REG - Deepverge PLC - Interim Results
22/09/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220922:nRSV2189Aa&default-theme=true
RNS Number : 2189A Deepverge PLC 22 September 2022
22(nd) September
2022
DeepVerge plc
("DeepVerge", the "Group" or "Company")
INTERIM RESULTS
H1 revenues grew by 94% to £6.44m (2021 H1: £3.32m) with expected full year
revenues weighted to H2
DeepVerge (AIM: DVRG), the environmental and life science group of companies
that develops and applies AI and IoT technology to analytical instruments for
the analysis and identification of bacteria, virus and toxins, today announces
its unaudited interim results for the six months ended 30 June 2022.
The Company grew H1 2022 revenues by 94% to £6.436m (H1 2021: £3.319m).
Production orders of £5m for Modern Water equipment, announced on 11 March
2022, contributed to an increase in inventories at the end of H1, ready to be
shipped and recognised in H2 2022.
The rapid expansion across the Group in demand for products and services
coupled with additional staff members, meant administration costs increased,
but operational losses fell to £2.139m (H1 2021: £2.311m). The reduction
was due to an increase in gross profit of 4% (H1 2022 : 56.4%; H1 2021 52.4%)
on higher revenues, delivering a significant decrease in adjusted EBITDA loss
over the same period of 46.6% amounting to £0.372m (H1 2021: £0.697m).
Gerry Brandon, CEO of DeepVerge plc, commented:
"The Company continues to expand across all divisions with record H1 half-year
sales and expectations of £18m for the full year. Demand for Modern Water
monitoring and membrane solutions grew, not least because of the impact of
climate change and a severe global drought. Order values have moved from £50k
to £100k equipment sales in 2020 to now include multiple £1m+ solutions in
Middle East, North Africa, China and South Asia and the recent £2.4m project
on the Savannah River in Georgia, USA. The Company has a substantial order
book of £8.87m for H2 supply and expects to continue its year-on-year history
of revenues weighted in H2 over H1 since 2018".
Highlights:
· H1 2022 revenue of £6.436m is an increase of 94% from H1 2021
(£3.319m);
· Adjusted EBITDA loss reduced by 46.6% to £0.372m (H1 2021: £0.697m
loss);
· Administration costs increased to £5.767m (2021: £4.211m) with
increase in staff across all divisions;
· Operating loss was lower by 7.4% to £2.139m (H1 2021: £2.311m loss)
after providing for:
o Depreciation of £0.313m (H1 2021: £0.193m);
o Amortisation of £1.442m (H1 2021: £1.360m);
o Exceptional costs of £0.012m (H1 2021: £0.061);
· Total Comprehensive Loss reduced by 26% to £1.975m (H1 2021:
£2.669m loss);
· Net Assets at 30 June 2022 £22.6m (H1 2021: £25.3m);
· Finance available to the Group at period end:
o Cash and cash equivalents of £1.18m;
o £4m debt of a £25m facility drawn;
· Glanaco acquisition for £1.068m.
The Company's Interim Report is included at the end of this announcement and
is available on the Company's website at www.deepverge.com.
DeepVerge plc Gerry Brandon, CEO +44 (0) 7340 055 648
SPARK Advisory Partners Limited Neil Baldwin/Andrew Emmott +44 (0) 113 370 8974
(Nominated Adviser)
Turner Pope Investments (TPI) Limited (Broker) Andy Thacker/James Pope +44 (0) 20 3657 0050
This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation no 596/2014 which is part of English
law by virtue of the European (withdrawal) Act 2018, as amended. On
publication of this announcement via a regulatory information service, this
information is considered to be in the public domain.
CHAIRMAN'S STATEMENT
Introduction
The DeepVerge environmental division is well positioned to address the
challenges in water stressed areas on all continents in a drought that has
been referred to as the worst in 500 years. Lower volumes of water in rivers,
lakes and reservoirs lead to a higher concentration of water borne
contaminants that require greater surveillance to ensure the health and safety
of water consumers. The life science division has created many, what the
Directors believe to be, "world first" developments that has added valuable
contributions to skincare clients and opened doors to drug-store sales
channels for personalised skincare testing.
Modern Water
The modernising and automation of water monitoring has led to increased demand
for larger £1m+ size solution based installations, evident by the recent
highlight of a network solution across Qatar ahead of the 2022 World Cup. The
Company has expanded and recruited on three continents.
Award winning Modern Water equipment from Microtox LX (Laboratory) FX (Field)
CTM (Continuous toxicity) and PD/BT (Pathogen/Breath Test) Microtrace heavy
metal detection units are being upgraded with software and data analysis
capability. Modern Water solutions are becoming the last mile test platform,
integrating into existing industrial SCADA systems that monitor drinking and
wastewater for contaminants. After the pandemic there is a need by governments
and health authorities around the world to move from manual testing to
automation and existing Modern Water clients, that include government and Tier
1 clients and we expect demand to continue to grow for large solution projects
going forward.
