Bioventix plc
("Bioventix" or the "Company")
Preliminary results for the year ended 30 June 2015
Bioventix plc (BVXP), a UK company specialising in the development and
commercial supply of high-affinity monoclonal antibodies for applications in
clinical diagnostics, announces its audited results for the year ended 30 June
2015.
Highlights
* Revenue up 23% to £4.3m
* Profits before tax up 39% to £3.1m
* Final dividend up 50% to 21.6p
Business review
We are pleased to report the results for the financial year ended 30 June 2015.
Most significantly, revenues for the year of £4.3m (2013/14:£3.535m) were 23%
up on the previous year. Profits before tax were also significantly increased
by 39% to £3.1m (2013/14: £2.2m). Despite increased dividend distribution, cash
balances increased by £780k to £4.1m.
Much of the revenue growth has come from our vitamin D antibody (vitD3.5H10) in
the form of increased physical antibody sales and royalties. Whilst the
physical antibody sales can be spasmodic due to irregular customer ordering
patterns, the increase in royalties is likely to be sustained. Bioventix now
has sixteen licensees for vitD3.5H10 ranging from large to small diagnostics
companies. The roll out of our customer's products for vitamin D testing
throughout world markets has progressed during the year. This roll-out process
has advanced but is not yet quite complete and we remain optimistic that
revenues from vitD3.5H10 will continue to grow over the next year or so.
The core business that is not related to vitamin D comprises (in order of
importance):
* antibodies to NT proBNP (heart failure);
* testosterone;
* FT3 (thyroid hormone);
* Estradiol (important estrogen);
* various drugs (eg THC/cannabis); and
* progesterone (steroid hormone).
The revenues from this core business have remained robust and have provided a
firm base for the growth that has come from vitamin D.
New antibodies were added to the product portfolio during 2013/14
(androstenedione, TSH, T4 and estriol) and we are starting to gain some
customer feedback from samples delivered. There has been some positive feedback
on the antibodies to androstenedione, an androgenic steroid that is related to
testosterone. The levels of androstenedione testing at hospitals is lower than
for testosterone and so revenues are likely to be of lower value than
testosterone in the future as sales materialise.
Future developments
During this year, additional antibodies to parathyroid hormone (PTH), BNP and
HIV.p24 were also added to the product portfolio though it is too early to tell
if these will add value to the business over the coming years.
Another route to pipeline development comes from sponsored antibody creation
projects whereby customers pay for antibody creation in return for exclusive
use of the antibodies. Our most important such project was undertaken with a
large multinational diagnostics company almost ten years ago in the field of
high sensitivity troponin testing for heart attacks. We remain optimistic that
this project is eventually reaching the point of commercialisation and that
significant revenues will start to flow during 2017. The timing of this will be
dependent on the success of our partner company in gaining marketing approval
in the EU and in particular, the more demanding US market. The timing (likely
to be in 2017) is also coincident with the end of a payment period for a
significant existing core revenue stream for NT proBNP.
More recent sponsored projects have been in the field of infectious disease and
in the field of cancer diagnostics. We will know more about the technical
success of these projects over the coming years.
Geographically, the majority of sales emanate from the US, EU and Japan.
However, we remain cautiously optimistic about growth prospects in China. There
are rapidly emerging Chinese diagnostics companies and this represents a growth
opportunity for Bioventix. Business development in China does present
challenges but we expect that the quality of our antibodies will help us to
meet our objectives. We have appointed several local distributors who we
believe will be able to help us with product importation and the need to
establish the royalty element of our revenue model which is unfamiliar to new
companies in China.
In previous years, the Board has adopted a cautious dividend policy that
embraces continuity in the absence of special dividends. It is the intention of
the Board to continue with this dividend policy.
In the spring of 2014, the improving cash balance of the Company resulted in a
step change in dividend distribution to a new level from which future pay outs
would be based.
The Board is pleased to announce a final dividend of 21.6 pence per share which
represents an increase of 50% compared to last year. Assuming the Company
continues to perform as expected it is the intention of the Board to reflect a
similar percentage increase in next year's interim dividend which will be
announced alongside our interim results for the six months to 31 December
2015.. As in Spring 2014, these two increases are consistent with the recent
change in Company finances and constitute a step change to a new base level
from which future dividends will be considered.
The shares will be marked ex-dividend on 15 October 2015 and the dividend will
be paid on 30 October 2015 to shareholders on the register at close of business
on 16 October 2015.
As in previous years, the priority for expenditure lies with our R&D activities
and the need to develop antibodies that we hope to commercialise during the
period from 2020 to 2030. Accordingly, R&D expenditure continues to account for
the majority of operating costs.
