Launch of Dr Morepen LightLife in India
Half Year Results
OptiBiotix Health plc (AIM: OPTI), a life sciences business developing compounds to tackle obesity, cardiovascular disease, diabetes and skincare, announces its unaudited results for the six months ended 30 June 2024.
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Highlights
- Significantly increased order book and solid sales performance/li>
- Reported revenues decreased by 21.3% to £276K (H1 2023: £351k), although sales orders received during the period were substantially higher than in H1 2023
- Strong strategic and commercial progress achieved in the first half has continued in the second half to date
- E-commerce sales increased three-fold
- Healthy balance sheet with gross assets of £8.0m (30 June 2023: £9.9m), no debt and cash of £1,263K (30 June 2023: £893K)
- Successful placing to raise £1,350,500 through the issue of 6,752,500 new ordinary shares of 2 pence each in the Company in March 2024
- Launch of LeanBiome® in Muscletech®, a leading sports nutrition brand
- Partnership agreement with Morepen for SlimBiome® containing finished products
- Manufacturing agreement with KAG Industries
- Roehampton University submitting the results of a third human study on SlimBiome® for publication, which demonstrated statistically significant benefits to appetite and hunger regulation with no safety, compliance or tolerance issues reported by the participating volunteers. This study underlined the effectiveness of a single dose of SlimBiome® in delivering hunger-free weight loss by non-invasive means, and was timely in view of the growing consumer, media and pharmaceutical interest in this field
Stephen O’Hara, CEO of OptiBiotix Health plc said: “The fundamentals of our marketplace remain very exciting, with a range of recent market reports highlighting that products across the entire OptiBiotix portfolio have the potential to meet growing demand as solutions to a wide and increasing range of lifestyle-related health challenges. Given the excellent customer reviews, high customer return rates, multiple industry awards, and new customers launching products in key markets we believe there is a substantive opportunity to leverage market interest by increasing customer awareness of our products either directly through social media channels or indirectly through investing with our partners, and so build a successful and profitable business.
“The commercial traction we are now enjoying in our first-generation products with large partners in key markets, and the interest shown by other partners in our potentially industry-changing second-generation products, allows us to look to the future with a high degree of confidence. In the shorter term, based on orders already placed, we are also confident that full year revenues will be well ahead of those reported in 2023.
“With appetite suppression, gut health, sugar alternatives and modulation of the human microbiome all attracting ever-increasing interest, we believe that the Company is strongly placed to achieve profitability through growing sales of its now proven first-generation products, while progressing towards the commercialisation of our even more exciting second-generation products, SweetBiotix® and human microbiome modulators.
“We are confident that our strategy will deliver an improved sales performance for the rest of this year, and will continue in 2025, and look forward to demonstrating the long-term growth potential of the Group.”
Chairman’s and Chief Executive’s Statement
We are pleased to report good progress towards all our main strategic objectives for 2024:
- increasing our number of partners and sales in our key target markets of the USA and Asia;
- investing in e-commerce channels to drive direct-to-consumer sales;
- and growing our sales of final branded or white label products containing our ingredients so as to deliver a dual income stream.
The strong sales momentum re-established after our senior management change in 2023 has continued, with orders placed by the end of H1 2024 almost matching our reported revenue for the whole of 2023, and a number of business areas achieving or moving close to profitability in line with our plans.
Strategic overview
The Company’s strategy is to focus on global markets with exceptional growth potential and to target these with a diverse portfolio of highly differentiated, clinically proven and patented products. We have adopted a layered two-generation approach to the development of our product portfolio with the aim of progressively building credibility and awareness of the Company in order to reduce risk and maximise opportunities for our investors.
The unique compounds OptiBiotix has created address what are recognised as some of the world’s fastest-growing public health challenges: obesity, cardiovascular disease and diabetes. With appetite suppression, gut health, sugar alternatives and modulation of the human microbiome all attracting ever-increasing interest, we believe that the Company is well placed to achieve profitability through growing sales of its now proven first-generation products, while progressing towards the commercialisation of our even more exciting second-generation products, SweetBiotix® and human microbiome modulators.
The years we have spent undertaking clinical studies to establish robust health claims in multiple international markets for our first-generation products mean that SlimBiome® has now achieved strong scientific credibility and acceptance by major partners and consumers as a proven aid to weight management. We have also successfully extended our technology into new channels such as sports nutrition with LeanBiome®, already incorporated into two of the world’s leading sports nutrition brands, Myprotein and MuscleTech, and into new product areas such gut and digestive health with WellBiome®.
More recently, we have been able to capitalise on the huge public and media interest in injectable weight loss GLP-1 agonists like Semaglutide, marketed as Ozempic and Wegovy. Whilst SlimBiome® and the GLP-1 agonists both regulate insulin response and slow down stomach emptying improving appetite control, SlimBiome® works in a totally natural, non-invasive way and without any adverse side effects. Recent work with dieticians at a specialist London obesity clinic indicates that SlimBiome® may also have potential as an adjunct to treatment with Ozempic/Wegovy. Work is ongoing to explore whether combining SlimBiome® with these drugs may help to reduce drug dosage, and thereby the cost of treatment and side effects, and enhance or prolong the appetite suppressant effect of the drugs.
Whilst initial discussions and assessment are with specialist weight management clinics largely in London, if these early findings are confirmed we will go direct to the pharmaceutical companies selling these products to explore the potential of using SlimBiome, probably by a different name, as an adjuvant to drug treatment.
We are also progressing towards commercialisation of the second-generation SweetBiotix® and microbiome modulator family of products which offer shareholders the potential for significant value enhancement. The Company has seen a high level of corporate interest in these second-generation products and is in discussion with a wide range of industry partners over product application and launch timescales, some already announced and some with new potential partners. Given we are working with large corporate partners in both manufacturing scale up and use in final product these are complex discussion where confidentiality is paramount.
We also see very significant further potential for revenue growth and value creation through the development of microbiome modulators, which apply our unique patented technologies to precision engineer the human microbiome to enhance those microbes that deliver health benefits. This is an emerging field of research and development for both the food and pharmaceutical industries, which we believe offers the opportunity to transform healthcare. Whilst the technology is applicable to a wide range of probiotics the commercial focus for our first product is Lactobacilli as they make up 65% market share by revenue (Coherent Market Insights, 2023) of the global probiotic market, which is valued at $57.8 billion (Mordor Intelligence, 2022). The creation of synergistic synbiotics which improve the growth rate, gut survival, and improve efficacy of existing probiotics is a new opportunity in the highly competitive probiotic industry. Opportunities exist to supply large corporates with a product which has the ability to improve all their products containing Lactobacilli, or codevelop, or license the technology for specific species.
The Company asks shareholders to be patient and respect our need for confidentiality in the development of its second-generation portfolio, and will make announcements on its progress as research milestones are reached or agreements with partners are concluded.
