TIDMHAYD
RNS Number : 4865C
Haydale Graphene Industries PLC
23 February 2022
For immediate release 23 February 2022
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 2021 (the 'Period' or 'H1 FY2022').
Financial Highlights
-- Successful fund raise of GBP5.1 million (Gross) in September 2021;
-- Group Revenues of GBP1.19 million (H1 FY2021 GBP1.28 million) impacted
by GBP0.64 million of accelerated purchases from our largest SIC
customer in the prior Period;
-- UK and APAC sales increased by 19% (H1 FY2022 GBP0.49 million vs
H1 FY2021 GBP0.41 million) on a like-for-like basis;
-- Investment in operational capacity and lower than anticipated overhead
absorption at the US facility led to an increase in Adjusted administrative
expenses of 14%;
-- Adjusted operating loss for the Period of GBP1.75 million (H1 FY2021
GBP1.08 million); and
-- Cash at Period end of GBP3.84 million (31 December 2021: GBP1.88
million).
Operational Highlights
-- Viritech - Memorandum of Understanding signed in September to assist
in the development of hydrogen powertrain technologies, encompassing
Haydale's experience in composite design and technology.
-- Promake - Continuing to support and develop the next generation
of smart medical diagnostic devices using graphene enhanced components.
-- Airbus - Joint patent application announcement in August 2021. Haydale
now working to further enhance its electrically conductive pre-preg
material for lightning strike protection and other applications.
-- Heater Ink Garments - now working with commercial parties to bring
our heater ink technology used in garments worn by medal winning
athletes in Tokyo to a wider market.
-- Using Haydale's functionalised GNP's, iCraft have developed a next
generation anti-bacterial coated fabric, THERMiT(TM), which was
supplied to South Korean sports apparel brand, Pro-Specs, for use
in a new graphene-enhanced jacket.
Post period Operational Highlights
-- Agreement with High Tech Systems Ltd to supply functionalised Boron
Nitride into a thermally conductive fluid for domestic and industrial
heating systems.
-- PATit(TM) and CeramycGuard(TM) shortlisted for British Engineering
Excellence Awards in the Materials Application of the Year category.
-- A biomedical ink that is being developed for the rapid diagnosis
market has been shortlisted for an innovative Kidney MedTech Competition
for transformational technologies organised by Kidney Research UK.
-- Award of a Smart Cymru grant of GBP169,000 by the Welsh Government
to support the further development of the PATit(TM) Anti-counterfeiting
solution.
Commenting on the interim results, Keith Broadbent, Chief
Executive Officer of Haydale, said:
" Our progress on many of the functionalisation based nano
projects continues to develop well, and our planned delivery of the
new HT1400 will not only give us additional capacity, but will also
allow cost-effective material processing on a large scale that is
critical for our ongoing commercial development in the major growth
side of our business. We are also pleased to see the early signs of
recovery in the aerospace market and wider cutting tools market and
believe this augers well for the medium and longer term outlook for
our US facility".
For further information:
Haydale Graphene Industries plc
Keith Broadbent, CEO Tel: +44 (0) 1269 842 946
Mark Chapman, CFO
www.haydale.com
finnCap (Nominated Adviser & Broker)
Julian Blunt/Edward Whiley, Corporate
Finance Tel: +44 (0) 20 7220 0500
Andrew Burdis, ECM
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, other nanomaterials and
Silicon Carbide, Haydale is able to deliver improvements in
electrical, thermal and mechanical properties, Haydale has been
granted patents for its technologies in Europe, USA, Australia,
Japan and China and operates from five 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.
Chief Executive's Report
Overview
The Group has continued to make solid progress in its core
graphene and nano particle operations in the UK and APAC, but the
slower than anticipated recovery of the aerospace industry and
consequently the Group's US operation has dampened the overall
financial performance in the Period.
Within the graphene and nano materials side of our operations,
we have seen increasing market pull as the benefits that Haydale's
HDPlas(R) plasma process can bring to customers' finished products
is more clearly understood across a variety of sectors. Further
development of our core functionalisation technology has been a
specific and continuing focus resulting in a number of new patent
applications being submitted and enhancements to some of the main
product offerings of ink, elastomers and composites have
resulted
Revenue from the UK and APAC regions, increased by 19 % compared
with the prior Period but this has been offset by a reduction in
the larger and more mature silicon carbide operations based at our
US facility. As previously noted, our largest customer for silicon
carbide whiskers ("SiC") increased its order pattern in the prior
Period in order to support Haydale when the aerospace industry was
at its lowest point last year and as anticipated, we have seen no
orders from this customer in H1 FY2022 (H1 FY2021 GBP0.64 million).
