TIDMNIOX
RNS Number : 5941T
Niox Group PLC
21 March 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR"), and is disclosed in accordance
with the Company's obligations under Article 17 of UK MAR. The
persons taking responsibility for this announcement are the Company
contacts named below.
NIOX GROUP PLC
("NIOX" or the "Company" and, together with its subsidiaries,
the "Group")
PRELIMINARY RESULTS FOR THE YEARED 31 DECEMBER 2022
Oxford, UK - 21 March 2023: NIOX Group plc (AIM: NIOX), a
medical device company focused on point of care asthma diagnosis
and management, today announces its unaudited results for the year
ended 31 December 2022.
Financial highlights
-- Underlying revenue growth of 15% to GBP31.3 million (2021:
GBP27.9 million) excluding a one-off revenue item of GBP0.6 million
in China
-- Profit before tax GBP2.4 million, excluding the benefit of
the Beyond Air consideration of GBP8.1 million (2021: loss of
GBP2.1 million)
-- Group adjusted EBITDA(2) at GBP7.3 million, ahead of upgraded
consensus estimates (2021: GBP0.6 million in a transitional
year)
-- Net cash GBP19.4 million (31 December 2021: GBP12.6 million)
Financial progress
2022 2021
GBPm GBPm
------------------ ------------------
Revenue 31.3 27.9
------------------ ------------------
Gross margin 71% 68%
------------------ ------------------
Total expenditure(1) (14.9) (18.4)
------------------ ------------------
Adjusted EBITDA(2) 7.3 0.6
------------------ ------------------
Adjusted EBITDA margin 23.3% 2.2%
------------------ ------------------
Operating profit/ (loss) 1.8 (4.3)
------------------ ------------------
Beyond Air settlement consideration 8.1 -
------------------ ------------------
Profit/ (loss) before tax 10.5 (2.1)
------------------ ------------------
Profit for the year from discontinued
operations 2.0 1.3
------------------ ------------------
Profit for the financial year 16.1 3.6
------------------ ------------------
Cash(3) at year end 19.4 12.6
------------------ ------------------
(1) Excludes depreciation, amortisation, impairment
and share option charge.
(2) Earnings before interest, tax, depreciation,
amortisation, impairment and share option charge.
(3) Includes cash and cash equivalents .
Operational highlights
-- Ongoing transition to distributor-led business model
beginning to gather momentum with new arrangements in the USA and
China expected to drive scalable revenue growth in 2023 and
beyond.
-- Maintained strong recurring revenue of 89% of GBP26.2 million of Clinical revenue.
-- Good progress in the UK with initial sales into the primary care sector.
-- Approval received from shareholders on 1 September 2022 to
change the Company name from Circassia Group plc to NIOX Group plc
reflecting the focus on NIOX(R) products.
-- FDA approval for Beyond Air's LungFit(R) PH device received
on 28 June 2022, initiating total milestone payments of $10.5
million over three years ($2.5 million received in August 2022),
with up to a further $6 million in potential royalty payments
thereafter.
Post period end
-- A Capital Reduction Scheme was concluded by filing an order
of the High Court with the Registrar of Companies on 8 February
2023. The scheme was approved by shareholders on 6 October 2022 and
a Court Order was approved on 8 November. The purpose of the
Capital Reduction is to enable the Board to return surplus cash to
shareholders via dividends and/or share buybacks, if considered
appropriate in the future.
Ian Johnson, NIOX's Executive Chairman, said: "2022 was a
significant year for the Group with the business substantially
right-sized and the implementation of a distributor-led sales
strategy well underway. These initiatives gave rise to a
much-reduced cost base and generated scalable revenue growth. The
Group remains debt free and has significant cash resources to
continue implementing its business strategy of accessing and
promoting the benefits of its products to healthcare professionals
in primary and secondary care, who diagnose and treat the large
population of patients suffering from asthma. Significant progress
was made in 2022 to sell NIOX(R) FeNO devices into primary care,
and I am pleased to report that this is continuing into 2023.
The business has proved very resilient during both the Pandemic
and the more recent global macroeconomic conditions. The high level
of recurring revenues provides good visibility of earnings and
together with high gross margins are delivering profitable growth.
The Group has made a positive start to 2023 with revenues up 19% in
the first two months of the year on the equivalent period in 2022.
The Board believes that the strong business model will drive
further top line growth and continue to deliver improved
shareholder value going forward."
Contacts
NIOX
Ian Johnson, Executive Chairman Tel: +44 (0) 1865 405 560
Michael Roller, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Broker)
Aubrey Powell/ Jen Boorer / Alex Emslie Tel: +44 (0) 20 7496
3000
About NIOX
Our mission is to improve asthma diagnosis and management by
greater patient access to FeNO testing. Asthma is one of the
biggest healthcare issues globally with 340 million sufferers, many
of whom are undiagnosed or misdiagnosed The Group is engaged in the
design, development, and commercialisation of medical devices for
the measurement of FeNO, a biomarker of inflammatory asthma. Our
market leading device, NIOX VERO(R), is increasingly recognised by
healthcare professionals as an important tool to improve the
diagnosis and management of asthma. NIOX VERO(R) is also the device
of choice by leading clinical research organisations for
respiratory studies.
At present, NIOX provides products and services in around 50
countries. For more information, please visit www.niox.com
Forward-looking statements
This press release contains certain projections and other
forward-looking statements with respect to the financial condition,
results of operations, businesses, and prospects of NIOX. The use
of terms such as "may", "will", "should", "expect", "anticipate",
"project", "estimate", "intend", "continue", "target" or "believe"
and similar expressions (or the negatives thereof) are generally
intended to identify forward-looking statements. These statements
are based on current expectations and involve risk and uncertainty
because they relate to events and depend upon circumstances that
may or may not occur in the future. There are a number of factors
that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. Any of the assumptions underlying these forward-looking
statements could prove inaccurate or incorrect and therefore any
results contemplated in the forward-looking statements may not
actually be achieved. Nothing contained in this press release
should be construed as a profit forecast or profit estimate.
Investors or other recipients are cautioned not to place undue
reliance on any forward-looking statements contained herein. NIOX
undertakes no obligation to update or revise (publicly or
otherwise) any forward-looking statement, whether as a result of
new information, future events or other circumstances.
BUSINESS REVIEW
A year of continued progress
2022 saw both solid sales growth, and the completion of the cost
reduction exercises which were ongoing during 2020 and 2021.
Pleasingly, the NIOX(R) business ended the year having achieved a
30% EBITDA margin (excluding corporate costs) and demonstrated the
scalability and underlying profitability of its distributor led
business model.
