TIDMYGEN
RNS Number : 9954E
Yourgene Health PLC
10 July 2019
Yourgene Health plc
("Yourgene" or the "Company" or the "Group")
Results for the Year Ended 31 March 2019,
Business Update and Director Change
Manchester, UK - 10 July 2019: Yourgene Health plc (AIM: YGEN),
the international molecular diagnostics group which commercialises
genetic products and services, announces its results for the year
ended 31 March 2019, and provides a business update.
Full year results summary:
-- Comprehensive profit of GBP3.4m (2018: GBP9.6m loss), the
first since 2014 IPO, due substantially to benefits of debt
restructuring gains but also to improved trading
-- Revenues grew 45% to GBP8.9m (2018: GBP6.1m)
-- Gross profit also grew 45% to GBP4.6m (2018: GBP3.2m)
-- Administrative expenses before separately disclosed items
were held level at GBP9.0m, despite a GBP0.3m increase in net
development expenditure
-- Adjusted EBITDA loss reduced by 29% to GBP3.1m (2018: GBP4.4m)
-- Operating loss reduced by 44% to GBP4.8m (2018: GBP8.6m)
-- Cash used in operations reduced to GBP4.0m (2018: GBP9.6m)
-- Net cash (cash less borrowings) at year-end of GBP1.0m (2018:
GBP11.9m net debt), prior to post period-end fundraise and
associated acquisition of Elucigene Diagnostics ("Elucigene")
Business update:
-- After the period-end, in April 2019, the Company completed an
equity fundraise, raising gross proceeds of GBP11.8m and the
acquisition of Elucigene for an enterprise value of GBP8.8m
represented by GBP6.3m cash and GBP2.9m equity
-- Elucigene recently filed its calendar 2018 accounts with
revenues of GBP3.6m and EBITDA of GBP1.0m (FRS102 basis)
-- Integration of the UK operations of Yourgene Health and
Elucigene is proceeding well and annualised synergy cost savings of
over GBP0.5m have been identified, many of which have already been
implemented
-- The two commercial teams are now operating as a combined
function and seeking opportunities for cross-selling, co-presenting
at marketing events, and have since delivered the Group's first
GBP1m+ revenue months
-- Penetration of existing markets is increasing, for example in India and France
-- New markets focus includes Japan, where early momentum is
building, and the United States, where a diverse pipeline is
expected to generate its first revenues in the current financial
year
-- Development is progressing well for the new IONA(R) test
compatible with the Illumina next generation sequencing platform
and the test remains on schedule for launch in early 2020
-- The Group's first oncology product is in a soft launch phase
with a number of UK and European clinical partners
Corporate update:
-- After a review of the Board's composition, it has been agreed
that Keng Hsu will step down from the Board from today to improve
the balance of Non-executive and Executive directors, and to allow
greater focus on his business development work in Asia
-- It is anticipated that additional Non-executive directors
will be appointed in due course to continue this rebalancing and
bring relevant skills to the Group
-- The Group's Annual Report and Accounts for the financial year
ended 31 March 2019 will be available on www.yourgene-health.com
later today.
-- The Group's Annual General Meeting will be held in September
2019. Further details will be notified to shareholders in due
course. For shareholders who have opted to receive printed copies
of the Annual Report and Accounts, these will be posted in the next
few weeks ahead of the AGM formal notice.
Lyn Rees, CEO of Yourgene, commented: "These results demonstrate
the strong underlying growth of the business after the
transformative realignment of our partnership with Thermo Fisher
and formation of a new one with Illumina. We now have a strong
balance sheet following the equity fundraise and Elucigene
acquisition, the integration of which is progressing ahead of my
expectations. We are now well positioned and very much focused on
growth. I look forward to launching a new version of the IONA(R)
test, our first oncology product and converting our exciting
pipeline of new business opportunities into profitable growth."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For more information, please contact:
Yourgene Health plc Tel: +44 (0)161
Lyn Rees, Chief Executive Officer 667 6865
Barry Hextall, Chief Financial Officer
Joanne Cross, Head of Marketing
investors@yourgene-health.com
Cairn Financial Advisers LLP (Nomad) Tel: +44 (0)20 7213
Liam Murray / James Caithie / Ludovico Lazzaretti 0880
Stifel Nicolaus Europe Limited (Sole Broker) Tel: +44 (0)20 7710
Nicholas Moore / Matthew Blawat / Ben Maddison 7600
Vigo Communications (PR) Tel: +44 (0)20 7390
Ben Simons / Fiona Henson / Antonia Pollock 0238
yourgene@vigocomms.com
About Yourgene Health
Yourgene Health is an international molecular diagnostics group
which develops and commercialises genetic products and services.
The group works in partnership with global leaders in DNA
technology to advance diagnostic science.
Yourgene develops and commercialises simple and accurate
molecular diagnostic solutions, primarily for reproductive health.
The Group's products include non-invasive prenatal tests (NIPT) for
Down's Syndrome and other genetic disorders, Cystic Fibrosis
screening tests, invasive rapid aneuploidy tests, male infertility
tests and genetic disease tests. Yourgene's commercial footprint is
already established in the UK, Europe, the Middle East, Africa and
Asia.
Our product development, research service and commercial
capabilities extend across the lifecycle of genetic test
development including regulatory submissions. Through our technical
expertise and partnerships, Yourgene Health is also extending its
genetic testing offering into oncology.
Yourgene Health is headquartered in Manchester, UK with offices
in Taipei and Singapore, and is listed on the London Stock
Exchange's AIM market under the ticker "YGEN". For more
information, visit www.yourgene-health.com and follow us on twitter
@Yourgene_Health.
RESULTS FOR YEARED 31 MARCH 2019
Chairman's Statement
I am delighted to report that the 2018/19 financial year has
been a defining one for your Company, led by the new Chief
Executive Officer, Lyn Rees. We have taken the business through a
period of transformational change and created a strong foundation
for future growth.
Our business has always had exceptional potential but has had to
deal with a number of unforeseen historic issues. During the course
of the financial year all of these legacy issues were dealt with
and we now have a clear path to substantial growth.
During the period, the key milestones have been the appointment
of Lyn Rees as Chief Executive Officer, the settlement of all
litigation issues and entering into a new partnership with
Illumina, the appointment of Hayden Jeffreys as Group Commercial
Director and then Chief Operating Officer, and the corporate and
commercial restructuring with Life Technologies (a division of
Thermo Fisher) which resulted in the Company being substantially
debt free and gaining a significant blue chip shareholder and an
ongoing and strengthened commercial relationship.
