REG - CyanConnode Holdings - Interim Results
08/11/2024 07:00
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RNS Number : 4421L CyanConnode Holdings PLC 08 November 2024
8 November 2024
CyanConnode Holdings plc
("CyanConnode" or the "Company")
Interim results for the six months ended 30 September 2024 (H1 FY 2025)
CyanConnode (AIM: CYAN), a world leader in narrowband radio frequency (RF)
mesh networks, announces its unaudited interim results for the six months
ended 30 September 2024 (H1 FY 2025).
John Cronin, Executive Chairman, commented:
"The Indian smart metering market continues to gain momentum, with sanctioned
tenders exceeding 200 million smart meters. Of this total, contracts for
approximately 132 million smart meters have already been awarded to prime
bidders, underscoring the Government of India's commitment to install 250
million smart prepayment meters under the Revamped Distribution Sector Scheme
(RDSS).
CyanConnode's order book has demonstrated strong growth, more than doubling
during this period from 6.3 million units at the start of the year to 13.1
million units. Our current backlog stands at 9.7 million units yet to be
deployed, having increased substantially from 3.5 million units at the end of
March 2024, with a significant portion of this expected for delivery in the
second half of FY 2025. Historically, our revenue recognition is heavily
weighted toward the final quarter of our financial year, as order completions
and deployments often peak near year-end. We expect this seasonal trend to
continue, with a substantial proportion of this year's revenue materialising
in Q4.
Given this pattern, we remain confident in meeting market expectations for FY
2025.
Our business outside of India is also progressing well. Since the end of
September 2024, we have secured a follow-on order for the Middle East and
North Africa (MENA) region, valued at over $1 million. This order is expected
to be fulfilled within the current financial year, further supporting our
revenue forecasts and expanding our international footprint."
Financial Highlights
Full year revenue expectation unchanged, with the following highlights for H1
FY 2025
· Revenue of £5.6m (H1 FY 2024: £5.8m)
· Increase of 9% in software and services revenue as a percentage
of total revenue from 11% in H1 FY 2024 to 20% in H1 FY2025
· Gross profit of £2.3m (H1 FY 2024: £1.8m), driven by an
improvement in Gross Margin percentage of 10% from 31% in H1 FY 2024 to 41% in
H1 FY 2025. This is partly as a result of a new version of gateway being sold,
which does not use end-of-life components, and partly as a result of the
increased software and services revenue as a proportion of total revenue
· Operating loss of £2.1m (H1 FY 2024 loss: £2.2m)
· Cash received from customers of £7.3m (H1 FY 2024: £7.4m)
· Cash and cash equivalents at end of period £3.7m (FY 2024:
£0.9m)
· Completion of oversubscribed placing and subscription to raise
£5.4 million (before expenses) at a premium to prevailing share price
Operational Highlights
· Major new contract won in India for 6.5 million Omnimesh RF
Modules and associated products, doubling order book to 13.1 million units
· 265,000 Omnimesh RF Modules and associated products ordered from
a subsidiary of IntelliSmart Infrastructure Private Limited
· CyanConnode India's subsidiary, DigiSmart Networks Private Ltd
successfully empanelled as an Advanced Metering Infrastructure Service
Provider ("AMISP") for both RF and cellular, making it eligible to bid for
smart metering contracts under the Revamped Distribution Sector Scheme (RDSS)
· Setup of subsidiary in United Arab Emirates to promote business
in the Middle East and North Africa (MENA) region
· Changes to the organisation to strengthen leadership in India and
streamline global operations by having all engineering and operations
reporting into the MD CEO of India
· Key milestones such as Site Acceptance Tests (SATs) and project
go-lives achieved across several key projects
· Successful deployment of over two million nodes, making
CyanConnode the first and only smart metering communications player in India
to reach this milestone
· Prestigious SKOCH Gold Award won by Tamil Nadu Generation and
Distribution Corporation Limited ("Tangedco") for its smart metering project
