Veos PLC
31 October 2000
VEOS PLC
FINANCIAL RESULTS FOR THE 9 MONTHS TO 30TH JUNE 2000
SUMMARY
Pre-launch marketing activity, product development and regulatory work
contribute to Pre-Tax Loss of £1,552,000 in line with expectations
Cash position as anticipated with continued tight control of overheads and
costs
'Letter of Intent' signed with Boots The Chemists ('Boots') to list Oves(TM)
contraceptive cap for over the counter sales in 2001
Supply chain relationships completed with appointment of a UK packager,
Flexible Medical Packaging Ltd, to undertake packaging of all group products
Continued development of product range, including approval of European patents
for 'snap together', drug-loaded cap, and CE approval for conception cap
Rationalisation of Board for implementation phase and appointment in October
2000 of Rob Wilkinson as Chief Operating Officer, preceeded in May by the
appointment of Philip Sellwood (Director of Strategy of Marks & Spencer plc)
as a non-executive director
Commenting on the results, Peggy Czyzak-Dannenbaum, Chairman of Veos, said:
'We are pleased with the progress that has been made since the Company's
flotation last December. We have now secured a significant initial agreement
for over the counter sales of the Oves TM contraceptive cap with Boots, and
are focusing on fulfilling the potential that this entry to the UK market
provides.
At the same time, we are continuing to put in place the further efficacy
studies, distribution planning and regulatory preparation that are needed to
support our sales programme in France and, pending FDA approval, our proposed
launch into the United States. We look forward to exciting developments
ahead.'
For further information, please contact:
Peggy Czyzak-Dannenbaum, Chairman
Rob Wilkinson, COO
Veos plc Tel: 020 7643 2753
David Simonson
Melanie Toyne Sewell
Merlin Financial Communications Tel: 020 7606 1244
www.veos.co.uk or www.oves.com
Chairman's Statement
In my first Chairman's statement since admission of the Company's shares to
trading on the Alternative Investment Market of the London Stock Exchange, I
am delighted to report that we have made good progress in launching the Oves
(TM) product and in our aim to become a brand leader in the female healthcare
market.
During the nine month period to 30 June 2000, the Group incurred a Pre-Tax
loss of £1,552,000 (7.7p per share). In line with expectations, the Group has
not generated significant revenue in the period and the loss therefore
represents the costs principally of pre-launch marketing activity, product
development and regulatory work.
As announced on 20th October 2000, we have signed a 'Letter of Intent' with
Boots The Chemists ('Boots') to list the Oves(TM)contraceptive cap as one of
its products for over the counter ('OTC') sales in 2001. We are pleased to be
working with Boots which, as a leading pharmacy retailer, provides an ideal
distributor for our innovative product.
The positioning of the product for marketing and advertising is now complete
and will be used as a platform to enhance sales and brand awareness in both
the UK and France. We are currently negotiating a distribution contract with
a leading distributor of family planning and other medical devices in France.
We have recently contracted with a UK packager, Flexible Medical Packaging
Ltd, based in Lancaster, to undertake the packaging of all the Group's
products. The relationship completes the Group's supply chain ahead of the UK
product launch in 2001. Veos UK, our principal operating subsidiary, has
secured CE Marking and ISO 9002 certification for its quality control system.
As announced in March 2000, we have continued to develop our range of products
with the approval of a European patent for a 'snap together' version of our
drug-loaded cervical cap. We intend to develop applications for this medical
device through strategic alliances with commercial partners.
Board changes
On 16th May 2000, Rob Wilkinson was appointed to the Board and is now
Operations and Finance Director. Also in May, we were delighted to welcome to
the Board Philip Sellwood, Director of Strategy at Marks & Spencer plc, as a
non-executive director.
Having achieved our objectives for launching in the UK and the successful
positioning of the product both Elizabeth Stroebel and Linda McGoldrick have
left to pursue other commercial opportunities. On behalf of the Board, I
would like to thank both of them for their hard work in helping to achieve our
success to date.
Prospects
Your Board is focused on delivering profitable sales growth but we are also
keeping overheads tightly controlled against detailed budgets. These are
running currently at approximately £110,000 per month, but they will increase
as we embark upon our planned marketing and R&D expenditure. Plans are in
place for the launch of the OvesTM contraceptive cap exclusively through Boots
in the UK in 2001 and we also intend to complete a distribution agreement of
the OvesTM cap in France in the near future.
