TIDMCYAN
RNS Number : 7921S
Cyan Holdings Plc
29 September 2014
Cyan Holdings plc
("Cyan" or "the Company")
Interim Results for the six months ended 30 June 2014
Cyan Holdings plc (AIM:CYAN.L), the integrated system and
software design company delivering mesh based flexible wireless
solutions for utility metering and lighting control, announces its
Interim Results for the six months ended 30 June 2014.
Financial Highlights
-- Turnover of GBP65,510 (H1 2013: GBP51,512)
-- Operating loss of GBP1,273,333 (H1 2013: GBP1,300,060)
-- Basic and Diluted Loss Per Share of 0.03p (H1 2013: 0.05p)
-- Cash and cash equivalents at 30 June 2014 of GBP716,786 (H1 2013: GBP1,725,948)
Operational Highlights
-- First commercial order for retrofit smart metering solutions for Essel Utilities in India
-- First pilot deployment of a retrofit smart metering solution in Brazil
-- Deployment of pilots at two Tier 1 utilities with partner Nobre de la Torre in Brazil
-- Teaming agreement signed with the M2M unit of Vodafone
-- Board significantly strengthened with appointments of Harry Berry and Peter Mainz
-- Meeting hosted in Cambridge with Chinese Minister Counsellor Zhou
Post Period Highlights
-- First commercial order for smart metering solutions for Tata Power Mumbai, India
-- Commercial order for 15,000 smart lighting modules in China from Aska Technology Ltd
-- Second pilot deployment of a retrofit smart metering solution in Brazil
-- MoU signed with global meter vendor El-Sewedy
-- MoUs signed with Ecolibrium Energy & Innologix to build out India partner eco-system
-- Teaming agreement signed with Gridsense Inc
-- Partnership agreement signed with Dinsmore and Associates
-- Award received from Frost & Sullivan for Technology Innovation Leadership
-- Presentation delivered at India Utility Regulators & Policymakers Retreat, 2014 in Goa
-- Placing completed to raise GBP3.5 million
John Cronin, Executive Chairman, commented:
"I am pleased to report that Cyan is now in the process of
deploying our smart metering and lighting solutions in India,
Brazil and China. The two orders we received in June and July for
smart metering deployments at Tata Power Mumbai and Essel Utilities
in India were quickly followed by a substantial smart lighting
order from China. Additionally Cyan has now deployed multiple
pilots in Brazil and opened up an additional emerging market
opportunity in South Africa.
"Having raised significant additional funding from shareholders
a few weeks ago, we are now very well positioned to exploit the
commercial opportunity for Cyan's solutions in emerging markets
across the globe and I look forward to delivering further positive
news to shareholders in due course."
Enquiries:
Cyan Holdings plc www.cyantechnology.com
------------------------------------------- -----------------------
John Cronin, Executive Chairman Tel: +44 (0) 1954
234 400
------------------------------------------- -----------------------
Allenby Capital Limited (Nominated Adviser Tel: +44 (0) 20
and Joint Broker) 3328 5656
Jeremy Porter / Chris Crawford
------------------------------------------- -----------------------
Hume Capital Securities plc (Joint Broker) Tel: +44 (0) 20
Jon Belliss 7101 7070
------------------------------------------- -----------------------
Walbrook PR (Analyst and Media Relations) cyan@walbrookpr.com
Paul Cornelius / Nick Rome Tel: +44(0) 20 7933
8780
------------------------------------------- -----------------------
CHAIRMAN'S STATEMENT
We believe the two recently announced commercial orders from end
customers Tata Power Mumbai and Essel Utilities clearly demonstrate
that Cyan offers one of the leading smart metering solutions in
India. These commercial orders, in addition to the pilots currently
being deployed by our partners in Brazil and the recent lighting
order from China, give me confidence that Cyan is clearly moving
from a status of development to one of commercialisation. This
marks a clear transition for our shareholders in terms of the risk
to reward ratio in investing in our Company. This was illustrated
by new and existing shareholders through their recent investment of
a further GBP3.5 million to enable us to fully exploit the
expanding commercial opportunities across the multiple emerging
markets that the Company now addresses.
