IXICO PLC (LON:IXI)

IXICO PLC (LON:IXI)


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IXICO PLC RNS Release

Final Results


RNS Number : 3026J
IXICO plc
04 December 2018
 

4 December 2018

 

IXICO plc

 

("IXICO" or the "Company")

 

Financial results for the year ended 30 September 2018

 

Continued strong revenue growth, reduced operating losses and cash outflow, together with new contract wins.

 

Provides a solid foundation for continued growth momentum

 

IXICO plc (AIM: IXI), the data analytics company delivering insights in neuroscience, today announces its final results for the year ended 30 September 2018.

 

 

Highlights

 

Commercial and Operational

 

·     Secured £15m of new and expanded multi-year client contracts across all phases of clinical development

·     Concluded an over-subscribed placing of £5.5m to invest in new product and new market development

·     A broadening base of expertise in neurological disease areas and diversification of biopharmaceutical clients

·     Achievement of key milestones in the Assessa® PML programme

·     Successful completion of the Cygnus project for wearable biosensors (funded by Innovate UK) and expansion of key scientific collaborations to develop new artificial intelligence (AI) algorithms for imaging and digital biomarkers

·     Investment in increasing management bandwidth to drive growth, by strengthening leadership and operations team

 

Financial

 

·     Reported record revenues of £5.4m (2017: £4.1m*) or 32% growth at actual exchange rates

·     Revenue of £5.2m (2017: £3.7m*) or 41% underlying growth at Project Exchange Rates (PER)**

·     Gross margin increased to 58.8% (2017: 56.4%*) an improvement of 240 base points over prior year

·    Reduced EBITDA loss of £0.6m (2017: £1.4m*) from increased project volumes, improved productivity and cost control

·     Reduced operating loss of £0.8m (2017: £1.9m*)

·     Reduced loss per share of 2.0 pence (2017: 5.7 pence)

·     Operating cash outflows significantly reduced in the year to £0.1m (2017: £1.2m)

·     Closing cash balance of £7.9m (2017: £2.4m)

 

 * Adjusted to reflect the early adoption of IFRS 15 'Revenue from Contracts with Customers'

**PER revenue is recognised from multi-year contracts with fixed Project Exchange Rates. PER revenue demonstrates the underlying performance of the business, excluding the impact of foreign exchange.

 

 

Post year-end Events

·   Signed an extension to an existing contract which was awarded in January 2018 with a top 10 biopharmaceutical client. Contract value has increased from $2.7m to $5.1m over a six-year term, of which $0.2m has been recognised to date. 

 

 

Giulio Cerroni, CEO of IXICO, said: "2018 has been another year of significant progress in which we have delivered on our financial commitments, whilst continuing to invest in the long-term future of the company. We have reported record revenues with underlying growth of 41%, further improved gross profit performance and reduced operating losses. Consequently, operating cash outflows have been significantly reduced in the year to £0.1m.  The combination of a strong orderbook and healthy pipeline, in conjunction with senior management hires to execute our strategy, provides a solid foundation for continued growth momentum. With a successful capital placing to invest in new market and product development, we go into the new financial year with increased commercial traction, ambitious growth plans and a strengthened organisation focused on delivering technology-driven data analytics to our global biopharmaceutical clients".

 

Notice of AGM

IXICO also announces that its Annual General Meeting (AGM) will be held at 9.30am on 18 January 2019 at the offices of FTI Consulting, 200 Aldersgate Street, London EC1A 4HD. The full annual report and accounts along with notice of AGM will be posted to shareholders on 14 December 2018.

 

 

For further information please contact:

 

IXICO plc

Giulio Cerroni, Chief Executive Officer

Susan Lowther, Chief Financial Officer

 

Tel: +44 20 3763 7499

 

 

Shore Capital (Nomad and Broker)

Edward Mansfield/Anita Ghanekar/Daniel Bush

 

Tel: +44 20 7408 4090

 

 

FTI Consulting Limited (Investor Relations)

Simon Conway/Mo Noonan

 

Tel: +44 20 3727 1000

 

 

About IXICO

 

IXICO is dedicated to delivering insights in neuroscience. Our mission is to transform the progression of our biopharmaceutical clients' neurological therapeutic pipelines through the application of novel medical imaging and mobile health digital technologies.

 

IXICO's data analytics services are used by the global biopharmaceutical industry to interpret data from brain scans and digital biosensors to enable better trial design, site qualification, patient selection and clinical outcomes. We provide technology-enabled services across all phases of clinical evaluation. Our integrated digital platform provides a scalable and secure infrastructure for the capture and analysis of regulatory compliant clinical data to enable clients to make rapid, better informed decisions. IXICO is also collaborating with partners to develop new analytical techniques and companion digital health products targeted at improving patient outcomes.

 

More information is available on www.IXICO.com

 

 

Chairman's Statement

 

Increasing commercial traction

 

Overview

IXICO is now well-positioned as a data analytics company delivering insights in neuroscience. Our mission is to transform the progression of our clients' neurodegenerative therapeutic pipelines through the application of novel medical imaging and digital health technologies.

 

We have reported record revenue, improved gross margins, significantly reduced operating losses and reduced cash outflow as we move forward on our path to profitability. During the year, we announced new contracts with leading biopharmaceutical clients. These demonstrate our healthy business pipeline, and especially our ability to execute major, multi-year phase III studies. Together these provide a solid foundation for future revenue growth.

 

In May, we placed an additional £5.5 million of growth capital predominantly from new institutional shareholders. This has substantially strengthened our balance sheet and we intend to deploy the capital over the coming years to accelerate our development of new products and markets.

 

Strengthened management team and systems

Over the past twelve months we have invested in the management team to provide the necessary bandwidth to support our platform for growth through senior appointments across key functions in the business including operations, commercial and quality functions.

 

We are confident that the investments we are making in people, systems and processes, coupled with continued client service improvement and technology development, will continue to deliver growth and increased shareholder value.

 

Governance

In March 2018, the London Stock Exchange made several changes to the AIM Rules, following which, we adopted the Quoted Companies Alliance Corporate Governance Code (the 'Code'). This comprises 10 broad principles, which we use to explain our application of the principles of the Code and our corporate governance arrangements.

 

At IXICO, our core values reflect the technical and scientific expertise which has been developed over the last fourteen years, our innovative and talented people, driving quality in business operations and conducting our business relationships with integrity as a trusted partner of choice. The Board believes that these values and principles are a fundamental part of our sustainable, growing business and the Company's culture.

 

Board

At the 2019 Annual General Meeting ('AGM'), in accordance with the Company's Articles of Association, John Bradshaw, Mark Warne and I will stand for re-election, supported by the Board of Directors' recommendation.

 

Shareholders

We are grateful to all our shareholders for their continued support and interest. I would also like to welcome our new shareholders who joined during the year whose vision and support are an important part of our accelerated growth plans.

 

Outlook

Having made demonstrable progress executing our business strategy in the year, we reported record revenue in our core imaging business which was further enhanced by strong first year revenue from our wearable biosensor contracts.

 

We enter the new year with a healthy orderbook from our blue-chip clients and the Board is confident in meeting our expectations for growth. We are looking forward to the future with enthusiasm and confidence. We will continue to work closely with our clients, collaborators and business partners to realise our vision. I would like to thank them as well as all our staff, shareholders and advisers for their continued commitment and enthusiasm.

 

 

Chief Executive's Statement

 

Delivering our strategy

 

Put simply, our success is based on our unique capabilities in digitising information from clinical trials, combined with our commitment to innovate and commercialise new digital health solutions with our global biopharmaceutical clients.

 

Increasing commercial momentum

We are well-placed to benefit from macro trends in the industry, with a long-term runway for growth driven by the increasing outsourcing requirements of the biopharmaceutical industry, the significant unmet medical need in neurological disease and the emergence of innovative digital health solutions.

 

This year's reported revenue of £5.4 million is testament to our traction in delivering on our commercial goals, representing 32% revenue growth (41% excluding forex). During the year, we announced £15 million of new and expanded multi-year contracts across a range of therapeutic areas. Record revenue in our core imaging business was further enhanced by strong first year revenue from our wearable biosensor contracts and continuation of our Assessa PML programme.

 

Commitment to continuous improvement

We continue to invest in the long-term future of the company to deliver enhanced project service levels to our clients in high impact areas such as technology deployment timelines and clinical site management. This strengthened focus on operational efficiency resulted in significant progress in our staff productivity Key Performance Indicators (KPIs) such as income per head and 240 basis points improvement in gross margins to 58.8%.

 

Investing in innovation

Other highlights in 2018 included an over-subscribed placing in May, of £5.5 million, adding a number of new institutions to our register and enabling additional investment in new digital products and markets to further accelerate our growth trajectory in future years. In particular, we are excited about the emerging markets for our wearable biosensor data solutions to generate patient Real-World Evidence ('RWE') and our Assessa companion product for post-marketing surveillance.

 

We also achieved significant milestones in our scientific collaborations. The Cygnus project, which explored the use of wearable biosensors to support dementia sufferers, was successfully concluded in March and we were pleased to receive positive feedback on the pilot of our Assessa PML programme to support clinical management decisions from multiple sclerosis patients.

 

Strengthened management team and systems

I am delighted to report that we continue to attract and develop the highest calibre of talent, welcoming new, experienced, senior management in key functions including Quality, Operations, IT and Commercial. With this strengthened team in place, we have initiated several improvement programmes (such as upgrading IT infrastructure and data governance) to enable us to better serve the requirements of more complex and larger clinical trials across a wider range of therapeutic areas.

 

A bright outlook

We recognise that the unique value we offer our clients is built on scientific and technical capabilities and our ability to combine this with a deep understanding of neuroscience. As such, as we invest the additional capital placed in May, our innovation programmes will be substantially expanded. This will include building on our collaborations with the broader scientific community, enabling us to continue to provide global biopharma clients with highly differentiated technology solutions for imaging and digital biomarkers.

 

We go into the new financial year with increased and accelerating commercial traction, ambitious growth plans and a strengthened organisation focused on delivering unique, valuable technology solutions. Our commercial trajectory in an attractive market, strong cash balance and good visibility of future revenue from our orderbook underpins our confidence for the coming year.

 

 

Risk Management

 

The Board has ultimate responsibility for the Company's system of internal control and for reviewing its effectiveness.

 

Any such system of internal financial and operational controls can provide reasonable, but not absolute assurance, against material mis-statement or loss. The Board considers that the internal controls in place are appropriate for the size, stage of development, complexity and risk profile of the Group. The Group's internal control system is split into the following 2 areas.

 

Financial controls

The Group has an established framework of policies and procedures to maintain a system of internal financial and operational control. The effectiveness of such control is monitored and reviewed by the Leadership Team, Executive Directors, the Audit Committee and the Board.

·      Group policies, accounting and administrative procedures cover significant areas of the business and key systems. This includes formal authorisation procedures for treasury management, operating and capital expenditure. Major expenditure or commitment requires Board approval.

·      The Board is responsible for reviewing and approving Group strategy, annual budgets and determining the financial structure of the Group.

·      The Audit Committee assists the Board in discharging its duties in respect of the annual and interim financial statements, accounting policies and the maintenance of internal financial controls.

·      There are comprehensive procedures for monitoring and reporting to the Board, the Group's performance against budgets and forecasts. Such reports include financial statements, cash flows and capital expenditure. Results are compared with the prior year and expected performance over the remainder of the financial period.

 

Non-financial controls

The Board recognises that maintaining sound controls and vigilance is an important part of managing risk. The non-financial controls that have been established to date include:

·     Close management of the day-to-day activities of the Group by the Executive Directors.

