RNS Number:3063Z
Maelor PLC
02 June 2004
2 June 2004
Maelor PLC - Preliminary Results
Maelor plc, the specialist healthcare products company, announces preliminary
results for the year ended 31 March 2004.
Financial highlights
* Turnover up 15% to #1.34 million (2003: #1.17 million)
* Loss down 46% to #1.12 million (2003: #2.08 million)
* Gross profit up from 31% to 40%
* Operating costs down 34% to #1.80 million (2003: #2.72 million)
* Loss per share of 3.3p (2003: 9.4p)
* Cash balance of #1.91 million (2003: #3.29 million)
Operating highlights
* OptiFlo UK community market share 42% (2003: 33%)
* Volplex sales up 72%
* Volplex regulatory development under way in China
* ContiSol developed and launched within six months
* Acquisition of IPR relating to inhaled anaesthetics
* Micelle technology deal with US pharmaceutical company
* Development of Maelor Oral Syringes
Commenting on the results Chairman, Alastair Macpherson, said:
"During the past financial year, Maelor's management has continued to work hard
to put the Company onto a stronger footing. In the two years since the
appointment of Stephen Appelbee as Chief Executive, turnover has more than
doubled, and losses have almost halved.
"The Board believes that, with costs under tight control, our current portfolio
of products is capable of delivering profitability. The Company is now on a
sound footing and with an enlarged portfolio of income-producing products we are
managing the risks associated with the life sciences sector."
For further information contact:
Maelor plc
Stephen Appelbee, CEO 07785 367420
Financial Dynamics
Ben Atwell/Lucy Briggs 020 7831 3113
Chairman's Statement
"Turnover has increased, costs are under tight control, and we believe that we
have sufficient working capital to see us through to profitability."
During the past financial year, Maelor's management has continued to work hard
to put the Company onto a stronger footing. In the two years since the
appointment of Stephen Appelbee as Chief Executive, turnover has more than
doubled, and losses have almost halved.
We have made substantial progress with our product portfolio. Our lead product,
the catheter maintenance range, OptiFlo(TM), has increased its community
prescription market share in the UK from 26% to 42% in that two-year period. We
have also launched two other brands, Volplex(R), our blood plasma substitute
product and ContiSol(TM), our own catheter maintenance brand, and Maelor's
products are now available in five countries.
Turnover has increased, costs are under tight control, and we believe that we
have sufficient working capital to see us through to profitability.
Financial summary
Maelor's turnover of #1,340,005 (2003: #1,169,744) represents a 15% increase
over last year, driven primarily by greater sales of Volplex in the second half
of the year.
The Group's loss for the year at #1,118,016 (2003: #2,076,930) was a lower
figure than we budgeted and represents a 46% reduction from the previous year.
Group cash balances at 31 March 2004 were #1,913,748 (2003: #3,294,656).
Business summary
During the year, we have made substantial progress with our broadening product
portfolio. Sales of OptiFlo, distributed by Bard Limited (Bard), continue to
grow, and the product remains the major contributor to turnover.
We also launched ContiSol, our own brand of urethral catheter cleansing
solutions, in Greece and Spain. Further launches in Europe and other parts of
the world are expected in the next 12 months.
Growth in Volplex 500ml sales in the UK has been most encouraging. With the
market being dominated by NHS contracts, our distributor, Cambridge
Laboratories, has won over half of the business tendered since the launch of
Volplex. This success has encouraged us to invest in the Volplex 1 litre
presentation, whose recent approval should result in improved profit margins
later in 2004.
The approval of the TendaGel(TM) Marketing Authorisation Application in the UK was
announced in November 2003. We continue to conduct an extensive commercial
review of this product's potential with our UK distributor, Bard, in the light
of significant changes in the market since we began the original development of
this product.
Work on micelle propofol continues to provide us with compelling data. That we
have not so far attracted a partner to assist in the commercial exploitation of
this product is a major disappointment to us. Our success in other areas,
however, gives us the comfort that we no longer need revenue from micelle
propofol to achieve profitability, but we do not underestimate the importance of
this product to Maelor's future growth potential.
