Half Yearly Report

RNS Number : 7367Z

Venn Life Sciences Holdings PLC

22 September 2015

 

Venn Life Sciences Holdings Plc

("Venn" or the "Company")

Interim Results for 6 months ended 30 June 2015

Venn Life Sciences (AIM: VENN), a growing Clinical Research Organisation (CRO) providing clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, announces its unaudited interim results for the six months ended 30 June 2015.

Financial Highlights

·     Revenue of €4.259m (H1 2014: €1.512m)

·       EBITDA loss of €0.04m (H1 2014: €0.91m)

·     Loss before tax of €0.26m (H1 2014: €0.99m)

·     Cash and cash equivalents of €1.096m (As at 30th June 2014: €0.119m)

Operational Highlights

·     €9m in new contract wins during H1 brings greater scale to business

·     Successful on going recruitment to meet work load sees resource base growing to 120 personnel

·     Management team strengthened with appointment of new CFO in June 2015

·     Successful integration of Cardinal Systems enables Venn to bid for and secure larger scale projects

Post period-end

·     Proposed acquisition of Kinesis Pharma BV for up to €6.5m

·     Placing to raise c. £3.57m (gross) through the issue of 16,231,311 new Ordinary shares at 22p

·     The acquisition highly differentiates Venn in its market place and enables the company to offer a complete range of services across the non-clinical and clinical spectrum

Commenting on the Group's outlook, David Evans, non-Executive Chairman of Venn, said:

"We have seen greater scale develop in Venn. The rate of repeat business continues to rise and this coupled with investments in the areas of business development and systems infrastructure should see the business poised for extended growth. The acquisition of Kinesis will enable earlier and longer engagement with clients as we can now offer services across a broader range of areas. The Venn Kinesis combination affords an opportunity to cross-sell services to an expanded client base and greatly differentiate the business."

Enquiries:

Venn Life Sciences Holdings Plc
David Evans, Non-Executive Chairman	Tel: [phone]
Tony Richardson, Chief Executive Officer	Tel: [phone]
Zeus Capital (Nominated Adviser and Co-Broker)
Ross Andrews/Andrew Jones	Tel: [phone]
Dominic Wilson/Alex Davies	Tel: [phone]
Hybridan LLP (Co-Broker) Claire Louise Noyce	Tel: [phone]
Walbrook PR Ltd	Tel: [phone] or [e-mail]
Paul McManus	Mob: [phone]
Lianne Cawthorne	Mob: [phone]

 

Chairman's Statement

Dear Fellow Shareholder,

The first half of 2015 has seen the Company continue the good momentum generated in 2014. The successful integration of Cardinal Systems has been a key ingredient in enabling Venn to bid for and secure larger scale projects utilising the full range of capabilities. The investment in infrastructure and systems in the past year has given the business a solid base and enabled management to efficiently manage what has been a period of rapid growth in the business.

Financial Results

Fee income for the first six months of 2015 was €4.259m, up 182% on the first six months of 2014 (H1 2014: €1.512m). The EBITDA deficit for the period was €0.04m compared to €0.911m for the first half of 2014.

The significant improvement in the reported operating results for the business is largely driven by continued revenue growth and improved project margins due to greater efficiency in resource utilisation and project management. As the business continues to scale, margins should continue to improve.

Operational Review

A key catalyst for growth in this period has been the strong return on our business development efforts over the past 12 months. We have successfully profiled and targeted a client category that perfectly fits our size and capabilities and through the provision of high quality services to that group we have been rewarded with significant repeat business and increasing contract size.

At the beginning of this year we committed to strengthen our infrastructure and provide a solid base for further business growth. We have implemented a number of systems initiatives that should conclude by the year end, providing the business with a more scalable platform.

A significant amount of our success in the first half-year has come from the Biotechnology sector. This sector has received record amounts of funding over the past two years leaving it well funded and under pressure to deploy funds into development programmes. Our current scale and capabilities leave us ideally positioned to meet the requirements of this sector and we have tailored a suite of services focussed specifically on the particular requirements of this group.

In particular, we announced two significant contract wins with clients in this sector during the first half of the year for €2m and €4.1m respectively. Combined with other client wins during this period we secured a total of €9m of new contracts during the six months ended 30 June 2015. Whilst all of this work started in the first half we expect to benefit from the full contribution from these contracts in the second half and beyond.

Board changes

We were also very pleased to welcome Jonathan Hartshorn to the Board as Chief Financial Officer in June. Jonathan is a Chartered Accountant with over 18 years' experience in financial management roles, both as a consultant and as Head of Finance, across a range of industries including a number of large global pharmaceutical businesses.

