George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksVersarien Regulatory News (VRS)

Share Price Information for Versarien (VRS)

London Stock Exchange
Share Price is delayed by 15 minutes
Get Live Data
Share Price: 0.115
Bid: 0.1105
Ask: 0.12
Change: -0.0115 (-9.09%)
Spread: 0.0095 (8.597%)
Open: 0.1225
High: 0.1225
Low: 0.1105
Prev. Close: 0.1265
VRS Live PriceLast checked at -

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

Preliminary Results

11 Aug 2020 07:00

RNS Number : 7139V
Versarien PLC
11 August 2020
 

11 August 2020

 

Versarien Plc

 

("Versarien" or the "Company" or the "Group")

 

Preliminary Results for the year ended 31 March 2020

 

Versarien Plc (AIM:VRS), the advanced engineering materials group, is pleased to announce its unaudited results for the year ended 31 March 2020.

 

Operational highlights

 

· Commercial Partnership Agreement with the Company's textile sector collaboration partner, MAS Innovation (Private) Limited, to develop new garments utilising Versarien's graphene ink materials

 

· Awarded €350,000 grant to participate in the Graphene Flagship project, led by Airbus to develop graphene based thermo-electric ice protection systems to prevent icing on aircraft surfaces

 

· Partnership with Rolls Royce and the University of Manchester's Graphene Engineering Innovation Centre ("GEIC") using chemical vapour deposition ("CVD") in wiring for next generation aerospace engine systems

 

· Grant of £104,000 from the Advanced Propulsion Centre for the development of low-carbon technologies to significantly reduce vehicle emissions

 

Financial highlights

 

· Group revenues of £8.3million (2019: £9.1 million)

 

· Adjusted LBITDA* of £0.6 million (2019: £1.1 million)**

 

· Loss before tax of £4.7 million (2019: £2.8 million) after share based payments charge in the year of £1.2 million (2019: £0.7 million)

 

· Cash at 31 March 2020 of £1.7 million (2019: £4.3 million)

 

· Successful fundraising of £6 million gross in March 2020 re-invested into the 24-month sharing agreement with Lanstead Capital Investors LP ("Lanstead"),a US headquartered institutional investor, with a currently assessed fair value of £7 million

 

· Net assets of £15.7 million (2019: £13.3 million)

 

* Adjusted LBITDA (Loss before interest, tax, depreciation and amortisation) excludes exceptional items and share based payment charges ** IFRS 16,leases, was adopted on 1 April 2019 using the modified retrospective approach and comparatives are therefore not restated under this method. The impact of this adoption has resulted in a reduction in LBITDA of £0.7 million in 2020

 

Post Period highlights

 

· Product development agreement signed with J&P Coats Limited, part of Coats Group plc, to incorporate graphene nano-platelets and graphene inks into consumer textiles

 

· £5 million Innovate UK loan awarded in June 2020, with security arrangements completed, for scale up and product development related to the GSCALE collaborations

 

· Graphene Enhanced Protective Face Masks launched with first orders received for 120,000 masks.

 

Commenting, Neill Ricketts, Chief Executive Officer of Versarien, said: 

 

"Recent times have been dominated by the challenges that the Covid-19 pandemic have presented on a global basis. However, I am pleased to report Versarien has continued to operate throughout and achieved much during lockdown.

 

"I am particularly grateful for the support of the UK Government both in its provision of a £5 million loan via Innovate UK to allow us the opportunity to scale up and to expand the reach of our graphene operations.

 

"Our global expansion plans have changed direction slightly as we have decided that progressing into the Chinese market, whilst significant commercially, must be done on the basis that we are confident that our IP is protected. We have exciting opportunities elsewhere, and the change of emphasis in China is not precluding commercial deals being done; the supply of graphene in masks manufactured in China being the first example utilising our graphene technology.

 

"Monetisation of our technologies is now the focus of the Company's attention, although we will continue our stated strategy of acquiring additional IP should suitable opportunities arise. With a strengthened balance sheet following the Lanstead placing and the Innovate UK loan, coupled with a particular focus on those collaborative projects that are expected to deliver commercially in the near term we are very well positioned to execute this strategy.

 

"I would like to take this opportunity to thank our continually supportive investor base and our employees for their hard work as we look forward to the future with continued optimism and confidence."

 

 

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

For further information please contact:

 

Versarien

Neill Ricketts, CEO

Chris Leigh, CFO

+44 (0)1242 269 122

SP Angel Corporate Finance (Nominated Adviser and Joint Broker)

Ewan Leggat, Soltan Tagiev

 

+44 (0)20 3470 0470

Berenberg (Joint Broker)

Mark Whitmore, Simon Cardron

+44 (0)20 3207 7800

Yellow Jersey (Investor Relations) 

Charles Goodwin

Georgia Colkin

Henry Wilkinson

Versarien@yellowjerseypr.com

+44 (0)20 3004 9512

 

 

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 eight subsidiaries operating under two divisions:

 

Graphene and Plastics

 

2-DTech Limited, which specialises in the supply, characterisation and early stage development of graphene products. www.2-dtech.com

Cambridge Graphene Ltd, 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 long lifetime for use in electrical vehicles and portable electronics products. www.gnanomat.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  

Versarien Graphene Inc ("VGI") based in Texas, United States of America, is the distribution arm for the UK's graphene development technologies.

