Mediwatch plc. Interim Results for the six months to 30 April 2013

Transcription

1 3 June 2013 Mediwatch plc Interim Results for the six months to 30 April 2013 Mediwatch plc ("Mediwatch", "the Company" or "the Group", AIM: MDW), the innovative urological diagnostic company, is pleased to publish its interim results for the six months ended 30 April Financial Highlights Sales revenues of 4,911,000 (H1 2012: 5,084,000) Gross Margin increases by 35,000 despite lower sales Operating Profit of 161,000 (H ,000) EBITDA of 311,000 (H1 2012: 245,000) Profit before Taxation up 210% at 121,000 (H1 2012: 39,000) Operational Highlights Successful launch of New Clinic+ Urodynamics system, NANO Portable UDX system, Mediwatch Procedure Couch and Venus Pelvic Floor device, which were well received at the European Association of Urology annual conference and exhibition in Milan in April and the American Urological Association annual conference and exhibition in San Diego in May Restructuring of UK sales to deliver the same effectiveness with lower cost New distribution contracts signed in the USA Strong sales growth of capital goods in the USA New Distributors signed in Latin America PSAwatch is continuing positively with potential for large scale work-place screening Successful ISO 13485:2003 and CMDCAS renewal Regulatory approvals in China and Latin America are in progress Omer Karim, Mediwatch Chairman commented "The Board is encouraged with the results for the first half of the 2013 financial year; in particular it is pleasing to see that the cost reductions have firmly benefited the bottom line. With new product launches well underway and more to come later in the year; the Group is positioned for a positive second half" Enquiries Mediwatch plc Tel: +44 (0) Dr Philip Stimpson, Chief Executive / Mark Hughes, Chief Financial Officer SP Angel Corporate Finance LLP Nomad and broker Tel: +44 (0) Ewan Leggat / Laura Littley Editors Notes: Mediwatch plc: Innovative Diagnostic Solutions Mediwatch is a leader in its field. The Company is continually striving to develop and market faster, simpler and less invasive diagnostic products to save lives and restore quality of life for people with a variety of urological conditions. Founded in 1995, Mediwatch ( has developed a range of medical equipment for the diagnosis of urological disorders. The business focuses its design skills towards diagnostic products that can be used across the medical profession. Overview

2 Whilst overall sales have been flat compared to last year the cost reductions made both in product cost of sales leading to higher gross margin as well as in lower selling and administration expenses has resulted in a profit before tax increase of 210% over the 2012 half year. Mediwatch's vision for the future is to develop affordable equipment for the treatment of conditions in its targeted clinical areas. The new product launches planned for 2013 have started well. The first of these a new urodynamic range of Clinic and Encompass, the new Nano, a new procedure couch and the tablet Portaflow were well received at European Association of Urology meeting in Milan in April and the American Urologists Association annual conference and exhibition in San Diego in May. There is more to come later in the year. Trading In the six month period to 30 April 2013, Group turnover was 4.9 million, (H1 2012: 5.1 million). The Group has seen the continuing effects of the US economy emerging from the global slowdown ahead of other markets with the US business showing good growth in revenues and it now accounts for some 55% (51% H2 2012) of Group revenues. Revenue in the UK (which services Europe and the Rest of the world) has declined and, following the failed attempt to partner with Genesis in an attempt to improve these sales, the UK sales team has been restructured to reduce cost with minimal impact on the team s effectiveness and the UK profitability has been enhanced. The product mix experienced during the first half of the 2013 financial year was also similar to that experienced in the first half of The Group achieved an EBITDA of 311,000 for the six months to 30 April 2013 (H1 2012: 245,000). Profit is very slightly ahead of the Board s expectations at this stage. Cash flow was down due to increasing working capital requirement in the USA from the increasing sales. Additional debt funding has also been taken on in the UK to support the Research and Development effort. UK, Europe and ROW Operations Highlights from the UK operations include: On budget performance in profit despite lower sales PSAwatch continues to gain momentum Restructuring of UK sales to deliver the same effectiveness with lower cost Successful ISO 13485:2003 and CMDCAS renewal US Operations Highlights from the US operations include: Strong sales growth, 13% increase on the first half of 2012 Gross Margin percentage higher than last year Savings on selling and administration expenses over 2012 New distribution contracts signed Strong sales growth of capital goods New Distributor agreements signed in Latin America and Canada Research and Development Expenditure on research and development, including capitalised costs, was 263,000 (H1 2012: 363,000) during the six months to 30 April The main spend being on: Development of a new cart system Upgrade of product software to latest standards Producing the products which were launched at the European Association of Urology annual conference and exhibition in Milan in April and the American Urologists Association annual conference and exhibition in San Diego in May

3 Management and employees The Board would like to take this opportunity to again thank all employees for their hard work and contribution in achieving the continuing success of the business. Current trading and outlook The Group is currently trading just above management's budgets and we expect to meet market expectations for the year. Consolidated Income Statement for the six months ended 30 April months 6 months 12 months Revenue 4,911 5,084 10,091 Cost of sales (2,895) (3,103) (6,136) Gross profit 2,016 1,981 3,955 Administrative expenses (1,930) (1,926) (3,876) Other income Exceptional items - (50) (88) Profit from operating activities Net finance expenses (40) (39) (63) Profit before taxation Taxation - - (11) Profit for the period attributable to the equity shareholders Earnings per share (p) - basic and diluted 0.09p 0.03p 0.06p All of the activities of the Group are classified as continuing. Consolidated Statement of Comprehensive Income for the six months ended 30 April 2013

