RNS Number:6625S
BTG PLC
1 December 2003
Embargoed until 07.00 on 1 December 2003
BTG plc: Interim Results 2003
BTG plc (LSE: BGC), the global technology commercialisation company, today
announces its Interim Results for the six months ended 30 September 2003.
Financial highlights
* Total revenues increased by 35% to #19.1 million (2002: #14.2 million)
- Revenues from new licence agreements increased by 100% to
#3.2 million (2002: #1.6 million)
* Operating loss (excluding investment in Provensis development) 26%
lower at #7.0 million (2002: #9.4 million)
* Group operating loss (including #8.1 million investment in Provensis
development (2002: #6.1 million)) of #15.1 million (2002: #15.5
million)
* Loss before tax of #13.4 million (2002: #13.6 million)
* Net cash at period end #42.2 million (2002: #83.3 million)
Operational highlights
* Varisolve(R)
- Positive European pivotal Phase III trial results, with
overall response rate of 83.4%
- US Phase II safety study placed on clinical hold. Additional
preclinical and other studies likely, leading to significant
delay in the clinical programme
* Six new licence agreements signed
* Settlement with Acambis plc - revenues excluded from these results.
Full year results will include #12.0 million additional turnover and
will add #7.2 million to cash balances
Ian Harvey, BTG's Chief Executive Officer, commented:
"These are strong financial results. Our core business is delivering revenue
growth, both from increased royalties and new licence income. We are making
good progress towards our stated goal of profitability, excluding Provensis, in
the 2005/6 financial year.
During the period we reported positive results from a European pivotal Phase III
trial with Varisolve(R). We were, however, disappointed to announce in November
that the Phase II safety study in the US had been placed on clinical hold by the
FDA. We are assessing what is required to move forward but, assuming the
clinical hold issues can be resolved, it is clear the timelines and costs of the
further clinical and regulatory development will increase. We expect by early
2004 to have clarified our strategy to maximise the value while managing the
risks."
For further information contact:
BTG Financial Dynamics
Andy Burrows, Director of Investor Relations Ben Atwell
+44 (0)20 7575 1741 +44 (0)20 7831 3113
Chairman's statement
In my first statement as Chairman I am pleased to report good financial and
operational progress in BTG's core business in the first half of the year.
Revenues have increased strongly and the benefits of the Group's restructuring
are beginning to flow through. Total revenues at #19.1 million were 35% higher
than the same period last year (2002: #14.2 million), with net revenues, after
sharing with our technology and intellectual property (IP) sources, also 35%
higher at #11.0 million (2002: #8.2 million).
BTG's operating loss, excluding Provensis development, reduced by 26% to #7.0
million (2002: #9.4 million), while the Group operating loss including the
investment in Provensis development was #15.1 million (2002: #15.5 million),
resulting in a loss before tax of #13.4 million (2002: #13.6 million). At the
period end, net cash was #42.2 million (2002: #83.3 million). The satisfactory
settlement of our dispute with Acambis plc for #12.0 million occurred after the
period end and is therefore not included in these figures. A financial summary
on page 7 describes the impact of this settlement and explains the results for
the period in greater detail.
We signed six new licence agreements in the first half of the financial year,
with good prospects for completing further new licences in the second half.
Fourteen new technology and IP acquisitions were made, five new development
projects were authorised and three new ventures investments were made. The
Chief Executive Officer's business review on page 3 describes operational
progress in detail.
Varisolve(R), the new treatment for varicose veins being developed by our
subsidiary Provensis, had a setback in the US, where the Phase II safety study
was placed on clinical hold by the Food & Drug Administration (FDA). There was,
however, good progress in Europe, with positive results from a pivotal Phase III
trial. When the Provensis team has completed its assessment of the technical
issues involved in progressing the development of Varisolve(R), your Board will
determine its strategy with reference to both the risks and rewards that
Varisolve(R) presents to shareholders. We expect to clarify our strategy by
early 2004.
Outlook
We have set clear short, medium and long-term corporate goals. In the short
term, following on from our reorganisation in December 2002, we aim to reduce
costs by #6.0 million per annum. We are on track to meet this target. Another
goal is to increase revenues by at least 25% this year. Again, we are on track
with the first half results, which show growth of 35%. In the medium term, we
aim to be profitable in our core business, excluding Provensis, in the financial
year 2005/6. In the longer term, our goal is to operate as a profitable
business with growing revenues from licensing activities and equity
realisations, enabling us both to provide good returns to our shareholders and
to continue investing in portfolio development.
