TIDMBYOT
RNS Number : 0901J
Byotrol PLC
19 August 2021
19 August 2021
Byotrol plc
FINAL RESULTS FOR THE YEARED 31 MARCH 2021
TRADING UPDATE
Byotrol plc (AIM: BYOT), the specialist infection prevention and
control company is pleased to present its audited results for the
year ended 31 March 2021 and its outlook for the current financial
year and beyond.
Financial highlights
Our results for the year to 31 March 2021 were significantly
above expectations at the beginning of the year, across all key
financial measures. Headlines are:
-- Revenue GBP11.2m (FY20: GBP6.0m)
-- IP sales included in revenue GBP1.07m (FY20: GBP0.78m)
-- Gross profit at GBP4.86m (FY20: GBP2.89m)
-- Adjusted EBITDA * at GBP1.78m (FY20: GBP0.47m)
-- Profit before tax of GBP1.0m (FY20: GBP0.2m)
-- Net cash GBP1.6m (FY20: GBP1.4m). Additional expected future
cash from minimum guaranteed IP payments over GBP1.6m versus
GBP1.3m at year end FY20.
-- Byotrol is now debt free with borrowings of GBP0.3m repaid in the year
(FY20 figures restated for the effect of discontinued
operations)
Operational highlights
-- Strong performance during the covid-19 pandemic, increasing
sales and profits despite border closures, supply chain
interruptions, raw material shortages, input price rises and
increased safety precautions. Adjusted EBITDA increased almost
fourfold
-- Primary focus on Professional markets - emergency and medical
services and long-standing customers first, followed by new
Professional and Consumer markets
-- New licenses and IP agreements signed with Integrated
Resources Inc. (US surface care), Turtlewax Europe Limited (surface
care for the non-US automotive market), SC Johnson Professional
Limited (alcohol free sanitisers in healthcare in UK and Ireland)
and Byoworks Proprietary SA (agent for Byotrol in Southern
Africa)
-- Completion of US licence agreement and ongoing global
relationship with Solvay SA on Actizone allowed us to close our US
office and manage the licensing relationships from the UK, almost
eliminating our costs for no reduction in market opportunity.
-- New class2 virology laboratory, with senior, highly
experienced technical staff, now established at Byotrol
headquarters in Chester. New market-leading, long-lasting
anti-viral claims validated across several proprietary
formulations.
-- Academic studies into the anti-viral properties of certain
forms of seaweed continue encouragingly with our partners at
University of Liverpool, supported by a UK Innovate grant award of
GBP350k.
Outlook and current trading
The sanitiser market has experienced a period of unprecedented
activity as a result of COVID-19, resulting in record financial
performance for Byotrol. We believe the increase in anti-microbial
awareness and mass-uptake of related products will continue long
into the future.
Management remains extremely positive on the medium to long-term
outlook where the market is forecast to grow globally at 8 to 10%
per year from pre-COVID levels and industry earnings growth is
likely to exceed this as weaker competitors with inferior
chemistries, and those that lack regulatory approval, fall
away.
In the short-term, revenue from product sales in the new
financial year to date has been hindered by closed venues from
extended lockdowns, new competition, and an excess of inventory.
However, the market does now appear to be stabilising and
management now expect product sales for FY22 at a level some 10 to
20% below those for FY21: an exceptional year which was itself over
90% ahead of FY20.
Revenue from IP-related transactions is looking positive. The
Group is:
-- now in the position to expect commencement of a number of
streams of royalty income from prior years' IP licensing agreements
over and above the minimum guaranteed amounts agreed. Whilst it is
too early to predict the quantum and timing of receipt of these, it
marks the start of an extremely high-margin and high-profile
revenue stream for Byotrol which should further increase the
profitability of the Group; and
-- actively continuing to monetise its significant and growing
Intellectual Property portfolio with further IP agreements -
enquiries and active discussions are encouraging and currently
numerous across our whole portfolio in the UK and overseas
We therefore again expect a significant contribution to our
bottom line in FY22 from IP-related income and as a result, the
Board expects adjusted EBITDA for FY22 to be in-line with that of
FY21.
Commenting on the results, John Langlands, Chairman of Byotrol
plc, said:
"This past year was an extraordinary one by any standards, in
our industry and in society in general. Byotrol's financial results
to March 2021 were our best ever, boosted by demand for our
products due to COVID-19, but we believe will continue to benefit
from new post-pandemic approaches to infection prevention in
institutional, business and consumer environments.
We continue to see many opportunities on our markets and
continually review how best to maximise returns from them. Your
Board remains optimistic for Byotrol's prospects. "
Enquiries:
Byotrol plc
David Traynor - Chief Executive Officer
Nic Hellyer - Chief Financial Officer 01925 742 000
finnCap
Geoff Nash/Kate Bannatyne - Corporate Finance 020 7220 0500
Richard Chambers - ECM
Flagstaff Strategic and Investor Communications
Tim Thompson/Andrea Seymour/Fergus Mellon 020 7129 1474
byotrol@flagstaffcomms.com
This announcement is released by Byotrol plc and, prior to
publication, the information contained herein was deemed to
constitute inside information under the Market Abuse Regulations
(EU) No. 596/2014. Such information is disclosed in accordance with
the Company's obligations under Article 17 of MAR. The person who
arranged for the release of this announcement on behalf of Byotrol
plc was Nic Hellyer, Chief Financial Officer.
*Adjusted EBITDA is defined as Earnings Before Interest, Tax,
Depreciation and Amortisation, adjusted for the effect of loss on
disposal of assets, revenue recognised as interest under IFRS 15
and expensed share-based payments.
Notes to Editors:
Byotrol plc (BYOT.L), quoted on AIM, is a specialist infection
prevention and control company, operating globally in the
Healthcare, Industrial, Food and Consumer sectors, providing low
toxicity products with a broad-based and targeted efficacy across
all microbial classes; bacteria, viruses (including coronavirus),
fungi, moulds, mycobacteria and algae.
Byotrol's products can be used stand-alone or as ingredients
within existing products, where they can significantly improve
their performance, especially in personal hygiene, domestic and
industrial disinfection, odour control, food production and food
management.
Byotrol develops and commercialises technologies that create
easier, safer and cleaner lives for everyone.
For more information, please go to byotrol.co.uk
Chairman's statement
This past year was an extraordinary one by any standards, in our
industry and in society in general. Byotrol's financial results
have been boosted by demand for our products due to COVID-19 and we
believe we will continue to benefit from new post-pandemic
approaches to infection prevention in institutional, business and
consumer environments. We also continue to believe that our focus
on regulatory-approved and high performance, infection prevention
technologies will deliver excellent returns for our shareholders,
whilst benefitting all stakeholders including broader society and
the environment.
Results and Financing
The Group has produced its best ever results with revenue for
the year increasing to GBP11.2m from GBP6.0m the previous year and
generating an adjusted EBITDA of just under GBP1.8m compared to
just under 0.5m in 2020. Product sales increased to GBP10.1m from
GBP5.2m and associated gross profit to GBP3.8m from GBP2.1m. We
recognised revenue and gross profit from IP licensing agreements of
GBP1.1m, compared to GBP0.8m in the previous year. The resulting
profit before tax was GBP1.0m compared to GBP0.2m in the previous
year.
At the year end we had no debt and cash resources of GBP1.6m.
During the year we invested significantly in stock, our people and
our technologies and remain well-resourced to fund organic
growth.
Strategy
As an infection prevention company, we participate in an
industry that serves a fundamental, global and increasingly
challenging set of needs, framed by an increasingly complex and
evolving regulatory environment. We have positioned Byotrol to
satisfy those complex needs through a variety of high performance
biocidal technologies, grounded in excellent science, supported by
strong data and structured to receive regulatory approval in the
relevant markets.
We compete across a range of industry segments in both B2C and
B2B channels and with a variety of commercial models including
product sale, licensing, alliances and IP trading. One challenge is
that we are relatively thinly spread across several business
segments and occasionally struggle in competition with segment
specialists offering inferior products to ours but with a broader
portfolio or broader reach or service offering. This is why
licensing and IP trading is so important to us at this stage of our
development, which in turn finances and supports our ability to
focus on fewer markets.
Most analysts expect market demand to increase post Covid, from
a trend line of 5% per annum in global sales, to close to 10%. This
is rapid growth for an already large and fragmented market, but
when one additionally factors in that the number of suppliers is
being reduced by regulatory pressures, it should not be a surprise
that even the multinational hygiene and cleaning companies are
projecting long term double digit earnings growth and smaller more
focused companies substantially more. We expect to be one of the
beneficiaries of such trends and the year under review in this
report has given us a real foundation to make that a reality and,
very importantly, do our bit to make the world a better and safer
place.
