EKF Diagnostics Holdings plc

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

 

Half-year Report

 

EKF Diagnostics Holdings plc (AIM: EKF), the AIM-listed global diagnostics business, announces its unaudited interim results for the six months ended 30 June 2023, a period of continued growth in Point-of-Care and good progress in the Life Sciences fermentation capacity expansion.

 

Trading in the first half of 2023 ("H1 2023") was in line with Board expectations, and revised guidance for the full year performance was provided in the 12 September 2023 Trading Update.

 

Financial highlights (from continuing operations)

·    Revenue from continuing operations of £26.9m (H1 2022: £37.5m)

-     Revenue growth in continuing operations, excluding largely COVID-related activities in Contract Manufacturing and Laboratory Testing including the effect in 2022 of the US inventory payment, of 6.8%

·    Adjusted EBITDA* of £4.4m (H1 2022: £9.7m)

·    Gross profit of £11.8m (H1 2022: £17.7m) with GM% marginally improved to 44.0% (H1 2022: 43.3%)

·    Loss before tax of £0.03m (H1 2022: profit of £4.1m)

·    Net cash generated from operations of £2.5m (H1 2022: £8.4m)

·    Cash and cash equivalents of £9.2m (30 June 2022: £19.1m) (31 December 2022: £11.6m)

-     reflecting investment in South Bend enzyme fermentation facility

-     of which £2.4m (30 June 2022: £2.6m, 31 Dec 2022: £2.4m) is held by EKF's Russian subsidiary and subject to regulatory restrictions.

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

 

Operational highlights

·    Business division revenues:

-         Point-of-Care: up 10.2% to £16.6m (H1 2022: £15.1m)

-         Life Sciences:  excluding COVID-revenues up 14.5% to £7.5m (H1 2022: £6.5m)

-     Other: £1.3m (H1 2022: £5.0m, which include £3.5m relating to cash received for US inventory)

·    Quality Management Audits completed at new fermentation facility in South Bend, with all fermenting units on site

·    First customer order received for new South Bend facility, with official site opening planned for 25 October 2023

·    Additional cost reduction and operational efficiency measures to further benefit FY 2024 performance

·    Board changes: Julian Baines, Executive Chair, remaining in role on a longer-term basis and Steve Young appointed as CFO in September 2023 after an orderly handover

 

Julian Baines, Executive Chair of EKF, commented: "Looking forward our core business is in a very strong position with continued growth momentum seen in our Point-of-Care division and in sales of β-HB. With the capacity expansion at our South Bend facility nearing completion, and having already received our first purchase order we look forward to delivering strong growth in enzyme fermentation revenues in 2024."

 

Copies of the interim results and associated investor presentation are available here:

https://www.ekfdiagnostics.com/documents-reports.html

 

EKF Diagnostics will be hosting a live online presentation open to all existing and potential investors on Tuesday 26 September at 5.30pm (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

 

Investors who already follow EKF on the Investor Meet Company platform will automatically be invited.

 

A recording of the presentation, a PDF of the slides used, and responses to the Q&A session will be available on the Investor Meet Company platform afterwards.

 

 

EKF Diagnostics Holdings plc		www.ekfdiagnostics.com
Julian Baines, Executive Chair / Stephen Young, CFO		via Walbrook PR
Singer Capital Markets (Nominated Adviser & Broker)		Tel: +44 (0)20 7496 3000
Aubrey Powell / Oliver Platts
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

 

The persons responsible for arranging the release of this announcement
on behalf of the Company are Julian Baines, Executive Chair, and Stephen Young, CFO.

 

About EKF Diagnostics Holdings plc (www.ekfdiagnostics.com)

 

EKF is an AIM-listed global diagnostics business focussed on:

 

·    Point-of-Care analysers in the key areas of Hematology and Diabetes, as well as Central Laboratory products including clinical chemistry reagents, analysers and centrifuges

 

·    Life Sciences services provide specialist manufacture of enzymes and custom products for use in diagnostic, food and industrial applications, as well as other higher value Contract Manufacturing services

 

EKF has headquarters in Penarth (near Cardiff) and operates five manufacturing sites across the US and Germany, selling into over 120 countries world-wide.

