EKF Diagnostics Holdings
plc
("EKF", the "Company", or
the "Group")
Half-year
Report
EKF Diagnostics Holdings plc (AIM:
EKF), the AIM-listed global diagnostics business,
announces its unaudited interim results for the
six months ended 30 June 2024 ("H1 2024"), a period showing strong
improvement in gross margins, earnings growth and cash generation,
in-line with management expectations.
Guidance for the full year
performance remains unchanged from the 24 July 2024
Trading Update.
In 2023 EKF focussed on
simplifying its business around key product lines within its two
divisions, Point-of-Care and Life Sciences, as well as reducing and
stabilising its cost base. The first half has seen the results of
these efforts as the Company successfully focussed on its higher
margin product ranges and core operations, with benefits continuing
into the second half.
Financial highlights
●
|
Revenue from continuing operations
of £25.2m (H1 2023: £26.9m)
|
|
- Reflecting winding down of non-core and low margin product
lines and services
- Revenues (excluding COVID-related and clinical chemistry
sales) of £24.5m (H1 2023: £24.4m)
|
●
|
Gross profit of £12.1m (H1 2023:
£11.8m)
|
●
|
Gross margins further improved to
48% (H1 2023: 44%; FY 2023: 45%)
|
●
|
Adjusted EBITDA* up 22.7% to £5.4m
(H1 2023: £4.4m)
|
●
|
Profit before tax of £3.1m (H1
2023: loss before tax of £0.03m)
|
●
|
Net cash generated from operations
of £7.9m (H1 2023: £2.5m) including effect of £2.1m US tax
refund
|
●
|
Cash and cash equivalents net of
bank borrowing as at 30 June 2024 of £9.8m (30 June 2023: £9.1m; 31
December 2023: £4.7m)
- Revolving credit facility of £3.0m repaid in
full
- £2.2m held by EKF's Russian
subsidiary and subject to regulatory restrictions (30 June 2023:
£2.4m; 31 December 2023: £1.7m), with £0.3m in further dividends
received in the period
|
* Earnings before interest, tax, depreciation and amortisation
adjusted for exceptional items and share-based
payments
Operational highlights
●
|
Business division
revenues:
|
|
- Point-of-Care: £15.2m (H1 2023: £15.6m)
- Life Sciences: £8.6m (H1 2023: £8.1m)
- Other: £0.7m (H1 2023:
£0.7m)
- Other
(products being phased out): £0.7m (H1 2023:
£2.5m)
|
●
|
Life Sciences division's
fermentation business revenues up 41% year-on-year with increased
revenue generation from new facility in South Bend
|
●
|
Ongoing operational efficiency
measures to further benefit FY 2024 performance
|
●
|
Continued review of product
portfolio to maximise margin improvements
|
Julian Baines, Executive Chair of EKF,
commented: "The Board remains confident
in the outlook for the business overall and with orders already in
house for the second half we are very confident that the Point of
Care performance in Europe, Middle East and Africa will improve
significantly. The actions we've taken are expected to yield
further improvements in gross margins, earnings growth and cash
generation, and as a result of our efficiency drive we now have a
leaner business, with a cost base correctly aligned to a more
focussed higher-margin product mix.
"The Company expects the improvement in performance to
continue in H2 2024 and remains confident that full year results
will be in-line with market expectations."
Copies of the interim results and
associated investor presentation are available here:
https://www.ekfdiagnostics.com/documents-reports.html
Investor Presentation
EKF Diagnostics will be hosting a
live online presentation open to all existing and potential
investors on Wednesday 18 September 2024 at 4.30pm (BST), via the
Investor Meet Company platform. Investors can sign up to Investor Meet Company for free and
add to meet EKF Diagnostics via:
https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor
Investors who already follow EKF
on the Investor Meet Company platform will automatically be
invited.
A recording of the presentation, a
PDF of the slides used, and responses to the Q&A session will
be available on the Investor Meet Company platform
afterwards.
EKF Diagnostics Holdings plc
|
www.ekfdiagnostics.com
|
Julian Baines, Executive Chair
/ Stephen Young, CFO
|
via Walbrook
PR
|
|
|
Singer Capital Markets (Nominated
Adviser & Broker)
|
Tel: +44
(0)20 7496 3000
|
Phil Davies / Oliver
Platts
|
|
|
|
Walbrook PR (Media & Investor
Relations)
|
Tel: +44 (0)20 7933
8780 or ekf@walbrookpr.com
|
Paul McManus / Charlotte
Edgar
|
Mob: +44
(0)7980 541 893 / +44 (0)7884 664 686
|
|
|
|
The
persons responsible for arranging the release of this
announcement
on behalf of the Company are Julian Baines, Executive Chair, and
Stephen Young, CFO.
About EKF Diagnostics Holdings plc (www.ekfdiagnostics.com)
EKF is an AIM-listed global
diagnostics business focussed on:
●
|
Point-of-Care analyzers in
the key areas of Hematology and Diabetes
|
●
|
Life Sciences services
provide specialist manufacture of enzymes and custom products for
use in diagnostic, food and industrial applications.
|
EKF has headquarters in Penarth
(near Cardiff) and operates five manufacturing sites across the US
and Germany, selling into over 120 countries
world-wide.
EXECUTIVE CHAIR'S STATEMENT
In the previous financial year we
simplified the business by removing non-core, low-margin products
from our portfolio, focussing on key product lines within our
Point-of-Care and Life Sciences divisions. At the same time, we
also reduced and stabilised our cost base in order to drive further
margin improvement and enhance cash generation. I'm delighted to
report that these actions are bearing fruit with our half year
results showing strong improvement in gross margins, earnings
growth and cash generation, in-line with management
expectations.
OPERATIONAL OVERVIEW
Total revenues for the six months
ended 30 June 2024, from core operations (excluding COVID-related,
clinical chemistry and testing revenues), were £24.5m (H1 2023:
£24.4m). Gross Margins improved further to 48.1% (H1 2023: 44.0%)
and adjusted EBITDA was £5.4m (H1 2023:
£4.4m).
Promised
efficiencies delivered in H1
For much of last year we focussed
on delivering efficiencies across both our operations and within
our product portfolio and these have delivered improved gross
margins, earnings growth and cash generation. By optimising
efficiencies within our operations we were able to reduce the cost
base by £1.9m and have established headcount at a sustainable
level. We have cancelled low margin contracts, reviewed suppliers,
and identified outsourcing opportunities. In terms of our external
production needs, we have brought one process in-house at our
facility in Magdeburg, Germany and have consolidated all of our
liquid chemistry production into our in-house facility in Boerne,
Texas. These actions have helped reduce costs, improve margin and
allow us to manage raw material costs more effectively. A newly
implemented electronic Quality Management System and upgraded IT
infrastructure is expected to deliver further efficiencies and
support further growth.
Within the portfolio we have
discontinued several low margin product lines including the entire
Clinical Chemistry range. We had committed to adding new features
and functionality to our POC range and we expect to see the benefit
of this in H2 as new tender opportunities are now available to us
due to the connectivity that EKF LinkTM provides across
a number of products. Within Life Sciences we have been able to
significantly increase the yield for β-HB
production having reviewed processes and run cycles to deliver
better value. We have also looked to
cancel or renegotiate all non-preferential partner agreements which
will have a positive impact on overall product margins as the mix
improves.
Further margin improvement expected
We expect that the adjusted EBITDA
margin will improve in the second half following the delivery of
efficiencies above, change of product mix and the increased
weighting of higher margin product sales. Margins should continue
to benefit further from the ramp-up in higher margin enzyme
fermentation revenues within Life Sciences as utilisation of our
additional capacity builds.
These improvements do not come at
the expense of investment into capital expenditure, but allows us
to focus on a core product range and we have an R&D roadmap in
place which will deliver product improvements and cost reductions,
as well as new product introductions. Further investment in
injection moulding tool requirements and planned upgrades to
existing production lines are expected to provide improved
efficiencies and additional capacity to support growth. We also
expect to benefit from further efficiencies driven by planned
investment in automation in production and packing.
The first half shows broadly flat
performance from Point-of-Care ("POC"), which is a reflection of
the changing of product mix and the timings of a number of tender
awards, such that we expect to see performance improve across a
number of our POC product lines in the second half. The Life
Sciences division has benefitted from continued growth in
β-HB sales, and a ramp-up in fermentation
revenues.