 

Beijing Versarien Technology Company Limited ("BVT") is the wholly owned Chinese foreign entity that will form the base for expansion activities in China. 

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. www.totalcarbide.com 

Chairman's Statement

 

I am delighted to provide my first statement as Non-executive Chairman of Versarien. In the short time since my appointment in June 2020 much has happened at the Company.

 

We have completed the rigorous process required to achieve the award of a £5 million Innovate UK loan, have redirected our strategy with regard to China and have strengthened our senior management with the appointment of Matt Walker.

 

Our focus is now very much on the monetisation of the graphene technologies in our portfolio, although we will continue to fill any product gaps as opportunities arise to do so. An update on the collaborations that we continue to work on is provided in the Chief Executive Officer's Report.

 

Having exercised the backstop arrangement for our joint venture in China, our intention is to use Beijing Versarien Technology Limited ("BVT") as the vehicle for channelling sales enquiries back to the UK for the supply of graphene and/or application products into China. Additionally, we are also looking at how products that utilise our graphene can be imported. It is particularly pleasing to see this in the graphene enhanced mask launch recently announced.

 

The Board of BVT has been appointed and consists of Neill Ricketts, Matt Walker and Bruno Jin, who will also act as General Manager. Bruno, who has worked with Versarien since 2018, has a Bachelor of Engineering degree from Nanjing University and studied at Cambridge University having been awarded a scholarship by the Cambridge Overseas Trust.

 

The appointment of Matt Walker, following his two year secondment from the UK Department for International Trade, brings with it strategic direction for the Company's global expansion plans, which it should be noted are focussed far wider than China and the US. Matt, together with our representative, Rachel Kim, have been working tirelessly on a number of opportunities in South Korea. Matt is also currently looking at opportunities in India, Japan and Singapore.

 

I am particularly pleased with the support that the UK Government has provided to the Company, most significantly via Innovate UK with the provision of a £5 million loan, their first of such magnitude. It is specifically for a project named G SCALE, (an acronym for Graphene-Seat, Concrete, Arch, Leisure, Elastomer), covering a number of Versarien's existing collaborations, which is designed to enable Versarien to significantly increase its manufacture of quality assured graphene.

 

Prior to my appointment, the Company completed a £6 million fund raise and sharing agreement with Lanstead, a US headquartered institutional investor who is now our largest shareholder. Having spoken directly with Lanstead's principal, I am pleased to report that he is very supportive of the Company and its strategic direction. The Versarien team is looking at how it can best advance in the US where early adoption is proving challenging for all market participants.

 

I would like to thank all the staff and the executive directors for their hard work during the year. The coming year will be important for Versarien as it seeks to monetise its graphene technologies and that will be the focus of the Board's attention.

 

James Stewart CBE

Non-executive Chairman

 

 

Chief Executive Officer's Review and Strategic Report

 

As stated above, this year has been particularly challenging with the Covid-19 pandemic taking full force and effect towards the end of our financial year. As has been reported previously, we are now concentrating on the major collaboration opportunities and these are allied to the £5 million Innovate UK loan ("the Loan") awarded to us at the end of June 2020. The Loan particularly acknowledges the work we are undertaking, the advancements made and the strategic importance of our 2D materials technology to the UK. The Loan will help Versarien step up its graphene production capacity so that we can expedite the commercial adoption of products utilising graphene enhanced materials.

 

As we stated would be the case in our announcement on 25 February 2020 the Company intends to use its interim and full year results announcements to provide updates on the status of the Company's various collaborations and will not make announcements between these unless a disclosure obligation arises. I am therefore pleased to provide an update on our current commercial collaborations as well as a summary of specific funding.

 

In order to ensure the appropriate focus of the Company's resources and to ensure that the monetisation of our technologies is now the primary focus of the Company's attention we have segmented our various collaborative projects. Our primary focus is on those projects that are related to the GSCALE project, whilst still continuing to progress others that are likely to provide medium term returns.

 

Funded projects

 

Funder

Project

Amount

Duration

Innovate UK

GSCALE

£5,000,000

24 months

Graphene Flagship

Aircraft surface de-icing

€350,000

36 months

Advanced Propulsion Centre

Low carbon technologies

£104,000

18 months

 

GSCALE collaborations:

 

Start date

Description

 

Current status

 

May-20

Coats Group Plc

The agreement will see the parties work on four specific projects, which will focus on two different manufacturing processes that use Versarien graphene nano-platelets and graphene inks in different consumer textile applications in the Apparel and Footwear sectors. The agreement follows new research and testing on yarn extrusion featuring the Company's graphene materials at the Warwick Manufacturing Group and subsequent discussions with an existing collaborative partner of the Company.

 

Mar-19

Initial order from US company for 12kg of HP-GNP incorporated into polymer masterbatch for down-hole drilling components

Testing on scale up is underway at the customer test facility in Europe and the next milestone is a live drilling test but is subject to ongoing restrictions re Covid-19.

Mar-19

Further collaboration with Chinese Aerospace Company

The parties continue to progress through the work plan created with samples sent for further testing. 

 

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 and are undergoing further analysis.

Dec-18

Collaboration with Chinese Aerospace Company

This longer-term project, which is focused on several materials for different parts continues at an R&D level. Progress dependent upon test results.

Aug-18

Construction materials collaboration with AECOM

Following the launch of the AECOM CNCT Arch at Network Rail facility in Bristol, the product has been subject to further tests, with positive test data reported to date.  Discussions underway regarding project delivery/commercialisation.

