TIDMDXRX
RNS Number : 5982N
Diaceutics PLC
26 September 2023
Diaceutics PLC - Half Year Results
Diaceutics reports 32% growth in revenue and reaffirms full year
outlook
66% growth in recurring revenues to GBP4.6 million, representing
47% of revenues in H1 2023
Order book growth of 43% to GBP24.1 million providing good
forward visibility
Four enterprise-wide engagements secured by end H1 2023
Core DXRX platform adoption by large pharma customers driving
business momentum
Daily alerts launched for DXRX Signal enabling pharma clients to
identify patients previously not receiving the most appropriate
treatment due to lack of timely data
Diaceutics becoming the primary commercialisation partner for
pharma launching precision medicines, with 21 of the top 30 global
pharma companies as Diaceutics' customers
First of its kind virtual lab conference was successfully held
in July 2023 - labs on the DXRX platform grows to 900
Strong balance sheet with cash of GBP17.9 million - fully funded
to execute significant growth plans
Peter Keeling stepping down as CEO - will remain with the
Company to advance corporate development
Ryan Keeling appointed as CEO Designate
Belfast and London, 26 September 2023 - Diaceutics PLC (AIM:
DXRX) , a leading technology and solutions provider to the
pharmaceutical industry, today announces continued strong
performance and growth across its business and its unaudited half
year results for the six months ended 30 June 2023.
H1 2023 Financial Highlights:
H1 2023 H1 2022 Change
Revenue GBP9.9m GBP7.5m +32%
-------- -------- ---------
Platform based revenue 83% 76% +7 ppts
-------- -------- ---------
Recurring revenue percentage of
overall revenue 47% 37% +10 ppts
-------- -------- ---------
Gross Profit GBP8.7m GBP6.3m +38%
-------- -------- ---------
Gross Profit Margin 88% 84% +4 ppts
-------- -------- ---------
EBITDA -GBP0.2m GBP0.3m -GBP0.5m
-------- -------- ---------
Loss before tax -GBP2.0m -GBP1.1m -GBP0.9m
-------- -------- ---------
Cash inflow from operations GBP0.7m GBP3.3m -GBP2.6m
-------- -------- ---------
Net cash GBP17.9m GBP20.4m -GBP2.5m
-------- -------- ---------
Order book* GBP24.1m GBP10.2m +GBP13.9m
-------- -------- ---------
-- Revenue for the six months to 30 June 2023 increased 32%
to GBP9.9 million (H1 2022: GBP7.5 million), 25% on a constant
currency basis
-- Recurring revenue grew 6 6 % to GBP 4.6 million and represents
47% of revenues in the period (H1 2022: GBP 2.8 million
and 37% of revenue in the period)
-- 43% increase in order book* at 30 June 2023 to GBP24.1 million,
up from GBP16.9 million at December 2022, with GBP6.8 million
of the order book expected to be realised in H2 2023
-- Recurring revenue now represents 94% or GBP22.7 million
of the order book
-- EBITDA loss of -GBP0.2 million in line with accelerated
investment strategy announced in January 2023
-- Cash at 30 June 2023 was GBP17.9 million (31 December 2022:
GBP19.8 million), reflecting the acceleration in platform
and data investment
H1 2023 Operational Highlights :
-- Diaceutics worked with 50 therapies in H1 2023, up 22%,
across 37 customers (H1 2022: 41 therapies across 34 customers)
-- Four enterprise-wide engagements secured by 30 June 2023
with a total contract value of $20.1 million to deliver
insight data solutions for up to three years across 25 pharma
therapies. An enterprise-wide engagement is characterised
by a customer deploying the DXRX platform across three or
more of the precision medicines in their portfolio
-- DXRX Signal product enhanced and now providing daily alerts.
This ground-breaking innovation will provide Diaceutics'
customers with even more timely data to identify patients
who would benefit from their therapies and improve their
commercial success. For patients, it means their chances
of receiving the optimal therapy within the window of effectiveness
is significantly improved
-- DXRX Signal has identified over 46,000 potential US patients
so far in 2023 for its pharma customers
-- Data tokenisation, which involves the joining of testing
and treatment data integral to new products being launched,
completed and on track to be launched in H2 2023 - this
will deliver enhanced patient insights and value to customers
-- First of its kind virtual lab conference was successfully
held in July 2023, targeted at US labs and physicians, driving
better platform network engagement and recruitment with
over 1,000 labs and physicians in attendance. A European
conference event is set to be launched in H1 2024
-- 49 labs added to the DXRX platform, taking the total to
900 across 44 countries, increasing DXRX global platform
reach with further recruitment expected from the virtual
lab events in H2 2023
-- Experienced Non-Executive Director, Graham Paterson, joins
the Board as a Non-Executive Director and Audit and Remuneration
Committees' chair on 1 October 2023
Peter Keeling, CEO of Diaceutics commented:
"As our pharma customers continue to evolve their investment to
precision medicines, we are extremely well positioned to deliver
the data insights and lab network they need to find patients in
need of appropriate therapies. We are pleased to report that the
strong momentum we enjoyed in 2022 has continued into 2023 and
delivered a very positive first half performance, with recurring
revenue and order book growth, continued expansion of our lab
network and therapy brand growth in line with our strategic
roadmap. Pharma companies are increasingly recognising the
importance of utilising our data technology and lab network to
significantly improve their commercial success.
"Most encouraging is the positive feedback we continue to
receive from our clients as they increasingly use the DXRX platform
to support the digital commercialisation of therapies delivered to
patients in need worldwide. We remain confident in our proven
growth strategy and ability to perform and deliver future growth as
we continue to hit our key milestones for the DXRX platform
expansion and introduce new products to profile and target suitable
patients."
Planned CEO Transition
The Company this morning announced separately details of its
planned CEO transition. Having co-founded the Company and spent 18
years as its CEO, Peter Keeling has informed the Board of his
intention to step back as CEO of Diaceutics on 1 January 2024. He
will continue to serve on the Board as an Executive Director, to
support the CEO transition. Thereafter, Peter's primary focus will
be to accelerate the corporate development of Diaceutics. This will
further strengthen Diaceutics leadership position as the primary
partner for pharmaceutical companies as they seek to commercialise
the new generation of precision therapeutics across a range of
disease areas over the coming months and years.
Peter Keeling co- founded Diaceutics in 2005 and has led the
growth of the Company from a niche consulting service provider to a
high margin, high growth diagnostic commercialisation platform. The
Company now serves 21 of the top 30 global pharma companies, with
161 people across Europe and North America and a network of 900
laboratories worldwide. Peter also led the Company's public listing
in 2019.
Ryan Keeling, current Chief Innovation Officer, has today been
appointed CEO Designate and will become CEO on 1 January 2024. Ryan
joined Diaceutics in 2006 and became a member of the Board on IPO
in 2019. His current responsibilities as Chief Innovation Officer
will be split between the Chief Commercial Officer and Chief Data
Officer during the transition period.
Ryan is an expert in the commercialisation of diagnostics and
associated technology, with over 17 years' experience in the field.
