Interim Results

RNS Number : 8424Y

Angle PLC

30 January 2014

 



For Immediate Release

30 January 2014

ANGLE plc

("ANGLE" or "the Company")

Interim Results for the six months ended 31 October 2013

PARSORTIX DEVELOPMENT COMPLETED AND CE MARK AWARDED

ANGLE plc (AIM: AGL), the specialist medtech company, today announces unaudited interim results for the six months ended 31 October 2013.

Highlights in the year to date

·     Balance sheet and specialist medtech focus strengthened by sale of Geomerics in December 2013 to ARM Holdings plc for up to £6.2 million in cash with £5.5 million already received

 

·    Product development completed for the Parsortix system for both research and clinical use

 

·     CE Mark authorisation secured for the Parsortix cell separation system for use as an in vitro diagnostic device in the European Union in the treatment of patients

·     University of Surrey Oncology Group completed its validation of Parsortix technology, using colorectal cancer cells.  The Parsortix system demonstrated twice the sensitivity of currently accepted clinical practice for CTC capture

·     Cancer Research UK's Paterson Institute for Cancer Research identified key clinical advantages for the Parsortix system and has included Parsortix in its ongoing efforts to deliver personalised medicine

·     Specialist, larger scale manufacturer appointed to manufacture the Parsortix system with the necessary quality systems and capacity to support roll out into the market

 

·     Partnership with the Medical Research Council's Cancer Unit at the University of Cambridge to establish a Cambridge Parsortix Laboratory

·     Appointment as a Scientific Adviser of Dr Harold Swerdlow, a world-leading expert in next generation sequencing (NGS) and Head of R&D at the Wellcome Trust Sanger Institute

·     Loss for the half year of £0.5 million (H1 2013: loss £0.4 million)

·     Cash balance at 31 October 2013 of £0.4 million (30 April 2013: £1.8 million).  Cash position subsequently strengthened with the sale of Geomerics

Garth Selvey, Chairman, commented:

"Now that CE Marking has been successfully completed, ANGLE is focused on establishing the necessary platform to support widespread market adoption of the Parsortix system.  To achieve this, ANGLE is working to establish the use of Parsortix in clinical practice through identifying key clinical applications with medical utility, securing clinical data that demonstrates the medical utility of those applications in patient trials, and obtaining key opinion leader support for the adoption of Parsortix in the routine medical care of cancer patients."

Details of analyst meeting and webcast

A meeting for analysts will be held at 10:00am on the morning of the results at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. Please contact Buchanan on 020 7466 5000 for details.

There will be a live webcast of the analyst meeting. To listen to the webcast, please log on to the following web address approximately 5 minutes before 10.00am on the day of the results:

http://mediaserve.buchanan.uk.com/2014/angle300114/registration.asp

For further information:

ANGLE plc	01483 685830
Andrew Newland, Chief Executive Ian Griffiths, Finance Director
Cenkos Securities Stephen Keys, Christopher Golden (Nominated adviser) Andy Roberts, Christian Hobart (Sales)	020 7397 8900
Buchanan Mark Court, Fiona Henson, Sophie Cowles	020 7466 5000

These Interim Results may contain forward-looking statements. These statements reflect the Board's current view, are subject to a number of material risks and uncertainties and could change in the future. Factors that could cause or contribute to such changes include, but are not limited to, the general economic climate and market conditions, as well as specific factors relating to the financial or commercial prospects or performance of the Group's products.

CHAIRMAN'S STATEMENT

Introduction

In the first six months of the year, ANGLE made extensive progress on product development and the deployment of the Parsortix system with key opinion leaders for research use. Considerable effort also went into supporting Geomerics through to its successful disposal, which was completed shortly after the period end.

Results

The loss for the half year was £0.5 million (H1 2013: loss £0.4 million), reflecting the planned increased level of investment in Parsortix and a fair value gain on the investment in Geomerics.

Investment, principally relating to Parsortix, increased to £1.1 million (H1 2013: £0.8 million).  This comprised operating costs of £0.8 million (H1 2013: £0.2 million) and capitalised expenditure of £0.3 million (H1 2013: £0.6 million).

The cash balance was £0.4 million at 31 October 2013 (30 April 2013: £1.8 million).     

Sale of Geomerics

After the half year end, ANGLE's investment in Geomerics was sold for a cash consideration of up to £6.2 million to ARM Holdings, the world's leading semiconductor intellectual property supplier. £5.5 million was received on 13 December 2013 and the balance of £0.7 million is being held as a retention, receivable on 12 December 2015.

Business development

ANGLE completed development of the automated cell harvesting capability for its Parsortix non-invasive cancer diagnostic system during the half year.

This major development enables the Parsortix system to harvest very rare circulating tumour cells (CTCs) in cancer patient blood for DNA and other analysis.  The resulting "liquid biopsy" means that the Parsortix system has the potential through a simple blood test to address a major new market for personalised cancer treatment. 

