TIDMCYAN
RNS Number : 0117Y
CyanConnode Holdings PLC
04 September 2020
4 September 2020
CyanConnode Holdings plc
("CyanConnode" or "the Company")
Final Results for the Fifteen-Month Period Ended 31 March
2020
CyanConnode Holdings plc (AIM: CYAN), a world leader in
Narrowband Radio Frequency (RF) Smart Mesh Networks, announces its
audited results for the fifteen-month period ended 31 March
2020.
Financial and Operational Highlights
-- Revenue of GBP2.5 million achieved for the fifteen months to
March 2020 (2018 year: GBP4.5 million)
-- Orders received during the period totalled GBP6.8 million, including
o March 2020 - Follow-on order from Forth Corporation Public
Company for a Thai Utility bringing the total value of Thai orders
to more than GBP2.3 million
o January 2020 - GBP3.3 million order for 142,000 modules from
Genus Power Infrastructures Ltd ("Genus") secured by a Letter of
Credit ("LOC")
o December 2019 - GBP1.1 million order from JST Group for a Thai
Utility
o Follow-on orders from HM Power (April 2019), Larsen &
Toubro ("L&T") (February 2019) and Toshiba (July 2019) totaling
GBP1.3 million
-- GBP4.1 million of cash received from customers during the
fifteen-month period (2018: GBP2.6 million)
-- Launch of new Omnimesh Cellular products including Dual SIM
Cellular Network Interface Card and In Meter Gateway for improved
security and increased capacity
-- Chris Jones and Peter Tyler appointed as Non-Executive Directors in March 2019
-- Change of External Auditor to RSM UK Audit LLP
-- Change of financial year end to 31 March
Post Year End Highlights
-- Resumption of previously delayed INR 1 billion Indian
contract. Inspection, dispatch and cash received for first 20,000
units. Cash received for a further 20,000 units and Letter of
Credit secured for remaining deliveries
-- Commencement of rollout of recently announced projects in
India and Thailand following easing of COVID-19 lockdown, with more
than 30,000 modules delivered against these projects since period
end
-- Continued rollout of Sweden projects with 34,000 modules
delivered against these projects since period end
-- A further 5,000 modules delivered to Larsen & Toubro for legacy projects
-- GBP1.3 million cash received from customers since the period
end. Current cash balance at the same level as end of December 2019
(GBP1.1 million)
John Cronin, Executive Chairman of CyanConnode, commented:
"In 2019 we were disappointed not to achieve the Board's
expectations as a result of a delayed contract for the Indian
Utility, Jaipur Vidyut Vitran Nigam Ltd ("JVVNL") . The positive
news in the first half of 2020 is that this significant contract
has resumed and we are receiving cash payments for the rollout. We
are also encouraged to see demand for our products increasing.
"CyanConnode has adapted to working under COVID-19 conditions
and continues to remain on track with its current development
plans. Nevertheless, the Company has encountered challenging
circumstances in the markets in which it operates, which are
reflected in these historical figures.
"During 2020, as existing contracts started to roll out, the
Company began to utilise Letters of Credit to meet its working
capital requirements, thereby mitigating the need to raise further
funding. The Company is focused on delivering significant volumes
of its products to customers and we are pleased to report that we
are at an advanced stage of agreeing a significant contract for a
large number of units.
"I would like to thank all employees for their hard work and
commitment during this period, and all shareholders for their
continued support."
- Ends -
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Enquiries:
CyanConnode Holdings plc Tel: +44 (0) 1223 225
060
John Cronin, Executive Chairman www.cyanconnode.com
Arden Partners plc (Nomad and Broker) Tel: +44 (0) 20 7614
Paul Shackleton / Dan Gee-Summons (Corporate 5900
Finance)
Simon Johnson (Corporate Broking)
Yellow Jersey PR (Financial PR) Tel: +44 (0) 20 3004
9512
Sarah Hollins/ Annabel Atkins cyanconnode@yellowjerseypr.com
Chairman's Statement
Operational Review
India
15 months to 31 March 2020 saw delays to the tendering process
and to the rollout of existing contracts as a result of the Indian
General Elections. In particular the rollout of a substantial order
announced in September 2018 for the Indian Utility, Jaipur Vidyut
Vitran Nigam Ltd ("JVVNL"), was delayed for most of 2019 and into
2020. This delay, relating to two projects worth over INR 1 billion
in total, caused a significant shortfall in revenues for 2019. The
local government re-approved the project in June 2020, and the
roll-out is now progressing with cash being received from the
customer.
