RNS Number:0915A
Celsis International PLC
2 November 1999
CELSIS INTERNATIONAL PLC
Interim Results for the Six Months Ended 30th September 1999
Celsis International plc ("Celsis" or "the Company") announces its unaudited
interim results for the six months ended 30th September 1999.
Highlights
* Profit before tax up 236% to #1.1 million (1998: #0.3 million before
exceptional charges; loss of #0.4 million after exceptional charges)
* Earnings per share achieved of 1.03p (1998: loss per share of 0.50p)
* Total revenues up 5% to #8.8 million (1998: #8.4 million) with an
underlying increase of 8% after excluding prior period revenues from the
Connect programme
* Gross margin improves to #5.9 million or 67% of turnover (1998: #5.4
million or 64%) from a focus on higher margin instrument and reagent
sales and from manufacturing efficiencies
* End Screening business unit delivers revenue growth to #4.6 million
(1998: #4.1 million) from instrument revenues up 27% and reagent
revenues up 9%
* Distribution arrangements for systemSURE (registered) restructured from
November 1999
* Disposable hygiene monitor, SpotCheck, successfully launched into
the European food production market
* Sustained growth within Celsis Laboratory Group ("CLG") with revenues up
9% to #3.7 million (1998: #3.4 million)
Commenting on the results Chris Evans, Chairman of Celsis, said:
"This is another period of excellent performance which establishes Celsis as
the pre-eminent supplier of rapid methods products and services. Our
products are accepted and in use throughout the world across a number of
industry sectors. Our traditional strength in dairy continues and we can now
count a substantial proportion of the world's leading consumer products
companies as our customers. Much has been done to turn Celsis around over
the last year and some difficult decisions to change had to be taken. These
results reflect the benefits of those changes but there is still much to be
achieved ahead of us. Our commitment to providing complete, cost effective
solutions to our customers and to offering outstanding service levels remain
undiminished. I am confident that we will meet the growth objectives we
have set ourselves such that we continue to expand profitably and to deliver
shareholder value."
Enquiries:
Celsis International plc Chris Evans, Chairman )
Jack Rowell, Chief Executive ) +44(0)1223 426008
Mark Harris, Finance Director)
Brunswick Group Limited James Garthwaite/
Jessica Shepherd-Smith +44(0)171 404 5959
FINANCIAL REVIEW
Results for the period under review showed strong and improved performance
across the business. Increased sales, improved gross margins and the full
period expense savings from the reorganisation carried out in the summer of
last year all contributed to the sharp increase in profits.
Sales for the six months ended 30th September 1999 grew 5% to #8.8 million
(1998: #8.4 million). Excluding revenues from the Connect research
programme in the prior period, underlying sales revenue grew by 8%. The End
Screening business unit posted the strongest growth where instrument
revenues grew 27% to #1.4 million and reagent revenues grew 9% to #3.2
million (1998: #1.1 million and #3.0 million respectively). Revenues in the
hygiene monitoring unit fell to #0.3 million (1998: #0.5 million). Steps
have been taken to restructure the Company's distribution route to the
hygiene monitoring market to consolidate the Company's position and to
provide a platform for future growth (see "Review of Operations - Hygiene
Monitoring" below). The Celsis Laboratory Group continued to show steady
progress with revenues increasing 9% to #3.7 million (1998: #3.4 million).
Gross margins improved to 67% (1998: 64%) as the Company focused on higher
quality revenues. In the End Screening business unit, in particular, higher
value instruments have been sold, with sales of the Advance instrument up
60%, and reagent sales for personal care product testing rose 32%. Margins
also improved from manufacturing efficiencies as the business grows and from
the reorganisation steps carried out last year.
In the summer of 1998 the Company underwent a substantial reorganisation to
streamline the management hierarchy, to introduce greater accountability and
responsibility and to reduce costs. Although one time exceptional costs
were incurred last year, total expenditure on sales and marketing, general
and administrative and research and development activities has reduced by 6%
to #4.8 million (1998: #5.1 million). These savings have arisen principally
through improved focus within general and administrative and research and
development activities. The stream-lining of the management team and the
tight control over spending also allowed the Company to increase its
effective investment in sales and marketing without increasing the absolute
cost of such activities. As the business grows and increasing attention is
paid to meeting the needs of customers, effective sales and marketing
programmes are essential to accelerate the pace of adoption of the Company's
products and services in both established and key new markets.
