RNS Number:3751P
Biotrace International PLC
04 September 2003
For Immediate Release: 07.00am - Thursday 4 September 2003
BIOTRACE INTERNATIONAL PLC
INTERIM RESULTS
for the six months ended 30 June 2003
Biotrace International Plc ("Biotrace", "the Company" or "the Group"), a leading
manufacturer and provider of industrial microbiology products and related
services and a developer and marketer of specialist life science products, today
announces its interim results for the six months ended 30 June 2003.
Highlights
* Sales up 59% to #8.61M (2002: #5.41M)
* Pre-tax profit up 162% to #1.61M (2002: #0.61M)
* Earnings per share up 123% to 3.25p (2002: 1.46p)
* Expansion of European distribution through acquisition of Maltec ApS.
* New 5 year agreement with Defence science and technology laboratories
(Dstl)
* #4.63M cash in hand at period end (31st Dec 2002: #3.63M)
* The Company also announced today, the acquisition of International
BioProducts Inc. for an initial $10m.
Commenting on the results, Terry Clements, Non-executive Chairman of Biotrace,
said:
"Biotrace continues to pursue vigorously the opportunities that exist to build a
substantially larger business and become a leading manufacturer and supplier of
industrial microbiology products. Through a successful acquisition strategy,
the Group is now operating on a broader business base with greater than 80% of
its turnover derived from direct sales, own brands and consumable products. The
Company has performed well, producing record interim sales and profits. It is
the view of the Board that this strategy will continue to deliver further growth
in sales and profits."
Further information:
Biotrace International Tel: +44 (0) 1656 641 400
Ian Johnson, Chief Executive Officer
Peter Morgan, Finance Director
Buchanan Communications Tel: +44 (0) 207 466 5000
Tim Anderson / James Strong
Overview:
2003 has seen a further step change in the Group's business, with strong organic
growth coupled with growth through acquisition. A significant Healthcare
business has been established which has expanded our customer base in addition
to the existing Industrial and Defence customers. Further customer access has
been gained through acquisition of European and N American distribution
organisations. After the period end, the Company announced that it has acquired
Maltec, a company distributing microbiology products in Denmark, Sweden and
Norway. Finally, the Company's product offering has been enlarged such that a
wide range of products can be purchased from a single source, adding strength to
our 'one stop shop' approach to gaining and retaining customers.
Financial Review:
Sales for the half-year increased by 59 per cent. to #8.61M (2002: #5.41M) with
profit before tax up 162 per cent. to #1.61M (2002: #0.61M). The increase in
sales was offset by a decrease in margins from 63 per cent. to 60 per cent. The
decrease in overall gross margins was largely as a result of a full contribution
during the period from Fred Baker Scientific ('FBS'), that sells a significant
amount of lower margin distributed product, which was offset to some extent by
increased sales of higher margin defence reagents. Exchange rate fluctuations
affected turnover during the period with the overall effect of reducing sales by
approximately #0.18M compared with the corresponding period.
Overheads excluding development expenditure increased from #2.44M to #3.12M as a
result of the acquisitions made last year. The Company continued to invest in
further technology and product development with R&D costs increasing 13 per
cent. over the corresponding period to #0.52M.
Operational cash flow increased from #1.08M in the first half of 2002 to #2.00M
in the first half of this year. Cash in hand increased from #3.63M at the end
of 2002 to #4.63M at the half year. Net assets increased by #1.33M since the
end of the last financial year to #12.55M. Basic earnings per share for the
half-year was 3.25p (2002: 1.46p).
In line with our current policy, no interim dividend is recommended, however, it
is our intention to pay a final dividend.
Operating Review:
Turnover has increased significantly, with all three focus markets performing
well. A strong feature of the Group is the high level of repeat consumable
business, which accounted for 88 per cent. of turnover in the period (2002: 83
per cent.). This provides stability and sustains growth in revenues, despite
some weakness in capital equipment sales.
Over 86 per cent. of the Group's sales were derived from its own direct sales
organisation, which preserves margins and provides a competitive advantage in
differentiating the Company's products and service levels. Sales growth was
achieved in all regions with respect to the first half of 2002. Europe grew 85
per cent. the Americas grew 17 per cent. and the rest of the world grew 16 per
cent. Following the acquisition of FBS, Europe currently dominates Group sales
at 72 per cent. of turnover, with 23 per cent. derived from the Americas.
The Group's own manufactured products account for 82 per cent. of turnover,
which further enhances margins. Approximately #1.50M of the Group's turnover
for the period was derived from sales of distributed products which have been
introduced to complement the Company's own brands and which together provided a
'one stop shop' for our customers.