This reduction has been partially offset by a rebound in demand
from our US coatings customer. We have seen some early signs of
recovery in the aerospace and wider cutting tools market, and this
bodes well for the medium and longer future of the US facility.
Reduced US business unit revenues have acted as a brake on overall
sales with Group revenues of GBP1.19 million (H1 FY2021 GBP1.28
million).
The focus on improving operational capacity in line with the
anticipated increase in production capacity at the Ammanford
facility has seen further investment in upskilling our sales force
and, to support customer acquisition more fully we brought
marketing in house during the Period, recruiting an experienced
Group Marketing Manager. We have also further strengthened the US
operations and sales team in order to take full advantage of the
anticipated recovery in demand in North America and to support our
potential for sales growth in the APAC region and in particular
China. This investment in conjunction with the lower cost
absorption at the US facility, has led to a 14% increase in
Adjusted Administrative expenses in the Period. The Group's
adjusted operating loss was GBP 1.75 million (H1 FY2021 GBP1.08
million).
Commercial Operations
UK
The UK has made consistent progress towards commercialising its
proprietary technology in the Period. In September the Group signed
a Memorandum of Understanding with Viritech Limited ("Viritech")
whereby Haydale is utilising its expertise in engineering solutions
for hydrogen to work with Viritech on the testing and development
of Type IV structural composite pressure vessels for hydrogen
storage. Haydale anticipates follow on project development work
with Viritech both in respect of Type IV tanks but also into next
generation Type V 'liner less' pressure vessels to commence in
early H2 FY2022. This is a well-known growth area and the potential
to develop and use functionalised graphene which helps prevent
hydrogen permeation through tanks' walls is a key next step for
this industry.
Haydale's collaboration with Promake is on-going and the parties
continue to cooperate on a number of work streams including the
SynerG 3D printing filament and on conductive and piezo resistant
inks. Work on Lot 2 and Lot 4 of the Public Health England National
Microbiology Framework is progressing with a 'proof of concept' for
the clinical trial protocol produced and under review with two
Universities and an NHS trust. Whilst we do not expect impactful
revenues in H2 FY2022 we anticipate that this collaboration will
bring significant medium-term benefits to the Group.
Subsequent to the successful NATEP development programs with
Airbus and other parties, Haydale filed a joint patent with Airbus
for its leading electrically conductive pre-preg product which will
potentially address the need to replace copper in certain composite
areas of aircraft structure and consequently reduce weight with
associated carbon reduction benefits. Haydale is now working to further develop this technology.
Haydale previously announced that it had developed advanced nano
enhanced SynerG Super Tough 3D printing filament and SynerG
Conductive PLA 3D printing filament both of which demonstrated
enhanced properties over existing products on the market. We are
now in discussions with a number of parties within the additive
printing sector and anticipate sales of these products developing
later this calendar year
We announced in August 2021 that in conjunction with the English
Institute of Sport and the Welsh Centre for Printing and Coatings
that we had developed a range of advanced wearable technology sport
apparel that was worn by medal winning athletes in Tokyo. We are
pleased to announce that the graphene enabled muscle warming
clothing has been shortlisted in the Equipment and Wearable of the
Year and the Best Technology for Injury Prevention or
Rehabilitation categories in the 2022 Sports Technology Awards,
which will be judged later this year. Haydale is now working with
commercial parties to bring this ground-breaking technology to a
wider market
Haydale has been working with High Tech Systems Ltd ("High
Tech") on the optimisation of its nano enhanced thermal fluid
Hi-Therm(TM) during the Period. Subsequent to the Period end, we
announced an exclusive supply contract that will see Haydale use
its plasma functionalisation technology to enhance the thermal
conductivity and dispersion of boron nitride in thermal fluid
applications. By enhancing the thermodynamic properties of water,
Hi-Therm(TM) can significantly reduce the energy required to heat
buildings and is potentially a significant step forward in the
commercialisation of thermally efficient nanomaterials in the
energy sector. Hi-Therm(TM) will be formally launched by High Tech
at the FutureBuild 2022 conference and exhibition at Excel, London
in early March 2022. This is the first commercial application for
Boron Nitride, "white graphene", that we have announced but we
anticipate further releases as our capacity to improve the
dispersibility of Boron Nitride has many real-world
applications.