·     A Leadership Team that operates within an organisational structure that has defined levels of responsibility.

·     Carrying out business operations in accordance with ISO 13485:2016.

·     Appropriate standards and codes of conduct that are set out in written policies and part of mandatory training for employees. These are wide-ranging and include policies such as dealing fairly with stakeholders and one another, privacy, handling confidential information, conflict of interest, anti-bribery and corruption.

·    The VP of Quality, Compliance and Regulatory Affairs works closely with the Leadership Team to oversee the Standard Operating Procedures used to perform services for our clients and Company policies and procedures.

·     All material contracts are reviewed and signed by an Executive Director.

 

A risk register is maintained which details potential risks and mitigating actions for all client projects. Such risks are reviewed by members of the operational leadership and discussed at Leadership Team meetings. Material risks or uncertainties, together with potential mitigating actions, are communicated to the Board.

 

 

Principal Risks and Uncertainties

 

The following are the principal risks and uncertainties that the Board considers could have a material impact on the Group's operational results, financial condition and prospects.

 

These risks and uncertainties reflect the business environment within which the Group operates together with risks in the execution of our business strategy.

 

 

Financial

 

Principal Risk

Perceived Risk

Mitigation

We have a stated objective of a path to profitability, which depends upon the successful execution of our business strategy. Adverse events could affect profitability and our ability to meet financial targets.

Low

We have secured £15 million of new and expanded client contracts in the year, strengthening our existing orderbook.

The placing of £5.5 million in May 2018 has strengthened our cash position.

We carefully monitor working capital requirements to fund continued operational expenses and planned investments to ensure long term sustainability.

 

 

Management and employees

 

Principal Risk

Perceived Risk

Mitigation

The loss of key employees could weaken our scientific, technical and management capabilities and negatively impact our business.

Low

Key employees are on permanent employment contracts. Remuneration includes salary, pension performance-related bonus and share options. The Business Development team receive performance related sales commission.

 

 

Industry

 

Principal Risk

Perceived Risk

Mitigation

Clinical trials, and therefore our client contracts, can be stopped at any time if the drug is deemed not effective or unsafe. There is a risk of reduced revenue as a result of the timing or reduction of expenditure by our biopharmaceutical clients.

Medium

We aim to strengthen our market position and sustain our competitive advantage by building collaborative, commercial partnerships. We continue to diversify by expanding into new therapeutic areas which provides some mitigation against changing funding priorities within neurology. Most clinical studies for neurological conditions span multiple years and this is reflected in our client contracts. This mitigates the short-term risk of changes to funding priorities.

 

 

Competition

 

Principal Risk

Perceived Risk

Mitigation

We face competition in this sector from larger companies or from academic institutions, which may affect our ability to implement our commercially-led growth strategy. As a technology services provider there is always the risk of new disruptive technologies that could render IXICO's technology uncompetitive.

Medium

We have invested in innovative technology and product development to broaden our therapeutic focus. This reduces our exposure to the inherent risk in clinical development.

We continue to invest in our technology and scientific capabilities and market reach to create value for our clients and differentiate our portfolio of services and to remain competitive.

 

 

BREXIT

 

Principal Risk

Perceived Risk

Mitigation

While revenue from non-UK, European clients was less than 20% of the Group total in 2018, reducing our exposure to trading challenges due to BREXIT, there is considerable uncertainty in the macroeconomic outlook as a result of the UK's decision to leave the EU.

We recruit staff who are not UK nationals.

Post-BREXIT residency and work rights for non-UK nationals may affect our ability to attract and retain qualified staff in the future.

We manage data across multinational territories, storing these on UK-based servers. Post-BREXIT, data management requirements may change.

Medium

Like many companies, we continue to monitor the impact of the United Kingdom's relationship with the European Union.

Most of our current contracts are multi-year agreements with agreed terms and pricing.  We do not expect these to be materially affected, other than the potential impact of forex.  We closely monitor the movement of Sterling against other currencies in which we trade such as the US Dollar, Euro and Swiss Franc.

We continue to monitor the reports of likely BREXIT outcomes. In the near-term, we plan to support our staff in securing the appropriate work permits.

We may switch to EU-based data storage providers if data management requirements change post-BREXIT.

 

 

Reliance on key customers

 

Principal Risk

Perceived Risk

Mitigation

We work closely with our clients to ensure that we deliver to their requirements. The biopharmaceutical industry has consolidated over the past 2 decades, leading to potential concentration of our revenue in a relatively small client base.

Medium

We continue to broaden our customer base to manage the risk of being overly dependent on any one client.  This includes diversification in a broadening market with new entrants such as smaller biotechnology companies.

 

 

Regulatory and compliance

 

Principal Risk

Perceived Risk

Mitigation

We operate in a regulated environment and changes to regulations could negatively impact our ability to implement our strategy.

Low

We monitor potential regulatory changes and participate in industry bodies so that we can manage change accordingly. We have also invested in additional senior resource in our Quality & Compliance team as part of continuous improvement.

 

 

Intellectual property and proprietary technology

 

Principal Risk

Perceived Risk

Mitigation

Our technologies are based on software and data algorithms, which may present a lower barrier to competition than other forms of intellectual property protection.

Low

Successful development and deployment of our technologies are reliant on considerable know-how in neuroscience, data analytics and image analysis.

Copyright in the software incorporated into our products is a further form of potential protection.

We maintain business know-how and knowledge in our Quality Management System and Standard Operating Procedures.

We manage, develop and protect our intellectual property portfolio.

 

 

Cybersecurity

 

Principal Risk

Perceived Risk

Mitigation

We collect, manage and analyse clinical data from international trial sites.

The introduction of the EU General Data Protection Regulation regulations has had a material impact on the requirements for the collection, storage, and management of personal data.

Medium

The Group's TrialTracker software is designed to anonymise patient data at the point of source, minimising the risk in the event of a cybersecurity breach. The Group continues to invest in its IT infrastructure and security and is working towards achieving accreditation to ISO27001.

We have responded to the changes in data privacy regulations to ensure compliance. We conduct regular reviews to ensure our systems are robust.

 

 

Financial Review

 

Ahead of expectations

 

We have delivered a strong financial performance as part of our 5-point growth plan.

 

This financial review includes a comparison of KPIs that we use to measure our progress over the prior year. Revenue KPIs are reported at actual exchange rates and Project Exchange Rates ('PER'). The KPI of revenue at PER demonstrates the underlying movement in the revenue performance by excluding the impact of foreign exchange. PER represents a fixed foreign exchange rate agreed in each individual customer contract.

 

KPIs

The KPIs currently used to monitor the business are linked into financial performance and cash resources as shown below:

 

KPI

2018 result

2017 result

Movement

Revenue at actual exchange rates

£5.4m

£4.1m*

£1.3m (32%)

Revenue at PER

£5.2m

£3.7m*

£1.5m (41%)

Gross profit

£3.2m

£2.3m*

£0.9m (39%)

Gross margin

58.8%

56.4%*

240 bps

Other income

£0.6m

£0.6m

-

EBITDA loss

£0.6m

£1.4m

£0.8m

Operating loss

£0.8m

£1.9m*

£1.1m

Loss per share

(2.0)p

(5.7)p

3.7p

Cash

£7.9m

£2.4m

£5.5m

 

*Adjusted to reflect the early adoption of IFRS 15 'Revenue from Contracts with Customers'.

 

Revenue

This is the first financial year that we are reporting revenue in accordance with IFRS 15 'Revenue from Contracts with Customers'. We have decided to early adopt this new accounting standard as it resulted in changes to the revenue recognition policy. Comparative figures have been adjusted to reflect this change.

 

Revenue for the period of £5.4 million (2017: £4.1 million*) represented an increase of 32%. This growth was generated from clinical trials services, Assessa PML, wearables projects and licensing revenue.

 

Revenue at PER of £5.2 million (2017: £3.7 million) represented a strong underlying growth of 41%.

 

Gross profit

The improved gross profit performance reflected increased revenue and operational efficiencies. The gross profit of £3.2 million increased by £0.9 million or 39% in the year. This resulted in an improved gross margin of 58.8%.

 

Other income

Other income comprised income from grants of £0.5 million (2017: £0.5 million) and R&D expenditure credit of £0.1 million (2017: £0.1 million). The £0.1 million reduction in grant income reflected the completion of 2 projects which had been ongoing in the prior year.

 

EBITDA

Reduced EBITDA loss of £0.6m (2017: £1.4m*) reflected increased project volumes, improved productivity and cost control.

 

Operating loss

Operating expenditure in the year reflected continued investment in people and product development:

·    research and development expenses of £1.0 million (2017: £1.3 million) included improvements to existing products   together with new product development;

·      sales and marketing expenses were materially unchanged at £0.8 million (2017: £0.8 million); and

·      general and administrative expenses increased to £2.7 million (2017: £2.3 million).

 

The reported operating loss of £0.8 million reflected an improved gross profit performance and reduced operating expenditure.

 

Cash

Operating cash outflows significantly reduced in the year to £0.1 million (2017: £1.2 million). The Group completed a placing of £5.5 million which combined with neutral operating cash flows, resulted in a closing cash balance of £7.9 million (2017: £2.4 million).

 

Loss per share

Loss per share improved to 2.0p from 5.7p reflecting a strong performance in the year.

 

Following the successful placing we are able to continue to invest in the business to ensure that we have the people, products, processes and IT infrastructure to further accelerate our commercially-led growth strategy.

 

Results and dividends

The Group's net loss after tax for the year decreased to £0.7 million (2017: £1.5 million adjusted*). 

 

The Board of Directors does not recommend the payment of a dividend.

 

Placing

On 30 May 2018, the Group placed £5.5 million before expenses of £0.3 million, comprising a placing of VCT/EIS qualifying investment and ordinary shares at a price of £0.28. The placing will be used over the coming years to accelerate development of new products and markets.

 

Financial risk management

The financial risk management and objectives of the Group are set out in note 23 of the consolidated financial statements.

 

Political donations

The Group made no political donations during the period (2017: £nil) as part of our corporate social responsibility activities.

 

Charitable donations

The Group made charitable donations of £2,000 during the period (2017: £nil).

 

 

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2018 and 30 September 2017

 

 

 

Year ended

Year ended

 

 

30 September

30 September

 

 

2018

2017

 

 

 

adjusted*

 

Note

£'000

£'000

Revenue

4

5,394

4,100

 

 

 

 

Cost of sales

 

(2,221)

(1,786)

Gross profit

 

3,173

2,314

 

 

 

 

Other income

6

562

643

 

 

 

 

Operating expenses

 

 

 

Research and development expenses

 

(1,033)

(1,256)

Sales and marketing expenses

 

(754)

(823)

General and administrative expenses

 

(2,745)

(2,309)

Non-recurring administrative expenses

7

-

(481)

Total operating expenses

10

(4,532)

(4,869)

Operating loss

 

(797)

(1,912)

 

 

 

 

Finance income

 

4

-

Loss on ordinary activities before taxation

 

(793)

(1,912)

 

 

 

 

Taxation (charge)/credit

11

125

375

 

 

 

 

Loss attributable to equity holders for the period

 

(668)

(1,537)

 

 

 

 

Other comprehensive expense:

 

 

 

Items that will be reclassified subsequently to profit or loss

 

 

 

Foreign exchange translation differences

 

(1)

(13)

Total other comprehensive expense

 

(1)

(13)

 

 

 

 

Total comprehensive expense attributable

to equity holders for the period

 

(669)

(1,550)

 

 

 

 

 

 

 

 

Loss per share (pence)

12

 

 

Basic loss per share

 

(2.0)

(5.7)

Diluted loss per share

 

(2.0)

(5.7)

 

* Revenue reflects early adoption of IFRS 15 'Revenue from Contracts with Customers' which is set out in note 2 of the consolidated financial statements.

