Preliminary Results

RNS Number : 2273L

Angle PLC

28 July 2011

 



Please note that following the release of the ANGLE plc Preliminary results there will be a briefing for Analysts at 10am and a Private Client Broker Lunch at 12:30 in the offices of Buchanan Communications, 107 Cheapside, London

tomorrow (Friday 29 July 2011)  

28 July 2011

 

ANGLE plc

Preliminary Audited Results for the year ended 30 April 2011

ANGLE plc ('ANGLE' or the 'Company'), which focuses on the commercialisation of technology, today announces audited results for the year ended 30 April 2011. 

Operational Highlights

Parsortix Cancer Diagnostics - gaining momentum

·     During the year, ANGLE's 80% subsidiary Parsortix deployed its cell separation device, already proven for foetal cells, to capture cancer cells in blood.  Successful initial findings were announced on 28 June 2011.

·     Fundraising of £1.25 million announced on 15 July 2011 provides funding to validate the initial findings and progress development of the separation device.  If successful, the Directors believe that ANGLE will have a major opportunity to develop a patent protected cancer diagnostic device for the capture of circulating tumour cells in cancer patients, which will address a key medical requirement.

Other portfolio companies

 

The Group's other portfolio companies offer the potential for substantial cash returns for ANGLE through trade sale, licence revenue and other income but with ANGLE's ongoing investment commitment being minimal. 

·     Acolyte Biomedica: deferred consideration due in respect of the sale of the investment.  The court case between the former major Acolyte shareholder and the purchaser is now in progress. Dependent on the outcome, there is the potential for ANGLE to pursue its own claim against the purchaser.    

 

·     Geomerics (33%) (computer games middleware and computer graphics): strong progress during the year including a corporate partnership with one of the world's leading technology companies, and completing two of the three related milestones.  The deal included investment of up to £2.3 million into Geomerics.  Strong sales with seven new titles for three major publishers in the first quarter and, subsequent to the year-end, an agreement with Epic Games Inc that its Enlighten lighting solution would be integrated with Epic's award winning computer games development platform Unreal Engine 3. Potential for a trade sale in the future.

 

·     NeuroTargets (65%) (neuropathic pain, Alzheimer's and multiple sclerosis): Licence to University of Bristol and their associated funding in relation to neuropathic pain not proceeding because of observed side effects.  New galanin targets are being sought.  Ongoing research and development work during the year undertaken by the University of Bristol in relation to multiple sclerosis (MS) and Alzheimer's Disease (AD). Patent granted in Australia in relation to the use of galanin molecules for the treatment of MS and AD with applications in other territories ongoing.  Long term potential that requires partnering.     

·     Novocellus (82%) (IVF embryo viability), being developed by corporate partner Origio, a leading supplier of IVF culture medium.  Progress has been somewhat slower than had been hoped and the expected date for the first trial results is now the end of Q1 2012.  Novocellus' product EmbryoSureÒoffers the potential for increased pregnancy success rates in IVF and reduced health risks.  Potential for milestone payments and royalty income in the future.

 

Management services

·     Revenue £2.4 million (2010: £2.4 million).

 

·     Profit before tax £0.3 million (2010: £0.2 million).

 

·     Continues to face challenges with pressure on UK Government contracts and uncertainties in the Middle East.

Financial Highlights

 

·     Fair value gain £0.2 million (2010: £0.6 million).

 

·     Profit before controlled investments and tax £0.1 million (2010: £0.3 million).

 

·     Loss before tax from continuing operations £0.3 million (2010: profit £0.1 million).

 

·     Operating costs to manage and develop the Ventures portfolio reduced to £0.4 million (2010: £0.5 million). 

·     Planned expenditure on controlled investments maintained at £0.3 million (2010: £0.3 million) with most of the expenditure relating to Parsortix during the year. 

 

·     Fair value of investment portfolio £3.9 million (30 April 2010 £3.7 million).  This fair value does not include the value of controlled investments (NeuroTargets, Novocellus, Parsortix).

 

·     Cash balance at 30 April 2011 increased to £0.6 million (30 April 2010: normalised £0.5 million). 

 

·     Fundraising completed during the year of £0.76 million.  Further fundraising of £1.25 million announced on 15 July 2011. 

Garth Selvey, Chairman, commented:

"Our work with Parsortix has identified a major new opportunity.  The remainder of the portfolio has been structured so that returns can be achieved without significant financial input from ANGLE.  Consequently, the recent fundraising, which has further strengthened the balance sheet, can be applied principally in support of Parsortix and this will be a major focus of our efforts."

Enquiries:

ANGLE plc	01483 685830
Andrew Newland, Chief Executive Ian Griffiths, Finance Director
Collins Stewart Europe Limited Matt Goode	0207 523 8325
Buchanan Lisa Baderoon, Catherine Breen	020 7466 5000
Scott Harris Stephen Scott, James O'Shaughnessy, Harry Dee	0207 653 0030

These Preliminary 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 which 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 individual portfolio companies within the Group's portfolio of investments.

