Preliminary Results

RNS Number : 2203H

Medaphor Group PLC

12 March 2015

 



Medaphor Group plc

Preliminary results for the year ended 31 December 2014

HIGHLIGHTS

MedaPhor Group plc ("MedaPhor" or "the Company" or "the Group"), the global provider of advanced ultrasound education simulators for medical professionals, announces its first preliminary results following the Company's Admission to AIM on 27 August 2014.  Whilst the Company was not incorporated until 7 May 2014, it acquired MedaPhor Limited on 15 August 2014 and these preliminary results have been prepared as if MedaPhor Limited had been owned and controlled by the Company since MedaPhor Limited commenced trading.

Financial highlights

·      £4.7m fundraising and admission to AIM as MedaPhor Group plc (MED)

·      Sales increased 33% to £1.8m (2013: £1.4m)

·      Year end cash up to £2.9m from £0.2m at start of year

Operational highlights

·      Established US subsidiary, MedaPhor North America Inc.

·      Increased UK and US sales staff numbers to 9 personnel (2013: 2)  

·      Expanded existing international reseller network

·      Introduced new radiology and emergency medicine modules

·      Launched Cloud based service 

Commenting on the results, Riccardo Pigliucci, Chairman of MedaPhor said:

"This has been an excellent year for the Group.  We have raised significant funds that have been used to expand both the sales force in the UK and North America and grow our already impressive product portfolio.  The launch of the Cloud based services for ScanTrainer is particularly exciting and we look forward to growing the business globally in 2015."

A copy of this announcement is available on the Company's website: www.medaphor.com

CEO, MedaPhor Group plc	Stuart Gall Tel: [phone]
Nominated Advisor, Cenkos	Bobbie Hilliam Tel: [phone]
Corporate Broking, Cenkos	Julian Morse Tel:  [phone]
Media enquiries, Allerton Communications	Peter Curtain Tel: [phone]

CHAIRMAN'S STATEMENT

INTRODUCTION

I am delighted to present MedaPhor's first Preliminary Results as a publicly traded company, following our admission to AIM on 27 August 2014.  This was a landmark event for the Group, which we believe will provide us with the backing and visibility to deliver on our growth strategy and we are grateful to our new and existing investors for their support.  Simulation continues to be an exciting sector of medical training and we believe our products have the potential to make us a major player in this expanding global market.

FINANCIAL AND OPERATIONAL REVIEW

Summary results from continuing operations were:

	2014	2013
	£m	£m
Revenue	1.8	1.4
Gross profit	1.1	0.8
Gross margin	62%	61%
Loss before tax	(1.5)	(0.4)
Loss after tax	(1.5)	(0.3)
Cash at bank	2.9	0.2

Despite the inevitable impact of the AIM listing, revenue in 2014 increased overall by 33% compared to the prior year (2013: 85%) and we were very pleased by the contribution made by our wholly owned US subsidiary which was opened at the start of the year to expand sales in North America.  We now have 4 sales staff based in North America (2013: 1) and 5 in the UK (2013: 1).  We also secured agreements with additional reseller operations post year end to increase our representation in a number of key international markets.

During the year the Group continued to invest in research and development activities and expanded our products into the radiology and emergency medicine markets, with the successful launch of several new modules for our ScanTrainer Transabdominal simulator.

In addition to our already extensive offerings in Obstetrics & Gynaecology, we are now offering FAST (Focussed Assessment with Sonography for Trauma) modules for Emergency Medicine, Upper Abdomen modules for radiology and a number of new Super Assessment modules, that replicate the nature of real life scanning in the clinic by testing a trainee's ability to diagnose 10 randomly selected patient scenarios.

We continue to fund new developments, a number of which will be launched during 2015.

We recently launched our latest version of the ScanTrainer simulator system (v5.0) and connected our first customers to the Cloud.  v5.0 represents a significant product enhancement to ScanTrainer and the new cloud connectivity will also enable MedaPhor to develop additional cloud based products and services for our customers.

FUNDING AND CURRENT TRADING

Following the share exchange with MedaPhor Limited and the Company's Admission to AIM, which raised £4.7m before costs, the directors believe that the Group is well placed to fund its business expansion plans.  Sales in December 2014 beat all previous records, at close to £0.5m for the month, and while January and February have been typically less active, due to the timing of our customers' budget periods, we have visibility on significant potential orders to support management's expectations for the first half of 2015.  

