TIDMLWRF
RNS Number : 7609P
LightwaveRF PLC
31 May 2018
31 May 2018
LightwaveRF plc
(AIM: LWRF)
Interim results for the six months ended 31 March 2018
LightwaveRF plc ("LightwaveRF", the "Company" or the "Group"),
the leading smart home solutions provider, is pleased to announce
its unaudited interim results for the six months ended 31 March
2018.
Financial Highlights
-- Revenue of GBP1.13 million (2017: GBP1.17 million)
-- Gross margin of 40.6% (2017: 39.4%)
-- Loss before taxation of GBP0.87 million (2017: loss GBP0.33 million)
-- Cash received, net of fees, of GBP4.90 million from the
fundraising completed in December 2017
-- Increased investment in research and development of GBP0.62 million (2017: GBP0.35 million)
-- Cash as at 31 March 2018 of GBP2.46 million (2017: GBP0.82 million)
Operational Highlights
-- Successful launch of Generation 2 products
-- New and enhanced distribution agreements signed, with John
Lewis now stocking Lightwave devices
-- Direct to consumer sales doubled
-- Partnership with Apple for imminent launch of Apple HomeKit European device range
Commenting on the results and outlook, Barry Gamble, Chairman
said:
"Significant investment has been made in the first half of the
financial year to build on our market leading technology position.
We are pushing hard to establish the Company as a leader in the
rapidly growing smart home market.
The next launch, expected in the coming weeks, will be the
Company's European device range, which in partnership with Apple
will take our products into a number of new territories."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
A copy of this announcement is available on the Company's
website www.lightwaverf.com
For further information:
LightwaveRF plc www.lightwaveRF.com
Andrew Pearson, CEO +44 (0) 121 250 3625
Kevin Edwards, CFO
Stockdale Securities Limited www.stockdalesecurities.com
Tom Griffiths/Edward Thomas +44 (0) 20 7601 6100
Yellow Jersey PR www.yellowjerseypr.com
Charles Goodwin/Abena Affum/Katie Bairsto +44 (0) 7747 788 221
About LightwaveRF
LightwaveRF plc ("LightwaveRF" or the "Company") pioneered smart
home automation with the introduction of the market's first
internet enabled devices in 2008. Today, the Company offers a
market leading platform with applications and connected devices.
These provide fully integrated remote control and monitoring of
lighting, heating and power directly through the Lightwave platform
and through Amazon, Apple and Google smart home offerings. We are
dedicated to making everyone's lives easier and more fulfilled
through world leading smart home technology.
For further information and to sign up for investor news alerts
please visit www.lightwaverf.com/corporate/
Chairman's Statement
The Autumn launch of the Generation 2 Apple HomeKit compatible
devices, which were initially made available at apple.com, and then
on sale in Apple UK stores, was an important milestone for the
Company. Additionally, the receipt of the GBP4.90 million, net of
fees, from the fundraising completed in December 2017 marked the
start of the process to significantly scale the business. We have
made important changes to our distribution arrangements, which,
with a clearer focus on direct to consumer sales, should now enable
us to achieve stronger revenue growth.
For the first six months of the financial year, revenue of
GBP1.13 million (2017: GBP1.17 million) was held back by the
changes to the distribution arrangements. Losses were higher at
GBP0.87 million (2017: GBP0.33 million) as a result of a
significant increase in administrative expenses, as the Company
accelerated investment in product development, marketing, sales and
support. We anticipate that the rate of cash burn will fall as
revenue increases, costs decrease and inventories stabilise.
Significant investment has been made in the first half of the
financial year to build on our market leading technology position.
We are pushing hard to establish the Company as a leader in the
rapidly growing smart home market.
The next launch, expected in the coming weeks, will be the
Company's European device range, which in partnership with Apple
will take our products into a number of new territories.
