REG - Aurrigo Int PLC - Interim results for the six months to 30 June 2024
26/09/2024 07:00
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RNS Number : 7046F Aurrigo International PLC 26 September 2024
26 September 2024
Aurrigo International plc
("Aurrigo", "the Group" or the "Company")
Interim results for the six months to 30 June 2024
Strong growth in Autonomous solutions and enhanced margin performance
Aurrigo International plc (AIM: AURR, the "Company" or "Aurrigo"), a leading
international provider of smart airside solutions and automotive products,
reports its interim results for the six months to 30 June 2024 ("H1 24").
Financial highlights
· Revenue increased in line with expectations by 26% to £3.9m (H1 23: £3.1m),
comprising:
o 160% increase in Autonomous division to £0.8m (H1 23: £0.3m)
o 11% increase in Automotive division to £3.1m (H1 23: £2.8m)
· Gross profit increased 100% to £1.4m (H1 23: £0.7m)
· Significantly improved gross margin of 35% (H1 23: 22.3%), reflecting an
increase in Autonomous sales and improved Automotive product mix
· Adjusted EBITDA loss reduced to £1.2m (H1 23 loss: £1.6m)
· Cash of £1.8m at period end (30 June 2023: £2.8m)
Operational highlights
· Significant expansion of Autonomous division, with H1 revenue higher than
total prior full year period
o Accelerated uptake of airside solutions with five direct airport engagements
(H1 23: 1 customer), eight contracts for our proprietary Auto-Sim® product,
one cargo handler agreement and three strategic partnerships, which together
provide a network of over 460 airports:
o Pipeline of inbound interest has grown substantially in the period, alongside
initial revenues from customers using Auto-Sim® technology
o Enhanced Autonomous solution following vehicle functionality advancements,
driving increased interest from new customers
o Operational readiness to scale including increased teams at international
airports, bringing total Group headcount to over 100
· Double-digit growth in Automotive division, with good order intake from
longstanding customers
Post-period end and outlook
· Two vehicles delivered under the Changi Phase 2b contract post period end
following vehicle enhancement works as previously announced. A further two
vehicles will then be completed and shipped to achieve the four vehicle fleet.
All-weather testing under fleet operations is scheduled in early H1 2025 using
Aurrigo's Auto-Connect® management platform, and thus these revenue contract
milestones are now expected to fall in H1 FY 2025.
· Autonomous full year revenues expected to be c.£3m (representing c.450%
increase on FY 2023)
· Automotive orderbook provides robust underlying revenue and cash flow
visibility, with full year revenues expected to be broadly in line with Board
expectations.
· Group overhead costs are being managed and tracking better than budget, thus
resulting in improved margins and with EBITDA for the full year expected to be
broadly in line with the Board's expectations.
David Keene, CEO of Aurrigo, commented: "We are pleased to report a period of
strong growth as we scale our technology, teams and customer engagements. The
growth in our Autonomous division reflects the steady scale-up of the Group's
smart airside solutions in key airport hubs around the world, which is driving
increased across our target aviation market and a growing pipeline.
During the period, we have expanded our international teams, enhanced our
hardware and software offering, and advanced our engagement with key strategic
partners, providing a robust foundation for growth. We enter the second half
with good momentum, improving margins and a clear pipeline of deliverables,
giving us confidence in our growth opportunity to deliver the airport of the
future."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
Contacts:
Aurrigo International plc +44 (0)2476 635818
David Keene, Chief Executive Officer
Ian Grubb, Chief Financial Officer
Canaccord Genuity (Nominated Adviser and Sole Broker) +44 (0)20 7523 8000
Adam James
Harry Pardoe
Alma Strategic Communications +44(0)20 3405 0205
Hilary Buchanan
Caroline Forde
Will Ellis Hancock
Cucumber PR +44 (0)78 1260 0271
Russ Cockburn
Notes to Editors:
Aurrigo International plc is an international designer and developer of fully
integrated smart airside solutions for the aviation industry, including
automated vehicles, systems and software.
The Group's proprietary, award-winning autonomous technology and secure
management system is supporting some of the world's leading airports.
Customers choose to partner with Aurrigo to transform their baggage and cargo
handling operations, improving safety, operational efficiencies and meeting
sustainability targets, while navigating growing passenger volumes, rising
costs and increasing labour shortages.