Riccardo Pigliucci

Chairman

12 March 2014

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2014

	Notes	Year ended 30 December 2014	Year ended 31 December 2013
		£	£
REVENUE	3	1,804,146	1,351,923
Cost of sales		(679,405)	(528,705)
Gross profit		1,124,741	823,218
Administrative expenses		(2,629,878)	(1,218,312)
OPERATING LOSS BEFORE INCOME TAX		(1,505,137)	(395,094)
Finance costs		(3,532)	-
LOSS BEFORE INCOME TAX		(1,508,669)	(395,094)
Income tax credit	4	19,749	66,470
LOSS AND TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO SHAREHOLDERS		(1,488,920)	(328,624)
LOSS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO SHAREHOLDERS
Basic and diluted	5	(10.622)p	(3.055)p

All results derive from continuing activities.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2014

	Ordinary share capital	Share premium	Accumulated losses	Share based payment reserve	Merger reserve	Total equity attributable to shareholders
	£	£	£	£	£	£
Balance as at 1 January 2013	107,580	-	(1,144,026)	13,000	1,990,187	966,741
Comprehensive income for the year
Loss for the year	-	-	(328,624)	-	-	(328,624)
Contributions by and distributions to owners
Cost of share-based awards	-	-	-	47,000	-	47,000
Total contributions by and distributions to owners	-	-	-	47,000	-	47,000
Balance as at 31 December 2013	107,580	-	(1,472,650)	60,000	1,990,187	685,117
Comprehensive income for the period
Loss for the period	-	-	(1,488,920)	-	-	(1,488,920)
Contributions by and distributions to owners
Shares issued for cash	75,963	3,722,187	-	-	-	3,798,150
Shares issued in exchange for debt	17,700	867,300	-	-	-	885,000
Cost of raising finance	-	(269,580)	-	-	-	(269,580)
Shares issued on exercise of share options	120	2,160	-	-	-	2,280
Cost of share-based awards	-	-	-	75,000	-	75,000
Total contributions by and distributions to owners	93,783	4,322,067	-	75,000	-	4,490,850
Balance at 31 December 2014	201,363	4,322,067	(2,961,570)	135,000	1,990,187	3,687,047

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2014

			31 December 2014	31 December 2013
			£	£
NON CURRENT ASSETS
Intangible assets			360,284	344,063
Property, plant and equipment			221,286	146,861
			581,570	490,924
CURRENT ASSETS
Inventories			142,131	78,710
Trade and other receivables			798,819	396,573
Current tax assets			19,749	25,996
Cash and cash equivalents			2,866,612	224,112
			3,827,311	725,391
TOTAL ASSETS			4,408,881	1,216,315
CURRENT LIABILITIES
Trade and other payables			(691,834)	(506,198)
Provisions			(30,000)	(25,000)
TOTAL LIABILITIES			(721,834)	(531,198)
NET ASSETS			3,687,047	685,117

EQUITY
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Ordinary share capital		201,363	107,580
Share premium		4,322,067	-
Accumulated losses		(2,961,570)	(1,472,650)
Share based payment reserve		135,000	60,000
Merger reserve		1,990,187	1,990,187
TOTAL EQUITY		3,687,047	685,117

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2014

					Year ended 31 December 2014	Year ended 31 December 2013
					£	£
CASH FLOW FROM CONTINUING OPERATING ACTIVITIES
Loss before tax					(1,508,669)	(395,094)
Depreciation					104,467	47,671
Amortisation of intangible assets					167,356	125,540
Finance costs					3,532	-
Share-based payments					75,000	47,000
Operating cash flows before movement in working capital					(1,158,314)	(174,883)
Movement in inventories					(63,421)	(39,702)
Movement in trade and other receivables					(400,431)	(90,591)
Movement in trade and other payables					190,636	430,663
Cash (used in)/generated from operations					(1,431,530)	125,487
Income taxes received					25,996	40,474
NET CASH (USED IN)/GENERATED FROM OPERATING ACTIVITIES					(1,405,534)	165,961
	CASH FLOWS FROM INVESTING ACTIVITIES
	Purchase of property, plant and equipment			(178,892)			(170,643)
	Purchase of intangible assets			(183,577)			(256,558)
	NET CASH USED IN INVESTING ACTIVITIES			(362,469)			(427,201)
	CASH FLOWS FROM FINANCING ACTIVITIES
	Issue of new shares			3,800,430			-
	Issue and conversion of loan notes			885,000			-
	Share issue costs			(269,580)			-
	Finance costs paid			(5,347)			-
	NET CASH GENERATED FROM FINANCING ACTIVITIES			4,410,503			-
	NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS			2,642,500			(261,240)
	CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			224,112			485,352
	CASH AND CASH EQUIVALENTS AT END OF PERIOD			2,866,612			224,112

NOTES TO THE PRELIMINARY RESULTS

for the year ended 31 December 2014

1.     BASIS OF PREPARATION AND ACCOUNTING POLICIES

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, IFRIC interpretations, the AIM Rules, and the Companies Act 2006.

While the financial information included in this preliminary announcement has been computed in accordance with IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The accounting policies used in the preparation of this preliminary announcement have been applied consistently to all periods presented. They are also consistent with those in the Group's statutory financial statements for the year ended 31 December 2014 which have yet to be published. The preliminary results for the year ended 31 December 2014 were approved by the Board of Directors on 11 March 2015.

