TIDMLWRF
RNS Number : 8480A
LightwaveRF PLC
03 June 2019
3 June 2019
LightwaveRF plc
(AIM: LWRF)
Interim results for the six months ended 31 March 2019
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
2019.
Financial Highlights
-- Revenue more than doubled to GBP2.50 million (2018: GBP1.13
million) being approximately 90% of revenue generated of GBP2.81
million for the whole of the 2018 financial year ("FY2018")
-- Gross profit doubled to GBP0.95 million (2018: GBP0.46
million) exceeding GBP0.83 million achieved for FY 2018
-- Gross margin of 37.9% (2018: 40.6%) up on 35.3% for FY2018
-- Increased investment in research and development of GBP1.00 million (2018: GBP0.62 million)
-- Loss before taxation of GBP1.35 million (2018: GBP0.87
million) following further investment in sales, marketing and
customer support
-- GBP1.75 million net cash received from fundraising during the
period and further GBP0.50 million since period end
-- Cash as at 31 March 2019 of GBP0.76 million (2018: GBP2.46 million)
Operational Highlights
-- Direct to consumer sales doubled
-- New UK trade distribution agreement with nationwide electrical wholesaler Rexel
-- Agreements with E.ON/Berkeley Homes and Honeywell Resideo
-- Improvements in support recognised by 4 star Trustpilot status
-- Successful development and release of European products
-- Lightwave products in Apple stores in 10 European countries and 22 countries online
-- New European Distribution partnership with Tech Data
Commenting on the results and outlook, Barry Gamble, Chairman of
LightwaveRF, said:
"Doubling overall and direct to consumer revenue is a
considerable achievement. This reflects improved marketing, sales,
customer support and distribution channels. Lightwave is continuing
to innovate with its technology and product reviews are extremely
positive. Further product releases, strengthening relations with
Apple, E.ON and Resideo as well as broadening our distribution
arrangements with Rexel and others should all underpin more
progress still for the Company."
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
Jason Elliott, CEO +44 (0) 121 250 3625
Kevin Edwards, CFO
Stockdale Securities Limited www.stockdalesecurities.com
Tom Griffiths/David Coaten +44 (0) 20 7601 6100
Yellow Jersey PR www.yellowjerseypr.com
Charles Goodwin/Annabel Atkins +44 (0) 7747 788 221
About LightwaveRF
LightwaveRF plc is the UK's only fully integrated home
automation company.
New customers typically buy a starter pack of Link Plus hub and
smart dimmer which has Apple HomeKit compatibility, 2-way
communication and built-in energy monitoring.Later adding other
easy to install devices from the Lightwave range enables further
in-home control, monitoring and automation of lighting, heating and
power.
Devices may be operated manually, by smartphone or tablet-based
apps and also through Google Assistant and Amazon Alexa voice
control.
Leading tech industry publication 9to5 Mac described Lightwave
as "the best UK HomeKit solution for smart lighting".
For further information and "Newsletter sign up", please visit:
www.lightwaverf.com/corporate/
Chairman's Statement
For the first six months of this financial year, revenue more
than doubled to GBP2.50 million (2018: GBP1.13 million)
representing approximately 90 per cent. of revenue generated of
GBP2.81 million for the whole of the 2018 financial year. Losses
increased to GBP1.35 million (2017: GBP0.87 million) as a result of
higher administrative expenses, specifically considerable further
investment in marketing, sales, customer support and technology
development.
Doubling overall and direct to consumer revenue is a
considerable achievement. This reflects improved marketing, sales,
customer support and distribution channels. Lightwave is continuing
to innovate with its technology and product reviews remain
extremely positive. Further product releases, strengthening
relations with Apple, E.ON and Resideo and broadening our
distribution arrangements with Rexel and others should all underpin
more progress still for the Company.
Barry Gamble
Chairman
31 May 2019
Chief Executive's Review
Our strong focus on revenue growth has continued. The
improvements made to direct to consumer sales and distribution
partnerships has enabled us to more than double first half revenue.
