RNS Number:7080M
Maelor PLC
25 May 2005
25 May 2005
Maelor PLC - Preliminary Results
Maelor plc, the specialist healthcare products company, announces preliminary
results for the year ended 31 March 2005.
Financial highlights
* Turnover up 22% to #1.64 million (2004: #1.34 million)
* Loss down 41% to #0.66 million (2004: #1.12 million)
* Loss per share of 1.95p (2004: 3.28p)
* Cash balance of #1.47 million (2004: #1.91 million)
* Cash generative in H2
Operational highlights
* OptiFloTM annual sales increase 24% and reach 46% UK market share
* Volplex(R) sales increase 30%
* ContiSolTM approved in Canada
* AAM appointed distributor of ContiSolTM in Canada and US
* Bard launch OptiFloTM in Ireland
Commenting on the results Chairman, Alastair Macpherson, said:
"These results, with strong revenue growth and sharply reduced losses, show that
Maelor is on track for profitability. With our two lead products continuing to
take market share and our products entering new territories, we expect to
continue to build on the substantial growth which we have achieved over the past
three years."
For further information contact:
Maelor plc
Stephen Appelbee, CEO 07785 367420
Financial Dynamics
Ben Atwell/John Gilbert 020 7831 3113
Chairman's Statement
"...our cash resources have increased, thus underlining the future viability of
our business."
The past financial year has seen another twelve months of steady progress for
your Company, with a 22% increase in turnover and a substantial reduction in
losses. A year ago we stated that we believed that we had sufficient funds to
see the Company through to profitability. Since the Interim Statement in
November 2004 our cash resources have increased, thus underlining the future
viability of our business, and indicating progress towards profitability.
Financial Summary
Maelor's turnover of #1,639,294 (2004: #1,340,005) represents an increase of 22%
over last year. This increase comes from across-the-board improvements in sales
of our existing range of products.
The Group's post-tax loss for the year was reduced by 41% to #663,760 (2004:
#1,118,016) following recognition of a research and development tax credit and a
deferred tax asset. This arose despite a major investment in improving the
manufacturing process for Volplex(R), our blood plasma volume replacement
product, which should result in its greater profitability in the longer term.
Group cash balances at 31 March 2005 were #1,467,692 (2004: #1,913,748) but,
importantly, showed a significant rise from our Interim Statement figure of
#1,329,977. This demonstrates that, during the second half of the financial
year, Maelor achieved positive cash generation.
Business Summary
One of the most significant achievements of the past year was securing marketing
approval for ContiSolTM, our range of urethral catheter cleansing products, in
Canada. Maelor's management team persuaded Health Canada to reverse their
earlier opinion and approve ContiSolTM as a medical device, rather than a
pharmaceutical product, thus greatly shortening the long and expensive
regulatory process associated with drug authorisations. If this success can be
duplicated in the United States, the world's biggest market for medical devices
will open up for ContiSolTM. To this end, we have recently appointed American
Australian Medical, Inc, as our partner for Canada and the United States, and we
will be working with them on the necessary submissions that need to be made to
the US Food and Drug Administration.
OptiFloTM, the brand name of our urethral catheter cleansing products sold by
Bard Limited, has again made good progress, and its share of the UK community
prescriptions market stands at a new high of 46% compared with 42% in 2004.
During the course of the year Bard also launched OptiFloTM in the Republic of
Ireland, and we will be looking to repeat our UK success in this new territory.
Significant improvements in the manufacturing process will increase Maelor's
gross profits from Volplex(R) in the future. Sales in the UK are highly
price-sensitive and dominated by NHS contracts. We have recently appointed a
Marketing Manager who is working closely with our distribution partner,
Cambridge Laboratories, to bring us greater success in the NHS tender process,
where to date we have secured a 30% share of tenders awarded.
We have put further development work with micelle propofol on hold as we
continue to search for a partner for this product. We are now targeting those
areas where the advantages of micelle propofol are most obvious, in particular
in veterinary medicine.
Now that our three major products are all manufactured in the Euro-zone, it is
an important objective to extend the geographical spread of our sales, and
therefore reduce our exposure to exchange rate losses. Your management team is
working hard towards making this happen.
