AorTech Announces Year End Pr

RNS Number : 3179Q

Aortech International PLC

02 August 2010

 



AorTech International plc

("the Company" or "the Group")

Preliminary Results for the year ended 31 March 2010

AorTech International plc (AIM: AOR), the biomaterials and medical device development company, today announces its preliminary results for the year ended 31 March 2010.

Financial highlights (vs. prior year)

· Group turnover increased from £1.3m to £1.4m

· Pre-tax loss increased from £1.2m to £1.9m

· Cash reserves decreased from £4.2m to £2.9m

Jon Pither, Chairman of the Company, commented: "Going beyond the simple financial figures that have been reported, the Board believes that your Company has passed the evolutionary point, the tipping point, with an established widely applicable and respected material, which has achieved  regulatory approval, and that this will now lead to rapidly rising direct and indirect revenues.  The executive team, capable of realising this opportunity, is largely in place.   Therefore subject to unforeseen events the Company's financial performance will begin to show substantial reward for the years of patient research and development."

- Ends -

For further information contact:

AorTech International plc 

Frank Maguire, Chief Executive                                                   Tel: + 1 801 201 4336 

AorTech International plc 

Sarah Price, Investor Relations                                                    Tel: + 1 801 649 4163 

e-mail [e-mail]

Evolution Securities Limited

Bobbie Hilliam / Chris Clarke                                                       Tel: [phone] 

Note to Editors:

About AorTech International plc

Listed on AIM in London, AorTech International Plc wholly owns AorTech Biomaterials in Melbourne, Australia and AorTech Medical Devices 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 more than 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

During the year to 31 March 2010, Group revenue increased by £0.1m over that achieved in the previous financial year, rising to £1.4m. The majority of the revenue was received during the second half of the year, as I indicated in my interim report was likely to be the case.  Again this year, the Group revenue was achieved through a combination of sales of bulk material and components as well as through licencing fees, royalty income and milestone payments.  Operating expenses increased from £3,032,000 to £3,727,000, with much of this increase being directly attributable to the strengthening over the course of the period of the Australian Dollar, being the currency of our manufacturing base, with Pounds Sterling being the financial results reporting currency.  Together with the reduction in interest receivable, made inevitable by the lower rates than those previously obtainable, the loss before taxation was £1.9m as compared with £1.2m in the previous year.  The net cash balances at 31 March 2010 were £2.9m, which are expected to continue to provide sufficient resources to support the Group's ongoing operations and our development plans.

Operational Highlights of the Financial Year

Shareholders who have followed the Company's development in recent years are aware of the lengthy timescales for commercialisation of medical materials and devices.  Progress always seems to be frustratingly slow but I should like to assure you that the past year has seen substantial advances.  Our range of polymer materials in the Elast-Eon™ and ECSil™ family are now in use, or in a number of  development programmes, in the following areas:

·      Cardiac Rhythm management

·      Neurostimulation

·      Cardiac Surgery

·      Spinal Disc

·      Bilary Drainage

·      Urology catheters

·      Urology Stents

·      Morbid Obesity

·      Blood Glucose Monitoring

By the end of this year we expect to have more than six of these applications in development programmes or in human use. Our product is already in human use in several million patients and additional human use is gathering momentum. 

It is also encouraging that a number of medical device companies wish us to augment material supply by actually manufacturing components or complete devices.  Headers for cardiac rhythm management and neurostimulation are examples. Going beyond the simple financial figures that have been reported, the Board believes that your Company has passed the evolutionary point, the tipping point, with an established widely applicable and respected material, which has achieved  regulatory approval, and that this will now lead to rapidly rising direct and indirect revenues.  The executive team, capable of realising this opportunity, is largely in place.   Therefore subject to unforeseen events the Company's financial performance will begin to show substantial reward for the years of patient research and development.

