TIDMMDY
RNS Number : 4751O
MDY Healthcare PLC
30 June 2010
MDY Healthcare plc
Interim results
30 June 2010:MDY Healthcare plc ("MDY Healthcare" or the "Company"), the
strategic investor in healthcare companies, today announces its interim results
for the six months ended 31 March 2010.
Financial Highlights
· Total investments valued at GBP9.33 million (30 September 2009: GBP9.43
million) with cash and cash equivalents of GBP0.46 million (30 September 2009:
GBP1.13 million)
· Consolidated net asset value per share as at 31 March 2010 of GBP0.54 (30
September 2009: GBP0.58)
· Net loss after tax for period reduced by 43 per cent to GBP0.66 million
(2009: GBP1.15 million)
· Administration costs narrowed by 45.5 per cent to GBP0.48 million (2009:
GBP0.88 million)
· Valuations of investments in Medivance and Stanmore, maintained prudently
at cost, although both have demonstrated good progress
Portfolio Highlights
· Stanmore look set to continue sales growth in 2010 and are making
encouraging progress with ITAP, its innovative prosthetic device
· Continued strong performance from Medivance - now well placed to deliver
shareholder value for MDY Healthcare
· AOI expects FDA approval for AscendxTM in Q4 2010 following the 510(k)
filing with the FDA in February 2010
Alan MacKay, Chairman, said: "During the first half we focused on cutting costs
significantly and consequently we have reduced our loss by 43%. Our core
strategic healthcare holdings have made solid progress during the period, with
Stanmore and Medivance growing revenues strongly. We welcomed Grahame Cook and
Martin Hunt to the Board in May, two seasoned industry executives who are
currently conducting a strategic review of the business with a view to
maximising long term shareholder value."
For further information, please contact:
+------------------------------------+------------------------------------+
| MDY Healthcare plc | |
+------------------------------------+------------------------------------+
| Alan MacKay, Chairman | +44 (0) 207 647 1800 |
+------------------------------------+------------------------------------+
| | |
+------------------------------------+------------------------------------+
| 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 | +44 (0) 845 270 8600 |
+------------------------------------+------------------------------------+
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 and executives 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's review
Overview
During the last four months we have restructured the Company's Board. In May
2010, we announced the appointment of two high-calibre non-executive directors,
Grahame Cook and Martin Hunt, who will be instrumental in driving the Company's
strategy going forward and delivering value from the Company's investments.
David Wong stepped down from the Board in March 2010 and Derek Ablett,
Non-executive Director, announced that he will be retiring from the Board with
effect from today.
The directors have continued to execute the Company's planned cost reduction
program; total administration expenses were GBP0.48 million in the first half of
the financial year compared to GBP0.88 million for the corresponding period in
2009. The directors anticipate making further cost reductions in the future to
conserve cash and liquid resources and these will be detailed in the Company's
year end results. The Company has given notice (effective 30 June 2010) to
terminate the consulting contract through which David Wong's services are
provided to the Company. As the consulting contract is terminable on 6 months'
notice, it is anticipated that the consulting arrangement will terminate on 30
December 2010. David will remain as an employee of the Company under the terms
of his existing service agreement with the Company.
The last six months have been characterized by continued volatility in public
markets, particularly within the healthcare sector. Certain of our quoted
investments suffered falling share prices in the reporting period and
consequently have been marked-to-market through the income statement at lower
valuations than at 30 September 2009.
We remain confident about the underlying quality of our strategic private
investments, with Medivance and Stanmore showing encouraging sales growth from
core businesses and promising developments in their respective innovative
devices. Details of our investments are included below.
Despite there being good evidence of positive progress, particularly with our
investments in Medivance and Stanmore, we are taking a cautious approach towards
any upwards revaluations of our private investments at this stage due to general
market conditions and the absence of any third party/independent valuation
events. We will review the position at the year-end.
Investment strategy
During the period, the Company did not make any new strategic investments, but
has continued trading the quoted portfolio, and made divestments where the
directors considered it appropriate. The Company continues to manage its
strategic investments with a view to delivering value to MDY Healthcare
shareholders as the investment portfolio matures. The Company works closely
with the boards of our key strategic investee companies, discussing corporate
strategy with a view to achieving, for MDY Healthcare in the medium to long
term, value creating realizations of our investments.
