TIDMVRS
RNS Number : 5951W
Versarien PLC
12 December 2019
12 December 2019
Versarien plc
("Versarien", the "Company" or the "Group")
Interim Results for the six months ended 30 September 2019
Versarien plc (AIM: VRS), the advanced engineering materials
group, is pleased to announce its interim results for the six
months ended 30 September 2019, a period in which the Company made
further progress with its graphene commercialisation strategy.
Financial Highlights
-- Group revenues of GBP4.38 million (H1 2018: GBP5.22 million)
-- Adjusted LBITDA* of GBP0.90 million (H1 2018: GBP0.36 million)
-- Loss before tax of GBP2.12 million (H1 2018: GBP0.79 million)
-- Cash of GBP2.64 million at 30 September 2019 (30 September 2018: GBP6.07 million)
-- Net assets of GBP11.87 million (30 September 2018: GBP12.32 million)
*Adjusted LBITDA (Loss Before Interest, Tax, Depreciation and
Amortisation) excludes exceptional items and share-based payment
charges
Operational Highlights
-- First graphene company in the world to complete the US
Graphene Council's "Verified Graphene Producer" programme
-- Continued progress in international expansion, including
receiving the first graphene orders in the US and Japan
-- Large-scale industrial prototype to improve rail
transportation infrastructure, using Versarien's graphene enhanced
polymer technology showcased and successfully in test to date.
-- Successfully incorporated wholly foreign owned enterprise in
China (Beijing Versarien Technology Company Limited) with a
business license granted by the relevant Chinese authorities
-- Receipt of EU REACH approval to manufacture up to ten tonnes of graphene per annum
-- Significant improvement in financial performance compared to
H1 2018 for the Group's hard wear and metallic products
businesses
Post Period Highlights
-- Commercial partnership agreement signed with the Company's
textile sector collaboration partner, MAS Innovation (Private)
Limited, the first demonstration of Versarien's graphene
commercialisation strategy with a major global partner
-- Further global success with a collaboration agreement signed
with Refractory Solutions Insertec S.L.U. a Company headquartered
in Spain
-- Non-binding heads of terms signed with Jinan Bo Guan Building
Engineering Co., Ltd ("JBG") to form a manufacturing joint venture
located in Zhucheng City, Shangdong, providing further
opportunities in China in addition to the ongoing discussions and
progress with Beijing Institute of Graphene Technology Co. Ltd
("BIGT") and the China International Graphene Industry Union
("CIGIU")
-- Graphene incubation facility being established in Fangshan
with CIGIU/BIGT in line with AGM statement and contractual
negotiations continuing
Neill Ricketts, CEO of Versarien, commented:
"Over the period under review and subsequently, we have been
progressing our business both in the UK and globally. The focus
remains on our graphene commercialisation strategy and we are now
actively working on 40 mainstream projects with our commercial
partners, have a further 24 projects underway and active research
ongoing on another 17. We continue to focus on the projects most
likely to produce near-term significant revenue streams. These
include graphene-enhanced transportation arches, 3D printing of
concrete, aircraft interior parts, parts for down hole drilling in
the oil and gas sector and graphene enhanced textiles.
"The Company has scaled up its manufacturing capacity to be able
to produce three tonnes of graphene per annum and with the award of
Graphene REACH registration, we are now in a position to be able to
supply product as we near commercialisation. The large-scale
industrial prototype arch showcased clearly demonstrates the
significant benefits graphene technology can bring. We are also
looking at opportunities to secure long term supply agreements with
high quality graphite mines.
"Discussions with the Beijing Institute of Graphene Technology
Co. Ltd and the China International Graphene Industry Union are
still ongoing, aided by having been granted a business license for
our Wholly Foreign Owned Enterprise ("WFOE") in China. In line with
the AGM statement, we have collaborated with CIGIU/BIGT and have
registered the WFOE at the recently publicised Beijing Graphene
Industry Innovation Centre Seed Incubation Park. We continue to
maintain our primary position which is to ensure, so far as
reasonably possible, that we protect our IP and therefore continue
to assess other opportunities for factory location which are put to
us in addition to any that may be proposed under the BIGT/CIGIU
process.