Board Changes
The past year has seen some changes in your Board of Directors. Ann Hardy, who
has served Maelor in several senior roles since joining us in 2000, was
appointed Operations Director in July 2004. Before joining Maelor, Ann had held
operational management positions at Glaxo and Medeva. We were pleased to make
this internal appointment, and continue to encourage management development at
Maelor.
More recently, the Board welcomed Geoff McMillan as a Non-Executive Director in
May 2005. Geoff is currently the Chief Executive Officer of BioFocus plc, and
has led the transition of that company into an integrated and profitable
provider of drug discovery products, services and programmes. He has previously
held Board positions at Roche, Xenova and Elan, and significantly strengthens
your Board at a very important stage in the Company's development.
In December 2004 we announced that Paul Williams, Finance Director and Company
Secretary, had left the Company to pursue his other business interests. We wish
him every success with his future career, and I would like to place on record
our thanks to Paul for the substantial contribution he made to the growth of
Maelor's business over the seven years he spent with the Company since the time
of its flotation. Our Chief Financial Officer, Marie Greenwood, ACA, who joined
the Company in November 2004, is now carrying out his duties.
Outlook
Maelor has almost completed its transformation into a focused, profitable
company, ready to make the step up to the next level in the competitive medical
device and pharmaceuticals sectors. In order for the Company to mature, we must
attract new and innovative products to build on the substantial growth that we
have achieved over the past three years, during which time we have almost
trebled sales. We remain committed to further revenue growth.
Your Board sees as a major priority the need to enhance value for all our
shareholders, many of whom have remained loyal to the Company despite the fall
in our share price. Our strategy of developing the geographical spread of our
business, fully exploiting the potential of micelle propofol and acquiring new
products and businesses gives us the strength to approach Maelor's 2005/6
financial year with confidence, as we continue our drive to bring the Company to
profitability.
Alastair Macpherson
Chairman
Chief Executive's Review
"Maelor's prospects are for sustained profitability."
Operationally, the past year has been one of continuing our strategy,
established three years ago, of concentrating on commercialisation and
minimising costs. As a result, we are moving closer to profitability. A major
technical achievement for the year was validating the change in manufacturing
process for Volplex(R), which not only makes the product more profitable, but
also enabled us to overcome a technical issue that was preventing us from
launching the product in Argentina. We can now move forward there, and in other
markets, with a more robust and competitive product.
The approval of ContiSolTM in Canada showed that Maelor can form a compelling
case for the product to be considered a medical device, and we have carefully
selected a distributor in North America, which should help us to capitalise on
this achievement in the United States.
Approved Products
OptiFloTM
Our range of catheter cleansing products sold by Bard Limited in the UK and the
Republic of Ireland is distributed under their trademark, OptiFloTM. The launch
of OptiFloTM in the Republic of Ireland towards the end of the financial year
was a significant step for Bard, and we would expect sales in that market to
start to contribute in 2005/6.
Meanwhile, OptiFlo'sTM share of the UK community prescriptions market (our
customary measure of success) has now reached a new high of 46% (source: IMS;
2004: 42%). This represents a 23% increase in sales value over the period,
which shows that there is considerable growth in market value in this
therapeutic area, which is currently worth over #5 million per annum.
The switch to a quarterly manufacturing schedule has been successfully achieved,
thereby reducing the seasonal variation in Maelor's sales to Bard.
Volplex(R)
This year's key achievement with Volplex(R), our blood plasma volume replacement
product, has been to implement significant manufacturing improvements, which
have resulted in the product being more profitable for Maelor. This major task,
which has involved complex project management including development and
regulatory issues, has been achieved without threat to continuity of supply.
Volplex(R) was quick to establish itself in the UK market, but its success means
that it is now coming under increasing price pressure from competitors. This
makes expansion into other markets a top priority but, as with all
pharmaceutical products, the timing of approvals is in the hands of the various
regulatory authorities around the world.
We have overcome the technical regulatory problem which was preventing the
launch of Volplex(R) in Argentina, and expect the product to be available from
the summer of 2005. We continue to supply our distributor in Bangladesh with
further information whilst they lobby on our behalf in that populous, and
potentially significant, market. In Australia, China, South Africa and South
Korea the regulatory process is under way, and we are having discussions with
potential partners in the United States and mainland Europe.