 

 

Consolidated Statement of Financial Position

as at 30 September 2018, 30 September 2017 and 1 October 2016

 

 

 

 

 

Group

 

 

 

 

As at

As at

As at

 

 

 

30 September

30 September

1 October

 

 

 

2018

2017

2016

 

 

 

 

adjusted*

adjusted*

 

Note

 

£'000

£'000

£'000

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

13

 

77

60

88

Intangible assets

14

 

32

128

559

Total non-current assets

 

 

109

188

647

 

 

 

 

 

 

Current assets

 

 

 

 

 

Trade and other receivables

16

 

2,140

1,487

1,353

Current tax receivables

11

 

229

420

562

Cash and cash equivalents

 

 

7,861

2,414

3,120

Total current assets

 

 

10,230

4,321

5,035

 

 

 

 

 

 

Total assets

 

 

10,339

4,509

5,682

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

18

 

3,013

1,801

1,527

Deferred consideration

 

 

-

-

174

Total current liabilities

 

 

3,013

1,801

1,701

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Deferred tax liabilities

19

 

-

19

112

Total non-current liabilities

 

 

-

19

112

 

 

 

 

 

 

Equity

 

 

 

 

 

Ordinary shares

20

 

7,923

7,727

7,720

Share premium

20

 

84,389

79,421

79,421

Merger relief reserve

20

 

1,480

1,480

1,312

Reverse acquisition reserve

20

 

(75,308)

(75,308)

(75,307)

Foreign exchange translation reserve

 

 

(80)

(79)

(66)

Accumulated losses

 

 

(11,078)

(10,552)

(9,211)

Total equity

 

 

7,326

2,689

3,869

 

 

 

 

 

 

Total liabilities and equity

 

 

10,339

4,509

5,682

 

* Trade and other payables and accumulated losses reflect early adoption of IFRS 15 'Revenue from Contracts with Customers' which is set out in note 2 of the consolidated financial statements.

 

 

Company Statement of Financial Position

as at 30 September 2018 and 30 September 2017

 

 

 

 

                 Company

 

 

 

As at

As at

 

 

 

30 September

30 September

 

 

 

2018

2017

 

 

 

 

 

 

Note

 

 

£'000

£'000

Assets

 

 

 

 

 

 

 

 

 

 

15

 

 

5,434

5,320

Amounts due from subsidiary undertakings

16

 

 

-

3,553

Total non-current assets

 

 

 

5,434

8,873

 

 

 

 

 

 

 

 

 

 

16

 

 

685

42

Cash and cash equivalents

 

 

 

7,229

396

Total current assets

 

 

 

7,914

438

 

 

 

 

 

 

Total assets

 

 

 

13,348

9,311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

140

113

Total current liabilities

 

 

 

140

113

 

 

 

 

 

 

 

 

 

 

20

 

 

7,923

7,727

20

 

 

84,389

79,421

20

 

 

1,480

1,480

Accumulated losses

 

 

 

(80,584)

(79,430)

Total equity

 

 

 

13,208

9,198

 

 

 

 

 

 

Total liabilities and equity

 

 

 

13,348

9,311

 

Parent Company Income Statement

As permitted by Section 408 of the Companies Act 2006, the income statement of the Company is not presented as part of these financial statements. The Company's loss for the financial year was £1,296,000 (2017: £1,388,000).

 

 

Consolidated Statement of Changes in Equity

for the year ended 30 September 2018, 30 September 2017 and 1 October 2016

 

 

 

 

 

 

Foreign

 

 

 

 

 

Merger

Reverse

exchange

 

 

 

Ordinary

Share

relief

acquisition

translation

Accumulated

 

 

shares

premium

reserve

reserve

reserve

losses

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 30 September 2016

7,720

79,421

1,312

(75,307)

(66)

(8,995)

4,085

Adjustment from the early adoption of IFRS 15

-

-

-

-

-

(216)

(216)

Adjusted balance at 1 October 2016

7,720

79,421

1,312

(75,307)

(66)

(9,211)

3,869

 

 

 

 

 

 

 

 

Total comprehensive expense

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

(1,537)

(1,537)

Other comprehensive expense:

 

 

 

 

 

 

 

Foreign exchange translation

-

-

-

-

(13)

-

(13)

Total comprehensive expense

-

-

-

-

(13)

(1,537)

(1,550)

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Charge in respect of share options

-

-

-

-

-

196

196

Exercise of share options

1

-

-

(1)

-

-

-

Issue of deferred consideration shares

6

-

168

-

-

-

174

Total transactions with owners

7

-

168

(1)

-

196

370

 

 

 

 

 

 

 

 

Balance at 30 September 2017

7,727

79,421

1,480

(75,308)

(79)

(10,552)

2,689

Total comprehensive expense

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

(668)

(668)

Other comprehensive expense:

 

 

 

 

 

 

 

Foreign exchange translation

-

-

-

-

(1)

-

(1)

Total comprehensive expense

-

-

-

-

(1)

(668)

(669)

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Charge in respect of share options

-

-

-

-

-

142

142

Exercise of share options

-

4

-

-

-

-

4

Proceeds from shares issued

196

5,304

-

-

-

-

5,500

Transaction costs for issue of shares

-

(340)

-

-

-

-

(340)

Total transactions with owners

196

4,968

-

-

-

142

5,306

 

 

 

 

 

 

 

 

Balance at 30 September 2018

7,923

84,389

1,480

(75,308)

(80)

(11,078)

7,326

 

 

Company Statement of Changes in Equity

for the year ended 30 September 2018 and 30 September 2017

 

 

 

 

Merger

 

 

 

Ordinary

Share

relief

Accumulated

 

 

shares

premium

reserve

losses

Total

 

£'000

£'000

£'000

£'000

£'000

Balance at 30 September 2016

7,720

79,421

1,312

(78,238)

10,215

 

 

 

 

 

 

Total comprehensive expense for the period

-

-

-

(1,388)

(1,388)

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

Charge in respect of share options

-

-

-

196

196

Exercise of share options

1

-

-

-

1

Issue of deferred consideration shares

6

-

168

-

174

Total transactions with owners

7

-

168

196

371

 

 

 

 

 

 

Balance at 30 September 2017

7,727

79,421

1,480

(79,430)

9,198

 

 

 

 

 

 

Total comprehensive expense for the period

-

-

-

(1,296)

(1,296)

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

Charge in respect of share options

-

-

-

142

142

Exercise of share options

-

4

-

-

4

Proceeds from shares issued

196

5,304

-

-

5,500

Transaction costs for issue of shares

-

(340)

-

-

(340)

Total transactions with owners

196

4,968

-

142

5,306

 

 

 

 

 

 

Balance at 30 September 2018

7,923

84,389

1,480

(80,584)

13,208

 

 

Consolidated and Company Statements of Cash Flows

for the year ended 30 September 2018 and September 2017

 

 

       Group

        Company

 

Year ended

Year ended

Year ended

Year ended

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

 

adjusted*

 

 

 

£'000

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

 

Loss for the period

(668)

(1,537)

(1,296)

(1,388)

Finance income

4

-

-

-

Taxation

(125)

(375)

-

-

Depreciation

38

49

-

-

Amortisation of acquired intangibles

114

143

-

-

Impairment of acquired intangibles

-

316

-

-

Impairment of investment in subsidiary undertakings

-

-

-

360

Research and development expenditure credit

(126)

(137)

-

-

Share option charge

142

196

28

22

 

(621)

(1,345)

(1,268)

(1,006)

Changes in working capital

 

 

 

 

(Increase)/decrease in trade and other receivables

(653)

(134)

2,910

1,942

Increase/(decrease) in trade and other payables

1,214

274

27

(1,708)

Cash (used in)/generated operations

(60)

(1,205)

1,669

(772)

Taxation received

423

561

-

-

Net cash generated/(used in) operating activities

363

(644)

1,669

(772)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Purchase of property, plant and equipment and software

(75)

(49)

-

-

Finance income

(4)

-

-

-

Net cash used in investing activities

(79)

(49)

-

-

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Issue of shares

5,504

-

5,504

-

Transaction costs associated with issue of shares

(340)

-

(340)

-

Net cash generated from financing activities

5,164

-

5,164

-

 

 

 

 

 

Movements in cash and cash equivalents in the period

5,448

(693)

6,833

(772)

Cash and cash equivalents at start of period

2,414

3,120

396

1,168

Effect of exchange rate fluctuations on cash held

(1)

(13)

-

-

Cash and cash equivalents at end of period

7,861

2,414

7,229

396

 

* Loss for the period and trade and other payables reflect early adoption of IFRS 15 'Revenue from Contracts with Customers' which is set out in note 2 of the consolidated financial statements.

 

 

Notes to the Financial Statements

 

The Group controls a subsidiary when the Group is exposed or has rights, to variable returns from its involvement with a subsidiary and has the ability to affect those returns through its power over a subsidiary.

 

1. General information

 

IXICO plc (the 'Company') is a public limited company incorporated in England and Wales; and is admitted to trading on the AIM market of the London Stock Exchange under the symbol IXI. The address of its registered office is 4th Floor, Griffin Court, 15 Long Lane, London EC1A 9PN.

 

The Company is an established provider of technology enabled speciality services to the global biopharmaceutical industry. The Company's services are used to select patients for clinical trials, assess the safety and efficacy of new drugs in development and in post marketing surveillance.

 

2. Significant accounting policies and basis of preparation

 

Basis of preparation

The consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU, IFRIC interpretations and the Companies Act 2006 applicable to companies operating under IFRS.

 

The consolidated financial statements have been prepared under the historical cost convention modified by the revaluation of certain financial instruments.

 

The consolidated financial statements are presented in Sterling (£). This is the predominant functional currency of the Company, and is the currency of the primary economic environment in which it operates. Foreign transactions are accounted in accordance with the policies set out below.

 

The Group and Company financial statements for the year ended 30 September 2018 are the first financial statements prepared in accordance with IFRS 15 'Revenue from Contracts with Customers', in advance of its effective date (accounting periods starting 1 January 2018). The Directors have decided to early adopt IFRS 15 'Revenue from Contracts with Customers' as it resulted in changes to revenue recognition policy.

 

Comparative figures have been adjusted to reflect the adjustments made and are presented below. There is no impact on the Company's financial statements.

 

Basis of consolidation

The consolidated financial statements incorporate the accounts of the Company and its subsidiary companies adjusted to eliminate intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

 

Subsidiaries are entities controlled by the Group. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.

 

The results of subsidiary companies are included in the consolidated financial statements from the date that control commences until the date that control ceases. The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated into Sterling at exchange rates ruling at the end of the reporting period. Income statements and cash flows of foreign operations are translated into Sterling at average monthly exchange rates which approximate foreign exchange rates at the date of the transaction. Foreign exchange differences arising on retranslation are recognised directly in a separate translation reserve.

 

The acquisition method is used to account for the acquisition of subsidiaries.

