NIOX
GROUP PLC
("NIOX" or
the "Company"
and, together with its subsidiaries, the "Group")
INTERIM RESULTS FOR THE SIX
MONTHS ENDED 30 JUNE 2024
Oxford, UK - 24 September 2024: NIOX Group plc (AIM: NIOX), a company engaged in the design,
development, and commercialisation of medical devices for asthma
diagnosis and management, today announces its unaudited interim
results for the six months ended 30 June 2024 ("H1
2024").
Financial highlights
·
Revenue growth of 12% (15% on a constant currency
basis) to £21.0 million (H1 2023: £18.8 million).
·
Clinical business revenue growth of 11% (14% on a
constant currency basis) to £18.5 million (H1 2023: £16.7
million).
·
Adjusted EBITDA2 of £7.1 million (H1
2023: £6.2 million), reflecting higher sales and a broadly flat
cost base.
·
Adjusted EBITDA2 margin 33.8% (H1 2023:
33.0%).
·
Adjusted basic earnings per share of 1.73p (H1
2023: 1.57p).
·
Cash generated from operations of £6.0 million (H1
2023: £5.1 million), of which £0.9 million (H1 2023: £1.1 million)
was used in discontinued operations.
·
Strong balance sheet with no debt and cash of
£21.5 million as of 30 June 2024, notwithstanding the payment of a
£4.2 million dividend in June 2024 (30 June 2023: £23.8 million, 31
December 2023: £19.9 million).
Financial progress
|
|
H1 2024
£m
|
H1
2023
£m
|
|
Revenue
|
21.0
|
18.8
|
|
Gross margin
|
72%
|
73%
|
|
Total expenditure1
|
(8.1)
|
(7.5)
|
|
Adjusted EBITDA2
|
7.1
|
6.2
|
|
Operating profit
|
4.2
|
3.0
|
|
Profit before tax from continuing operations
|
4.4
|
2.9
|
|
Profit for the financial period from discontinued
operations
|
-
|
0.5
|
|
Profit for the financial period
|
4.4
|
3.4
|
|
Cash at period end
|
21.5
|
23.8
|
1 Excludes depreciation, amortisation and share option charge.
See note 12 for reconciliation.
2 Earnings before interest, tax, depreciation, amortisation and
share option charge. See note 12 for reconciliation.
Operational highlights
· Expansion of distributor network in the USA to target areas of
untapped potential is expected to drive scalable revenue
growth.
· Continued expansion of our distributor network across
EMEA.
· A
final dividend for the financial year ended 31 December 2023 of 1.0
pence per share (equating to a return of cash of £4.2 million) was
paid on 24 June 2024.
· Development of NIOX Pro® in progress, the next generation of
clinical use device.
Post
period end
· Third
payment of $4.5 million received from Beyond Air on 23 September
2024.
· Tender
offer announced today to repurchase approximately 26.25 million
shares at 80 pence per share, returning £21.0 million to
shareholders if fully taken up.
· Proforma cash after tender offer (if fully subscribed) and
Beyond Air receipt approximately £6.0 million at 24 September
2024.
Ian Johnson, NIOX's Executive
Chairman, said: "I am pleased to report that
the Group continues to perform well with good growth in revenues
and profits in the first half of the year. Cash generation remained
strong which has enabled the Board to recommend a further return of
capital to shareholders by way of a Tender Offer, details of which
are announced today.
The Board remains confident in achieving consensus
expectations for the full year."
Contacts
|
NIOX Group
plc
Ian Johnson,
Executive Chairman
Michael Roller, Chief Financial
Officer
|
+44 (0) 3303 309 356
|
|
Singer Capital Markets
(Nominated Adviser and Joint Broker)
Jen Boorer / James Fischer / James
Todd
|
+44 (0) 20 7496 3000
|
|
Investec Bank plc (Financial
Adviser and Joint Broker)
Ben Lawrence / Lydia
Zychowska
|
+44 (0) 20 7597 4000
|
About NIOX
Our mission is to improve asthma
diagnosis and management by greater patient access to FeNO testing.
Asthma is one of the biggest healthcare issues globally with 340
million sufferers, many of whom are undiagnosed or are
misdiagnosed. The Group is engaged in the design, development, and
commercialisation of medical devices for the measurement of FeNO, a
precise biomarker for asthma. Our market leading device, NIOX
VERO®, is
increasingly recognised by healthcare professionals as an important
tool to improve the diagnosis and management of asthma. NIOX
VERO® is also the device of choice by leading clinical
research organisations for respiratory studies.
NIOX provides products and services
via its direct sales organisation and extensive distributor network
in 50 countries. For more information, please
visit www.niox.com
Forward-looking
statements
This press release contains certain projections and other
forward-looking statements with respect to the financial condition,
results of operations, businesses and prospects of NIOX. The use of
terms such as "may", "will", "should", "expect", "anticipate",
"project", "estimate", "intend", "continue", "target" or "believe"
and similar expressions (or the negatives thereof) are generally
intended to identify forward-looking statements. These statements
are based on current expectations and involve risk and uncertainty
because they relate to events and depend upon circumstances that
may or may not occur in the future. There are a number of factors
that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. Any of the assumptions underlying these forward-looking
statements could prove inaccurate or incorrect and therefore any
results contemplated in the forward-looking statements may not
actually be achieved. Nothing contained in this press release
should be construed as a profit forecast or profit estimate.