CHAIRMAN'S STATEMENT

Introduction

ANGLE's investment business has strengthened during the year.  Through our partnership strategy, key investments have been able to make progress without significant funding from ANGLE and this has enabled us to apply additional focus to our medical diagnostic subsidiary, Parsortix.  If the initial positive developments are confirmed, we believe that this will provide a value generating opportunity for ANGLE.

Results

A modest profit before controlled investments and tax for continuing operations was achieved of £0.1 million (2010: £0.3 million) after a fair value gain of £0.2 million (2010: £0.6 million).  After controlled investments, this translated into a loss before tax for continuing operations of £0.3 million (2010: profit £0.1 million).

The major focus of activity was on Parsortix.  Operating costs to manage and develop the Ventures portfolio were reduced to £0.4 million (2010: £0.5 million) while planned expenditure on controlled investments was maintained at £0.3 million (2010: £0.3 million).  Expenditure principally related to Parsortix reflecting the financial independence of other investments and increased focus on medical diagnostics during the year. 

Modest additional investment led to an increase in the fair value of the investment portfolio to £3.9 million (30 April 2010 £3.7 million).  Under IFRS, no investments were revalued during the year despite progress against key milestones.  The fair value of the investment portfolio does not include the value of controlled investments (NeuroTargets, Novocellus, Parsortix), which the Directors believe may represent the largest part of ANGLE's value in the future.

During the year, the cash balance at 30 April 2011 increased to £0.6 million (30 April 2010: normalised £0.5 million). 

Share issues

A fundraising completed during the year raised £0.76 million.  Subsequent to the year-end, shareholders and new investors have agreed a further fundraising of £1.25 million, conditional only on HMRC Advance Assurance and AIM listing of shares issued.  Funds raised will be used principally to progress the Parsortix cancer diagnostics product. 

Management services 

The Management services business delivered a profit before tax during the year of £0.3 million (2010: £0.2 million). 

Whilst the Management services business remained profitable, it continues to face challenges with pressure on UK Government contracts and uncertainties in the Middle East.

Portfolio companies

ANGLE has deployed its partnership strategy during the year to give its portfolio companies the potential to develop strongly without reliance on ANGLE for ongoing financial support.  The Chief Executive's Statement highlights key progress achieved during the year.  The portfolio now offers the potential for substantial cash returns for ANGLE through trade sale, licence revenue and other income but with ANGLE's ongoing investment commitment being minimal. 

ANGLE's investment and management activity during the year has in large part been focused on Parsortix.  We are delighted that this work has now identified a substantial business opportunity for ANGLE in cancer diagnostics.

If the initial findings are validated, the Directors believe that ANGLE will have a major opportunity to develop a patent protected cancer diagnostic device for the capture of circulating tumour cells in cancer patients, which will address a key medical requirement.

Outlook

With the fundraising complete and with a strengthened balance sheet, ANGLE has a more secure position to realise value from its portfolio companies.  Geomerics, Novocellus and Acolyte Biomedica have been structured so that returns may be achieved with minimal further investment from ANGLE.  NeuroTargets may offer further potential but its situation is longer term and uncertain at present.

This leaves ANGLE in the position of being able to focus resources on the development of Parsortix, whilst knowing that shareholders have other potential streams of income.

The Parsortix opportunity, if validated, is exceptional not only because of the size of the market but also because the level of further technological development, investment requirements and timescales are all much smaller than would normally be required for a patent-protected medical diagnostic opportunity.  This would be a highly attractive proposition for shareholders and potential corporate partners.   

Finally I would like to thank ANGLE's team, our partners and shareholders for their continued support and look forward to updating the market on our progress in due course.

………………….

Garth Selvey

Chairman

27 July 2011

CHIEF EXECUTIVE'S STATEMENT

Introduction

During the year, ANGLE maintained performance in its Management services business having discontinued its US operations, progressed its portfolio companies through key milestones and developed a major new opportunity in cancer diagnostics. 

Management services

Revenues from the Management services business were maintained at £2.4 million (2010: £2.4 million) generating profit before tax of £0.3 million (2010: £0.2 million). 

The Management services business has been constrained by UK Government cut backs.  At the same time, despite promising signs, new opportunities in the Middle East have been seriously delayed as a result of the political and economic uncertainties in the region.

Our established Management services contracts will continue to be closely managed and are expected to remain profitable, although we expect a drop in revenues as contracts complete and some of them do not renew.  Set against this, a number of new contracts are coming to the market for tender.

Portfolio value

ANGLE's portfolio of investments comprises Geomerics and Acolyte Biomedica, which are shown on the statement of financial position at a fair value of £3.9 million at 30 April 2011 (30 April 2010: £3.7 million) and NeuroTargets, Novocellus and Parsortix, which as controlled investments are consolidated and are excluded from the fair value of the investment portfolio.  NeuroTargets was consolidated during the year.

