RNS Number:0758H
Maelor PLC
06 November 2007
6th November 2007
Maelor plc (the 'Company' or the 'Group') - Interim Results
Maelor transformed to deliver profits ahead of expectations
Maelor plc, the UK based specialist hospital medicines group, is pleased to
announce its interim results for the six months ended 30 September 2007.
Financial Highlights
Transformational results ahead of expectations
* Turnover up 132% to #3.1 million (H1 2006: #1.3 million)
* Profit before tax of #0.7 million (H1 2006: loss #0.07 million)
* Sustainable gross margin improvement to 57% (H1 2006: 46%)
* Interim earnings per share of 0.48p (H1 2006: loss 0.22p)
* Net cash balance increased to #1.7 million (H1 2006: #1.1 million)
Operational Highlights
Transformation delivered through determined implementation of strategy
* Growing portfolio through acquisition and licensing
* Transforming acquisition of Acorus Therapeutics Limited - Integration
completed ahead of schedule
* International distributor network established
* Licensing of Aloxi(R) from Helsinn - launch scheduled for March 2008
* Driving growth from launched brands
* Strengthened commercial team to drive sales
* Volplex(R) market share driven from 16% (H1 2006) to 26%
* Cryogesic(R) sales growing and expansion plans implemented
* Mysoline(R) transfer and introduction completed in all major
territories ahead of schedule
* Partnering non-core portfolio
* Partnership with Bard for OptiFloTM catheter maintenance solutions
extended
- Market leadership position maintained at 54% market share
* Micelle nanotechnology collaboration with Plethora Solutions Limited
progressing well
* Rapidly progressing pipeline
* Haemopressin(R) and ISOplexTM on schedule for launch in H2 2008/09
* GentisprayTM phase III programme on schedule
* Mysoline(R) development programme in Essential Tremor initiated
Commenting on the results Tim Wright, CEO, said:
"I am very pleased to be able to report such positive results, which are ahead
of expectations and reinforce the robustness of our strategy.
"In addition to our strong portfolio of marketed brands in the UK and
internationally we have built an impressive pipeline of late stage products.
These assure the continued growth of the business which we will accelerate
through further acquisition and licensing.
"Trading since the period end remains strong and we look to the future with
confidence."
- ENDS -
For further information contact:
Maelor plc
Tim Wright, Chief Executive Officer + 44 (0) 1244 625150
Financial Dynamics
Billy Clegg / Ed Westropp + 44 (0) 20 7831 3113
Noble & Company Limited
Matthew Hall/Sam Reynolds + 44 (0) 20 7763 2200
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
We are pleased to report the Company's interim results for the six months to 30
September 2007.
Following the successful turnaround of the business in 2006-07, Maelor has had a
very active period achieving a strong set of financial results including a
turnover of over #3 million that surpassed the total for the whole of 2006-07
(#2.8 million) and pre-tax profits of #0.7 million. Over the six months the
Group has continued on strategy with its development into a specialist hospital
medicines group, focusing on critical care, neurology and oncology as well as
commercialising its non-core products through partnerships.
During the period we finalised the acquisition of Acorus Therapeutics Limited ("
Acorus"), the successful specialist pharmaceuticals and medical devices company
and completed its integration ahead of schedule. Acorus brings a portfolio of
revenue generating, good margin assets primarily focused on critical care and
neurology.
Other operational highlights for the period included continued strong sales and
market share growth from Volplex and Cryogesic, execution of the planned
programme of regulatory switches of Mysoline in various international
territories and the scheduled progression through development and approval of
ISOplex, AquiHex, Haemopressin and Gentispray.
Financial summary
Turnover for the six months to 30 September 2007 was #3.1 million (H1 2006:
#1.3million) representing an increase of 132% compared to the equivalent period
last year. This significant increase results from the solid growth of our
commercialised core products and the contribution of Mysoline and Cryogesic from
Acorus since the date of acquisition on 10 May 2007.
Our Operations team continues to focus on driving efficiencies in the
manufacturing and supply of our products and this, combined with the portfolio
acquired from Acorus, has contributed to the sustainable increase in gross
margin to an average of 57% in the six months to 30 September 2007.
The Group reported an operating profit of #0.6 million (H1 2006: loss #0.09
million) and profit before tax of #0.7 million (H1 2006: loss #0.07 million) for
the period.
