PRESS RELEASE Huntingdon Life Sciences Group plc
("Huntingdon") (NYSE/SEAQ:HTD)
Woolley Road, Alconbury, Huntingdon
Cambs PE28 4HS, England
For Further Information:
Richard A. Michaelson
Phone: UK: +44 (0) 1480 892194
US: (201) 525-1819
e-mail: [email protected]
August 14, 2000
HUNTINGDON ANNOUNCES HALF YEAR RESULTS
Huntingdon, England, August 14, 2000 - Huntingdon Life Sciences Group plc
("Huntingdon" or the "Company") (NYSE:HTD) announced today that net revenues for
the quarter ended June 30, 2000 were (pound)15.9 million ($24.3 million) an
increase of 11.7% from revenues for the equivalent period last year of
(pound)14.3 million ($23.0 million). Under UK GAAP the Company reported an
operating loss of (pound)0.2 million ($0.3 million), down from (pound)0.8
million ($1.3 million) last year. Net loss after taxation for the second quarter
was (pound)2.5 million ($3.8 million) compared to (pound)2.3 million ($3.7
million) for the equivalent period last year. These losses included non-cash
exchange losses on the conversion of dollar denominated assets and liabilities
into sterling of (pound)1.1 million compared to exchange losses in the same
period last year of (pound)0.5 million. Net loss per ordinary share was 0.8
pence compared to 0.8 pence last year. Net loss per ADR was 33.3 cents compared
to 31.7 cents last year, these net losses are calculated using the new ADR ratio
which was effective from July 10, 2000.
Net revenues for the half year ended June 30, 2000 were (pound)31.4 million
($49.3 million) an increase of 13.5% from revenues of (pound)27.7 million ($44.8
million) in the same period last year. The Company reported an operating loss
for the half year of (pound)0.5 million ($0.7 million) compared to an operating
loss of (pound)2.1 million ($3.3 million) in the same period last year. Net
losses after taxation and interest for the half year were (pound)3.9 million
($6.1 million) compared to (pound)5.1 million ($8.2 million) in the same period
last year. Net loss per ordinary share was 1.3 pence, compared to 1.7 pence in
the same period last year. Net loss per ADR was 52.8 cents compared with 70.6
cents in the same period last year.
Under US GAAP the Company reported an operating profit for the quarter ended
June 30, 2000 of (pound)0.1 million ($0.1 million) compared to an operating loss
of (pound)0.8 million ($1.3 million) for the equivalent period last year. Net
loss after taxation for the second quarter was (pound)2.2 million ($3.4 million)
compared to (pound)1.7 million ($2.7 million) last year, including non-cash
exchange losses on the conversion of dollar denominated assets and liabilities
into sterling of (pound)1.4 million compared to exchange losses in the same
period last year of (pound)0.5 million. Net loss per ordinary share was 0.8
pence compared to 0.6 pence last year. Net loss per ADR was 30 cents compared to
23.5 cents last year. The principal differences between the UK and US reported
results are non-cash charges associated with pension accounting, deferred
taxation and foreign currency translation.
Andrew Baker, Huntingdon's Executive Chairman said: "The recently announced
refinancing plan for the Company's bank debt provides us confidence that we are
putting in place appropriate long term finance for the business. We believe a
key benefit of this will be to strengthen client support and confidence, which
in turn will enable us to continue the consistent growth in revenues we have
achieved since the end of 1998".
Brian Cass, Huntingdon's Managing Director added: "New orders for the second
quarter were 13% up on the second quarter of last year, which brought the
increase in orders for the year to date to 15% over last year. Orders for the
second quarter were similar to the first quarter, but following today's
announcement of our refinancing plans we expect to resume the quarter on quarter
growth in orders that has been more typical of the last eighteen months. With
the increase in orders, revenues continue to grow; part of this increase was due
to exchange rate movements so incremental margins were lower than in the first
quarter, but still a healthy 34%".
Huntingdon Life Sciences Group plc is one of the world's leading Contract
Research Organisations providing product development services to the
pharmaceutical, agrochemical and biotechnology industries. Huntingdon brings
leading technology and capability to support its clients in non-clinical safety
testing of new compounds in early stage development and assessment. Huntingdon
operates research facilities in the United Kingdom (Huntingdon and Eye, England)
and the United States (The Princeton Research Centre, New Jersey).
This announcement contains statements that may be forward-looking as defined by
the USA's Private Litigation Reform Act of 1995. These statements are based
largely on Huntingdon's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond Huntingdon's control, as more fully
described in Huntingdon's Form 10-K for the year ended December 31, 1999, as
filed with the US Securities and Exchange Commission.