FeNO testing rates began a sustained recovery in most major
markets in 2022, as the effects of Covid-19 diminished and more
patients visited their physicians in person. This resulted in
revenues to Clinical customers growing 12% versus 2021 with
underlying growth of 15% excluding a one-off revenue item of GBP0.6
million in China in H1 2021. Sales to Research customers grew by
13%, bringing performance back to well above 2019 pre-pandemic
revenue levels.
EMEA clinical sales demonstrated the strongest recovery and grew
at 19% versus 2021. The UK was the strongest growing European
market and ended the year with sales significantly higher than
pre-pandemic levels. UK growth was fuelled by adoption of FeNO
testing in Primary Care.
The Americas experienced modest growth as healthcare
professionals began to return to business as usual. Clinical
revenues in the region grew by 18% versus 2021 in sterling terms,
but at only 7% in local currency terms.
China and Japan were slower to recover from Covid-19, which
suppressed FeNO testing rates and meant that Clinical revenues in
the Asia Pacific region showed weaker growth of 2% versus 2021 (9%
underlying growth excluding the impact of the one-off revenue item
of GBP0.6m in 2021).
Moving forward the Company is focused on accelerating the growth
of FeNO testing in Primary Care, where most asthmatics are treated.
The new distribution arrangements in the US and China are key
enablers to the strategy of driving top line growth, without adding
fixed costs to the business.
Once FeNO testing and NIOX(R) are established as normal practice
in Primary Care the Company plans to explore a home use product, so
that asthma patients can perform a FeNO test at home and help
improve their asthma outcomes.
NIOX(R) business
Revenues for the year ended 31 December 2022 were up 12% to
GBP31.3 million (2021: GBP27.9 million), and up 11% on a constant
currency basis. Underlying revenues (excluding the impact of a
GBP0.6 million one-off revenue item in H1 2021) were up 15%. The
second half of the year saw stronger relative growth of 19% over H2
2021
The significant cost reductions of the two previous years
continued, but principally as a result of the annualisation effect
of actions taken in 2021. Group headcount started the year at 111
and ended the year at 92. Management does not expect further
reductions in cost in 2023 and expects headcount to increase
slightly during the year. The Group's energy usage is low as it
does not manufacture its own products, and accordingly the
substantial increase in energy prices has not had a material impact
on the Group's operations.
Discontinued operations
The transfer of the COPD products back to AstraZeneca completed
on 31 March 2021. An operating profit of GBP2.0 million was
generated by this business in 2022 as the result of a credit
arising to revenue which dated back to transactions originally
undertaken in 2019, combined with a reduction to the rebate accrual
as a result of information received during the year. NIOX retains
legal liability for rebates payable to third parties (primarily
Medicaid) for the period during which it operated the COPD
business. GBP0.7 million of rebates were paid during 2022 and an
accrual for additional rebates of GBP1.8 million remains in the
Group's balance sheet at 31 December 2022. No rebate claims have
been received since 31 December 2022.
NIOX also retains legal liability for returns of product sold
during the period when it operated the COPD business. An accrual of
GBP2.2 million has been included to cover this eventuality in the
Group's balance sheet at 31 December 2022. Returns claims totalling
GBP1.1 million were received during late 2022 but had not yet been
paid at the balance sheet date. NIOX's liability for returns will
have been substantially extinguished by the end of 2023.
Russia and Ukraine
NIOX has no operations in Russia and generates no revenue in
Russia. In 2022, revenues derived from Ukraine were less than 1% of
Group revenues.
Energy prices and inflation
The Group has two strategic manufacturing partners and does not
manufacture its own products, accordingly energy costs are a very
small component of total costs. The effect of inflationary
pressures on purchase prices from its two main suppliers is
mitigated both by the Group's high gross margins and its ability to
implement price increases in the majority of its markets.
Beyond Air
On 28 June 2022, Beyond Air, Inc. ("Beyond Air") confirmed that
it had received approval from the U.S. Food and Drug Administration
(FDA) for its LungFit(R) PH device.
As a result of this news and in accordance with the terms of a
previously announced settlement agreement with Beyond Air, the
Group became entitled to receive payments of $10.5 million in
total, in three instalments as follows:
-- $2.5 million within 60 days of the approval of LungFit(R) by
the FDA ("FDA approval"), which was received on 24 August 2022
-- $3.5 million within 60 days of the first anniversary of FDA approval
-- $4.5 million within 60 days of the second anniversary of FDA approval
The total settlement consideration of $10.5 million was
recognised, discounted to its present value at the balance sheet
date.
In addition, the Group is entitled to a royalty of 5% of net
sales of the device, commencing on the second anniversary of FDA
approval and capped at a maximum of $6 million. These royalties
have not been recognised due to uncertainties around quantum and
timing.
Name change
The Company changed its name from Circassia Group plc to NIOX
Group plc during the year in order that the name of the Company's
product is aligned with name of the Company itself.
Capital Reduction Scheme
As a result of the much improved profitability and cash
generation of the Group, the Group is accumulating cash balances in
excess of those which it requires to continue to operate and grow
the business.
A Capital Reduction Scheme was sanctioned by both shareholders
and the High Court in late 2022, and was completed by the filing of
the Court Order with the Registrar of Companies in February 2023,
to enable the Company to eliminate the deficit on its profit and
loss account and to create distributable reserves to enable the
Company to pay shareholders dividends, or to purchase its own
shares in future, if this is considered appropriate.
Employees
On behalf of the Board, I would like to thank all employees
within the Group for their hard work and commitment.
Summary and outlook
2022 was a good year for the Group. The results demonstrate the
clear ability of our business model to generate profitable growth,
and double digit sales growth at historical trend levels was
achieved despite ongoing adverse effects of Covid-19 in several of
our major markets.
The business has made a positive start to 2023 and the Board
expects another year of solid progress, notwithstanding the
somewhat mixed macroeconomic outlook.
OPERATING REVIEW
Key strategic drivers of the Group
The opportunity
Asthma affects over 340 million people worldwide with a further
100 million estimated to be affected by 2025. There are an
estimated 1,000 deaths globally due to asthma every day. In some
50% of cases, asthma is either not diagnosed or is misdiagnosed,
which leads to a delay in asthma patients receiving the care that
they need. Following a diagnosis of asthma, it is important to be
able to regularly monitor the condition to confirm the
effectiveness of treatment and adherence by the patient.
