TIDMMDY
RNS Number : 5127E
MDY Healthcare PLC
22 December 2009
MDY Healthcare plc
Preliminary results
22 December 2009:MDY Healthcare plc ("MDY Healthcare" or the "Company"), the
strategic investor in healthcare companies, today announces its preliminary
results for the year ended 30 September 2009.
Financial Highlights
* Total investments valued at GBP9.43 million (30 September 2008: GBP9.16 million)
with cash and cash equivalents of GBP1.13 million (30 September 2008:
GBP2.01 million)
* Net gain on financial assets of GBP0.23 million (2008: GBP2.41 million loss)
* Consolidated net asset value per share as at 30 September 2009 of GBP0.58 (30
September 2008: GBP0.77)
* Net loss after tax for year reduced by 53.9 per cent. to GBP1.73 million (2008:
GBP3.75 million).
* Valuation of strategic private investments maintained prudently at cost,
although all have demonstrated good progress.
Portfolio Highlights
* Medivance continues to make excellent progress, MDY Healthcare invested a
further $1 million in June 2009 in an $8.1 million Series E fundraising
* Stanmore on track for sales of approximately GBP6 million (unaudited) for 12
months ending 31 December 2009, reflecting strong increase in exports during the
year.
* AOI has completed enrolment of its 60 patient clinical study and expects to
launch AscendXTM VCF in the US in mid 2010
* Consumer natural healthcare JV, Trust William, completed first year of trading,
developed impressive and loyal customer base with over 20,000 registered users
of which approximately 2,500 are active customers
David Wong, Executive Director, said:
"MDY Healthcare has made good progress during the last twelve months. We
materially reduced our losses whilst achieving some growth in the value of our
total investments. Our portfolio has developed during the year with new
investments in more mature and liquid public equities backed by solid progress,
with our core holdings in private companies.
"In line with our strategy to diversify our portfolio and focus on international
opportunities, earlier this year we made an investment for a nominal amount in
CERT Limited, a newly formed company, which is in the process of setting up
emergency medical training centres in China. We believe that our focus on
Chinese healthcare opportunities will deliver returns to shareholders due to
management's expertise and strategic relationships in this area."
For further information, please contact:
+-----------------------------------------+----------------------------+-----------+
| MDY Healthcare plc | |
+-----------------------------------------+----------------------------+
| David Wong, Executive Director | +44 (0) 207 647 1800 |
+-----------------------------------------+----------------------------+
| david.wong@MDYhealthcare.com | |
+-----------------------------------------+----------------------------+
| | |
+-----------------------------------------+----------------------------+
| Financial Dynamics | |
+-----------------------------------------+----------------------------+
| Ben Atwell, Susan Quigley | +44 (0) 207 831 3113 |
+-----------------------------------------+----------------------------+
| ben.atwell@fd.com, susan.quigley@fd.com | |
+-----------------------------------------+----------------------------+
| | |
+-----------------------------------------+----------------------------+
| Brewin Dolphin Limited (Nomad) | |
+-----------------------------------------+----------------------------------------+
| Matt Davis, Adam Rudd | +44 (0) 845 213 4730 |
+-----------------------------------------+----------------------------+-----------+
Notes for editors:
About MDY Healthcare
MDY Healthcare plc is a sector specialised strategic investing company quoted on
AIM (ticker symbol: MDY). The company seeks to achieve superior returns for
shareholders by investing globally in companies, both public and private, across
the healthcare sector. The directors, executives and senior advisors have
significant operational and investment experience in the sector and therefore
the ability to identify and review a wide range of potential investments.
Further information can be found on the website www.mdyhealthcare.com.
MDY Healthcare plc
Chairman and Executive Director's review
Overview
During the year, we have continued to evolve our investment portfolio in
healthcare companies and have managed to reduce our losses materially in the
period - down 53.9 per cent. to GBP1.73m from GBP3.75 million in the prior year.
In March 2009, we announced that the Company had acquired stakes in two quoted
healthcare companies, ProStrakan Group plc and Santhera Pharmaceuticals Holding
AG for a total consideration of GBP3 million. The acquisition of these
healthcare assets enhanced the overall liquidity of our portfolio and was
structured in an innovative way using a combination of cash, loan notes and
newly issued shares.
We believe all of our core strategic investments have continued to make good
developmental and commercial progress over the last twelve months, details of
which we include below. Despite there being good evidence of positive progress,
we are taking a cautious approach towards any upwards revaluations of our
private investments at this stage due to general
economic conditions.
As announced in our interim results in June 2009, the Company has sought to
implement an investment strategy to improve shareholder value through
international investment opportunities, with a particular focus on Chinese
healthcare. The Company has sought opportunities in China where it can invest
directly in healthcare businesses to maximise returns. In accordance with this
strategy, in September 2009 the Company announced an investment for a nominal
amount in CERT Limited, a newly formed company, which is in the process of
setting up emergency medical training centres in China.
