REG - Accsys Technologies - Interim Results for period ending 30 September 17 <Origin Href="QuoteRef">ACCS.L</Origin> - Part 3
22/11/2017 07:05
- Part 3: For the preceding part double click ID:nRSV1657Xb
Profit/(Loss) from operations (685) (159) (844) (724) - (724) (1,763) - (1,763)
Depreciation and amortisation 27 - 27 26 - 26 52 - 52
EBITDA (658) (159) (817) (698) - (698) (1,711) - (1,711)
Research and Development costs are those associated with the Accoya® and Tricoya® processes. Costs exclude those which have
been capitalised in accordance with IFRS. (see note 7).
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 = 10 (2016: 12)
Total
TOTAL
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 2,025 - 2,025 4,298 - 4,298
Total Revenue 28,306 - 28,306 25,059 - 25,059 56,529 - 56,529
Cost of sales (22,667) - (22,667) (18,236) - (18,236) (42,175) - (42,175)
Gross profit 5,639 - 5,639 6,823 - 6,823 14,354 - 14,354
Other operating costs (9,900) (2,141) (12,041) (9,873) (303) (10,176) (18,551) (343) (18,894)
Other Gain - - - - 601 601 - 635 635
Profit/(Loss) from operations (4,261) (2,141) (6,402) (3,050) 298 (2,752) (4,197) 292 (3,905)
Finance income - - - 1 - 1 2 - 2
Finance expense (981) 564 (417) (104) - (104) (302) (258) (560)
Loss before taxation (5,242) (1,577) (6,819) (3,153) 298 (2,855) (4,497) 34 (4,463)
Profit/(Loss) from operations (4,261) (2,141) (6,402) (3,050) 298 (2,752) (4,197) 292 (3,905)
Depreciation and amortisation 1,455 - 1,455 1,423 - 1,423 2,712 - 2,712
EBITDA (2,806) (2,141) (4,947) (1,627) 298 (1,329) (1,485) 292 (1,193)
Adjustments to finance expense relate to the revaluation of the Accsys Technologies loan notes with Business Growth Fund
('BGF') and 1798 Volantis Catalyst Fund II ('Volantis'), which are denominated in pounds sterling. These relate to the
pounds sterling held within the Tricoya segment, of which the corresponding foreign currency translation differences are
shown as adjustments to other operating costs.
Assets and liabilities cannot be readily allocated to the four segments and therefore no additional segmental information
has been disclosed.
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
E'000 E'000 E'000
UK and Ireland 11,387 10,577 25,307
Rest of Europe 7,113 5,924 12,984
Benelux 3,455 3,762 7,992
Americas 3,814 2,849 5,810
Asia-Pacific 2,333 1,814 4,009
Rest of World 204 133 427
28,306 25,059 56,529
The segmental assets in the current and previous periods were predominantly held in Europe. Additions to property, plant,
equipment and intangible assets in the current and previous periods were predominantly incurred in Europe. Sales to UK and
Ireland included the sales to Medite.
3. Other operating costs
Other operating costs consist of the operating costs, other than the cost of sales, associated with the operation of the
plant in Arnhem and the offices in Dallas and London.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
E'000 E'000 E'000
Sales and marketing 2,083 2,006 3,773
Research and development 685 571 1,711
Depreciation and amortisation 1,455 1,423 2,713
Other operating costs 2,072 2,259 3,243
Administration costs 3,605 3,614 7,111
Exceptional Items and other adjustments 2,141 303 343
12,041 10,176 18,894
Administrative costs include costs associated with Business Development and Legal departments, Intellectual Property as
well as Human Resources, IT, Finance, Management and General Office and include the costs of the Group's head office costs
in London and the US office in Dallas.
The total cost of E12,041k in the current period includes E1,967k in respect of Tricoya segment, compared to E1,231k in the
previous period.
Group average headcount decreased from 125 in the period to 30 September 2016, to 124 in the period to 31 March 2017 and
then increased to 135 in the period to 30 September 2017.
During the period E212k of costs were capitalised and are included within intangible fixed assets (2016: E241k). In
addition E260k of development costs have been capitalised and are included within tangible fixed assets (2016: E286k) in
relation to the expansion of the manufacturing facility in Arnhem.
