AIM Rule 26

The information below is disclosed in accordance with Rule 26 of the AIM Rules and was last updated on 31st October 2017.

The Company is incorporated in France with registered no. 491 062 527.

In addition, it has direct and indirect subsidiaries and a branch based in the UK, with further operations in the US and in Asia Pacific and its products are distributed to and sold across multiple jurisdictions.

The Company is admitted to trading on the AIM market of the London Stock Exchange and listed on Euronext Growth Paris.

The Company is subject to the applicable laws and regulations of France, as well as the regulatory framework that applies to the French and AIM stock markets. The Company also intends to comply with the provisions of the QCA Code as far as is practical for a company of its size and nature and stage of its development.

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Novacyt is a rapidly growing, international diagnostics group, generating revenues from the sale of clinical products used in oncology, microbiology, haematology and serology testing. The Group has considerable experience in the development, manufacture and commercialisation of molecular, protein and whole-cell diagnostic products and aims to become a leader in developing new products for the infectious disease and oncology testing markets. The Group has a strong intellectual property portfolio and considerable product and process ‘know-how’ in the key technologies used across its operating segments.

It is a commercially-led business operating through three divisions: Primerdesign; NOVAprep®; and, Lab21.

The Board comprises of two Executive Directors and five Non-executive Directors.

James Wakefield
Independent Non-executive Chairman

James is an experienced private equity investor, having spent over 30 years in the finance industry. He has been involved with over 30 businesses of varying sizes and stages of development across a wide range of sectors, including board representation as chairman or non executive director in a number of these. He is also chairman of Promedics Orthopaedics Limited.

Graham Mullis
Chief Executive Officer

Graham was appointed Chief Executive Officer of Novacyt in 2014, having previously been chief executive officer of Lab21 since 2008. He has over 30 years of experience in the healthcare, pharmaceuticals and medical device market.

Over the years, he has led multiple successful exits, including that of Biocompatibles Eyecare, ClearLab, VisionTec and Optivue. Previous roles have included acting as a C-level executive with Biocompatibles International plc, a FTSE 250 company, and 1-800 CONTACTS, a NASDAQ-listed company.

He holds degrees in BSc Biochemistry & Physiology from Southampton University, United Kingdom and an MBA Business Administration from Warwick Business School, United Kingdom.

Anthony Dyer
Chief Financial Officer

Anthony joined the Group in 2010 and has been Chief Financial Officer since January 2017. He has 17 years of experience in healthcare, pharmaceuticals and medical devices, working primarily with growth companies and executing M&A.

Transactions executed include RiboTargets’ combination with British Biotech, BioFocus’ combination with Galapagos and Galapagos’ e130 million divestment of its service division to Charles River Laboratories.

He holds a BSc (Hons) degree in Maths and Management Science from University of East Anglia, United Kingdom. He is a Fellow of the Association of Chartered Certified Accountants (FCCA).

Andrew Heath MD, PhD
Independent Senior Non-Executive Director

Andrew is a healthcare and biopharmaceutical executive with in-depth knowledge of the US and UK capital markets, with international experience in marketing, sales, R&D and business development. In addition to his role as Non-executive Director for Novacyt since 2015, he is currently the chairman of Shield Therapeutics plc, vice chairman and senior independent director of Oxford Biomedica plc and director of IHT LLC.

From 1999 to 2008, he was the chief executive officer of Protherics plc, taking the company from 30 to 350 members of staff and managing its eventual acquisition by BTG Plc for £220 million. Prior to this, he served as vice president of marketing and sales for Astra Inc in the US and worked within clinical and academic medicine at Vanderbilt University. He is also a former director of The BioIndustry Association.

He graduated in medicine from University of Gothenburg, Sweden, where he also completed his doctoral thesis in human toxicology. He is a fellow of the American Academy of Clinical Toxicology and a fellow of the UK Institute of Directors (IOD).

Dr Ed Snape
Independent Non-Executive Director

Ed has over 40 years of experience in founding, investing in and guiding the development of many public and private healthcare and specialty materials companies. He is a co-founder of NMT Capital (a successor of Nexus) and continues to work as one of its senior advisers. He is also a senior adviser to Maruho Co., Ltd, a director of SAI Holding Company and a co-owner of Nexus Medical, LLC, the general partner of Nexus Medical Partners II, L.P.

Prior to NMT Capital, Ed was managing general partner of The Vista Group, a leading east coast venture capital firm, chairman of Orien Ventures, a private equity firm with Pacific Rim affiliations; and, a director of the Cygnus Funds, two UK-based private equity firms specialising in investments throughout Europe. He was also a founder of a fund based in Indonesia. Early in his career, he founded the Liposome Company, which listed and was later sold to Elan Corporation for over US$500 million.

