Interim Results for the six months ended 31 October 2009
(Thomson Reuters ONE) - For Immediate Release 21 January 2010 ANGLE plc Interim Results for the six months ended 31 October 2009Business significantly strengthened. New contract wins in Management services. Encouraging progress with the portfolio. Improved cash positionANGLE plc ('ANGLE' or the 'Company'), the international venture managementcompany focusing on the commercialisation of technology and the development oftechnology-based industry, today announces unaudited interim results for the sixmonths ended 31 October 2009.Financial Highlights * Profit before tax £0.6 million (H1 2009: loss £1.3 million) * Cash realisations of £1.4 million (H1 2009: nil) from sale of investments * Operating costs to manage and develop the portfolio reduced by 42% to £0.3 million (H1 2009: £0.5 million) * Planned expenditure on controlled investments reduced to £0.1 million (H1 2009: £0.7 million) reflecting ANGLE's partnership approach and the stage of development of the portfolio * Cash balance at 31 October 2009 more than doubled to £0.8 million (30 April 2009: £0.3 million) * Fair value of investment portfolio £3.9 million (30 April 2009 £4.4 million). The reduction reflected disposals. This fair value does not include the value of controlled investments.Operational HighlightsManagement services * Revenues from Management services excluding the completed Qatar Science & Technology Park (QSTP) contract up 8% at £1.6 million for the half year (H1 2009: £1.5 million) * Carbon Trust contract renewal worth up to £450,000 per annum for a minimum of two years and with the potential for extension to four years * London Manufacturing Advisory Services contract worth approximately £0.7 million over three years * Innovation Programme contract in Lincolnshire worth £2.3 million over three years, agreed after the period end * Sold order book worth £5.2 million at 31 December 2009 with a substantial pipeline of new business being developedPortfolio * Geomerics (47%) (computer games middleware) has secured sales with key reference customers and is in discussions with several major corporates regarding potential joint development or partnership arrangements. The first games incorporating Geomerics' technology are expected to be released in the Summer. * NeuroTargets (25%) (neuropathic pain) has secured a licensing deal to progress its galanin programme and completed research work demonstrating the potential to apply its patented technology in the treatment of Multiple Sclerosis and Alzheimer's Disease, in addition to the company's established neuropathic pain applications. * Novocellus (82%) (IVF embryo viability), together with its partner Origio, has completed the extensive work necessary to develop and agree the protocol for its clinical study. The protocol has been formally submitted for ethics approval and the aim is to complete the study by the end of March 2011. Assuming successful results, Novocellus will then receive substantial milestone payments. * Parsortix (78%) (medical diagnostics / foetal cell capture) has extended its IP protection with new patent submissions covering the capture of cancer cells and stem cells. Discussions have been initiated with key industry players and the aim is to conclude a corporate deal in the financial year to 30 April 2011.Garth Selvey, Chairman, commented:"ANGLE performed well during the half year. The business has significantlystrengthened, with new contract wins in Management services and a greatlyimproved cash position. Encouraging progress was made with the leadinginvestments, maintaining the prospect of exceptional returns in the future."These Interim Results may contain forward looking statements. These statementsreflect the Board's current view, are subject to a number of material risks anduncertainties and could change in the future. Factors which could cause orcontribute to such changes include, but are not limited to, the general economicclimate and market conditions, as well as specific factors relating to thefinancial or commercial prospects or performance of individual portfoliocompanies within the Group's portfolio of investments.Enquiries: ANGLE plc 01483 685830 Andrew Newland, Chief Executive Ian Griffiths, Finance Director Collins Stewart Europe Limited 0207 523 8350 Stewart Wallace Scott Harris 0207 653 0030 Stephen Scott, James O'Shaughnessy, Harry DeeNotes to EditorsFounded in 1994, ANGLE is an international venture management company focusingon the commercialisation of technology and the development of technology-basedindustry. ANGLE creates, develops and advises technology businesses on its ownbehalf and for its clients.ANGLE's specialist Management services business provides support on afee-for-service basis to major clients around the world involved in incubation,IP commercialisation, SME innovation and growth and the operation of science &technology parks.ANGLE also owns a portfolio of companies with high growth potential in themedical and technology sectors in both the UK and the US. These have beendeveloped whilst subsidiaries of ANGLE using its proprietary Progeny® process. ANGLE seeks to retain a substantial shareholding in these companies with a viewto ongoing returns from dividend, milestone, royalty and capital returns.ANGLE's venture management and technology commercialisation skills are ofincreasing relevance as global economies focus on regeneration, innovation andvalue added components to their industries. ANGLE's technology skills in IT andsoftware, medical and life sciences, clean tech and renewable energies aredirectly relevant to major growth markets of the future and are marketed asspecialised Management services.ANGLE is listed on AIM (AGL.L); further information can be foundonwww.ANGLEplc.com ANGLE plcCHAIRMAN'S STATEMENTIntroductionIn spite of tough economic conditions and increased competition, ANGLE performedwell during the half year.The cash position has greatly improved. Growth in the ongoing Managementservices business, excluding the now completed Qatar Science & Technology Park(QSTP) contract, was maintained and there was continued progress with theportfolio companies.The business is being tightly managed for future growth, and