This has been supported by further investment in talent in our
marketing and sales teams.
We continue to work closely with our existing UK distributors
and for Europe, we now have a partnership with Tech Data, one of
the world's largest technology distributors. There is a real
opportunity to address the fastest growing Smart Home markets
following the initial market entry through the Apple retail
network.
At the same time, we have achieved great strides in the further
development of Lightwave technology bringing new and improved
products to market as well as supporting an ongoing programme of
technological innovation.
Results
Revenue for the six months ended 31 March 2019 more than doubled
to GBP2.50 million (2018: GBP1.13 million) being approximately 90
per cent of revenue generated of GBP2.81 million for the whole of
the 2018 financial year. Gross profit also doubled to GBP0.95
million (2018: GBP0.46 million) exceeding GBP0.83 million achieved
for the whole of FY2018 despite slightly lower margins of 37.9%
(2018: 40.6%) from the decision to reduce stocks of the Connect
Series range. Although gross margin was held back by this,
encouragingly it was above the underlying 35.3% for the financial
year ended 30 September 2018.
Administrative expenses increased to GBP2.48 million (2018:
GBP1.57 million),including amortisation of GBP0.37 million (2018:
GBP0.24 million),reflecting the necessary investment made to
strengthen our marketing, sales, customer support and technology.
Total research and development costs were GBP1.00 million (2018:
GBP0.62 million),of which GBP0.79 million (2018: GBP0.50 million)
was capitalised under IAS 38.
After recognising research and development tax credits as other
income of GBP0.21 million (2018: GBP0.23 million) the loss for the
period was GBP1.35 million (2018: loss GBP0.87 million).The basic
loss per share was 1.85 pence (2018: 1.73 pence).The Board is not
declaring the payment of an interim dividend.
Cash absorbed by operations for the period decreased to GBP0.90
million (2018: GBP1.94 million),a good improvement, reflecting the
reduction in inventories. Trade and other receivables as at 31
March 2019 of GBP1.02 million (2018: GBP0.70 million) were broadly
balanced by Trade and other payables of GBP1.00 million (2018:
GBP0.75 million).Total loans and borrowings as at 31 March 2019
were GBP0.70 million (2018: GBP0.41 million) including an R&D
tax credit loan of GBP0.3 million. Cash at 31 March 2019 was
GBP0.76 million (2018 GBP2.46 million) before the receipt of funds
deferred under the fundraising of GBP0.50 million which has now
been received.
Operational Summary
Our sales channels - direct to consumer through our online
eCommerce presence and telesales team, sales through premium
retailers such as Apple, John Lewis and Selfridges, sales through
online retailers, such as Amazon, BT Shop, Dixons Carphone,
Screwfix and newly added AO as well as trade sales, continue to
show encouraging progress.
The upgrading of our eCommerce capability, to enhance the
overall customer buying experience, has enabled a significant
increase in our direct to consumer sales in the period to GBP1.17
million (2018: GBP0.5 million).This provides a vital contribution
to our revenue, cash generation and margin position, but also gives
us hugely valuable direct customer contact.
We have put a real focus on customer support by streamlining
process, improving internal performance measures and investing in
scaling the support team. The tangible results from this are
clearly reflected by the Lightwave Trustpilot rating, gathered
through almost 250 reviews to date. This now stands at 'Great' with
66% of those ratings being 5 star or excellent and with an overall
rating of 4 star. This puts the Lightwave brand in a market leading
position in Smart Home technology.
All the indicators suggest that our overall marketing
activities, which continue to include a number of trade and
consumer shows, are proving successful. Our digital marketing cost
per GBP1 of sales generated is tracking ahead of industry norms and
our first 'above the line' marketing campaign 'The Smarts', has
generated nearly 800,000 digital channel views providing a
significant boost to Lightwave brand recognition.