Headquartered in Coventry, UK with offices in Singapore, Cincinnati and
Ottawa, the Group has a 30+ year heritage designing and supplying automotive
vehicle manufacturers with highly advanced, innovative product and system
solutions. For more information, please visit the Group's website at
www.aurrigo.com (http://www.aurrigo.com/) .
OPERATIONAL REVIEW
Introduction
We are pleased to report a period of strong progress, in line with our vision
to be the leading provider of smart solutions for the aviation and automotive
industries that deliver a sustainable future. The Group has delivered a period
of robust double-digit growth, accelerated its market penetration through new
customers and partnerships, and continued to progress existing aviation
contracts from proof-of-concept through to staged deployment.
This progress has resulted in the Group's Autonomous division growing by 160%
to £0.8m, reflecting the steady scale-up of the Group's smart airside
solutions in key airport hubs around the world. From an operations standpoint,
the Group surpassed a strategic milestone by having its technology and
vehicles in deployment across multiple customer sites simultaneously, with
operational teams on the ground in 3 continents. This is driving growing
market awareness as the Group's blueprint for unlocking significant ROI
through modernising airport operations is increasingly demonstrated with
existing customers. Coupled with growing industry pressure for airports to
implement autonomous technology, the pipeline of inbound interest has grown
substantially, along with demand for initial engagements using the Group's
Auto-Sim® simulation technology.
We continue to make solid progress with Changi and we are working closely as
the work stipulated in our Phase 2b contract (stage 4 of the sales process) is
ongoing. Following implementation of vehicle design upgrades as previously
disclosed, the first two vehicles were delivered at the start of September
2024. The remaining two vehicles will then be completed and shipped to achieve
the four vehicle fleet and all-weather testing under fleet operations is
scheduled in early H1 2025 using Aurrigo's Auto-Connect® management platform.
Whilst this will result in these revenue contract milestones to now fall into
H1 FY25, we look forward to being able to demonstrate the results of the next
stage of the contract, which will see full fleet operations using the
Auto-Connect® platform across the airport.
Along with continued progress across the Group's other strategic partnerships,
learnings from initial contract deployments have led to further refinement of
pricing for new engagements, with all aviation contracts now comprising an
upfront cash component.
With the heavy lifting of product development and production achieved, and the
Group's technology and systems now successfully through trials in global
airport operations, the Group is entering a period of deployment and
implementation. With six vehicles now in operation we have 34 airports and 18
airlines in Stage 1 of our sales cycle, with a further eight customers using
Auto-Sim® (stage 2 of our sales cycle). This visibility, together with the
growing reputation of our solutions across our target Aviation customer base,
gives us confidence as we look ahead.
The Group's Automotive division continues to deliver strong cash flows and
good revenue visibility. The division grew 11% in the period to £3.1m,
generating £1.0m gross profit (H1 23: £2.8m and £0.7m respectively).
Post-period end we were pleased to announce a c.£1.5m contract win with an
existing global automotive manufacturing customer following a competitive
tender process. The Automotive division's market leading reputation and strong
customer relationships underpins its ability to win contracts with both new
and existing customers, underpinning its long-term growth prospects. The
pipeline remains strong and the Board continues to see good organic and
selectively acquisitive growth opportunities.
The Board continues to focus on efficiently managing costs and optimising its
manufacturing operations. Adjusted EBITDA loss narrowed to £1.2m (H1 23 loss:
£1.6m). The cash balance of £1.8m at period end leaves the Group
sufficiently capitalised for its current needs and the Board continues to
explore non-dilutive funding for projects, including grant funding.
Business Review
Aurrigo is an international designer and developer of fully integrated smart
airside solutions for the aviation industry, including automated vehicles,
systems and software. The Group supports some of the world's leading airports,
helping them to become more scalable whilst improving safety, operational
efficiencies, passenger experience and sustainability.
The Group achieves this through a combination of highly-engineered hardware
and proprietary software which works together to help aviation customers
transform baggage and cargo handling operations. The Group's end-to-end
transformation solution principally comprises:
Hardware:
· Auto-DollyTug®: fully automated autonomous baggage handling vehicles
Software:
· Autonomous Driving Software stack (ADS): in-house software for Auto-DollyTug®
· Auto-Sim®: purpose-built Airport Simulation and 3D visualisation software
tool
· Auto-Connect®: cyber-secure and resilient vehicle fleet SaaS management
platform
The Group's solutions have been designed from the ground-up and in
collaboration with customers to meet the specific needs of the aviation
industry, including improved aircraft turnaround, an important KPI.
