TIDMERGO
RNS Number : 6771A
Ergomed plc
28 March 2017
PRESS RELEASE
EMBARGOED FOR RELEASE
7.00am 28 MARCH 2017
Unaudited Preliminary Results for the year ended 31 December
2016
Top line revenue growth of 30%
Gross profit up 43%
New business won in 2016 increased 50% to GBP42 million
Contracted backlog at 1 January 2017 of GBP70 million
Multiple corporate milestones achieved in 2016
Post year-end positive Phase II results announced from insomnia
study
London, UK - 28 March 2017: Ergomed plc, ('Ergomed', AIM: ERGO)
a profitable UK-based group dedicated to the provision of
specialised services to the pharmaceutical industry and the
development of new drugs, today announces its unaudited Preliminary
Results for the year ended 31 December 2016.
Commenting on the results, Miroslav Reljanovic MD, Chief
Executive Officer of Ergomed plc, said:
"I am proud of our achievements in 2016, a transformational
year. We met our financial targets, delivering increased revenue
and gross profit and at the same time achieved a number of
important corporate milestones. The Board remains focused on
delivering significant shareholder value by the continuing
development of Ergomed's exciting hybrid business model.
The acquisitions(1) of O+P and GASD strengthened our CRO service
offering whilst the acquisition of PharmInvent consolidated our
position as a leading international, fast growing provider of
pharmacovigilance services. Positive Phase II results from our
co-development partnership with Ferrer and the acquisition of
Haemostatix underline the potential of our drug development
pipeline and its potential to deliver very significant shareholder
value in the medium term. Based on our GBP70 million contracted
backlog and the opportunities in front of us I believe 2017 will be
another exciting year for Ergomed."
Financial Highlights: Performance ahead of market
expectations
-- Revenues up 30% to GBP39.2 million (2015: GBP30.2 million)
-- Gross profit up 43% to GBP12.0 million (2015: GBP8.4 million)
-- EBITDA (adjusted)(2) was GBP3.0 million (2015: GBP3.4
million) and EBITDA was GBP1.6 million (2015: GBP2.8 million),
reducing principally due to inclusion of Haemostatix R&D (2016:
GBP1.0 million, 2015: GBPnil) following its acquisition (note
12)
-- EPS (adjusted) was 7.1p (2015: 9.2p) and EPS was 1.3p (2015:
5.2p), again due to the inclusion of Haemostatix R&D following
its acquisition in May 2016 (note 13)
-- Cash and cash equivalents of GBP4.4 million as at 31 December
2016 (2015: GBP4.0 million) with zero debt (2015: GBPnil)
-- New contracts won in 2016 up 50% with an initial value of
GBP42 million (2015: GBP28 million)
-- Strong backlog of GBP70 million contracted revenue as of 1
January 2017 (1 January 2016: GBP59 million)
Notes:
1. The Company made four acquisitions during the year;
Haemostatix Limited ("Haemostatix") in May 2016, Dr Oestreich+
Partner GmbH ("O+P") and Gesellschaft für angewandte Statistik +
Datenanalyse mbH ("GASD") acquired together in June 2016 and
European PharmInvent Services s.r.o. ("PharmInvent") in November
2016.
2. Adjustments are made to EBITDA for share-based payment
charge, deferred consideration for acquisition, write-back of
deferred consideration for acquisition, acquisition costs and
exceptional items.
3. Adjustments are made to EPS for amortisation of acquired fair
valued intangible assets, share-based payment charge, deferred
consideration for acquisition, write-back of deferred consideration
for acquisition, acquisition costs and exceptional items.
Operational Highlights: Significant corporate milestones
achieved
-- An institutional placing raising gross proceeds of GBP9.2 million (May 2016)
-- Acquisition of Haemostatix, a company focused on developing
innovative products for surgical bleeding based in Nottingham, UK
(May 2016) (see note 6)
-- Acquisitions of O+P and GASD, respectively CRO and
biostatistics companies, both based in Germany (June 2016) (see
note 7)
-- Acquisition of PharmInvent, a leading pharmacovigilance and
regulatory services business based in Czech Republic (November
2016) (see note 8)
-- An agreement with Asarina AB for the co-development of
sepranolone for the treatment of PMDD (November 2016)
Post-year-end highlights
-- Ergomed's co-development partner, Ferrer, announced positive
Phase II results of lorediplon for insomnia (February 2017)
-- Ergomed initiated a Phase IIb study of PeproStat, our
wholly-owned development product and the first to come from the
Haemostatix pipeline (March 2017)
Enquiries:
Ergomed plc Tel: +44 (0) 1483 503205
Miroslav Reljanovic (Chief Executive Officer)
Stephen Stamp (Chief Financial Officer)
Numis Securities Limited Tel: +44 (0) 20 7260 1000
Michael Meade / Freddie Barnfield (Nominated Adviser)
James Black (Joint Broker)
Stifel Nicolaus Europe Limited Tel: +44 (0) 20 7710 7600
Jonathan Senior / Ben Maddison (Joint Broker)
FTI Consulting - for UK enquiries Tel: +44 (0) 20 3727 1000
Simon Conway / Mo Noonan / Natalie Garland-Collins
MC-Services - for Continental European enquiries Tel: +49 211 5292 5222
Anne Hennecke
About Ergomed
Ergomed plc is a profitable UK-based business providing drug
development services to the pharmaceutical industry and has a
growing portfolio of co-development partnerships. It operates in
over 50 countries.
Ergomed provides clinical development, trial management and
pharmacovigilance services to over 100 clients ranging from top 10
pharmaceutical companies to small and mid-sized drug development
companies. Ergomed successfully manages clinical development from
Phase I through to late phase programmes.
Ergomed has a wide therapeutic focus, with a particular
expertise in oncology, neurology and immunology and the development
of orphan drugs. Ergomed believes its approach to clinical trials
is differentiated from that of other providers by its innovative
Study Site Management model and the use of Study Physician Teams,
resulting in a close relationship between Ergomed and the
physicians involved in clinical trials.
As well as providing high quality clinical development services,
Ergomed is building a portfolio of co-development partnerships with
pharma and biotech companies which share the risks and rewards of
drug development. Ergomed leverages its expertise and services in
return for carried interest in the drugs under development. Lastly,
Ergomed acquired a pipeline of proprietary development products for
the treatment of surgical bleeding. For further information, visit:
http://ergomedplc.com.
