RNS Number:2975L
Theratase PLC
20 May 2003
For Immediate Release: 20 May 2003
Theratase plc
Interim Results for the six months ended 31 March 2003
Theratase plc, a world leader in the manufacture and supply of high quality
specialist enzymes and biochemicals to the diagnostic healthcare industries,
today announces its interim results for the six months ended 31 March 2003.
Highlights:
*Turnover down, but currently ahead of market expectations, at #3.20m
(2002: #3.77m)
*PBT of #1.17m (2002: #1.52m)
*Earnings per share better than anticipated for the half year at 2.29p per
share (2002: 3.44p)
*First payment of dividend arrears successfully made to preference
shareholders - amounting to #1.57m
*Net cash at 31 March 2003 #1.33m (2002: #2.17m)
*FDA recommend approval for key subsidiary facilities
*Successful completion of Phase I and IIa trials with alkaline phosphatase
by joint venture partner
Philip Percival, Non-Executive Chairman of Theratase, commenting on the results
said:
"The first six months have seen difficult trading conditions in our more
traditional diagnostic division which is set to continue through the coming
months - however your Board is greatly encouraged by the continued progress
Theratase is making with its specialist pharmaceutical intermediates. Alongside
partnerships already in place, we continue to explore exciting pharmaceutical
related, early stage opportunities both in the UK and Overseas and look forward
to reporting on progress here in the coming months."
- ENDS -
For further information, please contact:
Theratase
John Chesham, Managing Director Tel: +44 (0)1495 790 678
Colin Anderson, Finance Director Tel: +44 (0)20 7863 8819
Buchanan Communications
Nicola How / Louise Bolton Mobile: +44 (0)7956 597 099
Tel: +44 (0)20 7466 5000
Theratase plc
Interim Results for the Six Months Ended 31 March 2003
Financial Review
The Group has produced creditable results for the half year despite difficult
trading conditions which have, as expected, restricted growth. Profit before tax
was #1.17m (2002: #1.52m) on turnover of #3.20m (2002: #3.77m). These results
were boosted by the early receipt of a large order which had initially been
expected in the second half of the year. During the six-month period, a further
write-off of #0.24m (2002: #0.14m) was made of our investment in AM Pharma
Holdings BV ("AM Pharma"). This is the Group's joint venture which is developing
treatments and diagnostics for sepsis and infectious agents. The write off of
this investment has now largely been completed.
Earnings per share for the six months are 2.29p (2002: 3.44p), the tax rate in
the period having been affected by the AM Pharma write off which is not tax
deductible.
On 3 February, Theratase(R) successfully made its first payment of dividend
arrears to preference shareholders amounting to #1.57m. This was slightly above
the amount required under the rescheduling approved in 2000. Despite this, net
cash at 31 March 2003 was #1.33m (2002: #2.17m). Net assets at the same date
were #2.66m (2002: #2.89m). The second scheduled payment is due on 30 September
2003 subject to the Company having sufficient distributable profits on that
date. The payment will be made following the approval by shareholders at the
next Annual General Meeting of the audited accounts for the year ended 30
September 2003.
Operating Review
Turnover for the Group in the period continued to come from enzyme sales,
primarily to the diagnostic industry. During the period we have seen recovery in
the sales of glucose oxidase into the diabetes market. However in the near term
these are unlikely to return to the levels seen in the first half of 2001/02. In
the USA the Immunodiagnostics and traditional Clinical Chemistry market sectors
have been weak, partly due to an earlier than expected change in technology by a
key customer. On a broader level some customers are reducing stock levels to
ease their cash flow position. We anticipate this situation will improve in the
coming year.
We are delighted to inform you of encouraging progress being made with the
Group's therapeutic enzyme products. In February, our joint venture partner, AM
Pharma, in which Theratase(R) has an 8.92% shareholding, announced the
commencement of Phase I clinical trials for the treatment of sepsis. The trials
use Theratase's(R) lead enzyme Alkaline Phosphatase (AP), which is supplied
exclusively by our subsidiary, Biozyme Laboratories Limited(R).
Natural AP is thought to play an important role in the body's natural defences
against invading harmful bacteria. It does this by being able to detoxify
Lipopolysaccharides (LPS), the toxins released by bacteria on their break-down
which can cause life threatening reactions in patients with infections.