He is the architect of the Company's data capabilities and DXRX
platform, leading the development and commercialisation of the
Group's technology, including its proprietary data lake. During his
tenure with Diaceutics, Ryan has underpinned the Company's growth,
holding the key roles of Chief Commercial Officer, Chief Operating
Officer and most recently, Chief Innovation Officer where he has
led the Group's product innovation, with a near term focus on the
development of DXRX.
Outlook
We observed the pharmaceutical industry spending cautiously
during H1 2023, predominately attributed to general uncertainties
around macroeconomic and political pressures, particularly
reorganisations and drug pricing policies. Despite this, Diaceutics
has seen continued strong demand from new customers and renewals of
its insight and engagement solutions leading to order book growth
and increases in recurring revenues.
The market opportunity available to Diaceutics is significant,
larger than ever and continues to grow at pace as global pharma
accelerates the shift to precision medicine to improve patient
access, capture lost revenue and increase profitability. The
successes of 2023 to date and the significant momentum achieved
across the period serve to validate the Group's growth strategy,
with trading in line with management expectations. The Board is
confident that Diaceutics can continue to execute its growth
strategy and seize the market opportunity as we become the primary
commercialisation partner for pharma companies launching precision
medicines, and today reaffirms its full year outlook.
Analyst Presentation
A webinar presentation for analysts will be held at 10.00 am on
Tuesday, 26 September 2023 via the London Stock Exchange's
SparkLive platform. Those wishing to attend can register using the
following link:
https://www.lsegissuerservices.com/spark/Diaceutics/events/3e138a9b-2f9d-4adf-b5e0-790cb1f39b49
Investor Presentation
Peter Keeling (CEO ), Nick Roberts (CFO) and Ryan Keeling (CEO
Designate) will also provide a live presentation relating to the
Company's results via the Investor Meet Company platform on Tuesday
26 September 2023 at 4.30 pm. The presentation is open to all
existing and potential shareholders and registration can be
completed via the following link:
https://www.investormeetcompany.com/diaceutics-plc/register-investor
* Order book is the value of future contracted revenue not yet
recognised
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR"), and is disclosed in accordance with the Company's
obligations under Article 17 of MAR. The person responsible for
making this announcement on behalf of the Company is Nick Roberts,
Chief Financial Officer.
Enquiries:
Diaceutics PLC Tel: +44 (0)28 9040
6500
Peter Keeling, Chief Executive Officer investorrelations@diaceutics.com
Ryan Keeling, Chief Executive Officer Designate
Nick Roberts, Chief Financial Officer
Stifel Nicolaus Europe Limited (Nomad & Broker) Tel: +44 (0)20 7710
7600
Ben Maddison
Nick Harland
Kate Hanshaw
Alma PR Tel: +44(0)20 3405
0205
Caroline Forde diaceutics@almapr.co.uk
Matthew Young
Kinvara Verdon
About Diaceutics
At Diaceutics we believe that every patient should get the
opportunity to receive the right test and the right therapy to
positively impact their disease outcome.
We provide the world's leading pharma and biotech companies with
an end-to-end commercialisation solution for precision medicines
through data analytics, scientific and advisory services enabled by
our platform DXRX - The Diagnostics Network (R).
Strategic and Operational Review
Business and Strategic Overview
We have continued to build on the momentum from 2022 with
encouraging financial and operational progress in the six months to
30 June 2023. The successes in the period have underpinned a strong
financial performance which includes revenue growth of 32% to
GBP9.9m, improved visibility of revenues with 47% now recurring and
significant order book growth of 43% to GBP24.1 million, providing
excellent forward visibility; these all support our sustainable
growth as we continue to deliver against our strategic roadmap.
Growth during the period has been driven by a number of factors
including the increased adoption of our DXRX platform by large
pharma customers. A key pillar of the platform is our extensive lab
network. In the six months to 30 June 2023, we have added 49 labs
to the platform network, taking the total to 900, and we also
launched the first of two virtual lab conferences in July 2023.
These virtual events deliver specialist thought leadership content
to labs and physicians, driving better platform network engagement
and recruitment, and allowing us to continue to leverage the
platform network as a key differentiator and growth
accelerator.
We remain committed to investing in the expansion of our unique
assets and key value drivers: our partner network, data repository,
and platform product offering. During H1 2023 we have made good
progress against our accelerated investment strategy; we have
expanded the partner network, enhanced the value of the data
repository and successfully launched a number of new capabilities
on the DXRX platform. We continue to ensure that the customer is at
the centre of everything we do and that we are ideally positioned
to capitalise on the increasing precision medicine market and grow
Diaceutics' presence within our customers' commercialisation
strategy budgets.
The Group's therapy brand engagement remains consistently strong
with Diaceutics working with 50 therapies in H1 2023 (up 22%)
across 37 customers (H1 2022: 41 brands across 34 customers).
Customer centricity is fundamental to our growth strategy, and
we are embedding our customer centricity framework across the
organisation. The investment in this strategy includes developing
processes to capture the voice of our customers and having d
edicated customer account teams to promote integrated
cross-functional working. These enable continuous customer focused
improvements and seamless delivery of our solutions. We have been
delighted with the feedback we have had to date from our customers
as a result of this framework, with exceptionally strong engagement
and feedback.
Overall, we are pleased with the progress made against the
strategic milestones set out in our accelerated investment strategy
at the beginning of 2023 and this progress is summarised in the
milestone tracker below:
Accelerated investment strategy - milestones set for Progress and impact in 2023
2023
Secure best-in-class organic revenue growth of between Revenue growth of 32% with underlying constant currency
20-25%. growth of 25% (H1 2022: 25% with CCY
growth of 18%).
----------------------------------------------------------
Transition of business onto the DXRX platform and 83% of revenue derived from the DXRX platform (H1 2022:
increase the value of multi-year recurring 76%).
revenue contacts. Recurring revenue grew 66% to GBP4.6 million and
represents 47% of revenues in the period
(H1 2022: GBP2.8 million and 37% of revenue in the
period).
Order book increased 43% to GBP24. 1 million (H1 2022:
GBP10.2 million).
----------------------------------------------------------
Secure additional enterprise-wide* engagements. Secured 4 enterprise-wide engagements across 25
therapies (as at 31 December 2022: 2 engagements
across 8 therapies).
----------------------------------------------------------
Enrich data and product offerings DXRX Signal product enhanced in H1 2023 and launched in
Invest in platform scale and capability. H2 2023 providing daily alerts.
Tokenisation and joining of testing and treatment data
completed and on track to be launched
in H2 2023.
----------------------------------------------------------
Accelerate growth and engagement of the laboratory We expanded our lab network to include 900 laboratories
network and platform-based community. across 44 countries (as at 31 December
2022: 851 across 38 countries).
Launched first virtual lab conference in July 2023
targeted at US labs and physicians with
1,018 participants.
----------------------------------------------------------
Expand the number of therapy brands generating revenue We worked with 50 brands during the period with an
and the average revenue per brand. average revenue per brand of GBP198,000
(H1 2022: 41 brands at an average of GBP184,000 per
brand) - 8% increase in revenue per brand.
----------------------------------------------------------
Transform our customer experience and service. Added 4 Vice Presidents, enhancing strength and depth of
senior management, bolstering industry
expertise and facilitating a sharper emphasis on
operational success.
