REG - Light Science Tech. - Final Results
08/05/2024 07:00
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RNS Number : 5067N Light Science Tech. Holdings PLC 08 May 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) 596 / 2014 WHICH FORMS PART OF UNITED KINGDOM LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
Light Science Technologies Holdings plc
("LSTH", "Light Science", the "Company" or the "Group")
Final Results & Notice of AGM
Record Revenue, Margin Growth and Strong Progress towards Profitability
Light Science Technologies Holdings plc (AIM: LST), comprising three
divisions: controlled environment agriculture ("CEA"); contract electronics
manufacturing ("CEM") and passive fire protection ("PFP"), announces its
audited results for the year ended 30 November 2023.
The Company will be posting its annual report & accounts, together with
notice of AGM, to shareholders later today, with this document now available
on its website.
Financial Highlights
· Record revenue of £9.30m, up 13.8% (2022: £8.17m)
· Gross margins increased to 23.4% (2022: 17.7%)
· Reduced loss before tax of £1.14m (2022: £2.72m)
· Successful £1.45m (net proceeds) fundraise facilitating product
development and CEA IP protection
Operational Highlights
· CEM division continued strong revenue growth, up 13% to £9.09m (2022:
£8.04m)
· Acquisition of Tomtech by the CEA division
o Earnings enhancing and complementary CEA addition, further strengthening
product range and market reach
· Acquisition of Injecta Fire Barrier trade and assets, creating new
PFP division
o Earnings enhancing and expected near-term cash-generative acquisition of
scalable trade; addressing UK potential market value up to £50bn*
o Creating a balanced portfolio of companies providing near-term revenue and
cash-flow opportunities
Post-Period Highlights
· Strengthened Board positions Group for continued growth
o Graham Cooley appointed as Non-Executive Chairman bringing invaluable
public company experience
o Richard Mills appointed as Independent Non-Executive Director
significantly expanding global CEA reach
· £188k CEA grant award funded by DEFRA & Innovate UK
· £130K CEM first order received from sports entertainment market
segment
· £600k Injecta Fire Barrier contract commenced
· Recently agreed terms with Close Brothers for updated debt facilities,
providing group-wide financing underpinned by an additional £850,000 group
facility: subject to contract, expected during May 2024.
o Provides increased financial resilience and positions the Group to exploit
future growth initiatives
Investor Presentation: 16:00, Wednesday 8 May
Management will be providing a presentation and hosting an investor Q&A
session on the Company's results and future prospects at 16:00 today.
Investors can sign up for free and register to meet LSTH via the following
link: https://www.investormeetcompany.com/light-science-technologies-holdings-plc/register-investor
(https://www.investormeetcompany.com/light-science-technologies-holdings-plc/register-investor)
Questions can be submitted pre-event via the platform or by
emailing lst@walbrookpr.com, or in real time during the presentation via the
"Ask a Question" function.
Institutional Investor Meetings:
The Company will be in London for meetings during the week commencing 13 May
2024. If you would like to meet with management, please contact
aimeemccusker@oberoninvestments.com.
Simon Deacon, CEO of Light Science Technologies Holdings plc, commented: "We
are very pleased to report significant operational progress in the period,
with strong progress across all parts of the business delivering record Group
revenues which exceeded internal management expectations.
"The CEM division continues to underpin Group revenue generation and present
significant growth opportunities in new and existing markets, whilst the PFP
and CEA divisions offer exciting, and potentially very lucrative, growth
opportunities in the medium to long term.
"We move forward with a significantly strengthened corporate team and
long-term global structural drivers that complement our business model. The
Light Science management team is committed to growing a complementary
portfolio of companies that is diverse, operationally self-funding, and
delivers for its shareholders."
*Estimators price cladding replacement at 10 times government budget
(theconstructionindex.co.uk)
For additional information please contact:
Light Science Technologies Holdings plc www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com/)
Simon Deacon, Chief Executive Officer via Walbrook PR
Jim Snooks, Chief Financial Officer
Andrew Hempsall, Chief Operating Officer
Strand Hanson Limited (Nominated & Financial Adviser) Tel: +44 (0) 20 7409 3494
Ritchie Balmer / James Harris / Rob Patrick
Oberon Capital (Broker) Tel: +44 (0) 203 179 5300
Mike Seabrook / Nick Lovering
Walbrook PR Ltd (Media & Investor Relations) Tel: +44 (0)20 7933 8780 or lst@walbrookpr.com (mailto:lst@walbrookpr.com)
Nick Rome / Joe Walker
Notes to Editors:
About Light Science Technologies Holdings
plc (www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com/) )
Light Science Technologies Holdings plc operates through three divisions:
controlled environment agriculture ("CEA"); contract electronics manufacturing
("CEM"); and passive fire protection ("PFP"). The company is involved in the
design, manufacturing, and installation of products and customized solutions
spanning various industry sectors, including commercial horticulture, pest
control, lighting, audio, gas detection, and fire protection. With a focus on
addressing global challenges related to food security, climate change, and
fire protection, the Group is committed to developing robust solutions in
these rapidly growing market sectors.