Our technology team, which now includes in-house industrial
design capability, has successfully released multiple new products,
including for the European market.
We are continuing to educate the consumer about the benefits of
smart home products and develop a seamless experience for the
consumer. Lightwave technology has a unique capability that not
only provides a world class smart lighting, power and heating
control solution, but also the ability for consumers to get the
most from their other ,increasingly voice activated, smart home
purchases by integrating them with Lightwave products. This is
being further facilitated by installation support and training
networks for both consumer and trade customers
Strategy and Outlook
On a daily basis we are seeing the real opportunity for the
Lightwave smart home brand to achieve significant UK and
international scale. As a result, we are planning to increase the
resources deployed in sales and marketing. In addition, we will
continue to strengthen the business processes to support the growth
that we are now experiencing.
Lightwave's key challenge remains the prioritisation of the many
opportunities arising, whether from our own initiatives or from
others seeking to work with us in the smart home market. As well as
refining existing working relationships with partners and
distributors, including some joint branding collaborations, we are
continuing to add to the network of outlets.
We anticipate further momentum in revenue growth in the second
half of this year. With recent significant investments made, we
believe that we have the right strategy in place to deliver for
shareholders.
Jason Elliott
Chief Executive Officer
31 May 2019
Interim accounts for the six months ended 31 March 2019
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 31 May 2019 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-19 31-Mar-18 30-Sep-18
GBP GBP GBP
Note (Unaudited) (Unaudited) (Audited)
----------------- -------------------- --------------------
REVENUE 2,501,309 1,131,699 2,813,997
Cost of sales (1,553,057) (672,581) (1,988,426)
----------------- -------------------- --------------------
GROSS PROFIT 948,252 459,118 6 825,571(
----------------- -------------------- --------------------
Other Income 205,000 233,000 410,848
Administrative expenses (2,483,662) (1,565,051) (3,735,662)
----------------- -------------------- --------------------
OPERATING LOSS (1,330,410) (872,933) (2,499,243)
Finance expense (17,613) (1,614) (45,407)
----------------- -------------------- --------------------
LOSS BEFORE TAXATION (1,348,023) (874,547) (2,544,650)
Taxation - - -
----------------- -------------------- --------------------
LOSS AND TOTAL
COMPREHENSIVE EXPITURE ATTRIBUTABLE
TO EQUITY SHAREHOLDERS OF THE PARENT (1,348,023) (874,547) (2,544,650)
----------------- -------------------- --------------------
Basic loss per share 2 1.85p 1.73p 3.80p
Diluted loss per share 2 1.85p 1.73p 3.80p
Group statement of financial position
As at As at As at
31-Mar-19 31-Mar-18 30-Sep-18
GBP GBP GBP
Note (Unaudited) (Unaudited) (Audited)
------------- ------------ ------------
ASSETS
Non-current assets
Intangible assets 3 2,484,533 1,476,203 2,070,485
Property, plant & equipment 57,815 59,503 50,132
------------- ------------ ------------
2,542,348 1,535,706 2,120,617
------------- ------------ ------------
Current assets
Inventories 822,420 1,235,659 992,991
Trade and other receivables 1,015,505 702,112 677,887
Cash and cash equivalents 764,486 2,462,602 469,550
Corporate tax recoverable 615,848 481,000 410,848
------------- ------------ ------------
3,218,259 4,881,373 2,551,276
------------- ------------ ------------
TOTAL ASSETS 5,760,607 6,417,079 4,671,893
------------- ------------ ------------
Equity
