REG - CyanConnode Holdings - Final Results
23/08/2022 07:00
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RNS Number : 8355W CyanConnode Holdings PLC 23 August 2022
23 August 2022
CyanConnode Holdings plc
("CyanConnode", "the "Group" or the "Company")
Final Results for the Year Ended 31 March 2022
CyanConnode Holdings plc (AIM: CYAN) announces its audited results for the
year ended 31 March 2022.
Financial highlights
· Increase of 49% in revenue to £9.6m in2022 from £6.4m in 2021 ,
the highest annual revenue for the Group to date
· Increase of 61% in gross profit to £5.0m in 2022 from £3.1m in 2021
· Decrease of 62% in operating loss to £1.0m in 2022 from £2.7m in
2021 as the Group moves towards profitability
· Adjusted EBITDA profit of £0.1m in 2022 compared to a loss of
£1.9m in 2021
· Increase of 58% in cash position from £1.5m in 2021 to £2.4m in
2022
Operational Highlights
· 612,000 Omnimesh Radio Frequency (RF) Modules shipped against current
contracts during the year (FY21: 481,000)
· 152,000 Omnimesh RF Modules ordered for a new customer in northern
India
· 31,000 Omnimesh RF Modules for a follow-on order for the MEA
(Metropolitan Electricity Authority Smart Grid Project in) Thailand
· 100,000 Omnimesh RF Modules ordered for a new customer in Africa
· Two oversubscribed placings completed, raising £5.15 million before
expenses
· Award of London Stock Exchange Green Economy Mark
· Winner of the Frost and Sullivan Global Smart Metering Technology
Innovation Leadership Award
Post Year End Highlights
· 1,000,000 Omnimesh RF Modules and associated products ordered from
Genus Power Infrastructure Limited (Genus)
· Two orders won from IntelliSmart Infrastructure Pvt Ltd
(IntelliSmart) for a total of 300,000 Omnimesh RF Modules and associated
products
· New order worth USD 6.7m won from Middle East and North Africa (MENA)
for NB-IoT gateways
· Further new order worth USD 2.5m won from MENA for Cellular gateways
· £2.6 million cash received from customers
· Omnimesh integration underway with a further nine meter models
· Revamped Distribution Sector Scheme (RDSS) approved by the Government
of India to help Distribution Companies (DISCOMS) to improve their operational
efficiencies
· Following an initial delay in the empanelment process, DISCOMS
approved to release tenders under the RDSS Scheme in August 2022
John Cronin, Executive Chairman of CyanConnode, commented:
"We've been delighted with the results achieved during the financial year
being reported, which showed record revenues being achieved, and a positive
adjusted EBITDA. FY22 also saw record numbers of modules being shipped and
record cash being collected.
Since the year end we have announced orders for a total of 1.3 million units
in India, and orders for new products in a new territory (the MENA region).
We're currently integrating with nine new meter types. In India, the new RDSS
has been launched and the empanelment process is progressing, allowing more
tenders to be released. Momentum in the markets in which we operate continues
to grow, and we're looking forward to continued success in the current
financial year.
We'd like to thank all employees for their ongoing hard work and dedication to
achieve these record results. We'd also like to thank all shareholders for
their continued support and look forward to continuing to deliver successful
results."
- Ends -
The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.
Enquiries:
CyanConnode Holdings plc Tel: +44 (0) 1223 225 060
John Cronin, Executive Chairman www.cyanconnode.com (http://www.cyanconnode.com)
Cenkos Securities plc (Nomad and Joint Broker) Tel: +44 (0) 20 7397 8900
Stephen Keys / Charlie Combe
Tel: +44 (0) 20 7614 5900
Arden Partners plc (Joint Broker)
Simon Johnson (Corporate Broking)
Ruari McGirr (Corporate Finance)
Chairman's Statement
Operational Review
India
The union budget of 2020-21 paved the way for the replacement of 250 million
conventional electricity meters with smart meters by 2025. The Revamped
Distribution Sector Scheme (RDSS) was announced at the union budget of
2021-22, where in the first phase 100 million smart meters are to be installed
by December 2023, with the remainder by March 2025.
