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RNS
Quantum Pharma PLC   -  QP.   

Half Year Results

Released 07:00 22-Aug-2017

RNS Number : 6024O
Quantum Pharma PLC
22 August 2017
 

For immediate release

22 August 2017

 

 

 

Quantum Pharma Plc ('Quantum' or 'the Group' or the 'Company')

 

Unaudited results for the half year ended 31 July 2017 ('the period' or 'H1 2018')

 

Financial highlights

·    Revenue increased 13% to £36.2m (H1 2017: £32.1m) reflecting strong growth from the Niche Pharmaceuticals division ('Niche')

·    Adjusted EBITDA increased 23% to £5.7m (H1 2017: £4.7m)

·    Niche transformed, contributing 28% of Group adjusted EBITDA (before central costs) at £1.8m (H1 2017: loss of £0.2m)

·    Statutory operating profit increased 74% to £3.6m (H1 2017: £2.1m)

·    Net debt reduced to £11.9m (H1 2017: £23.8m)

Key developments

·   Initial phase of strategy to focus and simplify the business completed following disposal of Total Medication Management Services Limited trading as Biodose Services ('Biodose Services')

·   Licensed product portfolio performing very well with Glycopyrronium Bromide Oral Solution 1mg/5ml ('Glyco') outperforming expectations and for which an indication extension is being progressed

·    Increased confidence in deliverability and value of the product pipeline

·   Partnerships established with two global pharmaceutical businesses to commercialise generic products in the UK

·    Progress made with the first export of licensed product into the Middle East

·    Strong expressions of interest received in international partnership opportunities

·  Hospital revenue growth in the Specials division ('Specials') balanced by regulatory and pricing pressure in unlicensed specials supplied to community pharmacies

·    Post the period end a non-binding indicative proposal made by Clinigen Group plc regarding a possible offer for the Group.

 

Chris Rigg, CEO of Quantum, said:  "I am very pleased with the strategic progress we have made in the period and the Group has good momentum going into the second half of the year. The benefits of our simplification strategy are clear to see in a strong set of results that demonstrate the substantial increase in the profitability of our business. The next steps of our strategic plan are underway with a focus on delivering the current pipeline, maximising the value in our licensed product portfolio and exploiting international opportunities. I am confident in the future prospects of the Group."

 

A conference call for analysts will be held at 9.30 am on the day of the results; for analysts wishing to join the conference call, please contact:

Buchanan

020 7466 5000

quantumpharma@buchanan.uk.com

 

All figures for continuing operations unless stated otherwise.

A list of definitions of non-GAAP measures and references to reconciliations to GAAP measures are included at the end of this document.

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014.

 

For further information

Quantum Pharma Plc

Ian Johnson, Non-executive Chairman

Chris Rigg, Chief Executive Officer

Gerard Murray, Chief Financial Officer

ir@quantumpharma.co.uk

Tel: +44 (0) 1207 279 404

www.quantumpharmaplc.com

 

N+1 Singer

(Nominated Advisor & Broker)

Sandy Fraser / Nick Owen / James White

Tel: +44 (0) 20 7496 3000

 

Media enquiries:

Buchanan

Mark Court / Sophie Cowles

quantumpharma@buchanan.uk.com

Tel: +44 (0) 20 7466 5000

www.buchanan.uk.com

 

Notes to editors

Quantum Pharma Plc is a service-led, niche pharmaceutical developer, manufacturer and supplier to the retail pharmacy, pharmaceutical wholesale and hospital markets. Quantum Pharma Plc operates through two divisions - Niche Pharmaceuticals ('Niche') and Specials - offering a portfolio of innovative and complementary products and services.

For further information, please visit www.quantumpharmagroup.com.

 

 

 

As a result of rounding throughout this announcement it is possible that tables may not cast and change percentages may not calculate precisely.

 

Chief Executive's review

I am pleased to report that the Group has made strong progress both financially and strategically during the period. Group adjusted EBITDA has increased 23% to £5.7m as a result of the strategic actions we have taken. The performance of Niche in particular has been transformed, contributing £1.8m of adjusted EBITDA in the period, 28% of Group adjusted EBITDA (before central costs), compared to a reported £0.2m loss in H1 2017. As a focused and simplified business we now benefit from a higher quality of earnings and we expect our adjusted EBITDA margin to continue to grow over the medium term, as we expand our portfolio of licensed products.

Our strategic plan has progressed more quickly than we envisaged at the time that the new Board was appointed in October 2016, when the Group faced a number of challenges. In approximately nine months we have succeeded in simplifying the Group's business model, which is now focused on our core Specials and Niche divisions and a reprioritised development pipeline. Key steps included the closure of our loss making NuPharm operation, the sale of Biodose Services and a significant strengthening of the Group's balance sheet.

Despite the market for unlicensed specials being mature, and experiencing pricing and prescribing pressure from the NHS, our market-leading Specials division continues to be cash-generative, profitable and central to our unlicensed-to-licensed ('UL2L') strategy.

Our strategy is to be first to license the top specials in the UK in order to defend and grow our market position. Over the next 24-36 months we expect to drive significant growth through the development of the bulk of our UK pipeline and at the same time deliver better value to the NHS provided that we are successful in being first to market. The licensing strategy has already driven transformational performance in the Niche division within the period, and the Group is well-positioned to maximise its potential in the UK and also to explore international markets where we aim to leverage the global UL2L opportunity.

 

Portfolio update

The pipeline currently contains over 35 product developments, of which over 70% are UL2L opportunities. As it progresses through the various stages of development, our confidence in the deliverability and value of the pipeline is increasing.

We have launched a number of products during the period, the most financially material of which were Gabapentin Oral Solution 50mg/ml and Acetylcysteine 200mg sachets, which have performed very well since commercial launch.

The Group will also shortly make the licence submission to the MHRA for the first strength of the largest product in our pipeline by market potential. If we succeed in being first to market with a licence for this product it would be a significant step for the Group. This is a complex development and registration process and as such the precise timing of an approval will be difficult to predict.

Aside from managing the progress of active developments, we are also focusing on maximising the lifecycle of our launched products. For example, we began work during the period to extend the indication of Glyco for paediatric use, a move which will defend and extend the market for this product.

 

We have entered into agreements with two global pharmaceutical businesses for the UK out-licensing of Trazodone1 and Memantine2. These agreements are blueprints for the type of partnership we are pursuing in order to commercialise selected generics in our portfolio, where other businesses are better placed to take them to market and accelerate our access to a meaningful return. In these cases our partners offer strong presence in these respective markets supported by large and established sales teams.