Trading during coronavirus
Shareholders will be aware that we do not have our own
manufacturing facilities and hence the team has had to work hard
with suppliers and customers this year to deliver as much of our
product as domestic and international supply chains would allow.
This of course presented numerous challenges, not least from
variable supply caused by national lockdowns and closed borders,
interrupting the flow of packaging materials and materials, often
putting us in competition with deep-pocketed and politically
influential multi-nationals. We have also had to contend with
internal and external lockdowns, with protecting our staff, their
families and other stakeholders from illness or with supporting
them during any illness, though thankfully in very few cases.
Trading varied during the year, dependent on supply chains but
also on the degree of lockdown in our markets. Very broadly, the
first half was very good in sales terms as customers scrambled for
product; as supply chains caught up with demand, Q3 started to
settle back a little (but at levels higher than pre-Covid) and Q4
was relatively slow as our main market, the UK, went into another
lockdown. We are a business that sells consumables mostly into
institutional and business environments and, when they are closed
down, consumption is low. Further details on this are given in the
Chief Executive's report.
US operations
We reported last year that we had concluded that we did not have
the resources to go it alone in the US and as a result in May 2020
we licensed out our proprietary, EPA-approved surface sanitiser
Byotrol24 to Integrated Resources Inc. ("IRI"). This agreement then
led to a sub licence in the US in B2B and B2C with Turtlewax Inc.
and a new relationship for Byotrol in Europe with Turtlewax Europe,
which then agreed a direct licence with us for our European surface
care formulations. We understand IRI has been doing well during the
pandemic and we expect the commencement of royalty income from them
in the current financial year.
In parallel with IRI, we have a financial interest in the US
activities of Solvay SA, which has now launched Actizone, a long
lasting anti-microbial surface technology that we helped develop,
globally. We understand Solvay is progressing the necessary US
registrations, but while we do not have visibility on exact timings
and on likely customers we remain highly confident that they will
be successful.
With those two agreements in place directly with Byotrol plc -
and excellent de facto representation in the US - we have closed
our US office and reduced the remaining costs to negligible levels
(principally the costs of maintaining patents) and the results of
the US operations are accordingly reported as a discontinued
business in these accounts.
Board and employees
In my report last year, I announced that Dr Trevor Francis would
be stepping down as Chief Technology Officer and take up a seat as
a non-executive director. We then deferred that change as we needed
our most experienced people in the business during the pandemic,
and only now do we feel able to complete the process. So we thank
Trevor for his very valuable extra input this year and again wish
him well in his delayed retirement, whilst still looking forward to
his input in Board meetings.
As we reported last year Dr Till Medinger stepped down at the
AGM and as a result I assumed the Chairmanship of the Audit
Committee and Sean Gogarty was appointed Chairman of the
Remuneration Committee.
The Byotrol team has been operating under substantial pressure
throughout the financial year and has produced some good results. I
want to put on record my thanks to all employees, currently
numbering 39, for their efforts and commitment to the Company.
AGM
The Company's AGM is expected to be held on a date to be
confirmed in September. We are hoping to hold this meeting in
public in London, as pre-Covid, but that will clearly be dependent
on legislation at the time. I have found our AGMs to be well
attended in the past and I am pleased that the Q&A elements to
date have been lively, and I hope informative. We value the
participation of smaller and retail shareholders in these meetings
and I encourage your attendance. The executive team will also be
conducting retail investor presentations via familiar online
platforms post results.
Further announcements and communication regarding the AGM and
these other matters will be made in due course.
Prospects
Our market background has changed for good and there is a new
awareness of the damage viruses can do if unconstrained and it is
clear that governments are not able to protect everybody all the
time. Biocides - and other infection prevention technologies - now
sit at the centre of protecting lives and human interaction,
delivered by goverments but also used proactively by individuals,
employers and institutions. Companies that deliver technologies
that are efficacious, science-led, validated by regulators and
cognisant of risk/reward, including for the environment, should be
very big winners . This is the positioning that Byotrol has been
adopting for the last several years and which the team is very
motivated to continue to exploit. Our strategy has therefore
remained constant from pre-Covid through the worst of the pandemic
and will remain in place post Covid, although there is an
increasing need for us to focus more on fewer markets.
The slight imponderable this new financial year is the degree to
which continued lockdowns are going to limit product sales. The
first quarter has for instance been relatively slow, exacerbated by
Brexit and by high levels of stock in the industry (and some heavy
discounting as a result), but demand from potential licencees has
correspondingly increased in preparation for the post Covid,
virus-aware world. This means our sales mix may change over the
year from initial expectations, but our commercial model has been
designed to be flexible to deal and to generate profits in whatever
the market conditions, within reason.
We continue to see many opportunities on our markets and
continually review how best to maximise returns from them. Your
Board remains optimistic for Byotrol's prospects and future
growth.
John Langlands
Chairman
Chief Executive Officer's statement
This was another good year for Byotrol in business terms,
exceeding the targets that we had set at the beginning of the year
and improving on all key performance indicators. It was also an
unusual year for obvious reasons, with performance and focus being
heavily skewed by the Covid pandemic. Revenue for the year was
GBP11.2m (from GBP6.0m the previous year), adjusted EBITDA just
under GBP1.8m (FY20: GBP0.5m) and reported EPS (from continuing
operations) 0.22p (FY20: 0.13p). At year end we had no debt and
cash resources of GBP1.6m, plus already contracted minimum
guaranteed future royalty payments from licences amount to around
GBP1.6m. The Directors are pleased with these results and the
continually improving health of the business. The long-term outlook
for our sector remains outstanding and our strategic positioning
within it appropriate and we believe scalable.
Strategy and pragmatics
Byotrol's positioning has worked well during the pandemic and we
believe it will work well post pandemic. We focus on technologies
and chemical formats that satisfy infection prevention needs and
that have a degree of innovation and uniqueness that should
generate sustainable and high returns. In recent times we have
concentrated on biocidal chemicals in institutional and consumer
markets, but the strategy also extends into other technical areas
that we may add in future. Our markets are developing very quickly,
and we need to be flexible as we grow.
The reality of market demand in the year under review was that
we needed to focus on making and distributing as much of our
product as we could, as fast as our supply chain could make them.
Virtually all management time this year was therefore on servicing
professional customers' heightened demand, and in particular doing
what we could for the community by servicing first of all emergency
and medical services alongside long-standing customers and
secondarily on other new segments.
This meant, amongst other things, dealing with variable supplies
of raw material ingredients, with national border closures, with
extreme shortages in packaging materials and with logistical
systems under extreme stress. The reality of having a completely
outsourced supply chain is that the team therefore had to work with
suppliers themselves under pressure and facing multiple demands on
their time and resources. This meant we sometimes found ourselves
in direct competition with multi-nationals many times our size and
with deeper pockets - and political leverage - to finance sizeable
forward orders, potentially squeezing us out.
All things considered, our team did very well to increase sales
so effectively over this time and we are of course grateful for the
excellent service received from our long-term suppliers,
particularly in the UK. Our high level of operational gearing means
that the margin from extra sales fed through to our bottom line,
with no extra risk to the business through investing in in-house
capacity. We almost doubled product sales in the year, whilst total
costs rose by less than a quarter, contributing to EBITDA
quadrupling over the year; and we do not have high fixed costs to
manage as market conditions return to some degree of normality.
Markets
Professional
Full year revenues increased to GBP9.4m from GBP5.2m in the
prior year, and gross profit to GBP4.1m from GBP2.5m. Within this,
IP sales (including royalties from licensing) increased to GBP1.1m
from GBP0.8m, split GBP0.23m in actual cash received and the
balance recognised in revenue as discounted future guaranteed
payments.
The gross margin from product sales in this segment in the year
was 37% versus 38% in the prior year, reflecting extra cost of
goods as supply chains struggled with demand and competition for
raw materials.
Product mix in the year remained broadly consistent with
previous years, with 85%% of sales in surface care and 15%% in hand
hygiene. Customer mix varied through the year as lockdowns had
differential impacts on channels; for example sales in H1 into
veterinary groups and facilities management were slower than into
human health environments as there were more temporary closures in
the former.
Over the year, 25% of sales in Professional were into human
health , of which the majority was under Medical Device Rules in
the UK and EU.
