RNS Number:7231S
Cobra Bio-Manufacturing PLC
02 December 2003
For Immediate Release 2 December 2003
Cobra Biomanufacturing Plc
Preliminary Results
for the year ended 30 September 2003
Cobra Biomanufacturing Plc, the international manufacturer of
biopharmaceuticals, today announces its preliminary results for the twelve
months ended 30 September 2003.
Highlights
Operational:
* June 2003 Acquisition of additional biological manufacturing capacity
* June 2003 Placing and open offer raised #5.2m before expenses
* Major progress in the US during 2003 revenue up 158%
* 24 global customers, 27 programmes ongoing
Financial:
* Manufacturing revenue up 137% to #6.0 million (2002: #2.5 million)
* Profit before tax #0.8 million (2002: #0.9 million loss)
* Profit after tax #1.0 million (2002: #0.1 million profit)
* EPS up 590% to 6.9 pence (2002: 1.0 pence)
* Increase in gross margin to 57% (2002: 34%)
* Cash at bank #7.3 million (2002: #2.6 million)
Commenting on the results, Peter Fothergill, Executive Chairman said:
"We are extremely pleased with the excellent progress Cobra has made throughout
the year. The placing in June 2003 was well over subscribed and we look forward
to the additional facilities coming on-line in 2004. Together with the increase
in repeat business from existing clients and our strong headway in the US
market, 2004 promises to be an exciting year for Cobra."
For further information, please contact:
Cobra Biomanufacturing Plc Tel: +44 (0) 1782 714 181
David Thatcher, Chief Executive
Buchanan Communications Tel: +44 (0) 207 466 5000
Mark Court/ Rebecca Skye Dietrich
Chairman's Statement
Cobra's first full financial year as an independent Plc has fulfilled the
promise of the business on its listing on the Alternative Investment Market in
June 2002. Contract manufacturing revenue for the financial year ended 30
September 2003 of #6.0 million is 137% ahead of the previous year (2002
#2.5million) with a profit before tax of #0.8 million (2002 #0.9 million loss)
and cash flow from our existing Keele Facility remaining positive.
These results have been achieved through increased business development activity
particularly in the US following the opening of our office in Chicago in
November 2002. Revenue from the US, the world's largest biopharmaceutical
market, provided 24% of the Group's increased revenue in the year; supported by
repeat business from customers worldwide, representing 67% of the revenue for
2003.
Cobra's scale of potential business in the supply of early-stage clinical trials
provided the impetus behind a doubling of capacity in June 2003, through the
acquisition of an additional manufacturing site in Oxford ("the Oxford Facility
"), and a Placing and Open Offer raising #5.2 million before expenses, which was
5 times oversubscribed. The Oxford Facility will be a dedicated process
development and production unit. This will expand both DNA and Virus
manufacturing capacity, and importantly, will also allow for Phase I and II
Protein manufacture. This makes Cobra the only organisation that we know of able
to offer customers all forms of biopharmaceutical products during their critical
development phases.
During the financial year we completed contracts for 24 customers, we maintained
27 customer programmes and entered into an increasing number of agreements.
These agreements provide the option for Cobra to supply late stage clinical
trial materials and in-market supply and they cover products with a relatively
high probability of clinical and commercial success. The Group is currently
investigating ways of accessing larger scale facilities in anticipation of such
an outcome.
It should be appreciated that even without such facilities, our business model
provides for the Group to participate in a customer's product success via
technology transfer fees and/or royalties on sales where products incorporate
the Group's patents and know-how.
Accordingly, we continue to research new ways of formulating and manufacturing
with several new patent applications in progress. During the year our unique DNA
process patent was granted in Europe following its earlier approval in the US.
This patent relates to the large-scale manufacture of Plasmid DNA medicines and
vaccines to the rigorous quality standards required by the regulatory
authorities.
The funding environment for biotechnology companies in the UK and Europe remains
an issue, and many of these companies are Cobra's potential customers. The US
market remains relatively buoyant and a further expansion of business
development in the US is underway. Recruitment of high calibre people is also
now taking place in Oxford to progressively staff the new facility with the
result that over the next financial year employee numbers will almost double. We
anticipate key appointments in Human Resource Management, Account Management and
Quality Assurance.