 

International opportunity

The Board believes that a significant opportunity exists to replicate our UL2L business model internationally over the medium term. Access to data and distribution channels will be critical to the successful execution of this part of our strategy, just as it has been for our UK programme. The rapid progress made in simplifying the business and the resultant performance benefits has allowed us to initiate this strategy ahead of plan, and we are in discussions with a number of potential partners across several targeted territories. We recognise, however, that it is important that the business does not rush this next phase of its evolution and chooses the right international partnership routes to maximise shareholder value.

Possible offer

On 16 August 2017, the Board announced that it had received an indicative proposal from
Clinigen Group plc ('Clinigen') regarding a possible offer for the Company to be satisfied through a combination of new ordinary shares in Clinigen and cash. Discussions are ongoing and we will update shareholders on any further developments as appropriate. In the meantime, shareholders are reminded that the proposal from Clinigen is non-binding and is subject to material preconditions, including customary due diligence. As a result, it is emphasised that there can be no certainty that an offer will be made for the Company, nor as to the terms on which any offer may be made.

Summary and outlook

I am very pleased with the strategic progress we have made in the period and the Group has good momentum going into the second half of the year. The benefits of our simplification strategy are clear to see in a strong set of results that demonstrate the substantial increase in the profitability of our business. The next steps of our strategic plan are underway with a focus on delivering the current pipeline, maximising the value in our licensed product portfolio and exploiting international opportunities. I am confident in the future prospects of the Group.


1 Oral solution 50mg/5ml and 100mg/5ml
2
Soluble tablets 10mg, 20mg and titration pack

 

Divisional Review

Niche Pharmaceuticals division ('Niche')

Niche delivered a strong first half performance having benefited from the strategic steps to increase focus and simplify operations that were taken during the second half of last year. Revenue grew 129% to £5.3m (H1 2017: £2.3m) and now accounts for 15% of Group revenue (H1 2017: 7%). This advance was primarily driven by the growth in Glyco during the period in addition to contributions from a number of other products launched during H1 2018.

Adjusted EBITDA was £1.8m (H1 2017: £0.2m loss), which was a transformational performance compared to the modest loss the division delivered in the same period last year. The main contributions to this transformation were the growth in licensed product sales and the benefits of a reduced cost base following the actions to eliminate the cost of supporting underperforming products during H2 2017.

The division's significant improvement in reported profitability has been achieved despite a fall in the proportion of costs being capitalised as the number of launched products grows and an increasing share of management time is spent on supporting their commercialisation.

The division launched the following licensed products during the period:

·   Folic Acid 1mg/ml Oral Solution (prevention of neural tube defects and folic acid deficiency) in February 2017;

·   Acetylcysteine 200mg sachets (mucolytic for respiratory disorders) in March 2017;

·  Levothyroxine Oral Solution (for hyperthyroidism) in 25mcg/5ml, 50mcg/5ml and 100mcg/5ml strengths in April 2017; and

·   Gabapentin Oral Solution 50mg/ml (for the treatment of epilepsy and neuropathic pain) in May 2017.

The division also demonstrated success in its strategy to commercialise selected generic products in the UK through partnerships with two global pharmaceutical companies for the out-licensing of Trazodone and Memantine.

In each case the agreement recognises the ability of the selected partner to support and market the product in the UK through its established sales and marketing infrastructure, which we believe will ensure greater penetration and financial returns from these products.

Niche has made early progress with the first exports of licensed product into the Middle East during the period. The division has also begun discussions with a number of global pharmaceutical businesses aimed at establishing partnerships for international expansion.
 

Specials division ('Specials')

Specials continues to perform reliably against a backdrop of increasing competitive and regulatory pressure. Revenue increased 4% to £30.9m (H1 2017: £29.8m), reflecting the growth in unlicensed special sales into hospitals and the continuing success in meeting temporary supply shortages of licensed medicines.

Adjusted EBITDA contracted by 14% to £4.7m (H1 2017: £5.5m), which partly reflects an increase in the cost of customer retention that has been driven by growing competition amongst specials providers to win new business, and absorption of some shared overhead following the closure of NuPharm.

The division's market-leading manufacturer and supplier of specials into the pharmacy and wholesale sectors, Quantum Pharmaceutical ('QPL'), experienced some softness early in the period due to a shift in sales mix towards tariff lines from non-tariff lines.  QPL has, however, successfully reinforced its market-leading position with the renewal of two long-term exclusive supply agreements during the period:

·     Bestway Panacea Healthcare Limited (trading as Well Pharmacy) - two-year agreement from March 2017; and

·     Phoenix Healthcare Distribution Limited - three-year agreement from April 2017.

Along with the renewal of AAH Pharmaceuticals for a term of five years in March 2016, QPL now has long term agreements with its three largest customers. The renewal of these key agreements is important in ensuring QPL remains resilient in the face of the evolving regulatory and competitive specials landscape whilst the Group pursues its UL2L strategy for the major specials.

UL Medicines ('ULM'), the division's supplier of specials into hospitals, delivered a good performance with revenue growth of almost 10%. ULM experienced growth in hospital volumes driven by batch and bespoke medicine demand, in addition to benefiting from temporary supply opportunities due to shortages of licensed medicines. The business continues to consolidate its position as a leading supplier of unlicensed imported medicines into the NHS.

Recognising the maturity of the market in which it operates, Specials is focusing on a number of initiatives to drive operational efficiencies and margin improvement. Many of these initiatives centre on improvements to the Group's ERP system to leverage the benefits of technology in streamlining and systemising a variety of processes.

 

 

Chris Rigg

Chief Executive Officer

21 August 2017

 

 

 

Chief Financial Officer's review

The Group's financial results report on a simplified business comprising two operating divisions of Specials and Niche Pharmaceuticals ('Niche') following the discontinuance of the Medication Adherence ('MA') division during the period. The progress that the Group has made in respect of its strategic plan is evidenced by the improvement in financial performance during the period.

 

All figures in this section refer to continuing operations unless otherwise stated.