We continued our strategy of licensing out technologies to third
parties in markets that we cannot access ourselves directly for
example for geographic reasons, or for cost of entry and service
reasons. In the year under review we announced four such licence
agreements, predominantly in the Professional segment but also
potentially in Consumer in future, with:
-- Integrated Resources Inc ("IRI") in the US. This agreement,
signed in May 2020, gave IRI - a group of specialist investors and
manufacturing experts - exclusive rights over our EPA approved long
lasting surface sanitiser Byotrol24. They are already making good
progress on sales and on sub licensing, with a notable sub licensee
Turtlewax Inc, already launched in the US in B2B and limited
B2C
-- Turtlewax Europe Limited, a subsidiary of Turtlewax,
introduced to Byotrol by IRI, which has licensed our long-lasting
surface sanitisers in Europe for the automotive market. These are
already available in Halfords in the UK, and further launches will
take place in Europe once the various national registrations are
completed
-- SC Johnson Professional Limited in the UK, for alcohol-free
hand sanitisers, sold under their brand into UK and Ireland
hospitals. This agreement was signed in April 2020 and represented
a strengthening in our existing relationship, moving from an
existing relatively short-dated supply and manufacturing agreement
to a longer-term technology licence with guaranteed minimum
revenues
-- Byoworks (PTY) Ltd in South Africa, a long-standing agent of
the Group and now under new professional management. Byoworks has
licensed all Byotrol technologies for distribution in sub-Saharan
Africa, a geography that we could not reasonably and efficiently
access ourselves directly
All of these agreements include minimum guaranteed royalty
payments which are reflected in our balance sheet as long-term
receivables/contract assets. We fully expect the actual royalties
to exceed the minimums over time.
Regarding the other licence agreements in Professional markets
signed in prior years (including with Tristel plc in non sporicidal
surface disinfection in UK healthcare and dvanced Hygienics Inc. in
US hand sanitisers), all are currently performing to our
expectations We are particularly excited about the potential
returns from Solvay SA, which has now launched globally Actizone,
the long-lasting antimicrobial surface sanitiser that Byotrol
co-developed and that will pay Byotrol an ongoing commission linked
to Solvay's sales. Solvay's CEO has been encouragingly describing
this as a "potential blockbuster" technology on recent investor
calls and we continue to expect to report the first sales-based
income from this relationship in FY22 in both Professional and
Consumer markets worldwide.
Consumer
Full year revenues increased to GBP1.8m from GBP0.8m in the
prior year, and gross profit to GBP0.7m from GBP0.4m, all from
product sales. We did not agree any consumer-oriented IP
transactions in this year, although we expect that licences with
Solvay, Turtlewax and Byoworks will lead to royalty income from
consumer sales in due course.
The gross margin from product sales in this segment in the year
was 39% versus 51% in the prior year, reflecting increased costs
from finding suppliers outside China for our petcare business
whilst China was effectively closed for international business.
Sales across existing customers all increased in this segment,
especially into Japan via our long-standing agents in pet and
healthcare. One particular success was working with Boots to
increase our alcohol-free, anti-viral hand sanitising foam into all
2,500 Boots UK stores. We continue to look at methods of building
on our retail and direct-to-consumer presence and have been putting
more resource into this area since year end.
In consumer surface care, matters have been helped but also
complicated a little for us by launches from two global FMCGs into
our core long-lasting anti-microbial claims space - Microban
(backed by P&G) and Lifebuoy (Unilever). The good news for us
is that significant advertising and promotion spend is now going
into the long-lasting category in global consumer markets and we
believe our product performs better than those new arrivals. The
challenge we have now is to be noticed and heard when we have much
less marketing fire power to employ. We do have some initiatives
under way that we hope will take advantage of the opportunity.
As reported in our Interim statement, resource invested in
Consumer was relatively light his year compared to Professional,
which in the period was taking up the majority of our management
and supply chain capacity.
Research and Development
Much of our R&D resource this year was invested into:
-- solidifying and validating our products' efficacy against
coronavirus, both for instant and longer-lasting elimination
claims
-- Testing and approving new formulations and packaging options
for our products when supply chain limitations necessitated
change
-- ensuring relevant regulatory approval for our products, now as a non-EU country
We also made excellent progress in three technical areas,
namely:
-- in our research programme into seaweed as a potent
anti-viral, where we secured a Innovate UK grant of GBP350k over 16
months to fund investigations into the mode of action behind the
observed potency, which in turn should lead to a clear direction on
what route to commercialisation we should adopt. This project
continues very encouragingly, with interest in the project now
emerging from potential partners ranging across surface and skin
sanitising, nutraceuticals and pharmaceuticals
-- we opened a fully-staffed class 2 virology laboratory in our
scientific facilities at Thornton Science Park in Cheshire. This is
a big step for a company of our size but we see it as a key element
of our strategy and excellent technical leadership and support for
product sale and for licensing
-- in February 2021 we announced that we had developed and
validated a test protocol to support long-lasting efficacy of
anti-microbials against viruses. We believe we are the first
company to support such claims and we hope that it well help to
challenge an increasing number of competitors making dubious
long-lasting claims, including fudging the difference between
bacteria and viruses. Regulators will undoubtedly catch up with
offenders in due course, but it may take time without technical
support from companies such as Byotrol
Total cash spend into technical activities this year was
GBP0.51m compared to GBP0.43k in the previous year, representing
around 10% of total costs net of around GBP0.19m of these cash
costs which were capitalised; no cash R&D tax credit was
accrued this year as the relevant subsidiary was profitable for tax
purposes.
Outlook
Your Board remains very excited about the opportunities in our
industry, sees multiple routes to profitable growth and believes in
the strategy we have now been adopting for many years.
In the short term, product sales are likely to be softer than
during the pandemic as our industry works through a degree of
overstocking and increased capacity, caused by the unforeseen and
extended UK (and overseas) lockdown into the summer 2021. Byotrol
is primarily focussed on selling consumables into business and
institutional environments, which is not a buoyant market when
those environments are closed down. However, demand for our IP
remains strong, either as licences or alliances/partnerships and we
expect such agreements to underpin and promote profitability for
the current financial year and beyond.
It is clear that our targeted markets and customers are becoming
more and more knowledgeable on the technical aspects of products
such as ours and are now more insistent on proper data support and
regulatory approval, all of which we have proved to an excepionally
high standard. We remain convinced that Byotrol will be long-term
winners in this new environment, to the great benefit of
shareholders, but also to the benefit of our broader stakeholders
and to the environment. We look forward with both enthusiasm and
confidence in delivering further progress in this growing
market.
David Traynor
Chief Executive Officer
Financial review
Our results for the year show the results of the Group's
positioning in previous years, enabling us successfully to satisfy
extraordinary demand during the Coronavirus pandemic whilst
continuing to monetise the Group's proprietary technologies by way
of IP licensing transactions with a number of third parties which
will provide cash income for several years to come.
During the year, the Board took the view that the Group's US
trading operations were unlikely to be viable in the medium term
and accordingly they were closed down following the licensing of
the technology in US and related territories to a third party; the
FY21 figures below (unless specified otherwise) relate solely to
the continuing operations of the Group, and the FY20 figures have
been restated to exclude the US operations.
Income Statement
Revenue
Professional
Revenues for product sales increased by 89% to GBP8.33m from
GBP4.41 m, with gross profit increasing from GBP1.69m to GBP3.07m;
not unexpectedly sales of surface cleaners were particularly
strong. In addition, approximately GBP1.1m of income arose from
royalty and licensing activities (2020: GBP0.78m).
Consumer
Revenues for product sales increased by 117% to GBP1.80m from
GBP0.83m, with gross profit increasing from GBP0.42m to
GBP0.71m.
Finance income
In addition to the above, notional finance income arose from the
imputed cost of funds on long-term contracts (GBP53,000 in 2021;
2020: GBP33,000). This has been added back to adjusted EBITDA in
the calculation set out in Note 7.
Cost of sales
Cost of sales of GBP6.36m (2020: GBP3.13m) represents the direct
manufacturing costs of products and the cost of logistics
(warehousing, transport etc). Given the mix of Byotrol's
activities, gross margin across the sales mix is not a particularly
meaningful measure of performance and is better considered on a
segmental by product basis. In the Professional segment (excluding
royalties, IP etc.), the gross margin fell marginally to around 37%
(2020: 38%), largely due to difficulties in the supply chain and
the effect of certain suppliers increasing prices (and in some
cases surcharging) during the peak of the coronavirus pandemic. For
the Consumer business (again excluding royalties, IP etc.) the
gross margin fell to 39% (2020: 51%): in this segment the Group's
activities are smaller and more concentrated and hence supply chain
pressures were harder to pass on to underlying customers
(additionally there is a broader spread of customers and hence
margins can vary considerably depending on the end customer).