Commercial Deployments
In the six week period to the end of July, Cyan announced orders
for the commercial deployment of the Company's technology for Tata
Power Mumbai and Essel Utilities in India and customers of Aska
Technology in China.
In particular, Cyan's technology was selected by Larsen &
Toubro ("L&T") for the deployment of its CyLec(R) Advanced
Metering Infrastructure ("AMI") solution for Tata Power Mumbai
("Tata Power"). Tata Power Group is India's largest integrated
power company with over 1.8 million customers and currently serving
over 500,000 retail customers in Mumbai. Tata Power spent the
previous 12 months evaluating the technology and Cyan subsequently
received an order, via the consortium lead L&T, to provide a
complete AMI solution. The initial contract with Tata Power is for
the deployment of 5,000 consumer meters in a district of Mumbai and
is currently planned to go live in the first half of 2015.
Furthermore, Cyan was selected by Aquameas Instrument Pvt. Ltd
("Aquameas") for the first deployment of Cyan's retrofit CyLec AMI
solution at Essel Utilities. Aquameas designs, manufactures and
supplies electricity meters as well as water meters and other
metering equipment and Essel Utilities operates multiple private
utility franchises, serving one million customers across India.
After the first meeting in February 2014 between Essel, Aquameas
and Cyan the customer rapidly moved to a decision to place an
initial order for a 5,000 unit CyLec AMI retrofit solution. The
5,000 retrofit modules are expected to be fitted to consumer meters
manufactured by Genus, Landis+Gyr, HPL and Larsen & Toubro,
with a planned live date of the first half of 2015.
Additionally, in April 2014, Cyan signed a master distribution
agreement with Aska Technology Limited ("Aska") to act as the
distributor of Cyan's CyLux lighting solutions in the China market
and provide first line support to end customers. This was followed
by a purchase order from Aska in July 2014. The order for 15,000
Cyan smart lighting control modules, in addition to Cyan's server
control software, is expected to be delivered before the end of the
current financial year. This order was in addition to previous
orders for 9,000 lighting control modules, making a planned
installation total of 24,000 intelligent street lights for multiple
end customers across locations in mainland China.
Given our global ambitions for the Company, we remain focused on
developing our commercial reach in China. In March 2014 we welcomed
the Chinese Minister, Counsellor Zhou, to our office in Cambridge
where we showcased our leading technology to a delegation from the
Chinese Embassy.
In August 2014, Cyan was also recognized by Frost and Sullivan
through their 2014 European award for Technology Innovation
Leadership in developing a smart metering technology for the power
sector in emerging economies.
Pilot Deployments
Cyan has now deployed a total of nine smart metering pilots in
India for both private and public utilities with an additional
three pilots currently in the planning stage. These pilots
represent a strong pipeline of commercial opportunities for Cyan in
the smart metering market across India.
Having signed a strategic partnership agreement in December 2013
with Nobre de la Torre ("Nobre") in Brazil, Nobre deployed pilots
at two Tier 1 utilities during the period. The first pilot was a
full AMI solution using the CyLec retrofit module. For the second
retrofit pilot, in order to provide a thorough evaluation of the
Nobre and Cyan technology in the field, the utility selected three
different locations, each with different deployment challenges for
smart metering technology.
Eco-system of Partners
During the period under review, Cyan has made substantial
progress in developing its eco-system of partners. These partners
will act as low-cost distribution channels for Cyan's solutions, as
well as offering complementary solutions that utility customers
typically seek in order to maximize their return on investment in
smart metering and smart lighting solutions.
In June 2014, Cyan signed a teaming agreement with Vodafone's
M2M team to develop joint propositions, scope new opportunities and
submit compelling value propositions to customers to enable both
parties to capture the smart metering opportunity in India.
Vodafone and Cyan will deliver a managed service portfolio of
solutions including Cyan's wireless mesh networking platform as a
cost-effective extension to Vodafone's network for high-volume and
low-value 'last mile' data communications to utility end customers.
