RNS Number:7247A
Gyrus Group PLC
04 September 2002
Embargoed for release, Wednesday 4 September 2002
Gyrus Group PLC
Interim Results for the six months ended 30 June 2002
Gyrus Group PLC ("Gyrus" or "the Group"), whose innovative medical devices focus
on the management of tissue using less invasive surgical techniques, today
announces interim results for the six months ended 30 June 2002.
Key highlights of the period:
* Group revenues up 127% to #39.1 million (H1 2001: #17.2 million)
* Gross margins demonstrating continued growth to 60.2% (H1 2001: 50%)
* Operating profit (before goodwill amortisation) was #3.2 million (H1 2001:
loss of #0.9 million). The net loss before tax of #0.8 million (H1 2001:
#3.2 million) included #3.3 million of goodwill amortisation
* Earnings per ordinary share (excl. goodwill and exceptionals) amounted to
2.9p (H1 2002: loss of 1.3p). Including goodwill and exceptionals, the loss
per share was 1.1p (H1 2001: loss per share of 6.6p)
* Organic sales grew 44%
* During the period all business units have met or exceeded management's
expectations:
- Gyrus ENT (Head & Neck surgery) sales up 28% sequentially; flat year
on year
- Gyrus Medical Inc (lower abdominal surgery) sales up 54% year on year
- Gyrus International Ltd (non-NAFTA) sales up 42% year on year
- Gyrus Medical Ltd (R & D systems & generators) sales up 21% year on
year
* Net debt as at 30 June 2002 of #20.5 million. Terms of Bank of Scotland
facility have been renegotiated: extended from #25 million to #30.0
million repayable on 31 December 2005, giving cash and available borrowings
of in excess of #11 million
Commenting on the results, Brian Steer, executive Chairman, today said:
"We are excited by the success of the Group to date. The Board believes its
strategies and direction will make this company a profitable and fast growing
world-class device company. The direction of our investment in new product
development parallels the surgical trend to less invasive treatments, and is
particularly appropriate to a worldwide acceleration of the movement to day case
surgery.
The successful integration of its acquisitions and the associated investment in
technology has, the Board believes, significantly improved value and will result
in enhanced profitability, cash inflows and growth as we approach 2003."
Enquiries:
Gyrus Group PLC On 4/09/2002:
Brian Steer, executive Chairman Tel: 0207 831 3113
Dr Mark Goble, Group Managing Director Thereafter:
Tom Murphy, Finance Director Tel: 01189 219750
Financial Dynamics Tel: 0207 831 3113
Edward Bridges/Sarah Manners
Chairman's Statement
Introduction
The focus of the Group for the six months to 30 June 2002 has been to complete
the integration and consolidation of the businesses acquired in June 2001 with a
particular focus on driving profitability and cash generation. During the
period all business units within the Group have met or exceeded our
expectations. The Group has grown sales substantially, both organically and by
acquisition, while improving gross margins across the business significantly and
became cash generative in the second quarter.
Gyrus is now firmly positioned as a world leader in the management of tissue
using less traumatic techniques. Notwithstanding the focus on driving operating
profits and cash generation in all its global markets, the Group has increased
its expenditure on R&D with special focus on new product development in ENT and
application of the Group's proprietary PlasmaKinetic ("PK") technology to a
wider range of applications. The global markets for the Group's products
continue to grow.
First half sales for the group were #39.1 million (H1 2001: #17.2 million); an
increase of 127% year on year and an increase of 18% compared to the second half
of 2001 (H2 2001: #33.1 million). Organic sales growth (i.e. excluding
acquisitions) on a year on year basis was 44%, led by the strong growth in Gyrus
Medical Inc. and Gyrus International Ltd.
Operating profit excluding goodwill amortisation was #3.2 million for the first
half compared to an operating loss of #0.9 million in the first half of 2001 and
grew 37% from the second half of 2001 (#2.4 million). Gross margin improved
strongly to 60.2% for the half as compared to 50% in the same period of 2001.
Operating expenses were closely controlled over the period.
The Group reported a loss before tax of #0.8 million (loss of 1.1p per share)
compared to a loss before tax of #3.2 million (loss of 6.6p per share) in the
first half of 2001. Included in this loss was #3.3 million of goodwill
amortisation.
