Commercial in confidence
RUA LIFE SCIENCES PLC
UNAUDITED INTERIM RESULTS 2024
For the six months ended 30 September 2024
Commercial in confidence
Contents | |
Chairman's statement | 3 |
Condensed consolidated interim income statement | 6 |
Condensed consolidated interim balance sheet | 7 |
Condensed consolidated interim cash flow statement | 8 |
Condensed consolidated interim statement of changes in equity | 9 |
Notes to the condensed consolidated interim financial statements | 10 |
Corporate information and advisers | 23 |
2
Commercial in confidence
CHAIRMAN'S STATEMENT
At this time last year, the company outlined a strategy focused on achieving short-term profitability by expanding contract manufacturing and leveraging the commercialising of R&D efforts undertaken in recent years. I am pleased to report good progress towards this goal during the six months ended 30 September 2024 (the "period"), along with the establishment of strong foundations for future growth.
On 6 September 2024, the Group completed the strategic acquisition of the Abiss Group, a medical device manufacturer based in France, with a subsidiary in Poland specialising in the distribution of medical devices. The results presented include the consolidation of the Abiss group from the date of acquisition.
Taking into account the progress made on delivering on strategy and the initial benefits of the strategic acquisition of Abiss, it is pleasing to be able to report a consolidated profit of £636,000 for the period.
Unaudited interim results for the six months to 30 September 2024
Consolidated revenues for the Group increased 92% from £794k to £1,524k in the period. Of the revenues achieved, £238k (H1 2023 £199k) was represented by the Group's Biomaterials business, which enjoyed year-on-year growth of 20%. Other revenues delivered from the sale of Medical Devices and Components increased 116% from £595k to £1,286k in the period.
It is recognised that revenues in the comparative period were adversely affected by delays in shipments which were recovered in the second half of the year. A more appropriate comparator is the average revenues across each of the two half years in FY24 of £840k. Against this more challenging comparator, revenue growth from the Sale of Medical Devices and Components was 53% including the benefit of the Abiss group or 47% on a like-for-like basis.
Gross Profit margins continued to improve from the 78% achieved in the first half of FY24 and 81% over FY24, to 83% in the period. The gross profit margin achieved from Medical Devices and Components was 80% in the period compared to 76% in the comparative period.
Administrative expenses were reduced by £326k (16%) from £2,020k (H1 24) to £1,694k in the first half of the current year. The like-for-like reduction in costs (excluding Abiss) was £375k.
Included in other income for the period is the initial bargain purchase gain from the acquisition of the Abiss group. The profit on acquisition is £1,062,000, representing the excess of the book value of assets acquired over the purchase price of £68,000. An exercise to calculate the fair value of assets purchased, including any intangible assets identifiable, is currently being undertaken, and the final acquisition accounting adjustments will be included in the second interim period to 31 March 2025. As plant, machinery and other fixed assets utilised in the business have a current written down value of only £23k compared to the original cost of £730k, it is anticipated that a further bargain purchase gain will be recognised at the second interim period to 31 March 2025.
Balance Sheet Strengthened
The Group's drive to profitability, together with the Abiss acquisition has had a positive impact on the balance sheet of the Group. Cash at 30 September amounted to £3,779k, a net reduction of only £152k over the period compared to reductions of £523k (excluding proceeds of the equity issue) in the second half of FY24 and £976k in the comparative period. Total Assets increased £1,637k over the period with the £833k increase in liabilities (attributable to the acquisition of Abiss group) resulting in a net increase in equity of £682k from £7,182k to £7,864k over the period.
RUA Vascular and Structural Heart
The objectives for RUA Vascular and Structural Heart are to find alternative ways to fund the remaining regulatory pathway for the polymer sealed graft products and to introduce the Group's heart valve leaflet material (AurTexTM) to the wider industry as a realistic alternative to animal tissue in heart valves.
3
Commercial in confidence
As noted in the trading update of 30 October 2024, while the AurTex materials tested under the Company's Material Transfer Agreement ("MTA") with a heart valve company successfully met all the expected results for the tests undertaken, at this point, it is not expected to lead to a commercial agreement due to current priorities of the Company's MTA partner. Notwithstanding this, the results of the MTA have confirmed the management's belief in the potential for AurTex.
The team working on the vascular project has continued to make good progress with significant improvements made in the handling of the graft to address feedback from potential partners.
Several opportunities are being pursued for each of the Vascular and Structural Heart businesses, and further updates will be made as appropriate.
