REG - Accsys Technologies - Interim results for six months ended 30 Sep 2024
26/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241126:nRSZ5913Na&default-theme=true
RNS Number : 5913N Accsys Technologies PLC 26 November 2024
AIM: AXS
Euronext Amsterdam: AXS
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Accsys Technologies PLC
("Accsys", the "Group" or the "Company")
Interim results for the six months ended 30 September 2024
Clear strategic progress, significant increase in Adjusted EBITDA and 10%
increase in total sales volumes
Accsys, the world's leading supplier of premium, high performance and
sustainable wood building materials, today announces its unaudited interim
results for the six months to 30 September 2024 (H1 FY25).
H1 FY25
H1 FY24 Change
Revenue
Group €72.2m €71.2m +1%
Aggregated (Group plus JV) (1) €74.1m €71.2m +4%
Gross profit €22.2m €20.3m +9%
Gross margin 30.7% 28.6% +210bp
Adjusted EBITDA(2) €4.0m €1.6m +€2.4m
Period end net debt(3) (€40.2m) (€48.2m) +€8.0m
Sales Volumes m³
Arnhem 30,372m(3) 28,807m(3) +5%
Total Arnhem and JV 31,553m(3) 28,807m(3) +10%
Notes
(1) Accsys has a 60% shareholding in Accoya USA, a joint venture (JV) with
Eastman Chemical Company which commenced operations during H1 FY25. Whilst the
JV is equity accounted for financial reporting purposes, the aggregated
revenue figure includes 60% of the JV revenue
(2) Adjusted EBITDA is defined as operating profit/(loss) before exceptional
items and other adjustments, depreciation and amortisation, and includes the
Group's 60% share of the JV's EBITDA. (See note 2 to the financial
statements).
(3) Net debt at 31 March 2024 was €37.1m.
Dr Jelena Arsic van OS, CEO Accsys Technologies PLC said:
"Our results show strong progress. The transformation programme and the
actions we have put in place are working. Accsys is continuing its growth
momentum, delivering double digit growth in a relatively soft building
materials market. At the same time the Group is materially improving
profitability, and cash conversion. The Group is now better positioned to
fulfil its attractive market potential.
Accsys has moved beyond its peak investment period. In H1, we have simplified
and derisked the Group through the successful start-up of the Kingsport plant
and the decision to discontinue the project in Hull. We are accelerating sales
and marketing activities, and an operational turnaround is in progress.
As we look ahead, we are excited and pleased to upgrade guidance for the year.
With our US facility fully operational, we have greater capacity to serve our
customers in one of the world's most attractive markets with our industry
leading wood building products. Our increased capacity and product
availability mean we are in a strong position to capitalise on the anticipated
improvement in market conditions as it occurs and deliver on our medium-term
ambition of 100,000m³ sales volume."
Financial overview
· 10% increase in total Accoya sales volumes at 31,553m(3) (H1
FY24: 28,807m³) reflecting robust customer demand for our materials despite
continued challenging market conditions in the global construction and
building materials sectors
o North America sales volumes showed impressive growth of 18% year on year
at 4,983m³, highlighting growth potential for the newly operational Kingsport
site
o Volumes in regions outside of the US are up +8%, driven by robust
performances in the UK, France, Benelux, and ROW
o Accoya for Tricoya sales volumes are up 7% year-on-year, underlining
Tricoya's long-term potential
· 4% growth in aggregated revenue (inclusive of JV) at €74.1m
o Revenue growth driven by increased sales volumes across regions, with
average sales price across the mix maintained at a high level.
o Aggregated wood revenue increased by 7%, partially offset by a reduction
in non-wood revenues, primarily acetic acid sales, which have a natural hedge
against acetyls purchasing.
· Gross margins exceeding 30% target
o 9% increase in gross profit driven by increased sales volumes and
optimisation of wood procurement
· €2.4m growth in adjusted EBITDA to €4.0m, driven by robust
demand, pricing discipline and 22% reduction in underlying operating costs
o Business transformation programme delivered €2.5m savings compared to H1
FY24
o Additionally, lower operating costs in Hull contributed to a €1.4m
saving compared to H1 FY24
· €3.3m increase in US JV EBITDA loss (to €4.3m) compared to H1
FY24 (€1.0m) as Accoya USA concluded its pre-operating activity and
initiated commercial operations in the period
· Tricoya UK resolves to enter creditors voluntary liquidation with
an exceptional restructuring cost of €3.9m recognised in the period and a
final exceptional non-cash impairment charge of €18m.
o Annual operating cost savings of €3m are expected from the Hull plant
closure.
· Large capital expenditure projects now complete, derisking the
business and moving past the point of peak investment
· Net debt at 30 September of €40.2m, an increase of €3.1m from
the end of the last financial year, primarily due to planned investments of
€7.2m into the US joint venture
Operational highlights
· Good progress made on FY25 operational targets:
o Accoya USA site: The joint venture Accoya production facility in
Kingsport, Tennessee is now commercially operational
o Operational efficiencies: the Solid Roots program is on track to deliver a
500 basis points improvement in overall equipment effectiveness (OEE) at our
Arnhem facility in the financial year
o Cost savings: The Company is on track to deliver €3m of cost savings
from the business transformation programme in FY25, in addition to annualised
cost savings of €3m from Hull closure
· Acceleration of sales and marketing, supporting progress towards
run rate of 100,000m³ by end of FY27
· New CFO Sameet Vohra appointed on 30 September 2024
Current trading and outlook
· Accsys has made a good start to H2 FY25 and expects full year
results to be significantly ahead of market consensus(1)
· While market conditions are expected to remain challenging in the
near term, the Group expects total sales volumes in H2 FY25 to maintain growth
momentum, driven by positive demand development in key European markets and
the new capacity in the USA
· The Group will focus on maximising sales and marketing to produce
returns on its major plants in Arnhem and Kingsport
· With the gross margin maintained, the Company will continue to
benefit from the business transformation programme and savings from the
closure of Hull
· As Accoya USA continues to ramp up, underlying profitability is
expected to improve in the second half of the year
· The Company will hold an Investor Strategy Day at its Arnhem site
on 30 January 2025
(1)Accsys considers market consensus for FY25 Adjusted EBITDA to be €7.6m
Ends
This announcement comprises inside information for the purposes of EU MAR and
UK MAR. The person responsible for making this announcement is Sameet Vohra,
Chief Financial Officer, Accsys Technologies PLC.
There will be a presentation relating to these results at 10.00am UK time on
26 November 2024. The presentation will take the form of a webcast and
conference call, details of which are below:
Webcast link (for audio and visual presentation):
Click on the link below or copy and paste ALL of the following text into your
browser:
https://edge.media-server.com/mmc/p/w2vdyi7k
(https://edge.media-server.com/mmc/p/w2vdyi7k)
Phone Participants: for those participants who would like to ask a question
live over the phone lines, please register on the following link. You will
then be sent a confirmation email with a link to dial-in numbers.
https://register.vevent.com/register/BIbf6ff62bb55c4a69bbe5e403916af68f
(https://register.vevent.com/register/BIbf6ff62bb55c4a69bbe5e403916af68f)
Enquiries:
Investor Relations / Analysts:
ir@accsysplc.com (mailto:ir@accsysplc.com)
Media: Clemens Sassen, Tessa Nelissen, Huijskens Sassen Communications
(NL) +31 (0) 20 68 55 955
Deutsche Numis (London): Oliver Hardy (NOMAD), Ben
Stoop
+44 (0) 20 7260
1000
ABN Amro (Amsterdam): Richard van Etten, Dennis van Helmond
+31 20 344
2000
Accsys Technologies PLC
CEO Review
Overview of H1 FY25
I am excited by the significant progress we have made in the first half of
FY25, both operationally and financially. The team's hard work has delivered
strong results, and I'm proud of how we've enhanced our efficiency, derisked
the business and are creating increased value for all our customers and
stakeholders. We are continuing to build strong fundamentals for Accsys'
future.
We have delivered strong profitability progression more than doubling EBITDA
on a year-to-year comparison. This was driven by robust sales, lower operating
expenditure resulting from our business transformation programme and
maintenance of a high average sales price across the mix. We delivered a 4%
increase in aggregated revenues inclusive of our joint venture, compared to
the same period last year, reflecting higher sales volumes. Aggregated wood
revenue increased by 7%, partially offset by a reduction in non-wood revenues,
primarily acetic acid sales, which have a natural hedge against acetyls
purchasing. Increased sales volumes and optimized wood mix supported a 9%
increase in gross profit.
