REG - Accsys Technologies - Interim Results for six months ended 30 Sept 2021
23/11/2021 07:00
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RNS Number : 1970T Accsys Technologies PLC 23 November 2021
AIM: AXS
Euronext Amsterdam: AXS
23 November 2021
Accsys Technologies PLC
("Accsys", the "Group" or the "Company")
Interim Results for the six months ended 30 September 2021
Strong revenue growth - delivering on expansion strategy
Accsys, the fast-growing and eco-friendly company that combines chemistry and
technology to create high performance, sustainable wood building products,
announces its interim results for the six months ended 30 September 2021 ("H1
FY 22").
H1 FY 22 H1 FY 21 Change
Total Group revenue €56.2m €42.9m 31%
Underlying gross profit €17.2m €14.3m 20%
Accoya(®) Manufacturing margin(1) 31.0% 33.5% (250bps)
Underlying EBITDA(2) €4.5m €4.3m 5%
Underlying EBIT(3) €1.5m €1.6m (6%)
Underlying (loss) before tax (€0.3m) (€0.1m)
(Loss)/profit before tax (€0.2m) €1.0m
Period end net cash/ (debt)(4) €2.4m (€16.3m)
Accoya(®) sales volume 29,555m(3) 26,422m(3) 12%
Key highlights:
· Group revenue and Accoya(®) sales volumes up 31% and 12%
respectively versus the prior year comparative period, which was impacted by
COVID-19.
· Maintaining good profitability with underlying gross profit up
20%:
o Improvement in gross profit supported by Accoya(®) sales price increases
substantially offsetting higher raw material costs.
o 31% Accoya(®) manufacturing margin with 250bps decline due to changes in
product sales mix.
· 5% growth in underlying EBITDA(2) with planned investment in
group organisation capability to support growth and the expected production
capacity increases in 2022.
· Strategic growth projects under our '5x' production capacity
expansion target by 2025 are progressing well:
o World-first Tricoya(®) (Hull) plant - on track to commence operations by
July 2022.
o Accoya(®) (Arnhem) plant - addition of a fourth reactor (+33% new capacity
to 80,000m(3)) on track to be complete by around the end of Q1 calendar year
2022.
o Accoya(®) USA JV - further project work progressing; final investment
expected in coming months upon completion of financing workstream.
· 4% increase in operating cash flow(5) with continuing good cash
generation from Accoya(®) segment; Net cash of €2.4m includes cash of
€60.9m at period-end to fund expansion projects including planned US JV
investment; Recent Group debt refinance improving debt cost and structure.
Notes
(1 )Accoya(®) Manufacturing margin is defined as Accoya(®) segmental
underlying gross profit (excluding Licence income and marketing services)
divided by Accoya(®) segmental revenue (excluding Licence income and
marketing services) (See note 2 to the financial statements)
(2 )Underlying EBITDA is defined as Operating profit/(loss) before Exceptional
items and other adjustments, depreciation and amortisation, and includes the
Group's attributable share of our USA joint venture's underlying EBITDA. (See
note 2 to the financial statements).
(3 )Underlying EBIT is defined as Operating profit/(loss) before Exceptional
items and other adjustments, and includes the Group's attributable share of
our USA joint venture's underlying EBIT. (See note 2 to the financial
statements).
(4 )Net cash/(debt) is defined as short term and long-term borrowings
(including lease obligations) less cash and cash equivalents. (See note 12 to
the financial statements).
(5) Group operating cashflow is Cash inflows from operating activities before
changes in working capital and exceptional items.
Robert Harris, CEO, commented:
"We are pleased to report our first half results, delivering strong growth in
both revenue and gross profits. This performance demonstrates further progress
on our strategy and the hard work of our employees to deliver for our
customers.
There is continuing high demand for our Accoya(®) and Tricoya(®) products as
customers focus on higher performance materials as well as on sustainability.
It is this demand, which continues to exceed supply, that has enabled us to
substantially offset the wider market pressures from raw materials costs and
supply chain disruption through price increases.
We are progressing our strategic growth projects to increase production
capacity five-fold by 2025. The construction of a fourth Accoya(®) reactor in
Arnhem is progressing well and our US Accoya(®) JV with Eastman is
approaching its final investment decision. With Accsys now directly
project-managing the completion of our Hull Tricoya(®) facility, we have made
good progress towards the plant being commercially operational by July 2022.
Our expansion at Arnhem and the new Hull plant will together see Accsys double
its present operating production capacity of 60,000m(3) to 120,000m(3) by July
2022.
Looking ahead we remain confident in delivering on market expectations. Longer
term we believe there will be significant further demand for Accsys' higher
performance, lower maintenance and more sustainable products as the world
focuses on decarbonisation."
Analyst presentation
There will be a presentation relating to these results for analysts at 10:00am
UK time (11:00am CET) today. 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/nbrgpb82
(https://protect-eu.mimecast.com/s/iDLOCE933hWML2HNL6dF)
Conference call details (audio only - not recommended for use in conjunction
with the webcast link):
Event Passcode: 3673829
Local - United Kingdom: +44 (0) 2071 928338
National free phone - United Kingdom: 0800 279 6619
Local - Amsterdam, Netherlands: +31 (0) 207 956 614
National free phone - Netherlands: 0800 023 5015
Local - USA: +1 6467 413 167
National free phone - USA: 18 778 709 135
Ends
For further information, please contact:
Accsys Technologies PLC ir@accsysplc.com (mailto:ir@accsysplc.com)
Sarah Ogilvie, Investor Relations
Numis Securities (London) +44 (0) 20 7260 1000
Oliver Hardy (NOMAD), Ben Stoop
Investec Bank plc (London) +44 (0) 20 7597 5970
Carlton Nelson, Alex Wright
+31 20 344 2000
ABN Amro (Amsterdam)
Richard van Etten, Dennis van Helmond
FTI Consulting (UK) +44 (0) 20 3727 1340
Matthew O'Keeffe, Alex Le May
Off the Grid (The Netherlands) +31 681 734 236
Frank Neervoort, Yvonne Derske
Notes to editors:
Accsys (Accsys Technologies PLC) is a fast-growing business with a purpose:
changing wood to change the world. The company combines chemistry, technology
and ingenuity to make Accoya(®) wood and Tricoya(®) wood elements: high
performance wood products that are extremely durable and stable, opening new
opportunities for the built environment and giving the world a choice to build
sustainably. Accsys transforms fast-growing, certified sustainable wood into
building materials with an up to 50-year warranty, locking carbon stored in
the wood into useful products for decades, with performance characteristics
that match or better those of non-renewable, resource-depleting and polluting
alternatives. Accsys is listed on the London Stock Exchange AIM market and
on Euronext Amsterdam, under the symbols 'AXS'. Visit www.accsysplc.com
(http://www.accsysplc.com)
Accoya(®) solid wood is sustainable, durable, and stable with exceptional
performance, finish and sustainability. Accsys' proprietary acetylation
process makes the wood more dimensionally stable and because it is no longer
easily digestible, extremely durable. It is one of very few building materials
to be Cradle to Cradle Certified™ at the Gold level, with a Platinum rating
for Material Health, confirming that no harmful or toxic additives or
chemicals are present to leach out into the environment. Primary applications
for Accoya(®) wood include windows, doors, cladding and decking, where the
combination of performance and sustainability benefits compete favorably
against hardwoods, plastics, metals and concrete. Visit www.accoya.com
(http://www.accoya.com)
Tricoya(®) acetylated wood elements are produced for use in the fabrication
of panel products such as medium density fibreboard (MDF). Panel products made
with Tricoya(®) wood elements are truly durable and stable enough for use
outdoors and in wet environments, unlocking new possibilities for design and
construction. They have been lauded as the first major innovation in the wood
composites industry in more than 30 years and bring the flexibility of
traditional panel products and sustainability benefits of wood to a whole new
range of applications. Visit www.tricoya.com (http://www.tricoya.com)
Any references in this announcement to agreements with Accsys shall mean
agreements with either Accsys or its subsidiary entities unless otherwise
specified. 'Accsys' and 'Accsys Technologies' are trading names of Titan Wood
Limited ("TWL"), a wholly-owned subsidiary of Accsys Technologies PLC.
Accoya(®), Tricoya(®) and the Trimarque Device are registered trademarks
owned by TWL, and may not be used or reproduced without written permission
from TWL, or in the case of the Tricoya(®) registered brand trademark, from
Tricoya Technologies Limited, a subsidiary of TWL with exclusive rights to
exploit the Tricoya(®) brand.
Accsys Technologies PLC
Chief executive's statement
Introduction
Accsys has delivered strong revenue growth in the first half of the 2022
financial year, reflecting the continuing significant demand for our products
while also investing in our manufacturing and organisational capability to
deliver the growth opportunity ahead of us.
In the period we have made good strategic progress under our long-term plan to
increase production capacity five-fold to 200,000 m(3) per annum in 2025. Work
to expand our Arnhem plant capacity by 33% continued, and we successfully
completed the equity funding and made key preparations for our planned JV to
build an Accoya(®) production facility in North America. Despite challenges
in the completion of the Hull Tricoya(®) plant, we have successfully taken
control of the site, and are now directly managing the final completion
ourselves towards commercial operations by July 2022.
This has also been an important period of investing in our business and
people. New colleagues have joined bringing expertise in functional areas to
help lead and deliver our growth ambitions and we have begun to increase our
operating teams ready to operate our new facilities. In H1 FY22 we have
continued to develop our safety culture and processes and were free of
lost-time incidents in the period.
Despite wider market pressures around raw materials and supply chains across
many industries in this period, Accsys has delivered a robust performance and
delivered further growth in underlying EBITDA. While we have seen increases in
raw material costs, we have been able to substantially offset this through
increased sales prices. This resilience has been supported by the strength of
our supply contracts and nature of our raw materials with a partial natural
hedge created by the conversion back into acetic anhydride or sale of valuable
acetyl by-product.
Summary of results
The Group has delivered strong revenue and sales volume growth while remaining
capacity constrained at our Arnhem plant. Total revenue for the 6 months ended
30 September 2021 increased by 31% to €56.2m (H1 FY21: €42.9m). Accoya(®)
sales volumes of 29,555 cubic metres represent a 12% increase compared to the
equivalent period last year which was impacted by COVID-19. We also grew
revenues through an increase in average selling prices for our
high-performance wood products.
In the period manufacturing margin was 31%, just above our target 30% level,
with good cash generation. Higher average sales prices were the result of
product price increases that took effect during the period and in H2 FY21,
which helped to substantially offset increased raw material prices and reflect
the continuing strong demand in the market for our products. A change in the
mix of products sold year on year also impacted the percentage margin, where
sales of lower priced Accoya(®) for Tricoya(®) and tolling (where we process
the wood but are not responsible for the raw wood purchase and as a result are
lower priced) were higher in the prior year due to the supply chain
dislocation experienced in the early stages of the pandemic.
Group underlying EBITDA increased 5% against the prior year to €4.5m,
despite higher Group operating costs in the period through planned investment
in Group organisational capabilities and people with increased headcount to
support our future growth. We have closed the period with a robust balance
sheet with €2.4m net cash, with cash of €60.9m including the funds raised
ready for investment in our US Accoya(®) JV.
COVID-19
During the first 6 months of the 2022 financial year, we have not seen the
same level of direct impact from COVID-19 on our revenue and sales as we did
in the prior year. However, as with many businesses, the pandemic continues to
affect the business indirectly. It has also contributed to the additional
delay and challenges in completing construction and bringing production online
at our Hull plant where the EPC lead contractor's agreement was terminated as
previously announced.
We are continuing to operate in a more COVID-safe way to protect our people
and those who we do business with. We continue to manage some supply chain
effects which have impacted industries more broadly, which we detail later in
these reports.
Last year during the 2021 financial year we received some government support
in the Netherlands and the UK for our operations in the initial stages of the
pandemic. At that time, Directors and other senior staff accepted a 20%
reduction in their pre-tax salary for four months as part of our mitigation
measures. Relative to many other organisations around the world, the effects
of the pandemic on Accsys' financial performance has been limited by virtue of
the strong underlying demand for our products and the rapid recovery in sales
volumes. In H1 FY 22, after the scope of impacts and resilience became clear,
we paid back in full the government grants received. In May 2021 while the
Board and senior management team retained the 20% salary reduction, we paid
back the salary difference to all employees below the senior-management team
level, reflecting their hard work throughout that challenging period.