Group performance

The Group performance is summarised in the following measures:

·     Revenue increased by 13% to £36.2m (H1 2017: £32.1m)

·     Gross profit increased by 10% to £14.3m (H1 2017: £13.1m)

·     Adjusted EBITDA increased by 23% to £5.7m (H1 2017: £4.7m)

·     Operating profit increased by 74% to £3.6m (H1 2017: £2.1m)

·     Capitalised development expenditure of £1.0m was incurred (H1 2017: £2.3m)

·     Net debt reduced to £11.9m (H1 2017: £23.8m)

Revenue

REVENUE BY DIVISION (£m)

H1 2018

H1 2017

FY 2017

Specials

30.9

29.8

61.4

Niche Pharmaceuticals

5.3

2.3

4.9

Group

  36.2

32.1

66.3

Group revenue grew by 13% to £36.2m (H1 2017: £32.1m), primarily as a result of the revenue growth of £3.0m delivered by the Niche division. Its portfolio of licensed products has grown during the period and it has also benefited from a whole period revenue contribution from product launches prior to the beginning of the period. The balance of the Group's revenue growth of £1.1m is in the Specials division with the hospital sector in particular providing the main component of this growth.

The Specials division operates in a market where some products are subject to regulated pricing. In the early part of the period there was also evidence of a shift from non-tariff products to lower priced tariff products. Despite these challenges, however, revenue in the division increased by 4% through growth in our hospital and aseptics compounding businesses.

The Niche division launched Glycopyrronium Bromide Oral Solution 1mg/5ml ('Glyco') in the UK in August 2016, its first UL2L product with meaningful volume. Within the period to 31 July 2017 Glyco sales provide a full six month revenue contribution whereas the comparable prior period does not include any revenue for Glyco due to the timing of the launch in August 2016. Additional products have also been launched during the period and have provided incremental revenues albeit it not for the full period.

Gross profit

The Group's reported gross margin has stepped up considerably compared to the gross margin reported previously when Biodose Services homecare business was part of the Group's continuing operations. The disposal of Biodose Services has brought visibility to a simpler business with higher quality earnings as evidenced by an underlying gross margin of c40% that was previously diluted by a high turnover low margin homecare business. 

The Group's gross profit has increased by 10% to £14.3m (H1 2017: £13.1m). This is due to an increase of £2.0m in the Niche division due in the main to the performance of Glyco since its launch in August 2016 offset by a reduction of £0.8m in the Specials division primarily due to the pricing pressure and shift from  non-tariff to tariff prescribing.

Within the continuing operations the Niche division's products provide a higher margin revenue stream than the Specials division products do as a whole. The Niche division's increase in the proportion of Group revenue in this period has been offset to some extent the mix issues experienced within the Specials division.

Adjusted EBITDA

ADJUSTED EBITDA BY DIVISION (£m)

H1 2018

H1 2017

Specials

4.7

5.5

Niche Pharmaceuticals

1.8

(0.2)

Group costs

(0.8)

(0.6)

Group adjusted EBITDA

5.7

4.7

Adjusted EBITDA increased to £5.7m (H1 2017: £4.7m) after adjusting for depreciation, amortisation, share based payments and deferred consideration charge. The increase is as a result of the Niche division adjusted EBITDA improving by £2.0m to £1.8m (H1 2017: loss of £0.2m) for the period. The reorganisation of this division in the prior year led to a reduced cost base and refocused activity on UL2L and selected niche generic products that had routes to market that the Group was capable of optimising. The combined benefits of these actions is evident in the improvement in the Niche division adjusted EBITDA.  

RECONCILIATION TO OPERATING PROFIT (£m)

H1 2018

H1 2017

Group adjusted EBITDA

5.7

4.7

Intangible amortisation

(0.7)

(0.4)

Depreciation

(0.4)

(0.5)

Deferred consideration (Lamda)

(0.4)

(1.0)

Share based payments

(0.6)

(0.3)

Other exceptional costs

-

(0.4)

Group statutory operating profit

3.6

2.1

The only non-recurring item in the period is the expected final charge of £0.4m (H1 2017: £1.0m) relating to the deferred consideration for the Lamda acquisition made in April 2015. Share based payments have increased to £0.6m (H1 2017: £0.3m) during the period reflecting the full year effect of prior year option grants and additional option grants during the period.

Discontinued operations

Following an orderly closure plan in the previous financial year NuPharm Laboratories Limited ("NuPharm") was placed into administration on 26 April 2017. NuPharm's financial results are included within the losses from discontinued operations in the prior period's consolidated income statement as it represented a separate major line of business for the Group. NuPharm was not active in the current period and as such is not included within current period discontinued operations.

During the period the Group disposed of Total Medication Management Services Limited (trading as Biodose Services) which represented the main component of the MA division and as a result of this disposal the MA division has been discontinued.

Biodose Services has been classified as a discontinued operation in the current period and the prior period's financial results have also been restated on this basis.

Profit (loss) before tax

RECONCILIATION TO PROFIT FOR THE PERIOD (£m)

H1 2018

H1 2017

Group statutory operating profit

3.6

2.1

Net financing expense

(0.4)

(0.5)

Share of profit of equity-accounted investees, net of tax

0.1

 

0.1

Taxation

(0.3)

0.1

Profit for the period - continuing operations

3.0

1.8

Loss from discontinued operations

(0.2)

(0.8)

Profit for the period

2.8

1.0

The Group recorded a profit for the period of £2.8m (H1 2017: £1.0m) comprising profit from continuing operations of £3.0m (H1 2017: £1.8m) and losses from discontinued operations of £0.2m (H1 2017: £0.8m). The statutory profit in the period from continuing operations includes only one non-operational charge relating to the Lamda deferred consideration which was expected. The absence of a number of exceptional items in the consolidated income statement supports the progress made in simplifying the business and its quality of earnings.

Earnings per share - continuing operations

MOVEMENT IN BASIC EARNINGS PER SHARE

Pence

H1 2017 earnings per share

1.4

Change due to:

 

     Profit for the period

0.9

     Weighted average number of shares in issue

(0.5)

H1 2018 earnings per share

1.8

The table bridges the movement in earnings per share year-on-year, showing the value of the movement that is attributable to the change in earnings and the value that is due to a change in the number of ordinary shares in issue.

Operating cash flow

The Group generated net cash inflows from continuing operating activities of £4.6m (H1 2017: £6.8m) before accounting for a deferred consideration payment of £2.0m (H1 2017: £1.8m) in connection with the Lamda acquisition that reduced the current period cash inflows to £2.6m (H1 2017: £5.0m).

Working capital absorption during the period of £1.2m (excluding the movement on the Lamda deferred consideration liability of £1.6m) is primarily reflected in an increase in receivables as a result of revenue growth. 