We have a high level of confidence in the scale of the opportunity within OptiBiotix and our ability to deliver sustained growth for shareholders in the years ahead.
Consumer Health and E-commerce
OptiBiotix has made significant investments in its e-commerce business to drive direct-to-consumer sales as a strategic move to reduce reliance on retail partners and to increase profit margins. The Consumer Health division has the advantage of receiving online sales income immediately and allows more control over the Company’s brands and messaging whilst reducing reliance on distributors.
The Consumer Health division has continued to grow rapidly during the year with sales to 30 June 2024 exceeding the £151K achieved for the whole of 2023, and showing a three-fold increase over H1 2023. The biggest contributor to H1 sales was China, with our own OptiBiotix Online website and Amazon UK making up the rest with a roughly equal split, together with a small contribution from Amazon UAE which launched late in H1 2024.
In China, the shift in focus from TikTok to Tmall noted in the annual report has led, as expected, to fewer but more sustainable sales at a much lower marketing cost and an improvement in profitability.
The UK has delivered the strongest growth in direct-to-consumer sales this year. Our own OptiBiotix Online direct sales operation, with much lower marketing costs, has returned a positive contribution to shared e-commerce costs every month in 2024 to date. Sales through Amazon UK have shown the highest growth rate of all our online channels, but the platform has been loss making, reflecting the investment in marketing to grow our customer base. However, 25% of all Amazon customers pay by monthly subscription as repeat customers and, as the Company grows its customer and subscriber base, and increases sales from repeat purchases, marketing costs typically reduce as a percentage of sales and this is expected to lead to profitability. SlimBiome® remains among Amazon’s top sellers for appetite suppressants and achieved record sales during Prime month in July 2024, while our SnackSmart SlimBiome® Indulgence bars are now among Amazon’s Top 10 best sellers in the ‘diet bars’ category. WellBiome® has also quickly established itself as a strong seller on the platform with a 4.7* rating.
After waiting many months for a European VAT certificate, the Company can now sell through new Amazon channels in Germany and we are starting to see sales flow in this territory in H2. Amazon India is expected to follow in early October 2024. As we increase the number of countries into which we sell directly to consumers via Amazon, and we optimise our product offering in different markets, we look forward to continued sales growth through the remainder of 2024 and beyond.
North America
We have made good progress towards our strategic goals of increasing our number of partners and growing our sales within the USA, the world’s largest economy.
At the beginning of 2024, we were pleased to report the launch of LeanBiome® in MuscleTech’s Nitro Tech Ripped range, a premium protein powder designed to support athletes who want to lose fat and build lean muscle. MuscleTech defines itself as the No.1 selling Bodybuilding Supplement Brand in America - https://www.muscletech.ca/research/ - and the inclusion of LeanBiome® in this leading global sports brand is a significant endorsement of our product. Muscletech has continued to fill its distribution network in Europe, where sales to date have exceeded expectations, with further orders for LeanBiome® anticipated in H2 2024, and a launch in the much larger North American market under consideration.
LeanBiome® is now included in two leading sports nutrition brands, Myprotein and MuscleTech, a global market worth $45.2bn in 2023 and expected to grow at a CAGR of 7.5% per annum to 2030 (Grand View Research, 2023).
In line with our strategy of selling more final product and expanding our interests in the USA, the Company has continued to progress sales opportunities with a number of large North American corporates. As announced on 29 July 2024, the Company was pleased to receive its first order from one of these, a NASDAQ listed USA e-commerce and direct selling company, for a tomato soup final product containing SlimBiome® which is expected to be launched in January 2025 in Hong Kong for cross-border sales into China for Chinese New Year, and subsequently sold in the USA.
Discussions are ongoing with a number of other large US partners to include our ingredients in partner final products. These include SlimBiome® and SweetBiotix® (which has been developed in a finished product for a large global partner) and our microbiome modulators. The Company is hopeful that further announcements with corporate partners in the USA will be made in due course.
OptiBiotix Health India
India is already the most populous nation on Earth, anticipated to have the world’s largest cohort of medium to high level income consumers by 2035 and to become the planet’s second largest economy by the 2050s. With obesity prevalence already measured at 40.3%, it presents a huge area of opportunity for weight management products in particular, and our strategic investment in establishing OptiBiotix Health India in 2021 has given us a strong platform for growth through the local manufacture and sale of both ingredients and final products.
The business took a material step forward with the announcement on 13 March 2024 of a major new five-year partnership agreement with Morepen to sell products containing SlimBiome® under the Dr Morepen brand: an established, well known, and trusted brand in the Indian market. OptiBiotix will receive revenue for both the ingredient and final product sales. The first order received in May 2024 for 5 flavoured shots has been increased and a further order received for a chocolate shake. Further products are under development for launch in 2025.
This is the first time OptiBiotix has coinvested in marketing with a partner to try to rapidly achieve a large market share in a major market. Morepen have confirmed launch dates within H2 and these will be announced in conjunction with Morepen and associated the marketing activities. As announced on 13 March 2024, based on Morepen’s current forecasts, this agreement could contribute in the region of £6 - £7 million revenue per annum to OptiBiotix by the fifth year of the partnership.
We have signed a supply contract with KAG Industries as our alternative manufacturing partner in India to mitigate the risk of relying on a single partner in the territory, and they have commissioned machinery specifically to supply product for Dr Morepen and are advertising SlimBiome® in their forums and exhibitions.
We continue to sell GoFigure® products through approximately 1,000 Apollo Pharmacies stores across India, with a new product launch scheduled for next month, with improved branding and flavours. A launch on Amazon India is also scheduled for October 2024 in addition to pursuing a strong pipeline of other opportunities with leading and emerging players in weight management and sports nutrition in the country.
We believe that our agreement with Morepen and the upcoming launch of more products under the Dr Morepen brand, plus other partner launches planned for Autumn 2024 and the reorder of products by Apollo pharmacies could generate significant revenues and bring profitability to this part of the business during 2024.
Asia
In 2023, OptiBiotix signed agreements with four new partners in Asia for SlimBiome® and to date we have received just under £80,000 worth of initial orders. These partners include Nasol Pharma International (Vietnam), Bonanaza Neutra (Thailand), Colorinda Chemtra (Indonesia), and NexusWise (Malaysia and Singapore): all well-known specialist distributors in their field of expertise who will work with local manufacturers and brands to launch products containing SlimBiome®. The Board believes this is a strategic investment in high growth markets that are anticipated to grow relatively slowly but have the potential to deliver significant revenues in the future.
Results
Our results for the six months ended June 30 2024 are set out below, and show revenue falling by 21.3% to £276K (H1 2023: £351k), despite a significantly increased order book. As mentioned above, our e-commerce sales increased three-fold, but with lower reported sales from our wholesale business. The nature of the wholesale business can see significant fluctuations in reported sales between reporting periods, as is apparent in these results, with H1 2023 including a sale of over £100K to North America to support the MuscleTech consumer launch.
