REG - Accsys Technologies - Interim Results for period ending 30 September 17 <Origin Href="QuoteRef">ACCS.L</Origin> - Part 2
22/11/2017 07:05
- Part 2: For the preceding part double click ID:nRSV1657Xa
(unaudited)
Total comprehensive (expense) for the period - - 104 - (108) (1,800) (1,804) (101) (1,905)
Share based payments - - - - - 442 442 - 442
Shares issued - - - 1 - - 1 - 1
Issue of subsidiary shares to non-controlling interests - - 6,511 - - - 6,511 12,702 19,213
Issue of subsidiary shares to Group companies - - (576) - - - (576) - (576)
Balance at 4,531 128,792 113,460 (33) 45 (202,944) 43,851 12,620 56,471
31 March 2017
Total comprehensive expense for the period - - 97 - (52) (6,316) (6,271) (564) (6,835)
Share based payments - - - - - 159 159 - 159
Shares issued 1,037 - - 18 - - 1,055 - 1,055
Premium on shares issued - 13,007 - - - - 13,007 - 13,007
Share issue costs - (1,771) - - - - (1,771) - (1,771)
Issue of subsidiary shares to non-controlling interests - - (3,316) - - - (3,316) 14,814 11,498
Balance at 5,568 140,028 110,241 (15) (7) (209,101) 46,714 26,870 73,584
30 Sept 2017
(unaudited)
See note 10 for details concerning other reserves.
Non-controlling interests relates to the investment of various parties into Tricoya Technologies Limited and Tricoya
Ventures UK Limited (note 6)
The notes set out on pages 17 to 28 form an integral part of these condensed financial statements.
Consolidated interim statement of cash flow for the six months ended 30 September 2017
Unaudited Unaudited Audited
6 months 6 months Year End
30 Sept 30 Sept 31 March
2017 2016 2017
(restated) (restated)
E'000 E'000 E'000
Loss before taxation before exceptional items and other adjustments (5,242) (3,153) (4,497)
Adjustments for:
Amortisation of intangible assets 289 276 556
Depreciation of property, plant and equipment 1,167 1,090 2,157
Net (gain)/loss on disposal of property, plant and equipment - - 55
Net Finance expense 981 103 302
Equity-settled share-based payment expenses 159 442 884
Currency translation (gains)/losses 180 (66) (129)
Cash outflows from operating activities before changes in working capital and before exceptional items and other adjustments (2,466) (1,308) (672)
Exceptional Items in operating activities (see note 4) (1,604) (303) (517)
Cash outflows from operating activities before changes in working capital (4,070) (1,611) (1,189)
(Increase) in trade and other receivables (1,392) (765) (2,936)
(Decrease) in deferred income - (23) -
(Increase) in inventories (2,904) (1,712) (3,322)
(Decrease)/Increase in trade and other payables (733) 1,394 5,737
Net cash used in operating activities before tax (9,099) (2,717) (1,710)
Tax (paid) (482) (2) (745)
Net cash absorbed by operating activities (9,581) (2,719) (2,455)
Cash flows from investing activities
Interest (paid)/ received - 1 2
Disposal of property, plant and equipment - 4,223 4,223
Expenditure on property, plant and equipment (6,957) (1,507) (6,416)
Expenditure on intangible assets (212) (244) (415)
Net cash used in investing activities (7,169) 2,473 (2,606)
Cashflows from financing activities
Proceeds from loans - - 20,736
Other finance costs (325) - (954)
Interest Paid (223) (104) (250)
Repayment of finance lease (83) (86) (173)
Proceeds from issue of share capital 14,063 50 50
Proceeds from issue of subsidiary shares to non-controlling interests 11,498 - 19,122
Share issue costs (1,771) - (805)
Net cash from financing activities 23,159 (140) 37,726
Net increase/(decrease) in cash and cash equivalents 6,409 (386) 32,665
Effect of exchange loss on cash and cash equivalents (704) 66 322
Opening cash and cash equivalents 41,173 8,186 8,186
Closing cash and cash equivalents 46,878 7,866 41,173
The notes set out on pages 17 to 28 form an integral part of these interim financial statements.
Notes to the financial statements for the 6 months ended 30 September 2017
1. Accounting policies
General Information
The principal activity of the Group is the production and sale of Accoya® solid wood and exploitation of technology for the
production and sale of Accoya® wood and Tricoya® wood elements via the Company's 100% owned subsidiaries, Titan Wood
Limited, Titan Wood B.V., Titan Wood Technology B.V., Titan Wood Inc. 75% owned subsidiary, Tricoya Technologies Limited
(collectively the 'Group'), and the 46% owned subsidiary, Tricoya Ventures UK Limited. Manufactured through the Group's
proprietary acetylation processes, these products exhibit superior dimensional stability and durability compared with
alternative natural, treated and modified woods as well as more resource intensive man-made materials.
The Company is a public limited company, which is listed on AIM in the United Kingdom and Euronext in the Netherlands, and
is domiciled in the United Kingdom. The registered office is Brettenham House, 19 Lancaster Place, London, WC2E 7EN.