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. Programme to resume following lifting of Covid-19 restrictions.

 

Jan-18

Agreement with global apparel manufacturer, MAS Innovation (Private) Limited

The parties continue to work together on projects with brand partners for sportswear and non-sports wear as well as pre-production trials on base layer garments for own branding. Further projects underway on PPE garments with different material blends that could provide further unique benefits.

 

 

Priority projects:

 

Start date

Description

 

Current status

 

Apr-20

 

Rolls Royce/ GEIC

 

The aim of the collaboration is to reduce the weight of electrical components, improve electrical performance of 2D materials and increase resistance to corrosion of components in future engine systems.

It also involves the development of new reel to reel CVD capabilities applicable to other sectors

 

Mar-18

 

Collaboration with world-leading aerospace group

 

This longer-term project features work on specific parts and continues with WMG and other parties.

 

Feb-18

 

Medical technology collaboration at Addenbrooke's hospital

 

Following the return to work of the global partner, the parties are now discussing further supplementary funded projects.

 

Feb-18

 

Agreement with shoemaker, Vivobarefoot

 

Further project work, including textiles and leathers has now commenced, following delays due to Covid-19. 

 

Dec-17

 

Agreement with global chemical major

 

Project ongoing and awaiting further test results.

Nov-17

Collaboration with global consumer goods company

 

Following commercial discussions to evaluate cost-benefit value. The customer has agreed to funded testing at its R&D centre based in the UK. The funding forms part of a new joint development agreement agreed between the parties.

 

 

Ongoing Projects (non-priority):

 

Start date

Description

 

Current status

 

Feb-20

 

Oxford Advanced Surfaces

 

Collaboration to work on graphene enhanced surfaces for adhesion and increase in electrical conductivity using Versarien 2D materials.

 

Oct-19

 

Refractory Materials Collaboration

 

Materials have been supplied and tests carried out, the results of which have been assessed and further tests are being carried out.

 

Jun-18

 

Commercial agreement with MediaDevil

 

New product development has focused on the requirements of private label partners and further trials of different eco-friendly material are on-going. In addition, Media Devil are working with the company on other audio project will a well know household brand.

 

May-18

 

Consumer goods collaboration for polymer structures in plastics

 

The project was put on hold by the customer due to production demands during Covid-19 with resumption anticipated later in the year.

 

Mar-18

Collaboration with Team Ineos for cycling equipment

 

We are working on material prototypes with other partners which we expect to trial later in 2020.

 

 

 

Gnanomat

 

Gnanomat has continued to make progress with its objective of incorporating graphene into energy storage devices.

 

Recently, some of these nanomaterials have demonstrated not only their suitability to be integrated into the electrodes of such devices, but also have demonstrated a significant improvement over current market standards in tests in industrial prototypes. Gnanomat believes it has now developed its nanomaterials to a level that provides approximately three times the energy capacity of current market reference products and is continuing with further developments.

 

These findings have opened the door to prospective customers that are now partnering with Gnanomat. At present it is working with companies in the US, Japan and South Korea, among others, to commercialise its products.

 

In addition, some of the Gnanomat materials have shown significant benefits in other energy storage applications, such as supercapacitors and metal/air batteries.

 

As a result of the advances achieved and its extensive knowledge base and manufacturing potential, Gnanomat is able to participate in a number of different European funding programmes. These include the Spanish Ministry of Science and Innovation which has granted a €116,000 project to the Company as well as others where application is progressing.

 

Versarien Graphene Inc

 

With the Covid-19 pandemic significantly impacting the US, contacting and conducting business with customers in the US has been challenging in recent times. Therefore, the current strategy is to concentrate on larger corporations, which have a further forward vision.

 

A number of NDA's have been signed and technical conference calls between prospective customers and the UK development staff held. In addition, trials are ongoing on a project to add graphene for coatings applications. A tyre manufacturer has also expressed its recent wish to move forward with testing despite being at the epicentre of the pandemic.

 

Gaining traction in the US market is proving challenging, which appears to be in common with many other US graphene companies and these challenges are expected to continue until the worst of the pandemic has abated in the region.

 

AAC Cyroma

 

The past 12 months has seen AAC Cyroma focussing on internal efficiency improvements and new business sales in very challenging market conditions. Improved planning techniques, factory process layout changes and scrap reduction activities has resulted in a reduction in direct labour and raw material costs.

 

A targeted sales strategy has seen new customers placing regular schedules orders, for both injection moulded and vacuum formed work, replacing some lower margin accounts. These include the manufacture and supply of hospital bed and cot mattress panels, injection moulded soil sample core boxes, paint masks, electric vehicle component parts, packaging trays and protective visors for smart PPE.

 

Graphene enhanced injection moulded products, ranging from packaging trays, construction products and consumer goods, have been successfully moulded using AAC Cyroma's injection moulding technology utilising a variety of different polymer grades. These products are being tested in conjunction with our partners for live applications and AAC Cyroma continues to work with new partners looking at opportunities whereby graphene-enhanced products can offer product differentiation and structural improvements.

 

Hard Wear and Metallic Products

 

Over the past few years Total Carbide has sought to move away from its dependency on the oil and gas sector which it had done reasonably successfully. However, with low oil prices that part of the business which still remains has been badly affected and accelerated the need for the business to diversify.