Accoya(®) - Global performance
Six months Six months
Accoya(®) segment - summary of results ended 30 September ended 30 September Change
2021 2020
Accoya(®) sales volume - cubic metres 29,555 26,422 12%
Underlying Accoya(®) segmental revenue €55.4m €41.8m 33%
Accoya(®) wood revenue €48.5m €38.7m 25%
Licence income €nil €0.4m -100%
Acetic acid sales €6.8m €2.6m 162%
Manufacturing margin - % 31.0% 33.5% -2.5% pts
Underlying EBITDA €10.3m €9.2m 12%
Underlying EBIT €8.0m €7.0m 14%
The Accoya(®) business delivered good growth in volumes in the first half of
FY22, despite remaining at capacity production levels and with customer demand
for our product continuing to exceed supply. A 12% increase in sales volumes
was the combined result of our ongoing efficiency programme to improve
productivity, lower production volumes in the prior year in Q1 due to the
initial stronger effects of the COVID-19 pandemic, and the deferral of our
scheduled maintenance stop at Arnhem into the second half of FY22 to coincide
with planned tie-ins for the fourth reactor project.
Accoya(®) revenue growth of 33% reflects these same factors driving the sales
volume growth, and further supported by increased average sales prices in the
period. These price increases reflect both the continuing strong demand from
customers and higher raw material and logistics costs in our supply chain in
the period. Price rises were implemented in the last financial year for all
customers and have continued to benefit the first half of the 2022 financial
year. In addition, we have put through further price increases in the period
in June 2021 and September 2021. Average prices were also higher than the
prior year period due to changes to the product mix, which included a lower
proportion of material sold to Tricoya(®) customers and lower tolling sales.
Overall, we have continued to see strong underlying demand for Accoya(®)
across our regions and with our Tricoya(®) panel manufacturing partners.
Our H1 FY22 regional sales trend on a period-on-period basis, primarily
reflects the impact of the early stages of the pandemic on prior year sales in
our different regions in H1 FY21. The strong growth in H1 FY22 sales to the UK
& Ireland compares against the significant negative decline in H1 FY21
sales volume to UK & Ireland which was more acutely impacted by supply
chain dislocation in the early stages of the pandemic. By comparison H1 FY21
sales volumes were stronger in Europe as we redirected volume around the UK
disruption, and in this period's results this appears as a negative movement
in Rest of Europe. Excluding the one-off nature of COVID-19 comparative
impacts from the 2021 financial year, over-all we believe that the regional
demand and sales volumes flow in our geographic markets is steady
period-on-period. The exception to this is the Americas, where we are actively
increasing our allocation of product volumes available to customers as we
develop this market ahead of our planned US capacity expansion.
Sales volume by end-market H1 FY22 H1 FY21 Increase
m3 m3 %
UK & Ireland 8,373 5,878 42%
Rest of Europe 5,780 7,102 (19%)
Tricoya(®) 7,092 7,275 (3%)
Americas 3,909 2,231 75%
Benelux 2,091 2,461 (15%)
Asia-Pacific 2,010 1,316 53%
RoW 300 159 89%
29,555 26,422 12%
Accoya(®) manufacturing gross margin was 31.0% (H1 FY21: 33.5%). Whilst this
is 2.5% lower than the prior year, it remains above our target range of 30% or
higher. While the higher average selling price in the period more than offset
the effect from the higher raw material costs, the margin also reflects a
shift in the mix of types of products sold within Accoya(®) against the prior
year period as explained above. In H1 FY21 we increased sales of material for
Tricoya(®) and of tolling sales due to the initial supply chain disruption
impacting certain geographies at the time from COVID-19 effects. In H1 FY22
these sales reverted to a normal level.
Accoya(®) strategic progress
In the period we made good progress in projects to expand our Accoya(®)
production capacity and business development projects in the Netherlands, the
USA, and the UK. Work continued to expand the capacity of our existing
Accoya(®) plant in Arnhem by adding a fourth reactor, through which we expect
to increase the site capacity by 33% to an annual production capacity of
80,000 cubic metres. Having 'broken ground' for the construction in February
2021, we received the new reactor on site in May 2021. The civil works have
now been completed and the main steel structure is erected, with equipment and
piping in the process of being installed.
The broader expansion project also includes increased chemical storage and an
upgrade of our wood handling equipment, which will benefit the entire Arnhem
plant. The expansion remains on track to be complete by around the end of Q1
calendar year 2022.
North America represents the largest potential regional market for our
product, with an achievable market for Accoya(®) there of up to 948,500 cubic
metres per annum within a wider addressable market of up to approximately 9.6
million cubic metres. North America is a market that Accoya(®) is already
sold into, but in which we are also significantly constrained by the volume of
product we can produce from our Arnhem facility. We have strong foundations
for growth in the region with a number of key distributor customers in place
and have rolled out our Approved Manufacturers Programme for our distributors'
customers, which has been highly successful in Europe.
Under the joint venture with Eastman Chemical Company (NYSE: EMN), a world
leader in the production of acetyls, we are planning to construct an
Accoya(®) plant in USA with an initial approximately 40,000 cubic metres
capacity at Eastman's Kingsport, Tennessee site, and replicate our existing
Accoya(®) technology at Arnhem. Under the JV, Accsys holds a 60% interest and
Eastman a 40% interest.
In the first half of the 2022 financial year, we have completed a number of
workstreams in the planning for the plant. The detailed front-end engineering
design ('FEED') of the plant has been completed. The initial plant designs
will target a two-reactor 40,000 cubic metres capacity plant, while the plans
and site also allow for further efficient expansion (subject to market
conditions) of up to eight reactors in total. Key commercial agreements
between the JV parties in relation to operational support and supply
agreements, for example in relation to raw materials supply, support services,
land and utilities have been well advanced and are expected to be entered into
on completion of the financing work stream.
The project will be funded through a combination of equity contributions from
the JV partners, and project debt finance. In May 2021, Accsys successfully
completed the issuance of new shares to fund Accsys' equity share of the
project, through a placing and open offer. Further details on this can be
found in the Financial Review. The workstream to complete the project debt
finance is continuing and we expect to finalise terms in the coming months in
line with our anticipated returns.
We expect that the plant will take approximately two years to construct from
the point of the final investment decision. Following construction, sales are
expected to ramp up over a further two years to the plant's full production
capacity. The planning to date confirms the strong financial returns from the
plant itself, with a leveraged pre-tax IRR of over 20% targeted. In addition,
Accsys will licence its technology to the Accoya(®) USA JV, with sales and
marketing support also expected to be provided by Accsys under a separate fee
bearing agreement with the Accoya(®) USA JV.
Accoya(®) Color combines the benefits of Accoya(®) wood with colour all the
way through the wood from surface to core, achieved through a patented
process. Since launching Accoya(®) Color in the DACH region (Germany,
Austria, and Switzerland) in Europe last year, we have seen very strong demand
from our customers, with a present focus on the decking product category.
On 29 July 2021 we announced plans to expand our ability to produce Accoya(®)
Color, through the acquisition of assets of the former Lignia Wood Company
business in Wales, UK for consideration of €1.2m. Through the acquisition,
which included equipment, raw wood inventory, and technology at the 50,000
square foot (4,650 square metre) manufacturing plant in Barry, Wales, Accsys
has increased its ability to convert Accoya(® ) wood into its new Accoya(®)
Color product. The integration of the acquisition is progressing well, we
successfully repurposed the site for Accoya(®) Color production and produced
our first batch of Accoya(®) Color at the site in the period.
The purchased assets will allow us to accelerate our plans to grow Accoya(®)
Color both in its current markets and into more geographic markets and for
more product applications as part of our ongoing global growth strategy.
Once integrated, the site will be expected to be able to produce up to
12,500 cubic metres of Accoya(®) Color per annum with expansion in future
being possible. We therefore expect increased Accoya(®) Color sales in the
medium term with its unique proposition proving attractive to customers in our
target markets. This will be supported by increased sales and marketing
activity overall to drive end consumer awareness and demand.
Tricoya(®)
Strategic progress
Accsys and its consortium partners in Tricoya UK Limited ('TUK') are building
the world's first Tricoya(®) plant at Hull. During the period and despite
ongoing challenges in progressing the plant, further progress has been made
towards its completion. The plant, which is in its final stages of
construction, is due to become operational by July 2022.
In April 2021 we updated our guidance and at that time we expected a
three-to-six month delay to the lead contractor's schedule in completing the
construction. Subsequently in early June 2021, we received a notice from the
lead contractor responsible for the delivery of the plant, purporting to
terminate the engineering, procurement, and construction ('EPC') agreement for
the project by reason of force majeure arising out of the COVID-19 pandemic.
In June 2021 Accsys took over the project to complete the final stages of
plant construction and conducted an extensive gap analysis to review and
validate the remaining works, costs, timeline, and people required to complete
the project.
On 23 August 2021 we provided an updated outlook for the completion of the
project. This included an updated timeline where the plant is now anticipated
to be commercially operational by July 2022. The remaining final stages of the
works are being directly project managed by TUK with experienced internal and
recently-added people and resources, without requiring the appointment of
another lead EPC contractor. Third-party expertise and support are being
brought in as and when required to complete works safely and quickly. Since 23
August various workstreams have safely re-commenced on the site with a
significant increase in our own project team, improvements to project
governance, and the engagement and remobilisation of key mechanical,
electrical, and civil contractors.
We also announced in August 2021 that TUK and the former lead EPC contractor
had entered into a settlement agreement where the parties settled and released
each other from liability for claims against each other under the EPC
contract, including any claims in respect of COVID-19 and outstanding
contractual payments.
At that time we also reported that the total project capital cost is expected
to be an additional €9m to €15m more than previously anticipated. The
additional costs are largely due to the extended project duration, including
the previously reported engineering changes, delays due to COVID-19, and time
and recovery actions resulting from past management of, and demobilisation
from, the site. The costs also reflect the settlement agreement with the
former lead contractor. As a result, the total cumulative project capital cost
for the plant is anticipated to be €90m to €96m.
In the process of taking over control of the site and establishing the
remaining works required for completion, TUK has used third party experts to
review the overall integrity of the plant. These reports have not indicated
any material issues with the plant.
Recently on 8 November, after the end of the reported period, Accsys agreed
funding arrangements with our TUK consortium partners relating to the
anticipated costs to complete the plant. Accsys has entered into a new loan
agreement with TUK under which Accsys will lend up to €17m to TUK to be used
towards the Hull plant construction project alongside existing funding in
place for TUK. The supply and offtake agreements with TUK partners Medite
(sale and purchase of Tricoya(®) wood elements) and INEOS (acetic anhydride
supply) have also been updated and reflect the partners' ongoing commitment to
the project.
Recently in November we successfully ran our first batch of wood chips through
the first stage of the front of plant, as we begin to test and commission
parts of the plant once they are completed. The introduction of wood chips is
the first time that we have run the equipment in this zone of the plant in
combination with our raw material wood chips, and we are looking forward to
bringing more zones into commissioning as we work through the remaining works
to completion.
Our planning for the plant continues to allow for the ramp-up of production to
full capacity over approximately three years following start-up. This reflects
that this is the first plant of its type and that various modifications and
operating improvements may be identified once the plant is initially
operational. Once at capacity, we continue to expect that a gross margin of
approximately 40% should be achievable. Accsys remains committed to the safe
completion and operation of the plant to realise the potential of the
Tricoya(®) product with a large market opportunity, and ongoing high demand.
Once the Hull plant is operational, we plan to expand Tricoya(®) production
in Malaysia. We have an on-going feasibility study with PETRONAS Chemicals
Group Berhad for the construction of a Tricoya(®) plant in Malaysia. The
full decision to progress with the plant will only follow after the Hull
Tricoya(®) plant has been operational for a sufficient period to ensure that
any engineering learnings can be factored into the Malaysian plant design.
Group Strategic Development
Technology & IP
Accsys continues to invest in growing, researching, developing and protecting
its valuable portfolio of intellectual property and confidential information.
