TIDMDCTA
RNS Number : 0319S
Directa Plus PLC
28 September 2017
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations
28 September 2017
Directa Plus plc
("Directa Plus" or the "Company")
Interim Results
Strong progress in customer engagement and applications
development, and enhanced production capacity
Directa Plus (AIM: DCTA), a producer and supplier of
graphene-based products for use in consumer and industrial markets,
is pleased to provide an update on its commercialisation and
development activities, and financial results, for the six months
ended 30 June 2017.
Commercialisation activities
Textiles
-- Entered into a Joint Development Agreement ("JDA") with
Alfredo Grassi S.p.A. ("Grassi"), a leading manufacturer of
customised protective clothing, workwear and uniforms, to bring to
market a range of technical textiles and garments leveraging the
unique properties of Graphene Plus ("G+")
-- Colmar, a high end sportswear company, launched expanded
collection of 16 garments incorporating G+
-- Progressed the development with Eurojersey S.p.A. of their
first range of G+ enhanced textiles for their leading Sensitive(R)
Fabrics brand under a JDA signed during the period
-- JDA signed with a leading global product design and sports performance brand
Environmental
-- Eni S.p.A. ("Eni"), one of the world's largest oil and gas
companies, and the Company jointly presented to the 6(th)
International Conference on Environmental Chemistry and
Engineering, confirming the unique oil adsorption capability of the
Company's Grafysorber(R)
-- Delivered Grafysorber(R) for oil decontamination activities
in Nigeria in collaboration with Eni
-- Discussions advanced for the rental/sale of Mobile Production
Units ("MPU") for Grafysorber(R) in Europe, Africa and the Middle
East
-- Progressed discussions for the decontamination of produced
water with major international oil and gas companies
Composites
-- Received first order for two different grades of G+ from a
leading global manufacturer of brake pads with which the Company
has a JDA
-- Luxottica Group S.p.A., a global leader in fashion, luxury
and sports eyewear, launched their first Ray-Ban collection
enhanced by G+ that was developed under a JDA signed in 2015
Elastomers
-- Parker, a leading company in rubber-based applications,
continued to test G+ materials that have been further developed for
a wide range of potential applications
Post period-end highlights
-- Appointed Luca Provolo, a former senior executive at W.L. Gore & Associates, the producer of technologically-advanced fabrics such as GORE-TEX(R) and Windstopper(R), as Head of Sales with a primary focus on textiles
-- JDA signed with a global leader in branded lifestyle apparel, footwear and accessories
-- Commercial progress with Grassi already achieved, which, as
also announced today, has been awarded a contract to deliver highly
performant uniforms to an Italian state-owned company and Directa
Plus has received its first order for G+ from Grassi for inclusion
in the workwear
-- Signed an agreement with OMV Petrom, a leading Romanian
integrated oil and gas company, for field testing Grafysorber(R)
for treating oil-contaminated water
-- Received an order for G+ from Vittoria and expects to
receive, in November 2017, further orders for 2018
Development activities
-- Launched Advanced Development Area ("ADA") to enable the
Company to work more closely with its key customers, reduce
time-to-market and to certify production
-- Launched 'G+ Certified Experience' logo, available to
selected partners to confirm the advertised performance benefits of
products enhanced by G+
-- Continuous improvement programme expected to deliver further production and capacity benefits
-- Agreement signed with the IIT (Istituto Italiano di
Tecnologia), a major Italian research centre, to develop the next
generation of Grafysorber(R)
-- Post period end, the Company received a grant from the
European Regional Development Fund in respect of a EUR6.5 million
project to develop innovative asphalts and bitumen based on G+
Key performance indicators and financial summary
H1 2017 H1 2016
---------------------------- -------- ---------
Revenue from product sales EUR0.3m EUR0.4m
---------------------------- -------- ---------
Adjusted loss after tax* EUR2.0m EUR2.3m
---------------------------- -------- ---------
Cash and cash equivalents EUR8.2m EUR13.1m
---------------------------- -------- ---------
Number of active customers 20 11
---------------------------- -------- ---------
Total number of patents 15 14
---------------------------- -------- ---------
-- Revenue from product sales of EUR0.3 million (H1 2016: EUR0.4 million)
-- Loss after tax for the period was EUR2.1 million (H1 2016: EUR3.8 million loss)
-- Adjusted loss after tax* for the period was EUR2.0 million (H1 2016: EUR2.3 million loss)
-- EBITDA* loss for the period was EUR1.7 million (H1 2016: EUR1.5 million loss)
-- Adjusted EBITDA loss* for the period was EUR1.6 million (H1 2016: EUR1.1 million)
-- Cash and cash equivalents at period end of EUR8.2 million (31 December 2016: EUR10.6 million)
* Details about loss after tax and EBITDA adjustments in H1 2017
and H1 2016 are provided in the Financial Review section below.
