REG - GENinCode PLC - Final Results
03/06/2024 07:00
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RNS Number : 7237Q GENinCode PLC 03 June 2024
GENinCode Plc
("GENinCode" or the "Company")
Final results
Oxford, UK. GENinCode Plc (AIM: GENI), the predictive genetics company focused
on the prevention of cardiovascular disease ("CVD") and risk of ovarian cancer
announces its audited final results for the twelve months ended 31 December
2023 ("FY23"). FY23 saw the Company strengthen its commercial programme in the
UK and Europe and prepare its novel genetic tests for introduction to the US
market.
Financial and Operational highlights
● Year on Year revenues increased 51% to £2.2m (2022: £1.4m), driven by core
test growth in the UK and Europe
● Approval of California state license, CLIA certification and CAP
accreditation, opening the US market
● Launch of US Early Access Programs for LIPID inCode(®) test for the diagnosis
of familial hypercholesterolemia ("FH") and CARDIO inCode(®) test for the
genetic risk of coronary artery disease ("CAD")
● FDA 'De Novo' submission (transition from 510K) in November 2023 for CARDIO
inCode®
● NHS clinical adoption of LIPID inCode(®) for FH diagnosis and expansion in
North of England
● Implementation of LIPID inCode(®) in University Clinic Dresden, Germany for
primary care diagnosis of FH
● CARDIO inCode(®) pilot launched in Extremadura, Spain
● Adjusted EBITDA loss of (£6.7m) (2022: loss of (£5.6m) reflecting increased
investment in the international commercialisation programme with
● Cash reserves of £2.5m at 31 December 2023 (2022: £9.7m)
Post-period end
● Successful completion of a £4.0m secondary placing to support scale up and
commercialisation
● First revenues in US market and completion of commercial agreements with Wake
Forest University Baptist Medical Center/Atrium Health, University of
California - Irvine (UCI) and Indiana University (IU Health) - Executive
Health and Concierge
● Publication of data on CARDIO inCode® in American Journal of Preventive
Cardiology and Kaiser Permanente presentation of CARDIO inCode® data at
European Society of Cardiology preventive cardiology meeting in April 2024,
showing that CARDIO inCode identifies individuals at the highest risk of CHD
● US Notice of Allowance (granted patent status) received for CARDiO inCode®
● National Institute for Health and Care Excellence (NICE) approval of Risk of
Ovarian Cancer Algorithm (ROCA®) test for women at high risk of ovarian
cancer
● ROCA® license agreements recently completed with Genesupport.ch in
Switzerland and Ordensklinikum in Austria
Current trading and Outlook
● US commercial operations now started to complement growing UK and EU revenues
and expect strengthening revenues across the business over the coming year
● April 2024 YTD consolidated revenues 37% higher than same period in 2023
● During 2024, the Company expects to complete the following key deliverables:
- Significant increase in year-on-year revenue growth
- Commercial expansion of LIPID inCode(®) and CARDIO inCode(®) across the
US market
- Implementation of LIPID inCode(®) and CARDIO inCode(®) testing in
leading US healthcare institutions and State-based healthcare systems
- Finalisation of De Novo FDA regulatory substantive review for the
approval of the CARDIO inCode(®) medical device to accelerate US sales
- Expansion of the NHS programme for LIPID inCode(®) and introduction of
CARDIO inCode(®)
- Expansion of the MVZ Uniklinikum, Germany collaborative programme
- Build on EU partnerships and develop ongoing collaborative discussions
with pharmaceutical companies.
- Following NICE guideline approval for ROCA test, commence first commercial
programs in the NHS and EU.
- Continued strengthening of the commercial, marketing and selling teams to
support revenue growth.
Matthew Walls, Chief Executive Officer of GENinCode Plc said: "We are scaling
up our business and increasing test revenues in the US, UK and Europe.
Notably, we have commenced initial US payor claims and revenues and are
broadening our NHS commercial relationships whilst continuing to expand our
European business. We will maintain tight operational cost control to target
breakeven over the medium term whilst offering significant business growth and
opportunity. On behalf of the Board, I would like to thank our valued
shareholders for their support, and we look forward to a positive remainder of
2024."
Investor meeting
The Company will host a presentation for investors via the IMC platform at 2pm
BST on Tuesday, 4 June. The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your Investor Meet
Company dashboard up until 9am the day before the meeting or at any time
during the live presentation. To register, please use the following
link: https://www.investormeetcompany.com/genincode-plc/register-investor
(https://www.investormeetcompany.com/genincode-plc/register-investor)
For more information visit www.genincode.com (http://www.genincode.com)
Enquiries:
GENinCode Plc www.genincode.com (http://www.genincode.com) or via Walbrook PR
Matthew Walls, CEO
Paul Foulger, CFO
Cavendish Capital Markets Limited Tel: +44 (0)20 7397 8900
Giles Balleny / Dan Hodkinson (Corporate Finance)
Nigel Birks / Harriet Ward (Corporate Broking)
Dale Bellis / Michael Johnson (Sales)
Walbrook PR Limited Tel: 020 7933 8780 or genincode@walbrookpr.com
(mailto:genincode@walbrookpr.com)
Anna Dunphy / Louis Ashe-Jepson / Phillip Marriage
About GENinCode:
GENinCode Plc is a UK based company specialising in genetic risk assessment of
cardiovascular disease and ovarian cancer. Cardiovascular disease is the
leading cause of death and disability worldwide.
GENinCode operates business units in the UK, Europe through GENinCode S.L.U.,
and in the United States through GENinCode U.S. Inc.
GENinCode predictive technology provides patients and physicians with globally
leading preventive care and treatment strategies. GENinCode invitro-diagnostic
molecular tests combine clinical algorithms and AI bioinformatics to advance
patient risk assessment to prevent the onset of cardiovascular disease and
ovarian cancer.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
On behalf of the Board, we are delighted to present the audited financial
statements for the twelve-month period ended 31 December 2023 for GENinCode
Plc.
This statement provides a a summary of progress over the past year for the
Group, recent developments, and an outlook for the year ahead.
2023 Business review
In the preliminary results for the twelve months ending 31 December 2023, the
Company saw a 51% increase in revenues to £2.2m (2022: £1.4m) driven by
growth across its UK and European businesses.
The Group's key products include:
CARDIO inCode(®) - Polygenic risk assessment of coronary heart disease (CHD)
LIPID inCode(®) - Genetic diagnosis and risk assessment of familial
(inherited) hypercholesterolemia
THROMBO inCode(®) - Genetic diagnosis and risk assessment of thrombophilia
and thrombotic risk
SUDD inCode(®) - Genetic diagnosis and cause of sudden cardiac death and
familial heart disease
The Group is now starting its first commercial programmes in the US to
complement its UK and European revenue growth.
US Business
The US clinical environment for genetic risk assessment continues to see
positive developments including advancing statements from the US American
College of Cardiologists/American Heart Association (ACC/AHA), for increasing
recognition of polygenic risk scores (PRS) in the risk assessment of coronary
artery disease.
Following the commissioning of our US CLIA (Clinical Laboratory Improvement
Amendments) and College of American Pathologists (CAP) accredited diagnostic
lab in California, the past year has focused on the set-up and completion of
our Early Access Programmes (EAPs) for the soft launch of LIPID inCode(®) and
CARDIO inCode(®) in the US market. The EAPs are a forerunner to full
commercialisation with the programmes commissioning our cloud-based system
(SITAB(®)) for ordering, processing, algorithmic risk scoring and reporting
to a select group of leading healthcare institutions and key opinion leaders
in preventive cardiology. On completion of the EAPs, physicians were surveyed
to gather feedback in preparation for the commercial introduction of PRS
testing. The EAPs have now largely been completed and are transitioning into
commercial programmes which will be the main focus of growth in 2024.
