Circadian clocks up $21.8m profit

Veteran biotech investment group Circadian Technologies (ASX:CIR) has posted an AUD$21.77 million profit before tax for the 2004/05 financial year, up from $5.8 million for the previous corresponding year.

The profit is largely due to the disposal of Circadian's interest in Axon Instruments, to US company Molecular Devices, for $26.45 million in a merger transaction. Circadian received approximately 50 per cent of the consideration in cash and approximately 50 per cent in Molecular Devices shares.

While Circadian originally intended to hold onto its Molecular Devices shares as a long-term investment, the increased currency risk of the US dollar during the period led to Circadian selling the shares, resulting in a further $3.49 million gain, offset by a foreign exchange loss of $1.1 million due to the strengthening of the Australian dollar against the US dollar.

The disposal of Circadian's holdings in Axon or Molecular Devices did not attract capital gains tax.

The profit of $5.8 million for the previous corresponding year included a gain from the sale of six million shares in Metabolic Pharmaceuticals (ASX:MBP) in October 2003 for $6.2 million. Circadian still holds 48 million shares in Metabolic -- representing 19.4 per cent of the issued capital in Metabolic.

Circadian also saw an unrealised loss of $4.6 million in the combined book values of its holdings in Amrad Corp (ASX:AML) and Avexa (ASX:AVX) and an unrealised loss of $868,434 in the listed options of Antisense Therapeutics (ASX:ANP).

Although not reflected in this year's financial results, since June 30, 2005, the combined market value of Circadian's holdings in Amrad and Avexa increased by $2.6 million to $17 million.

The market value of Circadian's listed share portfolio was $56 million at August 1, compared with a book value of $19.6 million.

Circadian's operating costs ran to $3.2 million, up from $2.6 million in the previous financial year, and the company had $19.2 million cash to hand at August 1.

Circadian's managing director, Leon Serry, received a salary of $582,084 with superannuation of $52,388 -- the same as for the previous year. Graeme Kaufman, Circadian's executive director, earned $250,435 plus $22,539 in superannuation, up from $240,000 in salary and $21,600 in super in the previous year.

Circadian did not declare a final dividend but shareholders received $0.65 per share during the 2005 financial year, consisting of a capital return of $0.38 and declared unfranked dividends of $0.27.

One of the highlights of Circadian's year was its Alzheimer's disease project, in which it has a 100 per cent interest. The company reported that a number of compounds have been synthesized and tested in the assay system for measuring uptake of compounds into the brain and work is continuing to establish feasibility of the uptake of antisense oligonucleotides into the brain.