Our technology covers not only the physical equipment and engineering that
underpins our manufacturing and production, but also the processes and
methodology we follow in our entire supply and production chain, from the way
we prepare our wood to the way we market and sell Accoya(®) and Tricoya(®)
in the market.
We continue to carry out research and development projects on all aspects of
our technology, including our process technology where we continually aim for
the best efficiency and best quality for our products and production.
We have reviewed and implemented new improved procedures seeking to safeguard
as much as possible our proprietary information and are working with teams
across the Group to ensure better understanding of, and training on, our
confidentiality protocols. In addition, enhanced procedures have been
incorporated into our project management process to capture protectable
technology as early as possible.
Accsys' patent portfolio totals 399 patent family members, covering 27
distinct inventions in 45 countries with over 60% of the patent family members
now granted. The core technologies associated with our current and future
plants for the production of Accoya(®) and Tricoya(®) wood products continue
to be protected by using a combination of patenting and trade secrets to
maintain our differentiation in the marketplace.
Our principal trademark portfolio covers our brands Accoya(®), Tricoya(®),
the Trimarque device and Accsys(®), protected by registrations in over 60
countries, with continued activity focused on increasing the strength of those
brands.
Accsys continues to maintain an active watch on the commercial and IP activity
of third parties to ensure its IP rights are not infringed, and to identify
any IP which could potentially hinder our commercial activity.
Building organisational capability
In the period we have made good progress in developing our people and
organisational capabilities to manage our growth, with Accsys' average
headcount increasing from 190 to 241 people. Key hires in place include new
heads of departments hired last year, whom now are developing platforms for
supporting our growth and ensuring that the Group can expand effectively
including into new locations. The areas in which we have added these senior
leaders include HSE, Technology, Engineering, IT, and Acetyls management.
We have also increased our headcount through the recruitment of new operating
roles for our teams who will operate our expanded capacity at Arnhem and new
capacity at Hull as these become operational and expanded our project
management team at Hull in the period to oversee the project construction as
previously mentioned.
In addition, we are increasing our focus on training and development and have
established leadership training programmes and talent mapping, which is an
ongoing but important process to ensure we have the right skills and talent in
place and a pipeline to maintain this, during our growth journey.
Environment, Social and Governance
Accsys remains committed to growing and operating its business in a
sustainable way. In H1 FY22 we have continued to build on the foundations we
laid in November 2020 when we launched our first sustainability report and new
ESG strategy. In that report we identified our 10 key material issues and
impact areas and created an ESG framework that aligns with our purpose,
values, and strategy, while also setting out how we contribute to five main UN
Sustainable Development goals, with additional impacts on seven more.
Since November 2020, we have completed stage one of our sustainability
strategy roadmap. This has included reviewing and developing our data and
assessments, establishing baseline metrics, and identifying initial actions
for improvement in each of our material issues. We are now working on stage
two which is to set the direction of ESG development we want to make in each
of our key areas.
In H1 FY22 we have made good progress in four key ESG material issue areas.
Safety
Health & Safety (HSE) remains an absolute priority for the Group and we
are aiming to ensure zero harm in our operations and increase our monitoring
and awareness of our safety policies and strategy as well as developing a
safety-first culture across our organisation. We are monitoring a number of
metrics in FY 22 as we implement this, which include increased safety
observation reporting, increased safety inspections and audits, increased
safety communication and awareness.
In H1 FY22 we have increased our focus on leading indicator reporting, for
example increasing our rate of safety inspection tours made by our senior
leadership teams on our sites and our safety observation card (SOC) reporting.
SOCs are also an important tool in embedding a safety-focussed culture by
increasing safety awareness. Each month we also now communicate a HSE
scorecard to all staff, sharing our HSE performance and where we are against
our ambition to achieve zero lost time accidents, zero major injuries whilst
improving our leading HSE performance indicators. In the 2021 financial year
we reported three lost time incidents (LTIs), a lagging safety indicator. In
the H1 FY 22 period we have had no lost time incidents, which is a positive
development, and our goal remains zero LTIs.
Accsys has also established a Board HSE committee to provide dedicated
governance oversight of HSE at a Board level. Accsys considers that good HSE
performance is good for business and with the continued support of our people
we aim to continue to develop our safety practices and zero-harm commitment.
Energy & Climate change
We are in the process of developing our specific Energy & Climate change
policy. This has included both developing the way that we assess the impact of
our operations on the environment, which will lead to a robust approach and
policy to reduce our impacts.
Our approach to Energy & Climate includes a focus on energy efficiency and
process optimisation, assessing the carbon impact of our products and
integrated climate considerations and activities (e.g. risks and
opportunities) across multi-functions across the business.
Society and Communities
In the period we have begun to implement our new Society and Communities
strategy, under which we have developed a more structured approach to social
and environmental impact through tools such as charitable giving and employee
engagement. We began working with our official charity partners and to engage
our employees in our chosen charities' missions.
In September we completed a charitable employee initiative called 'Step out,
to help out!'. This saw colleagues across our organisation collectively walk
over 16,000km over two months in the summer to promote wellbeing throughout
Accsys and in our wider society. The challenge was set up to boost employee
wellbeing particularly during the pandemic which has affected daily life over
the past year.
Recording their walks online and sharing photos and anecdotes along the way,
the Accsys team walked a distance to cover the journey between Accsys' global
office locations: from Arnhem in the Netherlands, to Hull in the UK, via our
Head Office in London and on to our North American Sales Office in Dallas, USA
- and then back again. As colleagues
passed each milestone stage of the journey, this also triggered Accsys to
pledge donations to three charities which were chosen due to their focus on
improving wellbeing in Accsys' communities, with a total of €10,000 donated.
Sustainable & Quality products
In the period we achieved a renewal of our Cradle to Cradle (C2C) gold
certification for Accoya(®), where C2C certified(®) is the global standard
for products that are safe, circular and responsibly made. Accoya(®) wood is
one of the very few building products to have acquired C2C certification on
the stringent Gold level. C2C assesses the safety, circularity and
responsibility of materials and products across five categories of
sustainability performance, including material health where Accoya(®)
achieves a platinum rating.
Outlook
In summary, we are pleased to report our first half results, delivering strong
growth in both revenue and gross profits. This continued strong performance
demonstrates further progress on our strategy and the hard work of our
employees to deliver for our customers.
There is continuing high demand for our Accoya(®) and Tricoya(®) products as
customers focus on higher performance materials as well as on sustainability.
It is this demand, which continues to exceed supply, that has enabled us to
substantially offset the wider market pressures from raw materials costs and
supply chain disruption through price increases.
We are progressing our strategic growth projects to increase production
capacity five-fold by 2025. The construction of a fourth Accoya(®) reactor in
Arnhem is progressing well and our US Accoya(®) JV with Eastman is
approaching final investment decision. With Accsys now directly
project-managing the completion of our Hull Tricoya(®) facility, we have made
good progress towards having the plant commercially operational by July 2022.
Our expansion at Arnhem and the new Hull plant will together see Accsys double
its present operating production capacity of 60,000 cubic metres to 120,000
cubic metres by July 2022.
Looking ahead we remain confident in delivering on market expectations. Longer
term we believe there will be significant further demand for Accsys' higher
performance, lower maintenance and more sustainable products as the world
focuses on decarbonisation.
We remain confident in the significant long-term growth opportunities ahead
and in our ability to execute our strategy in pursuit of sustainable growth.
Rob Harris
Chief Executive
22 November 2021
Accsys Technologies PLC
Financial review
Introduction
Accsys has delivered a good financial performance in the first half of the
2022 financial year. As our business grows, we are seeing further growth in
profit, while investing in capital projects that will see us double our
production capacity by July 2022. We have also increased our investment in our
people and organisation to be ready to effectively manage this growth as we
shift to have multi-site, global operations.
In the period we have not seen the same level of financial or trading impact
from COVID-19 as we did in the first quarter of FY21, but we continue to take
actions to remain defensive to wider market conditions which are partial
consequences of the pandemic.
This includes, maintaining a close focus on working capital management and
debtor days, ensuring we remain less impacted by energy and wood market
volatility through good supply contracts and leveraging our natural hedge from
reselling our Acetic Acid by-product. We are also rebuilding our inventory
levels to maintain a buffer against supply chain and shipping disruptions.
Despite wider market pressures in these areas in H1 FY22, Accsys has continued
to grow revenue, profit, and volumes, whilst remaining at capacity-levels of
production.
In H1 FY22 Accoya(®) sales volumes grew by 12%, with a 31% increase in
Revenue and 20% increase in underlying Gross Profit which reflects an increase
in the average sales price and a stronger year-on-year performance against a
COVID-impacted prior year period. Group underlying EBITDA increased 5% to
€4.5m with planned increased investment in organisational capability and the
recruitment of operational teams ahead of the commercial start-up of the
Accoya(®) Reactor 4 expansion project in Arnhem and the Tricoya(®) plant in
Hull.
The Accoya(®) business continued to perform strongly, with Accoya(®)
underlying EBITDA increasing 12% to €10.3m, delivering Group operating
cashflow before working capital changes and exceptional items of €5.0m (H1
FY21: €4.8m).
Net debt decreased €14.6m in the period to a Net cash position of €2.4m,
following the May 2021 equity capital raise with net proceeds of €34.6m
partially offset by investment in additional production capacity in Hull and
Arnhem.
Statement of comprehensive income
Group revenue increased by 31% to €56.2m for the six months ended 30
September 2021 (H1 FY21: €42.9m).
Accoya(®) sales volumes were 12% higher, with the prior year period impacted
by COVID-19, particularly in the first quarter (Accoya(®) sales volumes in H1
FY21 were 6% lower than in H1 FY20). To optimise timing for the Reactor 4
expansion project in Arnhem, the usual H1 annual maintenance stop has been
moved to the second half of the financial year. An increase in the average
sales price was driven by planned price increases in the period and prior
year, which together with the increase in sales volumes resulted in revenue
from Accoya(®) wood increasing by 25% to €48.5m.
Included within Accoya(®) wood revenue, in the Accoya(®) segment, are sales
for the manufacture of Tricoya(®) panels, which increased to €8.5m (H1
FY21: €8.3m). These sales represent 24% of Accoya(®) sales volumes (HY1
FY21: 28%), and are used to develop the market for Tricoya(®) products ahead
of the start-up of the Tricoya(®) plant.
Tricoya(®) wood revenue of €0.9m (H1 FY21: €1.1m), in the Tricoya(®)
segment, represented sales of Tricoya(®) panels, purchased from our
Tricoya(®) licensees, to sell into other geographies in order to provide
initial market seeding material for the global Tricoya(®) market.
Licence revenue of €9k was reflected in our Tricoya(®) segment in the
period. In the prior year period, €0.4m was reflected in the Accoya(®)
segment, principally attributable to the licence agreement entered into with
Accoya USA LLC, a company formed together with Eastman Chemical Company (and
accounted for as a joint venture), with the intention to construct and operate
an Accoya(®) wood production plant to serve the North American market.
Other revenue increased to €6.9m (H1 FY21: €2.7m) driven by higher sales
prices for the sale of our acetic acid by-product.
Higher input costs were also experienced during the first half, with Anhydride
pricing increasing on H1 FY21 average pricing due to higher energy commodities
pricing in the market. The sale of acetic acid continued to act as a partial
hedge, in the first half, to the increase in Anhydride pricing, covering over
half the financial effect from the increase in Anhydride pricing. When
considered as a Net Acetyls cost, the net cost increased 26% compared to H1
FY21.
Raw wood input costs were also moderately higher, however overall our pricing
trend on this raw material remains more stable than the wider lumber market as
we purchase appearance-grade wood under long term supply contracts with many
of our partners.
Underlying Gross margin decreased from 33% to 31% compared to the prior year
period, with the Accoya(®) manufacturing gross margin also decreasing by 2.5%
to 31%. The decreases were principally due to the sales mix in the period,
with the effect of the sales price increases, substantially offsetting the
effect from the higher raw material costs, mentioned above.