During the half year, the Company's research partners reported positively on their work with the Parsortix system. 

The University of Surrey Oncology Group completed their validation of Parsortix technology, using colorectal cancer cells. The Parsortix system demonstrated twice the sensitivity of currently accepted clinical practice for CTC capture.

Cancer Research UK's Paterson Institute for Cancer Research reported key clinical advantages for the Parsortix system and has included Parsortix in its ongoing efforts to deliver personalised medicine.  

 

Regulatory authorisation

 

Also during the half year, substantial work was undertaken towards securing regulatory authorisation for clinical sales in the European Union (CE Mark) by the end of 2013 and in the United States through the FDA's 510(k) procedure in 2014. 

 

We are delighted that, since the half year end, ANGLE has secured the CE Mark for the use of the Parsortix cell separation system as an in vitro diagnostic device in the European Union.

Achievement of this key milestone confirms that the clinical use of the Parsortix system, the Parsorter PC1, meets the Essential Requirements of the European Union In Vitro Device Directive (98/79/EC), a pre-requisite for the product's use in clinical applications (i.e. with patients) throughout Europe.

ANGLE is preparing an FDA 510(k) submission for clinical use of the Parsortix system in the United States. This builds on the work completed for the CE Mark and is on track for submission to the FDA by the end of Q1 2014.   Our aim is to secure FDA regulatory authorisation by the end of Q3 2014 but the timing is dependent on the FDA's response to our submission.

Manufacturing

During the half year, a specialist, larger scale manufacturer was appointed to manufacture the Parsortix system for research use (Parsorter PR1) and for clinical use (Parsorter PC1) with the necessary quality systems and capacity to support the roll out into the research and clinical markets. 

Medical Research Council Partnership 

Since the half year end, ANGLE has entered into an agreement with the Medical Research Council's Cancer Unit at the University of Cambridge to establish a Cambridge Parsortix Laboratory.  The MRC Cancer Unit is one of ANGLE's key opinion leaders and has had access to a Parsortix system since June 2013. The establishment of the Cambridge Parsortix Laboratory will allow the MRC Cancer Unit research team, and the wider scientific community at the University of Cambridge and Addenbrooke's hospital, to have improved access to the Parsortix system. It is an important recognition of the Parsortix system that the MRC Cancer Unit has decided to invest in establishing a stand-alone Parsortix Laboratory within its facility.

Sales platform

ANGLE is working to develop the sales platform needed to establish the Parsortix system in the very large clinical market, which is emerging as medical research is undertaken utilising CTCs to determine improved cancer patient treatment.

Now that the CE Mark is in place, ANGLE's sales priority is establishing the use of Parsortix in clinical practice (i.e. patient treatment).  The steps involved are:

·     Working with cancer research centres to identify clinical applications using the Parsortix system, which have a direct benefit on patient treatment;

·     Securing positive clinical data, in cooperation with cancer research centres, demonstrating the medical utility of those applications in patient trials; and

·     Obtaining key opinion leader support for the adoption of Parsortix in the routine medical care of cancer patients. 

We have made considerable progress in developing relationships with third party groups in pursuit of these objectives.

Twenty one of the Parsortix PR1 systems have so far been deployed.  Seven systems are in ANGLE's internal use, two are with our development partners and twelve have been deployed with key cancer groups. 

Of the twelve Parsortix systems deployed with key cancer groups, five are with our research partners, Cancer Research UK's Paterson Institute for Cancer Research and the University of Surrey Oncology Group.  The remaining seven are deployed with seven different third parties, comprising three leading cancer research centres in London, Cambridge and Germany, three leading hospitals in London and Oxford and one with a diagnostic company.

Our priority has been the deployment of machines with key cancer groups to support the future use of the Parsortix system in the multi-billion pound clinical market.  Now that progress has been made in this area, we intend to begin deployment of systems in support of research sales.  We expect sales revenues to take time to develop and be modest initially. 

As we establish each clinical application supported by proven clinical data and key opinion leaders, we would expect sustained revenue growth for that application.  We intend to amplify this growth by developing key relationships with major medtech companies and pharmaceutical companies over the same timeframe.  

Scientific Advisers

Since the half year end, a third Scientific Adviser has been appointed to help guide the Parsortix non-invasive cancer diagnostic technology to market.

Dr Harold Swerdlow is a world-leading expert in next-generation sequencing (NGS).  He is currently Head of Research and Development for the Wellcome Trust Sanger Institute, formerly the Sanger Centre. Previously, Dr Swerdlow invented core technology relating to NGS and commercialised this at Solexa Ltd., a company which he joined when it had only three employees.  Dr Swerdlow led the launch of Solexa's first product.  Following its NASDAQ listing, Solexa was acquired by Illumina for US$600 million.