Overhead expenses and research and development
Overhead costs were in line with a planned modest expansion of
resources with an increase from GBP2.4m to GBP3.2m. Of this, some
GBP1.86m (2020: GBP1.59m) related to staff costs. Cash research and
development costs increased slightly to GBP0.51m (2020: GBP0.41m).
The Group continues to invest in the research and development of
further anti-microbial products and has 9 employees in its research
and development department.
Furthermore, the Group continues to collaborate with respected
research institutions (typically universities) to supplement the
internal resource. In particular, during the year the Group
successfully applied for a GBP350,000 UK Innovate grant in
conjunction with Liverpool University to investigate the mode of
action of seaweed extracts in achieving the excellent anti-viral
performance we have discovered in our own lab testing to date.
During the year we completed construction and setup of a
dedicated virology lab in our head office in Thornton Science Park,
Cheshire, staffed by two specialist virologists. This, together
with the other investment referred to above, is essential for the
maintenance of the Group's market position and for future
growth.
Finance income and expense
Finance income arises both from interest receivable on
interest-bearing deposits as well as notional interest arising on
contracts with a "Significant Financing Component" as defined by
IFRS 15. The increase in the latter from GBP33,000 to GBP53,000
relating to a number of contracts signed in the year as well as in
previous years.
Total finance expense of GBP44,000 fell from GBP0.13m in FY20;
however, the majority of the FY20 figure related to the non-cash
cost of amounts arising from the discounting of liabilities related
to contingent consideration relating to the acquisition of Medimark
to their expected value at the relevant reporting date. The balance
comprises cash interest on the Group's factoring facility, bank
charges and an element of lease expenses now recognised as interest
under IFRS 16. The factoring facility was terminated during the
year and hence no further interest or administrative charges arise
on this; however, the Group continues to incur modest finance
charges relating to (for example) online routes to market such as
eBay and Amazon.
Profitability
Adjusted EBITDA increased by 278% in the year to GBP1.78m (2020:
GBP0.47m). The Group's pre-tax profit from continuing operations
was GBP1.04m (2020: GBP0.17m). After a tax charge of GBP58,000
(2020: GBP0.38m credit) this resulted in statutory EPS of 0.22p
(2020: 0.13p) and 0.29p on an adjusted basis (2020: 0.11p).
Taxation
Taxable profits arising in the year to 31 March 2021 were wholly
off-settable against tax losses brought forward and accordingly no
current taxation was payable. Significant tax losses remain
available to the Group; however, given the uncertainty of timing of
realisation of these losses, the deferred tax asset relating to
such assets was partly derecognised with a resulting deferred tax
charge of GBP0.13m (2020: GBP0.43m)
A non-cash tax credit also arises from the amortisation of a
deferred tax liability relating to the intangible assets acquired
as a result of the acquisition of Medimark.
Statement of Financial Position
Goodwill and other intangible assets
Goodwill, customer relationships and brands
The intangible assets acquired as part of the acquisition of the
Medimark business in 2018 comprised principally customer
relationships, various brands, as well as other IP relating to the
capitalised value of efficacy testing and other relevant licensing
activities. Net of accumulated amortisation for the year, the net
book value of the customer relationships and brands acquired was
approximately GBP1.78m at the year end (2020: GBP2.04m). Goodwill
arising on acquisition was GBP0.50m, which remains unchanged.
Development costs
Development costs represent the capitalised value of work
undertaken (either internally or externally by appropriate
consultants) to develop and protect patents, know-how and other
similar assets when they pass the criteria for capitalisation under
the Group accounting policy. The amortised balance at 31 March 2021
was GBP1.12m (2020: GBP0.94m) after capitalising expenditure of
GBP0.33m and amortisation of GBP0.14m. Some GBP90,000 of this
expenditure related to the Group's activities in developing the
biocidal properties of seaweed and the remainder related to various
programmes in support of existing technologies (or extensions
thereto) used by the Group either in response to specific customer
requirements or regulatory developments.
Patents and licences
The Group continues to protect its IP by registering patents
when relevant. During the year, certain patents in geographies
where it was felt the likely benefits of retaining the patents were
outweighed by the cost of maintaining them were allowed to expire.
The book loss arising from this abandonment was GBP0.11m. Following
this and expenditure of GBP66,000 and amortisation of GBP43,000,
the book value of such patents and licences was GBP0.13m (2020:
GBP0.22m).
Property, plant and equipment
Expenditure of GBP55,000 on property, plant and equipment
relates principally to GBP33,000 (2020: GBP21,000) spent on
laboratory equipment to support the needs of the business, notably
a new virology lab. Depreciation in the year amounted to GBP26,000
(excluding amounts relating to Right-to-Use assets now recognised
under IFRS 16) (2020: GBP28,000); as a result the aggregate net
book value of property, plant and equipment increased to GBP84,000
(2020: GBP54,000).
Inventories
Inventories comprise raw materials, work in progress and
finished goods held at the Group's third-party contract
manufacturers for sale to customers. Total inventory held at the
year-end rose significantly from GBP0.29m in 2020 to GBP1.10m in
2021 - the FY20 year-end figure reflected a low point as a result
of the sales upturn in the last month of FY20 and the closing FY21
figure represents a high point as additional stock was taken on to
satisfy demand. Given the rapid turnover of inventory, write offs
in the year were minimal and stock levels now have returned to a
normalised figure of around GBP0.8m.
Trade receivables
Trade receivables arising from product sales declined to
GBP0.88m (2020: GBP1.22m); however, the FY20 figure reflects the
sharp upturn in sales experienced in the last month of that year in
the then early stages of the coronavirus pandemic, whilst the FY21
figure reflects a more normal level of sales.
Trade receivables also arise for the Group where the
consideration for the sale or licence of IP (on a "right to use"
basis) is structured as a series of fixed sums payable over several
years. Usually there are sales-based royalties over and above these
fixed sums; however, these are recognised in the period that they
arise - the fixed sums are recognised on the transfer of the IP at
their present value (as discounted at an imputed cost of funds). Of
the total trade receivables relating to IP transactions, GBP0.40m
was due in one year (of which GBP0.20m was the result of a deferred
income payment due on 31 March but received on 6(th) April) (2020:
GBP0.55m) and GBP1.25m was due after one year (GBP0.71m). Of this
balance, GBP0.75m was due to be collected within 2-5 years and
GBP0.50m after 5 years (2020: GBP0.32m and GBP0.39m
respectively).
The Group has stringent credit control policies and will not
contract with customers who present an undue credit risk. In
addition, the Group may request pro forma (i.e. advance) payments
from new customers or existing customers who wish to increase the
volume of business they do with the Group above a pre-agreed credit
limit. As a result, the impairment charge for the year was minimal
at GBP8,000 (including the expected credit loss provision required
by IFRS 9 of GBP17,000) (2020: GBP35,000).
Trade and other payables
Trade payables fell in the year from GBP0.83m to GBP0.74m as did
accruals and deferred income from GBP0.37m to GBP0.18m, notably as
fewer customers were required to pay upfront for increased (or new)
order volumes.
Statement of Cash Flows
Cash flow and financing
Operating cash inflow from continuing activities for the year
was GBP0.78m (2020: GBP0.34m outflow); this includes an outflow of
c. GBP0.8m relating to purchase of stock. Expenditure capitalised
as development of intangible assets was slightly more than that in
the previous year (2021: GBP0.39m; 2020 GBP0.30m), as was
expenditure on tangible assets (2021: GBP55,000; 2020 GBP24,000).
The Group repaid in full its invoice discounting facility in the
year resulting in a net cash outflow of GBP0.30m.
Capital reduction
The capital reduction approved by the Group's shareholders in
November 2020, together with significantly increased profitability
in the past two years, have increased the Group's consolidated
retained earnings by over GBP30 million.
Summary
The Group finished the year in robust financial health and free
of debt. Our historic investment in intellectual property, enhanced
by the trading relationships acquired as part of the Medimark
acquisition positioned us well for the considerable upturn in
demand during the year and continues to form a sound base for both
product sales as well as further monetisation of the IP portfolio
by way of licensing deals.