Corporate activity
While Maelor continues to grow organically, your Board has recognised the
importance of expanding our current portfolio through the acquisition of
products or businesses that are complementary to our strategy. This process
started in earnest about a year ago, and has already resulted in the acquisition
of two new products, at least one of which, Maelor Oral Syringes, should be
making a contribution to our bottom line in the current financial year. Whilst
we have also had merger discussions with several companies, we have only
considered those opportunities, which we consider would accelerate our drive to
profitability and allow us to retain control of Maelor as an innovative
healthcare company.
During the year, we received an unsolicited approach to acquire the Company. We
gave proper consideration to it but were unable to negotiate a suitable basis
for making any recommendation to shareholders and the approach was subsequently
withdrawn.
Outlook
Your Board believes that, with costs under tight control, our current portfolio
of products is capable of delivering profitability. The Company is now on a
sound footing and with an enlarged portfolio of income-producing products we are
managing the risks associated with the life sciences sector. Our portfolio is to
be supplemented in the current financial year by the launch of at least one new
product, which will support Maelor's future growth.
We remain committed to the search for a partner for micelle propofol and
continue to seek out further commercial opportunities that will assist in the
drive to profitability.
Alastair Macpherson
Chairman
Chief Executive's Review
"With profitability in sight, we are seeking further growth opportunities
through the acquisition of compatible businesses or products."
During the last year, we have matured significantly as a company by broadening
our portfolio, as well as by increasing the market penetration of our leading
products. Our initiative in gaining CE Mark accreditation has enabled us to
launch our own brand of our most successful product (OptiFlo) in two countries
under the trade name of ContiSol. Maelor is committed to the continued roll-out
of ContiSol in those markets where Bard has not already acquired the
distribution rights. We are supplementing our existing range with both in-house
developments and in-licensed opportunities, with the result that in the current
year we will see the introduction of further products, the first of these being
Maelor Oral Syringes.
Approved products
OptiFlo
OptiFlo, our range of catheter cleansing solutions sold by Bard, has continued
its outstanding sales performance. The product's share of the UK community
prescription market has now reached 42% (2003: 33%), and at its present rate of
growth it will become the market leader in the current financial year. We have
now moved to a quarterly manufacturing schedule to avoid seasonal variations in
our sales to Bard.
We are in discussions with Bard about expanding their territory. Bard's sales in
Italy, a market where it is normal practice to change catheters frequently
rather than cleanse the indwelling catheter, have been disappointing, and they
have decided to stop promoting the product there.
Volplex
Volplex's first full year since its approval in the UK has seen a number of
milestones achieved. Our partner, Cambridge Laboratories, has had several major
successes in the highly competitive NHS tender market. Volplex is winning over
half of these contracts less than a year since its first successful tender. We
were pleased to announce that the 1 litre pack size had been approved by the UK
regulatory authorities, as this should further enhance the product's
competitiveness by making the administration of Volplex more convenient for our
hospital customers.
The importance of the 1 litre pack size was outlined in a major clinical trial
published in the medical journal Clinical Drug Investigation (Clin Drug Invest
2004: 24(2): 73-79). The safety and tolerability of Volplex in elective surgery
was investigated in a 76-patient study at the Derriford Hospital, Plymouth, UK.
The investigators noted that the mean volume of Volplex used exceeded 1 litre,
as well as concluding that no major adverse events were related to the use of
the product.
We were pleased to announce in December 2003 that Volplex was approved in
Argentina. Launch has been delayed due to a technical issue beyond our control,
which we hope to have solved by the end of 2004. We believe that Volplex
approval in the major market of Bangladesh, which was expected during 2003/04,
is imminent.
The Volplex agreement with the greatest commercial potential for Maelor was
signed in February 2004, when we welcomed Helicon Group Pty Ltd (Helicon) as our
partner for China. Helicon should be completing the marketing authorisation
application in 2004 and, following approval, will be marketing and distributing
the product through a network of sales offices in China.
ContiSol
During the year, we created a third revenue stream for Maelor, resulting from
our being authorised to apply our own CE Marks to medical devices. Within six
months we developed our own range of catheter cleansing solutions, ContiSol, and
launched the product in Greece and Spain.
We have previously reported that the regulatory authorities in North America
considered our range of catheter cleansing solutions to be a drug, rather than a
device, and therefore subject to a more complex and expensive approval process.