 

Going concern

At the time of approving the consolidated financial statements, the Directors have considered the expected future performance together with the Group's estimated future cash inflows from existing long-term contracts and sales pipeline. The Directors have also considered the Group's strategy following the placing during the year. Changes to the cost base are made in the normal course of business, so that operating expenditure and planned investment are in line with the Group's strategy and financial resources. After due consideration and taking into account management's estimate of future revenue and expenditure, the Directors have a reasonable expectation that the Company and the Group will have adequate financial resources to continue in operation for the foreseeable future. Thus they have adopted the going concern basis of accounting in preparing the consolidated financial statements.

 

Significant management judgement in applying accounting policies and estimation uncertainty

When preparing the consolidated financial statements, the Directors make a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

 

Significant management judgements

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the consolidated financial statements.

 

Revenue recognition

The Group recognises revenue in accordance with amounts charged to customers under service contracts. All contracts include an agreed, detailed work order which defines the deliverables. The service contracts are typically multi-year and may be amended through a change order process. Change orders represent a contract modification because they represent a distinct performance obligation in addition to the obligations in the contract. This could include changes to data volumes (increased or decreased), different methods of data analysis or changes to the timing of providing the deliverables.  

 

Revenue is recognised upon achievement of deliverables set out in the service contract. The recognition is expected to approximate to the timing of the physical performance of the contracts. The Group records the performance of the contractual obligations to determine that the deliverables and actual work performed is in accordance with the contract and agreed change orders. The scope of the project and contract terms are reviewed to determine whether the Group is acting as principal or agent in respect of the project, which depends on facts and circumstances and requires judgement.

 

There are two principle revenue recognition sensitivities. The first is in respect of the timing of transferring the deliverable to the customer which is not always directly under the Group's control. The second sensitivity is the volumes of data to be analysed. The price per unit of analysis is fixed in the contract, however if data volumes are lower than expected then revenue recognition would be correspondingly lower. Equally if the data volumes are higher than expected the revenue recognition would be correspondingly higher. Significant judgement is therefore required to determine that the distinct performance obligations under which revenue is recognised have occurred. There is also significant judgement involved in determining whether the performance obligations are transferred over time or at a point in time. 

 

Customer contracts include an agreed work order so the transaction price for a contract is allocated against distinct performance obligations based on their relative stand-alone selling prices. Management determines the fair value of individual components based on actual amounts charged by the Group on a stand-alone basis. The transaction price for a contract excludes any amounts collected on behalf of third parties.

 

Capitalisation of internally developed software

Distinguishing the research and development phases of a new software product and determining whether the requirements for the capitalisation of development costs are met requires judgement. During the year ended 30 September 2018, research and development expenses of £1,033,000 (2017: £1,256,000) have been recognised in the consolidated statement of comprehensive income.

 

The Group will recognise an intangible asset arising from development only if it can demonstrate its technical feasibility, intent to use or sell the intangible asset and measure reliably the expenditure attributable to the intangible asset during its development.

 

Intangible assets that do not meet the capitalisation criterial are recognised as an expense as incurred.

 

Internal development costs are capitalised only after technical and commercial feasibility of the software for sale or use have been established, meeting the criteria for capitalisation in the year.

 

Recovery of deferred tax assets

Deferred tax assets have not been recognised for deductible temporary differences and tax losses. The Directors consider that there is not sufficient certainty that future taxable profits will be available to utilise those temporary differences and tax losses. Further information of the Group's deferred tax asset can be found in note 17 of the consolidated financial statements.

 

Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

 

Share-based payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of the options granted is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted, detailed in note 21 of the consolidated financial statements.

 

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment.

 

 

Changes in accounting policies

The group provides its TrialTracker technology platform together with associated services including the collection, analysis and interpretation of images and other data that may be generated in the course of a clinical study. The Group also uses wearable biosensors to collect and analyse data that measures changes in symptoms such as sleep quality or walking gait. The Group's Assessa PML platform provides access to expert neuroradiologists to provide second opinion reads of MRI images. The revenue associated with the Group's provision of these technology and associated services is recognised over time as the different services are provided or performed.

 

Early adoption of IFRS 15 'Revenue from Contracts with Customers'

 

The Group has early adopted IFRS 15 'Revenue from Contracts with Customers' from 1 October 2017. As part of transitioning to the new financial standard, management reviewed all contracts with customers and identified distinct performance obligations.

 

IFRS 15 establishes the principles that the Group applies when reporting information about the nature, amount, timing and uncertainty of revenue and cash flows from a contract with a customer. Applying IFRS 15, the Group recognises revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

 

It replaced IAS 18 'Revenue', IAS 11 'Construction Contracts' and related interpretations. Under IFRS 15 'Revenue from Contracts with Customers', revenue is recognised when a customer obtains control of the goods or services. Determining the distinct performance obligations within contracts and the timing of the transfer of control, at a point in time or over time, requires significant management judgement.

 

The Group's revenue is recognised in 2 main categories: service revenue and licensing revenue.

 

Service revenue

Service revenue is mainly derived from activities related to technology services provided to biopharmaceutical clients carrying out clinical development. The Group applied the IFRS 15 'Revenue from Contracts with Customers' 5-step model framework on all activities. The technology service contracts include a number of activities which can be allocated to discrete contract phases. The activities within each phase have been examined to determine distinct performance obligations. As a result, the Group has identified 2 activities which have resulted in a change in revenue recognition:

 

1. Set-up and configuration of the TrialTracker platform: Under IAS 18 'Revenue', revenue for these activities was recognised when the set-up and configuration was completed, provided that all other criteria for revenue recognition was met. Under IFRS 15 'Revenue from Contracts with Customers', revenue is recognised against 2 separate performance obligations. The first performance obligation is the set-up of TrialTracker and revenue is recognised when the configuration and platform set-up is completed. A second performance obligation is a platform access fee recognised over the duration of the project.

 

Some historic, long-standing, existing contracts combined the access fee and configuration fee which were agreed on a contract by contract basis. Management could not differentiate between the set-up, configuration and access fee as distinct performance obligations on these contracts, therefore revenue associated with these activities has been treated as an access fee and recognised over the duration of the project term.

 

Consequently, revenue recognition of the set-up and configuration of TrialTracker is recognised later under IFRS 15 'Revenue from Contracts with Customers' than under IAS 18 'Revenue'.

 

2. Project set-up activities: Under IAS 18 'Revenue', revenue for these activities was recognised when the set-up was completed, provided that all other criteria for revenue recognition was met. Under IFRS 15 'Revenue from Contracts with Customers', project set-up revenue is recognised as part of a bundle of activities as they do not on a stand-alone basis meet the definition of distinct performance. The set-up activities have been recognised when all the activities that together comprise the distinct performance obligation have been delivered.

 

Consequently, revenue recognition of Project set-up activities is recognised later under IFRS 15 'Revenue from Contracts with Customers' than under IAS 18 'Revenue'.

 

License revenue

Licensing revenue includes one agreement, which grants the right to use TrialTracker software.

 

The license is a distinct performance obligation and under IFRS 15 'Revenue from Contracts with Customers' revenue is recognised over the contract term. The license grants a right to use the software and receive associated technical support during the license period.

 

The revenue recognition under IFRS 15 'Revenue from Contracts with Customers' is consistent with recognition under IAS 18 'Revenue', therefore there is no change to the recognition of licensing revenue.

 

 

Transition to IFRS 15 'Revenue from Contracts with Customers'

The Group has early adopted IFRS 15 'Revenue from Contracts with Customers' using the retrospective effect method and has applied this standard from 1 October 2017. Accordingly, the information presented for year ended 30 September 2017 has been adjusted.

 

The principal changes arising from the early adoption of IFRS 15 'Revenue from Contracts with Customers' refer to changes in revenue recognition in 1. Set-up and configuration of the TrialTracker and 2. Project set-up activities as outlined above.

 

The following tables summarise the impact of early adopting IFRS 15 'Revenue from Contracts with Customers' on the Group's consolidated statement of comprehensive income for the year ended 30 September 2017 and its consolidated statement of financial position as at 30 September 2016 and 30 September 2017. There is no impact on the Group's consolidated statement of cash flows.

 

 

Impact on consolidated statement of comprehensive income for year ended 30 September 2017:

 

 

Previously reported

IFRS 15 adjustments

Adjusted

 

 

2017

 

 

£'000

£'000

£'000

Revenue

4,110

(10)

4,100

 

 

 

 

Cost of sales

(1,786)

-

(1,786)

Gross profit

2,324

(10)

2,314

 

 

 

 

Other income

643

-

643

 

 

 

 

Total operating expenses

(4,869)

-

(4,869)

 

 

 

 

Operating loss

(1,902)

(10)

(1,912)

 

 

 

 

Loss on ordinary activities before taxation

(1,902)

(10)

(1,912)

 

 

 

 

Taxation

375

-

375

 Loss to attributable equity holders for the period

(1,527)

(10)

(1,537)

 

 

 

 

Total other comprehensive expense

(13)

-

(13)

 

 

 

 

Total comprehensive expense attributable

to equity holders for the period

(1,540)

(10)

(1,550)

 

 

 

 

Loss per share (pence)

 

 

 

Basic loss per share

(5.7)

-

(5.7)

Diluted loss per share

(5.7)

-

(5.7)

 

 

Impact on the consolidated statement of financial position at 30 September 2016:

 

 

 

 

Previously reported

IFRS 15 adjustments

Adjusted

 

 

 

 

2016

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

Total assets

 

 

5,682

-

5,682

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

 

1,311

216

1,527

Deferred consideration

 

 

174

-

174

Total current liabilities

 

 

1,485

216

1,701

 

 

 

 

 

 

Total non-current liabilities

 

 

112

-

112

 

 

 

 

 

 

Equity

 

 

 

 

 

Ordinary shares

 

 

7,720

-

7,720

Share premium

 

 

79,421

-

79,421

Merger relief reserve

 

 

1,312

-

1,312

Reverse acquisition reserve

 

 

(75,307)

-

(75,307)

Foreign exchange translation reserve

 

 

(66)

-

(66)

Accumulated losses

 

 

(8,995)

(216)

(9,211)

Total equity

 

 

4,085

(216)

3,869

 

 

 

 

 

 

Total liabilities and equity

 

 

5,682

-

5,682

 

 

Impact on the consolidated statement of financial position at 30 September 2017:

 

 

 

Previously reported

IFRS 15 adjustments

IFRS 15 adjustments

Adjusted

 

 

 

2016

2017

 

 

 

£'000

£'000

£'000

£'000

Total assets

 

4,509

-

-

4,509

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

1,575

216

10

1,801

Total current liabilities

 

1,575

216

10

1,801

 

 

 

 

 

 

Total non-current liabilities

 

19

-

-

19

 

 

 

 

 

 

Equity

 

 

 

 

 

Ordinary shares

 

7,727

-

-

7,727

Share premium

 

79,421

-

-

79,421

Merger relief reserve

 

1,480

-

-

1,480

Reverse acquisition reserve

 

(75,308)

-

-

(75,308)

Foreign exchange translation reserve

 

(79)

-

-

(79)

Accumulated losses

 

(10,326)

(216)

(10)

(10,552)

Total equity

 

2,915

(216)

(10)

2,689

 

 

 

 

 

 

Total liabilities and equity

 

4,509

-

-

4,509

 

 

Accounting developments

At the date of approval of the consolidated financial statements, the following Standards which have not been applied in the consolidated financial statements were in issue but not yet effective:

• IFRS 9 Financial instruments (effective 1 January 2018)

• IFRS 16 Leases (effective 1 January 2019)

• IFRS 17 Insurance contracts (effective 1 January 2021)

 

The Group is preparing for the introduction of IFRS 16 'Leases' under which right to use assets arising under operating lease commitments will be recognised in the statement of financial position. Apart from this standard, the Directors anticipate, based on the current business processes, that the introduction of the above standards, and other amendments and interpretations will not have a material impact on the consolidated and Company financial statements.