Sales orders received during the period were substantially higher than in H1 2023, but IFRS 15 accounting rules allow us to include revenue only when goods are accepted by our customer, even when prepayment for them may have been received. The growing gap between the placement of orders and the recording of revenue reflects our success in attracting newer and larger overseas partners who are placing orders for final products rather than ingredients, and the longer timescales involved between placing an order for a new product launch and the customer ultimately accepting the goods once manufactured. To the date of this statement, the total of reported sales and confirmed orders exceeds our total 2023 sales of £644K.
Administration expenses increased to £1,177K (H1 2023: £918K). H1 2023 benefitted from a £125K bad debt recovery, whilst our significant increase in on-line sales also comes with a corresponding growth in marketing and commission costs. There were no other significant cost changes. As a result, the Company recorded an operating loss of £1,066K (H1 2023: £760K). The reported loss before taxation was £2,799K (H1 2023: £1,854K). The mark to market downwards valuation of our investment in SkinBiotherapeutics Plc was £1,655K (2023 H1: £1,066K), although our share of loss from our associate, ProBiotix Health Plc, decreased from £226K to £118K. We also made a small gain on the disposal of a portion of our shareholding in SkinBioTherapeutics Plc of £40K (2023 H1: £198K).
As in previous years, there was no contribution in this period from licence or royalty payments which tend to be received in the second half of the year.
The Company continues to enjoy a healthy balance sheet with gross assets of £8.0m (30 June 2023: £9.9m), no debt and cash of £1,263K (30 June 2023: £893K).
Outlook
The strong strategic and commercial progress we have achieved in the first half has continued in the second half to date. The commercial agreements we have secured with new and larger partners in key strategic markets, and our increasing emphasis on the sale of customer own brand finished products rather than stock ingredients, mean that production and delivery times, particularly for the first order are longer. This is because we have to work with the customer on developing the formulation, design and artwork, and packaging unique to the product. The customer has a proprietary own brand product which they are more likely to invest in marketing and grow the brand. However, for the first-year orders received and confirmed in H1 (e.g. Morepen, KAG, Apollo new products) will not be reportable under IFRS until H2, when the goods are accepted by the customer, even though prepayment may have been received (RNS: 20 August 2024). We believe that whilst this adds more complexity to the supply chains and there is often a six-to-eight-month lag between first orders being placed and delivered this is justified by the increase in sales of both ingredient and product, larger orders, and higher margin. We have seen the initial stages of this transition in India and the USA in H1 and hope to announce further orders with corporate partners in the USA and India as they are confirmed.
Our Consumer Health division continues to trade strongly, with fresh records for Amazon sales expected to be set in November 2024 through the stimulus of Black Friday events. In China, we are examining the placement of our products in new platforms and categories to circumvent unexpected restrictions on the weight loss category in the country, which have prevented us from advertising our products on large platforms such as TikTok. We have recently signed an agreement with our UAE distributor to trade into Saudi Arabia and are exploring plans to extend onto additional ecommerce platforms in the UAE.
In the USA, we are currently finalising label claims and a trademark licensing agreements for SlimBiome® with a leading weight management brand and pursuing several other projects including a fully developed beverage concept with a large retail and ecommerce brand focused on the microbiome, which is expected to launch online and then with existing major retail partners in Q4 2024 or Q1 2025. We are in the early stages of developing a sachet concept with SlimBiome® for potential launch in mid-2025 with a major US retailer whilst a Hong Kong-based ecommerce company focused on North America is looking to reformulate its flagship daily prebiotic with WellBiome®.
We have a number of new products under development in India as part of a range extension for Morepen and other partners including new six calorie button gummies, new formula breakfast, dinner and snack shakes, and new high protein, high fibre, low calorie bar containing SlimBiome®.
As our products launch with new partners in new territories, the Company’s focus will be on supporting our partners with training and marketing assets to ensure sales growth and repeat orders. In some cases where the market opportunity justifies it, as with Morepen, we will coinvest to ensure we can rapidly scale the opportunity.
The fundamentals of our marketplace remain very exciting, with a range of recent market reports highlighting that products across the entire OptiBiotix portfolio have the potential to meet growing demand as solutions to a wide and increasing range of lifestyle-related health challenges. Given the excellent customer reviews, high customer return rates, multiple industry awards, and new customers launching products in key markets we believe there is a substantive opportunity to leverage market interest by increasing customer awareness of our products either directly through social media channels or indirectly through investing with our partners, and so build a successful and profitable business.
The commercial traction we are now enjoying in our first-generation products with large partners in key markets, and the interest shown by other partners in our potentially industry-changing second-generation products, allows us to look to the future with a high degree of confidence. In the shorter term, based on orders already placed, we are also confident that full year revenues will be well ahead of those reported in 2023.
N Davidson and S O’Hara
27 September 2024
Chief Executive’s Report
Since the restructuring of our senior management team in Spring 2023, the Group has focused on restoring sales growth and working towards profitability through the more active management of existing accounts, broadening its partner base, and investing in ecommerce channels, while reducing costs. This is all part of a plan to take multiple products in the microbiome space to a global marketplace. Our first-generation products now enjoy widespread acceptance in international markets, helping us to reach new agreements with a number of well-known corporate partners and to launch new products in more territories expanding our customer base. Our online sales are growing strongly, particularly in China and we are looking to replicate this approach in other high growth territories such as India in 2024. We have also reached an exciting stage in the commercialisation of our second-generation products SweetBiotix® as a bulk sugar replacement and in finished products and seeing growing interest in our microbiome modulators. The Group remains financially robust with a strong balance sheet (circa £9.4m at 31 December 2023) and no debt. We believe that the Group is now at a strategic inflection point having made strong progress in 2023 and early 2024 on its stated aims of establishing sales in major international markets like the USA, China, and India. As partner and ecommerce sales in these territories grow, we launch new products like WellBiome® with existing partners, add new partners in the USA and India, and bring our second generation products to market, we have a number of opportunities, any one of which would be transformational for the Company and shareholders alike, and collectively change the future of the business.
Strategic overview
OptiBiotix Health PLC (OPTI) is a life sciences business founded on the development of prebiotic and probiotic compounds to tackle obesity, cardiovascular disease, diabetes and skincare: all markets offering strong growth potential in every part of the world. The Company has built an extensive portfolio of microbiome assets in this field including prebiotic products like SlimBiome®, WellBiome®, SweetBiotix® and Microbiome modulators within its core business, skincare through SkinBioTherapeutics PLC (SBTX) and probiotics through ProBiotix Health plc (PBX). These are both separately listed companies in which OptiBiotix has a shareholding. These create a diverse portfolio of opportunities in an emerging area of healthcare which is of growing interest to consumer markets around the world.
Our strategic approach has been to target global markets with highly differentiated, clinically proven and patented products. Whilst ambitious, more costly and time consuming than commercialising in local markets it recognises the potential scale of the opportunity. The strategy has been designed to reduce risk and maximise opportunities for investors by recognising the challenges inherent in bringing new technologies and products to a naturally conservative global food market, where consistency and risk avoidance are key, and the acceptance of new products is notoriously slow.