Beyond the financial performance I am pleased by the strong progress we have
made operationally in H1 to simplify and de-risk the Group, focusing on
strengthening its fundamentals. We successfully commenced commercial
operations at Accoya USA, our joint venture with Eastman Chemical Company,
bringing local production to one of the world's most attractive markets for
Accoya and increasing our global production capacity. Manufacturing
performance at the new site is progressing well and in line with expectations.
While pre-operational and ramp-up costs have been higher than anticipated for
this period, we are confident that the site's underlying profitability will
strengthen in H2 as production volumes and customer sales grow further.
Our Arnhem facility had a good performance in H1. The underlying EBITDA from
Arnhem was robust, delivering €13m for the period compared to €9m in H1
FY24.
Following a thorough review of all available strategic and funding options for
Tricoya UK, Accsys announced on 19 September 2024 that it would discontinue
the Tricoya plant in Hull owned by Tricoya UK. Since that time, various
steps have been taken to wind down the remaining operations of Tricoya UK(1)
and it has now been resolved that this business will enter creditors voluntary
liquidation. The Board is very grateful for the dedication and hard work of
the small yet valuable TUK team that has supported the project from its
inception. The decision to discontinue the Hull Plant derisks the business
from exposure to unfinished capital projects and enables the Company to fully
focus on business development from Arnhem and Kingsport.
The Group has recognised an exceptional restructuring cost of €3.9m in the
period and an exceptional non-cash impairment charge of €18m. The Group will
benefit from annual operating cost savings of €3m from the plant
closure.
I want to reiterate that our belief in Tricoya products remains strong. Accsys
is fully committed to continuing to develop and grow the Tricoya product line
from our Arnhem site in partnership with our long-standing customers. Demand
for Tricoya is growing, with a 7% increase in our sales volumes in H1. We are
focusing on operational efficiencies in the production of Accoya for Tricoya
from Arnhem, including increasing the use of more cost-effective pine species
for this product line.
Our business transformation programme is delivering results. We have made
operational cost savings in the first half of €2.5m compared to the same
period last year. The team is now more agile with faster decision making,
driving operational efficiencies and empowering leadership.
We are making good strides with phase one of our FOCUS strategy. We have
worked hard to quickly embed our new assets, ensuring a smooth transition from
volumes being sold out of Arnhem to the USA. We are sharing best practices and
learnings between the two sites and accelerating our sales and marketing to
progress towards our target of a run rate of 100,000m³ by the end of FY27. We
have made strong progress with our Solid Roots operational efficiency
programme in Arnhem moving us towards a mature manufacturing performance. In
the period we have improved the overall equipment effectiveness of our key
equipment and are on track for a 500 basis points improvement in the financial
year.
Safe and sustainable operations remain an absolute priority. We are proud to
have re-certified our Accoya Color product Cradle to Cradle Certified™ Gold,
demonstrating the product's strong circular economy attributes. Preparations
have been made to ensure compliance with EUDR requirements when they come into
force as well as the EU Corporate Sustainability Reporting Directive.
Product and sales review
Global demand for Accoya remains strong, with a 10% increase in gross Accoya
sales volumes at 31,553m(3). With continued challenging conditions in the
global construction industry, H1 sales volumes grew ahead of the broader
building materials market.
(1)The following previous Accsys Board directors sit on the Board of Tricoya
UK Limited or have done so over the past 12 months : Johannes Catharina
Hermanus Leonardus ('Hans') Pauli and Steven James Salo (resigned from the
board of Tricoya UK Limited on 16 May 2024).
H1 FY25 Growth on PY
Accoya wood revenue (inclusive of share of JV revenues) €67.4m 7%
Accoya and Accoya Color Sales volumes by end market H1 FY25 m3 Growth on PY
UK and Ireland 7,622 24%
Rest of Europe 7,274 (2%)
North America 4,983 18%
Rest of world 2,692 2%
Total: 22,571 11%
Accoya for Tricoya 8,982 7%
Total volumes: 31,553 10%
Revenues from Accoya wood grew by 7% in the first half of FY25 to €67.4m,
driven by good product demand and increased production capacity following the
commercial start-up of Accoya USA in Q2.
Total Accoya sales volumes grew by 10% to 31,553m³, with good performances
recorded in North America +18% and our largest current market, the UK&I
+24%. UK growth was supported by customers feeling more confident in supply
consistency following the enhancements at Arnhem and opening of Accoya USA.
Good growth in certain European markets, including France and Benelux, was
offset by continued tough market conditions in Germany.
To gain market share and establish presence in new markets the company has
worked on some selective discounting programmes, whilst maintaining our gross
margin at our target level.
To support our increased capacity and FOCUS strategy, we continue to invest in
the commercial organisation and our relationships with distribution partners,
especially in the US market to expand distribution there now that we have
local supply.
In terms of product mix, sales for Accoya Color, have been strong. Growing
this higher margin product line is a key part of our FOCUS strategy.
H2 will be the Company's first full half year with the North American market
wholly supplied by Accoya USA. Accsys will continue to accelerate sales and
marketing efforts with a target to refill the available capacity at Arnhem
within 12 months of the Accoya USA start-up on a run rate basis.
Outlook
We expect full year results to be significantly ahead of market
consensus.(1)
In H2, we expect to realise the benefits from a more focused and simplified
business model delivering improved profitability, continued cost discipline
and cash generation. With peak capital investment behind us the Group is
significantly derisked.
Our major next steps are to further grow our products' market share in all our
regions, continue to enhance our customer experience and maintain the gross
margin target. We will continue to invest in demand creation as we expect
those returns to come quickly. Markets are expected to remain challenging in
the near term though we anticipate that we will continue to gain market share.
Our demand creation activities are proving successful, we have already
welcomed four new distributors in H2, including two in the US, and expect to
see the benefits of our broader distribution network coming through.
Over the longer-term, our expansion has significant capacity to deliver
sustainable organic volume growth. We remain confident that our premium
product offering will enable us to grow our market share and successfully
navigate changing market conditions to deliver our mid-term strategy.
Dr. Jelena Arsic Van Os
Chief Executive Officer
26 November 2024
(1)Accsys considers market consensus for FY25 Adjusted EBITDA to be €7.6m
Accsys Technologies PLC
CFO review
Statement of comprehensive income
Total sales volumes (including sales from both the Arnhem and Kingsport
plants) increased 10% on the prior year to 31,553m(3). Sales volumes from
our Arnhem plant increased 5% to 30,372m(3) on the prior period (28,807m(3)).
Following the commercial and operational startup of the Kingsport site (which
is a US joint venture with Eastman Chemical Company, and equity accounted for
in the financial statements), North American sales previously sold from the
Arnhem plant, were transferred to the Kingsport site.
Revenue for the period increased by 1% to €72.2m (H1 FY24: €71.2m),
primarily due to the increase in sales volume, an average sales price
maintained at a high level, but partially offset by lower average sales prices
for acetic acid. Revenue increased 4% on an aggregated basis (including
Accsys's 60% portion of the US JV's revenue).
Tricoya panel revenue decreased by €0.7m during the period to €2.2m (H1
FY24: €2.9m), representing Accsys purchasing and selling Tricoya panels
produced by our Accoya for Tricoya customers.
Other revenue, which predominantly relates to the sale of our acetic acid
by-product into the acetyls market, decreased by 16% to €4.1m (H1 FY24:
€4.9m), reflecting lower acetic acid sales prices. These sales act as a
partial hedge to acetic anhydride costs. Net acetyls costs (proportional
combination of acetic anhydride cost and acetic acid sales price) were in line
with the prior year.
Raw wood input costs were lower compared to the prior year period following
our use of higher-cost appearance grade wood for Accoya for Tricoya production
during H1 FY24 as we sought to lower raw material inventory levels. In H2 FY24
we returned to using more cost-effective Spanish radiata pine and other wood
chip grade wood for Accoya for Tricoya production, and this continued in H1
FY25.
Cost of sales decreased by 2%, with 5% higher sales volumes partially offset
by lower raw wood costs and lower maintenance costs.
Gross profit of €22.2m was 9% higher than in the prior year (H1 FY24:
€20.3m) and gross profit margin improved by 210bps to 30.7%.
Underlying other operating costs (excluding depreciation and amortisation)
decreased €3.9m to €13.8m (H1 FY24: €17.7m). This is due to a decrease
in Tricoya UK's operating costs compared to the prior year (€1.4m) and lower
operating costs arising from the business transformation programme actioned in
H2 FY24.