The Ministry of Power, Government of India (GOI), also produced a revised
Standard Bidding Document (SBD) and a contract agreement that can be directly
adopted by utilities for rolling out the smart metering programme. These steps
have acted as a catalyst in spurring forward the smart metering program in
India and as a result the scale of tenders has increased significantly.
During the period, CyanConnode won two new orders, the first one was for
151,740 Omnimesh RF Modules for Himachal Pradesh State Electricity Board
(HPSEB), marking an entry for CyanConnode into the hilly regions of the
country. The majority of the modules were dispatched during the period and
deployment is expected to be completed in FY23.
The second order was for 1,000 Omnimesh RF Modules from IntelliSmart for the
state of Assam. This was the first order from IntelliSmart, and was a
precursor to two larger orders which have been won during FY23 bringing the
total orders for this project to 301,000 Omnimesh RF Modules. IntelliSmart
is also the first service provider to use the Design, Build, Finance, Own,
Operate, Transfer (DBFOOT) model and it has also installed the first smart
prepaid meter in India under the RDSS.
Key highlights for CyanConnode India for the financial year ended March 2022
are set out below:
• CyanConnode India delivered record annual revenue and cash
collection.
• >562,000 Omnimesh RF Modules and 3,907 Omnimesh Gateways were
supplied.
• >600,000 Omnimesh RF Modules and 3,752 Omnimesh Gateways were
commissioned.
• CyanConnode is now the largest and most experienced supplier of RF
smart mesh networks in India.
• Dedicated space for CyanConnode in the Virtual Smart Grid
Knowledge Centre (SGKC) facilitated by National Smart Grid Mission and Power
Grid Corporation of India, Ltd. SGKC is a Knowledge Centre platform, set up by
the Ministry of Power GOI, to demonstrate excellence in Smart Grid (see:
http://sgkc.powergrid.in/cyanconnode.php
(http://sgkc.powergrid.in/cyanconnode.php) )
• Integration with two further meter manufacturers (Avon Meters and
Linkwell) were recommenced, which will result in Omnimesh modules being
compatible with the five leading meter manufacturers in India.
• Cyber security certification completed on CyanConnode Head End
System (HES) (CERT-IN certified).
APAC and Middle East North Africa
The smart metering market in the Asia Pacific (APAC) and Middle East North
Africa (MENA) region has continued to mature and presents a significant
opportunity for CyanConnode.
During the year the Group has continued with the deployment of the order won
in 2019 for the Metropolitan Electricity Authority (MEA), a Thai state
enterprise under the Ministry of Interior. The initial order was for 33,000
Omnimesh RF Modules and associated products, placed on the Group by its Agent
and Partner, The JST Group (JST), and Forth Corporation Public Company Limited
(Forth). In March 2020, a further 206,000 Omnimesh licenses were ordered
allowing MEA to connect a total of 240,000 meters to the Omnimesh Head End
System (HES). All Omnimesh modules and gateways were delivered during FY21.
During FY22 a follow-on order was received for a further 31,000 Omnimesh RF
Modules and associated products.
In August 2021, the Group announced an order for 100,000 Omnimesh RF Modules
together with Advanced Metering Infrastructure, Services, Omnimesh Head-End
Software, Perpetual License and an Annual Maintenance Contract from a new
customer for a smart metering deployment in Africa.
Shortly after the financial year end, the Group announced an order for a smart
metering deployment in the MENA region. Under the contract CyanConnode will
supply 65,000 interoperable smart NB-IoT gateways to Esyasoft Technologies,
UAE. The gateways will be deployed by Abu Dhabi Distribution Company (ADDC)
and Al Ain Distribution Company (AADC). The NB-IoT gateways will communicate
with and control all existing smart meters for both electricity and water; the
gateways will have the capacity to connect up to one million smart meters.
