TIDMAXS
RNS Number : 6567R
Accsys Technologies PLC
21 November 2012
AIM: AXS
NYSE Euronext Amsterdam: AXS
21 November 2012
ACCSYS TECHNOLOGIES PLC ("Accsys" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
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Highlights
-- Revenue increased by 47% to EUR9.1m for the six months ended
30 September 2012 (2011: EUR6.2m) and included EUR553,000 of
licence revenue (2011: EUR75,000);
-- First stages of Process Design Package have been delivered to
Rhodia following the signing of an Accoya(R) licence in June 2012
enabling the next stages of their engineering planning;
-- Entered into a 50:50 JV with INEOS Technologies in October
2012 to exploit Accsys' intellectual property surrounding
Tricoya(R) wood elements acetylation and processes globally;
-- Sales of Medite Tricoya(R) Extreme Durable MDF are increasing
steadily since its launch by our joint development partner, Medite
at the end of 2011;
-- Gross manufacturing margin increased by 24% to a positive 15%
and the Arnhem manufacturing EBITDA margin improved from -36% to
-6%;
-- Total of 36 distribution or agency agreements now in place
covering most of Europe, Australia, Canada, Chile, China, India,
Mexico, Morocco, New Zealand, parts of South-East Asia and the
USA;
-- Accoya(R) and Tricoya(R) continued to gain overall market
recognition, for example by winning the Supreme Award for
Innovation at the annual Timber Expo in the UK;
-- Cash balance of EUR20.7m at 30 September 2012 (EUR24.6m at 31
March 2012), which excludes EUR4m received from INEOS after the
period end following their subscription for 24 million new shares
in Accsys; and
-- Decrease in the loss before tax by 14% to EUR5.4m (2011: EUR6.3m).
Paul Clegg, Chief Executive commented: "We have had a
strategically significant past six months, establishing the INEOS
joint venture as a catalyst to developing and exploiting the
Tricoya(R) technology, whilst continuing to build on our global
market position in Accoya(R) in terms of revenue increases, a
greater distribution network and progression with the Rhodia
licence agreement. Most importantly, we have achieved these
milestones whilst increasing revenues and margins within our core
Arnhem manufacturing base, maintaining a strong balance sheet and
winning industry awards endorsing the quality of our products. We
enter the second half of the year with confidence that we have the
building blocks in place to achieve our long term objectives of
profitability and increased revenues from our technology licensing
business model."
There will be a presentation relating to these results at 10:00
GMT on Wednesday 21 November 2012. The presentation will take the
form of a web based conference call, details of which are
below:
Webcast link:
Click here or copy and paste ALL of the following text into your
browser:
http://www.media-server.com/m/p/uh72q86m
Conference call details for participants:
Participant Telephone Number: +44 (0)20 7136 2051 UK Toll
Confirmation Code: 7591485
Participants will have to quote the above code when dialling
into the conference.
For further information, please contact:
Accsys Technologies Paul Clegg, CEO via Citigate
PLC Hans Pauli, COO Dewe Rogerson
Will Rudge, FD
Oliver Cardigan
Christopher Wilkinson +44 (0)20 7260
Numis Securities Ben Stoop 1000
+44 (0)20 7282
2945
Ginny Pulbrook +44 (0)20 7282
Malcolm Robertson 2867
Citigate Dewe Rogerson Suzanne Bakker +31 20 575 4023
Accsys Technologies PLC
Chairman's statement
Introduction
I am happy to report we have made excellent progress in all
areas and continue towards our objectives of licensing our
technology worldwide and achieving profitability.
Revenue increased by 47% compared to last year while gross
manufacturing margin increased by 24%, from minus 9% to a positive
15%. The Arnhem manufacturing facility EBITDA improved from -36% to
-6% compared to the same period last year.
We have maintained a strong balance sheet with cash of EUR20.7m
at 30 September (EUR24.6m at 31 March 2012). A further EUR4m was
received from INEOS shortly after the period end following their
subscription for 24 million new shares in Accsys at a subscription
price of EUR0.17 at the same time as entering a new joint venture
with us, as described below.
We have been working closely with Rhodia following the signing
of an Accoya(R) licence in June 2012 and are making progress
towards the agreement becoming fully effective later in 2013, after
which construction of the 63,000m(3) initial plant is expected to
commence.
The commercial deployment of Tricoya(R) has also progressed
well, with sales of Medite Tricoya(R) Extreme Durable MDF
increasing since its launch by our joint development partner,
Medite at the end of 2011. We expect this momentum to continue as
new product applications are being identified by distributors. In
particular, following the formation of Tricoya Technologies
Limited, our joint venture ('JV') with INEOS in October 2012, we
now expect to accelerate the global deployment of Tricoya(R) .
