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 19^th 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: [phone]
Andrew Shepherd, Chief Executive
Kieron Harbinson, Group Finance Director Jag Grewal, Group Sales and Marketing Director
Seymour Pierce Group	Tel: [phone]
Mark Percy (Corporate Finance)	www.seymourpierce.com
David Banks/Katie Ratner (Corporate Broking)
Walbrook PR Limited	Tel: [phone]
Paul McManus Lianne Cawthorne	Mob: [phone] or [e-mail] Mob: [phone] or [e-mail]

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 19^th 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

 

END

 

 

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