TIDMCOS
RNS Number : 6220K
Collagen Solutions PLC
11 July 2017
Collagen Solutions plc
("Collagen Solutions", the "Company" or the "Group")
11 July 2017
Final Results for the year ended 31 March 2017
Collagen Solutions plc (AIM: COS), the developer and
manufacturer of medical-grade collagen components for use in
regenerative medicine, medical devices and in-vitro diagnostics,
announces its final results for the year ended 31 March 2017.
Financial Highlights
-- Group revenue and other income increased by 26% to GBP4.09
million (2016: GBP3.24 million)
-- Adjusted LBITDA (before separately identifiable items):
GBP1.26 million (2016: GBP0.41 million)
-- Net cash balances at 31 March 2017: GBP8.98 million (2016: GBP2.49 million)
-- Balance sheet strengthened with up to GBP10.8 million (gross)
in equity and venture debt facility
Operational Highlights
-- Commercial organisation delivered nine new commercial agreements
-- Online U.S. sales launch to provide additional access to the research markets
-- 60% stake taken in Cre8ive Collagen to move into Chinese market
-- Strengthened executive team with key R&D, Sales and
Marketing, and General Management hires
-- Provisional patent for bone graft substitute filed
-- Australian patent for sourcing ultra-thin processed pericardium granted
-- Participation in second major Horizon 2020 project
Post Period End
-- On 30 June 2017, Stewart White, the Group's Chief Scientific
Officer stepped down from the Executive Team and the Board. He will
continue to provide services to the Group on a consultancy basis
and remain a member of the Scientific Advisory Board
-- Initiated open label extension clinical study for ChondroMimetic(R) in Hungary
Annual General Meeting
-- The Company's AGM will be held at 3 Robroyston Oval, Nova
Business Park, Glasgow, G33 1AP on 30 August 2017 at 11:00am
Jamal Rushdy, Chief Executive Officer of Collagen Solutions,
commented: "I am pleased with the progress our team has made over
the past year with our new focused strategy to deliver growth in
our core supply, development, and manufacturing business through
several commercial initiatives, and to build strategic value with
our proprietary products R&D pipeline. In addition, our recent
financing at the end of the financial year strengthened our balance
sheet to fuel these growth initiatives. Finally, we strengthened
our leadership team with three key appointments in Sales and
Marketing, Research and Development, and General Management. With
this momentum, funding, and team in place we remain positive about
our vision to be the industry's first choice in regenerative
biomaterials and progress towards our goals to deliver our revenue
growth and profitability targets."
Enquiries:
Collagen Solutions Plc
Jamal Rushdy, CEO Contact via Walbrook
Gill Black, CFO
Cenkos Securities plc (Nominated
Adviser and Broker)
Stephen Keys Tel: 0207 397 8900
Steve Cox
Walbrook PR Ltd Tel: 020 7933 8780 or
collagen@walbrookpr.com
Mike Wort Mob: 07900 608 002
Anna Dunphy Mob: 07876 741 001
CHAIRMAN'S STATEMENT
I am pleased to present Collagen Solutions' annual report and
accounts for the year ended 31 March 2017.
Strategy
Earlier in the year we committed to a strategic plan to
accelerate our business growth and enhance shareholder value by
both developing our core business and commercialising the
investment in our proprietary device programmes. In March, we
secured up to GBP10.8 million in funding by way of a placing and
open offer of GBP6.8 million and a venture debt facility of up to
GBP4.0 million, which will provide the resources to deliver a
targeted increase in revenue of 5 times in the 5 years to 2021. Our
Commercial and R&D teams have been strengthened in the past
year to execute on these plans over the coming years.
Innovation and IP
We have continued to invest in the proprietary product pipeline,
in particular, ChondroMimetic(R) , an exciting cartilage repair
technology based around a bi-layered collagen sponge. Manufacturing
validations have commenced in Glasgow, and significant work has
been undertaken in preparation for the CE Mark submission which
will be delayed slightly as a result of a Board decision to secure
as many patients as possible from the original clinical trial
conducted in Budapest in 2009. To that end we have secured patient
consent from fifteen out of the original seventeen with the other
two having moved out of Hungary making it logistically difficult
for them to participate. This new trial, which is technically known
as an open label extension trial, will provide us with seven to
eight years of longitudinal data which, if positive, will help
enormously with our partnering activities.