The momentum has continued post the period end with the
acquisition of Elucigene Diagnostics and the associated GBP11.8m
oversubscribed equity fundraising in April 2019.
I would like to take this opportunity to thank all of our
employees and my Board colleagues who have worked with extreme
dedication and determination to get us into the best position your
Company has ever been in. I would also like to thank the
shareholders who supported us through the difficult periods and who
continue to support us; we do not underestimate the effort required
to execute the strategy and deliver the Company's potential value.
It is also a pleasure to warmly welcome our new Elucigene
colleagues who join us on this exciting journey.
Board changes
During the year, we announced a number of Board changes designed
to prepare the Group for its next phase of development. We continue
to look at the Board composition to ensure it remains fit for
purpose. Having strengthened the Executive Management during the
year I am now looking to add Non-executive Directors to further
strengthen the Board during the new financial year. To avoid the
Board becoming too large, and to allow him to focus on the many
exciting business development opportunities in Asia, Keng Hsu has
agreed to step down from the Board with effect from today. I thank
him for his contribution both on and off the Board and I look
forward to continuing to work with him in his senior management
capacity.
Outlook
With our growing global presence, de-risked business and the
newly acquired Elucigene operations, Yourgene is now well placed to
realise its potential. We still face the usual business dynamics of
competition, regulation and rapid technological change but the
progress made over the last financial year and in recent months has
been astounding and we now have a global genetics business that I
am convinced will continue to grow very rapidly in the coming
years.
Adam Reynolds
Chairman
Chief Executive's Review
I am very pleased to be reporting on a year of significant
growth and development for Yourgene in my first year as Chief
Executive Officer after my appointment in July 2018. The year has
focused on creating a stable base for the future and having
achieved this I am now focused on the execution of our strategic
growth plans. Setting this base has been realised through a number
of significant and transformational achievements in settling the
long-running Illumina litigation and the high levels of debt owed
to Life Technologies. We now have strategic partnerships with both
of these prestigious blue-chip organisations who dominate the next
generation sequencing market.
Strategy
In late 2018, we launched a strategic planning process which has
delivered an ambitious plan to create a significant molecular
genetics business and deliver material increases in shareholder
value in the next 3-5 years. We aim to achieve this through a
combination of greater penetration of our existing markets with our
current products, geographic expansion, bringing new products to
market, scalable business processes, a dynamic performance-oriented
culture and inorganic growth through acquisition and/or licensing.
This business plan is being embedded and cascaded throughout the
Group to ensure that execution of the strategy and our customers
are at the forefront of everything we do.
Elucigene
The Elucigene acquisition, completed in April 2019, creates a
very exciting combined business with sales now into over 60
countries and an expanded commercial team. We are already realising
synergies and the two teams are working very well together and
quickly becoming a single unit, predominantly based on a single
site. This combined operation will be a powerful engine for the
future growth of the Group.
Geographic expansion
We have continued to build out the strong commercial pipeline
expanding our geographic reach in the regions in which we operate
whilst also ensuring we increase penetration in existing
territories such as India, where we continue to make encouraging
commercial progress, and have in a short time built strong
commercial pipelines in these regions. We have also commenced
market entry planning for the USA, Japan and China. These are
sizeable opportunities in complex markets with significant
regulatory barriers and we are developing plans that are
deliverable and prioritised. As the Group grows we are announcing
fewer deals to the stockmarket as the threshold for meeting
commerciality becomes proportionally higher, but I am delighted to
report that we continue to win new customers in all major regions
supporting the +45% revenue growth that we have reported in the
last 12 months.
People
We have brought into the business some exceptional talent to
complement incumbent skillsets. Our people have a strong mix of
experience and can-do attitudes, working all over the world for our
customers and our stakeholders. As we grow our business and market
reach I look forward to recruiting additional new talent into the
organisation to support our ambitious growth plans.
Product development
Part of the Illumina partnership is to develop a version of the
IONA(R) test to operate on Illumina's market-leading
next-generation sequencing (NGS) instrument platform. This work has
been the principal focus of our development activities in the year
and we are very excited about the quality of the product that is
emerging for launch in 2020.
I am also pleased with the launch of our Gateway process for
evaluating future product opportunities and I look forward to
updating investors as those plans proceed through the development
pathway. Our focus for new products is primarily in the
reproductive health and oncological clinical areas though we have
some additional more longer-term target areas too. The Elucigene
acquisition also brings some exciting new products into our
pipeline including a US version of Cystic Fibrosis screening and a
chemo-toxicity diagnostic assay for our first oncology product
which we hope to launch soon.
Application support
Our training and application support services are critical to
customer laboratories and the feedback has been extremely positive
as we endeavour to routinely outperform our competitors.
Delivering great customer service will be vitally important in
retaining and growing customers as the NIPT market matures and we
believe we have market-leading capabilities in this regard.
Clinical service laboratory
The clinical service laboratory in Manchester and its Taipei
equivalent have continued to deliver outstanding service
performance to an increasing number of hospitals and medical
professionals around the world. The laboratory back-up service has
been invaluable to customers in the process of installing
laboratories, experiencing workflow challenges, spikes in demand
and cover for religious or national holiday periods.
Financial performance
It is very heartening to report the Group's first profitable
year. Even though this is due primarily to the debt restructuring
with Life Technologies, the underlying business has also made
significant progress towards profitability through sales and gross
profit growth, coupled with control of expenditure. Achieving
sustainable profitability and generating free cashflows under our
own steam remains a very current focus for myself and the
business.
Lyn Rees
Chief Executive Officer
Financial Review
Income statement
In the trading year revenues grew 45% to GBP8.9m (2018:
GBP6.1m).
Gross profit also grew 45% to GBP4.6m (2018: GBP3.2m) at a
consistent gross margin of 52% (2018: 52%). General administrative
expenses were kept under control at GBP9.0m (2018: GBP9.0m) despite
research and development expenditure excluding people costs and net
of tax credits being GBP0.3m higher at GBP0.2m (2018: net credit of
GBP0.1m). This reflects our ongoing commitment to developing high
quality products and specifically the development of the new
version of the IONA(R) test for the Illumina NGS platform. Total
administrative expenses were GBP9.4m (2018: GBP11.8m) after
separately disclosed items as explained below.
Adjusted EBITDA loss was reduced by 29% to GBP3.1m (2018:
GBP4.4m loss). Adjusted EBITDA is measured as the operating loss
before depreciation, amortisation, separately disclosed items and
operating lease commitments which will be affected by the
implementation of IFRS16 in the 2020 accounts and beyond (see note
2 in the Group's Annual Report and Accounts).
