Newcastle-based SkinBioTherapeutics has adjusted its accrued royalty revenue for FY25 after an independent review found that the figure previously identified was fabricated by the firm’s former chief executive, the business said. The investigation has now concluded and the company’s interim chair said a “series of operational improvements” have been instigated.
Earlier this year the board of SkinBioTherapeutics appointed FRP Advisory to undertake an “independent, forensic review” into the alleged conduct of its former chief executive.
SkinBioTherapeutics said it had reason to believe Stuart Ashman had “misrepresented material information to the board and senior management, the company’s auditors and advisors”.
The business said that information received late on Friday 13 February 2026 “cast significant doubt on the validity of the accrued royalty income recorded in the audited accounts for the year ended 30 June 2025”.
The findings from the report have now been published, and reveal that accrued royalty revenue of £770,000 was inappropriately recognised in the audited FY25 financial statements, necessitating a downward adjustment to the previously reported audited FY25 revenue, from £4.64m to £3.87m.
No other issues related to revenue were identified
Documentation provided as support for the FY25 accrued royalty revenue was identified by FRP as fabricated by the former chief executive. No evidence has been identified to indicate that anyone else was involved or aware of the fabrication
A number of other matters were identified during the investigation including the award, payment and timing of accounting for bonuses and associated consultancy payments, in FY24 and FY25.
FRP found that bonuses and consultancy payments paid to certain members of the board at the time had not been accrued in the correct financial year.
Bonuses paid to Martin Hunt and Dr Cathy Prescott have subsequently been repaid voluntarily and will be reflected in the FY26 results accordingly.
No issues were found with the group’s reported cash balances.
The report said that weaknesses in corporate governance and processes were “evident”.
In an update on the London Stock Exchange, SkinBioTherapeutics said: “The board had implemented a number of measures to strengthen corporate governance even before the FRP report was completed. A detailed list of actions has been produced for implementation. SkinBio’s advisors as well as the Independent Investigators have summarised their recommendations that are being incorporated into this detailed exercise.”
The company added that, following a period of significant change, Martin Hunt, chairman, and Dr Cathy Prescott, non-executive director, have both stepped down from the board.
The role of interim chair will pass to Alyson Levett, who together with Rachel Parsonage, interim chief executive and Emily Bertram, chief financial officer, will comprise the board. The company intends to appoint new non-executive directors.
Elsewhere, the company has reported an update for the six months ended 31 December 2025.
It said stable underlying demand has been seen within Dermatonics, reflecting underlying demand from the NHS and high street retailers. AxisBiotix has also seen success after launching in Superdrug.
Levett said: “The start of the new financial year showed encouraging growth across both products and services.The group looked forward to further updates on Zenakine’s progress as a new disruptor active ingredient for the beauty industry, steady growth for AxisBiotix and Dermatonics, initial licensing income, and a full half year’s trading from BTS.
“However, matters in relation to the CEO’s conduct, which came to light as a result of the diligence and professional integrity of our CFO Emily Bertram, identifying and escalating issues to the board, allowed us to act as swiftly as we did. This resulted in doubts concerning the validity of the FY25 financial statements. The subsequent investigation has caused significant disruption to the business in the second half of the financial year and has resulted in material changes being made to the audited FY25 financial statements.
“We stand by the decision to conduct a full investigation given the circumstances of the discovery despite the time it has taken. We wanted to be 100 per cent confident in the company’s processes and financial reporting. We can now confirm that all material issues have been identified.
“I commend the work put in by the board and leadership team, as well as the rest of SkinBio’s workforce to not only stem any potential damage to the business, but to instigate a series of operational improvements that will stand us in good stead for the future. We are also grateful to our shareholders for their ongoing patience, and we anticipate trading in the company’s shares to be restored this morning, following the publication of these results.”
Levett thanked Martin Hunt and Cathy Prescott who she said have “been unstinting in their support to the executive team and the rest of the company for many years”.
