REG - Accsys Technologies - Interim results <Origin Href="QuoteRef">ACCS.L</Origin> - Part 2
30/11/2015 07:11
- Part 2: For the preceding part double click ID:nRSd2870Ha
Gross profit/(loss) 2,205 - 1,051
Other operating costs (5,420) (4,248) (8,527)
Exceptional Items - (3,080) (2,937)
Other operating costs (5,420) (7,328) (11,464)
Loss from operations (3,215) (7,328) (10,413)
Loss from Operations (3,215) (7,328) (10,413)
Depreciation and amortisation 281 204 430
EBITDA (2,934) (7,124) (9,983)
Manufacturing
Revenue 24,089 21,786 45,026
Cost of sales (16,916) (16,768) (33,842)
Gross profit/(loss) 7,173 5,018 11,184
Other operating costs (3,205) (2,936) (6,253)
Profit/(loss) from operations 3,968 2,082 4,931
Profit/(loss) from operations 3,968 2,082 4,931
Depreciation and amortisation 1,022 994 2,004
EBITDA 4,990 3,076 6,935
Research and development
Revenue - - -
Cost of sales - - -
Gross profit/(loss) - - -
Other operating costs (764) (461) (1,205)
Loss from operations (764) (461) (1,205)
Loss from Operations (764) (461) (1,205)
Depreciation and amortisation 23 20 41
EBITDA (741) (441) (1,164)
Total
Revenue 26,294 21,786 46,077
Cost of sales (16,916) (16,768) (33,842)
Gross profit/(loss) 9,378 5,018 12,235
Other operating costs (9,389) (7,645) (15,985)
Exceptional Items - (3,080) (2,937)
Other operating costs (9,389) (10,725) (18,922)
Loss from operations (11) (5,707) (6,687)
Share of joint venture loss - (465) (1,098)
Finance income 17 57 73
Finance expense (98) (112) (208)
Exceptional gain on acquisition of subsidiary - - 267
Loss before taxation (92) (6,227) (7,653)
Loss from Operations (10) (5,707) (6,687)
Share of joint venture loss - (465) (1,098)
Depreciation and amortisation 1,326 1,218 2,475
EBITDA 1,315 (4,954) (5,310)
EBITDA (before exceptional items) 1,315 (1,874) (2,372)
Licensing, Management and Business Development
Revenue is attributable to fees received or receivable in relation to the
licensing of the Group's technology to third parties and other monies received
in respect of its business development activities.
Other operating costs include all remaining costs unless they are directly
attributable to Manufacturing or Research and Development. This includes
marketing, business development and the majority of the Group's administration
costs including the head office in Windsor as well as the US office. In the
current period, results include those associated with Tricoya which were
previously reported separately as share of joint venture loss prior to 31
March 2015 (see note 6). Headcount = 22 (2014: 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 = 84 (2014: 76)
Research and Development
Costs are associated with various R&D activities associated with Accoya®
products and processes.
Headcount = 13 (2014: 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
2015 2014 2015
E'000 E'000 E'000
UK and Ireland 9,571 9,021 17,760
Benelux 3,904 4,131 8,431
Rest of Europe 7,868 5,636 10,704
Americas 2,449 1,656 5,522
Asia-Pacific 2,345 1,342 3,151
Rest of World 157 - 509
26,294 21,786 46,077
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
2015 2014 2015
E'000 E'000 E'000
Sales and marketing 1,805 1,575 3,191
Research and development 764 461 1,205
Depreciation and amortisation 1,326 1,218 2,475
Other operating costs 2,097 1,480 2,395
Administration costs 3,397 2,911 6,719
Exceptional costs - 3,080 2,937
9,389 10,725 18,922
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.
The total cost of E9.4m in the current period includes E0.9m in respect of
Tricoya Technologies Limited ('TTL'). The costs associated with TTL were
separately recorded within share of joint venture loss in the previous
periods.
Exceptional costs relate to the arbitration with Diamond Wood - see note 4.
The Group headcount increased from 110 during period to 30 September 2014 to
111 during period to 31 March 2015 and then to 119 to period to 30 September
2015.
During the period E1.2m of costs were capitalised and are included within
intangible fixed assets (2014: E0.1m). In addition E0.5m of development costs
have been capitalised and are included within tangible fixed assets (2014:
Enil). The current year figure includes E1m in respect of the Tricoya® Front
End Engineering and Design Package.