Cash and available borrowings were #6.1 million on 30 June 2002 as compared with
#9.3 million at 31 December 2001. Cash used in this period was invested in
capital expenditure to support the infrastructure investment in Gyrus ENT and
the generator placement strategy of the Group. The Group became cash generative
in the second quarter as top line growth drove profitability and operating cash
inflows, after seeing its cash availability fall to #4.1 million during the
period. Net debt was #20.5 million at 30 June 2002 compared to #17.9 million at
31 December 2001.
The Group also has completed an expansion and extension of its revolving debt
facility with the Bank of Scotland. The facility has been increased to #30
million from its existing #25 million and extended to 31 December 2005. Cash
and available borrowings are now in excess of #11.0 million.
Global Business Review
The strategy of the Group remains focused on the less traumatic surgical
management of tissues during procedures performed in head and neck (ENT) and the
lower abdomen (laparoscopy and urology). This may be achieved by a number of
means, including the use of PK technology that will cut, coagulate and vaporise
tissue with minimal damage to adjoining tissue. The benefits to patient,
surgeon and healthcare providers include reduced operating time, quicker
recovery, a shorter hospital stay and a reduction in cost. In a number of cases
it has been possible to treat previously hospitalised patients in a day case
environment, notably in the treatment of BPH (benign enlargement of the
prostate).
It is twelve months since the acquisition of Smith & Nephew's Ear, Nose and
Throat (ENT) business and Somnus Medical Technologies Inc. which together now
forms Gyrus ENT. These two businesses have now been integrated, the strategy
determined and the major investment in new product development to initiate
growth completed. Gyrus ENT now forms the fourth operating division of the
group, joining Gyrus Medical Inc, Gyrus Medical Ltd. and Gyrus International
Ltd. as illustrated in the following chart:
The Four Operating Divisions
Focus Location
Gyrus ENT The integration of S+ N's ENT division and Memphis, USA
Somnus, focusing on surgical applications
within the head and neck market.
Gyrus Medical Inc Surgical procedures performed on the lower Minneapolis, USA
abdomen
Gyrus International Ltd Responsible for Group sales and Reading, UK
distribution outside the NAFTA area.
Gyrus Medical Ltd Responsibility for the Mitek and Gynecare Cardiff, UK
business and will be the centre of
excellence for generator development and
manufacture.
The four operating divisions are all performing at or above expectations
contributing to the overall corporate goal. Each of these divisions has a
well-defined role within the Group driven by a focused operating plan.
Gyrus ENT is expected to begin to generate significant growth beginning in Q4
2002 as the new products reach the market. The growth will result from our
investment in new product development and the ongoing integration of PK
technology into the product portfolio.
Gyrus Medical Inc. continues to spearhead the revenue growth benefiting from a
niche market leadership position, the ongoing success of its product portfolio
and the integration of PK technology.
Gyrus International Ltd. maintains its rapid growth as it focuses its resources
on selected markets as part of a narrow and deep strategy to establish
significant market shares in its target countries. Its goal is to improve Group
sales contributions outside the US from 11% to the industry average of 40%.
Gyrus Medical Ltd. is increasingly focused on supplying products to our
marketing partners, Mitek and Gynecare (both subsidiaries of Johnson & Johnson)
together with our other divisions. The transfer of all capital manufacturing
for the Group to its facilities in Cardiff will impact costs favourably as will
the growing sales volumes of PK products by the Group.
The now integrated acquisitions allow us to rapidly grow the business on the PK
platform in selected markets where our technologies have a demonstrable benefit.
We have identified three key business drivers that we believe are critical to
the achievement of this strategic objective:
* A world-class independent sales force who promote our products directly to
the surgeon.
* The development of our technologies to generate a stream of differentiated
products that have proven positive outcomes for both surgeons and patients.
* The placement and control of capital equipment to create workstations in
surgical suites that enable the surgeon to perform multiple surgical
functions with a dedicated range of procedure specific instruments.
Since its IPO in 1997 the Group has achieved three important goals:
* We have successfully transitioned from a technology-driven, research-based
venture to a cash-generative commercial company with a strong management
team, an excellent product portfolio and a wide customer base. This is the
result of an intelligent acquisition strategy coupled with the value-adding
rollout of our technology.