During the period the Group's capitalised development expenditure reduced to £1.0m (H1 2017: £2.3m) despite the Group's product pipeline continuing to be developed at the same rate. This reduction reflects a number of factors including, the internal cash cost base from which capitalisation was sourced being reduced, a more stringent capitalisation policy being applied and the timing of third party costs associated with developments being back end weighted.    

Discontinued operations incurred net cash outflows from operating activities of £0.7m and net cash inflows relating to the proceeds on disposal (after working capital adjustments) of £0.5m resulting in net cash outflow of £0.2m (H1 2017: £1.3m) from discontinued activities.

Net debt and banking facilities

NET DEBT (£m)

H1 2018

H1 2017

FY 2017

Cash and cash equivalents

7.7

5.6

7.9

Term loan

(19.8)

(22.8)

(21.2)

Revolving credit facility

-

(7.0)

-

Unamortised loan issue costs

0.2

0.4

0.3

Net debt

11.9

23.8

13.0

Net debt of £11.9m reduced by £1.1m during the period from the £13.0m reported at 31 January 2017. This reduction was achieved after discharging a £2.0m payment with respect to the final element of the deferred consideration of the Lamda acquisition completed in April 2015.

The net debt comprises borrowings net of unamortised loan issue costs of £19.6m (H1 2017: £29.4m) and cash and cash equivalents of £7.7m (H1 2017: £5.6m) and represents just over 1.0 times annualised adjusted EBITDA.

The Group has banking facilities with RBS and Lloyds that provide overall debt facilities of £35.0m comprising a £25.0m term loan plus £10.0m revolving credit facility, which was undrawn during the period.

Dividend

The Board has decided not to declare a dividend in respect of this period.

 

Gerard Murray

Chief Financial Officer

21 August 2017

 

 

 

Condensed Consolidated Income Statement

for period ended 31 July 2017

 

 

Note

(Unaudited)

6 months ended

31 July 2017

 

(Unaudited)

6 months ended

31 July 2016

 

(Audited)

Year ended

 31 January

2017

 

 

 

£000

£000

£000

Continuing operations

 

 

 

 

Revenue

2

36,203

32,075

66,337

Cost of sales

 

(21,883)

(19,011)

(41,251)

 

 

 

 

 

Gross profit

 

14,320

13,064

25,086

Distribution expenses

 

(1,056)

(1,168)

(2,290)

Administrative expenses

 

(9,692)

(9,841)

(32,348)

 

 

 

 

 

Operating profit (loss)

 

3,572

2,055

(9,552)

 

 

 

 

 

Financial expenses

 

(370)

(500)

(1,150)

 

 

 

 

 

Net financing expense

 

(370)

(500)

(1,150)

 

 

 

 

 

Share of profit of equity-accounted investees, net of tax

 

59

79

145

 

 

 

 

 

Profit (loss) before tax

2

3,261

1,634

(10,557)

Taxation

 

(296)

155

1,745

 

 

 

 

 

Profit (loss) for the period from continuing operations

 

2,965

1,789

(8,812)

 

 

 

 

 

Discontinued operations

 

 

 

 

Loss for the period from discontinued operations

3

(183)

(827)

(13,954)

 

 

 

 

 

Profit (loss) for the period

 

2,782

962

(22,766)

 

 

 

 

 

Basic and diluted earnings per share attributed to equity shareholders of the Company

 

 

 

 

Basic (p)

4

1.7

0.8

(16.9)

Diluted (p)

4

1.5

0.8

(16.9)

Basic (p) - continuing operations only

4

1.8

1.4

(6.5)

Diluted (p) - continuing operations only

4

1.6

1.4

(6.5)

Basic (p) - discontinued operations only

4

(0.1)

(0.6)

(10.4)

Diluted (p) - discontinued operations only

4

(0.1)

(0.6)

(10.4)

 

 

 

 

 

 

 

 

 

 

 

           



Condensed Consolidated Statement of Comprehensive Income

for period ended 31 July 2017

 

 

(Unaudited)

6 months

ended 31 July

2017

(Unaudited)

6 months

ended 31 July

2016

(Audited)

Year ended

31 January

2017

 

£000

£000

£000

 

 

 

 

Profit (loss) for the period

2,782

962

(22,766)

Other comprehensive income

 

 

 

Items that are or may be recycled subsequently into profit or loss

 

 

 

Foreign exchange translation differences

117

41

74

 

 

 

 

Other comprehensive income for the period, net of income tax

117

41

 

                74

 

 

 

 

Total comprehensive income (loss) for the period

2,899

1,003

(22,692)

 

 

 

 

Attributable to:

 

 

 

Equity holders of the parent

2,899

1,003

(22,692)

 

 

 

 

Condensed Consolidated Balance Sheet

as at 31 July 2017

 

 

Note

(Unaudited)

31 July 2017

(Unaudited)

31 July 2016

(Audited)

31 January 2017

 

 

 

£000

£000

£000

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

 

3,912

6,066

4,211

 

Intangible assets

Investments

5

57,916

                            -

80,331

105

59,493

-

 

 

 

61,828

86,502

63,704

 

Current assets

 

 

 

 

 

Inventories

 

3,471

3,972

3,985

 

Tax receivable

 

-

476

228

 

Trade and other receivables

 

12,689

13,009

14,965

 

Cash and cash equivalents

6

7,664

5,560

7,941

 

 

 

23,824

23,017

27,119

 

Total assets

 

85,652

109,519

90,823

 

Current liabilities

 

 

 

 

 

Other interest-bearing loans and borrowings

6

(2,880)

(9,880)

(2,880)

 

Tax payable

 

(32)

-

-

 

Trade and other payables

 

(14,413)

(20,896)

(22,433)

 

Provisions

 

(323)

(1,022)

(572)

 

 

 

(17,648)

(31,798)

(25,885)

 

Non-current liabilities

 

 

 

 

 

Other interest-bearing loans and borrowings

6

(16,639)

(19,519)

(18,080)

 

Other payables

 

-

(21)

-

 

Deferred tax liabilities

 

(1,052)

(2,546)

(244)

 

 

 

(17,691)

(22,086)

(18,324)

 

 

 

 

 

 

 

Total liabilities

 

(35,339)

(53,884)

(44,209)

 

 

 

 

 

 

 

Net assets

 

50,313

55,635

46,614

 

 

Equity attributable to equity holders of the parent

 

