Annual
Report
2023
Contents
Annual Report 2023 | EKF Diagnostics Holdings plc
1.0
2.0
3.0
Strategic Review and
Corporate Governance
Financial and Operational Highlights
At a Glance
Executive Chairman’s Statement
Chief Financial Officer’s Review
Board of Directors
Strategic Report
Report of the Directors
Corporate Governance Statement
Report of the Remuneration Committee
3-27
3
4
7
11
14
16
21
24
27
Financial Statements
28-79
Independent Auditors’ Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated and Company’s Statement of Financial Position
Consolidated and Company’s Statement of Cash Flows
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Notes to the Financial Statements
28
35
36
37
38
39
40
41
Additional Information
80-84
Notice of Annual General Meeting
Notes
Company Information
80
82
84
Annual Report 2023 | EKF Diagnostics Holdings plc
1.0
Financial and Operational Highlights
2023 - Key points
Financial Highlights
• Revenues of £52.6m in-line with market expectations (2022: £66.6m)
– Revenues (excluding COVID-related & clinical chemistry sales) of £48.7m (2022: £48.6m)
• Gross profit before exceptionals of £24.4m (2022: £30.8m)
• Gross margin improved to 45% (2022: 36%) and admin expenses reduced by £3.5m
• Adjusted EBITDA* of £10.4m (2022: £14.9m)
• A return to profit before tax of £2.1m (2022: loss of £8.9m)
• Cash generated from operations of £8.8m (2022: £12.7m)
• Group cash, net of borrowings (excluding IFRS 16 liabilities), at year end of £4.7m (2022: £11.4m),
primarily reflecting cash generated from operations less £6.8m capital expenditure (2022: £4.4m)
and £5.4m dividend payment (2022: £5.5m)
• Cash dividend paid to shareholders, equivalent to 1.2p per ordinary share (2022: 1.2p per share)
* Earnings before interest, tax, depreciation and amortisation, adjusted for exceptional items and share-based payments
(‘AEBITDA’)
Operational Highlights
• Business division revenues:
– Point-of-Care: up 1.9% to £34.1m (2022: £33.4m); up 3.5% to £32.4m excluding clinical chemistry
revenues (2022: £31.3m)
– Life Sciences: overall revenues down 2.4% to £14.8m (2022: £15.2m), despite 1.6% rise in β-HB
sales
– Other: £2.3m (2022: £8.5m, which includes £3.5m relating to cash received for US inventory)
• Opening of upgraded Life Sciences facility in South Bend in October 2023
– fermentation run for a new customer completed
– ongoing transfer of some higher volume biomanufacturing products from Elkhart to South
Bend
• Removal of non-core, low margin products from portfolio
• Board changes: Julian Baines, Executive Chair, remaining in role on a longer-term basis and Steve
Young appointed as CFO in September 2023
03
1.0
Annual Report 2023 | EKF Diagnostics Holdings plc
At a Glance
EKF Diagnostics Holdings plc (“EKF”) is a leading global diagnostics and biotechnology company
specialising in the development, production, and distribution of leading medical technologies and
patient-centric solutions.
We are serious players in healthcare and deliver value-based products that have a life-changing
impact on patients and people.
Our diagnostic technologies and biotechnology solutions empower healthcare professionals and
non-medical practitioners to make informed decisions through point-of-care testing and life sciences
applications.
The Group report their segmental results on a geographical basis. Within those segments, the Group’s
go to market activity for 2023 is defined as Point-of-Care and Life Sciences, as outlined below:
Point-of-Care
EKF develops and manufactures medical devices and tests (in-vitro diagnostics (IVD)) that can be
used at or near the patient’s location. Designed to provide quick and accurate results, these tests
(and optional data connectivity software) enable healthcare professionals to make rapid decisions.
Our point-of-care range includes hematology analysers that streamline blood donation and anaemia
screening, ensuring rapid and reliable results for informed medical choices. Globally utilised in various
healthcare settings, they enhance access and outcomes. Our HbA1c analysers prioritise prediabetes
and diabetes care with rapid, trustworthy diagnostics, aiming to lower long-term healthcare costs
and elevate patient well-being.
1. Diabetes care: EKF offers a range of products related to diabetes care, including glucose monitoring
systems and associated supplies and consumables.
2. Hematology solutions: EKF provides products, supplies, and consumables for measuring
hemoglobin levels, including those used for the detection of hemoglobin variants.
Empowering precision and care, our commitment to high-quality point-of-care technologies and
solutions drives the early detection, accurate diagnosis, therapeutic development, and effective
monitoring of conditions and diseases.
For further information and product details visit www.ekfdiagnostics.com/point-of-care
04
At a Glance (continuation)
Life Sciences
EKF develops and supplies diagnostic and therapeutic enzymes, proteins, reagents, and other bio-
materials used in the research, biotechnology, and pharmaceutical industries. Dedicated to supporting
clinicians, scientists and researchers these high-quality materials can be used in multiple applications.
Our life sciences portfolio encompasses state-of-the-art precision fermentation facilities and
downstream processing capabilities. Enabling the production of top-tier diagnostic enzymes and
customised products tailored for medical diagnostics, pharmaceuticals, and industrial applications.
Our facilities play a pivotal role in advancing quality-assured manufacturing processes, custom-
engineered to meet the precise specifications of our valued customers.
1. Enzyme Fermentation: EKF offers precision fermentation, custom bioprocessing and contract
manufacturing services related to the production of pharmaceuticals and other biologics.
2. Beta-hydroxybutyrate (β-HB): EKF provides β-HB products which are used to detect ketones,
to help identify patients suffering from diabetic ketoacidosis, and other clinical applications.
Our life sciences expertise and technologies cultivate specialist fermentation research, development,
and commercial projects, facilitating transformative breakthroughs in healthcare and beyond.
For further information and product details visit www.ekfdiagnostics.com/life-sciences
As a global leader in the development and distribution of diagnostic technologies and biotechnology
solutions, EKF has a presence in over 120 countries with the solutions needed to support better
health and wellness worldwide.
For global healthcare professionals and non-medical practitioners seeking dependable diagnostic
technologies and biotechnology solutions, EKF offers an extensive, leading portfolio of devices,
products, and solutions founded on decades of industry experience and a proven track record of
excellence — making us the trusted choice.
EKF is dedicated to advancing healthcare globally, with our expertise and experience meeting the
needs of healthcare professionals and non-medical providers worldwide. We are committed to
seeking new avenues for enhancing outcomes, while also expanding our global footprint through
strategic partnerships, commercialisation endeavours, and distribution agreements.
Confident in our ability to generate value for our shareholders and customers, EKF anticipates
continued success in the years ahead, reaffirming our commitment to advancing the fields of
diagnostic technologies and biotechnology solutions and continuing to make a meaningful impact
on the health and wellness of patients and people globally.
For further information visit www.ekfdiagnostics.com
05
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 2023 Summary
06
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Strategic Report – Executive Chair’s Statement
We are pleased to announce EKF’s full-
year results for 2023 which saw the Group
deliver revenues of £52.6m. Adjusted
EBITDA for the year was £10.4m, slightly
ahead of market expectations. The results
show continued, sustainable growth in our
established Point-of-care business and the
simplified structure of EKF now reflects our
continuing business lines.
We have worked hard on reducing and
stabilising our cost base, which has
resulted in a significant improvement in our
margins for the second half of the year as
we consolidated the business back to our
core strengths. This activity included the
closure of our UK Contract Manufacturing
operations in February 2023, the sale of
our laboratory testing business, Advanced
Diagnostic Laboratory LLC, in March 2023,
and the simplification and rationalisation
of other areas of the business. Challenges
continue with
increasing raw material
and other costs but, by consolidating our
product offering, we are able to focus on
continuing to drive margin improvement
and increased cash generation throughout
2024.
Despite the challenges during 2023, the
senior management team has successfully
refocused the business back to pre-
pandemic levels. We have also used this
opportunity to simplify the business by
removing non-core, low-margin products
from our portfolio which will result in
increased profitability. This work
is
progressing well.
We were pleased to announce that our
new 24,000 square foot state-of-the-art
fermentation facility at South Bend opened
in October 2023. We have improved our
ability to provide downstream processing
to meet customer needs and successfully
undertook our first fermentation for a new
customer before the end of the year.
The focus for 2024 is to continue to
implement strategies to grow Point-of-Care
and Life Sciences and to concentrate on our
core products and services within each
of the divisions to drive further margin
improvement and enhance cash generation.
These two divisions can be summarised as:
• Point-of-Care – supplying analysers and
consumable products in the key areas of
Hematology and Diabetes
• Life Sciences
fermentation
– offering
for
services
contract
clinically
important enzymes and proteins, and the
manufacture of Beta-Hydroxybutyrate (β-
HB), used as a quantitative ketone test to
identify patients suffering from diabetic
ketoacidosis, as well as in many other
clinical applications.
Revised product porfolio mix to focus on
margin improvement
It has been our aim throughout 2023 to
simplify the business to improve reporting
and focus our efforts on the areas where
we are most successful, where we have the
best developed distribution channels, and
the strongest opportunities for delivering
growth. By focusing our portfolio within
Point-of-Care and Life Sciences, we will
further increase margins and cash generation.
It will also allow our Sales, Marketing and
Product Management departments to focus
on growing and developing our higher
margin product ranges.
As part of the refocusing of the business,
we have decided to discontinue our clinical
chemistry range, which has been impacted
by increased competition from India and
China leading to the product range being
sold at a very low or even negative margin.
Whilst this will see a reduction in revenue
of £1.7m, exiting from this range will have a
positive impact on EBITDA margins.
During 2023 we also chose to discontinue
our STAT-Site M β-HB serum and plasma
product line. We had already discontinued
the STAT-Site M β-HB device
in 2021,
but whilst we had continued to support
customers with consumables, this proved to
be unsustainable due to declining sales and
increased technical challenges, resulting in
a fuller cessation. Whilst this will have some
impact on future revenues (approximately
£0.4m per annum), we expect to replace
most of this with our best-in-class β-HB
LiquiColor chemistry reagent and our whole
blood β-HB hand-held meter, with both of
these continuing products showing growth
in 2023 as stated below.
This portfolio rationalisation will allow us to
focus on our more profitable core products
and services, particularly those that have
delivered stronger growth in 2023 and are
expected to continue to do so. As a result,
our team is focussed on only the major
business lines within our two divisions, as
shown below, together with revenue growth
statistics:
07
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Strategic Report – Executive Chair’s Statement (continuation)
• Diaspect Tm (up 34% year-on-year)
• HemoControl (down 5% but expected to return to growth
in 2024)
• Quo-Test and Quo-Lab (up 19% and 6% respectively in
2023)
• Biosen (slightly up excluding the impact of foreign
exchange movements)
• β-HB LiquiColor (4% growth in 2023, but expected to
return to stronger growth in 2024)
• β-HB hand-held meter (52% growth from a low starting
point)
• Enzyme Fermentation (considerable scale up to optimal
capacity by early 2026)
Review of 2023 core businesses and products performance
The future prospects for the business are looking increasingly
promising with our expectation that, with focus on the core
lines above, we will continue to grow Point-of-Care, and Life
Sciences will benefit from accelerated growth in β-HB sales,
as well as new fermentation customers coming on-line in
South Bend.
The reported results for 2023 shown below do not fully
reflect the benefits of the product portfolio rationalisation
implemented over the course of the year, and also still
show 2022 comparative data that includes legacy contract
manufacturing revenues from COVID-related activities.
Whilst gross margins have already improved considerably
to 45% in 2023 from 36% last year, further beneficial effects
of this focus were evident in Q4 margins and the business
moves into the new financial year making further progress
in improving gross margins.
Divisional revenues for the
12 months ended 31 December
£ millions
Point-of-Care (POC)
2023 2022
%
change
34.1
33.4
+2.1%
POC: excl. clinical chemistry revenues
32.4
31.3
+3.5%
Life Sciences
16.3
24.7
-34.0%
Life Sciences: β-HB and Fermentation sales
14.8
15.2
-2.6%
Life Sciences: incl. COVID-related revenues
1.5
9.5
-84.2%
Other*
Total Revenues
Total Revenues (excl. COVID-related
& clinical chemistry revenues)
2.2
8.5†
-74.1%
52.6
66.6
-21.0%
48.7
48.6
0.0%
(1) Point-of-Care
EKF continues to hold a strong position in Point-of-Care and
the growth in key products in this division was very positive,
with significant double-digit growth in some of our main
product lines (Diaspect Tm and Quo-Test). We maintain a
very strong position within the global market for hematology
and diabetes testing, a market which has considerable
barriers to entry due to increasing regulatory hurdles
required to launch any new instrumentation, as well as
our long-established and comprehensive base of installed
users and high-quality global distribution channel. In 2023,
we sold over 12,000 Point-of-Care analysers, resulting in
sales of over 95 million individual test consumables. In 2023
we carefully targeted the management of our distribution
channels to increase consumable pull through against 2022,
delivering a 10% increase in consumable sales over the year.
Our haemoglobin and diabetes products continue to deliver
sustainable growth and are performing beyond management
expectations, and we expect to continue to grow in Point-
of-Care.
We have focused on expanding our reach within this area,
updating our portfolio to include connectivity using our
leading EKF LinkTM data management platform, as well as
automating manufacture for single-packed cuvettes which
more closely aligns with customer needs in emerging
markets where they do not undertake 50 tests at a time.
• Hematology
Total sales of our hematology analysers and consumables
were up 2% year-on-year. Our second largest hematology
product by sales is Diaspect Tm, and this continues to
perform well with 34% year-on-year growth, driven by
significant sales increases in Africa, driven by our ongoing
support of Egypt’s Vision 2030 programme which has seen
large volumes of testing undertaken in children.
to Hematology
largest contributor
Our
revenues,
Hemocontrol, saw a decline in sales of 5% in 2023, mainly
due to three factors:- the late opening of Women, Infants
and Children (WIC) clinics in the United States following the
end of the COVID pandemic; delayed ordering of products
from key partners in Peru, one of our biggest HemoControl
markets; and in some cases EKF choosing to offer Diaspect
Tm as a more appropriate solution in territories where the
market requirements have moved. Encouragingly, WIC
programmes are now online, our local distribution partner
Diagnostica Peruana is expecting a positive upturn in Peru,
and we have won tenders in Hong Kong, Egypt and Thailand,
enabled by the EKF LinkTM data connectivity platform. This
bodes well for future growth from this product.
* Other revenue relating to, shipping and handling recharges, repairs
and other sundries, plus testing of £1.0m in 2023 (2022:£2.6m)
• Diabetes
† Includes £3.5m relating to US inventory receipt.
Our diabetes product portfolio delivered 3% year-on-year
growth. Quo-Test & Quo-Lab, both of which test for glycated
strong
haemoglobin
levels, have
(HbA1c)
shown
08
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Strategic Report – Executive Chair’s Statement (continuation)
(revenues up
19% and 6% year-on-year
growth
respectively),demonstrating that confidence and stability has
returned to Point-of-Care testing. Particularly good growth
for Quo-Test has been demonstrated in the UK, Sweden,
South Africa, and the Philippines, where engagement with
new and existing distribution partners has been focused.
Biosen sales, our largest contributor within diabetes, rose
slightly on a constant currency basis (i.e. excluding the
impact of adverse foreign exchange movements).
(2) Life Sciences
• BhB
Total β-HB sales grew by 2% in 2023, with sales of our β-HB
LiquiColor® reagent up by 4% year-on-year. This growth rate
reflects two main factors. First, we signed a new White Label
(“WL”) contract for β-HB LiquiColor® with Thermo Fisher. This
will protect and grow our US market, however, Thermo Fisher
ran down its pre-existing EKF-branded stock before ordering
the new WL products from February 2024 onwards. Whilst
this slowed sales growth in FY23, the resumption of regular
stock ordering and replenishment of the new WL products
will benefit FY24 revenues. We now have WL agreements
with Cardinal and Thermo Fisher and this is expected to lead
to continued growth of β-HB LiquiColor® sales in the United
States.
Second, as stated above, we have discontinued our STAT-Site
M β-HB, a portable device for the quantitative determination
of β-HB in serum or plasma. This had an impact on revenue
growth in Q4 but allowed us to focus on growing our userbase
for the whole-blood handheld meter by over 50% in the same
period, as we switched customers to this reliable and easy-to-
use hand-held product.
• Fermentation
The South Bend site opened in October 2023 and we have
already completed three fermentation runs, two of which
will generate revenue in 2024, this will lead to further growth
in 2024 as the two new customers scale up. In addition,
improvements can be made by the transfer of some
biomanufacturing of certain higher volume products from
Elkhart to South Bend. Fermentation revenue was down
slightly compared to 2022 due to the timing of shipments to
customers at the year end.
Our full range of fermenters of different capacity is now
online and we will look to scale up output for our customers
throughout 2024 and
to add additional customers
throughout the current year. We are aiming to have the site
running at closer to optimal capacity by the beginning of
2026. Our forecasts and guidance to analysts reflect this
gradual build-up in revenues and profitability.
The additional capacity now installed and operational will
also enable the production of 12 months’ inventory for our
own key products in just one 3,000L fermentation. We have
never been able to achieve this scale historically. Increasing
batch sizes, and thereby reducing the number of batches
that are needed to produce the same volume, will have a
positive impact on margin. With this in mind, we are currently
reviewing the improvement in operational efficiency across
both sites.
Cash and Dividend Policy
Cash net of bank borrowings at the end of the year was
£4.7m, slightly ahead of expectations as we saw an increase
in margin in the second half of the year. The Company has
continued to generate strong cash from its operations in
FY24 and, as further margin improvements come through,
we expect this cash conversion to increase. Rebuilding the
Company’s cash levels is a key consideration for the Board,
to allow for further potential growth investment in the
business. This will be aided by a circa $2.7m tax rebate in the
US that will be received before the end of 2024.
Therefore, whilst the full impact of these improvements
continues to be realised, the Board believes that it would be
prudent to pause regular dividend payments, allowing
cash levels to build back up and to focus on enhancing
shareholder value through growth. As margins and cash
generation improve further, the Board will consider the
best deployment of cash to deliver shareholder returns. The
Board will continue to review the option of recommencing
dividend payments, but only if appropriate, and subject to
the availability of surplus cash generation above the needs
of the business and the potential to enhance returns through
investment in growth.
Russia
We continue to supply tests to Russia through our 60%
owned subsidiary, but increased sanctions have restricted
the range of medical instruments we are able to supply
into the region to that which is deemed essential. This has
inevitably led to a reduction in revenues generated from
Russia, although we have been able to restart the receipt of
dividend payments from the Russian operation on a limited
basis and this is continuing. As a result, £0.3m cash has been
received by the Company in FY23, with cash balances of
£1.7m as at 31 December 2023 (£2.4m as at 31 December
2022). A further £0.1m has been received so far in 2024.
Sanctions are expected to continue to apply against Russia
and we have reduced our revenue expectations from Russia
accordingly for 2024 and beyond.
Management Structure
As part of our continuous improvement, the Company has
put in place a Senior Management team with a proven track
record for delivery, including a Chief Product Officer, Global
Head of Sales, Chief Operating Officer and a President, US.
Each member of this team has significant experience and
longevity within EKF and in their respective roles will play an
instrumental part in the future success of the business.
The revised management structure reflects our refocused
operations and the opportunities to drive growth from them.
09
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Strategic Report – Executive Chair’s Statement (continuation)
Board Changes
During 2023 we announced a number of Board Changes.
In March, Mike Salter (who previously resigned from the
board in February 2023) left the business to pursue new
opportunities. In June, Marc Davies confirmed his intention
to stand down from his role as CFO and was replaced by
Stephen Young in September after an orderly handover
period.
As previously stated, I remain fully committed to delivering
the opportunities that EKF has in front of it, and for the
foreseeable future we will not be looking for a new Group
CEO as I will continue to serve as Executive Chairman. The
opportunities for growth in our established businesses are
very exciting and I want to ensure that these are delivered
by the team.
The Board now compromises five members – two Executive
Directors and three Non-executive Directors, two of whom
are independent:-
Julian Baines
Stephen Young Chief Financial Officer
Christian Rigg
Executive Chair
Senior Independent Non-executive
Director
Independent Non-executive Director
Jenny Winter
Christopher Mills Non-executive Director
Outlook
2024 will see the completion of the rationalisation process
that has simplified the business, allowing us to focus on our
higher margin products and services, as well as delivering
further
to EBITDA margin and cash
generation.
improvements
EKF is a well-established business, with a core product
portfolio that is steadily growing, generating cash from its
operations. With a structured management team in place, a
newly streamlined business, and the opening of our state-
of-the-art fermentation facility in South Bend, we have a
Company that is well placed to deliver growth and improved
returns from many of the investments made over the last
two years.
Julian Baines
Executive Chairman
20 March 2024
10
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Chief Financial Officer’s Review
Revenue
Revenue for 2023 was £52.6m (FY 2022: £66.6m), a
decrease of 21% on the prior year, reflecting the disposal of
the ADL laboratory testing business with sales of £0.5m in
2023 (FY 2022: £2.6m), significantly lower COVID related
revenues, and a one-off inventory recovery item of £3.5m in
2022. At constant 2022 exchange rates, revenue for the year
would have been £53.2m.
Revenue by geographical segment based on the legal entity
locations from which sales are made, is as follows:
2023
£’000
2022
£’000
Germany
22,095
24,192
+/- %
(9%)
USA
UK
26,133
36,822
(29%)
815
1,419
(43%)
Russia see below
3,568
4,202
(15%)
Total
52,611
66,635
(21%)
Revenue and AEBITDA by geographical segment:
2023
Revenue
£’000
2023
Adjusted
EBITDA*
£’000
2022
Revenue
£’000
Germany
22,095
6,459
24,192
USA
UK
Russia
Total
26,133
6,851
36,822
815
(4,018)
1,419
(3,057)
3,568
1,092
4,202
1,563
52,611
10,384
66,635
14,904
2022
Adjusted
EBITDA*
£’000
8,089
8,309
* Adjusted EBITDA excludes exceptional
items and
share-based payments.
Commentary by geographical segment:
Germany – Reduction in revenue primarily due to sample
collection tubes and kits contract manufacturing activity
following COVID drop off in Q1 2022. The reduction was
partly offset by the increase in revenue across several core
product lines, which meant only a 9% overall reduction in
revenue. This reduction in revenue impacted the adjusted
EBITDA generating £6.5m in 2023 (2022: £8.1m).
USA – Significant reduction in contract manufacturing
following COVID drop off in Q1 2022, plus effect of sale of
ADL Health. The US business includes the Clinical Chemistry
products discussed earlier in the Chairman’s Statement.
Again, the revenue reduction impacted the adjusted EBITDA
generating £6.9m in 2023 (2022: £8.3m).
UK – Reduced contract manufacturing activity following the
closure of the UK contract manufacturing facility in Q1 2023.
11
Russia – Local currency revenue increased but was affected
by less favourable exchange rates. EKF’s Russian entity is 60%
owned by the Group with 100% of its results consolidated,
with the non-controlling interest shown separately in the
income statement and statement of financial position.
Russia Update
During 2023 EKF continued to supply essential medical
products to its 60%-owned Russian subsidiary, in compliance
with current international sanctions guidance and following
regular management review. The effect of sanctions and
Russian Government retaliation is increasing. Despite this, it
has been possible to distribute limited cash dividends from
this subsidiary in 2023, however it is not clear how long this
will be able to continue. As at 31 December 2023, cash held
in Russia totalled £1.7m (31 December 2022: £2.4m).
Management continues to assess the situation in Russia
and is mindful of the growing financial and operational
challenges.
Gross profit
Gross profit was £23.9m (2022: £24.0m), which represents
a gross margin of 45% (2022: 36%). Before exceptional
costs of £0.6m (2022: £6.8m) the gross profit was
£24.4m (2022: £30.8m), representing a gross margin
percentage of 46% (2022: 46%). The margin improvement
lower exceptional costs.
was
largely the result of
Administration costs and research and
development
Administration costs excluding exceptional items have
decreased to £19.7m (2022: £23.2m), largely as a result of
cost savings made and the disposal of ADL Health, and a
lower headcount across the other businesses.
