Sabien Tech. Regulatory News (SNT)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

7 July 2022

Sabien Technology Group plc

("Sabien", the "Company", or the "Group")

Trading Update

Sabien Technology Group plc (AIM:SNT), the company focused on a green aggregation strategy, announces today a trading update ahead of the publication of its final results for the year ended 30 June 2022.

During the year ended 30 June 2022, Sabien's Green Aggregation Strategy has focussed on three principal technology-led initiatives. M2G, the existing Sabien CO2 mitigation device for commercial boilers, the UK rollout of Proton's oil to hydrogen technology, and the COF plastic to oil technology. 

M2G Business

Despite the world semiconductor supply shortage and its impact on the completion of sales during the second half of the 2022 financial year, the Board is very pleased with the growth of the new M2G Cloud business.

During the 2022 financial year, 293 M2G Cloud Solutions were sold (2021: nil) of which 262 (89.4% of the annual total) occurred in the second half of the year. In addition, the Company has deferred revenue of £175k, and open orders of £91k, that will carry over into FY23 as well as £23k of recurring revenue from the M2G Cloud Solutions sold to date to be recognised in FY23. In total, M2G has 2023 revenue identified and charged, but not yet booked, of £289k (July 2021 forward revenue: £43k)

The Board is encouraged that despite the supply chain problems affecting many companies, it has secured revenue which, had it fallen in the year to June 2022 would have resulted in a stable performance year-on-year. It is encouraged, further, that the momentum of revenue is growing through the first half of the Company's financial year to June 2023.

Proton UK Business

Discussions are ongoing with multiple UK oil field owners to identify suitable sites on which to deploy the Proton Technologies Canada Inc. ("Proton") proprietary hydrogen capture technology. In the long term, owners are motivated to develop such hydrogen production facility on their near to end of life fields. The Board believes that this motivation is secular and is likely to grow as the global fuel portfolio adapts to the clear trends in hydrocarbon demand. In the short term, reflecting the current high level of oil prices in the market, field owners have focussed on maximising short term oil production. This has not impacted the momentum behind discussions adversely. The Proton project continues to hold strong prospects for the Group.

COF / b.grn Business

During the financial year to 30 June 2022, the City Oil Field Inc. ("COF") business has been developed in combination with Sabien's development partner b.grn Group Ltd ("b.grn"). Key milestones have been reached including the establishment of a range of partner relationships with funding partners and professional advisors. The latter includes development managers, ESG advisors, and real estate advisors. In consultation with advisers, b.grn has assessed a range of potential sites in England and Wales for the first European COF installation. As previously announced, exclusivity was agreed on a site near Northampton; discussions were held in relation to a site on the Humber Estuary; and most recently an indicative bid was submitted to acquire the ex-Anglesey Aluminium in Anglesey, supported by b.grn funding partners, from the site's administrators. 

Through this work, the Board has developed a strong understanding of the emerging real estate market in key locations in the UK. Within this, the Company and b.grn have developed an advanced assessment of the most efficient sites for the deployment of COF. From this emerging knowledge, the Company and b.grn are now considering actively a number of sites in the UK, and beyond, where b.grn could deploy COF without, necessarily, acquiring the underlying real estate. Investigations into potential sites continue with b.grn's partners. It is likely that the first active deployment will be an initial 24t per day plastic to oil proof of concept plant. 

As a result, the Northampton site's exclusivity has been allowed to lapse. b.grn is not pursuing actively the Humber Estuary site which would have required considerable capital and time investment to make it ready for deployment. Finally, it is b.grn's understanding that it is not one of the leading bidders for the Anglesey Aluminium site on the basis of prices indicated. b.grn awaits any further developments in relation to this site. 

Discussions continue in relation to the Group's option to install a COF site in Saskatchewan on Proton's site. This site has the potential to produce additional benefits in relation to options for the use of offtake oil.

During the year, Sabien charged management fees of £0.15m to b.grn (2021: nil).

Consolidated trading update

The Group's full year consolidated 2022 revenue of £0.83m compares to £0.97m for 2021, a reduction of less than 15%. Sabien has generated consolidated revenue of £0.71m in the second six months of the year under review. This is an increase of 25% on the £0.56m recorded in the same period of 2021. Sabien is also carrying combined revenue of £0.29m into 2023, circa 30% of the total reported in the year to June 2021. A significant component of this carry forward is retained income, giving the Board confidence in the forward visibility of revenue.

As at the balance sheet date, 30 June 2022, Sabien had cash in hand of £0.55m (2021: £1.40m).

Commenting on the 2022 financial year, Richard Parris, Chairman of Sabien, stated:

"During the year under review, despite a challenging supply chain environment, the Company has achieved a solid result for the M2G business once supply chain timing issues are resolved, in addition much development of the COF/b.grn business has been achieved and a fundable business model developed. The Board looks forward to the coming year with considerable confidence.

It is important to remember that the year on which the Board is reporting encompasses two very different trading periods. It is clear to the Board that momentum has accelerated and is building still, notably within M2G and Proton. While COF's development remains more nascent, the Board's knowledge of the available market and the requirements to address it successfully are now well advanced. Sabien enters the year to June 2023 with a confidence backed by results and experience."