AorTech Announces Interim Res

RNS Number : 2426Y

Aortech International PLC

20 December 2010

 



AorTech International Plc ("AorTech" or the "Company")

Interim Results

AorTech International Plc (AIM: AOR) the biomaterials and medical device development company, today announces its unaudited interim results for the six months ended 30 September 2010.

CHAIRMAN'S STATEMENT

I am pleased to report that during the first half of the Financial Year 2010/11, the AorTech Group has continued to achieve technical and commercial progress.

FINANCIAL REVIEW

During the six month period, Group revenue rose to £674,000 from the £191,000 recorded during the corresponding period of the previous Financial Year.  Operating expenses for the half-year increased by 9% to £1.82m; this included £693,000 of development expenditure (H1 2009: £515,000) and £116,000 amortisation of intangible assets (H1 2009: £108,000).  The loss after tax for the six months was £1.01m, a reduction of £364,000 against the £1.38m loss figure recorded during the corresponding period of the previous year.  

CURRENT OPERATIONS

An announcement by St. Jude Medical on 15 December 2010 informing doctors of its plan to phase out all other lead types other than those insulated with Optim™ (Elast-Eon™) on the basis of 44 months of clinical usage and a greater than 80% reduction in abrasion related failures is a powerful endorsement and validation of the superb clinical performance of AorTech polymers. More generally, our polymer business has continued to make commercial and technical progress with the increasing number of evaluations of our already widely-used polymer Elast-Eon™ and our new product, ECSil™. This has occurred through the addition of new customers such as Teleflex Incorporated who are expected to add significant volumes with their urologic catheter application, as regulatory approvals are granted and manufacturing lines scale up during 2011. Even more encouraging is the recent announcement of the first human use of our pacemaker / neurostimulation header technology. Our proprietary header technology is an important facet of our burgeoning component business which we see as having revenue potential several times greater than our base polymer business in the medium term.

Our component business is leveraging the clincal success of our polymer systems as well as our proprietary small part reaction injection moulding process (RIM) in customer evaluations of spinal disc, cardiac surgery, intramedullary nail and vascular graft products.

Progress also continues to be made with the use of our polymer heart valve application in the Syncardia total artificial heart (TAH2). A successful animal trial was recently conducted in Paris which validated the performance of our polymer heart valve ('PHV') in the artificial heart application.  Remaining pre-clinical testing is anticipated to be completed in the first quarter of 2011 and first human use of the PHV in the artificial heart is expected in the second half of 2011.  A futher application of this PHV technology, which has been licensed to a separate customer, continues to progress.

Jon Pither - Chairman

-Ends-

For further information please contact:

AorTech International plc

Frank Maguire, Chief Executive

Tel: + 1 801 201 4336

Evolution Securities
Bobbie Hilliam / Chris Clarke

Tel: [phone]

AorTech International plc

Sarah Price, Investor Relations

Tel: + 1 801 550 4349

e-mail [e-mail]

ABOUT AORTECH

AorTech develops and manufactures biostable, implantable polymers, including Elast-Eon™ and ECSil™, the world's leading long-term implantable co-polymers.  With more than 3 million implants and over four years of successful clinical use, AorTech polymers are currently used in cardiology, orthopaedic, urological and gastroenterological applications, including pacing leads, cardiac cannulae and stents.  Devices manufactured from AorTech polymers have numerous US FDA PMA approvals, 510k's, CE Marks, Australian TGA and Japanese Ministry of Health approvals.

Elast-Eon™ and ECSil's™ biostability is comparable to silicone while exhibiting excellent mechanical, blood contacting and flex-fatigue properties. Our polymers can be processed using solution casting, ERIM and conventional thermoplastic extrusion and molding techniques. AorTech provides a range of materials in a variety of application-specific formulations for use in medical devices and components.