Research and development costs included in administration
expenses were £1.8m (2022: £1.5m). A further £0.4m (2022:
£1.4m) was capitalised as an intangible asset, resulting
from our development work to broaden and improve our
product portfolio (including our EKF Link data management
platform), bringing gross R&D expenditure for the year to
£2.2m (2022: £2.9m). Impairment of development work
which no longer met the criteria for capitalisation totalled
£0.9m. The charge for depreciation of fixed assets and
amortisation of intangible assets decreased to £5.5m (2022:
£6.7m). The reduction was mainly associated with lower
amortisation charges.
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Chief Financial Officer’s Review (continuation)
Operating profit and adjusted earnings
before interest, tax, depreciation and
amortisation
The Group generated an operating profit of £2.1m (2022:
loss of £9.0m). This was a result of lower exceptional costs,
and the positive effects of the cost savings made during
the year. We continue to consider that adjusted earnings
before interest, tax, depreciation and amortisation, share-
based payments and exceptional items (adjusted EBITDA)
is a better measure of the Group’s progress as the Board
believes it provides a clearer comparison of the underlying
operating performance between periods. In 2023 we
achieved adjusted EBITDA of £10.4m (2022: £14.9m), a
decrease of 30.2%, due to the lower gross profit generated
with the reduction in Covid related revenues but offset by
administrative expense savings. The calculation of this non-
GAAP measure is shown on the face of the income statement.
It excludes the effect of exceptional costs of £2.8m (2022:
£17.5m), the main elements of which in 2023 are the final
loss on disposal of assets relating to the disposal of ADL
Health, and the further write down of inventory relating to
our former COVID business, net of actions taken to mitigate
the effect.
Finance costs
There is net finance income of £0.05m (2022: £0.03m).
The benefit of interest received on cash balances, mainly
those held in Russia, is partially offset by interest on bank
borrowings as well as charges relating to leases accounted
for in accordance with IFRS 16. Although the Group holds
net cash, achievable financial returns on this remain very
low.
Tax
There is an income tax credit of £0.6m, a further decrease
from the prior year charge (2022: £0.6m). The effective tax
rate is (28.2%). This is mainly due to the tax effect of the
fixed asset programme in the USA.
Dividend
A cash dividend of 1.2p per ordinary share was paid in
December 2023, in respect of the final dividend for 2022.
Based on the potential need for continued modest investment
in the growth of our core areas the Board has decided that
it would be prudent to pause dividend payments and to
enhance shareholder value mainly through growth.
Balance sheet
Property plant and equipment and right-of-use assets
Additions to fixed assets were £7.4m (2022: £7.0m).
The largest part of this related to the fit out of the new
factory building in South Bend, Indiana and upgrading
and refurbishment of the Group’s manufacturing facility in
Elkhart, Indiana, and the capitalisation of replacement leases
under IFRS 16, mainly in respect of the Indiana properties.
The new facility was officially opened in October 2023 and
the major capital programme there is coming to an end.
Intangible assets
The carrying value of intangible assets has decreased, from
£33.8m at the end of 2022 to £30.2m as at 31 December
2023. This is largely due to amortisation of assets and the
impairment of certain development projects which no longer
meet the criteria for capitalisation. Intangible assets with a
gross value of £9.3m which had previously been impaired in
full were disposed of during the year, largely as a result of
the disposal of ADL Health.
Investments
During the year the Company disposed of all of its
shareholding in Renalytix plc, a developer of artificial
intelligence enabled chronic kidney disease products.
Proceeds were £1.3m. We continue to hold small investments
in Verici Dx plc, Epinex, LLC, and Llusern Scientific Limited,
with a combined carrying value as at 31 December 2023 of
£0.28m.
Due to the stated strategic focus on the core established
business and Life Sciences we do not expect to make any
further external investments in 2024.
Cash and working capital
Group cash net of borrowings (which excludes marketable
securities and lease creditors assessed in relation to IFRS
16 assets) has decreased to £4.7m from £11.4m. Excluding
cash held in Russia; the cash balance net of borrowings is
£3.0m (2022: £9.0m). Gross cash has reduced to £7.7m
(2022: £11.6m). Borrowings at 31 December 2022 of £0.1m
were repaid in full during the year. A new loan of £3.0m
was agreed in September 2023 and drawn down during
the year from HSBC UK plc. The loan is a revolving credit
facility which allows us to borrow over short periods within
the three-year term. Borrowings are therefore disclosed
as current. Cash generated by operations is £8.8m (2022:
£12.7m). Investment has been made in the acquisition of fixed
assets (£6.8m excluding IFRS 16 leases), principally the new
fermentation facility in South Bend, Indiana. The dividend
paid in December 2023 totalled £5.4m (2022: £5.4m). In
addition, a tax refund in relation to the US business of $2.7m
is expected before the end of 2024.
In addition to the loan from HSBC, the Company continues
to benefit from a funding line with North Atlantic Smaller
12
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Chief Financial Officer’s Review (continuation)
of mitigation options available, the business demonstrates
sufficient headroom giving the Directors confidence that the
business can continue to meet its obligations as they fall due,
even under the worst-case scenarios, for at least 12 months
from the date of this report. Accordingly, the directors are
satisfied they can prepare the accounts on a going concern
basis.
Share capital
During the year the Company acquired 1.2m of its own
ordinary shares at a value of £0.4m in connection with the
sale of the ADL Health business to certain of its original
shareholders. The acquired shares remain held in treasury
as notified after the purchase.
The remaining share options in the Company’s ordinary
shares lapsed during the year, and as a result there are no
outstanding share options at 31 December 2023.
Stephen Young
Chief Financial Officer
20 March 2024
Companies Investment Trust PLC (“NASCIT”). Christopher
Mills, Non-executive Director of the Company, sits on
the Board as Chief Executive Officer of NASCIT and is a
substantial shareholder of both the Company and the lender.
This is a committed facility for a maximum value of £3.0m
which, as at the date of this statement, is not drawn down.
The direct and indirect shareholdings of Mr. Mills in the
Company include those of the North Atlantic Smaller
Companies Investment Trust PLC.
The lending facility is available for three years from the
date of signature in March 2023 and any amounts drawn
down carry interest at 2.5% above the Bank of England
base rate from time to time, payable quarterly in arrears.
Any loan under the facility is required to be fully repaid at
the end of the facility term. The Company may repay any
such loan early, in part or in full, but may not re-borrow such
amounts. An arrangement fee of £25k was paid to NASCIT
in connection with the facility being made available.
As a Substantial Shareholder (as defined in the AIM
Rules), the arrangement of the debt facility with NASCIT
represented a related party transaction pursuant to AIM
Rule 13. In accordance with AIM Rule 13, the independent
Directors of EKF (being the Directors of the Company
other than Christopher Mills), consulted with Singer Capital
Markets as the Company’s nominated adviser and disclosed
(prior to entry into the facility agreement) that they consider
the terms of that agreement are fair and reasonable in so far
as shareholders are concerned.
Going concern
The Directors have considered the applicability of the
going concern basis in the preparation of these financial
statements. This included the review of internal budgets and
financial results which show that, even taking into account
severe but plausible changes in financial performance, the
Group will be able to meet its liabilities as they fall due
throughout the going concern period. The directors note
the Company has net current liabilities as at 31 December
2023 and at 31 December 2022, however the majority of the
current creditors are in the form of intercompany creditors
to subsidiary companies and the timing of settlements is
within the control of the company.
The Directors have modelled a range of sensitivities from
the base internal Budget including lower revenues, and
continued restrictions in Russia in relation to accessing
cash. In addition, during 2023 the Group has undertaken
cost reductions, and secured a committeed loan of £3m
from HSBC. It also retains access to £3m of funding from
North Atlantic Smaller Companies Investment Trust, which
is available until March 2026.
Considering the range of sensitivities which account for a
severe downturn versus expectation in 2024, plus the range
13
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Board of Directors
Non-Executive Directors
Julian Baines MBE (Non-executive Director until 7 February 2023)
Executive Chair
Julian was Group CEO of BBI where he undertook a management buyout in 2000, a flotation
on AIM in 2004 and was responsible for selling the business to Alere Inc. (now part of
Abbott Laboratories) in 2008 for circa £85 million. Julian founded and was CEO of the EKF
Group from its inception in 2009 until 2021, during which time he successfully completed a
number of fund raisings and the acquisition and subsequent integration of eight businesses
in seven countries. In 2016 he was awarded an MBE for services to the life sciences industry.
Julian served as Non-executive Deputy Chair from 2021 before returning to an executive
position with the Group in January 2023. Julian is also Chair of Verici Dx plc.
Stephen Young (Appointed 12 September 2023)
Chief Financial Officer
Steve is an experienced Finance Director and CFO. He joined the Company from Trellus
Health plc where he had served as Interim Chief Financial Officer, in a non-board capacity,
since August 2022.
Prior to working with Trellus, Steve served for thirteen years as CFO and Company Secretary
with Axiom Manufacturing Services Limited, a contract electronic manufacturer. Having
joined in 2009 when Axiom generated close to £12m in revenue and was loss making, he
supported the restructuring of the business to over £62m turnover in 2020.
In addition to this, Steve has experiencee with AIM-quoted businesses having served as
Interim CFO at Pure Wafer plc and, before this, BBI Holdings plc which was admitted to
AIM in 2004. During Steve’s seven year tenure at BBI he reported to EKF Executive Chair
Julian Baines when he was CEO of BBI. Steve is a member of the Chartered Institute of
Management Accountants (CIMA).
14
Annual Report 2023 | EKF Diagnostics Holdings plc1.0
Board of Directors (continuation)
Non-Executive Directors
Christopher Mills
Non-executive Director (Non-executive Chair until 7 February 2023)
Christopher founded Harwood Capital Management in 2011, a successor to its former parent
company J.O. Hambro Capital Management, which he co-founded in 1993. He is Chief
Executive and Investment Manager of North Atlantic Smaller Companies Investment Trust
plc and Chief Investment Officer of Harwood Capital LLP. He is a Non-Executive Director of
a number of companies including Renalytix plc. Christopher was a Director of Invesco MIM,
where he was Head of North American Investments and Venture Capital, and of Samuel
Montagu International.
Christian Rigg
Senior Independent Non-executive Director
Chris Rigg is a chartered accountant who has significant executive experience at both public
and private companies. He was formerly the Chief Executive Officer of Project Galaxy UK
Topco Limited (the holding company of Mandata Holdings Limited) and formerly a Non-
executive Director of the main market listed Sportech plc. Chris previously held the positions
of Chief Financial Officer and latterly Chief Executive Officer at Quantum Pharma plc, which,
under his stewardship, was refinanced and implemented a new strategy facilitating growth
and leading to its acquisition by Clinigen Group plc for an enterprise value of £160 million.
Chris is chair of the Audit Committee and a member of the Remuneration Committee.
Jennifer Winter
Independent Non-executive Director
Jenny has over 20 years’ experience across a broad variety of healthcare organisations
ranging from small not-for-profit companies to large corporates. Jenny is currently
Chief Executive Officer of AIM listed Animalcare Group plc (AIM: ANCR) where she is
successfully executing on the business’s long-term growth strategy, against a backdrop
of very challenging market conditions. Before joining Animalcare Group plc in October
2018, Jenny was Vice President of Respiratory products - Global Supply Chain and
Strategy at AstraZeneca, a position she held from 2015. Jenny has a BSc in Physiology
and Pharmacology from the University of Southampton.
Jenny is chair of the Remuneration Committee and a member of the Audit Committee.
15
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Strategic Report
for the year ended 31 December 2023
The Directors present their Strategic Report for the
year to 31 December 2023.
are incentivised as detailed in the Directors’ Remuneration
Report. There has been no change in the level of this risk in
the last 12 months.
Review of the business
A review of the business is contained in the Executive
Chairman’s Statement on pages 7 to 10 and the Chief
Financial Officer’s Review on pages 11 to 13.
We recognise that effective risk management is essential
to the successful delivery of the Group’s strategy. As we
continue to develop our business we believe it is important
to expand and enhance our risk management processes
and control environment on an ongoing basis and ensure
it remains fit for purpose. We continue to mature our
approach to identifying and managing risks across the
Group in a consistent and robust manner.
Below we describe our risk management approach, the
principal risks and uncertainties faced by the Group and the
controls in place to manage them.
Overview of risk management approach
Each business area is responsible for identifying, assessing and
managing the risks in their respective area. Risks are identified
and assessed by all business areas on a periodic basis, and
are measured against a defined set of criteria, considering
likelihood of occurrence, and potential impact. The Executive
Board members also conduct a strategic risk identification
and assessment exercise to identify risks, including those
that could impact the business model, future performance,
solvency or liquidity. This risk information is combined with
a consolidated view of the business area risks. The most
significant risks identified are included in our Group Risk
Profile, which is reported to the Executive Board for review
and challenge, ahead of it being submitted to the Group
Board for final review, challenge and approval. The Board has
the overall accountability for ensuring that risk is effectively
managed across the Group and therefore ensuring that it is
comfortable with the nature and extent of the principal risks
faced in achieving its strategic objectives.
Principal risks and uncertainties
Set out below are the principal and emerging risks which
we believe could materially affect the Group’s ability to
achieve its financial and operating objectives and control or
mitigating activities adopted to manage them. The risks are
not listed in order of significance.
Key employees
Lack of retention of key employees affects the continuity and
effectiveness of on-going relationships with key customers
and suppliers.
This risk is minimised by ensuring that a minimum of two
individuals manage every relationship with key customers
and suppliers. In addition, in retaining the key employees,
incentivisation packages are offered through a mixture
of sales commission, and bonuses. Main Board Directors
Political risk
A significant proportion of the Group’s revenues are accounted
for by agreements in developing countries. Any instability in
these countries could meaningfully affect the operations and the
revenue of the Group. In particular the Group has revenues from
customers in Russia and an entity based there. As a result of
the sanctions imposed on Russia by the EU, the USA and other
countries, there are enhanced risks in respect of our Russian
entity, including credit risk to cash balances, its ability to collect
debtors, and our ability to import products into Russia. The
situation in Russia is changing rapidly and mitigation of these
risks is difficult, however we maintain frequent communications
with our senior management in the country who have a good
knowledge of operating there in difficult circumstances. In
addition we have disregarded sales from this region in our
growth forecasts.
The Group spreads the risk through seeking a portfolio of
diversified revenue streams geographically with a mixture of
distribution partners in developing and developed countries.
The Group has not faced significant issues following the UK ‘s
withdrawal from the EU, however the Group has employees,
facilities, customers, and suppliers in both the United Kingdom
and the EU, and there remains a possibility withdrawal may
affect the Group’s operational abilities and costs. The Group
has taken mitigating actions including the movement of certain
activities between the UK and the EU, and seeks to manage this
risk by monitoring events and taking further mitigating actions
if necessary,
The level of this risk has increased in the last 12 months.
Regulatory risk
There can be no guarantee that any of the Group’s products
will be able to obtain or maintain the necessary regulatory
approvals in any or all of the territories in respect of which
applications for such approvals are made. Where regulatory
approvals are obtained, there can be no guarantee that the
conditions attached to such approvals will not be considered
too onerous by the Group or its distribution partners in order
to be able to market its products effectively. The Group
seeks to reduce this risk by manufacturing the products to
recognised standards, by keeping appraised with changes
in the standards geographically, by seeking advice from
regulatory advisers, consultations with regulatory approval
bodies and by working with experienced distribution partners.
The Group’s operations are covered by the In Vitro Diagnostic
Regulation (IVDR) which affects all our products produced or
sold in the EU. We have adapted to the significant changes
the IVDR brings such that we are ready to meet the immediate
requirements, and have a defined plan for the amended
transitional provisions. A number of the dates by which full
compliance is required have been postponed. There has been
no change in the level of this risk in the last 12 months.
16
Annual Report 2023 | EKF Diagnostics Holdings plc1.0
Strategic Report (continuation)
for the year ended 31 December 2023
Competition risk
Due to the Group’s current and future potential competitors,
such as major multinational pharmaceutical and healthcare
companies, having substantially greater resources than those
of the Group, the competitors may develop systems and
products that are more effective or economic than any of
those developed by the Group, rendering the Group’s products
obsolete or otherwise non-competitive. The Group seeks to
mitigate this risk by securing patent registration protection
for its products where appropriate, maintaining confidentiality
agreements regarding the Group’s know-how and technology,
monitoring technological developments and by selecting
leading businesses in their respective fields as distribution
partners capable of addressing significant competition, should
it arise. There has been no change in the level of this risk in the
last 12 months.
Intellectual property risk
The commercial success of the Group and its ability to
compete effectively with other companies depends, amongst
other things, on its ability to obtain and maintain patents
sufficiently broad in scope to provide protection for the
Group’s intellectual property rights against third parties and
to exploit its products. The absence of any such patents
may have a material adverse effect on the Group’s ability to
develop its business.
The Group mitigates this risk by developing products
where legal advice indicates patent protection would be
available, seeking patent protection for the Group’s products,
maintaining confidentiality agreements regarding Group
know-how and technology and monitoring technological
developments and the registration of patents by other
parties. The commercial success of the Group also depends
upon not infringing patents granted, now or in the future,
to third parties who may have filed applications or who
have obtained, or may obtain, patents relating to business
processes which might inhibit the Group’s ability to develop
and exploit its own products. There has been no change in
the level of this risk in the last 12 months.
Foreign exchange risk
The Group has transactional currency exposures as the
majority of revenues and expenditure and certain borrowings
are denominated in foreign currencies. Fluctuations in
exchange rates between the Company’s functional currency
of Sterling and the currency of the overseas operations
could adversely impact the financial results. In most cases
the Group matches the currency receipts and expenditure of
the overseas operations. The Group also endeavours where
appropriate to match the foreign currency assets of the
foreign operations by funding through borrowings and loans
denominated in the currency of the overseas operations, and
to negotiate currency protection in major contracts. There has
been no change in the level of this risk in the last 12 months.
Reimbursement levels
There is no guarantee that the Group may be able to sell its
products or services profitably if the reimbursement level
from third party payers, including government and private
health insurers, is unavailable or limited. Third party payers are
increasingly attempting to contain health care costs through
measures that could impact the Group including challenging
the prices charged for health care products and services,
limiting both coverage and the amount of reimbursement
for new diagnostics products and services, and denying or
limiting coverage for products that are approved by the
regulatory agencies but are considered experimental by third
party payers.
The Group understands that due to third party dependency
it is extremely difficult to eradicate this risk. However,
the Group manages this risk with constant dialogue and
educating the third party payers on the Group’s products and
also developing new technologies in order to seek additional
reimbursements. There has been no change in the level of
this risk in the last 12 months.
Cyber security risk
The Group uses computers extensively in its operations
and has an online presence but does not trade online. It is
at risk of attack through hacking or other methods. This risk
is mitigated by the use of robust security measures, staff
training, and back-up systems. Formal procedures are in
place where necessary. The level of this risk has not changed
in the last 12 months.
Climate change risk
Climate change means we may face physical risks such as
more frequent or severe weather events; transitional risks such
as increased regulatory requirements from our customers or
that a move towards a greener economy could mean the
Group might face reductions in asset values or higher costs
of doing business. Equally the response to climate change
may lead to new, but not yet identified, opportunities for the
Group. While the potential economic effect on the Group
is uncertain, the Group does not believe its operations are
materially at risk. The Group seeks to manage this risk by
monitoring events and taking mitigating actions if necessary.
More information on our response to climate change risks is
shown in the Environment section of this Report on page 18.
The level of this risk has not changed in the last 12 months.
Review of strategy and business model
The Board of Directors judge the Company’s financial
performance by reference to the internal budget which it
establishes at the beginning of each financial year.
EKF’s strategy is to create a global, world class, IVD
business through organic growth and strategic partnerships,
concentrating on point-of-care, and life sciences, while
investing heavily in our enzyme business. We have identified
and acquired businesses in these areas with strong product
lines and distribution networks which can benefit from better,
more professional management, greater resources, and from
the synergistic benefits of being part of a larger group.
17
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Strategic Report (continuation)
for the year ended 31 December 2023
We sell worldwide to over 100 countries. In many territories we
sell through local distributors, however where appropriate we
sell direct to end users which includes hospitals, laboratories,
and government agencies. Our distributors are supported
by a network of regional sales managers and by product
managers who are specialists in our product range. We
manufacture the majority of the products we sell ourselves,
but also distribute a number of carefully chosen products on
behalf of others. We have product support centres in the USA
and Germany.
Within its point-of-care business the Group works mainly on
the principle of providing value priced instrumentation which
generates long-term revenue streams from the subsequent
delivery of consumables. The Group has an existing portfolio
of technologies which produce revenues and will add
technologies which are strategically appropriate to this
portfolio should they become available and providing the
additions make economic sense.
Future outlook
The Executive Chairman’s Statement on pages 7 to 10 gives
information on the future outlook of the Group, including the
main trends and factors likely to affect its future development.
Key Performance Indicators (KPIs)
The key performance indicators currently used across the
Group are revenue, gross profit, adjusted EBITDA and cash
and working capital. Local entities also use a variety of non-
financial measures for measuring their own performance.
The Group is working to establish other key performance
indicators
including non-financial measures across the
Group. KPIs are discussed in more detail in the Chief Financial
Officer’s review on pages 11 to 13.
Environment
The Directors consider that the nature of the Group’s activities
is not inherently detrimental to the environment. The Group
is committed to minimising any effect on the environment
caused by its operations.
Primary responsibility for governance of the Group’s response
to climate change lies with the Board, which sets the strategy
for managing associated risks in association with the Group’s
senior management. Senior management are responsible for
identifying, assessing, and managing climate change risks
and opportunities, and for determining processes and actions
that need to be taken to manage and report on that risk.
The Group’s response is developing in line with, and where
appropriate ahead of government requirements and is led by
a senior manager. Part of this process will include an analysis
of the metrics, targets, and reporting requirements that we
are likely to face.
Physical risks
The Group operates in a number of geographical locations
throughout the world. None of these locations are in
environmentally sensitive areas, and the Group does not
believe that any locations are at material risk from severe
weather events or similar consequences of climate change.
We will monitor potential changes to our physical risk profiles
by monitoring events and assessing our response to them.
Transitional risks
Many of our ultimate customers are government bodies or
national health systems which are funded by governments,
large charities, or similar bodies. It is likely that part of their
climate change management will involve trickling down net
zero or similar initiatives to their supply chain. It is likely these
requirements will increase over time. We have commenced
a process of seeking to understand what effects if any this
process will have on our own response, risk profile, and on
the value of our income streams and assets. Areas we have
initially identified include use of plastics and packaging. Our
strategy is to work together with our customers and our own
supply chain to ensure that we can operate successfully within
customer requirements while mitigating as far as possible any
additional costs.
UK energy use
The Group is required to report on energy use in the UK
only, as our overseas subsidiaries do not come within the
scope of the UK Government’s Streamlined Energy and
Carbon Reporting (SECR) requirements. We have voluntarily
extended reporting to cover the remainder of the Group,
on the same basis as the UK reporting. It is our intention to
improve our climate change reporting over time, however this
is the start of our climate change journey and our response
will continue to evolve.
We have given a senior employee the responsibility to
champion our climate change response as part of a wider
ESG portfolio, who is working to produce a road map of our
actions and our reporting upon them. The need to respond
quickly and rigorously is being driven by our customers,
suppliers and other stakeholders. The responsible employee
is working with the Group’s executive management, finance
staff and other senior management to formulate and action
our climate change response and other ESG matters.
The tables below represent the energy use and associated
greenhouse gas (GHG) emissions from electricity and fuel use
in the UK and for the Group for the year ended 31 December
2023.
The Company has sought to improve its energy efficiency
by reducing electricity usage through lower wastage, and
by promoting the use of video conferencing rather than
international travel. Energy usage has increased because of
changes in activity.