 

Revenue

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.

 

In recognising revenue, the Group follows a 5-step process:

1.     Identifying the contract with a customer.

2.     Identifying the performance obligations.

3.     Determining the transaction price.

4.     Allocating the transaction price to the performance obligations.

5.     Recognising revenue when/as performance obligation(s) are satisfied.

 

Revenue from short-term contracts, such as consultancy and training, is recognised as the service is performed.

 

Contracts with customers include a detailed schedule of work or work order with promised goods and services. The Group identifies each promised goods and services as performance obligations only if the goods or services are distinct or a series of distinct goods or services that are substantially the same and that have the same pattern or transfer to the customers. Performance obligations do not include activities that the Group must undertake to fulfil a contract unless those activities transfer a good or service to a customer. 

 

 

The transaction price for a contract is allocated against distinct performance obligations based on their relative stand-alone selling prices. Management determines the fair value of individual components based on actual amounts charged by the Group on a stand-alone basis. The transaction price for a contract excludes any amounts collected on behalf of third parties.

 

Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by delivering the contracted goods or services to its customers.

 

Revenue is recognised over time when the biopharmaceutical customers simultaneously receive and consume the benefits provided by the Group's performance. This is mainly derived from monthly management fees and access to TrialTracker.

 

Revenue is recognised at a point in time when the Group's has a present right to payment for the services provided to its biopharmaceutical customers. This is mainly derived from the study reports and materials used within clinical trials.

 

When an invoicing schedule is different to revenue recognition, appropriate adjustments are made through deferred and accrued income.

 

The Group's revenue is recognised in 2 main categories: service revenue and licensing revenue.

 

Service revenue

Service revenue is mainly derived from activities related to technology services provided to biopharmaceutical customers engaged in clinical development.

 

Many of the Group's contracts comprise a variety of performance obligations including, but not limited to, project set-up and management, site set-up and management, TrialTracker configuration and access, data reading and analysis, data management and quality control and scientific study reporting.

 

Under IFRS 15 'Revenue from Contracts with Customers', the Group must evaluate the separability of the contracted goods or services if they are 'distinct' which means that:

·      the customer benefits from the item either in combination with other items; and

·      it is 'separately identifiable' (i.e. the Group does not provide a significant service integrating, modifying or customising it).

 

Project set-up and management

Each project has a dedicated project manager who co-ordinates the project set-up and ongoing delivery of the service. They prepare the clinical study protocol and other essential study documents.

 

Revenue from project management reflects the provision of an on-going service so the straight-line method of recognition is used.

 

Revenue from study documentation is recognised at a point in time when the Group has delivered the material to the customer.

 

Site set-up and management

Site management and science teams design data acquisition protocols for each site, prepare site training materials and provide interactive training courses.

 

Revenue from site management reflects the provision of an on-going service so the straight-line method of recognition is used.

 

Revenue from site training is recognised when the activity is completed and the performance obligation is satisfied.

 

Materials prepared as tools for site training are preliminary activities that the Group undertakes to deliver the training. These activities are bundled with the revenue for site training and are recognised once this service has been completed.

 

TrialTracker configuration and access

TrialTracker platform delivers a robust and comprehensive set of centralised imaging services designed to efficiently manage the complex imaging workflow from: image upload, quality control, reading and analysis to reporting and data transfer.

 

Under IAS 18 'Revenue', revenue for these activities was recognised when the set-up and configuration was completed, provided that all other criteria for revenue recognition was met. Under IFRS 15 'Revenue from Contracts with Customers', revenue is recognised against 2 separate performance obligations. The first performance obligation is the set-up of TrialTracker and revenue is recognised when the configuration and platform set-up is completed. A second performance obligation is a platform access fee recognised over the duration of the project.

 

Data reading and analysis

The Group provides data analysis services across a range of biomarkers, providing high-quality, clinically meaningful data.

 

Fees are charged on a per data reading basis. Revenue from these services is recognised at the point in time when the Group has provided the discrete service to the customer.

 

Data management

Both the data management and imaging teams work in collaboration to ensure ongoing integrity of data.

 

Revenue from data management is recognised on a straight-line basis over the duration of the project. It represents the provision of an on-going service so the straight-line method of recognition is used.

 

Revenue from data quality control is recognised at a point in time when the Group has delivered the service to the customer.

 

Scientific reports

Scientific reports are provided at study end and at interim time points. Such reports contain data analysis and statistical interpretation.

 

Revenue from these services is recognised at a point in time when the Group provided a study report to the customer.

 

For revenue recognition purposes, the Group treats change order or contract modification to a customer agreement as a separate contract, if both:

·      the scope changes due to the addition of 'distinct' goods or services; and

·    the price change reflects the goods' or services' stand-alone selling prices ('SSP') under the circumstances of the modified  contract.

 

The revenue recognition for the original customer agreement will be unchanged.

 

License revenue

Licensing revenue arises from one agreement, which solely grants the right to use TrialTracker.

 

The license is a distinct performance obligation and under IFRS 15 'Revenue from Contracts with Customers' revenue is recognised over the contract term. The license grants a right to use the software and receive associated technical support during the license period.

 

In this case, only future revenue is impacted as the Group will continue to account for the pre-modification contract as before. The accounting for a contract modification that is not a separate contract depends on whether the remaining goods and services to be delivered under the modified contract are 'distinct' from those already transferred to the customer at the modification date.

 

Where longer-term contracts for services allow for the reimbursement of certain expenses incurred by the Group in the execution of the service contract, revenue is recognised only to the extent that the expenses incurred are eligible to be recovered. These reimbursements (pass-through) are included in revenue and are subject to a nil gross margin.

 

Where it has been assessed that the Group is acting as agent in respect of an agency relationship, revenue is recognised on a net basis after deducting revenue earned by the principal.

 

Other income

A government grant is recognised only when there is reasonable assurance that the Group will comply with any conditions attached to the grant and the grant will be received.

 

The grant is recognised as income over the period necessary to match them with the related costs, for which they are intended to compensate, on a systematic basis. The Group recognises grant income as an item of other income.

 

Other government or European grants received are recognised on a work performed and delivered basis.

 

 

The Group has elected to take advantage of the RDEC introduced in the Finance Act 2013. A company may surrender corporation tax losses on research and development expenditure incurred on or after 1 April 2013 for a corporation tax refund. Relief is given as a taxable credit on 12% of qualifying research and development expenditure. The Group recognises research and development expenditure credit as an item of other income, taking advantage of the 'above the line' presentation.

 

Research and development expenditure

An intangible asset arising from development is recognised only if the Group can demonstrate its technical feasibility, intent to use or sell the intangible asset and measure reliably the expenditure attributable to the intangible asset during its development. If the intangible assets do not meet the capitalisation criteria, then expenditure on development is recognised as an expense when it is incurred.

 

Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred. 

 

Internal development costs have been capitalised only after technical and commercial feasibility of the software for sale or use have been established, meeting the criteria for capitalisation in the year.

 

Exceptional items

Exceptional items are disclosed separately in the consolidated financial statements where it is necessary to do so to provide further understanding of the financial performance of the Group. They are material items of income or expense that have been shown separately due to the significance of their nature or amount. These amounts are of a non-recurring nature.

 

Share-based payments

Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 21 of the consolidated financial statements. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest. At each statement of financial position date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions.

 

The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.

 

Employee benefits

All employee benefit costs, notably holiday pay and contributions to the Group or personal defined contribution plans, are recognised in the statement of comprehensive income as they are incurred.

 

As at 30 September 2018, all employees have been automatically enrolled into the Group's defined contribution plan. The assets of the Group scheme are held separately from those of the Group in independently administered funds. The Group does not offer any other post-retirement benefits.

 

Operating leases

Rentals payable under operating leases are charged to the consolidated statement of comprehensive income on a straight-line basis over the lease term.

 

Property, plant and equipment

Property, plant and equipment are stated at historic purchase cost less accumulated depreciation.

 

The cost of property, plant and equipment is its purchase cost, together with any directly attributable expenses of acquisition. Depreciation is calculated so as to write off the cost of property, plant and equipment, less its estimated residual value, on a straight-line basis over the expected useful economic lives of the assets concerned.

 

The principal rates used for this purpose are:

·      Leasehold improvements: straight-line over the shorter of 5 years or the lease term

·      Fixtures and fittings: 33% straight-line

·      Equipment: 33% straight-line

 

The assets' residual values and useful lives are reviewed, and adjusted if necessary, at each statement of financial position date.

 

 

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the consolidated statement of comprehensive income.

 

Intangible assets

Acquired intangible assets are recognised as an intangible asset if it is separable from the acquired business or arises from contractual or legal rights, is expected to generate future economic benefits and its fair value can be reliably measured.

 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

 

Intangible assets are amortised using the straight-line method over their estimated useful economic life as following:

·      Neurodegenerative disease technology and marketing know-how: 20% straight-line

·      Computer Software: 33% straight-line

 

Amortisation is disclosed under general and administrative expenses in the consolidated statement of comprehensive income.

 

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes are treated as changes in accounting estimates.

 

Intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

 

Impairment of assets

Non-current assets are reviewed for impairment both annually and when there is an indication that an asset may be impaired (when events or changes in circumstances indicate that carrying value may not be recoverable). An impairment loss is recognised in the consolidated statement of comprehensive income for the amount by which the asset's carrying value exceeds its recoverable amount.

 

The recoverable amount is the higher of an asset's fair value less cost to sell and value in use. Non-financial assets, other than goodwill, which have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

 

Investments in Group undertakings

Investments in Group undertakings are carried at cost less any impairment provision. Such investments are subject to an annual impairment review.

 

Trade and other receivables

Trade and other receivables are initially recognised at fair value and subsequently stated at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (exceeding credit terms) are considered indicators that the trade receivable is impaired.

 

The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income within general and administrative expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against general and administrative expenses in the consolidated statement of comprehensive income.

 

Current tax

Current tax represents United Kingdom tax recoverable and is provided at amounts expected to be recovered using the tax rates and laws that have been enacted at the statement of financial position date.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand with original maturities at inception of 3 months or less.

 

 

Foreign currency translation

Transactions denominated in foreign currencies are translated into Sterling at actual rates of exchange ruling at the date of transaction. Monetary assets and liabilities expressed in foreign currencies are translated into Sterling at rates of exchange ruling at the end of the financial year. All foreign currency exchange differences are taken to the consolidated statement of comprehensive income in the year in which they arise.

 

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

 

Trade and other payables

Trade and other payables are non-interest bearing and are initially recognised at fair value and subsequently stated at amortised cost.

 

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

 

Financial instruments

Financial assets and financial liabilities are recognised on the consolidated statement of financial position when the Group or the Company becomes a party to the contractual provisions of the instrument. Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

 

Borrowings are classified as current liabilities unless the Group or the Company has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

 

Deferred taxation

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities; and their carrying amounts in the consolidated financial statements in accordance with IAS 12 'Income taxes'. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax asset is recognised only to the extent that it is probable that sufficient taxable profit will be available in future years to utilise the temporary difference. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither the accounting, nor taxable profit or loss.