Our other key projects are in wound healing and in bone graft
substitutes, where we have filed for a provisional patent. We
remain confident about our ability to partner these products
although the ever-increasing burden of regulation has resulted in
extended timelines.
Our collaborations with various academic and industry partners,
include our participation in two prestigious European Horizon 2020
consortiums to develop (i) a disease-modifying therapy for
Parkinson's which could slow down the progression of the disease
rather than offering symptomatic benefits, and (ii) cell-based
tissue regeneration techniques.
Board and Management
During the year we have made a number of key appointments to
strengthen the executive team. Kevin Darling joined us in October
as General Manager, New Zealand, taking over the reins from Geoff
Bennett, who, in January, moved from his previous executive
director position to become a non-executive director. In February,
we appointed Brad Selman to the role of VP Global Sales and
Marketing to lead our commercial team and in March, Chris Wattengel
joined the team as VP Global R&D to lead our product
development programmes.
Co-founder Dr Stewart White stepped down from the Board on 30
June 2017, but will remain in a consultancy role and continue to
participate as a member of the Scientific Advisory Board. I
personally would like to thank Stewart for all his hard work and
what we have achieved together in the growth of the business to
date, and I look forward to continued interaction via his continued
membership of the Scientific Advisory Board.
The Board is confident that we now have a team in place to
deliver the short to medium-term strategic goals and have also
strengthened our functional teams to drive product innovation and
take the business to the next level of growth.
Our people
As part of our vital initiatives for the coming year we are
committed to providing development opportunities for our employees
and have been working with them on individual employee development
plans to deliver the required targeted training to allow them to
deliver enhanced performance to the business in its growth phase.
We value feedback from our employees and carry out an annual survey
to measure our performance in this area.
Overview
Our Board and Management team have continued to make positive
progress, delivering nine new commercial agreements, with strong
sales growth in Asia, where we established a regional sales office
in Seoul, and in Europe. We have also seen an increase in demand
for tissue biomaterials from our Australian and New Zealand
sources. The investment in the multi-purpose processing facility in
New Zealand last year has allowed product development and
prototyping to be carried out, which will generate further revenues
in the coming year. The quality of the customer pipeline is
building up with some interesting projects to be executed.
We continue to put in place the clear organisation and detailed
initiatives to drive our focused strategy in the current financial
year and beyond, which is to build a leading global regenerative
biomaterials business based upon a core supply, development and
manufacturing platform, enhanced by developing our own novel
products such as ChondroMimetic(R) , across a range of clinical
indications. The funding secured in March allows us to implement
these initiatives and we will continue to strengthen our core
business through operational improvements and investing in
innovation to create significant value. Our activities in entering
the Chinese market continue with Cre8ive, where we have been
successful in achieving initial shipments of product via our import
agents, and are in discussion with potential customers.
We have set ourselves a goal to accrete value by creating a
leading biomaterials business through a combination of organic
growth and exploitation of our own and licensed IP, as well as
through appropriate acquisitions, and we believe the momentum for
achieving this is increasing.
Results
The Group's results for the year ended 31 March 2017 are set out
in the Consolidated Statement of Comprehensive Income and discussed
further in the Financial Review.
Outlook
The past year has seen significant change in the business and we
expect the current year will be no different in terms of the speed
and magnitude of progress. We are an ambitious company with
ambitious targets and the agenda for the coming year reflects both
the opportunities that we have identified and the associated
challenges.
Our key targets for the current year are as follows;
- We have a multitude of development milestones amongst the high
value product portfolio and we will seek to progress further
projects into development. ChondroMimetic(R) is the most advanced
such project and we expect to complete the open label extension
study in Hungary for the fifteen identified patients. We expect an
ever greater contribution to the value of the business from these
projects as they approach commercialisation.
- Based on a successful outcome to the aforementioned
ChondroMimetic(R) study we aim to secure the most appropriate
partner who, in an ideal world, would give us global commercial
access for the ChondroMimetic(R) product. More likely is a
partnering arrangement that will be for Europe and the Rest of the
World, excluding USA, but with an option to commercialise the
product in the USA where the regulatory authorities will demand
that the product goes down the pre-market approval route. Given the
significant cost of this regulatory pathway, we would expect these
costs to be met by the partner.