In addition to founding and developing three distinct companies, we have layered our development portfolio by creating both first-generation products (SlimBiome® and WellBiome® in prebiotics and LPLDL® in probiotics) and second-generation products (SweetBiotix® and Microbiome modulators). This has allowed us initially to build sales and awareness of the Company and its functional ingredients through its first-generation products while developing the riskier and more innovative second-generation products that offer potentially greater upside for investors.
The development of three distinct companies (OPTI, SBTX and PBX) with similar fundamental science but different applications and markets provides investors with multiple plays in the emerging microbiome market, both reducing their risk and providing significant potential gains if one or more new products is successfully brought to market.
Placing these companies separately on public markets creates tangible assets which can potentially be disposed of to pay shareholders an ad hoc dividend, as with the £10.25m dividend issue to OPTI shareholders on the listing of PBX in March 2022, or the £5.4m of share sales in SBTX by OPTI since its listing in 2017, which has reduced the need to fundraise for the continued development of OPTI and avoided dilution for our own shareholders.
As a result, OPTI today has a strong balance sheet (circa £9.4m at 31 December 2023) with no debt, and multiple plays providing scope for profitable development in different areas of the emerging microbiome space.
The annual accounts for 2020 and 2021 showed that each of OPTI’s businesses was profitable at the EBITDA level, with the Group as a whole attaining profitability by virtue of the increased value of its SBTX asset. In 2022 we faced a most challenging year in the wake of the COVID-19 pandemic and the global economic uncertainty that followed the Russian invasion of Ukraine, and increased costs and reduced sales following the appointment of a new CEO.
We took decisive action to address this through the departure of the CEO of the prebiotic business under OptiBiotix Ltd in Spring 2023 and a series of measures to reduce Board, management and advisory costs. Since implementing these measures and under the renewed leadership of Stephen O’Hara as CEO, we have enjoyed three quarters of increased sales. This growth has continued into 2024.
Action has also been taken to reduce commercial risk in the business by increasing the number of large partners in key strategic markets, particularly the USA and Asia Pacific, with new relationships with Brenntag, Tata, Iovate/Muscletech, and in 2024 an agreement with Morepen.
Equally importantly, we have made significant investments in our ecommerce business to drive our direct-to-consumer sales, reducing reliance on retail partners and increase our profit margins. While sales through retail partners offer potential benefits in generating volume, and increase the awareness and credibility of OPTI products, margins are lower and the uniqueness of our formulations and their functional benefits are often lost to retail staff and consumers among the many competing brands on offer.
With our first generation products gaining traction in the USA, China, and India and the upcoming launch of our second-generation products, OPTI is well placed to become a major player in the expanding microbiome market.
Commercial and scientific overview
During the year we have focused on driving sales growth through the more active management of existing key accounts; increasing the number of partners in key strategic markets, particularly the USA, China, and India; and investing to increase direct sales to customers through ecommerce channels in the UK and subsequently internationally.
Key developments during the financial year included:
Active management of existing key accounts:
- An increase in sales of LeanBiome® to The Hut Group for inclusion in its Myprotein range.
- An increase in sales to Holland & Barrett health and wellbeing retail and online business in the UK, albeit from a very low base in 2022.
- An increase in sales of SlimBiome® to Paradise Fruits, a German company producing gummies for Walmart and for sale online in China.
- Increased sales of our OptiBiome® prebiotic fibre (an alternative trademark to SlimBiome®) to Optipharm in Australia following the launch online of their Optislim and Optiman ready meal ranges incorporating a ready meal OptiBiome sprinkle and a significant new investment in marketing.
- An increase in the number of Apollo pharmacies in India and Nahdi pharmacies in Saudi Arabia selling GoFigure® products.
- A reduction in SlimBiome® stock held by partners: there was 13.9 metric tonnes of SlimBiome® taken from stock held by two partners (Maxum and Cambridge Commodities) in 2023 compared to 2022 (up 39%) representing a value of approximately £417K based on retail price of £30 per kg. The Company has commenced manufacture of replacement stock for Cambridge Commodities as it anticipates most of this stock will be used for existing orders planned for delivery in the first half of 2024.
Increasing the number of new partners, particularly in the USA and India:
- Recruiting four new partners for SlimBiome® in Asia through our partnership with Nutraconnect Pte, all of which placed initial orders before the end of 2023 and which we expect to contribute revenues of £125,000 to £150,000 in 2024.
- Securing a license agreement with Tata Chemicals – part of the $300bn turnover Tata Group – to incorporate its proprietary Fossence® into our SlimBiome® and WellBiome® products for the Indian market. This brings the assurance and familiarity of a branded ingredient from a well-known and trusted local source to the attention of Indian consumers
- Reaching a new distribution agreement for SlimBiome® in Australia and New Zealand with Ravenswood Ingredients, part of the Brenntag group which is a global leader in specialised food ingredients.
- One of our partners, Optipharm, securing an international listing for products containing SlimBiome® with CostCo, the fifth largest retailer in the world.
- Ongoing discussions with a leading US corporate on a global launch of SlimBiome® in 2025 in multiple territories.
Investing in ecommerce channels:
- The Company has made significant investments in new ecommerce channels, including Amazon in the UK, Walmart in the USA, and Tmall.com in China, to increase the proportion of our sales made direct to consumers. This has generated strong growth in turnover, with total ecommerce sales up approximately threefold in 2023 from 2022 and continued growth in Q1 2024 which we hope will continue as more channels come on line.
- Successfully launching new products including our reformulated gut and digestive health WellBiome® functional fibre and mineral blend, which has been selling strongly through both our own website and Amazon UK.
Other developments:
- A shift in our commercial focus to selling SlimBiome® Medical sachets in Europe and SlimBiome® shots in India and the Gulf states. These have been developed to help users manage their weight by reducing hunger and food cravings. This is a highly differentiated product which leverages growing market interest in anti-obesity GLP-agonist drugs like Semaglutide which work by reducing appetite. SlimBiome® compares favourably with these drugs and offers a healthy, natural and safe approach to weight management, with no observed side effects in multiple human studies. GLP-agonists have a number of reported common adverse effects and potentially serious side effects in some groups. SlimBiome® can be used with any weight management or calorie restriction plan and so complements rather than competes in a crowded marketplace. The product enjoys high margins and became a top-selling line within its market segment on Amazon UK in 2023.
- Roehampton University submitting the results of a third human study on SlimBiome® for publication, which demonstrated statistically significant benefits to appetite and hunger regulation with no safety, compliance or tolerance issues reported by the participating volunteers. This study underlined the effectiveness of a single dose of SlimBiome® in delivering hunger-free weight loss by non-invasive means, and was timely in view of the growing consumer, media and pharmaceutical interest in this field.