Abiss Acquisition
RUA was introduced to the Abiss Group ("Abiss") by our major customer around a year ago. The former parent company of Abiss had been placed into liquidation by the French Courts, and our customer was motivated to ensure a seamless continuity in the supply of products and devices supplied to it by Abiss. The Abiss Group comprises two European businesses: Abiss France and Abiss Poland. Abiss France is a CE mark holder of a number of medical devices and is a licensor and subcontract manufacturer of devices. Abiss Poland is a 60% subsidiary of Abiss France and is a distributor of gynaecological and urology devices into hospitals. In Poland, Abiss holds a market-leading position in Stress Urinary Incontinence (SUI) and pelvic floor repair. Around 70% of the revenues generated by Abiss France were dependent upon sales to the major customer.
Having reviewed the future product demand from the major customer and satisfied ourselves on any product liability issues, RUA agreed to participate in a formal auction process to acquire the entire issued share capital of Abiss France. The Abiss group was sold as a going concern. Although financial information was made available by Abiss, detailed financial due diligence was not possible nor were any warranties on the purchase available from the French courts. However, the strong relationship that RUA has with its customer provided it with significant comfort on matters which might be perceived as risks by other bidding parties. As a result, RUA's offer of €80,000 for the share capital of Abiss France was the highest bid and was accepted by the French courts with the purchase completing on 6 September 2024.
Strategic Integration
There are many similarities between Abiss and RUA's Contract Manufacturing business unit, not least the customer relationship. Going forward, it is anticipated that Abiss will be reported as part of the expanded Medical Devices and Components business unit. The acquisition has enabled us to achieve our stated objective of doubling the scale of this business unit, with many other opportunities for further growth. The acquisition of Abiss came with a €900k order backlog due to a shortage of packaging materials, and the short-term priority has been to catch up with those orders, which are expected to be completed in the second interim period. The objective for the enlarged business unit and Abiss specifically is to grow revenues through broadening the product range offered to the division's largest customer. RUA has held unexploited IP related to integrating Elast-EonTM into SUI devices to address the complications occasionally suffered by patients.
Change of accounting reference date
The Group announced on 30 October 2024, that it will be changing its accounting reference date and financial year end from 31 March to 30 September. Going forward, interim and annual accounts will be prepared and published for the six months ending 31 March and the twelve months ending 30 September, respectively.
The Company has changed its financial year end to better guide business planning and international business unit assimilation.
As a result of this change, the Company's future reporting calendar is expected to be as follows:
4
Commercial in confidence
- Publication of unaudited accounts for the 12-month period ending 31 March 2025 in mid-June 2025.
- Publication of audited accounts for the 18-month period ending 30 September 2025 by end of January 2026.
- Publication of unaudited interim accounts for the six-month period ending 31 March 2026 in mid-June 2026; and
- Publication of audited accounts for the 12-month period ending 30 September 2026 by the end of January 2027.
Conclusion and Outlook
The focus of management has been to maximise revenue from Contract Manufacture, reduce costs and secure deals for longer term growth. Success has been demonstrated in each of these areas which together with the Abiss purchase has resulted in a profit being reported for the period, marking a significant milestone.
The Group's development is centred on two key platforms: leveraging its intellectual property (IP) and advancing subcontract development and manufacturing of medical devices. Recent priorities have focused on strengthening the solid financial foundation established through last year's equity fundraise by elevating Contract Manufacturing to the next level.
The targets for the Group's graft IP and AurTex are to commercialise the investment made to date to license the Group's IP and to generate revenues through the manufacture of devices and components based on the Group's graft and AurTex technology.