 

 

 

 

BUSINESS REVIEW

 

Despite 2023 remaining a transitional year for EKF, we are very pleased with the strong performance delivered by our core established business in the first half of the year. In particular, our Point-of-Care division has delivered double digit organic growth with growth recorded across our Diabetes and Hematology ranges. Our Life Sciences business has also benefitted from a 27% year-on-year increase in sales of Beta-Hydroxybutyrate (β-HB) and remains an opportunity for significant growth once new fermentation capacity comes online.

 

Revenues for the six months ended 30 June 2023 were £26.9m (H1 2022: £37.5m) and adjusted EBITDA was £4.4m (H1 2022: £9.7m). However, growth in our continuing operations, excluding largely COVID-related activities in Contract Manufacturing and Laboratory Testing, was 6.8% to £24.9m (H1 2022: £23.3m).

 

OPERATIONAL OVERVIEW

 

The strong first half performance from both Point-of-Care ("POC") and the Life Sciences division can be seen below once the impact on the prior year comparison of historical COVID-related revenues is separated out.

 

Divisional revenues £ millions	H1 2023	H1 2022	+/- % Yr-on-Yr
Point-of-Care (POC)	16.6	15.1	+9.9%
Life Sciences	8.5	15.3	-44.4%
Life Sciences: β-HB and Fermentation sales	7.5	6.6	+13.6%
Life Sciences: other COVID-related revenues	1.0	8.7	- 88.5%
Other*	1.8	7.1†	-74.6%
Total Group Revenues	26.9	37.5	-28.3%
Total Group Revenues (excluding all COVID-related revenues)	24.9	23.3	+6.8%

 

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

† Includes £3.5m relating to US inventory receipt

 

Point-of-Care

 

Point-of-Care (POC)

Providing a portfolio of Point-of-Care analysers and consumables, particularly for use in the area of Hematology and Diabetes, for use in hospital and research laboratories, doctors' offices, blood banks and for in-field anaemia screening programmes. EKF has an estimated 80,000 hemoglobin, hematocrit, HbA1c, glucose and lactate analysers in regular use across more than 100 countries. Also includes Central Laboratory products including clinical chemistry reagents, analysers and centrifuges.

 

We are delighted that the Point-of-Care division continues to deliver steady growth and sales growth of just over 10% reflecting an increase in product sales across our Diabetes and Hematology ranges to £16.6m (H1 2022: £15.1m). Revenues from this division contributed 63.1% of total revenues and continues to offer EKF a solid foundation with the majority of sales representing steady recurring revenue from high margin consumables.

 

Our POC hematology product portfolio demonstrated good growth in the first half recording sales of £7.21m, an increase of 11.4% year-on-year (H1 2022: £5.68m). We have continued to benefit from the growth in anaemia screening programmes post-pandemic and our stand-out performer in the first half was the DiaSpect Tm, a hand-held hemoglobin analyzer, which saw H1 sales increase by 44% to £3.21m (H1 2022: £2.23m). Sales in Hemocontrol, our point-of-care hemoglobin analyser, were £2.90m (H1 2022: £3.10m) after showing a significant uplift from H1 2021 (£2.13m sales) and sales for other hematology products such as HemataSTAT and Ultracrit remained broadly flat.

 

Our diabetes product range delivered sales growth of 6.9% to £6.07m (H1 2022: £5.68m). The biggest contributor to sales in this range is our Biosen series of glucose analyzers, a familiar name in laboratories and diabetes clinics round the world. In H1 2022 we recorded sales of £2.70m (H1 2022: £2.85m). Revenues from our HbA1c analyzer product lines grew during the period: Quo-Lab sales were up 15.7% to £1.92m (H1 2022: £1.66m), and sales of Quo-Test were up 24.0% to £1.45m (H1 2022: £1.16m).

 

During the period we also derived our first revenues from our EKF Link product, a digital connectivity solution for the secure management of POC analysers and associated data on one centralised platform. 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. 