Underlying other operating costs excluding depreciation and amortisation,
increased from €10.0m to €12.6m. This increase was due to an increase in
staff costs with average Group headcount increasing by 51 to 241 for the
current year period and temporary salary decreases implemented in the prior
year period. This increase in headcount includes the remainder of the Hull
operating team joining towards the end of H2 FY21, an increase in the Arnhem
operating team ahead of the 4th reactor starting up, the Group investing in
its Organisational capability with the hiring of several heads of department
and other related hires in the second half of FY21, and the addition of 11
former Lignia employees who joined Accsys following the purchase of assets in
Wales, to grow production of Accoya(®) Color.
Sales and marketing costs (excluding staff costs) also increased by €0.5m
compared to the prior year period.
Depreciation and amortisation charges and underlying finance expenses were
largely in line with the prior year.
Exceptional items include €0.1m for redundancy payments related to the
purchase of assets to be utilised to manufacture Accoya(®) Color in Wales. In
the prior year period, exceptional items included COVID-19 related staff
support funding from the Netherlands and UK governments totalling €0.6m,
which was reversed in H2 FY21 and repaid earlier this year.
Other adjustments for the period include a foreign exchange gain of €0.2m
(H1 FY21: €0.5m) on loans held in pounds sterling with BGF and Volantis and
foreign exchange differences on cash held in pounds sterling, which is used
primarily to act as a cash flow hedge against future sterling project
expenditure on the new plant being constructed in Hull and to a lesser extent,
as a cashflow hedge against future sterling corporate costs. The effective
portions of the cash flow hedges are recognised in other comprehensive income.
Underlying loss before tax increased €0.2m to €0.3m. After taking into
account exceptional items and other adjustments, loss before tax increased by
€1.2m to €0.2m (H1 FY21: profit of €1.0m).
The tax charge of €0.6m was in-line with the prior year period (H1 FY21:
€0.6m).
Cash flow
Cash flows generated from operating activities before changes in working
capital and exceptional items increased by 4% to €5.0m compared to €4.8m
in the prior year period reflecting the strong operational cash flow being
generated by the Group.
Inventory levels increased by €5.8m during the period from a lower than
optimal level at the start of the year, and are expected to increase in the
second half ahead of the Arnhem Reactor 4 and Hull Tricoya(®) plant start-up.
In May 2021, Accsys completed a successful Placing and open offer for an issue
of shares in the Company, raising net proceeds of approximately €34.6
million. The net proceeds are to be used primarily to fund the Group's
investment in expanding its Accoya(®) business into North America through the
construction of a new Accoya(®) USA plant, through its joint venture with
Eastman Chemical Company ('Eastman'), as well as to provide additional capital
to support the Group's continued growth and ongoing development.
At 30 September 2021, the Group held cash balances of €60.9m, representing a
€13.3m increase in the period from 31 March 2021. The cash increase in the
period is attributable to the successful Placing and Open offer and cash flow
generated from operating activities referred to above, partially offset by
investments in tangible fixed assets of €17.2m, primarily reflecting the
construction progress made on the Arnhem plant expansion project (€12.1m)
and our Tricoya(®) plant construction in Hull (€3.7m) and the increase in
inventory referred to above.
In July 2021, Accsys entered into a sale and purchase agreement with Lignia
Wood Company Limited ('Lignia') and its administrators, to acquire certain
assets, equipment and technology for €1.2m, including €0.5m for raw wood
inventory. The purchased assets will enable Accsys to grow production and
availability of Accoya(®) Color more rapidly, accelerating the launch of the
product into more geographic markets and for more product applications. The
acquired raw wood will be used for production of Accoya(®) at our plant in
the Netherlands.
Loan repayments and interest payments were €3.3m during the period (H1 FY21:
€1.9m), with the increase due to prior period repayments of €0.5m relating
to the ABN AMRO €14m term loan being deferred to the end of the loan term,
as a COVID-19 action taken by ABN AMRO and the beginning of contractual
principal repayments on the Bruil loan from June 2021.
Financial position
Plant and machinery additions of €7.5m (H1 FY21: €9.9m) in the period
largely consisted of the construction of the 4th Reactor expansion project in
Arnhem (€12.1m), the purchase of certain assets and equipment to be utilised
to grow production of manufacture Accoya(®) Color in Wales (€0.7m), and the
Tricoya(®) plant's net reversal of €6m following the reversal of
construction milestone related accruals (€11.1m) previously accounted for,
following the settlement agreement entered into between Tricoya UK and Engie
Fabricom UK Limited, Tricoya UK's former EPC contractor, which is partially
offset by further progress costs on the project. The prior year period
primarily related to construction on the Tricoya(®) plant build in Hull and
initial costs related to the 4th Reactor expansion project in Arnhem.
Trade and other receivables increased to €12.5m (H1 FY21: €10.6m),
primarily due to a €1.3m increase in VAT receivables.
Total Inventory increased to €18.1m (H1 FY21: €15.7m) from a lower than
optimal level at the start of the year. Levels of Accoya(®) inventory remain
low, with the finished goods balance representing approximately three weeks of
sales.
The decrease in trade and other payables to €21.8m (H1 FY21: €24.8m) is
primarily due to the reversal of accruals associated with the construction of
the Tricoya(®) Hull plant following the settlement agreement entered into
between Tricoya UK and Engie Fabricom UK Limited, offset by an increase in
trade payables, primarily related to the timing of construction contract
related payments.
Amounts payable under loan agreements decreased to €52.8m (H1 FY21:
€54.5m) in line with contractual principal repayments.
Net debt decreased by €14.6m in the period to Net cash of €2.4m (FY21: Net
debt of €12.2m) due to the successful Placing and Open offer (net proceeds
of €34.6m) partially offset by Capex investments of €17.2m.
In October 2021 (post period-end), Accsys completed the refinance of its Group
debt facilities through a new bilateral agreement with ABN AMRO, one of
Accsys' existing relationship banks. The new €60m 3-year bilateral
facilities agreement with ABN AMRO comprises a €45m Term Loan Facility and a
€15m Revolving Credit Facility ('RCF'). The €45m Term Loan has been (post
period-end) fully utilised to repay all of the Group's existing debt, with the
exception of the NatWest facility held by the Tricoya(®) consortium which
remains in place. The new facility significantly simplifies Accsys' debt
structure, which previously included five different debt providers and
commercial partners. The Term Loan is partially amortising, with 5% of the
principal repayable per annum after 18 months. This, together with the RCF,
will provide Accsys with greater liquidity to support the Group's growth
plans. The applicable interest rate for the Term Loan will vary between an
all-in cost of 1.75% and 3.25% depending on net leverage, resulting in a
significant improvement compared to the previous facilities which had a
weighted average cost of approximately 6%. The RCF interest rate will
similarly vary, but between 2.0% and 3.5% above EURIBOR. The new facilities
are secured against the assets of the Group which are 100% owned by the
Company and include customary covenants such as net leverage and interest
cover.
Risks and uncertainties
As described on page 37 to 45 of the 2021 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 described in the
2021 Annual report) as currently identified by Accsys' risk management
process, have not changed significantly since the publication of the last
Annual Report.
These risks relate to the following areas:
Health, Safety & Environment; Hull plant; Supply of Raw Materials; Sale of
Products; Environmental, Social & Governance (ESG) and Sustainability;
Manufacturing; Expansion; IT; Licensing/Partnering; Finance; Litigation &
disputes; Protection of Intellectual Property & trade secrets; Personnel;
Governance, Compliance & Law; and Investor & Public relations.
Going concern
These condensed consolidated financial statements are prepared on a going
concern basis, which assumes that the Group will continue in operational
existence for the foreseeable future, and at least 12 months from the date
these financial statements are approved.
As part of the Group's going concern review, the Directors have assessed the
Group's trading forecasts and working capital requirements for the foreseeable
future under a base scenario taking into account the Group's financial
resources including the current cash position and banking and finance
facilities which are currently in place, including the refinance of debt
facilities shortly after the balance sheet date (See Notes 12 & 16 for
details of these facilities) and the possible further impact of COVID-19.
The Directors have also assessed a severe but plausible downside scenario with
reduced sales volumes and lower gross margin. These forecasts indicate that,
in order to continue as a going concern, the Group is dependent on achieving
certain operating performance measures relating to the production and sales of
Accoya(®) wood from the plant in Arnhem with the collection of on-going
working capital items in line with internally agreed budgets.
The Directors' have also considered the possible amount and timing of capital
expenditure required to complete the further expansion of the Arnhem
Accoya(®) plant and in particular the Tricoya(®) plant in Hull, noting that
should additional funding be required beyond what has been committed by the
Tricoya(®) consortium partners to date, further consent would be required by
the Tricoya(®) consortium partners for funding to be contributed. This has
been considered together with the intended investment in the USA, noting that
the full forecast project costs have not yet been committed to. There are a
sufficient number of alternative actions and measures within the control of
the Group that can and would be taken in order to ensure on-going liquidity
including reducing/deferring costs in some discretionary areas as well as
larger capital projects if necessary.
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, under both the base scenario and severe but plausible
downside scenario (both scenarios include the commitment of funding for the
intended investment in the USA), there is sufficient liquidity and covenant
headroom such that there is no material uncertainty with respect to going
concern.
Therefore the Directors believe that the going concern basis is the most
appropriate on which to prepare the financial statements.
William Rudge
Finance Director
22 November 2021
Accsys Technologies PLC
Directors responsibility statement
The Directors confirm to the best of their knowledge that:
• the condensed set of financial statements has been prepared in accordance
with the AIM Rules for Companies and IAS 34 Interim Financial Reporting as
endorsed by the European Union and as adopted for use in the United Kingdom
and give a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group and its subsidiaries;
• the interim management report for the six months ended 30 September 2021
gives a fair review of the information required pursuant to section 5:25d,
subsections 8 and 9 of the Dutch Financial Markets Supervision Act.
By order of the Board
Angus Dodwell
Company Secretary
22 November 2021
Accsys Technologies PLC
Condensed consolidated statement of comprehensive income for the six months
ended 30 September 2021
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
2021 2021 2021 2020 2020 2020 2021 2021 2021
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Underlying Exceptional items & other adjustments* Total Underlying Exceptional items & other adjustments* Total Underlying Exceptional items & other adjustments* Total
Accoya® wood revenue 48,465 - 48,465 38,676 - 38,676 91,095 - 91,095
Tricoya® panel revenue 860 - 860 1,110 - 1,110 2,091 - 2,091
Licence revenue 9 - 9 402 - 402 419 - 419
Other revenue 6,901 - 6,901 2,745 - 2,745 6,198 - 6,198
Total revenue 2 56,235 - 56,235 42,933 - 42,933 99,803 - 99,803
Cost of sales (39,032) - (39,032) (28,609) 230 (28,379) (66,714) - (66,714)
Gross profit 17,203 - 17,203 14,324 230 14,554 33,089 - 33,089
Other operating costs 3 (15,655) (151) (15,806) (12,769) 347 (12,422) (28,559) 103 (28,456)
Operating profit/(loss) 1,548 (151) 1,397 1,555 577 2,132 4,530 103 4,633
Finance income - - - 1 - 1 1 - 1
Finance expense (1,722) 231 (1,491) (1,657) 485 (1,172) (3,250) (900) (4,150)
Share of net loss of joint ventures accounted for using the equity method 14 (91) - (91) - - - (144) - (144)
Profit/(loss) before taxation (265) 80 (185) (101) 1,062 961 1,137 (797) 340
Tax expense 5 (622) - (622) (587) - (587) (1,251) - (1,251)
Profit/(loss) for the period (887) 80 (807) (688) 1,062 374 (114) (797) (911)
Items that may be reclassified to profit or loss
Gain/(loss) arising on 213 - 213 (153) - (153) 5 - 5
translation of foreign operations
Gain/(loss) arising on foreign currency cash flow hedges - 579 579 - (428) (428) - 192 192
Total other comprehensive income/(loss) 213 579 792 (153) (428) (581) 5 192 197
Total comprehensive (674) 659 (15) (841) 634 (207) (109) (605) (714)
(loss)/gain for the period
Total comprehensive loss for the year is attributable to:
Owners of Accsys Technologies PLC 219 692 911 (266) 763 497 1,279 (605) 674
Non-controlling interests (893) (33) (926) (575) (129) (704) (1,388) - (1,388)
Total comprehensive (674) 659 (15) (841) 634 (207) (109) (605) (714)
(loss)/gain for the period
Basic and diluted profit/(loss) per ordinary share 6 €0.00 €0.00 €(0.00) €0.01 €0.01 €0.00
The notes set out on pages 20 to 39 form an integral part of these condensed
financial statements.