FeNO
Asthma is a condition that is characterised by inflammation of
the airways and lungs. Nitric oxide is produced by inflammatory
cells and can be precisely measured in exhaled breath, this is
known as FeNO (fraction of exhaled nitric oxide). Measuring FeNO
helps understand the level of inflammation in the lungs of an
asthmatic and is a precise biomarker of type 2 airway inflammation.
FeNO measurements can improve the chances of a correct diagnosis by
up to seven times.
The American Thoracic Society (ATS) recommended that FeNO
testing should be part of the ongoing care of asthmatics as well as
being used as a tool for diagnosing asthma. This is the latest
example from an increasing body of highly credible, influential
evidence based medical guidelines around the world that have
recommended the use of FeNO testing as a routine part of diagnosing
and managing asthma. The guidelines are based on a substantial body
of published clinical trials that demonstrate the benefits of FeNO
testing. Measuring FeNO as part of ongoing asthma management has
been shown to decrease asthma exacerbations by 50%.
Further impetus is coming from a new class of biologic
anti-inflammatory medicines for the treatment of type 2
inflammatory asthma. Biologic medicines are targeted at asthmatics
with increased inflammation and therefore elevated FeNO. The cost
of these new medicines is significant. This means that some
pharmaceutical companies are investing resources to raise the
awareness and usage of FeNO testing in order to identify the
patients that are most likely to respond to treatment as they seek
to establish this new class of drugs as an effective line of
therapy.
Our products
The Company's NIOX VERO(R) is the market leading device for
measuring FeNO. This is a non-invasive, point-of-care system which
accurately measures the patient's FeNO level. It is quick, easy to
use and reliable. The system comprises a small portable device and
a range of consumables including sensors, individual disposable
mouthpieces and breathing handles. The quality and innovation of
NIOX VERO(R) has been recognised with several awards over recent
years, including the Global Health & Pharma Awards, where NIOX
was named as Global Leaders in FeNO Testing 2021 and the 2022
Research and Development Award.
NIOX(R) is registered and reimbursed in all major markets and
available in more than 50 countries via NIOX's international
network of distribution partners.
Our business
NIOX VERO(R) is the market leading device for FeNO testing, with
approximately 17,000 devices and nearly 50 million FeNO tests sold
to date.
NIOX(R) revenues in 2022 for clinical diagnosis and management
of asthma were GBP26.2 million (2021: GBP23.4 million).
Approximately 90% of these revenues are from recurring sales of
consumables (test kits) used for routine testing.
In addition to routine use by clinicians, the NIOX VERO(R) is
almost exclusively specified as the device of choice by clinical
research organisations (CROs) who manage clinical trials on behalf
of large pharma. Our principal CRO customer established a number of
new trials in the early part of the year, after a slowdown in sales
in 2020 during the early stages of the pandemic.
Revenues in 2022 from CROs were GBP5.1 million (2021: GBP4.5
million). Approximately 55% of these revenues are from sales of
consumables (test kits) driven by the length of the trial and the
number of patients recruited. CRO revenues are not classified as
recurring.
Principal challenges
Today the awareness and usage of FeNO testing and NIOX amongst
the respiratory specialist community is high. The majority of
asthmatics are under the care of Primary Care doctors, where the
awareness and usage of FeNO is significantly lower than the
specialist community. This means that there is a huge untapped
potential in the FeNO testing market. The primary challenge the
NIOX(R) business faces is to increase the awareness and usage of
FeNO testing, specifically in the Primary care customer group.
The Company continues to engage with respiratory professionals
to promote the use of FeNO tests in new and under-served customer
segments such as primary care settings and pharmacies. Use by CROs
also raises the profile of FeNO testing and NIOX(R) in
particular.
Management intends to expand the number of distribution partners
in our major markets, such as the US and China, to further raise
awareness and levels of education regarding the benefits of FeNO
testing and to make NIOX(R) more easily available.
Covid-19 impact
In 2022, Covid-19 continued to have a negative impact in China
and to a lesser extent in Japan. Meanwhile, as Europe and the US
emerged from the shadow of Covid-19, FeNO testing started to
recover as healthcare systems began to return to "business as
usual".
Conclusion
The company's mission is to improve asthma diagnosis &
management by greater patient access to FeNO testing. The Group has
a robust strategy in place to expand the business and generate
profitable growth from this large underserved market; this includes
the ongoing evaluation of a product for home use.
FINANCIAL REVIEW
This has been an encouraging year for NIOX. The lessening impact
of the Covid-19 pandemic has increased the level of FeNO testing
carried out by our customers, resulting in the Group increasing
both revenues and adjusted EBITDA, which it considers to be key
KPI's.
On 27 May 2020, the Group handed back the rights to its COPD
products to AstraZeneca, and as such the results of the COPD
business are classified as a discontinued operation in the table
below. The NIOX business represents the continuing operations of
the Group.
2022 2021
GBPm GBPm
==================================== ====== =======
Revenue 31.3 27.9
Cost of sales (9.1) (8.9)
Gross profit 22.2 19.0
Gross margin 71% 68%
Research and development costs (3.2) (4.6)
Sales and marketing costs (9.7) (11.9)
Administrative expenses (7.5) (6.8)
Adjusted EBITDA(1) 7.3 0.6
Operating profit / (loss) 1.8 (4.3)
Other gains and (losses) 0.4 1.6
Other income 8.3 0.9
Net finance costs - (0.3)
Profit / (loss) before tax 10.5 (2.1)
Taxation 3.6 4.4
Profit for the financial year from
continuing operations 14.1 2.3
Profit for the financial year from
discontinued operations 2.0 1.3
Profit for the financial year 16.1 3.6
------------------------------------- ------ -------
Cash and cash equivalents 19.4 12.6
------------------------------------- ------ -------
(1) Earnings before interest, tax, depreciation, amortisation,
impairment and share option charge.
Revenue
NIOX(R) revenue for the year was GBP31.3 million (2021: GBP27.9
million) which includes clinical revenue of GBP26.2 million (2021:
GBP23.4 million) and research revenue of GBP5.1 million (2021:
GBP4.5 million). NIOX(R) c linical revenue represents sales to
physicians and hospitals for use in clinical practice and to the
Company's distributors, while research revenue is from
pharmaceutical companies and contract research organisations (CROs)
for use in clinical studies.
The increase in NIOX(R) revenue was as a result of the sustained
recovery following the Covid-19 pandemic, combined with the
continued focus on building partnered distribution in the USA and
China.
Gross profit
Gross profit on NIOX(R) revenue was GBP22.2 million (2021:
GBP19.0 million), with a gross margin of 71% (2021: 68%). Gross
margin was higher than the prior year as a higher proportion of
test kits was sold.
