Bioventix PLC Half-year Report Ended 31st December 2020
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Bioventix plc (BVXP), a UK company specialising in the development and commercial supply of high-affinity monoclonal antibodies for applications in clinical diagnostics, announces its unaudited interim results for the six-month period ended 31 December 2020.
· Revenue up 1.3% to £5.2 million (2019: £5.1 million)
· Profit before tax down 9% to £3.7 million (2019: £4.1 million)
· Closing cash balances up £0.3 million to £5.8 million
· First interim dividend up 20% to 43p per share (2019: 36p)
CHAIRMAN AND CHIEF EXECUTIVE’S STATEMENT
The continuing global pandemic has, without doubt, affected the activity within diagnostic pathways in hospitals and clinics around the world to which our business is intrinsically linked. Not only have medical care resources been diverted to cope with COVID-19 patients but, even where capacity remains, there is ongoing evidence that patients are choosing not to present to healthcare professionals or not to enter diagnostic pathways. We are therefore relatively pleased to announce our unaudited interim results for the six-month period ended 31 December 2020 in which our revenues for the half-year of £5.2 million (2019: £5.1 million) were maintained at a similar level to those for the same period of the previous year.
Total profits before tax for the half-year decreased by 9% to £3.7 million (2019: £4.1 million), most of the reduction being created by exchange rate-related charges of £0.27m. The cash balances at 31 December 2020 also remained at a very similar level, finishing the period up by £0.3 million at £5.8 million.
As reported previously, vitamin D antibody sales were not expected to match the growth rates seen in recent financial years and a plateau in the downstream global vitamin D assay market had been anticipated. The very modest growth seen was perhaps better than could have been anticipated.
Our antibodies for thyroid disease diagnostics (T3) and others for fertility diagnostics (estradiol, progesterone and testosterone) form part of routine diagnostics for chronic conditions which are often not life-threatening. We believe that such diagnostic tests have experienced lower volumes in pandemic affected areas and this has had a small impact on our own revenues.
Sales relating to troponin antibodies grew significantly once again during the period. The continued roll-out of high sensitivity troponin tests provides further encouragement for our future sales in this area.
Our research activities continue in line with the plans described in the 2020 annual report. Whilst we will report further on these various projects with our full year results, we are particularly pleased with the development of our pollution exposure assay. We hope to have a prototype urine lateral flow test featuring in a field trial at a UK industrial site later in 2021. The intention is to measure and upload the lateral flow test results directly to health and safety operatives at the site through a phone-app camera reader system.
Regarding the use of SMAs to mitigate against the effect of biotin vitamin supplements on certain blood tests, we sent samples of “blocker” antibodies to customers late in 2020. We have received early positive feedback on the performance of these blockers from some customers. During 2021, we will continue to receive feedback and consider further the possible commercial development of these blockers where bulk manufacture at low cost will be important.
In December 2020, we sent samples of THC (the active ingredient in cannabis or marijuana) antibodies to a few selected customers who are interested in improving their THC lateral flow assays for saliva. The early feedback from these customers has been encouraging and we expect to gather more feedback during the year.
With the exception of COVID-19, the overall context of the business and the landscape in which we operate has not materially changed since the 2020 annual report and we draw the attention of any new shareholders to this report.
We have continued with the development of our Farnham laboratory. The work on our manufacturing facilities and technology development laboratory has been completed and we are now fully operational. The last remaining phase of the development work (cost ~£70k) is due to start imminently.
Bioventix has demonstrated that it is a resilient business and, notwithstanding our comments regarding the impact of the COVID-19 pandemic, our plan is to continue to follow our established dividend policy. For the period under review, the Board is pleased to announce a first interim dividend of 43p per share which represents a 20% increase on last year (36 pence per share).
The shares will be marked ex-dividend on the 8 April 2021 and the dividend will be paid on 23 April 2021 to shareholders on the register at close of business on 9 April 2021.
In conclusion, we are encouraged by the performance of Bioventix for the current half-year and pleased with the continued success of our vitamin D antibody and core antibody business. We remain optimistic about our troponin revenues and the success of these high sensitivity troponin products around the world and we look forward to reporting further progress in the second half of the year.
