TIDMFBDU
RNS Number : 1888A
Flying Brands Limited
10 September 2018
Flying Brands Limited (the "Company" or the "Group")
Half Yearly Report (Unaudited)
For the Period Ended 30 June 2018
Flying Brands announces today its preliminary financial results
for the six months ended 30 June 2018.
Highlights
-- Completion of acquisition of Imaging Biometrics, marking
major move into the growing medical imaging market;
-- Continued revenue growth of the company's existing CE Marked and FDA cleared product;
-- Significant strengthening of executive management including
appointment of new Operating CEO;
-- Material progress made on award of FDA approval for Company's
StoneChecker software; high expectation of FDA Approval in near
term and generation of first StoneChecker revenues by end of the
year;
-- Post period end, successful completion of GBP500,000 capital
raise at 2.5p ensuring sufficient financial resources for at least
the next 12 months.
For further information, please contact:
Flying Brands Limited
Trevor Brown/Dr Qu Li/Mr Vinod
Kaushal 0207 469 0930
Peterhouse Capital Limited
Heena Karani/Lucy Williams 0207 220 9797
Chief Executive's Statement
The main events during the period or completed shortly
thereafter include:
-- Following the acquisition of Imaging Biometrics, Flying
Brands is now a revenue producing business;
-- The launch of a capital raising program, which was
successfully completed in August at 2.5p;
-- The appointment of David Smith as Operating CEO.
I report in more detail below.
Imaging Biometrics (IB)
During the period, IB's software development team initiated and
completed the work necessary to integrate IB Neuro, IB Delta T1
maps, IB Diffusion, and IB DCE into cloud-based computing platforms
offered by EnvoyAI, QMENTA, and Medimsight. IB entered into
distribution agreements with each of those organizations thus
enabling immediate and widespread access to IB's branded software
on-line via a "fee-per-click" basis. This work also furthered the
development of a fully automated processing approach. This is
particularly important for IB Neuro, IB's flagship product, which
generates dynamic susceptibility contrast (DSC) perfusion
parameters with the option to quantify relative cerebral blood
volume (rCBV) values. This step towards the automated generation of
quantitative perfusion parameters is a significant milestone and
one that helps to combat the rising cost pressures for large and
small healthcare providers alike.
IB also completed the code modifications required to port its
software to a PC-based DICOM viewer. The viewer is analogous to the
Apple (Mac) based platform, OsiriX, which was the initial host
platform for IB software "plug-ins". This is a significant
opportunity as the vast majority of health care systems and clinics
are predominately PC-based. Thus, it is anticipated that sites who
are interested in accessing IB's advanced imaging solutions will
find an easier path for adoption with a PC-based offering.
In June 2018, IB exhibited at the annual American Society of
Neuro Radiology (ASNR) show in Vancouver, CA and was present at the
International Society of Magnetic Resonance in Medicine (ISMRM) in
Paris, France. At each of those meetings, several scientific
studies were presented in which IB's software was used to obtain
the results.
In order to remain compliant as an ISO13485 certified company,
during the period, IB continued to put forth efforts to update its
existing Quality Management System (QMS) in preparation of the
required transition to the new standard, ISO13485:2016. The new
standard supersedes ISO13485:2003 and has an increased emphasis on
a "risked-based approach" throughout the life-cycle of a medical
device. Maintaining compliance with this quality standard
underscores IB's commitment to providing high-quality products and
services to its clients. An independent certification audit is
scheduled for early Q4.
IB also worked closely with Stone Checker in preparing the
resubmission of a US Food and Drug Administration (FDA) 510(k)
application for StoneChecker Software. The 510(k) authorizes market
clearance in the USA for StoneChecker Software. Multiple
teleconferences and phone conversations with the FDA helped
strengthen the 510(k) application which we believe were
sufficiently addressed by the team.
StoneChecker Software (SC or StoneChecker)
The first six months has been dominated by discussions with the
FDA concerning certification or marketing clearance of the SC
software. The original 510(k) application was submitted to the FDA
in March 2018. The FDA has wrestled with the challenge of clearing
sophisticated medical software, particularly software using
algorithms derived from the latest artificial intelligence
techniques and has engaged in an active two-way discussion
concerning the most suitable predicate software product for the
510(k) application. This dialogue with the FDA has resulted in the
adoption of a new predicate software product which the FDA has
agreed will result in a more efficient and definitive approach with
a clearance decision expected in Q3/4.
