REG - Directa Plus PLC - Half-year Report
29/09/2022 07:01
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RNS Number : 0614B Directa Plus PLC 29 September 2022
29 September 2022
Directa Plus plc
("Directa Plus" or the "Company" or, together with its subsidiaries, the
"Group")
Half Year Report for the Period Ended 30 June 2022
Strong Top Line Growth, Progress in All Key Vertical Markets
Directa Plus (AIM: DCTA), a leading producer and supplier of graphene-based
products for use in consumer and industrial markets, is pleased to announce
its half year results for the six months ended 30 June 2022.
As previously announced in our recent pre-close trading update, during the
period the Group delivered strong top line growth and maintained its focus on
developing and delivering market leading products and services in its two core
business verticals - Environmental Remediation and Textiles. The Company
continued to deliver enhancements, based on its patented technology, to
products in other areas where Directa Plus has identified significant
potential commercial opportunities, including paints, filtration,
Lithium-Sulphur batteries and composites.
Highlights
Financial & Operational
· Revenue increased by +39% to €5.51m (1H2021: €3.95m)
· Total income increased by +23% to €5.61m (1H2021: €4.56m)
· Adjusted EBITDA loss* increased by 37% to €1.29m (1H2021: €0.94m),
impacted by cost inflation as previously announced but with gross margin
recovery expected by the end of H2
· Adjusted loss before tax** increased by 14% to €1.99m (1H2021: €1.75m)
· Cash at period end €7.78m (FY2021: €11.13m), in-line with management
expectations
· Approximately 10.4k cubic meters of sludge treated and 2.7k metric tonnes of
hydrocarbons recovered
· 45k metres of textile printed, dyed and laminated in H1 2022
* Adjusted EBITDA loss represents results from operating activities before
tax, interest, depreciation and amortisation, adjusted by one-off income,
non-recurring legal expenses and non-recurring layoffs.
** Adjusted loss before tax represents Loss before tax adjusted by one-off
income, non-recurring legal expenses, non-recurring layoffs and exchange rate
gains/losses.
Target markets progress
Environmental remediation (76% of period revenue (1H2021: 75%))
· In April 2022, Directa Plus received authorisation from the United States
Environment Protection Agency for the Company's Grafysorber® technology to be
used on any oil contamination in the US
· Also in April 2022, the Company signed a first order of Grafysorber® based
absorbing products from the UK's REDA Energy, a leading oil field chemical
supplier, to initially target northern European markets
· Post period end, in July 2022, the Company signed a Commercial Agreement with
REDA Energy, to distribute Grafysorber® oil response products in specified
European territories
Textiles (22% of period revenue (1H2021: 24%))
· In April 2022, the Company signed a non-binding Letter of Intent with a
leading international supplier of automotive interiors to Tier 1 manufacturers
to develop a suite of new products
· Post period end, in July 2022, the Company signed a supply agreement with
Officine di Cartigliano, an Italian based leader in the production of tanning
equipment, to use G+® pristine graphene nanoplatelets technology
· In August 2022, the Company signed an extension to the exclusive supply
agreement with Alfredo Grassi S.p.A., to broaden the existing collaboration to
include G+® Thermal Planar Circuit® (PTC®) for the workwear market in Italy
and France
· In September 2022, the Company signed a commercial agreement with Schmid SpA,
a leading fashion textile supplier, targeting the fashion footwear market and
high-end bags, combining traditional fabrics with G+® textile technologies
Other verticals
· In March 2022, Oxfordshire County Council began its second trial of GiPave®,
a patented asphalt concrete modifier enhanced by the Company's G+® graphene.