The net result is for the Company to report a 236% increase in profit before
tax to #1.1 million (1998: #0.3 million but a loss of #0.4 million after
exceptional costs). Accordingly, earnings per share are 1.03p (1998: loss
per share of 0.50p).
On 28th July 1999 the High Court approved the reduction of the Company's
share premium account which had been passed by shareholders at the Annual
General Meeting held on 29th June 1999. See Note 6 of the financial
information below for further details.
REVIEW OF OPERATIONS
The Company's business continues to be operated as three distinct business
units, each with its own profit centre accountability: End Screening,
Hygiene Monitoring and Celsis Laboratory Group.
End Screening
Total revenues in the period up 14% to #4.6 million (1998: #4.1 million)
Although the number of instruments placed in the period reduced to 61 (1998:
86), instrument revenues increased by 27% to #1.4 million (1998: #1.1
million). A deliberate focus has been placed on the higher value Advance
and Advance Coupe instruments, which represented two-thirds of all
placements. In addition to the successes achieved in selling these
instruments into new dairy territories, particularly the Americas, they are
marketed world-wide as the instrument platform for personal care product and
pharmaceutical companies. A substantial majority of the world's leading
multi-national companies in these sectors are now using Celsis systems for
product release, although significant opportunities for further sales to
these customers exist.
Reagent revenues grew by 9% to #3.2 million from 3.8 million tests (1998:
#3.0 million from 3.5 million tests). Strong growth was achieved in sales
to the personal care product sector as the Company's focus on major global
accounts showed continued success. These sales have also contributed to the
overall increase in gross margins. It is clear, however, that the
challenges in getting newly placed instruments through validation and up to
a full reagent burn are more pronounced in the pcp and pharmaceutical
sectors. To address this, considerable effort is now being focussed on
shortening the validation cycle as this will accelerate the reagent burn and
improve cashflow. To that end, the Company is putting more resource into
technical support, has introduced its own validation documentation and
guides, and has launched computer based training modules.
Geographically, Latin America produced the strongest growth despite the
recent currency turmoil. Sales grew to #0.5 million in the period (1998:
#0.1 million) with 10 new systems placed. Further placement opportunities
in Latin America are good and these sites typically offer high reagent burn
potential. As a result the Company has taken the decision to establish its
own presence in Brazil to provide better support to local operations, to
reduce the end-user price but improve margins through reduced import duties
and to assist the roll out of the Company's products to other Latin American
countries.
Hygiene Monitoring
Total revenues in the period #0.4 million (1998: #0.6 million)
Minimal sales were recorded to Becton Dickinson and Company ("B-D"), the
Company's world-wide distributor for the systemSURE (registered) product
line (1998: #0.1 million). Hygiene monitoring sales by distributors whose
rights pre-dated those of B-D also showed some erosion. Discussions with B-
D to resolve this situation have resulted in an agreement dated 1st November
1999 to restructure the relationship. With effect from 15th November 1999,
B-D will only have rights to sell systemSURE (registered) within the United
States. These rights will be on a non-exclusive basis and will expire on
30th June 2000. This will allow the Company to sell systemSURE (registered)
through its own direct sales force and through its current distributor
network. New distributors will also be sought for territories not presently
covered or where existing routes to market are deemed to be unsuitable.
Manufacturing for the Company's disposable hygiene monitoring device, Celsis
SpotCheck, has been established in the Company's facilities in the
Netherlands and the product was launched into the European food production
market on 1st October 1999. Initial response has been very encouraging and
Kleencare Hygiene, our distributor, has called forward on its supply orders.
The Company's partner for the Far East has also commenced test market
evaluations and new distribution partners are currently being sought for
other food production territories and for the food services market.
The launch of SpotCheck and the resolution of the Company's distribution
arrangements for the instrument based hygiene monitoring market mark a new
start to the Company's approach to hygiene monitoring generally. The
Company views the hygiene monitoring market as one where its core
competencies are highly relevant and detailed strategies for this business
unit will now be developed across the entire product range.