Vodafone's M2M Global Data Services Platform and managed hosting
provide secure data communication and storage beyond the networked
devices.
Cyan has now qualified eight meter manufacturer partners in
India to provide private and public utility customers with a wide
choice of smart meter hardware as well as adding further eco-system
channel partners for Cyan-based smart metering solutions.
In August 2014, Cyan signed a non-exclusive partnership
agreement with Dinsmore & Associates ("D&A"), who will act
as a business development partner to identify opportunities for
Cyan's smart metering, smart lighting and M2M solutions across the
sub-Saharan African market. D&A will meet with potential
partners and resellers independently to present Cyan's technology
as well as assisting in the negotiation of commercial contracts
with any opportunities that are taken forward.
Memorandums of Understanding ("MoUs") have recently been signed
with global meter vendor El-Sewedy, Ecolibrium Energy, GridSense
and Innologix to further build out the Company's eco-system of
partners.
Whilst Cyan will continue to build out its eco-system of
partners, many of the building blocks are now in place resulting in
sufficient, diverse channels to market as well as offering our
utility customers complete end-to-end solutions.
Strengthening of the Board of Directors
Cyan's Board of Directors has been significantly strengthened
recently with the appointments of Harry Berry and Peter Mainz. Both
individuals are already making a positive impact at Cyan and we
expect their contributions and expertise to become more valuable
over the coming months as the commercial opportunity unfolds.
Harry has over 30 years' experience in the technology and
telecommunications industries and has held a wide range of senior
positions and responsibilities across the sales, change management
and product development functions of global companies. Harry was
responsible for the creation of BT Brightstar, a corporate
incubator focusing on BT's R&D portfolio to create technology
venturing. He is currently European Partner with New Venture
Partners, a global venture capital firm dedicated to corporate
technology spinouts with over $700 million under management.
Between 2006 and 2011, Harry was an independent director on the
Board of Subex Azure Limited (now Subex Limited), a leading global
provider of Business Support Systems, headquartered in Bangalore
(India) with operations in the UK, US, Singapore, Dubai and
Australia.
Peter was the CEO & President of global smart metering
leader Sensus USA Inc. and this is his first non-executive role
since stepping down. Sensus is a leader in the electricity, water
and gas smart metering markets with operations in 22 countries
across five continents. Under his tenure the company grew into a
leading technology provider to the global utility industry through
multiple technology acquisitions, resulting in one of the largest
installed Advanced Metering Infrastructure bases in the world. The
growth included being part of the winning consortium for the UK
smart metering rollout for the North of England and Scotland
announced in August 2013 to connect 16 million meters to 10 million
homes.
Financial Review
For the six months ended 30 June 2014 turnover was GBP65,510 (H1
2013: GBP51,512). The continued low level of revenue was in line
with management expectations due to the ongoing focus on developing
a broad pipeline of smart metering and smart lighting
opportunities. Cost control within the business remained a core
focus resulting in an operating loss similar to the prior period of
GBP1,273,333 (H1 2013: GBP1,300,060), despite further investment in
R&D as well as the expansion of Cyan operations in both India
and the UK.
On 25 July 2014, Cyan announced that it had raised GBP3,500,000,
before expenses, by way of an equity placing where a total of
1,000,000,000 ordinary shares were issued at a price of 0.35 pence
per share. In addition to this placing, 500,000,000 warrants were
issued with an exercise price of 0.60 pence per share and
17,000,000 warrants with an exercise price of 0.349 pence per
share. The 0.60 pence warrants have an exercise period of twelve
months from their approval date on 19 August 2014 at the Company's
General Meeting and the 0.349 pence warrants have an exercise
period of six months from the same date. Together the warrants
allow the potential for raising a further GBP3,059,000. Net cash at
the period end was GBP716,786 (H1 2013: GBP1,725,948), whereas net
cash as of 31 August 2014 was GBP3,304,503.
I would like to take this opportunity to welcome the new
shareholders and thank our existing shareholders for their
continued support.
