TIDMHAYD
RNS Number : 8088Q
Haydale Graphene Industries PLC
22 February 2019
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the
publication of this announcement via a Regulatory Information
Service ('RIS'), this inside information is now considered to be in
the public domain.
For immediate release 22 February 2019
Haydale Graphene Industries plc
('Haydale', the 'Company', or the 'Group')
Interim Results
Haydale (AIM: HAYD), the global advanced materials group,
announces its unaudited interim results for the six months ended 31
December 2018 (the 'Period' or 'H1FY19').
Financial Highlights
-- Group Revenues of GBP1.64 million for the Period, 20% up on
H2FY18, but 20% down on H1FY18;
-- Revenue from US operations up 10% to GBP1.28 million from H1FY18;
-- Loss before tax for the Period was GBP3.47 million (H1FY18: GBP2.74 million); and
-- Cash at period end of GBP0.96 million (30 June 2018: GBP5.09 million)
Operational Highlights
-- Significant investment in production capabilities at our US
site to manufacture new Silicon Carbide cutting tools to increase
sales and improve gross margins;
-- Sold over 200kg of functional ink from our Taiwan facility
into the biomedical sensor market;
-- First commercial revenues for Haydale's graphene
piezoresitive inks produced in Ammanford for pressure sensors in
sporting headgear;
-- Haydale's proprietary functionalisation capabilities improved
surface chemistry of graphenes from 4% to 20%; and
-- Re-sizing of Group's cost base commenced with initial GBP1.0
million of annualised savings, primarily in the UK
Post Period End Highlights
-- Received GBP0.75 million loan from Development Bank of Wales for working capital
Commenting on the interim results, David Banks, Interim
Executive Chairman of Haydale, said:
"We will continue to implement the management actions already
started to re-set the cost base and consolidate the Group's
position over the next 6 months with our focus on SiC,
functionalised inks and graphene composites. There will be a
marginal impact on sales in the current financial year as the
changes are bedded in. However, we are recruiting specific sales
personnel to deliver on our expected growth over the medium term
without adding to the cost base, as we move from R&D to
commercial sales. We are looking to leverage our significant
investment made in our US business to create a stable platform for
the Group to enable us to achieve our plan to profitability."
For further information:
Haydale Graphene Industries plc
David Banks, Interim Executive Chairman Tel: +44 (0) 1269 842 946
Gemma Smith, Head of Marketing www.haydale.com
Arden Partners plc (Nominated Adviser
& Broker)
Ruari McGirr / Paul Shackleton / Tel: +44 (0) 20 7614 5900
Ben Cryer
Notes to Editors
Haydale is a global technologies group and service provider that
facilitates the integration of graphene and other nanomaterials
into the next generation of industrial materials and commercial
technologies. With expertise in graphene, silicon carbide and other
nanomaterials, Haydale is able to deliver improvements in
electrical, thermal and mechanical properties, as well as
toughness. Haydale has granted patents for its technologies in
Europe, USA, Australia, Japan and China and operates from six sites
in the UK, USA and the Far East. For more information please visit:
www.haydale.com or Twitter: @haydalegraphene
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "will" or the negative of those, variations or
comparable expressions, including references to assumptions. These
forward looking statements are not based on historical facts but
rather on the Directors' current expectations and assumptions
regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the
amount, nature and sources of funding thereof), competitive
advantages, business prospects and opportunities. Such forward
looking statements re ect the Directors' current beliefs and
assumptions and are based on information currently available to the
Directors.
A number of factors could cause actual results to differ
materially from the results discussed in the forward looking
statements including risks associated with vulnerability to general
economic and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although any forward looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with such
forward looking statements. Accordingly, readers are cautioned not
to place undue reliance on forward looking statements. Subject to
any continuing obligations under applicable law or any relevant AIM
Rule requirements, in providing this information the Company does
not undertake any obligation to publicly update or revise any of
the forward looking statements or to advise of any change in
events, conditions or circumstances on which any such statement is
based.
Interim Executive Chairman's Report
Overview
This period has been one of considerable change for Haydale as
the anticipated take up of our products and services did not
materialise at the rate predicted. As a result, we have made
management changes and are realigning the cost base to the revenues
which should enable us to reach monthly cash flow breakeven by the
end of 2020.