LIPID inCode(®) is a globally leading test for Familial Hypercholesterolemia
(FH) with increasing recognition by the US Centres for Disease Control (CDC)
of the importance of testing to identify individuals suffering with FH as
these individuals are at high risk of 'earlier in-life' onset of CVD, in the
form of atherosclerosis, angina, heart attack or ischemic stroke. LIPID
inCode(®) has received reimbursement coding and medical classification coding
(ICD-10) coverage in the US and 2024 will see the first revenues for LIPID
inCode(®) emerging from its commercial adoption.
Following the CARDIO inCode(®) 510(k) medical device submission in August
2023, the Food and Drug Administration (FDA) reviewed the submission and noted
CARDIO inCode(®)'s 'first in class' position and the deep clinical evidence
for polygenic risk assessment of CHD. Based on these factors and the novel
position of CARDIO inCode(®), the FDA requested the Company to transition to
a De Novo pathway for market approval. The crossover to a De Novo pathway
enables the Company to work with the FDA to establish a new polygenic
regulatory class for the CARDIO inCode(®) medical device based on its
favourable benefit-risk profile and associated special controls thereby
establishing a new regulatory standard for future polygenic tests in this
class. Following the FDA request, the Group submitted its De Novo submission
in November 2023 for market clearance and expects further updates from the FDA
over the coming months.
During the year we continued our collaboration with Indiana University (IU)
School of Medicine, the largest US medical school, in preparation for the
introduction of CARDIO inCode(®) to the US market and expanded our
collaboration with Kaiser Permanente, California, to assess CARDIO inCode(®)
for the polygenic risk assessment of coronary heart disease. In August 2023,
Kaiser Permanente presented an abstract of their ongoing study programme with
CARDIO inCode(®) at the European Society of Cardiologists in Amsterdam,
showing polygenic risk assessment in over 63,000 patients and the incidence of
coronary heart disease over a 14 year follow up period. More recently the
American Journal of Preventive Cardiology published the milestone Kaiser
Permanente paper on 'Polygenic risk and incident coronary heart disease in a
large multiethnic cohort' providing strong and growing clinical evidence for
the inclusion of polygenic 'lifetime' risk assessment for prevention of
coronary heart disease in national guidelines. We continue to work closely
with Kaiser Permanente and IU and expect further instrumental clinical
publications and results.
We also announced our first CARDIO inCode(®) collaboration with MedStar
Health, covering the states of Washington D.C. and Maryland to support our
clinical utility programmes for CMS/payer reimbursement filings. The MedStar
programme uses CARDIO inCode(®) in a primary preventive care setting to
advise physicians of the polygenic 'lifetime' risk of patients for coronary
heart disease. The patient risk scores are then used in conjunction with
traditional clinical risk assessment to personalise treatment including
lifestyle change and therapeutic intervention.
UK and Europe Business
In May 2023 the UK NHS announced the successful implementation of our first
LIPID inCode(®) NHS clinical programmes to improve diagnosis and turnaround
time for the testing of Familial Hypercholesterolemia (FH). The implementation
of this programme in the North of England supports the NHS 10-Year plan to
identify 25% of individuals in the UK suffering with FH. LIPID inCode(®) is
being delivered at a reduced cost to the NHS, with rapid turnaround times for
testing and an improved comprehensive diagnostic and risk assessment panel.
Since the implementation we have processed over 1,000 FH tests in the North of
England enabling the NHS Genetic Lab Hub to begin meeting their NHS long term
targets. Resulting from this improved performance, the NHS North of England is
the only region now meeting its FH test targets set out in the NHS 10 Year
Plan. We anticipate an expansion in LIPID inCode(®) testing across other NHS
regions and genetic lab hubs in 2024.
Following the announcement of MVZ Uniklinikum, Germany collaboration in May
2023, sales of LIPID inCode(®) have now commenced. Uniklinikum represents the
largest treatment centre in Germany for patients suffering with FH and the
German team is following a similar pathway to the NHS with state-based
reimbursement for our initial LIPID inCode(®) test.
The Spanish market saw a strengthening in revenue through 2023 with its core
tests all seeing growing demand. The CARDIO inCode(®) pilot implementation
study in the Spanish region of Extremadura also continued to make good
progress. The Extremadura region has a population of more than one million,
with an estimated 50,000 individuals at risk of a cardiovascular event, e.g.
heart attack. CARDIO inCode(®) is expected to change clinical practice by
identifying those individuals at high genetic risk and improve preventive
treatment. Successful completion of the pilot in over 500 individuals will
lead to the extension of the programme across the Extremadura region.
In March 2024, the Risk of Ovarian Cancer Algorithm ("ROCA") test received
NICE recommendation as the preferred test for ovarian cancer surveillance in
individuals at high risk of ovarian cancer who do not undertake risk reducing
surgery. The new NICE guidance is focused on identifying and managing familial
and genetic risk of ovarian cancer.
Publication of NICE guidance is an important milestone for the ROCA test.
After many years of academic and corporate investment, the ROCA test has been
comprehensively assessed by NICE as the surveillance technology of choice
where patients at high risk of familial ovarian cancer decide to defer
preventative surgery. Surveillance using the ROCA test will help individuals
feel more supported while they start or grow their families or until they
reach menopause, whilst also providing a cost-saving benefit for the NHS. We
are now assisting the NHS to establish appropriate call and recall systems
that will enable the ROCA test to be offered by the NHS to all eligible
individuals.
Intellectual Property
We maintain an ongoing intellectual property programme to strengthen our
existing patent portfolio and are advancing our family of patents for both
CARDIO inCode(®) and THROMBO inCode(®). We will continue to build our
intellectual property portfolio and actively evaluate in-licensing and
acquisition opportunities as appropriate to enhance our competitive product
positioning.
Financial review
In FY23, the Company saw Year-on-Year revenues increase 51% to £2.2m (2022:
£1.4m), driven by growth across our UK and European businesses. The Company
continues to scale its commercial programme across the US, UK and EU markets
whilst maintaining tight control over its operational costs. At the beginning
of 2024, the Company successfully completed a £4.0m secondary placing on AIM
to support its commercialisation, scale-up and launch of new tests in the US
and UK. Gross profit for the year was £1.0m (2022: £0.6m) with a margin of
47% (2022: 44%).
Administrative expenses increased to £7.8m (2022: £6.3m). The year-on-year
cost increase reflected growth in staffing and professional costs with the
ramp up in US and UK investment in preparation for the US and UK laboratory
commissioning and test service delivery, increased sales and marketing
resources, and spending on market access and launch preparations.
This increased commercial investment gave rise to an adjusted EBITDA loss for
the year of (£6.7m) (2022: (£5.6m)), with the cash position at the end of
December 2023 being £2.5m (2022: £9.7m).
Capital Structure
The total number of ordinary shares in issue was 95,816,866. The loss per
share for the year ending 31 December 2023 was 7.0p/share. The Board of
Directors will not be recommending a dividend payment for the year ended 31
December 2023.
Outlook
With US commercial operations now starting to complement our growing UK and EU
revenues, we anticipate strengthening revenues across the business over the
coming year as we scale up testing to prevent cardiovascular disease. We are
focused on commercial programmes with leading US hospital institutions whilst
developing our UK NHS relationship and the expansion of our EU business. Given
the challenging markets, we will grow revenues whilst maintaining a tight
control over operational costs to target a breakeven/profit position over the
medium term. We expect to de-risk our business model whilst delivering strong
growth in our core markets.