The Company is engaged in discussions with the Food & Drug Administration
('FDA') of the United States which, it is hoped, will lead to a timely
efficacy study in the United States. We are also preparing for efficacy
studies in the UK and France to supplement existing efficacy data. The
Directors are pleased to announce that European approval (the CE mark) has
been received for the Group's cervical cap for use in artificial insemination
procedures to aid conception ('the conception cap'). This product received FDA
approval as a prescription product in March 2000 and OTC regulatory approval
in the US is currently being sought. We intend to market the conception cap
OTC in kit form, comprising the cap, an ovulation predictor, a non-latex
condom and a pregnancy test, as an aid to couples trying to conceive. Having
secured the necessary regulatory authorisations for this product, we intend to
accelerate plans to bring the conception cap to market in targeted territories
and are conducting marketing studies to achieve this.
I look forward to the next six months and the exciting developments which lie
ahead for your company.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Note 6 months to 9 months to 9 months to
30 June 2000 30 June 2000 30 September 1999
Unaudited Unaudited Unaudited
£'000 £'000 £'000
Turnover 2 4 16
Cost of sales (2) (2) (11)
Administration expenses (766) (1,644) 678)
Operating loss - continuing (766) (1,642) (673)
operations
Interest receivable 110 112 -
Interest payable
and similar charges - (22) (37)
Loss on ordinary activities (656) (1,552) (710)
before taxation
Tax on loss on ordinary
activities - - -
Loss on ordinary activities (656) (1,552) (710)
after taxation
Dividends - on equity shares - - -
Retained loss for the period (656) (1,552) (710)
Loss per share 2 p p p
Basic and diluted (2.9) (7.7) (5.9)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
9 months to 9 months to
30 June 2000 30 September 1999
Unaudited Unaudited
£'000 £'000
Loss for the financial period (1,552) (710)
Group currency translation gain/(loss) (17) 5
Total recognised losses (1,569) (705)
relating to the period
CONSOLIDATED BALANCE SHEETS
At 30 June 2000 At 30 September 1999
Unaudited Unaudited
£'000 £'000
Fixed assets
Tangible assets 126 83
Current assets 31 29
Stocks
Debtors 151 64
Cash at bank and in hand 3,923 38
4,105 131
Creditors:
Amounts falling due within one year (337) (1,471)
Net current assets/(liabilities) 3,768 (1,340)
Net assets/(liabilities) 3,894 (1,257)
Capital and reserves
Called up share capital 2,282 1,366
Share premium account 4,802 -
Other reserve 4,100 3,098
Merger reserve (1,356) (1,356)
Profit and loss account (5,934) (4,365)
Equity shareholders' funds 3,894 (1,257)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
9 months to 9 months to
30 June 2000 30 September 1999
Unaudited Unaudited
£'000 £'000
Total recognised losses relating
to the period (1,569) (705)
Net proceeds of share issues 5,718 -
Capitalised loans and share issues
in Veos Limited prior to the share
for share exchange 1,002 129
129
Increase/(decrease) in shareholders' funds 5,151 (576)
Opening shareholders' fund (1,257) (681)
Closing shareholders' funds 3,894 (1,257)
1. BASIS OF ACCOUNTING
Veos plc was incorporated on 27 August 1999, and no trading activity was
undertaken between that date and 9 December 1999. On 9 December 1999, Veos plc
acquired 91% of the share capital of Veos Limited, a company incorporated in
Jersey, and its subsidiaries by way of a share for share exchange. The
remaining shares were purchased by Veos plc on the same terms shortly
thereafter.
The consolidated financial statements have been prepared using merger
accounting. Under merger accounting the results and cash flows are combined
from the beginning of the financial period and all comparatives are restated
on the combined basis. These interim financial statements consolidate the
financial statements of Veos plc, Veos Limited and its subsidiaries as though
they had been in existence with its present constitution.
The interim financial statements cover both the six month period to 30 June
2000 and the nine month period ending 30 June 2000, as the last results
reported were the interim financial statements for nine months ended 30
September 1999 included in the prospectus for the placing of shares in Veos
plc on the Alternative Investment Market. The year end for the Group is 31
December and hence future interim reports will cover the six month periods to
30 June.
The first statutory reporting period of the company is to be the 16 months
ended 31 December 2000.
2. LOSSES PER SHARE
6 months to 9 months to 9months to 30
30 June 2000 30 June 2000 September 1999
Unaudited Unaudited Unaudited
£'000 £'000 £'000
These have been calculated
on losses of (656) (1,552) (710)
The weighted average number of
shares used was:
Basic 22,850,535 20,060,732 11,957,102
There were no diluting factors in the period.
3. INTERIM REPORT
This interim report was neither audited nor reviewed by the auditors. It was
approved by the Board on 30 October 2000. It has been prepared using
accounting policies that are consistent with those adopted in the statutory
accounts for the year ended 31 December 1999 by Veos Limited and its
subsidiary undertakings (as disclosed in the Prospectus), and those to be
adopted in the statutory accounts for the Group for the year ended 31 December
2000.