Investors or other recipients are cautioned not to place undue
reliance on any forward-looking statements contained herein. NIOX
undertakes no obligation to update or revise (publicly or
otherwise) any forward-looking statement, whether as a result of
new information, future events or other
circumstances.
OPERATING REVIEW
Introduction
The Group performed well in the
first half of 2024 with revenues up 12% (15% on a constant currency
basis) to £21.0 million (H1 2023: £18.8 million). The business made
a profit at an adjusted EBITDA level of £7.1 million (H1 2023: £6.2
million).
Business review
NIOX is the market leader in
point of care FeNO testing for the diagnosis and management of
asthma. The NIOX VERO® device is approved and reimbursed in most
major markets.
Clinical sales (to physicians
and hospitals for use in clinical practice, and to the Company's
distributors) grew by 11% (14% on a constant currency basis) to
£18.5 million (H1 2023: £16.7 million). Recurring revenues from
consumables used for routine testing provide good visibility of
earnings and are typically more than 90% of clinical
sales.
In constant currency terms, sales in
the APAC region were 25% up on the prior half year mainly as a
result of higher testing volumes in Japan and China. EMEA sales
were up 9% and US sales growth was 8%. Good progress
was made in the US in building out our distributor network to
target areas of untapped potential, and we believe that we are
continuing to implement firm foundations for our US business to
deliver improved growth rates in the future. Our experience
continues to indicate that testing volumes are highest in those
countries where awareness of FeNO is highest.
Research sales for the period
(generated from pharmaceutical companies and contract research
organisations (CROs) for use in clinical studies) were £2.5 million
(H1 2023: £2.1 million). Period comparisons are difficult given the
timing and number of clinical trials involving FeNO testing
fluctuates from year to year.
Discontinued operations
Profit from the discontinued COPD
business was £nil in the first half of the year (H1 2023: £0.5
million) as no information was received during the period which
would indicate the need for the rebate accrual to be
revised.
The Group retains an accrual of £0.4
million (31 December 2023: £0.4 million) in respect of potential
future rebate payments. Only de minimis claims for rebates have
been received since 31 December 2023.
The accrual for returns was £nil as
at 30 June 2024 (31 December 2023: £0.1 million). A small number of
claims were received in the period and the remaining trivial
balance of the accrual was released. No further return claims will
be received as the return claims period for all remaining batches
ended on 30 April 2024.
Cash used in discontinued operations
was £0.9 million (H1 2023: £1.1 million). A payment of £0.4 million
was made in respect of rebate and return claims received in 2023,
which was included in trade payables as at 31 December 2023.
Additionally, a one-off payment of £0.5 million was made in respect
of an expense of the COPD business incurred and accrued for in 2021
but not invoiced until 2024.
Beyond Air
As a result of Beyond Air, Inc.
("Beyond Air") receiving approval from the U.S. Food and Drug
Administration (FDA) for its LungFit® PH device, the Group is
entitled to receive payments of $10.5 million in total, in three
instalments as follows:
· $2.5
million within 60 days of the approval of LungFit® by the FDA
("FDA approval") - received on 24 August 2022.
· $3.5
million within 60 days of the first anniversary of FDA approval -
received on 25 August 2023.
· $4.5
million within 60 days of the second anniversary of FDA approval -
received on 23 September 2024.
In addition, the Group is entitled
to a royalty of 5% of net sales of the device, commencing on
the second anniversary of FDA approval and capped at a maximum of
$6.0 million.
Investments
The Group has continued the
development of its new NIOX Pro® device; development costs incurred
in the period are £0.2 million and have been capitalised in
accordance with the requirements of accounting
standards.
The aggregate development costs
including tooling of the NIOX Pro®, the next generation of clinical
device, should not exceed £2.0 million, with the bulk of these
costs being incurred in 2024. Initial revenues from this device are
not expected until late 2025.
Outlook
Trading during July and August has
been slightly ahead of management expectations. However, the
ongoing strength of Sterling is negatively impacting reported
revenues, albeit with a negligible effect on EBITDA as the
geographic mix of our operations ensures that, in aggregate, costs
are largely incurred in the same currencies as revenue.
As at 31 August 2024, the Company's
cash balance amounted to £23.7 million and the Company had no debt.
As a result of the Group's strong cash generation, the Board is
pleased to announce a return of cash to shareholders by way of a
tender offer which, if fully taken up, will return £21.0 million to
shareholders.
The Board remains confident in
achieving consensus expectations for the full year and in the
Group's prospects for sustained growth in 2024 and
beyond.