At Wellcome Trust, Dr Swerdlow directs all next-generation DNA sequencing activities and runs the R&D department, which is primarily focussed on novel sample preparation methodologies for next-generation sequencing.

Next-generation sequencing (NGS) is becoming the premier technique in genetic and genomic analysis.  We believe that NGS is a core analytical technology, which will be fundamental to personalised cancer treatment in the future. Aligning the Parsortix cell-capture technology with NGS is a key commercial objective.

Outlook

Now that CE Marking has been successfully completed, ANGLE is focused on establishing the necessary platform to support widespread market adoption of the Parsortix system.  To achieve this, ANGLE is working to establish the use of Parsortix in clinical practice through identifying key clinical applications with medical utility, securing clinical data that demonstrates the medical utility of those applications in patient trials and obtaining key opinion leader support for the adoption of Parsortix in the routine medical care of cancer patients. 

Garth Selvey

Chairman

29 January 2014

 

OPERATIONS SUMMARY

Introduction

ANGLE continues to make strong progress with the commercialisation of its Parsortix system.  Development work is complete for the PR1 and PC1 machines for use in the research and clinical markets respectively.

ANGLE is now focused on gathering the key data and key opinion leader support needed to establish the Parsortix non-invasive cancer diagnostic system in the market.

Parsortix cell separation

ANGLE's ultimate objective is the widespread adoption of the Parsortix system in the diagnosis and treatment of cancer patients. According to the World Health Organisation, there were 14 million new cancer cases worldwide in 2012, a marked rise on the 12.7 million cases in 2008.  We estimate that this represents a potential global market for ANGLE's Parsortix system worth in excess of £8 billion per annum.

CE Mark authorisation of the Parsortix system for clinical use throughout Europe, secured in December 2013, is a major step forward as it enables ANGLE to drive commercialisation of the system on three fronts:

1)  Expansion of the market from the existing research use market to the much larger clinical use market 

As evidence of the medical utility of CTC analysis is developed, ANGLE will have a product that can be sold eventually for use in the routine treatment of cancer patients throughout the whole of Europe.   

2)  Engagement with major medtech companies to combine the Parsortix system with their molecular analysis platforms

ANGLE is working on demonstrating the compatibility of the Parsortix CTC harvesting capability with the established molecular analysis platforms deployed by some of the world's largest medtech companies.  The aim is that CTCs harvested from patient blood by the Parsortix system (the "liquid biopsy") are able to be analysed for mutations and other important medical information on the medtech companies' existing platforms thereby greatly expanding their market application. Following CE mark authorisation, ANGLE can progress discussions with these medtech companies for the combination of the Parsortix system with their platforms. 

3)  Engagement with major pharmaceutical companies to use the Parsortix system 

Pharmaceutical companies are under increasing pressure to demonstrate the medical benefit of their new cancer drugs for individual patients.  Now that ANGLE has achieved CE Mark authorisation for the Parsortix system, ANGLE can progress discussions with major pharma companies to utilise the Parsortix system in their extensive clinical trials programmes. Subsequently, Parsortix could be approved as a companion diagnostic test to be used first to determine whether the drug is suited to the patient's cancer, allowing personalised cancer medicine, and secondly to assess how effective the drug has been in treating the patient's cancer.    

ANGLE's ability to deliver on these key work streams is significantly strengthened by the disposal of its shareholding in Geomerics, which provides non-dilutive funding to support the commercialisation of the Parsortix system, demonstrates financial strength to commercial partners, and substantially completes ANGLE's re-focusing as a specialist medtech company.

Geomerics realisation

During the half year, ANGLE progressed with the sale of its investment in graphics technology developer Geomerics. In December 2013, ANGLE announced it had successfully concluded the sale to ARM Holdings plc, the world's leading semiconductor intellectual property supplier.  

ANGLE will receive a cash consideration of up to £6.2 million for its Geomerics shareholding, loans and trade receivables. £5.5 million has already been received and the balance of £0.7 million is being held as a retention, payable on 12 December 2015.   

Summary

ANGLE is now in a significantly strengthened position to deliver major shareholder returns from its unique patent protected Parsortix system, which can capture very rare CTCs from a simple patient blood test.  The CTCs can be captured in a form that gives the potential for analysis of the cells to provide the patient with specific personalised treatment using drugs which target their specific cancer at that time. This is very significant as it offers the potential for more effective treatment for the patient and a reduction in the unnecessary side effects of non-specific treatment.    

