RNS Number:2770J
Axis-Shield PLC
03 March 2005
AXIS-SHIELD PLC
PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2004
Dundee, Scotland, 3 March 2005 - Axis-Shield plc (LSE:ASD, OSE:ASD), the in
vitro diagnostics company based in Scotland and Norway, today announces its
preliminary results for the year ended 31 December 2004
Financial Highlights
* Revenues up 4%, or 12% on a constant currency basis and allowing for the
2003 sale of autoimmune business. 2004 turnover was #52.3 million (2003:
#50.3 million)
* Gross margins improved to 53.3% (2003: 50.0%)
* Profit before R&D increased by 45% to #8.7 million (2003: #6.0 million)
* Planned reduction in R&D expenditure to #10 million delivers savings of
22% (2003: #12.9 million)
* Positive EBITDA of #2.2 million (2003: loss of #3.0 million)
* Substantially reduced loss for full year of #1.2 million (2003: loss of
#6.7 million), reflecting decline in external R&D expenditure and improved
gross margin and operating efficiency
* Strong balance sheet with increased cash of #11.9 million at year end
(2003: #10.1 million)
Operating Highlights
* AFINION(TM) Point of Care System launched at International Trade Show
(MEDICA) in November
* Successful launch of BNP for diagnosis of heart failure on Abbott's AxSYM
(R) platform, generating revenues of #1.8 million in 2004
* Homocysteine sales affected by US patent disputes in first half but
recovered growth in H2
* 2004 sales of anti-CCP kit for effective detection of early rheumatoid
arthritis reached #936,000
* First markers announced for Abbott AxSYM(R) xtra menu extension programme
Commenting on the results, Nigel Keen, Chairman of Axis-Shield said:
"2004 has been an excellent year of progress which has seen Axis-Shield firmly
established as a supplier of innovative and large volume markers to the
laboratory testing market and as a major player in the growing demand for
effective diagnosis at the point of care. The launch of our AFINIONTM system
represents a significant milestone in our evolution, as it gives us a
sophisticated instrument system to meet customer needs in the important primary
health care sector, which complements our established NycoCardTM platform. Our
financial performance has improved substantially and I look forward to a period
of sustained and profitable growth."
There will be an analyst group meeting at 9:30 am on Thursday 3 March 2005 in
London at the offices of Financial Dynamics at Holborn Gate, 26 Southampton
Buildings, WC2. There will be a simultaneous conference call and webcast. For
further details, please contact Mo Noonan on +44 (0)20 7831 3113.
A meeting for Oslo analysts will take place at 8:00 am on Friday 4 March 2005 at
the Continental Hotel, Oslo. For further details, please contact Lilian
Manderson on +44(0)1382 422000.
Enquiries:
Axis-Shield plc Tel: +44 (0)1382 422000
Svein Lien, Chief Executive Officer
Paul Garvey, Finance Director
Financial Dynamics Tel: +44 (0)207 831 3113
David Yates / Davina Langdale
Notes to Editors:
Axis-Shield is an international in vitro diagnostics company, headquartered in
Dundee with R&D and manufacturing bases in Dundee and Oslo. The Group
specialises in the development, manufacture and marketing of innovative
proprietary diagnostics kits in areas of clinical need, including cardiovascular
and neurological diseases, rheumatoid arthritis, alcohol abuse and diabetes. It
has a special focus on effective testing at the point of care, for improved
patient management.
For more information on Axis-Shield, please refer to www.axis-shield.com
Chairman's Statement
Business Overview
The company has made significant steps towards achieving its strategic
objectives and sustainable profitability. Axis-Shield has three core businesses
in place to deliver growth. These are in Laboratory Diagnostics, Point-of-Care
Testing and Medical Device Distribution. Our core competence continues to be the
development of novel patentable diagnostic tests in areas of clinical need,
making use of our special skills in protein chemistry to devise more effective
ways to measure technically challenging markers. We will continue to
commercialise our new tests through distributors and by adaptation onto the high
throughput instrument platforms of the major global diagnostic companies which
dominate the currently available hospital laboratory marketplace. Growth will
be further accelerated through our innovative contract with Abbott, which gives
us a quick route to the automated instrument market for our novel markers,
without the substantial costs associated with developing our own sophisticated
high throughput instrumentation.
We aim to capitalise on the rapidly expanding market for point-of-care (PoC)
testing, particularly in the doctor's office. This sector is currently not
dominated by any large companies and we have the opportunity to build on our
existing presence in the market established through our successful NycoCard(TM)
system. We have concentrated substantial resource on developing our next
generation of PoC platform, with the potential to achieve CLIA-waived status. In
November we launched our revolutionary new AFINION(TM) system at the
International Trade Show, MEDICA, in Germany.