* See note 4 for details of exceptional items and other adjustments.
Accsys Technologies PLC
Condensed consolidated statement of financial position at 30 September 2021
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
Note 2021 2020 2021
€'000 €'000 €'000
Non-current assets
Intangible assets 8 10,962 10,882 10,865
Investment accounted for using the equity method 14 1,421 470 326
Property, plant and equipment 9 145,206 130,273 139,557
Right of use assets 5,120 4,273 4,859
Financial asset at fair value through profit or loss - - -
162,709 145,898 155,607
Current assets
Inventories 18,105 15,678 12,262
Trade and other receivables 12,540 10,560 12,314
Cash and cash equivalents 60,921 42,967 47,598
Corporation tax receivable 153 252 183
Derivative financial instrument 106 - 134
91,825 69,457 72,491
Current liabilities
Trade and other payables (21,767) (24,803) (29,810)
Obligation under lease liabilities (1,108) (857) (948)
Short term borrowings 12 (16,269) (6,201) (9,664)
Corporation tax payable (2,514) (1,271) (1,863)
Derivative financial instrument - (129) -
(41,658) (33,261) (42,285)
Net current assets 50,167 36,196 30,206
Non-current liabilities
Obligation under lease liabilities (4,630) (3,913) (4,584)
Other long term borrowing 12 (36,535) (48,298) (44,626)
(41,165) (52,211) (49,210)
Total net assets 171,711 129,883 136,603
Equity
Share capital 10 9,619 8,213 8,466
Share premium account 223,035 186,383 189,598
Other reserves 11 115,214 112,928 114,635
Accumulated loss (212,642) (212,969) (213,263)
Own shares (5) (36) (36)
Foreign currency translation reserve 250 (121) 37
Capital value attributable to owners of Accsys Technologies PLC 135,471 94,398 99,437
Non-controlling interest in subsidiaries 36,240 35,485 37,166
Total equity 171,711 129,883 136,603
The notes set out on pages 20 to 39 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 2021
Share capital Ordinary Share premium Other reserves Own Shares Foreign currency trans- Accumulated loss Total equity attributable to equity shareholders of the company Non-Controlling interests Total Equity
lation reserve
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance at 8,114 186,390 112,551 - 32 (214,394) 92,693 34,442 127,135
31 March 2020
Total comprehensive (expense)/gain for the period - - (428) - (153) 1,078 497 (704) (207)
Share based payments - - - - - 410 410 - 410
Shares issued 99 - - (36) - (63) - - -
Premium on shares issued - - - - - - - - -
Share issue costs - (7) - - - - (7) - (7)
Issue of subsidiary shares to non-controlling interests - - 805 - - - 805 1,747 2,552
Balance at 8,213 186,383 112,928 (36) (121) (212,969) 94,398 35,485 129,883
30 Sept 2020 (unaudited)
Total comprehensive (expense)/gain for the period - - 620 - 158 (601) 177 (684) (507)
Share based payments - - - - - 307 307 - 307
Shares issued 253 - - - - - 253 - 253
Premium on shares issued - 3,215 - - - - 3,215 - 3,215
Share issue costs - - - - - - - - -
Issue of subsidiary shares to non-controlling interests - - 1,087 - - - 1,087 2,365 3,452
Balance at 8,466 189,598 114,635 (36) 37 (213,263) 99,437 37,166 136,603
31 March 2021
Total comprehensive (expense)/gain for the period - - 579 - 213 119 911 (926) (15)
Share based payments - - - - - 533 533 - 533
Shares issued 1,153 - - 31 - (31) 1,153 - 1,153
Premium on shares issued - 35,531 - - - - 35,531 - 35,531
Share issue costs - (2,094) - - - - (2,094) - (2,094)
Issue of subsidiary shares to non-controlling interests - - - - - - - - -
Balance at 9,619 223,035 115,214 (5) 250 (212,642) 135,471 36,240 171,711
30 Sept 2021 (unaudited)
Share capital is the amount subscribed for shares at nominal value (note 10).
Share premium account represents the excess of the amount subscribed for share
capital over the nominal value of these shares, net of share issue expenses.
Share issue expenses comprise the costs in respect of the issue by the Company
of new shares.
See note 11 for details concerning other reserves.
Non-controlling interests relates to the investment of various parties into
Tricoya Technologies Limited and Tricoya UK Limited (note 7).
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.
Accumulated losses represent the cumulative loss of the Group attributable to
the owners of the parent.
The notes set out on pages 20 to 39 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 2021
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
(Loss)/profit before taxation before exceptional items and other adjustments (265) (101) 1,137
Adjustments for:
Amortisation of intangible assets 366 393 803
Depreciation of property, plant and equipment and right of use assets 2,643 2,372 4,934
Net finance expense 1,722 1,656 3,352
Equity-settled share-based payment expenses 533 410 717
Accsys portion of Licence fee received from joint venture - - 600
Share of net loss of joint venture 91 - 144
Currency translation (loss)/gain (93) 60 110
Cash inflows from operating activities before changes in working capital and 4,997 4,790 11,797
exceptional items
Exceptional Items in operating activities (see note 4) (133) 595 -
Cash inflows from operating activities before changes in working capital 4,864 5,385 11,797
Decrease/(increase) in trade and other receivables 255 2,154 (159)
(Decrease) in deferred income - - (42)
(Increase)/decrease in inventories (5,843) 1,254 4,670
Increase in trade and other payables 1,186 809 3,864
Net cash from operating activities before tax 462 9,602 20,130
Tax received 59 76 71
Net cash from operating activities 521 9,678 20,201
Cash flows from investing activities
Interest received - 2 5
Investment in property, plant and equipment (17,196) (3,700) (11,674)
Foreign exchange deal settlement related to hedging of Hull capex - (392) (258)
Investment in intangible assets (463) (289) (682)
Investment in joint venture (1,186) - (1,070)
Net cash used in investing activities (18,845) (4,379) (13,679)
Cash flows from financing activities
Other finance costs (36) (32) (80)
Proceeds from trade facility draw down - 827 -
Interest Paid (1,251) (1,058) (1,831)
Repayment of lease liabilities (504) (443) (1,308)
Repayment of loans/rolled up interest (2,097) (888) (2,474)
Proceeds from issue of share capital 36,684 - 3,468
Proceeds from issue of subsidiary shares to non-controlling interests - 2,552 6,004
Share issue costs (2,094) (7) (7)
Net cash from financing activities 30,702 951 3,772
Net increase in cash and cash equivalents 12,378 6,250 10,294
Effect of exchange gain/(loss) on cash and cash equivalents 945 (521) 66
Opening cash and cash equivalents 47,598 37,238 37,238
Closing cash and cash equivalents 60,921 42,967 47,598
The notes set out on pages 20 to 39 form an integral part of these interim
financial statements.
Accsys Technologies PLC
Notes to the financial statements for the six months ended 30 September 2021
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 Brettenham House, 19 Lancaster Place,
London, WC2E 7EN.
The condensed consolidated financial statements were approved on 22 November
2021. These condensed consolidated financial statements have been reviewed,
not audited.
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.
On 31 December 2020, IFRS as adopted by the European Union at that date, was
brought into UK law and became UK-adopted International Accounting Standards,
with future changes being subject to endorsement by the UK Endorsement Board.
The Group transitioned to UK-adopted International Accounting Standards in its
consolidated financial statements on 1 April 2021. This change constitutes a
change in accounting framework. However, there is no impact on recognition,
measurement or disclosure in the period reported as a result of the change in
framework.
The financial information for the six months ended 30 September 2021 and the
six months ended 30 September 2020 is unaudited. The comparative financial
information for the full year ended 31 March 2021 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 21
June 2021. 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 2021, 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 2021.
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 2022 Annual Report. 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 2021, as described in those financial statements.
Going concern
These condensed consolidated financial statements are prepared on a going
concern basis, which assumes that the Group will continue in operational
existence for the foreseeable future, and at least 12 months from the date
these financial statements are approved.
As part of the Group's going concern review, the Directors have assessed the
Group's trading forecasts and working capital requirements for the foreseeable
future under a base scenario taking into account the Group's financial
resources including the current cash position and banking and finance
facilities which are currently in place, including the refinance of debt
facilities shortly after the balance sheet date (See Notes 12 & 16 for
details of these facilities) and the possible further impact of COVID-19.
The Directors have also assessed a severe but plausible downside scenario with
reduced sales volumes and lower gross margin. These forecasts indicate that,
in order to continue as a going concern, the Group is dependent on achieving
certain operating performance measures relating to the production and sales of
Accoya(®) wood from the plant in Arnhem with the collection of on-going
working capital items in line with internally agreed budgets.
The Directors' have also considered the possible amount and timing of capital
expenditure required to complete the further expansion of the Arnhem
Accoya(®) plant and in particular the Tricoya(®) plant in Hull, noting that
should additional funding be required beyond what has been committed by the
Tricoya(®) consortium partners to date, further consent would be required by
the Tricoya(®) consortium partners for funding to be contributed. This has
been considered together with the intended investment in the USA, noting that
the full forecast project costs have not yet been committed to. There are a
sufficient number of alternative actions and measures within the control of
the Group that can and would be taken in order to ensure on-going liquidity
including reducing/deferring costs in some discretionary areas as well as
larger capital projects if necessary.
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, under both the base scenario and severe but plausible
downside scenario (both scenarios include the commitment of funding for the
intended investment in the USA), there is sufficient liquidity and covenant
headroom such that there is no material uncertainty with respect to going
concern.
Therefore the Directors believe that the going concern basis is the most
appropriate on which to prepare the financial statements.
2. Segmental reporting
The Group's business is the manufacturing of and development,
commercialisation and licensing of the associated proprietary technology for
the manufacture of Accoya(®) wood, Tricoya(®) wood chips and related
acetylation technologies. Segmental reporting is divided between corporate
activities, activities directly attributable to Accoya(®), to Tricoya(®) or
research and development activities. The Group's operating segments are
reported in a manner consistent with the internal reporting provided to the
executive committee, the chief operating decision-making body.
Accoya(®)
Accoya(®) Segment
6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2020 6 months ended 30 September 2020 6 months ended 30 September 2020 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2021
2021
2021
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Accoya(®) wood revenue 48,465 - 48,465 38,676 - 38,676 91,095 - 91,095
Licence revenue - - - 400 - 400 400 - 400
Other revenue 6,895 6,895 2,739 2,739 6,142 - 6,142
Total Revenue 55,360 - 55,360 41,815 - 41,815 97,637 - 97,637
Cost of sales (38,184) - (38,184) (27,550) 230 (27,320) (64,713) - (64,713)
Gross profit 17,176 - 17,176 14,265 230 14,495 32,924 - 32,924
Other operating costs (9,097) (133) (9,230) (7,233) 249 (6,983) (15,725) - (15,725)
Profit from operations 8,079 (133) 7,946 7,032 479 7,512 17,199 - 17,199
Profit from operations 8,079 (133) 7,946 7,032 479 7,512 17,199 - 17,199
Share of Accoya® USA EBITDA (91) - - - - - (144) - -
EBIT 7,988 (133) 7,946 7,032 479 7,512 17,055 - 17,199
Depreciation and amortisation 2,297 - 2,297 2,132 - 2,132 4,371 - 4,371
EBITDA 10,285 (133) 10,243 9,164 479 9,644 21,426 - 21,570
Revenue includes the sale of Accoya(®), licence income and other revenue,
principally relating to the sale of acetic acid and other licensing related
income.
All costs of sales are allocated against manufacturing activities in Arnhem
and in Barry (Wales) unless they can be directly attributable to a licensee.
Other operating costs include depreciation of the Arnhem and Barry property,
plant and equipment together with all other costs associated with the
operation of the Arnhem and Barry manufacturing site, including directly
attributable administration, sales and marketing costs.