We welcomed Keith Broadbent to the Board as Chief Operating
Officer on 5 September 2018 and Laura Redman-Thomas as Chief
Financial Officer on 21 December 2018.
The Group's commercial revenues for the Period were GBP1.64
million and, whilst down on the corresponding period last year,
which included the sales of a functionalisation reactor, was up 20%
on the second half of the last financial year.
Operations
As announced on 9 November 2018, we have taken actions to reduce
our annualised costs by over GBP1.0 million and there are
additional cost savings to be made as the Group's operations focus
on our core markets of silicon carbide, functional inks and
graphene enhanced pre-pregs. Inevitably this has resulted in a
reduction in our staff numbers and contractors, which will have
reduced from 85 at the end of August 2018 to below 70 by the end of
March 2019. Our Ammanford site, which has historically been our
R&D operation for the Group is now a profit centre and has
already started selling our functionalised inks.
We are focusing on three main areas where we can make money,
silicon carbide ("SiC"), functionalised inks and graphene enhanced
composites. We have invested heavily in our SiC business in the US
that we acquired in late 2017 to enable it to move our products up
the value chain by producing our own cutting tools ("Blanks") for
the turbine jet engine market. Pleasingly, our new products are now
pre-qualified with the three leading Western manufacturers. We have
also expanded the market for SiC into S. Korea and also opened new
markets for SiC in paints and coatings for the petrochemical pipes
and propeller markets. We anticipate that this business will become
EBITDA positive in the coming months which will enable us to make
better use of its $5.5 million of tangible assets, including our
recent $1.5 million investment in the Blanks machinery.
Our functionalised inks business is focused on biomedical
sensors and pressure Sensors. We have now sold over 200kg of
biomedical ink and, whilst take-up has been slower than
anticipated, we are now seeing growing demand and good customer
feedback. In pressure sensor inks, we have received the first
commercial orders for piezoresistive ink from HP1 that is printed
in an array within an equestrian riding helmet that records
relevant data in a head impact. We are also looking to develop our
PATit technology for non-visualised graphene security coding both
with our Far East licensee, TKS, and ourselves as announced on 19
November 2018. Also, we are developing graphene enhanced wearables
with EIS (English Institute of Sport) for a muscle enhancing
heating application (announced 18 September 2018) and with Makalot,
a large contract clothing manufacturer based in the Far East
(announced today). Trials are also ongoing with customers in
heating inks.
Enhanced composites has attracted the most hype in the graphene
space and this is the area where we have had to make the most
changes to align our cost base to the demand and so we are now
clearly focused on the early adopters. Whilst the large
multi-nationals have not progressed the projects as expected, we
have taken the knowledge and know how gained to exploit easier to
access and quicker markets around thermal improvement in automotive
tooling with BAC Mono and the Niche Vehicle Network program, and
also in mechanical strength in premium bike frames.
Probably the most important development during the Period has
been the significant improvements achieved in our functionalisation
HDPlas(TM) plasma process that is being verified by independent
third parties to show that we have improved the surface chemistry
from 4% to 20%. There are now 11 of our plasma reactors around the
world, including our most recent one which is located at the
Graphene Engineering Innovation Centre in Manchester ("GEIC"). We
anticipate revenues will be generated from our reactor at the GEIC
in due course as those reactors already installed in CPI and IRPC
are doing.
Financial Results
The Group's unaudited commercial income recognised in the Period
of GBP1.64 million was lower than that recognised in the
corresponding period last year of GBP2.04 million, but 20% higher
than that reported in the 2(nd) half of the last financial year
(H2FY18: GBP1.36 million). GBP1.28 million of the Group's revenues
for the Period derived from the sales of the Group's Silicon
Carbide nanomaterials manufactured in the US (H1FY18: GBP1.15
million), with the balance being sales of functionalised and
speciality inks and composite consulting.