Forward Looking Statements
Certain statements contained within the announcement are forward
looking statements and are based on current expectations, estimates
and projections about the potential returns of Ergomed plc
("Ergomed") and industry and markets in which Ergomed operates, the
Directors' beliefs and assumptions made by the Directors. Words
such as "expects", "anticipates", "should", "intends", "plans",
"believes", "seeks", "estimates", "projects", "pipeline" and
variations of such words and similar expressions are intended to
identify such forward looking statements and expectations. These
statements are not guarantees of future performance or the ability
to identify and consummate investments and involve certain risks,
uncertainties, outcomes of negotiations and due diligence and
assumptions that are difficult to predict, qualify or quantify.
Therefore, actual outcomes and results may differ materially from
what is expressed in such forward looking statements or
expectations. Among the factors that could cause actual results to
differ materially are: the general economic climate, competition,
interest rate levels, loss of key personnel, the result of legal
and commercial due diligence, the availability of financing on
acceptable terms and changes in the legal or regulatory
environment.
These forward-looking statements speak only as of the date of
this announcement. Ergomed expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statements contained herein to reflect any change
in Ergomed's expectations with regard thereto, any new information
or any change in events, conditions or circumstances on which any
such statements are based, unless required to do so by law or any
appropriate regulatory authority.
Chief Executive Officer's Review
The Board of Ergomed is delighted to report on a
transformational year. The Company exceeded its targets in terms of
revenue and adjusted EBITDA, raised GBP9.2 million in an
institutional placing, completed four acquisitions, of which O+P
and GASD were acquired at the same time, and added another
partnership to the co-development portfolio.
Services - another year of good growth
New business won in 2016 of GBP42 million, up 50% on 2015, drove
overall Services revenue growth of 30%. Services growth was powered
by Drug Safety & Medical Information revenues which grew at
63%, complemented by 18% growth from Clinical Research Services.
Excluding acquisitions, overall revenue growth was 27%.
In June 2016, we announced the acquisitions of O+P and GASD
based in Cologne and Neuss, Germany respectively. O+P is a full
service contract research organisation that has also developed a
proprietary FDA validated Electronic Data Capture (EDC) system
called OPVERDI, which can be configured for individual trials on a
multilingual basis. GASD offers data management, statistical
analysis, biometric reporting and statistical consulting services
for the pharmaceutical industry. In addition to a scalable EDC
system and world-class biostatistics expertise, the acquisitions of
O+P and GASD have brought greater access to the German speaking
markets and have already resulted in several contract wins.
In November 2016, we announced the acquisition of PharmInvent
based in Prague, Czech Republic. PharmInvent is led by an
experienced, ex-regulatory agency team that offers drug safety and
regulatory consultancy expertise. They also have an extensive
network of international pharmacovigilance experts that provide
advice and support on local product safety and offer integrated
global support for pharma and generic companies' products.
Combining PharmInvent's proven expertise with PrimeVigilance
creates one of the largest international specialist service
providers in the highly regulated drug safety sector. The enlarged
business has a broad international client list offering significant
opportunities to cross sell, as well as an expanded range of
services to attract new customers.
Global demand for quality outsourced drug development and drug
safety services remains strong and Ergomed continues to benefit
from this trend. Ergomed ended 2016 with a total backlog of
contracted work with a value to be invoiced in future years of
approximately GBP70 million (2015: GBP59 million).
Products - Haemostatix and one more co-development partnership
added
Ergomed is also in the distinct position of offering
co-development partnerships and is committed to building its
portfolio of co-development assets and delivering clinical data
thereby creating significant potential shareholder value in the
next few years.
As part of our co-development business development activities,
we identified what we believe to be a particularly promising
opportunity in Haemostatix. With solid pre-clinical and clinical
evidence and a low cost yet fast development programme, we believe
Haemostatix offers a rare opportunity to capture the full value of
the product potential with reasonable risk. We acquired Haemostatix
in May 2016, at the same time raising GBP9.2 million via an
institutional placing. Since then, we have been preparing
PeproStat, a liquid haemostat for a Phase IIb study and announced
the start of the trial in March 2017. We expect to complete
recruitment around the end of the year with topline results
available in the first quarter of 2018. At the same time,
ReadyFlow, a flowable gel haemostat, is in formulation development
and is expected to be Phase I ready by the first quarter of 2018.
With combined annual peak sales potential of up to $500 million,
the Board believes the Haemostatix products have the capability to
deliver very significant value to Ergomed shareholders not
otherwise achievable in traditional co-development deals.
In November 2016 we signed a co-development agreement with
Asarina AB for the Phase IIb clinical development of sepranolone as
a targeted treatment for premenstrual dysphoric disorder (PMDD).
The co-development deal with Asarina is Ergomed's second with a
Karolinska Development spin-out company and brings the portfolio of
co-development programmes to six in total. The status of Ergomed's
current co-development partnerships is summarised as follows:
Company Study Overview Update
-------------------- -------------------------------------------------------------- --------------------------------
Ferrer We were very pleased to
Private * Phase IIa study in insomnia announce that the primary
www.ferrer.com and many of the secondary
endpoints for the Phase
* Lorediplon II study were met, indicating
that lorediplon was both
safe and effective in insomnia
* 145 patients patients. Ferrer is currently
exploring the full data
set and will initiate
* 11 clinical sites in 3 countries partnering
activities. Whilst the
product already has an
Asian commercial partner,
Ferrer will look to bring
on board a commercial partner
for US marketing and to
support the ongoing clinical
development. If Ferrer
receive a payment at completion
of this licensing deal,
Ergomed will receive a
share, along with a share
of all future revenues
received by Ferrer for
the commercialisation of
the product.
-------------------- -------------------------------------------------------------- --------------------------------
Aeterna Zentaris In January 2017 Aeterna
(NASDAQ: AEZS; * Phase III Zoptrex(TM) pivotal study in endometrial Zentaris announced completion
TSX: AEZ) cancer of the study, with the
www.aezsinc.com required number of patient
outcomes. We are currently
* Zoptarelin doxorubicin in the process of collecting
the final data points and
the results of the study
* 500 patients are expected to be announced
in April 2017. If successful,
the next step for this
* 115 clinical sites in 22 countries product would be registration.
Aeterna Zentaris has entered
into five marketing
partnerships
with Zoptrex for various
territories in Asia, Israel,
Australia and New Zealand.
Ergomed has received a
percentage of the upfront
payments and will receive
its share of further receipts
according to our revenue
share agreement.
-------------------- -------------------------------------------------------------- --------------------------------
CEL-SCI Having reached the recruitment
(NYSE MKT: * Phase III study in head and neck cancer target but observed a lower
CVM) overall death rate, CEL-SCI
www.cel-sci.com decided to submit a protocol
* Multikine(R) amendment to include additional
patients into the study.
