TIDMSYM
RNS Number : 9463S
Symphony Environmental Tech. PLC
15 March 2019
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is considered to be in the
public domain.
15 March 2019
SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC
("Symphony", the "Company" or "the Group")
Preliminary Results for the year ended 31 December 2018
Symphony Environmental Technologies Plc (AIM: SYM), a global
specialist in products and technologies that "make plastic
smarter", is pleased to announce its preliminary results for the
year ended 31 December 2018.
Financial highlights:
-- Group revenues increased by 6.5% to GBP8.80 million (2017: GBP8.27 million)
-- d2p revenues increased by 191% to GBP0.93 million (2017: GBP0.32 million)
-- d2w revenues were broadly stable at GBP7.67 million (2017: GBP7.78 million)
-- Gross profit increased by 2.8% to GBP4.13 million (2017: GBP4.01 million)
-- Adjusted EBITDA, before R&D, and planned increased
marketing, communications and brand costs of GBP1.18 million (2017:
GBP1.20 million)
-- Reported profit before tax fell to GBP0.04 million (2017: GBP0.43 million)
-- Basic earnings per share fell to 0.03p (2017: 0.28p)
-- Cash used in operations GBP1.01 million (2017: cash generated GBP1.03 million)
-- Net current assets increased to GBP1.71 million (2017: GBP1.25 million)
Business highlights:
-- Ten governments globally have mandated that certain plastic
products must contain oxo-biodegradable additives; a regulatory
move which is beneficial to the Group's business
-- A further nine countries have introduced positive regulation
for all types of bio-degradable packaging with more countries
intending to make similar changes
-- Increasing interest in d2w type products as a result of
Middle East regulations and enforcement thereof
-- First d2p anti-insect technology commercial order
-- Eranova (plastic from algae) due-diligence and commercial discussions ongoing
Chief Executive, Michael Laurier, said:
"This is a pleasing set of results as it demonstrates positive
momentum on many different fronts. Our d2w technologies have been
designed to help eliminate the harmful effects of plastic pollution
in the oceans and on land. Quite differently, and for other
markets, our d2p "designed-to-protect" technologies adds special
benefits to ordinary plastic and rubber products such as
anti-microbial, insecticidal and flame retardant etc., and we are
encouraged by the growth of our d2p "designed-to-protect"
technologies in a number of different applications.
We believe the Group is reaching a pivotal point in its
development. In particular, our Middle East market is increasing
the number of products which must be made with our d2w type of
oxo-biodegradable plastic technology, whilst at the same time
substantially improving their enforcement process."
Enquiries
Symphony Environmental Technologies
Plc
Michael Laurier, CEO Tel: +44 (0) 20 8207
5900
Ian Bristow, CFO
www.symphonyenvironmental.com
Cantor Fitzgerald Europe
David Foreman, Richard Salmond, Michael Tel: +44 (0) 20 7894
Boot (Corporate Finance) 7000
Caspar Shand Kydd, Gregor Paterson (Sales)
The person responsible for arranging the release of this
information is Michael Laurier, CEO of the Company.
Chairman's Statement
I am pleased to report on the continued progress of the Group.
Our strategy remains unchanged, with the objective of expanding our
product range with synergistic technologies which can be offered to
the same or a similar customer base. This continues to progress
well with Group revenues for the year increasing by 6.5% to GBP8.80
million (2017: GBP8.27 million) due to a 191% growth in d2p
"designed to project" business from GBP0.32 million to GBP0.93
million. We have developed a strong distribution network with 72
distributors worldwide, covering nearly 100 countries; this
represents an important asset for the Group to leverage. In
addition, Symphony's products are manufactured in four different
locations worldwide, enabling us to meet almost unlimited demand
without significant further investment.
During the year, our R&D spend increased modestly from
GBP0.63 million to GBP0.66 million. This included specialist advice
in relation to regulatory compliance in the United States for two
of our d2p technologies, together with continued development
in-house and utilisation of specialist third-party facilities of
our other d2p technologies globally. We have developed a strong and
growing range of d2p products which provide protection against
bacteria, fungi, insects, corrosion, odours, and fire. Further to
the growth already established, we believe that d2p will deliver
strong growth in the short to medium term.
Cash used in operations of GBP1.01 million (2017: cash generated
GBP1.03 million) was a result of a GBP1.22 million increase in
receivables during the period due to final quarter trade weighted
in December. Net current assets increased to GBP1.71 million at the
end of 2018 from GBP1.25 million at the end of 2017.
As previously advised, we increased our marketing, communication
and brand activities which resulted in a planned higher spend of
GBP0.36 million in the year.
The world is rethinking the way plastic is produced, used and
disposed of, and is in many cases adopting technologies such as d2w
that are low cost and non-disruptive to manufacture, and can be
reused and recycled at the end of their useful life, without
increasing CO2 emissions. The trend for change from ordinary
plastics to materials less harmful to the environment is clearly
evolving and we have seen a sharp increase in interest from our
global network of distributors, customers and potential customers,
for many of our "making plastic smarter" technologies, including
from companies worldwide who have to adopt technology such as d2w
for their exports to the Middle East.
Symphony's business outside the EU accounts for 85.4% of
revenues and therefore we believe that the EU Draft Directive on
"the reduction of the impact of certain plastics on the
environment" and in particular, a restriction on oxo-degradables,
if implemented, would have a limited effect on Symphony's business
going forward. The draft directive aims to ban plastic products
that do not properly bio-degrade and are not recyclable, which is
not the case for our d2w products, as recently confirmed by a QC
and former UK judge after reviewing the scientific evidence.
The Board continue to believe that increased marketing and
communications costs will prove to be a valuable investment in the
business over the medium to longer term. Adjusting for R&D and
the short-term budgeted increased marketing, communication and
brand protection costs, EBITDA (as adjusted) for the year was
GBP1.18 million (2017: GBP1.20 million).
I would like to thank our distributors, staff and the Board for
all their hard and effective work in 2018, and we look forward with
confidence.
N Deva DL FRSA MEP
Chairman
Chief Executive's review
Introduction
The year under review saw growth in revenues and continued
profitability that included a significant increase in investment in
marketing and communications, together with R&D. Throughout the
period we continued to communicate globally at exhibitions,
conferences, in the media, and to governments, NGOs and corporates
by presenting the considerable volume of evidence that is available
to support the credentials behind our growing range of
technologies, and in particular, d2w oxo-biodegradable plastic,
which can help to resolve the problem of persistent plastic
pollution in the environment.
In our opinion, the Group is reaching a pivotal period in its
development. Whilst the d2w technology has taken time to gain
traction, principally due to having to educate and create a market
as well as wait for the enactment of relevant regulation, current
revenues and moreover, expected growth, validate the time and
resource we have allocated to those markets.
The year under review saw further intention in the Middle East
to enforce laws which mandate the use of technologies such as d2w
for a wide range of everyday products. This has created increased
interest in our d2w products, as exporters prepare their materials
to meet new import restrictions that make oxo-biodegradable
technology compulsory. I am pleased to say that we are working with
several large US, EU and Asian corporations to help them through
the approval process for a wide range of packaging and other
products. Whilst the quantum and timing of orders for d2w additive
is currently unclear, we anticipate significant revenue uplift in
2019.
In addition, adoption of our d2p technologies is starting to
grow with increasing commercial sales of antimicrobial gloves
together with masterbatch products for use in antimicrobial, odour
adsorbtion and insecticidal applications.
We continue to develop, test and trial new products for each of
our d2w and d2p technologies. During the period under review, and
in part reflecting our confidence in the outlook of our d2w and d2p
technologies, we entered into a collaboration agreement with
Eranova SAS, who have developed a unique technology and process
which extracts starch from algae for use with other materials. The
resultant starch will be used to produce bio-based, compostable or
biodegradable products. Further detail on these developments is
provided below.
Our marketing and communication activities in 2018 included
Symphony being an active panel member at the European Business
Summit event in Brussels with an EU Commissioner, Coca Cola, and
many other influential organisations on the panel. Throughout the
year we increased our engagement with the European Commission,
European Council, European Parliament and other officials including
a number of MEP's. In the UK we increased our engagement with The
Secretary of State for the Environment and DEFRA officials, the UK
Treasury and other UK government departments, and communicated with
all MP's explaining the importance of our d2w oxo-biodegradable
technology as part of an overall solution to the problem of plastic
pollution.
Trading results
Group revenues increased by 6.5% to GBP8.80 million from GBP8.27
million in 2017. Gross profit margins decreased slightly to 46.9%
from 48.5% in 2017 due to increased lower-margin finished product
sales. As a result, the contribution from gross profit increased by
2.8% (to GBP4.13 million from GBP4.01 million in 2017).
Costs increased by 16.8% to GBP3.85 million (2017: GBP3.30
million) due to increased R&D spend and increased communication
and marketing costs, together with legal advisory costs in support
of the d2w brand and technology. Staff costs also increased during
the period in the marketing and technical departments. The Group
expensed R&D costs of GBP0.66 million in 2018 (2017: GBP0.63
million).
