RNS Number:5049E
Celsis International PLC
27 October 2004
CELSIS INTERNATIONAL PLC
Interim Results for six months to 30 September 2004
Strong rise in profits and turnover
Embargoed until 7:00am 27 October 2004
Celsis International plc, the microbial detection and analytical services
company, today announces its Interim results for the six months to 30 September
2004.
Financial Highlights:
* Profit before tax up 27.1% to $2.72 million (H1 2003: $2.14 million).
* Turnover up 12.7% to $15.19 million (H1 2003: $13.48 million).
* Product Group revenues up 16.4% to $7.80 million (H1 2003: $6.70 million)
and Laboratory Group revenues up 9.0% to $7.40 million (H1 2003: $6.78
million).
* Gross margins improve to 65.0% (H1 2003: 64.4%).
* Earnings per share increased 21.2% to 2.40c (H1 2003: 1.98c) on a
comparable pre-tax basis, as last year's EPS of 2.57c and this year's EPS
of 3.11c continue to benefit from tax losses brought forward.
* Strong cash position increased to $15 million (H1 2003: $11.4 million
including short term investments).
Operational Highlights:
* Product Group's strong global growth continues at 16.4% with Personal Care
and Pharmaceutical business unit revenues up 27.4% and Dairy unit revenues
up 9.0%.
* Product Group launches RapiScreen(TM) Biologics testing system for vaccine
manufacturers to screen for microbial contamination in cell culture lines.
* Laboratory Group rebounds with revenues up 9.0% with orders from a broad
base of pharmaceutical customers.
Jay LeCoque, Chief Executive Officer of Celsis, commented:
"I am pleased to report encouraging growth in both revenues and profits in this
year's interim results. Profits are up 27% on organic revenue growth of 13%.
Our Product Group continues its rapid global expansion across all market
segments. Our Laboratory Group secured a significant rebound in orders across a
broad range of our pharmaceutical customer base."
"Our focus on providing customers with superior products and exceptional service
continues to reinforce our position as the leading supplier in our respective
industries. We remain confident that we have the right strategies in place to
continue our expansion with sustained earnings growth. I look forward to
reporting further strong progress at the year end."
Enquiries:
Celsis International plc Tel: 01638 600 151
Jay LeCoque, Chief Executive Officer Tel: 020 7831 3113
Christian Madrolle, Finance Director on 27 October
Financial Dynamics Tel: 020 7831 3113
David Yates
Lucy Briggs
Notes to editors
Celsis International plc
Celsis International plc is a microbial detection and analytical services
company operating through two divisions, the Product Group and the Laboratory
Group.
Using its proprietary enzyme technology, the Product Group is the world leader
in the provision of diagnostic systems for the rapid detection of microbial
contamination. It works in close collaboration with many of the world's leading
pharmaceutical, personal care and beverage companies, ensuring the safety and
quality of products bound for consumers. The Laboratory Group provides
outsourced analytical testing services to pharmaceutical companies to ensure the
stability and chemical composition of their products.
In addition to ensuring product quality and safety for consumers, both divisions
have the capacity to deliver substantial cost savings to Celsis' customers. By
reducing the time it takes to test and release raw materials and finished goods
to the market place, Celsis' products facilitate increased manufacturing
productivity and improved supply chain management.
Celsis International plc is listed on the London Stock Exchange (CEL.L).
Further information can be found on the Company's website at www.celsis.com.
Chairman's & Chief Executive's Review
Introduction
During the first half of 2004 we both expanded our Product Group and secured a
significant rebound in our Laboratory Group business. We have continued to
better co-ordinate our customer facing teams from both Groups to leverage
opportunities within our respective core customer bases.
Our Product Group continues to grow by both selling to existing customers and
expanding our customer base. We are working in close collaboration with key,
world-leading pharmaceutical, personal care and beverage companies to expand our
range of rapid detection testing systems. As announced in our 2004 preliminary
results, we continue to work with leading vaccine manufacturers to provide a
rapid screen for microbial contamination within their cell culture lines. We
expect the recent news regarding the contamination of the world flu vaccine
supply to generate additional interest and demand for our new RapiScreen(TM)
Biologics testing system.