ANGLE plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 OCTOBER 2013

	Note	Six months ended		Year ended
		31 October	31 October	30 April
		2013	2012	2013
		(Unaudited)	(Unaudited)	(Audited)
		£'000	£'000	£'000
Revenue	2	414	467	969
Change in fair value	5	404	286	514
Operating costs		(1,374)	(1,126)	(2,555)
Operating profit/(loss)		(556)	(373)	(1,072)
Finance income		80	14	41
Finance costs		_____    _   -	___        _   -	____      _   -
Net finance income/(costs)		________80	__       _ 14	__       41
Profit/(loss) before tax		(476)	(359)	(1,031)
Tax	3	-	-	-
Profit/(loss) for the period		(476)	(359)	(1,031)
Other comprehensive income
Exchange differences on translating foreign operations		_    _ (44)	__         (9)	___        14
Other comprehensive income		__ _    _ (44)	_____      (9)	__ _ _     14
Total comprehensive income for the period		(520)	(368)	(1,017)
		==========	==========	==========
Profit/(loss) for the period attributable to:
Owners of the parent		(396)	(269)	(866)
Non-controlling interests		(80)	(90)	(165)
		__________	__________	__________
Profit/(loss) for the period		(476)	(359)	(1,031)
		==========	==========	==========
Total comprehensive income for the period attributable to:
Owners of the parent		(455)	(277)	(841)
Non-controlling interests		(65)	(91)	(176)
		__________	__________	__________
Total comprehensive income for the period		(520)	(368)	(1,017)
		==========	==========	==========
Earnings/(loss) per share	4
Basic and Diluted (pence per share)		(1.05)	(0.93)	(2.54)

   All activity arose from continuing operations

ANGLE plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 OCTOBER 2013

	Note	31 October	31 October	30 April
		2013	2012	2013
		(Unaudited)	(Unaudited)	(Audited)
		£'000	£'000	£'000
ASSETS
Non-current assets
Non-controlled investments	5	-	3,607	2,361
Other receivables		-	154	-
Property, plant and equipment		198	81	138
Intangible assets	6	1,099	852	1,080
		___________	___________	___________
Total non-current assets		1,297	4,694	3,579
		___________	___________	___________
Current assets
Non-controlled investments	5	4,839	-	1,600
Inventories		15	4	62
Trade and other receivables		530	287	454
Cash and cash equivalents		358	922	1,828
		___________	___________	___________
Total current assets		5,742	1,213	3,944
		___________	___________	___________
Total assets		7,039	5,907	7,523
		===========	===========	===========
EQUITY AND LIABILITIES
Equity
Issued capital	7	4,524	4,071	4,524
Share premium		18,414	16,682	18,414
Share based payments reserve		397	339	370
Other reserve		2,553	2,553	2,553
Translation reserve		(47)	(21)	12
Retained earnings		(19,069)	(18,072)	(18,673)
ESOT shares		(102)	(102)	(102)
		___________	___________	___________
Equity attributable to owners of the parent		6,670	5,450	7,098
		___________	___________	___________
Non-controlling interests		(376)	(230)	(311)
Total equity		6,294	5,220	6,787
		================	================	================
Liabilities
Non-current liabilities
Controlled investments - loans		132	132	132
		___________	___________	___________
Total non-current liabilities		132	132	132
Current liabilities
Trade and other payables		613	555	604
		___________	___________	___________
Total current liabilities		613	555	604
		___________	___________	___________
Total liabilities		745	687	736
		___________	___________	___________
Total equity and liabilities		7,039	5,907	7,523
		===============	===============	===============

ANGLE plc

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 OCTOBER 2013

	Six months ended		Year ended
	31 October	31 October	30 April
	2013	2012	2013
	(Unaudited)	(Unaudited)	(Audited)
	£'000	£'000	£'000
Operating activities
Profit/(loss) before tax from continuing operations	(476)	(359)	(1,031)
Adjustments for:
Depreciation of property, plant and equipment	29	6	19
Amortisation and impairment of intangible assets	150	17	308
Exchange differences	(2)	27	13
Net finance (income)/costs	(80)	(14)	(41)
Change in fair value	(404)	(286)	(514)
Share based payments	______27	_______40	__   _   71
Operating cash flows before movements in working capital:	(756)	(569)	(1,175)
(Increase)/decrease in inventories	47	(4)	(62)
(Increase)/decrease in trade and other receivables	(99)	61	(88)
Increase/(decrease) in trade and other payables	_______61	_____(153)	____(67)
Net cash from/(used in) operating activities	(747)	(665)	(1,392)
Investing activities
Purchase of property, plant and equipment	(84)	(71)	(140)
Purchase of intangible assets	(235)	(389)	(941)
Purchase  of convertible loans	-	(143)	(257)
Provision of short term loans	(407)	(63)	(63)
Proceeds from settlement of Other receivables	-	-	154
Interest received	________4	_________2	_______19
Net cash from/(used in) investing activities	(722)	(664)	(1,228)
Financing activities
Net proceeds from issue of share capital	-	1,130	3,326
Interest paid	_      __   -	_       -	________-
Net cash from/(used in) financing activities	-	1,130	3,326
Net increase/(decrease) in cash and cash equivalents	(1,469)	(199)	706
Cash and cash equivalents at start of period	1,828	1,121	1,121
Effect of exchange rate fluctuations	_______(1)	______   -	________1
Cash and cash equivalents at end of period	358	922	1,828
	=========	=========	=========