Europe
In April 2019, a follow-on order worth £0.7m was received from HM Power
(HMP), for smart metering of district heating and power, which further
demonstrates the flexibility of CyanConnode's standards-based Omnimesh
products. The order also includes the newly introduced Omnimesh Long-Range RF
Module that has a range of up to 12km, which thereby increases the resilience
of the RF Smart Mesh Network in rural areas. Delivery of the Omnimesh
Long-Range RF Modules commenced in Q4 2019 with 41,000 modules being delivered
during the year. 90,000 modules have been delivered to date.
The UK Government requires UK energy suppliers to rollout approximately 53
million smart meters to their customers before the end of 2025. To date,
21.7 million smart meters have been installed and connected to the digital
highway operated by the Data Communications Company (DCC). CyanConnode has a
contract to provide software licenses and support for its Radio Frequency (RF)
Smart Mesh Networks, which will be deployed in areas where there is an
unreliable or weak cellular signal, and it believes that the deployment of its
technology will gain momentum during the latter stages of the rollout.
Fundraisings
At the start of June 2021, the Company completed a heavily oversubscribed
placing and subscription, raising £3.15 million before expenses, at a price
of 9.5 pence per share. The issue price represented a premium of approximately
2.2% to the closing market price of 9.3 pence per share on the last business
day prior to the announcement of the placing and subscription.
In March 2022, CyanConnode completed a further oversubscribed placing and
subscription, raising £2 million before expenses at a price of 14 pence per
share.
The net proceeds of the Placings and the Subscriptions are being used to
strengthen the Company's balance sheet, to increase working capital, to allow
the Company to continue to take advantage of its significant growth
opportunities and to execute the Company's growing order book and pipeline.
Awards
During the year the Group was the recipient of four awards and
classifications, as follows;
· August 2021, CyanConnode was awarded the Green Economy Classification
& Mark by the London Stock Exchange. This classification, first introduced
in 2019, was created to highlight companies and investment funds listed on all
segments of London Stock Exchange's Main Market and AIM that are driving the
global green economy. To qualify for the Green Economy Mark, companies and
funds must generate 50% or more of their total annual revenues from products
and services that contribute to the global green economy.
· September 2021, CyanConnode won the 2021 Frost & Sullivan Global
Smart Metering Technology Innovation Leadership Award. Frost & Sullivan
was impressed with CyanConnode's innovation in the smart meter industry and
recognised that it has grown from a regional European pioneer into a global
leader.
· November 2021, CyanConnode won the Cambridge Wireless Best Connector
Business'' Award. This award recognises teams or businesses that are deploying
wireless technology to improve products, increase operational efficiency or
bring other benefits. The award celebrates impactful applications of wireless
technology. CyanConnode was recognised for their success in bringing smart
metering technologies to market.
· March 2022, CyanConnode won the Megabuyte Fastest Growing Company
award.
Outlook
Since the period end, CyanConnode has won five orders, including the
largest-ever order from India. They were as follows;
· April 2022, an order for a smart metering deployment in the MENA
region. Under this contract CyanConnode will supply 65,000 interoperable smart
NB-IoT gateways to Esyasoft Technologies, UAE. The gateways will be deployed
by Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company
(AADC). The NB-IoT gateways will communicate with and control all existing
smart meters for both electricity and water; the gateways will have the
capacity to connect up to one million smart meters.
· May 2022, an order for 100,000 Omnimesh RF Modules together with
advanced metering infrastructure, standards-based hardware, services, Omnimesh
head-end software, perpetual license and an annual maintenance contract, for a
smart metering project in Assam. This order was received from IntelliSmart,
who were the first service provider to use the DBFOOT model and also installed
the first smart prepaid meter in India under the RDSS (Revamped Distribution
Sector Scheme).
· June 2022, CyanConnode announced a further order from Intellismart
for the same project for 200,000 Omnimesh RF Modules together with advanced
metering infrastructure, standards-based hardware, services, Omnimesh head-end
software, perpetual license, and annual maintenance contract.
· August 2022, an order was announced for Cellular Gateways to provide
smart communications for an Advanced Metering Infrastructure project located
in the MENA region. This order, worth USD 2.5 million, was for a new cellular
product to be fitted to existing electricity meters.