The composition of the Bioventix team has remained stable over the last two
years and this facilitates excellent performance and accumulation of know-how.
The continued outstanding performance of the Company in a competitive global
market for antibodies is very satisfying. Our sheep monoclonal antibody
technology continually delivers high performance antibodies to our customers.
However, the operation of the antibody technology is made possible by the
efforts of our expert staff and we would like to thank them for their
remarkable achievements over the last year.
We are delighted to be able to report such positive news for the current year.
Furthermore, we remain optimistic that further modest growth in the next two
years will come from additional vitamin D antibody sales and royalties. Beyond
that, growth in the period from 2017 to 2020 will be linked to the success of
our troponin project. The challenge for our continued research activities will
be to seed additional projects that will germinate in the period from 2020 to
2030 to allow us to create further shareholder value.
For further information please contact:
Bioventix plc Chief Executive Officer Tel: 01252 728 001
Peter Harrison
finnCap Ltd Corporate Finance Tel: 020 7220 0500
Geoff Nash/Simon Hicks Corporate Broking
Steve Norcross
About Bioventix plc:
Bioventix (www.bioventix.com) specialises in the development and commercial
supply of high-affinity monoclonal antibodies with a primary focus on their
application in clinical diagnostics, such as in automated immunoassays used in
blood testing. The antibodies created at Bioventix are generated in sheep and
are of particular benefit where the target is present at low concentration and
where conventional monoclonal or polyclonal antibodies have failed to produce a
suitable reagent. Bioventix currently offers a portfolio of antibodies to
customers for both commercial use and R&D purposes, for the diagnosis or
monitoring of a broad range of conditions, including heart disease, cancer,
fertility, thyroid function and drug abuse. Bioventix currently supplies
antibody products and services to the majority of multinational clinical
diagnostics companies. Bioventix is based in Farnham, UK and its shares are
traded on AIM under the symbol BVXP.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2015
2015 2014
£ £
TURNOVER 4,333,221 3,535,358
Cost of sales (320,464) (302,865)
GROSS PROFIT 4,012,757 3,232,493
Administrative expenses (915,164) (860,966)
Exceptional costs of listing on AIM - (169,400)
Total administrative expenses (915,164) (1,030,366)
OPERATING PROFIT 3,097,593 2,202,127
Interest receivable and similar income 9,972 28,584
Interest payable and similar charges (1,872) (104)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 3,105,693 2,230,607
Tax on profit on ordinary activities (548,227) (415,178)
PROFIT FOR THE FINANCIAL YEAR 2,557,466 1,815,429
Earnings per share:
2015 2014
Basic 50.66p 36.09p
Diluted 49.79p 35.42p
Basic adjusted N/A 36.53p
Diluted adjusted N/A 35.86p
All amounts relate to continuing operations.
There were no recognised gains and losses for 2015 or 2014 other than those
included in the Profit and loss account.
BALANCE SHEET AS AT 30 JUNE 2015
2015 2014
£ £ £ £
FIXED ASSETS
Tangible assets 487,804 419,743
CURRENT ASSETS
Stocks 192,970 164,107
Debtors 2,090,573 1,831,748
Cash at bank and in hand 4,130,622 3,351,479
6,414,165 5,347,334
CREDITORS: amounts falling due (297,526) (530,913)
within one year
NET CURRENT ASSETS 6,116,639 4,816,421
TOTAL ASSETS LESS CURRENT LIABILITIES 6,604,443 5,236,164
PROVISIONS FOR LIABILITIES
Deferred Tax (20,318) -
NET ASSETS 6,584,125 5,236,164
CAPITAL AND RESERVES
Called up share capital 252,547 252,210
Share premium account 78,426 57,768
Capital redemption reserve 1,231 1,231
Profit and loss account 6,251,921 4,924,955
SHAREHOLDERS' FUNDS 6,584,125 5,236,164
The financial statements were approved and authorised for issue by the board
and were signed on its behalf on 29 September 2015.
CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2015
2015 2014
£ £
Net cash flow from operating activities 2,915,212 1,765,290
Returns on investments and servicing of 8,100 28,480
finance
Taxation (770,128) (163,145)
Capital expenditure and financial investment (113,069) (1,909)
Equity dividends paid (1,281,967) (921,452)
CASH INFLOW BEFORE FINANCING 758,148 707,264
Financing 20,995 58,709
INCREASE IN CASH IN THE YEAR 779,143 765,973
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT FOR THE YEAR
ENDED 30 JUNE 2015
2015 2014
£ £
Increase in cash in the year 779,143 765,973
MOVEMENT IN NET DEBT IN THE YEAR 779,143 765,973
Net funds at 1 July 2014 3,351,479 2,585,506
NET FUNDS AT 30 JUNE 2015 4,130,622 3,351,479
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015
1. ACCOUNTING POLICIES
Basis of
preparation
1.1 of
financial
statements
The
financial
statements
have been
prepared
under the
historical
cost
convention
and in
accordance
with
applicable
accounting
standards.