ANGLE plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 OCTOBER 2013

	------------------------------------------------------------ Attributable to equity holders of the parent ------------------------------------------------------------
			Share based					Total	Non-
	Issued	Share	payments	Other	Translation	Retained	ESOT	shareholders'	controlling	Total
	capital	premium	reserve	reserve	reserve	earnings	shares	equity	interests	equity
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 May 2012	3,782	15,830	300	2,553	(13)	(17,768)	(102)	4,582	(175)	4,407
For the period to 31 October 2012
Consolidated profit/(loss)						(269)		(269)	(90)	(359)
Other comprehensive income
Exchange differences in translating foreign operations					(8)			(8)	(1)	(9)
Total comprehensive income					(8)	(269)		(277)	(91)	(368)
Issue of shares	289	852						1,141		1,141
Share based payments			40					40		40
Released on forfeiture/lapse			(1)			1		-		-
Deemed disposal of non-controlling interest						(36)	-	(36)	36	-
	___ ______	___ _______	___ ______	___ ______	___ ______	___ ________	___ ______	___ _______	___ _______	___ _______
At 31 October 2012	4,071	16,682	339	2,553	(21)	(18,072)	(102)	5,450	(230)	5,220
For the period to 30 April 2013
Consolidated profit/(loss)						(597)		(597)	(75)	(672)
Other comprehensive income
Exchange differences in translating foreign operations					33			33	(10)	23
Total comprehensive income					33	(597)		(564)	(85)	(649)
Issue of shares	453	1,732						2,185		2,185
Share based payments			31					31		31
Deemed disposal of non-controlling interest						(4)		(4)	4	-
At 30 April 2013	4,524	18,414	370	2,553	12	(18,673)	(102)	7,098	(311)	6,787
For the period to 31 October 2013
Consolidated profit/(loss)						(396)		(396)	(80)	(476)
Other comprehensive income
Exchange differences in translating foreign operations					(59)			(59)	15	(44)
Total comprehensive income					(59)	(396)		(455)	(65)	(520)
Share based payments			27					27		27
	___ ______	___ _______	___ ______	___ ______	___ ______	___ ________	___ ______	___ _______	___ _______	___ _______
At 31 October 2013	4,524	18,414	397	2,553	(47)	(19,069)	(102)	6,670	(376)	6,294
	==========	==========	==========	==========	=========	===========	==========	==========	==========	==========

ANGLE plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)

FOR THE SIX MONTHS ENDED 31 OCTOBER 2013

Share premium

Represents amounts subscribed for share capital in excess of the nominal value, net of directly attributable share issue costs.

Other reserve

The other reserve is a "merger" reserve arising from the acquisition of the former holding company.

Translation reserve

The translation reserve account comprises cumulative exchange differences arising on consolidation from the translation of the financial statements of international operations.  Under IFRS this is separated from retained earnings.

ESOT shares

This reserve relates to shares held by the ANGLE Employee Share Ownership Trust (ESOT) and may be used to assist in meeting the obligations under employee remuneration schemes.

Non-controlling interests

Represents amounts attributed to non-controlling (minority) interests for profits or losses in the Statement of Comprehensive Income and assets or liabilities in the Statement of Financial Position.

Share based payments reserve

The share based payments reserve account is used for the corresponding entry to the share based payments charged through a) the Statement of Comprehensive Income for staff incentive arrangements relating to ANGLE plc equity b) the Statement of Comprehensive Income for staff incentive arrangements relating to the controlled investments equity, and c) the Statement of Financial Position for acquired intangible assets in the controlled investments comprising intellectual property (IP).  These components are separately identified in the table below.

Transfers are made from this reserve to retained earnings as the related share options are exercised, cancelled, lapse or expire or as a controlled investment becomes non-controlled (a deemed disposal).

		Controlled	Controlled
	ANGLE	investments	investments
	employees	employees	IP	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£'000	£'000	£'000	£'000
At 1 May 2012	142	41	117	300
Charge for the period	40	-	-	40
Released on forfeiture/lapse	(1)	-	-	(1)
	_______	_______	_______	_______
At 31 October 2012	181	41	117	339
Charge for the period	31	-	-	31
	_______	_______	_______	_______
At 30 April 2013	212	41	117	370
Charge for the period	27	-	-	27
	_______	_______	_______	_______
At 31 October 2013	239	41	117	397
	========	========	========	========

ANGLE plc

NOTES TO THE INTERIM FINANCIAL INFORMATION

FOR THE SIX MONTHS ENDED 31 OCTOBER 2013

1       Basis of preparation and accounting policies

These Condensed Interim Financial Statements are the unaudited interim consolidated financial statements (the "Condensed Interim Financial Statements") of ANGLE plc, a company incorporated in Great Britain and registered in England and Wales, and its subsidiaries (together referred to as the "Group") for the six month period ended 31 October 2013 (the "interim period"). 