 

H1 2023 has seen the best revenue performance to date from our Point-of-Care Division and we are delighted to see that this strong performance has continued into the third quarter, as the high-level of demand for reagent-free hemoglobin and HbA1c analyzers continues.

 

This division is also expected to benefit from a number of initiatives that will improve productivity, margins and our competitive advantage. The automation process for the manufacture of disposable cuvettes for the DiaSpect Tm is being consolidated into our own manufacturing site in Barleben, Germany, from a third-party producer. In addition,  the manufacturing automation of our Hemocontrol single-pack cuvette at Barleben will be completed and online by the end of the year. Not only will this have a positive impact on margins, but also positions EKF as the only company offering single-pack cuvettes, giving us an advantage in emerging markets where wastage is a problem.

 

The regulatory team at EKF continues to work towards meeting the additional requirements under the new In Vitro Diagnostic Regulation (IVDR) and other legislation.

 

Life Sciences

 

Life Sciences

Providing specialist manufacture of enzymes and custom products for use in diagnostic, food and industrial applications, as well as other higher value Contract Manufacturing services. Also included the production of β-HB, a reagent used to identify patients suffering from diabetic ketoacidosis.

 

Our Life Sciences division delivered revenues of £8.5m, contributing 31.6% of total revenues. The year-on-year comparative for 2022 (H1 2022: £15.3m) includes £8.7m of COVID-related revenues from Contract Manufacturing, however focussing solely on the on-going β-HB and enzyme fermentation sales, Life Sciences produced 14.5% organic growth, driven by strong β-HB sales.

 

We remain one of the clear market leaders for the supply of β-HB, a reagent used to detect ketones for patients suffering from diabetic ketoacidosis, as well as many other clinical applications. β-HB sales for H1 2023 were up 27.3% to £6.31m (H1 2022: £4.96m).

 

Our specialist enzyme fermentation business recorded revenues of £1.23m (H1 2022: £1.63m) from our existing site in Elkhart, with continued demand from our large corporate customers to create and deliver high quality enzymes and biomolecules for use in a variety of industrial applications.

 

As outlined in our recent Trading Update, good progress is being made to complete the increased fermentation capacity at the South Bend facility in Indiana. All of the new fermenting units are on site and in the process of installation, validation and verification. We have successfully completed ISO 9001:2015 and ISO 13485:2016 Quality Management Audits at our sites and we expect to see a steady build-up of revenues from this new capacity during FY 2024. We expect to host a ribbon cutting ceremony for the official opening of the new site on 25 October 2023.

 

We are very pleased to announce receipt of our first purchase order for enzyme manufacturing services for our new facility and this will contribute limited revenues in Q4 FY 2023 and, as these scale-up, will cornerstone the substantial revenue growth we expect to see next year from this new capacity.

 

Operational efficiencies and continued cost control

 

We continue to expect that improvements in adjusted EBITDA margin will be seen in the second half. We also recognise that there are further cost savings and efficiency measures that can be implemented, and these will benefit FY 2024. We expect to see FY 2024 margins benefit further from the ramp-up in higher margin enzyme fermentation revenues within Life Sciences as utilisation of our additional capacity builds.

 

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. We continue to provide essential medical supplies to the region, and whilst sales have continued in the first half of the year, the number of products that we can supply into the region has reduced in line with current sanctions.

 

Cash held in Russia totalled £2.39m at the period end. Restrictions remain in place regarding the payment of foreign dividends in Russia and so this cash remains partly inaccessible. We have been able to arrange for limited dividends to be paid over in July and August, however there can be no assurance that this will be able to continue. The Board continues to explore options available to realise the value tied up in Russia.

 

Board Changes

 

Post-period end we announced the appointment of Steve Young as CFO, who has been working as a consultant over the summer to ensure an orderly handover from his predecessor. Steve is an experienced FD and CFO with a strong working knowledge of how AIM companies operate. I worked closely with Steve at BBI Holdings plc for a number of years and am delighted to have him on board at EKF.

