EKF Diagnostics Holdings plc

("EKF", the "Company" or the "Group")

 

Half-year Report

 

Strong half-year, positioning the Group for sustainable and diversified growth

Life Sciences investment in increased capacity progressing well

Year of transition into non-COVID related revenues

 

EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global diagnostics business, announces its unaudited interim results for the six months ended 30 June 2022.

 

Despite this being a year of transition, as the business pivots away from a busy COVID period, EKF has successfully maintained good momentum, recording a strong first half in line with management expectations and positioning the business for sustainable, diversified growth over the long term.

 

Financial highlights

·    Revenues of £37.5m (H1 2021: £38.6m)

-     74.8% up from pre-pandemic levels (H1 2019: £21.4m)

·    Revenue growth, excluding largely COVID-related activities in Contract Manufacturing and Laboratory Testing, of 11.5% in period

·    Adjusted EBITDA* of £9.7m (H1 2021: £12.8m)

-     73.9% up from pre-pandemic levels (H1 2019: £5.6m)

·    Gross profit of £17.7m (H1 2021: £18.5m) with GM% maintained at 47% (H1 2021: 48%)

·    Profit before tax of £4.1m (H1 2021: £11.4m)

·    Net cash generated from operations of £8.4m (H1 2021: £1.1m)

·    Cash and cash equivalents of £19.1m (30 June 2021: £20.8m) (31 December 2021: £20.3m)

* Earnings before interest, tax, depreciation and amortisation adjusted for exceptional items and share-based payments

 

Operational highlights

·    Business division revenues

-         Point-of-Care: up 9.7% to £13.8m (H1 2021: £12.5m)

-         Central Laboratory: stable at £6.3m (H1 2021: £6.3m), returned to growth in July

-         Life Sciences: doubled to £2.0m (H1 2021: £1.0m)

-         Contract Manufacturing: £8.6m (H1 2021: £17.5m) reflecting expected drop in COVID revenues

-     Laboratory Testing: £2.1m (H1 2021: nil, laboratory acquired in H2 2021)

-     Other: £4.7m (H1 2021: £1.2m) including £3.5m relating to cash received for US inventory

·    Life Sciences: Investment to bring increased fermentation capacity online from 2023 - customer onboarding processes are already underway with audits, validation batches and tech transfer ongoing

·    Laboratory Testing: new clinical toxicology testing service launched, further test portfolio launches in Q4 2022 and Q1 2023, and non-invasive prenatal test service with Yourgene Health to launch next month 

·    Implementation of reorganisation programme across the business to align resources with the expansion opportunities

·    Share Buyback programme completed successfully, 9m shares cancelled, offsetting dilution from shares issued in H2 2021 as consideration for laboratory testing business

 

Mike Salter, Chief Executive Officer of EKF, commented: "Whilst 2022 is a year of transition, positioning EKF for long-term sustainable and diversified growth, the strong first half delivery has been pleasing. This performance shows the strength and robustness of our core established business and provides the Board with confidence that the Group, as a whole, remains on track to deliver an adjusted EBITDA result in line with its expectations for the full year and is well positioned for the years ahead."

 

A copy of the investor presentation is available here: https://www.ekfdiagnostics.com/documents-reports.html

 

EKF Diagnostics will be hosting a live online presentation open to all investors on Tuesday 20 September at 4.30pm (BST), via the Investor Meet Company platform. Investors can sign up to Investor Meet Company for free and add to meet EKF Diagnostics via:

 

https://www.investormeetcompany.com/ekf-diagnostics-holdings-plc/register-investor

 

EKF Diagnostics Holdings plc		www.ekfdiagnostics.com
Mike Salter, CEO / Marc Davies, CFO		Tel: +44 (0)29 2071 0570
Singer Capital Markets (Nominated Adviser & Joint Broker)		Tel: +44 (0)20 7496 3000
Aubrey Powell / George Tzimas / Oliver Platts
Investec Bank plc (Joint Broker)		Tel: +44 (0)20 7597 4000
Gary Clarence / Daniel Adams / Ben Farrow
Walbrook PR (Media & Investor Relations)	Tel: +44 (0)20 7933 8780 or ekf@walbrookpr.com
Paul McManus / Lianne Applegarth	Mob: +44 (0)7980 541 893 / +44 (0)7584 391 303

 

BUSINESS REVIEW

 

We are delighted to announce such a positive first half performance for our core established business, and a strong overall performance that has delivered considerable growth compared to pre-pandemic levels. It also demonstrates our robustness in the face of significant commercial change due to the near total reduction after the first quarter of our COVID related activities.