Barry Gamble
Chairman
31 May 2018
Chief Executive's Review
I have had the privilege of leading LightwaveRF for over a year
now. Although progress has been achieved during this time, we still
have much work to do to fully exploit the opportunity of smart
home, which is now starting to transform the way we all live and
work. We have invested in expanding both our technology and
commercial teams and there is real energy and excitement within the
Company as we work to leverage our market leading technology.
Results
Revenue for the period ended 31 March 2018 was GBP1.13 million
(2017: GBP1.17 million). Gross profit was GBP0.46 million (2017:
GBP0.46 million) with improved margins of 40.6% (2017: 39.4%)
resulting from increased direct to consumer sales. Although first
half revenue was held back by the significant restructuring of our
distribution arrangements, we believe the changes made now position
the Company for future revenue growth.
Administrative expenses were GBP1.57 million (2017: GBP0.91
million), including amortisation of GBP0.24 million (2017: GBP0.15
million). Total research and development costs were GBP0.62 million
(2017: GBP0.35 million), of which GBP0.50 million (2017: GBP0.23
million) was capitalised under IAS 38. Investment in marketing,
sales, customer support and management all increased. Ensuring
compliance with the General Data Protection Regulations (GDPR) and
further investment in cyber security also contributed to the rise
in administrative expenses. After recognising research and
development tax credits as other income of GBP0.23 million (2017:
GBP0.12 million), the loss for the period was GBP0.87 million
(2017: loss GBP0.33 million). The basic loss per share was 1.73
pence (2017: 1.30 pence).
Cash absorbed by operations for the period increased to GBP1.94
million (2017: GBP0.94 million) reflecting underlying losses, the
impact of higher inventories to support direct to consumer sales
and on-demand ordering from our new distributors. Trade and other
receivables as at 31 March 2018 were GBP0.70 million (2017: GBP0.59
million), following which collections have seen this reduce. Total
loans and borrowings as at 31 March 2018 were GBP0.41 million
(2017: GBP0.77 million) and cash was GBP2.46 million (2017 GBP0.82
million), before receipt of research and development tax credits
due shortly.
Operational Summary
We have continued the development of Generation 2 devices for
the UK and variants for European markets. We have added
functionality to our Generation 2 mobile app and also made further
investments in our cloud platform and product integrations with our
partners Amazon, Apple and Google. We continue to sell and support
our Generation 1 devices to both new and existing customers. These
can be operated by the Lightwave Link Plus, allowing a seamless
integration with the further features that the Generation 2
products offer. Important progress has been made over the period
with our new distribution agreements. We believe all these
developments and the shift in strategy to expand our distribution
arrangements will be fundamental to stronger revenue growth.
We have made notable technology advancements with the launch of
Generation 2 Apple HomeKit certified devices, now on sale in Apple
UK stores. Additionally, our distribution agreement with Exertis
has seen our devices go on sale in John Lewis, both online and
in-store. These relationships provide real and tangible evidence
that our technology is market leading and of significant value to
our customers. The commitment that Apple and John Lewis have shown
in stocking and promoting our products, together with support from
our new distributors, Exertis and West Coast, have opened up a
number of new opportunities. We doubled our direct sales in the
period to GBP0.5 million (2017: GBP0.22 million) through tele-sales
and ecommerce, which is now supported by field-based sales
consultants visiting prospective customers in their homes.
We are investing in marketing to extend our brand awareness
through digital marketing, press relations activity and selected
consumer events. We are also expanding our partnerships with Amazon
and Apple in technology, joint marketing and retail promotion, as
well as with Google in technology and joint marketing.
Strategy
LightwaveRF is determined to be a leader in the smart home
market. Our competitors remain focused on gadgets and single device
or single market segment solutions. By contrast, we have a wide
range of devices for lighting, heating and power that allows our
customers to create a truly integrated smart home operated
increasingly through voice control.
Our focus for the second half of 2018 will be to increase
revenues and launch the European range of our Generation 2 switches
and sockets. This will be marketed in partnership with Apple in
about 20 countries, with initial online availability to be followed
by Apple stores and selected Apple Premium Reseller stores.