Industrial:
This business develops, manufactures and markets Biotrace rapid hygiene testing
instruments and reagents (Xcel(R) & Clean-Trace(R)) aimed at food processing and
water treatment companies, non-instrument rapid hygiene tests (Pro-tect(R))
predominately for food service and catering businesses. Cogent Technologies
(Cogent) rapid sterility testing instruments and reagents for UHT dairy products
(BMLS system & kits), and complementary distributed products.
Sales #5.03M up 19 per cent.
Industrial sales accounted for 58 per cent. of Group turnover and grew 19 per
cent. to #5.03M in the first half of the year (2002: #4.21M). Biotrace hygiene
testing products had a slower start to the year than the corresponding period,
however, still perform well, producing sales growth of 10 per cent. over the
first half of 2002. Cogent sales continue their high growth rates, increasing
46 per cent. in the first half compared with the corresponding period. Sales of
distributed products grew 71 per cent. to #0.32M, accounting for 6 per cent. of
industrial sales.
Healthcare:
This business develops, manufactures and markets products for medical
microbiology, life science research and environmental monitoring for the
pharmaceutical industry. The main products sold are Ruskinn Technology work
stations, Biotrace rapid tests for cleanliness assurance of surgical instruments
and general hospital hygiene, Biotrace PPM pre-prepared culture media, air
samplers and various distributed products.
Sales #2.06M up 328 per cent.
Healthcare sales during the period were #2.06M (2002: #0.48M) and accounted for
24 per cent. of Group turnover. This significant uplift arose largely as a
result of the acquisition of FBS in October last year. Organic growth from
sales of the existing Ruskinn product range was 4 per cent. due mainly to a
slowing in purchases of capital equipment. All other product ranges arising
from the acquisition, including the Biotrace PPM culture media business,
continue to perform well and were in line with expectations.
A new product is shortly to be introduced specifically designed for cleanliness
testing of surgical instruments. The product, Protect-M, will be used to guard
against the transmission of variant CJD from improperly cleaned instruments.
The air sampler, designed for environmental monitoring in the pharmaceutical
industry under development at FBS prior to acquisition, is now nearing
completion ready for launch in the fourth quarter of 2003. This system will use
Biotrace PPM culture media, which is currently supplied to customers such as
Astra Zeneca.
Defence:
This business develops, manufactures and markets systems and reagents for the
rapid detection of biological weapons. A collaboration with Smiths Aerospace
was announced in May 2002 to market these products outside the MoD and in July
2001 a joint venture company, Lucigen Ltd. was set up with defence, science and
technology laboratories ("Dstl") to develop and manufacture specialised reagents
for detection systems.
Sales #1.52M up 112 per cent.
Sales of defence products were #1.52M (2002: #0.72M), up considerably on the
same period last year and accounted for 18 per cent. of turnover in the period.
Considerable sales of reagents were made in the first half of the year as demand
rose during the Iraq conflict, however, reagent sales have now returned to
historic levels. Significantly, orders are in hand for delivery in the second
half of 2003 for both reagents for the next generation of detection vehicles and
for further projects which are nearing completion, which is expected to expand
future sales. An additional detection system was supplied to Smiths Aerospace
during the period, which should translate into further reagent sales in due
course. Relationships were established during the period with Thales of France
and the Swedish equivalent of Dstl. Both organisations purchased hardware for
incorporation into custom detection suites. The Company also renewed its
agreement with Dstl, securing a further 5 years exclusivity to the patented MoD
technology for detection of biological agents.
Lucigen increased production in the period and made sales of #0.24M (2002:
#0.03M). The operation produced an operating profit of #0.08M in this period
against a loss of #0.10M in the corresponding period last year.
Outlook:
There are clear signs of consolidation in our industry following a period of
consolidation in the customer base. Many opportunities therefore exist to build
a substantially larger business and become a major manufacturer and supplier of
industrial microbiology products. With significant cash reserves and strong
cash flow from a high level of recurring consumable product sales, the Board can
implement its strategy to develop a strong stable business less dependant on any
one product, geographical region or sector. The Company has established a
significant presence in the healthcare market within a short timescale, which
now accounts for a quarter of sales revenues and is actively developing export
sales in the defence sector.
Biotrace will continue to expand its business by delivering a broader product
range through internal development and by appropriate and complimentary
acquisitions. Additionally, the Group is focusing on gaining customer access in
the major markets.