powered by CyanConnode's communication network
· CyanConnode named a 2024 WIRED Trailblazer
Post-Period Highlights
· Follow-on order with a value in excess of $1 million won, for
cellular gateways in the Middle East and North Africa (MENA) region
· Cash received from customers since the period end of £1.4m
taking cash received for the financial year to date to £8.7m
· Current market share of all installed smart metering base in
India of approximately 14% and 42% of all RF deployments
· Win ratio of 25% in terms of volumes for RDSS tenders in India
· Indian smart metering market continues to gather momentum -
current tenders for more than 220 million Smart Meters have been sanctioned to
the end of October 2024, with 132 million being awarded to prime bidders,
typically Advanced Metering Infrastructure Service Providers (AMISPs)
· Revenue for the financial year ending 31 March 2025 is forecast
to meet market expectations
Enquiries:
CyanConnode Holdings plc Tel: +44 (0) 1223 865 750
John Cronin, Executive Chairman www.cyanconnode.com (http://www.cyanconnode.com)
Strand Hanson Limited (Nominated and Financial Adviser) Tel: +44 (0) 20 7409 3494
James Harris, Richard Johnson, David Asquith
Zeus Capital Limited (Joint Broker) Tel: +44 (0) 20 3829 5000
Simon Johnson, Louisa Waddell
Panmure Liberum (Joint Broker) Tel: +44 (0) 20 7886 2500
Rupert Dearden, James Sinclair-Ford
About CyanConnode
CyanConnode (AIM:CYAN.L) is a world leader in Narrowband Radio Frequency (RF)
Smart Mesh Networks, which are used for machine to machine (M2M)
communication. As well as being self-forming and self-healing, CyanConnode's
RF Smart Mesh Networks are designed for rapid deployment, whilst giving
exceptional performance and competitive total cost of ownership.
In June 2018, CyanConnode launched its award-winning Omnimesh Advanced
Metering Infrastructure (AMI) platform, which has already gained considerable
commercial traction, especially in India which is a key market for the
Company.
Through a Global partner eco-system, which is vendor agnostic, CyanConnode has
several routes to market, therefore it is well positioned to capitalise upon
increasing Global demand for smart metering solutions.
For more information, please visit www.cyanconnode.com
(http://www.cyanconnode.com/) .
Chairman's Statement
Financial review
Key figures
H1 FY 2025 H1 FY 2024
£'000 £'000 % Change
Revenue 5,629 5,775 - 3%
Gross profit 2,336 1,810 + 29%
Operating costs* (4,424) (3,987) + 11%
Operating loss (2,088) (2,177) - 4%
EBITDA (1,901) (2,008) - 5%
Adjusted EBITDA (1,597) (1,916) - 17%
Cash 3,714 945 + 293%
Basic and diluted loss per share 0.70p 0.72p - 3%
* Research and Development (R&D) tax credit of £224k is included in other
operating costs following the latest amendments made to the R&D scheme by
HMRC for accounting periods beginning on or after 1 April 2024, which require
R&D tax credits to be reported within operating costs rather than within
taxation.
Revenue and Operating Costs
Revenue for the first six months of FY 2025 was flat compared to the revenue
for the same period of FY 2024, largely as a result of some slowdown in
deployments during the India elections. The Company, having won its largest
order to date during the period, thereby doubling the order book, expects a
significant increase in revenue during the second half of FY 2025 over the
first half year. Gross margins have improved considerably compared to H1 FY
2024 as H1 FY 2024 included sales of gateways using end of life components
purchased at a significant premium. A new, lower cost, gateway was developed
during FY 2024 and is now being shipped. In addition, the higher margin
software and services proportion of total revenue for the period increased
from 11% to 20% in H1 FY 2025. The increase in operating costs compared to H1
FY 2024 was in line with expectations since the cost base had increased to
support expected growth, with the majority of that increase being in H2 FY
2024.
Cash
During the period cash was utilised to both purchase stocks of components to
support delivery during the remainder of the financial year, (stock of 567,000
MCUs were held at period end to allow H2 FY 2025 deliveries to be met) and
investing in development of new products to enhance the current product suite.