Research and development
Research and development costs decreased to GBP3.2 million
(2021: GBP4.6 million). Included in this category are GBP0.4
million of Device Development costs (2021: GBP1.2 million), GBP0.3
million of Quality costs (2021: GBP0.6 million), GBP0.3 million of
Medical Affairs costs (2021: GBP0.4 million), GBP0.3 million of
Regulatory costs (2021: GBP0.3 million) and GBP1.9 million of
depreciation, amortisation and impairment (2021: GBP2.1 million).
The decrease in costs is mainly attributable to lower
headcount.
Sales and marketing
Sales and marketing costs decreased to GBP9.7 million (2021:
GBP11.9 million) as there was a reduction in the number of
dedicated NIOX(R) sales representatives across the Group as a
result of the switch to a distributor led sales model, combined
with lower third-party marketing costs as the Covid-19 pandemic
continued to limit marketing activities.
Administrative expenditure
Administrative expenditure, which includes overheads relating to
corporate functions, centrally managed support functions and
corporate costs, increased to GBP7.5 million (2021: GBP6.8
million). This was mainly attributable to higher remuneration for
the Executive Directors, combined with several one-off project
costs in the year, including the company name change and the
capital reduction scheme.
Other income
Other income has increased to GBP8.3 million (2021: GBP0.9
million). GBP8.1 million (2021: GBPnil) relates to the recognition
of the settlement consideration due from Beyond Air following FDA
approval of the LungFit(R) PH product. The total settlement
consideration of $10.5 million was recognised, discounted to its
present value at the balance sheet date.
The residual amount includes GBP0.2 million (2021: GBP0.2
million) of sub-lease rental income in respect of the Chicago
property and GBPnil (2021: GBP0.7 million) in respect of a grant
received from the US government under the Payment Protection
Program. There are no contingencies or conditions attaching to this
grant, and the amounts are not repayable.
Taxation
Taxation for the year was a credit of GBP3.6 million (2021:
GBP4.4 million) which arose as the result of an increase in the
amount of recognised carried-forward tax losses in the Group
generated in Sweden by Circassia AB.
Earnings per share
Basic earnings per share for the year was 3.84p (2021: 0.87p)
and diluted earnings per share for the year was 3.63p (2021: 0.83p)
reflecting a profit after tax of GBP16.1 million (2021: GBP3.6
million), with the increase mainly as a result of the business's
improved profitability, largely due to the recognition of the
consideration due from Beyond Air.
Basic earnings per share from continuing operations was 3.36p
(2021: 0.55p) and diluted earnings per share for the year was 3.19p
(2021: 0.53p) reflecting a profit for the financial year of GBP14.1
million (2021: GBP2.3 million).
Excluding the impact of the one-off Beyond Air consideration,
basic earnings per share from continuing operations for the year
was 1.43p (2021: 0.55p).
Profit from discontinued operations
Profit from discontinued operations was GBP2.0 million (2021:
GBP1.3 million) relating to a reduction of the rebate accrual and
credit notes received from AstraZeneca relating to the reversal of
a historical Medicaid item dating back to the first half of
2019.
Statement of financial position
The Group's net assets at 31 December 2022 were GBP81.9 million
(2021: GBP66.8 million).
Current liabilities at the end of the year were GBP9.2 million
(2021: GBP10.8 million).
Other comprehensive expense
The Group's other comprehensive expense of GBP1.9 million (2021:
GBP7.8 million) relates to exchange differences on the translation
of foreign operations into British pound sterling.
The current year expense is mainly due to the strengthening of
the British pound against the Swedish krona. The expense consists
of a GBP1.4 million loss (2021: GBP3.6 million) on the translation
of overseas subsidiaries' net assets, a GBP1.0 million loss (2021:
GBP3.7 million) on the translation of intangible assets and a
GBP0.1 million loss (2021: GBP0.5 million) on the translation of
goodwill.
The current year expense of GBP2.6 million was offset by a
GBP0.7 million (2021: GBPnil) adjustment to record the net gain on
foreign exchange translation on certain intercompany balances
through other comprehensive income. During the year, a number of
long-term intercompany balances were designated as being in the
nature of long-term-investments and as such the associated foreign
exchange translation gain was removed from the income
statement.
.
Cash flow
The Group's cash position (including cash and cash equivalents)
increased from GBP12.6 million at 31 December 2021 to GBP19.4
million at 31 December 2022.
Cash generated from operations during the year aggregated GBP6.9
million (2021: GBP1.5 million), of which GBPnil (2021: GBP0.2
million) was generated in the COPD discontinued operations.
Michael Roller
Chief Financial Officer
21 March 2023
Unaudited Consolidated statement of comprehensive income
for the year ended 31 December 2022
2022 2021
Notes GBPm GBPm
Continuing operations
Revenue from contracts with customers 31.3 27.9
Cost of sales (9.1) (8.9)
--------------------------------------- ------ ------ -------
Gross profit 22.2 19.0
Research and development costs (3.2) (4.6)
Sales and marketing costs (9.7) (11.9)
Administrative expenses (7.5) (6.8)
Operating profit/ (loss) 4 1.8 (4.3)
Other gains and (losses) - net 0.4 1.6
Other income 5 8.3 0.9
Finance costs 6 (0.3) (0.3)
Finance income 6 0.3 -
Profit/ (loss) before tax 10.5 (2.1)
Taxation 8 3.6 4.4
--------------------------------------- ------ ------ -------
Profit from continuing operations 14.1 2.3
--------------------------------------- ------ ------ -------
Profit from discontinued operations
(attributable to equity holders
of NIOX Group plc) 7 2.0 1.3
Profit for the year 16.1 3.6
--------------------------------------- ------ ------ -------
Other comprehensive expense
Items that may be subsequently
reclassified to profit or loss
Exchange differences on translation
of foreign operations 12 (1.9) (7.8)
Other comprehensive expense for
the year, net of tax (1.9) (7.8)
--------------------------------------- ------ ------ -------
Total comprehensive income/ (expense)
for the year 14.2 (4.2)
--------------------------------------- ------ ------ -------
Earnings per share attributable to owners of the parent during
the year (expressed in pence per share)
2022 2021
Basic earnings per share Pence Pence
------------------------------------- ------ ------
Basic earnings per share for profit
from continuing operations 9 3.36 0.55
Basic earnings per share for profit
for the year 9 3.84 0.87
------------------------------------- ------ ------
2022 2021
Diluted earnings per share Pence Pence
--------------------------------------- ------ ------
Diluted earnings per share for profit
from continuing operations 9 3.19 0.53
Diluted earnings per share for profit
for the year 9 3.63 0.83
--------------------------------------- ------ ------
The above consolidated statement of comprehensive income should
be read in conjunction with the accompanying notes.