 

 

 

Share capital

 

16,912

12,500

16,912

Share premium

 

74,799

64,940

74,799

Consolidation reserve

 

(9,752)

(9,752)

(9,752)

Translation reserve

 

233

83

116

Other reserve

 

(21,726)

(21,726)

(21,726)

ESOP own share reserve

 

(484)

(484)

(484)

Merger reserve

 

8,742

8,742

8,742

Retained earnings

 

(18,411)

1,332

(21,993)

Total equity

 

50,313

55,635

46,614

 

 

 

 

 

               

 

Condensed Consolidated Statement of Changes in Equity

 

 

Share

capital

Share

premium

 

 

 

 

 

Consolidation

reserve

Translation reserve

Other reserve

ESOP own share reserve

Merger reserve

Retained

earnings

Total       equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 February 2017

16,912

74,799

(9,752)

116

(21,726)

(484)

8,742

(21,993)

46,614

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

-

-

2,782

2,782

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

-

-

-

117

-

-

-

-

117

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

-

117

-

-

-

2,782

2,899

 

 

 

 

 

 

 

 

 

 

Transactions with owners, recorded directly in equity

 

 

 

 

 

 

 

 

 

Equity-settled share based transactions

-

-

-

-

-

-

-

800

800

 

 

 

 

 

 

 

 

 

 

Total contributions by and distributions to owners

-

-

-

-

-

-

-

800

800

 

 

 

 

 

 

 

 

 

 

Balance at 31 July 2017

16,912

74,799

(9,752)

233

(21,726)

(484)

8,742

(18,411)

50,313

 

 

 

Condensed Consolidated Statement of Changes in Equity

 

 

Share

capital

Share

premium

 

 

Consolidation

reserve

Translation reserve

Other reserve

ESOP own share reserve

Merger reserve

Retained

earnings

Total      equity

 

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 February 2016

12,500

64,940

(9,752)

42

(21,726)

(484)

8,742

1,247

55,509

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

-

-

962

962

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

-

-

-

41

-

-

-

-

41

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

-

41

-

-

-

962

1,003

 

 

 

 

 

 

 

 

 

 

Transactions with owners, recorded directly in equity

 

 

 

 

 

 

 

 

 

Equity-settled share based transactions

-

-

-

-

-

-

-

373

373

Dividend payable

-

-

-

-

-

-

-

(1,250)

(1,250)

 

 

 

 

 

 

 

 

 

 

Total contributions by and distributions to owners

-

-

-

-

-

-

-

(877)

(877)

 

 

 

 

 

 

 

 

 

 

Balance at 31 July 2016

12,500

64,940

(9,752)

83

(21,726)

(484)

8,742

1,332

55,635

 

Condensed Consolidated Cash Flow Statements

for period ended 31 July 2017

 

(Unaudited)

6 months

ended

31 July

2017

(Unaudited)

6 months

ended

31 July

2016

(Audited)

Year

ended

31 January

2017

 

£000

£000

£000

Cash flows from operating activities

 

 

 

Profit (loss) for the period

2,965

1,789

(8,812)

Adjustments for:

 

 

 

Depreciation, amortisation and impairment

1,147

857

12,883

Financial expense

370

500

1,150

Share of profit of equity-accounted investees

(59)

(79)

(145)

Loss on sale of property, plant and equipment

-

(2)

-

Equity settled share-based payment expenses

653

333

718

Taxation

296

(155)

(1,745)

 

5,372

3,243

4,049

(Increase) decrease in trade and other receivables

(1,158)

1,167

96

(Increase) decrease in inventories

(35)

385

200

(Decrease) increase in trade and other payables

(1,677)

68

646

(Decrease) increase in provisions

(192)

250

44

 

2,310

5,113

5,035

Interest paid

(433)

(442)

(929)

Tax received

772

314

546

Net cash inflow from continuing operating activities

2,649

4,985

4,652

Net cash outflow from operating activities in discontinued operations

(663)

(1,020)

 

(768)

Net cash inflow from operating activities

1,986

3,965

3,884

Cash flows from investing activities

 

 

 

Acquisition of property, plant and equipment

(219)

(504)

(705)

Capitalised development expenditure

(982)

(2,318)

(4,035)

Acquisition of other intangible assets

(26)

(92)

(212)

Net cash outflow from investing activities in continuing operations

(1,227)

(2,914)

 

(4,952)

Net cash inflow (outflow) from investing activities in discontinued operations

464

(231)

 

(252)

Net cash outflow from investing activities

(763)

(3,145)

(5,204)

Cash flows from financing activities

 

 

 

Proceeds from the issue of share capital (net of expenses)

-

-

 

14,271

Proceeds from new loan

-

2,000

-

Repayment of borrowings

(1,500)

(1,500)

(8,000)

Dividends paid

-

-

(1,250)

 

Net cash (outflow) inflow from financing activities in continuing operations

 

 

(1,500)

 

 

500

 

 

5,021

Net cash flow from financing activities in discontinued operations

-

-

 

-

Net cash (outflow) inflow from financing activities

(1,500)

500

5,021

Net (decrease) increase in cash and cash equivalents

(277)

1,320

3,701

Cash and cash equivalents at start of period

7,941

4,240

4,240

Cash and cash equivalents at period end

7,664

5,560

7,941

Unaudited notes

 

1              Accounting Policies

1.1          Basis of preparation

The interim financial information set out in this statement for the six months ended 31 July 2017 and the comparative figures for the six months ended 31 July 2016 are unaudited.  This financial information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.  It does not comply with IAS 34 'Interim Financial Reporting' as is permissible under the rules of the AIM market ("AIM").

 

This interim statement, which is neither audited nor reviewed, has been prepared in accordance with the measurement and recognition criteria of Adopted IFRS's.  This statement does not include all the information required for the full annual financial statements and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 January 2017.

 

The half year results were approved by the Board of Directors on 21 August 2017.

1.2          Accounting policies

The accounting policies applied in preparing these interim financial statements are the same as those applied in the preparation of the annual financial statements for the year ended 31 January 2017, as described in those financial statements.

