TIDMIDH

RNS Number : 0830G

Immunodiagnostic Systems Hldgs PLC

20 November 2020

20 November 2020

Immunodiagnostic Systems Holdings PLC

Unaudited Interim Results for the six-month period ended 30 September 2020 (H1 FY21)

Key Business Developments in H1 FY21

The COVID-19 pandemic has had an extraordinary impact on global economic performance, and to healthcare systems around the world. Levels of routine diagnostic testing in the market dropped significantly in April, and since then they have been on a recovery path, reaching an estimated 85% of normal levels in September. On a quarterly basis, the directors estimate the market for routine testing saw a drop of 35 % during Q1, and 15% during Q2. The IDS revenues followed this market trend.

IDS has launched a number of products for COVID-19 testing in H1, but revenues from these products have so far not been able to make up for the impact of the decline in the market for routine testing.

Unaudited Group revenues for H1 FY21 were GBP13.7m, 27% lower than the same period last year on both a LFL (i.e. at constant FX rates) and reported basis. Revenues in Q1 were GBP5.7m (61% of Q1 FY20) but had increased significantly to GBP8.0m in Q2 (84% of Q2 FY20). This development mirrors the recovery of routine diagnostic testing as noted earlier.

We undertook several cost control efforts during the period to offset the reduced revenues, including using part time working schemes where available, and as a result reduced fixed costs by GBP1.6m versus H2 FY20.

Adjusted EBITDA, our core metric for measuring underlying profitability, decreased from a profit of GBP2.9m in H1 FY20 to a loss of GBP0.8m in H1 FY21. Within the period, Adjusted EBITDA has followed the same improving trend as the revenue, with a loss of GBP0.9m in Q1 recovering to a profit of GBP0.1m in Q2.

These results are summarised below:

 
 GBPm                 H1 FY21   H1 FY20   LFL Change* 
 Group Revenue           13.7      18.8         (27%) 
 Adjusted** EBITDA      (0.8)       2.9        (126%) 
-------------------  --------  --------  ------------ 
 

* Like for like 'LFL' numbers have been restated to remove the impact of foreign exchange movements in the period by restating the prior period results using the exchange rates of the current period.

** Before exceptional items of GBP0.6m (H1 FY20: GBPnil) - see reconciliation in the Financial Review section.

Jaap Stuut, CEO of IDS, commented:

"The impact of the COVID-19 pandemic dominated our H1 FY21 results. However, on the positive side it was pleasing that our automated assay menu increased by seven new assays. We also continued to increase the installed base of IDS analysers and saw a swift recovery in business performance during Q2 as diagnostic testing levels recovered. This increased installed base and assay menu, which now includes a comprehensive SARS-CoV-2 antibody test offering, coupled with our strong balance sheet position, gives me confidence that as the global situation improves IDS will return to growth."

Notes:

Immunodiagnostic Systems Holdings PLC ("IDS" or "the Group") is a specialist producer of manual and automated diagnostic testing kits and instruments for the clinical and research markets.

For further information:

 
 Immunodiagnostic Systems Holdings PLC   Tel : +44 (0)191 519 
                                          0660 
 Jaap Stuut, CEO 
  Paul Martin, Finance Director 
 
 Peel Hunt LLP                           Tel : +44 (0)20 7418 
                                          8900 
 James Steel/Oliver Jackson 
 

Chief Executive's Statement

Overview

On both a reported basis and LFL basis, Group revenue decreased by 27% from H1 FY20, mainly driven by the reduction in routine diagnostic testing levels due to the COVID-19 pandemic. However, we witnessed a much stronger performance towards the end of H1, with Q2 revenues at 84% of the same period in the prior year. The quarterly Group revenue performance is summarised as follows:

 
                  FY21        FY20      % of FY20 revenue 
                                         achieved in FY21 
 Q1 (April - 
  June)          GBP5.7m     GBP9.1m           61% 
               ----------  ----------  ------------------ 
 Q2 (July - 
  Sept)          GBP8.0m     GBP9.7m           84% 
               ----------  ----------  ------------------ 
 Total          GBP13.7m    GBP18.8m           73% 
               ----------  ----------  ------------------ 
 

Below is a discussion of the main developments and actions taken in each business unit during the period:

   1.   AUTOMATED BUSINESS 
   1.1       Business Performance 
 
                                                       LFL Change % 
                     H1 FY21   H1 FY20   H1 FY19   H1 FY21 v    H1 FY20 
                      GBP000    GBP000    GBP000     H1 FY20          v 
                                                                H1 FY19 
                    --------  --------  --------  ----------  --------- 
 25-OH Vitamin 
  D                    1,069     2,325     2,839       (54%)      (20%) 
                    --------  --------  --------  ----------  --------- 
 Speciality 
  - Endo               5,410     7,059     6,679       (23%)         5% 
                    --------  --------  --------  ----------  --------- 
 Speciality 
  - AI                   805       702       425        14 %       64 % 
                    --------  --------  --------  ----------  --------- 
 Speciality 
  - Others               214       169       144         26%        17% 
                    --------  --------  --------  ----------  --------- 
 Instrument 
  Sales & Service        699       736       714        (6%)         3% 
                    --------  --------  --------  ----------  --------- 
 Total                 8,197    10,991    10,801       (25%)         0% 
                    --------  --------  --------  ----------  --------- 
 

Revenue performance in our Automated business declined versus the prior year due to lower diagnostic testing levels, as noted earlier. The revenue trajectory improved significantly as H1 progressed, with revenues of GBP3.3m in Q1 increasing to GBP4.9m in Q2.

Business performance varied depending on geography, due to the differing stages of the pandemic in each location. During Q2 FY21 sales in our direct European territories had recovered and were slightly ahead of the same period in the previous year. Conversely, sales in the US and some of our distribution territories were significantly lower.

Over the last few years, our strategy has been to develop new business streams in our Automated Business, thereby reducing our reliance on the declining Vitamin D business. Vitamin D now only accounts for 13% of our Automated business, resulting in a more diversified revenue base with better underlying growth characteristics.

It was pleasing to note, despite the macro economic factors, Speciality Autoimmune revenues continued to grow. This reflects the attractiveness in the market of our comprehensive assay menu which combines dedicated autoimmune markers with complementary endocrinology markers. There is also opportunity to accelerate our Infectious Disease assay revenues on the back of our automated SARS-CoV-2 antibody tests which were released towards the end of H1 FY21.

   1.2       Instrument Placements 

An analysis of instrument placements and sales is set out below:

 
                                   H1 FY21   H1 FY20     H1 FY19 
 Direct Gross Placements 
  [1]                                    9        18        15 
 Direct Returns                       (10)      (14)        (12) 
 Direct Net Placements 
  [2]                                  (1)         4           3 
 
 Sales to Distributors 
  [3]                                   12        14          13 
 Total Analyser Installations 
 [1] + [3]                              21        32          28 
 Increase in installed 
  base [2] + [3]                        11        18          16 
-------------------------------   --------  --------  ---------- 
 

The worldwide installed base of analysers increased by 11 during H1 FY21 (H1 FY20: 18).

The focus in most hospitals and laboratories on acute PCR testing for SARS-CoV-2 has impacted the speed in which we can install analysers for validation, and more generally to progress opportunities through our sales pipeline. Sales activity levels, in both direct and distribution markets, improved during Q2, and as a result we expect to see improved analyser placement performance during H2 FY21.

   1.3          Assays per Instrument 

Average assays being run on each instrument stands at 6.1, versus 5.4 at 30 September 2019, demonstrating our ability to upsell new assays onto existing placements, along with the continued uptake of our enlarged assay portfolio.