Separately disclosed items
Significant items within administrative expenses are shown
separately in the Consolidated Statement of Comprehensive Income,
with further details in note 5 of the Annual Report and Accounts
published today. Litigation expense was minimal in the year (2018:
GBP2.7m) due to utilisation of prior year provisions and the
September 2018 settlement with Illumina. Other separately disclosed
items are non-cash accounting charges for share-based payments and
warrant expenses of GBP0.3m (2018: GBP0.1m), plus GBP0.2m
forward-looking potential impairment losses on trade and other
receivables arising from the implementation of IFRS9 (not applied
in 2018).
Operating loss
There is a resultant much-reduced operating loss after total
administrative expenses of GBP4.8m (2018: GBP8.6m loss) due to
rising revenues and gross profits, whilst maintaining
administrative expenses at consistent levels year on year.
Finance income/(expenses)
During the period, the Group secured net finance income of
GBP8.2m (2018: net expense GBP0.9m), principally due to the
restructured relationship with Life Technologies which involved a
significant debt write-off (see notes).
Taxation and foreign exchange
The net finance income led to a profit on ordinary activities
before and after taxation of GBP3.4m (2018: loss of GBP9.5m).
Historic tax losses not previously recognised were utilised to
offset the resulting taxable profit for the reporting period. Due
to the one-off nature of this taxable profit, the deferred tax
associated with other historic losses will remain unrecognised
until the Group can be more certain of recoverability through
future profitability.
The Group made a small gain of less than GBP0.1m (2018: charge
of GBP0.1m) on translation of its foreign subsidiaries and foreign
currency balances to the presentational currency.
Total comprehensive profit
The Group recorded its first total comprehensive profit of
GBP3.4m (2018: loss of GBP9.6m) due to the benefits of the debt
restructure gains, although improved trading also contributed
significantly.
Earnings per share
The total comprehensive profit of GBP3.4m (2018: loss of
GBP9.6m) represents a gain per share of 1 pence (2018: 3 pence loss
per share).
Statement of financial position
At the balance sheet date, the Group had total assets of
GBP15.6m (2018: GBP14.6m). Property, plant and equipment increased
to GBP2.1m (2018: GBP1.9m) with capital expenditure more than
offsetting the depreciation of test workflow equipment supplied to
customers in the first trading year of the Company to encourage
adoption of the IONA(R) test. Current assets increased to GBP5.3m
(2018: GBP4.3m) due to growth-associated working capital.
Total equity and liabilities increased to GBP15.6m (2018:
GBP14.6m) with a significant switch away from loans to equity as a
result of the debt restructuring agreed with Life Technologies in
February 2019 (see notes).
Cash flow
The Group had an opening cash position of GBP0.3m (2018:
GBP1.3m) and a net cash increase of GBP1.0m (2018: GBP1.0m
outflow). Cash and cash equivalents at the end of the period were
GBP1.3m (2018: GBP0.3m). During the period the Group used GBP4.0m
(2018: GBP9.6m) of cash in operating activities. Cash used in
investing activities was GBP0.6m (2018: GBP0.6m) due to
classification of an unused escrow facility as a short-term
financial asset. Underlying investment in property, plant and
equipment was GBP1.1m (2018: GBP0.2m). Financing activities
generated a surplus of GBP5.6m (2018: GBP9.2m) with equity
fundraisings in May and October 2018, plus a warrant conversion
whose proceeds were used to reduce Life Technologies loan funding,
as described in the notes.
As with all businesses at this early stage of development, the
Board assesses carefully the Group's ability to operate as a going
concern and has detailed plans for revenue growth, margin
improvement and cash flow control which are intended to achieve
positive cash flows in the near future. More detail on these plans
can be found in the notes to the accounts.
Dividends
No dividend is recommended (2018: GBPnil) due to the early stage
nature of the Group.
Capital management
The Board's objective is to maintain a balance sheet that is
both efficient at delivering long-term shareholder value and also
safeguards the Group's financial position in light of variable
economic cycles and the principal risks and uncertainties outlined
in this report. As at 31 March 2019, the Group had net cash of
GBP1.0m (2018: GBP11.9m net debt). Business growth and the
increased scale achieved through the post-period Elucigene
acquisition are expected to enable the Group to operate as a going
concern for the foreseeable future.
Post-balance sheet events
In April 2019 the Group completed a gross GBP11.8m equity
fundraise, partly to acquire Elucigene Diagnostics and also to
increase the Group's working capital. See notes for further
details.
Barry Hextall
Chief Financial Officer
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2019
2019 2018
-------------------------- ---------------------------
GBP GBP GBP GBP
---------------------------------------------------------- ------------ ------------ ------------ -------------
Revenue 8,882,362 6,146,863
Cost of sales (4,271,941) (2,973,730)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Gross profit 4,610,421 3,173,133
Other operating income 25,821 28,350
Administrative expenses
General administrative expenses (9,049,646) (8,956,324)
Revaluation of foreign currency denominated loan - -
Litigation expenses 37,864 (2,692,556)
Share-based payments and warrant expenses (251,004) (144,247)
Costs associated with the acquisition of subsidiary - (10,084)
Impairment (losses)/gains on financial assets (155,962) -
---------------------------------------------------------- ------------ ------------ ------------ -------------
Total administrative expenses (9,418,748) (11,803,211)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Operating loss (4,782,506) (8,601,728)
Financing income 9,381,761 45,264
Financing expenses (1,209,554) (981,979)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Profit / (loss) on ordinary activities before taxation 3,389,701 (9,538,443)
Tax credit / (charge) on loss on ordinary activities (491) 55,516
----------------------------------------------------------- ------------ ------------ ------------ -------------
Profit / (loss) for the year 3,389,210 (9,482,927)
Other comprehensive expense
Exchange translation differences 31,563 (121,096)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Profit / (loss) and total comprehensive profit (loss) for
the Year 3,420,773 (9,604,023)
----------------------------------------------------------- ------------ ------------ ------------ -------------
Earnings per share GBP
Basic: Profit / (Loss) GBP0.01 (GBP0.03)
Diluted: Profit / (Loss) GBP0.01 (GBP0.03)
Consolidated Statement of Financial Position
As at 31 March 2019
2019 2018
GBP GBP
----------------------------------------------- ------------- -------------
Assets
Non-current assets
Goodwill 7,014,447 7,014,447
Intangible assets 1,228,928 1,384,160
Property, plant and equipment 2,054,163 1,919,406
Total non-current assets 10,297,538 10,318,013
------------------------------------------------ ------------- -------------
Current assets
Inventories 739,126 276,766
Other short-term assets - 475,385
Trade and other receivables 2,832,695 2,075,301
Tax asset 478,232 1,158,765
Cash and cash equivalents 1,250,362 282,432
------------------------------------------------ ------------- -------------
Total current assets 5,300,415 4,268,649
------------------------------------------------ ------------- -------------
Total assets 15,597,953 14,586,662
------------------------------------------------ ------------- -------------
Equity and liabilities attributable to equity
holders
Equity
Called up share capital 32,403,969 32,266,188
Share premium account 37,971,265 28,482,061
Merger relief reserve 10,012,644 10,012,644
Reverse acquisition reserve (39,947,033) (39,947,033)
Foreign exchange translation reserve (147,897) (179,460)
Warrants reserve 3,069,382 4,085,546
Retained losses (32,662,380) (37,318,758)
Total equity 10,699,950 (2,598,812)
------------------------------------------------ ------------- -------------
Current liabilities
Trade and other payables 4,172,464 3,792,112
Current tax liabilities - 9,487
Borrowings 76,388 59,344
Provisions 780,000
Total current liabilities 4,248,852 4,640,943
------------------------------------------------ ------------- -------------
Non-current liabilities
Borrowings 209,302 12,098,883
Deferred tax liability 233,496 262,990
Long-term provisions 206,353 182,658
Total non-current liabilities 649,151 12,544,531
------------------------------------------------ ------------- -------------
Total equity and liabilities 15,597,953 14,586,662
------------------------------------------------ ------------- -------------
The financial statements were approved and signed by the
Directors and authorised for issue on 9 July 2019.
