RNS Number:2396E
Genosis PLC
21 September 2007
FOR IMMEDIATE RELEASE 21 SEPTEMBER 2007
GENOSIS PLC
Interim Results Announcement
for the six months ended 30 June 2007
Genosis PLC (AIM - GNOS), the AIM listed company, specialising in consumer
products for reproductive health, announces its interim results for the
six months ended 30 June 2007.
Highlights
* Launch in February 2007 of the Fertell ovarian reserve test on the UK
high street through Alliance Boots and through www.fertell.co.uk;
* Introduction of the Fertell couples test into the US market and on
www.fertell.com for the first time in June 2007. CVS and Longs Drugs, two of
the largest drug store chains in the US are selling the product; it is
unlikely that any further major drug store chain will be selling the product
this year;
* PR launch campaign in the US in June 2007 was encouraging;
* Initial stocking orders of about 7,000 units for the US were below
expectations, and ongoing order levels since June have been disappointing,
despite the start of an extensive media campaign. In the light of this, the
Directors are reviewing operational plans and strategic options and an
announcement will be made in due course;
* Secondary financing of #2.3million (gross, before expenses of
#0.1million) completed in June 2007.
* Key financials:
6 months to 6 months to 12 months to
30 June 2007 30 June 2006 31 Dec 2006
#'000 #'000 #'000
Revenue 514 182 221
Gross profit/(loss) 99 (39) (80)
Operating loss (1,816) (2,239) (3,954)
Retained loss (1,785) (3,544) (1,921)
Cash at bank 3,195 5,349 3,632
Loss per share (10.9p) (12.9p) (23.5p)
(pence)
For further details, please contact:
Today on:
Genosis Paul Bateman, Jonathan Pockson +44 (0)14 8377 4050
Buchanan Communications Lisa Baderoon / Rebecca Skye +44 (0)20 7466 5000
Dietrich
Evolution Securities Tim Worlledge / Bobbie Hilliam +44 (0)20 7071 4300
Commercial and operations
THE FERTELL PRODUCT
The Company's fertility product, Fertell, provides what the Directors believe to
be the first and currently the only US Food and Drug Administration (FDA)
cleared OTC product that allows couples to test male and female fertility
quickly and simply in the privacy of their home.
US SALES AND DISTRIBUTION
We commenced the US consumer launch of Fertell in June 2007. The product is
being sold by CVS, the largest drug store chain in the US with over 6,000 stores
across 43 states, and Longs Drugs, headquartered in California, with over 500
stores on the West Coast. Couples can also buy Fertell directly from
www.fertell.com.
The product launch generated good media coverage across print, television, radio
and online. Notably Fertell was featured on "Good Morning America" (ABC News),
"The Early Show" (CBS) and "The Big Story" (Fox News). The PR programme was
complemented by an advertising campaign across print and web media.
Sales to US drug store chains during the period to 30 June 2007 were 9,368 units
of Fertell; this includes stocking orders of 7,336 units. During the same
period, the Company sold a further 876 units from its US website. These levels
of sales are disappointing given the expenditure on the ongoing media campaign.
UK SALES AND DISTRIBUTION
Since January 2006 Genosis has been selling Fertell in the UK and Ireland under
an exclusive agreement with Alliance Boots plc ("Boots"). In February 2007 the
Company announced that, in addition to the Fertell male and female fertility
test, Boots would be selling Genosis' ovarian reserve test in its larger high
street stores and also through www.boots.com. Both the ovarian reserve test and
the couples fertility test are also sold directly from www.fertell.co.uk.
Sales to Boots during the period to 30 June 2007 were 2,916 and 6,732 for the
Fertell couples test and the ovarian reserve test respectively. During the same
period the Company sold 326 couples tests and 156 ovarian reserve tests via its
UK website. UK sales were below expectations.
CURRENT TRADING AND OUTLOOK
The Directors believe that the key market for the success of Fertell is the USA.
Despite the extensive media campaign, US sales since June 2007 have not reached
the targets set and have been disappointing. It is unlikely that Fertell will be
sold in continental Europe during 2007. In the light of this information, the
Directors are now reviewing their strategic options with regards the company
and, in the meantime, are carrying out a review of operations so as to reduce
costs in the absence of an immediate and significant impact on sales.