Over the years, he has been a recipient of several awards in the material sciences industry, including the AB Campbell Award and the Hunt Silver Medal. He also holds several patents in the advanced materials field where he has pioneered various technological innovations and authored numerous technical papers.

He holds BSc and PhD degrees in metallurgy from Leeds University, United Kingdom.

Jean-Pierre Crinelli
Non-Executive Director

Jean-Pierre is one of Novacyt’s founders when the business was established in July 2006. He has some 30 years of experience in the car and electrical components industry, with various roles in M&A and business restructuring. During this period, he was located for 10 years in Singapore,  North America, Belgium and Italy.

He holds a Diplôme from ESC Le Havre (regional business school, France) and DECS (Diplôme d’Etudes Comptables Supérieures, national diploma).

Juliet Thompson
Independent Non-Executive Director

Juliet has a 20 year track record of advising listed healthcare companies in the UK and in Europe as an investment banker, and was formerly a managing director with Nomura Code. She has extensive experience within equity fund raisings and M&A.

In addition to her role as Non-executive Director with the Company since 2017, she is currently non-executive chairman of Premier Vet Group plc, a company listed on the London Stock Exchange, non-executive director of Nexstim Plc, a listed Finnish medical technology company and a non-executive director of GI Dynamics Inc, a US based company.

She holds a BSc degree in Economics from Bristol University, United Kingdom, and is a qualified accountant with the Association of Chartered Accountants.

The Directors recognise the value and importance of high standards of corporate governance and intends to comply with the provisions of the QCA Corporate Governance Code (the “QCA Code”). At this present time, the Board believes we are fully compliant with the QCA Code. Certain features of the Company’s corporate governance arrangements are detailed below.

The Board

The Board is responsible to the Company’s shareholders and sets the Group’s strategy for achieving long-term success. It is ultimately responsible for the management, governance, controls, risk management, direction and performance of the Group.

The Board comprises seven members, of which five are Non-executive Directors, being James Wakefield, Dr Andrew Heath, Dr Ed Snape, Jean-Pierre Crinelli and Juliet Thompson.

The Non-executive Directors are appointed to act in the best interests of the Company, and when relevant, appropriately record their concerns about the running of the Company. The Board considers that the Non-executive Directors bring a wide experience at a senior level of business operations and strategy and have an expanse of knowledge and expertise gained from other areas of business.

Jean-Pierre Crinelli was previously an executive director and a substantial shareholder of the Company and is therefore not considered independent. All other Non-executive Directors are considered independent for the purpose of the QCA Code, as none have beneficial or non-beneficial shareholdings in the Company exceeding 3 per cent., nor receive remuneration other than in cash or shares, nor have an existing tenure of more 12 years.

Dr Ed Snape is a co-owner of Nexus Medical, LLC, the general partner of Nexus Medical Partners II, L.P., which has a current shareholding in the Company of less than 3 per cent. Accordingly, the Directors consider that Dr Ed Snape satisfies the independence criteria as set out in the QCA Code.

The Board is responsible to shareholders for:

  • setting the Group’s strategy;
  • maintaining the policy and decision-making process around which the strategy is implemented;
  • ensuring that necessary financial and human resources are in place to meet strategic aims;
  • monitoring performance against key financial and non-financial indicators;
  • providing leadership whilst maintaining the controls for managing risk;
  • overseeing the system of risk management; and
  • setting values and standards in corporate governance matters.

Each year, the Board approves a budget for the following calendar year and agrees personal objectives for each of the two Executive Directors. The approved budget is then used to cascade business and personal objectives to other members of the Executive Team and to every employee of the Group, an approach which ensures consistency and alignment of the entire organisation to the business planning process.

The Board reserves for itself a range of key decisions to ensure that it retains proper direction and control of the Group, and a formal schedule of matters reserved for decision by the Board has been adopted by the Board since Admission. This schedule may be updated by the Board and approved by the Board only. The day-to-day management of the business has been delegated to the Chief Executive Officer and the wider Executive Team.

The Chairman is responsible for leading the Board, facilitating the effective contribution of all members and ensuring that it operates effectively in the interests of the shareholders, whilst the Chief Executive Officer is responsible for the leadership of the business and implementation of the strategy.

The Directors meet at least nine times per year for formal Board meetings to discuss and decide the Group’s business, financial performance and strategic decisions. In addition, and as required, the Board meets more frequently by conference call to discuss and decide on matters considered more urgent, such as those relating to acquisitive growth.

The Board is committed to a formal annual Board evaluation involving completion of an annual appraisal form by each Board member reviewing the structure, behaviour, process, committees and profile of the Board.

All members of the Board retire by rotation in accordance with the Articles. At each annual general meeting of the Company, each Director who has served three years retires from office. A Director who retires at an annual general meeting may, if willing to act and upon proposal of the Board, be reappointed by resolution of the Shareholders.