Divisional revenues
£ millions
|
H1 2024
|
H1 2023
|
% Change
|
Point-of-Care (POC) - hematology and
diabetes
|
14.0
|
14.2
|
-1.4%
|
Point-of-Care (POC) - other
*
|
1.2
|
1.4
|
-14.3%
|
Life Sciences
(β-HB and Fermentation)
|
8.1
|
7.2
|
+12.5%
|
Life Sciences - other
**
|
0.5
|
0.9
|
-44.4%
|
Other ***
|
0.7
|
0.7
|
0.0%
|
Other - products being
phased out
|
0.7
|
2.5
|
-72.0%
|
Total Revenues (exc. COVID-related & clinical chemistry
revenues)
|
24.5
|
24.4
|
+0.4%
|
Total Revenues (inc. COVID-related & clinical chemistry
revenues)
|
25.2
|
26.9
|
-6.3%
|
* POC - other, relating to other diagnostics
tests.
** Life Sciences - Other, relating to contract
manufacturing.
*** Other revenue relating to
shipping and handling recharges, repairs and other
sundries.
(1)
Point-of-Care
EKF continues to maintain a strong position
within the global market for hematology and diabetes testing, with
over 12,000 Point-of-Care analyzers and over 95 million individual
test consumables sold in 2023.
·
Hematology
Total sales of our hematology analyzers and
consumables were up 4% year-on-year. Our largest contributor to
hematology revenues, Hemocontrol, grew by 10% reversing the
declines we saw in FY 2023 (down 5%) and driving the overall
performance of this product group. We expect this performance to
continue into the second half as new tenders are now available to
us due to the connectivity that our EKF LinkTM data
management platform now provides for this product.
Revenues in our second largest hematology
product, Diaspect Tm, were broadly flat year-on-year although the
timing of sales related to our ongoing support of Egypt's Vision
2030 programme will deliver an improved performance in the second
half, as these orders will be fulfilled entirely using in-house
resources.
We continue to grow our presence in the global
blood bank market and secured two new contract wins from the Red
Cross in Hong Kong and in Thailand post-period end.
·
Diabetes
Our diabetes product portfolio saw an overall
11% decline in year-on-year sales, with all three key product lines
(Biosen, Quo-Test and Quo-Lab) down compared to H1 2023. We are
also seeing some movement in our user base for glycated haemoglobin
(HbA1c) testing products as customers transition away from Quo-Lab
to our higher margin Quo-Test; however, we expect to see this
positively impact performance in the second half as we see greater
consumable pull-through, particularly from a substantial tender in
South Africa where analyzers have already been shipped, and many
installed, but there has been a delay for diagnostic programmes
using this equipment in becoming operational.
Biosen sales, our largest contributor within
diabetes, were impacted by the greater effect of sanctions in
Russia, and other customers have refrained from ordering new
systems ahead of the launch of the new and enhanced Biosen C-Line,
which offers improved connectivity and usability. Post-period end
this updated product was made available to customers.
Whilst we expect to see a stronger performance
from Quo-Test and Biosen in H2 2024, we don't expect overall
revenues across the Diabetes product portfolio to exceed those
levels seen in 2023.
(2)
Life Sciences
·
β-HB
Sales of our
β-HB LiquiColor® reagent rose by 6%
year-on-year as we continue to benefit from the White Label ("WL")
contract with Thermo Fisher. Thermo Fisher has now depleted its
pre-existing EKF-branded stock and regular stock ordering, and
replenishment of the inventory with the new WL β-HB reagent has resumed.
Following the discontinuation of our STAT-Site
M β-HB, we have been
focussing on growing our userbase for our STAT-Site WB Analyzer, a
handheld device for the quantitative determination of
β-HB in whole blood. The roll-out of
this product is continuing to develop well with a 50% increase in
total sales year-on-year. We expect further sustained growth in
consumables for the STAT-Site WB driven by the heavy push for
initial analyzer sales in H2 2023.
·
Fermentation
Having opened the South Bend site in October
2023, we have seen a steady increase in revenues in the first half
as we scale up output for our customers. Revenues for H1 2024 are
up 41% through sales to new and existing customers compared to a
low base in H1 2023 and we continue to aim to operate the site
closer to optimal capacity by the beginning of 2026.
Russia and Ukraine
EKF owns 60% of O.O.O. EKF
Diagnostika, a distribution subsidiary located in Moscow which
sells EKF POC products and other third-party products into Russia
and neighbouring states. As expressed earlier, sales continue to be
impacted by the increased effect of sanctions in the region, even
for essential medical supplies.
Cash held in Russia totalled £2.2m
at the period end. Restrictions remain in place regarding the
payment of foreign dividends in Russia and so this cash remains
partly inaccessible, although £0.3m of further dividends were
received from Russia during the period.
Outlook
Life Sciences has seen good growth
in fermentation revenues and β-HB sales
have continue to perform well. Within Point of Care, Hematology has
delivered a robust performance and we expect to see this improve in
H2 based on new shipments to Egypt confirmed and a number of
additional wins relating to blood bank centres going live since the
period-end. We should see improvements with Diabetes in the second
half but as highlighted previously, it is unlikely that these
products will reach the revenue levels seen in 2023.
It is the nature of a business with a wide
variety of products to see mixed performances across this
portfolio.
The Board remains confident in the
outlook for the business overall and with orders already in house
for the second half we are very confident that the Point of Care
performance in Europe, Middle East and Africa will improve
significantly. All of the actions described above
are expected to yield further improvements in
gross margins, earnings growth and cash generation, and as a result
of our efficiency drive we now have a leaner business, with a cost
base correctly aligned to a more focussed higher-margin product
mix.
The Company expects the
improvement in performance to continue in H2 2024 and remains
confident that full year results will be in-line with market
expectations.
Julian Baines
Executive Chair
17 September 2024
Financial review
Revenue
Revenue for the period was £25.2m
(H1 2023: £26.9m). During H1 2023, Advanced Diagnostic Laboratory
(ADL), the Group's former testing business, was sold and UK
contract manufacturing and testing ceased. These businesses had a
combined revenue in H1 2023 of £1.2m. In H2 2023 we announced that
we were winding down our Clinical Chemistry business due to its low
margins, and had discontinued our STAT-Site M β-HB product line.
These had a combined revenue in H1 2023 of £1.4m.
Revenue by Business Unit:
|
Unaudited
6 months ended 30 June
2024
£'000
|
|
Unaudited
6 months
ended 30 June 2023
£'000
|
|
+/-
%
|
|
|
|
|
|
|
Point-of-care
|
15,191
|
|
15,641
|
|
(2.9%)
|
Life sciences
|
8,599
|
|
8,083
|
|
6.4%
|
Other*
|
667
|
|
642
|
|
3.8%
|
Revenue from core operations
|
24,457
|
|
24,366
|
|
0.4%
|
Testing and UK
manufacture
|
-
|
|
1,155
|
|
(100%)
|
Clinical chemistry
|
755
|
|
1,018
|
|
(25.8%)
|
STAT-Site M β-HB
|
-
|
|
333
|
|
(100%)
|
Total revenue
|
25,212
|
|
26,872
|
|
(6.2%)
|
Revenue from core operations
(excluding testing, clinical chemistry and STAT-Site M β-HB revenues) increased
by 0.4%, with Point-of-care revenues affected by customers holding
off on placing orders for the new Biosen product that is being
launched in H2 2024.
* Other revenue relating to shipping and handling recharges,
repairs and other sundries
Revenue by Geographical Segment:
|
Unaudited
6 months ended 30 June
2024
£'000
|
|
Unaudited
6 months
ended 30 June 2023
£'000
|
|
+/-
%
|
Continuing business
|
|
|
|
|
|
Germany
|
9,916
|
|
11,014
|
|
(10.0%)
|
USA
|
13,658
|
|
13,376
|
|
+2.1%
|
Russia
|
1,638
|
|
1,690
|
|
(3.1%)
|
UK
|
-
|
|
792
|
|
(100%)
|
Total revenue
|
25,212
|
|
26,872
|
|
(6.2%)
|
|
|
|
|
|
|
Revenue in Germany was down, due
to the Biosen launch previously highlighted, Quo-Lab, and an
element of COVID related product sales.
In the USA, H1 2023 included
Testing revenue achieved by ADL, plus higher levels of sales of the
low margin products that are being phased out, however growth
overall was still achieved.
The Group's Russian subsidiary,
which is 60% owned by the Group, is consolidated in full in
accordance with accounting standards. The interest of the minority
shareholders is included as a separate item in the Consolidated
Income statement.