Whilst there still exists an element of uncertainty as regards capital equipment
sales and defence products, overall the business is not dependant on these
products for its growth. The Board is therefore confident that its strategy
should continue to deliver sustained growth.
Consolidated Profit and Loss Account
Unaudited Unaudited Audited
Six Months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Turnover (continuing operations) (1) 8,614 5,414 12,502
Cost of sales (3,436) (2,001) (4,522)
Gross profit 5,178 3,413 7,980
Administrative expenses
- ordinary (3,115) (2,442) (4,983)
- exceptional - - (162)
(3,115) (2,442) (5,145)
Development costs (517) (457) (971)
Group Operating Profit 1,546 514 1,864
Share of operating profit in joint venture 20 26 54
Total operating profits and share of joint 1,566 540 1,918
venture
Profit/(loss) on sale of tangible fixed 2 (2) (20)
assets
Interest receivable and similar income
- Group 65 104 177
- Joint Venture - - 1
Interest payable and similar charges
- Group (3) (4) (9)
- Joint Venture (25) (26) (53)
Profit on ordinary activities before 1,605 612 2,014
taxation
Tax on ordinary activities (384) (150) (431)
Profit on ordinary activities after 1,221 462 1,583
taxation
Minority interests (34) 67 81
Profit for the period 1,187 529 1,664
Dividend - final proposed - - (351)
Retained profit for the period 1,187 529 1,313
Earnings per ordinary share (2)
- basic 3.25p 1.46p 4.57p
- diluted 3.20p 1.43p 4.49p
- before exceptional items 3.25p 1.46p 5.00p
Consolidation Statement of Total Recognised Gains and Losses
Unaudited Unaudited Audited
Six Months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Profit for the period 1,187 529 1,664
Difference in net investment in foreign
enterprises
arising from changes in foreign
currency
exchange rates (19) 10 (66)
1,168 539 1,598
Prior year adjustment relating to accounting
policy
for deferred tax (note 8) - - 400
Total recognised gains and losses 1,168 539 1,998
Consolidated Balance Sheet
Unaudited Unaudited Audited
Six Months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Fixed assets
Intangible 4,113 2,800 4,258
Tangible 1,825 1,227 1,806
Investments in joint venture
Share of gross assets 745 741 749
Share of gross liabilities (602) (595) (602)
6,081 4,173 6,211
Current assets
Stocks 1,494 1,372 1,571
Debtors due in less than one year 2,792 2,377 2,715
Deferred tax asset 513 400 513
Other debtors due in more than one year 100 100 100
Debtors 3,405 2,877 3,328
Cash at bank and in hand 4,628 4,545 3,629
9,527 8,794 8,528
Creditors
Amount falling due within one year (2,477) (2,538) (2,929)
Net current assets 7,050 6,256 5,599
Total assets less current liabilities 13,131 10,429 11,810
Creditors
Amounts falling due after more than one (580) - (586)
year
Total Net Assets 12,551 10,429 11,224
Capital and reserves
Called up share capital 3,670 3,642 3,653
Share premium account 7,774 7,681 7,680
Merger reserve 390 301 390
Revaluation reserve 29 29 29
Profit and loss account (3) 219 (1,657) (949)
Equity shareholders' funds 4 12,082 9,996 10,803
Minority interest share in net assets 469 433 421
12,551 10,429 11,224
The net asset at 30 June 2002 and 31 December 2002 include prior year adjustment
relating to the adoption of Financial Reporting Standard 19: Deferred Taxation
(see note 8).