costs continue tobe kept tightly under control.ResultsDuring the half year, ANGLE moved back into profitability generating a profitbefore tax of £0.6 million (H1 2009: loss £1.3 million).Profits were delivered in both the Management services business and from theportfolio.The sale of non-core investments generated cash realisations of £1.4 million (H12009: nil) with a fair value gain of £0.9 million.After disposals, the fair value of the remaining investment portfolio wasunchanged at £3.9 million (30 April 2009 £4.4 million).Operating costs to manage and develop the portfolio were reduced by 42% to £0.3million (H1 2009: £0.5 million). Reflecting ANGLE's partnership approach andthe stage of development of the portfolio, continued expenditure on controlledinvestments was kept low at only £0.1 million (H1 2009: £0.7 million). Conversely, business development costs were substantially increased in theManagement services business to support future growth.The cash balance more than doubled during the half year to £0.8 million at 31October 2009 (30 April 2009: £0.3 million).Management servicesRevenues from Management services, excluding QSTP, continued to grow and were up8% at £1.6 million for the half year (H1 2009: £1.5 million).Despite difficult economic conditions and increasing competitive pressures,ANGLE's Management services business is resilient as a result of its establishedlong term contracts primarily for public sector clients. There remain risksparticularly in relation to UK Government contracts and ANGLE is proactivelyseeking to diversify its business geographically through sustained businessdevelopment efforts, most notably in the Middle East.The business development efforts undertaken to date have established a number ofstrong client relationships in the Middle East, which it is expected willtranslate into major management contracts in the future.Portfolio companiesANGLE has continued its tight focus on its existing portfolio, with emphasis onits leading investments. ANGLE continues to retain large equity stakes in asmall number of portfolio companies with high growth potential and, because ofits high level of ownership, is able to manage these investments to maximise theeventual return to ANGLE shareholders. ANGLE has holdings ranging from 47% to82% in its leading investments.ANGLE's controlled investments are consolidated so that their fair value is notincluded in the investment portfolio fair value in the statement of financialposition and their operating costs are expensed in the results.During the half year, encouraging progress was made with four of the portfoliocompanies: * Geomerics (47%) (computer games middleware) has secured sales with key reference customers and is in discussions with several major corporates regarding potential joint development or partnership arrangements. The first games incorporating Geomerics' technology are expected to be released in the Summer. * NeuroTargets (25%) (neuropathic pain) has secured a licensing deal to progress its galanin programme and completed research work demonstrating the potential to apply its patented technology in the treatment of Multiple Sclerosis and Alzheimer's Disease in addition to the company's established neuropathic pain applications. * Novocellus (82%) (IVF embryo viability), together with its partner Origio, has completed the extensive work necessary to develop and agree the protocol for its clinical study. The protocol has been formally submitted for ethics approval and the aim is to complete the study by the end of March 2011. Assuming successful results, Novocellus will then receive substantial milestone payments. * Parsortix (78%) (medical diagnostics / foetal cell capture) has extended its IP protection with new patent submissions covering the capture of cancer cells and stem cells. Discussions have been initiated with key industry players with the aim to conclude a corporate deal in the financial year ending 30 April 2011.CashflowThe cash balance more than doubled during the half year to £0.8 million at 31October 2009 (30 April 2009: £0.3 million) and current liabilities weresignificantly reduced. The improved cash position reflected continued tightcost control, the ongoing profitability of the Management services business andthe sale of non-core investments during the half year.With increased cash reserves and substantially reduced overheads and investmentrequirements, the Directors believe that ANGLE is well placed to grow itsManagement services business and realise value from its investments in thefuture.It is the Company's intention to establish a distribution policy once surpluscash has been generated.Outlook for the full financial yearRecognising the inherent risks within the UK economy, ANGLE is both working tomaintain and strengthen its Management services business in the UK, whilst atthe same time implementing a proactive business development programme to growits specialist Management services business internationally. There arepromising signs that major international Management services contracts may besecured over the next twelve months to substantially increase the scale of thisbusiness.The environment for developing technology companies is very difficult at presentand the availability of traditional banking and venture capital funding for suchcompanies is extremely limited. To address this, ANGLE has proactivelydeveloped a partnership approach to developing its portfolio companies, whichseeks to secure major corporate partners for each company to take on the costsof further development. This approach is intended to provide ANGLE with thepotential for substantial upside returns without the risk of ongoing developmentcosts. The partnership approach has so far been successfully deployed withNeuroTargets and Novocellus, and is being actively pursued with Geomerics andParsortix.ANGLE's portfolio is maturing and the potential for substantial returns isnearing. The medium term business plan envisages growing trading profits fromManagement services enhanced by returns from dividends, milestone payments,royalties and capital returns from its investments.ANGLE's venture management and technology commercialisation skills aremarketable and of increasing relevance as