* * * TABLES TO FOLLOW * * *
<PAGE>
<TABLE>
HUNTINGDON LIFE SCIENCES GROUP plc
("HUNTINGDON")
(NYSE/SEAQ - HTD)
SUMMARY OF UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNTS
<CAPTION>
3 Months ended June 30 2000 1999
----------------------
(pound)000's (pound)000's
<S> <C> <C>
Revenues 15,950 14,283
Cost of sales (13,898) (12,858)
------------- -------------
Gross profit 2,052 1,425
Selling and administration (2,294) (2,229)
------------- -------------
Loss on ordinary activities before interest (242) (804)
Interest receivable and similar income 585 227
Interest payable and similar charges (2,811) (1,700)
------------- -------------
Loss on ordinary activities before taxation (2,468) (2,277)
Taxation - -
------------- -------------
Loss after taxation (2,468) (2,277)
------------- -------------
Loss per share (pence) - basic (0.8) (0.8)
- diluted (0.9) (0.8)
------------- -------------
Loss per ADR (cents) - basic (33.3) (31.7)
- diluted (35.7) (32.7)
------------- -------------
</TABLE>
<PAGE>
<TABLE>
SUMMARY OF UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNTS
<CAPTION>
6 Months ended June 30 2000 1999
----------------------
(pound)000's (pound)000's
<S> <C> <C>
Revenues 31,413 27,666
Cost of sales (27,229) (25,026)
-------------- -------------
Gross profit 4,184 2,640
Selling and administration (4,661) (4,694)
-------------- -------------
Loss on ordinary activities before interest (477) (2,054)
Interest receivable and similar income 792 599
Interest payable and similar charges (4,232) (3,615)
-------------- -------------
Loss on ordinary activities before taxation (3,917) (5,070)
Taxation - -
-------------- -------------
Loss after taxation (3,917) (5,070)
-------------- -------------
Loss per share (pence) - basic (1.3) (1.7)
- diluted (1.4) (1.8)
-------------- -------------
Loss per ADR (cents) - basic (52.8) (70.6)
- diluted (56.2) (73.2)
-------------- -------------
</TABLE>
<PAGE>
<TABLE>
Consolidated Statement of Total Recognised Gains and Losses
<CAPTION>
For the 6 months ended June 30
2000 1999
(pound)000's (pound)000's
<S> <C> <C>
Loss for the period (3,917) (5,070)
--------------- -------------
Total losses recognised since last report and accounts (3,917) (5,070)
--------------- -------------
</TABLE>
<PAGE>
<TABLE>
SUMMARY OF UNAUDITED CONSOLIDATED BALANCE SHEETS
<CAPTION>
As at June 30 2000 1999
-------------
(pound)000's (pound)000's
As restated
<S> <C> <C>
Fixed Assets 67,552 74,556
--------------- --------------
Stock 658 1,371
Debtors 19,415 15,384
Cash at bank and in hand 1,223 6,697
--------------- --------------
Current assets 21,296 23,452
Bank loans (22,586) -
Creditors and taxation (17,636) (21,101)
--------------- --------------
Net current (liabilities)/assets (18,926) 2,351
--------------- --------------
Total assets less current liabilities 48,626 76,907
Convertible capital bonds (32,389) (30,726)
Long term loans - (24,500)
Provisions for liabilities and charges (2,550) (2,538)
--------------- --------------
Shareholder funds - all equity 13,687 19,143
--------------- --------------
</TABLE>
<PAGE>
<TABLE>
SUMMARY OF UNAUDITED CONSOLIDATED CASH FLOWS
<CAPTION>
3 Months ended June 30 2000 1999
----------------------
(see also Note 8 in the press release) (pound)000's (pound)000's
As restated
<S> <C> <C>
Net cash (outflow)/inflow from operating activities (1,551) 24
------------- --------------
Returns on investment and servicing of finance
Interest received and similar income 45 140
Interest paid and similar charges (470) (440)
------------- --------------
(425) (300)
------------- --------------
Taxation
UK Corporation tax received - 28
------------- --------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (376) (549)
------------- --------------
Net cash outflow before use of liquid resources
and financing
(2,352) (797)
------------- --------------
Management of liquid resources
Movement in short term investments - 7,000
------------- --------------
Financing:
Repayments of amounts borrowed - (500)
------------- --------------
(Decrease)/increase in cash (2,352) 5,703
------------- --------------
</TABLE>
<PAGE>
<TABLE>
SUMMARY OF UNAUDITED CONSOLIDATED CASH FLOWS
<CAPTION>
6 Months ended June 30 2000 1999
----------------------
(see also Note 8 in the press release) (pound)000's (pound)000's
As restated
<S> <C> <C>
Net cash outflow from operating activities (913) (2,281)
------------- --------------
Returns on investment and servicing of finance
Interest received and similar income 86 248
Interest paid and similar charges (2,112) (2,065)
------------- --------------
(2,026) (1,817)
------------- --------------
Taxation
UK Corporation tax received - 28
-------------
--------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,096) (1,566)
------------- --------------
Net cash outflow before use of liquid resources
and financing
(4,035) (5,636)
------------- --------------
Management of liquid resources
Movement in short term investments 2,200 11,000
------------- --------------
Financing:
Repayments of amounts borrowed - (1,000)
------------- --------------
(Decrease)/increase in cash (1,835) 4,364
------------- --------------
</TABLE>
<PAGE>
Notes:
(1) Bank loans totalling (pound)22,586,000 are repayable on October 31, 2000.