ContiSolTM
Our own brand of urethral catheter cleansing solutions, ContiSolTM, was approved
as a medical device in Canada in May 2004. This followed successful lobbying by
Maelor to reverse Health Canada's earlier opinion that ContiSolTM was a
pharmaceutical product, and has given us encouragement to adopt similar tactics
in the United States. To help us in this objective, we have appointed American
Australian Medical, Inc, as our North American distributor, as they have the
local resources both to launch in Canada, and to assist us in our negotiations
with the Food and Drug Administration in the US.
It has taken time for ContiSolTM to establish itself in Cyprus, Greece and
Spain, where it was launched last year. Our distributors are aware that local
healthcare professionals need to be educated to maintain catheters in situ,
rather than replace them, which is the current general practice, and they are
confident that they are winning over an increasing proportion of customers. In
Spain, there is a reimbursement hurdle to be overcome, which we hope will be
achieved in the summer of 2005.
TendaGel
This innovative anaesthetic lubricant product, which was preferred to
competitive products in clinical trials, has become the victim of the
increasingly competitive market for gel products. We reported in our Interim
Statement that TendaGel is unlikely to become a major contributor to Maelor's
turnover in the near future, and that continues to be our belief.
Development Products
Micelle propofol
Our aqueous formulation of the world's best-selling general anaesthetic
continues to be of interest to several international pharmaceutical companies,
but we have not yet been able to secure a development deal that is satisfactory
to us. We still believe that micelle propofol is superior to other potential
entrants into this market, and has the greater potential to provide a full range
of indications worldwide when an appropriate partner can be found. To conclude
a deal which accurately reflects the true value of micelle propofol remains our
highest priority project.
Micelle propofol's benefits are particularly apparent when considering its
potential in veterinary medicine, and we are discussing this market with
potential partners in the United States and Europe.
Micelle Technology
Further to our announcement last year of the acquisition of intellectual
property regarding inhaled anaesthetics, we are currently developing a strategy
to commercialise a lead candidate.
The collaborative study agreement signed last year with a US-based
pharmaceutical company led to Maelor successfully solubilising their new
chemical entity. Having considered the study report, however, our partner
company decided not to progress with this project and has paid Maelor a fee.
Prospects
Today, almost all of our sales are still generated in the UK, but within two
years we would expect over 20% of our turnover to come from overseas, subject to
local approvals coming from the regulatory authorities.
We will continue to seek complementary products and businesses to supplement the
Company's current growth. To this end, we have contracted UTEK-pax Limited to
source innovative products and technology, which would add value to Maelor's
product portfolio.
Concluding a mutually satisfactory deal with a development partner for micelle
propofol could lift this Company to the next level, which is why it is our
highest priority project. In addition, we need to reinvigorate our product
pipeline by acquiring new and innovative products or businesses.
Maelor's cash reserves have increased in the past six months, demonstrating that
we are heading towards trading profitably on an annual basis. Over the past
three years, your management team has almost trebled sales, and Maelor's
prospects are for sustained profitability by maximising the return from our
existing products. With revenues up 22% in the full year, losses reducing and
our cash position increasing, we are progressing towards profitability.
Stephen Appelbee
Chief Executive Officer
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2005
Year ended Year ended
31 March 2005 31 March 2004
# # # #
Turnover 1,639,294 1,340,005
Cost of sales (1,035,302) (805,080)
______ ______
Gross profit 603,992 534,925
Research and development (344,339) (680,349)
Administration (1,122,332) (1,123,665)
______ ______
(1,466,671) (1,804,014)
______ ______
Operating loss (862,679) (1,269,089)
Interest receivable and similar income 65,366 75,404
Interest payable (16,931) (6,733)
______ ______
Loss on ordinary activities before taxation (814,244) (1,200,418)
Taxation recoverable 150,484 82,402
______ ______
Retained loss attributable to the Group (663,760) (1,118,016)
______ ______
Basic loss per ordinary share (1.95)p (3.28)p
Diluted loss per ordinary share (1.95)p (3.28)p
______ ______
All operations are continuing.
There are no recognised gains or losses for the period other than the results
for the year, as set out above.