Nic Hellyer
Chief Financial Officer
Group Statement of Comprehensive Income
For the year ended 31 March 2021
2021 2020
Note GBP'000 GBP'000
(audited) (audited,
restated)
Revenue 5 11,214 6,016
Cost of sales (6,359) (3,126)
_______ _______
Gross profit 4,855 2,890
6,
Adjusted administrative expenses 8 (3,486) (2,743)
_______ _______
Adjusted operating profit/(loss) 1,369 147
Exceptional items 7 - 382
Amortisation of acquisition-related intangibles (243) (243)
Share-based payments 11 (111) (47)
_______ _______
Operating profit 1,015 239
Finance income 12 66 59
Finance expense 13 (44) (128)
_______ _______
Profit/(loss) before taxation 1,037 170
Income tax (charge)/ credit 14 (58) 377
_______ _______
Profit for the year from continuing operations 979 547
Discontinued operations
(Loss) for the year from discontinued
operations 15 (98) (213)
_______ _______
Profit for the year 881 334
Other comprehensive income/(expense):
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of
foreign operations (98) 7
_______ _______
Other comprehensive income, net of tax (98) 7
Total comprehensive income for the year 783 341
Total comprehensive income for the year
arises from: 881 559
- continuing operations (98) (218)
- discontinued operations _______ _______
783 341
Earnings per share - from continuing operations
Attributable to the owners of Byotrol
plc (basic) 16 0.22p 0.13p
Attributable to the owners of Byotrol
plc (diluted) 16 0.22p 0.13p
Earnings per share - from discontinued
operations
Attributable to the owners of Byotrol
plc (basic) 16 (0.02)p (0.05)p
Attributable to the owners of Byotrol
plc p (diluted) 16 (0.02)p (0.05)p
Earnings per share - from profit for the
year
Attributable to the owners of Byotrol
plc (basic) 16 0.20p 0.08p
Attributable to the owners of Byotrol
plc (diluted) 16 0.20p 0.08p
Group Statement of Financial Position
For the year ended 31 March 2021
2021 2020
Note GBP'000 GBP'000
(audited) (audited)
Assets
Non-current assets
Intangible assets 19 3,552 3,691
Tangible assets 20 84 54
Right-of-use assets 21 30 69
Deferred tax assets 22 315 431
Trade receivables 24 1,249 714
_______ _______
5,230 4,959
Current assets
Inventories 23 1,099 285
Trade and other receivables 24 1,614 2,185
Cash and cash equivalents 1,598 1,712
_______ _______
4,311 4,182
TOTAL ASSETS 9,541 9,141
Liabilities
Non-current liabilities
Lease liabilities 25 4 31
Deferred tax liabilities 22 348 394
_______ _______
352 425
Current liabilities
Trade and other payables 26 1,023 1,319
Short term borrowings 27 - 296
Lease liabilities 25 26 39
_______ _______
1,049 1,654
TOTAL LIABILITIES 1,401 2,079
NET ASSETS 8,140 7,062
Issued share capital and reserves
Share capital 28 1,116 1,101
Share premium 28 190 28,423
Other reserves 28 728 1,891
Retained earnings 6,106 (24,353)
_______ _______
TOTAL EQUITY 8,140 7,062
Group Statement of Cash Flows
For the year ended 31 March 2021
2021 2020
GBP'000 GBP'000
(audited) (audited,
restated)
Cash flows from operating activities
Profit for the year 881 334
Adjustments for:
Finance income (66) (59)
Finance costs 44 128
Depreciation of tangible non-current assets 26 28
Amortisation and impairment of intangible
non-current assets 426 467
Loss on disposal of assets 107 -
Income tax charge/(credit) recognised
in profit or loss 58 (377)
Fair value adjustment on contingent consideration - (363)
Share-based payments 111 47
Costs relating to Capital Reduction recognised (36) -
in equity
_______ _______
Operating cash flows before movements
in working capital from continuing operations 1,551 205
(Increase)/decrease in trade and other
receivables 37 (995)
(Increase)/decrease in inventories (814) 131
Increase/(decrease) in trade and other
payables (34) 321
Cash in/(out)flow from discontinued operations (211) (119)
_______ _______
Cash generated from/(used in) operating
activities 529 (457)
Income tax refund received 25 -
_______ _______
Net cash generated from/(used in) operating
activities 554 (457)
Cash flows from investing activities
Development of intangible assets (394) (295)
Acquisition of property, plant and equipment (55) (24)
Cash outflow on acquisition of businesses
net of cash acquired - (290)
_______ _______
Net cash (used) in investing activities (449) (609)
Cash flows from financing activities
Proceeds from issue of ordinary shares, 205 -
net of issue costs
Movement in invoice discounting facility (296) 51
Repayments of principal on lease liabilities (39) (39)
Finance income 53 6
Finance costs (42) (42)
Interest expense on lease liabilities (2) (3)
_______ _______
Net cash (used in) financing activities (121) (27)
Net (decrease) in cash and cash equivalents (16) (1,093)
Foreign exchange differences (98) 8
Cash and equivalent at beginning of period 1,712 2,797
_______ _______
Cash and cash equivalents at end of period 1,598 1,712
Group Statement of Changes in Equity
For the year ended 31 March 2021
Share capital Share premium Merger Retained Total
reserve earnings
Exchange
reserve
GBP'000 GBP'000 GBP000's GBP'000 GBP'000 GBP'000
Balance at 1 April 2019 1,077 28,282 819 1,065 (24,835) 6,408
Profit after taxation
for the period - - - 334 334
Other comprehensive
income:
Exchange differences - - 7 - - 7
Transactions with owners:
Share-based payments - - - 47 47
Deferred tax on share-based
payment transactions - - - 101 101
Shares issued by Byotrol
Plc as part of a business
combination 24 141 - - 165
_____ _____ _____ _____ _____ _____
Balance at 31 March
2020 1,101 28,423 826 1,065 (24,353) 7,062
Profit after taxation
for the period - - - - 881 881
Other comprehensive
income:
Exchange differences - - (98) - - (98)
Transactions with owners:
Share-based payments - - - - 111 111
Deferred tax on share-based
payment transactions - - - - 15 15
Shares issued during
the year for cash 15 190 - - 205
Transactions with owners
- capital reduction:
Capitalisation of Merger
reserve to B Ordinary
Shares 1,065 (1,065) -
Cancellation of B Ordinary
Shares (1,065) 1,065 -
Cancellation of Share
Premium - (28,423) - 28,423 -
Costs of Capital Reduction - - - - (36) (36)
_____ _____ _____ _____ _____ _____
Balance at 31 March
2021 1,116 190 728 - 6,106 8,140
Notes to the financial statements
5 Revenue and segmental analysis
An analysis of revenue (and the related gross profit) by product
or service and by geography is given below.
Revenue by type
Continuing Discontinued Total
To 31 March 2021 operations operations
Professional Consumer
GBP'000 GBP'000 GBP'000 GBP'000
Product sales 8,334 1,805 15 10,154
Royalty and licensing income 1,075 - - 1,075
_______ _______ _______ _______
Total revenue 9,409 1,805 15 11,229
Continuing Discontinued Total
To 31 March 2020 operations operations
Professional Consumer
GBP'000 GBP'000 GBP'000 GBP'000
Product sales 4,410 829 53 5,292
Royalty and licensing income 777 - - 777
_______ _______ _______ _______
Total revenue 5,187 829 53 6,069
Gross profit by type
Continuing Discontinued Total
To 31 March 2021 operations operations
Professional Consumer
GBP'000 GBP'000 GBP'000 GBP'000
Product sales 3,068 712 (13) 3,767
Royalty and licensing income 1,075 - - 1,075
_______ _______ _______ _______
Total gross profit 4,143 712 (13) 4,842
Continuing Discontinued Total
To 31 March 2020 operations operations
Professional Consumer
GBP'000 GBP'000 GBP'000 GBP'000
Product sales 1,693 420 - 2,113
Royalty and licensing income 777 - - 777
_______ _______ _______ _______
Total gross profit 2,470 420 - 2,890
Revenue by geography
The Group recognises revenue in three geographical regions based
on the location of customers, as set out in the following
table:
2021 2020
GBP'000 GBP'000
United Kingdom 8,468 5,177
Rest of World 2,455 487
North America * 291 352
_______ _______
Total continuing operations 11,214 6,016
* this represents revenue other than that arising from
discontinued operations
Management makes no allocation of costs, assets or liabilities
between these segments since all trading activities are operated as
a single business unit.
Discontinued operations comprise the entirety of the Group's US
operations which sold a range of biocidal products primarily to
consumers via major retailers. The comparative amounts for profit
and loss information have been reclassified in line with the
requirements of IFRS 5: Non-current assets held for sale and
discontinued operations.
Customer concentration
The Group has no customers representing individually over 10% of
revenue each (2020: nil).