 

I have also confirmed to the Board my increased commitment as Executive Chairman and I have a singular focus to ensure we are on track to meet or exceed revised guidance and to deliver the significant long-term growth prospects that I am confident our Life Sciences division offers to shareholders.

 

Outlook

 

In our recent guidance update we confirmed that for the full year ending 31 December 2023 we expect to deliver revenues of around £53m and adjusted EBITDA in the region of £10m.

 

Looking forward our core business is in a very strong position, with continued growth momentum seen in our Point-of-Care division and in sales of β-HB. With the capacity expansion at our South Bend facility nearing completion, and already having received our first purchase order and we look forward to delivering strong growth in enzyme fermentation revenues in 2024.

 

Increased utilisation of our additional capacity at South Bend is key to our future growth. My colleagues and I are determined to ensure we succeed in delivering this and the Board thanks the wider team for its diligent  commitment to our expansion plans.  With strong engagement from current and prospective customers to underpin increasing utilisation over time, our confidence in the longer-term, significant growth prospects for EKF remains high.

 

Julian Baines

Executive Chair

 

26 September 2023

Financial review

 

In March 2023, all of the share capital of Advanced Diagnostic Laboratory LLC was sold to certain members of its management for a consideration consisting of 1,200,000 EKF ordinary shares which were returned to EKF. These shares were valued at £343,800 and are held in treasury. Costs of the transaction were £107,000. In February 2023, the UK manufacturing operations, which had largely serviced UK COVID-related customers were closed down, resulting in a small number of redundancies.

 

Revenue

 

Revenue for the period was £26.8m (H1 2022: £37.5m).

 

Revenue by Business Unit:

 

	Unaudited 6 months ended 30 June 2023 £'000		Unaudited 6 months ended 30 June 2022 £'000		+/- %
Point-of-Care	16,627		15,093		10.2%
Life Sciences	8,511		15,244		(44.2%)
Other*	1,734		7,134		(78.2%)
Total revenue	26,872		37,471		(28.3%)

 

Considering our core established business units, which excludes largely COVID-related revenue including that from Contract Manufacturing and Laboratory Services totalling £2.0m in 2023 (H1 2022: £14.7m), the Group delivered growth of 6.8% compared with the equivalent period in 2022.

 

* 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 2023 £'000		Unaudited 6 months ended 30 June 2022 £'000		+/- %
Continuing business
Germany	11,014		13,583		(18.9%)
USA	13,376		20,925		(36.1%)
Russia	1,690		2,037		(17.0%)
UK	792		926		(14.5%)
Total revenue	26,872		37,471		(28.3%)

 

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. The Group's Russian subsidiary, which is 60% owned by the Group, is consolidated in full in accordance with accounting standards. The interest of the minority shareholders is included as a separate item in the Consolidated Income statement.

 

Gross profit

 

Gross profit was £11.8m (H1 2022: £17.7m). The gross profit margin was 44.0% (H1 2022: 43.3%). The gross profit has increased marginally mainly as a result of the mix of products and services.

 

Administrative expenses

 

In H1 2023, administration expenses (excluding exceptionals) reduced to £10.9m (H1 2022: £12.8m), representing 40.7% of revenue for the period (H1 2022: 34.1%, FY 2022: 34.8%). The increase is largely due to the reduced revenue. The Boards expects that cost savings and efficiency measures will be implemented in the second half which will benefit FY 2024.

 

The charge for depreciation of fixed assets and for the amortisation of intangibles is £3.3m (H1 2022: £3.4m).

                                      

 

Operating profit and adjusted earnings before interest tax and depreciation

 

The Group generated an operating loss of £0.07m (H1 2022: profit of £4.1m). We continue to consider that adjusted EBITDA gives a more meaningful measure of performance which for H1 2023 was £4.4m (H1 2022: £9.7m).

 

In H1 2023 adjusted EBITDA excludes a charge for share-based payments of £nil (H1 2022: charge of £0.5m) and exceptional charges of £1.2m (H1 2022: charge of £1.7m). The exceptional charge relates mainly to transition and restructure costs of certain operations in the US 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, in particular in the US and German regions relates to lower revenues associated with the end of the COVID-19 pandemic, and increased cost inflation.