1.3          Status of financial information

The financial figures for the year ended 31 January 2017, as set out in this report, do not constitute statutory accounts but are derived from the statutory accounts for that financial year.  Those accounts were prepared under IFRS and have been reported on by the Company's auditor and delivered to the Registrar of Companies.  The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

1.4          Principal risks and uncertainties

The principal risks and uncertainties associated with the Group's business can be divided into the following main areas:

• Key products

• Key customers

• Regulatory clearance

• Marketing Authorisations ('product licences') for new products

• Facilities

• Reputation

• Changes in legislation, drug tariff and prescription pricing practice

• Loss of key employees

• Cash flow in high value contracts

Information on these risks and how they are managed is given on page 22 in the Annual Report and Accounts 2017.  In the view of the Board these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the six months under review.

 

2                              Segmental reporting

The following analysis by segment is presented in accordance with IFRS 8 on the basis of those segments whose operating results are regularly reviewed by the Board of Directors (the Chief Operating Decision Maker as defined by IFRS 8) to assess performance and make strategic decisions about allocation of resources.

 

The sectors distinguished as operating segments are Specials and Niche.  A short description of these sectors is as follows:

·    Specials - Manufacture, source and supply specials to pharmacies, pharmaceutical wholesalers, hospitals (NHS and private) and other specials suppliers throughout the UK and overseas.

·    Niche - develop and supply niche pharmaceuticals, provide development and regulatory services and out-license products and dossiers to third parties across Europe.

These segments have separate management teams and offer different products and services.  These operating segments are reportable segments.  The segment results, as reported to the Board of Directors, are calculated under the principles of IFRS.  Performance is measured on the basis of Adjusted EBITDA which comprises the segment result before non-cash items (amortisation, depreciation and share based payments) and other items that are excluded when the Board assess performance. During the period the Board of Directors made a decision, following a strategic review, and subsequent sale of Total Medication Management Services Limited, to re-organise its segments, focussing on its core 'Specials' and 'Niche' divisions. As a result the Medication Adherence division ceased to exist and as a consequence Protomed Limited, previously reported in the Medication Adherence division, is now reported in Specials. Separately PERN Consumer Products Limited, previously reported in Niche has been transferred to Specials. The 2016 results have been restated in line with the current reportable segments so that all current and prior period segments are reported on a like-for-like basis.

A reconciliation between Adjusted EBITDA and Profit before tax is included in the tables below:

 

 

2              Segmental reporting continued

31 July 2017 (Unaudited)

 

Specials

Niche

Total

 

£000

£000

£000

Result and reconciliation to profit before tax

 

 

 

Total revenue

35,220

6,333

41,553

Intersegmental

(4,351)

(999)

(5,350)

Revenue

30,869

5,334

36,203

Segment adjusted EBITDA

4,718

1,794

6,512

Group cost centres

 

 

(770)

Group adjusted EBITDA

 

 

5,742

Intangible amortisation

 

 

(744)

Depreciation

 

 

(403)

Deferred consideration accounted for as remuneration (Lamda)

 

 

 

(370)

Share based payments

 

 

(653)

Operating profit

 

 

3,572

Financial expense

 

 

(370)

Share of profit of jointly

controlled entities

 

 

59

Profit before taxation from continuing operations

 

 

 

3,261

 

NET ASSETS

 

 

 

Segment assets

76,068

17,249

93,317

Segment liabilities

(53,020)

(25,064)

(78,084)

Segment net assets (liabilities)

23,048

(7,815)

15,233

Unallocated net assets

 

 

35,080

Total net assets

 

 

50,313

 

 

 

 

Depreciation and amortisation

520

627

1,147

Capital expenditure

64

155

219

Capitalised development, patent and software costs

 

109

 

899

 

1,008

 

 

Unallocated net assets include goodwill and intangibles (£19.3m), trade and other payables (£0.6m), bank term loans (£19.5m) and net inter-group loan receivables (£35.9m).

 

 

 

 

 

 

 

2              Segmental reporting continued

31 July 2016 (Unaudited)

 

Specials

Niche

Total

 

£000

£000

£000

Result and reconciliation to profit before tax

 

 

 

Total revenue

32,157

4,023

36,180

Intersegmental

(2,415)

(1,690)

(4,105)

Revenue

29,742

2,333

32,075

Segment adjusted EBITDA

5,467

(165)

5,302

Group cost centres

 

 

(640)

Group adjusted EBITDA

 

 

4,662

Intangible amortisation

 

 

(373)

Depreciation

 

 

(484)

One off costs

 

 

(393)

Deal costs

 

 

(62)

Deferred consideration accounted for as remuneration (Lamda)

 

 

 

(962)

Share based payments

 

 

(333)

Operating profit

 

 

2,055

Financial expense

 

 

(500)

Share of profit of jointly

controlled entities

 

 

79

Profit before taxation from continuing operations

 

 

 

1,634

 

NET ASSETS

 

 

 

Segment assets

94,115

21,687

115,802

Segment liabilities

(56,878)

(20,925)

(77,803)

Segment net assets (liabilities)

37,237

762

37,999

Unallocated net assets

 

 

17,636

Total net assets

 

 

55,635

 

 

 

 

Depreciation and amortisation

717

140

857

Capital expenditure

153

351

504

Capitalised development, patent and software costs

 

396

 

2,014

 

2,410

 

Unallocated net assets include goodwill and intangibles (£10.0m), trade and other payables (£2.9m), bank term loans (£29.4m), net inter-group loan receivables (£25.9m) and net assets in relation to discontinued operations (£14.0m).

 

 

 

3              Discontinued operations

NuPharm Laboratories Limited ('NuPharm') was classified as a discontinued activity in the financial year ended 31 January 2017. The prior period results ended 31 July 2016 have been restated to account for NuPharm as a discontinued activity and record a loss after tax of £0.6m for that period. There has been no activity by NuPharm in the current period. 

Total Medication Management Services Limited (trading as Biodose Services) was disposed of in June 2017 and its loss after tax of £0.2m (H1 2017: £0.2m, FY 2017: £0.2m) has been accounted for as a discontinued activity in the current period. Both the prior period for the six months ended 31 July 2016 and the financial year ended 31 January 2017 have been restated to classify Biodose Services as a discontinued activity.