"We have also signed a non-binding term sheet with the intention
of setting up manufacturing in Shangdong. under a joint venture
between Versarien and Jinan Bo Guan Building Engineering Co., Ltd
with controlling ownership residing with Versarien. JBG would,
together with associates, be responsible for the construction of a
graphene valley park over a three-year period and JBG have
expressed an interest in taking a strategic investment stake in
Versarien as part of any transaction. Legally binding contracts
have yet to be signed and updates on progress will be made in due
course.
"As well as progressing our technology base it is pleasing to
note that our hard wear and metallic products business has shown a
significant increase in profitability on stable sales following the
efficiency improvements that were implemented in the last financial
year.
"We continue to use the cash received from our placing last year
to develop application IP through our collaborations, to expand
into Europe, the USA, China and South Korea as well as to develop
new products such as Biogrene. Together with our accreditation as a
verified graphene producer we are confident for the future ahead
and look forward to reporting further success over the coming
months."
For further information please contact:
Versarien plc
Neill Ricketts - Chief Executive Officer +44 (0) 1242 269122
Chris Leigh - Chief Financial Officer
Canaccord Genuity Group Inc (Nominated
Adviser and Joint Broker)
Bobbie Hilliam / Emma Gabriel +44 (0) 20 7523 8000
Berenberg (Joint Broker)
Mark Whitmore
Simon Cardron +44 (0) 20 3207 7800
IFC Advisory (Financial PR and IR) www.investor-focus.co.uk
Tim Metcalfe / Graham Herring / Florence
Chandler +44 (0) 20 3934 6630
Notes to Editors:
About Versarien
Versarien plc (AIM: VRS), is an advanced engineering materials
group. Leveraging proprietary technology, the Group creates
innovative engineering solutions for its clients in a diverse range
of industries. Versarien has seven subsidiaries operating under two
divisions:
Graphene and Plastics
2-DTech Ltd, which specialises in the supply, characterisation
and early stage development of graphene products.
www.2-dtech.com
AAC Cyroma Limited, which specialises in the supply of
vacuum-formed and injection-moulded products to the automotive,
construction, utilities and retail industry sectors. Using
Versarien's existing graphene manufacturing capabilities, AAC will
have the ability to produce graphene-enhanced plastic products.
www.aaccyroma.co.uk
Cambridge Graphene Limited, supplies novel inks based on
graphene and related materials, using patented processes to develop
graphene materials technology.
www.cambridgegraphene.com
Gnanomat S.L. ("GNA"), based in the Parque Cientifico Madrid,
Spain, is a company capable of utilising Versarien's graphene
products in an environmentally friendly, scalable production
process for energy storage devices that offer high power density,
fast recharging and very long lifetimes for use in electrical
vehicles and portable electronics products. www.gnanomat.com
Versarien Graphene Inc - based in Texas, is the newly
incorporated sales business for the UK's graphene products.
Hard Wear and Metallic Products
Versarien Technologies Limited has developed an additive process
for creating advanced micro-porous metals targeting the thermal
management industry and supplies extruded aluminium.
www.versarien-technologies.co.uk
Total Carbide Limited, a leading manufacturer in sintered
tungsten carbide for applications in arduous environments such as
the oil and gas industry. www.totalcarbide.com
Chief Executive's Statement
Our graphene technology continues to gain significant interest
both in the UK and abroad, and for some of our collaborations, we
are reaching the end of the testing cycle. Our graphene products
are also being tested and developed in new products with existing
collaborators, as well as gaining momentum in incorporating
graphene into energy storage devices following a full year of
Gnanomat S.L being part of the Group.
