Half-year Report

RNS Number : 4256H
Omega Diagnostics Group PLC
24 November 2022
 

OMEGA DIAGNOSTICS GROUP PLC

("Omega" or the "Company" or the "Group")

 

INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022

 

Omega (AIM: ODX), the specialist medical diagnostics company focused on promoting a personalised and functional approach to health and nutrition, announces its unaudited interim results for the six months ended 30 September 2022.

 

Operational Highlights:

 

· Pivoted the business to focus solely and strategically on the Health and Nutrition diagnostics business ( formerly known as Food Intolerance)

· Disposal of loss-making CD4 business for £6.3m completed in July 2022

Positive WHO data received for VISITECT® CD4 test

Accubio have approved the release from escrow of the full £4.0m deferred consideration

· Automation project delivered, bringing greater laboratory efficiencies and helping to attract new customers

· Lease extension agreed for current premises at Eden Research Park, Littleport

· My Health Tracker by Omega app in final stage beta testing

 

Financial Highlights:

 

· Revenue down by 18% to £3.4m (H1 2021: £4.2m)

· Gross margin decreased to 54.0% (H1 2021: 64.4%)

· Loss before tax of £0.7m (H1 2021: £0.0m)

· Adjusted EBITDA loss1 of £0.2m (H1 2021: profit £0.4m)

· Loss on discontinued operations £1.4m (H1 2021: £3.4m)

· Gross equity fund raise of £2.2m completed

· Cash balance £2.7m (H1 2021: £4.7m)

 

1 Adjusted for exceptional items, amortisation of intangible assets and share based payment charges

 

Post period highlights:

 

· Initial product range expansion complete, concluding with heads of terms signed for:

§ Development of a bespoke microbiome test

§ Development of a bespoke nutrigenomics test

· My Health Tracker by Omega App in final beta testing phase ahead of January 2023 launch

· New all-staff share incentive plan launched to help retain and motivate employees

 

Commenting on the results, Simon Douglas, Chairman, said: " We are pleased to have executed on our strategic decision to re-align the Group in the period, disposing of the loss-making business in Alva, reducing operating costs and focusing solely on the profitable and cash generative Health and Nutrition business and we are delighted to be notified of the impending release of the full CD4 deferred consideration of £4.0m. We have implemented the plan we set out to shareholders, growing our installed base, introducing our new digital platform and signing two partnership agreements which will expand our product portfolio and drive additional revenue growth. Our plans to create a US market presence will be progressed following the receipt of the remainder of the CD4 sale proceeds.

 

"Whilst we expect a stronger second half, our full year sales will be marginally lower than previously anticipated to reflect the delayed US investment plans. The performance expectations of the remainder of our business remain unchanged and the Group continues to target EBITDA break even this year."

 

Investor presentation

Jag Grewal, CEO, and Chris Lea, CFO, will provide a live presentation relating to the Interim Results via the Investor Meet Company platform today at 4:30pm GMT. The presentation is open to all existing and potential shareholders.

 

Investors can sign up to Investor Meet Company for free and add to meet OMEGA DIAGNOSTICS GROUP PLC via:

https://www.investormeetcompany.com/omega-diagnostics-group-plc/register-investor

 

The investor presentation will be available later this morning on the Company website:

https://www.omegadx.com/Investor-Relations/Corporate-Information

 

The information communicated in this announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

 

Contacts: 

 

Omega Diagnostics Group PLC 

www.omegadiagnostics.com

Jag Grewal, Chief Executive 

via Walbrook PR

Chris Lea, Chief Financial Officer




finnCap Ltd  

Tel: 020 7220 0500

Geoff Nash/Edward Whiley (Corporate Finance)


Alice Lane/ Harriet Ward (ECM)




Walbrook PR Limited

Tel: 020 7933 8780 or omega@walbrookpr.com

Paul McManus / Lianne Applegarth /

Mob: 07980 541 893 / Mob: 07584 391 303 /

Sam Allen

Mob: 07502 558 258

 

 


About Omega

Omega manufactures and distributes high quality in-vitro diagnostic products for use in hospitals, clinics, laboratories and healthcare practitioners in over 85 countries.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Chairman's Statement

 

This period marks the start of an exciting time and a new era for Omega. The new management team has, in a relatively short time, disposed of the Alva site to reduce operating costs, raised additional capital and successfully divested the loss-making CD4 business, re-aligning the Group to allow the Board to exclusively focus on the profitable and cash generative Health and Nutrition business.

 

In terms of the continuing menu expansion of our diagnostic tests, and in-line with our stated strategy, we were delighted to announce the signing of two successful heads of term agreements after the period end to develop both a bespoke microbiome and nutrigenomic test. For a modest initial outlay, these tests have the potential to generate more than £1m in additional revenue in the year ending 31 March 2024.