Increased demand for wastewater contamination detection equipment with Modern
Water Monitoring, All Membrane Brine Concentration (AMBC) units to recycle
water and desalination membrane technology to recover water from the massive
growth in construction of data centres has resulted in the recent upgrading
carried out at our Delaware, US laboratories, York, UK laboratories and Cork
production facility at Glanaco acquired earlier this year.
Labskin (Innovenn UK Limited)
The Labskin business unit has seen a fundamental change from its origin of a
laboratory grown skin for research purposes to a gene-sequencing and data
analysis service supporting marketing claims of some of the top skincare
corporations around the world. As the pandemic ended, the Company was able to
get back to physically attending conferences and its scientists are high
profile guest speakers at events and conferences to build on this valuable
service. More framework agreements have been signed and are contributing to
increased sales.
Skin Trust Club
The launch of Skin Trust Club has created a platform that democratises
consumer skincare home-testing. Since October 2021, sales of this home test
and software service have gone from zero to more than £1m. For any start-up
business, that is a phenomenal achievement and one that is expected to
continue as the US market comes online.
Outlook
The Board recently announced the separation of the two business units in
environmental health and life science and is exploring options on how to
achieve the best return of value to shareholders. As previously notified, with
£18 million in sales expected for the full financial year, the Board
anticipates demand for products and services across the Group to continue well
into 2023.
Ross Andrews
Chairman
22(nd) September 2022
Consolidated Statement of Comprehensive Income
For the 6 months ended 30 June 2022
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
Notes £'000 £'000 £'000
Revenue 6,436 3,319 9,297
Costs of sales (2,808) (1,581) (3,987)
Gross profit 3,628 1,738 5,310
Administrative Costs (5,767) (4,211) (8,732)
Other Operating Gain 3 - 162 162
Operating loss (2,139) (2,311) (3,260)
Depreciation 313 193 272
Amortisation 1,442 1,360 2,944
Impairment of Investment - - -
Exceptional Items 3 12 61 27
EBITDA before exceptional items (372) (697) (17)
Finance costs (245) (307) (420)
(Loss) before income tax (2,384) (2,618) (3,680)
Taxation 4 164 178 1,001
(Loss) for the period (2,220) (2,440) (2,679)
Other comprehensive income
Currency translation differences 245 (229) (218)
Total comprehensive loss for the period (1,975) (2,669) (2,897)
Loss per share attributable to the equity holders of the Company during the Pence Pence Pence
period
Notes
Basic and diluted loss per ordinary share 5 1.0p 1.4p 1.3p
Consolidated Statement of Financial Position
As at 30 June 2022
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2022 2021 2021
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 19,335 18,959 18,130
Property, plant and equipment 1,554 988 905
Leased assets 149 - -
Right of use assets 1,944 1,705 1,569
Other Investments 354 354 354
Total non-current assets 23,336 22,006 20,958
Current assets
Inventories 3,193 1,953 1,712
Trade and other receivables 7,035 2,219 6,786
Cash and cash equivalents 1,184 7,589 1,847
Total current assets 11,412 11,761 10,345
Total assets 34,748 33,767 31,303
Equity attributable to owners
Share capital 7 2,434 2,429 2,429
Share premium account 37,530 36,982 36,886
Retained loss (22,956) (20,609) (20,736)
Foreign currency reserve (199) (455) (444)
Reverse acquisition reserve (4,043) (2,843) (4,043)
Capital redemption reserve 9,519 9,519 9,519
Share based equity reserve 312 277 151
Total equity 22,597 25,300 23,762
Liabilities
Non-current liabilities
Deferred tax liabilities 2,424 2,870 2,434
Deferred revenue/government grants 18 21 19
Lease Liabilities 1,469 1,334 1,174
Borrowings - 83 -
Total non-current liabilities 3,911 4,308 3,627
Current liabilities
Trade and other payables 3,061 2,232 2,451
Deferred tax liabilities 374 356 356
Lease liabilities 562 446 409
Borrowings 4,243 1,125 698
Total current liabilities 8,240 4,159 3,914
Total liabilities 12,151 8,467 7,541
Total equity and liabilities 34,748 33,767 31,303
Consolidated Statement of Cash Flows
For the 6 months ended 30 June 2022
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
Notes £'000 £'000 £'000
Cash Flow from operating activities
Cash used in operations 8 (1,346) (2,829) (4,642)
Taxation (8) - (35)
Interest paid (245) (307) (420)
Net cash (used in) operating activities (1,599) (3,136) (5,097)
Cash flow from investing activities