18
Annual Report 2023 | EKF Diagnostics Holdings plc1.0
Strategic Report (continuation)
for the year ended 31 December 2023
UK
Energy consumption used
to calculate emissions:
Electricity usage
Transport
Conversion factors used
to calculate emissions:
2023
KwH
35,909
7,826
2023
Electricity usage (scope 2)
0.20496
Transport (scope 1)
0.27588
2022
KwH
61,321
3,044
2022
0.19121
0.2781
The 2023 emission conversion factors are based on the
UK Government GHG Conversion Factors for Company
Reporting 2023.
Calculated emissions
Electricity usage
2023
Tonnes of CO2
7
2022
Tonnes of CO2
12
Transport
Total
2
9
1
13
The rate of emissions per £m of turnover is 0.18 (2022:
0.19) tonnes of CO2.
Group
Energy consumption
used to calculate
emissions:
Electricity usage
Gas usage
Transport
Conversion factors
used to calculate
emissions:
Electricity usage
(scope 2)
Gas usage (scope 2)
Transport (scope 1)
2023
KwH
1,822,783
98,981
295,457
2023
0.20496
0.20267
0.26900
2022
KwH
1,526,111
122,758
84,496
2022
0.19121
0.20227
0.2557
The emission conversion factors are based on the UK
Government GHG Conversion Factors for Company
Reporting 2023.
Calculated emissions
Electricity usage
2023
Tonnes of CO2
374
2022
Tonnes of CO2
292
Gas usage
Transport
Total
20
79
473
25
21
338
The rate of emissions per £m of turnover is 8.99 (2022:
5.07) tonnes of CO2.
19
Employees
The Group places great value on the involvement of its
employees and they are regularly briefed on the Group’s
activities. The Group closely monitors staff attrition rates
which it seeks to keep at low levels and aims to structure staff
compensation levels at competitive rates in order to attract
and retain high calibre personnel.
Disabled employees
Applications for employment by disabled persons are always
fully considered, bearing in mind the specific aptitudes of
the applicant involved. It is the policy of the Group that the
training, career development and promotion of disabled
persons, as far as possible, be identical with that of other
employees.
Social, community, and human rights
The Board recognises that the Group has a duty to be a
good corporate citizen and to respect the laws, and where
appropriate the customs and culture of the territories in
which it operates. The Group has donated product to selected
appropriate charities which operate within its area, and
encourages staff to take part in charitable activities which
are related to our business areas or customers. It contributes
as far as is practicable to the local communities in which it
operates and takes a responsible and positive approach to
employment practices. The Group’s Modern Slavery Act
statement is published on our website.
Section 172 Statement
The Directors are required by the Companies Act 2006 to
act in the way they consider, in good faith, would be most
likely to promote success of the Group for the benefit of its
shareholders as a whole and in doing so are required to have
regard for the following:
• the likely long term consequences of any decision;
• the interests of the Group’s employees;
• the need to foster the Group’s business relationships
with suppliers, customers and others;
• the impact of the Company’s operations on the
community and the environment;
• the desirability of the Company maintaining a
reputation for high standards of business conduct; and
the need to act fairly as between shareholders of the
Company.
The Group has adopted the Corporate Governance Code
for Small and Mid-Size Quoted Companies from The Quoted
Companies Alliance (the “QCA Code”). The QCA Code is an
appropriate code of conduct for the Group’s size and stage of
development. There is a discussion of how the Group applies
the ten principles of the QCA Code in support of its growth
on the Group’s website. The Group has noted the updated
QCA Code which will come into force for accounting periods
commencing on or after 1 April 2024, and is considering its
implications.
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 more details in “Relations with shareholders” in the Corporate
Governance Report on pages 24 to 26.
The Strategic Report was approved by the Board on 20
March 2024 and signed on its behalf by:
Stephen Young
Chief Financial Officer
Strategic Report (continuation)
for the year ended 31 December 2023
The Executive Chairman’s and Chief Financial Officer’s
statements describe the Group’s activities, strategy and
future prospects, including the considerations for long term
decision making on pages 7 to 13. The Board considers that
its response to changes in the market has been measured and
has allowed it to grasp opportunities as they have arrived.
The Board considers its major stakeholders to be its employees,
its suppliers, customers, and shareholders. When making
decisions, the interests of these stakeholders is considered
informally as part of the Board’s group discussions.
The Board has a good relationship with the Group’s employees.
The Board maintains constructive dialogue with employees
through the Executive Directors. Appropriate remuneration
and incentive schemes including bonuses and commissions
are maintained to align employees’ objectives with those
of the Group. The Group regularly discusses progress both
locally and at group level with employees in “town hall” style
meetings, allowing opportunities to exchange views and for
employees to have a say. The Group has an open, flexible,
and entrepreneurial culture which has allowed the Group to
be flexible and responsive to customer needs. The Board
monitors, assesses, and promotes the Group’s corporate
culture through discussions with management and employees
and through the use of appropriate measures.
The Board ensures that the Group endeavours to maintain
good relationships with its suppliers by contracting on
reasonable business terms and paying them promptly,
within agreed terms. We meet with our significant suppliers
regularly and where required audit their activities to ensure
that materials are delivered effectively in a timely and cost-
efficient manner. We frequently offer longer term contracts
to provide stability to their business in return for cost savings.
These principles ensure that the Group’s and our significant
suppliers’ interests are aligned.
The Executive Directors meet major customers regularly and
encourage a dialogue with them and with the Regional Sales
Management team as appropriate. The Board receives regular
reports on progress with customer relationships to ensure
that their decision making takes into account the needs of
our customer base. Key Performance Indicators are used
internally to ensure we are responding to customer needs.
The Board does not believe that the Group has a significant
impact on the communities and environments within which it
operates. The Board recognises that the Group has a duty to
be a good corporate citizen and is conscious that its business
processes minimise harm to the environment, and that it
contributes as far as is practicable to the local communities
in which it operates.
The Board recognizes the
importance of maintaining
high standards of business conduct. The Group operates
appropriate policies on business ethics and provides
mechanisms for whistle blowing and complaints. The
Board endeavours to maintain good relationships with its
shareholders and treat them equally. This is described in
20
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Report of the Directors
for the year ended 31 December 2023
The Directors have pleasure in presenting this report together
with the audited consolidated financial statements of EKF
Diagnostics Holdings plc for the year ended 31 December
2023.
Corporate details
EKF Diagnostics Holdings Plc is a company incorporated in
England and Wales and domiciled in the United Kingdom.
The Company is a public limited company, which is listed
on the Alternative Investment Market of the London Stock
Exchange. The address of the registered office is Avon House,
19 Stanwell Road, Penarth, Cardiff CF64 2EZ.
Directors
The Directors who held office during the year and as at the
date of signing the financial statements were as follows:
• Julian Baines
• Christopher Mills
• Christian Rigg
• Jennifer Winter
• Stephen Young (appointed 12 September 2023)
• Marc Davies (resigned 29 September 2023)
• Michael Salter (resigned 6 February 2023)
On 7 February 2023 Julian Baines, formerly Non-Executive
Director, was appointed Executive Chair. At the same time
Christopher Mills stepped down as Non-Executive Chairman
but remained a Non-Executive Director.
Mike Salter resigned as a director on 6 February 2023. Marc
Davies resigned as a director on 29 September 2023. The
Company Secretary is One Advisory Limited.
Principal activities
During the year the principal activities of the Group and
Company were the development, manufacture and supply
of products into the in-vitro diagnostics (IVD) market place.
Future developments and research and development activities
are discussed in the Executive Chairman’s Statement on pages
7 to 10, the Chief Financial Officer’s Review on pages 11 to 13,
and the Strategic Report on pages 16 to 20.
Dividends and share buy back
In December 2023 the Company paid a final dividend for 2022
of 1.2p (2021: 1.2p) per share. Based on the need for continued
investment in our core areas the Board has decided that it
would be prudent to discontinue dividend payments and to
enhance shareholder value mainly through growth.
The Company holds authorisation to acquire up to
approximately 15% of its Ordinary Shares in order to reduce
the number of shares in issue. No shares (2022: 9,000,000
shares) were acquired for cash under this authorisation
during the year. As consideration for the disposal of ADL
Health during 2023, 1,200,000 Ordinary Shares of 1p each,
with a nominal value of £12,000, were returned to the Group.
The market value of the shares was 28.65p and the gross
21
value was £343,800. The shares are held in treasury. The
Company intends to seek renewal of the authorisation at the
next AGM.
Going concern
The Directors have considered the applicability of the
going concern basis in the preparation of these financial
statements. This included the review of internal budgets
and financial results which show, even taking into account
severe but plausible changes in financial performance,
that the Group will be able to operate as outlined below.
The business continues to grow its core base under both Point
of Care and by funding the investment into Life Sciences at
the new facility in South Bend. The Directors have modelled a
range of sensitivities from the base internal Budget including
lower revenues, and continued restrictions in Russia in
relation to accessing cash. In addition the Group has taken
actions including cost reductions through the closure of the
UK manufacturing operations and the divestment of ADL,
and securing loan funding from HSBC UK of £3m and a
committed £3m of funding from the North Atlantic Smaller
Investment Trust which remains undrawn.
Companies
Considering the range of sensitivities which account for a
severe downturn versus expectation in 2024, plus the range
of mitigation options available the business demonstrates
sufficient headroom giving the Directors confidence that the
business can continue to meet its obligations as they fall due,
even under the worst-case scenarios, for at least 12 months from
the date of this report. Accordingly, the directors are satisfied
they can prepare the accounts on a going concern basis.
Financial risk management
Financial risk management is discussed in Note 3 of the
financial statements.
Employee policies and engagement
Employee policies are discussed in the Strategic Report on
pages 16 to 20.
Stakeholder engagement
A statement summarising how the directors have had regard
to the need to foster the Group’s business relationships with
other stakeholders is included in the Strategic Report on
pages 16 to 20.
Streamlined Energy and Carbon Reporting
(SECR)
SECR reporting is included in the Strategic Report on page 19.
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Report of the Directors (continuation)
for the year ended 31 December 2023
Directors’ interests
The interests in the share capital of the Company of those
Directors serving at 31 December 2023, all of which are
beneficial, are set out below. Other than as noted below
there were no changes to the Directors’ interests in the
share capital of the Company between 31 December 2023
and the date of the signing of these financial statements.
On 31 December
20231
Ordinary Shares
of 1p each
On 31 December
20222
Ordinary Shares
of 1p each
Christopher Mills
132,150,000
132,150,000
Julian Baines
Stephen Young
Christian Rigg
Jennifer Winter
1,616,288
85,000
1,616,288
85,000
-
-
-
-
1 or date of resignation if earlier
2 or date of appointment if later
Mr Mills holds 150,000 Ordinary shares in his own name. On
9 January 2024, funds connected with Mr Mills purchased a
further 100,000 shares at a price of 30p per share. Mr Mills’
other interest in the Company’s shares is held through North
Atlantic Smaller Companies Investment Trust PLC (“NASCIT”)
and Oryx International Growth Fund Limited (“Oryx”).
Harwood Capital LLP (“Harwood”) is investment manager
and investment adviser to NASCIT and Oryx respectively.
Christopher Mills is a partner and Chief Investment Officer
of Harwood. Christopher Mills is also a director of Oryx and
NASCIT. He holds 2.50% of the shares in Oryx in his own
name as well as a further 52.68% of the shares in Oryx via his
27.74% shareholding in NASCIT.
Substantial shareholdings
As at 20 March 2024, the following interests in 3% or more
of the issued Ordinary Share capital had been notified to the
Company:
Number of
shares
Percentage of
issued share
capital
Mr Christopher Mills
132,250,000
LionTrust Asset
Management
Gresham House
29.15%
11.99%
54,419,493
49,788,498
10.97%
Schroder Investment
Management
24,506,709
Stockinvest Limited
19,065,000
Morgan Stanley
14,581,722
5.40%
4.20%
3.21%
The interests disclosed above are those as at 28 February
2024, updated for any substantial shareholding notifications
received up to 20 March 2024. The above holdings consist
solely of Ordinary Shares.
Statement of Directors’ responsibilities in
respect of the financial statements
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have prepared the group and the company financial
statements in accordance with UK-adopted international
accounting standards.
Under company law, 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 company and
of the profit or loss of the group for that period. In preparing
the financial statements, the directors are required to:
•
•
select suitable accounting policies and then apply them
consistently;
state whether applicable UK-adopted
international
accounting standards have been followed, subject to
any material departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates that are
•
reasonable and prudent; and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the group
and company will continue in business.
The directors are responsible for safeguarding the assets of
the group and company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the group’s and company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the group and company and enable them to ensure that the
financial statements comply with the Companies Act 2006.
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.
Directors’ confirmations
In the case of each director in office at the date the directors’
report is approved:
• so far as the director is aware, there is no relevant audit
information of which the group’s and company’s auditors
are unaware; and
• they have taken all the steps that they ought to have
taken as a director in order to make themselves aware
of any relevant audit information and to establish that
the group’s and company’s auditors are aware of that
information.
22
Annual Report 2023 | EKF Diagnostics Holdings plc1.0
Report of the Directors (continuation)
for the year ended 31 December 2023
Directors’ liability insurance
The Company has entered into deeds of indemnity for the
benefit of each Director of the Company in respect of liabilities
to which they may become liable in their capacity as Director
of the Company and of any Company in the Group. Those
indemnities are qualifying third party indemnity provisions
for the purposes of Section 234 of the Companies Act 2006
and have been in force during the whole of the financial year
and up to the date of approval of the financial statements.
Independent auditors
PricewaterhouseCoopers LLP has expressed their willingness
to continue in office as auditors and a resolution to reappoint
them will be proposed at the forthcoming Annual General
Meeting.
Corporate governance
The Company’s statement of corporate governance can be
found in the Corporate Governance Statement on pages 24 to
26 of these financial statements. The Corporate Governance
Statement forms part of this Report of the Directors and is
incorporated into it by cross-reference.
Annual General Meeting
The resolutions to be proposed at the forthcoming Annual
General Meeting are set out in the formal notice of the
meeting, as set out on pages 80 to 81.
Recommendation
The Board considers that the resolutions to be proposed
at the Annual General Meeting are in the best interests of
the Company and it is unanimously recommended that
shareholders support these proposals as the Board intends to
do in respect of their own holdings.
The Report of the Directors was approved by the Board on
20 March 2024 and signed on its behalf by:
Stephen Young
Chief Financial Officer
23
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Corporate Governance Statement
for the year ended 31 December 2023
Compliance
The Company recognises the value of good corporate
governance in every part of its business. In 2018 the Board
adopted the corporate governance principles of the Quoted
Companies Alliance Governance Code. Details of the Code
can be obtained from the Quoted Companies Alliance’s
website (www.theqca.com).
The following statement describes how the Group as at 31
December 2023 sought to address the principles underlying
the Code. The QCA has issued an update to the code which
takes effect for financial years commencing on or after 1 April
2024, which the Group will be adopting.
Board composition and responsibility
A number of changes to the Board took place on 7 February
2023. Christopher Mills stepped down as Non-Executive
Chairman but remains a Non-Executive Director; Julian
Baines was appointed Executive Chairman; and Michael Salter
resigned as Chief Executive. Later, Marc Davies resigned as
a Director on 29 September 2023 and Stephen Young was
appointed as an Executive Director on 12 September 2023.
As a result the Board currently comprises two Executive
Directors and three Non-Executive Directors.
It is the Board’s opinion that the two directors, Christian
Rigg and Jennifer Winter are independent in character and
judgment and that there are no relationships or circumstances
which could materially affect or interfere with the exercise of
their independent judgement. Both Mr. Rigg and Ms. Winter
have been appointed to the Boards of numerous companies,
with Mr. Rigg specialising in finance and operational matters
and Ms. Winter specialising in commercial operations in the
healthcare sector. The Directors keep their skills up to date
through appropriate training and experience both within and
outside the organisation.
All Directors are subject to election by Shareholders at the
first Annual General Meeting after their appointment, and are
subject to re-election at least every three years. Non-Executive
Directors are appointed for a specific term of office which
provides for their removal in certain circumstances, including
under section 168 of the Companies Act 2006. The Board
does not automatically re-nominate Non-Executive Directors
for election by Shareholders. The terms of appointment of
the Non-Executive Directors can be obtained by request to
the Company Secretary.
The Board’s primary objective is to focus on adding value
to the assets of the Group by identifying and assessing
business opportunities and ensuring that potential risks are
identified, monitored and controlled. Matters reserved for
Board decisions include strategic long-term objectives and
capital structure of major transactions. The implementation
of Board decisions and day to day operations of the Group
are delegated to Management. More details of the Group’s
objectives, strategy, and business model, and the Board’s
assessment of the state of the Group’s culture are given in
the Strategic Report on pages 16 to 20.
For the immediate future the Executive Chairman will be
responsible for the overall strategy of the Group and running
the Board including corporate governance, as well as being
responsible for implementing the strategy and day to day
running of the Group. He is assisted by the Chief Financial
Officer.
A Senior Management Group of four senior managers has
been put in place to assist the Executive Directors with their
responsibilities.
Board meetings
Seven Board meetings were held during the year. The Directors’
attendance record during the year, along with the number of
meetings for which they were eligible to attend, is as follows:
Julian Baines (Executive Chair)
Stephen Young (Chief Financial Officer)
Christopher Mills (Non-Executive Director)
Chris Rigg (Non-Executive Director)
Jennifer Winter (Non-Executive Director)
Michael Salter (Former Chief Executive)
Marc Davies (Former Chief Financial Officer)
7 (7)
1 (1)
7 (7)
7 (7)
7 (7)
1 (1)
5 (6)
Mr Young works full time for the Group. Mr Baines is working
for the Group on a part-time basis for a minimum of two
days per week. The Non-Executive Directors are expected to
devote at least two days per month to the business of the
Group, plus additional days for committee meetings.
Board evaluation
On March 11 2022 the Board performed an evaluation of
their performance and that of the Chairman, as well as the
effectiveness of the Board committees. The evaluation
found that the Board and the Chairman’s performance were
satisfactory. Given the Group’s size, the Board currently
considers it unnecessary to have evaluations facilitated by an
external consultant, but will keep this under review.
The Board performed a further evaluation of its performance
in late-2022, with the results being presented to the Board
in January 2023. The evaluation focussed on board role,
composition and dynamics. The evaluation confirmed that
many of the processes and procedures in place to support the
24
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Corporate Governance Statement (continuation)
for the year ended 31 December 2023
Board remain effective. The changes in the board structure
during the year made it impractical to have an evaluation
during the year. A further evaluation is planned to take place
in 2024.
More details on corporate governance including a compliance
statement can be found on the Company’s website at:
ekfdiagnostics.com/investors.html.
Audit Committee
This now comprises two Non-Executive Directors, Chris Rigg
(Chairman) and Jennifer Winter. Chris Rigg is the Senior
Independent Director and has recent and relevant finance
experience. The committee has responsibility over the following:
• Recommend the appointment, re-appointment and
removal of the external auditors. The external audit
process is assessed through discussion within the
committee and with management. If the committee
believes based on this assessment that the external
auditors should be replaced or the audit put out
to tender, this is determined by the full Board. The
Company rotates its auditor or performs a retender in
line with the needs of the business and legislation. The
current auditors have been in place since 2010, and the
audit was last retendered in 2015. There are no current
plans to seek a retender.
• Ensure the objectivity and independence of the auditors
including occasions when non-audit services are
provided. From 2020 the external auditors have not
provided non-audit services.
• Ensure appropriate ‘whistle-blowing’ arrangements are
in place.
The Non-Executive Directors may seek information from any
employee of the Group and obtain external professional advice
at the expense of the Company if considered necessary. Due
to the relatively low number of personnel employed within
the Group, the nature of the business and the current control
and review systems in place, the Board has decided not to
establish a separate internal audit department.
The committee met three times formally during 2023. All
eligible members attended all meetings. There were no
significant matters communicated to the Committee by
the Auditors. Key matters of judgement discussed with the
Auditors are noted within the Audit report on pages 28 to 34.
Remuneration and Nomination Committee
The Company has established a formal and transparent
procedure for developing policy on executive remuneration
and for fixing the remuneration packages of individual
25
Directors. No Director is involved in deciding their own
remuneration.
The Remuneration Committee is now made up of Chris Rigg
and Jenny Winter. The Committee considers the employment
and performance of individual Executive Directors and
determines their terms of service and remuneration. It
also has authority to grant options under the Company’s
Executive Share Option Scheme.
The Committee met twice during 2023. All eligible members
attended all meetings. During the reporting period the
Committee reviewed the Terms of Reference and these
updated terms were adopted by the Board in May 2023.
Where necessary,
considers director nominations.
the
remuneration committee also
Internal control
The Directors are responsible for ensuring that the Group
maintains a system of internal control to provide them with
reasonable assurance regarding the reliability of financial
information used within the business and for publication
and that the assets are safeguarded. There are inherent
limitations in any system of internal control and accordingly
even the most effective system can provide only reasonable,
but not absolute, assurance with respect to the preparation
of financial reporting and the safeguarding of assets.
The Group, in administering its business, has put in place
strict authorisation, approval and control levels within which
senior management operates. These controls reflect the
Group’s organisational structure and business objectives.
The control system includes clear lines of accountability and
covers all areas of the organisation.
include an
The Board operates procedures which
appropriate control environment through the definition of
the above organisation structure and authority levels and
the identification of the major business risks. The Group has
commenced a project to enhance and formalise its internal
controls including the establishment of a Risk Steering
Committee, which will commence its work in 2024.
Internal financial reporting
The Directors are responsible for establishing and maintaining
the Group’s system of internal reporting and as such have
put in place a framework of controls to ensure that on-going
financial performance is measured in a timely and correct
manner and that risks are identified as early as is practicably
possible. There is a comprehensive budgeting system and
monthly management accounts are prepared which compare
actual results against both the budget and the previous year.
They are reviewed and approved by the Board and revised
forecasts are prepared on a regular basis.
Annual Report 2023 | EKF Diagnostics Holdings plc1.0
Corporate Governance Statement (continuation)
for the year ended 31 December 2023
Relations with shareholders
The Company reports to Shareholders twice a year. The
Company dispatches the notice of its Annual General Meeting,
together with a description of the items of special business,
at least 21 clear days before the meeting. Each substantially
separate issue is the subject of a separate resolution and all
Shareholders have the opportunity to put questions to the
Board at the Annual General Meeting.
The Chair(s) of the Audit and Remuneration Committees
normally attend the Annual General Meeting and will answer
questions which may be relevant to their work. The Chairman
advises the meeting of the details of proxy votes cast on each
of the individual resolutions after they have been voted on in
the meeting. The Chairman and the Non-Executive Directors
intend to maintain a good and continuing understanding of
the objectives and views of the Shareholders.
Shareholders may contact the Company as follows:
Tel: 029 2071 0570
Email: investors@ekfdiagnostics.com
Corporate social responsibility
The Board recognises that the Group has a duty to be a good
corporate citizen and is conscious that its business processes
minimise harm to the environment, that it contributes as
far as is practicable to the local communities in which it
operates and takes a responsible and positive approach to
employment practices.
With effect from the financial year to 31 December 2016, the
Group became subject to the requirements of the Modern
Slavery Act 2015. The Group has published the required
statement on its website.
The Corporate Governance Statement was approved by the
Board on 20 March 2024 and signed on its behalf by:
Stephen Young
Chief Financial Officer
26
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Report of the Remuneration Committee
for the year ended 31 December 2023
Statement of compliance
This report does not constitute a Directors’ Remuneration Report in accordance with The Companies (Directors’ Remuneration
Policy and Directors’ Remuneration Report) Regulations 2019 which do not apply to the Company as it is not fully listed. This
report sets out the Group policy on Directors’ remuneration, including emoluments, benefits and other share-based awards
made to each Director.