Outlook
We offer market leading smart home solutions that are a result
of our deep and long-standing smart home expertise. We are
investing in our product range, marketing, support and installation
services to ensure that we have the right customer proposition to
build a profitable smart home company. We expect to see revenue
growth in the second half of this year. With the recent significant
investments made, we believe that we have the right strategy in
place to deliver value for shareholders.
Andrew Pearson
Chief Executive Officer
31 May 2018
Interim accounts for the six months ended 31 March 2018
The financial information contained within these unaudited
accounts has been prepared by the Directors who accept
responsibility for the financial information presented below and
confirm that it has been properly presented in accordance with
applicable law. The interim financial statements were approved by
the Board of Directors on 30 May 2018 and have been prepared on the
basis of the accounting policies set out in note 1 below. A copy of
this announcement is available at www.lightwaverf.com.
Consolidated statement of comprehensive income
6 Months 6 Months Year Ended
31-Mar-18 31-Mar-17 30-Sep-17
GBP GBP GBP
Note (Unaudited) (Unaudited) (Audited)
--------------- ------------ -------------------
REVENUE 1,131,699 1,173,973 3,032,268
Cost of sales (672,581) (711,700) (1,954,942)
--------------- ------------ -------------------
GROSS PROFIT 459,118 462,273 1,077,326
--------------- ------------ -------------------
Other Income 233,000 124,000 248,000
Administrative expenses (1,565,051) (912,667) (2,121,559)
--------------- ------------ -------------------
OPERATING LOSS (872,933) (326,394) (796,233)
Finance expense (1,614) (6,828) (49,079)
--------------- ------------ -------------------
LOSS BEFORE TAXATION (874,547) (333,222) (845,312)
Taxation - - -
--------------- ------------ -------------------
LOSS AND TOTAL
COMPREHENSIVE INCOME ATTRIBUTABLE
TO EQUITY SHAREHOLDERS OF THE PARENT (874,547) (333,222) (845,312)
--------------- ------------ -------------------
Basic loss per share 2 1.73p 1.30p 2.39p
Diluted loss per share 2 1.73p 1.30p 2.39p.
Group statement of financial position
As at As at As at
31-Mar-18 31-Mar-17 30-Sep-17
GBP GBP GBP
Note (Unaudited) (Unaudited) (Audited)
--------------------------- ------------ ------------
ASSETS
Non-current assets
Intangible assets 3 1,476,203 897,704 1,210,071
Property, plant & equipment 59,503 11,729 25,766
--------------------------- ------------ ------------
1,535,706 909,433 1,235,837
--------------------------- ------------ ------------
Current assets
Inventories 1,235,659 213,126 388,012
Trade and other receivables 702,112 592,567 468,697
Cash and cash equivalents 2,462,602 816,018 221,933
Corporate tax recoverable 481,000 313,000 248,000
--------------------------- ------------ ------------
4,881,373 1,934,711 1,326,642
--------------------------- ------------ ------------
TOTAL ASSETS 6,417,079 2,844,144 2,562,479
--------------------------- ------------ ------------
Equity
Share capital 4 3,578,633 1,938,452 1,938,452
Share premium 8,726,773 5,466,889 5,462,804
Reverse acquisition reserve (100,616) (100,616) (100,616)
Share based payment reserve 78,967 63,566 70,811
Profit and loss reserve (7,024,446) (5,637,809) (6,149,899)
--------------------------- ------------ ------------
Total equity 5,259,311 1,730,482 1,221,552
--------------------------- ------------ ------------
Current liabilities
Trade and other payables 748,777 343,220 752,623
Loans and borrowings 5 408,991 770,442 588,304
--------------------------- ------------ ------------
Total current liabilities 1,157,768 1,113,662 1,340,927
--------------------------- ------------ ------------
