Bioventix plc ("Bioventix" or the "Company") Preliminary results for the year ended 30 June 2014The Company announces its audited results for the year ended 30 June 2014Highlights * Revenue up 31% to £3.5m (2012: £2.7m) * Gross profit up 28% to £3.2m (2012: £2.5m) * Profit before tax, after flotation and staff option costs, up 22% to £2.2m (2012: £1.8m) * Second interim dividend 14.4p per share, giving total of 24p per share * Admitted to AIM in April 2014Business reviewWe are pleased to report the results for the financial year ended 30 June 2014.Revenues for the year of £3.535m (2013:£2.706m) were 31% up on the previousyear. Profits after tax have increased by 19% year on year.The core business has remained strong and has been supplemented by growth inother areas. We have reported consistently on our positive outlook for ourvitamin D activities and a leading antibody called vitD3.5H10. Revenue fromthis product has continued to grow and increasing royalties are now beinggenerated as customer products (assays for vitamin D deficiency) reach marketsaround the world. Bioventix now has thirteen licensees for vitD3.5H10 rangingfrom large to small diagnostics companies. We remain optimistic that revenuesfrom vitD3.5H10 will continue to grow over the next year or so as morevitD3.5H10-based products reach the market.We recently announced the conclusion to a license agreement with DIAsource ofBelgium which was effective in removing an element of uncertainty for ourcustomers and shareholders and allows all parties to continue with developingbusiness in this area.We would like to draw attention to three items in the accounts. There is anexceptional revenue item of £190k which resulted from an internal audit at oneof our licensees that revealed a product code on which back-royalties were owedfor preceding years. The exceptional item of cost featured in the accounts of £169k covers the preparation for, and listing on the AIM market in London. Thesetwo items are approximately balanced resulting in an insignificant effect onprofits. There is also a new entry in the costs of £79k which relates to thetreatment of staff share options and the "cost" that this attracts under theBlack Scholes model, one of the established mechanisms for such valuations.Cash balances at 30 June 2014 of £3.351m (2013: £2.585m) were significantlyhigher than the previous year despite significantly increased dividendpayments.The Company remains focused on the creation, development and manufacture ofhigh affinity sheep monoclonal antibodies (SMAs) for use in diagnostics. Nicheopportunities arise where other antibody technologies available to ourcustomers fail to deliver the required assay (i.e. test) performance andresults in an opportunity for the company to supply SMAs with superiorproperties. We do not foresee a deviation from this focus.The order of importance with respect to revenues for the year of differentantibodies/analytes in the Bioventix portfolio was: NT proBNP (heart failure);vitamin D; testosterone; FT3 (thyroid hormone); estradiol; various drugs (egTHC/cannabis).Future developmentsOn-going pipeline development has resulted in new antibodies being supplied tocustomers in the form of evaluation samples as follows:- androstenedione (an androgenic steroid similar to testosterone)- TSH (thyroid stimulating hormone)- T4 (thyroxine, a thyroid hormone)- estriol (an estrogen)Over the next year, we expect that new antibodies will be added to ourportfolio as follows:- BNP (similar to NT proBNP for heart failure testing)- p24 (part of HIV testing protocols)- PTH (parathyroid hormone testing)Another route to pipeline development comes from sponsored antibody creationprojects whereby customers pay for antibody creation in return for exclusiveuse of the antibodies created. We have had one such project during the lastyear which was for a large multinational healthcare company in the field ofnear-patient therapeutic drug monitoring. This proceeded well technically andwe are optimistic that this technical success will lead to further developmentand revenue.We have also recently started another new sponsored project in the field ofinfectious disease.The natural dynamics of product development and launch at our customers imposesa delay of approximately two to five years between delivering evaluationsamples to customers and possible product launches by such customers.Our core customer base