· August 2022, the Group was delighted to announce that its subsidiary,
CyanConnode India Pvt Ltd, won its largest-ever order. The Order was for
one million Omnimesh Modules, together with Advanced Metering Infrastructure,
Standards-Based Hardware, Omnimesh Head-End Software, Perpetual License and a
Support and Maintenance Contract.
In addition, CyanConnode's business has continued on its growth path and is
currently integrating with a further nine meter models, giving access to a
larger number of opportunities.
In India the market has continued to move forward with its plans to implement
250 million smart meters. In August 2022, the Government of India approved the
Revamped Distribution Sector Scheme (RDSS) to help DISCOMs improve their
operational efficiencies and financial sustainability by providing
result-linked financial assistance to DISCOMs to strengthen supply
infrastructure. The scheme has an outlay of Rs 3,03,758 Crore (£30 billion)
over 5 years. in addition, following an initial delay in the empanelment
process, DISCOMS were approved to release tenders under the RDSS Scheme in
August 2022. Eight companies are currently empanelled.
I would once again like to thank all shareholders for their ongoing support
during what has been our most successful year to date. We look forward to
further order announcements during this financial year as the Indian smart
metering market continues to mature, and to delivering the backlog of orders
won in current and previous periods.
John Cronin
Executive Chairman
Financial Review
Despite the year having started during the second wave of the Covid-19
pandemic, with many countries being in lockdown, the Group managed to continue
with its deployments and is pleased to have achieved record revenues for the
year.
A summary of the key financial results for the year and details relating to
its financing position at the yearend are set out in the table below and
discussed in this section.
12 months Mar 2022 12 months Mar 2021 15 months Mar 2020 12 months Dec 2018 12 months Dec 2017
£000 £000 £000 £000 £000
Revenue 9,562 6,437 2,451 4,465 1,171
R&D expenditure (including staff costs) 1,755 1,791 2,381 2,466 4,148
Operating costs 6,025 5,788 7,600 9,061 11,650
Operating loss (1,018) (2,685) (6,230) (6,320) (11,153)
Depreciation and amortisation 616 627 773 472 489
EBITDA (401) (2,058) (5,457) (5,848) (10,664)
Stock impairment 62 108 4 578 55
Share based compensation 363 80 267 445 422
Underlying operating loss (38) (1,978) (5,190) (5,403) (10,242)
Foreign exchange (gain)/losses (131) (15) 267 16 52
Adjusted EBITDA 1 (#_ftn1) 58 (1,885) (4,919) (4,809) (9,868)
Cash and cash equivalents 2,355 1,489 1,172 4,564 5,394
Average monthly operating cash outflow (261) (81) (245) (487) (808)
Mar 2022 Mar 2021 Mar 2020 Dec 2018 Dec 2017
FTE 2 (#_ftn2) FTE FTE FTE FTE
Average 59 47 50 52 44
Year end 60 54 48 61 52
Included within the table above are two alternative performance measures,
EBITDA and adjusted EBITDA. These are additional measures which are not
required under UK adopted International Accounting Standards. These measures
are consistent with those used internally and are considered important to
understanding the financial performance and the financial health of the Group.
EBITDA (Loss before Interest, Tax, Depreciation and Amortisation) is a measure
of cash generated by operations before changes in working capital. Adjusted
EBITDA is a measure of cash generated by operations before changes in working
capital and after other items have been adjusted for as set out in the table
above. It is used to achieve consistency and comparability between reporting
periods.
Notably from the table on the previous page:
• Revenue of £9.6 million was 49% higher than for FY21 (£6.4
million)
• Operating loss for the year to March 2022 was £1.7 million lower
than previous year
• EBITDA (loss) for the year to March 2022 was £1.7 million lower
than previous year (2021: £2.1 million loss)
• Cash and cash equivalents at the end of FY22 of £2.4 million was
£0.9 million higher than the end of FY21
• Share based compensation charges reflect the fair value of share
options granted to employees over the vesting period of these options.