Our discussions with the Beijing Institute of Graphene
Technology Co. Ltd (BIGT) and the China International Graphene
Industry Union ("CIGIU") are still ongoing, aided by having been
granted a business license for our WFOE in China. In line with the
AGM statement, we have collaborated with CIGIU/BIGT and have
registered the WFOE at the recently publicised Beijing Graphene
Industry Innovation Centre Seed Incubation Park. We continue to
maintain our primary position which is to ensure, so far as
reasonably possible, that we protect our IP and therefore continue
to assess other opportunities for factory location which are put to
us in addition to any that may be proposed under the BIGT/CIGIU
process.
In addition, we have also signed a non-binding term sheet with
the intention of setting up manufacturing in Shangdong under a
joint venture between Versarien and Jinan Bo Guan Building
Engineering Co., Ltd with controlling ownership residing with
Versarien. JBG would, together with associates, be responsible for
the construction of a graphene valley park over a three-year period
and JBG have expressed an interest in taking a strategic investment
stake in Versarien as part of any transaction. Legally binding
contracts have yet to be signed and updates on progress will be
made in due course.
Whilst progress in China has been slower than we initially
anticipated, we are pleased that we have a number of options and
any delays have been more than offset by progress elsewhere.
Furthermore, I am pleased to report our more mature businesses
have returned improved financial performance.
Graphene and Plastic Products
We are pleased to provide an update on our graphene and other 2D
materials collaborations:
Start date Description Current status
Oct 17 Collaboration with Israel Aerospace The project, which is long-term,
Industries forms part of continuing
development work in CFRP
composites with GEIC and
WMG. There are multiple phases
of work to be carried out
with different 2D materials
and other additives.
----------- ------------------------------------
Nov 17 Collaboration with global consumer Following initial blow moulding
goods company test results, the project
was subject to some delay
due to customer R&D moving
from Europe to the UK. The
parties are now engaged in
commercial discussions to
evaluate cost-benefit value.
----------- ------------------------------------
Dec 17 Agreement with global chemical Following positive test results
major the collaborator is providing
funding for a wider study
into barrier development.
Further discussions have
also taken place for wider
collaboration on other products,
including bottles and recycling
streams.
----------- ------------------------------------
Jan 18 Agreement with global apparel Following the announcement
manufacturer, MAS Innovation of the Letter of Intent in
(Private) Limited July 2019, the companies
have now signed a Commercial
Partner Agreement. The agreement
allows for the parties to
secure additional commercial
deals from a number of third
parties, who have expressed
interest following trials.
The companies have developed
several different prototype
garments using the company's
Graphinks material. Development
work has now commenced on
infused yarns with graphene.
----------- ------------------------------------
Feb 18 Agreement with shoemaker, Vivobarefoot Production relocation caused
temporary delay to the project.
Since, positive progress
is being made with initial
formulations created and
successfully tested. Scale-up
formulations are being trialled,
which offer the opportunity
for the company to create
a complete material solution.
Further project work on textiles
and leathers has now commenced
in conjunction with additional
parties.
----------- ------------------------------------
Feb 18 Medical technology collaboration Following 18 months of initial
at Addenbrooke's hospital trials, the companies are
now in negotiations for the
commercialising of new products
in the wound dressing sector.
----------- ------------------------------------
Mar 18 Collaboration with Team Ineos Project held up due to change
(formerly Team Sky) for cycling of sponsor. The parties are
equipment currently discussing new
projects, with textile development
part of the discussion.
----------- ------------------------------------
Mar 18 Collaboration with world-leading This longer-term project
aerospace group features work on specific
parts and continues with
WMG and other parties.
----------- ------------------------------------
Apr 18 Agreement with Luxus Active supply chain partner,
who is working with us on
various projects.
----------- ------------------------------------
May 18 Consumer goods collaboration Further phases of tests are
for polymer structures in plastics now on-going, which features
new product design and use
different bio-polymers.
----------- ------------------------------------
Jun 18 Commercial agreement with MediaDevil Due to demand from customers,
we are working on new phone
cases which feature graphene
in bio-polymers trademarked
as "Biogrene". New batches
of materials are currently
being compounded and will
be sent to production factories
shortly.