See note 4 for explanation of Exceptional Items and other adjustments.
Average headcount = 159 (H1 FY21: 138)
The below table shows details of reconciling items to show both Accoya(®)
EBITDA and Accoya(®) Manufacturing gross profit, both including and excluding
licence and licensing related income, which has been presented given the
inclusion of items which can be more variable or one-off.
6 months ended 30 September 2021 6 months ended 30 September 2020 Year ended 31 March 2021
€'000 €'000 €'000
Accoya(®) segmental underlying EBITDA 10,285 9,164 21,426
Accoya(®) underlying Licence Income - (400) (400)
Accoya(®) segmental manufacturing EBITDA (excluding licence income) 10,285 8,764 21,026
Accoya(®) segmental gross profit 17,176 14,265 32,924
Accoya(®) Licence Income - (400) (400)
Accoya(®) Manufacturing gross profit 17,176 13,865 32,524
Gross Accoya(®) Manufacturing Margin 31.0% 33.5% 33.4%
6 months ended 30 September 2021 6 months ended 30 September 2020 Year ended 31 March 2021
€ € €
Accoya(®) Manufacturing gross profit - €'000 17,176 13,865 32,524
Accoya(®) sales volume - m(3) 29,555 26,422 60,466
Accoya(®) manufacturing gross profit per m(3) 581 525 538
Tricoya(®)
Tricoya(®) Segment
6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2020 6 months ended 30 September 2020 6 months ended 30 September 2020 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2021
2021
2021
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Tricoya(®) panel revenue 860 - 860 1,110 - 1,110 2,091 - 2,091
Licence revenue 9 - 9 2 - 2 19 - 19
Other revenue 6 - 6 6 - 6 56 - 56
Total Revenue 875 - 875 1,118 - 1,118 2,166 - 2,166
Cost of sales (848) - (848) (1,059) - (1,059) (2,001) - (2,001)
Gross profit 27 - 27 59 - 59 165 - 165
Other operating costs (2,028) (18) (2,046) (1,490) 72 (1,418) (3,668) 103 (3,565)
Loss from operations (2,001) (18) (2,019) (1,431) 72 (1,359) (3,503) 103 (3,400)
Loss from operations (2,001) (18) (2,019) (1,431) 72 (1,359) (3,503) 103 (3,400)
Depreciation and amortisation 262 - 262 247 - 247 563 - 563
EBITDA (1,739) (18) (1,757) (1,184) 72 (1,112) (2,940) 103 (2,837)
Revenue and costs are those attributable to the business development of the
Tricoya(®) process and establishment of Tricoya(®) Hull Plant.
See note 4 for explanation of Exceptional Items and other adjustments.
Average headcount = 36 (H1 FY21: 18), noting a substantial proportion of the
costs to date have been incurred via recharges from other parts of the Group
or have resulted from contractors.
Corporate
Corporate Segment
6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2020 6 months ended 30 September 2020 6 months ended 30 September 2020 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2021
2021
2021
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross result - - - - - - - - -
Other operating costs (3,908) - (3,908) (3,548) 16 (3,532) (8,048) - (8,048)
Loss from operations (3,908) - (3,908) (3,548) 16 (3,532) (8,048) - (8,048)
Profit/(Loss) from operations (3,908) - (3,908) (3,548) 16 (3,532) (8,048) - (8,048)
Depreciation and amortisation 416 - 416 345 - 345 715 - 715
EBITDA (3,492) - (3,492) (3,203) 16 (3,187) (7,333) - (7,333)
Corporate costs are those costs not directly attributable to Accoya(®),
Tricoya(®) or Research and Development activities. This includes management
and the Group's corporate and general administration costs including the head
office in London.
See note 4 for explanation of Exceptional Items and other adjustments.
Average headcount = 36 (H1 FY21: 26).
Research and Development
Research & Development Segment
6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2020 6 months ended 30 September 2020 6 months ended 30 September 2020 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2021
2021
2021
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross result - - - - - - - - -
Other operating costs (621) - (621) (499) 10 (489) (1,118) - (1,118)
Loss from operations (621) - (621) (499) 10 (489) (1,118) - (1,118)
Loss from operations (621) - (621) (499) 10 (489) (1,118) - (1,118)
Depreciation and amortisation 34 - 34 41 - 41 88 - 88
EBITDA (587) - (587) (458) 10 (448) (1,030) - (1,030)
Research and Development costs are those associated with the Accoya(®) and
Tricoya(®) processes. Costs exclude those which have been capitalised in
accordance with IAS 38. (see note 8).
See note 4 for explanation of Exceptional Items and other adjustments.
Average headcount = 9 (H1 FY21: 8).
Total
TOTAL
6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2020 6 months ended 30 September 2020 6 months ended 30 September 2020 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2021
2021
2021
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Accoya(®) wood revenue 48,465 - 48,465 38,676 - 38,676 91,095 - 91,095
Tricoya(®) panel revenue 860 - 860 1,110 - 1,110 2,091 - 2,091
Licence revenue 9 - 9 402 - 402 419 - 419
Other revenue 6,901 - 6,901 2,745 - 2,745 6,198 - 6,198
Total Revenue 56,235 - 56,235 42,933 - 42,933 99,803 - 99,803
Cost of sales (39,032) - (39,032) (28,609) 230 (28,379) (66,714) - (66,714)
Gross profit 17,203 - 17,203 14,324 230 14,554 33,089 - 33,089
Other operating costs (15,655) (151) (15,806) (12,769) 347 (12,422) (28,559) 103 (28,456)
Profit from operations 1,548 (151) 1,397 1,555 577 2,132 4,530 103 4,633
Finance income - - - 1 - 1 1 - 1
Finance expense (1,722) 231 (1,491) (1,657) 485 (1,172) (3,250) (900) (4,150)
Investment in joint venture (91) - (91) - - - (144) - (144)
Profit/(Loss) before taxation (265) 80 (185) (101) 1,062 961 1,137 (797) 340
See note 4 for explanation of Exceptional Items and other adjustments.
Reconciliation of underlying earnings
Reconciliation of underlying earnings
6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2021 6 months ended 30 September 2020 6 months ended 30 September 2020 6 months ended 30 September 2020 12 months ended 31 March 12 months ended 31 March 12 months ended 31 March
2021
2021
2021
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
Underlying
Exceptional items & Other Adjustments
TOTAL
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Profit from operations 1,548 (151) 1,397 1,555 577 2,132 4,530 103 4,633
Share of Accoya® USA EBITDA (91) - - - - - (144) - -
EBIT 1,457 (151) 1,397 1,555 577 2,132 4,386 103 4,633
Depreciation and amortisation 3,009 - 3,009 2,765 - 2,765 5,737 - 5,737
EBITDA 4,466 (151) 4,406 4,320 577 4,897 10,123 103 10,370
Segmental reporting continued
Assets and liabilities on a segmental basis:
Accoya(®) Tricoya(®) Corporate R&D TOTAL
Sept 2021 Sept 2021 Sept 2021 Sept 2021 Sept 2021
€'000 €'000 €'000 €'000 €'000
Non-current assets 78,153 79,895 4,399 262 162,709
Current assets 44,766 9,425 34,194 3,440 91,825
Current liabilities (19,198) (10,766) (11,599) (95) (41,658)
Net current assets 25,568 (1,341) 22,595 3,345 50,167
Non-current liabilities (20,006) (10,188) (10,836) (135) (41,165)
Net assets 83,715 68,366 16,158 3,472 171,711
Accoya(®) Tricoya(®) Corporate R&D TOTAL
Sept 2020 Sept 2020 Sept 2020 Sept 2020 Sept 2020
€'000 €'000 €'000 €'000 €'000
Non-current assets 61,915 79,278 4,634 71 145,898
Current assets 26,982 10,325 26,637 5,513 69,457
Current liabilities (8,604) (16,684) (7,941) (32) (33,261)
Net current assets 18,378 (6,359) 18,696 5,481 36,196
Non-current liabilities (23,730) (8,956) (19,525) - (52,211)
Net assets 56,563 63,963 3,805 5,552 129,883
Accoya(®) Tricoya(®) Corporate R&D TOTAL
March 2021 March 2021 March 2021 March 2021 March 2021
€'000 €'000 €'000 €'000 €'000
Non-current assets 64,994 85,696 4,620 297 155,607
Current assets 34,752 13,134 19,567 5,038 72,491
Current liabilities (16,706) (18,933) (6,576) (70) (42,285)
Net current assets 18,046 (5,799) 12,991 4,968 30,206
Non-current liabilities (21,798) (9,990) (17,262) (160) (49,210)
Net assets 61,242 69,907 349 5,105 136,603
The segmental assets in the current year were predominantly held in the UK and
mainland Europe (Prior Year UK and mainland Europe). Additions to property,
plant, equipment and intangible assets in the current year were predominantly
incurred in the UK and mainland Europe (Prior Year UK and mainland Europe).
There are no significant intersegment revenues.
Segmental reporting continued
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
UK & Ireland 21,484 17,495 41,890
Rest of Europe 17,184 13,136 27,187
Benelux 5,372 4,458 13,170
Americas 7,940 4,926 9,701
Asia-Pacific 4,192 2,858 7,360
Rest of World 63 60 495
56,235 42,933 99,803
Sales to UK and Ireland include 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, the site in
Barry, the offices in Dallas and London and certain pre-operating costs
associated with the plant in Hull:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
Sales and marketing 2,483 1,476 3,847
Research and development 587 448 1,030
Other operating costs 3,907 2,743 6,013
Administration costs 5,669 5,567 11,932
Exceptional Items and other adjustments 151 (577) (103)
Other operating costs excluding depreciation and amortisation 12,797 9,657 22,719
Depreciation and amortisation 3,009 2,765 5,737
Total other operating costs 15,806 12,422 28,456
Administrative costs include costs associated with Business Development and
Legal departments, Intellectual Property as well as Human Resources, IT,
Finance, Management and General Office and include the costs of the Group's
head office costs in London and the US office in Dallas.
The total cost of €15.8m in the current period includes €2.0m in respect
of Tricoya(®) segment (H1 FY21: €1.4m).
Group average employee headcount increased to 241 in the period to 30
September 2021, from 190 in the period to 30 September 2020.
During the period, €408,000 (H1 FY21: €289,000) of internal development
& patent related costs were capitalised and included in intangible fixed
assets, including €301,000 (H1 FY21: €218,000) which were capitalised
within Tricoya Technologies Limited ('TTL'). In addition, €187,000 of
internal costs have been capitalised in relation to our Arnhem Accoya(®)
plant expansion project (H1 FY21: €102,000) and €349,000 of internal
costs have been capitalised in relation to our plant build in Hull, UK (H1
FY21: €18,000). Both are included within tangible fixed assets.
4. Exceptional Items and Other Adjustments
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
Government grant income - 595 -
Redundancy costs in relation to purchase of assets to grow Accoya(®) Color (133) - -
production
Total exceptional items (133) 595 -
Foreign exchange differences arising on Tricoya(®) cash held - Operating (18) (18) 103
costs (loss)/profit
Foreign exchange differences arising on Loan Notes - incl. in Finance expense 231 485 (900)
profit/(loss)
Foreign exchange differences on cash held - Other comprehensive profit/(loss) 607 (237) 18
Revaluation of FX forwards used for cash-flow hedging - Other comprehensive (28) (191) 174
(loss)/profit
Total other adjustments 792 39 (605)
Tax on exceptional items and other adjustments - - -
Total exceptional items and other adjustments 659 634 (605)
Exceptional Items
In July 2021, Accsys entered into a sale and purchase agreement with Lignia
Wood Company Limited and its administrators, to acquire certain assets,
equipment and technology along with its manufacturing plant in Barry, Wales
for a consideration of €1.2m, including €0.5m for raw wood inventory (see
note 15). The purchased assets will enable Accsys to grow production and
availability of Accoya(®) Color more rapidly, accelerating the launch of the
product into more geographic markets and for more product applications. As
part of this purchase, redundancy costs of €133,000 were incurred in
relation to staff at the Barry site.