On 10 September 2024 CyanConnode Holdings plc raised £5.4 million (before
expenses) through an oversubscribed placing of 20,204,063 New Ordinary Shares
and a subscription for 39,611,109 New Ordinary Shares at a premium to the
prevailing mid-market share price. The cash is to be used to provide ongoing
working capital for growth, to further strengthen the Company's balance sheet
and to fund the setup of a hardware product design lab in India, which will
enable a ramp up of operations.
Accounts receivable
A total of £7.3m cash was collected from customers during the period
(compared to £7.4m for the same period in FY 2024), and a further £1.4m
since the period end. In the period, our non-current trade receivables such as
contract assets, reported in the non-current assets part of the balance sheet,
increased to £3.3m (FY 2024: £2.4m), where revenue has been recognised in
accordance with IFRS 15, and will be paid for over the period of the contract.
The remainder of trade receivables included in non-current assets related to
accrued income from contracts. Approximately 58% of cash collection during H1
FY 2025 related to trade receivables from FY 2024 and a further 8% of FY 2024
trade receivables has been collected since period end.
Operational Review
India
Market
According to recent research studies, the smart meter market in India is
poised for significant growth over the next decade. In 2023, the market size
then, was estimated at c. $212m by Zion Market Research and $219m by Astute
Analytica. Both studies projected substantial increases by 2032, with Zion
Market Research forecasting a market size of $2.8bn and Astute Analytica
predicting $3. 2bn. This growth should be driven by several key factors,
including government incentives to reduce aggregate technical and commercial
(AT&C) losses and the integration of advanced metering infrastructure
(AMI) with IoT platforms. The Indian government's target of deploying 250
million smart prepaid meters is a significant part of this growth, as these
meters would improve billing efficiency, reduce power theft, and enhance the
overall reliability of the power supply. This initiative is part of a broader
strategy to reform the energy sector and improve efficiency through advanced
technologies.
The Government of India plans to rollout 250 million smart meters through
tenders for large volumes, of which tenders for more than 220 million smart
meters had been sanctioned to the end of October 2024. According to the most
recent statistics reported on the National Smart Grid Mission (NSGM) website,
tenders for 132 million meters had been awarded to the end of October 2024 to
prime bidders. While these contracts have been awarded to prime bidders, who
are typically AMISPs, there can be a delay of a few months between the award
of the contract to the AMISP and the subsequent award to subcontractors such
as CyanConnode.
Orders
In April 2024, the Company received an order for 235,331 Omnimesh RF Modules,
for the Madhyanchal Vidyut Vitaran Nigam Ltd (MVVNL) smart metering project in
Lucknow
In August 2024, a Letter of Award ("LOA") was received for 6.5 million
Omnimesh RF Modules, being the largest contract awarded to the Company to
date. This contract award took the Company's order book for Omnimesh modules
in India from 6.6 million to 13.1 million, solidifying the Company's position
in India. This LOA was received from a global partner and relates to various
smart metering projects in India.
Achievements
During the period, CyanConnode India's subsidiary, DigiSmart Networks Private
Limited ("DigiSmart") qualified and was certified to participate in the
upcoming smart metering tenders as an AMISP for both RF and cellular. As an
AMISP, CyanConnode would be responsible for the end-to-end execution of smart
metering projects, from meter supply to Meter Data Management ("MDM").
Key milestones such as Site Acceptance Tests (SATs) and project go-lives were
achieved across several key projects during the period.
· CyanConnode has passed multiple Site Acceptance Tests (SATs)
across several key projects and has achieved "Go Live" status in one project
· CyanConnode is consistently meeting the desired SLAs as per the
agreements across projects
· This marks a crucial milestone that enables the commencement of
billing for deployed meters
· The "Go Live" milestone is a critical achievement for any
project as it signifies the transition to the billing phase, allowing for
revenue generation
· The SAT qualification process involves rigorous quality and
performance testing of the meters and the communication network, ensuring the
highest standards of operation
· TANGEDCO and TN72 projects have come under FMS in FY 2024
Organisation
In May 2024 a strategic decision was taken to make changes to the organisation
to strengthen leadership in India and streamline global operations by having
all engineering and operations reporting into the MD CEO of India. The key
reasons for this change were
· Strengthened Leadership: The new structure brings together
seasoned leaders with extensive experience in smart metering, IoT solutions,
and technology innovation. This ensures a robust leadership team capable of
driving the company's strategic vision forward.
