REG - RUA Life Sciences - Interim Results

RNS Number : 2502K RUA Life Sciences PLC 30 June 2026  

30 June 2026

RUA Life Sciences plc

("RUA Life Sciences", the "Company" or the "Group")

Interim Results

RUA Life Sciences, the holding company of a group of medical device businesses focused on the exploitation of the world's leading long-term implantable biostable polymer (Elast-EonTM), today announces its unaudited interim results for the six months ended 31 March 2026

Highlights:

·      Post tax loss £183k (H1 2025: £641k loss)

·      Revenue increased 6% to £2,747(H1 2025: £2,589),

·      Strong Gross profit margin of 75% (H1 2025: £74%)

·      Improved adjusted EBITDA £76k (H1 2025: £227k Loss)

·      Cash balance £2,365k (31 March 2025: £3,567, 30 September 2025: £3,250k)

Geoff Berg, Chairman of RUA Life Sciences, commented:

"Over the past two years, management has successfully transformed the business from a heavily loss-making, R&D-stage product company into a customer-focused, profitable Contract Manufacturer. Additionally, two transformative deals have been concluded that will provide value enhancement potential beyond the growth of the Contract Manufacture activities."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596), which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

For further information contact:

RUA Life Sciences                                                                                Tel: +44 (0)1294 317073

Geoffrey Berg, Non-Executive Chairman

Bill Brown, Chief Executive

Lachlan Smith, Group Chief Financial Officer

Cavendish Capital Markets Limited

(Nominated Adviser and Broker)                                                             Tel: +44 (0)20 7220 0500

Giles Balleny/Isaac Hooper (Corporate Finance)

Harriet Ward (Broking)

Nigel Birks (Healthcare Specialist Sales)

Michael Johnson (Sales)

About RUA Life Sciences

RUA Life Sciences plc is the ultimate parent company of the Group, whose principal activities comprise exploiting the value of its IP & know-how, medical device contract manufacturing and development of medical devices.

CHAIRMAN'S STATEMENT

I am pleased to present the interim statement for the six-month period to 31 March 2026. These interim results demonstrate the continuing progress being made in developing a profitable Medical Devices and Components business, but do not reflect the strategic value creation in other assets within the group, in particular RUA Structural Heart ("RSH"), which completed a highly successful third-party fundraise and spin-out shortly after the period end.

Revenue

In the six months to 31 March 2026, Group revenues grew by 6.1% from £2,589k to £2,747k and are now double the level from two years ago.

The key drivers were:

·      The Medical Devices and components business contributed £2,253k to Group revenue compared to £2,240k in 2025. New development contracts enabled the UK business to grow revenue by 32%, but Abiss France experienced a decline in revenue due to its major customer holding excess inventory of Abiss products and undergoing a period of rationalisation.

·      The majority of revenue growth came from the Biomaterials business, with revenue increasing from £349k to £490k, including historical underpayments identified following the audit of royalties from licensees.

Gross Margin

Gross Profit margins increased from the 73.5% achieved in the six months to March 2025 to 74.9%. Over the eighteen-month period to 30 September 2025, Gross Profit margins were 78.5% and the reduction experienced during the period to 31 March 2026 is explained by the reduced activity levels at Abiss France, a higher proportion of the UK medical devices and components business being development contracts which tend to be lower margin than manufacturing contracts, offset by the near 100% margin Biomaterials business increasing from 13.5% to 17.8% of total Group revenue.

Administrative Expenses

Despite general inflationary pressures, costs within the business were carefully controlled, and total Administrative expenses fell 6.2% to £2,314k from £2,476k in the comparative period.

Operating Loss

Compared to the same period last year, the operating loss of £234k represented a reduction of 66%. Adjusted for amortisation, depreciation, share-based payments and other non-cash items (Adjusted EBITDA), a profit of £76k was achieved, a £303k improvement over the £227k loss reported for the period to 31 March 2025.

