News Archive
Audited Results for the year ended 31 December 2009
Eden Research plc, a leading UK agrochemical development company, announces that its full audited results for the year ended 31 December 2009 are now available on the PLUS markets website. The Company's audited results, as shown below, are the same as the preliminary results announced on 28 May 2010.
CHAIRMAN'S REVIEW
Eden Research was no exception to the rest of the UK economy in experiencing problems arising from the general economic and financial problems that continue to exist. To this was added the consequences of the radical changes in the European Union procedures for the control of pesticide which have introduced new procedures for product registration. In spite of this we have continued to make considerable progress with reaching our strategic goals.
Overview
The year continued with the strategic aim of the board remaining that of moving towards the commercialisation of our product range:
- Continued progress with the registration of our lead product (3AEY);
- Further development work to confirm the enhanced efficacy and superior environmental qualities of our other products;
- Continued development of new formulation technology to utilise the properties of terpenes to improve ease of use to the grower through granule formulation and increased product loading which will allow the same amount of actives to be applied at a lower field use rate;
- Identifying potential to control post harvest soft rot diseases for high value and highly perishable fruit and vegetables;
- Identifying further insect pest applications for our terpene products in a range of uses both in agriculture/horticulture and household and personal care markets;
- Strengthening our relationships with our existing commercial partners to ensure the opportunities for our products in the major agricultural chemical markets are fully exploited; and
- Identifying further relationships with potential commercial partners, especially for new fungicidal uses of our products.
Bringing 3AEY to Market
Our efforts here continued in 2009 to focus on addressing the small number of regulatory questions that had been raised in 2008 as described in the 2008 annual report. The additional studies required were commissioned and executed with the results fully exonerating the claims that we have made for the product and removing the suggestions of any side effects. However, in answering these questions there has been an inevitable delay in the approval of the initial application and additional costs have been incurred.
The outstanding data was submitted to the UK authority (CRD) in September 2009 and in March 2010, CRD submitted the DAR to EFSA with the recommendation that Eden undertake an additional assay in order to prevent any potential problems at EFSA or national approval stage. The submission of the DAR alone facilitates further progress with the commercial development of the product. As stated last year by achieving EFSA approval for the individual active ingredients of 3AEY we will achieve significant future regulatory cost savings time in approving new products based around these ingredients.
In other geographic areas we have made positive progress with 3AEY. Our licensee in East Africa, Lachlan Kenya Ltd, successfully completed a number of pre-registration trials for the control of Powdery Mildew and Botrytis on Roses, a major export crop for Kenya.
Performance under high disease pressure has exceeded expectations with performance and crop safety being at least as good as their Industry standards. The formal registration process began in spring 2010 and our partner is excited at the prospects for rapid commercialisation within the Kenyan Flower industry.
We also concluded a new licensing deal for the North African region (Morocco, Algeria, Tunisia, Libya, Egypt, Oman and Lebanon) with Environmental Solutions (North Africa) Limited ("ESNA"). The focus in these markets is to capitalise on the data investments already made by Eden for the EU to expedite registrations at the earliest opportunity.
Trials undertaken by independent researchers in Egypt on table grapes have again confirmed the excellent performance of our lead product compared to producers' standard disease control programmes.
Meetings by ESNA with the key experts in the regions Regulatory Ministries have been very positive due to the inherent low-risk nature of our products and technology.
Nematodes
In 2009 Eden concentrated on testing its most promising products in development field trials in Europe.
The development work, which will form part of the registration dossier, examined efficacy against a number of nematode species attacking crops including tomato, peppers, cucurbits, beans and carrots.
Results have shown that two formulations based upon two of the active substances contained within our Botrytis product (3AEY) show the best overall levels of efficacy and these will be the focus of our future short term efforts in 2010 field trials.
As the active substance dossiers are already complete, the future investment to develop these formulations is significantly reduced with a shorter overall timeline for introduction.
Conventional nematode products based on highly toxic insecticides continue to be under close scrutiny by all Regulatory Agencies and there is significant interest in bringing low risk terpene products into this well established commercial market.
Discussions with a number of suitable commercial partners are at an advanced stage.
