TIDMEKF
RNS Number : 5989N
EKF Diagnostics Holdings PLC
26 September 2023
EKF Diagnostics Holdings plc
("EKF", the "Company" or the "Group")
Half-year Report
EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global
diagnostics business , announces its unaudited interim results for
the six months ended 30 June 2023, a period of continued growth in
Point-of-Care and good progress in the Life Sciences fermentation
capacity expansion.
Trading in the first half of 2023 ("H1 2023") was in line with
Board expectations, and revised guidance for the full year
performance was provided in the 12 September 2023 Trading
Update.
Financial highlights (from continuing operations)
-- Revenue from continuing operations of GBP26.9m (H1 2022: GBP37.5m)
- Revenue growth in continuing operations, excluding largely
COVID-related activities in Contract Manufacturing and Laboratory
Testing including the effect in 2022 of the US inventory payment,
of 6.8%
-- Adjusted EBITDA* of GBP4.4m (H1 2022: GBP9.7m)
-- Gross profit of GBP11.8m (H1 2022: GBP17.7m) with GM%
marginally improved to 44.0% (H1 2022: 43.3%)
-- Loss before tax of GBP0.03m (H1 2022: profit of GBP4.1m)
-- Net cash generated from operations of GBP2.5m (H1 2022: GBP8.4m)
-- Cash and cash equivalents of GBP9.2m (30 June 2022: GBP19.1m) (31 December 2022: GBP11.6m)
- reflecting investment in South Bend enzyme fermentation facility
- of which GBP2.4m (30 June 2022: GBP2.6m, 31 Dec 2022: GBP2.4m)
is held by EKF's Russian subsidiary and subject to regulatory
restrictions.
* Earnings before interest, tax, depreciation and amortisation
adjusted for exceptional items and share-based payments
Operational highlights
-- Business division revenues:
- Point-of-Care: up 10.2% to GBP16.6m (H1 2022: GBP15.1m)
- Life Sciences: excluding COVID-revenues up 14.5% to GBP7.5m (H1 2022: GBP6.5m)
- Other: GBP1.3m (H1 2022: GBP5.0m, which include GBP3.5m
relating to cash received for US inventory)
-- Quality Management Audits completed at new fermentation
facility in South Bend, with all fermenting units on site
-- First customer order received for new South Bend facility,
with official site opening planned for 25 October 2023
-- Additional cost reduction and operational efficiency measures
to further benefit FY 2024 performance
-- Board changes: Julian Baines, Executive Chair, remaining in
role on a longer-term basis and Steve Young appointed as CFO in
September 2023 after an orderly handover
Julian Baines, Executive Chair of EKF, commented: " Looking
forward our core business is in a very strong position with
continued growth momentum seen in our Point-of-Care division and in
sales of <BETA>-HB. With the capacity expansion at our South
Bend facility nearing completion, and having already received our
first purchase order we look forward to delivering strong growth in
enzyme fermentation revenues in 2024."
Copies of the interim results and associated investor
presentation are available here:
https://www.ekfdiagnostics.com/documents-reports.html
EKF Diagnostics will be hosting a live online presentation open
to all existing and potential investors on Tuesday 26 September at
5.30pm (BST), via the Investor Meet Company platform. Investors can
sign up to Investor Meet Company for free and add to meet EKF
Diagnostics via:
https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor
Investors who already follow EKF on the Investor Meet Company
platform will automatically be invited.
A recording of the presentation, a PDF of the slides used, and
responses to the Q&A session will be available on the Investor
Meet Company platform afterwards.
EKF Diagnostics Holdings plc www.ekfdiagnostics.com
Julian Baines, Executive Chair / Stephen Young, via Walbrook PR
CFO
Singer Capital Markets (Nominated Adviser & Broker) Tel: +44 (0)20 7496
3000
Aubrey Powell / Oliver Platts
Walbrook PR (Media & Investor Tel: +44 (0)20 7933 8780 or ekf@walbrookpr.com
Relations)
Paul McManus / Lianne Applegarth Mob: +44 (0)7980 541 893 / +44 (0)7584
391 303
The persons responsible for arranging the release of this
announcement
on behalf of the Company are Julian Baines, Executive Chair, and
Stephen Young, CFO.
About EKF Diagnostics Holdings plc ( www.ekfdiagnostics.com
)
EKF is an AIM-listed global diagnostics business focussed
on:
-- Point-of-Care analysers in the key areas of Hematology and
Diabetes, as well as Central Laboratory products including clinical
chemistry reagents, analysers and centrifuges
-- Life Sciences services provide specialist manufacture of
enzymes and custom products for use in diagnostic, food and
industrial applications, as well as other higher value Contract
Manufacturing services
EKF has headquarters in Penarth (near Cardiff) and operates five
manufacturing sites across the US and Germany, selling into over
120 countries world-wide.
BUSINESS REVIEW
Despite 2023 remaining a transitional year for EKF, we are very
pleased with the strong performance delivered by our core
established business in the first half of the year. In particular,
our Point-of-Care division has delivered double digit organic
growth with growth recorded across our Diabetes and Hematology
ranges. Our Life Sciences business has also benefitted from a 27%
year-on-year increase in sales of Beta-Hydroxybutyrate
(<BETA>-HB) and remains an opportunity for significant growth
once new fermentation capacity comes online.
Revenues for the six months ended 30 June 2023 were GBP26.9m (H1
2022: GBP37.5m) and adjusted EBITDA was GBP4.4m (H1 2022: GBP9.7m).
However, growth in our continuing operations, excluding largely
COVID-related activities in Contract Manufacturing and Laboratory
Testing, was 6.8% to GBP24.9m (H1 2022: GBP23.3m).
OPERATIONAL OVERVIEW
The strong first half performance from both Point-of-Care
("POC") and the Life Sciences division can be seen below once the
impact on the prior year comparison of historical COVID-related
revenues is separated out.
Divisional revenues H1 2023 H1 2022 +/- %
GBP millions Yr-on-Yr
-------------------------------------------------------- ------------ ------------ --------------
Point-of-Care (POC) 16.6 15.1 +9.9%
Life Sciences 8.5 15.3 -44.4%
-------------------------------------------------------- ------------ ------------ --------------
Life Sciences: <BETA>-HB and Fermentation
sales 7.5 6.6 +13.6%
Life Sciences: other COVID-related revenues 1.0 8.7 - 88.5%
Other* 1.8 7.1 -74.6%
-------------------------------------------------------- ------------ ------------ --------------
Total Group Revenues 26.9 37.5 -28.3%
-------------------------------------------------------- ------------ ------------ --------------
Total Group Revenues (excluding all COVID-related
revenues) 24.9 23.3 +6.8%
-------------------------------------------------------- ------------ ------------ --------------
* Other revenue relating to US inventory payment, shipping and
handling recharges, repairs and other sundries
Includes GBP3.5m relating to US inventory receipt
Point-of-Care
Point-of-Care Providing a portfolio of Point-of-Care analysers and
(POC) consumables, particularly for use in the area of Hematology
and Diabetes, for use in hospital and research laboratories,
doctors' offices, blood banks and for in-field anaemia
screening programmes. EKF has an estimated 80,000
hemoglobin, hematocrit, HbA1c, glucose and lactate
analysers in regular use across more than 100 countries.