   1.4        Market Share 

We have assessed whether the strong decrease in revenues in H1 FY21 could be the result of a loss of market share and are confident that we have not ceded market share to competition. We take this confidence from three sources: the lower number of analysers returned, the increased ability to upsell more assays onto our installations, and the fact that many diagnostic companies routine testing businesses have suffered similar declines in revenue.

   1.5          COVID-19 Products 

Towards the end of H1 FY21 we launched two automated immunoassays for the detection of SARS-CoV2 IgG and IgM antibodies, which can detect past infections as well as providing critical public health information. We also provided outsourced manufacturing services to The Binding Site (UK) for their ELISA-based SARS-CoV-2 antibody test. Revenue from COVID-19 products amounted to GBP0.4m during Q2 FY21.

With the potential arrival of SARS-CoV-2 vaccines, public health studies into the virus should increase as there will be a need to measure the success of the vaccination programmes. There should be a growing interest in monitoring the overall antibody level in a population to measure the attainment of a protective antibody level nationwide for achieving herd immunity. This could drive increased sales of our automated SARS-CoV2 antibody tests.

The above tests are used to confirm past infections. However currently the market focus is on testing to verify an active infection. Therefore, in conjunction with one of our partners, we are working on the development of a saliva-based rapid test for SARS-CoV-2 antigens. This manual test, which has the potential for self-administered use, would allow for immediate identification of individuals with an elevated amount of SARS-CoV-2 virus and be extremely helpful for curtailing the spread of the virus. In addition, it will overcome the shortcoming of presently used rapid tests based on nasopharyngeal swabs, which rely on sampling by professional staff only.

   1.6          Assay Development and Product Registration 

In Europe, in addition to the two automated SARS-Cov-2 tests we released the IDS Automated Cortisol assay, which rounds out our automated hypertension panel. We also entered the field of therapeutic drug monitoring, with a panel of four new tests co-developed with a partner. These are the first such automated tests on the market. They are used to monitor the efficacy of Infliximab (trade name Remicade) and Adalimumab (trade name Humira) which are antibody-based drugs used in the management of chronic inflammatory diseases.

In the US we achieved 510k approval for our BAP assay and expect to make the first sales of this key assay to a major US laboratory chain during H2 FY21.

In summary, the automated assay menu now available on the IDS analysers is:

 
                        Sep 20      Sep 19 
                       CE    FDA   CE    FDA 
                      ----  ----  ----  ---- 
 Endocrinology         23    12    22    11 
                      ----  ----  ----  ---- 
 Autoimmune            29          29 
                      ----  ----  ----  ---- 
 Infectious Disease    25          23 
                      ----  ----  ----  ---- 
 Allergy               67          67 
                      ----  ----  ----  ---- 
 Therapeutic Drug       4           - 
  monitoring 
                      ----  ----  ----  ---- 
 Total                 148   12    141   11 
                      ----  ----  ----  ---- 
 
   2.   Manual Business 
 
                                                       LFL Change % 
                     H1 FY21   H1 FY20   H1 FY19   H1 FY21 v    H1 FY20 
                      GBP000    GBP000    GBP000     H1 FY20          v 
                                                                H1 FY19 
                    --------  --------  --------  ----------  --------- 
 25-OH Vitamin 
  D                      249       604       556       (59%)         6% 
                    --------  --------  --------  ----------  --------- 
 Other Speciality 
  - IDS                1,696     2,446     2,524       (31%)       (5%) 
                    --------  --------  --------  ----------  --------- 
 Other Speciality 
  - Purchased            667       872       987       (24%)      (14%) 
                    --------  --------  --------  ----------  --------- 
 Diametra                999     1,816     2,069       (45%)      (13%) 
                    --------  --------  --------  ----------  --------- 
 Total                 3,611     5,738     6,136       (37%)       (8%) 
                    --------  --------  --------  ----------  --------- 
 

The Manual business saw a decline of 37% LFL versus H1 FY20, impacted essentially by the same factors as the Automated business. Revenues started to recover with Q1 revenue being GBP1.6m and Q2 being GBP2.0m. Despite the efforts of the Manual business unit sales team, this recovery is less pronounced than our Automated business, which we believe is due to a greater portion of our Manual business being generated in geographies which have seen a slower rebound from the first virus wave and hence lower demand levels.

The speciality product range has been impacted less by the reduction in levels of routine testing than our 25-OH Vitamin D and Diametra products, as the speciality tests are often used in a research setting, where the volume impact has been less significant.

   3.   Technology Business 
 
                                                       LFL Change % 
                      H1 FY21   H1 FY20   H1 FY19    H1 FY21    H1 FY20 
                       GBP000    GBP000    GBP000          v          v 
                                                     H1 FY20    H1 FY19 
                     --------  --------  --------  ---------  --------- 
 Royalty Income             -         -        35         0%      (99%) 
                     --------  --------  --------  ---------  --------- 
 Technology Income      1,890     2,062     1,523       (9%)        36% 
                     --------  --------  --------  ---------  --------- 
 Total                  1,890     2,062     1,558       (9%)        32% 
                     --------  --------  --------  ---------  --------- 
 

Our Technology business, comprising the sale of instruments and ancillaries to OEMs, showed a LFL decline of GBP172k.

In this business unit, we have widened the sales focus to include commercialisation of our assay technology and manufacturing know-how. We had success in this area through our agreements to provide contract manufacturing services for SARS-CoV-2 ELISA kits, the revenue for which has been recognised in Technology Income, along with the revenue from sales of our analyser technology to OEM partners.

   4.   Operations 

Like most businesses IDS has faced challenges and restrictions arising from the COVID-19 crisis. These have varied in each of our operational locations, and across the territories where our customers and suppliers are based. It is a credit to our entire team that we were able to maintain full operational capabilities across the business, thus ensuring continuity of supply to all our customers, while adhering to all regulations recommended to ensure the safety of our employees. We have carefully managed costs during the period - more information related to this is provided in the Financial Review.

I would like to thank all of the IDS team for their efforts to ensure we have been able to maintain strong customer service levels and meet customer requirements during these unprecedented times.

Financial review

Group revenues were GBP13.7m, compared to GBP18.8m recorded in H1 FY20. An overview of the revenue performance has been given in the Chief Executive's Statement.

Adjusted EBITDA (before exceptional items) was a loss of GBP0.8m, compared to a profit of GBP2.9m in H1 FY20, the reduction being driven mainly by the lower revenues, offset by cost savings as explained later in this review. The adjusted EBITDA trajectory improved significantly during H1 FY21, with Q1 recording a loss, but returning to profit in Q2. Free cash to equity outflow was GBP2.9m (H1 FY20: inflow of GBP0.4m).

