- Part 2: For the preceding part double click ID:nRSV7635Pa
Other operating costs (6,308) (5,420) (10,063)
Loss from operations (5,594) (3,215) (4,641)
Loss from Operations (5,594) (3,215) (4,641)
Depreciation and amortisation 341 281 609
EBITDA (5,253) (2,934) (4,032)
Manufacturing
Revenue 24,345 24,089 47,347
Cost of sales (18,236) (16,916) (34,597)
Gross profit/(loss) 6,109 7,173 12,750
Other operating costs (3,297) (3,205) (6,487)
Other gain 601 - -
Profit/(loss) from operations 3,413 3,968 6,263
Profit/(loss) from operations 3,413 3,968 6,263
Depreciation and amortisation 1,057 1,022 2,016
EBITDA 4,470 4,989 8,279
Research and development
Revenue - - -
Cost of sales - - -
Gross profit/(loss) - - -
Other operating costs (571) (764) (1,910)
Loss from operations (571) (764) (1,910)
Loss from Operations (571) (764) (1,910)
Depreciation and amortisation 26 23 47
EBITDA (545) (741) (1,863)
Total
Revenue 25,059 26,294 52,769
Cost of sales (18,236) (16,916) (34,597)
Gross profit/(loss) 6,823 9,378 18,172
Other operating costs (10,176) (9,389) (18,460)
Other gain 601 - -
Loss from operations (2,752) (11) (288)
Finance income 1 17 13
Finance expense (104) (98) (191)
Loss before taxation (2,855) (92) (466)
Loss from Operations (2,752) (11) (288)
Depreciation and amortisation 1,423 1,325 2,672
EBITDA (1,329) 1,314 2,384
Licensing, Management and Business Development
Revenue is attributable to the licensing of the Group's technology to third
parties and other monies received in respect of its business development
activities.
Other operating costs include all remaining costs unless they are directly
attributable to Manufacturing or Research and Development. This includes
marketing, business development and the majority of the Group's administration
costs including the head office in London (previously Windsor) as well as the
US office.
Headcount = 27 (2015: 22)
Manufacturing
Revenue includes the sale of Accoya® and other revenue, principally relating
to the sale of acetic acid. All costs of sales are allocated against
manufacturing activities unless they can be directly attributable to a
licensee.
Other operating costs include depreciation of the Accoya plant all other costs
associated with the operation of the manufacturing site, including directly
attributable administration costs.
Headcount = 86 (2015: 84)
Research and Development
Costs are associated with various R&D activities associated with Accoya® and
Tricoya® products and processes.
Headcount = 12 (2015: 13)
Assets and liabilities cannot be readily allocated to the three 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
2016 2015 2016
E'000 E'000 E'000
UK and Ireland 10,577 9,571 21,426
Rest of Europe 5,924 7,868 14,085
Benelux 3,762 3,904 7,764
Americas 2,849 2,449 4,846
Asia-Pacific 1,814 2,345 4,382
Rest of World 133 156 266
25,059 26,294 52,769
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 (previously Windsor).
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
E'000 E'000 E'000
Sales and marketing 2,006 1,805 3,743
Research and development 571 764 1,863
Depreciation and amortisation 1,423 1,326 2,672
Other operating costs 2,259 2,097 3,554
Administration costs 3,917 3,397 6,628
10,176 9,389 18,460
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 (previously Windsor) and the US office in Dallas.
The total cost of E10.2m in the current period includes E1.4m in respect of
Tricoya Technologies Limited ('TTL') compared to E0.9m in the previous
period.
The Group headcount increased from 119 during period to 30 September 2015 to
121 during period to 31 March 2016 and then to 125 to period to 30 September
2016.
During the period E0.2m of costs were capitalised and are included within
intangible fixed assets (2015: E1.2m). In addition E0.3m of development costs
have been capitalised and are included within tangible fixed assets (2015:
E0.5m) in relation to the expansion of the manufacturing facility in Arnhem.
The previous period figure includes E1m in respect of the Tricoya® Front End
Engineering and Design Package.
4. Other gains
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
E'000 E'000 E'000
Gain from disposal of land 635 - -
Net gain/(loss) from disposal of equipment (34) - -
601 - -
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 period. A resulting
gain of E635,000 was recognised as a result of the book value of the land
being lower than the sale price. Under the arrangements, the landlord has
agreed to construct a new warehouse and office building which will be
connected to Accsys's existing manufacturing site. This building will be built
by the landlord and leased to Accsys over a 20 year period with further option
to renew. The landlord is the same landlord that Accsys sold land and
buildings to in 2011 and 2012 associated with the existing manufacturing
plant.
5. Loss per share
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
Basic and diluted loss per share 30 Sept 30 Sept 31 March
2016 2015 2016
Total Total Total
Weighted average number of
Ordinary shares in issue ('000)
90,248 89,287 89,568
Loss for the period (E'000) (3,186) (332) (858)
Basic and diluted loss per share E(0.04) E(0.00) E(0.01)
Basic and diluted losses per share are based upon the same figures. Share
options are considered anti-dilutive as these would increase the loss per
share.