· Enhanced Operational Efficiency: By reorganising the engineering
and technology teams, CyanConnode aims to streamline processes, improve
execution speed, and enhance troubleshooting capabilities. This will enable
the company to better meet the dynamic demands of customers and the market.
· Focus on Innovation: The restructured teams are focused on
continuous innovation in product development and technology solutions.
· Market Expansion: The reorganisation underscores CyanConnode's
commitment to leveraging the immense potential of the Indian market while
continuing to deliver exceptional service and innovation to global
stakeholders.
· Alignment with Strategic Goals: The new structure aligns with
CyanConnode's strategic goals of maintaining market leadership, expanding
technological capabilities, and driving sustainable growth in the smart
metering sector.
Innovation
During the period significant work has been undertaken on innovation to
further enhance the Company's product suite. The following products have
either been developed or enhanced, in each case to ensure the highest
performing and lowest cost version to maintain the Company's competitive
position in the market, and reputation as a company achieving constantly high
Service Level Agreements ("SLAs").
· In-Meter Gateway
o To compete with cellular
o Be Competitive
o Faster and Ease of Deployment
· Production of Long-Range Radios
· Gateways with 3 Phase Power Supply
o For compliance to local specifications
o Thailand and markets abroad
· Unified Head End System ("uHES")
o A Head End System that will allow both cellular and RF, including that of
third-party providers, to connect
· Low Cost CNIC
o A low cost version of the Company's Cellular Network Interface Card
("CNIC") at a competitive price point to suit the market in India
· Solution on FG28 platform
o Design in of a newer, high performing chip
APAC and Middle East
The smart metering market in the APAC and Middle East continues to mature and
presents a significant opportunity for CyanConnode.
During the period CyanConnode continued to deploy its contracts for the MENA
region and additionally completed incorporation of its subsidiary in Dubai. In
October 2024, the Company was pleased to announce a follow-on order for this
region, and shipments for this order are expected to complete during this
financial year. Further orders for the region are expected to be won in the
near term.
Additionally, the Metropolitan Electricity Authority (MEA) Smart Grid Project,
won in December 2019 continues to roll out in Thailand and reached go-live
during the period.
The Company is currently working on opportunities in Malaysia, Indonesia and
Azerbaijan.
Cash
On 10 September 2024 CyanConnode Holdings plc raised £5.4 million (before
expenses) through an oversubscribed placing of 20,204,063 New Ordinary Shares
and a subscription for 39,611,109 New Ordinary Shares at a premium to the
prevailing mid-market share price. The cash is to be used to provide ongoing
working capital for growth, to further strengthen the Company's balance sheet
and to fund the setup of a hardware product design lab in India, which will
enable a ramp up of operations.
Awards and recognition
In September 2024, CyanConnode was pleased to announce that it has been named
a WIRED Trailblazer 2024. This prestigious recognition, awarded by WIRED
Magazine in partnership with HSBC UK, highlights innovative companies driving
positive economic, social, and environmental change through technology. The
WIRED Trailblazers programme celebrates organisations that are making a
tangible impact on the future of industries by tackling key global challenges
such as sustainability and resource management. CyanConnode's commitment to
innovation, demonstrated through its award-winning RF communication solutions
and large-scale project deployments, positions the Company as a leader in
smart energy transformation.
Also in September 2024, the distribution company, Tangedco, won the
prestigious SKOCH Award for Gold Category in the Power & Energy category.
The award recognises the digital transformation of Tangedco's commercial
operations under the smart metering project powered by CyanConnode's
communication network. The project has delivered exceptional billing and smart
metering communication rates of over 99%, accelerating invoicing, reducing
errors, and enhancing customer satisfaction through timely billing. It has
also optimised operations, reduced carbon emissions, increased revenue, and
optimised manpower, among many other benefits.