We also successfully sell diagnostic tests and medical devices to end-users in
our home markets of the UK and the Nordic countries through our UK Sales
Division and Medinor.
Financial Overview
Revenues for 2004 were #52.3 million, compared to #50.3 million in 2003, an
increase of 4%. The US dollar is the currency used in many of our OEM contracts,
and its recent weakness has impacted upon our reported growth in revenues. On a
constant currency basis and after allowing for the 2003 sale of our autoimmune
business, underlying year on year growth equated to an increase of 12%. Gross
margins continued their improvement to 53.3%, largely due to a more favourable
product mix, giving a gross profit of #27.9 million. Operating profit before R&D
and exceptional items was #8.7 million, compared to #6.0 million in 2003. Total
R&D spend decreased as planned by 22%, falling from #12.9 million in 2003 to
#10.0 million. #2.9 million of the spend during 2004 was attributable to the
continuing but reducing external cost of the engineering and manufacturing
development of the AFINION(TM) instrument and cartridges (down from #5.7 million
in 2003). The overall loss for the year amounted to #1.2 million, a substantial
reduction compared to the loss of #6.7 million in 2003.
The loss for the year is in line with expectations and reflects increased
efficiency in our Laboratory Division since the 2003 centralisation of
operations in Dundee, as well as reduced external R&D costs on AFINION(TM).
Our balance sheet remains strong and cash at the year end strengthened to #11.9
million, compared to #10.1 million at end 2003.
A continuing key difference between Axis-Shield and other emerging healthcare
companies is the strong cash flow from our commercial operations, mostly derived
from successful products which we have taken to market and which were developed
through our own research and development. This has allowed us to fund our
substantial R&D programme without repeated recourse to the capital markets. The
increased gross margins we have reported this year reflect the fact that growth
in our business has come from our in-house developed high margin portfolio
rather than licensed or distributed products. 2004 has produced a substantially
reduced level of loss and we now expect to enter into a period of sustained and
profitable growth with revenues rising as a result of our heavy investment over
recent years in both internal and external research and development.
Operating highlights
Laboratory Division
Revenue growth in this division during the year was achieved primarily through
sales of new Abbott products and anti-CCP kits, demonstrating the strength of
our range of products in addition to our homocysteine portfolio. Divisional
turnover in 2004 amounted to #16.0 million (#15.3 million in 2003), an increase
of 5.0%, or 18.5% on a constant currency basis and allowing for the 2003 sale of
our autoimmune business.
The centralisation of our Laboratory Group operations in Dundee has resulted in
improved efficiency and has contributed to improved gross margins. The
conversion of additional and previously unutilised space in our Dundee facility
to accommodate the move of certain processes from Oslo and to gear up for
increased Abbott AxSYM(R) production was completed during the summer, partly
financed by a grant from Scottish Enterprise. The expanded premises were
formally opened by Scotland's Deputy First Minister, Jim Wallace, on July 27.
During the first part of the year we also successfully completed the post-sale
transfer of the autoimmune product range manufacturing to Euro-Diagnostica in
Holland.
Scientific interest in homocysteine continues to grow and, in addition to the
established association of homocysteine in assessment of cardiovascular and
neurodegenerative disease risk, data were recently published in the Lancet
showing elevated homocysteine was associated with an increased incidence of
stroke. An earlier 2004 publication suggested the marker could also have some
utility in the early detection of increased risk of osteoporosis. Despite this
continuing medical interest in homocysteine as an indicator of increased risk of
serious disease, the sales of our tests reduced from 8.4 million units in 2003
to 8.0 million in 2004, a decrease of 4.8%, with revenues down from #6.8 million
to #6.5 million. However unit sales in the second half of 2004 were 4.5 million,
compared to 3.5 million in the first half of the year, showing a 28% increase on
the first half and a 12% increase over H2, 2003. This reflects the fact that the
several issues which have negatively affected sales have been largely resolved.
