Interim Results
25 September 2003 - 9:02AM
UK Regulatory
RNS Number:1560Q
Zi Medical PLC
25 September 2003
ZI MEDICAL PLC ("ZI MEDICAL" OR "THE COMPANY")
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2003
Highlights:
*Current performance is in line with board's expectations.
*Successful fund raising since the period end has raised #536,000 after
expenses and secures the company's financial position going forward.
*Distribution deal signed with Baxter Healthcare SA in June.
*Initial field trials of Red Eye, Zi Medical's patented patient monitoring
system, successful.
*Further partnering agreements are being sought to bring the company's
syringe driver product family to commercialisation.
*Full UK launch of Red Eye due in October with initial sales expected by
the end of the year.
Michael Fort, chairman, commenting on the interim results, said:
"I am excited by the strong progress we have made towards the commercialisation
of Red Eye with Baxter Healthcare and the success of the pre launch trials which
have been established since signing the distribution agreement in late June. The
UK launch will take place next month and we anticipate further European launches
in early 2004. Meanwhile, we continue to seek partners for other products
currently under development and hope to be able to report further progress
soon."
Press Enquiries:
Michael Fort, Chairman, Zi Medical PLC Tel: 020 7448 1000
Zoe Biddick, Biddicks Financial Public Relations Tel: 020 7448 1000
Chairman's Statement
I am pleased to present the interim accounts for your company for the six months
ended 30 June 2003 and to report further progress to shareholders.
Following the half year, the company successfully completed a fundraising in
September to underpin its operations going forward. The company raised #536,000
after expenses which, when combined with the recent increase in bank facilities
brings our total funds available to over #600,000. In my report to shareholders
accompanying the last annual results, I indicated that the company needed to
raise at least #500,000 in order both to secure the company's future and to
maximise the commercial opportunities that we had identified. The success of the
fund raising demonstrates shareholders' confidence in the products we are
developing and the future of the company within the international medical
devices market.
The unaudited accounts show a loss before of taxation of #386,000. However,
included in this result are certain items that disguise the underlying
performance. Costs associated with the sales force and with research and
development amount to over #100,000 for the period. As we have previously
reported, the sales force was disbanded in April this year in favour of seeking
strategic alliances with larger partners to maximise the company's product
exploitation. Also, it is the company's policy to write off research and
development expenditure as incurred in order to optimise the claim for research
and development tax credits which have a positive impact on the company's cash
flow. After adjusting for these charges, the company's underlying loss for the
half year of #275,000 is within the board's expectations and we remain on course
for the year as a whole.
Current Trading
Red Eye
The distribution deal for Red Eye, our patented patient monitoring system, with
Baxter Healthcare SA, announced on 20 June 2003, was a major step forward for
the business. Since signing the deal, Baxter has been working closely with us to
develop the marketing plan, train sales and technical staff and produce
advertising and marketing literature for the UK launch of the product at the
Royal College of Nursing conference in October this year. Intermediate field
trials of the product have gone exceptionally well in all the participating
hospitals and we look forward to a very successful launch. The speed of progress
confirms our belief that partnering agreements with major companies is the
optimum way to exploit the company's products. In order for Zi Medical to have
launched Red Eye in the manner adopted by Baxter, the internal funding
requirement would have proven to be prohibitive. We look forward to further
European launches in early 2004.
Syringe Driver Products
Further discussions are ongoing with other multi-national organisations for the
design and development of a family of syringe drivers using the company's
patented backpressure detection system which provides our product with a
distinct competitive advantage and reduces risk for the user. Interest in this
field has been keen from a number of sources and we hope to be able to announce
another partnering agreement in due course. The company remains committed to
development in this field of medical device technology as it offers by far the
largest proportion of added value in the therapeutic area in which it operates.
Other Developments
The company continues to work closely not only with Baxter Healthcare within the
terms of the collaboration agreement announced at the time of the Red-Eye deal,
but also on its other pipeline products in related fields. These include
needle-free consumables to complement the company's core products, further
Red-Eye line extensions, and two other patient safety monitoring products.
We believe that our products have the potential to secure significant positions
in their markets. By seeking partnerships with large, established healthcare
companies we anticipate that we will be able to accelerate the commercialisation
of our product pipeline. Having secured our financial position, I look forward
to the remainder of the year with confidence that further good progress will be
made in product development as well as the beginning of an income stream from
sales of Red-Eye.