Outlook
During the remainder of 2014 and throughout 2015, the Board
intends to further develop the commercial opportunity for the
Company through a combination of:
-- conversion of existing deployed metering pilots in India and Brazil into commercial orders
-- deployment of additional metering and lighting pilots in
India, Brazil, China and Sub-Saharan Africa
-- adding complementary eco-system partnerships in our chosen
emerging markets as well as the commercial exploitation of the
existing partnerships
-- expansion into additional emerging markets through local partners
-- additional partnerships and commercial opportunities as a
result of the teaming agreement signed with Vodafone
-- conversion of follow on orders from the initial projects with
both Tata Power and Essel Utilities
-- further investment in a world class management team
The numerous opportunities around the world for Cyan's
technology and solutions provide confidence that the Company will
deliver on customers' expectations of return on investment of their
smart metering and lighting projects and as a result create
significant shareholder value.
Myself, the other Board members and the Cyan management team
firmly believe that Cyan remains in a strong position to secure
revenues from a very large market.
John Cronin
Executive Chairman
29 September 2014
Consolidated Income Statement
Six months ended 30 June 2014
Unaudited
six months
ended Unaudited six Year ended
30 June months ended 31 December
2014 30 June 2013 2013
Notes GBP GBP GBP
Continuing operations
Revenue 65,510 51,512 137,996
Cost of sales (30,170) (34,619) (87,366)
Gross profit 35,340 16,893 50,630
Operating costs (1,308,673) (1,316,953) (2,843,939)
Provision for stock obsolescence - - (473,448)
Operating loss (1,273,333) (1,300,060) (3,266,757)
Investment revenue 1,856 2,311 4,437
Finance costs (112) (10) (10)
--------------------------- ------------ --------- ------------ -------------- -------------
Loss before tax (1,271,589) (1,297,759) (3,262,330)
Tax 140,000 102,000 270,135
Loss for the period (1,131,589) (1,195,759) (2,992,195)
Loss per share (pence)
Basic 3 (0.03) (0.05) (0.1)
Diluted 3 (0.03) (0.05) (0.1)
Consolidated Statement of Comprehensive Income
Six months ended 30 June 2014
Unaudited Unaudited
six months six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
GBP GBP GBP
Loss for period (1,131,589) (1,195,759) (2,992,195)
Exchange differences on translation
of foreign operations - (153,423) 65,075
-------------------------------------- ------------ ------------ -------------
Total comprehensive income for
the period (1,131,589) (1,349,182) (2,927,120)
-------------------------------------- ------------ ------------ -------------
Consolidated Balance Sheet
At 30 June 2014
Unaudited Unaudited 31 December
30 June 2014 30 June 2013 2013
GBP GBP GBP
Non-current assets
Property, plant and equipment 11,901 5,674 3,875
11,901 5,674 3,875
-------------- ------------- ------------------ -------------- ------------------------ --------------------
Current Assets
Inventories 593,967 1,080,431 583,200
Trade and other receivables 210,181 197,112 345,794
Cash and cash equivalents 716,786 1,725,948 1,636,149
---------------------------------------------- -------------- ------------------------ --------------------
1,520,934 3,003,491 2,565,143
-------------- ------------- ------------------ -------------- ------------------------ --------------------
Total assets 1,532,835 3,009,165 2,569,018
------------------------------- ------------- -------------- ------------------------ --------------------
Current liabilities
Trade and other
payables (318,630) (262,794) (298,441)
------------------------------- ------------- -------------- ------------------------ --------------------
Total liabilities (318,630) (262,794) (298,441)
------------------------------- ------------- -------------- ------------------------ --------------------
Net current assets 1,202,304 2,740,697 2,266,702
------------------------------- ------------- -------------- ------------------------ --------------------
Net assets 1,214,205 2,746,371 2,270,577
------------------------------- ------------- -------------- ------------------------ --------------------
Equity
Share capital 345,126 264,210 341,638
Share premium account 30,642,130 29,146,185 30,570,401
Own shares held (808,856) (808,856) (808,856)
Share option reserve 376,690 776,190 376,690
Translation reserve (149,742) (368,240) (149,742)
Retained loss (29,191,143) (26,263,118) (28,059,554)
---------------------------------------------- -------------- ------------------------ --------------------
Total equity being attributable
to owners of the Company 1,214,205 2,746,371 2,270,577