Giulio Cesareo, Chief Executive Officer of Directa Plus, said:
"During the first six months of 2017, we have built strongly on the
foundations we established last year. We have continued to deepen
our engagement with existing and potential customers, particularly
through the launch of our Advanced Development Area and our proven
ability to produce consistent G+ materials at scale. Our greater
market knowledge is serving us well and more customers have
launched further end-products incorporating G+. We have entered
into strategic JDAs with some of the world's largest companies and
are particularly pleased with the growing momentum within the
business. This is a strong vindication of the strength of our offer
and the disruptive benefits of G+. As a result of the commercial
progress made during the first half, we anticipate a much stronger
second half of the year, where we expect to report more than double
the revenues achieved in the first half of the year. However, the
Company is taking a prudent approach regarding the timing of
concluding certain sales in the textile and environmental segments
and therefore expect this will have a consequential impact on
expectations for the full year.
"We believe we are at the forefront of the developing graphene
market and as more customers prepare to launch products
incorporating G+, we remain confident of delivering sustained
growth from 2018. The opportunities for G+ remain substantial and
the Board continues to look to the future with optimism."
Enquiries
Directa Plus plc
--------------------------------------- ----------------
Giulio Cesareo, CEO
Marco Ferrari, CFO +39 02 36714458
--------------------------------------- ----------------
Cantor Fitzgerald Europe (Nominated
Adviser and Broker)
--------------------------------------- ----------------
Marc Milmo, David Foreman, Callum
Butterfield (Corporate Finance) +44 20 7894
Mark Westcott (Sales) 7000
--------------------------------------- ----------------
Luther Pendragon (Financial PR)
--------------------------------------- ----------------
Harry Chathli, Claire Norbury, Alexis +44 20 7618
Gore 9100
--------------------------------------- ----------------
Operating Review
During the first six months of 2017, Directa Plus built on the
foundations that it had established in the prior year of improved
development and engineering capability, and much greater market
knowledge of what the end customer requires from G+. The Company
strengthened its relationships with existing and potential
customers to enable it to provide more comprehensive solutions -
which has been facilitated by the launch during the period of its
Advanced Development Area. The Company also continued to improve
its production processes and product development. This included
signing an agreement with the IIT (Istituto Italiano di
Tecnologia), a major Italian research centre, to develop the second
generation of Grafysorber(R) for water treatment applications.
Commercial progress
The momentum in commercial progress achieved during the prior
year was sustained into 2017 with more customers launching further
end-products incorporating the Company's graphene-based products
and the Company entering into new strategic JDAs. These customers
and potential customers are some of the world's largest companies
operating in Directa Plus' key target markets. In addition, Directa
Plus has worked extensively with its customers to develop more
comprehensive solutions to support them in adjusting their
production processes to better incorporate the Company's
graphene-based products.
Textile
By incorporating G+ products within fabrics and textiles,
end-users can benefit from the thermal and electrical conductivity
and bacteriostatic properties of G+, such as thermal regulation,
heat dissipation, energy harvesting, data transmission and no odour
effect. The Company offers two key textile products: printed G+
planar thermal circuit and G+ membrane. Directa Plus' strategy for
the textile industry includes:
-- Engaging with an increasing number of companies in different
textile segments to broaden the promotion of existing and proven G+
products across the textile markets
-- Developing the in-house sales team leveraging existing products and knowledge
-- Sustaining the development of the ingredient branding
strategy in order to offer a performance certification to final
users, which also increases G+ brand awareness
-- Establishing a global footprint as a leader in graphene products for the textile industry
In the first half of 2017, graphene sales into the textiles
segment increased to EUR0.21 million compared with EUR0.03 million
in H1 2016 and Directa Plus is confident that, through its
developing customer base in this area, the textiles segment will be
a key driver of the Company's growth.
Directa Textile Solutions
During the first half of 2017, the Company continued to gain
traction with Directa Textile Solutions ("DTS") following its
launch in November 2016. DTS markets a complete range of
graphene-based technical and high-performance membranes, and
enables the Company to move further up the value chain and be
positioned closer to commercial brands. In particular, the Company
has gained greater access to new markets such as technical
textiles. The orders received to date are already more than double
the value of the Company's initial investment in DTS and the
Company is pleased with the progress being made.
Alfredo Grassi
The Company entered into a JDA with Alfredo Grassi S.p.A., a
leading manufacturer of customised protective clothing, workwear
and uniforms for private and public organisations globally. This
followed detailed testing of Directa Plus' graphene by Grassi to
assess the potential benefits that could be delivered by
incorporating the Company's graphene into their products. Under the
terms of the JDA, the companies will seek to market a range of
technical textiles and garments containing Directa Plus'
graphene-based products to the customers of Grassi, with the
initial focus being on garments with linings printed with G+
combined with waterproof, breathable textiles.