As indicated, further expansion is now under review and as the scale of the
business increases so too will the range of corporate development options on the
one hand and corporate compliance requirements on the other. It is therefore
with pleasure that I am able to announce from today the appointment of a third
non-executive director, Michael Gatenby (see separate press release), a
chartered accountant who graduated from Cambridge University with an Honours
degree in Law, followed by a successful career in the City.
Cobra is a knowledge-led business driven by its highly qualified and experienced
staff, whose commitment and enthusiasm have resulted in demonstrable success.
Maintaining this momentum in the present environment will be challenging, but
the fundamentals are in place to leverage our position in the world-wide
marketplace for biopharmaceuticals with market leadership as our goal.
G Peter Fothergill
Executive Chairman
2 December 2003
Chief Executive's Review
The year ended 30 September 2003 was a critical year in Cobra's development,
being the first full financial year as an independent Plc. Under challenging
market conditions, we have increased our contract manufacturing revenue by 137%
to #6.0 million (2002 #2.5 million) and generated a pre-tax profit of #0.8
million (2002 #0.9 million loss). The foundation for further expansion was laid
with a further successful fundraising of #5.2 million before expenses and the
acquisition of the new Oxford Facility, doubling our present capacity. In
addition, during 2003 we concluded a number of deals, which demonstrate the
value of the Group's technology.
Our Business
Cobra's mission is to work in partnership with our customers to accelerate the
clinical development of their products and in so doing add significant value to
their businesses. This added value is achieved by the application of the most
advanced manufacturing technologies available that deliver products to our
customers of the highest quality standards. Cobra specialises in the manufacture
of new wave, high value, potent medicines, whose origins are in the DNA
revolution and whose commercialisation requires the development of innovative
manufacturing solutions.
Business Climate
Manufacturing Revenue 2003 2002 Increase
by region (#000's)
UK 2,114 843 151%
US 1,426 553 158%
Europe 711 972 -27%
Rest of the World 1,769 172 928%
Total 6,020 2,540 137%
The Group has been able to increase manufacturing revenue in a difficult trading
environment. Revenue from the US has increased by 158%, this is the primary
target market for our services because 75% of the global biotechnology research
and development spend is in the US. We have increased revenue by 151% in the UK,
the location of the most exciting product oriented companies in Europe. In 2003,
Continental Europe revenue dropped by 27%; a reflection of the appetite for
biotechnology funding in Europe. The strength of Cobra's offering is validated
by our increased sales under such an adverse trading environment. We have also
been able to establish strong sales in regions not normally associated with
biotechnology, in particular Australia and South Africa, with revenue up 928% in
the Rest of the World.
Although the reduced level of funds flowing into the biotechnology sector has
weakened the overall market for Phase I/II biomanufacturing, the reduction in
demand has been offset by the increasing involvement of non-governmental
organisations in vaccines development and also investment by government agencies
in measures to protect against bio-terrorism.
During the year the sentiment towards the US biotechnology sector has rebounded
and 2003 is set to become the second best year ever in terms of financing. This
factor coupled with the predominance of the US in this sector, makes Cobra's
penetration of the US market pivotal to our continued growth and we will
increase our sales and marketing effort in the US through 2004.
Cobra's Strategy
The Group's short-term goal is to become a leader in the supply of high value,
high potency biopharmaceuticals for early phase clinical trials with a mid-term
objective of moving into the supply of commercial quantities of these drugs. The
foundation of this growth is in the application of those innovative
manufacturing technologies, which can capture long-term value for the Group.
Achieving the mid-term objective is the critical next stage of the Group's
development. Biopharmaceutical drugs require expensive specialist manufacturing
facilities. There is a significant risk of product failure in clinical testing,
and investment in manufacturing plant is high risk for all pharmaceutical
companies. To manage such risks contract manufacturers like Cobra need a diverse
pipeline of promising projects feeding through from early clinical trials.
Cobra's current strategy is to develop a pipeline of successful innovative
products in early clinical trials to mitigate the effect of drug failure on
investment in commercial manufacture.