Gross profit
Gross profit was £12.1m (H1 2023:
£11.8m). The gross profit margin was 48.1% (H1 2023: 44.0%). The
gross profit has increased marginally mainly as a result of the mix
of products and services. The gross profit margin on an Adjusted
Earnings basis (i.e. excluding depreciation, amortisation,
exceptional items and share-based payments included in cost of
sales) was 51.5% (H1 2023: 47.8%).
Administrative expenses
In H1 2024, administration
expenses (excluding exceptionals) further reduced to £9.2m (H1
2023: £10.9m), representing 36.3% of revenue for the period (H1
2023: 40.7%, FY 2023: 37.4%). The decrease is largely due to cost
savings and lower amortisation. The Boards
expects that the cost savings and efficiency measures that have
been implemented will continue to benefit in the second half
of the year.
The charge for depreciation of
fixed assets and for the amortisation of intangibles is £2.4m (H1
2023: £3.3m).
Headcount
The Group had an average of 309
employees during H1 2024 (H1 2023: 345)
Operating profit and adjusted
earnings before interest tax and depreciation
The Group generated an operating
profit of £3.1m (H1 2023: loss of £0.07m). We continue to consider
that adjusted EBITDA gives a more meaningful measure of performance
which for H1 2024 was £5.4m (H1 2023: £4.4m).
In H1 2024 adjusted EBITDA
excludes an exceptional credit of £0.03m (H1 2023: charge of
£1.2m). The exceptional credit relates mainly to the reversal of
provisions against inventory originally charged to exceptional
items.
Finance income
Net finance cost is £0.01m (H1
2023: income of £0.04m). The charge is largely because of bank
interest on loans offset by higher interest income on funds held in
Russia. The £3m drawn down on the revolving credit facility has
been repaid during the period.
Tax
There is a tax charge of £0.8m (H1
2023: £0.1m). The increase largely reflects the increase in profit.
A tax refund relating to the USA of £2.1m has been received during
the period.
Earnings per share
Basic earnings per share from
continuing operations has increased to 0.46 pence (H1 2023: 0.08
pence loss). There are no dilutive effects.
Balance sheet
Fixed assets
We have capitalised £2.0m (H1
2023: £3.4m) of property, plant and equipment. The expenditure
includes continuing work on adding capacity for Life Sciences in
South Bend, and the effect of the capitalisation of new operating
leases including the renewal of the lease on the Group's
headquarters in Penarth. While some further expenditure in Life
Sciences to complete the new facility in South Bend is planned for
the second half of the year, the bulk of the expenditure has now
been completed.
Intangible assets
The value of intangible fixed
assets is £29.5m (31 December 2023: £30.2m). The decrease is mainly
the result of amortisation. An amount of £0.3m (H1 2023: £0.1m) has
been capitalised during the first half, largely for R & D
expenses.
Investments
Investments are held at fair value
which has been calculated based on the market value of the shares
for Verici Dx. The value of the Group's investment in Llusern
Scientific was decreased following a further fund raising in which
the Group did not participate.
Cash and working
capital
The gross cash position at 30 June
2024 was £9.8m (31 Dec 2023: £7.7m), and the Group had cash net of
bank borrowings of £9.8m (31 Dec 2023: £4.7m). During the period
the loan from HSBC UK which at 31 December 2023 was £3m was repaid
in full.
Cash generated from operating
activities in H1 2024 is £7.9m (H1 2023: £2.5m). A tax repayment of
£2.1m has been received in the USA and there has been further
benefit from lower payments on account.
Cash and cash equivalents held by
the Russian subsidiary as at 30 June 2024 totalled £2.2m (31 Dec
2023: £1.7m). These deposits are subject to regulatory
restrictions, and therefore may not be available for general use by
the other entities within the Group. We have been able to organise
further dividends from Russia during the period of £0.3m which have
limited our exposures.
Share
capital
1,200,000 ordinary shares were
returned to the Company in April 2023 by the acquirer of ADL. These
shares remain in treasury. We have maintained shareholder authority
to buy back shares, however we currently have no plans to make any
further purchases.
Dividend
In December 2023, the Company paid
a final dividend of 1.2p per ordinary share. Based on the need for
continued investment in our core areas the Board has decided that
it would be prudent to discontinue dividend payments. The Board
will however consider recommencing the payment of dividends if and
when appropriate.
Going concern
The Directors have considered the
applicability of the going concern basis in the preparation of
these financial statements. This included the review of internal
budgets and financial results which show, taking into account
reasonably plausible changes in financial performance, that the
Group will be able to operate within the level of its current
funding arrangements.
The Group has revenues from
customers in Russia which are serviced by our entity based in
Moscow. As a result of the continuing sanctions imposed on Russia
by the EU, the USA and other countries, there are enhanced risks in
respect of our Russian entity, including regulatory restrictions
and credit risk to cash balances, its ability to collect debtors,
and EKF's ability to import products into Russia. In addition,
while we have been able to make some dividend payments out of
Russia, action by the Russian Government continues to restrict the
Russian entity's ability to pay dividends to its shareholders. In
preparing a downside going concern forecast we have discounted
future sales and cash from this region entirely.
The strength of the Group's
balance sheet aligned to the continuing performance of the business
gives the Directors confidence that the business can continue to
meet its obligations as they fall due, even under our worst-case
scenarios, for at least the next 12 months. The Group has
unutilised facilities of £3m from HSBC UK and a further £3m from
the North Atlantic Smaller Companies Investment Trust, both of
which are available until 2026, which can be drawn down if
necessary. Accordingly, the Directors are satisfied they can
prepare the accounts on a going concern basis.
Stephen Young
Chief Financial Officer
17 September 2024
CONSOLIDATED INCOME STATEMENT
|
|
|
|
|
|
|
FOR THE 6 MONTHS ENDED 30 JUNE 2024
|
|
|
Unaudited 6 months ended 30
June 2023
|
|
|
|
|
|
Unaudited 6 months ended 30
June 2024
|
|
|
Audited Year ended 31
December 2023
|
|
Notes
|
|
£'000
|
|
£'000
|
|
£'000
|
Continuing operations
|
|
|
|
|
|
|
|
Revenue
|
3
|
|
25,212
|
|
26,872
|
|
52,611
|
Cost of sales
|
|
|
(13,150)
|
|
(14,855)
|
|
(28,175)
|
Exceptional items - other
credited/(charged) to cost of sales
|
|
|
58
|
|
(196)
|
|
(577)
|
Gross profit
|
|
|
12,120
|
|
11,821
|
|
23,859
|
Administrative expenses
|
|
|
(9,160)
|
|
(10,939)
|
|
(19,680)
|
Exceptional items - impairment of
assets
|
|
|
-
|
|
(671)
|
|
(961)
|
Exceptional items -
other
|
|
|
(29)
|
|
(341)
|
|
(1,295)
|
Other income
|
|
|
139
|
|
63
|
|
158
|
Operating profit/(loss)
|
|
|
3,070
|
|
(67)
|
|
2,081
|
Depreciation and
amortisation
|
|
|
(2,382)
|
|
(3,274)
|
|
(5,472)
|
Share-based payments
|
|
|
-
|
|
-
|
|
2
|
Exceptional items
|
4
|
|
29
|
|
(1,209)
|
|
(2,833)
|
EBITDA before exceptional items and share-based
payments
|
|
|
5,423
|
|
4,416
|
|
10,384
|
Finance income
|
|
|
98
|
|
59
|
|
125
|
Finance costs
|
|
|
(111)
|
|
(18)
|
|
(75)
|
Profit/(loss) before income tax
|
|
|
3,057
|
|
(26)
|
|
2,131
|
Income tax charge
|
5
|
|
(837)
|
|
(144)
|
|
600
|
Profit/(loss) for the period
|
|
|
2,220
|
|
(170)
|
|
2,731
|
|
|
|
|
|
|
|
|
Profit/(loss) is attributable to:
|
|
|
|
|
|
|
|
Owners of the parent
|
|
|
2,066
|
|
(358)
|
|
2,352
|
Non-controlling
interest
|
|
|
154
|
|
188
|
|
379
|
|
|
|
2,220
|
|
(170)
|
|
2,731
|
Earnings/(loss) per ordinary share attributable to the owners
of the parent during the period
|
6
|
|
|
|
|
|
|
|
|
|
Pence
|
|
Pence
|
|
Pence
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.46
|
|
(0.08)
|
|
0.52