Added 10 employees (inc. VPs) to take the total to 161
at 30 June 2023 and reorganised customer
experience and service staff into 9 core customer
centric account teams, creating a more efficient
and effective structure to support our strategy.
----------------------------------------------------------
* An enterprise-wide engagement is characterised by a customer
deploying the DXRX platform across three or more of the precision
medicines in their portfolio
Three Unique Assets: Investing in our Value Drivers
We have made good progress against our accelerated investment
strategy. Seven of eight core insight and engagement platform
solutions now available on the DXRX platform, of which, four are
available as recurring revenue contracts. As we continue to execute
against our roadmap, we expect to continue converting our solutions
to our recurring revenue contract model and innovating in our
product offering, ensuring that they are platform based, and target
our customer needs increase recurring revenues. Ultimately, we
anticipate 70% of our revenue will be platform-based and recurring
by 2025, with peak adoption expected to reach around 80% by
2028.
We are pleased to report that strong progress has been made
across the Group's unique asset value drivers detailed below.
DXRX Partner Network
Labs that are better equipped and well-informed have the
capacity to significantly impact the diagnostic and treatment
journey for patients. Leveraging our extensive partner lab network,
we offer various multi-year lab engagement modules to our
pharmaceutical and biotech clients, with the goal of enhancing
patient diagnostic and treatment experiences.
The number of labs on the DXRX platform has continued to
increase with 49 joining in the past six months, bringing the total
to 900 across 44 countries, increasing the DXRX global platform
reach and enhancing our data supply chain and disease coverage.
Diaceutics continues to position itself as a thought leader in
the space and we were pleased to host a first of its kind virtual
lab conference in July 2023. Targeted at delivering specialist
content to US labs and physicians, this event was aimed at driving
better platform network engagement and recruitment, which was
successfully achieved with over 1,000 labs and physicians attending
on the day and that number continues to grow as further labs access
the archived conference recordings. Following the success of the
conference, we are pleased to build on this with the launch of a
European equivalent in H1 2024 and will report on the accelerated
engagement and recruitment of labs as a result of these events at
the end of the year.
DXRX Data
The Group's unrivalled depth of data continues to consolidate
its competitive advantage and serves as a key driver of new client
and therapy brand acquisition. During the period, new testing and
treatment patient records were added, further widening the Group's
competitive moat as it establishes itself as the primary
commercialisation partner for pharma and biotech companies
launching precision medicine.
As the number of patient records on the platform continues to
increase, so too does the requirement for automation and the
application of machine learning and AI within our systems. In order
to enhance patient insights and the value we can deliver to
customers; we have completed the tokenisation of our entire dataset
and are on track to launch tokenised data products in H2 2023. The
tokenisation of our testing data allows us to join it with other
data sets, such as treatment data, which considerably enhances the
patient insights and value to customers. We have also embedded
natural language processing technology into our platform data
capabilities which helps us to accelerate the processing and enrich
the quality of the insights derived from the vast amount of data
received on a daily basis.
DXRX Platform Products
In line with our strategic investment strategy, we have
continued to develop and expand our product offering in the DXRX
platform. These developments allow Diaceutics to further embed
within our customers' commercialisation efforts and take full
advantage of the current opportunity to expand our portion of the
customer budget.
Enhancements made to the DXRX Signal product have continued to
resonate well with clients and our recently launched daily signal
capability now provides customers with even more timely data to
identify patients who would benefit from therapies and improve
their commercial success.
Available only through the Diaceutics' platform, DXRX Signal
utilises our partner network data to identify physicians with a
patient who has tested positive for a specific biomarker of
interest, which may be eligible for therapy. This signal is
seamlessly integrated within a customers' operations within as
little as 48 hours of the positive test result. From this, they are
able to target that physician with a well-informed engagement
before a treatment decision has been made so that they can offer a
more effective drug or therapy sooner; a key goal for all involved
in precision medicine.
For patients, it means their chances of receiving the optimal
therapy within the window of effectiveness is significantly
improved. So far in 2023, DXRX Signal has identified over 46,000
potential US patients that may not have otherwise been recognised
as suitable candidates for treatment with personalised medicines.
The updated version of Signal is very important to Diaceutics and
its customers, as having early access to the diagnostic data will
mean that patients not only get the most appropriate treatment, but
also will potentially start on that treatment earlier. In H1 2023
six of seven DXRX Signal customer contracts renewed for another 12
months (an 86% renewal rate, albeit on low volumes). The one
customer contract non-renewal was for a single therapy brand and as
a result of the customer ceasing commercialisation spend on that
asset. DXRX Signal now supports in excess of 30 therapy brands.
Capitalising on a Growing Market Opportunity
The global precision medicine market continues to grow at pace
and is estimated to increase at 11.5% CAGR to $175.6bn by 2030
(Precedence Research: Precision Medicine Market Size, Share, Report
2022 to 2030). Through strategic investment and developments in our
network, data, products and people, Diaceutics is better placed
than ever to grow alongside the market as a whole and capitalise on
this significant opportunity.
Precision medicines currently represent 51% of oncology medicine
annual sales. However, pharma is losing over 50% of potential
patients due to suboptimal diagnosis practices, meaning that
patients do not receive the most effective medicines. The reality
of this was evidenced in the jointly published November 2022
Diaceutics Practice Gaps study in the peer reviewed JCO Precision
Oncology, which found that 64% of non-small cell lung cancer
patients in the US in 2019 did not receive access to the medicines
most suitable to them, and therefore did not benefit from
personalised medicine treatment.
This hurdle in the diagnostic process is both harmful for
patients not receiving the most suitable diagnosis and treatments
for their illness, and for pharma who are currently seeing up to an
estimated $5bn of lost precision medicine oncology sales over the
lifecycle of a therapy. Diaceutics' unique network, data and
product assets are ideally positioned to meet both of these needs
and ensure that patients receive the right treatment at the right
time.
We are well positioned to capitalise on this growing marketing
opportunity as the pharma industry becomes increasingly aware of
the need to understand the diagnostic infrastructure and the
communication between lab and physician and physician and
prescribing. This is hugely valuable for us, and we continue to
develop innovative commercialisation solutions for pharma and
biotech.
We have evidenced that pharma is willing to spend in excess of
$6 million over the therapy lifetime addressing these opportunities
and are confident that ultimately this should be US$10-15 million
per brand to maximise the addressable patient treatment
population.
Diaceutics has already established itself as a trusted partner
to pharma, and to date we have identified over 46,000 potential
patient candidates who are not yet being offered precision
medicines and bridging this gap for both patients and pharma.
We have made good progress towards capitalising on this
opportunity, working across 50 therapies in H1 2023 with 37
customers, up 22% on H1 2022 and increasing the value of
addressable lifetime therapy brand spend secured with 33 brands
with lifetime brand spend over $1 million. As we continue to
consolidate our position as a trusted partner to pharma and execute
against our strategic investment program, we are confident in
further capitalising on the significant opportunity available to us
within the market.
Our Team
Diaceutics' commitment to its people is at the centre of what we
do, in our drive to ensure that every patient receives the right
test at the right time, and in how we work to achieve that goal.