Balance Sheet

Net working capital (Current assets less Current liabilities) was stable at £4,234k (30 September 2025; £4,232k) with a £300k reduction in Current assets offset by a £302k reduction in current liabilities. Cash, however, was reduced by £885k with receivables increasing as part of the working capital cycle. The cash position is expected to increase by the year-end as the negative working capital effects reverse.

Strategic Developments

The core of the Group is its contract manufacture of medical devices and components together with the Biomaterials licensing business. These businesses, combined, are not only profitable in their own right but are expected to cover all central costs and move the Group into net profitability. The growth strategy over the past two years has been very successful, as evidenced by revenue growth to date, and a number of Development contracts currently underway have the potential to drive further growth on the manufacturing side of the business. Having succeeded in our objective of doubling revenue over the past two years, we now have the opportunity to further double revenue over the next two years.

Other opportunities for value enhancement have been created through identifying strategies to exploit Group IP.

RUA Structural Heart (RSH)

The Board was delighted to announce the spinout and third-party funding of RSH on 12 May 2026. This is a very significant deal which not only validates the clinical and commercial potential of AurTex™, a platform technology, but also independently funds the entire activities of RSH through pre-clinical development.  RSH has developed a novel cardiovascular composite that addresses the three fundamental failure modes of existing valve technologies: thrombosis, calcification, and structural leaflet failure. RSH intends to prove the platform clinically in an underserved and vast rheumatic heart disease valve sector and then expand through licensing and partnerships into the global surgical and TAVR valve markets. The strategy is driven by platform technology companies commanding significantly higher valuations than product technology companies, and the potential to allow the creation of next-generation valves is very attractive.

RSH now has a Board independent of the Group, including private equity investors and recognised US-based experts in developing and commercialising heart valve technology. As a result of this "loss of control", RSH will now be treated as an investment rather than have its losses during the development phase consolidated into group results. As an investment, the funding deal set a £10 million valuation floor for the next round of financing. Ambitions for value creation are driven by deal history for other heart valve technologies that have achieved £40 million pre-money valuation at the end of pre-clinical development and over £1 billion exit values for TAVR platform technology.

Abiss

There are two key components of Abiss: a contract manufacturing business supplying finished products to a major US-based customer, together with a product portfolio of its own in the area of stress urinary incontinence and pelvic floor repair.

The product portfolio has not been actively exploited to date out of concern for conflict with its customer. RUA has, however, engaged with the customer to ensure a strategy is in place to secure their product supply and allow Abiss to refocus the business on its product portfolio across the key European markets.

A new business model is now being developed for Abiss to enable a two-year transition from a contract manufacturing business to a Europe-focused urogynaecology specialist providing next-generation pelvic floor solutions, with the ambition of replicating the success achieved in Poland. A product pipeline is already in place with approved products, next-generation products benefitting from clinical data and a "frozen" technical file ready for submission and other early-stage development opportunities. RUA believes the Abiss portfolio makes a compelling investment case and the model adopted for RSH of introducing third party investors to drive and add value to its investment in Abiss will be considered alongside other options.

Conclusion and Outlook

Over the past two years, management has successfully transformed the business from a heavily loss-making, R&D-stage product company into a customer-focused, profitable Contract Manufacturer.  Additionally, management has been very mindful of the value of the Group's IP developed during its R&D stage and, with selective investment, has enabled deals to be done that both grow the business and provide substantial future upside potential.

The core of RUA will remain its Biomaterials and Medical Device and Components activities, which together should make the Group profitable in the second half of the current year. Unusually for a small business, an investment portfolio is being developed in addition to the core business to provide the potential for a level of return not normally achievable in pure manufacturing businesses. An opportunity to exploit the vascular graft technology has still to be identified but no further investment is being made in that area. This is probably the main disappointment since the new strategy was adopted, however the RSH spin-out has the makings of being a very valuable investment, and the acquisition of Abiss delivers a product portfolio that can be separately exploited.