Financial items of note during the year other than those set out above were:
· Cash received from customers during FY22 was £8.2 million (2021:
£5.3million)
· Trade and other receivables increased by £2.1 million during the
year to £7.5 million (including retentions), largely due to the higher
revenues recognised during the year
· R&D tax credit of £0.6 million for FY22 at a similar level to
FY21
During the year an advance against the R&D tax credit was received. This
will be repaid out of the R&D tax credit funds when received from HMRC. In
addition, the loan from two directors remained in place at yearend, and
letters of credit, invoice discounting and advance payments have been
negotiated on recently won contracts to help with working capital
requirements. The loan from Peter Tyler for £0.1 million was repaid in April
2022.
Key Performance Indicators (KPIs)
The financial key performance indicators for the Group are as set out in the
key financial results table above. FY2022 revenues were 49% up on the previous
year FY21 comparatives as a result of major contracts in India which started
rolling out during the year. Operating costs for the year increased by 4%
compared to FY21, EBITDA (loss) decreased from £2.1 million in FY21 to £0.4
million in FY22 and adjusted EBITDA (loss) decreased from £1.9 million in
FY21 to less than £0.1 million in FY22. The Group's average headcount
increased by 12. Non-financial KPIs included the number of modules shipped
which increased from 481,000 in FY21 to 612,000 in FY22. The Group will be
agreeing additional non-financial KPIs to be monitored during FY23.
The Group's long-term strategy is to deliver shareholder returns by generating
revenue and moving into profitability. It seeks to do this by focusing its
resources on emerging but fast-growing markets where it believes it can reach
a market leading position with its technology. Management uses KPIs to track
business performance, to understand general trends and to consider whether the
Group is meeting its strategic objectives. As it grows, and as highlighted in
the previous paragraph, it intends to review these KPIs and adapt them as
appropriate, in response to how the business and strategy evolves.
The Group's key focus for the financial year ending March 2022 was to
streamline its processes from order to delivery and working to close further
orders. A further focus was ensuring collection of cash from customers as
Group revenues continued to grow. Avenues continue to be pursued to secure
working capital facilities to help ease cash flows and mitigate against any
unforeseen delays in deliveries or customer payments.
Going concern
To assess the ability of CyanConnode Holdings plc ("Group") to continue as a
going concern, the directors have prepared a business plan and cash flow
forecast for the period to 31 March 2024 which, together, represent the
directors' best estimate of the future development of the Group. The forecast
contains certain assumptions, the most significant of which are the level and
timing of sales and the timing of customer payments. The detailed cashflow
scenarios include Letters of Credit which have been secured from customers
against contracts recently won.
At 31 March 2022 the Group had cash reserves of £2.4 million (FY21: £1.5m)
and based on detailed cash flows provided to the Board within the FY23/24
budget, there is sufficient cash to see the Group through to profitability
based on its standard operating model. If a more pessimistic scenario were
taken and an assumption were taken that no cash is received within the next
twelve months from any new orders not currently contracted, and that there
were significant delays to receipts from customers, there is a material
uncertainty relating to the Group's ability to continue as a going concern.
Should the Group experience such downside sensitivities the directors would
first continue to look at measures such as cost reduction and working capital
facilities as ways to conserve cash within the business. The Company has
offers for convertible and secured loans which it could accept should such a
requirement arise.
To assist with working capital, two directors extended short-term loans of
£400,000 in November 2020. These were still in place at the end of March
2022. £100,000 was repaid to Peter Tyler in April 2022. The Company received
an advance of £500,000 secured against its R&D tax credit in December
2021 and an invoice discounting facility secured against Letters of Credit for
deliveries of Omnimesh modules in India. The advance against the R&D tax
credit will be repaid out of the HMRC receipt which is expected to be received
by October 2022.
Notwithstanding the material uncertainties described above which may cast
significant doubt on the ability of the Group to continue as a going concern,
on the basis of sensitivities applied to the cash flow forecast, the directors
have a reasonable expectation that the company can continue to meet its
liabilities as they fall due, for a period of at least 12 months from the date
of approval of this report.