4. Exceptional Items and Other Adjustments
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
E'000 E'000 E'000
Bonuses paid relating to year ending 31 March 2017 (1,373) - -
Restructuring costs (231) - -
Gain from disposal of land - 601 635
Business Development advisory fees - (303) (517)
Total exceptional items (1,604) 298 118
Foreign exchange differences arising on Tricoya cash held - Operating costs (537) - 174
Foreign exchange differences arising on Loan Notes - incl. in Finance expense 564 - (258)
Foreign exchange differences on Tricoya cash held - Other comprehensive income 97 - 104
Total other adjustments 124 - 20
Tax on exceptional items and other adjustments 20 - -
Total exceptional items and other adjustments (1,460) 298 138
Prior year has been restated to reflect the adoption of IFRS 9 and to represent exceptional and other adjustments on a
consistent basis.
Exceptional Items
E1,373k annual bonus paid in the current year which was attributable to the year ended 31 March 2017 with the accrual for
the current year bonus included in underlying operating costs. This double charge in the period results from a re-alignment
of the timing of recognition of bonuses reflecting the more structured annual bonus scheme now in place compared to
previous years. In addition the bonus paid in the current period relating to the year ended 31 March 2017 included one-off
targets relating to the formation of the Tricoya consortium. This is split between all segments, including E293k in Accoya,
E124k in Tricoya, E889k Corporate and E67k in R&D.
Other restructuring costs relate to changes required following the completion of the Tricoya consortium in March 2017. This
is split between all segments, including E54k in Accoya, E67k Tricoya, E18k Corporate and E92k R&D.
Agreements were reached in August 2016 for the sale and leaseback for the land in Arnhem resulting in proceeds of E4.2m
received in the prior period. A resulting gain of E635k was recognised in the previous year as a result of the book value
of the land being lower than the sale price. The full amount relates to the Accoya segment.
Business Development advisory fees were incurred during the prior year as the Group pursued a one-off long-term
opportunity. The full amount relates to the corporate segment.
Other Adjustments
Foreign exchange differences in the Tricoya segment have occurred due to pounds sterling held within the consortium in
preparation for the Hull Plant build. The Group has mitigated this currency exchange risk by adopting hedge accounting in
respect of the Tricoya plant construction under IFRS 9, Financial Instruments. The prior year has also been represented and
restated to highlight the comparative impact in the prior year.
Foreign exchange differences also arise on the pounds sterling denominated loan notes, entered into in the prior period.
These exchange rate differences are included as finance expenses. The prior year has also been represented to reflect the
comparative impact in the prior year.
5. Loss per share
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
Basic and diluted loss per share 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March
2017 2017 2016 2016 2017 2017
(restated) (restated) (restated) (restated)
Before Exceptional Items Total Before Exceptional Items Total Before Exceptional Items Total
Weighted average number of
Ordinary shares in issue ('000)
111,083 111,083 90,248 90,248 90,442 90,442
Loss for the period (E'000) (4,827) (6,316) (3,483) (3,186) (4,950) (4,986)
Basic and diluted loss per share E (0.04) E (0.06) E (0.04) E (0.04) E (0.05) E (0.06)
Basic and diluted losses per share are based upon the same figures. Share options are considered anti-dilutive as these
would decrease the loss per share.
6. Tricoya Technologies Limited
Tricoya Technologies Limited ("TTL") was incorporated in order to develop and exploit the Group's Tricoya technology for
use within the worldwide panel products market, which is estimated to be worth more than E60 billion annually.
On 29 March 2017 the Group announced the entry into and successful completion of its agreements for the financing,
construction and operation of the world's first Tricoya wood elements acetylation plant in Hull with its TTL consortium
investors, being BP, Medite, BGF and Volantis.
The Hull plant will have an initial production capacity of 30,000 tonnes per annum (sufficient to manufacture 40,000 cubic
meters of panels) and scope to expand.