Our successes to date would not be possible without the hard work
and dedication of our team for which we sincerely grateful.
We continue to invest in our team to ensure we remain both an
attractive, and enjoyable, place to work for current and future
employees. In H1 2023, we have added four Vice Presidents to
enhance the strength and depth of the senior management team,
bolster our industry expertise, and in turn facilitate our
business' emphasis on operational success. Our customer centric
growth strategy led to us reorganising our customer experience and
service staff into 9 core customer account teams and we continue to
add people and skills in key roles to facilitate the company's
growth and scale plans for 2024 and beyond, adding six new
employees in H1 2023.
From 1 October 2023, experienced Non-Executive Director, Graham
Paterson, will be appointed to the Board of Diaceutics as a
Non-Executive Director. Graham brings extensive leadership and
board experience to Diaceutics and we look forward to working with
him as we progress on the next stage of our growth journey. At the
same time, Charles Hindson will be stepping down from his position
as a Non-Executive Director at Diaceutics. The Board thanks Charles
for his hard work, dedication and much valued counsel during the
past four years and wishes him all the best in his future
endeavours.
In addition, we have today announced that CEO, Peter Keeling,
has informed the Board of his intention to step back from his role
as CEO of Diaceutics on 1 January 2024. Peter will continue to
serve on the Board as an Executive Director, to support the CEO
transition. Thereafter, Peter's primary focus will be to accelerate
the corporate development of Diaceutics. This will further
strengthen Diaceutics leadership position as the primary partner
for pharmaceutical companies as they seek to commercialise the new
generation of precision therapeutics across a range of disease
areas over the coming months and years.
We are delighted that Ryan Keeling, current Chief Innovation
Officer, has today been appointed CEO Designate and will become CEO
on 1 January 2024. Ryan joined Diaceutics in 2006 and became a
member of the Board on IPO in 2019. Ryan is the architect of the
Company's data capabilities and DXRX platform, leading the
development and commercialisation of the Group's technology,
including its proprietary data lake. During his tenure with
Diaceutics, Ryan has held the key roles of Chief Commercial
Officer, Chief Operating Officer and most recently, Chief
Innovation Officer, where he has led the Group's DXRX product
innovation.
Financial Review
We are pleased to report that despite the challenging
macroeconomic trading conditions impacting all sectors, Diaceutics
has delivered a strong financial performance in the first six
months of 2023, the fifth consecutive period of growth for the
Group. With strong cash reserves of GBP17.9 million at 30 June
2023, the Company enters the second half of the year reaffirming
its full year outlook as it continues to pursue its accelerated
investment strategy and drive to become the primary precision
medicine commercialisation partner to the global pharma and biotech
industries.
Revenue Growth and Order Book Visibility
Our comprehensive suite of data driven insight and engagement
solutions, designed to serve the precision medicine
commercialisation requirements of pharma and biotech companies,
have continued to experience strong organic growth in H1 2023.
Revenue for the period grew 32% to GBP9.9 million (H1 2022: GBP7.5
million), a 25% increase on a constant currency basis. The strong
revenue growth continues to be maintained whilst transitioning a
significant proportion of customer products and contracts to
recurring revenue, which saw GBP4.6 million ( 47%) of recurring
revenues in the period, up 66% from GBP2.8 million and 37% in H1
2022 .
Revenue growth has been especially strong within the
platform-based insight and engagement solutions, growing 44% to GBP
8.2 million. Platform based solutions now represent 83 % of all
revenues (up from 76% for the comparative period), a transition
which has been achieved in just two and a half years since the
platform launch and tracking roughly a year ahead of management's
expectations. Advisory service revenues were GBP1.7 million in the
year, down slightly on the comparative period (H1 2022: GBP1.8
million).
During H1 2023, we observed a slowing in pharmaceutical industry
spending, predominately discretionary spend, which was attributed
to general uncertainties around macroeconomic and politics
pressures, particularly drug pricing policies. These pressures
materialised as lower spending across the shorter-term strategic
consultancy services, impacting our advisory service business, but
demand remained strong for forward contracted platform-based
insight and engagement solutions which are more embedded into
pharma go-to-market commercialisation critical pathways.
The Total Contract Value (TCV) secured by way of sales in the
period was GBP16.9 million and was slightly ahead of the value of
contracts secured in the comparative period (H1 2022: GBP16.5
million). The quality of TCV was aided by the Company's continued
progress towards securing enterprise-wide engagements, which is
characterised by a customer deploying the DXRX platform across
three or more of the precision medicines in their portfolio.
The success in securing enterprise-wide engagements has
continued to build future visibility through a multi-year recurring
revenue order book. By 30 June 2023 the Company had secured f our
enterprise-wide engagements with a TCV of $20.1 million and
delivering insight data solutions for up to three years across 25
pharma therapies. The order book at 30 June 2023 grew to GBP24.1
million, representing 43% growth in the period (GBP16.9 million at
31 December 2022), with around GBP6.8 million expected to be
realised as revenue in H2 2023 and giving the business around 70%
visibility of the full year consensus revenue number at the
mid-year point. Recurring revenue now represents 94% or GBP22.7
million of the future order book.
The Group's customer base is heavily weighted towards blue chip
pharma companies, with 83% of revenue generated by customers based
in the USA (H1 2022: 72%). The Group worked with a total of 37
customers during the H1 2023 (H1 2022: 34) across 50 therapies (H1
2022: 41). Diaceutics has increased its average revenue per brand
for the first six months of 2023 to GBP198,000, up from GBP184,000
in H1 2022, and continues to increase the value of addressable
lifetime therapy brand spend secured with 33 therapy brands with
lifetime spend over $1 million (26 therapy brands as at 31 December
2022).
The Group continues to expect a higher weighting of revenue, and
therefore profitability, in the second half of the financial year.
In 2022 the revenue weighting first vs. second half of the year was
38:62 compared to 43:57 in 2021. This weighting has historically
been driven by pharma customers' propensity to spend more of its
allocated annual budget in the second half of the year,
particularly quarter four, as it reaches the end of its own budget
and financial years. Although we see this second half revenue
weighting reducing in future years as a result of the Company's
shift to recurring revenue contracts, the strong growth rates
experienced by the Company and lower level of spend observed by
pharma in H1 2023 means that this second half revenue weighting
trend is expected again for the 2023 full year.
Gross Profit and Margins
The gross profit for the first six months of 2023 increased 38%
to GBP8.7 million (H1 2022: GBP6.3 million). The gross margin for
H1 2023 was 88%, up four percentage points from the gross margin in
H1 2022 of 84%. The increase in margin was primarily the result of
sales mix with a higher concentration of revenue generated from
platform-based solutions and a reduction in lower marg in
pass-through costs associated with some engagement solution
deliverables.
EBITDA and Loss Before Tax Performance
In line with expectations, the Company generated an EBITDA loss
of GBP0.2 million, lower than the comparative period profit of
GBP0.3 million. The EBITDA loss reflects the impact of the
Company's planned accelerated investment strategy which
predominately materialised as increased headcount and people
related costs in H1 2023 (headcount up to 161 vs. 138 in H1 2022)
as well as a higher proportion of platform development costs
expensed during the period and foreign exchange losses from
strengthening GBP.