In the previous year, the Group received government grants relating to the
COVID-19 response, of which €460,000 was received in the Netherlands
(Netherlands NOW scheme), and €135,000 in the UK (UK Coronavirus Job
Retention Scheme). In the interim results, these amounts were recognised as
Exceptional income. It was decided before the March 21 reporting date, given
the overall performance of the Group in the year, to repay both of the
government grants received, with the exceptional income reversed in the second
half of the financial year ended 31 March 2021 and repaid earlier this year.
Other Adjustments
Foreign exchange differences in the Tricoya(®) segment have occurred due to
pounds sterling held within the consortium for the ongoing Hull plant build,
US dollars held within the Corporate segment for the equity investment into
Accoya USA for the USA plant build and to a lesser extent, pounds sterling
held within the Corporate segment for future sterling corporate costs.
The Group has mitigated these currency exchange risks by adopting hedge
accounting under IFRS 9, Financial Instruments. The effective portion of the
foreign exchange movement is recognised in other comprehensive income, with
the ineffective portion recognised in Operating costs. Foreign exchange
differences also arise on the pounds sterling denominated loan notes, entered
into in a prior period. These exchange rate differences are included as
finance expenses.
5. Tax expense
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
(a) Tax recognised in the statement of comprehensive income comprises:
Current tax expense/(credit)
UK Corporation tax on losses for the period - - -
Research and development tax (credit)/expense in respect of current period (31) (45) 24
(31) (45) 24
Overseas tax at rate of 15% 9 4 11
Overseas tax at rate of 25% 644 628 1,216
Deferred Tax
Utilisation of deferred tax asset - - -
Total tax expense reported in the statement of comprehensive income 622 587 1,251
6. Basic and diluted profit/ (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
2021
2021
2020
2020
2021
2021
Basic earnings per share Underlying Total Underlying Total Underlying Total
Weighted average number of 188,322 188,322 163,823 163,823 164,890 164,890
Ordinary shares in issue ('000)
Profit/(Loss) for the period attributable to owners of Accsys Technologies PLC 6 119 (113) 1,078 1,274 477
(€'000)
Basic profit/(loss) per share € 0.00 € 0.00 € (0.00) € 0.01 € 0.01 € 0.00
Diluted earnings per share
Weighted average number of Ordinary shares in issue ('000) 188,322 188,322 163,823 163,823 164,890 164,890
Equity options attributable to Volantis - - 4,656 4,656 - -
Equity options attributable to BGF 8,449 8,449 8,449 8,449 8,449 8,449
Weighted average number of Ordinary shares in issue and potential ordinary 196,771 196,771 176,927 176,927 173,339 173,339
shares ('000)
Profit/(Loss) for the year attributable to owners of Accsys Technologies PLC 6 119 (113) 1,078 1,274 477
(€'000)
Diluted profit/(loss) per share € 0.00 € 0.00 € (0.00) € 0.01 € 0.01 € 0.00
7. Tricoya Technologies Limited
Tricoya Technologies Limited ("TTL") was incorporated in order to develop and
exploit the Group's Tricoya(®) technology for use within the worldwide panel
products market, which is estimated to be worth more than €60 billion
annually.
On 29 March 2017 the Group announced the entry into and successful completion
of its agreements for the financing, construction and operation of the world's
first Tricoya(®) wood elements acetylation plant in Hull with its TTL
consortium investors, being INEOS (previously BP), MEDITE, BGF and Volantis.
The Hull plant will have a targeted production capacity of 30,000 metric
tonnes per annum (sufficient to manufacture 40,000 cubic metres of panels) and
scope to expand.
Structurally, Accsys, INEOS (previously BP Ventures), MEDITE, BGF and Volantis
have invested into TTL. TTL has then invested, alongside INEOS (previously BP
Chemicals) and MEDITE, in Tricoya UK Limited ("Tricoya UK"), a special purpose
subsidiary of TTL that will construct, own and operate the Hull Plant.
INEOS Acetyls Investments Limited ("INEOS") acquired BP Ventures' share
capital of TTL and BP Chemicals share capital of Tricoya UK on 31 December
2020.
INEOS (through acquiring BP's share of TTL & Tricoya UK) have invested
€31.8 million in the Tricoya(®) Project, including €23.3 million as
equity in Tricoya UK and €8.5 million as equity in TTL. All funding was
received by 31 March 2021.
MEDITE have invested €15.0 million in the Tricoya(®) Project, including
€8.4 million as equity in TTL and €6.6 million as equity in Tricoya UK.
All funding was received by 31 March 2021.
In the period to 30 September 2021, the group's shareholding in TTL remained
unchanged at 76.5%.
In the year ended 31 March 2017, BGF and Volantis invested an aggregate of
£19.0 million as financial investors into both the Group and TTL. BGF and
Volantis invested on similar terms but are investing separately, with BGF
accounting for 65% of the £19.0 million total. Both of these loans have been
repaid in October 2021 following the Group debt refinance (see note 16).
In the year ended 31 March 2017, Tricoya UK entered a six-year €17.2 million
finance facility agreement with Natwest Bank PLC in respect of the
construction and operation of the Hull Plant. As at 30 September 2021, the
Group have utilised €9.6m (FY21: €9.3m) of the facility.
The Group has consolidated the results of TTL and Tricoya UK as subsidiaries,
as it exercises the power to govern the entities in accordance with IFRS 10.
The non-controlling interests in both entities have been recognised in these
Group financial statements.
The "TTL Group" income statement and balance sheet, consisting of TTL and its
subsidiary Tricoya UK Ltd, are set out below:
TTL Group income statement:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
Revenue 875 1,118 2,178
Cost of Sales Tricoya(®) panel (848) (1,059) (1,999)
Gross profit 27 59 179
Costs:
Staff costs (1,440) (902) (2,582)
Research & development (excluding staff costs) (115) (108) (217)
Intellectual Property (106) (77) (255)
Other Operating costs (256) (131) (122)
Depreciation & Amortisation (262) (247) (563)
EBIT (2,152) (1,406) (3,560)
EBIT attributable to Accsys shareholders (1,226) (704) (2,172)
Tricoya(®) panel revenue represents panels purchased by Tricoya Technologies
Ltd from MEDITE, sold to customers in other regions as market seeding.
TTL Group balance sheet at 30 September 2021:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
Non-current assets
Intangible assets 4,517 4,263 4,376
Property, Plant and Equipment 74,106 74,187 79,999
Right of use assets 1,271 829 1,321
79,894 79,279 85,696
Current assets
Trade and other receivables 687 772 1,232
Inventories - 151 -
Cash and cash equivalents 7,900 9,561 11,464
Derivative financial instrument 106 - 134
8,693 10,484 12,830
Current liabilities
Trade and other payables (12,208) (17,094) (20,159)
Derivative financial instrument - (129) -
(12,208) (17,223) (20,159)
Non-current liabilities
Other long term borrowing (9,306) (8,586) (8,955)
(9,306) (8,586) (8,955)
Net assets 67,073 63,954 69,412
Value attributable to Accsys Technologies 30,832 28,469 32,246
Value attributable to Non-controlling interest 36,241 35,485 37,166
TTL Group cash flows at 30 September 2021:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
Cash flows (used in)/ from operating activities 863 755 (841)
Cash flows (used in)/ from investing activities (4,299) (2,621) (6,400)
Cash flows (used in)/ from financing activities (127) 3,028 10,306
Net (decrease)/increase in cash and cash equivalents (3,563) 1,162 3,065
8. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
€'000 €'000 €'000 €'000
Cost
At 31 March 2020 7,187 74,051 4,231 85,469
Additions 95 194 - 289
At 30 September 2020 7,282 74,245 4,231 85,758
Additions 182 211 - 393
At 31 March 2021 7,464 74,456 4,231 86,151
Additions 118 345 - 463
At 30 September 2021 7,582 74,801 4,231 86,614
Accumulated amortisation
At 31 March 2020 2,146 72,337 - 74,483
Amortisation 180 213 - 393
At 30 September 2020 2,326 72,550 - 74,876
Amortisation 184 226 - 410
At 31 March 2021 2,510 72,776 - 75,286
Amortisation 321 45 - 366
At 30 September 2021 2,831 72,821 - 75,652
Net book value
At 31 March 2020 5,041 1,714 4,231 10,986
At 30 September 2020 4,956 1,695 4,231 10,882
At 31 March 2021 4,954 1,680 4,231 10,865
At 30 September 2021 4,751 1,980 4,231 10,962
Refer to note 9 for the recoverability assessment of these intangible assets.
9. 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 2020 17,976 125,691 3,243 146,910
Additions - 9,904 198 10,102
Foreign currency translation (loss) - - (9) (9)
At 30 September 2020 17,976 135,595 3,432 157,003
Additions - 10,838 453 11,291
Foreign currency translation (loss) - - - -
At 31 March 2021 17,976 146,433 3,885 168,294
Additions - 7,491 324 7,815
Foreign currency translation (loss) - - 2 2
At 30 September 2021 17,976 153,924 4,211 176,111
Depreciation
Opening balance at 31 March 2020 637 22,696 1,454 24,787
Charge for the period 179 1,604 168 1,951
Foreign currency translation gain - - (8) (8)
At 30 September 2020 816 24,300 1,614 26,730
Charge for the period 179 1,645 183 2,007
Foreign currency translation (loss) - - - -
At 31 March 2021 995 25,945 1,797 28,737
Charge for the period 179 1,730 257 2,166
Foreign currency translation gain - - 2 2
At 30 September 2021 1,174 27,675 2,056 30,905
Net book value
At 31 March 2020 17,339 102,995 1,789 122,123
At 30 September 2020 17,160 111,295 1,818 130,273
At 31 March 2021 16,981 120,488 2,088 139,557
At 30 September 2021 16,802 126,249 2,155 145,206
Plant and machinery assets with a net book value of €75,068,000 relating to
the Hull Plant and €17,910,000 relating to the further expansion of the
Arnhem Plant are held as assets under construction and are not depreciated,
(31 March 2021: €80,853,000 relating to the Hull Plant and €5,716,000
relating to the further expansion of the Arnhem Plant).
In July 2021, Accsys entered into a sale and purchase agreement with Lignia
Wood Company Limited and its administrators to acquire certain assets,
equipment and technology along with its manufacturing plant in Barry, Wales
for a consideration of €1.2m. See note 15 for further details. This purchase
included equipment of €695,000 which is reflected in the additions line
above.
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. The
recoverable amount of these CGUs are determined based on a value-in-use
calculations which uses cash flow projections based on latest financial
budgets and discounted at a pre-tax discount rate of 10.5% (31 March 2021:
10.5%) to determine their present value.
The key assumptions used in the value in use calculations are:
• the manufacturing revenues, operating margins and future licence fees
estimated by management;
• the completion of construction of additional facilities on time (and
associated output);
• the long term growth rate; and
• the discount rate.
The Directors have determined that there has been no impairment to either CGU.
The Directors have considered whether a reasonably possible change in
assumptions may result in an impairment. The CGU most susceptible to an
impairment given a change in assumptions is the Tricoya(®) CGU. Key
assumptions applied to this CGU were as follows:
• a discount rate of 10.5%;
• a long-term sales growth rate of 1.8%; and
• Gross margin of approximately 40%.
The headroom in the value-in-use model for this CGU would be reduced to nil if
the following adverse changes to those key assumptions were made in isolation:
• a 2.5% increase to the discount rate;
• a 1.7% reduction in the long-term sales growth rate;
• a 6% decrease to Gross margin; and
• an increase of 150% above assumed remaining costs to complete the plant.
10. Share capital
In the period ended 30 September 2020:
1,259,449 Shares were issued on 12 May 2020 following the exercise of nil cost
options, granted under the Company's 2013 Long Term Incentive Plan ("LTIP").
727,250 shares were issued to an Employee Benefit Trust (EBT) on 29 June 2020
at nominal value, in lieu of cash bonuses for the year ended 31 March 2020.
These shares will vest on 1 July 2021, subject to the employees continuing
employment within the Group.
In the period ended 31 March 2021:
In February 2021, following the subscription by employees in the prior year
for shares under the Employee Share Participation Plan (the 'Plan'), 198,219
shares were issued as 'Matching Shares' at nominal value under the Plan.