FINANCIAL REVIEW
The first half of 2024 has been a
period of continued growth for NIOX. The level of FeNO testing
carried out by our customers continues to grow, resulting in the
Group increasing both revenues and adjusted EBITDA.
|
|
Six months
ended
30 June
2024
|
Six months
ended
30 June
2023
|
Twelve
months
ended
31
December 2023
|
|
|
£m
|
£m
|
£m
|
|
Revenue
|
21.0
|
18.8
|
36.8
|
|
Cost of sales
|
(5.8)
|
(5.1)
|
(10.3)
|
|
Gross profit
|
15.2
|
13.7
|
26.5
|
|
Gross margin
|
72%
|
73%
|
72%
|
|
Research and development
costs
|
(1.2)
|
(1.2)
|
(2.3)
|
|
Sales and marketing costs
|
(5.7)
|
(5.6)
|
(11.2)
|
|
Administrative expenses
|
(4.1)
|
(3.9)
|
(8.4)
|
|
Adjusted EBITDA1
|
7.1
|
6.2
|
11.4
|
|
Operating profit
|
4.2
|
3.0
|
4.6
|
|
Other losses
|
(0.2)
|
(0.5)
|
(1.3)
|
|
Other income
|
-
|
0.1
|
0.2
|
|
Net finance income
|
0.4
|
0.3
|
0.6
|
|
Profit before tax
|
4.4
|
2.9
|
4.1
|
|
Taxation
|
-
|
-
|
5.4
|
|
Profit for the financial period from continuing
operations
|
4.4
|
2.9
|
9.5
|
|
Profit for the financial period from
discontinued operations2
|
-
|
0.5
|
1.2
|
|
Profit for the financial period
|
4.4
|
3.4
|
10.7
|
|
Cash
and cash equivalents
|
21.5
|
23.8
|
19.9
|
1 Earnings before interest, tax, depreciation, amortisation and
share option charge. Adjusted EBITDA reconciles to operating profit
as shown in note 12.
2 On 9 April 2020, the Group announced that that the development
and commercialisation agreement with AstraZeneca was terminating
and as such the results of the COPD business are classified as a
discontinued operation.
Revenue
NIOX® revenues for the period were
£21.0 million (H1 2023: £18.8 million) which include clinical sales of £18.5
million (H1 2023: £16.7 million) and research sales of £2.5 million (H1
2023: £2.1 million). NIOX®
clinical revenue represents sales to
physicians and hospitals for use in clinical practice and to the
Company's distributors, while research revenue is from
pharmaceutical companies and contract research
organisations (CROs) for use in clinical studies.
A significant part of the increase
in NIOX® revenue was attributable to the growth in testing volumes
in Japan and China.
Gross profit
Gross profit on NIOX® sales was
£15.2 million (H1 2023: £13.7 million), with a gross margin of 72%
(H1 2023: 73%). Gross margin was lower than the prior period due to
a higher proportion of lower margin, device heavy research sales
and a lower proportion of higher margin test kit sales.
Sales and marketing costs
Sales and marketing costs increased
to £5.7 million (H1 2023: £5.6 million). Labour costs were higher
due to increased headcount in the US.
Administrative expenses
Administrative expenses increased to
£4.1 million (H1 2023: £3.9 million) due to higher labour costs,
particularly in relation to the accrued cash bonus payable to the
Executive Directors, which was previously paid as shares and thus
did not affect adjusted EBITDA.
Earnings per share
Basic profit per share for the
period was 1.04p (H1 2023: 0.81p) and diluted profit per share for
the period was 0.97p (H1 2023: 0.76p) reflecting a profit for the
period of £4.4 million (H1 2023: £3.4 million). Basic profit per
share from continuing operations was 1.04p (H1 2023: 0.69p) and
diluted profit per share from continuing operations was 0.97p (H1
2023: 0.64p) reflecting a profit from continuing operations for the
financial period of £4.4 million (H1 2023: £2.9
million).
Excluding the impact of
depreciation, amortisation and share option charge, adjusted basic
profit per share for the period was 1.73p (H1 2023: 1.57p)
reflecting an adjusted profit for the period of £7.3 million (H1
2023: £6.6 million). See note 6.
Statement of financial position
Net assets as at 30 June 2024
decreased to £81.8 million (31 December 2023: £83.8 million)
largely as a result of a lower intangible assets value following
amortisation, partly offset by a higher cash balance.
Current liabilities as at 30 June
2024 were £5.4 million (31 December 2023: £7.2 million). The
decrease is mainly due to lower trade payables, in particular lower
accruals relating to discontinued operations, as £0.9 million was
settled in the period.
Cash flow
The Group's cash position (including
cash and cash equivalents) increased from £19.9 million as at 31
December 2023 to £21.5 million as at 30 June 2024. The Group has no
debt.
Cash generated from operations
during the period aggregated £6.0 million (H1 2023: £5.1 million),
of which £0.9 million (H1 2023: £1.1 million) was used in
discontinued operations. The increase in cash generation is due to
the increased profitability of the Group.
A dividend totalling £4.2 million
(H1 2023: £nil) was paid to shareholders in the period.
Exchange differences on cash and
cash equivalents arose as a result of translation of foreign
currency balances at the beginning and end of the relevant period.
The exchange loss for the period was £0.1 million (H1 2023: £0.4
million).
