Preliminary results

RNS Number : 1555F

Syntopix Group plc

07 January 2010

 



Press Release

7 January 2010

Syntopix Group plc

("Syntopix" or "the Group")

Preliminary Results

Syntopix Group plc (AIM: SYN), the speciality research group focused on topical antimicrobial innovations for products in the medicine and consumer healthcare markets, today announces preliminary results for the financial year ending 31 July 2009.

Highlights

	Second 12 month exclusive evaluation agreement signed with a major consumer healthcare company
	Continued collaboration with Procter & Gamble under joint development agreement
	Positive clinical results for lead dermatological compound in Phase II cosmetic study of acneic skin
	Turnover increased by 34.8% to £190,000 (2008: £141,000) following further commercial agreements entered into during the year with operating losses reduced by 17.5% to £1.29m
	Planned equity issue during the current financial year in order to fully progress commercial opportunities

Dr Stephen Jones, Chief Executive Officer, commented:

"I am delighted to report on a year of continued progress for Syntopix Group.  The Group has now established links with two of the world's largest consumer healthcare companies from which we envisage generating revenue streams in the near future. The successful Phase II cosmetic study completed after the year end is a significant milestone for the Group and will contribute to Syntopix entering into further commercial agreements. 

"The Group is now focussing strategically on the commercial development of its three leading products which each have multiple potential applications in skincare, hair care and oral care."

- Ends - 

For further information, please contact:

Syntopix Group plc
Dr Stephen Jones, Chief Executive Officer	[phone]
	www.syntopix.com

Zeus Capital Ltd
Ross Andrews / Bobby Fletcher	Tel: [phone]
	www.zeuscapital.co.uk

Media enquiries:

Abchurch Communications
Sarah Hollins / Simone Elviss	Tel: [phone]
[e-mail]	www.abchurch-group.com

  Notes to editors:

Syntopix is a specialised research and development business, focusing on topical antimicrobial innovations for products in consumer healthcare and pharmaceutical markets. The Group was founded in 2003 as a spin-out from the University of Leeds by Dr Jon Cove and Dr Anne Eady, two of the world's leading experts in skin microbiology.

The Group's development focus is on its three leading, core compounds SYN0126, SYN1113 and SYN0017. Each has multiple potential uses across a number of large consumer healthcare markets including skincare, hair-care and oral health. Syntopix has developed strong working relationships with a number of major consumer healthcare companies including Proctor & Gamble and is now actively seeking to out-license these products to commercial partners.

Syntopix has a robust pipeline, with a growing library of over 2,200 compounds. Its strategy is to seek to reduce the risks and costs of drug discovery and development by discovering novel uses for known compounds and combinations of compounds, which have established safety profiles. The Group adopts an ongoing filing process that has resulted in 22 core patents/applications.  

The Group is based at the Institute of Pharmaceutical Innovation in Bradford, giving access to the expertise in skin biology, formulation and toxicology at the universities of Bradford and Leeds.

Syntopix' shareholders include Techtran Group Limited (a subsidiary of IP Group plc), The Wellcome Trust Limited, University of Leeds Limited and Ridings Early Growth Investment Company Limited. Syntopix joined the AIM market of the London Stock Exchange in March 2006.

  Chairman's and Chief Executive Officer's Statement

Introduction

The Group's strategy is to deliver clinically proven formulations to the cosmetic and consumer markets which will enable Syntopix to gain early revenue streams whilst providing 'ownable technologies' to our partners. During the year, the Board is pleased to report that the Group has achieved increased revenues of £190,000 from £141,000 in 2008 following entry into further commercial agreements. The Group continues to strengthen its relationships with potential partners and its key customers. Following close control of overheads, operating costs have been reduced, resulting in a lower operating loss this year of £1,292,000 (2008: £1,567,000).

In April 2009, the Group signed its second 12 month exclusive evaluation agreement with a major consumer healthcare company in the field of oral healthcare. The Group received an initial upfront payment at the commencement of this agreement and will receive further payments for any compounds chosen for additional evaluation.