Celsis Laboratory Group ("CLG")
Total revenues in the period #3.7 million (1998: #3.4 million)
CLG produced another period of solid growth with revenues growing by 9%.
CLG continues to improve the level of its service offering and is the only
out-source provider in the United States offering a ten day turn-around time
as standard. Concurrent with improving the level of service, major steps
have been taken to improve the quality of the revenue base. Revenue from
less dependable one-off project work has been halved and revenues from other
less stable customers have been replaced. Accordingly the underlying growth
in the base business was 17%. This shift in the revenue mix has also
allowed gross margins to be improved from 49% last year to 50% this year.
In common with End Screening, CLG has also exercised strict control over its
cost structure which resulted in a small reduction in total spend.
Increased investment in sales and marketing activities have been funded from
the benefits of the business integration of the New Jersey and St. Louis
facilities carried out last year and from reduced spending elsewhere. As a
result, the CLG business unit delivered a 75% increase in its profit
contribution to the group.
YEAR 2000
The Company established a team in 1998 to review the potential implications
of the Year 2000 issue on the business. A full assessment has now been
finalised and as a result of this the Directors consider that there will not
be a material impact on the operations of the business. All instrumentation
within the Company's current product range is Year 2000 compliant.
PROSPECTS
Prospects for growth across the business remain strong. The objectives to
be achieved and the challenges to be overcome are now more clearly
understood than at any time in the past.
In End Screening, the Company's systems have gained increasing acceptance
across a number of industry sectors and, most importantly, within major blue
chip multi-nationals. A programme to roll out additional systems in these
organisations is underway while the Company continues to penetrate new
territories in its traditionally strong markets such as dairy. Ensuring
that newly placed instruments move through validation as quickly as possible
is now the major challenge facing the business and a variety of actions have
been implemented to address this.
The launch of SpotCheck and the re-launch of systemSURE (registered) by the
Company mark a watershed in the Company's approach and commitment to the
hygiene monitoring market. The ability to offer customers both disposable
and instrument based systems provides the Company with a unique product
offering. Moreover, the market potential for SpotCheck is very significant
in its own right although it is recognised that this will take some time to
develop and the choice of distribution partners will be critical to its
overall success.
CLG's programme to improve the quality of its customer base is set to
continue. In the short term, this may serve to limit the absolute rate of
growth of the business but is expected to provide a more stable and reliable
profit growth profile in the longer term. At the same time, CLG will
continue to seek ways to improve its level of service as the principal area
of competitive advantage. Opportunities to widen the service offering are
also being evaluated.
The Company now has a clear focus on its market objectives. With the
management and cost structures now in balance with the growth opportunities
and with on-going investments in strategic sales and marketing initiatives
and in research and development the prospects for continued growth and
improved performance remain strong.
INDEPENDENT REVIEW REPORT TO CELSIS INTERNATIONAL PLC
Introduction
We have been instructed by the Company to review the financial information
set out on pages 6 to 10 and we have read the other information contained in
the interim report for any apparent mis-statements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein,
is the responsibility of and has been approved by the directors. The
Listing Rules of the London Stock Exchange require that the accounting
policies and presentation applied to the interim figures should be
consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of group management and applying analytical procedures
to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have
been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with Auditing Standards and therefore provides
a lower level of assurance than an audit. Accordingly we do not express an
audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 September 1999.