The FDA acknowledged receipt of IB's renewed submission in
August 2018. The FDA publicly states its performance goal is to
process 510(k) submissions within 90 calendar days and based upon
their published results, the majority of decisions are rendered
within this period.
The award of a CE certification at the end of 2017 has enabled
management to undertake both clinical and commercial discussions
during the first six months of 2018. The overwhelming theme of the
clinical discussions has been the widely recognised importance of
having a reproducible measuring device for accurately describing
and comparing kidney stones. The irregular shape of kidney stones
has created problems over many years in establishing the true
volume of a kidney stone and has made the accurate reproduction of
measurements such as skin to kidney stone extremely difficult.
Clinicians have fed back to the SC management team that a
reproducible software such as the SC product will enable different
research studies and alternative treatment modalities to be
compared accurately. There have also been frequent discussions with
clinicians about the appropriate accuracy threshold which
StoneChecker software has to achieve in order for doctors to use it
in their everyday practice. The reviews are mixed but tend towards
requiring between 85 to 90% predictive accuracy before the software
can be routinely used. StoneChecker management are creating data
collection and feedback processes from actual lithotripsy treatment
outcomes to enable the software to continue to learn and improve
and reach this required predictive level.
Commercial discussions have been on-going and there have been
successful developments in each continent. The first fully signed
commercial agreement has been reached in South Korea where the
product is currently undergoing local clinical evaluation through
the work of StoneChecker distributor ISG. There has been progress
in a number of European countries including the UK. Commercial
sales are expected in Q4.
David Smith, Operating CEO. Strategic overview and introductory
statement:
"I have worked in the medical device business for 30 years, and
as an entrepreneur in the field for the last 15 years, seeking out
opportunities to improve patient healthcare and create outstanding
value for shareholders. Often this work has been focused on
producing a better, more efficient tool for use in the operating
room. The improvements in health care delivery have been important,
but relatively small, yet the businesses have been financially
successful.
When I was approached by Flying Brands to become their COO, and
the CEO of their operating businesses, what immediately struck me
was the opportunity to be the architect in the way that healthcare
is delivered. This is an opportunity for a leap in healthcare, not
the creeping change I have previously successfully delivered. A
healthcare revolution, not the evolution I have previously
managed.
Imagine a world where expensive and invasive medical treatments
are only used on patients that truly need it. Currently, resource
consuming and painful biopsies are sought to confirm the presence
or absence of disease in the face of ambiguous results from medical
imaging. In an average hospital, hundreds of scans are taken daily,
searching for disease. Imagine a software that is capable of
detecting diseased patients and differentiating them from healthy
patients, allowing healthcare practitioners to focus their care on
the patients that need it the most. Imagine a software that
improves its diagnostic capability over time, becoming more
intelligent with each successful diagnosis and providing this
knowledge and 'Artificial Intelligence' to those responsible for
our healthcare.
I believe that Flying Brands through its operating businesses,
has the capability to develop the software able to deliver such a
revolution ".
Prospects for H2 2018
Post period end, FB successfully raised GBP500,000 at 2.5p to
fund the further development of the businesses which should ensure
that we have sufficient financial resources for at least the next
12 months.
We expect continued revenue growth of the company's existing CE
Marked and FDA cleared products, and recently have seen an increase
in the number of customer demonstrations requested; the first step
in the selling process.
We expect to be awarded a 510(k) clearance for StoneChecker,
giving this product market access to the USA. We also expect to
generate the first revenues from this product before the end of the
year.
In South Korea the MFDS regulatory approval process has also
been initiated for StoneChecker which would give the company's
partner the ability to sell from around the end of the year.
The IB Clinic suite of products is currently being evaluated by
a number of leading institutions for incorporation into their
radiology practices and we have seen a marked increase in the
number of demonstrations requested for our suite of software
products from opinion leading institutions. We would expect some of
these inquiries to be converted into sales revenue during H2 2018
and H1 2019.