Geoff Berg, Chairman

29 June 2026

CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONDENSED INTERIM CONSOLIDATED CASH FLOW STATEMENT

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.   Reporting entity

The interim consolidated financial statements cover the consolidated entity RUA Life Sciences plc and the entities it controlled at the end of, or during, the interim period to 31 March 2026 ("the Group").

RUA Life Sciences plc ("the Company") is a public limited company and is domiciled and incorporated in Scotland with number SC170071. The Company is listed on the AIM market of the London Stock Exchange (ticker: RUA, ISIN: GB0033360586)

The registered office is

2 Drummond Crescent

Irvine

Ayrshire

KA11 5AN

RUA Life Sciences plc is the ultimate parent company of the Group, whose principal activities are the contract design and manufacture of medical devices and the exploitation of the value of its IP and know-how.

2.   Basis of preparation

The condensed consolidated financial statements comprise the unaudited results for the six months ended 31 March 2026 and 31 March 2025, together with the audited results for the period ended 30 September 2025. The financial information contained in this interim report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006.

These condensed consolidated interim financial statements have been prepared in accordance with the requirements of IAS 34, "Interim Financial Reporting". They do not include all of the information required for full annual financial statements and should be read in conjunction with the audited consolidated financial statements of the Group for the period ended 30 September 2025, which have been filed with the Registrar of Companies.

The condensed consolidated interim financial statements have been prepared using the accounting policies set out in the Group's audited consolidated financial statements for the period ended 30 September 2025 and in accordance with the recognition and measurement principles of IFRS issued and effective at that date. The accounting policies have been applied consistently throughout the Group.

The Group's trading operations are not materially seasonal or cyclical; however, working capital requirements are typically higher in the six-month period to March. There were no material changes in estimates or unusual items during the six months ended 31 March 2026, other than as disclosed in these condensed consolidated interim financial statements.

The figures for the period ended 30 September 2025 have been extracted from the audited statutory accounts, which were approved by the Board of Directors on 29 January 2026. The Independent Auditor's Report on those financial statements was unqualified and did not contain any statements under sections 498(2) or 498(3) of the Companies Act 2006.

The financial information is presented in pounds Sterling, which is the functional and presentational currency of the Group. Balances are rounded to the nearest thousand pounds (£'000), except where otherwise indicated.

The condensed consolidated interim financial statements were approved by the Board of Directors on 29 June 2026.

Going concern

The Directors have considered the applicability of the going concern basis in the preparation of the financial statements. This included the review of financial results, internal budgets and cash flow forecasts for the period of at least 12-months following the date of approval of these interim financial statements.

In assessing whether the going concern assumption is appropriate, the directors have considered the Group's existing working capital and are of the opinion that the Group has adequate resources to undertake its planned program of activities for at least the 12-month period from the date of approval of these financial statements.

Principal Risks and Uncertainties

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 24-26 of the Annual Report 2025, a copy of which is available on the Company's website www.rualifesciences.com

Profit/(Loss) per share

Profit/(Loss) per share has been calculated on the basis of the result for the period after tax, divided by the weighted average number of ordinary shares in issue in the period of 62,060,272.  (31 March 2025: 62,060,272 and 30 September 2025: 62,060,272).

Alternative Performance Measures

The Group uses adjusted EBITDA as an alternative performance measure to monitor underlying trading performance. Adjusted EBITDA is calculated as operating loss before depreciation, amortisation, share-based payments and other non-cash items, including fair value movements and gains arising from business combinations.

Dividends

No dividends were paid or proposed during the six months ended 31 March 2026.

3.   BUSINESS SEGMENTS AND REVENUE ANALYSIS

The principal activity of the RUA Life Sciences Group comprises exploiting the value of its IP & know-how, medical device manufacturing and development of cardiovascular devices.

The following analysis by segment is presented in accordance with IFRS 8 on the basis of those segments whose operating results are regularly reviewed by the Chief Operating Decision Maker (considered to be the Chief Executive Officer) to assess performance and make strategic decisions about the allocation of resources. Segmental results are calculated on an IFRS basis.