 

Revenues for the six months ended 30 June 2022 were £37.5m (H1 2021: £38.6m) and adjusted EBITDA was £9.7m (H1 2021: £12.8m). Considering our core established business units, which excludes largely COVID-related revenue from Contract Manufacturing and Laboratory Testing, the Group delivered double-digit revenue growth compared to H1 2021. Compared to the performance in 2019 as a pre-pandemic benchmark, when no COVID related activities were recorded, total Group revenues are 74.8% up from 2019 levels (H1 2019: £21.4m) and adjusted EBITDA is 73.9% ahead (H1 2019: £5.6m).

 

It is clear that, despite this being a year of transition, EKF has successfully maintained good momentum, recording a strong first half in line with management expectations and positioning the business for long-term sustainable and diversified growth. We have strong foundations from which to execute on our mission to build a leading Global Diagnostics company, providing quality products and services to support the continued improvement in patient healthcare and outcomes.

     

EKF is also well placed to build on this success, as we enter our next phase of sustainable growth. The Board remains focused on delivering its strategy, primarily to:

 

1.    Drive organic growth from our stable and established Point-of-Care & Central Laboratory businesses, leveraging existing products and routes to markets, innovating and expanding into new territories;

2.    Invest in the highly-scalable Life Sciences business unit, through expansion plans for our fermentation capacity and capabilities which are led by customer demand and will accelerate organic growth; and

3.    Pivot Contract Manufacturing & Laboratory Testing to non-COVID activities and build revenues by broadening our high-value services offering.

 

We have made good progress in the above three areas and will cover them in more detail below.

 

Operations

 

1.    Point-of-Care & Central Laboratory

 

Our established Point-of-Care ("POC") and Central Laboratory divisions have returned to growth, with revenues now exceeding pre-COVID levels. These businesses remain the cornerstone of EKF, contributing 53.5% to Group revenues. They both supply a regular flow of high margin consumables providing a steady recurring revenue and are both profitable and cash generative enabling investment and further diversification of the Group.

 

POC has continued to experience steady growth post COVID, up 9.7% to £13.8m (H1 2021: £12.5m), as a result of growth in the existing customer base and new market initiatives. With increasing pressures on healthcare systems, including an ageing population and the growing incidence of chronic diseases, EKF is well placed to meet the rising demand for quality POC products that can be performed at home or in primary care settings.

 

Sales in the POC diabetes segment have seen good growth in the period, reaching £5.7m (H1 2021: £4.8m), an increase of 18.3%. Biosen sales are up 31.0% driven by strong growth in EMEA and APAC. Sales of Quo-Test and Quo-Lab are up 8.2% and 7.4% respectively.

 

We have seen good growth across our POC hematology portfolio, with sales up 10.5% to £6.5m (H1 2021: £5.9m) as screening anaemia programmes have continued to return to more normalised levels following the COVID pandemic. Hemocontrol, a point-of-care hemoglobin analyser, delivered significant growth with sales up 45.2% to £3.1m (H1 2021: £2.1m) due to the return of global testing programmes post pandemic.

 

In the period we enhanced our POC analyser portfolio by launching EKF Link, a digital connectivity solution for the secure management of POC analysers and associated data on one centralised platform. This solution significantly increases the target market for our analyser products where connectivity is becoming increasingly attractive if not essential. The development and launch of EKF Link was driven by customer demand and designed in partnership with hospital POC managers to ensure the software meets their specific needs. Integrated with hospital and laboratory IT systems, EKF Link enables real-time remote management of data, such as patient test results, allowing physicians and other healthcare professionals to easily evaluate patients' data securely and accurately from a remote setting. 

