CRX.L Regulatory News (CRX)

17 Aug 2005 07:02

Cyprotex PLC17 August 2005 Press Release 17 August 2005 Cyprotex PLC ("Cyprotex" or "the company") Interim results for the six months to 30 June 2005 Cyprotex PLC (LSE:CRX), the drug discovery technology and information company,today reports its interim results for the half year ended 30 June 2005. HIGHLIGHTS • Revenues increased by 58% to £1.40m (First half 2004: £0.89m) • Gross profits were 66% higher at £1.22m (First half 2004: £0.73m) • Gross margin rose to 87%, compared with 83% for the same period last year • Cash resources at end of June 2005 were £1.34m • Basic loss per share down to 0.33p (First half 2004: 0.62p) • Significant milestone achieved during the first half 2005, with positive monthly trading cash flow generated for the first time • Continued expansion of the customer-base and the signing of new, longer-term and collaborative contracts in each of the three continents where drug discovery is focused Commenting on the results, Robert Morrisson Atwater, Chairman and ChiefExecutive Officer of Cyprotex PLC, said: "Cyprotex set itself some major goalsat the beginning of 2005. Significant progress toward these had been made bythe half-year stage. This bodes well for the full year." For further information: Cyprotex PLCRobert Morrisson Atwater, Chief Executive Officer Tel: +44 (0) 1625 505 100ir@cyprotex.com www.cyprotex.com Code Securities LimitedChris Collins Tel: +44 (0) 20 7024 2000cic@codesecurities.com www.codesecurities.com Media enquiries: Abchurch Communications LimitedHeather Salmond / Samantha Robbins Tel: +44 (0) 20 7398 7700samantha.robbins@abchurch-group.com www.abchurch-group.com CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT Meeting Objectives Cyprotex set itself some major goals at the beginning of 2005. Significantprogress toward these had been made by the half-year stage. This bodes well forthe full year. Somewhat earlier than expected, Cyprotex achieved an important milestone.Enjoying the benefits of significant capacity expansion that was largely paidfor during 2004, the Group is trading cash flow positive, on a single monthlybasis. Cyprotex continued to outpace the growth of its underlying market. Having addedto its North American marketing team, a growing contribution from thiscontinent, both in terms of customer numbers and contract size, is alreadyevident. Cyprotex has also secured its first customer in the Japanese market,which it believes will secure its longer-term presence in the region. Continuedexpansion of its base of active customers proves both the market opportunityfor, and the superiority of, the Group's sector-leading technologies. Whilst further expansion of its product offering, state-of-the-art laboratoryfacilities and office reorganisation will be funded during the second half,Cyprotex's resources continued to be carefully guarded and opportunities forcost reduction continually monitored. Cyprotex remains comfortable with thebenefit of a significant cash 'cushion'. Existing operations are considered tohave sufficient resources to fund their own expansion going forward. Cyprotex continues to focus on achieving each of the key objectives set out inthe Group's 2004 Annual Report and Accounts. Necessary skills, resources andexperience will be added at Board level to allow the Group to seize theopportunities its global market offers. Cyprotex will attempt to furthercapitalise on its significant past expenditure in predictive computationalcapabilities through academic franchise and industrial collaboration.Management will also focus on meeting the needs of its global customer basethrough both organic expansion of its product offering and 'bolt-on'acquisitions of related technology. Financial Highlights of the 2005 half year • Revenue for the half-year ended 30 June 2005 was £1,400,860, against £886,238 for the comparable period in 2004, representing a 58% increase year-on-year. • Gross profits rose 66% to £1,216,604, up from £734,433 in the first half of 2004. • Gross margins reached 87%, compared with 83%. • The loss on ordinary activity after taxation for the half year was £419,163, down from a loss of £759,200, representing a reduction of 45% year-on-year. • Cash resources were carefully guarded. Cash in hand at 30 June 2005 amounted to £1.34m, despite continued investment in new products