consists of five large multinational diagnosticscompanies though the company is expanding its influence in "second tier"companies, often through our vitamin D antibody.We remain cautiously optimistic about growth prospects in China. There arerapidly emerging Chinese customers and this represents a growth opportunity.Business development in China does present challenges but we expect that thequality of our antibodies will help the company meet its objectives.Over the previous years, the Board has followed a cautious dividend policy thatembraces continuity in the absence of special dividends. It is the intention ofthe Board to continue with this policy into the future, albeit from a higherbase level.The new higher base level was initiated with the increased first interimdividend of 9.6p per ordinary share (2013: 4.84p) announced with the interimresults in spring 2014.We are pleased to declare a second interim dividend of 14.4p per Ordinaryshare. This gives a total for the year of 24p which completes the step up to ahigher base level.The shares will be marked ex-dividend on 16th October 2014 and the dividendwill be paid on 31st October 2014 to shareholders on the register at close ofbusiness on 17th October 2014..There has been significant change in the composition of the Bioventix team overthe last two years. We thank members of the team who have left and welcome newmembers to the team. The changes have been achieved without loss of know-how orcapability and this is a reflection of the quality of the new staff togetherwith the patience and loyalty of leaving and retiring staff.The continued excellent performance of the company in a globally competitivemarket for antibodies is very satisfying. Our sheep monoclonal antibodytechnology continually delivers performance antibodies to our customers.However, the operation of the antibody technology is made possible by theefforts of our expert staff and we would like to thank them for theirremarkable achievements over the last year.For further information please contact:Bioventix plcPeter HarrisonChief Executive Officer Tel: 01252 728 001finnCap LtdGeoff Nash/Simon HicksSteve NorcrossCorporate FinanceCorporate Broking Tel: 020 7220 0500About Bioventix plc:Bioventix (www.bioventix.com) specialises in the development and commercialsupply of high-affinity monoclonal antibodies with a primary focus on theirapplication in clinical diagnostics, such as in automated immunoassays used inblood testing. The antibodies created at Bioventix are generated in sheep andare of particular benefit where the target is present at low concentration andwhere conventional monoclonal or polyclonal antibodies have failed to produce asuitable reagent. Bioventix currently offers a portfolio of antibodies tocustomers for both commercial use and R&D purposes, for the diagnosis ormonitoring of a broad range of conditions, including heart disease, cancer,fertility, thyroid function and drug abuse. Bioventix currently suppliesantibody products and services to the majority of multinational clinicaldiagnostics companies. Bioventix is based in Farnham, UK and its shares aretraded on AIM under the symbol BVXP.PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 30 JUNE 2014 2014 2013 Note £ £Turnover 3,345,629 2,706,436Back dated royalty income 189,729 -TURNOVER 1,2 3,535,358 2,706,436Cost of sales 1,2 (302,865) (188,328)GROSS PROFIT 3,232,493 2,518,108Administrative expenses (860,966) (708,697)Exceptional costs of listing on AIM (169,400)Total administrative expenses (1,030,366) (708,697)OPERATING PROFIT 2,202,127 1,809,411Interest receivable and similar income 28,584 12,043Interest payable and similar charges (104) (97)PROFIT ON ORDINARY ACTIVITIES BEFORE 2,230,607 1,821,357TAXATIONTax on profit on ordinary activities 3 (415,178) (299,903)PROFIT FOR THE FINANCIAL YEAR 1,815,429 1,521,454Earnings per share: 5Basic 36.09p 30.28pDiluted 35.42p 30.28pBasic adjusted 36.53p- Basic diluted 35.86pAll amounts relate to continuing operations.There were no recognised gains and losses for 2014 or 2013 other than thoseincluded in the Profit and loss account.BALANCE SHEETAS AT 30 JUNE 2014 2014 2013 £ £ £ £FIXED ASSETSIntangible assets 10,000Tangible assets 419,743 438,766 419,743 448,766CURRENT ASSETSStocks 164,107 148,530Debtors 1,831,748 1,329,362Cash at bank and in hand 3,351,479 2,585,506 5,347,334 4,063,398CREDITORS: amounts falling due (530,913) (299,737)within one yearNET CURRENT ASSETS 4,816,421 3,763,661TOTAL ASSETS LESS CURRENT LIABILITIES 5,236,164 4,212,427PROVISIONS FOR LIABILITIESDeferred Tax - (7,602)NET ASSETS 5,236,164 4,204,825CAPITAL AND RESERVESCalled up share capital 252,210 251,269Share premium account 57,768 -Capital redemption reserve 1,231 1,231Profit and loss account 4,924,955 3,952,325SHAREHOLDERS' FUNDS 5,236,164 4,204,825CASH FLOW STATEMENTFOR THE YEAR ENDED 30 JUNE 2014 2014 2013 £ £Net cash flow from operating activities 1,765,290 1,341,108Returns on investments and servicing of 28,480 11,946financeTaxation (163,145) (269,040)Capital expenditure and financial (1,909) (21,331)investmentEquity dividends paid (921,452) (656,315)CASH INFLOW BEFORE FINANCING 707,264 406,368Financing 58,709 - -INCREASE IN CASH IN THE YEAR 765,973 406,368RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBTFOR THE YEAR ENDED 30 JUNE 2014 2014 2013 £ £Increase in cash in the year 765,973 406,368MOVEMENT IN NET DEBT IN THE YEAR 765,973 406,368Net funds at 1 July 2013 2,585,506 2,179,138NET FUNDS AT 30 JUNE 2014 3,351,479 2,585,506NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 20141. ACCOUNTING POLICIES Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards.2. TURNOVERAn analysis of turnover by class of business is as follows: 2014 2013 £ £ Royalty and licence fee income 2,759,599 2,051,643 Product revenue and R&D income 775,759 654,793 3,535,358 2,706,436The geographical split of turnover is: 2014 2013 £ £ United Kingdom 114,555 95,895 Other EU 1,566,702 1,309,774 USA 1,577,690 1,020,956 Rest of the World 276,411 279,811 Total 3,535,358 2,706,4363. TAXATION 2014 2013 £ £ Analysis of tax charge in the year Current tax (see note below) UK corporation tax charge on profit 434,176 302,221 for the year Adjustments in respect of prior - (3,204) periods Total current tax 434,176 299,017 Deferred tax (see note 14) Origination and reversal of timing (18,998) 886 differences Tax on profit on ordinary activities 415,178 299,903Factors affecting tax charge for the yearThe tax assessed for the year is lower than(2013 - lower than) the standardrate of corporation tax in the UK of 21%(2013 - 23%). The differences areexplained below: 2014 2013 £ £ Profit on ordinary activities before 2,230,607 1,821,357 tax Profit on ordinary activities 468,427 418,912 multiplied by standard rate of corporation tax in the UK of 21%(2013 - 23%) Effects of: Expenses not deductible for tax 52,163 300 purposes, other than goodwill amortisation and impairment Depreciation for year in excess of 3,534 472 capital allowances Refunded after uplifted research and - (3,204) development claims Tax deduction arising from exercise of (13,080) - employee options Other differences leading to an 28,971 9,552 increase (decrease) in the tax charge Research and development enhanced (105,839) (127,015) expenditure relief Current tax charge for the year (see 434,176 299,017 note above)Factors that may affect future tax chargesThe standard rate of corporation tax will reduce to 20% from 1 April 2015. Thiswill therefore reduce the future tax liabilities accordingly, as well asaffecting the deferred tax balance.The know how was acquired in December 2003, and the company continues to deriveeconomic benefit from it. The Directors considered it to be appropriate toamortise the know how over its estimated economic life of 10 years.4. DIVIDENDS 2014 2013 £ £ Dividends paid on equity capital 921,452 656,315A dividend of 14.49 per share has been declared following the year end. Thisequated to £726,365.5. EARNINGS PER SHAREThe weighted average number of shares in issue for both the basic earnings pershare calculations is 5,032,247 (2013 5,025,385) and for both the dilutedearnings per share, assuming the exercise of all share options is 5,126,718(2013 5,025,385).The calculation of adjusted earnings per share, on profit after tax fromcontinuing activities, is based on the profit for the period of £1,815,429,after adding back AIM listing costs of £169,400 and deducting back datedroyalty income of £189,729, together with the associated taxation adjustment toreflect the underlying profit. Based on the weighted average number of sharesin issue during the year of 5,032,247 (2013 5,025,385) the basic earnings pershare is 36.52p (2013 30.28p). The diluted earnings per share is based on5,126,718 shares (2013 5,025,385) and is 35.85p (2013 30.28p)The