* We have seamlessly transferred the commercial management of the company
from the founders to a professional group of managers reporting to me. This
has allowed Mark Goble, Group Managing Director, to focus on development and
clinical application of the technologies throughout the Group and to
continue to ensure proper communication with investors, advisers and the
media.
* The US acquisitions have successfully established the Group as a leading
device company in the all-important American market thereby demonstrating
our ability to successfully manage a major US presence.
The next six months will see further consolidation of this position as the Group
continues to grow well ahead of the market, and to maintain the drive toward
improving profitability. Beyond the year-end we will continue to build on this
strong platform both from a prolific stream of new products and new market entry
opportunities. We continue to keep a watching brief for additional acquisition
opportunities that might further accelerate our rapid and profitable growth.
Divisional Business Review
Gyrus ENT
For the first half, Gyrus ENT's revenues were $23.3 million. Revenues remained
virtually flat against the same period in the prior year ($23.5 million).
However, the restructuring of the Somnus business and the actions taken to
address the previously disclosed slow down in sales post-acquisition has
resulted in this business growing 28% over H2 2001. The number of generators
placed has increased by 30% during the period, which provides a strong base from
which to drive utilization.
Management focus in the period centred on the effective consolidation of its
information and distribution systems previously provided by Smith and Nephew and
in new product development and market initiatives to fuel growth. Gyrus ENT has
successfully completed all transition aspects including the integration of
Somnus to the former Smith & Nephew business.
Highlights of first half performance include the introduction of Sepra sinus
packing products, the SMartTM Stapes product, and the Somnoplasty(R) Temperature
Controlled Radio FrequencyTM (TCRFTM) head and neck products.
The G-1 generator was introduced in Q2; it is produced in-house at a
significantly lower cost and provides the platform for integration of the PK
technology later this year. Gyrus ENT received clearance from the United States
Food and Drug Administration for use of the Somnoplasty system for tonsil
reduction. This approval provides for the treatment of tonsil enlargement, a
common cause of upper airway obstruction in adolescents and adults and it
represents an opportunity of $150 million and broadens the opportunity in the $1
billion head and neck surgery market.
The new ENT DiegoTM System, a powered dissector for the endoscopic removal of
diseased tissues, polyps, and bony obstructions in the nasal cavity and sinuses,
known as Functional Endoscopic Sinus Surgery (FESS), features many advanced
ergonomic and clinical advantages. The handpiece helps the surgeon avoid
fatigue and allows finely controlled tissue resection. The dissecting blades
are capable of 360-degree rotation to allow the surgeon to reorient the blade
during use. In addition, the system features a unique "straight through" tissue
suction path, which is less prone to the clogging often seen in other powered
dissectors. Occurring ahead of plan, this introduction demonstrates our focus
on driving growth in our ENT business and recapturing our share of this $60
million sinus and rhinology powered dissector market, a market with double-digit
growth.
At the American Academy of Otolaryngology and Head & Neck Surgery meeting in San
Diego this September, Gyrus ENT will introduce its multi-function Head & Neck RF
workstation. Designed and developed by Gyrus Medical Ltd. in Cardiff, the
workstation incorporates the Somnoplasty Temperature Controlled Radio Frequency
(TCRF) and our PK technologies. This generator will allow the head and neck
surgeon total flexibility in less traumatic tissue management; TCRF providing
the ability to shrink tissue and PK to excise, vaporize, and contour tissue with
reduced bleeding and scarring. This combination enables Gyrus ENT to broaden
its product portfolio to include disposable instruments for new head and neck
indications including a tonsil set to address this market.
Gyrus Medical Inc
In the first half of 2002, Gyrus Medical Inc. continued to display significant
revenue growth in its business. Total revenues were $14.7 million an increase of
54% as compared to the first half of 2001.
Gyrus Medical Inc.'s direct surgical business (laparoscopy and urology) grew to
$10.7 million, a 55% increase over the same period in 2001. Of particular
interest is the rapid expansion of the innovative PK tissue management
technology in the marketplace. As of 30 June Gyrus Medical Inc., which markets
the PK technology to Gynaecologists, Urologists, and General Surgeons, had
placed 424 generators that produced $3.2 million of disposable revenue. PKs'
ability to improve surgery, reduce operating time, and enhance clinical outcomes
has led to this significant growth. In addition, its versatility and wide array
of corresponding surgical instruments (in excess of 15) gives surgeons the
ability to further utilize the PK platform in several new and emerging minimally
invasive surgical procedures.