I look forward to continued progress towards these goals during the second half
of the year.
Sir Brian Fender
Chairman
Chief Executive Officer's review
BTG currently has two important components to its business:
* our core business, where we find, develop and commercialise a broad
portfolio of technology and intellectual property; and
* Provensis, our subsidiary, which is developing Varisolve(R), a new
treatment for varicose veins.
Our stated objective is to reach operating profitability in our core business in
the financial year 2005/6. That core business has performed well in this
period, keeping us on track to meet our objective, but attention has
understandably been focused on Varisolve(R) over the past few weeks.
Varisolve(R)
Positive developments in Europe were overshadowed by the news that the US Phase
II safety study had been placed on clinical hold by the FDA.
The FDA's concerns relate principally to the potential risk of embolism from the
use of the microfoam, and to the potential systemic exposure to polidocanol.
The Provensis team is currently assessing what will be required to resolve the
clinical hold. The team's initial assessment, developed with independent
experts, will then be discussed with the FDA. It is currently anticipated that
additional preclinical, toxicology and pharmacokinetic studies will be required
to generate data that could lead to the removal of the clinical hold. If
endorsed, the additional studies are likely to take approximately 12 months. A
further 12 months might be required to complete Phase II and hold an end of
Phase II meeting with the FDA. If the clinical hold issues are successfully
resolved, the results in Phase II are satisfactory and pivotal Phase III trials
are successfully completed, it is unlikely that a New Drug Application could be
filed in the US earlier than 2007.
The high incidence and prevalence of varicose veins denote a large market
opportunity, and the potential advantages of Varisolve(R) over current
treatments are significant, as evidenced by the recent Phase III results in
Europe. These positive results were published at a US medical congress in
August, generating high interest among the physician community. Our own market
research has confirmed that both physicians and patients would welcome this
rapid, virtually painless, treatment for varicose veins.
Clearly, if the US clinical hold issues can be successfully addressed, the
timelines and costs involved in obtaining regulatory approval and reaching the
US market will be affected. Whether there will be any impact on European
approvals will depend on both the outcome of planned discussions with the
European regulators and BTG's strategy for realising value from Varisolve(R).
BTG's core business
BTG's business is finding, developing and commercialising technologies and
intellectual property. Universities, research institutions and companies - our
clients - typically assign enabling technologies to us when they are at early
stage. We invest in both developing the IP protecting the technology and, if
required, further technical development. We commercialise these technologies by
licensing them to established companies or by creating new ventures.
We operate a portfolio approach to value creation and risk management. Our
portfolio is diversified by technology sector, stage of development and level of
investment required to commercialise each technology. The success of our
business does not depend on any individual technology or piece of intellectual
property.
Currently we have around 250 technologies in the portfolio, protected by some
4000 patents and patent applications. We manage in excess of 200 agreements
with licensees, and hold equity in two listed companies and more than 25
unlisted companies.
BTG has four Strategic Business Units (SBU) which focus on specific technologies
and markets. The fifth SBU looks more broadly at high value "opportunistic"
technologies from any sector, and the Ventures SBU manages the new ventures from
the portfolio. The seventh SBU manages our key litigation (or "assertion")
cases.
Ageing and neuroscience
The team concentrates on opportunities in pain, obesity and neurodegeneration,
including Alzheimer's Disease and multiple sclerosis.
IP rights to two compounds from a new class of non-sedating, non-addictive drugs
with the potential to treat anxiety and depression were licensed to Abiogen
Pharma SpA. BTG 1640, which is currently in Phase I trials, is being
investigated as a treatment for clinical anxiety states such as panic disorder.
BTG 1675A, in preclinical testing, also has the potential to treat depression.
Both compounds, together with several others, came from the universities of
Bradford, Reading, Southampton and Sussex in the UK.
The team recently acquired a portfolio of compounds from Sankyo Co. Ltd, in
Japan, which provide different therapeutic approaches to the treatment of
Alzheimer's Disease. One compound combines acetylcholinesterase inhibition with
inhibition of serotonin transport, which may offer patients improved cognitive
response while also addressing the anxiety and depression common in Alzheimer's
patients. The other two compounds target beta-amyloid, with the potential to
combat the toxic effects of amyloid on the brain - a suspected cause of
Alzheimer's Disease. BTG plans to continue the preclinical development of these
compounds and to seek pharmaceutical companies to further develop and market
them.