Dividends
The directors do not recommend the payment of a dividend (2021: £nil). The
Group has no plans to adopt a dividend policy in the immediate future and all
funds generated by the Group will be invested in the further development of
the business, as is normal for its industry sector and stage of its
development.
Heather Peacock
Chief Financial Officer
CyanConnode Holdings plc
Consolidated income statement
For the year ended 31 March 2022
Note Year Year
31 March 2022 31 March
£000 2021
£000
Continuing operations
Revenue 9,562 6,437
Cost of sales (4,554) (3,334)
Gross profit 5,008 3,103
Other operating costs (6,025) (5,788)
Underlying operating loss (38) (1,978)
Amortisation and depreciation (616) (627)
Share-based payments (363) (80)
Operating loss (1,017) (2,685)
Finance income 3 13
Finance expense (164) (62)
Loss before tax (1,178) (2,734)
Tax credit 307 677
Loss for the year (871) (2,057)
Loss per share (pence)
Basic 2 (0.42) (1.18)
Diluted 2 (0.42) (1.18)
Consolidated statement of comprehensive income
Derived from continuing operations and attributable to the equity owners of
the Company.
For the year ended 31 March 2022 Year Year
31 March 31 March
2022 2021
£000 £000
Loss for the year (871) (2,057)
Exchange differences on translation of foreign operations 76 (25)
Total comprehensive income for the period (795) (2,082)
CyanConnode Holdings plc
Consolidated statement of financial position
As at 31 March 2022
31 March 31 March
Note 2022 2021
£000 £000
Non-current assets
Intangible assets 4,093 4,266
Goodwill 1,930 1,930
Other financial assets 58 44
Property, plant and equipment 31 36
Right of use asset 153 98
Trade receivables 458 -
Total non-current assets 6,723 6,374
Current assets
Inventories 159 211
Trade and other receivables 6,993 5,355
R&D tax credit receivables 562 577
Cash and cash equivalents 2,355 1,489
Total current assets 10,069 7,632
Total assets 16,792 14,006
Current liabilities
Trade and other (2,364) (3,969)
payables
Short-term borrowings (1,867) (2,118)
Corporation tax liabilities (193) -
Lease liabilities (28) (98)
Total current liabilities (4,452) (6,185)
Net current assets 5,617 1,447
Non-current liabilities
Lease liabilities (125) -
Deferred tax liability (746) (812)
Other payables (38) -
Total non-current liabilities (909) (812)
Total liabilities (5,361) (6,997)
Net assets 11,431 7,009
Equity
Share capital 3 4,726 3,735
Share premium account 73,883 69,662
Own shares held (3,611) (3,253)
Share option reserve 1,068 925
Translation reserve 31 (45)
Retained losses (64,666) (64,015)
Total equity being equity attributable to owners of the Company 11,431 7,009
CyanConnode Holdings plc
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Share Share Own Share Translation Retained Total
Capital Premium Shares Option Reserve Losses Equity
£000 Account Held Reserve £000 £000 £000
£000 £000 £000
Balance at 31 March 2020 3,656 69,547 (3,253) 2,028 (20) (63,141) 8,817
Loss for the year - - - - - (2,057) (2,057)
Other comprehensive income for the year - - - - (25) - (25)
Total comprehensive income for the year - - - - (25) (2,057) (2,082)
Issue of share capital 79 115 - - - - 194
Credit to equity for share options - - - 80 - - 80
Transfer - - - (1,183) - 1,183 -
Total transactions with owners 79 115 - (1,103) - 1,183 274
Balance at 31 March 2021 3,735 69,662 (3,253) 925 (45) (64,015) 7,009
Loss for the year - - - - - (871) (871)
Other comprehensive income for the year - - - - 76 - 76
Total comprehensive income for the year - - - - 76 (871) (795)
Issue of share capital 991 4,221 (358) - - - 4,854
Credit to equity for share options - - - 363 - - 363
Transfer - - - (220) - 220 -
Total transactions with owners 991 4,221 (358) 143 - 220 5,217
Balance at 31 March 2022 4,726 73,883 (3,611) 1,068 31 (64,666) 11,431
CyanConnode Holdings plc