Earnings per share were 0.48p (H1 2006: loss of 0.22p per share). Diluted
earnings per share were 0.45p (H1 2006: loss per share 0.22p).
Group net cash balances at 30 September 2007 increased to #1.7 million (H1 2006:
#1.1 million).
For the financial year ending 31 March 2008, the Group will prepare its annual
consolidated financial statements in accordance with International Financial
Reporting Standards ('IFRS') as adopted by the European Union and implemented in
the UK. These half year financial statements are therefore prepared based on
International Financial Reporting Standards.
Operational summary
Transformation delivered through determined implementation of strategy
Growing portfolio through acquisition and licensing
The acquisition of Acorus Therapeutics has been a significant focus in the
period and we were pleased to announce the completion of its integration ahead
of schedule. As well as providing a rich portfolio of products, the acquisition
has allowed us to establish our presence through a strong network of
distributors in Europe as well as in South America and South Africa.
Since 30 September we have announced the acquisition of the UK distribution
rights to Aloxi(R) from Helsinn Healthcare SA. Aloxi is a patented new
generation 5-HT3 antagonist used for the prevention of acute nausea and vomiting
associated with high and moderate emetogenic cancer chemotherapy, which is
differentiated by its strength on initiation and the duration of its activity.
Aloxi obtained a centralised registration in Europe in 2005 and is already being
successfully marketed in 40 countries, with annual sales in 2006 of $323 million
worldwide, according to IMS figures.
Driving growth from launched brands
We are building a strong commercial team, who bring experience from a number of
highly respected pharmaceutical companies.
We continue to drive strong growth from Volplex, our plasma replacement brand.
On a moving annual trend (MAT) basis its UK market share increased to 26% (H1
2006: 16%) and we still see further opportunity to continue to grow market
share. Outside the UK, Volplex continues to progress through the regulatory
process in China.
Cryogesic, our cryoanalgesic product, is the market leading anaesthetic freeze
spray in the UK hospital environment. Currently the majority of its uptake is in
obstetric anaesthesia, however, our analysis shows significant growth potential
in a number of other hospital settings, which we are actively pursuing. This
includes oncology where we see an excellent fit with Aloxi.
Mysoline, our oral treatment for Epilepsy and Essential Tremor, continues to see
strong sales in the UK market. In addition we have completed the transition and
launch in all major international markets.
With the strong profile of Mysoline, as one of only two recommended treatments
for Essential Tremor, a condition that affects an estimated 1 in every 25 adults
over the age of 40, we recognise that there is significant potential for growth.
In addition to promotional activities therefore we have initiated a development
programme to offer improved dosage regimens and formulations as we evolve the
brand.
Partnering non-core portfolio
Maintaining focus on later stage hospital specialist products whilst partnering
non-core assets outside of this focus continues to be a key strategy of the
Group.
Since 30 September we have announced a new agreement with Bard Limited (Bard)
for distribution of the OptiFloTM catheter maintenance solutions.The agreement
which covers the UK and Ireland continues the relationship between Bard and
Maelor that has seen the brand grow to become the UK market leader, currently
with a 54% market share.
Our partnership with Plethora Solutions Limited (Plethora), who licensed our
proprietary micelle nanotechnology for application in the treatment for
interstitial cystitis, continues positively. While the use of the nanotechnology
is in late preclinical studies we were encouraged to see Plethora's recent
announcement that the efficacy of its development compound PSD597 as a treatment
for interstitial cystitis had been demonstrated in their phase II clinical
programme.
Rapidly progressing pipeline
We now have a pipeline of pre-launch products which would be the envy of many
larger pharmaceutical organisations. As well as Aloxi, given its approval
across Europe we also anticipate being in a position to launch Dermogesic, our
synergistic cryoanalgesic spray, (for use in settings where flammability is of
concern such as operating theatres and ambulances) during H1 2008/09.
ISOplex, our balanced electrolyte plasma substitute continues through the
development process. Haemopressin, an injection for the treatment of bleeding
oesophageal varices and Acoranil, an antidepressant syrup also used for the
treatment of nocturnal enuresis, are in the regulatory process. All three
products remain on schedule for launch during H2 2008/09.
As with several of our pre-launch brands AquiHex, the water-based bactericidal
product to counteract hospital acquired infections, continues to be sold as a
special. We are targeting launch during H1 2009/10.