Acquisition of subsidiary net of cash balance (173) - -
Payments to acquire intangibles (1,439) (372) (2,431)
Purchase of property, plant and equipment (688) (460) (492)
Net cash (used in) investing activities (2,300) (832) (2,923)
Cash flow from financing activities
Proceeds from issuance of ordinary shares 7 - 11,315 11,315
Proceeds from new loans 4,000 - -
Capital element of finance lease (236) (168) (1,865)
Repayments of borrowings (540) (1,017) (1,234)
Net cash generated by financing activities 3,224 10,130 8,216
Net increase / (decrease) in cash and cash equivalents (675) 6,162 196
Cash and cash equivalents at beginning of period 1,847 1,441 1,441
Effects of exchange rate changes on cash and cash equivalents 12 (14) 210
Cash and cash equivalents at end of period 1,184 7,589 1,847
Consolidated Statement of Changes in Shareholders' Equity
Foreign currency reserve Reverse acquisition reserve Share based equity reserve Non controlling interests
Group Share capital Share Retained Capital redemption reserve
premium earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 2,380 25,069 (18,964) (226) (2,843) 9,519 197 789 15,921
Changes in equity for the 6 months
ended 30 June 2021
Loss for the period - - (2,440) - - - - - (2,440)
Currency translation - - - (229) - - - - (229)
Differences
Total comprehensive loss - - (2,440) (229) - - - - (2,669)
for the period
Transactions with the owners
Shares issued during the period 49 12,480 - - - - - - 12,529
Costs of Share Issue - (567) - - - - - - (567)
Share option-based charge - - - - - - 86 86
Non-controlling interests - - 789 - - - - (789) -
Reserve transfer - - 6 - - - (6) - -
Total contributions by and 49 11,913 795 - - - 80 (789) 12,048
distributions to owners
At 30 June 2021 2,429 36,982 (20,609) (455) (2,843) 9,519 277 - 25,300
Changes in equity for the 6 months
ended 31 December 2021
Loss for the period - - (181) - - - - - (181)
Non-controlling interests - - - - - - - - -
Currency translation - - - 11 - - - - 11
Differences
Total comprehensive loss - - (181) 11 - - - - (170)
for the period
Transactions with the owners
Shares issued during the period - 751 - - - - - - 751
Costs of Share Issue - (847) - - - - - - (847)
Share option-based charge - - - - - - (72) - (72)
Investment in subsidiary (1,200) (1,200)
Reserve transfer - - 54 - - - (54) - -
Total contributions by and - (96) 54 - (1,200) - (126) - (1,368)
distributions to owners
At 31 December 2021 2,429 36,886 (20,736) (444) (4,043) 9,519 151 - 23,762
Changes in equity for the 6 months
ended 30 June 2022
Loss for the period - - (2,220) - - - - - (2,220)
Currency translation - - - 245 - - - - 245
Differences
Total comprehensive loss - - (2,220) 245 - - - - (1,975)
for the period
Transactions with the owners
Shares issued during the period 5 644 - - - - - - 649
Costs of Share Issue - - - - - - - - -
Share option-based charge - - - - - - 161 161
Non-controlling interests - - - - - - - - -
Share based reserve transfer - - - - - - - -
Total contributions by and 5 644 - - - - 161 - 810
distributions to owners
At 30 June 2022 2,434 37,530 (22,956) (199) (4,043) 9,519 312 - 22,597
Notes to the Financial Statements
For the 6 months ended 30 June 2022
1. General information
DeepVerge plc is a company incorporated in England and Wales. The Company is a
public limited company admitted to trading on the AIM market of the London
Stock Exchange on 5 April 2017. The address of the registered office is York
Biotech Campus, Sand Hutton, York, North Yorkshire, YO41 1LZ.
The Company is an environmental and life science group whose principal
activities is the development and application of AI and IoT technology to
analytical instruments for the analysis and identification of bacteria, virus
and toxins. Utilising artificial intelligent data analytics to scientifically
prove the impact of skincare product claims on skin microbiome and the remote
detection and identification in real-time, dangerous pathogens, such as
SARS-CoV-2 in wastewater treatment plants, drinking water, rivers, lakes and
reservoirs.
Skin Trust Club is a direct-to-consumer home test kit business from Labskin
which has become core to the growth of the Labskin Division. The Skin Trust
Club gives every skin care product consumer the opportunity to understand
their unique skin microbiome, track their skin health, follow personalised
skincare routines, and to make informed decisions about skincare and cosmetic
products. The platform has evolved from 15 years of R&D of laboratory
growing skin testing, helping people find skincare routines that fit their
lifestyles, focusing on driving innovation and empowering people with the
knowledge to know their skin.