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six Months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Net cash inflow from operating activities 5 2,001 1,082 2,779
Returns on investments and servicing of
finance
Interest received 64 106 183
Interest paid (25) (30) (57)
Interest paid in respect of hire purchase agreements (3) - (5)
36 76 121
Taxation
Amounts paid in respect of
UK corporation tax (411) - (472)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (390) (576) (830)
Payments to acquire intangible fixed assets (4) (163) (175)
Receipts from sales of tangible fixed assets 18 2 20
(376) (737) (985)
Acquisition and disposals
Purchase of subsidiary undertakings - (510) (2,370)
Net overdrafts acquired with subsidiary - - (120)
Cash acquired with businesses - - 76
Purchase of businesses - (422) (429)
- (932) (2,843)
Equity Dividends paid (338) (287) (289)
Net cash inflow/(outflow) before financing 912 (798) (1,689)
Financing
Issue of ordinary share capital 111 89 89
Repayment of capital element of hire purchase
and finance lease agreements (17) (12) (22)
94 77 67
Net Cash inflow/(outflow)6 1,006 (721) (1,622)
Notes to the Interim Accounts
1 Turnover
An analysis of turnover by business unit is as follows:
Unaudited Unaudited Audited
Six months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Industrial 5,025 4,213 8,989
Healthcare 2,063 482 1,610
Military 1,526 719 1,903
5,414 12,502
An analysis of turnover by geographical area is as follows:
Unaudited Unaudited Audited
Six months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Europe 6,209 3,360 7,995
Americas 1,953 1,665 3,622
Rest of World 452 389 885
8,614 5,414 12,502
2 Earnings Per Share
Earning per ordinary share is based on the profit on ordinary activities after
taxation and minority interests and on 36.6 million ordinary shares in issue
during the period (30 June 2002 : 36.3 million ordinary shares; 31 December 2002
: 36.4 million ordinary shares). Diluted earnings per share is based on the
profit after taxation and minority interests and 37.1 million (30 June 2002 :
37.1 million; 31 December 2002 : 37.1 million) ordinary shares. The earnings
per share before exceptional items for 31 December 2002 is calculated using
profit after taxation and before exceptional items of #1,819,000, calculated as
follows:
Audited Year to
31.12.02
#'000
Profit after tax and minority interest 1,664
Less: Loss/(profit) on disposal of fixed assets 20
Add: Exceptional administrative expenses 162
Less: Tax on exception items (cost only) (27)
1,819
3 Profit and loss account
Unaudited Unaudited Audited
Six months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Accumulated losses brought forward (949) (2,196) (2,196)
Profit for the period 1,187 529 1,664
Exchange difference on translation (19) 10 (66)
Dividend proposed - - (351)
Accumulated profits/ (losses) carried forward 219 (1,657) (949)
4 Reconciliation of movements in Shareholders' funds
Unaudited Unaudited Audited
Six months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Profit for period 1,187 529 1,664
Dividend proposed - (351)
-
Shares issued 111 89 188
Exchange difference on translation (19) 10 (66)
Net increase to equity shareholders' funds
1,279 628 1,435
Opening equity shareholders' funds 10,803 9,368 9,368
Closing equity shareholders' funds 12,082 9,996 10,803
5 Reconciliation of operating profit to net cash flow from operating
activities
Unaudited Unaudited Audited
Six months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Operating profit 1,546 514 1,864
Depreciation and amortisation charges
463 342 648
Decrease in stocks 76 110 244
(Increase)/decrease in debtors
(78) (19) 53
(Decrease)/increase in creditors
(26) 109 (136)
Share in joint venture results
20 26 54
Currency adjustment on group company balances
- - 52
2,001 1,082 2,779
6 Reconciliation of net cashflow to movement in net funds
Unaudited Unaudited Audited
Six months Six months Year
to 30.06.03 to 30.06.02 to 31.12.02
#'000 #'000 #'000
Net cash inflow/(outflow) 1,006 (721) (1,622)
Cashflow from decrease/(increase in finance
lease financing 17 12 (11)
Change in net funds from cash flow 1,023 (709) (1,633)
Effect of exchange rate changes and non cash
movements (7) 3 (12)
Movement in net funds in period 1,016 (706) (1,645)
Net funds brought forward 3,604 5,249 5,249
Net funds carried forward 4,620 4,543 3,604
7 Analysis of net funds
31 December Cash Non-cash 30 June
2002 movements movements 2003
#'000 #'000 #'000 #'000
Cash at bank and in hand 3,629 1,006 (7) 4,628
Finance lease and hire
purchase agreements (25) 17 - (8)
Net funds 3,604 1,023 (7) 4,620
8 Prior Year Adjustment
The net assets at 30 June 2002 and 31 December 2002 include a prior year
adjustment in respect of the adoption of Financial Reporting Standard 19:
Deferred Taxation. The cumulative effect on the opening reserves at 1 January
2001 was #400,000.
9 Basis of preparation
The interim accounts included in the financial information are not audited, and
do not constitute full statutory accounts within the meaning of section 240 of
the Companies Act 1985. The comparative figures for the financial year ended 31
December 2002 are not the Company's statutory accounts for that financial year.
Those 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(2) or 3 of the Companies Act. The
Interim Report is being sent to registered shareholders. Further copies are
available from the Company's Registered Office at the Science Park, Bridgend,
CF31 3NA. The accounts have been prepared under the historical cost convention
and in accordance with applicable accounting standards and have been drawn up
under the same accounting policies as those used for the financial statements
for the year ended 31 December 2002.
This Interim Statement was approved by the Board of Directors on 3 September
2003.
This information is provided by RNS
The company news service from the London Stock Exchange
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