------------------------------------------ ----- -------------- ------------------------ --------------------
Consolidated statement of changes in equity
At 30 June 2014
Share
Share Own shares Option Translation Retained Total
Capital Share Premium held Reserve Reserve Losses Equity
GBP GBP GBP GBP GBP GBP GBP
Balance at 30
June 2013 264,210 29,146,185 (808,856) 776,190 (368,240) (26,263,118) 2,746,371
--------------- ------------------------------------------- -------------------------- ------------- ---------------- ------------- ------------
Loss for the
period - - - - - (1,796,436) (1,796,436)
Other
comprehensive
income for the
period - - - - 218,498 - 218,498
--------------- ------------------------------------------- -------------------------- ------------- ---------------- ------------- ------------
Total
comprehensive
income for the
period - - - - 218,498 (1,796,436) (1,577,938)
Issue of share
capital 77,428 1,424,216 - - - - 1,501,644
Debit to equity
for share
options - - - (399,500) - - (399,500)
--------------- ------------------------------------------- -------------------------- ------------- ---------------- ------------- ------------
Balance at 31
December 2013 341,638 30,570,401 (808,856) 376,690 (149,742) (28,059,554) 2,270,577
--------------- ------------------------------------------- -------------------------- ------------- ---------------- ------------- ------------
Loss for the
period - - - - - (1,131,589) (1,131,589)
Other
comprehensive
income for the
period - - - - - - -
--------------- ------------------------------------------- -------------------------- ------------- ---------------- ------------- ------------
Total
comprehensive
income for the
period - (1,131,589) (1,131,589)
Issue of share
capital 3,488 71,729 - - - - 75,217
Balance at 30
June 2014 345,126 30,642,130 (808,856) 376,690 (149,742) (29,191,143) 1,214,205
--------------- ------------------------------------------- -------------------------- ------------- ---------------- ------------- ------------
Consolidated Cash Flow Statement
Six months ended 30 June 2014
Notes Unaudited Unaudited Year ended
six months six months 31 December
ended ended 2013
30 June 30 June
2014 2013
-------------------------------------------- -------- ------------- ------------- --------------
GBP GBP GBP
-------------------------------------------- -------- ------------- ------------- --------------
Net cash outflow from operating activities 4 (985,310) (1,086,195) (3,001,981)
-------------------------------------------- -------- ------------- ------------- --------------
Investing activities
-------------------------------------------- -------- ------------- ------------- --------------
Interest received 1,856 2,311 4,437
-------------------------------------------- -------- ------------- ------------- --------------
Purchases of property, plant and
equipment (11,014) (2,854) (5,198)
-------------------------------------------- -------- ------------- ------------- --------------
Net cash used in investing activities (9,158) (543) (761)
-------------------------------------------- -------- ------------- ------------- --------------
Financing activities
-------------------------------------------- -------- ------------- ------------- --------------
Interest paid (112) (10) (10)
-------------------------------------------- -------- ------------- ------------- --------------
Proceeds on issue of shares 75,217 1,465,817 3,037,961
-------------------------------------------- -------- ------------- ------------- --------------
Share issue costs - (67,318) (137,818)
-------------------------------------------- -------- ------------- ------------- --------------
Net cash from financing activities 75,105 1,398,489 2,900,133
-------------------------------------------- -------- ------------- ------------- --------------
Net (decrease) / increase in cash
and cash equivalents (919,363) 311,751 (102,609)
-------------------------------------------- --------
Cash and cash equivalents at beginning
of period 1,636,149 1,618,574 1,618,574
-------------------------------------------- --------
Effect of foreign exchange rate changes - (204,377) 120,184
-------------------------------------------- -------- ------------- ------------- --------------
Cash and cash equivalents at end
of period 716,786 1,725,948 1,636,149
-------------------------------------------- -------- ============= ============= ==============
Notes to the Accounts
Six months ended 30 June 2014
1. Basis of preparation
The interim financial information has been prepared in
accordance with the IFRS accounting policies used in the statutory
financial statements for the year ended 31 December 2013.