Depreciation and amortisation charges of €4.6m were in line with the prior
year.
Underlying net finance costs increased €1.4m to €3.0m primarily due to
higher interest rates agreed during the November 2023 fundraise.
Following the Board's decision to discontinue and wind-up the Hull plant, the
following has been recognised as exceptional items in the first half:
- An impairment loss (exceptional non-cash item) of €18.0m was recognised
reflecting the full impairment of the remaining Tricoya segment assets related
to the Hull plant (2024: €7.0m).
- A restructuring cost (exceptional cash item) of €3.9m
- The release of the financial liability of €1.1m raised for the Value
Recovery Instrument (see note 11).
Accsys' share of its US joint venture (Accoya USA LLC) net loss after tax,
which is accounted for using the equity method, increased by €4.9m to
€6.1m (H1 FY24 loss: €1.2m) as the entity increased its pre-operating
activity and commenced commercial operations in the period.
Adjusted EBITDA (Group EBITDA before exceptional items and including 60% of
the US Joint venture's EBITDA) increased by €2.4m to €4.0m due to higher
sales volumes, higher gross profit generated, and lower operating costs,
partially offset by the €3.3m proportional increase in the US Joint
venture's EBITDA loss.
Underlying loss before tax increased by €0.4m to €5.4m (H1 FY24: loss of
€5.0m). After taking into account exceptional items (including the
impairment loss and restructuring cost), loss before tax amounted to €26.2m
(H1 FY24: €13.1m).
The tax charge increased by €0.9m to €1.3m (H1 FY24: €0.4m), due to a
€0.6m increase relating to tax charges from prior periods, with the current
year tax increasing in line with the underlying higher profitability during
the year.
Underlying loss per share increased to €0.03 per share (H1 FY24: loss of
€0.02 per share). A statutory loss per share was recognised of €0.12 per
share (H1 FY24: €0.06 per share).
Cash flow
Cash flows generated from operating activities before changes in working
capital increased by €6.9m to €8.7m (H1 FY24: €1.8m), following the
higher EBITDA generated (excluding the US JV) during the year. Free cashflow
(net cash from operating activities less capex) improved to €8.1m inflow (H1
FY24: €1.7m outflow) following higher cash generated from operating
activities and a decrease in capex spend compared to the prior year period.
Inventory levels decreased by €1.8m with continued management action taken
to decrease raw material levels during the period. €7.2m was invested as
planned into the US joint venture (Accoya USA LLC) during the year, as the
company completed construction of its Accoya plant in Kingsport, Tennessee,
and commenced commercial operation.
At 30 September 2024, the Group held cash balances of €26m, a €1.4m
decrease in the period, attributable to the €7.2m investment into our US
joint venture, capex (€0.6m), interest payments on the ABN Amro term loan
(€0.8m), lease and other financing payments, partially offset by the
positive operating cashflow generated during the period, referred to above.
Financial position
Plant and machinery additions of €0.6m (H1 FY24: €1.1m) consisted
primarily of maintenance capex for the Arnhem plant.
Trade and other receivables increased to €19.9.m (H1 FY24: €13.6m)
primarily due to the higher sales than the prior year period and higher
trading revenues with Accoya USA LLC.
Trade and other payables reduced by €2.4m to €19.0m (H1 FY24: €21.4m),
attributable to a decrease in operational creditors.
A restructuring provision of €4.4m has been recognised to discontinue and
wind-up the Hull plant. The difference to the exceptional charge (€3.9m)
recognised of €0.5m relates to an amount previously held as a liability and
reclassified into the restructuring provision.
Amounts payable under loan agreements increased to €61.7m during the period
(31 March 2024: €60.2m) following the capitalisation of interest on the
Convertible loan notes and Tricoya UK's Natwest facility.
Net debt increased by €3.1m in the period to €40.2m (31 March 2024:
€37.1m) following the investment into our US joint venture (€7.2m), capex
(€0.6m), capitalised interest on borrowings (€1.4m) and other financing
costs partially offset by the positive operating cashflow generated during the
period.
Risks and uncertainties
As described on page 40 to 45 of the Accsys 2024 Annual Report, the business,
financial condition or results of operations of the Group could be adversely
affected by a number of risks. The Group's systems of control and protection
are designed to help manage and control risks to an appropriate level rather
than to eliminate them. These specific principal risks and related mitigations
- as currently identified by Accsys' risk management process - have not
changed significantly since the publication of the 2024 Annual Report in July
of this year. These risks relate to the following areas: finance, health,
safety & environment; Kingsport plant; licensing/partnering and protection
of intellectual property; market and supply chain disruption; manufacturing;
talent; sale of products; environmental, social & governance (ESG),
sustainability and climate related risk; IT; reputational risk and governance,
compliance & law.
Going concern
The 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, and at least for the 12 months from the
date these financial statements are approved (the 'going concern period'). As
part of the Group's going concern review, the Directors have assessed the
Group's trading forecasts, working capital and liquidity requirements, and
bank facility covenant compliance for the going concern period under a base
case scenario and a severe but plausible downside scenario.
The cash flow forecasts used for the going concern assessment represent the
Directors' best estimate of trading performance and cost implications in the
market based on current agreements, market experience and consumer demand
expectations. These forecasts indicate that, in order to continue as a going
concern, the Group is dependent on achieving a certain level of performance
relating to the production and sale of Accoya, and the management of its
working capital.
In both scenarios, and following the announcement to discontinue and wind up
the Tricoya UK plant, the Directors have assumed an exceptional cash cost of
approximately €4 million.
The Directors' have also considered the possible quantum and timing of funding
required to fund and ramp up Accoya USA's operations. Accsys has a contractual
obligation to fund its 60% share of Accoya USA LLC on a pro rata basis with
its joint venture partner (Eastman Chemical Company). This funding has been
considered in both scenarios.
The Group is also dependent on the Group's financial resources including its
existing cash position, banking and finance facilities (see note 11 for
details).
The Directors considered a severe but plausible downside scenario against the
base case with reduced Accoya sales volumes and increased funding into Accoya
USA LLC and a reverse stress test was performed to determine the decrease in
Accoya sales volume from the Arnhem plant required to breach banking
covenants. The Directors do not expect the assumptions in the severe but
plausible downside scenario or the reverse stress test scenario to
materialise, but should they unfold, the Group has several mitigating actions
it can implement to manage its going concern risk, such as deferring
discretionary capital expenditure and implementing further cost reductions to
maintain a sufficient level of liquidity and covenant headroom during the
going concern period. The combined impact of the above downside scenarios and
mitigations does not trigger a minimum liquidity breach or covenant breach at
any point in the going concern period. In the reverse stress test, a decrease
of approximately 5% on Accoya sales volume from the Arnhem plant compared to
an equivalent prior year period or a decrease of approximately 20% compared to
the equivalent base scenario period was required to reach the banking covenant
breach point.
The Directors believe that while some uncertainty always inherently remains in
achieving the budget, in particular in relation to market conditions outside
of the Group's control, after carefully considering all the factors explained
in this statement, there is sufficient liquidity and covenant headroom such
that there is no material uncertainty with respect to going concern and have
prepared the financial statements on this basis.
Sameet Vohra
Chief Financial Officer
26 November 2024
.