The Company and Grassi believe that there is a very real market
opportunity to enhance Grassi's industry garments and branded
corporate wear. Through the JDA, Grassi and Directa Plus have
already developed a range of workwear clothing featuring G+ that
has been marketed to Grassi's clients. Following a competitive
tender process, Grassi has been awarded the contract to provide an
Italian state-owned company with G+ enhanced clothing for their
employees. As a result, as also announced today, Directa Plus has
received its first order for G+ from Grassi for inclusion in the
workwear being provided under this contract. The Company is
delighted at the success of this first tender with Grassi. With
Grassi having a leading market position in the provision of
workwear and customised uniforms across a range of sector verticals
(including law enforcement, fire and safety and the military),
Directa Plus is excited about the opportunities that this
relationship with Grassi could yield for the Company.
Colmar
During the period, Colmar, the high-end sportswear company,
launched a second collection of 16 garments incorporating G+
materials. One of the new jackets, the Technologic G+, was selected
as a Gold Winner in the 'Ski' category at ISPO Munich, an
international multi-segment exhibition for sports businesses,
which, each year, honours exceptional sporting goods.
Eurojersey
Eurojersey S.p.A., part of the Carvico group, a producer of high
quality warp-knit technical fabrics, unveiled a number of prototype
graphene-enhanced textiles developed in collaboration with the
Company following the signing of a JDA in January 2017. The
companies are now working on the first range of graphene-enhanced
textiles to be marketed under Eurojersey's leading Sensitive(R)
brand and targeting the sportswear, leisure and underwear sectors.
Significant Eurojersey customers include Lululemon, Victoria's
Secret, Rapha and GAP.
Other
In addition to Grassi, the Company signed a JDA with a leading
global product design and sport performance brand and, post period
end, the Company signed a JDA with a global leader in branded
lifestyle apparel, footwear and accessories. These companies
greatly value G+ materials for their non-toxicity and this is a
proven and major competitive advantage for Directa Plus.
During the period, Directa Plus was awarded a grant by the
European Regional Development Fund via the Lombardy regional
government in respect of a EUR1 million project focusing on the
development of G+ membranes to enhance the thermal and electrical
performance of membranes for fashion applications. The project is a
collaboration between Directa Plus, the Politecnico of Milan
University and two other companies, with Directa Plus as project
leader. Directa Plus is investing EUR308k and will receive a grant
of EUR126k following the completion of the project in December
2018. The grant is aligned with the Company's textile development
strategy, and targeted to reduce costs and expand the range of high
performance G+ textile products.
Post period end, the Company appointed Luca Provolo as Head of
Sales, with a primary focus on the textiles market - both G+ planar
circuit and G+ membrane. Luca brings significant experience in
sales and business development, having worked for over 25 years at
W.L. Gore & Associates, the producer of
technologically-advanced fabrics such as GORE-TEX(R) and
Windstopper(R), as European Sales Leader for the Workwear Division
and as Country Sales Leader in the Technical Fabrics Division in
Italy, Spain, Portugal and Romania. Luca has been tasked with
building upon his proven track record of business sales across
Europe and Asia and identifying new opportunities, primarily in the
textiles sector for developing partnerships with new customers. He
is also responsible for building upon and strengthening the sales
function of Directa Plus, as the Company increasingly progresses
from the R&D phase into the sales and commercialisation
phase.
Environmental
The Company's G+ product for the environmental industry,
Grafysorber(R), has a unique tested and proven oil adsorption
capacity. Grafysorber(R) is able to deliver a disruptive solution
in the water treatment industry where traditional products have a
comparatively low effectiveness. The Company is pursuing two main
paths of development:
-- Directa Plus' oil adsorbent products (barriers, pillows and
loose material of G+), which have been tested and endorsed, are
available for sale. The Company intends to scale up its commercial
footprint and develop a larger salesforce with agents and
distributors to target the global market.
-- The Company plans to move into the decontamination, using
Grafysorber(R), of produced water from oil and gas operations. A
pilot plant has been established and tested at the Company's
Advanced Development Area and is undergoing ongoing improvements
and scale up. The Company is working closely with a major
engineering company, part of one of the largest refinery groups in
Europe, to develop a plant for on-field tests with several European
and Middle Eastern oil companies, for commercialisation in the
second half of 2018.
Romania
The Company entered discussions with OMV Petrom, a Romanian
integrated oil and gas company, to establish Grafysorber(R) as the
preferred solution for their upstream decontamination and oil
recovery activities and, post period end, signed an agreement to
conduct field tests, which will be scheduled shortly. Directa Plus
has also advanced negotiations with Oil DEPOL Group, a leading
Romanian decontamination company, and Demeco, a Romanian water
treatment company, who are already using Grafysorber(R), for the
purchase or renting of an MPU.
Oman
Directa Plus continued to progress discussions in the Middle
East region on the advantages of its MPUs and, as noted above, its
objective is to move into the decontamination of produced water
from enhanced oil recovery. This potentially represents a
substantial market opportunity with Grafysorber(R) being a unique
solution to the problem.