 

In Central Laboratory, we remain one of the clear market leaders for the supply of β-HB (Beta-Hydroxybutyrate), a reagent used to detect ketones for patients suffering from diabetic ketoacidosis, as well as many other clinical applications. Our β-HB reagent is used by over 1,100 hospitals in the USA. Total β-HB sales for H1 2022 were marginally impacted by temporary supply delays at period end, but these have since been resolved and sales for the 7 months to the end of July 2022 have shown a 9.9% improvement on the same period year-on-year. Glycated Albumin sales were up 138.9% with first half sales already in excess of 2021 full year performance.

 

In the first six months Central Laboratory was flat at £6.3m (H1 2021: £6.3m), but as described above β-HB sales have immediately caught up post period end, putting it back on track for its expected growth performance year-on-year.

 

2.    Life Sciences

 

Strong organic growth from our specialist enzyme fermentation business saw revenues doubling to £2.0m (H1 2021: £1.0m). This growth was driven by increased demand from our large corporate customers utilising our existing contract fermentation services to create and deliver high quality enzymes and biomolecules for use in a variety of industrial applications.

 

EKF has established a dedicated team of highly skilled fermentation project specialists who are uniquely positioned to deliver customer requirements and expand these long-term strategic partnerships. The strong customer relationships established by this unit over the years has led to customer-led interest in increased volume services. EKF's current fermentation suites in Elkhart utilise 10, 100, 250 and 1,600 litre (L) vessels, and as already reported, we are investing around $10m to increase this capacity at our new South Bend site and also our existing site in Elkhart, to meet existing customer needs and attract new customers with higher volume requirements.

 

Progress in the construction and installation of the six new vessels in South Bend - comprising 65, 300, 1,500, 3,000, 10,000 and 14,500L units - is going well and remains on track to be completed by the year end. The 1,500 and 3,000L vessels have been delivered to the South Bend site and will be installed and validated next month, with the larger 10,000L and 14,500L vessels scheduled to be delivered in Q4 2022. A number of potential customers interested in our larger volume vessels have already begun the process of internal audit, validation and tech transfer to allow them to utilise this capacity when it comes on stream. We would expect to produce pilot batches in early 2023 moving to commercial scale production throughout 2023.

 

The global speciality enzymes market is experiencing rapid growth, driven by the increased application of enzymes in the diagnostic industry, as well as the food and industrial sectors, and as a result we are seeing increasing demand for precision fermentation services. We are confident in the growth trajectory of this business, which is closely aligned with the strong ongoing customer demand which is driving our investment decision. We have a robust contract pipeline and expect to see revenues build in 2023 and continue this upward trajectory into 2024.

 

3.    Contract Manufacturing & Laboratory Testing

 

As previously highlighted, the main challenges in our year of transition are in Contract Manufacturing & Laboratory Testing, as we seek to shift our operations to non-COVID revenues. The first six months certainly reflect this change, as we still experienced a strong Q1 as COVID-related demand from our diagnostic and healthcare customers continued for our end-to-end contract manufacturing services across all of our sites in the US, Germany and UK. However, as expected, there was a sharp drop in COVID related revenues in our Contract Manufacturing division after the first quarter, which saw revenues for the half reduce substantially to £8.6m from the higher levels seen during the pandemic when COVID testing was more widespread (H1 2022: £17.5m). This Q1 weighted demand for COVID-related services was also seen in Laboratory Testing, which delivered H1 sales of £2.1m (H1 2021: £nil, laboratory acquired in H2 2021).

 

In anticipation of this decline, during the period we began restructuring our Contract Manufacturing business, reducing costs and focusing our capabilities outside of COVID. Further costs associated with the restructuring are expected in the second half of the financial year. We continue to execute our strategy to pivot away from COVID products and services, utilising our capabilities and capacity to focus on higher value contract manufacturing in the supply of products and services for alternative applications. We expect Contract Manufacturing revenues to build in the later part of 2022 and into 2023 as new opportunities come online. 