The Board is currently reviewing additional investment opportunities within CERT
as MDY Healthcare has been invited to invest up to GBP1.5 million in value in an
additional round of fundraising by CERT Limited who are seeking to raise in
aggregate GBP11.5 million, principally from new investors. Any further
investment by MDY Healthcare would be subject to a number of conditions,
including board approval, completion of various contracts by CERT in China, due
diligence and may be subject to shareholder approval, depending on the form of
any consideration payable by MDY Healthcare and the structure of any
transaction. As with the acquisition of healthcare assets earlier this year, the
Board will look at innovative ways of structuring any such investment, having
regard to current cash resources and the interests of and dilutive effects of
any transaction on all shareholders. Although at a very early start up stage,
the Board considers that further investment in CERT could provide MDY Healthcare
with an investment of potentially material value in the context of the Company's
overall investment portfolio. If MDY Healthcare does not proceed with any
further investment in CERT, it will surrender its nominal shareholding acquired
in September 2009 and will explore other Chinese healthcare investment
opportunities. Further updates on the China investment opportunities will be
provided at the appropriate time.
The directors have made a significant reduction in the executive management
costs. Following the departure of Charles Spicer, the Company's former CEO in
February, we reorganised the structure of the MDY Healthcare Board and Alan
MacKay, a non executive director of the Company since July 2006, was appointed
Non - Executive Chairman. David Wong, former Chairman, became Executive
Director. The directors remain committed to reducing overheads and are
exploring a number of ways to offset head office costs in the year ahead.
Investment strategy and policies
Over the last 12 months we have progressed our investment strategy as set out in
our financial results for the year ended September 2008, where we stated we
would expect investments in private companies to comprise the majority of value
in our portfolio and look at international investment opportunities. We have
reduced our exposure to very small capitalisation listed healthcare companies
and only made new investments in publicly traded healthcare companies where the
directors considered, even in the current economic climate, strong returns were
still possible. We will continue to seek to utilize innovative corporate
structures, including new equity issues, to add assets to the portfolio. The
board is also seeking to diversify our portfolio and be less reliant on
realising value from UK healthcare companies by looking at international
investment opportunities, with a particular focus on Chinese healthcare. We
believe that our focus on Chinese healthcare opportunities will deliver returns
to shareholders due to management's expertise and strategic relationships in
this area.
Strategic portfolio review
We have four current strategic investments. Our three largest commitments,
Stanmore, Medivance, and our consumer health business, Trust William are private
and are valued at the cost of the last investment. Our investment in AOI
Medical, Inc, has been marked-to-market downwards as it was still quoted on AIM
as at 30 September 2009 but subsequently de-listed.
Stanmore Implants Worldwide Limited ("SIW")
SIW has performed extremely well since our investment in March 2008. For the
twelve months ending 31 December 2009, SIW is on track for sales of
approximately GBP6 million (unaudited), reflecting strong increase in exports
during the year.
Growth is being driven by increased take up of the METS (modular endoprosthetic
tumour system) product range and particularly strong sales of the non-invasive
Juvenile Tumour Systems. SIW has seen continued good growth generally in
exports, particularly in France, Greece, Hong Kong, India and Australia, and has
sales in 15 countries in total. SIW has applied for FDA marketing approval for
several of its products in the US and anticipates building its US sales in 2010
and beyond.
SIW continues to expand its skilled workforce, re-branding its marketing
activities and developing a new global electronic communication system to
support the work of surgeons. SIW has recently moved into new state-of-the-art
FDA compliant manufacturing facility.
SIW is also making encouraging progress with its clinical trials of ITAP, its
innovative device for directly attaching prosthetic devices to the skeleton of
amputees. The ITAP implant is being developed for a wide-range of applications
including upper and lower limb, digits and craniofacial prostheses. Following
the successful implantation of an upper limb device, SIW has successfully
completed its first lower limb implants and the trial continues at the Royal
National Orthopaedic Hospital in Stanmore and the Royal Orthopaedic Hospital in
Birmingham. SIW hosted a highly-successful international two-day ITAP symposium
in May 2009 with attendees from Continental Europe, the US and Asia.
MDY Healthcare has invested GBP3.0 million in SIW and has approximately 20% of
the issued share capital on a fully-diluted basis. As at 30 September 2009, the
investment was prudently valued at cost.
Medivance, Inc
Medivance, the Colorado-based leader in the emerging field of therapeutic
temperature management, continues to make excellent progress.
Medivance's patented, FDA-approved Arctic Sun device is now used in
approximately 85% of the top twenty US hospital heart programs and thirteen of
the top twenty US neurology programs (as defined by the US News and World 2008
American Best Hospital Report). In addition, it is also being increasingly
adopted by smaller teaching and community hospitals. International adoption of
Arctic Sun continues in Europe, Asia and Australia. Medivance has now achieved
22 quarters of revenue growth in the past 23 quarters and is targeting continued
growth in 2010. Since we first invested in December 2006, Medivance's worldwide
revenues have increased over four times.
We invested approximately $5 million in Medivance prior to the investment of $1
million during the year. In June 2009, we invested a further $1 million
(approximately GBP630,000 at the time of the investment) in an $8.1 million
Series E fundraising in newly issued equity in Medivance. This Series E
financing of $8.1 million was led by affiliates of Black Rock, the US investment
management company, and provided Medivance with funds for working capital,
product development and enabled Medivance favorably to restructure its loans.
The over-subscribed fund raising was supported by existing shareholders.