Expansion in Oxford
In June 2003, the Group acquired the Oxford Facility, previously operated by
Accentus Plc (a division of AEA Technology Plc). This acquisition is the
keystone in our expansion strategy. The facility, originally built by British
Biotech Plc for the GMP ("Good Manufacturing Practice") manufacture of vaccines,
is being completely refurbished and will more than double the Group's current
capacity.
Three GMP manufacturing suites, one microbial, one animal cell and one equipped
to manufacture either type of product will be fully validated and operational by
the second quarter of 2004. This expansion will give Cobra the capacity to
support up to six GMP microbial and four animal cell programmes simultaneously
and will also double our process development capability.
Our Success is Our Clients Success
Cobra not only manufactures products per se but also provides a comprehensive
support service from cloning through to preparation of the chemistry,
manufacturing and controls ("CMC") dossier for regulatory submission and then
supporting our clients with their ongoing dialogue with the regulatory agencies.
The success of this business is founded on excellence in molecular biology, an
innovative approach to bioprocessing, an overriding commitment to quality and
where possible, exceeding the requirements of the regulatory authorities. This
core competency in advanced molecular biology allows Cobra to manufacture all
the major types of biopharmaceutical products; Plasmid DNA, genetically
engineered Viruses, recombinant Proteins and Cell Therapies.
Molecular and Cell Biology
Manufacturing revenue 2003 2003% 2002 increase
by product (#000's)
DNA 3,189 53% 1,236 158%
Virus 1,063 18% 554 92%
Protein 1,576 26% 565 179%
Cell line 192 3% 185 4%
Total 6,020 2,540
Although Cell Line construction revenue in 2003 only increased by 4%, molecular
biology underpins Cobra's competitive edge. Most projects handled by the Group
require upfront molecular biology to tailor the final production cell line for
scale up and regulatory approval. In addition, our Molecular Biology Team
continues to engineer proprietary cell lines; the cornerstone of our process
intellectual property. This research is aimed at improving the productivity and/
or safety of our partners' products in ways that can significantly add value to
their programmes. Our Cell Line intellectual property ranges from UCOE, an
animal cell expression technology, to Cobra's microbial strains designed to
enhance quality: ORT(R) for antibiotic free manufacture of biopharmaceuticals;
high potency strains of Salmonella for oral delivery of vaccine antigens and
strains of Escherichia coli and Bacillus subtilis genetically engineered to
reduce contaminant profiles.
Plasmid DNA and DNA Vaccines
DNA Revenue 2003 2003%
(#000's)
DNA HIV/AIDS vaccines 2,033 64%
DNA other vaccines 209 6%
Total DNA vaccines 2,242 70%
DNA other 947 30%
Total 3,189
Cobra has a global reputation for the quality of its Plasmid DNA. DNA
manufacture represented 53% of total revenue for 2003, a 158% increase on 2002.
We have continued to consolidate our position as a major manufacturer of DNA
vaccines (70% of the total DNA revenue for 2003) and a leader in the provision
of DNA HIV/AIDS vaccines (64% of the total DNA revenue for 2003). The current
mode of vaccination used in DNA vaccination programmes uses a prime with Plasmid
DNA then either a boost with DNA or with a genetically engineered Virus. Cobra
is the only contract manufacturer providing a "one-stop shop" for all these
strategies.