· In 1H22, the Company developed a graphene-based paints solution which provides
enhanced anti-flame and anti-corrosion properties compared to normal paints,
and is in discussion with potential partners
Innovation and IP
· Directa Plus' current patent portfolio now comprises 80 granted patents plus
27 patents pending, grouped into 22 families, 4 covering G+ production and 18
covering G+® products and applications
· In June 2022, the Company was granted an Italian patent covering the use of
the Company's G+® pristine graphene nanoplatelets applied to textile
substrates for high bacterial filtration efficiency media for filtration
applications
· In August 2022, the Company received the grant of the US patent titled "Golf
ball comprising graphene"
· In August 2022, the Company received a Notice of Allowance from the United
States Patent and Trademark Office for the grant of a patent covering the
Company's G+® embedded polyurethane membrane
Outlook
· Significant continued revenue growth despite the uncertainty in the
macro-economic climate
· Cost increases seen during 1H22 have been addressed both through price
increases for the Group's products and investment in new equipment that is
expected to reduce direct production costs, with gross margin recovery
expected in 2H22
· The Company is still awaiting the final decision on the award of a significant
contract in Romania for Environmental Remediation services but the Directors
continue to believe that the Group is well positioned to win the tender
Giulio Cesareo, Founder & CEO of Directa Plus, said: "We maintain a
positive outlook for the full year. However, this optimism must be tempered by
the increasingly difficult macro-economic and geopolitical situation as
inflation trends and supply chain issues could well worsen in the short term
as we approach the northern hemisphere winter. Despite these pressures, the
Directors believe that Directa Plus has positioned itself well to withstand
headwinds and take full advantage of the technology platform we have developed
which continues to gain further commercial traction."
For further information please visit http://www.directa-plus.com/
(http://www.directa-plus.com/) or contact:
Directa Plus plc +39 02 36714458
Giulio Cesareo, CEO
Giorgio Bonfanti, CFO
Cenkos Securities plc (Nominated Adviser and Joint Broker) +44 131 220 6939
Neil McDonald
Adam Rae
Singer Capital Markets (Joint Broker) +44 20 7496 3069
Rick Thompson
Phil Davies
Tavistock (Financial PR and IR) +44 20 7920 3150
Simon Hudson
Heather Armstrong
About Directa Plus
Directa Plus (www.directa-plus.com) is one of the largest producers and
suppliers of graphene-based products for use in consumer and industrial
markets. The Company's graphene manufacturing capability uses proprietary
patented technology based on a plasma super expansion process. Starting from
natural graphite, each step of Directa Plus' production process - expansion,
exfoliation and drying - creates graphene-based materials and hybrid graphene
materials ready for a variety of uses and available in various forms such as
powder, liquid and paste.
This proprietary production process uses a physical process, rather than a
chemical process, to process graphite into pristine graphene nanoplatelets,
which enables Directa Plus to offer a sustainable, non-toxic product, without
unwanted by-products. Directa Plus' products are made of hybrid graphene
materials and graphene nano-platelets. The products (marketed as G+®) have
multiple applications due to its properties. These G+® products can be
categorised into various families, with different products being suitable for
specific practical applications.
Directa Plus was established in 2005 and is based in Lomazzo (Como, Italy) and
has been listed on the AIM market of the London Stock Exchange since May
2016. The Company holds the Green Economy Mark from London Stock Exchange
which recognises companies that contribute to the global green economy.
Review of Operations
Environmental
The Group's subsidiary, Setcar, continues to grow and is delivering customer
and revenue growth, making an important financial contribution to Directa
Plus. Grafysorber®'s commercial traction, for water and soil decontamination,
continues to increase with new customers won and repeat business from existing
customers secured.
As announced during the capital raise in December 2021, the Group is investing
in broadening its environmental remediation solutions. In 1H22 the Group
installed a production facility for Grafysorber® materials for oil spill
response products to increase production capacity and benefit from lower unit
production costs. The Group is planning to move a second Grafysorber® mobile
production unit into Romania to further increase its production capacity.
In Setcar's home market of Romania, the Group has established a successful
growing business which supports plans to scale up and export to other markets.
In April 2022, the Company received authorisation from the US Federal
Environment Protection Agency (EPA) for Grafysorber® technology to be used on
any oil contamination on US territory. Approval from the EPA is a vital first
step towards entering the very large US oil decontamination market. The Group
is seeking to enter Asian markets and is in talks with a number of important
players in the oil industry as a first step with the goal in the medium term
to access other verticals.
Just after the period end, in July 2022, the Company signed a Commercial
Agreement with UK based REDA Energy Ltd to distribute Grafysorber® oil
response products in agreed territories in Northern Europe. REDA Energy, a
division of the REDA Group, is a leading chemical manufacturer and supplier of
products and services to the global oil and gas sector. The Commercial
Agreement follows the successful testing of Directa's products by REDA
customers in the North Sea. These customers particularly appreciated the
lightness and simplicity in handling, the effectiveness of absorption, and the
reduced amount of plastic used in Grafysorber® booms and pillows. As a
result of feedback from REDA Energy, Directa Plus has been able to further
improve its oil spill response products, enhancing their ease of use and
performance.
