REG - Accsys Technologies - Interim Results <Origin Href="QuoteRef">ACCS.L</Origin> - Part 2
24/11/2014 07:11
- Part 2: For the preceding part double click ID:nRSX7703Xa
to the restructuring of a
significant part of the Group, impairment losses (or the reversal of
previously recorded exceptional impairments), expenditure relating to the
integration and implementation of significant acquisitions and other one-off
events or transactions. See note 4 for details of exceptional items.
Going concern
These condensed financial statements are prepared on a going concern basis,
which assumes that the Group will continue in operational existence for the
foreseeable future, which is deemed to be at least 12 months from the date
these interim results were approved. As part of the Group's going concern
review, the Directors have reviewed the Group's trading forecasts and working
capital requirements for the foreseeable future. These forecasts indicate
that, in order to continue as a going concern, the Group is dependent on
achieving certain operating performance measures relating to the production
and sales of Accoya® wood from the plant in Arnhem and the collection of
on-going working capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and performance
measures and believe that appropriate controls and procedures are in place or
will be in place to make sure that these are met. The Directors believe,
while some uncertainty inherently remains in achieving the budget, in
particular in relation to market conditions outside of the Group's control,
that there are a sufficient number of alternative actions and measures that
can be taken in order to achieve the Group's medium and long term objectives.
Therefore, the Directors believe that the going concern basis is the most
appropriate on which to prepare the financial statements.
2. Segmental reporting
The Group's business is the development, commercialisation and licensing of
proprietary technology for the manufacture of Accoya® wood, Tricoya® wood
elements and related acetylation technologies. Segmental reporting is divided
between licensing activities, the manufacturing and sale of Accoya® and
research and development activities.
Result by Segment: Licensing
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2014 2013 2014
E'000 E'000 E'000
Revenue - 525 1,134
Cost of sales - - -
Gross profit/(loss) - 525 1,134
Other operating costs (4,248) (3,270) (6,954)
Exceptional Items (3,080) (71) (726)
Other operating costs (7,328) (3,341) (7,680)
Loss from operations (7,328) (2,816) (6,546)
Loss from Operations (7,328) (2,816) (6,546)
Depreciation and amortisation 204 207 412
EBITDA (7,124) (2,609) (6,134)
Manufacturing
Revenue 21,786 15,244 32,378
Cost of sales (16,768) (12,300) (25,753)
Gross profit/(loss) 5,018 2,944 6,625
Other operating costs (2,936) (2,934) (6,142)
Profit/(loss) from operations 2,082 10 483
Profit/(loss) from operations 2,082 10 483
Depreciation and amortisation 994 931 1,910
EBITDA 3,076 941 2,393
Research and Development
Revenue - - -
Cost of sales - - -
Gross profit/(loss) - - -
Other operating costs (461) (553) (1,151)
Loss from operations (461) (553) (1,151)
Loss from Operations (461) (553) (1,151)
Depreciation and amortisation 20 33 54
EBITDA (441) (520) (1,097)
Total
Revenue 21,786 15,769 33,512
Cost of sales (16,768) (12,300) (25,753)
Gross profit/(loss) 5,018 3,469 7,759
Other operating costs (7,645) (6,757) (14,247)
Exceptional Items (3,080) (71) (726)
Other operating costs (10,725) (6,828) (14,973)
Loss from operations (5,707) (3,359) (7,214)
Share of joint venture loss (465) (390) (905)
Finance income 57 79 155
Finance expense (112) (122) (226)
Loss before taxation (6,227) (3,792) (8,190)
Loss from Operations (5,707) (3,359) (7,214)
Share of joint venture loss (465) (390) (905)
Depreciation and amortisation 1,218 1,171 2,376
EBITDA (4,954) (2,578) (5,743)
EBITDA (before exceptional items) (1,874) (2,507) (5,017)
Licensing
Revenue is attributable to fees received or receivable in relation to the
licensing of the Group's technology to third parties.
Other operating costs include all remaining costs unless they are directly
attributable to Manufacturing or Research and Development. This includes
marketing, business development and the majority of the Group's administration
costs including the head office in Windsor as well as the US office.
Headcount = 21 (2013: 21)
Manufacturing
Revenue includes the sale of Accoya® and other revenue, principally relating
to the sale of acetic acid. All costs of sales are allocated against
manufacturing activities in Arnhem unless they can be directly attributable to
a licensee.
Other operating costs include depreciation of the Arnhem property, plant and
equipment together will all other costs associated with the operation of the
Arnhem manufacturing site, including directly attributable administration
costs. Headcount = 77 (2013: 67)
Research and Development
Costs are associated with various R&D activities associated with Accoya®
products and processes. The costs are reported excluding E128,000 of costs
which have been capitalised in accordance with international financial
reporting standards. (2013: E348,000).
Headcount = 14 (2013: 13)
Assets and liabilities cannot be readily allocated to the three segments and
therefore no additional segmental information has been disclosed.
