Preliminary results for the year ended 30 June 2017

Bioventix plc (BVXP) announces its audited results for the year ended 30 June 2017.

 

Bioventix plc (BVXP), a UK company specialising in the development and commercial supply of high-affinity monoclonal antibodies for applications in clinical diagnostics, announces its audited results for the year ended 30 June 2017.

To download this report as a PDF file click here.

Highlights:

• Revenue up 31% to £7.2 million
• Profit before tax up 37% to £5.7 million
• Cash up £0.8 million to £6.1 million
• Second interim dividend of 31p per share (2016: 26p)
• Special dividend of 40p per share

 

Business review

We are pleased to report another set of excellent results for the financial year ended 30 June 2017. Most significantly, revenues for the year of £7.2 million (2015/16: £5.5 million) were ahead of expectations and up 31% on the previous year. This revenue increase, when coupled to a modest increase in costs has resulted in increased profits after tax of £4.9 million, 40% up on the 2015/16 figure of £3.5 million. Despite increased dividend distribution, cash balances during the year increased by £0.8 million to £6.2 million.

Currently, our most significant revenue stream comes from the vitamin D antibody called vitD3.5H10. This antibody is used by a number of small, medium and large diagnostic companies around the world for use in vitamin D deficiency testing. Sales of vitD3.5H10 increased by 24% to £2.75 million during the year. This surpassed our expectations based on customer feedback during the year. Our expectation was that, whilst test volumes are increasing globally, price pressure (i.e. $/test prices achieved) would balance the increase in volume leading to a relatively flat total market in US Dollars. This feedback set our expectations for royalties received after 30 June 2017 (but relating to the reporting period). Actual royalties received were in excess of these expectations.

Our prudent belief is that the vitamin D market will plateau in the near future. Nevertheless, we anticipate a modest further increase in vitamin D antibody sales over the next year as a limited number of smaller customers bring new vitamin D products to the market.

We reported in May that our troponin (heart attack diagnostic) partner, Siemens Healthineers, released a new test outside the US market that helps facilitate a faster diagnosis of patients presenting with chest pain in an A&E setting. The rate at which this new test will be adopted by Siemens customers in hospitals in the EU, Asia and elsewhere outside the US is unfortunately not something of which we have detailed knowledge. Whilst it is clear that a quicker test will be of benefit to patients, clinicians and hospital budget holders, it is also clear that there is likely to be an education period during which clinicians become comfortable with a significant change in diagnostic practices that can result in non MI (i.e. patients not having a heart attack) being released from A&E much earlier. We will develop a better understanding of this matter during 2018.

The revenues resulting from the success of the Siemens troponin project will be important in replacing approximately £1 million of NT proBNP sales that will be lost from the 2017/18 accounts due to the termination of a specific technology license.

Many of the established “core” antibodies also enjoyed increased sales in the year. Quantitatively, these were:

• testosterone: approximately £600k(+12%);
• T3: approximately £500k(+33%);
• drug antibodies: approximately £500k(+50%);
• estradiol: approximately £300k(+30%);
• progesterone: approximately £200k(+51%).

 

This healthy increase in these core antibodies that are sold to a number of customers in many countries does not have a single explanation over and above the 5 10% increase in the global diagnostics industry that is reported by third party analysts. The drug testing antibody portfolio also features a handful of antibodies to different drugs used by different customers for different applications (e.g. EtG for alcohol testing, THC for cannabis testing). The increase in sales within this group has been accompanied by a significant increase in physical antibody sales in milligrams.

 

Future developments

Our shipments of physical antibody to China continued to increase. Some sales are made directly but the majority are made through five appointed distributors. The emergence of new Chinese diagnostic companies continues at a high rate and is a reflection of the embryonic stage of development of this industry in China. Technical expertise at these customers is variable but we do now see many examples of customers who are able to identify the benefit of our excellent antibodies if used correctly. We remain cautiously optimistic that these continued physical antibody sales will result in royalty streams into the future.

As mentioned above, the commercial development of the new troponin project at Siemens will have a significant influence on Bioventix sales next year and the years beyond. Whilst there are no antibodies in the future pipeline that are near troponin in potential value, modest contributions towards revenue growth are anticipated to come from androstenedione in the financial year 2018/19 and T4 (thyroxine) in the years following androstenedione.

Also in the future pipeline, we have four contract R&D projects where antibodies have already been created and despatched to contract partners for evaluation within their own R&D departments. These projects are in the fields of cancer, thyroid diagnostics, viral diagnostics and a certain vitamin/deficiency. They are all of modest potential value but if technically successful, capable of contributing towards revenues into the future.