In February 2019, a follow-on order was received from Larsen
& Toubro ("L&T"), worth approximately GBP0.4 million. The
follow-on order relates to an order announced in May 2018, worth
GBP2.5 million, with the deployment of smart meters progressing
rapidly and already showing the benefits of the Omnimesh solution
to the utility. All the Omnimesh RF Modules ordered in the
follow-on order were delivered in H1 2019 and revenue recognised
during the period. The full contract is being rolled out over a
period of up to two years followed by a five-year support and
maintenance period. The utility now intends to add a further
350,000 units across 5 RAPDRP towns to this project due to the
benefits being provided by Omnimesh. It is expected these units
will be RF Mesh, and the tender is currently underway. Several
state-owned utilities and government agencies have visited the
project and intend to follow the same model for their respective
projects.
In April 2019, an order was received from a new partner, an
Indian state-owned Utility, for the deployment of 3,000 Omnimesh
Modules, which utilise a hybrid radio frequency ("RF") Smart Mesh
and Cellular communication network. All hardware was delivered, and
revenue recognised in H1 2019.
In July 2019, a follow-on order from Genus Power Infrastructures
Ltd ("Genus") was received for a further 4,050 smart metering units
for the deployment at Uttar Gujarat Vij Company Ltd ("UGVCL"). The
initial order of 23,000 Omnimesh RF Modules placed in July 2017,
was the first order from India for the IPv6-6LoWPAN based
technology, which was developed by Connode AB in Sweden, prior to
its acquisition by CyanConnode.
Further follow-on orders were received during the financial
year, including orders for the projects previously deployed at
Chamundeshwari Electricity Supply Corporation ("CESC"), Singareni
Collieries and Tata Power Mumbai, who recently placed an order to
extend the Annual Maintenance Contract relating to an order
received in 2014. These projects continue to perform well. A number
of other small orders have been received including from Larsen
& Toubro ("L&T") for CyanConnode' s legacy product taking
the total orders received by L&T for this product to over
50,000 to date, including the orders specifically for Tata Power
Mumbai in previous years.
In December 2019, a Letter of Intent ("LOI") for an order worth
GBP3.3 million was received from Genus Power Infrastructures Ltd
("Genus"). The formal purchase order was placed in January 2020 and
CyanConnode expects that revenue for 80% of the order will be
recognised by mid-2021. Payments will be secured by a Letter of
Credit.
Europe
In April 2019, a follow-on order worth GBP0.7 million was
received from HM Power ("HMP") for the smart metering of district
heating and power, which demonstrates the flexibility of
CyanConnode's standards-based Omnimesh products. The order also
included the new Omnimesh Long-Range RF Module that has a range of
up to 12km, which increases the resilience of the RF Smart Network
in rural areas. Delivery of the Omnimesh Long-Range RF Modules
commenced in Q4 2019 and will continue throughout 2020.
In July 2019, a follow-on Nordic order worth EUR489,000 was
received. The order was for legacy CyanConnode hardware and
software from an existing Partner and the end customer is a Nordic
Utility, who is expanding an existing smart metering deployment.
All revenue relating to this order was recognised in 2019 and all
cash has been received.
Additionally, a follow-on order from Toshiba worth approximately
GBP0.2 million for service enhancements relating to the UK Smart
Meter Implementation Program ("SMIP") was received in July 2019 and
revenue recognised in H2 2019. CyanConnode's RF technology is
embedded in the Toshiba SUK2 and SUK3 SMETS2 Communication Hubs
("RF Hubs"), which are installed when a meter is located in a spot
that does not have a reliable cellular signal (known by mobile
operators as "not-spots"). Toshiba Communications Hubs are being
deployed under the Telefónica contract with The Smart DCC Ltd
("DCC") for the Central and Southern regions.
During 2019, the UK Government announced that it had extended
the deadline for the rollout of SMETS2 meters by four years to
2024. The DCC aims to connect around 53 million smart gas and
electricity meters to its secure network using SMETS2 meters and,
in March 2020, it announced that 4.2 million (7.75% of the meter
population) had been connected. The rollout of SMETS2 meters
commenced in Q4 2018 and CyanConnode believes that, for ease of
rapid deployment, installers are initially targeting installations
of SMETS2 meters in densely populated areas that have a reliable
cellular signal. CyanConnode believes that the installation of RF
Hubs will gain momentum during later stages of the rollout.
Under its SMIP contract, CyanConnode calculates that 2.3 million
Toshiba RF Hubs will eventually connect to the DCC secure network,
and it is now beginning to see a small amount of revenue from those
connections. However, as CyanConnode's SMIP contract is still at a
relatively early stage, it is still not possible for the Company to
confirm whether its revenue forecasts from the SMIP contract are
accurate.
