TIDMAXS
RNS Number : 1164U
Accsys Technologies PLC
21 November 2023
AIM: AXS
Euronext Amsterdam: AXS
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
21 November 2023
Accsys Technologies PLC
("Accsys", "the Group" or the "Company")
Interim results for the six months ended 30 September 2023
Accsys, the fast-growing company that enhances the natural
properties of wood to make high performance and sustainable
building products, today announces its unaudited interim results
for the six months to 30 September 2023 (H1 FY24).
Six months
to 30 Sep Six months % Change
2023 to 30 Sep
2022
Revenue EUR71.2m EUR58.9m 21%
Gross profit EUR20.3m EUR18.1m 12%
Underlying EBITDA(1) EUR1.6m EUR4.5m (64%)
Period end net debt(3) (EUR48.2m) (EUR61.4m)
Adjusted cash(4) EUR10.8m EUR7.2m
Highlights
-- 21% growth in revenue at EUR71.2m, driven by good product
demand, higher average sales prices and increased production
capacity following reactor 4 start-up in September 2022
-- 20% growth in Accoya sales volumes at 28,807m(3) :
o Strong growth of Accoya in Rest of World and Rest of Europe
markets, up 42% and 28% respectively
o 30% growth in Accoya for Tricoya production at 8,393m(3) ,
supporting our belief in Tricoya market potential
-- 2 percentage points decline in gross profit margin to 29%,
reflecting higher raw material costs and wood inventory
optimisation
-- 64% decrease in underlying EBITDA at EUR1.6m: volume growth
and higher average Accoya prices offset by:
o Increased pre-operational costs in Accoya plant in Kingsport,
US, ahead of completion in mid-2024 and Tricoya UK plant operating
costs, due to a change in accounting treatment(5)
o Increased operating expenditure on sales & marketing,
executive recruitment and engineering costs
-- Strategic growth projects:
o Arnhem - plant performing well; efficiency improvements
ongoing
o Accoya plant in Kingsport, US - construction of new 43,000m(3)
plant progressing well and in line with plan; on-track for
completion and commercial operation in mid-2024
-- Tricoya UK plant project - while Accsys continues to believe
in the market potential for Tricoya, in view of the current
operating environment and shift of Company focus on the Accoya
plant in Kingsport, US, the Board is undertaking a review of the
viability, strategic interest and financial capabilities of its
Tricoya UK plant in Hull. The review will be conducted in early
calendar year 2024
-- Exceptional item(2) of EUR1.2m in relation to organisational
re-alignment and cost savings initiatives: Actions being taken to
deliver annual cost savings of EUR3.0m+. I mpairment loss
(non-cash) of EUR7.0m recognised in the period relating to the
Tricoya segment due to an increase in the discount rate used
following an increase in market interest rates and the Company
specific market volatility factor
-- Net debt at 30 September 2023 of EUR48.2m, an increase of
EUR4.1m since the FY23 year end, reflecting capex of EUR2.0m,
increase in working capital and inventory position and scheduled
loan interest payments partially offset by EBITDA generation during
the period
-- Fundraising: The Company today announces a fundraising to
raise gross new proceeds of approximately EUR24m and an extension
of its debt facilities. The proceeds of the fundraising will allow
Accsys to complete the delivery of its Accoya plant in Kingsport,
US, in mid-2024, strengthen its balance sheet and increase working
capital headroom in the face of a challenging macro trading
environment. Decisive action has been taken to secure the
fundraising and a debt extension package to ensure the Company has
the funding platform necessary to execute its growth strategy
Notes
(1) Underlying EBITDA is defined as operating profit/(loss)
before exceptional items and other adjustments, depreciation and
amortisation, and includes the Group's attributable share of our
USA joint venture's underlying EBITDA. (See note 2 to the financial
statements).
(2) Other exceptional items recognised in the prior year include
EUR58m for the impairment of Tricoya segment assets and EUR0.5m
related to advisor fees related to the Tricoya consortium
reorganisation.
(3) Net debt at 31 March 2023 was EUR44.1m.
(4) Adjusted cash excludes cash pledged for the Letter of Credit
provided to FHB of EUR10m.
(5) Tricoya UK's ongoing running costs are being treated as
operating expenditure in the first half of FY24 following the
introduction of Tricoya UK's hold period in H2 FY23.
Dr. Jelena Arsic Van Os, Chief Executive Officer of Accsys,
commented :
"In navigating the challenging macro-economic conditions of the
first half of the year, our new management team has shown
unwavering commitment in reshaping Accsys towards a less complex
business model with increased execution focus. As we reflect on our
business performance, we acknowledge and proactively address
short-term obstacles. However, our confidence in our innovative
product range remains unshaken, with the conviction that our Accoya
and Tricoya premium offerings set us apart in the market,
representing substantial untapped potential. To ensure delivery on
this potential, the Company has raised today approximately EUR24m
of new proceeds from our shareholders to improve near-term
liquidity and enable us to finalise the construction of our Accoya
plant in Kingsport, US, which alongside our wider operations,
strengthens Accsys's position for growth in both the medium and
longer term."
Current trading and outlook
Current market conditions remain challenging, reflecting ongoing
difficult macro conditions across our markets, with sales volumes
under continued pressure as distributors reduce their inventory
levels ahead of the upcoming holiday period. Sales performance by
region remains mixed. Despite the economic environment, we have
continued to maintain our premium price point on both our Accoya
and Tricoya products, reflecting their sustainable, durable and
high-performance qualities.
The Board does not expect trading conditions to improve
materially until the middle of the 2024 calendar year. The second
half of the financial year is typically stronger than H1, due to
increased sales in the Northern Hemisphere in anticipation of the
peak construction season. Accordingly, the Board believes there
will be an improvement in product demand in Q4 FY24, aided by the
unwind of distributor destocking that has taken place in recent
months. However, despite these factors, given the current market
backdrop and expected sales volume for the remainder of this
financial year, the Board believes that the FY24 results will be
below current market expectations.
The remainder of the current financial year will see continued
focus on completion of the Kingsport plant and on building demand
for Accoya globally, as FY24 will see an increase in Company's
capacity in conjunction with the transfer of volumes from Arnhem to
Kingsport. The Company will also focus on delivering continuous
operational improvements at Arnhem. With its unique product
portfolio set in a growth industry, increased capacity at Arnhem
and future capacity coming from the new plant in Kingsport, we
believe Accsys is well positioned for future growth. We are
broadening our global distributor network, developing our Approved
Manufacturers Programme ("AMP") and accelerating sales &
marketing activity, particularly in the US, which will support our
regional growth. While Accsys continues to believe in the
attractive market and growth potential for Tricoya, in view of the
current operating environment and shift of company focus on the
Accoya plant in Kingsport, US, the Board is undertaking a review of
the viability, strategic interest and financial capabilities of its
Tricoya UK plant in Hull.
This announcement comprises inside information for the purposes
of EU MAR and UK MAR. The person responsible for making this
announcement is Nick Hartigan, General Counsel and Company
Secretary, Accsys Technologies PLC.
Enquiries:
Investor Relations / Analysts : Katharine Rycroft, Accsys
Technologies PLC ir@accsysplc.com
Media : Matthew O'Keeffe, Alex Le May, FTI Consulting (UK) +44
(0) 20 3727 1340
Media: Clemens Sassen, Tessa Nelissen, Huijskens Sassen
Communications (NL) +31 (0) 20 68 55 955
Deutsche Numis (London): Oliver Hardy (NOMAD), Ben Stoop +44 (0)
20 7260 1000
ABN AMRO (Amsterdam ): Julie Wakkie, Diederik Berend +31 20 628
5789
Accsys Technologies PLC
Chief Executive's Report
Overview of H1 FY24
Revenue and volumes in H1 FY24 were 20% ahead of the prior year.
However, demand for our products softened in some of our markets
towards the end of the half, reflecting exceptionally difficult
trading conditions in the building materials, construction and
residential housing markets globally.
Demand for Accsys' premium wood products has, up until the late
summer of this year, always exceeded supply. The quality and
desirability of Accoya and Tricoya continues to be widely
recognised throughout the industry and has allowed us to implement
a disciplined pricing strategy. With increased capacity at Arnhem,
we have been able to give our customers and distributors the
opportunity to purchase and hold more products than in recent
years. As the global construction industry has slowed, customers
have been holding inventory and experiencing slowing order books.
Correspondingly, new orders for our products began to slow over the
summer as distributors worked down their stock levels.
In view of this trading environment, we announced on 1 September
2023 that sales volumes and revenues for FY24 were likely to be
below market expectations. We took immediate and decisive steps to
reduce operating costs, optimise working capital and implement cost
saving initiatives and have made good progress on this over the
last few months, details of which can be found on page 5. In
parallel, we are taking actions to accelerate our sales approach to
stimulate demand and achieve greater market penetration.
Our plant in Arnhem performed well in H1 FY24. During the period
we have continued to focus on its efficiency, including further
work on optimising reactor 4 to reduce cycle times and deliver more
capacity and also implement other operational improvement
programmes across the site, focusing on cost, safety and
reliability.
We have also made good progress with our Accoya USA JV in
Kingsport, Tennessee. Construction is now c.78% complete and
equipment setting c.87% complete. The project remains on track for
commercial operation in mid-2024.
Accsys continues to believe in the attractive market and growth
potential for Tricoya, with product demand remaining strong. In
view of the current operating environment and shift of company
focus on the Accoya USA project, the Board is undertaking a review
of the viability, strategic interest and financial capabilities of
its Tricoya UK plant in Hull.
Summary of financial performance
Accsys delivered revenues of EUR71.2m in H1 FY24, a 21% increase
on the prior year, driven by good product demand, higher average
sales prices and increased production capacity following the
start-up of reactor 4 in September 2022.
Despite good revenue growth, Underlying EBITDA decreased by
EUR2.9m to EUR1.6m. Volume growth and higher average Accoya prices
were offset by higher average wood prices, partially offset by
lower net acetyls cost. Increased pre-operational costs in the
Kingsport plant ahead of completion, higher Tricoya UK plant
operating costs due to a change in accounting treatment(5) , and
increased operating expenditure on sales & marketing, executive
recruitment and engineering costs also contributed.
Gross margin weakened by two percentage points to 29% (H1 FY23:
31%), reflecting higher raw material costs and wood inventory
optimisation.
Underlying loss before tax was EUR5.0m (H1 FY23: loss of
EUR0.6m). Statutory loss before tax was EUR13.1m (H1 FY23:
EUR56.3m).
Net debt increased by EUR4.1m to EUR48.2m since the FY23 year
end , reflecting capex payments of EUR2.0m, an increase in working
capital and scheduled loan interest payments, partially offset by
EBITDA generation during the period.