Our Laboratory Group delivered its strongest revenue growth in years by
leveraging a strong turn-around in our major pharmaceutical customer spending
and by restructuring around customer needs to secure more contract business from
both new and existing customers. Our customer focused programmes and technology
lead has reduced the number of competitive lab service offerings. Our
investments in Philip Crosby Quality training, NuGenesis data management
systems, and updated cGMP training are beginning to show the desired results.
For the six-months ended 30 September 2004, we are pleased to report robust
profit growth on double-digit revenue gains. Group revenue increased 12.7% to
$15.19 million (H1 2003: $13.48 million) and profit before tax increased 27.1%
to $2.72 million (H1 2003: $2.14 million). We have continued to both build our
cash position whilst investing in our business growth areas. We are on track
for a strong outcome for the full year and are confident in the long-term future
prospects for the Company.
Product Group
The Product Group, which provides diagnostic systems to ensure the safety and
quality of products bound for consumers, represented 51% of Group revenues this
first half. Revenues increased ahead of our expectations by 16.4% to $7.8
million (H1 2003: 6.7 million). Instrument sales were particularly strong to
our Global Corporate Accounts Management (GCAM) customer base, which bodes
extremely well for future reagent sales, although reagents and consumables
continue to represent over 80% of Product Group revenues.
Our Personal Care and Pharmaceutical business unit revenues increased 27.4% and
represented 63% of Product Group revenues this half. We secured strong business
unit growth in all regions, particularly in Europe and Asia, as more of our
major global customers employ the Celsis testing systems, for their finished
product screening, at their global manufacturing facilities.
During the period, we also gained several European-based global customers. These
customers were drawn to the significant cost savings and productivity gains
realised through the use of Celsis testing systems throughout their global
operations. In addition, we have also added Natura, the largest Brazilian owned
personal care and cosmetics company in Brazil, to our growing list of global
customers that are initiating their rapid testing utilising AKuScreen(TM).
We are also continuing the successful customer conversion to AKuScreen(TM) in
both the Personal Care and Pharmaceutical sectors and are working with the
Defence Science and Technology Laboratory (Dstl) in the UK on additional
applications for AK in the Pharmaceutical sector. Our AK technology provides
significant advantages in both speed to result and sensitivity when compared to
standard ATP testing and is now our primary test offering into both the Personal
Care and Pharmaceutical industries.
Our Dairy business unit revenues increased 9.0% following the successful launch
of our InnovateTM, Innovate.imTM and newly patented RapiScreen(TM) Dairy testing
system. This technically advanced, as well as extremely easy-to-use, testing
system is quickly becoming the new industry standard in the Dairy industry. We
are also leveraging the new InnovateTM and Innovate.imTM and combining it with
our new RapiScreen(TM) Beverage testing system into our rapidly growing non-
Dairy Beverage business and will soon be in a position to announce significant
new business in this area.
We are currently in discussions with some of the world's leading clinical
diagnostics companies to expand both our product range and technology base for
rapid microbial detection beyond ATP bioluminescence. We believe that there are
some technologies that have been developed for use in clinical diagnostics that
could be very useful in the industrial testing arena. Our understanding of this
customer base and our ability to leverage our global sales channel provide us
with unique advantages in the development and commercialisation of such new
product offerings.
Laboratory Group
The Laboratory Group, which provides outsourced analytical testing services to
the pharmaceutical industry to ensure the stability and chemical composition of
products, represented 49% of Group revenues in the first half. Revenues grew
9.0% to $7.4 million (H1 2003: $6.78 million) as orders increased from our
Pharmaceutical customer base. Our new operating structure, focused business
development team and targeted marketing activities have allowed for rapid growth
in larger customer orders, particularly successful in our New Jersey operation,
as it is located in the most concentrated area of outsourced testing in the US.
Our New Jersey operation increased revenues by 33%. Although this growth is
from a smaller base than our St Louis operation, the success of our business
development team in generating new business that significantly exceeds the
market growth rate of contract analytical testing services is a very encouraging
development.
During the first half, we have expanded our business development team
geographically in North America and Puerto Rico and are seeing customer orders
remain healthy into the second half. The alignment of our customer service
operations with our business development team, in addition to several newly
implemented customer communication tools is enabling us to deliver seamless
customer care. Our philosophy of "Big Enough to Deliver, Small Enough to Care",
is increasingly resonating with our growing customer base who expect high
quality service and attention.
We remain committed to the expansion of our higher margin services offerings.