The polymer business has continued to grow. Tonnage has more than doubled over the prior year and composite pricing has seen improvements related to mix, new licences and price increases programmed into existing licences. A new licence has been announced in the urology field; other licences in ophthalmic and morbid obesity fields are projected in the near term. Our new polymer product, ECSil™, essentially a super silicone, is enjoying early success in customer qualification programmes for application areas which include pacing and neurostimulation leads, spinal disc and breast implant, amongst others. After suffering the unanticipated loss of a key raw material supplier in the 2^nd quarter of 2010, the Company resumed polymer shipments after a 5 week period in which it successfully completed its long term programme for producing this raw material in-house. With this supply disruption behind us, we expect a resumption of our history of perfect customer delivery and quality performance. In general, prospects for the bulk polymer business remain bright as a number of customer qualification programmes continue to mature into new licence agreements and other existing agreements, some of which are royalty bearing.

Strategy and Current Trading

The greatest potential for near term revenue growth comes from our component and device development segments. The U.S. $32.8 million co-development programme is continuing to progress satisfactorily. The final phase of the trial for the polymer heart valve in the previously announced circulatory support application is expected to conclude in the current financial year.  I anticipate being able to inform you of a projected date for the first human use of this important device in my next statement. The state of this programme is such that the internal valve development and pilot manufacturing phases are essentially complete and management is evaluating other device opportunities, some of them joint ventures in other areas.

The most exciting component development in our portfolio is the use of our polymers and proprietary reaction injection molding (RIM) process for the production of headers for cardiac rhythm management (CRM) and neurostimulation devices.  Also in my next statement I hope to be celebrating the first successful human use of this technology in a clinical setting. In addition to new licensees who prefer to source their Elast-Eon™ and ECSil™ components from the Company at the outset of our business with them, we are also seeing existing polymer accounts responding favourably to our proposals to manufacture their components, thereby facilitating the simplification of their own supply chains.

Management foresee increasing revenue streams over the short and medium term, and with the Group's infrastructure being of sufficient capacity to enable increased output without significant further capital outlay. This anticipated increase is expected to be reflected in an improved bottom line and cash reserves position.

Finally, I should once again wish take this opportunity to thank each member of our staff for their continued efforts and commitment to the Company, and to thank our shareholders for their ongoing support during the year.  Your Board is confident that the Group has the technology, resources and skills that will fully capitalise upon the opportunities that are now developing and expanding from the efforts of the past, and thereby to build shareholder value.

Jon Pither

Chairman

Consolidated income statement

		Year ended  31 March 2010		Year ended  31 March 2009
		£000		£000
Revenue		1,362		1,259
Other income - grants received		306		234
Cost of sales		(382)		(124)
Administrative expenses		(2,082)		(1,754)
Other expenses - development expenditure		(1,121)		(1,040)
Other expenses - amortisation of intangible assets		(142)		(114)
Operating loss		(2,059)		(1,539)
Finance income		136		290
Loss before taxation		(1,923)		(1,249)
Taxation		-		-
Loss attributable to equity holders of the parent company		(1,923)		(1,249)
Loss per share
Basic and diluted - (pence per share)		(39.79)		(25.84)

Consolidated statement of comprehensive income

		Year ended  31 March 2010		Year  ended 31  March 2009
		£000		£000
Loss for the year		(1,923)		(1,249)
Other comprehensive income:
Exchange differences on translating foreign operations		1,204		267
Income tax relating to other comprehensive income		-		-
Other comprehensive income for the year, net of tax		1,204		267
Total comprehensive income for the year, attributable
to equity holders of the parent		(719)		(982)

Consolidated balance sheet
			31 March 2010		31 March 2009
			£000		£000
Assets
Non current assets
	Property, plant and equipment		718		702
	Intangible assets		1,424		1,257
Total non current assets			2,142		1,959
Current assets
	Inventories		150		150
	Trade and other receivables		859		436
	Cash and cash equivalents		2,885		4,178
Total current assets			3,894		4,764
Total assets			6,036		6,723
Liabilities
Current liabilities
	Trade and other payables		(623)		(512)
Total current liabilities			(623)		(512)
Non current liabilities
	Other non current liabilities		-		(79)
Total non current liabilities			-		(79)
Total liabilities			(623)		(591)
Net assets			5,413		6,132
Equity
	Issued capital		12,082		12,082
	Share premium		2,340		2,340
	Other reserve		(2,003)		(2,003)
	Foreign exchange reserve		1,862		658
	Profit and loss account		(8,868)		(6,945)
Total equity attributable to equity holders of the parent			5,413		6,132