An exceptional operating cost of EUR1.2m has been recognised in
the period in relation to organisational realignment and cost
savings initiatives, including headcount reductions, which are
expected to deliver annual savings of more than EUR3.0m. An
impairment loss (exceptional non-cash item) of EUR7.0m has been
recognised in the period relating to the Tricoya segment (H1 FY23:
EUR58.0m) due to an increase in the discount rate used following an
increase in market interest rates and the Company specific market
volatility factor.
Summary of product financial performance - Accoya and
Tricoya
H1 FY24 Growth on
PY
Accoya revenue EUR68.2m +16%
----------- ----------
Accoya sales
volumes 28,807m(3) +20%
----------- ----------
Sales volume H1 FY24 Growth on
by end market m3 PY
----------- ----------
UK & Ireland 6,165 +6%
----------- ----------
Rest of Europe 7,385 +28%
----------- ----------
North America 4,218 +4%
----------- ----------
Rest of World 2,646 +42%
----------- ----------
Tricoya 8,393 +30%
----------- ----------
Revenues from Accoya grew by 16% in the first half of FY24 to
EUR68.2m, driven by good product demand and increased production
capacity following the commercial start-up of reactor 4 in Arnhem
in September 2022. Accoya volumes grew by 20% to 28,807m(3) . Sales
volumes in all our end markets grew year on year, with particularly
strong performances recorded in the Rest of World (+42%) and Rest
of Europe (+28%) regions.
Revenues from Accoya for Tricoya as a percentage of total sales
volumes increased in H1 FY24 and now represent 29% of total sales
volumes, versus 24% at the end of the FY23. Accoya for Tricoya
revenues in H1 FY24 grew by 31% to EUR11.4m, driven by continued
strong product demand. Our Accoya for Tricoya partners remain
committed and supportive. Tricoya panel revenue also increased to
EUR2.9m in H1 FY24.
Update on strategic growth projects - Accoya and Tricoya
Accoya
In September 2022, we completed the expansion of our plant in
Arnhem, adding a new fourth reactor with capacity for an additional
20,000 cubic metres, and enabling the site's maximum annual
capacity to increase to 80,000 cubic metres. A large proportion of
current capacity is being used to seed the US market, with 16% of
FY23 sales volumes going to North America.
In addition to the aforementioned operational improvement
programmes across the plant, other self-help measures to reduce
costs and improve manufacturing quality include improved target
operating models that will drive simplification within operations.
As we look to minimise wastage, we will also introduce new scanning
technology which will allow us to identify any material flaws in
Accoya wood prior to being converted into Accoya Color.
Under our joint venture with Eastman, a world leader in the
production of acetyls, we are building an Accoya plant in the US at
Eastman's Kingsport, Tennessee site. The plant has been designed
with scalability in mind and is being built to enable future rapid
expansion. Under the joint venture, Accsys holds a 60% interest and
Eastman a 40% interest. Both joint venture partners continue to be
fully engaged in delivering this strategically important project,
which will replicate the proven technology of our successful plant
in Arnhem but with additional improvements, most notably relating
to integration of Eastman's acetyls supply to the new plant - not
only is this a safer process, but it will significantly reduce
logistical expense, storage costs and working capital.
We have continued to make good progress with the construction of
the plant during H1 FY24. Key milestones include the completion of
ground works, ongoing steelwork and main warehouse construction,
installation of the reactors on site, placement of multiple large
sub-contracts and procurement of major equipment. As we move
towards completion of the plant, we have commenced execution of the
resourcing plan along with increasing operational readiness
activities which will, in the short term, lead to increased costs
being incurred. The total cost of completion of Kingsport is now
estimated to be c.15% higher than previously communicated at
approximately $160m.
Our Accoya Color manufacturing plant in Barry, Wales, has
increased our ability to convert Accoya wood into Accoya Color. In
H1 FY24 we produced 2,434m(3) of Accoya Color (H1 FY23: 2,937m(3)
), with volumes impacted by current market weakness. Average sales
prices were, however, c.10% higher than in the prior year - a
highly credible performance given the current market backdrop.
Although sales fell by 16% in the Germany, Switzerland and Austria
region (DACH) in H1 FY24, our other markets - including North
America - delivered sales growth of 10% on the prior year. Post 30
September 2023, product sales have continued to gain momentum in
North America, with current orders indicating higher volume growth
in H2 FY24 than in H1 FY24.
As we increase our Accoya production capacity, we continue to
expect increased Accoya Color sales in the medium term. In addition
to the product's existing markets, Accoya Color was launched in the
UK in November 2023 with further market launches in
development.
Tricoya
Demand for our Tricoya products remains strong despite limited
production and we are continuing to grow the market with both
existing and new customers. In addition, we will continue our
R&D on sourcing alternative wood species for Tricoya which have
a shorter supply chain.
Accsys stopped site activity at the Tricoya UK plant in Hull in
November 2022, placing the project into a hold period to mitigate
the risk of weaker economics on start-up and to allow the Board
time to assess the economics and capability of the plant and its
potential returns on investment. The Company is using modest levels
of internally generated cash (c.EUR0.5m per month) to maintain the
plant and progress certain pre-construction works. These include
mechanical preservation works, detailed construction work scoping,
planning and cost estimating, completion of minor construction
packages, software programming and documentation validation. The
remaining costs relate to employee & office, landlord and
insurance costs.
Accsys continues to believe in the attractive market and growth
potential for Tricoya, with product demand remaining strong. In
view of the current operating environment and shift of company
focus to the Kingsport project in the US, the Board is undertaking
a review of the viability, strategic interest and financial
capabilities of its Tricoya UK plant in Hull.
Reducing operating costs and optimising working capital
In our trading statement on 1 September 2023, we announced that
we are taking immediate and decisive actions to reduce operating
costs and optimise working capital. Our aim is to re-set and
implement a lean operating business model and to right-size the
business, delivering annual cost savings of more than EUR3.0m. This
is being achieved through organisational alignment, including
headcount reductions - all of which are in non-operational areas -
both centrally (London head office) and locally across our
international operations. In this way Accsys is creating cleaner
reporting lines and a simplified business structure. In addition,
we have reduced the use of interim labour and manual stacking in
our Arnhem plant and have significantly scaled back on the use of
third party consultants. Other actions taken during the period
include implementing additional cost controls across all of our
operations, cutting non-discretionary spend and eventually moving
to automated functions and controls.
Going forward, a key focus for the Company will be the effective
management of our supply chain. We are in the process of reducing
our wood buying to return to normalised inventory levels and are
looking at options in respect of anhydride supply to reduce
costs.
Accelerating our sales approach
In our September statement, we stated that we would accelerate
our sales approach to stimulate demand and achieve greater market
penetration in our core and emerging markets. Since then, we have
accelerated our sales & marketing activity by adding necessary
distribution in key markets. During the period we appointed six new
distributors; two in Belgium, and one each in Greece, Italy, the UK
and the USA. The Company now has 67 distributors of its products
and 661 AMPs worldwide, of which 111 AMPs and eight distributors
are in the Americas. In H1 FY24, the Company added 56 AMPs to its
global network, bringing a total of 85 AMPs in the year to
date.
With room to progress further and develop new markets to help
build further global product demand, Accsys continues to establish
key window, door, decking and cladding manufacturing partners
through its AMPs and broad network. Lead generation and brand
awareness campaigns continue to promote Accoya to its key audiences
and support the sell through of materials downstream.
As part of the organisational alignment, the Company is
appointing additional heads in the US and France and engaging with
multiple partners in the growing Middle East region. This year we
appointed our first Marketing Coordinator and Sales Manager in
France to execute our sales & marketing strategy. The new team
is focusing on developing the AMP programme in France as well as
working on an Approved Installer Programme. It has made significant
progress this year to date, on-boarding 22 new AMPs with training
and best practice in the production and use of Accoya, to help
guarantee high-quality products for end users. During the period we
also appointed a new Marketing Manager in the DACH region.
Capital Raise
We have today announced a fundraising to raise gross new
proceeds of approximately EUR24m and an extension of our debt
facilities. The proceeds of the fundraising allow us to complete
the delivery of our US plant in Kingsport in mid-2024, strengthen
our balance sheet and increase working capital headroom in the face
of a challenging macro trading environment.
Dr. Jelena Arsic Van Os
Chief Executive Officer
21 November 2023
Accsys Technologies PLC
Finance Review
Statement of comprehensive income
H1 FY24 revenue increased by 21% to EUR71.2m in H1 FY24 (H1
FY23: EUR58.9m), driven by continuing demand for our products,
higher average sales prices and increased production capacity
following the start-up of reactor 4 in Arnhem in September
2022.
Accoya sales volumes increased by 20% to 28,807m(3) , reflecting
additional capacity and also a weaker comparable period last year
following production downtime in Arnhem during the tie-in and
installation of reactor 4 in 2022. While demand for both Accoya and
Tricoya has been good in H1, demand has softened across some of our
regions towards the end of H1 FY24 and into H2 FY24 as our
distributors began to experience a softening in the global
construction and building materials markets.
Accoya for Tricoya sales volumes increased by 30%, with revenues
increasing by 31% to EUR11.4m. Accoya sales to our customers for
the manufacture of Tricoya panels are currently used to develop the
market for Tricoya products and now represent 29% of total Accoya
sales volumes (H1 FY23: 27%).
Other Revenue, which predominantly relates to the sale of our
acetic acid by-product into the acetyls market, decreased by 36% to
EUR4.9m (H1 FY23: EUR7.6m), reflecting lower acetic acid sales
prices. These sales act as a partial hedge to acetic anhydride
costs which also decreased during the period. Net acetyls costs
decreased on the prior year.
Raw wood input costs were higher year on year, with higher wood
mix costs in addition to moderately higher average wood prices.
Cost of sales increased by 25%, with 20% higher sales volumes
and higher raw wood costs being partially offset by lower acetic
anhydride costs.
While gross profit of EUR20.3m was 12% higher than in the prior
year (H1 FY23: EUR18.1m), gross profit margin fell by two
percentage points to 29%. This reflects our use of higher-cost
appearance grade wood for Accoya for Tricoya production during H1
FY24 as we have sought to continue to lower inventory levels which
increased during 2022 in anticipation of the start-up of reactor 4.
In H2 FY24 we will return to using less expensive Spanish radiata
pine and other wood chip grade wood for Accoya for Tricoya
production.
Underlying other operating costs (excluding depreciation and
amortisation) increased from EUR13.3m to EUR17.7m. This is due to
Tricoya UK's ongoing running costs being treated as operating
expenditure in the first half following the introduction of Tricoya
UK's hold period in H2 FY23. It is also the result of increased
investment in sales & marketing, higher engineering costs and
greater spend on executive recruitment.
Depreciation and amortisation charges increased by EUR1.3m to
EUR4.8m following commercial production from reactor 4 in September
2022.