   A.    SUMMARY OF INCOME STATEMENT 
 
 
                                          H1 FY21     H1 FY20*      FY20* 
                                           GBP000       GBP000     GBP000 
-------------------------------------  ----------  -----------  --------- 
 Revenue                                   13,698       18,791     39,347 
-------------------------------------  ----------  -----------  --------- 
 Gross profit                               5,260        9,417     19,546 
 Gross margin                               38.4%        50.1%      49.7% 
 Sales and marketing                      (4,081)      (4,403)    (8,890) 
 Research and development                 (2,094)      (1,899)    (4,096) 
 General and administrative expenses      (2,069)      (2,473)    (5,232) 
-------------------------------------  ----------  -----------  --------- 
 Total operating costs                    (8,244)      (8,775)   (18,218) 
 Exceptional items                          (556)            -          - 
-------------------------------------  ----------  -----------  --------- 
 (Loss)/profit from operations            (3,540)          642      1,328 
 
   Add back: 
 Depreciation and amortisation              2,234        2,215      4,722 
 Exceptional items                            556            -          - 
-------------------------------------  ----------  -----------  --------- 
 Adjusted EBITDA                            (750)        2,857      6,050 
-------------------------------------  ----------  -----------  --------- 
 

*Restated - see A1 below

The profit performance for the Group followed a similar trajectory to revenue, with a significant improvement during Q2 as revenues increased, and costs reduced. Gross margin was 34% in Q1 FY21, improving to 41% in Q2 FY21. Adjusted EBITDA in Q1 FY21 was a loss of GBP0.9m, recovering to a profit of GBP0.1m in Q2 FY21.

A1 Change in Accounting Policy

To ensure that the Group's financial performance can be more easily benchmarked with its peer group, and our policies are aligned to market practice in the diagnostics sector, the amortisation costs related to capitalised development spend previously shown within cost of goods sold, have been reclassified to Research and Development expenses within Operating Costs. This change does not impact the profit or net assets of the Group. Prior period comparatives have been updated to reflect this change in accounting policy. A table detailing the impact of this reclassification is set out in Note 1.

A2 Foreign Exchange

The average exchange rates used to translate Euros and US Dollars to Pounds Sterling are as follows:

 
 
 Average exchange rates        H1 FY21   H1 FY20   FY20 
----------------------------  --------  --------  ----- 
 Pounds Sterling: US Dollar       1.27      1.26   1.28 
 Pounds Sterling: Euro            1.12      1.13   1.15 
----------------------------  --------  --------  ----- 
 

The movement in FX rates has not significantly impacted the reported results of the Group and the comparisons versus H1 FY20. In the period, 73% (H1 FY20: 68%) of the Group's revenues were denominated in Euros, and 13% (H1 FY20: 20%) were denominated in US Dollars.

A3 Gross Profit

Gross profit was GBP5.3m (H1 FY20: GBP9.4m) implying a gross margin of 38.4% (H1 FY20: 50.1%).

It is important to note that this drop in margin is almost entirely volume related; we have not seen a significant change in product selling prices to customers. As a result, once sales volumes recover, we expect gross margins to swiftly return to the circa 50% level as seen in FY20. Indeed, as the continuous improvement projects implemented in the operations function have continued during H1 FY21, margins should continue the upward trend seen between FY19 and FY20 moving forward.

A4 Operating Costs

The Group's total operating costs (before exceptional items) comprise:

 
                                    H1 FY21  % revenue  H1 FY20*  % revenue* 
                                     GBP000               GBP000 
----------------------------------  -------  ---------  --------  ---------- 
Sales and marketing                 (4,081)      29.8%   (4,403)       23.4% 
Research and development            (2,094)      15.3%   (1,899)       10.1% 
General and administrative 
 expenses                           (2,069)      15.1%   (2,473)       13.2% 
Operating costs (pre-exceptional)   (8,244)      60.2%   (8,775)       46.7% 
----------------------------------  -------  ---------  --------  ---------- 
 

*Restated H1 FY20 information as described in Section A1 of Financial Review

Total spend on operating costs has declined by GBP0.6m to GBP8.2m (H1 FY20: 8.8m) with the details set out in the table above.

A5 Cost Control Efforts

During H1 FY21 we implemented two restructuring exercises, as set out in the exceptional items note below, and took advantage of part time working schemes throughout Europe and the Paycheck Protection Program scheme in the US.

As a result, our spend on fixed costs across COGS and Operating costs reduced by GBP1.6m (or 13%) versus H2 FY20, and GBP2.2m versus our H1 plan for FY21. We will continue these cost control efforts into H2 FY21 as required, taking account of both how the business recovers as the pandemic evolves as well as the success of our new product lines.

A6 Exceptional Items

Exceptional items during the current and previous financial periods comprise:

 
                                                  H1 FY21   H1 FY20 
                                                   GBP000    GBP000 
--------------------------  -----------------------------  -------- 
 Restructuring costs                                (556)         - 
-------------------------------------------  ------------  -------- 
 
 

In H1 FY21 the exceptional costs relate to redundancy costs arising from two strategic reorganisation projects. Firstly, the assay research and development function was consolidated into the two sites in Boldon and Spello, and secondly, we streamlined the IDS Executive Team. We believe both of these changes, which were independent of the impact of the COVID-19 pandemic, will lead to quicker and more efficient decision making within the business, increased output, and a significant reduction in our fixed cost base.

A7 Finance Expense

Net finance expense was GBP0.1m (H1 FY20: GBP0.9m). The prior period cost relates mainly to foreign exchange losses on intercompany loans. In the intervening period the intercompany balances have been reorganised to reduce the exposure to intercompany related FX movements.

A8 Taxation

The Group's effective tax rate for the current period is based on an estimate of the rate for the full financial year and is 19% (H1 FY20: 107%) giving a tax credit of GBP0.7m (H1 FY20: GBP0.2m). Before exceptional items, prior year adjustments and the effect of rate changes on deferred tax balances, the effective rate is 12% (H1 FY20: 60%).

A9 Earnings Per Share

Basic loss per share was 10.3p (H1 FY20: earnings per share 0.1p).

   B.    HEADCOUNT 

A summary of IDS headcount by function is given below:

 
                                   30 Sep 20   31 Mar   30 Sep 
                                                   20       19 
 Operations                              133      136      125 
 
 Sales and Marketing                      75       77       75 
      thereof field sales force 
       & CAS                              22       23       23 
 
 Research and Development                 43       47       38 
 
 General and administrative               35       35       35 
 Total FTE's                             286      295      273 
 IVDR project                           (10)      (9)        - 
 Total FTE's (excluding IVDR 
  project)                               276      286      273 
--------------------------------  ----------  -------  ------- 
 

Annualised revenue per employee for H1 FY21 decreased to GBP96,000 per FTE (H1 FY20: GBP138,000). The increase in headcount versus 30 Sep 2019 is mainly driven by the creation of a team tasked with ensuring our assays will comply with the future IVD regulations, which will come into effect in May 2022. This team is split across the Operations and Research and Development categories.

   C.    SUMMARY OF BALANCE SHEET 

C1 Equity

The Group's net assets at 30 September 2020 are GBP54.0m, compared to GBP57.1m at 31 March 2020 (30 September 2019: GBP56.7m).

C2 Working Capital

The Group net working capital decreased to GBP13.2m from GBP14.1m at 31 March 2020 (GBP11.3m at 30 September 2019). This equates to 48% of annualised revenue.

Inventory levels have increased, driven by a decision to build up stock levels of analysers and related raw materials worth GBP2.1m, which we expect will be sold or placed during the second half of the year. This was offset by a net reduction in trade debtors and trade payables, reflecting the lower activity levels experienced towards the end of H1 FY21.