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2014 2013 2014
E'000 E'000 E'000
UK and Ireland 9,021 4,956 11,300
Benelux 4,131 4,425 8,822
Rest of Europe 5,636 3,691 7,501
Americas 1,656 1,547 3,376
Asia-Pacific 1,342 1,150 2,319
Rest of World - - 194
21,786 15,769 33,512
The segmental assets in the current and previous periods were predominantly
held in Europe. Additions to property, plant, equipment and intangible assets
in the current and previous periods were predominantly incurred in Europe.
Sales to UK and Ireland included the sales to Medite.
3. Other operating costs
Other operating costs consist of the operating costs, other than the cost of
sales, associated with the operation of the plant in Arnhem and the offices in
Dallas and Windsor.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2014 2013 2014
E'000 E'000 E'000
Sales and marketing 1,575 1,391 2,882
Research and development 461 553 1,151
Depreciation and amortisation 1,218 1,171 2,377
Other operating costs 1,480 1,225 2,243
Administration costs 2,911 2,417 5,594
Exceptional costs 3,080 71 726
10,725 6,828 14,973
Administrative costs include costs associated with the Human Resources, IT,
Finance, Management, General Office, Business Development and Legal
departments and include the costs of the Group's head office costs in Windsor
and the US office in Dallas.
Exceptional costs relate to the arbitration with Diamond Wood - see note 4.
The Group headcount increased from 102 at 30 September 2013 to 109 at 31 March
2014 and then to 113 at 30 September 2014.
During the period E128,000 of development costs were capitalised and are
included within intangible fixed assets (2013: E348,000). The prior year
figure includes E169,000 in respect of the Accoya® licence Process Design
Package.
4. Exceptional items
On 25 July 2014 Accsys announced that the arbitration tribunal (the
"Tribunal") appointed in relation to the dispute between Accsys and Diamond
Wood China Limited ("Diamond Wood") had delivered a 'First Partial Final
Award' (the "Award").
In response to Diamond Wood's claim against Accsys, namely for damages in
excess of E100 million as previously published by Diamond Wood, and for the
continuation of the Licence Agreement, the Tribunal ruled that Diamond Wood
can only claim for limited damages (if any) up to a maximum of E250,000.
However, the Tribunal also ruled that the licence agreement between the two
parties is to continue.
On 19 September 2014 Accsys announced that the Tribunal issued a final award
in respect of costs relating to the Ruling which are payable to Diamond Wood,
being approximately £1.6m.
The Exceptional item includes a provision for E2.4m in respect of the awards
for damages and Diamond Wood's costs. In addition, Accsys has incurred a
further E0.7m in respect of its own legal costs in the period. This is in
addition to E0.7m incurred in previous financial year (E0.1m of which was
incurred in the six months ended 30 September 2013) which has also been
represented as an exceptional item in the respective periods which have been
represented accordingly.
None of the E2.4m had been paid to Diamond Wood by 30 September 2014, however
is expected to be in the third quarter of the financial year.
5. Loss per share
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
Basic and diluted loss per share 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March
2014 2014 2013 2013 2014 2014
Before exceptional items Total Before exceptional items Total Before exceptional items Total
Weighted average number of
Ordinary shares in issue ('000)
88,145 88,145 87,158 87,158 87,482 87,482
Loss for the period (E'000) (3,622) (6,702) (4,060) (4,131) (8,163) (8,889)
Basic and diluted loss per share E(0.04) E(0.08) E(0.05) E(0.05) E(0.09) E(0.10)
Basic and diluted losses per share are based upon the same figures. There are
no dilutive share options as these would increase the loss per share.
The weighted average number of shares in issue has been re-presented for all
periods to take account of the 5 to 1 share consolidation which became
effective on 12 September 2014 (see note 8).
6. Share of joint venture losses
On 5 October 2012, Accsys entered into a 50:50 joint venture, Tricoya
Technologies Limited ('TTL'), with INEOS to exploit Accsys' intellectual
property surrounding its proprietary Tricoya® wood elements acetylation
technology and processes, which is expected to lead to the accelerated global
deployment of Tricoya.
TTL was granted rights to exploit Accsys' Tricoya® technology and also
benefits from a licence of any intellectual property held by INEOS that may
assist the joint venture in maximising the value of the Tricoya® proposition.
Profits generated by TTL are to be shared between Accsys and INEOS in a way
that reflects each party's interest. The contribution of Accsys' Tricoya®
intellectual property to the Joint Venture will be reflected through a
disproportionate future profit share which will create significant value for
Accsys.
TTL has been accounted in the Accsys Group accounts using the equity method.
The TTL results for the period from 1 April 2014 to 30 September 2014,
together with the balance sheet as at 30 September 2014 are set out below:
Income statement for TTL joint venture:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended endedRecent news on Accsys Technologies
See all newsREG - Accsys Technologies - Trading Update
AnnouncementREG - Accsys Technologies - Director Interests
AnnouncementREG - Accsys Technologies - Block listing Six Monthly return
AnnouncementREG - AIM - AIM Notice - 28/02/2024
AnnouncementREG - Accsys Technologies - Block listing application to AIM
Announcement