A principal factor in this has been the uncertainty in the USA regarding the
activities of Competitive Technologies Inc (CTT), which controls a US patent
which expires in 2007, covering the potential use of homocysteine as a surrogate
marker of vitamin deficiency. During 2004, the US Court of Appeal unexpectedly
upheld an earlier judgement from a District Court in the USA which effectively
supported the CTT contention that all homocysteine testing was performed as a
measure of vitamin status, rather than for risk prediction of cardiovascular and
neurodegenerative disease. We were not party to this action and could not make
any contribution to refute this judgement. This Court decision affected the US
market with laboratories reluctant to offer and promote homocysteine testing
under the threat of litigation from CTT. The situation appears now to have
stabilised, with sales resuming growth. Our marketing partners, as the suppliers
of the vast majority of homocysteine tests to laboratories, have agreed to pay
royalties to CTT without prejudice, in order to allow them to resume marketing
of homocysteine tests. However we remain unconvinced by the CTT case and
tactics. Our direct sales of homocysteine kits in the US are small and as a
result any royalty liability payable to CTT would be modest. We may choose
either to resolve any dispute with CTT through commercial agreement or to test
the situation in a US Court.
Sales in the first half of the year were also affected by the availability of
unlicensed products in the market. The favourable resolution of the homocysteine
patent dispute with Catch Inc. in April, coupled with the agreement for
Axis-Shield to become the global manufacturer and distributor of homocysteine
tests based on the Catch technology, has brought the principal element of this
unlicensed competition into our portfolio of licensed products. The agreement
with Catch has given us rights to use and license out an adaptable and robust
technology for clinical chemistry instruments and, as a result of our
settlement, Beckman Inc. has now signed an agreement with Catch to use the Catch
reagents on its widely placed Synchron instrument platform, with royalties to
Axis-Shield on a per test basis. Catch and Axis-Shield have now established a
good working partnership and we expect to announce further agreements with large
industry players keen to commercialise this technology in the near future. We
have also made good progress in setting up our own Axis-Shield label sales
through our global network of distributors. In November we settled an
outstanding dispute with Catch's main US distributor, Carolina Liquid
Chemistries Corporation, giving us royalties for that company's prior sales of
unlicensed tests.
The other factor which influenced 2004 homocysteine sales involved one of our
main OEM partners reducing previously high inventory levels. This is now
resolved and we believe that going forward we will see our homocysteine sales
re-establish their previous levels of growth as clinical demand continues to
increase and patent issues disappear, as evidenced by the increased sales in the
second half of 2004.
Our collaborative product development programmes with Dade Behring and
Instrumentation Laboratory for homocysteine assays on these companies'
instrument platforms are nearing completion and should add to homocysteine
revenues in 2005.
The recent launch of the AxSYM(R) BNP assay by Abbott has been very successful,
with revenues to Axis-Shield of #1.8 million during the period. BNP is
considered the marker of choice in the diagnosis of heart failure and we expect
further growth in sales of this test. This will be helped by the signature of an
additional contract with Abbott to develop and produce BNP kits for the
widely-placed IMx(R) system. This will allow Abbott to offer the test in smaller
laboratories and achieve wider coverage for this clinically important marker. In
May Abbott also launched an AxSYM(R) testosterone assay, developed and
manufactured by Axis-Shield, and the test received FDA marketing approval in
October permitting sales in the USA. 2004 sales reached #268,000. In August,
Abbott launched the first immunoassay for the immunosuppressive drug sirolimus,
which is used predominantly in renal transplantation, on its IMx(R) analyser,
after a tripartite collaboration between Abbott, Axis-Shield and the drug's
developer, Wyeth. The test, developed by Axis-Shield and manufactured by us as
an OEM, achieved 2004 sales of #232,000. In May, we signed an agreement with
Abbott to produce an assay for B-2-microglobulin on the IMx(R) instrument
platform and this test is now close to launch.
Activated Factor XII research continues in Norway and further clinical data from
392 post-infarct patients in Bergen has shown that the marker strongly predicted
future coronary events in this population, with a short-term predictive power
superior to conventional risk markers. We continue our efforts to devise an
automated assay format for this marker. Work also progresses on a non-column
assay for CDT, our marker of alcohol abuse which had sales of #1.5 million in
2004 (2003: #1.6 million) and we look forward to increasing the market
penetration of HoloTC, our test for better identification of vitamin B12
deficiency, once we have formulated the assay for launch on the AxSYM(R)
platform.
Recently published data on the utility of our patented anti-CCP test shows that
many patients with rheumatoid arthritis have circulating antibodies to cyclic
citrullinated peptides in their bloodstream several years before the appearance
of symptoms. These findings strongly link the use of this new test with the use
of the new generation of drugs to treat rheumatoid arthritis and we are now
seeing significant interest from pharmaceutical companies and physicians using
those drugs in the more widespread application of this test in the management of
this debilitating disease. The authors of the Swedish and Dutch studies
concerned conclude that early screening for anti-CCP is feasible and would be of
considerable help in the clinical management of patients in whom rheumatoid
arthritis is predicted to develop. This has helped to grow sales of our anti-CCP
ELISA kit to #936,000 in 2004, up by 105% over 2003. A January 2005 article in
Rheumatology News reporting on the 4th International Congress on Autoimmunity,
held in Budapest, states that the diagnostic value of anti-CCP antibody testing
in rheumatoid arthritis is now confirmed, with good sensitivity and greater
specificity than rheumatoid factor.