Adjusted EBITDA before R&D and the additional communication
and marketing costs is calculated as follows:
2018 2017
GBP'000 GBP'000
------------------------------------- --------- ---------
Operating profit 64 478
Add: Depreciation 81 78
Amortisation 16 16
R&D expenditure 664 625
Planned increase in marketing, 357 -
communication and brand protection
costs
------------------------------------- --------- ---------
Adjusted EBITDA 1,182 1,197
------------------------------------- --------- ---------
Reported operating profit was GBP0.06 million (2017: GBP0.48
million) and profit after tax of GBP0.05 million (2017: GBP0.43
million) with basic earnings per share of 0.03 pence (2017: 0.28
pence).
The Group's primary selling-currency is the US Dollar and
therefore a strong dollar against sterling, our reporting currency,
is beneficial for the Group. The Group self-hedges by purchasing
goods in US Dollars and utilises forward rate agreements to
minimise exchange risk. As at 31 December 2018, the Group had a net
balance of US Dollar assets totalling $1.10 million (2017: $1.08
million). The Group is experiencing higher exposure due to
Sterling/US Dollar exchange rate fluctuations as a result of the
uncertainties currently surrounding Brexit.
Balance sheet and cash flow
The Group had net debt of GBP0.08 million at 31 December 2018
(2017: net cash of GBP0.63 million). During the year, the Group
used cash of GBP1.01 million from operations (2017: generated cash
of GBP1.03 million). This cash utilisation was mainly due to
increased trade receivables at the end of the year due to higher
sales in December. The increased receivables resulted in higher
borrowings of GBP0.45 million (2017: GBP0.00 million) due to
invoice discounting on a portion of these receivables.
Net current assets increased to GBP1.71 million at 31 December
2018 (2017: GBP1.25 million) principally due to shares issued from
the exercise of options and warrants during the period.
d2w oxo-biodegradable technology
Revenues from d2w for the year totalled GBP7.67 million (2017:
GBP7.78 million). As announced on 12 October 2018, the timing of
orders placed by distributors in our principal market, the Middle
East, has fluctuated quite significantly from month to month during
2018 due to changes in local enforcement actions. Our market
intelligence continues to indicate that there will be more rigorous
government enforcement in the short-term. Whilst we are only in the
third month of the financial year, we are optimistic that sales
will increase significantly in the second half of the year.
Activities in Symphony's other global markets are encouraging as
d2w revenues from sales in Central America, the Far East, and
Africa all grew ahead of budget.
The Board are confident on the outlook of d2w but are also
equally cautious given the volatility of orders placed in the last
12+ months. However, based on the on-the-ground intelligence, the
Board are currently budgeting d2w revenues for 2019 of not less
than GBP8.9 million whilst remaining hopeful that if the
intelligence proves correct, this will translate into significantly
better enforcement and resultant d2w orders, enabling Symphony to
issue further positive updates over the course of this year.
Global regulatory framework for oxo-biodegradable
Most of the countries in which we operate do not have
sophisticated waste-management systems or composting or recycling
facilities, and their governments are therefore determined to deal
with plastics that escape collection and end up in the open
environment. Oxo-biodegradation is a scientifically proven
technology to address this particular problem, and is required by
law in the UAE, Saudi Arabia, Pakistan and seven other countries.
In addition, a further nine countries have regulations in place
requiring the use of biodegradable packaging materials, of which
oxo-biodegradable is one.
d2w oxo-biodegradable plastic, is a non-disruptive drop-in
technology which is the lowest cost alternative to ordinary
plastics and retains all the benefits of ordinary plastics while
eliminating the environmental risk if the plastic escapes
collection and pollutes the open environment.
As already noted, Europe is not a key market for d2w sales, but
we have invested significant funds into communication, marketing
and legal advisory costs in relation to the d2w brand and
technology to better inform key decision makers in the region.
EU Draft Directive on "the reduction of the impact of certain
plastics on the environment" 2018/0172(COD) (the "Directive")
This draft Directive, if passed in April or May 2019, allows up
to two years for member states to pass implementing legislation.
However, the European Union's scientific body, ECHA, has provided
no scientific basis to support a restriction on oxo-biodegradable
plastic - see below.
The purpose of the Directive in relation to plastics, as set out
in Recital 16, is to restrict products which do not properly
biodegrade and thus contribute to microplastic pollution in the
environment, are not compostable, negatively affect the recycling
of conventional plastic, and fail to deliver a proven environmental
benefit.
We take the view that nobody would wish to restrict products
which are proven to properly biodegrade in the open environment,
whether they are compostable or not, and are compatible with
plastic recycling and deliver a real environmental benefit. We have
robust scientific evidence proving that d2w oxo-biodegradable
plastic does all of those things.
The European Chemicals Agency ("ECHA")
As set out in Articles 68-73 of the REACH Regulation (EC)
1907/2006 there is a transparent and well-established process in
the EU for legal restrictions on substances.
On 22 December 2017, the Commission, acting under article 69(1)
of REACH, requested ECHA to prepare a restriction dossier because
they thought that oxo-degradable plastics created microplastics.
That process has not been completed, and no restriction dossier has
been published. Symphony and others submitted a substantial dossier
of scientific evidence, and on 30 October 2018, ECHA advised that
they were not convinced that microplastics are formed.
Currently therefore, no restrictions on oxo-degradable or
oxo-biodegradable plastics exist, and the European Union's
scientific body has provided no scientific basis for a
restriction.
If, and only if, ECHA were to conclude that there are grounds
for a restriction, the process then provides for consideration of
the evidence by the Committees for Risk Assessment (Article 70) and
for Socio-economic Analysis (71), and for public consultations,
before a decision can be taken under Article 73.
d2p "designed to protect" technologies
Revenues from Symphony's d2p "designed-to-protect" technologies
were GBP0.93 million, significantly ahead of the previous year
(2017: GBP0.32 million). Our range of d2p anti-microbial gloves are
listed in several large, as well as some smaller, retail outlets.
We continued to generate revenues from our d2p anti-microbial
masterbatch technology for water pipes, and after two years of
R&D and successful trials, Symphony shipped an initial
commercial order for d2p anti-insect masterbatch technology to a
very large global manufacturer of commercial agricultural
equipment. The value of this first part-container order was
$120,000, and the finished products made with this d2p technology
are being marketed globally.
We continue to have many customer-led d2p development projects,
with applications including anti-microbials, insecticide, flame
retardant, odour and moisture adsorbers, rodent repellents and
corrosion inhibitors. The Board are currently budgeting d2p
revenues for 2019 of not less than GBP1.1 million but are cautious
as to the exact timing of further product commercialisation and
growth in newly established areas.
Eranova
We are still conducting due-diligence in respect of a proposed
subscription in the Eranova project to make plastic from algae. As
part of this work, we are evaluating potential partners for
full-scale manufacturing which would begin after completion of a
pilot-plant in the EU.
The key benefits of the Eranova technology are:
-- using a natural renewable waste product which pollutes beaches;
-- a non-food-based resource (compared to corn or potatoes); and
-- higher yields per hectare due to the fast growing-rate of algae compared to food-crops.
This technology would complement Symphony's growing range of
environmental packaging solutions.
Brexit
The Board has considered the possible effects of Brexit on the
business, and at the current time believes that Brexit will not
have a material impact on the operations, financial performance or
future prospects of the Group. The principal reasons for this are
the Group's global operations, and the fact that 85.4% of the
Group's revenues were generated outside the EU mainland in 2018
(2017: 90.5%). However, the Board continues to monitor the Group's
operations in the UK and Europe in light of potential challenges
arising from Brexit and the current political and economic
uncertainties.
Outlook
We believe the Group is reaching a pivotal point in its
development. In particular, our Middle East market is increasing
the number of products which must be made with our d2w type of
oxo-biodegradable plastic technology, whilst at the same time
substantially improving their enforcement process. We are confident
that this will translate into materially higher sales of d2w going
forward. We are also experiencing a positive global effect with
noticeable increases in enquiries from potential customers around
the world, many being blue-chip companies, for products that will
comply with oxo-biodegradable legislation in the Middle East and
elsewhere.
We are encouraged by the growth of our d2p "designed-to-protect"
technologies in a number of different applications. We expect not
only significant growth but expect them to be joined by new product
developments which we anticipate commercialising in the
short-term.
We have high expectations for a commercially successful 2019 and
beyond and look forward to updating on positive progress made
during the year.
Michael Laurier, Chief Executive
Consolidated statement of comprehensive income
for the year ended 31 December 2018
2018 2017
Note GBP'000 GBP'000
------------------------------ ----- -------- --------
Revenue 4 8,802 8,267
Cost of sales (4,676) (4,255)
Gross profit 4,126 4,012
Distribution costs (210) (237)
Administrative expenses (3,852) (3,297)
Operating profit 5 64 478
Finance costs 7 (26) (48)
Profit for the year before
tax 38 430
Taxation 8 10 -
Profit for the year 48 430
------------------------------ ----- -------- --------
Total comprehensive income
for the year 48 430
------------------------------ ----- -------- --------
Basic earnings per share 9 0.03p 0.28p
Diluted earnings per share 9 0.03p 0.27p
------------------------------ ----- -------- --------
All results are attributable to the parent company equity
holders. There were no discontinued operations for either of the
above periods.