Imaging Biometrics' development efforts are being concentrated
into following main areas:
a) Continuing to refine the company's proprietary algorithms
that are capable of distinguishing between real brain tumour growth
and "pseudo progression"; the appearance of growth associated with
scarring or damage created by radiotherapy;
b) Further exploitation of the company's ability to
automatically generate quantitative perfusion parameters which it
believes are unique and powerful diagnostic tools;
c) Developing a 'cloud based' version of the software that can
be easily and inexpensively accessed by every single hospital with
internet access. This gives access to the company's suite of
products for a per patient 'click fee' giving the customer the
option to own the software and have financial responsibility for
maintaining it or simply access it on a 'per patient" basis. The
individual hospital's choice will be predicated on the budget
available, their competence in maintaining the software on their
servers and the overall number of patients for whom they intend to
access the service;
d) Benefiting from Machine Learning (an aspect of Artificial
Intelligence), so that the company's algorithms improve over time,
becoming more sensitive and predicting more accurately the presence
or absence of brain tumour progression. In effect, the more widely
used the product is, the more accurate it becomes;
e) Using lightly modified versions of the existing perfusion and
diffusion algorithms in new areas so that Imaging Biometrics can
exploit opportunities in different parts of the body; and
f) Continuing to develop core lab post processing services for
Contract Research Organizations to assist them in the evaluation of
new and emerging pharmaceutical/treatment therapies.
Outlook
The company is entering an exciting phase of development. We
look forward to updating shareholders as events unfold.
Trevor Brown
Chief Executive
Results for the 2018 interim financial period
A summary of the key financial results is set out in the table
below:
30.6.2018
GBP'000
--------------------- --------------------------
Revenue 126
Operating expenses (487)
--------------------- --------------------------
Operating loss (361)
Finance costs (10)
--------------------- --------------------------
Loss before tax (371)
Taxation -
Loss for the period (371)
Interest
The net interest cost for the Group for the period was GBP0.01m
(2017: GBPnil).
Loss before tax
Loss before tax for the period was GBP0.37m (2017: GBP0.2m).
Taxation
Taxation charge was GBPnil for the period (2017: GBPnil).
Earnings per share
Basic and diluted earnings per share for the period were 0.55p
loss (2017: 0.62p loss).
Financial position
The Group's balance sheet as at 30 June 2018 can be summarised
as set out in the table below:
Assets Liabilities Net assets
GBP'm GBP'm GBP'm
GBP'000 GBP'000 GBP'000
-------------------------------- -------- ------------ -----------
Non-current assets 486 - 486
Current assets and liabilities 31 (288) (257)
Loans and provisions - - -
Total as at 30 June 2018 517 (288) 229
-------------------------------- -------- ------------ -----------
Total as at 31 December 2017 693 (103) 590
-------------------------------- -------- ------------ -----------
Cash flow
Net cash outflow for 2018 was GBP0.4m (2017: GBP0.4m
inflow).
This outflow reflects the purchase of a subsidiary and
operations of the Group during the period. The overall movement in
creditors was GBP0.2m (2017: GBP0.04m).
Consolidated Income Statement
6 months ended 30 June 2018
(Audited)
Half year Full year Half year
ended ended ended
30.06.18 31.12.2017 30.6.2017
GBP'000 GBP'000 GBP'000
Revenue 126 - -
Cost of sales - - -
-------------------------------- ---------- ----------- ----------
Gross profit - - -
Operating expenses (487) (258) (192)
-------------------------------- ---------- ----------- ----------
Operating loss (361) (258) (192)
Net finance expense (10) (23) -
Loss before tax (371) (281) (192)
Taxation - - -
-------------------------------- ---------- ----------- ----------
Loss for the period (371) (281) (192)
Loss attributable to the Group (371) (281) (192)
-------------------------------- ---------- ----------- ----------
Loss per share expressed in
pence per share
From continuing and total operations:
Basic & diluted (0.55) (0.56) (0.62)
Consolidated Statement of Comprehensive Income
6 months ended 30 June 2018
(Audited)
Half year Full year Half year
ended ended ended
30.06.18 31.12.2017 30.6.2017
GBP'000 GBP'000 GBP'000
-------------------------------------- --------- -------------------- ---------
Loss profit for the period (371) (281) (192)
Sale of treasury shares - (840) -
Total comprehensive loss attributable
to the Group (371) (1,121) (192)
Consolidated Balance Sheet
As at 30 June 2018
(Audited)
30.06.18 31.12.2017 30.6.2017
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 439 248 243
Development costs 47 47 35
Total non-current assets 486 295 278
Current assets
Trade and other receivables 26 11 4
Cash 5 387 498
---------------------------------- ------------------- -------------------- --------------------
Total current assets 31 398 502
Current liabilities
Trade and other payables (288) (103) (93)
Net current (liabilities)/assets (257) 295 409