Financials
ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
For all periods up to and including the year ended 31 December 2006, the Group
prepared its financial statements in accordance with United Kingdom General
Accepted Accounting Practice (UK GAAP). The Group's financial statements for the
year ending 31 December 2007 will be the first annual financial statements that
comply with International Financial Reporting Standards (IFRS). This financial
information is therefore prepared in accordance with IFRS. All comparative
information has been restated to comply with the new accounting policies
adopted.
The most significant change involved in the adoption of IFRS is the creation of
a foreign exchange reserve as required under IAS 21 (The Effects of Changes in
Foreign Exchange Rates).
The change to equity arising from the introduction of IFRS is a credit of #211k
as at 1 January 2006 following a fair value adjustment required under IAS 32
(Financial Instruments: Disclosure and Presentation) and IAS 39 (Financial
Instruments: Recognition and measurement) and a credit of #7k as at 31 December
2006.
RESULTS
Group turnover in the 6 month period was #514k (6m to 30 June 2006: #182k; year
to 31 Dec 2006: #221k) comprising 60% from the sale of the Fertell product to US
distributors; 8% from the the US web: 28% from Boots and 4% from the UK web.
The Group's gross margin for the period was 19.3%.
Gross R&D expenditure was #91k (6m to 30 June 2006: #50k; year to 31 Dec 2006:
#200k).
Net interest expense was #6k (6m to 30 June 2006: income of #30k; year to 31 Dec
2006: income of #38k) reflecting the interest receipts of #60k (6m to 30 June
2006: #145k; year to 31 Dec 2006: #246k) on cash balances and the #66k cost (6m
to 30 June 2006: #115k; year to 31 Dec 2006: #208k) of servicing the venture
loan taken out on 31 March 2005.
The Group has not recognised any credit in respect of potential R&D tax claims
in respect of either the current period or 2006 prior to submission to and
agreement by HM Revenue & Customs.
Basic and diluted loss per share was 10.9p (6m to 30 June 2006: loss of 12.9p;
year to 31 Dec 2006: loss of 23.5p) based on a weighted average number of shares
in issue of 16,683k (6m to 30 June 2006: 15,496k; year to 31 Dec 2006: 15,496k).
CASH FLOW
The Group had net cash and cash equivalent outflow of #437k (6 months to 30 June
2006: #2,408k; year to 31 December 2006: #4,125k) of which the main elements
were:
*Cash outflow from operating activities: #2,558k (6 months to 30 June
2006: #2,335k; year to 31 December 2006: #3,946k);
*Repayment of loans #238k (6 months to 30 June 2006: #187k; year to 31
December 2006: #397k); and
*Cash from share issues #2,319k (6 months to 30 June 2006: #1k; year to 31
December 2006: #1k).
Cash at 30 June 2007 was #3,195k (30 June 2006: #5,349k; 31 December 2006:
#3,632k).
Consolidated interim income statement
for the 6 months ended 30 June 2007
6 months to 6 months to 12 months to
Note 30 June 30 June 2006 31 Dec 2006
2007
#'000 #'000 #'000
Revenue 2 514 182 221
Cost of sales (415) (221) (301)
Gross profit/(loss) 99 (39) (80)
Distribution costs (833) (1,070) (1,690)
Administrative expenses (631) (471) (986)
Other expenses (451) (659) (1,198)
Operating loss 2 (1,816) (2,239) (3,954)
Interest receivable 60 145 246
Interest payable (66) (115) (208)
Fair value charges - 210 211
Loss before tax (1,822) (1,999) (3,705)
Income tax credit - - 60
Loss after tax (1,822) (1,999) (3,645)
Loss per share
Basic 4 (10.9p) (12.9p) (23.5p)
Diluted 4 (10.9p) (12.9p) (23.5p)
All amounts derive from continuing operations.
