AorTech Announces Final Resul

RNS Number : 0578W

Aortech International PLC

22 July 2009

 



    AorTech International plc 

('AorTech' or the 'Company')

 Results for the year ended 31 March 2009 

AorTech International plc (AIM: AOR) the biomaterials and medical device development company, today announces its results for the year ended 31 March 2009.

Financial Highlights (vs. prior year)
   • Group turnover decreased from £1.5m to £1.3m 
   • Pre tax loss remained at £2.1m
   • Cash reserves decreased from £5.3m to £4.2m 

- Ends -

For further information please contact:

AorTech International plc	Tel: + 1 801 201 4336
Frank Maguire, Chief Executive
Evolution Securities Bobbie Hilliam Chris Clarke	Tel: [phone]
AorTech International plc Sarah Price, Investor Relations	Tel: + 1 801 649 4163 e-mail [e-mail]

Notes to Editors:

About AorTech International plc


Listed on AIM in London, AorTech International plc wholly owns AorTech Biomaterials based in Melbourne, Australia and AorTech Medical Devices based in Salt Lake City, UT, USA. AorTech Biomaterials was formed in July 1997 to develop and commercialise Elast-Eon™, a highly useful and biostable co-polymer in the medical device and drug delivery fields.


AorTech's Elast-Eon technology is the product of a decade of fundamental research into biologically stable materials. Elast-Eon materials are patented, high silicone content, polyurethane co-polymers which exhibit unparalleled biological and mechanical performance.


AorTech is firmly focused on the development of this material with the aim of providing a wide range of high performance Elast-Eon materials in a variety of application specific formulations and densities, for use in medical devices.

CHAIRMAN'S STATEMENT

I am pleased to report to you on another year of progress for the Group.

Financial Review  

Group revenue for the year ended 31 March 2009 was £1.3m, a decrease of £0.2m in the figure achieved in the prior twelve month financial reporting period. Operating expenses were however reduced by £93,000 from £3,125,000 in the corresponding period last year to £3,032,000. After allowing for grants received, the loss before taxation was £1.2m, the same as for the year ended 31 March 2008.  Licensing fees, bulk material and components are reflected in this year's reported revenues. Interest received on our cash deposits increased, notwithstanding the general global lowering of interest rates, and the Group benefited from the strengthening of the Australian currency due to the location of the majority of the Group's assets there.

The slight decreased level of income generated during the period compared to last year should not divert attention from the very considerable progress achieved during the year, namely the qualification of our materials and manufacturing capability for a rapidly increasing range of applications. We have also been successful in expanding and initiating customer relationships that should deliver strong income and profit growth in the future. New licence agreements for applications in vascular connectors, vascular stents and circulatory support pumps have been entered into and existing licences in lead insulation and arterial/venous cannula have been expanded during the period.  Our revenue was generated from 21 different accounts, but the greater part of our income continues to arise from the licence fees and milestone payments. There will therefore continue to be significant fluctuations in our revenue during the current year as a result of these major lump sum payments.

The effect of the global economic crisis has had a minor but measurable effect on our industry. This impact is limited to a reduction in new programmes at existing companies and the ability of early stage companies to obtain cash to fund their own development programmes. We are happy to report that the Group continues to have adequate cash reserves for the immediate future and beyond. The net cash balances at 31 March 2009 were £4.2m, which we expect will provide adequate financial resources to support the Group's ongoing operations and development plans. The number of shares in issue remained at 4,832,778 during the course of the financial year ended 31 March 2009.

Strategy and Current Trading

Implant numbers and commensurate polymer volume continued to grow at an accelerating pace during the period. Actual implant numbers are now in excess of one million which equates to several million patient years of reliable Elast-Eon™ device performance. In each of our licences we require our customers to report to us any adverse clinical results and with almost three years of implant history there have been no such reports involving any Elast-Eon™ components from anywhere in the world. Our factory has maintained its perfect delivery and quality performance for another year. Shareholders have the right to be proud of the Melbourne facility and its staff.