 

We recently began beta testing a mobile application that is available via Apple iPhone and Google Android. The My Health Tracker by Omega App is a health and wellbeing tool designed to be used alongside a trained healthcare professional, allowing the patient to receive laboratory test results direct to their smartphone thereby helping the patient make personalised changes to their diet for optimal health. The app is currently in the final beta testing stage, being trialled using our own CNS Lab data, before the planned market launch early in the new year.

 

T he Board has made the sensible and prudent decision to delay the planned investment in the US market until after receipt of the remaining CD4 sale proceeds. We are delighted that Accubio share the Board's view that the CD4 test performs well and that they have now agreed to the release of the full £4.0m held in escrow, rather than wait for the report to be published by the World Health Organization. The Company remains committed to geographical expansion in the US and remains confident for the prospects of future growth in the US food sensitivity testing market, as it is estimated to be the largest and most established market in the world. This model would replicate our CNS Laboratory service direct-to-health-care-professionals, which is growing strongly in the UK this year.

 

Finally, we launched a new all-employee share incentive plan, 'Omega Diagnostics Group PLC Share Incentive Plan' which has been adopted to support the principles of wider share ownership amongst all the Company's staff, supporting retention and motivation of our employees.

 

Financial performance

 

As previously indicated revenues have been softer than the prior period, down 18% to £3.4m (2021: £4.2m) primarily due to a number of product re-registrations being in process following a significant regulatory-driven technical product change undertaken in May 2022, and variability in the ordering profile of many of the Group's FoodPrint® distributors, including those in the Middle East and North America. The Board confirms its expectation that revenues will be stronger in the second half of the financial year.

 

Revenue by product group:

 

§ Sales of FoodPrint® were down 24% to £2.2m (2021: £2.9m)

 

· Five new FoodPrint® installations were implemented in the period, with a further two installations implemented since the period end

· Representation secured in seven territories for the first time, now selling into over 85 countries

· A new FoodPrint® installation has been agreed for the US, the first new installation in that market for five years

 

§ Sales of Food Detective® were £0.7m, down by 4% from the prior year

 

§ After a two-year hiatus, the Group's largest partner in China has now re-commenced ordering for delivery in H2, which will support growth into the second part of the financial year.

 

§ CNS Lab sales were up 67% to £0.4m (2021: £0.3m)

 

· Due in large part to extensive work with a business partner to better commercialise FoodPrint® direct to consumer, as well as the UK commercial team onboarding 134 new Practitioner accounts in the first half of the financial year.

 

Gross profit from operations decreased to £1.9m (2021: £2.7m) with a lower gross margin percentage of 54.0% (2021: 64.4%). The reduction in margin principally reflects the lower proportion of the higher margin FoodPrint® tests in the product mix , coupled with lower labour efficiency given the reduced volumes. The Board are confident that margins will improve in H2 as the Company will benefit from improved operational efficiencies going forward.

 

Overheads reduced by 6% to £2.5m (2021: £2.7m). Despite centralised sales and marketing activities being wholly allocated to Health and Nutrition this year, significant reductions have been achieved in corporate costs. During the period we also restructured our quality assurance and regulatory teams, combining the two functions to reduce costs and better reflect the needs of our new business model.

 

In order to continually evolve as a business, remain competitive and further improve the customer experience and efficiency, especially for our larger customers, Omega has recently completed the validation processes to allow laboratories to automate their FoodPrint® testing using the Dynex DS2® instrument. This has already allowed our partner in the United Arab Emirates to secure a new three-year contract with the Dubai Health Authority and will allow our larger laboratory customers to process more tests more effectively and efficiently than ever before.

 

The Group continues to consider EBITDA and adjusted EBITDA (adjusted for exceptional items and share based payment costs) as being the more appropriate measures of profitability which are better aligned with the cash generating activities of the business. The EBITDA for the period was a loss of £0.3m (2021: profit of £0.3m) and the adjusted EBITDA loss was £0.2m (2021: profit of £0.4m).

 

The cash balance on 30 September 2022 was £2.7m (31 March 2022: £4.7m). The overdraft facility of £2.0m was withdrawn effective 30 September 2022 as previously advised and the current cash balance remains stable at £2.5m. The Company expects to receive the full £4.0m of deferred consideration from the sale of the CD4 business in the very near future.

 

 

Product Menu Expansion

 

As previously set out in the Company's strategic plan, in order to build a wider menu of complementary gut health tests, the Board remains committed to expanding the product menu and post-period end have successfully concluded two partnership agreements for the development of bespoke reports for microbiome and nutrigenomic testing.

 

The first agreement was announced in October 2022, when the Company signed a heads of terms partnership agreement to commercialise microbiome testing into its existing sales channels. We are working in partnership with our microbiome test provider to develop and commercialise a bespoke report for Omega, utilising the partner's proprietary software and Omega's sales channel, in order to provide a more comprehensive gut health assessment. Understanding the microbiome is the new frontier of understanding chronic inflammatory conditions arising from poor gut health and is an area the Company has recently seen a growing demand from its existing customer base.