The financial statements are presented in pounds sterling, the currency of the
primary economic environment in which the Company's trading companies operate.
The registered number of the Company is 10205396.
2. Basis of preparation
The financial information in these interim results is that of the holding
company and all of its subsidiaries (the Group). It has been prepared in
accordance with the recognition and measurement requirements of UK adopted
International Financial Reporting Standards (IFRSs), IFRS Interpretations
Committee (IFRIC) and the Companies Act 2006 applicable to companies reporting
under IFRS. The consolidated interim financial statements have been prepared
under the historical cost convention.
The accounting policies applied by the Group in this financial information are
the same as those applied by the Group in its financial statements for the
year ended 31 December 2021, as amended by the UK adopted IFRSs, and which
will form the basis of the 2022 financial statements except for a number of
new and amended standards which have become effective since the beginning of
the previous financial year. These new and amended standards are not expected
to materially affect the Group.
The financial information presented herein does not constitute full statutory
accounts under Section 434 of the Companies Act 2006 and was not subject to a
formal review by the Group's Independent Auditors. The financial information
in respect of the year ended 31 December 2021 has been extracted from the
statutory accounts which have been delivered to the Registrar of Companies.
The Group's Independent Auditor's report on those accounts was unqualified,
did not include references to any matters to which the Auditor drew attention
by way of emphasis without qualifying their report and did not contain a
statement under section 498(2) or 498(3) of the Companies Act 2006. The
financial information for the half years ended 30 June 2022 and 30 June 2021
is unaudited and the twelve months to 31 December 2021 is audited.
3. Exceptional items and other operating gain
Exceptional Items
Included within administrative expenses are exceptional items as shown below:
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
Exceptional items include:
Transaction costs relating to raising funds and business acquisitions and
disposals
12 61 27
Total exceptional items 12 61 27
Other Operating Gain
Loan forgiveness of 2020 Payment Protection Loan (Covid) for US subsidiary -
company Modern Water Inc.
162 -
Other Operating Gain - 162 -
4. Taxation
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Research and development tax credit - - 669
Deferred tax credit 164 178 332
164 178 1,001
5. Loss per share
(a)
Basic
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the period.
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
Loss attributable to equity shareholders £2,220,000 £2,440,000 £2,679,000
Weighted average number of 0.1p Ordinary Shares in issue 217,810,545 178,305,066 196,932,854
Basic loss per ordinary share 1.0p 1.4p 1.3p
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The options and warrants are anti-dilutive in view
of the losses in the year. .
6. Dividends
There were no dividends paid or proposed by the Company.
7. Share capital
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Ordinary shares of 0.1p each 220 215 215
Deferred shares of 0.99p each 2,214 2,214 2,214
Total 2,434 2,429 2,429
As of 30 June 2022, the Company had an issued share capital of 219,706,378
ordinary shares of 0.1p each and 223,685,232 deferred shares of 0.99p each.
Ordinary shares issued during the period
Acquisition of Glanaco Limited
On 16 March 2022 Rinocloud Limited acquired 100% of the shareholding of the
Irish registered engineering company Glanaco Limited for a total consideration
of £1.068m comprising £0.420m in cash and £0.648m in shares. A total of
4,550,000 of DeepVerge plc 0.1p ordinary shares were issued with the share
value attributable to the mid-market price on 14 March 2022.
Date of Issue Shares No of shares Transaction Share Price Consideration
16 March 2022 0.1p ordinary shares 4,550,000 14.25p £648,375
8. Cash used in operations
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Loss for the year from continuing activities (2,220) (2,440) (2,679)
Continuing operations
Adjustments for:
- Depreciation & Amortisation 1,755 1,553 3,216
- Net finance costs 245 307 420
- Taxation (172) (178) (1,001)
- Foreign currency 29 (229) 95
- Share option-based charge 161 86 -
Changes in working capital
- Inventories (1,513) (652) (363)
- Trade and other receivables (547) (803) (5,070)
- Trade and other payables 916 (473) 740
Net cash used in operations (1,346) (2,829) (4,642)
9. Post balance sheet events
No significant events have occurred since the period end.
10. Availability of announcement
A copy of this announcement is available from the Company's website, being
www.deepverge.com.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPURPBUPPGMGRecent news on Deepverge
See all newsREG - AIM Deepverge PLC - Cancellation - DEEPVERGE PLC
AnnouncementREG - Deepverge PLC - Update; exclusivity agreement with Microsaic
AnnouncementREG - Deepverge PLC - Update
AnnouncementREG - Deepverge PLC - New Website, Update
AnnouncementREG - Deepverge PLC - Disposal; Update
Announcement