Structurally, Accsys, BP Ventures, Medite, BGF and Volantis have invested into TTL. TTL has then invested, alongside BP
Chemicals and Medite, in Tricoya Ventures UK Limited ("TVUK"), a special purpose subsidiary of TTL that will construct, own
and operate the Hull Plant.
BP will invest E20.3 million in the Tricoya Project, including E13.7 million as equity in TVUK by BP Chemicals and E6.6
million as equity in TTL by BP Ventures. All funding was received by 30 September 2017, except for E2.3 million received
from BP Chemicals in October 2017.
Medite will invest E11 million in the Tricoya Project, including E7 million as equity in TTL and E4 million as equity in
TVUK. All funding was received by 30 September 2017, except for E0.6 million received in October 2017.
The Group is expected to increase its total equity interest in TTL to 75.9% over the next two years as a result of its
continued supply of lower priced Accoya® to Medite to enable continued market development ahead of the completion of the
Hull Plant. During the period the Group increased its shareholding from 74.6% to 74.8% from the issue of 284,716 shares
related to this market seeding activity.
BGF and Volantis have invested an aggregate of £19 million as financial investors into both the Group and TTL. BGF and
Volantis invested on similar terms but are investing separately, with BGF accounting for 65% of the £19 million total.
In addition, TVUK has entered a six-year E17.2 million (E15 million net) finance facility agreement with The Royal Bank of
Scotland Plc in respect of the construction and operation of the Hull Plant. As at 30 September 2017 the Group have
utilised E161k of the facility in relation to fees incurred.
The Group has consolidated the results of TTL and TVUK as subsidiaries, as it exercises the power to govern the entities in
accordance with IFRS 10 guidance. The non-controlling interests in both entities have been recognised in these Group
financial statements.
The "TTL Group" income statement and balance sheet, consisting of TTL and its subsidiary TVUK, are set out on the following
page:
TTL Group income statement:
Consolidated Consolidated Consolidated
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
E'000 E'000 E'000
Licence revenue - - -
Other income - 23 -
Total revenue - 23 -
Costs:
Staff costs (946) (814) (1,145)
Research & development (excluding staff costs) (103) (108) (200)
Intellectual Property (105) (338) (606)
Other (294) (26) (289)
Exceptional Items (440) - 277
Depreciation and Amortisation (96) (84) (171)
EBIT (1,984) (1,347) (2,134)
EBIT attributable to Accsys shareholders (1,420) (1,305) (1,991)
Exceptional items include foreign exchange differences relating to pounds sterling balances held by the Group (see note
4).
TTL Group balance sheet at 30 September 2017:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
E'000 E'000 E'000
Non-current assets
Intangible assets 3,334 3,192 3,246
Property, Plant and Equipment 4,418 - 1,440
7,752 3,192 4,686
Current assets
Trade and other receivables 865 160 612
Cash and cash equivalents 42,492 298 36,386
43,357 458 36,998
Current liabilities
Trade and other payables (2,817) (1,794) (3,306)
Intercompany balance non TTL/TVUK (833) (610) (594)
(3,650) (2,404) (3,900)
Non-current liabilities
Long term borrowing (161) - -
(161) - -
Net current assets 39,707 (1,946) 33,098
Net assets 47,298 1,246 37,784
Value attributable to Accsys Technologies 20,428 1,209 25,164
7. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
E'000 E'000 E'000 E'000
Cost
At 31 March 2016 5,528 73,292 4,231 83,051
Additions 241 - - 241
At 30 September 2016 5,769 73,292 4,231 83,292
Additions 173 - - 173
At 31 March 2017 5,942 73,292 4,231 83,465
Additions 212 - - 212
At 30 September 2017 6,154 73,292 4,231 83,677
Accumulated amortisation
At 31 March 2016 607 71,464 - 72,071
Amortisation 138 138 - 276
At 30 September 2016 745 71,602 - 72,347
Amortisation 142 137 - 279
At 31 March 2017 887 71,739 - 72,626
Amortisation 151 138 - 289
At 30 September 2017 1,038 71,877 - 72,915
Net book value
At 30 September 2017 5,116 1,415 4,231 10,762
At 31 March 2017 5,055 1,553 4,231 10,839
At 30 September 2016 5,024 1,690 4,231 10,945
8. Property, plant and equipment