 

In Laboratory Testing, our efforts remain focussed on utilising the expertise of Advanced Diagnostic Laboratory LLC ("ADL Health"), which specialises in high complexity testing, to bring new tests online and expand our CLIA laboratory testing portfolio beyond COVID assays. To this end, the team has recently launched a new clinical toxicology method geared towards medication adherence and developed an analysis of cannabis potency, with the first samples being processed this month. Further tests in oncology, wound health and women's health are on track to launch later in the year and into early 2023. At the beginning of the year, we signed a strategic partnership agreement with Yourgene Health plc ("Yourgene") to offer a non-invasive prenatal test ("NIPT") service from our accredited US laboratory. We expect this service to launch in October 2022 and we believe this is an exciting growth opportunity.

 

Our challenge with the Laboratory Testing division is to ensure that investment into these areas quickly adds new revenue streams to the Group, and to return this business to profitable growth before the year end based on a wider portfolio of non-COVID testing services.

 

Operational efficiencies

 

As well as the restructuring of the Contract Manufacturing operations during the first half, post-period end the new management team has implemented a reorganisation programme across the business to align the cost base to match the expansion opportunities being seen across the Group, and to ensure a smooth transition into a sustainable growth business unrelated to the external pandemic. Like many businesses, we have experienced supply-chain availability challenges and input-costs inflationary pressure. To mitigate this, we increased the focus on forward-looking sourcing requirements and have responsibly adjusted our prices to customers.

 

In the first half, we began implementing new initiatives to drive efficiency and integration across the global EKF Group, as well as bolstering our current working practices. This included vertically integrating our supply chain, the commencement of an IT standardisation project to consolidate global systems and utilise new technologies, and the enhancement of financial analysis, controls and the sharing of resources throughout the Group.

 

Regulatory and ESG strategy

 

We believe we are well positioned to meet the new and additional requirements under In Vitro Diagnostic Regulation (IVDR). Our experienced regulatory team is already connected with our Notified Body, who is aware of our plan for the number of products subject to the conformity assessment requirements of IVDR, and we have built in a safety buffer to ensure we are prepared.

 

We have also appointed a dedicated senior ESG resource to lead the development of our Environmental and Sustainability strategy. This investment is a sign of how EKF recognises the importance of analysing ESG performance going forward to help investors gain a more holistic view of our business, better understand how we manage ESG risks and incorporate sustainability as a core value.

 

 

Russia and Ukraine

 

EKF owns 60% of O.O.O. EKF Diagnostika, a distribution subsidiary located in Moscow which sells EKF POC products and other third-party products into Russia and neighbouring states. As a supplier of medical products with no dual use it would not be appropriate to end supplies to the region, and sales have continued in the first half of the year. We are working with the staff and management of this business to keep it as stable as possible, but it is becoming more challenging as we comply with the current sanction guidance. At present there are controls over the payment of foreign dividends in Russia hence the cash disclosed in Russia (30 June 2022: £2.6m) is currently not accessible. Financial details of our business in Russia are shown in the segmental analysis in Note 3.

 

We also have a distributor in Ukraine with whom we have worked for some years, who we have continued to support during this time of substantial challenge.

 

Outlook

 

Our Point-of-Care & Central Laboratory business units are expected to continue to grow steadily and contribute a solid base of stable revenues and earnings. The investment in our Life Sciences business, and its increased fermentation capacity, is expected to generate further significant revenue growth from next year onwards. This expectation is underpinned by the advanced nature of our work with new and existing customers keen to utilise this capacity as it becomes available. The transition of Contract Manufacturing and Laboratory Services into non-COVID-related revenues is our key challenge. We have already identified a number of opportunities that are advancing, and a wider portfolio of tests are beginning to come online, which we forecast will start to deliver revenues in the second half of the year.

 

Whilst 2022 is a year of transition, positioning EKF for long-term sustainable and diversified growth, the strong first half delivery has been pleasing. This performance shows the strength and robustness of our core established business and provides the Board with confidence that the Group, as a whole, remains on track to deliver an adjusted EBITDA result in line with its expectations for the full year and is well positioned for the years ahead.

 

 

Mike Salter

Chief Executive Officer

 

20 September 2022

 

Financial review

 

Revenue

 

Revenue for the period was £37.5m (H1 2021: £38.6m).

