim
financial statements (the interim financial statements) have been prepared
under the historical cost convention. They are based on the recognition and
measurement principles of IFRS in issue as adopted by the European Union (EU)
which are effective from 1 July 2021.
Forthcoming requirements: This table lists the recent changes to the
Standards that are required to be applied for annual periods beginning after 1
January 2021 and that are available for early adoption in annual periods
beginning on 1 January 2021
Effective date
1 January 2023 IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts
1 January 2023 Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12)
1 January 2023 Definition of Accounting Estimates (Amendments to IAS 8)
1 January 2023 Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2)
1 January 2023 Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
There are no other standards that are not yet effective and that would be
expected to have a material impact on the Group in the current or future
reporting periods and on foreseeable future transactions.
None of the standards, interpretations and amendments effective for the first
time from 1 July 2021 have had a material effect on the financial statements.
Accounting Policies
The interim report is unaudited and has been prepared on the basis of IFRS
accounting policies.
The accounting policies adopted in the preparation of this unaudited interim
financial report are consistent with the most recent annual financial
statements being those for the year ended 30 June 2021.
The financial information for the six months ended 31 December 2021 and 31
December 2020 has not been audited and does not constitute full financial
statements within the meaning of Section 434 of the Companies Act 2006.
The financial information relating to the year ended 30 June 2021 does not
constitute full financial statements within the meaning of Section 434 of the
Companies Act 2006. This information is based on the Group's statutory
accounts for that period. The statutory accounts were prepared in accordance
with International Financial Reporting Standards ("IFRS") and received an
unqualified audit report and did not contain statements under Section 498(2)
or (3) of the Companies Act 2006. These financial statements have been filed
with the Registrar of Companies.
2 Segmental Analysis
Management considers the Company's revenue lines to be split into two
operating segments, which span the different Group entities. The operating
segments consider the nature of the product sold, the nature of production,
the class of customer and the method of distribution. The Company's operating
segments are identified initially from the information which is reported to
the chief operating decision maker.
The first segment concerns the manufacture and sale of medical device
decontamination products which are used primarily for infection control in
hospitals. This segment generates approximately 90% of the Company's
continuing revenues (2020: 88%).
The second segment which constitutes 10% (2020: 12%) of the business activity,
relates to the manufacture and sale of hospital environmental surface
disinfection products.
The operation is monitored and measured on the basis of the key performance
indicators of each segment, these being revenue and gross profit, and
strategic decisions are made on the basis of revenue and gross profit
generating from each segment.
The Company's centrally incurred administrative expenses and operating income,
and assets and liabilities, cannot be allocated to individual segments.
6 Months ended 6 Months ended
31 December 2021 31 December 2020
(unaudited) (unaudited)
Hospital medical device decontamination Hospital environmental surface disinfection Discontinued operations Total Hospital medical device decontamination Hospital environmental surface disinfection Discontinued operations Total
£000 £000 £000 £000 £000 £000 £000 £000
Revenue 12,238 1,408 1,479 15,125 12,844 1,882 2,025 16,751
Cost of material (1,791) (543) (696) (3,030) (1,774) (679) (968) (3,421)
Gross profit 10,447 865 783 12,095 11,070 1,203 1,057 13,330
Depreciation and amortisation of non-financial assets - (1,300) - (1,402)
Other administrative expenses (520) (8,697) (341) (8,472)
Share-based payments - (884) - (260)
Other income - 162 - -
Segment operating profit 263 1,376 716 3,196
Segment operating profit can be reconciled to Group profit before tax as
follows:
Segment operating profit 263 1,376 716 3,196
Finance income - - - -
Finance costs - (102) - (100)
Disposal of intangible asset (2,439) (2,439) - -
Group (loss)/profit (2,176) (1,165) 716 3,096
Year ended
30 June 2021
(audited)
Hospital medical device decontamination Hospital environmental surface disinfection Discontinued operations Total
£000 £000 £000 £000
Revenue 23,827 3,409 3,762 30,998
Cost of material (3,274) (1,262) (1,719) (6,255)
Gross profit 20,553 2,147 2,043 24,743
Depreciation and amortisation of non-financial assets - (2,813)
Other administrative expenses (666) (16,376)
Share-based payments - (824)
Other income - 32
Segment operating profit 1,377 4,762
Segment operating profit can be reconciled to Group profit before tax as
follows:
Segment operating profit 1,377 4,762
Finance income - 1
Finance costs - (195)
Movement on fair value asset - (807)
Group profit 1,377 3,761
3 Income tax
The tax on profit before tax for the year is lower than the standard rate of
corporation tax in the UK (2020 - lower than the standard rate of corporation
tax in the UK) of 19% (2020 - 19%).
The differences are reconciled below:
6 months ended 6 months ended Year ended
31 December 2021 31 December 2020 30 June 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
(Loss)/profit before tax (1,165) 3,096 3,761
Corporation tax at standard rate (221) 588 715
Adjustment in respect of prior years 227 - (156)
Expenses not deductible for tax purposes 29 31 68
(Decrease) from effect of patent box (48) (109) -
Increase/(decrease) from effect of foreign tax rates 68 187 307
Tax losses not utilised and other differences 68 (149) 64
Remeasurement of deferred tax due to changes in tax rate (244) - (85)
Enhanced relief on qualifying scientific research expenditure (62) (47) (124)
Total tax charge (183) 501 789
The disposal of intangible assets will give rise to a tax deduction, creating
tax losses for the UK group. As these losses can be carried forward to be
utilised against profits in future years a deferred tax asset has been
recognised in respect of the losses and results in an overall P&L tax
credit.
4 Dividends
Amounts recognised as distributions to equity holders in the year:
6 months ended 6 months ended Year ended
31 December 2021 31 December 2020 30 June 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
Ordinary shares of 1p each
Final dividend for the year ended 30 June 2021 of 3.93p (2020: 3.84p) per 1,854 1,785 1,785
share **
Interim dividend for the year ended 30 June 2021 of 2.62p (2020: 2.34p) per - - 1,232
share
1,854 1,785 3,017
Proposed interim dividend for the year ended 30 June 2022 of 2.62p (2021: 1,236 1,211 1,851
2.62p) per share
** Based on shares in issue at 14 December 2021 of 47,185,043 (14 December
2020 of 46,493,808).
The proposed interim dividend has not been included as a liability in the
financial statements.
5 Earnings per share
The calculations of earnings per share are based on the following profits and
number of shares:
6 months ended 6 months ended Year ended
31 December 2021 31 December 2020 30 June 2021
(unaudited) (unaudited) (audited)
£000 £000 £000
Retained (loss)/profit for the period attributable to equity holders of the (982) 2,595 2,972
parent
Shares Shares Shares
'000 '000 '000
Number Number Number
Weighted average number of ordinary shares for the purpose of basic earnings 47,147 46,203 46,539
per share
Share options 708 1,246 494
47,855 47,449 47,033
Earnings per ordinary share
Basic (pence) (2.08)p 5.62p 6.39p
Diluted (pence) (2.05)p 5.47p 6.32p
£'000 £'000 £'000
Retained profit for the financial year attributable to equity holders of the (982) 2,595 2,972
parent
Adjustments:
Share based payments 884 260 824
Net adjustments 884 260 824
Adjusted earnings (98) 2,855 3,796
Adjusted basic earnings per ordinary share (pence) (0.21)p 6.18p 8.16p
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