Unaudited Consolidated statement of financial position
as at 31 December 2022
2022 2021
Notes GBPm GBPm
------------------------------- ------ -------- --------
Assets
Non-current assets
Property, plant and equipment 0.2 0.2
Right-of-use assets 0.9 1.2
Goodwill 10 4.7 4.8
Intangible assets 32.4 37.3
Trade and other receivables 3.5 -
Deferred tax assets 25.4 23.1
67.1 66.6
------------------------------- ------ -------- --------
Current assets
Inventories 4.1 2.7
Trade and other receivables 7.9 4.5
Cash and cash equivalents 19.4 12.6
------------------------------- ------ -------- --------
31.4 19.8
------------------------------- ------ -------- --------
Total assets 98.5 86.4
------------------------------- ------ -------- --------
Equity
Share capital 0.3 0.3
Share premium 640.3 640.3
Other reserves 12 15.7 16.7
Accumulated losses (574.4) (590.5)
Total equity 81.9 66.8
------------------------------- ------ -------- --------
Liabilities
Non-current liabilities
Lease liabilities 0.4 0.9
Deferred tax liabilities 7.0 7.9
7.4 8.8
------------------------------- ------ -------- --------
Current liabilities
Trade and other payables 11 8.6 10.4
Lease liabilities 0.6 0.4
9.2 10.8
------------------------------- ------ -------- --------
Total liabilities 16.6 19.6
------------------------------- ------ -------- --------
Total equity and liabilities 98.5 86.4
------------------------------- ------ -------- --------
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes.
Ian Johnson Michael Roller
Executive Chairman Chief Financial Officer
NIOX Group plc NIOX Group plc
Registered number: 05822706
Unaudited Consolidated statement of cash flows
for the year ended 31 December 2022
2022 2021
Notes GBPm GBPm
--------------------------------------------------------------- ------ ------ ------
Cash flows from operating activities
Cash generated from operations 13 6.9 1.5
Interest paid (0.2) (0.1)
Net cash generated from operating activities 6.7 1.4
--------------------------------------------------------------- ------ ------ ------
Cash flows from investing activities
Payments for property, plant and equipment (0.1) (0.1)
Payments for intangible assets - (0.1)
Net cash used in investing activities (0.1) (0.2)
--------------------------------------------------------------- ------ ------ ------
Cash flows from financing activities
Proceeds from issue of shares - 5.0
Share issue transaction costs - (0.1)
Interest received 0.1 -
Principal elements of lease payments (0.6) (0.8)
Net cash (used in)/ generated from financing activities (0.5) 4.1
--------------------------------------------------------------- ------ ------ ------
Net increase in cash and cash equivalents 6.1 5.3
Cash and cash equivalents at 1 January 12.6 7.4
Effects of exchange rate changes on cash and cash equivalents 0.7 (0.1)
--------------------------------------------------------------- ------ ------ ------
Cash and cash equivalents at 31 December 19.4 12.6
--------------------------------------------------------------- ------ ------ ------
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
Unaudited Consolidated statement of changes in equity
for the year ended 31 December 2022
Share Share Other Accumulated Total
capital premium reserves(1) losses equity
GBPm GBPm GBPm GBPm GBPm
-------------------------------------- --------- --------- ------------- ------------ --------
At 1 January 2021 0.3 635.4 24.5 (594.1) 66.1
Profit for the year - - - 3.6 3.6
Exchange differences on
translation of foreign
operations - - (7.8) - (7.8)
--------------------------------------- --------- --------- ------------- ------------ --------
Total comprehensive (expense)/income - - (7.8) 3.6 (4.2)
Transactions with owners:
Issue of new shares - 4.9 - - 4.9
At 31 December 2021 0.3 640.3 16.7 (590.5) 66.8
--------------------------------------- --------- --------- ------------- ------------ --------
Profit for the year - - - 16.1 16.1
Exchange differences on
translation of foreign
operations - - (1.9) - (1.9)
Total comprehensive (expense)/income - - (1.9) 16.1 14.2
Transactions with owners:
Employee share scheme
issues - - 0.9 - 0.9
At 31 December 2022 0.3 640.3 15.7 (574.4) 81.9
--------------------------------------- --------- --------- ------------- ------------ --------
(1) Other reserves include share option reserve, translation
reserve, treasury shares reserve, and transactions with NCI
reserve.
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes.
Notes to the financial statements
1. General information
Basis of preparation
With effect from 1 September 2022, the name of the Company was
changed from Circassia Group plc to NIOX Group plc.
The unaudited summary financial information set out in this
announcement does not constitute the Group's consolidated statutory
accounts for the years ended 31 December 2022 or 31 December 2021.
The results for the year ended 31 December 2022 are unaudited. The
statutory accounts for the year ended 31 December 2022 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 in due course. The
statutory accounts are subject to completion of the audit and may
also change should a significant adjusting event occur before the
approval of the Annual Report.
The statutory accounts for the Group for the year ended 31
December 2021 have been reported on by the Group's previous
auditors and delivered to the Registrar of Companies. The auditor's
report on those accounts was unqualified and did not include
references to any matter to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
The unaudited summary financial information set out in this
announcement has been prepared using the accounting policies as
described in the December 2021 audited year end statutory accounts
and have been consistently applied.
The preliminary announcement for the year ended 31 December 2022
was approved by the Board for release on 21 March 2023.
The preliminary announcement will be published on the Company's
website. The maintenance and integrity of the website is the
responsibility of the directors. The work carried out by the
auditors does not involve consideration of these matters.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
2. Operating segments
The chief operating decision-maker, the Executive Chairman,
examines the Group's performance from a product perspective, and
has identified one reportable segment in the continuing
business:
- NIOX(R) relates to the portfolio of products used to improve
asthma diagnosis and management by measuring fractional exhaled
nitric oxide (FeNO).
The COPD business has been classified as a discontinued
operation. Information about the results of this segment is
provided in note 7; information regarding its assets is presented
below.
The table below presents operating profit/ (loss) information
regarding the Group's operating segments for the years ended 31
December 2022 and 2021. Only the results for the Group's continuing
activities are included in order to aid comparison.