A brief description of the segments of the business is as follows:

·      Biomaterials - Licensor of Elast-EonTM polymers to the medical device industry.

·      Medical Devices and Components - End-to-end contract developer, manufacturer, and seller of medical devices and implantable fabric specialist.

·      Vascular - Development and commercialisation of the Group's Elast-Eon sealed Vascular Graft products.

·      Structural Heart - Development of the Group's Elast-Eon composite heart valve material AurTexTM.

Operating results which cannot be allocated to an individual segment are recorded as central and unallocated.

Segment revenue represents revenue from external customers arising from the sale of goods and services. Segment results, assets, and liabilities include items directly attributable to a segment as well as those that can be reasonably allocated.

The Group's revenue from continuing operations to destinations outside the UK amounted to 100% (6 months to 31 March 2025: 100%; 18-month period to 30 September 2025: 100%). The revenue analysis below is based on the country of registration of the customer:

Disaggregation of Revenue:

The Group's unaudited revenue for six months to 31 March 2026 is segmented as follows:

The Group's unaudited revenue for six months to 31 March 2025 is segmented as follows:

The Group's audited revenue for eighteen months to 30 September 2025 is segmented as follows:

The Group's unaudited segmental analysis for six months to 31 March 2026 is segmented as follows:

The Group's unaudited segmental analysis for six months to 31 March 2025 is segmented as follows:

The Group's audited segmental analysis for 18 months to 30 September 2025 is segmented as follows:

4.     OTHER INCOME

5.     GOODWILL

Goodwill arose on the acquisition of RUA Medical Devices Limited in April 2020.

No impairment review has been carried out in the six-month period.

6.

OTHER INTANGIBLE ASSETS

7.   PROPERTY, PLANT AND EQUIPMENT

Included in the net carrying amount of property plant and equipment are right-of-use assets as follows:

8.  INVENTORIES

Inventories consist of the following:

9. TRADE AND OTHER RECEIVABLES

10.  CASH AND CASH EQUIVALENTS

11. BORROWINGS & LEASE LIABILITIES

£12,000 of bank loans is an unsecured government support loan. Unsecured bank loans carry an effective interest rate of 9%.

The lease liabilities are secured by the related underlying assets. Lease borrowings carry fixed interest rates ranging from 4.0% to 9.6%.

Reconciliation of change in lease liabilities:

12. TRADE AND OTHER PAYABLES

Deferred grant income is included within other liabilities in the consolidated statement of financial position, £29,000 (2025: £29,000) is included in current liabilities, and £29,000 (2025: £58,000) is included in non-current Liabilities.

13. SUBSEQUENT EVENTS

On 11 May 2026, following completion of the spinout financing announced by the Company on 12 May 2026, the Group lost control of RUA Structural Heart Limited ("RSH") for the purposes of IFRS 10 Consolidated Financial Statements. Although the Group retains 100% of RSH's ordinary equity share capital, RSH will cease to be consolidated from that date and will instead be accounted for as an investment.

As this occurred after the period end, it has been treated as a non-adjusting subsequent event, and no adjustment has been made to the interim financial information for the period ended 31 March 2026.

14.  ISSUED SHARE CAPITAL

The Company's issued share capital as at 31 March 2026 comprises 62,060,272 Ordinary Shares of which none are held in treasury.

No ordinary shares were issued, repurchased or cancelled during the period.

15. INTERIM ANNOUNCEMENT

The interim results announcement was released on 30 June 2026.  A copy of this Interim Report is also available on the Group's website www.rualifesciences.com.

BOARD OF DIRECTORS AND ADVISORS

Registered in Scotland, company no.SC170071

Financial statements will be available to Shareholders from the company website, along with copies of the announcement.  Dealings permitted on Alternative Investment Market (AIM) of the London Stock Exchange.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.  END  IR AKCBPABKDDAB