After careful consideration, the Board has decided against pursuing its strategy
of investing in Chinese healthcare. Therefore, the Board has terminated its
nominal investment in CERT Limited and has decided against any further
investment in CERT. The newly appointed non-executive directors will be looking
at other strategic options to deliver value to shareholders.
Strategic portfolio review
We now have four 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. AOI is valued on the basis of the
last quoted share price immediately prior to de-listing in October 2009.
Stanmore Implants Worldwide Limited ("SIW")
MDY Healthcare invested GBP3.0 million in SIW and has approximately 20% of the
issued share capital on a fully-diluted basis. SIW has performed extremely well
since our investment in March 2008. As at 31 March 2010, the investment was
prudently valued at cost. For the twelve months ended 31 December 2009, SIW had
sales of GBP5.6 million (unaudited), reflecting a strong increase in exports
during the year. The directors of SIW believe the outlook for sales performance
in 2010 looks set to continue this growth with the 12 months to December 2010
targeted at GBP6.5million (unaudited).
Growth continues to be driven by an increased take up of the METS (modular
endoprosthetic tumour system) product range and a growing increase in sales of
the non-invasive Juvenile Tumour Systems. SIW has seen an increase in demand
from the UK along with continued good growth in exports, particularly to France,
Greece, Hong Kong, India and Australia, with sales now in 15 countries. SIW has
applied for FDA marketing approval for several of its products in the US and
anticipates building its US sales in 2010 to capitalise on the growing level of
interest from the USA.
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. This innovative "online design" system allows UK
based implant designers and overseas surgeons to communicate both verbally and
visually and it continues to be a major source of competitive advantage that
will help to drive further export sales.
SIW continues to make encouraging progress with 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. The Trans femoral ITAP trial
continues at the Royal National Orthopaedic Hospital in Stanmore and the Royal
Orthopaedic Hospital in Birmingham. ITAP has also been successful in the
treatment of a number of amputee pets at Fitzpatrick Referrals, the clinic of
Dr. Noel Fitzpatrick in Godalming, Surrey. ITAP has attracted significant
interest from several institutions both in the UK and overseas in relation to
exploiting the commercial possibilities for this technology.
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
24 quarters of revenue growth in the past 25 quarters and is targeting continued
growth in 2010. Since we first invested in December 2006, Medivance's worldwide
revenues have increased more than fivefold.
We have invested approximately $6 million in Medivance through a series of
investments. Our last investment was in June 2009 when 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 to restructure its loans on favourable
terms. We hold around 9.8% of the fully-diluted equity and have decided to
maintain the value in US dollar terms. Given the movement of the US dollar to
sterling exchange rate over the period, this values our holding at GBP4.3
million as at 31 March 2010.
AOI Medical Inc.
In June 2008, AOI commenced its key 60 patient clinical study for its AscendxTM
VCF (Vertebral Compression Fractures) Reduction System. 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 in late
Q4 2010 following filing of the 510(k) with the FDA earlier this year. AOI is
targeting commercial launch of AscendxTM for early 2011. The company is
currently seeking additional funding to sustain operations through the FDA
approval process.
Following the approval of shareholders, AOI cancelled its trading facility on
AIM in October 2009. We were supportive of the de-listing as it allowed the
company to save costs (in view of the fact the operations and management are
predominantly US based) and gave the company more flexibility.
MDY Healthcare has approximately 8.6% of the issued share capital valued, as at
31 March 2010, at approximately GBP0.58 million.
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. As at 31 March 2010,
Trust William had completed eighteen months of trading and had a customer
database of approximately 23,000, with approximately 2000 active customers.
Trust William has re-designed its website, providing a high specification
website which offers better functionality and easier customer navigation, whilst
at the same time reducing costs for the operation and hosting of the website.
Changing over to the new website has resulted in a weakening of sales due to the
loss of search engine ranking, however it is believed that sales will improve in
the coming months. After the period end, costs have been reduced to a level
where they are more commensurate with the level of sales. We continue to review
areas where cost savings can be made.