global economies focus onregeneration, innovation and value added components to their industries. ANGLE's technology skills in IT and software, medical and life sciences,cleantech and renewable energies are directly relevant to major growth marketsof the future.Garth SelveyChairman20 January 2010ANGLE plcOPERATIONS SUMMARYIntroductionDuring the half year, ANGLE developed its Management services business,progressed four of its portfolio companies through key milestones andstrengthened the cash balance significantly.Management servicesTurnover excluding the completed QSTP contract was up 8% at £1.6 million for thehalf year (H1 2009: £1.5 million). Substantial business development efforts arein progress to build the Management services business further.ANGLE's business is focused on long term management contracts, typically threeyears or more in duration, and this gives good visibility on future revenues. In the current economic conditions, a number of Governments are seeking toexpand their activities in ANGLE's core areas of activity including incubation,innovation, support for SMEs (small and medium sized enterprises) and developingthe knowledge-based economy.Two significant new contracts were secured during the half year and a thirdshortly after the period end, all of which were subject to competitivetendering. These are described below. As a result, the business had a solidsold order book worth £5.2 million at 31 December 2009. Major businessdevelopment efforts continue, particularly in the Middle East, where substantialopportunities are being developed notably in Saudi Arabia, Bahrain and theUnited Arab Emirates.Carbon Trust ANGLE IncubatorANGLE has delivered incubation support services on behalf of the Carbon Trustsince 2004 and was awarded a further contract starting in August 2009, worth upto £450,000 per annum for a minimum of two years and up to four years.The objective of the programme is to help qualifying developers of low carbontechnologies build their businesses. Support includes help with business andfinancial plan development, market investigations, mentoring the team, productdevelopment advice, IP guidance, preparation for investor rounds or licencenegotiations and raising investment capital.ANGLE has provided support to over thirty cleantech companies in renewable andalternative energy, industrial process efficiency, materials, and builtinfrastructure sectors. These include high growth SMEs, private start-ups, andUniversity spin-outs which, with ANGLE's support, have gone on to raise over £42million of private investment funding (during or within 12 months of incubation)as well as one IPO. ANGLE has developed significant knowledge of low-carbontechnologies and routes to commercialisation.New Energy Finance have identified the Carbon Trust ANGLE incubator as one ofthe top performing cleantech incubators worldwide.London Manufacturing Advisory Services (MAS)ANGLE partnered with Grant Thornton, PERA and Unipart to win the London MAScontract commissioned by the London Development Agency in September 2009.ANGLE's share of the contract is worth an estimated £0.7 million over threeyears.MAS is a public sector funded programme to support UK manufacturers to: * Survive the current economic downturn and to prepare for the up turn; and * Improve their ability to compete in advanced manufacturing markets.There is particular emphasis on supporting manufacturing companies to find newopportunities for the medium to long-term competitiveness of manufacturing inthe UK. ANGLE's particular strengths lie with the adoption and development ofnew technologies and innovation.ANGLE intends to build on the collaborative approach adopted for London MAS toenable ANGLE to participate in consortia to bid for much larger contracts.Lincoln InnovationFollowing ANGLE's successful delivery of Innovation Lincolnshire since May2007, in November 2009 ANGLE won a highly competitive proposal to deliverInnovation Advice and Guidance in Lincolnshire, a product in the UK Government'sSolutions for Business portfolio, on behalf of Lincolnshire County Council.The Innovation Programme contract is worth £2.3 million over three years.The programme brings the techniques and benefits of innovation to smallbusinesses, identifying openings for innovation based business improvement.These include stimulating growth through the introduction of new products andservices and delivering operational improvement through innovative businessprocess change. ANGLE's specialist consultants provide a complete SME innovationsupport service, from innovation opportunity identification, training, businessanalysis and support to project implementation.ANGLE's success in securing this contract reflects the methodologies, deliveryprocesses, expertise and management that ANGLE has developed to driveinnovation.Portfolio valueANGLE's portfolio of investments comprises both non-controlled investments(shown at fair value in the statement of financial position) and controlledinvestments (whose value, which the Board considers substantial, is excludedfrom the fair value in the statement of financial position).In arriving at valuations, the Board has taken into account the need to mark tomarket, an extremely difficult fund raising and exit environment anduncertainties as to how businesses will be able to develop in the presentclimate.After disposals, the fair value of the remaining Investment Portfolio wasunchanged at £3.9 million (30 April 2009 £4.4 million).Non-controlled investmentsProvexisDuring the half year, ANGLE's residual holding in Provexis plc was sold for £1.4million generating a fair value gain of £0.9 million and realising cash forworking capital, investment and other purposes. This action strengthenedANGLE's statement of financial position and ensured the Group is in a betterposition to realise value from its core investments.Acolyte BiomedicaThe deferred consideration of up to £4.7 million due in respect of the sale ofthe investment in Acolyte Biomedica (medical diagnostics / MRSA detection)remains subject to dispute between the former Acolyte shareholders and thepurchaser. ANGLE is awaiting the outcome of legal action by the major Acolyteshareholder. It is understood that this action is in the formal