TIDMGENI
RNS Number : 7211B
GENinCode PLC
06 June 2023
GENinCode Plc
("GENinCode" or the "Company")
Final results
Oxford, UK. GENinCode Plc (LSE:AIM GENI), the genetics company
focused on the prevention of cardiovascular disease (CVD),
announces its audited final results for the twelve months ended 31
December 2022. The 2022 financial year saw the Company accelerate
its commercial expansion programme in the US, UK and Europe and the
Company is now preparing to launch its first clinical diagnostic
and risk assessment tests into the US market with its Early Access
Programs.
Operational and financial highlights
-- Preparation for US launch of LIPID inCode(R) for the
diagnosis of familial hypercholesterolemia ("FH") and CARDIO
inCode(R) for the genetic risk of coronary heart disease.
-- Improving US market conditions set by American Heart
Association for the introduction of polygenic testing for coronary
heart disease and reimbursement coverage for LIPID inCode(R).
-- Final preparations ongoing for filing FDA 510K submission for
Cardio inCode(R) (kit format) for the onset of cardiovascular
disease ("CVD").
-- NHS adoption of LIPID inCode(R) for FH diagnosis in the North
of England to deliver comprehensive testing, improved turnaround
times at reduced cost.
-- CARDIO inCode(R) pilot launched in Extremadura, Spain.
-- Acquisition of Risk of Ovarian Cancer Algorithm (ROCA) test
for women at high risk of ovarian cancer. Awaiting completion of
review by National Institute for Health and Care Excellence (NICE)
as part of new guidance development.
-- Full year revenues GBP1.4m (2021: GBP1.2m).
-- Increased levels of investment in the commercialisation
programme giving rise to a reported adjusted EBITDA loss of
(GBP5.6m) (2021: loss of (GBP3.4m)).
-- Cash reserves of GBP9.7m at 31 December 2022 (2021: GBP14.6m).
Post-period end highlights
-- California state licensing approval and CLIA certification
received for provision of LIPID inCode(R) and CARDIO inCode(R) test
services from the Company's laboratory based in Irvine,
California.
-- CPT PLA coding granted from the American Medical Association for CARDIO inCode(R)
-- Announcement of LIPID inCode(R) collaboration with University
Clinic Dresden, Germany for primary care diagnosis of FH and risk
assessment of CVD.
-- Presentation by Kaiser Permanente on the use of CARDIO
inCode(R) for the polygenic risk assessment of CVD at European
Society of Cardiology Annual Meeting in August 2023 in
Amsterdam.
Matthew Walls, Chief Executive Officer of GENinCode Plc said: "
We are starting to commercially advance our polygenic tests in the
US and UK which together with our growing EU business and
strengthening clinical evidence will enable us to rapidly scale our
business. We remain firmly focused on our US product launch and
first US revenues, broadening our NHS commercial relationship and
expansion across our EU business. We will drive revenue growth
whilst maintaining a tight operational cost base to target
breakeven over the medium term, de-risking our business model
whilst offering significant growth potential."
Investor meeting
The Company will also host a presentation for investors via the
IMC platform 2pm BST on Thursday, 8 June. The presentation is open
to all existing and potential shareholders. Questions can be
submitted pre-event via your Investor Meet Company dashboard up
until 9am the day before the meeting or at any time during the live
presentation. To register, please use the following link:
https://www.investormeetcompany.com/genincode-plc/register-investor
For more information visit www.genincode.com
Enquiries:
GENinCode Plc www.genincode.com or via Walbrook PR
Matthew Walls, CEO
Paul Foulger, CFO
Stifel Nicolaus Europe Limited (Nomad and Joint Broker) Tel: +44 (0)20 7710 7600
Alex Price / Ben Maddison / Richard Short
Cenkos Securities Plc (Joint Broker) Tel: +44 (0)20 7397 8900
Giles Balleny
Dale Bellis / Michael Johnson (Sales)
Walbrook PR Limited Tel: 020 7933 8780 or genincode@walbrookpr.com
Anna Dunphy / Phillip Marriage / Louis Ashe-Jepson
About GENinCode:
GENinCode Plc is a UK based company specialising in genetic risk
assessment of cardiovascular disease. Cardiovascular disease is the
leading cause of death and disability worldwide.
GENinCode operates business units in the UK, Europe through
GENinCode S.L.U., and in the United States through GENinCode U.S.
Inc.
GENinCode predictive technology provides patients and physicians
with globally leading preventive care and treatment strategies.
GENinCode CE marked invitro-diagnostic molecular tests combine
clinical algorithms and bioinformatics to provide advanced patient
risk assessment to predict disease onset.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
2022 Business review
In the preliminary results for the twelve months ending 31
December 2022, the Company saw a year-on-year revenue increase to
GBP1.4m (2021: GBP1.2m) primarily from growth in our European
business. The Company's key products include:
CARDIO inCode(R) - Genetic risk assessment of coronary heart
disease
LIPID inCode(R) - Genetic diagnosis and management of familial
(inherited) hypercholesterolemia
THROMBO inCode (R) - Genetic diagnosis and risk assessment of
thrombophilia and thrombotic risk
SUDD inCode(R) - Genetic diagnosis and cause of sudden cardiac
death and familial heart disease
The Company is now starting commercial expansion programmes in
the US and UK to complement its European revenue growth.
US Business
The past year has seen significant advances in US genetic
healthcare policy with a milestone statement by American Heart
Association (AHA) on the importance of Polygenic Risk Scores for
the future risk assessment of cardiovascular disease. We are now
preparing our Early Access Program (EAP) discussions for the launch
of LIPID inCode(R) and CARDIO inCode-Score(R) in the US with a
select group of leading healthcare institutions from which we
expect to see clinical adoption.
Recent public health developments announced by the US Centres
for Disease Control to identify individuals suffering with familial
hypercholesterolemia (FH) have escalated the disease area to a
'Tier 1' public health status. Resulting from this increased focus
on FH and existing reimbursement coding for FH diagnosis, we have
accelerated the commissioning and validation of LIPID inCode(R) for
the US market.
Over the year the Company commissioned its US diagnostic lab and
applied for and received California State Licensing approval and
subsequently CLIA (Clinical Laboratory Improvement Amendments)
regulatory approval for our dedicated US laboratory based in
Irvine, California. CLIA approval enables the Company to start
selling its lab diagnostic tests in the US market. The dedicated
CLIA lab also enables greater control, efficiency over our supply
chain alongside improved gross margins from our operations. Both
CARDIO inCode-Score(R) and LIPID inCode(R) are now preparing for
commercial launch.
Following the US Food and Drug Administration (FDA)
Pre-Submission for the CARDIO inCode(R) test kit for coronary heart
disease, we have continued productive discussions with the FDA for
the preparation and regulatory filing of our final 510K kit
submission. Analytical work to complete the filing has been
extensive and time consuming. We are nearing completion of this
programme and expect to file our 510K over the coming weeks. We
anticipate a six-month review period with the FDA prior to expected
approval later this year. The approval of the 510K 'kit format'
will complement our existing lab diagnostic test services and will
extend sales across other CLIA labs in the US market.
At the end of the year, we bolstered the GENinCode US sales team
and are now preparing to 'soft launch' the LIPID inCODE(R) and
CARDIO inCode(R) Early Access Programs (EAPs). The EAPs will enable
selected institutions and KOL physicians to access these products
on a 'free of charge' basis in return for market feedback. We
expect these programs to lead to the start of first US test
revenues.
During the year we also commenced collaborations with Indiana
University (IU) School of Medicine, the largest US medical school,
in preparation for the introduction of CARDIO inCode(R) to the US
market and expanded our c ollaboration with Kaiser Permanente,
California, to assess CARDIO inCode (R) for the polygenic risk
assessment of CVD. We anticipate strong clinical utility results
from both the IU and Kaiser Permanente collaborations with business
updates expected over the coming months.