6. Tricoya Technologies Limited
Tricoya Technologies Limited ('TTL'), was incorporated in order to develop and
exploit Accsys' Tricoya technology for use within the worldwide panel products
market estimated to be worth more than E60 billion annually.
In February 2016 BP's participation in the proposed consortium (the
'Consortium') to fund, build and operate the world's first Tricoya® wood
elements acetylation plant was announced. Accsys and BP Ventures ('BPV')
agreed initial funding in respect of the Consortium, with BPV acquiring an
initial 3% equity interest in Tricoya Technologies Limited ('TTL'), implying a
valuation of TTL at E35 million today. The plant is expected to be located at
the Saltend Chemicals Park in Hull, UK, adjacent to BP's existing acetyls
facility.
Since then, significant progress has been made with our Consortium partners,
BP and Medite, in respect of detailed planning and the agreements associated
with the Consortium and the proposed wood chip acetylation plant. The Hull
plant will have an initial capacity of 30,000 tonnes per annum (tpa)
(sufficient to manufacture 40,000m³ of panels) with scope for expansion. A
minimum of 40% of the plant's output is expected to be sold to Medite under
committed take-or-pay agreements, which corresponds to break-even cash flow
level. The plant is expected to cost approximately E62m, with a further E14m
required for continued market seeding, operations, marketing, IP development
and engineering functions.
Final agreements relating to the Consortium, the site, the supply of chemicals
from BP and the off-take agreement with Medite are expected to be completed by
the end of the year. BP and Medite are also expected to invest a total of E30m
with the remainder funded by third parties, including bank debt. In this
respect, the Consortium has also made good progress on securing finance with
term sheets received from a number of providers of project finance debt and
heads of terms agreed with further third party providers of finance which is
expected to result in sufficient funding to allow the Consortium to be
completed.
Subsequent to the period end, the Consortium parties agreed further interim
funding to enable the next stages of the project to progress, including the
land clearance of the site in Hull and initial steps associated with the
detailed engineering.
There was increased activity in the current period in relation to preparing to
commence detailed work following completion of the Consortium agreements. The
increased cost consists of higher staff costs, research and development and
Intellectual Property.
During the period ended 30 September 2016, TTL has been fully consolidated and
the results are included as part of the overall group results and included
within the Business Development segment as set out in Note 2.
Subsequent to the period end, the Consortium parties agreed further interim
funding to enable the next stages of the project to progress, including the
land clearance of the site in Hull and initial steps associated with the
detailed engineering.
The TTL results for the period from 1 April 2016 to 30 September 2016,
together with the balance sheet as at 30 September 2016 are set out below:
Income statement for TTL:
Consolidated Consolidated Consolidated
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
E'000 E'000 E'000
Licence revenue - 75 75
Other income 23 30 243
Total revenue 23 105 318
Costs:
Staff costs 814 612 864
Research & development (excluding staff costs) 38 60 142
Intellectual Property 338 151 303
Sales & marketing 26 18 214
Amortisation 84 66 143
Total operating costs 1,300 907 1,666
Finance income - - -
EBIT 1,277 802 1,348
Group share of EBIT 1,235 802 1,338
Tricoya Technologies Limited statement of financial position at 30 September
2016:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2016 2015 2016
E'000 E'000 E'000
Non-current assets
Intangible assets 3,192 2,899 3,065
Current assets
Receivables due within one year 160 160 230
Cash and cash equivalents 298 117 1,519
Total current assets 458 277 1,749
Current liabilities
Trade and other payables (2,404) (2,099) (2,220)
Net current assets (1,946) (1,822) (471)
Net assets 1,246 1,078 2,594
97% attributable to Accsys Technologies 2016 (2015: 100%) 1,209 1,078 2,517
Less elimination of mark-up on recharged costs - (14) -
Equity and reserves
Share capital 8,206 5,900 8,206
Accumulated loss (7,560) (5,422) (6,212)
Other reserves 600 600 600
Total equity 1,246 1,078 2,594
Intangible assets represents internal development costs capitalised relating
to the development of the Tricoya product and production process, including
Front End Engineering and Design which has been undertaken in the period in
respect of the first Tricoya production plant envisaged to be funded,
constructed and operated by the proposed new Consortium.
7. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
E'000 E'000 E'000 E'000
Cost
At 31 March 2015 4,037 73,292 4,231 81,560
Additions 1,206 - - 1,206
At 30 September 2015 5,243 73,292 4,231 82,766
Additions 285 - - 285
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
Accumulated amortisation
At 31 March 2015 358 71,188 - 71,546
Amortisation 117 138 - 255
At 30 September 2015 475 71,326 - 71,801
Amortisation 132 138 270
At 31 March 2016 607 71,464 - 72,071
Amortisation 138 138 276
At 30 September 2016 745 71,602 - 72,347
Net book value
At 30 September 2016 5,024 1,690 4,231 10,945
At 31 March 2016 4,921 1,828 4,231 10,980
At 30 September 2015 4,768 1,966 4,231 10,965
At 31 March 2015 3,679 2,104 4,231 10,014
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 2015 5,251 28,365 822 34,438
Additions - 682 46 728
Disposals - - (12) (12)
Foreign currency translation (loss) - - (7) (7)
At 30 September 2015 5,251 29,047 849 35,147
Additions - 1,792 389 2,181
Disposals - (114) 1 (113)
Foreign currency translation gain - - (1) (1)
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 (loss) - - 2 2
At 30 September 2016 1,645 32,004 1,293 34,942
Depreciation
At 31 March 2015 424 13,732 734 14,890
Charge for the period 59 971 45 1,075
Disposals - - (12) (12)
Foreign currency translation (loss) - - (7) (7)
At 30 September 2015 483 14,703 760 15,946
Charge for the period 58 941 74 1,073
Disposals - (76) - (76)
Foreign currency translation gain - - (1) (1)
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 (loss) - - 2 2
At 30 September 2016 600 16,509 919 18,028
Net book value
At 31 March 2015 4,827 14,633 88 19,548
At 30 September 2015 4,768 14,344 89 19,201
At 31 March 2016 4,710 15,157 405 20,272
At 30 September 2016 1,045 15,495 374 16,914
9. Share capital
In the period ended 30 September 2015:
Own shares represents 786,893 ordinary shares of E0.05 each in the capital of
the Company ("Ordinary Shares") issued to an Employee Benefit Trust ('EBT') at
nominal value on 30 June 2015.
On 6 July 2015, a total of 20,000 Ordinary Shares were issued to employees
under the Company's share option scheme.
In addition, of the 783,597 Ordinary Shares which had been issued to the EBT
at nominal value on 18 August 2014, 746,241 Ordinary Shares vested on 1 July
2015. Of these beneficiaries elected to sell 390,683 Ordinary Shares in the
market.
On 8 August 2015, a total of 27,825 Ordinary Shares were issued and released
to employees together with the 22,825 Ordinary Shares issued to an employee
trust on 8 August 2014 under the terms of the Employee Share Participation
Plan (the "Trust").
On 13 August 2015, a total of 63,909 Ordinary Shares were issued to a trust
under the terms of the Trust.
In the period ended 31 March 2016:
On 10 December 2015, a total of 16,123 Ordinary Shares were issued to a Trust
under the terms of the Employee Share Participation Plan.
In the period ended 31 September 2016:
Own shares represents 673,355 Ordinary Shares issued to the EBT at nominal
value on 4 July 2016.
In addition, of the Ordinary Shares which had been issued to the EBT 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.
10. Other Reserves
Capital redemp- Warrant reserve Merger reserve Other reserve Total Other reserves
tion reserve
E000 E000 E000 E000 E000
Balance at 30 September 2015 148 - 106,707 - 106,855
Issue of subsidiary shares to non-controlling interests (299) - - 885 586
Balance at 31 March 2016 (151) - 106,707 885 107,441
Adjustment to liability relating to non-controlling interests (20) - - - (20)
Balance at 30 September 2016 (171) - 106,707 885 107,421
The opening balance from September 2015 of the capital redemption reserve
represents the amounts transferred from share capital on redemption of
deferred shares in a previous period. The movement for the year ended 31 March
2016 and in the
current period reflects obligations arising from the investment by BP Ventures
into Tricoya Technologies Limited and that BP Venture's on-going participation
is conditional upon the finalisation of the full proposed Consortium.
The merger reserve arose prior to transition to IFRS when merger accounting
was adopted.
The other reserve represents the amounts received for subsidiary share capital
from non-controlling interests (note 11).
11. Transactions with non-controlling interests
On 3 February 2016, TTL issued 500,000 Series A Preference shares for the
consideration of E1m for 3% equity share capital of TTL. The carrying amount
of the non-controlling interests in TTL on the date of acquisition was
E71,000. The Group recognised an increase in other reserves in the prior
period, 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
2016 2015 2016
E'000 E'000 E'000
Carrying amount of non-controlling interests issued 885 - (71)
Consideration paid by non-controlling interests - - 1,000
Share issue costs relating to non-controlling interests - - (44)
Excess of consideration paid recognised in Group's equity 885 - 885
12. Events occurring after the reporting period
On 24 October 2016, TTL issued further shares for the consideration of E1m.
E0.4m was contributed by Accsys with E0.6m contributed by BP Ventures,
bringing their total investment to E1.6m.
Accsys Technologies PLC
Independent review report to Accsys Technologies PLC
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 2016 of Accsys Technologies Plc for the 6 month
period ended 30 September 2016. 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 2016;
· 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 2016 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.
Our responsibilities and those of the directors
The interim results for the six months ended 30 September 2016, including the
interim financial statements, is the responsibility of, and has been approved
by, the directors of the Company. The directors are responsible for preparing
the interim results for the six months ended 30 September 2016 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 2016
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 Ireland) 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 2016 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 2016
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