The loss before tax increased from GBP1.1 million in H1 2022 to
GBP2.0 million in H1 2023. This was a result of the increasing
operating loss (see commentary on EBITDA above) as well as an
increase in amortisation costs which rose by approximately GBP0.5
million in the period, with the increasing amortisation costs being
the result of the capitalisation of internal development costs in
prior years and increasing data purchasing costs.
The intensity of development costs being capitalised will
continue to curtail over the coming years, instead being expensed
to the income statement. Data acquisition costs will continue to
increase as additional opportunities are identified to acquire data
through our lab network and existing data supply chain and to
accelerate the depth and breadth of our data repository. Increasing
the total data acquisition spend in future years is a key strategic
goal and driver of both growth and value, and as a result, the
total level of amortisation will continue to rise as a result of
this capitalised spend.
Reconciliation of Operating Loss to EBITDA
2023 2022
GBPm's GBPm's
---------------------------- ------- -------
Operating Loss (2.2) (1.1)
Depreciation & Amortisation 2.0 1.4
------- -------
EBITDA (0.2) 0.3
Financial Strength
At 30 June 2023, the Company reported a strong net asset
position of GBP41.1 million (31 December 2022: GBP42.5
million).
Cash at 30 June 2023 was GBP17.9 million (31 December 2022:
GBP19.8 million), reflecting the acceleration in investment
announced in the January 2023 Strategy Update, and the Company has
sufficient financial resources in place to fully execute its
ambitious growth plans.
During the year, the Company continued to invest in the
development of its platform technology, with GBP1.9 million of a
total platform development spend for H1 2023, of which GBP0.8
million was capitalised in the year (H1 2022: GBP1.8 million of a
total platform development spend of which GBP1.4 million was
capitalised). As planned and set out in the accelerated investment
strategy, total platform development costs have increased on
comparative periods as the business looks to accelerate the
development of the platform products, capability and scale.
However, the proportion of development costs which are capitalised
has decreased as the platform reaches maturity. Data expenditure,
which is capitalised and amortised over the period of its use, has
increased around double over H1 2023 to GBP1.8 million compared
with GBP0.9 million in H1 2022. In line with the strategy, the
increase in spend will enhance our proprietary data repository
through expanding the geographical coverage, the frequency of the
data received and the disease coverage.
The free cash flow (Net cash inflow from operating activities
less capital expenditure less the payment of lease liabilities) for
H1 2023 was an outflow of GBP2.3 million (H1 2022: inflow GBP0.8
million). Cash received operating activities for H1 2023 was GBP0.7
million (H1 2022: GBP3.3 million), demonstrating the Company's
ability to continually generate cash from its operating activities,
and which has only reversed back to a free cash outflow in H1 2023
as a result of the enhanced investment in data and lower proportion
of capitalised platform development costs.
Based on the increasing cost of servicing debt and the low
probability of forecast utilisation the Company's Revolving Credit
Facility (RCF), the Company has not renewed the GBP4 million
facility that ended in July 2023. The Company retains strong
relationships with its primary banking partners and is satisfied
that it can arrange an RCF of equal or greater quantum if
required.
Condensed Profit and Loss Account
for the six months ended 30 June 2023
Six months Six months Year ended
to to 31 December
30 June 2023 30 June 2022* 2022
(Unaudited) (Unaudited) (audited)
Notes GBP000's GBP000's GBP000's
Revenue 2 9,924 7,528 19,504
Cost of sales (1,224) (1,221) (2,763)
------------- -------------- ------------
Gross profit 8,700 6,307 16,741
Administrative expenses (10,873) ( 7,466) (16,280)
Other operating income 3 7 96 114
------------- -------------- ------------
Operating (loss)/profit (2,166) (1,063) 575
Finance Income 253 - 111
Finance costs (42) (68) (122)
------------- -------------- ------------
(Loss)/profit before tax (1,955) (1,131) 564
Income tax credit 4 470 364 160
(Loss)/profit for the financial
period (1,485) (767) 724
============= ============== ============
All activities in the current and prior periods relate to
continuing operations.
* The Group has restated the classification of amortisation of
intangible assets for the period ending 30 June 2022 to conform
with the current year presentation. Further details of this
reclassification are detailed in note 13 to these financial
statements.
Condensed Statement of Comprehensive Income
For the the six months ended 30 June 2023
Six months Six months Year ended
to to 31 December
30 June 2023 30 June 2022 2022 (audited)
(Unaudited) (Unaudited)
GBP000's GBP000's GBP000's
(Loss)/profit for the financial
period (1,485) (767) 724
Items that may be reclassified
subsequently to profit or loss
:
Exchange differences on translation
of foreign operations (121) 639 440
Total comprehensive (loss)/profit
for the period, net of tax (1,606) (128) 1,164
============= ============= ===============
All activities in the current and prior periods relate to
continuing operations.
Earnings per share
for the six months ended 30 June 2023
Six months Six months
to to Year ended
30 June 2023 30 June 2022 31 December
Note (Unaudited) (Unaudited) 2022 (audited)
Pence Pence Pence
Basic 6 (1.76) (0.91) 0.86
Diluted 6 (1.76) (0.91) 0.84
============= ============= ===============
Condensed Balance Sheet
as at 30 June 2023
31 December
30 June 30 June
2023 2022 2022
Notes (Unaudited) (Unaudited) (Audited)
ASSETS GBP000's GBP000's GBP000's
Non-current assets
Intangible assets 7 16,070 14,189 15,222
Right of use assets 1,257 1,339 1,333
Property, plant and equipment 8 737 704 759
Deferred tax asset 96 99 46
--------------------- -------------- -------------
18,160 16,331 17,360
--------------------- -------------- -------------
Current assets
Trade and other receivables 9 9,164 7,290 9,209
Income tax receivable 917 1,519 1,846
Cash and cash equivalents 17,880 20,388 19,841
--------------------- -------------- -------------
27,961 29,197 30,896
--------------------- -------------- -------------
TOTAL ASSETS 46,121 45,528 48,256
===================== ============== =============
EQUITY AND LIABILITIES
Equity
Equity share capital 12 169 169 169
Share premium 37,126 37,125 37,126
Treasury shares (293) (255) (263)
Translation reserve 17 337 138
Profit & loss account 4,040 3,574 5,344
--------------------- ------- -------
TOTAL EQUITY 41,059 40,950 42,514
===================== ======= =======
Non-current liabilities
Leasehold liability 1,132 1,284 1,205
Provision for dilapidations 88 - 79
Deferred tax liability 341 424 706
---------------------- ------ ------
1,561 1,708 1,990
---------------------- ------ ------
Current liabilities
Trade and other payables 10 3,365 2,740 3,628
Leasehold liability 128 130 124
Income tax payable 8 - -
---------------------- ------ ------
3,501 2,870 3,752
---------------------- ------ ------
TOTAL LIABILITIES 5,062 4,578 5,742
====================== ====== ======
TOTAL EQUITY AND LIABILITIES 46,121 45,528 48,256
======= ======= =======
Condensed Statement of Changes in Equity
for the six months ended 30 June 2023
Share Treasury Profit
Equity premium shares Translation and loss Total
share capital reserve account equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January 2022 168 36,864 (165) (302) 4,084 40,649
=============== ========= ========= ============ ========== =========
Loss for the period - - - - (767) (767)
Other comprehensive
loss - - - 639 - 639
Total comprehensive
loss for the period - - - 639 (767) (128)
--------------- --------- --------- ------------ ---------- ---------
Transactions with owners
recorded directly in
equity
Share based payment - - - - 257 257