The Condensed Interim Financial Statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting ("IAS 34"), as adopted by the EU, and on the basis of the accounting policies set out in the Report and Accounts 2013. New and revised International Financial Reporting Standards (IFRS) and interpretations recently adopted by the EU and that became effective in the period did not have or are not expected to have a significant impact on the Group. Where necessary, comparative information has been reclassified or expanded from the previously reported Condensed Interim Financial Statements to take into account any presentational changes made in the Report and Accounts 2013.

These Condensed Interim Financial Statements do not constitute statutory financial statements as defined in section 434 of the Companies Act 2006 and are unaudited.  The comparative information for the six months ended 31 October 2012 is also unaudited. The comparative figures for the year ended 30 April 2013 have been extracted from the Group financial statements as filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain statements under sections 498(2) or (3) of the Companies Act 2006. The accounting policies applied are consistent with those described in the annual financial statements for the year ended 30 April 2013.

The Condensed Interim Financial Statements were approved by the Board and authorised for issue on 29 January 2014.

Going concern

The Financial Statements have been prepared on a going concern basis which assumes that the Group will be able to continue its operations for the foreseeable future.

On 13 December 2013, the Company successfully completed the disposal of Geomerics Limited resulting in the receipt of £5.5 million with a further £0.7 million payable on 12 December 2015.

The Directors have prepared and reviewed the financial projections for the 12 month period from the date of signing of these Condensed Interim Financial Statements. Based on the level of existing cash and projected income and expenditure (the timing of some of which is at the Group's discretion), the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in business for the foreseeable future.  Accordingly the going concern basis has been used in preparing the Condensed Interim Financial Statements.

       Critical accounting estimates and judgements

       The preparation of the Condensed Interim Financial Statements requires the use of estimates and assumptions and judgements that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period.  Although these estimates and assumptions and judgements are based on management's best knowledge of the amounts, events or actions, and are believed to be reasonable, actual results ultimately may differ from those estimates.

       The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities relate to 1) the valuation and impairment of unlisted investments held at fair value - Note 5 and 2) the valuation, amortisation and impairment of intangible assets - Note 6.

2     Operating segment and revenue analysis

       The Group's principal trading activity is undertaken in relation to Parsortix, a specialist medical diagnostics company with pioneering products in cancer diagnostics and foetal health. ANGLE also has investments in Geomerics (computer games middleware and computer graphics) and Novocellus (IVF embryo viability) and a specialist technology consultancy.

       For management reporting purposes, the Group is divided into the following operating segments:

·     Controlled investments where the Group has control, typically as a result of owning in excess of 50% of the equity. These investments include Parsortix and Novocellus. Their results, along with associated operating companies, are consolidated into the Group's results. 

·     Non-controlled investments where the Group does not have control. These comprise Geomerics and formerly the earn-out in relation to the sale of Acolyte Biomedica. These investments are held on the Statement of Financial Position at fair value, with changes in fair value passing through the Statement of Comprehensive Income.

·   Management services - provision of Management services to clients including research organisations, corporate and governmental organisations on a fee-for-service basis. 

The nature of these operations is significantly different. 

In assessing performance and making resource allocation decisions, the Board of Directors reviews each segment. The tables below show the operating results by segment together with assets and liabilities.

	Controlled investments	Non-controlled investments	Management services	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£'000	£'000	£'000	£'000
Period ended 31 October 2013
Statement of Comprehensive Income
Revenue	102		312	414
Change in fair value		404		404
Amortisation and impairment of intangible assets	(150)			(150)
Other operating costs	(903)		(321)	(1,224)
Operating costs	____(1,053)	__________	_____(321)	____(1,374)
Operating profit/(loss)	(951)	404	(9)	(556)
Finance income/(costs)	________80	__________	__________	________80
Profit/(loss) before tax	(871)	404	(9)	(476)
	=======	=======	=======	=======
Statement of Financial Position
Assets
Property, plant and equipment				198
Intangible assets - product development				974
Intangible assets - other				125
Investments (current)				4,839
Inventories				15
Trade and other receivables				530
Cash and cash equivalents				358
				__________
Total assets				7,039
				=======
Liabilities
Trade and other payables				613
Loans and borrowings				132
				__________
Total liabilities				745
				=======