Accsys Technologies PLC
Condensed consolidated statement of comprehensive income for the six months
ended 30 September 2024
Note Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
6 months 6 months 6 months 6 months 6 months 6 months Year Year Year
ended ended ended ended ended ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March 31 March
2024 2024 2024 2023 2023 2023 2024 2024 2024
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Underlying Exceptional items* Total Underlying Exceptional items* Total Underlying Exceptional Total
items*
Accoya wood revenue 65,581 - 65,581 63,313 - 63,313 123,139 - 123,139
Tricoya panel revenue 2,159 - 2,159 2,918 - 2,918 4,134 - 4,134
Licence revenue 339 - 339 46 - 46 77 - 77
Other revenue 4,139 - 4,139 4,930 - 4,930 8,820 - 8,820
Total revenue 2 72,218 - 72,218 71,207 - 71,207 136,170 - 136,170
Cost of sales (50,066) - (50,066) (50,865) - (50,865) (95,287) - (95,287)
Gross profit 22,152 - 22,152 20,342 - 20,342 40,883 - 40,883
Other operating costs 3 (18,449) (21,871) (40,320) (22,482) (8,200) (30,682) (41,927) (8,200) (50,127)
Operating profit/(loss) 3,703 (21,871) (18,168) (2,140) (8,200) (10,340) (1,044) (8,200) (9,244)
Finance income 197 1,102 1,299 30 89 119 138 281 419
Finance expense (3,196) - (3,196) (1,640) - (1,640) (4,418) 249 (4,169)
Share of loss after tax of joint venture accounted for using the equity method 12 (6,098) - (6,098) (1,211) - (1,211) (4,100) - (4,100)
Loss before taxation (5,394) (20,769) (26,163) (4,961) (8,111) (13,072) (9,424) (7,670) (17,094)
Tax expense 5 (1,330) - (1,330) (420) - (420) (765) - (765)
Loss for the period (6,724) (20,769) (27,493) (5,381) (8,111) (13,492) (10,189) (7,670) (17,859)
Items that may be reclassified to profit or loss
Gain/(loss) arising on (23) - (23) 22 - 22 2 - 2
translation of foreign operations
Total other comprehensive (expense)/income (23) - (23) 22 - 22 2 - 2
Total comprehensive (6,747) (20,769) (27,516) (5,359) (8,111) (13,470) (10,187) (7,670) (17,857)
loss for the period
Basic loss per ordinary share 6 €(0.03) - €(0.12) €(0.02) - €(0.06) €(0.04) - €(0.08)
Diluted loss per ordinary share 6 - - - - - - - - -
The notes form an integral part of these condensed financial statements.
* See note 4 for details of exceptional items.
Accsys Technologies PLC
Condensed consolidated statement of financial position at 30 September 2024
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
Note 2024 2023 2024
€'000 €'000 €'000
Non-current assets
Intangible assets 7 6,652 10,369 10,048
Investment accounted for using the equity method 12 32,347 29,648 31,685
Property, plant and equipment 8 76,254 96,612 93,474
Right of use assets 2,976 4,210 3,736
118,229 140,839 138,943
Current assets
Inventories 23,984 31,812 25,743
Trade and other receivables 19,886 13,643 17,612
Cash and cash equivalents 26,000 20,780 27,427
Corporation tax receivable 203 460 250
70,073 66,695 71,032
Current liabilities
Trade and other payables (19,010) (21,411) (18,797)
Lease liabilities (860) (943) (690)
Borrowings 11 (2,250) (9,500) -
Corporation tax payable (7,996) (6,500) (6,719)
Provisions (4,382) - -
(34,498) (38,354) (26,206)
Net current assets 35,575 28,341 44,826
Non-current liabilities
Lease liabilities (3,672) (3,845) (3,648)
Borrowings 11 (59,402) (54,680) (60,204)
Financial liability at amortised cost - (1,293) (1,102)
(63,074) (59,818) (64,954)
Total net assets 90,730 109,362 118,815
Equity
Share capital 9 12,022 11,002 11,976
Share premium account 262,903 250,717 262,394
Other reserves 10 114,406 114,743 114,743
Retained loss (298,675) (267,243) (270,421)
Own shares (34) (8) (8)
Foreign currency translation reserve 108 151 131
Total equity attributable to owners of Accsys Technologies PLC 90,730 109,362 118,815
The notes form an integral part of these condensed financial statements.
Accsys Technologies PLC
Condensed consolidated statement of changes in equity for the six months ended
30 September 2024
Share capital Ordinary Share premium Other reserves Own Shares Foreign currency trans- Retained loss Total equity
lation reserve
€'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance at 10,963 250,717 114,743 (8) 129 (254,042) 122,502
31 March 2023
Loss for the period - - - - - (13,492) (13,492)
Other comprehensive income for the year - - - - 22 - 22
Share based payments - - - - - 330 330
Shares issued 39 - - - - (39) -
Balance at 11,002 250,717 114,743 (8) 151 (267,243) 109,362
30 Sept 2023
(unaudited)
Loss for the period - - - - - (4,328) (4,328)
Other comprehensive income for the year - - - - (20) - (20)
Share based payments - - - - - 1,150 1,150
Shares issued 974 - - - - - 974
Premium on shares issued - 12,319 - - - - 12,319
Share issue costs - (642) - - - - (642)
Balance at 11,976 262,394 114,743 (8) 131 (270,421) 118,815
31 March 2024
Loss for the period - - - - - (27,493) (27,493)
Other comprehensive income for the year - - - - (23) - (23)
Share based payments - - - - - (232) (232)
Shares issued 46 - - (26) - (20) -
Premium on shares issued - 509 - - - (509) -
Share issue costs - - - - - - -
Foreign exchange hedge movement - - (337) - - - (337)
Balance at 12,022 262,903 114,406 (34) 108 (298,675) 90,730
30 Sept 2024
(unaudited)
Ordinary share capital is the amount subscribed for shares at nominal value
(note 9).
Share premium represents the excess of the amount subscribed for ordinary
share capital over the nominal value of these shares, net of share issue
expenses.
See note 10 for details on Other reserves.
Foreign currency translation reserve arises on the re-translation of the
Group's USA subsidiary's net assets which are denominated in a different
functional currency, being US dollars.
Retained loss represents the cumulative losses of the Group attributable to
the owners of the parent.
The notes form an integral part of these condensed financial statements.
Accsys Technologies PLC
Condensed consolidated statement of cash flow for the six months ended 30
September 2024
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2024 2023 2024
€'000 €'000 €'000
Loss before taxation (26,163) (13,072) (17,094)
Adjustments for:
Amortisation of intangible assets 671 391 828
Depreciation of property, plant and equipment and right of use assets 3,967 4,378 8,751
Impairment loss 21,871 7,000 7,000
Net finance expense 1,897 1,521 3,750
Equity-settled share-based payment (credit)/expense (232) 330 1,480
Accsys portion of Licence fee received from joint venture 450 - -
Share of loss after tax of joint venture 6,098 1,211 4,100
Currency translation losses 93 66 108
Cash inflows from operating activities before changes in working capital 8,652 1,825 8,923
(Increase) / decrease in trade and other receivables (2,344) 4,451 393
Decrease / (increase) in inventories 1,759 (1,868) 4,203
Increase / (decrease) in trade and other payables 650 (3,778) (6,403)
Net cash from operating activities before tax 8,717 630 7,116
Tax received - - 81
Net cash from operating activities 8,717 630 7,197
Cash flows from investing activities
Investment in property, plant and equipment (602) (2,023) (3,090)
Investment in intangible assets (59) (268) (385)
Investment in joint venture (7,210) - (4,926)
Net cash used in investing activities (7,871) (2,291) (8,401)
Cash flows from financing activities
Proceeds from borrowings - - 9,901
Other finance costs (439) (36) (36)
Interest paid (771) (1,311) (2,912)
Interest received 197 30 138
Repayment of lease liabilities (444) (736) (1,044)
Repayment of borrowings - (2,250) (17,000)
Proceeds from issue of share capital - - 13,332
November 2023 fundraise transaction costs (476) - (642)
Net cash from financing activities (1,933) (4,303) 1,737
Net (decrease) in cash and cash equivalents (1,087) (5,964) 533
Effect of exchange gain on cash and cash equivalents (340) 151 301
Opening cash and cash equivalents 27,427 26,593 26,593
Closing cash and cash equivalents 26,000 20,780 27,427
The notes form an integral part of these condensed financial statements.
Accsys Technologies PLC
Notes to the financial statements for the six months ended 30 September 2024
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 chips. 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 4(th) Floor, 3 Moorgate Place, London EC2R
6EA.
The unaudited condensed consolidated financial statements were approved on 25
November 2024.
Basis of
accounting
The Group's condensed consolidated 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 and as adopted
for use in the United Kingdom, in particular International Accounting Standard
(IAS) 34 "interim financial reporting" and the AIM Rules for Companies and the
Dutch Financial Markets Supervision Act.
The financial information for the six months ended 30 September 2024 and the
six months ended 30 September 2023 is unaudited. The comparative financial
information for the full year ended 31 March 2024 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 25
June 2024. 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. This
financial information is to be read in conjunction with the annual report for
the year ended 31 March 2024, which has been prepared in accordance with both
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
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 2024.
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 annual report for the year ended 31
March 2024. The accounting policies applied for preparation of condensed
consolidated financial statements are consistent with those of the annual
financial statements for the year ended 31 March 2024, as described in those
financial statements.