PricewaterhouseCoopers
Chartered Accountants
Cambridge
2nd November 1999
Celsis International plc
Unaudited Consolidated Profit and Loss Account
For the six month period ended 30 September 1999
Six mths Six mths Year to
to 30 to 30 31 Mar
Sep Sep
999 1998 1999
Notes #'000 #'000 #'000
_______ _______ _______
Turnover 8,751 8,360 17,622
Cost of sales (2,891) (2,994) (6,011)
_______ _______ _______
Gross profit 5,860 5,366 11,611
Sales & marketing
expenses (3,246) (3,300) (6,936)
General & administrative
expenses (856) (862) (1,703)
Research & development
expenditure (691) (924) (1,391)
Exceptional costs (759) (1,241)
_______ _______ _______
Operating profit /
(loss) 1,067 (479) 340
Interest receivable &
similar income 32 64 126
Interest payable (44) (30) (67)
_______ _______ _______
Profit / (loss) on
ordinary activities
before taxation 1,055 (445) 399
Tax on profit / (loss)
on ordinary activities - (51) (47)
_______ _______ _______
Retained profit / (loss)
for the period 1,055 (496) 352
======= ======= =======
Earnings / (loss) per
Ordinary Share 1 1.03p (0.50)p 0.35p
Diluted earnings/(loss)
per Ordinary Share 1 1.02p (0.49)p 0.35p
IIMR earnings / (loss)
per Ordinary Share 1.03p (0.50)p 0.35p
Statement of total recognised profits /
(losses)
Profit / (loss) for the financial period 1,055 (496) 352
Currency translation differences on foreign
currency net investments (267) 63 378
______ ______ ______
Total gains / (losses) recognised in the
period 788 (433) 730
====== ====== ======
Celsis International plc
Unaudited Consolidated Balance Sheet
at 30 September 1999
At 30 At 30 Sep At 31 Mar
Sep 1998 1999
1999
Notes #'000 #'000 #'000
_____ _______ ________ ________
Fixed assets
Intangible assets 429 449 441
Tangible assets 4,054 3,979 4,076
Investments 10 52 8
_______ ________ ________
4,493 4,480 4,525
Current assets
Stocks 2,426 2,026 2,239
Debtors: amounts falling due
after one year 377 - 644
Debtors: amounts falling due
within one year 7,382 5,259 6,081
Cash at bank and in hand 907 2,180 1,887
_______ ________ ________
11,092 9,465 10,851
Creditors: amounts falling due
within one year (2,092) (2,242) (2,615)
_______ ________ ________
Net current assets 9,000 7,223 8,236
Total assets less current
liabilities 13,493 11,703 12,761
Creditors: amounts falling due
after more than one year (601) (636) (658)
_______ ________ ________
Net assets 12,892 11,067 12,103
======= ======== ========
Capital and reserves:
Called up share capital 1,029 997 1,026
Shares to be issued - 29 -
Share premium account 6 13,961 42,060 42,060
Profit and loss account 5 (3,139) (33,060) (32,024)
Reserve arising on consolidation
1,041 1,041 1,041
_______ ________ ________
Equity shareholders' funds 12,892 11,067 12,103
======= ======== ========
Celsis International plc
Unaudited Cashflow Statement
For the six month period ended 30 September 1999
Six mths Six mths Year to
to to 31 Mar
30 Sep 30 Sep 1999
1999 1998
Notes #'000 #'000 #'000
_____ _______ _______ _______
Net cash outflow from continuing
activities 2 (191) (1,016) (1,078)
Returns on investments and servicing
of finance
Interest received from investments 11 64 126
Interest paid (33) (30) (67)
_______ _______ _______
(22) 34 59
_______ _______ _______
Taxation
Corporation tax paid - (113) (114)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (548) (314) (827)
Sale of tangible fixed assets 4 10 14
Purchase of intangible fixed assets (3) (20) (27)
_______ _______ _______
(547) (324) (840)
Acquisitions
Deferred consideration paid in
respect of prior year acquisition - - (69)
Cash outflow before management of
liquid resources and financing (760) (1,419) (2,042)
Management of liquid resources
Sale of current asset investments - 2,415 2,415
Financing
New finance leases - - 126
Repayment of principal under finance
leases (28) (21) (53)
Repayment of loan principal (9) (32) (43)
_______ _______ _______
(37) (53) 30
======= ======= =======
(Decrease)/increase in cash in the
period (797) 943 403
======= ======= =======
Notes to the Accounts
For the six month period ended 30 September 1999
Six mths to Six mths to Year to
30 Sep 30 Sep 31 Mar
1999 1998 1999
___________ ___________ ___________
1. Basic & diluted profit /
(loss) per Ordinary Share
Profit / (loss) on ordinary
activities after taxation
(#'000) 1,055 (496) 352
Basic weighted average number
of Ordinary Shares in issue 102,725,398 99,441,217 100,970,414
Diluted weighted average number