We are pleased to report that we have lobbied Canada's Therapeutic Products
Directorate, who found our arguments sufficiently compelling to reverse their
opinion. Subsequently, we have submitted a marketing authorisation application
as a device and in May 2004 received approval for ContiSol in Canada. We are
actively seeking a distribution partner for this important market.
Having had this major success, we can turn our attention to the Food and Drug
Administration in the United States, where we hope our arguments will be equally
persuasive.
TendaGel
Our pleasure at the UK approval of TendaGel has been tempered by the general
collapse in prices of such products in the international market, which has
squeezed profitability. We are examining ways in which we can gain a return on
our investment.
An interim analysis of the Phase III clinical trial was presented at the World
Congress of Endourology in Montreal in September. The authors concluded that
TendaGel was effective and had safety advantages over the competing products
with which it was compared.
Development products
Micelle propofol
It remains our greatest challenge to conclude a development deal for micelle
propofol that accurately reflects our assessment of the true value of the
product. The additional trials that we have conducted confirm our belief in the
formulation, as well as making us more determined to secure a major partner for
this important product.
Our partner for veterinary micelle propofol, Dechra plc, has experienced some
further delays during the validation of stability batches, and it is now
unlikely that this product will be available before 2005.
Micelle technology
In March 2004, we announced that we had acquired the intellectual property
rights to new technology associated with inhaled anaesthetics from KBIG Limited
(KBIG). This may enable us to develop a means of administering propofol (the
world's best-selling injectable general anaesthetic), and other similar
products, in a wider range of clinical settings.
Later in the same month we signed a collaborative study agreement with a
US-based pharmaceutical company in connection with our micelle technology. This
is the first agreement with an external party to apply our innovative technology
to a New Chemical Entity and, if successful, could lead to future collaboration
in this area.
New product acquisitions
We have enhanced the value of our product portfolio with the addition of new
revenue streams. These acquisitions are the result of our targeted strategy in
the fields of critical and palliative care.
Maelor Oral Syringes fulfil an un-met need for individually wrapped devices to
give doses of liquid products accurately to patients (usually infants or the
infirm), who cannot easily be treated by other routes of administration.
This niche product will be sold direct to our customers, thus enabling Maelor to
retain a significantly greater profit margin.
Prospects
We believe that Maelor has made substantial progress in the last financial year.
With losses almost halving and revenues increasing by 15%, we retain a very
tight control over costs.
Last year's fundraising has enabled us to invest in carefully chosen development
areas, which will result in fast returns. Volplex 1 litre, ContiSol and Maelor
Oral Syringes are three examples which should be making further contributions in
the current financial year.
We are already creating a strong international patent position following the
acquisition of inhaled anaesthetic technology from KBIG. By establishing further
collaborations with our micelle technology we shall ensure that Maelor remains
at the leading edge of this innovative area.
Finally, with profitability in sight, we are seeking further growth
opportunities through the acquisition of compatible businesses or products.
Stephen Appelbee
Chief Executive Officer
Consolidated profit and loss account
for the year ended 31 March 2004
Year ended Year ended
31 March 31 March
2004 2003
# # # #
Turnover 1,340,005 1,169,744
Cost of sales (805,080) (804,413)
______ ______
Gross profit 534,925 365,331
Research and development (680,349) (1,565,268)
Administration (1,123,665) (1,159,346)
______ ______
(1,804,014) (2,724,614)
______ ______
Operating loss (1,269,089) (2,359,283)
Interest receivable and similar income 75,404 38,679
Interest payable (6,733) (2,208)
______ ______
Loss on ordinary activities before taxation (1,200,418) (2,322,812)
Taxation recoverable 82,402 245,882
______ ______
Retained loss attributable to the Group (1,118,016) (2,076,930)
______ ______
Basic loss per ordinary share (3.28)p (9.37)p
Diluted loss per ordinary share (3.28)p (9.37)p
______ ______
The Group's activities are classified as continuing.
