TIDMVENN
RNS Number : 7142X
Venn Life Sciences Holdings PLC
10 May 2016
Venn Life Sciences Holdings Plc
("Venn" or the "Company"or "Group")
Final Results
for Year ended 31 December 2015
Venn Life Sciences (AIM: VENN), a growing Clinical Research
Organisation (CRO) providing drug development, clinical trial
management and resourcing solutions to pharmaceutical,
biotechnology and medical device clients, announces its audited
final results for the year ended 31 December 2015.
Financial Highlights
-- Revenue up 135% to EUR11.47m (2014: EUR4.88m)
-- EBITDA profit (before exceptional items) of EUR0.39m (2014: loss of EUR1.53m)
-- Loss for the year EUR0.20m (2014: EUR1.8m)
-- EBITDA profit attributable to CRO Business EUR0.8m (2014: loss of EUR0.96m)
-- EBITDA losses attributable to investment in Innovenn EUR0.44m (2014: loss of EUR0.57m)
-- Cash and cash equivalents as at 31 December 2015 of EUR3.8m (2014: EUR0.8m)
Operational Highlights
-- Acquisition of Kinesis Pharma BV, extending service capabilities into drug development
-- Resource base increased to 196 personnel
-- Re-location of existing Paris operations into "flagship" location
-- Piloting of new clinical trial management infrastructure
Post Period End
-- Strong rate of business wins and new proposals continues
-- EUR3.4m contract secured in January
-- Revenues of EUR4.4m booked for Q1 2016 (Q1 2015: EUR2.0m)
-- Successful cross selling of drug development and late phase services to expanded client base
-- Listing on Enterprise Securities Market
Commenting on the Group's outlook, Tony Richardson, CEO and
Chairman of Venn said:
"2015 has been a breakthrough year for Venn, delivering 135%
revenue growth and importantly, delivering its first EBITDA
profits. The acquisition of Kinesis Pharma BV in October 2015 has
broadened the service offering of the business and opened up
further opportunities for growth. With a strong start to 2016 Venn
is well positioned for further growth.
"Significant progress has been made at Innovenn during 2015. As
the business has now moved from its development phase into
commercialisation, the board intends to reposition this business
such that it has an independent footing, its own source of funding
and a value that can be clearly established. The board intends
implementing this repositioning in a manner that has a clear
quantifiable benefit for Venn shareholders, and gives greater
visibility to the strongly performing core CRO business."
Enquiries:
Venn Life Sciences Holdings Plc www.vennlifesciences.com
Tony Richardson, Chief Executive Officer Tel: +353 153 73 269
Aoife O Farrell, Marketing Manager Tel: +353 153 73 269
Davy (Nominated Adviser, ESM Adviser Tel: +353 1 679 6363
and Joint Broker)
Fergal Meegan / Matthew DeVere White
(Corporate Finance)
Paul Burke (Corporate Broking)
Hybridan LLP (Joint-Broker)
Claire Louise Noyce Tel: 020 3764 2341
Walbrook PR Ltd Tel: 020 7933 8787 or venn@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
About Venn Life Sciences Limited: Venn Life Sciences is a
Contract Research Organisation providing drug development, clinical
trial management and resourcing solutions to pharmaceutical,
biotechnology and medical device organisations. With dedicated
operations in France, Germany, the Netherlands, the UK, Ireland and
Europe wide representation - Venn Life Sciences specialises in
rapid deployment and management of multisite projects, across all
phases. Venn Life Sciences also has an innovation division -
Innovenn - focused primarily on breakthrough development
opportunities in Skin Science.
For more information about the Company, please visit:
www.vennlifesciences.com
CHAIRMAN AND CHIEF EXECUTIVE STATEMENT
FOR THE YEARED 31 DECMEBER 2015
I am pleased to report that 2015 has been another strong year
for Venn, delivering revenue growth of 135% and maiden EBITDA
profits. The year has also seen the successful extension of service
capabilities and expertise though the acquisition of Kinesis Pharma
BV ('Kinesis') and a continued step up in the size and value of
projects undertaken.