BioPharmaceuticals
The team's focus is therapeutics, diagnostics and platform technologies that can
accelerate the pharmaceutical value chain.
A development programme is under way to identify a specific diagnostic test and
therapeutic approaches for celiac disease, which is an intolerance to gluten.
Commercialisation continues of Q-cells, a protein production platform, and the
pre-natal diagnostic technology for detecting genetic disorders. All three
technologies came from Oxford University. The team is also seeking licensees
for the Lewis P450 Models, a computer-based system from the University of Surrey
that enables affordable, accurate and rapid screening and profiling of drug
candidates.
Also in commercialisation is a novel imaging probe, created by scientists from
the Memorial University of Newfoundland, for identifying plaque lesions
associated with atherosclerosis. When injected into the bloodstream, the probe
travels to the atherosclerotic plaque site and provides lesion-specific delivery
of a diagnostic agent that is then detected with a gamma camera or by computer
tomography scanning.
Oncology
The team's main focus is on cancer therapeutics, though cancer therapy adjuncts
and products for supportive care will also be selected.
ILEX Oncology, Inc. continues to develop Campath(R), from Cambridge University,
for multiple sclerosis, solid tumours and organ transplant rejection. Sales in
the approved indication, chronic lymphocytic leukaemia, have been strong, and in
October ILEX increased its guidance for anticipated full year sales to $70
million from $60 million. BTG earned #2.8 million from Campath royalties in the
first half (2002: #1.5 million).
A Phase I/II trial will start shortly to assess the potential of BGC 9331, a
thymidylate synthase inhibitor from the Institute of Cancer Research in Sutton,
UK, as a treatment for gastric cancer - the second most common form of cancer
world-wide, responsible for 750,000 deaths each year. Already tested in more
than 1000 patients, BGC 9331 has already shown an overall objective response
rate in gastric cancer of 25%, which is higher than most single agent
treatments. If this can be confirmed in a further trial, BGC 9331 should prove
an attractive treatment option, and BTG would seek to license a pharmaceutical
company to complete development and take it to market.
Semiconductor technologies, optoelectronics and nanotechnology
The semiconductor team is building a portfolio around low-power methodologies,
advanced memories, system level integration, inter- and intra-system
communication and storage, fundamental materials and cell designs. In
optoelectronics, the team seeks components and technologies for next generation
systems, such as lasers, organic light-emitting diodes (OLEDs), waveguides,
modulators, filters and fabrication processes.
Three licences were signed for the Electro-absorption Modulator and Distributed
Feedback laser technologies from BT. The team is commercialising a relatively
new class of lasers known as VCSELs (vertical cavity surface-emitting lasers)
for use in telecom and datacom applications. From Cornell Research Foundation
in Ithaca, NY, these strain-compensated multiple quantum well VCSELs offer a
lower cost alternative to traditional edge-emitting lasers.
In development, the team formed a collaboration with Taiwan's Industrial
Technology Research Institute to jointly develop and to commercialise a light
emitting polymer technology for flexible organic/polymer light-emitting diode
information displays.
Strategic business development
The team pursues life and physical science IP opportunities that fall outside
the four targeted focus areas, working with other business units where
appropriate - for example on assertion and ventures opportunities. They also
pilot IP-based partnership initiatives and explore diverse commercialisation
channels.
The team is commercialising a technology from King's College London, low dose
potassium, that could enable food and beverage manufacturers to create
functional foods, or nutraceuticals, that may help reduce blood pressure. In
development, the team is seeking to validate the use of MESNA
(sodium-2-mercaptoethane sulfonate), a technology acquired from the University
of Parma, Italy, that shows great potential in reducing the difficulty of some
surgical procedures while minimising tissue trauma and scarring for the patient.
Another initiative seeks to leverage BTG's core skills. TT Solutions is a new
licence audit and management service being offered to clients, initially
focusing on the US academic sector but in the future being extended to corporate
clients and offering additional services.
Ventures
The ventures team seeks opportunities for seed and early stage investments in
technology development opportunities, usually in university and corporate
spin-outs, both from within BTG's portfolio and working alongside other
entrepreneurs and investors.