Post period end developments and outlook
Orders
In October 2024, CyanConnode announced a follow-on order with a value in
excess of $1 million for cellular gateways in the Middle East and North Africa
(MENA) region. This contract builds upon the initial MENA order for this
project, which was announced by the Company on 4 August 2022. The full order
is scheduled for delivery, with revenue also recognised, within this financial
year, which ends on 31 March 2025.
Consolidated income statement
Note Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2024 2023 2024
£000 £000 £000
Continuing operations
Revenue 5,629 5,775 18,730
Cost of sales (3,293) (3,965) (13,117)
Gross profit 2,336 1,810 5,613
Exceptional item: impairment of intangible assets - - (791)
Other operating costs 1 (4,424) (3,987) (9,026)
Operating loss (2,088) (2,177) (4,204)
Amortisation and depreciation 187 169 398
Share based payments (24) 100 51
Inventory impairment 5 - 20
Impairment of intangible assets - - 791
Foreign exchange losses/(gains) 323 (8) 194
Adjusted EBITDA (1,597) (1,916) (2,750)
Finance income - 8 92
Finance costs (33) (72) (113)
Loss before tax (2,121) (2,241) (4,225)
Tax credit 2 - 367 395
Loss for the period (2,121) (1,874) (3,830)
Loss per share (pence)
Basic 3 (0.71) (0.72) (1.41)
Diluted 3 (0.71) (0.72) (1.41)
Consolidated statement of comprehensive income
Derived from continuing operations and attributable to the equity owners of
the Company
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2024 2023 2024
£000 £000 £000
Loss for the period (2,121) (1,874) (3,830)
Exchange differences on translation of foreign operations (311) 37 (112)
Total comprehensive income for the year (2,432) (1,837) (3,942)
Consolidated statement of financial position
Unaudited Unaudited Audited
As at 30 September 30 September 31 March
2024 2023 2024
£000 £000 £000
Non-current assets
Intangible assets 4,179 3,798 3,759
Goodwill 1,930 1,930 1,930
Property, plant and equipment 182 75 196
Right of use asset 412 108 474
Other financial assets 49 69 51
Trade and other receivables (note 4) 3,326 2,456 3,085
Total non-current assets 10,078 8,436 9,495
Current assets
Inventories 1,652 1,540 1,686
Trade and other receivables (note 4) 8,270 8,513 10,491
R&D tax credit receivables 229 374 665
Cash and cash equivalents 3,714 945 783
Total current assets 13,865 11,372 13,625
Total assets 23,943 19,808 23,120
Current liabilities
Trade and other payables (6,076) (4,734) (8,450)
Short-term borrowing (158) (1,424) -
Corporation tax liabilities (477) - (508)
Lease liabilities (113) (29) (110)
Total current liabilities (6,824) (6,187) (9,068)
Net current assets 7,041 5,185 4,557
Non-current liabilities
Lease liabilities (305) (80) (364)
Deferred tax liability (252) (465) (170)
Other payables (83) (43) (87)
Total non-current liabilities (640) (588) (621)
Total liabilities (7,464) (6,775) (9,689)
Net assets 13,431
16,479 13,033
Equity
Share capital 7,178 5,438 5,982
Share premium account 84,152 78,671 80,196
Own shares held (3,259) (3,611) (3,611)
Share option reserve 1,388 904 1,412
Translation reserve (371) 89 (60)
Accumulated losses (72,609) (68,458) (70,488)
Total equity being equity attributable to 13,431
owners of the Company 16,479 13,033
Consolidated statement of changes in equity
Share Capital £000 Translation Reserve Retained Losses £000 Total Equity £000
Share Own Shares Held Share Option Reserve £000
Premium £000 £000
Account
£000
Balance at 31 March 2023 5,438 78,671 (3,611) 804 52 (66,584) 14,770
Loss for the period - - - - - (1,874) (1,874)
Other comprehensive income for the period - - - - 37 - 37
Total comprehensive income for the period - - - - 37 (1,874) (1,837)
Credit to equity for share options - - - 100 - - 100
Total transactions with owners - - - 100 - - 100
Balance at 30 September 2023 5,438 78,671 (3,611) 904 89 (68,458) 13,033
Loss for the period - - - - - (1,956) (1,956)
Other comprehensive income for the period - - - - (149) - (149)
Total comprehensive income for the period - - - - (149) (1,956) (2,105)
Issue of share capital 544 1,525 - - - - 2,069
Issue of warrants - - - 483 483
Credit to equity for share options - - - (49) - - (49)
Transfer - - - 74 - (74) -
Total transactions with owners 544 1,525 - 508 - (74) 2,503
Balance at 31 March 2024 5,982 80,196 (3,611) 1,412 (60) (70,488) 13,431
Loss for the period - - - - - (2,121) (2,121)