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
0.46
|
|
(0.08)
|
|
0.52
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
|
|
|
FOR THE 6 MONTHS ENDED 30 JUNE 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
6 months ended 30 June
2024
|
|
6 months ended 30 June
2023
|
|
Year ended 31 December
2023
|
|
|
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
Profit/(loss) for the period
|
|
|
2,220
|
|
(170)
|
|
2,731
|
|
|
|
|
|
|
|
|
Other comprehensive (expense)/income:
|
|
|
|
|
|
|
|
Items that will not be
reclassified to profit or loss
Changes in fair value of equity
instruments at fair value through other comprehensive income (net
of tax)
|
|
|
(29)
|
|
437
|
|
489
|
Items that may be subsequently reclassified to profit or
loss
|
|
|
|
|
|
|
|
Currency translation
differences
|
|
|
(300)
|
|
(3,502)
|
|
(3,564)
|
Other comprehensive (loss)/income (net of
tax)
|
|
|
(329)
|
|
(3,065)
|
|
(3,075)
|
Total comprehensive income/(loss) for the
period
|
|
|
1,891
|
|
(3,235)
|
|
(344)
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
Owners of the parent
|
|
|
1,684
|
|
(3,139)
|
|
(438)
|
Non-controlling
interests
|
|
|
207
|
|
(96)
|
|
94
|
Total comprehensive income/(loss) for the
period
|
|
|
1,891
|
|
(3,235)
|
|
(344)
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
|
|
|
|
|
AS AT 30 JUNE 2024
|
|
|
|
|
|
|
|
|
|
Unaudited as at 30 June
2024
|
|
Unaudited as at 30 June
2023
|
|
Audited as at 31 December
2023
|
|
|
Notes
|
£'000
|
|
£'000
|
|
£'000
|
|
Assets
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
7
|
23,696
|
|
21,576
|
|
23,744
|
|
Right-of-use assets
|
7
|
1,212
|
|
507
|
|
1,031
|
|
Intangible assets
|
8
|
29,466
|
|
31,163
|
|
30,224
|
|
Investments
|
|
226
|
|
1,556
|
|
276
|
|
Deferred tax assets
|
|
17
|
|
878
|
|
18
|
|
Total non-current assets
|
|
54,617
|
|
55,680
|
|
55,293
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Inventories
|
|
8,157
|
|
9,414
|
|
8,766
|
|
Trade and other
receivables
|
|
6,600
|
|
7,979
|
|
6,787
|
|
Corporation tax
receivable
|
|
133
|
|
13
|
|
2,277
|
|
Cash and cash equivalents
*
|
|
9,820
|
|
9,165
|
|
7,726
|
|
Total current assets
|
|
24,710
|
|
26,571
|
|
25,556
|
|
Total assets
|
|
79,327
|
|
82,251
|
|
80,849
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of the parent
|
|
|
|
|
|
|
|
Share capital
|
|
4,537
|
|
4,537
|
|
4,537
|
|
Share premium
|
|
7,375
|
|
7,375
|
|
7,375
|
|
Other equity - Ordinary shares
held in treasury
|
|
12
|
|
-
|
|
12
|
|
Other reserve
|
|
51
|
|
(182)
|
|
80
|
|
Foreign currency
reserves
|
|
6,003
|
|
6,129
|
|
6,356
|
|
Retained earnings
|
|
50,823
|
|
46,326
|
|
48,757
|
|
|
|
68,801
|
|
64,185
|
|
67,117
|
|
Non-controlling interest
|
|
1,134
|
|
1,081
|
|
1,100
|
|
Total equity
|
|
69,935
|
|
65,266
|
|
68,217
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Lease liabilities
|
|
1,009
|
|
223
|
|
618
|
|
Deferred tax liability
|
|
3,006
|
|
2,140
|
|
2,517
|
|
Total non-current liabilities
|
|
4,015
|
|
2,363
|
|
3,135
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other
payables
|
|
4,844
|
|
11,702
|
|
5,512
|
|
Lease liabilities
|
|
237
|
|
400
|
|
495
|
|
Current income tax
liabilities
|
|
296
|
|
2,476
|
|
504
|
|
Borrowings
|
|
-
|
|
44
|
|
2,986
|
|
Total current liabilities
|
|
5,377
|
|
14,622
|
|
9,497
|
|
Total liabilities
|
|
9,392
|
|
16,985
|
|
12,632
|
|
Total equity and liabilities
|
|
79,327
|
|
82,251
|
|
80,849
|
|
*including restricted cash of £2,229
(June 2023: £2,366 & Dec 2023: £1,706)
|
|
|
|
|
|
FOR THE 6 MONTHS ENDED 30 JUNE 2024
|
|
|
|
|
|
|
Unaudited 6 months ended 30
June 2024
|
|
Unaudited 6 months ended 30
June 2023
|
|
Audited Year to 31
December 2023
|
|
£'000
|
|
£'000
|
|
£'000
|
Cash flow from operating activities
|
|
|
|
|
|
Profit/(Loss) before income
tax
|
3,057
|
|
(26)
|
|
2,131
|
Adjustments for
|
|
|
|
|
|
- Depreciation
|
1,733
|
|
1,590
|
|
3,276
|
- Amortisation and impairment
charges
|
649
|
|
1,684
|
|
2,196
|
- Exceptional items - other,
charged to cost of sales
|
58
|
|
196
|
|
577
|
- Exceptional items -
impairment
|
-
|
|
671
|
|
961
|
- Exceptional items -
other
|
(29)
|
|
342
|
|
1,295
|
- Loss on disposal of
assets
|
67
|
|
5
|
|
-
|
- Share-based payments
|
-
|
|
-
|
|
(2)
|
- Cash outflows relating to
exceptional items
|
(18)
|
|
(157)
|
|
(721)
|
- Foreign Exchange
|
(104)
|
|
-
|
|
(5)
|
- Bad debt written
(back)/down
|
(28)
|
|
174
|
|
214
|
- Finance income
|
(98)
|
|
(59)
|
|
(125)
|
- Finance costs
|
111
|
|
18
|
|
75
|
Changes in working
capital
|
|
|
|
|
|
- Inventories
|
922
|
|
(445)
|
|
(745)
|
- Trade and other
receivables
|
343
|
|
1,708
|
|
2,495
|
- Trade and other
payables
|
(715)
|
|
(2,862)
|
|
(2,799)
|
Cash generated from operations
|
5,948
|
|
2,839
|
|
8,823
|
Interest received
|
98
|
|
59
|
|
125
|
Interest paid
|
(89)
|
|
(3)
|
|
(47)
|
Income tax
received/(paid)
|
1,908
|
|
(389)
|
|
(2,590)
|
Net cash generated from operating
activities
|
7,865
|
|
2,506
|
|
6,311
|
Cash flow from investing activities
|
|
|
|
|
|
Payment for property, plant and
equipment (PPE)
|
(1,495)
|
|
(3,345)
|
|
(6,598)
|
Payment for intangibles
|
(263)
|
|
(138)
|
|
(377)
|
Proceeds from sale of
PPE
|
-
|
|
59
|
|
1,333
|
Net cash used in investing activities
|
(1,758)
|
|
(3,424)
|
|
(5,642)
|
Cash flow from financing activities
|
|
|
|
|
|
Dividend paid to company
shareholders
|
-
|
|
-
|
|
(5,445)
|
Repayments of
borrowings
|
(3,000)
|
|
(93)
|
|
(137)
|
Proceeds from new
borrowings
|
-
|
|
-
|
|
3,000
|
Fees for borrowing
|
-
|
|
-
|
|
(14)
|
Principal elements of lease
payments
|
(897)
|
|
(507)
|
|
(879)
|
Dividends payment to
non-controlling interests
|
(173)
|
|
-
|
|
(171)
|
Net cash used in financing activities
|
(4,070)
|
|
(600)
|
|
(3,646)
|
Net increase/(decrease) in cash and cash
equivalents
|
2,037
|
|
(1,518)
|
|
(2,977)
|
Cash and cash equivalents at
beginning of period
|
7,726
|
|
11,578
|
|
11,578
|
Exchange gains on cash and cash
equivalents
|
57
|
|
(895)
|
|
(875)
|
Cash and cash equivalents at end of period
|
9,820
|
|
9,165
|
|
7,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2024 cash and cash
equivalents totalling £2.2m (31 Dec 2023: £1.7m) are held by the
Group's 60% owned Russian subsidiary. As a result of action by the
Russian Government following international sanctions being imposed
on Russia, access to this cash is currently restricted.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
|
|
|
|
|
|
FOR THE 6 MONTHS ENDED 30 JUNE 2024
|
|
|
|
|
|
|
|
|
Share
Capital
|
Share
Premium
|
Other
Equity
|
Other
Reserve
|
Foreign Currency
Reserve
|
Retained
earnings
|
Total
|
Non-controlling
interest
|
Total
equity
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
4,549
|
7,375
|
-
|
(629)
|
9,590
|
52,461
|
73,346
|
1,177
|
74,523
|
Comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
(358)
|
(358)
|
188
|
(170)
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
|
Changes in fair value of equity
instruments at fair value through other comprehensive
income/(expense)
|
-
|
-
|
-
|
437
|
-
|
-
|
437
|
-
|
437
|
Currency translation
differences
|
-
|
-
|
-
|
(2)
|
(3,461)
|
12
|
(3,451)
|
(284)
|
(3,735)
|
Total comprehensive income/(expense)
|
-
|
-
|
-
|
435
|
(3,461)
|
(346)
|
(3,372)
|
(96)
|
(3,468)
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
Acquisition of own
shares
|
(12)
|
-
|
12
|
-
|
-
|
(344)
|
(344)
|
-
|
(344)
|
Dividends to owners
|
-
|
-
|
-
|
-
|
-
|
(5,445)
|
(5,445)
|
-
|
(5,445)
|
Dividends to non-controlling
interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Total contributions by and distributions to
owners
|
(12)
|
-
|
12
|
-
|
-
|
(5,789)
|
(5,789)
|
-
|
(5,789)
|
At 30 June 2023 (unaudited)
|
4,537
|
7,375
|
12
|
(194)
|
6,129
|
46,326
|
64,185
|
1,081
|
65,266
|
Comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
2,710
|
2,710
|
191
|
2,901
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
|
Changes in fair value of equity
instruments at fair value through other comprehensive
income/(expense)
|
-
|
-
|
-
|
52
|
-
|
-
|
52
|
-
|
52
|
Reserves transfer
|
-
|
-
|
-
|
262
|
-
|
(262)
|
-
|
-
|
-
|
Currency translation
differences
|
-
|
-
|
-
|
1
|