----------- ------------------------------------
Jun 18 Agreement with Arrow Greentech The parties are negotiating
a joint development agreement
for the development and marketing
of the water-soluble films.
The companies continue to
test a number of other products
for the securities sector.
----------- ------------------------------------
Jul 18 Collaboration with ZapGo Limited Progress continues to be
made on testing, with the
companies now moving on to
fourth phase testing.
----------- ------------------------------------
Aug 18 Sporting goods collaboration New Polygrene blend being
formulated for trial at customer
factory. In addition, the
companies are collaborating
on other shoe development
and garments.
----------- ------------------------------------
Aug 18 Collaboration with Axia Materials, The project, which involved
South Korea a consortium of companies
has been postponed as a result
of consortium funding difficulties
----------- ------------------------------------
Aug 18 Construction materials collaboration Following the launch of the
with AECOM AECOM CNCT Arch at Network
Rail facility in Bristol,
the product has been subject
to further tests, with positive
test data reported to date.
----------- ------------------------------------
Oct 18 Collaboration with Advanced Testing at customer facilities
Insulation is ongoing.
----------- ------------------------------------
Dec 18 Collaboration with Chinese Aerospace This longer-term project,
Company which is focused on several
materials for different parts
continues at an R&D level.
----------- ------------------------------------
Dec 18 MOU China Railway The project, which involves
GEIC and other civil engineering
parties, continues to progress
well. The testing features
trials with various grades
of construction materials
for different construction
applications.
----------- ------------------------------------
Dec 18 LOI/MOU Tungshu Optoelectronics The multiple projects identified
progress at different levels
due to longer-term and medium
terms needs. Testing on inks
show highly useful properties
for new generation household
heating applications.
----------- ------------------------------------
March 19 Further collaboration with Chinese The parties continue to progress
Aerospace Company through the work plan created.
----------- ------------------------------------
May 19 Collaboration agreement with Tests on sample materials
BP Polymers continue at an R&D level.
----------- ------------------------------------
Oct 19 Refractory Materials Collaboration New project with work plans
being developed between the
parties.
----------- ------------------------------------
We are excited with the progress of our collaborations during
and after the period and for those coming to the end of their
testing phase. The next stage is to negotiate commercial supply
agreements and we are having a number of discussions to achieve
this goal. With our increased graphene production capacity, and
with our REACH registration in place, we are well positioned to
fulfil orders when those agreements progress into orders.
As announced in July 2019 our first Japanese order is
progressing well, with ongoing R&D work being conducted at the
customer's R&D facility in the US, with the company giving
on-going support. Similarly, our US oil & gas customer, whose
first order was announced in June 2019, is showing continued
advancement. The masterbatch materials were subject to new tests at
a scaled-up level, with satisfactory results achieved. Additional
development work is underway and further commercial discussions are
anticipated in Q1 2020.
Gnanomat continues to develop its energy storage technology and
a Spanish patent for it was granted in April 2019 with formal
collaboration agreements with potential partners in discussion. Its
funding comes, in the main, from Versarien's resources, but it has
also been successful in obtaining a grant from the Spanish Ministry
of Science and is applying for further grants from the newly formed
European Battery Alliance, as well as from other EU sources.
Our plastic products business performed satisfactorily in the
period, still generating profits despite a fall in revenue from H1
2018 due, in large part, by challenging market conditions caused by
the uncertainty of the current economic climate. Our intention
remains to incorporate graphene into our injection-moulded
plastics, and we have a number of trials and tests at customer
sites and test facilities.
Metallic Products and Hard Wear products
This business segment has reported slightly increased revenue
and significantly increased its profitability during the period,
compared to H1 2018, following the implementation of efficiency
improvements detailed in the results for the year ended 31 March
2019.
Significantly, Total Carbide has signed up to the national
SPRINT business innovation programme, which provides funded access
to space-related expertise and facilities at The Open University.
The project will enable them to reduce the weight and increase the
strength of its throat nozzles for rocket and space propulsion
systems by adding our product Hexotene into a heat resistant
ceramic.