HIV/AIDS Vaccines
Cobra now supports three DNA HIV/AIDS vaccine programmes sponsored by the
International AIDS Vaccine Initiative ("IAVI"), two for the South African AIDS
Vaccine Initiative ("SAAVI") and two for the EUROVAC/CHIVAC Consortium. The lead
vaccine candidate globally is a DNA vaccine approach (HIV.A) manufactured by
Cobra. The vaccine was developed by Professor Andrew McMichael, at the
University of Oxford and Professor Bwayo at the University of Kenya. This
product has just completed a blinded Phase I/II trial at St Mary's Hospital,
London and in Kenya, the results of which will be available in the first quarter
of 2004. A prime-boost strategy with a DNA.HIVA prime and boosting with MVA.HIVA
is being investigated in an additional trial in the UK. A second vaccine,
DNA.RENTA sponsored by Professor Andrew McMichael's laboratory was also
manufactured by Cobra in 2003. Phase I trials are expected to start in the first
quarter of 2004. A third vaccine sponsored by IAVI and originating from
Professor Peter Liljstrom's laboratory at the Karolinska Institute, Stockholm
has been prepared. Pre-clinical studies will begin in the fourth quarter of
2003. Clinical evaluation is expected to start in the third quarter of 2004.
In November 2002 we announced a long-term manufacturing deal with SAAVI
providing the Group with the option to manufacture for the South African market
and also giving the Group the commercialisation rights on the vaccine for the
rest of the world. These vaccines have now been manufactured and will enter
clinical trials in 2004 in the US, sponsored by the National Institute of Health
HIVTN Network.
Multiple Sclerosis
This year we initiated work on two DNA vaccines against multiple sclerosis
developed by Bayhill Therapeutics Inc. a spin out of Stanford University in the
US. Multiple sclerosis is a degenerative disease caused by the destruction of
nerve tissue by the body's immune system. We are pleased to be working with such
an innovative company, which has invented a pioneering approach to prevent the
devastating affects of autoimmune disease.
Virus Manufacture
Revenue from Virus manufacture increased by 92% in 2003, driven largely by a
prostate gene therapy project with the Australian pharmaceutical company, Mayne
Pharma. We are pleased to report that our other client in prostate cancer gene
therapy, ML Laboratories Plc, entered a Phase II clinical trial, and we have
also initiated a contract for the manufacture of lenti-virus with Europe's
leading gene therapy company; Oxford Biomedica Plc.
Protein Manufacture
Group revenue from Protein manufacture rose by 179% in 2003, largely due to the
process development and GMP production of a generic interferon for clinical
evaluation. We were also pleased to begin work with Dr Shirley Longacre of the
Institute Pasteur on an exciting protein sub-unit vaccine for malaria. Sponsored
by the Institute, the French Ministry of Research, the European Union and the
World Health Organisation this vaccine is manufactured in baculovirus and is the
only vaccine, which shows sterilising immunity in a Sri Lankan macaque model. In
November 2002 we announced that one of our customers, Evolutec Limited, had
obtained permission to carry out a Phase I clinical trial for a Protein
biopharmaceutical to treat conjunctivitis. This project was the first clinical
programme involving a Protein manufactured by Cobra under scrutiny from the US
Food and Drugs Agency ("FDA").
Protein biopharmaceuticals constitute over 90% of the global research and
development spend on biopharmaceuticals. We expect Protein manufacture will be a
growth area for Cobra as the Group gains a track record for delivery in this
sector.
Cell Therapies
The use of live cells or organisms as pharmaceutical agents or vaccines is by no
means new. However the use of molecular biology to manipulate and enhance the
safety and efficacy of such organisms is a new and fertile area of clinical
research. In July 2003 it was a pleasure to announce a long-term partnership
with the US company Advaxis Inc for the manufacture of a vaccine against
cervical cancer. Based on the pioneering work of Yvonne Patterson of the
University of Pennsylvania, this vaccine is delivered by a live genetically
engineered but harmless strain of Listeria. Cobra is also working on a long-term
project with the UK government's Defence Science and Technology Laboratories ("
DSTL") on an oral vaccine approach that could be used to immunise against
bio-terrorist instigated and other diseases.
Outlook
Cobra Biomanufacturing Plc has a unique offering in the biopharmaceutical
sector. Based on the advanced application of genetic engineering and
bio-processing approaches we are able to significantly enhance the value of our
clients' products and in exchange develop long-term value flowing back to the
Group. We have demonstrated over the past year that the value of our process
know how can be captured through commercial manufacturing agreements, through
royalty deals on process intellectual property rights and in some cases through
the acquisition of rights to commercialise the products themselves in designated
territories.
Dr David Thatcher
Chief Executive
2 December 2003
Financial Review
Cobra is a knowledge-led business, built and sustained through the innovation of
its employees. However we also recognise that financial discipline is critical
if the Group is to attain the profitable growth required to create long-term
value for our shareholders.