- Securing a grant from the Biotechnology and Biological Science Research Council to fund a research project by the University of Leeds into the impact of WellBiome® on the gut microbiome throughout the digestive tract. This is expected to provide further substantiation of existing health claims for WellBiome® in international markets.
- Hull University securing NHS Ethics approval as part of a large programme grant (£2.7 million) amongst which is the proposal to explore WellBiome® impact post-surgery. This is a project independent of OptiBiotix in which Hull University have purchased WellBiome® to explore its impact on post-surgical recovery times.
North America
We have a strong sales pipeline in North America and the USA made up of small, medium size, and a number of large US corporates (including a £9bn Multi-Level Marketing company -MLM) that offer opportunities for sales growth in 2024 and beyond. The Company was pleased to receive a first order of £116k from Muscletech in 2023, a leading weight management and sports nutrition brand in the USA. This is a major sports nutrition brand who are making a significant investment in LeanBiome® as a key differentiator in the protein market and, if successful on launch could have a material impact on future revenues.
The Company reported at the start of 2024 the launch of LeanBiome® in MuscleTech’s Nitro Tech Ripped range, a premium protein powder designed to support athletes who want to lose fat and build lean muscle. LeanBiome® is now included in two leading sports nutrition brands, Myprotein and MuscleTech, across the world, a market worth $45.2bn in 2023, and expected to grow at a CAGR of 7.5% pa to 2030, (Grand View Research, 2023). The Company sees the sports nutrition market as an area of growing interest and opportunity for its LeanBiome® brand with the scientific evidence increasingly showing that optimising an athletes gut microbiome could improve an athletes’ stamina, lower inflammation, and support physical fitness (Frontiers | Editorial: Nutrition to support gut health and the microbiome in athletes (frontiersin.org). Having two major global sports nutrition brands making a significant investment in LeanBiome® highlighting it as a key science based differentiator should provide investors a good indication to the potential opportunity developing within the sports nutrition market. If successful, this could have a material impact on future revenues and open up further opportunities in sports nutrition around the world. The Company continued to advance projects and expand the pipeline of opportunities with large North American companies and exhibited its SlimBiome®, LeanBiome®, and Wellbiome® products at Supply Side West, USA, in November 2023. Our focus is on companies committed to science and strong storytelling, especially in weight management, wellness, and sports nutrition with a special emphasis on e-commerce, direct selling, and retail brands.
The Company is hopeful that further announcements with corporate partners in the USA and Canada in 2024 will be made in due course.
OptiBiotix Health India
OptiBiotix Health India (OHI) was formed in November 2021 as a mid- to long-term strategic investment in the world’s most populous nation of 1.4bn consumers, forecast to have a middle-class population of 475 million by 2030 and the world’s largest cohort of medium to high level income customers by 2035. With obesity prevalence currently measured at 40.3%, India represents a huge area of opportunity for weight management products.
The formation of OHI has helped OPTI to avoid high import taxes and to control the purchase and sale of both ingredients (SlimBiome®) and finished product (GoFigure®, Morepen) manufactured and sold in India.
After a slow start following the launch of products with Apollo Pharmacies in September 2022, momentum built during the year resulting in GoFigure® products being sold through approximately 1,000 stores by the year-end.
Apollo’s own consumer survey showed an 87% customer return rate among purchasers of GoFigure® products and 23% of new customers visiting their pharmacies who just bought GoFigure® products. This feedback is consistent with that from THG, who gained 40% new customers with the introduction of LeanBiome® to their Myprotein range. Such results create a positive platform for commercial discussions with potential new partners, demonstrating the consumer appeal of our products and their ability to attract both new and returning customers.
The licence agreement we secured with Tata Chemicals in October 2023 to incorporate its proprietary Fossence® into our SlimBiome® and WellBiome® products for the Indian market which is anticipated to increase their appeal to Indian consumers. In Q1 2024 we announced a major new partnership agreement to sell products containing SlimBiome® under the well-known and trusted Dr Morepen brand. This is an established, well known, and trusted brand in the Indian market and represents a material step forward for our products in the Indian market. OptiBiotix will receive revenue for both the ingredient and BTB product sales with first orders placed for launch in Q3 2024. Based on Morepens current forecasts this agreement could contribute in the region of £6-7 million revenue per annum to OptiBiotix in the next four to five years (see announcement March 2024).
Thanks to the work of the Department of Business and Trade and our Business Development Director, Dr Taru Jain, we have high industry awareness of OptiBiotix and its products throughput India. This has created a strong pipeline of opportunities with emerging and leading players in weight management and sports nutrition in India, where we expect to build a substantial business in the years ahead.
Consumer Health and Ecommerce
The Consumer Health division grew rapidly during the year, with our total Ecommerce sales increasing threefold in 2023 compared to 2022. This was driven by strong growth in the sale of gummies in China and large increases in Amazon Prime subscriptions.
Gummy sales in China during the year varied widely per month, increasing rapidly in October and November with the aid of local key opinion leader influencers and new sales through the TikTok platform. Marketing on TikTok can increase sales rapidly but at a high cost and tend to be impulse buys with lower repeat purchases. Our TikTok account is managed by a Chinese agency with sales reconciled against costs some time after revenue is received. They are only then included in our accounts. We see TikTok as a means of increasing product and brand awareness providing early sales growth with Tmall (Alibaba) a more appropriate platform for sustainable growth.
In the UK we significantly increased our Amazon customer base by successfully moving to the Fulfilment by Amazon (FBA) model that allowed customers to receive faster deliveries through Prime accounts. SlimBiome® is consistently among Amazon’s top sellers for appetite suppressants, and achieved record sales during Prime month in July 2023 and was awarded Amazon choice in Q1 2024.
We are extending our customer reach through new Amazon channels in Germany, the UAE and the Kingdom of Saudia Arabia, with Amazon India to follow in H2 2024. We have also broadened our offer to consumers with the launch of new products such as soups and indulgence bars, initially through our own website with Amazon to follow. Such additions to our range help to increase our average order value online and to compensate for the usual seasonal peaks and troughs in the weight management cycle.
Competitor analysis of our WellBiome® range indicated a need to increase awareness of the product through social channels. Competitors such as Symprove have annual sales of around £20-£25m and are exploring a £250m sale later this year (see Gut health supplement maker Symprove plots £250m sale | Business News | Sky News). They have a heavy reliance on promotion through influencers and social media. In adopting a similar approach, we believe we can demonstrate competitive advantage on both price and product efficacy, including on-pack health claims, and build similar sales and value.
Competitor analysis of WellBiome® also indicated value in a change in positioning from healthy ageing to boosting gut and digestive health which should allow us to attract more customers through more easily understood messaging and benefits for the consumer. We have targeted competitors with keywords/ads and successfully listed with Amazon UK FBA.
The Consumer Health division has the advantage of receiving online sales income immediately and allows more control of our brands and messaging, while reducing our reliance on distributors to grow our brands.
