RNS No 7341w
AORTECH INTERNATIONAL PLC
1st July 1997
ANNOUNCEMENT OF
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 MARCH 1997
AorTech International plc, the Scottish based
manufacturer of mechanical heart valves and ancillary
products announces its Preliminary Results for the year
ended 31 March 1997.
Key Points
* Turnover increased by 24% to #2,172,833 (1996:
#1,749,109)
* Financial results in line with Prospectus
illustrative projections
* Good progress reported on development projects
* Professor David Williams recently appointed as
Director and Head of Development Programme
Gordon Wright, Chairman, commented:
"Turnover is up 24% on 1996 and this is an indication of
the continuing acceptance of our core product, the
Ultracor heart valve.
"I am delighted that we achieved the targets in the
illustrative financial projections contained in our
Prospectus for the recent placing and admission to AIM.
"The financial position of the group has been
considerably strengthened by the successful flotation and
with existing products increasing market penetration and
the exciting Polymer and Medlink projects progressing
well I am confident that the group has excellent growth
prospects."
For further information contact:
Eddie McDaid, Managing Director, AorTech International plc
Tel. No. 01698 746 699
Clive Thomson / Elizabeth Kennedy, Bell Lawrie White & Co.
Tel. No. 0141 221 7733
Michael Padley / Isabel Petre, Buchanan Communications
Tel. No. 0171 489 1441
On behalf of the board of directors it gives me great
pleasure to present the first annual report and accounts
for AorTech International plc.
The company was admitted to the Alternative Investment
Market in February 1997 and everyone involved with the
business has recognised that this was a landmark event in
its development. We were all delighted at the interest
and commitment shown by the new investors. The company
raised #4,500,000 from the placing of the new shares at a
cost of #341,157 for professional and related fees.
RESULTS
You will recall that in the Prospectus prepared for the
placing and subsequent admission to AIM we included
illustrative financial projections for the year ended 31
March, 1997. I am pleased that I can now report that the
group turnover target of #2,173,000 has been achieved,
whilst our net loss incurred was approximately #30,000
less than the forecast.
Turnover for the year has increased by 24% from
#1,749,109 in 1996 to #2,172,833. This is an indication
of the continuing acceptance of our core product, the
Ultracor mechanical heart valve.
The net loss of #1,133,012 for the year includes an
exceptional charge of #750,000 relating to the
consideration for termination of the United Kingdom
distribution agreement with Caledonian Medical Limited.
The first instalment of #375,000 was paid in February
1997 with the balance being dependent on unit sales in
the United Kingdom in the subsequent twelve months, up to
a maximum of #375,000 payable. The board is confident
that selling direct in the UK will considerably enhance
the groups turnover and profitability as well as our
corporate profile.
FINANCIAL POSITION
Development expenditure of #64,134 was incurred during
the year on both the Polymer Project and the new Medlink
Project which commenced in February 1997. These projects
are discussed below.
Following the placing of new shares the bank overdraft
and directors loans were repaid and the preference
shares in issue were redeemed. The stock of Ultracor
heart valves held by Caledonian Medical Limited was
bought back in accordance with the terms of the
termination of the UK distribution agreement. The
balance of the funds not required for short term use has
been placed on deposit.
In overall terms, the financial position of the group has
been considerably strengthened following the placing of
the new shares.
OUTLOOK
Ultracor Heart Valve
I am pleased to report the continuing acceptance of our
Ultracor mechanical heart valve into an increasing number
of hospitals in various countries throughout the world.
Clinical data is continuing to be collected from centres
in the United Kingdom, Germany and Turkey. These
results should be published in appropriate medical
journals during the current financial year and I am
confident that this data will continue to support our
assertions of the superior performance of the Ultracor
valve in the areas of haemodynamics, regurgitation and
quality of life.
Annuloplasty Ring
Annuloplasty rings are used by surgeons where the
prognosis is to repair the existing damaged valve rather
than replace it with a mechanical or tissue valve. This
annuloplasty ring is complementary to the companys core
product, the Ultracor mechanical heart valve.
The data which has been collected from the clinical trial
of the annuloplasty ring is currently being collated,
with the next stage being an application for a CE Mark
for this new product. AorTech has an exclusive
worldwide licence agreement for this product and we
anticipate the CE mark to be obtained during the current
financial year which will enable its full
commercialisation.
Development Projects
The Polymer Project is being carried out in conjunction
with the Bristol Heart Institute. Its
objective is to include hydrophilic polymer on a heart
valve, with a view to preventing or
reducing the need for anticoagulant treatment for the
prevention of thrombosis. Early results
from the project are encouraging and in-vivo experiments
are currently being carried out.
The length of this project is anticipated to be
approximately a further two years before
clinical trials commence.
The Medlink Project commenced in February 1997 and is
being carried out in conjunction with the University of
Glasgow, the University of Leeds, and the University of
Liverpool with AorTechs role being that of the
commercial partner. The project has the backing of the
Department of Health and the Engineering and Physical
Sciences Research Council. A Medlink Grant of #480,000
has been awarded to the project which has an anticipated
three year development period prior to the commencement
of clinical trials. Its objective is the development of
a new generation of heart valve using durable and
flexible synthetic material combining the structure and
longevity of a mechanical valve with the low
thrombogenisity of a tissue valve. If this can be
achieved it would have considerable clinical impact.