Following this investment we now hold around 9.8% of the fully-diluted equity.
We have decided to maintain the value in US dollar terms. Given the movement of
the US dollar over the period, this values our holding at GBP4.02 million as at
30 September 2009.
AOI Medical Inc.
In June 2008, AOI commenced its key 60 patient clinical study for its AscendxTM
VCF (Vertebral Compression Fractures) Reduction System. As at 30 June 2009,
surgical procedures had been successfully completed on 49 patients. In September
2009, the company successfully completed enrollment for its 60 patient
confirmatory study for AscendxTM. The directors of AOI expect FDA approval for
AscendxTM and are targeting commercial launch of AscendxTM in mid 2010.
Following the approval of shareholders, AOI cancelled its listing on AIM in
October 2009 to save costs and allow more flexibility for the company going
forward. A move which we supported in view of the fact that the company's
operations and management are primarily US based and there was little liquidity
in the company's shares whilst traded on AIM.
MDY Healthcare has approximately 8.6% of the issued share capital valued, as at
30 September 2009, at approximately GBP0.58 million following mark-to-market
revaluation.
Trust William
Trust William is a multi-channel retail business selling natural healthcare
products direct to consumers via its website, www.trustwilliam.com and a
catalogue supported by a freephone customer services line. Trust William's
product range is based around six key natural active ingredients: Aloe Vera,
Echinacea, Glucosamine, Manuka Honey, Omega 3 and Tea Tree Oil supplemented by a
number of other natural family healthcare products.
As at 30 September 2009, Trust William had completed twelve months of trading.
Sales are encouraging albeit in a difficult retail market. Trust William has
gained a customer base of over 20,000 registered users with approximately 2,500
active customers. We continue to look at strategic ways to increase sales and
reduce costs with a view to Trust William becoming breakeven in the short to
medium term. We have re-designed the Trust William website, providing a high
specification website offering better functionality and easier customer
navigation. New products and ranges can be introduced on to the website in an
efficient and cost effective way, as and when appropriate. The newly designed
website went live at the beginning of December and we expect it to be
instrumental in driving sales, coupled with our new cost effective e-marketing
initiatives.
As at 30 September 2009, MDY Healthcare had invested approximately GBP1.53
million by way of loan finance in Trust William, which is held at cost on the
Company's balance sheet. Trust William is a joint venture of MDY Healthcare. As
MDY Healthcare owns 80% of the issued share capital of Trust William it is
required to consolidate 80% of Trust William's revenue, profits or losses on MDY
Healthcare's consolidated income statement on a joint venture basis.
Accordingly, GBP0.63 million of losses have been included for the twelve months
ended 30 September 2009.
Quoted portfolio
Separately from the strategic investments, we have a portfolio of investments in
publicly traded healthcare companies, which were valued at approximately GBP1.8
million as at 30 September 2009, an increase of GBP0.2 million or 12.5% since 30
September 2008, in part due to the acquisition of stakes in ProStrakan and
Santhera in March 2009 and Primary Health Properties plc in September 2009.
Although the quoted portfolio is maintained at value similar to the value of the
portfolio as at 30 September 2008, the quoted portfolio now contains a smaller
number of higher value and more liquid investments.
The volatility in global equity markets has continued to affect share prices of
smaller capitalisation companies. As highlighted in the Company's results for
the year ended 30 September 2008, the Company has adopted a strategy of holding
the majority of the value of our investments in private companies and selling
down quoted investments where we believe we can utilise realised proceeds for
other more strategic investments. As a result, we have been active during the
period in trading our quoted portfolio and although have been reluctant to
realize cash losses have done so where we believe share prices of particular
investments are unlikely to recover in the short to medium term. During the
year, the Company acquired stakes in publicly traded healthcare companies where
the directors considered, even in difficult markets, strong returns were still
possible such as in the case of our investments in ProStrakan and Primary Health
Properties PLC. We realised some gains during the year by taking advantage of a
strong ProStrakan share price and divested part of our holding.
The quoted portfolio also includes our investments in Allergy Therapeutics plc,
Minster Pharmaceuticals plc, Lombard Medical Technologies plc and Santhera
Pharmaceuticals Holding AG (SWX).
Financial review
At 30 September 2009, MDY Healthcare's total investments (current and
non-current) were valued at GBP9.43 million (30 September 2008: GBP9.16
million). Cash and cash equivalents reduced to GBP1.13 million (30 September
2008: GBP2.01 million) following the investment during the period, primarily in
ProStrakan, Santhera and Medivance, as well as ongoing operating expenses. Net
asset value per share as at 30 September 2009 was GBP0.58 (30 September 2008:
GBP0.77).
Revenue for the period was GBP6,000 (2008: GBP41,000). In the twelve months
ended 30 September 2009, our loss from operations reduced 67% per cent. to
GBP1.24 million (2008: GBP3.77 million). Total reported administration expenses
were GBP1.48 million (2008: GBP1.41 million), which included exceptional costs
of GBP0.195 million relating to the payment for loss of office and approximately
GBP0.11 million for advisers' costs incurred in connection with the issue of the
loan notes and shares and the acquisition of the stakes in ProStrakan and
Santhera.