Italy
During the period, Directa Plus, in collaboration with Eni, one
of the world's largest oil and gas companies, delivered products
based on Grafysorber(R) for decontamination activities to be
performed in the oil and gas sector in Nigeria. This followed the
successful testing last year of Grafysorber(R) by Eni. In July
2017, Eni and Directa Plus presented the test results at the 6(th)
International Conference on Environmental Chemistry and Engineering
in Rome. The Company is also in negotiation with Syndial, an Eni
company that provides an integrated service in the field of
environmental remediation, for the rental of an MPU.
Composite Materials
In the composite materials market, the Company's G+ products can
be incorporated into a variety of materials to enhance their
existing properties or to confer new ones. These properties range
from mechanical reinforcement to electrical/thermal conductivity to
barrier and tribological properties.
Directa Plus is assisting existing clients in the development
phase to expedite the commercial launch of their end-products into
the market. In particular, the Company is working with a leading
manufacturer of brake pads, which placed an order during H1 2017
for two different grades of G+ and the Company expects to receive
another order in the second half of the year. This followed the
completion in H2 2016 of a joint R&D project conducted under a
JDA signed in 2015.
Also during the period, Luxottica Group S.p.A., a leader in the
design, manufacture, distribution and sale of fashion, luxury and
sports eyewear, launched their first Ray-Ban collection enhanced by
G+. The new spectacles range was developed under a two-year JDA
signed in 2015 and the Company expects to receive further revenues
in the second half of the year associated with ongoing development
work under the JDA.
Elastomers
In the elastomers market, the Company's G+ products can be
incorporated into end-products, in particular tyres and rubber
hoses, to enhance their technical performance with properties such
as lower rolling resistance and greater grip, puncture resistance
and strength. The Company's approach to developing this market
includes:
-- Leveraging the significant experience gained in the bike tyre
industry to target motorbike and automotive markets, with the
latter being a key target market for future growth. The Company has
been working in the automotive tyre industry since 2016, engaging
with several major global tyre companies, and remains confident in
targeting the development of automotive tyres using G+
products.
-- Rubber hoses and pipes represent significant potential
markets and Directa Plus has been working over the last two years
with global companies to bring end-products to market.
-- As with the composite materials industry, Directa Plus is
assisting clients in the development phase to expedite the
commercial launch of their end-products into the market.
As anticipated and previously reported, the Company experienced
a reduction in volume during the period of sales to Vittoria as,
following robust growth in 2016 as a result of an intensive
marketing campaign, the market adjusted to ongoing levels of demand
across the Vittoria product range. However, post period end,
Directa Plus received an order for G+ from Vittoria and expects to
receive, in November 2017, further orders for 2018. The performance
of cyclists using the G+ tyres continued to be strong with
victories in various competitions, including the winner of the Giro
d'Italia, Tom Dumoulin, who used G+ graphene tyres at every stage
of the tour.
The Company signed, post period end, a JDA with a leader in
branded lifestyle apparel, footwear and accessories, whose brands
include a leading global footwear company for which Directa Plus
will develop a sustainable solution for high performance soles. G+
materials can provide thermal conductivity, greater durability and
less deformation and the Company is excited by the potential of
this market opportunity.
In addition, Parker, a leading company in rubber-based
applications, continued to test G+ materials in a wide range of
applications.
Strategy and product development
Launch of Advanced Development Area
At its headquarters in Milan, the Company launched its Advanced
Development Area. The newly-built, large fully-equipped space
enables Directa Plus to work more closely with its customers in
conducting joint research and developing and tailoring its products
to suit its customers' needs, thereby reducing the time it takes
for customers to launch their end-user products. The ADA has four
areas that are dedicated to water treatment solutions; textile
development and characterisation; development of new grades of G+
materials; and material analysis.
In the laboratory dedicated to water treatment solutions, the
Company has developed a pilot plant to demonstrate the ability of
Grafysorber(R) to absorb oil from high concentration to less than
one part per million. As noted above, Directa Plus intends to scale
up this pilot plant into industrial-scale continuous equipment over
the next twelve months for commercialisation in the second half of
2018. Directa Plus is already working with a major engineering
company that is assisting and contributing to the scale-up.
Product and process development
During the first half of 2017, the Company signed an agreement
with the IIT (Istituto Italiano di Tecnologia), a major and
well-respected Italian research centre with more than 1,200
researchers and scientists, to develop the second generation of
Grafysorber(R) for water treatment applications. The three-year
agreement has two primary work streams. First, to develop a
treatment for the external fabric of Grafysorber(R) booms to
increase the penetration of oil and prohibit the adsorption of
water, thereby maximising the oil absorption capability of the
Grafysorber(R). The second objective is to enable the
Grafysorber(R) to form a porous 3D structure based on a polymeric
network that "glues" the individual grains together. Both of these
improvements will increase the adsorption capability of
Grafysorber(R) and the ease with which it can be used.
Following the significant increase in production efficiency
achieved in 2016 as a result of the Throughput Project, the Company
continued to seek means of improving its manufacturing process
during the period. The Company expects these enhancements to
deliver further production and capacity benefits.