Current trading and outlook
Having access to the funds raised last year has enabled us to
make significant progress across our Group companies. Our focus
remains on the commercialisation of our graphene and other 2D
materials by progressing our strategies for growth simultaneously
in various end-user sectors. This has enabled us to make
significant steps towards commercialisation of our products.
With the large-scale AECOM prototype having been showcased, it
demonstrates the real and near-term possibilities of graphene, and
with our position as the first company in the world to receive
accreditation for graphene, coupled with the REACH registration, we
are in the best possible position to be a major part of the
imminent "Graphene Revolution".
Neill Ricketts
Chief Executive Officer
12 December 2019
Chief Financial Officer's review
Group Results
Versarien's revenue for the half-year ended 30 September 2019
was GBP4.38 million (H1 2018: GBP5.22 million).
The operating loss before exceptional items, depreciation,
amortisation and share based payment charges was GBP0.90 million
(H1 2018: GBP0.36 million), and includes 6 months of costs
associated with Gnanomat S.L., acquired in October 2018, and
Versarien Graphene Inc, our Texas based company incorporated in
March 2019.
Exceptional costs were incurred in the period of GBP0.33
million, which mostly relate to the costs incurred for expansion
into China and the US. The loss before tax for the period was
GBP2.12 million (H1 2018: loss GBP0.79 million).
Group net assets at 30 September 2019 were GBP11.87 million (31
March 2019 GBP13.28 million), with cash at the period end of
GBP2.64 million (31 March 2019: GBP4.29 million). Cash outflow from
operating activities was GBP1.09 million (H1 2018: GBP0.82
million). The Group capitalised GBP0.17 million (H1 2018: GBP0.16
million) principally in development costs and GBP0.13 million (H1
2018: GBP0.11 million) in new plant and equipment.
Graphene and Plastic Products
This segment generated revenue, predominantly from the plastics
business, of GBP1.85 million (H1 2018: GBP2.79 million), returning
an LBITDA before exceptional items, (which included costs
associated with the two new subsidiaries for the period, Gnanomat
S.L. and Versarien Graphene Inc), of GBP0.96 million (H1 2018: loss
GBP0.28 million). The segment capitalised development costs of
GBP0.15 million (H1 2018: GBP0.13 million) as work continued on
developing specific applications using graphene. Cash used by the
business segment was GBP1.60 million, of which GBP0.12 million was
used to acquire new assets.
Hard Wear and Metallic Products
Revenue for the period remained steady at GBP2.52 million (H1
2018: GBP2.43 million), but increased operational efficiencies
resulted in a 56% increase in EBITDA before exceptional items to
GBP0.39 million (H1 2018: GBP0.25 million). The segment generated
GBP0.23 million in cash in the period, compared to GBP0.1 million
consumption in H1 2018, which demonstrates the operational
improvements which have been made. This business segment has
provided a valuable contribution to the Group's performance.
Chris Leigh
Chief Financial Officer
12 December 2019
Group statement of comprehensive income
For the half year ended 30 September 2019
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------------- ----- ------------- ------------- ---------
Continuing operations
Revenue 2 4,376 5,215 9,140
Cost of sales (3,157) (3,772) (6,706)
-------------------------------------------------- ----- ------------- ------------- ---------
Gross profit 1,219 1,443 2,434
Other operating income 3 2 148
Operating expenses (including exceptional items) (3,311) (2,210) (5,345)
-------------------------------------------------- ----- ------------- ------------- ---------
Loss from operations before exceptional items (1,762) (693) (2,343)
Exceptional items 3 (327) (72) (420)
-------------------------------------------------- ----- ------------- ------------- ---------
Loss from operations (2,089) (765) (2,763)
Finance charge (32) (23) (66)
-------------------------------------------------- ----- ------------- ------------- ---------
Loss before income tax (2,121) (788) (2,829)
Income tax - 56 117
-------------------------------------------------- ----- ------------- ------------- ---------
Loss for the period (2,121) (732) (2,712)
-------------------------------------------------- ----- ------------- ------------- ---------
Loss attributable to:
- Owners of the parent company (1,862) (659) (2,473)
- Non-controlling interest (259) (73) (239)
-------------------------------------------------- ----- ------------- ------------- ---------
(2,121) (732) (2,712)
-------------------------------------------------- ----- ------------- ------------- ---------
Loss per share attributable to the equity holders
of the Company:
Basic and diluted loss per share 4 (1.21)p (0.44)p (1.64)p
-------------------------------------------------- ----- ------------- ------------- ---------
There were no comprehensive gains or losses in the year other
than those included in the Group Statement of Comprehensive
Income.