During 2024, we expect to complete the following key deliverables:
● Significant increase in year-on-year revenue growth
● Commercial expansion of LIPID inCode(®) and CARDIO inCode(®) across the US
market
● Implementation of LIPID inCode(®) and CARDIO inCode(®) testing in leading US
healthcare institutions and State-based healthcare systems
● Progression of our De Novo FDA regulatory submission for the approval of the
CARDIO inCode(®) medical device to accelerate US sales
● Expansion of the NHS programme for LIPID inCode(®) and introduction of CARDIO
inCode(®)
● Expansion of the MVZ Uniklinikum, Germany collaborative programme
● Build on our EU partnerships and develop our ongoing collaborative discussions
with pharmaceutical companies.
● Following NICE guideline approval for The ROCA test, commence first commercial
programs in the NHS and EU.
● Continued strengthening of the commercial, marketing and selling teams to
support revenue growth.
We have a strong and growing competitive clinical advantage to identify
patients at high genetic risk of coronary heart disease and improve preventive
care for cardiovascular disease.
Commensurate with this growth we will build investment in our international
manpower resources and expertise as well as explore acquisition opportunities
to take advantage of the opportunities opening to us.
We continue to build our business and believe our tests are industry leading
and will deliver significant investor returns. We would like to thank our
investors, Board, management and employees for their strength and
determination in helping support and drive our business growth.
We look forward to updating our investors on our forthcoming progress.
Matthew Walls
William Rhodes
Chief Executive
Officer
Chairman
31 May 2024
31 May 2024
GENinCode Plc
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2023
Notes 2023 2022
£'000 £'000
CONTINUING OPERATIONS
Revenue 4 2,160 1,430
Cost of sales (1,138) (798)
GROSS PROFIT 1,022 632
Administrative expenses (7,751) (6,266)
ADJUSTED EBITDA (6,729) (5,634)
Depreciation (246) (104)
Amortisation (105) (59)
Share based payment expense (71) (102)
OPERATING LOSS (7,151) (5,899)
Other income 7 176 173
Finance charge 7 (48) (20)
LOSS BEFORE INCOME TAX 5 (7,023) (5,746)
Income tax 8 7 187
LOSS FOR THE FINANCIAL YEAR (7,016) (5,559)
Other comprehensive income for the year
Items that are or may be subsequently reclassified to the profit and loss:
Exchange differences on translation of foreign operations 334 (361)
LOSS ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE COMPANY (6,682) (5,920)
EARNINGS PER SHARE
Basic earnings per share (pence) (6.97) (6.18)
Diluted earnings per share (pence) (6.97) (6.18)
The notes form part of these financial statements
GENinCode Plc (Registered number: 11556598)
Consolidated Statement of Financial Position
31 December 2023
2023 2022
Notes £'000 £'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 12 138 161
Property, plant and equipment 13 425 653
Right of use asset 14 282 349
Goodwill 15 149 149
TOTAL NON-CURRENT ASSETS 994 1,312
CURRENT ASSETS
Inventories 16 84 20
Trade and other receivables 17 582 717
Cash and cash equivalents 18 2,484 9,732
Financial assets 19 42 16
TOTAL CURRENT ASSETS 3,192 10,485
TOTAL ASSETS 4,186 11,797
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 20 958 958
Share premium 21 15,551 15,551
Foreign currency translation reserve 21 45 (289)
Share based payment reserve 22 246 175
Retained earnings 21 (15,511) (8,495)
TOTAL EQUITY 1,289 7,900
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 23 178 1,434
Lease liability 25 221 285
399 1,719
CURRENT LIABILITIES
Trade and other payables 23 2,395 2,078
Lease liability 25 78 69
2,473 2,147
Deferred Tax 26 25 31
TOTAL LIABILITIES 2,897 3,897
TOTAL EQUITY AND LIABILITIES 4,186 11,797
The notes form part of these financial statements
The financial statements were approved by the Board of Directors on 31 May
2024 and were signed on its behalf by:
Paul Foulger
Director
Date: 31 May 2024
GENinCode Plc (Registered number: 11556598)
Company Statement of Financial Position
31 December 2023
2023 2022
Notes £'000 £'000
ASSETS
NON-CURRENT ASSETS
Investments 11 231 221
Intangible assets 12 138 159
Property, plant, and equipment 13 98 164
Right of use asset 14 282 349
Trade and other receivables 17 - 5,668
TOTAL NON-CURRENT ASSETS 749 6,561
CURRENT ASSETS
Trade and other receivables 17 182 531
Cash and cash equivalents 18 2,171 9,468
TOTAL CURRENT ASSETS 2,353 9,999
TOTAL ASSETS 3,102 16,560
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 20 958 958
Share premium 21 15,551 15,551
Share based payment reserve 22 246 175
Retained earnings 21 (15,255) (1,413)
TOTAL EQUITY 1,500 15,271
LIABILITIES
NON-CURRENT LIABILITIES
Contingent consideration provision 24 178 155
Lease liability 25 221 285
CURRENT LIABILITIES
Trade and other payables 23 1,100 749
Lease liability 25 78 69
Deferred Tax 26 25 31
TOTAL LIABILITIES 1,602 1,289
TOTAL EQUITY AND LIABILITIES 3,102 16,560
As permitted by Section 408 of the Companies Act 2006 GENinCode Plc has taken
the exemption from presenting its unconsolidated profit and loss account.
The parent company's loss for the financial year was £13,842k (2022 - loss of
£1,907k).
The financial statements were approved by the Board of Directors on 31 May
2024 and were signed on its behalf by:
Paul Foulger
Director
31 May 2024
The notes form part of these financial statements
GENinCode Plc
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2023
Foreign Share
Called up Share Currency based
share premium Translation payment Retained Total
capital account Reserve reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 958 15,551 72 73 (2,936) 13,718
Changes in equity
Share based payments - - - 102 - 102
Profit or loss - - - - (5,559) (5,559)
Foreign exchange on translation - - (361) - - (361)
Balance at 31 December 2022 958 15,551 (289) 175 (8,495) 7,900
Changes in equity
Share based payments - - - 71 - 71
Total comprehensive income - - - - (7,016) (7,016)
Other comprehensive income - - 334 - - 334
Balance at 31 December 2023 958 15,551 45 246 (15,511) 1,289
The notes form part of these financial statements
GENinCode Plc
Company Statement of Changes in Equity
for the Year Ended 31 December 2023
Called up Share
share Premium Other Retained Total
capital account reserves earnings equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 958 15,551 73 493 17,075
Changes in equity
Share based payments - - 102 - 102
Profit or loss - - - (1,906) (1,906)
Balance at 31 December 2022 958 15,551 175 (1,413) 15,271
Changes in equity
Share based payments - - 71 - 71
Total comprehensive income - - - (13,842) (13,842)
Balance at 31 December 2023 958 15,551 246 (15,255) 1,500
The notes form part of these financial statements
GENinCode Plc
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Loss before taxation (7,023) (5,745)
Adjustments for:
Depreciation and amortisation 351 163
Share based payments 71 102
Finance charges 48 19
Bank interest income (174) (160)
Taxation - -
Operating loss before working capital changes (6,727) (5,621)
Cash used in operations
Decrease / (Increase) in trade and other receivables 383 (106)
(Decrease) / Increase in trade and other payables (1,071) 2,021
Decrease / (Increase) in inventory (65) (6)
Decrease / (Increase) in financial assets (26) (13)
Net cash outflow from operating activities (7,506) (3,725)
Investing activities
Purchase of property, plant, and equipment (38) (700)
Bank interest income 174 160
Purchase of intangible assets - (149)
Net cash flows used in investing activities 136 (689)
Financing activities
Payments under lease contracts (94) (47)
Net cash flows from financing activities (94) (47)
Net change in cash and cash equivalents (7,464) (4,461)
Cash and cash equivalents at the beginning of the year 9,732 14,554
Movement in retranslation 216 (361)
Cash and cash equivalents at the end of the year 2,484 9,732
The notes form part of these financial statements
GENinCode Plc
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2023
1. Statutory information
GENinCode Plc is a public limited company, limited by shares, registered in
England and Wales. The Company's registered number and registered office
address can be found on the General Information page.