LSTH is the holding company for Light Science Technologies Ltd ("Light Science
Technologies") and Tomtech (UK) Limited ("Tomtech") in the CEA division; UK
Circuits and Electronics Solutions Limited ("UK Circuits") in the CEM
division; and LSTH IFB Limited ("LSTH IFB") in the PFP division.
Controlled Environment Agriculture
The Group's tailored solutions encompass control systems, grow lights, sensor
technology, venting, and irrigation systems, catering to both UK and global
customers. Key markets include indoor, vertical, glasshouses, polytunnels, and
medicinal farming. Driving factors comprise global food and water shortages, a
growing population, government policies promoting sustainable growth methods,
heightened scrutiny of food production's impact on climate change, and a shift
away from processed foods. Key markets span the Americas, Australasia, and
select locations in the Middle East.
The sensorGROW technology enables real-time monitoring of essential air zone
growing factors such as carbon dioxide, air humidity, air pressure, air
temperature, and light. In development, it aims to extend monitoring to soil
temperature, soil moisture, and soil electroconductivity. This empowers
farmers to enhance resource management, saving costs on water, nutrients,
fertilizers, and energy, while simultaneously increasing yields and
cultivating healthier crops. Learn more here
https://lightsciencetech.com/sensorgrow/
(https://lightsciencetech.com/sensorgrow/) . The nurturGROW sustainable grow
lighting product range, applicable to greenhouses, vertical farming,
polytunnels, and medicinal plants, addresses a robust market with an
anticipated global worth exceeding US$6.5 billion by 2026. Explore solutions
here https://lightsciencetech.com/solutions/greenhouse/
(https://lightsciencetech.com/solutions/greenhouse/)
Through Tomtech, the Group stands out as a UK leader in control systems for
commercial greenhouses and polytunnels. Tomtech enables growers in optimizing
and automating cultivation environments, leading to superior crop growth. The
product range includes control systems, software, irrigation, lighting,
sensors, and venting, applicable across various crops, ultimately improving
yields and profitability. Discover more here https://www.tomtech.co.uk/
(https://www.tomtech.co.uk/)
Contract Electronics Manufacturing (https://www.ukcircuits.co.uk/
(https://www.ukcircuits.co.uk/) )
UK Circuits serves as the Group's profitable and revenue-strong CEM-focused
division. It excels in designing, procuring, and manufacturing high-quality
CEM products, with a specialization in Printed Circuit Boards. These products
find application across diverse sectors such as audio, automotive,
electronics, gas detection, lighting, pest control, telecommunications, and,
more recently, in the CEA market.
Passive Fire Protection (https://injectafirebarrier.com/
(https://injectafirebarrier.com/) )
LSTH IFB offers a practical and cost-effective solution to rectify
non-compliant public and private buildings, spanning residential, commercial,
and industrial sectors, with regard to fire safety regulations-a challenge
addressed by a £5.1 billion allocation from the UK government. Serving as the
UK's premier independent approved installer, LSTH IFB utilizes the
ground-breaking Injectaclad fire-resistant graphite barrier system. This
system is retroactively installed within building cavities, reinstating
fire-resistant performance and containing the spread of fire and smoke
compliant with regulatory requirements. This innovative solution stands out as
an appealing alternative to the more costly and disruptive method of removing
external facades and installing traditional fire barriers. With a proven track
record in the passive fire protection market and a robust sales pipeline, LSTH
IFB targets a UK market potentially valued at up to £50 billion**.
Chairman's statement
I am pleased to present the Light Science Technologies Holdings plc Annual
Report for the year ended 30 November 2023. I am also delighted to have joined
the Board as Non-Executive Chairman, together with Richard Mills who became an
independent Non-Executive Director, post period end.