APAC and Middle East
The smart metering market in the APAC and Middle East continues
to mature and presents a significant opportunity for
CyanConnode.
In December 2018, CyanConnode announced a licensing agreement
with Beijing Jingybeifang Instrument Co. Ltd ("Beijing
Instruments"), providing it with the right to use CyanConnode's
reference designs to manufacture Omnimesh RF Modules and Gateways.
During 2019 the Group has been working closely with Beijing
Instruments on tenders that may require smart meters with Omnimesh
RF Modules and Gateways that are manufactured under the licence
agreement.
In December 2019, an order was received from its Agent and
Partner, JST Group (JST), which included 33,000 Omnimesh RF
Modules, worth approximately GBP1.13 million. The end customer is
Metropolitan Electricity Authority (MEA), a Thai state enterprise
under the Ministry of Interior. This order included an advance
payment of c. GBP0.3 million which was received in early January
2020. Approximately GBP0.16 million of revenue was recognised
during the period with the balance being deferred to the next
financial year. The purchase order relates to a smart metering
deployment which includes an Omnimesh Head End Server (HES). Under
the agreement, CyanConnode will supply hardware, HES and an Annual
Maintenance Contract (AMC). Deliverables for the integrated system,
as well as hardware deliveries, commenced in 2020. The AMC will
deliver a recurring revenue stream over an initial five-year
period.
In March 2020, a follow-on order from Thailand for 206,735
Omnimesh perpetual software licences was received. The follow-on
order was placed by Forth Corporation Public Company Limited
(Forth) with JST acting as CyanConnode's Agent. The order increases
the total value of orders received for MEA to more than $3 million.
Under the contract, a payment of approximately $206,000 was paid as
soon as the order was placed. The additional Omnimesh software
licences will allow MEA to connect up to 240,000 smart meters to
the Omnimesh Head End Server (HES), which will serve the Thai Smart
Metro Grid project. The order also includes an Annual Maintenance
Contract for the maintenance of the HES, providing a further
recurring revenue stream over an initial five-year period.
New Range of Omnimesh Products
During 2019 and into 2020, CyanConnode launched several exciting
Omnimesh products. Omnimesh is an open standards platform which is
currently being applied to the future-proofing of Advanced Metering
Infrastructure (AMI) communications for Utilities. Omnimesh has
offered market-leading RF Mesh Networks since its launch in June
2018. These new products include:
Omnimesh Long-Range RF Network Interface Card
The Omnimesh Long-Range RF Network Interface Card (LR-RFNIC) has
a range of up to 12km and is designed to provide point-to-point
communication in sparsely populated areas, providing resilient,
cost-effective, RF Mesh Network coverage beyond the mainly urban
rollouts deployed to date. The LR-RFNIC integrates into standard
smart meters and enables long-range communication to be deployed
alongside standard RF Mesh Networks built using the Omnimesh RF
Network Interface Card (RFNIC).
Omnimesh Metering of District Heating
Omnimesh Smart Metering of District Heating has been designed to
meter thermal energy consumption. District Heating is an
environmentally friendly method of heating homes, schools and
commercial premises from a central plant, which pumps heat to
individual premises.
Omnimesh Dual SIM Cellular Network Interface Card
The new Omnimesh Dual SIM Cellular Network Interface Card (CNIC)
delivers point-to-point Cellular connectivity and automatically
selects the best available Cellular network. The CNIC integrates
into standard smart meters, and enables Utilities to optimise their
AMI programmes by choosing the right mix of RF Mesh and Cellular
connectivity for their deployment environments and AMI
requirements. A single Omnimesh Head End Server (HES) can
simultaneously manage both CNIC and RF Mesh enabled smart meters.
This cost-effective approach enables Utilities to collect meter
data and control meters seamlessly through the integration of a
single Omnimesh HES into a Meter Data Management System (MDMS).
Omnimesh Integrated Gateway with Cellular and RF Mesh
Capability
The new Omnimesh Integrated Gateway (IGW) supports both Cellular
and RF Mesh connectivity and acts as a gateway to the Omnimesh HES
for a local population of smart meters. The IGW integrates into
standard smart meters, which offers several advantages including:
strengthened tamper-proofing, ease of integration, increased
deployment efficiency, reduced total cost of ownership, and
improved network coverage and resilience.