Geoff Berg, Chairman
10 December 2024
5
Commercial in confidence
CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Unaudited | Unaudited | Audited | ||||
Six months to | Six months to | Twelve months to | ||||
30 Sep 2024 | 30 Sep 2023 | 31 Mar 2024 | ||||
Note | GB£000 | GB£000 | GB£000 | |||
Revenue | 3 | 1,524 | 794 | 2,191 | ||
Cost of sales | (255) | (178) | (415) | |||
Gross profit | 1,269 | 616 | 1,776 | |||
Other income | 4 | 1,090 | 44 | 79 | ||
Administrative expenses | (1,694) | (2,020) | (3,792) | |||
Operating Profit / (loss) | 665 | (1,360) | (1,937) | |||
Net finance expense | (34) | (36) | (83) | |||
Profit / (Loss) before taxation | 631 | (1,396) | (2,020) | |||
Taxation (received) / charge | (5) | 386 | 580 | |||
Profit / (Loss) for the period | 636 | (1,010) | (1,440) |
Other comprehensive income:
Currency translation differences
Total comprehensive income for the period
Total comprehensive income for the period is attributable to:
Equity holders of the parent
Non-controlling interests
Profit/(Loss) per share:
(2) | - | - | ||
634 | (1,010) | (1,440) | ||
632 | (1,010) | (1,440) | ||
2 | - | - | ||
634 | (1,010) | (1,440) | ||
Basic & Diluted (GB Pence per share) | 1.03 | (4.55) | (4.29) |
6
Commercial in confidence
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited | Unaudited | Audited | ||||
30 Sep 2024 | 30 Sep 2023 | 31 Mar 2024 | ||||
Note | GB£000 | GB£000 | GB£000 | |||
Assets | ||||||
Non-current assets | ||||||
Goodwill | 5 | 301 | 301 | 301 | ||
Other intangible assets | 6 | 569 | 445 | 419 | ||
Property, plant and equipment | 7 | 3,028 | 2,621 | 2,456 | ||
Total non-currents assets | 3,898 | 3,367 | 3,176 | |||
Current assets | ||||||
Inventories | 8 | 1,112 | 139 | 112 | ||
Trade and other receivables | 9 | 1,017 | 755 | 950 | ||
Cash and cash equivalents | 10 | 3,779 | 493 | 3,931 | ||
Total current assets | 5,908 | 1,387 | 4,993 | |||
Total assets | 9,806 | 4,754 | 8,169 | |||
Equity | ||||||
Issued capital | 3,103 | 1,109 | 3,103 | |||
Share premium | 13,709 | 11,729 | 13,709 | |||
Capital redemption reserve | 11,840 | 11,840 | 11,840 | |||
Reserves | (1,438) | (1,389) | (1,485) | |||
Profit and loss account | (19,351) | (19,555) | (19,985) |
Total equity attributable to equity holders of the parent company
Non-controlling interests
Total Equity
Liabilities
Non-current liabilities
7,864 | 3,734 | 7,182 | ||
123 | - | - | ||
7,986 | 3,734 | 7,182 | ||
Borrowings | 11 | 70 | 150 | 132 | ||
Lease liabilities | 11 | 696 | 169 | 140 | ||
Deferred tax | 69 | 80 | 74 | |||
Other Liabilities | 72 | 101 | 87 | |||
Total non-current liabilities | 907 | 500 | 433 | |||
Current liabilities | ||||||
Borrowings | 11 | 247 | 29 | 31 | ||
Lease liabilities | 11 | 163 | 97 | 86 | ||
Trade and other payables | 12 | 474 | 354 | 408 | ||
Other liabilities | 29 | 40 | 29 | |||
Total current liabilities | 913 | 520 | 554 | |||
Total liabilities | 1,820 | 1,020 | 987 | |||
Total equity and liabilities | 9,806 | 4,754 | 8,169 | |||
7
Commercial in confidence
CONDENSED INTERIM CONSOLIDATED CASH FLOW STATEMENT
Unaudited | Unaudited | Audited | ||||
Six months to | Six months to | Twelve months | ||||
to | ||||||
30 Sep 2024 | 30 Sep 2023 | 31 March 2024 | ||||
GB£000 | GB£000 | GB£000 | ||||
Cash flows from operating activities: | ||||||
Group Profit / (Loss) after tax | 636 | (1,010) | (1,440) | |||
Adjustments for: | ||||||
Gain on bargain purchase | (1,062) | - | - | |||
Amortisation of intangible assets | 36 | 25 | 51 | |||
Depreciation of property, plant and equipment | 142 | 160 | 313 | |||
Share-based payments | 49 | 61 | (35) | |||
Net finance costs | 34 | 36 | 83 | |||
Tax credit in year | - | (381) | (580) | |||
(Increase)/decrease in trade and other receivables | 219 | 214 | (362) | |||
(Increase)/decrease in inventories | (34) | (58) | (31) | |||
Taxation received | (5) | (5) | 569 | |||
(Increase)/decrease in trade and other payables | (238) | 75 | 104 | |||
Net cash flow from operating activities | (223) | (883) | (1,328) | |||
Cash flows from investing activities: | ||||||
Purchase of property plant and equipment | (35) | (42) | (55) | |||
Proceeds from disposal of tangible assets | - | - | 25 | |||
Acquisition of subsidiary (net of cash acquired) | 208 | - | - | |||
Interest paid | (19) | (21) | (55) | |||
Interest received | 23 | - | - | |||
Net cash flow from investing activities | 177 | (63) | (85) | |||
Cash flows from financing activities: | ||||||
Proceeds from borrowing | 8 | 33 | 7 | |||
Repayment of borrowings and leasing liabilities | (71) | (63) | (93) | |||
Proceeds from share issue | 3,974 | |||||
Net cash flow from financing activities | (63) | (30) | 3,888 | |||
Net increase / (decrease) in cash and cash equivalents | (109) | (976) | 2,475 | |||