The directors have entered into an agreement, in principle, with FHP Realty
LLC, a private US investment firm affiliated with current directors and
shareholders of the Company to effect a refinancing of the Company's
existing bank debt. The refinancing contemplates sale and leaseback
transactions of the Company's Princeton and Huntingdon sites and a new
$15,000,000, asset-backed lending facility for the Company. Proceeds from
the FHP Realty transaction will be used to repay in full the Company's
current bank indebtedness. The Company's current bank facility, which had
been scheduled to expire on August 31, 2000 has been extended to facilitate
this transaction.
The refinancing plans are subject to shareholder approval and depend on the
successful completion of the FHP Realty and sale and leaseback transactions.
However, the directors are confident that the refinancing will be completed
and hence have formed a judgement that it is appropriate to adopt the going
concern basis in preparing the accounts. The financial statements do not
include any adjustments that would result from an inability to secure
adequate finance.
(2) These results have been prepared in accordance with UK GAAP, but do not
constitute Statutory Accounts as defined by the UK Companies Act 1985 and
have not been audited.
(3) Certain figures in the accounts for the six months ended June 30, 1999 have
been reclassified so that their presentation mirrors that in the accounts
for the six months ended June 30, 2000. These are the provision for pension
costs, exchange differences on the Convertible Capital Bonds, and short-term
investments.
(4) Loss per share is based on an average of 291,010,294 (1999, 291,010,294)
Ordinary Shares outstanding during the six month period ended June 30, 2000
and an average of 291,010,294 (1999, 291,010,294) Ordinary Shares
outstanding during the three month period ended June 30, 2000.
(5) Diluted loss per share is based on an average 273,738,353 (1999,
280,569,558) Ordinary Shares outstanding during the six month period ended
June 30, 2000 and on an average of 271,167,949 (1999, 281,738,254) Ordinary
Shares outstanding during the three month period ended June 30, 2000.
(6) Loss per ADR is calculated using an exchange rate of $1.57 = (pound)1.00
(1999, $1.62 = (pound)1.00). On July 10, 2000 the Company changed its ADR
ratio to one ADR representing twenty five Ordinary Shares and the loss per
ADR for each period has been calculated using this ratio; previously each
ADR represented five Ordinary Shares. The ratio change was implemented to
assure compliance with the New York Stock Exchange's listing requirement
that ADR's trade at a minimum price of $1.00 per share.
(7) For the purposes of consolidation an average exchange rate of $1.57 =
(pound)1.00 has been used in the six month period ended June 30, 2000 (1999,
$1.62 = (pound)1.00) and $1.53 = (pound)1.00 (1999, $1.61 = (pound)1.00) in
the three month period ended June 30, 2000.
(8) Reconciliation of operating loss and net cash (outflow)/inflow from
operating activities
<TABLE>
<CAPTION>
3 months ended June 30 6 months ended June 30
2000 1999 2000 1999
(pound)'000 (pound)'000 (pound)'000 (pound)'000
<S> <C> <C> <C> <C>
Operating loss (242) (804) (477) (2,054)
Depreciation 1,517 1,485 2,976 2,970
Decrease/(increase) in stock 181 (248) 145 (234)
Increase in debtors (2,993) (1,367) (2,899) (2,102)
Increase/(decrease) in creditors 80 1,238 (452) 653
Movement in provisions (94) (280) (206) (1,514)
------------- ----------- ------------- ---------------
(1,551) 24 (913) (2,281)
------------- ----------- ------------- ---------------
</TABLE>
(9) A printed copy of this quarterly report is being posted to shareholders
and is available on request from the Registered Office at Woolley Road,
Alconbury, Huntingdon Cambs PE28 4HS.
Independent review report to Huntingdon Life Sciences Group plc
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Introduction
We have been instructed by the Company to review the financial information set
out on pages 3 and 4 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved, by the Directors. The Listing
Rules of the UK Listing Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Going concern
In arriving at our review conclusion, we have considered the adequacy of the
disclosures made in Note 1 to the financial information on the Company's plans
for refinancing the existing bank debt due on October 31, 2000 and the
uncertainty surrounding this. In view of the significance of this uncertainty,
we consider that it should be drawn to your attention.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data, and based thereon assessing
whether the accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as tests of
control and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended June 30, 2000. Deloitte & Touche, Chartered Accountants, Leda House,
Station Road, Cambridge, August 14, 2000.
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