UK and Europe Business
In the UK NHS, we successfully completed and published our first
LIPID inCode(R) NHS clinical study to improve diagnosis and
turnaround time for testing of Familial Hypercholesterolemia (FH)
at reduced cost to the NHS. Following the NHS publication, we
announced the implementation of LIPID inCode(R) with the North East
and Cumbria - Academic Health Science Network (NENC-AHSN) and more
recently our first major commercial programme to support the NHS
10-Year plan to identify 25% of those individuals in the UK
suffering with FH. The LIPID inCode(R) implementation represents
the first commercial polygenic CVD risk test to be adopted by the
NHS. During the year we also announced a collaboration with BUPA
Cromwell Hospital, London, for use of our LIPID inCode(R) test
leading to our first UK product revenues.
Aligned with our UK growth, we commissioned our new UK lab based
in Hammersmith, London.
We have also recently announced our collaboration with MVZ
Uniklinikum labs in Dresden, Germany. Uniklinikum represent the
largest treatment centre in Germany for patients suffering with
hypercholesterolemia and the German team will follow a similar
pathway to the NHS with state-based reimbursement for our initial
LIPID inCode(R) test.
In Spain, we announced the first CARDIO inCode (R) pilot
implementation study in the Spanish region of Extremadura. The
Extremadura region has a population of c.1m, with an estimated
50,000 individuals at risk of a cardiovascular event, including
heart attack. CARDIO inCode (R) is expected to change clinical
practice by identifying those individuals at high genetic risk and
improve preventative treatment. Successful completion of the pilot
in over 500 individuals will lead to the extension of the programme
across the Extremadura region.
We also completed our first THROMBO inCode(R) COVID-19
evaluation study for patients with a genetic predisposition to
thrombosis at St Pau Hospital, Spain. We are continuing to
clinically assess the impact of thrombosis in the escalation of
severe COVID-19 where it is conveniently aligned with our existing
strategy.
In October, we announced the acquisition of the entire issued
share capital of Abcodia Limited, Cambridge, and its Risk of
Ovarian Cancer Algorithm (ROCA) test and technology. Unique in its
field, and based on growing published clinical evidence, the ROCA
test represents a breakthrough for the early detection of familial
ovarian cancer in BRCA+ genetically predisposed women. The clinical
and economic benefits of the ROCA test are under review by NICE as
part of new guidance development for this cohort of women, and
through additional industry partnerships, the test is poised to
engage commercially, initially in the UK.
Intellectual Property
We maintain an ongoing intellectual property programme to
strengthen our existing patent portfolio and are advancing our
family of patents for both CARDIO inCode(R) and THROMBO inCode(R) .
We will continue to build our intellectual property portfolio and
actively evaluate in-licensing and acquisition opportunities as
appropriate to enhance our competitive product positioning.
Financial review
Following the admission of the Company to the AIM market in July
2021 and the GBP15.3m net funds raised, we have delivered our
commercial programme for the US, UK and EU markets whilst
maintaining tight control over spending. This approach has enabled
us to meet our business plans whilst retaining strong cash reserves
in a weakening financial market.
Our EU business reported revenues of GBP1.4m (2021 GBP1.2m) for
the full year. Gross profit for the year was GBP632k (2021:
GBP593k) with a margin of 44% (2021: 51%). The reduced margin
reflecting the increased (largely inflationary) material and
service costs over the year.
Administrative expenses increased to GBP6.3m (2021: GBP4.0m).
The year-on-year cost increase reflecting growth in staffing and
professional costs with the ramp up in US and UK investment in
preparation for our US and UK laboratory services, increased sales
and marketing resource with spending primarily focused on market
access and launch preparations.
This increased commercial investment gave rise to an adjusted
EBITDA loss for the year of (GBP5.6m) (2021: (GBP3.4m)), with the
cash position at the end of December 2022 being GBP9.7m (2021:
GBP14.6m).
Capital structure
The total number of ordinary shares in issue was 95,816,866. The
loss per share for the year ending 31 December 2022 was 6.2p/share.
The Board of Directors will not be recommending a dividend payment
for the year ended 31 December 2022.
Outlook
We will continue to take commercial advantage of our product
developments and strong clinical evidence to scale the market
opportunities now emerging. We are focused on our US launch,
generating our first US revenues, the development of our NHS
relationships and expansion in the EU. Given the challenging
markets, we are driving revenue growth whilst maintaining a tight
operational cost base to target a breakeven/profit position over
the medium term. This will enable us to de-risk our business model
whilst delivering strong growth as our products come to market in
the US, alongside UK and EU growth.
During 2023, we expect to complete the following key
deliverables:
-- Launch of LIPID inCode(R) and CARDIO inCode(R) Early Access
Programs in the US market to generate first US revenues
-- Finalisation and filing of 510K regulatory submission for
CARDIO inCode(R) (kit format) to accelerate US sales
-- Expand NHS programme for LIPID inCode (R) and introduce CARDIO inCode (R)
-- Expand the MVZ Uniklinikum, Germany collaborative program and menu of products
-- Build our EU partnerships and develop our ongoing
collaborative discussions with pharmaceutical companies
-- Strengthen the commercial, marketing and selling teams to support US revenue growth
We are now preparing launch plans in the US to complement our UK
and EU revenue growth.
We have a strong and growing competitive clinical advantage to
identify patients at genetic risk of coronary heart disease to
improve preventive care in the largest global disease area with
highest level of mortality.
Commensurate with growth we will build investment in our
international manpower resource and expertise as well as exploring
other acquisition opportunities to take advantage of the growth
opportunities open to us.
We continue to strengthen our business and believe our tests are
industry leading and will deliver significant investor returns. We
would like to thank our investors, Board, management and employees
for their strength and determination in helping support and drive
our business growth.
We look forward to updating our investors on our forthcoming
progress.
Matthew Walls William Rhodes
Chief Executive Officer Chairman
5 June 2023 5 June 2023
GENinCode Plc
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2022
2022 2021
GBP'000 GBP'000
------------------------------------- -------- --------
CONTINUING OPERATIONS
Revenue 1,430 1,154
Cost of sales (798) (561)
GROSS PROFIT 632 593
Administrative expenses (6,266) (4,019)
ADJUSTED EBITDA (5,634) (3,426)
Depreciation (104) (6)
Amortisation (59) (29)
Loss on disposal of fixed
assets - (19)
Share based payment expense (102) (73)
Listing costs - (584)
Non-recurring expenditure - (9)
OPERATING LOSS (5,899) (4,146)
Other income 173 10
Finance charge (20) -
--------------------------------------- -------- --------
LOSS BEFORE INCOME TAX (5,746) (4,136)
Income tax 187 (6)
--------------------------------------- -------- --------
LOSS FOR THE FINANCIAL YEAR (5,559) (4,142)
Other comprehensive income
for the year
Items that are or may be
subsequently reclassified
to the profit and loss:
Exchange differences on translation
of foreign operations (361) 72
LOSS ATTRIBUTABLE TO EQUITY
SHAREHOLDERS OF THE COMPANY (5,920) (4,070)
--------------------------------------- -------- --------
EARNINGS PER SHARE
Basic earnings per share
(pence) (6.18) (8.05)
Diluted earnings per share
(pence) (6.18) (8.05)
GENinCode Plc (Registered number: 11556598)
Consolidated Statement of Financial Position
31 December 2022
2022 2021
GBP'000 GBP'000
------------------------------- -------- --------
ASSETS
NON-CURRENT ASSETS
Intangible assets 161 193
Property, plant and equipment 653 46
Right of use asset 349 -
Goodwill 149 -
1,312 239
-------- --------
CURRENT ASSETS
Inventories 20 14
Trade and other receivables 717 399
Cash and cash equivalents 9,732 14,554
Financial assets 16 4
10,485 14,971
-------- --------
TOTAL ASSETS 11,797 15,210
======== ========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 958 958
Share premium 15,551 15,551
Foreign currency translation
reserve (289) 72
Share based payment reserve 175 73
Retained earnings (8,495) (2,936)
TOTAL EQUITY 7,900 13,718
-------- --------
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 1,434 661
Lease liability 285 -
CURRENT LIABILITIES
Trade and other payables 2,078 825
Lease liability 69 -
Deferred Tax 31 6