Parsortix (80%) (cancer diagnostics / foetal diagnostics)

Parsortix has developed an innovative cell separation platform technology for the isolation of cells in blood, including cells which occur in very low numbers.

This technology was previously proven in the separation of intact foetal cells from peripheral maternal blood, where there is at most one foetal cell for 500 million maternal cells. This application is being developed by ANGLE to provide a non-invasive foetal diagnostic tool to replace invasive procedures such as amniocentesis and chorionic villi sampling.

During the year, Parsortix engaged in extensive discussions with major medical diagnostic companies.  It became clear in discussions that there was an exceptional market opportunity available if the Parsortix cell separation device could be used to separate tumour cells from blood.  ANGLE therefore decided to focus resources on investigating whether and how Parsortix's separation device could be used to capture cancer cells in blood.

Initial experiments have been successful in capturing cultured breast cancer cells that had been added to healthy whole blood.  This "spiked blood" experiment is a pre-cursor to isolating cancer cells in cancer patient blood.  The device thusfar is believed to have captured the added cancer cells and allowed them to be visually counted through the microscope.

The Parsortix separation device captures cells based on their physical characteristics.  We believe Parsortix's technology, which is the subject of a granted US patent in the process of being issued and is patent pending in other major economic territories, is both cheaper and more effective than identified competitor products, which utilise antibody affinity capture. 

A simple cancer cell counting device has the ability to support cancer diagnosis, treatment and remission monitoring. The cancer diagnostic opportunity is considered to be of great commercial potential because the level of further technological development, investment requirements and timescales are all comparatively very low to secure a patent protected position addressing a very large market. 

Other portfolio companies

ANGLE's other portfolio companies are substantially cash independent of ANGLE and comprise the following.

Acolyte Biomedica

The deferred consideration of up to £4.7 million due in respect of the sale of the investment in Acolyte Biomedica (medical diagnostics / MRSA detection) remains subject to dispute between the former Acolyte shareholders and the purchaser.  ANGLE is awaiting the outcome of legal action currently in Court, which is being undertaken by the major former Acolyte shareholder.  Once the outcome of this action is known, ANGLE expects to pursue its own claim against the purchaser.  At present ANGLE has no exposure to legal costs.

Geomerics (33%) (computer games middleware and computer graphics)

Geomerics agreed a corporate partnership during the year with one of the world's leading technology companies.  The partnership comprises both a cash investment and an ongoing partnership arrangement.  The deal includes investment of up to £2.3 million into Geomerics.  During the year, two of the three milestones were successfully completed.  Geomerics has also announced strong sales at the start of the calendar year with sales for seven new titles with three major publishers in the first quarter.  Further strengthening its sales capability, Geomerics this week announced an agreement with Epic Games Inc that its Enlighten lighting solution would be integrated with Epic's award winning computer games development platform Unreal Engine 3. Geomerics has the potential for a future trade sale.

NeuroTargets (65%) (neuropathic pain, Alzheimer's and multiple sclerosis)

NeuroTargets agreed a licensing deal with the University of Bristol, and the Wellcome Trust during the year with a funding award from the Wellcome Trust to the University to progress the galanin programme.  However, as is often the case, side effects were found in the first set of targets being investigated by the University and new targets are currently being sought.  The University's Wellcome Trust funding programme has been terminated whilst this process is underway and the University will need to reapply for the funding if the programme is to progress.  In addition to the work on neuropathic pain, NeuroTargets has through Professor Wynick's research also had positive pre-clinical results for the treatment of multiple sclerosis (MS) and Alzheimer's disease (AD).  NeuroTargets has secured a granted patent in Australia for the use of galanin to treat MS and AD and applications in other territories are ongoing.  NeuroTargets has long term potential that requires partnering.

Novocellus (82%) (IVF embryo viability)

Novocellus has agreed a partnership with Origio, a leading supplier of IVF culture medium, whereby Origio are responsible for managing and funding the final trials for Novocellus' embryo viability product, EmbryoSure®.  Origio then have the right to license the EmbryoSure® IP in exchange for milestone payments and a 25% royalty on future sales.  Origio is currently completing final stability tests of the EmbryoSure® culture medium and preparing the training of IVF clinic staff prior to starting the enrolment of patients in the trial.  ANGLE understands that Origio's progress with the trial of Novocellus' embryo selection product is delayed and therefore believes it prudent to revise the expected date for the first trial results to the end of Q1 2012.  Novocellus has the potential for milestone payments and royalty income in the future. 

*Percentage shareholdings based on issued share capital as at 30 April 2011.

Summary

ANGLE's diversified business model provides shareholders with several opportunities for substantial return without major investment from ANGLE going forward.

In addition there is the potential for a major return from actively investing in the development of Parsortix's cell separation technology.  We are delighted that Parsortix and the opportunities surrounding it have captured the imagination of investors and we look forward to progressing the technology to the next stage.

………………….