During the review of the
* 880 patients amendment, the FDA put
the study on a partial
clinical hold requesting
* 105 clinical sites in 24 countries additional information.
CEL-SCI is in a continuing
dialogue with the FDA to
try to resolve the questions
posed and supply the FDA
with supplemental information.
Following a Type A meeting
with the FDA, on 8 February
2017, CEL-SCI announced
that they were continuing
with efforts to have the
clinical hold released.
-------------------- -------------------------------------------------------------- --------------------------------
CEL-SCI With the ongoing discussions
(NYSE MKT: * Phase I peri-anal warts in HIV/HPV with the FDA regarding
CVM) the head and neck cancer
www.cel-sci.com trail, CEL-SCI has temporarily
* Multikine(R) suspended patient recruitment
in the peri-anal warts
study. All other activities,
* 15 patients including pre-screening
activities to identify
potential subjects are
* 1 clinical site ongoing.
-------------------- -------------------------------------------------------------- --------------------------------
Modus Therapeutics The first interim analysis
Part of Karolinska * Phase II in vaso-occlusive crisis in patients with was completed in November
Development sickle cell disease 2016, demonstrating a good
AB safety profile and the
(STO: KDEV) study enrolment was extended
www.modustx.com * Orphan drug indication to adolescents. With this
permission, Modus Therapeutics
decided to adjust the
* Sevuparin statistical
assumptions and include
150 patients (up from 77)
* Up to 154 patients to give the study the strongest
chance to reach a significant
readout. It is planned
* 11 clinical sites in 5 countries that this recruitment target
will be reached by first
quarter 2018 with study
results released thereafter.
-------------------- -------------------------------------------------------------- --------------------------------
Asarina PMDD is an extremely severe
Part of Karolinska * Phase IIb study in premenstrual dysphoric disorder form of pre-menstrual syndrome
Development (PMDD) - protocol is under development with where women are, on a regular
AB basis, unable to work or
(STO: KDEV) live a normal life for
www.asarinapharma * 235 patients planned from several days each cycle.
.com We are currently preparing
the study protocol and
* 14 sites in 5 countries expect the first patients
to be recruited in the
second half of 2017 with
the study completing in
2018.
-------------------- -------------------------------------------------------------- --------------------------------
Outlook
The current backlog of services contracts means Ergomed is well
positioned to deliver its revenue targets for 2017, although the
market for clinical research out-sourcing remains highly
competitive. Ergomed continues to seek focused acquisition
opportunities to expand the services business. This expansion of
our profitable service businesses remains the core component of
Ergomed's strategy and the Board is prioritising this
initiative.
We are on track to progress the Haemostatix pipeline in 2017
with the start of the Phase IIb clinical trial of PeproStat and the
pre-clinical development of ReadyFlow. Our co-development business
continues to gain traction as we seek more partnership
opportunities to extend our diverse pipeline of development
projects. Ergomed also anticipates further clinical updates from
its existing partnerships with the next inflexion point being
pivotal Phase III data on Zoptrex(TM) from our co-development
partner Aeterna Zentaris in April 2017.
Miroslav Reljanovic M.D. - Chief Executive Officer
Financial Review
Key Performance Indicators
The Directors consider the principal financial performance
indicators of the Group to be:
GBPm 2016 2015
Revenue 39.2 30.2
Gross profit 12.0 8.4
Research and development expenditure 1.0 -
EBITDA (adjusted) (note 12) 3.0 3.4
Cash and cash equivalents 4.4 4.0
The Directors consider the principal non-financial performance
indicators of the Group to be:
-- The delivery of high quality services that continue to meet
the highest industry standards as evidenced by internal and
external quality audits
-- The development or acquisition of new and/or the expansion of existing service offerings
-- The expansion of the co-development portfolio with the
addition of two new partnerships per year
Condensed Consolidated Statement of Comprehensive Income
Revenue for the year ended 31 December 2016 was GBP39.2 million
(2015: GBP30.2 million), an increase of 30%, driven by 63% growth
in drug safety and medical information, complemented by 18% growth
from clinical research services. Excluding the impact of
acquisitions, revenues grew at 27%.
Gross profit was GBP12.0 million and gross margin was 31% (2015:
gross profit GBP8.4 million and gross profit margin 28%). Ergomed's
gross margin fluctuates compared to a traditional clinical research
organisation (CRO) service provider as Ergomed operates a hybrid
model working with customers on a normal full priced basis as well
as working with co-development partners where Ergomed is carrying
out clinical studies at reduced fees in return for carried
interests in the partnered product. The mix of full service work to
co-development work in any given period therefore impacts the gross
profit and gross margin in that period.
Administration expenses were GBP10.5 million (2015: GBP6.4
million), an increase of GBP4.1 million. Included in administrative
expenses are increases in amortisation of acquired fair valued
intangible assets of GBP0.2 million, share-based payment charge of
GBP0.1 million, deferred consideration for acquisition of GBP0.7
million, acquisition costs of GBP0.3 million, exceptional items of
GBP0.1 million offset by a write-back of deferred consideration for
acquisition of GBP0.5 million. The increase in other administrative
expenses of GBP3.1 million was driven by an additional GBP1.2
million of overhead in acquisitions, GBP0.7 million investments in
improved corporate infrastructure, GBP0.3 million additional
recruitment costs, GBP0.2 million increase in investor relations
and public relations activities, GBP0.1 million increase in
depreciation and GBP0.9 million provision for doubtful debts offset
by foreign exchange gains of GBP0.4 million.
Research and development costs were GBP1.0 million (2015:
GBPnil) relating to Haemostatix and included chemistry,
manufacturing and controls (CMC) costs in preparation for a Phase
IIb clinical trial of PeproStat and pre-clinical formulation
development costs for ReadyFlow.
Deferred consideration for achieving 2016 financial targets of
GBP0.7 million in respect of PharmInvent has been charged to profit
and loss in the year because it is tied to the continued employment
of the vendors.
The Company incurred acquisition costs totalling GBP0.6 million
(2015: GBP0.3 million) in the year, primarily in respect of the
Haemostatix, O+P and GASD and PharmInvent acquisitions. In
addition, GBP0.2 million in respect of start-up costs for
PrimeVigilance's US office was recognised as an exceptional
item.
Included in finance charges is GBP0.3 million relating to the
unwinding of the discount applied to contingent consideration for
Haemostatix.
The Group's tax charge was reduced by an R&D tax credit of
GBP0.2 million in the year.
Condensed Consolidated Balance Sheet
As at 31 December 2016 total assets less total liabilities
amounted to GBP34.6 million (2015: GBP16.9 million) including cash
and cash equivalents of GBP4.4 million (2015: GBP4.0 million).