informationdisclosure phase, progressing as planned, and that a Court date has been set inOctober 2010. Once the outcome of this action is known, ANGLE expects to pursueits own claim against the purchaser. At present ANGLE has no exposure to legalcosts.Geomerics (47%) (computer games middleware)Geomerics has successfully developed and launched its 'Enlighten' product,dramatically improving the lighting of computer games and enhancing the userexperience.Multiple sales have been secured from key reference customers includingElectronic Arts (DICE), CCP and FunCom. The sales prospect list is promising. The computer games market has contracted somewhat in current economicconditions but remains a strong performer and is forecasted to grow to anestimated $46.5 billion market by the end of 2010.Underlying Geomerics' products is a unique lighting technology platform, whichhas a range of potential applications in further markets including CGI (computergenerated imagery) and Architectural Visualisation.During the half year, as well as further progressing sales, the company hasattracted considerable corporate interest from companies such as Microsoft,Intel, Sony, nVidia, AMD and Autodesk. Discussions are in progress with a numberof these with regard to a strategic alliance.Geomerics has also started work on a second product, leveraging their graphicsskills to visualise complex IT networks in 3D. This project is in collaborationwith Intergence Systems, who specialise in IT network optimisation. The projecthas been awarded £0.5m of funding from the Technology Strategy Board, and isalready attracting interest from potential customers.The first games incorporating Geomerics' technology are expected to be releasedin the Summer.NeuroTargets (25%) (neuropathic pain)NeuroTargets has had a successful half year securing a licensing deal toprogress its galanin programme and completing research work demonstrating thepotential to apply its patented technology in treatment of Multiple Sclerosis(MS) and Alzheimer's Disease (AD) in addition to the company's establishedneuropathic pain applications.NeuroTargets has licensed its intellectual property in relation to neuropathicpain therapeutic molecules to the University of Bristol, who have used thatbackground IP to successfully raise further funds to advance the galaninprogramme. Wellcome Trust have agreed to provide funding for a pre-clinicalresearch project at the University of Bristol to investigate these smallmolecules. The intention is that, if this work is successful, the smallmolecules can be patented and then licensed to 'big pharma' as a potentialtherapeutic agent.ANGLE is pleased with the funding from the Wellcome Trust as it bringssubstantial funding to progress the galanin small molecules and providesNeuroTargets with the potential for a significant share in potential royaltyincome that may arise on the licensing of the molecules to 'big pharma'.In addition to the work on neuropathic pain, through the work of its ChiefScientific Officer, Professor Wynick, NeuroTargets has also progressed theinvestigation of the use of galanin molecules for Multiple Sclerosis (MS) andAlzheimer's disease (AD) and has had positive initial results. The MS resultswere published in the prestigious scientific journal PNAS (Proceedings of theNational Academy of Sciences of the United States of America) September 8, 2009and this has attracted significant initial interest from 'big pharma'.NeuroTargets has submitted applications for patents over the use of galaninmolecules for the treatment of MS and AD. If the Wellcome Trust funded work onthe small molecules is successful, then the small molecules may also havepotential application for MS and/or AD. There is also the potential that 'bigpharma' may develop other small molecules which may be used in conjunction withNeuroTargets' patents for MS and/or AD.Controlled investmentsControlled investments are consolidated as subsidiaries and are not shown atfair value on the statement of financial position. Their value, which the Boardconsiders substantial, is excluded from the fair value of £3.9 million discussedabove.Novocellus (82%) (medical diagnostics IVF embryo viability)Novocellus has developed a patent protected system, EmbryoSure®, for selectingthose embryos most likely to lead to a successful pregnancy. The system hasbeen tested on a total of more than 1,200 human embryos in a research study andtwo retrospective pilot clinical studies. These studies have shown that aminoacid profiling (AAP) of the embryo indicates a correlation between the embryoamino acid turnover and the chance of a pregnancy. This non-invasive, rapid,metabolic screen permits for the first time the early identification of viablehuman embryos (Day 2/3) without requiring prolonged culture, for example to theblastocyst stage.Based on the available pre-clinical and clinical data, it is expected that aminoacid profiling (AAP) of spent culture medium will increase success rates indaily clinical practice by providing new information to improve embryo selectionfor transfer. This is expected to lead to a 25% uplift in the clinicalpregnancy rate for IVF and to encourage the adoption of single embryo transfer(SET). Increased use of SET will lead to a reduction in health risks for themother and baby.Novocellus has secured a corporate deal with Origio a/s (formerly known asMediCult a/s) to fund and manage the final clinical study process and takeresponsibility for the product going forward. Origio supplies around one infive of the global IVF clinics with culture media and related products and isideally placed to ensure that EmbryoSure® is widely adopted, giving Novocellusaccess to the largest IVF customer base in the world.During the half year, Novocellus has worked with Origio to complete theextensive work necessary to prepare for a definitive clinical studydemonstrating a viable clinical application suitable for use in a clinicalsituation and providing statistical validity for the medical claims. A detailedprotocol for the clinical study has been developed. Participating IVF clinicshave been confirmed, statistical procedures have been developed to analyse theresults and the regulatory processes have been addressed.ANGLE is pleased