Gentispray, our combination of an antibiotic and steroid in a spray device for
the treatment of otitis externa (ear infections), continues through late stage
clinical studies.
Outlook
Maelor is transformed into a fast growing specialist hospital medicines group.
Going forward we are confident in being able to drive continued growth from our
launched brands, while being in the strong position of having a series of
synergistic product launches scheduled over the next two years.
In line with our strategy we intend to accelerate this growth through further
acquisitions. Since 30 September, trading has continued to be strong and we
look to the future with confidence.
Geoff McMillan
Chairman
Tim Wright
Chief Executive Officer
Consolidated income statement
for the six months ended 30 September 2007
Unaudited Unaudited Unaudited
Six months ended Six months ended Year
30 September 2007 30 September 2006 ended
#000 #000 31 March
2007
#000
Revenue 3,087 1,333 2,842
Cost of sales (1,310) (714) (1,486)
Gross profit 1,777 619 1,356
Administrative expenses (1,158) (712) (1,429)
Operating profit/(loss) 619 (93) (73)
Finance expense - (6) (12)
Finance income 40 24 52
Profit/(loss) before taxation 659 (75) (33)
Income tax expense (149) - -
Profit/(loss) for the period attributable to 510 (75) (33)
equity holders of the parent
Basic profit/(loss) per ordinary share 0.48p (0.22)p (0.10)p
Diluted profit/(loss) per ordinary share 0.45p (0.22)p (0.10)p
All operations are continuing.
There are no other recognised income and expenses other than those in the
consolidated income statement
Consolidated balance sheet
at 30 September 2007
Unaudited Unaudited Unaudited
30 September 2007 30 September 2006 31 March 2007
#000 (restated, see note #000
2 below)
#000
ASSETS
Non-current assets
Property, plant and equipment 114 11 68
Intangible assets 13,894 - -
Total non-current assets 14,008 11 68
Current assets
Inventories 505 130 150
Trade receivables 1,094 389 529
Other current assets 205 67 69
Cash and cash equivalents 1,693 1,252 1,427
Total current assets 3,497 1,838 2,175
Asset held for sale - 365 -
Total assets 17,505 2,214 2,243
EQUITY AND LIABILITIES
Equity
Share capital 12,428 3,428 3,428
Other reserves 11,933 12,327 12,191
Retained earnings (13,733) (14,436) (14,243)
Total Equity 10,628 1,319 1,376
Non-current liabilities
Long-term financial liabilities 3,482 162 -
Long term provisions - deferred taxation 1,745 - -
Total non-current liabilities 5,227 162 -
Current liabilities
Trade and other payables 893 468 867
Current portion of long-term borrowings - 20 -
Current tax payable 245 - -
Short-term provisions 512 245 -
Total current liabilities 1,650 733 867
Total liabilities 6,877 895 867
Total equity and liabilities 17,505 2,214 2,243
Consolidated cash flow statement
for the six months ended 30 September 2007
Unaudited Unaudited Unaudited
Six months ended Six months ended Year
30 September 2007 30 September 2006 ended
#000 #000 31 March
2007
#000
Cash flow from operating activities
Profit/(loss) before taxation 659 (75) (33)
Adjustments for:
Finance income (40) (24) (52)
Finance expenses - 6 12
Depreciation and amortisation 16 9 19
Loss on disposal of property, plant and - - 5
equipment
Share based payments expense 99 15
Changes in inventory (355) 76 55
Changes in trade and other receivables (701) (77) (225)
Changes in trade and other payables 635 35 190
Cash generated from operations 313 (50) (14)
Interest paid - (6) (12)
Taxation received - - 6
Net cash from operating activities 313 (56) (20)
Cash flows from investing activities
Acquisition of subsidiary (7,983) - -
Purchase of property plant and equipment, (104) (1) (66)
development costs and licences
Proceeds from sale of property, plant and - - 358
equipment
Interest received 40 24 52
Net cash used in investing activities (8,047) 23 344
Cash flows from financing activities
Proceeds from issue of share capital 8,000 - -
Repayment of borrowings - (11) (193)
Net cash used in financing activities 8,000 (11) (193)
Net movement in cash and cash equivalents 266 (44) 131
Cash and cash equivalents at start of period 1,427 1,296 1,296
Cash and cash equivalents at end of period 1,693 1,252 1,427
Notes to the Financial Statements
1. Basis of preparation and transition to International Financial Reporting
Standards
* For all periods up to and including 31 March 2007, the Group prepared its
financial statements in accordance with UK Generally Accepted Accounting
Principles ('UK GAAP'). For the financial year ending 31 March 2008, the
Group will prepare its annual consolidated financial statements in
accordance with International Financial Reporting Standards ('IFRS') as
adopted by the European Union and implemented in the UK.