Accoya(R) and Tricoya(R) continued to gain overall industry
recognition in what remains a difficult market place given the
economic conditions affecting the building and construction
industry. This has been highlighted by recently winning the Supreme
Award for Innovation at the annual Timber Expo in the UK and by
being approved as a Durable Wood Preservation Product by the Japan
Wood Protection Association and resulting in Accoya(R) being
amongst a very select group of solid wood products to be
recognised.
I was pleased to welcome Will Rudge to the board on 1 October
2012. Will was previously financial controller, working closely
with Hans Pauli who previously held the joint roles of CFO and COO.
As a result of the many developments summarised above, the
operational work load has increased and Will's appointment enables
Hans, who remains on the board as COO, to dedicate more time to the
operations of the group including the plant in Arnhem.
Outlook
The last six months has proved particularly exciting and I have
been delighted to have developed our relationships with Rhodia and
INEOS.
The increase in both sales and profitability indicate that our
manufacturing plant will achieve positive EBITDA level at
approximately 50% of production capacity; a level which we expect
to achieve within the next year. This also demonstrates the
potential returns a prospective licensee can generate by
manufacturing Accoya(R) . I expect Accoya(R) sales growth to
continue; albeit the level of growth will be difficult to predict,
however, we are well positioned in the event of an upturn in
economic conditions.
The JV entered into with INEOS starts a new phase in the
development of Tricoya, a product which I am confident will prove
revolutionary in the panel products industry. Accsys' intellectual
property and experience with acetylated wood complements INEOS's
experience and skills in the field of technology development and
licensing and I am looking forward to us accelerating the
commercialisation of Tricoya(R) globally.
We continue to develop a number of licensing opportunities,
which due to the complex nature and investment required, mean the
timing of their completion are difficult to predict. I am, however,
confident that our Accoya(R) manufacturing business, which has
demonstrated revenue and margin growth, will enable us to achieve
our long term objective of profitability as well as further global
licensing technology revenue.
Gordon Campbell
Chairman
20 November 2012
Accsys Technologies PLC
Chairman's statement
Accoya(R) wood
Revenue from sales of Accoya(R) produced by our Arnhem plant
increased by 40% to EUR7.7m in the first half of the year compared
to the same six months in the previous year.
11 out of the top 15 geographies recorded revenue growth
compared to the first half of last year as well as compared to the
second half of last year. This included the UK, the Netherlands and
Germany as well as less established geographies which showed
significant growth and indicates a trend for continuing growth.
While North American sales were disappointing, we have recently
received orders relating to more significant manufacturing
opportunities and are confident growth will resume.
Sales to Diamond Wood continue to be less than hoped for as it
has still not completed its fund-raising. Consequently, sales
during the period from them were less than last year. We will
continue to work with Diamond Wood and other business partners to
ensure that the significant number of opportunities which exist in
the South-East Asia region will be developed. We are confident that
this remains a key growth market for Accoya(R) .
Sales to Ireland in the second half of the previous financial
year included a substantial volume sold to Medite to enable them to
build up initial stocks of Medite Tricoya. Future deliveries to
Medite are expected to resume in the near future, however due to
the minimum volumes required for individual production runs of MDF
panels, the timing and quantities are likely to remain difficult to
predict.
We have signed additional distribution agreements adding
Iceland, Mexico and Turkey to give us a total of 36 distribution or
agency agreements covering most of Europe, Australia, Canada,
Chile, China, India, Morocco, New Zealand, parts of South-East Asia
and the USA.
We have continued to develop new wood species with the first
sales of Accoya(R) Alder following its commercial launch at the end
of last year. Significant progress has been made in developing
Scots pine, a species which we expect will introduce additional
end-product offerings, attract interest as a local species for
European markets, as well as being an additional sourcing option.
During the period we published the Accoya(R) Structural guide and
launched an Accoya(R) product for use within structural projects,
together which will open up new business opportunities as well as
having already generated sales.
Progress with licensing activity
We have been working closely with Solvay-Rhodia ('Rhodia')
following the signing of a licence agreement in June. The licence
is for the exclusive rights for a 15 year period to produce and
sell Accoya(R) within the Council of Europe, save for the Benelux
countries, UK and Ireland. The first plant is expected to have an
initial capacity of 63,000m(3) .
An outline engineering plan was delivered to Rhodia soon after
signature, and more recently the first stages of the Process Design
Package have been delivered, which has enabled Rhodia to progress
their detailed engineering planning. Further design work continues
to progress as planned, including the sharing of a significant
amount of technical knowledge.