In the first half of the year, the team invested #2.7 million in eight ventures
(2002: #6.5 million), of which three were new investments. These included an
investment co-lead by BTG of #4.0 million in Xention Discovery Ltd, Cambridge,
UK, which is using its unique technology to discover and develop drugs that act
on ion channels, concentrating on cardiovascular and neurology areas. The team
has also co-sponsored a new venture fund, the VIMAC Milestone Medica Fund, an
early stage life sciences fund that will invest in opportunities covering the
region from the Eastern Seaboard of the US to Ontario and Quebec. Co-sponsors
are VIMAC Ventures LLC and RBC Technology Ventures Inc.
Licensing support and assertion
Successful technologies are frequently infringed. BTG has a reputation for
defending the legitimate rights of those who have made major inventions, hence
we will also acquire IP that may already be infringed by companies that do not
have rights to use it. In such cases, we may develop the IP further and reverse
engineer existing products to determine whether they fall within the scope of
the IP. We then present our findings to infringing companies, seeking licence
agreements to capture value for both past and future use.
One such technology is haemofiltration, from the Childrens' Hospital of
Cincinnati in the US, where we are asserting the IP against a company that we
believe is already using the technology. Another case is Celltrace, for the
remote updating of SIM cards in mobile telephones, where we are litigating in
Germany against SIM card manufacturers. The Celltrace IP is the subject of an
appeal before the end of the calendar year in the European Patent Office
procedure, following our success in an opposition hearing held in 2002.
Our licensing support and assertion team manages these cases and also provides
broad licensing support to all of the other SBUs, especially in the
commercialisation phase.
Finally, we are delighted that Sir Peter Mansfield has recently jointly won the
Nobel Prize for Medicine for his invention of Magnetic Resonance Imaging. We
worked with Sir Peter for many years and licensed his and others' MRI patents to
the entire MRI industry, litigating where necessary and generating about #95
million in revenues of which over #44 million has been shared with the
universities and inventors. We continue to work with some of the world's
leading researchers, both helping to take their inventions to market and
capturing the value that is rightfully theirs. With strongly growing revenues
and a reputation for delivering results, we provide a major service to the
world's most creative and inventive people.
Ian Harvey
Chief Executive Officer
Financial summary
We laid out four primary financial objectives in December 2002 that we
reiterated with our full year results in May 2003:
* resumption in revenue growth
* reduction in operating losses in our core business
* reaching operating profitability in our core business in the 2005/6
financial year
* excluding Provensis, achieving these objectives from within our current
resources.
We have made progress on all these fronts in this period. Revenues have
increased strongly, as described below. BTG's operating loss excluding
Provensis reduced by 26% to #7.0 million (2002: #9.4 million). The Group
operating loss, including the investment in Provensis development, was #15.1
million (2002: #15.5 million), and our loss before tax was #13.4 million (2002:
#13.6 million). Further details can be found in the accompanying financial
statements and notes.
Revenues
Total revenues at #19.1 million and net revenues at #11.0 million were both 35%
higher than in the same period last year (2002: #14.2 million and #8.2 million
respectively).
Royalties from launched products were up 26% to #13.7 million (2002: #10.9
million) and revenues generated from the six new licences signed were up 100% to
#3.2 million (2002: 10 licences with revenues of #1.6 million). Milestone
payments, made when licensees achieve predetermined development milestones, were
flat at #0.7 million. Audit revenues were #0.6 million (2002: #1.0 million) and
a profit of #0.9 million was realised on the sale of investments, including
Acambis plc and Alizyme plc
Key contributors to revenues were Factor IX at #5.7 million (2002: #5.3
million), Campath(R) at #2.8 million (2002: #1.5 million), MRI at #1.8 million
(2002: #0.5 million), the two-part hip cup at #1.2 million (2002: #1.0 million)
and the Alzheimer's Disease compounds BTG 1640 and BTG 1675A, licensed to
Abiogen Pharma S.p.A. which generated a #2.0 million down payment.
As usual, we anticipate revenues will be greater in the second half of the year
than in the first. Second-half revenues have already benefited from the
settlement of our legal dispute with Acambis plc, which resulted in gross
revenues to BTG of #12.0 million (#7.2 million after revenue sharing with the
source of the technology).