These interim financial statements do not constitute statutory
financial statements within the meaning of section 435 of the
Companies Act 2006. Results for the six month periods ended 30 June
2014 and 30 June 2013 have not been audited. The results for the
year ended 31 December 2013 have been extracted from the statutory
financial statements of Cyan Holdings plc.
Statutory financial statements for the year ended 31 December
2013 are available on the Company's website www.cyantechnology.com
and have been filed with the Registrar of Companies. The Company's
auditor issued a report on those financial statements that was
unqualified and did not contain a statement under section 498(2) or
section 498(3) of the Companies Act 2006; however the auditor's
report was modified to emphasise the uncertainty around the
Company's ability to continue as a going concern.
2. Going Concern
Since the end of the period being reported, the Company has
raised a further GBP3.5 million (gross), with 0.6p warrants being
issued at the same time that could raise a further GBP3 million if
fully exercised. As a result of this, the Directors believe that
the Company will be able to meet their liabilities as they fall due
for at least 12 months, however they have highlighted the risks
that the company continues to face below.
The directors have recognised that the Group is trading
principally in three emerging country markets, namely India, Brazil
and China. These markets have an inherent level of uncertainty
associated with them and this may result in the predicted level of
sales not being achieved and/or the timing of orders being delayed,
as has been the case for the Group in the past. This may impact
both the Group's ability to generate positive cashflow and to raise
new finance should it be required in the future.
There is uncertainty as to whether or not the share price of the
Company will reach the level required for the 0.6p warrants issued
in August 2014 to be exercised before their expiration in August
2015.
The financial statements do not include the adjustments that
would result if the Company was unable to continue as a going
concern. In the event that the company ceased to be a going
concern, the adjustments would include writing down the carrying
value of assets, including stocks, to their recoverable amount and
providing for any further liabilities that might arise.
Notwithstanding the material uncertainties described above,
because of the additional funding raised in August 2014, the
directors have a reasonable expectation that the Company can
continue to meet their liabilities as they fall due, for a period
of at least 12 months from the date of approval of this report.
3. Loss per share
Basic and diluted loss per ordinary share has been calculated by
dividing the loss after taxation for the periods as shown in the
table below.
Unaudited Unaudited
six months six months
ended ended
30 June 30 June Year ended
2014 2013 31 December 2013
GBP GBP GBP
Losses (GBP) 1,131,589 1,195,759 2,992,195
Weighted average number
of shares 3,468,702,660 2,418,355,380 2,797,766,136
IAS33 "Earnings per share" requires presentation of diluted EPS when a company
could be called upon to issue shares that would decrease net profit or increase
net loss per share. For a loss making company with outstanding share options,
net loss per share would only be increased by the exercise of out of the
money options. Since it seems inappropriate to assume that option holders
would act irrationally and there are no other diluting future share issues,
diluted EPS equals basic EPS.
4. Reconciliation of operating loss to operating cash flows
Unaudited Unaudited
six months six months
ended ended Year ended
30 June 30 June 31 December
2014 2013 2013
GBP GBP GBP
Operating loss
for the period (1,273,333) (1,300,060) (3,266,757)
Adjustments for:
Depreciation of property, plant
and equipment 2,988 7,167 9,334
Share-based payment expense - - (399,500)
------------------------------------------------ ------------ ------------ -------------
Operating cash flows before movements
in working capital (1,270,345) (1,292,893) (3,656,923)
(Increase) / decrease in inventories (10,767) (56,190) 441,041
Decrease / (increase) in receivables 5,478 567 (12,773)
Increase / (decrease) in payables 20,189 24,978 (10,669)
----------------------------------------- --------- ------------ ------------ -------------
Cash reduced by operations (1,255,445) (1,323,538) (3,239,324)
Income taxes received 270,135 237,343 237,343
Net cash outflow from operating
activities (985,310) (1,086,195) (3,001,981)
----------------------------------------- --------- ------------ ------------ -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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