On a longer term perspective, we continue to work with our partners in Norway on the secretoneurin (CardiNor & heart diagnostics) and amyloid projects (Pre Diagnostics & dementia). We have made exciting antibodies to contribute towards the scientific development of these projects and we look forward to developing the science of these long term projects over the coming years. It is our intention to seek additional long term projects of this kind with early stage research groups where we believe there to be compatibility with our skills and objectives.

Our revenues continue to be dominated by US dollars and Euros. We have commented in recent reports on the effect of post Brexit referendum exchange rates on our revenues in the absence of any hedging mechanisms. The last half year to be subjected to pre referendum exchange rates was 2H.2015 and so these effects have largely receded into the past and will not affect like for like comparisons going forward. We have no current plans to institute any hedging mechanisms and therefore any future changes in exchange rates, up or down will impact revenues accordingly.

Within the field of antibodies, technology changes relatively slowly as new antibody technologies are validated and used. Such technologies include rabbit monoclonal antibodies and novel “synthetic” antibodies. For example, we are aware that rabbit monoclonal antibody technology is established at some customers and this could have resulted in lost opportunities for our sheep monoclonal approach. However, we believe that having established our antibodies in customer products over the last ten years or so leaves our core business relatively secure due to the significant barriers to changing an antibody that works well in a diagnostic test.

The composition of the Bioventix team has remained stable over the year facilitating excellent performance and know how retention. This total head count of 13 full time equivalents is expected to remain largely unchanged as this adequately serves our manufacturing and research needs.

The continued outstanding performance of the Company in a globally competitive market for antibodies is very satisfying. Our sheep monoclonal antibody technology continually delivers high performance antibodies to our customers. However, the operation of the antibody technology is made possible by the efforts of our expert staff and we would like to thank them for their remarkable achievements over the last year.

 

Dividend policy

The healthy performance of the business during the year has resulted in increased cash balances (increased to £6.2 million from £5.4 million) despite increased dividend distribution during the year. Over previous years, the Board has followed a cautious dividend policy that embraces continuity and it is the general intention of the Board to continue with this policy into the future. For the current year, the Board is pleased to announce a second interim dividend of 31 pence per share which, when added to the first interim dividend of 20 pence per share makes a total of 51 pence per share for the current year.

Our current view is that a cash balance of approximately £5 million is sufficient to facilitate operational and strategic agility with respect to possible corporate or technological opportunities that could arise in the foreseeable future. On this occasion, we have decided to distribute some surplus cash that is in excess of anticipated needs and accordingly, we are pleased to announce a special dividend of 40 pence per share.

Accordingly dividends totalling 71 pence per share will be paid. The shares will be marked ex dividend on 26 October 2017 and the dividend will be paid on 10 November 2017 to shareholders on the register at close of business on 27 October 2017.

 

Conclusion

We are delighted to be able to report such positive news for the current year. For the financial year 2017/18, our challenge will be to make up for the approximately £1 million of lost sales mentioned above with revenues from the newly launched Siemens troponin project and modest growth from additional vitamin D antibody sales and royalties. Beyond that, growth in the period 2018/2020 will be linked to our troponin project and the success of Siemens in their product launches around the world. We continue our research activities as we look to seed additional projects that will germinate in the period 2020/2030 creating additional shareholder value.

For further information please contact:

 

Bioventix plc Peter Harrison	Chief Executive Officer	Tel: 01252 728 001
finnCap Ltd Geoff Nash/Simon Hicks Stephen Norcross	Corporate Finance Corporate Broking	Tel: 020 7220 0500

  About Bioventix plc:

 Bioventix (www.bioventix.com) specialises in the development and commercial supply of high-affinity monoclonal antibodies with a primary focus on their application in clinical diagnostics, such as in automated immunoassays used in blood testing. The antibodies created at Bioventix are generated in sheep and are of particular benefit where the target is present at low concentration and where conventional monoclonal or polyclonal antibodies have failed to produce a suitable reagent. Bioventix currently offers a portfolio of antibodies to customers for both commercial use and R&D purposes, for the diagnosis or monitoring of a broad range of conditions, including heart disease, cancer, fertility, thyroid function and drug abuse. Bioventix currently supplies antibody products and services to the majority of multinational clinical diagnostics companies. Bioventix is based in Farnham, UK and its shares are traded on AIM under the symbol BVXP.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2017

 