New Developments and Outlook

We have broadened our business development base with the recruitment of an additional resource targeting Germany, Austria and Switzerland (DAC) and before year-end we expect to make a further business development appointment in the USA. This strengthening of the business development should contribute to the continued strong growth in revenues.

The acquisition of Kinesis Pharma affords the opportunity to develop Venn as a higher value proposition. The combined Venn Kinesis business will be highly differentiated in our market place and we expect will generate greater opportunities for earlier and longer ownership of client relationships. Kinesis brings further scale and capability to Venn and will help accelerate business profitability. 

Our technology innovation division Innovenn continues to make good progress with initial sales of Labskin now achieved and exploratory licensing discussions underway regarding Clarogel.

Overall I am pleased with the strong progress achieved in this half year. Continued project execution to high standards, the on-going strengthening of the resource base and the addition of Kinesis will see the company well positioned to deliver profits and free cash-flows in subsequent periods.

David Evans

Chairman

22 September 2015

 

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2015

		Unaudited		Unaudited		Audited
		6 months ended		6 months ended		Year ended
		30 June		30 June		31 December
		2015		2014		2014
		€'000		€'000		€'000
Continuing operations
Revenue		4,259		1,512		4,883
Administrative expenses		(4,476)		(2,469)		(6,650)
Operating loss		(217)		(957)		(1,767)
Depreciation and amortisation		(176)		(26)		(187)
Exceptional items		-		(20)		(47)
EBITDA before exceptional items		(41)		(911)		(1,533)
Finance income		-		1		9
Finance costs		(42)		(31)		(71)
Loss before income tax		(259)		(987)		(1,829)
Income tax credit/(charge)		-		1		20
Loss for the period		(259)		(986)		(1,809)
Currency translation differences		(39)		16		8
Total comprehensive loss for the period		(298)		(970)		(1,801)
Loss per ordinary share		€		€		€
Basic and diluted		(0.01)		(0.04)		(0.06)

 

Consolidated Statement of Financial Position

As at 30 June 2015

		Unaudited		Unaudited		Audited
		As at		As at		As at
		30 June		30 June		31 December
		2015		2014		2014
		€'000		€'000		€'000
Assets
Non-current assets
Property, plant and equipment		196		71		194
Intangible assets		3,170		1,895		2,820
Investments		31		31		31
Total non-current assets		3,397		1,997		3,045
Current assets
Trade and other receivables		2,627		1,079		2,097
Income tax recoverable		-		29		32
Cash and cash equivalents		1,096		317		806
Total current assets		3,723		1,425		2,935
Total assets		7,120		3,422		5,980
Equity attributable to owners
Share capital		127		112		112
Share premium account		8,072		5,443		5,483
Group re-organisation reserve		(541)		(541)		(541)
Reverse acquisition reserve		45		45		45
Foreign currency reserves		39		8		-
Retained earnings		(3,557)		(3,294)		(3,297)
Total equity		4,185		1,773		1,802
Liabilities
Non-current liabilities
Deferred consideration		-		55		-
Borrowings				-		99
Total non-current liabilities		-		55		99
Current liabilities
Trade and other payables		2,456		1,293		3,302
Deferred taxation		271		16		271
Deferred consideration		71		87		213
Borrowings		137		198		293
Total current liabilities		2,935		1,594		4,079
Total liabilities		2,935		1,649		4,178
Total equity and liabilities		7,120		3,422		5,980

 

Consolidated Statement of Cash Flows

For the year ended 30 June 2015

		Unaudited	Unaudited	Audited
		6 months ended	6 months ended	Year ended
		30 June	30 June	31 December
		2015	2014	2014
		€'000	€'000	€'000
Cash Flow from operating activities
Loss before income tax		(259)	(987)	(1,829)
Adjustments:
- Depreciation & Amortisation		176	26	187
- Foreign currency movement		(13)	2	25
- Net finance costs		41	30	62
Changes in working capital
- Trade and other receivables		(530)	(423)	(892)
- Trade and other payables		(845)	115	1,453
Cash used in operations		(1,430)	(1,237)	(994)
Interest paid		(41)	(18)	(54)
Income tax received/(paid)		32	23	20
Net cash used in operating activities		(1,439)	(1,232)	(1,028)
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired		-	-	(307)
Purchase of property, plant and equipment (PPE)		(506)	(40)	(99)
Proceeds from sale of PPE		-	-	5
Purchase of investments		-	-	-
Interest received		-	1	9
Net cash used in investing activities		(506)	(39)	(73)
Cash flow from financing activities
Proceeds from issuance of ordinary shares		2,605	1,169	1,194
Payment of deferred consideration		(142)	-	(154)
Financing from non-controlling interests		-	-	800
Repayments on borrowings		(46)	-	(40)
Net cash generated by financing activities		2,417	1,169	1,800
Net increase /(decrease) in cash and cash equivalents		472	(102)	380
Cash and cash equivalents at beginning of year		596	216	216
Exchange gain on cash and cash equivalents		28	5	-
Cash and cash equivalents at end of period		1,096	119	596