This year has been marked by significant achievements and strategic
developments for the Company. I am delighted to report a commendable sales
growth of 13.0% (FY22: 9.2%) for our Contract Electronics Manufacturing
("CEM") division, contributing to the Group's overall revenue growth of 13.8%
and resulting in a record turnover. Our Group gross profit margin has grown to
a robust 23.4% (FY22: 17.7%), reflecting the improved efficiency and
competitiveness of our operations in a still challenging supply chain and
inflationary environment during 2023.
Throughout the year, we continued to execute our growth strategy, culminating
in the successful earnings enhancing acquisitions of Tomtech, which was
integrated into our Controlled Environment Agriculture ("CEA") division, and
the assets and trade of Injecta Fire Barrier, which now forms our Passive Fire
Protection ("PFP") division. These acquisitions strategically expanded our
portfolio and market presence, positioning us for sustained growth and success
in the years to come.
Our business model integrates both organic growth and strategic bolt-on
acquisitions, providing a balanced approach to expansion. We operate three
distinct but complementary divisions, each contributing to the financial
stability and potential of the Company. Our immediate objective is to attain
positive cash flow in the near term.
Additionally, we have successfully undertaken proactive measures to enhance
our financial resilience and facilitate sustainable and scalable cash
generation in the near to mid-term. These efforts, which included a successful
fundraise of £1.45 million net proceeds and recently, negotiating a
credit-backed agreement with our incumbent debt provider, Close Brothers, to
restructure our Group debt facilities - helping fund further product
development and IP protection - and cost reduction initiatives, underscore our
commitment to delivering long-term value to our shareholders.
The momentum achieved during the year sets us up well for the current year,
which has seen forward orders and stock levels in the CEM division reverting
towards pre-pandemic levels. This division has recently received a new order
worth £130,000 in the sports entertainment market segment, with potential for
significant follow-on revenues. In March 2024, our CEA division was awarded a
product development grant worth £188,251, while our PFP division has
continued work on its first project order, worth approximately £600,000.
Our short term strategy has focused on lowering our cost base and driving
revenue growth. We believe that the combination of steps taken during the year
and the growth dynamics of our target markets present us with a compelling
opportunity to further grow our footprint as we provide solutions to a range
of potential end customers ensuring that the Company is well placed to grow
revenues, margins and cash flow.
Graham Cooley
Non-Executive Chairman
7 May 2024
Chief Executive's report
This was a very encouraging year of progress for operational achievements
within our Company - with a focus on setting the foundations for the business
to move towards becoming cashflow positive in the near-term, creating a
springboard for sustainable long term growth.
The combination of growing revenues and margins and a lower cost base meant
that losses for the year were significantly reduced, positioning the Company
to further strengthen its balance sheet with the aim of creating an
operationally self-funded business.
Strong organic and acquisitive growth
I am proud to report robust sales growth of 13.0% from our CEM division,
contributing significantly to the Group's overall revenue growth of 13.8%.
This achievement is a testament to the dedication and hard work of our
operations team, who have consistently delivered high-quality products and
services to our customers. Having invested in new plant and equipment, as well
as our continued investment in staff training, further margin improvement is
expected within this division.
While the CEM division contributed the majority of revenues during the year,
the Company took a number of steps to broaden growth opportunities, which are
expected to see a rebalancing of divisional contributions as the Company
further develops its operations.
Throughout the year, the focus was on optimising our operational processes to
drive efficiency and enhance customer satisfaction. These efforts were
significantly bolstered by the strategic acquisitions of Tomtech and the
assets and trade of Injecta Fire Barrier, which have both expanded our
capabilities and strengthened our market position, importantly adding
near-term revenues and further enhancing the Company's growth opportunities.
Tomtech is increasingly providing commercial and operational synergies within
our CEA division - introducing new revenue streams and cross-selling
opportunities, while the Injecta Fire Barrier trade and assets provide a whole
new platform for growth within our PFP division. Given the timing of these
acquisitions, which were completed in September 2023 and November 2023
respectively, the benefits are yet to materially feed through to the bottom
line, with results for H1 2024 expected to reflect the initial benefit of our
rebalanced portfolio.
In addition, we have implemented rigorous cost reduction initiatives and
successfully completed a fundraise. Recently we negotiated a credit-backed
agreement with our incumbent debt provider, Close Brothers, to restructure our
Group debt facilities, to further bolster our financial position and support
future growth initiatives. These actions demonstrate our commitment to
operational excellence and long-term value creation for our shareholders.
