BIOVENTIX PLC

Earnings Release • Oct 5, 2015

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

BIOVENTIX PLC - Final Results

PR Newswire

London, October 5

                             Bioventix plc                        ("Bioventix" or the "Company")              Preliminary results for the year ended 30 June 2015Bioventix plc (BVXP), a UK company specialising in the development andcommercial supply of high-affinity monoclonal antibodies for applications inclinical diagnostics, announces its audited results for the year ended 30 June2015.Highlights  \* Revenue up 23% to £4.3m  \* Profits before tax up 39% to £3.1m  \* Final dividend up 50% to 21.6pBusiness reviewWe are pleased to report the results for the financial year ended 30 June 2015.Most significantly, revenues for the year of £4.3m (2013/14:£3.535m) were 23%up on the previous year. Profits before tax were also significantly increasedby 39% to £3.1m (2013/14: £2.2m). Despite increased dividend distribution, cashbalances increased by £780k to £4.1m.Much of the revenue growth has come from our vitamin D antibody (vitD3.5H10) inthe form of increased physical antibody sales and royalties. Whilst thephysical antibody sales can be spasmodic due to irregular customer orderingpatterns, the increase in royalties is likely to be sustained. Bioventix nowhas sixteen licensees for vitD3.5H10 ranging from large to small diagnosticscompanies. The roll out of our customer's products for vitamin D testingthroughout world markets has progressed during the year. This roll-out processhas advanced but is not yet quite complete and we remain optimistic thatrevenues from vitD3.5H10 will continue to grow over the next year or so.The core business that is not related to vitamin D comprises (in order ofimportance):  \* antibodies to NT proBNP (heart failure);  \* testosterone;  \* FT3 (thyroid hormone);  \* Estradiol (important estrogen);  \* various drugs (eg THC/cannabis); and  \* progesterone (steroid hormone).The revenues from this core business have remained robust and have provided afirm base for the growth that has come from vitamin D.New antibodies were added to the product portfolio during 2013/14(androstenedione, TSH, T4 and estriol) and we are starting to gain somecustomer feedback from samples delivered. There has been some positive feedbackon the antibodies to androstenedione, an androgenic steroid that is related totestosterone. The levels of androstenedione testing at hospitals is lower thanfor testosterone and so revenues are likely to be of lower value thantestosterone in the future as sales materialise.Future developmentsDuring this year, additional antibodies to parathyroid hormone (PTH), BNP andHIV.p24 were also added to the product portfolio though it is too early to tellif these will add value to the business over the coming years.Another route to pipeline development comes from sponsored antibody creationprojects whereby customers pay for antibody creation in return for exclusiveuse of the antibodies. Our most important such project was undertaken with alarge multinational diagnostics company almost ten years ago in the field ofhigh sensitivity troponin testing for heart attacks. We remain optimistic thatthis project is eventually reaching the point of commercialisation and thatsignificant revenues will start to flow during 2017. The timing of this will bedependent on the success of our partner company in gaining marketing approvalin the EU and in particular, the more demanding US market. The timing (likelyto be in 2017) is also coincident with the end of a payment period for asignificant existing core revenue stream for NT proBNP.More recent sponsored projects have been in the field of infectious disease andin the field of cancer diagnostics. We will know more about the technicalsuccess of these projects over the coming years.Geographically, the majority of sales emanate from the US, EU and Japan.However, we remain cautiously optimistic about growth prospects in China. Thereare rapidly emerging Chinese diagnostics companies and this represents a growthopportunity for Bioventix. Business development in China does presentchallenges but we expect that the quality of our antibodies will help us tomeet our objectives. We have appointed several local distributors who webelieve will be able to help us with product importation and the need toestablish the royalty element of our revenue model which is unfamiliar to newcompanies in China.In previous years, the Board has adopted a cautious dividend policy thatembraces continuity in the absence of special dividends. It is the intention ofthe Board to continue with this dividend policy.In the spring of 2014, the improving cash balance of the Company resulted in astep change in dividend distribution to a new level from which future pay outswould be based.The Board is pleased to announce a final dividend of 21.6 pence per share whichrepresents an increase of 50% compared to last year. Assuming the Companycontinues to perform as expected it is the intention of the Board to reflect asimilar percentage increase in next year's interim dividend which will beannounced alongside our interim