TIDMGRPH
RNS Number : 2587S
Graphene NanoChem PLC
29 September 2017
Graphene NanoChem PLC
29 September 2017
For Immediate Release 29 September 2017
Graphene NanoChem PLC
("Graphene NanoChem", the "Company" or the "Group")
Unaudited Interim results for the six months ended 30 June
2017
Graphene NanoChem (AIM: GRPH), the international provider of
nanotechnology performance enhancing solutions for global
industries, is pleased to announce its unaudited interim results
for the six months ended 30 June 2017.
Financial Highlights
-- Gross revenue increased to GBP0.6m (2016: nil)
-- Gross profit of GBP0.02m (2016: Gross loss GBP0.05m)
-- Loss before tax of GBP1.7m (2016: GBP1.5m)
-- Loss per share of 1.29p per share (2016: 1.43p)
-- 2016 comparative figures restated as explained below
-- Cash and cash equivalents at the end of the period was GBP0.5m (2016: GBP0.6m)
-- Current assets GBP0.6m (2016: GBP1.3m) and current liabilities GBP4.6m (2016: GBP17.6m)
-- The Group is managing its working capital prudently in order
to continue trading as a going concern and, amongst others, is in
negotiations with its trade creditors valued at GBP2.6m (2016:
GBP4.7m) for timing of payment to be matched against proceeds from
the proposed sale of non-core assets
-- Current cash and cash equivalents approximately GBP0.3m
Operational Highlights
-- The Group continues to leverage on its 50/50 joint venture
with the Scomi Group ("Scomi") within the oilfield chemicals
business and received a US$118,800 commercial order for PlatSurf
for trial in one oil well in Turkmenistan. The client has
rejuvenation needs for 110 oil wells and, upon a successful trial,
the Group shall commence negotiations for further purchase
orders.
-- The Group, in partnership with Scomi, continues to bid for
small to midsized water treatment projects within the US$50m -
US$150m project capex market segment.
-- In the second quarter of 2017, the Group's enhanced polymer
material was approved and successfully used to convert and modify a
warehouse building for a tier 1 international aerospace
company.
-- The Group has issued 85,188,539 new ordinary shares to Darwin
Capital Limited in connection with the conversion of all Loan Notes
under Tranche 1 and Tranche 2 and as the date of this announcement,
the Group has 201,725,075 ordinary shares in issue.
-- The debt restructuring exercise the Company has undertaken is
now expected to be unconditional by the year end 2017, post
completion of the administrative process and other conditions
precedent, including non-core assets sales, as previously
announced.
Jespal Deol, Chief Executive Officer of Graphene NanoChem,
commented:
"I am pleased to announce that the Group has remained focused
and we continue to make progress in business reorganization and
debt rationalization through the proposed sale of our non-core
assets. The prolonged lower oil prices has continued to negatively
impact Group sales within the oilfield chemicals division,
nevertheless, we see encouraging signs in our efforts to leverage
our intellectual property within the water and polymer divisions.
We continue to prioritize partnerships within these divisions for
future growth.
I would like to thank the staff of Graphene NanoChem for their
dedication and professionalism during this period and look forward
to continued progress in the second half of the year."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information:
----------------------------- ---------------------
Graphene NanoChem Tel: +603 2282
Jespal Deol, Chief Executive 3080
Officer
Panmure Gordon (NOMAD
and Broker)
----------------------------- ---------------------
Adam James / Tom Salvesen Tel: +44 (0)
20 7886 2500
----------------------------- ---------------------
Yellow Jersey (Media Tel: +44 (0)
Relations) 7544 275882
Charles Goodwin
Harriet Jackson
----------------------------- ---------------------
About Graphene NanoChem
Graphene Nanochem plc is a graphene commercialisation company
that designs, formulates and markets a range of graphene--enhanced
applications, from chemicals to performance materials, with
improved performance characteristics when compared to conventional
products. The Group is strategically focused in the oil and gas
sector as its first commercialisation platform and has successfully
completed an integrated suite of enhanced oil recovery applications
to meet industry demand for cost effective high performance
solutions, achieving market breakthrough in 2014. With that, the
Group is now moving onto its next phase of development of market
building and executing long term growth opportunities in the oil
and gas industry and now in the water treatment business.