This ground-up approach means Artificial Intelligence (AI) and Automation
Technology are at the heart of each of our products, with each technology
being harnessed to maximise effectiveness and results in the airside
environment. As an example, our vehicles use AI to enable the processing of
data coming from the in-built camera and lidar sensors which helps to
understand the scene it is looking at and moving through.
Airports are facing mounting pressure to transform decades old diesel-powered
ground handling equipment to meet growing demand from environmental pressures
and increasing passenger volumes, whilst navigating rising costs, limiting
risk exposure and tackling labour shortages. 1 We believe our technologies
offer a compelling investment case for airports. Based on Company modelling,
our autonomous solutions, once fully implemented, illustratively provide
customers with an estimated return on investment in under three years for a
typical 40m+ passenger terminal. This is in addition to increased efficiency
and an estimated c.72% reduction in tug carbon emissions, which are all
tangible benefits that our solutions bring to airside operations.
The accelerating speed of change and adoption within the industry is
demonstrated by a growing number of industry participants coming together to
address these industry challenges, such as the FTE Baggage Innovation Working
Group comprising leading aviation groups with the objective of "developing new
techniques, technologies, and business models to deliver tangible change in
the baggage sector." 2
The Group also provides innovative engineering support, product solutions and
services to global Tier 1 vehicle manufacturers, including Aston Martin,
Bentley, Jaguar and Land Rover, through its Automotive division. The Group's
strong heritage of automotive expertise, track record of innovation and
R&D and experience in supply chain management and specialised products
commercialisation continues to provide a robust business platform underpinning
the Group's growth strategy.
Growth Strategy
Aviation customer growth
The Group has successfully grown its strategic partner engagement from one
customer at H1 23 to five direct airport engagements, eight contracts on our
proprietary Auto-Sim® product, one cargo handler agreement, and three
strategic partnerships, which together provide a network of over 460 airports
and a substantial, qualified total addressable revenue opportunity of over
£2bn.
The pipeline for new engagements continues to grow following a significant
increase in inbound enquiries. The Group continues to assess and prioritise
key relationships through early consultancy engagements using the Group's
Auto-SIM® technology, a foundational step before progressing to
Auto-DollyTug® trials. The success and well-publicised demonstrations to date
with existing customers is working to streamline this exploratory phase with
newer customers and should result in increased speed of implementation and
progression through future staged deployments.
Fundamentally, we are an ambitious company, and we look forward to the
continued growth of our Autonomous division as customers opt to take more of
our products in the Aviation space. We believe our products are primed to
disrupt an industry where our solutions are capable of resolving some of its
largest challenges. It is this confidence that underpins our target of
material annual growth in Autonomous revenues over the next 3 - 4 years.
Accelerate customers through staged deployments
The Group continues to make good progress transitioning existing clients
through its phased deployment model, with these transitions shaping the
pricing structure for future profitable deployments. The Group has now
delivered vehicles to five airport customers, with expanded teams on the
ground at international customer locations, including the first team in the
US, and added personnel in Singapore, London and utilised our central
deployment team to support expanding engagements such as at Schiphol. Progress
with existing customers includes:
· Continued roll-out of multi-year partnership agreement with Changi Airport
Group (CAG). Two vehicles delivered, and delivery of two additional
Auto-DollyTug® vehicles to complete the four vehicles required for automated
baggage handling fleet operations, using Auto-Connect®.
· A contract for Auto-Sim® and Auto-DollyTug® at a large UK Airport under the
IAG agreement has now delivered a single vehicle for trialling.
· Following an agreement with International Airlines Group (IAG), a contract for
Auto-Sim® and Auto-DollyTug® at Cincinnati / Northern Kentucky International
Airport (CVG) has now delivered a single vehicle for trialling.
· A full demonstration completed under a contract with Stuttgart Airport and the
Digital Testbed Cargo Project (DTAC) Consortium to trial Auto-DollyTug® to
transport cargo from the terminal to the deck of the aircraft.
· Following an agreement with Schiphol Airport, a contract for Auto-Sim® and
Auto-DollyTug® has now delivered a vehicle for trialling.
The Group's core focus in the second half is to continue to deliver existing
single vehicle deployments through to multiple fleet operations in 2025.