Non - current liabilities
Loan - - (375)
Net Assets/(liabilities) 229 590 312
Share capital 676 676 590
Share premium 18,418 18,418 18,633
Capital redemption reserve 24 24 22
Merger reserve 160 160 -
Treasury shares - - (840)
Convertible loan equity reserve 379 369 53
Warrant reserve - - 13
Retained earnings (19,428) (19,057) (18,159)
Total equity attributable to
equity holders of the parent 229 590 312
---------------------------------- ------------------- -------------------- --------------------
Consolidated statement of changes in equity
6 months ended 30 June 2018
Convertible
Capital loan note
Share Share redemption Merger Treasury / warrant Retained Total
capital premium reserve reserve shares reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- ----------- -------- -------- ------------- --------- -----------
Balance at 1 January
2017 310 18,062 22 - (840) 423 (17,949) 28
Loss for the period - - - - - - (281) (281)
Total comprehensive
loss - - - - - - (281) (281)
------------------------ -------- -------- ----------- -------- -------- ------------- --------- -----------
Shares redeemed in
period (2) - 2 - - - - -
Warrants exercised - - - - - (13) 13 -
Shares issued in period 368 409 - 160 - - - 937
Cost of shares issued (53) - - - - - (53)
Sale of treasury shares - - - - 840 - (840) -
Movement in year - - - - - (41) - (41)
Balance at 31 December
2017 676 18,418 24 160 - 369 (19,057) 590
Loss for the period - - - - - 10 (371) (361)
Total comprehensive
loss - - - - - 10 (371) (361)
------------------------ -------- -------- ----------- -------- -------- ------------- --------- -----------
Balance at 30 June
2018 676 18,418 24 160 - 379 (19,428) 229
Consolidated Cash Flow Statement
6 months ended 30 June 2018
(Audited)
Half year Full year Half year
ended ended ended
30.06.18 31.12.17 30.06.17
GBP'000 GBP'000 GBP'000
-------------------------------------- --------- ------------------------ ------------------------
Loss for the period (371) (281) (192)
Adjustment for:
(Increase)/decrease in receivables (15) 3 10
Increase/(decrease) in payables 185 44 41
(Increase)/decrease in goodwill (87) - -
Net finance expenditure 10 23 -
Net cash used in operating activities (278) (211) (141)
Cash flows from investing activities
Purchase of subsidiaries (104) - -
Purchase of intangible assets - (47) -
Net cash from/(used in) investing
activities (104) (47) -
-------------------------------------- --------- ------------------------ ------------------------
Cash flows from financing activities
Shares issued - 580 573
Cost of shares issued - (1) -
Net cash from/(used in) financing
activities - 579 573
-------------------------------------- --------- ------------------------ ------------------------
Net increase/(decrease) in cash
and cash equivalents (382) 321 432
-------------------------------------- --------- ------------------------ ------------------------
Cash and cash equivalents brought
forward 387 66 66
-------------------------------------- --------- ------------------------ ------------------------
Cash and cash equivalents carried
forward 5 387 498
-------------------------------------- --------- ------------------------ ------------------------
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of
these financial results are set out below. These policies have been
consistently applied to all financial periods presented, unless
otherwise stated.
Basis of preparation and going concern basis
Flying Brands Limited (the Company) is a limited liability
company incorporated and domiciled in Jersey. The consolidated
financial results of the Company comprise the Company and its
subsidiaries (together referred to as the Group). The accounting
policies of the Company are the same as for the Group except where
separately disclosed.
These consolidated financial results have been prepared and
approved by the Directors in accordance with International
Financial Reporting Standards as adopted by the European Union
(adopted IFRS).
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in this review. The financial position of the Group,
its cash flows and liquidity position are described in this
business review. In addition, the below notes to the financial
results include the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives;
details of its financial instruments; and its exposure to credit
risk and liquidity risk. As highlighted in below, the Group meets
its day to day working capital requirements through its on-going
cash flows.
Basis of consolidation
Subsidiaries are all entities over which the Group has the power
to govern the financial and operating policies so as to obtain
benefits from its activities generally accompanying a shareholding
of more than one half of the voting rights.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair value at the acquisition date,
irrespective of the extent of any minority interest. The excess of
the cost of acquisition over the fair value of the Group's share of
the identifiable assets, liabilities and contingent liabilities
acquired is recorded as goodwill. The results of the subsidiary
undertakings acquired or disposed of during the period are included
in the Consolidated Income Statement from the date that control
commences until the date control ceases.