- Achieving continued revenue growth across all our key
territories and to seek to address a specific risk with a Korean
customer on potential reduced quantities at contract renewal which
could possibly impact 18/19 revenues if not addressed this year. As
you would expect and hope for, we are at an advanced stage of
mitigating this risk by discussing new product categories and
services with the customer as well as leveraging our market reach
to help accelerate their sales.
- Forging the most mutually beneficial arrangement with Cre8ive
our partner in China. We continue to examine a number of potential
options for a route forward and hopefully we will be able to arrive
at the best option soon. The work we have done in the past year has
underlined the potential for our medical grade collagen sourced
from Australia and New Zealand. This differentiator gives us a
clear advantage over local Chinese producers where environmental
factors such as heavy metal contamination alone can impact the
quality of the product.
- To successfully execute the relocation of our San Jose R&D
facility and ensure the transfer to a new facility in
Minneapolis.
- The company is keen to reflect its ambition by contemplating
potential transactions which could help deliver critical mass in
its core business and access additional products and technology
which will be accretive to future commercial plans for high-value
products. We will continue to review such opportunities as they
arise.
I continue to be very committed to ensuring Collagen Solutions
is a success and continue to be assured by:
- the quality of the people we have at Collagen Solutions and
the fact that we have been able to attract
into the Company people of a very high calibre
- the quality of our current product offering and our
development
- the continued support of the Board to our strategic plan
- the continued support of yourselves as Shareholders
Finally, last year I referred to us being on a journey. In the
past year, I feel that we have travelled a long way and I believe
that in the next year we will travel even further. Hopefully as a
Shareholder you will see this better reflected in our share
price.
David Evans
Non-executive Chairman
10 July 2017
CEO'S STATEMENT
I am pleased to report the results for the year ended 31 March
2017 for Collagen Solutions and considerable progress we have made
towards realising value from multiple growth initiatives.
Building on momentum and strengthened financials
Firstly, and perhaps most significantly, we strengthened our
financial position substantially at the end of the financial year
by securing GBP10.8 million financing inclusive of GBP6.8 million
in equity and a venture debt facility of up to GBP4.0 million via
Norgine Ventures. This positions us to continue to grow our core
business, invest in our proprietary devices, and satisfy our
contingent payment obligations related to the successful
acquisition of Southern Lights Biomaterials.
Investments in our commercial organisation last year have begun
to deliver results. While the sales cycles in our core business can
be from 12-18 months, we have seen the early benefits with nine new
agreements during the year under review, mostly towards the end of
the period. Critically, we hired our new VP of Sales and Marketing,
Brad Selman, to continue this momentum and develop and lead the
commercial team to deliver accelerated growth over the next few
years.
Another key executive team position filled was the new General
Manager of Collagen Solutions New Zealand (formerly Southern Lights
Biomaterials), Kevin Darling. Kevin's strong commercial and
operational background has been key to continuing the momentum of
the New Zealand business, especially as we see greater growth
opportunities in our tissue business.
Finally, we prioritised and initiated three projects related to
our proprietary products platform, as well as strengthening our
R&D leadership by appointing Chris Wattengel, VP Global
Research and Development. Chris' experience in medical device
development, regulatory approvals, intellectual property, and
biomaterials will be vital to ensuring the success of these
programmes.
Revenue growth
Revenue and other income during the year ended 31 March 2017 was
GBP4.09 million, including GBP3.95 million in sales and GBP0.14
million in other income, and represented 26% growth on the prior
year. This growth was organic and driven largely by gains in Europe
and Asia, where the first investments in commercial activities were
made.
Revenue from North America grew by GBP0.12 million to GBP1.92
million, an increase of 6%. This region was the last to benefit
from new sales team hires and new business was offset partially by
some sales volume reductions amongst a few customers. Revenue from
Asia grew by GBP0.42 million to GBP1.60 million, an increase of
36%, our fastest-growing region, driven by new business wins and a
dedicated commercial manager in place in Seoul. Revenue from EMEA
grew by GBP0.28 million to GBP0.43 million, an increase of 190%,
driven by new customers and as a result of commercial activities by
the team in the UK.
During the year the team delivered nine new supply, development
and distribution agreements, including distribution partnerships in
Korea and Japan. Most of these agreements closed in the second half
of the year. In addition, the Company has seen its pericardium
tissue business grow by 30% resulting in a specific initiative to
diversify and increase its tissue supply base in Australia and New
Zealand to meet the additional demand.