Certifications
Directa Plus successfully completed the REACH (Registration,
Evaluation, Authorisation and Restriction of Chemicals)
registration procedures. REACH is a regulation of the European
Union that requires the registration of substances manufactured or
imported into the EU in quantities of 1 tonne or more per year. It
was adopted to improve the protection of human health and the
environment from the risks that can be posed by chemicals, while
enhancing the competitiveness of the EU chemicals industry. It also
promotes alternative methods for the hazard assessment of
substances in order to reduce the number of tests on animals.
In addition, the Company launched its own 'G+ Certified
Experience' logo, which will be given to selected partners to
display on their products after testing has shown that the products
contain the right quality and quantity of G+ to achieve the
performance benefits advertised. The logo also testifies to the
sustainable credentials of the product. Directa Plus plans to
increase its brand awareness in the areas of sustainability and
innovation, which are represented by the new G+ Certified logo.
Grant award
Post period end, the Company was awarded a grant from the
European Regional Development Fund in respect of a EUR6.5 million
project focusing on the development of innovative asphalts and
bitumen based on G+ graphene. Directa Plus will provide the
graphene-based products, and will work in collaboration with a
leading asphalt additive producer, a company active in the waste
management industry, as well as the Milano Bicocca University.
Directa Plus expects to invest EUR419k and receive a grant of
EUR214k following completion of the project in October 2019. The
grant is aligned with the Company's development strategy for
Grafysorber(R): after being used to treat an oil spill or for
decontamination of produced water, the exhausted material can be
utilised in asphalt to increase the mechanical and thermal
properties. The Company believes that the market opportunity exists
and that this project will expedite the commercial adoption of
Grafysorber(R) for use in asphalt and bitumen.
Project selection
All new projects in all of Directa Plus' key markets will be
pursued only after careful assessment of resources required to
complete the project compared with potential market opportunity and
timing thereof.
Financial Review
Revenue for the first half of 2017 was EUR0.3 million (H1 2016:
EUR0.4 million), with the decline being a result of a reduction in
volume of sales into the bicycle tyre segment as the market
adjusted to ongoing levels of demand across Vittoria's product
range. Excluding sales into the bicycle tyre segment, revenues grew
by approximately 200% from EUR0.1 million in H1 2016 to EUR0.3
million in H1 2017. Other income (which includes grants received by
the Company) was EUR0.05 million (H1 2016: EUR0.04 million). Whilst
grants are important, the Company is primarily focused on
commercial and applications development, rather than applying for
grants that are inconsistent with the business' principal
strategies.
An investment in tangible and intangible assets of EUR0.4
million (H1 2016: EUR0.1 million) was incurred during the period,
mainly relating to the purchase of equipment for the newly-built
ADA and for the purchase of equipment under the Throughput Project
to improve the manufacturing process.
The loss after tax during H1 2017 was EUR2.1 million compared
with EUR3.8 million loss during H1 2016. The reduction was
primarily due to a decrease in finance expenses (EUR0.9 million)
and the expenses incurred in H1 2016 associated with the fair value
adjustment of the embedded derivative associated with the
convertible loan notes (EUR1.0 million), offset slightly by the
increase in EBITDA loss (EUR0.2 million). The EBITDA loss for the
period was EUR1.7 million compared with EUR1.5 million loss for H1
2016, with the increase primarily due to the lower revenue and an
increase in raw material and consumables expenses. On an adjusted
basis, loss after tax for H1 2017 was EUR2.0 million (H1 2016:
EUR2.3 million loss) and the adjusted EBITDA loss was EUR1.6
million (H1 2016: EUR1.1 million loss). Further details on the
adjustments are contained in the tables below:
Adjusted Loss (EURm) H1 2017 H1 2016
========================= ======================== =============================
Losses of the period (2.1) (3.8)
========================= ======================== =============================
Non recurring IPO
costs - 0.43
========================= ======================== =============================
Fair value movement
of embedded derivative - 1.04
========================= ======================== =============================
Share option costs 0.1
========================= ======================== =============================
Adjusted losses (2.0) (2.3)
========================= ======================== =============================
Adjusted EBITDA (EURm) H1 2017 H1 2016
========================= ======================== ============================
Result from operating
activities (2.0) (1.8)
========================= ======================== ============================
D&A 0.3 0.3
========================= ======================== ============================
EBITDA (1.7) (1.5)
========================= ======================== ============================
Share option costs 0.1
========================= ======================== ============================
Non-recurring IPO
costs 0.4
========================= ======================== ============================
Adjusted EBITDA losses (1.6) (1.1)
========================= ======================== ============================
There was a significant increase in the level of inventory in H1
2017 compared with the first half of the prior year and as at 31
December 2016 as the Company prepared for anticipated production
demand. However, by producing in industrial quantities, the Company
benefited from economies of scale and gained a greater
understanding of how to improve the production process to increase
efficiency.
Cash and cash equivalents at 30 June 2017 were EUR8.2 million
(31 December 2016: EUR10.6 million) with the reduction primarily
due to operational losses incurred and capital expenditure.