calculation of the basic earnings per share is based on the profit for theperiod of £1,746,912 (2013 £1,521,454) divided by the weighted average numberof shares in issue of 5,032,247 (2013 5,025,385), the basic earnings per shareis 36.08p (2013 (30.28p). The diluted earnings per share, assuming the exerciseof all of the share options is based on 5,126,718 (2013 5,025,385) shares andis 35.41p (2013 30.28p).6. SHARE BASED PAYMENTSDuring the year the company operated an Approved Share Option Scheme (the"Option Scheme"), to incentivise employees.The company have applied the requirements of FRS 20 Share-based Payment to allthe options granted. The Option Scheme provides for a grant price equal to themarket value of the Company's shares on the date of the grant, as agreed withHMRC Shares and Assets Valuation Division.The contractual life of an option is 10 years from the date of grant. Optionsgranted become exercisable on the third anniversary of the date of grant.Exercise of an option is normally subject to continued employment, but thereare also considerations for good leavers. All share based remuneration issettled in equity shares.On 7 February 2014, 2 employees exercised their options on 12,411 ordinaryshares of £0.05 each, at a price of £3.12 per share. The difference between thetotal consideration received of £38,722.32 and the nominal value of the sharesof £620.55, has been transferred to the share premium account.On 10 March 2014, 1 employee exercised their options on 6,406 ordinary sharesof £0.05 each, at a price of £3.12 per share. The difference between the totalconsideration received of £19,986.72 and the nominal value of the shares of £320.30, has been transferred to the share premium account.The share option cost in relation to the options exercised during the year, andalso those that are to be exercised by a good leaver, amounted to £38,319 andthis amount has been charged to the profit and loss account for the year ended30 June 2014.At 30 June 2014, 80,048 share options of £3.12 and 14,424 options of £6.40 wereoutstanding. The number of staff holding share options at 30 June 2014 was 10.The share options have been issued to underpin staff service conditions.There were 98,865 options granted on 4 July 2013, when the share price was £3.12. Of these 18,817 have been exercised as noted above, and 6,729 need to beexercised or will lapse in the coming year. The Fair Value of the remaining73,319 options, based on the Black Scholes model was £1.50 based on a risk-freeinterest rate of 2.47% and a volatility of 33.82%. The options are exercisableon or after 4 July 2016. A share option charge of £36,358 has been made in theyear ended 30 June 2014.The 14,424 options were granted on 25 March 2014, when the share price was £6.40. The Fair Value of these options, based on the Black Scholes model was £3.08 based on a risk-free interest rate of 2.47% and a volatility of 33.82%.The options are exercisable on or after 25 March 2017. A share option charge of£3,976 has been made in the year ended 30 June 2014.Expected volatility was based on past volatility since the shares have beenlisted on AIM.7. PUBLICATION OF NON-STATUORY ACCOUNTSThe financial information set out in this preliminary announcement does notconstitute the Group's financial statements for the year ended 30 June 2014 andthe year ended 30 June 2013.The financial statements for the year ended 30 June 2013 have been delivered tothe Registrar of Companies. The financial statements for the year ended 30 June2014 will be delivered to the Registrar of Companies following the Company'sAnnual General Meeting. The auditors' report on both accounts was unqualified,did not include references to any matters to which the auditors drew attentionby way of emphasis without qualifying their report and did not containstatements under sections 498(2) or (3) of the Companies Act 2006.The audited financial statements of Bioventix plc for the period ended 30 June2014 are expected to be posted to shareholders shortly, will be available tothe public at the Company's registered office, 7 Romans Business Park, EastStreet, Farnham, Surrey, GU9 7SX and available to view on the Company's websiteat www.bioventix.com once posted.8. ANNUALGENERALMEETINGThe Annual General Meeting will be held at 4.00pm on Wednesday 3 December 2014at the Company's registered office, 7 Romans Business Park, East Street,Farnham, Surrey, GU9 7SX.