Specifically, we are working with leading in vitro diagnostic suppliers to
define the validation parameters in the conversion to in vitro toxicology in
order to better assist our customers in utilising these new technologies. With
the addition of our Class 100 sterility suite in New Jersey we are strategically
targeting medical device companies. We are also increasing our expertise in
method development to broaden our service capabilities in this growing area of
business.
Financial Review
Results for the six months to 30 September 2004 showed a strong performance with
Group revenues up 12.7% to $15.19 million (H1 2003: $13.48 million).
Both the Product and Laboratory Groups contributed to the strong growth, with a
marked improvement in the activity level of the Laboratory Group, particularly
in our New Jersey operation, compared to last year and the continued solid
expansion of the Product Group activities especially in Europe and Asia.
Gross profit increased 13.7% to $9.88 million (H1 2003: $8.69 million) with
gross margins strengthening slightly to 65% (H1 2003: 64.4%). Overall, these
results display the excellent resilience of the Group's margins in an
accelerated growth environment.
Operating, Administration and R&D costs increased 7.8% to $7.16 million (H1
2003: $6.64 million). Although substantially lower than the revenue growth rate,
4.5% of this increase is due to the strengthening of the Euro and Sterling
against the US$ compared to the exchange rates for the same period last year as
our cost-base remains under strict control.
Operating profit rose significantly 32.7% to $2.72 million (H1 2003: $2.05
million) and profit before tax increased 27.1% to $2.72 million (H1 2003: $2.14
million).
For the six-month period, we accrued for a UK tax-charge based on the current
profitability of our UK entities. As we expect our US entities to continue to
trade profitably we have started to recognise the benefit of US tax losses
brought forward. Overall the tax credit for the period is $771,000 (H1 2003:
$612,000 credit).
Retained profit for the period has increased 25.7% to $3.49 million (H1 2003:
$2.77 million).
Earning per share increased 21.2% to 2.40c (H1 2003: 1.98c) on a comparable pre
tax basis, as last year's EPS of 2.57c and this year's EPS of 3.11c continue to
benefit from tax losses brought forward.
Total capital expenditure is up to $1 million (H1 2003: $0.77 million). Both
Groups have invested in new instrumentation and the Product Group has also
invested in new Customer Relation Management software allowing improved
coordination of the Global Corporate Accounts Management process.
Debtors due within a year are up 10% to $6.75 million (H1 2003: $6.14 million),
reflecting the increased level of sales, and the deferred tax asset account
reflects the tax assets recognised at the end of the last fiscal year.
Creditors and provisions have increased to $3.85 million (H1 2003: $3.52
million) and the Group has no long-term debt or bank overdraft.
Our creditors/cash ratio (acid test ratio) has further strengthened to 0.26 (H1
2003: 0.31). The cash and cash equivalents position has improved to $15 million
(H1 2003: $11.44 million) although the free cash generation has slowed down
during the period under review as the Group has paid a dividend of $966,000,
bought $205,000 of treasury shares and invested $1 million of capital
expenditure during the last six months. There will be no interim dividend.
Equity shareholder's funds have increased 27.1% to $30.41 million (H1 2003:
$23.92 million), representing $6.49 million during the last 12 months after a
deduction of $205,000 of treasury shares purchased during the period.
Net working capital excluding the deferred tax assets compared to the same
period last year decreased $476,000 to $5.28 million (H1 2003: $5.75 million)
due to the continuous decrease of stocks and increase in creditors. Stocks have
continued to be strictly controlled and their value is down 26% to $2.2 million
(H1 2003: $2.97 million).
The Holding Company, after distribution of a maiden dividend in August 2004,
needs to increase its distributable reserves for the purpose, among others, of
paying dividends to shareholders in the future. The planned reduction of the
share premium account will require the approval of shareholders by a special
resolution at the Extraordinary General Meeting to be held on 28 October 2004.
Sales and profits from both groups have remained solidly in line with management
expectations. With no long-term debt and a strong balance sheet, the Group is
continuing to deliver increased shareholder value and is committed to pursuing
organic and external growth.
Outlook
We are pleased with our strong first half performance.
The Product Group continues its strong global growth and the rate of adoption of
our rapid testing systems is accelerating as corporate client's leverage cost
savings with Celsis technology. We are expanding our product technology
offerings to more effectively meet the increasing needs of our growing customer
base.