The net gain on financial assets is GBP0.23 million (2008: GBP2.41 million loss)
which reflects the mark-to-market revaluation of our listed and quoted
investments and the gains and losses on disposals of investments throughout the
year. We made a small exchange profit of GBP0.13 million (2008: GBP0.28 million)
following some improvement in the dollar:sterling rates.
Overall the net loss for the period reduced to GBP1.73 million (2008: GBP3.75
million). Losses per share for the period were 11.15p against 25.63p for the
corresponding period in 2008.
As part of the consideration for the acquisition of the stakes in ProStrakan and
Santhera, MDY Healthcare issued to 3i Group plc, a related party, GBP1,587,842
fixed rate unsecured loan notes (the "Loan Notes"). The Loan Notes will be
redeemable as to 50% on 31 December 2011, with the remaining 50% to be redeemed
on 31 December 2012. However, the Company may, at its election, redeem the Loan
Notes (in whole or in part) at any time on notice. Until the Loan Notes are
redeemed or cancelled in accordance with their terms and conditions, interest
will accrue on the principal amount of Loan Notes at the rate of 8% per annum
and will be payable quarterly in arrears.
Conclusion and outlook
MDY Healthcare has made good progress during the last twelve months. We
materially reduced our losses whilst achieving some growth in the value of our
total investments. Our portfolio has developed during the year with new
investments in more mature and liquid public equities backed by solid progress,
with our core holdings in private companies.
In line with our strategy to diversify our portfolio and focus on international
opportunities, earlier this year we made an investment for a nominal amount in
CERT Limited, a newly formed company, which is in the process of setting up
emergency medical training centres in China. We believe this is a good
opportunity and are examining further potential investment in Cert which we
believe has the potential to deliver returns for both shareholders and the
Company.
MDY Healthcare plc
CONSOLIDATED INCOME STATEMENT
For the year ended 30 September 2009
+----------------------------------------------------+-------+------------+----------+
| | Notes | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+----------------------------------------------------+-------+------------+----------+
| Total revenue | 1 | 136 | 41 |
+----------------------------------------------------+-------+------------+----------+
| Less jointly controlled entity revenue: | 1 | 130 | - |
+----------------------------------------------------+-------+------------+----------+
| Group revenue | 1 | 6 | 41 |
+----------------------------------------------------+-------+------------+----------+
| Cost of sales | | - | - |
+----------------------------------------------------+-------+------------+----------+
| Gross profit | | 6 | 41 |
+----------------------------------------------------+-------+------------+----------+
| Administrative expenses | | (1,475) | (1,409) |
+----------------------------------------------------+-------+------------+----------+
| Other operating income | 4 | 1,578 | 485 |
+----------------------------------------------------+-------+------------+----------+
| Other operating expenses | 4 | (1,345) | (2,891) |
+----------------------------------------------------+-------+------------+----------+
| Results from operating activities | | (1,236) | (3,774) |
+----------------------------------------------------+-------+------------+----------+
| | | | |
+----------------------------------------------------+-------+------------+----------+
| Share of loss of associates and jointly controlled | | (627) | (430) |
| entities using the equity accounting method, net | | | |
| of tax | | | |
+----------------------------------------------------+-------+------------+----------+
| Finance expense | | (68) | - |
+----------------------------------------------------+-------+------------+----------+
| Finance income | | 202 | 457 |
+----------------------------------------------------+-------+------------+----------+
| Net finance (expense)/income | | (425) | 27 |
+----------------------------------------------------+-------+------------+----------+
| Loss before tax | | (1,729) | (3,747) |
+----------------------------------------------------+-------+------------+----------+
| Income tax | | - | - |
+----------------------------------------------------+-------+------------+----------+
| Loss for the year | | (1,729) | (3,747) |
+----------------------------------------------------+-------+------------+----------+
| Attributable to | | (1,729) | (3,747) |
| - Equity holders of the parent | | | |
+----------------------------------------------------+-------+------------+----------+
| Loss for the period | | (1,729) | (3,747) |
+----------------------------------------------------+-------+------------+----------+
| Basic and diluted loss per share | 3 | (11.15)p | (25.63)p |
+----------------------------------------------------+-------+------------+----------+
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the year ended 30 September 2009
+-----------------------------------------------------------+------------+----------+
| | 2009 | 2008 |
+-----------------------------------------------------------+------------+----------+
| | Total | Total |
| | GBP'000 | GBP'000 |
+-----------------------------------------------------------+------------+----------+
| Change in fair value of assets classified as | (560) | (509) |
| available-for-sale | | |
+-----------------------------------------------------------+------------+----------+
| Deferred tax liability arising on net change in fair | - | - |
| value of assets classified as available-for-sale | | |
+-----------------------------------------------------------+------------+----------+
| Net change in fair value of available-for-sale financial | - | - |
| assets transferred to the income statement | | |
+-----------------------------------------------------------+------------+----------+
| Expenses recognised directly in equity in the year | (560) | (509) |
+-----------------------------------------------------------+------------+----------+
| Loss for the financial year | (1,729) | (3,747) |
+-----------------------------------------------------------+------------+----------+
| Total recognised income and expense for the year | (2,289) | (4,256) |
+-----------------------------------------------------------+------------+----------+
| Attributable to | | |
+-----------------------------------------------------------+------------+----------+
| - Equity holders of the Company | (2,289) | (4,256) |
+-----------------------------------------------------------+------------+----------+
| Total recognised income and expense for the year | (2,289) | (4,256) |