Spider Mites and Whitefly
Following the successful screening trials of several Eden terpene products in 2008 on common horticultural glasshouse pests e.g. spider mite and whitefly, a number of lead candidate Eden terpene products were sent for field testing in key glasshouse crops such as tomato, pepper and beans in Southern Europe. As well as showing excellent pest control in the screening, these products also showed no or very little activity on a number of key beneficial insects used in glasshouse crops as part of IPM (Integrated Pest Management) strategies. Conventional insecticides tend to be very broad-spectrum and will kill the beneficials as well as the target pests.
Results from trials reported in 2009 have not resulted in a clear definition of a leading candidate to proceed to Registration trials due to varying population levels across the trials in different countries. Some additional screening trials will be required before final decisions can be made.
Other activities
In addition to our main emphasis on fungicides, acaricide and nematode control products we have continued to identify the potential of encapsulated terpenes by:
- Developing new granule formulations to further expand product usage once commercialised;
- Identifying further insect pest applications for our terpene products in a range of uses both in agriculture/horticulture and household and personal care markets; and
- Identifying potential use of Eden's terpene products for controlling diseases in fruit and vegetables post harvest. Loss of potentially valuable crops from soft rot diseases after harvest is a major issue to growers worldwide.
At the end of 2009 Eden concluded a deal with Teva Animal Health Inc, St Joseph, Missouri, USA to licence out our proprietary encapsulated terpene technology for use in the veterinary area. Further development will be undertaken by TEVA under the guidance of a Joint Steering group in which Eden will be involved. Licence and milestone fees of $1.05m have been agreed together with future royalties on any products commercialised.
Commercial Prospects
Interest in and support for our technology from distributors, growers and regulators continues to grow as the pressure to find new ways to control damaging pests and diseases increases, whilst at the same time producing sufficient quality affordable food to feed a rapidly expanding world population.
We have concluded our new licensing arrangements with ESNA for North Africa as already outlined which will bring to Eden £150,000 in up-front and milestone payments plus future royalties on sales.
We are also receiving enquiries from potential partners interested in licensing our platform encapsulation technology with their own compounds - a potential revenue stream where Eden's investment risk is much reduced.
The Senior Management
With the submission of the final data on 3AEY to the CRD in the summer of 2009, our Managing Director, Tim Griffiths decided that as this objective of the company had been met that he wished to relinquish the role of Managing Director although he will remain as a consultant on certain key issues to the Company. The Board reviewed the current management structure and announced that with effect the Company would be run by a strong management committee comprising:
| Sir Ben Gill | Chairman |
| Ken Brooks | Executive Deputy Chairman |
| Clive Newitt | Managing Director |
| Alex Abrey | Chief Financial Officer |
As a result of being appointed to the Government as Minister for International Development, Stephen O'Brien was required to resign on 17 May 2010 as a non-executive Director of Eden.
Outlook
Eden's team has, as highlighted, new project areas for initial testing of both existing and new combination terpene products in 2010 leading to continued development and registration of the terpene products in global agriculture and horticulture.
As mentioned at the start of this report, the future of a wide range of traditional chemicals is under threat from the regulators especially in the EU with a large number coming up for review between 2012 and 2020 and many expected to be banned. This opens up a huge potential for a wide range of uses for Eden's low risk products and the continued success of Eden Research plc in developing and registering a wide range of products into the global market.