In November, at the International Trade Fair, MEDICA, we announced details of
our collaboration with Abbott Laboratories which has been branded AxSYM(R) xtra.
A range of new high value markers which we will develop and manufacture will be
launched over the next two years and beyond, including assays for anti-CCP, and
HoloTC. Other tests in the pipeline include glycated haemoglobin (HbA1c), to
monitor diabetic compliance, intact PTH and Vitamin D for abnormalities of
calcium and bone metabolism and renal disease, and D-dimer for detection of deep
vein thrombosis. This contract also allows us to capitalise on the potential of
other already established high volume markers not yet available on the AxSYM(R)
system. AxSYM(R) is one of the most successful automated immunoassay platforms,
with over 17,000 instruments in place worldwide. Our access to AxSYM(R)
instruments will not only substantially contribute to revenues over the next 10
years and beyond, but also give us brand recognition, particularly for our own
unique markers, in an area where own-brand labelling by large laboratory
instrument suppliers such as Roche, Bayer and Abbott has dominated up till now.
We recognise that it is essential to work with the major in vitro diagnostics
(IVD) companies in order to ensure the widest commercialisation of our key
markers as these companies control the majority of the instruments installed and
therefore dominate the laboratory diagnostics market. The validity and success
of this strategy has become increasingly evident and our skills in adapting
assays to automated instrument platforms are now being sought by many of these
large diagnostic organisations for OEM contracts for our own novel innovative
markers as well as markers which are not proprietary to Axis-Shield.
Point-of-Care Division
Consolidated revenues were #18.3 million compared to #17.8 million in 2003,
representing an increase of 3.2%, or 9.7% at constant currency rates. In
Norwegian Kroner (NOK) the division experienced year on year growth of 12.9%.
The adverse currency effect reflects the weakness of the NOK during the earlier
part of the year.
The availability of tests that can be performed quickly and accurately in
doctors' surgeries is an increasingly important part of better clinical
practice. New technology coupled with sophisticated software is facilitating the
availability of diagnostic information to healthcare professionals in a
near-patient setting, thus directly influencing and benefiting patient
management and reducing overall healthcare costs. Over the past decade
Axis-Shield's NycoCard(TM) system has capitalised on this with several tests,
including CRP and HbA1c (for monitoring diabetic compliance). NycoCard(TM) has
been particularly successful in Northern European markets and in Switzerland,
where the use of point-of-care testing is more established, as well as in
developing countries where there are geographical constraints on centralised
laboratory testing services. The NycoCard(TM) technology has some limitations
regarding menu expansion and because it does not employ a fully automated
process the important CLIA-waiver status in the US, permitting use by
non-laboratory professionals, is not attainable.
Our new AFINION(TM) point-of-care system was launched and demonstrated at the
international MEDICA exhibition in Dusseldorf at the end of November, where it
attracted much interest. This development will drive our PoC business and the
branding of Axis-Shield and AFINION(TM) in the near-patient hospital and doctors'
office environment. Early market reaction to AFINION(TM) has been most
encouraging, particularly as our versatile novel detection technology allows us
to offer a menu of tests using the same standardised procedure, including
analytes traditionally measured either by immunoassay or by clinical chemistry
technology.
HbA1c, the first test which we have developed for use on AFINION(TM), is working
well and the assembly line for reagent cartridges is now fully operational in
Oslo. A second line allowing a fourfold increase in output will be installed in
mid-2006. Early external clinical evaluations of AFINION using HbA1c (to monitor
diabetic treatment compliance) have shown the system is quick, easy-to-use and
very accurate. The appointment of John Sperzel, formerly Vice President of
Marketing and Business Development for Near Patient Testing at Bayer
Diagnostics, to head up our US operations has facilitated several options for
AFINION(TM) in this major market and we will finalise our US distribution plans
shortly. Outside the USA we have been approached by many companies seeking
AFINION(TM) distribution rights and we have recently signed exclusive arrangements
in Switzerland and Japan.