Consolidated interim statement of changes in equity
Attributable to equity holders of
the group
Share Share Other Retained Foreign Total
capital premium reserves deficit exchange
reserve
#'000 #'000 #'000 #'000 #'000 #'000
At 1 January 2006 1,549 8,430 8,270 (11,126) - 7,123
Loss for the period - - - (1,999) - (1,999)
Foreign currency - - - - (45) (45)
translation difference
Total recognised loss for - - - (1,999) (45) (2,044)
the period
Credit in respect of share - - - 78 - 78
option plans
Issued share capital 1 - - - - 1
At 30 June 2006 1,550 8,430 8,270 (13,047) (45) 5,158
Loss for the period - - - (1,646) - (1,646)
Foreign currency - - - - (16) (16)
translation difference
Total recognised loss for - - - (1,646) (16) (1,662)
the period
Credit in respect of share - - - 23 - 23
option plans
At 31 December 2006 1,550 8,430 8,270 (14,670) (61) 3,519
Loss for the period - - - (1,822) - (1,822)
Foreign currency - - - - (9) (9)
translation difference
Total recognised loss for - - - (1,822) (9) (1,831)
the period
Credit in respect of share - - - 37 - 37
option plans
Issued share capital 1,784 535 - - - 2,319
At 30 June 2007 3,334 8,965 8,270 (16,455) (70) 4,044
Consolidated interim balance sheet as at 30 June 2007
30 June 30 June 31 Dec 2006
2007 2006
#'000 #'000 #'000
Assets
Non-current assets
Property, plant and equipment 148 158 153
Intangible assets 5 330 170 123
Total non-current assets 478 328 276
Current assets
Inventories 593 370 373
Trade receivables 145 - 31
Other current assets 1,036 422 439
Cash and cash equivalents 3,195 5,349 3,632
Total current assets 4,969 6,141 4,475
Total assets 5,447 6,469 4,751
Equity and liabilities
Equity attributable to equity
holders
Share capital 6 3,334 1,550 1,550
Share premium 8,965 8,430 8,430
Other reserve 8,270 8,270 8,270
Retained deficit (16,455) (13,047) (14,670)
Foreign exchange reserve (70) (45) (61)
Total equity 4,044 5,158 3,519
Non-current liabilities
Long-term borrowings - 413 146
Total non-current liabilities - 413 146
Current liabilities
Trade and other payables 952 445 539
Current portion of long-term 413 448 505
borrowings
Short-term provisions 38 4 42
Other financial instruments - 1 -
Total current liabilities 1,403 898 1,086
Total liabilities 1,403 1,311 1,232
Total equity and liabilities 5,447 6,469 4,751
Consolidated interim cash flow statement
for the 6 months ended 30 June 2007
Note 6 months to 6 months to 12 months to
30 June 30 June 31 Dec 2006
2007 2006
#'000 #'000 #'000
Cash flows from operating
activities
Operating loss (1,816) (2,239) (3,954)
Adjustments to reconcile
operating loss to net cash
flows from operating activities
Depreciation 31 30 59
Amortisation 46 46 93
Share option plans 37 78 101
Foreign exchange (18) (54) (105)
(1,720) (2,139) (3,806)
Working capital adjustments
(Increase)/decrease in trade (711) 375 327
and other receivables
Increase in inventories (220) (97) (100)
Increase/(decrease) in payables 163 (359) (257)
(Decrease)/increase in (4) - 38
provisions
Cash generated from operations (2,492) (2,220) (3,798)
Interest paid (66) (115) (208)
Taxation received - - 60
Net cash used in operating (2,558) (2,335) (3,946)
activities
Cash flows from investing
activities
Purchase of property, plant and (26) (32) (56)
equipment
Interest received 60 145 246
Net cash from investing 34 113 190
activities
Cash flows from financing
activities
Proceeds from issue of share 2,319 1 1
capital
Repayment of long-term (238) (187) (397)
borrowings
Net cash from/(used in) 2,081 (186) (396)
financing activities
Net decrease in cash (443) (2,408) (4,152)
Exchange movement in cash 6 - 27
Net decrease in cash and cash (437) (2,408) (4,125)
equivalents
Cash and cash equivalents at 3,632 7,757 7,757
the beginning of the period
Cash and cash equivalents at 3,195 5,349 3,632
the end of the period
Notes to the interim financial information
1. Accounting policies
Basis of preparation
The consolidated interim results of Genosis PLC for the six months to 30 June
2007 have been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) and International
Financial Reporting Interpretations Committee interpretations that have been
adopted for use in the European Union, and with those parts of the Companies Act
1985 applicable to companies reporting under IFRS.