In addition, various employees newly subscribed under the Plan for 195,524
shares at an acquisition price of €1.43 per share, with these shares issued
to a trust, to be released to the employees after one year, together with an
additional share on a matched basis (subject to continuing employment within
the Group).
On 26 March 2021, the Company announced that Lombard Odier Asset Management
(USA) Corp on behalf of 1798 Volantis Catalyst Fund II Ltd ('Volantis')
exercised options over a total of 4,655,667 ordinary shares in the Company for
a total consideration of £2,779,899 (exercise price of £0.5971 per ordinary
share)
In the period ended 30 September 2021:
In May 2021, 20,005,325 Placing Shares and 2,418,918 Open Offer Shares were
issued as part of the capital raise to fund the Company's investment in
expanding its Accoya(®) business into North America through the construction
of a new Accoya(®) plant in the USA through its joint venture, Accoya USA
LLC, with Eastman Chemical Company (see note 14), as well as to provide
additional capital to support the Company's continued growth. The Shares were
issued at a price of €1.65 (£1.40) per ordinary share, raising gross
proceeds of €36.7 million (before expenses).
629,460 Shares were issued between June to September 2021 for the benefit of
current and former employees following the exercise of nil cost options,
granted under the Company's 2013 Long Term Incentive Plan ("LTIP").
11. 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 2020 148 106,707 (391) 6,464 112,928
Issue of subsidiary shares to non-controlling interests - - - 1,087 1,087
Total Comprehensive income for the period - - 620 - 620
Balance at 31 March 2021 148 106,707 229 7,551 114,635
Issue of subsidiary shares to non-controlling interests - - - - -
Total Comprehensive (expense) for the period - - 579 - 579
Balance at 30 September 2021 148 106,707 808 7,551 115,214
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 reflects the total accounted for under IFRS 9
in relation to the Tricoya(®) and Corporate segments.
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.
12. Commitments under loan agreements
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2021 30 Sept 2020 31 March 2021
Amounts payable under loan agreements:
Within one year 17,358 6,703 12,012
In the second to fifth years inclusive 40,726 56,336 49,714
In greater than five years - 223 -
Less future finance charges (5,280) (8,763) (7,436)
Present value of loan obligations 52,804 54,499 54,290
The decrease in total borrowings in the period since 31 March 2021 of €1.5m
consisted of scheduled repayments on the ABN (€0.5m), Bruil (€0.5m) &
Cerdia loans (€0.4m), repayment on the ABN lease loan (€0.7m) and €0.2m
foreign exchange gain arising on the loan notes with BGF & Volantis,
offset by €0.8m of accrued finance charges.
Facilities relating to purchase of Arnhem land and buildings*:
On 1 August 2018 the Group entered into a package of facilities to fully
finance the purchase of the land and buildings in Arnhem. The partially
amortising package of loans includes the following:
- €14.0m loan with ABN Amro Bank. The loan is partially
repayable over a five year term with a final payment of €9.25m. Interest is
fixed at 3% and the loan is secured on the land and buildings. During the
prior year, repayments totalling €0.5m were deferred by ABN Amro Bank, as a
COVID-19 action, to the end of the loan term.
- €5.0m lease loan with ABN Asset Based Finance is repayable
over a five year term with an implied interest rate of approximately 3%. The
loan is secured on the first two Accoya(®) reactors.
- €4.0m loan with Bruil, the seller and previous landlord. The
balance is repayable from July 2021 to July 2023 with interest fixed at 5%.
The loan is unsecured.
Loan Notes*:
On 29 March 2017 the Group issued £16.3 million (€18.4 million) of
unsecured fixed rate loan notes. £10.5 million of Loan Notes in principal
were issued to Business Growth Fund ('BGF'), with £5.8 million in principal
issued to Volantis. The BGF loan notes are subject to a 7% fixed interest rate
for the duration of their term and the Volantis loan notes are subject to a 7%
fixed interest rate until 31 December 2018, with the interest rate fixed at 9%
thereafter. Interest is rolled up until 31 December 2018 on both loans, with
further roll up of interest on the Volantis loan until six-monthly redemption
payments of both loans commence on 31 December 2021 and end on 30 June 2023.
BGF is an investment company that provides long-term equity funding to growing
UK companies to enable them to execute their strategic plans. Volantis is a
global asset management firm specialising in alternative investment strategies
and is owned by Lombard Odier.
Cerdia Production Facility*:
The €9.5 million term loan facility with Cerdia Production GmBH was used to
design, procure and build the Arnhem plant's third reactor. This facility is
secured against the third reactor of the Arnhem chemical plant and associated
assets and is subject to interest at 7.5% per annum. At 30 September 2021, the
Group had €3.8m (31 March 2021: €4.2m) borrowed under this facility.
Quarterly repayments of the loan commenced on 21 December 2018 and continue
until November 2025.
Tricoya(®) facility:
On 29 March 2017 the Company's subsidiary, Tricoya UK Limited entered into a
six-year €17.2 million finance facility agreement with the Natwest Bank plc
in respect of the construction and operation of the Hull Plant. The facility
is secured by fixed and floating charges over all assets of Tricoya UK
Limited. At 30 September 2021, the Group had €9.6m (31 March 2021:
€9.3m) borrowed under the facility. The facility is to be drawn down as
required, and facility repayments will commence 12 months after practical
completion of the Hull Plant. Interest will accrue at Euribor plus a margin,
with the margin ranging from 325 to 475 basis points.
Trade receivable and inventory facilities*:
Working capital facility*
The facility is a €6.0m credit facility with ABN Commercial Finance secured
upon the receivables and inventory of the Accoya(®) manufacturing business
committed for a period of 5 years. At 30 September 2021, the facility was
undrawn (31 March 2021: undrawn).
Bank guarantee facility*
The €1.5m bank guarantee facility is held with ABN AMRO Bank N.V. enabling
the Group to issue bank guarantees in order to support the working capital and
other operational commitments of the Group.
Both facilities are subject to interest at 2% above the ABN AMRO base rate.
* In October 2021, Accsys completed the refinance of its Group debt facilities
through a new bilateral agreement with ABN AMRO, one of Accsys' existing
relationship banks. The loans in place at 30 September 2021 held with ABN
Amro, Cerdia, Bruil, BGF and Volantis reflected above were fully repaid in
October 2021. See note 16.
Reconciliation to net (debt)/cash:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 2021 30 Sept 2020 31 March 2021
Cash and cash equivalents 60,921 42,967 47,598
Less:
Amounts payable under loan agreements (52,804) (54,499) (54,290)
Amounts payable under lease liabilities (5,738) (4,770) (5,532)
Net (debt)/cash 2,379 (16,302) (12,224)
13. Transactions with non-controlling interests
In the period ended 30 September 2020:
TTL issued 372,875 shares to Titan Wood Limited for a consideration of
€0.7m. 484,774 shares were issued to non-controlling interests for a
consideration of €0.9m and an additional 495,311 shares were issued to
MEDITE in consideration for continuing to seed the market with Tricoya(®)
panels ensuring continued market development ahead of the completion of the
Hull Plant. As a result the non-controlling interests' shareholdings were
amended to:
BP Ventures (8.5%), MEDITE (11.4%), BGF (2.6%), Volantis (1.2%).
Tricoya UK Ltd issued 486,572 Ordinary shares to Tricoya Technologies Ltd for
a consideration of €1.0m. 1,600,530 shares were issued to non-controlling
interests for consideration of €1.6 million. As a result the non-controlling
interests' shareholdings were amended to:
BP Chemicals (30.0%, MEDITE 8.2%).
In the period ended 31 March 2021:
On 29 October 2020, TTL issued 1,862,356 shares to Titan Wood Limited for a
consideration of €3.7m. An additional 498,987 shares were issued to
non-controlling interests for a consideration of €1.0m. On 31 December 2020,
BP Ventures' share capital of TTL was acquired by INEOS Acetyls Investments
Limited ("INEOS"). As a result the non-controlling interests' shareholdings
were amended to:
INEOS (8.5%), MEDITE (11.3%), BGF (2.6%), Volantis (1.1%)
On 29 October 2020, Tricoya UK issued 3,972,686 Ordinary shares to Tricoya
Technologies Ltd for a consideration of €4.0m. An additional 2,452,798
shares were issued to non-controlling interests for consideration of €2.5m.
On 31 December 2020, BP Chemicals' share capital of Tricoya UK was acquired by
INEOS. As a result the non-controlling interests' shareholdings were amended
to:
INEOS (30.0%, MEDITE 8.2%)
In the period ended 30 September 2021:
No shares were issued in the period to 30 September 2021.
The total carrying amount of the non-controlling interests in TTL and Tricoya
UK at 30 September 2021 was €36.24m (2020: €34.42m).
Transactions with non-controlling interests Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
€'000 €'000 €'000
Opening balance 8,127 6,235 6,235
Carrying amount of non-controlling interests issued - (1,747) (4,112)
Consideration paid by non-controlling interests - 2,552 6,004
Excess of consideration paid recognised in Group's equity 8,127 7,040 8,127
14. Investment in Joint Venture
On 11 August 2020, Accsys together with Eastman Chemical Company formed a
company, Accoya USA LLC, with the intention to construct and operate an
Accoya(®) wood production plant to serve the North American market.
The plant is being designed to initially produce approximately 40,000 cubic
metres (~17 million board feet) of Accoya(®) per annum and to allow for
cost-effective expansion.
The carrying amount of the equity-accounted investment is as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 Sept 2021 30 Sept 2020 31 March 2021
€'000 €'000 €'000
Opening balance 326 - -
Investment in Accoya® USA 1,186 1,070 1,070
Less: Accsys proportion (60%) of Licence fee received - (600) (600)
Loss for the year (91) - (144)
Closing balance 1,421 470 326
15. Purchase of assets to grow Accoya(®) Color production
In July 2021, Accsys entered into a sale and purchase agreement with Lignia
Wood Company Limited and its administrators, to acquire certain assets,
equipment and technology along with its manufacturing plant in Barry, Wales.
The purchased assets will enable Accsys to grow production and availability of
Accoya(®) Color more rapidly, accelerating the launch of the product into
more geographic markets and for more product applications. The following
assets were purchased:
Unaudited
6 months ended
30 Sept 2021
€'000
Intellectual property 55
Equipment 695
Inventory 486
1,236
16. Post Balance Sheet Events
In October 2021, Accsys completed the refinance of its Group debt facilities
through a new bilateral agreement with ABN AMRO, one of Accsys' existing
relationship banks. The new €60m 3-year bilateral facilities agreement with
ABN AMRO comprises a €45m Term Loan Facility and a €15m Revolving Credit
Facility ('RCF'). The €45m Term Loan has been (post period-end) fully
utilised to repay all of the Group's existing debt, with the exception of the
NatWest facility held by the Tricoya(®) consortium which remains in place.
The new facility significantly simplifies Accsys' debt structure, which
previously included five different debt providers and commercial partners. The
Term Loan is partially amortising, with 5% of the principal repayable per
annum after 18 months. This, together with the RCF, will provide Accsys with
greater liquidity to support the Group's growth plans. The applicable interest
rate for the Term Loan will vary between an all in cost of 1.75% and 3.25%
depending on net leverage, resulting in a significant improvement compared to
the previous facilities which had a weighted average cost of approximately 6%.
The RCF interest rate will similarly vary, but between 2.0% and 3.5% above
EURIBOR. The new facilities are secured against the assets of the Group which
are 100% owned by the Company and include customary covenants such as net
leverage and interest cover.
In November 2021, Accsys agreed new funding arrangements with our Tricoya UK
Limited ('Tricoya UK') consortium partners relating to the anticipated costs
to complete the plant. Under the arrangements:
• Accsys has entered into a new loan agreement with Tricoya UK under which
Accsys will lend up to €17m to Tricoya UK to be used towards the Hull plant
construction project alongside existing funding in place for Tricoya UK.
• The loan will accrue interest and be rolled up at a rate which is expected
to be between 5.25 and 6.75% above EURIBOR. The loan is secured and is
repayable by 30 September 2023. The supply and offtake agreements with
consortia partners Medite (sale and purchase of Tricoya(®) wood elements) and
INEOS (acetic anhydride supply) have been updated and reflect the partners'
ongoing commitment to the project.
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