RNS Number:1584O
MICAP PLC
19 December 2006
For Release 7.00am 19 December 2006
Micap plc (MIC.L)
Interim results for the six months to 30th September 2006
Micap plc ("Micap" or the "Company") today reports its interim results for the
six months to 30th September 2006.
Micap is a provider of microencapsulation solutions to a range of customers in
fields such as flavour delivery, agrochemicals, healthcare and industrial
applications, using both its proprietary yeast cell technology and bespoke
methods developed by its scientific team.
HIGHLIGHTS
* Turnover up by 146% to #0.46 million (2005: #0.19 million).
* Reduced loss per ordinary share of 0.7p (2005: loss 2.0p); After tax loss
of #0.39 million (2005 - loss #0.59m).
* Operating loss reduced by 38 % to #0.43 million (2005: loss #0.69
million).
* Good progress made with agrochemical partners using Micap yeast
technology.
* Strong growth at Micap GmbH, provider of bespoke microencapsulation
services to a wide variety of customers.
* Upgraded production facility in Ireland running customer trials for its
spray drying services.
Post Period End
* Cost reduction programme continues, including assignment of lease on
former head office.
* Successful placing of new Ordinary shares to raise #595,000 gross.
Commenting on the results, Michael Norris, Chief Executive of Micap, said:
"Micap has made excellent progress on many commercial fronts during the period.
This, coupled with the ongoing cost reduction programme, has allowed us to post
a significantly lower loss than the corresponding period last year".
"It is our hope that the short term revenue growth from our bespoke solutions and
production operations will support the long term opportunities from our yeast
encapsulation to help us build a strong, profitable business".
"We are now generating revenues from all our operating divisions, with
significant growth expected from Micap Encapsulates in the next few months. The
extension to the Nufarm option agreement will make the achievement of a break
even position in the final quarter unlikely, but if we continue to make the
progress we are seeing throughout the Group this should be possible early in our
new financial year."
Contact:
Micap plc Tel: 01942 625590
Michael Norris, CEO Mob: 07966 341802
Adventis PR Tel: 020 7034 4758 / 020 7034 4759
Tarquin Edwards Mob: 07879 458 364
Chris Steele Mob: 07979 604 687
Chief Executive's Statement
Since year end Micap has continued to develop its business as it seeks to become
the microencapsulation solution provider of choice to industry. To this end, we
have pursued a number of opportunities to generate immediate revenue in order to
fund our long term development.
The business units within the Group allow Micap to offer a one stop shop to its
customers, from initial problem solving, through scale up to full production,
which is proving attractive to potential partners. We have established
relationships with a number of multi-national organisations with whom we hope to
collaborate on projects more fully in the new year.
As part of our ongoing drive to reduce the cost base of the Company, we have
post period end negotiated the assignment of our former Head Office premises,
which was a significant drain on our resources. I will continue to review our
overhead to ensure it is commensurate with our business model. On October 10th
we announced a placing to raise #595,000 to provide funds for the exit of the
lease and additional working capital for the business.
Micap has made significant commercial progress in recent months and I would like
to thank all my colleagues who have contributed to this.
Financial review
The loss after tax of #0.39m (2005: loss #0.59m) represents a loss per ordinary
share of 0.7p (2005: loss 2.0p). Turnover of #0.46m (2005: #0.19m) was generated
from across all divisions, however now that the Athlone plant is fully
operational this should lead to significant growth in Micap Encapsulates'
revenue.
We are keen to develop our short term revenue streams in order to bring the
Group into profit, which will allow us to continue to invest in our long term
opportunities in agrochemicals and other fields where royalties and licensing
income would be significant.
Yeast Technology
Good progress has been made with our partners in the use of Micap's patented
yeast encapsulation technology for Agrochemical applications.
In July of this year Nufarm Ltd, a major Australian crop protection company,
capitalised at cAus$1.7bn took a 6 month option to evaluate the potential of our
technology for specific crop protection functions. Since then we have worked
very closely with Nufarm on product formulation and efficiency and trials on a
variety of crops are currently underway in a number of countries across Europe.
Due to the fixed nature of the North European growing season, Nufarm have
requested a six month extension to the option period to enable them to collect
data over a full cycle, and, taking into account the progress that has been made
during our relationship with them, we have agreed to this request. As a sign of
goodwill, Nufarm have agreed to make the first milestone payment reflecting
progress to date, but the delay in concluding the full licence has made our hope
of a profitable final quarter more unlikely.
We also announced in August that we had signed an option agreement with another
leading crop protection company (the subsidiary of a major international
business with worldwide sales in 2005 in excess of $3 billion) to evaluate and
license Micap's patented yeast encapsulation technology for specific
applications in the agrochemical field. Micap has been working with this partner
on a number of projects over recent months and promising results have been seen
in the use of Micap's technology to enhance the performance of agrochemical
actives in fields in which this partner has a significant interest. Micap has
been concentrating on increasing the loading of chemical within the yeast cell
with very encouraging results and trials are currently underway on this project.
We are also pleased to be working on another project with this partner to
investigate novel microencapsulation solutions using methods other than our
yeast technology. Work on this is ongoing and results to date are encouraging.