Land and buildings Plant and machinery Office equipment Total
E'000 E'000 E'000 E'000
Cost or valuation
At 31 March 2016 5,251 30,725 1,238 37,214
Additions - 1,343 53 1,396
Disposals (3,606) (64) - (3,670)
Foreign currency translation gain - - 2 2
At 30 September 2016 1,645 32,004 1,293 34,942
Additions - 5,759 79 5,838
Disposals - (7) - (7)
Foreign currency translation gain - - 7 7
At 31 March 2017 1,645 37,756 1,379 40,780
Additions - 7,360 71 7,431
Foreign currency translation (loss) - - (5) (5)
At 30 September 2017 1,645 45,116 1,445 48,206
Depreciation
At 31 March 2016 541 15,568 833 16,942
Charge for the period 59 947 84 1,090
Disposals - (6) - (6)
Foreign currency translation gain - - 2 2
At 30 September 2016 600 16,509 919 18,028
Charge for the period 58 922 86 1,066
Disposals - (3) - (3)
Foreign currency translation gain - - 8 8
At 31 March 2017 658 17,428 1,013 19,099
Charge for the period 59 1,005 103 1,167
Disposals - - - -
Foreign currency translation (loss) - - (13) (13)
At 30 September 2017 717 18,433 1,103 20,253
Net book value
At 30 September 2016 1,045 15,495 374 16,914
At 31 March 2017 987 20,328 366 21,681
At 30 September 2017 928 26,683 342 27,953
Included within property, plant and equipment are assets with an initial cost of E7,787,000 and a net book value at 30
September 2017 of E4,477,000 which has been accounted for as a finance lease. Assets with a net book value of E22.4m are
subject to security agreements associated with the Rhodia Acetow loan facility.
Included within property, plant and equipment are also assets under construction of E14,649,000 which are not being
depreciated (2016: E2,266,000)
9. Share capital
In the period ended 30 September 2016:
Own shares represents 673,355 Ordinary Shares issued to the Employee Benefit Trust ('EBT') at nominal value on 4 July
2016.
In addition, of the Ordinary Shares which had been issued to the EBT in the previous year, 938,449 Ordinary Shares vested
on 15 July 2016. Of these beneficiaries elected to sell 498,318 Ordinary Shares in the market.
On 15 August 2016, a total of 63,909 Ordinary Shares were issued and released to various employees under the terms of the
Employee Share Participation Plan.
In the period ended 31 March 2017:
On 9 February 2017, a total of 16,302 Ordinary Shares were issued and released to various employees under the terms of the
Employee Share Participation Plan.
In the period ended 30 September 2017:
On 24 April 2017, following the publication of a prospectus for the Firm Placing and Open Offer, the Company issued a total
of 20,323,986 Ordinary Shares for E0.69 each to a combination of new and existing shareholders. Proceeds of E14,024,000
were received net of expenses of E1,757,000.
Own shares represents 97,720 Ordinary Shares issued to the EBT at nominal value on 23 June 2017 and 198,154 Ordinary Shares
issued to the EBT at nominal value on 27 September 2017..
In addition, of the Ordinary Shares which had been issued to the EBT in the previous year, 679,435 Ordinary Shares vested
on 11 July 2017. Of these beneficiaries elected to sell 405,169 Ordinary Shares in the market.
On 27 September 2017, the Company issued a total of 106,189 Ordinary Shares were issued and released to an employee
following the exercise of options granted in a prior year.
10. Other Reserves
Capital redemp- Merger reserve Hedging Effective-ness reserve Other reserve Total Other reserves
tion reserve
E000 E000 E000 E000 E000
Balance at 30 September 2016 (171) 106,707 - 885 107,421
Issue of subsidiary shares to non-controlling interests 319 - - 6,192 6,511
Issue of subsidiary shares to Group companies - - - (576) (576)
Other Comprehensive Income - - 104 - 104
Balance at 31 March 2017 148 106,707 104 6,501 113,460
Issue of subsidiary shares to non-controlling interests - - - (3,316) (3,316)
Other Comprehensive Income - - 97 - 97
Balance at 30 September 2017 148 106,707 201 3,185 110,241
The closing balance of the capital redemption reserve represents the amounts transferred from share capital on redemption
of deferred shares in a previous period. The movement in the Year ending 31st March 2017 reflects an obligation which
ceased following investment by BP Ventures into Tricoya Technologies Limited upon the finalisation of the full consortium.