Policy on Executive Directors’ remuneration
Remuneration packages are designed to motivate and retain Executive Directors to ensure the continued development of the
Group and to reward them for enhancing value to shareholders. The main elements of the remuneration package for Executive
Directors are basic salary or fees, performance-related bonuses, benefits and share based incentives. Increases in salaries
and bonus levels for Executive Directors are determined by the Remuneration Committee, and those for the Non-Executive
Directors by the full Board. No Director is involved in deciding their own remuneration. Mr Young’s salary was determined
based on his skills and experience and market conditions. As at the date of this report, no new remuneration arrangements
had been made for the Directors in 2024.
Directors’ remuneration - Audited
The remuneration of the Directors for qualifying services for the years ended 31 December 2023 and 31 December 2022 are shown
in the table below:
Salary and
fees
£’000
Benefits in
kind
£’000
Bonus
£’000
Pension
£’000
2023
£’000
2022
£’000
Executive Directors
Julian Baines
Stephen Young
Michael Salter
Marc Davies
Non-Executive Directors
Christopher Mills
Christian Rigg
Jennifer Winter
Carl Contadini
Total fees and emoluments
235
72
72
185
564
50
50
50
-
150
714
6
7
2
10
25
-
-
-
-
-
-
-
-
50
50
-
-
-
-
-
12
8
-
9
29
-
-
-
-
-
25
50
29
253
87
74
254
668
50
50
50
-
150
818
84
-
406
305
795
50
50
46
8
154
949
Mr Baines remuneration covers his service as both an Executive and as a Non-Executive Director. Of his total remuneration in
2023, £7,000 (2022: £25,000) related to his service as a Non- Executive Director. Mr Young’s remuneration covers the period
from his appointment in July 2023. Mr Salter resigned as a director on 6 February 2023. His remuneration covers the period
to 31 March 2023 when he left the Group. Mr Davies resigned as a director on 29 September 2023. His remuneration includes
payment in lieu for untaken holidays. No payments for loss of office were made to either Mr Salter or Mr Davies. Ms Winter’s
2022 remuneration covers the period from her appointment on 1 February 2022. Mr Contadini’s remuneration in 2022 covers his
service as a director up until his resignation, plus a payment in lieu of notice.
There have been no changes to the directors’ remuneration policy during the year.
Directors’ bonuses, share options and Long-Term Incentive Plan
No director holds options under any share option plan. On Mr Salter’s resignation as Chief Executive Officer on 6 February
2023, the cash settled share based incentive scheme lapsed. There is no long-term incentive plan in place. Bonus payments
are discretionary and determined by the Remuneration Committee. They are not subject to formal performance metrics or
targets. There are no formal arrangements in place for 2024.
Directors’ interests in the share capital of the Company are disclosed in the Directors’ Report on pages 21 to 23.
Approved by the Board on 20 March 2024 and signed on its behalf by:
Stephen Young
Chief Financial Officer
27
Annual Report 2023 | EKF Diagnostics Holdings plc1.0 Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements
Opinion
In our opinion, EKF Diagnostics Holdings Plc’s group financial statements and company financial statements (the “financial
statements”):
• give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2023 and of the
group’s profit and the group’s and company’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards as applied in
accordance with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated and
Company’s Statement of Financial Position as at 31 December 2023; the Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated and Company’s Statement of Cash Flows, Consolidated Statement of
Changes in Equity and Company Statement of Changes in Equity for the year then ended; and the notes to the financial
statements, comprising material accounting policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to other listed entities of public
interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
We have provided no non-audit services to the company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
• We performed full-scope audit procedures in respect of the Group’s largest trading subsidiaries in the USA and in
Germany, as well as the Parent Company, EKF Diagnostics Holdings plc, in the UK.
• Our audit procedures covered entities contributing 86% of the Group’s revenues and 79% of adjusted EBITDA for the
year ended 31 December 2023.
• We engaged component auditors for the audit of the Germany in-scope subsidiaries and we engaged a third party audit
firm for specified procedures reporting on the Cash and cash equivalents balance reported by the Russian subsidiary.
All other full-scope audit work was performed by the Group engagement team.
Key audit matters
• Recoverability of Group goodwill and the Company’s investment in subsidiaries (group and parent)
• Valuation of inventory (group)
• Classification of exceptional items (group)
Materiality
• Overall group materiality: £310,000 (2022: £413,700) based on 2.5% of the average Adjusted earnings before interest,
taxation, depreciation and amortisation (Adjusted EBITDA) over the past 2 years.
• Overall company materiality: £294,500 (2022: £350,000) based on 1% of total assets (capped by overall group
materiality).
• Performance materiality: £232,500 (2022: £310,275) (group) and £220,875 (2022: £262,500) (company).
28
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements (continuation)
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The valuation of inventory relevant to the company balance sheet, which was a key audit matter last year, is no longer included
because of the company ceasing UK trading activity during the year and as such the parent company has no inventory on its
balance sheet at year end. Otherwise, the key audit matters below are consistent with last year.
29
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements (continuation)
Key audit matter
How our audit addressed the key audit matter
Recoverability of Group goodwill and the Company’s investment in
subsidiaries (group and parent)
As at 31 December 2023, the Consolidated Statement of Financial
Position includes £30.2m (2022: £33.8m) of intangible assets, of
which £24.4m is goodwill (2022: £25.1m), and £5.8m is amortised
intangible assets (2022: £8.7m). The investments in subsidiaries
included in the Company Statement of Financial Position as at 31
December 2023 is £30.1m (2022: £30.8m). Goodwill in the Group
and the Company’s investment in subsidiaries are significant, and the
estimated recoverable amount of these balances is subjective due
to the inherent uncertainty involved in forecasting and discounting
future cash flows in order to obtain a Value In Use calculation.
The impairment reviews therefore include significant estimates
and judgements in respect of future growth rates, cash flows and
discount rates, particularly in relation to the Stanbio CGU where
there is reduced headroom. The sensitivity of these key assumptions
are detailed in note 19, Intangible assets and note 20, Investments
in subsidiaries.
Valuation of inventory (group)
The Group’s accounting policy is to state inventories at the lower
of cost and net realizable value. As at 31 December 2023, the
Consolidated Statement of Financial Position
includes gross
unimpaired inventories of £15.3m (2022: £17.2m), with total provisions
of £6.6m (2022: £7.8m) reducing this balance to the net realizable
value of £8.8m (2022: £9.4m). The significant level of provisions is
attributable to excess COVID-19 and other inventory throughout the
Group as a result of the Group’s decision to transition away from
these markets.
There is inherent uncertainty involved in estimating the net realizable
value of inventory and therefore this has been an area of significant
audit effort in the current year. See note 25 for further disclosures
relating to inventories.
Classification of exceptional items (group)
The Group’s accounting policy is to report items outside of income
and expense as exceptional items where they are of an unusual
or non-recurring nature. Exceptional items of £2.8m have been
disclosed on the face of the Consolidated Income Statement. These
primarily relate to business reorganisation and disposal costs as
the business restructures away from COVID-19 related activities
and focuses on the Point-of-Care and Life Science markets. We
focused on this area because exceptional items are material to the
Consolidated Income Statement and because there is a degree of
judgement in their classification. See note 8 for further disclosures
relating to exceptional items.
We obtained the cash flow forecasts supporting its assessment for
each CGU and performed the following procedures: 1) Assessed
the methodology used by management in accordance with IAS
36 ‘Impairment of assets’ and tested the mathematical accuracy
of the model; 2) Agreed forecast cash flows to board approved
budgets and evaluated and challenged key assumptions within
the cashflows and validated to supporting documentation,
where appropriate. We liaised with our internal valuation experts
to consider key inputs such as the discount rate; 3) Performed
sensitivity analysis including the effect of reasonably possible
changes in forecast cash flows and other assumptions to evaluate
the impact on the carrying value of the goodwill and investment
in subsidiaries. We also considered the impact of climate change
in performing our audit procedures in this area, particularly in
relation to the Group’s expectation that net zero initiatives will
be placed upon them by Government bodies, who will be the
“ultimate customer” of the Group. At present, the Group is at
an early stage in responding to these requirements and so there
are no commitments that are directly impacting the financial
reporting. Lastly, we assessed the adequacy of the Group and
Company’s disclosures regarding the goodwill and investment in
subsidiaries and the sensitivity of the outcome of the impairment
assessments to changes in key assumptions used in the model.
We concur with management’s assessment that no impairment
charge is required.
We tested the valuation of inventory by reviewing management’s
assumptions in assessing the carrying value of the remaining
COVID-19 and other inventory that the Group is transitioning
away from, including through review of consumption/sales
throughout 2023 and Q1 2024 and consideration of future orders
or plans in relation to these assets. We also performed sample
checks over the accuracy of management’s general provisions
based on ageing and/or expiry of products. We confirmed that
inventory was held at the lower of cost and net realizable value
by tracing a sample of items to recent purchase invoices, and
subsequently to the latest sales invoice. Based on the evidence
obtained, we concurred with management’s judgements in
assessing the valuation of inventory.
We tested the classification of exceptional items by examining
supporting information such as third-party contracts and the
supporting information for impairments. From the evidence
obtained, we concurred with management’s assessment
to classify and disclose these costs as separately reported
exceptional items, in line with the disclosed accounting policy.
30
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements (continuation)
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate.
The group has two main manufacturing centres in Germany and the USA, in addition to the Head Office function based in
the United Kingdom (UK). The UK also undertook some manufacturing activities and recognised external revenues but these
ceased in Q1 2023 as part of the Board’s decision to pivot away from COVID-19 activity. The central finance and accounting
team is located in the UK and is responsible for the financial reporting of EKF Diagnostics Holdings plc (the “Company”).
Stanbio Laboratory (“Stanbio”) and EKF-diagnostic GmbH (“EKF Germany”) are assessed as financially significant components
of the group, given the significant revenue earned by the group in these entities. A full-scope audit of these entities’ financial
information has been carried out. The audit of Stanbio and the Company was conducted by the group engagement team
and component auditors were engaged to audit EKF Germany. The Company audit was scoped in accordance with our
company materiality as capped by the allocation of component materiality for the purposes of the group audit. Our audit
addressed components making up 86% of the group’s 2023 revenues and 79% of adjusted EBITDA, with desktop review
procedures undertaken over all non-significant components. Due to the significance of the balance compared to the Group
total, we have also engaged a third party auditor in Russia to perform specified procedures reporting over the cash balance.
Where component or third party auditors were engaged, we adopted procedures to ensure we were sufficiently involved in
their audits. These included discussions with overseas audit teams during the planning, fieldwork and reporting phases, the
issuance of comprehensive audit instructions and a review of key working papers in key risk areas.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the
group’s and company’s financial statements, and we remained alert when performing our audit procedures for any indicators
of the impact of climate risk. Our procedures did not identify any material impact as a result of climate risk on the group’s
and company’s financial statements.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£310,000 (2022: £413,700).
£294,500 (2022: £350,000).
Financial statements – group
Financial statements – company
How we determined it
Rationale for benchmark applied
1% of total assets (capped by overall group
materiality)
We determined our materiality based
on total assets, which is more applicable
than a performance-related measure as
the company is primarily an investment
holding company for the group and has
not been revenue generating since early
2023. The rationale is consistent with the
previous year.
2.5% of the average Adjusted earnings before
interest, taxation, depreciation and amortisation
(Adjusted EBITDA) over the past 2 years
Based on the benchmarks used in the Annual Re-
port, a profit-based measure has been used which
is a primary measure used by the shareholders in
assessing the performance of the group. There has
been a change in basis in the current year material-
ity, utilising Adjusted EBITDA due to the impact of
transitory issues on profit before tax, that are not
considered to reflect the past or future performance
of the group, and to align with the focus of users of
the financial statements on the key Adjusted EBITDA
metric. A 2-year average of the benchmark has been
applied in calculating materiality due to the 2023 im-
pact of investing in the South Bend site and finalising
the group’s transition away from COVID-19, which is
considered to suppress the underlying performance
of the group. A 3 year benchmark was not considered
appropriate as the 2021 year end contained substan-
tial COVID-19 profits that are no longer representa-
tive of the on-going business.
31
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements (continuation)
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality.
The range of materiality allocated across components was between £149,000 and £298,000. Certain components were
audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to £232,500
(2022: £310,275) for the group financial statements and £220,875 (2022: £262,500) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above
£15,500 (group audit) (2022: £20,685) and £14,725 (company audit) (2022: £17,500) as well as misstatements below those
amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern
basis of accounting included:
•
•
•
•
•
Verifying the integrity and mathematical accuracy of management’s model as well as agreeing underlying cash flow
projections to management approved forecasts.
Assessing management’s historic forecasting accuracy by obtaining management information for the financial
performance year to date.
Evaluating and challenging the reasonableness of the key assumptions in management’s model, and agreeing the
data and assumptions to supporting third party information, where available.
Evaluating and assessing the severe but plausible downside scenarios modelled and confirming compliance with
financial covenants under both the base case and downside scenarios.
Reviewing and challenging the basis of preparation disclosure presented by the directors in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and
the company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic report and Report of the Directors, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
32
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements (continuation)
Strategic report and Report of the Directors
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Report of the Directors for the year ended 31 December 2023 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic report and Report of the Directors.
,
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or the company or to cease operations, or have no realistic alternative but
to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to patent protection, product safety (including but not limited to the US Food and Drug Administration
regulation), specific international sanctions and employment legislation (including health & safety regulation), and we
considered the extent to which non-compliance might have a material effect on the financial statements. We also considered
those laws and regulations that have a direct impact on the financial statements such as tax legislation and the Companies
Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements
(including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal
entries to manipulate financial results and potential management bias in accounting estimates. The group engagement team
shared this risk assessment with the component auditors so that they could include appropriate audit procedures in response
to such risks in their work. Audit procedures performed by the group engagement team and/or component auditors included:
•
Enquiry of group management and global head of quality and regulatory assurance around known or suspected instances
of non-compliance with laws and regulations and fraud;
•
Review of minutes of meetings of those charged with governance;
• Challenging assumptions made by management in its significant accounting estimates, in particular in relation to the
impairment assessment and inventory provisioning; and
•
Identifying and testing the validity of journal entries based on our assessment of risk, in particular any journal entries
posted with unusual account combinations and consolidation journals.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
33
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Independent auditors’ report to the members of EKF Diagnostics Holdings Plc
Report on the audit of the financial statements (continuation)
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample
is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands
it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the company, or returns adequate for our audit have not
been received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Stuart Couch (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Cardiff
20 March 2024
34
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Consolidated Income Statement
for the year ended 31 December 2023
Continuing operations
Revenue
Cost of sales
Exceptional items – other charged to cost of sales
Gross profit
Administrative expenses
Exceptional items – impairment of assets
Exceptional items – other
Other income
Operating profit/(loss)
Depreciation and amortisation
Share-based payments
Exceptional items
EBITDA before exceptional items and share-based payments
Finance income
Finance costs
Profit/(loss) before income tax
Income tax credit/(charge)
Profit/(loss) for the year
Profit/(loss) attributable to:
Owners of the parent
Non-controlling interest
Notes
5
6
8
6
8
8
7
6
8
5
13
13
14
Earnings/(loss) per Ordinary Share attributable to the owners of the parent during the
year
Basic
Diluted
15
15
The notes on pages 41 to 79 are an integral part of these consolidated financial statements.
2023
£’000
52,611
(28,175)
(577)
23,859
(19,680)
(961)
(1,295)
158
2,081
(5,472)
2
(2,833)
10,384
125
(75)
2,131
600
2,731
2,352
379
2,731
Pence
0.52
0.52
2022
£’000
66,635
(35,823)
(6,774)
24,038
(23,177)
(10,384)
(367)
919
(8,971)
(6,658)
308
(17,525)
14,904
131
(102)
(8,942)
(634)
(9,576)
(10,101)
525
(9,576)
Pence
(2.21)
(2.21)
35
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Consolidated Statement of Comprehensive Income
for the year ended 31 December 2023
Profit/(loss) for the year
Other comprehensive income/(loss)
Note
2023
£’000
2,731
2022
£’000
(9,576)
Items that will not be reclassified to profit or loss
Changes in fair value of equity instruments at fair value through other
comprehensive income/(loss) (net of tax)
33
Items that may be subsequently reclassified to profit or loss
Currency translation differences on translation of foreign operations
Other comprehensive income/(loss) (net of tax)
Total comprehensive loss for the year
Attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss for the year
489
(6,096)
(3,564)
(3,075)
(344)
(438)
94
(344)
6,811
715
(8,861)
(9,420)
559
(8,861)
Items stated above are disclosed net of tax. The income tax relating to each component of other comprehensive
(loss)/income is disclosed in note 14.
The notes on pages 41 to 79 are an integral part of these consolidated financial statements.
36
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Consolidated and Company’s Statement of Financial Position
As at 31 December 2023
Assets
Non-current assets
Property, plant and equipment
Right-of-use asset
Investment property
Intangible assets
Investments in subsidiaries
Investments
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Current income tax receivable
Cash and cash equivalents (including restricted cash of £1,706,000 (2022: £2,366,000))
Total current assets
Total assets
Equity attributable to owners of the parent
Share capital
Share premium
Other equity - Ordinary shares held in treasury
Other reserves
Foreign currency reserves
Retained earnings
Non-controlling interest
Total equity
Liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred consideration
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Lease liabilities
Current income tax liabilities
Borrowings
Total current liabilities
Total liabilities
Total equity and liabilities
Note
17
18
17
19
20
22
30
25
24
26
31
31
31
33
28
18
29
30
27
18
28
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
23,744
20,435
1,031
-
1,279
-
30,224
33,772
20
-
1,193
708
231
136
1,232
883
-
276
18
-
1,119
925
30,149
30,831
276
-
1,119
-
55,293
57,530
32,346
34,432
8,766
6,787
2,277
7,726
25,556
80,849
4,537
7,375
12
80
6,356
48,757
67,117
1,100
68,217
-
618
-
2,517
3,135
5,512
495
504
2,986
9,497
12,632
80,849
9,434
10,739
10
11,578
31,761
89,291
4,549
7,375
-
(629)
9,590
52,461
73,346
1,177
74,523
-
537
-
2,493
3,030
8,288
873
2,440
137
11,738
14,768
89,291
-
2,013
-
796
2,809
35,155
4,537
7,375
12
80
-
6,173
18,177
-
68
2,332
-
653
3,053
37,485
4,549
7,375
-
(670)
-
11,380
22,634
-
18,177
22,634
-
-
-
-
-
-
40
-
-
40
13,952
14,644
40
-
2,986
16,978
16,978
35,155
167
-
-
14,811
14,851
37,485
The notes on pages 41 to 79 are an integral part of these financial statements.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Parent Company income statement. The
profit for the Parent Company for the year was £846,000 (2022: loss of £9,565,000).
The financial statements were approved and authorised for issue by the Board on 20 March 2024 and signed on its behalf by:
37
Julian Baines
Executive Chair
EKF Diagnostics Holdings plc
Registered no: 4347937
Stephen Young
Chief Financial Officer
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Consolidated and Company’s Statement of Financial Position
As at 31 December 2023
Consolidated and Company’s Statement of Cash Flows
for the year ended 31 December 2023
Cash flow from operating activities
Cash generated from operations
Interest received
Interest received
Income tax paid
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
Note
36
8,823
12,655
1,485
9,470
125
(47)
85
(46)
(2,590)
(3,006)
-
(7)
(21)
Net cash generated from operating activities
6,311
9,688
1,457
Cash flow from investing activities
Payment for investments
Payment for property, plant and equipment (PPE)
Payment for intangibles
Payment for acquisition of subsidiaries, net of cash acquired
Proceeds from sale of PPE
Proceeds from sale of investments
-
(6,598)
(377)
-
-
1,333
(2,930)
(4,434)
(1,394)
(403)
229
-
36
Net cash (used in)/generated from investing activities
(5,642)
(8,932)
Cash flow from financing activities
Payment for shares bought back
Dividends paid to company shareholders
Repayments of borrowings
Proceeds from new borrowings
Fees for new borrowing
Principal elements of lease payments
Dividend payment to non-controlling interest
31
-
(5,445)
(137)
3,000
(14)
(879)
(171)
(3,896)
(5,459)
(613)
-
-
(1,071)
-
-
(8)
-
-
-
1,333
1,325
-
(5,445)
-
3,000
(14)
(167)
-
10
-
(539)
8,941
(2,930)
(102)
(371)
(403)
-
-
(3,806)
(3,896)
(5,459)
-
-
-
(191)
-
Net cash used in financing activities
(3,646)
(11,039)
(2,626)
(9,546)
Net (decrease)/increase in cash and cash equivalents
(2,977)
(10,283)
Cash and cash equivalents at beginning of year
Exchange (losses)/gains on cash and cash equivalents
Cash and cash equivalents at end of year
26
11,578
(875)
7,726
20,341
1,520
11,578
156
653
(13)
796
(4,411)
4,879
185
653
Cash and cash equivalents totalling £1,706,000 (2022: £2,366,000) are held by the Group’s 60% owned subsidiary company in Russia. As a result of
action by the Russian Government following international sanctions being imposed on Russia, access to this cash is currently restricted.
38
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Consolidated
At 1 January 2022
Comprehensive (expense)/income
(Loss)/profit for the year
Other comprehensive (expense)/
income
Changes in fair value of equity
instruments at fair value through
other comprehensive income
Deferred tax on the above
Currency translation differences
Total comprehensive
(expense)/income
Transactions with owners
Cancellation of ordinary shares
Reserve transfer
Dividends to owners
Total distributions to owners
Note
Share
capital
£’000
Share
premium
account
£’000
4,639
7,375
-
-
-
(90)
-
-
(90)
16
-
-
-
-
-
-
-
-
At 31 December 2022
4,549
7,375
Comprehensive income/(expense)
Profit for the year
Other comprehensive
income/(expense)
Changes in fair value of equity
instruments at fair value through
other comprehensive income
Reserves transfer
Currency translation differences
Total comprehensive
income/(expense)
Transactions with owners
Ordinary shares acquired
Reserve transfer
Dividends to non-controlling
interest
Dividends to owners
Share-based payment reserve
-
-
-
-
(12)
-
-
-
-
Total distributions to owners
(12)
-
-
-
-
-
-
-
-
-
-
At 31 December 2023
4,537
7,375
Other
equity
£’000
Other
reserves
£’000
Foreign
currency
reserve
£’000
Retained
earnings
£’000
Non-
controlling
interest
£’000
Total
£’000
Total
equity
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12
-
-
-
-
12
12
5,033
2,813
74,264
94,124
618
94,742
-
-
(10,101)
(10,101)
525
(9,576)
(7,598)
1,502
-
-
-
-
(7,598)
1,502
-
-
(7,598)
1,502
-
6,777
(1)
6,776
34
6,810
(6,096)
6,777
(10,102)
(9,421)
559
(8,862)
90
344
-
434
-
-
-
-
(3,896)
(3,896)
(344)
-
(7,461)
(7,461)
(11,701)
(11,357)
-
-
-
-
(3,896)
-
(7,461)
(11,357)
(629)
9,590
52,461
73,346
1,177
74,523
-
489
262
-
-
-
2,352
2,352
379
2,731
-
489
(262)
-
-
-
489
-
(1)
(3,234)
(44)
(3,279)
(285)
(3,564)
750
(3,234)
2,046
(438)
94
(344)
-
(41)
-
-
-
(41)
-
-
-
-
-
-
(344)
(344)
41
-
-
-
-
-
(344)
-
(171)
(171)
(5,445)
(5,445)
(2)
(2)
-
-
(5,445)
(2)
(5,750)
(5,791)
(171)
(5,962)
80
6,356
48,757
67,117
1,100
68,217
39
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Company Statement of Changes in Equity
For the year ended 31 December 2023
Company
At 1 January 2022
Comprehensive expense
Loss for the year
Changes in fair value of equity instruments at fair
value through other comprehensive expense
Deferred tax on the above
Total comprehensive expense
Transactions with owners
Cancellation of ordinary shares
Reserve transfer
Dividends to owners
Total contributions by and distributions to owners
At 31 December 2022
Comprehensive (expense)/income
Profit for the year
Changes in fair value of equity instruments at fair
value through other comprehensive income
Reserves transfer
Currency translation differences
Total comprehensive income
Transactions with owners
Ordinary shares acquired
Share-based payment reserve
Dividends to owners
Total contributions by and distributions to owners
At 31 December 2023
Share
capital
£’000
4,639
Share
premium
£’000
7,375
-
-
-
-
(90)
-
-
(90)
4,549
-
-
-
-
-
(12)
-
-
(12)
4,537
-
-
-
-
-
-
-
-
7,375
-
-
-
-
-
-
-
-
-
7,375
Other
equity
£000
Other
reserves
£’000
Retained
earnings
£’000
Total
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12
-
-
12
12
4,992
32,646
49,652
-
(9,565)
(9,565)
(7,598)
1,502
-
-
(7,598)
1,502
(6,096)
(9,565)
(15,661)
90
344
-
(3,896)
(3,896)
(344)
(7,461)
-
(7,461)
434
(11,701)
(11,357)
(670)
11,380
22,634
-
489
262
(1)
750
-
-
-
-
846
-
(262)
-
846
489
-
(1)
584
1,334
(344)
(2)
(344)
(2)
(5,445)
(5,445)
(5,791)
(5,791)
80
6,173
18,177
40
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
1. General information
EKF Diagnostics Holdings Plc is a company incorporated in England and Wales and domiciled in the United Kingdom. The
Company is a public limited company, which is listed on the Alternative Investment Market of the London Stock Exchange.