results for the six months to 31 December2015.. As in Spring 2014, these two increases are consistent with the recentchange in Company finances and constitute a step change to a new base levelfrom which future dividends will be considered.The shares will be marked ex-dividend on 15 October 2015 and the dividend willbe paid on 30 October 2015 to shareholders on the register at close of businesson 16 October 2015.As in previous years, the priority for expenditure lies with our R&D activitiesand the need to develop antibodies that we hope to commercialise during theperiod from 2020 to 2030. Accordingly, R&D expenditure continues to account forthe majority of operating costs.The composition of the Bioventix team has remained stable over the last twoyears and this facilitates excellent performance and accumulation of know-how.The continued outstanding performance of the Company in a competitive globalmarket for antibodies is very satisfying. Our sheep monoclonal antibodytechnology continually delivers high performance antibodies to our customers.However, the operation of the antibody technology is made possible by theefforts of our expert staff and we would like to thank them for theirremarkable achievements over the last year.We are delighted to be able to report such positive news for the current year.Furthermore, we remain optimistic that further modest growth in the next twoyears will come from additional vitamin D antibody sales and royalties. Beyondthat, growth in the period from 2017 to 2020 will be linked to the success ofour troponin project. The challenge for our continued research activities willbe to seed additional projects that will germinate in the period from 2020 to2030 to allow us to create further shareholder value.For further information please contact:Bioventix plc            Chief Executive Officer   Tel: 01252 728 001Peter HarrisonfinnCap Ltd              Corporate Finance         Tel: 020 7220 0500Geoff Nash/Simon Hicks   Corporate BrokingSteve NorcrossAbout Bioventix plc:Bioventix (www.bioventix.com) specialises in the development and commercialsupply of high-affinity monoclonal antibodies with a primary focus on theirapplication in clinical diagnostics, such as in automated immunoassays used inblood testing. The antibodies created at Bioventix are generated in sheep andare of particular benefit where the target is present at low concentration andwhere conventional monoclonal or polyclonal antibodies have failed to produce asuitable reagent. Bioventix currently offers a portfolio of antibodies tocustomers for both commercial use and R&D purposes, for the diagnosis ormonitoring of a broad range of conditions, including heart disease, cancer,fertility, thyroid function and drug abuse. Bioventix currently suppliesantibody products and services to the majority of multinational clinicaldiagnostics companies. Bioventix is based in Farnham, UK and its shares aretraded on AIM under the symbol BVXP.PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2015                                                       2015          2014                                                          £             £TURNOVER                                          4,333,221     3,535,358Cost of sales                                     (320,464)     (302,865)GROSS PROFIT                                      4,012,757     3,232,493Administrative expenses                           (915,164)     (860,966)Exceptional costs of listing on AIM                       -     (169,400)Total administrative expenses                     (915,164)   (1,030,366)OPERATING PROFIT                                  3,097,593     2,202,127Interest receivable and similar income                9,972        28,584Interest payable and similar charges                (1,872)         (104)PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION     3,105,693     2,230,607Tax on profit on ordinary activities              (548,227)     (415,178)PROFIT FOR THE FINANCIAL YEAR                     2,557,466     1,815,429Earnings per share:                                                        2015          2014Basic                                                 50.66p        36.09pDiluted                                               49.79p        35.42pBasic adjusted                                           N/A        36.53pDiluted adjusted                                         N/A        35.86pAll amounts relate to continuing operations.There were no recognised gains and losses for 2015 or 2014 other than thoseincluded in the Profit and loss account.BALANCE SHEET AS AT 30 JUNE 2015                                                     2015                  2014                                         £           £           £          £FIXED ASSETSTangible assets                                487,804                419,743CURRENT ASSETSStocks                             192,970                 164,107Debtors                          2,090,573               1,831,748Cash at bank and in hand         4,130,622               3,351,479                                 6,414,165               5,347,334CREDITORS: amounts falling