1.2 Turnover
Turnover comprises revenue recognised by the company in respect of
goods and services supplied, exclusive of Value Added Tax and trade
discounts.
Direct sales are recognised at the date of dispatch, and royalties are
accrued over the period to which they relate.
Subcontracted R & D income is recognised based upon the stage of
completion at the year end.
Annual licence revenue is recognised, in full, based upon the date of
the invoice.
1.3 Intangible fixed assets and amortisation
Goodwill is the difference between amounts paid on the acquisition of
a business and the fair value of the identifiable assets and
liabilities. It is amortised to the Profit and loss account over its
estimated economic life.
Amortisation is provided at the following rates:
Goodwill - Over 10 years
Know how - Over 10 years
1.4 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation.
Depreciation is not charged on freehold land. Depreciation on other
tangible fixed assets is provided at rates calculated to write off the
cost of those assets, less their estimated residual value, over their
expected useful lives on the following bases:
Freehold property - 2% straight line
Plant and equipment - 25% reducing balance
Motor Vehicles - 25% straight line
Equipment - 25% straight line
1.5 Stocks
Stocks are valued at the lower of cost and net realisable value after
making due allowance for obsolete and slow-moving stocks. Cost
includes all direct costs and an appropriate proportion of fixed and
variable overheads.
1.6 Deferred taxation
Full provision is made for deferred tax assets and liabilities arising
from all timing differences between the recognition of gains and
losses in the financial statements and recognition in the tax
computation.
A net deferred tax asset is recognised only if it can be regarded as
more likely than not that there will be suitable taxable profits from
which the future reversal of the underlying timing differences can be
deducted.
Deferred tax assets and liabilities are calculated at the tax rates
expected to be effective at the time the timing differences are
expected to reverse.
Deferred tax assets and liabilities are not discounted.
1.7 Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are
translated into sterling at rates of exchange ruling at the balance
sheet date.
Transactions in foreign currencies are translated into sterling at the
rate ruling on the date of the transaction.
Exchange gains and losses are recognised in the Profit and loss
account.
1.8 Research and development
Research and development expenditure is written off in the year in
which it is incurred.
1.9 Pensions
The company operates a defined contribution pension scheme and the
pension charge represents the amounts payable by the company to the
fund in respect of the year.
1.10 Employee benefits-share-based compensation
The company operates an equity-settled, share-based compensation plan.
The fair value of the employee services received in exchange for the
grant of the options is recognised as an expense over the vesting
period. The total amount to be expensed over the vesting period is
determined by reference to the fair value of the options granted. At
each balance sheet date, the company will revise its estimates of the
number of options are expected to be exercisable. It will recognise
the impact of the revision of original estimates, if any, in the
profit and loss account, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share premium
when the options are exercised.
2. TURNOVER
An analysis of turnover by class of business is as follows:
2015 2014
£ £
Royalty and licence fee income 3,122,334 2,759,599
Product revenue and R&D income 1,210,887 775,759
4,333,221 3,535,358
The geographical split of turnover is:
2015 2014
£ £
United Kingdom 246,840 114,555
Other EU 1,735,902 1,566,702
USA 1,866,935 1,577,690
Rest of the World 483,544 276,411
Total 4,333,221 3,535,358
3. TAXATION
2015 2014
£ £
Analysis of tax charge in the year
Current tax (see note below)
UK corporation tax charge on profit for the 527,095 434,176
year
Adjustments in respect of prior periods (10,582) -
Total current tax 516,513 434,176
Deferred tax (see note 14)
Origination and reversal of timing differences 31,714 (18,998)
Tax on profit on ordinary activities 548,227 415,178
Factors affecting tax charge for the year
The tax assessed for the year is lower than(2014 - lower than) the standard
rate of corporation tax in the UK of 20%(2014 - 21%). The differences are
explained below:
2015 2014
£ £
Profit on ordinary activities before tax 3,105,693 2,230,607
Profit on ordinary activities multiplied by 621,139 468,427
standard rate of corporation tax in the UK of
20%(2014 - 21%)
Effects of:
Expenses not deductible for tax purposes, 10,356 52,163
other than goodwill amortisation and
impairment
Depreciation for year in excess of capital (14,092) 3,534
allowances
Refunded after uplifted research and (10,582) -
development claims
Tax deduction arising from exercise of (5,450) (13,080)
employee options
Other differences leading to an increase 19,068 28,971
(decrease) in the tax charge
Research and development enhanced expenditure (103,926) (105,839)
relief
Current tax charge for the year (see note 516,513 434,176
above)
Factors that may affect future tax charges
There were no factors that may affect future tax charges.