Focussing our Oslo operations into this Division has improved efficiency and we
have seen tangible benefits in our AFINION(TM) project. We believe the system
represents a major advance in the marketplace which is increasingly receptive to
the need for rapid and reliable near patient testing. Previewing the system at
the July 2004 annual meeting of the American Association of Clinical Chemistry
attracted much interest. Using the system, we were able to demonstrate accurate
fully automated HbA1c testing in three minutes in a number of volunteers. The
base patented technology we employ to measure this analyte is the same as that
used in the NycoCard(TM) version of the test, which uses a blue boronic acid
derivative. This substance attaches itself to the glucose segment of red
haemoglobin, with the amount of glycosylation of the haemoglobin determined by
measurement of the ratio of red to blue colour. In addition to the existing
AFINION(TM) HbA1c test, we intend to launch tests for CRP and ACR (adenine/
creatinine ratio used to measure renal function) during 2005, together with PT
(prothrombin to measure anticoagulant efficacy), where our experience in selling
conventional coagulation reagents will prove invaluable. HsCRP (for
cardiovascular risk) and homocysteine are scheduled for launch in 2006. FDA
marketing approval for the HbA1c test will be sought in early 2005, followed by
an application for CLIA-waiver (to facilitate widespread doctors' office use)
later in the year. Additional analytes to the AFINION(TM) system menu will be
incorporated by simple software upgrades on the instrument.
Our NycoCard(TM) business remains strong with our instrument base now increased
to over 14,000. We are still seeing good growth in some export markets,
particularly China, where the nationwide project to investigate utility of the
NycoCard(TM) HbA1c test in diabetics continues. Our distributor in China has
signed an agreement with the Chinese Diabetic Association for the use of the
NycoCard(TM) system in a substantial clinical trial that in its first phase will
involve 200 sites and around 100,000 patients. This could eventually lead to
our tests for HbA1c and U-albumin being used routinely to monitor the estimated
population of more than 40 million Chinese diabetics. Volume sales of
NycoCard(TM) HbA1c kits were up 24% in 2004 compared to the previous year with
the complementary NycoCard(TM) U-albumin kit (also used in diabetes) up by 63%.
Also, despite increased competition, we maintained our dominant position with
NycoCard(TM) CRP. New markets for NycoCard(TM) during 2004 included several
countries in South America and the Middle East.
There is an increasing demand for key diagnostic parameters to be tested in the
presence of the patient to ensure optimal patient management. This is especially
important where management might involve the prescribing of specific
pharmaceuticals such as antibiotics, as unnecessary intake of these drugs is
leading to reduced effectiveness against many pathogens. In such a case good
clinical practice should encourage the use of our highly successful NycoCard(TM)
CRP test, which empowers general practitioners to differentiate between
bacterial and viral infections at the point of care and thus to decide whether
antibiotic treatment is appropriate. We are responding to the growth of this new
discipline, often known as "theranostics", by building links with major
pharmaceutical companies in areas where our tests can be used to influence
prescribing decisions. Another example of this is the use of our anti-CCP assay
in the early detection of rheumatoid arthritis. This is very important in the
effective use of the new generation of anti-rheumatic drugs and the control of
disease progression, and therefore an anti-CCP test is a very attractive
candidate assay for the AFINION(TM) instrument system.
Direct Distribution
Sales in the Nordic countries through Medinor reached #16.7 million for third
party products in 2004, against #16.1 million in 2003, an increase of 4%. Total
sales, including Axis-Shield products, reached #25.1 million on a constant
currency basis, representing a 7% increase over the previous year. Around 50% of
Medinor sales are from IVD and related products with the rest coming from
general medical devices. Medinor is a pan-Nordic distributor, with over two
thirds of sales from Norway. The State takeover of hospitals in Norway has made
for difficult and competitive trading conditions but Medinor is well positioned
and in 2004 achieved its targeted 5% net profit margin. Medinor has begun
commercialisation of AFINION(TM) in the key Nordic markets, where PoC testing
in the doctors' office is well established.
UK sales reached #2.1 million (2003: #2.3 million). #1.3 million of this figure
was from third party distributed products.
Plasmatec, our Dorset-based subsidiary selling mostly infectious disease assays
and low cost commodity diagnostics to developing countries, achieved sales of #2
million, an increase of 8% over the corresponding period last year.
These distribution businesses are valuable to us, not only because they continue
to grow with both Axis-Shield and third party distribution, but because they
also allow us to maintain direct contact with our end-user customer base.