STATEMENT OF COMPREHENSIVE INCOME
for the six month period ended 31 December 2020
31 Dec 2020
31 Dec 2019
|Cost of sales||(452,689)||(393,673)|
|Share option charge||(137,810)||(67,294)|
|Difference on foreign exchange||(195,842)||80,258|
|Research & development tax credit adjustment||17,981||5,369|
|PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION||3,717,979||4,096,950|
|Tax on profit on ordinary activities||(620,012)||(669,223)|
|PROFIT FOR THE FINANCIAL PERIOD||3,097,967||3,427,727|
|Earnings per share for the period:|
STATEMENT OF FINANCIAL POSITION
as at 31 December 2020
Six Months ended
31 Dec 2020
Six Months ended
31 Dec 2019
|Tangible fixed assets||777,244||718,921|
|Cash at bank and in hand||5,844,455||5,530,539|
|CREDITORS: amounts falling due within one year||(839,835)||(940,209)|
|NET CURRENT ASSETS||8,977,978||8,457,640|
|TOTAL ASSETS LESS CURRENT LIABILITIES||10,365,261||9,755,936|
|PROVISIONS FOR LIABILITIES|
|CAPITAL AND RESERVES|
|Called up share capital||260,467||257,034|
|Share premium account||1,332,471||435,908|
|Capital redemption reserve||1,231||1,231|
|Profit and loss account||8,712,958||8,998,643|
STATEMENT OF CASH FLOWS
for the six month period ended 31 December 2020
31 Dec 2020
31 Dec 2019
|CASHFLOW FROM OPERATING ACTIVITIES|
|Cash flows from operating activities|
|Profit for the financial year||3,097,967||3,427,727|
|Depreciation of tangible fixed assets||61,858||57,391|
|Decrease / (increase) in stocks||19,952||20,288|
|Decrease / (increase) in debtors||(98,517)||285,612|
|(Decrease) /increase in creditors||(127,399)||28,574|
|Share option charge||137,810||67,294|
|Other tax movements||(17,984)||(5,369)|
|Net cash generated from operating activities||3,327,584||4,056,593|
|Cash flows from investing activities|
|Purchase of tangible fixed assets||(120,607)||(261,492)|
|Purchase of unlisted and other investments||(0)||(190,998)|
|Net cash from investing activities||(110,020)||(434,969)|
|Cash flows from financing activities|
|Issue of ordinary shares||74||0|
|Movement on share premium account||20,148||0|
|Net cash used in financing activities||(5,449,578)||(4,628,407)|
|Cash and cash equivalents at the beginning of the year||8,076,468||6,537,322|
|Cash and cash equivalents at the end of the year||5,844,455||5,530,539|
|Cash and cash equivalents at the end of the year comprise:|
|Cash at bank and in hand||5,884,455||5,530,539|
Notes to the financial information
1. While the interim financial information has been prepared using the company’s accounting policies and in accordance with Financial Reporting Standard 102, the announcement does not itself contain sufficient information to comply with Financial Reporting Standard 102.
2. This interim financial statement has not been audited or reviewed by the auditors.
3. The accounting policies which were used in the preparation of this interim financial information were as follows:
3.1 Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention and in accordance with FRS 102.
· Turnover is recognised for product supplied or services rendered to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria determine when turnover will be recognised:
· Direct sales are recognised at the date of dispatch.
· Subcontracted R & D income is recognised based upon the stage of completion at the year end.
· Annual licence revenue is recognised, in full, based upon the date of the invoice, and royalties are accrued over the period to which they relate. Revenue is recognised based on the returns and notifications received from customers and in the event that subsequent adjustments are identified, they are recognised in the period in which they are identified.
3.3 Intangible fixed assets and amortisation
Goodwill is the difference between amounts paid on the acquisition of a business and the fair value of the identifiable assets and liabilities. It is amortised to the Profit and loss account over its estimated economic life.
Amortisation is provided at the following rates:
Goodwill Over 10 years
Know how Over 10 years
3.4 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is not charged on freehold land. Depreciation on other tangible fixed assets is provided at rates calculated to write off the cost of those assets, less their estimated residual value, over their expected useful lives on the following bases:
Freehold property 2% straight line
Plant and equipment 25% reducing balance
Motor Vehicles 25% straight line
Equipment 25% straight line
3.5 Valuation of investments
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
3.8 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
3.9 Financial instruments
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
3.11 Foreign currency translation
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
3.12 Finance costs
Finance costs are charged to the Statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.
3.14 Employee benefits-share-based compensation
The company operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each balance sheet date, the company will revise its estimates of the number of options are expected to be exercisable. It will recognise the impact of the revision of original estimates, if any, in the profit and loss account, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
3.15 Research and development
Research and development expenditure is written off in the year in which it is incurred.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
3.17 Interest income
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
3.18 Provisions for liabilities
Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of comprehensive income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
3.19 Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of financial position date, except that:
· The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
· Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.