Interim Results

NMT Group PLC 06 August 2003 6 August 2003 NMT GROUP PLC Interim Results for the six months ended 30 June 2003 NMT Group, the provider of drug delivery solutions to prevent needlestick injury, announces its interim results for the six months ended 30 June 2003. Key points - Turnover increased significantly to £5.4 million (2002: £0.9 million), double the turnover for the whole of 2002 - Operating loss reduced to £2.2 million (2002: £6.6 million before exceptional items) - Cost reduction efforts continue - cash outflow significantly decreased to £1.8 million (2002: £6.1 million) - Acquired additional intellectual property to develop safety, retractable pre-filled syringe, complementary to in-house development efforts - Discussions on-going with potential partners for 2nd Generation syringes - RTI hearing has been further delayed until June 2004 - Net cash of £13.4 million (£15.4 million at 31 December 2002) Commenting on the results, Roy Smith, Chief Executive Officer, said: 'We are encouraged by the Company's performance in the first six months of 2003 and expect this trend to continue in the second half. We have a strong cash position, but securing greater certainty for 2004 and beyond remains both a challenge and a priority for the Board.' Enquiries: NMT Group PLC Roy Smith, Chief Executive Officer Tel: 01506 445004 Financial Dynamics Tel: 0207 831 3113 David Yates, Sarah MacLeod CHAIRMAN'S STATEMENT The Group has demonstrated a significant improvement in financial performance over the last six months, largely due to the Livingston manufacturing facility successfully increasing production to service the Supply Agreement with Roche. Whilst we expect this positive trend to continue in the short term, the medium term success of this contract will depend both upon Roche's requirements beyond 2003 and our ability to further reduce production costs. In parallel to our cost reduction efforts we continue to seek additional sales channels for our first generation syringes. Both of these activities remain a major priority and have received significant management attention. Although discussions continue with several multi-national medical device companies for our 2nd Generation syringes, successful completion of a partnership agreement with any of these organisations has not been achieved to date. Reviews of the integrity of our intellectual property by a number of third parties have not identified any material issues. Ultimately, the success of this development will depend on the size of capital investment required, the time necessary to bring the products to market and the ability to secure acceptable commercial terms from a prospective partner. The Group has recently acquired additional intellectual property to develop safety solutions for the pharmaceutical industry in the pre-fill syringe area. Significant interest has been shown by several companies and discussions are continuing. Results Turnover of £5.4m in the first half of 2003 (2002: £0.9m) was double the entire turnover for 2002. Operating costs have remained similar to the same period last year, which has resulted in a reduced operating loss of £2.2m (2002: £6.6m loss before exceptional items). The Group's net cash at the end of June 2003 was £13.4m, a decrease of £2.0m since the end of December 2002. Cash outflow from operating activities was £1.8m and was a significant reduction on the £6.1m outflow for the corresponding period of 2002. This has been primarily due to the increased sales under the Supply Agreement with Roche. Litigation The trial of the lawsuit brought by Retractable Technologies Inc, a US competitor to NMT, alleging that the 1st Generation syringe infringes various patents held by RTI has now been further delayed and is expected to be in June 2004. No new facts have emerged during the process of discovery to cause us to change our views that we will successfully defend this action. Board George McLellan retired as a Non-Executive Director at the AGM in May; his contribution to the development of the Company since listing in 1997 is greatly appreciated. In July Laurie Rostron joined NMT as a Non-Executive Director, bringing significant experience of both the healthcare industry and small cap listed companies to the Board. Outlook The financial performance during the first six months of 2003 is most encouraging and we expect this trend to continue for the remainder of the year. We have a strong cash position, but securing greater certainty for 2004 and beyond remains both a challenge and a priority for the Board. R H Gilmour Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 30 June 2003 Unaudited Unaudited Audited Interim Interim Full year 2003 2002 2002 £'000 £'000 £'000 ______ ______ ______ Turnover 5,433 925 2,758 ______ ______ ______ Operating loss - before exceptional items (2,221) (6,601) (12,411) Exceptional items - (2,524) (2,524) ______ ______ ______ Group operating loss (2,221) (9,125) (14,935) ______ ______ ______ Interest receivable 243 438 789 Interest payable (36) (63) (102) ______ ______ ______ Loss on ordinary activities before taxation (2,014) (8,750) (14,248) Taxation 37 94 316 ______ ______ ______ Loss for the financial period (1,977) (8,656) (13,932) ______ ______ ______ Loss per ordinary share basic and diluted (0.2)p (1.0)p (1.6)p Loss per share before exceptional items (0.2)p (0.7)p (1.3)p NOTES 1 Basis of preparation The financial information in this report does not comprise statutory accounts for the purposes of Section 240 of the Companies Act 1985. The interim accounts for the six months ended 30 June 2003 and six months ended 30 June 2002, which are unaudited, have been prepared on the basis of accounting policies consistent with those set out in the Company's full accounts for the year ended 31 December 2002. The accounts for the year ended 31 December 2002 presented in this report are an abridged version of the full accounts which carried an unqualified auditors' report and have been filed with the Registrar of Companies. There is no difference between the loss on ordinary activities before taxation and the retained loss for the period stated above and their historical cost equivalents. 