 

The second agreement was secured earlier this month, when the Company signed heads of terms with a leading nutrigenomics software provider to develop and commercialise a bespoke DNA report. Nutrigenomics allows the healthcare professional to understand genetic strengths and weaknesses, helping to identify dietary changes that can help achieve better health.

 

These two tests require a combined up-front investment of £0.3m which mainly covers the advance purchase of future test reports and these new reports have the potential to generate over £1m in additional revenue in the year ending 31 March 2024.

 

New facility update

 

The Company has long planned to relocate to a new, purpose-built facility in Ely, Cambridgeshire, which would improve the manufacturing environment and provide the capacity needed for longer term expansion, however we continue to face unresolved issues with regards to the completion of the building to the agreed standard. The Company has appointed surveyors to identify remedial works and to assist in the re-negotiation of the Agreement for Lease, but it is not certain these issues can be overcome to the Company's satisfaction. Given the funding challenges currently faced by the new landlord and the likely timescale involved, an agreement has been reached with the existing landlord to extend the Littleport lease by two years to June 2025, thus providing sufficient time to resolve the outstanding issues and facilitate an orderly relocation in due course.

 

 

Discontinued Operations update

 

CD4

 

Effective 31 July 2022, Omega successfully disposed of its loss-making CD4 business in Alva to Accubio Limited, a wholly-owned subsidiary of Zhejiang Orient Gene Biotech Co. Ltd for up to £6.3m, having concluded that the business would be more successful under new ownership.

 

Under the terms of the sale the Company received an immediate cash payment of approximately £1.3m for fixed assets and inventory, representing the book values of these assets. As previously announced, contingent on the successful outcome of the WHO review of a now-completed clinical study in Kenya the Company expected to receive up to an additional £4.0m for the intellectual property and a future royalty income stream capped at £1.0m in aggregate. The Company provided comments on the draft performance evaluation report arising from the study in October, with the main area of discussion being the content of the instructions for use leaflet. To the Company's knowledge, all outstanding points have now been resolved and the Company awaits publication of the final report by the WHO. On 23 November 2022, Accubio confirmed that in their opinion it was no longer necessary to await the publication of the final performance evaluation report by the WHO prior to funds being released and they have instructed their legal advisers to release the full £4.0m to Omega with immediate effect.

 

DHSC dispute

 

The Group remains in an ongoing dispute with the Department of Health and Social Care ('DHSC') regarding the potential repayment of a pre-production payment of £2.5m under a contract to manufacture COVID-19 lateral flow tests. The negotiations are continuing slowly, with mediation now expected to take place toward the end of Q1 2023. The Company can confirm that it has recently advised the DHSC of its substantial counter claim, claiming an additional £1m+ over and above the disputed £2.5m pre-production payment. Details of this counter claim will not be made public as this may be prejudicial to the dispute resolution process.

 

Outlook

 

We are pleased to have executed on our strategic decision to re-align the Group in the period, disposing of the loss-making business in Alva, reducing operating costs and focusing solely on the profitable and cash generative Health and Nutrition business and we are delighted to be notified of the impending release of the full CD4 deferred consideration of £4.0m. We have implemented the plan we set out to shareholders, growing our installed base, introducing our new digital platform and signing two partnership agreements which will expand our product portfolio and drive additional revenue growth. Our plans to create a US market presence will be progressed following the receipt of the remainder of the CD4 sale proceeds.

 

 

Whilst we expect a stronger second half, our full year sales will be marginally lower than previously anticipated to reflect the delayed US investment plans. The performance expectations of the remainder of our business remain unchanged and the Group continues to target EBITDA break even this year.

 

 

 

 

Simon Douglas

Non-Executive Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Consolidated Statement of Comprehensive Income

for the six months ended 30 September 2022



6 months ended

30 September 2022

6 months ended

30 September 2021

12 months ended

31 March 2022

 

Note

£'000

£'000

£'000

Continuing operations





Revenue

4

3,434

4,167

8,539

Cost of sales

 

(1,581)

(1,485)

(3,437)

Gross profit


1,853

2,682

5,102

Administration costs


(1,773)

(2,146)

(4,438)

Selling and marketing costs


(730)

(512)

(1,256)

Other income

 

-

-

-

Operating (loss)/profit before exceptional items


(650)

24

(592)

Exceptional items

 

-

-

(337)

Operating (loss)/profit after exceptional items


(650)

24

(929)

Finance costs

5

(6)

(12)

(21)

(Loss)/profit before taxation


(656)

12

(950)

Tax credit/(expense)

6

-

682

(459)

(Loss)/profit for the period from continuing operations

 

(656)

694

(1,409)

Discontinued operations


 



Loss after tax for the period from discontinued operations

7

(1,431)

(3,443)

(9,924)

Loss for the period


(2,087)

(2,749)

(11,333)

Other comprehensive income/(losses) to be reclassified to profit and loss in subsequent periods