due   (297,526)               (530,913)within one yearNET CURRENT ASSETS                           6,116,639              4,816,421TOTAL ASSETS LESS CURRENT LIABILITIES        6,604,443              5,236,164PROVISIONS FOR LIABILITIESDeferred Tax                                  (20,318)                      -NET ASSETS                                   6,584,125              5,236,164CAPITAL AND RESERVESCalled up share capital                        252,547                252,210Share premium account                           78,426                 57,768Capital redemption reserve                       1,231                  1,231Profit and loss account                      6,251,921              4,924,955SHAREHOLDERS' FUNDS                          6,584,125              5,236,164The financial statements were approved and authorised for issue by the boardand were signed on its behalf on 29 September 2015.CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2015                                                       2015          2014                                                          £             £Net cash flow from operating activities           2,915,212     1,765,290Returns on investments and servicing of               8,100        28,480financeTaxation                                          (770,128)     (163,145)Capital expenditure and financial investment      (113,069)       (1,909)Equity dividends paid                           (1,281,967)     (921,452)CASH INFLOW BEFORE FINANCING                        758,148       707,264Financing                                            20,995        58,709INCREASE IN CASH IN THE YEAR                        779,143       765,973RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT FOR THE YEARENDED 30 JUNE 2015                                                       2015          2014                                                          £             £Increase in cash in the year                        779,143       765,973MOVEMENT IN NET DEBT IN THE YEAR                    779,143       765,973Net funds at 1 July 2014                          3,351,479     2,585,506NET FUNDS AT 30 JUNE 2015                         4,130,622     3,351,479NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015 1. ACCOUNTING POLICIES    Basis of    preparation1.1 of    financial    statements                The              financial                statements                have been                prepared                under the                historical                cost                convention                and in                accordance                with                applicable                accounting                standards.     1.2 Turnover         Turnover comprises revenue recognised by the company in respect of         goods and services supplied, exclusive of Value Added Tax and trade         discounts.         Direct sales are recognised at the date of dispatch, and royalties are         accrued over the period to which they relate.         Subcontracted R & D income is recognised based upon the stage of         completion at the year end.         Annual licence revenue is recognised, in full, based upon the date of         the invoice.     1.3 Intangible fixed assets and amortisation         Goodwill is the difference between amounts paid on the acquisition of         a business and the fair value of the identifiable assets and         liabilities. It is amortised to the Profit and loss account over its         estimated economic life.         Amortisation is provided at the following rates:               Goodwill               -   Over 10 years               Know how               -   Over 10 years     1.4 Tangible fixed assets and depreciation         Tangible fixed assets are stated at cost less depreciation.         Depreciation is not charged on freehold land. Depreciation on other         tangible fixed assets is provided at rates calculated to write off the         cost of those assets, less their estimated residual value, over their         expected useful lives on the following bases:               Freehold property      -   2% straight line               Plant and equipment    -   25% reducing balance               Motor Vehicles         -   25% straight line               Equipment              -   25% straight line     1.5 Stocks         Stocks are valued at the lower of cost and net realisable value after         making due allowance for obsolete and slow-moving stocks. Cost         includes all direct costs and an appropriate proportion of fixed and         variable overheads.     1.6 Deferred taxation         Full provision is made for deferred tax assets and liabilities arising         from all timing differences between the recognition of gains and         losses in the financial statements and recognition in the tax         computation.         A net deferred tax asset is recognised only if it can be regarded as         more likely than not that there will be suitable taxable profits from         which the future reversal of the underlying timing differences can be         deducted.         