TOTAL LIABILITIES 3,897 1,492
-------- --------
TOTAL EQUITY AND LIABILITIES 11,797 15,210
======== ========
GENinCode Plc (Registered number: 11556598)
Company Statement of Financial Position
31 December 2022
2022 2021
GBP'000 GBP'000
--------------------------------------- -------- --------
ASSETS
NON-CURRENT ASSETS
Investments 221 31
Intangible assets 159 179
Property, plant, and
equipment 164 32
Right of use asset 349 -
Trade and other receivables 5,668 2,791
6,561 3,033
-------- --------
CURRENT ASSETS
Trade and other receivables 531 168
Cash and cash equivalents 9,468 14,243
9,999 14,411
-------- --------
TOTAL ASSETS 16,560 17,444
======== ========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 958 958
Share premium 15,551 15,551
Share based payment reserve 175 73
Retained earnings (1,413) 493
TOTAL EQUITY 15,271 17,075
-------- --------
LIABILITIES
NON-CURRENT LIABILITIES
Contingent consideration
provision 155 -
Lease liability 285 -
CURRENT LIABILITIES
Trade and other payables 749 363
Lease liability 69 -
Deferred Tax 31 6
TOTAL LIABILITIES 1,289 369
-------- --------
TOTAL EQUITY AND LIABILITIES 16,560 17,444
======== ========
GENinCode Plc
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2022
Foreign
Called Currency Share based
up Share
share premium Translation payment Retained Total
capital account Reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- -------- ------------ ------------ --------- --------
Balance at 1 January
2021 114 3,318 - - (1,573) 1,859
Changes in equity
Reduction of share
premium - (2,779) - - 2,779 -
Bonus share issue 458 (458) - - - -
Issue of share
capital 386 16,614 - - - 17,000
Costs of share
issue - (1,144) - - - (1,144)
Share based payments - - - 73 - 73
Profit or loss - - - - (4,142) (4,142)
Foreign exchange
on translation - - 72 - - 72
Balance at 31
December 2021 958 15,551 72 73 (2,936) 13,718
---------------------- -------- -------- ------------ ------------ --------- --------
Changes in equity
Share based payments - - - 102 - 102
Profit or loss - - - - (5,559) (5,559)
Foreign exchange
on translation - - (361) - - (361)
Balance at 31
December 2022 958 15,551 (289) 175 (8,495) 7,900
---------------------- -------- -------- ------------ ------------ --------- --------
GENinCode Plc
Company Statement of Changes in Equity
for the Year Ended 31 December 2022
Called
up Share
share premium Other Retained Total
capital account reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- --------- --------- --------
Balance at 1 January
2021 114 3,318 - (429) 3,003
Changes in equity
Reduction of share
premium - (2,779) - 2,779 -
Bonus share issue 458 (458) - - -
Issue of share capital 386 16,614 - - 17,000
Costs of share issue - (1,144) - - (1,144)
Share based payments - - 73 - 73
Profit or loss - - - (1,857) (1,857)
Balance at 31 December
2021 958 15,551 73 493 17,075
------------------------ -------- -------- --------- --------- --------
Changes in equity
Share based payments - - 102 - 102
Profit or loss - - - (1,906) (1,906)
Balance at 31 December
2022 958 15,551 175 (1,413) 15,271
------------------------ -------- -------- --------- --------- --------
GENinCode Plc
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2022
2022 2021
GBP'000 GBP'000
--------------------------------------------- -------- --------
Cash flows from operating activities
Loss before taxation (5,745) (4,137)
Adjustments for:
Foreign exchange loss/(gain) (197) 136
Depreciation and amortisation 163 35
Loss on disposal - 19
Share based payments 102 73
Finance charges 19 -
Taxation - 6
Operating loss before working capital
changes (5,658) (3,868)
--------------------------------------------- -------- --------
Cash used in operations
Decrease / (Increase) in trade and other
receivables (106) (150)
(Decrease) / Increase in trade and other
payables 2,022 922
Decrease / (Increase) in inventory (6) 4
Decrease / (Increase) in financial assets (13) (2)
Net cash outflow from operating activities (3,762) (3,094)
--------------------------------------------- -------- --------
Investing activities
Purchase of property, plant, and equipment (700) (41)
Purchase of intangible assets (149) (104)
Net cash flows used in investing activities (849) (145)
--------------------------------------------- -------- --------
Financing activities
Movement in lease liability (47) -
Issue of ordinary shares (net of issue
expenses) - 15,856
Net cash flows from financing activities (47) 15,856
--------------------------------------------- -------- --------
Net change in cash and cash equivalents (4,658) 12,617
Cash and cash equivalents at the beginning
of the year 14,554 2,003
Exchange gains / (losses) on cash and
cash equivalents 197 (136)
Movement in retranslation (361) 70
Cash and cash equivalents at the end
of the year 9,732 14,554
--------------------------------------------- -------- --------
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2022
1. Statutory information
GENinCode Plc is a public limited company, limited by shares,
registered in England and Wales. The Company's registered number
and registered office address can be found on the General
Information page.
The Group's principal activity is the development and
commercialisation of clinical genetic tests, to provide predictive
analysis of risk to a patient's health based on their genes.
The consolidated financial statements comprised of the Company
and its subsidiaries (together referred to as "the Group") as at
and for the year ended 31 December 2022. The parent Company
financial statements present information about the Company as a
separate entity and not about its Group.
2. Accounting policies
Basis of preparation
The consolidated financial statements of the Group have been
prepared using the historical cost convention, on a going concern
basis and in accordance with UK-adopted international accounting
standards ("IFRS") and the Companies Act 2006 applicable to
companies reporting under IFRS, using accounting policies which are
set out below and which have been consistently applied to all years
presented, unless otherwise stated.
The financial statements of the Company have been prepared in
accordance with Financial Reporting Standard 101 "Reduced
Disclosure Framework" ('FRS 101') and the requirements of the
Companies Act 2006. The Company will continue to prepare its
financial statements in accordance with FRS 101 on an ongoing basis
until such time as it notifies shareholders of any change to its
chosen accounting framework.
In accordance with FRS 101, the Company has taken advantage of
the following exemptions:
-- Requirements of IAS 24, 'Related Party Disclosures' to
disclose related party transactions entered into between two or
more members of a group;
-- the requirements of paragraphs 134(d) to 134(f) and 135(c) to
135(e) of IAS 36 Impairments of Assets;
-- the requirements of IFRS 7 Financial Instruments:
Disclosures;
-- the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B,
38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS 1 Presentation of
Financial Statements;
-- the requirements of paragraphs 134 to 136 of IAS 1
Presentation of Financial Statements;
-- the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors.
-- the requirements of IAS 7 to prepare a Statement of Cash
Flows.
New and amended standards adopted by the Group
The most significant new standards and interpretations adopted,
none of which are considered material to the Group, are as
follows:
Ref Title Summary Application
date of standards
(periods commencing)
------- --------------------------- ----------------------------- ----------------------
IFRS Conceptual Framework 1 January 2022
3 for Financial Reporting
(Amendments to IFRS
3)
------- ------------------------- ------------------------------- ------------------------
IAS 37 IAS 37 Provisions, Specifying which costs 1 January 2022
Contingent Liabilities an entity includes in
and Contingent Assets determining the cost
(Amendment - Onerous of fulfilling a contract
Contracts - Cost for the purposes of
of Fulfilling a assessing whether the
Contract) contract is onerous.
------- ------------------------- ------------------------------- ------------------------
IAS 16 IAS 16 Property, Prohibits a company 1 January 2022
Plant and Equipment deducting amounts received
(Amendment - Proceeds from selling items produced
before Intended while the company is
Use) preparing assets for
it's intended use from
the cost of PPE.
------- ------------------------- ------------------------------- ------------------------
New standards and interpretations not yet adopted
Unless material the Group does not adopt new accounting
standards and interpretations which have been published and that
are not mandatory for 31 December 2022 reporting periods.
No new standards or interpretations issued by the International
Accounting Standards Board ('IASB') or the IFRS Interpretations
Committee ('IFRIC') have led to any material changes in the
Company's accounting policies or disclosures during each reporting
period.