The new Omnimesh Cellular products deliver secure end-to-end
communication across both public and private carrier networks. To
meet a range of market requirements, the products are available in
all cellular regions and bands, and support all the 2G, 3G, 4G, and
emerging 5G standards, including NB-IoT and Cat-M1 IoT Cellular
technologies.
Board Changes
Harry Berry and Paul Ratcliff stepped down from the Board during
the period, and two new Non-Executive Directors, Chris Jones and
Peter Tyler, were appointed.
Change of Auditor and Year End
The Company announced in December 2019 that it was appointing
RSM UK Audit LLP as its External Auditor due to the length of
tenure of its previous External Auditor, Deloitte LLP. Deloitte
confirmed that there were no matters connected with it ceasing to
hold office which need to be brought to the attention of the
members or creditors of the Company, for the purposes of section
519 of the Companies Act 2006. As part of continued operational
efficiency and cost management, the Group also aligned its
financial year end with its Indian subsidiary, CyanConnode Private
Limited, to 31 March.
COVID-19 Update
In our interim results statement issued on 31 March 2020, we set
out how the Group had adapted following the global outbreak of
COVID-19 in early 2020. The Group has continued to work throughout
the lockdowns in the countries in which it is rolling out
contracts, and in which it operates, as well as adapting to a
remote way of working where necessary. As also announced in March
2020, the wellbeing of our staff is paramount and a full risk
assessment has been carried out in the Group's Headquarters to
ensure a safe working environment.
Outlook
In early 2020, the Indian Government stated a target of
replacing 250 million conventional electricity meters with pre-paid
smart meters within three years. Finance Minister Nirmala
Sitharaman has allocated Rs 22,000 crore (c. US$3 billion) for the
power and renewable sector in the Union Budget 2020 and has urged
state governments to implement smart meters in three years, which
would give the consumers the right to choose suppliers and the
rate. ([i])
https://economictimes.indiatimes.com/industry/energy/power/union-budget-rs-22000-crore-to-power-and-renewable-sector-consumers-to-get-choice-of-supplier/articleshow/73833750.cms
Since the end of the period, the Group has seen good progress on
contracts and opportunities in the Indian market despite the
COVID-19 lockdown. In June 2020, the Group announced that two
projects relating to an order won in September 2018 had received
the necessary approvals to resume. In addition, also in June 2020
CyanConnode announced that deployment of the order won in January
2020 had commenced. These two orders together are for approximately
570,000 modules and associated gateways, software and services and
worth over GBP15 million. Deployment of these projects is moving
forward in line with project requirements following some project
delays as a result of COVID-19. Most customers are now back at work
and fully operational.
Key focus will be on the delivery of these projects along with
the projects in Thailand and Sweden, which are also progressing as
expected, to convert these projects to revenue and cash.
Finally, I would like to thank all employees for their hard work
and commitment during this difficult time.
John Cronin
Executive Chairman
FINANCIAL REVIEW
The fifteen months to March 2020 presented challenges to the
Group as a result of restrictions put in place during the 2019
Indian elections, which caused delays both to the rollout of
existing contracts and also to the awarding of new contracts. In
addition, the final quarter of the period saw the outbreak of the
COVID-19 pandemic which has had an impact globally. Despite these
difficulties, the Group has adapted its working practices and is
managing its cash and costs accordingly, and expects to meet its
obligations as and when they fall due.
A summary of the key financial results for the fifteen-month
period, and details relating to its financing position at period
end are set out in the table below and discussed in this
section.
Mar 2020 Dec 2018 Dec 2017 Dec 2016
GBP'000 GBP'000 GBP'000 GBP'000
======== ======== ======== ========
Revenue 2,451 4,465 1,171 1,823
======== ======== ======== ========
R&D expenditure (including staff costs) 2,381 2,466 4,148 2,913
======== ======== ======== ========
Operating loss (6,230) (6,320) (11,153) (7,939)
======== ======== ======== ========
Depreciation and amortisation 773 472 489 256
======== ======== ======== ========
LBITDA (5,457) (5,848) (10,664) (7,683)
======== ======== ======== ========
Stock impairment 4 578 55 96
======== ======== ======== ========
Share-based compensation 267 445 689 2
======== ======== ======== ========
Acquisition - related costs - - - 1,564
======== ======== ======== ========
Foreign exchange losses 267 16 52 48
======== ======== ======== ========
Adjusted LBITDA ([1]) (4,919) (4,809) (9,868) (5,973)
======== ======== ======== ========
Cash and cash equivalents 1,172 4,564 5,394 3,893
======== ======== ======== ========
Average monthly operating cash outflow (245) (487) (808) (588)
======== ======== ======== ========
Mar 2020 Dec 2018 Dec 2017 Dec 2016
FTE ([2]) FTE FTE FTE
Average employee headcount 50 52 44 31
========== ======== ======== ========
Year-end headcount 48 61 52 31
========== ======== ======== ========
Included within the table above are two alternative performance
measures ("APMs"): LBITDA and adjusted LBITDA. These are additional
measures which are not required under IFRS. These measures are
consistent with those used internally and are considered important
to understanding the financial performance and the financial health
of the Group.
