Cash generated from operating activities was £1.9 million in the period (2012:
£1.9 million) and net cash outflow was £0.2 million (2012: £0.8 million inflow)
after the acquisition of Inverclyde Biologicals for net £1.4 million (including
transaction costs) and capital expenditure of £0.4 million.
The Healthcare division comprises our Cytology and Diagnostics operations
including cervical cancer screening and diagnostic testing services for cancer
and other diseases.
The division has delivered a strong performance in the period. Revenue of £4.6
million was ahead of the same period last year (2012: £4.4 million) and
divisional operating profit increased by 6% to £1.5 million (2012: £1.4
Our Cytology (cell analysis) operation provides essential systems to the NHS
for the preparation and analysis of cervical smear samples as part of the NHS
Cervical Screening Programme and underpins approximately 50% of the cervical
cancer screening programme in England and Wales.
Implementation of our BD FocalPoint(TM) automated imaging solution for cervical
cancer screening continues. This is the only automated cervical screening
technology which has been approved for use by the NHS in England and Wales and
is the only one of its kind available. The technology can analyse and identify
up to 25% of screening samples that require no primary manual examination,
representing a significant reduction in laboratory workload and improved
turnaround times for reporting to patients.
In February we announced the renewal of the York Teaching Hospital NHS
Foundation Trust liquid based cytology contract, together with the installation
of the seventh BD FocalPoint(TM) platform. The contract is worth £1.3 million over
Our Diagnostics operations provide expert histopathology (tissue analysis),
molecular diagnostics (gene-based analysis) and companion diagnostic testing
services to public and private healthcare providers.
We continually evaluate our Diagnostics offering to ensure it meets the
requirements of our customers and addresses unmet demand in the healthcare
market. For example, the Group has successfully developed and validated
proprietary gene-based assays for use as diagnostic tests for cancer and other
diseases and launched a range of new services based on our existing expertise
and technology platforms.
This expansion of the portfolio of assays, coupled with continued growth in the
core expert histopathology service, generated an increase in Diagnostics
revenue of 40% in the period compared with the same period last year. We
believe the growing demand for gene-based testing for disease strengthens our
commercial advantage as we are one of only a limited number of accredited
laboratories in Europe with the capability to deliver this type of complex
Our expertise in gene-based testing, and significant experience of supporting
the UK Cervical Cancer Screening Programme, was instrumental in Source
BioScience winning the tender to provide testing services to Kent County and
Medway Councils under the National Chlamydia Screening Programme. The contract,
which commenced in August, is for the delivery of over 40,000 tests per annum
and is worth more than £1.0 million over three years. This contract award is an
example of the Group crystallising commercial opportunities which are
complementary to our existing activities and capabilities.