AORTECH INTERNATIONAL
Consolidated Profit and Loss Account for the year ended 31 March 2004
Note 2004 2003
£ £
Turnover 2
Continuing Operations 360,185 73,407
Discontinued Operations - 1,305,731
--------- ---------
360,185 1,379,138
Costs of Sales 3 (30,649) (1,067,379)
--------- ---------
Gross Profit 329,536 311,759
Net Operating Expenses 3 (2,527,045) (12,165,968)
Net Operating Expenses include:
Development Expenditure (559,032) (4,182,296)
Amortisation of intangible Fixed (97,863) (1,206,732)
Assets
Cost of aborted acquisition - (250,281)
--------- ---------
Group operating loss before provision 3 (2,197,509) (11,854,209)
for impairment of goodwill
Provision for impairment of goodwill 3 - (16,535,412)
Group operating loss
Continuing Operations 3 (2,197,509) (18,587,192)
Discontinued Operations 3 - (9,802,429)
--------- ---------
(2,197,509) (28,389,621)
Exceptional items 4 552,856 (11,335,504)
--------- ---------
Loss on ordinary activities before (1,644,653) (39,725,125)
interest
Interest Receivable 195,096 366,947
--------- ---------
Loss on ordinary activities before (1,449,557) (39,358,178)
taxation
Taxation 5 1,976,817 -
--------- ---------
Profit/(loss) for the financial year 527,260 (39,358,178)
--------- ---------
Profit/(loss) per ordinary Share
Basic 6 13.84p (1,032.95p)
Fully Diluted 13.84p (1,032.95p)
Statement of Total Recognised Gains/(
Losses)
Profit/(loss) for the financial year 527,260 (39,358,178)
Currency Translation Differences Arising 130,024 58,190
on Consolidation --------- ---------
Total Gains/(Losses) Recognised Since 657,284 (39,299,988)
Last Annual Report --------- ---------
Balance Sheet as at 31 March 2004
2004 2003
£ £
Fixed Assets
Intangible Assets 1,565,806 1,536,185
Tangible Assets 235,608 319,976
--------- ---------
1,801,414 1,856,161
Current Assets
Stocks 48,853 -
Debtors 185,848 532,912
Cash at Bank 5,968,200 6,851,343
--------- ---------
6,202,901 7,384,255
Creditors: amounts falling due within one (438,200) (2,061,585)
year
Net Current Assets 5,764,701 5,322,670
--------- ---------
Total Assets less Current Liabilities 7,566,115 7,178,831
Accruals and Deferred Income - (270,000)
--------- ---------
Net Assets 7,566,115 6,908,831
--------- ---------
Capital and Reserves
Called up Share Capital 9,525,695 9,525,696
Share Premium Account 63,359,594 63,359,593
Other Reserve (2,003,143) (2,003,143)
Profit and Loss Account (63,316,031) (63,973,315)
--------- ---------
Equity Shareholders Funds 7,566,115 6,908,831
--------- ---------
Consolidated Cash Flow Statement for the year ended 31 March 2004
2004 2003
Note £ £
Operating Activities
Net cash outflow before exceptional
charges
Continuing operations 7 (1,898,890) (828,455)
Discontinued operations - (9,892,434)
--------- ---------
(1,898,890) (10,720,889)
Outflow related to exceptional items (1,335,862) (1,709,737)
--------- ---------
Net cash outflow from operating (3,234,752) (12,430,626)
activities
Returns on investment and servicing of 188,359 498,976
finance
Taxation 2,075,716 -
Capital Expenditure and financial 121,532 (401,251)
investment
Disposals (50,000) 2,618,697
Cash outflow before management of liquid (899,145) (9,714,204)
resources and financing --------- ---------
---------
Management of Liquid Resources 734,983 9,438,942
--------- ---------
Decrease in Cash in Year (164,162) (275,262)
--------- ---------
Notes to the Accounts
Note 1
The financial statements for AorTech International plc have yet to be signed for
the year ended 31 March 2004. The financial information set out in the
announcement does not constitute the Company's statutory accounts for the years
ended 31 March 2004 or 31 March 2003. The financial information for the year
ended 31 March 2003 is derived from the statutory accounts for that year which
have been delivered to the Registrar of Companies. The auditors reported on
those accounts; their report was unqualified and did not contain a statement
under either Section 237(2) or Section 237(3) of the Companies Act 1985. The
statutory accounts for the year ended 31 March 2004 will be finalised on the
basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of companies
following the Company's Annual General Meeting.