Going concern
The 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, and at least for the 12 months from the
date these financial statements are approved (the 'going concern period'). As
part of the Group's going concern review, the Directors have assessed the
Group's trading forecasts, working capital and liquidity requirements, and
bank facility covenant compliance for the going concern period under a base
case scenario and a severe but plausible downside scenario.
The cash flow forecasts used for the going concern assessment represent the
Directors' best estimate of trading performance and cost implications in the
market based on current agreements, market experience and consumer demand
expectations. These forecasts indicate that, in order to continue as a going
concern, the Group is dependent on achieving a certain level of performance
relating to the production and sale of Accoya, and the management of its
working capital.
In both scenarios, and following the announcement to discontinue and wind up
the Tricoya UK plant, the Directors have assumed an exceptional cash cost of
approximately €4 million.
The Directors' have also considered the possible quantum and timing of funding
required to fund and ramp up Accoya USA's operations. Accsys has a contractual
obligation to fund its 60% share of Accoya USA LLC on a pro rata basis with
its joint venture partner (Eastman Chemical Company). This funding has been
considered in both scenarios.
The Group is also dependent on the Group's financial resources including its
existing cash position, banking and finance facilities (see note 11 for
details).
1. Accounting policies (continued)
Going concern (continued)
The Directors considered a severe but plausible downside scenario against the
base case with reduced Accoya sales volumes and increased funding into Accoya
USA LLC and a reverse stress test was performed to determine the decrease in
Accoya sales volume from the Arnhem plant required to breach banking
covenants. The Directors do not expect the assumptions in the severe but
plausible downside scenario or the reverse stress test scenario to
materialise, but should they unfold, the Group has several mitigating actions
it can implement to manage its going concern risk, such as deferring
discretionary capital expenditure and implementing further cost reductions to
maintain a sufficient level of liquidity and covenant headroom during the
going concern period. The combined impact of the above downside scenarios and
mitigations does not trigger a minimum liquidity breach or covenant breach at
any point in the going concern period. In the reverse stress test, a decrease
of approximately 5% on Accoya sales volume from the Arnhem plant compared to
an equivalent prior year period or a decrease of approximately 20% compared to
the equivalent base scenario period was required to reach the banking covenant
breach point.
The Directors believe that while some uncertainty always inherently remains in
achieving the budget, in particular in relation to market conditions outside
of the Group's control, after carefully considering all the factors explained
in this statement, there is sufficient liquidity and covenant headroom such
that there is no material uncertainty with respect to going concern and have
prepared the financial statements on this basis.
2. Segmental reporting
Accoya
Accoya Segment
6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2023 6 months ended 30 September 2023 6 months ended 30 September 2023 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2024
2024
2024
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Accoya wood revenue 65,581 - 65,581 63,313 - 63,313 123,139 - 123,139
Licence revenue 300 - 300 - - - - - -
Other revenue 4,134 - 4,134 4,887 - 4,887 8,770 - 8,770
Total Revenue 70,015 - 70,015 68,200 - 68,200 131,909 - 131,909
Cost of sales (48,082) - (48,082) (48,142) - (48,142) (91,393) - (91,393)
Gross profit 21,933 - 21,933 20,058 - 20,058 40,516 - 40,516
Other operating costs (13,171) - (13,171) (15,531) (1,000) (16,531) (28,859) (1,000) (29,859)
Profit from operations 8,762 - 8,762 4,527 (1,000) 3,527 11,657 (1,000) 10,657
Operating profit/(loss) 8,762 - 8,762 4,527 (1,000) 3,527 11,657 (1,000) 10,657
Depreciation and amortisation 4,189 - 4,189 4,469 - 4,469 8,947 - 8,947
EBITDA 12,951 - 12,951 8,996 (1,000) 7,996 20,604 (1,000) 19,604
See note 4 for explanation of Exceptional Items.
Tricoya
Tricoya Segment
6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2023 6 months ended 30 September 2023 6 months ended 30 September 2023 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2024
2024
2024
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Tricoya panel revenue 2,159 - 2,159 2,918 - 2,918 4,134 - 4,134
Licence revenue 39 - 39 46 - 46 77 - 77
Other revenue 5 - 5 43 - 43 50 - 50
Total Revenue 2,203 - 2,203 3,007 - 3,007 4,261 - 4,261
Cost of sales (1,984) - (1,984) (2,723) - (2,723) (3,894) - (3,894)
Gross profit 219 - 219 284 - 284 367 - 367
Other operating costs (2,210) (21,871) (24,081) (3,611) (7,200) (10,811) (6,961) (7,200) (14,161)
Operating profit/(loss) (1,991) (21,871) (23,862) (3,327) (7,200) (10,527) (6,594) (7,200) (13,794)
Operating profit/(loss) (1,991) (21,871) (23,862) (3,327) (7,200) (10,527) (6,594) (7,200) (13,794)
Depreciation and amortisation 420 - 420 267 - 267 566 - 566
Impairment - 17,956 17,956 - 7,000 7,000 - 7,000 7,000
EBITDA (1,571) (3,915) (5,486) (3,060) (200) (3,260) (6,028) (200) (6,228)
Revenue includes direct Tricoya panel sales made by the Company, which are
purchased from our Tricoya Customers. The sale of Accoya to customers who
produce the Tricoya panels are included within the Accoya segment.
Other operating costs include pre-operating costs for the Tricoya UK plant.
See note 4 for explanation of Exceptional Items.
2. Segmental reporting (continued)
Corporate
Corporate Segment
6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2023 6 months ended 30 September 2023 6 months ended 30 September 2023 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2024
2024
2024
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross profit - - - - - - - - -
Other operating costs (2,335) - (2,335) (2,483) - (2,483) (4,617) - (4,617)
Operating profit/(loss) (2,335) - (2,335) (2,483) - (2,483) (4,617) - (4,617)
Operating profit/(loss) (2,335) - (2,335) (2,483) - (2,483) (4,617) - (4,617)
Depreciation and amortisation - - - - - - - - -
EBITDA (2,335) - (2,335) (2,483) - (2,483) (4,617) - (4,617)
See note 4 for explanation of Exceptional items.
Research and Development
Research & Development Segment
6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2023 6 months ended 30 September 2023 6 months ended 30 September 2023 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2024
2024
2024
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross profit - - - - - - - - -
Other operating costs (733) - (733) (857) - (857) (1,490) - (1,490)
Operating profit/(loss) (733) - (733) (857) - (857) (1,490) - (1,490)
Operating profit/(loss) (733) - (733) (857) - (857) (1,490) - (1,490)
Depreciation and amortisation 29 - 29 33 - 33 66 - 66
EBITDA (704) - (704) (824) - (824) (1,424) - (1,424)
Costs exclude those which have been capitalised in accordance with IAS 38.
(see note 7).
See note 4 for explanation of Exceptional items.
2. Segmental reporting (continued)
Total
TOTAL
6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2023 6 months ended 30 September 2023 6 months ended 30 September 2023 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2024
2024
2024
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items
TOTAL
Underlying
Exceptional items TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Accoya/Tricoya revenue 67,740 - 67,740 66,231 - 66,231 127,273 - 127,273
Licence revenue 339 - 339 46 - 46 77 - 77
Other revenue 4,139 - 4,139 4,930 - 4,930 8,820 - 8,820
Total Revenue 72,218 - 72,218 71,207 - 71,207 136,170 - 136,170
Cost of sales (50,066) - (50,066) (50,865) - (50,865) (95,287) - (95,287)
Gross profit 22,152 - 22,152 20,342 - 20,342 40,883 - 40,883
Other operating costs (18,449) (21,871) (40,320) (22,482) (8,200) (30,682) (41,927) (8,200) (50,127)
Operating profit/(loss) 3,703 (21,871) (18,168) (2,140) (8,200) (10,340) (1,044) (8,200) (9,244)
Finance income 197 1,102 1,299 30 89 119 138 281 419
Finance expense (3,196) - (3,196) (1,640) - (1,640) (4,418) 249 (4,169)
Share of loss after tax of joint venture (6,098) - (6,098) (1,211) - (1,211) (4,100) - (4,100)
Loss before taxation (5,394) (20,769) (26,163) (4,961) (8,111) (13,072) (9,424) (7,670) (17,094)
See note 4 for explanation of Exceptional Items.