to report that all key issues have successfully been addressedand the clinical study protocol has been formally submitted for ethics approval. It is expected that final approval of the study protocol will be obtained bythe end of March with patient recruitment starting in early April.The finish date for the study cannot be stated with certainty because the studydesign allows for early completion, if the results are satisfactory following aninterim analysis of the data. The number of patients needed for statisticalsignificance, and thus the duration of the study, will be dependent on thedistribution of the patient results. The current estimate is that the clinicalstudy will be complete by the end of March 2011.Successful study results are defined as an uplift in clinical pregnancy rates of25% or greater in comparison to an agreed baseline. Successful study resultswill trigger payment of the first milestone payment to Novocellus of £1.0million (in cash or Origio publicly listed voting shares, at their discretion)followed by a second milestone payment to Novocellus of £3.5 million (similarlyin cash or shares), which will be payable when net sales of EmbryoSure® productsexceed £4.5 million in a calendar year. Given the involvement of leading IVFclinics in the study, sales are expected to follow rapidly once the product hasreceived the necessary regulatory approvals. If shares are received in payment,these will be tradable and not subject to lock-in.Thereafter, with successful study results, Novocellus will receive a 25% royaltyon sales generated in countries in which patent protection for any element ofthe EmbryoSure® Rights are then subsisting and which are likely to include allcountries in Europe, USA, Japan, Canada, China, India and Australia. Themaximum market potential for EmbryoSure® has been estimated as $0.5 billion perannum for 100% market penetration, based on data sourced from the InternationalCommittee for Monitoring Assisted Reproductive Technologies (ICMART). By way ofillustration, if 10% of the market adopted the EmbryoSure® product, thepotential resulting sales of $50 million would generate c. £7.5 million perannum in royalties for Novocellus each year for the remaining life of thepatents, expected to be up to 17 years.Parsortix (78%) (medical diagnostics / foetal cell capture)Parsortix has developed the first ever non-invasive testing platform for theunborn baby. Pregnant women have a very small number of their baby's cellscirculating in their blood; at most one foetal cell for 500 million maternalcells. Parsortix has developed a separation device, which can capture intactfoetal cells (as opposed to merely DNA fragments) in maternal blood when only1.5ml of maternal blood is flowed through the device.At present, testing for early definitive diagnosis for chromosomal abnormalitiesassociated with Down's, Turner, and Klinefelter syndromes, as well as otherdisorders due to genetic abnormalities such as spina bifida is limited to highrisk category patients where an invasive procedure such as amniocentesis orchorionic villi sampling can be justified.In the US market alone there are some 375,000 such invasive tests undertaken perannum leaving the remaining 2.2 million pregnancies with no advance warning ofpotential problems. If the invasive test can be replaced with a simple andcomparatively inexpensive maternal blood test, it is considered that theprocedure will be widely adopted with the potential for 2.6 million tests perannum in the US alone. The current cost of the amniocentesis procedure in theUS is around $1,200. The Parsortix technique is expected to substantiallyreduce this cost.During the half year, Parsortix began exploring the potential for a partnershipwith a major corporate and actively engaged with a number of multi-nationalcompanies with that in mind. The ideal corporate partner will have substantialfinancial resources and own diagnostic technologies which can be bundled withParsortix's cell capture technology to provide a complete solution for pre-nataldiagnostics.The objective is to secure a partnership similar to that established forNovocellus, in which the ongoing costs to develop and take the product to marketare covered by the partner, whilst a substantial share of the upside fromresulting revenues is retained by Parsortix.Having proven its separation technology, during the half year Parsortix hasdeveloped its intellectual property as a platform technology and extensivelyprotected the intellectual property for a range of cell separation applicationsin addition to foetal cells. Patent applications have been submitted relatingto the separation of a range of cells including stem cells, metastatic cancercells and bacteria.If successful, the development of non-invasive capture systems patented byParsortix for metastatic cancer cells and for stem cells, in particular, woulduniquely address major worldwide markets in the future.Discussions continue with major corporates. Parsortix's technology addressesthe key element of non-invasive cell capture. To be valuable in a clinicalsense, this technology needs to be combined with diagnostic technologies toinvestigate the health of the cell. This combination is complex and requiresParsortix to be thorough in its partner investigation and analysis. As aresult, the establishment of a robust partnership deal will take a significantamount of elapsed time. The aim is to conclude a corporate deal for Parsortixduring the financial year to 30 April 2011.