2 Taxation As a result of losses brought forward there is anticipated to be no tax charge in the current year. The tax credit reflects a research and development tax credit for the period. 3 Loss per share The calculation of loss per share is based on the loss for the period attributable to ordinary shareholders and on the average number of ordinary shares in issue during the period, which totalled 871,131,794 shares (2002 interim - 871,131,294 : full year - 871,131,500). As a loss has been incurred during the six months ended 30 June 2003 there is no dilutive effect of unexercised share options. CONSOLIDATED BALANCE SHEET As at 30 June 2003 Unaudited Unaudited Audited Interim Interim Full year 30 June 30 June 31 December 2003 2002 2002 £'000 £'000 £'000 ______ ______ ______ Fixed assets Tangible assets 8,867 9,815 9,385 Current assets Stocks 824 1,243 701 Debtors 2,627 850 1,446 Cash at bank and in hand 13,351 20,410 15,406 ______ ______ ______ 16,802 22,503 17,553 ______ ______ ______ Creditors: amounts falling due within one year (2,389) (1,900) (1,747) ______ ______ ______ Net current assets 14,413 20,603 15,806 ______ ______ ______ Total assets less current liabilities 23,280 30,418 25,191 ______ ______ ______ Creditors: amounts falling due after more than one year (232) (790) (457) ______ ______ ______ Net assets 23,048 29,628 24,734 ______ ______ ______ Capital and reserves Called up share capital 37,187 37,187 37,187 Share premium account 38,639 38,639 38,639 Profit and loss account (52,778) (46,198) (51,092) ______ ______ ______ Total equity shareholders' funds 23,048 29,628 24,734 ______ ______ ______ CONSOLIDATED CASH FLOW STATEMENT For the six months ended 30 June 2003 Unaudited Unaudited Audited Interim Interim Full year 2003 2002 2002 £'000 £'000 £'000 ______ ______ ______ Reconciliation of operating loss to net cashflow from operating activities Operating loss (2,221) (9,125) (14,935) Impairment of tangible fixed assets - 1,204 1,204 Depreciation of tangible fixed assets 779 885 1,734 Exchange adjustments 257 525 874 Share options - application of UITF 17 34 34 67 Exceptional stock write down - 1,320 1,320 (Increase) / decrease in stock (123) 58 600 (Increase) / decrease in debtors (1,229) (198) (467) Increase / (decrease) in creditors 723 (844) (1,006) ______ ______ ______ Net cash outflow from operating activities (1,780) (6,141) (10,609) ______ ______ ______ Consolidated cash flow statement Net cash outflow from operating activities (1,780) (6,141) (10,609) Returns on investments & servicing of finance Interest received (net) 292 363 570 Taxation - 94 94 Capital expenditure (261) (372) (791) ______ ______ ______ Net cash outflow before management of liquid resources and financing (1,749) (6,056) (10,736) Management of liquid resources 2,743 4,950 9,369 Net cash outflow from financing (306) (274) (598) ______ ______ ______ Increase / (decrease) in cash in the period 688 (1,380) (1,965) ______ ______ ______ Reconciliation of net cashflow to movement in net funds Increase / (decrease) in cash 688 (1,380) (1,965) Cashflow from finance leases-repayments of principle 306 274 598 Cash inflow from management of liquid resources (2,743) (4,950) (9,369) ______ ______ ______ Decrease in net funds in period (1,749) (6,056) (10,736) Net funds at beginning of period 14,341 25,077 25,077 ______ ______ ______ Net funds at end of period 12,592 19,021 14,341 ______ ______ ______ STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the six months ended 30 June 2003 Unaudited Unaudited Audited Interim Interim Full year 2003 2002 2002 £'000 £'000 £'000 ______ ______ ______ Loss on ordinary activities after taxation (1,977) (8,656) (13,932) Exchange adjustment on translation of investment in subsidiary 257 525 874 ______ ______ ______ Total recognised losses for the period (1,720) (8,131) (13,058) ______ ______ ______ RECONCILIATION OF SHAREHOLDERS' FUNDS For the six months ended 30 June 2003 Unaudited Unaudited Audited Interim Interim Full year 2003 2002 2002 £'000 £'000 £'000 ______ ______ ______ Loss for the period (1,977) (8,656) (13,932) Other recognised gains for the period 257 525 874 ______ ______ ______ Total recognised losses for the period (1,720) (8,131) (13,058) Share options - notional cost of share options granted 34 34 67 ______ ______ ______ Total movements during the period (1,686) (8,097) (12,991) Shareholders' funds at start of period 24,734 37,725 37,725 ______ ______ ______ Total shareholders' funds at end of period 23,048 29,628 24,734 ______ ______ ______ This information is provided by RNS The company news service from the London Stock Exchange

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