   D.    SUMMARY OF CASH FLOW STATEMENT 

A summary of the Group's cash flow is set out below:

 
 
                                        H1 FY21     H1 FY20      FY20 
                                         GBP000      GBP000    GBP000 
-----------------------------------  ----------  ----------  -------- 
 (Loss)/profit before tax               (3,640)       (230)     3,254 
 Depreciation and amortisation            2,234       2,215     4,723 
 Income taxes received                      902         331       788 
 Other adjusting items                      108         885   (1,908) 
 Movements in working capital             (325)       (564)   (1,314) 
-----------------------------------  ----------  ----------  -------- 
 Cash (used in)/generated from 
  operating activities                    (721)       2,637     5,543 
 Cash used in investing activities      (1,729)     (1,929)   (4,663) 
 Cash used in financing activities        (974)       (486)     (938) 
-----------------------------------  ----------  ----------  -------- 
 Net (decrease)/increase in cash 
  and cash equivalents                  (3,424)         222      (58) 
-----------------------------------  ----------  ----------  -------- 
 
 Dividend                                   547         201       201 
-----------------------------------  ----------  ----------  -------- 
 Free cash flow (from)/to equity        (2,877)         423       143 
-----------------------------------  ----------  ----------  -------- 
 

The net decrease in cash was GBP3.4m, compared to an increase of GBP0.2m in H1 FY20. The decrease was driven by the lower revenues recorded, which led to cash of GBP0.7m being used in operating activities. In H1 FY20, GBP2.6m of cash was generated from operating activities.

Cash used in investing activities reduced, mainly as a result of the lower instrument placements during H1 FY21. The increase in cash used in financing activities was due to the increased dividend of GBP0.5m related to the prior year (H1 FY20: GBP0.2m).

As a result of the above, free cash outflow to equity was GBP2.9m (H1 FY20: inflow of GBP0.4m).

As at 30 September 2020, the Group's cash and cash equivalents are GBP24.2m (30 September 2019: GBP28.1m; 31 March 2020: GBP27.6m).

   E.     BREXIT 

With a hard Brexit looking more probable, I believe IDS is well positioned to mitigate any disruption. Most of our production capacity and customer base is located outside the UK, and thus will not be impacted by Brexit.

In the run up to 31 December we will position our finished goods inventory to mitigate the impact of any delays arising at the UK:EU border, and do not anticipate any impact to our customers. Furthermore, we have plans to ensure sufficient stock of raw materials are held, particularly where we know a transfer across this border is required, to ensure production in our Boldon facility can continue uninterrupted. Finally, we have taken the steps necessary to ensure our products retain the relevant regulatory approval to enable sale in the EU post Brexit.

Should the Pound Sterling be adversely impacted by a hard Brexit, this will be favourable to IDS, as the majority of our income stream is in Euros or US Dollars, yet we have significant costs in Pounds Sterling.

   F.     OUTLOOK 

While I am pleased with the recovery shown during the second quarter, there remains uncertainty as to how this recovery might evolve, as it is highly contingent on the future development of the pandemic. Given the current onset of a second wave of COVID-19 infections across Europe and the US we will keep a tight control on costs and aim to be ahead of the curve when matching costs to revenues.

Unaudited consolidated interim income statement

For the six-month period to 30 September 2020

 
                                                             Restated     Restated 
                                               6 Months      6 Months   Year ended 
                                                  ended         ended     31 March 
                                                 30 Sep   30 Sep 2019         2020 
                                                   2020 
                                        Note     GBP000        GBP000       GBP000 
 
                                         2, 
 Revenue                                  3      13,698        18,791       39,347 
 Cost of sales                                  (8,438)       (9,374)     (19,801) 
 
 Gross profit                                     5,260         9,417       19,546 
 Sales and marketing costs                      (4,081)       (4,403)      (8,890) 
 Research and development costs                 (2,094)       (1,899)      (4,096) 
 General and administrative expenses            (2,069)       (2,473)      (5,232) 
                                       -----  ---------  ------------  ----------- 
 Operating costs pre-exceptional 
  items                                         (8,244)       (8,775)     (18,218) 
 
           Restructuring costs                    (556)             -            - 
   Total exceptional items               4        (556)             -            - 
-------------------------------------  -----  ---------  ------------ 
 
 Operating costs                                (8,800)       (8,775)     (18,218) 
 
 (Loss)/profit from operations                  (3,540)           642        1,328 
 
 Finance income 
 Finance income pre-exceptional 
  items                                              36             -          891 
 Exceptional finance income                           -             -        1,226 
 Total finance income                                36           108        2,117 
 Finance costs                                    (136)         (980)        (191) 
 
 (Loss)/profit before tax                       (3,640)         (230)        3,254 
 
 Income tax credit                       6          688           246           94 
 
 (Loss)/profit for the period 
  attributable to owners of the 
   parent                                       (2,952)            16        3,348 
                                       =====  =========  ============  =========== 
 
 (Loss)/earnings per share 
 From continuing operations 
 Adjusted basic                          5       (8.6)p          0.1p         7.4p 
 Adjusted diluted                        5       (8.5)p          0.1p         7.4p 
 Basic                                   5      (10.3)p          0.1p        11.6p 
 Diluted                                 5      (10.2)p          0.1p        11.6p 
 
 
 

Unaudited interim statement of other comprehensive income

For the six-month period to 30 September 2020

 
                                           6 Months   6 Months   Year ended 
                                              ended      ended     31 March 
                                             30 Sep     30 Sep         2020 
                                               2020       2019 
                                             GBP000     GBP000       GBP000 
 
 (Loss)/profit for the period               (2,952)         16        3,348 
 Other comprehensive income to be 
  reclassified to profit or loss in 
  subsequent periods: 
  Currency translation differences              390      1,575        (137) 
 Exchange differences classified to 
  profit and loss on liquidation of 
  foreign subsidiary                              -          -      (1,226) 
 Other comprehensive income/(expense) 
  to be reclassified to profit or loss 
  in subsequent periods, before and 
  after tax                                     390      1,575      (1,363) 
 
 Other comprehensive (expense)/income 
  not to be reclassified to profit 
  or loss in subsequent periods: 
 Remeasurement of defined benefit 
  plan                                            -       (39)          (8) 
 Other comprehensive (expense)/income 
  not to be reclassified to profit 
  or loss in subsequent periods, before 
  tax                                             -       (39)          (8) 
 
 Tax relating to other comprehensive 
  income not to be reclassified to 
  profit or loss in subsequent periods            -          -          (5) 
                                          ---------  ---------  ----------- 
 Other comprehensive income/(expense), 
  net of tax                                    390      1,536      (1,376) 
                                          ---------  ---------  ----------- 
 
 Total comprehensive (expense)/income 
  for the period 
  attributable to owners of the parent      (2,562)      1,552        1,972 
                                          =========  =========  =========== 
 

Unaudited consolidated interim balance sheet

As at 30 September 2020

 
                                         30 Sep   30 Sep   31 March 
                                           2020     2019       2020 
 
                                  Note   GBP000   GBP000     GBP000 
 Assets 
 Non-current assets 
 Property, plant and equipment            9,722    8,500      9,806 
 Other intangible assets                 11,183   11,123     11,162 
 Deferred tax assets                        295      284        116 
 Other non-current assets                   110      110        289 
                                         21,310   20,017     21,373 
 Current assets 
 Inventories                             13,181    9,043     10,740 
 Contract assets                            268      402        317 
 Trade and other receivables              7,228    8,560     11,153 
 Income tax receivable                    1,633    2,528      2,140 
 Cash and cash equivalents               24,178   28,148     27,584 
                                         46,488   48,681     51,934 
                                 -----  -------  -------  --------- 
 Total assets                            67,798   68,698     73,307 
                                 -----  -------  -------  --------- 
 
 Liabilities 
 Current liabilities 
 Lease liabilities                          851      554        833 
 Trade and other payables                 7,265    6,518      9,494 
 Contract liabilities                       175      166        209 
 Income tax payable                         218      348        485 
 Provisions                        7         78       47         76 
 Government grants                           18       28         22 
                                          8,605    7,661     11,119 
                                 -----  -------  -------  --------- 
 Net current assets                      37,883   41,020     40,815 
                                 -----  -------  -------  --------- 
 
