28 March 2024
HeiQ Plc
("HeiQ"
or "the Company")
Unaudited Interim Results
HeiQ Plc (LSE: HEIQ), a leading
company in materials innovation and hygiene technologies, announces
its unaudited interim financial results for the 12 months ending 31
December 2023.
As announced on 14 March 2024, the
Company has deemed it prudent to extend its accounting reference
date to 30 June 2024. The next set of
audited financial reports and accounts will therefore be for the
period 1 January 2023 to 30 June 2024 and will be published by 31
October 2024, following the appointment of a new
auditor.
Financial Overview:
· Revenue reduced 11.6% to US$41.7 million (12 months to 31
December 2022: US$47.2 million)
· Gross profit margin increased 8.5% to 37% (12 months to 31
December 2022: 28.5%)
· Adjusted LBITDA decreased to US$5.2 million (12 months to 31
December 2022: US$12.2 million)
· Operating loss of US$11.6 million (12 months to 31 December
2022: loss of US$29.2 million)
· Loss
after taxation of US$14.0 million (12 months to 31 December 2022:
loss of US$30.0 million)
· Cash
at 31 December 2023 of US$9.7 million with net debt (including
lease liabilities) of US$10 million
Operational Overview:
Challenging market conditions
persisted during the period, leading to continued high inventories
and weakened demand across the industry. HeiQ responded with
decisive measures:
· New
organizational structure established to drive growth and
profitability of HeiQ's three venture initiatives (HeiQ AeoniQ,
HeiQ GrapheneX and HeiQ ECOS).
· Strengthened financial reporting processes through the
establishment of a central accounting function in
Portugal.
· Advanced harmonizing the Enterprise Resource Planning (ERP)
system across the group.
· Comprehensive actions taken to address deficiencies outlined
by the former auditor.
Post
Period:
· Julien Born appointed as CEO of HeiQ AeoniQ Holding to lead
scale up.
· Robert van de Kerkhof appointed as new Chair of HeiQ plc,
effective 1 April 2024.
· Successful fundraising of £2.4 million through placing,
convertible loan note and retail offer.
· Acquisition of Portugal factory site for HeiQ AeoniQ's first
commercial production plant.
Investor Presentation:
Carlo Centonze, CEO, and Xaver
Hangartner, CFO, will provide a live presentation for investors via
the Investor Meet Company platform at 11:00 am GMT today. The
presentation is open to all existing and potential shareholders.
Questions can be submitted at any time during the live
presentation. Investors can sign up to Investor Meet Company for
free and click "Add to Meet" HEIQ PLC via:
https://www.investormeetcompany.com/heiq-plc/register-investor
Carlo Centonze, co-founder and
CEO, HeiQ plc, said:
"As we look forward, we cautiously
anticipate market conditions to improve in the second half of 2024.
Until this time, we will continue to remain vigilant, focusing on
operational efficiencies and adapting our cost base.
"With resilience, innovation, and
collaboration at our core, we are confident in our ability to
overcome these obstacles and emerge stronger from these testing
times. I extend my gratitude to our investors, team members,
advisors, and customers for their unwavering support and
dedication. Together, we will chart a path forward towards
sustainable growth and success in 2024 and beyond."
For further information, please contact:
|
HeiQ Plc
Carlo Centonze (CEO)
|
+41 56 250 68 50
|
|
Cavendish Securities plc (Broker)
Stephen Keys / Callum
Davidson
|
+44 (0) 207 397 8900
|
|
SEC Newgate (Media Enquiries)
Elisabeth Cowell / Molly Gretton /
Tom Carnegie
|
+44 (0) 20 3757 6882
HeiQ@secnewgate.co.uk
|
About HeiQ
HeiQ is a Swiss-based
international company that innovates pioneering and differentiating
materials in partnership with established global brands. We bridge
the academic and commercial worlds to conceive
performance-enhancing materials and technologies, working with
aligned brands to research, manufacture and bring products to
market, aiming for lab to consumer in months. Our goal is to
improve the lives of billions by innovating the materials that go
into everyday products, making them more hygienic, comfortable,
protective, and sustainable.
Our strong IP portfolio positions
us as an innovation leader for niche, premium and high-margin
products in the textile chemicals, man-made fibers, paints and
coatings, antimicrobial plastics, probiotics and household cleaner
markets. We have also expanded into healthcare facilities,
probiotic cleaning, and hygiene coatings markets to help make
hospitals and healthcare environments more hygienic.
We have developed over 200
technologies in partnership with 300 major brands. With a
substantial research and development pipeline, including key
technology development projects HeiQ AeoniQ, HeiQ ECOS, HeiQ
GrapheneX, and HeiQ Synbio, HeiQ aims to deliver shareholder value
through sales growth and entry into new lucrative markets through
disruptive innovation and M&A.
We have built a strong reputation
for ESG & sustainable innovation, having won multiple awards
including the Swiss Technology Award twice and the Swiss
Environmental Award. Under experienced leadership, we are committed
to driving our profit in close connection with people and the
planet. For more information, please visit www.heiq.com.
Chairwoman's Statement
The market downturn which
commenced in late 2022 continued to cause challenges for HeiQ
throughout 2023. Contrary to predictions by many in the industry,
market conditions failed to rebound during the period. Our revenues
decreased by 11.6% to US$42 million for the twelve months ending
December 31, 2023, primarily driven by historically high
inventories, and weak industry demand. In response, we implemented
measures to adjust our cost base and organizational structure,
while maintaining HeiQ's innovation and differentiation
capabilities. Despite the extremely challenging market conditions
during the period for HeiQ's growth-oriented business units, we
made significant progress with our exciting and potentially
game-changing venture initiatives HeiQ AeoniQ, HeiQ GrapheneX and
HeiQ ECOS.
In light of the challenges faced
during the year, we are greatly appreciative of the support shown
by our shareholders in our recent fundraise to support the
Company's next phase of growth.
Strategy & Structure
Since listing on the London Stock
Exchange on December 7, 2020, HeiQ has evolved significantly.
Initially known as an innovation company with a focus on specialty
chemicals for textile and flooring, HeiQ has since developed into a
company with leading technology platforms that drive sustainability
in strategic industries and applications.
This evolution means HeiQ, while
still being recognized as a leader in textile performance chemicals
and antimicrobials, today focuses are on sustainable technologies
in textile fibres (HeiQ AeoniQ), probiotic healthcare cleaners
(HeiQ Synbio), anode free solid state lithium metal batteries (HeiQ
GrapheneX) and transparent conductive coatings (HeiQ ECOS). This
evolution has been achieved both through acquisitions and HeiQ's
own innovation and business development efforts.
HeiQ's organizational structure,
consists of three distinct technology ventures alongside three
growth-orientated business segments.
This Venture & Growth
structure enables the organization to stay focused on growth and
commercialization of existing as well as the incubation of new
technologies. With dedicated teams for each unit, we can deploy and
adjust resources and skills appropriate to the different maturity
levels of the units.
Governance
The evolution of HeiQ over the
last four years has led to a significant increase in administrative
complexity, in turn, requiring our reporting processes and
governance to evolve and improve. The Company acknowledges and is
fully committed to implementing these improvements, and as such
began making significant investments in 2023 to address
them.
In Q1 2023, we established a
central accounting function within our global shared service hub in
Portugal to strengthen our financial reporting processes. This has
since expanded to include 5 full-time equivalents (FTEs). We have
also advanced the implementation of harmonizing our enterprise
resource planning (ERP) systems across our group. These initiatives
aim to improve the quality, efficiency, and governance of our
financial reporting processes. This investment in our organization
has had a limited impact on the 2022 financial reporting
process, but we expect significant improvements for the 2023/24
financial reporting cycle.
To address the deficiencies
identified by Deloitte LLP in auditing the 2022 accounts we have
undertaken a comprehensive set of actions:
•
We engaged Ernst & Young (EY) to support the improvement of
governance, reporting and financial accounting
processes.
•
We are adding two additional employees to manage the EY governance
project implementation and to strengthen the internal controls
system on an ongoing basis.
•
We defined a roadmap to address the most severe
deficiencies and those which will have the greatest positive impact
on the 2023/24 financial reporting process.
•
We have already implemented improvements for this interim report as
of December 31, 2023, as far as practicable.
As previously announced, the
Company continues to seek a replacement auditor following the
resignation of Deloitte LLP. The Company will update the market in
due course.
The Company has extended its
accounting reference date to June 30, to enable an incoming auditor
to properly onboard and complete the audit in a reasonable
timeframe. Therefore, this financial report represents unaudited
interim financial statements for the 12-month period ending
December 31, 2023. The Company's next set of audited financial
reports and accounts will be for the period January 1, 2023 to June
30, 2024 and will be published by October 31, 2024.
Changes to the Board of Directors
On January 1, 2024, Robert van de
Kerkhof joined the Board of HeiQ plc as a non-executive director
and chair of the Environmental, Occupation, Health & Safety and
Sustainability Committee. With over 30 years' experience in
management and sustainability leadership, including serving as
Chief Commercial Officer, Chief Sustainability Officer and board
member of the listed company Lenzing AG (Austria), Robert is a
great addition to the Board.
As previously announced, I will
retire as Chair and non-executive director of HeiQ plc on March 31,
2024. Joining the Company just before its listing in 2020, it has
been an intense and very fulfilling time. Together with fellow
directors and a dedicated management team, we have navigated
through a myriad of challenges and opportunities, culminating in
the development of a compelling portfolio of high-potential
platform technologies poised to sustainably revolutionize growing
industries.
As HeiQ enters the next stage of
its growth with the commercial launch and scaling of its venture
technologies, I have concluded it is an appropriate moment to
hand-over the Chair position. This will allow me to spend more time
with my family while ensuring HeiQ has a new leader with
exceptional experience and industry knowledge.
Following the proposal by the
Nomination Committee after a thorough selection process, the Board
of Directors has unanimously appointed Robert van de Kerkhof as the
new Chair of HeiQ plc, effective April 1, 2024.
I am convinced that HeiQ is in
very capable hands with Robert as Chair, as he is not only a
technical expert, but also an exceptional leader with executive
management experience on listed company boards.
I thank the entire HeiQ team for
the last four years and extend my best wishes to all HeiQans, our
investors as well as all our other stakeholders.
Esther Dale
Chair
March 28, 2024
Business Report & Outlook
I am pleased to provide an update
on our company's performance for the twelve months ending December
31, 2023 and an outlook for 2024.
2023 continued to present
challenges for our industry and commercialized businesses. Despite
the strategic initiatives of relocation of capabilities, cost
containment and strategic focus undertaken to mitigate the impact
of market disruptions, our financial performance remained under
pressure, especially as we kept investing in our venture innovation
platforms. Sales for the year amounted to US$41.7 million,
reflecting a -11.6% decrease compared to the previous year. We
continued to face margin pressure in a buyers-market driven by
current overcapacity and historically high inventories at
brands.
Operating losses persisted in
2023, albeit with some improvement, amounting to US$11.6 million
for the twelve months ending December 31, 2023. The ongoing
macroeconomic uncertainties, coupled with the challenges in
securing committed credit facilities, contributed to the financial
constraints faced by the company.
Innovation remains the cornerstone
of our company's strategy, driving sustainable growth and
differentiation in the market. We made significant strides in
advancing our key commercial and venture innovation platforms in
2023:
· HeiQ AeoniQ,
the world's first climate positive cellulosic
filament fibre, launched to the market with Hugo Boss in 2023.
Tennis star Matteo Berrettini featured the first t-shirt during the
Australian Open 2023, and Hugo Boss prominently displayed a
state-of-the-art fashion collection called "The Change" at the
Milano Fashion Show. The uniqueness of HeiQ AeoniQ was awarded an
ISPO award for product of the year. In Q1 2024 HeiQ purchased a
large industrial plot of 25,000m2 in Portugal to build its first
3,000-ton HeiQ AeoniQ plant by 2026. Joining Hugo Boss, MAS
Holdings, one of world's leading garment makers, co-invested into
HeiQ AeoniQ. HeiQ AeoniQ secured an initial grant of EUR10
million from the Portuguese government and was given the
status as a project of national strategic importance. We were
delighted to appoint Julien Born, former CEO of The Lycra Company
to lead HeiQ AeoniQ as CEO and Robert van de Kerkhof, former
CCO/CSO of Lenzing, to act as its Chair.
· HeiQ ECOS,
our transparent conductive coating technology
platform, progressed well in application development with market
leaders in thin film insulation for rapid retrofitting and energy
efficiency improvement of buildings, climate control in advanced
greenhouse foils, transparent car window heating, signature
management for defence applications, as well as conductive layering
for novel organic photovoltaics. We expect several of these
potential applications to become first market prototypes in
2024.
· HeiQ
GrapheneX, our highly porous
graphene membrane, has secured its first external innovation
funding from an electronics technology partner and progressed to
demonstrate the performance benefits of its novel graphene membrane
in building an anode-free solid-state lithium metal battery with
double energy density. Considerable new IP was gained and is being
filed in patent applications. In 2024 the first pilot
commercialization plant will be commissioned in Switzerland,
bringing the technology from the lab to the work floor.
· HeiQ
Synbio, our biotech & life
sciences platform, progressed rapidly in 2023 with the completion
of the study conducted by the Charité University Hospital Berlin,
sponsored by the German Government and the Bill and Melinda Gates
Foundation. It established that probiotic HeiQ Synbio hospital
cleaners perform equally well as Ecolab disinfectants but
additionally prevent the formation of pathogens' multi-resistance
buildup. Based on these stark results, the Robert Koch Institute
recommended probiotic cleaners to German hospitals. The European
Commission added probiotic cleaners to its new detergent regulation
draft having previously awarded probiotic cleaners the EU Ecolabel.