NOTE OF HISTORICAL COST PROFITS AND LOSSES
2005 2004
# #
Reported loss on ordinary activities before taxation (814,244) (1,200,418)
Difference between an historical cost depreciation charge and the actual
depreciation charge for theyear calculated on the revalued amount 1,020 1,020
______ ______
Historical cost loss on ordinary activities before taxation (813,224) (1,199,398)
______ ______
Historical cost loss for the year sustained after taxation (662,740) (1,116,996)
______ ______
CONSOLIDATED BALANCE SHEET
At 31 March 2005
31 March 2005 31 March 2004
# # # #
Fixed assets
Tangible assets 384,593 321,955
Current assets
Stocks 132,138 173,575
Debtors: due within one year 660,782 1,202,613
due after more than one year 80,000 -
______ ______
Cash at bank and in hand 1,467,692 1,913,748
______ ______
2,340,612 3,289,936
Creditors: amounts falling due within one year (517,847) (807,353)
______ ______
Net current assets 1,822,765 2,482,583
______ ______
Total assets less current liabilities 2,207,3588 2,804,538
Creditors: amounts falling due after more than one (193,128) (214,798)
year ______ ______
Net assets 2,014,230 2,589,740
______ ______
Capital and reserves
Called up share capital 3,410,458 3,410,458
Share premium account 12,154,094 12,154,094
Revaluation reserve 153,689 66,459
Profit and loss account (13,704,011) (13,041,271)
______ ______
Shareholders' funds - equity 2,014,230 2,589,740
______ ______
These financial statements were approved by the Board of Directors on 24 May
2005 and were signed on its behalf by:
A Hardy S C Appelbee
Director Director
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2005
31 March 2005 31 March 2004
Note # #
Cash flow from operating activities 25 (854,757) (1,659,890)
Returns on investments and servicing of finance 26 48,435 68,671
Taxation received 26 379,378 -
Capital expenditure 26 (1,787) (11,781)
______ ______
Cash outflow before management of liquid resources and financing (428,731) (1,603,000)
Financing 26 (17,325) 222,092
______ ______
Decrease in cash in the year (446,056) (1,380,908)
______ ______
Reconciliation of net cash flow to movement in net funds
FOR THE YEAR ENDED 31 MARCH 2005
Year ended Year ended
31 March 2005 31 March 2004
Note # #
Decrease in cash in the year 27 (446,056) (1,380,908)
Cash outflow/(inflow) from decrease in debt and lease financing 27 17,325 (222,092)
______ ______ ______
Changes in funds resulting from cash flows 27 (428,731) (1,603,000)
______ ______ ______
Movement in net funds in the year (428,731) (1,603,000)
Net funds at the start of the year 27 1,684,452 3,287,452
______ ______ ______
Net funds at the end of the year 27 1,255,721 1,684,452
______ ______ ______
Notes to the preliminary results for the year ended 31 March 2005
1. The financial information set out in this report, which was approved by the
directors on 24TH May 2005, does not constitute the Company's statutory
accounts for the year ended 31 March 2005 or 31 March 2004 but is derived
from those accounts. Statutory accounts for 2004 have been delivered to the
Registrar of Companies and those for 2005 will be delivered following the
Company's Annual General Meeting. The auditors have still to report on the
2005 accounts but have indicated that they will be issuing an unqualified
report in all respects. The 2004 audit report was unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.
2. The preliminary results have been prepared on the basis of the accounting
policies as set out in the financial statements for the year ended 31 March
2004. Key elements of the Company's principal accounting polices are noted
below.
Basis of preparation and consolidation
The financial statements of the Group consolidate the financial statements
of the Company and its subsidiary undertakings whose financial statements
were also made up to 31 March 2005.
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules,
modified to include the revaluation of freehold property.
3. Loss per ordinary share
The calculation for basic loss per ordinary share uses the numerators and
denominators noted below:
2005 2004
# #
Loss attributable to the Group (663,760) (1,118,016)
______ ______
Weighted average number of shares in issue during the year - basic 34,104,583 34,104,583
______ ______
Basic and diluted losses per share are the same as there is no dilution at
(1.95p) (2004: (3.28p))
4. The directors do not propose the payment of a dividend.
5. The Report and Accounts of the Company for the year ended 31 March 2005
will be sent to shareholders shortly. The Annual General Meeting will be
held in Wrexham on Wednesday 27 July 2005.
END
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The company news service from the London Stock Exchange
END
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