 Non-current liabilities 
 Lease liabilities                        2,841    2,062      2,724 
 Employee benefit obligations               370      403        360 
 Provisions                        7      1,009      884        969 
 Deferred tax liabilities                   986      947      1,046 
                                          5,206    4,296      5,099 
 Total liabilities                       13,811   11,957     16,218 
                                 -----  -------  -------  --------- 
 Net assets                              53,987   56,741     57,089 
                                 =====  =======  =======  ========= 
 
 Total equity 
 Called up share capital           8        589      589        589 
 Share premium account             8     32,345   32,345     32,345 
 Other reserves                           3,687    6,235      3,297 
 Retained earnings                       17,366   17,572     20,858 
 Equity attributable to owners 
  of the Parent                          53,987   56,741     57,089 
                                 =====  =======  =======  ========= 
 

Unaudited consolidated interim cash flow statement

For the six-month period to 30 September 2020

 
                                           6 Months   6 Months   Year ended 
                                              ended      ended     31 March 
                                             30 Sep     30 Sep         2020 
                                               2020       2019 
                                             GBP000     GBP000       GBP000 
 
 (Loss)/profit before tax                   (3,640)      (230)        3,254 
 Adjustments for: 
 Depreciation of property, plant 
  and equipment                               1,140      1,185        2,468 
 Amortisation of intangible assets            1,094      1,030        2,255 
 Loss on disposal of property, plant 
  and equipment                                   2          2            3 
 Share-based payment charge                       7         11           15 
 Finance income                                (36)      (108)      (2,117) 
 Finance costs                                  135        980          191 
 Operating cash flows before movements 
  in working capital                        (1,298)      2,870        6,069 
 Increase in inventories                    (2,214)      (910)      (2,484) 
 Decrease/(increase) in receivables           4,098        638      (1,933) 
 (Decrease)/increase in payables, 
  provisions and deferred income            (2,209)      (292)        3,103 
 Cash (used in)/generated by operations     (1,623)      2,306        4,755 
 Income taxes received                          902        331          788 
 Net cash from operating activities           (721)      2,637        5,543 
                                          ---------  ---------  ----------- 
 Investing activities 
 Purchases of other intangible assets       (1,065)      (922)      (2,198) 
 Purchases of property, plant and 
  equipment                                   (700)    (1,115)      (2,638) 
 Interest received                               36        108          173 
 Net cash used by investing activities      (1,729)    (1,929)      (4,663) 
                                          ---------  ---------  ----------- 
 Financing activities 
 Principal element of lease payments          (327)      (215)        (546) 
 Interest paid                                (100)       (70)        (191) 
 Dividends paid                               (547)      (201)        (201) 
 Net cash used by financing activities        (974)      (486)        (938) 
                                          ---------  ---------  ----------- 
 Net (decrease)/increase in cash 
  and cash equivalents                      (3,424)        222         (58) 
 Effect of exchange rate differences             18        213         (71) 
 Cash and cash equivalents at beginning 
  of period                                  27,584     27,713       27,713 
                                          ---------  ---------  ----------- 
 Cash and cash equivalents at end 
  of period                                  24,178     28,148       27,584 
                                          =========  =========  =========== 
 

Unaudited consolidated statement of changes in equity

 
                                     Share     Share      Other   Retained     Total 
                                   capital   premium   reserves   earnings 
                                             account 
                                    GBP000    GBP000     GBP000     GBP000    GBP000 
 At 1 April 2020                       589    32,345      3,297     20,858    57,089 
 Loss for the period                     -         -          -    (2,952)   (2,952) 
 Other comprehensive 
  income 
   Foreign exchange translation 
    differences on foreign 
    currency net investment 
    in subsidiaries                      -         -        390          -       390 
   Remeasurement of defined 
    benefit plan                         -         -          -          -         - 
 Total comprehensive 
  income                                 -         -        390    (2,952)   (2,562) 
 Transactions with 
  owners 
   Share-based payments                  -         -          -          7         7 
   Dividends paid                        -         -          -      (547)     (547) 
 At 30 September 2020                  589    32,345      3,687     17,366    53,987 
                                  ========  ========  =========  =========  ======== 
 
 At 1 April 2019                       589    32,345      4,660     17,709    55,303 
 Change in accounting 
  policy                                 -         -          -         76        76 
 Restated as at 1 April 
  2019                                 589    32,345      4,660     17,785    55,379 
 Profit for the period                   -         -          -         16        16 
 Other comprehensive 
  income 
   Foreign exchange translation 
    differences on foreign 
    currency net investment 
    in subsidiaries                      -         -      1,575          -     1,575 
 Remeasurement of defined 
  benefit plan                           -         -          -       (39)      (39) 
                                  --------  --------  ---------  ---------  -------- 
 Total comprehensive 
  income                                 -         -      1,575       (23)     1,552 
 Transactions with 
  owners 
   Share-based payments                  -         -          -         11        11 
   Dividends paid                        -         -          -      (201)     (201) 
 At 30 September 2019                  589    32,345      6,235     17,572    56,741 
                                  ========  ========  =========  =========  ======== 
 
 
                                           Share     Share      Other   Retained     Total 
                                         capital   premium   reserves   earnings 
                                                   account 
                                          GBP000    GBP000     GBP000     GBP000    GBP000 
 At 1 April 2019                             589    32,345      4,660     17,709    55,303 
 Profit for the year                           -         -          -      3,348     3,348 
 Other comprehensive income 
   Foreign exchange translation 
    differences on foreign 
    currency net investment 
    in subsidiaries                            -         -      (137)          -     (137) 
   Exchange differences classified 
    to retained earnings on 
    liquidation of foreign 
    subsidiary                                 -         -    (1,226)          -   (1,226) 
   Remeasurement of defined 
    benefit plan                               -         -          -        (8)       (8) 
   Tax effect on remeasurement 
    of defined benefit plan                    -         -          -        (5)       (5) 
 Total comprehensive (expense)/income          -         -    (1,363)      3,335     1,972 
 Transactions with owners 
   Share-based payments                        -         -          -         15        15 
   Dividends paid                              -         -          -      (201)     (201) 
 At 31 March 2020                            589    32,345      3,297     20,858    57,089 
                                        ========  ========  =========  =========  ======== 
 

In the prior year Interim Financial Statements, the opening equity was restated due to a change in accounting policy relating to IFRS16 Leases. This was subsequently noted as incorrect and was reversed at the year end. The impact is not material and therefore there is no restatement of prior year Interim opening reserves.

Notes to the Interim Financial Statements

For the six-month period to 30 September 2020

1 Basis of preparation

The unaudited condensed financial statements for the six months ended 30 September 2020 have been prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2020. The unaudited condensed financial information has been prepared using the same accounting policies and methods of computation used to prepare the Group's Annual Report & Accounts for the year ended 31 March 2020 that are described on pages 62 to 72 of that report which can be found on the Group's website at www.idsplc.com. The annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union.

New standards or interpretations not yet effective for the financial year ending 31 March 2021 are as follows: -

   --      IAS 1 - Presentation of Financial Instruments - amendments to the definition of material; 

-- IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - amendments to the definition of material;

   --      IFRS 3 - Business Combinations - amendments to clarify the definition of a business; 

-- IFRS 9, IAS 39 and IFRS 7 Financial Instruments - amendments to interest rate benchmark reform providing certain reliefs for hedge accounting.