Consolidated statement of financial position
as at 31 December 2018
Company number 03676824
2018 2017
Note GBP'000 GBP'000
-------------------------------------- ----- -------- --------
ASSETS
Non-current
Property, plant and equipment 10 254 291
Intangible assets 11 34 47
288 338
Current
Inventories 13 623 567
Trade and other receivables 14 2,228 992
Cash and cash equivalents 15 374 631
3,225 2,190
Total assets 3,513 2,528
-------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Equity
Equity attributable to shareholders
of
Symphony Environmental Technologies
plc
Ordinary shares 16 1,543 1,516
Share premium 16 333 -
Retained earnings 16 123 67
Total equity 1,999 1,583
-------------------------------------- ----- -------- --------
Liabilities
Current
Borrowings 17 454 2
Trade and other payables 18 1,060 943
Total liabilities 1,514 945
-------------------------------------- ----- -------- --------
Total equity and liabilities 3,513 2,528
-------------------------------------- ----- -------- --------
These financial statements were approved by the Board of
Directors on 14 March 2019 and authorised for issue on 15 March
2019.
Consolidated statement of changes in equity
for the year ended 31 December 2018
Equity attributable to the equity holders of Symphony
Environmental Technologies plc:
Share Share Retained Total
capital premium Earnings/ equity
(deficit)
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- --------- ----------- --------
For the year to 31
December 2018
Balance at 1 January
2018 1,516 - 67 1,583
Issue of share capital 27 333 - 360
Share-based payments - - 8 8
-------------------------- --------- --------- ----------- --------
Transactions with
owners 27 333 8 368
-------------------------- --------- --------- ----------- --------
Total comprehensive
income for the year - - 48 48
-------------------------- --------- --------- ----------- --------
Balance at 31 December
2018 1,543 333 123 1,999
-------------------------- --------- --------- ----------- --------
For the year to 31
December 2017
Balance at 1 January
2017 1,499 3,533 (3,971) 1,061
Issue of share capital 17 75 - 92
Capital reduction - (3,608) 3,608 -
Transactions with
owners 17 (3,533) 3,608 92
-------------------------- -------- ---------- -------- --------
Total comprehensive
income for the year - - 430 430
-------------------------- -------- ---------- -------- --------
Balance at 31 December
2017 1,516 - 67 1,583
-------------------------- -------- ---------- -------- --------
Consolidated cash flow statement
for the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
------------------------------------------ ------------------------ --------
Cash flows from operating activities
Profit after tax 48 430
Adjustments for:
Depreciation 81 78
Amortisation 16 16
Loss on disposal of tangible
assets 1 3
Share-based payments 8 -
Foreign exchange (8) (5)
Interest expense 26 48
Tax credit (10) -
Changes in working capital:
Increase in inventories (55) (151)
(Increase)/decrease in trade
and other receivables (1,223) 579
Increase in trade and other payables 111 35
------------------------------------------- ------------------------ --------
Net cash (used)/generated in operations (1,005) 1,033
Tax received - R&D tax credits 10 -
------------------------------------------ ------------------------ --------
Net cash (used)/generated in operating
activities (995) 1,033
Cash flows from investing activities
Additions to property, plant and
equipment (45) (84)
Additions to intangible assets (3) (1)
Proceeds from sale of property,
plant and equipment - 10
------------------------------------------- ------------------------ --------
Net cash used in investing activities (48) (75)
Cash flows from financing activities
Movement in working capital facility 454 (625)
Movement in finance lease liability (2) (4)
Proceeds from share issue 360 92
Interest paid (26) (48)
------------------------------------------- ------------------------ --------
Net cash generated/(used) in financing
activities 786 (585)
Net change in cash and cash equivalents (257) 373
Cash and cash equivalents, beginning
of year 631 258
Cash and cash equivalents, end
of year 374 631
------------------------------------------- ------------------------ --------
Notes to the Annual Report and Accounts
1 General information
Symphony Environmental Technologies plc ('the Company') and
subsidiaries (together 'the Group') develop and supply
environmental plastic additives and products to a global
market.
The Company, a public limited company, is the Group's ultimate
parent company. It is incorporated and domiciled in England
(Company number 03676824). The address of its registered office is
6 Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, WD6 1JD,
England. The Company's shares are listed on the AIM market of the
London Stock Exchange.
2 Basis of preparation and significant accounting policies
Basis of preparation
The financial information set out in this report does not
constitute the Company's statutory accounts for the years ended 31
December 2018 or 2017 but is derived from the 2018 accounts.
Statutory accounts for 2017 have been delivered to the Registrar of
Companies and those for 2018 will be delivered to the Registrar of
Companies following the Annual General Meeting. The auditor has
reported on the financial statements for the year ended 31 December
2018; its report was (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and (iii) did not contain
a statement under section 498(2) or section 498(3) of the Companies
Act 2006.
These condensed preliminary financial statements for the year
ended 31 December 2018 have been prepared in accordance with the
requirements of International Financial Reporting Standards (IFRS)
as adopted by the European Union.
These condensed preliminary financial statements have been
prepared under the historical cost convention except as stated in
the accounting policies. Financial information is presented in
pounds sterling unless otherwise stated, and amounts are expressed
in thousands (GBP'000) and rounded accordingly.
Changes to accounting policies during the year are detailed in
'Standards and interpretations adopted during the year'.
Consolidation
The consolidated annual report and accounts incorporate those of
Symphony Environmental Technologies plc and all of its subsidiary
undertakings. Subsidiaries acquired during the year are
consolidated using the acquisition method. Under the acquisition
method, their results are incorporated from the date that control
passes. The difference between the cost of acquisition of shares in
subsidiaries and the fair value of the separable net assets
acquired is capitalised as goodwill. All annual report and accounts
are made up to 31 December 2018.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred. Where necessary, adjustments are made to the annual
report and accounts of subsidiaries to bring the accounting
policies used into line with those used by other members of the
Group.
Going concern
On the basis of current financial projections and available
funds and facilities, the Directors are satisfied that the Group
has adequate resources to continue in operational existence for the
foreseeable future and, accordingly, continue to adopt the going
concern basis in preparing the Group and Company financial
statements.
Revenue
- Plastic additives and finished products, and associated
products
Revenue is stated at the fair value of the consideration
receivable and excludes VAT and trade discounts.
The Group's revenue is from the sale of goods. Revenue from the
sale of goods is recognised when all of the following conditions
have been satisfied:
-- Identification of the contract - Due to the nature of the
goods sold, the Group effectively approves an implied contract with
a customer when it accepts a purchase order from the customer.
-- Identification of the separate performance obligations in the
contract - The Group must fulfil the following obligations, which
are agreed on acceptance of the purchase order:
- To make the goods available for dispatch on the required date;
- To organise freight in accordance with agreed INCOTERMs (a
series of pre-defined commercial terms published by the
International Chamber of Commerce).
-- Determine the transaction price of the contract - The
transaction price is determined as the fair value of the
consideration the Group expects to receive on transfer of the
goods. The price of the sale includes the goods price and the cost
of the transport, if applicable.
-- Allocation of the transaction price to the performance
obligations identified - Sales prices are agreed with each customer
and are not generally a fixed price per unit. The transport price
will also vary across sales as it is based on quotes received from
the Group's freight agents, as transport is charged at cost.
Although the Group is effectively an agent in the provision of
transport rather than the principal under IFRS 15, the transport
cost is insignificant in the context of the overall sale price and
therefore it is not netted out of revenue and cost;
-- Recognition of revenue when each performance obligation is
satisfied - Provided that the goods have been made available for
dispatch on the required date, this performance obligation has been
fulfilled and the revenue for this performance obligation is
therefore recognised at this date. In respect to the freight
element, the agreed INCOTERMs need to be satisfied. At this point,
the Group recognises the revenue for this separate performance
obligation.
Intangible assets
- Research and development costs
Expenditure on research (or the research phase of an internal
project) is recognised as an expense in the period in which it is
incurred. Development costs incurred on specific projects are
capitalised when all the following conditions are satisfied:
-- completion of the intangible asset is technically feasible so
that it will be available for use or sale;
-- the Group intends to complete the intangible asset and use or sell it;
-- the Group has the ability to use or sell the intangible asset; and
-- the intangible asset will generate probable future economic benefits.
Among other things, this requires that there is a market for the
output from the intangible asset or for the intangible asset
itself, or, if it is to be used internally, the asset will be used
in generating such benefits;
-- there are adequate technical, financial and other resources
to complete the development and to use or sell the intangible
asset; and
-- the expenditure attributable to the intangible asset during
its development can be measured reliably.
Development costs not meeting the criteria for capitalisation
are expensed as incurred.
The cost of an internally generated intangible asset comprises
all directly attributable costs necessary to create, produce, and
prepare the asset to be capable of operating in the manner intended
by management. The nature of the Group's activities in the field of
development work renders some internally generated intangible
assets unable to meet the above criteria at present.
Amortisation commences upon completion of the asset and is shown
within administrative expenses and is included at the following
rate:
Plastic masterbatches and other additives 15 years straight
line
Careful judgement by the Directors is applied when deciding
whether the recognition requirements for development costs have
been met. This is necessary as the economic success of any product
development is uncertain and may be subject to future technical
problems at the time of recognition. Judgements are based on the
information available at each balance sheet date. All amounts
disclosed within note 11 in development costs relate to plastic
masterbatches and other additives.