Significant CEA Growth Opportunities
It's worth noting the substantial global growth in the controlled environment
agriculture and vertical farming markets, which present significant
opportunities for our Company. As the agriculture industry increasingly adopts
sustainable growing methods, our technology solutions are well-positioned to
meet the evolving needs of these market segments.
We have established a number of core product lines and our broadened
technology base means that we are well placed to take advantage of growing
requirements for digitisation. Equally, we are positioned to benefit from
cross selling opportunities offered by the Tomtech acquisition while the
global market provides a strong backdrop for us to develop international
partnership agreements - an area Richard Mills is focused on helping the
Company exploit.
The combination of Light Science Technologies' expertise and modern technology
and Tomtech's product range positions the Company at the forefront of the next
generation of smart farming products, which can optimise inputs of seeds,
fertilisers chemicals, water and more, to meet the individual needs of
farmers' growing environments and enabling them to maximise crop yields, which
gives them better financial control and improves sustainability.
As such, we believe that the Company is strongly positioned at the forefront
of growing demand for innovative solutions that tackle energy, labour, food
security and global cultivation challenges.
Portfolio Approach
Furthermore, we remain excited by the potential for growth across all parts of
the business. The CEA opportunity is underpinned by growing public and
governmental recognition of the need to re-think the way we approach
sustainable food production and the importance of locally supplied produce.
We are delighted by the strong margin improvement within the CEM division,
where expanded capacity and increased automation are helping gain further
traction, while more generally, reduced supply chain constraints are
underpinning an improved backdrop.
Meanwhile, the creation of our PFP division positions the Company strongly
within a high demand sector with significant levels of committed government
funding. Importantly, this is a near-term cash generative and scalable
operation, which is well placed to take advantage of the growing fire safety
retrofit market in the UK. The PFP quoted pipeline of sales opportunities
currently stands over £9 million and we remain optimistic about securing new
contracts, with our reach stretching the length and breadth of mainland UK.
The Fire Safety Act 2021 and Building Safety Act 2022 (which came into force
on 1 October 2023) will lead, in the Board's view, to Government pressuring
developers, building owners, housing associations etc. to undertake
remediation works.
Board Changes
I am delighted to note the strengthening of our Board post-year end with the
addition of Graham Cooley as Non-Executive Chairman and Richard Mills as an
Independent Non-Executive Director - both highly experienced individuals who
bring diverse expertise and perspectives to our leadership team. Their
contributions will be invaluable as we navigate the evolving landscape of our
industry. At the same time, I would like to thank Myles Halley and Robert
Naylor for their valued contributions to the Company, including their
oversight of admission to trading on AIM, both of whom have stepped down from
the Board.
Financial Review
Income Statement
The CEM division saw revenue growth of 13.0% from £8.04 million to £9.09
million, with an improved gross margin facilitated by an easing of supply
chain constraints and an enhanced ability to pass on inflationary increases to
the end customer. Gross margin increased to 22.6% from 16.7%, and the Board
continues to take various actions aimed at maintaining and improving margin
generation, against the risk of persisting inflationary pressures.
The CEA division saw revenue growth of 73.5% from £0.13 million to £0.22
million, following the acquisition and integration of Tomtech into the
division in September 2023, in the backdrop of the continued challenging macro
trends experienced during the year, leading a number of potential customers to
continue delaying projects.
The cost reduction programme saw a 29% decrease in administrative expenses
from £4.26 million to £3.03 million, helping to reduce the Group's loss
before tax by 58.2% from £2.72 million to £1.14 million, ahead of internal
management expectations. This was achieved despite exceptional non-recurring
administrative expenses of £0.26 million from acquisition costs and
product-specific impairment charges, due to a change in scope resulting from
the impact of the energy crisis, on projected payback of the advanceGROW
product in development.
Balance Sheet
The Group continued to invest in developing the CEA division's core product
offering, leading to additions in the year of £592,000 in intangible
development assets. As development of the sensorGROW and advanceGROW products
were partly covered by UKRI grants, a further £140,000 of grant income has
been deferred within the year in relation to these intangible assets, shown
separately within other payables.
Additionally, there was further investment in the CEM division's plant and
machinery, to drive efficiency and improve gross margins, totalling
c.£110,000 in the year with a further £39,000 committed at year end.
As supply chain shortages started to ease towards the year end, and with the
improved visibility and control facilitated by our MRP system, inventory
levels reduced to £1.40 million from £1.58 million in 2022. Inventory is
predominantly allocated to specific customer orders and the year-end
stock-take loss amounted to 0.045%, showing excellent efficiency and accuracy
of our MRP system.