Group statement of financial position
As at 30 September 2019
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
-------------------------------------------- ---- ------------ ------------ --------
Assets
Non-current assets
Intangible Assets 5 5,447 2,812 5,318
Property, plant and equipment 3,068 2,887 3,170
Deferred taxation 25 25 25
-------------------------------------------- ---- ------------ ------------ --------
8,540 5,724 8,513
-------------------------------------------- ---- ------------ ------------ --------
Current assets
Inventory 2,260 2,128 2,253
Trade and other receivables 2,036 2,400 2,141
Current tax 86 52 106
Cash and cash equivalents 2,640 6,073 4,292
-------------------------------------------- ---- ------------ ------------ --------
7,022 10,653 8,792
-------------------------------------------- ---- ------------ ------------ --------
Total assets 15,562 16,377 17,305
-------------------------------------------- ---- ------------ ------------ --------
Equity
Called up share capital 1,539 1,522 1,536
Share premium 19,896 17,453 19,776
Merger reserve 1,256 1,256 1,256
Share-based payment reserve 1,495 295 899
Accumulated losses (11,560) (7,884) (9,698)
-------------------------------------------- ---- ------------ ------------ --------
Equity attributable to owners of the parent
company 12,626 12,642 13,769
Non-controlling interest (752) (327) (493)
-------------------------------------------- ---- ------------ ------------ --------
Total equity 11,874 12,315 13,276
-------------------------------------------- ---- ------------ ------------ --------
Liabilities
Non-current liabilities
-------------------------------------------- ---- ------------ ------------ --------
Trade and other payables 400 238 328
Deferred taxation 66 64 69
Long-term borrowings 557 495 708
-------------------------------------------- ---- ------------ ------------ --------
1,023 797 1,105
-------------------------------------------- ---- ------------ ------------ --------
Current liabilities
Trade and other payables 1,491 1,510 1,528
Invoice discounting advances 416 1,064 603
Current tax 243 212 257
Provisions 174 80 174
Current portion of long-term borrowings 341 399 362
-------------------------------------------- ---- ------------ ------------ --------
2,665 3,265 2,924
-------------------------------------------- ---- ------------ ------------ --------
Total liabilities 3,688 4,062 4,029
-------------------------------------------- ---- ------------ ------------ --------
Total equity and liabilities 15,562 16,377 17,305
-------------------------------------------- ---- ------------ ------------ --------
Group statement of changes in equity
For the half year ended 30 September 2019
Share Share-based Non-
Share premium Merger payment Accumulated controlling Total
capital account reserve reserve losses interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- --------------- ----------- ----------- ------------ --------
At 1 April 2018 (audited) 1,486 12,529 1,256 187 (7,225) (254) 7,979
Issue of shares, net of issue
costs 36 4,924 - - - - 4,960
Loss for the period - - - - (659) (73) (732)
Share-based charge - - - 108 - - 108
------------------------------- -------- -------- --------------- ----------- ----------- ------------ --------
At 30 September 2018
(unaudited) 1,522 17,453 1,256 295 (7,884) (327) 12,315
Issue of shares 14 2,323 - - - - 2,337
Loss for the period - - - - (1,814) (166) (1,980)
Share-based payments - - - 604 - - 604
------------------------------- -------- -------- --------------- ----------- ----------- ------------ --------
At 1 April 2019 (audited) 1,536 19,776 1,256 899 (9,698) (493) 13,276
Issue of shares, net of issue
costs 3 120 - - - - 123
Loss for the period - - - - (1,862) (259) (2,121)
Share-based payments - - - 596 - - 596
------------------------------- -------- -------- --------------- ----------- ----------- ------------ --------
At 30 September 2019
(unaudited) 1,539 19,896 1,256 1,495 (11,560) (752) 11,874
------------------------------- -------- -------- --------------- ----------- ----------- ------------ --------
Included within the merger reserve is GBP53,000 in respect of
the merger with Versarien Technologies Limited and GBP964,000 in
respect of the acquisition of Total Carbide Limited and GBP239,000
in respect of the acquisition of AAC Cyroma Limited.