The principal movements in the Condensed Consolidated Balance
Sheet during the year were:
-- Acquisitions of Haemostatix, O+P and GASD and PharmInvent in
May 2016, June 2016 and November 2016 respectively and the
associated goodwill of GBP5.5 million and intangible assets of
GBP19.3 million.
-- Increase in trade and other receivables by GBP5.4 million
reflecting higher trading levels and a GBP0.5 million increase in
clinical trial inventory.
-- An increase in deferred consideration, after unwinding of
discount, of GBP8.2 million in respect of Haemostatix. Deferred
consideration in respect of PharmInvent is recognised as incurred
in the profit and loss account since it is tied to the continued
employment by the vendors of that business.
-- An increase in deferred tax liability of GBP2.5 million,
principally related to the acquisitions of Haemostatix, O+P and
GASD and PharmInvent.
-- An increase in share premium, arising from the Institutional Placing, net of costs.
-- An increase in merger reserve, arising from the acquisitions
of Haemostatix, O+P and GASD and PharmInvent.
Condensed Consolidated Cash Flow Statement
At present, the Group does not have any borrowings or long term
debt apart from a few immaterial fixed asset finance leases.
Cash inflows from operating activities before changes in working
capital in the year were GBP2.7 million (2015: GBP2.7 million).
Changes in working capital included a GBP3.7 million increase in
trade and other receivables, a GBP0.4 million increase in inventory
and a GBP0.1 million decrease in trade and other payables.
Cash outflows from investing activities were GBP5.8 million
including the acquisitions of Haemostatix, O+P and GASD and
PharmInvent together with deferred consideration of GBP0.1 million
for Sound Opinion, GBP0.4 million for the acquisition of tangible
assets and GBP0.7 million for the acquisition of intangible
assets.
The Group also paid taxation of GBP0.9 million in 2016 (2015:
GBP0.6 million).
Financial Outlook
Ergomed's Board has set the objective of remaining profitable
and cash generative. This is being achieved by running profitable
services businesses alongside a managed portfolio of drug
co-development partnerships where Ergomed contributes services at
reduced prices in return for a carried interest in the potential
commercial returns that may be generated in the future.
Ergomed currently had a strong contracted backlog of about GBP70
million at 1 January 2017. The overall trading environment for full
service business is generally strong although still very
competitive. Ergomed's Board believes it can continue to generate
further growth and profits from both the Clinical Research and
PrimeVigilance / PharmInvent businesses in 2017 and beyond whilst
at the same time expanding the co-development portfolio on a
selected basis.
Going concern
As at 31 December 2016 the Group had GBP4.4 million in cash or
cash equivalents and a strong backlog of signed contracts. The
Directors therefore expect Ergomed's services business to remain
both profitable and cash generative. Taking into account existing
cash resources and, after due consideration of cash flow forecasts,
the Directors are of the view that Ergomed will continue to have
access to adequate resources to allow the Group to continue trading
on normal terms of business for no less than 12 months from the
date of signing of the financial statements and have therefore
prepared the financial statements on a going concern basis.
UNAUDITED PRELIMINARY RESULTS
Condensed Consolidated Income Statement
2016 2015
Notes GBP000s GBP000s
REVENUE 2 39,233 30,178
Cost of sales (27,239) (21,808)
Gross profit 11,994 8,370
Administrative expenses (10,483) (6,379)
--------------------------------------- ------- -------- --------
Administrative expenses comprises:
Other administrative expenses (8,323) (5,186)
Amortisation of acquired fair
valued intangible assets (771) (596)
Share-based payment charge (398) (288)
Deferred consideration for acquisition 8 (690) -
Write-back of deferred consideration
for acquisition 460 -
Acquisition costs 9 (584) (272)
Exceptional items 10 (177) (37)
--------------------------------------- ------- -------- --------
Research and development (1,040) -
Other operating income 127 81
OPERATING PROFIT 598 2,072
Investment revenues 2 1
Finance costs 3 (274) (1)
PROFIT BEFORE TAXATION 326 2,072
Taxation 4 153 (520)
PROFIT FOR THE YEAR 479 1,552
EARNINGS PER SHARE
Basic 5 1.3p 5.4p
Diluted 5 1.3p 5.2p
All activities in the current and prior period relate to
continuing operations.
Condensed Consolidated Statement of Comprehensive Income
2016 2015
GBP000s GBP000s
Profit for the year 479 1,552
Items that may be classified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations 680 (244)
Other comprehensive income for
the period net of tax 680 (244)
Total comprehensive income for
the period 1,159 1,308
Condensed Consolidated Balance Sheet
2016 2015
Notes GBP000s GBP000s
Non-current assets
Goodwill 12,285 7,488
Other intangible assets 19,842 2,819
Property, plant and equipment 717 335
Investments 271 183
Deferred tax asset 1,448 365
34,563 11,190
Current assets
Trade and other receivables 14,958 9,528
Clinical trial inventory 450 -
Cash and cash equivalents 4,424 3,974
19,832 13,502
Total assets 54,395 24,692
Current liabilities
Borrowings (3) (5)
Trade and other payables (7,077) (5,955)
Deferred revenue (1,393) (795)
Current tax liability (119) (478)
Total current liabilities (8,592) (7,233)
Net current assets 11,240 6,269
Non-current liabilities
Borrowings (5) (7)
Deferred consideration (7,772) -
Deferred tax liability (3,418) (516)
Total liabilities (19,787) (7,756)
Net assets 34,608 16,936
Equity
Share capital 406 288
Share premium account(1) 14 17,957 9,361
Merger reserve(1) 14 10,264 2,981
Share-based payment reserve 1,048 650
Translation reserve 143 (537)