The condensed consolidated interim financial statements were approved on 21 November 2017.
These condensed consolidated interim financial statements have been reviewed, not audited.
Basis of accounting
The Group's condensed financial statements in these interim results have been prepared in accordance with IFRS issued by
the International Accounting Standards Board as endorsed by the European Union, in particular International Accounting
Standard (IAS) 34 "interim financial reporting" and the disclosure and transparency rules of the Financial Conduct
Authority. The financial information for the six months ended 30 September 2017 and the six months ended 30 September 2016
is unaudited. The comparative financial information for the full year ended 31 March 2017 does not constitute the group's
statutory financial statements for that period although it has been derived from the statutory financial statements for the
year then ended. A copy of those statutory financial statements has been delivered to the Registrar of Companies and which
were approved by the Board of Directors on the 19 June 2017. The auditors' report on those accounts was unqualified and did
not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
In preparing these interim financial statements, the significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated
financial statements for the year ended 31 March 2017.
The accounting policies adopted are consistent with those of the previous financial year except for taxes on income in the
interim periods which are accrued using the tax rate that would be applicable to the expected total annual profit or loss,
and to reflect the adoption of IFRS9 and hedge accounting.
Changes in accounting policies
No new accounting standards, amendments or interpretations have been adopted in the period which have any impact on these
condensed financial statements, or are expected to affect the Group's 2018 Annual Report other than as noted below.
The accounting policies and methods of computation are consistent with those applied in the 31 March 2017 annual financial
statements, other than during the period IFRS9, Financial Instruments has been adopted together with hedge accounting in
respect of the future currency exposures in respect of the Tricoya plant construction. The previous year's figures have
been restated and represented accordingly. An assessment was carried out to identify all areas impacted under the adoption
of IFRS 9 and currently there are no other impacts expected for the period year ending 30 September 2017.
Going concern
These condensed consolidated financial statements are prepared on a going concern basis, which assumes that the Group will
continue in operational existence for the foreseeable future, which is deemed to be at least 12 months from the date these
interim results were approved. As part of the Group's going concern review, the Directors have reviewed the Group's trading
forecasts and working capital requirements for the foreseeable future. These forecasts indicate that, in order to continue
as a going concern, the Group is dependent on achieving certain operating performance measures relating to the production
and sales of Accoya® wood from the plant in Arnhem and the collection of on-going working capital items in line with
internally agreed budgets.
The Directors have considered the internally agreed budgets and performance measures and believe that appropriate controls
and procedures are in place or will be in place to make sure that these are met. The Directors believe, while some
uncertainty inherently remains in achieving the budget, in particular in relation to market conditions outside of the
Group's control, that there are a sufficient number of alternative actions and measures that can be taken in order to
achieve the Group's medium and long term objectives. Therefore, the Directors believe that the going concern basis is the
most appropriate on which to prepare the financial statements.
2. Segmental reporting
The Group's business is the manufacturing of and development, commercialisation and licensing of the associated proprietary
technology for the manufacture of Accoya® wood, Tricoya® wood elements and related acetylation technologies. Segmental
reporting is divided between corporate activities, activities directly attributable to Accoya, to Tricoya or research and
development activities. This note has been represented and restated following the formation of the Tricoya Consortium to
more appropriately reflect costs associated with Accoya and Tricoya.
Accoya
Accoya Segment
6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2016 6 months ending 30 September 2016 6 months ending 30 September 2016 12 months ending 31 March 2017 12 months ending 31 March 2017 12 months ending 31 March 2017
Before exceptional items & other adjustments
Exceptional items & Other Adjustments Before exceptional items & other adjustments
Exceptional items & Other Adjustments
Before exceptional items & other adjustments
TOTAL Exceptional items & Other Adjustments
TOTAL TOTAL
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Accoya® wood revenue 26,184 - 26,184 22,534 - 22,534 50,655 - 50,655
Licence revenue - - - 500 - 500 1,576 - 1,576
Other revenue 2,122 - 2,122 2,002 - 2,002 4,268 - 4,268
Total Revenue 28,306 - 28,306 25,036 - 25,036 56,499 - 56,499
Cost of sales (22,667) - (22,667) (18,236) - (18,236) (42,175) - (42,175)
Gross profit 5,639 - 5,639 6,800 - 6,800 14,324 - 14,324
Other operating costs (5,643) (348) (5,991) (5,314) - (5,314) (10,648) - (10,648)
Other Gain - - - - 601 601 - 635 635
Profit/(Loss) from operations (4) (348) (352) 1,486 601 2,087 3,676 635 4,311
Profit/(Loss) from operations (4) (348) (352) 1,486 601 2,087 3,676 635 4,311
Depreciation and amortisation 1,248 - 1,248 1,250 - 1,250 2,357 - 2,357
EBITDA 1,244 (348) 896 2,736 601 3,337 6,033 635 6,668
Revenue includes the sale of Accoya®, licence income and other revenue, principally relating to the sale of acetic acid and
other licensing related income.