and laboratory capabilities. • A rapidly expanding customer base has ensured the Group does not have a high dependence on any single customer, the largest of which is likely to contribute less than 15% of total revenue in the year 2005. Product Development and Laboratory Expansion Cyprotex's Cloe Screen hERG channel inhibition assay, which was validated in theGroup laboratories early in 2005, is now fully integrated into the automatedhigh throughput system. Restructuring of its metabolite profiling andidentification is now well advanced. Additional offerings of both in-vitrosafety toxicology and new assay development will be commercialised during thesecond half. Further laboratory expansion, within the existing Macclesfield site, is alreadyat the planning stage. This is expected to commence during the first half of2006. Having also completed the commissioning of a major new Quadropole MassSpectrometer installation and its automated method development now advanced,Cyprotex is anticipating the capacity, turnaround and reliability requirementsof its expanding customer base into 2007 and beyond. Customer Development Cyprotex continues to retain existing customers while expanding its globalreach. Revenue generating contracts were secured from a wide range ofcustomers, including international names such as Roche, Serono, Novo Nordisk,Johnson & Johnson, AstraZeneca and Sepracor. Cyprotex continues to maintain a high profile at a large number of majorpharmaceutical/biotechnology conferences during 2005, including the DrugDiscovery Technology & Development World Congress in Boston, USA and the WorldPharmaceutical Congress in Philadelphia, USA. Robert Morrisson Atwater Chairman and Chief Executive Officer 17 August 2005 GROUP PROFIT AND LOSS ACCOUNTFor the six months ended 30 June 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004Continuing activities Note £ £ £ TURNOVER 2 1,400,860 886,238 2,117,321 Cost of sales (184,256) (151,805) (432,441) --------- --------- ---------GROSS PROFIT 1,216,604 734,433 1,684,880 Administrative expenses (1,711,899) (1,620,730) (3,255,104) --------- --------- ---------OPERATING LOSS (495,295) (886,297) (1,570,224) Interest receivable 34,037 56,121 107,697Interest payable (26,369) (1,691) (1,762) --------- --------- --------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (487,627) (831,867) (1,464,289) Taxation 3 68,464 72,667 165,182 --------- --------- ---------LOSS FOR THE PERIOD (419,163) (759,200) (1,299,107) --------- --------- ---------Loss per ordinary share - basic & diluted 4 (0.33)p (0.62)p (1.04)p GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the six months ended 30 June 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Loss for the financial period (419,163) (759,200) (1,299,107)Exchange difference on there-translation of net assets of subsidiary undertaking (26,251) 4,486 20,266 ---------- ---------- ---------Total recognised gains and losses (445,414) (754,714) (1,278,841)relating to the period ----------- ---------- --------- GROUP BALANCE SHEETAs at 30 June 2005 Unaudited Unaudited Audited At At At 30 June 30 June 31 December 2005 2004 2004 Note £ £ £FIXED ASSETSTangible assets 1,690,827 819,747 915,124 ------ ------ ------CURRENT ASSETSStocks 89,388 71,838 86,028Debtors 562,254 675,048 770,863Cash at bank and in hand 1,338,409 2,696,757 1,839,800 ------ ------ ------ 1,990,051 3,443,643 2,696,691 CREDITORS: due within one year (384,746) (690,533) (563,085) ------ ------ ------NET CURRENT ASSETS 1,605,305 2,753,110 2,133,606 ------ ------ ------TOTAL ASSETS LESS CURRENT LIABILITIES 3,296,132 3,572,857 3,048,730 CREDITORS: due after more than one year (689,750) - - ------ ------ ------NET ASSETS 2,606,382 3,572,857 3,048,730 ------ ------ ------ CAPITAL AND RESERVESCalled up share capital 127,620 127,312 127,312Share premium account 9,619,479 9,616,721 9,616,721Merger reserve 128,070 128,070 128,070Profit and loss account (7,268,787) (6,299,246) (6,823,373) ------ ------ ------EQUITY SHAREHOLDERS' FUNDS 7 2,606,382 3,572,857 3,048,730 ------ ------ ------ GROUP CASH FLOW STATEMENTFor the six months ended 30 June 2005 Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December Note 2005 2004 2004 £ £ £NET CASH OUTFLOW FROM OPERATING ACTIVITIES 5 (436,998) (924,972) (1,487,748) ---- ---- ---- RETURNS ON INVESTMENT AND SERVICING OF