Andrew Newland

Chief Executive

27 July 2011

ANGLE PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 APRIL 2011

	Note	2011	2010 (Restated *)
		£	£
Revenue	5	2,419,613	2,454,220
Other operating income		9,267	-
Change in fair value	6	174,814	640,228
Operating costs
Management services		(2,064,485)	(2,190,523)
Ventures		(429,270)	(500,354)
Controlled investments		(339,366)	(283,083)
Share based payments		___(24,920)	(46,306)
		(2,858,041)	(3,020,266)
Operating profit / (loss)		(254,347)	74,182
Finance income		782	348
Finance costs		(7,747)	(8,346)
Net finance income / (cost)		(6,965)	(7,998)
Profit / (loss) before tax		(261,312)	66,184
Profit / (loss) before controlled investments and tax		80,250	326,715
Controlled investments		(341,562)	(260,531)
Tax	7	-	136,516
Profit / (loss) for the year from continuing operations		(261,312)	202,700
Loss from discontinued operations	8	(171,096)	(247,455)
Profit / (loss) for the year		(432,408)	(44,755)
Other comprehensive income
Exchange differences on translating foreign operations		22,741	319,210
Other comprehensive income		22,741	319,210
Total comprehensive income for the year		(409,667)	274,455
		==========	==========

ANGLE PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)

FOR THE YEAR ENDED 30 APRIL 2011

	Note	2011	2010
			(Restated *)
		£	£
Profit / (loss) for the year attributable to:
Owners of the parent
From continuing operations		(183,066)	202,700
From discontinued operations		(171,096)	(247,455)
Non-controlling interests
From continuing operations		(78,246)	-
From discontinued operations		-	-
		____________	____________
Profit / (loss) for the year		(432,408)	(44,755)
		===========	===========
Total comprehensive income for the year attributable to:
Owners of the parent
From continuing operations		(182,796)	521,910
From discontinued operations		(171,096)	(247,455)
Non-controlling interests
From continuing operations		(55,775)	-
From discontinued operations		-	-
		____________	____________
Total comprehensive income for the year		(409,667)	274,455
		===========	===========
Earnings / (loss) per share	9
From continuing operations
Basic and Diluted (pence per share)		(0.90)	0.76
From discontinued operations
Basic and Diluted (pence per share)		(0.60)	(0.93)
From continuing and discontinued operations
Basic and Diluted (pence per share)		(1.50)	(0.17)

* Comparative figures have been restated to show continuing operations separately from discontinued operations - Note 8. 

ANGLE PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 APRIL 2011

	Note	2011	2010
		£	£
ASSETS
Non-current assets
Non-controlled investments	10	2,360,811	2,200,311
Other receivables	10	1,500,000	1,548,942
Property, plant and equipment		8,523	19,446
Intangible assets		443,027	124,781
Total non-current assets		4,312,361	3,893,480
Current assets
Trade and other receivables		322,949	650,308
Tax		-	12,809
Cash and cash equivalents		___619,118	_  846,784
Total current assets		942,067	1,509,901
Total assets		5,254,428	5,403,381
		=========	=========
EQUITY AND LIABILITIES
Equity
Issued capital	12	3,043,728	2,713,293
Share premium account		14,126,365	13,701,935
Share based payments reserve		623,440	1,156,874
Other reserves		2,553,356	2,553,356
Translation reserve		(1,401)	(1,671)
Retained earnings		(15,455,253)	(15,625,605)
ESOT shares		(307,987)	(342,115)
Equity attributable to equity holders of parent		4,582,248	4,156,067
Non-controlling interests		(48,539)	-
Total equity		4,533,709	4,156,067
Liabilities
Non-current liabilities
Controlled investments - loans		221,625	_   98,001
Total non-current liabilities		221,625	_   98,001
Current liabilities
Trade and other payables		___499,094	_1,149,313
Total current liabilities		499,094	1,149,313
Total liabilities		720,719	1,247,314
Total equity and liabilities		5,254,428	5,403,381
		=========	=========