Deferred tax assets and liabilities are calculated at the tax rates         expected to be effective at the time the timing differences are         expected to reverse.         Deferred tax assets and liabilities are not discounted.     1.7 Foreign currencies         Monetary assets and liabilities denominated in foreign currencies are         translated into sterling at rates of exchange ruling at the balance         sheet date.         Transactions in foreign currencies are translated into sterling at the         rate ruling on the date of the transaction.         Exchange gains and losses are recognised in the Profit and loss         account.     1.8 Research and development         Research and development expenditure is written off in the year in         which it is incurred.     1.9 Pensions         The company operates a defined contribution pension scheme and the         pension charge represents the amounts payable by the company to the         fund in respect of the year.    1.10 Employee benefits-share-based compensation         The company operates an equity-settled, share-based compensation plan.         The fair value of the employee services received in exchange for the         grant of the options is recognised as an expense over the vesting         period. The total amount to be expensed over the vesting period is         determined by reference to the fair value of the options granted. At         each balance sheet date, the company will revise its estimates of the         number of options are expected to be exercisable. It will recognise         the impact of the revision of original estimates, if any, in the         profit and loss account, with a corresponding adjustment to equity.         The proceeds received net of any directly attributable transaction         costs are credited to share capital (nominal value) and share premium         when the options are exercised. 2. TURNOVERAn analysis of turnover by class of business is as follows:                                                             2015          2014                                                                £             £     Royalty and licence fee income                     3,122,334     2,759,599     Product revenue and R&D income                     1,210,887       775,759                                                        4,333,221     3,535,358The geographical split of turnover is:                                                             2015          2014                                                                £             £     United Kingdom                                       246,840       114,555     Other EU                                           1,735,902     1,566,702     USA                                                1,866,935     1,577,690     Rest of the World                                    483,544       276,411     Total                                              4,333,221     3,535,358 3. TAXATION                                                            2015          2014                                                               £             £    Analysis of tax charge in the year    Current tax (see note below)    UK corporation tax charge on profit for the          527,095       434,176    year    Adjustments in respect of prior periods             (10,582)             -    Total current tax                                    516,513       434,176    Deferred tax (see note 14)    Origination and reversal of timing differences        31,714      (18,998)    Tax on profit on ordinary activities                 548,227       415,178Factors affecting tax charge for the yearThe tax assessed for the year is lower than(2014 - lower than) the standardrate of corporation tax in the UK of 20%(2014 - 21%). The differences areexplained below:                                                            2015          2014                                                               £             £    Profit on ordinary activities before tax           3,105,693     2,230,607    Profit on ordinary activities multiplied by          621,139       468,427    standard rate of corporation tax in the UK of    20%(2014 - 21%)    Effects of:    Expenses not deductible for tax purposes,             10,356        52,163    other than goodwill amortisation and    impairment    Depreciation for year in excess of capital          (14,092)         3,534    allowances    Refunded after uplifted research and                (10,582)             -    development claims    Tax deduction arising from exercise of               (5,450)      (13,080)    employee options    Other differences leading to an increase              19,068        28,971    (decrease) in the tax charge    Research and development enhanced expenditure      (103,926)     (105,839)    relief    Current tax charge for the year (see note            516,513       434,176    above)Factors that may affect future tax chargesThere were no factors that may affect future tax charges. 