The most significant new standards and interpretations to be
adopted in the future are as follows:
Ref Title Summary Application
date of standards
(periods commencing)
------- --------------------------- ------------------------------ ----------------------
IAS1 Presentation of Amendments regarding 1 January 2023
Financial Statements the classification of
liabilities
Amendments to defer 1 January 2023
effective date of the
January 2020 amendments
------- --------------------------- ------------------------------ ----------------------
IAS 8 Definition of Accounting Defines accounting estimates 1 January 2023
Estimates and clarifies that the
effects of a change
in an input or measurement
technique are changes
in accounting estimates.
------- --------------------------- ------------------------------ ----------------------
IAS 12 Deferred Tax relating Additional criterion 1 January 2023
to Assets and liabilities for the initial recognition
arising from a exemption under IAS
Single Transaction 12.15, whereby the exemption
(Amendments to does not apply to the
IAS 12) initial recognition
of an asset or liability
which at the time of
the transaction, gives
rise to equal taxable
and deductible temporary
differences .
------- --------------------------- ------------------------------ ----------------------
Going concern
The financial statements have been prepared on the assumption
that the Group is a going concern. When assessing the foreseeable
future, the Directors have considered detailed budgets and
forecasts for the next 12 months from the date of this report and
the cash at bank available as at the date of approval of this
report and are satisfied that the Group should be able to meet its
financial obligations.
The Group holds surplus cash reserves following the placing on
admission to AIM in 2021. Based on current and expected expenditure
the Group will require additional funding in order to progress the
expansion plans within the next 12 months. There is a chance that
the process of raising additional funds will not be successful and
if this were the case, the Group has an ongoing commitment to keep
costs and working capital under control so that increasing gross
profits can drive positive cash flows. Detailed sensitivity
analysis has been performed to assess the potential impact on the
Group's liquidity caused by delays in revenue growth against
expected levels along with potential mitigating actions which can
be taken to safeguard the Group's cash position. These include
working capital controls and reductions in discretionary spending.
Given these actions and combined with the continued progress of the
underlying positive development of the general business activities,
the board is convinced the Company and Group have sufficient cash
flows for operations for the coming 12 months period.
Given that the outcome of the proposed fund raise cannot be
predicted, this indicates the existence of a material uncertainty
which may cast significant doubt about the Group's ability to
continue as a going concern. The financial statements do not
include the adjustments that would result if the Group was unable
to continue as a going concern.
Basis of consolidation
Subsidiaries are all entities which the Group has control. The
subsidiaries consolidated in these Group accounts were acquired via
group re-organisation and as such merger accounting principles have
been applied, except for the acquisition of Abcodia Limited in
September 2022. The subsidiaries' financial figures are included
for their entire financial year rather than from the date the
company took control of them, with the exception of Abcodia Limited
which was acquired during the year.
Inter-company transactions, balances, and unrealised gains on
transactions between Group companies are eliminated during the
consolidation process.
GENinCode Plc prepares its accounts to 31 December under FRS101;
there are no deviations from the accounting standards implemented
by the company. Where necessary accounting policies of subsidiaries
have been changed to ensure consistency with the policies adopted
by the Group.
The Company acquired its 100% interest in Abcodia Ltd in
September 2022. The results of subsidiaries acquired during the
year are included from the effective date of acquisition. Where
necessary, adjustments are made in results of subsidiaries to bring
the accounting policies used into line with those used by the
Group.
Property, plant, and equipment
Depreciation is provided at the following annual rates in order
to write off each asset over its estimated useful life.
Depreciation is provided to write off cost, less estimated
residual values, of all property, plant, and equipment, except for
investment properties and freehold land, evenly over their expected
useful lives, calculated at the following rates:
Plant 12%
Equipment 25%
The carrying value of the property, plant and equipment is
compared to the higher of value in use and the fair value less
costs to sell. If the carrying value exceeds the higher of the
value in use and fair value less the costs to sell the asset, then
the asset is impaired, and its value reduced by recognising an
impairment provision.
Intangible assets
(i) Patents and licenses costs
The Group has purchased patents and licences since
incorporation. The costs incurred in obtaining these patents and
licenses have been capitalised. Amortisation is charged as
follows:
Patents Over estimated economic life of 10 years
Licences 20% (estimated useful life of 5 years)
The Patents and license costs are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
(ii) Software costs
The Group has purchased software since incorporation. The costs
incurred in obtaining the software have been capitalised as the
Group uses the software platform to provide results to its
customers.
Amortisation is charged on a straight-line basis at 25% over the
useful life of the related asset. Software costs are reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
Foreign currency
The functional currency of the Company is Sterling Pound (GBP)
and its subsidiaries are in Euros (EUR) and US Dollars ($). The
presentational currency of the Company is GBP.
Transactions entered by the Group's entities in a currency other
than the reporting currency are recorded at the rates ruling when
the transactions occur. Foreign currency monetary assets and
liabilities are translated at the rates ruling at the statement of
financial position date. Exchange differences arising on the
re-translation of outstanding monetary assets and liabilities are
also recognised in the income statement.
The exchange rates used in the financial statements are as
follows:
2022 2021
Sterling/euro exchange rates
Average exchange rate for the year 1.173 1.163
Exchange rate at the year end 1.128 1.190
------ ------
Sterling/US dollar exchange rates
Average exchange rate for the year 1.237 1.375
Exchange rate at the year end 1.210 1.331
------------------------------------ ------ ------
Revenue recognition
Revenue is recognised in accordance with the requirements of
IFRS 15 'Revenue from Contracts with Customers'. The Company
recognises revenue to depict the transfer of promised goods and
services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those
goods or services. Revenue is determined to be at the point of
despatch of the product or service unless there are specific
provisions in the relevant contract. Revenue from the provision of
testing and reporting services is recognised upon delivery of the
report to the customer. Invoices are typically raised upon delivery
of the products or reporting services, unless there is a different
contractual requirement, for payment according to credit terms.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held
on call, together with other short term highly liquid investments
which are not subject to significant changes in value and have
original maturities of less than three months.
Equity
Equity comprises the following:
-- Share capital: the nominal value of equity shares.
-- Retained deficit: losses accumulated to the end of the
year.
-- Share premium: excess subscribed above nominal value.
Equity instruments
The Group subsequently measures all equity investments at fair
value. Where the Group's management has elected to present fair
value gains and losses on equity investments in OCI, there is no
subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit
or loss as other income when the Group's right to receive payments
is established. Changes in the fair value of financial assets at
FVPL are recognised in other gains/(losses) in the statement of
profit or loss as applicable. Impairment losses (and reversal of
impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
Taxation
Current taxes are based on the results shown in the financial
statements and are calculated according to local tax rules, using
tax rates enacted or substantially enacted by the statement of
financial position date.
Employee benefits
(i) Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and
non-monetary benefits are accrued in the year in which the
associated services are rendered by employees of the Company.
Employee benefit costs
The Group operates a defined contribution pension scheme.
Contributions payable to the Group's pension scheme are charged to
the income statement in the year to which they relate.
Research and development expenditure
Expenditure on research activity is recognised as an expense in
the year in which it is incurred.
Share based payment
The fair value of equity-settled share-based payments to
employees is determined at the date of grant and expensed on a
straight line basis over the vesting period based on the Group's
estimate of shares or options that will eventually vest.
All equity-settled share-based payments are ultimately
recognised as an expense in the profit or loss with a corresponding
credit to the Share based payment reserve. If vesting periods or
other non-market vesting conditions apply, the expense is allocated
over the vesting period, based on the best available estimate of
the number of share options expected to vest. Estimates are
subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. Any
cumulative adjustment prior to vesting is recognised in the current
period. No adjustment is made to any expense recognised in prior
periods if share options ultimately exercised are different to that
estimated on vesting.
Share options granted to employees of subsidiaries are
recognised as an expense in the employing subsidiary and as an
addition to the investment in the subsidiary for the parent
company. The costs are calculated on the same basis as above and
are included upon consolidation.
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital, and
where appropriate share premium.
Leased assets
The Group recognises a right of use asset and a lease liability
at the lease commencement date. The right of use asset is initially
measured at cost, which comprises of the initial amount of the
lease liability adjusted for any lease payments made at or before
the commencement date, plus any initial direct costs incurred and
an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or to restore the underlying
asset or the site on which it is located, less any lease incentives
received.