*Percentage shareholdings based on issued share capital as at 31 October 2009.ANGLE plcCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE SIX MONTHS ENDED 31 OCTOBER 2009 Note Six months ended Year ended 31 October 31 October 30 April 2009 2008 2009 (Unaudited) (Unaudited) (Audited) £ £ £ Revenue 3 1,673,829 2,523,653 5,064,381 Change in fair value 6 844,813 (912,039) (2,931,460) Operating costs Management services (1,468,554) (1,665,111) (3,364,063) Ventures (262,668) (451,511) (880,052) Controlled investments (115,820) (657,715) (1,082,145) Share based payments (34,984) (106,244) (185,599) _____________ _____________ _____________ (1,882,026) (2,880,581) (5,511,859) Operating profit / (loss) 636,616 (1,268,967) (3,378,938) Finance income - 12,267 13,940 Finance costs (4,618) 2,785 (286) _____________ _____________ _____________ Net finance income (4,618) 15,052 13,654 _____________ _____________ _____________ Profit / (loss) before tax 631,998 (1,253,915) (3,365,284) Tax 4 - (118,942) (230,205) _____________ _____________ _____________ Profit / (loss) for the period and total comprehensive income for the period 631,998 (1,372,857) (3,595,489) =========== =========== =========== Earnings / (loss) per share 5 Basic and Diluted (pence per share) 2.36 (5.13) (13.42)ANGLE plcCONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 OCTOBER 2009 Note 31 October 31 October 30 April 2009 2008 2009 (Unaudited) (Unaudited) (Audited) £ £ £ ASSETS Non-current assets Non-controlled investments 6 2,435,229 4,373,504 2,395,000 Other receivables 6 1,500,000 1,902,724 1,520,239 Property, plant and equipment 36,640 66,470 47,846 Intangible assets 124,718 194,126 163,853 ____________ ____________ ____________ Total non-current assets 4,096,587 6,536,824 4,126,938 Current assets Non-controlled investments 6 - 130,292 499,165 Trade and other receivables 880,117 677,128 504,425 Cash and cash equivalents 751,028 397,685 319,819 ____________ ____________ ____________ Total current assets 1,631,145 1,205,105 1,323,409 ____________ ____________ ____________ Total assets 5,727,732 7,741,929 5,450,347 =========== =========== =========== EQUITY AND LIABILITIES Equity Issued capital 2,713,293 2,713,293 2,713,293 Share premium account 13,701,935 13,701,935 13,701,935 Share based payments reserve 1,550,872 1,628,673 1,523,488 Other reserve 2,553,356 2,553,356 2,553,356 Translation reserve (280,424) (342,570) (320,881) Retained earnings (15,368,434) (13,945,053) (16,008,032) ESOT shares (342,115) (355,453) (342,115) ____________ ____________ ____________ Total equity attributable to equity shareholders of parent 4,528,483 5,954,181 3,821,044 ____________ ____________ ____________ Liabilities Non-current liabilities Controlled investments - convertible loans 288,263 185,678 321,011 ____________ ____________ ____________ Total non-current liabilities 288,263 185,678 321,011 Current liabilities Trade and other payables 774,470 1,473,111 1,065,274 Taxation 136,516 128,959 243,018 ____________ ____________ ____________ Total current liabilities 910,986 1,602,070 1,308,292 ____________ ____________ ____________ Total liabilities 1,199,249 1,787,748 1,629,303 ____________ ____________ ____________ Total equity and liabilities 5,727,732 7,741,929 5,450,347 =========== =========== ===========ANGLE plcCONSOLIDATED STATEMENT OF CASH FLOWSFOR THE SIX MONTHS ENDED 31 OCTOBER 2009 Six months ended Year ended 31 October 31 October 30 April 2009 2008 2009 (Unaudited) (Unaudited) (Audited) £ £ £ Operating activities Profit / (loss) before tax 631,998 (1,253,915) (3,365,284) Adjustments for: Depreciation of property, plant and equipment 17,784 21,019 39,563 (Profit) / loss on disposal of fixed assets - - 1,116 Amortisation of intangible assets 7,926 814 16,323 Exchange differences 5,166 (16,407) 21,799 Net finance (income) / cost 4,618 (15,052) (13,654) Change in fair value (844,813) 912,039 2,931,460 Share based payments 34,984 106,244 185,599 Changes in working capital: (Increase) / decrease in trade and other receivables (472,633) (41,568) 106,942 Increase / (decrease) in trade and other payables (167,479) (356,203) (757,987) Operating cashflows: Research and development tax credits received - 44,960 44,960 Corporation tax paid (106,502) - - ____________ ____________ ____________ Net cash from / (used in) operating activities (888,951) (598,069) (789,163) Investing activities Purchase of property, plant and equipment (7,689) (8,390) (11,909) Disposal of property, plant and equipment - - 20 Purchase of intangible assets - (985) (2,214) Purchase of non-controlled investments (40,229) - - Provision of convertible loans - - (13,250) Proceeds from sale of investments 1,368,786 - 20,249 Interest paid (855) (2,012) (1,063) Interest received 147 13,417 15,759 ____________ ____________ ____________ Net cash from / (used in) investing activities 1,320,160 2,030 7,592 Financing activities Capital elements of finance lease contracts - (4,560) (4,560) Proceeds from issue of convertible loans - 28,087 135,753 ____________ ____________ ____________ Net cash from / (used in) financing activities - 23,527 131,193 Net increase / (decrease) in cash and cash equivalents 431,209 (572,512) (650,378) Cash and cash equivalents at start of period 319,819 970,197 970,197 ____________ ____________ ____________ Cash and cash equivalents at end of period 751,028 397,685 319,819 =========== =========== ===========ANGLE plcCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 31 OCTOBER 2009Attributable to equity holders of the Group Share based Issued Share payments Other Translation Retained ESOT Total capital premium reserve reserve reserve earnings shares Equity (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) £ £ £ £ £ £ £ £ At 1 May 2008 2,713,293 13,701,935 1,522,429 2,553,356 (297,311) (12,617,357) (355,453) 7,220,892 For the period to 31 October 2008 Consolidated profit / (loss) (121,618) (1,372,857) (1,494,475) Share based payments 106,244 76,359 182,603 Deemed disposal of subsidiaries 45,161 45,161 ________ ________ ________ ________ ________ ________ ________ ________ At 31 October 2008 2,713,293 13,701,935 1,628,673 2,553,356 (342,570) (13,945,053) (355,453) 5,954,181 For the period to 30 April 2009 Consolidated profit / (loss) 98,048 (2,222,632) (2,124,584) Share based payments 79,355 (76,359) 2,996 Released on forfeiture / lapse (184,540) 184,540 - Utilised on share schemes 13,338 13,338 Deemed disposal of subsidiaries (24,887) (24,887) ________ ________ ________ ________ ________ ________ ________ ________ At 1 May 2009 2,713,293 13,701,935 1,523,488 2,553,356 (320,881) (16,008,032) (342,115) 3,821,044 For the period to 31 October 2009 Consolidated profit / (loss) 40,457 631,998 672,455 Share based payments 34,984 34,984 Released on forfeiture / lapse (7,600) 7,600 - ________ ________ ________ ________ ________ ________ ________ ________ At 31 October 2009 2,713,293 13,701,935 1,550,872 2,553,356 (280,424) (15,368,434) (342,115) 4,528,483 ======== ========= ======== ======== ======== ========== ======== ========All attributable to equity shareholders of the parentShare based payments reserveThe share based payments reserve account is used for the corresponding entry tothe share based payments charged through: a) the statement of comprehensiveincome for staff incentive arrangements in the Group; b) the statement ofcomprehensive income for staff incentive arrangements in the controlledinvestments; and c) the statement of financial position for acquired intangibleassets in the controlled investments comprising intellectual property (IP). These components are separately identified in the table below.Transfers are made from this reserve to retained earnings as the related shareoptions are exercised, lapse or expire or as a controlled investment becomesnon-controlled.Translation reserveThe translation reserve account comprises cumulative exchange differencesarising on consolidation from the translation of the financial statements ofinternational operations. Under IFRS this is separated from retained earnings.ESOT sharesThese relate to shares purchased by the ANGLE Employee Share Ownership Trust andused to assist in meeting the obligations under employee remuneration schemes. Share based payments reserve Controlled Controlled Group investments investments employees employees IP Total £ £ £ £ At 1 May 2008 1,328,522 48,113 145,794 1,522,429 Charge for the period 92,946 13,298 - 106,244 _________ _________ _________ _________ At 31 October 2008 1,421,468 61,411 145,794 1,628,673 Charge for the period 75,058 4,297 - 79,355 Released on forfeiture / lapse (184,540) - (184,540) _________ _________ _________ _________ At 1 May 2009 1,311,986 65,708 145,794 1,523,488 Charge for the period 33,977 1,007 - 34,984 Released on forfeiture / lapse (886) (6,714) - (7,600) _________ _________ _________ _________ At 31 October 2009 1,345,077 60,001 145,794 1,550,872 ========== ========== ========= =========ANGLE plcNOTES TO THE INTERIM FINANCIAL INFORMATIONFOR THE SIX MONTHS ENDED 31 OCTOBER 20091 Basis of preparation and accounting policiesThese Condensed Interim Financial Statements do not constitute statutoryfinancial statements as defined in section 434 of the Companies Act 2006 and areunaudited. The comparative information for the six months ended 31 October2008 is also unaudited. The comparative figures for the year ended 30 April2009 have been extracted from the Group financial statements as filed with theRegistrar of Companies. The report of the auditors on those accounts wasunqualified and did not contain a statement under section 498 of the CompaniesAct 2006. The accounting policies applied are consistent with those described inthe annual financial statements for the year ended 30 April 2009, as amended forthe adoption of IAS1 revised and IFRS 8 Operating Segments.These Condensed Interim Financial Statements are the unaudited interimconsolidated financial statements (the "Condensed Interim Financial Statements")of ANGLE plc, a company incorporated in Great Britain and registered in Englandand Wales, and its subsidiaries (together referred to as the "Group") for thesix month period ended 31 October 2009 (the "interim period").The Condensed Interim Financial Statements have been voluntarily prepared inaccordance with International Accounting Standard 34 Interim Financial Reporting("IAS 34"), as adopted by the EU, and on the basis of the accounting policiesset out in the Report and Accounts 2009, as amended for the adoption of IAS1revised and IFRS 8 Operating Segments. Where necessary, comparative informationhas been reclassified or expanded from the previously reported Condensed InterimFinancial Statements to take into account any presentational changes made in theReport and Accounts 2009.The Condensed Interim Financial Statements were approved by the Board andauthorised for issue on 21 January 2010.Going concernThe Directors have reviewed the projections for the forthcoming 12 month periodfrom the date of approval of these Interim Financial Statements and based on thelevel of existing cash, projected income and expenditure, the Directors aresatisfied that the Company and Group have adequate resources to continue inbusiness for the foreseeable future. Accordingly the going concern basis hasbeen used in preparing the Interim Financial Statements.Critical accounting estimates and judgementsThe preparation of the Interim Financial Statements requires the use ofestimates and assumptions that affect the reported amounts of assets andliabilities at the date of the Financial Statements and the reported amounts ofrevenues and expenses during the reporting period. Although these estimates andassumptions are based on management's best knowledge of the amount, event oractions, actual results ultimately may differ from those estimates.The estimates and assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities relate to thevaluation of unlisted investments held at fair value in accordance with IAS39and on the basis of the accounting policies in the Report and Accounts 2009, andto the fair value of other receivables - see Note 6.2 Summary segmental analysisThe Group operates in one principal area of activity - technology wealthcreation through the commercialisation of intellectual property and thedevelopment of technology industry.The primary business segments are: * Management services - provision of management services to clients including research organisations, corporate and governmental organisations on a fee-for-service basis. This business segment provides a platform for the Ventures activities. * Ventures - activities to establish, develop and create value in technology companies. The Group uses a proprietary Progeny® process to develop these companies, which are referred to as Progeny® companies. ANGLE's unique business model involves ANGLE founding new companies which it controls during the critical early stages of development, before securing third party funding.Under IFRS, the accounting for Progeny® companies divides into controlledinvestments and non-controlled investments.-Controlled investments - Progeny® companies where the Group has control,typically as a result of owning in excess of 50% of the equity. These areconsolidated and the Group's investment costs are expensed in the statement ofcomprehensive income.