The first order from REDA for Grafysorber® products predates the Agreement
and was delivered in June 2022 and comprised thousands of pillows and
barriers. REDA will place a second similar order to build a minimum safety
stock of products to cover northern Europe and will commence the distribution
of Grafysorber® products to REDA customers. REDA is also considering wider
opportunities for the application of the Group's water decontamination
technology.
Textiles
The Textiles vertical continues to gain commercial traction and is expanding
its broad spread of applications. Directa Plus has customers across a variety
of markets who benefit from the advantages of G+® technology:
· Heat dispersion properties (Planar Thermal Circuit, PTC®)
· Antimicrobial (antiviral and antibacterial) properties
· Electrical conductivity properties
· No negative impacts on human skin
· Sustainable production process
Workwear
Post period end, in July 2022, the Company signed an extension to its
exclusive supply agreement with Alfredo Grassi S.p.A. ("Grassi"), with whom
Directa Plus has been working successfully for over five years, to broaden the
existing collaboration to include Planar Thermal Circuit® (PTC®) for the
workwear markets in Italy and France. This will enable the development of new
products for Grassi that will increase comfort for the wearer - a key
differentiator as climate change increases temperatures around the world.
Grassi is a leading European workwear and outerwear manufacturer, which has
been operating since 1925. Grassi produces technical clothing for the
industrial, sports and fashion industries, with a strong focus on innovation
and sustainability. The supply agreement grants Grassi exclusive use of
Directa Plus' proprietary PTC® G+® textile printing technology for the
workwear market in France and Italy for a period of two years.
Both Directa Plus and Grassi see significant advantages from the deeper
relationship, with Directa Plus gaining a recurring revenue stream for its
G+® PTC® technology and Grassi benefitting from exclusive use of a
sustainable textile technology with no biological impact. The agreement will
also enable the Company to further develop its understanding of market trends
and drivers affecting demand for workwear products.
Luxury
Directa Plus has been involved in the luxury market almost since inception and
continues to see interest from brands in the development of innovative,
technical new products to add to their collections. The Company continues to
work with a major luxury Italian brand, which remains a customer since 2019
and relies on Directa Plus' technology to promote its technical fabrics
collections.
Automotive
In April 2022, the Company signed a Letter of Intent (LOI) with a leading
global supplier of automotive interiors to Tier 1 manufacturers. The
supplier intends to develop a suite of new products for the automotive
industry based on the antimicrobial properties (antibacterial and antiviral),
thermal comfort and electrical conductivity properties of G+® enhanced
fabrics.
The LOI has a 12-month term and sees Directa Plus and the supplier agree to
combine resources, competence and expertise to develop G+® enhanced fabrics
into a suite of ready to use products for the automotive industry. If both
parties are satisfied with the results achieved after the 12 months, the
partners shall undertake to negotiate a Supply Agreement between the two
companies. Directa Plus is already working with the supplier to produce
prototypes for a number of global Tier 1 auto manufacturers.
Air filters
In December 2021, the Company signed a Letter of Intent with an Italian based
global chemicals and materials group which is a major player in the non-woven
materials industry to collaborate on an exclusive basis for an initial period
of 12 months. The collaboration sees Directa Plus' G+® technologies combined
with those of the partner to develop specific products for the global air and
water filtration markets. The technical development is yielding exciting
results and the two companies are renewing the collaboration with the goal to
accelerate the commercialisation of G+® functionalised non-woven materials.
Consumer electronics
Directa Plus continues to collaborate with the soft goods division of a major
international developer and manufacturer of consumer electronics and related
services. The agreement covers the potential application of G+® as a
protective covering for consumer devices, exploiting its
antiviral-antibacterial properties as well as its thermal and electrical
conductivity. The partnership has delivered exceptional results to date. This
collaboration continues to demonstrate the potential for significant volumes
in the coming years.
Other textiles applications
Post period end, in July 2022, the Company signed a supply agreement with
Officine di Cartigliano, for its G+® technology, worth €150,000 over one
year on a take or pay basis. Officine di Cartigliano is the Italian based
leader in the production of tanning equipment for the textile industry and
will be using a formulation of the Company's G+® based textile finishing
application to improve the performance of its equipment, particularly to
address antistatic issues.
