5 Sep 2014 07:00
5 September 2014
Applied Graphene Materials plc
("Applied Graphene Materials", "the Group" or "the Company")
Pre-close update
Applied Graphene Materials plc, the producer of specialty graphene materials, is pleased to provide the following update prior to entering into its close period and ahead of the announcement of results for the year ended 31 July 2014.
The overall trading performance of the Group for the year has been broadly in line with the Directors' expectations with net cash of approximately £8.5 million at the year end date. Solid progress has been made operationally and in establishing new customer relationships.
Customer relationships
The Group has continued to benefit from the global profile that it has established and more generally from the growing awareness of the potential of graphene across a large number of sectors. The growth of the Group's business development team has meant that larger numbers of new enquiries are being generated and addressed. However, it remains the case that the Group continues to prioritise its core target market areas of polymers and composites, paints and coatings, and lubricants and oils.
The Group was pleased to receive recent notifications from Innovate UK (previously known as the Technology Strategy Board) that its funding applications for two graphene development projects have been successful. The first of these projects (with collaboration partner DuPont Teijin Films) is being led by Applied Graphene Materials and encompasses the use and dispersion of graphene within polyester films. The second of these projects (with collaboration partners PolyPhotonix and CPI) encompasses the development of graphene based transparent electrodes. These projects combined are worth approximately £0.3m with one third of this accruing to the Group over the expected twelve months term of both projects. The projects are indicative of the scale and global nature of the commercial partners, with whom the Group is working on other activities which are subject to confidentiality undertakings.
Since the announcement of the interim results, a significant number of new customer relationships have been established and this will continue, resulting in the ongoing supply of trial quantities of graphene dispersions. Further updates will be provided on customer engagements and sampling at the time of the full year results. As expected, for an industry at this early stage of development, the Group's operations continue to be focused on sampling rather than the supply of commercial quantities of graphene with the timescale to the achievement of the latter remaining difficult to predict.
Increased investment in infrastructure and expertise
During the second half of the year, the Group has spent a significant amount of time seeking to improve the consistency and quality of graphene produced, resulting in several design improvements to the Group's production assets. The improvements made have been successful, with benefits realised in consistency and quality, and customer sampling towards the end of the financial year.
The Group has also continued to put in place additional infrastructure to capitalise on the early stage momentum that the business has achieved and to enable the longer term potential of the business to be realised. Headcount has more than doubled and is anticipated to number 30 people by the time of the announcement of full year results with additional personnel having been added in our core target areas of operations, technical and business development. The Group has also invested elsewhere to support future growth, including the addition of a full time technical director. The effect of this investment is that costs for the years ending 2015 and 2016 will be higher than previously expected. The Directors remain confident that this investment in infrastructure will support the long term growth of the business.
Full year results
Applied Graphene Materials' full year results for the year ended 31 July 2014 are expected to be announced on Wednesday 5 November 2014. Further details will be confirmed nearer the time.
Ends
For further information, please contact:
Applied Graphene Materials +44 (0) 1642 438 214
Jon Mabbitt, Chief Executive Officer
Oliver Lightowlers, Chief Financial Officer
N+1 Singer +44 (0) 207 496 3000
Shaun Dobson / Richard Lindley
Hudson Sandler +44 (0) 207 796 4133
Charlie Jack / Emily Dillon
Notes to Editors
Applied Graphene Materials was founded by Professor Karl Coleman in 2010 with its operations and processes based on technology that he initially developed at Durham University. The Group was admitted to AIM in November 2013, raising £11 million, and is based at the Wilton Site on Teesside.
The Group has developed a proprietary bottom-up process for the production of high purity graphene nanoplatelets and owns the intellectual property and know-how behind this process. Applied Graphene Materials' process is based on sustainable, readily available raw materials and therefore does not rely on the supply of graphite, unlike a number of other graphene production techniques. It is capable of producing high purity graphene using a continuous process. Applied Graphene Materials provides dispersion and product integration expertise to deliver solutions for a wide range of applications.