Our respective sales teams have also been working closely and
have developed relationships with our existing and new customers
following Rhodia's commissioning of an extensive market assessment
programme. Many customers have been encouraged by the expected
increased production capacity that the licence will allow. The
programme has also assessed the manufacturing, retail, distribution
and tolling markets.
The contract is expected to become fully effective in the second
half of 2013 following the approval of both Accsys and Rhodia's
board of directors.
As described above, Diamond Wood has not yet completed its
fund-raising. We understand that Diamond Wood is no longer
expecting to be admitted to the junior market of the Malaysian
Stock Exchange as they previously reported. However, we understand
that plans are being developed to secure the necessary funding to
complete the construction of their first Accoya(R) plant in
Nanjing, China. We continue to work with Diamond Wood to ensure
that additional Accoya(R) sales opportunities are secured prior to
construction.
We have continued Research and Development in respect of new
species, new applications for our existing products and process
developments which we anticipate will result in improved efficiency
and capacity of both our plant and that of our licensees.
Tricoya(R) Technologies Limited ('TTL')
In October 2012 we entered into a 50:50 JV with INEOS Industries
Holdings Limited to exploit Accsys' intellectual property
surrounding Tricoya(R) wood elements acetylation and processes
globally. The new company, TTL, will exploit Accsys' Tricoya
technology for the use within MDF, particle board and wood plastic
composites; a worldwide market estimated at more than EUR60 billion
annually.
INEOS will contribute its significant market reach, technology
and licensing as well as intellectual property expertise. Accsys
has granted TTL the rights to exploit the Tricoya(R) technology.
All new and existing licence agreements concerning Tricoya(R) are
expected to be transferred to or entered into directly by TTL,
including the licence option agreement entered into in April 2012
with a leading MDF and Particle Board manufacturer in Latin America
and Accsys' Joint Development Agreement with Medite.
TTL will carry out all activities relating to Tricoya including
business development, marketing, further research and product and
process development. The cost of these activities, which will be
carried out by Accsys and INEOS staff and which were previously to
be borne by Accsys, will now be borne by TTL.
TTL's profits will be shared between INEOS and Accsys in a way
which reflects each party's interest. This includes a
disproportionate profit share reflecting the contribution of
Accsys' intellectual property which will create significant value
for Accsys.
As mentioned above, Medite has continued to sell Medite
Tricoya(R) Extreme Durable MDF since the end of 2011 and has
increased the number of distributors and the volume sold as the
year has progressed. These ultra-high performance medium density
fibre boards with equivalent to class 1 durability, are quickly
gaining industry recognition as a major innovative new product, for
example, by winning the Supreme Award for Innovation at this year's
Timber Expo in Coventry, UK.
We continue to work closely with our licence option holder in
Latin America, with on-going activities concerning market
evaluation and preliminary production planning in accordance with
the agreement. To support the licensing proposition in this region
we have continued to file various national patent applications
across Latin America.
We expect sales of Medite Tricoya to continue to increase and
TTL will work closely with Medite and the Latin American licence
option holder to further develop the product and applications while
further market testing takes place.
Discussions with a number of other potential new Accoya(R) and
Tricoya(R) licensees continue, however, it remains important to
note that any resulting agreements may require significant
investment by the other party and as such we expect these
negotiations will take time to complete.
The benefits
We expect to continue to grow sales and further increase
industry acceptance as a result the superior properties of our
products.
Accoya(R) and Tricoya(R) both exhibit class leading dimensional
stability and durability properties. These properties mean that
Accoya(R) is ideal for use in windows, doors, cladding, decking,
structural and civil works and much more. Tricoya(R) panel products
can be used in wet and humid environments where previously, wood
based panel products were not suitable. The number of applications
for Tricoya(R) based panels is growing as a greater number of
potential uses are identified. These include cladding, window
components, facia and soffit panels, wet interiors, including wall
linings in swimming pools, bathrooms, wet rooms etc, speciality
furniture (lockers, chairs etc), play frames, signages, automotive
parts, sound barriers and potentially even sports equipment.
In addition, both Accoya(R) and Tricoya(R) boast superior green
credentials. By significantly enhancing the durability and
dimensional stability of fast-growing and abundantly available
certified wood, our products provide compelling environmental
advantages over slow-growing hardwoods (which are often
unsustainably sourced), woods treated with toxic chemicals, and
non-renewable carbon-intensive materials such as plastics, metals
and concrete.
These properties, which result in lower lifetime costs compared
to alternative materials, have also enabled Accoya(R) to hold a
number of significant certifications, for example, the Cradle to
Cradle Gold level certification.