The commercialisation of our biomedical ink offering continues
both in the APAC region but especially within the European market
where we have established momentum with a significant bio medical
inks manufacturer. Our biomedical ink product was originally
created for the diabetes market but has now been developed to
potentially non-invasively detect other medical conditions through
the testing of uric acid. Haydale has been shortlisted to present
at a Kidney MedTech competition organised by Kidney Research UK in
March 2022. The competition aims to accelerate the development and
availability of transformational technologies to improve the lives
of kidney patients including the development of testing devices to
help patients to self-monitor and self-manage their health in a way
that is safe and reliable.
The Group continues to progress several feasibility projects
within the leisure footwear and industrial workwear market. These
projects are investigating the performance enhancement that our
functionalised masterbatches can deliver with initial outcomes
demonstrating increased grip and wear performance. One customer is
to manufacture 1,600 pairs of shoes to test market demand and we
remain optimistic that a number of other customers will move to
second stage testing during the calendar year. Through our work in
this area, we have also identified that our functionalised
elastomers can enhance the performance of tyres in the cycle sector
and also, potentially, the automotive sector and we are actively
working on commercialising our findings in this space.
Asia Pacific "APAC"
The three-year exclusive agreement with iCraft is continuing and
they have extended the use of Haydale's functionalised GNPs to the
outdoor leisure market with the development of a graphene-coated
nylon fabric, THERMiT(TM). The next generation fabric has been used
by South Korean sports apparel brand, Pro-Specs, in a new thermally
enhanced jacket which saw the initial production run of 8,000 items
sold out within weeks of being released. We understand that
interest has also been shown by a major golfing brand in the
development of graphene coated golf attire.
In order to take advantage of the commercial opportunities in
the APAC region we appointed our first Director Sales in Thailand
in May last year. We have subsequently promoted her to be Managing
Director of our Thailand facility and to further support the
commercial drive in this region have appointed a new Business
Development Manager. We are pleased with the progress made to date
and believe the medium-term outlook to be positive.
North America
Revenue at our US SiC and blanks manufacturing facility
continues to be adversely affected by the lingering impact of
Covid-19 on the US aerospace sector and whilst increased civilian
aviation traffic has been reported in the US internal market during
the Period, this had yet to filter down the aerospace supply chain
in any meaningful way.
However, and as previously announced, the Group has sought to
extend the geographical footprint of its US operation to Europe and
the Far East. Product testing by a significant European blanks user
has shown positive results versus the competition and the Group is
undergoing further verification testing at this potential customer.
Whilst these tests have taken longer than anticipated, the
Directors remain hopeful that Haydale will adopted as a second
supply source during 2022.
In January 2021 Haydale announced an Agreement which allows ENO
[1] to act as a sales representative for Haydale's ceramic and SiC
products in China (including Hong Kong) and Taiwan for an initial
period of two years. Whilst sales under this agreement have been
slower than the parties initially expected, progress is being made
by ENO in penetrating its local market and the prognosis going
forward is positive. Outside of this agreement, Haydale continues
to actively engage with several other SiC and blanks customers in
the region and is also working on other potential projects in
China. We anticipate that sales of SiC and blanks to the Far East
will increase in H2 FY2022.
Contract negotiations with a number of UK water utility and
wider infrastructure parties for the application of
CeramycGuard(TM) have continued during the Period. CeramycGuard(TM)
is an advanced ceramic surface treatment technology that uses
Haydale's SiC microfibre as part of its reinforcement and is
currently being assessed for use in dirty water and chemical
related applications in the UK. We are currently working towards
achieving DW31 (Clean Water) Accreditation in order to
significantly increase the scope of application and we hope to
achieve this during H2 FY2022. Post Period end, CeramycGuard(TM)
has been applied at a further test site for a major UK Water
Facility Company and we are currently monitoring performance at
this site.
We have previously reported that a contract dispute with our
second largest whisker customer was scheduled for arbitration in
April 2022 and this remains the case.
Grant Funded Projects
In April 2021 we announced a substantial award from the Advanced
Propulsion Centre's ("APC") Automotive Transformation Fund for
Haydale's research into materials that may enhance the storage of
hydrogen. This work is progressing well and will look to provide a
foundation for the advanced hydrogen storage solutions required by
Viritech. The APC has mapped demand for on-board hydrogen tanks
required for light duty vehicles in the UK up to 2035 and estimates
that 400,000 high pressure tanks will be required.