Cash and cash equivalents increased to £0.98 million (2022: £0.59 million)
at the year end, such increase derived from the net proceeds of the fundraise
undertaken in April 2023; cash acquired as part of the Tomtech acquisition;
and a positive contribution from net cash flow from operating activities. Net
debt decreased to £1.38 million (2022: £2.35 million).
Acquisitions
The Company completed two earnings-enhancing acquisitions, Tomtech (UK)
Limited, with excellent synergies with the Group's CEA division; and the trade
and assets of Injecta Fire Barrier, to form a new Passive Fire Protection
division for the Group.
Total consideration for Tomtech amounts to £0.52 million payable over 30
months (£0.37 million of which remains payable), with the business already
contributing £0.11 million to the Group's profit by the year end date.
Contingent consideration for the Injecta Fire Barrier business is up to £1.75
million, fair valued at £1.0 million. The business was purchased close to the
year-end so there was insufficient time to mobilise and generate revenue or
profit for the Group, but it is expected to deliver near-term cash generation.
Debt Refinancing
After the year end, the Company negotiated and recently received a
credit-backed offer (legal documentation to be completed imminently), from its
CEM division's incumbent debt provider, Close Brothers, to convert the
existing facilities into Group-wide facilities, and to draw £850,000 in the
form of a new term loan, to provide growth and working capital wherever it may
be required in the Group. This allows the Group to exploit potential
opportunities presented to its divisions. Completion of the refinancing is
expected during May 2024.
Outlook
Looking forward, I am optimistic about the future prospects of Light Science
Technologies Holdings plc. Our Company's key strengths, including our
sustainable products, established platform business, early mover advantage,
scalability, and strong IP protection, position us for continued success and
growth in the dynamic markets we serve.
We have established a portfolio of businesses that have a market potential
worth of over $100 billion: in the CEA sector, the cumulative smart
agriculture sales growth for the nine years from 2023 to 2032 is expected to
be $55 billion with a 12% CAGR**; in the PFP sector, the market is potentially
worth £50 billion*. We have a quoted pipeline of sales opportunities within
the CEA division worth nearly £40 million and over £9 million in the PFP
division.
Our focus in each of our divisions is to grow revenue, margins and global
opportunities. This will be achieved via organic growth as well as strategic
acquisitions, at the same time as creating a network of global distributors
within our CEA division, expanding our reach but keeping costs under control,
focusing on fastest growing countries first which have more pressured food
security issues.
I would like to express my gratitude to our shareholders, employees,
customers, and partners for their continued support and dedication. Together,
we will continue to drive innovation, excellence, and value creation across
all facets of our business.
Simon Deacon
Chief Executive Officer
7 May 2024
*Estimators price cladding replacement at 10 times government budget
(theconstructionindex.co.uk)
**Smart Agriculture Market Size & Share, Growth Report 2032
(gminsights.com)
Consolidated Statement of Comprehensive Income
For the year ended 30 November 2023
2023 2022
Notes £ £
Revenue 3 9,295,160 8,166,769
Cost of sales (7,122,419) (6,723,400)
Gross profit 2,172,741 1,443,369
Administrative expenses (3,026,483) (4,263,454)
Non-recurring administrative expenses (255,363) -
Other operating income 249,197 209,786
Operating loss 4 (859,908) (2,610,299)
Finance costs (279,077) (112,167)
Loss on ordinary activities before taxation (1,138,985) (2,722,466)
Income tax credit 5 213,376 235,147
Loss for the year and total comprehensive income for the year (925,609) (2,487,319)
Attributable to: (953,164) (2,502,748)
The owners of the company
Non-controlling interests 27,555 15,429
(925,609) (2,487,319)
Loss per share
Basic and diluted (pence) 6 (0.36) (1.51)
Consolidated Balance Sheet
As at 30 November 2023
30 November 2023 30 November
2022
£ £
Assets
Non-current assets
Goodwill 920,867 -
Intangible assets 1,560,130 708,343
Property, plant and equipment 854,512 777,919
Right-of-use assets 423,881 658,680
3,759,390 2,144,942
Current assets
Inventories 1,399,597 1,583,349
Trade and other receivables 2,154,961 2,569,651
Corporation tax receivable 37,897 177,795
Cash and cash equivalents 981,357 590,673
4,573,812 4,921,468
Total assets 8,333,202 7,066,410
Liabilities
Current liabilities
Borrowings (1,779,712) (2,007,947)
Trade and other payables (1,878,435) (2,079,134)
Consideration payable (364,580) -
Lease liabilities (101,240) (221,773)
(4,123,967) (4,308,854)
Non-current liabilities
Borrowings (180,555) (397,222)
Trade and other payables (240,017) (111,787)