Financial Review
Statement of comprehensive income
Group revenue increased by 47% to EUR9.1m for the six months
ended 30 September 2012 (2011: EUR6.2m). Revenue from Accoya(R)
(included within manufacturing revenue) increased by 40% to
EUR7.7m, reflecting growth achieved in 11 out of 15 of the top
geographies. EUR553,000 of licence income was recorded in the
period (2011: EUR75,000) representing a licence option payment and
revenue generated in the period from the licence with Rhodia.
Gross margin increased from -7% to 20.5% compared to the same
period in the previous year. This was driven by the additional
licence income and a significant improvement in the gross
manufacturing margin which increased by 24% from minus 9% to a
positive 15%. This margin is expected to improve further as our
production volumes increase.
Other operating costs increased from EUR5.9m to EUR7.2m. The
increase is partly attributable to the relative weakening of the
Euro compared to the prior year which has impacted the costs
incurred by the Windsor and Dallas offices. In addition, the
increase is also attributable to non recurring items including
legal and intellectual property costs incurred in relation to the
agreements described above. Furthermore, an increase in sales and
marketing costs in the period was attributable to the earlier
timing of certain exhibitions as well as a general increase in
activity, including support of both new and existing
distributors.
The Group headcount reduced from 97 at 30 September 2011 to 96
at 31 March 2012 and then to 94 at 30 September 2012.
The decrease in the loss before tax by 14% to EUR5.4m (2011:
EUR6.3m) can largely be attributed to the improvement in revenue
and gross margin.
Cash flow and financial position
At 30 September 2012, the Group held cash balances of EUR20.7m.
The EUR3.9m reduction in cash compared to 31 March 2012 is mainly
attributable to the reported operating loss together with an
increase in working capital of EUR0.3m, purchases of property plant
and equipment of EUR0.2m and capitalised development costs of
EUR0.4m. These have been offset by a EUR0.8m receipt of research
and development tax credits.
After the period end, in addition to INEOS's joint investment
programme with Accsys as described above, INEOS Industries Holdings
Limited subscribed for 23,529,412 new ordinary shares in Accsys, at
a price of EUR0.17 per share resulting in new equity of
EUR4,000,000 and representing 5.4% of the issued share capital of
Accsys. Accsys also issued a warrant instrument in favour of INEOS,
allowing INEOS the opportunity to purchase up to a further
16,468,236 shares at a price of EUR0.21 per share at certain times
during the course of the next four years.
Risks and uncertainties
The Group's principal risks and uncertainties are unchanged from
those set out in its 2012 Annual Report.
Going concern
These condensed financial statements are prepared on a going
concern basis, which assumes that the Group will continue in
operational existence for the foreseeable future, which is deemed
to be at least 12 months from the date these interim results were
approved.
As part of the Group's going concern review, the Directors have
reviewed the Group's trading forecasts and working capital
requirements for the foreseeable future. These forecasts indicate
that, in order to continue as a going concern, the Group is
dependent on the achievement of certain operating performance
measures relating to the production and sales of Accoya(R) wood
from the plant in Arnhem and the collection of on-going working
capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and
performance measures and believe that appropriate controls and
procedures are in place or will be in place to make sure that these
are met. The Directors believe, while some uncertainty inherently
remains in achieving the budget, in particular in relation to
market conditions outside of the Group's control, that there are a
sufficient number of alternative actions and measures that can be
taken in order to achieve the Group's medium and long term
objectives.
Therefore, the Directors believe that the going concern basis is
the most appropriate on which to prepare the financial
statements.
Paul Clegg
Chief Executive
20 November 2012
The Directors confirm to the best of their knowledge:
-- The condensed financial statements contained in the half year
report have been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted by the EU;
-- The interim results include a fair review of the information
required by DTR 4.2.7R being an indication of important events that
have occurred during the first six months of the financial year and
a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- The interim Management Report (Narrative) include a fair
review of the information required by DTR 4.28R being disclosure of
related party transactions and changes therein since the last
annual report.