Michael Roller
Chief Financial Officer
24 September 2024
PRINCIPAL RISKS AND UNCERTAINTIES
NIOX has considered the principal
risks and uncertainties facing the Group for the first six months
of 2024 and does not consider them to have changed materially from
those set out on pages 38 to 41 of the 2023 annual report and
accounts, which is available on the Group's website. A summary of
these risks and uncertainties is as follows:
Cyber security
If the Group fails to sufficiently
detect, monitor, or respond to cyber-attacks against its systems
this may result in disruption of service, compromise of sensitive
data, financial loss and reputational damage.
Supply Chain
The Group relies on third parties
for the supply of key materials, finished products and services,
including shipping. Some materials may only be available from one
source, and regulatory requirements may make substitution costly
and time-consuming.
Commercial success
The Group's
competitors, some of whom have considerably greater financial and
human resources, may develop more effective products, launch similar products at a lower price or be able
to compete more effectively in the markets
targeted by the Group.
The Group may face issues selling
its products if there is no payer coverage or inclusion of these
products by health insurance schemes, or if large payers that
currently cover FeNO testing shift to a negative coverage
policy.
Compliance with healthcare regulations
The Group must comply with complex
regulations in relation to the marketing of its devices. These
regulations are strictly enforced. Failure by the Group (or its
commercial partners) to comply with relevant legislation and
regulations in the countries in which it operates may result in
criminal and civil proceedings against the Group.
Foreign exchange fluctuations
Foreign exchange fluctuations may
adversely affect the Group's results and financial condition. The
Group records its transactions and prepares its financial
statements in British pound sterling, but a significant proportion
of its cashflows are in United States dollars, Swedish krona, euros
and Chinese yuan.
Staff retention
Failure to attract, retain and
develop people could lead to a lack of critical skills, knowledge
and experience, which could hinder both daily operations and growth
potential.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR
THE SIX MONTHS ENDED 30 JUNE 2024
|
|
|
Six months
ended
30 June
2024
|
Six months
ended
30 June
2023
|
Twelve
months ended
31
December 2023
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
|
|
|
|
|
|
Notes
|
£m
|
£m
|
£m
|
|
Continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from contracts with
customers
|
3
|
21.0
|
18.8
|
36.8
|
|
Cost of sales
|
|
(5.8)
|
(5.1)
|
(10.3)
|
|
Gross profit
|
|
15.2
|
13.7
|
26.5
|
|
|
|
|
|
|
|
Research and development
costs
|
|
(1.2)
|
(1.2)
|
(2.3)
|
|
Sales and marketing costs
|
|
(5.7)
|
(5.6)
|
(11.2)
|
|
Administrative expenses
|
|
(4.1)
|
(3.9)
|
(8.4)
|
|
Operating profit
|
3
|
4.2
|
3.0
|
4.6
|
|
|
|
|
|
|
|
Other losses
|
|
(0.2)
|
(0.5)
|
(1.3)
|
|
Other income
|
4
|
-
|
0.1
|
0.2
|
|
Finance costs
|
|
(0.1)
|
(0.1)
|
(0.2)
|
|
Finance income
|
|
0.5
|
0.4
|
0.8
|
|
Profit before tax
|
|
4.4
|
2.9
|
4.1
|
|
|
|
|
|
|
|
Taxation
|
|
-
|
-
|
5.4
|
|
Profit from continuing
operations
|
|
4.4
|
2.9
|
9.5
|
|
|
|
|
|
|
|
Profit from discontinued operations
(attributable to equity holders of NIOX Group plc)
|
5
|
-
|
0.5
|
1.2
|
|
Profit for the
period
|
|
4.4
|
3.4
|
10.7
|
|
|
|
|
|
|
|
Other comprehensive income / (expense)
|
|
|
|
|
|
Items that may be
subsequently reclassified to profit or loss
|
|
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
1.7
|
5.4
|
(0.2)
|
|
Other comprehensive income / (expense) for the period, net of
tax
|
|
1.7
|
5.4
|
(0.2)
|
|
Total comprehensive income for the period
|
|
6.1
|
8.8
|
10.5
|
|
|
|
|
|
|
|
Earnings per share attributable to owners of the parent during
the period (expressed in pence per share)
|
|
|
|
Six months
ended
30 June
2024
|
Six months
ended
30 June
2023
|
Twelve
months ended
31
December 2023
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
Basic earnings per share
|
|
Pence
|
Pence
|
Pence
|
|
Basic earnings per share for profit
from continuing operations
|
6
|
1.04
|
0.69
|
2.26
|
|
Basic earnings per share for profit
for the period
|
6
|
1.04
|
0.81
|
2.55
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
Pence
|
Pence
|
Pence
|
|
Diluted earnings per share for profit from continuing
operations
|
6
|
0.97
|
0.64
|
2.11
|
|
Diluted earnings per share for profit for the period
|
6
|
0.97
|
0.76
|
2.38
|
|
|
|
|
|
|
The notes below are an integral part