Cash and cash equivalents at beginning of year | 3,931 | 1,484 | 1,484 | |||
Effect of foreign exchange rate changes | (43) | (15) | (28) | |||
Cash and cash equivalents at end of the period | 3,779 | 493 | 3,931 | |||
8
Commercial in confidence
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Balance at 31 March 2023
Share based payments
Transactions with owners
Total comprehensive income for the period
Balance at 30 September 2023
Shares Issued (Net of Expenses)
Share based payments
Transactions with owners
Total comprehensive income for the period
Balance at 31 March 2024
Share based payments
Transactions with owners
Adjustment to NCI from foreign entity acquisition
Total comprehensive income for the period
Balance at 30 September 2024
Issued | Capital | Non- | Profit and | ||||
Share | Share | Redemption | Other | Translation | Controlling | loss | |
capital | premium | Reserve | reserve | Reserve | Interest | account | Total equity |
GB£000 | GB£000 | GB£000 | GB£000 | GB£000 | GB£000 | GB£000 | GB£000 |
1,109 | 11,729 | 11,840 | (1,450) | - | - | (18,545) | 4,683 |
- | - | - | 61 | - | - | - | 61 |
- | - | - | 61 | - | - | - | 61 |
- | - | - | - | - | - | (1,010) | (1,010) |
1,109 | 11,729 | 11,840 | (1,389) | - | - | (19,555) | 3,734 |
1,994 | 1,980 | - | - | - | - | 3,939 | |
- | - | - | (96) | - | - | - | (35) |
- | - | - | (96) | - | - | - | (35) |
- | - | - | - | - | - | (430) | (430) |
3,103 | 13,709 | 11,840 | (1,485) | - | - | (19,985) | 7,182 |
- | - | - | 49 | - | 49 | ||
- | - | - | 49 | - | - | - | 49 |
- | - | - | - | - | 121 | - | 121 |
- | - | - | - | (2) | 2 | 634 | 634 |
3,103 | 13,709 | 11,840 | (1,436) | (2) | 123 | (19,351) | 7,986 |
9
Commercial in confidence
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Reporting entity
The interim consolidated financial statements cover the consolidated entity RUA Life Sciences plc and the entities it controlled at the end of, or during, the interim period to 30 September 2024 ("the Group").
RUA Life Sciences plc ("the Company") is a public limited company and is domiciled and incorporated in Scotland with number SC170071. The Company is listed on the AIM market of the London Stock Exchange (ticker: RUA, ISIN: GB0033360586)
The registered office is
c/o Davidson Chalmers Stewart LLP 163 Bath Street
Glasgow
G2 4SQ.
RUA Life Sciences plc is the ultimate parent company of the Group, whose principal activities are contract design and manufacture of medical devices and exploiting the value of its IP and know-how.
2. Basis of preparation
These condensed consolidated interim financial statements are for the six months ended 30 September 2024 and have been prepared with regard to the requirements of IAS 34 on "Interim Financial Reporting". They do not include all of the information required for full financial statements and should be read in conjunction with the audited consolidated financial statements of the Group for the year ended 31 March 2024.
The financial information for the six months ended 30 September 2024 and the comparative figures for the six months ended 30 September 2023 are unaudited. They have been prepared on the basis of the accounting policies set out in the consolidated financial statements of the Group for the year ended 31 March 2024 and, on the recognition, and measurement principles of IFRS in issue as effective at 30 September 2024. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.
The figures for the year ended 31 March 2024 have been extracted from the audited statutory accounts which were approved by the Board of Directors on 23 July 2024, prepared under IFRS. The Independent Auditor's Report on the Report and Financial Statements for the year ended 31 March 2023 was unqualified but did draw attention to Note 1 of those financial statements which explains that the Group and Parent Company's ability to continue as a going concern is dependent on the execution of its business plan together with its ability to raise sufficient capital to meet capital and liquidity requirements. The auditors report did not contain any statements under sections 498(2) or 498(3) of the Companies Act 2006.
The financial information is presented in pounds Sterling which is the functional and presentational currency of the Company. Balances are rounded to the nearest thousand (£'000) except where otherwise indicated.
The Interim Financial Statements were approved by the Board of Directors on 10 December 2024.
Going concern
The Directors have considered the applicability of the going concern basis in the preparation of the financial statements. This included the review of financial results, internal budgets and cash flow forecasts for the period of at least 12-months following the date of approval of these interim financial
statements (the "Going Concern Period").
10