Underlying finance expenses increased EUR0.1m to EUR1.6m
following the interest on Tricoya UK's NatWest facility not being
capitalised post the introduction of the hold period for Tricoya UK
in H2 FY23, higher market interest rates on the variable rate
borrowings held partially offset by a foreign exchange gain on the
cash pledged to ABN AMRO which is held in US dollars (see note
11).
An impairment loss (exceptional non-cash item) of EUR7.0m has
been recognised in the period relating to the Tricoya segment (H1
FY23: EUR58.0m) due to an increase in the discount rate used
following an increase in market interest rates and the Company
specific market volatility factor.
An exceptional operating cost of EUR1.2m has been recognised in
the period for restructuring costs relating to reducing Accsys'
administrative operating cost base.
No other adjustments have been recognised in the current period
which were previously also excluded from underlying results. These
other adjustments related to foreign exchange differences on the US
dollar cash pledged to ABN AMRO and other foreign exchange
differences on cash held in the prior year period. See note 4 for
further details.
Accsys' share of its US joint venture (Accoya USA LLC) net loss,
which is accounted for using the equity method, increased by
EUR0.8m to EUR1.2m (H1 FY23: EUR0.4m) as the entity increases its
pre-operating activity as it progresses towards completion in
mid-2024.
Underlying loss before tax increased by EUR4.4m to EUR5.0m (H1
FY23: EUR0.6m). After taking into account exceptional items
(including the impairment loss and restructuring cost) and other
adjustments in the prior year period, loss before tax amounted to
EUR13.1m (FY23: EUR56.3m).
The tax charge of EUR0.4m in the first half was in line with the
prior year.
Underlying loss per share increased to EUR0.02 per share (H1
FY23: EUR nil per share). A statutory loss per share was recognised
of EUR0.06 per share (H1 FY23: EUR0.13 per share).
Cash flow
Cash flows generated from operating activities before changes in
working capital decreased by EUR2.9m to EUR1.8m (H1 FY23: EUR4.7m),
reflecting the operational cash flow generated by our plant in
Arnhem, partly offset by the change in treatment on operating costs
for the Tricoya UK plant following the introduction of the hold
period in H2 FY23.
Inventory levels increased by EUR1.9m during the period with
higher finished good levels partially offset by lower raw material
levels which are being closely managed.
At 30 September 2023, the Group held cash balances of EUR20.8m,
a EUR5.8m decrease in the period, attributable to capex payments of
EUR2.0m, the first scheduled loan repayment of EUR2.25m on the
Group's ABN AMRO term loan, and the increase in inventory referred
to above. This was partially offset by cash flow generated from
operating activities. When adjusting for the cash pledged to ABN
AMRO of $10.0m (see note 11), adjusted cash decreased by EUR6.0m
during the period to EUR10.8m.
Financial position
Plant and machinery additions of EUR1.1m (H1 FY23: EUR20.5m)
consisted primarily of maintenance capex for the Arnhem plant.
Trade and other receivables increased to EUR13.6m (H1 FY23:
EUR11.3m), primarily due to higher sales than in H1 FY23.
Trade and other payables reduced by EUR5.2m to EUR21.4m (H1
FY23: EUR26.6m), attributable to a decrease in creditors following
the completion of the Arnhem expansion project and lower activity
at the Tricoya UK plant in Hull.
Amounts payable under loan agreements decreased to EUR64.2m
during the period (FY23: EUR65.9m) following the first scheduled
loan repayment of EUR2.25m on the Group's ABN AMRO term loan
partially offset by interest capitalised on the Tricoya NatWest
EUR6.0m facility (EUR0.3m) and interest accrued on the ABN AMRO and
De Engh loans payable in October 2023.
Net debt increased by EUR4.1m in the period to EUR48.2m (FY23:
EUR44.1m) due to capex investments of EUR2.0m and the increase in
inventory and loan interest payments partially offset by EBITDA
generation during the period.
Risks and uncertainties
As described on page 50 to 55 of the Accsys 2023 Annual Report,
the business, financial condition or results of operations of the
Group could be adversely affected by a number of risks. The Group's
systems of control and protection are designed to help manage and
control risks to an appropriate level rather than to eliminate
them. These specific principal risks and related mitigations - as
currently identified by Accsys' risk management process - have not
changed significantly since the publication of the 2023 Annual
Report in July of this year.
These risks relate to the following areas: finance, health,
safety & environment; Tricoya UK plant; Kingsport plant;
licensing/partnering and protection of intellectual property;
market and supply chain disruption; manufacturing; talent; sale of
products; environmental, social & governance (ESG) and
sustainability; IT; reputational risk and governance, compliance
& law.
Going concern
The condensed consolidated financial statements are prepared on
a going concern basis, which assumes that the Group will continue
in operational existence for the foreseeable future, and at least
for the 12 months from the date these financial statements are
approved (the 'going concern period'). As part of the Group's going
concern review, the Directors have assessed the Group's trading
forecasts, working capital and liquidity requirements, and bank
facility covenant compliance for the going concern period under a
base case scenario and a severe but plausible downside
scenario.
The cash flow forecasts used for the going concern assessment
represent the Directors' best estimate of trading performance and
cost implications in the market based on current agreements, market
experience and consumer demand expectations. The economic
environment has remained challenging throughout the financial year
(explained further in the management discussion of the results) and
it is not known how long this will continue to directly impact the
business and customer behaviour. For the purposes of the Group's
going concern assessment, the Directors have therefore made
assumptions on the likely future cash flows. These forecasts
indicate that, in order to continue as a going concern, the Group
is dependent on achieving a certain level of performance relating
to the production and sale of Accoya, and the management of its
working capital.
In both scenarios, the Directors have assumed no commitment will
be made to complete the construction and start-up of the Tricoya UK
plant in Hull unless the Board definitively determines to proceed
with the project and appropriate levels of funding arrangements are
obtained to do so. In the downside scenario, it is assumed that the
Group discontinues its financial support in relation to the Tricoya
UK plant.
The Directors' have also considered the possible quantum and
timing of funding required to complete the plant currently under
construction by Accoya USA LLC, and for the initial operational
working capital requirements of the entity. Notwithstanding that
the construction project benefits from certain contractual measures
in place with the lead engineering, construction and procurement
contractor, Accsys has a contractual obligation to fund its 60%
share of Accoya USA LLC on a pro rata basis with its joint venture
partner (Eastman Chemicals Company).
The Group is also dependent on the Group's financial resources
including its existing cash position, banking and finance
facilities, and the proceeds from the fundraise, and the amended
bank facilities announced today (see note 14 for details) which are
assumed in both scenarios.
Capital Raise
The gross proceeds from the fundraise of approximately EUR34m
(which includes approximately EUR24m of gross new proceeds for the
Company) include:
1) An equity Placing of between approximately EUR13m and EUR15m
which will be settled on 23 November 2023. Certain of the Company's
major shareholders have committed to provide approximately EUR13m
of new equity through the equity Placing.
2) The issue of between approximately EUR9m and EUR11m new 6
year term convertible loan notes and the repricing and reissue of
the existing EUR10m De Engh convertible loan note (see note 11)
have also been arranged on 21 November 2023, subject to the
completion of the equity cash Placing.
On 21 November 2023, ABN AMRO and the Company agreed to amend
the ABN AMRO debt facilities referenced in note 11 and extend these
by a further 18 months to March 2026. The facilities have also been
amended to provide for the release of EUR10m of cash collateral
held by ABN AMRO, EUR7.5m of which will be used to repay a portion
of the term loan with the balance providing the Group with
additional liquidity. The amendment of the facilities also allows
for an 18-month amortisation holiday. The extension is subject to
the completion of the equity Placing (see note 14 for further
details).
The Directors have also considered a severe but plausible
downside scenario against the base case with reduced Accoya sales
volumes. The Directors do not expect the assumptions in the severe
but plausible downside scenario to materialise, but should they
unfold, the Group has several mitigating actions it can implement
to manage its going concern risk, such as deferring discretionary
capital expenditure and implementing further cost reductions to
maintain a sufficient level of liquidity and covenant headroom
during the going concern period. The combined impact of the above
downside scenarios and mitigations does not trigger a minimum
liquidity breach or covenant breach at any point in the going
concern period.
The Directors are confident that the equity Placing will be
completed on 21 November 2023. However, in the unlikely situation
that the capital raise was not to be completed, the Group would
need to obtain alternate financing in an expedited fashion, in
order to be able to discharge its liabilities. It is not certain
that the Group would be able to obtain any such financing on
commercially acceptable terms. This would give rise to a material
uncertainty which may cast significant doubt on the Group's ability
to continue as a going concern.
After carefully considering all the factors explained in this
statement, the Directors believe that it is most appropriate to
prepare these financial statements on the going concern basis.
These financials statements therefore do not include the
adjustments that would result if the Group was unable to continue
as a going concern.
Steven Salo
Chief Financial Officer
21 November 2023
Accsys Technologies PLC
Condensed consolidated statement of comprehensive income for the
six months ended 30 September 2023
Note Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
6 months 6 months 6 6 months 6 months 6 Year Year Year
months months
ended ended ended ended ended ended ended ended ended
30 30 31 March 31 March 31
30 Sept 30 Sept Sept 30 Sept 30 Sept Sept March
2023 2023 2023 2022 2022 2022 2023 2023 2023
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Underlying Underlying Underlying
Exceptional Exceptional Exceptional
items Total items Total items Total
& other & other & other
adjustments* adjustments* adjustments*
Accoya wood
revenue 63,313 - 63,313 51,088 - 51,088 143,493 - 143,493
Tricoya panel
revenue 2,918 - 2,918 201 - 201 1,374 - 1,374
Licence revenue 46 - 46 11 - 11 329 - 329
Other revenue 4,930 - 4,930 7,584 - 7,584 16,822 - 16,822
--------------------- --- ----------- ------------- ---------- ----------- ------------- ---------- --------------------- ------------- ----------
Total revenue 2 71,207 - 71,207 58,884 - 58,884 162,018 - 162,018
Cost of sales (50,865) - (50,865) (40,742) - (40,742) (106,852) - (106,852)
----------- ------------- ---------- ----------- ------------- ---------- --------------------- ------------- ----------
Gross profit 20,342 - 20,342 18,142 - 18,142 55,166 - 55,166
Other operating
costs 3 (22,482) (8,200) (30,682) (16,773) (58,481) (75,254) (39,878) (87,453) (127,331)
Operating
(loss)/profit (2,140) (8,200) (10,340) 1,369 (58,481) (57,112) 15,288 (87,453) (72,165)
Net finance
expense (1,610) 89 (1,521) (1,530) 2,699 1,169 (3,224) 9,350 6,126
Share of net
loss of joint
venture accounted
for using the
equity method 13 (1,211) - (1,211) (403) - (403) (1,036) - (1,036)
(Loss)/profit
before taxation (4,961) (8,111) (13,072) (564) (55,782) (56,346) 11,028 (78,103) (67,075)
Tax expense 5 (420) - (420) (357) - (357) (2,787) - (2,787)
(Loss)/profit
for the period (5,381) (8,111) (13,492) (921) (55,782) (56,703) 8,241 (78,103) (69,862)
----------- ------------- ---------- ----------- ------------- ---------- --------------------- ------------- ----------
Items that may
be reclassified
to profit or loss
Gain/(loss)
arising on
translation
of foreign
operations 22 - 22 67 - 67 (61) - (61)
Gain arising
on foreign
currency cash
flow hedges - - - - 90 90 42 - 42
Total other
comprehensive
income/(expense) 22 - 22 67 90 157 (19) - (19)
Total comprehensive
(loss)/gain
for the period (5,359) (8,111) (13,470) (854) (55,692) (56,546) 8,222 (78,103) (69,881)
=========== ============= ========== =========== ============= ========== ===================== ============= ==========
Total comprehensive
(loss)/gain
for the year
is attributable
to:
Owners of Accsys
Technologies
PLC (5,359) (8,111) (13,470) (214) (26,155) (26,369) 9,509 (48,566) (39,057)
Non-controlling
interests - - - (640) (29,537) (30,177) (1,287) (29,537) (30,824)
Total comprehensive
(loss)/gain
for the period (5,359) (8,111) (13,470) (854) (55,692) (56,546) 8,222 (78,103) (69,881)
=========== ============= ========== =========== ============= ========== ===================== ============= ==========
Basic (loss)/profit
per ordinary
share 6 EUR(0.02) EUR(0.06) EUR(0.00) EUR(0.13) EUR0.05 EUR(0.19)
Diluted
(loss)/profit
per ordinary
share 6 - - - - EUR0.04 -
The notes form an integral part of these condensed financial
statements.