Through a combination of organic growth and acquisition the team
now comprises nearly 200 personnel, representing a solid base on
which we can now build. We have continued to improve our
infrastructure with the piloting of new clinical trial management
systems and the relocation of our Paris entities to a central
flagship location. With this stronger base, comprehensive service
offering and good geographical coverage we are now well positioned
to develop deeper areas of specialism within the business and
longer term more strategic client relationships. In 2015 we have
worked on some cutting edge Rare Disease projects, experience I
believe we can leverage in 2016 and beyond.
Innovenn has also delivered a strong year with progress on
Labskin and Clarogel. Both technologies are now through their
development phase and into commercialisation and the board intends
to reposition this business such that it has an independent
footing, its own source of funding and a value that can be clearly
established. The board is actively looking at ways to realise
shareholder value for these technologies in 2016.
Results and Commentary
Fee income for the full year was to EUR11.47m (2014: EUR4.88m)
amounting to an increase of 135% year on year. This increase in fee
income is attributable to an effective business development effort
delivering larger international projects coupled with an effective
recruitment drive to support the workload. EBITDA profit before
exceptional charges for the year was EUR0.39m (2014 loss of
EUR1.53m). The EBITDA profit attributable to our CRO business was
EUR0.8m (2014: loss of EUR0.96m) and what has been a year of
significant investment in Innovenn has resulted in an EBIDA deficit
of EUR0.44m (2014: loss of EUR0.57m) attributable to that part of
the business. The consolidated balance sheet as at 31 December 2015
had total net assets of EUR10.2m, EUR3.8m (2014: EUR0.8m) of which
was represented by cash and cash equivalents.
Post Period End
Venn has seen a solid start to 2016 demonstrated by booking
EUR4.4m of revenues in the first quarter. The Company has achieved
a strong rate of business wins with new proposals continuing to
come in. As previously stated we execute work to a consistently
high standard which brings significant rewards for the Company and
I am delighted to see this pattern continuing in 2016. As announced
in January we signed a EUR3.4m contract with a leading US based
biotechnology client and the magnitude of this new business win
demonstrates that our strategy of consolidation is effective and
that Venn is well positioned to win more substantial contracts.
The acquisition of Kinesis has enabled us to successfully
crosssell drug development and late phase services to our expanded
client base, being able to offer the complete range of services.
This in turn has allowed us to establish earlier and longer lasting
client relationships and it is extremely pleasing to see the
benefits of the October 2015 acquisition coming through so
quickly.
It's also worth noting that we successfully listed on the Irish
Stock Exchange's Enterprise Securities Market ('ESM') in January
2016 to utilise the ESMs dual listing with the London Stock
Exchange's AIM. This has enabled us to expand our investor base by
accessing both euro and sterling pools of capital and facilitate
future growth.
Plans and Outlook
We will continue to improve our knowledge base, expand our
geographical coverage and further develop emerging areas of
specialism during 2016. We continue to seek acquisition
opportunities in Central and Eastern Europe and are exploring
organic expansion into certain regions. Having developed into a
genuine full service Company with the addition of Kinesis we will
focus in 2016 on business integration and successful cross selling
of early and late phase services into the newly expanded client
base.
Anthony Richardson
Chief Executive Officer
10 May 2016
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2015
2015 2014
Notes EUR'000 EUR'000
----------------------------------- ------ --------- --------
Continuing operations
Revenue 2 11,474 4,883
Direct Project and Administrative
Costs 3 (11,934) (6,817)
Other operating income 175 167
Operating loss (285) (1,767)
--------- --------
Depreciation (103) (47)
Amortisation (361) (140)
Exceptional items 3 (209) (47)
EBITDA before exceptional items 2 388 (1,533)
--------- --------
Finance income 4 2 9
Finance costs 4 (44) (71)
----------------------------------- ------ --------- --------
Loss before income tax (327) (1,829)
Income tax credit 5 125 20
----------------------------------- ------ --------- --------
Loss for the year (202) (1,809)
----------------------------------- ------ --------- --------
Profit/(Loss) attributable
Owners of the parent 15 (1,533)
Non-controlling interest (217) (276)