227
|
(56)
|
172
|
(1)
|
171
|
Total comprehensive income/(expense)
|
-
|
-
|
-
|
315
|
227
|
2,392
|
2,934
|
190
|
3,124
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
Acquisition of own
shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Share based payment
reserve
|
-
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
-
|
(2)
|
Dividends to non-controlling
interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(171)
|
(171)
|
Reserve transfer
|
-
|
-
|
-
|
(41)
|
-
|
41
|
-
|
-
|
-
|
Total contributions by and distributions to
owners
|
-
|
-
|
-
|
(41)
|
-
|
39
|
(2)
|
(171)
|
(173)
|
At 31 December 2023
|
4,537
|
7,375
|
12
|
80
|
6,356
|
48,757
|
67,117
|
1,100
|
68,217
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
2,066
|
2,066
|
154
|
2,220
|
Other comprehensive income/(expense)
|
|
|
|
|
|
|
|
|
|
Changes in fair value of equity
instruments at fair value through other comprehensive
income/(expense)
|
-
|
-
|
-
|
(29)
|
-
|
-
|
(29)
|
-
|
(29)
|
Currency translation
differences
|
-
|
-
|
-
|
-
|
(353)
|
-
|
(353)
|
53
|
(300)
|
Total comprehensive income/(expense)
|
-
|
-
|
-
|
(29)
|
(353)
|
2,066
|
1,684
|
207
|
1,891
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
Dividends to non-controlling
shareholders
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(173)
|
(173)
|
Total contributions by and distributions to
owners
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(173)
|
(173)
|
At 30 June 2024 (unaudited)
|
4,537
|
7,375
|
12
|
51
|
6,003
|
50,823
|
68,801
|
1,134
|
69,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES FORMING PART OF THE INTERIM FINANCIAL
STATEMENTS
1.
General information and basis of presentation
EKF Diagnostics Holdings Plc is a
company incorporated and domiciled in the United Kingdom. The
Company is a public limited company, which is listed on the
Alternative Investment Market of the London Stock Exchange. The
address of the registered office is Avon House, 19 Stanwell Road,
Penarth, Cardiff CF64 2EZ.
The principal activity of the
Group is the development, manufacture, and supply of products and
services into the in-vitro diagnostic (IVD) market place. The Group
has presence in the UK, USA, Germany, and Russia, and sells
throughout the world including Europe, the Middle East, the
Americas, Asia, and Africa.
The financial statements are
presented in British Pounds Sterling, the currency of the primary
economic environment in which the Company's headquarters is
operated. The consolidated financial
statements have been prepared under the historical cost convention,
as modified by the revaluation of certain financial liabilities at
fair value through profit and loss and certain financial assets
measured at fair value through other comprehensive
income.
The financial information in these
interim results is that of the holding company and all of its
subsidiaries as at 30 June 2024. It has been prepared in accordance
with UK-adopted International Accounting Standards and the
Companies Act 2006 as applicable to companies reporting under those
standards. The accounting policies applied by the Group in this
financial information are the same as those applied by the Group in
its financial statements for the year ended 31 December 2023 and
which will form the basis of the 2024 financial statements except
for a number of new and amended standards which have become
effective since the beginning of the previous financial year. These
new and amended standards are not expected to materially affect the
Group. The preparation of financial
statements requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies. There has
been no material change either in relation to the critical
accounting estimates used or the judgement required.
Certain statements in this
announcement constitute forward-looking statements. Any statement
in this announcement that is not a statement of historical fact
including, without limitation, those regarding the Company's future
expectations, operations, financial performance, financial
condition and business is a forward-looking statement. Such
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially. These risks and
uncertainties include, amongst other factors, changing economic,
financial, business or other market conditions. These and other
factors could adversely affect the outcome and financial effects of
the plans and events described in this announcement and the Company
undertakes no obligation to update its view of such risks and
uncertainties or to update the forward-looking statements contained
herein. Nothing in this announcement should be construed as a
profit forecast.
The financial information
presented herein does not constitute full statutory accounts under
Section 434 of the Companies Act 2006 and was not subject to a
formal review by the auditors. The financial information in respect
of the year ended 31 December 2023 has been extracted from the
statutory accounts which have been delivered to the Registrar of
Companies. The Group's Independent Auditor's report on those
accounts was unqualified, did not include references to any matters
to which the auditor drew attention by way of emphasis without
qualifying their report and did not contain a statement under
section 498(2) or 498(3) of the Companies Act 2006. The financial
information for the half years ended 30 June 2024 and 30 June 2023
is unaudited and the twelve months to 31 December 2023 is
audited.
2.
Significant accounting policies
Going concern
The Directors have considered the
applicability of the going concern basis in the preparation of
these financial statements. This included the review of internal
budgets and financial results which show, taking into account
reasonably plausible changes in financial performance, that the
Group will be able to operate within the level of its current
funding arrangements.
The Group has revenues from
customers in Russia which are serviced by our entity based in
Moscow. As a result of the continuing sanctions imposed on Russia
by the EU, the USA and other countries, there are enhanced risks in
respect of our Russian entity, including regulatory restrictions
and credit risk to cash balances, its ability to collect debtors,
and EKF's ability to import products into Russia. In addition,
while we have been able to make some dividend payments out of
Russia, action by the Russian Government continues to restrict the
Russian entity's ability to pay dividends to its shareholders. In
preparing a downside going concern forecast we have discounted
future sales and cash from this region entirely.
The strength of the Group's
balance sheet aligned to the continuing performance of the business
gives the Directors confidence that the business can continue to
meet its obligations as they fall due, even under our worst-case
scenarios, for at least the next 12 months. The Group has
unutilised facilities of £3m from HSBC UK and a further £3m
from the North Atlantic Smaller Companies Investment Trust, both of
which are available until 2026, which can be drawn down if
necessary. Accordingly, the Directors are satisfied they can
prepare the accounts on a going concern basis.
3.
Segmental reporting
Management has determined the
Group's operating segments based on the monthly management reports
presented to the Chief Operating Decision Maker ('CODM'). The CODM
is the Executive Directors and the monthly
management reports are used by the Group to make strategic
decisions and allocate resources.
The principal activity of the
Group is the design, development, manufacture and sale of
diagnostic instruments, reagents and certain ancillary products, as
well as central laboratory reagents, primarily into
the in-vitro diagnostic (IVD)
market. This activity takes place across
various countries, such as the USA, Germany, Russia, and the UK,
and as such the Board considers the business primarily from a
geographic perspective. Although not all the segments meet the
quantitative thresholds required by IFRS 8, management has
concluded that all segments should be maintained and reported. In
addition, the CODM considers the segmental revenue performance of
business segments.