Results
The Group’s results for 2023 reflect its new structure following the listing of ProBiotix Health (PBX) on the AQSE Growth Market on 31 March 2022. When making comparisons with 2022, it should be noted that the prior year accounts included revenues and costs for the combined Group (OPTI and PBX) up to the end of March 2022.
Revenue for the year of £644,000 showed a pleasing 41% increase over 2022’s £457,000, with the move forward close to 50% once 2022’s first quarter PBX sales are adjusted for. The change of CEO in March 2023 resulted in a significant improvement in revenue impetus following only £16K of sales in the first two months of the year. Orders from our wholesale business customers increased significantly year-on-year, although delays setting up logistics with new partners meant that some deliveries were delayed into 2024 with sales reportable in 2024. Our investment in online direct to consumer business began to pay dividends as sales exceed £100,000 for the first time, a three fold increase on 2022.
Administrative expenses (excluding non-cash items such as share-based payments and amortisation) were reduced by almost 30% to £1,778K (2022: £2,498K), reflecting cost saving measures, the removal of PBX’s costs after March 2022 and recovery of some of the doubtful debt provided in the 2022 accounts. Actions to reduce 2023’s costs included the removal of Cavendish as joint broker, announced in December 2022, the departure of Rene Kamminga as CEO in March 2023, a 20% reduction in all directors’ remuneration from January 2023 and the retirement of two non-executive directors in July 2023. The former CEO’s termination agreement saw us incur a one-off cost of £153K.
With gross margins in percentage terms remaining steady year on year, the combination of improved sales and good control of administrative expenses saw operating losses reduce to £1,664K from £2,489K. Overall the Group recorded a loss before tax for the year of £2.08m, compared with a profit of £2.59m in 2022. The prior year benefitted from a significant gain on its investment in PBX offset by a loss on revaluation of its shareholding in SBTX, whilst the current year’s results suffered from the inclusion of a very disappointing £323K share of the total loss for the year of PBX. On the plus side we netted a £487K accounting gain from the disposal of further shares in SBTX that realised £1.1m in cash in 2023.
The Company retains a relatively healthy balance sheet with gross assets of £9.4m (2022: £11.6m) and cash at the year-end of £0.6m (2022: £1.1m). Since the year end a share placing and further sales of SBTX shares have raised over £1.4m of additional funding to support the Group going forward.
The Board, senior management and advisers
We took decisive action in December 2022 and the first half of 2023 to reduce Board, management and advisory costs in order to move the Group to operational profitability as soon as possible.
As noted in the last annual report Rene Kamminga, who was appointed CEO of OptiBiotix Ltd in March 2021, left the business on 28 February 2023 when Stephen O’Hara resumed the role of CEO of OptiBiotix Health Limited. All directors voluntarily accepted a 20% reduction in their salaries from 1 January 2023 and, with non-executive directors now outnumbering executive directors by two to one, Stephen Hammond and Chris Brinsmead agreed to step down as non-executive directors at our AGM in July 2023, with our thanks for their contribution to the business.
Graham Myers joined the Board on 1 December 2023 as Finance Director, a part-time role in which he will work closely with the OptiBiotix team to focus on driving each business unit to profitability. Graham brings to us extensive experience in optimising financial controls, managing budgets, building profitable businesses and delivering mergers and acquisitions, all gained in a career of almost 30 years with Croda International Plc; he remains Chair of Croda Pension Trustees Limited.
On 28 December 2022 we served three months’ notice to terminate the joint brokership of Cavendish Securities plc, with Peterhouse Capital continuing as the Company’s sole broker. During the year we also secured a 50% reduction in the fees charged by our corporate PR adviser.
Outlook
The Company set out a strategy of developing first generation products using existing technology and highly innovative step change second generation products in parallel and commercialising these in global markets. Whist ambitious, costly and more time consuming, this strategy gave shareholders exposure to multiple opportunities within the emerging global human microbiome space and the potential for multiple upside. This strategy is now coming to fruition.
Whilst this strategy has taken longer to deliver than anticipated the Company is now at a tipping point with first generation products gaining widespread international acceptance with growing sales in multiple territories and the upcoming launch of our second generation products generating industry interest. This creates a range of opportunities to support future sales growth and value creation.
SlimBiome®/OptiBiome®/LeanBiome®
The Company has four human studies on SlimBiome which consistently demonstrate it reduces hunger and cravings leading to changes in the amount of food and type of food people eat and sustainable weight loss. The studies have allowed the Company to gain on pack health claims in major markets (Europe, Australia, USA, and Asia) leading to agreements with major international and national companies like Iovate (Muscletech), TheHutGroup (Myprotein), Apollo, and Morepen. The partnership with Morepen and first order of over £175K plus ingredient sales of £27K in H1 2024 is the first step in an agreement in a major market and based on Morepen’s forecast could contribute in the region of £6-7 million revenue per annum in the next four to five years. We believe these agreements, plus other deals in the pipeline, and our focus on selling finished products via e-commerce in multiple channels have the potential to achieve sales of £30m+ in the future.
WellBiome®
WellBiome® is a patented food supplement, designed to support gut health for wellbeing with health claims for improving gut health, brain and cognitive health, and improve immune function. Research studies have shown that a combination of fibres like WellBiome® can increase gut microbiome diversity more than single fibres. The Company has a number of human studies ongoing with WellBiome® including exploring its impact on post surgical recovery times with Hull University and a study on the impact on stress, anxiety, and sleep with Southampton University. Gut Health is a large and growing area in consumer health with companies like Symprove with single products reporting annual sales of around £20-£25m and a valuation of approximately £250m (see Gut health supplement maker Symprove plots £250m sale | Business News | Sky News). We believe WellBiome® has a number of significant advantages over Symprove including cost, shelf life, user convenience (sachet rather than bottle), and health claims and see this as an area of high future growth with the potential for similar sales and value.
Second generation products (SweetBiotix and MicroBiome Modulators/Synbiotics)
As with any step change innovation this has been a long and difficult path with significant challenges, particularly on scale up, and during the two years of COVID when development stopped. These challenges have now been overcome and we have been pleased that the scale of the opportunity and uniqueness of our patented approach has attracted the interest of major global partners both in the manufacture (e.g DSM-Firmenich) and application of these products (e.g Coca Cola, Nestle, Arla etc). These partners bring scale and global networks albeit time consuming and with stringent confidentiality conditions. We have been pleased with the progress made by DSM-Firmenich and its preliminary forecast for SweetBiotix® of >100,000 metric tonne per annum, demonstrating its intent and potential scale of the opportunity. If this forecast materialises at an expected price of £30 per kg this would represent substantial sales revenue. Experience tells us that partner forecasts tend to be optimistic, increases in volume often take longer, and over time the sales price is likely to be eroded to £18-£20 per kg, however this gives an indication of the potential scale of the opportunity. We are currently working with a manufacturer who supplies products to major corporates and uses 10,000 metric tonnes of sugar per annum. We are progressing incrementally and have included SweetBiotix® in a finished product for a large global partner with a view for an upcoming launch. The Company is also working on including SweetBiotix® in our own products and launching a bulk sugar replacement product with the aim of seeing SweetBiotix® in an increasing number of products in 2024 and beyond.