In July 2008, Syntopix entered into a joint development agreement with Procter & Gamble, the world's largest consumer products company. Under this agreement, the Group will jointly investigate the use of its novel antimicrobial technology with the objective of improving the efficacy of one of Procter & Gamble's major brands.

Markets and opportunities

The Group's opportunities are principally in the areas of acne, oral hygiene and hair care, targeting both the medicine and consumer healthcare markets. 

The prescription market for dermatological disease treatments is currently in excess of $11 billion, with the market for acne representing over $2.5 billion of these sales. The medicated skin care market is worth an additional $10 billion with sales for acne treatments in excess of another $1 billion. 51% of those who suffer from acne do not seek medical help and the Group is therefore developing compounds suitable for exploitation within the cosmetic, over-the-counter and prescription medicine markets.

Additionally, the Group believes there is a major global demand for antimicrobial compounds in the consumer healthcare market. The oral hygiene market is worth over $24 billion per annum. Statistics show that in the USA alone, around 74% of the population have an episode of gingivitis each year and the three leading brands of oral healthcare products each have annual sales in excess of $1 billion. Similarly the hair care market has global sales of $20 billion and statistics show that, for this market, 50% of the world's population have dandruff at some stage each year. The Group is discovering and developing antimicrobial compounds for the treatment of these types of widespread conditions to take advantage of these large market opportunities.

Strategy

The global markets the Group has identified are significant but, due to the restrictive cost of discovering safe compounds, there has historically been a lack of innovation. In addition, many of the antimicrobial compounds presently in use are increasingly linked to concerns about environmental toxicity and/or bacterial resistance.  

Syntopix's approach is to identify and develop cost-effective alternative compounds and methodologies which overcome these problems and which reduce the high risks and costs of early compound discovery. At the same time, the Group aims to reduce the lead-time to market normally associated with conventional product development.

The Group is discovering antimicrobial compounds and synergistic combinations of compounds that already have a history of use in man. This reduces much of the risk associated with developing new compounds and speeds up the process of getting the compounds to market. Therefore these types of compounds are an attractive commercial proposition for the Group's key customers and potential partners.

The strategy therefore continues to focus upon leveraging the Group's antimicrobial compound library and intellectual property portfolio and expanding its opportunities into broader areas within dermatological and consumer healthcare markets.

In order for the Group to fully progress the above strategy, the Directors of Syntopix believe that it is appropriate for the Group to seek further funding through an equity share issue and are confident that this can be successfully achieved in the near future.

Product development

During the year Syntopix has added selectively to its library of potential development candidates, which is now in excess of 2,200 compounds. The Group has continued to use its screening process and has shown that approximately 30% of these compounds exhibit antimicrobial activity against the key organism which causes acne, Propionibacterium acnes. 

Additionally, the Group has expanded its screening programmes to include the identification of antimicrobial compounds for use in consumer healthcare applications including oral care, other wound care, body odour and fungal infections. The Group is also using more sophisticated screening processes to assess the fitness-for-purpose of candidate compounds for different applications. The Group now offers bespoke compound assessments for customers with specific requirements. 

Syntopix has made tremendous progress in moving its lead compounds from research into clinical development and has completed its second Phase II proof-of-concept human-use study in 70 subjects with acneic skin. Two Syntopix preparations were investigated: SYN 0126 in combination with (a) SYN0040, and (b) SYN0040 with SYN0854. These compounds can be used in cosmetic or medicinal products. The study had positive (an existing marketed product) and negative (vehicle) controls and the products were used once a day for eight weeks. SYN0126 in the presence of SYN0040 had a significant effect on both non-inflamed and total lesions after two weeks of treatment, which became highly significant after eight weeks. For both Syntopix treatments, almost 50% of the subjects had their spot count reduced by at least 33% after eight weeks. This level of efficacy, from compounds suitable for incorporation into cosmetic or over-the-counter medicines, compares very favourably to prescription medicines used to treat acne. 