 

Finance income

 

Net finance income is £0.04m (H1 2022: £0.01m). The income has increased because of higher interest income on funds held in Russia.

 

Tax

 

There is a tax charge of £0.1m (H1 2022: £1.7m). The decrease largely reflects the decrease in profit.

 

Earnings per share

 

Basic earnings per share from continuing operations has decreased to nil (H1 2022: 0.48p). There is no dilutive effect from the remaining share options, which have now lapsed.

 

Balance sheet

 

Fixed assets

 

We have capitalised £3.4m (H1 2022: £2.3m) of property, plant and equipment. The expenditure includes continuing work on adding capacity for Life Sciences in the US. Further expenditure in Life Sciences to complete the new facility in South Bend is planned for the second half of the year.

 

Intangible assets

 

The value of intangible fixed assets is £31.2m (31 December 2022: £33.8m). The decrease is mainly the result of exchange rate movements. An amount of £0.1m (H1 2022: £0.8m) has been capitalised during the first half.

 

Investments

 

Investments are held at fair value which has been calculated based on the market value of the shares which at 30 June 2023 was £1.1125 (31 December 2022: £0.725) per share for Renalytix and £0.1175 (31 December 2022: £0.125) per share for Verici Dx. The majority of the Group's shares in Verici were transferred to EKF shareholders in 2022 through a dividend in specie. In July 2023 the remaining Renalytix shares were sold for a consideration of £1.33m.

 

Deferred consideration

 

The deferred consideration at 30 June 2022 related to the acquisition of Advanced Diagnostic Laboratory LLC. (ADL). The remaining deferred consideration was cancelled as part of the disposal of ADL earlier this year.

 

Cash and working capital

 

The gross cash position at 30 June 2023 was £9.2m (31 Dec 2022: £11.6m), and the Group had cash net of bank borrowings of £9.1m (31 Dec 2022: £11.4m).

 

Cash generated from operations in H1 2023 is £2.5m (H1 2022: £8.4m). Trade debtors have increased as a result of timing effects in the run-up to period end.

 

Cash and cash equivalents held by the Russian subsidiary at 30 June 2023 totalled £2.4m (31 Dec 2022: £2.4m). These deposits are subject to regulatory restrictions, and therefore may not be available for general use by the other entities within the Group.

 

In July 2023, we disposed of our remaining shareholding in Renalytix plc for a consideration of £1.33m.

 

In March 2023 the Company agreed a loan facility of £3.0m. At 30 June 2023 this facility had not been utilised..  In addition the Group expects to finalise a further £3m undrawn facility from HSBC from late September 2023. The strength of the Group's balance sheet and the cash and loan resources available to it, aligned to the continuing performance of the business gives the Directors confidence that the business can continue to meet its obligations as they fall due, even under our worst-case scenarios, for at least the next 12 months.

 

 

Capital structure

 

1,200,000 ordinary shares were returned to the Company in April 2023 by the acquirer of ADL, at a value of £348,000. These shares are currently held in treasury. We have maintained shareholder authority to buy back shares, however we currently have no plans to make any further purchases.

 

Dividend

 

At the Annual General Meeting in May 2023, shareholders approved the payment of a dividend of 1.2p per ordinary share, to be paid on 1 December 2023 to shareholders on the register at close of business on 3 November 2023. As this declaration is irrevocable, the value of £5.445m is shown as a liability with the debit shown in the statement of changes in equity.