Inter-company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
Segment reporting
The Group is currently a cash shell and the directors believe
that there is no benefit to show any segmental reporting until a
new strategy is undertaken.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for
using the acquisition method. The consideration for each
acquisition is measured at the aggregate of the fair values (at the
date of exchange) of assets given, liabilities incurred or assumed,
and equity instruments issued by the Group in exchange for control
of the acquirer. Acquisition-related costs are recognised in profit
or loss as incurred.
Where applicable, the consideration for the acquisition includes
any asset or liability resulting from a contingent consideration
arrangement, measured at its acquisition-date fair value.
Subsequent changes in such fair values are adjusted against the
cost of acquisition where they qualify as measurement period
adjustments (see below). All other subsequent changes in the fair
value of contingent consideration classified as an asset or
liability are accounted for in accordance with relevant IFRSs.
Changes in the fair value of contingent consideration classified as
equity are not recognised.
Where a business combination is achieved in stages, the Group's
previously-held interests in the acquired entity are remeasured to
fair value at the acquisition date (i.e. the date the Group attains
control) and the resulting gain or loss, if any, is recognised in
profit or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously been recognised
in other comprehensive income are reclassified to profit or loss,
where such treatment would be appropriate if that interest were
disposed of.
The acquirer's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS
3(2008) are recognised at their fair value at the acquisition date,
except that:
-- deferred tax assets or liabilities and liabilities or assets
related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee
Benefits respectively;
-- liabilities or equity instruments related to the replacement
by the Group of an acquiree's share-based payment awards are
measured in accordance with IFRS 2 Share-based Payment; and
-- assets (or disposal groups) that are classified as held for
sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance with that
Standard.
If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the
items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period (see below), or
additional assets or liabilities are recognised, to reflect new
information obtained about facts and circumstances that existed as
of the acquisition date that, if known, would have affected the
amounts recognised as of that date.
The measurement period is the period from the date of
acquisition to the date the Group obtains complete information
about facts and circumstances that existed as of the acquisition
date, and is subject to a maximum of one year.
Impairment
(a) Financial assets
A financial asset is assessed at each reporting date to
determine whether there is any evidence that it is impaired. A
financial asset is considered impaired if objective evidence
indicates that one or more events have had a negative effect on the
estimated future cash flows of that asset. Individual significant
financial assets are tested for impairment on an individual basis.
The remaining financial assets are assessed collectively in groups
that share similar credit risk characteristics. All impairment
losses are recognised in the consolidated income statement.
(b) Non-financial assets
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. For goodwill and
intangible assets that have indefinite lives or that are not yet
available for use, the recoverable amount is estimated at each
reporting date. The recoverable amount of an asset is the greater
of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risk specific to the asset. The goodwill acquired in a
business combination, for the purpose of impairment testing, is
allocated to cash-generating units that are expected to benefit
from the synergies of the combination. An impairment loss is
recognised if the carrying amount of an asset exceeds its
recoverable amount. Impairment losses are recognised in the
consolidated income statement. An impairment loss in respect of
goodwill is not reversed irrespective of whether that loss is
recovered subsequently. In respect of other assets, impairment
losses recognised in prior periods are assessed at each reporting
date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset
carrying amount does not exceed the carrying amount that would have
been determined if no impairment loss had been recognised.
Financial assets
All financial assets are recognised and derecognised on a trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are
initially measured at fair value, plus transaction costs, except
for those financial assets classified as at fair value through
profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified
categories: financial assets 'at fair value through profit or loss'
(FVTPL), 'held-to-maturity' investments, 'available-for-sale' (AFS)
financial assets and 'loans and receivables'. The classification
depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition.
Trade receivables
Trade receivables are recognised initially at amortised cost,
which is the fair value of consideration receivable and is adjusted
for provision or impairment. A provision for impairment of trade
receivables is established when there is objective evidence that
the Group will not be able to collect all the monies due. The
amount of the provision is recognised in the consolidated income
statement immediately.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid investments
with maturities of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the Group's cash
management are included as a component of cash and cash equivalents
for the purpose of the consolidated cash flow statement.