Share capital 4 4,793,012 3,578,632 3,578,632
Share premium 9,261,657 8,726,774 8,726,774
Reverse acquisition reserve (100,616) (100,616) (100,616)
Share based payment reserve 111,391 78,967 88,340
Profit and loss reserve (10,042,572) (7,024,446) (8,694,549)
------------- ------------ ------------
Total equity 4,022,872 5,259,311 3,598,581
------------- ------------ ------------
Current liabilities
Trade and other payables 1,002,497 748,777 615,860
Loans and borrowings 5 701,678 408,991 423,892
------------- ------------ ------------
Total current liabilities 1,704,175 1,157,768 1,039,752
------------- ------------ ------------
Non current liabilities
------------- ------------ ------------
Warranty provision 33,560 33,560
------------- ------------ ------------
TOTAL EQUITY AND LIABILITIES 5,760,607 6,417,079 4,671,893
------------- ------------ ------------
Group statement of changes in equity
Issued Share premium Reverse Share based Profit and Total equity
share acquisition payment loss reserve
capital reserve reserve
GBP GBP GBP GBP GBP GBP
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
As at 31 March
2018 3,578,632 8,726,774 (100,616) 78,967 (7,024,446) 5,259,311
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
Loss for the period
and total comprehensive
income - - - - (1,670,103) (1,670,103)
Share based payments - - - 9,373 - 9,373
Share issue costs - - - - - -
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
As at 1 October
2018 3,578,632 8,726,774 (100,616) 88,340 (8,694,549) 3,598,581
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
Loss for the period
and total comprehensive
income - - - - (1,348,023) (1,348,023)
Share based payments - - - 23,051 - 23,051
Shares issued 1,214,380 850,066 - - - 2,064,446
Share issue costs - (315,183) - - - (315,183)
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
As at 31 March
2019 4,793,012 9,261,657 (100,616) 111,391 (10,042,572) 4,022,872
-------------------------- ---------- -------------- ------------- ------------ -------------- -------------
Group statement of cash flows 6 Months 6 Months Year ended
31-Mar-19 31-Mar-18 30-Sep-18
GBP GBP GBP
(Unaudited) (Unaudited) (Audited)
---------------------- ------------- ------------
Cash flow from operating activities
Loss for the period (1,348,023) (874,547) (2,544,650)
Adjusted for:
Depreciation and amortisation 389,433 246,763 646,849
Share based payments 23,051 8,156 45,407
Finance expense 17,613 1,614 17,529
Tax credit in respect of R&D (205,000) (233,000) (412,794)
Foreign exchange loss on convertible
loan - - 14,019
Decrease / (Increase) in inventories 170,571 (847,647) (604,979)
Increase in trade and other receivables (337,618) (233,415) (194,140)
Decrease / (increase) in trade
and other payables 386,637 (3,846) (118,253)
---------------------- ------------- ------------
Cash absorbed by operations (903,336) (1,935,922) (3,151,012)
---------------------- ------------- ------------
Tax credits in respect of R&D - - 249,946
Finance costs paid (17,613) (1,614) (45,407)
---------------------- ------------- ------------
(920,949) (1,937,536) (2,946,473)
---------------------- ------------- ------------
Cash flows from investing activities
Purchase of property, plant & equipment (25,452) (43,661) (59,905)
Development expenditure (785,712) (502,971) (1,471,724)
---------------------- ------------- ------------
(811,164) (546,632) (1,531,629)
---------------------- ------------- ------------
Cash flows from financing activities
Proceeds from issue of shares 2,064,446 5,248,579 5,248,579
Costs associated with issue of
shares (315,183) (344,429) (344,429)
Invoice discounting repaid - (8,341) (8,341)
Repayment of convertible loan note (22,214) (50,857) (49,975)
Drawdown/repayment of other loans 300,000 (120,115) (120,115)