 

Revenue by Business Unit:

 

	Unaudited 6 months ended 30 June 2022 £'000		Unaudited 6 months ended 30 June 2021 £'000		+/- %
Point-of-Care	13,756		12,534		9.7%
Central Laboratory	6,295		6,325		(0.5%)
Life Sciences	2,024		1,033		95.9%
Contract Manufacturing	8,570		17,469		(50.9%)
Laboratory Testing	2,141		-		n/a
Other*	4,685		1,198		291.1%
Total revenue	37,471		38,559		(2.8%)

Considering our core established business units, which excludes largely COVID-related revenue including that from Contract Manufacturing and Laboratory Services, the Group delivered growth of 11.5% compared with the equivalent period in 2021.

 

* Other revenue relating to US inventory payment, shipping and handling recharges, repairs and other sundries

 

Revenue by Geographical Segment:

 

	Unaudited 6 months ended 30 June 2022 £'000		Unaudited 6 months ended 30 June 2021 £'000		+/- %
Germany	13,582		14,542		(6.6%)
USA	20,925		18,156		15.3%
Russia	2,037		1,384		47.2%
UK	925		4,477		(79.3%)
Total revenue	37,471		38,559		(2.8%)

 

Geographic regions showing a decline is primarily due to the reduction in COVID-related Contracted Manufacturing activity. The 2022 amount for USA includes the £3.5m inventory payment.

 

Gross profit

 

Gross profit was £17.7m (H1 2021: £18.5m). The gross profit margin was 47% (H1 2021: 48%). The gross profit has reduced mainly as a result of the transition to COVID-related products and services.

 

Administrative expenses

 

In H1 2022, administration expenses increased to £14.5m (H1 2021: £7.0m), representing 38.6% of revenue for the period (H1 2021: 18.2%, FY 2021: 21.6%). The increase is largely due to a number of non-recurring events. In H1 2022, a charge of £1.2m was recorded in relation to the $5.5m (£4.4m) cash payment received in May 2022 with regard to US inventory. The total adjusted revenue and EBITDA impact of this transaction is £3.5m and £1.2m, respectively.

 

In addition, exceptional costs in relation to the transition and restructure of certain operations in the US, UK and Germany of £1.7m are recorded in administration expenses in H1 2022. Finally, administrative expenses in H1 2021 benefited from a net write back of £1.4m in share-based payments (H1 2022: charge of £0.5m) stemming from the termination of the previous cash settled share-based incentive scheme. The 2022 charge relates to the replacement scheme which was described in the 2021 Annual Report.

 

To aid understanding, administrative expenses in each period are made up as follows:

 

	Unaudited 6 months ended 30 June 2022		Unaudited 6 months ended 30 June 2021		Audited Year ended 31 December 2021
Non-exceptional administration expenditure before R & D capitalisation and share-based payments	13,076		8,960		19,511
Effect of share-based payments	517		(1,392)		(1,238)
Less capitalised R & D	(802)		(317)		(659)
Effect of exceptional items	1,682		(234)		95
Total administrative expenses	14,473		7,017		17,709

 

The charge for depreciation of fixed assets and for the amortisation of intangibles is £3.4m (H1 2021: £2.8m).

                                      

 

Operating profit and adjusted earnings before interest tax and depreciation

 

The Group generated an operating profit of £4.1m (H1 2021: £11.4m). We continue to consider that adjusted EBITDA gives a more meaningful measure of performance which for H1 2022 was £9.7m (H1 2021: £12.8m).

 

Adjusted EBITDA excludes a charge for share-based payments of £0.5m (H1 2021: credit of £1.4m) and exceptional charges of £1.7m (H1 2021: profit of £0.2m). The exceptional charge relates mainly to transition and restructure costs of certain operations in the US, UK and Germany including provisions against inventory and the impairment of certain lease assets where the property is no longer required. The reduction in operating profit and adjusted EBITDA relates to the transition to a post-COVID business.

 

Finance costs

 

Finance costs are £0.01m (H1 2021: £0.16m). The charge has reduced because of lower charges relating to deferred consideration.

 

Tax

 

There is a tax charge of £1.7m (H1 2021: £2.2m). The decrease largely reflects the decrease in profit, offset partially by an increased deferred tax rate.

 

Earnings per share

 

Basic earnings per share has decreased to 0.48p (H1 2021: 1.99p). Diluted earnings per share are 0.48p (H1 2021: 1.99p), dilutive effects having largely ended.