Post the period end we have been able to announce very encouraging Phase I and
IIa results for these trials. The Phase I trial demonstrated the safety of the
compound in healthy volunteers. The Phase IIa study, in volunteers who were
injected with low doses of LPS, showed that AP treatment reduced or eliminated
endotoxaemia symptoms and strongly inhibited plasma levels of inflammatory
markers. In this way valuable data about the efficacy of AP, which would
normally only be collected in Phase II/III clinical studies, was obtained at an
early stage of clinical development. Following these early indications of human
efficacy, full Phase II trials are set to begin in the second half of 2003.
At the end of February 2003, we announced that the inspector appointed by the
FDA had recommended approval of our GMP facilities and processes at Biozyme(R) for
the manufacture of the active pharmaceutical ingredient ("API"), Hyaluronidase.
Gaining FDA approval is crucial to the Group's strategy of maximising
opportunities in the supply of therapeutic enzyme products to the pharmaceutical
industry. The first use of the API is expected to be in a formulation for the
treatment of the ocular condition, vitreous haemorrhage. The facility is now
ready for full scale production of the API which is contingent on our US
customer, ISTA Pharmaceuticals Inc., receiving final FDA approval for its drug
Vitrase(R). In early April this year, the FDA issued an "approvable" letter to
ISTA. This good news should ultimately enable the product to receive final
clearance to market. An "approvable" letter generally indicates that a file is
substantially satisfactory and that there are no major issues or deficiencies
preventing eventual product approval. However, in this instance and before final
FDA approval is given, ISTA has been asked to carry out further analysis of the
clinical data obtained so far and may be required to do further clinical
studies. The scale of the further analysis will determine the length of time
involved before the product might obtain its final approval.
Outlook
The Group has continued to make good progress with its strategy of becoming a
clearly focused company providing specialist enzymes to the pharmaceutical /
diagnostic market. We are currently exploring a number of exciting early stage
opportunities both in the UK and Overseas, and we look forward to reporting on
the progress of these in the months to come. These projects, if successful, will
have the potential to produce significant shareholder value. However conditions
in our traditional diagnostic business are expected to continue to be
challenging throughout the remainder of this year, yet the Board remains
optimistic and looks forward to notifying the Market on the progress of our
projects.
Philip Percival John Chesham
Chairman Chief Executive
Consolidated profit and loss account
for the six months ended 31 March 2003 (unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2003 2002 2002
(unaudited) (unaudited)
#'000 #'000 #'000
Turnover - continuing operations 3,200 3,773 6,965
--------- --------- --------
Operating profit - continuing 1,195 1,499 2,436
operations
Interest receivable 31 26 69
Interest payable and similar
charges -
continuing operations (52) (6) (20)
--------- --------- --------
Profit on ordinary activities 1,174 1,519 2,485
before taxation
Tax on profit on ordinary (433) (483) (871)
activities --------- --------- --------
Profit for the financial period 741 1,036 1,614
Dividends proposed on non-equity - - (1,566)
shares
Additional finance costs of (143) (142) (284)
non-equity shares
Release of provision for - - 1,566
additional finance costs
--------- --------- --------
Retained profit for the financial 598 894 1,330
period ========= ========= ========
Earnings per ordinary share
(see note 2) 2.29p 3.44p 5.11p
--------- --------- --------
Adjusted earnings per ordinary
share
(see note 2) 3.22p 3.97p 6.97p
--------- --------- --------
Diluted earnings per ordinary
share
(see note 2) 2.25p 3.33p 4.96p
--------- --------- --------
Consolidated statement of recognised gains and losses
for the six months ended 31 March 2003 (unaudited)
The Group had no recognised gains or losses in either the current period or
preceding year other than the profit for the financial period reported in the
consolidated profit and loss account.