Profit after tax for the financial year 2003 was #1.0 million (2002 #0.1
million) and its achievement is a reflection of how each business unit of the
Group responded to the target set at the beginning of the financial year, both
in terms of securing and delivering revenue, and also ensuring that their
expenditure remained within budget.
Revenue
Revenue in 2003 from contract manufacture was up by 137% to #6.0 million (2002
#2.5 million). This growth was achieved by an increase in productive staff, a
greater utilisation of our existing assets and the successful launch of the new
#2 million 270 litre fermentation suite at our Keele facility at the beginning
of the financial year. This new suite contributed 30% (#1.8 million) of our
total revenue.
The Group has again maintained its diversity of product offering in 2003, with
protein and virus contracts contributing 44% of the total revenue (2002 44%).
DNA remains our lead product generating 53% of the total revenue in 2003 (2002
49%). Of the DNA segment 64% was from the manufacture of DNA HIV/AIDS vaccines,
using our novel ORT(R) vector. With Cobra currently supplying 7 out of the 28
clinical trials currently being conducted worldwide, we feel we are justified in
claiming that we are one of the world's leading outsourced supplier of HIV/AIDS
vaccines.
Cobra delivers product globally. Revenue from the US in 2003 increased by 158%
to #1.4million (2002 #0.6 million), this represents 24% (2002 22%) of our total
revenue. The growth in US revenue is primarily due to the successful launch of
our sales office in Chicago last November 2002 and is extremely encouraging
considering that 75% of Cobra's market is in the US.
Profitability and Margins
#000's 2003 2002
Manufacturing revenue 6,020 2,540
Gross profit margin 57% 34%
Group operating profit 732 *(807)
Group operating margin 12% *-32%
EBITDA 1,032 *(565)
PBT 817 (937)
EPS 6.9p 1.0p
Adjusted EPS 6.9p (9.6)p
* excludes discontinued R&D operations
Gross profit margin for the year increased to 57% (2002 34%). This was primarily
due to the greater utilisation of our existing Keele facility, and cost of
consumables coming in less than budget.
The Group generated an operating profit of #0.7 million (2002 #0.8 million loss
*), providing an operating margin for 2003 of 12% (2002 -32%*).
The earnings before interest, taxation, depreciation and amortisation ("EBITDA")
for the Group for 2003 were #1.0million (2002 #0.6million loss*) and the profit
before tax ("PBT") was #0.8 million (2002 #0.9 million loss).
Earnings per share ("EPS") for 2003 stands at 6.9 pence (2002 1.0 pence), the
adjusted EPS 6.9 pence (2002 -9.6 pence) is included to highlight the underlying
growth in earnings exclusively from continuing manufacturing operations.
Contract manufacturing provided a 21% return on assets exclusively employed on
that class of business (2002 -32%), as the Keele Facility approaches full
capacity.
Research and Development
Cobra recognises that it has achieved its competitive advantage in the complex
market of biopharmaceutical manufacturing, through investment in research and
development. To maintain its position, Cobra invested #0.2 million in 2003 (2002
#0.2million*) on improving its manufacturing process and maintaining it's
intellectual property portfolio.
* 2002 comparatives exclude discontinued operations
#000's 2003 2002
Operating cash inflow ** 445 (3,045)
Capital investment
The Keele facility (480) (2,040)
Oxford freehold (1,387) -
The Oxford facility (490) -
(2,357) (2,040)
Inflows
Share issue 4,684 6,298
Disposal of R&D - 3,175
Mortgage 1,088 -
R&D tax credit 497 240
Leasing & interest 290 314
6,559 10,027
Opening cash 2,615 (2,327)
Closing cash 7,262 2,615
** includes R&D tax credit repayments to
the Group's former parent undertaking (see
taxation section)
Acquisitions and Funding
On 23 June 2003, the Group completed the acquisition of additional biologics
capacity, in Oxford, UK ("the Oxford Facility"). This acquisition represents a
significant step in Cobra's development, in that it will not only double our
existing Phase I/II capability, but it will allow us to expand our customer
base, thereby increasing the likelihood of one of Cobra's customers entering the
more lucrative phase III/in market product supply.