* See note 4 for details of exceptional items and other
adjustments.
Accsys Technologies PLC
Condensed consolidated s tatement of financial position at 30
September 2023
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
Note 2023 2022 2023
EUR'000 EUR'000 EUR'000
Non-current assets
Intangible assets 7 10,369 6,852 10,491
Investment accounted for
using the equity method 13 29,648 31,942 30,859
Property, plant and equipment 8 96,612 140,422 106,051
Right of use assets 4,210 4,087 4,044
Financial asset at fair
value through profit or
loss - - -
140,839 183,303 151,445
---------- ---------- ----------
Current assets
Inventories 31,812 32,354 29,946
Trade and other receivables 13,643 11,333 18,075
Cash and cash equivalents 20,780 18,123 26,593
Corporation tax receivable 460 503 459
66,695 62,313 75,073
---------- ---------- ----------
Current liabilities
Trade and other payables (21,411) (26,620) (25,896)
Obligation under lease liabilities (943) (790) (980)
Short term borrowings 11 (9,500) (19,686) (9,500)
Corporation tax payable (6,500) (3,615) (6,082)
Derivative financial instrument - (77) -
(38,354) (50,788) (42,458)
---------- ---------- ----------
Net current assets 28,341 11,525 32,615
Non-current liabilities
Obligation under lease liabilities (3,845) (3,806) (3,755)
Other long term borrowing 11 (54,680) (55,210) (56,420)
Financial guarantee - - -
Financial liability at amortised
cost (1,293) - (1,383)
(59,818) (59,016) (61,558)
---------- ---------- ----------
Total net assets 109,362 135,812 122,502
Equity
Share capital 9 11,002 10,343 10,963
Share premium account 250,717 241,662 250,717
Other reserves 10 114,743 114,791 114,743
Accumulated loss (267,243) (236,584) (254,042)
Own shares (8) (6) (8)
Foreign currency translation
reserve 151 257 129
Capital value attributable
to owners of Accsys Technologies
PLC 109,362 130,463 122,502
Non-controlling interest
in subsidiaries - 5,349 -
Total equity 109,362 135,812 122,502
The notes form an integral part of these condensed financial
statements.
Accsys Technologies PLC
Condensed consolidated s tatement of changes in equity for the
six months ended 30 September 2023
Total equity
Foreign attributable
currency to equity
Ordinary trans- shareholders
share Share Other Own lation Accumulated of the Non-Controlling Total
capital premium reserves Shares reserve loss company interests Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at
31 March 2022 9,638 223,326 114,701 (6) 190 (210,505) 137,344 35,526 172,870
========= ======== ========= ======== ========= ============ ============== ================= =========
(Loss) for the year - - - - - (26,526) (26,526) (30,177) (56,703)
Other comprehensive
income for the year - - 90 - 67 - 157 - 157
Share based payments - - - - - 462 462 - 462
Shares issued 705 - - - - (15) 690 - 690
Premium on shares
issued - 19,422 - - - - 19,422 - 19,422
Share issue costs - (1,086) - - - - (1,086) - (1,086)
Balance at
30 Sept 2022
(unaudited) 10,343 241,662 114,791 (6) 257 (236,584) 130,463 5,349 135,812
========= ======== ========= ======== ========= ============ ============== ================= =========
(Loss) for the year - - - - - (12,512) (12,512) (647) (13,159)
Other comprehensive
income for the year - - (48) - (128) - (176) - (176)
Share based payments - - - - - (96) (96) - (96)
Shares issued 26 - - (2) - (7) 17 - 17
Premium on shares
issued - 104 - - - - 104 - 104
Share issue costs - - - - - - - - -
Acquisition of
subsidiary shares
from non-controlling
interests 594 8,951 - (4,843) 4,702 (4,702) (0)
Balance at
31 March 2023 10,963 250,717 114,743 (8) 129 (254,042) 122,502 - 122,502
========= ======== ========= ======== ========= ============ ============== ================= =========
Profit/(Loss) for the
year - - - - - (13,492) (13,492) - (13,492)
Other comprehensive
income for the year - - - - 22 - 22 - 22
Share based payments - - - - - 330 330 - 330
Shares issued 39 - - - - (39) - - -
Share issue costs - - - - - - - - -
Balance at
30 Sept 2023
(unaudited) 11,002 250,717 114,743 (8) 151 (267,243) 109,362 - 109,362
========= ======== ========= ======== ========= ============ ============== ================= =========
Ordinary share capital is the amount subscribed for shares at
nominal value (note 9).
Share premium represents the excess of the amount subscribed for
ordinary share capital over the nominal value of these shares, net
of share issue expenses.
See note 10 for details concerning other reserves.
Non-controlling interests relate to the previous investment of
various parties into Tricoya Technologies Limited and Tricoya UK
Limited. The Group purchased the remaining shareholding in the
Tricoya entities in the year ended 31 March 2023.
Foreign currency translation reserve arises on the
re-translation of the Group's USA subsidiary's net assets which are
denominated in a different functional currency, being US
dollars.
Accumulated losses represent the cumulative loss of the Group
attributable to the owners of the parent.
The notes form an integral part of these condensed financial
statements.
Accsys Technologies PLC
Condensed consolidated statement of cash flow for the six months
ended 30 September 2023
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
EUR'000 EUR'000 EUR'000
(Loss) before taxation (13,072) (56,346) (67,075)
Adjustments for:
Amortisation of intangible assets 391 389 780
Depreciation of property, plant and equipment and right of use assets 4,378 3,095 7,512
Impairment loss 7,000 58,000 86,000
Net (gain) on disposal of property, plant and equipment - (3) -
Net finance expense/(income) 1,521 (1,169) (6,126)
Equity-settled share-based payment expenses 330 462 366
Accsys portion of licence fee received from joint venture - - 300
Share of net loss of joint venture 1,211 403 1,036
Currency translation gain/(loss) 66 (156) (70)
Cash inflows from operating activities before changes in working capital 1,825 4,675 22,723
========== ========== =========
Decrease/(increase) in trade and other receivables 4,451 5,550 (1,154)
(Increase) in inventories (1,868) (11,982) (9,596)
(Decrease)/Increase in trade and other payables (3,778) (515) 4,673
Net cash from operating activities before tax 630 (2,272) 16,646
Tax received 0 6 87
Net cash from operating activities 630 (2,266) 16,733
========== ========== =========
Cash flows from investing activities
Investment in property, plant and equipment (2,023) (22,595) (29,773)
Foreign exchange deal settlement related to hedging of Hull capex - - (81)
Investment in intangible assets (268) (207) (437)
Investment in joint venture - (29,132) (28,979)
Net cash used in investing activities (2,291) (51,934) (59,270)
========== ========== =========
Cash flows from financing activities
Proceeds from loans - 10,000 10,000
Other finance costs (36) (173) (250)
Interest paid (1,311) (992) (2,429)
Repayment of lease liabilities (706) (538) (940)
Repayment of loans (2,250) - -
Proceeds from issue of share capital - 20,112 20,258
Share issue costs - (1,086) (1,086)
Net cash from financing activities (4,303) 27,323 25,553
========== ========== =========
Net (decrease) in cash and cash equivalents (5,964) (26,877) (16,984)
Effect of exchange gain on cash and cash equivalents 151 2,946 1,523
Opening cash and cash equivalents 26,593 42,054 42,054
Closing cash and cash equivalents 20,780 18,123 26,593
========== ========== =========
The notes form an integral part of these condensed financial
statements.
Accsys Technologies PLC
Notes to the financial statements for the six months ended 30
September 2023
1. Accounting policies
General Information
The principal activity of the Group is the production and sale
of Accoya solid wood and exploitation of technology for the
production and sale of Accoya wood and Tricoya wood chips.
Manufactured through the Group's proprietary acetylation processes,
these products exhibit superior dimensional stability and
durability compared with alternative natural, treated and modified
woods as well as more resource intensive man-made materials.
The Company is a public limited company, which is listed on AIM
in the United Kingdom and Euronext in the Netherlands, and is
domiciled in the United Kingdom. The registered office is 4(th)
Floor, 3 Moorgate Place, London EC2R 6EA.
The condensed consolidated financial statements were approved on
21 November 2023. These condensed consolidated financial statements
have not been audited.
Basis of accounting
The Group's condensed consolidated financial statements in these
interim results have been prepared in accordance with IFRS issued
by the International Accounting Standards Board as endorsed by the
European Union and as adopted for use in the United Kingdom, in
particular International Accounting Standard (IAS) 34 "interim
financial reporting" and the AIM Rules for Companies and the Dutch
Financial Markets Supervision Act.
The financial information for the six months ended 30 September
2023 and the six months ended 30 September 2022 is unaudited. The
comparative financial information for the full year ended 31 March
2023 does not constitute the Group's statutory financial statements
for that period although it has been derived from the statutory
financial statements for the year then ended. A copy of those
statutory financial statements has been delivered to the Registrar
of Companies and which were approved by the Board of Directors on
26 June 2023. The auditors' report on those accounts was
unqualified and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006. This financial information is to be read
in conjunction with the annual report for the year ended 31 March
2023, which has been prepared in accordance with both International
Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union.