Costs
Good progress was made towards achieving the targeted annual cost savings of
#6.0 million. It was intended that the majority of these savings would result
from having fewer people following the restructuring and from reducing
investment in non-core areas. Administrative expenses were 11% lower at #13.1
million compared with the same period last year (2002: #14.7 million), and
significantly less than the 2001 cost of #16.0 million. We expect to reach our
target despite some increased expenditure in the form of a rent review which
increased costs by #0.2 million and a deficit in the BTG Pension Scheme which
led to a resumption of pension contributions of #0.5 million.
Investment
Investment in Provensis development, including capital expenditure, increased to
#10.3 million (2002: #6.1 million) as clinical and manufacturing development
continued. Investment in other new technology development increased nearly
threefold to #1.5 million (2002: #0.4 million), whereas expenditure on venture
investments decreased to #2.7 million (2002: #6.5 million).
Cash
Cash flow in the period reflected the general trend of higher revenues, lower
costs and increased investment in Provensis development. However, cash flow in
BTG's core business is always affected by the timing of revenues and revenue
sharing payments, giving rise to volatility in working capital movements. In
the current period, working capital decreased by #3.1 million (2002: #4.1
million increase), a swing of #7.2 million. We finished the period with net
cash of #42.2 million (2002: #83.3 million).
Rusi Kathoke
Chief Financial Officer
CONSOLIDATED PROFIT & LOSS ACCOUNT
for the six months ended 30 September 2003
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Total revenue (note 3) 19.12 14.16 31.53
Turnover (note 3) 18.22 14.16 31.53
Revenue sharing (8.10) (5.97) (13.71)
_____ _____ _____
Provensis development (note 4) (8.10) (6.08) (13.57)
Other development (1.47) (0.38) (1.94)
_____ _____ _____
Total development (9.57) (6.46) (15.51)
Other operating expenses (note 5) (2.52) (2.52) (6.19)
Administrative expenses (13.08) (14.72) (33.03)
_____ _____ _____
Operating loss (note 7) (15.05) (15.51) (36.91)
Profit on disposal - Trust investment in own
shares (note 8) - 0.02 0.02
Profit on disposal of /(amounts written off)
investments (note 9) 0.88 - (2.45)
_____ _____ _____
Loss on ordinary activities before interest
and taxation (14.17) (15.49) (39.34)
Interest receivable 0.80 1.86 3.11
Interest payable and similar charges - - (0.01)
_____ _____ _____
Loss on ordinary activities before taxation (13.37) (13.63) (36.24)
Taxation on loss on ordinary activities (note (0.13) (0.24) (0.34)
10)
_____ _____ _____
Loss for the financial period - retained for
equity shareholders (13.50) (13.87) (36.58)
_____ _____ _____
Basic and diluted loss per share (note 11) (13.06p) (13.22p) (35.46p)
_____ _____ _____
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS
AND LOSSES
for the six months ended 30 September 2003
Loss for the financial period (13.50) (13.87) (36.58)
Currency translation differences on foreign
currency net investments 0.24 (0.29) (0.51)
_____ _____ _____
Total recognised gains and losses relating to the
period (13.26) (14.16) (37.09)
_____ _____ _____
CONSOLIDATED BALANCE SHEET
as at 30 September 2003
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Fixed assets
Intangible assets - patents and other IPR 9.55 10.66 9.64
Tangible assets 7.80 6.36 6.86
Investments 17.33 14.09 15.03
_____ _____ _____
34.68 31.11 31.53
_____ _____ _____
Current assets
Debtors: amounts falling within one year 7.37 5.02 6.34
Short-term deposits 35.62 78.93 54.65
Cash at bank and in hand 6.93 5.24 7.48
_____ _____ _____
49.92 89.19 68.47
Creditors: amounts falling due within
one year (16.24) (15.83) (18.45)
_____ _____ _____
Net current assets 33.68 73.36 50.02
_____ _____ _____
Total assets less current liabilities 68.36 104.47 81.55
Provisions for liabilities and charges (1.29) (1.24) (1.29)
_____ _____ _____
Net assets 67.07 103.23 80.26
_____ _____ _____
Analysis of net assets
BTG (excluding Provensis) 108.14 128.69 113.19
Provensis (41.07) (25.46) (32.93)
_____ _____ _____
Net assets 67.07 103.23 80.26