 

 

 

Stephen Young

Chief Financial Officer

 

26 September 2023

 

 

CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2023					Unaudited 6 months ended 30 June 2022
			Unaudited 6 months ended 30 June 2023				Audited Year ended 31 December 2022
	Notes		£'000		£'000		£'000
Continuing operations
Revenue	3		26,872		37,471		66,635
Cost of sales			(14,855)		(19,727)		(35,823)
Exceptional items - other charged to cost of sales			(196)		(1,499)		(6,774)
Gross profit			11,821		16,245		24,038
Administrative expenses			(10,939)		(12,791)		(23,177)
Exceptional items - impairment of assets			(671)		(183)		(10,384)
Exceptional items - other			(341)		-		(367)
Other income			63		880		919
Operating (loss)/profit			(67)		4,151		(8,971)
Depreciation and amortisation			(3,274)		(3,361)		(6,658)
Share-based payments			-		(517)		308
Exceptional items	4		(1,209)		(1,682)		(17,525)
EBITDA before exceptional items and share-based payments			4,416		9,711		14,904
Finance income			59		57		131
Finance costs			(18)		(68)		(102)
(Loss)/profit before income tax			(26)		4,140		(8,942)
Income tax charge	5		(144)		(1,717)		(634)
(Loss)/profit for the period			(170)		2,423		(9,576)
(Loss)/profit is attributable to:
Owners of the parent			(358)		2,213		(10,101)
Non-controlling interest			188		210		525
			(170)		2,423		(9,576)

 

 

(Loss)/earnings per ordinary share attributable to the owners of the parent during the period	6
			Pence		Pence		Pence
Basic			(0.08)		0.48		(2.21)
Diluted			(0.08)		0.48		(2.21)

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHS ENDED 30 JUNE 2023
			Unaudited		Unaudited		Audited
			6 months ended 30 June 2023		6 months ended 30 June 2022		Year ended 31 December 2022
			£'000		£'000		£'000
(Loss)/profit for the period			(170)		2,423		(9,576)
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)			437		(5,307)		(6,096)
Items that may be subsequently reclassified to profit or loss Currency translation differences			(3,502)		6,520		6,811
Other comprehensive (loss)/income (net of tax)			(3,065)		1,213		715
Total comprehensive (loss)/income for the period			(3,235)		3,636		(8,861)
Attributable to:
Owners of the parent			(3,139)		3,024		(9,420)
Non-controlling interests			(96)		612		559
Total comprehensive (loss)/income for the period			(3,235)		3,636		(8,861)