Innovation and product development
The Company has historically been committed to extensive
research and development investments and has made continued
progress in biomaterials innovation, both for our core Supply,
Development, and Manufacturing business and also our Proprietary
Products programmes.
With Australia-New Zealand tissue sourcing becoming a more
significant part of our core business, we were pleased to have been
granted a patent from the Australian Patent Office for the use of
their novel ultra-thin processed pericardium material, which can be
used for heart valve replacement medical devices and other
applications. Patent coverage has already been established in New
Zealand and USA.
Related to our bone graft substitute programme, we have added
substantial expertise in this field with our new Scientific
Advisory Board as well as Chris Wattengel's background. With this
group's guidance, we've completed surgeon and industry voice of
customer feedback, identified the regulatory and pre-clinical
pathways, and established a revised plan to meet these needs
resulting in a mid-2019 estimate for regulatory clearance. We also
filed a provisional US patent application covering novel properties
of a bone graft substitute formulation. The provisional patent
covers several novel, proprietary characteristics related to the
product's superior handling properties and inorganic particle
retention, which will enhance ease-of-use for the surgeon and
ensure that the substitute remains at the operative site.
Our wound healing project is based upon core technology we
developed over several years, with promising results presented at
multiple conferences including the recent Society for Biomaterials
Annual Meeting in Minneapolis. The Company's scientists presented
new data related to the potential for a fibrillar collagen-based
matrix that protects autologous cells during delivery and promotes
cellular adhesion to a wound site. The potential of the research
may address the limitations of current split or full-thickness
autologous skin grafts, particularly in large wound sites. We have
completed surgeon and industry voice of customer feedback,
identified the regulatory and pre-clinical pathways, and targeted
our pre-clinical trials to begin early 2018 with wound market
clearance expected to follow in late 2018.
Additionally, the Company's cartilage ChondroMimetic(R)
programme has advanced significantly since the acquisition of the
assets of Orthomimetics at the end of 2015. With first human use in
2009 and original launch in 2010, ChondroMimetic(R) offers a rare
opportunity to come to market with over seven years of in-patient
results. We recently initiated the extension of the original
clinical study to review the results of the first patients from a
safety study conducted in 2009, and have begun manufacturing
validations of the product at our Glasgow UK facility. The
long-term extension study will collect 7-8 year data from up to 15
of the original 17 patients. Our CE mark submission is pending this
study conclusion and completing internal validations, with a target
commercialisation outside the US, in mid-2018.
Finally, we recognise the need for close coordination between
our global commercial and R&D teams as well as the expertise
needed for successful development and regulatory approvals of our
proprietary medical devices. We recently announced our plans to
relocate our US R&D from San Jose to Minneapolis, where we will
realise some operational cost savings by merging the two sites, and
also enhance our global R&D and commercial coordination with
leadership and both teams at the same Minneapolis site.
Strategic Initiatives
Last year was the first implementation of our global strategic
planning process resulting in several initiatives we felt critical
to our future growth. I am pleased with the results the team
delivered on these initiatives and look forward to accomplishing
similar success on our initiatives for FY 2018.
Our 2017 initiatives generally focused on three areas: sales
channel development, marketing brand launch, and operational
excellence. Our sales channel development initiative resulted in
the recruitment, hiring, and training, of a full specialised direct
sales team and support including our new VP of Global Sales &
Marketing as well as sales process improvements that led to nine
new customer agreements in the fiscal year.
Our marketing brand launch initiative resulted in execution of a
full integrated marketing communications programme leading to an
increase in several customer touch-point metrics in terms of
commercial leads, web traffic, and social media engagement.
Finally, we successfully completed several initiatives to improve
operational excellence including a new OEM programme that improved
time-to-close deal flow and throughput, contributing to nine new
agreements during the year.
Looking forward to FY 2018 we are continuing our strategic
initiative programme and selected four "Vital Few" initiatives
aligned with our strategic pillars of Customers, Our People,
Products and Capabilities, and Growth summarised as follows:
Customers: Identify and attain more high value customers
Our People: Implement an employee-driven Individual Development
Plan programme
Products and Capabilities: Secure and create a stronger
pericardium business
Growth: Successfully develop and partner our three key
proprietary products
Conclusion
The critically important financing of the Company that closed at
the end of the last financial year has put us in a strong position
to execute on our growth initiatives, including fueling our
proprietary products development, and was a significant focus of
the Company. We delivered growth based on commercial investments
made in the prior year and also recruited necessary talent in
R&D, Commercial, and General Management to execute on these
growth initiatives, and continue towards our shared vision to be
the industry's first choice for regenerative biomaterials.