 

Consolidated cash flow statement
			Year ended  31 March 2010		Year ended  31 March 2009
			£000		£000
Cash flows from operating activities
	Group loss after tax		(1,923)		(1,249)
Adjustments for:
	Depreciation of property, plant and equipment		258		207
	Amortisation of intangible assets		142		114
	Interest income		(136)		(290)
	Deferred income released		(79)		(64)
	Increase in trade and other receivables		(423)		(124)
	Decrease in inventories		-		90
	Increase/(decrease) in trade and other payables		111		(73)
Net cash flow from operating activities			(2,050)		(1,389)
Cash flows from investing activities
	Purchase of property, plant and equipment		(102)		(234)
Interest received			136		290
Net cash flow from investing activities			34		56
Net decrease in cash and cash equivalents			(2,016)		(1,333)
Foreign exchange differences			723		163
Cash and cash equivalents at beginning of year			4,178		5,348
Cash and cash equivalents at end of year			2,885		4,178

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 31 March 2008		12,082		2,340		(2,003)		391		(5,696)		7,114
Transactions with owners		-		-		-		-		-		-
Loss for the year		-		-		-		-		(1,249)		(1,249)
Other comprehensive income
Exchange difference on translating foreign operations		-		-		-		267		-		267
Income tax relating to components of other comprehensive income		-		-		-		-		-		-
Total comprehensive income for the year		-		-		-		267		(1,249)		(982)
Balance at 31 March 2009		12,082		2,340		(2,003)		658		(6,945)		6,132
Transactions with owners		-		-		-		-		-		-
Loss for the year		-		-		-		-		(1,923)		(1,923)
Other comprehensive income
Exchange difference on translating foreign operations		-		-		-		1,204		-		1,204
Income tax relating to components of other comprehensive income		-		-		-		-		-		-
Total comprehensive income for the year		-		-		-		1,204		(1,923)		(719)
Balance at 31 March 2010		12,082		2,340		(2,003)		1,862		(8,868)		5,413

 

1.   Basis of preparation

The financial information in this preliminary announcenent has been prepared under the historical cost convention 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 2010.

2.   Loss per share

The basic loss per Ordinary share of 39.79p (2009: 25.84p) is calculated on the loss of the Group of £1,923,000 (2008: £1,249,000) and on 4,832,778 (2009: 4,832,778) 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 434 of the UK Companies Act 2006. The summarised consolidated balance sheet at 31 March 2010, the summarised consolidated income statement, the summarised consolidated statement of comprehensive income, the summarised consolidated statement of changes in equity and the summarised consolidated cash flow statement for the year then ended have been extracted from the Group's statutory financial statements for the year ended 31 March 2010 upon which the auditors' opinion is unqualified and did not contain a statement under either sections 498(2) or 498(3) of the Companies Act 2006. The audit reports for the year ended 31 March 2009 did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory financial statements for the year ended 31 March 2009 have been delivered to the Registrar of Companies. The 31 March 2010 accounts were approved by the directors on 30 July 2010, but have not yet been delivered to the Registrar of Companies.

4.   Notice of Annual General Meeting

Notice is hereby given that the thirteenth Annual General Meeting of AorTech International Plc will be held in the Staple and Gray's Inn Room of the Renaissance London Chancery Court Hotel, 252 High Holborn, London, WC1V 7EN on Monday, 27 September 2010 at 12:00 noon.

5.   Posting and availability of accounts

The annual report and accounts for the year ended 31 March 2010 will be sent by post to all registered shareholders on 24 August 2010.  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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