ANGLE PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 APRIL 2011

	2011	2010
	£	£
		(Restated *)
Operating activities
Profit / (loss) before tax	(261,312)	66,184
Adjustments for:
Depreciation of property, plant and equipment	13,173	29,086
(Profit) / loss on disposal of fixed assets	661	865
Amortisation and impairment of intangible assets	81,030	33,555
Exchange differences	(12,552)	28,223
Net finance (income) / cost	6,965	7,998
Change in fair value	(174,814)	(640,228)
Share based payments	24,920	46,306
Operating cash flows before movements in working capital:	(321,929)	(428,011)
(Increase) / decrease in trade and other receivables	45,895	(164,040)
Increase / (decrease) in trade and other payables	(547,239)	238,443
Operating cash flows	(823,273)	(353,608)
Research and development tax credits received	12,809	-
Corporation tax paid	-	(106,502)
Net cash from / (used in) operating activities	(810,464)	(460,110)
Investing activities
Purchase of property, plant and equipment	(2,911)	(10,795)
Purchase of intangible assets	(1,801)	-
Provision of convertible loans	-	(95,175)
Purchase of non-controlled investments	-	(16,865)
Proceeds from sale of investments	-	1,368,786
Cash and cash equivalents acquired on deemed acquisition	2,664	-
Interest received	801	485
Net cash from / (used in) investing activities	(1,247)	1,246,436
Financing activities
Net proceeds from issue of share capital	754,865	-
Interest paid	-	(855)
Net cash from / (used in) financing activities	754,865	(855)
Net increase / (decrease) in cash and cash equivalents from continuing operations	(56,846)	785,471
Discontinued operations
Net cash from / (used in) operating activities	(169,536)	(257,766)
Net increase / (decrease) in cash and cash equivalents from discontinued operations	(169,536)	(257,766)
Net increase / (decrease) in cash and cash equivalents	(226,382)	527,705
Cash and cash equivalents at start of year	846,784	319,819
Effect of exchange rate fluctuations	(1,284)	(740)
Cash and cash equivalents at end of year	619,118	846,784

ANGLE PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 APRIL 2011

	----------------------------------------------- Attributable to equity holders of the Group -----------------------------------------------
			Share based					Total	Non-
	Issued	Share	payments	Other	Translation	Retained	ESOT	Shareholders'	controlling	Total
	capital	premium	reserve	reserve	reserve	earnings	shares	equity	interests	equity
	£	£	£	£	£	£	£	£	£	£
At 1 May 2009	2,713,293	13,701,935	1,523,488	2,553,356	(320,881)	(16,008,032)	(342,115)	3,821,044
For the year to 30 April 2010
Consolidated profit / (loss)						(44,755)		(44,755)
Other comprehensive income
Exchange differences in translating foreign operations					319,210			319,210
Total comprehensive income					319,210	(44,755)		274,455
Share based payments			60,568					60,568
Released on forfeiture / lapse			(378,469)			378,469		-
Deemed disposal of subsidiaries			(48,713)			48,713		-
	___ ______	___ _______	___ ______	___ ______	___ ______	___ ________	___ ______	___ _______	___ _______	___ _______
At 1 May 2010	2,713,293	13,701,935	1,156,874	2,553,356	(1,671)	(15,625,605)	(342,115)	4,156,067	-	4,156,067
For the year to 30 April 2011
Consolidated profit / (loss)						(354,162)		(354,162)	(78,246)	(432,408)
Other comprehensive income
Exchange differences in translating foreign operations					270			270	22,471	22,741
Total comprehensive income					270	(354,162)		(353,892)	(55,775)	(409,667)
Issue of shares	330,435	424,430						754,865		754,865
Share based payments			25,208					25,208		25,208
Released on forfeiture / lapse			(511,516)			511,516		-		-
Utilised on share schemes			(47,126)			12,998	34,128	-		-
Deemed acquisition of subsidiary								-	7,236	7,236
	___ ______	___ _______	___ ______	___ ______	___ ______	___ ________	___ ______	___ _______	___ _______	___ _______
At 30 April 2011	3,043,728	14,126,365	623,440	2,553,356	(1,401)	(15,455,253)	(307,987)	4,582,248	(48,539)	4,533,709
	==========	==========	==========	==========	=========	===========	==========	==========	==========	==========

ANGLE PLC

NOTES TO THE PRELIMINARY ANNOUNCEMENT

FOR THE YEAR ENDED 30 APRIL 2011

1       Preliminary announcement

The preliminary announcement set out above does not constitute the Company's statutory financial statements for the years ended 30 April 2011 or 2010 within the meaning of section 434 of the Companies Act 2006 but is derived from those audited financial statements.  The accounting policies used are unchanged from those used for the statutory financial statements for the year ended 30 April 2010 except as referred to in Note 2. The 2011 statutory accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

The auditors' report on the consolidated financial statements for the year ended 30 April 2011 is unqualified and did not contain statements under s498(2) or (3) of the Companies Act 2006.

2       Compliance with accounting standards

While the financial information included in this preliminary announcement has been computed in accordance with IFRS, this announcement does not itself contain sufficient information to comply with IFRS.

A number of new accounting policies have been added during the year in relation to business combinations, government grants, goodwill and discontinued operations.  The following accounting policies have also been updated - basis of consolidation, taxes, intangible assets, financial instruments and critical accounting estimates.

During the year a number of accounting standards were adopted for the first time.  The only standard that has had a significant effect on the reported results or financial position of the Group is:

IAS 27 - Consolidated and Separate Financial Statements (Revised 2008):

This requires the effects of all transactions with non-controlling interests where there is no change in control to be recorded in equity.  The standard did not require the restatement of previous transactions and therefore comparatives are shown at nil.

Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interest having a deficit in the consolidated statement of financial position.

The Directors have not yet assessed the impact of the adoption of standards or interpretations issued but as yet not effective.

3       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.