Gyrus Medical Inc. grew its gross margins in the first half of 2002 to 62% from
58% in the first half of 2001. This increase is due to the overall growth of
the business, combined with manufacturing efficiencies, and an increase in
average selling price due to the shift to the PK platform. Gyrus continues to
be the market leader in the fast growing laparoscopic bipolar instrument market
with annual growth estimated by Millennium Health (a Canadian market research
company) at 24% through to 2004.
Gyrus Medical Inc. also experienced strong growth with its marketing partners in
the first half of 2002. Partner business increased to $4.0 million; leading the
way was Guidant's saphenous vein harvesting business, which increased 60% to
$2.3 million over the same period last year. As with the growth of the direct
surgical business, the growth of partner business further illustrates surgeons'
desire to utilize Gyrus Medicals' bipolar and PK technology.
In the second half of 2002, Gyrus Medical Inc. will continue to leverage the PK
platform with the introduction of new products and the launch of a full line of
surgical instruments for bariatric surgical procedures a gastric bypass
procedure to treat morbidly obese patients in Q3. The Company will continue to
expand its reach to hospitals in the U.S. market by adding an additional 15
independent sales representatives.
Gyrus International Ltd
A strong first half year for Gyrus International Ltd with sales growth on a
proforma basis of 42% over the prior year to #6.4 million (H1 2001 #4.5 million
proforma). Without acquisitions the sales growth was 38%. Geographically the
GIL business is divided into three regions with the UK contributing 32% of total
sales, Europe 37% and the Far East 31%. Sales results for these regions are
reported for ENT and Surgical (laparoscopy and urology). All regions achieved
significant growth over the previous year with Surgical products up 100% and ENT
up 44%. ENT sales into Japan were particularly notable in the first six months
where our distributor, Kobayashi (appointed late 2001) achieved an increase in
sales of 80% over 2001 total year sales.
National distributors have been appointed and trained in most of our target
markets providing high quality representation for Gyrus technology. This global
distribution network is fully supported by an experienced management team,
customer services, marketing and technical support, with distribution from the
company headquarters at Reading, UK.
Our 2002 strategy focuses resources on a limited number of target markets where
analysis has identified the greatest potential for corporate products. Within
these markets we are adding resource to bring a unique level of support to our
dealer relationships, accelerating generator placement and creating the platform
and environment for new product launch.
Gyrus Medical Ltd
Our business with our marketing partners, Mitek and Gynecare, continues to grow
with product sales revenues rising 24% to #6.3 million (H1 2001: #5.1 million).
The Mitek business has continued to see end user growth in the US, albeit at a
slower rate, 6% compared with H1 2001. This growth rate reflects an increase in
competition within the market, particularly the US. The growth rate in
arthroscopy reported by Arthrocare Inc., VAPRs' principal competitor, was 3%.
Growth outside the US continues to be in excess of 20% albeit from a smaller
revenue base. Further extensions to the platform are planned for later in 2002
that will increase the competitive advantage of the VAPR system.
There has been strong demand for the Versapoint system by Gynecare as stocking
orders have pulled forward demand from H2 2002. As a consequence we may see a
commensurate reduction in second half revenues.
The development and manufacture of generators continues to grow. In the period
there have been 538 PlasmaKinetic generators shipped to Gyrus Medical Inc. and
Gyrus International Ltd. These support the laparoscopic and the endourology
business globally. Additionally there were 476 VAPR generators shipped to
Mitek, 185 Versapoint generators shipped to Gynecare, and 117 of the G1
generators shipped to Gyrus ENT.
Research and Development
R&D expenditure for the half was #4.4 million. Although this is a 63% increase
in spend over last year, as a percentage of sales it has reduced from 14% to
11%. More than half of this was for the development of products in ENT. The
principal elements of this development activity were for Diego and the G1
generator, both of which have been launched.
We expect R&D activity to continue at this level as a percentage of revenues.