 

 

 

(Unaudited)

6 months ended
31 July 2017

(Unaudited)

6 months ended 31 July 2016

(Audited)

Year ended
31 January 2017

 

 

 

£000

£000

£000

 

 

 

 

 

 

Revenue

 

 

12,287

10,732

23,736

Cost of sales

 

 

(11,663)

(10,530)

(23,721)

 

 

 

             

 

 

Gross profit

 

 

624

202

15

Other operating income

 

 

-

31

86

Distribution expenses

 

 

(156)

(161)

(341)

Administrative expenses

 

 

(525)

(655)

(2,356)

Intangible amortisation

 

-

(138)

(11,798)

Depreciation

 

 

(20)

(131)

(282)

Loss on disposal of subsidiary undertaking

 

(109)

-

-

 

 

 

             

 

 

Operating loss

 

 

(186)

(852)

(14,676)

Financial expense

 

 

-

-

-

 

 

 

             

 

 

Loss before tax from discontinued operations

 

(186)

(852)

(14,676)

 

 

 

 

 

 

Taxation

 

 

 

 

 

Current tax credit

 

 

3

-

45

Deferred tax credit

 

 

-

25

677

 

 

 

             

 

 

Loss for the year from discontinued operations

 

(183)

(827)

(13,954)

 

 

 

 

 

 

 

 

 

 

The major classes of assets and liabilities directly attributable to the discontinued operation are:

 

 

 

 

Non-current assets

 

 

-

14,828

1,956

Inventories

 

 

-

721

549

Trade and other receivables

 

 

-

2,584

3,468

Cash and cash equivalents

 

 

-

1,811

1,831

Trade and other payables

 

 

-

(4,719)

(6,488)

Provisions

 

 

-

(647)

(459)

Tax liabilities

 

 

-

(574)

-

 

3              Discontinued operations continued

The Group disposed of Biodose Services on 26 June 2017 and received gross consideration of £1.75m. This disposal reduced the Group's assets and liabilities as follows:

          

                                                                                                                                                                           (Unaudited)
                                                                                                                                                                           31 July 2017

Net assets

£000

 

 

Property, plant & equipment

95

Working capital

(1,430)

Cash

1,286

 

 

Net identifiable assets and liabilities

(49)

Goodwill

1,841

Loss on disposal of subsidiary undertaking

(109)

Net consideration

1,683

 

 

Satisfied by:

 

Cash

1,750

Fees incurred on sale of business

(67)

Net consideration

1,683

The table below reconciles reported revenue, operating profit and adjusted EBITDA to their restated equivalents following classification of NuPharm and Biodose Services as discontinued operations:

 

 

(Unaudited)

6 months ended

31 July 2017

(Unaudited)
6 months ended

31 July 2016

 

£000

£000

 

 

 

Revenue as reported

36,203

42,807

Restatement for discontinued operations

-

(10,732)

Restated revenue

36,203

32,075

 

 

 

Adjusted EBITDA as reported

5,742

4,161

Restatement for losses from discontinued operations

-

501

Restated adjusted EBITDA

5,742

4,662

Intangible asset amortisation

(744)

(373)

Depreciation

(403)

(484)

Deferred consideration (Lamda)

(370)

(962)

Share-based payments

(653)

(333)

Other exceptional items

-

(455)

Restated operating profit

3,572

2,055

Discontinued operations previously reported as continuing

-

(852)

Operating profit as reported

3,572

1,203

 

 

 

4              Earnings per share

 

(Unaudited)

Continuing operations

6 months ended 31 July 2017

(Unaudited)

Total Group

6 months

ended

31 July 2017

(Unaudited)

Continuing operations

6 months ended 31 July 2016

(Unaudited)

Total Group

6 months

ended

31 July 2016

(Audited)

Continuing operations

for the year ended

31 January 2017

(Audited)

Total Group for the year ended
31 January 2017

Profit (loss) attributable to equity shareholders of the parent (£000)

2,965

 

 

 

2,782

1,789

 

 

 

962

(8,812)

 

 

 

(22,766)

 

 

 

 

 

 

 

Basic weighted average number of shares ('000)

 

169,118

 

169,118

 

125,000

 

125,000

 

134,764

 

134,764

 

Dilutive potential ordinary shares ('000)

13,434

 

 

13,434

-

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

Diluted weighted average number of shares ('000)

 

182,552

 

182,552

 

125,000

 

125,000

 

134,764

 

134,764

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

6 months  ended 31 July 2017

(Unaudited)

6 months ended 31 July 2016

(Audited)

Year ended 31 January 2017

 

 

 

 

Pence

Pence

Pence

 

 

 

 

 

 

 

Basic earnings (loss) per share

1.7

0.8

(16.9)

Diluted earnings (loss) per share

1.5

0.8

(16.9)

Basic earnings (loss) per share - continuing operations

1.8

1.4

(6.5)

Diluted earnings (loss) per share - continuing operations

1.6

1.4

(6.5)

Basic loss per share - discontinued operations

(0.1)

(0.6)

(10.4)

Diluted loss per share - discontinued operations

(0.1)

(0.6)

(10.4)

 

 

The dilutive potential ordinary shares relate to the share options. 

 

 

 

4    Earnings per share continued

 

 

 

 

 

 

(Unaudited)

6 months

ended

31 July

2017

(Unaudited)

6 months

ended

31 July

2016

(Audited)

Year

ended

31 January

2017

 

 

 

 

 

£000

£000

£000

 

 

 

 

 

 

 

 

Profit (loss) after tax

 

 

 

 

2,965

1,789

(8,812)

Add back:

 

 

 

 

 

 

 

Impairment of intangible assets

 

 

 

-

-

9,403

Impairment of investment

 

 

 

 

-

-

105

Board restructuring

 

 

 

 

-

-

1,085

One off costs

 

 

 

 

-

393

-

Share based payments

 

 

 

 

653

333

706

Deal costs

 

 

 

 

-

62

-

Niche reorganisation

 

 

 

 

-

-

2,666

Non-recurring costs

 

 

 

 

-

-

492

Finance costs

 

 

-

-

103

Deferred consideration accounted for as remuneration (Lamda)

 

 

 

370

 

962

 

1,977

Less tax associated with adjustments

 

 

-

(91)

(869)

Adjusted profit after tax

 

 

 

 

3,988

3,448

6,856

                     

 

The adjusted EPS, based on the adjusted earnings above for the period from continuing operations and weighted number of shares in issue of 169,118,000 (31 July 2016: 125,000,000) is 2.4 pence (31 July 2016: 2.8 pence).

 

The adjusted diluted earnings per share based on the adjusted earnings from continuing operations above and a weighted average number of shares of 182,552,000 (31 July 2016: 125,000,000) is 2.2 pence (31 July 2016: 2.8 pence).