Bank borrowings and other loans
Interest-bearing loans and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct
issue costs, are accounted for on an accruals basis using the
effective interest rate method and are added to the carrying amount
of the instrument to the extent that they are not settled in the
period in which they arise.
Share capital
(a) Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects.
(b) Repurchase of share capital (treasury shares)
When share capital recognised as equity is repurchased, the
amount of the consideration paid, including directly attributable
costs, net of any tax effects, is recognised as a deduction from
equity. Repurchased shares are classified as treasury shares and
are presented as a deduction from total equity. When treasury
shares are sold or reissued subsequently, the amount received is
recognised as an increase in equity, and the resulting surplus or
deficit on the transaction is transferred to/from retained
earnings.
Taxation
Income tax payable is provided on taxable profits using tax
rates enacted or substantively enacted at the balance sheet
date.
Deferred taxation is provided in full, using the liability
method on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial results. Deferred tax is determined using
tax rates (and laws) that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when
the related balance sheet tax asset is realised or the deferred
liability is settled. Deferred income tax assets are recognised to
the extent that it is possible that future taxable profit will be
available against which temporary differences can be utilised.
Income tax is recognised in the consolidated income statement
except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity.
Financial instruments
(a) Financial guarantee contracts
Where Group companies enter into financial guarantee contracts
to guarantee the indebtedness of other companies within the Group,
the Group considers these to be insurance arrangements, and
accounts for them as such. In this respect, the Group treats the
guarantee contract as a formal contingent liability until such time
as it becomes probable that the Company will be required to make a
payment under the guarantee.
(b) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in
equity and debt securities, trade and other receivables, cash and
cash equivalents, loans and borrowings and trade and other
payables.
Non-derivative financial instruments are recognised initially at
fair value plus, for instruments not at fair value through profit
or loss, any directly attributable transaction costs. Subsequent to
initial recognition non-derivative financial instruments are
measured as described below.
Financial risk and credit management
The Group has exposure to the following risks from its use of
financial instruments:
(a) Liquidity risk
(b) Interest rate risk
This note presents information about the Group's exposure to
each of the above risks, the Group's objectives, policies and
processes for measuring and managing risks and the Group's
management of capital. Further quantitative disclosures are
included throughout these consolidated financial results.
The Board of Directors has overall responsibility for the
establishment and oversight of the Group's risk management
framework.
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group's
activities.
The Group Audit Committee oversees how management monitors
compliance with the Group's risk management policies and procedures
and reviews the adequacy of the risk management framework in
relation to the risks faced by the Group.
(a) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Group's reputation. The strategy of the Directors (outlined
earlier) is designed to address the risk that the Group has
insufficient liquid resources to satisfy its requirements.
(b) Interest rate risk
The Group has no floating rate loans. Thus the Group has no
exposure to interest rate risk.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. The Directors monitor the
return on capital, which the Group defines as net operating income
divided by total shareholders' equity. The Board also monitors the
level of dividends to ordinary shareholders.
From time to time the Group purchases its own shares on the
market; the timing of these purchases depends on market prices.
Primarily the shares are intended to be used for issuing shares
under the Group's share option programme. Buy and sell decisions
are made on a specific transaction basis by the Board of Directors;
the Group does not have a defined share buy-back plan.
There were no changes in the Group's approach to capital
management during the period.
Neither the Company nor any of its subsidiaries are subject to
externally imposed capital requirements.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial period are discussed below.
(a) Going concern basis of preparation
The Directors decision to prepare these accounts on a going
concern basis is based on assumptions which are discussed above and
in the business review.
Earnings per share
Basic and diluted
Earnings per share is calculated by dividing the (loss)/profit
attributable to the equity holders of the Company by the weighted
average number of Ordinary shares in issue during the period,
excluding Ordinary shares purchased by the Company and held as
treasury shares. The Company previously had one category of
dilutive potential Ordinary shares: LTIP awards. These have all
lapsed.
Half year Full year Half year
ended ended ended
30.06.18 31.12.17 30.6.17
GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- ---------
(Loss)/profit attributable to
equity holders of the Company
(GBP'000) (371) (281) (192)
Weighted average number of shares
in issue (Number '000) 67,559 49,860 30,881
(Loss)/earnings per share (pence) (0.55) (0.56) (0.62)
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SSEFMWFASEFU
(END) Dow Jones Newswires
September 10, 2018 02:00 ET (06:00 GMT)
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