All costs of sales are allocated against manufacturing activities in Arnhem unless they can be directly attributable to a
licensee. Other operating costs include depreciation of the Arnhem property, plant and equipment together with all other
costs associated with the operation of the Arnhem manufacturing site, including directly attributable administration, sales
and marketing costs.
See note 4 for explanation of Exceptional Items and other adjustments.
Headcount = 102 (2016: 94)
The below table shows details of reconciling items to show both Accoya EBITDA and Accoya Manufacturing gross profit, both
including and excluding licence and licensing related income, which has been presented given the inclusion of items which
can be more variable or one-off.
6 months ending 30 September 2017 6 months ending 30 September 2016 Year Ended 31 March 2017
E'000 E'000 E'000
Accoya segmental underlying EBITDA 1,244 2,736 6,033
Accoya Licence Income - (500) (1,576)
Other income, predominantly for marketing services (133) (177) (338)
Accoya segmental underlying EBITDA (excluding licence income) 1,111 2,059 4,118
Accoya segmental gross profit 5,639 6,800 14,324
Accoya Licence Income - (500) (1,576)
Other income, predominantly for marketing services (133) (177) (338)
Accoya Manufacturing gross profit 5,506 6,123 12,410
Gross Accoya Manufacturing Margin 20% 25% 23%
Tricoya
Tricoya Segment
6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2016 6 months ending 30 September 2016 6 months ending 30 September 2016 12 months ending 31 March 2017 12 months ending 31 March 2017 12 months ending 31 March 2017
Before exceptional items & other adjustments Exceptional items & Other Adjustments Before exceptional items & other adjustments Exceptional items & Other Adjustments
Before exceptional items & other adjustments
TOTAL Exceptional items & Other Adjustments
TOTAL TOTAL
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Tricoya® wood revenue - - - - - - - - -
Licence revenue - - - - - - - - -
Other revenue - - - 23 - 23 30 - 30
Total Revenue - - - 23 - 23 30 - 30
Cost of sales - - - - - - - - -
Gross profit - - - 23 - 23 30 - 30
Other operating costs (1,238) (729) (1,967) (1,231) - (1,231) (1,795) 173 (1,622)
Profit/(Loss) from operations (1,238) (729) (1,967) (1,208) - (1,208) (1,765) 173 (1,592)
Profit/(Loss) from operations (1,238) (729) (1,967) (1,208) - (1,208) (1,765) 173 (1,592)
Depreciation and amortisation 96 - 96 84 - 84 171 - 171
EBITDA (1,142) (729) (1,871) (1,124) - (1,124) (1,594) 173 (1,421)
Revenue and costs are those attributable to the business development of the Tricoya® process and establishment of Tricoya
Hull Plant.
See note 4 for explanation of Exceptional Items and other adjustments.
Headcount = 4 (2016: 4), noting a substantial proportion of the costs to date have been incurred via recharges from other
parts of the Group or have resulted from contractors.
Corporate
Corporate Segment
6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2016 6 months ending 30 September 2016 6 months ending 30 September 2016 12 months ending 31 March 2017 12 months ending 31 March 2017 12 months ending 31 March 2017
Before exceptional items & other adjustments
Exceptional items & Other Adjustments Before exceptional items & other adjustments
Exceptional items & Other Adjustments
Before exceptional items & other adjustments
TOTAL Exceptional items & Other Adjustments
TOTAL TOTAL
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross profit - - - - - - - - -
Other operating costs (2,332) (906) (3,238) (2,604) (303) (2,907) (4,343) (517) (4,860)
Profit/(Loss) from operations (2,332) (906) (3,238) (2,604) (303) (2,907) (4,343) (517) (4,860)
Profit/(Loss) from operations (2,332) (906) (3,238) (2,604) (303) (2,907) (4,343) (517) (4,860)
Depreciation and amortisation 85 - 85 65 - 65 133 - 133
EBITDA (2,247) (906) (3,153) (2,539) (303) (2,842) (4,210) (517) (4,727)
Corporate costs are those costs not directly attributable to Accoya, Tricoya or Research and Development activities. This
includes management and the Group's corporate and general administration costs including the head office in London.
Adjustments to other operating costs all relate to bonus payments made in the current year that were of an exceptional
nature following the completion of the Tricoya consortium and Accsys fund raising. Underlying loss includes an accrual for
bonuses relating to the current financial year, which were previously expensed upon payment in the following financial
year.
Headcount = 19 (2016: 15)
Research and Development
Research & Development Segment
6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2017 6 months ending 30 September 2016 6 months ending 30 September 2016 6 months ending 30 September 2016 12 months ending 31 March 2017 12 months ending 31 March 2017 12 months ending 31 March 2017
Before exceptional items & other adjustments
Exceptional items & Other Adjustments Before exceptional items & other adjustments
Exceptional items & Other Adjustments
Before exceptional items & other adjustments
TOTAL Exceptional items & Other Adjustments
TOTAL TOTAL
E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000 E'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross profit - - - - - - - - -
Other operating costs (685) (159) (844) (724) - (724) (1,763) - (1,763)
Profit/(Loss) from operations (685) (159) (844) (724) - (724) (1,763) - (1,763)
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