	Controlled investments	Non-controlled investments	Management services	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£'000	£'000	£'000	£'000
Period ended 31 October 2012
Statement of Comprehensive Income
Revenue	37		430	467
Change in fair value		286		286
Amortisation and impairment of intangible assets	(17)			(17)
Other operating costs	(607)		(502)	(1,109)
Operating costs	______(624)	__________	______(502)	____(1,126)
Operating profit/(loss)	(587)	286	(72)	(373)
Finance income/(costs)	________14	__________	__________	________14
Profit/(loss) before tax	(573)	286	(72)	(359)
	=======	=======	=======	=======
Statement of Financial Position
Assets
Investments (non-current)				3,607
Other receivables (non-current)				154
Property, plant and equipment				81
Intangible assets - product development				455
Intangible assets - other				397
Inventories				4
Trade and other receivables				287
Cash and cash equivalents				922
				__________
Total assets				5,907
				=======
Liabilities
Trade and other payables				555
Loans and borrowings				132
				__________
Total liabilities				687
				=======

	Controlled investments	Non-controlled investments	Management services	Total
	(Audited)	(Audited)	(Audited)	(Audited)
	£'000	£'000	£'000	£'000
Year ended 30 April 2013
Statement of Comprehensive Income
Revenue	79		890	969
Change in fair value		514		514
Amortisation and impairment of intangible assets	(308)			(308)
Other operating costs	(1,271)		(976)	(2,247)
Operating costs	__   (1,579)	__________	__      (976)	__   (2,555)
Operating profit/(loss)	(1,500)	514	(86)	(1,072)
Finance income/(costs)	__          41	__________	__________	__          41
Profit/(loss) before tax	(1,459)	514	(86)	(1,031)
	=======	=======	=======	=======
Statement of Financial Position
Assets
Investments (non-current)				2,361
Property, plant and equipment				138
Intangible assets - product development				954
Intangible assets - other				126
Investments (current)				1,600
Inventories				62
Trade and other receivables				454
Cash and cash equivalents				1,828
				__________
Total assets				7,523
				=======
Liabilities
Trade and other payables				604
Loans and borrowings				132
				__________
Total liabilities				736
				=======

3       Tax

The Group is eligible for the UK corporation tax substantial shareholdings exemption.  This results in the capital gain from any disposals of UK investments where the Group has an equity stake greater than 10%, and subject to certain other tests, being free of corporation tax. 

Tax is therefore based on the profits in the Management services business as relieved by losses incurred in the Group's other UK trading activities. Loss relief may not absorb the tax in relation to all of the profits and where this occurs tax is provided on the basis of the estimated effective tax rate for the full year.

Controlled investments undertake research and development activities.  In the UK these activities qualify for tax relief and result in tax credits.

4       Earnings/(loss) per share

        The basic and diluted earnings/(loss) per share is calculated on an after tax loss of £0.5 million (six months to 31 October 2012: loss £0.4 million, year to 30 April 2013: loss £1.0 million).  In accordance with IAS 33 Earnings per share 1) the "basic" weighted average number of ordinary shares calculation excludes shares held by the Employee Share Ownership Trust (ESOT) as these are treated as treasury shares and 2) the "diluted" weighted average number of ordinary shares calculation excludes potentially dilutive ordinary shares from instruments that could be converted.  Share options are potentially dilutive where the exercise price is less than the average market price during the period.  Due to the losses in the periods, share options are non-dilutive for the respective periods and therefore the diluted loss per share is equal to the basic loss per share. 

        The basic and diluted earnings/(loss) per share in the period are based on 45,129,800 weighted average ordinary 10p shares (six months to 31 October 2012:  38,563,053; year to 30 April 2013: 40,584,305). 

5       Investments

            Non-controlled investments

	Non-current	Current	Total
	assets	assets	assets
	(Unaudited)	(Unaudited)	(Unaudited)
	£'000	£'000	£'000
At 1 May 2012	2,594	-	2,594
Additions	207	-	207
Transfer from Trade and other receivables	509	-	509
Fair value gain	286	-	286
Interest	11	-	11
	_________	_________	_________
At 31 October 2012	3,607	-	3,607
Reclassification	(1,246)	1,246	-
Additions	-	113	113
Fair value gain	-	228	228
Interest	-	13	13
	_________	_________	_________
At 30 April 2013	2,361	1,600	3,961
Additions	-	407	407
Fair value gain	-	404	404
Interest	-	67	67
Reclassification	(2,361)	2,361	-
	_________	_________	_________
At 31 October 2013	-	4,839	4,839
	=========	=========	=========

Non-controlled investments relates to the Group's investment in Geomerics. Following the Group's focus on specialist medtech, this investment is non-core.  During the period Geomerics' shareholders entered into an exclusivity agreement with ARM Holdings plc for the sale of Geomerics. Subsequent to the period end the sale was completed with ANGLE receiving consideration of up to £6.2 million in cash with £5.5 million paid on completion.  At the period end, there was a reasonable expectation that the investment would be sold within 12 months and the Equity investment was reclassified from Non-current asset to Current asset.