- Trademarks
Trademarks represent the cost of registration and are carried at
cost less amortisation. Amortisation is calculated so as to write
off the cost of an asset, less its estimated residual value, over
the useful economic life of that asset as follows:
Trademarks 10 years straight line
Property, plant and equipment
Property, plant and equipment are stated at cost, net of
depreciation and any provision for impairment. The cost comprises
of the purchase price of the asset plus directly attributable
costs.
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, over the useful economic
life of that asset as follows:
Plant and machinery - 20% reducing balance.
Fixtures and fittings - 10% straight line.
Motor vehicles - 25% reducing balance.
Office equipment - 25% straight line.
The residual value and useful economic lives are reconsidered
annually.
Impairment testing of intangible assets and property, plant and
equipment
All individual assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable.
An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market
conditions less costs to sell, and value in use based on an
internal discounted cash flow evaluation. All assets are
subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist.
Inventories
Inventories are valued at the lower of cost and net realisable
value, after making due allowance for obsolete and slow moving
items. Cost is determined on the basis of purchase value plus all
directly attributable costs of bringing the inventory to the
current location and condition, on a first-in first-out basis.
Leased assets
In accordance with International Accounting Standard (IAS) 17,
the economic ownership of a leased asset is transferred to the
lessee if the lessee bears substantially all the risks and rewards
related to the ownership of the leased asset. The related asset is
recognised at the time of inception of the lease at the fair value
of the leased asset or, if lower, the present value of the minimum
lease payments plus incidental payments, if any, to be borne by the
lessee. A corresponding amount is recognised as a finance leasing
liability. The interest element of leasing payments represents a
constant proportion of the capital balance outstanding and is
charged to statement of comprehensive income loss over the period
of the lease.
All other leases are regarded as operating leases and the
payments made under them are charged to statement of comprehensive
income on a straight-line basis over the lease term. Lease
incentives are spread over the term of the lease.
Employee costs
- Employee compensation
Employee benefits are recognised as an expense.
- Post employment obligations
The Group operates a defined contribution pension scheme for
employees. The assets of the scheme are held separately from those
of the Group. The pension costs charged against profits are the
contributions payable to the scheme in respect of the accounting
period.
Taxation
Current tax is the tax currently payable based on taxable profit
for the year.
Deferred income taxes are calculated using the liability method
on temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities
and their tax bases. Tax losses available to be carried forward as
well as other income tax credits to the Group are assessed for
recognition as deferred tax assets, insofar as Group companies are
entitled to UK tax credits on qualifying research and development
expenditure, such amounts are recognised when received and
presented in the income tax line within statement of comprehensive
income.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in profit or loss, except where they
either relate to items that are charged or credited directly to
equity in which case the related deferred tax is also charged or
credited directly to equity, or where they relate to items charged
or credited in other comprehensive income the deferred tax change
is recognised in other comprehensive income.
Foreign currencies
Monetary assets and liabilities in foreign currencies are
translated into Sterling at the rates of exchange ruling at the
balance sheet date. Transactions in foreign currencies are
translated into Sterling at the rate of exchange ruling at the date
of the transaction. Exchange differences are taken into account in
arriving at the operating result. The Group uses derivatives such
as forward rate agreements to mitigate its current or future
positions against foreign exchange rate risks. These derivatives
are measured at fair value, determined by reference to observable
market prices at the reporting date.
Financial assets
The Group classifies all of its financial assets as loans and
receivables at amortised cost. Financial assets do not comprise
prepayments. Management determines the classification of its
financial assets at initial recognition.
These assets arise principally from the provision of goods and
services to customers (e.g. trade receivables), but also
incorporate other types of financial assets where the objective is
to hold their assets in order to collect contractual cash flows and
the contractual cash flows are solely payments of the principal and
interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision for
impairment.
Impairment provisions are recognised based on the simplified
approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the
lifetime expected credit loss for the trade receivables. For trade
receivables, which are reported net; such provisions are recorded
in a separate provision account with the loss being recognised
within administrative expenses in the consolidated statement of
comprehensive income. On confirmation that the trade receivable
will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
The Group's financial assets held at amortised cost comprise
trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position.
The Group has an invoice financing facility whereby it transfers
the rights to the cash flows from the related receivables to a
third party but retains the credit risk by providing a guarantee.
As the Group does not transfer substantially all the risks and
rewards of the receivables, no derecognition of financial assets is
required.
- Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and other
short-term, highly liquid deposits that are readily convertible
into known amounts of cash and which are subject to an
insignificant risk of changes in value.
Financial liabilities
The Group classifies its financial liabilities in the category
of financial liabilities at amortised cost. All financial
liabilities are recognised in the statement of financial position
when the Group becomes a party to the contractual provision of the
instrument.
Financial liabilities measured at amortised cost include:
-- Trade payables and other short-dated monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest rate
method.
-- Bank and other borrowings are initially recognised at fair
value net of any transaction costs directly attributable to the
issue of the instrument. Such interest-bearing liabilities are
subsequently measured at amortised cost using the effective
interest rate method, which ensures that any interest expense over
the period to repayment is at a constant rate on the balance of the
liability carried in the consolidated statement of financial
position. For the purposes of each financial liability, interest
expense includes initial transaction costs and any premium payable
on redemption, as well as any interest or coupon payable while the
liability is outstanding.
Unless otherwise indicated, the carrying values of the Group's
financial liabilities measured at amortised cost represents a
reasonable approximation of their fair values.
Equity settled share-based payments
All share-based payment arrangements granted after 7 November
2002 that had not vested prior to 1 January 2007 are recognised in
the annual report and accounts.
All goods and services received in exchange for the grant of any
share-based payment are measured at their fair values. Where
employees are rewarded using share-based payments, the fair values
of the instrument granted are determined using the Black-Scholes
model. This fair value is appraised at the grant date. The fair
value is charged to statement of comprehensive income between the
date of issue and the date the share options vest with a
corresponding credit taken to equity.
Equity
Equity comprises the following:
-- "Share capital" represents the nominal value of equity shares;
-- "Share premium" represents the excess over nominal value of
the fair value of consideration received for equity shares, net of
expenses of the share issue and after capital reduction; and
-- "Retained earnings" represents non-distributed reserves.
Standards and interpretations adopted during the year
The adoption of the following mentioned amendments in the
current year have not had a material impact on the
Group's/Company's financial statements:
EU effective
date - periods
beginning on
or after
IFRS 2 Share-based Payment: Amendment in 1 January 2018
relation to the classification and measurement
of share-based payment transactions
----------------
At the date of authorisation of these annual report and
accounts, certain new standards, amendments and interpretations to
existing standards became effective, as they had not been
previously adopted by the Group.
Information on new standards, amendments and interpretations
that are relevant to the Group's annual report and accounts is
provided below. Certain other new standards and interpretations
have been issued but are not expected to have a material impact on
the Group's annual report and accounts.
IFRS 9 'Financial Instruments'
In the current year, the Group has applied IFRS 9 Financial
Instruments (as revised in July 2014) and the related consequential
amendments to other IFRS Standards that are effective for an annual
period that begins on or after 1 January 2018.The IASB have
released IFRS 9 following completion of the project to replace IAS
39 'Financial Instruments: Recognition and Measurement'. The new
standard introduces extensive changes to IAS 39's guidance on the
classification and measurement of financial assets and introduces a
new 'expected credit loss' model for the impairment of financial
assets. IFRS 9 also provides new guidance on the application of
hedge accounting. IFRS 9 is effective for annual reporting periods
beginning on or after 1 January 2018 and has been endorsed by the
European Union. The Group's management have performed an impact
assessment of the effects of IFRS 9 on the 2018 figures and there
are not any material changes to the Group's annual report and
accounts.
IFRS 15, 'Revenue from Contracts with Customers'
In the current year, the Group has applied IFRS 15 Revenue from
Contracts with Customers (as amended in April 2016) which is
effective for an annual period that begins on or after 1 January
2018. IFRS 15 presents new requirements for the recognition of
revenue, replacing IAS 18 'Revenue', IAS 11 'Construction
Contracts', and several revenue-related Interpretations. The new
standard establishes a control-based revenue recognition model and
provides additional guidance in many areas not covered in detail
under existing IFRSs, including how to account for arrangements
with multiple performance obligations, variable pricing, customer
refund rights, supplier repurchase options, and other common
complexities. IFRS 15 is effective for reporting periods beginning
on or after 1 January 2018. This standard has been endorsed by the
European Union. The Group's management have performed an impact
assessment of the effects of IFRS 15 on the 2018 figures and there
are not any change to the statement of comprehensive income as
presented. The revenue recognition of the Group will remain
unchanged as all performance obligations under IFRS15 are met at
the same time as per the current revenue recognition policy as set
out above.
New and revised IFRS Standards in issue but not yet
effective
At the date of authorisation of these financial statements, The
Group has not applied the following new and revised IFRS Standards
that have been issued but are not yet effective.