The Group's principal activity is the development and commercialisation of
clinical genetic tests, to provide predictive analysis of risk to a patient's
health based on their genes.
The consolidated financial statements comprised of the Company and its
subsidiaries (together referred to as "the Group") as at and for the year
ended 31 December 2023. The parent Company financial statements present
information about the Company as a separate entity and not about its Group.
2. Accounting policies
Basis of preparation
The consolidated financial statements of the Group have been prepared using
the historical cost convention, on a going concern basis and in accordance
with UK-adopted international accounting standards ("IFRS") and the Companies
Act 2006 applicable to companies reporting under IFRS, using accounting
policies which are set out below and which have been consistently applied to
all years presented, unless otherwise stated.
The financial statements of the Company have been prepared in accordance with
Financial Reporting Standard 101 "Reduced Disclosure Framework" ('FRS 101')
and the requirements of the Companies Act 2006. The Company will continue to
prepare its financial statements in accordance with FRS 101 on an ongoing
basis until such time as it notifies shareholders of any change to its chosen
accounting framework.
In accordance with FRS 101, the Company has taken advantage of the following
exemptions:
• Requirements of IAS 24, 'Related Party Disclosures' to disclose related
party transactions entered into between two or more members of a group;
• the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of
IAS 36 Impairments of Assets;
• the requirements of IFRS 7 Financial Instruments: Disclosures;
• the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A,
40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements;
• the requirements of paragraphs 134 to 136 of IAS 1 Presentation of
Financial Statements;
• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
• the requirements of IAS 7 to prepare a Statement of Cash Flows.
New and amended standards adopted by the Group
The most significant new standards and interpretations adopted, none of which
are considered material to the Group, are as follows:
Ref Title Summary Application date of standards (periods commencing)
IAS1 Presentation of Financial Statements Amendments regarding the classification of liabilities 1 January 2023
Amendments to defer effective date of the January 2020 amendments 1 January 2023
IAS 8 Definition of Accounting Estimates Defines accounting estimates and clarifies that the effects of a change in an 1 January 2023
input or measurement technique are changes in accounting estimates.
IAS 12 Deferred Tax relating to Assets and liabilities arising from a Single Additional criterion for the initial recognition exemption under IAS 12.15, 1 January 2023
Transaction (Amendments to IAS 12) whereby the exemption does not apply to the initial recognition of an asset or
liability which at the time of the transaction, gives rise to equal taxable
and deductible temporary differences.
New standards and interpretations not yet adopted
Unless material the Group does not adopt new accounting standards and
interpretations which have been published and that are not mandatory for 31
December 2023 reporting periods.
No new standards or interpretations issued by the International Accounting
Standards Board ('IASB') or the IFRS Interpretations Committee ('IFRIC') have
led to any material changes in the Company's accounting policies or
disclosures during each reporting period.
The most significant new standards and interpretations to be adopted in the
future are as follows:
Ref Title Summary Application date of standards (periods commencing)
IFRS 16 Leases on sale and leaseback Requirements for sale and leaseback transactions in IFRS 16 to explain how an 1 January 2024
entity accounts for a sale and leaseback after the date of the transaction.
IAS 1 Non-current liabilities with covenants Aims to improve information an entity provides relating to liabilities subject 1 January 2024
to covenants.
IAS 7 and IFRS7 Supplier finance Additional disclosure regarding supplier finance arrangements and their 1 January 2024
effects on an entity's liabilities, cash flows and exposure to liquidity risk.
Going concern
The financial statements have been prepared on the assumption that the Company
is a going concern. In making this assessment, the Directors have considered
detailed budgets and forecasts for the next 12 months from the date of this
report including the cash at bank available as at the date of approval of this
report. The assessment includes the cashflows expected from an additional fund
raise and on the basis the Directors have a proven track record in raising
funds they are satisfied that the Group and Company should be able to
meet their its financial obligations as they fall due and have concluded
it is appropriate to prepare the financial statements on a going concern
basis.
The Group has an ongoing commitment to keep costs and working capital under
control so that increasing gross profits can extend the cash runway and
eventually drive the business towards generating positive cash flows. Delays
in revenue growth could have a potential impact on the Group's liquidity hence
a number of potential mitigating actions which can be taken to safeguard the
Group's cash position have been put together. These include working capital
controls and reductions in discretionary spending.
Given that the outcome of the additional fund raise cannot be predicted, this
indicates the existence of a material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern. The
financial statements do not include the adjustments that would result if the
Group was unable to continue as a going concern.
Basis of consolidation
The Parent has 100% control of all subsidiaries. The subsidiaries consolidated
in these Group accounts were acquired via group re-organisation and as such
merger accounting principles have been applied, except for the acquisition of
Abcodia Limited in September 2022. The subsidiaries' financial figures are
included for their entire financial year rather than from the date the company
took control of them, with the exception of Abcodia Limited which was acquired
during the prior year.
Inter-company transactions, balances, and unrealised gains on transactions
between Group companies are eliminated during the consolidation process.
GENinCode Plc prepares its accounts to 31 December under FRS101; there are no
deviations from the accounting standards implemented by the company. Where
necessary accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the Group.
The Company acquired its 100% interest in Abcodia Ltd in the prior year during
September 2022. The results of subsidiaries acquired during the year are
included from the effective date of acquisition. Where necessary,
adjustments are made in results of subsidiaries to bring the accounting
policies used into line with those used by the Group.
The subsidiary, Abcodia Limited is exempt from audit by virtue of s479A of the
Companies Act 2006.
Property, plant, and equipment
Depreciation is provided to write off cost, less estimated residual values, of
all property, plant, and equipment, except for investment properties and
freehold land, evenly over their expected useful lives, calculated at the
following rates:
Plant
12%
Equipment
25%
The carrying value of the property, plant and equipment is compared to the
higher of value in use and the fair value less costs to sell. If the carrying
value exceeds the higher of the value in use and fair value less the costs to
sell the asset, then the asset is impaired, and its value reduced by
recognising an impairment provision.
Intangible assets
(i) Patents and licenses costs
The Group has purchased patents and licences since incorporation. The costs
incurred in obtaining these patents and licenses have been capitalised.
Amortisation is charged as follows:
Patents Over
estimated economic life of 10 years
Licences 20%
(estimated useful life of 5 years)
The Patents and license costs are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable.
(ii) Software costs
The Group has purchased software since incorporation. The costs incurred in
obtaining the software have been capitalised as the Group uses the software
platform to provide results to its customers.
Amortisation is charged on a straight-line basis at 25% over the useful life
of the related asset. Software costs are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable.
Foreign currency
The functional currency of the Company is Sterling Pound (£) and its
subsidiaries are in Euros (€) and US Dollars ($). The presentational
currency of the Company is £.
Transactions entered by the Group's entities in a currency other than the
reporting currency are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the statement of financial position date. Exchange differences
arising on the re-translation of outstanding monetary assets and liabilities
are also recognised in the income statement.
The exchange rates used in the financial statements are as follows:
2023 2022
Sterling/euro exchange rates
Average exchange rate for the year 1.149 1.173
Exchange rate at the year end 1.153 1.128
Sterling/US dollar exchange rates
Average exchange rate for the year 1.244 1.237
Exchange rate at the year end 1.273 1.210
Revenue recognition
Revenue is recognised in accordance with the requirements of IFRS 15 'Revenue
from Contracts with Customers'. The Group recognises revenue to depict the
transfer of promised goods and services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. Revenue is determined to be recognised
at the point of despatch of the product or service unless there are specific
provisions in the relevant contract. Revenue from the provision of testing and
reporting services is recognised upon delivery of the report to the customer.