Optimising Automotive business to grow sales
The Group's Automotive business continues to benefit from longstanding
customer relationships with multi-year contracts providing robust revenue
visibility and strong cash flows. The division continued to see double-digit
growth following new customer wins and repeat business with existing
customers. The landscape of specialist suppliers remains highly fragmented,
providing good growth opportunities, both organically and through selective
acquisition, underpinned by Aurrigo's leading reputation.
R&D
Following significant investment and collaboration with strategic partners to
date, the Group has surpassed a number of key technology milestones to reach
its current market leading position. This includes the major development and
launch of the Group's next generation autonomous airside solutions, the
rollout of an enhanced electrification Auto-SIM® module that enables airports
to plan and optimise charging infrastructure programmes, and ongoing
collaboration with UPS to develop and deploy a larger capacity cargo vehicle,
Auto-Cargo®, at their East Midlands Airport hub, the UK's second largest
cargo terminal.
It is this cutting-edge innovation that has resulted in the Group successfully
securing a number of R&D grants to date and the Group continues to explore
future grant applications where it fits the growth strategy to do so.
Furthermore, the Company continues to strengthen its patent portfolio and IP
register to protect key features and technology. As of September 2022, the
Group's patented software and hardware portfolio had a collective value of
£16m.
In addition to continued investment in its established hardware and software
products in line with its development roadmap, the Group is now increasingly
focused on cost optimisation and value engineering to prepare for volume
deployments. As part of this, the Group is focused on developing scale in the
manufacturing facility in Coventry (UK) and also investigating opportunities
for additional outsourced capacity in the USA, Europe and Asia.
Current Trading and Outlook
With partnerships secured with some of the largest organisations in the
aviation industry, the Group continues to make solid progress, deploying and
demonstrating its smart aviation solutions in large, global airport
environments. The Group enters the second half with momentum and a clear focus
on the short-term objectives. These include the continued staged deployments
at its current four operational airports, including readiness for stage 4
deployment with Changi and meeting milestones with the single vehicle
deployments at the other three airport sites. In addition, the Group is
focussed on developing further Auto-SIM® engagements for 2025 and completing
2024 projects, evaluating future distribution partnerships and growing
Automotive contracts with existing and new customers. Following the delivery
of two vehicles under the Changi Phase 2b contract post period, the remaining
two vehicles will be completed and shipped to achieve the four vehicle fleet.
All-weather testing under fleet operations is scheduled in early H1 2025 using
Aurrigo's Auto-Connect® management platform.
With these revenue contract milestones for the Changi Phase 2b contract
therefore now expected in H1 2025, the Board anticipates that the Autonomous
Division will deliver c. £3m of revenues in FY24, representing a c.450%
increase on FY 2023. Full year revenues for the Automotive Division is
expected to be broadly in line with Board expectations. Overhead costs are
being managed and tracking better than budget, thus resulting in improved
margins and with EBITDA for the full year expected to be broadly in line with
the Board's expectations. The achievements made to date in 2024 represents
significant progress of the Group's growth strategy, which, combined with a
good pipeline, leaves the Board optimistic about the Group's long-term
opportunity to deliver the airport of the future.
FINANCIAL REVIEW
Revenue
Revenue in the period was £3.9m (H1 23: £3.1m), an increase of £0.8m
(25.9%) compared to H1 23.
Revenue from the Autonomous segment has increased by £0.5m to £0.8m compared
to H1 23, an increase of 160%. All revenues for H1 24 derive from aviation
contracts compared to £0.1m in H1 23 with an increase in Aviation customers
from 1 to 5 and the embedding of Auto-Sim® within these customers. Aviation
revenues (a subset of the Autonomous segment) have increased by 552% to £0.8m
and exceeds the FY23 Autonomous revenues by 48% (FY23: £0.5m).
Automotive revenues have increased by 10.8% including six month's contribution
from GB Wiring compared to one month in H1 23. The addition of GB Wiring and
new actively engaged customers have reduced customer concentration of the top
two customers from 80.8% of total revenue in H1 23 to 56.4% in H1 24.
Gross profit
Gross profit for the period was £1.4m (H1 23: £0.7m). Gross profit margin
was 35.0% (H1 23: 22.3%). The increase in margin reflects a margin increase
for Automotive due to sales mix and higher margin Autonomous revenues in line
with strategic objectives.