-Non-controlled investments - Progeny® companies where the Group does not havecontrol. These investments are held in the statement of financial position atfair value, with changes in fair value passing through the statement ofcomprehensive income.The nature of these operations is significantly different. The primary formatand segmentation by class of business has been provided on the face of theconsolidated interim statement of comprehensive income.3 RevenueThe breakdown of revenue by geographical and by business segment is set outbelow: Six months ended Year ended 31 October 31 October 30 April 2009 2008 2009 (Unaudited) (Unaudited) (Audited) £ £ £ Management services United Kingdom 1,424,556 1,229,406 2,605,648 North America 197,576 273,193 543,654 Middle East - 928,892 1,772,498 ___________ ___________ ___________ 1,622,132 2,431,491 4,921,800 Ventures United Kingdom 25,581 26,222 52,688 Controlled investments NorthAmerica 26,116 65,940 89,893 ___________ ___________ ___________ Total revenue 1,673,829 2,523,653 5,064,381 ========== ========== ==========Revenue from Management services represents fees received from clients. Revenuefrom Ventures represents fees received from non-controlled investments foraccounting and other services provided by the Company until those companies takethose activities in-house. Revenue from Controlled investments represents therevenue of those businesses, which is consolidated.4 TaxThe Group is eligible for the substantial shareholdings relief UK corporationtax exemption. This results in the gain from any disposals of UK investmentswhere the Group has an equity stake greater than 10%, subject to certain othertests, being free of corporation tax.Tax is therefore based on the profits in the Management services business asrelieved by losses incurred in the establishment and development of Ventures.Loss relief may not absorb the tax in relation to all of the profits and wherethis occurs tax is provided on the basis of the estimated effective tax rate forthe full year.Controlled investments undertake research and development activities. In the UKthese activities qualify for tax relief and result in tax credits.5 Earnings / (loss) per shareThe basic and fully diluted earnings / (loss) per share is calculated on anafter tax profitof £0.6 million (6 months to 31 October 2008: loss £1.4 million,year to 30 April 2009: loss £3.6 million).The basic and fully diluted earnings / (loss) per share are based on 26,832,667weighted average ordinary 10p shares (6 months to 31 October 2008: 26,773,382;year to 30 April 2009: 26,799,442). Share options are non-dilutive for theperiod.6 Non-controlled investments and Other receivablesThe Group's investment portfolio comprises investments in Progeny® companies.Where the Group has control of a Progeny® company (typically owning more than50% of the equity), these are controlled investments and are consolidated assubsidiaries. At the point control no longer exists, a deemed profit arises andthe non-controlled investment is held at fair value in the statement offinancial position. In the six months to 31 October 2009 net costs beforetaxation relating to controlled investments of £0.1 million (6 months to 31October 2008: £0.6 million) were charged to the statement of comprehensiveincome.Where the Group does not control a Progeny® company (typically owning less than50% of the equity), these are defined as non-controlled investments and held inthe statement of financial position at fair value, as set out in the tablebelow: Non-current assets Current assets Total - Non controlled Unquoted Quoted investments (Unaudited) (Unaudited) (Unaudited) £ £ £ At 1 May 2008 4,373,504 1,042,331 5,415,835 Change in fair value - (912,039) (912,039) ____________ ____________ ____________ At 31 October 2008 4,373,504 130,292 4,503,796 Disposals (20,249) (20,249) Change in fair value (1,978,504) 389,122 (1,589,382) ____________ ____________ ____________ At 1 May 2009 2,395,000 499,165 2,894,165 Investments 40,229 40,229 Disposals (1,368,786) (1,368,786) Change in fair value 869,621 869,621 ____________ ____________ ____________ At 31 October 2009 2,435,229 - 2,435,229 =========== =========== ===========Other receivablesANGLE's Progeny® company Acolyte Biomedica was sold in February 2007. ANGLE wasdue an earn-out of up to £4.7 million receivable early in 2010. A fair value of£1.5 million is included in relation to this in ANGLE's statement of financialposition under the "Other receivables" category at 31 October 2009 unchangedfrom 30 April 2009 (31 October 2008: £1.9 million).The deferred consideration of up to £4.7 million due in respect of the sale ofthe investment in Acolyte Biomedica (medical diagnostics / MRSA detection)remains subject to dispute between the former Acolyte shareholders and thepurchaser. ANGLE is awaiting the outcome of legal action by the major Acolyteshareholder. It is understood that this action is in the formal informationdisclosure phase, progressing as planned, and that a Court date has been set inOctober 2010. Once the outcome of this action is known, ANGLE expects to pursueits own claim against the purchaser. At present ANGLE has no exposure to legalcosts.The Company has received legal advice that there is a strong case and that it ishighly probable that an action will succeed. Based on the currently availableinformation and legal advice, the Directors believe that there will eventuallybe a significant return from this investment. In view of the dispute, it isdifficult to form a reliable estimate of the fair value of this investment. Inpresent circumstances, the Directors believe that it is appropriate to hold theasset at its most recent fair value, but note that the value may be revised inthe future as further information becomes available.Change in fair value through statement of comprehensive income 6 months ended 31 October 2009 2008 £ £ Change in fair value of investments 869,621 (912,039) Change in fair value of intellectual property (24,808) - Change in fair value 844,813 (912,039) ======= =======[HUG#1375499]
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