Invoices are typically raised upon delivery of the products or reporting
services, unless there is a different contractual requirement, for payment
according to credit terms, the prices having been pre-agreed on a product and
customer basis.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call,
together with other short term highly liquid investments which are not subject
to significant changes in value and have original maturities of less than
three months.
Equity
Equity comprises the following:
· Share capital: the nominal value of equity shares.
· Retained deficit: losses accumulated to the end of the year.
· Share premium: excess subscribed above nominal value.
· Share option reserve
· Foreign exchange reserve
Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantially enacted by the statement of financial position date.
Employee benefits
(i) Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary
benefits are accrued in the year in which the associated services are rendered
by employees of the Company.
Employee benefit costs
The Group operates a defined contribution pension scheme. Contributions
payable to the Group's pension scheme are charged to the income statement in
the year to which they relate.
Research and development expenditure
Expenditure on research activity is recognised as an expense in the year in
which it is incurred.
Share based payment
The fair value of equity-settled share-based payments to employees is
determined at the date of grant and expensed on a straight line basis over the
vesting period based on the Group's estimate of shares or options that will
eventually vest.
All equity-settled share-based payments are ultimately recognised as an
expense in the profit or loss with a corresponding credit to the Share based
payment reserve. If vesting periods or other non-market vesting conditions
apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest. Estimates
are subsequently revised if there is any indication that the number of share
options expected to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period. No adjustment
is made to any expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting.
Share options granted to employees of subsidiaries are recognised as an
expense in the employing subsidiary and as an addition to the investment in
the subsidiary for the parent company. The costs are calculated on the same
basis as above and are included upon consolidation.
Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital, and where appropriate share
premium.
Leased assets
The Group recognises a right of use asset and a lease liability at the lease
commencement date. The right of use asset is initially measured at cost, which
comprises of the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received.
The right of use asset is subsequently depreciated using the commencement date
to the end of the lease term.
The lease liability is initially measured at the present value of the lease
payments that are paid at the commencement date, discounted using the Group's
incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest
method. It is re-measured when there is a change in future lease payments
arising from a change in an index or rate, or if the group changes its
assessment of whether it will exercise a purchase, extension or termination
option.
The Group has elected not to recognise right of use assets and lease
liabilities for short term leases that have a lease term of 12 months or less
and leases of low value assets. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis over the
lease term.
Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
• those to be measured subsequently at fair value (either through
OCI or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either in
profit or loss or in OCI.
The entity will recognise a financial liability in its statement of financial
position when it becomes party to the contractual provisions of the
instrument. At initial recognition, the entity measures a financial liability
at its fair value plus or minus, in the case of a financial liability not at
fair value through profit or loss, transaction costs that are directly
attributable to the acquisition or issue of the financial liability.
The Group classifies financial assets as amortised costs only if both of the
following criteria are met:
• the asset is held within a business model whose objective is to
collect contractual cash flows; and
• the contractual terms give rise to cash flows that are solely
payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Group commits to purchase or sell the asset). Financial
assets are de-recognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
d) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with any debt
instruments carried at amortised cost. The impairment methodology applied
depends on whether there has been a significant increase in credit risk. For
trade receivables, the Group applies the simplified approach permitted by IFRS
9, which requires expected lifetime losses to be recognised from initial
recognition of the receivables.
Goodwill
Goodwill arising in a business combination is recognised as an asset at the
date control is acquired (the acquisition date). Goodwill arising on the
acquisition of a subsidiary undertaking is the difference between the fair
value of the consideration payable and the fair value of the identifiable
assets, liabilities and contingent liabilities acquired.
Goodwill is not amortised but is reviewed for impairment at least annually or
more frequently if there is an indication that goodwill may be impaired. If
the recoverable amount is less than the carrying amount, the carrying amount
of the asset is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately.
On disposal of a subsidiary, the attributable amount of goodwill is included
in the determination of the profit or loss on disposal.
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials and, where applicable, direct labour costs and
those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the weighted average
cost method. Net realisable value represents the estimated selling price less
all estimated costs of completion.
Taxation
Current and deferred tax is charged or credited in profit or loss, except when
it relates to items charged or credited directly to equity, in which case the
related tax is also dealt with in equity. Current tax is calculated on the
basis of the tax laws enacted or substantively enacted at the reporting date
in the countries where the Company and its subsidiaries operate.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary
differences can be utilised, except for differences arising on investments in
subsidiaries where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not reverse in the
foreseeable future.
Recognition of the deferred tax assets is restricted to those instances where
it is probable that a taxable profit will be available against which the
difference can be utilised.
Deferred tax is calculated based on rates enacted or substantively enacted at
the reporting date and expected to apply when the related deferred tax asset
is realised, or liability settled.
Critical accounting estimates and judgements
The preparation of financial information in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires the Directors
to exercise their judgement in the process of applying the accounting policies
which are detailed above. These judgements are continually evaluated by the
Directors and management and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The key estimates and underlying assumptions concerning the future and other
key sources of estimation uncertainty at the statement of financial position
date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the year in which the estimate is revised if the revision affects only that
year, or in the years of the revision and future periods if the revision
affects both current and future years.
The estimates and judgements which have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within
the next financial year are discussed below:
• Intangible assets
The assessment of the future economic benefits generated by these separately
identifiable intangible assets and the determination of its amortisation
profile involve a significant degree of judgement based on management
estimation of future potential revenue and profit and the useful life of the
assets. Reviews are performed regularly to ensure the recoverability of these
intangible assets.
• Share based payments
The Company has issued share options as an incentive to certain senior
management. The fair value of options granted is recognised as an expense with
a corresponding credit to the share-based payment reserve. The fair value is
measured at grant date and spread over the year during which the awards vest.
For equity-settled share-based payment transactions, the goods or services
received and the corresponding increase in equity are measured directly at the
fair value of the goods or services received, unless that fair value cannot be
estimated reliably. If it is not possible to estimate reliably the fair value
of the goods or services received, the fair value of the equity instruments
granted as calculated using the Black-Scholes model is used as a proxy.
The fair value of share-based payments is measured by use of valuation models,
which take into account conditions attached to the vesting and exercise of the
equity instruments. The expected life used in the model is adjusted; based on
management's best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The share price volatility
percentage factor used in the calculation is based on historical share price
performance of a group of peer companies as historical share price performance
was not available for the Company on the date of grant.
· Contingent consideration
Contingent consideration is a financial liability recorded at fair
value (note 24). The amount of contingent consideration to be paid is based
on the occurrence of future events, such as the achievement of certain
development, regulatory and sales milestones. Accordingly, the estimate of
fair value contains uncertainties as it involves judgment about the likelihood
and timing of achieving these milestones as well as the discount rate used.
Changes in fair value of the contingent consideration obligation result from
changes to the assumptions used to estimate the probability of success for
each milestone, the anticipated timing of achieving the milestones and the
discount period and rate to be applied. A change in any of these assumptions
could produce a different fair value, which could have a material impact on
the results from operations.
· Leases
The application of IFRS 16 requires the Group to make judgments that affect
the valuation of the lease liabilities and the valuation of right-of-use
assets (note 25). These include: determining contracts in scope of IFRS 16,
determining the contract term and determining the interest rate used for
discounting of future cash flows.
The lease term determined by the Group generally comprises non-cancellable
period of lease contracts, periods covered by an option to extend the lease if
the Group is reasonably certain to exercise that option and periods covered by
an option to terminate the lease if the Group is reasonably certain not to
exercise that option. The same term is applied as the economic useful life of
right-of-use assets.