A project is also underway with a leading consumer products group to develop a
product for a chemical application. A number of samples have been produced
including a quantity to allow the partner to carry out a large scale production
trial. We are pleased with progress to date and are hopeful of announcing
further developments shortly.
Production
Since the year end we have completed our investment in the production facility
in Athlone, Ireland, and have received quality approval from external sources.
Our initial commercial partner to take a licence on the yeast technology was
Firmenich SA, the Swiss flavour company. In September this year Firmenich gave
notice to terminate the licence, and as such we are now free to commercialise
yeast encapsulated flavours both directly and through other partners with the
key aim of producing yeast encapsulated flavours for the food ingredients
market. We currently have a large customer for our mustard product and we are
looking for further customers using both direct sources and external agents.
Initial approaches have generated strong interest in the product. The margin we
can obtain from direct sales is significantly higher than any royalty we may
achieve through a license agreement.
Additionally, we are able to provide a full spray-drying service to food
ingredient and colorant producers. We have carried out a number of funded trial
production runs during December, and have seen particular success in the
production of colorants. We are confident that we will see regular orders from
these customers in the new year.
Bespoke Solutions
Our German subsidiary, Micap GmbH, has had a very successful year. Contract
development services have increased significantly as a number of major companies
look for unique microencapsulation solutions from our technical team.
Micap GmbH operates by utilising a range of techniques and know-how to develop
protection, stability or controlled release of chemical ingredients for
industry.
Contracts won include creation of a controlled release oral product for a FTSE
100 company, a packaging reformulation for a worldwide food business and a timed
release product for use in steel production. The diversity of these customers
highlights the breadth of opportunities available to us.
We are now looking to sustain our relationships by offering scale up and
production facilities, both in house at Athlone and through sub-contractors,
allowing us to take an ongoing return from the solutions we produce. This will
be one of our key growth targets in 2007.
We are also in the final stages of appointing a second distributor for our
cosmetic Jojoba bead product, which is a moisturising and exfoliating agent that
can be used in a range of cosmetic applications. The consistency of size and
range of colours we can offer allows us to differentiate our product from many
others on the market. Following sales into the German market, we have appointed
a pan-European agent to manage the route to market on our behalf. We are hopeful
that we will be in a position to launch the relationship early in 2007.
Formulation and analysis
Our fourth business unit is Applied Analysis Ltd, which offers stability,
formulation and analytical services to a range of pharmaceutical and
nutraceutical customers. Following the takeover of our largest customer, we have
seen a drop off in orders for our services. In line with our intention of
producing a profitable Group as quickly as possible, we are looking at ways of
replacing the business through business development or corporate relationships.
Prospects
Micap has made excellent progress on many commercial fronts during the period.
This, coupled with the ongoing cost reduction programme, has allowed us to post
a significantly lower loss than the corresponding period last year.
It is our hope that the short term revenue growth from our bespoke solutions and
production operations will support the long term opportunities from our yeast
encapsulation to help us build a strong, profitable business.
We are now generating revenues from all our operating divisions, with
significant growth expected from Micap Encapsulates in the next few months. The
extension to the Nufarm option agreement will make the achievement of a break
even position in the final quarter unlikely, but if we continue to make the
progress we are seeing throughout the Group this should be possible early in our
new financial year.
Michael Norris
Chief Executive
19 December 2006
MICAP PLC
Consolidated Profit and Loss Accounts
6 months 6 months Year
to to ended
30/09/06 30/09/05 31/03/06
Notes #'000 #'000 #'000
Turnover 460 187 561
General and administrative expenses (885) (885) (2,034)
______ ______ ______
Operating loss (425) (698) (1,473)
Exceptional items - - (195)
______ ______ ______
Loss on ordinary activities before
interest (425) (698) (1,668)
Net interest (payable)/receivable (9) 4 -
______ ______ ______
Loss on ordinary activities before
taxation (434) (694) (1,668)
Tax credit for the financial period 6 45 109 148
______ ______ ______
Retained loss for the period 3 (389) (585) (1,520)
______ ______ ______
Loss per Ordinary share 2 (0.7)p (2.0)p (3.34)p
______ ______ ______
MICAP PLC
Consolidated balance sheet as at 30 September 2006
Notes 30 Sept 30 Sept 31 Mar
2006 2005 2006
#'000 #'000 #'000
Fixed assets
Intangible assets 1,008 1,572 1,028
Tangible assets 369 202 422
Investments 188 188 188
Investments in joint ventures
Share of gross assets - 120 -
Share of gross liabilities - (119) -
______ ______ ______
1,565 1,963 1,638
______ ______ ______
Current Assets
Stock 10 11 -
Debtors 278 392 565
Cash at bank and in hand - 166 41