The Laboratory Group is continuing to benefit from an improved economic
environment as well as from our new operating structure, aligned around customer
needs, and our targeted sales and marketing activities. We remain confident
that we can remain a leader in the analytical services markets in North America
where our growth rate, in the most concentrated area of outsourced testing, is
significantly higher than the growth rate of the market.
As the market for our products and services continues to expand and Celsis
improves its product and services offerings we are confident that we can
continue to grow our top line revenues whilst managing our cost base to deliver
consistent profit growth. We are also utilising a disciplined approach to
identify potential new business opportunities and our focus will remain on
ensuring long-term shareholder value.
We are on track for a strong outcome for the full year and are confident in the
Company's long-term future prospects.
Jay LeCoque, Chief Executive Officer
Jack Rowell, Non-Executive Chairman
Unaudited Consolidated Profit and Loss Account
for the 6 months to 30 September 2004
Total Total Total
$'000 Six months Six months Year
to 30 Sept to 30 Sept to 31 March
2004 2003 2004
Notes Unaudited Audited
Turnover 15,187 13,479 27,595
Cost of Sales (5,312) (4,792) (9,449)
__________ __________ __________
Gross profit 9,875 8,687 18,146
Overheads
Sales & marketing expenses (5,036) (4,623) (9,692)
Administrative expenses (1,737) (1,568) (3,072)
Research & development expenditure (387) (445) (782)
__________ __________ __________
Operating profit 2,715 2,051 4,600
Interest receivable & similar income 87 99 263
Interest payable & similar charges (86) (9) (35)
__________ __________ __________
Profit before taxation 2,716 2,141 4,828
Taxation 771 632 1,829
__________ __________ __________
Profit for the period 5 3,487 2,773 6,657
Dividends - - (966)
__________ __________ __________
Retained profit for the period 3,487 2,773 5,691
__________ __________ __________
Earnings per Ordinary Share
Earnings per Ordinary Share 1 3.11c 2.57c 6.04c
Diluted earnings per share 1 3.09c 2.55c 6.00c
Statement of Total Group Recognised Gains and Losses
for the 6 months to 30 September 2004
Profit for the financial period 3,487 2,773 6,657
Currency translation differences on foreign currency net (102) 126 499
investments
Total profit recognised since last annual report 3,385 2,899 7,156
Unaudited Consolidated Balance Sheet
at 30 September 2004
$'000 At 30 Sept At 30 Sept At 31 March
2004 2003 2004
Notes Unaudited Audited
Fixed Assets
Intangible assets 1,269 1,356 1,314
Tangible assets 4,455 4,128 4,113
Investments 24 12 24
__________ __________ __________
5,748 5,496 5,451
Current Assets
Stocks 2,200 2,974 2,761
Debtors : amounts falling due after one year 180 163 152
Debtors : amounts falling due within one year 6,751 6,140 5,916
Deferred tax asset 4,386 1,228 3,559
Short-term investments - 9,370 -
Cash at bank and in hand 15,002 2,072 14,207
__________ __________ __________
28,519 21,947 26,595
Creditors - due within one year (3,602) (3,173) (4,536)
__________ __________ __________
Net Current Assets 24,917 18,774 22,059
Total Assets less Current Liabilities 30,665 24,270 27,510
Creditors - due after more than one year (176) (279) (226)
Provision for liabilities and charges (76) (72) (51)
__________ __________ __________
Net Assets 30,413 23,919 27,233
__________ __________ __________
Capital and Reserves:
Called up share capital 1,611 1,611 1,611
Share premium account 23,120 23,097 23,120
Profit and loss account 5 4,405 (2,271) 1,020
Treasury shares (205) - -
Reserve arising on consolidation 1,482 1,482 1,482
__________ __________ __________
Equity shareholders' funds 30,413 23,919 27,233
__________ __________ __________
Unaudited Cashflow Statement
for the 6 months to 30 September 2004
$'000 Six months Six months Year
to 30 Sept to 30 Sept to 31 March
2004 2003 2004
Unaudited Audited
Net cash inflow from operating activities 2,051 3,286 6,502
Returns on investments and servicing of finance
Interest received 87 99 263
Interest paid (14) (9) (35)
__________ __________ __________
Net cash inflow from returns on investments 73 90 228
and servicing of finance
Taxation