LBITDA (Loss before Interest, Tax, Depreciation and
Amortisation) is a measure of cash generated by operations before
changes in working capital. Adjusted LBITDA is a measure of cash
generated by operations before changes in working capital and after
other items have been adjusted for as set out in the table above.
It is used to achieve consistency and comparability between
reporting periods.
Notably from the table on the previous page:
-- Revenue for the 15 months to March 2020 was GBP2 million
lower than the 12 months to December 2018
-- Operating loss for the 15 months to March 2020 was GBP0.1
million lower than for the previous 12-month period
-- Cash at the end of March 2020 was GBP3.4 million lower than the end of December 2018
-- Depreciation increased due to the implementation of IFRS16
-- Share-based compensation charges reflect the fair value of
share options granted to employees over the vesting period of these
options.
Financial items of note during the period other than those set
out above were:
-- No cash has been raised from shareholders since October 2018
-- Cash received from customers during the fifteen-month period was GBP4.1 million
-- Trade and other receivables reduced by GBP1.2 million to GBP3.7 million at period end
-- R&D tax credit at a similar level to 2018 (GBP0.8
million) however for a fifteen-month period against a one-year
period due to reduced R&D costs during the period
-- The implementation of IFRS 16 - Leases
-- Change of auditor from Deloitte LLP to RSM UK Audit LLP
-- Change of financial year end from 31 December to 31 March
During the period an advance against the R&D tax credit was
received. This will be repaid out of the R&D tax credit funds
when received from HMRC. In addition, letters of credit, invoice
discounting and advance payments have been negotiated on recently
won contracts to help with working capital requirements.
Key Performance Indicators (KPIs)
The financial key performance indicators for the Group are as
set out in the key financial results table above. FY2020 revenues
were 45% down on 2018 comparatives as a result of delays to
contracts due to the Indian elections. Operating costs for the
fifteen-month period reduced by 16% against twelve months for 2018,
LBITDA by 7%, while adjusted LBITDA increased by 2% due to lower
share-based compensation charges and stock provisions. The Group's
average headcount reduced by 2.
The Group's long-term strategy is to deliver shareholder returns
by generating revenue and moving into profitability. We seek to do
this by focusing our investment on emerging but fast-growing
markets where we believe we can reach a market leading position
with our technology. Management use KPIs to track business
performance, to understand general trends and to consider whether
we are meeting our strategic objectives. As we grow, we intend to
review these KPIs and adapt them as appropriate, in response to how
our business and strategy evolves.
The Group's key focus for the financial year ending March 2021,
continues to be streamlining its processes from order to delivery
and continuing to close further orders. A further focus will be
ensuring collection of cash from customers as Group revenues
continue to grow. A number of avenues continue to be pursued to
secure working capital facilities to help ease cash flows and
mitigate against any unforeseen delays in deliveries or customer
payments.
Going concern
To assess the ability of CyanConnode Holdings plc ("Group") to
continue as a going concern, the directors have prepared a business
plan and cash flow forecast for the period to 31 March 2022 which,
together, represent the directors' best estimate of the future
development of the Group. The forecast contains certain
assumptions, the most significant of which are the level and timing
of sales and the timing of customer payments. These detailed
cashflow scenarios include Letters of Credit which have been
secured from customers against contracts recently won.
At 31 March 2020 the Group had cash reserves of GBP1.2 million
(2018: GBP4.6m) and based on detailed cash flows provided to the
Board within the FY2021/22 budget, there is sufficient cash to see
the Group through to profitability based on its standard operating
model. If a more pessimistic scenario were taken and an assumption
were taken that no cash is received within the next twelve months
from any new orders not currently contracted, and that there were
significant delays to receipts from customers, there is a material
uncertainty relating to the Group's ability to continue as a going
concern. Should the Group experience such downside sensitivities
the directors would first continue to look at measures such as cost
reduction and working capital facilities as ways to conserve cash
within the business. The Company has offers for convertible and
secured loans which it could accept should such a requirement
arise.