IFRS 16 'Leases'
The IASB has published IFRS 16 'Leases', completing its
long-running project on lease accounting. The new Standard, which
is effective for accounting periods beginning on or after 1 January
2019, requires lessees to account for leases 'on-balance sheet' by
recognising a 'right-of-use' asset and a lease liability. The date
of initial application of IFRS 16 for the Group will be 1 January
2019. It will affect most companies that report under IFRS and are
involved in leasing and will have a substantial impact on the
annual report and accounts of lessees of property and high value
equipment. This standard has been endorsed by the European
Union.
The Group's management has carried out an impact review of the
implementation of IFRS 16 and has decided it will apply the
modified retrospective adoption method in IFRS 16, and, therefore,
will only recognise leases on the balance sheet as at 1 January
2019. In addition, it has decided to measure right-of-use assets by
reference to the measurement of the lease liability on that date.
This will ensure there is no immediate impact to net assets on that
date.
At 31 December 2018 operating lease commitments amounted to
GBP860,000 (see note 19), which is expected to reduce to GBP711,000
at 31 December 2019. Assuming the Group's lease commitments remain
at this level, the effect of discounting those commitments is
anticipated to result in right-of-use assets and lease liabilities
of approximately GBP745,000 being recognised on 1 January 2019.
However, further work still needs to be carried out to determine
whether and when extension and termination options are likely to be
exercised, which will result in the actual liability recognised
being higher than this.
Instead of recognising an operating expense for its operating
lease payments, the group will instead recognise interest on its
lease liabilities and amortisation on its right-of-use assets. This
will increase reported EBITDA by the amount of its current
operating lease cost, which for the year ended 31 December 2018 was
approximately GBP126,000.
IFRIC 23 'Uncertainty over Income Tax Positions'
IFRIC 23 clarifies how to recognise and measure current and
deferred income tax assets and liabilities when there is
uncertainty over income tax treatments. When there is uncertainty
over income tax treatments.
Other
The Group does not expect any other standards issued by the
IASB, but not yet effective, to have a material impact on the
group.
The following is a list of other new and amended standards
which, at the time of writing, had been issued by the IASB but
which are effective in future periods. The amount of quantitative
and qualitative detail to be given about each of the standards
will, much like the amount of detail to be given about IFRS 16,
depend on each entity's own circumstances.
-- Amendments to IFRS 9 Prepayment Features with Negative
Compensation (effective 1 January 2019)
-- Amendments to IAS 28: Long-term Interests in Associates and
Joint Ventures (effective 1 January 2019)
-- Annual Improvements to IFRSs 2015-2017 Cycle (IFRS 3 Business Combinations and IFRS
joint Arrangements, IAS 12 Income Taxes, and IAS 23 Borrowing
Costs) (effective 1 January 2019)
-- IFRS 17 Insurance Contracts (effective 1 January 2021)
3 Significant accounting estimates and judgements
Estimates and judgements are evaluated continually and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. Although these estimates are based on management's
best knowledge of current events and actions, actual results may
ultimately differ from those actions. Material changes to the
estimates and judgements made in the preparation of the interim
statements are detailed in the notes.
In preparing these accounts the following areas were considered
to involve significant estimates:
- Capitalisation of development costs
Estimates and related judgements in respect to the
capitalisation of development costs are detailed in note 2. In
particular, estimates are made in respect to future economic
benefits based on market judgements at the time and over
attributable internal staff time allocated to each product.
- Recoverability of capitalised development cost
Estimates and related judgements in respect to capitalised
development costs are detailed in note 11. In particular, estimates
are continued to be made in respect to future economic benefits and
any changes to market conditions.
- Share option judgements
Estimates and related judgements in respect to share-based
payment charges are detailed in note 2. Estimates are made on the
fair value of the option using the Black-Scholes model.
- Going concern
Estimates and related judgements in respect to going concern are
detailed in note 2. In particular, estimates are made as to future
revenues expectations which derive cash flow projections.
- Expected credit losses (ECLs)
Expected credit losses are shown in note 14. ECLs are determined
based on historical data available to management in addition to
forward looking information utilising management knowledge.
Adequate information exists to support the recoverability of the
net receivables balance.
- Functional currency
A significant proportion of the revenues generated by entities
within the group are denominated in United States Dollars (USD).
The functional currency of the Company and of all individual
entities within the Group has been determined to be Sterling.
Identification of functional currencies requires a judgement as to
the currency of the primary economic environment in which the
companies of the Group operate. This is based on analysis of the
economic environment and cash flows of the subsidiaries of the
Group, which has determined, based upon the currency of funding and
operating costs, that the functional currency continues to be
Sterling.
In preparing these accounts the following areas were considered
to involve significant judgements:
- Recognition of deferred tax assets
Judgements and estimates relating to a deferred tax asset are
detailed in note 2. In particular, estimates are made as to future
revenues which derive profit and loss projections. However,
management does not consider it appropriate to recognise a deferred
tax asset where there is uncertainty over the amount of future
profits.
4 Segmental information
The Board has reviewed the requirements of IFRS 8 "Operating
Segments", including consideration of what results and information
the Board reviews regularly to assess performance and allocate
resources, and concluded that all revenue falls under a single
business segment. The Directors consider the business does not have
separate divisional segments as defined under IFRS 8. The Board
assesses the commercial performance of the business based upon a
single set of revenues, margins, operating costs and assets.
The revenues of the Group are divided in the following
geographical areas:
Geographical area 2018 2017
GBP'000 GBP'000
UK 417 288
Europe 1,281 784
Americas 3,414 3,263
Middle East and Africa 2,472 3,002
Asia 1,218 930
------------------------- --------- ---------
Total 8,802 8,267
------------------------- --------- ---------
Revenues attributable to the above geographical areas are made
on the basis of final destination of the customer to which the
goods are sold.
Non-current assets of GBP20,000 are held outside of the UK
(2017: GBP25,000).
Major customers
There was one customer that accounted for greater than 10% of
total Group revenues for 2018 (2017: one customer). In 2018 one
customer accounted for GBP2,235,000 or 25% (2017: GBP2,861,000 or
35%) of total group revenues.
5 Operating profit
The operating profit is stated after charging:
2018 2017
GBP'000 GBP'000
---------------------------------------------- --------- ---------
Depreciation 81 78
Amortisation 16 16
Loss on disposal of property, plant
and equipment 1 3
Research and development expenditure
not capitalised 664 625
Operating lease rentals:
Land and buildings 114 114
Plant and equipment 12 6
Fees payable to the Company's auditor:
Audit related services:
Audit of the annual report and accounts 11 11
Audit of the annual report and accounts
of the Company's subsidiaries
Non-audit related services: 15 15
Other assurance related services 11 -
Tax compliance services 9 8
Net foreign exchange loss 30 22
---------------------------------------------- --------- ---------
6 Directors and employees
Staff costs (including directors) during the year comprise:
2018 2017
GBP'000 GBP'000
----------------------- --------- ---------
Wages and salaries 1,530 1,382
Social security costs 210 167
Share-based payments 8 -
Other pension costs 65 53
----------------------- --------- ---------
1,813 1,602
----------------------- --------- ---------
Average monthly number of people (including directors) by
activity:
2018 2017
----------------------------- ----- -----
R&D,testing and technical 9 7
Selling 6 6
Administration 10 9
Management 7 6
Marketing 2 1
----------------------------- ----- -----
Total average headcount 34 29
----------------------------- ----- -----
Remuneration in respect of the Directors was as follows:
2018 2017
GBP'000 GBP'000
-------------- --------- ---------
Emoluments 577 551
577 551
-------------- --------- ---------
Key management remuneration:
2018 2017
GBP'000 GBP'000
Short-term employee benefits 569 551
Share-based payments 8 -
-------------------------------- --------- ---------
577 551
-------------------------------- --------- ---------
The Directors are considered to be the key management personnel
of the Group. Further details on Directors' remuneration and share
options are set out in the Remuneration Committee Report. These
disclosures form part of the audited financial statements of the
Group.
7 Finance costs
2018 2017
GBP'000 GBP'000
---------------------------------------- --------- ---------
Interest expense:
Bank and invoice finance borrowings 26 48
Total finance costs 26 48
---------------------------------------- --------- ---------
Net finance costs 26 48
---------------------------------------- --------- ---------
8 Taxation
2018 2017
GBP'000 GBP'000
------------------------ --------- ---------
R&D tax credit 10 -
Total income tax credit 10 -
------------------------ --------- ---------
No tax arises on the profit for the year.
The tax assessed for the year is different from the standard
rate of corporation tax in the UK of 19% (2017: 19%).The
differences are explained as follows:
2018 2017
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Profit for the year before tax 38 430
----------------------------------------------- --------- ---------
Tax calculated by rate of tax on the result
Effective rate for year at 19% (2017: 19.25%) 7 83
Expenses not deductible for tax purposes 13 8
Fixed asset related timing differences 3 (7)
R&D tax relief (58) (70)
Share scheme deduction (6) (16)
Short term timing differences 3 2
Losses carried forward 1 -
R&D tax credit not yet recognised 37 -
R&D tax credit in respect of previous periods (10) -
Total income tax credit (10) -
----------------------------------------------- --------- ---------
Symphony Environmental Limited continues to undertake research
and development work which results in a research and development
tax credit being made repayable to the company by HMRC in exchange
for tax losses surrendered by the company at a tax rate of 14.5%.