By order of the Board
Angus Dodwell
Company Secretary
20 November 2012
Note Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31
30 September 30 September March
2012 2011 2012
EUR'000 EUR'000 EUR'000
Total Total Total
Accoya(R) wood revenue 7,690 5,517 13,574
Licence revenue 553 75 75
Other revenue 840 639 1,353
------------------------------------ ----- ------------- ------------- ----------
Total revenue 2 9,083 6,231 15,002
Total cost of sales (7,219) (6,695) (15,050)
Gross profit/(loss) 1,864 (464) (48)
Other operating costs 3 (7,224) (5,852) (12,497)
Impairment of licensee receivables 4 - - (2,281)
Loss from operations (5,360) (6,316) (14,826)
Finance income 107 22 154
Finance expense (124) (33) (240)
Loss before taxation (5,377) (6,327) (14,912)
Tax (charge)/credit (108) (252) 536
Loss for the period (5,485) (6,579) (14,376)
------------- ------------- ----------
Gain arising on translation
of foreign operations 17 23 35
Total comprehensive loss for
the period (5,468) (6,556) (14,341)
============= ============= ==========
Basic and diluted loss per
ordinary share 5 EUR(0.01) EUR(0.02) EUR(0.04)
The notes set out on pages 13 to 18 form part of these condensed
financial statements.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
Note 2012 2011 2012
EUR'000 EUR'000 EUR'000
Non-current assets
Intangible assets 7,814 7,580 7,579
Property, plant and equipment 6 24,799 26,251 25,614
Available for sale investments 7 - - -
Deferred tax 1,219 1,846 1,522
33,832 35,677 34,715
---------- ---------- ----------
Current assets
Inventories 3,987 5,811 3,120
Trade and other receivables 3,031 7,879 3,576
Cash and cash equivalents 20,731 27,069 24,574
Corporation tax 516 5 1,117
28,265 40,764 32,387
---------- ---------- ----------
Current liabilities
Trade and other payables (3,402) (5,122) (3,385)
Obligation under finance
lease (280) (280) (264)
(3,682) (5,402) (3,649)
---------- ---------- ----------
Non-current liabilities
Obligation under finance
lease (1,928) (1,955) (1,960)
(1,928) (1,955) (1,960)
---------- ---------- ----------
Net current assets 24,583 35,362 28,738
Total net assets 56,487 69,084 61,493
Equity and reserves
Share capital - Ordinary
shares 8 4,091 4,039 4,040
Share premium account 124,941 124,877 124,887
Capital redemption reserve 148 148 148
Warrants reserve 82 82 82
Merger reserve 106,707 106,707 106,707
Retained earnings (179,504) (166,776) (174,415)
Own shares (39) (25) -
Foreign currency translation
reserve 61 32 44
Total equity 56,487 69,084 61,493
The notes set out on pages 13 to 18 form part of these condensed
financial statements.
Foreign
currency
Share Capital trans-
capital Share redempt-ion Warrant Merger Own lation Retained
Ordinary premium reserve reserve reserve Shares reserve earnings Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at
31 March
2011 4,031 124,809 148 82 106,707 (25) 9 (160,387) 75,374
Total
comprehensive
loss for the
period - - - - - - 23 (6,579) (6,556)
Share based
payments - - - - - - - 190 190
Shares issued 8 - - - - - - - 8
Premium on
shares issued - 70 - - - - - - 70
Share issue
costs - (2) - - - - - - (2)
Balance at
30 Sept 2011
(unaudited) 4,039 124,877 148 82 106,707 (25) 32 (166,776) 69,084
========= ========= ============ ========= ========= ======== ========== ========== ========
Total
comprehensive
loss for the
period - - - - - - 12 (7,797) (7,785)
Share based
payments - - - - - - - 158 158
Shares issued 1 - - - - 25 - - 26
Premium on
shares issued - 8 - - - - - - 8
Share issue
costs - 2 - - - - - - 2
Balance at
31 March
2012 4,040 124,887 148 82 106,707 - 44 (174,415) 61,493
========= ========= ============ ========= ========= ======== ========== ========== ========
Total
comprehensive
loss for the
period - - - - - - 17 (5,485) (5,468)
Share based
payments - - - - - - - 396 396
Shares issued 51 - - - - (39) - - 12
Premium on
shares issued - 54 - - - - - - 54
Share issue - - - - - - - - -
costs
Balance at
30 Sept 2012
(unaudited) 4,091 124,941 148 82 106,707 (39) 61 (179,504) 56,487
========= ========= ============ ========= ========= ======== ========== ========== ========
The notes set out on pages 13 to 18 form part of these condensed
financial statements.
783,283 of the shares issued in the period relate to the vesting
of matching shares held in the Employee share scheme under which 28
employees subscribed in August 2011. A further 415,332 shares were
issued in the period to the Employee share scheme under which 19
employees subscribed with the ability to receive a matching share
after one year, if still employed by the Group.
Own shares represents 3,926,666 issued to an Employee Benefit
Trust at nominal value on 6 July 2012.