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
		Unaudited as at 30 June 2023			Unaudited as at 30 June 2022						Audited as at 31 December 2022
	Notes	£'000			£'000						£'000
Assets
Non-current assets
Property, plant and equipment	7	21,576			18,170						20,435
Right-of-use assets	7	507			1,495						1,279
Intangible assets	8	31,163			43,387						33,772
Investments		1,556			1,566						1,119
Deferred tax assets		878			23						925
Total non-current assets		55,680			64,641						57,530
Current Assets
Inventories		9,414			12,969						9,434
Trade and other receivables		7,979			12,236						10,739
Corporation tax receivable		13			408						10
Cash and cash equivalents		9,165			19,138						11,578
Total current assets		26,571			44,751						31,761
Total assets		82,251			109,392						89,291
Equity attributable to owners of the parent
Share capital		4,537			4,549						4,549
Share premium		7,375			7,375						7,375
Other reserve		(182)			(184)						(629)
Foreign currency reserves		6,129			8,931						9,590
Retained earnings		46,326			64,775						52,461
		64,185			85,446						73,346
Non-controlling interest		1,081			1,230						1,177
Total equity		65,266			86,676						74,523
Liabilities
Non-current liabilities
Borrowings		-			44						-
Lease liabilities		223			793						537
Deferred consideration		-			173						-
Deferred tax liability		2,140			3,795						2,493
Total non-current liabilities		2,363			4,805						3,030
Current liabilities
Trade and other payables		11,702			14,148						8,288
Lease liabilities		400			902						873
Deferred consideration		-			72						-
Current income tax liabilities		2,476			2,611						2,440
Borrowings		44			178						137
Total current liabilities		14,622			17,911						11,738
Total liabilities		16,985			22,716						14,768
Total equity and liabilities		82,251			109,392						89,291
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHS ENDED 30 JUNE 2023
			Unaudited 6 months ended 30 June 2023						Unaudited 6 months ended 30 June 2022						Audited Year to 31 December 2022
			£'000						£'000						£'000
Cash flow from operating activities
(Loss)/profit before income tax			(26)						4,140						(8,942)
Adjustments for
- Depreciation			1,590						1,505						3,098
- Amortisation and impairment charges			1,684						1,856						3,560
- Exceptional items			1,209						1,682						17,525
- (Profit)/loss on disposal of assets			5						19						28
- Share-based payments			-						517						(308)
- Cash outflows relating to exceptional items			(157)						-						(617)
- Foreign Exchange			-						-						(71)
- Bad debt written down			174						-						127
- Net finance costs			(41)						11						(29)
Changes in working capital
- Inventories			(445)						(693)						(815)
- Trade and other receivables			1,708						1,698						1,276
- Trade and other payables			(2,862)						(323)						(2,177)
Cash generated from operations			2,839						10,412						12,655
Interest received			59						57						85
Interest paid			(3)						(39)						(46)
Income tax paid			(389)						(1,945)						(3,006)
Net cash generated from operating activities			2,506						8,428						9,688
Cash flow from investing activities
Payment for investments			-						(2,930)						(2,930)
Payment for property, plant and equipment (PPE)			(3,345)						(2,167)						(4,434)
Payment for intangibles			(138)						(819)						(1,394)
Payment for acquisition of subsidiaries, net of cash acquired			-						(403)						(403)
Proceeds from sale of PPE			59						6						229
Net cash used in investing activities			(3,424)						(6,256)						(8,932)
Cash flow from financing activities
Dividend paid to company shareholders			-						-						(5,459)
Payment for shares bought back			-						(3,896)						(3,896)
Repayments of borrowings			(93)						(525)						(613)
Principal elements of lease payments			(507)						(551)						(1,071)
Dividends payment to non-controlling interests			-						-						-
Net cash used in financing activities			(600)						(4,972)						(11,039)
Net decrease in cash and cash equivalents			(1,518)						(2,800)						(10,283)
Cash and cash equivalents at beginning of period			11,578						20,341						20,341
Exchange gains on cash and cash equivalents			(895)						1,597						1,520
Cash and cash equivalents at end of period			9,165						19,138						11,578

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 30 JUNE 2023
	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 2022	4,639	7,375	5,033	2,813	74,264	94,124	618	94,742
Comprehensive income/(expense)
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
Comprehensive income/(expense)
Profit for the period	-	-	-	-	(12,314)	(12,314)	315	(11,999)
Other comprehensive income/(expense)
Changes in fair value of equity instruments at fair value through other comprehensive income/(expense)	-	-	(445)	-	-	(445)	-	(445)
Acquisition of own shares	-	-	(344)	-	-	(344)	-	(344)
Currency translation differences	-	-	-	659	(1)	658	(368)	290
Total comprehensive income/(expense)	-	-	(789)	659	(12,315)	(12,445)	(53)	(12,498)
Transactions with owners
Reserve transfer	-	-	344	-	1	345	-	345
Total contributions by and distributions to owners	-	-	344	-	1	345	-	345
At 31 December 2022	4,549	7,375	(629)	9,590	52,461	73,346	1,177	74,523
Comprehensive income
Profit for the period	-	-	-	-	(358)	(358)	188	(170)
Other comprehensive income/(expense)
Changes in fair value of equity instruments at fair value through other comprehensive income/(expense)	-	-	437	-	-	437	-	437
Currency translation differences	-	-	(2)	(3,461)	12	(3,451)	(284)	(3,735)
Total comprehensive income/(expense)	-	-	435	(3,461)	(346)	(3,372)	(96)	(3,468)
Transactions with owners
Acquisition of own shares	(12)	-	12	-	(344)	(344)	-	(344)
Dividends to owners	-	-	-	-	(5,445)	(5,445)	-	(5,445)
Total contributions by and distributions to owners	(12)	-	12	-	(5,789)	(5,789)	-	(5,789)
At 30 June 2023	4,537	7,375	(182)	6,129	46,326	64,185	1,081	65,266