----------------------------------- ------ --------- --------
Loss for the year (202) (1,809)
Currency translation differences 49 8
----------------------------------- ------ --------- --------
Total comprehensive loss for the
year (153) (1,801)
----------------------------------- ------ --------- --------
Profit/(loss) per ordinary share 6
Basic and diluted 0.04c (6.0c)
----------------------------------- ------ --------- --------
Consolidated and Company's Statement of Financial Position
As at 31 December 2015
Group Group Company Company
2015 2014 2015 2014
Notes EUR'000 EUR'000 EUR'000 EUR'000
------------------------------- ------- -------- -------- -------- --------
Assets
Non-current assets
Property, plant and equipment 381 194 - -
Intangible assets 7 5,437 2,820 - -
Investments in subsidiaries - - 7,468 4,432
Investments 31 31 31 31
Total non-current assets 5,849 3,045 7,499 4,463
------------------------------- ------- -------- -------- -------- --------
Current assets
Trade and other receivables 5,560 2,097 8,220 3,531
Income tax recoverable 23 32 - -
Cash and cash equivalents 3,798 806 554 -
------------------------------- ------- -------- -------- -------- --------
Total current assets 9,381 2,935 8,774 3,531
------------------------------- ------- -------- -------- -------- --------
Total assets 15,230 5,980 16,273 7,994
------------------------------- ------- -------- -------- -------- --------
Equity attributable to
owners
Share capital 155 112 155 112
Share premium account 14,011 5,483 14,011 5,483
Group re-organisation
reserve (541) (541) - -
Merger relief reserve - - 3,531 3,531
Reverse acquisition reserve 45 45 - -
Foreign currency reserves 49 - - -
Share option reserve 13 - 13 -
Retained earnings (3,826) (3,841) (2,351) (2,015)
------------------------------- ------- -------- -------- -------- --------
9,906 1,258 15,361 7,111
Non-controlling interest 327 544 - -
------------------------------- ------- -------- -------- -------- --------
Total equity 10,233 1,802 15,361 7,111
------------------------------- ------- -------- -------- -------- --------
Liabilities
Non-current liabilities
Borrowings 52 99 - -
Total non-current liabilities 52 99 - -
------------------------------- ------- -------- -------- -------- --------
Current liabilities
Trade and other payables 4,218 3,302 912 670
Deferred taxation 692 271 - -
Deferred consideration - 213 - 213
Borrowings 35 293 - -
Total current liabilities 4,945 4,079 912 883
------------------------------- ------- -------- -------- -------- --------
Total liabilities 4,997 4,178 912 883
------------------------------- ------- -------- -------- -------- --------
Total equity and liabilities 15,230 5,980 16,273 7,994
------------------------------- ------- -------- -------- -------- --------
Consolidated and Company's Statement of Cash Flows
For the year ended 31 December 2015
Group Group Company Company
2015 2014 2015 2014
Notes EUR'000 EUR'000 EUR'000 EUR'000
Cash Flow from operating activities
Cash used in operations 8 (2,275) (994) (4,736) (1,071)
Interest paid - (54) - (9)
Income tax received/(paid) 125 20 (31) -
------------------------------------------------------- ------ -------- -------- -------- --------
Net cash used in operating activities (2,150) (1,028) (4,767) (1,080)
------------------------------------------------------- ------ -------- -------- -------- --------
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired (1,893) (307) - (424)
Acquisition of investments - - -
Exceptional costs (209) - -
Purchase of property, plant and equipment (713) (99) (3,037) -
Proceeds from sale of property, plant and equipment - 5 - -
Interest received - 9 - -
------------------------------------------------------- ------ -------- -------- -------- --------
Net cash used in investing activities (2,815) (392) (3,037) (424)
------------------------------------------------------- ------ -------- -------- -------- --------
Cash flow from financing activities
Proceeds from issuance of ordinary shares 8,571 1,194 8,571 1,194
Payment of deferred consideration (310) (154) (213) (154)
Financing from non-controlling interests - 800 - -
Repayments on borrowings (94) (40) - -
Net cash generated by financing activities 8,167 1,800 8,358 1,040
------------------------------------------------------- ------ -------- -------- -------- --------
Net increase/ (decrease) in cash and cash equivalents 380 554 (464)
Cash and cash equivalents at beginning of year 596 216 - 464
Exchange losses on cash and cash equivalents - - - -
------------------------------------------------------- ------ -------- -------- -------- --------
Cash and cash equivalents at end of year 3,798 596 554 -
------------------------------------------------------- ------ -------- -------- -------- --------
Consolidated and Company's Statement of Changes in Shareholders'
