TIDMAXS
RNS Number : 8990H
Accsys Technologies PLC
27 March 2020
AIM: AXS
Euronext Amsterdam: AXS
27 March 2020
Accsys Technologies PLC
("Accsys", the "Group" or the "Company")
COVID-19 Update
Accsys, the fast-growing and eco-friendly company that combines
chemistry and technology to create high performance, sustainable
wood building products, today announces a trading update in light
of COVID-19.
People
-- During these unprecedented times, the Board of the Company
remains committed to the health and well-being of the Group's staff
and the wider communities in which it operates. The Company is
following government guidelines, has altered working protocols in
line with local guidelines, and is continuing to keep these under
close review.
Operations and cash management
-- As a result of initial feedback received concerning the
impact of the various government imposed restrictions on our
customers and end users, the Company is now expecting a significant
reduction in demand in the first quarter of its new financial year.
Accordingly, and with a view to optimising cash resources in these
uncertain times, the Company is implementing plans to temporarily
reduce Accoya(R) production. However, the impact on expected demand
continues to be uncertain and so the Company will retain
flexibility to increase production as required and will continue to
monitor the situation very closely.
-- Tricoya(R) Hull plant construction progress - some elements
of work on site have temporarily stopped due to COVID-19 working
guidance issued by the UK government. It remains possible that work
will slow further or temporarily be suspended. It is not yet
possible to determine the extent of any delay to the project
relative to the Company's previous guidance of the plant being
operational in the second half of calendar year 2020, however, the
Company remains committed to completing the construction project
and commencing operations as soon as practically possible.
-- Whilst the Company has always maintained a prudent approach
to costs, due to the level of heightened uncertainty caused by
COVID-19, the Company has identified and is implementing, or
considering as necessary, mitigating actions to reduce costs to
help offset the effect of expected lower production and sales in
order to maximise liquidity and minimise utilisation of cash
resources. These actions include:
o A reduction of inventory levels and working capital more
generally including to ensure prompt debtor collections;
o A deferral of capex including the Arnhem 4(th) reactor
expansion project, noting that the full capital commitment for this
EUR26m project has not yet been committed to;
o A reduction or deferral of variable pay; in addition the
Directors and senior management team have agreed to a temporary 20%
reduction in their base salaries effective from 1 April;
o Utilising UK and Netherlands government schemes in respect of
payroll costs; and
o A reduction or deferral of non-essential operating costs and
new recruitment.
-- Notwithstanding the above, the Group's longer term projects
continue to be progressed and we remain confident about the long
term growth prospects for both Accoya(R) and Tricoya(R) .
Balance sheet and liquidity
-- Following Accsys' EUR46.3million (before expenses) capital
raise in December 2019 the Company's balance sheet remains
robust.
-- The Company's key banking covenant includes ABN facilities
which include a minimum EBITDA level for the Netherlands operating
entity. The previous expected headroom relating to this covenant
was in excess of EUR10m EBITDA and we therefore do not currently
anticipate any issues in meeting this when taking into account the
effect of the mitigating actions set out above.
-- The Board is therefore confident that the Company has
adequate liquidity for the foreseeable future and is focussed on
minimising the utilisation of cash resources so as to enable the
execution of our longer term capital projects.
FY20 trading
-- The Group's financial results for the year ending 31 March
2020 remain in-line with the Board's previous expectations, with
sales volumes for the full year expected to be approximately
57,500m(3) .
Outlook
-- Given the unprecedented levels of uncertainty at this time
and the lack of clarity on the duration of the situation, all
previous guidance on the Group's future performance is being
withdrawn. An update will be provided once there is greater
certainty on the trading environment and the impact of COVID-19 on
the Group. The Board remains confident in the long-term strong
business fundamentals of the Group.
Rob Harris, CEO, said: "In these incredibly challenging times,
we continue to be focussed on ensuring the continued health, safety
and well-being of our people. We are all pulling together to manage
these extraordinary circumstances in the world and our business.
The impact of COVID-19 remains uncertain and as a result we are
working with our key stakeholders; employees, customers and
suppliers, to ensure we minimise the effect of the disruption.
Having completed our capital raise in December 2019, our liquidity
is strong and the mitigating actions we are putting in place or
continue to plan for are focussed on ensuring we maintain our
liquidity, cash resources and future growth optionality. We will
continue to review our future costs and capital allocations in this
light, and provide certainty where practicable for our dedicated
teams to manage."