As in prior years, the group has chosen to recognise such cash tax
credits in its financial statements, once the relevant research and
development claim has been accepted and repaid by HMRC. Usually
this is shortly after the submission of the company's tax return.
The cash tax credit of GBP10,000 shown above relates to repayments
made by HMRC in relation to the years ended 31 December 2016 and 31
December 2017.
In calculating the overall tax charge for the Group for the
period, Symphony Environmental Limited has provisionally included a
portion of the anticipated research and development claim for year
ended 31 December 2018 to increase the trading losses made
available for surrender to Symphony Environmental Technologies Plc
as group relief. In doing so, the overall current year tax charge
for the Group for the period has been reduced to nil. Symphony
Environmental Limited intends to surrender any remaining trading
losses, not claimed as group relief, in exchange for a cash tax
credit. The Group expects to be able to recognise this cash tax
credit within next year's financial statements once this is
repaid.
The recognition of the deferred tax asset is based on
sensitising management forecasts to estimate the future taxable
profits against which the losses will be relieved. Judgements have
been made in respect to profitability going forward based upon
current sales leads and market receptiveness to anticipated product
launches.
The Group has not recognised a deferred tax asset in respect of
losses available for use against future taxable profits due to
uncertainties on timing. The Group has tax losses of approximately
GBP16,152,000 (2017: GBP16,000,000). These tax losses have no
expiry date. The unrecognised deferred tax asset in respect of
these losses based on latest profit projections is approximately
GBP2,745,000 (2017: GBP2,730,000).
These brought forward losses are subject to the new loss
restriction rules introduced on 1 April 2017. Groups with more than
GBP5m taxable profits per annum will only be able to utilise 50% of
their brought forward losses against taxable profits exceeding the
GBP5m cap. As Symphony does not expect its taxable profits to
exceed GBP5m in the near to immediate term, it is not possible to
quantify the impact of these changes at this moment in time.
The main rate of corporation tax was reduced from 20% to 19%
from 1 April 2017 and remains unchanged. A further reduction in the
UK corporation tax rate was substantively enacted on 6 September
2016 reducing the headline corporation tax rate from 18% to 17%
applicable from 1 April 2020.
The group also has gross fixed assets of GBP04,000 (2017:
GBP120,000) which give rise to a deferred tax liability of
GBP18,000 (2017: GBP20,000). Other gross temporary timing
differences of GBP37,000 (2017: GBP19,000) give rise to a deferred
tax asset of GBP6,000 (2017: GBP3,000). The net deferred tax
liability of GBP11,000 (2017: GBP17,000) is sheltered by the
unrecognised deferred tax asset in respect of losses.
9 Earnings per share and dividends
The calculation of basic earnings per share is based on the
profit attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year. The
calculation of diluted earnings per share is based on the basic
earnings per share, adjusted to allow for the issue of shares on
the assumed conversion of all dilutive options and warrants.
Reconciliations of the profit and weighted average numbers of
shares used in the calculations are set out below:
Basic and diluted 2018 2017
--------------------------------- -------------- --------------
Profit attributable to equity GBP48,000 GBP430,000
holders of the Company
--------------------------------- -------------- --------------
Weighted average number of
ordinary shares in issue 152,877,898 151,089,240
--------------------------------- -------------- --------------
Basic earnings per share 0.03 pence 0.28 pence
--------------------------------- -------------- --------------
Dilutive effect of weighted
average options and warrants 9,585,716 9,925,427
Total of weighted average
shares together with dilutive
effect of weighted options 162,463,614 161,014,667
--------------------------------- -------------- --------------
Diluted earnings per share 0.03 pence 0.27 pence
--------------------------------- -------------- --------------
No dividends were paid for the year ended 31 December 2018
(2017: GBPnil).
A total of 14,351,500 options and warrants were outstanding at
the end of the year which may become dilutive in future years.
10 Property, plant and equipment
Year ended 31 December Plant Fixtures Motor Office
2018 & Machinery & Fittings Vehicles Equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------------- ------------ ---------- ----------- --------
Cost
At 1 January 2018 417 291 31 104 843
Additions 19 5 - 21 45
Disposals (6) - - (34) (40)
------------------------ ------------- ------------ ---------- ----------- --------
At 31 December
2018 430 296 31 91 848
------------------------ ------------- ------------ ---------- ----------- --------
Depreciation
At 1 January 2018 256 194 22 80 552
Charge for the
Year 35 29 2 15 81
Disposals (6) - - (33) (39)
------------------------ ------------- ------------ ---------- ----------- --------
At 31 December
2018 285 223 24 62 594
------------------------ ------------- ------------ ---------- ----------- --------
Net Book Value
At 31 December
2018 145 73 7 29 254
------------------------ ------------- ------------ ---------- ----------- --------
At 31 December
2017 161 97 9 24 291
------------------------ ------------- ------------ ---------- ----------- --------
Included within net book value of motor vehicles is GBPnil
(2017: GBP7,000) relating to assets held under finance leases and
hire purchase contracts. The depreciation charged to the annual
report and accounts in the year in respect of such assets amounted
to GBP1,000 (2017: GBP3,000), and is included within administrative
expenses in the statement of comprehensive income.
Year ended 31 December Plant Fixtures Motor Office
2017 & Machinery & Fittings Vehicles Equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------------- ------------ ---------- ----------- --------
Cost
At 1 January 2017 364 292 61 125 842
Additions 68 2 - 15 85
Disposals (15) (3) (30) (36) (84)
------------------------ ------------- ------------ ---------- ----------- --------
At 31 December
2017 417 291 31 104 843
------------------------ ------------- ------------ ---------- ----------- --------
Depreciation
At 1 January 2017 233 167 46 98 544
Charge for the
Year 29 30 2 17 78
Disposals (6) (3) (26) (35) (70)
------------------------ ------------- ------------ ---------- ----------- --------
At 31 December
2017 256 194 22 80 552
------------------------ ------------- ------------ ---------- ----------- --------
Net Book Value
At 31 December
2017 161 97 9 24 291
------------------------ ------------- ------------ ---------- ----------- --------
At 31 December
2016 131 125 15 27 298
------------------------ ------------- ------------ ---------- ----------- --------
11 Intangible assets
Year ended 31 December Development Trademarks Total
2018 costs
GBP'000 GBP'000 GBP'000
------------------------ ------------ ----------- --------
Cost
At 1 January 2018 1,973 85 2,058
Additions - 3 3
Disposals - (12) (12)
------------------------ ------------ ----------- --------
At 31 December
2018 1,973 76 2,049
------------------------ ------------ ----------- --------
Amortisation
At 1 January 2018 211 27 238
Charge for the
Year 11 5 16
Disposals - (12) (12)
------------------------ ------------ ----------- --------
At 31 December
2018 222 20 242
------------------------ ------------ ----------- --------
Impairment
At 1 January 2018 1,728 45 1,773
Recognised in the - - -
Year
------------------------ ------------ ----------- --------
At 31 December
2018 1,728 45 1,773
------------------------ ------------ ----------- --------
Net Book Value
At 31 December
2018 23 11 34
------------------------ ------------ ----------- --------
At 31 December
2017 34 13 47
------------------------ ------------ ----------- --------
Development costs are capitalised in accordance with the policy
set out in note 2. In capitalising these costs, judgements are made
relating to ongoing feasibility and commerciality of products and
systems being developed. In making these judgements, cash flow
forecasts are used and these include significant estimates in
respect to sales forecasts and future foreign exchange rates. The
amortisation charge is included within administrative expenses in
the statement of comprehensive income. Development costs include in
the net book value of GBP23,000 (2017: GBP34,000) have two years of
amortisation remaining as at 31 December 2018 (2017: three
years).
Year ended 31 December Development Trademarks Total
2017 costs
GBP'000 GBP'000 GBP'000
------------------------ ------------ ----------- --------
Cost
At 1 January 2017 1,973 84 2,057
Additions - 1 1
At 31 December
2017 1,973 85 2,058
------------------------ ------------ ----------- --------
Amortisation
At 1 January 2017 201 21 222
Charge for the
year 10 6 16
At 31 December
2017 211 27 238
------------------------ ------------ ----------- --------
Impairment
At 1 January 2017 1,728 45 1,773
Recognised in the - - -
year
------------------------ ------------ ----------- --------
At 31 December
2017 1,728 45 1,773
------------------------ ------------ ----------- --------
Net Book Value
At 31 December
2017 34 13 47
------------------------ ------------ ----------- --------
At 31 December
2016 44 18 62
------------------------ ------------ ----------- --------
12 Subsidiary undertakings
Name Country Nature of business Proportion Proportion
of incorporation of ordinary of ordinary
shares shares
held by held by
parent the Group
------------------------ ------------------- -------------------- ------------- -------------
Development
and supply of
environmental
Symphony Environmental England plastic additives
Limited and Wales and products 100% 100%
England
D2W Limited and Wales Dormant 0% 100%
Symphony Recycling England
Technologies Limited and Wales Dormant 100% 100%
Symphony Energy England
Limited and Wales Dormant 100% 100%
------------------------ ------------------- -------------------- ------------- -------------
All of the above subsidiaries are consolidated in the Group
annual report and accounts. The above companies have their
registered offices at 6 Elstree Gate, Elstree Way, Borehamwood, WD6
1JD.