We therefore expect strong growth for our HeiQ Synbio platform in
the years to come.
As we look ahead to 2024, we
anticipate a continuation of the challenging market conditions
experienced in 2023 during the first half of the year. The global
economy remains uncertain, with ongoing geopolitical tensions and
supply chain disruptions affecting various industries. However, as
of today, we expect market conditions to start improving in H2
2024.
Considering the persisting
challenges, focus for 2024 remains on:
· Lean
Adaptation: Remaining agile and
adaptive to changing market dynamics and consumer
behaviours.
· Operational
Efficiency: Continued emphasis on
cost optimization measures to improve operational efficiency and
preserve financial stability as well as liquidity.
· Innovation and
Differentiation: Prioritizing rapid
innovation initiatives that offer differentiation in the market and
address evolving customer needs.
· Market
Expansion: Exploring opportunities
for market expansion in resilient sectors and geographies, while
also strengthening existing partnerships.
· Sustainability: Upholding our
commitment to sustainability by advancing our innovation
initiatives that reduce environmental impact and promote
responsible business practices.
As we navigate through present-day
challenges and uncertainties of the current market landscape, we
remain steadfast in our commitment to delivering long-term value
for our shareholders, customers, and stakeholders. With resilience,
innovation, and collaboration, we are confident in our ability to
raise again and overcome obstacles and emerge stronger from these
testing times.
I extend my gratitude to our
investors, team members, advisors, and customers for their
unwavering support and dedication. Together, we will chart a path
forward towards sustainable growth and success in 2024 and
beyond.
Carlo Centonze
CEO & Executive
Director
March 28, 2024
Principal risks and uncertainties
The Group has an established,
structured approach to identifying and assessing the impact of
financial and operational risks on its business. The principal
risks and uncertainties for the remainder of the financial year are
not expected to change materially from those included on pages 38
to 42 of the Annual Report and Accounts 2022. The risks identified
relate to the following areas: Delivery on growth strategy;
Increase in competition; Geographical risks; IP protection and
first mover advantage; Regulatory risks; Reputational risks and
failure to build brand equity; Innovation pipeline; Supply chain
disruptions; Personnel/Workforce; Interruption of IT system
operations; Liquidity risk; currency risks; Product liability.
Further information in relation to the Group's financial position
and going concern is included in note 2.
Carlo Centonze
CEO & Executive
Director
March 28, 2024
Financial Review
As outlined in the Chairwoman's
statement and the Business Report, 2023 was a very challenging year
for the Company. The continuously weak market conditions for our
main commercial businesses led to a decrease in revenues for the
12-month period by -11.6% to US$41.7 million (2022: US$47.2
million).
Gross profit of US$15.5 million
(2022: US$13.5 million) represents a gross margin on sales of 37.0%
(2022: 28.5%). While this represents an overall recovery of 8.5%,
it was impacted by increased allowances on inventory to reflect the
continuing weak market demand. Excluding this impact, the gross
margin would be 41.2% for the period.
Total selling, general and
administrative expenses (SG&A) were US$29.6 million for the
12months ending December 31, 2023, representing an overall decrease
of 4.5% versus the prior year period (2022: US$31.0 million).
Personnel expenses accounted for 44.9% of total SG&A costs in
2023 and amount to US$13.3 million - down -11.3% (US$-1.7 million)
compared to the same period in 2022 (US$15.0 million). A
significant portion of SG&A is related to our venture
initiatives and thus represents capability building development
costs. In 2023 SG&A expenses of about US$2.5 million relate to
our venture initiatives and thus represents capability building
development costs.
Accounting aspects relying on
significant judgment and estimations and individual transactions
that materially affected our interim financial statements as of
December 31, 2023, are as follows:
Allowance on inventory
In line with existing accounting
policies of the Company, an inventory allowance of US$1.8 million
was recorded within cost of sales. The allowance relates mainly to
excess inventory positions. Based on the continuing weak market
conditions, for a limited number of inventory items the Board has
concluded that it is not certain that all inventory on hand can be
sold within the foreseeable future and therefore has determined
this allowance to be appropriate.
Impairment of intangible assets
The Company acquired in previous
years certain intangible assets to secure its intellectual property
position in relation to certain long-term customer contracts,
including the exclusivity agreement with ICP Industrial Inc. As the
exclusive agreement with ICP has been terminated, the Directors
have deemed it appropriate to write-off the corresponding
intangible assets, amounting in a write-off of US$1.1 million in
2023.
Settlement of litigation
As announced in November 2023, the
Group settled the litigation and the termination of an exclusive
agreement between its subsidiary HeiQ Materials AG and ICP
Industrial Inc. ("ICP"). The settlement of the litigation included
dismissal of claims and counterclaims by both parties with
prejudice and ICP agreed to pay HeiQ Plc a total of US$2.75
million, which was received in December 2023. The settlement
payment is accounted for as "Other income" within the operating
loss.
All the above contributed to a
loss from operations for the 12 months ending December 31, 2023 of
US$11.6 million (2022: US$29.2 million).
|
Results
|
For the six months ended
December 31,
|
For the year ended
December 31
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
Revenue
|
21,247
|
19,644
|
41,747
|
47,202
|
|
|
Cost of sales
|
(14,177)
|
(17,618)
|
(26,287)
|
(33,745)
|
|
|
Gross profit
|
7,070
|
2,026
|
15,460
|
13,457
|
|
|
Other income
|
3,284
|
2,084
|
4,230
|
4,832
|
|
|
Selling and general administrative
expenses
|
(15,319)
|
(16,953)
|
(29,582)
|
(30,969)
|
|
|
Impairment reversal/(loss) on
intangible assets
|
90
|
(11,651)
|
90
|
(11,651)
|
|
|
Impairment loss on property, plant
& equipment
|
(84)
|
(730)
|
(84)
|
(730)
|
|
|
Other expenses
|
(623)
|
(2,449)
|
(1,698)
|
(4,184)
|
|
|
Operating loss
|
(5,582)
|
(27,673)
|
(11,584)
|
(29,245)
|
|
|
Depreciation of property, plant and
equipment
|
742
|
638
|
1,453
|
1,282
|
|
|
Amortization of intangible
assets
|
1,134
|
769
|
2,203
|
1,435
|
|
|
Depreciation of right-of-use
assets
|
527
|
441
|
1,005
|
938
|
|
|
Impairment losses and
write-offs
|
1,396
|
13,278
|
1,396
|
13,278
|
|
|
Share options and rights granted
to
Directors and employees
|
202
|
(348)
|
334
|
138
|
|
|
Adjusted EBITDA
|
(1,581)
|
(12,895)
|
(5,193)
|
(12,174)
|
|
|
EBITDA Margin
(adjusted)
|
(7.4%)
|
(65.6%)
|
(12.4%)
|
(25.8%)
|
|
Cashflow from operating activities
Liquidity and cashflow is a key
focus for the Company in these challenging circumstances. We have
undertaken decisive steps to reduce the cash-use of operating
activities during the period. As a result, the Company managed to
return to a positive cashflow from operating activities in H2
2023:
|
US$'000
|
Jul - Dec
2023
|
Jan - Jun
2023
|
Jul - Dec
2022
|
Jan - Jun
2022
|
|
|
|
Net cash from (used in) operating
activities
|
1,505
|
(4,799)
|
(486)
|
(1,973)
|
Inventory & Trade receivables
Both inventory and trade
receivables were significantly reduced during the reporting period.
As of December 31, 2023, inventory was valued at US$11.3 million
which represents a reduction of -14.6% (2022: US$13.2 million).
Trade receivables of US$5.7 million represent a reduction of 12.5%
(2022: US$6.5 million).
Post balance sheet date events
In February 2024 the Group
completed the acquisition of two industrial properties in Portugal
for a total consideration of EUR5.0 million (including taxes) which
we believe represented a significant discount to market prices for
similar properties. To secure the price and to finance the
acquisition, the Company received bridge financing from Cortegrande
AG, a company owned by the Group CEO Carlo Centonze. In late March
2024, the Group secured a mortgage of EUR0.75 million for the
smaller lot acquired at a price (before taxes) of EUR1.0 million
while negotiations for the large lot (acquisition price before tax
EUR3.6 million) with the mortgage provider are ongoing. Further, in
March 2024 the Company completed a capital raise issuing 28 million
new shares for a total consideration of £2.4 million (£0.087 per
share).
Liquidity as of December 31, 2023 & Going Concern
Assessment
As of December 31, 2023, the
Company's cash balance was US$9.7 million (December 31, 2022:
US$8.5 million) and net debt position including lease liabilities
was US$-10.0 million as of December 31, 2023 (2022: US$-3.7
million). To manage its cash balance, the Group has access to
credit facilities totalling CHF8.8 million (approximately US$9.9
million as of March 28, 2023). The credit facilities are in place
with two different banks and both contracts have materially the
same conditions. The facilities are not limited in time, can be
terminated by either party at any time and allow overdrafts and
fixed cash advances with a duration of up to twelve
months.
As of March 28, 2023, the Group
has drawn fixed cash advances amounting to CHF7.8 million and
EUR0.4 million (December 31, 2022: CHF2.4 million) - see Note 2 for
details including maturity dates. The facilities are not committed,
but the Board has not received any indication from financing
partners that facilities are at risk of being terminated. However,
the credit facilities will be reduced by CHF0.3 million to CHF8.5
million in total as of June 17, 2024.
The Group's directors have a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future and
operate within its credit facilities for the period of 12 months
from date of signature. Nevertheless, the Board acknowledges the
uncommitted status of the facilities which could be terminated
requiring the refinancing of debts, and which casts material
uncertainty on the going concern assessment until appropriate
longer-term funding is in place. Further disclosures on the going
concern assessment are made in the notes to the financial
statements.
Xaver Hangartner
CFO & Executive
Director
March 28, 2024
Unaudited Condensed Consolidated Interim
Financial Statements
Condensed consolidated statement of profit
and loss and other comprehensive income
|
|
|
|
|
|
For the six months ended
December 31,
|
|
For the year ended
December 31,
|
|
|
|
|
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
(Audited)
|
|
|
|
Note
|
|
|
|
US$'000
|
US$'000
|
|
US$'000
|
US$'000
|
|
|
Revenue
|
5
|
|
|
|
21,247
|
19,644
|
|
41,747
|
47,202
|
|
|
Cost of sales
|
7
|
|
|
|
(14,177)
|
(17,618)
|
|
(26,287)
|
(33,745)
|
|
|
Gross profit
|
|
|
|
|
7,070
|
2,026
|
|
15,460
|
13,457
|
|
|
Other income
|
8
|
|
|
|
3,284
|
2,084
|
|
4,230
|
4,832
|
|
|
Selling and general administrative
expenses
|
9
|
|
|
|
(15,319)
|
(16,953)
|
|
(29,582)
|
(30,969)
|
|
|
Impairment reversal/(loss) on intangible
assets
|
16
|
|
|
|
90
|
(11,651)
|
|
90
|
(11,651)
|
|
|
Impairment loss on property, plant
& equipment
|
17
|
|
|
|
(84)
|
(730)
|
|
(84)
|
(730)
|
|
|
Other expenses
|
11
|
|
|
|
(623)
|
(2,449)
|
|
(1,698)
|
(4,184)
|
|
|
Operating loss
|
|
|
|
|
(5,582)
|
(27,673)
|
|
(11,584)
|
(29,245)
|
|
|
Finance income
|
12
|
|
|
|
69
|
241
|
|
74
|
683
|
|
|
Finance costs
|
13
|
|
|
|
(1,055)
|
(749)
|
|
(1,439)
|
(1,273)
|
|
|
Loss before taxation
|
|
|
|
|
(6,568)
|
(28,181)
|
|
(12,949)
|
(29,835)
|
|
|
Income tax
|
14
|
|
|
|
(884)
|
275
|
|
(1,030)
|
21
|
|
|
Loss after taxation
|
|
|
|
|
(7,452)
|
(27,906)
|
|
(13,979)
|
(29,814)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
|
|
|
546
|
(824)
|
|
975
|
(1,914)
|
|
|
Items that may be reclassified to
profit or loss in subsequent periods
|
|
|
|
|
546
|
(824)
|
|
975
|
(1,914)
|
|
|
Actuarial gains/(losses) from
defined benefit pension plans
|
|
|
|
|
(218)
|
1,380
|
|
(218)
|
1,380
|
|
|
Income tax relating to items that
will not be reclassified subsequently to profit or loss
|
|
|
|
|
249
|
(276)
|
|
249
|
(276)
|
|
|
Items that will not be reclassified
to profit or loss in subsequent periods
|
|
|
|
|
31
|
1,104
|
|
31
|
1,104
|
|
|
Other comprehensive income (loss)
for the period
|
|
|
|
|
577
|
280
|
|
1,006
|
(810)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the
period
|
|
|
|
|
(6,875)
|
(27,626)
|
|
(12,973)
|
(30,624)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of HeiQ
|
|
|
|
|
(7,147)
|
(27,546)
|
|
(13,583)
|
(29,251)
|
|
|
Non-controlling
interests
|
|
|
|
|
(305)
|
(360)
|
|
(396)
|
(563)
|
|
|
|
|
|
|
|
(7,452)
|
(27,906)
|
|
(13,979)
|
(29,814)
|
|
|
Total Comprehensive loss
attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
|
|
(6,570)
|
(27,266)
|
|
(12,577)
|
(30,061)
|
|
|
Non-controlling
interests
|
|
|
|
|
(305)
|
(360)
|
|
(396)
|
(563)
|
|
|
|
|
|
|
|
(6,875)
|
(27,626)
|
|
(12,973)
|
(30,624)
|
|
|
Loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic (cents) *
|
15
|
|
|
|
(5.09)
|
(20.39)
|
|
(9.67)
|
(21.92)
|
|
*The effect of share options is
anti-dilutive and therefore not disclosed.