Jamal Rushdy
Chief Executive Officer
10 July 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2017
Separately Separately
Before identifiable Before identifiable
separately items separately items
identifiable (note Total identifiable (note Total
items 5) 2017 items 5) 2016
Notes GBP GBP GBP GBP GBP GBP
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Revenue 3,945,787 - 3,945,787 3,129,862 - 3,129,862
Cost of sales (983,632) - (983,632) (811,327) - (811,327)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Gross profit 2,962,155 - 2,962,155 2,318,535 - 2,318,535
Share-based compensation (50,585) - (50,585) (35,831) - (35,831)
Administrative
expenses (3,596,707) 227,155 (3,369,552) (2,473,689) 152,365 (2,321,324)
Selling and marketing
costs (718,986) - (718,986) (333,426) - (333,426)
Other income 144,762 - 144,762 114,395 - 114,395
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Operating loss
before interest,
tax, depreciation
and amortisation (1,259,361) 227,155 (1,032,206) (410,016) 152,365 (257,651)
Amortisation and
depreciation (449,427) - (449,427) (346,569) - (346,569)
Finance income 2,841 - 2,841 10,262 - 10,262
Finance expense (134,958) - (134,958) (272,332) - (272,332)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Loss before taxation (1,840,905) 227,155 (1,613,750) (1,018,655) 152,365 (866,290)
Taxation (141,928) - (141,928) (114,174) - (114,174)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Loss for the year (1,982,833) 227,155 (1,755,678) (1,132,829) 152,365 (980,464)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Attributable to:
Owners of the
parent (1,934,420) 227,155 (1,707,265) (1,132,829) 152,365 (980,464)
Non - controlling
interest (48,413) - (48,413) - - -
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
(1,982,833) 227,155 (1,755,678) (1,132,829) 152,365 (980,464)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Currency translation
difference 1,392,495 - 1,392,495 (113,585) - (113,585)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Other comprehensive
income/(loss) 1,392,495 - 1,392,495 (113,585) - (113,585)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Total comprehensive
loss for the year (590,338) 227,155 (363,183) (1,246,414) 152,365 (1,094,049)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Attributable to:
Owners of the
parent (554,162) 227,155 (327,007) (1,246,414) 152,365 (1,094,049)
Non - controlling
interest (36,176) - (36,176) - - -
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
(590,338) 227,155 (363,183) (1,246,414) 152,365 (1,094,049)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
Basic and diluted
loss per share 4 (0.95p) (0.57p)
------------------------- ----- ------------- ------------- ----------- ------------- ------------- -----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March 2017
2017 2016
Notes GBP GBP
ASSETS
Non-current assets
Intangible assets 14,581,893 12,971,078
Property, plant and equipment 1,142,741 1,160,852
-------------------------------------- ----- ----------- -----------
15,724,634 14,131,930
-------------------------------------- ----- ----------- -----------
Current assets
Inventories 313,395 264,074
Trade and other receivables 806,566 636,044
Cash and cash equivalents 8,978,150 2,493,146
-------------------------------------- ----- ----------- -----------
10,098,111 3,393,264
-------------------------------------- ----- ----------- -----------
Total assets 25,822,745 17,525,194
-------------------------------------- ----- ----------- -----------
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent company
Share capital 6 3,287,991 1,759,038
Share premium 14,851,092 7,892,330
Share-based payment reserve 137,809 87,224
Shares to be issued reserve 131,934 2,050,706
Merger reserve 4,531,798 4,531,798
Translation reserve 1,539,676 159,418
Retained deficit (4,291,319) (2,584,054)
-------------------------------------- ----- ----------- -----------
20,188,981 13,896,460
-------------------------------------- ----- ----------- -----------
Equity attributable to non-equity
holders of the parent company
Non-controlling interest reserve 97,157 -
-------------------------------------- ----- ----------- -----------
Total equity 20,286,138 13,896,460
-------------------------------------- ----- ----------- -----------
Non-current liabilities
Deferred tax 221,847 253,112
Other financial liabilities 1,289,357 2,437,100
Borrowings 1,879,899 62,837
-------------------------------------- ----- ----------- -----------
Total non-current liabilities 3,391,103 2,753,049
-------------------------------------- ----- ----------- -----------