13 Inventories
2018 2017
GBP'000 GBP'000
------------------------------------- --------- ---------
Finished goods and goods for resale 372 438
Raw materials 251 129
------------------------------------- --------- ---------
623 567
------------------------------------- --------- ---------
The cost of inventories recognised as an expense and included in
'cost of sales' amounted to GBP3,997,000 (2017: GBP3,819,000).
There is a provision of GBP7,500 for the impairment of inventories
(2017: GBP73,000).
There is no collateral on the above amounts.
14 Trade and other receivables
2018 2017
GBP'000 GBP'000
------------------- --------- ---------
Trade receivables 1,978 739
Other receivables 38 53
VAT 58 58
Prepayments 154 142
2,228 992
------------------- --------- ---------
The Directors consider that the carrying value of trade and
other receivables approximates to their fair values.
Symphony Environmental Technologies plc applies the IFRS 9
simplified approach to measuring expected credit losses (ECL) which
uses a lifetime expected loss allowance for all trade receivables.
The ECL balance has been determined based on historical data
available to management in addition to forward looking information
utilising management knowledge. Based on the analyses performed,
management expect that all balances will be recovered, thus there
is no material impact on the transition to ECL.
Trade receivables are amounts due from customers for goods sold
or services performed in the ordinary course of business. They are
generally due for settlement within 120 days and therefore are all
classified as current. The majority of trade and other receivables
are non-interest bearing. Where the effect is material, trade and
other receivables are discounted using discount rates which reflect
the relevant costs of financing.
The maximum credit risk exposure at the balance sheet date
equates to the carrying value of trade receivables. Further
disclosures are set out in note 22.
Trade receivables are secured against the facilities provided by
the Group's bankers.
Included in trade receivables are debtors which are past due but
where no provision has been made as there has not been a change in
the credit worthiness of these debtors and the amounts are
considered recoverable. The ageing analysis of debt taking into
account credit terms is shown below.
Days past 0 - 31-60 61-90 91-120 >120 Total ECL Total
due 30 GBP'000 GBP'000 GBP'000 GBP'000 Gross GBP'000 Net
GBP'000 GBP'000 GBP'000
------------- --------- --------- --------- --------- --------- --------- --------- ---------
31 December
2018 1,871 66 39 - 27 2,003 (25) 1,978
31 December
2017 625 85 17 2 33 762 (23) 739
------------- --------- --------- --------- --------- --------- --------- --------- ---------
15 Cash and cash equivalents
2018 2017
GBP'000 GBP'000
----------------------------------- --------- ---------
Cash at bank and in hand 374 576
Invoice finance facility surplus - 55
------------------------------------- --------- ---------
374 631
----------------------------------- --------- ---------
The carrying amount of cash equivalents approximates to their
fair values.
16 Equity
Group and Company Group
--------------------- ---------------------------------- --------------------
Ordinary Ordinary Share Retained Total
shares shares premium earnings
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------ --------- --------- ---------- --------
At 1 January 2018 151,614,377 1,516 - 67 1,583
Issue of share
capital 2,730,000 27 333 - 360
Share-based payment - - - 8 8
Profit for the
year - - - 48 48
At 31 December
2018 154,344,377 1,543 333 123 1,999
--------------------- ------------ --------- --------- ---------- --------
At 1 January
2017 149,939,377 1,499 3,533 (3,971) 1,061
Issue of share
capital 1,675,000 17 75 - 92
Capital reduction - - (3,608) 3,608 -
Profit for the
year - - - 430 430
------------------- -------------- -------- -------- ---------- --------
At 31 December
2017 151,614,377 1,516 - 67 1,583
------------------- -------------- -------- -------- ---------- --------
During the year the Company issued 2,730,000 Ordinary Shares
(2017: 1,675,000 ordinary shares) for a consideration of GBP360,000
(2017: GBP92,000).
Share options and warrants
As at 31 December 2018 the Group maintained an approved
share-based payment scheme for employee compensation. For the
options granted to vest, the Group must have achieved an earnings
per share in excess of 0.001p and employees must serve a specified
amount of time.
All share-based employee compensation will be settled in equity.
The Group has no legal or constructive obligation to repurchase or
settle the options. As at 31 December 2018 there were 1,450,000
approved staff options outstanding. No approved staff options were
issued in 2018.
The Group has also issued unapproved share options and warrants.
The weighted average exercise price of all of the Group's options
and warrants are as follows:
2018 2017
Weighted Weighted
average average
exercise exercise
Number price Number price
GBP GBP
---------------- ------------ ---------- ------------ ----------
Outstanding at
1 January 15,781,500 0.07 24,456,500 0.09
Granted 1,850,000 0.16 - -
Exercised (2,730,000) 0.13 (1,675,000) 0.05
Lapsed (550,000) 0.05 (7,000,000) 0.15
Outstanding at
31 December 14,351,500 0.07 15,781,500 0.07
----------------- ------------ ---------- ------------ ----------
The weighted average exercise price of options exercised in 2018
was 13p (2017: 5p).
The number of share options and warrants exercisable at 31
December 2018 was 14,351,500 (2017: 15,781,500). The weighted
average exercise price of those shares exercisable was 7p (2017:
7p).
The weighted average option contractual life is seven years
(2017: eight years) and the range of exercise prices is 2.375p to
25p (2017: 2.375p to 15p).
Directors
Directors' interests in shares and share incentives are
contained in the Remuneration Committee Report. These disclosures
form part of the audited financial statements of the Group.
IFRS2 expense
The IFRS 2 share-based payment charge for the year is GBP8,000
(2017: GBPnil).
The Black-Scholes model was used for calculating the cost of
staff options. The model inputs for each of the options issued
were:
Grant date 6 April 2018
Share price at
grant date 20.25p
Exercise price 20.25p
Expected volatility 12.49%
Contractual life 3 years
Share prices at grant date were based on the observable market
price of the Group's share price, using the closing market price of
the Group's share price the day before the options were
granted.
17 Borrowings
2018 2017
GBP'000 GBP'000
Current
Other loans 454 -
Finance lease liabilities - 2
454 2
----------- --------- ---------
Other loans include:
An amount due relating to the invoice financing facility
totalling GBP454,000 (2017: GBPnil). Interest is charged at 2.20%
over HSBC Bank plc base rate per annum. At 31 December 2017 the
invoice finance facility was showing a surplus so is included
within cash and cash equivalents.
The bank and invoice finance facility are secured by a fixed and
floating charge over the Group's assets. The finance lease
liabilities are secured against the asset that they finance.
Commitments under finance leases and hire purchase agreements
mature as follows showing both gross and net of finance costs:
Gross Gross Net Net
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- --------- --------- ---------
Amounts payable within
one year - 2 - 2
- 2 - 2
----------------------------------- --------- --------- ---------
Reconciliation of liabilities arising from financing
activities
For the year ended 31 December 2018
1 January Non-cash 31 December
2018 Cash flows changes 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- ---------- --------- -----------
Working capital facility - 454 - 454
Movement in finance lease
liability 2 (2) - -
Issue of shares 1,516 360 - 1,876
-------------------------- --------- ---------- --------- -----------
Total liabilities from
financing activities 1,518 812 - 2,330
-------------------------- --------- ---------- --------- -----------
For the year ended 31 December 2017
1 January Non-cash 31 December
2017 Cash flows changes 2017
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- ---------- --------- -----------
Working capital facility 625 (625) - -
Movement in finance lease
liability 6 (4) - 2
Issue of shares 5,032 92 (3,608) 1,516
--------------------------------- --------- ---------- --------- -----------
Total liabilities from financing
activities 5,663 (537) (3,608) 1,518
--------------------------------- --------- ---------- --------- -----------
18 Trade and other payables
Current 2018 2017
GBP'000 GBP'000
--------------------------------- --------- ---------
Financial liabilities measured
at amortised cost:
Trade payables 906 730
Other payables 5 5
Social security and other taxes 58 48
Accruals 91 160
1,060 943
--------------------------------- --------- ---------
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 64 days (2017: 62 days).
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 value of trade and
other payables approximate to their fair value.
19 Commitments and contingencies
a) Capital commitments
The Group had capital commitments totalling GBPnil at the end of
the year (2017: GBPnil).
b) Operating lease commitments
The future aggregate minimum lease payments under
non-cancellable operating leases are as follows:
2018 2017
GBP'000 GBP'000
-------------------------------------------- --------- ---------
No later than one year 149 137
Later than one year and no later than five
years 579 543
Greater than five years 132 264
860 944
-------------------------------------------- --------- ---------
Operating lease commitments include the lease for the Group's
head office property which has a ten-year term with a five-year
break clause at the option of the Group. The financial obligations
are calculated up to the expiry of the lease.
c) Contingent liabilities
The Group had contingent liabilities totalling of GBPnil at the
end of the year (2017: GBPnil).