Licence revenue and finance income
Licence contracts (and certain other contracts relating to the
sale of IP) typically provide for fixed payments to be made by
customers over a given term (typically between three and five years
but which may extend longer). Under IFRS 15, in order to reflect
the time value of money, such contracts are recognised as the
capitalised value of the income stream plus notional interest
accruing for the year on the credit deemed to be extended to the
customer (on a reducing balance basis). For the financial year 2021
this figure amounts to licence revenue of GBP1.08m and related
notional interest income of GBP53,000 (2020: GBP0.78m and
GBP33,000).
Non-current assets
All of the Group's non-current assets (comprising intangible
assets, goodwill, deferred tax assets, plant, property and
equipment, and long-term contract assets and trade receivables) are
held in the UK.
6 Operating expenses
Profit for the year has been arrived at after
charging/(crediting):
Continuing operations 2021 2020
GBP'000 GBP'000
Amortisation and impairment of intangible
non-current assets 426 466
Depreciation of tangible non-current assets 26 28
Auditor's remuneration (see note 8) 40 30
Staff costs (see note 9) 1,856 1,587
Research & development costs (net of capitalisation) 323 265
Research and development (R & D) tax credits - (120)
Short-term lease expenses 87 90
Realised foreign exchange (gains)/losses 98 (7)
7 Non-GAAP profit measures and exceptional items
Reconciliation of operating profit to EBITDA (earnings before
interest, taxation, depreciation and amortisation) and Adjusted
EBITDA:
Year to 31 March 2021 2020 *
GBP'000 GBP'000
Operating profit 1,015 239
Amortisation and depreciation 491 534
_______ _______
EBITDA 1,506 773
Adjusted for:
Loss on disposal of assets 106 -
Revenue recognised as interest under IFRS
15 53 33
Expensed share-based payments 111 47
Exceptional items:
-------- --------
- gain on adjustment of contingent liability - (443)
- audit expenses relating to prior year - 61
-------- --------
Total exceptional items - (382)
_______ _______
Adjusted EBITDA 1,776 471
* Restated to reflect the change in presentation of discontinued
operations
8 Auditor's remuneration
Year to 31 March 2021 2020
GBP'000 GBP'000
Charged in the financial year:
Audit of the financial statements of Byotrol
Plc 40 30
Amounts receivable by auditor in respect
of:
Audit of financial statements of subsidiaries
pursuant to legislation - 61
Other services 3 -
_______ _______
43 91
Amounts expensed relating to prior year (3) (61)
_______ _______
Total expense relating to year 40 30
9 Staff costs
The average monthly number of persons (including Executive
Directors) employed by the Group in continuing operations during
the year was:
Year to 31 March 2021 2020
Directors 5 3
Research and development 9 9
Sales 10 10
Technical support 10 7
Finance and administration 5 4
_______ _______
39 33
The staff costs for the year for the above employees were:
Year to 31 March 2021 2020
GBP'000 GBP'000
Wages and salaries 1,882 1,544
Social security contributions 214 184
Other pension costs 46 51
Less: amounts capitalised as intangible
assets (286) (192)
_______ _______
1,856 1,587
10 Directors' remuneration and transactions
The Directors' emoluments in the year ended 31 March 2021
were:
Basic Benefits Share-based
salary in kind payments Total Total
or fee
2021 2021 2021 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Executive Directors
T. Francis 82 - - 82 83
N. Hellyer 65 6 7 78 67
D. Traynor 156 3 - 159 140
Non-Executive Directors
S. Gogarty 34 - - 34 34
J. Langlands 40 - - 40 40
T. Medinger 15 - - 15 24
_______ _______ _______ _______ _______
392 9 7 408 388
Till Medinger retired from the board on 20 October 2020.
11 Share-based payments
The Company has granted equity-settled share options to certain
directors and employees. Exercise prices of options granted are set
to be equal to or more than the market value of the shares at the
date of grant. Option granted have a life of 10 years.
Options outstanding
At 31 March 2021 there were options outstanding over 32,823,400
(2020: 36,939,500) ordinary shares of 0.25p each which are
exercisable at prices in the range from 2.0 to 7.0p under the
Company's various share option schemes, at various times until
2024. Options outstanding at 31 March 2021 had a weighted average
exercise price of 4.13p (2020: 3.70p) and a weighted average
remaining contractual life of 3.0 years (2020: 3.7 years).
Movements in the number of share options outstanding and their
related weighted average exercise prices are as follows:
No. of options Average exercise
price
2021 2020 2021 2020
Outstanding at the beginning of
the year 36,939,500 41,448,250 3.70p 4.90p
Granted during the year 7,500,000 4,000,000 5.90p 2.00p
Forfeited during the year (5,334,000) (8,508,750) 4.38p 8.90p
Exercised in the year (6,282,100) - 3.26p -
_______ _______
Outstanding at the end of the year 32,823,400 36,939,500 4.13p 3.70p
The exercise prices of options outstanding fall in the following
ranges:
Range Number of options
2.0 - 3.0p 5,750,000
3.1 - 4.0p 12,093,400
4.1 - 5.0p 6,970,000
5.1 - 6.0p 6,750,000
6.1 - 7.0p 1,260,000
_______
32,823,400
The Group recognised the following expense related to share
based payments:
2021 2020
GBP'000 GBP'000
Charged to Consolidated Statement of Comprehensive
Income 111 47
Of this amount, GBP104,000 (2020: GBP26,000) relates to costs of
share options issued to subsidiary employees.
12 Finance income
2021 2020
GBP'000 GBP'000
Interest receivable on interest-bearing deposits 13 26
Notional interest accruing on contracts with
a significant financing component 53 33
_______ _______
Total finance income 66 59
13 Finance expense
2021 2020
GBP'000 GBP'000
Interest and finance charges paid or payable
on borrowings 42 45
Interest on lease liabilities under IFRS
16 2 3
Acquisition-related financing expense (unwinding
of discount on financial liabilities) - 80
_______ _______
Total finance expense 44 128
14 Taxation
Tax on profit on ordinary activities
Year to 31 March 2021 2020
GBP'000 GBP'000
Current tax
UK corporation tax charge/(credit) on profit - -
for the current year
UK corporation tax charge/(credit) on Other - -
Comprehensive Income
Adjustment in respect of prior years (25) -
_______ _______
Total current income tax (25) -
Deferred tax
(Recognition)/derecognition of deferred tax
asset arising from temporary differences 130 (330)
(Reversal) of deferred tax liability (47) (47)
_______ _______
Total deferred income tax charge/(credit) 83 (377)
Total income tax expense/(credit) recognised
in the year 58 (377)
15 Discontinued operations
In May 2020, the Board decided to close down its US operations.
Having wound down the operations over a period of years, at the
time of this decision the Group was using the services of one
individual as a sales person in the US on a consultancy basis; this
arrangement was terminated as of 31 December 2020. Accordingly at
31 March 2021, the disposal of Byotrol Inc. met the recognition
criteria of IFRS 5: Non-current assets held for sale and
discontinued operations. The results of Byotrol Inc. have therefore
been presented as discontinued and are shown separately from
continuing operations. The comparative 2020 financial information
in the Group Statement of Comprehensive Income has also been
presented as discontinued for the purposes of enabling meaningful
comparison.
The results from Byotrol Inc. are reported below as a
discontinued reporting segment:
Results of discontinued operations 2021 2020
GBP'000 GBP'000
Revenue 15 53
Cost of sales (28) (53)
_______ _______
Gross profit (13) -
Operating costs (85) (213)
_______ _______
Operating (loss) (98) (213)
Exchange differences on translation of foreign operations - (5)
_______ _______
Total comprehensive expense for the year (98) (218)
Cash in/(out) flows from discontinued operations 2021 2020
GBP'000 GBP'000
Cash inflow/(outflow) from operating activities (48) 23
_______ _______
Net cash in/(out)flow for the year (48) 23
Assets/(liabilities) relating to discontinued operations 2021 2020
GBP'000 GBP'000
Assets 6 53
(Liabilities) (97) (121)
16 Earnings
The following sets out the earnings and share data used in the
basic and diluted earnings per share computations:
Denominator for earnings per share calculations
Year to 31 March 2021 2020
GBP'000 GBP'000
Weighted number of ordinary shares in issue 442,947,561 432,424,400
Effect of dilutive potential ordinary shares 11,338,201 703,183
_______ _______
454,285,762 433,127,583
The Group has one category of security potentially dilutive to
ordinary shares in issue, being those share options granted to
employees where the exercise price (plus the remaining expected
charge to profit under IFRS 2) is less than the average price of
the Company's ordinary shares during the period in issue. The
weighted average number of shares for the calculation of diluted
earnings per share is computed using the treasury share method.