Treasury shares - - (90) - - (90)
Conversion of convertible
loan notes 1 133 - - - 134
Exercise of warrants - 129 - - - 129
Total transactions with
owners 1 262 (90) - 257 430
--------------- --------- --------- ------------ ---------- ---------
At 30 June 2022 (unaudited) 169 37,126 (255) 337 3,574 40,951
=============== ========= ========= ============ ========== =========
Profit for the period - - - - 1,491 1,491
Other comprehensive
loss - - - (199) - (199)
Total comprehensive
profit for the period - - - (199) 1,491 1,292
--------------- --------- --------- ------------ ---------- ---------
Transactions with owners
recorded directly in
equity
Share based payments - - - - 279 279
Treasury Shares - - (8) - - (8)
Total transactions with
owners - - (8) - 279 271
--------------- --------- --------- ------------ ---------- ---------
At 31 December 2022
(audited) 169 37,126 (263) 138 5,344 42,514
=============== ========= ========= ============ ========== =========
Share Treasury Profit
Equity premium shares Translation and loss Total
share capital reserve account equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January
2023 169 37,126 (263) 138 5,344 42,514
============== ========= ========= ============ ====================================== =========
Loss for the
period - - - - (1,485) (1,485)
Other
comprehensive
loss - - - (121) - (121)
Total
comprehensive
loss for the
period - - - (121) (1,485) (1,606)
-------------- --------- --------- ------------ -------------------------------------- ---------
Transactions
with owners
recorded
directly in
equity
Share based
payment - - - - 181 181
Treasury
shares - - (30) - - (30)
Total
transactions
with
owners - - (30) - 181 151
-------------- --------- --------- ------------ -------------------------------------- ---------
At 30 June
2023
(unaudited) 169 37,126 (293) 17 4,040 41,059
============== ========= ========= ============ ====================================== =========
Condensed Statement of Cash Flows
for the six months ended 30 June 2023
Six months Six months Year ended
to 30 June to 30 June 31 December
Notes 2023 (Unaudited) 2022 ( Unaudited) 2022 ( audited)
GBP000's GBP000's GBP000's
(Loss)/profit before tax (1,955) (1,131) 564
Adjustments to reconcile profit
before tax to net cash flows from
operating activities
Net finance (income)/costs (211) 68 11
Amortisation of intangible assets 7 1,774 1,193 2,704
Depreciation of right to use asset 78 73 157
Depreciation of property, plant
and equipment 8 81 70 147
Research and development tax credits - (75) (86)
Decrease/(increase) in trade and
other receivables 45 778 (1,594)
(Decrease)/increase in trade and
other payables (265) 293 1,266
Unrealised currency translation
gain - 193 -
Share based payments 181 257 536
------------------ ------------------- -----------------
Cash generated from operations (272) 1,719 3,705
Tax received 970 1,545 1,391
------------------ ------------------- -----------------
Net cash inflow from operating
activities 698 3,264 5,096
------------------ ------------------- -----------------
Investing activities
Purchase of intangible assets (2,885) (2,324) (4,684)
Purchase of property, plant and
equipment (61) (56) (186)
Finance interest received 253 - 111
------------------ ------------------- -----------------
Net cash outflow from investing
activities (2,693) (2,380) (4,759)
------------------ ------------------- -----------------
Financing activities
Borrowing costs (13) (35) (59)
Leasehold repayments (98) (49) (163)
Purchase of treasury shares 12 (30) (90) (98)
Issue of shares on exercise of
a warrant 12 - 129 129
------------------ ------------------- -----------------
Net cash outflow from financing
activities (141) (45) (191)
------------------ ------------------- -----------------
Net (decrease)/increase in cash
and cash equivalents (2,136) 839 146
Net foreign exchange movements 175 (126) 20
Opening cash and cash equivalents 19,841 19,675 19,675
------------------ ------------------- -----------------
Closing cash and cash equivalents 17,880 20,388 19,841
================== =================== =================
Notes to the Condensed Financial Statements
for the six months ended to 30 June 2023
1. Summary of significant accounting policies
Basis of preparation
The condensed financial statements have been prepared in
accordance with the recognition and measurement requirements of UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting'.
The condensed financial statements should be read in conjunction
with the Group's last annual consolidated financial statements as
at and for the year ended 31 December 2022. Selected explanatory
notes are included to explain events and transactions that are
significant to an understanding of the changes in the Group's
financial position and performance since the last annual financial
statements.
The condensed financial statements have been prepared under the
historical cost convention, except for the fair value of certain
financial instruments which are further detailed in note 11.
The same accounting policies, presentation and methods of
computation have been followed in these condensed financial
statements as were applied in the preparation of the Group's
financial statements for the year ended 31 December 2022.
These condensed financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2022 were
approved by the Board of Directors and have been delivered to the
Registrar of Companies. The audit report on those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain any statement under section 498(2) or
(3) of the Companies Act 2006.
There have been no significant related party transactions in the
period which have materially affected the financial position or
performance of the Company, or changes to related party
transactions in the period which were disclosed in the prior annual
report.
Critical accounting judgements and key sources of estimation
uncertainty
In preparing these condensed financial statements, management
has made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expense.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the last annual
financial statements and are summarised below.
Sources of estimation uncertainty
Source of Description
estimation
uncertainty
Useful economic The assessment of UEL of data purchases and platform
life (UEL) require estimation over the period in which these
of intangible assets will be utilised and is based on information
assets on the estimated technical obsolescence of such assets
and latest information on commercial and technical
use. The platform has been assessed to have a UEL
of 10 years, platform algorithms s ix years and data
four years.
-------------------------------------------------------------
Impairment The assessment of the recoverable amount of property
of assets plant and equipment, intangible assets and right-of-use
assets is made in accordance with IAS 36 Impairment
of Assets. The Group performs an annual review in
respect of indicators of impairment, and if any such
indication exists, the Group is required to estimate
the recoverable amount of the asset. Following this
assessment, no impairment indicators were present
at 31 December 2022. The Group's policy is to test
non-financial assets for impairment annually, or
if events or changes in circumstances indicate that
the carrying amount of these assets may not be recoverable.
The Group has considered whether there have been
any indicators of impairment during the six-month
period to 30 June 2023 which would require an impairment
review to be performed. Based upon this review, the
Group has concluded that there are no such indicators
of impairment as 30 June 2023.
-------------------------------------------------------------
Discount Application of IFRS 16 requires the Group to make
rate significant estimates in assessing the rate used
to discount the lease payments in order to calculate
the lease liability. The incremental borrowing rate
depends on the term, currency and start date of the
lease and is determined based on a series of inputs
including the Group commercial borrowing rate.