The address of the registered office is Avon House, 19 Stanwell Road, Penarth, Cardiff CF64 2EZ.
The principal activity of the Group is the development, manufacture and supply of products and services into the in-vitro
diagnostic (IVD) market place. The Group has presence in the UK, USA, Germany, and Russia, and sells throughout the world
including Europe, the Middle East, the Americas, Asia, and Africa.
The financial statements are presented in British Pounds Sterling, the currency of the primary economic environment in which
the Company’s headquarters operates. The Group comprises EKF Diagnostics Holdings Plc and its subsidiary Companies as
set out in note 20.
The registered number of the Company is 4347937.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. The
policies have been consistently applied throughout all years presented, unless otherwise stated.
Basis of preparation
The financial statements of EKF Diagnostics Holdings Plc and its Group have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation
of certain financial liabilities at fair value through profit and loss and certain financial assets measured at fair value through
other comprehensive income.
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements
are disclosed in note 4.
(a) New standards, amendments and interpretations adopted by the Group.
The group has applied or considered the following standards and amendments for the first time for their annual reporting
period commencing 1 January 2023:
•
Insurance Contracts – IFRS 17
• Definition of Accounting Estimates – Amendments to IAS 8
• Disclosure of Accounting Policies – Amendments to IAS 1
• Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction – Amendments to IAS 12
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
(b) New standards, amendments and interpretations issued but not effective for the financial year beginning
1 January 2023 and not early adopted.
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on
or after 1 January 2024, and have not been applied in preparing these financial statements. The Group does not anticipate a
material impact within its financial statements as a result of the applicable standards and interpretations.
Going concern
The Directors have considered the applicability of the going concern basis in the preparation of these financial statements.
This included the review of internal budgets and financial results which show that, even taking into account severe but
plausible changes in financial performance, the Group will be able to meet its liabilities as they fall due throughout the going
concern period. The directors note the Company has net current liabilities as at 31 December 2023 and at 31 December 2022,
however the majority of the current creditors are in the form of intercompany creditors to subsidiary companies and the
timing of settlements is within the control of the company.
The Directors have modelled a range of sensitivities from the base internal Budget including lower revenues, and continued
restrictions in Russia in relation to accessing cash. In addition, during 2023 the Group has undertaken cost reductions, and
secured a committed loan of £3m from HSBC. It also retains access to £3m of funding from North Atlantic Smaller Companies
Investment Trust, which is available until March 2026.
Considering the range of sensitivities which account for a severe downturn versus expectation in 2024, plus the range of
41
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
mitigation options available the business demonstrates sufficient headroom giving the Directors confidence that the business
can continue to meet its obligations as they fall due, even under the worst-case scenarios, for at least 12 months from the date
of this report. Accordingly, the directors are satisfied they can prepare the accounts on a going concern basis.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings.
Subsidiaries are all entities over which the Group has the power to govern their financial and operating policies generally
accompanying a shareholding of more than fifty per cent of the voting rights. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration agreement. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an
acquisition by acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the
non-controlling interest’s proportionate share of the acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date
fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a
bargain purchase, the difference is recognised directly in the income statement.
Investments in subsidiaries are accounted for at cost less impairment.
Associates are all entities over which the group has significant influence but not control or joint control.
Inter-Company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised
losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Group.
Foreign currency translation
(a) Functional and presentational currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in British Pounds Sterling, which is the Company’s functional and presentational currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement within ‘administrative expenses’.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that
have a functional currency different from the presentational currency are translated into the presentational currency as follows:
•
•
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
income and expenses for each income statement are translated at average exchange rates; and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken
to other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were
recorded in equity are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Executive Directors who make strategic decisions. The information used to
assess performance during 2023 is by geography.
42
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Government grants
Government grants receivable in connection with expenditure on property, plant and equipment are recognised at their
fair value where there is reasonable assurance that the grant will be received and the Group will comply with all attached
conditions. They are accounted for as deferred income, which is credited to the income statement over the expected useful
economic life of the related assets, on a basis consistent with the depreciation policy. Revenue grants for the reimbursement
of costs charged to the income statement are credited to the Income Statement in the year in which the costs are incurred.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any provision for impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the asset and bringing the asset to its
working condition for its intended use.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only where
it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be
measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged
to the income statement during the financial period in which they are incurred. Any borrowing costs associated with qualifying
property plant and equipment are capitalised and depreciated at the rate applicable to that asset category.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to its
residual values over their estimated useful lives, as follows
2%–2.5%
Buildings
Leasehold improvements 20% or over the life of the lease if under 5 years
Fixtures and fittings
Plant and machinery
Motor vehicles
16.7%–33.3%
6.7%–33.3%
25%
From 2023 certain large scale fermenters are depreciated over their estimated life of 15 years.
Assets under construction are stated at historical cost. Depreciation commences when the asset is placed into service.
The assets’ residual values and useful economic lives are reviewed regularly, and adjusted if appropriate, at the end of each
reporting period.
An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on the disposal of assets are determined by comparing the proceeds with the carrying amount and are
recognised in administration expenses in the income statement.
Investments in subsidiaries
Occassionally the company performs group restructuring activities which involve the transfer of assets to other subsidiary
companies. Where no value is being lost to the Group, the policy is to transfer the investment value in between subsidiaries in
line with the conceptual framework. There is no effect on consolidation as the investment values are eliminated.
Investment property
The Company adopts the cost model and shows the investment property at cost less accumulated depreciation and any
accumulated impairment losses. As the property is occupied by a subsidiary, it does not meet the definition of an investment
property for the Group.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of the acquisition. Goodwill on acquisitions of subsidiaries is included in ‘intangible
assets’. Goodwill has an infinite useful life and is tested annually for impairment and carried at cost less accumulated impairment
losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
43
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose, identified according to operating segment.
(b) Trademarks, trade names and licences
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date. Trademarks and licences have a finite useful life and are
carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of
trademarks and licences over their estimated useful lives of between 8 and 12 years and is charged to administrative expenses
in the income statement.
(c) Customer relationships
Contractual customer relationships acquired in a business combination are recognised at fair value at the acquisition date. The
asset represents the value at acquisition of long term relationships with customers. The contractual customer relationships
have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-
line method over the expected life of the customer relationship of between 5 and 15 years and is charged to administrative
expenses in the income statement.
(d) Trade secrets
Trade secrets, including technical know-how, operating procedures, methods and processes, acquired in a business
combination are recognised at fair value at the acquisition date. Trade secrets have a finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trade
secrets over their estimated useful lives of between 6 and 15 years and is charged to administrative expenses in the income
statement.
(e) Development costs
Development costs acquired in a business combination are recognised at fair value at the acquisition date. They represent
the value at acquisition of expenditure incurred on the development of new or substantially improved products or processes.
Development costs have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated
using the straight-line method over their estimated useful lives of 15 years and is charged to administrative expenses in the
income statement.
Expenditure incurred on the development of new or substantially improved products or processes is capitalised, provided
that the related project satisfies the criteria for capitalisation, including the project’s technical feasibility and likely commercial
benefit. All other research and development costs are expensed as incurred.
Such internally generated development costs are amortised over the estimated useful life of the products with which
they are associated, currently 3 to 10 years. Amortisation commences when a new product is in commercial production.
The amortisation is charged to administrative expenses in the income statement. The estimated remaining useful lives of
development costs are reviewed at least on an annual basis.
The carrying value of capitalised development costs is reviewed for potential impairment at least annually and if a product
becomes unviable and an impairment is identified the deferred development costs are immediately charged to the income
statement.
(f) Software and website costs
Expenditure incurred on the development of new or substantially improved software is capitalised, provided that the project
satisfies the criteria for capitalisation, including technical feasibility and likely commercial benefit. All other software costs
are expensed as incurred.
Software costs are amortised over their estimated useful life, currently 6 – 10 years. Amortisation commences when software is
in commercial use. The amortisation is charged to administrative expenses in the income statement. The estimated remaining
useful life of software is reviewed at least on an annual basis.
The carrying value of capitalised software costs is reviewed for potential impairment at least annually and if an impairment is
identified the costs are immediately charged to the income statement.
Impairment of non-financial assets
Assets that have an indefinite life such as goodwill are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying
amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell, and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have
not been adjusted.
44
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows. Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially
to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-
generating unit.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in the prior
period. A reversal of an impairment loss is recognised in the income statement immediately. If goodwill is impaired however,
no reversal of the impairment is recognised in the financial statements.
Financial assets
Classification
The group classifies its financial assets in the following measurement categories:
• those to be measured at amortised cost; and
• those to be measured subsequently at fair value (either through OCI or through profit or loss);
(a) Financial assets at amortised cost
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and
interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the
effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented
in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line
item in the statement of profit or loss.
(b) Financial assets at fair value through profit or loss
The Group classifies the following financial assets at fair value through profit or loss (FVPL):
•
debt investments that do not qualify for measurement at either amortised cost or fair value through Other
Comprehensive Income
• equity investments that are held for trading, and
•
equity investments for which the entity has not elected to recognise fair value gains and losses through Other
Comprehensive Income.
(c) Financial assets at fair value through Other Comprehensive Income
Financial assets at fair value through Other Comprehensive Income comprise equity securities that are not held for trading and
which the Group has irrevocably elected at initial recognition to recognise in this category. The Group considers this category
to be more relevant for assets of this type. Purchases and sales of these assets are valued at the date of trade.
Inventories
Inventories and work in progress are stated at the lower of cost and net realisable value. Cost is calculated on a weighted
average cost basis and includes raw materials, direct labour, other direct costs and attributable production overheads, where
appropriate. Net realisable value represents the estimated selling price less all estimated costs of completion and applicable
selling costs. Where necessary, provision is made for slow-moving and obsolete inventory. Inventory on consignment and
their related obligations are recognised in current assets and payables respectively.
Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
Other than in the case of certain intercompany receivables, and large corporate customers, they are generally due for
settlement within 30 days and therefore are all classified as current. Trade receivables are initially recognised at fair value,
being the original invoice amount, and subsequently measured at amortised cost less provision for impairment. The group
applies the IFRS 9 simplified approach to measuring expected credit losses. To measure the expected credit losses, trade
receivables have been grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the historical credit losses from past experience and are adjusted to reflect current
and forward-looking information on factors affecting the ability of the customers to settle the receivables, where applicable
the amount of the loss is recognised in the income statement within administrative expenses. When a trade receivable is
uncollectible it is written off against the allowance account. Subsequent recoveries of amounts previously written off are
credited against administrative expenses in the income statement.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original
maturity of less than three months, reduced by overdrafts.
For the purposes of the consolidated cash flow statement, cash and cash equivalents consist of cash and short-term deposits
as defined above net of outstanding bank overdrafts where there is a right of offset.
45
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Share capital
Ordinary Shares are classified as equity. Proceeds in excess of the nominal value of shares issued are allocated to the share
premium account and are also classified as equity. Incremental costs directly attributable to the issue of new Ordinary Shares
or options are deducted from the share premium account.
Where the Company purchases any of the Company’s equity instruments, for example as the result of a share buyback, the
consideration paid, including any directly attributable incremental costs, is deducted from equity attributable to the owners
of the company as treasury shares until the shares are cancelled or reissued. Where the shares are subsequently cancelled,
the nominal value of shares is deducted from the value of equity and credited to the Capital Redemption reserve. The amount
paid is debited to reserves.
Financial liabilities
Debt is measured at fair value, being net proceeds after deduction of directly attributable issue costs, with subsequent
measurement at amortised cost with the exception of deferred equity consideration which is categorised as a financial liability
at fair value through profit and loss. Debt issue costs are recognised in the income statement over the expected term of such
instruments at a constant rate on the carrying amount.
Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised
initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised initially at the fair value of proceeds received, net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost. Borrowings are classified as current liabilities unless the Group has an unconditional
right to defer settlement of the liability for at least 12 months after the balance sheet date.
Borrowing costs are expensed in the consolidated Group income statement under the heading ‘finance costs’. Arrangement
and facility fees together with bank charges are charged to the income statement under the heading ‘administrative expenses’.
Current and deferred income tax
The tax expense comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it
relates to items recognised in other comprehensive income where the associated tax is also recognised in other comprehensive
income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet
date in the countries where the Company and its subsidiaries operate and generate taxable income.
Management evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is recognised, using the liability method, on all temporary differences at the balance sheet date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are
recognised in respect of all temporary differences except where the deferred tax liability arises from the initial recognition of
goodwill in business combinations.
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and tax
losses, to the extent that they are regarded as recoverable. They are regarded as recoverable where, on the basis of available
evidence, there will be sufficient taxable profits against which the future reversal of the underlying temporary differences can
be deducted.
The carrying value of the amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all, or part, of the tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on the tax rates (and tax laws) that have been substantively enacted at the balance
sheet date.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
Provisions
Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of a past
event and it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably
measured.
46
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Leases
The Group and Company’s leasing policy is described in Note 18.
Deferred consideration
Deferred consideration is recognised at fair value. Where the value of deferred consideration is based on a future event, the
amounts of future payments are discounted to their present values at the date of completion. The discount rate used is the
entity’s incremental borrowing rate being the rate at which similar borrowing could be obtained from an independent financier
under comparable terms and conditions. Deferred consideration is discounted to take account of the time value of money at
rates based on those used for the valuation of related intangible assets.
Employee benefits
(a) Pension obligations
Group companies operate various pension schemes all of which are defined contribution plans. A defined contribution plan
is a pension plan under which the Group pays fixed contributions into a separate entity with the pension cost charged to the
income statement as incurred. The Group has no further obligations once the contributions have been paid.
(b) Share-based compensation
Until 2023 the Group operated an equity-settled, share-based compensation plan, under which the Group receives services
from employees and others as consideration for equity instruments of the Group. Equity-settled share-based payments are
measured at fair value at the date of grant and are expensed over the vesting period based on the number of instruments that
are expected to vest. For plans where vesting conditions are based on share price targets, the fair value at the date of grant
reflects these conditions. Where applicable the Group recognises the impact of revisions to original estimates in the income
statement, with a corresponding adjustment to equity for equity-settled schemes. Fair values are measured using appropriate
valuation models, taking into account the terms and conditions of the awards.
When the share-based payment awards are exercised, the Company issues new shares. The proceeds received net of any
directly attributable transaction costs are credited to share capital (nominal value) and share premium.
(c) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are expected
to be settled wholly within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected
to be paid when the liabilities are settled. The liabilities are presented as current liabilities in the balance sheet.
National insurance on share options
To the extent that the share price at the balance sheet date is greater than the exercise price on options granted under unapproved
share-based payment compensation schemes, provision for any National Insurance Contributions has been based on the prevailing
rate of National Insurance. The provision is accrued over the performance period attaching to the award.
Revenue recognition
Revenue is accounted for in accordance with the principles of IFRS 15, which has been applied as follows:
(a) Sale of goods
Revenue for the sale of medical diagnostic instruments and reagents is measured at the fair value of the consideration received
or receivable and represents the invoiced value for the sale of the goods net of sales taxes, rebates and discounts. Revenue from
the sale of goods is recognised when control of the products has transferred which is when a Group Company has delivered
products to the customer, the customer has accepted delivery of the products and collectability of the related receivables is
reasonably assured. A receivable is recognised when the goods are delivered as this is the point in time that the consideration
is unconditional because only the passage of time is required before the payment is due. Where contracts contain multiple
deliverables, and the volume of each deliverable can be determined with reasonable certainty, then the transaction price will be
allocated to each performance obligation based on the expected cost of each item.
(b) Sale of services
Revenue for the sale of services is measured at the fair value of the consideration received or receivable and represents
the invoiced value for the sale of the services net of sales taxes, rebates and discounts. Revenue from the sale of services
is recognised when a Group Company has completed the services and collectability of the related receivables is reasonably
assured. Services sold mainly consist of repairs, shipping and handling, as well as testing carried out by ADL Health prior to
its disposal.
Goods are often sold with retrospective volume discounts based on aggregate sales over a period. Revenue from these sales
is recognised based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is
used to estimate and provide for the discounts, using the expected value method, and revenue is only recognised to the extent
that it is highly probable that a significant reversal will not occur. A refund liability (included in trade and other payables)
is recognised for expected volume discounts payable to customers in relation to sales made until the end of the reporting
period. The group’s obligation to repair or replace faulty products under the standard warranty terms is recognised as an
accrual.
47
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset’s net carrying amount.
Dividend distribution
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial statements in the
period in which the dividends are approved by the Company’s shareholders. Interim dividends are recognised when paid.
Distributions in specie are recognised at the fair value of the assets distributed.
Other income
Other income includes grant income passed through income where this is permitted by the relevant jurisdiction.
Exceptional items
These are items of an unusual or non-recurring nature incurred by the Group and include transactional costs and reorganisation
costs.
3. Financial risk management
Financial risk factors
The Group and Company’s activities expose it to a variety of financial risks: market risk (foreign exchange risk and cash flow
interest rate risk), credit risk, liquidity risk, capital risk and fair value risk. The Group and Company’s overall risk management
programme focuses on the unpredictability of the financial markets and seeks to minimise the potential adverse effects on the
Group and Company’s financial performance. The Group and Company do not use derivative financial instruments to hedge
risk exposures.
Risk management is carried out by the head office finance team. It evaluates and mitigates financial risks in close co-operation
with the Group’s operating units. The Board provides principles for overall risk management whilst the head office finance
team provides specific policy guidance for the operating units in terms of managing foreign exchange risk, credit risk and cash
and liquidity management.
(a) Market risk
(i) Foreign exchange – cash flow risk
The Group and Company’s presentational currency is sterling although the Group operates internationally and is exposed to
foreign exchange risk arising from various currency exposures, primarily between GBP, USD, the Euro, and Rouble, such that
the Group’s cash flows are affected by fluctuations in the rate of exchange between GBP and the aforementioned foreign
currencies.
This exposure is managed by a natural currency hedge as the Group’s operating subsidiaries cost base is also denominated
mainly in USDs, Euros, and Roubles, as the Group has subsidiary businesses located in the USA, Germany, and Russia.
Management do not use derivative financial instruments to mitigate the impact of any residual foreign currency exposure not
mitigated by the natural hedge within the business model. The Group and Company do not speculate in foreign currencies and
no operating Company is permitted to take unmatched positions in any foreign currency.
(ii) Foreign exchange – Fair value risk
Translation exposures that arise on converting the results of overseas subsidiaries are not hedged. Net assets held in foreign
currencies are hedged wherever practical by matching borrowings in the same currency. The principal exchange rates used by
the Group and Company in translating overseas profits and net assets into GBP are set out in the table below.
Rate compared to GBP
Euro
Russian Rouble
US Dollar
Average
rate
2023
1.150
105.774
1.244
Average
rate
2022
1.172
86.966
1.242
Year end
rate
2023
1.153
113.796
1.273
Year end
rate
2022
1.128
88.98
1.210
As a guide to the sensitivity of the Group’s results to movements in foreign currency exchange rates, a one per cent movement
in the Euro, US Dollars and Russian Rouble to Sterling rate would impact annual earnings by approximately £64,000 (2022:
48
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
£76,000), £61,000 (2022: £89,000), and £11,000 (2022: £15,000) respectively. In the case of the Russian Rouble, a 15%
movement would impact annual earnings by £140,000. The Company’s results are not sensitive to changes in exchange rates.
(iii) Cash flow and fair value interest rate risk
The Group has interest-bearing assets in the form of cash and cash equivalents and interest-bearing liabilities which relate to
borrowings and finance lease obligations mainly in the Group’s German subsidiary. Interest rates on cash and cash equivalents
are floating whilst interest rates on certain borrowings have been fixed and therefore expose the Group to fair value interest
rate risk. The Group and Company do not speculate on future changes in interest rates.
Where overseas acquisitions are made, it is the Group’s policy to arrange any borrowings required in local currency.
It is the Group and Company’s policy not to trade in financial instruments. The Group and Company do not use interest rate
swaps.
(b) Credit risk
Credit risk is managed on a Group basis, except for credit risk relating to accounts receivable balances. Each local subsidiary
and operating business unit is responsible for managing and analysing the credit risk for each of their new clients before
standard payment and delivery terms and conditions are offered. It is the Group and Company policy to obtain deposits
or require payment in advance from customers where possible, particularly overseas customers. In addition if possible the
Group will seek confirmed letters of credit for the balances due. Credit risk is managed at the operating business unit level
and monitored at the Group level to ensure adherence to Group policies. If there is no independent rating, local management
assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.
Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The utilisation
of credit limits is regularly monitored. Where extended credit is granted, this is agreed by the Chief Financial Officer. Credit
insurance is taken out where appropriate and cost effective.
Credit risk also arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial
institutions, as well as credit exposures to customers.
(c) Liquidity risk
Cash flow forecasting is performed in the individual operating entities of the Group and is aggregated by Group finance.
Group finance monitors cash and cash flow forecasts and it is the Group and Company’s liquidity risk management policy
to maintain sufficient cash and available funding through an adequate amount of cash and cash equivalents and committed
credit facilities from its bankers. Due to the dynamic nature of the underlying businesses, the head office finance team aims to
maintain flexibility in funding by keeping sufficient cash and cash equivalents available to fund the requirements of the Group
and Company.
The Group’s policy in relation to the finance of its overseas operations requires that sufficient liquid funds be maintained in
each of its territory subsidiaries to support short and medium-term operational plans. Where necessary, short-term funding
is provided by the holding company. In the UK, the management of liquid funds in excess of operational needs are controlled
centrally. Typically excess funds are placed as short-term deposits, to provide a balance between interest earnings and
flexibility, where the benefit outweighs the administrative cost.
The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the
remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
Rate compared to GBP
At 31 December 2023:
Borrowings
Lease liabilities
Trade and other payables
At 31 December 2022:
Borrowings
Lease liabilities
Trade and other payables
Less than
one year
£’000
Between 1 and
2 years
£’000
Between 2 and
5 years
£’000
More than
5 years
£’000
3,000
525
5,512
137
896
8,132
-
266
-
-
432
-
-
407
-
-
115
-
-
-
-
-
-
-
Total
£’000
3,000
1,198
5,512
137
1,443
8,132
The maturity of the Company’s non-derivative financial liabilities is all less than one year.
49
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
(d) Capital risk management
Capital risk
The Group and Company’s objectives when managing capital are to safeguard the ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust its capital structure, the Group might adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group and Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net cash/(debt) divided
by total capital. Net cash/(debt) is calculated as total borrowings (including “current and non-current borrowings” as shown
in the consolidated balance sheet) and lease creditors less cash and cash equivalents. Total capital is the sum of net debt or
net cash plus equity.