Equity
Group
Re-organisation
& Reverse Share Foreign
Share Share acquisition Option currency Retained Non-controlling
capital premium reserve reserve reserve earnings Total interests Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
At 1 January
2014 102 3,431 (496) 0 (8) (2,308) 721 - 721
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Changes in
equity for the
year
ended 31
December 2014
Loss for the
year - - - - - (1,533) (1,533) (276) (1,809)
Currency
translation
differences - - - - 8 - 8 - 8
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Total
comprehensive
loss for
the year - - - - 8 (1,533) (1,525) (276) (1,801)
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Transactions
with the
owners
Shares issued 10 2,052 - - - - 2,062 820 2,882
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Total
contributions
by and
distributions
to owners 10 2,052 - - - - 2,062 820 2,882
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
At 31 December
2014 112 5,483 (496) 0 - (3,841) 1,258 544 1,802
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Changes in
equity for the
year
ended 31
December 2015
Profit/ (Loss)
for the year - - - - - 15 15 (217) (202)
Currency
translation
differences - - - - 49 - 49 - 49
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Total
comprehensive
profit
/(loss) for
the year - - - - 49 15 64 (217) (153)
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Transactions
with the
owners
Shares issued 43 8,528 - - - - 8,571 - 8,571
Options issued - - - 13 - - 13 - 13
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Total
contributions
by and
distributions
to owners 43 8,528 - - - - 8,584 - 8,584
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
At 31 December
2015 155 14,011 (496) 13 49 (3,826) 9,906 327 10,233
--------------- --------- --------- ---------------- -------- ---------- ---------- -------- ----------------- --------
Company
Share Share Merger relief Retained
Share capital premium Option reserve reserve earnings Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----------------- -------------------- --------- ---------------- ---------------- ---------- --------
As at 1 January
2014 102 3,431 - 3,531 (1,815) 5,249
----------------- -------------------- --------- ---------------- ---------------- ---------- --------
Changes in
equity for the
year ended 31
December
2014
Total
comprehensive
loss for the
year - - - - (200) (200)
Proceeds from
shares issued 10 2,052 - - - 2,062
At 31 December
2014 112 5,483 - 3,531 (2,105) 7,111
----------------- -------------------- --------- ---------------- ---------------- ---------- --------
Changes in
equity for the
year ended 31
December
2015
Total
comprehensive
loss for the
year - - - - (336) (336)
Issued in year 43 8,528 13 - - 8,584
At 31 December
2015 155 14,011 13 3,531 (2,351) 15,359
----------------- -------------------- --------- ---------------- ---------------- ---------- --------
Notes to the Financial Statements
1. General information
Venn Life Sciences Holdings Plc is a company incorporated in
England and Wales. The Company is a public limited company listed
on the AIM market of the London Stock Exchange. The address of the
registered office is 1 Berkeley Street, London, W1J 8DJ.
The principal activity of the Group is that of a Clinical
Research Organisation providing a suite of consulting and clinical
trial services to pharmaceutical, biotechnology and medical device
organisations. The Group has a presence in the UK, Ireland, France,
Netherlands and Germany.
The financial statements are presented in Euros, the currency of
the primary economic environment in which the Group's trading
companies operate. The Group comprises Venn Life Sciences Holdings
Plc and its subsidiary companies as set out in note 18.
The registered number of the Company is 07514939.
2. 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 that of a Clinical
Research Organisation (CRO) providing a suite of consulting and
clinical trial services to pharmaceutical, biotechnology and
medical device organisations. Prior to 2015, the CODM considered
the Groups operating segments to be the individual Countries of
operation. However, as the majority of the Group's contracts are
now larger, multi-country contracts, pulling resources from many
different locations, the CODM now considers this a single business
unit.
The Group also has an innovation division focussed on skin
technologies and continues to undertake developments in this arena.
2015 saw the re-launch and initial sales of Labskin and the CODM
consider this the second business unit.
Both business units have separate managers and report
performance to the CODM separately.
Currently the key operating performance measures used by the
CODM are Revenue and adjusted EBITDA (before exceptionals).