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
Six months ended 30 September 2010
	(Unaudited)	Six months to 30 Sept 2010		Six months to 30 Sept 2009		Twelve months to 31 March 2010
		£000		£000		£000
Revenue		674		191		1,362
Other income - grants received		80		49		306
	Cost of sales	(167)		(117)		(382)
	Administrative expenses	(841)		(924)		(2,082)
	Other expenses - development expenditure	(693)		(515)		(1,121)
	Other expenses - amortisation of intangible assets	(115)		(108)		(142)
Operating loss		(1,062)		(1,424)		(2,059)
	Finance income	48		46		136
Loss before taxation		(1,014)		(1,378)		(1,923)
	Taxation	-		-		-
Loss for the financial period		(1,014)		(1,378)		(1,923)
Loss per share (basic and diluted) - pence		(20.98)		(28.51)		(39.79)

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
		Six months    to 30 Sept 2010		Six months           to  30 Sept  2009		Twelve months          to  31 March 2010
		£000		£000		£000
Loss for the period		(1,014)		(1,378)		(1,923)
Other comprehensive income:
	Exchange differences on translating foreign operations	11		(415)		1,204
	Income tax relating to other comprehensive income	-		-		-
Other comprehensive income for the period, net of tax		11		(415)		1,204
Total comprehensive income for the period, attributable to equity holders of the parent		(1,003)		(1,793)		(719)

CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
(Unaudited)		30 Sept 2010		30 Sept 2009		31 March 2010
		£000		£000		£000
Assets
Non current assets
	Property, plant and equipment	673		753		718
	Intangible assets	1,369		1,357		1,424
Total non current assets		2,042		2,110		2,142
Current assets
	Inventories	121		165		150
	Trade and other receivables	615		202		859
	Cash and cash equivalents	2,241		3,517		2,885
Total current assets		2,977		3,884		3,894
Total assets		5,019		5,994		6,036
Liabilities
Current liabilities
	Trade and other payables	(609)		(550)		(623)
Total current liabilities		(609)		(550)		(623)
Non current liabilities
	Other non current liabilities	-		(46)		-
Total non current liabilities		-		(46)		-
Total liabilities		(609)		(596)		(623)
Net assets		4,410		5,398		5,413
Equity
	Issued capital	12,082		12,082		12,082
	Share premium	2,340		2,340		2,340
	Other reserve	(2,003)		(2,003)		(2,003)
	Foreign exchange reserve	1,873		1,302		1,862
	Profit and loss account	(9,882)		(8,323)		(8,868)
Equity shareholders' funds		4,410		5,398		5,413

CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT
(Unaudited)		Six months to 30 Sept 2010		Six months to 30 Sept 2009			Twelve months to 31 March 2010
		£000		£000			£000
Cash flows from operating activities
	Group loss after tax	(1,014)		(1,378)			(1,923)
Adjustments for:
	Depreciation of property, plant and equipment	101		120			258
	Amortisation of intangible assets	115		108			142
	Interest income	(48)		(46)			(136)
	Deferred income released	(42)		(33)			(79)
	Decrease/(increase) in trade and other receivables	244		234			(423)
	Decrease/(Increase) in inventories	29		(15)			-
	(Decrease)/Increase in trade payables	(14)		38			111
Net cash flow from operating activities		(629)		(972)			(2,050)
Cash flows from investing activities
	Purchase of property, plant and equipment	(48)		(51)			(102)
	Interest received	48		46			136
Net cash flow from investing activities		-		(5)			34
Net cash flow from financing activities		-		-			-
Net decrease in cash and cash equivalents		(629)		(977)			(2,016)
Foreign exchange differences		(15)		316			723
Cash and cash equivalents at beginning of period		2,885		4,178			4,178
Cash and cash equivalents at end of period		2,241		3,517			2,885

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
(Unaudited)		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 2009		12,082		2,340		(2,003)		658		(6,945)			6,132
Changes in equity for first half of FY 2009/10
Exchange difference on translation of foreign operations		-		-		-		644		-			644
Net expense recognised directly in equity		-		-		-		644		-			644
Loss for the period		-		-		-		-		(1,378)			(1,378)
Total comprehensive income for the period		-		-		-		644		(1,378)			734
Balance at 30 September 2009		12,082		2,340		(2,003)		1,302		(8,323)			5,398
Changes in equity for second half of FY 2009/10
Exchange difference on translation of foreign operations		-		-		-		560		-			560
Net income recognised directly in equity		-		-		-		560		-			560
Loss for the period		-		-		-		-		(545)			(545)
Total comprehensive income for the period		-		-		-		560		(545)			15
Balance at 31 March 2010		12,082		2,340		(2,003)		1,862		(8,868)			5,413
Changes in equity for first half of FY 2010/11
Exchange difference on translation of foreign operations		-		-		-		11		-			11
Net income recognised directly in equity		-		-		-		11		-			11
Loss for the period		-		-		-		-		(1,014)			(1,014)
Total comprehensive income for the period		-		-		-		11		(1,014)			(1,003)
Balance at 30 September 2010		12,082		2,340		(2,003)		1,873		(9,882)			4,410