Net cash
Total capital
Ratio
Dividends on ordinary shares
Group and Company
Final dividend of 1.2p (2022: 1.2p) per ordinary share
Dividend in specie of shares in Verici Dx plc at fair value
(e) Fair value estimation
2023
£’000
3,627
71,844
(5.0%)
2023
£’000
5,445
-
2022
£’000
10,031
84,554
(11.9%)
2022
£’000
5,459
2,002
Fair value for the investments in Renalytix plc and Verici Dx plc were determined by reference to their published price
quotation in an active market (classified as level 1 in the fair value hierarchy). The investments have been classified as financial
assets at fair value through Other comprehensive income. The Renalytix shares were sold during the year.
Group and Company
AIM listed ordinary shares – Renalytix plc
AIM listed ordinary shares – Verici Dx plc
2023
£’000
-
74
2022
£’000
827
90
The investments in the unlisted equity securities of Llusern and Epinex are classified as Level 3 in the fair value hierarchy. Their
fair value is assessed annually based on inputs from the senior management of the investee companies, including the result
where appropriate of further funding rounds, as well as the Group’s assessment of their progress. No changes to the fair value
have been made during this or the prior year. There have been no movements between levels in 2023 or 2022.
4. Critical accounting estimates and judgements
In the process of applying the Group’s accounting policies, management has made accounting judgements in the determination
of the carrying value of certain assets and liabilities. Due to the inherent uncertainty involved in making assumptions and
estimates, actual outcomes will differ from those assumptions and estimates. The following estimates have the most significant
effect on the amounts recognised in the financial statements.
Impairment of goodwill and other intangible assets and recoverability of investment in subsidiaries
The recognition of goodwill and other intangible assets arising on acquisitions and the impairment assessments contain
significant accounting estimates. The Group tests annually whether goodwill and other intangible assets have suffered any
impairment, in accordance with the accounting policy stated in note 2. The recoverable amounts of cash-generating units
have been determined based on value-in-use calculations or fair value less costs to sell. These calculations require the use of
estimates as set out in note 19 where we also detail the sensitivity of changes in the key assumptions.
Inventory provisions
The Group makes provisions for slow-moving and obsolete inventory. While the majority of provisions are set using a
standard model, management uses judgement and estimates when considering the appropriate inputs to the model, and also
when assessing inventory to determine whether use of the standard model is appropriate in the circumstances or whether
adjustments should be made to increase or decrease the standard provision.
50
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
A significant proportion of the provisions recognised (where such judgment has been applied) relate to excess COVID-19
and other inventories following the decision to pivot away from these product lines. Provisions relating to these inventory
items amount to £4.3m, reflecting a provision rate of 100%. A reduction of 10% in management’s provisioning rate would lead
to a reduction in the provision (and a corresponding credit to the Income Statement) of £0.4m. Further details of inventory
provisions are set out in Note 25.
Exceptional items
Exceptional items are material items which derive from events or transactions that fall within the ordinary activities of the
reporting entity and which individually or, if of a similar type, in aggregate, need to be disclosed by virtue of their size
and incidence if the financial statements are to give a true and fair view. The Group uses its judgement and experience to
determine whether items should be treated as exceptional. See Note 8.
Russia
The Directors have used judgement in determining that the Group retains control of its subsidiary company in Russia and that
it remains appropriate for it to still be consolidated in these results. Details of trading and assets in Russia are shown in Note 5.
5. Segmental reporting
Management has determined the Group’s operating segments based on the monthly management reports presented to the
Chief Operating Decision Maker (‘CODM’). The CODM is the Executive Directors and the monthly management reports are
used by the Group to make strategic decisions and allocate resources.
The principal activity of the Group is the design, development, manufacture and sale of diagnostic instruments, reagents and
certain ancillary products, as well as central laboratory reagents. This activity takes place across various countries, such as the
USA, Germany, Russia, and the United Kingdom, and as such the Board considers the business primarily from a geographic
perspective. Although not all the segments meet the quantitative thresholds required by IFRS 8, management has concluded
that all segments should be maintained and reported.
The reportable segments derive their revenue primarily from the manufacture and sale of medical diagnostic equipment and
reagents. Other services include the servicing and distribution of third party company products under separate distribution
agreements. Transactions between segments consist of the sale of products for resale. The basis of accounting for these
transactions is the same as for external revenue. Currently the key operating performance measures used by the CODM are
revenue and adjusted EBITDA.
51
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
5. Segmental reporting (continued)
The segment information provided to the Board for the reportable segments for the year ended 31 December 2023 is as
follows:
2023
Income statement
Revenue
Inter-segment
External revenue
Adjusted EBITDA*
Exceptional items – other, charged to cost of sales
Exceptional items – impairments (Note 8)
Exceptional items – other
Share-based payments (Note 32)
EBITDA
Depreciation
Amortisation
Operating profit
Finance income
Finance cost
Income tax
Profit for the year
Segment assets
Operating assets
Inter-segment assets
External operating assets
Cash
Total assets
Segment liabilities
Operating liabilities
Inter-segment liabilities
External operating liabilities
Borrowings (excluding lease liabilities)
Total liabilities
Other segmental information
Non-current assets – PPE
Non-current assets – Intangibles
PPE – additions
Intangible assets – additions
Germany
£’000
USA
£’000
Russia^
£’000
UK
£’000
Total
£’000
27,122
(5,027)
22,095
6,459
205
(677)
(86)
-
5,901
(907)
(1,182)
26,133
-
3,568
-
26,133
3,568
816
(1)
815
57,639
(5,028)
52,611
6,851
(775)
(120)
(1,186)
-
4,770
(2,065)
(929)
1,092
(4,018)
10,384
-
-
-
-
1,092
(37)
-
(7)
(164)
(23)
2
(4,210)
(267)
(85)
(577)
(961)
(1,295)
2
7,553
(3,276)
(2,196)
3,812
1,776
1,055
(4,562)
2,081
125
(75)
600
2,731
9,304
106,423
(1,779)
(33,300)
7,525
796
8,321
73,123
7,726
80,849
14,702
42,946
(13,346)
(33,300)
1,356
2,986
4,342
1,596
4,389
8
-
9,646
2,986
12,632
23,744
30,224
7,410
377
42,131
53,717
(10,818)
(20,493)
31,313
1,269
32,582
4,959
(770)
4,189
-
4,189
6,176
18,117
1,307
314
33,224
3,955
37,179
23,125
(19,184)
3,941
-
3,941
15,834
7,650
6,039
63
1,271
(210)
1,061
1,706
2,767
160
-
160
-
160
138
68
56
-
* Adjusted EBITDA excludes exceptional items and share-based payments. The UK includes head office costs.
^ relates to a subsidiary with a non-controlling interest
52
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
5. Segmental reporting (continued)
2022
Income statement
Revenue
Inter-segment
External revenue
Adjusted EBITDA*
Exceptional items - other, charged to cost of sales
Exceptional items - impairments (Note 8)
Exceptional items - other
Share-based payments (Note 32)
EBITDA
Depreciation
Amortisation
Operating profit
Finance income
Finance cost
Income tax
Profit for the year
Segment assets
Operating assets
Inter-segment assets
External operating assets
Cash
Total assets
Segment liabilities
Operating liabilities
Inter-segment liabilities
External operating liabilities
Borrowings (excluding lease liabilities)
Total liabilities
Other segmental information
Germany
£’000
USA
£’000
Russia^
£’000
UK
£’000
Total
£’000
30,384
(6,192)
37,220
(398)
4,202
-
24,192
36,822
4,202
1,427
(8)
1,419
73,233
(6,598)
66,635
8,089
(1,701)
(32)
(156)
-
6,200
(744)
(1,667)
8,309
(4,767)
(10,324)
(142)
-
1,563
(3,057)
14,904
-
-
-
-
(306)
(6,774)
(28)
(69)
308
(10,384)
(367)
308
(6,924)
1,563
(3,152)
(2,313)
(1,925)
(1,835)
(21)
-
(408)
(58)
(3,098)
(3,560)
3,789
(10,684)
1,542
(3,618)
(8,971)
1
(33)
(790)
1
(4)
644
2,967
(10,043)
41,835
57,213
(10,608)
(22,634)
34,579
5,785
40,364
118
-
(348)
1,312
873
-
873
2,366
3,239
11
(65)
(140)
131
(102)
(634)
(3,812)
(9,576)
13,246
113,167
(2,212)
(35,454)
11,034
653
11,687
77,713
11,578
89,291
27,125
207
15,542
50,085
(21,908)
-
(12,560)
(35,454)
5,217
-
5,217
207
-
207
2,982
-
14,631
137
2,982
14,768
31,227
2,774
34,001
7,211
(986)
6,225
137
6,362
Non-current assets – PPE
5,982
13,590
155
1,987
21,714
Non-current assets – Intangibles
PPE – additions
Intangible assets – additions
18,606
877
832
8,822
5,909
192
87
84
-
6,257
33,772
102
370
6,972
1,394
* Adjusted EBITDA excludes exceptional items and share-based payments. The UK includes head office costs
^ relates to a subsidiary with a non-controlling interest
53
Annual Report 2023 | EKF Diagnostics Holdings plc2.0
Notes to the Financial Statements
for the year ended 31 December 2023
5. Segmental reporting (continued)
Disclosure of Group revenues by geographic location of customer is as follows:
Americas
United States of America
Rest of Americas
Europe, Middle East and Africa (EMEA)
Germany
United Kingdom
Ireland
Rest of Europe
Russia
Middle East
Africa
Asia and Rest of World
China
Rest of Asia and Oceania
Total revenue
In 2023 and 2022 no customer represented more than 10% of revenues.
6. Expenses – analysis by nature
Inventories consumed in cost of sales
Employee benefit expense (note 11)
Employee costs capitalised as intangible assets
Depreciation and amortisation
Exceptional items – other, charged to cost of sales (note 8)
Exceptional items – impairment (note 8)
Exceptional items – other (note 8)
Research and development expenses
Foreign exchange
Other expenses
Total cost of sales and administrative expenses
2023
£’000
21,187
3,791
8,231
767
1,277
4,094
3,568
1,656
2,805
1,246
3,989
52,611
2023
£’000
18,174
19,363
(205)
5,472
577
961
1,295
1,823
(7)
3,235
50,688
Included within the above expenses are exceptional items as set out in note 8.
2022
£’000
30,941
4,126
8,001
1,886
5,253
3,715
4,202
1,449
1,945
1,014
4,103
66,635
2022
£’000
24,612
22,176
(818)
6,658
6,774
10,384
367
1,518
(71)
4,925
76,525
54
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
7. Other income
Receipt from a US customer
Other
Total
2023
£’000
-
158
158
2022
£’000
859
60
919
In May 2022 a US customer made a one-off $5.5m payment for inventory relating to our COVID contract manufacturing
services and other matters. £0.9m of this receipt has been disclosed as Other income in accordance with the terms of the
contract.
8. Exceptional items
Included within cost of sales and administrative expenses are exceptional items as shown below:
– Deferred consideration
– Business reorganisation costs – other charged to cost of sales
– Business reorganisation costs – Impairment
– Business reorganisation costs – other charged to operating expenses
Exceptional items
Note
a
b
c
d
2023
£’000
-
(577)
(961)
(1,295)
(2,833)
2022
£’000
2
(6,774)
(10,384)
(369)
(17,525)
a. Change in the value of deferred consideration relating to the acquisition of Advanced Diagnostic Laboratory LLC.
b. Costs associated with the transition and restructure of certain operations in the UK and Germany, which have been
charged to cost of sales. In 2023 the costs include provisions against certain COVID-19 related and other inventory
totalling £0.5m and provisions for certain onerous contracts following the decision to focus on its other businesses.
c. In 2023 impairments associated with the transition and restructure of certain operations in the US, UK and Germany,
which have been charged to operating expenses – including £0.9m relating to the impairment of R & D projects
which no longer met the requirements of capitalisation.
d. In 2023 costs associated with the transition and restructure of certain operations in the US, UK and Germany,
including £0.9m relating to ADL and redundancy costs (£0.2m) which have been charged to operating expenses.
9. Auditor’s remuneration
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s
auditors and their associates:
Fees payable to Company’s auditors and its associates for the audit of the parent Company and
consolidated financial statements
Fees payable to the Company’s auditors and its associates for other services:
– The audit of Company’s subsidiaries
2023
£’000
271
37
308
2022
£’000
52
155
207
55
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
10. Directors’ emoluments
Aggregate emoluments
Share-based payments
Contribution to defined contribution pension scheme
2023
£’000
789
-
29
818
2022
£’000
934
(308)
15
641
Retirement benefits are accruing to 2 (2022: 2) current directors under a defined contribution scheme. See further
disclosures within the Remuneration Report on page 27. The highest paid director received aggregate emoluments of
£254,000 (2022: £305,000).
11. Employee benefit expense
Wages and salaries
Social security costs
Share-based payments granted to Directors and senior
management (Note 32)
Other pension costs (Note 34)
Capitalised as development costs
Group
2023
£’000
16,019
2,803
(2)
338
19,158
205
19,363
Group
2022
£’000
18,392
2,945
(308)
329
21,358
818
22,176
Company
2023
£’000
Company
2022
£’000
2,430
343
(2)
79
2,850
-
2,850
3,631
483
(308)
109
3,915
-
3,915
Employee costs of £0.2m (2022: £0.8m) have been capitalised as part of development costs in the Group.
12. Monthly average number of people employed
Monthly average number of people (including Executive Directors)
employed was:
Administration
Research and development and regulatory
Sales and marketing
Manufacturing, production and after sales
Group
2023
Group
2022
Company
2023
Company
2022
57
39
57
181
334
61
26
67
218
372
12
-
12
4
28
10
11
8
16
45
The total number of employees (FTEs) in the Group at 31 December 2023 was 317 (2022: 356), and in the Company was
21 (2022: 35).
56
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
13. Finance income and costs
Finance costs:
– Bank borrowings
– Other interest
– IFRS 16 interest
Finance costs
Finance income:
– Interest income on short term deposits
– Other interest
Finance income
Net finance income
14. Income tax (credit)/charge
Group
Current tax:
Current tax on profit for the year
Adjustments for prior periods
Total current tax (credit)/charge
Deferred tax (note 30):
Origination and reversal of temporary differences
Total deferred tax charge/(credit)
Income tax (credit)/charge
2023
£’000
2022
£’000
(31)
(16)
(28)
(75)
121
4
125
50
2023
£’000
1,182
(2,729)
(1,547)
947
947
(600)
(10)
(46)
(46)
(102)
128
3
131
29
2022
£’000
2,815
62
2,877
(2,243)
(2,243)
634
A change to the main UK corporation tax rate was substantively enacted on 24 May 2021. The rate applicable from 1 April
2023 increased to 25%. Deferred taxes at the reporting date have been measured using these enacted tax rates and
reflected in these financial statements. For 2023 a blended rate of 23.5% has been used.
There is no income tax associated with components of other comprehensive income.
57
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the standard tax rate
applicable to the profits of the consolidated entities as follows:
Profit/(loss) before tax
Tax calculated at domestic tax rates applicable to UK standard rate of tax of 23.5% (2022: 19%)
Tax effects of:
– Expenses not deductible for tax purposes
– Income not subject to tax
– Effect of impairment of intangibles
- Current year temporary differences
– Losses carried forward
– Utilisation of losses
– Adjustment in respect of prior years
– Impact of different tax rates in other jurisdictions
– Other movements
Tax (credit)/charge
15. Earnings per share
(a) Basic
2023
£’000
2,131
501
932
-
222
893
(259)
(261)
(2,729)
(63)
164
(600)
2022
£’000
(8,942)
(1,699)
1,225
(58)
942
-
17
(182)
62
260
67
634
Basic earnings per share is calculated by dividing the profit attributable to owners of the parent by the weighted average
number of Ordinary Shares in issue during the year.
Profit/(loss) attributable to owners of the parent
2023
£’000
2,352
2022
£’000
(10,101)
Weighted average number of Ordinary Shares in issue
454,105,359
457,180,086
Basic profit/(loss) per share
0.52 pence
(2.21) pence
The remaining unapproved share options at 31 December 2022 consisted of 25,000 options which were issued on 21
January 2014 to a senior employee at an exercise price of 37.625p per share. In August 2022 the senior employee passed
away and the options have now lapsed. There are therefore no outstanding share options at 31 December 2023. The
number of shares in issue excludes 1,200,000 shares held in treasury.
16. Dividends
In December 2023, the Company paid a final dividend for 2022 of 1.2p (2021: 1.2p) per ordinary share, at a total value of
£5,445,000 (2022: £5,459,000).
Based on the need for continued investment in our core areas the Board has decided that it would be prudent to
discontinue dividend payments and to enhance shareholder value mainly through growth. The Board will however consider
recommencing the payment of dividends if and when appropriate.
In addition to the cash dividend described above, in June 2022 the Company made a distribution in specie whereby the
majority of the Company’s shareholding in Verici Dx plc was distributed to Ordinary shareholders of the Company at a
total value of £2,001,694. No distribution in specie was made in the current year.
58
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Land and
buildings
£’000
Fixtures &
fittings
£’000
Plant and
machinery
£’000
Motor
vehicles
£’000
Assets under
construction
£’000
Right-of-use
asset
£’000
Total
£’000
Notes to the Financial Statements
for the year ended 31 December 2023
17. Property, plant and equipment
Group
Cost
At 1 January 2022
Additions
Exchange differences
Transfers
Disposals
At 31 December 2022
Accumulated depreciation
At 1 January 2022
Charge for the year
Exchange differences
Impairment
Disposals
At 31 December 2022
Net book value at 31 December 2022
Cost
At 1 January 2023
Additions
Exchange differences
Transfers
Disposal of subsidiary
Disposals
10,711
2,012
564
838
40
(3)
12,150
133
180
10
(363)
1,972
13,188
1,588
985
393
(1,277)
14,877
2,595
1,249
8,625
525
226
1
(3)
3,344
8,806
308
150
-
(336)
1,371
601
1,249
611
1,129
(1,217)
10,397
4,480
12,150
1,972
14,877
2,581
(409)
195
(4)
-
108
(38)
(22)
2,179
(499)
6,569
-
(1,543)
(583)
(316)
At 31 December 2023
14,513
1,437
21,267
Accumulated depreciation
At 1 January 2023
Charge for the year
Exchange differences
Transfers
Impairment
Disposal of subsidiary
Disposals
3,344
1,371
10,397
676
(146)
-
-
(4)
-
299
(25)
-
-
-
(580)
1,565
(361)
(57)
-
(1,357)
(325)
At 31 December 2023
3,870
1,065
9,862
Net book value at 31 December 2023
10,643
372
11,405
160
48
22
-
(20)
210
81
-
10
-
(14)
77
133
210
55
(44)
-
-
(13)
208
77
20
(16)
-
-
-
(9)
72
136
2,470
4,237
276
(443)
(125)
6,415
-
-
-
-
-
-
3,010
31,551
402
195
-
6,972
2,496
-
(285)
(2,073)
3,322
38,946
1,135
13,685
1,016
3,098
52
111
1,049
1,241
(271)
(1,841)
2,043
17,232
6,415
1,279
21,714
6,415
1,876
(300)
(6,799)
-
(4)
3,322
38,946
611
7,410
(143)
(1,433)
-
-
(57)
(1,547)
(467)
(1,383)
1,188
3,323
41,936
-
-
-
-
-
-
-
-
2,043
17,232
716
3,276
(75)
(623)
-
75
-
(57)
75
(1,361)
(467)
(1,381)
2,292
17,161
1,188
1,031
24,775
Depreciation expense of £1,626,000 (2022: £1,359,000) has been charged to cost of sales and £1,650,000 (2022:
£1,739,000) has been charged to administrative expenses. The impairments, which largely relate to assets held by ADL
Health, have been charged to exceptional items within operating expenses. Charges were largely in 2022. Further detail on
the impairment of ADL Health is provided in note 19.
59
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
17. Property, plant and equipment (continued)
Company
Cost
At 1 January 2022
Additions
Transfer
Disposal
At 31 December 2022
Accumulated depreciation
At 1 January 2022
Transfer
Charge for the year
Impairment
Disposal
At 31 December 2022
Net book value at 31 December 2022
Cost
At 1 January 2023
Additions
Disposal
At 31 December 2023
Accumulated depreciation
At 1 January 2023
Charge for the year
Impairment
Disposal
At 31 December 2023
Net book value at 31 December 2023
Land and
buildings
£’000
Investment
property
£’000
Fixtures &
fittings
£’000
Assets under
construction
£’000
Right-of-use
asset
£’000
Total
£’000
1,673
-
(1,673)
-
-
402
(402)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,673
(3)
1,670
-
402
39
-
(3)
438
696
49
-
(161)
584
358
-
183
-
(135)
406
-
53
-
-
53
-
-
-
-
-
-
563
2,932
-
-
-
563
196
-
172
59
-
427
102
-
(164)
2,870
956
-
394
59
(138)
1,271
1,232
178
53
136
1,599
1,670
-
-
1,670
438
39
-
-
477
584
8
(403)
189
406
140
-
(377)
169
1,193
20
53
-
(53)
-
-
-
-
-
-
-
563
-
-
563
427
61
75
-
563
2,870
8
(456)
2,422
1,271
240
75
(377)
1,209
-
1,213
The Company’s freehold property is in Germany and occupied by its subsidiary undertaking, EKF- diagnostic GmbH. EKF-
diagnostic GmbH is paying rental income of €13,900 (£12,075) per month to the parent Company. €167,000 (£144,900)
(2022: €167,000 (£141,785)) was paid to the parent Company for the year. The Company adopts the cost model and shows
the investment property at cost less accumulated depreciation and any accumulated impairment losses. As the property
is occupied by a subsidiary, it does not meet the definition of an investment property for the Group.
60
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
18. Leases
(i) Amounts recognised in the statement of financial position
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Properties
Equipment
Motor vehicles
Total right-of-use
Lease liabilities
Current
Non-current
Total lease liabilities
Group
2023
£’000
704
205
122
1,031
495
618
1,113
Group
2022
£’000
911
230
138
1,279
873
537
1,410
Company
2023
£’000
Company
2022
£’000
-
-
-
-
40
-
40
133
3
-
136
167
40
207
Additions to the right-of-use assets during the 2023 financial year were £611,000 (2022: £402,000) for the Group and £nil
(2022: £nil) for the Company.
(ii) Amounts recognised in the statement of Comprehensive income
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge right-of-use
assets
Properties
Equipment
Motor vehicles
Total right-of-use
Interest expense (included in
finance cost)
Impairment charge - property
Group
2023
£’000
562
73
81
716
28
75
Group
2022
£’000
870
79
67
1,016
46
-
Company
2023
£’000
Company
2022
£’000
59
2
-
61
3
75
170
2
-
172
8
-
The total cash outflow for leases in 2023 was £879,000 (2022: £1,071,000) for the Group and £170,000 (2022: £191,000)
for the Company.
Right of use assets totalling £75,000 in the Group and £75,000 in the Company were fully impaired during the year. The
charge to income is included in Exceptional costs.
(iii) The group’s leasing activities and how these are accounted for
The group leases various offices, factories, equipment and vehicles. Rental contracts for offices and factories are typically
made for fixed periods of between 1 and 5 years, and those for machinery and vehicles for 3 years, but may have extension
options as described below.
The Group has elected not to capitalise leases which are short term or where the underlying asset is of low value. Lease
payments associated such leases are recognised as an expense when they are incurred.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group uses recent third-party financing received, adjusted where
appropriate to reflect changes in financing conditions since third party financing was received.
Leases are recognised as a right-of-use asset and a corresponding lease liability at the date on which the leased asset is
available for use by the Group.
61
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
18. Leases (continued)
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
•
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the group under residual value guarantees
• the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability.