Trust William is a jointly controlled entity 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 into its
consolidated income statement on a jointly controlled basis. Accordingly,
GBP0.18 million of losses have been included for the six months ended 31 March
2010 (2009: GBP0.38 million loss).
Quoted portfolio
Separately from the strategic private investments, we have a portfolio of
investments in healthcare companies traded on the London Stock Exchange and the
Swiss Exchange, which were valued at approximately GBP1.5 million as at 31 March
2010, a decrease of GBP0.3 million since 30 September 2009 (adjusted to take
into account the delisting of AOI). The decrease in the value of publicly
traded assets is due to some divestment of shares and a deterioration in market
valuations of public traded healthcare stocks. The value of publicly traded
assets after the end of the period has been affected by an adverse clinical
trial result for Santhera, one of the publicly traded stocks MDY Healthcare
acquired in March 2009. With continued volatility in global equity markets, we
have been reluctant to realise cash losses but have sold down investments where
the Board considered it appropriate.
The quoted portfolio includes our investments in ProStrakan Group plc and
Santhera Pharmaceuticals Holding AG, together with small investments in Allergy
Therapeutics plc and Lombard Medical Technologies plc as well as minor
investments in other stocks quoted on the London Stock Exchange.
ProStrakan (LSE: PSK) is a specialty pharmaceutical company engaged in the
development and commercialisation of prescription medicines for the treatment of
unmet therapeutic needs in major markets. ProStrakan has shown good growth in
its share price since our investment in March 2009 and we have sold down a
proportion of our holding to take advantage of strong share prices.
ProStrakan's share price's has weakened slightly since the period end but
remains above our original acquisition price of GBP0.615 per share.
Santhera (SWX: SANN) is a Swiss specialty pharmaceuticals company focusing on
the discovery, development and marketing of small molecule pharmaceutical
products for the treatment of orphan neuromuscular diseases. Santhera's share
price has fallen since our investment in March 2009 and has deteriorated
materially since the end of the period after Santhera announced in May 2010 that
its US Phase III clinical trial, evaluating Catena for the treatment of
Friedreich's Ataxia, missed its primary endpoint. We will continue to monitor
Santhera's progress closely.
Financial review
At 31 March 2010, MDY Healthcare's total investments (current and non-current)
were valued at GBP9.33 million (30 September 2009: GBP9.43 million) and we had
cash and cash equivalents of GBP0.46 million (30 September 2009: GBP1.13
million). The Company's cost reduction programme will continue in the second
half of the financial year in order to conserve the Company's cash resources.
Net asset value per share as at 31 March 2010 was GBP0.54 (30 September 2009:
GBP0.58).
Revenue for the period was GBP34,000 (2009: GBPNIL). In the six months ended 31
March 2010, our loss from operations reduced by 59% per cent. to GBP0.73 million
(2009: GBP1.77 million). Total administration expenses reduced by 45.5 per
cent. to GBP0.48 million (2009: GBP0.88 million). The Company is in discussions
with HM Revenue & Customs in relation to a potential VAT liability, further
information is provided in note 8 to the Interims statement.
The net loss in fair value of financial assets of GBP0.14 million (2009: GBP0.89
million loss) reflects the marked to market revaluation of our listed and quoted
investments following the ongoing difficult stock market conditions discussed
above. We made an exchange profit of GBP0.27 million (2009: GBP1.0 million
profit) following some improvement in the dollar:sterling exchange rate.
Overall the net loss for the period reduced by 43% to GBP0.66 million (2009:
GBP1.15 million). Losses per share for the period were 4.06p as against 7.85p
for the corresponding period in 2009.
As part of the consideration for the acquisition of the stakes in ProStrakan
Group plc and Santhera Pharmaceuticals Holding AG in March 2009, MDY Healthcare
issued to 3i Group plc, a related party, GBP1,587,842 in fixed rate unsecured
loan notes (the "Loan Notes"). The Loan Notes will be 50% redeemable on 31
December 2011, with the remaining 50% to be redeemed on 31 December 2012. 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
During the first half of the financial year, we focused on cutting costs
significantly and consequently we have reduced our loss by 43%. The cost
reduction programme will continue in the second half of the financial year in
order to conserve the Company's cash resources until the optimal time to realise
its key investments. Our core strategic holdings have made solid progress during
the period, with Stanmore and Medivance growing revenues strongly. We welcomed
Grahame Cook and Martin Hunt to the Board in May and they are currently
appraising strategic alternatives to deliver value from the Company's
investments in the future.