Board
Earlier in the year we strengthened the Board by appointing Olav Steinnes, Head
of our Point-of-Care Division, as a new Executive Director and Linda McGoldrick
as a new Non-Executive Director. To strengthen the Board further we have
appointed Bay Green as a Non-Executive Director. Bay is a fellow of the ICA and
a member of the Securities Institute with extensive experience in corporate
finance. He is currently a Vice Chairman of Dresdner Kleinwort Wasserstein and a
Non-Executive Director of Invensys PLC and RPC Group PLC. We look forward to his
valuable input during this important period of growth for Axis-Shield.
Summary and Outlook
2004 has been another solid year of progress for Axis-Shield with strong
performances from all divisions. The first AFINION(TM) instruments have been
placed and we look forward to the further roll-out of AFINION(TM) in the coming
months. This is expected to significantly augment the future sales of our
Point-of-Care Division. We anticipate further growth of the homocysteine market,
particularly in risk prediction of cardiovascular and neurodegenerative disease,
as the US market stabilises with the resolution of patent issues. We expect
increased demand for our other novel markers such as anti-CCP, coupled with
Abbott OEM products such as BNP. Our AxSYM(R) xtra programme is scheduled to
deliver as planned, with first launches targeted for later in 2005 and this will
create strong growth for the Laboratory Division over the coming years. Our
distribution companies have performed well and represent an excellent platform
for rapid commercialisation of our new products in our home markets. We expect
to maintain a positive cash flow and strong balance sheet, particularly as we
continue to reduce our external R&D spend, and we believe these factors will
come together over the coming years to produce strong growth, profitability and
increasing shareholder value.
Nigel Keen, Chairman
3 March 2005
Consolidated Profit & Loss Account
For the year ended 31 December 2004
Notes 2004 2003
#000 #000
Turnover - Continuing Operations 2 52,288 50,327
Cost of Sales (24,399) (25,163)
_____ _____
Gross Profit 27,889 25,164
Other operating expenses (19,156) (19,127)
_____ _____
Operating Profit before Research & Development and 8,733 6,037
Exceptional costs
Research & Development 2
Point of Care (internal) (3,189) (2,608)
Point of Care (external) (2,850) (5,655)
Lab Division (internal) (3,709) (4,271)
Lab Division (external) (271) (10,019) (345) (12,879)
_____ _____
Operating Loss after Research & Development (1,286) (6,842)
Exceptional operating expenses - (2,230)
_____ _____
Operating Loss - Continuing operations 2 (1,286) (9,072)
Exceptional - gain on disposal of Autoimmune business - 2,042
_____ _____
Loss on Ordinary Activities before Interest and Taxation (1,286) (7,030)
Net Interest receivable 98 303
_____ _____
Loss on Ordinary Activities before Taxation (1,188) (6,727)
Taxation (51) -
_____ _____
Loss for the Financial Year after Taxation (1,239) (6,727)
_____ _____
Loss per ordinary 35p share 3
Basic (2.55p) (13.86p)
Fully diluted (2.55p) (13.86p)
Earnings before interest, taxation, depreciation and amortisation ("EBITDA")
Loss on Ordinary Activities before Interest and Taxation (1,286) (7,030)
Depreciation 1,397 2,052
Goodwill amortisation 488 518
Intangible asset amortisation 1,637 1,507
_____ _____
EBITDA 2,236 (2,953)
_____ _____
Statement of Total Recognised Gains and Losses
for the year ended 31 December 2004
2004 2003
#000 #000
Total recognised losses after tax for the financial year (1,239) (6,727)
Exchange gain/(loss) on retranslation of subsidiary results and 422 (1,924)
balances
_____ _____
Total recognised loss relating to the financial year (817) (8,651)
_____ _____
Reconciliation of Movement in Shareholders' Funds
for the year ended 31 December 2004
2004 2003
#000 #000
Loss for the financial year (1,239) (6,727)
Foreign exchange gains/(losses) 422 (1,924)
_____ _____
Net movement (817) (8,651)
Opening shareholders' funds 38,836 47,487
_____ _____
Closing shareholders' funds 38,019 38,836
_____ _____
Note of Historical Cost Losses
for the year ended 31 December 2004
There is no material difference between the loss on ordinary activities before
taxation and the retained loss for the financial year stated above, and their
historical cost equivalents.