Whilst SweetBiotix® has captured investors interest, the Company has another group of products which it believes create comparable opportunities for revenue growth and value creation. OptiBiotix has developed a number of unique, patented technologies, which allow it to create dietary ingredients and/or therapeutic products to precision engineer the microbiome. This is achieved by technologies which allow us to examine a microbe’s genome to identify its ability to utilise specific substrates. With this information protein synthesis techniques can be used for large-scale production of unique substrates specific for the optimum growth of that microbe. This allows the creation of substrates which boost the growth of specific genera or species of microbes that have been connected with cancer, improving drug treatments, the development of chronic diseases, or even the ageing process Healthy longevity: The role of the gut microbiome (medicalnewstoday.com). This ability to identify and create products which selectively enhance the growth and activity of specific microbes is a new concept but has the potential to revolutionise microbiome-based products and therapies. Microbiome modulating approaches are a largely unexplored area of opportunity for both the food and pharmaceutical industry but have the potential to transform healthcare. If the microbiome is the future of healthcare, having an approach to precision engineer the microbiome to enhance those microbes that deliver health benefits is the pathway to achieving that aim.
As would be expected the Company has a high level of corporate interest in its second-generation products. The Company is in discussion with a wide range of industry partners over product application and launch timescales, some already announced and some with new potential partners, across a wide range of areas and will make announcements once these have been concluded. Given previous experience with some investors contacting partners pretending to be employed or representing OptiBiotix and damaging relationships, the Company wishes to maintain confidentiality in this area to protect the best interests of shareholders.
The focus for 2023 has been on recovering sales and moving the business to profitability by a reduction in costs, a focus on existing partners returning to forecast, bringing in new partners particularly in the USA and Asia, and expanding ecommerce channels to increase margins and reduce partner dependency. Good progress has been made in each of these areas which has led to a recovery of growth in 2023 which has carried forward into 2024 with sales orders in H1 approaching FY 2023. In the last year and into 2024 we have been particularly pleased with the pipeline of high-quality partners like Iovate, Dr Morepen, TheHutGroup, the high conversion rate of interest to new accounts, and the progress we are making with online sales, particularly in China. These all have the potential to bring in significant future revenues.
The fundamentals of our marketplace remain very exciting, with appetite suppression, gut health, sugar alternatives, and modulation of the human microbiome attracting ever-increasing interest as the potential solution to a wide and growing range of lifestyle-related health challenges. OptiBiotix has patented products with clinical studies in many of these areas. Our unique, innovative products are based on strong science, proven in clinical studies, comprehensively protected by our global portfolio of patents and trademarks, and are achieving growing international recognition through both industry awards and positive customer reviews and growing sales.
We look to the future with a high degree of confidence in our products, a growing online presence in international markets and the excitement of bringing our industry changing second-generation products to market.
We have achieved with minimal shareholder dilution, no debt, a strong balance sheet, and significant exposure to the considerable growth potential of the microbiome through our shareholdings in PBX and SBTX.
We would like to thank shareholders for their patience and support and look forward to growing the business and shareholder value in the years ahead.
Stephen O’Hara
Chief Executive
28 June 2024
Consolidated Statement of Comprehensive Income
For the six months to 30 June 2024
6 months to 30 June 2024 Unaudited | 6 months to 30 June 2023 Unaudited | Year to 31 December 2023 Audited | |||
Continuing operations | £’000 | £’000 | £’000 | ||
Revenue | 276 | 351 | 644 | ||
Cost of sales | (165) | (193) | (324) | ||
Gross Profit | 111 | 158 | 320 | ||
Share based payments | - | - | (6) | ||
Depreciation and amortisation | (106) | (93) | (205) | ||
Other administrative costs | (1,071) | (825) | (1,804) | ||
Administrative expenses | (1,177) | (918) | (2,015) | ||
Operating loss | (1,066) | (760) | (1,695) | ||
Finance income / (costs) | - | - | 1 | ||
Share of (loss)/profit from associate | (118) | (226) | (323) | ||
Loss on fair value of investments | (1,655) | (1,066) | (513) | ||
Profit on disposal of investments | 40 | 198 | 487 | ||
Profit/(Loss) before Income tax | (2,799) | (1,854) | (2,043) | ||
Income tax | 8 | 8 | 4 | ||
(Loss)/Profit for the period | (2,791) | (1,846) | (2,039) | ||
Other Comprehensive Income | - | - | - | ||
Total comprehensive income for the period | (2,791) | (1,846) | (2,039) | ||
Total comprehensive income attributable to the owners of the group | (2,791) | (1,846) | (2,039) | ||
Dividends | - | - | - | ||
(2,791) | (1,846) | (2,039) | |||
Earnings/(loss) per share | |||||
Basic & Diluted - pence | 4 | (2.96) p | (2.08)p | (2.24) p |
Consolidated Statement of Financial Position
As at 30 June 2024
Notes | As at 30 June 2024 Unaudited | As at 30 June 2023 Unaudited | As at 31 December 2023 Audited | |
ASSETS | £’000 | £’000 | £’000 | |
Non-current assets | ||||
Intangibles | 1,225 | 1,463 | 1,331 | |
Investments | 5 | 2,182 | 3,711 | 3,887 |
Investment is associate | 5 | 2,688 | 2,903 | 2,806 |
6,095 | 8,077 | 8,024 | ||
CURRENT ASSETS | ||||
Inventories | 258 | 179 | 188 | |
Trade and other receivables | 393 | 666 | 460 | |
Current tax asset | 21 | 106 | 97 | |
Cash and cash equivalents | 1,263 | 893 | 635 | |
1,935 | 1,844 | 1,380 | ||
TOTAL ASSETS | 8,030 | 9,921 | 9,404 | |
EQUITY | ||||
Shareholders’ Equity | ||||