The segment information provided to the Board for the reportable
segments for the year ended 31 December 2015 is as follows:
2015 2015 2015 2014 2014 2014
Venn Innovenn Total Venn Innovenn Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------------------- -------- --------- -------- -------- --------- --------
Income statement
External revenue 11,468 6 11,474 4,883 - 4,883
--------------------------- -------- --------- -------- -------- --------- --------
Adjusted EBITDA 834 (446) 388 (960) (573) (1,533)
Exceptional items (209) - (209) (47) - (47)
---------------------------
EBITDA 625 (446) 179 (1,007) (573) (1,580)
Depreciation (75) (28) (103) (46) (1) (47)
Amortisation (311) (50) (361) (135) (5) (140)
--------------------------- -------- --------- -------- -------- --------- --------
Operating profit/(loss) 239 (524) (285) (1,188) (579) (1,767)
Net finance costs (39) (3) (42) (62) - (62)
Retained profit/(loss)
before tax 200 (527) (327) (1,250) (579) (1,829)
--------------------------- -------- --------- -------- -------- --------- --------
Segment assets
Intangibles, Goodwill, 4,743 693 5,436 2,601 219 2,820
PPE 223 158 381 141 53 194
Investments 31 - 31 31 - 31
Trade and other debtors 5,455 128 5,583 2,078 51 2,129
Inter segment debtors 999 - 999 418 182 600
Cash 3,768 30 3,798 492 314 806
--------------------------- -------- --------- -------- -------- --------- --------
Total assets 15,220 1,009 16,228 5,761 819 6,580
--------------------------- -------- --------- -------- -------- --------- --------
Segment liabilities
Operating liabilities (4,737) (174) (4,911) (3,756) (30) (3,786)
Inter segment liabilities - (999) (999) (182) (418) (600)
--------------------------- -------- --------- -------- -------- --------- --------
(4,737) (1,173) (5,910) (3,938) (448) (4,386)
Borrowings (87) - (87) (392) - (392)
--------------------------- -------- --------- -------- -------- --------- --------
Total liabilities (4,824) (1,173) (5,997) (4,330) (448) (4,778)
--------------------------- -------- --------- -------- -------- --------- --------
3. Exceptional items
Included within Administrative expenses are exceptional items as
shown below:
2015 2014
EUR'000 EUR'000
------------------------------------------------------- -------- --------
Exceptional items includes:
- Transaction costs relating to business combinations
and acquisitions 209 47
Total exceptional items 209 47
-------------------------------------------------------- -------- --------
4. Finance income and costs
2015 2014
EUR'000 EUR'000
--------------------------------------------------- -------- --------
Interest expense:
- Bank borrowings 27 29
- Deferred consideration unwinding of discount - 17
- Interest on other loans 17 25
--------------------------------------------------- -------- --------
Finance costs 44 71
--------------------------------------------------- -------- --------
Finance income
- Interest income on cash and short-term deposits 2 9
--------------------------------------------------- -------- --------
Finance income 2 9
--------------------------------------------------- -------- --------
Net finance costs 42 62
--------------------------------------------------- -------- --------
5. Income tax expense
2015 2014
Group EUR'000 EUR'000
--------------------------------------------------- -------- --------
Current tax:
Current tax for the year - -
Tax refund (prior year) (65) -
--------------------------------------------------- -------- --------
Total current tax (credit)/charge (65) -
--------------------------------------------------- -------- --------
Deferred tax (note 24):
Origination and reversal of temporary differences (60) (20)
--------------------------------------------------- -------- --------
Total deferred tax (60) (20)
--------------------------------------------------- -------- --------
Income tax (credit)/charge (125) (20)
--------------------------------------------------- -------- --------
The tax on the Group's results before tax differs from the
theoretical amount that would arise using the standard tax rate
applicable to the profits of the consolidated entities as
follows:
2015 2014
EUR'000 EUR'000
---------------------------------------------------------------- -------- --------
Loss before tax (262) (1,829)
---------------------------------------------------------------- -------- --------
Tax calculated at domestic tax rates applicable to UK standard
rate of tax of 20% (2013 - 20%) (52) (366)
Tax effects of:
- Expenses not deductible for tax purposes 30 35
- Losses carried forward/(utilised) (38) 311
Tax (credit)/charge (60) (20)
---------------------------------------------------------------- -------- --------
There are no tax effects on the items in the statement of
comprehensive income.
6. Loss per share
(a) Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of Ordinary Shares in issue during the year.