BOARD APPOINTMENTS
AorTech is now actively involved in research projects
involving polyurethane and polymer materials and we are
absolutely delighted that Professor David Williams from
the University of Liverpool has accepted the appointment
as Director and Head of Development Programme. David is
a world renowned expert on biomaterials and will devote a
significant part of his time to the company.
We recognise the importance of good corporate governance
and we have appointed two non-executive directors who
bring professional knowledge and expertise which enhances
our Board. Francis Madden has been involved in providing
corporate finance advice to public companies for many
years and has particular experience with fast growing
technology companies. Alistair Gray founded his own
strategic management consulting business in 1992 and has
over 15 years experience advising major multi-national
organisations on competitive strategy.
AORTECH TEAM
I would like to take this opportunity to acknowledge the
achievements of the management and staff in reaching the
present milestone of being a public company on the AIM
market.
I am confident that we have the right people and an
appropriate structure in place to continue the companys
growth in the future.
FUTURE PROSPECTS
I am delighted with the progress AorTech is making with
the core business continuing to grow in line with our
expectations. The group will be seeking to expand its
product portfolio through development projects and any
other opportunities which arise.
Our objective is to continue to deliver the highest
quality products to the medical profession.
On behalf of the directors and employees I thank you for
your support and we look forward to 1998 with
considerable confidence.
J G Wright
Chairman
Consolidated profit and loss account
for the year ended 31 March 1997
1997 1996
# #
Turnover 2,172,833 1,749,109
Cost of Sales (1,251,855) (952,275)
________ ________
Gross profit 920,978 796,834
Net operating expenses (1,212,174) (1,048,293)
________ _______
Operating loss before exceptional item (291,196) (251,459)
Exceptional item (750,000) -
________ _______
Loss on ordinary activities before
interest (1,041,196) (251,459)
Interest receivable and similar income 11,914 -
Interest payable and similar charges (103,730) (110,729)
________ _______
Loss on ordinary activities before and
after taxation ( NOTE 1) (1,133,012) (362,188)
________ _______
Loss per ordinary share ( NOTE 2 ) (8.1)p (2.7)p
Consolidated Balance sheet at 31 March 1997
1997 1996
# #
Fixed assets
Intangible assets 447,722 402,819
Tangible assets 603,014 639,584
_________ ________
1,050,736 1,042,403
_________ ________
Current assets
Stocks 582,566 538,408
Debtors 713,545 419,562
Cash at bank 2,316,629 62,792
________ ________
3,612,740 1,020,762
Creditors: amounts falling due
within one year (869,785) (657,828)
________ ________
Net current assets 2,742,955 362,934
________ ________
Total assets less current
liabilities 3,793,691 1,405,337
Creditors: amounts falling due
after more than one year (624,813) (727,905)
Accruals and deferred income (50,000) -
________ ________
Net assets 3,118,878 677,432
________ ________
Capital and reserves
Called up share capital 4,300,000 3,206,884
Share premium account 2,483,843 -
Other reserve (2,003,143) (2,003,143)
Profit and loss account (1,661,822) (526,309)
________ ________
Shareholders funds 3,118,878 677,432
________ ________
Consolidated cash flow statement
for the year ended 31 March 1997
1997 1996
# #
Net Cash flow from
operating activities (863,534) 557,035
Returns on investment and
servicing of finance ( 91,816) (110,729)
Capital expenditure and
financial investment (21,116) (106,915)
________ ________
Cash (outflow)/inflow before management of
liquid resources and financing (976,466) 339,391
Management of liquid resources (2,000,000) -
Financing 3,485,521 503,777
________ ________
Increase in cash in the year 509,055 843,168
________ ________
NOTE 1
No dividends have been paid or proposed for the year.
NOTE 2
The loss per ordinary share on the net distribution basis is calculated on the
loss of the group of #1,133,012 (1996: #362,188) and on 13,935,340 (1996:
13,600,000) equity shares, being the weighted average number of shares deemed to
be in issue.
The weighted average number of shares has been calculated for 1997 and 1996
based on the following assumptions:
(1) the 7,000,000 Ordinary shares and 3,500,000
"A" Ordinary shares, being the
equity shares issued by the company following
the group reconstruction on
10 February 1997, have been treated as being
in issue for the whole of 1997
and 1996.
(2) the bonus issue of 3,100,000 Ordinary shares on
11 February 1997 has been
treated as if these shares were in issue for
the whole of 1997 and 1996, for
comparative purposes.
(3) the 3,600,000 Ordinary shares issued for cash
on 26 February 1997 have been
treated as being in issue from that date only.
No material dilution of loss per ordinary share would
arise if all share options were exercised.
NOTE 3
The financial information set out in this Announcement
has been abridged from the Annual Report for
the year ended 31 March 1996 and unaudited accounts for
the year ended 31 March 1997.
Copies of this report will be sent to shareholders on 4th
July 1997 and are available from the Companys head
office at Strathclyde Business Park, Bellshill, Scotland
ML4 3NJ.
END
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