 

For example, after two years of tests and development work with an award winning, Norwegian high- tech company, Total Carbide has succeeded in securing orders for the manufacture of parts which reduce the inflow of water or gas in oil wells. It is expected that this will account for approaching up to 10% of future revenues.

 

Breakthrough technology designed to cut the weight of rockets is being carried out at Westcott and Total Carbide has been working on technology to transform the throat nozzles, which provide the right amount of thrust to propel rockets and satellites.

Currently its throat nozzles are made from heavy tungsten alloys to provide sufficient strength and heat and wear resistance. The addition of Hexotene into a heat resistant ceramic will be used to provide a more lightweight solution. The project is part-funded by the Space Research and Innovation Network for Technology (SPRINT) programme which will help with testing of the new material.

Versarien Technologies' restructuring at the start of the financial year saw it reduce its less profitable business in order to create space at the Cheltenham site to support the graphene scale up that is now made possible by the award of the Innovate UK loan.

 

Key performance indicators

 

As a Group that consists of mature products supporting the development of early stage technology products, we concentrate on the following financial metrics:

 

 

2020

£'000

2019

£'000

Group revenue

8,281

9,140

Gross margin percentage

24%

27%

Loss before interest, tax, depreciation, amortisation, exceptional costs and share based charges

(646)

(1,134)

Cash used by Graphene and Plastic Products

(2,685)

(1,305)

Cash used/generated by Hard Wear and Metallic Products

608

(266)

Cash raised/(utilised) by parent (before loans to/from subsidiaries)

(558)

3,567

Net Cash raised and generated/(used) by the Group

(2,635)

1,996

 

Current trading and outlook

 

The current financial year has seen a slow start for the mature businesses with some staff furloughed, some working from home and some working at our factory locations. With the lifting of restrictions, we are beginning to see some indication of our markets recovering, but continue to monitor costs carefully.

 

The future for the technology businesses looks exciting with the new product launch of the graphene enhanced masks, final testing of Gnanomat products by prospective customers and opportunities for expansion abroad.

 

The opportunity afforded to us by the Innovate UK loan to scale up our processes will be a main focus for the business going forward as we seek to monetise the opportunities we have.

 

We remain confident of the future benefits that graphene can bring to society and our shareholders.

 

Neill Ricketts

Chief Executive Officer

 

 

Financial Review

 

Versarien's revenue for the year ended 31 March 2020 was £8.3 million (2019: £9.1 million) with operating losses before exceptional costs, depreciation, amortisation and share based payment charges of £0.6 million (2019: £1.1 million).

 

Exceptional costs were £1.6 million (2019: £0.4 million) which arose mainly through impairment of goodwill in AAC Cyroma Limited and Total Carbide Limited totalling £0.9m, principally as a result of the Covid 19 related recovery scenarios (2019: £Nil) and China expansion costs of £0.5m (2019: £0.3m). The loss before tax for the year was £4.7 million (2019: £2.8 million), after share based payment charges of £1.2 million (2019: £0.7 million).

 

Prior to the year end the Company entered into a £6 million subscription agreement with Lanstead, together with a related sharing agreement (the "Sharing Agreement"). 15,000,000 new ordinary shares of 1 pence each were issued at a price of 40 pence per share raising gross proceeds of £6 million.

 

The £6 million gross proceeds of the subscription were pledged by the Company pursuant to the Sharing Agreement with Lanstead. The Sharing Agreement entitles the Company to receive back those proceeds on a pro rata monthly basis over a period of 24 months, subject to adjustment upwards or downwards each month depending on the Company's share price at the time by reference to an average benchmark price of 53.33p.

 

In accordance with IFRS 13, the sharing agreement has been valued as at 31 March 2020 using the Monte Carlo (or multiple probability simulation) pricing model which has resulted in a valuation of £6,987,000. Consequently, and in accordance with IFRS 13, a gain of £987,000 has been accounted for as other gains in the Group Statement of Comprehensive Income.

 

The key assumptions in the valuation model, based on a 20-day average price for each month of the 24 months of the Lanstead sharing agreement were:

 

· Observed return volatility over 5 years of 76%

· Annual drift factor 21.2%

· 50,000 simulated observations

· Average share price over the 24 months generated from the model of £0.62

 

One strand of our strategy is to look for global expansion opportunities and our initial target had been China where, as noted above, we have spent £0.5 million including legal fees and secondment fees from the UK Government. Whilst the strategy for China expansion has changed due to a number of factors we have nevertheless made progress as evidenced by the product launch of graphene enhanced face masks accompanied by first orders of 120,000 in volume. Adjusted LBITDA for the graphene businesses was £1.9 million (pre IFRS 16 £2.1 million) (2019: £1.1 million).

 

Our plastics business, AAC Cyroma has returned revenues of £3.8 million (2019: £4.7 million) and EBITDA of £0.4 million (pre IFRS 16 £0.2 million) (2019: £0.2 million).

 

Our mature Hard Wear and Metallic businesses have provided stability to support the development of the emerging businesses, with Total Carbide returning revenues of £3.4 million (2019: £3.2million) and EBITDA of £0.6 million (pre IFRS 16 £0.4 million) (2019: £0.5 million) and Versarien Technologies similarly returning revenues of £0.9 million (2019: £1.2 million) and adjusted LBITDA of £nil million (pre IFRS 16 £0.1 million) (2019 £0.1 million).