Adam Reynolds
Chairman
Company Registration No. 03971582
Consolidated Statement of Changes in Equity
For the year ended 31 March 2019
Share Share Merger Warrants Reverse Foreign Retained Total
capital premium relief reserve acquisition exchange losses
account reserve reserve reserve
GBP GBP GBP GBP GBP GBP GBP GBP
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Balance at
1 April 2017 32,266,188 28,482,061 10,012,644 3,069,382 (39,947,033) (58,364) (27,980,078) 5,844,800
Year ended
31 March 2018:
Loss for the
year - - - - - - (9,482,927) (9,482,927)
Other
comprehensive
loss - - - - - (121,096) - (121,096)
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
comprehensive
loss for the
year - - - - - (121,096) (9,482,927) (9,604,023)
Transactions
with owners
Share-based
payments - - - - - - 144,247 144,247
Warrants issued - - - 1,016,164 - - - 1,016,164
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
transactions
with owners - - - 1,016,164 - - 144,247 1,160,411
Balance at
31 March 2018 32,266,188 28,482,061 10,012,644 4,085,546 (39,947,033) (179,460) (37,318,758) (2,598,812)
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Balance at
1 April 2018 32,266,188 28,482,061 10,012,644 4,085,546 (39,947,033) (179,460) (37,318,758) (2,598,812)
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Year ended
31 March 2019:
Profit for
the year - - - - - - 3,389,210 3,389,210
Other
comprehensive
loss - - - - - 31,563 - 31,563
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
comprehensive
profit for
the year - - - - - 31,563 3,389,210 3,420,773
Transactions
with owners
Issue of share
capital 137,781 9,716,143 - - - - - 9,853,924
Share issue
expenses (226,939) - - - (226,939)
Issue of share - - - - - - - -
capital on
acquisition
Share-based
payments - - - - - - 251,004 251,004
Warrants
exercised - - - (1,016,164) - - 1,016,164 -
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Total
transactions
with owners 137,781 9,489,204 - (1,016,164) - - 1,267,168 9,877,989
Balance at
31 March 2019 32,403,969 37,971,265 10,012,644 3,069,382 (39,947,033) (147,897) (32,662,380) 10,699,950
---------------- ---------- ---------- ---------- ----------- ------------ --------- ------------ ------------
Consolidated Statement of Cash Flows
For the year ended 31 March 2019
2019 2018
GBP GBP
------------------------------------------------------ ------------ ------------
Cash flows from operating activities
Profit / (loss) for the year after tax 3,389,210 (9,482,927)
Adjustments for:
Taxation (credited)/charged 491 (55,516)
Finance costs 1,209,554 981,979
Finance income (35,672) (45,264)
Loan payable waived (9,346,089) -
Depreciation and impairment of property, plant
and equipment 944,524 1,046,951
Loss on disposal of property, plant and equipment 469 16,293
Amortisation of intangible non-current assets 155,232 155,232
Impairment on financial assets (IFRS9) 155,962 -
Foreign exchange movements 334,864 (357,127)
Share-based payment and warrant expense 251,004 144,247
Decrease in provisions (756,305) (2,533,298)
Movements in working capital:
(Increase)/decrease in inventories (462,360) 151,159
(Increase)/decrease in trade and other receivables (910,663) 137,961
Increase/(decrease) in trade and other payables 380,352 301,843
Decrease/(increase) in tax asset 653,994 (57,420)
------------------------------------------------------ ------------ ------------
Cash used by operations (4,035,433) (9,595,887)
Tax (paid) / received (12,933) 25,413
Investing activities
Purchase of property, plant and equipment (1,066,699) (163,268)
Proceeds on disposal of property, plant and
equipment - 4,500
(Investment)/reduction in short-term financial
assets 475,385 (475,385)
Interest received 553 -
------------------------------------------------------ ------------ ------------
Net cash (used in)/generated from investing
activities (590,761) (634,153)
Financing activities
Net proceeds from issue of shares 9,626,985 -
Proceeds from borrowings 128,992 9,388,732
Repayment of borrowings (4,139,100) (185,922)
Interest paid (9,820) (16,418)
------------------------------------------------------ ------------ ------------
Net cash generated from financing activities 5,607,057 9,186,392
------------------------------------------------------ ------------ ------------
Net increase/(decrease) in cash and cash equivalents 967,930 (1,018,235)
Cash and cash equivalents at beginning of
period 282,432 1,300,667
Cash and cash equivalents at end of period 1,250,362 282,432
------------------------------------------------------ ------------ ------------
Accounting policies
Basis of Preparation
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined by
section 434 and 435 of the Companies Acct 2006. The financial
information for the year ended 31 March 2019 has been extracted
from the Group's financial statements upon which the auditor's
opinion is unmodified and does not include any statement under
section 498(2) or (498(3) of the Companies Act 2006.
The financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS), adopted for use
in the European Union and including IFRIC interpretations issued by
the International Accounting Standards Board (IASB) and the
Companies Act (2006).
The consolidated financial information has been prepared on the
basis of accounting policies set out in the Group's financial
statements for 2019.
Company information
Yourgene Health plc (Premaitha Health plc until 7 November 2018,
'the Company' or 'Yourgene') is a public limited company
incorporated and domiciled in the United Kingdom. The address of
its registered office is Enterprise House, Lloyd Street North,
Manchester M15 6SE.
The principal activity of Yourgene Health plc and its
subsidiaries is that of a molecular diagnostics business for
research into, and the development and commercialisation of gene
analysis techniques for prenatal screening and other clinical
applications in the early detection, monitoring and treatment of
disease.
The financial statements are presented in British Pounds
Sterling, the currency of the primary economic environment in which
the Company's headquarters is operated.
Going concern
In their assessment of the Group's ability to continue as a
going concern, the directors have focused on the implications of
the patent infringement legal cases which were settled in September
2018, the exercise of warrants by Life Technologies and the
cancellation of all remaining related loans in February 2019, the
post period end fundraise and acquisition of the profitable
Elucigene Diagnostics in April 2019, the rate of growth of gross
profits, decisions available to them for management of the cost
base of the Group and the potential for future fundraising.
The Group has introduced a strategic planning process which has
delivered a revised and ambitious business plan.
As described in the strategic report, the Group has made
progress towards achieving positive cashflows through growth in
revenues since launching the IONA(R) test in February 2015,
acquiring Yourgene Bioscience in March 2017 and acquiring Elucigene
Diagnostics ("Elucigene") in April 2019. The Group has reported a
profit for the first time due to the Life Technologies debt
restructure, however it continues to use cash in its trading
operations albeit at a much-reduced level; which reflects that
break-even levels of revenues have not yet been reached. The
Group's forecasts include assumptions of further growth in revenue,
which are key in achieving positive cashflows. The Directors have
also assessed the Group's cost structure as part of the strategic
planning process and implemented a number of cost reduction
factors.
There is an ongoing commitment to keep costs and working capital
under control so that increasing gross profits can drive positive
cashflows. Detailed sensitivity analysis has been performed to
assess the potential impact on the Group's liquidity caused by
delays in revenue growth against expected levels along with
potential mitigating actions which can be taken to safeguard the
Group's cash position. These include working capital controls and
reductions in discretionary spending. If events transpire
differently to this assessment, for example if revenues fail to
grow at the anticipated pace, then there could be lower cash
headroom. Given the successful fundraise which took place alongside
the acquisition of Elucigene the Directors believe there is
sufficient cash available to avoid a cash shortfall.
The Directors have concluded that considering the circumstances
described above and mitigation strategies in place, the Directors
have a reasonable expectation that the Group and Company will have
adequate resources to continue in operational existence for the
foreseeable future. For these reasons, they continue to adopt the
going concern basis in preparing the annual report and
accounts.
Revenue
IFRS 15 Revenue from Contracts with Customers, became effective
for annual reporting periods beginning on or after 1 January 2018,
and is applied to these accounts. The standard, which replaces IAS
18, covering contracts for goods and services, and IAS 11, covering
construction contracts, addresses the recognition of revenue. The
new standard is based on the principle that revenue is recognised
to depict the satisfaction of performance obligations stated
explicitly or implied in customer contracts in amounts that reflect
the consideration to which the Group expects to be entitled in
exchange for those goods or services. In adopting the new standard
the Group has applied the modified retrospective approach.
Comparatives for the year ended 31 March 2018 are not restated and
whilst there was no cumulative impact of adoption, such an impact
would have been recognised in retained losses as at 1 April
2018.
Revenue from the sale of goods, equipment and related services
is recognised in the Statement of Comprehensive Income when the
deemed Contractual Performance Obligations have been have been
completed, which is determined to be at the point of despatch of
the product or service unless there are specific provisions in the
relevant contract. Revenue from the provision of testing and
reporting services is recognised upon delivery of the report to the
customer. Grant income and income for research projects is
recognised when all conditions for receiving the grant or research
income have been satisfied. The application of IFRS15 has had no
impact on the Group accounts.
Separately disclosed items
Separately disclosed items are those significant items which in
management's judgement should be highlighted on the face of the
Statement of Comprehensive Income by virtue of their size or
incidence to enable a full understanding of the Group's financial
performance. Significant items in Finance Income are disclosed in
the relevant note below.
Financial assets
IFRS 9 Financial Instruments has been adopted in these accounts
and introduces extensive changes to IAS39's guidance on the
classification and measurement of financial assets and their
impairment. The impact of this adoption is described in Note 2.
Financial assets are recognised in the Group's statement of
financial position when the Group becomes party to the contractual
provisions of the instrument. Financial assets are classified into
specified categories. The classification depends on the nature and
purpose of the financial assets and is determined at the time of
recognition.
Financial assets are initially measured at fair value plus
transaction costs, other than those classified as fair value
through profit and loss, which are measured at fair value.
Loans and receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise principally through the provision of goods and services to
customers (trade receivables), but also incorporate other types of
contractual monetary assets. They are measured subsequent to
initial recognition at amortised cost using the effective interest
rate method.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for
indicators of impairment at each reporting end date.
Financial assets are impaired (a) where there is objective
evidence that, as a result of one or more events that occurred
after the initial recognition of the financial asset, the estimated
future cash flows of the investment have been affected, or (b)
where there are expected credit losses in the next reporting period
as required by IFRS 9.
Critical accounting estimates and judgements
In the application of the Group's accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised, if the revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods.
The estimates and assumptions which have a significant risk of
causing a material adjustment to the carrying amount of assets and
liabilities are outlined below.
Critical judgements
Treatment of Thermo Fisher concurrent loan and warrant
arrangements
In December 2015, the Group entered into a loan arrangement with
Life Technologies Limited, a company in the Thermo Fisher
Scientific Group ('Thermo Fisher'), under the terms of which Thermo
Fisher provided a loan facility of GBP5m to the Group. On the same
day, the Group entered into a share warrant agreement with Thermo
Fisher ('2015 warrants'). During the prior year, the Group entered
into an amended and restated loan facility granted by Thermo
Fisher. In return for an increase in the facility of GBP4m, the
Group granted two tranches of warrants to Thermo Fisher ('2016 and
first 2017 warrants'). In June 2017 a further increase of $5m was
agreed in return for two further tranches of warrants (the 'second
2017 warrants' and the '2018 warrants').