Segment operating profit / (loss)
Year ended 31 December 2022 NIOX(R) Head office Total
GBPm GBPm GBPm
----------------------------------------------------------------------------- -------- ------------ -------
Revenue (from external customers, based on the destination of the customer)
US 8.1 - 8.1
UK 2.8 - 2.8
EU 9.5 - 9.5
Asia Pacific 10.7 - 10.7
Rest of world 0.2 - 0.2
----------------------------------------------------------------------------- -------- ------------ -------
Total segment revenue 31.3 - 31.3
Cost of sales (9.1) - (9.1)
----------------------------------------------------------------------------- -------- ------------ -------
Research and development costs (3.2) - (3.2)
Sales and marketing costs (9.7) - (9.7)
Administrative expenses (4.5) (3.0) (7.5)
Operating profit / (loss) from continuing operations 4.8 (3.0) 1.8
----------------------------------------------------------------------------- -------- ------------ -------
Depreciation, amortisation and impairment included above (4.6) - (4.6)
----------------------------------------------------------------------------- -------- ------------ -------
Year ended 31 December 2021 NIOX(R) Head office Total
GBPm GBPm GBPm
----------------------------------------------------------------------------- -------- ------------ -------
Revenue (from external customers, based on the destination of the customer)
US 7.1 - 7.1
UK 1.7 - 1.7
EU 8.2 - 8.2
Asia Pacific 10.6 - 10.6
Rest of world 0.3 - 0.3
----------------------------------------------------------------------------- -------- ------------ -------
Total segment revenue 27.9 - 27.9
Cost of sales (8.9) - (8.9)
----------------------------------------------------------------------------- -------- ------------ -------
Research and development costs (4.6) - (4.6)
Sales and marketing costs (11.9) - (11.9)
Administrative expenses (5.0) (1.8) (6.8)
Operating loss from continuing operations (2.5) (1.8) (4.3)
----------------------------------------------------------------------------- -------- ------------ -------
Depreciation, amortisation and impairment included above (4.9) - (4.9)
----------------------------------------------------------------------------- -------- ------------ -------
Assets by segment
As at 31 December 2022 NIOX(R) Head office COPD Total
(Discontinued)
GBPm GBPm GBPm GBPm
------------------------------------------- -------- ------------ ---------------- ------
Cash and cash equivalents 19.4 - - 19.4
Property, plant and equipment 0.2 - - 0.2
Right-of-use assets 0.9 - - 0.9
Goodwill 4.7 - - 4.7
Intangible assets 32.4 - - 32.4
Deferred tax assets 25.4 - - 25.4
Inventories 4.1 - - 4.1
Trade and other receivables 5.1 2.8 - 7.9
Trade and other receivables - non-current - 3.5 - 3.5
Total assets 92.2 6.3 - 98.5
------------------------------------------- -------- ------------ ---------------- ------
As at 31 December 2021 NIOX(R) Head office COPD Total
(Discontinued)
GBPm GBPm GBPm GBPm
------------------------------------------- -------- ------------ ---------------- ------
Cash and cash equivalents 12.6 - - 12.6
Property, plant and equipment 0.2 - - 0.2
Right-of-use assets 1.2 - - 1.2
Goodwill 4.8 - - 4.8
Intangible assets 37.3 - - 37.3
Deferred tax assets 23.1 - - 23.1
Inventories 2.7 - - 2.7
Trade and other receivables 4.3 - 0.2 4.5
Total assets 86.2 - 0.2 86.4
------------------------------------------- -------- ------------ ---------------- ------
3. Employees and directors
Average number of people employed
Monthly average number of people (including Executive and Non-Executive Directors) employed:
---------------------------------------------------------------------------------------------- -------- --------
2022 2021
Number Number
---------------------------------------------------------------------------------------------- -------- --------
Office and management 28 31
Sales and marketing 62 81
Research and development 9 16
----------------------------------------------------------------------------------------------- -------- --------
Total average headcount 99 128
----------------------------------------------------------------------------------------------- -------- --------
Average headcount includes nil (2021: 1) sales and marketing and
nil (2021: 1) research and development people employed solely for
the discontinued operation.
The Group's total headcount at 31 December 2022 was 92 (2021:
111).
Employee benefit costs
2022 2021
GBPm GBPm
------------------------------ ------ ------
Wages and salaries 8.4 10.6
Social security costs 1.1 1.2
Other pension costs 0.5 0.5
Share option charge 0.9 -
------------------------------ ------ ------
Total employee benefit costs 10.9 12.3
------------------------------ ------ ------
Key management personnel
Key management personnel during the year included directors
(Executive and Non-Executive), Regional VP APAC, Regional VP
Americas, VP Product Development, VP Supply Chain and Technical
Operations, Regional VP EMEA, VP Research Business and Senior VP
Global Human Resources. The compensation paid or payable to key
management is set out below.
2022 2021
GBPm GBPm
------------------------------------------------ ------------------ ------
Short-term employee benefits (including bonus) 3.3 3.0
Share based payment 0.9 0.3
Total 4.2 3.3
------------------------------------------------ ------------------ ------
4. Breakdown of expenses by nature
Notes 2022 2021
GBPm GBPm
------------------------------------------------------ ------ ---------------------- ------
Employee benefit costs 3 10.9 12.3
Depreciation charge of property, plant and equipment 0.1 -
Depreciation charge of right-of-use assets 0.6 0.8
Amortisation charge of intangible assets 3.9 4.1
------------------------------------------------------ ------ ---------------------- ------
5. Other income
2022 2021
GBPm GBPm
-------------------------- ----- -----
Sub-lease rental income 0.2 0.2
Government grant - 0.7
Beyond Air consideration 8.1 -
Total other income 8.3 0.9
-------------------------- ----- -----
Beyond Air were granted FDA approval of the LungFit(R) PH
product on 28 June 2022, and therefore other income and a
corresponding receivable was recognised for the total consideration
of $10.5 million. As part of the consideration was due after more
than a year, the consideration was measured by discounting the
asset to its present value, with the unwinding of the discount
recognised as finance income in the year.
The government grant relates to a grant received by Circassia
Inc. from the US government under the Payment Protection Program.
The amounts are not repayable as forgiveness of the grant was
approved on 25 March 2021.
6. Finance costs and income
2022 2021
GBPm GBPm
--------------------------------------------- ------ ------
Finance costs:
Bank charges (0.2) (0.2)
Interest charges for lease liabilities (0.1) (0.1)
Total finance costs (0.3) (0.3)
--------------------------------------------- ------ ------
Finance income:
Bank interest receivable 0.1 -
Discount unwind on Beyond Air consideration 0.2 -
Total finance income 0.3 -
--------------------------------------------- ------ ------
7. Discontinued operations
On 9 April 2020, an agreement was signed to hand back the
Tudorza(R) and Duaklir(R) licences to AstraZeneca and as such, the
results of the COPD operating segment are reported as a
discontinued operation. There were no assets or liabilities
classified as held for sale in relation to the discontinued
operation.