As Haydale transitions to commercial sales, our investment in
development projects has reduced in the six months under review to
GBP0.25 million (H1FY18: GBP0.43 million). Other administration
costs during the Period totalled GBP4.29 million, up from GBP3.77
million in the corresponding period last year, due principally to
an increased headcount across the Group. However, as previously
announced, a re-focussing of the Group's operations over the last 3
months will result in administrative costs reducing going forward,
together with the Group's headcount and number of contractors. Loss
for the Period before taxation was GBP3.47 million compared to
GBP2.74 million a year earlier. Increased expenditure on capital
equipment during this Period of GBP0.96 million (H1FY18: GBP0.25
million) was due to the Group's investment in new production
facilities in its US operations, the benefits of which are expected
to be felt in the coming months.
The Group's unaudited net assets at 31 December 2018 were
GBP9.26 million (31 December 2017: GBP15.42 million). The Group's
borrowings reduced GBP0.10 million during the Period to GBP0.80
million at the period end (30 June 2018: GBP0.90 million). Cash at
the period end was GBP0.96 million (30 June 2018: GBP5.09m),
including the GBP0.25 million of new equity funds received in
December 2018, for which shares were admitted to trading on AIM in
January 2019. The reduction in cash balances during the Period of
GBP4.13 million was broadly made up of GBP2.80 million of
operational losses, GBP0.23 million used in working capital,
GBP0.96 million of capital expenditure and the balance being
repayments of borrowings.
On 21 December 2018, the Company announced that it had entered
into a new GBP0.75 million loan facility with the Development Bank
of Wales ("DBW Loan") to assist with the Group's general working
capital. As at the date of this announcement, the Company confirms
that it has fully drawn down the DBW Loan.
No new ordinary shares were issued during the Period, but post
Period end, the Company issued 1,250,000 new ordinary shares at a
price of 20p each to raise GBP250,000. As at 31 December 2018, the
Company had 27,328,773 ordinary shares in issue and, at the date of
this announcement, the Company has 28,578,773 ordinary shares in
issue.
Board changes
In September 2018, Keith Broadbent was appointed to the role of
the Group's COO and I became the Group's Interim Executive
Chairman. In December 2018, Laura Redman-Thomas joined as Group
CFO, replacing Matt Wood, and Ray Gibbs, former CEO, stepped down
from the Board. In January 2019, Roger Smith, a non-executive
director and founder of the Group, stepped down from the Board. On
behalf of the Board, I would like to thank Ray, Matt and Roger for
their service to the Group.
Outlook
We will continue to implement the management actions already
started to re-set the cost base and consolidate the Group's
position over the next 6 months with our focus on SiC,
functionalised inks and graphene composites. There will be a
marginal impact on sales in the current financial year as the
changes are bedded in. However, we are recruiting specific sales
personnel to deliver on our expected growth over the medium term
without adding to the cost base, as we move from R&D to
commercial sales. We are looking to leverage our significant
investment made in our US business to create a stable platform for
the Group to enable us to achieve our plan to profitability.
David Banks
Interim Executive Chairman
22 February 2019
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
For the six months ended 31 December 2018
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 2018 31 Dec 2017 30 Jun 2018
Note GBP'000 GBP'000 GBP'000
REVENUE 1,635 2,041 3,403
Cost of sales (758) (852) (1,403)
Gross Profit 877 1,189 2,000
Other income 377 456 831
Administrative expenses
-------------------------------------------- -------- -------------- -------------- --------------
Research and development expenditure (250) (433) (878)
Share based payment expense (147) (114) (291)
Other administrative expenses (4,292) (3,768) (7,684)
-------------------------------------------- -------- -------------- -------------- --------------
(4,689) (4,315) (8,853)
LOSS FROM OPERATIONS (3,435) (2,670) (6,022)
Finance costs (36) (69) (95)
LOSS BEFORE TAXATION (3,471) (2,739) (6,117)
Taxation 143 557 850
LOSS FOR THE YEAR FROM CONTINUING
OPERATIONS (3,328) (2,182) (5,267)
Other comprehensive income:
Items that may be reclassified to
profit or loss:
Exchange differences on translation
of foreign operations 5 (25) (47)
Remeasurements of defined benefit
pension scheme (109) (148) (99)
TOTAL COMPREHENSIVE LOSS FOR THE
YEAR FROM CONTINUING OPERATIONS (3,432) (2,355) (5,413)
Loss per share attributable to owners
of the Parent