Headquartered in Malaysia, Graphene Nanochem was admitted to the
AIM of the London Stock Exchange on 26 March 2013, following the
reverse acquisition of Biofutures International plc, and trades
under the symbol GRPH.L.
To find out more, please visit www.graphenenanochem.com.
Chief Executive Officer's Statement
Graphene Nanochem Business
On the back of the Oilfield Chemical solutions value
proposition, the Group has in partnership with the Scomi Group
achieved field successes in the commercial rollout of its Oilfield
chemicals solutions. The Group received a US$118,800 commercial
order for PlatSurf for trial in one oil well in Turkmenistan. The
client has rejuvenation needs for 110 oil wells and, upon a
successful trial, the Group shall commence negotiations for further
purchase orders.
The prolonged industry downturn in the Oil & Gas sector has
impacted all industry players, the Scomi Group being no exception.
Contract deferment and project postponement have become the norm as
Oil & Gas companies continue to remain cautious on exploration
and production. The Group continues to promote the value
proposition of its products and is optimistic for further uptake in
an upswing in the industry.
The Groups Water Division was setup as part of its
diversification strategy and the solutions provided is the second
application of its technology platform. The Group, with its
partners, remain focused in bidding for and developing small to
mid-sized projects within the US$50m to US$150m project capex
market segment where there is a niche and the Group's solutions are
economically viable. Target areas remain in the treatment of
produced and industrial water, sewage water and clean drinking
water.
The third commercial application of the Group's technology
platform is in the area of Enhanced Materials, which sits within
the Polymer Division of the Group. The Group has developed an
enhanced polymer for the use in Building Materials that provides
enhances strength and durability. In the 2nd quarter of 2017, the
Group's enhanced polymer material was approved and successfully
used to convert and modify a warehouse building for a tier 1
international aerospace company. The Group will continue to pursue
partnerships within this division for future growth.
On 23rd December 2016, Darwin Capital Limited entered into an
agreement with the Company to subscribe for up to GBP2.50m Senior
Unsecured Zero Coupon Convertible Loan Notes with detachable
Warrants to support working capital requirements of the Group and
as part of Tranche 1 subscribed to GBP0.75m of the Loan Notes and
1,016,949 Warrants. During the period, Darwin Capital Limited
further subscribed in Tranche 2 to GBP1.0m of the Loan Notes and
1,355,932 Warrants. The Group has issued 85,188,539 new ordinary
shares to Darwin Capital Limited in connection with the conversion
of all Loan Notes under Tranche 1 and Tranche 2 and as the date of
this announcement, the Group has 201,725,075 ordinary shares in
issue with 2,372,881 Warrants outstanding.
The conditional debt restructuring exercise the Company has
successfully undertaken is now expected to now be unconditional by
the year end 2017, post completion of the administrative process
and other conditions precedent, including the sale of non-core
assets, which the Group continues to pursue to completion as a
matter of high priority. The debt restructuring goes a long way in
re-establishing the building blocks necessary to positively
turnaround the Group's financial position that specifically impacts
negotiations for identified joint ventures within in the Polymer
and Water Divisions, both of which are cornerstones to the longer
term success of the Group.
Cash at hand at the end of the period is GBP0.5m (2016:
GBP0.6m). The Group is managing its working capital prudently and
amongst others is in negotiations with its trade creditors valued
at GBP2.6m (2016: GBP4.7m) for timing of payment to be matched
against proceeds from the proposed sale of non-core assets.
Financial Overview
During the 2016 final year audit in line with the reorganization
of the Group, the Group has lost control of its wholly owned
subsidiaries, namely Platinum Nanochem Sdn Bhd, Platinum Green
Chemicals Sdn Bhd and Platinum Nano G Sdn Bhd. In line with the
events above, the Group's interim financial statement has been
prepared on a deconsolidated basis that includes restating of the
2016 final year figures and the 2016 comparable interim figures in
accordance with International Standards of Financial Reporting
(IFRS).
After elimination of discontinued operations, the Group revenues
for the period increased to GBP0.6m (2016: nil), the low revenue
has been consistent with the prolonged industry downturn in the Oil
& Gas sector. The Group with its joint venture partner, the
Scomi Group is evaluating and streamlining its product offerings to
concentrate on higher margin Oilfield chemicals to offset
forecasted lower sales volumes in the near term whilst awaiting a
pickup in the industry.