In June 2022, Directa Plus attended Techtextil in Germany, a leading
international trade fair for technical textiles and nonwovens. International
exhibitors presented the entire spectrum of technical textiles, functional
apparel textiles and textile technologies. Directa Plus met with over 120
companies and more than 400 contacts at the fair, illustrating the traction
that has been built for the Company's textile applications and the many
potential future opportunities - mainly in the workwear and military segments.
Additional industrial verticals
Composites
The asphalt applications of Directa Plus's G+ graphene technology have great
potential and the product developed with Iterchimica provides exceptional
results in terms of increased durability and reduced carbon footprint. Despite
a slower start than expected, interest in the market for the product is
growing internationally and is gaining significant commercial traction.
In March 2022, Oxfordshire County Council started its second trial of a
patented asphalt concrete modifier developed by Iterchimica and enhanced by
the Company's Graphene Plus. The new trial will see two identical stretches
of Marsh Lane in Oxford, which carries around 10,000 vehicles a day along a
key city route, resurfaced with different materials. Half of a 700-metre
stretch of the road will be laid with GiPave®, while the rest will be
resurfaced using conventional asphalt, so that the two surfaces can be
compared.
This second trial follows a successful first pilot scheme in Curbridge,
Oxfordshire in 2019. Analysis of this scheme showed GiPave® increases the
lifespan of the surface by up to 70 per cent compared to conventional
resurfacing methods. The risk of rutting under loads from heavy goods vehicles
is also reduced by increased stiffness in the product.
GiPave® was developed by Iterchimica with the support of Directa Plus and
resulted from a three-year research programme with a patent filed in 2017. The
product uses waste plastics that would not normally be recycled and the
asphalt containing GiPave® can itself be entirely recycled - promoting the
'circular economy,' which reduces waste and the need for new materials.
Lithium-Sulphur Batteries
Lithium-Sulphur is a next generation battery chemistry offering advantages
over Lithium-Ion as it has a superior energy density, significant cost
advantages and a superior safety profile. Directa Plus continues to support
its partner NexTech in the development of this technology, in which G+® will
play a key role in terms of technical properties and the supply of the product
at the scale necessary to satisfy the needs of the market. In 1Q22 the parties
agreed to remove the exclusivity clause originally agreed in the contract, and
this will allow Directa Plus to collaborate with other players in the
industry.
The Company remains focused on supporting the development of such a
potentially disruptive technology and it has already targeted another
Lithium-Sulphur battery producer to accelerate the technology's
commercialisation.
Other areas
The Company continues to pursue additional opportunities in new growth
verticals including paints, polymers, elastomers, golf balls, cements, and
membranes.
The Company has developed a graphene-based paint solution which provides
enhanced anti-flame and anti-corrosion properties compared to normal paints.
Directa Plus has hired a team of experienced people in the field and has
started discussions with international major players in Europe and Asia to
accelerate commercialisation. The Group sees great potential in this
developing technology.
Intellectual Property
As at September 2022, the Group's patent portfolio is comprised of 80 patents
granted plus 27 patents pending. The patents are grouped into 22 families,
four covering G+® production and 18 covering G+® products and applications.
In June 2022, the Company was granted an Italian patent covering the use of
the Company's G+® applied to textile substrates for high bacterial filtration
efficiency media for filtration applications. The priority date for the
patent was 25 May 2020. G+® applied to textile substrates provides proven
antibacterial and antiviral (including anti-SARS-CoV-2) performance. The
target filtration market applications cover both medical and industrial use.
Directa Plus started work on air filtration in 2020 with a signature project
that successfully supplied face masks with anti-SARS-CoV-2 protection. This
work led quickly into exploring industrial filtration applications starting
with the automotive and HVAC (heating, ventilation and air conditioning)
markets.
In August 2022, the Company received the grant of a US patent titled "Golf
ball comprising graphene". The patent will enable Directa Plus to license its
technology in the key US market. The patent priority date was 23 December 2016
and covers a variety of formulations containing G+® graphene nanoplatelets
for application within golf balls. The use of G+® compounds in golf balls at
different loadings has the potential for developing a whole new range of golf
balls for professionals and amateurs. Different G+® graphene compounds within
the golf ball will enable professionals to increase distance without losing
lateral control or increase overall control of the ball for amateurs. The
Company is now in discussions with potential partners to bring the technology
to market.