The Group assessed the accounting treatment of the loans and
warrant agreements and reached the judgement that, although they
are separate financial instruments, it was necessary to allocate
the initial proceeds received between the loan and the warrants
based on their fair values, because the instruments were entered
into at the same time.
Having considered the terms of the 2015, 2016, first 2017,
second 2017 and 2018 warrants, it was concluded that they represent
equity instruments. The warrants are accounted for at fair value on
inception in accordance with IAS 32. The loans were initially
recognised at fair value on inception and subsequently measured at
amortised cost using the effective interest rate method, in
accordance with IAS 39.
Prior to drawdown of the relevant facilities, the value of the
warrants when issued were treated as a commitment fee for the
advancement of the increased loan facility. The commitment fee was
reflected within prepayments and is released against the loan
facility balance as the facilities are drawn by the Group.
During the reporting period Life Technologies exercised the
second 2017 and 2018 warrants and the associated equity valuation
was reassigned to retained profits. The proceeds from this warrant
exercise were allocated against outstanding loans and then all
remaining loans were cancelled as described in note 30.
Segment reporting
In the opinion of the Directors, the Group has one class of
business in three geographic areas, a molecular diagnostics
business sells into the UK, Europe and other countries referred to
as 'International'. The Group is therefore considered to have a
single operating segment which is monitored by the Group's chief
operating decision makers. Strategic decisions are made on the
basis of unadjusted operating results.
Revenue
Revenue, analysed by category, was as follows:
2019 2018
GBP GBP
----------------------- ---------- ----------
Turnover
Sale of goods 4,976,470 3,554,048
Rendering of services 3,905,892 2,592,815
8,882,362 6,146,863
----------------------- ---------- ----------
Revenue analysed by geographical market
2019 2018
GBP GBP
---------- ----------
UK 1,215,722 1,014,723
Europe 1,780,384 1,213,773
Rest of the World 5,886,256 3,918,367
8,882,362 6,146,863
------------------- ---------- ----------
During 2019, the fourth year of trading revenues for the Group,
GBP2,374,372 (2018: GBP1,449,535) of the Group's revenue depended
on a total of two (2018: two) customers who each represented more
than 10% of Group revenues. These customers combined represent
26.7% of Group revenues (2018: 23.5%).
Non-current assets
The Group's non-current assets are located in the following
geographic regions:
2019 2018
GBP GBP
-------------------------- ------------ ------------
UK 10,845,876 10,538,300
Europe - -
Rest of the World 748,352 921,170
Intra-Group eliminations (1,296,690) (1,141,457)
--------------------------
10,297,538 10,318,013
-------------------------- ------------ ------------
Separately disclosed items
2019 2018
GBP GBP
------------------------------------------- ---------- ------------
Litigation expenses 37,864 (2,692,556)
Share-based payments and warrant expenses (251,004) (144,247)
Costs associated with the acquisition
of subsidiary - (10,084)
Impairment (losses)/gains on financial (155,962) -
assets
-------------------------------------------
(369,102) (2,846,887)
------------------------------------------- ---------- ------------
Litigation expenses represents the release of the excess
provision created for the patent infringement claim (see note
22).
Share-based payments and warrant expenses relate to the
provision made in accordance with IFRS 2 'Share-based payment'
following the issue of share options to employees during the year
as set out in Note 29.
Costs associated with the acquisition of subsidiaries represents
costs incurred during the acquisition of Yourgene Bioscience during
the comparative period ended 31 March 2018.
Impairment of financial assets relates to one of the customer
loan's which has been impaired by GBP107,473 and GBP48,489 of
Expected Credit Losses arising from the implementation of IFRS 9,
see note 19.
Operating loss
2019 2018
GBP GBP
----------------------------------------------- ---------- ----------
Operating loss for the year is stated
after charging/(crediting):
Research and development expenditure 691,239 501,438
Research and development tax credit (473,950) (628,688)
Depreciation of property, plant and equipment 944,524 1,046,951
Loss on disposal of property, plant and
equipment 469 16,293
Amortisation of non-current intangible
assets 155,232 155,232
----------------------------------------------- ---------- ----------
Employees
The average monthly number of persons (including Directors)
employed by the Group during the year was:
2019 2018
Number Number
Directors 8 8
Administrative 49 53
Research and Development 37 30
------------------------- ------- -------
94 91
------------------------- ------- -------
Their aggregate remuneration comprised:
2019 2018
GBP GBP
Wages and salaries 3,832,974 4,283,919
Social security cost 347,938 344,440
Pension cost 150,971 115,982
Share-based payments (note 29) 251,004 242,419
------------------------------- -------------------------------
4,582,887 4,986,760
-------------------------------- ------------------------------- -------------------------------
Finance income
2019 2018
GBP GBP
---------------------------------------- ---------- -------
Interest income:
Bank deposits 285 11,602
Loans and receivables 35,387 33,662
Total interest income 35,672 45,264
---------------------------------------- ---------- -------
Other finance income:
Thermo Fisher loan (see separate note) 9,346,089 -
Total finance income 9,381,761 45,264
---------------------------------------- ---------- -------
Total interest income for financial assets that are not held at
fair value through profit or loss is GBP35,672 (2018:
GBP45,264).
Investment income earned on financial assets, analysed by
category of asset, is as follows:
2019 2018
GBP GBP
---------------------- ====== ======
Loans and receivables 35,672 45,264
---------------------- ------ ------
Finance expense
2019 2018
GBP GBP
------------------------------------------------------ ---------- --------
Interest on bank overdrafts and loans 7,252 10,360
Interest on other loans and borrowings (see note 30) 1,202,302 971,619
Total finance expense 1,209,554 981,979
------------------------------------------------------ ---------- --------
Earnings per share
Basic
Basic earnings per share is calculated by dividing the total
comprehensive profit for the period of GBP3,420,773 (2018: loss
GBP9,604,023) by the weighted average number of ordinary shares in
issue during the period 396,597,093 (2018: 321,218,709).
Diluted
Diluted earnings per share dilute the basic earnings per share
to take into account share options and warrants. The calculation
includes the weighted average number of ordinary shares that would
have been issued on the conversion of all the dilutive share
operations and warrants into ordinary shares. The adjusted weighted
average number of shares used to calculate diluted earnings per
share is 399,636,919 (2018: 321,218,709).
92,269,091 options and warrants (2018: 131,206,885) have been
excluded from this calculation as the effect would be
anti-dilutive.
