Half Yearly Report

RNS Number : 6366R
Omega Diagnostics Group PLC
21 November 2012
 



OMEGA DIAGNOSTICS GROUP PLC

("Omega" or the "Company")

 

INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

 

Omega, the AIM listed medical diagnostics company, announces interim results for the six months ended 30 September 2012, in line with management expectations.

 

Omega is one of the UK's leading companies in the fast growing area of food intolerance testing and also operates in markets supplying tests for allergies and autoimmune diseases and specific infectious diseases through a strong distribution network in over 100 countries.

 
Financial Highlights:

·      Revenue in line with the same period last year at £5.53m despite exchange loss on German operations

·      Gross profit in line with the same period last year at £3.48m

·      Gross margin in line with the same period last year at 63%

·      Adjusted profit before tax ("PBT") down 12% to £0.38m (2011: £0.43m)

·      Adjusted EPS increased to 0.7p (2011: 0.4p)

·      Cash at the period end decreased to £0.78m (2011: £1.88m) due mainly to expenditure on the iSYS project

·      RSA Grant funding of £0.15m awarded post period end

 

Other highlights:

·      Omega Dx (Asia) commenced direct selling of product in India in July 2012 and in the first two full months of trading achieved a sales run rate ahead of the previous distributor's performance

·      Signing of an agreement with SRL Diagnostics covering the distribution of Food Detective in India

·      Successful pre-launch of CD4 test at 19th International AIDS Conference in Washington DC in July

·      IDS-iSYS allergy development programme progressing with technical risk at its lowest point since the programme commenced

 

Regarding outlook, David Evans, Chairman, said:

 

"Trading has held up well in the first half of the year and is in line with management expectation despite the exchange loss related to German operations and the restructuring costs incurred.  Performance is expected to be weighted towards the second half of the year, as for prior years, but we recognise a number of initiatives will need to contribute and counteract the factors outlined in the trading update of 15 October 2012, in order to meet expectation in full for the remaining part of the year. The longer terms prospects for the Group will be significantly enhanced by the commercialisation of the CD4 test.  Early indications suggest the market potential is substantial."

 

 

 

Contacts: 

 

Omega Diagnostics Group plc

Tel: 01259 763 030

Andrew Shepherd, Chief Executive


Kieron Harbinson, Group Finance Director

Jag Grewal, Group Sales and Marketing Director




Seymour Pierce Group

Tel: 020 7107 8000

Mark Percy (Corporate Finance)

www.seymourpierce.com

David Banks/Katie Ratner (Corporate Broking)




Walbrook PR Limited

Tel: 020 7933 8780

Paul McManus

Lianne Cawthorne

Mob: 07980 541 893 or paul.mcmanus@walbrookpr.com

Mob: 07584 391 303 or lianne.cawthorne@walbrookpr.com

 

 



Chairman's Statement

 

There have been a number of positive developments in the period which augur particularly well for growing the business in the next financial year and beyond.  This is not to downplay the disappointment of the delay in the iSYS development programme, although it is worth reiterating that the project has a lower technical risk than at any previous stage to date.

 

Financial

Revenue for the period remained constant compared to the prior period at £5.53m (2011: £5.53m).  A reduction in revenue in Germany, mainly as a result of a weaker euro compared to the prior year has, in part, been offset by gains elsewhere in Europe such that revenue for the whole of Europe (including UK) was £3.65m compared to £3.73m in the prior period. North and South America increased to £0.45m (2011: £0.35m), Asia and Far East increased slightly to £0.67m (2011: £0.66m) and Africa and Middle East reduced slightly to £0.76m (2011: £0.79m).

 

Gross margin was broadly maintained at 62.9% (2011: 63.6%) with the small variation being down to a nominal increase in material costs, whereas labour costs were maintained at last year's level.

 

Administration costs have reduced overall to £2.23m from £2.40m.  This relates mainly to a reduction in expensed development costs but is also reflective of a leaner administrative operation with one-off restructuring costs of over £100k having been incurred in the period.

 

Sales and Marketing costs have increased to £1.11m (2011: £0.93m) which reflects a full period charge for the positions of Sales and Marketing Director, International Business Development Director for Food Intolerance and product management support positions.