Also includes Central Laboratory products including
clinical chemistry reagents, analysers and centrifuges.
We are delighted that the Point-of-Care division continues to
deliver steady growth and sales growth of just over 10% reflecting
an increase in product sales across our Diabetes and Hematology
ranges to GBP16.6m (H1 2022: GBP15.1m). Revenues from this division
contributed 63.1% of total revenues and continues to offer EKF a
solid foundation with the majority of sales representing steady
recurring revenue from high margin consumables.
Our POC hematology product portfolio demonstrated good growth in
the first half recording sales of GBP7.21m, an increase of 11.4%
year-on-year (H1 2022: GBP5.68m). We have continued to benefit from
the growth in anaemia screening programmes post-pandemic and our
stand-out performer in the first half was the DiaSpect Tm, a
hand-held hemoglobin analyzer, which saw H1 sales increase by 44%
to GBP3.21m (H1 2022: GBP2.23m). Sales in Hemocontrol, our
point-of-care hemoglobin analyser, were GBP2.90m (H1 2022:
GBP3.10m) after showing a significant uplift from H1 2021 (GBP2.13m
sales) and sales for other hematology products such as HemataSTAT
and Ultracrit remained broadly flat.
Our diabetes product range delivered sales growth of 6.9% to
GBP6.07m (H1 2022: GBP5.68m). The biggest contributor to sales in
this range is our Biosen series of glucose analyzers, a familiar
name in laboratories and diabetes clinics round the world. In H1
2022 we recorded sales of GBP2.70m (H1 2022: GBP2.85m). Revenues
from our HbA1c analyzer product lines grew during the period:
Quo-Lab sales were up 15.7% to GBP1.92m (H1 2022: GBP1.66m), and
sales of Quo-Test were up 24.0% to GBP1.45m (H1 2022:
GBP1.16m).
During the period we also derived our first revenues from our
EKF Link product, a digital connectivity solution for the secure
management of POC analysers and associated data on one centralised
platform. Integrated with hospital and laboratory IT systems, EKF
Link enables real-time remote management of data, such as patient
test results, allowing physicians and other healthcare
professionals to easily evaluate patients' data securely and
accurately from a remote setting.
H1 2023 has seen the best revenue performance to date from our
Point-of-Care Division and we are delighted to see that this strong
performance has continued into the third quarter, as the high-level
of demand for reagent-free hemoglobin and HbA1c analyzers
continues.
This division is also expected to benefit from a number of
initiatives that will improve productivity, margins and our
competitive advantage. The automation process for the manufacture
of disposable cuvettes for the DiaSpect Tm is being consolidated
into our own manufacturing site in Barleben, Germany, from a
third-party producer. In addition, the manufacturing automation of
our Hemocontrol single-pack cuvette at Barleben will be completed
and online by the end of the year. Not only will this have a
positive impact on margins, but also positions EKF as the only
company offering single-pack cuvettes, giving us an advantage in
emerging markets where wastage is a problem.
The regulatory team at EKF continues to work towards meeting the
additional requirements under the new In Vitro Diagnostic
Regulation (IVDR) and other legislation.
Life Sciences
Life Sciences Providing specialist manufacture of enzymes and custom
products for use in diagnostic, food and industrial
applications, as well as other higher value Contract
Manufacturing services. Also included the production
of <BETA>-HB, a reagent used to identify patients
suffering from diabetic ketoacidosis.
Our Life Sciences division delivered revenues of GBP8.5m,
contributing 31.6% of total revenues. The year-on-year comparative
for 2022 (H1 2022: GBP15.3m) includes GBP8.7m of COVID-related
revenues from Contract Manufacturing, however focussing solely on
the on-going <BETA>-HB and enzyme fermentation sales, Life
Sciences produced 14.5% organic growth, driven by strong
<BETA>-HB sales.
We remain one of the clear market leaders for the supply of
<BETA>-HB, a reagent used to detect ketones for patients
suffering from diabetic ketoacidosis, as well as many other
clinical applications. <BETA>-HB sales for H1 2023 were up
27.3% to GBP6.31m (H1 2022: GBP4.96m).
Our specialist enzyme fermentation business recorded revenues of
GBP1.23m (H1 2022: GBP1.63m) from our existing site in Elkhart,
with continued demand from our large corporate customers to create
and deliver high quality enzymes and biomolecules for use in a
variety of industrial applications.
As outlined in our recent Trading Update, good progress is being
made to complete the increased fermentation capacity at the South
Bend facility in Indiana. All of the new fermenting units are on
site and in the process of installation, validation and
verification. We have successfully completed ISO 9001:2015 and ISO
13485:2016 Quality Management Audits at our sites and we expect to
see a steady build-up of revenues from this new capacity during FY
2024. We expect to host a ribbon cutting ceremony for the official
opening of the new site on 25 October 2023.
We are very pleased to announce receipt of our first purchase
order for enzyme manufacturing services for our new facility and
this will contribute limited revenues in Q4 FY 2023 and, as these
scale-up, will cornerstone the substantial revenue growth we expect
to see next year from this new capacity.
Operational efficiencies and continued cost control
We continue to expect that improvements in adjusted EBITDA
margin will be seen in the second half. We also recognise that
there are further cost savings and efficiency measures that can be
implemented, and these will benefit FY 2024. We expect to see FY
2024 margins benefit further from the ramp-up in higher margin
enzyme fermentation revenues within Life Sciences as utilisation of
our additional capacity builds.
Russia and Ukraine
EKF owns 60% of O.O.O. EKF Diagnostika, a distribution
subsidiary located in Moscow which sells EKF POC products and other
third-party products into Russia and neighbouring states. We
continue to provide essential medical supplies to the region, and
whilst sales have continued in the first half of the year, the
number of products that we can supply into the region has reduced
in line with current sanctions.
Cash held in Russia totalled GBP2.39m at the period end.
Restrictions remain in place regarding the payment of foreign
dividends in Russia and so this cash remains partly inaccessible.
We have been able to arrange for limited dividends to be paid over
in July and August, however there can be no assurance that this
will be able to continue. The Board continues to explore options
available to realise the value tied up in Russia.
Board Changes
Post-period end we announced the appointment of Steve Young as
CFO, who has been working as a consultant over the summer to ensure
an orderly handover from his predecessor. Steve is an experienced
FD and CFO with a strong working knowledge of how AIM companies
operate. I worked closely with Steve at BBI Holdings plc for a
number of years and am delighted to have him on board at EKF.
I have also confirmed to the Board my increased commitment as
Executive Chairman and I have a singular focus to ensure we are on
track to meet or exceed revised guidance and to deliver the
significant long-term growth prospects that I am confident our Life
Sciences division offers to shareholders.
Outlook
In our recent guidance update we confirmed that for the full
year ending 31 December 2023 we expect to deliver revenues of
around GBP53m and adjusted EBITDA in the region of GBP10m.