       The Group's business activities, together with the factors likely to affect its future development, performance and financial position are set out in the Chairman's and Chief Executive's Statements.  In order to improve the Group's working capital position the Directors have implemented a number of initiatives which have or will reduce costs and improve cash flows.

       On 15 July 2011, the Company announced that it had successfully completed a fundraising of approximately £1.2 million net of costs. It is anticipated that trading will commence in the Fundraising shares in August 2011. The allotment of the Fundraising shares is conditional on admission of the Fundraising shares to trading on AIM becoming effective in accordance with the AIM rules for Companies and the Company receiving Advance Assurance from HMRC of eligibility for EIS relief.  The Company has previously received Advance Assurance from HMRC in February 2006 and September 2010 and nothing has fundamentally changed within the Group since these assurances were received, although the qualifying conditions have been relaxed in certain areas.  Based on its understanding of the current rules, and advice received, the Company believes these conditions will be met. 

       The Directors have prepared and reviewed the financial projections for the 12 month period from the date of signing of these Financial Statements and, based on the level of existing cash, projected income and expenditure and other sources of funding 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 Financial Statements.

4       Critical accounting estimates and judgements

       The preparation of the 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 amount, event or actions, and are believed to be reasonable, actual results ultimately may differ from those estimates.

       The estimates and assumptions and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are described below.

       Valuation of unlisted investments held at fair value (Note 10)

       Valuations of unquoted equity investments are based on the last external funding round where one has taken place, otherwise at cost, less any provision for impairment if the most recent external funding round establishes a valuation lower than the cost or circumstances indicate the cost may not be recovered.  Judgements are required in a number of areas when determining valuation including the treatment of different classes of shares with different rights and a decision on whether or not to impair value and the quantum of the impairment.

       Valuation of Other receivables held at fair value (Note 10)

       Valuation of other receivables relates to the value attributed to an earn-out currently in litigation by the major Acolyte shareholder.  There is uncertainty as to the eventual outcome and judgement has been required in order to estimate a fair value.

       Fair values of acquired assets and liabilities (Note 11)

       When acquiring a business, the Group has to make judgements and best estimates about the fair value allocation of the purchase price, particularly as this relates to the value of separately identifiable intangible assets and goodwill.

       Valuation and impairment of intangible assets

       The Group is required to test, at least annually, whether intangible assets have suffered any impairment.  The recoverable amount is determined using, amongst others, value-in-use calculations.  The use of this method requires the estimation of future cash flows and the selection of a suitable discount rate in order to calculate the present value of these cash flows.  When reviewing intangible assets for impairment the Group has had to make various assumptions and estimates of individual components and their potential value and potential impairment impact.  The Group considers that for each of these variables there is a range of reasonably possible alternative values, which results in a range of fair value estimates.  None of these estimates of fair value is considered more appropriate or relevant than any other and therefore determining a fair value requires considerable judgement.

5       Revenue and operating segment analysis

       The Group operates in one principal area of activity - technology wealth creation through the commercialisation of intellectual property and the development of technology industry. 

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

·        Management services - provision of Management services to clients including research organisations, corporate and governmental organisations on a fee-for-service basis.  This business segment provides a platform for the Ventures activities.

·        Ventures - activities to establish, develop and create value in technology companies.  The Group uses a proprietary Progeny^® process to develop these companies, which are referred to as Progeny^® companies.  ANGLE's unique business model involves ANGLE founding new companies which it controls during the critical early stages of development, before securing third party funding.

Under IFRS, the accounting for Progeny^® companies divides into controlled investments and non-controlled investments:

o  Controlled investments - Progeny^® companies where the Group has control, typically as a result of owning in excess of 50% of the equity.  These are consolidated and the Group's investment costs are expensed in the statement of comprehensive income.

o  Non-controlled investments - Progeny^® companies where the Group does not have control.  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.

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 for continuing operations by segment together with assets where there has been a material change.

		-------------------- Investment --------------------
	Management Services	Ventures	Controlled investments	Non-controlled investments	Total
	£	£	£	£	£
Year ended 30 April 2011
Statement of Comprehensive Income
Revenue	2,358,273	61,340	-		2,419,613
Change in fair value		(17,067)	-	191,881	174,814
Operating costs	(2,064,485)	(429,270)	(339,366)		(2,833,121)
Operating profit / (loss) before other items (other operating income, share based payments and tax)	293,788	(384,997)	(339,366)	191,881	(238,694)
Statement of Financial Position
Assets
Investments (non-current)				2,360,811	2,360,811
Other receivables (non-current)				1,500,000	1,500,000
Property, plant & equipment and Intangible assets	329,876		121,674		451,550
Trade and other receivables (current)	322,573		376		322,949
Cash and cash equivalents	583,656		35,462		619,118
Total	1,236,105		157,512	3,860,811	5,254,428
Liabilities
Trade and other payables	376,781		122,313		499,094
Loans and borrowings	-		221,625		221,625
Total	376,781		343,938		720,719