Reconciliation of underlying EBIT and EBITDA
6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2024 6 months ended 30 September 2023 6 months ended 30 September 2023 6 months ended 30 September 2023 Year ended 31 March 2024 Year ended 31 March 2024 Year ended 31 March 2024
Exceptional items
TOTAL Exceptional items
TOTAL Underlying Exceptional items
TOTAL
Underlying Underlying
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Operating profit/(loss) / EBIT 3,703 (21,871) (18,168) (2,140) (8,200) (10,340) (1,044) (8,200) (9,244)
Depreciation and amortisation 4,638 - 4,638 4,769 - 4,769 9,579 - 9,579
Impairment - 17,956 17,956 - 7,000 7,000 - 7,000 7,000
EBITDA 8,341 (3,915) 4,426 2,629 (1,200) 1,429 8,535 (1,200) 7,335
2. Segmental reporting (continued)
Reconciliation of adjusted EBIT and EBITDA
6 months ended 30 September 2024 6 months ended 30 September 2023 Year ended 31 March 2024
€'000 €'000 €'000
Operating profit/(loss) / Underlying EBIT 3,703 (2,140) (1,044)
Share of joint venture EBIT (5,420) (1,150) (3,993)
Adjusted EBIT (1,717) (3,290) (5,037)
6 months ended 30 September 2024 6 months ended 30 September 2023 Year ended 31 March 2024
€'000 €'000 €'000
Underlying EBITDA 8,341 2,629 8,535
Share of joint venture EBITDA (4,312) (1,046) (3,724)
Adjusted EBITDA 4,029 1,583 4,811
Analysis of Revenue by geographical area of customers
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2024 2023 2024
€'000 €'000 €'000
UK & Ireland 27,834 23,292 46,903
Rest of Europe 26,421 28,638 47,364
Americas 12,028 13,296 28,878
Rest of World 5,935 5,981 13,025
72,218 71,207 136,170
The revenue by geographical area of customers table excludes North American
sales through our US joint venture (Accoya USA LLC), which is equity accounted
for in these financial statements. See note 12.
2. Segmental reporting (continued)
Assets and liabilities on a segmental basis:
Accoya Tricoya Corporate R&D TOTAL
Sept 2024 Sept 2024 Sept 2024 Sept 2024 Sept 2024
€'000 €'000 €'000 €'000 €'000
Non-current assets 116,125 1,186 852 66 118,229
Current assets 43,373 954 19,682 6,064 70,073
Current liabilities (12,804) (13,263) (8,372) (59) (34,498)
Net current assets/(liabilities) 30,569 (12,309) 11,310 6,005 35,575
Non-current liabilities (2,226) (7,976) (52,872) - (63,074)
Net assets/(liabilities) 144,468 (19,099) (40,710) 6,071 90,730
Accoya Tricoya Corporate R&D TOTAL
Sept 2023 Sept 2023 Sept 2023 Sept 2023 Sept 2023
€'000 €'000 €'000 €'000 €'000
Non-current assets 119,608 19,969 1,133 129 140,839
Current assets 45,327 3,582 12,176 5,610 66,695
Current liabilities (10,900) (12,919) (14,483) (52) (38,354)
Net current assets/(liabilities) 34,427 (9,337) (2,307) 5,558 28,341
Non-current liabilities (3,426) (7,511) (48,834) (47) (59,818)
Net assets/(liabilities) 150,609 3,121 (50,008) 5,640 109,362
Accoya Tricoya Corporate R&D TOTAL
March 2024 March 2024 March 2024 March 2024 March 2024
€'000 €'000 €'000 €'000 €'000
Non-current assets 118,134 19,697 1,016 96 138,943
Current assets 43,552 3,162 18,711 5,607 71,032
Current liabilities (10,344) (11,705) (4,101) (56) (26,206)
Net current assets/(liabilities) 33,208 (8,543) 14,610 5,551 44,826
Non-current liabilities (1,979) (7,803) (55,137) (35) (64,954)
Net assets/(liabilities) 149,363 3,351 (39,511) 5,612 118,815
The segmental assets in the current year were predominantly held in the UK,
USA and Netherlands (Prior Year UK and Netherlands). Additions to property,
plant, equipment and intangible assets in the current year were predominantly
incurred in the UK and Netherlands (Prior Year UK and Netherlands). The
increase in Investment accounted for using the equity method (investment into
joint venture) incurred in the USA. There are no significant intersegment
revenues.
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, the site in
Barry, the London head office, and maintenance costs associated with the plant
in Hull:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2024 2023 2024
€'000 €'000 €'000
Sales and marketing 2,856 3,136 6,044
Research and development 733 857 1,490
Other operating costs 3,309 6,858 11,731
Administration costs 6,913 6,862 13,083
Exceptional Items 3,915 1,200 1,200
Other operating costs excluding depreciation and amortisation 17,726 18,913 33,548
Depreciation and amortisation 4,638 4,769 9,579
Impairment loss 17,956 7,000 7,000
Total other operating costs 40,320 30,682 50,127
Administrative costs include costs associated with Human Resources, IT, Legal,
Business Development, Finance, Management and General Office and include the
costs of the Group's London and Dallas offices.
Group average employee headcount decreased to 212 in the period to 30
September 2024, from 235 in the period to 30 September 2023.
4. Exceptional Items
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2024 2023 2024
€'000 €'000 €'000
Impairment of the Tricoya segment assets (17,956) (7,000) (7,000)
Release / revaluation of Valuation Recovery Instrument "VRI" liability 1,102 89 281
Foreign exchange differences on USD cash held for investment in to USA JV- - - 249
incl. in Finance expense
Restructuring costs - (1,200) (1,200)
Hull restructuring cost (3,915) - -
Total exceptional items (20,769) (8,111) (7,670)
Exceptional Items
In the period:
Following the board's decision and market announcement to discontinue and
wind-up the Hull plant, the following has been recognised as exceptional items
in the first half:
- An impairment loss (exceptional expense) of €18.0m was recognised in the
first half reflecting the full remaining impairment of the Tricoya segment
assets related to the Hull plant (2024: €7.0m).
- A restructuring cost of €3.9m has been recognised for the costs related to
discontinuing and winding-up the Hull plant.
- The financial liability previously raised to account for the Value Recovery
Instrument of €1.1m has been released (see note 11).
4. Exceptional Items (continued)
In the prior year:
- an exceptional operating cost of €1.2m was recognised for
restructuring costs relating to decreasing the Group's administrative
operating cost base.
- €0.3m relates to the revaluation of the Value Recovery
Instrument (''VRI'').
- Foreign exchange differences were recognised due to US dollars
held for investment into Accoya USA LLC. Following the November 2023 capital
raise, the amount raised to invest into Accoya USA was translated into US
dollars and held in cash ensuring that foreign exchange movements did not
decrease the amount raised below the US dollar investment into Accoya USA.
This treatment did not meet the requirements for hedge accounting under IFRS
9, Financials instruments, and therefore the foreign exchange gain on the
revaluation of the US dollars has been accounted for in Finance expenses.
- An impairment loss (non-cash item) of €7.0m was recognised
relating to the Tricoya segment (FY23: €86.0m) due to an increase in the
discount rate to 14.25% used following an increase in market interest rates
and the Company specific market volatility factor.
5. Tax expense
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2024 2023 2024
€'000 €'000 €'000
(a) Tax recognised in the condensed consolidated statement of comprehensive
income comprises:
Current tax expense
UK Corporation tax on losses arising from prior periods 641 - -
Research and development tax credit in respect of prior periods - - 121
641 - 121
Overseas tax 689 420 644
Deferred Tax
Utilisation of deferred tax asset - - -
Total tax expense reported in the condensed consolidated statement of 1,330 420 765
comprehensive income
6. Basic and diluted loss per ordinary share
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March
2024
2024
2023
2023
2024
2024
Basic earnings per share Underlying Total Underlying Total Underlying Total
Weighted average number of 237,955 237,955 218,395 218,395 227,911 227,911
Ordinary shares in issue ('000)
Loss for the period attributable to owners of Accsys Technologies PLC (6,724) (27,493) (5,381) (13,492) (10,189) (17,859)
(€'000)
Basic loss per share €(0.03) €(0.12) €(0.02) €(0.06) €(0.04) €(0.08)
Diluted earnings per share
Weighted average number of Ordinary shares in issue ('000) - - - - - -
Equity options attributable to BGF -* -* -* -* -* -*
Weighted average number of Ordinary shares in issue and potential ordinary - - - - - -
shares ('000)
Loss for the year attributable to owners of Accsys Technologies PLC (€'000) - - - - - -
Diluted loss per share -* -* -* -* - -*
* Diluted loss per share is not disclosed. IAS 33 "Earning per share" defines
Dilutive share options as share options which would decrease profit per share
or increase loss per share. 8,449,172 equity options held by BGF, and
convertible loan notes disclosed in note 11, which if exercised would decrease
the Loss per share. As a result, these are anti-dilutive and therefore shown
as nil.