 

As a result of the above margin and overhead outcomes, adjusted profit before tax was £0.38m compared to £0.43m in the prior period.  The Group has also accounted for a tax credit in the period of £0.20m (2011: £0.06m charge) which reflects enhanced R&D allowances on an increased level of development expenditure. Accordingly, adjusted earnings per share have increased to 0.7p (2011: 0.4p) as detailed in Note 6 to the interim results.  Consistent with prior reporting periods, a reconciliation of profit before tax to adjusted profit before tax is shown directly underneath the income statement.

 

Allergy and Autoimmune

 

Revenue for the whole division reduced by 11% to £2.03m (2011: £2.28m).  Autoimmune sales increased by 6% in the period to £0.29m (2011: £0.27m).

 

Germany

As mentioned in the trading update on 15 October 2012, a reduction of 4% at constant exchange rates was due mainly to wet weather in the period weakening the pollen season.  The effect of a weaker euro exchange rate further reduced reported sales in Germany by £0.18m.  In terms of the reimbursement scenario, there has been no further change since the last trading update. 

 

Export

Completion of software updates for Omega GmbH allergy products together with being in the final stage of a new liquid format for Allergozyme® have led to opportunities in several territories and it remains the aim to promote the revised range in the current financial year.  Allergodip® has also been adapted for the Indian market which, together with the new Allergozyme® range, will be launched at the World Allergy Organisation International Scientific Conference in Hyderabad, India on 6-9 December 2012.    

 

IDS-iSYS

Despite the delay referred to in the trading update of 15 October 2012, there has been further progress.  10 allergens have now completed the optimisation phase with the four most recent allergens coming through the programme in 2-3 months, which is significantly quicker than the 12 months it took for the first six allergens to progress.  But for a lack of availability of certain patient serum samples, a higher number could have been optimised by now.  The final claim support phase, which follows optimisation, recently revealed the need for additional experiments which are now progressing.  Accordingly, we have taken a conscious decision to focus on this phase of work for the first 10 allergens, and which we expect to complete before the end of the current financial year.  Optimisation work on subsequent allergen groups will be held pending the obtaining of sufficient patient serum samples.  In this regard, we now have two additional suppliers who have indicated they will have sufficient quantities of material by the end of this calendar year for at least the next 14 allergens that have commenced, but not yet finished optimisation.  As indicated in the last trading update, we are now aiming to launch with a panel of 40+ tests by the end of calendar 2013.

 

Food Intolerance

Divisional revenue increased by 15% to £2.12m (2011: £1.84m) with another strong performance across the board.

 

Genarrayt® reagent sales increased by 27% to £0.84m (2011: £0.66m) with growth in key markets and sales in Germany for the first time.  Revenue per instrument (excluding Spain) has continued its growing trend, increasing by 35% at this half-year stage to £5,959 (2011: £4,399).  Seven systems were sold in the period (2011: eight systems) bringing the total installed base to 115 systems.

 

Food Detective® sales increased by 5% to £0.54m (2011: £0.51m) with further growth in the largest market, Poland, more than offsetting any reductions elsewhere and there remains an expectation of continued growth in BRIC countries (see below).

 

Foodprint® sales from lab testing services have grown by 47% to £0.30m (2011: £0.21m) driven mainly by the increased activity of a major retail pharmacy chain in offering food intolerance tests in store, through the collection of patient samples which are then sent to our laboratory for testing; a further indication of the growing trend of consumers to take a more active role in their health and wellbeing. 

 

Infectious Disease/other

Revenue for the division reduced by 2% to £1.38m (2011: £1.41m).  Following a World Health Organisation recommendation in July 2011, in June of this year, the Indian Government banned the import of serology tests for TB.  The reduction in sales in the first half of approximately £50k has been mitigated by an increase in sales of bacterial tests through Co-Tek, which achieved sales of £0.26m (2011: £0.18m) as minimum contracted volumes were adhered to by the main customer.

 

CD4

Following a successful pre-launch of this test at the 19th International AIDS Conference in Washington DC in July of this year, significant interest was shown by major aid organisations, including Clinton Health Access Initiative ("CHAI"), Medecins Sans Frontieres and UNICEF.  The project to transfer the technology from the Burnet Institute to Omega is nearing completion and the aim remains to provide product for evaluation to coincide with World AIDS day on 1 December 2012.  To this end, CHAI and UNICEF have already placed orders for product samples to be supplied as soon as they become available.