Note 2 Segmental analysis by class of business and geographical area
(a) Class of The group operates in one class of business
business
(b) geographical The analysis by geographical area of the group's turnover is
area set out below :
2004 2003
destination origin destination origin
£ £ £ £
Geographical segment
United Kingdom - - 545,090 1,025,329
Rest of Europe - - 781,789 309,217
Rest of world 360,185 360,185 52,259 44,592
-------- -------- -------- --------
360,185 360,185 1,379,138 1,379,138
-------- -------- -------- --------
Note 3 Cost of sales, gross profit, selling and marketing costs and
administrative expenses
2004 2003
Total Continuing Discontinued Total
£ £ £ £
Turnover 360,185 73,407 1,305,731 1,379,138
Cost of Sales (30,649) - (1,067,379) (1,067,379)
------- -------- -------- --------
Gross Profit 329,536 73,407 238,352 311,759
------- -------- -------- --------
Selling and (296,492) - (2,227,838) (2,227,838)
Marketing Costs
Administrative
Expenses
Development (559,032) (483,567) (3,698,729) (4,182,296)
expenditure
Amortisation of
intangible fixed
assets (97,863) (1,060,820) (145,912) (1,206,732)
Costs of aborted - - (250,281) (250,281)
acquisition
Other (1,573,658) (580,800) (3,718,021) (4,298,821)
------- -------- -------- --------
Total (2,230,553) (2,125,187) (7,812,943) (9,938,130)
administrative ------- -------- -------- --------
expenses
Net operating (2,527,045) (2,125,187) (10,040,781) (12,165,968)
expenses
Group operating
loss before
provision for
impairment of
goodwill (2,197,509) (2,051,780,) (9,802,429) (11,854,209)
Provision for
impairment of
goodwill - (16,535,412) - (16,535,412)
------- -------- -------- --------
Group operating (2,197,509) (18,587,192) (9,802,429) (28,389,621)
loss ------- -------- -------- --------
The Group operating loss from continuing operations for the year to 31 March
2004 includes costs of £466,740 which will not be incurred in future periods
following the restructuring of the Group and the discontinuance of businesses in
the previous year.
The provision for impairment of goodwill during the year ended 31 March 2003
arose following a full review, in accordance with FRS 10 'Goodwill and
Intangible Assets' of the carrying value of goodwill relating to the acquisition
of AorTech Biomaterials in March 2000.
Note 4 - Exceptional Items
2004 2003
Continuing Continuing Discontinued Total
£ £ £ £
Gain/(loss) on
disposal of
commercial valve 307,660 - (2,210,589) (2,210,589)
operations
Gain/(loss) on
termination of
truCCOMS operations 111,581 - (4,338,964) (4,338,964)
Loss on termination
of
trileaflet heart valve - - (924,570) (924,570)
project
Fundamental
restructuring
costs 133,615 (186,267) (3,675,114) (3,861,381)
-------- -------- -------- --------
552,856 (186,267) (11,149,237) (11,335,504)
-------- -------- -------- --------
The gain on disposal of commercial valve operations during the year ended 31
March 2004 arises from the release of funds held in Escrow for 12 months and the
disposal of assets written off in the previous year. The gain on termination of
truCCOMS operations during the year ended 31 March 2004 comprises primarily the
disposal of assets written off in the previous year. The gain on fundamental
restructuring costs during the year ended 31 March 2004 arises from the
overprovision of estimated costs at 31 March 2003.
Note 5 Taxation
The tax credit of £1,976,817 in 2004 relates to research and development credits
received in respect of expenditure incurred in previous years.
Note 6 Profit/(loss) per ordinary share
The basic loss per ordinary share is calculated on the profit of the Group of
£527,260 (2003 - loss £39,358,178) and on 3,810,278 (2003 - 3,810,278) equity
shares, being the weighted average number of shares deemed to be in issue after
adjusting for the one for ten share consolidation of 1 September 2003.
Note 7 Net cash outflow from operating activities
Net cash outflow from operating activities before exceptional charges for the
year to 31 March 2004 includes expenditure of £636,518 which will not be
incurred in future periods following the restructuring of the Group and the
discontinuance of businesses in the previous year.