_____ _____ _____
Capital and reserves
Called up share capital 10.54 10.53 10.53
Share premium account 159.92 159.90 159.86
Capital reserve 7.31 7.31 7.31
Profit and loss account (110.70) (74.51) (97.44)
_____ _____ _____
Equity shareholders' funds 67.07 103.23 80.26
_____ _____ _____
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 September 2003
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Net cash outflow from operating
activities (note 12)
BTG (excluding Provensis) (7.05) (2.63) (13.10)
Provensis (8.45) (5.81) (13.23)
_____ _____ _____
(15.50) (8.44) (26.33)
Net cash inflow from returns on investments
and servicing on finance 1.19 2.82 5.56
Tax paid (0.01) (0.25) (0.35)
_____ _____ _____
Capital expenditure and financial investments
Purchase of tangible assets (1.92) (0.78) (2.07)
Cash received on sale of investments 1.11 0.06 0.03
Expenditure on investments (2.67) (6.51) (9.99)
Investment in patents (1.15) (1.31) (3.42)
_____ _____ _____
Net cash outflow from capital expenditure and
financial investments (4.63) (8.54) (15.45)
_____ _____ _____
Net cash outflow before use of liquid
resources and financing (18.95) (14.41) (36.57)
Net cash inflow from management of liquid
resources 19.03 11.09 35.37
Financing
Issue of ordinary share capital 0.07 0.13 0.09
_____ _____ _____
Increase/(decrease) in cash in the period 0.15 (3.19) (1.11)
_____ _____ _____
Reconciliation of net cash outflow to movement in net funds
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Increase/(decrease) in cash in the period 0.15 (3.19) (1.11)
Cash inflow from reduction in liquid resources (19.03) (11.09) (35.37)
Cash outflow from decrease in debt - 0.03 0.03
_____ _____ _____
Decrease in net funds resulting from cash
flows (18.88) (14.25) (36.45)
Net funds brought forward 61.10 97.55 97.55
_____ _____ _____
Net funds at period end 42.22 83.30 61.10
_____ _____ _____
NOTES TO THE ACCOUNTS
1. The interim statement, which is unaudited and has been prepared on the basis
of the accounting policies set out in the Group's 2003 annual report and
accounts, was approved by the Board of Directors on 28 November 2003.
2. The financial information for the year ended 31 March 2003 is an abridged
version of the statutory accounts, which have been filed with the Registrar of
Companies. The auditors' report on those accounts was unqualified.
3. Total revenue
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Royalties from launched products 13.72 10.86 24.91
Milestone payments 0.68 0.69 1.50
Income from new agreements 3.18 1.57 3.86
_____ _____ _____
Licence income 17.58 13.12 30.27
Audit revenues 0.64 1.04 1.26
_____ _____ _____
Turnover 18.22 14.16 31.53
Income from sale of investments 0.90 - -
_____ _____ _____
Total revenue 19.12 14.16 31.53
_____ _____ _____
Geographical analysis of turnover
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
USA 11.46 9.32 21.16
European Union (excluding UK) 3.07 0.89 2.40
UK 2.25 2.09 5.03
Japan 1.27 1.35 2.20
Other 0.17 0.51 0.74
_____ _____ _____
Total turnover 18.22 14.16 31.53
_____ _____ _____
4. Provensis development
The operating loss incurred in respect of the Provensis varicose vein technology
are as follows
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Clinical development 2.07 1.97 3.68
Manufacturing costs 2.87 1.92 4.13
Marketing & business development 0.13 - 0.39
_____ _____ _____
5.07 3.89 8.20
Staff costs 1.53 1.25 2.77
Other costs 1.50 0.94 2.60
_____ _____ _____
Operating loss 8.10 6.08 13.57
_____ _____ _____
5. Other operating expenses
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Patent amortisation 1.39 1.93 4.95
Patent renewal fees 0.58 0.37 0.74
Litigation costs (note 6) 0.55 0.22 0.50
_____ _____ _____
2.52 2.52 6.19
_____ _____ _____
6. Litigation
BTG is often involved in contractual disputes relating to unpaid royalties or
the ownership and use of Intellectual Property Rights. Usually these are
resolved to BTG's satisfaction, whether or not litigation is involved. Total
costs incurred in this period amounted to #0.55 million. This compares with
#0.22 million in the same period last year. Any settlements resulting from
litigation take the form of licence income and are included in turnover.