 

Group net assets at 31 March 2020 were £15.7 million (2019: £13.3 million) at the year end the Group had cash of £1.7m (2019: £4.3 million), with £1.2 million (2019: £0.6 million) drawn under the invoice finance facilities. As at period end the Company had £0.3 million of headroom in its invoice finance facilities (2019: £0.6 million). Together with the Lanstead sharing agreement and the Innovate UK loan, the Directors consider this sufficient for our current activities over the coming twelve months having made certain assumptions, further details of which are detailed below.

 

Cash outflow from operating activities was £1.5 million (2019: £1.7 million). The Group invested £nil in acquisitions (2019: £0.7 million), £0.4 million (2019: £0.4 million) in capitalised development costs, and £0.3 million (2019: £0.5 million) in plant and machinery.

 

Going concern

 

The financial statements, which are not yet audited, have been prepared on a going concern basis, which the Directors believe to be appropriate for the following reasons:

 

· The Group meets its day-to-day working capital requirements through careful cash management and the use of its invoice discounting facilities;

· As at 31 March 2020, the Group had cash balances totalling £1.7 million with £0.3million of headroom on its invoice discounting facilities;

· The Group was awarded a £5 million loan by Innovate UK to fund certain of its activities;

· The Group receives monthly settlements from its sharing agreement with Lanstead, the quantum of which is dependent upon share price;

 

The Directors have prepared detailed projections of expected future cash flows for a period of twelve months from the date of issue of this preliminary statement. These show that the Group is expected to have sufficient cash available to meet its obligations as they fall due for the foreseeable future (at least twelve months).

 

These projections contain certain assumptions about the sales performance as a result of the Covid 19 pandemic. There is therefore a risk that trading performance could be below expectations. The projections also contain certain assumptions with regards to the share price and the funds that will flow under the sharing agreement with Lanstead and there is also a risk that the share price could be below expectations. Both of these scenarios could lead to a requirement to take mitigating action

 

Such actions could include raising more cash via an equity placing (there is a track record of successful placings) or, in the absence of a funding round, cost reduction in the Group. The Directors' have prepared sensitised projections for these scenarios which indicate that sufficient cash reserves would exist for the foreseeable future(at least twelve months) without any additional fundraising.

 

Other factors that have been taken into account in the Directors' assessment of going concern include:

 

· The expectation that the placing authority for up to 15% of the existing share capital without pre-emption rights will be renewed at the Annual General Meeting;

· The continuation and adequacy of bank facilities and

· That there are a number of mitigating actions the Group could implement, such as reducing the funds spent on development of its technologies and overheads to concentrate on GSCALE opportunities.

 

After due consideration, the Directors have concluded that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future (at least twelve months). For this reason, they continue to adopt the going concern basis in preparing the consolidated financial statements.

 

Chris Leigh

Chief Financial Officer

 

 

Group statement of comprehensive Income (unaudited)

Year ended 31 March 2020

 

Notes

2020

£'000

2019

£'000

Continuing operations

 

 

 

Revenue

2

8,281

9,140

Cost of sales

 

(6,334)

(6,706)

Gross profit

 

1,947

2,434

Other operating income

 

5

148

Other gains

 

987

-

Operating expenses (including exceptional items)

 

(7,487)

(5,345)

Loss from operations before exceptional items

 

(2,941)

(2,343)

Exceptional items

3

(1,607)

(420)

Loss from operations

 

(4,548)

(2,763)

Finance costs

 

(160)

(69)

Finance income

 

5

3

Loss before income tax

 

(4,703)

(2,829)

Income tax

 

49

117

Loss for the year

 

(4,654)

(2,712)

 

 

 

 

Loss attributable to:

 

 

 

- Owners of the parent company

 

(4,148)

(2,473)

- Non-controlling interest

 

(506)

(239)

 

 

(4,654)

(2,712)

 

 

 

 

Loss per share attributable to the equity holders of the Company:

 

 

 

 

 

 

 

Basic and diluted loss per share

5

(2.69)p

(1.64)p

 

There is no other comprehensive income for the year.

 

The gain in the year relates to the fair value assessment of the Lanstead sharing agreement at the balance sheet date.

 

 

Group statement of financial position (unaudited)

As at 31 March 2020

 

 

Notes

2020

£'000

2019

£'000

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

6

4,720

5,318

Property, plant and equipment

7

4,316

3,170

Deferred taxation

 

25

25

Trade and other receivables

 

4,295

-

 

 

13,356

8,513

Current assets

 

 

 

Inventory

 

2,252

2,253

Trade and other receivables

 

4,817

2,141

Current tax

 

157

106

Cash and cash equivalents

 

1,657

4,292

 

 

8,883

8,792

Total assets

 

22,239

17,305

Equity

 

 

 

Called up share capital

8

1,697

1,536

Share premium account

8

25,497

19,776

Merger reserve

 

1,256

1,256

Share-based payment reserve

 

2,056

899

Retained losses

 

(13,846)

(9,698)

Equity attributable to owners of the parent company

 

16,660

13,769

Non-controlling interest

 

(999)

(493)

Total equity

 

15,661

13,276

 

 

 

 

Liabilities

 

 

 

Non-current liabilities

 

 

 

Trade and other payables

 

1,192

328

Deferred tax

 

67

69

Long-term borrowings

 

516

708

 

 

1,775

1,105

Current liabilities

 