* In preparing these financial statements, the Group started from an opening
balance sheet as at 1 April 2006, the Group's date of transition to IFRS and
considered those changes in accounting policies and other restatements
required by IFRS.
* The group has applied IFRS as expected to be applicable for the year ended
31 March 2008. These are subject to ongoing review and endorsement by the
European Commission, and possible amendment by the International Accounting
Standards Board, and are therefore subject to possible change. These
potential changes and the development of industry consensus could result in
the need to change the basis of accounting or presentation of certain
financial information from that presented in this document.
* The comparative figures for the financial year ended 31 March 2007 are not
the statutory accounts for the financial year but are abridged from those
accounts prepared under UK GAAP which have been reported on by the Group's
auditors and delivered to the Registrar of Companies. The report of the
auditors was unqualified, did not include references to any matter to which
the auditors drew attention by way of emphasis without qualifying their
report and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
* These half year financial statements have not been audited and do not
constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. They have been prepared in accordance with the Group's
accounting policies based on IFRS standards that are expected to apply for
the financial year ending 31 March 2008.
* Management are required to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. Management review these on a regular
basis, however actual results may differ from these estimates.
* The Group has not applied International Accounting Standard ('IAS') 34,
Interim Financial Reporting, which is not mandatory for UK groups, in the
preparation of these interim financial statements.
* The interim financial statements were approved by the Board of Directors
on 5 November 2007.
2. Principal items arising from the transition from UK GAAP to IFRS
* The group half year financial statements have been prepared based on IFRS.
The accounting policies and methods of computation used in the preparation
of these half year financial statements are consistent with those used in
the financial statements for the year ended 31 March 2007 except where there
are differences between UK GAAP and IFRS. The main differences between the
group financial statements prepared under UK GAAP and those under IFRS are
detailed below:
* IFRS 5 "Non-current assets held for sale and discontinued operations"
- The freehold land and building with a net book value of #0.4 million
at 30 September 2006 was sold in March 2007. In accordance with
IFRS 5 the asset has been reclassified from non-current assets to an
asset held for sale under current assets in the balance sheet as at
30 September 2006.
* The cash flow statement has been prepared in conformity with IAS 7 "
Cash flow statements".
* Deferred taxation under IFRS is based on temporary differences rather
than timing differences under UK GAAP.
* No other material adjustments have been identified during the
transition from UK GAAP to IFRS that require a restatement of prior
period results and as such no reconciliations have been presented.
3. Goodwill and intangible assets
* The purchase method of accounting is applied to all business
combinations.
* The cost of intangible assets acquired through a business combination
is deemed to be their fair value at acquisition.
* The excess of purchase consideration paid over the fair value of the
assets acquired is treated as purchased goodwill and capitalised as an
intangible asset. Goodwill is not amortised but is subject to an annual
impairment review.
* Impairment reviews are carried out to ensure that goodwill and
intangible assets are not carried above their recoverable amounts. Any
amortisation or impairment write downs are charged to the income statement.
* The whole of the issued share capital of Acorus Therapeutics Limited
('Acorus') was acquired by Maelor plc on 10 May 2007. The acquisition price was
financed by #7 million in cash, the issue of 10,000,000 ordinary shares of 10p
each at 10p per share and the issue of #4.88 million of Loan Notes to the
Vendors, contingent upon Acorus achieving certain revenue targets.
* The fair values of the intangible assets acquired have been
capitalised as intangible assets in accordance with IFRS 3 "Business
Combinations".
* The liability for the Vendor Loan Notes is included on the balance
sheet at amortised cost to the extent it is estimated the Notes will become due
and payable.
4. Earnings per share
* The earnings per share calculation is based on the following results
and weighted number of shares in issue:
Unaudited Unaudited Unaudited
Six months ended Six months ended Year
30 September 2007 30 September 2006 ended
31 March
2007
Profit /(loss) for the period (#000) 510 (75) (33)
Weighted average number of shares 105,101 34,281 34,281
(000)
The Group had dilutive potential ordinary shares in the loss making periods 31
March 2007 and 30 September 2006, which would serve to reduce the loss per
ordinary share. Therefore, the dilutive effect has not been applied so there is
no difference between the loss per ordinary share and the diluted loss per
ordinary share.