Gross profit for the period increased to GBP0.02m (gross loss
2016: GBP0.05) reflecting the low revenues for the period.
Administrative expenses has increased to GBP0.8m (2016: GBP0.1),
although GBP0.2m is due to one off expenses incurred as a result of
subscription by Darwin Capital Limited to Loan Notes during the
period. The operating expenses are in line with the stringent cost
cutting measures that has been ongoing as part of the holistic
restructuring exercise by the Group.
The Group has a net asset position of negative GBP16.7m and the
Group continues to focus on a partnership strategy in implementing
growth plans of the Group as these partnerships enable the Group to
leverage the balance sheet of its partners for off balance sheet
financing. Current liabilities are GBP2.6m (2016: GBP4.7m) with
trade creditors consisting of 56% of the amount valued at
GBP2.6m.
Cash and cash equivalents at the end of the period was GBP0.5m
(2016: GBP0.6m). The Group successfully issued loan notes of
GBP1.0m as part of Tranche 2 of the GBP2.5m Senior Unsecured Zero
Coupon Convertible Loan Notes with detachable Warrants agreement
with Darwin Capital Limited during the period to support working
capital requirements of the Group.
The Group continues to undertake prudent measures to conserve
cash and lower costs in order to continue trading as a going
concern.
The total comprehensive loss for the period was GBP1.7m (2016:
GBP1.7m).
The Group will continue to safeguard capital prudently for the
benefit of its stakeholders and strive to achieve its business plan
targets with the ultimate aim of increasing shareholder value.
Condensed Consolidated Statement of Comprehensive Income
Six months Six months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 591 - 258
Cost of sales (570) (51) (214)
------------ ------------ -------------
Gross (loss)/profit 21 (51) 44
Other Income - - 20
Selling and distribution
expenses - - -
Administrative expenses (825) (30) 1,398
Bad debts written off - - (16,222)
Finance costs (730) (11) (1,739)
Depreciation and amortization (196) (92) (370)
------------ ------------ -------------
Operating loss (1,730) (184) (16,869)
Share of loss in a joint
venture - (46) (5)
------------ ------------ -------------
Loss before tax (1,730) (230) (16,874)
Income tax credit - - -
------------ ------------ -------------
Loss before tax from continuing
operations (1,730) (230) (16,874)
------------ ------------
Discontinued operations
Profit/(loss) for the
year from discontinued
operations - (1,305) 5,732
------------ ------------ -------------
Loss before tax attributable
to the owners of the parent (1,730) (1,535) (11,142)
------------ ------------ -------------
Other comprehensive loss:
items that may be subsequently
reclassified to profit
or loss
Net exchange differences
on translating foreign
operations 22 (134) 2,802
------------ ------------ -------------
Total other comprehensive
loss, net of tax 22 (134) 2,802
------------ ------------ -------------
Total comprehensive loss (1,708) (1,668) (8,340)
============ ============ =============
Condensed Consolidated Statement of Financial Position
As at 30 As at 30 As at 31
June June December
2017 2016 2016
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 5,401 21,567 5,640
Intangible assets 41 41 41
Investment in a joint
venture 64 91 60
------------
5,506 21,699 5,741
Current assets
Inventories 16 289 16
Trade and other receivables 67 387 105
Cash and cash equivalents 520 607 630
------------
603 1,284 751
------------ -------------------- ----------
Total assets 6,109 22,983 6,492
------------ -------------------- ----------
Liabilities
Current liabilities
Trade and other payables 2,598 4,719 2,143
Borrowings 2,013 12,877 2,966
------------ --------------------
4,611 17,596 5,109
------------ -------------------- ----------
Non-current liabilities
Borrowings 18,185 17,211 17,334
Deferred tax liability - - -
------------
18,185 17,211 17,334
------------ -------------------- ----------
Total liabilities 22,796 34,806 22,443
------------ -------------------- ----------
Net (liabilities)/assets (16,687) (11,823) (15,951)
============ ==================== ==========
Equity
Share capital 23,482 23,307 23,307
Share premium account 140,214 139,639 139,639
Shares to be issued 315 - 206
Reverse acquisition reserve - (99,305) -
Translation reserve (1,214) (8,894) (1,349)
Irredeemable convertible
preference shares - 2,272 -
Accumulated losses (179,484) (68,842) (177,754)
------------
Shareholders' (deficiency)
/equity (16,687) (11,823) (15,951)
============ ==================== ==========
Consolidated Statement of Changes in Equity
Unaudited six months ended 30 June 2017
Equity
Share Shares Reverse Component
Share Premium to be Acquisition Translation Accumulated of Preference Total
Capital Account issued Reserve Reserve Losses Shares Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2017 23,307 139,639 206 - (1,349) (177,754) - (15,951)
Total
comprehensive