The chief focus will be in the ENT/head and neck surgery sectors. The next
significant milestone will be the launch of the G2 generator, which brings
together the Somnoplasty (tissue shrinkage) and PK technologies (vaporising,
cutting, sealing) as a platform for the head and neck surgery sector. Linked to
this is the development of innovative new instruments. Recent trials of several
instrument versions have been conducted in conjunction with the Groups Advisory
Board members, with very encouraging results. Many of the instruments are now
in parallel development for launch before year-end.
In Urology, the introduction of PK Zip Wing in May marked a new competitive edge
for the PK system. This technology optimises the generator capability to
provide integrated cutting and coagulation as well as dissecting and grasping
from the same instrument. The launch of this product is the first of many that
will provide a unique multi-functional capability across all the speciality
markets we serve.
A considerable amount of resource has also been directed at evaluating vessel
sealing under a variety of clinical circumstances. This work has substantiated
the fact that vessel sealing using the PK platform can produce seals which
withstand burst pressures at least equivalent to those produced using mechanical
devices, such as clips, staples and ligatures. The site of the sealing also
heals very quickly, with enhanced collagen in-growth producing a permanent
closure of veins, arteries and even lung tissue. The scientific understanding
of the variables involved in this process has led to a number of potential
iterations of the PK Seal product, the development of which will be pursued
through the remainder of the year.
Following the success of recent clinical trials conducted using the PK system in
laparoscopic bariatric surgery, a gastric bypass procedure to treat morbidly
obese patients, the introduction of bariatric surgery instrument range has been
brought forward to Q3 2002.
As a result of these activities, the introduction of the PK Zip Seal (Open and
Laparoscopic) and the PK endometriosis and PK adenoidectomy instruments have
been rescheduled into H1 2003.
Recruitment for the pilot study on use of PKII to treat skin lesions has been
completed and the overall study will be completed with follow-up data during Q3.
The results to date have proven very encouraging. Pre-clinical trials
recently commenced in the US where the performance benefits of the system were
immediately apparent to the users. Data from the US study will be available in
Q4 to support the move to clinical studies.
Outlook and Conclusion
We are excited by the success of the Group to date. The Board believes its
strategies and direction will make this company a profitable and fast growing
world-class device company. The direction of our investment in new product
development parallels the surgical trend to less invasive treatments, and is
particularly appropriate to a worldwide acceleration of the movement to day case
surgery.
It is clear that the change of direction which has, since its public offering,
taken the company from a single technology, single customer enterprise to a
company with a broad base of technology, products and customers has proved to be
in the best interest of the company and its shareholders, given the higher
margins and faster growth of the direct sector of the business. The successful
integration of its acquisitions and the associated investment in technology has,
the Board believes, significantly improved value and will result in enhanced
profitability and growth as we approach 2003.
We have consistently emphasised the importance of the breadth and depth of
quality management in building a global business. This focus and the success of
the highly motivated team have been instrumental in achieving the goals to which
we are committed. The additions to the management over the last year have
fitted in well with the existing team. As the Group continues to develop, we
will continue to strengthen senior management resources both at Divisional and
Group level.
Gyrus is a successful international business, but with a specific focus on the
important US markets which account for 85% of our sales currently. The foreign
exchange translation was $1.44 to the pound sterling in the first half.
However, thus far the foreign exchange rate for the second half has been $1.54
to the pound sterling. Based on these levels and future currency movements in
the remainder of the second half, there could be some translation effect when
reporting in pounds sterling.
I would like to thank management, employees and our independent group of sales
representatives for their contribution and commitment to achieving the goals we
have set for the Group. I thank our business partners, professional advisers
and suppliers for their support and our shareholders for their faith and belief
in the exciting prospects for our business.