Where the Group is exposed to potential future increases in variable lease payments based on an index or rate, amounts
are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate
take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the income statement
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs
• restoration costs
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight
line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the
underlying asset’s useful life.
62
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
19. Intangible assets
Trademarks,
trade name
and
licences
£’000
Goodwill
£’000
Customer
relationships
£’000
Trade
secrets
£’000
Development
costs
£’000
Software &
website
£’000
Total
£’000
Group
Cost
At 1 January 2022
28,558
4,284
15,706
17,328
Additions
Disposals
Exchange differences
At 31 December 2022
-
(1,177)
1,995
-
-
-
-
-
(3,950)
348
1,567
672
29,376
4,632
17,273
14,050
Accumulated amortisation and impairment
At 1 January 2022
Charge for the year
Disposal
Impairment
Exchange differences
At 31 December 2022
1,177
3,021
-
(1,177)
4,254
-
327
-
463
236
11,825
1,438
14,664
762
-
(3,950)
1,157
1,166
-
538
5,023
1,392
(598)
349
6,166
1,579
472
(598)
608
150
3,370
74,269
2
(25)
384
1,394
(5,750)
5,315
3,731
75,228
109
561
32,375
3,560
-
(5,725)
2,661
13
9,143
2,103
4,254
4,047
15,586
12,014
2,211
3,344
41,456
Net book value at 31 December 2022
25,122
585
1,687
2,036
3,955
387
33,772
Cost
At 1 January 2023
29,376
4,632
17,273
14,050
Additions
Disposals
-
-
8
-
-
-
Disposal of subsidiary
(4,043)
(503)
(1,257)
-
-
-
6,166
369
(639)
3,731
75,228
-
-
377
(639)
-
(2,891)
(8,694)
Reclassification/transfer
Exchange differences
At 31 December 2023
-
(908)
726
(185)
-
(745)
(520)
(274)
(206)
(151)
-
-
(176)
(2,439)
24,425
4,678
15,271
13,256
5,539
664
63,833
Accumulated amortisation and impairment
At 1 January 2023
Charge for the year
Disposal
4,254
4,047
15,586
12,014
-
-
429
-
1,008
-
Disposal of subsidiary
(4,043)
(503)
(1,257)
Impairment
Exchange differences
At 31 December 2023
-
-
-
(211)
(176)
(678)
-
3,797
14,659
343
-
-
-
(243)
12,114
2,211
287
(679)
3,344
41,456
129
-
2,196
(679)
-
(2,891)
(8,694)
887
(82)
-
887
(167)
(1,557)
2,624
415
33,609
Net book value at 31 December 2023
24,425
881
612
1,142
2,915
249
30,224
Amortisation of £123,000 (2022: £57,000) has been charged to cost of sales and £2,073,000 (2022: £3,503,000) has
been charged to administrative expenses in the income statement (net of the profit on the sale of intangible assets). The
impairments relate to certain development projects which have been terminated. These have been charged to exceptional
items within operating expenses. Other disposals relate to the write off of assets recognised on the acquisition of ADL
Health which had previously been fully impaired.
63
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
19. Intangible assets (continued)
Company
Cost
At 1 January 2022
Additions
Impairment
At 31 December 2022
Accumulated amortisation
At 1 January 2022
Charge for the year
At 31 December 2022
Net book value at 31 December 2022
Cost
At 1 January 2023
At 31 December 2023
Accumulated amortisation
At 1 January 2023
Charge for the year
At 31 December 2023
Net book value at 31 December 2023
Impairment disclosure for goodwill
Development
costs
£’000
649
371
(28)
992
51
58
109
883
992
992
109
85
284
708
Goodwill is allocated to the Group’s cash–generating units (CGU’s) identified according to geographic operating segment.
An operating segment-level summary of the goodwill allocation is presented below.
Germany*
DiaSpect
Russia
Stanbio
STI
Total
2023
£’000
17,257
-
68
6,009
1,091
24,425
2022
£’000
7,613
9,952
88
6,321
1,148
25,122
* In 2022 Germany includes EKF-Diagnostic, and Senslab, In 2023, DiaSpect has also been included in Germany, as a result
of an internal re-organisation in the Group’s corporate structure which has changed how independent cash flows are
monitored.
Goodwill is tested for impairment at the balance sheet date. The recoverable amount of goodwill at 31 December 2023 was
assessed on the basis of value in use.
The key assumptions in the calculation to assess value in use are future revenues and the ability to generate future cash flows.
The most recent financial results and forecasts for the next year were used and forecasts for a further four years, followed
by an extrapolation of expected cash flows at a constant growth rate for each unit and the calculation of a terminal value
based upon the longer term growth rates set out below. The projected results were discounted at a rate which is a prudent
evaluation of the pre-tax rate that reflects current market assessments of the time value of money and the risks specific to
the cash-generating units. The discount rates applied reflect a risk-adjusted weighted average cost of capital.
64
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
19. Intangible assets (continued)
The key assumptions used for the value in use calculations of cash generating units with significant goodwill are as
follows:
2023
Longer-term growth rate
Discount rate
Average gross margin
2022
Longer-term growth rate
Discount rate
Average gross margin
Germany
%
Stanbio
%
3
6.96
41%
EKF
Germany
%
3
7.79
32%
3
8.5
62%
Stanbio
%
3
9.45
47%
STI
%
3
8.5
56%
STI
%
3
9.45
45%
ADL
%
3
9.45
33%
DiaSpect
%
3
7.79
45%
The discount rate used is based on a common risk profile across the Group.
Sensitivity analysis has been carried out on the value in use calculations including an increase in the discount rate of 1%
and a restriction of EBITDA margin to current year levels. No impairments arise if any of these sensitivities are used in
isolation. However, there would be an impairment of approximately £0.9m in the Stanbio CGU if these sensitivities were
used in combination.
The remaining average useful lives of the intangibles are as follows:
Trade name
Customer relations
Trade secrets
Website and software
Development costs
1 year
4 - 5 years
2 - 7 years
2 years
1-9 years
During the year, intangible assets associated with ADL Health with a gross value of £8,694,000 and a net value of £nil
have been disposed of. Following an assessment of the carrying value of certain development projects, development costs
with a gross and net value of £887,000 have been impaired. The profit effect of the impairment has been included within
exceptional items and charged to operating costs.
20. Investments in subsidiaries
Company
Shares in Group undertakings
At 1 January
Impairment of investment in EKF Diagnostics
Disposal of DiaSpect Medical AB
Disposal of investment in ADL Health
At 31 December
2023
£’000
30,831
(213)
(159)
(310)
30,149
2022
£’000
38,446
-
(7,615)
30,831
Investments in Group undertakings are recorded at cost, which is the fair value of the consideration paid, less any impairment.
During 2023 ADL Health was sold, and EKF Diagnostics Limited was dissolved. As part of an internal reorganisation, there
was a transfer of value within Investments in subsidiaries to reflect the revised organisation, resulting in a write down on the
investment in DiaSpect Medical AB.
65
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
The subsidiaries of EKF Diagnostics Holdings plc as at 31 December 2023, which are held directly unless noted otherwise,
are as follows:
Name of Company
Note
Proportion Held
Class of
Shareholding
Nature of Business
DiaSpect Medical GmbH
EKF-diagnostic GmbH
Senslab GmbH
000 EKF Diagnostika
EKF Diagnostics Inc
Stanbio Laboratory LLC
Separation Technology, Inc
Notes
1
1
1
2
3
3
3
100% (Indirect)
Ordinary
100%
Ordinary
100% (indirect)
Ordinary
Manufacture and sale of diagnostic
equipment and consumables
Manufacture and sale of diagnostic
equipment and consumables
Manufacture and sale of diagnostic
equipment and consumables
60% (indirect)
100%
Ordinary
Ordinary
Sale of diagnostic equipment
Intermediate holding company
100% (indirect)
Ordinary
100% (indirect)
Ordinary
Manufacture and sale of diagnostic
equipment and consumables
Manufacture and sale of diagnostic
equipment and consumables
1. Incorporated, registered, and having its principal place of business in Germany at Ebendorfer Chaussee 3, 39179 Barleben,
Germany.
2. Incorporated, registered, and having its principal place of business in Russia at 117648, Moscow, PO Box: 30, District
Severnoe Chertanovo, House 2, building 207.
3. Incorporated and registered, and having its principal place of business in the United States of America at 1261 North Main
Street, Boerne, Texas, USA 78006.
All subsidiaries are included in the consolidation. The proportions of voting shares held by the parent Company do not
differ from the proportion of Ordinary Shares held. During the year Stanbio Laboratory was incorporated as a Limited
Liability Company.
Information on the impact of sanctions on 000 EFK Diagnostika are given in the Executive Chair’s Statement on page 9
and in Note 4.
Details of the disposal of certain subsidiaries are given in Note 23.
66
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
21. Financial instruments by category
(a) Assets
31 December
Assets as per balance sheet
Financial assets at fair value through other comprehensive income
Trade and other receivables excluding prepayments
and corporation tax
Cash and cash equivalents (note 26)
Total
(b) Liabilities
31 December
Liabilities as per balance sheet
Borrowings
Lease liabilities
Trade and other payables (excluding deferred grants and deferred
income)
Total
Group
2023
£’000
276
6,231
7,726
14,233
Group
2023
£’000
2,986
1,113
5,380
9,479
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
1,119
8,585
11,578
21,282
Group
2022
£’000
137
1,410
6,143
276
1,889
796
2,961
1,119
2,112
653
3,884
Company
2023
£’000
Company
2022
£’000
2,986
40
-
207
13,902
14,583
7,690
16,928
14,790
Liabilities in the analysis above are all categorised as ‘other financial liabilities at amortised cost’ for the Group and
Company. Borrowings have been included at fair value which is not materially different to amortised cost.
(c) Credit quality of financial assets
The Group is exposed to credit risk from its operating activities (primarily for trade receivables and other receivables) and
from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and
other financial instruments.
The Group’s maximum exposure to credit risk, due to the failure of counterparties to perform their obligations as at 31
December 2023 and 31 December 2022, in relation to each class of recognised financial assets, is the carrying amount of
those assets as indicated in the accompanying balance sheets.
Trade receivables
The credit quality of trade receivables that are neither past due nor impaired have been assessed based on historical
information about the counterparty default rate. The Group does not hold any other receivable balances with customers,
whose past default has resulted in the recovery of the receivables balances.
Cash at bank
The credit quality of cash has been assessed by reference to external credit ratings, based on reputable credit agencies’
long-term issuer ratings:
A+
AA-
A
A-
Ratings lower than AA- or unrated
Total
2023
£’000
4,592
159
731
538
1,706
7,726
2022
£’000
5,814
49
22
772
4,921
11,578
£1,706,000 (2022: £2,366,000) of the cash held in banks rated lower than AA- or unrated was held by the Group’s Russian
subsidiary.
67
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
22. Investments
Group and Company
1 January
Additions
Change in fair value through other comprehensive income
Disposal
Dividend in specie
31 December
2023
£’000
1,119
-
426
(1,269)
-
276
2022
£’000
7,789
2,930
(7,598)
-
(2,002)
1,119
Between 6th and 12th July 2023 the Company sold its entire remaining shareholding in Renalytix plc, an AIM listed developer
of artificial intelligence enabled diagnostics for kidney disease, for a total of £1.33m. The holding consisted of 1,140,911 ordinary
shares which had been revalued on 30 June 2023 at £1.1125 per share, giving a total valuation of £1,269,263. The average sale
price per share was £1.1684. Against the original purchase cost, the sale generated a realised loss on disposal of £262,000.
The Company has a 0.42% (2022 : 0.42%) holding in Verici Dx plc, with a fair value at 31 December 2023 of £0.07m. The fair
value is calculated using the quoted mid price. In addition the Company has a 2% holding in Llusern Scientific Limited, a UK
based privately held company developing molecular point-of-care tests for the detection of bacterial and viral infections at
a cost of £50,000. The Company continues to have a 0.59% (2022: 0.61%) holding in Epinex Diagnostics Inc., a US based
privately held company operating in the medical diagnostics industry.
These equity securities are not held for trading. They are held as financial assets at fair value through other comprehensive
income.
£442,000 of the change in fair value relates to the Group’s holding in Renalytix plc, and £(16,000) to the Group’s holding in
Verici Dx plc.
23. Disposal of a subsidiary
Advanced Diagnostic Laboratory LLC
On 23 March 2023 the Company disposed of all of its 100% shareholding in Advanced Diagnostic Laboratory LLC (“ADL” or
“ADL Health”) for a consideration of £343,800. The purchaser was a founder director. ADL, whose business is developing and
providing diagnostic tests, was purchased in September 2021 for a total consideration (including contingent consideration)
of £7.9m. The sale consideration consisted of the return of 1,200,000 ordinary shares by the purchaser. These were valued
at the closing mid-price on the day the shares were received, being 28.65p. The loss on disposal in 2023 of £584,000 has
been disclosed in exceptional items. ADL had revenues of £467,000 in 2023 and had net assets on disposal of £959,000
(excluding amounts due to Group companies which have been forgiven or impaired). An impairment of £9.8m was made
against goodwill and fixed assets in 2022. At disposal, ADL held cash of £9,000.
DiaSpect Medical AB
On 30 December 2023 the Company disposed of its 100% shareholding in DiaSpect Medical AB (“DiaSpect AB”), a Swedish
company which was formerly the holding company of the DiaSpect group. The acquirer was a Swedish company which
specialises in the dissolution of legal entities which are no longer required. The consideration was £159,000 paid in cash. The
net assets on disposal were £159,000, and there was no gain or loss on disposal in the Group. DiaSpect AB had no revenue
in 2023.
68
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
24. Trade and other receivables
Current
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables – net
Prepayments
Amounts owed by subsidiary undertakings
Corporation tax
Other receivables
Group
2023
£’000
5,721
(87)
5,634
556
-
2,277
597
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
8,012
(149)
7,863
2,164
-
-
722
11
-
11
124
1,779
-
99
133
(5)
128
220
1,872
-
112
9,064
10,749
2,013
2,332
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
Other than to certain corporate customers who are granted 60 day terms, they are generally due for settlement within 30
days and are therefore all classified as current. Trade receivables are recognised initially at the amount of consideration that
is unconditional. The group holds the trade receivables with the objective of collecting the contractual cash flows.
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.
As of 31 December 2023, in the Group trade receivables of £1,168,000 (2022: £2,780,000) were past due but not covered
by a loss allowance. In the Company, £nil (2022: £71,000) were past due but not covered by a loss allowance. These relate
to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade
receivables is as follows:
Up to 3 months
3 to 6 months
Over 6 months
Group
2023
£’000
907
-
261
1,168
Group
2022
£’000
2,133
398
249
2,780
Company
2023
£’000
Company
2022
£’000
-
-
-
-
59
12
-
71
As of 31 December 2023, in the Group trade receivables of £87,000 (2022: £149,000) were subject to a loss allowance. In
the Company trade receivables of £nil (2022: £5,000) were subject to a loss allowance. The ageing of these receivables is as
follows:
Group
2023
£’000
33
26
28
87
Group
2022
£’000
80
19
50
149
Company
2023
£’000
Company
2022
£’000
-
-
-
-
5
-
-
5
Up to 3 months
3 to 6 months
Over 6 months
Total
69
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Movements on the provision for impairment of trade receivables are as follows:
At 1 January
Provision for receivables impairment
Disposed with subsidiaries
Unused amounts reversed
Receivables written off as uncollectible
Exchange differences
At 31 December
Group
2023
£’000
149
327
(66)
(120)
(196)
(7)
87
Group
2022
£’000
148
313
-
(163)
(163)
14
149
Company
2023
£’000
Company
2022
£’000
5
-
-
(5)
-
-
-
-
5
-
-
-
-
5
The other classes within trade and other receivables do not contain impaired assets.
The carrying amounts of the Group’s trade and other receivables denominated in foreign currencies were as follows:
UK Sterling
Euros
US dollar
Russian rouble
25. Inventories
Raw materials
Work in progress
Finished goods
Group
2023
£’000
234
2,885
5,838
107
9,064
Group
2023
£’000
6,202
1,573
991
8,766
Group
2022
£’000
460
3,564
6,510
215
10,749
Group
2022
£’000
6,729
1,046
1,659
9,434
Company
2023
£’000
Company
2022
£’000
234
-
1,779
-
2,013
460
-
1,872
-
2,332
Company
2023
£’000
Company
2022
£’000
-
-
-
-
46
3
19
68
The Directors are of the opinion that the replacement values of inventories are not materially different to the carrying
values stated above. The Group carrying values above are stated net of impairment provisions of £6,575,000 (2022:
£7,815,000). The cost of inventories recognised as expense and included in ‘cost of sales’ amounted to £18,174,000 (2022:
£24,612,000), and in the Company £71,000 (2022: £1,078,000).
70
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
26. Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents (excluding bank overdrafts)
Group
2023
£’000
7,726
7,726
Group
2022
£’000
11,578
11,578
Company
2023
£’000
Company
2022
£’000
796
796
653
653
The Directors consider that the carrying amount of cash and cash equivalents approximates to their fair value. Cash net
of borrowings of £4,740,000 (2022: £11,441,000) is presented as gross cash of £7,726,000 (2022: £11,578,000) net of
borrowings of £2,986,000 (2022: £137,000) detailed in Note 28. This excludes lease liabilities as shown in Note 18. Cash
totalling £1,706,000 is held by the Group’s 60% owned Russian subsidiary. As a result of sanctions put in place by the USA,
the EU, and the UK, against Russia, it is difficult to access cash in Russia, however we have been able to transfer limited
funds to our main Germany entity during the year via dividends.
27. Trade and other payables
Trade payables
Amounts due to subsidiary undertakings
Social security and other taxes
Other payables
Accrued expenses and deferred income
Group
2023
£’000
984
-
132
184
4,212
5,512
Group
2022
£’000
1,505
-
156
1,170
5,457
8,288
Company
2023
£’000
Company
2022
£’000
70
82
13,346
14,026
50
1
485
61
1
474
13,952
14,644
Other payables consists mainly of VAT and US sales tax liabilities. The carrying amounts of trade and other payables are
considered to be the same as their fair values due to their short-term nature. Trade payables are unsecured and are usually
paid within 30 days of recognition. Amounts due by the Company to its subsidiaries are interest free and are repayable
on demand.
28. Borrowings
Non-current
Bank borrowings
Current
Bank borrowings
The maturity profile of borrowings was as follows:
Amounts falling due
Within 1 year
Between 1 and 2 years
Between 2 and 5 years
More than 5 years
Total borrowings
71
Group
2023
£’000
-
-
2,986
2,986
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
-
-
137
137
-
-
2,986
2,986
-
–
-
-
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
2,986
137
2,986
-
-
-
-
-
-
-
-
-
2,986
137
2,986
-
-
-
-
-
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Bank borrowings
A new £3m revolving credit facility was opened by the Company with HSBC UK in November 2023. The facility is for a
maximum of three years at a rate of 2.45% above the Bank of England Base rate and is secured by a debenture. There is a
non-utilisation fee of 0.98%. The borrowings have covenants attached to them as follows, measured at Group level:
(a) Interest Cover: Profit before Interest and Tax will not fall below a figure equal to 1,000.00% of the aggregate of Group
interest charges and interest element of finance leases, in any Relevant Period.
(b) Total Net Debt to EBITDA: Total Net Debt for a Relevant Period will not be more than 150.00% of EBITDA for that
period.
The Group has been compliant with these covenants throughout the year.
Within the three year term, the Group can borrow for shorter periods (the “Relevant Period”) and then at the end of
the period choose to repay all or part of the loan, or to increase the amount borrowed if previously it was less than the
maximum. The current Bank borrowings mature in 2024 and bear an average fixed coupon of 7.7% annually (2022: 2.5%).
The Group also continues to benefit from a funding line with North Atlantic Smaller Companies Investment Trust PLC.
This is a committed facility for a maximum value of £3.0m which, as at the date of this statement, is not drawn down. The
lending facility is available for three years from the date of signature and any amounts drawn down carry interest at 2.5%
above the Bank of England base rate from time to time, payable quarterly in arrears. Any loan under the facility is required
to be fully repaid at the end of the facility term. The Company may repay any such loan early, in part or in full, but may not
re-borrow such amounts.
Bank borrowings are secured against certain assets of the Group.
The Group is not exposed to interest rate changes or contractual re-pricing dates at the end of the reporting period, as
the borrowings are fixed in nature.
The fair value of both current and non-current borrowings equals their carrying amount, as the impact of discounting is
not significant.
The carrying amounts of the group’s bank borrowings are denominated as follows:
Euro
Sterling
The sterling loan is shown net of a facility fee of £14,000.
29. Deferred consideration
At 1 January
Fair value adjustment
Payment
Additions
Derecognised
Interest
Exchange differences
At 31 December
Group
2023
£’000
-
2,986
2,986
Group
2023
£’000
-
-
-
-
-
-
-
-
Group
2022
£’000
137
-
137
Group
2022
£’000
635
(2)
(403)
-
(248)
10
8
-
Company
2023
£’000
Company
2022
£’000
-
2,986
2,986
-
-
-
Company
2023
£’000
Company
2022
£’000
-
-
-
-
-
-
-
-
635
(2)
(403)
-
(248)
10
8
-
The balance at 1 January 2022 in both the Group and Company related to the acquisition of ADL Health.
72
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
30. Deferred income tax
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when deferred income tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances
on a net basis. The amounts concerned are as follows:
Group
Deferred tax assets
Deferred tax asset to be recovered within 12 months
Deferred tax asset to be recovered after more than 12 months
Deferred tax liabilities
Deferred tax liability to be recovered after more than 12 months
Deferred tax liability to be recovered within 12 months
Deferred tax liabilities – net
The gross movement on the deferred income tax account is as follows:
At 1 January
Exchange differences
Rate change through income statement (Note 14)
Movement through OCI
Income statement movement (Note 14)
At 31 December
2023
£’000
-
(18)
(18)
1,894
623
2,517
2,499
2023
£’000
1,568
(16)
25
-
922
2,499
2022
£’000
(925)
-
(925)
1,788
705
2,493
1,568
2022
£’000
5,016
297
166
(1,502)
(2,409)
1,568
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting
of balances within the same tax jurisdiction, is as follows:
At 1 January 2023
Charged/(credited) to the income statement (Note 14)
Rate change through income statement
Exchange differences
At 31 December 2023
Accelerated
tax
depreciation
£’000
Tax losses
£’000
Inventory
£’000
Capitalised
R & D
£’000
Intangible
assets
£’000
Other
£’000
Total
£’000
453
1,825
-
-
(925)
(651)
-
4
(487)
4
-
44
2,278
(1,572)
(439)
1,363
(821)
12
(31)
523
1,159
5
1,568
577
(12)
922
13
(33)
-
-
25
(16)
1,716
(7)
2,499
Deferred income tax assets are recognised to the extent that the realisation of the related tax benefit through future
taxable profits is probable. The Group did not recognise deferred income tax assets of £1,437,000 (2022: £3,081,000)
mainly in respect of tax losses amounting to £5,746,000 (2022: £13,109,000), primarily arising in the UK, that may be
carried forward against future taxable income, as the likely timing of recovery is considered too remote.
The Company has not recognised any deferred tax assets or liabilities. The Company did not recognise deferred income
tax assets of £1,888,000 (2022: £1,308,000) mainly in respect of tax losses amounting to £7,553,000 (2022: £5,565,000)
as the likely timing of recovery is considered too remote. The Company also did not recognise deferred tax liabilities of
£177,000 (2022: £208,000) in respect of capitalised R&D of £708,000 (2022: £883,000) as the Company is in a position
to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse
in the foreseeable future.
