Windar Photo Regulatory News (WPHO)

25 November 2022

Windar Photonics plc

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

Unaudited interim report for the six months ended 30 June 2022

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 2022.

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Notes to Editors:

Windar Photonics is a technology group that develops cost-efficient and innovative Light Detection and Ranging ("LiDAR") optimisation systems for use on electricity generating wind turbines. LiDAR wind sensors in general are designed to remotely measure wind speed and direction.

http://investor.windarphotonics.com

CHAIRMAN'S STATEMENT

Despite having experienced severe logistical challenges during the first six months of 2022 due to the ongoing COVID-19 pandemic, realised revenue for the first half year of 2022 increased by 35% to €0.4 million (H1 2021: €0.3 million). The majority of revenue within the period was realized in June, when initial deliveries to Vestas Service (North America) finally commenced.

The Company continued to see an increased interest in our product offerings with receipt of new orders during the period for a further €1.6 million (H1 2021: €0.9 million), including important new test orders from North America and Japan expanding our WindEye™ and WindTimizer solution to new wind turbine platforms. Similarly, the Company received new orders from key customers in Asia based on previously announced test results in the region and, in total, the overall order backlog at the end of the period stood at €3.8 million (H1 2021: €2.2 million), of which more than €1 million has been invoiced/received, but is not recognised in the revenue figure for H1 2022 and is included as deferred revenue within the contract liabilities figure on the balance sheet. This invoiced balance will be recognised in future periods. 

The Company further continued its efforts to reduce operational expenses during the period and, compared to the same period of 2021, total operational costs were reduced by 10%. This reduction, combined with the increased revenue and gross profit during the period, resulted in the net loss before taxation being reduced from €0.9 million in H1 2021 to €0.8 million in H1 2022.

Financial Overview

Overall, the Group realized revenues of €0.4 million (H1 2020: €0.3 million) and recorded a net loss of

€0.8 million for the period (H1 2021: loss of €0.9 million) after depreciation, amortization and warrant costs of €0.1 million (H1 2021: €0.2 million).

Cash flow from operations produced a net inflow of €0.1 million for the period compared to a net outflow of €0.6 million in H1 2021.

Outlook

Despite the continued COVID related challenges experienced during the period, which severely impacted planned production and customer shipments, the overall market developments have been encouraging in 2022. The order backlog has increased substantially during the period, and the Board expect additional orders in the near future, not only substantiated by the Company's exclusive offerings but further supported by the general worldwide increase in electricity prices supporting our underlying business case. 

As previously announced in the annual accounts for 2021, and due to the severe COVID related challenges experienced during the period, the Board initiated activities for a new capital raise in the second half of 2022. The Board is pleased to announce that subject to readmission of trading on AIM, the Company has successfully raised €2.4 million (before costs) at an issue price of 15p per share. Board member participation in the capital raise is expected to constitute approximately 10% of the total capital raise. Further, after end of the accounting period the Company has renegotiated the repayment schedule of the Growth Fund loan, whereby €0.6 million currently recognized as short term debts at the end of the accounting period would have been deemed as long-term debts if new terms applied. Given these actions and combined with the continued progress of the underlying positive development of the general business activities, the Board believes that the Company has sufficient cash flows for operations for the coming 12 months period.

Overall, the Board recognizes the severe negative impact the general COVID-19 pandemic has had on the progress of the Company during the last couple of years. However, noting a substantial improved development in relation to all important key performance indicators in the second half of 2022 the Board believes that the Company is positioned for a successful economical future. The development is currently further enhanced by the globally increase in cost of energy whereby the value of our value proposition increases, as the main benefit from the product offerings is to increase power generation from new and existing wind turbines, and at the same time, positively contributing to a more worldwide sustainable green power generation transformation in the future. 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2022

1. BASIS OF PREPARATION

The financial information for the six months ended 30 June 2022 and 30 June 2021 does not constitute the Groups 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. 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 ended 31 December 2022 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2021. The comparative financial information for the year ended 31 December 2021 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2021 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2021 was unqualified but included a reference to the material uncertainty related to going concern in respect of the timing of future revenues 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 Group has adequate resources to continue operating for the next 12 months. 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.

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 reduce the loss per share.

2. Inventory

3. Trade and other receivables

4. Share capital

At 30 June 2022, the share capital comprises 54,595,524 shares of 1 pence each.

Borrowings

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

The Growth Fund borrowing from the Danish public institution, Vækstfonden, initially bore interest at a fixed annual rate of 12 per cent with a full bullet repayment in June 2021. Terms for the borrowing were amended in June 2020, and November 2020, pursuant to which the interest rate was reduced to 7 percent p.a. and the loan is to be repaid in equal quarterly instalments over the period from 1 January 2022 until 1 January 2026. In November 2020 the Company has received an offer on an additional Covid loan of €400,000 at an annual interest rate of Cibor + 5% to be repaid over a 5 year period starting from January 2022 The cash proceeds has been received post reporting period.

Post the accounting period the Company has renegotiated the repayment schedule of the Growth Fund loan, whereby €0.6 million currently recognized as current portion and other short-term debts at the end of the accounting period would have been deemed as long-term debts if new terms applied.

All loans are denominated in Danish Kroner.

5. 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.

6. Availability of Interim Report

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