The reportable segments derive
their revenue primarily from the manufacture and sale of medical
diagnostic equipment and reagents. Other services include the
servicing and distribution of third party company products under
separate distribution agreements. Transactions between segments
consist of the sale of products for resale. The basis of accounting
for these transactions is the same as for external
revenue.
Currently the key operating
performance measures used by the CODM are Revenue and adjusted
EBITDA (earnings before interest, tax, depreciation and
amortisation, adjusted for exceptional items and share-based
payments).
The segment information provided
to the Board for the reportable geographic segments is as
follows:
Period ended 30 June 2024 unaudited
|
Germany
|
USA
|
Russia
|
UK
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Income statement
|
|
|
|
|
|
Revenue
|
12,012
|
13,658
|
1,638
|
-
|
27,308
|
Inter-segment
|
(2,096)
|
-
|
-
|
-
|
(2,096)
|
External revenue
|
9,916
|
13,658
|
1,638
|
-
|
25,212
|
Adjusted EBITDA*
|
2,415
|
4,656
|
417
|
(2,065)
|
5,423
|
Exceptional items
|
46
|
13
|
-
|
(30)
|
29
|
EBITDA
|
2,461
|
4,669
|
417
|
(2,095)
|
5,452
|
Depreciation
|
(430)
|
(1,234)
|
(28)
|
(41)
|
(1,733)
|
Amortisation
|
(468)
|
(134)
|
-
|
(47)
|
(649)
|
Operating profit/(loss)
|
1,563
|
3,301
|
389
|
(2,183)
|
3,070
|
Net finance costs
|
|
|
|
|
(13)
|
Income tax
|
|
|
|
|
(837)
|
Profit for the period
|
|
|
|
|
2,220
|
Segment assets
|
|
|
|
|
|
Operating assets
|
31,160
|
78,430
|
812
|
(25,466)
|
84,936
|
Inter-segment assets
|
233
|
(23,250)
|
-
|
7,588
|
(15,429)
|
External operating assets
|
31,393
|
55,180
|
812
|
(17,878)
|
69,507
|
Cash and cash equivalents
|
1,995
|
5,342
|
2,229
|
254
|
9,820
|
Total assets
|
33,388
|
60,522
|
3,041
|
(17,624)
|
79,327
|
Segment liabilities
|
|
|
|
|
|
Operating liabilities
|
(6,905)
|
22,675
|
282
|
8,769
|
24,821
|
Inter-segment liabilities
|
10,639
|
(18,819)
|
-
|
(7,249)
|
(15,429)
|
Total liabilities
|
3,734
|
3,856
|
282
|
1,520
|
9,392
|
Other segmental information
|
|
|
|
|
|
Non-current assets - PPE
|
6,242
|
16,131
|
137
|
1,186
|
23,696
|
Non-current assets - Right-of-use
assets
|
222
|
734
|
5
|
251
|
1,212
|
Non-current assets -
Intangibles
|
17,513
|
7,828
|
72
|
4,053
|
29,466
|
Intangible assets
-additions
|
258
|
5
|
-
|
-
|
263
|
PPE - additions
|
266
|
1,229
|
1
|
3
|
1,499
|
Right-of-use assets -
additions
|
156
|
73
|
23
|
265
|
517
|
Year ended December 2023 audited
|
Germany
|
USA
|
Russia
|
UK
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Income statement
|
|
|
|
|
|
Revenue
|
27,122
|
26,133
|
3,568
|
816
|
57,639
|
Inter-segment
|
(5,027)
|
-
|
-
|
(1)
|
(5,028)
|
External revenue
|
22,095
|
26,133
|
3,568
|
815
|
52,611
|
Adjusted EBITDA*
|
6,459
|
6,851
|
1,092
|
(4,018)
|
10,384
|
Exceptional items -
impairments
|
(677)
|
(120)
|
-
|
(164)
|
(961)
|
Exceptional items -
other
|
(86)
|
(1,186)
|
-
|
(23)
|
(1,295)
|
Exceptional items - other to cost
of sales
|
205
|
(775)
|
-
|
(7)
|
(577)
|
Share-based payments
|
-
|
-
|
-
|
2
|
2
|
EBITDA
|
5,901
|
4,770
|
1,092
|
(4,210)
|
7,553
|
Depreciation
|
(907)
|
(2,065)
|
(37)
|
(267)
|
(3,276)
|
Amortisation
|
(1,182)
|
(929)
|
-
|
(85)
|
(2,196)
|
Operating profit/(loss)
|
3,812
|
1,776
|
1,055
|
(4,562)
|
2,081
|
Finance income
|
|
|
|
|
125
|
Finance cost
|
|
|
|
|
(75)
|
Income tax
|
|
|
|
|
600
|
Profit for the year
|
|
|
|
|
2,731
|
Segment assets
|
|
|
|
|
|
Operating assets
|
42,131
|
53,717
|
1,271
|
9,304
|
106,423
|
Inter-segment assets
|
(10,818)
|
(20,493)
|
(210)
|
(1,779)
|
(33,300)
|
External operating
assets
|
31,313
|
33,224
|
1,061
|
7,525
|
73,123
|
Cash and cash
equivalents
|
1,269
|
3,955
|
1,706
|
796
|
7,726
|
Total assets
|
32,582
|
37,179
|
2,767
|
8,321
|
80,849
|
Segment liabilities
|
|
|
|
|
|
Operating liabilities
|
4,959
|
23,125
|
160
|
14,701
|
42,945
|
Inter-segment
liabilities
|
(770)
|
(19,184)
|
-
|
(13,346)
|
(33,300)
|
External operating
liabilities
|
4,189
|
3,941
|
160
|
1,355
|
9,645
|
Borrowings (excluding lease
liabilities)
|
-
|
-
|
-
|
2,986
|
2,986
|
Total liabilities
|
4,189
|
3,941
|
160
|
4,341
|
12,631
|
Other segmental information
|
|
|
|
|
|
Non-current assets - PPE
|
6,176
|
15,834
|
138
|
1,596
|
23,744
|
Non-current assets - Right-of-use
assets
|
148
|
884
|
-
|
(1)
|
1,031
|
Non-current assets -
Intangibles
|
18,117
|
7,650
|
68
|
4,389
|
30,224
|
PPE - additions
|
1,240
|
5,495
|
56
|
8
|
6,799
|
Intangible assets -
additions
|
314
|
63
|
-
|
-
|
377
|
Right-of-use assets -
additions
|
67
|
544
|
-
|
-
|
611
|
Period ended 30 June 2023 unaudited
|
Germany
|
USA
|
Russia
|
UK
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Income statement
|
|
|
|
|
|
Revenue
|
13,419
|
13,376
|
1,690
|
792
|
29,277
|
Inter-segment
|
(2,405)
|
-
|
-
|
-
|
(2,405)
|
External revenue
|
11,014
|
13,376
|
1,690
|
792
|
26,872
|
Adjusted EBITDA*
|
2,765
|
3,059
|
546
|
(1,954)
|
4,416
|
Share-based payment
|
-
|
-
|
-
|
-
|
-
|
Exceptional items
|
37
|
(719)
|
-
|
(527)
|
(1,209)
|
EBITDA
|
2,802
|
2,340
|
546
|
(2,481)
|
3,207
|
Depreciation
|
(418)
|
(967)
|
(25)
|
(180)
|
(1,590)
|
Amortisation
|
(880)
|
(125)
|
-
|
(679)
|
(1,684)
|
Operating profit/(loss)
|
1,504
|
1,248
|
521
|
(3,340)
|
(67)
|
Net finance costs
|
|
|
|
|
41
|
Income tax
|
|
|
|
|
(144)
|
Loss for the period
|
|
|
|
|
(170)
|
Segment assets
|
|
|
|
|
|
Operating assets
|
32,860
|
74,876
|
578
|
(21,265)
|
87,049
|
Inter-segment assets
|
254
|
(18,662)
|
-
|
4,445
|
(13,963)
|
External operating assets
|
33,114
|
56,214
|
578
|
(16,820)
|
73,086
|
Cash and cash equivalents
|
2,592
|
4,100
|
2,388
|
85
|
9,165
|
Total assets
|
35,706
|
60,314
|
2,966
|
(16,735)
|
82,251
|
Segment liabilities
|
|
|
|
|
|
Operating liabilities
|
(3,824)
|
21,217
|
324
|
13,187
|
30,904
|
Inter-segment liabilities
|
9,494
|
(17,775)
|
-
|
(5,682)
|
(13,963)
|
External operating
liabilities
|
5,670
|
3,442
|
324
|
7,505
|
16,941
|
Borrowings
|
44
|
-
|
-
|
-
|
44
|
Total liabilities
|
5,714
|
3,442
|
324
|
7,505
|
16,985
|
Other segmental information
|
|
|
|
|
|
Non-current assets - PPE
|
6,043
|
14,143
|
95
|
1,295
|
21,576
|
Non-current assets - Right-of-use
assets
|
197
|
288
|
2
|
20
|
507
|
Non-current assets -
Intangibles
|
18,554
|
8,292
|
68
|
4,249
|
31,163
|
Intangible assets
-additions
|
112
|
26
|
-
|
-
|
138
|
PPE - additions
|
428
|
2,910
|
-
|
7
|
3,345
|
Right-of-use assets -
additions
|
52
|
-
|
-
|
-
|
52
|
* Adjusted EBITDA represents earnings before interest, tax,
depreciation and amortisation adjusted for exceptional items and
share-based payments
Russian operations
In the context of an increased
level of uncertainty, the Group has exercised critical judgements
in applying its accounting policies in whether the Group should
continue to consolidate its Russian business. The Group has applied
judgement in regards to whether the Group continues to control its
Russian subsidiary due to the restrictions imposed by the Russian
government or any other authority. Control exists when the Group is
exposed, or has rights, to variable returns from its involvement
with the subsidiary and has the ability to affect those returns
through its power over the subsidiary. The Russian government
introduced various sanctions, including restrictions on the payment
of dividends to "unfriendly states" that require consent from the
Ministry of Finance of Russia. Since the Group continued to direct
the operations and the Russian regulations currently do not
prohibit the declaration and payment of dividends, the Group has
taken the view that it has retained control through the six months
ended 30 June 2024. Were the Group to conclude that it no longer
retains control, the Russian operations would be treated as if they
had been disposed of, with the associated assets and liabilities
derecognised.