Non current liabilities
Loans and borrowings 5 - - -
--------------------------- ------------ ------------
TOTAL EQUITY AND LIABILITIES 6,417,079 2,844,144 2,562,479
--------------------------- ------------ ------------
Group statement of changes in equity
Issued Share premium Reverse Share based
share acquisition payment Profit and
capital reserve reserve loss reserve Total equity
GBP GBP GBP GBP GBP GBP
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
As at 31 March
2017 1,938,452 5,466,889 (100,616) 63,566 (5,637,809) 1,730,482
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
Loss for the period
and total comprehensive
income - - - - (512,090) (512,090)
Share based payments - - - 7,245 - 7,245
Share issue costs - (4,085) - - - (4,085)
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
As at 1 October
2017 1,938,452 5,462,804 (100,616) 70,811 (6,149,899) 1,221,552
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
Loss for the period
and total comprehensive
income - - - - (874,547) (874,547)
Share based payments - - - 8,156 - 8,156
Shares issued 1,640,181 3,608,398 - - - 5,248,579
Share issue costs - (344,429) - - - (344,429)
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
As at 31 March
2018 3,578,633 8,726,773 (100,616) 78,967 (7,024,446) 5,259,311
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
Group statement of cash flows 6 Months 6 Months Year ended
31-Mar-18 31-Mar-17 30-Sep-17
GBP GBP GBP
(Unaudited) (Unaudited) (Audited)
------------- ------------- ------------
Cash flow from operating activities
Loss for the period (874,547) (333,222) (845,312)
Adjusted for:
Depreciation and amortisation 246,763 165,494 323,121
Share based payments 8,156 11,672 49,079
Finance expense 1,614 6,828 18,918
Tax credit in respect of R&D (233,000) (124,000) (248,000)
Foreign exchange profit on convertible
loan - - (11,781)
Increase in inventories (847,647) (110,599) (285,485)
Increase in trade and other receivables (233,415) (273,540) (149,671)
(Decrease) / increase in trade
and other payables (3,846) (285,240) 124,163
------------- ------------- ------------
Cash absorbed by operations (1,935,922) (942,607) (1,024,968)
------------- ------------- ------------
Tax credits in respect of R&D - - 189,000
Finance costs paid (1,614) (6,828) (49,079)
------------- ------------- ------------
(1,937,536) (949,435) (885,047)
------------- ------------- ------------
Cash flows from investing activities
Purchase of property, plant & equipment (43,661) (9,622) (28,533)
Deferred development expenditure (502,971) (228,117) (693,237)
------------- ------------- ------------
(546,632) (237,739) (721,770)
------------- ------------- ------------
Cash flows from financing activities
Proceeds from issue of shares 5,248,579 2,365,256 2,361,172
Costs associated with issue of
shares (344,429) (141,655) (141,655)
Invoice discounting repaid (8,341) (19,311) (45,450)
Repayment of convertible loan note (50,857) (47,971) (69,859)
Repayment of borrowings (120,115) (155,243) (277,574)
------------- ------------- ------------
4,724,837 2,001,076 1,826,634
------------- ------------- ------------
Net increase in cash and cash equivalents 2,240,669 813,902 219,817
Cash and cash equivalents at start
of period 221,933 2,116 2,116
------------- ------------- ------------
Cash and cash equivalents at end
of period 2,462,602 816,018 221,933
------------- ------------- ------------
Notes to the Interim financial statements
1. Accounting policies
Basis of accounting
The financial information covers the six months ended 31 March
2018. There have been no changes to the policies applied and
disclosed in the Company's annual financial statements for the year
ended 30 September 2017.