 

BRIC Strategy

 

India

Omega Dx (Asia) has been fully operational since July this year and now has a team of 17 full time people, 10 of whom are field based.  In addition, the Company has built a network of over 60 sub-stockists in 12 states covering all the main metropolitan cities in India.  This has enabled a completely smooth transition from the old distributor model to the new enhanced direct model. In the first two full months of trading the business has achieved a sales run rate ahead of the previous distributor's performance and the Company will benefit from the increased margins associated with a direct sales approach.

 

The recent signing of the agreement with SRL for the distribution of Food Detective® is a further endorsement of our strategy and certain opportunities for distributing third parties' products are nearing completion.

 

China

We have recently received notification, via our distributor, that Food Detective® has finally received approval from the State Food and Drug Administration, P.R. China.  We await the official notification so that marketing of this product in the World's most populous country can begin in earnest.

  

Outlook

Trading has held up well in the first half of the year and is in line with management expectation despite the exchange loss related to German operations and the restructuring costs incurred.  Performance is expected to be weighted towards the second half of the year, as for prior years, but we recognise a number of initiatives will need to contribute and counteract the factors outlined in the trading update of 15 October 2012, in order to meet expectation in full for the remaining part of the year.  The longer terms prospects for the Group will be significantly enhanced by the commercialisation of the CD4 test.  Early indications suggest the market potential is substantial. 

 

 

 

David Evans

Non-Executive Chairman

21 November 2012

 

 

 

 

 

 

INDEPENDENT REVIEW REPORT TO OMEGA DIAGNOSTICS GROUP PLC

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 which comprises the Consolidated  Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and the related explanatory notes 1 to 6. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the AIM Rules issued by the London Stock Exchange which require that it is presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

 

As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the AIM Rules issued by the London Stock Exchange.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with the accounting policies outlined in Note 1, which comply with IFRS's as adopted by the European Union and in accordance with the AIM Rules issued by the London Stock Exchange.

 

Ernst & Young LLP

Glasgow

21 November 2012



 

Consolidated Statement of Comprehensive Income





for the six months ended 30 September 2012







6 months


6 months



to 30 Sept


to 30 Sept


Notes

2012


2011



£


£

Continuing operations





Revenue

3

5,532,472


5,527,796

Cost of sales


(2,051,832)


(2,012,377)






Gross profit


3,480,640


3,515,419

Administration costs


(2,227,532)


(2,397,021)

Selling and marketing costs


(1,106,927)


(927,648)






Operating profit


146,181


190,750






Finance costs

4

(17,550)


(28,244)

Finance revenue - interest receivable


2,960


5,454






Profit before taxation


131,591


167,960






Tax credit / (charge)

5

204,565


(61,989)






Profit for the period


336,156


105,971






Other comprehensive income





Exchange differences on translation of foreign operations


(256,408)


(60,944)

Tax credit


31,757


-

Other comprehensive income for the period


(224,651)


(60,944)






Total comprehensive income for the period


111,505


45,027






Earnings Per Share (EPS)





Basic and diluted EPS on profit for the period

6

0.4p


0.1p






Adjusted Profit before Taxation


6 months


6 months

for the six months ended 30 September 2012


to 30 Sept


to 30 Sept



2012


2011



£


£

Profit before taxation


131,591


167,960

IFRS-related discount charges (included within Finance costs)

12,619


16,332

Fair value adjustments to financial derivatives (included





within Finance costs)


(454)


(1,789)

Amortisation of intangible assets (included within Administration costs)

197,684


208,146

Share-based payment charges (included within Administration costs)

33,825


8,681

Acquisition related costs (included within Administration costs)

-


27,848






Adjusted profit before taxation


375,265


427,178






Earnings Per Share (EPS)





Basic and diluted Adjusted EPS on profit for the period

6

0.7p


0.4p










 

 

 