Outlook
In 2017, the Company has been engaged in a continuous
improvement programme that is delivering additional efficiencies
and capacity benefits and further progress is expected,
underpinning Directa Plus' proven ability to produce consistent,
certified production at scale. This is a key consideration for the
growing list of customers who have launched, or who are preparing
to launch, products incorporating G+ and an area of significant
competitive advantage for the business.
Graphene is a highly innovative and disruptive material, with
outstanding properties and substantial potential. During 2017, the
Company has continued to refine its range of G+ materials and,
along with the launch of its Advanced Development Area, this has
enabled the business to continue to deepen its engagement with
existing and potential customers and to embed G+ into their
processes and supply chains. The Company has continued to enter
into strategic JDA arrangements with some of the world's largest
companies and this is testament to the growing momentum in the
business and a vindication of the strength of the Company's
positioning. The Board is pleased with recent achievements, in
particular the receipt of a significant order from Grassi where
prospects for further growth are promising.
The Company has built strongly on the foundations that were
established last year and, as a result of the commercial progress
that has been made, the Board anticipates a stronger second half
performance, where it expects to report more than double the
revenues achieved in the first half of the year. However, the
Company is taking a prudent approach regarding the timing of
concluding certain sales in the textile and environmental segments
and therefore expect this will have a consequential impact on
expectations for the full year.
With more customers preparing to launch products incorporating
G+, the business is well-placed to deliver sustained growth from
2018. The opportunities for G+ remain substantial and the Board
continues to look to the future with optimism.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2017
In euro Note (Unaudited) (Unaudited) Audited
30 Jun 2017 30 Jun 2016 31 Dec 2016
------------- ------------- -------------
Continuing operations
Revenue 278,492 403,303 738,028
Other income 52,850 37,659 79,733
Changes in inventories of finished goods and work in progress 220,287 79,897 450,843
Raw materials and consumables used 2 (191,329) (80,766) (169,643)
Employee benefits expenses (1,037,761) (881,686) (1,784,094)
Depreciation and amortisation (318,725) (263,892) (572,402)
Other expenses 3 (1,007,406) (1,056,572) (2,981,032)
Results from operating activities (2,003,592) (1,762,057) (4,238,567)
------------- ------------- -------------
Fair value movement on embedded derivative - (1,039,473) (1,039,473)
Finance income 808 1,393 4,230
Finance expenses 4 (102,073) (983,984) (1,151,135)
Net finance costs (101,265) (2,022,064) (2,186,378)
------------- ------------- -------------
Loss before tax (2,104,857) (3,784,123) (6,424,945)
------------- ------------- -------------
Tax expense - - -
Loss after tax (2,104,857) (3,784,123) (6,424,945)
------------- ------------- -------------
Loss from continuing operations (2,104,857) (3,784,123) (6,424,945)
Loss of the period (2,104,857) (3,784,123) (6,424,945)
------------- ------------- -------------
Other Comprehensive income items that will not be reclassified to
profit or loss
Defined Benefit Plan remeasurement gains and losses (5,947) (6,156) 150
Other comprehensive income for the year (net of tax) (5,947) (6,156) 150
Total comprehensive income for the year (2,110,804) (3,790,279) (6,424,795)
Loss attributable to -
Owner of the Partner (2,108,448) (3,784,123) (6,422,019)
Non-controlling interests 3,591 - (2,926)
(2,104,857) (3,784,123) (6,424,945)
------------- ------------- -------------
Total Comprehensive income attributable to
Owner of the Partner (2,114,395) (3,790,279) (6,421,869)
Non-controlling interests 3,591 - (2,926)
(2,110,804) (3,790,279) (6,424,795)
------------- ------------- -------------
Earning per share
Basic earnings per share (0.05) (0.15) (0.19)
Diluted earnings per share (0.05) (0.15) (0.19)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
In euro Note (Unaudited) (Unaudited) Audited
30 June 2017 30 Jun 2016 31 Dec 2016
------------- ------------- -------------
Assets
Intangible assets 1,647,825 1,758,255 1,726,602
Property, plant and equipment 1,418,515 1,118,364 1,283,184
Non-current assets 3,066,340 2,876,619 3,009,786
------------- ------------- -------------
Inventories 5 825,661 192,800 606,065
Trade and other receivables 950,347 1,710,637 1,092,892
Prepayments 96,406 63,663 77,446
Cash and cash equivalent 8,216,061 13,054,160 10,570,211
Current assets 10,088,475 15,021,260 12,346,614
------------- ------------- -------------
Total assets 13,154,815 17,897,879 15,356,400
------------- ------------- -------------
Equity
Share capital 142,628 142,628 142,628
Share premium 19,973,996 19,973,996 19,973,996
Retained Earnings (8,541,468) (4,058,370) (6,552,965)
Equity attributable to owners of Group 11,575,156 16,058,254 13,563,659
Non-controlling interest 25,819 - 22,228
-------------
Total equity 11,600,975 16,058,254 13,585,887
------------- ------------- -------------
Liabilities
Loans and borrowings 480,437 572,753 454,600
Employee benefits 265,477 208,877 227,358
Non-current liabilities 745,914 781,630 681,958
------------- ------------- -------------