This interim report has been prepared in accordance with the
recognition and measurement principles that are consistent with
International Financial Reporting Standards (IFRSs) as endorsed by
the European Union using accounting policies that are expected to
be applied for the financial year ending 30 September 2018. The
financial information in this interim report does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The financial information for the year ended 30 September 2017
does not constitute the full statutory accounts for that period,
but is derived from those accounts. The Annual Report and Financial
Statements for 2017 have been filed with the Registrar of
Companies. The independent Auditors' Report on the Annual Report
and Financial Statements for 2017 was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under section 498(2) or 498(3) of the Companies Act
2006.
Going concern
The directors, having made suitable enquiries and analysis of
the accounts, consider that the Group has adequate resources to
continue in business for the foreseeable future. For this reason,
the directors continue to adopt the going concern basis in
preparing the financial statements. In making this assessment, the
directors have considered the group budgets, cash flow forecasts
and associated risks and the availability of external finance
facilities.
2. Loss per share
6 Months 6 Months Year ended
31-Mar-18 31-Mar-17 30-Sep-17
GBP GBP GBP
(Unaudited) (Unaudited) (Audited)
------------ ------------ ------------
Numerator
Loss used for calculation of basic
and diluted earnings per share 874,547 333,222 845,312
------------ ------------ ------------
The weighted average number of
shares were:
Denominator
Weighted average number of ordinary
shares 50,505,434 25,565,840 35,343,621
------------ ------------ ------------
Loss per share 1.73p 1.30p 2.39p
Diluted loss per share 1.73p 1.30p 2.39p
3. Intangible assets
Deferred Platform
development
costs Total
GBP GBP GBP
FIXED ASSETS - Group
Cost
As at 1 April 2017 214,573 931,073 1,145,646
Additions 84,798 380,322 465,120
------------- ----------- ----------
As at 30 September 2017 299,371 1,311,395 1,610,766
Additions 318,538 184,433 502,971
------------- ----------- ----------
As at 31 March 2018 617,909 1,495,828 2,113,737
------------- ----------- ----------
Accumulated amortisation
As at 1 April 2017 - 247,942 247,942
Charge for the period - 152,753 152,753
------------- ----------- ----------
As at 30 September 2017 - 400,695 400,695
Charge for the period 39,591 197,248 236,839
------------- ----------- ----------
As at 31 March 2018 39,591 597,943 637,534
------------- ----------- ----------
Net book value as at 31 March 2018 578,318 897,885 1,476,203
------------- ----------- ----------
Net book value as at 30 September
2017 299,371 910,700 1,210,071
------------- ----------- ----------
Net book value as at 31 March 2017 214,573 683,131 897,704
------------- ----------- ----------
The Company categorises software development, such as firmware,
server software and user apps, as a platform asset essential to
support the operation of the full range of hardware devices.
The directors have undertaken an impairment review and have
concluded that the value of the intangible assets are supported by
the discounted future cash flows forecast by the Group.
4. Share capital
As at As at As at
31-Mar-18 31-Mar-17 30-Sep-17
GBP GBP GBP
Issued share capital (Unaudited) (Unaudited) (Audited)
------------ ------------ ----------
71,572,647 Ordinary shares of 5p
each 3,578,633 1,938,452 1,938,452
------------ ------------ ----------
Allotted, issued and fully paid
Ordinary share capital brought
forward 1,938,452 1,028,738 1,028,738
Issue of ordinary shares for cash 1,640,181 909,714 909,714
------------ ------------ ----------
3,578,633 1,938,452 1,938,452
------------ ------------ ----------
5. Loans and borrowings
The carrying value which is a reasonable approximation to fair
value of borrowings is as follows:
As at As at As at
31-Mar-18 31-Mar-17 30-Sep-17
GBP GBP GBP
(Unaudited) (Unaudited) (Audited)
------------- ------------- -----------
Current
Convertible loan note 408,991 493,517 459,848
Invoice discounting loan - 34,480 8,341
Other loan - 242,445 120,115
------------- ------------- -----------
Total loans and borrowings
current 408,991 770,442 588,304
------------- ------------- -----------
The convertible loan note carries an interest rate of 3%.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FKKDPKBKBDPN
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