Ends
For further information, please contact:
Accsys Technologies Robert Harris, CEO via FTI Consulting
PLC William Rudge, FD
Numis Securities Limited
-Nominated Adviser
and Oliver Hardy (NOMAD)
Joint Broker Ben Stoop +44 (0) 20 7260 1000
Carlton Nelson
Investec Bank plc - James Rudd
Joint Broker Alex Wright +44 (0) 20 7597 5970
Matthew O'Keeffe
FTI Consulting Alex Le May +44 (0) 20 3727 1340
Frank Neervoort +31 681 734 236
Off the Grid (The Netherlands) Yvonne Derkse +31 622 37 96 66
Notes to editors:
Accsys Technologies PLC ( www.accsysplc.com ) is a chemical
technology group whose primary focus is on the production of
Accoya(R) wood and Tricoya(R) wood elements, technology licensing
via its subsidiary, Titan Wood Limited, which has manufacturing
operations in Arnhem, the Netherlands (through its subsidiary Titan
Wood B.V.), a European office in London, United Kingdom, an
American office in Dallas, Texas (via its subsidiary Titan Wood,
Inc.) and technology licensing associated with the acetylation of
wood elements via its subsidiary Tricoya Technologies Limited. Any
references in this announcement to agreements with Accsys shall
mean agreements with either Accsys or its subsidiary entities
unless otherwise specified. Accsys Technologies PLC is listed on
the London Stock Exchange AIM market and on Euronext Amsterdam,
under the symbols 'AXS'. Accsys' operations comprise four principal
business units: (i) Accoya(R) wood production; (ii) building and
operating of Tricoya(R) wood chip acetylation plant in Hull; (iii)
technology development, focused on a programme of continuous
development of and improvements to the process engineering and
operating protocols for the acetylation of solid wood and the
development of technology for the acetylation of wood elements; and
(iv) the licensing of technology for the production of Accoya(R)
wood and Tricoya(R) wood elements across the globe.
Tricoya(R) Consortium In March 2017, Accsys announced the
formation of the Tricoya(R) Consortium to fund, build and operate
the Tricoya(R) plant in Hull, UK. M embers of the consortium
include BP and the leading manufacturer of sustainable wood-based
panels, MEDITE Europe DAC. Tricoya Ventures UK Ltd (TVUK), a
subsidiary of Accsys, owns and will operate the Tricoya (R) plant.
TTL exploits all Tricoya(R) related intellectual property and
benefits from any Tricoya(R) related revenues other than those
generated by the Tricoya (R) plant. The Tricoya (R) plant is
expected to have an initial capacity of 30,000 metric tonnes of
Tricoya(R) chips per annum, enough to produce approximately
40,000m(3) of Tricoya(R) panel products per annum. The Tricoya (R)
plant is expected to reach EBITDA breakeven at approximately 40%
design capacity and to take approximately four years to reach full
capacity following completion. The location of the Tricoya (R)
plant at Saltend Chemicals Park in Hull allows for expansion when
market conditions dictate.
Accoya (R) Wood ( www.accoya.com ) is produced using Accsys'
proprietary patented acetylation technology that effectively
converts sustainably grown softwoods and non-durable hardwoods into
what is best described as a "high technology wood". Distinguished
by its durability, dimensional stability and, perhaps most
importantly of all, its reliability (in terms of consistency of
both supply and quality), Accoya(R) wood is particularly suited to
exterior applications where performance and appearance are valued.
Moreover, the Accoya(R) wood production process does not compromise
the wood's strength or machinability. The combination of
dimensional stability, durability and retained strength means that
Accoya(R) wood offers a wealth of new opportunities to architects,
designers and specifiers. These benefits result in lower
maintenance and total cost of ownership while using a higher
sustainable and environmental responsible building material. For a
full archive of Accoya(R) news, visit www.accoya.com/news .
Tricoya(R) Wood Elements ( www.tricoya.com ) are produced using
Accsys' proprietary technology for the acetylation of wood chips
and particles for use in the fabrication of panel products such as
medium density fibreboard and particle-board. These products
demonstrate enhanced durability and dimensional stability which
allow them to be used in a variety of applications that were once
limited to solid wood or man-made products. Exploitation of Accsys'
proprietary technology relating to Tricoya(R) Wood Elements is
carried out through Tricoya Technologies Limited. Tricoya(R) Wood
Elements are lauded as the first major innovation in the wood
composites industry in more than 30 years.
Wood Acetylation is a process which increases the amount of
'acetyl' molecules in wood, thereby changing its physical
properties. When carried out to a sufficient level throughout the
wood, this process protects wood from rot by making it "inedible"
to most micro-organisms and fungi, without - unlike conventional
treatments - making it toxic. It also greatly reduces the wood's
tendency to swell and shrink, making it less prone to cracking and
ensuring that, when painted, it requires dramatically reduced
maintenance.
'Accsys' and 'AccsysTechnologies'aretrading names of Titan Wood
Limited. ACCOYA(R) , TRICOYA(R) and the Trimarque Device are
registered trademarks owned by Titan Wood Limited ("TWL"), a wholly
owned subsidiary of Accsys Technologies PLC, and may not be used or
reproduced without written permission from TWL, or in the case of
the Tricoya(R) registered trademark, from Tricoya Technologies
Limited, a subsidiary of TWL with exclusive rights to exploit the
Tricoya(R) brand.
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