Investments are made in equity and/or in the form of debt (loans) and are designated on initial recognition as financial assets at fair value through the income statement. Loans are normally repayable or convertible into equity and may be interest bearing. Certain loans made during the period carried preferential conversion and/or repayment terms and rights, which resulted in a fair value gain.

There have been no external funding events during the period to determine a new fair value and the company's sales are not yet predictable enough to use some form of discounted cash flow or other valuation method that would be acceptable under the private equity guidelines.  Although the Company was in exclusivity at the period end, at that time, there were a number of variables and uncertainties such that there was insufficient basis to determine a new fair value.

Under the Group's accounting policy, where a fair value cannot be estimated reliably the investment is reported at the carrying value at the previous reporting date unless there is objective evidence that the investment has since been impaired.

The Board has considered a number of factors in determining whether there is evidence that the fair value of an investment has been impaired since its last valuation. These factors have included 1) the positives and negatives in the progress of the investment 2) the current and forecast financial situation of the investment and its ability to make timely sales 3) a view on valuation of the Company taking into account the indicative offer 4) the original funding environment and the current funding environment and 5) the performance of various small cap and tech indices including AIM, Techmark and NASDAQ Stock Market in the relevant period.

6       Intangible assets

	Intellectual property	Computer software	Goodwill	Product development	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£'000	£'000	£'000	£'000	£'000
Cost or deemed cost
At 1 May 2012	523	15	98	-	636
Additions	-	3	-	463	466
Exchange movements	-	-	-	(8)	(8)
	_________	_________	_________	_________	_________
At 31 October 2012	523	18	98	455	1,094
Additions	-	-	-	497	497
Disposals	-	(6)	-		(6)
Exchange movements	1	-	-	21	22
	_________	_________	_________	_________	_________
At 30 April 2013	524	12	98	973	1,607
Additions	-	-	-	201	201
Exchange movements	(1)	-	-	(36)	(37)
	_________	_________	_________	_________	_________
At 31 October 2013	523	12	98	1,138	1,771
	=======	=======	=======	=======	=======
Amortisation and impairment
At 1 May 2012	112	15	98	-	225
Charge for the period	-	1	-	-	1
Impairment	16	-	-	-	16
	_________	_________	_________	_________	_________
At 31 October 2012	128	16	98	-	242
Charge for the period	-	-	-	19	19
Disposals	-	(6)	-	-	(6)
Impairment	272	-	-	-	272
Exchange movements	-	-	-	-	-
	_________	_________	_________	_________	_________
At 30 April 2013	400	10	98	19	527
Charge for the period	-	-	-	150	150
Exchange movements	-	-	-	(5)	(5)
	_________	_________	_________	_________	_________
At 31 October 2013	400	10	98	164	672
	=======	=======	=======	=======	=======
Net book value
At 31 October 2013	123	2	-	974	1,099
At 30 April 2013	124	2	-	954	1,080
At 31 October 2012	395	2	-	455	852

       The carrying value of intangible assets is reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The recoverable amount is assessed on the basis of "value in use". The key assumptions to assess value in use are the estimated useful economic life, future revenues, cash flows and the discount rate to determine the net present value of these cash flows. Where value in use exceeds the carrying value then no impairment is made; where value in use is less than the carrying value then an impairment charge is made.

       Amortisation and impairment charges are charged to operating costs in the consolidated statement of comprehensive income.

       "Product development" relates to internally generated assets that were capitalised during the period in accordance with IAS 38 Intangible Assets. Capitalised product development costs are directly attributable costs comprising cost of materials, specialist contractor costs, labour, overheads and patent costs. Product development costs are amortised over their estimated useful lives commencing when a new product is in commercial production. The carrying value is reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Development costs not meeting the IAS 38 criteria for capitalisation continue to be expensed through the Income Statement as incurred.

7       Share capital

The Company has one class of ordinary shares which carry no right to fixed income and at 31 October 2013 had 45,243,059 Ordinary shares of £0.10 each allotted, called up and fully paid.

8       Post reporting date events

As explained in the Chairman's Statement and Operations Summary, the Company has made strong progress with Parsortix and has received payment of £5.5 million in relation to the disposal of Geomerics Limited.

Shareholder communications

The announcement is being sent to all shareholders on the register at 28 January 2014.  Copies of this announcement are posted on the Company's website www.ANGLEplc.com and are available from the Company's registered office:  3 Frederick Sanger Road, Surrey Research Park, Guildford, Surrey, GU2 7YD.

 

END

 

 

IR LFFILLEIAFIS