Looking forward our core business is in a very strong position,
with continued growth momentum seen in our Point-of-Care division
and in sales of <BETA>-HB. With the capacity expansion at our
South Bend facility nearing completion, and already having received
our first purchase order and we look forward to delivering strong
growth in enzyme fermentation revenues in 2024.
Increased utilisation of our additional capacity at South Bend
is key to our future growth. My colleagues and I are determined to
ensure we succeed in delivering this and the Board thanks the wider
team for its diligent commitment to our expansion plans. With
strong engagement from current and prospective customers to
underpin increasing utilisation over time, our confidence in the
longer-term, significant growth prospects for EKF remains high.
Julian Baines
Executive Chair
26 September 2023
Financial review
In March 2023, all of the share capital of Advanced Diagnostic
Laboratory LLC was sold to certain members of its management for a
consideration consisting of 1,200,000 EKF ordinary shares which
were returned to EKF. These shares were valued at GBP343,800 and
are held in treasury. Costs of the transaction were GBP107,000. In
February 2023, the UK manufacturing operations, which had largely
serviced UK COVID-related customers were closed down, resulting in
a small number of redundancies.
Revenue
Revenue for the period was GBP26.8m (H1 2022: GBP37.5m).
Revenue by Business Unit:
Unaudited Unaudited
6 months ended 6 months ended
30 June 2023 30 June 2022
GBP'000 GBP'000 +/- %
Point-of-Care 16,627 15,093 10.2%
Life Sciences 8,511 15,244 (44.2%)
Other* 1,734 7,134 (78.2%)
------------
Total revenue 26,872 37,471 (28.3%)
--------------------- --------------------- ------------
Considering our core established business units , which excludes
largely COVID-related revenue including that from Contract
Manufacturing and Laboratory Services totalling GBP2.0m in 2023 (H1
2022: GBP14.7m), the Group delivered growth of 6.8% compared with
the equivalent period in 2022.
* Other revenue relating to US inventory payment, shipping and
handling recharges, repairs and other sundries
Revenue by Geographical Segment:
Unaudited Unaudited
6 months ended 6 months ended
30 June 2023 30 June 2022
GBP'000 GBP'000 +/- %
Continuing business
Germany 11,014 13,583 (18.9%)
USA 13,376 20,925 (36.1%)
Russia 1,690 2,037 (17.0%)
UK 792 926 (14.5%)
------------
Total revenue 26,872 37,471 (28.3%)
--------------------- --------------------- ------------
Geographic regions showing a decline is primarily due to the
reduction in COVID-related Contracted Manufacturing activity. The
2022 amount for USA includes the GBP3.5m inventory payment. The
Group's Russian subsidiary, which is 60% owned by the Group, is
consolidated in full in accordance with accounting standards. The
interest of the minority shareholders is included as a separate
item in the Consolidated Income statement.
Gross profit
Gross profit was GBP11.8m (H1 2022: GBP17.7m). The gross profit
margin was 44.0% (H1 2022: 43.3%). The gross profit has increased
marginally mainly as a result of the mix of products and
services.
Administrative expenses
In H1 2023, administration expenses (excluding exceptionals)
reduced to GBP10.9m (H1 2022: GBP12.8m), representing 40.7% of
revenue for the period (H1 2022: 34.1%, FY 2022: 34.8%). The
increase is largely due to the reduced revenue. The Boards expects
that cost savings and efficiency measures will be implemented in
the second half which will benefit FY 2024.
The charge for depreciation of fixed assets and for the
amortisation of intangibles is GBP3.3m (H1 2022: GBP3.4m).
Operating profit and adjusted earnings before interest tax and
depreciation
The Group generated an operating loss of GBP0.07m (H1 2022:
profit of GBP4.1m). We continue to consider that adjusted EBITDA
gives a more meaningful measure of performance which for H1 2023
was GBP4.4m (H1 2022: GBP9.7m).
In H1 2023 adjusted EBITDA excludes a charge for share-based
payments of GBPnil (H1 2022: charge of GBP0.5m) and exceptional
charges of GBP1.2m (H1 2022: charge of GBP1.7m). The exceptional
charge relates mainly to transition and restructure costs of
certain operations in the US and Germany including provisions
against inventory and the impairment of certain lease assets where
the property is no longer required. The reduction in operating
profit and adjusted EBITDA, in particular in the US and German
regions relates to lower revenues associated with the end of the
COVID-19 pandemic, and increased cost inflation.
Finance income
Net finance income is GBP0.04m (H1 2022: GBP0.01m). The income
has increased because of higher interest income on funds held in
Russia.
Tax
There is a tax charge of GBP0.1m (H1 2022: GBP1.7m). The
decrease largely reflects the decrease in profit.
Earnings per share
Basic earnings per share from continuing operations has
decreased to nil (H1 2022: 0.48p). There is no dilutive effect from
the remaining share options, which have now lapsed.
Balance sheet
Fixed assets
We have capitalised GBP3.4m (H1 2022: GBP2.3m) of property,
plant and equipment. The expenditure includes continuing work on
adding capacity for Life Sciences in the US. Further expenditure in
Life Sciences to complete the new facility in South Bend is planned
for the second half of the year.
Intangible assets
The value of intangible fixed assets is GBP31.2m (31 December
2022: GBP33.8m). The decrease is mainly the result of exchange rate
movements. An amount of GBP0.1m (H1 2022: GBP0.8m) has been
capitalised during the first half.
Investments
Investments are held at fair value which has been calculated
based on the market value of the shares which at 30 June 2023 was
GBP1.1125 (31 December 2022: GBP0.725) per share for Renalytix and
GBP0.1175 (31 December 2022: GBP0.125) per share for Verici Dx. The
majority of the Group's shares in Verici were transferred to EKF
shareholders in 2022 through a dividend in specie. In July 2023 the
remaining Renalytix shares were sold for a consideration of
GBP1.33m.
Deferred consideration
The deferred consideration at 30 June 2022 related to the
acquisition of Advanced Diagnostic Laboratory LLC. (ADL). The
remaining deferred consideration was cancelled as part of the
disposal of ADL earlier this year.
Cash and working capital
The gross cash position at 30 June 2023 was GBP9.2m (31 Dec
2022: GBP11.6m), and the Group had cash net of bank borrowings of
GBP9.1m (31 Dec 2022: GBP11.4m).
Cash generated from operations in H1 2023 is GBP2.5m (H1 2022:
GBP8.4m). Trade debtors have increased as a result of timing
effects in the run-up to period end.
Cash and cash equivalents held by the Russian subsidiary at 30
June 2023 totalled GBP2.4m (31 Dec 2022: GBP2.4m). These deposits
are subject to regulatory restrictions, and therefore may not be
available for general use by the other entities within the
Group.
In July 2023, we disposed of our remaining shareholding in
Renalytix plc for a consideration of GBP1.33m.
In March 2023 the Company agreed a loan facility of GBP3.0m. At
30 June 2023 this facility had not been utilised.. In addition the
Group expects to finalise a further GBP3m undrawn facility from
HSBC from late September 2023. The strength of the Group's balance
sheet and the cash and loan resources available to it, aligned to
the continuing performance of the business gives the Directors
confidence that the business can continue to meet its obligations
as they fall due, even under our worst-case scenarios, for at least
the next 12 months.