Retained earnings 4,790 4,193
Total equity 34,608 16,936
1. Restated per note 14.
Consolidated Statement of Changes in Equity
Share Share Merger Share-based Translation Retained Total
capital Premium reserve payment reserve earnings
account reserve
GBP000s
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Balance at
31 December
2014 288 12,342 - 362 (293) 2,640 15,339
Correction
of accounting
treatment
(note 14) - (2,981) 2,981 - - - -
As re-stated 288 9,361 2,981 362 (293) 2,640 15,339
Profit for
the year - - - - - 1,552 1,552
Other comprehensive
income for
the year - - - - (244) - (244)
Total comprehensive
income for
the year - - - - (244) 1,552 1,308
Share-based
payment charge
for the year - - - 288 - - 288
Deferred tax
credit taken
directly to
equity - - - - - 1 1
Balance at
31 December
2015 288 9,361 2,981 650 (537) 4,193 16,936
Profit for
the year - - - - 479 479
Other comprehensive
income for
the year - - - - 680 - 680
Total comprehensive
income for
the year - - - - 680 479 1,159
Share-issue
for cash during
the year for
cash (net
of expenses) 66 8,596 - - - - 8,662
Share-issues
during the
year for non-cash
consideration 51 - 7,144 - - - 7,195
Contingent
share-issues
for non-cash
consideration 1 - 139 - - - 140
Share-based
payment charge
for the year - - - 398 - - 398
Deferred tax
credit taken
directly to
equity - - - - - 118 118
Balance at
31 December
2016 406 17,957 10,264 1,048 143 4,790 34,608
Condensed Consolidated Cash Flow Statement
2016 2015
GBP000s GBP000s
Cash flows from operating activities
Profit before taxation 326 2,072
Adjustment for:
Amortisation and depreciation 1,027 713
(Gain)/loss on disposal of fixed
assets (2) 4
Share-based payment charge 398 288
Acquisition of shares for non-cash
consideration (54) (142)
Exchange adjustments 418 (251)
Acquisition costs and deferred
consideration 726 54
Write-back of deferred consideration (414) -
Investment revenues (2) (1)
Finance costs 274 1
Operating cash flow before changes
in working capital and provisions 2,697 2,738
Increase in trade and other receivables (3,667) (2,898)
Increase in inventory (405) -
(Decrease)/increase in trade
and other payables (58) 1,012
(Cash utlised by)/generated from
operations (1,433) 852
Taxation paid (941) (588)
Net cash (outflow)/inflow from
operating activities (2,374) 264
Investing activities
Investment revenues received 2 1
Acquisition of intangible assets (705) (285)
Acquisition of property, plant
and equipment (404) (270)
Investment in joint venture and
other investments - (1)
Acquisition of subsidiary, net
of cash acquired (4,755) (312)
Receipts from sale of property,
plant and equipment 31 2
Net cash outflow from investing
activities (5,831) (865)
Financing activities
Issue of new shares 9,185 -
Expenses of fundraising (523) -
Finance costs paid (2) (1)
Increase in borrowings - 7
Repayment of borrowings (5) (7)
Net cash inflow/(outflow)from
financing activities 8,655 (1)
Net increase/(decrease) in cash
and cash equivalents 450 (602)
Cash and cash equivalents at
start of the year 3,974 4,576
Cash and cash equivalents at
end of year 4,424 3,974
ERGOMED PLC
NOTES TO THE UNAUDITED PRELIMINARY RESULTS
For the year ended 31 December 2016
1. BASIS OF PREPARATION
The unaudited preliminary results for the year ended 31 December
2016 were approved by the Board of Ergomed plc on 27 March 2017.
The unaudited preliminary results do not constitute the statutory
financial statements within the meaning of section 434 of the
Companies Act 2006, but are an extract from the financial
statements. They are based on, and are consistent with, those in
the Group's statutory accounts for the year ended 31 December 2016
and those financial statements will be delivered to the Registrar
of Companies following the Company's Annual General Meeting.
Financial statements for the year ended 31 December 2015 have been
delivered to the Registrar of Companies, with an unmodified
opinion.
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 audited statutory financial statements for the year ended 31
December 2016 are expected to be distributed to shareholders in
April 2017 and will be available at the registered office of the
Company, 26-28 Frederick Sanger Road, Surrey Research Park,
Guildford, Surrey, GU2 7YD. Details can also be found on the
Company's website at: www.ergomedplc.com.
The Consolidated balance sheet for 2014 and 2015 has been
re-stated. The re-statement had no impact on the Consolidated
income statement, Consolidated cash flow statement or the net
assets of the Group. This is detailed in note 14.
GOING CONCERN
The unaudited preliminary results have been prepared on the
going concern basis, which assumes that the Group will have
sufficient funds to continue in operational existence for the
foreseeable future, being a period of no less than 12 months from
the expected date of signing of the financial statements in April
2017. Having regard to the performance of the business, the
Directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence
for the foreseeable future. The Group is financed by funds
generated from profitable operations and equity.
The Directors have reviewed a cash flow forecast ("the
Forecast") for the period ending 31 December 2018. The Forecast
represents the Directors' best estimate of the Group's future
performance and necessarily includes a number of assumptions,
including the level of revenues. The Forecast demonstrates that the
Directors have a reasonable expectation that the Group will be able
to meet its liabilities as they fall due, for a period of at least
12 months from the date of approval of the financial
statements.
On the basis of the above factors and, having made appropriate
enquiries, the Directors have a reasonable expectation that the
Company and Group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing these
unaudited preliminary results.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical judgements in applying the Group's accounting
policies
The following are the critical judgements, apart from those
involving estimations (which are dealt with separately below), that
the Directors have made in the process of applying the Group's
accounting policies and that have the most significant effect on
the amounts recognised in the unaudited preliminary results.
Revenue recognition
The amount of revenue to be recognised is based on, inter alia,
management's estimate of the fair value of the consideration
received or receivable, the stage of completion and of the point in
time at which management considers that it becomes probable that
economic benefits will flow to the entity (as the outcome is not
always certain at the inception of a contract).
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the reporting period, that may have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Bad debt provision
In determining the level of provisioning for bad debts, the
Directors have considered the aging of trade receivables, and the
payment history and financial position of debtors. The provision
against trade receivables as at 31 December 2016 was GBP1,016,000
(2015: GBP233,000).
Impairment of Goodwill
Under IFRSs, goodwill is reviewed for impairment at least
annually. Determining whether goodwill is impaired requires an
estimation of the recoverable amount of the cash-generating units
to which goodwill has been allocated. The calculation of the
recoverable amount requires the entity to estimate the future cash
flows expected to arise from the cash-generating unit and a
suitable discount rate in order to determine whether the
recoverable amount is greater than the carrying value. The
impairment provision against goodwill as at 31 December 2016 was
GBPnil (2015: GBPnil).
Fair value measurements
Some of the Group's assets and liabilities are measured at fair
value for financial reporting purposes. In estimating the fair
value of an asset or a liability, the Group uses market-observable
data to the extent it is available. Where Level 1 inputs are not
available, the Group engages third party qualified valuers to
perform the valuation. The Directors work closely with the
qualified external valuers to establish the appropriate valuation
techniques and inputs to the model.
The Group incurs share-based payment charges in relation to
share options awards made in the current and prior periods. This
charge is based on the fair value of such share options for
financial reporting purposes. In estimating the fair value of a
share-based payment, the Group engages third party qualified
valuers to perform the valuation. The Directors work closely with
the qualified external valuers to establish the appropriate
valuation techniques and inputs to the model.