The interim financial information for the six months ended 30 June 2007 and
comparatives are unaudited but have been reviewed by the auditors and their
report is set out at the end of this statement. These interim accounts do not
constitute statutory accounts as defined in section 240 of the Companies act
1985.
The Group's results have previously been prepared in accordance with United
Kingdom Generally Accepted Accounting Practice (UK GAAP) until 31 December 2006.
UK GAAP differs from IFRS in a number of areas. The effect of such transition on
the Group's loss, net assets and cash flows for the period to 30 June 2007 are
provided in the Transition Statements in this financial information.
Statutory accounts for Genosis PLC for the year to 31 December 2006, on which
the auditors have given an unqualified opinion, subject to a going concern
emphasis of matter paragraph, have been delivered to the Registrar of Companies.
The comparative financial information for that period has been extracted from
such accounts and restated to reflect IFRS adjustments.
The consolidated interim financial information has been prepared under the
historical cost convention except for the revaluation of certain financial
instruments.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and all its subsidiary undertakings made up to 30 June 2007. These
consolidated financial statements exclude intra-group transactions and balances.
Going concern
The Directors believe that the key market for the success of Fertell is the
USA. Despite the extensive media campaign, US sales since June 2007 have not
reached the targets set and have been disappointing. The Group have an ongoing
commitment to this marketing campaign in the short-term.
In the light of this information, the Directors are now reviewing their
strategic options with regards to the company and, in the meantime, are carrying
out a review of operations so as to reduce costs in the absence of an immediate
and significant impact on sales. The Directors have considered detailed profit
and loss account and cash flow forecasts for different strategic options and
have a reasonable expectation that the Group has adequate resources to continue
as an operational business for the foreseeable future.
This financial information has been prepared on the going concern basis,
however, material uncertainty remains over the Group's ability to generate
future sales and to reduce costs, and consequently of the ability of the Group
to continue as a going concern. Therefore, the Group may be unable to realise
its assets and discharge its liabilities in the normal course of business. This
financial information does not contain any adjustments that would result if the
company was not able to continue as a going concern. However, such adjustments
might include the impairment of certain intangible, tangible and current assets.
2. Segmental reporting
The Group has one line of business operating in both UK and US.
6 months to 6 months to 12 months to
30 June 30 June 31 Dec 2006
2007 2006 Restated
#'000 #'000 #'000
Revenue
UK 165 182 221
US 349 - -
514 182 221
Operating loss
UK (1,051) (2,034) (3,241)
US (765) (205) (713)
(1,816) (2,239) (3,954)
3. Taxation
The Group do not expect to generate any taxable profits in the year; as such no
charge for taxation has been recognised in the current period's profit and loss
account.
The Directors have been prudent in not recognising any credit in respect of
potential R&D tax claims in respect of either the current period or 2006 prior
to submission to and agreement by HM Revenue & Customs.
4. Loss per share
Fully diluted loss per share is calculated after showing the effect of
outstanding options in issue. IAS 33 (Earnings per share), requires presentation
of diluted earnings per share. When a company could be called upon to issue
shares that would decrease net profit or increase net loss per share these
potential shares are treated as dilutive. Only options that are 'in the money'
are treated as potentially dilutive, however net loss per share would not be
increased by the exercise of these options. Therefore no adjustment has been
made to dilute loss per share for any outstanding share options.
The calculation of loss per share is based on the following loss and numbers of
shares:
6 months to 6 months to 12 months to
30 June 30 June 31 Dec 2006
2007 2006 Restated
#'000 #'000 #'000
Loss on ordinary activities after
taxation and retained loss for the
period (1,822) (1,999) (3,645)
Weighted average number of shares
('000):
For basic earnings per share 16,683 15,496 15,496
Dilutive effect of share options - - -
For fully diluted earnings per 16,683 15,496 15,496
share
5. Intangible fixed assets
Group
Licences
#'000
Cost:
At 1 January 2007 285
Additions 253
At 30 June 2007 538
Amortisation:
At 1 January 2007 162
Charge for period 46
At 30 June 2007 208
Net book value:
At 30 June 2007 330
At 31 December 2006 123
6. Share capital
AUTHORISED ISSUED
Ordinary shares of Ordinary shares of #0.10
#0.10
Number Nominal Number Nominal
At 31 December 2006 20,000,000 #2,000,000 15,496,556 #1,549,656
Shares issued during the 17,834,611 #1,783,461 17,842,515 #1,784,251
period
At 30 June 2007 37,834,611 #3,783,461 33,339,071 #3,333,907
7,904 Ordinary shares were issued on 11 April 2007 following the exercise of
certain share options at an exercise price of #0.10 per share. 17,834,611 new
Ordinary shares of #0.10 per share were issued on 19 June 2007 at #0.13 per
share.