-------------------------------------------------------------
Attrition In the calculation of Share Based Payments and related
rate costs charge an assessment of expected employee attrition
is used based on expected employee attrition and
where possible actual employee turnover from the
inception of the share option plan.
-------------------------------------------------------------
Critical accounting judgements
Accounting Description of critical judgement
policy
Revenue With respect to revenue recognition, where the input
method is used to determine recognition over time,
a key source of estimation will be the total budgeted
hours to completion for comparison with the actual
hours spent.
------------------------------------------------------------
Deferred In assessing the requirement to recognise a deferred
tax tax asset, management carried out a forecasting exercise
in order to assess whether the Group will have sufficient
future profits on which the deferred tax asset can
be utilised. This forecast required management's
judgment as to the future performance of the Group.
------------------------------------------------------------
Intangible The Group capitalises costs associated with the development
assets of the DXRX platform and data lake. These costs are
assessed against IAS 38 Intangible Assets to ensure
they meet the criteria for capitalisation.
------------------------------------------------------------
Going Concern
The financial performance and balance sheet position at 30 June
2023 along with a range of scenario plans to 31 December 2025 has
been considered, applying different sensitives to revenue. Across
these scenarios, including at the lower end of the range, there
remains significant headroom in the minimum cash balance over the
period to 31 December 2024 and therefore the Directors have
satisfied themselves that the Group has adequate funds in place to
continue to meet its obligations as they fall due.
2. Revenue and segmental analysis
For all periods reported the Group operated under one reporting
segment but revenue is analysed under three separate
products/service lines.
a) Revenue by major product/service line
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
Insight Solutions (Data) 6,989 4,798 12,653
Engagement Solutions (Tech enabled
services) 1,251 910 2,227
Advisory Services (Professional
services) 1,684 1,820 4,624
9,924 7,528 19,504
============ ============ =============
b) Revenue by geographical area
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
North America 8 ,261 5,424 14,454
UK 195 222 561
Europe 1,115 1,348 2,696
Asia and rest of world 353 534 1,793
9 ,924 7,528 19,504
============ ============ =============
c) Revenue by timing of recognition
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
Point in time 2,464 3,685 9,370
Over time and input method 7,460 3,843 10,134
9,924 7,528 19,504
============ ============ =============
The receivables, contract assets and liabilities in relation to
contracts with customers are as follows:
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
Contract assets
Accrued revenue 3,370 3,109 2,582
Contract liabilities
Deferred revenue 1,283 379 411
Order book
The aggregate amount of the transaction price allocated to
product and service contracts that are partially or fully
unsatisfied as at the reporting date ('order book') are as
follows:
2023 2024 2025+ Total
GBP000's GBP000's GBP000's GBP000's
Platform based products
and services 6,300 7,816 9,510 23,626
Advisory services 453 - - 453
6,753 7,816 9,510 24,079
========= ========= ========= =========
3. Other operating income
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
Government grants 7 19 28
Research and developments credits - 77 86
7 96 114
============ ============ =============
4. Income tax
Income tax expense is recognised at an amount determined by
multiplying the profit before tax for the interim reporting period
by management's best estimate of the weighted-average annual income
tax rate, adjusted for the tax effect of certain items recognised
in full in the interim period. As such, the effective tax rate in
the condensed financial statements may differ from management's
estimate of the effective tax rate for the annual financial
statements.
The Group's consolidated effective tax rate in respect of
continuing operations for the six months ended 30 June 2023 was
24.1% (six months ended 30 June 2022: 32.2%).
The difference to the corporation tax rate of 23.52% reflects UK
Research & Development credits under the SME R&D tax
regimes of GBP82,000, disallowable expenses of GBP9,000, GBP58,000
movement in deferred tax not recognised, GBP43,000 of higher rate
taxes, prior period adjustments totalling a credit of GBP35,000 and
a credit of GBP4,000 arising as a result of the impact of the
change in the future UK tax rate on the Group's deferred tax
assets.
UK corporation tax is calculated at 23.52% (2022: 19%) of the
taxable profit or loss for the period. Taxation for other
jurisdictions is calculated at the rates prevailing in the
respective jurisdictions. In the March 2021 budget, it was
announced that the UK tax rate will increase to 25% from 1 April
2023. This will have a consequential effect on the group's future
tax charge. The deferred tax asset is recognised on the basis that
the Group has forecasted sufficient profits on which the deferred
tax asset will be utilised in future periods.
Tax losses carried forward amount to GBP1,678,000 (H1 2022:
GBP1,998,000) within Diaceutics PLC, GBP266,000 in Diaceutics Inc
and GBP96,000 in Diaceutics Ireland. The Group has tax losses
carried forward arising in subsidiary undertakings. Due to the
uncertainty of the recoverability of the tax losses within these
subsidiaries, a potential deferred tax asset of GBP402,000 (H1
2022: GBP277,000) has not been recognised. All other deferred tax
assets and liabilities have otherwise been recognised as they
arise.