Balance Sheets
At 31 December 2004
Group Group Company Company
2004 2003 2004 2003
#000 #000 #000 #000
Fixed Assets
Intangible 16,737 18,505 - -
Tangible 10,606 7,953 - -
Other investments 98 98 - -
Investments in subsidiary undertakings - - 62,933 62,933
______ ______ ______ ______
27,441 26,556 62,933 62,933
Current Assets
Stocks 8,004 8,162 - -
Debtors 9,830 9,426 6,952 6,697
Cash at bank 11,940 10,143 362 433
______ ______ ______ ______
29,774 27,731 7,314 7,130
Creditors: Due within one year 13,514 10,662 - -
______ ______ ______ ______
Net Current Assets 16,260 17,069 7,314 7,130
______ ______ ______ ______
Total Assets Less Current
Liabilities 43,701 43,625 70,247 70,063
Creditors: Due after one year 5,255 3,771 35 -
Provision for Liabilities and Charges 427 1,018 - -
______ ______ ______ ______
Net Assets 38,019 38,836 70,212 70,063
______ ______ ______ ______
Capital and Reserves
Called up share capital 16,987 16,987 16,987 16,987
Share premium account 49,189 49,189 49,189 49,189
Capital redemption reserve 244 244 244 244
Merger reserve 17,922 17,922 4,005 4,005
Profit and loss account (46,323) (45,506) (213) (362)
______ ______ ______ ______
Equity Shareholders' Funds 38,019 38,836 70,212 70,063
______ ______ ______ ______
Consolidated Cash Flow Statement
For the year ended 31 December 2004
Note 2004 2003
#000 #000
Net cash Inflow/(Outflow) from Operating Activities A 3,359 (3,033)
_____ _____
Returns on Investment and Servicing of Finance
Interest received 240 358
Interest paid (142) (55)
_____ _____
Net Cash Inflow from Returns on Investment and Servicing 98 303
of Finance
_____ _____
Taxation (38) -
Capital Expenditure and Financial Investment
Purchase of tangible fixed assets (2,670) (3,549)
Purchase of intangible fixed assets (201) (1,061)
Proceeds of sale of tangible fixed assets 31 5
_____ _____
Net Cash Outflow from Capital Expenditure and Financial (2,840) (4,605)
Investment
_____ _____
Acquisitions and Disposals
Disposal of subsidiary business/undertakings - 1,650
_____ _____
Net Cash Inflow/(Outflow) Before Use of Liquid Resources 579 (5,685)
and Financing
Financing
Finance received on purchase of tangible fixed assets D 1,121 1,439
Hire purchase repayments D (40) (23)
_____ _____
Net Cash Inflow From Financing 1,081 1,416
_____ _____
Increase/(Decrease) in Cash C 1,660 (4,269)
_____ _____
Notes to the Consolidated Cash Flow Statement
For the year ended 31 December 2004
A. Reconciliation of Operating Loss to Net Cash from Operations
2004 2003
#000 #000
Operating loss (1,286) (9,072)
Depreciation of tangible fixed assets 1,397 2,052
Amortisation of intangible fixed assets 2,125 2,025
Reverse lease premium amortised in period - (16)
(Gain)/Loss on disposal of fixed assets (8) 1
Provision for investment 2 406
(Decrease)/Increase in provisions (575) 651
Decrease in stock 260 807
Increase in debtors (249) (127)
Increase in creditors 1,693 240
_____ _____
Net Cash inflow/(outflow) 3,359 (3,033)
_____ _____
B. Analysis of Net Funds
2003 Cashflow Non-Cash Exchange 2004
#000 #000 Items Movements #000
#000 #000
Cash at bank 10,143 1,639 - 158 11,940
Bank overdraft (37) 21 - - (16)
_____ _____ _____ _____ _____
Net Cash 10,106 1,660 - 158 11,924
Bank Loans < 1 year - (140) - 5 (135)
Bank Loans > 1 year - (981) - 37 (944)
Hire Purchase (1,405) 40 (1,177) (180) (2,722)
_____ _____ _____ _____ _____
Net funds 8,701 579 (1,177) 20 8,123
_____ _____ _____ _____ _____
C. Reconciliation of Net Cash Flow to Movements in Net Funds
2004 2003
#000 #000
Increase/(Decrease) in cash in the period 1,660 (4,269)
Cash outflow from changes in net debt (1,081) (1,416)
_____ _____
Movement in net funds resulting from cashflows 579 (5,685)
Inception of finance leases (1,177) -
Foreign exchange adjustment 20 (347)
_____ _____
Movement in net funds (578) (6,032)
Opening balance 8,701 14,733
_____ _____
Closing balance 8,123 8,701
_____ _____
D. Analysis of Movement in Asset Financing
2004 2003
Hire Purchase #000 #000
Opening balance 1,405 23
Inception of new hire purchase agreements 1,177 -
Finance received on purchase of tangible fixed assets - 1,439
Foreign exchange adjustments 180 (34)
Repayments made (40) (23)
_____ _____
Closing balance 2,722 1,405
_____ _____
2004 2003