Condensed consolidated statement of financial
position
|
|
|
|
As at
December 31,
2023
(Unaudited)
|
As at
December 31,
2022
(Audited)
|
|
|
Note
|
|
US$'000
|
US$'000
|
|
ASSETS
|
|
|
|
|
|
Intangible assets
|
16
|
|
20,489
|
20,442
|
|
Property, plant and
equipment
|
17
|
|
9,003
|
9,802
|
|
Right-of-use assets
|
18
|
|
8,132
|
7,819
|
|
Deferred tax assets
|
30
|
|
312
|
538
|
|
Other non-current assets
|
19
|
|
82
|
137
|
|
Non-current assets
|
|
|
38,018
|
38,738
|
|
Inventories
|
20
|
|
11,250
|
13,168
|
|
Trade receivables
|
21
|
|
5,673
|
6,487
|
|
Other receivables and
prepayments
|
22
|
|
4,349
|
4,262
|
|
Cash and cash
equivalents
|
|
|
9,694
|
8,488
|
|
Current assets
|
|
|
30,966
|
32,405
|
|
Total assets
|
|
|
68,984
|
71,143
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
Issued share capital and share
premium
|
24
|
|
206,246
|
205,874
|
|
Other reserves
|
26
|
|
(126,830)
|
(128,017)
|
|
Retained deficit
|
|
|
(51,661)
|
(39,466)
|
|
Equity attributable to HeiQ
shareholders
|
|
|
27,755
|
38,391
|
|
Non-controlling
interests
|
|
|
1,728
|
1,948
|
|
Total equity
|
|
|
29,483
|
40,339
|
|
Lease liabilities
|
27
|
|
6,674
|
6,558
|
|
Long-term borrowings
|
29
|
|
1,501
|
1,445
|
|
Deferred tax liability
|
30
|
|
1,384
|
1,253
|
|
Other non-current
liabilities
|
31
|
|
5,010
|
4,714
|
|
Total non-current
liabilities
|
|
|
14,569
|
13,970
|
|
Trade and other payables
|
32
|
|
6,672
|
5,322
|
|
Accrued liabilities
|
33
|
|
4,483
|
4,978
|
|
Income tax liability
|
14
|
|
606
|
314
|
|
Deferred revenue
|
34
|
|
1,423
|
1,285
|
|
Short-term borrowings
|
29
|
|
10,409
|
2,893
|
|
Lease liabilities
|
27
|
|
1,131
|
1,264
|
|
Other current
liabilities
|
36
|
|
208
|
778
|
|
Total current
liabilities
|
|
|
24,932
|
16,834
|
|
Total liabilities
|
|
|
39,501
|
30,804
|
|
Total equity and
liabilities
|
|
|
68,984
|
71,143
|
The Notes form an integral part of
these Condensed Consolidated Interim Financial Statements. The
Financial Statements were approved and authorized for issue by the
Board of Directors on March 27, 2024 and signed on its behalf
by:
Xaver Hangartner
CFO & Executive
Director
Condensed consolidated statement of changes
in equity
|
|
|
|
|
|
|
Issued share capital and share
premium
|
Other reserves
|
Retained deficit
|
Equity attributable to HeiQ
shareholders
|
Non-controlling
interests
|
Total equity
|
|
|
Note
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Balance at January 1, 2022
(Audited)
|
|
195,714
|
(127,195)
|
(11,525)
|
56,994
|
2,541
|
59,535
|
|
Loss after taxation
|
|
-
|
-
|
(29,251)
|
(29,251)
|
(563)
|
(29,814)
|
|
Other comprehensive
(loss)/income
|
|
-
|
(810)
|
-
|
(810)
|
-
|
(810)
|
|
Total comprehensive (loss)/income
for the period
|
|
-
|
(810)
|
(29,251)
|
(30,061)
|
(563)
|
(30,624)
|
|
Issuance of shares
|
24
|
10,160
|
-
|
-
|
10,160
|
-
|
10,160
|
|
Share-based payment
charges
|
25
|
-
|
(12)
|
-
|
(12)
|
-
|
(12)
|
|
Dividends paid to minority
shareholders
|
26
|
-
|
-
|
-
|
-
|
(243)
|
(243)
|
|
Capital contributions from minority
shareholders
|
|
-
|
-
|
-
|
-
|
764
|
764
|
|
Adjustments arising from change in
non-controlling interests
|
|
-
|
-
|
(2,445)
|
(2,445)
|
(616)
|
(3,061)
|
|
Transfer on disposal of
non-controlling interest
|
|
-
|
-
|
3,755
|
3,755
|
65
|
3,820
|
|
Transactions with owners
|
|
10,160
|
(12)
|
1,310
|
11,458
|
(30)
|
11,428
|
|
Balance at December 31, 2022
(Audited)
|
|
205,874
|
(128,017)
|
(39,466)
|
38,391
|
1,948
|
40,339
|
|
|
|
|
|
|
|
|
|
|
Loss after taxation
|
|
-
|
-
|
(13,583)
|
(13,583)
|
(396)
|
(13,979)
|
|
Other comprehensive
(loss)/income
|
|
-
|
1,006
|
-
|
1,006
|
-
|
1,006
|
|
Total comprehensive (loss)/income
for the period
|
|
-
|
1,006
|
(13,583)
|
(12,577)
|
(396)
|
(12,973)
|
|
Issuance of shares
|
24
|
372
|
-
|
-
|
372
|
-
|
372
|
|
Share-based payment
charges
|
25
|
-
|
181
|
-
|
181
|
-
|
181
|
|
Elimination of non-controlling
interest at disposal of subsidiary
|
4b
|
-
|
-
|
-
|
-
|
73
|
73
|
|
Dividends paid to minority
shareholders
|
26
|
-
|
-
|
-
|
-
|
(12)
|
(12)
|
|
Transfer of shares to
non-controlling interest
|
4c
|
-
|
-
|
1,388
|
1,388
|
115
|
1,503
|
|
Transactions with owners
|
|
372
|
181
|
1,388
|
1,941
|
176
|
2,117
|
|
Balance at December 31, 2023
(Unaudited)
|
|
206,246
|
(126,830)
|
(51,661)
|
27,755
|
1,728
|
29,483
|
Condensed consolidated statement of cash
flows
|
|
|
|
Six months ended December
31,
|
|
Year ended
December 31,
|
|
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
(Audited)
|
|
|
Note
|
|
US$'000
|
US$'000
|
|
US$'000
|
US$'000
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
|
(6,568)
|
(28,181)
|
|
(12,949)
|
(29,835)
|
|
Cash flow from operations
reconciliation:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
16-18
|
|
2,403
|
1,848
|
|
4,661
|
3,655
|
|
Impairment expense
|
16-17
|
|
(6)
|
12,380
|
|
(6)
|
12,380
|
|
Net loss/gain on disposal of
assets
|
|
|
67
|
(8)
|
|
84
|
(5)
|
|
Write-off of intangible
assets
|
11
|
|
1,388
|
897
|
|
1,402
|
897
|
|
Gain from disposal of
subsidiary
|
4b
|
|
(138)
|
-
|
|
(138)
|
|
|
Fair value gain on derivative
liability
|
8
|
|
(453)
|
(371)
|
|
(701)
|
(371)
|
|
Finance costs
|
|
|
300
|
149
|
|
517
|
273
|
|
Finance income
|
|
|
(29)
|
(1)
|
|
(34)
|
(2)
|
|
Pension expense
|
|
|
(389)
|
130
|
|
(346)
|
247
|
|
Non-cash equity
compensation
|
25
|
|
202
|
(348)
|
|
334
|
138
|
|
Gain from lease
modification
|
|
|
(6)
|
-
|
|
(15)
|
(68)
|
|
Other costs paid in
shares
|
24
|
|
-
|
235
|
|
-
|
235
|
|
Currency translation
|
|
|
916
|
623
|
|
322
|
(61)
|
|
Working capital
adjustments:
|
|
|
|
|
|
|
|
|
Decrease in inventories
|
39
|
|
3,164
|
3,016
|
|
1,926
|
602
|
|
Decrease in trade and other
receivables
|
39
|
|
2,350
|
9,391
|
|
733
|
7,783
|
|
(Decrease)/Increase in trade and
other payables
|
39
|
|
(1,798)
|
95
|
|
1320
|
2,543
|
|
Cash from (used in)
operations
|
|
|
1,403
|
(145)
|
|
(2,890)
|
(1,589)
|
|
Taxes paid
|
14
|
|
102
|
(341)
|
|
(404)
|
(870)
|
|
Net cash from (used in) operating
activities
|
|
|
1,505
|
(486)
|
|
(3,294)
|
(2,459)
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
Consideration for acquisition of
businesses
|
39
|
|
(730)
|
-
|
|
(730)
|
(1,587)
|
|
Cash assumed in asset
acquisition
|
39
|
|
10
|
65
|
|
12
|
65
|
|
Disposal of a subsidiary, net of
cash disposed of
|
4b
|
|
(24)
|
-
|
|
(24)
|
-
|
|
Purchase of property, plant and
equipment
|
17
|
|
(829)
|
(2,358)
|
|
(1,413)
|
(3,418)
|
|
Proceeds from the disposal of
property, plant and equipment
|
|
|
29
|
16
|
|
844
|
53
|
|
Development and acquisition of
intangible assets
|
16
|
|
(484)
|
(1,919)
|
|
(1,149)
|
(3,865)
|
|
Interest received
|
|
|
29
|
1
|
|
34
|
2
|
|
Net cash used in investing
activities
|
|
|
(1,999)
|
(4,195)
|
|
(2,426)
|
(8,750)
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
Interest paid on
borrowings
|
|
|
(190)
|
(68)
|
|
(312)
|
(110)
|
|
Repayment of leases
|
|
|
(682)
|
(540)
|
|
(1,296)
|
(992)
|
|
Interest paid on leases
|
|
|
(110)
|
(81)
|
|
(205)
|
(163)
|
|
Proceeds from disposals of minority
interests
|
|
|
1,504
|
2,333
|
|
1,504
|
4,792
|
|
Proceeds from borrowings
|
27
|
|
2,964
|
2,642
|
|
7,962
|
3,465
|
|
Repayment of borrowings
|
27
|
|
(693)
|
(707)
|
|
(958)
|
(904)
|
|
Dividends paid to minority
shareholders
|
26
|
|
(12)
|
-
|
|
(12)
|
(243)
|
|
Net cash from financing
activities
|
|
|
2,781
|
3,579
|
|
6,683
|
5,845
|
|
Net decrease in cash and cash
equivalents
|
|
|
2,287
|
(1,102)
|
|
963
|
(5,364)
|
|
Cash and cash equivalents -
beginning of the period/year
|
|
|
7,274
|
9,488
|
|
8,488
|
14,560
|
|
Effects of exchange rate changes on
the balance of cash held in foreign currencies
|
|
|
133
|
102
|
|
243
|
(708)
|
|
Cash and cash equivalents - end of
the period
|
|
|
9,694
|
8,488
|
|
9,694
|
8,488
|
Notes to the Unaudited Condensed Consolidated
Financial Statements for the six months ended December 31,
2023
1. General
information
HeiQ Plc (the Company) is a
company limited by shares incorporated and registered in the United
Kingdom. The address of the Company's registered office is 5th
Floor, 15 Whitehall, London, SW1A 2DD.
These financial statements are
presented in United States Dollars (US$) which is the presentation
currency of the Group, and all values are rounded to the nearest
thousand dollars except where otherwise indicated.
2. Basis of
preparation and measurement
Basis of preparation
The Group extended its accounting
reference date from December 31, to June 30, to enable the incoming
auditor to properly onboard and complete the audit in a reasonable
timeframe. The Company's next set of audited financial reports and
accounts will be for the period January 1, 2023 to June 30, 2024
and will be published by October 31, 2024.
The unaudited condensed
consolidated interim financial statements have been prepared in
accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and UK adopted International Accounting
Standard 34 "Interim Financial Reporting" (IAS 34). Other than as
noted below, the accounting policies applied by the Group in the
preparation of these interim financial statements are the same as
those set out in the Company's audited financial statements for the
year ended December 31, 2022. These financial statements have been
prepared under the historical cost convention except for certain
financial and equity instruments that have been measured at fair
value.
These condensed financial
statements do not include all of the information required for a
complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Company's financial position and performance since the audited
financial statements for the year ended December 31,
2022.
Statutory accounts for the year
ended December 31, 2022 have been filed with the Registrar of
Companies in October 2023 and the auditor's report was unqualified,
did not contain any statement under Section 498(2) or 498(3) of the
Companies Act 2006, and contained a matter (material uncertainty in
regards to the going concern assumption) to which the auditors drew
attention without qualifying their report.
The condensed interim financial
statements are unaudited and have not been reviewed by the auditors
and were approved by the Board of Directors on March 27,
2024.
Going concern
The unaudited condensed
consolidated interim financial statements have been prepared on a
going concern basis, which contemplates the continuity of normal
business activity and the realization of the assets and the
settlement of liabilities in the normal course of
business.
To manage its cash balance, the
Group has access to credit facilities totalling CHF8.80 million
(approximately US$9.9 million as of March 28, 2023). The credit
facilities are in place with two different banks but with
materially the same conditions. The facilities are not limited in
time, can be terminated by either party at any time and allow
overdrafts and fixed cash advances with a duration of up to twelve
months. In case one or the other party terminates the agreement,
fixed cash advances become due upon their defined maturity date.
The facilities do not contain financial covenants, but they do
require the delivery of certain financial and operational
information within a defined timeframe after the balance sheet
date.