The acquisition was for the freehold property and the existing plant and
equipment for a total net cost of #1.4 million. The purchase of the freehold
property at the Oxford Facility was partially funded by way of an 11-year #1.1
million property mortgage loan with HSBC Bank Plc.
To fund the post acquisition investment required to transform the Oxford
Facility into a multi-product facility by the end of the second quarter of 2004,
the Company issued a further 6.5 million 10p ordinary shares at 80p each,
raising #5.2 million (#4.7 million net of issue costs).
Cash Flow (including Short Term Deposits)
The cash balance (including short deposits) increased during the year by #4.7
million to #7.3 million (2002 #2.6 million). The source and application of those
funds during the year are described in the table opposite.
Taxation
At 30 September 2003, the Group had tax losses carried forward of #12.5 million,
ensuring that even though the Group is now profitable, it will not be obliged to
pay UK corporation tax for the foreseeable future. Under Financial Reporting
Standard ("FRS") 19 the Group is entitled to partially recognise this through a
deferred tax asset in the Balance Sheet, included in debtors. As a result the
profit and loss account in 2003 has been credited with deferred taxation of #0.2
million (2002 nil), as recognition of its recovery out of future profits.
The taxation figure for the financial year 2002 (#1.0 million) relates to
research and development tax relief, available to the Group under Schedule 20 of
the Finance Act 2000, in respect of the financial years 2000, 2001 and 2002. The
cash receipts are repaid in full to the Group's former parent undertaking
(included in operating cash), under an agreement entered into on 6 June 2002.
Peter Coleman
Finance Director
2 December 2003
Cobra Biomanufacturing Plc
Group Profit and Loss Account for the Year Ended 30 September 2003
Notes 2003 2002
Turnover
Continuing operations 6,020,293 2,539,812
Discontinued operations - 30,000
Group turnover 2 6,020,293 2,569,812
Cost of sales (2,617,732) (1,700,067)
Gross profit 3,402,561 869,745
Research and development (199,976) (1,916,254)
Sales marketing and distribution costs (384,299) (65,015)
Administrative expenses (2,086,410) (2,215,260)
Operating profit/(loss)
Continuing operations 731,876 (806,524)
Discontinued operations - (2,520,260)
Group operating profit /(loss) 731,876 (3,326,784)
Profit on transfer of discontinued operations - 2,517,810
Discontinued reorganisation costs - (123,501)
Profit/(loss) on ordinary activities before investment
income, interest and taxation 731,876 (932,475)
Bank interest receivable 131,528 27,264
Interest payable (46,523) (32,184)
Profit/(loss) before tax 816,881 (937,395)
Taxation 225,000 1,025,992
Retained profit for the year 1,041,881 88,597
Earnings/(loss) per share
Basic 5 6.9p 1.0p
Adjusted 5 6.9p (9.6)p
Diluted 5 6.9p 1.0p
Statement of total recognised gains and losses
There are no recognised gains or losses other than the profit for the year of
#1,041,881 in the year ended 30 September 2003 and the profit of #88,597 in the
year ended 30 September 2002.