2. OPERATING SEGMENTS
Products and services from which reportable segments derive
their revenues
The Directors are of the opinion that the Group operates as two
business segments; clinical research services ("CRS") and drug
safety and medical information services ("DS&MI"). The business
segment, CRS includes the results of O+P and GASD which were
acquired on 12 June 2016. DS&MI includes the results of
PharmInvent which was acquired on 28 November 2016.
Geographical information
The Group's revenue from external customers by geographical
location is detailed below:
2016 Revenue from external
customers
CRS DS&MI Total
GBP000s GBP000s GBP000s
UK 3,330 4,746 8,076
Europe, Middle East and Africa 15,590 4,461 20,051
North America 6,490 4,018 10,508
Asia 367 27 394
Australia - 204 204
25,777 13,456 39,233
2015 Revenue from external
customers
CRS DS&MI Total
GBP000s GBP000s GBP000s
UK 2,748 3,395 6,143
Europe, Middle East and Africa 9,407 2,878 12,285
North America 7,945 1,874 9,819
Asia 1,806 3 1,809
Australia - 122 122
21,906 8,272 30,178
2016 Consolidated
CRS DS&MI Eliminations total
GBP000s GBP000s GBP000s GBP000s
Revenue
Third party sales 25,777 13,456 - 39,233
Intersegment sales
and recharges 670 2 (672) -
Total revenue 26,447 13,458 (672) 39,233
2016 Consolidated
CRS DS&MI Eliminations total
GBP000s GBP000s GBP000s GBP000s
Segment result 203 3,586 9 3,798
Research and development (1,040)
Amortisation of acquired
fair valued intangible
assets (771)
Share-based payment
charge (398)
Deferred consideration
for acquisition (690)
Write back of deferred
consideration for
acquisition 460
Acquisition costs (584)
Exceptional items (177)
Operating profit 598
Investment revenues 2
Finance costs (274)
Profit before tax 326
Tax 153
Profit after tax 479
2015 Consolidated
CRS DS&MI Eliminations total
GBP000s GBP000s GBP000s GBP000s
Revenue
Third party sales 21,906 8,272 - 30,178
Intersegment sales
and recharges 67 9 (76) -
Total revenue 21,973 8,281 (76) 30,178
2015 Consolidated
CRS DS&MI Eliminations total
GBP000s GBP000s GBP000s GBP000s
Segment result 1,165 2,102 (2) 3,265
Amortisation of acquired
fair valued intangible
assets (596)
Share-based payment
charge (288)
Acquisition costs (272)
Exceptional items (37)
Operating profit 2,072
Investment revenues 1
Finance costs (1)
Profit before tax 2,072
Tax (520)
Profit after tax 1,552
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit represents the
profit earned by each segment. This is the measure reported to the
Group's Chief Executive Officer for the purpose of resource
allocation and assessment of segment performance.
Segment net assets
2016 2015
GBP000s GBP000s
CRS 16,489 5,913
DS&MI 18,119 11,023
Consolidated total net assets 34,608 16,936
For the purposes of monitoring segment performance and
allocating resources between segments, the Group's Chief Executive
Officer monitors the tangible, intangible and financial assets
attributable to each segment. All assets are allocated to
reportable segments.
Other segment information
Depreciation Additions to
and non-current assets
amortisation
2016 2015 2016 2015
GBP000s GBP000s GBP000s GBP000s
CRS 528 286 705 238
DS&MI 499 427 404 317
1,027 713 1,109 555
Information about major customers
In 2016, the Group had two customers that contributed 10% or
more to the Group's revenue. Revenues of approximately GBP5,479,000
and GBP4,771,000 were recognised from these customers respectively
for clinical research services.
In 2015, the Group had two customers that contributed 10% or
more to the Group's revenue. Revenues of approximately GBP5,219,000
and GBP5,181,000 were recognised from these customers
respectively.
3. FINANCE COSTS
2016 2015
GBP000s GBP000s
Interest payable (2) (1)
Finance charge for deferred consideration (272) -
for acquisition
(274) (1)
4. TAXATION
2016 2015
GBP000s GBP000s
Current tax
UK corporation tax (credit)/charge
for the year (181) 349
Overseas corporation tax 180 308
Adjustment in respect of prior years (16) 13
Current tax (credit)/charge (17) 670
Deferred tax
Origination and reversal of timing
differences (40) (143)
Effect of changes in tax rates (96) (7)
Tax (credit)/charge on profit (153) 520
The UK corporation tax credit for the year comprises an R&D
tax credit.
In addition to the amounts charged to the income statement and
other comprehensive income, the following amounts have been
recognised directly in equity:
2016 2015
GBP000s GBP000s
Deferred tax
Change in estimated excess tax deductions
related to share-based payments (118) (1)
Total income tax credit recognised
directly in equity (118) (1)
5. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following data:
2016 2015
GBP'000 GBP'000
Earnings for the purposes of basic
earnings per share being net profit
attributable to owners of the Company 479 1,552
Effect of dilutive potential ordinary - -
shares
Earnings for the purposes of diluted
earnings per share 479 1,552
2016 2015
No. No.
Number of shares
Weighted average number of ordinary
shares for the purposes of basic earnings
per share 35,573,733 28,750,000
Effect of dilutive potential ordinary
shares
Share options 1,484,600 1,015,223
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share 37,058,333 29,765,223
6. ACQUISITION OF SUBSIDIARY - HAEMOSTATIX
On 24 May 2016, Ergomed Plc acquired 100 per cent of the issued
share capital of Haemostatix, a research and development company
based in Nottingham, UK developing novel products for the surgical
bleeding market. The acquisition of Haemostatix enhances Ergomed's
portfolio of development products with the potential to generate
significant shareholder value. The amounts provisionally recognised
in respect of the identifiable assets acquired and liabilities
assumed are as set out in the table below.