After the reporting period end a further 140m new ordinary
shares were issued as described in Note 34 of the Group's Annual
Report and Accounts published today.
Trade and other receivables
2019 2018
GBP GBP GBP GBP
---------- ---------- ---------- ----------
Trade receivables 2,810,957 1,778,372
Provision for doubtful trade receivables (884,349) (887,071)
Loss allowance due to expected credit
losses under IFRS 9 adoption (48,489)
------------------------------------------ ---------- ---------- ---------- ----------
Net Trade Receivables 1,878,119 891,301
Other receivables 86,826 35,052
VAT recoverable 282,659 223,698
Other loans and receivables at amortised
cost 302,386 379,410
Loss allowance due to expected credit
losses under IFRS 9 adoption (107,473)
------------------------------------------ ---------- ---------- ---------- ----------
Net other loans and receivables at
amortised cost 194,913 379,410
Prepayments 390,179 545,840
------------------------------------------
2,832,695 2,075,301
------------------------------------------ ---------- ---------- ---------- ----------
An amount of GBP785,317 (2018: GBP785,317) remains provided for
doubtful receivables relating to a customer which is now in
bankruptcy proceedings and legal proceedings are ongoing to recover
the outstanding monies. An additional amount of GBP99,032 (2018:
GBP101,754) has been provided for smaller doubtful receivable
balances.
A loss allowance against trade receivables of GBP48,489 (2018:
GBPnil) for Expected Credit Losses (as defined by IFRS9) has been
provided for due to the implementation of IFRS 9. These expected
credit losses were calculated after analysing the Group's
receivable risks in geographic groupings which are deemed to
reflect appropriate credit risk categories. Delinquency rates and
political stability are deemed to be very low in Europe and Asia,
leading to no impairment of receivables. In the Middle East and
Africa region, delinquency of 4%, greater distance from the Group's
operating units and general political instability have been deemed
to give an elevated risk rating of 10% expected credit losses,
representing one smaller customer fully defaulting or one larger
customer defaulting on c20% of their outstanding receivables.
Other loans and receivables relate to two loans to a customer of
the Group. Under implementation of IFRS9 the loan has been impaired
by a Loss allowance of GBP107,473 (2018: GBPnil) to reflect
potential impairment in the next reporting period, due to
customer-specific dynamics.
Included in prepayments are amounts totalling GBPnil (2018:
GBP33,346) in respect of a commitment fee for the undrawn increased
facility arising on issue of the 2016 and 2017 Thermo Fisher
warrants as detailed in note 30.
Thermo Fisher Scientific loan and warrants
Thermo Fisher 2015 warrants
On 11 December 2015, the Group entered into a loan agreement
with Life Technologies Limited ('Thermo Fisher'), under the terms
of which Thermo Fisher provided a loan facility of GBP5m to the
Group subject to their approval over the usage of drawn funds. The
term of the loan was eight years and the rate of interest applied
to the loan was 6%. The loan was secured by a fixed and floating
charge against the intellectual property of the Group.
The Group simultaneously entered into a share warrant agreement
with Thermo Fisher, issuing warrants over 20,325,204 shares to
Thermo Fisher. The warrants have an exercise price of 24.6p per
share and have a term of eight years.
Initial consideration received was GBP2,760,000. The Group
allocated the proceeds of the 2015 warrant, according to the
respective fair values of the loan and warrant instruments as
follows:
GBP
--------- ---------
Loan 989,637
Warrants 1,770,363
--------- ---------
Thermo Fisher 2016 & March 2017 warrants
On 22 September 2016, the Group entered into an amended and
restated eight-year loan facility granted by Thermo Fisher. In
return for an increase in the facility of GBP4m, the Group granted
two tranches of warrants to Thermo Fisher. These are respectively
the 2016 and March 2017 warrants.
The 2016 warrants issued by the Group on 22 September 2016 are
over 17,094,018 shares with an exercise price of 11.7p per share
and a term of 7.25 years.
The March 2017 warrants issued by the Group on 31 March 2017 are
over 16,913,319 shares with an exercise price of 11.825p per share
and a term of 6.75 years.
July 2017 warrants and February 2018 warrants
On 11 July 2017 the Group entered into a USD loan facility
agreement with Thermo Fisher. The Group also issued warrants over
28,938,797 shares to Thermo Fisher with an exercise price of
10.625p per share and a term of 6.5 years, being the July 2017
warrants.
The Group also simultaneously issued an additional tranche of
warrants, being the February 2018 warrants, for which the exercise
price and quantity of warrants were set on the later grant date of
9 February 2018. The exercise price was 5.775p and the number of
warrants issued totalled 12,417,368.
On 17 February 2019 Thermo Fisher exercised the July 2017 and
February 2018 warrants as part of a wider capital and commercial
restructuring. The proceeds from this exercise were offset against
loans outstanding as described below.
Application of IAS 32/IAS 39
The Group assessed the accounting treatment of the loans and
warrant agreements and concluded that, although they were separate
financial instruments, it was necessary to allocate the initial
proceeds received between the loan and the warrants based on their
fair values, because the instruments were entered into at the same
time.
Having considered the terms of all of the warrants, it was
concluded that they represented equity instruments. The warrants
are accounted for at fair value on inception in accordance with IAS
32. The loan was initially recognised at fair value on inception
and subsequently measured at amortised cost using the effective
interest rate method, in accordance with IAS 39.
Prior to drawdown of the relevant facilities, the value of the
warrants when issued were treated as a commitment fee for the
advancement of the increased loan facility. The commitment fee was
reflected within prepayments and was released against the loan
facility balance as the facilities were drawn by the Group.
February 2019 Corporate and commercial restructure
In February 2019 the Group agreed a corporate and commercial
restructure of the relationship with Thermo Fisher, through its
Life Technologies subsidiary. As part of the restructure, Thermo
Fisher exercised in full its July 2017 and February 2018 warrants
as described above. The notional GBP3.8m proceeds of this warrant
conversion were offset against the outstanding loans owed by the
Group to Thermo Fisher. The second part of the restructure was the
cancellation of GBP9.4m of debt being all remaining borrowings
owing to Thermo Fisher, including any accrued interest. All
security held by Thermo Fisher associated with these loans was also
cancelled. The third part of the restructure was a new Commercial
Agreement between the parties which gave Thermo Fisher certain
exclusive commercial rights in specified South East Asian countries
for a period of 3 years until 2022, and Thermo Fisher entered into
a Lock-in Deed for its converted warrant shares for the same
period. Under the terms of the Commercial Agreement the Group will
pay a modest sales commission, once it achieves positive cashflows.