+-----------------------------------------------------------+------------+----------+
MDY Healthcare plc
CONSOLIDATED BALANCE SHEET
For the year ended 30 September 2009
+----------------------------------------------------+--------+------------+-----------+
| | Notes | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+----------------------------------------------------+--------+------------+-----------+
| Assets | | | |
+----------------------------------------------------+--------+------------+-----------+
| Non-current assets | | | |
+----------------------------------------------------+--------+------------+-----------+
| Intangible assets | | 89 | 87 |
+----------------------------------------------------+--------+------------+-----------+
| Property, plant and equipment | | 71 | 96 |
+----------------------------------------------------+--------+------------+-----------+
| Investments | 4 | 7,831 | 8,020 |
+----------------------------------------------------+--------+------------+-----------+
| Total non-current assets | | 7,991 | 8,203 |
+----------------------------------------------------+--------+------------+-----------+
| Current assets | | | |
+----------------------------------------------------+--------+------------+-----------+
| Investments | 4 | 1,602 | 1,139 |
+----------------------------------------------------+--------+------------+-----------+
| Inventory - goods for resale | | 12 | 7 |
+----------------------------------------------------+--------+------------+-----------+
| Trade and other receivables | | 466 | 337 |
+----------------------------------------------------+--------+------------+-----------+
| Cash and cash equivalents | | 1,131 | 2,008 |
+----------------------------------------------------+--------+------------+-----------+
| Total current assets | | 3,211 | 3,491 |
+----------------------------------------------------+--------+------------+-----------+
| Total assets | | 11,202 | 11,694 |
+----------------------------------------------------+--------+------------+-----------+
| Liabilities | | | |
+----------------------------------------------------+--------+------------+-----------+
| Non-current liabilities | | | |
+----------------------------------------------------+--------+------------+-----------+
| Loan notes | 8 | 1,588 | - |
+----------------------------------------------------+--------+------------+-----------+
| Total non-current liabilities | | 1,588 | - |
+----------------------------------------------------+--------+------------+-----------+
| Current liabilities | | | |
+----------------------------------------------------+--------+------------+-----------+
| Trade and other payables | | 217 | 420 |
+----------------------------------------------------+--------+------------+-----------+
| Total current liabilities | | 217 | 420 |
+----------------------------------------------------+--------+------------+-----------+
| Net assets | | 9,397 | 11,274 |
+----------------------------------------------------+--------+------------+-----------+
| Equity | | | |
+----------------------------------------------------+--------+------------+-----------+
| Issued capital | | 7,015 | 6,999 |
+----------------------------------------------------+--------+------------+-----------+
| Share premium | | 101,815 | 101,419 |
+----------------------------------------------------+--------+------------+-----------+
| Other reserves | | 22,993 | 22,993 |
+----------------------------------------------------+--------+------------+-----------+
| Retained earnings | | (122,426) | (120,137) |
+----------------------------------------------------+--------+------------+-----------+
| Total equity | | 9,397 | 11,274 |
+----------------------------------------------------+--------+------------+-----------+
MDY Healthcare plc
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 September 2009
+----------------------------------------------------+-------+------------+----------+
| | Notes | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+----------------------------------------------------+-------+------------+----------+
| Cash flows from operating activities | | | |
+----------------------------------------------------+-------+------------+----------+
| Loss for the year | | (1,729) | (3,747) |
+----------------------------------------------------+-------+------------+----------+
| Adjustments for: | | | |
+----------------------------------------------------+-------+------------+----------+
| Depreciation and amortisation | | 66 | 24 |
+----------------------------------------------------+-------+------------+----------+
| Net change in fair value of financial assets at | | (232) | 2,406 |
| fair value through the income statement | | | |
+----------------------------------------------------+-------+------------+----------+
| Foreign exchange (gain)/loss on cash held | | (131) | (284) |
+----------------------------------------------------+-------+------------+----------+
| Interest receivable | | (71) | (155) |
+----------------------------------------------------+-------+------------+----------+
| Operating loss before changes in working | | (2,097) | (1,756) |
| capital and provisions | | | |
+----------------------------------------------------+-------+------------+----------+
| Increase in inventory | | (5) | (7) |
+----------------------------------------------------+-------+------------+----------+
| (Increase)/decrease in trade and other receivables | | (130) | 1,133 |
+----------------------------------------------------+-------+------------+----------+
| Decrease in trade and other payables | | (202) | (73) |
+----------------------------------------------------+-------+------------+----------+
| Cash used by operations | | (337) | 1,053 |
+----------------------------------------------------+-------+------------+----------+
| Net cash outflow from operating activities | | (2,434) | (703) |
+----------------------------------------------------+-------+------------+----------+
| Cash flow from investing activities | | | |
+----------------------------------------------------+-------+------------+----------+
| Interest received | | 71 | 155 |
+----------------------------------------------------+-------+------------+----------+
| Purchase of financial asset at fair value through | | (3,733) | (3,499) |
| the income statement | | | |
+----------------------------------------------------+-------+------------+----------+
| Purchase of intangible assets | | (41) | (87) |
+----------------------------------------------------+-------+------------+----------+
| Purchase of property, plant and equipment | | (2) | (15) |
+----------------------------------------------------+-------+------------+----------+
| Proceeds from sale of financial asset at fair | | 3,131 | 783 |