 

Balance sheet

 

Fixed assets

 

We have capitalised £2.3m (H1 2021: £1.5m) of property, plant and equipment. The expenditure includes continuing work on adding capacity for Life Sciences in the US. Further expenditure in Life Sciences, and on new facilities in Germany, is planned for the second half of the year. 

 

Intangible assets

 

The value of intangible fixed assets is £43.4m (31 December 2021: £41.9m). The increase is mainly the result of exchange rate movements. An amount of £0.8m (H1 2021: £0.6m) has been capitalised during the first half.

 

Investments

 

During the period additional investments were made in the ordinary share capital of Renalytix plc ("Renalytix") (£0.38m) and Verici Dx plc ("Verici") (£2.5m). The majority of our holding in Verici was subsequently transferred to shareholders by way of a dividend in specie at a value of £1,455,232 (15.994p per Verici share, equivalent to 0.31988p per EKF share). This represented a discount from the prevailing market price of 27.3% reflecting the lock-in period applied to the shares. Following this dividend the Group's investments in Renalytix and Verici represented holdings of 1.53% and 0.42% respectively. The investments are held at fair value which has been calculated based on the market value of the shares which at 30 June 2022 was £1.05 (31 December 2021: £6.20) per share for Renalytix and £0.23 (31 December 2021: £0.53) per share for Verici. The resulting unrealised loss during H1 2022 of £7.2m is shown as a movement in Other comprehensive income.

 

Deferred consideration

 

The deferred consideration at 30 June 2022 relates to the acquisition in September 2021 of Advanced Diagnostic Laboratory LLC. At 30 June 2021 the deferred consideration related to a contingent share-based payment to the former owner of EKF-Diagnostic GmbH, which was resolved in H2 2021.

 

Cash and working capital

 

The gross cash position at 30 June 2022 was £19.1m (31 Dec 2021: £20.3m), and the Group had cash net of bank borrowings of £18.9m (31 Dec 2021: £19.6m).

 

Cash generated from operations in H1 2022 is £8.4m (H1 2021: £1.1m). Trade debtors have decreased as a result of timing effects in the run up to period end. Major cash outflows have included £3.9m on purchase of own shares and £2.9m for the purchase of investments, as well as cash payments totalling £0.4m required in connection with the acquisition of ADL.

 

Cash and cash equivalents held by the Russian subsidiary at 30 June 2022 totalled £2.6m (31 Dec 2021: £1.3m). These deposits are subject to regulatory restrictions, and therefore may not be available for general use by the other entities within the Group.

 

Capital structure

 

We successfully completed the acquisition of 9,000,000 of our own ordinary shares for a total consideration of £3.9m. These shares have been cancelled. We received further authority to buy back up to 69,589,585 ordinary shares at the Company's AGM on 18 May 2022 and we will make further purchases if considered appropriate.

 

Dividend

 

At the Annual General Meeting in May 2022, shareholders approved the payment of a dividend of 1.2p per ordinary share, to be paid on 1 December 2022 to shareholders on the register at close of business on 4 November 2022. As this declaration is irrevocable, the value of £5.459m is shown as a liability with the debit shown in the statement of changes in equity.

 

 

Marc Davies

Chief Financial Officer

 

20 September 2022

CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2022					Unaudited 6 months ended 30 June 2021
			Unaudited 6 months ended 30 June 2022				Audited Year ended 31 December 2021
	Notes		£'000		£'000		£'000
Continuing operations
Revenue	3		37,471		38,559		81,836
Cost of sales			(19,727)		(20,019)		(42,470)
Gross profit			17,744		18,540		39,366
Administrative expenses			(14,473)		(7,017)		(17,709)
Other income			880		34		90
Operating profit			4,151		11,557		21,747
Depreciation and amortisation			(3,361)		(2,830)		(5,885)
Share-based payments			(517)		1,392		1,238
Exceptional items	4		(1,682)		234		(95)
EBITDA before exceptional items and share-based payments			9,711		12,761		26,489
Finance income			57		22		45
Finance costs			(68)		(155)		(357)
Profit before income tax			4,140		11,424		21,435
Income tax charge	5		(1,717)		(2,237)		(5,277)
Profit for the period			2,423		9,187		16,158
Profit attributable to:
Owners of the parent			2,213		9,069		15,851
Non-controlling interest			210		118		307
			2,423		9,187		16,158