7. Operating loss
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
BTG trading losses (5.48) (9.05) (21.40)
Other development costs (1.47) (0.38) (1.94)
_____ _____ _____
BTG operating loss (6.95) (9.43) (23.34)
Provensis operating loss (8.10) (6.08) (13.57)
_____ _____ _____
Group operating loss (15.05) (15.51) (36.91)
_____ _____ _____
8. Profit on disposal - Trust investment in own shares
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Profit on shares sold by BTG Employee
Share Trust - 0.02 0.02
9. Profit on disposal of/(amounts written off) investments
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
Profit on disposal of investments 0.88 - -
Amounts written off investments - - (2.45)
_____ _____ _____
0.88 - (2.45)
_____ _____ _____
10. Taxation
Taxation for each six-month period has been provided on the basis of the
anticipated effective rate for the full year.
11. Loss per share
The loss per share, basic and diluted of 13.06p (September 2002: 13.22p; March
2003: 35.46p), is based on losses on #13.50 million (September 2002: #13.87
million; March 2003: #36.58 million) and the weighted average number of shares
in issue during the half year of 103.34 million
(September 2002: 103.05 million; March 2003: 103.16 million).
The weighted average number of ordinary shares in issue excludes the shares held
by BTG Employee Share Trust. Losses and the weighted average number of shares
are the same in the calculation of the basic and diluted loss per share.
12. Reconciliation of operating loss to net cash outflow from operating
activities
# million
Six months ended Six months ended Year ended
September 2003 September 2002 March 2003
BTG (excluding Provensis)
Operating loss (note 7) (6.95) (9.43) (23.34)
Amortisation 1.32 1.93 4.95
Depreciation 0.62 0.72 1.28
Other 0.41 0.29 0.29
_____ _____ _____
(4.60) (6.49) (16.82)
Working capital movement (note 13) (2.45) 3.86 3.72
_____ _____ _____
(7.05) (2.63) (13.10)
_____ _____ _____
Provensis
Operating loss (note 7) (8.10) (6.08) (13.57)
Depreciation 0.26 - 0.24
_____ _____ _____
(7.84) (6.08) (13.33)
Working capital movement (note 13) (0.61) 0.27 0.10
_____ _____ _____
(8.45) (5.81) (13.23)
_____ _____ _____
Net cash outflow from operating activities (15.50) (8.44) (26.33)
_____ _____ _____
13. Working capital movement
# million
Six months ended Six months ended Change Year ended
September 2003 September 2002 March 2003
(Increase)/decrease in debtors
- BTG (excluding Provensis) (1.39) 5.66 (7.05) 2.98
- Provensis (0.03) 0.12 (0.15) (0.02)
_____ _____ _____ _____
(1.42) 5.78 (7.20) 2.96
_____ _____ _____ _____
(Decrease)/increase in creditors
- BTG (excluding Provensis) (1.06) (1.80) 0.74 0.69
- Provensis (0.58) 0.15 (0.73) 0.12
_____ _____ _____ _____
(1.64) (1.65) 0.01 0.81
_____ _____ _____ _____
Increase in provisions - - - 0.05
_____ _____ _____ _____
Working capital movement (3.06) .13 (7.19) 3.82
_____ _____ _____ _____
BTG (excluding Provensis) (2.45) 3.86 (6.31) 3.72
Provensis (0.61) 0.27 (0.88) 0.10
_____ _____ _____ _____
Working capital movement (3.06) 4.13 (7.19) 3.82
_____ _____ _____ _____
14. Analysis of net funds
# million
Balance at Cash Flow Balance at
1 April 2003 30 September
2003
Cash at bank and in hand 7.48 (0.55) 6.93
Overdraft (1.03) 0.70 (0.33)
_____ _____ _____
6.45 0.15 6.60
Liquid resources 54.65 (19.03) 35.62
_____ _____ _____
61.10 (18.88) 42.22
_____ _____ _____
Liquid resources are comprised of funds placed on the money markets for periods
of up to three months. During the period the Group suffered #0.30 million
exchange loss (September 2002: #0.38 million; March 2003 #0.06 million).
15. The announcement is being sent to all shareholders on the register on 28
November 2003 and further copies are available from the Company's registered
office: 10 Fleet Place, Limeburner Lane, London EC4M 7SB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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