In January 2022, after a detailed review process conducted by
the Welsh Government, the Company was awarded SMARTCymru funding
that will allow Haydale to progress with the development of
PATit(TM), its anti-counterfeiting technology. PATit(TM) uses
graphene-enhanced, high-performance conductive inks and proprietary
software codes for brand and security protection that is
non-copiable and does not require electronic chips (NFC or RFID).
The award will focus on the development of the mobile app software
and secure server system required to store and read the PATit(TM)
codes and will provide a major boost as Haydale moves to
commercialise what it believes is ground-breaking technology. We
are pleased that the significant benefits of PATit(TM) are being
more widely understood and this is supported by it being
shortlisted for the 2022 British Engineering Excellence Awards in
the Materials Application of the Year category with the winners
announced in March 2022.
As previously set out, the Company only seeks to focus on grant
projects that have a clear commercial pathway or add significantly
to the Group's knowledge bank. The projects detailed are practical
examples of this ethos as are the other grants and awards received
in the Period.
We anticipate that full year 'Other Operating Income' will
decline marginally year on year as we do not expect any support
from the US Paycheck Protection Program in the current financial
year (FY2022 GBP0.14 million).
Technical and Patent Update
The HDPlas(TM) process to date has predominantly used gases as
the main method of introducing particles into the barrel to allow
the plasma functionalisation. Haydale has recently extended this
technology to allow for liquid dosing which enables many other
elements to be added to the surface chemistry of the nano
particles. The extension of the plasma bonding process for graphene
and other nano particles expands the potential market for our
products significantly in what is a leading-edge development. This
progression is patent pending and demonstrates the huge scope of
our HDPlas(TM) technology.
Capital Expenditure
The HDPlas(TM) functionalisation process is the cornerstone of
the Company's graphene and other nano particle offering and the
process is now proven and scalable. The HT1400 plasma reactor,
which will increase Haydale's functionalisation capacity
eight-fold, is expected at our Ammanford facility in the coming
weeks, and from the factory gate testing already completed no major
issues are anticipated with the on-site optimisation process. The
Directors believe that Haydale will shortly be one of the few
operators in the nano particle space that will be able to provide
consistent plasma functionalised graphene that can be incorporated
into and enhance our customers' products on an industrial
scale.
Unaudited Financial Results
The Group's recognised commercial income in the Period was
GBP1.19 million (FY H1 2021 GBP1.28 million). US revenue derived
from the sales of SiC and blanks reduced by GBP0.16 million (19%)
to GBP0.70 million (H1 FY2021 GBP0.86 million). Revenue within the
regions that focus on functionalised graphene and other nano
particles increased by GBP0.07 million (17%) to GBP0.49 million (H1
FY2021: GBP0.42 million).
During the past year, the Directors have sought to increase the
operational capacity of the business to ensure it has appropriate
resource to achieve its strategic objectives. As a result, Total
Adjusted Administrative Expenses increased in the Period to GBP2.55
million (H1 FY2021 GBP2.24 million) to reflect both this investment
and a lower level of cost absorption within the US operation.
The Group's adjusted operating loss was GBP1.75 million (H1
FY2021 GBP1.08 million) and the Loss before taxation was GBP2.46
million (H1 FY2021 GBP1.93 million). Capital expenditure in H1
FY2022 was GBP0.02million (H1 FY21: GBP0.02 million) however
deposits paid for the new HT1400 plasma reactor and other ancillary
equipment required for the production scale up totalling GBP0.21
million have been included within Other Receivables as the
equipment will be delivered post Period end.
The Group's net assets at 31 December 2021 were GBP9.30 million
(31 December 2020: GBP8.25 million). The Group's borrowings reduced
by GBP0.41 million during the Period to GBP1.32 million at the
Period end (30 June 2021: GBP1.73 million). Cash at the Period end
was GBP3.84 million (30 June 2020: GBP1.64 million). Negative
operating cash flow before working capital changes was GBP1.71
million (H1 FY2021 GBP1.06 million). A positive working capital
movement of GBP0.14 million (H1 FY2021 GBP0.11 million) meant that
Cash Used in Operations was GBP(1.58) million (H1 FY2021 GBP(0.96)
million).
The Company raised GBP4.80 million (net) via the issue of
85,055,893 new ordinary shares in September 2021 at an issue price
of GBP0.06 each (the "Fund Raise"), representing a discount of
approximately 22% to the closing mid-market price of the Company's
shares immediately before the Fund Raise. As at 31 December 2021,
and at the date of this announcement, the Company had 510,335,691,
ordinary shares in issue.