FINANCEInterest received 34,037 56,121 107,697Interest paid (26,369) (4) (75)Interest element of finance lease and hire purchase - (1,687) (1,687)contracts ---- ---- ---- 7,668 54,430 105,935 ---- ---- ----TAXATIONUK corporation tax received 166,416 - 163,141 ---- ---- ----CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTPayments to acquire tangible fixed assets (941,793) (36,605) (545,432)Receipts from sales of tangible fixed assets - 16,702 16,702 ---- ---- ---- (941,793) (19,903) (528,730) ---- ---- ---- NET CASH OUTFLOW BEFORE FINANCING (1,204,707) (890,445) (1,747,402) ---- ---- ---- MANAGEMENT OF LIQUID RESOURCES 505,383 (2,536,265) (1,742,580) ---- ---- ----FINANCINGIssue of ordinary share capital 3,066 3,104,332 3,104,332Net movement in short term borrowings 10,500 - -Net movement in long term borrowings 689,750 - -Repayment of capital lease and hire purchase contracts - (8,360) (8,360) ---- ---- ---- 703,316 3,095,972 3,095,972 ---- ---- ----INCREASE/(DECREASE) IN CASH 6 3,992 (330,738) (394,010) ----- ----- ----- GROUP CASH FLOW STATEMENT (continued)For the six months ended 30 June 2005 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Increase/(decrease) in cash during the period 3,992 (330,738) (394,010) Cash (inflow)/outflow (from)/to short term deposits (505,383) 2,536,265 1,742,580 Cash inflow from increase in short term loans (10,500) - - Cash inflow from increase in long term loans (689,750) - - Repayment of capital element of finance lease and hire purchase contracts - 8,360 8,360 ---- ---- ----Movement in net funds during the period (1,201,641) 2,213,887 1,356,930 ---- ---- ----Opening net funds 1,839,800 482,870 482,870 ---- ---- ----Closing net funds 638,159 2,696,757 1,839,800 ----- ----- ----- NOTES TO THE UNAUDITED INTERIM REPORT 1. BASIS OF PREPARATION OF INTERIM FINANCIAL INFORMATION The financial information contained in this interim report does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. Thefigures for the year ending 31 December 2004 have been extracted from thestatutory financial statements which have been filed with the Registrar ofCompanies. The auditors' report on those financial statements was unqualifiedand did not contain a statement under section 237(2) or 237(3) of the CompaniesAct 1985. The accounts have been prepared in accordance with applicableaccounting standards and under the historical cost accounting rules. The principal accounting policies of the Group have remained unchanged fromthose set out in the Group's 2004 Annual Report and Financial Statements. Thefinancial information is prepared on a going concern basis, which assumes thatthe Group will continue in operational existence for the foreseeable future. The interim financial information has been reviewed by the Company's auditors. Acopy of the auditors' review report is attached to this interim report. 2. SEGMENTAL ANALYSIS The Group operates in one principal area of activity, that of providing in-vitroand in-silico ADMET/PK (Absorption, Distribution, Metabolism, Excretion,Toxicity / Pharmacokinetic) information to the pharmaceutical industry. Theturnover and operating result for the periods are derived from the Group'sprincipal activity. The geographical analysis of turnover by destination is as follows: Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ United Kingdom 139,930 408,474 808,820Rest of Europe 1,058,776 419,797 1,183,168USA 202,154 57,967 125,333 ----- ---- ---- 1,400,860 886,238 2,117,321 ----- ---- ----- 3. TAXATION The tax credit represents a claim by the Group for repayable R&D tax credits. 4. LOSS PER SHARE The loss per share is calculated by reference to the earnings attributable toordinary shareholders divided by the weighted average of 127,387,951 ordinaryshares for the 6 months to 30 June 2005, 123,343,826 ordinary shares for the 6months to 30 June 2004, and 125,338,821 for the 12 months to 31 December 2004. Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 Attributable loss (£) (419,163) (759,200) (1,299,107) ----- ----- -----Average number of ordinary shares in issue for basic and diluted loss per share 127,387,951 123,343,826 125,338,821 ----- ----- -----Basic and diluted loss per share (0.33)p (0.62)p (1.04)p ----- ----- ----- The loss for the period and the weighted average number of ordinary shares forcalculating the diluted loss per share for the period to 30 June 2005, 30 June2004 and 31 December 2004 are identical to those used for the basic loss pershare. This is because the outstanding share options would have the effect ofreducing the loss per ordinary share and would therefore not be dilutive underthe terms of Financial Reporting Standard No. 14 'Earnings per share' (FRS 14). 5. RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING ACTIVITIES Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Operating loss (495,295) (886,297) (1,570,224)Depreciation of tangible fixed assets 166,090 130,146 272,641Loss on sale of tangible fixed assets - 2,522 2,522Increase in stocks and work in progress (3,360) (4,072) (18,262)Decrease/(increase) in operating debtors and prepayments 110,657 (194,544) (360,985)(Decrease)/increase in operating creditors and accruals (188,839) 22,787 166,294Exchange rate differences (26,251) 4,486 20,266 ----- ----- ----- (436,998) (924,972) (1,487,748) ----- ----- ----- 6. ANALYSIS OF MOVEMENT IN NET FUNDS Non At At 1 January Cash flow cash 30 June 2005 movements 2005 £ £ £ £ Cash at bank and in hand 97,220 3,992 - 101,212 ----- ----- ----- ---- Short term deposits 1,742,580 (505,383) - 1,237,197Bank loans due within one year - (10,500) - (10,500)Bank loans due after one year - (689,750) - (689,750) ----- ----- ----- ----- 1,839,800 (1,201,641) - 638,159 ------ ------ ------ ----- In the Group balance sheet short term deposits are included within cash at bankand in hand. 7. RECONCILIATION OF EQUITY SHAREHOLDERS' FUNDS Unaudited Unaudited Audited 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2005 2004 2004 £ £ £ Loss for the financial period (419,163) (759,200) (1,299,107) Issue of share capital 3,066 3,162,256 3,162,256Share issue costs - (57,924) (57,924)Exchange difference on the re-translation of net assets of subsidiary undertaking (26,251) 4,486 20,266 ----- ----- -----(Decrease)/ increase in equity shareholders' funds (442,348) 2,349,618 1,825,491 Opening equity shareholders' funds 3,048,730 1,223,239 1,223,239 ----- ----- ----Closing equity shareholders' funds 2,606,382 3,572,857 3,048,730 ----- ----- ----- 8. Copies will be available on request from the Company Secretary,Cyprotex PLC, 15 Beech Lane, Macclesfield, Cheshire, SK10 2DR. 9. The interim report was approved by the board of directors on 17August 2005. INDEPENDENT REVIEW REPORT TO CYPROTEX PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2005 which comprises the group profit and lossaccount, group balance sheet, group cash flow statement, reconciliation of netcash flow to movement in net funds, group statement of total recognised gainsand losses, and the related notes 1 to 9. We have read the other informationcontained in the interim report, which comprises only the Chairman and ChiefExecutive Officer's Statement, and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. Ourresponsibilities do not extend to any other information. This report is madesolely to the company's members, as a body, in accordance with guidancecontained in APB Bulletin 1999/4 "Review of interim financial information". Ourreview work has been undertaken so that we might state to the company's membersthose matters we are required to state to them in a review report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company and the company's membersas a body, for our review work, for this report, or for the conclusion we haveformed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report and ensuring that theaccounting policies and presentation applied to the interim figures areconsistent with those applied in preparing the preceding annual accounts exceptwhere any changes, and the reasons for them, are disclosed. Review work performed We conducted our review having regard to the guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing PracticesBoard for use in the United Kingdom. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the accounting policies and presentation have beenconsistently applied, unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with United Kingdom Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an auditopinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2005. Grant Thornton UK LLPChartered AccountantsManchester17 August 2005 This information is provided by RNS The company news service from the London Stock Exchange