| value through the income statement | | | |
+----------------------------------------------------+-------+------------+----------+
| Net cash outflow from investing activities | | (574) | (2,663) |
+----------------------------------------------------+-------+------------+----------+
| Cash flows from financing activities | | | |
+----------------------------------------------------+-------+------------+----------+
| Proceeds from the issue of share capital | | 412 | - |
+----------------------------------------------------+-------+------------+----------+
| Proceeds from issue of loan note | | 1,588 | - |
+----------------------------------------------------+-------+------------+----------+
| Net cash inflow from financing activities | | 2,000 | - |
+----------------------------------------------------+-------+------------+----------+
| Net decrease in cash and cash equivalents | 5 | (1,008) | (3,366) |
+----------------------------------------------------+-------+------------+----------+
| Cash and cash equivalents at 1 October | | 2,008 | 5,090 |
+----------------------------------------------------+-------+------------+----------+
| Effect of exchange rate fluctuations on cash held | | 131 | 284 |
+----------------------------------------------------+-------+------------+----------+
| Cash and cash equivalents at end of year | | 1,131 | 2,008 |
+----------------------------------------------------+-------+------------+----------+
MDY Healthcare plc
Notes to the preliminary results for the year ended 30 September 2009
1. Accounting policies
Reporting Entity
MDY Healthcare plc (the 'Company') is a Public Limited Company (traded on AIM)
incorporated in and domiciled in the United Kingdom. The address of the
Company's registered office is 23 Bridge Street, Ellon, Aberdeenshire, Scotland.
The consolidated financial statements of the Company as at and for the year
ended 30 September 2009 comprise the Company and its subsidiaries (together
referred to as the 'Group'). The Group is a healthcare sector specialised
investment company.
Basis of preparation
* Statement of compliance
The Group and parent company financial statements have been prepared and
approved by the directors in accordance with International Financial Reporting
Standards ('IFRSs') as adopted by the EU. The accounting policies set out below
have, unless otherwise stated, been applied consistently to all periods
presented in these consolidated financial statements.
The financial statements were approved by the Board of Directors on 22 December
2009. The financial statements have been prepared on the going concern basis.
b) Basis of Measurement
The financial statements have been prepared on the historical cost basis except
for the following:
* Financial investments at fair value through the income statement are measured at
fair value
* Available for sale financial assets are measured at fair value
c) Functional and presentation currency
The financial statements are presented in pounds sterling, rounded to the
nearest thousand, which is the Company's functional currency. Functional
currencies within the Group consist primarily of pounds sterling.
d) Use of estimates and judgements
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimates are
revised and in any future periods affected. In particular, information about
significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amounts
recognised in the preliminary financial statements is included in Note 4 -
Investments.
2. Segmental reporting
Segmental reporting is presented in respect of the Group's business segments.
The business segments are based on the Group's management and internal reporting
structure. Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated to a segment on
a reasonable basis.
Business segments
The Group comprises the following main business segments:
Investing - representing the Group's activities investing in healthcare related
companies.
Retail - representing the Group's interests in Trust William Limited, the
multi-channel retail joint venture, which sells natural healthcare products
direct to consumers via the internet, mail order and telesales.
+------------------------------+---------+---------+--------+--------+---------+---------+
| | Investing | Retail | Total |
+------------------------------+-------------------+-----------------+-------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Group revenue | 6 | 41 | - | - | 6 | 41 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Gross profit | 6 | 41 | - | - | 6 | 41 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Result from operating | (1,304) | (3,774) | - | - | (1,304) | (3,774) |
| activities | | | | | | |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Share of loss of associate | - | - | (627) | (430) | (627) | (430) |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Finance income | 202 | 457 | - | - | 202 | 457 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Loss before and after tax | (1,102) | (3,317) | (627) | (430) | (1,729) | (3,747) |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Segment assets | 10,766 | 11,562 | 436 | 132 | 11,202 | 11,694 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Segment liabilities | (1,772) | (392) | (34) | (28) | (1,806) | (420) |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Capital expenditure | 2 | - | 41 | 102 | 43 | 102 |
+------------------------------+---------+---------+--------+--------+---------+---------+
| Depreciation | 19 | 19 | 47 | 5 | 66 | 24 |
+------------------------------+---------+---------+--------+--------+---------+---------+
3 Loss per share
+--------------------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+--------------------------------------------------------------+------------+------------+
| Basic | | |
+--------------------------------------------------------------+------------+------------+
| Net loss for the financial period (GBP'000) | (1,729) | (3,747) |
+--------------------------------------------------------------+------------+------------+
| Weighted average number of ordinary shares outstanding | 15,503,851 | 14,623,111 |
+--------------------------------------------------------------+------------+------------+
| Basic loss per ordinary share | (11.15)p | (25.63)p |
+--------------------------------------------------------------+------------+------------+
Basic net loss per share is calculated by dividing the weighted average number
of ordinary shares in issue into the loss after taxation for the year
attributable to ordinary shareholders.There is no difference for 2009 and 2008
between the basic net loss per share and the diluted net loss per share as
ordinary share equivalents from share options have been excluded from the
computation as their effects are anti-dilutive.