Unaudited Unaudited Audited
6 months 6 months Year End
30 Sept 30 Sept 31 March
2012 2011 2012
EUR'000 EUR'000 EUR'000
Profit before taxation (5,377) (6,327) (14,912)
Adjustments for:
Amortisation of intangible assets 145 137 280
Depreciation of property, plant and equipment 967 898 1,877
Finance expense/(income) 17 11 86
Reversal of impairment of receivables - - 2,281
Equity-settled share-based payment expenses 396 190 348
Cash flows from operating activities before
changes in working capital (3,852) (5,091) (10,040)
Decrease/(increase) in trade and other
receivables 549 1,709 3,734
Decrease in deferred income - - (2,550)
(Increase)/Decrease in inventories (865) 2,609 5,300
Decrease in trade and other payables 23 (966) (161)
Net cash absorbed by operating activities
before tax (4,145) (1,739) (3,717)
Tax received 796 - -
Net cash flows from operating activities (3,349) (1,739) (3,717)
========== ========== =========
Cash flows from investing activities
Interest received 107 23 154
Expenditure on capitalised internal development (381) (142) (283)
Purchase of property, plant and equipment (152) (723) (1,065)
Net cash absorbed by investing activities (426) (842) (1,194)
========== ========== =========
Cashflows from financing activities
Proceeds from sale and lease back - 2,236 2,236
Finance expenses (17) - (12)
Interest Paid (124) - (173)
Proceeds from issue of share capital 62 78 89
Share issue costs - (267) (267)
Net cash from financing activities (79) 2,047 1,873
========== ========== =========
Net decrease in cash and cash equivalents (3,854) (534) (3,038)
Effect of exchange differences on restatement
of non Euro functional currency 11 27 36
Opening cash and cash equivalents 24,574 27,576 27,576
Closing cash and cash equivalents 20,731 27,069 24,574
========== ========== =========
The notes set out on pages 13 to 18 form part of these interim
financial statements.
1. Accounting policies
Basis of accounting
The Group's condensed financial statements in these interim
results have been prepared in accordance with International
Accounting Standard (IAS) 34 "interim financial reporting" as
adopted for use in the European Union. The financial information
for the six months ended 30 September 2012 and the six months ended
30 September 2011 is unaudited. The comparative financial
information for the full year ended 31 March 2012 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. 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.
Changes in 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 2013
Annual report. The accounting policies and methods of computation
are consistent with those applied in the 31 March 2012 annual
financial statements.
Going concern
These condensed financial statements are prepared on a going
concern basis, which assumes that the Group will continue in
operational existence for the foreseeable future, which is deemed
to be at least 12 months from the date these interim results were
approved.
As part of the Group's going concern review, the Directors have
reviewed the Group's trading forecasts and working capital
requirements for the foreseeable future. These forecasts indicate
that, in order to continue as a going concern, the Group is
dependent on the achievement of certain operating performance
measures relating to the production and sales of Accoya(R) wood
from the plant in Arnhem and the collection of on-going working
capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and
performance measures and believe that appropriate controls and
procedures are in place or will be in place to make sure that these
are met. The Directors believe, while some uncertainty inherently
remains in achieving the budget, in particular in relation to
market conditions outside of the Group's control, that there are a
sufficient number of alternative actions and measures that can be
taken in order to achieve the Group's medium and long term
objectives.
Therefore, the Directors believe that the going concern basis is
the most appropriate on which to prepare the financial
statements.
2. Segmental reporting
The Group's business is the development, commercialisation and
licensing of proprietary technology for the manufacture of
Accoya(R) wood, Tricoya(R) wood elements and related acetylation
technologies. Segmental reporting is divided between licensing
activities, the manufacturing and sale of Accoya(R) and research
and development activities.