The financial information for the six months ended 30 September 2020 is not reviewed by PricewaterhouseCoopers LLP and accordingly no opinion has been given. The comparative financial information for the year ended 31 March 2020 has been extracted from the Annual Report & Accounts 2020. The financial information contained in this interim report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006 and does not reflect all of the information contained in the Group's Annual Report & Accounts 2020. The annual financial statements for the year ended 31 March 2020, which were approved by the Board of Directors on 16 June 2020, received an unqualified audit report, did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 and have been filed with the Registrar of Companies.

To ensure that the Group's financial performance can be more easily benchmarked with its peer group, and our policies are aligned to market practise in the diagnostics sector, the amortisation costs related to capitalised development spend previously shown within cost of goods sold, have been reclassified to research and development expenses. This change does not impact the profit or net assets of the Group. The changes made are highlighted in the tables below:

 
 
 H1 2021                                        Before                       Development                        After 
                                      reclassification                 cost amortisation             reclassification 
                                                                        reclassification 
                                               GBP'000                           GBP'000                      GBP'000 
 Revenue                                        13,698                                                         13,698 
 Cost of sales                                 (9,447)                             1,009                      (8,438) 
                   -----------------------------------  --------------------------------  --------------------------- 
 Gross profit                                    4,251                             1,009                        5,260 
 Sales and 
  marketing                                    (4,081)                                                        (4,081) 
 Research and 
  development                                  (1,085)                           (1,009)                      (2,094) 
 General and 
  administrative                               (2,069)                                                        (2,069) 
                   -----------------------------------  --------------------------------  --------------------------- 
 Operating costs 
  pre-exceptional 
  items                                        (7,235)                           (1,009)                      (8,244) 
 Exceptional 
  items                                          (556)                                                          (556) 
                   -----------------------------------  --------------------------------  --------------------------- 
 Operating costs                               (7,791)                           (1,009)                      (8,800) 
 Loss from 
  operations                                   (3,540)                                                        (3,540) 
                   -----------------------------------  --------------------------------  --------------------------- 
 
 
 H1 2020                                          Before                      Development                      After 
                                        reclassification                             cost           reclassification 
                                                                             amortisation 
                                                                         reclassification 
                                                 GBP'000                          GBP'000                    GBP'000 
 Revenue                                          18,791                                                      18,791 
 Cost of sales                                  (10,380)                            1,006                    (9,374) 
                   -------------------------------------  -------------------------------  ------------------------- 
 Gross profit                                      8,411                            1,006                      9,417 
 Sales and 
  marketing                                      (4,403)                                                     (4,403) 
 Research and 
  development                                      (893)                          (1,006)                    (1,899) 
 General and 
  administrative                                 (2,473)                                                     (2,473) 
                   -------------------------------------  -------------------------------  ------------------------- 
 Operating costs 
  pre-exceptional 
  items                                          (7,769)                          (1,006)                    (8,775) 
 Exceptional                                           -                                                           - 
 items 
                   -------------------------------------  -------------------------------  ------------------------- 
 Operating costs                                 (7,769)                          (1,006)                    (8,775) 
 Profit from 
  operations                                         642                                                         642 
                   -------------------------------------  -------------------------------  ------------------------- 
 
 
 FY 2020                                              Before                      Development                         After 
                                            reclassification                             cost              reclassification 
                                                                                 amortisation 
                                                                             reclassification 
                                                     GBP'000                          GBP'000                       GBP'000 
 Revenue                                              39,347                                                         39,347 
 Cost of sales                                      (21,971)                            2,170                      (19,801) 
                   -----------------------------------------  -------------------------------  ---------------------------- 
 Gross profit                                         17,376                            2,170                        19,546 
 Sales and 
  marketing                                          (8,890)                                                        (8,890) 
 Research and 
  development                                        (1,926)                          (2,170)                       (4,096) 
 General and 
  administrative                                     (5,232)                                                        (5,232) 
                   -----------------------------------------  -------------------------------  ---------------------------- 
 Operating costs 
  pre-exceptional 
  items                                             (16,048)                          (2,170)                      (18,218) 
 Exceptional                                               -                                                              - 
 items 
                   -----------------------------------------  -------------------------------  ---------------------------- 
 Operating costs                                    (16,048)                          (2,170)                      (18,218) 
 Profit from 
  operations                                           1,328                                                          1,328 
                   -----------------------------------------  -------------------------------  ---------------------------- 
 

The change in accounting policy would have similarly impacted prior periods, with a decrease in Cost of Sales and an increase in Research and Development costs. The impact on FY19, FY18, and FY17 would have been GBP2,246,000, GBP2,020,000, and GBP1,865,000 respectively.

2 Revenue

An analysis of the Group's revenue split by the key product types is as follows:

 
 H1 FY21                           Recognised   Recognised     Total 
                                  on delivery    over time 
                                       GBP000       GBP000    GBP000 
------------------------------  -------------  -----------  -------- 
 
 25-OH vitamin D                        1,069            -     1,069 
 Speciality - Endo                      5,410            -     5,410 
 Speciality - AI                          805            -       805 
 Speciality - Others                      214            -       214 
 Instrument sales and service             388          311       699 
------------------------------  -------------  -----------  -------- 
 Total Automated                        7,886          311     8,197 
------------------------------  -------------  -----------  -------- 
 Automated revenue comprises: 
 Operating lease rental                     -        1,628     1,628 
 Reagent revenue                        6,569            -     6,569 
------------------------------  -------------  -----------  -------- 
 
 25-OH vitamin D                          249            -       249 
 Other speciality - IDS                 1,696            -     1,696 
 Other speciality - purchased             667            -       667 
 Diametra                                 999            -       999 
------------------------------  -------------  -----------  -------- 
 Total manual                           3,611            -     3,611 
 Technology                             1,872           18     1,890 
 Total revenue                         13,369          329    13,698 
------------------------------  -------------  -----------  -------- 
 
 
 H1 FY20                           Recognised   Recognised     Total 
                                  on delivery    over time 
                                       GBP000       GBP000    GBP000 
------------------------------  -------------  -----------  -------- 
 
 25-OH vitamin D                        2,325            -     2,325 
 Speciality - Endo                      7,059            -     7,059 
 Speciality - AI                          702            -       702 
 Speciality - Others                      169            -       169 
 Instrument sales and service             469          267       736 
------------------------------  -------------  -----------  -------- 
 Total Automated                       10,724          267    10,991 
------------------------------  -------------  -----------  -------- 
 Automated revenue comprises: 
 Operating lease rental                     -        1,601     1,601 
 Reagent revenue                        9,390            -     9,390 
------------------------------  -------------  -----------  -------- 
 
 25-OH vitamin D                          604            -       604 
 Other speciality - IDS                 2,446            -     2,446 
 Other speciality - purchased             872            -       872 
 Diametra                               1,816            -     1,816 
------------------------------  -------------  -----------  -------- 
 Total Manual                           5,738            -     5,738 
 Technology                             1,813          249     2,062 
 Total revenue                         18,275          516    18,791 
------------------------------  -------------  -----------  -------- 
 
 
 FY20                              Recognised   Recognised     Total 
                                  on delivery    over time 
                                       GBP000       GBP000    GBP000 
------------------------------  -------------  -----------  -------- 
 
 25-OH vitamin D                        4,822            -     4,822 
 Speciality - Endo                     14,083            -    14,083 
 Speciality - AI                        1,793            -     1,793 
 Speciality - Others                      489            -       489 
 Instrument sales and service           1,565          632     2,197 
------------------------------  -------------  -----------  -------- 
 Total Automated                       22,752          632    23,384 
------------------------------  -------------  -----------  -------- 
 Automated revenue comprises: 
 Operating lease rental                     -        3,178     3,178 
 Reagent revenue                       20,206            -    20,206 
------------------------------  -------------  -----------  -------- 
 
 25-OH vitamin D                          969            -       969 
 Other speciality - IDS                 4,979            -     4,979 
 Other speciality - purchased           1,658            -     1,658 
 Diametra                               3,770            -     3,770 
------------------------------  -------------  -----------  -------- 
 Total Manual                          11,376            -    11,376 
 Technology                             3,771          816     4,587 
 Total revenue                         37,899        1,448    39,347 
------------------------------  -------------  -----------  -------- 
 

Operating lease rental relates to contracts implicit in agreements for the placing of IDS analyser instruments with customers and the related sale of reagents and is estimated based on averages.