The right of use asset is subsequently depreciated using the
commencement date to the end of the lease term.
The lease liability is initially measured at the present value
of the lease payments that are paid at the commencement date,
discounted using the Group's incremental borrowing rate.
The lease liability is measured at amortised cost using the
effective interest method. It is re-measured when there is a change
in future lease payments arising from a change in an index or rate,
or if the group changes its assessment of whether it will exercise
a purchase, extension or termination option.
The Group has elected not to recognise right of use assets and
lease liabilities for short term leases that have a lease term of
12 months or less and leases of low value assets. The Group
recognises the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
Financial instruments
IFRS 9 requires an entity to address the classification,
measurement and recognition of financial assets and
liabilities.
a) Classification
The Group classifies its financial assets in the following
measurement categories:
-- those to be measured subsequently at fair value (either
through OCI or through profit or loss); and
-- those to be measured at amortised cost.
The classification depends on the Group's business model for
managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses will be
recorded either in profit or loss or in OCI.
The entity will recognise a financial liability in its statement
of financial position when it becomes party to the contractual
provisions of the instrument. At initial recognition, the entity
measures a financial liability at its fair value plus or minus, in
the case of a financial liability not at fair value through profit
or loss, transaction costs that are directly attributable to the
acquisition or issue of the financial liability.
The Group classifies financial assets as amortised costs only if
both of the following criteria are met:
-- the asset is held within a business model whose objective is
to collect contractual cash flows; and
-- the contractual terms give rise to cash flows that are solely
payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Group commits to purchase or
sell the asset). Financial assets are de-recognised when the rights
to receive cash flows from the financial assets have expired or
have been transferred and the Group has transferred substantially
all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are
directly attributable to the acquisition of the financial
asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
Financial instruments (cont)
Debt instruments
Amortised cost: Assets that are held for collection of
contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost.
Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
d) Impairment
The Group assesses, on a forward-looking basis, the expected
credit losses associated with any debt
instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant
increase in credit risk. For trade receivables, the Group applies
the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition
of the receivables.
Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date control is acquired (the acquisition date).
Goodwill arising on the acquisition of a subsidiary undertaking is
the difference between the fair value of the consideration payable
and the fair value of the identifiable assets, liabilities and
contingent liabilities acquired.
Goodwill is not amortised but is reviewed for impairment at
least annually or more frequently if there is an indication that
goodwill may be impaired. If the recoverable amount is less than
the carrying amount, the carrying amount of the asset is reduced to
its recoverable amount. An impairment loss is recognised as an
expense immediately.
On disposal of a subsidiary, the attributable amount of goodwill
is included in the determination of the profit or loss on
disposal.
Taxation
Current and deferred tax is charged or credited in profit or
loss, except when it relates to items charged or credited directly
to equity, in which case the related tax is also dealt with in
equity. Current tax is calculated on the basis of the tax laws
enacted or substantively enacted at the reporting date in the
countries where the Company and its subsidiaries operate.
Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are generally
recognised for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilised,
except for differences arising on investments in subsidiaries where
the Group is able to control the timing of the reversal of the
difference and it is probable that the difference will not reverse
in the foreseeable future.
Recognition of the deferred tax assets is restricted to those
instances where it is probable that a taxable profit will be
available against which the difference can be utilised.
Deferred tax is calculated based on rates enacted or
substantively enacted at the reporting date and expected to apply
when the related deferred tax asset is realised, or liability
settled.
Critical accounting estimates and judgements
The preparation of financial information in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires the Directors to exercise their judgement in the process
of applying the accounting policies which are detailed above. These
judgements are continually evaluated by the Directors and
management and are based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances.
The key estimates and underlying assumptions concerning the
future and other key sources of estimation uncertainty at the
statement of financial position date, that have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised if the revision affects
only that year, or in the years of the revision and future periods
if the revision affects both current and future years.
The estimates and judgements which have a significant risk of
causing a material adjustment to the carrying amount of assets and
liabilities within the next financial year are discussed below:
-- Intangible assets
The assessment of the future economic benefits generated by
these separately identifiable intangible assets and the
determination of its amortisation profile involve a significant
degree of judgement based on management estimation of future
potential revenue and profit and the useful life of the assets.
Reviews are performed regularly to ensure the recoverability of
these intangible assets.
-- Share based payments
The Company has issued share options as an incentive to certain
senior management. The fair value of options granted is recognised
as an expense with a corresponding credit to the share-based
payment reserve. The fair value is measured at grant date and
spread over the year during which the awards vest.
For equity-settled share-based payment transactions, the goods
or services received and the corresponding increase in equity are
measured directly at the fair value of the goods or services
received, unless that fair value cannot be estimated reliably. If
it is not possible to estimate reliably the fair value of the goods
or services received, the fair value of the equity instruments
granted as calculated using the Black-Scholes model is used as a
proxy.
The fair value of share-based payments is measured by use of
valuation models, which take into account conditions attached to
the vesting and exercise of the equity instruments. The expected
life used in the model is adjusted; based on management's best
estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The share price
volatility percentage factor used in the calculation is based on
historical share price performance of a group of peer companies as
historical share price performance was not available for the
Company on the date of grant.
-- Contingent consideration
Contingent consideration is a financial liability recorded at
fair value (note 22) . The amount of contingent consideration to be
paid is based on the occurrence of future events, such as the
achievement of certain development, regulatory and sales
milestones. Accordingly, the estimate of fair value contains
uncertainties as it involves judgment about the likelihood and
timing of achieving these milestones as well as the discount rate
used.
Changes in fair value of the contingent consideration obligation
result from changes to the assumptions used to estimate the
probability of success for each milestone, the anticipated timing
of achieving the milestones and the discount period and rate to be
applied. A change in any of these assumptions could produce a
different fair value, which could have a material impact on the
results from operations.
-- Acquisition
On the acquisition of a company or business, a determination of
the fair value and the useful lives of tangible and intangible
assets acquired is performed, which requires the application of
judgement. Future events could cause the assumptions used by the
Group to change which could have an impact on the results and net
position of the Group.
Critical accounting estimates and judgements (cont.)
-- Leases
The application of IFRS 16 requires the Group to make judgments
that affect the valuation of the lease liabilities and the
valuation of right-of-use assets (note 23). These include:
determining contracts in scope of IFRS 16, determining the contract
term and determining the interest rate used for discounting of
future cash flows.
The lease term determined by the Group generally comprises
non-cancellable period of lease contracts, periods covered by an
option to extend the lease if the Group is reasonably certain to
exercise that option and periods covered by an option to terminate
the lease if the Group is reasonably certain not to exercise that
option. The same term is applied as the economic useful life of
right-of-use assets.
The present value of the lease payment is determined using the
discount rate representing the base rate of 4.5%, plus a margin of
3% for general lending, giving a raise to a discount rate of
7.5%.
Management have assessed each lease liability for recognition
under IFRS16 and recognised a right of use asset where appropriate
(note 23). The right of use asset is amortised in line with the
term of the lease. Amortisation is on a straight line basis over 5
years with discount rate 7.5% as above.
-- Carrying value of inter- company debtors
Management uses their judgement to assess the recoverability and
value of intercompany debts, the Company has funded its
subsidiaries (note 15) to assist with their growth. Management
consider all of the intercompany debts to be fully recoverable but
in their judgement this will be in more than one year from the year
end.
3. Financial risk management
The Group's risk management is controlled by the board of
directors. The board identifies, evaluates, and mitigates financial
risks across the Group. Financial risks identified and how these
risks could affect the Group's future financial performance are
listed below;
Financial instruments by category
Financial assets 2022 2021
GBP'000 GBP'000
------------------------------------ -------- --------
Cash and cash equivalents 9,732 14,554
Trade receivables 315 234
Financial assets 16 4
Other receivables 37 -
Financial assets 10,100 14,792
-------- --------
Financial liabilities 2022 2021
GBP'000 GBP'000
------------------------------------ -------- --------
Trade payables 2,694 1,006
Other payables 70 -
Accruals 432 243
Lease liability 354 -
Trade and other payables 3,550 1,249
-------- --------
Financial liabilities at amortised
costs 3,550 1,249
-------- --------
Fair value hierarchy
All the financial assets and financial liabilities recognised in
the financial statements which are short-term in nature are shown
at the carrying value which also approximates the fair values of
those short-term financial instruments. Therefore, no separate
disclosure for fair value hierarchy is required for them. The
disclosure on fair value hierarchy does not apply to the financial
leases.
