02:00 Mon 10 Aug 2020
Proteome Sciences - Interim Results
10 August 2020
("Proteome Sciences" or the "Company")
Interim results for the six months ended
Proteome Sciences announces its unaudited interim results for the six months ended
Financial highlights:
· Proteomics services revenues increased 71% to
· TMT® reagent sales and royalties down 8% to
· Total revenues increased 9% to
· Gross profit increased 11% to
· Costs increased 11% to
· Loss before tax was
Commenting on these results,
"We reported our first post-tax profit last year and saw this as the basis for further growth towards sustainable profitability. The first six months of 2020 have been extraordinary as the world confronts the ongoing COVID-19 pandemic and I am profoundly grateful to our dedicated staff and extended customer base for their unstinting support during these challenging times. Challenges during the period around laboratory access due to the COVID-19 lockdown had some negative impact on TMT® revenues, which declined marginally compared to the strong performance in H1 2019 prior to the launch of TMTpro™. However, we expect sales to show good growth in the second half and for the full year.
Our service business started the year with a strong order book and large bank of samples, allowing us to remain fully operational. Consequently, I am delighted to report 71% growth in service revenues during the period, further accelerating the progress made in 2019. Despite cancellation of all physical conferences and trade shows, we have maintained an aggressive programme of customer engagement and the number of quotes and orders for new business is running at double the value of the same period last year.
The increase in revenues was matched by a disproportionate increase in costs as we had to bring forward some TMTpro™ re-stocking in light of strong sales in the last quarter of 2019. Costs otherwise remained flat and the net impact is a similar loss before tax with the equivalent period last year.
We expect full year revenues to be similar to last year, with improved TMT® and TMTpro™ sales in the second half alongside strong demand for proteomic services in the second half as laboratory access for research and development activities is re-starting in many countries. Whilst there remains a degree of risk that a second wave of COVID-19 may yet require reinstatement of movement restrictions, we are well set to meet these challenges and continue to improve our financial performance through the full year."
For further information:
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Tel: +44 (0)20 7043 2116 |
Richard Dennis, Chief Commercial Officer |
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John Depasquale / Jeremy Porter (Corporate Finance) Tony Quirke (Sales) |
Tel: +44 (0) 20 3328 5656 |
About
The Company has its headquarters in London, UK, with laboratory facilities in Frankfurt, Germany.
Chief Executive Officer's Report
Following the good growth attained across the business in 2019, which led to our first operating profit, the outlook for 2020 was very positive. Despite the difficulties of operating a global sales operation during the coronavirus outbreak, we still managed to grow revenues in the first half of the year. We have been able to leverage strong relationships with our existing customers to secure new orders during the lockdown, and with only a moderate drop in TMT® sales at a time when many laboratories have remained closed for non-essential research, this is encouraging for the future. We have also seen a strong presence of TMT® and TMTpro™ usage in COVID-19 research, though we lack the required biological containment facilities to handle infectious samples ourselves. With positive growth in overall revenue and the receipt of the
Services
Recognised revenues from the proteomics services business increased 71% in the first half to
Overall, these metrics show the benefits of our focus on improving our sales cycle to speed up project execution and revenue generation. Inevitably, the lead times to placing and execution of orders has extended slightly during the lockdown, but we expect things to improve in the second half of the year. We continue to have strong orders for our TMTcalibrator™ blood and CSF biomarker discovery workflow with two major projects in neurodegeneration completed in the first half of the year, and further orders received across a range of different disease areas. We are also seeing good interest in our new workflows for immune-oncology and protein degradation therapies with both attracting orders from new customers.
Prior to the shut-down of global travel, we concluded a 2-week business development visit to California through which we gained three new orders. Subsequently, we have been using a mixture of videoconferencing and presentation at virtual trade shows to broaden further our outreach and customer base. As we do not expect there to be much opportunity to engage in physical meetings during the remainder of 2020, we are reviewing the mix of sales and marketing tools at our disposal to ensure we can continue to grow sustainable revenues.