Contract assets

 
                                         H1 FY21     H1 FY20        FY20 
                                          GBP000      GBP000      GBP000 
---------------------  ------  ------                                     --- 
 Current contract assets relating to 
  automated reagent sales                          268         402        317 
------------------------------------------------  -----  ---------  --------- 
 
 

Contract liabilities

 
                                           H1 FY21     H1 FY20        FY20 
                                            GBP000      GBP000      GBP000 
-----------------------  ------  ------                                     --- 
 Current contract liabilities relating 
  to instrument sales                                175         166        209 
--------------------------------------------------  -----  ---------  --------- 
 
 

3 Segmental information

The Group applies IFRS 8 Operating Segments. IFRS 8 requires provision of segmental information for the Group on the basis of information reported internally to the chief operating decision-maker for decision-making purposes. The Group considers that the role of chief operating decision-maker is performed by the Board of Directors.

Analysis of revenue is prepared and monitored on a geographical basis due to the organisation of the sales team as well as by product type. IDS reports profit from operations for the three segments below. This is monitored by the chief operating decision-maker quarterly. All balance sheet and cash flow information received and reviewed by the Board of Directors is prepared at a Group level.

 
 H1 FY21                               Automated    Manual   Technology     Total 
                                          GBP000    GBP000       GBP000    GBP000 
------------------------------------  ----------  --------  -----------  -------- 
 
 Revenue                                   8,197     3,611        1,890    13,698 
 Cost of sales                           (4,648)   (2,668)      (1,122)   (8,438) 
------------------------------------  ----------  --------  -----------  -------- 
 Gross profit                              3,549       943          768     5,260 
 
 Sales and marketing                     (3,244)     (630)        (207)   (4,081) 
 Research and development                (2,046)        84        (132)   (2,094) 
 General and administrative 
  expenses                               (1,250)     (571)        (248)   (2,069) 
------------------------------------  ----------  --------  -----------  -------- 
 Operating costs pre-exceptional 
  items                                  (6,540)   (1,117)        (587)   (8,244) 
------------------------------------  ----------  --------  -----------  -------- 
 Adjusted EBIT                           (2,991)     (174)          181   (2,984) 
------------------------------------  ----------  --------  -----------  -------- 
 Exceptional items 
 Restructuring costs                                                        (556) 
------------------------------------  ----------  --------  -----------  -------- 
 Total exceptional items                                                    (556) 
------------------------------------  ----------  --------  -----------  -------- 
 EBIT                                                                     (3,540) 
 Finance income                                                                36 
 Finance costs                                                              (136) 
------------------------------------  ----------  --------  -----------  -------- 
 Loss before tax                                                          (3,640) 
------------------------------------  ----------  --------  -----------  -------- 
 
 Adjusted EBIT                           (2,991)     (174)          181   (2,984) 
 Add: depreciation and amortisation        2,086       117           31     2,234 
 Adjusted EBITDA                           (905)      (57)          212     (750) 
------------------------------------  ----------  --------  -----------  -------- 
 
 
 H1 FY20                                 Restated   Restated      Restated   Restated 
                                        Automated     Manual    Technology      Total 
                                           GBP000     GBP000        GBP000     GBP000 
------------------------------------  -----------  ---------  ------------  --------- 
 
 Revenue                                   10,991      5,738         2,062     18,791 
 Cost of sales                            (4,698)    (3,360)       (1,316)    (9,374) 
------------------------------------  -----------  ---------  ------------  --------- 
 Gross profit                               6,293      2,378           746      9,417 
 
 Sales and marketing                      (3,347)      (841)         (215)    (4,403) 
 Research and development                 (1,778)          -         (121)    (1,899) 
 General and administrative 
  expenses                                (1,502)      (732)         (239)    (2,473) 
------------------------------------  -----------  ---------  ------------  --------- 
 Operating costs pre-exceptional 
  items                                   (6,627)    (1,573)         (575)    (8,775) 
------------------------------------  -----------  ---------  ------------  --------- 
 Adjusted EBIT                              (334)        805           171        642 
------------------------------------  -----------  ---------  ------------  --------- 
 Exceptional items 
 Restructuring credit                                                               - 
------------------------------------  -----------  ---------  ------------  --------- 
 Total exceptional items                                                            - 
------------------------------------  -----------  ---------  ------------  --------- 
 EBIT                                                                             642 
 Finance income                                                                   108 
 Finance costs                                                                  (980) 
------------------------------------  -----------  ---------  ------------  --------- 
 Loss before tax                                                                (230) 
------------------------------------  -----------  ---------  ------------  --------- 
 
 Adjusted EBIT                              (334)        805           171        642 
 Add: depreciation and amortisation         1,946        239            30      2,215 
 Adjusted EBITDA                            1,612      1,044           201      2,857 
------------------------------------  -----------  ---------  ------------  --------- 
 
 
 FY20                                    Restated   Restated      Restated   Restated 
                                        Automated     Manual    Technology      Total 
                                           GBP000     GBP000        GBP000     GBP000 
------------------------------------  -----------  ---------  ------------  --------- 
 
 Revenue                                   23,384     11,376         4,587     39,347 
 Cost of sales                           (10,263)    (6,804)       (2,734)   (19,801) 
------------------------------------  -----------  ---------  ------------  --------- 
 Gross profit                              13,121      4,572         1,853     19,546 
 
 Sales and marketing                      (6,821)    (1,630)         (439)    (8,890) 
 Research and development                 (3,807)         26         (315)    (4,096) 
 General and administrative 
  expenses                                (3,220)    (1,476)         (536)    (5,232) 
------------------------------------  -----------  ---------  ------------  --------- 
 Operating costs pre-exceptional 
  items                                  (13,848)    (3,080)       (1,290)   (18,218) 
------------------------------------  -----------  ---------  ------------  --------- 
 Adjusted EBIT                              (727)      1,492           563      1,328 
------------------------------------  -----------  ---------  ------------  --------- 
 Exceptional items 
 Restructuring credit                                                               - 
------------------------------------  -----------  ---------  ------------  --------- 
 Total exceptional items                                                            - 
------------------------------------  -----------  ---------  ------------  --------- 
 EBIT                                                                           1,328 
 Finance income 
 Finance income pre-exceptional 
  items                                                                           891 
 Exceptional finance income                                                     1,226 
------------------------------------  -----------  ---------  ------------  --------- 
 Total finance income                                                           2,117 
------------------------------------  -----------  ---------  ------------  --------- 
 Finance costs                                                                  (191) 
------------------------------------  -----------  ---------  ------------  --------- 
 Profit before tax                                                              3,254 
------------------------------------  -----------  ---------  ------------  --------- 
 
 Adjusted EBIT                              (727)      1,492           563      1,328 
 Add: depreciation and amortisation         4,116        485           121      4,722 
 Adjusted EBITDA                            3,389      1,977           684      6,050 
------------------------------------  -----------  ---------  ------------  --------- 
 

Comparative segmental information has been impacted by the change in accounting policy relating to amortisation of capitalised research and development costs. Please refer to Note 1.