Consolidated cash flow statement
For the year ended 31 March 2022
Year Year
Note 31 March 2022 31 March
£000 2021
£000
Net cash outflow from operating activities 4 (3,134) (977)
Investing activities
Interest received 3 13
Purchases of property, plant and equipment (26) (23)
Purchases of intangible assets (259) (129)
(Purchase) / disposal of other financial assets (14) 49
Net cash outflow from investing activities (296) (90)
Financing activities
Interest paid on borrowings (157) (51)
Cash inflow from borrowings 500 385
Cash net (outflow) / inflow from debt factoring (366) 1,333
Cash inflow from Directors' loan - 400
Loan repayment (385) (560)
Capital repayments of lease liabilities (153) (176)
Interest paid on lease liabilities (7) (11)
Proceeds on issue of shares 5,177 75
Share issue costs (327) -
Net cash inflow from financing activities 4,282 1,395
Net increase in cash and cash equivalents 852 328
Effects of exchange rate changes on cash and cash equivalents 14 (11)
Cash and cash equivalents at beginning of the year 1,489 1,172
Cash and cash equivalents at end of the year 2,355 1,489
Analysis of changes in net cash / (debt)
Other non-cash movements £000 Net foreign
At 1 April 2021 exchange difference At 31 March 2022
£000 Cash flow £000 £000 £000
For the year ended 31 March 2022
Cash and cash equivalents 1,489 852 - 14 2,355
Short-term borrowings (2,118) 251 - - (1,867)
Lease liabilities (98) 160 (215) - (153)
(2,216) 411 (215) - (2,020)
Net cash / (debt) at end of year (727) 1,263 (215) 14 335
Other non-cash movements £000 Net foreign
At 1 April 2020 exchange difference At 31 March 2021
£000 Cash flow £000 £000 £000
For the year ended 31 March 2021
Cash and cash equivalents 1,172 328 - (11) 1,489
Short-term borrowings (560) (1,558) - - (2,118)
Lease liabilities (274) 187 (11) - (98)
(834) (1,371) (11) - (2,216)
Net cash / (debt) at end of year 338 (1,043) (11) (11) (727)
Other non-cash movements include interest on lease liabilities and new
leases taken out in the year.
Notes to the Financial Information
For the year ended 31 March 2022
1. General information
CyanConnode Holdings plc, (Company Registered No. 04554942), is a company
limited by shares, incorporated in the United Kingdom under the Companies Act
2006. The address of the registered office is Merlin Place, Milton Road,
Cambridge CB4 0DP.
The final results announcement is based on the financial statements which have
been prepared in accordance with UK adopted International Accounting
Standards. The financial information has been prepared in accordance with the
accounting policies used in the statutory financial statements for the year
ended 31 March 2021.
The financial information set out in the announcement does not constitute the
company's statutory accounts for the years ended 31 March 2021 or 31 March
2022 within the meaning of section 434 of the Companies Act 2006 but is
derived from those audited financial statements. The auditor's report on the
consolidated financial statements for the years ended 31 March 2021 and the
year ended 31 March 2022 is unqualified, does not contain statements under
s498(2) or (3) of the Companies Act 2006 but referred to a material
uncertainty regarding the Group's ability to continue as a going concern.
Going concern
To assess the ability of CyanConnode Holdings plc ("Group") to continue as a
going concern, the directors have prepared a business plan and cash flow
forecast for the period to 31 March 2024 which, together, represent the
directors' best estimate of the future development of the Group. The forecast
contains certain assumptions, the most significant of which are the level and
timing of sales and the timing of customer payments. These detailed cashflow
scenarios include Letters of Credit which have been secured from customers
against contracts recently won.