7. Analysis of net funds
At 1 Cash flow Exchange 30 June
January movement
2007 2007
#'000 #'000 #'000 #'000
Cash at bank and in hand 3,632 (443) 6 3,195
Debt due after one year (146) 146 - -
Debt due within one year (505) 92 - (413)
(651) 238 - (413)
Total net funds 2,981 (205) 6 2,782
8. Approval of the Interim financial information
The Interim financial information was approved by the Board of Directors on 20th
September 2007.
TRANSITION STATEMENTS
First-time adoption of International Financial Reporting Standards
For all periods up to and including the year ended 31 December 2006, the Group
prepared its financial statements in accordance with United Kingdom General
Accepted Accounting Practice (UK GAAP). The Group's financial statements for the
year ending 31 December 2007 will be the first annual financial statements that
comply with International Financial Reporting Standards (IFRS). These transition
statements have been prepared on the basis as set out in note 1 to the interim
financial information.
In preparing these financial statements, the Group has started from an opening
balance sheet as at 1 January 2006, the Group's date of transition to IFRS, and
made those changes in accounting policies and other restatements required by
IFRS 1 (First-time adoption of International Financial Reporting Standards) for
the first-time adoption.
This section explains the principal adjustments made by the Group in restating
its UK GAAP balance sheet as at 1 January 2006, its half year results for the
period ended 30 June 2006 and its previously published UK GAAP financial
statements for the year ended 31 December 2006.
Notes to the transition statements
Note A
Under IFRS, IAS 32 (Financial Instruments: Disclosure and Presentation) and IAS
39 (Financial Instruments: Recognition and measurement) a fair value adjustment
is required in respect of warrants issued. The adjustments increase the retained
deficit at the transition date by #211k. As at 30 June 2006 the fair value of
the warrants is #1k resulting in a credit to the income statement for the 6
months ended 30 June 2006 of #210k. At 31 December 2006 the fair value of the
warrants is #345 creating a credit in the full year income statement of #211k.
Note B
The financial statements for the 12 months to 31 December 2006 and the 2005
comparatives were prepared in accordance with FRS 25 (Financial instruments:
disclosure and presentation) as outlined in note 1 of the 2006 Annual Report.
The original published 2006 Interim results were not prepared in accordance with
FRS 25 but have been adjusted in the above UK GAAP restatement. The Group's loss
for the 6 months to 30 June 2006 has been increased by #45k.
Note C
IAS 18 (Revenue) requires customer prompt settlement discount to be recognised
as a reduction in revenue. This was previously shown as a finance cost.
Note D
Previously under UK GAAP no provision was made for short-term compensated
absences, Under IFRS, a provision for accrued holiday outstanding at each period
end is required.
Note E
Under IFRS, IAS 21 (The Effects of Changes in Foreign Exchange) the income and
expenses of an overseas operation are recognised in the period using exchange
rates at the transaction dates. This has resulted in adjustments of an
additional #5k charge in administrative expenses and #1k credit to finance costs
during the 6 months to 30 June 2006. The corresponding adjustments for the 12
months to 31 December 2006 are an additional charge of #37k in administrative
expenses and #3k credit to finance costs.
Further, IFRS requires any foreign currency translation differences which under
UK GAAP were recognised directly in retained earnings to be held in a separate
component of equity. These are now shown within a foreign exchange reserve. As
at the transition date of 1st January 2006 this was set to #nil. For the 6
months to 30 June 2006 the amount is a debit to the foreign exchange reserve of
#49k and for the year to 31 December 2006 a debit of #95k.