As of March 28, 2024, the Group
has drawn fixed advances amounting to CHF7.8 million and EUR0.4
million (CHF2.4 million as December 31, 2022) as
follows:
|
Term /
Maturity date
|
CHF
|
|
April 26, 2024
|
5.5 million
|
|
April 15, 2024
|
0.5 million
|
|
June 17, 2024
|
0.8 million
|
|
September 30, 2024
|
1.0 million
|
|
Term /
Maturity date
|
EUR
|
|
April 02, 2024
|
0.4 million
|
The Group's forecasts and
projections for the next 12 months reflect the very challenging
trading environment and show that the Group should be able to
operate within the level of its current facility for at least 12
months from the date of signature of these financial statements if
the facility drawdowns remain available. While the facilities are
not committed, the Board has not received any indication from
financing partners that the facilities are at risk of being
terminated. However, the credit facilities will be reduced by
CHF0.3 million to CHF8.5 million in total as of June 17,
2024.
The Board acknowledges the
uncommitted status of the facilities which could be terminated
without notice during the forecast period requiring the refinancing
of debts as per above maturity date indicates that a material
uncertainty exists that may cast significant doubt on the Group's
and Parent Company's ability to continue as a going concern, and
therefore the Group may not be able to realize its assets and
discharge its liabilities in the normal course of
business.
After considering the forecasts,
sensitivities, and mitigating actions available to management and
having regard to the risks and uncertainties to which the Group is
exposed (including the material uncertainty referred to above), the
Group's directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and operate within its credit facilities for the
period 12 months from date of signature. Accordingly, the financial
statements continue to be prepared on a going concern
basis.
Basis of consolidation
The Condensed Consolidated
Financial Statements comprise the financial statements of the
Company and its subsidiaries. Business combinations are accounted
for under the acquisition method.
New standards, interpretations and amendments
not yet effective for the current period
The following new standards and
amendments were effective for the first time in these financial
statements but did not have a material effect on the
Group:
• Disclosure of Accounting Policies (Amendments to IAS 1 and
IFRS Practice Statement 2);
• Classification of Liabilities as Current or Non-current
(Amendments to IAS 1);
• Definition of Accounting Estimates (Amendments to IAS 8);
and
• Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
3. Significant
accounting policies
The Company has applied the same
accounting policies and methods of computation in its interim
consolidated financial statements as in its 2022 financial
statements.
New and amended standards and
Interpretations issued by the IASB that will apply for the first
time in the next annual financial statements are not expected to
impact the Group as they are either not relevant to the Group's
activities or require accounting which is consistent with the
Group's current accounting policies.
Use of estimates and judgements
There have been no material
revisions to the nature and amounts of estimates of amounts
reported in prior periods.
4. Significant
events and transactions
a. Acquisition of
Tarn Pure
On January 12, 2023, HeiQ Plc,
completed the acquisition of the entire issued share capital of
Tarn-Pure Holdings Ltd ("Tarn-Pure"). Tarn-Pure is a UK-based
intellectual property company holding critical EU and UK regulatory
registrations to sell elemental copper and elemental silver for use
in disinfecting hygiene applications. The regulatory registrations
of Tarn-Pure are critical to HeiQ to ensure regulatory compliance
of its antimicrobial products long term. To acquire Tarn-Pure, HeiQ
paid the vendors £530,000 (approximately US$621,000) in cash with
an additional £317,000 (approximately US$372,000) satisfied through
the issuance of 455,435 new ordinary shares of 30p each in the
Company (the "Consideration Shares"), issued at a price of 69.6p
per share. A further US$244,000 of deferred consideration is
payable in cash in monthly instalments from February 2023 to
February 2025. The purchase price allocation has not been finalized
yet and is subject to possible changes in valuation of the assets
acquired. it will be completed in the 2023/2024 annual
report.
The following table provides an
overview of the preliminary purchase price allocation. It
summarizes the consideration paid, the fair value of assets
acquired, liabilities assumed, and goodwill arising on acquisition
at the acquisition date.
|
Preliminary purchase price
allocation
|
US$'000
|
|
Consideration:
|
|
|
Cash paid to
shareholders
|
621
|
|
Shares issued to
shareholders
|
372
|
|
Deferred consideration
|
244
|
|
Total Consideration
|
1,237
|
|
|
|
|
Fair value of net assets
acquired:
|
|
|
Inventory
|
13
|
|
Cash and cash
equivalents
|
12
|
|
Trade and other
receivables
|
12
|
|
Borrowings
|
(42)
|
|
Intangible assets identified on
acquisition:
|
|
|
Customer Relationship
|
123
|
|
Regulatory asset
|
682
|
|
Deferred tax liability on
intangible assets
|
(201)
|
|
Total net assets
|
599
|
|
Goodwill
|
638
|
|
Total
|
1,237
|
b. Disposal of Life
Material Latam, Ltda, Brazil
In July 2023, the Group sold 31%
of its share in Life Materials Latam Ltda, Brazil for a
consideration of US$nil. The Group's stake was reduced to 20% and,
as a result, the company is no longer consolidated.
c. Transfer of
shares in HeiQ AeoniQ GmbH to non-controlling interests
In July 2023, HeiQ Materials AG
reached an agreement with MAS to dispose of 1.5% of its
shareholding in HeiQ AeoniQ GmbH.
d. Foundation of
HeiQ AeoniQ Holding AG
The Group founded HeiQ AeoniQ
Holding AG Switzerland, which resides at Parkstrasse 1, 5234
Villigen. As at December 31, 2023, the Group holds 97%
ownership.
5.
Revenue
The Group's focus on materials
innovation which includes scientific research, manufacturing and
consumer ingredient branding. The primary source of revenue is the
production and sale of functional ingredients, materials and
finished goods. Other sources of revenue include research and
development, take-or-pay and exclusivity services.
The following table reconciles
HeiQ Group's revenue for the periods presented:
|
|
For the
six months ended
December 31,
|
For the
year ended
December 31,
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Revenue by type of
product
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Revenue recognized at point in
time
|
|
|
|
|
|
Functional ingredients
|
16,376
|
15,019
|
32,123
|
36,175
|
|
Functional materials
|
197
|
1,566
|
743
|
2,000
|
|
Functional consumer
goods
|
2,680
|
1,785
|
5,382
|
6,827
|
|
Services
|
189
|
-
|
1,169
|
160
|
|
Revenue recognized over
time
|
|
|
|
|
|
Services
|
1,805
|
1,274
|
2,330
|
2,040
|
|
Total revenue
|
21,247
|
19,644
|
41,747
|
47,202
|
Unsatisfied performance
obligations
The transaction prices allocated
to unsatisfied and partially unsatisfied obligations at December
31, 2023 are as set out below:
|
|
|
|
As at
December 31,
2023
|
As at
December 31,
2022
|
|
Unsatisfied performance
obligations
|
|
|
US$'000
|
US$'000
|
|
Exclusivity services
|
|
|
1,500
|
2,100
|
|
Research and development
services
|
|
|
3,360
|
3,750
|
|
Total unsatisfied performance
obligations
|
|
|
4,860
|
5,850
|
Management expects that 25 per
cent of the transaction price allocated to the unsatisfied
contracts as of 31 December 2023 will be recognized as revenue
during 2024 (US$1.2 million). The remaining 75 per cent, US$3.7
million, will be recognized in 2025 (US$1.1 million) and 2026
financial year (US$2.6 million).
Disclosure related to contracts with
customers
Contract assets and contract
liabilities are disclosed under Note 23 and Note 35, respectively.
Impairment losses recognized on any receivables or contract assets
arising from the Group's contracts with customers are disclosed
under Note 21 and Note 23, respectively.
6. Operating
Segments
Operating segments are reported in
a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker,
who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the
Board of Directors of the Company.
For management purposes, the Group
is organised into business units and the following reportable
segments:
|
Segment
|
Activity
|
|
Textiles & Flooring
|
Provide innovative ingredients to
make textiles & flooring more functional, durable and
sustainable.
|
|
Life Sciences
|
Offer biotech solutions to replace
harmful biocides in domestic, commercial, healthcare and industrial
usage, for a more balanced microbiome and environment.
|
|
Antimicrobials
|
Functionalize by enhancing hygiene
of different hard surfaces in everyday products and our
surroundings.
|
|
Other activities
|
All other activities of the Group
including Innovation Services, Venture Business Development, and
other non-allocated functions.
|
In 2023 new overhead allocation
rules were introduced and as a result more overhead costs were
allocated to segments. 2022 segment revenue and profits are
restated below using the new rules to allow for like for like
comparison.
Segment revenues and profits
The following is an analysis of
the Group's revenue and results by reportable segment:
|
Six months ended December 31,
2023
|
Textiles & Flooring
US$'000
|
Life Sciences
US$'000
|
Antimicrobials
US$'000
|
Other activities
US$'000
|
Total
US$'000
|
|
Revenue
|
15,809
|
2,363
|
1,776
|
1,299
|
21,247
|
|
Operating loss
|
(2,005)
|
(1,019)
|
584
|
(3,142)
|
(5,582)
|
|
Finance result
|
|
|
|
|
(986)
|
|
Loss before taxation
|
|
|
|
|
(6,568)
|
|
Taxation
|
|
|
|
|
(884)
|
|
Loss after taxation
|
|
|
|
|
(7,452)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
Property, plant and
equipment
|
282
|
190
|
23
|
247
|
742
|
|
Right-of use assets
|
76
|
75
|
20
|
356
|
527
|
|
Intangible assets
|
144
|
287
|
391
|
312
|
1,134
|
|
Impairment loss /
(reversal)
|
|
|
|
|
|
|
Property, plant and
equipment
|
-
|
84
|
-
|
-
|
84
|
|
Intangible assets
|
-
|
-
|
-
|
(90)
|
(90)
|
|
Six months ended December 31,
2022
|
Textiles & Flooring
US$'000
|
Life Sciences
US$'000
|
Antimicrobials
US$'000
|
Other activities
US$'000
|
Total
US$'000
|
|
Revenue
|
14,646
|
2,273
|
1,154
|
1,571
|
19,644
|
|
Operating loss
|
(6,913)
|
(5,000)
|
(9,648)
|
(6,112)
|
(27,673)
|
|
Finance result
|
|
|
|
|
(508)
|
|
Loss before taxation
|
|
|
|
|
(28,181)
|
|
Taxation
|
|
|
|
|
275
|
|
Loss after taxation
|
|
|
|
|
(27,906)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
Property, plant and
equipment
|
126
|
162
|
11
|
339
|
638
|
|
Right-of use assets
|
48
|
73
|
18
|
302
|
441
|
|
Intangible assets
|
38
|
276
|
350
|
105
|
769
|
|
Impairment loss
|
|
|
|
|
|
|
Property, plant and
equipment
|
-
|
730
|
-
|
-
|
730
|
|
Intangible assets
|
-
|
2,402
|
8,247
|
1,002
|
11,651
|
|
Year ended December 31,
2023
|
Textiles & Flooring
US$'000
|
Life Sciences
US$'000
|
Antimicrobials
US$'000
|
Other activities
US$'000
|
Total
US$'000
|
|
Revenue
|
31,340
|
4,842
|
2,940
|
2,625
|
41,747
|
|
Operating loss
|
(888)
|
(1,712)
|
(1,126)
|
(7,858)
|
(11,584)
|
|
Finance result
|
|
|
|
|
(1,365)
|
|
Loss before taxation
|
|
|
|
|
(12,949)
|
|
Taxation
|
|
|
|
|
(1,030)
|
|
Loss after taxation
|
|
|
|
|
(13,979)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
Property, plant and
equipment
|
580
|
361
|
38
|
474
|
1,453
|
|
Right-of use assets
|
166
|
149
|
42
|
648
|
1,005
|
|
Intangible assets
|
288
|
564
|
792
|
559
|
2,203
|
|
Impairment loss /
(reversal)
|
|
|
|
|
|
|
Property, plant and
equipment
|
-
|
84
|
-
|
-
|
84
|
|
Intangible assets
|
-
|
-
|
-
|
(90)
|
(90)
|
|
Year ended December 31,
2022
|
Textiles & Flooring
US$'000
|
Life Sciences
US$'000
|
Antimicrobials
US$'000
|
Other activities
US$'000
|
Total
US$'000
|
|
Revenue
|
34,184
|
6,164
|
4,182
|
2,672
|
47,202
|
|
Operating loss
|
(4,231)
|
(5,537)
|
(10,116)
|
(9,361)
|
(29,245)
|
|
Finance result
|
|
|
|
|
(590)
|
|
Loss before taxation
|
|
|
|
|
(29,835)
|
|
Taxation
|
|
|
|
|
21
|
|
Loss after taxation
|
|
|
|
|
(29,814)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
Property, plant and
equipment
|
334
|
335
|
28
|
585
|
1,282
|
|
Right-of use assets
|
123
|
145
|
42
|
628
|
938
|
|
Intangible assets
|
74
|
550
|
699
|
112
|
1,435
|
|
Impairment loss
|
|
|
|
|
|
|
Property, plant and
equipment
|
-
|
730
|
-
|
-
|
730
|
|
Intangible assets
|
-
|
2,402
|
8,247
|
1,002
|
11,651
|
Segment revenue reported above
represents revenue generated from external customers. There were no
intersegment sales in the six months ended December 31, 2023 (2022:
nil).