The merger reserve arose prior to transition to IFRS when merger accounting was adopted.
The hedging effectiveness reserve reflects the total accounted for under IFRS 9 in relation to the Tricoya segment (note
1).
The other reserve represents the amounts received for subsidiary share capital from non-controlling interests (note 11).
11. Transactions with non-controlling interests
In the period ended 31 March 2017:
On 29 March 2017 and earlier in the prior financial year, TTL issued Series A Preference shares and transferred Ordinary
shares to non-controlling interests for consideration of E15.79 million, resulting in the following non-controlling
shareholdings:
BP Ventures (9.0%), Medite (12.1%), BGF, (2.8%), Volantis (1.5%)
On 29 March 2016, Tricoya Ventures UK Limited ('TVUK') issued Ordinary shares to non-controlling interests for
consideration of E3.26 million, resulting in the following shareholdings:
BP Chemicals (30%), Medite (8.2%)
The total carrying amount of the non-controlling interests in TTL and TVUK at 31 March 2017 was E12.62 million.
In the period ended 30 September 2017:
On 5 September 2017, TTL issued 284,716 shares to Titan Wood Limited. As a result the non-controlling interests
shareholdings were amended to:
BP Ventures (8.9%), Medite (12.0%), BGF, (2.8%), Volantis (1.5%)
On 20 September 2017, Tricoya Ventures UK Limited ('TVUK') issued Ordinary shares to non-controlling interests for
consideration of E11.50 million, resulting in no change to shareholdings.
The total carrying amount of the non-controlling interests in TTL and TVUK at 30 September 2017 was E22.57 million.
The Group recognised an increase in other reserves as summarised below.
Transactions with non-controlling interests Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
E'000 E'000 E'000
Opening balance 7,077 - 885
Carrying amount of non-controlling interests issued (14,814) 885 (12,702)
Consideration paid by non-controlling interests 11,498 - 19,123
Share issue costs relating to non-controlling interests - - (229)
Excess of consideration paid recognised in Group's equity 3,761 885 7,077
12. Events occurring after the reporting period
On 6 October 2017, TVUK issued further shares for the consideration of E7.6m. E4.7m was contributed by TTL with E2.3m
contributed by BP Chemicals and E0.6m contributed by Medite (see note 6).
Independent review report to Accsys Technologies PLC
Report on the consolidated interim financial statements
Our conclusion
We have reviewed Accsys Technologies PLC's consolidated interim financial statements (the "interim financial statements")
in the interim results for the six months ended 30 September 2017 of Accsys Technologies Plc for the 6 month period ended
30 September 2017. Based on our review, nothing has come to our attention that causes us to believe that the interim
financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
· the consolidated interim statement of financial position as at 30 September 2017;
· the consolidated interim statement of comprehensive income for the period then ended;
· the consolidated interim statement of cash flows for the period then ended;
· the consolidated interim statement of changes in equity for the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the interim results for the six months ended 30 September 2017 have been
prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European
Union and the AIM Rules for Companies.
As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the
preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim results for the six months ended 30 September 2017, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim results
for the six months ended 30 September 2017 in accordance with the AIM Rules for Companies which require that the financial
information must be presented and prepared in a form consistent with that which will be adopted in the Company's annual
financial statements.
Our responsibility is to express a conclusion on the interim financial statements in the interim results for the six months
ended 30 September 2017 based on our review. This report, including the conclusion, has been prepared for and only for the
Company for the purpose of complying with the AIM Rules for Companies and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board
for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK)
and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might
be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim results for the six months ended 30 September 2017 and
considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim
financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
21 November 2017
a) The maintenance and integrity of the Accsys Technologies PLC website is the responsibility of the directors; the
work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the interim financial statements since they were initially
presented on the website.
b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
This information is provided by RNS
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