 

The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

 

 

3. Investments in Subsidiaries

 

The consolidated financial statements of the Group as at 30 September 2018 include:

 

 

 

 

 

Proportion of

Proportion of

 

 

Place of

Principal

ownership

voting rights

Name of subsidiary

Class of share

incorporation

activities

interest

held

IXICO Technologies Limited

Ordinary

United Kingdom

Data collection and analysis of neurological diseases

100%

100%

IXITech Limited

Ordinary

United Kingdom

Dormant

100%

100%

IXICO US LLC

Members' interest

United States

Dormant

100%

100%

Optimal Medicine Limited

Ordinary

United Kingdom

Dormant

100%

100%

IXICO Technologies Inc.

Ordinary

United States

Dormant

100%

100%

 

 

4. Revenue

 

For the year ended 30 September 2018, revenue includes £249,000 (2017: £143,000) included in the deferred income within trade and other payables at the beginning of the period.

 

An analysis of the Group's revenue by type and geographic location are as follows:

 

 

Year ended 30 September 2018

Year ended 30 September 2017 adjusted*

 

Service

License

Total

Service

License

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

United States

3,703

223

3,926

2,502

202

2,704

United Kingdom

481

-

481

655

-

655

Europe

951

-

951

661

-

661

China

36

-

36

80

-

80

Revenue

5,171

223

5,394

3,898

202

4,100

 

An analysis of the Group's revenue by pattern of revenue recognition is as follows:

 

 

Year ended 30 September 2018

Year ended 30 September 2017 adjusted*

 

Service

License

Total

Service

License

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

Goods transferred at a point in time

3,521

-

3,521

2,745

-

2,745

Services transferred over time

1,650

223

1,873

1,153

202

1,355

Revenue

5,171

223

5,394

3,898

202

4,100

 

The performance obligations from existing contracts that are unsatisfied or partially unsatisfied as at 30 September 2018:

 

 

30 September 2019

30 September 2020

Total

 

£'000

£'000

£'000

Revenue at PER expected to be recognised

225

71

296

 

Revenue at Project Exchange Rates ('PER') reflects revenue excluding the impact of foreign exchange. PER represents a fixed foreign exchange rate agreed in individual customer contracts.

 

* Reflects the early adoption of IFRS 15 'Revenue from Contracts with Customers', which is set out in note 2 of the consolidated financial statements.

 

 

5. Segmental Information

 

The Group's development, commercial and operational delivery teams operate across all of the Company's activities. The Group's customer projects are managed by Project Managers with inputs to each project provided by other functional team members. The leadership team review the Group's management information reports to assess performance and allocate resources. The customer projects are reported as a single business unit and management monitor the operating performance of the business based on these reports. The chief operating decision maker has been identified as the Chief Executive Officer.

 

Accordingly, the Board consider that there is only one reporting segment.

 

The Group is domiciled in the United Kingdom with all sales originating in the United Kingdom.

 

In the year ended 30 September 2018, the Group had 3 customers that exceeded 10% of total revenue, being 14%, 13% and 12%. In the year ended 30 September 2017, the Group had 3 customers that exceeded 10% of total revenue, being 14%, 13% and 11%.

 

Analysis of the Group's revenue by geographic location is set out in note 4 of the consolidated financial statements.

 

As at 30 September 2018, the Group's non-current assets of £109,000 were solely derived from the United Kingdom (2017: £188,000).

 

 

6. Other Income

 

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Grant income

436

506

RDEC

126

137

Other income

562

643

 

All grant income originates in the United Kingdom.

 

The Group recognised RDEC as an item of other income, taking advantage of the above the line presentation.

 

 

7. Exceptional expenses

 

During the year ended 30 September 2018 there were no exceptional expenses incurred.

 

During the year ended 30 September 2017, exceptional expenses included the impairment of an intangible asset, redundancy costs and professional fees incurred in the dissolution of Optimal Medicine SARL together with the transfer of trade and assets of IXITech Limited and Optimal Medicine Limited to IXICO Technologies Limited.

 

These expenses have been recognised in the consolidated statement of comprehensive income as exceptional expenses due to their
non-recurring nature.

 

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Professional fees

-

44

Impairment of intangible asset

-

316

Redundancy costs

-

121

Non-recurring administrative expenses

-

481

 

 

8. Auditor's remuneration

 

The analysis of the auditor's remuneration is as follows:

 

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Fees payable to the Group's auditors for the audit of the Company's annual accounts

29

20

Fees payable to the Group's auditors for other services:

 

 

Audit of the subsidiaries' annual accounts

19

20

Audit related assurance services

5

5

Tax compliance services

11

12

Tax advisory services

16

5

Total auditor's remuneration

80

62

 

 

9. Employees and Directors

 

The average monthly number of persons (including Executive Directors) employed by the Group was:

               

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

Number

Number

Administration

13

12

Operations, research and development

50

49

Average total persons employed

63

61

 

At 30 September 2018 the Group had 67 employees (2017: 59).

 

Staff costs in respect of these employees were:

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Wages and salaries

4,007

3,530

Social security costs

377

398

Other pension costs

187

175

Share-based payments

142

196

Total remuneration

4,713

4,299

 

The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those
of the Group in independently administered funds. The amounts outstanding at 30 September 2018 in respect of pension costs were £22,000 (2017: £21,000).

 

Key management remuneration:

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Short-term employee benefits

1,723

1,819

Post-employment benefits

39

70

Total remuneration

1,762

1,889

 

Key management includes Executive Directors, Non-Executive Directors and senior management who have the responsibility for managing directly or indirectly, the activities of the Group.

 

The aggregate Directors' remuneration was £958,000 (2017: £665,000) and aggregate pension of £21,000 (2017: £28,000).  

 

 

10. Operating loss

 

An analysis of the Group's operating loss has been arrived at after charging:

               

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Research and development expenses

1,033

1,256

Sales and marketing expenses

754

823

Operating lease charges: land and building

131

130

Depreciation of property, plant and equipment

38

49

(Gain) on disposal of property, plant and equipment

(6)

-

Amortisation of intangible assets

114

143

Impairment of intangible assets(1)

-

316

Foreign exchange loss

17

102

Administrative expenses

2,451

1,885

Non-recurring administrative expenses excluding impairment of intangible assets(1)

-

165

Total operating expenses

4,532

4,869

(1) Impairment charge of nil for the year ended 30 September 2018 (2017: £316,000) is disclosed under exceptional expenses. See note 7 of the consolidated financial statements for further information.

 

 

11. Taxation

 

The tax charge for each period can be reconciled to the loss per consolidated statement of comprehensive income as follows:

 

 

Year ended

Year ended

 

 

30 September

30 September

 

 

2018

2017

 

 

 

adjusted*

 

£'000

£'000

 

Loss on ordinary activities before taxation

(793)

(1,912)

 

 

 

 

 

Loss before tax at the effective rate of corporation tax

 

 

 

 in the United Kingdom of 19% (2017: 19.50%)

(151)

(373)

 

 

 

 

 

Effects of:

 

 

 

Expenses not deductible for tax purposes

19

(50)

 

Temporary differences

7

18

 

Research and development uplifts net of losses surrendered for tax credits

3

28

 

Prior period adjustment

(3)

-

 

Early adoption of IFRS 15

-

2

 

Tax credit for the period

(125)

(375)

 

           

 

The tax credit for each period can be reconciled as follows:

 

 

Year ended

Year ended

 

 

30 September

30 September

 

 

2018

2017

 

 

 

adjusted*

 

£'000

£'000

 

Small or medium enterprise research and development credit

(128)

(311)

 

Deduction for corporation tax on RDEC

24

27

 

Tax due by foreign subsidiary undertakings

1

2

 

Deferred tax movement on amortisation

(19)

(93)

 

Prior period adjustment

(3)

-

 

Tax credit for the period

(125)

(375)

 

           

 

The Group has elected to take advantage of the RDEC, introduced in the Finance Act 2013 whereby a company may surrender corporation tax losses on research and development expenditure incurred on or after 1 April 2013 for a corporation tax refund.

 

The following is a reconciliation between the tax charge and the tax receivable within the consolidated statement of financial position:

 

As at

As at

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Current tax receivable at start of period

420

562

Current period credit

232

419

Corporation tax repayment

(423)

(561)

Current tax receivable at end of period

229

420

 

 

The tax credit for each period can be reconciled to the current period credit recognised in tax receivable within the consolidated statement of financial position in each period as follows:

 

 

As at

As at

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Tax credit for the year

125

375

Deferred tax movement on amortisation

(19)

(93)

RDEC gross of corporation tax deduction

126

137

Current period credit

232

419

 

* Reflects the early adoption of IFRS 15 'Revenue from Contracts with Customers', which is set out in note 2 of the consolidated financial statements.

 

 

12. Loss per share

 

Basic loss per share is calculated by dividing the loss for the period attributable to equity holders by the weighted average number of ordinary shares outstanding during the period.

 

For diluted loss per share, the loss for the period attributable to equity holders and the weighted average number of ordinary shares outstanding during the period is adjusted to assume conversion of all dilutive potential ordinary shares. As the effect of the share options would be to reduce the loss per share, the diluted loss per share is the same as the basic loss per share.

 

At 30 September 2018 and 30 September 2017, the Group has no dilutive potential ordinary shares in issue.

 

The calculation of the Group's basic and diluted loss per share is based on the following data:

 

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

 

 

Adjusted*

Loss for the period attributable to equity holders for basic loss and adjusted for the effects of dilution

(668)

(1,537)

 

* Reflects the early adoption of IFRS 15 'Revenue from Contracts with Customers' which is set out in note 2 of the consolidated financial statements

 

 

As at

As at

 

30 September

30 September

 

2018

2017

 

Number

Number

Weighted average number of ordinary shares for basic loss per share

33,761,428

26,929,554

 

 

13. Property, plant and equipment

 

 

Leasehold

Fixtures and

 

 

 

improvement

 fittings

Equipment

Total

 

£'000

£'000

£'000

£'000

Cost

 

 

 

 

At 30 September 2016

62

14

301

377

Additions

-

-

21

21

Disposals

-

(7)

(115)

(122)

At 30 September 2017

62

7

207

276

Additions

-

-

60

60

Disposals

-

-

(116)

(116)

Transfer to computer software

-

-

(11)

(11)

At 30 September 2018

62

7

140

209

 

 

 

 

 

Accumulated depreciation

 

 

 

 

At 30 September 2016

29

10

250

289

Charge for the period

12

2

35

49

Disposals

-

(7)

(115)

(122)

At 30 September 2017

41

5

170

216

Charge for the period

12

2

24

38

Disposals

-

-

(114)

(114)

Transfer to computer software

-

-

(8)

(8)

At 30 September 2018

53

7

72

132

 

 

 

 

 

Net book value

 

 

 

 

At 30 September 2017

21

2

37

60

At 30 September 2018

9

-

68

77

 

At 30 September 2018 and 30 September 2017, the Company had no property, plant and equipment.

 

 

14. Intangible assets

 

 

 

 

Neurodegenerative disease

Behavioural health

 

 

 

Registered

technology

technology

 

 

Computer

intellectual

and marketing

and marketing

 

 

software

property

know-how

know-how

Total

 

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

At 30 September 2016

-

150

500

1,154

1,804

Additions

28

-

-

-

28

At 30 September 2017

28

150

500

1,154

1,832

Additions

15

-

-

-

15

Transfer from equipment

3

-

-

-

3

At 30 September 2018

46

150

500

1,154

1,850

 

 

 

 

 

 

Amortisation and impairment

 

 

 

 

 

At 30 September 2016

-

150

300

795

1,245

Amortisation

-

-

100

43

143

Impairment

-

-

-

316

316

At 30 September 2017

-

150

400

1,154

1,704

Amortisation

14

-

100

-

114

At 30 September 2018

14

150

500

1,154

1,818

 

 

 

 

 

 

Net book value

 

 

 

 

 

At 30 September 2017

28

-

100

-

128

At 30 September 2018

32

-

-

-

32

 

Computer software

Computer software costs include the purchase of business software as part of the Group's investment in management information systems.

