Optos plc is a leading and rapidly growing medical technology company for the design, development, manufacturing and marketing of devices that image the retina, the light-sensitive area at the back of the eye. Optos' platform technology is the Panoramic200 Scanning Laser Ophthalmoscope device - known as the P200. In a quarter of a second the P200 device produces a high resolution image of up to 200 degrees or approximately 82 percent of the retina in a single capture. The image - branded the optomap® Retinal Exam - provides eye care practitioners with clinically useful information that facilitates the early detection of disorders and diseases evidenced in the retina, such as glaucoma, diabetic retinopathy and age-related macular degeneration. Retinal imaging can also indicate evidence of non-eye or systemic diseases such as diabetes, hypertension and certain cancers. The Company has gained regulatory clearance (CE and FDA 510(k)) to market a second device - P200MA. Optos’ technology provides an unequalled combination of wide-field retinal imaging, speed and convenience for both practitioner and patient and can help save sight and save lives.
Optos estimates that its P200 device is targeting a recurring US$2 billion market opportunity. For the year ended 30 September 2006 Optos had revenues of US$67.7 million and 232 employees with an installed base of 2,593 P200 devices in its existing markets in North America and Europe. Optos plc is headquartered in Dunfermline, Scotland and was admitted to the Main Market of the London Stock Exchange on 15 February 2006 trading under the symbol OPTS.
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates and projections about its industry, its beliefs and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.
Optos plc
Interim Results for the Six Months ended 31 March 2007
Operating and Financial Review
Revenue for the half year was $40.2 million, an increase of 29% over the $31.3 million reported for the same period last year. Gross profit increased by 28% to $26.4 million, up from $20.7 million last year. Operating profit before share-based payments was $4.2 million, up by 63% from $2.6 million last year. Operating profit after share-based payments was $2.9 million, up by 299% from $0.7 million at the same time last year. Profit before tax of $0.5 million compares to a loss before tax of $2.6 million at the same time last year, marking the second consecutive six-month period where the Group delivered a pre-tax profit. Losses after tax were $0.4 million for the period, a reduction of 83% from a loss after tax of $2.6 million last year. EPS for the period was (0.7) cents compared to (5.1) cents at the same time last year, representing an improvement of 87%. Cash from operating activities was $15.2 million, an increase of 35% from $11.3 million last year.
The Group delivered a significant uplift in its customer base during the first half of the year with the installed base of P200 devices growing to 2,907 during the period, representing growth of 27% over the 2,293 devices installed at the same time last year. These devices performed 1.9 million optomap® Retinal Exams during the period, up by 20% from 1.6 million during the same period last year. Contract renewals for the period were 89%, which is consistent with the renewal rate reported at the year end and comfortably ahead of the Company’s longer-term target of 85%.
Revenue is generated on a pay-per-patient examination basis from the sale of the optomap® Retinal Exam by the practitioner to the patient, with an agreed minimum monthly usage level. During the first half of the year, the Company also sold a small number of P200 devices to customers on a capital basis. These sales accounted for approximately 7% of Group revenue for the period. Recurring revenue will be generated from these institutional and individual customer locations through service and upgrade agreements.
NORTH AMERICA
North America continued to deliver strong results, with revenue for the period at $38.1 million, representing growth of 27% over the $29.9 million reported at the same time last year. The installed base of P200 devices in this market grew by 26% to 2,757, of which 2,595 were located in the US. Canada closed the half year with 162 devices, up by 28% over 127 devices at the same time last year.
Installations of the P200 device in the US currently represent approximately 89% of the total existing installed base. The US market offers the largest commercial opportunity for growth. The Group continued to focus on accelerating uptake in this market, within both independently owned and operated practices and through expanded efforts within the corporate retail chain segment.
Recently the Company entered into an agreement with Pearle Vision, a leading US-based optical retail chain, which has approximately 800 corporate and franchise retail locations, to install the P200 device in defined locations. Under the agreement, 167 devices were installed in the Pearle Vision network during the period. Pearle Vision is continuing to promote the clinical benefits delivered by the P200 device and the optomap® Retinal Exam within its corporate and franchise retail locations on a phased basis in each of its designated marketing areas in the United States.
While it is too early to quantify total uptake, the Company believes that the agreement with Pearle Vision offers good upside potential relative to growing the installed base of P200 devices throughout this corporate customer chain.
EUROPE
Europe delivered strong revenue growth for the period, up 53% to $2.2 million over $1.4 million at the same time last year. The installed base of P200 devices climbed to 150 at the end of the period, which represents growth of 53% from the 98 devices installed in Europe a year ago.