Other comprehensive income for the period - - - - (311) - (311)
Total comprehensive income for the period - - - - (311) (2,121) (2,432)
Issue of share capital 1,196 3,956 352 - - - 5,504
Credit to equity for share options - - - (24) - - (24)
Total transactions with owners 1,196 3,956 352 (24) - - 5,480
Balance at 30 September 2024 7,178 84,152 (3,259) 1,388 (371) (72,609) 16,479
Consolidated cash flow statement
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2024 2023 2024
£000 £000 £000
Net cash outflow from operating activities (Note 5) (1,801) (2,714) (2,860)
Investing activities
Interest received - 8 15
Purchases of property, plant and equipment (69) (23) (224)
Purchases of intangible assets (495) (498) (1,384)
Sale/(purchase) of other financial assets 2 (7) 11
Net cash used in investing activities (562) (520) (1,582)
Financing activities
Interest paid on borrowings - (67) (93)
Cash outflow from directors' loan - - (300)
Cash net inflow/(outflow) from debt factoring 158 698 (426)
Loan repayment - (500) (500)
Capital repayments of lease liabilities (52) (14) (74)
Interest paid on lease liabilities (13) (5) (19)
Proceeds on issue of shares 5,383 - 2,719
Share issue costs (231) - (167)
Net cash from financing activities 5,245 112 1,140
Net increase/(decrease) in cash and cash equivalents 2,882 (3,122) (3,302)
Effects of exchange rate changes on cash and cash equivalents 49 (3) 15
Cash and cash equivalents at beginning of period 783 4,070 4,070
Cash and cash equivalents at end of period 3,714 945 783
Notes to the Accounts
1. Basis of Preparation
The interim financial statements are for the six months ended 30 September
2024. They do not include all the information required for full annual
financial statements and should be read in conjunction with the consolidated
financial statements of the Group for the year ended 31 March 2024, which have
been filed at Companies House. The Group's auditor issued a report on those
financial statements that was unqualified and did not contain a statement
under section 498(2) or section 498(3) of the Companies Act 2006, however, the
auditor's report emphasized the uncertainty around the Group's ability to
continue as a going concern.
These interim financial statements have been prepared in accordance with
accounting policies which are consistent with the measurement requirements of
UK-adopted International Accounting Standards. These financial statements have
been prepared under the historical cost convention.
These interim financial statements have been prepared in accordance with the
accounting policies adopted in the last annual financial statements for the
year to 31 March 2024. The accounting policies have been applied consistently
throughout the group for the purpose of preparation of these interim financial
statements and are expected to be followed throughout the year ending 31 March
2025.
2. Going Concern
To assess the ability of the Group to continue as a going concern, the
Directors have prepared a business plan and cash flow forecast for the period
to 31 March 2026 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 the customers against contracts
recently won.
The Group's business activities, together with the factors likely to affect
its future development, performance and position, have been considered in
depth as part of the Directors' assessment of the Group's ability to continue
as a going concern. The Directors have reviewed detailed trading forecasts for
H2 of FY 2025. An upturn in business activities and revenue is expected during
this period, which will ensure the Group's ability to meet market expectations
for the full financial year. At 30 September 2024 the Group had cash reserves
of £3.7 million (31 March 2024: £0.8 million). Based on detailed cash flow
provided to the Board to cover the period to 31 March 2026, there is
sufficient cash for a period of at least 12 months from the date of approval
of this report, with forecasts prepared in line with its standard operating
model. The Company continues to discuss potential working capital funding
facilities with banks, particularly in India. The Company has been approached
with alternative sources of finance, to support growth, such as secured loans,
which it could accept should such a requirement arise. It also continues to
discuss options of taking equity into its subsidiary in India.