 

Registered intellectual property, neurodegenerative disease technology and marketing know-how

Intangible assets include registered intellectual property (royalty income from a third party), technology and marketing-related intangibles associated with neurodegenerative disease conditions arising from IXICO plc's historic research and development activities.

 

Registered intellectual property

The Group identified that the intellectual property will not generate future cash flows from milestones or commercialisation.

 

As at 30 September 2018 and 30 September 2017, the intellectual property was fully amortised.

 

Neurodegenerative disease technology and marketing know-how

As at 30 September 2018 and 30 September 2017, the Group identified no evidence that indicate the neurodegenerative disease technology and marketing know-how intangible asset may be impaired. The assumptions in respect of the future cash flows and discount rate have not changed since initial recognition.

 

Behavioural health technology and marketing know-how

Intangible assets represent technology and marketing-related intangibles associated with behavioural health arising from Optimal Medicine Limited's research and development activities.

 

As at 30 September 2018 and 30 September 2017, behavioural health technology and marketing know-how was fully amortised.

 

As at 30 September 2017, the Group identified that the behavioural health technology and marketing know-how will not generate future cash flows following a change in commercial focus and strategy resulting in an impairment loss of £316,000 being recognised.  

 

At 30 September 2018 and 30 September 2017, the Company had no intangible assets.

 

 

15. Investments in Group undertakings

 

 

                Company

 

As at

As at

 

30 September

30 September

 

2018

2017

 

£'000

£'000

IXITech Limited

 

 

At 1 October

2

2

At 30 September

2

2

 

 

 

IXICO Technologies Limited

 

 

At 1 October

5,318

5,144

Increase in capital contribution relating to share option charge

114

174

At 30 September

5,432

5,318

 

 

 

Optimal Medicine Limited

 

 

At 1 October

-

359

Exercise of OM Replacement Scheme 55,846 shares at £0.01 per share

-

1

Impairment charge

-

(360)

At 30 September

-

-

 

 

 

Total investments in Group undertakings

5,434

5,320

 

IXITech Limited

The investment in IXITech Limited amounts to the par value of the ordinary share capital of £2,000.

 

On 1 October 2017, the company became dormant.

 

IXICO Technologies Limited

The capital contribution relating to share-based payments relates to share options granted by the Company to employees of subsidiary undertakings in the Group in respect of the IXICO EMI Share Option Plan 2014.

 

Optimal Medicine Limited

As at 30 September 2018 and 30 September 2017, the recoverable amount is estimated to be £nil.

 

As at 30 September 2017, the Company identified that the cost of investment in Optimal Medicine Limited has diminished in value following a change in commercial focus and strategy resulting in an impairment loss of £360,000 being recognised.  

 

On 1 October 2017, the company became dormant.

 

 

16. Trade and other receivables

 

 

               Group

                 Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

Amounts receivable within 1 year

 

 

 

 

Trade receivables

1,864

1,247

-

-

Other receivables

4

55

-

-

Other taxation and social security

13

-

3

2

Prepayments

259

185

25

40

Amounts due from subsidiary undertakings

-

-

657

-

Trade and other receivables

2,140

1,487

685

42

 

 

 

 

 

Amounts receivable after more than 1 year

 

 

 

 

Amounts due from subsidiary undertakings

-

-

-

3,553

Amounts due from subsidiary undertakings

-

-

-

3,553

 

The average credit period granted to customers ranges from 30 to 90 days (2017: 30 to 90 days).

 

As at 30 September 2018, the Group had not recognised an allowance for doubtful debts which are estimated to be irrecoverable amounts.

 

As at 30 September 2018, amounts due from subsidiary undertakings have been reclassified to current assets from non-current as the Company is expecting to recover the outstanding amount within twelve months.

 

Trade receivables include amounts which are past due at the year-end but against which the Group has not recognised an allowance for doubtful receivables based on previous experience of payment timings with these customers. There has not been a significant change in credit quality and the amounts (which include interest accrued on overdue receivable balances) are still considered recoverable. As at 30 September 2018, the average age of the receivables is 64 days (2017: 82 days).

 

As at the year-end, the ageing of trade receivables which are past due but not impaired is as follows:

               

 

              Group

             Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

Less than 30 days past due

155

79

-

-

31-60 days past due

-

39

-

-

61-90 days past due

4

-

-

-

More than 90 days past due

-

-

-

-

Total trade receivables past due but not impaired

159

118

-

-

 

The fair value of trade and other receivables approximate their current book values. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 23 of the consolidated financial statements.

 

 

17. Deferred tax asset (unrecognised)

               

 

               Group

                  Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

Tax effect of temporary differences:

 

 

 

 

Depreciation in excess of tax allowances

(63)

(84)

(2)

(2)

Accumulated losses

(12,344)

(12,422)

(1,719)

(1,680)

Deductible temporary differences

9

(4)

(5)

(4)

Deferred tax asset (unrecognised)

(12,398)

(12,510)

(1,726)

(1,686)

 

The unrecognised deferred tax asset is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which temporary differences reverse, based on tax rates and laws enacted or substantively enacted at the latest balance date, currently 19% (2017: 19%).

 

The unrecognised deferred tax is based on material temporary differences that have originated but not reversed at the statement of financial position date from transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future.

 

 

18. Trade and other payables

 

 

              Group

             Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

 

 

adjusted*

 

 

Amounts falling due within 1 year

 

 

 

 

Trade payables

339

270

39

40

Other taxation and social security

189

174

-

-

Accrued expenses

2,469

1,334

101

73

Other payables

16

23

-

-

Trade and other payables

3,013

1,801

140

113

 

* Reflects the early adoption of IFRS 15 'Revenue from Contracts with Customers', which is set out in note 2 of the consolidated financial statements.

 

Trade payables and accrued expenses principally comprise amounts outstanding for trade purchases and ongoing costs. As at 30 September 2018, the average credit period taken for trade purchases is 48 days (2017: 58 days). No interest is charged on the trade payables. The Company's policy is to ensure that payables are paid within the pre-agreed credit terms and to avoid incurring penalties and/or interest on late payments.

 

The fair value of trade and other payables approximates their current book values.

 

 

19. Deferred tax liability

 

 

               Group

                Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

Balance at start of period

19

112

-

-

Amortisation

(19)

(30)

-

-

Reversal on impairment

-

(63)

-

-

Balance at end of period

-

19

-

-

 

The deferred tax liability was recognised due to the temporary difference arising from the recognition of the intangible assets acquired through the reverse acquisition on 14 October 2013 and business combination on 8 December 2015. The deferred tax liability was measured at 19%, the current effective rate of corporation tax in the United Kingdom. The deferred tax liability is being amortised using the straight-line method over 5 years, reflecting the estimated useful economic life of the intangible asset. Amortisation is disclosed under general and administrative expenses in the consolidated statement of comprehensive income.

 

Behavioural health technology and marketing know-how

As at 30 September 2018 behavioural health technology and marketing know-how was fully amortised.

 

As at 30 September 2017, the recoverable amount was estimated to be £nil, resulting in an impairment loss of £316,000 being recognised.

 

Further information of the Group's intangible asset can be found in note 14 of the consolidated financial statements.

 

 

20. Issued capital and reserves

 

Ordinary shares and share premium

 

 

Group and Company

 

Ordinary

 

 

 

shares of

Share

Share

 

1 pence

Capital

premium

 

Number

£'000

£'000

At 30 September 2017

27,119,130

7,727

79,421

Issued on 30 May for VCT/EIS qualifying investment

17,767,856

177

4,798

Issued on 30 May for placement

1,875,000

19

506

Transaction costs for issue of shares on 30 May

-

-

(340)

Issued on 13 June for the exercise of share options

15,000

-

4

Issued on 21 September for the consolidation and sub-division of shares

14

-

-

At 30 September 2018

46,777,000

7,923

84,389

 

Share capital

 

Placing shares

On 30 May 2018, the Company placed £5,500,000 before expenses of £340,000, comprising a placing of 17,767,856 VCT/EIS qualifying investment and 1,875,000 ordinary shares at a price of £0.28.

 

Exercise of share options

On 13 June 2018, 15,000 new ordinary shares were issued and allotted in the Company pursuant to the exercise of options granted under the IXICO EMI Share Option Plan 2014. The options were exercised at a share price of £0.305.

 

Consolidation and sub-division

On 21 September 2018, the Board approved a capital reorganisation which comprised a consolidation and sub-division of shares. Each of the new ordinary shares created pursuant to the capital reorganisation shall have the same nominal value of 1 pence as the existing ordinary shares due to a consolidation of every 100 existing ordinary shares into one consolidated share followed by an immediate sub-division of each consolidated share into 100 new ordinary shares.

 

The Company issued 14 additional ordinary shares so that the total number of ordinary shares in issue was divisible by 100. The aggregate subscription price for the additional ordinary shares as at the close price on 20 September 2018 was £4.19.

 

Merger relief reserve

In accordance with Section 612 of the Companies Act 2006 'Merger Relief', the Company issuing shares as consideration for a business combination, accounted at fair value, is obliged, once the necessary conditions are satisfied, to record the share premium to the merger relief reserve.

 

Reverse acquisition reserve

Reverse accounting under IFRS 3 'Business Combinations' requires the difference between the equity of the legal parent and the issued equity instruments of the legal subsidiary, pre-combination is recognised as a separate component of equity.

 

 

21. Share-based payments

 

Certain Directors and employees of the Group hold options to subscribe for shares in the Group under share option schemes. The number of shares subject to options, the periods in which they were granted and the period in which they may be exercised are given below.

 

The Group operates 1 share option scheme, the IXICO EMI Share Option Plan 2014 (2017: 2), which is equity settled. The change in the number of share options outstanding at end of period and the number weighted average exercise prices during the year were as follows:

 

Grant date

Outstanding at start of period

Granted

Exercised

Lapsed

Outstanding at end of period

IXICO EMI Share Option Plan 2014

 

 

 

 

1 October 2014

158,120

-

-

(30,118)

128,002

29 March 2016

966,940

-

(15,000)

(328,059)

623,881

7 February 2017

997,012

-

-

(80,000)

917,012

7 August 2017

713,940

-

-

-

713,940

4 June 2018

-

325,000

-

-

325,000

4 June 2018 (LTIP Award)

-

2,571,910

-

-

2,571,910

TOTAL

2,836,012

2,896,910

(15,000)

(438,177)

5,279,745

 

IXICO EMI Share Option Plan 2014

This scheme is open, by invitation, to Executive Directors and key management personnel. Participants are granted share options in the Group which contain standard and enhanced vesting conditions. These are subject to the achievement of individual employee and Group performance criteria as determined by the Board. Vesting period varies by award and the conditions approved by the Board.

 

Share options granted on 4 June 2018 have a 3-year vesting period with vesting triggered on the achievement of strategic corporate goals.

 

Long-Term Incentive Plan 2018

During the year ended 30 September 2018, the Group established a Long-Term Incentive Plan ('LTIP') for 3 participants Giulio Cerroni, Susan Lowther and John Hall. The LTIP was approved by shareholders on 29 May 2018 and a grant of 2,571,910 options to Giulio Cerroni, Susan Lowther and John Hall occurred on 4 June 2018 ('LTIP Award').