		-------------------- Investment --------------------
	Management Services	Ventures	Controlled investments	Non-controlled investments	Total
					(Restated)
	£	£	£	£	£
Year ended 30 April 2010
Statement of Comprehensive Income
Revenue	2,369,067	58,938	26,215		2,454,220
Change in fair value		5,526	-	634,702	640,228
Operating costs	(2,190,523)	(500,354)	(283,083)		(2,973,960)
Operating profit / (loss) before share based payments and tax	178,544	(435,890)	(256,868)	634,702	120,488
Statement of Financial Position
Assets
Investments (non-current)				2,200,311	2,200,311
Other receivables (non-current)				1,548,942	1,548,942
Property, plant & equipment and Intangible assets	14,556		129,671		144,227
Trade and other receivables (current)	636,325		13,983		650,308
Taxation			12,809		12,809
Cash and cash equivalents	845,605		1,179		846,784
Total	1,496,486		157,642	3,749,253	5,403,381
Liabilities
Trade and other payables	1,090,932		58,381		1,149,313
Loans and borrowings	-		98,001		98,001
Total	1,090,932		156,382		1,247,314

All significant decisions are made by the Board of Directors, with implementation of that decision on a Group-wide basis.  All "investment" activities are managed on a global basis.

Over 98% of segment revenues and segment assets by geographical location are based in the UK.

         The revenue of the Group for the year has been primarily derived from its Management services activities. In addition the Group managed a grant voucher scheme on behalf of the London Development Agency.  The gross value of the vouchers paid during 2010/11 was £0.8 million (2009/10: £1.0 million) and passed through the Group's books as both income and expenditure, however, due to revenue recognition rules this is classified as "agency" revenues and is not shown in our total revenues.

       In addition the Group provides Ventures services to investments in the form of non-executive director services, management, accounting and administration support for which it receives fees.

6       Change in fair value through statement of comprehensive income

Results of discontinued operation	Year ended 30 April
	2011	2010
	£	£
Change in fair value of investments	-	634,702
Fair value gain / (loss) on deemed disposal of subsidiaries	(17,067)
Fair value gain / (loss) on deemed acquisition of	191,881	-
subsidiaries (Note 11)
	__________	________
Change in fair value	174,814	640,228
	=======	======

7       Tax

The Group is eligible for and takes advantage of the substantial shareholdings relief UK corporation tax exemption.  This results in the 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 net of profits in the Management services business as relieved by losses incurred in the establishment and development of new ventures.  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.

8       Discontinued operations

In the Annual Report and Accounts 2010, the Group announced its intention to discontinue its US operating business. The US business was not classified as a discontinued operation at 30 April 2010 as plans were still under development.  The Group initiated an orderly wind-down of the US operations at the beginning of the financial year which was substantially completed during the financial year.  In accordance with IFRS 5 - "Non-current assets held for sale and discontinued operations" this business has been classified as a discontinued operation and the prior periods have been restated to show the discontinued operation separately from continuing operations.  A summary of the results is set out below:

Results of discontinued operation	2011	2010
	£	£
Revenue	76,695	245,470
Operating costs - Management services	(28,329)	(328,437)
Operating costs - Ventures	(40,817)	(150,226)
Restructuring costs	(178,118)	-
Share based payments	(288)	(14,262)
Net finance income	(239)	-
	_________	_________
Profit / (loss) for the year	(171,096)	(247,455)
	=======	=======

        The consolidated statement of cash flows shows the net cash used in the operating activities of the discontinued operations.  The impact of the discontinued operations on the statement of financial position is minimal.

9       Earnings / (loss) per share

        The basic and diluted earnings / (loss) per share is calculated on an after tax loss of £432,408 (2010: loss £44,755).

        The basic and diluted earnings / (loss) per share are based on 28,732,148 weighted average ordinary 10p shares (2010: 26,832,667).    Share options are non-dilutive for the respective years.

10     Non-controlled investments and Other receivables

       The Group's investment portfolio comprises investments in Progeny® companies.  Progeny® companies are businesses established by ANGLE to commercialise intellectual property (IP) using ANGLE's proprietary Progeny® process.

       Where the Group has control of a Progeny® company (typically owning more than 50% of the equity), these are defined as controlled investments and are consolidated as subsidiaries.  At the point control no longer exists, a deemed profit arises and the non-controlled investment is held at fair value in the statement of financial position.  In the year to 30 April 2011 costs relating to controlled investments of £0.3 million (2010: £0.3 million) were charged to the statement of comprehensive income. 

       Where the Group does not control a Progeny® company (typically owning less than 50% of the equity), these are defined as non-controlled investments and held on the statement of financial position at fair value, as set out in the table below:

Non-controlled investments
	Non-current assets		Current assets		Total Non-controlled
	Unquoted		Quoted		investments
	£		£		£
At 1 May 2009	2,395,000		499,165		2,894,165
Investments	40,229		-		40,229
Disposals	-		(1,368,785)		(1,368,785)
Change in fair value	(234,918)		869,620		634,702
	___________		___________		___________
At 30 April 2010	2,200,311		-		2,200,311
Investments	160,500		-		160,500
	___________		___________		___________
At 30 April 2011	2,360,811		-		2,360,811
	==========		==========		==========

Investments are made directly and in the form of loans.  The loans are normally convertible into equity and are non-interest bearing.