Capital structure
1,200,000 ordinary shares were returned to the Company in April
2023 by the acquirer of ADL, at a value of GBP348,000. These shares
are currently held in treasury. We have maintained shareholder
authority to buy back shares, however we currently have no plans to
make any further purchases.
Dividend
At the Annual General Meeting in May 2023, shareholders approved
the payment of a dividend of 1.2p per ordinary share, to be paid on
1 December 2023 to shareholders on the register at close of
business on 3 November 2023. As this declaration is irrevocable,
the value of GBP5.445m is shown as a liability with the debit shown
in the statement of changes in equity.
Stephen Young
Chief Financial Officer
26 September 2023
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHSED 30 JUNE
2023
Unaudited
Unaudited 6 months Audited
6 months ended Year ended
ended 30 30 June 31 December
June 2023 2022 2022
Notes GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 3 26,872 37,471 66,635
Cost of sales (14,855) (19,727) (35,823)
Exceptional items - other
charged to cost of sales (196) (1,499) (6,774)
--------------- -------------- -----------------
Gross profit 11,821 16,245 24,038
Administrative expenses (10,939) (12,791) (23,177)
Exceptional items - impairment
of assets (671) (183) (10,384)
Exceptional items - other (341) - (367)
Other income 63 880 919
--------------- -------------- -----------------
Operating (loss)/profit (67) 4,151 (8,971)
------------------------------------- ----------
Depreciation and amortisation (3,274) (3,361) (6,658)
Share-based payments - (517) 308
Exceptional items 4 (1,209) (1,682) (17,525)
EBITDA before exceptional
items and share-based payments 4,416 9,711 14,904
------------------------------------- ---------- --------------- -------------- -----------------
Finance income 59 57 131
Finance costs (18) (68) (102)
--------------- -------------- -----------------
(Loss)/profit before income
tax (26) 4,140 (8,942)
Income tax charge 5 (144) (1,717) (634)
--------------- -------------- -----------------
(Loss)/profit for the period (170) 2,423 (9,576)
--------------- -------------- -----------------
(Loss)/profit is attributable
to:
Owners of the parent (358) 2,213 (10,101)
Non-controlling interest 188 210 525
(170) 2,423 (9,576)
--------------- -------------- -----------------
(Loss)/earnings per ordinary
share attributable to the
owners of the parent during
the period 6
Pence Pence Pence
Basic (0.08) 0.48 (2.21)
Diluted (0.08) 0.48 (2.21)
----------- ---------- -----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE 6 MONTHSED 30
JUNE 2023
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (170) 2,423 (9,576)
Other comprehensive income/(expense):
Items that will not be reclassified
to profit or loss
Changes in fair value of equity
instruments at fair value
through other comprehensive
income (net of tax) 437 (5,307) (6,096)
Items that may be subsequently
reclassified to profit or
loss
Currency translation differences (3,502) 6,520 6,811
Other comprehensive (loss)/income
(net of tax) (3,065) 1,213 715
--------------- --------------- -----------------
Total comprehensive (loss)/income
for the period (3,235) 3,636 (8,861)
--------------- --------------- -----------------
Attributable to:
Owners of the parent (3,139) 3,024 (9,420)
Non-controlling interests (96) 612 559
--------------- --------------- -----------------
Total comprehensive (loss)/income
for the period (3,235) 3,636 (8,861)
--------------- --------------- -----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Unaudited Unaudited Audited as
as at 30 as at 30 at 31 December
June 2023 June 2022 2022
Notes GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant
and equipment 7 21,576 18,170 20,435
Right-of-use
assets 7 507 1,495 1,279
Intangible assets 8 31,163 43,387 33,772
Investments 1,556 1,566 1,119
Deferred tax
assets 878 23 925
Total non-current
assets 55,680 64,641 57,530
---------------- ------------------- -----------------------
Current Assets
Inventories 9,414 12,969 9,434
Trade and other
receivables 7,979 12,236 10,739
Corporation tax
receivable 13 408 10
Cash and cash
equivalents 9,165 19,138 11,578
Total current
assets 26,571 44,751 31,761
---------------- ------------------- -----------------------
Total assets 82,251 109,392 89,291
================ =================== =======================
Equity
attributable
to owners of the
parent
Share capital 4,537 4,549 4,549
Share premium 7,375 7,375 7,375
Other reserve (182) (184) (629)
Foreign currency
reserves 6,129 8,931 9,590
Retained earnings 46,326 64,775 52,461
---------------- ------------------- =======================
64,185 85,446 73,346
Non-controlling
interest 1,081 1,230 1,177
---------------- ------------------- =======================
Total equity 65,266 86,676 74,523
---------------- ------------------- =======================
Liabilities
Non-current
liabilities
Borrowings - 44 -
Lease liabilities 223 793 537
Deferred
consideration - 173 -
Deferred tax
liability 2,140 3,795 2,493
---------------- ------------------- -----------------------
Total non-current
liabilities 2,363 4,805 3,030
---------------- ------------------- -----------------------
Current
liabilities
Trade and other
payables 11,702 14,148 8,288
Lease liabilities 400 902 873
Deferred -
consideration - 72
Current income tax
liabilities 2,476 2,611 2,440
Borrowings 44 178 137
---------------- ------------------- -----------------------
Total current
liabilities 14,622 17,911 11,738
---------------- ------------------- -----------------------
Total liabilities 16,985 22,716 14,768
---------------- ------------------- -----------------------
Total equity and
liabilities 82,251 109,392 89,291
================ =================== =======================
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHSED 30 JUNE 2023
Audited
Unaudited Year
Unaudited 6 months to 31
6 months ended ended 30 December
30 June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
(Loss)/profit before income tax (26) 4,140 (8,942)
Adjustments for
- Depreciation 1,590 1,505 3,098
- Amortisation and impairment charges 1,684 1,856 3,560
- Exceptional items 1,209 1,682 17,525
- (Profit)/loss on disposal of assets 5 19 28
- Share-based payments - 517 (308)
- Cash outflows relating to exceptional
items (157) - (617)
- Foreign Exchange - - (71)
- Bad debt written down 174 - 127
- Net finance costs (41) 11 (29)
Changes in working capital
- Inventories (445) (693) (815)
- Trade and other receivables 1,708 1,698 1,276
- Trade and other payables (2,862) (323) (2,177)
------------------------------ ---------------------- ----------------
Cash generated from operations 2,839 10,412 12,655
Interest received 59 57 85
Interest paid (3) (39) (46)
Income tax paid (389) (1,945) (3,006)
------------------------------ ---------------------- ----------------
Net cash generated from operating
activities 2,506 8,428 9,688
Cash flow from investing activities
Payment for investments - (2,930) (2,930)
Payment for property, plant and
equipment (PPE) (3,345) (2,167) (4,434)
Payment for intangibles (138) (819) (1,394)
Payment for acquisition of subsidiaries,
net of cash acquired - (403) (403)
Proceeds from sale of PPE 59 6 229
------------------------------ ---------------------- ----------------
Net cash used in investing activities (3,424) (6,256) (8,932)
------------------------------ ---------------------- ----------------
Cash flow from financing activities
Dividend paid to company shareholders - - (5,459)
Payment for shares bought back - (3,896) (3,896)
Repayments of borrowings (93) (525) (613)
Principal elements of lease payments (507) (551) (1,071)
Dividends payment to non-controlling -
interests - -
------------------------------ ---------------------- ----------------
Net cash used in financing activities (600) (4,972) (11,039)
------------------------------ ---------------------- ----------------
Net decrease in cash and cash
equivalents (1,518) (2,800) (10,283)
Cash and cash equivalents at beginning
of period 11,578 20,341 20,341
Exchange gains on cash and cash