The Directors understand the importance of complying with the rules and regulations both in the UK and in France relating to dealings by Directors and other applicable employees in Shares. The Directors therefore intend to comply, and procure compliance with, Rule 21 of the AIM Rules for Companies relating to dealings as well as the Market Abuse Regulation. (EU No. 596/2014) and the Company has adopted an appropriate share dealing code.

The Company has a strong commitment to market communication, with the Directors seeking to be accountable against the stated strategic objectives of the Group. The Company maintains regular contact with shareholders through publications such as the annual report and accounts, operational updates, regular press announcements made via a regulatory information system and the Company’s website, www.novacyt.com. The Company is responsive to shareholder telephone and email enquiries throughout the year.

The Board regards the annual general meeting as a particularly important opportunity for shareholders, members of the Board and the Executive Team to meet and exchange views.

As an existing listed company on Euronext Growth Paris, the Company already has in place an Audit Committee, a Remuneration Committee and a Nominations Committee. The terms of these committees have been updated to reflect market practice on AIM. These committees of the Board have formally delegated responsibilities. Further details of these are set out below.

Audit Committee

The Audit Committee’s primary responsibility is to monitor the quality of internal controls and ensure that the financial performance of the Group is properly measured and reported on. It receives and reviews reports from the Executive Team and external auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group.

The Audit Committee meets as appropriate, but not less than twice a year and it has unrestricted access to the Company’s external auditors.

The Audit Committee comprises at least two members, with at least one Non-executive Director considered independent, including the Chair. In addition, the Chief Financial Officer, and other members of the Executive Team as required, may be in attendance. The current members of the Audit Committee are Juliet Thompson (Chair) and Jean-Pierre Crinelli.

Remuneration Committee

The Remuneration Committee determines performance related targets for the members of the Executive Team, reviews their performance and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee meets as appropriate but not less than twice a year.

The Remuneration Committee will also make recommendations to the Board on proposals relating to all long-term incentive scheme structures and any future option schemes and the granting of any share options under such schemes. The remuneration and terms and conditions of appointment of the Non-executive Directors are set by the Board.

The Remuneration Committee comprises at least two members, and all members are Nonexecutive Directors considered independent. The current members of the Remuneration Committeeare Dr Andrew Heath (Chair), Dr Ed Snape and Juliet Thompson.

Nomination Committee

The Nomination Committee will identify and nominate for the approval of the Board candidates to fill Board vacancies as and when they arise. The Nomination Committee meets as appropriate, but not less than twice a year.

The Nomination Committee comprises at least two members, and all members are Non-executive Directors considered independent. The current members of the Nomination Committee are James Wakefield (Chair), Juliet Thompson and Dr Andrew Heath.

Corporate social responsibility

The Group recognises the importance of retaining experienced professionals across all areas of the business in order to deliver its strategic aims with high standards of practice throughout.

The Group is committed to maintaining the highest standards of corporate social responsibility in its business activities by aiming to:

  • comply with all applicable laws and regulations, wherever the Group operates;
  • achieve and comply with relevant quality and people management standards;
  • consult with and respond to the concerns of its stakeholders;
  • work towards realising the Group’s mission and vision statements; and
  • behave with honesty and integrity in all the Group’s activities and relationships with others and reject bribery and corruption in all its forms.

Health and safety

The Group is committed to complying with all relevant health and safety regulations to its operations. As such, the Group has adopted a Health & Safety Policy which forms part of the Company Handbook issued to all employees upon commencement of employment within the Group. The overall responsibility for the policy is with Anthony Dyer.

The policy sets out arrangements and responsibilities across the Group and includes aspects such as: emergency procedures; security recommendations; accidents/incidences and first aid; manual handling/ lifting and moving; work-related upper limbs disorders (including strains to hands and arms); display screen equipment/visual display equipment; alcohol & drugs policy; and, smoking policy.

Environment

The Directors consider that the nature of the Group’s activities is not detrimental to the environment. The Group is committed to minimising any effect on the environment caused by its business operations. The Group maintains necessary levels of quality control and quality assurance standards throughout its laboratories, through the application of its quality management systems as demonstrated by its international standards, which include ISO 15189: 2012 in France in addition to three manufacturing facilities in the UK holding ISO 15189: 2012 & 9001, plus a clinical laboratory holding CPA and ISO 9001.

Risk management and internal control

The Board has overall responsibility for the Group’s system of internal control and for reviewing the effectiveness of internal control to safeguard shareholders’ investment and the Group’s assets. There is an ongoing process for identifying, evaluating and managing the significant risks the Group faces. The Board regularly reviews the process which has been in place throughout the period and up to the date of approval of the Annual Report and Accounts.

The Board delegates to the Executive Team the responsibility for designing, operating and monitoring both the systems and the maintenance of effective internal controls within the Group. The Company also has a whistleblowing policy.