The financial information set out in this preliminary announcement does not constitute the Group's statutory financial statements for the year ended 31 December 2014 but is derived from those financial statements which were approved by the Board of Directors on 11 March 2015. The auditors have reported on the Group's statutory financial statements and the report was unqualified and did not contain a statement under section 498 (2) or 498 (3) Companies Act 2006. The statutory financial statements for the year ended 31 December 2014 have not yet been delivered to the Registrar of Companies and will be delivered following the Company's Annual General Meeting.  The comparative figures are derived from statutory financial statements of Medaphor Limited for the year ended 31 December 2013 which carried an unqualified audit report, did not contain a statement under section 498 (2) or 498 (3) Companies Act 2006 and have been filed with the Registrar of Companies.

The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.  The Group financial statements are presented in pounds Sterling.

2.     BASIS OF CONSOLIDATION

The consolidated preliminary results incorporate the results of the Company and its subsidiary undertakings.  The Company was incorporated on 7 May 2014.

MedaPhor Group plc acquired MedaPhor Limited on 15 August 2014 through a share for share exchange that does not meet the definition of a business combination.  It is noted that such transactions are outside the scope of IFRS 3 and there is no other guidance elsewhere in IFRS covering such transactions.  IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, requires that where IFRS does not include guidance for a particular issue, the directors may also consider the most recent pronouncements of other standard setting bodies that use a similar conceptual framework to develop accounting standards when developing an appropriate accounting policy.

     In this regard, it is noted that the UK Accounting Standards Board has, in issue, an accounting standard covering business combinations (FRS 6) that permits the use of merger accounting principles for such transactions.  The directors have therefore chosen to adopt these principles and the preliminary results have been prepared as if Medaphor Limited had been owned and controlled by the Company throughout the year ended 31 December 2014 and the year ended 31 December 2013.  Accordingly, the assets and liabilities of MedaPhor Limited have been recognised at their historical carrying amounts, the results for the periods prior to the date the Company legally obtained control have been recognised and the financial information and cash flows reflect those of MedaPhor Limited.

3.     SEGMENTAL ANALYSIS

The following table provides an analysis of the Group's revenue by type (Distribution or Direct Sales) and geography based upon the location of the Group's customers. 

Year ended 31 December 2014	Distribution £	Direct Sales £	Total £
United Kingdom	-	685,051	685,051
North America	-	714,567	714,567
Rest of World	304,635	99,893	404,528
	304,635	1,499,511	1,804,146

Year ended 31 December 2013	Distribution £	Direct Sales £	Total £
United Kingdom	-	673,734	673,734
North America	17,360	246,388	263,748
Rest of World	283,317	131,124	414,441
	300,677	1,051,246	1,351,923

4.     TAXATION ON ORDINARY ACTIVITIES

		Year ended 31 December 2014 £	Year ended 31 December 2013 £
R&D tax credit		(19,749)	(66,470)

5.     LOSS PER SHARE

		Year ended 31 December 2014 £	Year ended 31 December 2013 £
Earnings:
Loss for the purposes of basic and diluted loss per share (LPS) being the net loss attributable to the owners of the Company		(1,488,920)	(328,624)
		No.	No.
Number of shares:
Weighted average number of shares for the purpose of basic and LPS		14,017,387	10,758,000

At 31 December 2014 and 2013 there were share options outstanding which could potentially have a dilutive impact but were anti-dilutive in both years.

6.  SHARE CAPITAL

	31 December 2014
	No.	£
Authorised	Unlimited	Unlimited
Allotted, issued and fully paid
Ordinary Shares of 1p each	20,136,300	201,363

On incorporation (7 May 2014) the share capital of the Company was £1, comprising 1 Ordinary Share of £1.00. 

On 14 August 2014 shareholders of the Company passed a resolution to sub-divide each issued and to be issued Ordinary Share of £1.00 each into 100 shares of 1 pence each, following which the Company issued and allotted 10,758,000 shares pursuant to an agreement to exchange 2,000 shares in the Company as consideration for each issued share in MedaPhor Limited.

On 27 August 2014 pursuant to the Company's admission to trading on AIM, the Company placed 9,366,300 new Ordinary Shares of 1 pence each at 50 pence per share.   1,770,000 of these new Ordinary Shares were issued in exchange for loan notes in MedaPhor Limited totalling £885,000.  The total share issue costs were £584,213 of which £314,633 relating to the proportion of the costs of admission attributable to the pre-admission shareholders has been expensed to the Statement of Comprehensive Income and £269,580 relating to the proportion of the costs of admission attributable to the new Ordinary Shares has been netted off against the share premium arising on the new Ordinary Share issue.

On 19 December 2014 following the exercise of employee share options the Company issued a further 12,000 Ordinary Shares of one pence each at 19 pence per share.

 

END

 

 

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