In addition, during 2020 the COVID-19 pandemic has affected the
global economy and businesses around the world, particularly during
the lockdowns in each country. At the time of writing this report,
the effects continue to be seen.
To assist with working capital, the Group received an advance of
GBP560,000 against its R&D tax credit in February 2020. This
amount will be repaid out of the HMRC receipt which is expected to
be received by October 2020.
Notwithstanding the material uncertainties described above, on
the basis of sensitivities applied to the cash flow forecast, the
directors have a reasonable expectation that the company can
continue to meet its liabilities as they fall due, for a period of
at least 12 months from the date of approval of this report.
Dividends
The directors do not recommend the payment of a dividend (2018:
GBPnil). The Group has no plans to adopt a dividend policy in the
immediate future and all funds generated by the Group will be
invested in the further development of the business, as is normal
for its industry sector and stage of its development.
Heather Peacock
Chief Financial Officer
CyanConnode Holdings plc
Consolidated income statement
For the 15-month period ended 31 March 2020
15 months Year
31 Mar 31 Dec
Note 2020 2018
GBP'000 GBP'000
----- ----------- --------
Continuing operations
----- ----------- --------
Revenue 2,451 4,465
----- ----------- --------
Cost of sales (1,081) (1,724)
----- ----------- --------
Gross profit 1,370 2,741
----- ----------- --------
Other operating costs (6,827) (8,589)
----- ----------- --------
Amortisation and depreciation (773) (472)
----- ----------- --------
Total operating costs (7,600) (9,061)
-----
Operating loss (6,230) (6,320)
-----
Investment income 17 13
-----
Finance costs (30) (2)
----- ----------- --------
Loss before tax (6,243) (6,309)
----- ----------- --------
Tax 576 927
----- ----------- --------
Loss for the year (5,667) (5,382)
----- =========== ========
Loss per share (pence)
-----
Basic 2 (3.27) (4.60)
----- =========== ========
Diluted 2 (3.27) (4.60)
----- =========== ========
CyanConnode Holdings plc
Consolidated Statement of Comprehensive Income
For the fifteen-month period ended 31 March 2020
Derived from continuing operations and attributable to the
equity owners of the Company.
15 months Year
31 Mar 31 Dec
2020 2018
GBP'000 GBP'000
---------- ----------
Loss for the period (5,667) (5,382)
---------- ----------
Exchange differences on translation of
foreign operations 56 54
---------- ----------
Total comprehensive income for the year (5,611) (5,328)
========== ==========
CyanConnode Holdings plc
Consolidated statement of financial position
As at 31 March 2020
Note 31 Mar 2020 31 Dec
GBP'000 2018
GBP'000
Non-current assets
Intangible assets 4,558 5,048
----------------------------------------
Goodwill 1,930 1,930
----------------------------------------
Investments 93 44
-----
Property, plant and equipment 43 73
-----
Right of use asset 274 -
----- ------------ ---------
6,898 7,095
----- ------------ ---------
Current assets
----- ------------ ---------
Inventories 308 319
----- ------------ ---------
Trade and other receivables 3,676 4,827
----- ------------ ---------
Cash and cash equivalents 1,172 4,564
----- ------------ ---------
5,156 9,710
----- ------------ ---------
Total assets 12,054 16,805
----- ============ =========
Current liabilities
----- ------------ ---------
Trade and other payables (1,491) (1,994)
----- ------------ ---------
Short-term borrowings (560) -
----- ------------ ---------
Lease liabilities (121) -
----- ------------ ---------
Total current liabilities (2,172) (1,994)
----- ------------
Net current assets 2,984 7,716
-----
Non-current liabilities
-----
Lease liability (153) -
-----
Deferred tax liability (912) (690)
----- ------------ ---------
Total non-current liabilities (1,065) (690)
-----
Total liabilities (3,237) (2,684)
-----
Net assets 8,817 14,121
----- ============ =========
Equity
----- ------------ ---------
Share capital 3 3,656 3,648
----- ------------ ---------
Share premium account 69,547 69,515
----- ------------ ---------
Own shares held (3,253) (3,253)
----- ------------ ---------
Share option reserve 2,028 1,761
----- ------------ ---------
Translation reserve (20) (76)
----- ------------ ---------
Retained losses (63,141) (57,474)
----- ------------ ---------
Total equity being equity attributable
to owners of the Company 8,817 14,121
----- ============ =========
CyanConnode Holdings plc
C onsolidated Statement of Changes in Equity
For the 15-month period ended 31 March 2020
Share
Share Own shares Option Translation Retained Total
Capital Share Premium held Reserve Reserve Losses Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December
2017 2,559 65,565 (3,253) 1,316 (130) (52,092) 13,965
--------- -------------- -------------- --------- ------------ --------- --------