Focus in the UK is restricted to top-tier optician practices where, in addition to visual acuity and refraction, primary patient care at the clinical level is also offered by the practice. The Group improved its share of the UK addressable market and closed the half year with an installed base of 85 P200 devices, up by 18% from the 72 devices installed at the same time last year.
The market in Germany is comprised entirely of ophthalmologists who carry out both primary and secondary care, largely in private practice. Germany has the right fundamentals and potential to add significantly to the Group’s overall plan for growth. Operations in Germany have been strengthened through the recruitment of an experienced sales and service team. Initial results have been encouraging with an installed base of 65 P200 devices at the half year, representing an increase of 150% over the 26 devices at the same time last year.
PRODUCTS
Preventative Care
The Company’s core product is the optomap® Retinal Exam. It is offered within the preventative and primary care market as a clinically effective eye and health wellness and screening tool. It is generated by the P200 device, is non-reimbursable and requires patient payment at the point-of-service.
Secondary and Medical Care
The P200 device also produces the optomap® plus Medical Retinal Exam, which is a secondary care market product and is a reimbursable exam. This exam enables practitioners to clearly monitor known conditions, where the interpretation, reporting and documentation of the pathology is more rigorous and thus distinguishes it from the screening exam. The optomap® plus Medical Retinal Exam is now available at approximately 80% of the Company’s customer practices in the USA. Full integration is expected in the USA within the current financial year.
During the first half of the year a prototype of the Company’s new P200MA device was previewed at the Club Jules Gonin and Retina Society meeting in South Africa and at the American Academy of Ophthalmology. This device produces the optomap® fa (fluoroscein angiography) Medical Procedure, which is an advanced secondary care, medical product. It is a reimbursable procedure. This procedure will provide retinal doctors with advanced diagnostic, monitoring and treatment capabilities for particular eye disorders and diseases, such as diabetic retinopathy and age-related macular degeneration. Commercial launches in the US and Germany are expected early in 2008.
The optomap® plus Medical Retinal Exam and optomap® fa Medical Procedure will extend the Company’s reach into the reimbursed secondary and medical care markets and capitalise on the many new opportunities in disease management.
Proprietary Software
Recently, the Group introduced the latest version of its proprietary software - V2® Vantage - to the existing customer base. It contains some important new features that will assist practitioners in capturing and reviewing the optomap® Retinal Exam images. New features include ResMax™ and 3D Wrap™.
ResMax™ is a capability that utilises high resolution images captured over a smaller field of view, which is expected to prove particularly useful for diseases affecting the central pole such as glaucoma and age-related macular degeneration. 3D Wrap™ allows the practitioner to create a three dimensional representation of the human eye on to which the patients’ optomap® Retinal Exam is projected. This graphical capability allows for a complete visualisation of the shape and location of the disease.
V2® Vantage is a key strategic element within the customer partnership agreements, and promises to keep these practitioners at the leading edge of retinal imaging technology. The new features also strengthen the practitioner-patient relationship and support the patient education process, further enhancing the overall experience the patient has during a comprehensive eye examination.
OUTLOOK
Preventative care will continue to offer the largest commercial opportunity and within this market the Company believes more and more practitioners will rely on the P200 device and the optomap® Retinal Exam to help them deliver on this front. The Company expects strong sales growth to continue in the second half of the year and is confident relative to the overall financial performance for the full year ended 30 September 2007.
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Thomas W. Butts
Chief Executive Officer |
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- Ends -
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Consolidated Income Statement |
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For the period ended 31 March 2007 |
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Six months ended 31 March 2007 (Unaudited) |
Six months ended 31 March 2006 (Unaudited) |
Year ended
30 September 2006
(Audited) |
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Notes |
$'000 |
$'000 |
$'000 |
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Revenue |
2 |
40,227 |
31,297 |
67,720 |
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Cost of sales |
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(13,780) |
(10,577) |
(23,304) |
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Gross profit |
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26,447 |
20,720 |
44,416 |
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Selling and distribution costs |
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(8,644) |
(6,509) |
(13,714) |
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Administrative expenses |
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(13,561) |
(11,608) |
(24,216) |
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Operating profit before share based payments |
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4,242 |
2,603 |
6,486 |
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Share based payments |
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(1,355) |
(1,879) |
(2,163) |
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Operating profit after share based payments |
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2,887 |
724 |
4,323 |
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Finance revenue |
|
759 |
179 |
1,118 |
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Finance costs |
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(3,104) |
(3,504) |
(6,541) |
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Profit/(loss) before tax |
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542 |
(2,601) |
(1,100) |
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Income tax (charge)/credit |
3 |
(984) |
- |
11,907 |
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Net (loss)/profit for the period attributable to equity holders of the parent |
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(442) |
(2,601) |
10,807 |
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