The systems and controls in place include policies and procedures which relate to the maintenance of records which fairly and accurately reflect transactions, correctly evidence and control the Group’s assets, provide reasonable assurance that transactions are recorded as necessary to enable the preparation of financial statements in accordance with International Financial Reporting Standards (IFRS), and review and reconcile reported results.

The Group’s key internal controls are:

  • clear guidelines for the authorisation of significant transactions, including capital expenditure and disposals under defined levels of authority, which are formalised in the Group’s Authorisation Policy & Procedures Manual;
  • a formal risk register, which is regularly reviewed and updated;
  • regular review of the Group’s insurance policies with its insurance broker to ensure that the policies are appropriate for the Group’s activities and exposures;
  • a comprehensive system for consolidating financial results from Group companies and reporting these financial results to the Board;
  • cash flow, annual revenue and capital forecasts reviewed regularly during the year, regular monitoring of management accounts and capital expenditure reported to the Board and comparisons with forecasts;
  • financial controls and procedures, including in respect of bank payments, bank reconciliations and petty cash;
  • payroll is outsourced; monthly review of outstanding debtors regular meetings of the Executive Team; and
  • an Audit Committee which approves audit plans and published financial information and reviews reports from the external Auditor arising from the audit and deals with significant control matters raised.

Risk management is focused around the operational areas of the Group. The Group has a dedicated Regulatory Affairs and Quality Assurance Director who has extensive operational experience at senior management and board levels, and particularly strong experience in quality system development and regulatory compliance. He is responsible for a Regulatory Team operating across the Group, working at identifying and prioritising operational risks and working with the operational teams to mitigate the identified risks. This work is supported by the Risk Assessment Procedure in place across the Group, with the objective to ensure that risk assessment of the Group’s equipment, procedures and processes is approached consistently across the Group.

With the assistance of the Audit Committee, the Board’s review process is principally based on reviewing regular reports from the Executive Team to consider whether significant risks are identified, evaluated, managed and controlled effectively, and whether any significant weaknesses are promptly remedied. The system is designed to manage rather than eliminate the risk of failure to achieve the Company’s objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. In assessing what constitutes reasonable assurance, the Board considers the materiality of financial and non-financial risks and the relationship between the cost of, and benefit from, internal control systems.

The Company recognises the importance of investing in its employees to provide foundations and leadership to drive performance further, regardless of age, race, religion, gender or sexual orientation or disability. Our core company values are the building blocks for developing our dynamic and challenging culture within the Group.

These values represent our philosophy which through our people and organisation will help the business deliver our company goals. The values represent how each of us can contribute to the success of the Company both now and in the future as an individual and also as part of the wider team.

  • To treat each other with trust, dignity and respect.
  • Enabling, empowering and energizing others to make things happen.
  • Work as a team with colleagues and across functions.
  • Innovation, inspiration and motivation, creating an open culture where people are valued for their contribution.
  • Lab21 endeavours to deliver the best quality service to all of our internal and external customers.

Novacyt S.A. is listed on the Euronext Growth Paris (formerly known as Alternext Paris) and is admitted to trading on the AIM market of the London Stock Exchange.

  • AIM securities in issue: 7,188,822
  • Euronext securities in issue: 30,475,519
  • The percentage of AIM securities not in public hands at admission was 13.5%

The Company’s significant shareholders are:

Shares held %
Unregistered         18,987,986 50.4%
ABN AMRO           4,152,175 11.0%
Vatel Capital           3,431,066 9.1%
Talence Selection PME           2,643,313 7.0%
Legal & General Group           2,525,909 6.7%
Alto Invest           1,961,447 5.2%
Other AIM CDI holders           1,366,380 3.6%
UK legacy (registered)           1,467,130 3.9%

 

Rule 17 of the AIM Rules requires, inter alia, that shareholders notify an AIM listed company once their holding is three per cent or more, and changes thereto (movements through a percentage point upwards or downwards).

Last updated on 31/10/17

The rights of the Company’s shareholders may be different from the rights of shareholders in a UK incorporated company

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The Company is not subject to the UK City Code on Takeovers and Mergers. However, French law contains provisions relating to takeovers of certain companies, including the Company.

The General Regulation of the Autorité Des Marchés Financiers of France (the AMF) applies to the Company, as it is a public limited company whose shares were first admitted to trading on Euronext Growth Paris, if an acquisition of hares in such a company were to increase the aggregate holding of the acquirer and its concert parties to interests in shares carrying 50 per cent. or more of the share capital or voting rights in the company, the acquirer and its concert parties would be required (except with the consent of the AMF) to make a cash offer for the outstanding shares at a price not less than the highest price paid for the shares by the acquirer or its concert parties during the previous twelve months.

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