 

 

Trade and other payables

 

2,928

1,528

Provisions

 

97

174

Current tax

 

290

257

Invoice discounting advances

 

1,156

603

Current portion of long-term borrowings

 

332

362

 

 

4,803

2,924

Total liabilities

 

6,578

4,029

Total equity and liabilities

 

22,239

17,305

  

Group statement of changes in equity (unaudited)

Year ended 31 March 2020

 

Share

 capital

£'000

Share

premium

account

£'000

Merger

reserve

£'000

Share-based

payment

 reserve

£'000

Accumulated losses

£'000

 

Non-controlling

Interest

£'000

Total

equity

£'000

At 1 April 2018

1,486

12,529

1,256

187

(7,225)

(254)

7,979

Issue of shares

50

7,247

 

-

 

-

 

-

 

-

7,297

Loss for the year

-

-

-

-

(2,473)

(239)

(2,712)

Share-based payments

-

-

-

712

-

-

712

At 31 March 2019

1,536

19,776

1,256

899

(9,698)

(493)

13,276

Issue of shares

161

5,721

-

-

-

-

5,882

Loss for the year

-

-

-

-

(4,148)

(506)

(4,654)

Share-based payments

-

-

-

1,157

-

-

1,157

At 31 March 2020

1,697

25,497

1,256

2,056

(13,846)

(999)

15,661

  

Statement of Group cash flows (unaudited)

Year ended 31 March 2020

 

Notes

 

2020

£'000

 

2019

£'000

Cash flows from operating activities

 

 

 

Cash used in operations

9

(1,487)

(1,737)

Interest paid

 

(155)

(66)

Net cash used in operating activities

 

(1,642)

(1,803)

Cash flows from investing activities

 

 

 

Acquisition of subsidiaries (net of cash acquired)

 

-

(673)

Purchase of intangible assets

 

(351)

(434)

Purchase of property, plant and equipment

 

(286)

(541)

Net cash used in investing activities

 

(637)

(1,648)

Cash flows from financing activities

 

 

 

Share issue (net of funds deferred per sharing agreement)*

 

123

5,155

Share issue costs

 

(241)

(200)

Finance leases (net of repayments)

 

-

156

Principal payment of leases under IFRS 16

 

(791)

-

Invoice discounting loan proceeds/(repayments)

 

553

(514)

Net cash generated from financing activities

 

(356)

4,597

Increase/(decrease) in cash and cash equivalents

 

(2,635)

1,146

Cash acquired on acquisition

 

-

850

Cash and cash equivalents at beginning of year

 

4,292

2,296

Cash and cash equivalents at end of year

 

1,657

4,292

 

* As disclosed further in the Financial Review, during the year 15,000,000 shares were issued for cash raising gross proceeds of £6 million which were pledged via a sharing agreement entitling the Company to receive back those proceeds over a period of 24 months. 

Notes to the Financial Statements (unaudited)

1. Basis of preparation

The consolidated financial statements consolidate the results of the Company and its subsidiaries (together referred to as the "Group").

 

The financial information included in this preliminary announcement does not constitute statutory accounts of the Group for the years ended 31 March 2020 or 31 March 2019. The financial information for the year ended 31 March 2019 is derived from statutory accounts upon which the auditors have reported. Their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The auditors work on the statutory accounts of the Group for the year ended 31 March 2020 is not yet complete.

 

Both the consolidated financial statements and the Company financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS").

 

On 1 April 2019, IFRS 16 was adopted using the modified retrospective approach therefore not restating the comparatives.

 

2. Segmental reporting

At 31 March 2020 the Group was organised into two business segments. Central costs are reported separately.

Information reported to the Group's Chief Executive Officer for the purposes of resource allocation and assessment of performance is focused on the two principal business segments of Graphene and Plastic Products and Hard Wear and Metallic Products and, accordingly, the Group's reportable segments under IFRS 8 are based on these activities.

Segment profit/(loss) represents the profit/(loss) earned by each segment, including a share of central administration costs, which are allocated on the basis of actual use or pro rata to sales. This is the measure reported to the Chief Executive Officer for the purposes of resource allocation and assessment of segment performance.

The segment analysis for the period ended 31 March 2020 is as follows:

 

Central

£'000

Graphene and Plastic

Products

£'000

 Hard Wear and Metallic

 Products

£'000

Intra-group

adjustments

£'000

Total

£'000

Revenue

-

3,942

4,342

(3)

8,281

Gross profit

-

727

1,220

-

1,947

Other operating income

-

-

5

-

5

Other gains

987

-

-

-

987

Operating expenses

(2,032)

(3,449)

(1,126)

(4)

(6,611)

Impairment of Goodwill

-

(522)

(354)

-

(876)

(Loss) from operations

(1,045)

(3,244)

(255)

(4)

(4,548)

Finance charge

(1)

(97)

(57)

-

(155)

(Loss) before tax

(1,046)

(3,341)

(312)

(4)

(4,703)

Total assets

21,917

6,906

5,509

(12,093)

22,239

Total liabilities

(1,523)

(11,090)

(4,753)

10,788

(6,578)

Net assets/(liabilities)

20,394

(4,184)

756

(1,305)

15,661

Capital expenditure

34

324

279

-

637

Depreciation/amortisation

23

628

458

29

1,138

 

The segment analysis for the period ended 31 March 2019 is as follows:

 