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
for the year ended 31 March 2023.
Accounting policies
No new accounting standards, amendments or interpretations have
been adopted in the period which have any impact on these condensed
financial statements, or are expected to affect the Group's annual
report for the year ended 31 March 2024. The accounting policies
applied for preparation of condensed consolidated financial
statements are consistent with those of the annual financial
statements for the year ended 31 March 2023, as described in those
financial statements.
Going concern
The condensed consolidated financial statements are prepared on
a going concern basis, which assumes that the Group will continue
in operational existence for the foreseeable future, and at least
for the 12 months from the date these financial statements are
approved (the 'going concern period'). As part of the Group's going
concern review, the Directors have assessed the Group's trading
forecasts, working capital and liquidity requirements, and bank
facility covenant compliance for the going concern period under a
base case scenario and a severe but plausible downside
scenario.
The cash flow forecasts used for the going concern assessment
represent the Directors' best estimate of trading performance and
cost implications in the market based on current agreements, market
experience and consumer demand expectations. The economic
environment has remained challenging throughout the financial year
(explained further in the management discussion of the results) and
it is not known how long this will continue to directly impact the
business and customer behaviour. For the purposes of the Group's
going concern assessment, the Directors have therefore made
assumptions on the likely future cash flows. These forecasts
indicate that, in order to continue as a going concern, the Group
is dependent on achieving a certain level of performance relating
to the production and sale of Accoya, and the management of its
working capital.
1. Accounting policies (continued)
Going concern (continued)
In both scenarios, the Directors have assumed no commitment will
be made to complete the construction and start-up of the Tricoya UK
plant in Hull unless the Board definitively determines to proceed
with the project and appropriate levels of funding arrangements are
obtained to do so. In the downside scenario, it is assumed that the
Group discontinues its financial support in relation to the Tricoya
UK plant.
The Directors' have also considered the possible quantum and
timing of funding required to complete the plant currently under
construction by Accoya USA LLC, and for the initial operational
working capital requirements of the entity. Notwithstanding that
the construction project benefits from certain contractual measures
in place with the lead engineering, construction and procurement
contractor, Accsys has a contractual obligation to fund its 60%
share of Accoya USA LLC on a pro rata basis with its joint venture
partner (Eastman Chemicals Company).
The Group is also dependent on the Group's financial resources
including its existing cash position, banking and finance
facilities, and the proceeds from the fundraise, and the amended
bank facilities announced today (see note 14 for details) which are
assumed in both scenarios.
Capital Raise
The gross proceeds from the fundraise of approximately EUR34m
(which includes approximately EUR24m of gross new proceeds for the
Company) include:
1) An equity Placing of between approximately EUR13m and EUR15m
which will be settled on 23 November 2023. Certain of the Company's
major shareholders have committed to provide approximately EUR13m
of new equity through the equity Placing.
2) The issue of between approximately EUR9m and EUR11m new 6
year term convertible loan notes and the repricing and reissue of
the existing EUR10m De Engh convertible loan note (see note 11)
have also been arranged on 21 November 2023, subject to the
completion of the equity cash Placing.
On 21 November 2023, ABN AMRO and the Company agreed to amend
the ABN AMRO debt facilities referenced in note 11 and extend these
by a further 18 months to March 2026. The facilities have also been
amended to provide for the release of EUR10m of cash collateral
held by ABN AMRO, EUR7.5m of which will be used to repay a portion
of the term loan with the balance providing the Group with
additional liquidity. The amendment of the facilities also allows
for an 18-month amortisation holiday. The extension is subject to
the completion of the equity Placing (see note 14 for further
details).
The Directors have also considered a severe but plausible
downside scenario against the base case with reduced Accoya sales
volumes. The Directors do not expect the assumptions in the severe
but plausible downside scenario to materialise, but should they
unfold, the Group has several mitigating actions it can implement
to manage its going concern risk, such as deferring discretionary
capital expenditure and implementing further cost reductions to
maintain a sufficient level of liquidity and covenant headroom
during the going concern period. The combined impact of the above
downside scenarios and mitigations does not trigger a minimum
liquidity breach or covenant breach at any point in the going
concern period.
The Directors are confident that the equity Placing will be
completed on 21 November 2023. However, in the unlikely situation
that the capital raise was not to be completed, the Group would
need to obtain alternate financing in an expedited fashion, in
order to be able to discharge its liabilities. It is not certain
that the Group would be able to obtain any such financing on
commercially acceptable terms. This would give rise to a material
uncertainty which may cast significant doubt on the Group's ability
to continue as a going concern.
After carefully considering all the factors explained in this
statement, the Directors believe that it is most appropriate to
prepare these financial statements on the going concern basis.
These financials statements therefore do not include the
adjustments that would result if the Group was unable to continue
as a going concern.
2. Segmental reporting
Accoya
Accoya Segment
-------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2023 2023 2023
2023 2023 2023 2022 2022 2022
Underlying Exceptional TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items
items items & other
& other & other adjustments
adjustments adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Accoya wood
revenue 63,313 - 63,313 51,088 - 51,088 143,494 - 143,494
Licence
revenue - - - - - - 300 - 300
Other revenue 4,885 - 4,885 7,584 7,584 16,773 - 16,773
Total revenue 68,198 - 68,198 58,672 - 58,672 160,567 - 160,567
Cost of sales (48,132) - (48,132) (40,580) - (40,580) (105,608) - (105,608)
Gross profit 20,066 - 20,066 18,092 - 18,092 54,959 - 54,959
Other
operating
costs (13,527) - (13,527) (10,035) - (10,035) (22,621) - (22,621)
Profit from
operations 6,539 - 6,539 8,057 - 8,057 32,338 - 32,338
Profit from
operations 6,539 - 6,539 8,057 - 8,057 32,338 - 32,338
Share of
Accoya
USA EBIT (1,150) - - (403) - - (912) - -
EBIT 5,389 - 6,539 7,654 - 8,057 31,426 - 32,338
Depreciation
and
amortisation 4,137 - 4,137 2,786 - 2,786 6,832 - 6,832
Accoya USA
Depreciation
and
amortisation 104 - - - - - 211 - -
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
EBITDA 9,630 - 10,676 10,440 - 10,843 38,469 - 39,170
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
See note 4 for explanation of Exceptional Items and other
adjustments.
Average headcount = 196 (H1 FY23: 184)
Year
6 months 6 months ended
ended ended 31
30 September 30 September March
2023 2022 2023
EUR'000 EUR'000 EUR'000
Accoya segmental underlying EBITDA 9,630 10,440 38,469
-------------- -------------- --------
Accoya underlying licence Income - - (300)
Accoya segmental manufacturing EBITDA (excluding licence income) 9,630 10,440 38,169
============== ============== ========
Accoya segmental gross profit 20,066 18,092 54,959
-------------- -------------- --------
Accoya licence Income - - (300)
Accoya manufacturing gross profit 20,066 18,092 54,659
============== ============== ========
Gross Accoya manufacturing margin 29.4% 30.8% 34.1%
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
EUR EUR EUR
Accoya(R) Manufacturing gross profit
- EUR'000 20,066 18,092 54,659
Accoya(R) sales volume - m(3) 28,807 23,957 63,344
Accoya(R) manufacturing gross profit
per m(3) 697 755 863
============== ============== ===============
2. Segmental reporting (continued)
Tricoya
Tricoya Segment
---------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12
ended ended ended ended ended ended ended ended months
30 30 30 30 30 30 31 March 31 March ended
September September September September September September 2023 2023 31 March
2023 2023 2023 2022 2022 2022 2023
Underlying Exceptional
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items TOTAL
items items & other
& other & other adjustments
adjustments adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Tricoya
panel
revenue 2,918 - 2,918 201 - 201 1,373 - 1,373
Licence
revenue 46 - 46 11 - 11 29 - 29
Other revenue 45 - 45 - - - 49 - 49
Total
revenue 3,009 - 3,009 212 - 212 1,451 - 1,451
Cost of
sales (2,733) - (2,733) (162) - (162) (1,244) - (1,244)
Gross
profit 276 - 276 50 - 50 207 - 207
Other
operating
costs (3,796) (7,000) (10,796) (1,733) (57,997) (59,730) (5,823) (86,000) (91,823)
Loss from
operations (3,520) (7,000) (10,520) (1,683) (57,997) (59,680) (5,616) (86,000) (91,616)
Loss from
operations (3,520) (7,000) (10,520) (1,683) (57,997) (59,680) (5,616) (86,000) (91,616)
Depreciation
and
amortisation 267 - 267 258 - 258 527 - 527
Impairment - 7,000 7,000 - 58,000 58,000 - 86,000 86,000
EBITDA (3,253) - (3,253) (1,425) 3 (1,422) (5,089) - (5,089)
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------
Revenue includes direct Tricoya panel sales made by the Company,
which are purchased from our Tricoya Customers. The sale of Accoya
to customers who produce the Tricoya panels are included within the
Accoya segment.
Other operating costs include pre-operating costs for the
Tricoya UK plant.
See note 4 for explanation of Exceptional Items and other
adjustments.
Average headcount = 10 (H1 FY23: 31)
Corporate
Corporate Segment
----------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12
ended ended ended ended ended ended ended ended months
30 30 30 30 30 30 31 March 31 March ended
September September September September September September 2023 2023 31 March
2023 2023 2023 2022 2022 2022 2023
Underlying Exceptional
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items TOTAL
items items & other
& other & other adjustments
adjustments adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total revenue - - - - - - - - -
Cost of
sales - - - - - - - - -
Gross result - - - - - - - - -
Other
operating
costs (4,269) (1,200) (5,469) (4,277) (484) (4,761) (9,976) (1,453) (11,429)
Loss from
operations (4,269) (1,200) (5,469) (4,277) (484) (4,761) (9,976) (1,453) (11,429)
(Loss) from
operations (4,269) (1,200) (5,469) (4,277) (484) (4,761) (9,976) (1,453) (11,429)
Depreciation
and
amortisation 332 - 332 406 - 406 866 - 866
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
EBITDA (3,937) (1,200) (5,137) (3,871) (484) (4,355) (9,110) (1,453) (10,563)
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
See note 4 for explanation of Exceptional items and other
adjustments.
Average headcount = 16 (H1 FY23: 16).