Adjusted EBITDA
Adjusted EBITDA loss reduced to £1.2m (H1 23: £1.6m), representing a
reduction of £0.4m (23.1%) compared to H1 23. Other operating income of
£0.3m (H1 23: £0.4m) has reduced resulting from lower RDEC tax credits. This
reflects the reduced R&D spend as Aviation products have matured over the
last twelve months.
Depreciation and amortisation
The total charge for the period was £0.3m (H1 23: £0.3m), of which £0.16m
(H1 23: £0.15m) related to the amortisation of intangible assets.
Share-based payments
The total charge for the period under IFRS 2 "Share-based payments" was £0.1m
(H1 23: £0.1m). This charge related to the awards made under the 2022 Share
Option Plan established on admission on 15 September 2022.
Cashflow
The Company's cash is position £1.8m (H1 23: £2.8m). The net cash used for
operating activities was £1.5m (H1 23: £1.9m) supporting growth in employees
and vehicle production.
Balance Sheet
The Group had net assets of £7.4m as at 30 June 2024 (H1 23: £6.8m).
Consolidated Statement of Total Comprehensive Income For the period ended 30
June 2024
Unaudited Unaudited Audited
Notes 6 months ended 6 months ended Year
30 June 30 June ended
2024 2023 31 December
2023
£'000 £'000 £'000
Revenue 4 3,883 3,083 6,628
Cost of sales (2,525) (2,397) (5,152)
Gross profit 1,358 686 1,476
Other operating income 299 353 812
Administrative expenses including non-recurring expenses, share based payment (3,245) (3,013) (6,325)
charges, depreciation and amortisation
Operating loss (1,588) (1,974) (4,037)
Share based payments 60 121 246
Depreciation 154 131 274
Amortisation 163 147 294
Adjusted EBITDA * (1,211) (1,575) (3,223)
Finance income 58 49 76
Finance costs (26) (21) (46)
Loss before taxation (1,556) (1,946) (4,007)
Income tax (charge)/credit (21) (43) 90
Loss for the period attributable to equity shareholders of the parent (1,577) (1,989) (3,917)
Other comprehensive income: (13) 6
Items that will not be reclassified to profit or loss
Currency translation differences
7
Total other comprehensive income (13) 6 7
(1,590) (1,983) (3,910)
Total comprehensive loss for the period attributable to equity shareholders of
the parent
Basic EPS (£ per share) 5 (0.03) (0.05) (0.09)
Diluted EPS (£ per share) 5 (0.03) (0.05) (0.09)
* Adjusted EBITDA refers to earnings before interest, tax, depreciation and
amortisation and impairment. Share based payments and one-off costs of
admission to the AIM are also excluded.
All results were derived from continuing operations.
Consolidated Statement of Financial Position For the period ended 30 June 2024
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Non-current assets
Intangible assets 6 6,042 5,681 5,974
Goodwill 202 122 202
Property, plant and equipment 7 762 721 742
Total non-current assets 7,006 6,524 6,918
Current assets
Inventories 2,185 959 1,709
Trade and other receivables 2,023 1,839 2,306
Current tax receivable 323 264 330
Cash and cash equivalents 1,785 2,797 3,462
Total current assets 6,316 5,859 7,807
Total assets 13,322 12,383 14,725
Current liabilities
Trade and other payables (2,023) (1,341) (1,818)
Borrowings (30) (30) (30)
Lease liabilities (257) (187) (216)
Deferred grant income (293) (217) (217)
Deferred consideration - (50) -
Total current liabilities (2,603) (1,825) (2,281)
Net current assets 3,713 4,034 5,526
Total assets less current liabilities 10,719 10,558 12,444
Non-current liabilities
Borrowings (10) (40) (25)
Lease liabilities (208) (383) (284)
Deferred grant income (3,151) (3,333) (3,271)
Total non-current liabilities (3,369) (3,756) (3,580)
Total liabilities (5,972) (5,581) (5,861)
Net assets 7,350 6,802 8,864
Equity attributable to equity holders of the Group
Share capital 91 83 91
Share premium account 10,934 7,103 10,927
Share option reserve 438 264 383
Retained losses (4,105) (652) (2,542)
Foreign exchange reserve (8) 4 5
Total equity 7,350 6,802 8,864
Consolidated Statement of Changes in Equity For the period ended 30 June 2024
Share Share Share Foreign exchange reserve Retained losses Total equity attributable to owners of the parent
capital Premium option reserve
account
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 (audited) 83 7,103 143 (2) 1,307 8,634
Loss for the six month period ended 30 June 2023 - (1,989) (1,989)
- - -