Basic (GBP) 2 (0.13) (0.10) (0.22)
Diluted (GBP) 2 (0.13) (0.10) (0.22)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As at 31 December 2018
Unaudited Unaudited Audited
31 Dec 2018 31 Dec 2017 30 Jun 2018
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 2,088 2,088 2,087
Intangible assets 1,950 2,110 2,130
Property, plant and equipment 5,751 4,848 5,061
Deferred tax asset 680 536 550
10,469 9,582 9,828
Current assets
Inventories 1,255 1,237 1,022
Trade receivables 861 566 705
Other receivables 314 451 362
Corporation tax 547 441 473
Cash and bank balances 961 7,992 5,092
3,938 10,687 7,654
TOTAL ASSETS 14,407 20,269 17,482
LIABILITIES
Non-current liabilities
Bank loans 526 752 640
Deferred tax 820 687 675
Pension obligation 1,173 1,095 1,120
2,519 2,534 2,435
Current liabilities
Bank loans 270 272 256
Trade and other payables 2,197 1,975 2,172
Deferred income 165 66 78
2,632 2,313 2,506
TOTAL LIABILITIES 5,151 4,847 4,941
TOTAL NET ASSETS 9,256 15,422 12,541
EQUITY
Capital and reserves attributable to
equity holders of the parent
Share capital 547 547 547
Share premium account 27,539 27,539 27,539
Share-based payment reserve 1,445 1,121 1,298
Retained (deficits) / profits (20,120) (13,647) (16,683)
Foreign exchange reserve (155) (138) (160)
TOTAL EQUITY 9,256 15,422 12,541
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the six months ended 31 December 2018
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 Jun
2018 2017 2018
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Loss before taxation (3,471) (2,739) (6,117)
Adjustments for:-
Amortisation of intangible assets 180 102 149
Capitalised loan costs written
off - - 75
Depreciation of property, plant
and equipment 411 320 675
Share-based payment charge 147 114 291
Loss/(Profit) on disposal of
property, plant and equipment - 51 (60)
Pension plan contributions (120) - -
Finance costs 36 69 95
Pension - net interest expense 19 20 37
Operating cash flow before working
capital changes (2,798) (2,063) (4,855)
(Increase)/ decrease in inventories (233) (25) 190
(Increase) / decrease in trade
and other receivables (108) 316 266
Increase/(decrease) in payables
and deferred income 112 (517) 159
Cash used in operations (3,027) (2,289) (4,240)
------------ ------------ ---------
Income tax received 76 - 269
Net cash used in operating activities (2,951) (2,289) (3,971)
------------ ------------ ---------
Cash flow used in investing
activities
Purchase of property, plant
and equipment (964) (247) (723)
Purchase of intangible assets - (80) (175)
Proceeds from disposal of property,
plant and equipment - 20 83
Acquisition of subsidiary -
deferred consideration - - (444)
Net cash used in investing activities (964) (307) (1,259)
------------ ------------ ---------
Cash flow used in financing
activities
Finance costs (36) (69) (95)
Proceeds from issue of share
capital (net of share issue
costs) - 8,757 8,757
Repayments of borrowings (149) (259) (446)
Net cash flow from financing
activities (185) 8,429 8,216
------------ ------------ ---------
Effects of exchange rate changes (31) 68 15
Net (decrease) / increase in
cash and cash equivalents (4,131) 5,901 3,001
Cash and cash equivalents at
beginning of the financial period 5,092 2,091 2,091
Cash and cash equivalents at
end of the financial period 961 7,992 5,092
============ ============ =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Share-based Foreign
Share Share payment exchange Retained
Capital premium reserve reserve profits Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2017 392 18,936 1,007 (113) (11,317) 8,905
Total comprehensive
loss for the period - - - (25) (2,330) (2,355)
Recognition of
share-based
payments - - 114 - - 114
Issue of ordinary share
capital 155 9,123 - - - 9,278
Transaction costs in
respect of share issues - (520) - - - (520)
At 31 December 2017 547 27,539 1,121 (138) (13,647) 15,422
Total comprehensive
loss for the period - - - (22) (3,036) (3,058)
Recognition of
share-based
payments - - 177 - - 177
At 30 June 2018 547 27,539 1,298 (160) (16,683) 12,541
Total comprehensive
loss for the period - - - 5 (3,437) (3,432)
Recognition of
share-based
payments - - 147 - - 147
At 31 December 2018 547 27,539 1,445 (155) (20,120) 9,256
========== ================ ============= =========== ========== =========
Equity share capital and share premium
The balance classified as share capital and share premium
includes the total net proceeds on issue of the Company's equity
share capital, comprising GBP0.02 ordinary shares. The share
premium account can only be used for bonus issues, to provide for
the premium payable on redemption of debentures or to write off
preliminary expenses, or expenses of, or commissions paid on, or
discounts allowed on, any issues of shares or debentures of the
company.