7. Intangible assets
Internal Intellectual
development property
costs rights Goodwill Total
€'000 €'000 €'000 €'000
Cost
At 31 March 2023 7,699 75,372 4,231 87,302
Additions 35 234 - 269
At 30 September 2023 7,734 75,606 4,231 87,571
Additions 15 101 - 116
At 31 March 2024 7,749 75,707 4,231 87,687
Additions - 59 - 59
At 30 September 2024 7,749 75,766 4,231 87,746
Accumulated amortisation
At 31 March 2023 3,279 73,532 - 76,811
Amortisation 198 193 - 391
At 30 September 2023 3,477 73,725 - 77,202
Amortisation 201 236 - 437
At 31 March 2024 3,678 73,961 - 77,639
Amortisation 198 473 - 671
Impairment loss 2,246 538 - 2,784
At 30 September 2024 6,122 74,972 - 81,094
Net book value
At 31 March 2023 4,420 1,840 4,231 10,491
At 30 September 2023 4,257 1,881 4,231 10,369
At 31 March 2024 4,071 1,746 4,231 10,048
At 30 September 2024 1,627 794 4,231 6,652
Refer to note 8 for the recoverability assessment of these intangible assets.
8. Property, plant and equipment
Land and buildings Plant and machinery Office equipment Total
€'000 €'000 €'000 €'000
Cost or valuation
Opening balance at 31 March 2023 17,976 208,821 4,697 231,494
Additions - 1,142 206 1,348
Foreign currency translation gain/(loss) - - 4 4
At 30 September 2023 17,976 209,963 4,907 232,846
Additions - 637 127 764
Foreign currency translation gain/(loss) - - (4) (4)
Reclassification - (3,669) (451) (4,120)
At 31 March 2024 17,976 206,931 4,579 229,486
Additions - 558 44 602
At 30 September 2024 17,976 207,489 4,623 230,088
Depreciation
Opening balance at 31 March 2023 1,711 120,892 2,840 125,443
Charge for the period 179 3,342 266 3,787
Foreign currency translation gain/(loss) - - 4 4
Impairment loss - 7,000 - 7,000
At 30 September 2023 1,890 131,234 3,110 136,234
Charge for the period 179 3,505 216 3,900
Foreign currency translation gain/(loss) - - (2) (2)
Impairment loss - - - -
Reclassification - (3,669) (451) (4,120)
At 31 March 2024 2,069 131,070 2,873 136,012
Charge for the period 179 3,124 227 3,530
Impairment loss - 13,955 - 13,955
Foreign exchange hedge movement - 337 - 337
At 30 September 2024 2,248 148,486 3,100 153,834
Net book value
At 31 March 2023 16,265 87,929 1,857 106,051
At 30 September 2023 16,086 78,729 1,797 96,612
At 31 March 2024 15,907 75,861 1,706 93,474
At 30 September 2024 15,728 59,003 1,523 76,254
8. Property, plant and equipment (continued)
Plant and machinery assets relating to the Tricoya UK plant are fully impaired
at 30 September 2024. At 31 March 2024, a net book value of €17,851,000 was
held as assets under construction and not depreciated.
Impairment review
The carrying value of the property, plant and equipment, internal development
costs and intellectual property rights are split between two cash generating
units (CGUs), representing the Accoya and Tricoya segments and the carrying
value of Goodwill is allocated to the Accoya segment.
Following the board's decision and market announcement to discontinue and
wind-up the Hull plant, an impairment review was performed on the Tricoya
segment assets, with an impairment loss of €18.0m recognised reflecting the
full remaining impairment of the Tricoya segment assets related to the Hull
plant. Intangible assets in the Tricoya segment of €1.2m have not been
impaired, which relate to the Accoya for Tricoya product which will continue
to be produced from the Arnhem plant and to Tricoya panels which will continue
to be produced by our Tricoya customers. This Intangible asset amount will be
re-allocated to the Accoya segment once the Hull plant has been closed.
9. Share capital
6 month period ended 30 September 2023:
Between July and August 2023, 775,191 shares were issued following the
exercise of nil cost options, granted under the Company's 2013 LTIP.
In July 2023, 222,232 ordinary shares were issued to an Employee Benefit Trust
at nominal value, as part of the annual bonus, in connection with the employee
remuneration and incentivisation arrangements for the period from 1 April 2022
to 31 March 2023. These ordinary shares will vested in July 2024, subject to
the employees continuing employment within the Group.
Year ended 31 March 2024:
In November 2023, 19,144,281 ordinary shares were issued as part of the
capital raise along with a debt extension package (see note 11) to allow
Accsys to commence commercial operations of its North American Accoya plant in
Kingsport, USA, strengthen its balance sheet and increase working capital in
the face of a challenging macro trading environment.
In January 2024, following the subscription by employees in the prior year for
shares under the Employee Share Participation Plan (the 'Plan'), 202,059
shares were issued as "Matching Shares" at nominal value under the Plan.
In February 2024, 15,148 shares were issued following the exercise of nil cost
options, granted under the Company's 2013 LTIP.
6 month period ended 30 September 2024:
In May 2024, 80,816 ordinary shares were issued following the exercise of nil
cost options, granted under the Company's LTIP.
In September 2024, 809,892 ordinary shares were issued to an Employee Benefit
Trust at nominal value, as part of the annual bonus, in connection with the
employee remuneration and incentivisation arrangements for the period from 1
April 2023 to 31 March 2024.
In September 2024, 36,487 ordinary shares were issued following the vesting of
nil cost options granted under the Company's Deferred bonus plan.
10. Other Reserves
Capital redemp- Merger reserve Hedge Effective-ness reserve Other reserve Total Other reserves
tion reserve
€000 €000 €000 €000 €000
Balance at 30 September 2023 148 106,707 337 7,551 114,743
Total Comprehensive income for the period - - - - -
Balance at 31 March 2024 148 106,707 337 7,551 114,743
Cash flow hedges against fixed assets - - (337) - (337)
Balance at 30 September 2024 148 106,707 - 7,551 114,406
The closing balance of the capital redemption reserve represents the amounts
transferred from share capital on redemption of deferred shares in a prior
period.
The merger reserve arose prior to transition to IFRS when merger accounting
was adopted.
The hedge effectiveness reserve reflected the total accounted for under IFRS 9
in relation to the Tricoya segment.
The other reserve represents the amounts received for subsidiary share capital
from non-controlling interests net with the carrying amount of non-controlling
interests issued during the Tricoya Consortium venture with the
non-controlling interests purchased in November 2022.
11. Borrowings
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2024 30 Sept 2023 31 March 2024
Amounts payable under loan agreements - undiscounted cashflows:
Within one year 3,998 11,462 1,646
In the second to fifth years inclusive 31,393 48,841 34,294
After five years 43,177 10,519 43,917
Less future finance charges (16,916) (6,642) (19,653)
Present value of loan obligations 61,652 64,180 60,204
11. Borrowings (continued)
ABN AMRO Debt Facilities
The facilities agreement with ABN Amro compromise a
- €33m remaining Term Loan facility and,
- €25m Revolving Credit Facility ('RCF').
- The facilities' maturity date is 31 March 2026.
- The term loan has no scheduled repayments of the term loan
until 30 June 2025, quarterly payments of €1.125m thereafter.
- Term loan interest varies between 4.34% and 5.34% with
additional rolled up interest of 3% accruing on €4.5 million for the period
from 5 October 2024 to 4 April 2025 and €6.75 million from 5 April 2025,
representing the Term Loan Facility amortisation payments that were deferred
under the amortisation holiday post the reporting date.
- RCF interest rate varies between 3.0% and 4.0% above EURIBOR.
Approximately €20m of the RCF has been utilised to provide a letter of
credit to FHB in support of the Accoya USA JV funding arrangements, and the
remaining €5m was undrawn at 30 September 2024.
The facilities are secured against the assets of the Group which are 100%
owned by the Company and include covenants such as net leverage, interest
cover which are based upon the results and assets which are 100% owned by the
Company and minimum liquidity covenants.