TMT®
TMT® revenue of
To meet the strong uptake of TMTpro™ we have completed re-synthesis of the early tags made in smaller batch sizes during initial development. This work was completed ahead of schedule in the second quarter, contributing to a slight increase in operating costs, and we now have sufficient stocks of all 16 tags to meet the expected requirements of our licensee Thermo Scientific well into 2021. We also have good stock levels of all standard TMT® reagents.
We also saw that a number of early proteomics studies of SARS-Cov-2, the virus causing COVID-19 infection, used TMT® and TMTpro™, revealing the main sites of virus/host protein interactions and identifying blood biomarkers predicting severe disease, as well as potential drug targets and established drugs that could be re-purposed for treatment of the infection. Whilst we are unable to work with SARS-Cov-2 infected material directly, we are pursuing a number of academic collaborations based on our TMTpro™ plasma workflows and the Tryptophan Metabolite assay that uses TMT® for sample multiplexing as several metabolites including kynurenine have been reported as potential predictors of severe infection.
Other Licences
Developments of clinical stroke diagnostic tests by our licensees
Outlook
Over the last three years we have achieved good growth in our services revenues whilst restructuring the business to improve operating efficiency and manage costs. The outlook for our portfolio of TMT® and TMTpro™ tags remains positive as more academic and pharmaceutical laboratories are re-opening following relaxing of COVID-19 restrictions. Whilst we saw a small decline in revenues in the first half of the year, we expect revenues to be higher in the second half of the year, and anticipate modest growth in like-for-like sales for the full year.
Having carried a strong order book over into the first half of 2020, we are seeing significant growth of recognised proteomics services revenues and orders being placed, despite the challenges imposed by COVID-19. With over half of our revenues now coming from existing customers, we are clearly becoming established as preferred providers of proteomic services. In the current climate we consider these relationships as critical to our long-term success and we have dedicated more sales and marketing resources to continue to build our presence across multiple teams in each organisation. A review of our customer engagement channels in the current climate will be reflected later in the year with an enhanced website and greater visibility on professional media platforms.
Based on orders received to date and the steady number of requests for quotes relating to projects in the second half of 2020 we expect to demonstrate significant increases in both full year proteomics services revenues and order book value to carry into 2021. We expect this, combined with improved TMT® and TMTpro™ sales, will deliver total revenues similar to last year.
Interim Chief Executive Officer
Finance Director's Report
Revenues in the first half of
Costs of sales and administrative expenses increased by 11% to
The loss of before taxation of
Stefan Fuhrmann
Finance Director
7 August 2020
Consolidated income statement
For the six months ended 30 June 2020
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Note |
Six months ended 30 June 2020 (unaudited) £'000 |
Six months ended 30 June 2019 (unaudited) £'000 |
Continuing operations |
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Revenue |
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Licences, sales & services |
1,872 |
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1,726 |
Grant services |
27 |
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14 |
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Revenue- Total |
1,899 |
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1,740 |
Cost of sales |
(833) |
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(782) |
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|
|
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Gross profit |
1,066 |
|
958 |
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|
|
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Administrative expenses |
(1,382) |
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(1,207) |
|
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|
|
|
|
|
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Operating loss |
(316) |
|
(249) |
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Finance costs |
(168) |
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(161) |
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|
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|
|
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Loss before taxation |
(484) |
|
(410) |
Tax |
(30) |
|
(16) |
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Loss for the period |
(514) |
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(426) |
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Loss per share |
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Basic and diluted 2 |
(0.17p) |
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(0.14p) |
Consolidated statement of comprehensive income
For the six months ended 30 June 2020
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Six months ended 30 June 2020 (unaudited) £'000 |
Six months ended 30 June 2019 (unaudited) £'000 |
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Loss for the period |
(514) |
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(426) |
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Other comprehensive income for the period Exchange differences on translation of foreign operations
|
42 |
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11 |
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Total comprehensive expense for the period |
(472) |
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(415) |
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Consolidated balance sheet
As at
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30 June 2020 (unaudited) £'000 |
31 December 2019 (audited) £'000 |
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Non-current assets |
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Goodwill |
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4,218 |
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4,218 |
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Property, plant and equipment |
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68 |
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75 |
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Right-of-use asset |
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518 |
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581 |
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4,804 |
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4,874 |
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Current assets |
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Inventories |
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957 |
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871 |
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Trade and other receivables |
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567 |
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486 |
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Contract assets |
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233 |
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1,331 |
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Cash and cash equivalents |
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1,451 |
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799 |
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3,208 |
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3,487 |
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Total assets |
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8,012 |
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8,361 |
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Current liabilities |
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Trade and other payables |