Share premium account
The share premium account represents the amount received on the
issue of ordinary shares in excess of their nominal value and is
non-distributable.
Share-based payment reserve
The share-based payment reserve comprises the cumulative expense
representing the extent to which the vesting period of share
options has expired and management's best estimate of the
achievement or otherwise of non-market conditions and the number of
equity instruments that will ultimately vest.
Retained profits
The retained profits reserve comprises the cumulative effect of
all other net gains, losses and transactions with owners (e.g.
dividends) not recognised elsewhere.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 31 December 2018
1. Accounting policies
Basis of preparation
The interim financial statements, which are unaudited, have been
prepared on the basis of the accounting policies expected to apply
for the financial year to 30 June 2019 and in accordance with
recognition and measurement principles of International Financial
Reporting Standards (IFRSs) as endorsed by the European Union. The
accounting policies applied in the preparation of these interim
financial statements are consistent with those used in the
financial statements for the year ended 30 June 2018.
The interim financial statements do not include all of the
information required for full annual financial statements and do
not comply with all of the disclosures in IAS34 'Interim Financial
Reporting'. Accordingly, while the interim financial statements
have been prepared in accordance with IFRS they cannot be construed
as being in full compliance with IFRS.
The financial information for the year ended 30 June 2018 does
not constitute the full statutory accounts for that period. The
Annual Report and Accounts for 30 June 2018 have been filed with
the Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Accounts for 2018 was unqualified and did not
include references to any matters which the auditors drew attention
to by way of emphasis without qualifying their report and did not
contain statements under Section 498(2) or 498(3) of the Companies
Act 2006.
Going concern
The consolidated financial statements are prepared on a going
concern basis which the Directors believe continues to be
appropriate. The Group meets its day-to-day working capital
requirements through existing cash resources which, at 31 December
2018 amounted to GBP0.96 million. The Directors have prepared cash
flow projections for the period ending no less than 12 months from
the date of their approval of these financial statements. On the
basis of those projections, the Directors believe that the Group
will be able to continue to trade for the foreseeable future.
2. Loss per share
The calculations of loss per share are based on the following
losses and number of shares:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 2018 31 Dec 2017 30 Jun 2018
GBP'000 GBP'000 GBP'000
Loss after tax attributable
to owners of the Haydale
Graphene Industries Group (3,432) (2,330) (5,413)
Weighted average number
of shares:
- Basic 27,328,773 22,202,744 24,744,693
- Diluted 27,328,773 22,202,744 24,744,693
Loss per share:
- Basic (GBP) (0.13) (0.10) (0.22)
- Diluted (GBP) (0.13) (0.10) (0.22)
The loss attributable to ordinary shareholders and weighted
average number of ordinary shares for the purpose of calculating
the diluted earnings per ordinary share are identical to those used
for basic earnings per share. This is because the exercise of share
options would have the effect of reducing the loss per ordinary
share and is therefore not dilutive under the terms of IAS 33.
3. Approval
The 31 December 2018 interim financial statements were approved
by a duly appointed and authorised committee of the Board of
Directors on 21 February 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR XFLLLKLFEBBK
(END) Dow Jones Newswires
February 22, 2019 02:00 ET (07:00 GMT)
Haydale Graphene Industr... (LSE:HAYD)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Haydale Graphene Industr... (LSE:HAYD)
Historical Stock Chart
Von Jul 2023 bis Jul 2024