The Company received a R&D tax credit of £664,558 from HMRC in September
2024. An advance loan of £400,000 received in May 2024 was in place against
this R&D tax credit, and was repaid out of the proceeds of the tax credit
received in September 2024. The Company intends to secure an advance against
its R&D tax credit for the current financial year, anticipated to be for a
minimum of £0.5 million, in the coming months.
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.
Notes to the Accounts continued
3. Loss per Share
The calculation of the basic and diluted loss per share is based on the
following data:
Unaudited Unaudited Audited
12 months to
6 months to 6 months to
31 March
30 September 30 September
2024
2024 2023
Loss for the purposes of basic loss per share being net loss attributable to (2,121) (1,874) (3,830)
equity holders of the parent (£000)
Weighted average number of ordinary shares for the purposes of basic and 297,056,605 260,581,840 271,910,382
diluted loss per share
Loss per share (pence) (0.71) (0.72) (1.41)
The denominations used are the same as those detailed above for both basic and
diluted earnings per share from continuing operations. However, in accordance
with IAS 33 "Earnings Per Share", potential ordinary shares are only
considered dilutive when their conversion would decrease the profit per share
or increase the loss per share from continuing operations attributable to the
equity shareholders.
4. Trade and Other Receivables
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March 2024
2024 2023
£000 £000 £000
Non-current
Contract assets 2,812 2,141 2,537
Other non-current assets 514 315 548
Trade and other receivables 3,326 2,456 3,085
Current
Trade receivables: amount receivable for the sale of goods and services 3 6,882 8,056 8,692
Allowance for expected credit losses (127) (275) (175)
6,755 7,781 8,517
Contract assets 854 374 910
Other receivables 603 274 911
Prepayments 58 84 153
Trade and other receivables 8,270 8,513 10,491
Notes to the Accounts continued
5. Reconciliation of Operating Loss to Operating Cash Flows
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 September 30 September 31 March
2024 2023 2024
£000 £000 £000
Operating loss for the period (2,088) (2,177) (4,204)
Adjustments for:
Depreciation of property, plant and equipment 55 22 58
Amortisation of intangible assets 75 133 267
Depreciation on right of use assets 57 14 73
Impairment of intangible assets - - 791
Foreign exchange - (8) -
Share-option payment expense (24) 100 51
R&D tax credit (224) - -
Operating cash flows before movements in working capital (2,149) (1,916) (2,964)
Decrease/(increase) in inventories 34 (747) (913)
Decrease/(increase) in receivables 1,980 (1,711) (4,348)
(Decrease)/increase in payables (2,378) 901 4,662
Cash outflows from operating activities (2,513) (3,473) (3,563)
Income taxes received 712 759 703
Net cash outflow from operating activities (1,801) (2,714) (2,860)
6. Post Balance Sheet Event
The Group has no post-balance sheet events to report.
7. Interim Results
The Group's Interim Results report will be available for download on the
Group's website, www.cyanconnode.com. The report will not be posted to
shareholders.
1 Research and Development (R&D) tax credit of £224k included in other
operating costs following the latest amendments made to the R&D scheme by
HMRC for accounting periods beginning on or after 1 April 2024, which require
R&D tax credits to be reported within operating costs rather than within
taxation.
2 Research and Development (R&D) tax credit of £224k included in other
operating costs following the latest amendments made to the R&D scheme by
HMRC for accounting periods beginning on or after 1 April 2024, which require
R&D tax credits to be reported within operating costs rather than within
taxation.
3 £158k of trade receivables has been collected via invoice discounting and
reflected as short-term borrowings in the balance sheet as required by IFRS.
The net value of trade receivables in the current section of the balance sheet
after taking this into account is therefore £6,882k less £158k = £6,724k
(FY 2024 £8,692k less £Nil = £8,692k)
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