Cobra Biomanufacturing Plc
Group Balance Sheet at 30 September 2003
Notes 2003 2002
# #
Fixed assets
Tangible assets 4,925,058 2,168,393
Investments - -
4,925,058 2,168,393
Current assets
Stocks and work in progress 206,919 441,178
Debtors 2,480,378 2,373,389
Cash 7,261,751 2,614,546
9,949,048 5,429,113
Creditors: amounts falling due within one year (3,151,602) (2,612,744)
Net current assets 6,797,446 2,816,369
Total assets less current liabilities 11,722,504 4,984,762
Creditors: amounts falling due after more than one year (1,173,497) (162,292)
Net assets 2 10,549,007 4,822,470
Capital and reserves
Called up share capital 6 1,950,000 1,300,000
Share premium 6 9,632,493 5,597,837
Merger reserve 6 29,728,872 29,728,872
Profit and loss account 6 (30,762,358) (31,804,239)
Equity shareholders' funds 10,549,007 4,822,470
Cobra Biomanufacturing Plc
Group Statement of Cash Flows for the Year Ended 30 September 2003
2003 2002
Notes # #
Net cash inflow/(outflow) from operating activities 3 444,816 (3,031,757)
Returns on investment and servicing of finance
Interest received 131,528 27,264
Interest element of finance lease rental payments (46,523) (32,184)
85,005 (4,920)
Taxation
R&D tax credit 496,522 239,608
496,522 239,608
Capital expenditure
Payments to acquire tangible fixed assets (2,356,888) (2,040,253)
(2,356,888) (2,040,253)
Acquisitions and disposals
Transfer of discontinued operations - 3,298,391
Reorganisation costs - (123,501)
- 3,174,890
Net cash outflow before the management of
liquid resources and financing (1,330,545) (1,662,432)
Management of liquid resources
Increase in short term deposits (4,427,964) (2,350,000)
Financing
Issue of ordinary shares 5,200,000 7,000,000
Share issue costs (515,344) (702,163)
New long-term loans 1,087,500 -
Repayment of capital element of finance leases (71,228) (81,469)
Lease finance acquired 276,822 400,598
Decrease in amount owed to former parent undertaking - (13,804)
5,977,750 6,603,162
Increase in cash 219,241 2,590,730
Cobra Biomanufacturing Plc
Reconciliation of Net Cash Flow to Movement in Net Funds
Notes 2003 2002
# #
Increase in cash 219,241 2,590,730
Cash inflow from increase in loans (1,087,500) -
Repayment of capital element of finance leases 71,228 81,469
Lease finance acquired (276,822) (400,598)
Decrease in amount owed to former parent undertaking - 13,804
Cash outflow to short term deposits 4,427,964 2,350,000
Change in net funds resulting from cash flow 3,354,111 4,635,405
Other - 164,001
Movement in net funds during the period 3,354,111 4,799,406
Net funds/(debt) at the start of the year 2,320,823 (2,478,583)
Net funds at the end of the year 4 5,674,934 2,320,823
Cobra Biomanufacturing Plc
Notes to the Financial Statements for the Year Ended 30 September 2003
1. Basis of consolidation and presentation of preliminary statements
The preliminary statements comprise the accounts of Cobra Biomanufacturing Plc
and its subsidiary undertaking for the year ended 30 September 2003.
2. Turnover and segmental analysis
(a) Group turnover by geographic segments
All turnover originates from within the UK. The geographical analysis of
turnover by destination is shown as follows:
2003 2002
# #
Continuing operations
United Kingdom 2,114,096 842,714
North America 1,425,841 553,280
Europe 711,303 971,737
Rest of the World 1,769,053 172,081
6,020,293 2,539,812
Discontinued operations
United Kingdom - 10,000
North America - 20,000
- 30,000
6,020,293 2,569,812
(b) Segmental analysis by class of business
The Group currently operates in one principal areas of activity, that of
contract manufacture.