Bank Loans #000 #000
Opening balance - -
Finance received on purchase of tangible fixed assets 1,121 -
Foreign exchange adjustments (42) -
_____ _____
Closing balance 1,079 -
_____ _____
Notes to the Preliminary Results
For the year ended 31 December 2004
1. The financial statements for Axis-Shield plc have yet to be signed for the
year ended 31 December 2004. The financial information set out in the
announcement does not constitute the Company's statutory accounts for the years
ended 31 December 2004 or 31 December 2003. The financial information for the
year ended 31 December 2003 is derived from the statutory accounts for that year
which have been delivered to the Registrar of Companies. The auditors reported
on those accounts; their report was unqualified and did not contain a statement
under either Section 237 (2) or Section 237 (3) of the Companies Act 1985. The
statutory accounts for the year ended 31 December 2004 will be finalised on the
basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting. The report will be sent to
shareholders and will be made available for members of the public at the Group's
registered office, the Technology Park, Dundee DD2 1XA and on our website,
www.axis-shield.com
2. Segmental Analysis
a) Geographically by origin -2004
Operating
Profit
Operating Research & before
Profit before Development Exceptional Operating Net
Turnover R & D Costs Items Profit/(Loss) Assets
#000 #000 #000 #000 #000 #000
United Kingdom 13,143 3,078 2,307 771 771 10,932
Nordic Region 39,145 7,891 7,712 179 179 27,087
_____ _____ _____ _____ _____ _____
52,288 10,969 10,019 950 950 38,019
Corporate Costs - (2,236) - (2,236) (2,236) -
_____ _____ _____ _____ _____ _____
52,288 8,733 10,019 (1,286) (1,286) 38,019
_____ _____ _____ _____ _____ _____
Geographically by origin - 2003
Operating Operating
Profit before Profit
R & D Research & before
& Exceptional Development Exceptional Operating Net
Turnover items Costs Items Profit/(Loss) Assets
#000 #000 #000 #000 #000 #000
United Kingdom 8,591 1,464 2,119 (655) 1,387 12,511
Nordic Region 41,736 6,397 10,760 (6,593) (6,593) 26,325
_____ _____ _____ _____ _____ _____
50,327 7,861 12,879 (7,248) (5,206) 38,836
Corporate Costs - (1,824) - (1,824) (1,824) -
_____ _____ _____ _____ _____ _____
50,327 6,037 12,879 (9,072) (7,030) 38,836
_____ _____ _____ _____ _____ _____
b) Turnover geographically by destination
2004 2003
Total Total
#000 #000
Europe 37,312 38,114
North America 9,342 7,726
Rest of World 5,634 4,487
_____ _____
52,288 50,327
_____ _____
c) Turnover by product area
2004 2004 2003 2003
#000 #000 #000 #000
Point of Care
NycoCard 13,717 13,248
Coagulation 3,440 3,230
Other Point of Care 1,192 1,296
_____ _____
Total Point of Care Products 18,349 17,774
Laboratory Products
Alcohol Related Diseases 1,458 1,629
Homocysteine 6,496 6,812
Infectious Disease 2,643 2,543
BNP 1,775 50
Anti-CCP 936 457
Anti-Tg/TPO 1,050 1,536
Testosterone 268 -
Sirolimus 232 -
Autoimmune 303 1,735
Other 863 506
_____ _____
Total Laboratory Products 16,024 15,268
Distribution of third party products 17,915 17,285
_____ _____
52,288 50,327
_____ _____
The autoimmune portfolio of products was disposed of in 2003 with final product
transfer taking place in the first half of 2004.
3. Loss per Ordinary Share
Loss per ordinary 35p share is calculated on the loss for the year divided by
the weighted average number of shares in issue during the year 48,532,875 (2003:
48,532,875). The loss for the year results in the conversion of potential
ordinary shares having an anti-dilutive effect. In accordance with FRS14 these
have been excluded from the diluted loss per share calculation. Therefore, the
weighted average number of shares in issue on this basis is also 48,532,875
(2003: 48,532,875).
2004 2003
Weighted Weighted
Average No Average No
of Shares of Shares
000 Loss per 000 Loss per
share share
Loss pence Loss pence
#000 #000
Basic loss per share (1,239) 48,533 (2.55) (6,727) 48,533 (13.86)
_____ _____ _____ _____ _____ _____
Fully diluted loss per (1,239) 48,533 (2.55) (6,727) 48,533 (13.86)
share
_____ _____ _____ _____ _____ _____
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UUUCAWUPAGMP
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