2. Segmental reporting (continued)
Research and Development
Research & Development Segment
----------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12
ended 30 ended 30 ended 30 ended 30 ended 30 ended 30 ended 31 ended 31 months
September September September September September September March March ended
2023 2023 2023 2022 2022 2022 2023 2023 31 March
2023
Underlying Exceptional TOTAL Underlying Exceptional TOTAL Underlying Exceptional
items & items & items & TOTAL
other other other
adjustments adjustments adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross result - - - - - - - - -
Other
operating
costs (890) - (890) (728) - (728) (1,458) - (1,458)
Loss from
operations (890) - (890) (728) - (728) (1,458) - (1,458)
Loss from
operations (890) - (890) (728) - (728) (1,458) - (1,458)
Depreciation
and
amortisation 33 - 33 34 - 34 67 - 67
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
EBITDA (857) - (857) (694) - (694) (1,391) - (1,391)
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
Costs exclude those which have been capitalised in accordance
with IAS 38. (see note 7).
See note 4 for explanation of Exceptional items and other
adjustments.
Average headcount = 13 ( H1 FY23 : 14).
2. Segmental reporting (continued)
Total
TOTAL
----------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended 30 ended 30 ended 30 ended 30 ended 30 ended 30 ended 31 ended 31 ended 31
September September September September September September March March March
2023 2023 2023 2022 2022 2022 2023 2023 2023
Underlying Exceptional TOTAL Underlying Exceptional TOTAL Underlying Exceptional TOTAL
items & items & items &
other other other
adjustments adjustments adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Accoya wood
revenue 63,313 - 63,313 51,088 - 51,088 143,493 - 143,493
Tricoya panel
revenue 2,918 - 2,918 201 - 201 1,374 - 1,374
Licence
revenue 46 - 46 11 - 11 329 - 329
Other revenue 4,930 - 4,930 7,584 - 7,584 16,822 - 16,822
Total revenue 71,207 - 71,207 58,884 - 58,884 162,018 - 162,018
Cost of sales (50,865) - (50,865) (40,742) - (40,742) (106,852) - (106,852)
Gross profit 20,342 - 20,342 18,142 - 18,142 55,166 - 55,166
Other
operating
costs (22,482) (8,200) (30,682) (16,773) (58,481) (75,254) (39,878) (87,453) (127,331)
(Loss)/Profit
from
operations (2,140) (8,200) (10,340) 1,369 (58,481) (57,112) 15,288 (87,453) (72,165)
Finance
expense (1,610) 89 (1,521) (1,530) 2,699 1,169 (3,224) 9,350 6,126
Investment in
joint venture (1,211) - (1,211) (403) - (403) (1,036) - (1,036)
(Loss)/Profit
before
taxation (4,961) (8,111) (13,072) (564) (55,782) (56,346) 11,028 (78,103) (67,075)
=========== ============ ========== =========== ============ ========== =========== ============ ==========
See note 4 for explanation of Exceptional Items and other
adjustments.
Reconciliation of underlying earnings
Reconciliation of underlying earnings
---------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended 30 ended 30 ended 30 ended 30 ended 30 ended 30 ended 31 ended 31 ended 31 March
September September September September September September March March 2023
2023 2023 2023 2022 2022 2022 2023 2023
TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL Underlying Exceptional
items & items & items &
other other other
adjustments adjustments adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
(Loss)/Profit
from
operations (2,140) (8,200) (10,340) 1,369 (58,481) (57,112) 15,288 (87,453) (72,165)
Share of
Accoya USA
EBIT (1,150) - - (403) - - (912) - -
EBIT (3,290) (8,200) (10,340) 966 (58,481) (57,112) 14,376 (87,453) (72,165)
Depreciation
and
amortisation 4,769 - 4,769 3,484 - 3,484 8,292 - 8,292
Accoya USA
depreciation
and
amortisation 104 - - - - - 211 - -
Impairment - 7,000 7,000 - 58,000 58,000 - 86,000 86,000
EBITDA 1,583 (1,200) 1,429 4,450 (481) 4,372 22,879 (1,453) 22,127
2. Segmental reporting (continued)
Segmental reporting continued
Assets and liabilities on a segmental basis:
Accoya Tricoya Corporate R&D TOTAL
Sept Sept Sept Sept
2023 2023 Sept 2023 2023 2023
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current assets 115,770 19,969 4,971 129 140,839
--------- --------- ---------- -------- ---------
Current assets 37,680 3,581 19,823 5,611 66,695
--------- --------- ---------- -------- ---------
Current liabilities (12,063) (12,925) (13,314) (52) (38,354)
--------- --------- ---------- -------- ---------
Net current assets/(liabilities) 25,617 (9,344) 6,509 5,559 28,341
Non-current liabilities (2,240) (7,514) (50,025) (39) (59,818)
--------- --------- ---------- -------- ---------
Net assets 139,147 3,111 (38,545) 5,649 109,362
========= ========= ========== ======== =========
Accoya Tricoya Corporate R&D TOTAL
Sept Sept Sept Sept
2022 2022 Sept 2022 2022 2022
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current assets 122,915 55,803 4,390 195 183,303
--------- --------- ---------- -------- ---------
Current assets 35,276 3,827 23,141 69 62,313
--------- --------- ---------- -------- ---------
Current liabilities (10,998) (32,006) (7,718) (66) (50,788)
--------- --------- ---------- -------- ---------
Net current assets/(liabilities) 24,278 (28,179) 15,423 3 11,525
Non-current liabilities (2,547) (1,174) (55,210) (85) (59,016)
--------- --------- ---------- -------- ---------
Net assets 144,646 26,450 (35,397) 113 135,812
========= ========= ========== ======== =========
Accoya Tricoya Corporate R&D TOTAL
March March March March March
2023 2023 2023 2023 2023
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current assets 120,459 27,047 3,777 162 151,445
--------- --------- ---------- -------- ---------
Current assets 52,699 3,872 13,630 4,872 75,073
--------- --------- ---------- -------- ---------
Current liabilities (22,947) (4,156) (15,299) (56) (42,458)
--------- --------- ---------- -------- ---------
Net current assets/(liabilities) 29,752 (284) (1,669) 4,816 32,615
Non-current liabilities (2,545) (8,665) (50,289) (59) (61,558)
--------- --------- ---------- -------- ---------
Net assets 147,666 18,098 (48,181) 4,919 122,502
========= ========= ========== ======== =========
The segmental assets in the current year were predominantly held
in the UK, USA and mainland Europe (Prior Year UK and mainland
Europe). Additions to property, plant, equipment and intangible
assets in the current year were predominantly incurred in the UK
and mainland Europe (Prior Year UK and mainland Europe). The
increase in Investment accounted for using the equity method
(investment into Accoya USA LLC) incurred in USA. There are no
significant intersegment revenues.
2. Segmental reporting (continued)
Segmental reporting continued
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
EUR'000 EUR'000 EUR'000
UK & Ireland 23,292 21,182 55,395
Rest of Europe 28,638 22,400 63,635
Americas 13,296 11,084 29,778
Rest of World 5,981 4,218 13,210
71,207 58,884 162,018
========== ========== =========
Sales to UK and Ireland include the sales to MEDITE.
3. Other operating costs
Other operating costs consist of the operating costs, other than
the cost of sales, associated with the operation of the plant in
Arnhem, the site in Barry, the offices in Dallas and London and
certain pre-operating costs associated with the plant in Hull:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
EUR'000 EUR'000 EUR'000
Sales and marketing 3,136 2,200 5,219
Research and development 857 694 990
Other operating costs 6,858 4,491 9,720
Administration costs 6,862 5,904 15,657
Exceptional Items and other adjustments
(refer to note 4) 1,200 481 1,453
Other operating costs excluding
depreciation and amortisation 18,913 13,770 33,039
========== ========== =========
Depreciation and amortisation 4,769 3,484 8,292
Impairment
loss 7,000 58,000 86,000
Total other operating costs 30,682 75,254 127,331
========== ========== =========
Administrative costs include costs associated with Human
Resources, IT, Legal, Business Development, Finance, Management and
General Office and include the costs of the Group's London and
Dallas offices.
Group average employee headcount decreased to 235 in the period
to 30 September 2023, from 245 in the period to 30 September
2022.
4. Exceptional Items and Other Adjustments
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
EUR'000 EUR'000 EUR'000
Advisor fees in relation to Tricoya consortium reorganisation - (484) (1,453)
Impairment of the Tricoya segment assets (7,000) (58,000) (86,000)
Partial net derecogition of NatWest loan - - 9,353
Revaluation of Valuation Recovery Instrument "VRI" liability 89 - (1,383)
Foreign exchange differences on USD cash held for investment into USA JV-
incl. in Finance
expense - 1,380 1,380
Restructuring costs (1,200) - -
Total exceptional items (8,111) (57,104) (78,103)
---------- ---------- ---------
Foreign exchange differences arising on Tricoya cash held - Operating costs
(loss)/profit - 3 -
Foreign exchange differences on cash held - Other comprehensive
profit/(loss) - 167 -
Revaluation of USD cash pledged to ABN Amro - incl. in Finance expense - 1,319 -
Revaluation of FX forwards used for cash-flow hedging - Other comprehensive
(loss)/profit - (77) -
Total other adjustments - 1,412 -
---------- ---------- ---------
Tax on exceptional items and other adjustments - - -
Total exceptional items and other adjustments (8,111) (55,692) (78,103)
========== ========== =========
Exceptional Items
In the period:
- an exceptional operating cost of EUR1.2m has been recognised
for restructuring costs relating to decreasing the Group's
administrative operating cost base.
- An impairment loss (non-cash item) of EUR7.0m has been
recognised in the period relating to the Tricoya segment (FY23:
EUR86.0m) due to an increase in the discount rate to 14.5% used
following an increase in market interest rates and the Company
specific market volatility factor. In the prior year, an impairment
of the Tricoya segment assets was recognised, due to identification
of additional time and costs (EUR35m) to complete the plant; a
decrease in the estimated maximum production capacity of the plant
once commercially operational from 30,000MT to 24,000MT; and the
discount rate applied was updated to 13.5%.
In the prior year:
- an exceptional operating cost was recognised for advisor fees
associated with advising Accsys on acquiring the full ownership of
TUK (Tricoya UK Limited) and TTL (Tricoya Technologies Limited),
from its previous Tricoya Consortium Partners.
- NatWest also agreed to restructure its TUK debt facility,
reducing the principal amount by EUR9.4m to EUR6m, under a new
7-year term. This resulted in the derecognition of the balance
drawn on the NatWest loan on the date of the restructure of
EUR15.4m and recognition of the new EUR6m loan.
- Separate to, and in addition to the amended EUR6m loan,
NatWest is entitled to obtain recovery, via the Value Recovery
Instrument ("VRI") agreement, of up to approximately EUR9.4m, on a
contingent basis, depending on profitability of the Tricoya UK
plant once operational. A financial liability was recognised of
EUR1.4m in the prior year in respect of the VRI.