4. Exceptional items
Exceptional items were recorded in previous periods as follows:
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 issued its award. In response to
Diamond Wood's claim against Accsys, namely for damages in excess of E140
million as previously published by Diamond Wood, and for the continuation of
the Licence Agreement, the Tribunal ruled that Diamond Wood could only claim
for limited damages (if any) up to a maximum of E0.3m. However, the Tribunal
also ruled that the licence agreement between the two parties is to continue.
In addition the Tribunal issued a final award in respect of costs were payable
to Diamond Wood.
The exceptional item in the six months ended 30 September 2014 therefore
represents 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.
The exceptional item reported in the financial year to 31 March 2015
represents the final amounts paid in respect of the above arbitration with
Diamond Wood of E2.9m. In addition there was also an exceptional item gain of
E267,000 recorded relating to the acquisition of the remaining 50% of Tricoya
Technologies Limited - see note 6.
5. Loss per share
Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months Year Year
ended ended ended ended ended
Basic and diluted loss per share 30 Sept 30 Sept 30 Sept 31 March 31 March
2015 2014 2014 2015 2015
Total Before exceptional items Total Before exceptional items Total
Weighted average number of
Ordinary shares in issue ('000)
89,287 88,145 88,145 88,538 88,538
Loss for the period (E'000) (332) (3,622) (6,702) (5,590) (8,260)
Basic and diluted loss per share E(0.00) E(0.04) E(0.08) E(0.06) E(0.09)
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.
6. Tricoya Technologies Limited - Joint venture and business
combination
On 5 October 2012, Accsys entered into a 50:50 joint venture with Ineos to
exploit Accsys' intellectual property surrounding its proprietary Tricoya®
wood elements acetylation technology and processes. The company, Tricoya
Technologies Limited ('TTL'), will develop and exploit Accsys' Tricoya
technology for use within the worldwide panel products market estimated to be
worth more than E60 billion annually.
As part of the transaction, TTL was granted rights to exploit Accsys' Tricoya®
technology and also benefited from a licence of any intellectual property held
by Ineos that may assist the joint venture in maximising the value of the
Tricoya® proposition. Results generated by TTL were to be shared between
Accsys and Ineos in a way that reflected each party's interest, which was 50%
during the period.
On 31 March 2015, Accsys acquired Ineos's 50% equity interest as part of terms
which included the termination of the joint venture agreement and for
consideration of E1. Therefore as at 31 March 2015, Accsys owned 100% of the
share capital of TTL and its balance sheet has been fully consolidated from 31
March 2015. An exceptional gain of E267,000 was recorded in the prior year as
a gain on acquisition of subsidiary due to this bargain purchase.
During the period ended 30 September 2014 and up until 31 March 2015, TTL was
accounted for using the equity method reflecting that it was a joint venture.
During the period ended 30 September 2015, TTL has been fully consolidated and
the results are included as part of the overall group results and included
within the Business Development segment as set out in Note 2. For the purposes
of comparison only, the results for of TTL have been included below for the
period ended 30 September 2014.
The TTL results for the period from 1 April 2015 to 30 September 2015,
together with the balance sheet as at 30 September 2015 are set out below:
Income statement for TTL:
100% Consolidated Equity Accounted Equity Accounted
50% 50%
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2015 2014 2015
E'000 E'000 E'000
Licence revenue 75 225 225
Other income 30 239 258
Total revenue 105 464 483
Costs:
Staff costs 612 877 1,346
Research & development (excluding staff costs) 60 249 515
Intellectual Property 151 110 242
Sales & marketing 18 70 399
Amortisation 66 93 195
Total operating costs 907 1,399 2,696
Finance income - 5 18
EBIT 802 930 2,196
Group share of EBIT 802 465 1,098
Tricoya Technologies Limited statement of financial position at 30 September
2015:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2015 2014 2015
E'000 E'000 E'000
Non-current assets
Intangible assets 2,899 1,797 1,855
Current assets
Receivables due within one year 176 245 71
Cash and cash equivalents 118 125 1,338
Total current assets 294 370 1,409
Current liabilities
Trade and other payables (2,115) (727) (2,229)
Net current assets (1,821) (357) (820)
Net assets 1,078 1,440 1,035
100% attributable to Accsys Technologies 2015 (50% 2014) 1,078 720 1,035
Less elimination of mark-up on recharged costs (14) (10) 29
Intangible assets represents internal development costs capitalised relating
to the development of the Tricoya product and production process, including
Front End Engineering and Design which has been undertaken in the period in
respect of the first Tricoya production plant envisaged to be funded,
constructed and operated by the proposed new consortium. During the current
and previous periods TTL has benefited from the Life + Subsidy awarded by the
EC. The subsidy, worth up to E2.1m over three years, was originally awarded in
2013 and is intended for the benefit of the first Tricoya plant. A total of
E1.8m has been received in the prior periods. TTL has recorded E30,000 (2014:
E239,000) of revenue in the as a result of having incurred eligible costs.