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(711) |
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(738) |
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Contract liabilities |
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(16) |
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(26) |
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Borrowings |
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(10,430) |
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(10,262) |
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Lease Liabilities |
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(524) |
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(584) |
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(11,681) |
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(11,610) |
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Net current liabilities |
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(8,473) |
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(8,123) |
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Non-current liabilities |
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Provisions |
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Pension Provisions |
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(449) |
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(403) |
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(449) |
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(403) |
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Total liabilities |
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(12,130) |
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(12,013) |
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Net liabilities |
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(4,118) |
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(3,652) |
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Equity |
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Share capital |
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2,952 |
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2,952 |
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Share premium account |
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51,466 |
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51,466 |
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Share-based payment reserve |
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3,620 |
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3,615 |
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Merger reserve |
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10,755 |
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10,755 |
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Translation reserve |
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(66) |
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(109) |
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Retained loss |
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(72,845) |
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(72,331) |
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Total shareholders deficit |
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(4,118) |
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(3,652) |
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Consolidated cash flow statement
For the six months to
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Six months ended 30 June 2020 (unaudited) £'000 |
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Six months ended 30 June 2019 (unaudited) £'000 |
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Loss before tax |
(484) |
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(410) |
Adjustments for: |
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Net finance costs |
168 |
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161 |
Depreciation of property, plant and equipment and right of use assets |
82 |
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21 |
Share-based payment expense |
5 |
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22 |
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|
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|
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Operating cash flows before movements in working capital |
(229) |
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(206) |
Decrease/(increase) in inventories |
(86) |
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135 |
Decrease/(increase) in receivables |
1,016 |
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(1,147) |
(Decrease)/increase in payables |
(36) |
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1,111 |
Increase in provisions |
46 |
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15 |
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Cash generated from / (used in) operations |
711 |
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(92) |
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Tax refunded / (paid) |
(30) |
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(16) |
Net cash inflow / (outflow) from operating activities |
681 |
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(108) |
Cash flows from investing activities |
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Purchases of property, plant and equipment |
(6) |
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(46) |
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Net cash outflow from investing activities |
(6) |
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(46) |
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Financing activities |
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Lease payments |
(60) |
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Net cash outflow from financing activities |
(60) |
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- |
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Net increase / (decrease) in cash and cash equivalents |
615 |
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(154) |
Cash and cash equivalents at beginning of period |
799 |
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958 |
Effect of foreign exchange rate changes |
37 |
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31 |
Cash and cash equivalents at end of period |
1,451 |
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|
835 |
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Notes
For the six months to
1 Basis of preparation and accounting policies
These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the
The annual financial statements of
The directors have concluded that the Group has adequate resources to continue operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.
There have been no new standards adopted since the presentation of the financial statements 2019.
The Board of Directors approved this interim report on
2. Loss per share from continuing operations
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Six months ended 30 June 2020 (unaudited)
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Six months ended 30 June 2019 (unaudited)
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Loss per share |
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Loss for the purpose of basic loss per share being net loss attributable to equity holders of the parent (£'000) |
(514) |
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(426) |
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Number of shares |
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Weighted average number of ordinary shares for the purpose of basic loss per share |
295,182,056 |
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295,182,056 |
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Weighted average number of ordinary shares for the purpose of diluted loss per share |
295,182,056 |
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295,182,056 |
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3. Cautionary statement
This document contains certain forward-looking statements relating to
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