 



Exchange differences on translation of foreign operations


22

(18)

10

Recycling of translation reserve


-

38

-

Tax charge

 

-

(7)

-

Other comprehensive income for the period

 

22

13

10

Total comprehensive losses
for the period

 

(2,065)

(2,736)

 

(11,323)

Earnings per share (EPS)


 



Basic and diluted EPS on loss for the period

8

(0.9)p

(1.5)p

(6.2)p



 



Earnings per share for continuing operations


 



Basic and diluted EPS on (loss)/profit for the period from continuing operations

8

(0.3)p

0.4p

(0.9)p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheet

as at 30 September 2022




As restated*


 


30 September 2022

 30 September 2021

31 March 2022

 

Note

£'000

£'000

£'000

ASSETS





Non-current assets





Intangibles

9

4,556

9,906

4,745

Property, plant and equipment

10

1,062

3,524

1,138

Right of use assets

10

62

1,692

106

Deferred taxation

 

1,120

2,754

1,107

Total non-current assets

 

6,800

17,876

7,096

Current assets


 



Inventories


1,074

2,232

1,094

Trade and other receivables


6,544

2,606

3,045

Cash and cash equivalents

 

2,712

4,698

1,605

Total current assets

 

10,330

9,536

5,744

Assets held for sale

 

-

-

4,995

Total assets

 

17,130

27,412

17,835



 



EQUITY AND LIABILITIES


 



Equity


 



Share capital


10,244

8,042

8,044

Share premium


25,100

25,331

25,340

Retained deficit


(23,534)

(13,064)

(21,537)

Translation reserve


(8)

(21)

(31)

Total equity

 

11,802

20,288

11,816



 



Liabilities


 



Non-current liabilities


 



Long-term borrowings


35

628

51

Lease liabilities


-

1,670

23

Corporation tax


-

13

-

Deferred income

 

2,500

2,643

2,500

Total non-current liabilities

 

2,535

4,954

2,574

Current liabilities


 



Short-term borrowings


31

186

204

Lease liabilities


69

168

92

Trade and other payables

 

2,282

1,816

2,674

Total current liabilities

 

2,382

2,170

2,970

Liabilities directly associated with assets held for sale

 

411

-

475

Total liabilities

 

5,328

7,124

6,019

Total equity and liabilities

 

17,130

27,412

17,835

* See note 2 for details regarding the restatement.

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

for the six months ended 30 September 2022





As restated*



 


Share

Share

Retained

Translation

As restated*

 


capital

premium

deficit

reserve

Total

 

Note

£'000

£'000

£'000

£'000

£'000

Balance at 31 March 2021 as reported

 

8,028

25,288

(9,601)

(41)

23,674

Development costs written off

2

-

-

(290)

-

(290)

Restated balance at 31 March 2021

 

8,028

25,288

(9,891)

(41)

23,384

Loss for the period to 30 September 2021


-

-

(2,749)

-

(2,749)

Other comprehensive losses - net exchange adjustments


-

-

-

(18)

(18)

Other comprehensive (losses)/income - net exchange adjustments recycled


-

-

(38)

38

-

Other comprehensive losses

 

-

-

(7)

-

(7)

Total comprehensive (losses)/income for the period


-

-

(2,794)

20

(2,774)

Share options exercised


14

43

-

-

57

Share-based payments


-

-

90

-

90

Deferred tax debit related to share-based payments

 

-

-

(469)

-

(469)

Restated balance at 30 September 2021

 

8,042

25,331

(13,064)

(21)

20,288

Loss for the period to 31 March 2022


-

-

(8,584)

-

(8,584)

Other comprehensive income - net exchange adjustments


-

-

-

28

28

Other comprehensive income/(losses) - net exchange adjustments recycled


-

-

38

(38)

-

Other comprehensive income


-

-

7

-

7

Total comprehensive losses for the period


-

-

(8,539)

(10)

(8,549)

Share options exercised


2

9

-

-

11

Share-based payments


-

-

192

-

192

Deferred tax debit related to share-based payments


-

-

(126)

-

(126)

At 31 March 2022


8,044

25,340

(21,537)

(31)

11,816

Loss for the period to 30 September 2022


-

-

(2,087)

-

(2,087)

Other comprehensive income - net exchange adjustments


-

-

-

23

23

Total comprehensive (losses)/income for the period


-

-

(2,087)

23

(2,064)

Issue of share capital for cash consideration


2,200

-

-

-

2,200

Expenses in connection with share issue


-

(240)

-

-

(240)

Share-based payments


-

-

90

-

90

Balance at 30 September 2022

 

10,244

25,100

(23,534)

(8)

11,802

* See note 2 for details regarding the restatement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Cash Flow Statement

for the six months ended 30 September 2022




As restated*


 


6 months ended

30 September 2022

6 months ended

30 September 2021

12 months ended

31 March 2022

 

 