			2017	2016
			£	£
Turnover			7,245,862	5,517,217
Cost of sales			(494,880)	(494,880)
Gross profit			6,750,982	5,022,337
Administrative expenses			(998,797)	(839,233)
Share option charge			(67,005)	(53,225)
Difference on foreign exchange			5,747	75,512
Research & development tax credit adjustment			25,335	–
Operating profit			5,716,262	4,205,391
Interest receivable and similar income			55,578	13,694
Interest payable and expenses			–	(164)
Profit before tax			5,771,840	4,218,921
Tax on profit			(849,551)	(724,493)
Profit for the financial year			4,922,289	3,494,428
There were no recognised gains and losses for 2017 or 2016 other than those included in the statement of comprehensive income
	Earnings per share
			2017	2016
	Basic		96.36p	69.18p
	Diluted		94.70p	67.95p

 

 

 

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2017

 

			2017		2016
			£		£
Fixed assets
Tangible assets			449,312		467,087
Investments			195,560		43,330
			644,872		510,417
Current assets
Stocks		226,174		198,933
Debtors: amounts falling due within one year		3,342,692		2,685,475
Cash at bank and in hand		6,166,940		5,380,405
		9,735,806		8,264,813
Creditors: amounts falling due within one year		(219,944)		(549,908)
Net current assets			9,515,862		7,714,905
Total assets less current liabilities			10,160,734		8,225,322
Provisions for liabilities
Deferred tax		(16,114)		(17,949)
			(16,114)		(17,949)
Net assets			10,144,620		8,207,373
Capital and reserves
Called up share capital			256,934		252,547
Share premium account			395,108		78,426
Capital redemption reserve			1,231		1,231
Profit and loss account			9,491,347		7,875,169
			10,144,620		8,207,373

 

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2017

 

	Called up share capital	Share premium account	Capital redemption reserve	Profit and loss account	Total equity
	£	£	£	£	£
At 1 July 2016	252,547	78,426	1,231	7,875,169	8,207,373
Comprehensive income for the year
Profit for the year	–	–	–	4,922,289	4,922,289
Other comprehensive income for the year	–	–	–	–	–
Total comprehensive income for the year	–	–	–	4,922,289	4,922,289
Dividends: Equity capital	–	–	–	(3,373,116)	(3,373,116)
Shares issued during the year	4,387	316,682	–	–	321,069
Share option charge	–	–	–	67,005	67,005
Total transactions with owners	4,387	316,682	–	(3,306,111)	(2,985,042)
At 30 June 2017	256,934	395,108	1,231	9,491,347	10,144,620

 

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2016

 

	Called up share capital	Share premium account	Capital redemption reserve	Profit and loss account	Total equity
	£	£	£	£	£
At 1 July 2015	252,547	78,426	1,231	6,251,921	6,584,125
Comprehensive income for the year
Profit for the year	–	–	–	3,494,428	3,494,428
Other comprehensive income for the year	–	–	–	–	–
Total comprehensive income for the year	–	–	–	3,494,428	3,494,428
Dividends: Equity capital	–	–	–	(1,924,405)	(1,924,405)
Share option charge	–	–	–	53,225	53,225
Total transactions with owners	–	–	–	(1,871,180)	(1,871,180)
At 30 June 2016	252,547	78,426	1,231	7,875,169	8,207,373

 

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2017 

				2017	2016
				£	£
Cash flows from operating activities
Profit for the financial year				4,922,289	3,494,428
Adjustments for:
Depreciation of tangible assets				39,479	41,729
Interest paid				–	164
Interest received				(55,578)	(13,694)
Taxation charge				849,551	724,493
(Increase) in stocks				(27,240)	(5,963)
(Increase) in debtors				(621,581)	(594,901)
Increase in creditors				78,840	19,558
Corporation tax (paid)				(1,265,505)	(494,039)
Other tax movements				(30,323)	–
Net cash generated from operating activities				3,889,932	3,171,775
Cash flows from investing activities
Purchase of tangible fixed assets				(21,703)	(21,012)
Purchase of unlisted and other investments				(152,230)	(43,330)
Interest received				55,578	13,694
Share option charge				67,005	53,225
Net cash from investing activities				(51,350)	2,577

 

Cash flows from financing activities
Issue of ordinary shares	321,069	–
Dividends paid	(3,373,116)	(1,924,405)
Interest paid	–	(164)
Net cash used in financing activities	(3,052,047)	(1,924,569)
Net increase in cash and cash equivalents	786,535	1,249,783
Cash and cash equivalents at beginning of year	5,380,405	4,130,622
Cash and cash equivalents at the end of year	6,166,940	5,380,405
Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	6,166,940	5,380,405
	6,166,940	5,380,405