In July 2023, the Group sought and
gained permission for its Russian entity to commence limited
dividend payments, totalling around €140,000 per quarter, paid in
two tranches per quarter each of around €70,000. Four such payments
were received during H1 2024. There is no certainty how long
these payments will be able to continue.
Disclosure of Group revenues by geographic
location
|
|
Unaudited
6 months
ended 30
June 2024
|
|
Unaudited
6 months
ended 30
June 2023
|
|
Audited
Year ended
31 December
2023
|
|
|
£000
|
|
£000
|
|
£000
|
|
|
|
|
|
|
|
Americas
|
|
|
|
|
|
|
United States of
America
|
|
11,215
|
|
10,832
|
|
21,187
|
Rest of Americas
|
|
1,421
|
|
1,689
|
|
3,791
|
Europe, Middles East and Africa (EMEA)
|
|
|
|
|
|
|
Germany
|
|
3,689
|
|
4,248
|
|
8,231
|
United Kingdom
|
|
402
|
|
374
|
|
767
|
Ireland
|
|
142
|
|
1,006
|
|
1,277
|
Rest of Europe
|
|
2,084
|
|
2,207
|
|
4,094
|
Russia
|
|
1,638
|
|
1,690
|
|
3,568
|
Middle East
|
|
449
|
|
859
|
|
1,656
|
Africa
|
|
1,436
|
|
1,340
|
|
2,805
|
Asia and Rest of World
|
|
|
|
|
|
|
China
|
|
625
|
|
640
|
|
1,246
|
Rest of Asia and
Oceania
|
|
2,111
|
|
1,987
|
|
3,989
|
Total Revenue
|
|
25,212
|
|
26,872
|
|
52,611
|
4.
Exceptional items
Included within administration
expenses and cost of sales are exceptional items as shown
below:
|
|
Unaudited
6 months ended 30 June 2024
|
|
Unaudited
6 months ended 30 June 2023
|
|
Audited
year ended 31 December 2023
|
|
Note
|
£000
|
|
£000
|
|
£000
|
|
|
|
|
|
|
|
Exceptional items include:
|
|
|
|
|
|
|
- Business reorganisation costs -
other credited/(charged) to cost of sales
|
a
|
58
|
|
(196)
|
|
(577)
|
- Business reorganisation costs -
Impairment
|
b
|
-
|
|
(671)
|
|
(961)
|
- Business reorganisation costs -
other charged to operating expenses
|
c
|
(29)
|
|
(342)
|
|
(1,295)
|
Exceptional items
|
|
29
|
|
(1,209)
|
|
(2,833)
|
a.
|
Costs associated with the
transition and restructure of certain operations in the US, UK and
Germany, which have been charged to cost of sales. The costs
include provisions against certain COVID-19 related and other
inventory and provisions for certain onerous contracts following
the decision to focus on its other businesses. In 2024 some of
these provisions have been released.
|
b.
|
Impairments associated with the
transition and restructure of certain operations in the US, UK and
Germany, which have been charged to operating expenses.
|
c.
|
Costs associated with the
transition and restructure of certain operations in the US, UK and
Germany, which have been charged to operating expenses.
|
5. Income tax
|
|
Unaudited
6 months
ended 30
June 2024
|
|
Unaudited
6 months
ended 30
June 2023
|
|
Audited
Year ended
31 December 2023
|
|
|
£000
|
|
£000
|
|
£000
|
Current tax
|
|
|
|
|
|
|
Current tax on profit for the
period
|
|
350
|
|
431
|
|
1,182
|
Adjustments for prior
periods
|
|
(9)
|
|
(9)
|
|
(2,729)
|
Total current tax
|
|
341
|
|
422
|
|
(1,547)
|
|
|
|
|
|
|
|
Deferred tax
|
|
|
|
|
|
|
Origination and reversal of
temporary differences
|
|
496
|
|
(278)
|
|
947
|
Total deferred tax
|
|
496
|
|
(278)
|
|
947
|
Income tax charge
|
|
837
|
|
144
|
|
(600)
|
6. Earnings per share
Basic earnings per share is
calculated by dividing the profit attributable to equity holders of
the parent by the weighted average number of ordinary shares in
issue during the period.
Diluted profit per share is
calculated by adjusting the weighted average number of ordinary
shares outstanding assuming conversion of all dilutive potential
ordinary shares. The Company no longer has any dilutive potential
ordinary shares. The Company is holding 1,200,000 ordinary shares
in treasury. These shares have therefore been excluded from the
earnings per share calculation.
