(Alliance News) - Haydale Graphene Industries PLC on Wednesday said it has completed a GBP3.0 million equity raise and has a contract now in place with iCraft for its graphene nano-platelets.
Haydale completed a 68.4 million share placing and 16.6 million subscription, both priced at 3.5 pence per share. This raised GBP3.0 million, with funds to be used mostly as working capital to finance Haydale's operations.
Shares in Haydale were down 22% at 4.00 pence in London in late morning trading.
Chief Executive Keith Broadbent and Chief Financial Officer Mark Chapman each acquired 285,714 shares for a total of GBP10,000 each giving them total stakes in Haydale of 0.2% and 0.1% respectively.
Independent Non-Executive Director Theresa Walls acquired 428,571 shares for GBP15,000 and has a 0.1% stake as a result. Non-Executive Chair David Banks bought 857,142 shares for GBP30,000, increasing his total holding to a 0.7% stake.
Arden Partners PLC is Haydale's nominated adviser and broker.
The company had raised GBP5.6 million in March 2019 to fund restructuring costs and invest in its short-term commercial targets.
"Over the last 18 months Haydale has made significant progress in moving from a research and development focused organisation to one that the directors believe is on the threshold of making an impact on the diverse markets and industries that the company's technology can positively impact," the company said on Wednesday.
Steps taken included closing loss-making Taiwan and UK facilities and reducing its UK headcount to 50 from 75.
"The directors have delivered on the strategy set out in March 2019, although that delivery has taken longer than anticipated and has been impacted by the Covid-19 pandemic. Haydale has used that crisis to further reassess the focus and direction of the business and where some markets have diminished, they have moved rapidly to open and exploit other potential revenue sources. The crisis has been a catalyst for further change which will lay a strong foundation for the business as it moves into the next phase of its evolution," said Haydale.
Subject to audit, the firm expects revenue for its financial year ended June 2020 to be around GBP2.9 million, falling from GBP3.5 million the year before. Haydale said its directors were "disappointed with this result" but pleased that it should see a small improvement in gross profit compared to GBP1.9 million in financial 2019 with gross profit margins set to increase to around 70% from 55%.
Adjusted administrative expenses are expected to fall by approximately GBP900,000 on a like-for-like basis excluding IFRS impact from GBP6.9 million in financial 2019.
"The directors are pleased to report that despite the shortfall in revenue, the actions taken to bolster gross profit and to reduce operating costs both before and during the Covid-19 lockdown should result in a marked reduction in the loss from trading in the year," Haydale said.
Its cash at June end was GBP800,000 versus GBP4.7 million year-on-year. Operating cash outflow shrank to around GBP2.0 million from GBP4.6 million but was offset by an approximately GBP1.5 million increase in working capital from GBP200,000. Its working capital build-up, mostly in its US operation, is expected to unwind across the next 12 to 18 months.
Haydale said: "The board considers that the long-term outlook remains unchanged and believe that Haydale's proprietary technology and its capacity to functionalise nano and other materials and to significantly enhance the properties of host materials continues to deliver confidence in the prospects of the group.
"Whilst the business is well placed to benefit from a recovery in the aviation industry, given the uncertainty surrounding this sector it believes that it has put in place robust plans to grow the business whilst reducing reliance on any one particular product or sector."
Seperately, Haydale said it now has a contract with South Korean technology company iCraft, which has incorporated Haydale's graphene nano-platelets into a cosmetic face mask sheet. The contract is for one metric tonne of graphene nano-platelets in the first year, two in the second year, and three in the third. The agreement is exclusive for the mask application within the Asia-Pacific region, excluding Thailand.
Haydale has now signed a worldwide exclusivity contract to supply functionalised graphene nanoplatelets for use in these mask sheets. They are face-shaped sheet fabrics which use graphene's thermal and electrical conductivity to help the skin absorb the mask's contents.
Keith Broadbent, Haydale's chief executive, said: "We are pleased to see the contract with iCraft develop, with further materials being used in the health and beauty sector. Through this exclusivity contract, we expect to see these cosmetic face mask sheets commercialise globally."
By Anna Farley; annafarley@alliancenews.com
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Haydale (HAYD)