Additionally, the Group's proprietary laboratory screening techniques have identified a highly potent compound (SYN1113) that has great potential for the treatment of acne and because it is coloured green, and is a 'natural' compound, it offers huge consumer appeal. Plans are being prepared to test this compound in a human-use study in 2010.

Both of these opportunities are attracting considerable attention from major healthcare and skincare companies. 

Intellectual property

The Group's intellectual property portfolio is critical for its success in licensing compounds and continues to grow and become more focused. The Group adopts an ongoing filing process that has resulted in 22 core patents/applications. Of these, nine are granted in the UK, three are published applications and ten are awaiting publication. Overall, the Group's portfolio has a total of 41 patents/applications across key international territories. Each case in the portfolio is continually evaluated for commercial opportunity.

Outlook

The Group is committed to developing safe and effective products for use in both medicinal and consumer healthcare markets by continuing to seek new uses for its antimicrobial expertise and through expansion of the commercial potential of its compounds. Syntopix's strategy and approach to identifying new antimicrobial compounds has created innovative opportunities for its commercial partners in the global consumer healthcare market. 

The Group continues to invest in its discovery pipeline to fuel its development programmes, and take the most promising candidates into human use studies. To maximise the value of the Group's portfolio, it now needs to develop the most promising compounds into product candidates. The Board is very confident that these studies will deliver data that will convince potential partners that Syntopix's compounds have a commercial future in the treatment of dermatological and consumer healthcare conditions. The funds raised from the planned issue of equity during the current period will be used to enable the Group to fulfil and deliver this strategy. 

Additionally, the agreements that have been signed with two of the world's largest consumer healthcare companies and the discussions we are having with other potential licensees, validates the Group's belief that the antimicrobial compounds within its portfolio, have a broad range of applications in these very large commercial markets. The Group enters the current year with a cash balance of £894,000 and is extremely optimistic that further beneficial commercial opportunities will result from the Syntopix programmes over the next twelve months.

R H Adams Chairman	S P Jones Chief Executive Officer
7 January 2010

  Consolidated Income Statement for the year ended 31 July 2009 

		2009	2008
		£000	£000
Revenue		190	141
Other operating income		-	13
Administrative expenses:
Research and development costs		(861)	(1,050)
Other administrative expenses		(621)	(671)
Total administrative expenses		(1,482)	(1,721)
Operating loss before share-based payment charges		(1,171)	(1,473)
Share-based payment charges		(121)	(94)
Operating loss		(1,292)	(1,567)
Finance income		36	33
Loss before tax		(1,256)	(1,534)
Tax credit		141	131
Loss for the year attributable to equity shareholders		(1,115)	(1,403)
Loss per ordinary share
Basic and diluted (pence)		(14.5p)	(24.5p)

All of the above activities are continuing.

  Consolidated Balance Sheet as at 31 July 2009 

		2009	2008
		£000	£000
Non-current assets
Property, plant and equipment		56	79
		56	79
Current assets
Trade and other receivables		58	58
Income tax receivable		141	131
Cash and cash equivalents		894	437
		1,093	626
Total assets		1,149	705
Current liabilities
Trade and other payables		(333)	(372)
		(333)	(372)
Total liabilities		(333)	(372)
TOTAL NET ASSETS		816	333
Equity attributable to equity holders of the company
Called up share capital		772	573
Share premium reserve		4,657	3,379
Share based payments reserve		178	226
Merger reserve		338	338
Retained earnings		(5,129)	(4,183)
TOTAL EQUITY		816	333