£'000

£'000

£'000

Cash flows generated from operations





(Loss)/profit for the year from continuing operations


(656)

694

(1,409)

Loss for the year from discontinued operations


(1,431)

(3,443)

(9,924)

Adjustments for:


 



  Gain on disposal of fixed assets


-

-

(7)

 Loss on disposal of Alva site fixed assets


-

-

226

 Depreciation


120

301

671

 Amortisation of intangible assets


225

352

618

 Impairment and derecognition of intangible assets


15

80

47

   Impairment of fixed assets


27

-

-

 Impairment loss recognised on the remeasurement to fair value


149

-

1,915

 Share-based payments


90

90

282

 Taxation


-

(682)

833

  Omega Diagnostic GmbH liability settlement


-

-

(126)

 Finance costs

 

21

92

180

Cash outflow from operating activities before working capital movement


(1,440)

(2,516)

(6,694)

Decrease in trade and other receivables


672

1,569

1,130

(Increase)/decrease in inventories


(168)

6

480

Decrease in trade and other payables


(843)

(856)

(137)

Movement in grants


(4)

(5)

(8)

Receipt of advance funding from the DHSC


-

2,000

2,000

Cash (outflow)/inflow from operating activities

 

(1,783)

198

(3,229)

Investing activities


 



Income from sale of inventory


852

-

-

Income from sale of property, plant and equipment


463

-

985

Purchase of property, plant and equipment


(25)

(673)

(968)

Purchase of intangible assets

 

(51)

(411)

(510)

Net cash inflow/(outflow) in investing activities

 

1,239

(1,084)

(493)

Financing activities


 



Finance costs


-

(1)

(2)

Proceeds from issue of share capital


2,200

57

68

Expenses in connection with share issue


(240)

-

-

Principal portion of asset finance payments


(243)

(104)

(198)

Interest portion of asset finance payments


(16)

(19)

(34)

Principal portion of lease liability payments


(46)

(86)

(192)

Interest portion of lease liability payments

 

(5)

(72)

(144)

Net cash inflow/(outflow) from financing activities

 

1,650

(225)

(502)

Net increase/(decrease) in cash and cash equivalents


1,106

(1,111)

(4,224)

Effects of exchange rate movements


1

(18)

2

Cash and cash equivalents at beginning of period

 

1,605

5,827

5,827

Cash and cash equivalents at end of the period

 

2,712

4,698

1,605

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the Interim Report

for the six months ended 30 September 2022

 

1. BASIS OF PREPARATION

For the purpose of preparing the 31 March 2022 annual financial statements the Directors used IFRS as adopted by the EU and in accordance with the AIM Rules issued by the London Stock Exchange. In preparing these interim financial statements, the accounting policies used in the Group's Annual Report for the year ended 31 March 2022 have been applied consistently. The Group has not applied IAS 34 Interim Financial Reporting, which is not mandatory for AIM companies, in the preparation of these interim financial statements.

 

The interim financial statements are unaudited. The information shown in the consolidated balance sheet as at 30 September 2022 does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006 and the information in respect of the year ended 31 March 2022 has been extracted from the Group's 2022 Annual Report which has been filed with the Registrar of Companies. The report of the auditors on the financial statements contained within the Group's 2022 Annual Report was unqualified and did not contain a statement under sections 498 (2) and 498 (3) of Chapter 3, Part 16 of the Companies Act 2006.  These interim financial statements were approved by the Board of Directors on 23 November 2022.

 

 

2. RESTATEMENT OF COMPARATIVES

 

Group

 

Intangible assets

Following a review of intangible assets, one project has been identified which was not adequately defined in previous reporting periods and which does not meet the requirements of IAS 38, in that the probability of generating future economic benefits arising from the development expenditure cannot be established. The capitalised costs relating to this project are £235,000, all of which were incurred prior to 1 April 2020 and were incorrectly capitalised at the time.

 

In addition, a legacy research and development project valued at £55,000 has been identified which relates to the Group's infectious disease business, which was sold in June 2018. This amount was incorrectly not written off in the year ended 31 March 2019.

 

The costs associated with both of these projects have been written off effective 31 March 2020 through means of a prior year adjustment in accordance with the requirements of IAS 8, resulting in a reduction of the carrying value of intangible assets of £290,000 as at that date. There has been no impact on the earnings reported for the period ended 30 September 2021.