20 Related party transactions
Included in other receivables is an amount of GBP1,000 (2017:
other payables GBP2,000) owed by The Oxo-Biodegradable Plastics
Association, a not for profit company limited by guarantee, in
which Symphony Environmental Technologies plc is a person of
significant control. The amount of GBP1,000 (2017: GBPnil) is
unsecured and settlement will be in cash.
21 Financial Instruments - classification and measurement
The Group's financial assets and liabilities, which are all held
at amortised cost, are summarised as follows:
2018 2017
GBP'000 GBP'000
--------------------------- --------- ---------
Financial assets:
Trade receivables 1,978 739
Other receivables 38 53
Cash and cash equivalents 374 631
2,390 1,423
--------------------------- --------- ---------
Financial liabilities:
Trade payables 906 730
Other payables 5 5
Accruals 91 160
Other loans 454 -
Lease obligations - 2
1,456 897
--------------------------- --------- ---------
22 Financial instruments - risk management
The main risks arising from the Group's financial instruments
are liquidity risk, interest rate risk, currency risk and credit
risk. The Directors review and agree policies for managing each of
these risks and they are summarised below. These policies have
remained unchanged from previous years.
Liquidity risk
The Group seeks to manage financial risk to ensure financial
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitability. Short term flexibility is achieved
through trade finance arrangements and overdrafts.
Having reviewed the maturity of financial liabilities and the
forecast cash flows for the forthcoming twelve month period, the
Directors believe that sufficient cash will be generated from
trading operations to meet debt obligations as they fall due.
The maturity of financial liabilities as at 31 December 2018 is
summarised as follows:
Gross cash flows: Trade and other payables and Finance leases Other Bank Total
accruals loans
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------------------------------- --------------- -------- -------- --------
Zero to sixty days 1,002 - 454 - 1,456
Sixty one days to three months - - - - -
Four months to six months - - - - -
Seven months to one year - - - - -
One year to three years - - - - -
1,002 - 454 - 1,456
-------------------------------- ---------------------------------- --------------- -------- -------- --------
The maturity of financial liabilities as at 31 December 2017 is
summarised as follows:
Gross cash flows: Trade Finance leases Loans Bank Total
and other payables and accruals
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------------------------------- --------------- -------- -------- --------
Zero to sixty days 895 1 - - 896
Sixty one days to three months - - - - -
Four months to six months - 1 - - 1
Seven months to one year - - - - -
One year to three years - - - - -
895 2 - - 897
-------------------------------- --------------------------------- --------------- -------- -------- --------
Interest rate risk
The Group seeks to reduce its exposure to interest rate risk
where possible, but this is offset by the availability of trade
finance arrangements which are transaction specific to meet
liquidity needs and so have variable interest rate terms.
Sensitivities have been looked at in the range of an absolute
rate increase of 5% or a decrease of 1% which enable an objective
calculation to be made depending on any interest rate changes in
the future. Any rate changes would be outside the control of the
Group.
The Group's exposure to interest rate risk as at 31 December
2018 is summarised as follows:
Fixed Variable Zero Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- --------- --------- -------- --------
Cash and cash equivalents - 374 - 374
Trade receivables - - 1,978 1,978
Other debtors - - 38 38
----------------------------------------------- --------- --------- -------- --------
- 374 2,016 2,390
Trade payables - - (906) (906)
Other payables - - (5) (5)
Bank overdraft - - - -
Lease purchase - - - -
Other loans - (454) - (454)
- (80) 1,105 1,025
--------------------------------------------------------- --------- -------- --------
Sensitivity: increase in interest rates of 5% (4) (4)
Sensitivity: decrease in interest rates of 1% 1 1
---------------------------------------------------------- --------- -------- --------
The Group's exposure to interest rate risk as at 31 December
2017 is summarised as follows:
Fixed Variable Zero Total
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- -------- --------- -------- --------
Cash and cash equivalents - 631 - 631
Trade receivables - - 739 739
Other debtors - - 53 53
----------------------------------------------- -------- --------- -------- --------
- 631 792 1,423
Trade payables - - (730) (730)
Other payables - - (5) (5)
Bank overdraft - - - -
Lease purchase (2) - - (2)
(2) 631 57 686
----------------------------------------------- -------- --------- -------- --------
Sensitivity: increase in interest rates of 5% - 32 - 32
Sensitivity: decrease in interest rates of 1% - (6) - (6)
----------------------------------------------- -------- --------- -------- --------
Sensitivity shows the effect on equity and statement of
comprehensive income.
Currency risk
The Group operates in overseas markets and is subject to
currency exposure on transactions undertaken during the year. The
Group hedges the transactions where possible by buying goods and
selling them in the same currency. The Group also has bank
facilities available for hedging purposes.
A summary of foreign currency financial assets and liabilities
as stated in the statement of financial position together with a
sensitivity analysis showing the effect of a 10% change in rate
with Sterling is shown below:
Currency Sterling Currency balance Sterling Currency balance
balance 2018 balance 2017
2018 '000 2017 '000
GBP'000 GBP'000
--------------------------------- ---------- --------- ----------------- --------- -----------------
Financial assets Euro 500 557 132 EUR149
Financial liabilities Euro (216) (241) (145) EUR(163)
Net balance Euro 284 316 (13) EUR(14)
--------------------------------- ---------- --------- ----------------- --------- -----------------
Effect of 10% Sterling increase (26) 1
Effect of 10% Sterling decrease 32 (1)
--------------------------------------------- --------- ----------------- --------- -----------------
Financial assets USD 1,754 2,238 1,194 $1,612
Financial liabilities USD (888) (1,134) (397) $(536)
Net balance USD 866 1,104 797 $1,076
--------------------------------- ---------- --------- ----------------- --------- -----------------
Effect of 10% Sterling increase (79) (72)
Effect of 10% Sterling decrease 96 89
--------------------------------------------- --------- ----------------- --------- -----------------
Sensitivity shows the effect on equity and statement of
comprehensive income. A 10% change is shown to enable an objective
calculation to be made on exchange rates which may be assumed for
the future.
As at 31 December 2018 the Group had no outstanding forward
foreign currency contacts (2017: the Group had outstanding forward
contracts which all matured within 1 month of the year end and
committed the Group to selling US Dollars 530,000 and to receive a
fixed Sterling amount).
The forward currency contracts are measured at fair value, which
is determined using the valuation techniques that utilise
observable inputs. The key inputs used in valuing the derivatives
are the forward exchange rates for USD:GBP. The fair value of the
forward-foreign currency contracts at 31 December 2018 is GBPnil
(2017: profit GBP16,000).
Credit risk
The Group's exposure to credit risk is limited to the carrying
value of financial assets at the balance sheet date, summarised as
follows:
2018 2017
GBP'000 GBP'000
---------------------------- --------- ---------
Loans and receivables:
Trade receivables 1,978 739
Other debtors 38 53
Cash and cash equivalents 374 631
2,390 1,423
---------------------------- --------- ---------
The credit risk associated with the cash is limited as the
counterparties have high credit ratings assigned by international
credit-rating agencies. The principal credit risk arises therefore
from trade receivables. The seven largest customer balances at the
end of the year make up 58% (2017: 65%) of the above trade
receivables.
In order to manage credit risk the Directors set limits for
customers based on a combination of payment history, third party
credit references and use of credit insurance. These limits are
reviewed regularly. The maturity of overdue debts and details of
impairments and amounts written off are set out in note 14.
Capital requirements and management
Interest bearing loans and borrowings are monitored regularly to
ensure the Group has sufficient liquidity and its exposure to
interest rate risk is mitigated. Management consider the capital of
the Group comprises the share capital as detailed in note 16 and
interest bearing loans and borrowings as detailed in note 17. The
Company satisfies the Companies Act 2006 requirement to hold
GBP50,000 issued and authorised share capital. The rule that 25%
must be paid up is also satisfied, by reference to note 16.
The Group's capital management objectives are:
-- to ensure the Group's ability to continue as a going concern; and
-- to provide an adequate return to shareholders
The Group monitors capital on the basis of the gearing ratio
calculated as net debt divided by total capital. Net debt is
calculated as total borrowings as shown in the consolidated
statement of financial position less cash and cash equivalents.
Total capital is calculated as equity as shown in the consolidated
statement of financial position plus net debt.
The Group's goal in capital management is to maintain an optimal
gearing ratio (the ratio of net debt over debt plus equity).
The Group manages the capital structure and makes adjustments to
it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debt.
The gearing ratios at 31 December 2018 and 2017 were as
follows:
2018 2017
GBP'000 GBP'000
--------------------------- --------- ---------
Total borrowings 454 2
Cash and cash equivalents (374) (631)
--------------------------- --------- ---------
Net debt/(cash surplus) 80 (629)
--------------------------- --------- ---------
Total equity 1,999 1,583
Borrowings 80 -
--------------------------- --------- ---------
Overall financing 2,079 1,583
--------------------------- --------- ---------
Gearing ratio 4% 0%
--------------------------- --------- ---------
The gearing ratios are in line with the management's working
capital financing strategy.
23 Events after the reporting period
There have been no significant post balance sheet events.
24 Availability of report and accounts
The Company will advise when copies of the Annual Report and
Accounts will be sent to shareholders and be available from the
Company's website www.symphonyenviornmental.com
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
FR JIMRTMBTBBIL
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