of these condensed interim consolidated financial
statements.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS
AT 30 JUNE 2024
|
|
|
30 June
2024
|
30
June
2023
|
31
December
2023
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Notes
|
£m
|
£m
|
£m
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
0.3
|
0.3
|
0.3
|
|
Right-of-use assets
|
|
0.8
|
1.3
|
1.1
|
|
Goodwill
|
|
4.4
|
4.3
|
4.6
|
|
Intangible assets
|
|
25.3
|
27.7
|
28.2
|
|
Trade and other
receivables
|
7
|
-
|
3.4
|
-
|
|
Deferred tax assets
|
8
|
22.6
|
23.9
|
23.8
|
|
|
|
53.4
|
60.9
|
58.0
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
4.1
|
3.6
|
4.8
|
|
Trade and other
receivables
|
7
|
8.5
|
7.5
|
8.8
|
|
Cash and cash equivalents
|
|
21.5
|
23.8
|
19.9
|
|
|
|
34.1
|
34.9
|
33.5
|
|
Total assets
|
|
87.5
|
95.8
|
91.5
|
|
Equity and liabilities
|
|
|
|
|
|
Share capital
|
|
0.3
|
0.3
|
0.3
|
|
Share premium
|
|
0.1
|
-
|
0.1
|
|
Other reserves
|
|
16.0
|
12.2
|
18.2
|
|
Retained earnings
|
|
65.4
|
68.4
|
65.2
|
|
Total equity
|
|
81.8
|
80.9
|
83.8
|
|
Liabilities
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Lease liabilities
|
|
0.3
|
0.8
|
0.5
|
|
Deferred tax liabilities
|
8
|
-
|
7.0
|
-
|
|
|
|
0.3
|
7.8
|
0.5
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
9
|
4.8
|
6.5
|
6.6
|
|
Lease liabilities
|
|
0.6
|
0.6
|
0.6
|
|
|
|
5.4
|
7.1
|
7.2
|
|
Total liabilities
|
|
5.7
|
14.9
|
7.7
|
|
Total equity and liabilities
|
|
87.5
|
95.8
|
91.5
|
The notes below are an integral part
of these condensed interim consolidated financial
statements.
Ian
Johnson
Michael Roller
Executive Chairman
Chief Financial Officer
NIOX Group
plc
NIOX Group plc
Registered number:
05822706
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR
THE SIX MONTHS ENDED 30 JUNE 2024
|
|
|
Six months
ended
30 June
2024
|
Six months
ended
30 June
2023
|
Twelve
months ended
31
December 2023
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Notes
|
£m
|
£m
|
£m
|
|
Cash flows from operating activities
|
|
|
|
|
|
Cash generated from
operations
|
10
|
6.0
|
5.1
|
11.7
|
|
Interest paid
|
|
(0.1)
|
(0.1)
|
(0.1)
|
|
Net cash generated from operating
activities
|
|
5.9
|
5.0
|
11.6
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Payments for property, plant and
equipment
|
|
(0.1)
|
(0.1)
|
(0.1)
|
|
Payments for intangible
assets
|
|
(0.2)
|
-
|
(0.2)
|
|
Net cash used in investing
activities
|
|
(0.3)
|
(0.1)
|
(0.3)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Interest received
|
|
0.4
|
0.2
|
0.6
|
|
Principal element of lease
payments
|
|
(0.2)
|
(0.3)
|
(0.7)
|
|
Dividends paid
|
|
(4.2)
|
-
|
(10.5)
|
|
Proceeds received from exercise of
share options
|
|
0.1
|
-
|
0.1
|
|
Net cash used in financing
activities
|
|
(3.9)
|
(0.1)
|
(10.5)
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
1.7
|
4.8
|
0.8
|
|
Cash and cash equivalents at 1
January
|
|
19.9
|
19.4
|
19.4
|
|
Effects of exchange rate changes on
cash and cash equivalents
|
|
(0.1)
|
(0.4)
|
(0.3)
|
|
Cash and cash equivalents at end of period
|
|
21.5
|
23.8
|
19.9
|
The notes below are an integral part
of these condensed interim consolidated financial
statements.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
1. General information
NIOX Group plc is a public company
limited by shares which is listed on the Alternative Investment
Market (AIM) and incorporated and domiciled in the United Kingdom.
The Company is resident in England and the
registered office is Hayakawa
Building, Edmund Halley Road, Oxford Science Park, Oxford, OX4
4GB.
The condensed consolidated interim
financial statements were approved for issue on 24 September
2024.
The condensed consolidated interim
financial statements have not been audited or reviewed. The
condensed consolidated interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for NIOX Group plc for the
year ended 31 December 2023 were approved by the Board of Directors
on 26 March 2024 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under section 498 of the Companies Act 2006.
Basis of preparation
This condensed consolidated interim
financial report for the period ended 30 June 2024 has been
prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting, except
for:
· A
statement of changes in equity has not been presented;
and
· The
deferred tax asset has not been revalued.
The interim report does not include
all the notes of the type normally included in an annual financial
report. Accordingly, this report is to be read in conjunction with
the annual report and accounts for the year ended 31 December 2023
and any public announcements made by NIOX Group plc during the
interim reporting period.