equivalents (895) 1,597 1,520
------------------------------ ---------------------- ----------------
Cash and cash equivalents at end
of period 9,165 19,138 11,578
============================== ====================== ================
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
FOR THE 6 MONTHSED 30 JUNE
2023
Share Share Other Foreign Retained Total Non-controlling Total
Capital Premium Reserve Currency earnings interest equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2022 4,639 7,375 5,033 2,813 74,264 94,124 618 94,742
Comprehensive
income/(expense)
Profit for the
period - - - - 2,213 2,213 210 2,423
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - (5,307) - - (5,307) - (5,307)
Currency
translation
differences - - - 6,118 - 6,118 402 6,520
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
comprehensive
income/(expense) - - (5,307) 6,118 2,213 3,024 612 3,636
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Acquisition of
own
shares (90) - 90 - (3,896) (3,896) - (3,896)
Dividends to
owners - - - - (7,806) (7,806) - (7,806)
Dividends to - - - - - - - -
non-controlling
interest
Total
contributions
by and
distributions
to owners (90) - 90 - (11,702) (11,702) - (11,702)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 30 June 2022 4,549 7,375 (184) 8,931 64,775 85,446 1,230 86,676
Comprehensive
income/(expense)
Profit for the
period - - - - (12,314) (12,314) 315 (11,999)
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - (445) - - (445) - (445)
Acquisition of
own
shares - - (344) - - (344) - (344)
Currency
translation
differences - - - 659 (1) 658 (368) 290
Total
comprehensive
income/(expense) - - (789) 659 (12,315) (12,445) (53) (12,498)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Reserve transfer - - 344 - 1 345 - 345
Total
contributions
by and
distributions
to owners - - 344 - 1 345 - 345
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 31 December
2022 4,549 7,375 (629) 9,590 52,461 73,346 1,177 74,523
Comprehensive
income
Profit for the
period - - - - (358) (358) 188 (170)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Other
comprehensive
income/(expense)
Changes in fair
value
of equity
instruments
at fair value
through
other
comprehensive
income/(expense) - - 437 - - 437 - 437
Currency
translation
differences - - (2) (3,461) 12 (3,451) (284) (3,735)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Total
comprehensive
income/(expense) - - 435 (3,461) (346) (3,372) (96) (3,468)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
Transactions with
owners
Acquisition of
own
shares (12) - 12 - (344) (344) - (344)
Dividends to
owners - - - - (5,445) (5,445) - (5,445)
Total
contributions
by and
distributions
to owners (12) - 12 - (5,789) (5,789) - (5,789)
------------- ------------- ------------ ------------- ------------- ------------- -------------------- -------------
At 30 June 2023 4,537 7,375 (182) 6,129 46,326 64,185 1,081 65,266
============= ============= ============ ============= ============= ============= ==================== =============
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
EKF Diagnostics Holdings Plc is a company incorporated and
domiciled in the United Kingdom. The Company is a public limited
company, which is listed on the Alternative Investment Market of
the London Stock Exchange. The address of the registered office is
Avon House, 19 Stanwell Road, Penarth, Cardiff CF64 2EZ.
The principal activity of the Group is the development,
manufacture, and supply of products and services into the in-vitro
diagnostic (IVD) market place. The Group has presence in the UK,
USA, Germany, and Russia, and sells throughout the world including
Europe, the Middle East, the Americas, Asia, and Africa.
The financial statements are presented in British Pounds
Sterling, the currency of the primary economic environment in which
the Company's headquarters is operated. The consolidated financial
statements have been prepared under the historical cost convention,
as modified by the revaluation of certain financial liabilities at
fair value through profit and loss and certain financial assets
measured at fair value through other comprehensive income.
The financial information in these interim results is that of
the holding company and all of its subsidiaries as at 30 June 2023.
It has been prepared in accordance with UK-adopted International
Accounting Standards and the Companies Act 2006 as applicable to
companies reporting under those standards. The accounting policies
applied by the Group in this financial information are the same as
those applied by the Group in its financial statements for the year
ended 31 December 2022 and which will form the basis of the 2023
financial statements except for a number of new and amended
standards which have become effective since the beginning of the
previous financial year. These new and amended standards are not
expected to materially affect the Group. The preparation of
financial statements requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group's accounting
policies.
Certain statements in this announcement constitute
forward-looking statements. Any statement in this announcement that
is not a statement of historical fact including, without
limitation, those regarding the Company's future expectations,
operations, financial performance, financial condition and business
is a forward-looking statement. Such forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, amongst
other factors, changing economic, financial, business or other
market conditions. These and other factors could adversely affect
the outcome and financial effects of the plans and events described
in this announcement and the Company undertakes no obligation to
update its view of such risks and uncertainties or to update the
forward-looking statements contained herein. Nothing in this
announcement should be construed as a profit forecast.
The financial information presented herein does not constitute
full statutory accounts under Section 434 of the Companies Act 2006
and was not subject to a formal review by the auditors. The
financial information in respect of the year ended 31 December 2022
has been extracted from the statutory accounts which have been
delivered to the Registrar of Companies. The Group's Independent
Auditor's report on those accounts was unqualified, did not include
references to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain
a statement under section 498(2) or 498(3) of the Companies Act
2006. The financial information for the half years ended 30 June
2023 and 30 June 2022 is unaudited and the twelve months to 31
December 2022 is audited.
2. Significant accounting policies
Going concern
The Directors have considered the applicability of the going
concern basis in the preparation of these financial statements.
This included the review of internal budgets and financial results
which show, taking into account reasonably plausible changes in
financial performance, that the Group will be able to operate
within the level of its current funding arrangements.
Following the end of the COVID-19 pandemic, the Group's core
established business has now returned to normal. The business has
seen a significant reduction in pandemic-related contract
manufacturing and testing activities and as a result has closed its
UK manufacturing operations and disposed of its US laboratory
testing business, ADL Health.
The Group has revenues from customers in Russia which are
serviced by our entity based in Moscow. As a result of the
continuing sanctions imposed on Russia by the EU, the USA and other
countries, there are enhanced risks in respect of our Russian
entity, including regulatory restrictions and credit risk to cash
balances, its ability to collect debtors, and EKF's ability to
import products into Russia. In addition, action by the Russian
Government is currently restricting the Russian entity's ability to
pay dividends to its shareholders. In preparing a downside going
concern forecast we have discounted future sales and cash from this
region entirely.