Consideration payable (1,017,406) -
Lease liabilities (303,978) (313,060)
(1,741,956) (822,069)
Total liabilities (5,865,923) (5,130,923)
Net assets 2,467,279 1,935,487
Capital and reserves attributable to the owners of the company 3,330,055 1,741,500
Share capital 5,520,243 5,654,011
Share premium account (3,478,435) (3,478,435)
Merger reserve 546,614 726,000
Share based payment reserve
Warrant reserve 159,593 159,593
Retained earnings (3,980,645) (3,209,481)
2,097,425 1,593,188
Non-controlling interests 369,854 342,299
Total equity 2,467,279 1,935,487
Consolidated Statements of Changes in Equity
For the year ended 30 November 2023
Share based payment reserve Warrant reserve Merger reserve Retained earnings Non- controlling
Share capital Share premium account interests
£ Total equity
£ £ £ £ £ £ £
At 30 November 2022 1,741,500 5,654,011 726,000 159,593 (3,478,435) (3,209,481) 342,299 1,935,487
Transactions with shareholders
Share based payments - - 2,614 - - - - 2,614
Shares issued during the year 1,588,555 (133,768) - - - - - 1,454,787
Share based payments - lapsed options - - (182,000) - - 182,000 - -
Total transactions with shareholders 1,588,555 (133,768) (179,386) - - 182,000 - 1,457,401
Comprehensive income
Loss for the year - - - - - (953,164) 27,555 (925,609)
Total comprehensive income - - - - - (953,164) 27,555 (925,609)
At 30 November 2023 3,330,055 5,520,243 546,614 159,593 (3,478,435) (3,980,645) 369,854 2,467,279
Share based payment reserve Warrant reserve Merger reserve Retained earnings Non- controlling
Share capital Share premium account interests
Total equity
£ £ £ £ £ £ £ £
At 30 November 2021 1,741,500 5,654,011 220,363 159,593 (3,478,435) (706,733) 326,870 3,917,169
Transactions with shareholders
Share based payments - - 505,637 - - - - 505,637
Total transactions with shareholders - - 505,637 - - - - 505,637
Comprehensive income
Loss for the year - - - - - (2,502,748) 15,429 (2,487,319)
Total comprehensive income - - - - - (2,502,748) 15,429 (2,487,319)
At 30 November 2022 1,741,500 5,654,011 726,000 159,593 (3,478,435) (3,209,481) 342,299 1,935,487
Consolidated Cash Flow Statement
For the year ended 30 November 2023
2023 2022
£ £
Cash flows from operating activities (925,609) (2,487,319)
Loss after tax
Adjustments for: 115,371 172,804
Depreciation of tangible assets
Depreciation of right-of-use assets 187,318 144,850
Amortisation and impairment of intangible assets 245,618 -
Loss on disposal of tangible and right-of-use assets 30,278 -
Foreign exchange loss 2,185 21,959
Unwind of discount on consideration 7,496 -
Interest payable - loan and leases 103,219 90,208
Taxation and RDEC credit (266,112) (205,511)
Share based payment 2,614 505,637
207,925 (383,600)
Changes in working capital:
Decrease/(increase) in inventory
Decrease/(increase) in trade and other receivables 492,087 (808,365)
(Decrease)/increase in trade payables and other payables (209,934) 40,691
Cash outflow from operations (7,544) (2,908,646)
Tax received 183,111 155,849
Net cash inflow/ (outflow) from operating activities 175,567 (2,752,797)
Cash flows from investing activities (18,809) (127,920)
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment 27,456 -
Acquisition of subsidiaries, net of cash acquired 142,507 -
Purchase of intangible fixed assets (592,405) (493,645)
Purchase of right-of-use-assets (16,172) (5,804)
Net cash outflow from investing activities (457,423) (627,369)
Cash flows from financing activities
Capital issued (net of issue costs) 1,454,787 -
Repayment of loans (216,667) (216,667)
Lease payments (234,126) (248,738)
Interest paid on leases (33,155) (37,769)
Net drawdown on working capital facilities (228,235) 666,022
Interest paid on loans and borrowings (70,064) (52,439)
Net cash inflow from financing activities 672,540 110,409
Increase/(decrease) in cash and cash equivalents 390,684 (3,269,757)
Cash and cash equivalents including overdrafts at the start of the year 590,673 3,860,430
Cash and cash equivalents including overdrafts at the end of the year 981,357 590,673
Notes to the financial statements
1 General Information
In accordance with Section 435 of the Companies Act 2006, the Group confirms
that the financial information for the years ended 30 November 2023 and 2022
are derived from the Group's audited financial statements and that these are
not statutory accounts and, as such, do not contain all information required
to be disclosed in the financial statements prepared in accordance with
UK-adopted International Accounting Standards. The statutory accounts for the
year ended 30 November 2022 have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 30 November 2023 have been audited
and approved but have not yet been filed. The Group's audited financial
statements for the year ended 30 November 2023 received an unqualified audit
opinion and the auditor's report contained no statement under section 498(2)
or 498(3) of the Companies Act 2006.