7. Property, plant and equipment
Land and buildings Plant and machinery Office equipment Total
E'000 E'000 E'000 E'000
Cost or valuation
At 31 March 2014 5,251 27,518 732 33,501
Additions - 434 18 452
Foreign currency translation gain - - 9 9
At 30 September 2014 5,251 27,952 759 33,962
Additions - 413 45 458
Foreign currency translation gain - - 18 18
At 31 March 2015 5,251 28,365 822 34,438
Additions - 682 46 728
Disposals - - (12) (12)
Foreign currency translation (loss) - - (7) (7)
At 30 September 2015 5,251 29,047 848 35,147
Depreciation
At 31 March 2014 307 11,836 618 12,761
Charge for the period 59 937 46 1,042
Foreign currency translation gain - - 8 8
At 30 September 2014 366 12,773 672 13,811
Charge for the period 59 959 41 1,058
Foreign currency translation gain - - 21 21
At 31 March 2015 424 13,732 734 14,890
Charge for the period 59 971 45 1,075
Disposals - - (12) (12)
Foreign currency translation (loss) - - (7) (7)
At 30 September 2015 482 14,703 761 15,946
Net book value
At 31 March 2014 4,944 15,682 114 20,740
At 30 September 2014 4,885 15,179 87 20,151
At 31 March 2015 4,827 14,633 88 19,548
At 30 September 2015 4,769 14,344 88 19,201
8. Share capital
Further to the passing of all resolutions at the Company's AGM held on 11
September 2014, the entire issued share capital of the Company was
consolidated on a 5:1 basis with effect from 12 September 2014. Accordingly,
all figures concerning the number of shares stated below represent the new
E0.05 Ordinary Shares.
Own shares represents 786,893 E0.05 Ordinary Shares issued to an Employee
Benefit Trust ('EBT') at nominal value on 30 June 2015.
On 6 July 2015, a total of 20,000 of E0.05 Ordinary shares were issued to
employees under the Company's share option scheme.
In addition, of the 783,597 E0.05 Ordinary Shares which had been issued to the
EBT at nominal value on 18 August 2014, 746,241 Ordinary Shares vested on 1
July 2015. Of these beneficiaries elected to sell 390,683 Ordinary shares in
the market.
On 13 August 2015, a total of 63,909 of E0.05 Ordinary shares were issued to a
trust under the terms of the Employee Share Participation Plan.
On 8 August 2015, a total of 27,825 of E0.05 Ordinary shares were issued and
released to employees together with the 22,825 of E0.05 Ordinary shares issued
to trust on 8 August 2014.
9. Related party transactions
There were no related party transactions in the period. In the prior period
ended 30 September 2014, there were a number of related party transactions
with the Tricoya Technologies Limited joint venture, all of which arose in the
normal course of business, totalling E758,000. At the end of the 31 September
2014, E425,000 of the total amount was payable from TTL to Accsys group
companies.
10. Events occurring after the reporting period
On 25 November 2015 the Group entered a new agreement with Solvay which
provides the framework and funding for a significant increase in the
manufacturing capacity in Arnhem. Details are provided in the Chairman's and
Chief Executive's statements.
Accsys Technologies PLC
Independent review report to Accsys Technologies PLC
Introduction
We have been engaged by the company to review the condensed consolidated set
of financial statements in the half-yearly financial report for the six months
ended 30 September 2015, which comprises the consolidated interim statement of
comprehensive income, consolidated interim statement of financial position,
consolidated interim statement of changes in equity and the consolidated
interim statement of cash flow and related notes. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the AIM Rules for Companies
which require that the financial information must be presented and prepared in
a form consistent with that which will be adopted in the company's annual
financial statements.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the AIM Rules for Companies and for no
other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed consolidated financial statements in the
half-yearly financial report for the six months ended 30 September 2015 is not
prepared, in all material respects, in accordance International Accounting
Standard 34 as adopted by the European Union and the AIM Rules for Companies.
PricewaterhouseCoopers LLP
Chartered Accountants
London
27 November 2015
Notes:
a) The maintenance and integrity of the Accsys Technologies PLC website is
the responsibility of the directors; the work carried out by the auditors does
not involve consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to the
financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
This information is provided by RNS
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