5. EBITDA
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
Operating (loss)/profit: (2,165) (1,063) 575
Adjusted for:
Depreciation and amortisation 1,933 1,336 3,008
EBITDA (232) 273 3,583
============ ============ =============
6. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings attributable to shareholders
Six months Six months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
GBP000's GBP000's GBP000's
Earnings for the purposes of basic
and diluted earnings per share being
net (loss)/profit attributable to
owners of the Company (1,485) (767) 724
============ ============ =============
Number of shares
Year ended
Six months Six months 31 December
to 30 June to 30 June 2022
2023 2022 Number
Number Number
Ordinary Shares in issue at the
end of the period 84,472,431 84,472,431 84,472,431
------------ ------------- -------------
Weighted average number of shares
in issue 84,472,431 84,242,344 84,357,387
Less Treasury Shares (245,729) (133,000) (207,791)
------------ ------------- -------------
Weighted average number of shares
for basic
earnings per share 84,226,702 84,109,344 84,149,596
Effect of dilution of Convertible
Loan Notes - 503 -
Effect of dilution of share options
and warrants granted 2,646,772 1,766,949 1,939,925
Weighted average number of shares
for diluted
earnings per share 86,873,474 85,876,796 86,089,521
============ ============= =============
Earnings and diluted Earnings per share
Six months Six months
to to Year ended
30 June 30 June 31 December
2023 2022 2022
Pence Pence Pence
Basic (1.76) (0.91) 0.86
Diluted (1.76) (0.91) 0.84
========== ========== ============
7. Intangible assets
Patents Development
and trademarks Datasets expenditure Platform Software Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 1 January
2022 1,144 4,849 216 9,727 562 16,498
Foreign exchange 32 163 3 222 1 421
Transfer from
Development
expenditure
to Platform - - (959) 959 - -
Additions - 853 1,387 - - 2,240
---------------- --------- ------------- ----------- ----------- ---------
At 30 June
2022 1,176 5,865 647 10,908 563 19,159
Foreign exchange 27 65 1 79 - 172
Transfer from
Development
expenditure
to Platform - - (1,442) 1,442 - -
Additions 1 1,316 972 - 155 2,444
At 31 December
2022 1,204 7,246 178 12,429 718 21,775
---------------- --------- ------------- ----------- ----------- ---------
Foreign exchange (33) (190) (8) (168) (1) (400)
Transfer from
Development
expenditure
to Platform - - (923) 923 - -
Additions - 1,843 753 - 289 2,885
At 30 June
2023 1,171 8,899 - 13,184 1,006 24,260
---------------- --------- ------------- ----------- ----------- ---------
Patents Development
and trademarks Datasets expenditure Platform Software Total
Amortisation GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 1 January
2022 1,085 1,692 - 721 179 3,677
Foreign exchange 32 47 - 21 - 100
Charge for
the period 20 605 - 513 55 1,193
---------------- ---------- -------------- ----------- ----------- ---------
At 30 June
2022 1,137 2,344 - 1,255 234 4,970
Foreign exchange 27 30 - 14 1 72
Charge for
the period 21 708 - 599 183 1,511
---------------- ---------- -------------- ----------- ----------- ---------
At 31 December
2022 1,185 3,082 - 1,868 418 6,553
Foreign Exchange (34) (69) - (33) (1) (137)
Charge for
the period 14 953 650 157 1,774
---------------- ---------- -------------- ----------- ----------- ---------
At 30 June
2023 1,165 3,966 - 2,485 574 8,190
Net book
value
At 30 June
2023 6 4,933 - 10,699 432 16,070
================ ========== ============== =========== =========== =========
At 31 December
2022 19 4,164 178 10,561 300 15,222
================ ========== ============== =========== =========== =========
At 30 June
2022 39 3,521 647 9,653 329 14,189
================ ========== ============== =========== =========== =========
8. Property, plant and equipment
Leasehold Total
Office equipment improvements
GBP000's GBP000's GBP000's
Cost
At 1 July 2022 540 478 1,018
Foreign exchange translation 3 - 3
Additions 76 54 130
At 31 December 2022 619 532 1,151
--------------------------- -------------- ---------
Foreign exchange translation (2) - (2)
Disposals (11) - (11)
Additions 61 - 61
At 30 June 2023 667 532 1,199
--------------------------- -------------- ---------
Depreciation
At 1 July 2022 274 40 314
Charge for the period 52 26 78
At 31 December 2022 326 66 392
--------------------------- -------------- ---------
Foreign exchange translation (2) - (2)
Disposals (9) - (9)
Charge for the period 53 28 81
At 30 June 2023 368 94 462
--------------------------- -------------- ---------
Net book value
At 30 June 2023 299 438 737
=========================== ============== =========
At 31 December 2022 293 466 759
=========================== ============== =========
At 30 June 2022 266 438 704
=========================== ============== =========
9. Trade and other receivables
30 June 30 June 31 Dec 2022
2023 2022
GBP000's GBP000's GBP000's
Trade receivables 4,698 3,331 5,792
Accrued revenue 3,370 3,109 2,582
Other receivables 222 132 207
Prepayments 845 718 628
Derivative asset - Foreign currency -
forward contract 29 -
9,164 7,290 9,209
========= ========= ============
10. Trade and other payables
30 June 30 June 31 Dec 2022
2023 2022
GBP000's GBP000's GBP000's
Creditors : falling due within
one year
Trade payables 287 239 759
Accruals 1,325 1,629 1,996
Other tax and social security 418 337 423
Deferred revenue 1,283 379 411
Other Payables 52 - 39
Derivative liability - Foreign
currency forward contract - 156 -
3,365 2,740 3,628
========= ========= ============
11. Financial instruments
30 June 30 June 31 Dec 2022
2023 2022
GBP000's GBP000's GBP000's
Financial assets at cost
Trade receivables 4,698 3,331 5,792
Other receivables 222 132 207
Cash at bank and in hand 17,880 20,388 19,841
Financial liabilities at cost
Trade payables (287) (239) (759)
Leasehold liability (1,260) (1,414) (1,329)
Financial assets/(liabilities)
at fair value
Derivative financial instrument
- Foreign currency forward contract 29 (156) -
Derivative financial instrument - Foreign currency forward
contract
The group has entered into a number of foreign currency
derivative contracts during the period. The nominal value of the
Group's forward contracts is GBP3,200,000 (2022: GBP1,896,000)
principally to sell US Dollars.
The foreign currency forward contracts are categorised as level
2 within the fair value hierarchy.
The Group's foreign currency forward contracts are not traded in
active markets. These contracts have been fair valued using
observable forward exchange rates and interest rates corresponding
to the maturity of the contract. The effects of non-observable
inputs are not significant for foreign currency forward
contracts.
Fair value measurement on these derivatives as at the period end
are GBP29,000 (30 June 2022: -GBP156,000).
12. Share capital
30 June 30 June 31 Dec
2023 2022 2022
GBP000's GBP000's GBP000's
Allotted, called up and fully paid
84,472,431 (June 2022 and Dec 2022:
84,472,431)
Ordinary shares of GBP0.002 each 169 169 169
========= ========= =========
No warrants exercised during the period (01 January 2023 - 30
June 2023).
Warrant balance of 177,915 with an exercise price of GBP0.76
will potentially provide the Company with proceeds of
GBP135,215.
Treasury shares are shares in Diaceutics PLC that are acquired
and held by the Diaceutics Employee Share Trust for the purpose of
issuing shares under relevant employee share option plans.
13. Change in accounting policy
At the end of 2022, the Directors have voluntarily changed the
accounting policy in respect of presentation of amortisation of
Intangible assets on the face of the Group Profit and Loss account.
The Group has made a decision to disclose the amortisation of
intangible assets in administrative expenses instead of Cost of
sales.
The change was implemented to better align Diaceutics' Group
Profit and Loss account presentation with peers in the pharma tech
industry, allowing investors and analysts to benchmark the Group's
results more readily. This has resulted in the H1 2022 gross profit
and gross profit margin increasing. Operating profit and profit
before and after tax for the H1 2022 reporting period have not
changed. Accordingly, the prior year comparatives have been
restated to reflect this change in accounting policy.
The following table summarises the impact of change in
accounting policy on the Group's Profit and Loss account as at 30
June 2022 for each of the financial statement lines affected.
Please note that there is no impact on the Group Statement of
Comprehensive Income, Group Statement of Financial Position, Group
Statement of Cash Flow and as at 30 June 2022.
As reported As restated
30 June 2022 Adjustments 30 June 2022
GBP000's GBP000's GBP000's
Revenue 7,528 - 7,528
Cost of sales (2,414) 1,193 (1,221)
------------- ----------- -------------
Gross profit 5,114 1,193 6,307
Administrative expenses ( 6,273) (1,193) ( 7,466)
Other operating income 96 - 96
------------- ----------- -------------
Operating loss (1,063) - (1,063)
Finance Income - - -
Finance costs (68) - (68)
------------- ----------- -------------
Loss before tax (1,131) - (1,131)
Income tax credit 364 - 364
Loss for the financial period (767) - (767)
============= =========== =============
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END
IR PPUWPBUPWPGA
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September 26, 2023 02:00 ET (06:00 GMT)
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