Balance sheet reconciliation
as at 1 January 2006 (transition date)
Note UK GAAP Effect of IFRS
transition
to IFRS
#'000 #'000 #'000
Assets
Non-current assets
Property, plant and equipment 156 - 156
Other intangible assets 216 - 216
Total non-current assets 372 - 372
Current assets
Inventories 273 - 273
Trade receivables 71 - 71
Other current assets 726 - 726
Cash and cash equivalents 7,757 - 7,757
Total current assets 8,827 - 8,827
Total assets 9,199 - 9,199
Equity and liabilities
Equity attributable to equity
holders
Share capital 1,549 - 1,549
Share premium 8,430 - 8,430
Other reserve 8,270 - 8,270
Retained deficit A (10,915) (211) (11,126)
Total equity 7,334 (211) 7,123
Non-current liabilities
Long-term borrowings 650 - 650
Total non-current liabilities 650 - 650
Current liabilities
Trade and other payables 734 - 734
Current portion of long-term 398 - 398
borrowings
Current tax payable 79 - 79
Short-term provisions 4 - 4
Other financial instruments A - 211 211
Total current liabilities 1,215 211 1,426
Total liabilities 1,865 211 2,076
Total equity and liabilities 9,199 - 9,199
Reconciliation of income statement
for 6 months ended 30 June 2006
Note UK GAAP Effect of IFRS
Restated transition
(see note to IFRS
#'000 #'000 #'000
Revenue C 188 (6) 182
Cost of sales (221) - (221)
Gross loss (33) (6) (39)
Distribution costs (1,070) - (1,070)
Administrative expenses D,E (464) (7) (471)
Other expenses D (646) (13) (659)
Operating loss (2,213) (26) (2,239)
Interest receivable 145 - 145
Interest payable C,E (122) 7 (115)
Fair value charges A - 210 210
Loss before and after tax (2,190) 191 (1,999)
Balance sheet reconciliation
as at 30 June 2006
Note UK GAAP Effect of IFRS
Restated transition
(see note to IFRS
B)
#'000 #'000 #'000
Assets
Non-current assets
Property, plant and equipment 158 - 158
Other intangible assets 170 - 170
Total non-current assets 328 - 328
Current assets
Inventories 370 - 370
Other current assets 422 - 422
Cash and cash equivalents 5,349 - 5,349
Total current assets 6,141 - 6,141
Total assets 6,469 - 6,469
Equity and liabilities
Equity attributable to equity
holders
Share capital 1,550 - 1,550
Share premium 8,430 - 8,430
Other reserve 8,270 - 8,270
Retained deficit A,D,E (13,076) 29 (13,047)
Foreign exchange reserve E - (45) (45)
Total equity 5,174 (16) 5,158
Non-current liabilities
Long-term borrowings 413 - 413
Total non-current liabilities 413 - 413
Current liabilities
Trade and other payables D 430 15 445
Current portion of long-term 448 - 448
borrowings
Short-term provisions 4 - 4
Other financial instruments A - 1 1
Total current liabilities 882 16 898
Total liabilities 1,295 16 1,311
Total equity and liabilities 6,469 - 6,469
Reconciliation of income statement
for 12 months ended 31 December 2006
Note UK GAAP Effect of IFRS
transition
to IFRS
#'000 #'000 #'000
Revenue C 227 (6) 221
Cost of sales (301) - (301)
Gross loss (74) (6) (80)
Distribution costs D,E (1,652) (38) (1,690)
Administrative expenses C,D,E (992) 6 (986)
Other expenses F (1,195) (3) (1,198)
Operating loss (3,913) (41) (3,954)
Interest receivable 246 246
Interest payable (208) (208)
Fair value charges A - 211 211
Loss before tax (3,875) 170 (3,705)
Income tax expense 60 - 60
Loss after tax (3,815) 170 (3,645)
Balance sheet reconciliation
as at 31 December 2006
Note UK GAAP Effect of IFRS
transition
to IFRS
#'000 #'000 #'000
Assets
Non-current assets
Property, plant and equipment 153 - 153
Other intangible assets 123 - 123
Total non-current assets 276 - 276
Current assets
Inventories 373 - 373
Trade receivables 31 - 31
Other current assets 439 - 439
Cash and cash equivalents 3,632 - 3,632
Total current assets 4,475 - 4,475
Total assets 4,751 - 4,751
Equity and liabilities
Equity attributable to equity
holders
Share capital 1,550 - 1,550
Share premium 8,430 - 8,430
Other reserve 8,270 - 8,270
Retained deficit A,D,E (14,724) 54 (14,670)
Foreign exchange reserve E - (61) (61)
Total equity 3,526 (7) 3,519
Non-current liabilities
Long-term borrowings 146 - 146
Total non-current liabilities 146 - 146
Current liabilities
Trade and other payables D 532 7 539
Current portion of long-term 505 - 505
borrowings
Short-term provisions 42 - 42
Total current liabilities 1,079 7 1,086
Total liabilities 1,225 7 1,232
Total equity and liabilities 4,751 - 4,751
INDEPENDENT REVIEW REPORT TO GENOSIS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007 which comprises the consolidated interim
income statement, the consolidated interim statement of changes in equity, the
consolidated interim balance sheet, the consolidated interim cash flow
statement, related notes 1 to 8 and the Transition statements. We have read the