Currency translation differences - - - 6 - 6
Transactions with owners in their capacity as owners: - - 121
Share option expense
- 121 -
Deferred tax on share based payment transactions - - - - 30 30
At 30 June 2023 (unaudited) 83 7,103 264 4 (652) 6,802
Loss for the six month period ended 31 December 2023 - (1,928) (1,928)
- - -
Currency translation differences - - - 1 - 1
Transactions with owners in their capacity as owners:
Issue of share capital 8 4,109 - - - 4,117
Costs of issue set against share premium - (293) - - - (293)
Share option expense - - 125 - - 125
Deferred tax on share based payment transactions - - - - 32 32
Issue of share capital from reserves - 8 (6) - 6 8
At 31 December 2023 (audited) 91 10,927 383 5 (2,542) 8,864
Loss for the six month period ended 30 June 2024 - - - - (1,577) (1,577)
Currency translation differences - - - (13) - (13)
Transactions with owners in their capacity as owners: - - 60 - - 60
Share option expense
Share option exercises - 7 (5) - (2) -
Deferred tax on share based payment transactions - - - - 16 16
-
At 30 June 2024 (unaudited) 91 10,934 438 (8) (4,105) 7,350
Consolidated Statement of Cash Flows For the period ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 June 30 June ended
2024 2023 31 December
2023
£'000 £'000 £'000
Cash flow from operating activities
Loss for the period (1,577) (1,989) (3,917)
Adjustments for:
Tax charge/(credit) 21 43 (90)
Finance costs 26 21 46
Investment income (58) (49) (76)
RDEC grant income (47) (103) (16)
Amortisation of intangible assets 163 131 294
Depreciation of tangible assets 154 147 274
Profit on disposal of tangible assets (30) - -
Grant income recognised (252) - (796)
Equity settled share based payment expense 60 121 246
(1,540) (1,678) (4,035)
Changes in working capital:
Increase in inventories (476) (28) (767)
(Decrease)/increase in trade and other receivables 283 (307) (619)
Increase in trade and other payables 192 163 523
Cash used in operations (1,541) (1,850) (4,898)
Interest paid - (4) -
Income taxes refunded 50 - -
Net cash used in operating activities (1,491) (1,854) (4,898)
Cash flow from investing activities
Acquisition of subsidiary (net of cash acquired) - (138) (199)
Capitalised development costs (206) (395) (813)
Grant income 208 - 625
Purchase of intangible assets (22) (30) (52)
Purchase of property, plant and equipment (98) (92) (223)
Proceeds from the sale of property, plant and equipment 30 - -
Interest received 58 49 76
Net cash used in investing activities (30) (606) (586)
Cash flow from financing activities
Interest paid (26) (21) (46)
Proceeds from issue of shares 7 - 3,832
Repayments of bank loans and borrowings (15) (15) (30)
Payment of lease liabilities (127) (91) (198)
Net cash (used in) / generated from financing activities (161) (127) 3,558
Decrease in cash and cash equivalents (1,682) (2,587) (1,926)
Cash and cash equivalents at beginning of the period 3,462 5,386 5,386
Effect of foreign exchange rates 5 (2) 2
Cash and cash equivalents at end of period 1,785 2,797 3,462
Notes to the Interim Financial Statements For the period ended 30 June 2024
1. Company information
Aurrigo International Plc is a public limited company domiciled and
incorporated in England and Wales. The registered office is Unit 33, Bilton
Industrial Estate, Humber Avenue, Coventry, United Kingdom, CV3 1JL. These
consolidated interim financial statements comprise Aurrigo International Plc
and all of its subsidiaries, collectively the "Group".
The principal activity of the Group is that of the supply of electrical
components to the automotive industry and the development of electric
autonomous vehicles.
2. Significant accounting policies
2.1 Basis of preparation
The financial information set out in these interim consolidated financial
statements for the six months ended 30 June 2024 is unaudited. The financial
information presented are not statutory accounts prepared in accordance with
the Companies Act 2006, and are prepared only to comply with AIM requirements
for interim reporting. Statutory accounts for the year ended 31 December 2023,
on which the auditors gave an audit report which was unqualified and did not
contain a statement under Section 498(2) or (3) of the Companies Act 2006,
have been filed with the Registrar of Companies.