Cash and cash equivalents include the following for the purposes of the statement of cash flows:

		Unaudited	Unaudited	Audited
		6 months ended	6 months ended	Year ended
		30 June	30 June	31 December
		2015	2014	2014
		€'000	€'000	€'000
Cash and cash equivalents		1,096	317	806
Bank overdrafts		-	(198)	(210)
Cash and cash equivalents		1,096	119	596

 

Consolidated Statement of Changes in Shareholders' Equity

	Share capital	Share premium	Group re-organisation reserve	Reverse acquisition reserve	Foreign currency reserve	Retained earnings	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000
At 1 January 2014	102	3,431	(541)	45	(8)	(2,308)	721
Changes in equity for 6 months ended 30 June 2014
Total loss for the period	-	-	-	-	-	(986)	(986)
Currency translation differences	-	-	-	-	16	-	16
Total comprehensive loss for the period	-	-	-	-	16	(986)	(970)
Proceeds from shares issued (net of expenses)	10	2,012					2,022
At 30 June 2014	112	5,443	(541)	45	8	(3,294)	1,773
Changes in equity for 6 months ended 31 December 2014
Total loss for the period	-	-	-	-	-	(547)	(547)
Currency translation differences	-	-	-	-	(8)	-	(8)
Total comprehensive loss for the period	-	-	-	-	(8)	(547)	(555)
Proceeds from shares issued (net of expenses)	-	40	-	-	-	-	40
At 31 December 2014	112	5,483	(541)	45	0	(3,841)	1,258
Changes in equity for 6 months ended 30 June 2015
Total loss for the period	-	-	-	-	-	(259)	(259)
Currency translation differences	-	-	-	-	(39)	-	(39)
Total comprehensive loss for the period	-	-	-	-	(39)	(259)	(298)
Proceeds from shares issued (net of expenses)	15	2,590	-	-	-	-	2,605
At 30 June 2014	127	8,073	(541)	45	(39)	(4,100)	3,565

NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS

1.              General information and basis of presentation

Venn Life Sciences Holdings Plc is a company incorporated in England and Wales. The Company is a public limited company listed on the AIM market of the London Stock Exchange. The address of the registered office is 4 Lombard Street, London, EC3V 9HD.

The Group's principal activity continues to be that of a Clinical Research Organisation (CRO) providing a suite of consulting and clinical trial services to pharmaceutical, biotechnology and medical device organisations. 

The financial information in these interim results is that of the holding company and all of its subsidiaries. It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2014 and which will form the basis of the 2015 financial statements except for a number of new and amended standards which have become effective since the beginning of the previous financial year. These new and amended standards are not expected to materially affect the Group.

The financial information presented herein does not constitute full statutory accounts under Section 434 of the Companies Act 2006 and was not subject to a formal review by the auditors. The financial information in respect of the year ended 31 December 2014 has been extracted from the statutory accounts which have been delivered to the Registrar of Companies. The Group's Independent Auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the half years ended 30 June 2015 and 30 June 2014 is unaudited and the twelve months to 31 December 2014 is audited.

2. Loss per share

(a) Basic                                              

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period.

	Unaudited		Unaudited		Audited
	6 months ended		6 months ended		Year ended
	30 June		30 June		31 December
	2015		2014		2014
Loss attributable to equity holders of the Company (€'000)	189		1,001		1,533
Weighted average number of Ordinary Shares in issue	33,733,046		25,126,212		26,960,835
Basic loss per share	€0.01		€0.04		€0.06

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential ordinary Shares. No share options or warrants outstanding at period end were dilutive and all such potential ordinary shares are therefore excluded from the weighted average number of ordinary shares for the purposes of calculating diluted earnings per share.

3.            Dividends

There were no dividends provided or paid during the six months.

4.            Press

A copy of this announcement is available from the Company's website, being www.vennlifesciences.com.  If you would like to receive a hard copy of the interim report please contact the Venn Life Sciences Holdings  Plc offices on [phone] to request a copy.

 

END

 

 

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