In the six month period ended 30 September 2007 the diluted profit per ordinary
share was based on the weighted average number of diluted ordinary shares of
113,765,325.
The dilution of ordinary shares from 105,100,505 to 113,765,325 is attributable
to the weighted average number of unexercised share options in the six months
ended 30 September 2007.
5. Consolidated statement of changes in equity
Unaudited Unaudited Unaudited
Six months ended Six months ended Year
30 September 2007 30 September 2006 ended
#000 #000 31 March
2007
#000
Opening equity 1,376 1,394 1,394
Increase in share capital 9,000 - -
Share options charge 99 - 15
Acquisition costs (357) - -
Profit/(loss) for the period 510 (75) (33)
Closing equity 10,628 1,319 1,376
6. Movements on reserves
Shares to be Revaluation Share premium Total other Retained
issued reserve account reserves earnings
#000 #000 #000 #000 #000
At 1 April 2006 23 151 12,154 12,328 (14,362)
Transfers - (1) - (1) 1
Loss for period - - - - (75)
At 30 September 2006 23 150 12,154 12,327 (14,436)
Share options charge 14 - - 14 -
Transfers - (150) - (150) 150
Profit for period - - - - 43
At 31 March 2007 37 - 12,154 12,191 (14,243)
Share options charge 99 - - 99 -
Acquisition costs - - (357) (357) -
Profit for period - - - - 510
At 30 September 2007 136 - 11,797 11,933 (13,733)
7. Acquisition
On 10 May 2007 Maelor plc acquired the entire issued share capital of Acorus
Therapeutics Limited ('Acorus'). The intangible assets acquired and related
consideration is set out below:
Book value Provisional fair Provisional fair
value adjustments value to the group
#000 #000 #000
Intangible assets acquired - 14,210 14,210
Deferred taxation - (1,745) (1,745)
Net assets acquired - 12,465 12,465
Satisfied by:
Cash consideration 7,000
Costs of acquisition 983
Loan notes 3,482
Shares issued 1,000
12,465
8. Share Capital
Ordinary shares of 10p each Authorised Authorised Issued and fully Issued and fully
paid paid
Number #000 Number #000
At 1 April 2006, 30 September 2006
and 31 March 2007 80,000,000 8,000 34,280,833 3,428
Shares authorised and issued
during period 120,000,000 12,000 90,000,000 9,000
At 30 September 2007 200,000,000 20,000 124,280,833 12,428
During the period, in connection with the acquisition of Acorus, Maelor plc
placed 80,000,000 10p ordinary shares with institutional investors and granted
10,000,000 10p ordinary shares to the Vendors of Acorus as part of the purchase
consideration.
9. Copies of this half-yearly report are available on the Group's website at
www.maelor.plc.uk and from the Group's registered office at:
Maelor plc
Office Village
Chester Business Park
Chester
CH4 9QZ
Company Information
Directors
H G McMillan (Non-executive Chairman)
T Wright (Chief Executive Officer)
N J Goldsmith (Finance Director)
A Hardy (Operations Director)
J H Gregory (Non-executive Director)
P Murray (Non-executive Director)
Secretary
N J Goldsmith
Registered office
Office Village
Chester Business Park
Chester
CH4 9QZ
Company registration number
3337415
Brokers Principal Solicitors
Noble & Company Limited Morrison Foerster MNP
120 Old Broad Street City Point
London EC2N 1AR One Ropemaker Street
London EC2Y 9AW
Lewis Charles Securities Limited
LCS House
44 Worship Street
London EC2A 2EA
Nominated adviser Principal bankers
Noble & Company Limited HSBC Bank plc
120 Old Broad Street 2nd Floor
London EC2N 1AR 9 Market Place
Romford
Essex RM1 3AF
Auditors Registrars
Baker Tilly UK Audit LLP Capita Registrars
Number One The Registry
Old Hall Street 34 Beckenham Road
Liverpool L3 9SX Beckenham
Kent BR3 4TU
OptiFloTM is a trademark of C.R. Bard, Inc. or an affiliate.
This information is provided by RNS
The company news service from the London Stock Exchange
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