Michael J. Fort
Chairman
Consolidated profit and loss account for the six months ended 30 June 2003
6 months to As restated 12 months to
30 June 6 months to 31 December
2003 30 June 2002
Unaudited 2002 Audited
Unaudited
#'000 #'000 #'000
Turnover 15 12 43
Staff costs (107) (23) 207
Depreciation and amortisation (65) (14) 82
Other operating charges (226) (111) 365
-------- -------- --------
Loss on ordinary activities
before interest (383) (136) (611)
Interest receivable - 2 13
Interest payable (3) - (11)
-------- -------- --------
Loss on ordinary activities
before taxation (386) (134) (609)
Tax on loss on ordinary
activities - - -
-------- -------- --------
Retained loss for the period (386) (134) (609)
======== ======== ========
Basic loss per
share (0.93)p (0.65)p (2.02)p
Consolidated balance sheet as at 30 June 2003
30 June As restated 31 December
2003 30 June 2002
Unaudited 2002 Audited
Unaudited
#'000 #'000 #'000
Fixed Assets
Intangible fixed assets 1819 1,921 1,871
Tangible fixed assets 16 43 32
-------- -------- --------
1,835 1,964 1,903
Current Assets
Stocks 41 43 40
Debtors 106 51 51
Cash at bank and in hand - 559 104
-------- -------- --------
147 653 195
Creditors: amounts
falling due within one
year (346) (249) (222)
-------- -------- --------
Net current
assets/(liabilities) (199) 404 (27)
Total assets less
current liabilities 1,636 2,368 1,876
Creditors: amounts
falling due after more
than one year (26) (50) (34)
-------- -------- --------
Net assets 1,610 2,318 1,842
======== ======== ========
Capital and Reserves
Called up share capital 860 793 792
Share premium account 791 705 705
Merger reserve 1,010 1,010 1,010
Profit and loss account (1,051) (190) (665)
-------- -------- --------
1,610 2,318 1,842
======== ======== ========
Consolidated cash flow statement for the six months ended 30 June 2003
6 months to As restated 12 months to 31
30 June 6 months to December
2003 30 June 2002
Unaudited 2002 Audited
Unaudited
#'000 #'000 #'000
Reconciliation of operating
loss to operating cash flows
Operating loss (383) (136) (611)
Depreciation and amortisation 65 14 82
(Increase)/decrease in stock (1) 4 6
(Increase) in debtors (49) (32) (31)
Increase/(decrease) in creditors 90 8 (69)
-------- -------- --------
(278) (142) (623)
======== ======== ========
Net cash outflow from operating
activities (278) (142) (623)
Interest received - 2 13
Interest paid (3) - (11)
Capital expenditure - (21) (28)
Purchase of subsidiary - (127) (223)
Net overdraft acquired with
subsidiary - (97) (97)
-------- -------- --------
Net outflow before financing (281) (385) (969)
Financing
Issue of ordinary shares 154 581 581
Payment of loans (9) (138) (47)
New loan 30 - -
Capital element of finance leases (1) (1) (2)
-------- -------- --------
174 442 532
-------- -------- --------
Increase/(decrease) in cash (107) 57 (437)
======== ======== ========
Opening cash 65 502 502
Closing cash (42) 559 65
-------- -------- --------
Increase in cash (107) 57 (437)
======== ======== ========
Notes
1. The interim financial statements for the six months ended 30 June
2003 have been prepared in accordance with the accounting policies
detailed in the financial statements for the year ended 31 December
2002 and were approved by the directors on 24 September 2003.
2. The results for the six month period ended 30 June 2002 have been
restated to conform with the audited accounts for the year ended 31
December 2002 in respect of the treatment of goodwill and the
associated merger reserve.
3. The results for the year ended 31 December 2002 are extracted from
the latest published financial statements for that period and do
not constitute the Statutory Accounts as defined in the Companies
Act 1985 (as amended). A copy of those statements has been filed
with the Registrar of Companies and include a report from the
auditors that was unqualified.
4. As a result of taxation losses in previous years, no provision for
taxation is required.
5. There were no recognised gains or losses other that the result for
the period.
6. The calculation of basic earnings per share is based on the loss
for the period of #386,000 (six months ended 30 June 2002 -
#134,000) and on the weighted average number of shares in issue
during the period of 41,634,890 (six months ended 30 June 2002 -
20,444,098).
7. This report is being sent out to shareholders and copies will be
made available at the Company's registered office, Unit 4, St Asaph
Business Park, St Asaph, Denbighshire LL17 0LJ.
This information is provided by RNS
The company news service from the London Stock Exchange
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