 

Deferred tax

Historically, deferred tax assets and liabilities were incorrectly reported as separate balances in prior years. The 30 September 2021 balance sheet has been restated to net off the deferred tax asset and liability, reducing the previously reported deferred tax asset by £1,200,000 with a corresponding reduction in the deferred tax liability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. RESTATEMENT OF COMPARATIVES (CONTINUED)

 

The effect of the restatements noted above on the consolidated balance sheet as at 30 September 2021 is as follows:

 


As reported

Restatement

As restated


30 September 2021

30 September 2021

30 September 2021


£'000

£'000

£'000

ASSETS




Non-current assets




Intangibles

10,196

(290)

9,906

Property, plant and equipment

3,524

-

3,524

Right of use assets

1,692

-

1,692

Deferred taxation

3,954

(1,200)

2,754

Total non-current assets

19,366

(1,490)

17,876

Current assets




Inventories

2,232

-

2,232

Trade and other receivables

2,606

-

2,606

Cash and cash equivalents

4,698

-

4,698

Total current assets

9,536

-

9,536

Total assets

28,902

(1,490)

27,412

EQUITY AND LIABILITIES




Equity




Issued capital

33,373

--

33,373

Retained deficit

(12,774)

(290)

(13,064)

Translation reserve

(21)

--

(21)

Total equity

20,578

(290)

20,288

Liabilities




Non-current liabilities




Long-term borrowings

628

-

628

Lease liabilities

1,670

-

1,670

Corporation tax

13

-

13

Deferred tax

1,200

(1,200)

-

Deferred income

2,643

-

2,643

Total non-current liabilities

6,154

(1,200)

4,954

Current liabilities




Short-term borrowings

186

-

186

Lease liabilities

168

-

168

Trade and other payables

1,816

-

1,816

Total current liabilities

2,170

-

2,170

Total liabilities

8,324

(1,200)

7,124

Total equity and liabilities

28,902

(1,490)

27,412

 

 

 

3. SEGMENT INFORMATION

 

Following the withdrawal from COVID-19 products and the decision taken in March 2022 to dispose of the CD4 business, the sale of which was completed on 31 July 2022, the only remaining division is Health and Nutrition. The Global Health division specialised in the research, development, production and marketing of kits to aid the diagnosis of infectious diseases, including COVID-19.

 

The Health and Nutrition division specialises in the research, development and production of kits to aid the detection of immune reactions to food. It also provides clinical analysis to the general public, clinics and health professionals.

 

The Corporate segment consists of centralised corporate costs which are not allocated to the trading activities of the Group.

 

Inter segment transfers or transactions are entered into under the normal commercial conditions that would be available to unrelated third parties.

 

 

 

 

 

 

 

 

 

3. SEGMENT INFORMATION (CONTINUED)

Business segment information


Health and



 

Nutrition

Corporate

Total

6 months to 30 September 2022

£'000

£'000

£'000

Revenue

3,533

-

3,533

Inter-segment revenue

(99)

-

(99)

Total revenue

3,434

-

3,434

Cost of sales

(1,581)

-

(1,581)

Gross profit

1,853

-

1,853

Operating costs

(1,947)

(556)

(2,503)

Operating loss before exceptional items

(94)

(556)

(650)

Exceptional items

-

-

-

Operating loss after exceptional items

(94)

(556)

(650)

Depreciation

106

-

106

Amortisation

225

-

225

EBITDA

237

(556)

(319)

Exceptional items

-

-

-

Share-based payment charges

-

90

(90)

Adjusted EBITDA

237

(466)

(229)

Share-based payment charges

-

(90)

(90)

Depreciation

(106)

-

(106)

Amortisation

(225)

-

(225)

Net finance costs

(6)

-

(6)

Exceptional costs

-

-

-

Loss before tax

(100)

(556)

(656)

Exceptional items

-

-

-

Share-based payment charges

-

90

90

Amortisation

49

-

49

Adjusted loss before tax

(51)

(466)

(517)

 


Health and



 

Nutrition

Corporate

Total

6 months to 30 September 2021

£'000

£'000

£'000

Revenue

4,297

-

4,297

Inter-segment revenue

(130)

-

(130)

Total revenue

4,167

-

4,167

Cost of sales

(1,485)

-

(1,485)

Gross profit

2,682

-

2,682

Operating costs

(1,852)

(806)

(2,658)

Operating profit/(loss) before exceptional items

830

(806)

24

Exceptional items

-

-

-

Operating profit/(loss) after exceptional items

830

(806)

24

Depreciation

96

-

96

Amortisation

220

-

220

EBITDA

1,146

(806)

340

Share-based payment charges

-

90

90

Exceptional items

-

-

-

Adjusted EBITDA

1,146

(716)

430

Share-based payment charges

-

(90)

(90)

Depreciation

(96)

-

(96)

Amortisation

(220)

-

(220)

Exceptional items

-

-

-

Net finance costs

(12)

-

(12)

Profit/(loss) before tax

818

(806)

12

Exceptional items

-

-

-

Share-based payment charges

-

90

90

Amortisation

49

-

49

Adjusted profit/(loss) before tax

867

(716)

151

 

The adjusted profit/(loss) before taxation is a key measure of the Group's trading performance used by the Directors. The reported numbers are non-GAAP measures.