These financial statements have been prepared in accordance with international
accounting standards ("IFRS") as adopted by the United Kingdom ("UK") insofar
as these apply to interim financial statements.
The interim consolidated financial statements have been prepared using
consistent accounting policies as those adopted in the financial statements
for the year ended 31 December 2023.
The interim consolidated financial statements are prepared in sterling, which
is the functional currency of the group. Monetary amounts in these interim
consolidated financial statements are rounded to the nearest £1,000.
The financial statements have been prepared on the historical cost basis,
modified to include the revaluation of certain financial instruments at fair
value.
2.2 Basis of consolidation
The interim consolidated Group financial statements consist of the financial
statements of the parent company Aurrigo International Plc together with all
entities controlled by the parent company (its subsidiaries) and the Group's
share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2024. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
Group.
All intra-group transactions, balances and unrealised gains on transactions
between Group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Subsidiaries are consolidated in the Group's financial statements from the
date that control commences until the date that control ceases.
2.3 Going concern
As at 30 June 2024 the Group had net assets of £7,335k and cash and cash
equivalents of £1,785k.
Management has prepared detailed financial projections for a period of at
least twelve months from the date of signing these interim financial
statements. These projections have been subject to various sensitivity
analysis and stress-testing, so as to estimate the impact of severe but
plausible risks. The board challenged the underlying assumptions of the
projections and the stress-test models.
The Directors regularly monitor the Group cash position and available
potential funding. Having considered the Group's cashflow forecasts, the
Directors believe that there is a reasonable expectation that the Group has
adequate resources to continue in operational existence for at least twelve
months from the date of approval of these financial statements.
Accordingly, these interim financial statements have been prepared on a going
concern basis. The interim financial statements do not include the adjustments
that would result if the Group was unable to continue as a going concern.
2.4 Use of estimates and judgements
In the application of the group's accounting policies, the directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of revision and future periods if the revision affects both current and
future periods.
Critical judgements: Autonomous vehicles
The directors make a judgement as to the appropriate classification of each
autonomous vehicle constructed during a period. Where vehicles are constructed
for sale, autonomous vehicles are classified as inventory and are measured at
the lower of cost and estimated selling price less costs to complete and sell.
Where vehicles are intended for use on a continuing basis in the Group's
activities they are classified as tangible fixed assets and are measured at
depreciated cost.
In addition there are estimation uncertainties around determining labour and
overheads absorbed during the construction of vehicles as well as estimating
likely selling price less costs to complete and sell.
Key sources of estimation uncertainty
Development costs
Development costs included within intangible fixed assets are amortised over
their estimated useful life of 10 years, once they are brought into use. The
selection of estimated lives requires the exercise of management judgement.
Useful lives are regularly reviewed and should management's assessment of
useful lives shorter or increase then amortisation charges in the financial
statements would increase or decrease and carrying amounts of the assets would
change accordingly.
The Group is required to consider, on an annual basis, whether indications of
impairment relating to such assess exist and if so, perform an impairment
test. The recoverable amount is determined based on the higher of value in
use calculations or fair value less costs to sell. The use of value in use
method requires the estimation of future cash flows and the chose of a
discount rate in order to calculate the present value of the cash flows. The
Directors are satisfied that all recorded assets will be fully recovered from
expected future cash flows.
Capitalisation of development costs
The Group recognises as intangible fixed assets development costs that are
considered to meet the relevant capitalisation criteria. The measurement of
such costs and assessment of their eligibility in line with the appropriate
capitalisation criteria requires judgement and estimation around the time
spent by eligible staff on development, expectation around the ability to
generate future economic benefit in excess of cost and the point at which
technical feasibility is established. The costs incurred on the intangible
fixed assets were the key growth areas for the Group's admission to AIM which
helps to justify the capitalisation and demonstrates the Group's ability to
capitalise these assets.
Incremental borrowing rates applied to calculate lease liabilities
The Group has used the incremental borrowing rate to calculate the value of
the lease liabilities relating to its property lease liabilities recognised
under IFRS 16. The discount rate used reflects the estimates risks associated
with borrowing against similar assets by the Group, incorporating assumptions
for similar terms, security, and funds at that time.