______ ______ ______
288 569 606
______ ______ ______
Creditors: Amounts falling due
within one year (906) (577) (900)
______ ______ ______
Net current (liabilities) (618) (8) (294)
Total assets less current liabilities 947 1,955 1,344
Creditors: Amounts falling due
after more than one year (109) (210) (109)
______ ______ ______
Net assets 838 1,745 1,235
______ ______ ______
Capital and reserves
Called up share capital 3 10,604 10,334 10,604
Share premium account 6,489 5,991 6,497
Other reserve 50 400 50
Profit and loss account (16,305) (14,980) (15,916)
______ ______ ______
Shareholders' funds 838 1,745 1,235
______ ______ ______
MICAP PLC
Consolidated cash flow statements
6 months 6 months Year to
30/9/06 30/9/05 31/3/06
Notes #'000 #'000 #'000
Net cash outflow from operating
activities 4 (212) (433) (1,207)
______ ______ ______
Returns on investments and servicing
of finance
Interest received - 5 5
Interest paid (9) (1) (4)
Hire purchase interest - - (1)
______ ______ ______
Net cash (outflow)/ inflow from returns
on Investment and servicing of finance (9) 4 -
______ ______ ______
Taxation 151 230 223
______ ______ ______
Capital expenditure and financial
investment
Purchase of intangible fixed assets - - (21)
Purchase of tangible fixed assets - (18) (95)
Sale of tangible fixed assets - - 11
Purchase of investment - (1) -
Loan to joint venture - (119) -
______ ______ ______
Net cash (outflow) from capital
expenditure and financial investment - (138) (105)
______ ______ ______
Acquisitions and disposals - - (127)
______ ______ ______
______ ______ ______
Cash outflow before financing (70) (337) (1,216)
______ ______ ______
Financing
Share premium expenses (8) 14 755
Capital element of finance lease rental
payments - - (9)
______ ______ ______
Cash inflow/(outflow) from financing (8) 14 746
______ ______ ______
(Decrease) in cash in the period 5 (78) (323) (470)
______ ______ ______
MICAP PLC
Notes to the interim financial statements
1. Preparation of the financial statements
The interim results have been prepared in accordance with the accounting
policies set out in the Group's annual accounts to 31 March 2006 and are
un-audited. The interim financial statements were approved by a duly appointed
and authorised committee of the Board of Directors on 18th December 2006.
2. Loss per Ordinary share
Six Six
Months to Months to Year to
30/09/2006 30/09/2005 31/03/2006
Loss on ordinary activities after tax #(388,674) #(585,697) #(1,520,437)
Average number of shares in issue 55,825,329 28,825,229 45,496,355
Loss per ordinary share (0.70)p (2.03)p (3.34)p
The effect of dilutive share options outstanding at 30 September 2006 would be
to reduce the loss per ordinary share.
3 Movement in capital and reserves
The movement in capital and reserves during the period was as follows:-
Share Share Profit and
capital premium loss account
#'000 #'000 #'000
At 1 April 2006 10,604 6,497 (15,916)
Loss for the period - - (389)
Expenses in period - (8) -
______ ______ ______
At 30 September 2006 10,604 6,489 (16,305)
______ ______ ______
MICAP PLC
Notes to the interim financial statements (continued)
4. Reconciliation of operating loss to net cash outflow from operating
activities
6 months 6 months Year to
30/9/06 30/9/05 31/3/06
#'000 #'000 #'000
Operating loss (425) (698) (1,473)
Exceptional items - - (195)
Amortisation of goodwill 20 - 40
Depreciation charges 54 45 126
Profit on asset disposals - - (1)
(Increase)/decrease in stock (10) (1) 11
Decrease in debtors 180 334 83
(Decrease)/increase in creditors (31) (113) 202
______ ______ ______
Net cash outflow from operating activities (212) (433) (1,207)
______ ______ ______
5. Reconciliation of net cash flow to movement in net funds
(Decrease) in cash for the period (78) (323) (470)
Cash outflow from decrease in
debt and lease financing - - 9
______ ______ ______
Movement in net funds in the period (78) (323) (461)
Opening net funds 29 489 490
______ ______ ______
Closing net funds (49) 166 29
______ ______ ______
MICAP PLC
Notes to the interim financial statements (continued)
6. Taxation on loss on ordinary activities
30 Sept 30 Sept 31 March
2006 2005 2006
#'000 #'000 #'000
United Kingdom corporation tax being research and
development expenditure taxation credit 45 109 151
Adjustment in respect of prior periods - - (3)
Deferred tax - - -
_______ _______ _______
45 109 148
_______ _______ _______
7. Dividend
The Directors have not declared an interim dividend.
8. Copies of the Interim Report
Copies of the Interim report are being sent to shareholders and are also
available to the public from the Company's head office: Pemberton Business
Centre, Enterprise House, Richmond Hill, Pemberton, Wigan, WN5 8AA.
MICAP PLC
Independent review report
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2006, which comprises the consolidated profit
and loss account, the consolidated balance sheet, the consolidated cash flow
statement and the related notes. We have read the other information contained in
the interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
This report is made solely to the company, in accordance with the terms of our
engagement. Our work has been undertaken so that we might state to the company
those matters we are required to state to them in an independent review report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are also responsible for ensuring that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
Bowmans
Chartered Accountants
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFFRFRLTLIR
Micap (LSE:MIC)
Historical Stock Chart
From May 2024 to Jun 2024
Micap (LSE:MIC)
Historical Stock Chart
From Jun 2023 to Jun 2024