Going concern
In assessing the appropriateness of
the going concern assumption, the Board has considered the
availability of funding alongside the possible cash requirements of
the Group and Company. After due consideration, the directors have
concluded that there is a reasonable expectation that the Group has
adequate resources to continue in operational existence for at
least 12 months from the date of this report.
Accounting
policies
The accounting policies adopted are
consistent with those of the previous financial year and
corresponding interim reporting period.
Use
of estimates and assumptions
The preparation of interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these condensed interim
financial statements, the significant judgements made by management
in applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
annual financial statements for the year ended 31 December
2023.
Financial instruments
The Group's financial instruments
comprise cash and cash equivalents, receivables and payables
arising directly from operations, and derivatives. The directors
consider that the fair values of the Group's financial instruments
do not differ significantly from their carrying values.
2. Financial and capital risk
management
The condensed interim financial
statements do not include all financial and capital risk management
information and disclosures required in the annual financial
statements; they should be read in conjunction with the Group's
annual report and accounts for the year ended 31 December
2023.
The majority of operating costs are
denominated in British pound sterling, United States dollar,
Swedish krona, euro and Chinese yuan. Foreign exchange risk arises
from future commercial transactions and recognised assets and
liabilities. The directors expect foreign exchange volatility to
continue to affect the Group's results and the resulting impact
will be assessed in the annual report.
3. Operating segments
The chief operating decision-maker,
the Executive Chairman, examines the Group's performance from a
product perspective, and has identified one reportable segment in
the continuing business:
- NIOX®
relates to the portfolio of products used to improve asthma
diagnosis and management by measuring fractional exhaled nitric
oxide (FeNO).
The COPD business has been
classified as a discontinued operation. Information about this
discontinued segment is provided in note 5.
The table below presents operating
loss information regarding the Group's operating segments for the
periods ended 30 June 2024 and 2023, and the year ended 31 December
2023. Only the results for the Group's continuing activities are
included to aid comparison.
|
|
NIOX®
|
Head office
|
Total
|
|
|
£m
|
£m
|
£m
|
|
Six
months ended 30 June 2024
|
|
|
|
|
Revenue
|
21.0
|
-
|
21.0
|
|
Operating profit / (loss) from
continuing operations
|
6.1
|
(1.9)
|
4.2
|
|
Six
months ended 30 June 2023
|
|
|
|
|
Revenue
|
18.8
|
-
|
18.8
|
|
Operating profit / (loss) from
continuing operations
|
4.9
|
(1.9)
|
3.0
|
|
Twelve months ended 31 December 2023
|
|
|
|
|
Revenue
|
36.8
|
-
|
36.8
|
|
Operating profit / (loss) from
continuing operations
|
9.1
|
(4.5)
|
4.6
|
There were no sales between the
segments in either reporting period.
4. Other income
|
|
|
|
|
|
|
|
|
Six months ended 30 June
2024
£m
|
Six months
ended 30 June 2023
£m
|
Twelve
months ended 31 December 2023
£m
|
|
Sub-lease rental income
|
|
-
|
0.1
|
0.2
|
|
Total other income
|
|
-
|
0.1
|
0.2
|
The Chicago sub-lease ended on 29
February 2024. The Group's lease of the Chicago property ended on
the same date.
5. Discontinued operations
On 9 April 2020, an agreement was
signed to hand back the Tudorza® and Duaklir® licences to
AstraZeneca and as such, the results of the COPD operating segment
are reported as a discontinued operation. There were no assets or
liabilities classified as held for sale in relation to the
discontinued operation.
Financial information relating to
the discontinued operation is set out below:
|
Profit for the period
|
|
|
|
|
|
|
|
Six months ended 30 June
2024
£m
|
Six months
ended 30 June 2023
£m
|
Twelve
months ended 31 December 2023
£m
|
|
Revenue
|
|
-
|
0.5
|
1.2
|
|
Profit from discontinued operations
|
|
-
|
0.5
|
1.2
|
|
|
|
|
|
|
|
Cashflow
Net cash outflow from operating
activities
|
|
(0.9)
|
(1.1)
|
(2.0)
|
|
Net
cash used in discontinued operations
|
|
(0.9)
|
(1.1)
|
(2.0)
|
|
|
|
|
|
| |
Revenue recognised in the periods
ending 30 June 2023 and 31 December 2023 relates to a revision of
the rebate accrual based on information and claims received during
the period and forward-looking assumptions as to the value of
claims expected to be received in future financial
period.
The cash outflow relates to the
settlement of certain contractual liabilities relating principally
to rebates and returns, which were accrued for at the time the
business was discontinued.
Remaining accruals related to the
discontinued operation totalled £0.4 million at the end of the
period (31 December 2023: £1.3 million including amounts in trade
payables).