In August 2022, the Company has received a Notice of Allowance from the United
States Patent and Trademark Office for the grant of a patent covering the
Company's G+® embedded polyurethane membrane, developed explicitly for the
textile industry, together with its production method and its applications.
The patent, titled "Polyurethane film comprising graphene and preparation
process thereof", has a priority date of 5 May 2017. The official grant,
expected shortly, will follow on from the completion of the filing process.
G+® membranes are highly functional membranes that combine breathability and
water protection with thermal and electrical conductivity. They provide
superior thermal comfort by enhancing heat retention, due to high infrared
absorption, while equalising it as a result of high in-plane thermal
conductivity. They are electrically conductive, and the conductivity
properties can be adjusted to confer antistatic behaviours for heating.
Directa Plus' G+® membranes are non-toxic, non-cytotoxic, and safe against
the skin. The membranes are used in apparel markets including the
sportswear, workwear, military, luxury and accessories segments. In
addition, they are being developed for use in the automotive, filtration and
upholstery markets.
Financial
The Group's interim financials as of 30 June 2022 show a robust and continuous
revenue growth of Directa Plus. During the first six months of the year, total
revenues increased by 39% compared to the same period of 2021, reaching
€5.51 million. The growth was driven by a strong performance by all the main
verticals: Environmental Remediation +43% (€4.20 million), Textiles +26%
(€1.19 million) and other verticals +86% (€0.12 million), the latter
mainly thanks to the asphalts applications which are providing encouraging
signals.
The first half of 2022 has been affected by a difficult and uncertain
macro-economic environment caused by the consequences of the war in Ukraine.
Input cost inflation, mainly driven by energy price increases, supply chain
issues and recessionary destocking by suppliers meant that the Group had to
deal with unexpected, and significant, cost increases which led to a reduction
in profitability.
However, the Group is promptly reacting to mitigate the impact of such cost
increases mainly through commercial actions: renegotiating principal
contracts, and investing in new milling equipment that is expected to
significantly reduce direct production costs, taking advantage from the
throughput project started six years ago. As a result, gross margin recovery
is continuing in the last quarter of 2022.
The table below shows a comparison of adjusted EBITDA loss and Loss before tax
in the first half of 2022 and of the previous year. Adjustments refer to:
- €0.5 million of one-off other income reported in the 2021
accounts from the release of an undue obligation to the former shareholders of
Setcar
- €0.05 million of legal expenses incurred in 1H22, mainly linked
to the protection of Directa Plus' IP portfolio, following the potential
breach of one of its patents in the textiles vertical
- €0.06 million of extraordinary severance pay
- Non-cash exchange rate effects (especially on the conversion GBP
to EURO) which negatively affected this years profitability
As of 30 June 2022, Cash was €7.78m (€11.13m as of 31 December 2021). The
Directors are satisfied that the Group has adequate resources to continue in
operational existence for at least 12 months from approving these interim
financial statements.
Board Composition
The Board is in advanced discussions to appoint a new non-executive director
and has identified several other potential candidates. The Board remains
committed to bring additional diversity and expertise to the Company.
Outlook
We have seen an increased level of interest in graphene and its applications
as a whole, with Directa Plus receiving a materially higher level of enquiries
from potential partners and customers. This has translated into continued
growth despite the uncertainty in the macro-economic climate caused by the war
in Ukraine, rising inflation driven mainly by energy cost increases and fears
of recession. In 1H22, the Group experienced sudden and unexpected cost
increases which led to a reduction in margin. The Group was impacted by higher
energy and raw material costs, that directly affected its direct production
costs, and general cost increases on outsourced services. These increases were
addressed in two ways. Firstly, by price increases for the Group's products -
major contracts with clients were renegotiated and secondly by an important
cost reduction plan fostered by a new milling equipment that is expected to
significantly reduce direct production costs. These measures will allow the
Group to progressively recover margins over 2H22.
Directa Plus still awaits the final decision on the award of a significant
contract in Romania for the Group's Environmental Remediation services but the
Directors continue to believe that the Group is well positioned to win the
tender.