Corporation tax paid (35) (35) (149)
__________ __________ __________
(35) (35) (149)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,006) (773) (1,333)
Sale of tangible fixed assets - - 9
__________ __________ __________
Net cash outflow from returns on investment and capital (1,006) (773) (1,324)
expenditure __________ __________ __________
Cash inflow before financing 1,083 2,568 5,257
__________ __________ __________
Management of liquid resources
Purchase of short-term investments - (4,476) 4,896
Financing
Issue of shares - 2,442 2,513
Expenses of shares issued - - (72)
Proceeds from share options exercised - - 24
Purchase of treasury shares (205) - -
Repayment of principal under finance leases (83) (79) (161)
__________ __________ __________
Net cash (outflow)/inflow from financing (288) 2,363 2,304
__________ __________ __________
Increase in cash in the period 795 455 12,457
__________ __________ __________
Notes
for the 6 months to 30 September 2004
1. Basic & diluted profit per ordinary share
$'000 Six months Six months Year
to 30 Sept to 30 Sept to 31 March
2004 2003 2004
Unaudited Audited
Profit on ordinary activities after taxation 3,487 2,773 6,657
Basic weighted average number of Ordinary Shares in issue 112,191,245 108,009,008 110,205,337
Diluted weighted average number of Ordinary Share in issue 113,004,287 108,634,163 111,000,910
2. Reconciliation of operating profit to net cash inflow from operating activities
Operating profit 2,715 2,051 4,600
Depreciation of tangible fixed assets 711 586 1,212
Provision for reduction in valuation of shares held by ESOT - 1 (13)
Amortisation of intangible assets 36 52 94
Loss on disposal of tangible fixed assets - - 1
(Increase)/decrease in debtors (1,012) 719 179
Decrease in stocks 561 114 352
(Decrease)/increase in trade & other creditors (985) (207) 128
Movement in provisions 25 (30) (51)
__________ __________ __________
Net cash inflow from continuing operating activities 2,051 3,286 6,502
__________ __________ __________
3. Reconciliation of net cash flow to movement in net funds
Increase in cash in the period 795 455 12,457
Purchase of short-term investments - 4,476 (4,896)
Repayment of finance lease and loan obligations 83 79 161
__________ __________ __________
Changes in net funds resulting from cashflows 878 5,010 7,722
Exchange adjustment - - 128
__________ __________ __________
Movement in net funds in the period 878 5,010 7,850
__________ __________ __________
Net funds at the beginning of the period 13,953 6,103 6,103
__________ __________ __________
Funds at the end of the period 14,831 11,113 13,953
__________ __________ __________
4. Analysis of net funds
$'000 At start of Cashflow Exchange At end of
period differences period
Six months ended 30 September 2004
Cash at bank and in hand 14,204 798 - 15,002
Bank overdrafts (4) - - (4)
Finance leases (250) 83 - (167)
__________ __________ __________ __________
13,950 881 - 14,831
__________ __________ __________ __________
Six months ended 30 September 2003
Cash at bank and in hand 1,653 417 - 2,070
Short-term investments 4,896 4,476 - 9,372
Bank overdrafts (35) 35 - -
Finance leases (411) 82 - (329)
__________ __________ __________ __________
6,103 5,010 - 11,113
__________ __________ __________ __________
Year ended 31 March 2004
Cash at bank and in hand 1,653 12,426 128 14,207
Short-term investments 4,896 (4,896) - -
Bank overdrafts (35) 31 - (4)
Finance leases (411) 161 - (250)
__________ __________ __________ __________
6,103 7,722 128 13,953
__________ __________ __________ __________
5. Profit and loss account
Six months Six months Year
to 30 Sept to 30 Sept to 31 March
2004 2003 2004
At 1 April 1,020 (5,170) (5,170)
__________ __________ __________
Retained profit for the period 3,487 2,773 5,691
Exchange difference (102) 126 499
__________ __________ __________
Profit/(loss) carried forward 4,405 (2,271) 1,020
__________ __________ __________
6. Deferred tax assets
Six months Year
to 30 Sept to 31 March
2004 2004
Amounts falling due within one year 1,500 1,500
Amounts falling due after more than one year 2,886 2,059
__________ __________
4,386 3,559
__________ __________
This information is provided by RNS
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