6. Earnings per share
|
Basic earnings per share
|
Six months ended 30 June
2024
Pence
|
Six months
ended 30 June 2023
Pence
|
Twelve
months ended 31 December 2023
Pence
|
|
From continuing
operations
|
1.04
|
0.69
|
2.26
|
|
From discontinued
operations
|
-
|
0.12
|
0.29
|
|
Total basic earnings per share attributable to the ordinary
equity holders of the Company
|
1.04
|
0.81
|
2.55
|
|
Diluted earnings per share
|
Pence
|
Pence
|
Pence
|
|
From continuing
operations
|
0.97
|
0.64
|
2.11
|
|
From discontinued
operations
|
-
|
0.12
|
0.27
|
|
Total diluted earnings per share attributable to the ordinary
equity holders of the Company
|
0.97
|
0.76
|
2.38
|
|
Reconciliation of earnings used in calculating earnings per
share
|
£m
|
£m
|
£m
|
|
Basic and diluted earnings per share
|
|
|
|
|
Profit attributable to the ordinary
equity holders of the Company used in calculating basic and
dilutive earnings per share:
|
|
|
|
|
From continuing operations
|
4.4
|
2.9
|
9.5
|
|
From discontinued operations
|
-
|
0.5
|
1.2
|
|
Profit used as the basis of calculating basic and diluted
earnings per share
|
4.4
|
3.4
|
10.7
|
The earnings used in calculating
basic and diluted earnings per share is the same.
Adjusted basic earnings per share
eliminates depreciation, amortisation and share option charge. The
prior year interim financial statements only excluded the impact of
amortisation. The comparatives have been restated.
|
Adjusted basic earnings per share
|
Six months ended 30 June
2024
Pence
|
Six months
ended 30 June 2023
Pence
|
Twelve
months ended 31 December 2023
Pence
|
|
From continuing
operations
|
1.73
|
1.45
|
3.87
|
|
From discontinued
operations
|
-
|
0.12
|
0.29
|
|
Total adjusted basic earnings per share attributable to the
ordinary equity holders of the Company
|
1.73
|
1.57
|
4.16
|
|
Reconciliation of earnings used in calculating adjusted
earnings per share
|
£m
|
£m
|
£m
|
|
Basic and diluted earnings per share
|
|
|
|
|
Profit attributable to the ordinary
equity holders of the Company used in calculating basic and
dilutive earnings per share:
|
|
|
|
|
From continuing operations
|
4.4
|
2.9
|
9.5
|
|
From discontinued
operations
|
-
|
0.5
|
1.2
|
|
Add back:
|
|
|
|
|
Depreciation
|
0.2
|
0.3
|
0.7
|
|
Amortisation
|
1.9
|
1.9
|
3.7
|
|
Share option charge
|
0.8
|
1.0
|
2.4
|
|
Adjusted profit used as the basis of calculating adjusted
basic earnings per share
|
7.3
|
6.6
|
17.5
|
|
Weighted average number of shares
|
No.
|
No.
|
No.
|
|
Weighted average number of ordinary
shares used as the denominator in calculating basic earnings per
share
|
422,921,155
|
419,577,589
|
420,205,077
|
|
Adjustments for calculation of
diluted earnings per share:
|
|
|
|
|
Share options
|
30,225,299
|
29,153,971
|
28,443,873
|
|
Deferred shares
|
745,116
|
631,968
|
629,308
|
|
Weighted average number of ordinary
shares and potential ordinary shares used as the denominator in
calculating diluted earnings per share
|
453,891,570
|
449,363,528
|
449,278,258
|
7. Trade and other receivables
|
|
30 June
2024
£m
|
30 June
2023
£m
|
31
December 2023
£m
|
|
Receivable within one year
|
|
|
|
|
Trade receivables
|
4.6
|
4.3
|
4.1
|
|
Prepayments and accrued
income
|
0.4
|
0.5
|
0.6
|
|
Other receivables
|
3.5
|
2.7
|
4.1
|
|
Total current trade and other receivables
|
8.5
|
7.5
|
8.8
|
|
|
|
|
|
|
Receivable after one year
|
|
|
|
|
Other receivables
|
-
|
3.4
|
-
|
|
Total non-current trade and other
receivables
|
-
|
3.4
|
-
|
Other receivables relate to the
consideration due from Beyond Air. Included in current other
receivables is £3.5 million (H1 2023: £2.7 million) and included in
non-current other receivables is £nil (H1 2023: £3.4 million). The
final payment was received from Beyond Air on 23 September
2024.
8. Deferred taxation
|
|
Intangibles
|
Tax losses
|
Net deferred tax
asset
|
|
|
£m
|
£m
|
£m
|
|
At 30 June 2023
|
(7.0)
|
23.9
|
16.9
|
|
At 31 December 2023
|
(6.3)
|
30.1
|
23.8
|
|
At
30 June 2024
|
(6.3)
|
28.9
|
22.6
|
|
|
30 June
2024
£m
|
30 June
2023
£m
|
31
December 2023
£m
|
|
Deferred tax liabilities
|
-
|
(7.0)
|
-
|
|
Deferred tax assets
|
22.6
|
23.9
|
23.8
|
|
Total deferred tax asset
|
22.6
|
16.9
|
23.8
|
The Group does not review the
assumptions relating to the net deferred tax asset at the half year
end. The movement in the deferred tax asset in the period is due to
foreign exchange fluctuations as the asset is denominated in
Swedish krona.
On consolidation, a deferred tax
asset in respect of deductible temporary differences relating to
tax losses is recognised to the extent of the relevant deferred tax
liability relating to intangible assets. These balances relate to
the same taxation authority and have therefore been
offset.