NatWest facility:
In November 2022, Tricoya UK Limited (the Company's subsidiary) agreed with
NatWest Bank plc to restructure its debt facility, reducing the principal
amount to a €6m loan with a 7 year term. The facility is secured by fixed
and floating charges over all assets of Tricoya UK Limited.
Interest is calculated with the margin ranging from 325 to 475 basis points
plus EURIBOR and capitalised during the 7 year term. No repayments are due
until the facility maturity date.
At 30 September 2024, the Group had €7.0m (31 March 2024: €6.7m) borrowed
under the facility.
Tricoya UK Limited also provided a Value Recovery Instrument ("VRI") agreement
to NatWest, to recover up to approximately €9.4m, on a contingent basis,
depending on profitability of the Tricoya UK plant once operational. Following
the decision to close the Tricoya UK plant, the financial liability raised to
account for the value recovery instrument has been released as an exceptional
item (see note 4).
First Horizon Bank facility:
The Company's joint venture, Accoya USA LLC has a facility from First Horizon
Bank ('FHB') of Tennessee, USA comprising:
- a $70m term loan and;
- a $15m RCF to fund working capital, which was increased by $5m
during the period.
- The facility has a maturity date of 2 March 2030.
- The term loan is secured on the assets of Accoya USA and is
supported by Accoya USA's shareholders, including $50m through a limited
guarantee provided on a pro-rata basis, with Accsys' 60% share representing
$30m, supported by a $20m Letter of Credit ('LC') provided by ABN AMRO to FHB.
- The interest rate varies between 1.3% to 2.1% over USD LIBOR.
- Principal repayments on the term loan commence one year following
the completion and start-up of the facility, and are calculated on a 9.5 year
amortisation period.
Accoya USA LLC is equity accounted for in these financial statements,
therefore this Borrowing is not included in the Group's borrowings. (See note
12).
Convertible loan notes:
Convertible loan notes were issued in November 2023 totalling €21 million.
The loan notes:
- are unsecured and non-transferable,
- have a maturity date of 22 November 2029,
- carry a fixed rate coupon of 9.5%. For the first 2.5 years the
coupon is rolled up and deferred and following the 2.5 year period, the
deferred interest can either be converted into ordinary shares of the Company
or paid in cash over the remaining 3.5 years at the option of the holders of
the convertible loan notes. Following that 2.5 year period, interest shall be
payable in cash.
The convertible loan note holders will have the right to convert the
convertible loan notes they hold into Ordinary Shares of the Company at a
price of 83.22 Euro cents per share.
11. Borrowings (continued)
Reconciliation to net debt:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2024 30 Sept 2023 31 March 2024
Cash and cash equivalents 26,000 20,780 27,427
Less:
Amounts payable under borrowings (61,652) (64,180) (60,204)
Amounts payable under lease liabilities (4,532) (4,788) (4,338)
Net debt (40,184) (48,188) (37,115)
Reconciliation to adjusted cash:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2024 30 Sept 2023 31 March 2024
Cash and cash equivalents 26,000 20,780 27,427
Less:
Cash pledged to ABN Amro - (10,016) -
Adjusted cash 26,000 10,764 27,427
Restricted cash
The cash and cash equivalents at 30 September 2023 disclosed above and in the
condensed consolidated statement of cash flow includes $10m which was pledged
to ABN AMRO as collateral. This collateral was released in the November 2023
amendment and extension of the ABN AMRO facilities, see above for further
details.
Free cashflow:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2024 30 Sept 2023 31 March 2024
Net cash from operating activities 8,717 630 7,197
Investment in property, plant and equipment and intangible assets (661) (2,292) (3,475)
Free cashflow 8,056 (1,662) 3,722
12. Investment in Joint Venture
In August 2020, Accsys together with Eastman Chemical Company formed Accoya
USA LLC, 60% owned by Accsys and 40% owned by Eastman. Accoya USA LLC has
constructed and is operating an Accoya plant in Kingsport, Tennessee (USA) to
serve the North American market. The plant is designed to initially produce
approximately 43,000 cubic metres of Accoya per annum and to allow for
cost-effective expansion.
Under IFRS 11 - Joint arrangements, the two parties are assessed to jointly
control the entity and Accoya USA LLC is accounted for as a joint venture and
equity accounted for within the financial statements.
At 30 September 2024, Accsys and Eastman have contributed equity of $83m to
Accoya USA LLC.
The borrowing facilities provided by First Horizon Bank ('FHB') of Tennessee,
USA are detailed in note 11.
The carrying amount of the equity-accounted investment is as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2024 30 Sept 2023 31 March 2024
€'000 €'000 €'000
Opening balance 31,685 30,859 30,859
Investment in Accoya USA 7,210 - 4,926
Less: Accsys share (60%) of licence fee received (450) - -
Loss for the period (6,098) (1,211) (4,100)
Closing balance 32,347 29,648 31,685
The Group has equity accounted for the joint venture in these condensed
consolidated financial statements.
Reconciliation of investment in Accoya USA:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2024 30 Sept 2023 31 March 2024
€'000 €'000 €'000
Net assets of Accoya USA (USD) 62,048 56,210 60,002
60% of net assets of Accoya USA (Eur) 33,350 31,856 33,359
Less: Accsys share (60%) of Licence fee received to date (1,950) (1,500) (1,500)
Foreign exchange movements 947 (708) (174)
Closing balance 32,347 29,648 31,685
12. Investment in Joint Venture (continued)
The statement of comprehensive income, statement of financial position and
statement of cashflows for Accoya USA LLC, are set out below:
Statement of comprehensive income:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2024 30 Sept 2023 31 March 2024
€'000 €'000 €'000
Total revenue 3,314 - -
Cost of sales (6,294) - -
Gross loss (2,980) - -
Operating costs (6,054) (1,917) (6,653)
Operating loss (9,034) (1,917) (6,653)
Interest payable (1,129) (102) (179)
Loss before taxation (10,163) (2,019) (6,832)
Tax expense - - -
Total comprehensive loss for the financial year (10,163) (2,019) (6,832)
Accsys share (60%) of US JV EBITDA (4,312) (1,046) (3,724)
Accsys share (60%) of US JV EBIT (5,420) (1,150) (3,993)
Accsys share (60%) of US JV total loss from operations (6,098) (1,211) (4,100)
12. Investment in Joint Venture (continued)
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2024 30 Sept 2023 31 March 2024
€'000 €'000 €'000
Non-current assets
Property, plant and equipment 124,694 101,629 122,662
Right of use assets 6,425 6,242 6,919
131,119 107,871 129,581
Current assets
Inventories 5,103 - 1,201
Trade and other receivables 1,950 149 114
Cash and cash equivalents 2,912 10,385 6,089
9,965 10,534 7,404
Current liabilities
Trade and other payables (8,941) (12,562) (10,508)
Lease liabilities (463) (408) (491)
(9,404) (12,970) (10,999)
Net current assets/(liabilities) 561 (2,436) (3,595)
Non-current liabilities
Lease liabilities (6,225) (5,951) (6,635)
Borrowings (69,874) (46,304) (63,701)
(76,099) (52,255) (70,336)
Net assets 55,581 53,180 55,650
Statement of Cash flows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2024 30 Sept 2023 31 March 2024
€'000 €'000 €'000
Cash flows from operating activities (13,424) 1,378 (4,679)
Cash flows from investing activities (5,778) (33,829) (56,553)
Cash flows from financing activities 16,198 34,135 58,620
Net (decrease) / increase in cash and cash equivalents (3,004) 1,684 (2,612)
13. Post Balance Sheet Events
Following a thorough review of all available strategic and funding options for
Tricoya UK, Accsys announced on 19 September 2024 that it would discontinue
the Tricoya plant in Hull owned by Tricoya UK.
Since that time, Tricoya UK has taken various steps to wind down its remaining
business operations and post the reporting date resolved to enter creditors
voluntary liquidation.
The Group has recognised an exceptional cash cost of €3.9m in the period and
a non-cash exceptional impairment charge of €18m. The Group will benefit
from annual operating cost savings of €3m from the plant closure and the end
of maintenance costs.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPGCPGUPCPGARecent news on Accsys Technologies
See all newsREG - Accsys Technologies - Appointment of Nominated Advisor and Broker
AnnouncementREG - Accsys Technologies - Holding(s) in Company
AnnouncementREG - Accsys Technologies - Holding(s) in Company
AnnouncementREG - Accsys Technologies - Holding(s) in Company
AnnouncementREG - Accsys Technologies - Investor Strategy Day
Announcement