Interim results for the six month period ended 30 June 2015

23 July, 2015

Science Group plc (AIM:SAG) (formerly Sagentia Group plc) and its subsidiaries is an international group providing science and technology consultancy services and product development for the consumer, energy, industrial and medical markets.


In-line operating performance with continued strong operating margins.

Basic EPS increase of 8% to 4.0 pence. Diluted EPS of 3.6 pence.

Acquisition of Oakland Innovation Limited completed in February 2015.

Cash balance of £21.5 million at 30 June 2015 (30 June 2014: £22.8 million) and net funds of £13.2 million (30 June 2014: £13.5 million) after net cash outflows of £5.1 million related to the acquisition of Oakland, share buy-backs and dividend payment.

Interim Results 2015

Science Group plc (including its subsidiaries) is an international group providing science and technology consultancy services and product development for the consumer, energy, industrial and medical markets. The Company changed its name from Sagentia Group plc to Science Group plc on 1 July 2015.

Group Financial Performance

For the six months ended 30 June 2015, the Group generated adjusted operating profit of £2.4 million (H1 2014: £2.4 million) on revenue of £14.1 million (H1 2014: £13.3 million), in-line with the Board’s expectations. Excluding the revenue contribution from Oakland Innovation Ltd (‘Oakland’), the underlying business was broadly flat on the prior year. The Group has benefited from the more benign US dollar exchange rate environment, partially offset by the Euro exchange rate weakness, in H1 2015, which has been used to increase investment in the business and increase the Group’s employee profit share accrual. As anticipated, Oakland did not provide any profit contribution in the period due to the costs incurred in integration, including the relocation of the business into Harston Mill, the Group’s primary location. Profit before tax (‘PBT’) was £1.9 million (H1 2014: £1.8 million). (Throughout this report, adjusted operating profit excludes mortisation of acquisition related intangible assets and share based payment charges).

Consultancy fees from Core operations were £12.9 million (H1 2014: £11.9 million) and ‘Other Core’ revenues, which comprise primarily recharged project material revenues and licence income, were £0.7 million (H1 2014: £0.8 million). Other (non-Core) revenues, primarily now property income from sub-let space in the Harston Mill facility, declined as anticipated relative to 2014 which included IT support revenue from M5N during the wind down phase.

Basic earnings per share was 4.0 pence (H1 2014: 3.7 pence), and diluted earnings per share in H1 2015 was 3.6 pence (H1 2014: 3.4 pence). As previously explained, the Group’s tax losses, anticipated to be used to offset future trading profits, are now fully recognised as an asset on the balance sheet. As a result, the earnings per share of the Group reflect standard rates of corporation tax, although the cash effect remains significantly lower due to the tax losses carried forward.

The Group retains a robust balance sheet with Shareholder Funds at 30 June 2015 of £34.6 million (30 June 2014: £32.5 million), including net cash and freehold property of £26.7 million (30 June 2014: £27.1 million). Net funds at 30 June 2015 were £13.2 million (30 June 2014: £13.5 million) after net cash outflows of £5.1 million which included £3.0 million related to the acquisition of Oakland Innovation, share buy-backs of £0.6 million and the increased dividend of £1.5 million.

Geographical and Sector Revenue

In the period to 30 June 2015, the Group’s Product and Technology Development services accounted for £10.3 million revenue (H1 2014: £10.2 million) and the Technology Advisory services (including Oakland Innovation acquired in February 2015) accounted for £3.2 million (H1 2014: £2.5 million).

Approximately 39% of the Group’s Core Business revenue was derived from the Medical Sector in the first half of 2015 (H1 2014: 45%) and 61% from the Commercial Sector (H1 2014: 55%). North America, the Group’s largest international market contributed 63% of Core Business revenue (H1 2014: 62%). The top five clients accounted for approximately 36% and the top ten clients for approximately 52% of the Consultancy fee revenues (H1 2014: 33% and 49% respectively).

While the US dollar exchange rate has been favourable relative to 2014, the strength of Sterling against the Euro has been materially negative, affecting competitiveness of UK services and/or margins on European customer projects. In addition, the dramatic fall in the crude oil price in the second half of 2014 has resulted in a reduction in investment within the energy sector. While such factors produce operational challenges, the Board seeks to mitigate such effects by servicing diverse geographical markets and industry sectors and continues to invest in exploring new market opportunities.


The Group performance in the first half of 2015 has been in line with the Board’s expectations, incorporating positive and negative international external factors. With a robust balance sheet, the Board remains committed to managing the business for the long term benefit of shareholders, customers and employees.

The acquisition of Oakland has significantly strengthened the Group’s advisory offering. The integration has progressed well and the business has been relocated to the Group’s Harston Mill facility. While the Board does not currently anticipate any further acquisitions in the current year, opportunities are continually being explored, consistent with the long term strategy of Science Group plc.


Science Group - 2015 Interim Results



Science Group plc


Martyn Ratcliffe, Chairman

Rebecca Hemsted, Finance Director

Tel: +44 (0)1223 875 200


Numis Securities Limited


Nominated Adviser: Oliver Cardigan / Simon Willis

Corporate Broking: James Serjeant

Tel: +44 (0)20 7260 1000


Media enquiries



Jamie Hooper

Tel: +44 (0)20 7398 7719


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