Windar Photo Regulatory News (WPHO)

WINDAR PHOTONICS - Half-yearly Report

PR Newswire

London, September 29

30 September 2015

Windar Photonics plc(the “Company” or “Windar Photonics”)

Unaudited interim report for the six months ended 30 June 2015

Chairman’s Statement

Windar Photonics PLC (AIM:WPHO), the technology group that has developed a cost efficient and innovative Lidar wind sensor for use on electricity generating wind turbines announces its unaudited interim results for the six months ended 30 June 2015.

In the period the Group incurred a loss before tax of €1.56 million (six months ended 30 June 2014: €1.00 million) on revenue of €145,000 (2014: €432,000). The revenue in the period is lower than expected primarily due to a delay in developing the Asian market. The loss for the period primarily arose due to lower revenue than expected and the planned investments in personnel and increased sales and marketing activities.

The Group’s cash position at the end of the period of €2.8 million reflects the investment in the stock of finished goods in anticipation of a higher level of sales during the period. As a result, the Directors have taken the decision not to commence paying down the Growth Fund Loan of €0.8 million. The Group has the option to not start repaying this loan until full repayment is required in June 2020.

In June 2015 the Group announced a delay in developing the Asian market due to installation issues on the initial deployments of its systems in China. These issues have now been resolved and the Group has further established an in-house commercial and technical organisation based in Shanghai and Beijing. However, this delay will have a material effect on sales in the region for 2015. Currently, the Group has an exclusive distribution agreement in place for the Chinese market which is dependent on certain sales levels being achieved in 2015. As the Directors expect that the necessary sales level target will not be achieved, the Directors are considering the Company’s options for capitalising on the high levels of interest from Chinese wind park operators and Original Equipment Manufacturers (OEMs).

Orders from the rest of the world are likely to be in line with our expectations for 2015, but some have come in later than planned and as a result some of these deliveries will now take place in 2016. The Group is pleased to announce that it has received its first volume order for retrofitting an entire wind park with our Wind*Eye™ Lidar and our new Turbine Control System from a US utility company. The contract value is approximately US$ 900,000 with delivery in 2016. This is an important milestone for the Company.

In the first half of 2015 the technical development programme has performed well and expanded the Group’s product offering. These include:

The WindTIMIZER™ enables direct turbine integration for existing wind turbines fitted with certain wind sensors. The Turbine integration enables us to optimise the efficiency of existing wind turbines using the Wind*Eye™ Lidar system and thereby provide an improved Annual Energy Production due to an optimisation of the yaw alignment of the Wind Turbine.

The new Turbine Control System which operates on the Vestas V47 platform and the Bonus 1.3MW platform, two widely used platforms, is an alternative turbine integration platform to the WindTIMIZER™ solution. When retro-fitting not only the Wind*Eye™ Lidar system but also the Turbine Control System, we are able to not only optimise the yaw alignment of existing Wind Turbines but also to improve pitch control to further enhance power optimisation, reduce fatigue load, reduce maintenance costs and not least increase the life time expectancy of existing wind turbines. The Group has seen significant market interest for this solution, as evidenced by the above mentioned first volume order in the US, and this new product offering means the Company can now demonstrate strong business cases for retrofitting our solution in smaller wind turbines sizes, whereas the WindTIMIZER™ solution has been targeting wind turbines of 1.5MW and above.

The Group recently installed its first 4-beam Lidar System on a 3.6MW Siemens turbine in Denmark and it has already received other orders for testing the 4-beam Lidar System., The 4-beam Lidar system will be tested at the Danish Technical University in Denmark to measure and validate actual load reductions. 

Currently the Group has a significant number of trial installations with utility companies in Asia, Europe and North America which are providing good results confirming the attractive business case for the installation of the Wind*Eye™ Lidar system for the utility companies. In addition, the Group has continued to focus on building interest with the OEM turbine manufacturers both in relation to the Wind*Eye™ Lidar system and the new 4-beam Lidar System. We have experienced good levels of interest from several of the leading turbine manufacturers and several turbine manufactures have now successfully tested our system and entered the development stage of direct turbine integration.

The Directors believe the delayed build-up in sales will not have a long term impact, but it will however mean that expected revenue for 2015 will be of the order of that achieved in 2014. The Directors are confident that the significant interest shown by current customers, including both utility companies and OEMs, will enable the Company to increase revenue substantially in 2016, although given the delays encountered in 2015, not to the levels previously expected.

The Directors remain confident that the Group has an attractive range of innovative products with strong market interest which bodes well for future success.

John Weston

Chairman

For further information:

Windar Photonics plc Martin Rambusch, CEO +45 2168 9476

Jørgen Korsgaard Jensen, COO

Sanlam Securities UK Limited David Worlidge +44 (0)20 7628 2200

(Nomad and Broker)

http://investor.windarphotonics.com

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS

ENDED 30 JUNE 2015

BASIS OF PREPARATION

The financial information for the six months ended 30 June 2015 and 30 June 2014 does not constitute the Group’s statutory financial statements for those periods with the meaning of Section 434(3) of the Companies Act 2006 and has neither been audited or reviewed pursuant to guidance issued by the Auditing Practices Board. The annual financial statements of Windar Photonics Plc are prepared in accordance with International Financial Reporting Standards as endorsed by the European Union (“IFRS”). The principal accounting policies used in preparing the Interim financial statements are those that the Group expects to apply in its financial statements for the year ending 31 December 2015 and are unchanged from those disclosed in the Group’s Annual Report for the year ended 31 December 2014.

The comparative financial information for the year ended 31 December 2014 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2014 have been filed with the Registrar of Companies. The Independent Auditor’s Report on the Annual Report and Financial Statements for 2014 was unqualified, did not include references to any matters which the auditors drew attention to by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-498(3) of the Companies Act 2006.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated financial statements.

This interim report was approved by the directors.

2. Loss per share

The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:

There is no dilutive effect of the warrants as the dilution would be negative.

3. Inventory

4. Trade and other receivables

5. Share capital

At the date of incorporation, the issued share capital of the Company was £2.00 divided into 2 ordinary shares of £1.00 each in the capital of the Company, both of which were fully paid or credited as fully paid to their subscribers.

On 29 July 2014, the 2 ordinary shares of £1.00 each (being all the issued capital in the Company) were subdivided into 200 ordinary shares of 1 pence each.

Between 29 August 2014 and 12 December 2014 (inclusive), the Company issued 38,166,177 Ordinary Shares as follows:

32,184,002 Ordinary Shares in consideration for the transfer to the Company of the entire issued share capital in the Windar Photonics A/S pursuant to the terms of the Share Swap Agreement;

5,910,000 Ordinary Shares in consideration for cash received by the Company; and

72,175 Ordinary Shares in consideration for the satisfaction of fees payable to West Hill Capital LLP.

At 31 December 2014 and 30 June 2015 the share capital comprises 38,166,377 shares of 1 pence each.

6. Borrowings

The carrying value and fair value of Group’s borrowings are as follows:

The Growth Fund borrowing from the Danish public institution, Vækstfonden, bears interest at a rate of 12 per cent. The borrowing is a bullet loan with maturity in June 2020. The Group may at any point in time either repay the loan in part or in full or initiate an annuity repayment scheme over four years. If an annuity repayment scheme is initiated, the interest rate will be reduced to 8 per cent in the repayment period.

7. Trade and other payables

There is no material difference between the net book value and the fair values of current trade and other payables due to their short term nature.

8. Availability of Interim Report

Copies of the Interim Report will not be sent to shareholders but will be available from the Company’s website www.investor.windarphotonics.com.