- Foreign exchange differences were recognised due to US dollars
held for investment into Accoya USA LLC. Following the May 2021
equity raise, the amount raised to invest into Accoya USA was
translated into US dollars and held in cash ensuring that foreign
exchange movements did not decrease the amount raised below the US
dollar investment into Accoya USA. This treatment did not meet the
requirements for hedge accounting under IFRS 9, Financials
instruments, and therefore the foreign exchange gain on the
revaluation of the US dollars has been accounted for in Finance
expenses.
Other Adjustments
Other adjustments included in the prior year are no longer
disclosed for the period ended 30 September 2023.
5. Tax expense
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
EUR'000 EUR'000 EUR'000
(a) Tax recognised in the condensed
consolidated statement of comprehensive
income comprises:
Current tax expense/(credit)
UK Corporation tax on losses for the
period - - -
Research and development tax credit in
respect of current period - (68) (121)
- (68) (121)
Overseas tax at rate of 15% 19 6 32
Overseas tax at rate of 25% 401 419 2,876
Deferred Tax
Utilisation of deferred tax asset - - -
Total tax expense reported in the condensed
consolidated statement of comprehensive
income 420 357 2,787
========== ========== =========
6. Basic and diluted profit/ (loss) per ordinary share
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March
2023 2023 2022 2022 2023 2023
Basic earnings per share Underlying Total Underlying Total Underlying Total
Weighted average number of
ordinary shares in issue ('000) 218,395 218,395 204,358 204,358 210,693 210,693
Profit/(Loss) for the period attributable
to owners of Accsys Technologies PLC
(EUR'000) (5,381) (13,492) (281) (26,526) 9,528 (39,038)
Basic profit/(loss) per share EUR(0.02) EUR(0.06) EUR(0.00) EUR(0.13) EUR0.05 EUR(0.19)
=========== ========== =========== ========== =========== ==========
Diluted earnings per share
Weighted average number of ordinary shares
in issue ('000) - - - - 210,693 -
Equity options attributable to BGF -* -* -* -* 8,449 -*
Weighted average number of ordinary shares
in issue and potential ordinary shares
('000) - - - - 219,142 -
----------- ---------- ----------- ---------- ----------- ----------
Profit/(Loss) for the year attributable to
owners of Accsys Technologies PLC
(EUR'000) - - - - 9,528 -
Diluted profit/(loss) per share -* -* -* -* EUR0.04 -*
=========== ========== =========== ========== =========== ==========
* IAS 33 "Earning per share" defines Dilutive share options as
share options which would decrease profit per share or increase
loss per share. 8,449,000 equity options held by BGF if exercised
would decrease the Loss per share. As a result, these are
anti-dilutive and therefore shown as nil.
7. Intangible assets
Internal Intellectual
development property
costs rights Goodwill Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost
At 31 March 2022 7,642 74,992 4,231 86,865
============
Additions 27 180 - 207
At 30 September 2022 7,669 75,172 4,231 87,072
Additions 30 200 - 230
At 31 March 2023 7,699 75,372 4,231 87,302
============
Additions 35 234 - 269
At 30 September 2023 7,734 75,606 4,231 87,571
Accumulated amortisation
At 31 March 2022 2,894 73,137 - 76,031
Amortisation 197 192 - 389
Impairment loss 2,855 945 - 3,800
At 30 September 2022 5,946 74,274 - 80,220
Amortisation 188 203 - 391
Impairment loss (2,855) (945) - (3,800)
At 31 March 2023 3,279 73,532 - 76,811
Amortisation 198 193 - 391
At 30 September 2023 3,477 73,725 - 77,202
Net book value
At 31 March 2022 4,748 1,855 4,231 10,834
At 30 September 2022 1,723 898 4,231 6,852
At 31 March 2023 4,420 1,840 4,231 10,491
At 30 September 2023 4,257 1,881 4,231 10,369
Refer to note 8 for the recoverability assessment of these
intangible assets.
8. Property, plant and equipment
Land Plant Office
and buildings and machinery equipment Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost or valuation
Opening balance at 31
March 2022 17,976 187,445 4,353 209,774
Additions - 20,476 15 20,491
Foreign currency translation - - 19 19
At 30 September 2022 17,976 207,921 4,387 230,284
Additions - 900 326 1,226
Foreign currency translation - - (16) (16)
Opening balance at 31
March 2023 17,976 208,821 4,697 231,494
Additions - 1,142 206 1,348
Foreign currency translation - - 4 4
At 30 September 2023 17,976 209,963 4,907 232,846
Depreciation
Opening balance at 31
March 2022 1,353 29,495 2,265 33,113
Charge for the period 179 2,104 247 2,530
Foreign currency translation - - 19 19
Impairment loss - 54,200 - 54,200
At 30 September 2022 1,532 85,799 2,531 89,862
Charge for the period 179 3,293 302 3,774
Foreign currency translation - - 7 7
Impairment loss - 31,800 - 31,800
Opening balance at 31
March 2023 1,711 120,892 2,840 125,443
Charge for the period 179 3,342 266 3,787
Foreign currency translation - - 4 4
Impairment loss - 7,000 - 7,000
At 30 September 2023 1,890 131,234 3,110 136,234
Net book value
At 31 March 2022 16,623 157,950 2,088 176,661
At 30 September 2022 16,444 122,122 1,856 140,422
At 31 March 2023 16,265 87,929 1,857 106,051
At 30 September 2023 16,086 78,729 1,797 96,612
Plant and machinery assets with a net book value of
EUR17,851,000 relating to the Tricoya UK plant are held as assets
under construction and are not depreciated (31 March 2023:
EUR24,851,000).
8. Property, plant and equipment (continued)
Impairment review
The carrying value of the property, plant and equipment,
internal development costs and intellectual property rights are
split between two cash generating units (CGUs), representing the
Accoya and Tricoya segments and the carrying value of Goodwill is
allocated to the Accoya segment. The recoverable amount of these
CGUs are determined based on a value-in-use calculation which uses
cash flow projections for a period of 5 to 7 years based on latest
financial budgets and discounted at a pre-tax discount rate of
14.5% (31 March 2023: 13.5%) to determine their present value. A
cash flow projection period of 7 years was used for the Tricoya
segment calculation to reflect the future cashflows of the plant,
considering the estimated hold period, remaining completion
activities and production ramp-up.
The key assumptions used in the value in use calculations
are:
- the manufacturing revenues, operating margins and future
licence fees estimated by management;
- the timing of completion of the Tricoya Hull plant;
- the timing of completion of construction of additional
facilities (and associated output);
- forecast UK natural gas prices;
- the long term growth rate; and
- the discount rate.
The Directors have determined that an impairment totalling
EUR93m should be recognised in the Tricoya CGU, of which EUR7m was
recognised in the period ending 30 September 2023.
The increase in the impairment of the Tricoya segment assets is
caused by an increase in market indicators & interest rates
used to calculate the discount rate utilised in the value in use
calculation. The discount rate increased by 1% to 14.5% (13.5% at
31 March 2023).
Key assumptions applied to the Tricoya CGU were as follows:
-- a discount rate of 14.5%;
-- project capital costs to bring the plant into commercial
operation of EUR35m;
-- a production capacity of 24,000MT
-- a "hold period" of 2 years from 30 September 2023 (period in
which limited construction activities is performed); and
-- a long-term growth rate of 2.5%.
The impact the following changes to these key assumptions would
have, if made in isolation, on the impairment calculated for
the Tricoya CGU is as follows:
-- a 1% increase in the discount rate: increase of EUR6m;
-- a 1% decrease in the long-term growth rate: increase of
EUR3m;
-- a 12-month extension in the hold period: increase of
EUR9m;
-- a 6,000MT increase in the production capacity: decrease of
EUR18m; and
-- a EUR10m increase in the capital costs to bring the plant
into commercial operation: increase of EUR7m.
9. Share capital
In the period ended 30 September 2022:
In May 2022, 13,798,103 ordinary shares were issued as part of
the capital raise to strengthen the Company's balance sheet,
increase liquidity headroom and fund additional costs to complete
the Arnhem Plant Reactor 4 capacity expansion. The ordinary shares
were issued at a price of EUR1.45 (GBP1.23) per ordinary share,
raising gross proceeds of EUR20m (before expenses).
In July 2022, 137,665 shares were issued to an Employee Benefit
Trust at nominal value, as part of the annual bonus, in connection
with the employee remuneration and incentivisation arrangements for
the period from 1 April 2021 to 31 March 2022. These shares vested
in July 2023, subject to the employees continuing employment within
the Group.
In the period ended 31 March 2023:
Between August and December 2022, 435,774 Shares were issued
following the exercise of nil cost options, granted under the
Company's 2013 Long Term Incentive Plan ('LTIP').
In November 2022, 11,875,801 ordinary shares were issued to the
tricoya consortium partners (INEOS, MEDITE , BGF & Volantis) at
a price of EUR0.80 (GBP0.71) per share. This formed part of a sale
and purchase agreement with the Tricoya Consortium Partners whereby
Accsys acquired the remaining 38.2% holding in Tricoya UK Ltd that
Tricoya Technologies Ltd did not already own and the 23.5% holding
in Tricoya Technologies Ltd that it did not already own.
In January 2023, following the subscription by employees in the
prior year for shares under the Employee Share Participation Plan
(the 'Plan'), 174,144 ordinary shares were issued as "Matching
Shares" at nominal value under the Plan.
9. Share capital (continued)
In addition, various employees newly subscribed under the Plan
for 203,906 ordinary shares at an acquisition price of EUR0.81 per
share, with these shares issued to a trust, to be released to the
employees after one year, together with an additional share on a
matched basis (subject to continuing employment within the
Group).
In the period ended 30 September 2023:
Between July and August 2023, 775,191 shares were issued
following the exercise of nil cost options, granted under the
Company's 2013 LTIP.
In July 2023, 222,232 ordinary shares were issued to an Employee
Benefit Trust at nominal value, as part of the annual bonus, in
connection with the employee remuneration and incentivisation
arrangements for the period from 1 April 2022 to 31 March 2023.
These ordinary shares will vest in July 2024, subject to the
employees continuing employment within the Group.
10. Other Reserves
Hedge
Capital redemp- Effective-ness Total Other
tion reserve Warrant reserve Merger reserve reserve Other reserve reserves
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Balance at 30
September 2022 148 - 106,707 385 7,550 114,791
Total
Comprehensive
income for the
period - - - (48) - (48)
Balance at 31
March 2023 148 - 106,707 337 7,550 114,743
Total - - - - -
Comprehensive
income for the
period -
Balance at 30
September 2023 148 - 106,707 337 7,550 114,743
The closing balance of the capital redemption reserve represents
the amounts transferred from share capital on redemption of
deferred shares in a prior period.
The merger reserve arose prior to transition to IFRS when merger
accounting was adopted.