Current liabilities
Trade and other payables 1,000,086 829,354
Income tax liabilities 58,530 -
Other financial liabilities 1,060,484 25,353
Borrowings 26,404 20,978
-------------------------------------- ----- ----------- -----------
Total current liabilities 2,145,504 875,685
-------------------------------------- ----- ----------- -----------
Total liabilities 5,536,607 3,628,734
-------------------------------------- ----- ----------- -----------
Total liabilities and equity 25,822,745 17,525,194
-------------------------------------- ----- ----------- -----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2017
Shares
to
Share-based be Non-Controlling Total
Share Share payment issued Merger Translation Retained Interest Equity
capital premium reserve reserve reserve reserve deficit Total GBP GBP
GBP GBP GBP GBP GBP GBP GBP GBP
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
At 1 April
2015 1,754,689 7,845,973 51,393 - 4,531,798 273,003 (1,603,590) 12,853,266 - 12,853,266
Issue of
shares on
acquisition
of assets 4,349 46,357 - - - - - 50,706 - 50,706
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
Total
transactions
with owners
in their
capacity
as owners 4,349 46,357 - - - - - 50,706 - 50,706
Share-based
compensation - - 35,831 - - - - 35,831 - 35,831
Shares to
be issued
to Collagen
Solutions
(UK) vendors
as contingent
consideration - - - 2,000,000 - - - 2,000,000 - 2,000,000
Shares to
be issued
on acquisition
of assets - - - 50,706 - - - 50,706 - 50,706
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
Loss for
the year - - - - - - (980,464) (980,464) - (980,464)
Currency
translation
difference - - - - - (113,585) - (113,585) - (113,585)
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
Loss and
total
comprehensive
loss for
the year - - - - - (113,585) (980,464) (1,094,049) - (1,094,049
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
At 1 April
2016 1,759,038 7,892,330 87,224 2,050,706 4,531,798 159,418 (2,584,054) 13,896,460 - 13,896,460
Issue of
shares for
cash 1,366,778 5,467,111 - - - - - 6,833,889 - 6,833,889
Share issue
costs - (371,527) - - - - - (371,527) - (371,527)
Issue of
shares to
Collagen
Solutions
(UK) vendors 160,000 1,840,000 - (2,000,000) - - - - - -
Issue of
shares on
acquisition
of assets 2,175 23,178 - (25,353) - - - - - -
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
Total
transactions
with owners
in their
capacity
as owners 1,528,953 6,958,762 - (2,025,353) - - - 6,462,362 - 6,462,362
Share-based
compensation - - 50,585 - - - - 50,585 - 50,585
Norgine warrants
to be issued - - - 106,581 - - - 106,581 - 106,581
Non-controlling
interest
share of
net assets - - - - - - - - 133,333 133,333
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
Loss for
the year - - - - - - (1,707,265) (1,707,265) (48,413) (1,755,678)
Currency
translation
difference - - - - - 1,380,258 - 1,380,258 12,237 1,392,495
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
Loss and
total
comprehensive
loss for
the year - - - - - 1,380,258 (1,707,265) (327,007) (36,176) (363,183)
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
At 31 March
2017 3,287,991 14,851,092 137,809 131,934 4,531,798 1,539,676 (4,291,319) 20,188,981 97,157 20,286,138
---------------- --------- ---------- ----------- ----------- --------- ----------- ----------- ----------- ---------------- ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2017
2017 2016
GBP GBP
------------------------------------------- ----------- ---------
Cash flow from operating activities
Loss before taxation (1,613,750) (866,290)
Share-based compensation 50,585 35,831
Depreciation 234,390 175,039
Amortisation 215,037 171,530
Decrease in contingent consideration (325,390) (192,393)
Finance expense 134,958 272,332
Finance income (2,841) (10,261)
Loss/(gain) on sale of property, plant
and equipment 993 (689)
Increase in inventories (54,345) (47,773)
Increase in trade and other receivables (212,571) (9,954)
Increase in trade and other payables 190,947 479,308
------------------------------------------- ----------- ---------
Cash (used in)/ generated from operations (1,381,987) 6,680
Interest paid (7,082) (7,844)
Taxation paid (104,941) (193,657)
------------------------------------------- ----------- ---------
Net cash used in operations (1,494,010) (194,821)
------------------------------------------- ----------- ---------
Investing activities
Proceeds from sale of property, plant
and equipment 414 746
Payments to acquire property, plant
and equipment (137,324) (464,327)
Payments to acquire licensed IP and
patents, and development costs (341,502) (206,692)