Numerator for earnings per share calculations
Year to 31 March 2021 GBP'000 GBP'000 GBP'000
Continuing Discontinued Total
operations operations
Profit/(loss) attributable to ordinary equity
holders of the Company
(numerator for basic earnings per share
calculation) 979 (98) 881
Adjusting items:
- share-based payments 111 - 111
- amortisation of acquisition-related intangibles 243 - 243
- deferred tax credit arising from acquisition-related
intangibles (47) - (47)
_______ _______ _______
Adjusted earnings attributable to owners
of the Parent 1,286 (98) 1,188
Year to 31 March 2020 GBP'000 GBP'000 GBP'000
Continuing Discontinued Total
operations operations
Profit/(loss) attributable to ordinary equity
holders of the Company
(numerator for basic earnings per share
calculation) 547 (213) 334
Adjusting items:
- exceptional items (382) - (382)
- share-based payments 47 - 47
- finance expense on liabilities relating
to contingent consideration 80 - 80
- amortisation of acquisition-related intangibles 243 - 243
- deferred tax credit arising from acquisition-related
intangibles (47) - (47)
_______ _______ _______
Adjusted earnings attributable to owners
of the Parent 488 (213) 275
Adjusted earnings per share from continuing operations
2021 2020
GBP'000 GBP'000
- basic 0.29p 0.11p
- diluted 0.28p 0.11p
19 Intangible assets
Intangible assets comprise capitalised development costs (in
relation to internally generated technology, products and processes
and those acquired through business combinations), acquired
customer relationships, acquired brands, patents and licences, and
goodwill.
An analysis of goodwill and other intangible assets is as
follows:
Year to Development Patents Customer Brands Framework Goodwill Total
31 March costs and licences relationships access
2021 rights
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April
2020 1,207 780 1,861 567 114 502 5,031
Additions 328 66 - - - - 394
Disposals - (170) - - (114) (284)
_______ _______ _______ _______ _______ _______ _______
At 31 March
2021 1,535 676 1,861 567 - 502 5,141
Amortisation
and impairment
At 1 April
2020 (271) (565) (299) (91) (114) - (1,340)
Amortisation
charge (140) (43) (186) (57) - - (426)
Disposals - 63 - - 114 - 177
_______ _______ _______ _______ _______ _______ _______
At 31 March
2021 (411) (545) (485) (148) - - (1,589)
Net carrying
amount
At 31 March
2021 1,124 131 1,376 419 - 502 3,552
At 1 April
2020 936 215 1,562 476 - 502 3,691
Year to Development Patents Customer Brands Framework Goodwill Total
31 March costs and licences relationships access
2020 rights
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 April
2019 958 734 1,861 567 114 502 4,736
Additions 249 46 - - - - 295
_______ _______ _______ _______ _______ _______ _______
At 31 March
2020 1,207 780 1,861 567 114 502 5,031
Amortisation
and impairment
At 1 April
2019 (109) (504) (113) (34) (114) - (874)
Amortisation
charge (119) (61) (186) (57) - - (423)
Impairment
charge (43) - - - - - (43)
_______ _______ _______ _______ _______ _______ _______
At 31 March
2020 (271) (565) (299) (91) (114) - (1,340)
Net carrying
amount
At 31 March
2020 936 215 1,562 476 - 502 3,691
At 1 April
2019 849 230 1,748 533 - 502 3,862
Amortisation is charged to the profit and loss account under
Administrative Expenses. A number of technology or patent groups
included in development costs or patents and licences above are
material to the Group. These are Technology A with a book value of
GBP287,000 which has not yet started to generate commercial returns
and hence is yet to be amortised; Technology B with a book value of
GBP135,000 which has not yet started to generate commercial returns
and hence is yet to be amortised; and Patent Group C with a book
value of GBP127,000 with a remaining life (i.e. to an amortised
value of zero) of approximately 8 years.
Development costs
Development costs comprise capitalised staff costs (and
allocable related direct costs) associated with the development of
new products and services which will be saleable to more than one
customer.
Patents
Patent costs represent the capitalised value of work undertaken
(either internally or externally by appropriate legal or other
consultants) to develop and protect patents, know-how and other
similar assets.
Customer relationships
Customer relationships as stated were acquired as a result of
the Medimark Acquisition.
Goodwill
Goodwill arose as a result of the Medimark Acquisition. It is
assessed as having an indefinite life but the Group tests whether
goodwill has suffered any impairment on an annual basis. The
Medimark CGU comprises the brands, contracts and customer
relationships acquired as part of the Medimark Acquisition, as well
as certain IP and the related workforce.
20 Tangible assets
Year to 31 March 2021 Computer Plant and Total
equipment machinery
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2020 72 135 207
Additions 17 38 55
_______ _______ _______
At 31 March 2021 90 173 263
Depreciation
At 1 April 2021 (60) (93) (153)
Charge for the year (11) (15) (26)
_______ _______ _______
At 31 March 2021 (71) (108) (179)
Net carrying amount
At 31 March 2021 19 65 84
At 1 April 2020 12 42 54
Year to 31 March 2020 Computer Plant and Total
equipment machinery
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 69 114 183
Additions 3 21 24
_______ _______ _______
At 31 March 2020 72 135 207
Depreciation
At 1 April 2019 (44) (81) (125)
Charge for the year (16) (12) (28)
_______ _______ _______
At 31 March 2020 (60) (93) (153)
Net carrying amount
At 31 March 2020 12 42 54
At 1 April 2019 25 33 58
21 Right-of-use assets
Right-of-use assets comprise leases over office buildings and
vehicles as follows:
Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2020 103 47 150
Additions in the period - - -
_______ _______ _______
At 31 March 2021 103 47 150
Depreciation
At 1 April 2020 (52) (29) (81)
Charge for the period (23) (16) (39)
_______ _______ _______
At 31 March 2021 (75) (45) (120)
Net carrying amount
At 31 March 2021 28 2 30
At 1 April 2020 51 18 69
Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
Cost
At 1 April 2019 - - -
Effect of change of accounting
policy (IFRS 16) 103 47 150
Additions in the period - - -
_______ _______ _______
At 31 March 2020 103 47 150
Depreciation
At 1 April 2019 - - -
Effect of change of accounting
policy (29) (13) (42)
Charge for the period (23) (16) (39)
_______ _______ _______
At 31 March 2020 (52) (29) (81)
Net carrying amount
At 31 March 2020 51 18 69
At 1 April 2019 - - -
22 Deferred tax
The following are the major deferred tax liabilities and assets
recognised by the Group and movements thereon during the current
and prior reporting period:
Recognised deferred tax assets
Tax losses Share-based Total
payments
GBP'000 GBP'000 GBP'000
At 1 April 2019 - - -
Recognised in profit or loss 330 - 330
Recognised directly in equity - 101 101
_______ _______ _______
At 31 March 2020 330 101 431
At 1 April 2020 - - -
Recognised in profit or loss (186) 56 (130)
Recognised directly in equity - 14 14
_______ _______ _______
At 31 March 2021 144 171 315
Deferred income tax assets have only been recognised to the
extent that it is considered probable that they can be recovered
against future taxable profits based on profit forecasts for the
foreseeable future.
At 31 March 2021 the Group had an unrecognised deferred tax
asset relating to unutilised trading losses and other temporary
differences of GBP2.85m (2020: GBP3.57m).
Deferred tax liabilities
2021 2020
GBP'000 GBP'000
At 1 April 394 441
Recognised in profit or loss (46) (47)
_______ _______
At 31 March 348 394
Comprising:
Amounts recognised on intangible assets
arising on consolidation 348 394
_______ _______
348 394
23 Inventories
2021 2020
GBP'000 GBP'000
Raw materials and consumables 124 71
Finished goods and goods for resale 975 214
_______ _______
1,099 285
24 Trade and other receivables
At 31 March 2021 2020
GBP'000 GBP'000
Trade receivables - product sales 878 1,223
Prepayments 334 264
Other receivables 4 132
Other tax repayable - 19
Current portion of long-term trade receivables
(IP sales) 398 547
_______ _______
Total other assets 1,614 2,185
The Group recognises impairments under IFRS 9 for relevant
classes of assets. The Group applies the simplified approach to
provide for expected credit losses prescribed by IFRS 9, which
permits the use of a provision matrix to measure the lifetime
expected losses. To measure the expected credit losses, trade
receivables have been grouped on shared credit risk characteristics
and the days past due. The expected loss rates are based on
representative historical credit losses. The historical loss rates
are adjusted to reflect current and forward-looking information
affecting the ability of the customers to settle the receivables.
