CONSORT MEDICAL PLC
Consort Medical plc
29 July 2014
Posting of Annual Report and AGM Notice
Consort Medical plc announces that it has published its Annual Report and Accounts 2014 and Notice of 2014 Annual General Meeting and that its Annual General Meeting will be held at 2.00 p.m on Thursday 4 September 2014 at its Registered Office, Breakspear Park, Breakspear Way, Hemel Hempstead, Hertfordshire HP2 4TZ.
Copies of the following documents will shortly be available to view on the Company's website at www.consortmedical.com
· the Annual Report and Accounts 2014; and
· the Notice of 2014 Annual General Meeting.
In accordance with Listing Rule 9.6.1, a copy of each of these documents has been uploaded to the National Storage Mechanism and will be available for viewing shortly at www.hemscott.com/nsm.do
Hard copies have also been sent to those shareholders who have elected to continue to receive paper communications.
The audited Preliminary Results for the year ended 30 April 2014 were announced on 17 June 2014.
The information contained in Appendix 1 (Principal Risks and Uncertainties) and Appendix 2 (Statement of Directors' Responsibilities), which is extracted from the Annual Report and Accounts, is also included in the announcement for the sole purpose of complying with Rule 6.3.5 of the Disclosure and Transparency Rules of the UK Financial Services Authority. Page numbers and cross-references in the extracted information refer to page numbers and cross-references in the Annual Report and Accounts.
Iain Ward
Company Secretary
01442 867920
Appendix 1
Principal risks and uncertainties
Risk | Controls and Mitigating Actions | Trend |
Product quality failure : The Group operates in highly regulated markets with strict quality requirements. Any quality failure involving the Group's products could lead to loss of reputation, reduction in revenues, recall costs or sanction by the regulators. | The Group has rigorous quality assurance processes. Incoming raw materials are analysed, production processes are controlled, with automated checks by vision systems and metrology, and products are sampled for testing prior to release. | → |
Reliance upon key customers/products : Bespak has a degree of reliance on a relatively small number of key customers/products, and the loss of one such customer/product could lead to a significant reduction in revenues. | The Group has significant intellectual property and there are significant barriers to entry. Regulation often restricts customers' ability to transfer business elsewhere, and there is seldom loss of business once approved on a customer programme. We maintain a close dialogue with all of our customers. Our strategy of diversification has opened up a broader range of products and customers, and is progressively diluting this reliance through growth with other customers/products. | ↑ |
Regulatory risk : The operations of the Group are subject to various regulatory requirements which confer a degree of protection as well as an element of compliance risk, in particular to delivering growth. | A strong compliance regime is in place and regular reviews and audits take place, not only by regulatory bodies such as the FDA but also by customers. Bespak is ISO13485 accredited and operates SAP in all its main processes, and has recently expanded its externally recognised regulatory competence in acquiring commercial and clinical trials licenses for drug handling. | → |
Development risk : The Group is developing a range of products at any time, any of which may fail in clinical trials, be stopped by the customer or may not become commercially successful once launched. | The Group follows rigorous processes for the development of new products. Where possible, it is developing the technology as a platform for multiple programmes to reduce the exposure to any individual trial. Development and industrialisation of medical devices is considered a core competence of the Group. | ↑ |
Growth risk : Bespak has been successful in acquiring an extensive product development portfolio, which places significantly increased demands for resources on the business. | The business has well-honed programme planning and management systems and processes. These provide good visibility of resource requirements, whether capital, space, equipment or people, and enable timely fulfilment on multiple parallel programmes. | ↑ |
Cyber Risk: Cyber crime is increasing in sophistication, consequences and incidence, with risks including virus 'infection', unauthorised access (hacking), and phishing email based frauds. | The Group has conducted a Cyber Security risk assessment and identified mitigating actions and training to reduce the risks. Continual vigilance and training are required to mitigate risks, as perpetrators are creative and dynamic on a wide spectrum of strategies. | ↑ |
Our internal controls include risk management processes to identify key risks, and where possible to manage those risks through systems and processes, and by implementing specific risk mitigation strategies. The most significant risks identified through our progressive review of the risk register that could materially alter the Group's ability to achieve its financial and operating objectives are summarised in this section. Other risks are either unknown or deemed less material. | ||
Risk | Controls and Mitigating Actions | Trend |
Credit risk | The Group has implemented policies and processes that require appropriate credit checks to be made on potential customers before sales over certain limits are agreed. Credit limits and outstanding receivables are reviewed monthly and action taken if a new risk is identified. The Group has an excellent record on collection of receivables. The Group monitors the levels of cash held with financial institutions and the credit rating of those institutions in order to manage the credit risk on cash balances. | → |
Interest rate risk | The Group is not currently subject to interest rate risk on its revolving bank facility, as it is currently undrawn. The Group's policy is to convert a large portion of any floating rate debt into fixed rate debt using interest rate swaps, to mitigate the risk of adverse effects from a rise in interest rates. | ↓ |
Currency risk | The Group is a sterling denominated Group which has a minor element of its income and costs in US dollars and Euros. It has a hedging strategy to contract forward for known exposures to reduce the impact of currency fluctuation. Currency exposures are reviewed regularly on a monthly basis. | ↓ |
Liquidity risk | The Group has strong cash flows, and good earnings visibility ensures that its margins are sufficient to exceed normal operating costs. Its business is cash-generative, and there are well embedded cash and working capital management processes. Currently the Group has no borrowings, but has £74.3m of committed facilities in place until 2016. | ↓ |
Pension risk | The Group works closely with the Pension Trustees to ensure that the Defined Benefit Scheme is adequately funded and that the assets are invested appropriately to meet future liabilities as they fall due. The Scheme was closed to new members in 2002, and was in surplus at the last actuarial valuation in 2011, though this may change before the next triennial valuation in 2014. | ↑ |
↑ Risk Increase
→ Risk Unchanged
↓ Risk Decrease
Appendix 2
Statement of Directors' Responsibilities
The directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group and parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess a Company's performance, business model and strategy.
Each of the directors, whose names and functions are listed on pages 36 and 37 confirm that, to the best of their knowledge:
· the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
· the directors' report contained on pages 32 to 34 includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
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