The financial information contained within this full year results statement
was approved and authorised for issue by the Board on 7 May 2024. The 2023
accounts, together with notice of the Annual General Meeting, are expected to
be posted to shareholders on 8 May 2024 and will be available from the Light
Science Technologies Holdings plc website
(www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com) ) from the 8 May 2024. They
will also be available from the Chief Financial Officer, Light Science
Technologies Holdings plc, Ednaston Park Business Centre, Painters Lane,
Ednaston, Ashbourne, DE6 3FA.
The Group financial statements have been prepared under the historical cost
convention and under the basis of going concern. The principal accounting
policies adopted are consistent with those disclosed in the financial
statements for the year ended 30 November 2022.
2 Going concern
Working capital forecasts have been prepared by management
which show that the Group can meet its day-to-day cash flow requirements and
operate within all the terms of its borrowing facilities.
The Directors are satisfied that the Group has sufficient
financing in place to continue to meet its liabilities as they fall due for a
period of at least 12 months from the date of approval of this report and
hence have prepared the financial statements on a going concern basis.
The Directors acknowledge that there is uncertainty on the
level and timing of revenues especially in the Controlled Environment
Agriculture and Passive Fire Protection divisions, and there would be a
probable need to raise additional funding, should the Group's expectations for
revenue generation not materialise as expected. The Directors note that this
material uncertainty may cast significant doubt on the Group's and parent
company's ability to continue as a going concern.
In response to these matters the Group is continuing to
manage cash flows and discretionary spending.
The financial statements do not include any adjustments
that would result if the Group and parent company were unable to continue as a
going concern.
3 Revenue and segmental reporting
The total revenue of the Group for the period has been derived from its
principal activity wholly undertaken in the United Kingdom and Republic of
Ireland.
Revenue in respect of the supply of hardware and project services is
recognised at a point in time either at the point of customer collection,
dispatch or project completion. Revenue in respect of services is recognised
over time evenly over the number of months supported or as measured by the
number of linear meters installed.
Revenue by products and services: 2023 2022
£ £
Supply of hardware (CEM) 9,085,484 8,038,645
Supply of hardware (CEA) 67,681 62,154
Supply of project services (CEA) 142,321 65,970
Supply of maintenance services (CEA) 12,306 -
Supply of installation services (PFP) - -
Intercompany eliminations (12,632) -
9,295,160 8,166,769
During the year ended 30 November 2023, one CEM customer represented 58.3% of
total revenue (2022: 54.3%).
The Group has three operating segments 'Contract electronics manufacture'
relating to the development and manufacturing of electronic boards;
'Controlled environment agriculture' relating to the development,
manufacturing and installation of lighting, technology and other products for
the Controlled Environment Agriculture (CEA) sector; and 'Passive fire
protection' relating to the installation of a retrospective cavity barrier in
wall and floor constructions. Corporate refers to the Group's centralised
resources used by the segments. The Chief Operating Decision Maker (CODM) has
been determined to be the Board. The performance of the three reportable
segments is based upon a review of profits and segmental assets/liabilities.