income:
----------------- ----------------- ----------------- ----------------- ----------------- ------------------- ----------------- ------------------
Loss for the
financial
year - - - - - (1,730) - (1,730)
New shares
issued
at premium 175 575 - - - - - 750
New shares to
be issued - - 109 - - - - 109
Foreign
currency
translation
differences - - - - 135 - - 135
----------------- ----------------- ----------------- ----------------- ----------------- ------------------- ----------------- ------------------
175 575 109 - (1,214) (1,730) - (736)
At 30 June
2017 23,482 140,214 315 - (1,214) (179,484) - (16,687)
Unaudited six months ended 30 June 2016
Equity
Share Shares Reverse Component
Share Premium to be Acquisition Translation Accumulated of Preference Total
Capital Account issued Reserve Reserve Losses Shares Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 23,307 139,639 - (99,305) (4,151) (67,307) 1,924 (5,893)
Total
comprehensive
income:
----------------- ----------------- ----------------- ------------------ ----------------- ------------------ ----------------- ------------------
Loss for the
financial
year - - - - - (1,535) - (1,535)
Foreign
currency
translation
differences - - - - (4,743) - 348 (4,395)
----------------- ----------------- ----------------- ------------------ ----------------- ------------------ ----------------- ------------------
- - - - (4,743) (1,535) 348 (5,930)
At 30 June
2016 23,307 139,639 - (99,305) (8,894) (68,842) 2,272 (11,823)
Year ended 31 December 2016
Equity
Share Shares Reverse Component
Share Premium to be Acquisition Translation Accumulated of Preference Total
Capital Account issued Reserve Reserve Losses Shares Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 23,307 139,639 - (99,305) (4,151) (67,307) 1,924 (5,893)
Total
comprehensive
income:
----------------- ----------------- ----------------- ------------------ ----------------- ------------------- ----------------- ------------------
Loss for the
financial
year - - - - - (11,142) - (11,142)
Reversal of
reverse
acquisition
reserve - - - 99,305 - (99,305) -
Reversal of
profit and
loss - - - - - - (2,210) (2,210)
New shares to
be issued - - 206 - - - - 206
Foreign
currency
translation
differences - - - - 2,802 - 286 3,088
----------------- ----------------- ----------------- ------------------ ----------------- ------------------- ----------------- ------------------
- - 206 99,305 2,802 (110,447) (1,924) (10,058)
At 30 June
2016 23,307 139,639 206 - (1,349) (177,754) - (15,951)
Consolidated Statement of Cash Flows
As at 30 As at 30 As at 31
June June December
2017 2016 2016
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Cash Flows From Operating
Activities
Loss before taxation (1,730) (1,535) (16,875)
Adjustments for:
Depreciation of property,
plant and equipment 196 92 370
Amortisation of intangible
assets - - 1
Impairment loss on disposal
of former group undertaking - - 13,277
Inventory written off - - 45
Share of loss in a joint
venture - 34 5
Impairment loss in joint
venture - - 56
Finance costs 729 940 1,739
Unrealised foreign exchange
loss - - 17
Warrant issue - - 81
------------ ------------ ----------
Operating loss before
working capital changes (805) (468) (1,334)
(Increase)/decrease in
:
Trade and other receivables (95) 577 15
Inventories - (40) -
Increase /(decrease) in
:
Trade and other payables 38 1,307 989
------------ ------------ ----------
Cash Generated From Operations (862) 1,376 (280)
Net interest paid - - -
Income tax refund - - -
Net Cash Used In Operating
Activities (862) 1,376 (280)
------------ ------------ ----------
Cash Flows From Investing
Activities
Subscription of shares
in a joint venture - - (119)
Net cash used in discontinued
operations - 43 (2,711)
Net Cash Used In Investing
Activities - (95) (2,830)
------------ ------------ ----------
Cash Flows From Financing
Activities
Issuance of loan notes 850 (340) 675
Advances by related companies - - 209
Net proceeds from/(repayment
of) borrowings (9) - (360)
Net Cash Generated Used
In Financing Activities 841 (340) (524)
------------ ------------ ----------
Net (Decrease) In Cash
and Cash Equivalents (21) 1,078 (2,586)
Cash and Cash Equivalents
at beginning of year 630 558 558
Effect of exchange rate
differences (89) (1,029) 2,658
Cash and Cash Equivalents
at end of year 520 607 630
============ ============ ==========
Notes to the Financial Statements
For the six month period ended 30 June 2017
1 Basis of preparation
These unaudited condensed consolidated financial statements (the
"interim financial statements") of the Group are for the six months
ended 30 June 2017. The interim financial information set out above
does not constitute statutory accounts. They have been prepared
using the recognition and measurement principles of the
International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU). IFRS include interpretations issued by the
International Financial Reporting Interpretation Committee (IFRIC).