Consolidated Balance Sheet







as at 30 September 2012























At 30 Sept


At 31 March


At 30 Sept



2012


2012


2011



£


£


£

Assets







Non-current assets







  Intangibles


9,249,068


9,136,072


9,379,244

  Property, plant and equipment


2,008,104


2,068,509


1,972,716

  Deferred taxation


367,947


150,332


54,194

  Retirement benefit surplus


85,639


85,639


41,984










11,710,758


11,440,552


11,448,138








Current assets







  Inventories


1,618,881


1,689,549


1,455,480

  Trade and other receivables


2,523,059


2,417,500


2,254,816

  Income tax receivable


20,428


4,054


4,055

  Cash and cash equivalents


780,873


1,159,132


1,876,310










4,943,241


5,270,235


5,590,661








Total assets


16,653,999


16,710,787


17,038,799








Equity and liabilities







Issued capital


12,977,107


12,977,107


12,977,107

Retained earnings


492,733


347,403


42,957








Total equity


13,469,840


13,324,510


13,020,064








Liabilities







Non-current liabilities







  Long term borrowings


444,645


794,389


781,613

  Other financial liabilities


-


-


124,887

  Deferred taxation


501,393


503,728


526,750

  Derivative financial instruments


-


454


1,646








Total non-current liabilities


946,038


1,298,571


1,434,896








Current liabilities







  Short term borrowings


720,000


509,811


677,328

  Other financial liabilities


130,000


124,877


429,888

  Trade and other payables


1,388,121


1,453,018


1,325,671

  Income tax payable


-


-


150,952








Total current liabilities


2,238,121


2,087,706


2,583,839








Total liabilities


3,184,159


3,386,277


4,018,735








Total equity and liabilities


16,653,999


16,710,787


17,038,799



































 

Consolidated Statement of Changes in Equity for the six months ended 30 September 2012











 


Share


Share


Retained




capital


premium


earnings


Total


£


£


£


£









Balance at 1 April 2011

4,145,580


8,831,527


(10,751)


12,966,356









Profit for the period to 30 September 2011

-


-


105,971


105,971









Other comprehensive income - net exchange adjustments

-


-


(60,944)


(60,944)









Total comprehensive income

-


-


45,027


13,011,383









Share-based payments

-


-


          8,681


8,681









Balance at 30 September 2011

4,145,580


8,831,527


42,957


13,020,064









Profit for the period to 31 March 2012

-


-


421,012


421,012









Other comprehensive income - net exchange adjustments

-


-


(210,186)


(210,186)









Other comprehensive income - actuarial gain on defined benefit pensions

-


-


56,000


56,000









Other comprehensive income - tax credit

-


-


16,585


16,585









Total comprehensive income

-


-


283,411


13,303,475









Share-based payments

-


-


        21,035


21,035









Balance at 31 March 2012

4,145,580


8,831,527


347,403


13,324,510









Profit for the period to 30 September 2012

-


-


      336,156


336,156









Other comprehensive income - net exchange adjustments

-


-


(256,408)


(256,408)









Other comprehensive income - tax credit

-


-


31,757


31,757









Total comprehensive income

-


-


111,505


13,436,015









Share-based payments

-


-


        33,825


33,825









Balance at 30 September 2012

4,145,580


8,831,527


492,733


13,469,840

 

 

 

Consolidated Cash Flow Statement




for the six months ended 30 September 2012













6 months


6 months


to 30 Sept


to 30 Sept


2012


2011


£


£





Cash flows generated from operations




Profit for the period

336,156


105,971

Adjustments for:




Taxation

(204,565)


61,989

Finance costs

17,550


28,244

Finance income

(2,960)


(5,454)





Operating profit

146,181


190,750

(Increase)/decrease in trade and other receivables

(105,559)


114,885

Decrease/(increase) in inventories

70,668


(181,510)

Decrease in trade and other payables

(64,893)


(165,037)

Depreciation

132,592


132,008

Amortisation of intangible assets

197,684


208,146

Loss/(gain) on sale of property, plant and equipment

1,010


(67)

Share-based payments

33,825


8,681

Cash flow from operating activities

411,508


307,856

Settlement of acquisition related liability

-


(125,000)

Net cash flow from operating activities

411,508


182,856





Investing activities




Finance income

2,960


5,454

Purchase of property, plant and equipment

(129,915)


(162,622)

Purchase of intangible assets

(455,414)


(10,088)

Sale proceeds of property, plant and equipment

-


83





Net cash used in investing activities

(582,369)


(167,173)





Financing activities




Finance costs

(1,708)


(8,018)

Loan repayments

(137,377)


(135,174)

Finance lease repayments

(13,361)


(31,118)





Net cash used in financing activities

(152,446)


(174,310)