Brian L Steer
Executive Chairman
Gyrus Group PLC
Consolidated profit and loss accounts
Six months Six months 12 months
ended 30 June ended 30 June ended 31
2002 2001 December 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
Turnover - continuing operations 39,079 17,200 50,338
Turnover
Existing operations 39,079 14,251 31,862
Acquisition - 2,949 18,476
39,079 17,200 50,338
Cost of sales (15,536) (8,356) (21,439)
Gross profit 23,543 8,844 28,899
Selling and distribution expenses
before exceptional expenses (10,970) (4,377) (13,099)
exceptional expenses - - (349)
Total selling and distribution expenses (10,970) (4,377) (13,448)
Research and development expenses
before exceptional expenses (4,436) (2,665) (6,874)
exceptional expenses - - (291)
Total research and development expenses (4,436) (2,665) (7,165)
General and administrative expenses
- ordinary (4,916) (2,689) (7,412)
- exceptional - (1,255) (1,742)
- goodwill (3,316) (1,233) (4,550)
Total general and administrative expenses (8,232) (5,177) (13,704)
Operating profit (loss) - continuing operations
profit (loss) before exceptional items and goodwill 3,221 (887) 1,514
exceptional expenses - (1,255) (2,382)
goodwill (3,316) (1,233) (4,550)
Operating loss - continuing operations (95) (3,375) (5,418)
Operating loss
Existing operations (95) (2,023) (3,446)
Acquisitions - (1,352) (1,972)
(95) (3,375) (5,418)
Interest, net (752) 169 (549)
Loss on ordinary activities before taxation (847) (3,206) (5,967)
Taxation (30) (47) (123)
Loss on ordinary activities after taxation (877) (3,253) (6,090)
Profit (loss) per ordinary share
Basic and diluted (1.1)p (6.6)p (9.2)p
Excluding goodwill & exceptional items 2.9p (1.3)p 1.3p
Gyrus Group PLC
Consolidated balance sheets
As at 30 June As at 30 June As at 31 Dec
2002 2001 2001
(unaudited) (unaudited) (audited)
#000 #000 #000
Fixed assets
Goodwill and intangibles 123,898 128,376 127,272
Tangible assets 14,669 11,161 12,532
138,567 139,537 139,804
Current assets
Stocks 15,434 12,805 13,587
Debtors 13,963 9,826 13,653
Investments - cash on deposit - 6,936 -
Cash at bank and on hand 1,605 1,007 2,757
31,002 30,574 29,997
Creditors: Amounts falling due within one year (11,478) (15,297) (12,042)
Net current assets 19,524 15,277 17,955
Total assets less current liabilities 158,091 154,814 157,759
Creditors: Amounts falling due after more than one (20,991) (12,356) (18,555)
year
Net assets 137,100 142,458 139,204
Capital and reserves
Share capital and premium 154,019 154,179 153,931
Merger reserve 3,860 3,561 3,860
Profit and loss account (20,779) (15,282) (18,587)
Equity shareholders' funds 137,100 142,458 139,204
Reconciliation of movements in shareholders' funds
As at 30 June 2002 As at 30 June 2001 As at 31 Dec 2001
(unaudited) (unaudited) (unaudited)
#000 #000 #000
At beginning of period 139,204 48,985 48,985
Loss for the financial period attributable to
equity shareholders (877) (3,253) (6,090)
New share capital issued (net of expenses) 88 96,316 96,367
Share related awards 56 54 107
Gain (loss) on foreign currency translation (1,371) 356 (165)
At end of period 137,100 142,458 139,204
Gyrus Group PLC
Consolidated cashflow statements
Six months Six months 12 months
ended ended ended 31
30 June 2002 30 June 2001 December
2001
(unaudited) (unaudited) (audited)
#000 #000 #000
Net cash flow from operating activities 2,348 (814) (6,476)
Returns on investment and servicing of finance
Interest received 22 181 265
Interest paid (749) (5) (1,019)
Interest elements in finance lease rentals (25) (33) (66)
Net cash flows from returns on investments
and servicing of finance (752) 143 (820)
Taxation (30) (47) (123)
Capital expenditure and financial investments
Purchase of tangible fixed assets (4,825) (1,912) (4,883)
Purchase of intangible fixed assets - - (275)
Proceeds of sale of tangible fixed assets - - 14
(4,825) (1,912) (5,144)
Acquisition
Purchase of subsidiary undertakings - (108,077) (109,108)
Net cash acquired with subsidiaries - 2,371 2,371
- (105,706) (106,737)
Cash outflow before management of liquid resources and financing (3,259) (108,336) (119,300)
Management of liquid resources - (1,236) 5,700
Financing
Capital element of finance lease rental payments (73) (78) (198)