4 Investments - Group
+----------------------------------------------+---------+---------+----------+---------+
| | Group | Company |
+----------------------------------------------+-------------------+--------------------+
| | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+---------+---------+----------+---------+
| Subsidiary undertakings (i) | - | - | - | - |
+----------------------------------------------+---------+---------+----------+---------+
| Jointly controlled entities | - | - | 1 | 1 |
+----------------------------------------------+---------+---------+----------+---------+
| Available for sale financial assets (ii) | 348 | 908 | 348 | 908 |
+----------------------------------------------+---------+---------+----------+---------+
| Financial assets designated at fair value | 7,483 | 7,112 | 7,483 | 7,112 |
| through the income statement (iii) | | | | |
+----------------------------------------------+---------+---------+----------+---------+
| | 7,831 | 8,020 | 7,831 | 8,021 |
+----------------------------------------------+---------+---------+----------+---------+
| Financial assets held for trading at fair | 1,602 | 1,139 | 1,602 | 1,139 |
| value through the income statement (iv) | | | | |
+----------------------------------------------+---------+---------+----------+---------+
| | 9,433 | 9,159 | 9,434 | 9,160 |
+----------------------------------------------+---------+---------+----------+---------+
(i) Subsidiary undertakings
+----------------------------------------------+---------+---------+---------+---------+
| | Group | Company |
+----------------------------------------------+-------------------+-------------------+
| Cost | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+---------+---------+---------+---------+
| At 1 October 2008 | - | - | - | 1 |
+----------------------------------------------+---------+---------+---------+---------+
| Assets written down | - | - | - | (1) |
+----------------------------------------------+---------+---------+---------+---------+
| At 30 September 2009 | - | - | - | - |
+----------------------------------------------+---------+---------+---------+---------+
Details of jointly controlled entities are as follows:
+--------------+---------------------+--------------------+------------------+---------------+
| Joint | Country | Principal activity | Class of | % holding |
| venture | of registration | | shares Held | |
| | or incorporation | | | |
+--------------+---------------------+--------------------+------------------+---------------+
| Trust | England & Wales | Website | ordinary shares | 80.1% |
| William Ltd | | distribution | | |
+--------------+---------------------+--------------------+------------------+---------------+
Trust William Limited is considered a Jointly Controlled Entity because the
decisions of the company and board control are split evenly with the other
shareholder.
(ii) Available for sale financial assets
+----------------------------------------------+---------+---------+---------+---------+
| | Group | Company |
+----------------------------------------------+-------------------+-------------------+
| Cost | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+---------+---------+---------+---------+
| At 1 October 2008 | 908 | 1,417 | 908 | 1,417 |
+----------------------------------------------+---------+---------+---------+---------+
| Revaluation - decrease | (560) | (509) | (560) | (509) |
+----------------------------------------------+---------+---------+---------+---------+
| At 30 September 2009 | 348 | 908 | 348 | 908 |
+----------------------------------------------+---------+---------+---------+---------+
In line with the Group's accounting policy, the gain on revaluation of available
for sale financial assets is recognised in the consolidated statement of
recognised income and expense until that financial asset is disposed of.
+--------------------------------------------+---------+
| | GBP'000 |
+--------------------------------------------+---------+
| Fair Value as at 18 December 2009 | GBP335 |
+--------------------------------------------+---------+
(iii) Financial assets designated at fair value through the income statement
+----------------------------------------------+---------+---------+---------+---------+
| | Group | Company |
+----------------------------------------------+-------------------+-------------------+
| Cost | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+---------+---------+---------+---------+
| At 1 October 2008 | 7,112 | 5,037 | 7,112 | 5,037 |
+----------------------------------------------+---------+---------+---------+---------+
| Additions at cost: | 608 | 3,309 | 608 | 3,309 |
+----------------------------------------------+---------+---------+---------+---------+
| Revaluation - increase | 391 | 366 | 391 | 366 |
+----------------------------------------------+---------+---------+---------+---------+
| Revaluation - decrease | (568) | (1,551) | (568) | (1,551) |
+----------------------------------------------+---------+---------+---------+---------+
| Disposals | (60) | (49) | (60) | (49) |
+----------------------------------------------+---------+---------+---------+---------+
| At 30 September 2009 | 7,483 | 7,112 | 7,483 | 7,112 |
+----------------------------------------------+---------+---------+---------+---------+
+----------------------------------------------+----------+
| | GBP'000 |
+----------------------------------------------+----------+
| Fair Value as at 18 December 2009 | GBP7,395 |
+----------------------------------------------+----------+
(iv) Financial assets held for trading at fair value through the income
statement
+----------------------------------------------+---------+---------+---------+---------+
| | Group | Company |
+----------------------------------------------+-------------------+-------------------+