This commission is capped at GBP6.5m. In addition the Group agreed
to a GBP6.5m contingent liability as described below. Future share
gains made by Thermo Fisher on the converted warrants will
initially lower the commission cap and, once that is fully
satisfied, will erode the contingent liability until that is
extinguished.
Contingent Liability
A part of the February 2019 restructure was the creation of a
GBP6.5m contingent liability, which is payable by the Company to
Thermo Fisher only in the event of a sale of the Company or an
insolvency event.
The 2015 warrants are accounted for, as noted above, as an
equity instrument under IAS 32, and are not subsequently
remeasured. As the loan is subsequently measured at amortised cost
using the effective interest rate method, an accretion charge is
recognised over the life of the loan to restore its carrying value
to the amount drawn down. The charge recognised in the year is as
follows:
GBP
-------------------------------- ------------------
Fair value brought forward 11,727,983
Amounts drawn down in the year 128,992
USD loan revaluation 308,948
Interest charges 851,609
Accretion charge 351,157
Commitment fee released (33,346)
Amounts repaid (3,946,133)
Loan waived (9,389,210)
-------------------------------- ------------------
Carrying value at 31 March 2019 -
-------------------------------- ------------------
The total amounts included in prepayments as a commitment fee
for the undrawn increased facility in respect of the fair values of
the various warrants totalled GBPnil (2018: GBP33,346) at the
balance sheet date. This represented the fair value of the equity
instrument issued in respect of the February 2018 warrants released
against the balance of the loan on drawdown of amounts against the
additional facility.
At 31 March 2019, the following warrants were outstanding in
respect of ordinary shares:
Date of grant Exercise period 2019 Number 2018 Number
----------------- -------------------------------------- ----------- -----------
11 December 2015 11 December 2015 to 10 December 2023 20,325,204 20,325,204
22 September
2016 22 September 2016 to 10 December 2023 17,094,018 17,094,018
31 March 2017 31 March 2017 to 10 December 2023 16,913,319 16,913,319
11 July 2017 11 July 2017 to 10 December 2023 - 28,938,797
9 February 2018 9 February 2018 to 10 December 2023 - 12,417,368
----------------- -------------------------------------- ----------- -----------
The fair values of the warrants granted were determined using a
variation of the Black-Scholes model, incorporating the dilutive
effects of the warrants. The following principal assumptions were
used in the valuations:
2015 2016 2017 July 2017 Feb 2018
warrants warrants warrants warrants warrants
------------------------ --------- ---------- ---------- --------- ---------
Share price 20.63p 10.625p 11.625p 10.725p 5.20p
Volatility 68% 48.63% 59% 52.9% 50.06%
Dividend yield 0% 0% 0% 0% 0%
Risk-free interest rate 1.74% 0.6% 0.979% 1.08% 1.43%
Expected option life 8 years 7.25 years 6.75 years 6.5 years 6 years
------------------------ --------- ---------- ---------- --------- ---------
Options and weighted average exercise prices are as follows for
the reporting periods presented:
Weighted
Number average
of exercise
share price
options p
------------------------------------------- ---------- ---------
Outstanding at 1 April 2017 54,332,541 17
Granted 41,356,165 9
------------------------------------------- ---------- ---------
Outstanding at 31 March 2018 95,688,706 13
------------------------------------------- ---------- ---------
Exercised 41,356,165 9
------------------------------------------- ---------- ---------
Outstanding & Exercisable at 31 March 2019 54,332,541 17
------------------------------------------- ---------- ---------
In January 2018 Premaitha entered into a Secured Loan Facility
with Thermo Fisher. The Facility from Thermo Fisher provided up to
GBP2.1m to fund costs related to the now settled Illumina
litigation against Premaitha. Thermo Fisher was not a party to the
litigation. The Facility was provided on a commercial basis
consistent with previous loans and was secured on the shares of the
Company's Taiwanese subsidiary undertaking Yourgene Health (Taiwan)
Co., Ltd, formerly Yourgene Bioscience Co., Ltd. There were no
share warrants attached to the loan facility. Unused funds from the
Facility were returned to the lender with no residual liabilities
or charges. On 17 February the Facility was cancelled as part of
wider capital and commercial restructuring as described above. As a
result of this debt restructure all security held by the Facility
was also cancelled.
Operating lease commitments
Lessee
2019 2018
GBP GBP
---------------------------------------------------------- ------- -------
Minimum lease payments made under operating leases during
the year 205,699 193,901
---------------------------------------------------------- ------- -------
At the reporting period end date the Group had outstanding
commitments for future minimum lease payments under non-cancellable
operating leases, which fall due as follows:
2019 2018
GBP GBP
--------------------------- ------- -------
Within one year 227,336 182,701
Between two and five years 529,802 620,852
In over five years - -
--------------------------- ------- -------
757,138 803,553
--------------------------- ------- -------
Events after the reporting date
After the reporting date the Company acquired of Elucigene
Diagnostics (the trading name of Delta Diagnostics UK Ltd) and
completed an associated fundraise, both of which completed on 25
April 2019. The Company raised gross proceeds of GBP11.8m through
the issuance of 115,418,869 new ordinary shares with a number of
investors and Directors at a price of 10.25 pence per share.
GBP6.75m of these proceeds were used as cash consideration for the
acquisition of Elucigene with a further 24,581,111 new shares also
issued to Elucigene shareholders at a price of 11.7 pence per
share. The residual funds are intended to fund continued
international expansion of the enlarged business. Excess cash in
the Elucigene business at the time of completion, over and above
GBP0.6m of cash which formed a contractual part of the acquired
business, was returned to the former Elucigene shareholders in the
form of additional cash consideration. Total consideration for the
Elucigene business was GBP9.6m, with an enterprise value of
GBP8.8m, paid as GBP6.75m cash and GBP2.88m shares. Net assets
acquired were GBP2.2m plus GBP7.4m of intangible assets. Detailed
IFRS3 allocations of the intangible value between goodwill,
customer relationships and brand equity are ongoing. Elucigene's
calendar 2018 accounts, as filed at Companies House and reported
under FRS102, reported revenues of GBP3.6m and EBITDA of
GBP1.0m.
Alongside the acquisition of Elucigene it was announced that
10.59m of new performance-based share options would be issued to
existing and acquired directors and management to incentivise value
creation in the enlarged group. These share options were issued on
3 June 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EASXNELENEFF
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