At 31 March 2022 the Group had cash reserves of £2.4 million (2021: £1.5
million) and based on detailed cash flows provided to the Board within the
FY2023/24 budget, there is sufficient cash to see the Group through to
profitability based on its standard operating model. If a more pessimistic
scenario were taken and an assumption were taken that no cash is received
within the next twelve months from any new orders not currently contracted,
and that there were significant delays to receipts from customers, there is a
material uncertainty relating to the Group's ability to continue as a going
concern. Should the Group experience such downside sensitivities the directors
would first continue to look at measures such as cost reduction and working
capital facilities as ways to conserve cash within the business. The Company
has offers of convertible and secured loans which it could accept should such
a requirement arise.
To assist with working capital, two directors extended short-term loans of
£400,000 in November 2020. These were still in place at the end of March
2022. £100,000 was repaid to Peter Tyler in April 2022. The Company received
an advance of £500,000 secured against its R&D tax credit in December
2021 and an invoice discounting facility secured against Letters of Credit for
deliveries of Omnimesh modules in India. The advance against the R&D tax
credit will be repaid out of the HMRC receipt which is expected to be received
by October 2022.
Notwithstanding the material uncertainties described above, which may cast
significant doubt on the ability of the Group to continue as a going concern,
on the basis of sensitivities applied to the cash flow forecast, the directors
have a reasonable expectation that the company can continue to meet its
liabilities as they fall due, for a period of at least 12 months from the date
of approval of this report.
2. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data:
2022 2021
Loss for the purposes of basic loss per share being net loss attributable to (871) (2,057)
equity holders of the parent (£000)
Weighted average number of ordinary shares for the purposes of basic and 205,173,434 174,755,445
diluted loss per share (excluding own shares held)
Loss per share (pence) (0.42) (1.18)
The weighted average number of shares and the loss for the year for the
purposes of calculating diluted loss per share are the same as for the basic
loss per share calculation. This is because the outstanding share options
would have the effect of reducing the loss per share and would not, therefore,
be dilutive under the terms of IAS 33.
3. Share capital
Issued and fully paid, ordinary shares of 2.0 pence each No £000
As at 31 March 2020 182,798,523 3,648
Issue of new shares 3,944,375 79
As at 31 March 2021 186,742,898 3,735
Issue of new shares 49,566,137 991
As at 31 March 2022 236,309,035 4,726
In the year, shares were issued at prevailing market prices as settlement for
professional services provided. £4,710 was raised this way during the year
(2021: £118,700).
In June 2021 the Company successfully raised funding of £3.15m before
expenses through a placing of 33,170,076 ordinary shares. In March 2022 the
Company successfully raised further funding of £2m before expenses through a
placing of 14,285,718 ordinary shares.
During the year 201,250 shares were issued as a result of the exercise of
share options (2021: none). The Company has one class of ordinary share which
carries no right to fixed income.
4. Reconciliation of operating loss to net cash outflow from operating activities
Group 2022 2021
£000 £000
Operating loss for the year: (1,017) (2,685)
Adjustments for:
Depreciation of property, plant and equipment 31 30
Amortisation of Intangible assets 432 421
Depreciation on right of use assets 153 176
Foreign exchange 20 (15)
Shares issued in lieu of bonus 5 119
Share-option payment expense 363 80
Operating cash flows before movements in working capital (13) (1,874)
Decrease in inventories 52 97
Increase in receivables (2,054) (2,463)
(Decrease)/increase in payables (1,568) 2,468
Cash reduction from operating activities (3,583) (1,772)
Income taxes received 449 795
Net cash outflow from operating activities (3,134) (977)
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank and other short-term
highly liquid investments with maturity of three months or less.
5. Annual Report and Accounts and Notice of Annual General Meeting
The Notice of AGM and Proxy Form and full colour Annual Report and Accounts
will be sent to shareholders by 27 August 2022 and made available on the
Company's website shortly thereafter. The AGM will be held on 21 September
2022 at 11.00 a.m. at the office of Cenkos Securities plc, 6-8 Tokenhouse
Yard, London EC2R 7AS. Further information regarding the AGM will be included
in the Notice of the AGM.
1 (#_ftnref1) Where Adjusted EBITDA is EBITDA after stock impairment,
share-based compensation and foreign exchange losses have been added back
2 (#_ftnref2) Where FTE is the equivalent number of full-time equivalents
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