of Ordinary Share in issue 103,433,817 101,672,574 100,970,414
=========== =========== ============
2. Reconciliation of operating
profit to net cash outflow
from continuing operating
activities #'000 #'000 #'000
___________ __________ ___________
1,067 280 1,581
Exceptional costs - (759) (1,151)
Depreciation of tangible fixed
assets 478 492 910
Non-cash distribution of
shares held by trustee of
Employee Share Ownership Trust - 23 -
Provision for change in value
of shares held by Employee
Share Ownership Trust 2 - (6)
Amortisation of intangible
assets 15 15 30
(Profit) on disposal of
tangible fixed assets (4) - -
(Increase) in debtors (1,034) (179) (1,645)
(Increase) in stocks (187) (76) (289)
(Decrease) in trade & other
creditors (528) (812) (508)
___________ __________ ___________
Net cash outflow from
continuing operating activities (191) (1,016) (1,078)
=========== ========== ===========
3. Reconciliation of net cash
flow to movement in net funds
(Decrease)/increase in cash in
the period (797) 943 403
Cashflow from sale of current
asset investments - (2,415) (2,415)
Repayment of finance lease and
loan obligations 37 53 96
___________ __________ ___________
Movement in net funds in the
period (760) (1,419) (1,916)
New finance leases - (116) (126)
Exchange adjustment (168) 34 249
Net funds at beginning of the
period 1,302 3,095 3,095
___________ __________ ___________
Net funds at end of the period
(see Note 4) 374 1,594 1,302
=========== ========== ===========
4. Analysis of net funds
At Non-Cash Exchange At end
start Cashflow Changes Dif- Of
of ferences period
period
#'000 #'000 #'000 #'000 #'000
Six months ended 30
September 1999
Cash at bank and in
hand 1,887 (797) - (183) 907
Current asset
investments - - - - -
Loans (363) 9 - 9 (345)
Finance leases (222) 28 - 6 (188)
______ _________ _______ ________ ______
1,302 (760) - (168) 374
====== ========= ======= ======== ======
Six months ended 30
September 1998
Cash at bank and in
hand 1,213 943 - 24 2,180
Current asset
investments 2,415 (2,415) - - -
Loans (390) 32 - 8 (350)
______ _________ _______ ________ ______
Finance leases (143) 21 (116) 2 (236)
3,095 (1,419) (116) 34 1,594
====== ========= ======= ======== ======
Year ended 31 March
1999
Cash at bank and in
hand 1,213 403 - 271 1,887
Current asset
investments 2,415 (2,415) - - -
Loans (390) 43 - (16) (363)
Finance leases (143) 53 (126) (6) (222)
______ _________ _______ ________ ______
3,095 (1,916) (126) 249 1,302
====== ========= ======= ======== ======
5. Profit and loss account Six mths Six mths Year to
to 30 to 30 Sep 31 Mar
Sep 1998 1999
1999
#'000 #'000 #'000
________ ________ ________
Retained loss brought forward (32,024) (32,620) (32,620)
Retained profit / (loss) for the period 1,055 (496) 352
Reduction in share premium 28,100 - -
Goodwill written off (3) (7) (134)
Exchange difference (267) 63 378
________ ________ ________
Retained loss carried forward (3,139) (33,060) (32,024)
======== ======== ========
6. Reduction of Share Premium Account
On 29th June 1999 the Company passed a special resolution for the
proposed reduction of the Company's share premium account by #28,100,000.
A successful application was made to the High Court and the proposed
Special resolution was confirmed by the Court on 28th July 1999. The
effect of this resolution was to clear the accumulated deficit on the
Company's profit and loss account reserve.
7. Preparation of preliminary statement
The abridged figures for the year ended 31 March 1999 are from the
accounts of Celsis International plc for that year. These accounts have
been reported on by the Company's auditors and delivered to the Registrar
of Companies. The report of the auditors was unqualified and did not
contain a statement under section 237 of the Companies Act 1985.
The figures for the period to 30 September 1999 are consolidated figures
for Celsis International plc. The foregoing financial information, which
has been prepared on the basis of the accounting policies set out in
Celsis International plc's accounts for the year to 31 March 1999, does
not amount to full accounts within the meaning of section 240 of the
Companies Act 1985 (as amended).
8. Dividend
The Directors have not declared an interim dividend.
END
IR BFFLBKFKFFKV
Celadon Pharmaceuticals (LSE:CEL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Celadon Pharmaceuticals (LSE:CEL)
Historical Stock Chart
From Jul 2023 to Jul 2024