The analysis by class of business of the Group's turnover, profit/(loss) on
ordinary activities before tax and net assets is as follows:
SsegSeS Contract manufacture Licensing Total
2003 2002 2003 2002 2003 2002
# # # # # #
Group turnover
Continuing operations 6,020,293 2,539,812 - - 6,020,293 2,539,812
Discontinued operations - - - 30,000 - 30,000
6,020,293 2,539,812 - 30,000 6,020,293 2,569,812
Cost of sales (2,617,732) (1,700,067) - - (2,617,732) (1,700,067)
Research and development (199,976) (219,852) - (1,696,402) (199,976) (1,916,254)
Selling, marketing & (384,299) (34,843) - (30,172) (384,299) (65,015)
distribution
Administration expenses (2,086,410) (1,391,574) - (823,686) (2,086,410) (2,215,260)
Segmental operating profit/ 731,876 (806,524) - (2,520,260) 731,876 (3,326,784)
(loss)
Profit on transfer of - 2,517,810
discontinued operations
Discontinued reorganisation - (123,501)
costs
Bank interest receivable 131,528 27,264
Interest payable (46,523) (32,184)
Profit/(loss) before taxation 816,881 (937,395)
Net operating assets 3,561,573 2,501,647 - - 3,561,573 2,501,647
The net operating assets are reconciled to shareholders' funds as follows:
Segmental net assets 3,561,573 2,501,647
Cash at bank and in hand 7,261,751 2,614,546
Corporation tax 323,278 786,385
Deferred taxation 225,000 -
Amounts owed to former parent undertaking (323,278) (786,385)
Obligations under finance leases (499,317) (293,723)
Net assets 10,549,007 4,822,470
3. Reconciliation of operating loss to net cash flow from operating activities
2003 2002
# #
Operating profit/(loss) 731,876 (3,326,784)
Depreciation of tangible fixed assets 299,837 432,993
Decrease/(increase) in stock 234,259 (162,146)
Increase in debtors (259,854) (834,975)
Decrease/(increase) in creditors (561,302) 859,155
Net cash inflow/(outflow) from operating activities 444,816 (3,031,757)
4. Analysis of net movement in net funds
Cash
2002 Flow 2003
# # #
Cash at bank and in hand 264,546 219,241 483,787
Bank loan - (1,087,500) (1,087,500)
Short-term deposits* 2,350,000 4,427,964 6,777,964
Finance leases (293,723) (205,594) (499,317)
2,320,823 3,354,111 5,674,934
The majority of finance leases are arranged in respect of sale and leaseback
transactions. Accordingly new finance leases are shown as a separate component
of cash flow in the cash flow statement.
* Short-term deposits are included within the cash at bank and in hand on the
balance sheet.
5. Earnings per ordinary share
The calculation of basic earnings per ordinary share is based on earnings of
#1,041,881 (2002 #88,597) and on 15,124,531 ordinary shares (2002 8,438,953)
being the weighted average number of shares in issue during the year.
The basic and adjusted earnings per share for the year ended 30 September 2002
has been restated to reflect the dilutive effect of the placing and open offer
of 6,500,000 ordinary 10 pence shares at 80 pence per share on 23 June 2003.
2003 2002
No. No.
Basic weighted average number of shares 15,124,531 8,438,953
Dilutive potential ordinary shares:
Employee share options - -
15,124,531 8,438,953
The adjusted earnings per share is shown to highlight the underlying earnings
trend and is calculated using the same number of ordinary shares as the basic
earnings calculation referred to above and the amounts shown below:
2003 2002
# #
Profit for the financial year 1,041,881 88,597
Adjustments
Profit on transfer of R&D operations - (2,517,810)
Discontinued reorganisation costs - 123,501
Discontinued R&D operations - 2,520,260
R&D tax credit - (1,025,992)
Adjusted earnings 1,041,881 (811,444)
6. Reconciliation of shareholder's funds and movement on reserves
Share Share Merger Profit &
capital premium Reserve loss account Total
# # # # #
As at 1 October 2002 1,300,000 5,597,837 29,728,872 (31,804,239) 4,822,470
Issue of shares 650,000 4,550,000 - - 5,200,000
Issue costs - (515,344) - - (515,344)
Profit for the year - - - 1,041,881 1,041,881
At 30 September 2003 1,950,000 9,632,493 29,728,872 (30,762,358) 10,549,007
The Annual Report will be posted to shareholders on 12 January 2004. Further
copies will be available on request from the Company Secretary, Cobra
Biomanufacturing Plc, The Science Park, Keele, Staffordshire, ST5 5SP.
The Annual General Meeting will be held on 26 February 2004 at 11.00 am at
Collins Stewart Limited, 9th Floor, 88 Wood Street, London, EC2V 7QR.
The figures for the year ended 30 September 2003 do not constitute full accounts
within the meaning of Section 240 of the Companies Act 1985. The figures for the
year ended 30 September 2003 are audited. The preliminary announcement is
prepared on the same basis as set out the previous year's statutory accounts.
Those accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
Statutory Accounts for 2003 will be delivered to the Registrar of Companies
following the Annual General Meeting.
The board of directors of Cobra Biomanufacturing Plc approved the Preliminary
Results on 2 December 2003.
--------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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