Taking this and specific impairments into account, a loss allowance
for expected credit losses has been recorded as follows:
2021 2020
GBP'000 GBP'000
Loss allowance at 1 April 34 100
Amounts written off - (73)
Amounts recovered (34) (27)
Specific impairment charge 8 10
Additional expected credit loss provision 17 25
_______ _______
Loss allowance at 31 March 25 34
Aged analysis of trade receivables
At 31 March Current 0-30 days 31-60 61-90 91-120 Over 120 Total
2021 days days days days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gross 645 194 18 5 41 - 903
Specific impairment - - - - (8) - (8)
Additional
expected credit
loss provision (3) (2) (1) - (11) - (17)
_______ _______ _______ _______ _______ _______ _______
642 192 17 5 22 - 878
At 31 March Current 0-30 days 31-60 61-90 91-120 Over 120 Total
2020 days days days days
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gross 953 207 8 25 - 65 1,258
Specific impairment - - - - - (10) (10)
Additional
expected credit
loss provision (7) (2) (1) (2) - (13) (25)
_______ _______ _______ _______ _______ _______ _______
946 205 7 23 - 42 1,223
Non-current trade receivables
Non-current trade receivables arise most typically for the Group
in sales or licences of IP and/or know-how where the consideration
is structured as a series of fixed payments (i.e. "minimum
guaranteed amounts"; in addition to such payments there are usually
royalty or similar payments due relating to some measure of (for
example) sales made by the purchaser of the IP using the relevant
products and/or in the relevant geography). Such payments may
extend over several years. Under IFRS 15, if the contract is a
"right to use" contract, then the upfront and fixed payments are
recognised on transfer of the licence or IP at their aggregate
present value using an imputed cost of funds. Longer term contracts
which give rise to such assets may contain continuing obligations
on the part of Byotrol (for example, to provide updates or
improvements to the IP transferred to the extent achieved) but such
obligations are typically immaterial to the contract overall.
Current portion of long-term trade receivables 2021 2020
GBP'000 GBP'000
At 1 April 547 275
Recognised in the period, net of cash received (245) 96
Transfer from non-current trade receivables 96 176
_______ _______
At 31 March 398 547
Due after one year 2021 2020
GBP'000 GBP'000
At 1 April 714 176
Recognised in the period 631 714
Transfer to current (96) (176)
_______ _______
A 31 March 1,249 714
No impairments have been made in respect of long-term trade
receivables recognised as at the reporting date.
25 Lease liabilities
Lease liabilities comprise liabilities arising from the
committed and expected payments on leases over office buildings and
vehicles.
2021
Amounts due in more than one year Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
At 1 April 2020 29 2 31
Transfer from long-term to short-term (25) (2) (27)
_______ _______ _______
At 31 March 2021 4 - 4
Amounts due in less than one year Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
At 1 April 2020 24 15 39
Repayments of principal (25) (15) (40)
Transfer from long-term to short-term 25 2 27
_______ _______ _______
At 31 March 2021 24 2 26
2020
Amounts due in more than one year Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
At 1 April 2019 - - -
Effect of change of accounting policy 53 17 70
Transfer from long-term to short-term (24) (15) (39)
_______ _______ _______
At 31 March 2020 29 2 31
Amounts due in less than one year Office Vehicles Total
buildings
GBP'000 GBP'000 GBP'000
At 1 April 2019 - - -
Effect of change of accounting policy 23 16 39
Repayments of principal (23) (16) (39)
Transfer from long-term to short-term 24 15 39
_______ _______ _______
At 31 March 2020 24 15 39
26 Trade and other payables
At 31 March 2021 2020
GBP'000 GBP'000
Due within a year
Trade payables 739 828
Social security and other taxes 109 119
Accruals and deferred income 175 372
_______ _______
Total trade and other payables 1,023 1,319
The average credit period taken for trade purchases is between
30 and 60 days. Most suppliers do not charge interest on trade
payables for the first 30 days from the date of the invoice. The
Group has risk management policies in place to ensure that all
payables are paid within the appropriate credit time frame. The
Directors consider that the carrying amount of trade payables
approximates to their fair value.
Accruals comprise around GBP0.14m of accrued expenses plus
GBP29,000 of customer payments received in advance.
27 Loans and borrowings
Loans and borrowings comprise:
At 31 March 2021 2020
GBP'000 GBP'000
Current liabilities
Invoice discounting facility - 296
_______ _______
- 296
The invoicing discounting facility was fully repaid and
cancelled during the year.
28 Share capital and reserves
Share capital and share premium
Ordinary shares of 0.25p each (issued and GBP'000 Number
fully paid)
At 1 April 2019 1,077 430,885,271
Issued as consideration for business combination
during the year 24 9,363,034
_______ _______
At 31 March 2020 1,101 440,248,305
Issued for cash during the year 15 6,282,100
_______ _______
At 31 March 2021 1,116 446,530,405
The Ordinary Shares have full equal voting rights, equal
participation in dividends, equal participation in distribution on
winding up with no redemption rights.
Options over 6,282,100 (2020: nil) ordinary shares were
exercised for proceeds of GBP205,000 (2020: GBPnil).
B Ordinary shares of (approximately) 0.24p GBP'000 Number
each
At 1 April 2019 - -
_______ _______
At 31 March 2020 - -
Capitalisation of merger reserve to B ordinary
shares 1,065 443,149,405
Cancellation of B ordinary shares (1,065) (443,149,405)
_______ _______
At 31 March 2021 - -
Share capital represents the nominal value of ordinary shares
issued and fully paid. Share premium represents the excess of funds
raised from the placing of equity shares over the nominal value of
the shares after deducting directly attributable placing costs.
Capital reduction
During the year the Directors determined that they would request
shareholder and court approval for a capital reduction for Byotrol
plc, whereby the balance on the Company's share premium account and
merger reserves would be used to eliminate the deficit on the
retained earnings reserve (the "Capital Reduction"). The Capital
Reduction was approved by shareholders at a General Meeting of the
Company held on 13 November 2020. The Capital Reduction was
sanctioned by the High Court of England and Wales on 8 December
2020 and was registered with the Registrar of Companies on 5
January 2021 whereupon it became effective.
The Capital Reduction comprised: (i) the cancellation of the
entire amount standing to the credit of the Company's share premium
account and (ii) the capitalisation of the entire amount standing
to the credit of the Company's merger reserve by issuing B ordinary
shares in the capital of the Company and the subsequent
cancellation of such B ordinary shares (the 'Merger Reserve
Reduction'). As a result of the Capital Reduction the entire amount
then standing to the credit of the Company's Share premium as at 31
March 2020, being GBP28,423,000, was cancelled.
Addiionally as part of the Capital Reduction, one B ordinary
share ("B Share") was issued for each ordinary share in issue at
the time, i.e. 443,149,405 B shares. The aggregate nominal value of
the B Shares was the amount of the merger reserve (GBP1,065,000)
thus the nominal value of each B share was
GBP0.0024032526908165.
31 Capital commitments and contingent liabilities
As at 31 March 2021 the Group had no material capital
commitments (2020: nil) nor any contingent liabilities (2020:
nil).
32 Events after the reporting date
There have been no events subsequent to the reporting date which
would have a material impact on the financial statements.
General
Audited accounts
The financial information set out above does not comprise the
Group or the Company's statutory accounts. The Annual Report and
Financial Statements for the year ended 31 March 2020 have been
filed with the Registrar of Companies. The Independent Auditors'
Report on the Annual Report and Financial Statements ("Annual
Report") for the year ended 31 March 2020 was unqualified, did not
draw attention to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006.
The Independent Auditors' Report on the Annual Report for the
year ended 31 March 2021 is unqualified, does not draw attention to
any matters by way of emphasis, and does not contain a statement
under 498(2) or 498(3) of the Companies Act 2006. The Annual Report
will be filed with the Registrar of Companies following the annual
general meeting.
The Annual Report, together with the notice of the annual
general meeting, are expected to be made available to shareholders
in September 2021. Copies will also be available on the Company's
website and from the Company's registered office from that
date.
As this summary announcement is extracted from the full
financial statements, certain references may refer to notes which
are not included herein, and the Notes section is not reproduced in
full.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group together
with actions being taken to mitigate them and future potential
items for consideration will be set out in the Strategic Report
section of the Annual Financial Report 2021.
Presentation of figures
Figures are rounded to the nearest GBP0.1m, GBP0.01m or GBP'000
as the case may be. Minor differences may arise in tabulation and
figures presented elsewhere due to rounding differences.
This announcement was approved by the Board of Directors on 18
August 2021.
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END
FR FLFIRTTITLIL
(END) Dow Jones Newswires
August 19, 2021 02:00 ET (06:00 GMT)
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