Loss for the year - - - - - (5,382) (5,382)
Other comprehensive income
for the year - - - - 54 - 54
--------- -------------- -------------- --------- ------------ --------- --------
Total comprehensive income
for the year - - - - 54 (5,382) (5,328)
Issue of share capital 1,089 3,950 - - - - 5,039
Credit to equity for
share options - - - 445 - - 445
--------- -------------- -------------- --------- ------------ --------- --------
Total transactions with
owners 1,089 3,950 - 445 - - 5,484
--------- -------------- -------------- --------- ------------ --------- --------
Balance at 31 December
2018 3,648 69,515 (3,253) 1,761 (76) (57,474) 14,121
Loss for the period - - - - - (5,667) (5,667)
Other comprehensive income
for the period - - - - 56 - 56
Total comprehensive income
for the period - - - - 56 (5,667) (5,611)
Issue of share capital 8 32 - - - - 40
Credit to equity for
share options - - - 267 - - 267
--------- -------------- -------------- --------- ------------ --------- --------
Total transactions with
owners 8 32 - 267 - - 307
--------- -------------- -------------- --------- ------------ --------- --------
Balance at 31 March 2020 3,656 69,547 (3,253) 2,028 (20) (63,141) 8,817
--------- -------------- -------------- --------- ------------ --------- --------
CyanConnode Holdings plc
C onsolidated cash flow statement
For the 15-month period ended 31 March 2020
15 months Year
Notes 31 Mar 31 Dec
2020 2018
GBP'000 GBP'000
-------- ---------- --------
Net cash outflow from operating
activities 4 (3,677) (5,843)
-------- ---------- --------
Investing activities
-------- ---------- --------
Interest received 17 13
-------- ---------- --------
Purchases of property, plant and
equipment (20) (41)
-------- ---------- --------
Capitalisation of research and (36) -
development costs
-------- ---------- --------
(Purchase) / disposal of investments (49) 4
-------- ---------- --------
Net cash used in investing activities (88) (24)
-------- ---------- --------
Financing activities
-------- ---------- --------
Interest paid (4) (2)
-------- ---------- --------
Cash inflow from borrowing 560 -
-------- ---------- --------
Capital repayments of lease liabilities (197) -
-------- ---------- --------
Interest paid on lease liabilities (26) -
-------- ---------- --------
Proceeds on issue of shares 40 5,467
-------- ---------- --------
Share issue costs - (428)
-------- ---------- --------
Net cash from financing activities 373 5,037
-------- ---------- --------
Net decrease in cash and cash equivalents (3,392) (830)
--------
Cash and cash equivalents at beginning
of period 4,564 5,394
--------
Cash and cash equivalents at end
of period 1,172 4,564
-------- ========== ========
Notes to the Financial Statements
For the fifteen-month period ended 31 March 2020
1. General information
CyanConnode Holdings plc, (Company Registered No. 04554942), is
a company limited by shares, incorporated in the United Kingdom
under the Companies Act 2006. The address of the registered office
is Merlin Place, Milton Road, Cambridge CB4 0DP.
The final results announcement is based on the financial
statements which have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union. The financial information has been prepared in
accordance with the accounting policies used in the statutory
financial statements for the year ended 31 December 2018, with the
exception to the adoption of IFRS 16 "Leases". The Group has used
the modified retrospective transition approach on adoption of IFRS
16 Leases, where the initial right of use asset values recognised
on property leases of GBP471,000 are equal to the present value of
the future lease payments of GBP471,000 as at the date of
transition (1 January 2019).
The financial information set out in the announcement does not
constitute the company's statutory accounts for the periods ended
31 December 2018 or 31 March 2020 within the meaning of section 434
of the Companies Act 2006 but is derived from those audited
financial statements . The auditor's report on the consolidated
financial statements for the year ended 31 December 2018 and the 15
month period ended 31 March 2020 is unqualified, does not contain
statements under s498(2) or (3) of the Companies Act 2006 but
referred to a material uncertainty regarding the Group's ability to
continue as a going concern.
Going concern
To assess the ability of CyanConnode Holdings plc ("Group") to
continue as a going concern, the directors have prepared a business
plan and cash flow forecast for the period to 31 March 2022 which,
together, represent the directors' best estimate of the future
development of the Group. The forecast contains certain
assumptions, the most significant of which are the level and timing
of sales and the timing of customer payments. These detailed
cashflow scenarios include Letters of Credit which have been
secured from customers against contracts recently won.