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 March 2010
+---------------------------------+-------+-----------+-----------+-----------+
| | | Unaudited | Unaudited | Audited |
| | | six | six | year |
| | | months to | months to | ended |
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
+---------------------------------+-------+-----------+-----------+-----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
| Revenue | 2 | 34 | - | 6 |
+---------------------------------+-------+-----------+-----------+-----------+
| Administrative expenses | | (483) | (876) | (1,475) |
+---------------------------------+-------+-----------+-----------+-----------+
| Other operating income | | 40 | 131 | 1,578 |
+---------------------------------+-------+-----------+-----------+-----------+
| Other operating expenses | 4 | (322) | (1,021) | (1,345) |
+---------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
| Results from operating | | (731) | (1,766) | (1,236) |
| activities | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
| Share of loss of associates and | | (178) | (380) | (627) |
| jointly controlled entities | | | | |
| using the equity accounting | | | | |
| method, net of tax | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
| Finance income | | 312 | 1,000 | 202 |
+---------------------------------+-------+-----------+-----------+-----------+
| Finance expense | | (63) | (4) | (68) |
+---------------------------------+-------+-----------+-----------+-----------+
| Loss before tax | | (660) | (1,150) | (1,729) |
+---------------------------------+-------+-----------+-----------+-----------+
| Income tax expense | | - | - | - |
+---------------------------------+-------+-----------+-----------+-----------+
| Net loss for the period | | (660) | (1,150) | (1,729) |
+---------------------------------+-------+-----------+-----------+-----------+
| Basic and diluted loss per | 3 | (4.06)p | (7.855)p | (11.15)p |
| share | | | | |
+---------------------------------+-------+-----------+-----------+-----------+
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the six months ended 31 March 2010
+----------------------------------------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Audited |
| | six | six | year |
| | months to | months to | ended |
| | 31 March | 31 March | 30 |
| | | | September |
+----------------------------------------+-----------+-----------+-----------+
| | 2010 | 2009 | 2009 |
| | Total | Total | Total |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-----------+-----------+-----------+
| Change in fair value of assets | - | (754) | (560) |
| classified as available-for-sale | | | |
+----------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------+-----------+-----------+-----------+
| Income and expenses recognised | - | (754) | (560) |
| directly in equity in the period | | | |
+----------------------------------------+-----------+-----------+-----------+
| Loss for the period | (660) | (1,150) | (1,729) |
+----------------------------------------+-----------+-----------+-----------+
| Total recognised income and expense | (660) | (1,904) | (2,289) |
| for the period | | | |
+----------------------------------------+-----------+-----------+-----------+
| Attributable to | | | |
+----------------------------------------+-----------+-----------+-----------+
| - Equity holders of the Company | (660) | (1,904) | (2,289) |
+----------------------------------------+-----------+-----------+-----------+
| Total recognised income and expense | (660) | (1,904) | (2,289) |
| for the period | | | |
+----------------------------------------+-----------+-----------+-----------+
CONSOLIDATED BALANCE SHEET
For the six months ended 31 March 2010
+---------------------------------------+-------+-----------+-----------+-----------+
| | Notes | Unaudited | Unaudited | Audited |
| | | as at | as at | as at |
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
| | | GBP'000 | GBP'000 | |
| | | | | GBP'000 |
+---------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Non-current assets | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Intangible assets | | 82 | 106 | 89 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Property, plant and equipment | | 61 | 83 | 71 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Investments | 5 | 7,993 | 7,330 | 7,831 |
+---------------------------------------+-------+-----------+-----------+-----------+
| | | 8,136 | 7,519 | 7,991 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Current assets | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Investments | 5 | 1,340 | 3,549 | 1,602 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Inventory - goods for resale | | 16 | 9 | 12 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Trade and other receivables | | 549 | 547 | 466 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Cash and cash equivalents | | 458 | 1,112 | 1,131 |
+---------------------------------------+-------+-----------+-----------+-----------+
| | | 2,363 | 5,217 | 3,211 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Total assets | | 10.499 | 12,736 | 11,202 |
+---------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Liabilities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Non-current liabilities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Borrowings | | (1,588) | (1,588) | (1,588) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Deferred tax liability | | - | - | - |
+---------------------------------------+-------+-----------+-----------+-----------+
| Total non-current liabilities | | (1,588) | (1,588) | (1,588) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Liabilities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Current liabilities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Borrowings | | - | (1,000) | - |