Statement of Group cash flows
For the half year ended 30 September 2019
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------------- ------------- ------------- ---------
Cash flows from operating activities
Cash used in operations (1,093) (820) (1,737)
Interest paid (32) (23) (66)
Net cash used in operating activities (1,125) (843) (1,803)
------------------------------------------------- ------------- ------------- ---------
Cash flows from investing activities
Acquisition of subsidiaries - - (673)
Purchase of intangible assets (165) (159) (434)
Purchase of property, plant and equipment (126) (108) (541)
------------------------------------------------- ------------- ------------- ---------
Net cash used in investing activities (291) (267) (1,648)
------------------------------------------------- ------------- ------------- ---------
Cash flows from financing activities
Share issue 123 5,154 5,155
Share issue costs - (194) (200)
Finance leases net of repayments (172) (20) 156
Invoice discounting advances (187) (53) (514)
------------------------------------------------- ------------- ------------- ---------
Net cash generated from financing activities (236) 4,887 4,597
------------------------------------------------- ------------- ------------- ---------
Increase/(decrease) in cash and cash equivalents (1,652) 3,777 1,146
Cash acquired on acquisition of subsidiary - - 850
Cash and cash equivalents at start of period 4,292 2,296 2,296
------------------------------------------------- ------------- ------------- ---------
Cash and cash equivalents at end of period 2,640 6,073 4,292
------------------------------------------------- ------------- ------------- ---------
Note to the statement of Group cash flows
For the half year ended 30 September 2019
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------------------ ------------- ------------- ---------
Loss before income tax (2,121) (788) (2,829)
Adjustments for:
Share-based payments 596 108 712
Depreciation and amortisation 264 226 497
Disposal of non-current assets - - 8
Finance cost 32 23 66
R&D tax credit repayment - 56 117
Increase in inventories (7) (167) (292)
Decrease in trade and other receivables 125 62 424
Increase/(decrease) in trade and other payables 18 (340) (440)
------------------------------------------------ ------------- ------------- ---------
Cash used in operations (1,093) (820) (1,737)
------------------------------------------------ ------------- ------------- ---------
Notes to the unaudited interim statements
For the half year ended 30 September 2019
1. Basis of preparation
Versarien plc is an AIM quoted company incorporated and
domiciled in the United Kingdom under the Companies Act 2006. The
Company's registered office and its principal place of business is
2 Chosen View Road, Cheltenham, Gloucestershire, GL51 9LT.
The interim financial statements were prepared by the Directors
and approved for issue 12 December 2019. These interim financial
statements do not comprise statutory accounts within the meaning of
section 434 of the Companies Act 2006. Statutory accounts for the
year ended 31 March 2019 were approved by the Board of Directors on
19 August 2019 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified and did
not contain statements under sections 498 (2) or (3) of the
Companies Act 2006.
As permitted, these interim financial statements have been
prepared in accordance with UK AIM Rules and IAS 34, "Interim
Financial Reporting" as adopted by the European Union. They should
be read in conjunction with the annual financial statements for the
year ended 31 March 2019, which have been prepared in accordance
with IFRS as adopted by the European Union. The accounting policies
applied are consistent with those of the annual financial
statements for the year ended 31 March 2019, as described in those
annual financial statements. Where new standards or amendments to
existing standards have become effective during the year, there has
been no material impact on the net assets or results of the
Group.