Central

£'000

Graphene and Plastic

Products

£'000

 

 Hard Wear

And Metallic Products

£'000

Intra-group

adjustments

£'000

Total

£'000

Revenue

-

4,729

4,416

(5)

9,140

Gross profit

-

1,064

1,370

-

2,434

Other operating income

-

144

4

-

148

Operating expenses

(1,978)

(2,582)

(1,274)

489

(5,345)

(Loss) from operations

(1,978)

(1,374)

100

489

(2,763)

Finance income/(charge)

3

(43)

(26)

-

(66)

(Loss)/profit before tax

(1,975)

(1,417)

74

489

(2,829)

Total assets

15,510

5,536

4,780

(8,521)

17,305

Total liabilities

(1,109)

(6,963)

(4,068)

8,111

(4,029)

Net assets/(liabilities)

14,401

(1,427)

712

(410)

13,276

Capital expenditure

166

775

34

-

975

Depreciation/amortisation and impairment

13

245

207

32

497

 

Geographical information

The Group's revenue from external customers and information about its segment assets by geographical location are detailed below:

 

 

Revenue from external customers

 

Non-current assets

 

2020

£'000

2019

£'000

 

2020

£'000

2019

£'000

United Kingdom

6,920

7,577

 

11,040

6,203

Rest of Europe

831

1,065

 

2,316

2,310

North America

273

306

 

-

-

Other

257

192

 

-

-

 

8,281

9,140

 

13,356

8,513

 

3. Exceptional items

 

2020

£'000

2019

£'000

Relocation and restructuring costs

139

59

Costs relating to expansion in China

531

271

Costs relating to setting up of the US subsidiary

-

28

Acquisition costs

32

29

Impairment of goodwill relating to subsidiaries (see note 6)

876

-

Other

29

33

 

1,607

420

 

4. Dividends

 

As stated in the Company's AIM Admission Document, the Board will not be declaring or proposing any dividends until such time as the commercialisation of its product portfolio has generated sufficient distributable reserves from which to do so.

 

5. Loss per ordinary share

 

The calculation of the basic loss per share for the period ended 31 March 2020 and 31 March 2019 is based on the losses attributable to the shareholders of Versarien Plc divided by the weighted average number of shares in issue during the year. The calculation of diluted loss per share is based on the basic loss per share adjusted to allow for the issue of shares on the assumed conversion of all dilutive options. However, in accordance with IAS 33 "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 31 March 2020 there were 14,677,130 (2019: 14,985,100) potential ordinary shares which have been disregarded in the calculation of diluted loss per share as they were considered non-dilutive at that date.

 

 

Loss

attributable to

shareholders

£'000

Weighted

average

number of

shares

£'000

Basic loss

per share

pence

Year ended 31 March 2020

(4,148)

153,956

(2.69)

Year ended 31 March 2019

(2,473)

151,129

(1.64)

 

6. Intangible assets

 

Goodwill

£'000

Other

intangibles

£'000

Total

£'000

Cost

 

 

 

At 1 April 2018

2,167

1,543

3,710

Additions

-

434

434

Disposals

-

(21)

(21)

Acquisitions

2,264

20

2,284

At 1 April 2019

4,431

1,976

6,407

Additions

-

351

351

 

 

 

 

At 31 March 2020

4,431

2,327

6,758

Accumulated amortisation and impairment

 

 

 

At 1 April 2018

-

1,032

1,032

Disposals

-

(13)

(13)

Amortisation charge

-

70

70

At 1 April 2019

-

1,089

1,089

Amortisation charge

-

73

73

Impairment

876

-

876

At 31 March 2020

876

1,162

2,038

Carrying value

 

 

 

At 31 March 2020

3,555

1,165

4,720

At 31 March 2019

4,431

887

5,318

 

The impairment of Goodwill in 2020 relates to AAC Cyroma Limited and Total Carbide Ltd as per exceptional items, note 3.

 

Other intangible assets

 

31 March 2020

£'000

31 March 2019

£'000

Customer relationships/order books

54

81

Development costs

901

600

Licence

28

48

Intellectual property

182

158

Total

1,165

887

 

7. Property, plant and equipment

Group

ROU asset

Plant and

equipment

£'000

Leasehold

improvements

£'000

Total

£'000

Cost

 

 

 

 

At 1 April 2018

-

9,247

518

9,765

Additions

-

541

-

541

Acquisitions

-

76

-

76

Disposals

-

(2)

-

(2)

At 1 April 2019

-

9,862

518

10,380

Adjustment on transition to IFRS 16

6,377

(4,453)

-

1,924

Additions

160

127

-

287

Disposals

-

(132)

-

(132)

At 31 March 2020

6,537

5,404

518

12,459

Accumulated depreciation

 

 

 

 

At 1 April 2018

-

6,735

50

6,785

Charge for the year

-

393

34

427

Disposals

-

(2)

-

(2)

At 1 April 2019

-

7,126

84

7,210

Adjustment on transition to IFRS 16

2,567

(2,567)

-

-

Charge for the year

820

218

27

1,065

Disposals

-

(132)

-

(132)

At 31 March 2020

3,387

4,645

111

8,143

Net book value

 

 

 

 

At 31 March 2020

3,150

759

407

4,316

At 31 March 2019

-

2,736

434

3,170

 

Under IFRS16 the Right of Use assets for the Group are as follows:

 

 

Group 2020

£'000

 

Plant & equipment

Buildings

Total

Cost

4,613

1,924

6,537

Accumulated depreciation

(2,788)

(599)

(3,387)

Net book value

1,825

1,325

3,150

 

In prior year leases under HP were classified as plant and equipment, however, under IFRS16 they have now been classified as ROU asset with other leases.