They do not include all of the information required for full annual
financial statements, and should be read in conjunction with the
audited consolidated financial statements of the Group for the year
ended 31 December 2016 which were approved by the Board of
Directors on 29 June 2017. The report of the auditors on those
financial statements was unmodified. These interim financial
statements have not been reviewed by the auditors.
The interim financial statements have been prepared under the
historical cost convention. These interim financial statements have
been prepared in accordance with the accounting policies in the
Group's consolidated financial statements for the year ended 31
December 2016. The accounting policies have been applied
consistently throughout the Group for the purpose of preparation of
the interim financial statements. The financial information
contained in these interim financial statements comprises the Group
statement of financial position as at 30 June 2017 and 30 June 2016
and the Group statement of comprehensive income, the Group
statement of cash flows and the Group statement of changes in
equity for the half years ended 30 June 2017 and 30 June 2016.
These interim financial statements are presented in Pounds
Sterling ("GBP") which is the functional and presentation currency
of the parent, and rounded to the nearest thousand ("GBP'000"). The
functional currency of the subsidiaries is the Malaysian Ringgit as
that is the currency of their primary economic environment. The
directors have chosen to present these financial statements in
Pounds Sterling due to the international exposure and shareholders
of the entity.
2 Income Tax
There was no tax charge due to the losses arising in the
period
3 Net exchange differences on translating foreign operations
Income and expenditure for overseas subsidiaries are included
based upon average exchange rates to give a fair approximation to
the transaction rate. Balance sheet items are included at the
exchange rate at the balance sheet date. All other differences are
included within the translation reserve, including related goodwill
and intangible assets, which are translated at the rate ruling at
the balance sheet date (30 June 2017 GBP1 = RM 5.59010, 31 December
2016 GBP1 = RM 5.54310 and at 30 June 2016 GBP1= RM 5.3910).
4 Availability of half yearly report
The Company's half yearly report will be available in soft copy
from the investors' section of the Company's website
(http://www.graphenenanochem.com).
5 Loss per share
Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year.
Six months Six months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Loss attributable to equity
holders of the
Company 1,730 1,668 8,340
Weighted average number
of ordinary
shares in issue 134,009,266 116,536,536 116,536,536
Basic loss per share in
pence (1.29)p (1.43)p (7.16)p
============ ============ =============
Diluted
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all contracted dilutive potential ordinary shares.
Six months Six months Year ended
ended 30 ended 30 31 December
June 2017 June 2016 2016
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Conversion of Loan Notes,
par value GBP25,000 each 5,423,729 - 4,067,797
Conversion of Warrants,
exercise price 18.4375p 2,372,881 - 1,016,949
------------ ------------ -------------
Total additional shares
post conversion 7,796,610 - 5,084,746
------------ ------------ -------------
Enlarged Share Capital
of the Group 141,805,876 116,536,536 121,621,282
Loss attributable to equity
holders of the
Company 1,730 1,668 8,340
Weighted average number
of ordinary
shares in issue 141,805,876 116,536,536 121,621,282
Basic loss per share in
pence (1.22)p (1.43)p (6.86)p
============ ============ =============
6 Material subsequent events
There are no material event subsequent to the end of the
financial period that has not been reflected in the financial
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKCDBKBKDFCB
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