Bank loans 2,595 12,393 17,798
Proceeds of issue of share capital net of costs 88 96,315 96,367
Net cash inflow (outflow) from financing 2,610 108,630 113,967
Increase (decrease) in cash in the period (649) (942) 367
Gyrus Group PLC
Reconciliation of net cash flow to movements in net funds
Six months Six months 12 months
ended 30 June ended 30 June ended 31
2002 2001 December
2001
(unaudited) (unaudited) (audited)
#000 #000
Increase (decrease) in cash in the period (649) (942) 367
Cash outflow from (increase) decrease in debt
and lease financing (2,522) (12,315) (17,600)
Increase (decrease) in liquid funds - 1,236 (5,700)
(3,171) (12,021) (22,933)
Inception of new finance leases (47) (28) (53)
Translation difference - 40 -
Change in net funds (3,218) (12,009) (22,986)
Net funds at beginning of period (16,087) 6,899 6,899
Net funds at end of period (19,305) (5,110) (16,087)
Analysis of net funds
As at 30 June As at 30 June As at 31 Dec
2002 2001 2001
(unaudited) (unaudited) (audited)
#000 #000
Cash at bank and in hand (net of overdraft) 1,605 985 2,254
Finance leases (410) (531) (436)
Debt due after one year (20,500) (12,500) (17,905)
Current asset investments - 6,936 -
Net funds at end of period (19,305) (5,110) (16,087)
Reconciliation of operating loss to cash flow from operating
activities
Six months Six months 12 months
ended 30 June ended 30 June ended 31
2002 2001 December
2001
(unaudited) (unaudited) (audited)
#000 #000 #000
Operating loss (95) (3,375) (5,418)
Goodwill amortisation 3,316 1,233 4,550
Licences amortisation 42 - 16
Depreciation charges 1,780 696 1,824
Loss on disposal of fixed assets 5 5 51
Increase in stocks (2,924) (180) (904)
Increase in debtors (491) (2,892) (6,303)
Increase (decrease) in creditors 31 3,645 (577)
Share related awards 56 54 107
Exchange movement on fixed assets 628 - 178
2,348 (814) (6,476)
Gyrus Group PLC
Notes to the Interim Statement
1. Basis of preparation
The interim statement has been drawn up under the same accounting policies as
those used for the financial statements for the year ended 31 December 2001.
The interim financial statements do not constitute statutory accounts as they
are unaudited. They have however been reviewed by KPMG Audit Plc and their
report is set out below. The annual report and accounts of Gyrus Group PLC for
the year ended 31 December 2001 received an unqualified audit report and have
been filed with the Registrar of Companies.
2. Segmental Information
Segmental Information Six months Six months 12 months
ended 30 ended 30 June ended 31
June 2002 2001 December 2001
(unaudited) (unaudited) (audited)
Turnover by Destination #000 #000 #000
United Kingdom and Europe 5,968 2,529 6,535
North America 30,630 14,315 40,794
Rest of World 2,481 356 3,009
39,079 17,200 50,338
By Origin
United Kingdom 9,988 7,249 15,700
North America 29,091 9,951 34,638
39,079 17,200 50,338
3. Loss per share
The loss per share is based on losses attributable to ordinary shareholders of
#877,000 for the six months ended 30 June 2002, #3,253,000 for the six months
ended 30 June 2001, and #6,090,000 for the twelve months ended 31 December 2001,
and on 82,971,002 ordinary shares for the six months ended 30 June 2002,
49,647,659 ordinary shares for the six months ended 30 June 2001 and 66,422,608
ordinary shares for the twelve months ended 31 December 2001, being the weighted
average number of shares during the periods.
4. Total recognised gains and losses in the period
The total recognised gains and losses in the period ended 30 June 2002 comprises
the loss made in the period shown above, a loss of #1,371,000 in the net
investment in foreign enterprises arising from changes in currency exchange
rates, and a gain of #56,000 re share related awards.
5. Dividend
The directors do not recommend payment of a dividend.
6. Approval
This Interim Statement was approved by the Board of Directors on 3 September
2002.
7. Copies of the Interim Statement
Copies of the interim statement will be sent to all shareholders and further
copies are available at the Company's registered office, Fortran Road, St
Mellons, Cardiff, CF3 0LT.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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