Outlook
Haydale's proprietary technology now has the potential to
deliver material change across many sectors and customers are
turning to Haydale in their search for cheaper, more
environmentally friendly and functionally effective materials. As a
result, Haydale is expanding the Group's capacity to functionalise
nano and other materials and continues to invest across the
business in those critical success factors that will ensure the
business can capitalize on market demand.
The Directors believe their actions to mitigate the gap caused
by our major customers order hiatus in the US Aerospace market in
terms of expanding customer territory and targeting new markets for
SIC outside Aerospace will benefit the Group in the medium and
longer term, which look more promising. Importantly, the core
plasma functionalisation technology which is central to our plans
continues to move forward positively and reinforces confidence in
the medium term and the significant potential for the Group.
Keith Broadbent
Chief Executive Officer
23(rd) February 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
For the six months ended 31 December 2021
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 2021 31 Dec 2020 30 Jun 2021
Note GBP'000 GBP'000 GBP'000
REVENUE 1,191 1,277 2,903
Cost of sales (583) (338) (924)
Gross Profit 608 939 1,979
Other operating income 194 212 575
Adjusted Administrative expenses (2,549) (2,235) (4,724)
Adjusted operating loss (1,747) (1,084) (2,170)
Adjusting administrative items:
Share based payments income/(expenses) 25 (75) (119)
Depreciation and amortisation (618) (627) (1,271)
(593) (702) (1,390)
Total trading administrative expenses (3,142) (2,937) (6,114)
LOSS FROM TRADING (2,340) (1,786) (3,560)
Total administrative expenses (3,142) (2,937) (6,114)
LOSS FROM OPERATIONS (2,340) (1,786) (3,560)
Finance costs (118) (147) (211)
LOSS BEFORE TAXATION (2,458) (1,933) (3,771)
Taxation 182 182 363
LOSS FOR THE YEAR FROM CONTINUING
OPERATIONS (2,276) (1,751) (3,408)
Other comprehensive income:
Items that may be reclassified to
profit or loss:
Exchange differences on translation
of foreign operations 13 (301) (368)
Remeasurements of defined benefit
pension scheme 30 14 208
TOTAL COMPREHENSIVE LOSS FOR THE
YEAR FROM CONTINUING OPERATIONS (2,233) (2,038) (3,568)
Loss per share attributable to owners
of the Parent
Basic (GBP) and Diluted (GBP) 2 (0.01) (0.01) (0.01)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As at 31 December 2021
Unaudited Unaudited Audited
31 Dec 2021 31 Dec 2020 30 Jun 2021
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill 1,341 1,454 1,341
Intangible assets 1,209 1,184 1,174
Property, plant and equipment 6,564 6,979 6,622
9,114 9,617 9,137
Current assets
Inventories 1,343 1,562 1,328
Trade receivables 347 580 715
Other receivables 629 483 595
Corporation tax 546 567 364
Cash and bank balances 3,840 1,875 1,644
6,705 5,067 4,646
TOTAL ASSETS 15,819 14,684 13,783
LIABILITIES
Non-current liabilities
Bank loans 1,311 44 844
Pension obligation 1,035 1,280 1,026
Other payable 2,463 2,564 2,370
4,809 3,888 4,240
Current liabilities
-------------- -------------- --------------
Bank loans 8 1,024 885
Trade and other payables 1,622 1,391 1,719
Deferred income 76 136 180
1,706 2,551 2,784
TOTAL LIABILITIES 6,515 6,439 7,024
TOTAL NET ASSETS 9,304 8,245 6,759
EQUITY
Capital and reserves attributable to
equity holders of the parent
Share capital 10,206 8,505 8,505
Share premium account 31,922 28,820 28,820
Share-based payment reserve 180 206 250
Retained (deficits) (32,631) (28,967) (30,430)
Foreign exchange reserve (373) (319) (386)
TOTAL EQUITY 9,304 8,245 6,759
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
For the six months ended 31 December 2021
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 31 Dec 30 Jun
2021 2020 2021
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Loss for the year from continuing
operations (2,276) (1,751) (3,408)
Adjustments for:-
Amortisation of intangible assets 116 88 176
Depreciation of property, plant
and equipment 502 537 1,096
Share-based payment (income)/charge (25) 75 119
Profit on disposal of plant
and equipment - 3 78
Finance costs 118 147 211
Pension plan contributions 29 - -
Pension - net interest expense 4 22 47
Taxation (182) (182) (363)
Operating cash flow before working
capital changes (1,714) (1,061) (2,044)
(Increase)/decrease/ in inventories (15) 150 384
Decrease / (increase) in trade
and other receivables 333 157 (90)
(Decrease)/increase in payables
and deferred income (179) (201) 174