Consolidated balance sheet
at 31 March 2003 (unaudited)
31 March 2003 31 March 2002 30 September 2002
(unaudited) (unaudited)
#'000 #'000 #'000 #'000 #'000 #'000
Fixed Assets
Tangible fixed 989 871 928
assets
Investments - - -
------ ----- -----
989 871 928
Current assets
Stocks 1,046 992 976
Debtors 1,208 1,461 1,568
Cash at bank and in 1,375 2,207 2,489
hand ----- ----- -----
3,629 4,660 5,033
Creditors:
amounts falling due (1,819) (2,346) (3,712)
within one year ----- ----- -----
Net current assets 1,810 2,314 1,321
----- ----- -----
Total assets less 2,799 3,185 2,249
current liabilities
Creditors:
amounts falling due after more (142) (119) (156)
than one year
Provisions for liabilities and - (180) (177)
charges
----- ----- -----
Net assets 2,657 2,886 1,916
===== ===== =====
Capital and
reserves
Called up share 4,861 4,858 4,861
capital
Share premium 39 24 39
account
Profit and loss (2,243) (1,996) (2,984)
account ----- ----- -----
Shareholders' funds 2,657 2,886 1,916
===== ===== =====
Equity (1,613) (2,665) (2,211)
Non-equity 4,270 5,551 4,127
----- ----- -----
2,657 2,886 1,916
===== ===== =====
Consolidated cash flow statement
for the six months ended 31 March 2003 (unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2003 2002 2002
(unaudited) (unaudited)
#'000 #'000 #'000
Operating profit 1,195 1,499 2,436
Depreciation less amortization
of development grant 58 55 94
Increase in stocks (70) (23) (7)
Decrease/(increase) in debtors 360 (4) (111)
(Decrease)/increase in creditors (131) 54 73
Payments against amounts included
within provisions (177) (220) (221)
----- ----- -----
Net cash inflow from operating 1,235 1,361 2,264
activities
Return on investments and
servicing of finance (1,587) 20 51
Taxation (417) (374) (952)
Capital expenditure and financial (340) (146) (249)
investment
----- ----- -----
Net cash (outflow) / inflow before (1,109) 861 1,114
financing
Financing (5) (6) 5
Issue of shares for cash - 13 31
----- ----- -----
(Decrease)/increase in cash and
cash equivalents (1,114) 868 1,150
===== ===== =====
Reconciliation of net funds
for the six months ended 31 March 2003 (unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2003 2002 2002
(unaudited) (unaudited)
#'000 #'000 #'000
(Decrease)/increase in cash in (1,114) 868 1,150
the period
Cash inflow/(outflow) from 5 6 (5)
financing ----- ----- -----
Movement in net debt in the (1,109) 874 1,145
period
Net funds at the beginning of 2,441 1,296 1,296
the period ----- ----- -----
Net funds at the end of the 1,332 2,170 2,441
period ===== ===== =====
Segmental analysis
for the six months ended 31 March 2003 (unaudited)
Six months ended Six months ended Twelve months ended
31 March 2003 31 March 2002 30 September 2002
(unaudited) (unaudited)
Turnover Profit/(loss) Turnover Profit/(loss) Turnover Profit/(loss)
before interest before interest before interest
and taxation and taxation and taxation
#'000 #'000 #'000 #'000 #'000 #'000
By activity
Biozyme 3,200 1,462 3,767 1,830 6,965 2,906
Head Office (288) (311) (470)
------- ------- ------- -------- ------- -------
Total 3,200 1,174 3,767 1,519 6,965 2,436
continuing ------- ------- ------- -------- ------- -------
operations
By
geographical
destination
United 776 1,309 2,087
Kingdom
Other 596 651 1,159
European
Countries
North 1,498 1,480 3,175
America
Rest of the 330 327 544
World
------- ------- ------- -------- ------- -------
Total 3,200 3,767 6,965
continuing ------- ------- ------- -------- ------- -------
operations
Notes
1. Basis of preparation
The interim statement is unaudited and has been prepared on the basis of the
accounting policies set out on pages 25 to 26 of the group accounts for the year
ended 30 September 2002. The comparative figures for the financial year ended 30
September 2002 are derived from those accounts. Those accounts have been
reported on by the company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement under s237(2) or (3) of the Companies Act 1985.
2. Earnings per ordinary share
Earnings per ordinary share has been based on the profit for the period
attributable to equity shareholders (after appropriations in respect of
preference shares) of #598,000 (31 March 2002: #894,000, 30 September 2002:
#1,330,000) and 26,061,558 ordinary shares being the weighted average number of
shares in issue for the six months ended 31 March 2003 (31 March 2002:
25,971,558, 30 September 2002: 26,004,058). The adjusted earnings per ordinary
share has been calculated by adding back the provision for impairment of the
investment in AM-Pharma Holdings BV amounting to #240,000 (31 March 2002:
#140,000, 30 September 2002: #483,000) and the weighted average number of shares
in issue of 26,061,558 (31 March 2002: 25,971,558, 30 September 2002:
26,004,058).
The calculation of the diluted earnings per ordinary share has been based on the
weighted average of 26,575,973 (31 March 2002: 26,844,835, 30 September 2002:
26,802,661), which takes into account dilutive share options, and profit after
tax of #598,000 (31 March 2002: #894,000, 30 September 2002: #1,330,000).
3. Consolidated cash flow statement
Capital expenditure and financial investment is analysed as follows:
Six months Six months Year
ended ended ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Purchase of fixed assets and (340) (148) (270)
investment
Sale of fixed assets - 2 21
------- ------- -------
Total (340) (146) (249)
------- ------- -------
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