Interest received 2,841 10,261
------------------------------------------- ----------- ---------
Net cash used in investing activities (475,571) (660,012)
------------------------------------------- ----------- ---------
Financing activities
Net proceeds on issue of ordinary
shares 6,462,362 -
Net proceeds from Bond issue 1,940,000 -
Repayment of related party loan (10,931) (25,591)
------------------------------------------- ----------- ---------
Net cash generated from/(used in)
financing activities 8,391,431 (25,591)
------------------------------------------- ----------- ---------
Net increase/(decrease) in cash and
cash equivalents 6,421,850 (880,424)
Effect of foreign exchange rate changes
on the balance of cash held in foreign
currencies 63,154 (17,786)
------------------------------------------- ----------- ---------
Net increase/(decrease) in cash and
cash equivalents 6,485,004 (898,210)
------------------------------------------- ----------- ---------
Cash and cash equivalents at the beginning
of the financial year 2,493,146 3,391,356
------------------------------------------- ----------- ---------
Cash and cash equivalents at the end
of the financial year 8,978,150 2,493,146
------------------------------------------- ----------- ---------
NOTES TO THE AUDITED PRELIMINARY ANNOUNCEMENT
1. BASIS OF THE ANNOUNCEMENT
The audited preliminary results for the year ended 31 March 2017
were approved by the Board of directors on 10 July 2017. The
financial information in this preliminary announcement does not
constitute full accounts within the meaning of section 434 (3) of
the Companies Act 2006 but is derived from the accounts for the
year ended 31 March 2017. The figures for the year are audited. The
preliminary announcement is prepared on the same basis as set out
in the statutory accounts for the year ended 31 March 2017. Those
accounts upon which the auditors issued an unqualified opinion,
also had no statement under section 498(2) or (3) of the Companies
Act 2006.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards, as adopted by the European Union (EU) (IFRS), this
announcement does not in itself contain sufficient information to
comply with IFRS.
The Company is a limited liability company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange. The
consolidated financial information of Collagen Solutions plc is
presented in pounds sterling (GBP), which is also the functional
currency of the Group.
The statutory accounts for the financial year ended 31 March
2017 will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
2. GOING CONCERN
As part of its going concern review the Board has followed the
guidelines published by the Financial Reporting Council entitled
"Guidance on the Going Concern Basis of Accounting and Reporting on
Solvency and Liquidity Risks 2016". In determining the appropriate
basis of preparing the financial statements, the Directors are
required to consider whether the Company can continue in
operational existence for the foreseeable future, being a period of
not less than twelve months from the date of the approval of the
financial statements. As at 31 March 2017 the Group had cash and
cash equivalents of GBP8.98 million and net current assets of
GBP7.95 million.
Management prepares detailed working capital forecasts which are
reviewed by the Board on a regular basis. Cash flow forecasts and
projections have been prepared through to 30 September 2018, and
take into account sensitivities on revenues and costs. Having made
relevant and appropriate enquiries, including consideration of the
Company's and Group's current cash resources and the working
capital forecasts, the Directors have a reasonable expectation that
the Company and Group will have adequate cash resources to continue
to meet the requirements of the business for at least the next
twelve months. Accordingly, the Board continues to adopt the going
concern basis in preparing the financial statements.
3. SEGMENTAL REPORTING
The Group's Chief Operating Decision Maker, the Chief Executive
Officer, is responsible for resource allocation and the assessment
of performance. In the performance of this role, the Chief
Executive Officer reviews the Group's activities, in aggregate. The
Group has therefore determined that it has only one reportable
segment under IFRS 8, Operating Segments, which is
biomaterials.
4. LOSS PER SHARE
The calculation of basic loss attributable to the equity holders
of the parent is based on losses of GBP1,755,678 (2016: GBP980,464)
and on 185,776,383 (2016: 171,210,108) ordinary shares being the
weighted average number of shares in issue during the year.