 

 

4. REVENUES - Continuing operations

 


6 months to

30 September 2022

6 months to

30 September 2021

 

£'000

£'000

Revenues



UK

423

238

Rest of Europe

1,125

1,378

North America

606

894

South/Central America

141

242

India

286

279

Asia and the Far East

651

592

Africa and the Middle East

202

544

 

3,434

4,167

 


6 months to

30 September 2022

6 months to

30 September 2021

inc/(dec)


£'000

£'000

 %

FoodPrint ®

2,239

2,947

(24)%

Food Detective ®

706

735

(4)%

CNS laboratory service

420

251

67%

Food ELISA/other

69

234

(71)%


3,434

4,167

(18)%

 

 

5. FINANCE COSTS

 


6 months to

30 September 2022

6 months to

30 September 2021

Continuing operations

£'000

£'000

Interest payable on bank overdraft

-

2

Interest payable on lease liabilities

4

8

Interest on hire purchase and asset finance arrangements

2

2

 

6

12

 

 

6. TAXATION

 


6 months to

30 September 2022

6 months to

30 September 2021

Continuing operations

£'000

£'000

Tax credited in the income statement



Current tax - current year

-

(13)

Current tax - prior year adjustment

-

-

Deferred tax - current year

-

695

Deferred tax - prior year adjustment

-

-

 

-

682

 

Tax relating to items charged to other comprehensive income



Deferred tax on net exchange adjustments

-

(7)

 

-

(7)

 

 

 

 

 

 

 

 

 

 

 

 

6. TAXATION (CONTINUED)

 

Reconciliation of total tax credit

 



Factors affecting the tax credit for the period:

£'000

£'000

Loss/(profit) taxable

(656)

12

 



Effective rate of taxation

19%

19%




Loss before tax multiplied by the effective rate of tax

-

2


 


Effects of:

 


Expenses not deductible for tax purposes and permanent differences

-

(629)

Research and development credits

-

(30)

Deferred tax asset not recognised

125

-

Adjustment for future tax deductions on notional gains on unexercised employee share options

-

(17)

Tax under/(over) provided in prior years

-

(13)

Adjustment due to different overseas tax rate

-

5

Tax credit for the period

-

(682)

 

 

7. DISCONTINUED OPERATIONS

 


6 months to

30 September 2022

6 months to

30 September 2021

 

£'000

£'000

Revenue

657

1,560

Cost of sales

(567)

(2,274)

Gross profit/(loss)

90

(714)

Administration costs

(1,361)

(2,201)

Selling and marketing costs

-

(302)

Other income

4

4

Operating loss before exceptional items

(1,267)

(3,213)

Exceptional items

-

(150)

Operating loss after exceptional items

(1,267)

(3,363)

Finance costs

(15)

(80)

Impairment loss recognised on the remeasurement to fair value less costs to sell

(149)

-

Loss before taxation

(1,431)

(3,443)

Tax

-

-

Loss for the period from discontinued activities

(1,431)

(3,443)

 

Adjusted loss before taxation


6 months to

30 September 2022

6 months to

30 September 2021

 

£'000

£'000

Loss for the period from discontinued activities

(1,431)

(3,443)

Exceptional items

-

150

Amortisation of intangible assets

7

3

Adjusted loss for the period from discontinued activities

(1,424)

(3,290)

 

Earnings per share


6 months to

30 September 2022

6 months to

30 September 2021

 

£'000

£'000

Basic, loss for the period from discontinued operations

(0.6)p

(1.9)p

Diluted, loss for the period from discontinued operations

(0.6)p

(1.9)p

Adjusted, loss for the period from discontinued operations

(0.6)p

(1.8)p

 

 

 

 

 

 

 

 

 

7. DISCONTINUED OPERATIONS (CONTINUED)

 

The major classes of assets and liabilities of the Global Health business as at 30 September 2022 are, as follows:

 


30 September 2022

 

£'000

Assets

 

Property, plant and equipment

-

Total assets held for sale

-


 

Liabilities

 

Borrowings

(411)

Total liabilities directly associated with the assets held for sale

(411)

Net liabilities directly associated with the disposal group

(411)

 

The property, plant and equipment relate primarily to COVID-19 plant and equipment no longer used in the business which have all been written down to zero value, the liabilities relate to the hire purchase on these assets.

 

8. EARNINGS PER SHARE

 


6 months to

30 September 2022

6 months to

30 September 2021

 

£'000

£'000

Loss attributable to equity holders of the Group



Continuing operations

(656)

694

Discontinued operations

(1,431)

(3,443)

Loss attributable to equity holders of the Group for basic earnings

(2,087)

(2,749)

 


2022

2021

Continuing operations

Number

Number

Weighted average number of shares

225,443,711

182,269,637

Share options

-

6,814,300

Diluted weighted average number of shares

225,443,711

189,083,937

 

The number of shares in issue at the period end was 237,685,180. Basic earnings per share are calculated by dividing profit for the year attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the year.

 

Diluted earnings per share are calculated by dividing the loss attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Diluting events are excluded from the calculation when the average market price of ordinary shares is lower than the exercise price.