Perhaps the most exciting progress has come in the development and supply of Elast-Eon™ components and the utilisation of our proprietary processing methods to produce certain types of next generation orthopædic and cardiology components to our customers' specification. In the coming year we project that our highest growth area will be in the production of Elast-Eon™ components for ventricular assist, vascular occlusion, various coatings and in particular, cardiac pacing and neurostimulation headers. Each of these markets are of high value and we believe that Elast-Eon™ provides advantages over existing technologies that will enable AorTech and its Licensees to gain substantial market share.

We recently announced our entry into the supply of material and manufacture of headers for pacemakers and neurostimulation devices. We have signed our first licence agreement for two products and have high expectation for growth in this area.  

Operational Highlights of the Financial Year

• The US$32.8 million co-development programme for new products announced in July 2007 continues to proceed on plan and has expanded into related product areas providing revenues for the next period.

• AorTech has advanced into Elast-Eon™ header manufacturing through our first licence agreement.  The header application relates to component parts for implantable pacemakers and neurostimulation devices.  This has been rapidly followed by the supply of implant-quality components, accelerating our partners' programmes towards first human use in this application. 

• As announced, St Jude Medical elected to extend their exclusivity period for the use of our polymers in their pacing lead application. A new set of annual maintenance payments related to this development are now incorporated into our cash forecasts.

• Breast implant patents continue to move through their examination phase and the Group has concluded that with the global downturn of elective cosmetic surgeries it will maintain its breast implant patent portfolio but suspend in-house development efforts until such time as the plastic surgery market recovers.

• The development of a new biostable polymer, Ecsil, permitting softer formulations and improved strength, further cements AorTech's position as the leading supplier of high performance polymers to the medical long-term implant market. This product is in a number of customer evaluations and will be formally launched in Q3 2009. It will play a role in our breast implant development. 

Outlook

Looking forward, the business is increasingly utilising the co-development of Elast-Eon™ components and the manufacture of these components to drive top line revenue. These projects have already proved of great interest to our customers. Our specific advantage is an ability to process Elast-Eon™ polymers in ways that are unique and of high value to numerous customer-based product development programmes.

In calendar year 2010 we are expecting first human use of devices incorporating Elast-Eon™ headers together with a major expansion of an existing licence along with multiple licences and regulatory approvals for urological applications. New orthopædic licences for both bulk polymer and for component supply are also anticipated within this window. In addition, we will see the clinical use of Elast-Eon™ in a critical long-term cardiac surgery implant.

These developments are in line with strategic expectations, and we believe that upon realisation they will create a substantial increase in shareholder value.

Jon Pither

Chairman

Consolidated income statement

				Year ended  31 March 2009		Year ended  31 March 2008
				£000		£000
		Note
Revenue				1,259		1,484
Other income - grants received				234		268
Cost of sales				(124)		(205)
Administrative expenses				(1,754)		(1,789)
Other expenses - development expenditure				(1,040)		(1,023)
Other expenses - amortisation of intangible assets				(114)		(108)
Operating loss				(1,539)		(1,373)
Finance income				290		214
Loss before taxation				(1,249)		(1,159)
Taxation				-		-
Loss attributable to equity holders of the parent company				(1,249)		(1,159)
Loss per share
Basic and diluted - (pence per share)		2		(25.84)		(25.84)

Consolidated balance sheet
				31 March 2009		31 March 2008
				£000		£000
Assets
Non current assets
	Property, plant and equipment			702		640
	Intangible assets			1,257		1,302
Total non current assets				1,959		1,942
Current assets
	Inventories			150		240
	Trade and other receivables			436		312
	Cash and cash equivalents			4,178		5,348
Total current assets				4,764		5,900
Total assets				6,723		7,842
Liabilities
Current liabilities
	Trade and other payables			(512)		(581)
Total current liabilities				(512)		(581)
Non current liabilities
	Other non current liabilities			(79)		(147)
Total non current liabilities				(79)		(147)
Total liabilities				(591)		(728)
Net assets				6,132		7,114
Equity
	Issued capital			12,082		12,082
	Share premium			2,340		2,340
	Other reserve			(2,003)		(2,003)
	Foreign exchange reserve			658		391
	Profit and loss account			(6,945)		(5,696)
Equity shareholders' funds				6,132		7,114