---------------------- ------------- ------------
2,027,049 4,724,837 4,725,719
---------------------- ------------- ------------
Net increase in cash and cash equivalents 294,936 2,240,669 247,617
Cash and cash equivalents at start
of period 469,550 221,933 221,933
---------------------- ------------- ------------
Cash and cash equivalents at end
of period 764,486 2,462,602 469,550
---------------------- ------------- ------------
Notes to the Interim financial statements
1. Accounting policies
Basis of accounting
The financial information covers the six months ended 31 March
2019. There have been no changes to the policies applied and
disclosed in the Company's annual financial statements for the year
ended 30 September 2018 except for the adoption of IFRS 15 Revenue
from contracts with customers and IFRS 9 Financial instruments
which came into effect for accounting periods beginning on or after
1 January 2018.
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 2019. 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 2018
does not constitute the full statutory accounts for that period,
but is derived from those accounts. The Annual Report and Financial
Statements for 2018 have been filed with the Registrar of
Companies. The independent Auditors' Report on the Annual Report
and Financial Statements for 2018 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, analysis and
judgements, 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
Board has considered the Group's budgets, routinely updated forward
forecasts for revenue, costs and cashflow and applied sensitivities
thereto. In addition, it has also considered the availability of,
and access to, debt and equity finance. Committed Capital Ltd,
which holds 34.89% of the Company's issued share capital, has also
confirmed its continued willingness, if required, to invest further
funds into the Company in support of its strategy.
2. Loss per share
6 Months 6 Months Year ended
31-Mar-19 31-Mar-18 30-Sep-18
GBP GBP GBP
(Unaudited) (Unaudited) (Audited)
------------ ------------ ------------
Numerator
Loss used for calculation of basic
and diluted earnings per share 1,348,023 874,547 2,544,650
------------ ------------ ------------
The weighted average number of
shares were:
Denominator
Weighted average number of ordinary
shares 72,732,874 50,505,434 66,952,179
------------ ------------ ------------
Loss per share 1.85p 1.73p 3.80p
Diluted loss per share 1.85p 1.73p 3.80p
3. Intangible assets
Deferred Platform Total
development
costs
GBP GBP GBP
Cost
As at 1 April 2018 617,909 1,495,828 2,113,737
Additions 237,222 731,531 968,753
------------- ----------- ----------
As at 30 September 2018 855,131 2,227,359 3,082,490
Additions 484,632 301,080 785,712
------------- ----------- ----------
As at 31 March 2019 1,339,763 2,528,439 3,868,202
------------- ----------- ----------
Accumulated amortisation
As at 1 April 2018 39,591 597,943 637,534
Charge for the period 58,696 315,775 374,471
------------- ----------- ----------
As at 30 September 2018 98,287 913,718 1,012,005
Charge for the period 110,922 260,742 371,664
------------- ----------- ----------
As at 31 March 2019 209,209 1,174,460 1,383,669
------------- ----------- ----------
Net book value as at 31 March 2019 1,130,554 1,353,979 2,484,533
------------- ----------- ----------
Net book value as at 30 September
2018 756,844 1,313,641 2,070,485
------------- ----------- ----------
Net book value as at 31 March 2018 578,318 897,885 1,476,203
------------- ----------- ----------
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 is supported by
the discounted future cash flows forecast by the Group.
4. Share capital
As at As at As at
31-Mar-19 31-Mar-18 30-Sep-18
GBP GBP GBP
Issued share capital (Unaudited) (Unaudited) (Audited)
------------ ------------ ----------
95,860,244 ordinary shares of 5p
each 4,793,012 3,578,632 3,578,632
------------ ------------ ----------
Allotted, issued and fully paid
Ordinary share capital brought
forward 3,578,633 1,938,452 1,938,452
Issue of ordinary shares for cash 1,214,379 1,640,180 1,640,180
------------ ------------ ----------
4,793,012 3,578,632 3,578,632
------------ ------------ ----------
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-19 31-Mar-18 30-Sep-18
GBP GBP GBP
(Unaudited) (Unaudited) (Audited)
------------- ------------- -----------
Current
Convertible loan note 384,026 408,991 423,892
Invoice discounting loan - - -
Other loan 317,652 - -
------------- ------------- -----------
Total loans and borrowings
current 701,678 408,991 423,892
------------- ------------- -----------
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 UUARRKVANRUR
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