These interim financial statements have been prepared on a going
concern basis using similar assumptions to those made in the
statutory accounts to 31 March 2019.
Certain statements within this report are forward looking. The
expectations reflected in these statements are considered
reasonable. However, no assurance can be given that they are
correct. As these statements involve risks and uncertainties the
actual results may differ materially from those expressed or
implied by these statements.
The interim financial statements have not been audited.
2. Segmental information
Metallic
Graphene and Hard
and Plastic Wear Intra-group
Central Products Products Adjustments TOTAL
---------- -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ------------- ---------- -------------
Six months to 30 September
2019
Sales - 1,854 2,522 - 4,376
Gross Margin - 389 830 - 1,219
Other operating income - - 3 - 3
Operating expenses (964) (1,480) (547) 7 (2,984)
Exceptional items (23) (286) (18) - (327)
(Loss)/ profit from
operations (987) (1,377) 268 7 (2,089)
Finance income/(charge) 1 (23) (10) - (32)
-------- ---------- ------------- --------
(Loss)/profit before
tax (986) (1,400) 258 7 (2,121)
------------- ---------- ------------- --------
2. Segmental information
(continued)
------------------------------------------------------------
Metallic
Graphene and Hard
and Plastic Wear Intra-group
Central Products Products Adjustments TOTAL
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months to 30 September
2018
Sales - 2,790 2,425 - 5,215
Gross Margin - 707 736 - 1,443
Other operating income - - 2 - 2
Operating expenses (436) (1,082) (594) (26) (2,138)
Exceptional items (72) - - - (72)
(Loss)/profit from
operations (508) (375) 144 (26) (765)
Finance income/(charge) - (9) (14) - (23)
-------- ------------- ---------- ------------- --------
(Loss)/ profit before
tax (508) (384) 130 (26) (788)
------------- ---------- ------------- --------
3. Exceptional items
Six months Six months
ended ended Year ended
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------------- ------------- ------------- ----------
Acquisition costs - 61 29
Relocation and restructuring costs 17 - 59
Costs relating to expansion in China 220 - 271
Costs relating to setting up of the
US subsidiary 67 - 28
Other 23 11 33
------------------------------------- ------------- ------------- ----------
327 72 420
------------------------------------- ------------- ------------- ----------
4. Loss per share
The loss per share has been calculated by dividing the loss
after taxation of GBP1,862,000 (2018: GBP659,000) by the weighted
average number of shares in issue of 153,894,000 (2018: 148,859,000
during the period.
The calculation of the 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. However,
in accordance with IAS33 "Earnings per Share", potential Ordinary
shares are only considered dilutive when their conversion would
decrease the profit per share or increase the loss per share. As at
30 September 2019 there were 14,677,130 (2018: 14,090,422)
potential Ordinary shares that have been disregarded in the
calculation of diluted earnings per share as they were considered
non-dilutive at that date.
5. Intangible assets
30 September 30 September 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ --------
Goodwill 4,431 2,167 4,431
Customer relationships/order books 68 87 81
Development costs 740 390 600
Licence 45 29 48
Intellectual property 163 139 158
----------------------------------- ------------ ------------ --------
Total 5,447 2,812 5,318
----------------------------------- ------------ ------------ --------
6. Dividends
As stated in the 2013 AIM Admission document the Board's
objective is to continue to grow the Group's business and it is
expected that any surplus cash resources will, in the short to
medium term, be re-invested into the research and development of
the Group's products. In view of this, no dividend is declared and
the Directors will not be recommending a dividend for the
foreseeable future. However, the Board intends that the Company
will recommend or declare dividends at some future date once they
consider it commercially prudent for the Company to do so, bearing
in mind its financial position and the capital resources required
for its development.
7. Interim Report
This interim announcement is available on the Group's website at
www.versarien.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
IR GGGGGPUPBPWG
(END) Dow Jones Newswires
December 12, 2019 02:01 ET (07:01 GMT)
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