Net decrease in cash and cash equivalents

(323,307)


(158,627)

Effects of exchange rate movements

(54,952)


(19,940)

Cash and cash equivalents at beginning of period

1,159,132


2,054,877





Cash and cash equivalents at end of period

780,873


1,876,310




 

 

 

 

 

 

 

 

 

Notes to the Interim Report

for the six months ended 30 September 2012

 

 

 

1. BASIS OF PREPARATION

For the purpose of preparing the March 2012 Annual financial statements the Directors used IFRS as adopted by the EU and in accordance with the AIM Rules issued by the London Stock Exchange. In preparing these interim financial statements, the same accounting policies have been used as set out in the Group's Annual Report for the year ended 31 March 2012. The Group has not applied IAS 34 Interim Financial Reporting, which is not mandatory for AIM companies, in the preparation of these interim financial statements.

 

The interim financial statements are unaudited but have been formally reviewed by the auditors and their report is unqualified. The information shown in the consolidated balance sheet as at 31 March 2012 does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and has been extracted from the Group's 2012 Annual Report which has been filed with the Registrar of Companies. The report of the auditors on the financial statements contained within the Group's 2012 Annual Report was unqualified and did not contain a statement under sections 498 (2) and 498 (3) of Chapter 3, Part 16 of the Companies Act 2006.  These interim financial statements were approved by the Board of Directors on 21 November 2012.

 

 

 

2. SEGMENT INFORMATION

For management purposes the Group is organised into three operating divisions: Allergy and Autoimmune, Food Intolerance and Infectious Disease and Other.

 

The Allergy and Autoimmune division specialises in the research, development, production and marketing of in-vitro allergy and autoimmune tests used by doctors to diagnose patients with allergies and autoimmune diseases.

 

The Food Intolerance division specialises in the research, development and production of kits to aid the detection of immune reactions to food. It also provides clinical analysis to the general public, clinics and health professionals as well as supplying the consumer Food Detective test.

 

The Infectious Diseases division specialises in the research, development and production and marketing of kits to aid the diagnosis of infectious diseases.

 

Corporate consists of centralised corporate costs which are not allocated across the three business divisions.

 

Inter segment transfers or transactions are entered into under the normal commercial conditions that would be available to unrelated third parties.

  

BUSINESS SEGMENT INFORMATION

 


Allergy and Autoimmune

Food Intolerance

Infectious/

Other

 

Corporate

 

Group

September 2012

£

£

£

£

£







Statutory Presentation






Revenue

2,031,610

2,514,960

1,448,215

-

5,994,785

Inter-segment revenue

(5,073)

(394,014)

(63,226)

-

(462,313)

Total Revenue

2,026,537

2,120,946

1,384,989

-

5,532,472

Operating costs

(2,099,167)

(1,664,293)

(1,239,197)

(383,634)

(5,386,291)

Operating profit/(loss)

(72,630)

456,653

145,792

(383,634)

146,181

Net finance costs

32

439

(368)

(14,693)

(14,590)

Profit/(loss) before taxation

(72,598)

457,092

145,424

(398,327)

131,591







Adjusted profit before taxation






Profit/(loss) before taxation

(72,598)

457,092

145,424

(398,327)

131,591

IFRS-related  discount charges

-

-

-

12,619

12,619

Fair value adjustments to financial

  derivatives

 

-

 

-

 

-

 

 (454)

 

(454)

Amortisation of intangible assets

138,129

49,417

10,138

-

197,684

Share-based payment charges

-

-

-

33,825

33,825

Adjusted profit/(loss) before taxation

65,531

506,509

155,562

(352,337)

375,265

 


Allergy and Autoimmune

Food Intolerance

Infectious/

Other

 

Corporate

 

Group

September 2011

£

£

£

£

£







Statutory Presentation






Revenue

2,281,278

2,110,247

1,430,872

-

5,822,397

Inter-segment revenue

(2,441)

(272,539)

(19,621)

-

(294,601)

Total Revenue

2,278,837

1,837,708

1,411,251

-

5,527,796

Operating costs

(2,318,386)

(1,424,809)

(1,232,486)

(361,365)

(5,337,046)

Operating profit/(loss)

(39,549)

412,899

178,765

(361,365)

190,750

Net finance costs

(301)

(1,488)

3

(21,004)

(22,790)