Profit for the year
2022 2021
GBPm GBPm
------------------------------------------------- ---- ---------- ------
Revenue 2.0 2.5
Cost of sales - (0.3)
------------------------------------------------------- ---------- ------
Gross profit 2.0 2.2
------------------------------------------------------- ---------- ------
Expenditure - (1.2)
Operating profit 2.0 1.0
------------------------------------------------------- ---------- ------
Other gains and (losses) - net - 0.3
Profit from discontinued operations 2.0 1.3
------------------------------------------------------- ---------- ------
Cash flow 2022 2021
GBPm GBPm
-------------------------------------------------- --- ---------- ------
Net cash inflow from operating activities - 0.2
Net cash generated from discontinued operations - 0.2
-------------------------------------------------- --- ---------- ------
GBP0.5 million of the current year revenue represents credit
notes received from AstraZeneca relating to the reversal of a
historical Medicaid item dating back to the first half of 2019.
The remaining revenue relates to the revision of the rebate
accrual based on information received during the year.
8. Taxation
2022 2021
GBPm GBPm
-------------------------------------- ------ ------
Deferred tax
Increase in deferred tax assets (2.7) (2.8)
Decrease in deferred tax liabilities (0.9) (1.6)
-------------------------------------- ------ ------
Total deferred tax credit (3.6) (4.4)
-------------------------------------- ------ ------
Tax is attributable to:
Loss from continuing operations (3.6) (4.4)
-------------------------------------- ------ ------
The tax credit (2021: credit) for the year is lower (2021:
lower) than the standard rate of corporation tax in the UK of
19.00% (2021: 19.00%). The differences are explained below:
2022 2021
GBPm GBPm
Profit/(loss) from continuing operations before tax 10.5 (2.1)
Profit from discontinued operations before tax 2.0 1.3
------------------------------------------------------------------ ------ ------
Profit/(loss) bef ore tax 12.5 (0.8)
------------------------------------------------------------------ ------ ------
Tax at the UK tax rate of 19.00% (2021: 19.00%) 2.4 (0.2)
Expenses not deductible for tax purposes 0.1 (0.2)
Employee share options 0.2 (0.1)
Tax losses for which no deferred income tax asset was recognised (6.3) (3.9)
Tax credit for the year (3.6) (4.4)
------------------------------------------------------------------ ------ ------
At 31 December 2022, the Group has tax losses to be carried
forward of approximately GBP435.2 million (2021: GBP445.6 million).
These can be utilised against future taxable profits. A proportion
of these tax losses has been recognised as a deferred tax
asset.
9. Earnings per share
Basic earnings per share 2022 2021
Pence Pence
--------------------------------------------- ------- -------
From continuing operations 3.36 0.55
From discontinued operations 0.48 0.32
--------------------------------------------- ------- -------
Total basic earnings per share attributable
to the ordinary equity holders of the
company 3.84 0.87
--------------------------------------------- ------- -------
Diluted earnings per share 2022 2021
Pence Pence
----------------------------------------------- ------- -------
From continuing operations 3.19 0.53
From discontinued operations 0.44 0.30
----------------------------------------------- ------- -------
Total diluted earnings per share attributable
to the ordinary equity holders of the
company 3.63 0.83
----------------------------------------------- ------- -------
Adjusted basic earnings per share 2022 2021
Pence Pence
----------------------------------------------- ------- -------
From continuing operations 1.43 0.55
From discontinued operations 0.48 0.32
----------------------------------------------- ------- -------
Total diluted earnings per share attributable
to the ordinary equity holders of the
company 1.91 0.87
----------------------------------------------- ------- -------
Adjusted basic earnings per share eliminates the impact of the
Beyond Air settlement consideration.
Reconciliation of earnings used in calculating 2022 2021
earnings per share GBPm GBPm
------------------------------------------------ ------ ------
Basic and diluted earnings per share
Profit attributable to the ordinary equity
holders of the Company used in calculating
basic and dilutive earnings per share:
From continuing operations 14.1 2.3
From discontinued operations 2.0 1.3
Profit used as the basis of calculating
basic and diluted earnings per share 16.1 3.6
------------------------------------------------ ------ ------
The earnings used in calculating basic and diluted earnings per
share is the same.
Reconciliation of earnings used in calculating 2022 2021
adjusted earnings per share GBPm GBPm
------------------------------------------------ ------ ------
Basic and diluted earnings per share
Profit attributable to the ordinary equity
holders of the Company used in calculating
basic and dilutive earnings per share:
From continuing operations 14.1 2.3
From discontinued operations 2.0 1.3
Deduct Beyond Air settlement consideration (8.1) -
Adjusted profit used as the basis of
calculating adjusted basic earnings per
share 8.0 3.6
------------------------------------------------ ------ ------
Weighted average number of shares 2022 2021
---------------------------------------------- ------------------------ --------------------
Weighted average number of ordinary shares
used as the denominator in calculating
basic earnings per share 419,199,013 412,604,673
Adjustments for calculation of diluted
earnings per share:
Share options 23,799,062 22,402,289
Deferred shares - 823,467
Weighted average number of ordinary shares
and potential ordinary shares used as the
denominator in calculating diluted earnings
per share 442,998,075 435,830,429
---------------------------------------------- ------------------------ --------------------
10. Goodwill
2022 2021
GBPm GBPm
------------------------- ------ -------
At 1 January
Cost 4.8 88.3
Accumulated impairment - (83.0)
------------------------- ------ -------
Net book amount 4.8 5.3
------------------------- ------ -------
Year ended 31 December
------------------------- ------ -------
Opening net book amount 4.8 5.3
Impairment - 83.0
Disposal - (83.0)
Exchange differences (0.1) (0.5)
------------------------- ------ -------
Closing net book amount 4.7 4.8
------------------------- ------ -------
At 31 December
------------------------- ------ -------
Cost 4.7 4.8
Accumulated impairment - -
------------------------- ------ -------
Net book amount 4.7 4.8
------------------------- ------ -------
Following the cessation of the run-off period on 31 March 2021,
the fully impaired COPD goodwill assets were disposed of in the
prior year.
The carrying value of goodwill is allocated to the NIOX(R) CGU
and was generated in June 2015 on the acquisition of Aerocrine. The
recoverable amount of a CGU is assessed using a value in use model.