Cash used in operations (1,575) (955) (1,576)
------------ ------------ ---------
Income tax received - - 383
Net cash used in operating activities - - (1,193)
------------ ------------ ---------
Cash flow used in investing
activities
Purchase of property, plant
and equipment (22) (21) (220)
Capitalisation of intangible
assets (151) (129) (260)
Net cash used in investing activities (173) (150) (480)
------------ ------------ ---------
Cash flow used in financing
activities
Finance costs (59) (91) (95)
Finance cost - right of use
asset (60) (56) (116)
Payment of lease liability (241) (310) (591)
Proceeds from issue of share
capital (net of share issue
costs) 4,803 2,757 2,757
New bank loans raised 451 - 800
Repayments of borrowings (887) (77) (219)
Net cash flow from financing
activities 4,007 2,223 2,536
------------ ------------ ---------
Effects of exchange rate changes (63) (66) (42)
Net increase in cash and cash
equivalents 2,196 1,052 821
Cash and cash equivalents at
beginning of the financial period 1,644 823 823
Cash and cash equivalents at
end of the financial period 3,840 1,875 1,644
============ ============ =========
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 2020 6,804 27,764 131 (18) (27,230) 7,451
Total comprehensive
loss for the period - - - (1,751) (1,751)
Other comprehensive
loss (301) 14 (287)
Recognition of share-based
payments - - 75 - - 75
Issue of ordinary share
capital 1,701 1,056 - - - 2,757
Transaction costs in - - - - - -
respect of share issue
At 31 December 2020 8,505 28,820 206 (319) (28,967) 8,245
Total comprehensive
loss for the period - - - - (1,657) (1,657)
Other comprehensive
profit (67) 194 127
Recognition of share-based
payments - - 44 - - 44
Issue - - - -
At 30 June 2021 8,505 28,820 250 (386) (30,430) 6,759
Total comprehensive
loss for the period - - - - (2,276) (2,276)
Other comprehensive
loss - - - 13 30 43
Recognition of share-based
payments - - (25) - - (25)
Share based payment
charges - Lapsed options - - (45) - 45 -
Issue of ordinary share
capital 1,701 3,102 - - - 4,803
At 31 December 2021 10,206 31,922 180 (373) (32,631) 9,304
========== ========== ============= =========== ========== =========
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 INTERIM FINANCIAL STATEMENTS
For the six months ended 31 December 2021
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 2022 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 2021.
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 2021 does
not constitute the full statutory accounts for that period. The
Annual Report and Accounts for 30 June 2021 have been filed with
the Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Accounts for 2021 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 Directors have prepared and reviewed detailed financial
forecasts of the Group and, in particular, considered the cash flow
requirements for the period from the date of approval of these
interim results to the end of February 2023. These forecasts sit
within the Group's latest estimate and within the longer-term
financial plan, both of which are updated on a regular basis. The
Directors remain mindful of the impact that the risks and
uncertainties set out on page 11 of the Annual Report and Accounts
for the year ended 30 June 2021 may have on these estimates.
After due consideration of the forecasts prepared, the Group's
current cash resources, the repayment profile of its debt
facilities, and its ability to potentially access additional
capital funds to further develop the business, the Directors
consider that the Company and the Group have adequate financial
resources to continue in operational existence for the foreseeable
future (being a period of at least 12 months from the date of this
report), and for this reason the financial statements have been
prepared on the going concern basis.
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 2021 31 Dec 2020 30 Jun 2021
GBP'000 GBP'000 GBP'000
Loss after tax attributable
to owners of the Haydale
Graphene Industries Group (2,276) (1,751) (3,408)
Weighted average number
of shares:
- Basic and Diluted 472,892,608 392,921,556 408,967,698
Loss per share:
- Basic (GBP) and Diluted
(GBP) (0.01) (0.01) (0.01)
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 2021 interim financial statements were approved
by a duly appointed and authorised committee of the Board of
Directors on 22 February 2022.
[1] Qinhuangdao ENO High Tech Material Development Co, Ltd
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