Geographic information
|
|
|
For the
six months ended
December 31,
|
For the
year ended
December 31,
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Revenue by region
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
North & South
America
|
|
9,010
|
9,327
|
18,704
|
20,425
|
|
Asia
|
|
6,914
|
4,421
|
11,712
|
13,376
|
|
Europe
|
|
5,243
|
5,782
|
11,091
|
13,109
|
|
Others
|
|
80
|
114
|
240
|
292
|
|
Total revenue
|
|
21,247
|
19,644
|
41,747
|
47,202
|
|
|
|
As at December 31,
|
As at December 31,
|
|
|
|
2023
|
2022
|
|
Non-current assets by
region
|
|
US$'000
|
US$'000
|
|
Europe
|
|
27,767
|
22,290
|
|
Asia
|
|
2,370
|
8,102
|
|
North & South
America
|
|
7,512
|
7,734
|
|
Others
|
|
369
|
612
|
|
Total non-current assets
|
|
38,018
|
38,738
|
Information about major customers
During the six months ended
December 31, 2023, no customers individually totalled more than 10%
of total revenues (2022: none).
7. Cost of
sales
|
|
|
For the six months ended December
31,
|
For the year ended
December 31,
|
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
Cost of sales
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
Material expenses
|
|
8,003
|
8,829
|
18,354
|
20,942
|
|
|
Personnel expenses
|
|
1,689
|
1,354
|
3,252
|
2,830
|
|
|
Depreciation of property, plant and
equipment
|
|
291
|
310
|
643
|
652
|
|
|
Other costs of sales
|
|
4,194
|
7,125
|
4,038
|
9,321
|
|
|
Total cost of sales
|
|
14,177
|
17,618
|
26,287
|
33,745
|
|
Other costs of goods sold include
freight and custom costs, warehousing and allowances on
inventory.
8. Other
income
|
|
|
For the six months ended
December 31,
|
For the year ended
December 31,
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Other income
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Gain on disposal of property plant
and equipment
|
|
9
|
12
|
21
|
21
|
|
Gain on disposal of
investments
|
|
138
|
-
|
138
|
-
|
|
Foreign exchange gains
|
|
(517)
|
1,205
|
-
|
3,539
|
|
Fair value gain on derivative
liabilities
|
|
453
|
371
|
701
|
371
|
|
Income from out-of-court
settlement
|
|
2,750
|
-
|
2,750
|
-
|
|
Other income
|
|
451
|
496
|
620
|
901
|
|
Total other income
|
|
3,284
|
2,084
|
4,230
|
4,832
|
In November 2023, the Group
reached a settlement of the litigation with ICP, which includes
dismissal of claims and counterclaims by both parties with
prejudice. ICP has agreed to pay HeiQ Plc a total of USD $2.75
million. The settlement refers to a complaint filed by the Group in
October 2022 for breaching its Exclusive Agreement
terms.
Foreign exchange gains previously
reported under other income have been reclassified to finance
income (Note 12) during the 2023 reporting period so as to more
fairly present the nature of such items.
9. Selling and
general administration expenses
|
Selling and general administration
expenses
|
|
For the six months ended
December 31,
|
For the year ended
December 31,
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
|
Personnel expenses
|
|
6,442
|
7,169
|
13,291
|
14,977
|
|
|
Depreciation of property, plant and
equipment
|
|
451
|
328
|
810
|
630
|
|
|
Amortization of intangible
assets
|
|
1,134
|
769
|
2,203
|
1,435
|
|
|
Depreciation of right-of-use
assets
|
|
527
|
441
|
1,005
|
938
|
|
|
Net credit losses on financial
assets and contract assets
|
|
171
|
85
|
171
|
85
|
|
|
Other
|
|
6,594
|
8,161
|
12,102
|
12,904
|
|
|
Total selling and general
administration expenses
|
|
15,319
|
16,953
|
29,582
|
30,969
|
|
Other selling and general
administration expenses include costs for infrastructure,
professional services and marketing as well as R&D and
laboratory related costs, information technology & data
expenses, sales representative & distribution
expenses.
10. Personnel
expenses
|
|
|
For the six months ended
December 31,
|
For the year ended
December 31,
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Personnel expenses
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Wages & salaries
|
|
7,323
|
7,344
|
14,547
|
15,274
|
|
Social security & other payroll
taxes
|
|
766
|
1,061
|
1,568
|
1,685
|
|
Pension costs
|
|
(160)
|
466
|
94
|
710
|
|
Share-based payments
|
|
202
|
(348)
|
334
|
138
|
|
Total personnel expenses
|
|
8,131
|
8,523
|
16,543
|
17,807
|
|
Reported as cost of sales (Note
7)
|
|
1,689
|
1,354
|
3,252
|
2,830
|
|
Reported as selling and general
administration expense (Note 9)
|
|
6,442
|
7,169
|
13,291
|
14,977
|
|
Total personnel expenses
|
|
8,131
|
8,523
|
16,543
|
17,807
|
The pension costs for the six
months ended December 31, 2023 were impacted by a curtailment gain
(US$141,000) and further income from a plan amendment (US$341,000)
as explained further in Note 28.
11. Other expenses
|
|
|
For the six months ended
December 31,
|
For the year ended
December 31,
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Other expenses
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Foreign exchange losses
|
|
(928)
|
1,429
|
-
|
3,050
|
|
Loss on disposal of property, plant
and equipment
|
|
76
|
5
|
105
|
16
|
|
Transaction costs relating to
mergers and acquisitions
|
|
-
|
50
|
23
|
50
|
|
Write off intangible
assets
|
|
1,388
|
897
|
1,402
|
897
|
|
Other
|
|
87
|
68
|
168
|
171
|
|
Total other expenses
|
|
623
|
2,449
|
1,698
|
4,184
|
The write off mainly relates to
patents acquired in view of the commercial partnership with ICP. As
the partnership has been ended, the asset's economic benefits were
consumed.
Foreign exchange losses previously
reported under other expenses have been reclassified to finance
costs (Note 13) during the 2023 reporting period so as to more
fairly present the nature of such items.
12. Finance income
|
|
|
For the six months ended
December 31
|
For the year ended
December 31,
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Finance income
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Interest income
|
|
11
|
4
|
14
|
5
|
|
Gains on foreign currency
transactions
|
|
39
|
238
|
39
|
678
|
|
Other
|
|
19
|
(1)
|
21
|
-
|
|
Total finance income
|
|
69
|
241
|
74
|
683
|
13. Finance costs
|
|
|
For the six months ended
December 31
|
For the year ended
December 31,
|
|
Finance costs
|
|
2023
|
2022
|
2023
|
2022
|
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Lease finance expense
|
|
110
|
82
|
205
|
163
|
|
Interest on borrowings
|
|
190
|
68
|
312
|
110
|
|
Bank fees
|
|
104
|
65
|
271
|
98
|
|
Loss on foreign currency
transactions
|
|
651
|
534
|
651
|
902
|
|
Total finance costs
|
|
1,055
|
749
|
1,439
|
1,273
|
14. Income tax
The components of the provision for
taxation on income included in the "Statement of profit or loss and other
comprehensive income" are summarized below:
|
|
|
For the six months ended
December 31
|
For the year ended December
31
|
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Current income tax
expense
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Swiss corporate income
taxes
|
|
(70)
|
28
|
(49)
|
58
|
|
United States state and federal
taxes
|
|
355
|
10
|
456
|
393
|
|
Taiwan corporate income
taxes
|
|
73
|
40
|
154
|
118
|
|
Belgium corporate income
taxes
|
|
(53)
|
(199)
|
30
|
(123)
|
|
Germany corporate income
taxes
|
|
(24)
|
68
|
(24)
|
51
|
|
Others
|
|
34
|
(16)
|
45
|
63
|
|
Total current income tax
expense
|
|
315
|
(69)
|
612
|
560
|
|
Deferred income tax
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Switzerland
|
|
698
|
159
|
676
|
90
|
|
United States
|
|
(41)
|
(535)
|
(45)
|
(606)
|
|
China
|
|
8
|
245
|
6
|
117
|
|
Austria
|
|
5
|
24
|
3
|
20
|
|
Belgium
|
|
(63)
|
(65)
|
(131)
|
(136)
|
|
Others
|
|
(38)
|
(34)
|
(91)
|
(66)
|
|
Total deferred income tax expense
(income)
|
|
569
|
(206)
|
418
|
(581)
|
|
|
|
|
|
|
|
|
Total income tax expense
(income)
|
|
884
|
(275)
|
1,030
|
(21)
|
|
|
|
|
|
|
| |
|
|
|
As at December 31,
|
As at December 31,
|
|
|
|
2023
|
2022
|
|
Net tax
(assets)/liabilities
|
US$'000
|
US$'000
|
|
Opening balance (prepaid
taxes)
|
|
(343)
|
51
|
|
Assumed on asset
acquisition
|
|
-
|
(32)
|
|
Income tax expense for the
year
|
|
612
|
560
|
|
Taxes paid
|
|
(404)
|
(870)
|
|
Foreign currency
differences
|
|
(5)
|
(52)
|
|
Net tax
(asset)/liability
|
|
(140)
|
(343)
|
|
|
|
|
|
|
|
|
As at December 31,
|
As at December 31,
|
|
|
|
2023
|
2022
|
|
Net tax (assets)
liabilities
|
US$'000
|
US$'000
|
|
Prepaid income taxes
|
|
(746)
|
(657)
|
|
Income tax liabilities
|
|
606
|
314
|
|
Net tax
(asset)/liability
|
|
(140)
|
(343)
|
15. Earnings per
share
The calculation of basic earnings
per share is based on the following data:
|
|
For the six months ended
December 31,
|
For the year ended
December 31,
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Loss attributable to the ordinary
equity holders of the parent entity
(US$'000)
|
(7,147)
|
(27,546)
|
(13,583)
|
(29,251)
|
|
Weighted average number of ordinary
shares for the purposes of basic earnings per share
|
140,537,907
|
135,084,870
|
140,522,934
|
133,426,953
|
|
Basic loss per share
(cents)
|
(5.09)
|
(20.39)
|
(9.67)
|
(21.92)
|
The effect of share options is
anti-dilutive and therefore not disclosed.
Basic earnings per share is
calculated by dividing the profit/loss after tax attributable to
the equity holders of the Company by the weighted average number of
shares in issue during the year. The effect of share options is
anti-dilutive and therefore not disclosed.
16. Intangible assets
|
|
Goodwill
|
Internally developed
assets
|
Brand names and customer
relations
|
Acquired technologies
|
Other intangible assets
|
Total
|
|
Cost
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
As at January 1, 2022
|
21,382
|
3,509
|
4,503
|
3,180
|
2,332
|
34,906
|
|
Additions arising from internal
development
|
-
|
2,165
|
-
|
-
|
-
|
2,165
|
|
Other acquisitions
|
-
|
-
|
-
|
-
|
1,700
|
1,700
|
|
Disposals / write-offs
|
-
|
(85)
|
-
|
-
|
(812)
|
(897)
|
|
Currency translation
differences
|
(795)
|
5
|
(160)
|
(165)
|
14
|
(1,101)
|
|
As at December 31, 2022
|
20,587
|
5,594
|
4,343
|
3,015
|
3,234
|
36,773
|
|
Additions arising from internal
development
|
-
|
1,006
|
-
123
|
-
|
-
|
1,006
|
|
Business combinations
|
641
|
-
|
123
|
-
|
682
|
1,446
|
|
Other acquisitions
|
-
|
-
|
-
|
-
|
143
|
143
|
|
Disposals / write-offs
|
-
|
(228)
|
-
|
-
|
(1,441)
|
(1,669)
|
|
Reclassifications
|
-
|
93
|
-
|
-
|
-
|
93
|
|
Currency translation
differences
|
494
|
579
|
100
|
95
|
161
|
1,429
|
|
As at December 31, 2023
|
21,722
|
7,044
|
4,566
|
3,110
|
2,779
|
39,221
|
|
Amortization and accumulated
impairment losses
|
|
|
|
|
As at January 1, 2022
|
2,305
|
474
|
602
|
234
|
518
|
4,133
|
|
Amortization for the
year
|
-
|
198
|
695
|
334
|
208
|
1,435
|
|
Impairment loss
|
10,576
|
880
|
73
|
-
|
122
|
11,651
|
|
Currency translation
differences
|
(750)
|
3
|
(72)
|
(45)
|
(24)
|
(888)
|
|
As at December 31, 2022
|
12,131
|
1,555
|
1,298
|
523
|
824
|
16,331
|
|
Amortization for the
year
|
-
|
715
|
721
|
334
|
433
|
2,203
|
|
Disposals / write-offs
|
-
|
(25)
|
-
|
-
|
(242)
|
(267)
|
|
Reclassifications
|
-
|
93
|
-
|
.