4. SHARE CAPITAL                                                           2015           2014                                                              £              £  Allotted,  called up  and fully  paid  5,050,931                                             252,547        252,210  (2014 -  5,044,202)  Ordinary  shares of  £0.05 eachDuring the year 6,729 shares were issued. 5. EARNINGS PER SHAREThe weighted average number of shares in issue for the basic earnings per sharecalculation is 5,048,479 (2014 5,032,247) and for the diluted earnings pershare, assuming the exercise of all share options is 5,136,221 (20145,126,718).The 2014 calculation of adjusted earnings per share, on profit after tax fromcontinuing activities, was based on the profit for the period of £1,815,429,after adding back AIM listing costs of £169,400 and deducting back datedroyalty income of £189,729, together with the associated taxation adjustment toreflect the underlying profit. Based on the weighted average number of sharesin issue during the prior year of 5,032,247 the basic earnings per share was36.52p. The diluted earnings per share was based on 5,126,718 shares and was35.85p.The calculation of the basic earnings per shares is based on the profit for theperiod of £2,576,972 (2014 £1,815,429) divided by the weighted average numberof shares in issue of 5,048,479 (2014 5,032,247), the basic earnings per shareis 51.04p (2014 (36.08p). The diluted earnings per share, assuming the exerciseof all of the share options is based on 5,136,221 (2014 5,126,718) shares andis 50.17p (2014 35.41p). 6. SHARE BASED PAYMENTSDuring the year the company operated an Approved Share Option Scheme (the"Option Scheme"), to incentivise employees.The company have applied the requirements of FRS 20 Share-based Payment to allthe options granted. The Option Scheme provides for a grant price equal to themarket value of the Company's shares on the date of the grant, as agreed withHMRC Shares and Assets Valuation Division.The contractual life of an option is 10 years from the date of grant. Optionsgranted become exercisable on the third anniversary of the date of grant.Exercise of an option is normally subject to continued employment, but thereare also considerations for good leavers. All share based remuneration issettled in equity shares.Details of the options granted up to the year ended 30 June 2015 are shownbelow:Grant Date               Exercise    Exercise   Granted  Forfeited   As at 30                          period       price                        June 20154 July 2013           On or after 4    £3.12    95,865       -        73,319                        July 201625 March              On or after 25   £6.40    14,424       -        14,4242014                    March 2017Fair value of share options and assumptions for awards                                                        4 July 2013  25 March                                                                       2014Fair value at measurement date                             £1.50       £3.08Issue price                                                £3.12       £6.40Exercise price                                             £3.12       £6.40Expected volatility                                       33.82%      33.82%Option life (expressed as weighted average life used in  10 years    10 yearsmodelling under Black Scholes model)Expected dividendsRisk-free interest rate (based on national government      2.47%       2.47%bonds)Expected volatility was based on past volatility since the shares have beenlisted on AIMOn 10 November 2014, 1 employee exercised their options on 6,729 ordinaryshares of £0.05 each, at a price of £3.12 per share. The difference between thetotal consideration received of £20,994.48 and the nominal value of the sharesof £336.45 has been transferred to the share premium account (£20,658.03).A share option charge of £36,660 has been made for the £3.12 options in theyear ended 30 June 2015A share option charge of £14,808 has been made for the £6.40 options in theyear ended 30 June 2015.The number of staff holding share options at 30 June 2015 was 9. The shareoptions have been issued to underpin staff service conditions. 7. PUBLICATION OF NON-STATUORY ACCOUNTSThe financial information set out in this preliminary announcement does notconstitute the Group's financial statements for the year ended 30 June 2015 andthe year ended 30 June 2014.The financial statements for the year ended 30 June 2014 have been delivered tothe Registrar of Companies. The financial statements for the year ended 30 June2015 will be delivered to the Registrar of Companies following the Company'sAnnual General Meeting. The auditors' report on both accounts was unqualified,did not include references to any matters to which the auditors drew attentionby way of emphasis without qualifying their report and did not containstatements under sections 498(2) or (3) of the Companies Act 2006.The audited financial statements of Bioventix plc for the period ended 30 June2015 are expected to be posted to shareholders shortly, will be available tothe public at the Company's registered office, 7 Romans Business Park, EastStreet, Farnham, Surrey, GU9 7SX and available to view on the Company's websiteat www.bioventix.com once posted.END