 

Adjusted earnings per share on loss for the period

The Group presents adjusted earnings per share which is calculated by taking adjusted loss before taxation and adding the tax credit in order to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

 


6 months to

30 September 2022

6 months to

30 September 2021


£'000

£'000

Loss attributable to equity holders of the Group

(2,087)

(2,749)

Exceptional items

-

150

Amortisation of intangible assets

56

52

Share-based payment charges

90

90

Adjusted loss attributable to equity holders of the Group

(1,941)

(2,457)

 

 

 

 

 

 

8. EARNINGS PER SHARE (CONTINUED)

 

Adjusted loss for the year - continuing operations

The reported numbers are non-GAAP measures

 


6 months to

30 September 2022

 6 months to

30 September 202 1

 

£'000

£'000

(Loss)/profit for the period from continuing operations

(656)

694

Exceptional items

-

-

Amortisation of intangible assets

49

49

Share-based payment charges

90

90

Adjusted (loss)/profit for the period from continuing operations

(517)

833

 

Adjusted EPS on loss for the period

(0.8)p

(1.3)p

Adjusted EPS on (loss)/profit for the period from continuing operations

(0.2)p

0.5p

 

Adjusted (loss)/profit before taxation, which is a key measure of the Group's trading performance used by the Directors, is derived by taking statutory profit before taxation and adding back exceptional items, amortisation of intangible assets (excluding development costs) and share-based payment charges

 

 

9. INTANGIBLES

 






As restated*


 


Licences/

Technology

Customer

Development

As restated*

 

Goodwill

software

assets

relationships

costs

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

Cost







At 31 March 2021 as reported

3,017

1,633

1,975

100

14,627

21,352

Prior year adjustment

-

-

-

-

(290)

(290)

Restated at 31 March 2021

3,017

1,633

1,975

100

14,337

21,062

Additions

-

-

-

-

78

78

Additions - internally generated

-

-

-

-

368

368

At 30 September 2021

3,017

1,633

1,975

100

14,783

21,508

Additions - internally generated

-

-

-

-

135

135

Currency translation

-

1

-

-

-

1

Reclassified as assets held for sale

-

-

-

-

(5,706)

(5,706)

Disposals

-

-

-

-

(31)

(31)

At 31 March 2022

3,017

1,634

1,975

100

9,181

15,907

Additions

-

-

-

-

16

16

Additions - internally generated

-

-

-

-

35

35

At 31 March 2022

3,017

1,634

1,975

100

9,232

15,958








Accumulated amortisation







At 31 March 2021

-

1,597

1,341

100

8,132

11,170

Amortisation charge in the period

-

3

49

-

300

352

Impairment charge

-

-

-

-

80

80

At 30 September 2021

-

1,600

1,390

100

8,512

11,602

Amortisation charge in the period

-

3

50

-

213

266

Impairment charge

-

16

-

-

(80)

(64)

Reclassified as assets held for sale

-

-

-

-

(642)

(642)

At 31 March 2022

-

1,619

1,440

100

8,003

11,162

Amortisation charge in the period

-

-

49

-

176

225

Impairment charge

-

15

-

-

-

15

At 31 March 2022

-

1,634

1,489

100

8,179

11,402








Net book value







At 30 September 2022

3,017

-

486

-

1,053

4,556

At 31 March 2022

3,017

15

535

-

1,178

4,745

At 30 September 2021

3,017

33

585

-

6,271

9,906

* See note 2 for details regarding the restatement.

 

 

 

 

 

10. FIXED ASSETS

 


Right of use

Leasehold

Plant and


 

assets

improvements

machinery

Total

Consolidated

£'000

£'000

£'000

£'000

Cost





At 31 March 2021

2,259

1,409

5,411

9,079

Additions

-

256

417

673

At 30 September 2021

2,259

1,665

5,828

9,752

Additions

64

138

157

359

Disposals

(1,889)

(1,107)

(1,378)

(4,374)

Reclassified as assets held for sale

(22)

-

(2,147)

(2,169)

Currency translation

-

-

1

1

At 31 March 2022

412

696

2,461

3,569

Additions

-

1

24

25

Currency translation

-

-

1

1

At 30 September 2022

412

697

2,486

3,595






Accumulated depreciation





At 31 March 2021

458

679

3,063

4,200

Charge in the period

109

42

185

336

At 30 September 2021

567

721

3,248

4,536

Charge in the period

127

49

230

406

Disposals

(375)

(286)

(970)

(1,631)

Reclassified as assets held for sale

(13)

-

(974)

(987)

Currency translation

-

-

1

1

At 31 March 2022

306

484

1,535

2,325

Charge in the period

44

-

76

120

Disposals

-

-

27

27

Currency translation

-

(1)

-

(1)

At 30 September 2022

350

483

1,638

2,471






Net book value





At 30 September 2022

62

214

848

1,124

At 31 March 2022

106

212

926

1,244

At 30 September 2021

1,692

944

2,580

5,216

 

 

 

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