  Consolidated Statement of Changes in Equity

		Share	Share-based
	Share	Premium	Payments	Merger	Retained
	Capital	Reserve	Reserve	Reserve	Earnings	Total
	£000	£000	£000	£000	£000	£000
At 1 August 2007	573	3,379	132	338	(2,780)	1,642
Loss and total recognised income and expense for the year	-	-	-	-	(1,403)	(1,403)
Share option charge	-	-	94	-	-	94
At 31 July 2008	573	3,379	226	338	(4,183)	333
Loss and total recognised income and expense for the year	-	-	-	-	(1,115)	(1,115)
Share option charge	-	-	121	-	-	121
Share options lapsed	-	-	(169)	-	169	-
Issue of shares	199	1,290	-	-	-	1,489
Expenses of share issue	-	(12)	-	-	-	(12)
At 31 July 2009	772	4,657	178	338	(5,129)	816

  Consolidated Cash Flow Statement for the year ended 31 July 2009 

		2009	2008
		£000	£000
Cash flow from operating activities
Loss before tax		(1,256)	(1,534)
Finance income		(36)	(33)
Depreciation		32	37
Share based payments		121	94
Operating cash outflow before changes in working capital		(1,139)	(1,436)
Movement in trade and other receivables		-	150
Movement in trade and other payables		(39)	66
Cash flow from operations		(1,178)	(1,220)
Tax received		131	134
Net cash flow from operating activities		(1,047)	(1,086)
Investing activities
Purchase of property, plant and equipment		(9)	(4)
Finance income		36	33
Net cash flow from investing activities		27	29
Financing activities
Issue of share capital (net of expenses)		1,477	-
Net cash flow from financing activities		1,477	-
Net increase/(decrease) in cash and cash equivalents		457	(1,057)
Cash and cash equivalents at the beginning of the year		437	1,494
Cash and cash equivalents at the end of the year		894	437

  Notes to the Preliminary Announcement

1. Accounting Policies

Significant accounting policies

Syntopix Group plc (the 'Company) is a company incorporated in the United Kingdom. The consolidated financial statements of the Company for the year ended 31 July 2009 comprise the Group and its subsidiaries (together referred to as the 'Group').

The following paragraphs summarise the significant accounting policies of the Group, which have been consistently applied in dealing with items which are considered material in relation to the Group's financial statements.  

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the EU and applicable law. 

The financial statements have been prepared on the going concern basis which assumes that the Group will have sufficient funds available to enable it to continue to trade for the foreseeable future. The Group's principal activity is the research, discovery and development of compounds for use in both medicinal and consumer healthcare markets in order to achieve licensing deals with companies in these markets. Future sales revenues are expected to be derived from milestone payments on entering new commercial agreements, followed by royalty income from successful product launches by the Group's customers. There is a time lag between the conclusion of each study or trial which the Group undertakes and the establishment of commercial deals from the data and results from those studies. During the next 12 months the Directors believe that new commercial deals will be agreed which will generate milestone revenues, however, there is significant uncertainty over both the timing and magnitude of those anticipated revenues. The Directors have considered the implications of this uncertainty on the Group's cash flows for the next 12 months.

The Directors believe that it is appropriate for the Group to seek additional funding within this period in order for it to fully progress the planned development programme and to progress all the ongoing commercial discussions with key partners and customers.  

The Directors are therefore currently seeking to raise new funding through an equity share issue and, although there are no signed agreements yet in place, they are confident that a funding round can be successfully achieved.

The Directors have also considered the action which the Group would need to take should it be unable to raise further funding at this stage. The Directors believe that, by scaling down the full planned development programme and the Group's current cost base, they will be able to use existing cash resources to ensure that the Group can continue to trade through to the point at which new milestone revenues are achieved and the Group becomes cash generative.  

However, should the additional funding or milestone payments not be achieved by October 2010, the Group will need to seek alternative sources of finance. This condition indicates the existence of a material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern. The financial statements do not contain any adjustments that may be required should the Group be unable to continue as a going concern.

Whilst there are inherent uncertainties regarding the timing and magnitude of future revenue streams, the Directors believe that the actions proposed above enable them to continue to prepare the financial statements on a going concern basis.