|
-
|
93
|
|
Impairment loss
|
-
|
(90)
|
-
|
-
|
-
|
(90)
|
|
Currency translation
differences
|
263
|
190
|
(9)
|
(6)
|
24
|
462
|
|
As at December 31, 2023
|
12,394
|
2,438
|
2,010
|
851
|
1,039
|
18,732
|
|
Net book value
|
|
|
|
|
|
|
|
As at December 31, 2022
|
8,456
|
4,039
|
3,045
|
2,492
|
2,410
|
20,442
|
|
As at December 31, 2023
|
9,328
|
4,606
|
2,556
|
2,259
|
1,740
|
20,489
|
17. Property, plant and
equipment
|
|
Machinery and equipment
|
Motor vehicles
|
Computers and software
|
Furniture and fixtures
|
Land and buildings
|
Total
|
|
Cost
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
As at January 1, 2022
|
7,288
|
536
|
914
|
474
|
1,523
|
10,735
|
|
Additions
|
2,272
|
26
|
197
|
50
|
2,736
|
5,280
|
|
Disposals
|
(69)
|
(12)
|
-
|
-
|
-
|
(81)
|
|
Reclassifications
|
(407)
|
59
|
-
|
348
|
-
|
-
|
|
Currency translation
differences
|
(233)
|
(1)
|
(21)
|
(23)
|
(91)
|
(369)
|
|
As at December 31, 2022
|
8,851
|
608
|
1,090
|
849
|
4,168
|
15,566
|
|
Additions
|
1,167
|
113
|
32
|
60
|
41
|
1,413
|
|
Disposals
|
(976)
|
(57)
|
(8)
|
(15)
|
-
|
(1,056)
|
|
Reclassifications
|
(37)
|
-
|
-
|
37
|
-
|
-
|
|
Currency translation
differences
|
374
|
9
|
97
|
49
|
68
|
597
|
|
As at December 31, 2023
|
9,379
|
673
|
1,211
|
980
|
4,277
|
16,520
|
|
Depreciation and accumulated
impairment losses
|
|
|
|
|
|
As at January 1, 2022
|
2,723
|
330
|
619
|
86
|
112
|
3,870
|
|
Depreciation for the
year
|
763
|
90
|
218
|
83
|
128
|
1,282
|
|
Eliminated on disposal
|
(27)
|
(5)
|
-
|
-
|
-
|
(32)
|
|
Impairment loss
|
730
|
-
|
-
|
-
|
-
|
730
|
|
Reclassifications
|
(222)
|
-
|
-
|
222
|
-
|
-
|
|
Currency translation
differences
|
(67)
|
-
|
(9)
|
(3)
|
(7)
|
(86)
|
|
As at December 31, 2022
|
3,900
|
415
|
828
|
388
|
233
|
5,764
|
|
Depreciation for the
year
|
920
|
84
|
103
|
108
|
238
|
1,453
|
|
Eliminated on disposal
|
(84)
|
(33)
|
(2)
|
(8)
|
-
|
(127)
|
|
Impairment loss
|
34
|
21
|
6
|
23
|
-
|
84
|
|
Reclassifications
|
7
|
-
|
(6)
|
(1)
|
-
|
-
|
|
Currency translation
differences
|
214
|
5
|
81
|
30
|
13
|
343
|
|
As at December 31, 2023
|
4,991
|
492
|
1,010
|
540
|
484
|
7,517
|
|
Net book value
|
|
|
|
|
|
|
|
As at December 31, 2022
|
4,951
|
193
|
262
|
461
|
3,935
|
9,802
|
|
As at December 31, 2023
|
4,388
|
181
|
201
|
440
|
3,793
|
9,003
|
18. Right-of-use
assets
|
|
Land and buildings
|
Motor vehicles
|
Machinery and equipment
|
Total
|
|
Cost
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
As at January 1, 2022
|
8,913
|
611
|
341
|
9,865
|
|
Additions
|
86
|
174
|
1,921
|
2,181
|
|
Disposals due to expiry of
lease
|
-
|
(36)
|
-
|
(36)
|
|
Disposals due to business
combination*
|
(467)
|
-
|
-
|
(467)
|
|
Modification to lease
terms**
|
(1,199)
|
-
|
-
|
(1,199)
|
|
Currency translation
differences
|
(381)
|
(67)
|
(26)
|
(474)
|
|
As at December 31, 2022
|
6,952
|
682
|
2,236
|
9,870
|
|
Additions
|
99
|
140
|
858
|
1,096
|
|
Disposals due to expiry of
lease
|
(330)
|
(28)
|
(32)
|
(390)
|
|
Modification to lease terms
***
|
(253)
|
(110)
|
-
|
(362)
|
|
Currency translation
differences
|
311
|
33
|
201
|
545
|
|
As at December 31, 2023
|
6,780
|
717
|
3,262
|
10,759
|
|
Depreciation
|
|
|
|
|
|
As at January 1, 2022
|
1,716
|
109
|
66
|
1,891
|
|
Depreciation for the year
|
730
|
140
|
68
|
938
|
|
Disposals due to expiry of
lease
|
-
|
(36)
|
-
|
(36)
|
|
Modification to lease
terms**
|
(693)
|
-
|
-
|
(693)
|
|
Currency translation
differences
|
(34)
|
(6)
|
(9)
|
(49)
|
|
As at December 31, 2022
|
1,719
|
207
|
125
|
2,051
|
|
Depreciation for the
year
|
703
|
157
|
145
|
1,005
|
|
Disposals due to expiry of
lease
|
(301)
|
(25)
|
(33)
|
(359)
|
|
Modification to lease
terms***
|
(173)
|
(41)
|
-
|
(214)
|
|
Currency translation
differences
|
125
|
11
|
7
|
144
|
|
As at December 31, 2023
|
2,073
|
309
|
245
|
2,627
|
|
Net book value
|
|
|
|
|
|
As at December 31, 2022
|
5,233
|
475
|
2,111
|
7,819
|
|
As at December 31, 2023
|
4,707
|
408
|
3,017
|
8,132
|
*With the acquisition of ChemTex
Laboratories' property, plant and equipment, the Group no longer
has a lease liability with a third party.
**The Group agreed to shorten the
agreed lease terms of two existing leases from 2032 to 2027. These
modifications have resulted in a reduction in the total amounts
payable under the leases and a reduction to both of the
right-of-use assets and lease liabilities with effect from the date
of modification.
***The Group terminated certain
lease agreements prior to their expiry resulting in the disposal of
the right-of-use assets and related liabilities. The disposal
resulted in a US$15,000 net gain.
19. Other non-current
assets
|
|
|
As at
|
|
As at
|
|
|
|
December 31, 2023
|
|
December 31, 2022
|
|
Other non-current assets
|
|
US$'000
|
|
US$'000
|
|
Deposits
|
|
75
|
|
80
|
|
Other prepayments
|
|
7
|
|
57
|
|
Other non-current assets
|
|
82
|
|
137
|
20. Inventories
|
|
|
As at
|
|
As at
|
|
|
|
December 31, 2023
|
|
December 31, 2022
|
|
Inventories
|
|
US$'000
|
|
US$'000
|
|
Functional ingredients &
materials
|
|
9,154
|
|
11,420
|
|
Functional consumer goods
|
|
2,096
|
|
1,748
|
|
Total inventories
|
|
11,250
|
|
13,168
|
21. Trade receivables
|
|
|
As at
|
As at
|
|
|
|
December 31, 2023
|
December 31, 2022
|
|
Trade receivables
|
|
US$'000
|
US$'000
|
|
Not past due
|
|
3,154
|
2,788
|
|
< 30 days
|
|
1,269
|
520
|
|
31-60 days
|
|
344
|
781
|
|
61-90 days
|
|
549
|
215
|
|
91-120 days
|
|
69
|
180
|
|
>120 days
|
|
776
|
2,407
|
|
Total trade receivables
|
|
6,161
|
6,891
|
|
Provision for expected credit
losses
|
|
(488)
|
(404)
|
|
Total trade receivables
(net)
|
|
5,673
|
6,487
|
22. Other receivables and
prepayments
|
|
|
As at
|
|
As at
|
|
|
|
December 31, 2023
|
|
December 31, 2022
|
|
Total other receivables and
prepayments
|
US$'000
|
|
US$'000
|
|
Contract assets
|
|
34
|
|
115
|
|
Receivables from tax
authorities
|
|
2,092
|
|
1,864
|
|
Prepayments
|
|
1,612
|
|
1,023
|
|
Other receivables
|
|
611
|
|
1,260
|
|
Total other receivables and
prepayments
|
|
4,349
|
|
4,262
|
23. Contract assets
Amounts relating to contract
assets are balances due from customers under construction contracts
that arise when the Group receives payments from customers in line
with a series of performance-related milestones. The Group
recognizes a contract asset for any work performed. Any amount
previously recognized as a contract asset is reclassified to trade
receivables at the point at which it is invoiced to the
customer.
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Contract assets
|
US$'000
|
US$'000
|
|
Research and development
services
|
34
|
65
|
|
Exclusivity services
|
-
|
50
|
|
Total contract assets
|
34
|
115
|
|
Current assets
|
34
|
115
|
|
Non-current assets
|
-
|
-
|
|
Total contract assets
|
34
|
115
|
Revenues related to research and
development services were recognized at the point of delivering
proof of concept and completing testing services. Performance
obligations related to exclusivity services were deemed fulfilled
by the Group upon completion of the contractual term. Payment for
the above services is not due from the customer yet and therefore a
contract asset is recognized.
The directors of the Company
always measure the loss allowance on amounts due from customers at
an amount equal to lifetime ECL, taking into account the historical
default experience, the nature of the customer and where relevant,
the sector in which they operate. There has been no change in the
estimation techniques or significant assumptions made during the
current reporting period in assessing the loss allowance for the
amounts due from customers under construction contracts.
Lifetime Expected credit losses on contract
assets
The following table details the
risk profile of amounts due from customers based on the Group's
provision matrix. Based on the historic default experience, the
following expected credit loss has been recognized:
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Expected credit loss
|
US$'000
|
US$'000
|
|
Expected credit loss
rate
|
0%
|
0%
|
|
Estimated total gross carrying
amount at default
|
34
|
115
|
|
Lifetime ECL
|
-
|
-
|
|
Net carrying amount
|
34
|
115
|
24. Issued share capital and share premium
Movements in the Company's share
capital and share premium account were as follows:
|
|
|
Number of shares
|
Share capital
|
Share premium
|
Totals
|
|
|
|
No.
|
US$'000
|
US$'000
|
US$'000
|
|
Balance as of January 1,
2022
|
|
130,583,536
|
51,523
|
144,191
|
195,714
|
|
Issue of shares to vendors of Life
Materials
|
|
347,552
|
141
|
471
|
612
|
|
Issue of shares as deferred
consideration
|
|
3,461,615
|
1,359
|
2,921
|
4,280
|
|
Issue of shares to Advisory Board
and others
|
|
164,721
|
60
|
175
|
235
|
|
Issue of shares to vendors of
ChemTex Labs
|
|
2,176,884
|
795
|
1,177
|
1,972
|
|
Issue of shares to vendors of
Chrisal
|
|
3,348,164
|
1,223
|
1,838
|
3,061
|
|
Balance as at December 31,
2022
|
|
140,082,472
|
55,101
|
150,773
|
205,874
|
|
Issue of shares Tarn Pure
(a)
|
|
455,435
|
160
|
212
|
372
|
|
Balance as at December 31,
2023
|
|
140,537,907
|
55,261
|
150,985
|
206,246
|
The par value of all shares is
£0.30. All shares in issue were allotted, called up and fully
paid.
The share premium account
represents the amount received on the issue of ordinary shares by
the Company in excess of their nominal value and is
non-distributable.
The Company issued new ordinary
shares for the following:
(a) On January 12,
2023, HeiQ plc completed the acquisition of 100% of the issued
share capital and voting rights of Tarn Pure for a total
consideration of US$1,237,000. The purchase consideration was
payable partly by the issue of 455,435 new ordinary shares for
(US$372,000). See Note 4 for details.
25. Share-based
payments
Equity-settled Share Option
Scheme
As of December 2023, 1,062,738
options vested with a strike price of £1.23. Following the vesting and employee departures, the number of
options expected to vest dropped to 938,502 as per December 31,
2023 (June 30, 2023: 2,279,236; December 31, 2022: 2,497,281). The
expense arising from these share-based payment transactions was
US$49,000 for the six months ended December 31, 2023 and US$
181,000 for the year ended December 31, 2023 which compares against
an income of US$12,000 for the year ended December 31, 2022
following a drop in market expectations during the second half of
2022. In the six months ended June 30, 2022, the Group incurred an
expense of US$415,000.
Details of the share options
outstanding and exercisable during the year are as
follows:
|
|
As at
December 31, 2023
|
|
As at
December 31, 2022
|
|
|
Number of options
|
Weighted average exercise price
(£)
|
|
Number of options
|
Weighted average exercise price
(£)
|
|
Outstanding at beginning of
year
|
11,525,911
|
1.05
|
|
8,707,658
|
1.14
|
|
|
Granted during the year
|
|
|
|
3,349,125
|
0.83
|
|
|
Forfeited during the
year
|
(2,289,440)
|
1.06
|
|
(530,872)
|
1.12
|
|
|
Lapsed during the year
|
(3,842,184)
|
1.23
|
|
-
|
-
|
|
|
Vesting during the year
|
(1,062,738)
|
1.23
|
|
-
|
-
|
|
|
Outstanding at the end of the
year
|
4,331,549
|
0.84
|
|
11,525,911
|
1.05
|
|
|
|
As at
December 31, 2023
|
|
As at
December 31, 2022
|
|
|
Number of options
|
Weighted average exercise price
(£)
|
|
Number of options
|
Weighted average exercise price
(£)
|
|
Exercisable at beginning of
year
|
-
|
-
|
|
-
|
-
|
|
|
Vesting during the year
|
1,062,738
|
1.23
|
|
-
|
-
|
|
|
Exercisable at the end of the
year
|
1,062,738
|
1.23
|
|
-
|
-
|
|
Other share-based payments
Remuneration of US$764,000 in
relation to the acquisition of Life Materials Technologies Limited
is linked to a service period of five years. An expense of
US$78,000 was recognized in the six months ended December 31, 2023
(year ended December 31, 2023: US$153,000; year ended December 31,
2022: US$150,000). The remainder of US$382,000 is expected to be
expensed over the period from January 1, 2024, to June 30,
2026.
26. Other reserves
Other reserves comprise the
share-based payment reserve, the merger reserve, the currency
translation reserve and the other reserve.
The retained deficit comprises all
other net gains and losses and transactions with owners not
recognized elsewhere.