       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) the original funding environment and the current funding environment and 4) the performance of various small cap and tech indices including AIM, Techmark and NASDAQ in the relevant period. 

       Other receivables     

ANGLE's Progeny^® company Acolyte Biomedica (medical diagnostics / MRSA detection) was sold in February 2007.  ANGLE was due an earn-out of up to £4.7 million receivable early in 2010.  This is subject to dispute between the former Acolyte shareholders and the purchaser.    

ANGLE is awaiting the outcome of legal action by the major Acolyte shareholder.  The Court case commenced in June 2011 and is currently in summer recess and a judgement is expected to be reached in October.  Once the outcome of this action is known, ANGLE expects to pursue its own claim against the purchaser.  At present ANGLE has no exposure to legal costs.

A fair value of £1.5 million is included in relation to this in ANGLE's statement of financial position under the "Other receivables" category at 30 April 2011 unchanged from 30 April 2010.

Based on the currently available information and legal advice, the Directors believe that there will eventually be a significant return from this investment.  In present circumstances, the Directors believe that it is appropriate to hold the asset at its most recent fair value, but note that the value may be revised in the future as further information becomes available. 

11    Acquisition of subsidiary

At the start of the year the Group had the potential right to convert certain loans into shares in NeuroTargets Limited, however, at that time there was no economic case for conversion. The company made commercial progress and its licensing partner announced on 16 July 2010 further funding from Wellcome Trust to progress its IP and technology development.  This gave economic value to potential conversion.  The company has been consolidated from 16 July 2010 and this is deemed as an acquisition.  One of the loans was repayable in September 2010 following the expiry of the fifth anniversary of the Loan Agreement.  The loan was converted resulting in a Group shareholding of 65%.

The fair value of the identifiable assets and liabilities of NeuroTargets, determined in accordance with the Group's accounting policies at the date of deemed acquisition, were:

	Previous	Fair value
	Carrying	recognised on
	Value	acquisition
	£	£
Cash and trade receivables	2,664	2,664
Trade and other receivables	32,725	32,725
Trade and other payables	(34,386)	(34,386)
Convertible and other loans	(391,348)	(391,348)
Intangible assets	-	400,000
	_________	_________
Net assets / (liabilities)	(390,345)	9,655
	=======	=======
Shareholders equity interest		2,419
Non-controlling interests		7,236
Fair value of deemed acquisition consideration		100,799
Goodwill arising on initial recognition of deemed acquisition		98,380

Intangible assets acquired comprise intellectual property (patents), know-how, developed technology, in-process research and development and the licence deal with the University of Bristol.  Intangible assets are only recognised in the consolidated financial statements of the Group.  The Company is not yet generating an economic return from these assets so there is no charge for amortisation although the assets remain subject to impairment reviews.

The recognition of intangible assets could potentially result in a deferred tax liability.  However, due to the availability of tax losses that would be available to the Group,  an associated tax asset would be available which would be in excess of the deferred tax liability on the intangible assets.  A deferred tax liability has therefore not been recognised on acquisition.  No additional deferred tax asset has been recognised for NeuroTargets due to the uncertainty that future taxable profits will be available against which the asset can be utilised.

Goodwill arose following the deemed acquisition of NeuroTargets and represents the excess of the consideration given over the fair value of the shareholders equity interest in the separately identifiable assets and liabilities recognised on acquisition.  Goodwill was immediately impaired as the value of the assets and liabilities recognised on deemed acquisition was determined to be a fair value.

From the date of deemed acquisition to 30 April 2011, the business contributed £nil in revenues and incurred a loss before tax of £21,688.  If the company had been acquired from the start of the year it would have contributed £nil in revenues and incurred a loss before tax of £40,847.

12    Share capital

On 13 October 2010, the Company issued 3,304,348 ordinary shares of £0.10 each at an issue price of £0.23.  The Company's current issued share capital is 30,437,279 Ordinary shares of £0.10 each.

13    Shareholder communications

Copies of this announcement are posted on the Company's website www.ANGLEplc.com.

The Annual General Meeting of the Company will be held at 2pm on 6 October 2011 at ANGLE's offices, 3 Frederick Sanger Road, Surrey Research Park, Guildford, GU2 7YD.  Notice of the meeting will be enclosed with the audited statutory financial statements.

The audited statutory financial statements for the year ended 30 April 2011 are expected to be distributed to shareholders by 8 September 2011 and will subsequently be available on the Company's website or from the registered office, 3 Frederick Sanger Road, Surrey Research Park, Guildford, GU2 7YD.

This preliminary announcement was approved by the Board on 27 July 2011.

 

END

 

 

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