30 November 2023 Contract electronics manufacture Controlled environment agriculture Passive fire protection Corporate and intercompany eliminations Total
£ £ £ £ £
Revenue 9,085,484 222,308 - (12,632) 9,295,160
Depreciation, amortisation and impairment (176,610) (366,727) (23) (4,947) (548,307)
Operating profit/(loss) 594,029 (789,724) (31,112) (633,101) (859,908)
Segment assets 4,331,514 2,269,204 1,193,586 538,898 8,333,202
Segment liabilities (3,539,171) (672,835) (1,204,911) (449,006) (5,865,923)
30 November 2022 Contract electronics manufacture Controlled environment agriculture Passive fire protection Corporate and intercompany eliminations Total
£ £ £ £ £
Revenue 8,038,645 128,124 - - 8,166,769
Depreciation, amortisation and impairment (172,357) (140,101) - (5,196) (317,654)
Operating profit/(loss) 269,381 (1,682,171) - (1,197,509) (2,610,299)
Segment assets 5,287,275 1,472,680 - 306,455 7,066,410
Segment liabilities (4,550,498) (319,436) - (260,989) (5,130,923)
Due to the changes in structure following the acquisitions in the year, the
reportable segments have been restated for the year ending 30 November 2022.
4 Operating loss
Operating loss is stated after charging: 2023 2022
£ £
Depreciation on property, plant and equipment 115,371 172,804
Depreciation on right-of-use assets 187,318 144,850
Amortisation of intangible assets 35,618 -
Loss on sale of fixed assets 24,214 -
Research and development expenses 8,327 135,821
Inventory expensed 5,726,181 5,491,423
Foreign exchange losses 2,185 -
Debt factoring expenses - 98,268
Short term low value lease expenses 12,085 7,942
Share based payments 2,614 505,637
In the prior year, foreign exchange losses were classified as a finance cost,
and debt factoring expenses as an administrative expense. The classification
has been changed for the current year as shown above and the comparatives have
not been restated as the amounts involved are not material.
5 Taxation
The tax credit is made up as follows:
2023 2022
£ £
Current tax expense
UK corporation tax for the year (15,896) (181,582)
Adjustment in respect of prior year (53,445) (53,565)
Total current income tax (69,341) (235,147)
Deferred tax
Origination and reversal of timing difference (138,949) -
Adjustment in respect of prior year (5,086) -
(144,035) -
(213,376) (235,147)
Reconciliation of effective tax rate
The tax assessed for the year varies from the average standard rate of
corporation as explained below:
2023 2022
£ £
Loss on ordinary activities before taxation (1,138,985) (2,722,466)
UK tax credit at average standard rate of 23% (2022: 19%) (261,967) (517,269)
Fixed asset differences 3,389 (5,772)
Expenses not deductible for tax 33,313 13,780
Adjustment to corporation tax in respect of prior period (53,445) (53,565)
Adjustment for R&D tax credit including SME claims (88,759) (376,223)
Surrender of tax losses for R&D tax credit refund 48,370 268,015
Adjustments for deferred tax in respect of change in rates (5,086) -
Movement in deferred tax not recognised 110,809 435,887
Tax credit in statement of comprehensive income (213,376) (235,147)
Corporation tax increased from 19% to 25% from April 2023. Unrecognised
deferred tax balances at 30 November 2023 have been calculated using a rate of
25% (2022: 25%) based on the enacted rates that are expected to apply when
these are unwound.
6 Loss per share
Basic loss per share is calculation on the loss for
the year after taxation attributable to the owners of the parent of £953,164
(2022: £2,502,748) and on 262,534,137 ordinary shares (2022: 165,250,000),
being the weighted number in issue during the year, excluding shares held by
the Employee Benefit Trust.
30 November 2023 30 November 2022
Weighted average number of shares (000's) Per share amount (pence) Weighted average number of shares (000's) Per share amount (pence)
Loss Loss
£ £
Basic and Diluted EPS
Weighted average number of ordinary shares 271,434,137 174,150,000
Adjusted for the effect of own shares held by Employee Benefit Trust (EBT) (8,900,000) (8,900,000)
Earnings attributable to ordinary shareholders of the Company (953,164) 262,534,137 (0.36) (2,502,748) 165,250,000 (1.51)
Diluted earnings per share
Basic and diluted earnings per share are equal for 2023 and 2022,
since where a loss is incurred the effect of outstanding share options and
warrants is considered anti-dilutive and is ignored for the purpose of the
loss per share calculation.
7 Annual General Meeting
The annual general meeting is to be held at 11:00 a.m. on
Friday, 31 May 2024 at Ednaston Park Business Centre, Painters Lane, Ednaston,
Ashbourne, DE6 3FA. Please refer to the Notice of AGM for full details.
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