73
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
31. Share capital
Group and Company
At 1 January 2022
Ordinary shares purchased for cancellation and cancelled
At 31 December 2022 and at 1 January 2023
Ordinary shares acquired into treasury
Number of
Ordinary Shares
Share capital
£’000
Share premium
£’000
463,930,564
(9,000,000)
454,930,564
(1,200,000)
4,639
(90)
4,549
-
7,375
-
7,375
-
7,375
At 31 December 2023
453,730,564
4,549
Group and Company
Other equity – shares held in Treasury
At 1 January 2023
Ordinary shares acquired into treasury
At 31 December 2023
Number of
Ordinary Shares
Share capital
£’000
-
1,200,000
1,200,000
-
12
12
In April 2023 1,200,000 ordinary shares were acquired into treasury as part of the proceeds for the sale of ADL Health.
Ordinary shares have a par value of 1p and are all fully paid. They entitle the holder to participate in dividends and to share
in the proceeds of winding up the Company in proportion to the number and amounts paid on the shares held. On a show
of hands, every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote; and on a poll
each share is entitled to one vote. The Company does not have a limited amount of authorised capital.
Information on outstanding share options is given in Note 32.
The Group acquired 1,200,000 ordinary shares from the purchaser of ADL Health as part of the consideration. The shares
were acquired at an average price of 29.65 pence per share.
32. Share options and share-based payments
The share options and share incentive schemes in existence in the Group and Company were as follows:
Unapproved share option scheme
At 1 January
Lapsed
At 31 December
2023
2022
Av. Exercise price
per share
(£)
0.37625
0.37625
-
Options
(Number)
25,000
(25,000)
Av. Exercise price
per share
(£)
0.37625
-
Options
(Number)
25,000
-
-
0.37625
25,000
£2,000 (2022: £nil) was credited to income in 2023 in association with this scheme.
In September 2021 a cash settled share-based incentive award scheme was granted to a director. Following the resignation
of the director in February 2023, the scheme lapsed.
74
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
33. Other reserves
The following table shows a breakdown of the balance sheet item “other reserves” and the movements in
reserves during the year. A description of the nature and purpose of each reserve is provided below the table.
Capital redemption
reserve
£’000
Financial assets
at FVOCI
£’000
Group
At 1 January 2022
Changes in the fair value of equity instruments at fair value through Other
Comprehensive Income (net of tax)
Reserves transfer relating to the disposal of Renalytix shares
Cancellation of Ordinary Shares
At 31 December 2022
Changes in the fair value of equity instruments at fair value through
Other Comprehensive Income (net of tax)
Reserves transfer relating to the disposal of Renalytix shares
Reserves transfer relating to the dissolution of EKF Molecular Diagnostics
Currency translation differences
At 31 December 2023
FVOCI reserve
The Group has elected to recognise changes in the fair value of certain investments in equity securities in Other
Comprehensive Income, as explained in note 2. These changes are accumulated within the FVOCI reserve within equity
and disclosed as Other reserve. The Group transfers amounts from this reserve to retained earnings when the relevant
equity securities are derecognised.
Capital redemption
reserve
£’000
Financial assets
at FVOCI
£’000
Total
£’000
5,033
4,931
(5,752)
(5,752)
262
-
(821)
489
262
(41)
(1)
(112)
262
90
(629)
489
262
(41)
(1)
80
Total
£’000
4,992
4,890
(6,096)
(6,096)
344
-
(862)
489
262
(1)
(112)
344
90
(670)
489
262
(1)
80
102
-
-
90
192
-
-
-
-
192
102
-
-
90
192
-
-
-
192
Company
At 1 January 2022
Changes in the fair value of equity instruments at fair value through
Other Comprehensive Income (net of tax)
Reserve transfer
Cancellation of Ordinary Shares
At 31 December 2022
Changes in the fair value of equity instruments at fair value through
Other Comprehensive Income (net of tax)
Reserves transfer relating to the disposal of Renalytix shares
Currency translation differences
At 31 December 2023
75
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Share-based payments
The share based payments reserve is used to recognise:
• The grant date fair value of options issued to employees but not exercised.
• The grant date fair value of shares issued to employees.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entity are recognised in OCI, and accumulated in a
separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
34. Retirement benefit obligations
Pension benefits
The Company operates defined contribution pension schemes the assets of which are held separately from those of
the Company in independently administered funds. The pension cost for the year represents contributions made by the
Company to the funds and amounted to £338,000 (2022: £329,000). The value of pension contributions owed to pension
providers at 31 December 2023 was £nil (2022: £nil).
35. Commitments
Capital commitments
The Group has contracted £416,000 (2022: £1,447,000) capital expenditure at the end of the reporting period that had
not yet been incurred.
The Group does not have any commitments to acquire any intangible assets.
76
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
36. Cash generated from operations
Profit/(loss) before tax
Adjustments for:
– Depreciation
– Amortisation
– Exceptional items – other, charged to cost
of sales
- Exceptional items – impairment
– Exceptional items – other
– Loss/(profit) on disposal of fixed assets
– Share-based payments
– Fair value adjustment
– Cash outflows relating to exceptional items
– Foreign exchange
– Bad debt written down
– Finance income
- Finance cost
- Inter-company dividend
Changes in working capital
– Inventories
– Trade and other receivables
– Trade and other payables
Net cash generated from operations
Group
2023
£’000
2,131
3,276
2,196
577
961
1,295
-
(2)
-
(721)
(5)
214
(125)
75
-
(745)
2,495
(2,799)
8,823
Group
2022
£’000
(8,942)
3,098
3,560
6,774
10,384
367
28
(308)
-
(617)
(71)
127
(131)
102
-
(815)
1,276
(2,177)
12,655
Company
2023
£’000
867
240
175
8
74
(1,155)
-
(2)
-
(319)
-
-
-
310
(1,110)
68
319
2,010
1,485
In the statement of cash flows, proceeds from the sale of property, plant and equipment comprise:
Group
Net book value
Profit on disposal of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Non-cash transactions
2023
£’000
-
-
-
Company
2022
£’000
(9,506)
394
58
305
7,396
396
-
(308)
26
(339)
(236)
5
(11)
160
-
101
940
10,089
9,470
2022
£’000
257
(28)
229
The principal non-cash transactions are: depreciation and amortisation, release of accruals no longer required, and
exceptional items consisting of provisions and impairments.
77
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
This section sets out an analysis of net cash/(debt) and the movements in net cash/(debt) for each of the periods presented.
Cash and cash equivalents (Note 26)
Borrowings (Note 28)
Lease liabilities
Net cash
Group
2023
£’000
7,726
(2,986)
(1,113)
3,627
Group
Group
2022
£’000
11,578
(137)
(1,410)
10,031
Company
2023
£’000
796
(2,986)
(40)
(2,230)
Company
Company
2022
£’000
653
-
(207)
446
Cash
£’000
Borrowings
£’000
Lease
liabilities
£’000
Total
£’000
Cash
£’000
Borrowings
£’000
Lease
liabilities
£’000
Total
£’000
Movements in Net cash
Net cash as at 1 January 2022
Foreign exchange adjustments
Financing cash flows
20,341
1,520
(10,283)
(696)
(1,933)
17,712
4,879
(54)
613
(146)
1,320
185
669
(9,001)
(4,411)
Net cash at 31 December 2022
11,578
(137)
(1,410)
10,031
653
-
-
-
-
(391)
4,488
-
184
185
(4,227)
(207)
446
Financing cash flows
(2,976)
(2,852)
241
(5,587)
Foreign exchange adjustments
(876)
3
56
(817)
Net cash at 31 December 2023
7,726
(2,986)
(1,113)
3,627
156
(13)
796
(2,986)
-
167
-
(2,663)
(13)
(2,986)
(40)
(2,230)
37. Related Party Disclosures
Directors
Christopher Mills is interested in 29.13%. of the Company’s issued share capital which is held through North Atlantic
Smaller Companies Investment Trust PLC, Oryx International Growth Fund Limited, and in his own name. Harwood Capital
LLP is investment manager to North Atlantic Smaller Companies Investment Trust plc and investment adviser to Oryx
International Growth Fund Limited. Harwood Capital LLP, which is part of the Harwood Capital Management Group (of
which Christopher is sole shareholder) is a limited liability partnership of which Christopher Mills is Chief Investment
Officer. He is non-executive chair of Renalytix plc (“Renalytix”) and was a non-executive director of Trellus Health plc
(“Trellus”) until February 2024. He holds a 10.1% holding in Renalytix, a 17.1% shareholding in Verici Dx plc, and a 11.3%
holding in Trellus.
The Company has agreed a funding line with North Atlantic Smaller Companies Investment Trust PLC. Christopher Mills,
Non-executive Director of the Company, sits on the Board as Chief Executive Officer of North Atlantic Smaller Companies
Investment Trust PLC and is a substantial shareholder of both the Company and the lender. This is a committed facility
for a maximum value of £3.0m whichis not currently drawn down, and no amounts have been drawn to date. The terms of
the facility are substantially similar to those considered to be commercially available to the Company. This facility partially
sets off the exposure currently faced by the Group given the inability to access cash reserves held in Russia. The Board
believes it is a prudent measure to have access to additional cash if needed and further that the facility demonstrates the
continued support from its largest shareholder, Christopher Mills. The direct and indirect shareholdings of Mr. Mills in the
Company include those of the North Atlantic Smaller Companies Investment Trust PLC.
The lending facility is available for three years from 27 March 2023 and any amounts drawn down carry interest at 2.5%
above the Bank of England base rate from time to time, payable quarterly in arrears. Any loan under the facility is required
to be fully repaid at the end of the facility term. The Company may repay any such loan early, in part or in full, but may not
re-borrow such amounts.
The Group was invoiced £11,500 (2022: £6,000) by J & K (Cardiff) Limited for property rent. Julian Baines is a Director
and 50% shareholder of J & K (Cardiff) Limited. Julian is non-executive chair of Verici Dx plc, and until February 2023, a
director of Trellus Health plc. The Company owns 0.42% of Verici Dx plc. Mr Baines is interested in 1,351,713 (0.8%) shares
in Verici and 2,375,836 (1.5% ) shares in Trellus.
Mr Young was employed by Trellus in a non-director role until September 2023. He is interested in 55,230 shares in Trellus
and 9,200 shares in Verici.
There are no outstanding balances at 31 December 2023, and during the year there were no sales or purchases, between
the Group and Renalytix or Verici.
Directors’ emoluments are set out in the Remuneration Committee report and in note 10.
78
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notes to the Financial Statements
for the year ended 31 December 2023
Other related party transactions
Sergey Kots who is Chief Executive of OOO EKF Diagnostika (“EKF Russia”), owns 20% of the subsidiary’s share capital.
During the year EKF Russia invoiced £569,000 (2022: £719,000) to OOO Laboratory Diagnostic Systems (“LDS”), a
company of which Mr Kots’ brother is a director. There was no receivable balance outstanding from LDS at 31 December
2023.
Key management compensation
Key management compensation for the year was as follows:
Salaries and other short-term employee benefits
Share-based payments
Employer contribution to pension scheme
Key management includes the Directors of the Company only.
The Company
2023
£’000
789
-
29
818
2022
£’000
934
(298)
15
651
During the year the Company invoiced management charges of £3,196,000 (2022: £3,625,000) to its subsidiary companies.
It also invoiced rental costs to EKF Germany of €167,000 (£138,000) (2022: €167,000 (£138,000)). It sold £97,000
(2022: £23,000) of goods, fixed assets, and services to subsidiaries, and purchased goods and services from subsidiaries
totalling £406,000 (2022: £655,000). At 31 December 2023 the Company was owed £1,779,000 (2022: £1,872,000) by its
subsidiaries and owed £13,346,000 (2022: £14,026,000) to other subsidiaries.
79
Annual Report 2023 | EKF Diagnostics Holdings plc2.0 Notice of Annual General Meeting
EKF Diagnostics Holdings PLC (Company)
NOTICE IS HEREBY GIVEN that the Annual General Meeting (Meeting) of EKF Diagnostics Holdings plc (Company) will be held
at Harwood Capital LLP, 6 Stratton Street Mayfair, London W1J 8LD on 14 May 2024 at 11.00 a.m. for the following purposes:
Ordinary Resolutions
1. To receive and adopt the statement of accounts for the year ended 31 December 2023 together with the reports of the
Directors and the auditors thereon.
2. To re-elect Julian Huw Baines as a Director of the Company.
3. To elect Stephen Michael Young as a Director of the Company.
4. To re-elect Christopher Harwood Bernard Mills as a Director of the Company.
5. To re-elect Jennifer Ann Julia Winter as a Director of the Company.
6. To re-elect Christian Alexander Rigg as a Director of the Company.
7. To re-appoint PricewaterhouseCoopers LLP as auditors to act as such until the conclusion of the next General Meeting
of the Company at which the requirements of section 437 of the Companies Act 2006 are complied with.
8. To authorise the Directors of the Company to determine the auditors’ remuneration.
9. That, in accordance with section 551 of the CA 2006, the Directors be generally and unconditionally authorised to allot
Relevant Securities (as defined below):
a. comprising equity securities (as defined in section 560 of the CA 2006) up to an aggregate nominal amount of
£1,512,435 in connection with an offer by way of a rights issue:
i. to holders of ordinary shares in proportion (as nearly as may be practicable) to their respective holdings; and
ii. to holders of other equity securities as required by the rights of those securities or as the Directors otherwise
consider necessary,
but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to
treasury shares, fractional entitlements, record dates, legal or practical problems in or under the laws of any territory
or the requirements of any regulatory body or stock exchange; and
b. in any other case, up to an aggregate nominal amount of £1,512,435;
provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the conclusion of the
next Annual General Meeting of the Company to be held in 2025, save that the Company may, before such expiry,
make offers or agreements which would or might require Relevant Securities to be allotted and the Directors may
allot Relevant Securities in pursuance of such offer or agreement notwithstanding that the authority conferred by this
resolution has expired.
This resolution revokes and replaces all unexercised authorities previously granted to the Directors to allot Relevant
Securities but without prejudice to any allotment of shares or grant of rights already made, offered or agreed to be
made pursuant to such authorities.
In this resolution, Relevant Securities means:
shares in the Company, other than shares allotted pursuant to:
• an employees’ share scheme (as defined in section 1166 of the CA 2006);
• a right to subscribe for shares in the Company where the grant of the right itself constitutes a Relevant Security;
• a right to convert securities into shares in the Company where the grant of the right itself constitutes a Relevant
Security; or
• anything done for the purposes of a compromise or arrangement sanctioned in accordance with Part 26A of the CA
2006; and
• any right to subscribe for or to convert any security into shares in the Company other than rights to subscribe for or
convert any security into shares allotted pursuant to an employees’ share scheme (as defined in section 1166 of the CA
2006) or anything done for the purposes of a compromise or arrangement sanctioned in accordance with Part 26A of
the CA 2006. References to the allotment of Relevant Securities in this resolution include the grant of such rights.
Special Resolutions
10. That, subject to the passing of Resolution 9 above, the Directors be authorised pursuant to section 570 of the
Companies Act 2006 (the Act) to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the
authority given by resolution 9 and/or to sell equity securities held as treasury shares for cash pursuant to section 727
of the Act, in each case as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this
power shall be limited:
a. the allotment of equity securities in connection with an offer of equity securities (but, in the case of the authority
granted under paragraph a) of resolution 9, by way of a rights issue only):
(i) to the holders of ordinary shares in proportion (as nearly as may be practicable) to their respective holdings; and
(ii) to holders of other equity securities as required by the rights of those securities or as the Directors otherwise
consider necessary,
80
Annual Report 2023 | EKF Diagnostics Holdings plc3.0
Notice of Annual General Meeting
EKF Diagnostics Holdings PLC (Company)
but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation
to treasury shares, fractional entitlements, record dates, legal or practical problems in or under the laws of any
territory or the requirements of any regulatory body or stock exchange; and
b. to the allotment and/or sale (otherwise than pursuant to sub-paragraph (a) above) of equity securities to any person
up to an aggregate nominal value of £453,731, representing approximately 10% of the Company’s issued share
capital,
provided that such power (unless previously renewed, revoked or varied) shall expire at the conclusion of the Annual
General Meeting of the Company to be held in 2025, save that the Company may, before such power expires, make an
offer or enter into an agreement which would or might require equity securities to be allotted after such power expires
and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the
power conferred by this resolution has expired.
11. That, subject to the passing of resolution 9 above, the Directors be authorised in addition to any authority granted
under resolution 10 to allot equity securities (as defined in section 560 of the CA 2006) for cash under the authority
conferred by resolution 9 and/or to sell ordinary shares held by the Company as treasury shares as if section 561 of the
CA 2006 did not apply to any such allotment or sale, provided that such authority shall be:
a. limited to the allotment of equity securities or sale of treasury shares up to an aggregate nominal amount of
£453,731; and
b. used only for the purpose of financing (or refinancing, if the authority is to be used within 6 months after the original
transaction) a transaction which the Directors determine to be an acquisition or other capital investment of a kind
contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-
Emption Group prior to the date of this Notice,
provided that such power (unless previously renewed, revoked or varied) shall expire at the conclusion of the Annual
General Meeting of the Company to be held in 2025, save that the Company may, before such power expires, make an
offer or enter into an agreement which would or might require equity securities to be allotted after such power expires
and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the
power conferred by this resolution has expired.
12. That the Company be and is generally and unconditionally authorised for the purposes of section 701(1) of the 2006
Act to make one or more market purchases (within the meaning of section 693(4) of the Act) on the London Stock
Exchange of ordinary shares of £0.01 each in the capital of the Company (“Ordinary Shares”) provided that:
a. the maximum aggregate number of Ordinary Shares authorised to be purchased is 68,014,211 (representing 14.99 per
cent. of the Company’s issued ordinary share capital excluding treasury shares);
b. the minimum price (excluding expenses) which may be paid for such Ordinary Shares is £0.01 per share;
c. the maximum price (excluding expenses) which may be paid for an Ordinary Share shall not be more than 5 per
cent. above the average of the middle market quotations for an Ordinary Share as derived from The London Stock
Exchange Daily Official List for the five business days immediately preceding the date on which the Ordinary Share is
purchased;
d. unless previously renewed, varied or revoked, the authority conferred shall expire at the conclusion of the Company’s
next Annual General Meeting; and
e. the Company may make a contract or contracts to purchase Ordinary Shares under the authority conferred prior to
the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may
make a purchase of Ordinary Shares in pursuance of any such contract or contracts.
BY ORDER OF THE BOARD
ONE Advisory Limited
Company Secretary
Registered Office
Avon House
19 Stanwell Road
Penarth
CF64 2EZ
19 April 2024
81
Annual Report 2023 | EKF Diagnostics Holdings plc3.0
Notes
1.
2.
3.
4.
The Company specifies that only those members registered on the Company’s register of members at close of business on 10 May
2024 or if this general meeting is adjourned, at close of business on the day two working days prior to the adjourned meeting shall
be entitled to attend and vote at the General Meeting.
If you are a Shareholder of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any
of your rights to attend, speak and vote at the meeting. You can only appoint a proxy using the procedures set out in these notes
and the notes to the proxy form.
You will not receive a hard copy form of proxy with this document. Instead, you will be able to vote electronically using the link www.
signalshares.com. You will need to log into your Signal Shares account, or register if you have not previously done so. To register you
will need your Investor Code, this is detailed on your share certificate or available from our Registrar, Link Group. Alternatively you
can vote by downloading the new shareholder app, LinkVote+, on Apple App Store or Google Play and following the instructions.
Votes submitted electronically must be submitted by no later than 11:00 a.m. on 10 May 2024.
Link Group, the company’s registrar, has launched a shareholder app: LinkVote+. It’s free to download and use and gives
shareholders the ability to access their shareholding record at any time and allows users to submit a proxy appointment quickly and
easily online rather than through the post. The app is available to download on both the Apple App Store and Google Play, or by
scanning the relevant QR code below.
Apple App Store
GooglePlay
5. Proxymity Voting
If you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which
has been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.
proxymity.io. Your proxy must be lodged by 11.00 am on 10 May 2024 in order to be considered valid or, if the meeting is adjourned, by
the time which is 48 hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will need to
have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them
and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be
revoked completely by sending an authenticated message via the platform instructing the removal of your proxy vote.
6.
7.
8.
9.
You may request a hard copy form of proxy directly from the Registrars, Link Group at shareholderenquiries@linkgroup.co.uk or on
Tel: 0371 664 0391. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will
be charged at the applicable international rate. Line are open between 09:00 – 17:30, Monday to Friday excluding public holidays in
England and Wales.
In the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set
out below.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted
by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the
Company’s register of members in respect of the joint holding (the first-named being the most senior).
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for
the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from www.
euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a
service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action
on their behalf.
10. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST
Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications and must
contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted to be
received by the issuer’s agent (ID RA10) by 11.00 a.m. on 10 May 2024. For this purpose, the time of receipt will be taken to mean
the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer’s agent is
able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to
proxies appointed through CREST should be communicated to the appointee through other means.
82
Annual Report 2023 | EKF Diagnostics Holdings plc3.0
11.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK &
International Limited does not make available special procedures in CREST for any particular message. Normal system timings and
limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in
the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
12. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off
time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment
received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and
would like to change the instructions using another hard-copy proxy form, please contact Link Group at the address noted in note 6
above. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of
proxies will take precedence.
13. In order to revoke a proxy instruction you will need to inform the Company by contacting Link Group on 0371 664 0391. Calls
are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Lines are open between 09:00–17:30, Monday to Friday excluding public holidays in England and
Wales. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on
its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which
the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice.
The revocation notice must be received by Link Group no later than 11.00 a.m. on 10 May 2024. If you attempt to revoke your proxy
appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy
appointment will remain valid.
14. Appointment of a proxy does not preclude you from attending the general meeting and voting in person. If you have appointed a
proxy and attend the general meeting in person, your proxy appointment will automatically be terminated.
15. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers
as a member provided that no more than one corporate representative exercises power over the same share.
16. Voting on the resolution will be conducted by way of a poll vote.
17.
As at the close of business on the day immediately before the date of this notice of general meeting, the Company’s issued share
capital (excluding treasury shares) comprised 453,730,564 ordinary shares of nominal value 1 pence each. 1,200,000 ordinary shares
are held in the Treasury. Each ordinary share (excluding treasury shares) carries the right to one vote at a general meeting of the
Company and, therefore, the total number of voting rights in the Company as at close of business, on the day immediately before the
date of this notice of general meeting 453,730,564.
83
Annual Report 2023 | EKF Diagnostics Holdings plc3.0 Directors:
Julian Baines MBE
(Executive Chairman)
Stephen Young
(appointed 12 September 2023)
(Chief Financial Officer)
Christopher Mills
(Non-Executive Director)
Christian Rigg
(Non-Executive Director)
Jennifer Winter
(Non-Executive Director)
Company Secretary:
One Advisory Limited
Registered office and Head office:
Avon House
19 Stanwell Road Penarth Cardiff CF64 2EZ
Place of incorporation:
England and Wales (Company number – 4347937)
Independent Auditors:
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
One Kingsway
Cardiff CF10 3PW
Nominated Advisor and Broker:
Singer Capital Markets
1 Bartholomew Lane London EC2N 2AX
Solicitors to the Company:
BDB Pitmans LLP
One Bartholemew Close
London EC1A 7BL
Berry Smith LLP
Haywood House Dumfries Place
Cardiff CF10 3GA
Registrars:
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
If you have a query regarding your shareholding please call
the Link shareholder helpline on +44 (0)371 664 0300 (UK
calls are charged at the standard geographic rate and will
vary by provider)
or visit their website at https://www.linkgroup.eu/get-in-
touch/shareholders-in-uk-companies/
Financial public relations:
Walbrook PR Limited
4 Lombard Street
London
EC3V 9HD
Investor relations email:
investors@ekfdiagnostics.com
84
Annual Report 2023 | EKF Diagnostics Holdings plc3.0 85
Annual Report 2023 | EKF Diagnostics Holdings plc3.0 86
Annual Report 2023 | EKF Diagnostics Holdings plc3.0 EKF Diagnostics Holdings plc
Tel: +44 (0) 29 20 710570
Email: investors@ekfdiagnostics.com
Avon House, 19 Stanwell Road,
Penarth, Cardiff, CF64 2EZ
ekfdiagnostics.com