The present value of the lease payment is determined using the discount rate
representing the base rate of 4.5%, plus a margin of 3% for general lending,
giving a raise to a discount rate of 7.5%.
Management have assessed each lease liability for recognition under IFRS16 and
recognised a right of use asset where appropriate (note 25). The right of
use asset is amortised in line with the term of the lease. Amortisation is
on a straight line basis over 5 years with discount rate 7.5% as above.
· Carrying value of inter- company debtors
Management uses their judgement to assess the recoverability and value of
intercompany debts, the Company has funded its subsidiaries (note 17) to
assist with their growth. Management have decided to provide for the
inter-company debts in their entirety at the year end. This is based on
current forecasts and the ability of the subsidiaries to repay the debts
within the foreseeable future.
3. Financial risk management
The Group's risk management is controlled by the board of directors. The
board identifies, evaluates, and mitigates financial risks across the Group.
Financial risks identified and how these risks could affect the Group's
future financial performance are listed below;
Financial instruments by category
Financial assets at amortised cost 2023 2022
£'000 £'000
Cash and cash equivalents 2,484 9,732
Trade receivables 428 315
Financial assets 42 16
Other receivables 37 37
Financial assets at amortised cost 2,991 10,100
Financial liabilities at amortised cost 2023 2022
£'000 £'000
Trade payables 1,194 2,694
Other payables - 70
Accruals 396 432
Lease liability 299 354
Financial liabilities at amortised costs 1,889 3,550
Financial liabilities at Fair Value 2023 2022
£'000 £'000
Trade payables 178 155
Financial liabilities at fair value 178 155
Fair value hierarchy
All the financial assets and financial liabilities recognised in the financial
statements which are short-term in nature are shown at the carrying value
which also approximates the fair values of those short-term financial
instruments. Therefore, no separate disclosure for fair value hierarchy is
required for them. The disclosure on fair value hierarchy does not apply to
the financial leases.
The Group's activities expose it to a variety of financial risks, mainly
credit risk, liquidity risk and interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. In order to
minimise this risk the Group endeavours only to deal with companies which are
demonstrably creditworthy.
The aggregate financial exposure is continuously monitored. The Group's
exposure to credit risk on cash and cash equivalents is considered low as the
bank accounts are with banks with high credit ratings.
Liquidity risk
The Group currently holds cash balances to provide funding for normal activity
and is managed centrally. Trade and other payables are monitored as part of
normal management routine.
Interest rate risk
The Group's interest-bearing assets comprise of only cash and cash
equivalents. As the Group's interest-bearing assets do not generate
significant amounts of interest, changes in market interest rates do not have
any significant direct effect on its income.
The maturity of borrowings and other financial liabilities (representing
undiscounted contractual cash-flows) is as follows:
2022 Within 1 Year
£'000
Trade and Other Payables 1,486
Lease liability 69
Total 1,555
Over 1 Year
Trade and Other Payables 1,278
Lease liability 285
1,563
2023 Within 1 Year
£'000
Trade and Other Payables 1,194
Lease liability 78
Total 1,272
Over 1 Year
Trade and Other Payables
Lease liability 221
221
Capital risk management
The Group's capital management objectives are to ensure the Group's ability to
continue as a going concern, and provide an adequate return to shareholders by
pricing products and services commensurate with the level of risk.
To meet these objectives, the Company reviews the budgets and forecasts on a
regular basis to ensure there is sufficient capital to meet the needs of the
Company through to profitability and positive cash flow.
All working capital requirements are financed from existing cash resources.
4. Operating segments
There is only one operating segment. The Group has disaggregated revenue into
various geographic regions in the following table.
2023 2022
£'000 £'000
Revenue from sale of kits and provision of support services 2,160 1,430
Primary Geographic Markets
Spain 1,644 1,207
UK 364 36
Italy 74 132
Germany 34 -
France 26 36
Rest of World 18 19
Total revenue per geographical markets 2,160 1,430
2023 2022
£'000 £'000
Non-current assets
Primary Geographic Markets
Spain 46 21
UK 667 820
US 281 471
Total non-current assets per geographical markets 994 1,312
5. Loss from operations
2023 2022
£'000 £'000
Loss is stated after charging:
Cost of inventory 917 798
Staff costs 2,165 1,221
Royalty expense 107 67
Operating expenses-- External services 945 1,983
Directors' salaries and fees 659 650
Research expenditure 334 72
Depreciation and amortisation 351 163
Staff costs are allocated between Cost of sales and Administrative expenses.
5a. Auditor's remuneration
2023 2022
£'000 £'000
Fees payable to the company's auditor for the audit of the company's annual 49 25
accounts
Fees payable to the company's auditor and its associates for other services:
Accounting and taxation services - 4
Total 49 29
6. Employees and directors
The average number of employees (including directors) in the Group during the
year was made up as follows:
2023 2022
Number Number
Directors (including non-executive directors) 6 7
Employees 36 28
Total 42 35
The cost of employees (including directors) during the year was made up as
follows:
2023 2022
£'000 £'000
Salaries and wages (including directors) 2,779 1,859
Social security costs 510 373
Employee benefits in kind 20 17
Pension costs 25 24
Share based payment expense 71 102
Total 3,405 2,375
Key management personnel compensation
The compensation of key management personnel, principally directors of
GENinCode Plc for the year were as follows:
2023 2022
£'000 £'000
Directors' salaries 584 577
Social security costs 64 77
Pension costs 13 16
Directors' fees 75 73
Share based payment expense 36 36
Total 772 779
The above remuneration of directors includes the following amounts paid to the
highest paid Director:
2023 2022
£'000 £'000
Highest paid Director 280 286
7. Other income
2023 2022
£'000 £'000
Bank interest income 174 160
Other revenue 2 13
Total 176 173
Finance cost
2023 2022
£'000 £'000
Discount of lease liability 24 14
Unwinding contingent consideration 24 6
Total 48 20
8. Income tax
2023 2022
£'000 £'000
Current tax credit
R&D tax credit - 212
Total current tax - -
Deferred tax
Accelerated capital allowances 7 (25)
Total current tax 7 (25)
Total tax (charge)/credit 7 187
The charge for the year can be reconciled to the loss in the consolidated
statement of comprehensive income as follows:
2023 2022
£'000 £'000
Loss before taxation (7,023) (5,746)
Expected tax credit at the UK corporation tax rate of 25% (2022, 19%) (1,756) (1,091)
Movement in unrecognised deferred tax asset 1,713 1,171
Capital allowances (2) (41)
Spanish deferred tax recognised in excess of UK deferred tax - (63)
Expenses disallowed for tax 89 24
Non-trade relationship (44) -
Accelerated Capital Allowances 7 (25)
R&D tax credit - 212
Total tax (charge)/credit 7 187
Factors affecting current and future taxation
Per UK adopted IA rules, unrelieved tax losses carried forward of £5,801,919
have not been recognised as a deferred tax asset as there is currently
insufficient evidence that the asset will be recoverable in the foreseeable
future.
9. Profit of parent company
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these financial statements.
The parent company's loss for the financial year was £13,841,707 (2022 -
loss of £1,906,671).
10. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below.
2022
Earnings Weighted average number of shares Per-share amount
£'000 pence
Basic EPS
Earnings attributable to ordinary shareholders (5,920) 95,816,866 (6.18)
Diluted EPS
Adjusted earnings (5,920) 95,816,866 (6.18)
2023
Earnings Weighted average number of shares Per-share amount
£'000 pence
Basic EPS
Earnings attributable to ordinary shareholders (6,682) 95,816,866 (6.97)
Diluted EPS
Adjusted earnings (6,682) 95,816,866 (6.97)
The Company had options issued over 7,207,500 (2022: 8,248,000) ordinary
shares.