Statement of total recognised gains and losses
for the year ended 31 March 2004
2004 2003
# #
Reported loss on ordinary activities after taxation (1,118,016) (2,076,930)
Revaluation - 67,989
______ ______
Total recognised gains and losses since previous financial statements (1,118,016) (2,008,941)
______ ______
Note of historical cost profits and losses
for the year ended 31 March 2004
2004 2003
# #
Reported loss on ordinary activities before taxation (1,200,418) (2,322,812)
Difference between a historical cost depreciation charge
and the actual depreciation charge for the year
calculated on the revalued amount 1,020 510
______ ______
Historical cost loss on ordinary activities before taxation (1,199,398) (2,322,302)
______ ______
Historical cost loss for the year sustained after taxation (1,116,996) (2,076,420)
______ ______
Consolidated balance sheet
at 31 March 2004
31 March 2004 31 March 2003
# # # #
Fixed assets
Tangible assets 321,955 360,231
Current assets
Stocks 173,575 100,075
Debtors 1,202,613 596,862
Cash at bank and in hand 1,913,748 3,294,656
______ ______
3,289,936 3,991,593
Creditors: amounts falling due within
one year (807,353) (639,642)
______ ______
Net current assets 2,482,583 3,351,951
______ ______
Total assets less current liabilities 2,804,538 3,712,182
Creditors: amounts falling due after
more than one year (214,798) (4,426)
______ ______
Net assets 2,589,740 3,707,756
______ ______
Capital and reserves
Called up share capital 3,410,458 3,410,458
Share premium account 12,154,094 12,154,094
Revaluation reserve 66,459 67,479
Profit and loss account (13,041,271) (11,924,275)
______ ______
Shareholders' funds - equity 2,589,740 3,707,756
______ ______
These financial statements were approved by the Board of Directors on 1 June
2004 and were signed on its behalf by:
D P L Williams S C Appelbee
Director Director
Consolidated cash flow statement
for the year ended 31 March 2004
Year ended Year ended
31 March 31 March
2004 2003
# #
Cash flow from operating activities (1,659,890) (2,066,285)
Returns on investments and servicing of finance 68,671 40,406
Taxation received - 320,690
Capital expenditure (11,781) (11,131)
______ ______
Cash outflow before management of liquid
resources and financing (1,603,000) (1,716,320)
Financing 222,092 2,872,864
______ ______
(Decrease)/increase in cash in the year (1,380,908) 1,156,544
______ ______
Reconciliation of net cash flow to movement in net funds
for the year ended 31 March 2004
Year ended Year ended
31 March 31 March
2004 2003
# #
(Decrease)/increase in cash in the year (1,380,908) 1,156,544
Cash (inflow)/outflow from (increase)/decrease in
debt and lease financing (222,092) 3,800
Changes in funds resulting from cash flows (1,603,000) 1,160,344
______ ______
Movement in net funds in the year (1,603,000) 1,160,344
Net funds at the start of the year 3,287,452 2,127,108
______ ______
Net funds at the end of the year 1,684,452 3,287,452
______ ______
Notes to the preliminary results for the year ended 31 March 2004
1. The financial information set out in this report, which was approved by
the directors on 1st June 2004, does not constitute the Company's statutory
accounts for the year ended 31 March 2004 or 31 March 2003 but is derived from
those accounts. Statutory accounts for 2003 have been delivered to the Registrar
of Companies and those for 2004 will be delivered following the Company's Annual
General Meeting. The auditors have still to report on the 2004 accounts but have
indicated that they will be issuing an unqualified report in all respects. The
2003 audit report was unqualified and did not contain statements under section
237(2) or (3) of the Companies Act 1985.
2. The preliminary results have been prepared on the basis of the
accounting policies as set out in the financial statements for the year ended 31
March 2003. Key elements of the Company's principal accounting policies are
noted below.
Basis of preparation and consolidation
The financial statements of the Group consolidate the financial statements of
the Company and its subsidiary undertakings whose financial statements were also
made up to 31 March 2004.
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules, modified to
include the revaluation of freehold property.
3. Loss per ordinary share
The calculation for basic loss per ordinary share uses the numerators and
denominators noted below:
2004 2003
# #
Loss attributable to the Group (1,118,016) (2,076,930)
Weighted average number of shares in issue during the year 34,104,583 22,174,218
Basic and diluted loss per share are the same as there is no dilution.
4. The directors do not propose the payment of a dividend.
5. The Report and Accounts of the Company for the year ended 31 March 2004
will be sent to shareholders shortly. The Annual General Meeting will be held in
Wrexham on Tuesday 27 July 2004.
END
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The company news service from the London Stock Exchange
END
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