Loans and borrowing 96,018 250,271 238,134
Trade payables and other payables 711,908 807,724 850,421
Current liabilities 807,926 1,057,995 1,088,555
------------- ------------- -------------
Total liabilities 1,553,840 1,839,625 1,770,513
------------- ------------- -------------
Total equity and liabilities 13,154,815 17,897,879 15,356,400
------------- ------------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2016
Share Share Retained Total Non-controlling Total
In euro Capital premium earnings interests Equity
================================ ========== ============ ============ ============ ================ ============
At 01 January 2016 503,100 3,885,816 (6,281,318) (1,892,401) (1,892,401)
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Loss for the year period (3,784,123) (3,784,123) (3,784,123)
Other comprehensive loss (8,491) (8,491) (8,491)
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Total comprehensive loss for
the period (3,792,614) (3,792,614) (3,792,614)
Share reduction (439,649) 439,649
Cancellation of share premium
account (3,885,816) 3,885,816
Issue of ordinary share capital 79,177 19,973,996 20,053,173 20,053,173
Share-based payment reserve 19,409 19,409 19,409
Convertible loan (embedded
derivative) 1,670,687 1,670,687 1,670,687
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Balance at 30 June 2016
(Unaudited) 142,628 19,973,996 (4,058,370) 16,058,254 16,058,254
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Loss for the year period (2,637,896) (2,637,896) (2,926) (2,640,822)
Other comprehensive income 8,641 8,641 8,641
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Total comprehensive loss for
the period (2,629,255) (2,629,255) (2,926) (2,632,181)
Non controlling interest in
Directa Textile Solutions 25,154 25,154
Share-based payment reserve 134,659 134,659 134,659
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Balance at 31 December 2016
(Audited) 142,628 19,973,996 (6,552,965) 13,563,659 22,228 13,585,887
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Loss for the year period (2,108,448) (2,108,448) 3,591 (2,104,857)
Other comprehensive loss (5,947) (5,947) (5,947)
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Total comprehensive loss for
the period (2,114,394) (2,114,394) 3,591 (2,110,803)
Share-based payment reserve 125,893 125,893 125,893
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
Balance at 30 June 2017
(Unaudited) 142,628 19,973,996 (8,541,468) 11,575,156 25,819 11,600,975
-------------------------------- ---------- ------------ ------------ ------------ ---------------- ------------
CONSOLIDATED STATEMENT OF CASH FLOW
For the six months ended 30 June 2017 (Unaudited) (Unaudited) Audited
30 June 2017 30 Jun 2016 31 Dec 2016
------------- ------------- -------------
Loss for the year (2,104,857) (3,784,123) (6,424,945)
Adj for:
Depreciation 182,197 133,682 317,258
Amortisation of intangible assets 135,838 130,211 267,105
Write off 8,554 - 909,763
Fair value movement on derivative - 1,039,473 1,039,473
Share based option payment cost 125,893 19,409 154,068
IPO Costs - - 427,903
Finance income (808) (1,393) (4,230)
Finance expense 102,073 983,984 1,151,136
------------- ------------- -------------
Operating cash flow before working capital changes (1,551,110) (1,478,757) (2,162,469)
(Increase) / decrease in inventories (220,287) (79,897) (450,843)
(Increase) / decrease in trade and other receivables, prepayments 115,722 (433,374) (654,509)
Increase / (decrease) in trade and other payables (160,824) 35,606 (8,101)
Increase / (decrease) in provisions and employee benefits 29,352 29,434 56,406
Net cash used in operating activities (1,787,147) (1,926,988) (3,219,516)
----------------------------------------------------------------------- ------------- ------------- -------------
Cash flows from investing activities
Interest received 808 1,393 4,230
Investment in intangible assets (57,061) (69,350) (168,716)
Loan to associate - - (50,939)
Consideration paid for acquisition of subsidiary net of cash acquired - - (58,718)
Acquisition of property, plant and equipment (295,218) (27,710) (377,246)
----------------------------------------------------------------------- ------------- ------------- -------------
Net cash used in investing activities (351,471) (95,667) (651,389)
----------------------------------------------------------------------- ------------- ------------- -------------
Cash flows from financing activities
Proceeds from IPO - 14,835,299 14,408,156
Interest Paid (10,058) (47,420) (52,195)
Drawdown of financial debt - -
Repayment of borrowings (116,280) (960,414) (989,696)
Net cash generated from financing activities (126,338) 13,827,465 13,366,265
----------------------------------------------------------------------- ------------- ------------- -------------
Net increase in cash and cash equivalent (2,264,956) 11,804,810 9,495,360
Effect of exchange rate changes (89,194) (782,300) (956,799)
Cash and cash equivalents at beginning of the period 10,570,211 2,031,650 2,031,650
Cash and cash equivalents at end of the period 8,216,061 13,054,160 10,570,211
----------------------------------------------------------------------- ------------- ------------- -------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE 6 MONTHS
ENDED 30 JUNE 2017
1. Basis of preparation
(a) Statement of compliance
The financial information contained in this announcement does
not constitute statutory financial statements within the meaning of
Section 435 of the Companies Act 2006.