+---------------------------------------+-------+-----------+-----------+-----------+
| Trade and other payables | | (174) | (366) | (217) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Total current liabilities | | (174) | (1,366) | (217) |
+---------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Total liabilities | | (1,762) | (2,954) | (1,805) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Net assets | | 8,737 | 9,782 | 9,397 |
+---------------------------------------+-------+-----------+-----------+-----------+
| | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Equity | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Issued capital | | 7,016 | 7,016 | 7,015 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Share premium account | | 101,814 | 101,814 | 101,815 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Other reserves | | 22,993 | 22,993 | 22,993 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Retained earnings | | (123,086) | (122,041) | (122,426) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Total equity | 7 | 8,737 | 9,782 | 9,397 |
+---------------------------------------+-------+-----------+-----------+-----------+
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 March 2010
+---------------------------------------+-------+-----------+-----------+-----------+
| | | Unaudited | Unaudited | Audited |
| | | six | six | year |
| | | months to | months to | ended |
| | | 31 March | 31 March | 30 |
| | | | | September |
+---------------------------------------+-------+-----------+-----------+-----------+
| | Notes | 2010 | 2009 | 2009 |
| | | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Cash flows from operating activities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Loss for the period | | (660) | (1,150) | (1,729) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Adjustments for: | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Depreciation and amortisation | | 32 | 37 | 66 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Net change in fair value of financial | | 135 | 890 | (232) |
| assets at fair value through profit | | | | |
| or loss | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Foreign exchange gain on investments | | (270) | (775) | - |
+---------------------------------------+-------+-----------+-----------+-----------+
| Foreign exchange gain on cash held | | - | (198) | (131) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Interest receivables | | (42) | (22) | (71) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Operating loss before changes in | | (805) | (1,218) | (2,097) |
| working | | | | |
| capital and provisions | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Increase in inventory | | (4) | (2) | (5) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Increase in trade and other | | (83) | (211) | (130) |
| receivables | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Decrease in trade and other payables | | (43) | (54) | (202) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Net cash outflow from operating | | (935) | (1,485) | (2,434) |
| activities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Cash flow from investing activities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Interest received | | 42 | 22 | 71 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Purchase of financial asset at fair | | (1) | (3,000) | (3,807) |
| value through profit or loss | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Proceeds from sale of financial asset | | 236 | 412 | 3,205 |
| at fair value through profit or loss | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Purchase of intangible assets | | (15) | (41) | (41) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Purchase of property, plant and | | - | (2) | (2) |
| equipment | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Net cash inflow(outflow) from | | 262 | (2,609) | (574) |
| investing activities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Cash flows from financing activities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Proceeds from the issue of borrowings | | - | 2,588 | 1,588 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Proceeds from issue of share capital | | - | 412 | 412 |
+---------------------------------------+-------+-----------+-----------+-----------+
| Net cash inflow from financing | | - | 3,000 | 2,000 |
| activities | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Decrease in cash and cash equivalents | 6 | (673) | (1,094) | (1,008) |
+---------------------------------------+-------+-----------+-----------+-----------+
| Cash and cash equivalents at 1 | | 1,131 | 2,008 | 2,008 |
| October | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Effect of exchange rate fluctuations | | - | 198 | 131 |
| on cash held | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
| Cash and cash equivalents at end of | | 458 | 1,112 | 1,131 |
| period | | | | |
+---------------------------------------+-------+-----------+-----------+-----------+
Notes to the Interim Financial Statement (unaudited) for six months ended 31
March 2010
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 six
month period ended 31 March 2010 comprise the Company and its subsidiaries
(together referred to as the 'Group'). The Group is a healthcare sector
specialised investment company.
Basis of preparation
a) Statement of compliance
The Group interim financial statements have been prepared and approved by the
directors in accordance with the recognition and measurement requirements of
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 interim financial statements were approved by the Board of Directors on 30
June 2010.