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

These condensed consolidated interim financial statements are for the six months ended 30 September 2010, and have been prepared with regard to the requirements of IAS 34 on "Interim Financial Reporting".  They do not include all of the information required for full financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2010.

These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and effective at 31 March 2011 or are expected to be adopted and effective at 31 March 2011. They were approved for issue by the Board of Directors on 9 December 2010.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.

The financial information for the six months ended 30 September 2010 and the comparative figures for the six months ended 30 September 2009 are unaudited and have been prepared on the basis of the accounting policies set out in the consolidated financial statements of the Group for the year ended 31 March 2010.  This financial information does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.  The financial statements for the year ended 31 March 2010, prepared under IFRS, received an unqualified audit report, did not contain statements under sections 498(2) and 498(3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.

Loss per share has been calculated on the basis of the result for the period after tax, divided by the weighted average number of ordinary shares in issue in the period of 4,832,778.  The comparatives are calculated by reference to the weighted average number of ordinary shares in issue which were 4,832,778 for the period to 30 September 2009 and 4,832,778 for the year ended 31 March 2010.

2.  SEGMENTAL REPORTING
The principal activity of the AorTech International Plc Group currently is the development and exploitation of a range of innovative biomaterials.
All revenue during the first six months of financial year 2010/11 originated in Australia.
(Unaudited)
		Six months to 30 Sept 2010		Six months to 30 Sept 2009		Twelve months to 31 March 2010
		£000		£000		£000
Analysis of revenue by destination
Geographical segments
	United Kingdom	3		4		29
	Australia	-		-		2
	USA and Rest of the World	671		187		1,331
		674		191		1,362
Analysis of result - operating loss
Geographical segments
	United Kingdom	(205)		(168)		(356)
	Australia	(604)		(1,026)		(1,234)
	USA and Rest of the World	(253)		(230)		(469)
		(1,062)		(1,424)		(2,059)

3. ADDITIONS TO AND AMORTISATION OF INTANGIBLE ASSETS
The following table shows the significant additions to and amortisation of intangible assets
	(unaudited)		Intellectual property
			£000
	At 1 April 2009		1,257
	Exchange rate adjustment		208
	Amortisation		(108)
	At 30 September 2009		1,357
	Exchange rate adjustment		101
	Amortisation		(34)
	At 1 April 2010		1,424
	Exchange rate adjustment		60
	Amortisation		(115)
	At 30 September 2010		1,369

Corporate information and advisers

Directors

Jon Pither non-Executive Chairman

Frank Maguire Chief Executive

Eddie McDaid non-Executive Director

Dr Stuart Rollason non-Executive Director

Gordon Wright non-Executive Director

Company Secretary

David Parsons ACIS

Registered Office

C/o Brodies LLP

2 Blythswood Square

Glasgow G2 4AD

Head Office

Prestige Travel Suite

Barclays Bank House

81-83 Victoria Road

Surbiton

Surrey  KT6 4NS

web:  www.aortech.com

email: [e-mail]

Nominated Adviser and Broker

Evolution Securities Limited

100 Wood Street

London EC2V 7AN

Registrars

Equniti Limited

1st Floor
34 South Gyle Crescent
South Gyle Business Park
Edinburgh EH12 9EB

Independent Auditor

Grant Thornton UK LLP

Statutory Auditors

Chartered Accountants

Regent House

80 Regent Road

Leicester LE1 7NH

Registered in Scotland, Company No.170071

Interim results will be circulated to Shareholders and copies of the announcement will be made available from the Company's registered office. Dealings permitted on Alternative Investment Market (AIM) of the London Stock Exchange.

 

END

 

 

IR TLBTTMBIBTBM