At 31 March 2020 the Group had cash reserves of GBP1.2 million
(2018: GBP4.6m) and based on detailed cash flows provided to the
Board within the FY2021/22 budget, there is sufficient cash to see
the Group through to profitability based on its standard operating
model. If a more pessimistic scenario were taken and an assumption
were taken that no cash is received within the next twelve months
from any new orders not currently contracted, and that there were
significant delays to receipts from customers, there is a material
uncertainty relating to the Group's ability to continue as a going
concern. Should the Group experience such downside sensitivities
the directors would first continue to look at measures such as cost
reduction and working capital facilities as ways to conserve cash
within the business. The Company has offers of convertible and
secured loans which it could accept should such a requirement
arise.
In addition, during 2020 the COVID-19 pandemic has affected the
global economy and businesses around the world, particularly during
the lockdowns in each country. At the time of writing this report,
the effects continue to be seen.
To assist with working capital, the Group received an advance of
GBP560,000 against its R&D tax credit in February 2020. This
amount will be repaid out of the HMRC receipt which is expected to
be received by October 2020.
Notwithstanding the material uncertainties described above, on
the basis of sensitivities applied to the cash flow forecast, the
directors have a reasonable expectation that the company can
continue to meet its liabilities as they fall due, for a period of
at least 12 months from the date of approval of this report.
The 2020 statutory financial statements were approved by the
Board of Directors on 3 September 2020 and will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting.
2. Loss per share
The calculation of the basic and diluted loss per share is based
on the following data:
2020 2018
GBP'000 GBP'000
Loss for the purposes of basic loss per share
being net loss attributable to equity holders
of the parent
(5,667) (5,382)
======== ==========
Number of shares
2020 2018
No. No.
Weighted average number of ordinary
shares for the purposes of basic and
diluted loss per share (including own
shares held) 173,047,934 116,975,780
============ ============
The weighted average number of shares and the loss for the year
for the purposes of calculating diluted loss per share are the same
as for the basic loss per share calculation. This is because the
outstanding share options would have the effect of reducing the
loss per share and would not, therefore, be dilutive under the
terms of IAS 33.
3. Share capital
2020 2018
GBP'000 GBP'000
Issued and fully paid:
182,798,523 ordinary shares of 2.0 pence
each
(2018: 182,398,523 ordinary shares of
2.0 pence each) 3,656 3,648
======== ========
4. Reconciliation of operating loss to net cash outflow from operating activities
2020 2018
GBP'000 GBP'000
-------- --------
Operating loss for the period (6,230) (6,320)
-------- --------
Adjustments for:
-------- --------
Depreciation of property, plant and equipment 247 51
-------- --------
Amortisation of intangible assets 526 421
-------- --------
Foreign exchange 59 55
-------- --------
Share-based payment expense 267 445
-------- --------
Operating cash flows before movements in
working capital (5,131) (5,348)
-------- --------
Decrease in inventories 11 809
-------- --------
Decrease / (increase) in receivables 1,124 (2,377)
Decrease in payables (503) (253)
-------- --------
Cash reduction from operating activities (4,499) (7,169)
-------- --------
Income taxes received 822 1,326
Net cash outflow from operating activities (3,677) (5,843)
-------- --------
Cash and cash equivalents (which are presented as a single class
of assets on the face of the balance sheet) comprise cash at bank
and other short-term highly liquid investments with maturity of
three months or less.
5. Annual Report and Accounts and Notice of Annual General Meeting
The Notice of AGM and Proxy Form will be sent to shareholders on
4 September 2020 and made available on the Company's website
shortly thereafter. The full colour Annual Report and accounts will
be sent to shareholders by 8 September 2020 and made available on
the Company's website shortly thereafter. The AGM will be held on
30 September 2020 at 4.00 p.m. at the Company's Registered office
at Merlin Place, Milton Road, Cambridge, CB4 0DP. In light of the
COVID-19 pandemic and the United Kingdom's measures to restrict
travel and public gatherings currently in force, please note that
it will not be possible to hold the Company's 2020 Annual General
Meeting in its usual format and that, in particular, physical
attendance in person by shareholders of the Company will not be
possible. Further information regarding the meeting and voting,
which is recommended to be by proxy, will be included in the Notice
of the AGM.
[1] Where Adjusted LBITDA is LBITDA after stock impairment,
share-based compensation, acquisition-related costs and foreign
exchange losses
[2] Where FTE is the number of full-time equivalents
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END
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