The Group has the following
unrecognised potential deferred tax assets as at:
|
|
30 June
2024
£m
|
30 June
2023
£m
|
31
December 2023
£m
|
|
Losses
|
90.9
|
76.0
|
90.9
|
|
Total unrecognised deferred tax asset
|
90.9
|
76.0
|
90.9
|
9. Trade and other payables
|
|
30 June
2024
£m
|
30 June
2023
£m
|
31
December 2023
£m
|
|
Trade payables
|
0.9
|
2.3
|
1.1
|
|
Social security and other
taxes
|
0.2
|
0.3
|
0.8
|
|
Accruals
|
3.2
|
3.6
|
4.3
|
|
Other payables
|
0.5
|
0.3
|
0.4
|
|
Total trade and other payables
|
4.8
|
6.5
|
6.6
|
10. Cash generated from operations
Reconciliation of profit before tax to net cash generated from
operations
|
|
Six months ended 30 June
2024
£m
|
Six months
ended 30 June 2023
£m
|
Twelve
months ended 31 December 2023
£m
|
|
|
|
|
|
|
Profit from continuing operations
before tax
|
4.4
|
2.9
|
4.1
|
|
Profit from discontinued operations
before tax
|
-
|
0.5
|
1.2
|
|
Profit before tax
|
4.4
|
3.4
|
5.3
|
|
|
|
|
|
|
Adjustment for:
|
|
|
|
|
Finance income
|
(0.5)
|
(0.4)
|
(0.8)
|
|
Finance costs
|
0.1
|
0.1
|
0.2
|
|
Depreciation charge of right-of-use
assets
|
0.2
|
0.3
|
0.7
|
|
Amortisation charge of intangible
assets
|
1.9
|
1.9
|
3.7
|
|
Share based payment
charge
|
0.8
|
1.0
|
2.4
|
|
Foreign exchange on non-operating
cash flows
|
(0.3)
|
-
|
0.8
|
|
Changes in working
capital:
|
|
|
|
|
(Increase)/ decrease
in trade and other receivables
|
(0.1)
|
(0.2)
|
2.7
|
|
Decrease/ (increase) in
inventories
|
0.5
|
0.2
|
(0.8)
|
|
Decrease in
trade and other payables
|
(1.0)
|
(1.2)
|
(2.5)
|
|
Cash generated from operations
|
6.0
|
5.1
|
11.7
|
11. Related party transactions
There have been no new IAS 24
related-party transactions in the first six months of the current
financial year.
12. Reconciliation of alternative performance
measures
Total expenditure
Total expenditure excludes
depreciation, amortisation and share option charge.
Total expenditure is an alternative
performance measure, and reconciles to the consolidated statement
of comprehensive income as below:
|
|
Six months ended 30 June
2024
£m
|
Six months
ended 30 June 2023
£m
|
Twelve
months ended 31 December 2023
£m
|
|
Research and development
costs
|
(1.2)
|
(1.2)
|
(2.3)
|
|
Sales and marketing costs
|
(5.7)
|
(5.6)
|
(11.2)
|
|
Administrative expenses
|
(4.1)
|
(3.9)
|
(8.4)
|
|
Add back:
|
|
|
|
|
Depreciation
|
0.2
|
0.3
|
0.7
|
|
Amortisation
|
1.9
|
1.9
|
3.7
|
|
Share option charge
|
0.8
|
1.0
|
2.4
|
|
Total expenditure
|
(8.1)
|
(7.5)
|
(15.1)
|
Adjusted EBITDA
Adjusted EBITDA excludes items of
income and expenditure which might have an impact on the quality of
earnings, such as the share option charge.
Adjusted EBITDA is an alternative
performance measure, and reconciles to operating profit as
below:
|
|
Six months ended 30 June
2024
£m
|
Six months
ended 30 June 2023
£m
|
Twelve
months ended 31 December 2023
£m
|
|
|
|
|
|
|
Adjusted EBITDA
|
7.1
|
6.2
|
11.4
|
|
Depreciation
|
(0.2)
|
(0.3)
|
(0.7)
|
|
Amortisation
|
(1.9)
|
(1.9)
|
(3.7)
|
|
Share option charge
|
(0.8)
|
(1.0)
|
(2.4)
|
|
Operating profit
|
4.2
|
3.0
|
4.6
|
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that these
condensed interim financial statements have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', except for the areas describe in the basis of
preparation section in note 1, and that the interim management
report includes a fair review of the information required,
namely:
- an
indication of important events that have occurred during the first
six months and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
- material related-party transactions in the first six months
and any material changes in the related-party transactions
described in the last annual report.
The directors are responsible for
the maintenance and integrity of the Group's website
www.investors.niox.com.
The directors of NIOX Group plc are
listed on pages 38 to 41 of the 2023 annual report and
accounts.
Legislation in the UK governing the
preparation and dissemination of interim financial statements may
differ from legislation in other jurisdictions.
On
behalf of the Board
Ian Johnson
Michael Roller
Executive Chairman
Chief Financial Officer
24 September 2024