4. SHARE CAPITAL
2015 2014
£ £
Allotted,
called up
and fully
paid
5,050,931 252,547 252,210
(2014 -
5,044,202)
Ordinary
shares of
£0.05 each
During the year 6,729 shares were issued.
5. EARNINGS PER SHARE
The weighted average number of shares in issue for the basic earnings per share
calculation is 5,048,479 (2014 5,032,247) and for the diluted earnings per
share, assuming the exercise of all share options is 5,136,221 (2014
5,126,718).
The 2014 calculation of adjusted earnings per share, on profit after tax from
continuing activities, was based on the profit for the period of £1,815,429,
after adding back AIM listing costs of £169,400 and deducting back dated
royalty income of £189,729, together with the associated taxation adjustment to
reflect the underlying profit. Based on the weighted average number of shares
in issue during the prior year of 5,032,247 the basic earnings per share was
36.52p. The diluted earnings per share was based on 5,126,718 shares and was
35.85p.
The calculation of the basic earnings per shares is based on the profit for the
period of £2,576,972 (2014 £1,815,429) divided by the weighted average number
of shares in issue of 5,048,479 (2014 5,032,247), the basic earnings per share
is 51.04p (2014 (36.08p). The diluted earnings per share, assuming the exercise
of all of the share options is based on 5,136,221 (2014 5,126,718) shares and
is 50.17p (2014 35.41p).
6. SHARE BASED PAYMENTS
During the year the company operated an Approved Share Option Scheme (the
"Option Scheme"), to incentivise employees.
The company have applied the requirements of FRS 20 Share-based Payment to all
the options granted. The Option Scheme provides for a grant price equal to the
market value of the Company's shares on the date of the grant, as agreed with
HMRC Shares and Assets Valuation Division.
The contractual life of an option is 10 years from the date of grant. Options
granted become exercisable on the third anniversary of the date of grant.
Exercise of an option is normally subject to continued employment, but there
are also considerations for good leavers. All share based remuneration is
settled in equity shares.
Details of the options granted up to the year ended 30 June 2015 are shown
below:
Grant Date Exercise Exercise Granted Forfeited As at 30
period price June 2015
4 July 2013 On or after 4 £3.12 95,865 - 73,319
July 2016
25 March On or after 25 £6.40 14,424 - 14,424
2014 March 2017
Fair value of share options and assumptions for awards
4 July 2013 25 March
2014
Fair value at measurement date £1.50 £3.08
Issue price £3.12 £6.40
Exercise price £3.12 £6.40
Expected volatility 33.82% 33.82%
Option life (expressed as weighted average life used in 10 years 10 years
modelling under Black Scholes model)
Expected dividends
Risk-free interest rate (based on national government 2.47% 2.47%
bonds)
Expected volatility was based on past volatility since the shares have been
listed on AIM
On 10 November 2014, 1 employee exercised their options on 6,729 ordinary
shares of £0.05 each, at a price of £3.12 per share. The difference between the
total consideration received of £20,994.48 and the nominal value of the shares
of £336.45 has been transferred to the share premium account (£20,658.03).
A share option charge of £36,660 has been made for the £3.12 options in the
year ended 30 June 2015
A share option charge of £14,808 has been made for the £6.40 options in the
year ended 30 June 2015.
The number of staff holding share options at 30 June 2015 was 9. The share
options have been issued to underpin staff service conditions.
7. PUBLICATION OF NON-STATUORY ACCOUNTS
The financial information set out in this preliminary announcement does not
constitute the Group's financial statements for the year ended 30 June 2015 and
the year ended 30 June 2014.
The financial statements for the year ended 30 June 2014 have been delivered to
the Registrar of Companies. The financial statements for the year ended 30 June
2015 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting. The auditors' report on both accounts was unqualified,
did not include references to any matters to which the auditors drew attention
by way of emphasis without qualifying their report and did not contain
statements under sections 498(2) or (3) of the Companies Act 2006.
The audited financial statements of Bioventix plc for the period ended 30 June
2015 are expected to be posted to shareholders shortly, will be available to
the public at the Company's registered office, 7 Romans Business Park, East
Street, Farnham, Surrey, GU9 7SX and available to view on the Company's website
at www.bioventix.com once posted.