The hedge effectiveness reserve reflects the total accounted for
under IFRS 9 in relation to the Tricoya segment.
The other reserve represents the amounts received for subsidiary
share capital from non-controlling interests net with the carrying
amount of non-controlling interests issued.
11. Commitments under loan agreements
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2023 30 Sept 2022 31 March 2023
Amounts payable under loan agreements - undiscounted cashflows:
Within one year 11,462 20,133 10,312
In the second to fifth years inclusive 48,841 61,210 52,976
After five years 10,519 - 9,962
Less future finance charges (6,642) (6,447) (7,330)
Present value of loan obligations 64,180 74,896 65,920
11. Commitments under loan agreements (continued)
ABN AMRO Debt Facilities
In October 2021 Accsys entered a 3-year bilateral facilities
agreement with ABN which comprises of a
- EUR45m term loan facility and,
- EUR25m Revolving Credit Facility ('RCF') .
- The term loan has bi-annual payments of EUR2.25m from April 2023.
- Term loan interest varies between 1.75% and 3.25% depending on net leverage.
- RCF interest rate varies between 2.0% and 3.5% above EURIBOR.
Approximately EUR20m of the RCF was utilised to provide a letter
of credit to FHB in support of the Accoya USA JV funding
arrangements, and the remaining EUR5m was drawn at 30 September
2023.
The ABN AMRO facilities are secured against the assets of the
Group which are 100% owned by the Company (excluding the Tricoya
companies) and EUR10m of cash collateral, and include net leverage
and interest cover covenants which are based upon the results and
assets of these entities.
NatWest facility:
In November 2022, Tricoya UK Limited (the Company's subsidiary)
agreed with NatWest Bank plc to restructure its debt facility,
reducing the principal amount to a EUR6m loan with a 7 year term.
The facility is secured by fixed and floating charges over all
assets of Tricoya UK Limited.
Interest is calculated with the margin ranging from 325 to 475
basis points plus Euribor and capitalised during the 7 year term.
No repayments are due until the facility maturity date.
At 30 September 2023, the Group had EUR6.4m (31 March 2023:
EUR6.2m) borrowed under the facility.
Tricoya UK Limited also provided a Value Recovery Instrument
("VRI") agreement to NatWest, to recover up to approximately
EUR9.4m, on a contingent basis, depending on profitability of the
Tricoya UK plant once operational. The contingent payments to
NatWest are based upon free cash-flow generated by the Tricoya UK
plant.
First Horizon Bank facility:
In March 2022 the Company's joint venture, Accoya USA LLC agreed
an eight-year $70m loan from First Horizon Bank ('FHB') of
Tennessee, USA in respect of the construction and operation of the
Accoya USA plant and a $10m RCF to fund working capital. The FHB
term loan is secured on the assets of Accoya USA and is supported
by Accoya USA's shareholders, including $50m through a limited
guarantee provided on a pro-rata basis, with Accsys' 60% share
representing $30m, supported by a $20m Letter of Credit ('LC')
provided by ABN AMRO to FHB.
The interest rate varies between 1.3% to 2.1% over USD
LIBOR.
Accoya USA LLC is equity accounted for in these financial
statements, therefore this Borrowing is not included in the Group's
borrowings. (See note 13)
De Engh convertible loan:
In March 2022, Accsys agreed a 3.5 year, EUR10m convertible loan
with De Engh BV Limited ('De Engh'), an investment company based in
the Netherlands (the 'Convertible Loan'), and shareholder in Accsys
Technologies PLC.
The Convertible Loan is unsecured and carries an interest margin
of 6.25% above Euribor, increasing by 2% in year three and a
further 2% in the following year. Interest is payable quarterly and
there are no principal payments during the term of the loan. The
Convertible Loan is convertible from the end of year two to
ordinary shares in the Company Accsys at EUR2.30 per share.
11. Commitments under loan agreements (continued)
Reconciliation to net (debt)/cash:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
Cash and cash equivalents 20,780 18,123 26,593
Less:
Amounts payable under loan agreements (64,180) (74,896) (65,920)
Amounts payable under lease liabilities (4,788) (4,596) (4,735)
Net (debt)/cash (48,188) (61,369) (44,062)
Restricted cash
The cash and cash equivalents disclosed above and in the
condensed consolidated statement of cash flow includes $10m which
is pledged to ABN AMRO as collateral.
Reconciliation to adjusted cash:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
Cash and cash
equivalents 20,780 18,123 26,593
Less:
Cash pledged
to ABN AMRO (10,016) (10,949) (9,828)
Adjusted
cash 10,764 7,174 16,765
========== ==========
12. Transactions with non-controlling interests
In the period ended 30 September 2022:
No shares were issued in the period to 30 September 2022.
The total carrying amount of the non-controlling interests in
Triocya Technologies Ltd and Tricoya UK Ltd at 30 September 2022
was EUR36.2m.
In the period ended 31 March 2023:
In November 2022, Accsys purchased the remaining ownership of
Tricoya Technologies Ltd and Tricoya UK Ltd which it did not
previously own via a Sales Purchase Agreement ('SPA') with the
Tricoya consortium partners.
13. Investment in Joint Venture
In August 2020, Accsys together with Eastman Chemical Company
formed a new company, Accoya USA LLC, 60% owned by Accsys and 40%
owned by Eastman. Accoya USA LLC is constructing and will operate
an Accoya plant in Kingsport, Tennessee (USA) to serve the North
American market. The plant is designed to initially produce
approximately 43,000 cubic metres of Accoya per annum and to allow
for cost-effective expansion.
Under IFRS 11 - Joint arrangements, the two parties are assessed
to jointly control the entity and Accoya USA LLC is accounted for
as a joint venture and equity accounted for within the financial
statements.
At 30 September 2023, Accsys and Eastman have contributed equity
of $61m to Accoya USA LLC, with a further $5m committed to be
contributed. There were no equity injections during the period
ending 30 September 2023.
See note 11 for details of debt funding.
The carrying amount of the equity-accounted investment is as
follows:
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended
30 Sept 30 Sept 31 March
2023 2022 2023
EUR'000 EUR'000 EUR'000
Opening balance 30,859 3,216 3,216
Investment in Accoya USA LLC - 29,129 28,979
Less: Accsys proportion (60%)
of licence fee received - - (300)
Loss for the period (1,211) (403) (1,036)
Closing balance 29,648 31,942 30,859
The Group has equity accounted for the joint venture in these
condensed consolidated financial statements.
The income statement, balance sheet and cashflows for Accoya USA
LLC, are set out below:
Accoya USA LLC recorded a loss from operations of EUR2,019,000
for the period ended 30 September 2023 (EUR963,000 for the period
ended 30 September 2022). The loss attributable to Accsys
Technologies PLC was EUR1,211,000 for the period ended 30 September
2023 (EUR403,000 for the period ended 30 September 2022).
Balance Sheet: Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2023 30 Sept 2022 31 Mar 2023
EUR'000 EUR'000 EUR'000
Non-current assets
Property, plant and equipment 101,629 37,963 69,327
Right of use assets 6,242 7,084 6,242
107,871 45,047 75,569
Current assets
Debtors 149 578 236
Cash and cash equivalents 10,385 31,628 8,701
10,534 32,206 8,937
Current liabilities
Trade and other payables (12,562) (11,194) (14,682)
Obligation under lease liabilities (408) (416) (455)
Short term borrowings - - -
Net current liabilities (2,436) 20,596 (6,200)
Non-current liabilities
Obligation under lease liabilities (5,951) (6,604) (5,875)
Other long term borrowing (46,304) 1,457 (9,781)
(52,255) (5,147) (15,656)
Net assets 53,180 60,496 53,713
13. Investment in Joint Venture (continued)
Cash flows: Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2023 30 Sept 2022 31 Mar 2023
EUR'000 EUR'000 EUR'000
Cash flows from operating activities 1,378 239 (1,147)
Cash flows from investing activities (33,829) (19,022) (49,568)
Cash flows from financing activities 33,844 48,426 59,550
Net increase in cash and cash equivalents 1,393 29,643 8,835
Foreign exchange gain/(loss) 291 1,750 (369)
Net increase in cash and cash equivalents 1,684 31,393 8,466
14. Post Balance Sheet Events
The Company has today announced a Fundraising to raise new gross
proceeds of approximately EUR24m and an extension of its debt
facilities.
The Fundraise is proposed to include:
-- A Placing to raise gross proceeds of approximately EUR13m to EUR15m
-- The issue of between EUR9 and EUR11m new convertible loan
notes alongside the repricing and reissue of the existing De Engh
EUR10m convertible loan (see note 11) in-line with the terms of the
new convertible loan notes. Together, the convertible loan notes
amount to between EUR19 and EUR21m. The convertible loan notes
terms are proposed as following:
o 6 year term
o fixed rate coupon of 9.5% which will be rolled up for the
first 2.5 years, deferred and paid in cash over the remaining 3.5
years
o convertible into ordinary shares of the Company at a price of
83.22 euro cents per share
o unsecured and non-transferrable
Amendments to ABN AMRO borrowing facilities
-- The Company has reached an agreement with ABN AMRO to extend
the Company's main EUR40.5m term loan facility and EUR25m revolving
credit facility ('RCF') by 18 months from October 2024 to 31 March
2026. The new agreement will have a repayment holiday to July 2025,
quarterly repayments of EUR1.125m thereafter and a release of the
existing cash collateral of EUR10m, with EUR7.5m utilised to repay
a portion of the term loan facility and the remaining EUR2.5m being
utilised for general liquidity purposes. Borrowing costs will range
between 3 - 4% over Euribor for the RCF and over 1.34% in respect
of the term loan facility.
-- The net debt / EBITDA covenant will increase to 2.75x over
three quarters ending 30 September 2024, 31 December 2024 and 31
March 2025. All other financial covenants will remain the same.
-- This amendment agreement with ABN AMRO is conditional on the
Company raising EUR24m through the Fundraising and will become
effective upon completion of the proposed Fundraising.
Use of Fundraising proceeds
The use of the Fundraising proceeds is as follows:
-- Approximately EUR22m will be used to fund Accsys's share of
Accoya USA. The total construction cost for the US plant is now
expected to be approximately $160m. It is expected that
approximately EUR15.5m of the Fundraising proceeds will be used to
complete construction and approximately EUR6.5m to fund operations
as the US plant targets a steady ramp up in volume and
operations.
-- Approximately EUR2.0m will be used for general liquidity and working capital purposes.
The Directors are of the belief that the issue of the
convertible loan notes along with the proposed Placing and
amendments to the ABN AMRO borrowing facilities are in the best
interests of the Company and strengthens the Company's funding
position during a key period of investment.
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END
IR QFLBLXFLEFBX
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November 21, 2023 02:04 ET (07:04 GMT)
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