The loss for the year and the weighted average number of
ordinary shares for calculating the diluted loss per share for the
year ended 31 March 2017 are identical to those for the basic loss
per share. This is because the outstanding share options would have
the effect of reducing the loss per ordinary share and would
therefore not be dilutive under the terms of International
Accounting Standard (IAS) No. 33.
5. SEPARATELY IDENTIFIABLE ITEMS
2017 2016
GBP GBP
----------------------------------------- --------- -------
Included within administrative expenses:
Release of contingent consideration
provision(1) 553,063 152,365
Foreign exchange loss(2) (253,027) -
Legal costs Bond facility arrangement
(3) (72,881) -
----------------------------------------- --------- -------
227,155 152,365
----------------------------------------- --------- -------
1. The release of the contingent consideration provision in the
year ended 31 March 2017 relates to the reassessment of the
earn-outs payable for the acquisitions of Collagen Solutions LLC
and Southern Lights Ventures 2002 Limited. The release in the year
ended 31 March 2016 relates to the reassessment of the earn-outs
payable for the acquisition of Collagen Solutions LLC
2. The foreign exchange translation loss relates to the
translation of the earn-out payable in New Zealand Dollars to
Sterling for the acquisition of Southern Lights Ventures 2002
Limited.
3. The legal costs in relation to setting up the Norgine bond
facility arrangement during the year ended 31 March 2017 have been
expensed in the Consolidated statement of comprehensive income and
are shown as a separately identifiable item. The issue costs in
relation to the drawdown of tranche A of the bond facility on 31
March 2017 have been netted off against the proceeds of the bond
received and its carrying value.
6. SHARE CAPITAL
2017 2017 2016 2016
Number GBP Number GBP
----------------------- ----------- --------- ----------- ---------
Issued and fully paid
Issued ordinary shares
of 1p 324,299,077 3,242,991 171,403,815 1,714,038
Issued deferred shares
of 9p 500,000 45,000 500,000 45,000
----------------------- ----------- --------- ----------- ---------
Balance at the end of
the year 324,799,077 3,287,991 171,903,815 1,759,038
----------------------- ----------- --------- ----------- ---------
Ordinary shares
The total number of issued shares at 31 March 2017 was
324,299,077 (2016: 171,403,815).
On 9 September 2016, 217,475 ordinary shares were issued to
Orthomimetics Limited as part of the consideration paid by the
Company for ChondroMimetic assets. Further ordinary shares are
required to be issued by the Company under the asset purchase
agreement of GBP25,353 on 11 September 2017.
On 9 September 2016, 8 million ordinary shares were issued as
part of the deferred consideration payable to the vendors of
Collagen Solutions (UK) Limited. A further 8 million ordinary
shares were issued on 30 March 2017 as the final deferred
consideration payable to these vendors.
On 6 March 2017, 136,677,787 ordinary shares were issued as part
of a placing and open offer for up to 159,724,257 ordinary
shares.
Deferred shares
The total number of deferred shares at 31 March 2017 was 500,000
(2016: 500,000). The deferred shares do not confer any voting
rights.
Options and warrants
At 31 March 2017 the Company had 18,013,632 (2016: 9,238,349)
unissued ordinary shares of 1p each under the Company's share
option and warrant schemes, details of which are as follows:
Option Date
price from which Expiry
Grant date Number (in p) exercisable date
----------------- --------- ------- ------------ -----------
29 March 28 March
29 March 2013 4,050,000 10 2013 2023
2 January 30 July
31 July 2014 388,349 7.88 2016 2024
1 January 23 November
24 November 2014 1,000,000 7.75 2017 2024
1 April 31 March
1 April 2015 500,000 9.63 2018 2025
15 December 14 December
15 December 2015 3,300,000 8.89 2018 2025
14 July 13 July
14 July 2016 2,700,000 8.13 2016 2026
26 October 14 February
15 February 2017 500,000 5.63 2019 2027
7 March 6 March
7 March 2017 500,000 5.75 2020 2027
31 March 30 March
31 March 2017 5,075,283 5.91 2017 2027
----------------- --------- ------- ------------ -----------
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EADXEFLSXEFF
(END) Dow Jones Newswires
July 11, 2017 02:00 ET (06:00 GMT)
Collagen Solutions (LSE:COS)
Historical Stock Chart
From Apr 2024 to May 2024
Collagen Solutions (LSE:COS)
Historical Stock Chart
From May 2023 to May 2024