Result by Segment: Licensing
------------------------------------------------------------
Unaudited Unaudited Audited
6 months 6 months Year
ended ended Ended
30 Sept 30 Sept 31 March
2012 2011 2012
EUR'000 EUR'000 EUR'000
Revenue 553 75 75
Cost of sales - - -
Gross profit/(loss) 553 75 75
Other operating
costs (3,758) (2,672) (5,834)
Impairment of
licensee receivables - - (2,281)
Loss from operations (3,205) (2,597) (8,040)
Loss from Operations (3,205) (2,597) (8,040)
Depreciation and
amortisation 173 160 330
EBITDA (3,032) (2,437) (7,710)
----------------------------- ------------- -------------- -----------------------------
Manufacturing
------------------------------------------------------------
Revenue 8,530 6,156 14,927
Cost of sales (7,219) (6,695) (15,050)
Gross profit/(loss) 1,311 (539) (123)
Other operating
costs (2,747) (2,495) (5,247)
Loss from operations (1,436) (3,034) (5,370)
Loss from Operations (1,436) (3,034) (5,370)
Depreciation and
amortisation 908 841 1,754
EBITDA (528) (2,193) (3,616)
----------------------------- ------------- -------------- -----------------------------
Research and Development
------------------------------------------------------------
Revenue - - -
Cost of sales - - -
Gross profit/(loss) - - -
Other operating
costs (719) (685) (1,416)
Loss from operations (719) (685) (1,416)
Loss from Operations (719) (685) (1,416)
Depreciation and
amortisation 32 36 74
EBITDA (687) (649) (1,342)
----------------------------- ------------- -------------- -----------------------------
Total
------------------------------------------------------------
Revenue 9,083 6,231 15,002
Cost of sales (7,219) (6,695) (15,050)
Gross profit/(loss) 1,864 (464) (48)
Other operating
costs (7,224) (5,852) (12,497)
Impairment of
licensee receivables - - (2,281)
Loss from operations (5,360) (6,316) (14,826)
Finance income 107 22 154
Finance expense (124) (33) (240)
Loss before taxation (5,377) (6,327) (14,912)
Loss from Operations (5,360) (6,316) (14,826)
Depreciation and
amortisation 1,113 1,037 2,158
EBITDA (4,247) (5,279) (12,668)
----------------------------- ------------- -------------- -----------------------------
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2012 2011 2012
EUR'000 EUR'000 EUR'000
Netherlands 3,060 2,521 5,264
United
Kingdom 1,832 1,098 2,123
Germany 845 440 1,011
Switzerland 825 447 735
North
America 487 529 1,006
Belgium 349 147 367
Norway 344 139 307
China 296 402 784
India 180 130 231
Italy 155 27 147
New Zealand 142 - 49
Australia 135 46 129
France 121 3 121
Ireland 94 146 2,442
Greece 92 99 174
Other 126 57 112
9,083 6,231 15,002
========== ========== =========
The segmental assets in the current and previous periods were
predominantly held in Europe. Additions to property, plant,
equipment and intangible assets in the current and previous periods
were predominantly incurred in Europe.
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 and the offices in Dallas and Windsor.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2012 2011 2012
EUR'000 EUR'000 EUR'000
Sales and marketing 1,559 1,163 2,264
Research and development 719 685 1,416
Depreciation and amortisation 1,113 1,035 2,159
Other operating
costs 1,069 1,153 2,307
Administration
costs 2,764 1,816 4,351
7,224 5,852 12,497
=================== ========== =========
Administrative costs include costs associated with the Human
Resources, IT, Finance, Management, General Office, Business
Development and Legal departments.
The Group headcount reduced from 97 at 30 September 2011 to 96
at 31 March 2012 and then to 94 at 30 September 2012.
During the period EUR381,000 of development costs were
capitalised and are included within intangible fixed assets
(2011:EUR142,000). This includes EUR140,000 in respect of the
Accoya(R) licence Process Design Package.
4. Exceptional items - Impairment of assets
A net impairment of EUR2,281,000 recorded in the year ended
March 2012 was attributable to Al Rajhi, representing a non-cash
impairment of licensee net receivables (consisting of EUR5,402,000
prepaid commission costs net of EUR2,550,000 deferred income)
recorded in previous years. The impairment was recorded as
uncertainty remains as to whether the licence will proceed.
This was offset by the reversal of a previous impairment of
EUR571,000 reflecting money received from Diamond Wood under the
licence agreement subsequent to the year-end.
5. Loss per share
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
Basic and diluted loss per share 2012 2011 2012
Weighted average number of Ordinary
shares in issue ('000) 406,310 403,364 403,657
Loss for the period (EUR'000) (5,485) (6,579) (14,376)
Basic and diluted loss per share EUR(0.01) EUR(0.02) EUR(0.04)
========== ========== ==========
Basic and diluted losses per share are based upon the same
figures. There are no dilutive share options as these would
increase the loss per share.
6. Property, plant and equipment
Freehold Plant Office
land and machinery equipment Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost or valuation
At 31 March 2011 6,815 26,108 462 33,385
Additions - 598 124 722
Foreign currency translation
gain/(loss) - - (3) (3)
At 30 September 2011 6,815 26,706 583 34,104
Additions 65 253 30 348
Foreign currency translation
gain/(loss) - - (1) (1)
At 31 March 2012 6,880 26,959 612 34,451
Additions - 120 32 152
Foreign currency translation
gain/(loss) - - - -
At 30 September 2012 6,880 27,079 644 34,603
========= =============== =========== ========
Depreciation
At 31 March 2011 - 6,560 398 6,958
Charge for the period 18 850 30 898
Foreign currency translation
gain/(loss) - - (3) (3)
At 30 September 2011 18 7,410 425 7,853
Charge for the period 57 883 44 984
Foreign currency translation
gain/(loss) - - - -
At 31 March 2012 75 8,293 469 8,837
Charge for the period 56 876 35 967
Foreign currency translation
gain/(loss) - - - -
At 30 September 2012 131 9,169 504 9,804
========= =============== =========== ========
Net book value
At 31 March 2011 6,815 19,548 64 26,427
At 30 September 2011 6,797 19,296 158 26,251
At 31 March 2012 6,805 18,666 143 25,614
At 30 September 2012 6,749 17,910 140 24,799
Agreements were reached in August 2011 for the sale and
leaseback of land and the buildings at Arnhem for a total of EUR4m.