Due to the losses incurred from continuing operations in the years reported,
there is no dilutive effect from the existing share options.
11. Investments
Company
£'000
Cost
At 1 January 2022 149
Share based payments 41
At 31 December 2022 221
Share based payments 10
As at 31 December 2023 231
Share based payments relate to costs of employee options
in the Company for employees of its subsidiary.
Summary of subsidiaries held in investments;
Name of entity Country of incorporation Ownership held Principal activities Registered office
Holding 2023 and 2022
GENinCode S.L.U. Spain Ordinary shares 100% Medical and scientific research Rambla d'Egara 235, 5ª planta C D, Terrassa 08224, Spain
GENinCode U.S. INC. USA Ordinary shares 100% Medical and scientific research 1209 Orange St., Wilmington Delaware 19801
GENinCode UK Ltd England & Wales Ordinary shares 100% Dormant company 1 St. Peters Square, Manchester, M2 3DE
Abcodia Ltd England & Wales Ordinary shares 100% Medical and scientific research 1 St. Peters Square, Manchester, M2 3DE
Abcodia UK Ltd England & Wales Ordinary shares 100%- Indirectly through Abcodia Ltd Dormant company 1 St. Peters Square, Manchester, M2 3DE
Abcodia CS Ltd England & Wales Ordinary shares 100%- Indirectly through Abcodia Ltd Dormant company 1 St. Peters Square, Manchester, M2 3DE
Abcodia Inc USA Ordinary shares 100%- Indirectly through Abcodia Ltd Dormant company 1209 Orange St., Wilmington Delaware 19801
12. Intangible assets
Group
Software Patents & Licences Total
£'000 £'000 £'000
Cost
At 1 January 2022 50 211 261
Adjustment relating to 2021 (8) (8)
Movement on retranslation 3 - 3
At 31 December 2022 53 203 256
Movement on retranslation (1) - (1)
At 31 December 2023 52 203 255
Amortisation
At 1 January 2022 36 32 68
Adjustment relating to 2021 - (8) (8)
Charge for the year 12 20 32
Movement on retranslation 3 - 3
At 31 December 2022 51 44 95
Charge for the year 2 21 23
Movement on retranslation (1) - (1)
At 31 December 2023 52 65 117
Net book value
At 31 December 2022 2 159 161
At 31 December 2023 - 138 138
12. Intangible assets (continued)
Company
Patents & Licences
£'000
Cost
At 1 January 2022 211
Adjustment relating to 2021 (8)
At 31 December 2022 203
At 31 December 2023 203
Amortisation
At 1 January 2022 32
Adjustment relating to 2021 (8)
Charge for the year 20
At 31 December 2022 44
Charge for the year 21
At 31 December 2023 65
Net book value
At 31 December 2022 159
At 31 December 2023 138
In patents and licences items with a NBV of £70k had a remaining useful life
of 7 years. The remaining items in patents and licences with a NBV of £68k
had a useful life of 8 years.
13. Property, Plant and Equipment
Group Plant Office equipment Total
£'000 £'000 £'000
Cost
At 1 January 2022 4 51 55
Additions 1 699 700
At 31 December 2022 5 750 755
Additions 30 8 38
Movement on retranslation - (26) (26)
At 31 December 2023 35 732 767
Depreciation
At 1 January 2022 2 7 9
Charge for the year 1 92 93
At 31 December 2022 3 99 102
Charge for the year 3 243 246
Movement on retranslation - (6) (6)
At 31 December 2023 6 336 342
Net book value
At 31 December 2022 2 651 653
At 31 December 2023 29 396 425
13. Property Plant and Equipment (continued)
Company Office Equipment
£'000
Cost
At 31 December 2022 199
Additions -
At 31 December 2023 199
Depreciation
At 31 December 2022 35
Charge for the year 66
At 31 December 2023 101
Net book value
At 31 December 2022 164
At 31 December 2023 98
14. Right of use assets
Group Right of use asset: Buildings
£'000
Cost
Additions 387
At 31 December 2022 387
Additions 15
At 31 December 2023 402
Depreciation
Charge for the year 38
At 31 December 2022 38
Charge for the year 82
At 31 December 2023 120
Net book value
At 31 December 2022 349
At 31 December 2023 282
14. Right of use assets (continued)
Company Right of use asset: Buildings
£'000
Cost
Additions 387
At 31 December 2022 387
Adjustment relating to prior year 15
At 31 December 2023 402
Depreciation
Charge for the year 38
At 31 December 2022 39
Charge for the year 82
At 31 December 2023 120
Net book value
At 31 December 2022 349
At 31 December 2023 282
15. Goodwill
Group Goodwill
£'000
Cost
Additions 149
At 31 December 2022 149
At 31 December 2023 149
Net book value
At 31 December 2022 149
At 31 December 2023 149
Abcodia Limited was purchased for an initial
cash price of £1, the fair value of the net assets acquired were £1. In
addition, a deferred consideration of up to £1m is payable to the vendors
subject to the achievement of an EBIT of £1m generated by the sale of ROCA
tests in the UK during the 6-year period following the date of acquisition.
This is payable in two tranches; the first tranche of £350,000 is payable on
the achievement of an EBIT of £350,000, and the second tranche of £650,000
is payable on the achievement of a further £650,000 of EBIT. Goodwill has
been calculated on the basis of only the first tranche of £350,000 being
payable to the vendors, discounted to a present value of £149,000 using a
rate of 15.3%.
16. Inventory
Group
2023 2022
£'000 £'000
Inventory 84 20
Total 84 20
In 2023, a total of £917k (2022: £798k) of
inventories was included in profit and loss as an expense as part of cost of
sales.
17. Trade and other receivables
Group
2023 2022
£'000 £'000
Trade receivables 428 315
Other receivables 81 299
Prepayments 73 103
Total 582 717
Company
2023 2022
£'000 £'000
NON-CURRENT
Intercompany receivables - 5,668
Total - 5,668
CURRENT
Trade receivables 33 156
Intercompany receivables 11,214 -
Provision for credit loss on Intercompany receivables (11,194) -
Other receivables 79 296
Prepayments 50 79
Total 182 531
The inter-company loans above have been provided for in full as per IFRS 9
recognition requirements for credit losses. Although the Board are confident
of all inter-company loans being collectible there is not enough evidence at
the year end and projected short term to contradict the credit loss. The
Board are confident this provision will reverse as the Group grows.
General terms for settlement of debt with clients are 30 days from the date of
invoice for private entities and 60 days with public entities. The carrying
value of trade and other receivables classified at amortised cost approximates
fair value.
18. Cash and
cash equivalents
Group
2023 2022
£'000 £'000
Total 2,484 9,732
Company
2023 2022
£'000 £'000
Total 2,171 9,468
Where cash at bank earns interest, interest accrues at floating rates based on
daily bank deposit rates.
The fair value of the cash & cash equivalent is as disclosed above. For
the purpose of the cash flow statement, cash and cash equivalents comprise of
the amounts shown above.
19. Financial assets
Group
2023 2022
£'000 £'000
Financial assets 42 16
Total 42 16
The Financial assets relate to Spanish ring-fenced money for Tender bids and
office rent.
20. Share
capital
2023 2022
£'000 £'000
95,816,866 Ordinary shares of £0.01 958 958
Total 958 958
21. Reserves
The following describes the nature and purpose of
each reserve within equity:
Share capital Amount subscribed for share capital fully paid.
Retained earnings Retained earnings represents all other net gains and losses and transactions
with shareholders (example dividends) not recognised elsewhere.