 

Share options granted in accordance with the LTIP Award are subject to share price performance measured against the 3-month volume weighted average price of the Company's ordinary shares in the 3 months prior to the third anniversary from the date of grant. The performance conditions of the LTIP Award are as follows 25% of the LTIP Award will vest if the share price increases by 50% above £0.28, which was the price of the placing of new ordinary shares announced in May 2018, increasing on a straight-line basis such that the full LTIP Award will vest if the share price increases by over 100%. The performance conditions are subject to a minimum floor price of £0.50 per ordinary share before any part of the LTIP Award can vest. On vesting the LTIP Award is subject to a holding period of up to 2 years. The award is also subject to continued employment, malus and clawback provisions.

 

 

 

   As at 30 September 2018

           As at 30 September 2017

 

 

Weighted

 

Weighted

 

 

average

 

average

 

 

exercise

 

exercise

 

Number

price

Number

price

Outstanding at start of period

2,836,012

£0.35

2,293,753

£0.33

Granted

2,896,910

£0.05

1,758,638

£0.35

Exercised

(15,000)

£0.31

(55,846)

£0.26

Lapsed

(438,177)

£0.33

(1,160,533)

£0.34

Outstanding at end of period

5,279,745

£0.18

2,836,012

£0.35

Exercisable at end of period

537,099

£0.36

248,470

£0.31

 

The number of share options outstanding and share options exercised at the end of the period was 5,279,745 or 90% of the total share option pool. The total share option pool represents 12.5% of the total ordinary shares in issue.

 

During the year ended 30 September 2018, 2,896,910 options were granted under the IXICO EMI Share Option Plan 2014 (2017: 1,758,638). The estimated fair value of the options granted is £307,462 (2017: £207,484). The inputs used in the measurement of fair value at grant date of the share options issued are as follows:

 

 

IXICO plc

IXICO plc

 

4 June 2018 grant

4 June 2018 grant ('LTIP')

Weighted average share price

£0.35

£0.35

Weighted average exercise price

£0.36

£0.01

Expected volatility

46.7%

46.7%

Expected life

6 years

6 years

Expected dividends

0%

0%

Risk-free interest rate

1.05%

1.05%

Model used

Monte Carlo followed by 'Hull White' trinomial lattice

Monte Carlo followed by 'Hull White' trinomial lattice

 

Note to assumptions:

Expected volatility

Expected volatility is based on historical performance of the share price using exponentially weighted moving average ('EWMA') function. This model uses exponential smoothing to give more weight to recent closing share prices than to more historic share prices. The share price period incorporated into the model spans from the reverse acquisition date on 14 October 2013 to the grant date.

 

Expected life

The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

 

Expected dividends

The historical dividend yield is 0.0%.

 

Risk-free interest rate

The risk-free rate has been taken from the United Kingdom gilts over the expected life of the share options.

 

Total share options outstanding have a range of exercise prices from £0.01 to £0.39 per option and the weighted average contractual life is 5.6 years (2017: 6.6 years). The total charge for each period relating to employee share-based payment plans for continuing operations is disclosed in note 9 of the consolidated financial statements.

 

 

22. Operating lease arrangements

 

 

 

 

 

Year ended

Year ended

 

30 September

30 September

 

2018

2017

 

£'000

£'000

Minimum lease payments under operating leases recognised as an expense in the period

131

130

 

As at the year-end, the Group has outstanding commitments under non-cancellable operating leases, which fall due as follows:

               

 

                Group

                Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

Within 1 year

129

145

-

-

In the 2 to 5 years inclusive

430

73

-

-

After 5 years

-

-

-

-

 

Operating lease payments represent rental payable by the Group for its registered office and printers.

 

The Group's current building lease will expire on 25 March 2019.

 

On 29 June 2018, the Group entered into new full repairing and insuring lease for a term of 3 years commencing 26 March 2019. The new lease includes a tenant's break option by which the Group will have the ability to terminate the lease on or after 25 September 2020 subject to providing the landlord with 6 months prior written notice. The rent deposit deed will be in the same form as the existing lease.

 

As at 30 September 2018, the building lease has 3.5 years to run and the printer lease has 2 years to run.

 

 

23. Financial risk management

 

In common with all other areas of the business, the Group is exposed to risks that arise from the use of financial instruments. The note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.

 

The main risks arising from the Group's financial instruments are liquidity, interest rate, foreign currency and credit risk. The Group's financial instruments comprise cash and various items such as trade receivables and trade payables, which arise directly from its operations.

 

Liquidity risk management

Liquidity risk is the risk that the Group will not be able to meet its obligations without incurring excessive losses. The Group monitors its levels of working capital to ensure that it can meet its repayments as they fall due. Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate management framework for the management of the Group's short-, medium- and long-term funding and liquidity management requirements.

 

The table below analyses the Group's financial assets and liabilities:

 

 

             Group

                Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

Loans and

Loans and

Loans and

Loans and

 

receivables

receivables

receivables

receivables

 

£'000

£'000

£'000

£'000

Assets as per statement of financial position

 

 

 

 

Trade and other receivables excluding prepayments

1,868

1,302

657

3,553

Cash and cash equivalents

7,861

2,414

7,229

396

 

9,729

3,716

7,886

3,949

 

 

            Group

                Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

 

Financial

Financial

Financial

Financial

 

liabilities at

liabilities at

liabilities at

liabilities at

 

amortised cost

amortised

cost

amortised cost

amortised

cost

 

£'000

£'000

£'000

£'000

Liabilities as per statement of financial position

 

 

 

 

Trade and other payables excluding statutory liabilities

1,161

1,401

140

113

 

1,161

1,401

140

113

 

The Group's financial liabilities are all due within 3 months of the statement of financial position date and it does not have any borrowings or payables on demand which would increase the risk of Group not holding sufficient reserves for repayment.

 

The principal current asset of the business is cash and cash equivalents, therefore it is the principal financial instrument employed by the Group. The Board ensure that the business maintains surplus cash reserves to minimise any liquidity risk.

 

Financial instruments are measured at amortised cost.

 

Market risk

Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate.

 

The Group operates an interest rate policy designed to optimise interest costs and reduce volatility in reported earnings.

 

The Group does not have any committed interest bearing borrowing facilities. Consequently, there is no material exposure to interest rate risk in respect of financial liabilities.

 

The Group holds all cash and cash equivalents with institutions with a recognised high rating. Interest rates on current accounts are floating. Changes in interest rates may increase or decrease the Group's finance income.

 

Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

 

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's overseas operating activities, primarily denominated in US Dollars, Euro and Swiss Franc and the Group's net investments in foreign subsidiaries. The Group's exposure to foreign currency changes for all other currencies is not material.

 

At present, the Group does not make use of financial instruments to minimise any foreign exchange gains or losses so any fluctuations in foreign exchange movements may have a material adverse impact on the results from operating activities. However, the Group does seek to minimise the exposure to such risk by matching local currency income with local currency costs where possible. The Group will also use financial instruments to minimise foreign exchange fluctuations where it is appropriate to do so. 

 

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities as at 30 September are as follows:

 

 

             Group

                Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

US Dollar exposure

USD'000

USD'000

USD'000

USD'000

Balance at end of period

 

 

 

 

Monetary assets

535

894

-

-

Monetary liabilities

(101)

(28)

-

-

Total exposure

434

866

-

-

 

 

             Group

               Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

Euro exposure

EUR'000

EUR'000

EUR'000

EUR'000

Balance at end of period

 

 

 

 

Monetary assets

151

565

-

-

Monetary liabilities

(113)

(126)

-

-

Total exposure

38

439

-

-

 

 

             Group

               Company

 

As at

As at

As at

As at

 

30 September

30 September

30 September

30 September

 

2018

2017

2018

2017

Swiss Franc exposure

CHF'000

CHF'000

CHF'000

CHF'000

Balance at end of period

 

 

 

 

Monetary assets

79

146

-

-

Monetary liabilities

(78)

(124)

-

-

Total exposure

1

22

-

-

 

Foreign currency sensitivity analysis

As at 30 September 2018, the sensitivity analysis assumes a +/-10% change of the USD/GBP, EUR/GBP and CHF/GBP exchange rates which represents management's assessment of a reasonably possible change in foreign exchange rates (2017: 10%). The sensitivity analysis was applied on the fair value of financial assets and liabilities.

 

If Sterling had been 10% (2017: 10%) weaker in relation to the US Dollar, Euro and Swiss Franc then the impact would have been as follows:

 

 

 

 

Group

 

 

£'000

£'000

£'000

£'000

 

USD

EUR

CHF

Total

Year ended 30 September 2018

(78)

(56)

(14)

(148)

Year ended 30 September 2017

(59)

(35)

(2)

(96)

 

 

If Sterling had been 10% (30 September 2017: 10%) stronger in relation to the US. Dollar, Euro and Swiss Franc then the impact would have been as follows:

 

 

 

 

Group

 

 

£'000

£'000

£'000

£'000

 

USD

EUR

CHF

Total

Year ended 30 September 2018

95

67

17

179

Year ended 30 September 2017

72

43

2

117

 

Fair value of financial assets and liabilities

There is no material difference between the fair value and the carrying values of the financial instruments because of the short maturity period of these financial instruments or their intrinsic size and risk.

 

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group's financial assets are cash and cash equivalents and trade and other receivables. The carrying value of these assets represents the Group's maximum exposure to credit risk in relation to financial assets. The Group makes appropriate enquiries of the counterparty and independent third parties to determine credit worthiness. The Group does not have any significant credit risk exposure to any single counterparty or Group of counterparties having similar characteristics.

 

The Group's policy is to minimise the risks associated with cash and cash equivalents by placing these deposits with institutions with a recognised high rating.

 

The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment. An allowance for impairment is made where there is an identified loss event, which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.

 

The Group continually reviews customer credit limits based on market conditions and historical experience. Note 16 in the consolidated financial statements sets out the impairment provision for credit losses on trade receivables and the ageing analysis of overdue trade receivables.

 

Capital risk management

The Group considers capital to be shareholders' equity as shown in the consolidated statement of financial position, as the Group is primarily funded by equity finance and is not yet in a position to pay a dividend. The Group had no borrowings at 30 September 2018.

 

The objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and for other stakeholders. In order to maintain or adjust the capital structure the Group may return capital to shareholders and issue new shares.

 

 

24. Related party transactions

 

Group

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

 

Key management compensation is disclosed in note 9 of the consolidated financial statements. Director emoluments are disclosed in the Directors' Remuneration Report.

 

During the year ended 30 September 2018, the Group was charged monitoring fees totalling £23,000 (2017: £16,000) from IP Group plc, a shareholder. The amount owed to IP Group plc at 30 September 2018 was £nil (2017: £nil).

 

During the year ended 30 September 2018, the Group was charged consultancy fees totalling £18,000 (2017: £nil) from Panoramic Digital Health SASU, owned by a former Executive Director. The amount owed to Panoramic Digital Health SASU at 30 September 2018 was £3,000 (2017: £nil).

 

Company

The Company is responsible for financing and setting Group strategy. The Company's subsidiaries carried out the Group's research and development strategy, employed all the staff including the Executive Directors and managed the Group's intellectual property. The Company provides interest bearing and unsecured funding to its subsidiaries with no fixed date of repayment. The Company manages the Group's funds and makes payments, including managing the payments of the Company.

 

During the year ended 30 September 2018, the Company has been charged £678,000 (2017: £335,000) for corporate services provided by subsidiary undertakings. Details of the inter-company balances can be found on the face of the Company statement of financial position.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
FR FKNDBKBDBABK

IXICO PLC Timeline

Newswire
December 11 2018

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