4 Exceptional items

The Group incurred the following exceptional items during the financial period:

 
                                            H1 FY21   H1 FY20      FY20 
                                             GBP000    GBP000    GBP000 
---------------------------  ----------------------  --------  -------- 
 Restructuring costs                            556         -         - 
 Total exceptional operating costs              556         -         - 
---------------------------------------------  ----  --------  -------- 
 
 

In H1 FY21, exceptional items related to redundancy costs relating to the impact of COVID-19.

In H1 FY20 and FY20, there were no exceptional operating costs, however in FY20 there was exceptional finance income of GBP1,226,000 relating to the liquidation of Immunodiagnostic Systems Nordic A/S.

5 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has dilutive potential ordinary shares relating to contingently issuable shares under the Group's share option scheme. At 30 September 2020, the performance criteria for the vesting of the awards under the option scheme had been met and consequently the shares in question are included in the diluted EPS calculation.

The calculations of earnings per share are based on the following profits and numbers of shares.

 
                                      6 Months      6 Months   Year ended 
                                         ended         ended     31 March 
                                   30 Sep 2020   30 Sep 2019         2020 
 
                                        GBP000        GBP000       GBP000 
 
 (Loss)/profit on ordinary 
  activities after tax                 (2,952)            16        3,348 
                                  ============  ============  =========== 
 
                                        Number        Number       Number 
 Weighted average no of shares: 
 For basic earnings per share       28,784,097    28,784,097   28,784,097 
 Effect of dilutive potential 
  ordinary shares: 
 -Share Options                         37,866        14,112       24,608 
 For diluted earnings per share     28,821,963    28,798,209   28,808,705 
                                  ============  ============  =========== 
 
 Basic (loss)/earnings per 
  share                                (10.3)p          0.1p        11.6p 
 Diluted (loss)/earnings per 
  share                                (10.2)p          0.1p        11.6p 
 
 
 (Loss)/profit on ordinary 
  activities after tax          (2,952)   16     3,348 
 Exceptional items after tax        489    -   (1,226) 
                               --------  ---  -------- 
 Adjusted (loss)/profit on 
  ordinary activities after 
  tax                           (2,463)   16     2,122 
                               --------  ---  -------- 
 
 
 Adjusted basic (loss)/earnings 
  per share                          (8.6)p   0.1p   7.4p 
 Adjusted diluted (loss)/earnings 
  per share                          (8.5)p   0.1p   7.4p 
 

6 Taxation

The estimated tax rate for FY21 of 19% (H1 FY20: 107%) has been applied to the profit before tax for the six months to 30 September 2020.

The Group's tax rate is in line with the mainstream UK Corporation tax rate of 19%, however it is substantially impacted by claims for R&D relief in certain territories and overseas taxation paid at higher rates than in the UK.

7 Provisions

 
 
                                                 Retirement/ 
                                                     Leavers                            Dilapidation 
                                                   Provision       Warranty Provision      Provision     Total 
                                                      GBP000                   GBP000         GBP000    GBP000 
 At 1 April 2020                                         438                       76            531     1,045 
  Foreign exchange gain                                   11                        1              -        12 
  Reassessment in period                                  29                        1              -        30 
                                              --------------  -----------------------  -------------  -------- 
 At 30 September 2020                                    478                       78            531     1,087 
                                              ==============  =======================  =============  ======== 
 
 At 1 April 2019                                         357                       46            489       892 
  Foreign exchange movement                               12                        1              -        13 
  Reassessment in period                                  26                        -              -        26 
                                              --------------  -----------------------  -------------  -------- 
 At 30 September 2019                                    395                       47            489       931 
                                              ==============  =======================  =============  ======== 
 
 At 1 April 2019                                         357                       46            489       892 
  Foreign exchange gain                                   10                        1              -        11 
  Reassessment in the period                              71                       29              -       100 
  Unwind of discount                                       -                        -             42        42 
                                              --------------  -----------------------  -------------  -------- 
 At 31 March 2020                                        438                       76            531     1,045 
                                              ==============  =======================  =============  ======== 
 
 At 30 September 2020 
 Included in current liabilities                           -                       78              -        78 
                 non-current liabilities                 478                        -            531     1,009 
                                              --------------  -----------------------  -------------  -------- 
                                                         478                       78            531     1,087 
                                              ==============  =======================  =============  ======== 
 
 At 30 September 2019 
 Included in current liabilities                           -                       47              -        47 
                 non-current liabilities                 395                        -            489       884 
                                              --------------  -----------------------  -------------  -------- 
                                                         395                       47            489       931 
                                              ==============  =======================  =============  ======== 
 
 At 31 March 2020 
 Included in current liabilities                           -                       76              -        76 
                 non-current liabilities                 438                        -            531       969 
                                              --------------  -----------------------  -------------  -------- 
                                                         438                       76            531     1,045 
                                              ==============  =======================  =============  ======== 
 
 

When employees leave Dia.Metra S.r.l, by law the company is required to pay to that employee an amount equal to one month's salary for each year they have worked at the Company. The scheme is Trattamento di Fine Rapporto ('TFR'). A provision for this obligation is recognised in the balance sheet, but there is considerable uncertainty over the timing of the settlement due to lack of forward visibility of employees leaving service. The present value of the potential liability to current employees as at 30 September 2020 is GBP478,000.

The warranty provision relates to warranties given for the first year of operation of IDS-iSYS systems. This is reassessed each year. It is expected that these costs will be incurred in line with normal warranty terms of one year from the placements of the instrument.

The dilapidations provision relates to one leased building in Boldon, UK. The discounted expected future cash flows to restore the remaining leased building amounted to GBP531,000 at the balance sheet date.

8 Share Capital

 
                                                              30 Sep 2020               30 Sep 2019      31 March 2020 
                                                                   GBP000                    GBP000             GBP000 
 Equity Shares 
 Authorised: 
 75,000,000 Ordinary Shares of GBP0.02 each at 
  30 September 2020, 31 March 2020 and 30 
  September 
  2019                                                              1,500                     1,500              1,500 
                                                 ========================  ========================  ================= 
 
 Share Capital 
 Allotted, called up and fully paid: 
 28,784,097 (30 September 2019: 28,784,097, 31 
  March 2020: 28,784,097) Ordinary shares of 2p 
  each (excluding own shares held)                                    576                       576                576 
 Own shares held of 2p each 666,078 (30 
  September 2019: 666,078, 31 March 2020: 
  666,078)                                                             13                        13                 13 
                                                                      589                       589                589 
                                                 ========================  ========================  ================= 
 
 Share Premium 
 Balance carried forward                                           32,345                    32,345             32,345 
                                                 ========================  ========================  ================= 
 

9 Financial assets and financial liabilities

The carrying value of the financial assets and liabilities are not materially different from their fair value.

10 Interim results

These results were approved by the Board of Directors on Friday 20 November 2020. Copies of this unaudited interim report will be available to the public from the Group's registered office and www.idsplc.com .

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END

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November 20, 2020 13:22 ET (18:22 GMT)

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