The strength of the Group's balance sheet aligned to the
continuing performance of the business gives the Directors
confidence that the business can continue to meet its obligations
as they fall due, even under our worst-case scenarios, for at least
the next 12 months. In addition, the Group has secured a committed
GBP3m of funding from the North Atlantic Smaller Companies
Investment Trust, to be drawn down if necessary. Accordingly, the
Directors are satisfied they can prepare the accounts on a going
concern basis.
3. Segmental reporting
Management has determined the Group's operating segments based
on the monthly management reports presented to the Chief Operating
Decision Maker ('CODM'). The CODM is the Executive Directors and
the monthly management reports are used by the Group to make
strategic decisions and allocate resources.
The principal activity of the Group is the design, development,
manufacture and sale of diagnostic instruments, reagents and
certain ancillary products, as well as central laboratory reagents,
primarily into the in-vitro diagnostic (IVD) market . This activity
takes place across various countries, such as the USA, Germany,
Russia, and the United Kingdom, and as such the Board considers the
business primarily from a geographic perspective. Although not all
the segments meet the quantitative thresholds required by IFRS 8,
management has concluded that all segments should be maintained and
reported. In addition, the COMD considers the segmental revenue
performance of business segments.
The reportable segments derive their revenue primarily from the
manufacture and sale of medical diagnostic equipment and reagents.
Other services include the servicing and distribution of third
party company products under separate distribution agreements.
Transactions between segments consist of the sale of products for
resale. The basis of accounting for these transactions is the same
as for external revenue.
Currently the key operating performance measures used by the
CODM are Revenue and adjusted EBITDA (earnings before interest,
tax, depreciation and amortisation, adjusted for exceptional items
and share-based payments).
The segment information provided to the Board for the reportable
geographic segments is as follows:
Period ended 30 June 2023 unaudited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Income statement
Revenue 13,419 13,376 1,690 792 29,277
Inter-segment (2,405) - - - (2,405)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
External revenue 11,014 13,376 1,690 792 26,872
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Adjusted EBITDA* 2,765 3,059 546 (1,954) 4,416
Share-based payment - - - - -
Exceptional items 37 (719) - (527) (1,209)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
EBITDA 2,802 2,340 546 (2,481) 3,207
Depreciation (418) (967) (25) (180) (1,590)
Amortisation (880) (125) - (679) (1,684)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Operating profit/(loss) 1,504 1,248 521 (3,340) (67)
Net finance costs (1) - 57 (15) 41
Income tax (321) 163 (109) 123 (144)
Profit/(loss) for the
period 1,182 1,411 469 (3,232) (170)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Segment assets
Operating assets 32,860 74,876 578 (21,265) 87,049
Inter-segment assets 254 (18,662) - 4,445 (13,963)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
External operating assets 33,114 56,214 578 (16,820) 73,086
Cash and cash equivalents 2,592 4,100 2,388 85 9,165
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Total assets 35,706 60,314 2,966 (16,735) 82,251
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Segment liabilities
Operating liabilities (3,824) 21,217 324 13,187 30,904
Inter-segment liabilities 9,494 (17,775) - (5,682) (13,963)
--------------------------------------- ------------ ------------- ------------ ------------- -------------
External operating liabilities 5,670 3,442 324 7,505 16,941
Borrowings 44 - - - 44
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Total liabilities 5,714 3,442 324 7,505 16,985
--------------------------------------- ------------ ------------- ------------ ------------- -------------
Other segmental information
Non-current assets - PPE 6,043 14,143 95 1,295 21,576
Non-current assets - Right-of-use
assets 197 288 2 20 507
Non-current assets - Intangibles 18,554 8,292 68 4,249 31,163
Intangible assets -additions 112 26 - - 138
PPE - additions 428 2,910 - 7 3,345
Right-of-use assets - additions 52 - - - 52
Year ended December 2022 audited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
============================== =============== ================= ============== ================ ================
Income statement
Revenue 30,384 37,220 4,202 1,427 73,233
Inter-segment (6,192) (398) - (8) (6,598)
============================== =============== ================= ============== ================ ================
External revenue 24,192 36,822 4,202 1,419 66,635
============================== =============== ================= ============== ================ ================
Adjusted EBITDA* 8,089 8,309 1,563 (3,057) 14,904
Exceptional items -
impairments (32) (10,324) - (28) (10,384)
Exceptional items - other (1,857) (4,909) - (375) (7,141)
Share-based payments - - - 308 308
============================== =============== ================= ============== ================ ================
EBITDA 6,200 (6,924) 1,563 (3,152) (2,313)
Depreciation (744) (1,925) (21) (408) (3,098)
Amortisation (1,667) (1,835) - (58) (3,560)
============================== =============== ================= ============== ================ ================
Operating profit 3,789 (10,684) 1,542 (3,618) (8,971)
Finance income 1 1 118 11 131
Finance cost (33) (4) - (65) (102)
Income tax (790) 644 (348) (140) (634)
Profit for the year 2,967 (10,043) 1,312 (3,812) (9,576)
============================== =============== ================= ============== ================ ================
Segment assets
Operating assets 41,835 57,213 873 13,246 113,167
Inter-segment assets (10,608) (22,634) - (2,212) (35,454)
============================== =============== ================= ============== ================ ================
External operating assets 31,227 34,579 873 11,034 77,713
Cash and cash equivalents 2,774 5,785 2,366 653 11,578
============================== =============== ================= ============== ================ ================
Total assets 34,001 40,364 3,239 11,687 89,291
============================== =============== ================= ============== ================ ================
Segment liabilities
Operating liabilities 7,211 27,125 207 15,542 50,085
Inter-segment liabilities (986) (21,908) - (12,560) (35,454)
============================== =============== ================= ============== ================ ================
External operating
liabilities 6,225 5,217 207 2,982 14,631
Borrowings (excluding
lease liabilities) 137 - - - 137
============================== =============== ================= ============== ================ ================
Total liabilities 6,362 5,217 207 2,982 14,768
Other segmental
information
Non-current assets -
PPE 5,982 13,590 155 1,987 21,714
Non-current assets -
Intangibles 18,606 8,822 87 6,257 33,772
PPE - additions 877 5,909 84 102 6,972
Intangible assets -
additions 832 192 - 370 1,394
Period ended 30 June 2022 unaudited
Germany USA Russia UK Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Income statement
