Interim Results for 6 months ended 30 June 2016
Interim Results for 6 months ended 30 June 2016
Venn Life Sciences (AIM: VENN), a growing Contract Research Organisation (CRO) providing drug development, clinical trial management and resourcing solutions to pharmaceutical, biotechnology and medical device clients, announces its unaudited interim results for the six months ended 30 June 2016.
- Revenue of €9.06m (H1 2015: €4.25m)
- EBITDA profit of €0.40m (H1 2015: profit of €0.09m)
- Operating Loss €0.033m (H1 2015: loss of €0.079m)
- Cash and cash equivalents of €1.75m at 30th June 2016 (€1.10m at 30th June 2015)
- Cash and cash equivalents of €2.10m at 23rd September 2016
- Progress on Kinesis integration and initial cross sales achieved
- Continued progress on systems infrastructure with resultant improvements in operating margins
- Successful achievement of key project milestones leading to strong client endorsements and repeat business
- Strengthening of the board with the appointment of Allan Wood as non-Executive Chairman and Mary Sheahan as non-Executive Director
- Continued positive progress on new business with €2.8m contract and preferred vendorship with big Pharma announced in August
- The Company has entered into a process to sell its innovation division, Innovenn. This sale will represent the culmination of several months of effort to re-position Innovenn in such a way that will bring better clarity to the performance of the core business, and realise value from our investment in Innovenn.
Commenting on the Group’s outlook, Allan Wood, non-Executive Chairman of Venn, said:
“The future divestment of Innovenn will have a positive impact on the Company’s financial performance in the second half of this year. Importantly the disposal of this business, once achieved, will enable management to singularly focus on the growth of our core business. The addition of Kinesis into the Company has been well received by the market and we expect the second half of the year to see the benefits of this acquisition. Overall we continue to see opportunities for further growth, both organically and through M&A.”
Venn Life Sciences Holdings Plc
Allan Wood, Non-Executive Chairman Tel: +44 (0) 7185 325 898
Tony Richardson, Chief Executive Officer Tel: +353 87 2535 982
Davy (Nominated Adviser and Broker)
Fergal Meegan / Matthew de Vere White (Corporate Finance) Tel: +353 1 679 6363
Orla Bolger (Corporate Broking)
Hybridan LLP (Co-Broker) Tel: +44 (0) 20 3764 2341
Claire Louise Noyce
Walbrook PR Ltd Tel: +44 (0) 20 7933 8787 or firstname.lastname@example.org
Paul McManus Mob: +44 (0) 7980 541 893
Lianne Cawthorne Mob: +44 (0) 7584 391 303
The first half of 2016 has seen continued strong growth in sales and improved EBITDA. Management has focussed on two key areas in the six months: initiatives to improve operating margins and integration of the Kinesis business. These initiatives will continue throughout the full year. The future divestment of Innovenn represents a key development for the Company, offering potential future value for investors, whilst simplifying the current business and allowing greater focus on core areas of activity.
Fee income for the first six months of 2016 was €9.06m, up 113% on the first six months of 2015 (H1 2015: €4.25m). EBITDA profit for the period was €0.40m compared to EBITDA profit of €0.09m for the first half of 2015. With current cash reserves of €2.1m the business is well resourced to deliver on its growth plans.
As a group, we have continued to report strong growth in revenues and improved profitability. Having achieved reasonable business scale there is now a strong focus on operating efficiency and improved margins.
In October 2015 we acquired Kinesis Pharma b.v. Our focus in the first half of this year has been on business stability post-acquisition, cross selling initiatives and integration of certain support functions. The acquisition of Kinesis has been well received by the market and with a stable and talented team we can now move into the second phase of business integration and deliver sustainable business growth.
In our late phase business we have focussed our energies on operating profitability and the implementation of systems and processes to deliver higher operating margins. We continue to execute projects to a high standard and this has been reflected in the rate of referrals and repeat business.
We have extended our operating capabilities into the USA with the establishment of Venn Inc and the appointment of a VP of Operations USA. We currently have 13 people on the ground in the US and we will continue to cautiously build that base in line with client requirements.
I am pleased to join the board of Venn at this exciting point in its development. I would like to thank Tony Richardson for managing both the Chair and CEO roles for the past nine months and look forward to working with Tony and the team. I would also like to welcome Mary Sheahan to the board. Mary’s strong financial credentials and deep life science experience will be a valuable addition to the board.
New Developments and Outlook
Overall I am pleased with the strong progress achieved in this half year. There is a strong pipeline of new opportunities going into the second half of the year and we continue to see an increase in the average size of project wins. We continue to look for earnings enhancing acquisition opportunities, particularly in Central and Eastern Europe. Completing the sale of Innovenn will facilitate a singular focus on the further development of the core business.
28 September 2016
NOTES FORMING PART OF THE INTERIM FINANCIAL STATEMENTS
1. General information and basis of presentation
Venn Life Sciences Holdings Plc is a company incorporated in England and Wales. The Company is a public limited company listed on the AIM market of the London Stock Exchange. The address of the registered office is 1 Berkeley Street, London, W1J 8DJ.
The Group’s principal activity continues to be that of a Clinical Research Organisation (CRO) providing a suite of consulting and clinical trial services to pharmaceutical, biotechnology and medical device organisations.
The financial information in these interim results is that of the holding company and all of its subsidiaries. It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2015 and which will form the basis of the 2016 financial statements except for a number of new and amended standards which have become effective since the beginning of the previous financial year. These new and amended standards are not expected to materially affect the Group.
The financial information presented herein does not constitute full statutory accounts under Section 434 of the Companies Act 2006 and was not subject to a formal review by the auditors. The financial information in respect of the year ended 31 December 2015 has been extracted from the statutory accounts which have been delivered to the Registrar of Companies. The Group’s Independent Auditor’s report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial information for the half years ended 30 June 2016 and 30 June 2015 is unaudited and the twelve months to 31 December 2015 is audited.
2. Earnings per share
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. No share options or warrants outstanding at period end were dilutive and all such potential ordinary shares are therefore excluded from the weighted average number of ordinary shares for the purposes of calculating diluted earnings per share.
There were no dividends provided or paid during the six months.
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