Sir Ben Gill
Chairman
26 July 2010
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2009
| 2009 | 2008 | ||
| £ | £ | ||
| CONTINUING OPERATIONS | |||
| Revenue | 192,815 | 84,003 | |
| Cost of sales | - | - | |
| GROSS PROFIT | 192,815 | 84,003 | |
| Administrative expenses | |||
| - normal | (835,744) | (1,334,116) | |
| - amortisation of intangible assets | (593,192) | (604,340) | |
| - share based payments | (369,269) | (173,729) | |
| Total administrative expenses | (1,798,205) | (2,112,185) | |
| Other operating income | 25,350 | - | |
| OPERATING LOSS | (1,580,040) | (2,028,182) | |
| Finance costs | (157,452) | (123,438) | |
| Finance income | 17 | 3,148 | |
| LOSS BEFORE TAX | (1,737,475) | (2,148,472) | |
| Tax | 66,094 | 47,235 | |
| LOSS FOR THE YEAR attributable to | |||
| equity shareholders of the parent | (1,671,381) | (2,101,237) | |
| OTHER COMPREHENSIVE income | |||
| for the year net of tax | - | - | |
| Total comprehensive income for the year | (1,671,381) | (2,101,237) | |
| LOSS PER SHARE | |||
| - basic and diluted | (2.93)p | (3.86)p |
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2009
| Share | Share | Merger | Warrant | Retained | |||||||
| capital | premium | reserve | reserve | earnings | Total | ||||||
| £ | £ | £ | £ | £ | £ | ||||||
| Balance at 1 January 2008 | 559,736 | 12,387,217 | 10,209,673 | 2,441,708 | (19,407,478) | 190,856 | |||||
| Total comprehensive income | - | - | - | - | (2,101,237) | (2,101,237) | |||||
| Transactions with owners | |||||||||||
| - issue of shares | 3,397 | 728,902 | - | - | - | 732,299 | |||||
| - Options granted | - | - | - | 431,795 | - | 431,795 | |||||
| - Options exercised/lapsed | - | - | - | (752,866) | 752,866 | - | |||||
| Transactions with owners | 3,397 | 12,116,119 | 10,209,673 | (321,071) | (20,755,849) | 1,164,094 | |||||
| Balance at 1 January 2009 | 563,233 | 13,116,119 | 10,209,673 | 2,120,637 | (20,755,849) | 5,253,713 | |||||
| Total comprehensive income | - | - | - | - | (1,671,381) | (1,671,381) | |||||
| Transactions with owners | |||||||||||
| - Issue of share | 54,191 | 1,029,634 | - | - | - | 1,083,825 | |||||
| - Options granted | - | - | - | 369,269 | - | 369,269 | |||||
| - Options exercised/lapsed | - | - | - | (303,633) | 303,633 | - | |||||
| Transactions with owners | 54,191 | 1,029,634 | - | 65,636 | 303,633 | 1,453,094 | |||||
| Balance at 31 December 2009 | 617,324 | 14,145,753 | 10,209,673 | 2,186,273 | (22,123,597) | 5,035,426 | |||||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2009
| 2009 | 2008 | ||
| £ | £ | ||
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Intangible assets | 7,976,070 | 8,365,870 | |
| Property, plant and equipment | - | 6,926 | |
| 7,976,070 | 8,372,796 | ||
| CURRENT ASSETS | |||
| Trade and other receivables | 36,079 | 177,791 | |
| Cash and cash equivalents | 81,728 | 13,065 | |
| 117,807 | 190,856 | ||
| TOTAL ASSETS | 8,093,877 | 8,563,652 | |
| LIABILITIES | |||
| CURRENT LIABILITIES | |||
| Trade and other payables | 1,009,216 | 1,038,253 | |
| Financial liabilities - borrowings | |||
| - Convertible loan notes | 2,049,235 | 2,271,686 | |
| TOTAL CURRENT LIABILITIES AND | |||
| TOTAL LIABILITIES | 3,058,451 | 3,309,939 | |
| EQUITY | |||
| Called up share capital | 617,324 | 563,133 | |
| Share premium account | 14,145,753 | 13,116,119 | |
| Merger reserve | 10,209,673 | 10,209,673 | |
| Warrant reserve | 2,186,273 | 2,120,637 | |
| Retained earnings | (22,123,597) | (20,755,849) | |
| TOTAL EQUITY attributable to equity | |||
| Shareholders of the parent | 5,035,426 | 5,253,713 | |
| TOTAL EQUITY AND LIABILITIES | 8,093,877 | 8,563,652 | |
Emphasis of matter - going concern
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in Note 1 to the financial statements concerning the Group's ability to continue as a going concern. The Group incurred a loss of £1,671,381 during the year ended 31 December 2009 and, at that date, had net current liabilities of £2,940,644. These conditions along with the other matters explained in Note 1 to the financial statements indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
The directors do not recommend the payment of a final dividend (2008: £nil).
The figures above are extracted from the full financial statements. The complete accounts can be found on the PLUS markets website under the Report and Accounts section of Eden Research Plc.
The directors of Eden Research plc are responsible for the contents of this announcement.
Enquiries:
Eden Research plc
Clive Newitt, Managing Director
01993 862761
St Helens Capital Partners LLP
Mark Anwyl or Duncan Vasey
020 7368 6959