The Group's activities expose it to a variety of financial
risks, mainly credit risk, liquidity risk and interest rate
risk.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. In order to minimise this risk the Group endeavours only to
deal with companies which are demonstrably creditworthy.
The aggregate financial exposure is continuously monitored. The
maximum exposure to credit risk is the value of the outstanding
amount of bank balances. The Group's exposure to credit risk on
cash and cash equivalents is considered low as the bank accounts
are with banks with high credit ratings.
Liquidity risk
The Group currently holds cash balances to provide funding for
normal activity and is managed centrally. Trade and other payables
are monitored as part of normal management routine.
Interest rate risk
The Group's interest-bearing assets comprise of only cash and
cash equivalents. As the Group's interest-bearing assets do not
generate significant amounts of interest, changes in market
interest rates do not have any significant direct effect on its
income.
The maturity of borrowings and other financial liabilities
(representing undiscounted contractual cash-flows) is as
follows:
2021 Within 1 Year
GBP'000
--------------------------- ------------------------
Trade and Other Payables 345
Total 345
------------------------
Over 1 Year
--------------------------- ------------------------
Trade and Other Payables 661
661
2022 Within 1 Year
GBP'000
--------------------------- ------------------------
Trade and Other Payables 1,486
Lease liability 69
------------------------
Total 1,555
------------------------
Over 1 Year
--------------------------- ------------------------
Trade and Other Payables 1,278
Lease liability 285
------------------------
1,563
------------------------
Capital risk management
The Group's capital management objectives are to ensure the
Group's ability to continue as a going concern, and provide an
adequate return to shareholders by pricing products and services
commensurate with the level of risk.
To meet these objectives, the Company reviews the budgets and
forecasts on a regular basis to ensure there is sufficient capital
to meet the needs of the Company through to profitability and
positive cash flow.
All working capital requirements are financed from existing cash
resources.
4. Operating segments
There is only one operating segment. The Group has disaggregated
revenue into various geographic regions in the following table.
2022 2021
GBP'000 GBP'000
----------------------------------------- -------- --------
Revenue from sale of kits and provision
of support services 1,430 1,154
Primary Geographic Markets
Chile 6 8
France 36 32
Italy 132 95
Sweden 1 4
Mexico 6 -
Peru 6 6
Spain 1,207 1,001
Germany - 8
United Kingdom 36 -
Total revenue per geographical
markets 1,430 1,154
----------------------------------------- -------- --------
5. Loss from operations
2022 2021
GBP'000 GBP'000
---------------------------------------- -------- --------
Loss is stated after charging:
Cost of inventory 798 561
Staff costs 1,221 868
Social security 373 224
Royalty expense 67 55
Operating expenses-- External services 1,983 1,354
Directors' salaries and fees 650 586
Research and development expenditure 72 1
Depreciation and amortisation 163 35
---------------------------------------- -------- --------
5a. Auditor's remuneration
2022 2021
GBP'000 GBP'000
----------------------------------------- -------- --------
Fees payable to the company's auditor
for the audit of the company's annual
accounts 25 25
Fees payable to the company's auditor
and its associates for other services:
Accounting and taxation services 4 36
Total 29 61
----------------------------------------- -------- --------
6. Employees and directors
The average number of employees (including directors) in the
Group during the year was made up as follows:
2022 2021
Number Number
------------------------------------ ------- -------
Directors (including non-executive
directors) 7 6
Employees 28 20
------------------------------------
Total 35 26
------------------------------------ ------- -------
The cost of employees (including directors) during the year was
made up as follows:
2022 2021
GBP'000 GBP'000
------------------------------- -------- --------
Salaries and wages (including
directors) 1,859 1,349
Social security costs 373 224
Employee benefits in kind 17 15
Pension costs 24 14
Share based payment expense 102 73
Total 2,375 1,675
-------- --------
Key management personnel compensation
The compensation of key management personnel, principally
directors of GENinCode Plc for the year were as follows:
2022 2021
GBP'000 GBP'000
----------------------------- -------- --------
Directors' salaries 577 506
Social security costs 77 57
Pension costs 16 10
Directors' fees 73 45
Share based payment expense 36 22
-----------------------------
Total 779 640
----------------------------- -------- --------
The above remuneration of directors includes the following
amounts paid to the highest paid Director:
2022 2021
GBP'000 GBP'000
----------------------- -------- --------
Highest paid Director 286 300
----------------------- -------- --------
7. Other income
2022 2021
GBP'000 GBP'000
---------------------- -------- --------
Bank interest income 160 8
Other revenue 13 2
Total 173 10
---------------------- -------- --------
Finance cost
2022 2021
GBP'000 GBP'000
------------------------------------ -------- --------
Discount of lease liability 14 -
Unwinding contingent consideration 6 -
Total 20 -
------------------------------------ -------- --------
8. Income tax
2022 2021
GBP'000 GBP'000
-------------------------------- -------- --------
Current tax credit
R&D tax credit 2020 and 2021 212 -
Total current tax - -
-------- --------
Deferred tax
Accelerated capital allowances (25) (6)
Total current tax (25) (6)
-------- --------
Total tax (charge)/credit 187 (6)
-------------------------------- -------- --------
The charge for the year can be reconciled to the loss in the
consolidated statement of comprehensive income as follows:
2022 2021
GBP'000 GBP'000
----------------------------------- -------- --------
(5,745) (4,137)
Expected tax credit at the UK
corporation tax rate of 19% (1,091) (786)
Movement in unrecognised deferred
tax asset 1,171 826
Capital allowances (41) -
Spanish deferred tax recognised
in excess of UK deferred tax (63) (45)
Expenses disallowed for tax 24 5
Accelerated Capital Allowances (25) (6)
R&D tax credit 2020 and 2021 212 -
Total tax (charge)/credit 187 (6)
----------------------------------- -------- --------
Factors affecting current and future taxation
Per IFRS rules, unrelieved tax losses carried forward of
GBP3,292,336 have not been recognised as a deferred tax asset as
there is currently insufficient evidence that the asset will be
recoverable in the foreseeable future.
The UK budget confirmed in March 2022 an increase in the main
corporation tax rate from 19% to 25% on profits over GBP250,000
with effect from 1 April 2023. Due to the nature of the business
and uncertainty of profit generation the rate has not been
reflected in the consolidated financial statements.
9. Profit of parent company
As permitted by Section 408 of the Companies Act 2006, the
income statement of the parent company is not presented as part of
these financial statements. The parent company's loss for the
financial year was GBP1,906,671 (2021 - loss of GBP1,856,657).
10. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated using the weighted
average number of shares adjusted to assume the conversion of all
dilutive potential ordinary shares.
Reconciliations are set out below.
2021
-----------------------------------------------------------------------
Per-share
Earnings amount
-----------
Weighted
average
number of
GBP'000 shares pence
----------------------------------- --------- ----------- ----------
Basic EPS
Earnings attributable to ordinary
shareholders (4,070) 50,552,205 (8.05)
Diluted EPS
Adjusted earnings (4,070) 50,522,205 (8.05)
----------------------------------- --------- ----------- ----------
2022
-----------------------------------------------------------------------
Per-share
Earnings amount
-----------
Weighted
average
number of
GBP'000 shares pence
----------------------------------- --------- ----------- ----------
Basic EPS
Earnings attributable to ordinary
shareholders (5,920) 95,816,866 (6.18)
Diluted EPS
Adjusted earnings (5,920) 95,816,866 (6.18)
----------------------------------- --------- ----------- ----------
The Company had options issued over 8,248,000 (2021, 8,048,000)
ordinary shares.
Due to the losses incurred from continuing operations in the
years reported, there is no dilutive effect from the existing share
options.