|
|
|
|
|
|
|
Audited year ended 31
December 2023
|
|
Unaudited
6 months ended 30 June 2024
|
Unaudited 6 months ended 30
June 2023
|
|
|
|
£'000
|
|
£'000
|
|
£'000
|
Profit/(loss) attributable to owners
of the parent
|
|
|
2,066
|
|
(358)
|
|
2,352
|
Weighted average number of
ordinary shares
in issue
|
|
|
453,730,564
|
|
454,492,995
|
|
454,105,359
|
Assumed conversion of share
awards
|
|
|
-
|
|
-
|
|
-
|
Weighted average number of
ordinary shares - diluted
|
|
|
453,730,564
|
|
454,492,995
|
|
454,105,359
|
|
|
|
|
|
|
|
|
|
|
|
Pence
|
|
Pence
|
|
Pence
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.46
|
|
(0.08)
|
|
0.52
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
0.46
|
|
(0.08)
|
|
0.52
|
7. Property, plant and
equipment
Group
|
Land and buildings
£'000
|
Fixtures and
fittings
£'000
|
Plant and
machinery
£'000
|
Motor
vehicles
£'000
|
Assets under
construct-ion
£'000
|
Right-of-use
assets
£'000
|
|
Total
£'000
|
|
Cost
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
12,150
|
1,972
|
14,877
|
210
|
6,415
|
3,322
|
|
38,946
|
Additions
|
1,033
|
23
|
1,432
|
-
|
857
|
52
|
|
3,397
|
Transfers
|
88
|
-
|
636
|
-
|
(724)
|
-
|
|
-
|
Disposal
|
-
|
(403)
|
(92)
|
-
|
(8)
|
(1,136)
|
|
(1,639)
|
Disposal of subsidiary
|
(5)
|
-
|
(1,584)
|
-
|
-
|
-
|
|
(1,589)
|
Exchange differences
|
(435)
|
(48)
|
(516)
|
(44)
|
(296)
|
(127)
|
|
(1,466)
|
At
30 June 2023
|
12,831
|
1,544
|
14,753
|
166
|
6,244
|
2,111
|
|
37,649
|
Additions
|
1,548
|
85
|
747
|
55
|
1,019
|
559
|
|
4,013
|
Transfers
|
107
|
(22)
|
5,933
|
-
|
(6,075)
|
-
|
|
(57)
|
Disposals
|
-
|
(180)
|
(224)
|
(13)
|
4
|
669
|
|
256
|
Exchange differences
|
27
|
10
|
58
|
-
|
(4)
|
(16)
|
|
75
|
At
31 December 2023
|
14,513
|
1,437
|
21,267
|
208
|
1,188
|
3,323
|
|
41,936
|
Additions
|
918
|
80
|
390
|
-
|
111
|
517
|
|
2,016
|
Transfers
|
73
|
-
|
940
|
-
|
(1,013)
|
-
|
|
-
|
Disposal
|
-
|
(1)
|
(20)
|
(10)
|
(45)
|
(1,053)
|
|
(1,129)
|
Exchange differences
|
(35)
|
(18)
|
(187)
|
10
|
(19)
|
4
|
|
(245)
|
At
30 June 2024
|
15,469
|
1,498
|
22,390
|
208
|
222
|
2,791
|
|
42,578
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
3,344
|
1,371
|
10,397
|
77
|
-
|
2,043
|
|
17,232
|
Exchange differences
|
(143)
|
(31)
|
(351)
|
(16)
|
-
|
(74)
|
|
(615)
|
Disposal
|
-
|
(378)
|
(89)
|
-
|
-
|
(1,112)
|
|
(1,579)
|
Disposal of subsidiary
|
(5)
|
-
|
(1,410)
|
-
|
-
|
-
|
|
(1,415)
|
Impairment
|
-
|
-
|
-
|
-
|
-
|
353
|
|
353
|
Transfers
|
18
|
-
|
(18)
|
-
|
-
|
-
|
|
-
|
Charge for the period
|
310
|
193
|
682
|
11
|
-
|
394
|
|
1,590
|
At
30 June 2023
|
3,524
|
1,155
|
9,211
|
72
|
-
|
1,604
|
|
15,566
|
Exchange differences
|
(2)
|
6
|
43
|
-
|
-
|
(1)
|
|
46
|
Disposal
|
-
|
(202)
|
(236)
|
(9)
|
-
|
645
|
|
198
|
Impairment
|
-
|
-
|
-
|
-
|
-
|
(278)
|
|
(278)
|
Transfers
|
(18)
|
-
|
(39)
|
-
|
-
|
-
|
|
(57)
|
Charge for the period
|
366
|
106
|
883
|
9
|
-
|
322
|
|
1,686
|
At
31 December 2023
|
3,870
|
1,065
|
9,862
|
72
|
-
|
2,292
|
|
17,161
|
Exchange differences
|
(5)
|
(15)
|
(145)
|
3
|
-
|
-
|
|
(162)
|
Disposal
|
-
|
(1)
|
(11)
|
(10)
|
-
|
(1,040)
|
|
(1,062)
|
Charge for the period
|
383
|
94
|
920
|
9
|
-
|
327
|
|
1,733
|
At
30 June 2024
|
4,248
|
1,143
|
10,626
|
74
|
-
|
1,579
|
|
17,670
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
30
June 2024
|
11,221
|
355
|
11,764
|
134
|
222
|
1,212
|
24,908
|
31
December 2023
|
10,643
|
372
|
11,405
|
136
|
1,188
|
1,031
|
24,775
|
30
June 2023
|
9,307
|
389
|
5,542
|
94
|
6,244
|
507
|
22,083
|
|
|
|
|
|
|
|
|
|
|
|
8. Intangible Fixed
Assets
Group
|
Good-will
£'000
|
Trademarks trade names &
licences
£'000
|
Customer
relationships
£'000
|
Trade
secrets
£'000
|
Develop-ment
costs
£'000
|
Software
£'000
|
|
Total
£'000
|
|
Cost
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
29,376
|
4,632
|
17,273
|
14,050
|
6,166
|
3,731
|
|
75,228
|
Additions
|
-
|
15
|
-
|
-
|
118
|
5
|
|
138
|
Disposal
|
-
|
-
|
-
|
-
|
(427)
|
-
|
|
(427)
|
Disposal of subsidiary
|
(4,161)
|
(517)
|
(1,293)
|
-
|
-
|
(2,975)
|
|
(8,946)
|
Transfer
|
-
|
726
|
-
|
(520)
|
(206)
|
-
|
|
-
|
Exchange differences
|
(911)
|
(211)
|
(739)
|
(366)
|
(182)
|
(94)
|
|
(2,503)
|
At
30 June 2023
|
24,304
|
4,645
|
15,241
|
13,164
|
5,469
|
667
|
|
63,490
|
Additions
|
-
|
(7)
|
-
|
-
|
251
|
(5)
|
|
239
|
Disposal
|
-
|
-
|
-
|
-
|
(212)
|
-
|
|
(212)
|
Exchange differences
|
121
|
40
|
30
|
92
|
31
|
2
|
|
316
|
At
31 December 2023
|
24,425
|
4,678
|
15,271
|
13,256
|
5,539
|
664
|
|
63,833
|
Additions
|
-
|
6
|
-
|
-
|
257
|
-
|
|
263
|
Disposal
|
-
|
-
|
-
|
-
|
(1,816)
|
-
|
|
(1,816)
|
Transfer
|
-
|
-
|
-
|
-
|
-
|
-
|
|
-
|
Exchange differences
|
(280)
|
(58)
|
(45)
|
(229)
|
(83)
|
1
|
|
(694)
|
At
30 June 2024
|
24,145
|
4,626
|
15,226
|
13,027
|
3,897
|
665
|
|
61,586
|
|
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
4,254
|
4,047
|
15,586
|
12,014
|
2,211
|
3,344
|
|
41,456
|
Exchange differences
|
(93)
|
(154)
|
(668)
|
(323)
|
(129)
|
(78)
|
|
(1,445)
|
Disposal
|
-
|
-
|
-
|
-
|
(423)
|
-
|
|
(423)
|
Disposal of subsidiary
|
(4,161)
|
(517)
|
(1,293)
|
-
|
-
|
(2,975)
|
|
(8,946)
|
Charge for the period
|
-
|
208
|
620
|
191
|
584
|
81
|
|
1,684
|
At
30 June 2023
|
-
|
3,584
|
14,245
|
11,882
|
2,243
|
372
|
|
32,326
|
Exchange differences
|
0
|
(8)
|
26
|
80
|
47
|
(5)
|
|
140
|
Disposal
|
-
|
-
|
-
|
-
|
(256)
|
-
|
|
(256)
|
Impairment
|
-
|
-
|
-
|
-
|
887
|
-
|
|
887
|
Charge for the period
|
-
|
221
|
388
|
152
|
(297)
|
48
|
|
512
|
At
31 December 2023
|
-
|
3,797
|
14,659
|
12,114
|
2,624
|
415
|
|
33,609
|
Exchange differences
|
-
|
(39)
|
(44)
|
(202)
|
(38)
|
1
|
|
(322)
|
Disposal
|
-
|
-
|
-
|
-
|
(1,816)
|
-
|
|
(1,816)
|
Charge for the period
|
-
|
162
|
168
|
94
|
173
|
52
|
|
649
|
At
30 June 2024
|
-
|
3,920
|
14,783
|
12,006
|
943
|
468
|
|
32,120
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value
|
|
|
|
|
|
|
|
|
30
June 2024
|
24,145
|
706
|
443
|
1,021
|
2,954
|
197
|
|
29,466
|
31
December 2023
|
24,425
|
881
|
612
|
1,142
|
2,915
|
249
|
|
30,224
|
30
June 2023
|
24,304
|
1,061
|
996
|
1,282
|
3,226
|
295
|
|
31,164
|
9. Dividends
In December 2023, the Company paid
a final dividend of 1.2p per ordinary share. Based on the need for
continued investment in our core areas the Board has decided that
it would be prudent to discontinue dividend payments. The Board
will however consider recommencing the payment of dividends if and
when appropriate.
10.
Availability of this announcement
This announcement and the Group's
Interim Report for the six months ended 30 June 2024 are available
from the Company's website, www.ekfdiagnostics.com.
If you would like to receive a hard copy of the Interim Report,
please contact the EKF Diagnostics Holdings plc offices on +44
(0)29 2071 0570 to request a copy.