2015 2014
EUR'000 EUR'000
-------------------------------------- ----------- -----------
Profit/(loss) attributable to equity
holders of the Company 15 (1,533)
-------------------------------------- ----------- -----------
Weighted average number of Ordinary
Shares in issue 41,261,849 26,960,835
-------------------------------------- ----------- -----------
Basic profit/ (loss) per share 0.04c (6.0c)
-------------------------------------- ----------- -----------
(b) Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of Ordinary Shares outstanding to assume
conversion of all dilutive potential Ordinary Shares. No share
options or warrants outstanding at 31 December 2015 or 31 December
2014 were dilutive and all such potential ordinary shares are
therefore excluded from the weighted average number of ordinary
shares for the purposes of calculating diluted earnings per
share.
7. Intangible fixed assets
Group Customer Intellectual
relationships Trade secrets Goodwill Property Rights Workforce Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Cost
At 1 January 2014 24 37 980 - - 1,041
Addition 420 - 180 224 - 824
Exchange differences 1 2 10 - - 13
On acquisition of
subsidiary
undertaking (note
34) 160 670 150 - 104 1,084
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
At 31 December 2014 605 709 1,320 224 104 2,962
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Amortisation
At 1 January 2014 1 1 - - - 2
Charge for the year 94 32 - 5 9 140
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
At 31 December 2014 95 33 - 5 9 142
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Net book value
At 31 December 2014 510 676 1,320 219 95 2,820
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Cost
At 1 January 2015 605 709 1,320 224 104 2,962
Addition 525 525
Exchange differences 2 3 11 (9) 7
Adjustment (48) (48)
On acquisition of
subsidiary
undertaking (note
34) 1,032 117 1,345 2,494
At 31 December 2015 1,639 712 1,400 740 1,449 5,940
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Amortisation
At 1 January 2015 95 33 - 5 9 142
Charge for the year 164 71 - 49 77 361
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
At 31 December 2015 259 104 - 54 86 503
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
Net book value
At 31 December 2015 1,380 608 1,400 686 1,363 5,437
---------------------- --------------------- -------------- --------- --------------------- ---------- ---------
No amortisation charge has been charged on the goodwill in the
income statement (2014 - EURnil).
On 16 October 2015 the Company acquired Kinesis Pharma B.V, a
Dutch pre-clinical/early clinical research organisation for initial
consideration of EUR3,324,137, satisfied through EUR1,846,620 cash
and the issue of 4,780,320 Ordinary shares of 0.01p each (Note 34).
A fair value exercise has been conducted on the Kinesis
acquisition.
On 13 January 2014 the Group completed the acquisition of trade
and certain business assets and liabilities of a German based CRO
for EUR600,000 satisfied through issue of 1,962,583 Ordinary shares
of 0.01p each. A fair value exercise was conducted on the
acquisition of the German based CRO.
On March 2014 the Group acquired intellectual property rights in
Labskin(TM) for EUR224,000 satisfied through issue of 864,706
Ordinary shares of 0.01p each.
Goodwill is allocated to the Group's cash-generating units
(CGU's) identified according to operating segment. An operating
segment-level summary of the goodwill allocation is presented
below.
2015 2014
EUR'000 EUR'000
---------- -------- --------
CRO 1,400 1,320
Innovenn - -
---------- -------- --------
Total 1,400 1,320
---------- -------- --------
Goodwill is tested for impairment at the balance sheet date. The
recoverable amount of goodwill at 31 December 2015 was assessed on
the basis of value in use. As this exceeded carrying value no
impairment loss was recognised.
The key assumptions in the calculation to assess value in use
are the future revenues and the ability to generate future cash
flows. The most recent financial results and forecast approved by
management for the next year were used followed by an extrapolation
of expected cash flows at a constant growth rate for a further four
years. The projected results were discounted at a rate which is a
prudent evaluation of the pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to
the cash-generating units.
The key assumptions used for value in use calculations in 2015
were as follows:
%
-------------------------------------- ---
Longer-term growth rate (after 2015) 5
Discount rate 20
--------------------------------------- ---
The Group has been loss making for the last 4 years and in 2014
the Directors transformed the infrastructure and capabilities of
the Group in order to work as a Group in providing services to
clinical research and development markets as one unit rather than
separate units. This meant that the impairment review is prepared
on the group basis rather than a single unit basis. The Directors
have made significant estimates on future revenues and EBITDA
growth over the next three years based on the Group's budgeted
investment in recruiting key employees and marketing the
services.