Book Fair value Provisional
valuation adjustments valuation
GBP000s GBP000s GBP000s
Intangible assets - 15,200 15,200
Property, plant and equipment 4 - 4
Deferred tax asset - 1,015 1,015
Total non-current assets 4 16,215 16,219
Trade and other debtors 164 - 164
Clinical trial inventory 45 - 45
Cash and equivalents 63 - 63
Current assets 272 - 272
Trade and other creditors (1,365) - (1,365)
Deferred tax liability - (2,736) (2,736)
Financial liabilities (1,365) (2,736) (4,101)
Total identifiable net
assets/(liabilities) (1,089) 13,479 12,390
Goodwill 15,565 (13,479) 2,086
Total consideration 14,476 - 14,476
Satisfied by:
Cash 800 - 800
Equity 6,181 - 6,181
Deferred consideration 7,495 - 7,495
Total consideration 14,476 - 14,476
Net cash outflow arising
on acquisition
Cash consideration 800 - 800
Less: cash and cash equivalent
balances acquired (63) - (63)
Transaction costs (note
8) 370 - 370
1,107 - 1,107
The provisional fair value of intangible assets relates to the
in-process research and development of PeproStat(TM) and
ReadyFlow(TM). The provisional fair value of the financial assets
includes receivables with a fair value of GBP164,000 and a gross
contractual value of GBP164,000. The best estimate at acquisition
date of the contractual cash flows not to be collected is
GBPnil.
Goodwill is provisionally valued at GBP2,086,000. None of the
goodwill is expected to be deductible for income tax purposes.
Deferred consideration represents the fair valuation of the
additional consideration payable which could be an aggregate
maximum of GBP20,000,000, subject to the future performance of the
business.
Ergomed plc has a 12 month measurement period from the date of
acquisition, and therefore the measurement period ends on 23 May
2017.
As a research and development company, Haemostatix is investing
in its development portfolio and does not currently generate
revenues. If the acquisition of Haemostatix had been completed on
the first day of the financial year, group revenues for the year
ended 31 December 2016 would have been unchanged and group profit
before tax would have been GBP1,082,000 lower.
7. ACQUISITION OF SUBSIDIARY - O+P and GASD
On 12 June 2016, Ergomed acquired 100 per cent of the issued
share capital of O+P and GASD. O+P is a long established contract
research organisation based in Cologne, Germany and GASD is a
specialist data management and biostatistics company. The
acquisition of O+P and GASD brings, among other things, a
proprietary electronic data capture system and specialist
biostatics expertise which can be deployed across the Ergomed
global platform.
O+P and GASD were acquired as a single unit. The amounts
provisionally recognised in relation to both entities in respect of
the identifiable assets acquired and liabilities assumed are as set
out in the table below.
Book Fair value Provisional
valuation adjustments valuation
GBP000s GBP000s GBP000s
Intangible assets - 615 615
Property, plant and equipment 23 - 23
Total non-current assets 23 615 638
Trade and other debtors 91 - 91
Accrued income 71 - 71
Corporation Tax receivable 6 - 6
Cash and equivalents 498 - 498
Current assets 666 - 666
Trade and other creditors (218) - (218)
Tax payable (2) - (2)
Deferred tax - (164) (164)
Financial liabilities (220) (164) (384)
Total identifiable net
assets 469 451 920
Goodwill 938 (451) 487
Total consideration 1,407 - 1,407
Satisfied by:
Cash 802 - 802
Equity 190 - 190
Deferred consideration 415 - 415
Total consideration 1,407 - 1,407
Net cash inflow arising
on acquisition
Cash consideration 802 - 802
Less: cash and cash equivalent
balances acquired (498) - (498)
Transaction expenses (note
8) 85 - 85
389 - 389
The provisional fair value of the financial assets includes
receivables with a fair value of GBP91,000 and a gross contractual
value of GBP91,000. The best estimate at acquisition date of the
contractual cash flows not to be collected is GBPnil.
Goodwill is provisionally valued at GBP487,000 and is
attributable to the synergies and the enhanced offering of the
Ergomed group following the acquisition. None of the goodwill is
expected to be deductible for income tax purposes.
Deferred consideration represents the provisional fair valuation
of the additional consideration payable, subject to the future
performance of the business.
Ergomed plc has a 12 month measurement period from the date of
acquisition, and therefore the measurement period ends on 11 June
2017.
If the acquisition of O+P and GASD had been completed on the
first day of the financial year, group revenues for the year ended
31 December 2016 would have been GBP381,000 higher and group profit
before tax would have been GBP134,000 lower.
8. ACQUISITION OF SUBSIDIARY - PHARMINVENT
On 28 November 2016, Ergomed acquired 100 per cent of the issued
share capital of PharmInvent. PharmInvent offers a comprehensive
range of pharmacovigilance and regulatory services to over 100
clients in the global pharmaceutical industry. Pharmacovigilance
services include an outsourced global network of 95 Qualified
Persons for Pharmacovigilance (QPPVs) in 50 countries, case
management, risk management, audit, training and consulting
services on the establishment and maintenance of pharmacovigilance
systems. Regulatory services include strategic advice on regulatory
strategy, clinical trial and protocol design and medical writing of
regulatory submissions.
The amounts provisionally recognised in respect of the
identifiable assets acquired and liabilities assumed are as set out
in the table below.
Book Fair value Provisional
valuation adjustments valuation
GBP000s GBP000s GBP000s
Intangible assets - 1,291 1,291
Property, plant and equipment 161 - 161
Total non-current assets 161 1,291 1,452
Trade and other debtors 786 - 786
Cash and equivalents 252 - 252
Current assets 1,038 - 1,038
Trade and other creditors (300) - (300)
Tax payable (45) - (45)
Deferred tax liability - (245) (245)
Financial liabilities (345) (245) (590)
Total identifiable net
assets 854 1,046 1,900
Goodwill 3,270 (1,046) 2,224
Total consideration 4,124 - 4,124
Satisfied by:
Cash 3,299 - 3,299
Equity 825 - 825
Total consideration 4,124 - 4,124
Net cash inflow arising
on acquisition
Cash consideration 3,299 - 3,299
Less: cash and cash equivalent
balances acquired (252) - (252)
Transaction expenses (note
8) 118 - 118
3,165 - 3,165
The provisional fair value of the financial assets includes
receivables with a fair value of GBP786,000 and a gross contractual
value of GBP786,000. The best estimate at acquisition date of the
contractual cash flows not to be collected is GBPnil.
Goodwill is provisionally valued at GBP2,224,000 and is
attributable to the enhanced offering of the Ergomed group
following the acquisition. None of the goodwill is expected to be
deductible for income tax purposes.
In addition to the consideration identified above, deferred
consideration is payable subject to the achievement of commercial
milestones and conditional upon the continued employment of the
vendors by the company. In accordance with IFRS 3 - Business
Combinations, GBP690,000 has been charged to the profit and loss
account in respect of deferred consideration relating to the year
ended 31 December 2016.
Ergomed plc has a 12 month measurement period from the date of
acquisition, and therefore the measurement period ends on 27
November 2017.