Revenue 16,283 21,323 2,037 927 40,570
Inter-segment (2,701) (398) - - (3,099)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External revenue 13,582 20,925 2,037 927 37,471
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Adjusted EBITDA* 4,989 6,911 665 (2,854) 9,711
Share-based payment - - - (517) (517)
Exceptional items (795) (755) - (132) (1,682)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
EBITDA 4,194 6,156 665 (3,503) 7,512
Depreciation (370) (898) (37) (200) (1,505)
Amortisation (468) (138) - (1,250) (1,856)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Operating profit/(loss) 3,356 5,120 628 (4,953) 4,151
Net finance costs (25) (3) 56 (39) (11)
Income tax (493) (996) (158) (70) (1,717)
Profit/(loss) for the
period 2,838 4,121 526 (5,062) 2,423
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Segment assets
Operating assets 32,707 89,337 1,047 (16,294) 106,797
Inter-segment assets (47) (16,699) - 203 (16,543)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External operating assets 32,660 72,638 1,047 (16,091) 90,254
Cash and cash equivalents 7,833 8,220 2,585 500 19,138
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Total assets 40,493 80,858 3,632 (15,591) 109,392
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Segment liabilities
Operating liabilities 1,046 24,045 439 14,524 40,054
Inter-segment liabilities 4,986 (19,199) - (3,347) (17,560)
--------------------------------------- ------------ -------------- ------------ ------------- --------------
External operating liabilities 6,032 4,846 439 11,177 22,494
Borrowings 222 - - - 222
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Total liabilities 6,254 4,846 439 11,177 22,716
--------------------------------------- ------------ -------------- ------------ ------------- --------------
Other segmental information
Non-current assets - PPE 6,087 10,445 101 1,537 18,170
Non-current assets - Right-of-use
assets 139 1,072 4 280 1,495
Non-current assets - Intangibles 19,600 19,222 117 4,448 43,387
Intangible assets -additions 394 145 - 280 819
PPE - additions 357 1,769 - 41 2,167
Right-of-use assets - additions 78 72 - - 150
* Adjusted EBITDA represents earnings before interest, tax,
depreciation and amortisation adjusted for exceptional items and
share-based payments
Russian operations
In the context of an increased level of uncertainty, the Group
has exercised critical judgements in applying its accounting
policies in whether the Group should continue to consolidate its
Russian business. The Group has applied judgement in regards to
whether the Group continues to control its Russian subsidiary due
to the restrictions imposed by the Russian government or any other
authority. Control exists when the Group is exposed, or has rights,
to variable returns from its involvement with the subsidiary and
has the ability to affect those returns through its power over the
subsidiary. The Russian government introduced various sanctions in
recent months, including restrictions on the payment of dividends
to "unfriendly states" that require consent from the Ministry of
Finance of Russia. Since the Group continued to direct the
operations and the Russian regulations currently do not prohibit
the declaration and payment of dividends, the Group has taken the
view that it has retained control through the six months ended 30
June 2023. Were the Group to conclude that it no longer retains
control, the Russian operations would be treated as if they had
been disposed of, with the associated assets and liabilities
derecognised.
In July 2023, the Group sought and gained permission for its
Russian entity to commence limited dividend payments, totalling
around EUR70,000 per month. There is no certainty how long these
payments will be able to continue.
Disclosure of Group revenues by geographic location
Unaudited Unaudited Audited
6 months 6 months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP000 GBP000 GBP000
Americas
United States of America 10,832 17,620 30,941
Rest of Americas 1,689 1,771 4,126
Europe, Middles East and Africa
(EMEA)
Germany 4,248 4,245 8,001
United Kingdom 374 1,165 1,886
Ireland 1,006 5,229 5,253
Rest of Europe 2,207 1,641 3,715
Russia 1,690 2,037 4,202
Middle East 859 561 1,449
Africa 1,340 656 1,945
Asia and Rest of World
China 640 538 1,014
Rest of Asia and Oceania 1,987 2,008 4,103
Total Revenue 26,872 37,471 66,635
=============== =============== =================
Revenue by business segment, which is presented for illustrative
purposes only, is as follows:
Unaudited Unaudited
6 months 6 months
ended 30 ended 30
June 2023 June 2022
GBP'000 GBP'000 +/- %
Continuing business
Point-of-Care 16,627 15,093 10.2%
Life Sciences 8,511 15,244 (44.2%)
Other* 1,734 7,134 (78.2%)
------------
Total revenue 26,872 37,471 (28.3%)
--------------- --------------- ------------
4. Exceptional items
Included within administration expenses and cost of sales are
exceptional items as shown below:
Unaudited Unaudited Audited
6 months 6 months year
ended 30 ended 30 ended
June 2023 June 2022 31
December
2022
Note GBP000 GBP000 GBP000
Exceptional items include:
* Deferred consideration and settlement of warranty
claim a - - 2
* Business reorganisation costs - other charged to cost
of sales b (196) (1,499) (6,774)
* Business reorganisation costs - Impairment c (671) (183) (10,384)
* Business reorganisation costs - other charged to
operating expenses d (342) - (369)
Exceptional items (1,209) (1,682) (17,525)
-------------- -------------- -------------
a. Change in the value of deferred consideration relating to the
acquisition of Advanced Diagnostic Laboratory LLC.
b. Costs associated with the transition and restructure of
certain operations in the US, UK and Germany, which have been
charged to cost of sales. The costs include provisions against
certain COVID-19 related and other inventory and provisions for
certain onerous contracts following the decision to focus on its
other businesses.
c. Impairments associated with the transition and restructure of
certain operations in the US, UK and Germany, which have been
charged to operating expenses.
d. Costs associated with the transition and restructure of
certain operations in the US, UK and Germany, which have been
charged to operating expenses.
5. Income tax
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 30 2022
June 2023 June 2022
GBP000 GBP000 GBP000
Current tax
Current tax on profit for
the period 431 1,692 2,815
Adjustments for prior periods (9) - 62
--------------- --------------- -----------------
Total current tax 422 1,692 2,877
--------------- --------------- -----------------
Deferred tax
Origination and reversal of
temporary differences (278) 25 (2,243)
Total deferred tax (278) 25 (2,243)
--------------- --------------- -----------------
Income tax charge 144 1,717 634
=============== =============== =================
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the parent by the weighted
average number of ordinary shares in issue during the period.
Diluted profit per share is calculated by adjusting the weighted
average number of ordinary shares outstanding assuming conversion
of all dilutive potential ordinary shares. The Company has one
category of dilutive potential ordinary share, being share options.
In August 2023 the remaining share options lapsed. The Company is
holding 1,200,000 ordinary shares in treasury. These shares have
therefore been excluded from the earnings per share
calculation.