Share based payments
Share options have been fair valued excluding implied exit probabilities. At
each reporting period end, the Group makes an assessment of the likelihood of
a range of exit routes, including implied probabilities, dates and values for
each, and apply this to the outstanding share options yet to be exercised. The
share-based payment expense included in the Group Statement of Comprehensive
Income is then adjusted to reflect the straight-line expensing of the
underlying fair value through to expected exit date.
3. Revenue
IFRS 8 'Operating Segments' requires operating segments to be identified on
the basis of internal reports of the Group that are regularly reviewed by the
Group's chief operating decision maker. The chief operating decision maker of
the Group is considered to be the Board of Directors. The Group has considered
the overriding core principles of IFRS 8 'Operating segments' as well as its
internal reporting framework, management and operating structure. The
conclusion is that the Group has two operating segments as follows:
· Automotive components - the supply of electrical components for
use in the automotive sector and across other industrial applications, as well
as trim and design components.
· Autonomous - the design, development and manufacture of
autonomous vehicles and associated autonomous design and consultancy services.
The Group applies IFRS 15 'Revenue from contracts with customers'. Under IFRS
15, the Group applies the 5-step method to identify contracts with its
customers, determine performance obligations arising under those contracts,
set an expected transaction price, allocate that price to the performance
obligations, and then recognises revenues as and when those obligations are
satisfied.
4. Segmental analysis of revenue
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 June 30 June ended
31 December
2024 2023
2023
£'000 £'000 £'000
Automotive components 3,071 2,771 6,081
Autonomous 812 312 547
Total revenue from contracts with customers 3,883 3,083 6,628
Revenue from customers who individually accounted for more than 10% of total
Group revenue was as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 June 30 June ended
2024 2023 31 December
2023
£'000 £'000 £'000
Customer 1 516 696 1,494
Customer 2 1,673 1,796 3,528
Customer 3 527 124 341
2,716 2,616 5,363
Customer 3, whilst a long term client of the group, has only accounted for
more than 10% of group revenues since 1 January 2024. Nevertheless, we have
reported the revenue derived from customer 3 in the comparative periods to aid
understanding.
5
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Unaudited Unaudited Audited
30 June 30 June 31 December
2024 2023 2023
Earnings used in calculation (£'000) (1,577) (1,989) (3,917)
Weighted average number of ordinary shares 45,833,291 41,666,667 42,177,356
Basic EPS (£) (0.03) (0.05) (0.09)
Weighted average number of dilutable shares 45,833,291 41,666,667 42,177,356
Diluted EPS (£) (0.03) (0.05) (0.09)
In the current, prior period and prior year the group has incurred losses and
as such has not presented any dilutive shares in accordance with IAS 33
'Earnings per share'. The diluted earnings per share is therefore the same as
the basic earnings.
6. Intangible assets
Patents Research and development Total
£'000
£'000 £'000
Cost
At 1 January 2023 96 5,486 5,582
Additions 30 395 425
At 30 June 2023 126 5,881 6,007
Additions 22 418 440
At 31 December 2023 148 6,299 6,447
Additions 22 206 228
At 30 June 2024 170 6,505 6,675
Amortisation and impairment
At 1 January 2023 11 168 179
Amortisation charged for the period 3 144 147
At 30 June 2023 14 312 326
Amortisation charged for the period 3 144 147
At 31 December 2023 17 456 473
Amortisation charged for the period 4 156 160
At 30 June 2024 21 612 633
Carrying amount
At 30 June 2024 (unaudited) 149 5,893 6,042
At 31 December 2023 (audited) 131 5,843 5,974
At 30 June 2023 (unaudited) 112 5,569 5,681
7. Property, plant and equipment
Unaudited Unaudited Audited
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Property, plant and equipment 324 165 295
Right of use assets 436 556 447
760 721 742
The Group has lease contracts for buildings and vehicles used in its
operations.
1
https://www.iata.org/en/programs/ops-infra/ground-operations/safety/#:~:text=One%20of%20the%20main%20causes,unless%20preventive%20action%20is%20taken
(https://www.iata.org/en/programs/ops-infra/ground-operations/safety/#:~:text=One%20of%20the%20main%20causes,unless%20preventive%20action%20is%20taken)
.
2
https://www.futuretravelexperience.com/fte-baggage-innovation-working-groups/
(https://www.futuretravelexperience.com/fte-baggage-innovation-working-groups/)
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