The accounting policies set out below have been applied consistently throughout the Group and to all accounting periods presented for the purposes of the consolidated financial statements. 

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of IFRSs that have a significant effect on the Group financial statements and estimates with a significant risk of material adjustment in future years are disclosed in Note 2.

There are a number of new standards and interpretations issued and endorsed by the EU but not yet effective which may be applicable to the Group but which have not been applied in these Accounts, including IFRS 8 Operating Segments, revision to IAS 23 Borrowing Costs, revisions to IAS 1, revision to IFRS 2 Share Based Payments, revisions to IFRS 3 Business Combinations and revisions to IFRS 1 and IAS 27 Cost of Investment in a subsidiary. No endorsed standard is expected to have a material impact on the financial statements. All other endorsed standards and IFRICs have been reviewed by management and are not considered applicable for the Group's financial statements.

Basis of consolidation

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date control ceases.

All intra-group balance and transactions, including unrealised profits arising from intra-group transactions, are eliminated fully on consolidation.

Business combinations

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date.  

Business combinations that took place prior to 1 August 2006 have not been restated. The Group previously used merger accounting under UK GAAP to consolidate the results and assets of its subsidiary company, Syntopix Limited as the combination met the criteria of a group reconstruction. The Group has applied the exemptions of IFRS1 to not restate prior period acquisitions on transition to IFRS.

Revenue

Revenue is recognised when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, prices are fixed or determinable and there is a probability that economic benefits will flow to the Group. Certain revenues are generated from licensing and exclusivity agreements under which we grant third parties rights to certain of our products or technologies. Upfront payments and other similar non-refundable payments received under these agreements are recorded as deferred revenue and are recognised in the income statement over the performance period stipulated in the agreement. Non-refundable milestone payments which represent the achievement of a significant technical/regulatory hurdle in the research and development process, pursuant to collaborative agreements, are recognised as revenue upon the achievement of the specified milestone. The Group may also generate revenues from collaborative research and development as well as co-promotion arrangements. Such agreements may consist of multiple elements and provide for varying consideration terms, such as upfront, milestone and similar payments, which are complex and require significant analysis by management in order to determine the most appropriate method of revenue recognition.  

Royalty income is recognised on an accruals basis in accordance with the economic substance of the agreement and is reported as part of revenue.

Other revenues are recorded as earned or as the services are performed.

Segment reporting

A business segment is a distinguishable component of an enterprise that is engaged in providing an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business segments.  

Financial assets

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity. The Group's accounting policy for each category is a follows:

Fair value through profit or loss:  The Group does not currently have any derivative financial instruments.

Loans and receivables: These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are stated at their initial value less appropriate provisions for impairment. 

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the income statement. On confirmation that the trade receivable will not be collectible, the gross carrying value of the asset is written off against the associated provision.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet.

Cash and cash equivalents includes cash in hand and deposits held at call with banks.

Financial liabilities

The Group classes its financial liabilities into different categories, depending on the purpose for which the asset was acquired. The Group's accounting policies for each relevant category is as follows:

Fair value through profit or loss: The Group does not currently have any derivative financial instruments.

Other financial liabilities: Other financial liabilities include the following items:

Trade payables and other short term monetary liabilities, which are carried at initial value and do not carry interest.

Investments

Investments are held at cost less any provisions for impairment. 

Share capital

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity instruments.

Retirement benefits: Defined Contribution Schemes 

Contributions to defined contribution pension schemes are charged to the consolidated income statement in the year to which they relate.

Share-based payments 

The Group has applied the requirements of IFRS 2 Share-based payments. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments that were unvested as of 1 August 2006.

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition. 

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated income statement over the remaining vesting period.  

Where equity instruments are granted to persons other than employees, the consolidated income statement is charged with the fair value of goods and services received.