11. Investments
Company
GBP'000
------------------------ --------
Cost
At 1 January 2021 3
Share based payments 28
At 31 December 2021 31
-------------------------- --------
Additions 149
Share based payments 41
As at 31 December 2022 221
-------------------------- --------
11. Investments (cont)
Share based payments relate to costs of employee options in the
Company for employees of its subsidiary.
Country Ownership held Principal activities
Name of entity of incorporation
Holding 2022 2021
----------------------
Ordinary Medical and scientific
GENinCode S.L.U. Spain shares 100% 100% research
GENinCode U.S. Ordinary Medical and scientific
INC. USA shares 100% 100% research
England & Ordinary
GENinCode UK Ltd Wales shares 100% 100% Dormant company
England & Ordinary Medical and scientific
Abcodia Ltd Wales shares 100% - research
Abcodia UK Ltd England & Ordinary 100%- Indirectly - Medical and scientific
Wales shares through Abcodia research
Ltd
Abcodia CS Ltd England & Ordinary 100%- Indirectly - Medical and scientific
Wales shares through Abcodia research
Ltd
Abcodia Inc USA Ordinary 100%- Indirectly - Medical and scientific
shares through Abcodia research
Ltd
Abcodia Limited was purchased by GENinCode Plc on the 27(th)
September 2022, as of this date it owns 100% of Abcodia Limited
together with its subsidiaries. Part of the consideration for the
acquisition of Abcodia Ltd was deferred based on a performance
related contingency, see Note 22. More discussion on the
acquisition is included under Goodwill, see Note 26.
In September 2022, the entire issue share capital of Abcodia
Limited was acquired. Abcodia focusses on the early detection of
familial ovarian cancer in genetically high-risk populations; the
proprietary test (ROCA) developed by Abcodia involves sample
collection, algorithmic analysis, and test result delivery to the
patient, all potentially synergistic with existing GENinCode
operations. An additional revenue stream is expected to accrue to
GENinCode from 2023 from private patients and hopefully NHS
patients from 2024, subject to the development of NICE guidance.
Goodwill was GBP149,000 at 31 December 2022 (2021: GBP0).
12. Intangible assets
Group
Software Patents & Total
Licences
-----------------------------
GBP'000 GBP'000 GBP'000
----------------------------- --------- ---------- --------
Cost
At 1 January 2021 65 116 181
Additions 9 95 104
Disposals (19) - (19)
Movement on retranslation (5) - (5)
At 31 December 2021 50 211 261
----------------------------- --------- ---------- --------
Adjustment relating to 2021 (8) (8)
Movement on retranslation 3 - 3
At 31 December 2022 53 203 256
----------------------------- --------- ---------- --------
Amortisation
At 1 January 2021 26 15 41
Charge for the year 12 17 29
Movement on retranslation (2) - (2)
At 31 December 2021 36 32 68
----------------------------- --------- ---------- --------
Adjustment relating to 2021 (8) (8)
Charge for the year 12 20 32
Movement on retranslation 3 - 3
At 31 December 2022 50 44 94
----------------------------- --------- ---------- --------
Net book value
At 31 December 2021 14 179 193
At 31 December 2022 2 159 161
----------------------------- --------- ---------- --------
12. Intangible assets (continued)
Company
Patents &
Licences
------------------------
GBP'000
------------------------ ----------
Cost
At 1 January 2021 116
Additions 95
At 31 December 2021 211
-------------------------- ----------
Adjustment relating to
2021 (8)
At 31 December 2022 203
-------------------------- ----------
Amortisation
At 1 January 2021 15
Charge for the year 17
At 31 December 2021 32
-------------------------- ----------
Adjustment relating to
2021 (8)
Charge for the year 20
At 31 December 2022 44
-------------------------- ----------
Net book value
At 31 December 2021 179
At 31 December 2022 159
-------------------------- ----------
13. Property, Plant and Equipment
Group Plant Office equipment Total
GBP'000 GBP'000 GBP'000
--------------------- -------- ----------------- --------
Cost
At 1 January 2021 4 10 14
Additions - 41 41
At 31 December 2021 4 51 55
--------------------- -------- ----------------- --------
Additions 1 699 700
At 31 December 2022 5 750 755
--------------------- -------- ----------------- --------
Depreciation
At 1 January 2021 1 2 3
Charge for the year 1 5 6
At 31 December 2021 2 7 9
--------------------- -------- ----------------- --------
Charge for the year 1 92 93
At 31 December 2022 3 99 102
--------------------- -------- ----------------- --------
Net book value
At 31 December 2021 3 43 46
At 31 December 2022 2 651 653
--------------------- -------- ----------------- --------
13. Property Plant and Equipment (cont)
Company Office Equipment
GBP'000
--------------------- -----------------
Cost
At 31 December
2021 35
----------------------- -----------------
Additions 164
At 31 December
2022 199
----------------------- -----------------
Depreciation
At 31 December
2021 3
----------------------- -----------------
Charge for the year 32
At 31 December
2022 35
----------------------- -----------------
Net book value
At 31 December 2021 32
At 31 December 2022 164
----------------------- -----------------
14. Inventory
Group
2022 2021
GBP'000 GBP'000
----------- -------- --------
Inventory 20 14
Total 20 14
----------- -------- --------
15. Trade and other receivables
Group
2022 2021
GBP'000 GBP'000
------------------- -------- --------
Trade receivables 315 234
Other receivables 299 31
Prepayments 103 134
Total 717 399
------------------- -------- --------
Company
2022 2021
GBP'000 GBP'000
-------------------------- -------- --------
NON-CURRENT
Intercompany receivables 5,668 2,791
Total 5,668 2,791
-------------------------- -------- --------
CURRENT
Trade receivables 156 60
Other receivables 296 31
Prepayments 79 77
Total 531 168
-------------------------- -------- --------
General terms for settlement of debt with clients are 30 days
from the date of invoice for private entities and 60 days with
public entities.
The carrying value of trade and other receivables classified at
amortised cost approximates fair value.
16. Financial assets
Group
2022 2021
GBP'000 GBP'000
------------------ -------- --------
Financial assets 16 4
Total 16 4
------------------ -------- --------
The Financial assets relate to Spanish ring-fenced money for
Tender bids and office rent.
17. Cash and cash equivalents
Group
2022 2021
GBP'000 GBP'000
--------- -------- --------
Total 9,732 14,554
--------- -------- --------
Company
2022 2021
GBP'000 GBP'000
--------- -------- --------
Total 9,468 14,243
--------- -------- --------
Where cash at bank earns interest, interest accrues at floating
rates based on daily bank deposit rates.
The fair value of the cash & cash equivalent is as disclosed
above. For the purpose of the cash flow statement, cash and cash
equivalents comprise of the amounts shown above.
18. Trade and other payables
Group
2022 2021
GBP'000 GBP'000
-------------------------------- -------- --------
NON-CURRENT
Contingent consideration (note
22) 155 -
Lease liability (note 24) 285 -
Trade payables 1,278 661
Total 1,719 661
-------------------------------- -------- --------
CURRENT
Trade payables 1,416 345
Accruals 432 243
Tax payable 154 100
Lease liability (note 24) 69 -
Other payables 76 137
Total 2,147 825
-------------------------------- -------- --------
18. Trade and other payables (cont.)
Company
2022 2021
GBP'000 GBP'000
-------------------------------- -------- --------
NON-CURRENT
Contingent consideration (note
22) 155 -
Lease liability (note 24) 285 -
-------------------------------- -------- --------
Total 440 -
-------------------------------- -------- --------
CURRENT
Trade payables 454 100
Accruals 262 238
Lease liability (note 24) 69 -
Tax payable 28 21
Other payables 5 4
Total 818 363
-------------------------------- -------- --------
General terms for settlement of debt are 60 days in general,
after the invoice has been remitted from supplier.
The carrying value of trade and other payables classified at
amortised cost approximates fair value.
19. Provisions and contingencies
Group
2022 2021
GBP'000 GBP'000
-------------- -------- --------
Deferred tax 31 6
Total 31 6
-------------- -------- --------
Company
2022 2021
GBP'000 GBP'000
-------------- -------- --------
Deferred tax 31 6
Total 31 6
-------------- -------- --------
Deferred tax relates to accelerated capital allowances.