 

Earnings per ordinary share attributable to the owners of the parent during the period	6
				Pence		Pence		Pence
Basic				0.48		1.99		3.47
Diluted				0.48		1.98		3.44

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHS ENDED 30 JUNE 2022
			Unaudited		Unaudited		Audited
			6 months ended 30 June 2022		6 months ended 30 June 2021		Year ended 31 December 2021
			£'000		£'000		£'000
Profit for the period			2,423		9,187		16,158
Other comprehensive income/(expense):
Items that will not be reclassified to profit or loss Changes in fair value of equity instruments at fair value through other comprehensive income (net of tax)			(5,307)		4,040		(321)
Items that may be subsequently reclassified to profit or loss Currency translation differences			6,520		(1,334)		(1,226)
Other comprehensive income/(loss) (net of tax)			1,213		2,706		(1,547)
Total comprehensive income for the period			3,636		11,893		14,611
Attributable to:
Owners of the parent			3,024		11,779		14,315
Non-controlling interests			612		114		296
Total comprehensive income for the period			3,636		11,893		14,611

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
		Unaudited as at 30 June 2022			Unaudited as at 30 June 2021						Audited as at 31 December 2021
	Notes	£'000			£'000						£'000
Assets
Non-current assets
Property, plant and equipment	7	18,170			12,957						15,991
Right-of-use assets	7	1,495			890						1,875
Intangible assets	8	43,387			35,134						41,894
Investments		1,566			12,818						7,789
Deferred tax assets		23			14						15
Total non-current assets		64,641			61,813						67,564
Current Assets
Inventories		12,969			9,766						13,238
Trade and other receivables		12,236			16,107						13,428
Corporation tax receivable		408			-						548
Cash and cash equivalents		19,138			20,784						20,341
Total current assets		44,751			46,657						47,555
Total assets		109,392			108,470						115,119
Equity attributable to owners of the parent
Share capital		4,549			4,550						4,639
Share premium		7,375			200						7,375
Other reserve		(184)			9,394						5,033
Foreign currency reserves		8,931			2,698						2,813
Retained earnings		64,775			67,580						74,264
		85,446			84,422						94,124
Non-controlling interest		1,230			435						618
Total equity		86,676			84,857						94,742
Liabilities
Non-current liabilities
Borrowings		44			310						431
Lease liabilities		793			475						1,095
Deferred consideration		173			-						170
Deferred tax liability		3,795			4,586						5,031
Total non-current liabilities		4,805			5,371						6,727
Current liabilities
Trade and other payables		14,148			13,152						9,078
Lease liabilities		902			456						838
Deferred consideration		72			3,033						465
Current income tax liabilities		2,611			1,512						3,004
Borrowings		178			89						265
Total current liabilities		17,911			18,242						13,650
Total liabilities		22,716			23,613						20,377
Total equity and liabilities		109,392			108,470						115,119
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHS ENDED 30 JUNE 2022
			Unaudited 6 months ended 30 June 2022						Unaudited 6 months ended 30 June 2021						Audited Year to 31 December 2021
			£'000						£'000						£'000
Cash flow from operating activities
Profit before income tax			4,140						11,424						21,435
Adjustments for
- Warranty claim			-						(251)						(285)
- Restructuring exceptional cost			1,682						-						-
- Depreciation			1,505						919						2,041
- Amortisation and impairment charges			1,856						1,911						3,844
- Deferred consideration (FV adjust)			-						132						285
- Foreign Exchange			-						(40)						61
- Bad debt written down			-						-						58
- (Profit)/loss on disposal of assets			19						(9)						(13)
- Share-based payments			517						(1,392)						(6,586)
- Net finance costs			11						1						26
Changes in working capital
- Inventories			(693)						(1,450)						(4,601)
- Trade and other receivables			1,698						(2,960)						(3,274)
- Trade and other payables			(323)						(5,126)						1,217
Cash generated by operations			10,412						3,159						14,208
Interest paid			(39)						(11)						(36)
Income tax paid			(1,945)						(2,019)						(3,934)
Net cash generated by operating activities			8,428						1,129						10,238
Cash flow from investing activities
Purchase of investments			(2,930)						-						-
Purchase of property, plant and equipment (PPE)			(2,167)						(1,342)						(4,335)
Purchase of intangibles			(819)						(623)						(1,314)
Acquisition of subsidiaries			(403)						-						84
Proceeds from sale of PPE			6						14						43
Interest received			57						22						45
Net cash used in investing activities			(6,256)						(1,929)						(5,477)
Cash flow from financing activities
Dividend			-						-						(5,103)
Purchase of own shares			(3,896)						-						-
Repayment of borrowings			(525)						(89)						(178)
Principal lease payments			(551)						(257)						(643)
Dividends paid to non-controlling interests			-						(231)						(231)
Net cash used in financing activities			(4,972)						(577)						(6,155)
Net decrease in cash and cash equivalents			(2,800)						(1,377)						(1,394)
Cash and cash equivalents at beginning of period			20,341						21,913						21,913
Exchange gains on cash and cash equivalents			1,597						248						(178)
Cash and cash equivalents at end of period			19,138						20,784						20,341