| Cost | 2009 | 2008 | 2009 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+---------+---------+---------+---------+
| At 1 October 2008 | 1,139 | 2,904 | 1,139 | 2,904 |
+----------------------------------------------+---------+---------+---------+---------+
| Additions at cost: | 3,199 | 191 | 3,199 | 191 |
+----------------------------------------------+---------+---------+---------+---------+
| Revaluation - increase | 332 | 54 | 332 | 54 |
+----------------------------------------------+---------+---------+---------+---------+
| Revaluation - decrease | (600) | (1,176) | (600) | (1,176) |
+----------------------------------------------+---------+---------+---------+---------+
| Disposals | (2,468) | (834) | (2,468) | (834) |
+----------------------------------------------+---------+---------+---------+---------+
| At 30 September 2009 | 1,602 | 1,139 | 1,602 | 1,139 |
+----------------------------------------------+---------+---------+---------+---------+
+----------------------------------------------+----------+
| | GBP'000 |
+----------------------------------------------+----------+
| Fair value as at 18 December 2009 | GBP1,348 |
+----------------------------------------------+----------+
5 Analysis of changes in net funds
Group
+---------------------------------------------+---------+---------+------------+---------+
| | 2008 | Cash | Exchange | 2009 |
| | GBP'000 | flow | rate | GBP'000 |
| | | GBP'000 | movements | |
| | | | GBP'000 | |
+---------------------------------------------+---------+---------+------------+---------+
| Cash and cash equivalents | 2,008 | (1,008) | 131 | 1,131 |
+---------------------------------------------+---------+---------+------------+---------+
| Total | 2,008 | (1,008) | 131 | 1,131 |
+---------------------------------------------+---------+---------+------------+---------+
Company
+---------------------------------------------+---------+---------+------------+---------+
| | 2008 | Cash | Exchange | 2009 |
| | GBP'000 | flow | rate | GBP'000 |
| | | GBP'000 | movements | |
| | | | GBP'000 | |
+---------------------------------------------+---------+---------+------------+---------+
| Cash and cash equivalents | 2,004 | (1,012) | 131 | 1,123 |
+---------------------------------------------+---------+---------+------------+---------+
| Total | 2,004 | (1,012) | 131 | 1,123 |
+---------------------------------------------+---------+---------+------------+---------+
6 Reconciliation of movements in equity
+----------------------------------------------------------------+---------+----------+
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+----------------------------------------------------------------+---------+----------+
| Total recognised income and expense for the period | (2,289) | (4,256) |
+----------------------------------------------------------------+---------+----------+
| Issued and issuable share capital including premium, less | 412 | - |
| expenses | | |
+----------------------------------------------------------------+---------+----------+
| Net decrease in equity | (1,877) | (4,256) |
+----------------------------------------------------------------+---------+----------+
| Opening equity | 11,274 | 15,530 |
+----------------------------------------------------------------+---------+----------+
| Closing equity | 9,397 | 11,274 |
+----------------------------------------------------------------+---------+----------+
7 Transactions with key management personnel
During the year ended 30 September 2009, GBP300,000 (year ended 30 September
2008: GBP300,000) was paid to MCM Limited of which Dr David Wong is a retained
consultant.
8 Related party transactions
The Company acquired from 3i Group plc, pursuant to a sale and purchase
agreement dated 20 March 2009, stakes in ProStrakan Group plc and Santhera
Pharmaceuticals Holding AG for a total consideration of GBP3 million. The
consideration payable by MDY Healthcare was satisfied by (i) the payment to 3i
of GBP1 million in cash; (ii) the issue to 3i of 1,648,565 new ordinary shares
in the capital of the Company at a price of 25 pence per share; and (iii) the
issue to 3i of GBP1,587,842 fixed rate unsecured loan notes (the "Loan Notes").
The Loan Notes will be redeemable as to 50% on 31 December 2011, with the
remaining 50% to be redeemed on 31 December 2012. However, the Company may, at
its election, redeem the Loan Notes (in whole or in part) at any time on notice.
Until the Loan Notes are redeemed or cancelled in accordance with their terms
and conditions, interest will accrue on the principal amount of Loan Notes at
the rate of 8% per annum and will be payable quarterly in arrears.
This transaction was a transaction with a related party for purposes of rule 13
of the AIM Rules for Companies by virtue of the fact that 3i was an existing
substantial shareholder of the Company. Furthermore, Alan MacKay, a
non-executive Director of the Company, is an employee of 3i.
The Company has also made an investment for a nominal amount in CERT Limited, a
newly formed company, which is in the process of setting up emergency medical
training centres in China. Medical Consultants and Management Limited, a company
in which David Wong, director, has an interest, is a shareholder in CERT
Limited.
9 The financial statements for the year ended 30 September 2009 have been
prepared by the Company and were approved by the Directors on 22 December
2009.These financial statements do not constitute the full accounts. MDY
Healthcare intends to publish its annual report and accounts for the year ended
30 September 2009 by February 2010.
10 Copies of this announcement are available to members of the public from the
Company's head office, 11 Stanhope Gate, London W1K 1AN. A copy will also be
posted on the Company's website: www.mdyhealthcare.com.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KGMZZVMFGLZM
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