The financial information for the six months ended 30 June 2017
is unaudited. In the opinion of the Directors, the financial
information for the period fairly represents the financial position
of the Company. Results of operations and cash flows for the period
are in compliance with International Financial Reporting Standards
as adopted by the EU ('EUIFRS'). The accounting policies, estimates
and judgements applied are consistent with those disclosed in the
Company's statutory financial statements for the year ended 31
December 2016. These financial statements should be read in
conjunction with the historical financial information for 31
December 2016 published in the annual report.
All financial information is presented in Euro, unless otherwise
disclosed.
The Directors of the Company approved the financial information
included in the results on 27 September 2017.
(b) Basis of measurement
The financial statements have been prepared on the historical
cost basis unless otherwise stated.
(c) Functional and presentation currency
These financial statements are presented in Euro ('EUR') and is
considered by the Directors to be the most appropriate presentation
currency to assist the users of the financial statements. The
functional currency of the Company and operating subsidiary is Euro
('EUR').
(d) Going concern
As a result of this review, the Directors believe that the
Company has sufficient resources and working capital to meet their
present and foreseeable obligations for a period of at least twelve
months from approval of these financial statements. Accordingly,
they continue to adopt the going concern basis in preparing the
Company financial statements.
2. Raw materials and consumables
The amount of EUR191,329 (H1 2016: EUR80,766) refers to
materials for production, consumption by laboratory and includes
the effect of the acquisition made.
3. Results from operating activities
Other expenses include:
EUR 30 Jun 31 Dec
30 Jun 2017 2016 2016
Consultancies 467,984 734,355 1,152,474
G&A 150,712 58,873 1,121,497
Travel and marketing 119,055 102,227 217,647
Rent and Lease 91,356 66,656 143,951
Other expenses 178,298 94,461 345,463
-------------------------------------- --------------------- --------------------------
Total 1,007,406 1,056,572 2,981,032
4. Finance expenses
Finance expenses include:
EUR 30 Jun 2017 30 Jun 2016 31 Dec 2016
Interest on loans and other financial costs 4,318 191,501 197,169
Interest on financial leasing 5,740 7,975 14,576
Interest cost for benefit plan 2,821 2,210 4,614
Foreign exchanges losses 89,194 782,298 934,777
------------ ------------ ------------
Total 102,073 983,984 1,151,136
5. Earnings per share
The earnings per share have been calculated using the weighted
average of ordinary shares. The Company was loss making for all
periods presented. Therefore the dilutive effect of share options
has not been taken account of in the calculation of diluted
earnings per share, since this would decrease the loss per share
for each of the period reported.
Change Total Weighted
in
number number number
of of of
ordinary ordinary ordinary
shares shares Days shares
----------------------- ----------- ----------- ----- -----------
At 1 January 2016 - 503,100 20,124,000
----------------------- ----------- ----------- ----- -----------
Existing shares - 503,100 140 15,840,000
----------------------- ----------- ----------- ----- -----------
Shares sub-division
on 19 May 2016 19,620,900 20,124,000 8 844,571
----------------------- ----------- ----------- ----- -----------
Issued on 27 May 2016 24,088,827 44,212,827 34
----------------------- ----------- ----------- ----- -----------
At 30 June 2016 43,709,727 44,212,827 182 24,624,111
----------------------- ----------- ----------- ----- -----------
At 31 December 2016 - 44,212,827 366 34,471,990
----------------------- ----------- ----------- ----- -----------
Existing shares - 44,212,827 182 44,212,827
At 30 June 2017 - 44,212,827 182 44,212,827
----------------------- ----------- ----------- ----- -----------
Earnings per share
30 Jun 2017 30 Jun 2016 31 Dec
2016
Loss for the year (2,108,448) (3,784,123) (6,422,019)
Weighted average
number of shares:
- Basic 44,212,827 24,624,111 34,471,990
- Diluted 44,212,827 24,624,111 34,471,990
Loss per share
- Basic (0.05) (0.15) (0.19)
- Diluted (0.05) (0.15) (0.19)
Adjusted EPS
30 Jun 2017 30 Jun 2016 31 Dec
2016
Losses of the year (2,108,448) (3,784,123) (6,422,019)
Non recurring IPO
costs - 427,144 427,144
Fair value movement
of embedded derivative - 1,039,473 1,039,473
Write off - - 840,000
Inventory adjustment - - (150,000)
Share option costs 125,893 154,068
Adjusted losses (1,982,555) (2,317,506) (4,111,334)
Average number of
ordinary shares 44,212,827 24,624,111 34,471,990
Adjusted LPS (0.04) (0.09) (0.12)
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UBORRBKAKUUR
(END) Dow Jones Newswires
September 28, 2017 02:01 ET (06:01 GMT)
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