 

 

 

5              Intangible assets

 

 

 

Software

development

Development

costs

Patents &

 trade-marks

 

Customer
relationship

Goodwill

Total

 

£000

£000

£000

£000

£000

£000

Cost

 

 

 

 

 

 

Balance at 1 February 2016

282

11,718

299

4,515

72,659

89,473

Internal developments

-

2,318

-

-

-

2,318

External purchases

92

-

-

-

-

92

Balance at 31 July 2016

374

14,036

299

4,515

72,659

91,883

 

 

 

 

 

 

 

Balance at 1 August 2016

374

14,036

299

4,515

72,659

91,883

Internal developments

-

1,717

-

-

-

1,717

External purchases

(20)

-

140

-

-

120

Reclassified from tangible assets

 

519

 

-

 

-

 

-

 

-

 

519

Transfers

(142)

142

-

-

-

-

Balance at 31 January 2017

 

731

 

15,895

 

439

 

4,515

 

72,659

 

94,239

 

 

 

 

 

 

 

Balance at 1 February 2017

731

15,895

439

4,515

72,659

94,239

Internal developments

-

982

-

-

-

982

External purchases

26

-

-

-

-

26

Business disposed

-

-

-

-

(1,841)

(1,841)

Balance at 31 July 2017

757

16,877

439

4,515

70,818

93,406

 

 

 

 

 

 

 

 

 

 

5    Intangible assets continued

 

 

 

Software

development

Development

costs

Patents &

 trade-marks

 

Customer

relationship

Goodwill

Total

Amortisation and impairment

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

Balance at

1 February 2016

 

2

 

649

 

100

 

831

 

9,459

 

11,041

Amortisation for the period

 

-

 

270

 

15

 

226

 

-

 

511

Balance at 31 July 2016

2

919

115

1,057

9,459

11,552

 

 

 

 

 

 

 

Balance at 1 August 2016

2

919

115

1,057

9,459

11,552

Amortisation for the period

 

46

 

1,274

 

14

 

156

 

-

 

1,490

Impairment

-

7,910

249

2,439

10,854

21,452

Reclassified from tangible assets

 

252

 

-

 

-

 

-

 

-

 

252

Balance at

31 January 2017

 

300

 

10,103

 

378

 

3,652

 

20,313

 

34,746

 

 

 

 

 

 

 

Balance at

1 February 2017

 

300

 

10,103

 

378

 

3,652

 

20,313

 

34,746

Amortisation for the period

 

75

 

566

 

16

 

87

 

-

 

744

Balance at 31 July 2017

375

10,669

394

3,739

20,313

35,490

 

Net book value

 

 

 

 

 

 

At 31 July 2016

372

13,117

184

3,458

63,200

80,331

At 31 January 2017

431

5,792

61

863

52,346

59,493

At 31 July 2017

382

6,208

45

776

50,505

57,916

 

Impairment and amortisation

The impairment and amortisation charges are recognised in the following line items in the consolidated income statement

 

 

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

 

6 months  ended 31 July 2017

6 months ended 31 July 2016

Year ended

31 January 2017

 

 

 

£000

£000

£000

Administrative expenses

 

 

744

511

11,195

Discontinued operations

 

 

-

-

12,258

 

 

 

744

511

23,453

 

 

6              Net Debt

 

 

 

(Unaudited)

6 months ended

31 July 2017

£000

(Unaudited)

6 months ended

31 July 2016

£000

(Audited)

Year ended

31 January 2017

£000

Cash and Cash equivalents

7,664

5,560

7,941

Other interest bearing loans and borrowings

(19,519)

(29,399)

(20,960)

Net debt

(11,855)

(23,839)

(13,019)

 

The Group's banking facilities comprise a £25m term loan and a £10m revolving credit facility. .  The term loan outstanding (net of unamortised loan issues costs) of £19.5m amortises by quarterly repayments of £0.75m until July 2019 when the remaining balance is repayable in full. .

 

7              Forward Looking Statements

This announcement and the half year results contain certain projections and other forwardlooking statements with respect to the financial condition, results of operations, businesses and prospects of Group.  Whilst these statements are made in good faith based on the current expectation and beliefs of the Directors of the Company, they involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future.  There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forwardlooking statements.  Any of the assumptions underlying these forwardlooking statements could prove inaccurate or incorrect and therefore any results contemplated in the forwardlooking statements may not actually be achieved.   Recipients are cautioned not to place undue reliance on any forwardlooking statements contained herein.  Quantum undertakes no obligation to update or revise (publicly or otherwise) any forwardlooking statement, whether as a result of new information, future events or other circumstances.  Nothing in this announcement or half year forecasts should be construed as a profit forecast.

 

 

 

Non-GAAP measures definitions

Metric

Description

Why we use it

Adjusted EBITDA

Adjusted EBITDA is statutory operating profit excluding:

§  Depreciation and impairments of tangible non-current assets;

§  Amortisation and impairments of intangible non-current assets;

§  Items that management judge to be one-off or non-operational; and

§  Acquisition-related items.

Adjusted EBITDA is profitability stated before the non-cash accounting impact of depreciation, amortisation, impairments, fair value adjustments and share-based payments, and excludes the potentially distorting effects of non-recurring and non-operational items. This is the measure management use internally to assess the underlying trading performance of the business.

Adjusted earnings per share

Adjusted earnings per share is adjusted profit after tax divided by the weighted average number of ordinary shares in issue during the financial year.

Adjusted profit after tax is adjusted EBITDA:

§  Less depreciation and amortisation;

§  Less net financing expenses;

§  Plus the Group's share of profit of equity-accounted investees, net of tax;

§  Includes an accrued charge or credit for corporation tax on taxable profits; and

§  Includes movement in provisions for deferred tax.

All adjustments made to adjusted EBITDA as set out in the definition above are net of tax where applicable.

A reconciliation to earnings per share is provided in note 4 of this announcement.

Adjusted earnings per share (and the growth or contraction versus previous periods) allows management to assess the post-tax underlying trading performance of the business in combination with the impact of capital structuring actions on the share base (e.g. as a result of a share issue or a share buyback programme).

Net debt

Net debt comprises:

§  The carrying value of all bank term loans;

§  The carrying value of all drawn revolving credit facilities and overdrafts; and

§  Unamortised loan issue costs.

Less:

§  Cash and cash equivalents.

All amounts are closing balances as at the relevant balance sheet date.

A breakdown of net debt is set out on page 12.

This represents the amount of the Group's funding structure that is provided through debt finance.

 

- Ends -

 

 

 


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Half Year Results - RNS