The interim financial statements have been prepared on the going concern basis.
b) Basis of Measurement
The consolidated financial statements have been prepared on the historical cost
basis except for the following:
· Financial investments at fair value through profit or loss account 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 interim financial statements
is included in Note 5 - Investments.
2 Segmental reporting
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| | Investing | Retail | Total |
+--------------+-------------------------------+-----------------------------+-------------------------------+
| | Unaudited | Audited | Unaudited | Audited | Unaudited | Audited |
| | six | year | six | year | six | year |
| | months to | ended | months to | ended | months to | ended |
| | 31 March | 30 | 31 March | 30 | 31 March | 30 |
| | | September | | September | | September |
+--------------+-------------------+-----------+-----------------+-----------+-------------------+-----------+
| | 2010 | 2009 | 2009 | 2010 | 2009 | 2009 | 2010 | 2009 | 2009 |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Group | 34 | - | 6 | - | - | - | 34 | - | 6 |
| revenue | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Gross | 34 | - | 6 | - | - | - | 34 | - | 6 |
| profit | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Result | (596) | (1,766) | (1,236) | - | - | - | (596) | (1,766) | (1,236) |
| from | | | | | | | | | |
| operating | | | | | | | | | |
| activities | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Share of | - | - | - | (178) | (380) | (627) | (178) | (380) | (627) |
| loss of | | | | | | | | | |
| associate | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Finance | 141 | 996 | 134 | (27) | - | - | 114 | 996 | 134 |
| income, | | | | | | | | | |
| net | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Loss | (455) | (770) | (1,102) | (205) | (380) | (627) | (660) | (1,150) | (1,729) |
| before | | | | | | | | | |
| and after | | | | | | | | | |
| tax | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Segment | 10,027 | 12,313 | 10,766 | 472 | 423 | 436 | 10,499 | 12,736 | 11,202 |
| assets | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Segment | (1,731) | (2,852) | (1,771) | (31) | (102) | (34) | (1,762) | (2,954) | (1,805) |
| liabilities | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Capital | - | - | 2 | 15 | 43 | 41 | 15 | 43 | 43 |
| expenditure | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
| Depreciation | 7 | 19 | 19 | 25 | 18 | 47 | 32 | 37 | 66 |
| and | | | | | | | | | |
| amortisation | | | | | | | | | |
+--------------+---------+---------+-----------+--------+--------+-----------+---------+---------+-----------+
3 Loss per share
+--------------------------------------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Audited |
| | six | six | year |
| | months to | months to | ended |
| | 31 March | 31 March | 30 |
| | | | September |
+--------------------------------------+-----------+-----------+-----------+
| | 2010 | 2009 | 2009 |
+--------------------------------------+-----------+-----------+-----------+
| Basic | | | |
+--------------------------------------+-----------+-----------+-----------+
| Net loss for the financial period | (660) | (1,150) | (1,729) |
| (GBP'000) | | | |
+--------------------------------------+-----------+-----------+-----------+
| Weighted average number of shares | 16,272 | 14,650 | 15,503 |
| outstanding ('000) | | | |
+--------------------------------------+-----------+-----------+-----------+
| Basic loss per share | (4.06)p | (7.85)p | (11.15)p |
+--------------------------------------+-----------+-----------+-----------+
| | | | |
+--------------------------------------+-----------+-----------+-----------+
Basic 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 2010 and 2009 between the
basic loss per share and the diluted loss per share as ordinary share
equivalents from share options have been excluded from the computation as their
effects are anti-dilutive.
4 Other operating expenses
Included within other operating expenses for the period ended 31 March 2010 are
costs related to businesses discontinued in previous periods of GBP147,000 (31
March 2009: GBPNil).