The value in use for the NIOX(R) CGU was calculated over a
five-year period using a discount factor of 13.1% (being a weighted
average cost of capital rate for the CGU). The calculations use
post-tax cash flow projections. Cash flows over five years have
been considered appropriate based on the product lifecycle. Cash
flows beyond the five-year period were extrapolated using the
estimated terminal growth rate stated below. The growth rate does
not exceed the long-term average growth rate for the business. The
discount rate used is post-tax and reflects specific risks relating
to the Group and uncertainties surrounding the cash flow
projections.
The key assumptions used for the valuation of the NIOX(R) CGU
are as follows:
Assumption Approach used to determine values
----------------------------------------- ---------------------------------------------------------------------------
Valuation basis Value in use
----------------------------------------- ---------------------------------------------------------------------------
Sales Based on past performance and management's expectations of market
development. Sales in 2023
are expected to return towards pre-pandemic levels. The growth rate for
2024-2027 reflects
a more cautious growth level than historic CAGR.
----------------------------------------- ---------------------------------------------------------------------------
Gross margin Based on past performance and management's expectations for the future
----------------------------------------- ---------------------------------------------------------------------------
Operating costs Management forecasts these costs based on the current structure of the
business, adjusting for inflationary increases but not reflecting any
future
restructurings or cost-saving measures
----------------------------------------- ---------------------------------------------------------------------------
Period of specified projected cash flows 2022 - 5 years
2021 - 5 years
----------------------------------------- ---------------------------------------------------------------------------
Long-term growth rate Terminal growth rates based on management's estimate of future long-term
average growth rate
2022 - 1%
2021 - 1%
----------------------------------------- ---------------------------------------------------------------------------
Discount rate Reflects specific risks relating to the relevant segments and the
countries in which they
operate
2022 - 13.1%
2021 - 11.5%
----------------------------------------- ---------------------------------------------------------------------------
Impact of possible changes in key assumptions - NIOX(R) CGU
The level of headroom available before sensitivities were
applied was GBP83.1 million. If the budgeted NIOX(R) sales in the
value in use calculation had been 35% lower than management's
estimates at 31 December 2022, the Group would have had to
recognise an impairment against the carrying amount of goodwill and
intangible assets of GBP16.4 million. This steep hypothetical
reduction in sales represents a slower recovery post the Covid-19
pandemic.
11. Trade and other payables
2022 2021
GBPm GBPm
--------------------------------- ------ ------
Trade payables 0.5 0.5
Social security and other taxes 0.8 0.6
Accruals 6.8 9.0
Other payables 0.5 0.3
Total trade and other payables 8.6 10.4
--------------------------------- ------ ------
Trade payables are unsecured and are usually paid within 30 days
of recognition.
Due to the short-term nature of current trade and other payables
, their carrying amount is considered to be the same as their fair
value.
12. Other reserves
Transactions with
Share option Treasury shares non-controlling
reserve Translation reserve interests Total other
reserve reserves
------------------
GBPm GBPm GBPm GBPm GBPm
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
At 1 January 2021 15.0 16.5 (0.9) (6.1) 24.5
Exchange
differences on
translation of
foreign
operations - (7.8) - - (7.8)
At 31 December
2021 15.0 8.7 (0.9) (6.1) 16.7
Employee share
option scheme 0.9 - - - 0.9
Exchange
differences on
translation of
foreign
operations - (1.9) - - (1.9)
At 31 December
2022 15.9 6.8 (0.9) (6.1) 15.7
------------------ ------------------ ------------------ ------------------ ------------------ ------------------
13. Cash generated from operations
Reconciliation of profit/ (loss) before tax to net cash
generated from operations:
Notes 2022 2021
GBPm GBPm
------------------------------------------------------ ------ ------ -------
Profit/ (loss) from continuing operations before tax 10.5 (2.1)
Profit from discontinued operations before tax 7 2.0 1.3
------------------------------------------------------ ------ ------ -------
Profit/ (loss) before tax 12.5 (0.8)
Adjustments for:
Finance income 6 (0.3) -
Finance costs 6 0.3 0.1
Depreciation charge of property, plant and equipment 4 0.1 -
Depreciation charge of right-of-use assets 4 0.6 0.8
Amortisation charge of intangible assets 4 3.9 4.1
Share based payment charge 3 0.9 -
Foreign exchange on non-operating cash flows (0.4) (2.1)
Changes in working capital:
(Increase)/ decrease in trade and other receivables (6.7) 13.4
(Increase)/ decrease in inventories (1.4) 1.1
Decrease in trade and other payables (2.6) (15.1)
------------------------------------------------------ ------ ------ -------
Cash generated from operations 6.9 1.5
------------------------------------------------------ ------ ------ -------
14. Related party transactions
There is no ultimate controlling party of the Group as ownership
is split between the Company's shareholders. The most significant
shareholders as at 31 December 2022 and 2021 are as follows:
Ownership interest
Name 2022 2021
----------------------------------------------------------- ------------------- -------------------
Griffiths R I 27.77% 29.88%
Harwood Capital LLP* 18.54% 18.59%
AstraZeneca PLC 16.94% 16.99%
* Harwood Capital LLP acts as investment manager to North Atlantic Smaller Companies Investment
Trust plc
There were no transactions with related parties during the years
ended 31 December 2022 and 2021 as classified under IAS24.
On 24 March 2021, the Company executed a Subscription for a
total of GBP5 million in additional equity finance at a price of
25.0p per share with three of its major institutional shareholders,
being North Atlantic Smaller Companies Investment Trust plc (to
which Harwood Capital LLP acts as investment adviser/manager),
Richard Griffiths and Lombard Odier Asset Management (Europe)
Limited. Each of the investments by Harwood Capital LLP and Richard
Griffiths constituted a related party transaction under the AIM
Rules for Companies and was disclosed as such at the time.
Employee benefit trust
In 2014 the Company set up an employee benefit trust for the
purposes of buying and selling shares on the employees' behalf.
Nothing was paid into the Trust by the Company during the year
ended 31 December 2022 and 2021.
No shares were purchased by the Trust during the years ended 31
December 2022 and 31 December 2021. No shares were allotted to the
Trust during the years ended 31 December 2022 and 31 December
2021.
15. Events occurring after the reporting date
On 8 February 2023, a Capital Reduction Scheme was concluded by
filing an order of the High Court with the Registrar of
Companies.
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END
FR FFFEIVAIIFIV
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March 21, 2023 03:00 ET (07:00 GMT)
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