Internally Generated Intangible Assets (Research and Development Costs)

Expenditure on internally developed products is capitalised if it can be demonstrated that:

·	it is technically feasible to develop the product for it to be sold;
·	adequate resources are available to complete the development;
·	there is an intention to complete and sell the product;
·	the group is able to sell the product;
·	sale of the product will generate future economic benefits; and
·	expenditure on the project can be measured reliably.

Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products developed. The amortisation expense is included within the administrative expenses line in the consolidated income statement.

Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in the consolidated income statement as incurred.

Deferred taxation

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising from:

·	the initial recognition of goodwill;
·	the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profits; and
·	investments in subsidiaries and jointly controlled entities where the group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

·	the same taxable group company; or
·	different group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs. Items of property, plant and equipment are carried at depreciated cost.

Depreciation is provided on all items of property, plant and equipment so as to write off the carrying value of items over their expected useful economic lives. It is applied at the following rates:

Computer equipment:	3 years
Plant & machinery and Fixtures & fittings:	5 years

2. Critical Accounting Estimates and Judgements

The Group's accounting policies are set out in Note 1. The Directors consider that the key judgements and estimates made in the preparation of the consolidated financial statements are:

Impairment of non-current assets

Property, plant and equipment is depreciated over the useful lives of the assets. Useful lives are based on the management's estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness.  

Share-based payments

The Group has equity settled share-based remuneration schemes for employees. The fair value of share options is estimated by using the Black-Scholes valuation model, on the date of grant based on certain assumptions. These assumptions include, among others, expected volatility, expected life of the options and number of options expected to vest. 

Income taxes

The Group is recognising research & development tax credits receivable in the consolidated income statement in respect of the significant expenditure on research and development activity during the period. The amount recognised is an estimate of the amount which the Group believes it is entitled to claim. Until the claim is submitted to the tax authorities and the amounts are actually received there is a risk that the tax credit claim could be challenged by the tax authorities. The Group believes that the receivable for income tax repayments is appropriate based on its assessment of several factors including past experience and interpretations of tax law. To the extent that the final tax outcome is different from the amounts recorded, such differences will impact on the income tax expense in the period in which such determination is made.

Investment in subsidiaries

The Directors have made a judgement relating to the carrying value of the investments in subsidiary undertakings and related inter-company balances within the financial statements of the parent company. 

3. Earnings per share

Basic earnings per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.  

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume the conversion of all dilutive potential ordinary shares.  

The Company has one class of potentially dilutive ordinary shares: those share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year. However, due to losses incurred in the year there is no dilutive effect from the potential exercise of these share options.

	Loss for	Weighted	Loss per
	the period	average number	share
Basic and diluted loss per share	£	of shares	(pence)
Year ended 31 July 2009	(1,115,000)	7,690,636	(14.5p)
Year ended 31 July 2008	(1,403,000)	5,732,601	(24.5p)

4. Share capital 

	2009	2009		2008	2008
	Number	£000		Number	£000
Authorised:
Ordinary shares of 10p each	10,000,000	1,000		10,000,000	1,000
Issued and fully paid:
Ordinary shares of 10p each
At beginning of year	5,732,601	573		5,732,601	573
Issue of ordinary shares	1,985,230	199		-	-
At end of year	7,717,831	772		5,732,601	573

5. Events after the balance sheet date

On 1 August 2009 the trade and net assets of the subsidiary companies, Syntopix Limited and Syntopix Services Limited were hived up to the Parent Company, Syntopix Group plc as part of a group restructuring arrangement. There is no impact on the overall group financial position from this transaction. 

6. Publication of Annual Report and Accounts

In accordance with AIM Rule 20, Syntopix Group plc confirms that its Annual Report and Accounts for the year ended 31 July 2009 will shortly be sent to all shareholders and will then be available for download from the Group's website at www.syntopix.com.

7. Annual General Meeting

The Annual General Meeting of the Company will be held on Tuesday 2 February 2010 at 1.30pm, at the registered office, Institute of Pharmaceutical Innovation, Bradford, BD7 1DP. 

 

END

 

 

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