Profit/(loss) before taxation

(39,850)

411,411

178,768

(382,369)

167,960







Adjusted profit before taxation






Profit/(loss) before taxation

(39,850)

411,411

178,768

(382,369)

167,960

IFRS-related  discount charges

-

-

-

16,332

16,332

Fair value adjustments to financial

  derivatives

 

-

 

-

 

-

 

(1,789)

 

(1,789)

Amortisation of intangible assets

148,770

49,374

10,002

-

208,146

Acquisition costs

27,848

-

-

-

27,848

Share-based payment charges

-

-

-

8,681

8,681

Adjusted profit/(loss) before taxation

136,768

460,785

188,770

(359,145)

427,178

 



 










 

 

3. REVENUES

 

 





6 months


6 months







to 30 Sept


to 30 Sept







2012


2011







£


£










UK






575,949


511,422

Germany






1,807,656


2,027,439

Rest of Europe





1,269,495


1,190,853

North America





186,775


145,011

South/Central America




262,665


201,170

Asia and Far East





666,652


656,674

Africa and Middle East




763,280


795,227
















5,532,472


5,527,796

 

 

 

4. FINANCE COSTS

 







6 months


6 months







to 30 Sept


to 30 Sept







2012


2011







£


£










Interest payable on loans




4,142


8,660

Exchange difference on loans




927


2,911

Unwinding of discounts




12,619


16,332

Fair value adjustment to financial derivatives


(454)


(1,789)

Finance charges payable under finance leases


316


2,130
















17,550


28,244

 

 

 

5. TAX CREDIT / (CHARGE)

 







6 months


6 months

 







to 30 Sept


to 30 Sept

 







2012


2011

 







£


£

 

Tax credited / (charged) in the income statement







Current tax - current year




-


(15,327)

 

Current tax - prior year adjustment



16,373


(10,477)

 

Deferred tax - current year




127,164


(3,079)

 

Deferred tax - prior year adjustment



61,028


(33,106)

 










 







204,565


(61,989)

 

 

Tax relating to items charged or credited to other comprehensive income 

Deferred tax on net exchange adjustments




31,757

---















31,757

-

 

 

 

Reconciliation of total tax charge








Factors affecting the tax charge for the period:







Profit before tax






131,591


167,960










Effective rate of taxation






24%


28%










Profit before tax multiplied by the effective rate of tax



31,582


47,029










Effects of:









Expenses not deductible for tax purposes and permanent differences


1,160


6,004

Research and development tax credits





(168,088)


(24,410)

Tax (over) / under-provided in prior years




(77,401)


43,583

Adjustment due to different overseas tax rate




3,442


1,595

Impact of UK rate change on deferred tax




4,740


(11,812)

Tax (credit) / charge for the period





(204,565)


61,989

 

 

In March 2012, the UK Government announced its intention to accelerate the planned phased decrease in the rate of corporation tax with a reduction to 24% on 1 April 2012 and a planned further reduction by 1% per annum until it reaches 22% on 1 April 2014. At 30 September 2012 the change in corporation tax rate from 24% to 23% on 1 April 2013 had been substantively enacted and therefore the deferred tax assets and liabilities included within these results have been calculated based on the reduced current UK corporation tax rate of 23%. The estimated impact of the proposed further reduction of the rate to 22% would be to reduce the net deferred tax liability by £5,802.

 

 

 

6. EARNINGS PER SHARE

 


6 months

to 30 Sept 2012

6 months

to 30 Sept

2011


£

£

Profit attributable to equity holders of the Group

336,156

105,971

 





2012

Number

2011

Number

 

Basic and diluted average number of shares

 

85,216,257

 

85,216,257

 

Share options

1,767,938

-

Diluted weighted average number of shares

86,984,195

85,216,257

 

The number of shares in issue at the period end was 85,216,257.  Basic earnings per share are calculated by dividing profit for the year attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the year.

 

Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Diluting events are excluded from the calculation when the average market price of ordinary shares is lower than the exercise price.

 

Adjusted Earnings per share on profit for the period

The Group presents adjusted earnings per share which is calculated by taking adjusted profit before taxation and adding the tax credit / deducting the tax charge in order to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

 


6 months

to 30 Sept 2012

6 months

to 30 Sept

2011


£

£

Adjusted profit attributable to equity holders of the Group

579,830

365,189

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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