Called up share capital | 6 | 1,959 | 1,824 | 1,824 |
Share premium | 4,107 | 2,958 | 2,958 | |
Share based payment reserve | 772 | 939 | 772 | |
Merger relief reserve | 1,500 | 1,500 | 1,500 | |
Retained Earnings | (973) | 1,838 | 1,818 | |
Total Equity | 7,365 | 9,059 | 8,872 | |
LIABILITIES | ||||
Current liabilities | ||||
Trade and other payables | 313 | 514 | 180 | |
313 | 514 | 180 | ||
Non - current liabilities | ||||
Deferred tax liability | 352 | 348 | 352 | |
352 | 348 | 352 | ||
TOTAL LIABILITIES | 665 | 862 | 532 | |
TOTAL EQUITY AND LIABILITIES | 8,030 | 9,921 | 9,404 | |
Consolidated Statement of Changes in Equity
For six months to 30 June 2024
Called up Share Capital | Share premium | Share-based Payment reserve | Merger Relief Reserve | Retained Earnings | Total Equity | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Balance at 31 December 2022 | 1,824 | 2,958 | 939 | 1,500 | 3,684 | 10,905 |
Loss for the period | - | - | - | - | (1,846) | (1,846) |
Balance at 30 June 2023 | 1,824 | 2,958 | 939 | 1,500 | 1,838 | 9,059 |
Loss for the period | - | - | - | - | (193) | (193) |
Movement on reserves | - | (173) | - | 173 | - | |
Share options and warrants | - | - | 6 | - | - | 6 |
Balance at 31 December 2023 | 1,824 | 2,958 | 772 | 1,500 | 1,818 | 8,872 |
Loss for the period | - | - | - | - | (2,791) | (2,791) |
Issue of shares during the period | 135 | 1,149 | - | - | - | 1,284 |
Balance at 30 June 2024 | 1,959 | 4,107 | 772 | 1,500 | (973) | 7,365 |
Consolidated Statement of Cash Flows
For the six months to 30 June 2024
| Notes | 6 months to 30 June 2024 Unaudited | 6 months to 30 June 2023 Unaudited | Year to 31 December 2023 Audited |
£’000 | £’000 | £’000 | ||
Reconciliation of loss before income tax to cash outflow from operations | | |||
Operating loss | (1,066) | (760) | (1,695) | |
Decrease/ (Increase) in inventories | (70) | (1) | (10) | |
Decrease/(Increase) in trade and other receivables | 67 | (144) | 61 | |
(Decrease)/increase in trade and other payables | 133 | 236 | (98) | |
Share Option expense | - | - | 6 | |
Amortisation of patents | 106 | 92 | 205 | |
Impairment of patents | - | - | 5 | |
Net cash outflow from operations | (830) | (577) | (1,527) | |
Tax Received/(Paid) | 85 | (9) | - | |
Net cash outflow from operating activities | (745) | (586) | (1,527) | |
Cash flows from investing activities | ||||
Purchase of intangible assets | - | (15) | - | |
Proceeds on disposal of investments | 89 | 442 | 1,110 | |
Net cash (outflow)/inflow from investing activities | 89 | 427 | 1,110 | |
Cash flows from financing activities | ||||
Proceeds from issuance of shares | 1,284 | - | - | |
Net cash inflow from financing activities | 1,284 | - | - | |
Increase/(decrease) in cash and equivalents | 628 | (159) | (417) | |
Cash and cash equivalents at beginning of year | 635 | 1,052 | 1,052 | |
Cash and cash equivalents at end of year | 1,263 | 893 | 635 |
Company Statement of Financial Position
Notes | As at 31 December 2023 | As at 31 December 2022 | ||
ASSETS | £’000 | £’000 | ||
Non-current assets | ||||
Investments | 11 | 5,858 | 7,008 | |
Investment in associate | 11 | 3,212 | 3,212 | |
─────── | ─────── | |||
9,070 | 10,220 | |||
─────── | ─────── | |||
CURRENT ASSETS | ||||
Trade and other receivables | 13 | 32 | 25 | |
Cash and cash equivalents | 14 | 434 | 865 | |
─────── | ─────── | |||
466 | 890 | |||
─────── | ─────── | |||
TOTAL ASSETS | 9,536 | 11,110 | ||
═══════ | ═══════ | |||
EQUITY | ||||
Shareholders’ Equity | ||||
Called up share capital | 15 | 1,824 | 1,824 | |
Share premium | 16 | 2,958 | 2,958 | |
Merger relief reserve | 16 | 1,500 | 1,500 | |
Share based payment reserve | 16 | 772 | 939 | |
Accumulated profit | 16 | 2,400 | 3,806 | |
─────── | ─────── | |||
Total Equity | 9,454 | 11,027 | ||
─────── | ─────── | |||
LIABILITIES | ||||
CURRENT LIABILITIES | ||||
Trade and other payables | 17 | 82 | 83 | |
─────── | ─────── | |||
TOTAL LIABILITIES | 82 | 83 | ||
─────── | ─────── | |||
TOTAL EQUITY AND LIABILITIES | 9,536 | 11,110 | ||
═══════ | ═══════ |
Company Statement of Changes in Equity
Called up Share capital | Share Premium | Merger Relief Reserve | Share-based Payment reserve | Retained Earnings | Total equity | |
£’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
Balance at 31 December 2021 | 1,759 | 2,537 | 1,500 | 928 | 11,056 | 17,780 |
Profit for the year | - | - | - | - | 3,008 | 3,008 |
Dividends | - | - | - | - | (10,258) | (10,258) |
Share options and warrants | - | - | - | 11 | - | 11 |
Fundraising Commission | - | (24) | - | - | - | (24) |
Issue of shares during the year | 65 | 445 | - | - | - | 510 |
────── | ─────── | ────── | ────── | ─────── | ─────── | |
Balance at 31 December 2022 | 1,824 | 2,958 | 1,500 | 939 | 3,806 | 11,027 |
Loss for the year | - | - | - | - | (1,579) | (1,579) |
Movement on reserves | - | - | - | (173) | 173 | - |
Share options and warrants | - | - | - | 6 | - | 6 |
────── | ─────── | ────── | ────── | ─────── | ─────── | |
Balance at 31 December 2023 | 1,824 | 2,958 | 1,500 | 772 | 2,400 | 9,454 |
══════ | ═══════ | ══════ | ══════ | ═══════ | ═══════ |
Company Statement of Cash Flows
| Notes | Year ended 31 December 2023 | Year ended 31 December 2022 | |
£’000 | £’000 | |||
Opening Cash | 865 | 1,705 | ||
Operating activities | ||||
Operating loss | (1,535) | (1,482) | ||
Share based payments | - | 11 | ||
Loan conversion to management charge | 14 | - | ||
Decrease/(increase) on receivables | (7) | 416 | ||
Impairment of investment in subsidiary | - | 50 | ||
(Decrease)/increase on payables | - | 42 | ||
Release of loan to subsidiary | 901 | 756 | ||
────── | ────── | |||
Net Proceeds for operating activities | (627) | (207) | ||
Investing activities | ||||
Net cash advances to subsidiary | (915) | (1,143) | ||
Proceeds on disposal of investments | 1,110 | 25 | ||
────── | ────── | |||
Net | 195 | (1,118) | ||
Financing activities | ||||
Net proceeds on Share issues | - | 485 | ||
Interest income | 1 | - | ||
────── | ────── | |||
Net cash inflow from financing activities | 1 | 485 | ||
────── | ────── | |||
Total movement | (431) | (840) | ||
────── | ────── | |||
Cash and cash equivalents at end of period | 1 | 434 | 865 | |
══════ | ══════ | |||
Page last updated: 27 September 2024
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