5 Financial asset investments
+-------------------------------------------------------------+--------+
| Available for sale financial assets | |
+-------------------------------------------------------------+--------+
| | GBP000 |
+-------------------------------------------------------------+--------+
| At 1 October 2009 | 348 |
+-------------------------------------------------------------+--------+
| At 31 March 2010 | 348 |
+-------------------------------------------------------------+--------+
| | |
+-------------------------------------------------------------+--------+
| At 31 March 2009 | 156 |
+-------------------------------------------------------------+--------+
| | |
+-------------------------------------------------------------+--------+
| Financial assets designated at fair value through the | |
| income statement | |
+-------------------------------------------------------------+--------+
| | GBP000 |
+-------------------------------------------------------------+--------+
| At 1 October 2009 | 7,483 |
+-------------------------------------------------------------+--------+
| Additions at fair value | 1 |
+-------------------------------------------------------------+--------+
| Revaluation | 226 |
+-------------------------------------------------------------+--------+
| Disposals | (65) |
+-------------------------------------------------------------+--------+
| At 31 March 2010 | 7,645 |
+-------------------------------------------------------------+--------+
| | |
+-------------------------------------------------------------+--------+
| At 31 March 2009 | 7,174 |
+-------------------------------------------------------------+--------+
| | |
+-------------------------------------------------------------+--------+
| Financial assets held for trading at fair value through the | |
| income statement | |
+-------------------------------------------------------------+--------+
| | GBP000 |
+-------------------------------------------------------------+--------+
| At 1 October 2009 | 1,602 |
+-------------------------------------------------------------+--------+
| Revaluation | (106) |
+-------------------------------------------------------------+--------+
| Disposals | (156) |
+-------------------------------------------------------------+--------+
| At 31 March 2010 | 1,340 |
+-------------------------------------------------------------+--------+
| | |
+-------------------------------------------------------------+--------+
| At 31 March 2009 | 3,549 |
+-------------------------------------------------------------+--------+
6 Analysis of changes in net funds
+----------------------------------+-------------+---------+----------+
| | At 30 | Cash | At 31 |
| | September | flow | March |
| | 2009 | | 2010 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-------------+---------+----------+
| Cash at bank | 1,131 | (673) | 458 |
+----------------------------------+-------------+---------+----------+
| | | | |
+----------------------------------+-------------+---------+----------+
| Total | 1,131 | (673) | 458 |
+----------------------------------+-------------+---------+----------+
7 Reconciliation of movements in equity
+------------------------------------------------+-----------+-----------+
| | Unaudited | Unaudited |
| | six | six |
| | months to | months to |
| | 31 March | 31 March |
+------------------------------------------------+-----------+-----------+
| | 2010 | 2009 |
| | GBP'000 | GBP'000 |
+------------------------------------------------+-----------+-----------+
| Total recognised income and expense for the | (660) | (1,904) |
| period | | |
+------------------------------------------------+-----------+-----------+
| Issue of share capital | - | 416 |
+------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------+-----------+-----------+
| Net decrease in equity | (660) | (1,488) |
+------------------------------------------------+-----------+-----------+
| Opening equity | 9,397 | 11,274 |
+------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------+-----------+-----------+
| Closing equity | 8,737 | 9,782 |
+------------------------------------------------+-----------+-----------+
8 VAT Liability
Post period end the Company was the subject of a routine VAT inspection from HM
Revenue & Customs (HMRC). As a consequence of this inspection the Company is in
discussions with HMRC concerning claimed input VAT. Since May 2006 the Company
has reclaimed in total approximately GBP400,000 of input VAT from HMRC. The
Company had previously been the subject of a routine VAT inspection in May 2008
and no issues were raised at that time by HMRC in relation to the Company's
recovery of input VAT. No provision has been made in the period ended 31 March
2010 for any input VAT reclaimed previously that may need to be repaid to HMRC
in the future. The directors aim to demonstrate to HMRC that the level of input
VAT reclaimed in that period was appropriate.
9 Transactions with key management personnel
During the six months ended 31 March 2010 GBP150,000 (year ended 30 September
2009: GBP300,000) was paid to MCM Limited of which Dr David Wong is a retained
consultant.
As referred to above, the Company has given notice (notice being effective 30
June 2010) to terminate the consulting contract through which Dr David Wong's
services are provided to the Company. He will remain an employee of the Company
on a salary of GBP25,000 p.a.
Further Information
The interim report for the six months ended 31 March 2010 has been prepared by
the Company and was approved by the Directors on 30 June 2010.
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 Group's website: www.mdyhealthcare.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KKCDQOBKDKAB
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