In summary, the Board maintains a positive outlook for the full year. However,
this optimism must be tempered by the increasingly difficult macro-economic
and geopolitical situation as inflation trends and supply chain issues could
well worsen in the short term as the northern hemisphere winter approaches.
Despite these pressures, the Directors believe that Directa Plus has
positioned itself well to withstand headwinds and take full advantage of the
technology platform it has developed and that continues to gain further
commercial traction.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2022
In euro Note (Unaudited) (Unaudited) Audited
6 months ended 6 months ended 12 months ended
30 Jun 2022 30 Jun 2021 31 Dec 2021
Continuing operations
Revenue 5,508,706 3,950,559 8,615,098
Other income 100,667 613,651 831,405
Changes in inventories of finished goods and work in progress 174,084 293,498 12,960
Raw materials and consumables used (2,984,979) (1,300,320) (3,634,311)
Employee benefits expenses (2,259,310) (1,996,322) (4,296,955)
Depreciation and amortisation (646,657) (775,393) (1,543,567)
Other expenses (1,943,883) (2,002,230) (3,516,424)
Results from operating activities (2,051,372) (1,216,557) (3,531,794)
146,941
Finance (expenses)/income (160,504) 128,918
Net finance (costs)/income (160,504) 128,918 146,941
Loss before tax (2,211,876) (1,087,639) (3,384,853)
Tax expense (6,149) (116,640) (44,620)
Loss after tax (2,218,025) (1,204,279) (3,429,473)
Loss from continuing operations (2,218,025) (1,204,279) (3,429,473)
Loss of the period (2,218,025) (1,204,279) (3,429,473)
Other Comprehensive income items that will not be reclassified to profit or
loss
Defined Benefit Plan remeasurement gains and losses 1,350 (6,917) (6,457)
Other comprehensive income for the year (net of tax) 1,350 (6,917) (6,457)
Total comprehensive income for the year (2,216,675) (1,211,196) (3,435,930)
Loss attributable to
Owner of the Parent (2,230,996) (1,479,086) (3,652,364)
Non-controlling interests 12,971 274,807 222,891
(2,218,025) (1,204,279) (3,429,473)
Total Comprehensive (loss)/ income attributable to
Owner of the Parent (2,229,646) (1,486,003) (3,658,821)
Non-controlling interests 12,971 274,807 222,891
(2,216,675) (1,211,196) (3,435,930)
Loss per share
Basic loss per share 2 (0.03) (0.02) (0.06)
Diluted loss per share 2 (0.03) (0.02) (0.06)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
In euro Note (Unaudited) (Unaudited) Audited
30 Jun 2022 30 Jun 2021 31 Dec 2021
Assets
Intangible assets 1,829,204 1,907,600 1,792,277
Property, plant and equipment 3,769,629 4,187,504 3,982,966
Trade and other receivables 553,904 135,036 185,623
Non-current assets 6,152,737 6,230,140 5,960,866
Inventories 1,597,476 1,657,947 1,370,875
Trade and other receivables 3,052,595 2,621,172 3,305,493
Cash and cash equivalent 7,776,689 5,191,533 11,130,468
Current assets 12,426,760 9,470,652 15,806,836
Total assets 18,579,497 15,700,792 21,767,702
Equity
Share capital 205,469 191,531 205,393
Share premium 39,181,789 31,395,612 39,159,027
Foreign currency translation reserve (45,100) (15,061) (23,109)
Retained Earnings (27,569,021) (23,248,981) (25,352,139)
Equity attributable to owners of Group 11,773,137 8,323,101 13,989,172
Non-controlling interest 1,880,198 2,101,286 2,041,938
Total equity 13,653,335 10,424,387 16,031,110
Liabilities
Loans and borrowings 1,687,953 1,890,196 2,403,881
Lease liabilities 363,877 462,192 463,047
Employee benefits 519,055 474,274 500,535
Other payables 64,392 64,636 64,357
Deferred tax liabilities 73,332 114,022 89,497
Non-current liabilities 2,708,609 3,005,320 3,521,317
Loans and borrowing 137,434 26,722 65,840
Lease liabilities 204,868 276,987 217,537
Trade payables and other payables 1,875,251 1,967,376 1,931,898
Current liabilities 2,217,553 2,271,085 2,215,275
Total liabilities 4,926,162 5,276,405 5,736,592
Total equity and liabilities 18,579,497 15,700,792 21,767,702
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Foreign currency translation reserve Retained Earnings Total Non-controlling Total
In euro Capital premium interests Equity
Balance at 31 December 2020 190,996 31,395,612 (7,015) (21,824,229) 9,755,364 906,885 10,662,249
Total comprehensive (loss)/income for the period
Loss of the Period - - (1,479,086) (1,479,086) 274,807 (1,204,279)
Total other comprehensive (expense)/income - - (6,917) (6,917) - (6,917)