Movements in the other reserves
were as follows:
|
|
|
Share- based payment
reserve
|
Merger reserve
|
Currency translation
reserve
|
Other reserve
|
Total Other reserves
|
|
|
Note
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Balance at January 1,
2022
|
|
474
|
(126,912)
|
387
|
(1,144)
|
(127,195)
|
|
Other comprehensive
(loss)/income
|
|
-
|
-
|
(1,914)
|
1,104
|
(810)
|
|
Total
comprehensive (loss)/income for the year
|
|
-
|
-
|
(1,914)
|
1,104
|
(810)
|
|
Share-based payment
charges
|
25
|
(12)
|
-
|
-
|
-
|
(12)
|
|
Transactions with owners
|
|
(12)
|
-
|
-
|
-
|
(12)
|
|
Balance at December 31,
2022
|
|
462
|
(126,912)
|
(1,527)
|
(40)
|
(128,017)
|
|
Other comprehensive
(loss)/income
|
|
-
|
-
|
975
|
31
|
1,006
|
|
Total
comprehensive (loss)/income for the period
|
|
-
|
-
|
975
|
31
|
1,006
|
|
Share-based payment
charges
|
25
|
181
|
-
|
-
|
-
|
181
|
|
Transactions with owners
|
|
181
|
-
|
-
|
-
|
181
|
|
Balance at December 31,
2023
|
|
643
|
(126,912)
|
(552)
|
(9)
|
(126,830)
|
|
|
|
|
|
|
|
| |
The share-based payment reserve
arises from the requirement to fair value the issue of share
options at grant date. Further details of share options are
included at Note 25.
The currency translation reserve
represents cumulative foreign exchange differences arising from the
translation of the financial statements of foreign subsidiaries and
is not distributable by way of dividends.
Dividend paid by subsidiary
In October 2023, HeiQ Chrisal N.V.
declared and paid a dividend of US$42,000 of which 29% or US$12,000
was paid to minority shareholders.
27. Lease liabilities
Future minimum lease payments
associated with leases were as follows:
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Lease payments
|
US$'000
|
US$'000
|
|
Not later than one year
|
1,211
|
1,301
|
|
Later than one year and not later
than five years
|
3,665
|
3,813
|
|
Later than five years
|
3,542
|
3,387
|
|
Total minimum lease
payments
|
8,419
|
8,501
|
|
Less: Future finance
charges
|
(615)
|
(679)
|
|
Present value of minimum lease
payments
|
7,805
|
7,822
|
|
|
|
|
|
Later than one year and not later
than five years
|
1,128
|
1,264
|
|
Later than five years
|
6,677
|
6,558
|
|
Total minimum lease
payments
|
7,805
|
7,822
|
28. Pensions and other
post-employment benefit plans
In February 2023, nine employees
were made redundant which resulted in a curtailment gain
US$141,000. The valuation was based on the participants data as of
year-end 2022 and the valuation assumptions as of end of February
2023.
In October 2023, the Board of
Trustees of the AXA pension fund decided that a new enveloping
conversion rate of 5.20% will apply to retirements from 1 January
2025 for men and women aged 65. For retirements up to the end of
2024, the split conversion rates of 6.80% for mandatory savings
capital and 5.00% for men aged 65 and 4.88% for women aged 64 for
supplementary savings capital will continue to apply. The decision
was accounted for as a plan amendment at the time the decision was
made. The valuation was based on the participants data as at
December 31, 2023 and the valuation assumptions as at October 31,
2023. The impact was recognized as a plan amendment and a gain of
US$341,000.
Net benefit obligations
The components of the net defined
benefits obligations included in non-current liabilities are as
follows:
|
|
|
As at
|
|
As at
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2023
|
|
2022
|
|
|
|
US$'000
|
|
US$'000
|
|
Fair value of plan
assets
|
|
8,126
|
|
9,616
|
|
Defined benefit
obligations
|
|
(9,032)
|
|
(10,568)
|
|
Funded status (net
liability)
|
|
(906)
|
|
(952)
|
|
|
|
|
|
|
|
Duration (years)
|
|
14.6
|
|
13.8
|
|
Expected benefits payable in
following year
|
|
(352)
|
|
(389)
|
|
|
|
|
|
|
|
|
|
Year ended
|
|
Year ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2023
|
|
2022
|
|
Development of obligations and
assets
|
|
US$'000
|
|
US$'000
|
|
Present value of funded
obligations, beginning of year
|
|
(10,568)
|
|
(13,003)
|
|
Employer service cost
|
|
(417)
|
|
(571)
|
|
Employee contributions
|
|
(321)
|
|
(352)
|
|
Past service gain
|
|
341
|
|
-
|
|
Curtailments/Settlements
|
|
141
|
|
-
|
|
Interest cost
|
|
(236)
|
|
(45)
|
|
Benefits
paid/(refunded)
|
|
3,405
|
|
522
|
|
Actuarial (loss)/gain on benefit
obligation
|
|
(448)
|
|
2,562
|
|
Currency (loss)/gain
|
|
(937)
|
|
319
|
|
Present value of funded
obligations, end of year
|
|
(9,032)
|
|
(10,568)
|
|
|
|
|
|
|
|
Defined benefit obligation
participants
|
|
(7,757)
|
|
(10,568)
|
|
Defined benefit obligation
pensioners
|
|
(1,274)
|
|
-
|
|
Present value of funded
obligations, end of year
|
|
(9,032)
|
|
(10,568)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets,
beginning of year
|
|
9,616
|
|
10,858
|
|
Expected return on plan
assets
|
|
215
|
|
37
|
|
Employer's
contributions
|
|
320
|
|
352
|
|
Employees'
contributions
|
|
321
|
|
352
|
|
Benefits
(paid)/refunded
|
|
(3,405)
|
|
(522)
|
|
Admin expense
|
|
(19)
|
|
(21)
|
|
Actuarial (loss)/gain on plan
assets
|
|
130
|
|
(1,182)
|
|
Currency gain/(loss)
|
|
850
|
|
(258)
|
|
Fair value of plan assets, end of
year
|
|
8,126
|
|
9,616
|
|
|
|
|
|
|
Movements in net liability
recognized in statement of financial position:
|
|
Year ended
|
|
Year ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2023
US$'000
|
|
2022
US$'000
|
|
Net liability, beginning of
year
|
(952)
|
|
(2,146)
|
|
Employer service cost
|
(417)
|
|
(571)
|
|
Interest cost
|
(236)
|
|
(45)
|
|
Expected return on plan
assets
|
215
|
|
37
|
|
Admin expense
|
(19)
|
|
(21)
|
|
Past service cost recognized in
year
|
341
|
|
-
|
|
Curtailment, settlement, plan
amendment gain (loss)
|
148
|
|
-
|
|
Employer's contributions
(following year expected contributions)
|
320
|
|
352
|
|
Prepaid (accrued) pension
cost:
|
(352)
|
|
247
|
|
-
operating income (expense)
|
373
|
|
(240)
|
|
-
finance expense
|
(22)
|
|
(7)
|
|
Total gains recognized within
other comprehensive income
|
(218)
|
|
1,380
|
|
Currency loss
|
(87)
|
|
62
|
|
Net liability, end of
year
|
(906)
|
|
(952)
|
|
|
|
|
|
|
Expected employer's cash
contributions for following year
|
269
|
|
360
|
|
|
|
|
|
The assets of the scheme are
invested on a collective basis with other employers. The
allocation of the pooled assets between asset categories is as
follows:
Asset allocation
|
|
|
As at
December 31,
|
|
As at
December 31,
|
|
|
|
2023
|
|
2022
|
|
|
|
US$'000
|
|
US$'000
|
|
Cash
|
|
3.1%
|
|
2.8%
|
|
Bonds
|
|
29.6%
|
|
29.1%
|
|
Equities
|
|
33.6%
|
|
33.2%
|
|
Property (incl.
mortgages)
|
|
28.9%
|
|
31.3%
|
|
Other
|
|
4.8%
|
|
3.6%
|
|
Total
|
|
100.0%
|
|
100.0%
|
|
|
|
|
|
|
Amounts recognized in profit and
loss
|
|
Year ended
|
|
Year ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2023
US$'000
|
|
2022
US$'000
|
|
Employer service cost
|
417
|
|
(571)
|
|
Past service cost recognized in
year
|
341
|
|
-
|
|
Interest cost
|
(236)
|
|
(45)
|
|
Expected return on plan
assets
|
215
|
|
37
|
|
Admin expense
|
(19)
|
|
(21)
|
|
Curtailment, settlement, plan
amendment gain (loss)
|
148
|
|
-
|
|
Components of defined benefit costs
recognized in profit or loss
|
32
|
|
(600)
|
Amounts recognized in other comprehensive
income
|
|
Year ended
|
|
Year ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2023
|
|
2022
|
|
|
US$'000
|
|
US$'000
|
|
Actuarial gains/(losses) arising
from plan experience
|
314
|
|
193
|
|
Actuarial (losses)/gains arising
from demographic assumptions
|
-
|
|
(23)
|
|
Actuarial gains / (losses) arising
from financial assumptions
|
(762)
|
|
2,392
|
|
Re-measurement of defined benefit
obligations
|
(448)
|
|
2,562
|
|
Re-measurement of
assets
|
230
|
|
(1,182)
|
|
Deferred tax asset
recognized
|
44
|
|
(276)
|
|
Other
|
-
|
|
-
|
|
Total recognized in OCI
|
(174)
|
|
1,104
|
Principal actuarial assumptions:
The principal assumptions used in
determining pension and post-employment benefit obligations for the
plan are shown below:
|
|
|
As at
|
|
As at
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2023
|
|
2022
|
|
|
|
US$'000
|
|
US$'000
|
|
Discount rate
|
|
1.50%
|
|
2.25%
|
|
Interest credit rate
|
|
2.00%
|
|
2.25%
|
|
Average future salary
increases
|
|
2.00%
|
|
2.50%
|
|
Future pension
increases
|
|
0.00%
|
|
0.00%
|
|
Mortality tables used
|
|
BVG 2020 GT
|
|
BVG 2020 GT
|
|
Average retirement age
|
|
65/65
|
|
65/65
|
The forecasted contributions of
the Group for the 2024 calendar year amount to
US$269,000.
Sensitivities
A quantitative sensitivity
analysis for significant assumptions is as follows:
|
|
|
As at
|
As at
|
|
|
|
December 31,
|
December 31,
|
|
|
|
2023
|
2022
|
|
Impact on defined benefit
obligation
|
|
US$'000
|
US$'000
|
|
Discount rate + 0.25%
|
|
(320)
|
(346)
|
|
Discount rate - 0.25%
|
|
339
|
368
|
|
Salary increase + 0.25%
|
|
41
|
47
|
|
Salary increase - 0.25%
|
|
(40)
|
(46)
|
|
Pension increase +
0.25%
|
|
183
|
179
|
|
Pension decrease - 0.25% (not
lower than 0%)
|
|
-
|
-
|
A negative value corresponds to a
reduction of the defined benefit obligation, a positive value to an
increase of the defined benefit obligation.
The sensitivity analyses above
have been determined based on a method that extrapolates the impact
on the defined benefit obligation as a result of reasonable changes
in key assumptions occurring at the end of the reporting period.
The sensitivity analyses are based on a change in a significant
assumption, keeping all other assumptions constant. The sensitivity
analyses may not be representative of an actual change in the
defined benefit obligation as it is unlikely that changes in
assumptions would occur in isolation from one another.
Other pension plans
Life Materials Technologies
Limited, Thailand, also has a pension scheme which gives rise to
defined benefit obligations under IAS 19. The pension expense in
profit and loss was US$10,000 (2022: US$1,000) which results in a
US$144,000 net defined liability as at December 31, 2023 (2022:
US$134,000).
29. Borrowings
The Group's borrowings are held at
amortized cost. They consist of the following:
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Borrowings
|
US$'000
|
US$'000
|
|
Unsecured bank loans
|
10,112
|
3,573
|
|
Secured bank loans
|
304
|
628
|
|
Loans from related
parties
|
1,494
|
-
|
|
Loans from non-controlling
interest
|
-
|
137
|
|
Total borrowings
|
11,910
|
4,338
|
The following table provides a
reconciliation of the Group's future maturities of its total
borrowings for each year presented:
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Maturity of borrowings
|
US$'000
|
US$'000
|
|
Not later than one year
|
10,409
|
2,893
|
|
Later than one year but less than
five years
|
1,010
|
1,029
|
|
After more than five
years
|
491
|
416
|
|
Total borrowings
|
11,910
|
4,338
|
The other principal features of the
Group's borrowings are as follows:
Unsecured bank loans
|
|
|
|
As at
December 31, 2023
|
|
As at
December 31, 2022
|
|
Description
|
Currency
|
Repayment
date
|
Principal US$'000
|
Interest rate
|
|
Principal US$'000
|
Interest rate
|
|
Credit facility
|
CHF
|
February
2024
|
6,461
|
4.67%
|
|
2,574
|
2.20%
|
|
|
Credit facility
|
CHF
|
June
2024
|
1,175
|
5.45%
|
|
-
|
-
|
|
|
Credit facility
|
CHF
|
September
2024
|
940
|
4.70%
|
|
-
|
-
|
|
|
Various bank
loans1)
|
EUR
|
1-10
years
|
1,504
|
2.93%
|
|
999
|
2.21%
|
|
|
Bank loan
|
GBP
|
April
2026
|
32
|
2.50%
|
|
-
|
-
|
|
|
Outstanding at the end of the
year
|
|
|
10,112
|
|
|
3,573
|
|
|
1)
Several loans repayable over ten years. The loans are repayable
over a period of up to ten 10 years. These loans have fixed
interest rates between 1.19% and 4.50% and the weighted average
fixed interest rate on the outstanding balances is
2.93%.
Secured bank loans
The Group took out a bank loan in
October 2020 which incurs interest at a fixed rate of 3.25%. The
loan is secured by property owned by a company which is controlled
by a minority shareholder of HeiQ Medica. As at December 31, 2023,
US$304,000 is outstanding (December 31, 2022:
US$628,000).
Related party loans
In December 2023, Cortegrande AG,
a company controlled by Carlo Centonze, granted a loan to HeiQ
Group in the amount of EUR 1,350,000 (approximately US$1,494,000).