If the acquisition of PharmInvent had been completed on the
first day of the financial year, group revenues for the year ended
31 December 2016 would have been GBP3,216,000 higher and group
profit before tax would have been GBP593,000 higher.
9. ACQUISITION COSTS
2016 2015
GBP000s GBP000s
Acquisition of Sound Opinion
Limited 7 54
Acquisition of Haemostatix (note 370 -
5)
Acquisition of O+P and GASD (note 85 -
6)
Acquisition of PharmInvent (note 118 -
7)
Other M&A activities 4 218
584 272
10. EXCEPTIONAL ITEMS
2016 2015
GBP000s GBP000s
Establishment of Taiwan office - 37
Establishment of PrimeVigilance 177 -
U.S. office
177 37
11. RELATED PARTY TRANSACTIONS
Ergomed d.o.o., a company registered in Croatia, is under the
control of Dr. Miroslav Reljanović, who is a Director and
shareholder of the Company. During the year the Company and its
subsidiaries were charged GBP240,000 (2015: GBP160,000) by Ergomed
d.o.o. and its subsidiaries in respect of clinical research costs
and other administrative services. At 31 December 2016 a balance of
GBP37,000 was owed by the Company and its subsidiaries to Ergomed
d.o.o. in respect of these costs (2015: GBP57,000). In addition,
during the year, the Group sold medical equipment to a subsidiary
of Ergomed d.o.o. for GBP33,000 (2015: GBPnil).
Chesyl Pharma Limited is a company owned by Rolf Stahel, who is
a Director of the Company. During the year, the Company was charged
consultancy fees of GBP52,000 (2015: GBP54,000) in relation to the
services of Rolf Stahel. At 31 December 2016, amounts payable to
Chesyl Pharma in relation to such consultancy services and
associated expenses were GBP12,000 (2015: GBP5,000).
All transactions with related parties take place on an arm's
length basis.
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
12. EBITDA AND EBITDA (adjusted)
2016 2015
GBP'000s GBP'000s
Operating profit 598 2,072
Adjust for:
Depreciation and amortisation charges
within Other administrative expenses 256 117
Amortisation of acquired fair valued
intangible assets 771 596
EBITDA 1,625 2,785
Share-based payment charge 398 288
Deferred consideration for acquisition 690 -
Write-back of deferred consideration
for acquisition (460) -
Acquisition costs 584 272
Exceptional items 177 37
EBITDA (adjusted) 3,014 3,382
13. ADJUSTED EARNINGS PER SHARE
2016 2015
GBP'000 GBP'000
Earnings for the purposes of basic
earnings per share being
net profit attributable to owners
of the Company 479 1,552
Effect of dilutive potential ordinary - -
shares
Earnings for the purposes of diluted
earnings per share 479 1,552
Adjust for:
Amortisation of acquired fair valued
intangible assets 771 596
Share-based payment charge 398 288
Deferred consideration for acquisition 690 -
Write-back of deferred consideration
for acquisition (460) -
Acquisition costs 584 272
Exceptional items 177 37
Adjusted earnings for the purposes
of diluted earnings per share 2,639 2,745
ADJUSTED EARNINGS PER SHARE
Basic 7.4p 9.5p
Diluted 7.1p 9.2p
14. RESTATEMENT OF PRIOR YEAR BALANCE SHEET
In July 2014, Ergomed plc acquired the entire issued share
capital of PrimeVigilance Limited for consideration comprising
GBP6,000,000 in cash, and 1,875,000 shares of GBP0.01 each, valued
at GBP1.60 per share. The excess of share value over the nominal
value of those shares was taken to the share premium account.
However, under the Companies Act 2006, these amounts should have
been posted to the merger reserve. An adjustment has been made to
the Consolidated balance sheet as at 31 December 2014 and 31
December 2015. This adjustment has no impact on the net assets of
the Group, the Consolidated income statement or the Consolidated
cash flow statement. The impact on the Consolidated balance sheet
is set out below.
2015 2015
Previously
reported Adjustment Re-stated
GBP'000s GBP'000s GBP'000s
Non-current assets
Goodwill 7,488 - 7,488
Other intangible assets 2,819 - 2,819
Property, plant and equipment 335 - 335
Investments 183 - 183
Deferred tax asset 365 - 365
11,190 - 11,190
Current assets
Trade and other receivables 9,528 - 9,528
Cash and cash equivalents 3,974 - 3,974
13,502 - 13,502
Total assets 24,692 - 24,692
Current liabilities
Borrowings (5) - (5)
Trade and other payables (5,955) - (5,955)
Deferred revenue (795) - (795)
Current tax liability (478) - (478)
Total current liabilities (7,233) - (7,233)
Net current assets 6,269 - 6,269
Non-current liabilities
Borrowings (7) - (7)
Deferred tax liability (516) - (516)
Total liabilities (7,756) - (7,756)
Net assets 16,936 - 16,936
Equity
Share capital 288 - 288
Share premium account 12,342 (2,981) 9,361
Merger reserve - 2,981 2,981
Share-based payment reserve 650 - 650
Translation reserve (537) - (537)
Retained earnings 4,193 - 4,193
Total equity 16,936 - 16,936
2014 2014
Previously
reported Adjustment Re-stated
GBP'000s GBP'000s GBP'000s
Non-current assets
Goodwill 7,282 - 7,282
Other intangible assets 2,927 - 2,927
Property, plant and equipment 185 - 185
Investments 39 - 39
Deferred tax asset 323 - 323
10,756 - 10,756
Current assets
Trade and other receivables 6,343 - 6,343
Cash and cash equivalents 4,576 - 4,576
10,919 - 10,919
Total assets 21,675 - 21,675
Current liabilities
Borrowings (7) - (7)
Trade and other payables (5,010) - (5,010)
Deferred revenue (594) - (594)
Current tax liability (144) - (144)
Total current liabilities (5,755) - (5,755)
Net current assets 5,164 - 5,164
Non-current liabilities
Borrowings (6) - (6)
Deferred tax liability (575) - (575)
Total liabilities (6,336) - (6,336)
Net assets 15,339 - 15,339
Equity
Share capital 288 - 288
Share premium account 12,342 (2,981) 9,361
Merger reserve - 2,981 2,981
Share-based payment reserve 362 - 362
Translation reserve (293) - (293)
Retained earnings 2,640 - 2,640
Total equity 15,339 - 15,339
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAPDXASDXEFF
(END) Dow Jones Newswires
March 28, 2017 02:01 ET (06:01 GMT)
Ergomed (LSE:ERGO)
Historical Stock Chart
From Apr 2024 to May 2024
Ergomed (LSE:ERGO)
Historical Stock Chart
From May 2023 to May 2024