Consolidated cash flow statement
				Year ended  31 March 2009		Year ended  31 March 2008
				£000		£000
Cash flows from operating activities
	Group loss after tax			(1,249)		(1,159)
Adjustments for:
	Depreciation of property, plant and equipment			207		185
	Amortisation of intangible assets			114		108
	Interest income			(290)		(214)
	Deferred income released			(64)		(29)
	Loss on disposal of property, plant and equipment			-		18
	(Increase)/decrease in trade and other receivables			(124)		62
	Decrease/(increase) in inventories			90		(151)
	(Decrease)/increase in trade and other payables			(73)		41
Net cash flow from operating activities				(1,389)		(1,139)
Cash flows from investing activities
	Purchase of property, plant and equipment			(234)		(312)
Interest received				290		214
Net cash flow from investing activities				56		(98)
Cash flows from financing activities
	Proceeds from issue of share capital, net of issue costs			-		4,896
Net cash flow from financing activities				-		4,896
Net (decrease)/increase in cash and cash equivalents				(1,333)		3,659
Foreign exchange differences				163		209
Cash and cash equivalents at beginning of year				5,348		1,480
Cash and cash equivalents at end of year				4,178		5,348

Consolidated statement of changes in equity
		Share capital		Share premium account			Other reserve			Foreign exchange reserve			Profit and loss account			Total equity
		£000		£000			£000			£000			£000			£000
Balance at 1 April 2007		9,526		-			(2,003)			(25)			(4,537)			2,961
Exchange difference on translation of foreign operations		-		-			-			416			-			416
Net income recognised directly in equity		-		-			-			416			-			416
Loss for the year		-		-			-			-			(1,159)			(1,159)
Total recognised income and expense for the year		-		-			-			416			(1,159)			(743)
Issue of share capital (net of issue costs)		2,556		2,340			-			-			-			4,896
Balance at 31 March 2008		12,082		2,340			(2,003)			391			(5,696)			7,114
Exchange difference on translation of foreign operations		-		-			-			267			-			267
Net income recognised directly in equity		-		-			-			267			-			267
Loss for the year		-		-			-			-			(1,249)			(1,249)
Total recognised income and expense for the year		-		-			-			267			(1,249)			(982)
Balance at 31 March 2009		12,082		2,340			(2,003)			658			(6,945)			6,132

1. Basis of preparation

The financial information in this preliminary announcement has been prepared under the historical cost convention except for certain financial instruments which are carried at fair value, and in compliance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as adopted by the European Union as at 31 March 2009.

2. Loss per share

The basic loss per Ordinary share of 25.84p (2008: 25.84p) is calculated on the loss of the Group of £1,249,000 (2008: £1,159,000) and on 4,832,778 (2008: 4,484,875) equity shares, being the number of shares in issue during the year. The diluted loss per share does not differ from the basic loss per share as the exercise of share options would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.

3. Preliminary announcement

The summary accounts set out above do not constitute statutory accounts as defined by Section 240 of the UK Companies Act 1985. The summarised consolidated balance sheet at 31 March 2009, the summarised consolidated income statement, the summarised consolidated cash flow statement and the summarised consolidated statement of changes in equity for the year then ended have been extracted from the Group's statutory accounts for the year to 31 March 2009 upon which the auditor's opinion is unqualified, and did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985.  The statutory accounts for the year ended 31 March 2009 were approved by the Directors on 20 July 2009, but have not yet been delivered to the Registrar of Companies.

4. Notice of Annual General Meeting

Notice is hereby given that the twelfth Annual General Meeting of AorTech International plc will be held in the Mansfield Room of the Marriott Hotel Chancery Court, 252 High Holborn, London WC1V 7EN on 16 September 2009 at 12:00 noon.

5.  Posting and availability of accounts

The annual report and accounts for the year ended 31 March 2009 will be sent by post to all registered shareholders on 21 August 2009.  Additional copies will be available for a month thereafter from the Company's Surbiton office.  Alternatively, the document may be viewed on, or downloaded from, the Company's website: www.aortech.com.

 

END

 

 

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