The loan was increased to EUR 1,475,000 in January 2024. In March
2024, most of the outstanding loan was repaid in shares as part of
the settlement of the convertible loan note issued by the Company.
As of March 28, 2024, the remaining loan amounts to EUR 400,000,
incurs interest at 4.5% and is repayable in June 2024.
Loans from non-controlling
interests
A loan disclosed in the 2022
annual report in the amount of BRL 715,683 (US$137,000) which was
payable to a minority shareholder of Life Materials Latam Ltda,
Brazil is no longer consolidated following the deconsolidation of
the subsidiary.
30. Deferred tax
The following are the major
deferred tax liabilities and assets recognized by the Group and
movements thereon during the current and prior reporting
period.
|
|
Pension fund obligations
|
Tax losses
|
Share-based payments
|
Capital allowances, depreciation
and other temporary differences
|
Total
|
|
Deferred tax
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Balance at January 1,
2022
|
429
|
178
|
85
|
(1,686)
|
(994)
|
|
Charge to profit or loss
|
49
|
(150)
|
1
|
681
|
581
|
|
Charge to other comprehensive
income
|
(276)
|
-
|
-
|
-
|
(276)
|
|
Foreign currency
differences
|
(12)
|
(28)
|
5
|
9
|
(26)
|
|
Balance as at December 31,
2022
|
190
|
-
|
91
|
(996)
|
(715)
|
|
Charge to profit or loss
|
(453)
|
-
|
(86)
|
121
|
(417)
|
|
Charge to other comprehensive
income
|
249
|
-
|
|
|
249
|
|
Arising from business
combinations
|
-
|
-
|
-
|
(201)
|
(201)
|
|
Foreign currency
differences
|
14
|
-
|
(5)
|
4
|
13
|
|
Balance as at December 31,
2023
|
-
|
-
|
-
|
(1,072)
|
(1,072)
|
Deferred tax assets related to
pension fund obligations and share-based payments were derecognized
due to the current operational results and the uncertainty about
future profits in the Swiss tax jurist. Deferred tax liabilities
related to capital allowances and depreciation increased following
the recognition of intangible assets acquired in the Tarn Pure
acquisition.
Deferred tax assets and
liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and
liabilities on a net basis. The following is the analysis of the
deferred tax balances (after offset) for financial reporting
purposes:
|
|
|
As at
December 31, 2023
|
|
As at
December 31, 2022
|
|
Deferred tax
|
|
US$'000
|
|
US$'000
|
|
Deferred tax assets
|
|
312
|
|
538
|
|
Deferred tax liabilities
|
|
(1,384)
|
|
(1,253)
|
|
Net deferred tax assets
(liabilities)
|
|
(1,072)
|
|
(715)
|
31. Other non-current
liabilities
|
Other non-current
liabilities
|
As at
December 31, 2023
US$'000
|
As at
December 31, 2022
US$'000
|
|
Defined benefit obligation IAS 19
Switzerland
|
906
|
952
|
|
Defined benefit obligation IAS 19
Thailand
|
144
|
134
|
|
Contract liabilities
|
3,932
|
3,614
|
|
Deferred consideration Tarn Pure
acquisition
|
19
|
-
|
|
Deferred grant income
|
9
|
14
|
|
Total other non-current
liabilities
|
5,010
|
4,714
|
32. Trade and other
payables
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Trade and other payables
|
US$'000
|
US$'000
|
|
Trade payables
|
4,446
|
3,321
|
|
Payables to tax
authorities
|
462
|
375
|
|
Other payables
|
1,764
|
1,626
|
|
Total trade and other
payables
|
6,672
|
5,322
|
Trade payables principally
comprise amounts outstanding for trade purchases and ongoing costs.
Other payables relate to employee-related expenses, utilities and
other overhead costs. Typically, no interest is charged on
the trade payables. The Group has financial risk management
policies in place to ensure that all payables are paid within the
pre-agreed credit terms.
The directors consider that the
carrying amount of trade payables approximates to their fair
value.
33. Accrued
liabilities
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Accrued liabilities
|
US$'000
|
US$'000
|
|
Costs of goods sold
|
967
|
875
|
|
Personnel expenses
|
1,338
|
1,737
|
|
Other operating expenses
|
2,178
|
2,366
|
|
Total accrued
liabilities
|
4,483
|
4,978
|
34. Deferred revenue
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Deferred revenue
|
US$'000
|
US$'000
|
|
Contract liabilities
|
1,380
|
1,176
|
|
Prepayments for unshipped
goods
|
22
|
94
|
|
Deferred grant income
|
21
|
15
|
|
Total deferred revenue
|
1,423
|
1,285
|
35. Contract
liabilities
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Contract liabilities
|
US$'000
|
US$'000
|
|
Exclusivity agreements
|
2,812
|
1,832
|
|
Research and development
services
|
2,500
|
2,958
|
|
Total contract
liabilities
|
5,312
|
4,790
|
|
Current liabilities (Note
34)
|
1,380
|
1,176
|
|
Non-current liabilities (Note
31)
|
3,932
|
3,614
|
|
Total contract
liabilities
|
5,312
|
4,790
|
Revenue relating to both
exclusivity and research and development services is recognized
over time although the customer pays up-front in full for these
services. A contract liability is recognized for revenue relating
to the services at the time of the initial sales transaction and is
released over the service period.
36. Other current
liabilities
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Other current
liabilities
|
US$'000
|
US$'000
|
|
Deferred consideration in relation
to acquisitions
|
208
|
92
|
|
Call option liability
|
-
|
686
|
|
Other current
liabilities
|
208
|
778
|
The deferred consideration in
relation to business acquisition and related financing expense are
summarized below:
|
Deferred consideration in relation
to acquisitions
|
Chemtex
|
RAS
|
Life
|
Tarn Pure
|
Total
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
As at December 31, 2021
|
279
|
3,152
|
2,652
|
-
|
6,083
|
|
Foreign exchange
revaluation
|
-
|
(276)
|
-
|
-
|
(276)
|
|
Consideration settled in
cash
|
(187)
|
-
|
(1,400)
|
-
|
(1,587)
|
|
Consideration settled in
shares
|
-
|
(2,875)
|
(1,252)
|
-
|
(4,127)
|
|
As at December 31, 2022
|
92
|
-
|
-
|
-
|
92
|
|
Additions from Tarn Pure
acquisition as per Note 4a
|
-
|
-
|
-
|
244
|
244
|
|
Consideration settled in
cash
|
-
|
-
|
-
|
(110)
|
(110)
|
|
Amortization of fair value
discount
|
-
|
-
|
-
|
1
|
1
|
|
As at December 31, 2022
|
92
|
-
|
-
|
135
|
227
|
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Deferred consideration
|
US$'000
|
US$'000
|
|
Current liabilities
|
208
|
92
|
|
Non-current liabilities
|
19
|
-
|
|
Total deferred
consideration
|
227
|
92
|
37. Contingent assets and
liabilities
A minority shareholder of one of the
Group's subsidiaries has made a claim in court regarding the
interpretation of certain put-option rights on shares of the same
subsidiary. The Company considers these option rights as lapsed as
per the Shareholder Agreement. At present, it is not possible to
determine the outcome of these matters. Hence, no provision has
been made in the financial statements for their ultimate
resolution.
38. Provisions
|
Provisions
|
|
As at
December 31, 2023
US$'000
|
As at
December 31, 2022
US$'000
|
|
Current liabilities
|
|
-
|
339
|
|
Non-current liabilities
|
|
-
|
-
|
|
Total provisions
|
|
-
|
339
|
|
|
|
|
|
|
|
|
|
|
Legal/Compliance
provision
|
Total
|
|
Provisions
|
US$'000
|
US$'000
|
|
Balance at January 1,
2022
|
-
|
-
|
|
Additional provision in the
year
|
339
|
339
|
|
Utilization of provision
|
-
|
-
|
|
Exchange difference
|
-
|
-
|
|
Balance as at December 31,
2022
|
339
|
339
|
|
Additional provision in the
period
|
|
|
|
Utilization of provision
|
(339)
|
(339)
|
|
Exchange difference
|
|
|
|
Balance as at December 31, 2023
|
-
|
-
|
|
|
|
|
| |
39. Notes to the statements of
cash flows
Non-cash transactions
Certain shares were issued during
the year for a non-cash consideration as described in Note
24.
During the year ended December 31,
2022, additions to buildings and land amounting to US$1,862,000
million were financed by issuing shares.
Working capital reconciliation
The Company defines working
capital as trade receivables, other receivables and prepayments
less trade and other payables, accrued liabilities and deferred
revenue.
|
Year ended December 31,
2023
|
Opening balances
|
Assumed on acquisition of
assets
|
Disposal of subsidiary
|
Change in balance
|
Closing balances
|
|
US$'000
|
US$'000
|
|
US$'000
|
US$'000
|
|
Inventories
|
|
13,168
|
13
|
(5)
|
(1,926)
|
11,250
|
|
Trade receivables
|
|
6,487
|
2
|
-
|
(816)
|
5,673
|
|
Other receivables and
prepayments
|
|
4,262
|
10
|
(6)
|
83
|
4,349
|
|
Trade and other receivables and
prepayments
|
10,749
|
12
|
(6)
|
(733)
|
10,022
|
|
Trade and other payables
|
|
5,322
|
2
|
(16)
|
1,364
|
6,672
|
|
Accrued liabilities
|
|
4,978
|
-
|
-
|
(495)
|
4,483
|
|
Deferred revenue incl. non-current
contract liabilities
|
|
4,913
|
-
|
-
|
451
|
5,364
|
|
Trade and other payables, accrued
liabilities and deferred revenue
|
15,213
|
2
|
(16)
|
1,320
|
16,519
|
|
Year ended December 31,
2022
|
Opening balances
|
Assumed on acquisition of
assets
|
Change in balance
|
Closing balances
|
|
US$'000
|
US$'000
|
US$'000
|
US$'000
|
|
Inventories
|
|
13,770
|
-
|
(602)
|
13,168
|
|
Trade receivables
|
|
14,656
|
-
|
(8,169)
|
6,487
|
|
Other receivables and
prepayments
|
|
3,876
|
-
|
386
|
4,262
|
|
Trade and other receivables and
prepayments
|
18,532
|
-
|
(7,783)
|
10,749
|
|
Trade and other payables
|
|
8,271
|
-
|
(2,949)
|
5,322
|
|
Accrued liabilities
|
|
3,386
|
9
|
1,583
|
4,978
|
|
Deferred revenue incl. non-current
contract liabilities
|
|
1,004
|
-
|
3,909
|
4,913
|
|
Trade and other payables, accrued
liabilities and deferred revenue
|
12,661
|
9
|
2,543
|
15,213
|
Consideration for acquisition of businesses
(Note 4a)
|
Year ended December 31,
2023
|
|
US$'000
|
|
Consideration payment for
acquisition of Tarn Pure
|
|
730
|
|
Cash assumed on acquisition of Tarn
Pure
|
|
(12)
|
|
Net consideration payment for
acquisitions of businesses
|
|
718
|
|
Year ended December 31,
2022
|
|
US$'000
|
|
Consideration payment for
acquisition of Life Materials Technologies
Ltd
|
|
1,400
|
|
Consideration payment for
acquisition of ChemTex assets
|
|
187
|
|
Net consideration payment for
acquisitions of businesses and assets
|
|
1,587
|
40. Related party
transactions
ECSA, a company controlled by a
director of HeiQ Materials AG supplied materials and services
totalling US$36,000 to
HeiQ Materials AG, in the year
ended December 31, 2023 (2022: US$88,000). The transactions were
made on terms equivalent to those in arm's length
transactions.
The directors have deferred
payment of their board fees earned in the period July - December
2023 and thus the Company has recorded a corresponding liability
against each of the directors.
Loans due to related parties
|
|
As at
December 31, 2023
|
As at
December 31, 2022
|
|
Loans due to related
parties
|
US$'000
|
US$'000
|
|
Cortegrande AG,
€1,350,000
|
1,494
|
-
|
|
Loans due to related
parties
|
1,494
|
-
|
The associates have provided the
Group with short-term loans at rates comparable to the average
commercial rate of interest.
41. Material subsequent
events
Purchase of industrial site
In February 2024 the Group
completed the acquisition of two industrial properties in Portugal
for a total consideration of EUR5.0 million (including taxes). In
March 2024, the Group was able to refinance the acquisition of the
smaller property with a mortgage amounting to EUR 750,000. The
refinancing of the larger property is still ongoing as of March 28,
2024.
Fundraise
In March 2024, the Group issued
28,000,000 new ordinary shares raising in
aggregate £2.44 million (gross). Following
the issue and allotment of the New Ordinary Shares the Company has
168,537,907 Ordinary Shares in issue. The Company holds no Ordinary
Shares in treasury, and therefore the total number of voting rights
in the Company is 168,537,907. All new shares have been issued at
£0.087 per share.
Directors have participated in the
fundraise and acquired Convertible Loan Note shares as
follows:
|
Director name
|
Number
of ordinary shares acquired
|
|
Carlo Centonze (via Cortegrande
AG)
|
8,808,793
|
|
Esther Dale
|
180,974
|
|
Xaver Hangartner
|
73,368
|
Furthermore, the Group subdivided
each existing ordinary share of 30p into one new ordinary share of
5 pence and one deferred share of 25 pence.
Appointment of new chair
In March 2024, Robert van de
Kerkhof. who was appointed Director in November 2023, was nominated
as the new Chairman replacing Esther Dale Kolb who resigned from
her role as Chair and Director as of March 31, 2024.
42. Ultimate controlling
party
As at December 31, 2023, the
Company did not have any single identifiable controlling
party.