IP GROUP Business Highlights
In its three core business areas of Household Products, Personal Care and Nicotine Gum, the Group is pleased to have delivered during 2014 a number of commercial milestones:
· Household Products - On 25 September 2014, Revolymer announced that it had signed a licence with the international chemicals group Solvay. Under the terms of the deal, Solvay has exclusive rights to apply Revolymer's encapsulation technology to expand the market for its proprietary cleaning and disinfecting active ingredient 6-phthalimido-peroxyhexanoic acid, known as PAP and commercialised currently by Solvay under the trade mark Eureco™. The geographic territory of the licence is global, and Solvay intends to target industry segments including laundry detergents and additives and dish wash agents, in the consumer, domestic, industrial and institutional markets. Solvay will make royalty payments to Revolymer on net sales of PAP products incorporating Revolymer technology;
· Personal Care - Revolymer's amphiphilic moisture management polymer technology has been shown to provide tangible benefits in skincare, haircare, and colour cosmetics. We are currently actively engaging the market and supplying samples for customer evaluation. As a result of these efforts, Revolymer is starting to make progress with supply agreements of products and ingredients based on this technology to personal care companies and recent developments have given the Board confidence about the future potential of this business area;
· Nicotine Gum - There was a significant increase in sales in the period of Revolymer's proprietary nicotine gum in Canada (net sales of £1,007k, up 103% compared to £495k in 2013). In addition, on 9 June 2014, a supply and distribution agreement was announced in respect of Revolymer's nicotine chewing gum products for the United States of America with PL Developments LLC (PLD), a leading US manufacturer and supplier of over-the-counter (OTC) products. Under the terms of the agreement, PLD will be responsible for marketing, sales and distribution of Revolymer's nicotine gum products within this territory, which is the single largest nicotine gum market in the world. The agreement is subject to regulatory approval of Revolymer's products and the preparation of an application for marketing approval is currently under discussion with the United States Food and Drug Administration (FDA).
Business model: The commercialisation model pursued by Revolymer has been refined during the year. Recognising that Revolymer operates in both high volume Fast Moving Consumer Goods (FMCG) markets (e.g. Household Products) as well as relatively lower volume but higher unit value specialty markets (e.g. Personal Care, Nicotine Gum), we are now pursuing supply agreements as well as licences. We currently expect to outsource all manufacture under our supply agreements.
Substantial funding position: The funds available at 31 December 2014 were £13.2 million (2013: £17.7 million), continuing to provide a significant funded "runway" for the business.
Management: Following the departure ofDr Roger Pettman, who resigned from his post as Chief Executive Officer (CEO) effective 31 January 2014 to pursue other commercial interests, the Board ran a search for a new CEO. This process culminated in the appointment of Dr Kevin Matthews on 29 September 2014. Dr Matthews has extensive experience in the development of material and chemical application markets based on innovative technology. The Board also thanks Rob Cridland for performing the role of Acting CEO, as well as Chief Financial Officer (CFO) and Company Secretary, in the intervening period. Mr Cridland has resumed his role of CFO and Company Secretary.
Fertin Pharma A/S and Gumlink A/S litigation: In respect of the alleged patent infringement action brought by Fertin Pharma A/S and Gumlink A/S against the Company relating to the sale of its nicotine gum products in Canada, Revolymer announced on 10 November 2014 that the action, and the counterclaim forming part of Revolymer's defence, had been settled and discontinued.
Financial Highlights
· Revenue for the period up 94% at £1,022k (2013: £528k), the largest constituent being sales of nicotine gum in Canada;
· A gross profit made for the first time of £119k (2013: gross loss £343k);
· Other operating income for the period of £32k (2013: £194k), reflecting the Group's focus on value generation through strategic commercialisation deals rather than short term revenue generation;
· Reported loss for the year reduced to £4.3 million (2013: £5.3 million);
· £13.2 million of current cash investments, cash and cash equivalents on hand at the year end (2013: £17.7 million);
· Net cash outflow from operating activities of £4.7 million (2013: £4.3 million), and net cash consumed by the overall business of £4.5 million (2013: £4.2 million).
For further information please contact:
Revolymer plc
+44 (0) 1244 283 500
Kevin Matthews / Rob Cridland
Panmure Gordon (UK) Limited
+44 (0) 20 7886 2500
Hugh Morgan / Adam James (Corporate Finance)
Charles Leigh-Pemberton (Corporate Broking)
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