Unaudited Unaudited
6 months 6 months Audited
ended 30 ended year ended
June 2023 30 June 31 December
2022 2022
GBP'000 GBP'000 GBP'000
(Loss)/profit attributable
to owners of the parent (358) 2,213 (10,101)
---------------- ---------------- -----------------
Weighted average number of
ordinary shares
in issue 454,492,995 459,474,072 457,180,086
Assumed conversion of share
awards - 4,987 -
Assumed payment of equity deferred
consideration - 157,580 -
-----------------
Weighted average number of
ordinary shares - diluted 454,492,995 459,636,639 457,180,186
---------------- -----------------
Pence Pence Pence
Basic (0.08) 0.48 (2.21)
Diluted (0.08) 0.48 (2.21)
7. Property, plant and equipment
Group
Fixtures Right-of-use
Land and and Plant and Motor Assets under assets
buildings fittings machinery vehicles construct-ion GBP'000 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- -------------- -------------- -------------- ------------------ ------------------ ----- -------------
Cost
At 1 January
2022 10,711 2,012 13,188 160 2,470 3,010 31,551
Additions 304 101 683 - 1,079 150 2,317
Transfers - 215 (215) - - - -
Disposal - - (213) - - (207) (420)
Exchange
differences 694 72 951 79 255 192 2,243
------------- -------------- -------------- -------------- ------------------ ------------------
At 30 June
2022 11,709 2,400 14,394 239 3,804 3,145 35,691
Additions 260 32 905 48 3,158 252 4,655
Transfers 40 (205) 608 - (443) - -
Disposals (3) (363) (1,064) (20) (125) (78) (1,653)
Exchange
differences 144 108 34 (57) 21 3 253
------------- -------------- -------------- -------------- ------------------ ------------------
At 31
December
2022 12,150 1,972 14,877 210 6,415 3,322 38,946
Additions 1,033 23 1,432 - 857 52 3,397
Transfers 88 - 636 - (724) - -
Disposal (5) (403) (1,676) - (8) (960) (3,052)
Discontinued
operations - - - - - (176) (176)
Exchange
differences (435) (48) (516) (44) (296) (127) (1,466)
------------- -------------- -------------- -------------- ------------------ ------------------ ----- ---------------
At 30 June
2023 12,831 1,544 14,753 166 6,244 2,111 35,538
Depreciation
At 1 January
2022 2,595 1,249 8,625 81 - 1,135 13,685
Exchange
differences 222 50 666 43 - 67 1,048
Disposal - - (188) - - (207) (395)
Impairment - - 51 - - 132 183
Transfers - 194 (194) - - - -
Charge for
the period 255 158 555 14 - 523 1,505
------------- -------------- -------------- -------------- ------------------ ------------------ ----- ---------------
At 30 June
2022 3,072 1,651 9,515 138 - 1,650 16,026
Exchange
differences 4 100 (55) (33) - (15) 1
Disposal (3) (336) (1,029) (14) - (64) (1,466)
Impairment 1 - 1,078 - - (21) 1,058
Transfers - (194) 194 - - - -
Charge for
the period 270 150 694 (14) - 493 1,593
------------- -------------- -------------- -------------- ------------------ ------------------
At 31
December
2022 3,344 1,371 10,397 77 - 2,043 17,232
Exchange
differences (143) (31) (352) (16) - (74) (616)
Disposal (5) (378) (1,499) - - (960) (2,842)
Impairment - - - - - 353 353
Transfers 18 - (18) - - - -
Charge for
the period 310 193 682 11 - 394 1,590
----- ---------------
At 30 June
2023 3,524 1,155 9,211 72 - 1,604 15,566
------------- -------------- -------------- -------------- ------------------ ------------------ ----- ---------------
Net book value
30 June 2023 9,307 389 5,542 94 6,244 507 22,083
-------------
31 December 2022 8,806 601 4,480 133 6,415 1,279 21,714
---------- -------- ---------- -------- ---------- ---------- -------------
30 June 2022 8,637 749 4,879 101 3,804 1,495 19,665
---------- -------- ---------- -------- ---------- ---------- -------------
8. Intangible Fixed Assets
Group
Trademarks
trade
names & Customer Trade Develop-ment Software
Good-will licences relationships secrets costs GBP'000 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ---------------- ------------------ ------------- ------------------ -------------- -------------
Cost
At 1 January
2022 28,558 4,284 15,706 17,328 5,023 3,370 74,269
Additions - 15 - - 802 2 819
Disposal - - - - - - -
Impairment (1,177) - - (3,950) (28) - (5,155)
Exchange
differences 1,553 296 1,422 355 257 359 4,242
At 30 June
2022 28,934 4,595 17,128 13,733 6,054 3,731 74,175
Additions - (15) - - 590 - 575
Disposals - - - - (570) (25) (595)
Exchange
differences 442 52 145 317 92 25 1,073
At 31
December
2022 29,376 4,632 17,273 14,050 6,166 3,731 75,228
Additions - 15 - - 118 5 138
Disposal (4,161) (517) (1,293) - (427) (2,975) (9,373)
Transfer - 726 - (520) (206) - -
Exchange
differences (911) (211) (739) (366) (182) (94) (2,503)
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
At 30 June
2023 24,304 4,645 15,241 13,164 5,469 667 63,490
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
Amortisation
At 1 January
2022 1,177 3,021 11,825 14,664 1,579 109 32,375
Exchange
differences - 205 1,066 292 126 23 1,712
Disposal - - - - - - -
Impairment (1,177) - - (3,950) (28) - (5,155)
Charge for
the period - 110 705 494 228 319 1,856
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
At 30 June
2022 - 3,336 13,596 11,500 1,905 451 30,788
Exchange
differences - 31 100 246 24 (10) 391
Disposal - - - - (598) - (598)
Impairment 4,254 463 1,157 - 636 2,661 9,171
Charge for
the period - 217 733 268 244 242 1,704
At 31
December
2022 4,254 4,047 15,586 12,014 2,211 3,344 41,456
Exchange
differences (93) (154) (668) (323) (129) (78) (1,445)
Disposal (4,161) (517) (1,293) - (423) (2,975) (9,369)
Charge for
the period - 208 620 191 584 81 1,684
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
At 30 June
2023 - 3,584 14,245 11,882 2,243 372 32,326
------------- ---------------- ------------------ ------------- ------------------ -------------- ---------------
Net book value
30 June 2023 24,304 1,061 996 1,282 3,226 295 31,164
----------- ---------- ---------- ---------- ---------- ---------- -----------
31 December 2022 25,122 585 1,687 2,036 3,955 387 33,772
----------- ---------- ---------- ---------- ---------- ---------- -----------
30 June 2022 28,934 1,259 3,532 2,233 4,149 3,280 43,387
----------- ---------- ---------- ---------- ---------- ---------- -----------
9. Disposal
In March 2023 Advanced Diagnostic Laboratory LLC, which traded
as ADL Health, was sold to a company controlled by its Chief
Executive.
The summary results from this business in the period from 1
January 2023 to disposal are as follows:
Advanced
Diagnostic
Laboratory
GBP000
Revenue 475
Cost of sales (505)
----------------
Gross loss (30)
Administrative expenses (114)
Net loss for the period (144)
----------------
Depreciation included in
administrative expenses 55
10. Dividends
A dividend to shareholders of the holding company of 1.2p per
ordinary share has been provided during the period following
shareholder approval at the Annual General Meeting of the Company
in May 2023 (six months to 30 June 2022 and year to 31 December
2022: both 1.2p). It will be paid on Friday 1 December 2023 to
shareholders on the register of members at the close of business on
Friday 3 November 2023.
10. Availability of this announcement
This announcement and the Group's Interim Report for the six
months ended 30 June 2023 are available from the Company's website,
www.ekfdiagnostics.com . If you would like to receive a hard copy
of the Interim Report, please contact the EKF Diagnostics Holdings
plc offices on +44 (0)29 2071 0570 to request a copy.
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END
IR FELLLXKLZBBX
(END) Dow Jones Newswires
September 26, 2023 02:00 ET (06:00 GMT)
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