4 Profit for the year Other comprehensive income Exchange differences on translating foreign operations 3 (7) (48) Total comprehensive income for the period Consolidated Balance Sheet at 30 April 2013 Restated Non-current assets Property, plant and equipment Goodwill 2,256 2,256 2,256 Intangible assets 3,203 2,744 3,015 Total non-current assets 5,814 5,413 5,651 Current assets Inventories 1,638 1,482 1,682 Trade and other receivables 1,885 1,878 1,642 Cash and cash equivalents Total current assets 3,716 3,537 3,487 Total assets 9,530 8,950 9,138 Current liabilities Borrowings 1,223 1,006 1,045 Trade and other payables 1,772 1,974 1,907 Total current liabilities 2,995 2,980 2,952 Non-current liabilities Borrowings Total non-current liabilities Total liabilities 3,436 2,980 3,168 Net assets 6,094 5,970 5,970 Capital and reserves Share capital 3,842 3,842 3,842 Share premium 6,095 6,095 6,095 Other reserves 7,000 7,000 7,000 Share based payment reserve Retained earnings (10,844) (10,968) (10,968) Shareholders funds 6,094 5,970 5,970 Consolidated statement of changes in equity For the six months ended 30 April 2013 Share Share Other Retained Total capital premium reserves earnings equity 000s 000s

5 At start of period 3,842 6,095 7,001 (10,968) 5,970 Profit for the period Other comprehensive income for the period At end of period 3,842 6,095 7,001 (10,844) 6,094 For the six months ended 30 April 2012 Share Share Other Retained Total capital premium reserves earnings equity 000s 000s At start of period 3,842 6,095 7,001 (11,000) 5,938 Profit for the period Other comprehensive income for the period (7) (7) At end of period 3,842 6,095 7,001 (10,968) 5,970 For the twelve months ended 31 October 2012 Share Share Other Retained Total capital premium reserves earnings equity 000s 000s At start of period 3,842 6,095 7,001 (11,000) 5,938 Profit for the period Other comprehensive income for the period (48) (48) At end of period 3,842 6,095 7,001 (10,968) 5,970 Consolidated Statement of cash flows for the six months ended 30 April Months 6 Months 12 Months Cashflow from operating activities Profit for the period Adjustments for: Depreciation Amortisation of intangible assets Loss on disposal of property, plant and equipment 2-52 Income tax expense - - (11) Interest expense (40) (39) (63) Changes in inventories 44 (192) (391) Changes in trade and other receivables (243) Changes in trade and other payables (135) (212) (279) (334) (38) (68) Net cash movement from operating activities (61) Cash flow from investing activities Proceeds from sales of property, plant and equipment Purchase of property, plant & equipment (52) - (90) Purchase of intangible fixed assets (263) (363) (710) Net cash movement used in investing activities (315) (360) (800)

6 Cash flow from financing activities Repayment of borrowings (45) (41) - New Loans Net cash from financing activities 305 (41) 87 Decrease in cash and cash equivalents in the period (71) (238) (335) Opening cash and cash equivalents (803) (419) (419) Currency exchange difference 3 (5) (49) Closing cash and cash equivalents (871) (662) (803) Analysed as follows: Cash and cash equivalents Borrowings (1,223) (1,006) (1,045) Less: Loans included in Borrowings (871) (662) (803) 1. BASIS OF PREPARATION OF INTERIM REPORT As permitted, IAS 34, 'Interim Financial Reporting' has not been applied in this interim report. The financial information presented in this report has been prepared using accounting policies that will be used in the preparation of the financial statements for the year ending 31 October These policies are in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as endorsed for use in the European Union, and these principles are disclosed in the Financial Statements for the year ended 31 October The financial information in this interim report does not constitute statutory accounts within the meaning of Section 435 of the Companies Act The statutory accounts of Mediwatch plc for the year ended 31 October 2012 have been reported on by the Company's auditors and have been delivered to the Registrar of Companies. The auditor's report was unqualified, did not include a reference to matters which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or 498(3) of the Companies Act The 2012 half year comparatives have been restated to take into accounts a prior year adjustment reducing inventory by 116,000 explained in Note 17 of the Group s 2012 account. There has also been a review of the various cash accounts which has led to an improved reclassification between Cash and Borrowings. 2. SEGMENTAL ANALYSIS A geographical analysis of the Group s turnover by destination is as follows: Six months ended 30 April 2013 Six months ended 30 April 2012 Twelve months ended 31 October 2012

7 United Kingdom ,497 United States of America 2,697 2,385 4,953 Europe 846 1,116 2,120 Rest of the world ,521 Total 4,911 5,084 10,091 The turnover, profit on ordinary activities and net assets of the Group are attributable to one business segment, the supply of primary care products used in the diagnosis of urological disorders and early prostate cancer detection. 3. EARNINGS PER SHARE The calculation of earnings per share for the six months ended 30 April 2013 is based on the profit attributable to equity shareholders of 121,000 (for the six months ended 30 April 2012: 39,000 and for the 12 months to 31 October 2012: 80,000) divided by the weighted average number of shares in issue during the period which was 140,871,032 (140,871,032 for both comparative periods). 4. PRESS RELEASE Copies of this report will not be issued to shareholders but will be available for download from If you would like to receive a hard copy of the interim report please contact the Mediwatch offices on +44 (0) to request a copy.