20. Share capital
2022 2021
GBP'000 GBP'000
------------------------------- -------- --------
95,816,866 Ordinary shares of
GBP0.01 958 958
Total 958 958
------------------------------- -------- --------
21. Share based payments
The Company has issued share options as an incentive to certain
senior management. All share options granted during the year were
granted under individual agreements and are subject to market and
service vesting conditions. The exercise price is 44 pence on
772,000 shares and the rest are at 15.83 pence.
Each share option converts into one ordinary share of GENinCode
plc on exercise and are accounted for as equity-settled share-based
payments. The equity instruments granted carry neither rights to
dividends nor voting rights .
Weighted average
exercise price
No. options (pence)
--------------------------------- ------------ -----------------
Balance as at 31 December 2021 8,048,000 17.83
--------------------------------- ------------ -----------------
Granted in 2022 200,000 44
--------------------------------- ------------ -----------------
Balance as at 31 December 2022 8,248,000 18.47
--------------------------------- ------------ -----------------
Exercisable at 31 December 2022 - -
The vesting conditions are as follows:-
-- Staff and Board - based on market conditions, estimated 5 at years vesting period
-- Advisors - three years following grant date
The value of share based payments charged to administrative
expenses was GBP101,894.
The fair value is estimated at the date of grant using the
Black-Scholes pricing model, taking into account the terms and
conditions attached to the grant. The following are the inputs to
the model for the equity instruments granted during the period:
Expected life 3-5 years
Expected Volatility 50%
Risk-free interest rate 0.35%
Share price at grant 12.2p to 15.83p
Fair value per award 4.27p to 7.92p
22. Contingent consideration
Group
2022 2021
GBP'000 GBP'000
-------------------------- -------- --------
NON-CURRENT
Contingent consideration 155 -
Total 155 -
-------------------------- -------- --------
Company
2022 2021
GBP'000 GBP'000
-------------------------- -------- --------
NON-CURRENT
Contingent consideration 155 -
Total 155 -
-------------------------- -------- --------
This is in relation to the purchase of Abcodia Limited and is
payable in over 5 years and has been
discounted at the appropriate rate.
An amount of GBP155,000 has been accounted for as Contingent
Consideration, being the GBP149,000 Goodwill amount in addition to
GBP6,000 of post-acquisition finance charges. For more information
please see note 26.
23. Right of use assets
Right of use asset:
Group Buildings
GBP'000
--------------------- --------------------
Cost
Additions 387
At 31 December 2022 387
--------------------- --------------------
Depreciation
Charge for the year 39
At 31 December 2022 39
--------------------- --------------------
Net book value
At 31 December 2021 -
At 31 December 2022 349
--------------------- --------------------
Right of use asset:
Company Buildings
GBP'000
--------------------- --------------------
Cost
Additions 387
At 31 December 2022 387
--------------------- --------------------
Depreciation
Charge for the year 39
At 31 December 2022 39
--------------------- --------------------
Net book value
At 31 December 2021 -
At 31 December 2022 349
--------------------- --------------------
24. Lease liability
Maturity analysis- contractual undiscounted cash flows:
Group
2022 2021
GBP'000 GBP'000
----------------------------------- -------- --------
Less than one year (undiscounted) 91
One to five years (undiscounted) 320 -
More than 5 years (undiscounted) - -
Lease liability included in the financial statements:
Group
2022 2021
GBP'000 GBP'000
----------------- -------- --------
NON-CURRENT
Lease liability 285 -
----------------- -------- --------
Total 285 -
----------------- -------- --------
CURRENT
Lease liability 69 -
Total 69 -
----------------- -------- --------
24. Lease liability (Cont.)
Maturity analysis- contractual undiscounted cash flows:
Company
2022 2021
GBP'000 GBP'000
----------------------------------- -------- --------
Less than one year (undiscounted) 91
One to five years (undiscounted) 320 -
More than 5 years (undiscounted) - -
Lease liability included in the financial statements:
Company
2022 2021
GBP'000 GBP'000
----------------- -------- --------
NON-CURRENT
Lease liability 285 -
----------------- -------- --------
Total 285 -
----------------- -------- --------
CURRENT
Lease liability 69 -
Total 69 -
----------------- -------- --------
An interest expense of GBP13,807 with regards to the lease
liability has been included in the accounts. A discount rate of
7.5% is used in the calculation of the liability and right of use
asset. The lease term is 5 years ending in August 2027.
25. Reserves
The following describes the nature and purpose of each reserve
within equity:
Share capital Amount subscribed for share capital fully paid.
-------------------------- -----------------------------------------------------------
Retained earnings Retained earnings represents all other net gains
and losses and transactions with shareholders
(example dividends) not recognised elsewhere.
-------------------------- -----------------------------------------------------------
Share premium Excess subscribed above nominal value of shares.
Included within share premium are share issue
costs which relate to commissions and other
directly attributable costs.
-------------------------- -----------------------------------------------------------
Foreign currency This represents the net effect of translation
translation of the subsidiaries whose functional currencies
reserve are EUR and USD into GBP the reporting currency.
-------------------------- -----------------------------------------------------------
Share based This reserve compromises the fair value of options
payment reserve share rights recognised as an expense. Upon
exercise of options or performance share rights,
any proceeds received are credited to share
capital.
-------------------------- -----------------------------------------------------------
26. Goodwill
Group Goodwill
GBP'000
--------------------- ---------
Cost
Additions 149
At 31 December 2022 149
--------------------- ---------
Net book value
At 31 December 2021 -
At 31 December 2022 149
--------------------- ---------
Abcodia Limited was purchased for an initial cash price of GBP1,
the fair value of the net assets acquired were GBP1. In addition, a
deferred consideration of up to GBP1m is payable to the vendors
subject to the achievement of an EBIT of GBP1m generated by the
sale of ROCA tests in the UK during the 6-year period following the
date of acquisition. This is payable in two tranches; the first
tranche of GBP350,000 is payable on the achievement of an EBIT of
GBP350,000, and the second tranche of GBP650,000 is payable on the
achievement of a further GBP650,000 of EBIT. Goodwill has been
calculated on the basis of only the first tranche of GBP350,000
being payable to the vendors, discounted to a present value of
GBP149,000 using a rate of 15.3%.
27. Capital commitments
There is no capital expenditure contracted at this year-end
reporting.
28. Related Party Transactions
During the year the Group and Company entered into the following
transactions with related parties:
2022 2021
Related party Transaction GBP'000 GBP'000
--------------------- ----------------------------- -------- --------
Executive director fees,
GBP25,320 was outstanding
Jordi Puig Gilberte 31.12.22 (2021, GBP30,954) 112 103
Felix Frueh Fees 23 -
Huon Gray Fees (pre-Directorship) 5 -
William Rhodes Chairman's fees 45 45
--------------------- ----------------------------- -------- --------
In addition to the above, share options were granted to key
personnel during the year, see the Directors' report for
details.
Compensation of key management personnel of the Group
Key management are those persons having authority and
responsibility for planning, controlling and directing the
activities of the Company. In the opinion of the Board, the
Company's key management are the Directors of GENinCode plc.
Amounts included in the Financial Statements, in aggregate, by
category of related party are as follows:
Group Group
31 December 31 December
2022 2021
Directors GBP'000 GBP'000
---------------------------------------- ------------ -------------
Directors' remuneration (short term
benefits) 650 551
Directors' remuneration (pension cost) 16 10
Directors' remuneration (employers NI) 77 57
Share based payments 36 22
Total 779 640
---------------------------------------- ------------ -------------
29. Contingent liability
There is a contingent consideration relating to the Abcodia
Limited's deferred consideration. The contingent consideration is
on the second tranche of GBP650,000 being payable on the
achievement of GBP1m of EBIT generated by the sale of ROCA tests in
the UK during a 6-year period following the date of acquisition.
Due to current performance and predictions this possibility is
extremely unlikely therefore has not been provided for in the
financial statements.
30. Events after the reporting date
There are no significant adjusting or non-adjusting events after
the reporting date
31. Ultimate controlling party
The Group does not have an ultimate controlling party.
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END
FR BCGDLUDGDGXU
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June 06, 2023 02:00 ET (06:00 GMT)
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