Total comprehensive (loss)/income for the period - - (1,486,003) (1,486,003) 274,807 (1,211,196)
Capital raised 535 - - 535 - 535
Translation reserve - - (8,045) (8,045) - (8,045)
Change of Setcar non-controlling interests - - - - - 919,594 919,594
Share based payment reserve - - - 61,251 61,251 - 61,251
Balance at 30 June 2021 191,531 31,395,612 (15,061) (23,248,981) 8,323,101 2,101,286 10,424,387
Total comprehensive (loss)/income for the period
Loss of the Period - - - (2,173,278) (2,173,278) (51,916) (2,225,194)
Total other comprehensive (loss)/income - - - 461 461 - 461
Total comprehensive (loss)/income for the period - - - (2,172,817) (2,172,817) (51,916) (2,224,733)
Capital raised 13,862 8,306,293 - - 8,320,155 - 8,320,155
Expenditure related to the issuance of shares (542,878) - (542,878) - (542,878)
Translation reserve - - (8,048) (8,048) - (8,048)
Change of Setcar non-controlling interests - - - - - (7,430) (7,430)
Share based payment reserve - - - 69,659 69,659 - 69,659
Balance at 31 December 2021 205,393 39,159,027 (23,109) (25,352,139) 13,989,172 2,041,938 16,031,110
Total comprehensive (loss)/income for the period
Loss of the Period - - - (2,230,996) (2,230,996) 12,971 (2,218,025)
Total other comprehensive (loss)/income - - - 1,350 1,350 - 1,350
Total comprehensive (loss)/income for the period - - - (2,229,646) (2,229,646) 12,971 (2,216,675)
Capital raised 77 22,762 - - 22,838 - 22,838
Translation reserve - - (21,991) (21,991) - (21,991)
Change of Setcar non-controlling interests - - - - - (174,711) (174,711)
Share based payment reserve - - - 12,765 12,765 - 12,765
Balance at 30 June 2022 205,469 39,181,789 (45,100) (27,569,021) 11,773,137 1,880,198 13,653,335
CONSOLIDATED STATEMENT OF CASH FLOW
For the six months ended 30 June 2022
(Unaudited) (Unaudited) Audited
30 Jun 2022 30 Jun 2021 31 Dec 2021
(2,211,876) (1,087,639) (3,384,853)
Loss for the year before tax
Adjusted for:
Depreciation 391,732 489,675 994,021
Amortisation of intangible assets 254,925 285,718 549,547
Share based payment expense 12,765 61,251 130,910
Finance income (1,009) (163,820) (221,622)
Finance expense 153,812 13,970 56,524
Interest of lease liabilities 7,702 12,543 18,157
(1,391,949) (388,302) (1,857,316)
Operating cash flow before working capital changes
Decrease / (Increase) in inventories (226,600) (282,000) 5,072
Decrease / (Increase) in trade and other receivables, prepayments (115,384) 241,900 (493,008)
(Decrease) / Increase in trade and other payables (261,375) (1,338,201) (1,207,601)
Increase / (decrease) in provisions and employee benefits 11,360 16,765 37,457
Net cash used in operating activities (1,983,948) (1,749,838) (3,515,396)
Cash flows from investing activities
Interest received 1,009 427 1,616
Investment in intangible assets (291,853) (120,445) (299,056)
Contingent consideration - (442,205) (572,268)
Acquisition of property, plant and equipment (178,395) (458,996) (767,719)
Net cash used in investing activities (469,239) (1,021,219) (1,637,427)
Cash flows from financing activities
Proceeds from Capital raise 22,838 535 8,320,690
Expenditure related to the issuance of shares - (542,878)
Interest Paid (33,603) (8,622) (45,426)
New Borrowings 285,680 872,945 1,511,719
Repayment of borrowings (930,013) (35,214) (81,666)
Repayment of lease liabilities (111,840) (102,894) (179,646)
Net cash (used)/generated from financing activities (766,938) 726,750 8,982,793
Net (decrease)/increase in cash and cash equivalent (3,220,125) (2,044,307) 3,829,970
Effect of exchange rate changes (133,654) 155,348 220,006
Cash and cash equivalents at beginning of the period 11,130,468 7,080,492 7,080,492
Cash and cash equivalents at end of the period 7,776,689 5,191,533 11,130,468
Net cash (used)/generated from financing activities
(766,938)
726,750
8,982,793
Net (decrease)/increase in cash and cash equivalent
(3,220,125)
(2,044,307)
3,829,970
Effect of exchange rate changes
(133,654)
155,348
220,006
Cash and cash equivalents at beginning of the period
11,130,468
7,080,492
7,080,492
Cash and cash equivalents at end of the period
7,776,689
5,191,533
11,130,468
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the 6 months ended 30 June 2022
1. Basis of preparation
(a) Statement of compliance
The financial information contained in this announcement does not constitute
statutory financial statements within the meaning of Section 435 of the
Companies Act 2006.