Share premium Excess subscribed above nominal value of shares. Included within share premium
are share issue costs which relate to commissions and other directly
attributable costs.
Foreign currency translation reserve This represents the net effect of translation of the subsidiaries whose
functional currencies are EUR and USD into GBP the reporting currency.
Share based payment reserve This reserve compromises the fair value of options share rights recognised as
an expense. Upon exercise of options or performance share rights, any proceeds
received are credited to share capital and where appropriate share premium.
22. Share based payments
The Company has issued share options as an incentive to certain senior
management. All share options granted during the year were granted under
individual agreements and are subject to market and service vesting
conditions. The exercise price is 44 pence on 772,000 shares and the rest are
at 15.83 pence.
Each share option converts into one ordinary share of GENinCode plc on
exercise and are accounted for as equity-settled share-based payments. The
equity instruments granted carry neither rights to dividends nor voting
rights.
No. options Weighted average exercise price (pence)
Balance as at 31 December 2022 8,248,000 18.47
Lapsed in 2023 1,040,500 15.83
Balance as at 31 December 2023 7,207,500 16.61
Exercisable at 31 December 2023 - -
The vesting conditions are as follows:-
· Staff and Board - based on market conditions, estimated 5 at years
vesting period
· Advisors - three years following grant date
The value of share based payments charged to
administrative expenses was £71,112 (2022, £101,894).
Employers' national insurance relating to the share based options has been
accrued amounting to £22,642 (2022: £13,761).
The share-based payment charge was calculated on the basis that the average
time period that the options are expected to remain unexercised is 36 months.
The fair value is estimated at the date of grant using the Black-Scholes
pricing model, taking into account the terms and conditions attached to the
grant. The following are the inputs to the model for the equity instruments
granted during the period:
Expected life 3-5 years
Expected Volatility 50%
Risk-free interest rate 0.35%
Share price at grant 12.2p to 15.83p
Fair value per award 4.27p to 7.92p
23. Trade and other payables
Group
2023 2022
£'000 £'000
NON-CURRENT
Contingent consideration (note 24) 178 155
Trade payables - 1,279
Total 178 1,434
CURRENT
Trade payables 1,194 1,416
Accruals 396 432
Tax payable 183 154
Other payables 622 76
Total 2,395 2,078
Company
2023 2022
£'000 £'000
NON-CURRENT
Contingent consideration (note 24) 178 155
Total 178 155
CURRENT
Trade payables 196 454
Accruals 252 262
Tax payable 30 28
Other payables 622 5
Total 1,100 749
Included in Other payables for the Company and Group is £609,993 of funds
held on account in advance of a share issue. The share issue and raise were
completed in January 2024, see note 30.
General terms for settlement of debt are 60 days in general, after the invoice
has been remitted from supplier.
The carrying value of trade and other payables classified at amortised cost
approximates fair value.
24. Contingent consideration
Group
2023 2022
£'000 £'000
NON-CURRENT
Contingent consideration 178 155
Total 178 155
Company
2023 2022
£'000 £'000
NON-CURRENT
Contingent consideration 178 155
Total 178 155
The contingent consideration relates to the acquisition of Abcodia Limited
which has a deferred consideration of up to £1m, payable to the vendors
subject to the achievement of an EBIT of £1m generated by the sale of ROCA
tests in the UK during the 6-year period following the date of acquisition.
This is payable in two tranches; the first tranche of £350,000 is payable on
the achievement of an EBIT of £350,000, and the second tranche of £650,000
is payable on the achievement of a further £650,000 of EBIT. Contingent
consideration has been calculated on the basis of only the first tranche of
£350,000 being payable to the vendors, discounted to a present value of
£178,000 using a rate of 15.3%.
During the year an expense of £23,664 (2022: £5,698) was recognised on
unwinding the contingent consideration at a rate of 15.3%.
25. Lease liability
Maturity analysis- contractual undiscounted cash
flows:
Group
2023 2022
£'000 £'000
Less than one year (undiscounted) 96 91
One to five years (undiscounted) 240 320
More than 5 years (undiscounted) - -
Lease liability included in the financial
statements:
Group
2023 2022
£'000 £'000
NON-CURRENT
Lease liability 221 285
Total 221 285
CURRENT
Lease liability 78 69
Total 78 69
25. Lease liability (Cont.)
Maturity analysis- contractual undiscounted
cash flows:
Company
2023 2022
£'000 £'000
Less than one year (undiscounted) 96 91
One to five years (undiscounted) 240 320
More than 5 years (undiscounted) - -
Lease liability included in the financial
statements:
Company
2023 2022
£'000 £'000
NON-CURRENT
Lease liability 221 285
Total 221 285
CURRENT
Lease liability 78 69
Total 78 69
Lease liability reconciliation:
2023
£'000
Total balance brought forward 354
Payments (79)
Interest 24
Total balance carried forward 299
An interest expense of £24,080 with regards to the lease liability has been
included in the accounts (2022: £13,807). A discount rate of 7.5% is used in
the calculation of the liability and right of use asset. The lease term is 5
years ending in August 2027.
26. Provisions and contingencies
Group
2023 2022
£'000 £'000
Deferred tax 25 31
Total 25 31
Company
2023 2022
£'000 £'000
Deferred tax 25 31
Total 25 31
Deferred tax relates to accelerated capital
allowances.
27. Capital commitments
There is no capital expenditure contracted at this year-end reporting.
28. Related Party Transactions
During the year the Group and Company entered into the following transactions
with related parties:
2023 2022
Related party Transaction £'000 £'000
Felix Frueh Fees, £5,000 was outstanding (2022, £5,000) 30 23
Huon Gray Fees (pre-Directorship) - 5
William Rhodes Chairman's fees, £3,765 outstanding (2022, £3,765) 45 45
Compensation of key management personnel of the Group
Key management are those persons having authority and responsibility for
planning, controlling and directing the activities of the Company. In the
opinion of the Board, the Company's key management are the Directors of
GENinCode plc.
Amounts included in the Financial Statements, in aggregate, by category of
related party are as follows:
Group Group
31 December 2023 31 December 2022
Directors £'000 £'000
Directors' remuneration (short term benefits) 659 650
Directors' remuneration (pension cost) 13 16
Directors' remuneration (employers NI) 58 77
Share based payments 28 36
Total 758 779
29. Contingent liability
As per note 24 there is a contingent consideration relating to the Abcodia
Limited's deferred consideration. The contingent liability is for the second
tranche of £650,000 being payable on the achievement of £1m of EBIT
generated by the sale of ROCA tests in the UK during a 6-year period following
the date of acquisition. Due to current performance and predictions the Board
believes it is extremely unlikely to become due, therefore this has not been
provided for in the financial statements.
30. Events after
the reporting date
On 10 January 2024 the Company issued 81m shares as a result of a fund raising
£4m in capital for the Group. Part of this capital was received during the
year on account and is held in Other payables, see note 23. This represents
a non-adjusting event.
On 26 April 2024, the Company announced that it had approved and granted (on
14 April 2024) new options over an aggregate of 19,380,630 new ordinary shares
of 1 pence each in the Company to certain directors and employees of the
Company, representing 10.95 per cent. of the Company's existing share capital;
8,642,500 of the new options have an exercise price of 5 pence per share and
are exercisable on the second anniversary of the date of grant and 10,738,130
of the new options have an exercise price of 10 pence per share and are
exercisable on the second anniversary of the date of grant. Additionally, on 8
April 2024, 6,984,500 of the options previously granted were surrendered for
nil consideration. Following the grant of the new options and the options
surrender, there are options over a total of 19,580,630 ordinary shares in the
Company.
There are no significant adjusting events after
the reporting date.
31. Ultimate
controlling party
The Group does not have an ultimate controlling
party.
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