After reducing interim losses 40 per cent to £181,000, Source BioScience says capital restructuring would enable dividend payments or a buy-back.

The fully listed company, which provides services and products to healthcare, pharmaceutical and biotech concerns, increased turnover 90 per cent to £5.9 million in the six months to June, though higher selling, distribution and administration expenses kept it in the red.

Source BioScience, which changed its name from Medical Solutions earlier this year and bought cash-generative life sciences outfit Autogen Bioclear UK for up to £5.9 million, ended the first half year with £8.3 million cash and is now generating cash itself.

Executive chairman Laurie Turnbull argues the company’s ‘robust’ interim performance ‘underpins confidence in the continued improvement in the financial performance of the group for the full year’.

As well as acquiring Autogen, Source also invested in the Illumina Inc next-generation DNA sequencing and genotyping platforms, thus becoming ‘the UK’s first commercial service provider for these leading edge technologies’.

By the end of 2007, Source had an accumulated deficit of £21.7 million on its profit and loss account, reflecting losses on disposal of subsidiaries, and a balance of £32.3 million on its share premium account.

This prevents the company from either paying dividends or buying in its own shares, both of which Turnbull says are ‘important components of the board’s strategy to deliver value to shareholders’.

Therefore, Source is to ask shareholders to approve a capital restructuring which would enable it to do either or both. Its shares, which fell from 9.25p in 2005 to 4.13p earlier this month, now stand at 6.13p, valuing the company at £12.5 million.

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Source BioScience	LSE	£10.19m	5.00p	0.00p
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Source BioScience plans restructure			28/08/2008