The Directors have performed a sensitivity analysis to assess
the impact of downside risk of the key assumptions underpinning the
projected results of the Group. The projections and associated
headroom used for the group is sensitive to the EBITDA growth
assumptions that have been applied. A 50% reduction in EBITDA
growth; in the first five years of the management projections would
not result in any impairment at the group level.
The Company has no intangible assets.
8. Cash used in operations
Group Group Company Company
2015 2014 2015 2014
EUR'000 EUR'000 EUR'000 EUR'000
--------------------------------- --------- -------- -------- --------
Loss before income tax (327) (1,829) (336) (200)
Adjustments for:
- Depreciation and amortisation 464 187 - -
- Foreign currency translation
of net assets (204) (22) (164) 11
- Exceptional Item 209 47 209 -
- Net finance costs 42 62 - 26
Changes in working capital
- Trade and other receivables (3,463) (892) (4,689) (1,394)
- Trade and other payables 1,004 1,453 243 486
--------------------------------- --------- -------- -------- --------
Net cash used in operations (2,275) (994) (4,737) (1,071)
--------------------------------- --------- -------- -------- --------
Exceptional Item
2014 Group comparative has been restated to disclose exceptional
items and Foreign exchange separately
9. Business combinations
Acquisition of Kinesis Pharma B.V.
On 16 October 2015 the Company acquired 100% of Kinesis Pharma
B.V, a Dutch pre-clinical and early clinical research organisation,
and Kinesis Singapore (100% subsidiary). The final terms of the
initial consideration for the acquisition, following the adjustment
mechanism set out in the sale and purchase agreement, plus the
crystallised contingent consideration from the 2015 performance is
EUR3,083,746. The Company has performed a fair value exercise of
the remaining contingent consideration, reflecting the time value
of money and the likelihood of this consideration
crystallising.
The goodwill of EUR117,000 arising from the acquisition is
attributable to the expected future profitability of the acquired
business and synergies expected to arrive from the incorporation of
the business within the Group.
The following table summarises the consideration paid and the
amounts of the assets acquired and liabilities assumed at the
acquisition date.
EUR'000
---------------------------------------------------------------------------- --------
Fair value consideration at 16 October 2016
Cash 1,847
Share issue (4,780,320 Ordinary shares of 0.01p each) 1,477
---------------------------------------------------------------------------- --------
Initial consideration (note 17) 3,324
Adjustment to consideration and crystallised 2015 contingent consideration (240)
Total fair value consideration 3,084
---------------------------------------------------------------------------- --------
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents 1
Property, plant and equipment (note 16) 72
Investment in Subsidiary 76
Customer relations - included in intangibles (note 17) 1,032
Workforce - included in intangibles (note 17) 1,345
Trade and other receivables 2,005
Trade and other payables (896)
Borrowings (184)
Tax (484)
Total identifiable net assets 2,967
---------------------------------------------------------------------------- --------
Goodwill 117
---------------------------------------------------------------------------- --------
The revenue included in the consolidated statement of
comprehensive income since 16 October 2015 contributed by Kinesis
Pharma B.V. was EUR1.4m. Kinesis Pharma B.V. also contributed a
profit of EUR103,000 over the same period. Had Kinesis Pharma B.V.
been consolidated from 1 January 2015, the consolidated statement
of comprehensive income, would show approximately revenue of
EUR16.4m and EUR0.4m profit before tax.
10. Post balance sheet events
The following events have taken place since the year end:
(a) On 8 January 2016, Non-Executive Chairman David Evans, aged
55, resigned his position on the Board in line with his personal
commitment to reduce the number of Non-Executive Chairman roles
undertaken.
11. Annual Report & Accounts
Copies of the audited Annual Report & Accounts for the year
ended 31 December 2015 will be posted to shareholders shortly and
may also be obtained from the Company's head office at 19 Railway
Road, Dalkey, Dublin, Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UKSKRNWAVRAR
(END) Dow Jones Newswires
May 10, 2016 02:00 ET (06:00 GMT)
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