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 30 JUNE 2022
	Share Capital	Share Premium	Other Reserve	Foreign Currency Reserve	Retained earnings	Total	Non-controlling interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2021	4,550	200	5,354	4,028	63,516	77,648	552	78,200
Comprehensive income/(expense)
Profit for the period	-	-	-	-	9,069	9,069	118	9,187
Other comprehensive income/(expense)
Changes in fair value of equity instruments at fair value through other comprehensive income/(expense)	-	-	4,040	-	-	4,040	-	4,040
Currency translation differences	-	-	-	(1,330)	-	(1,330)	(4)	(1,334)
Total comprehensive income/(expense)	-	-	4,040	(1,330)	9,069	11,779	114	11,893
Transactions with owners
Dividends to non-controlling interest	-	-	-	-	-	-	(231)	(231)
Dividend declared but not paid	-	-	-	-	(5,005)	(5,005)	-	(5,005)
Total contributions by and distributions to owners	-	-	-	-	(5,005)	(5,005)	(231)	(5,236)
At 30 June 2021	4,550	200	9,394	2,698	67,580	84,422	435	84,857
Comprehensive income/(expense)
Profit for the period	-	-	-	-	6,782	6,782	189	6,971
Other comprehensive income/(expense)
Changes in fair value of equity instruments at fair value through other comprehensive income/(expense)	-	-	(4,361)	-	-	(4.361)	-	(4,361)
Currency translation differences	-	-	-	115	-	115	(7)	108
Total comprehensive income/(expense)	-	-	(4,361)	115	6,782	2,536	182	2,718
Transactions with owners
Issue of ordinary shares as consideration for a business combination, net of transaction costs	89	7,175	-	-	-	7,264	-	7,264
Dividend to owners	-	-	-	-	(98)	(98)	-	(98)
Dividends to non-controlling interest	-	-	-	-	-	-	1	1
Total contributions by and distributions to owners	89	7,175	-	-	(98)	7,166	1	7,167
At 31 December 2021	4,639	7,375	5,033	2,813	74,264	94,124	618	94,742
Comprehensive income
Profit for the period	-	-	-	-	2,213	2,213	210	2,423
Other comprehensive income/(expense)
Changes in fair value of equity instruments at fair value through other comprehensive income/(expense)	-	-	(5,307)	-	-	(5,307)	-	(5,307)
Currency translation differences	-	-	-	6,118	-	6,118	402	6,520
Total comprehensive income/(expense)	-	-	(5,307)	6,118	2,213	3,024	612	3,636
Transactions with owners
Acquisition of own shares	(90)	-	90	-	(3,896)	(3,896)	-	(3,896)
Dividends to owners	-	-	-	-	(7,806)	(7,806)	-	(7,806)
Dividends to non-controlling interest	-	-	-	-	-	-	-	-
Total contributions by and distributions to owners	(90)	-	90	-	(11,702)	(11,702)	-	(11,702)
At 30 June 2022	4,549	7,375	(184)	8,931	64,775	85,446	1,230	86,676