other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company, in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are also responsible for ensuring that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
First-time adoption of International Financial Reporting Standards
As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted for use in the EU. Accordingly, the interim report has been prepared in
accordance with the recognition and measurement criteria of IFRS and the
disclosure requirements of the Listing Rules that would be applicable if the
company were admitted to the Official List.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Emphasis of matter - Going concern
Without qualifying our review conclusion, we draw attention to the disclosures
made in note 1 of the financial information concerning the group's ability to
continue as a going concern. There is a material uncertainty over the future
sales and reduction of costs that are required to meet the Directors' plans.
Notwithstanding the strategic options that are being considered by the
Directors, this material uncertainty may cast significant doubt about the
company's ability to continue as a going concern. The financial information does
not include the adjustments that would result if the company was unable to
continue as a going concern as it is not practicable to determine or quantify
them. However such adjustments might include the impairment of certain
intangible, tangible and current assets.
Deloitte & Touche LLP
Chartered Accountants
Cambridge
20th September 2007
NOTES TO EDITORS
Genosis is a consumer products company focused on reproductive health. Genosis'
first product Fertell(R), an at-home fertility testing kit for men and women,
went on sale in the UK in January 2006. Fertell(R) was designed and developed by
Genosis and is the first and currently the only OTC product on the high street
that allows couples to accurately test both male and female fertility quickly
and simply in the privacy of their own home. Genosis' product Fertell(R) makes
the breakthrough of taking accepted technology from the laboratory into easy to
use fertility testing devices for testing at home.
Fertell(R) is easy to use. The woman's test is used in a similar way to a
pregnancy test but, unlike any other test that is available for use at home, it
assesses the quality of the egg she releases. For the male test, the man has to
produce a sample, push a button and twist a switch and, in just over an hour,
the test will show him if he has enough motile sperm that can swim to reach an
egg (based on WHO standards). Fertell(R) has been through clinical trials in the
UK and the US and has been shown to be more than 95% accurate when compared with
established laboratory tests run in fertility clinics. Fertell(R) has been
cleared for sale in the US by the FDA and has received CE marking for sale in
Europe.
The Company's first retail distribution agreement is with Alliance Boots, the
UK's biggest healthcare retailer with more than 1200 stores nationwide. The
Boots Distribution Agreement is exclusive for the UK until November 2008. Boots
sells Fertell(R) through its high street branches in the UK and the Republic of
Ireland and through the internet. The Fertell(R) kit is also available through
Genosis' own website, www.fertell.co.uk. In the US the product is sold through
CVS and Longs Drugs and also through the internet www.fertell.com.
The market for Fertell(R) could potentially be quite large. There are in excess
of 500 million couples of reproductive age worldwide, and approximately 1 in 7
or about 80 million have problems conceiving. There is a significant increase in
the industrialised world in the number of women deferring childbearing until
after 30. This has a marked effect on fertility. Although male factor
infertility is the single most common cause of infertility, the key prognostic
indicator of a couple's fertility is the age of the female partner, with
fertility rates, upon treatments such as IVF, halving between the ages of 30 and
38. In the UK, couples most frequently turn to their medical providers for
assistance, but typically are advised to wait and try to conceive for a further
period of up to 12 months before returning for tests and treatment. The key
benefit of Fertell(R) is that it allows men and women to assess their fertility
status in the privacy of their own home and, the earlier couples can identify
whether a problem exists, the earlier they can seek treatment and the more
likely they are to conceive.
www.genosis.com www.fertell.com www.fertell.co.uk
- E N D S -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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