EUR2.2m was received in the financial year ending 31 March 2012
with the remaining amount to be received within the next financial
year. Subject to the terms of the agreement, the buyer has
committed to build new storage facilities which will also allow for
an improvement in wood handling logistics. The transaction has
resulted in a finance lease creditor of EUR2.2m, as at 30 September
2012.
7. Available for sale investments
Accsys Technologies PLC's investment in Diamond Wood of
21,666,734 shares represented a holding of 5.66% (2011: 5.66%) as
at 30 September 2012. So far as we are aware, there has been no
change in the investment since that date.
The carrying value of the investment is carried at cost less any
provision for impairment, rather than at its fair value, as at 30
September 2012 there was no active market for these shares and
there was uncertainty over the potential fundraising efforts of
Diamond Wood, and as such a reliable fair value could not be
calculated.
The Group does not currently have an intention to dispose of its
investment in Diamond Wood in the foreseeable future.
The historical cost of the unlisted shares at 30 September 2012
is EUR10m (2011: EUR10m). However, a provision for the impairment
of the entire balance of EUR10m continues to be recorded, as at 30
September 2012 the conclusion of Diamond Wood finalising its
funding arrangements was still pending. In the event that Diamond
Wood completes the fund-raising, the balance may be re-valued.
8. Share capital
On 6 July 2012, the Company issued 3,926,666 new Ordinary shares
to an Employee Benefit Trust at nominal value.
On 23 July 2012, the Company issued 415,332 new Ordinary shares
for EUR0.15 each pursuant to the Company's Employee Share Scheme.
Proceeds of EUR62,000 were received noting that EUR4,000 is held
separately in respect of matching shares which will be issued after
one year if the employee is still employed by the Group.
On 8 August 2012, the Company issued 783,283 new Ordinary shares
in respect of the vesting of matching shares held in the Employee
share scheme under which 28 employees subscribed in August
2011.
At 30 September 2012 the Company had 409,141,923 Ordinary shares
in issue (31 March 2012: 404,016,642).
9. Related party transactions
There were no related party transactions in the six months ended
30 September 2012 (2011: nil).
10. Post balance sheet events
On 4 October 2012, Accsys entered a joint venture with INEOS to
exploit Accsys' intellectual property surrounding its proprietary
Tricoya(R) wood elements acetylation technology and processes,
which is now expected to lead to the accelerated global deployment
of Tricoya(R) . The new company is called Tricoya Technologies
Limited ('TTL').
In addition to INEOS's joint investment programme with Accsys
into the Tricoya business, INEOS Industries Holdings Limited
subscribed for 23,529,412 new ordinary shares in Accsys, at a price
of EUR0.17 per share. Admission of these shares onto the London
Stock Exchange and Euronext Amsterdam markets took place on 19
October 2012 following receipt by Accsys of subscription monies
totalling EUR4,000,000. The new ordinary shares issued to INEOS
represent 5.4% of the issued share capital of Accsys. The Company
also executed a warrant instrument in favour of INEOS, allowing
INEOS the opportunity to purchase up to a further 16,468,236 shares
at a price of EUR0.21 per share at certain times during the course
of the next four years
Introduction
We have been engaged by the company to review the condensed
consolidated set of financial statements in the half-yearly
financial report for the six months ended 30 September 2012, which
comprises the Consolidated statement of comprehensive income,
Consolidated statement of financial position, Consolidated
statement of changes in equity and the interim statement of cash
flow and related notes. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM and Euronext Amsterdam by NYSE Euronext Rules for Companies
which require that the financial information must be presented and
prepared in a form consistent with that which will be adopted in
the company's annual financial statements.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report have been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of the AIM and Euronext Amsterdam by NYSE Euronext Rules
for Companies and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent
in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the half year ended 30
September 2012 is not prepared, in all material respects, in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union, the AIM and
Euronext Amsterdam by NYSE Euronext Rules for Companies.
PricewaterhouseCoopers LLP
Chartered Accountants
London
20 November 2012
Notes:
a) The maintenance and integrity of the Accsys Technologies PLC
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the interim financial report
since it was initially presented on the website.
b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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