The financial information for the six months ended 30 June 2022 is
unaudited. In the opinion of the Directors, the financial information for
the period fairly represents the financial position of the Group. Results of
operations and cash flows for the period are in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006. The accounting policies, estimates and judgements applied are consistent
with those disclosed in the Group's statutory financial statements for the
year ended 31 December 2021. The interim condensed consolidated financial
statements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the full
annual report for the year ended 31 December 2021.
All financial information is presented in Euro, unless otherwise disclosed.
The Directors of the Company approved the financial information included in
these Interim condensed consolidated financial statements on 28 September
2022.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis
unless otherwise stated.
(c) Functional and presentation currency
These financial statements are presented in Euro ('€') and is considered by
the Directors to be the most appropriate presentation currency to assist the
users of the financial statements. The functional currency of the Company and
Italian operating subsidiary is Euro ('€'). The functional currency of the
Romanian subsidiary is RON.
(d) Going concern
The Group meets its working capital requirements through the receipt of
revenues from the provision of its services and sale of products mainly in
Europe, the management of capital and operating expenditure, from the working
capital and other borrowing facilities available to it and from the issue of
equity capital.
As at 30 June 2022, the Group had net assets of €13.65m (31/12/2021:
€16.03m) and cash and cash equivalent of €7.78m (31/12/2021: €11.13m).
The Directors prepare annual budgets and forecasts in order to ensure that
they have sufficient liquidity in place in the business. The Group is
projected to have the financial capacity to support its viability, following
the uncertainties and challenges created by the COVID-19 pandemic and the
inflation trends due to the war in Ukraine, until at least the end of 2023.
Having regard to the above and based on their latest assessment of the budgets
and forecasts for the business of the company, the Directors consider that
there are sufficient funds available to the Group to enable it to meet its
liabilities as they fall due for a period of not less than twelve months from
the date of approval of the financial statements. The Directors therefore
consider it appropriate to adopt the going concern basis of accounting in
preparing the financial statements.
2. Earnings Per Share
The earnings per share have been calculated using the weighted average of
ordinary shares. The Company was loss making for all periods presented.
Therefore, the dilutive effect of share options has not been taken account of
in the calculation of diluted earnings per share, since this would decrease
the loss per share for each of the period reported.
Change in Total Weighted
number of number of number of
ordinary ordinary ordinary
shares shares Days shares
At 31 December 2019 12,530,156 60,998,983 365 52,973,511
At 31 December 2020 63,624 61,174,587 365 61,087,158
-At 31 December 2021 4,857,539 66,032,126 365 61,380,599
At 30 June 2022 25,523 66,057,649 181 66,049,470
Earnings per share
30 Jun 2022 30 Jun 2021 31 Dec 2021
Loss for the year (2,230,996) (1,479,086) (3,652,364)
Weighted average number of shares:
- Basic 66,049,470 61,351,750 61,380,599
- Diluted 67,044,295 61,890,830 61,649,085
Loss per share
- Basic (0.03) (0.02) (0.06)
- Diluted (0.03) (0.02) (0.06)
-ends-
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