 

8. Called up share capital and share premium

 

Number

of shares

'000

Ordinary

shares

£'000

Share

premium

£'000

Total

£'000

At 1 April 2018

148,665

1,486

12,529

14,015

Issue of shares

4,959

50

7,247

7,297

At 31 March 2019

153,624

1,536

19,776

21,312

Issue of shares

16,058

161

5,721

5,882

At 31 March 2020

169,682

1,697

25,497

27,194

 

9. Cash used in operations

 

 

 

2020

£'000

2019

£'000

 

Loss before tax

(4,703)

(2,829)

 

Adjustments for:

 

 

 

Share-based payments

1,157

712

 

Depreciation

1,065

427

 

Amortisation

73

70

 

Impairment of Goodwill

876

-

 

Disposal of non-current assets

-

8

 

R&D tax credit repayment

49

117

 

Gain on FV movement of share agreement

(987)

-

 

Finance cost

155

66

 

Decrease/(increase) in trade and other receivables

(35)

424

 

Decrease/(increase) in inventories

1

(292)

 

Decrease in trade and other payables

862

(440)

 

Cash flows from operating activities

(1,487)

(1,737)

 

 

10. Report and accounts

 

Copies of the 2020 Annual Report and Accounts will be posted to shareholders in due course once they are finalised and approved. Further copies may be obtained by contacting the Company Secretary at the registered office. In addition, the 2020 Annual Report and Accounts will be available, when published, to download from the investor relations section on the Company's website www.versarien.com.

 

- Ends -

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 KKKBQKBKBCFD
Date   Source Headline
28th Mar 20247:00 amRNSAudited Results for year ended 30 September 2023
28th Mar 20247:00 amRNSTotal Voting Rights
20th Mar 20248:33 amRNSPlacing to raise £615,000
14th Mar 20247:00 amRNSSouth American Graphinks Agreements
11th Mar 20247:00 amRNSSale of Korean Assets and Licencing of IP
16th Feb 20242:22 pmRNSNotification of final results
7th Feb 20247:00 amRNSReceipt of Legal Claims
31st Jan 20247:00 amRNSTotal Voting Rights
23rd Jan 20244:53 pmRNSHolding(s) in Company
23rd Jan 20241:24 pmRNSHolding(s) in Company
19th Jan 20247:00 amRNSPlacing to raise £400,000
10th Jan 202411:29 amRNSResult of General Meeting
20th Dec 20237:00 amRNSCompany Update and Notice of General Meeting
30th Nov 20237:00 amRNSTotal Voting Rights
8th Nov 20237:00 amRNSPlacing to raise £454,822
30th Oct 202311:52 amRNSResult of General Meeting
30th Oct 20237:00 amRNSGeneral Meeting Statement
12th Oct 20237:00 amRNSNotice of General Meeting
2nd Oct 20237:00 amRNSCorporate Update
13th Sep 20237:00 amRNSTurnaround Strategy - Gnanomat Grant Award
31st Jul 20237:00 amRNSTotal Voting Rights
18th Jul 20234:31 pmRNSDirectorate Changes
14th Jul 20237:00 amRNSPlacing to raise £650,000
4th Jul 202310:54 amRNSResult of General Meeting
4th Jul 20237:00 amRNSGeneral Meeting Statement
15th Jun 20237:00 amRNSNotice of General Meeting
9th Jun 20237:00 amRNSInterim Results
31st May 20237:00 amRNSTotal Voting Rights
17th May 20237:00 amRNSSuccessful Cementene precast concrete trials
3rd May 20239:30 amRNSPlacing and Update on Turnaround Strategy
31st Mar 20237:00 amRNSTotal Voting Rights
29th Mar 202311:22 amRNSResult of AGM
29th Mar 20237:00 amRNSAGM Statement
15th Mar 20237:00 amRNSPlacing to raise £318,000
14th Mar 20232:56 pmRNSFurther re Resignation of Chief Executive Officer
10th Mar 20237:00 amRNSResignation of Chief Executive Officer
6th Mar 20237:00 amRNSCostain Civil Engineering Project
1st Mar 202312:00 pmRNSUmbro Launch
28th Feb 20237:00 amRNSNotice of AGM and Posting of Annual Report
21st Feb 20237:00 amRNSResults for the 18 months ended 30 September 2022
9th Feb 20238:33 amRNSAIM Rule 17 Update
27th Jan 20237:00 amRNSGraphene-Wear OEKO-TEX Eco Passport certification
24th Jan 20231:56 pmRNSFinal Results Update
30th Dec 20227:00 amRNSTotal Voting Rights
6th Dec 20229:40 amRNSPlacing to raise £1.85 million
5th Dec 20224:40 pmRNSSecond Price Monitoring Extn
5th Dec 20224:35 pmRNSPrice Monitoring Extension
5th Dec 20227:00 amRNSG-SCALE Update & Innovate UK Loan Variation
2nd Dec 20224:35 pmRNSPrice Monitoring Extension
1st Dec 20224:41 pmRNSSecond Price Monitoring Extn

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.