REG - Eden Research plc - Eden Half Yearly Report
30/09/2022 07:01
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RNS Number : 2360B Eden Research plc 30 September 2022
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
30 September 2022
Eden Research plc ("Eden" or "the Company")
Half Yearly Report
Eden Research plc (AIM: EDEN), the AIM-quoted company focused on sustainable
biopesticides and plastic-free formulation technology for use in the global
crop protection, animal health and consumer products industries, announces
its interim results for the six months ended 30 June 2022.
Financial highlights
· Revenue for the period of £1.04m (H1 2021: £0.79m), an increase of
c. 32%
· Product sales of £1.01m (H1 2021: £0.66m), an increase of c. 53%
· Operating loss for the period of £1.3m (H1 2021: £1.8m)
· Cash and cash equivalents of £1.9m (H1 2021: £5.8m)
· Cash and cash equivalents at 31 August 2022 of £2.4m following a tax
refund and receipts from half-year end trade debtors
· On track to meet 2022 product sales revenue guidance of £1.4m
Business highlights
Expanding regulatory approvals in key territories, including the US, and
leveraging of high-value commercial agreements
· Materially increased Eden's global addressable market with label
extensions and new regulatory approvals, most notably the addition of the US
following EPA approval, post-period end
o Other notable approvals included Mevalone® label extensions in Italy
(sold under the brand "3logy®", by Sipcam-Oxon)
· Eden's new insecticide product heading towards commercialisation with
extensive registration and commercial evaluation field trials ongoing in 2022
· Commercialisation of the seed treatment product developed as part of
the Corteva project remains on track with commercial launch possible in
advance of the 2024 growing season (subject to regulatory approvals)
· Robust sales of Eden's products indicating that demand is returning
to pre-pandemic levels
· New distribution arrangements in key territories expected by
year-end
Corporate highlights
New team additions reflecting Eden's next phase of growth and ambition to
capitalise on the abundance of new opportunities
· Appointment of Richard Horsman as Non-Executive Director, with
effect from 1 September 2022. Richard brings over 25 years of AIM and Main
Market experience to the team
· New Development Team Lead and Formulation Team members recruited
· Strengthening of the Commercial Team underway
Lykele van der Broek, Chairman of Eden Research, commented:
"We reached the mid-part of 2022 on a firm footing, expanding our regulatory
approvals in key regions, advancing our strategic partnerships with major
industry players, and delivering robust sales of our products, indicating a
return to pre-pandemic demand levels.
The authorisation of Cedroz™ and Mevalone® and their associated active
ingredients in the US after the period end has been a particular highlight for
us. As the Environmental Protection Agency ("EPA") continues to ban a number
of commonly used conventional chemical pesticide products in recent years,
US-based farmers are in need of viable alternatives to keep up with the
growing demand for food. The approval of our biopesticide products, which are
based on naturally occurring substances, provide this alternative, without
compromising efficacy, yield or production costs.
This development opens up significant revenue and growth opportunities for us,
with our total addressable market in the region of $500 million. We now turn
our attention to state level approvals, focusing on California and Florida in
the first instance, which we expect to see in the coming months, followed by
the start of meaningful sales in 2023.
This year so far has also seen us continue to successfully develop new product
ranges, including our insecticide offering, which has produced good field
trial results to date in both our own hands, and in the hands of potential
commercial partners. Our partnership to develop our seed treatment product
with Corteva also goes from strength to strength and we look forward to
successfully commercialising this offering as quickly as possible, subject to
regulatory clearance.
Despite ongoing macro-economic challenges, we are pleased with the progress
that has been made during the year so far. With our new board and team
additions, we are confident that we have the talent and capabilities to
capitalise on the significant and growing market opportunity available for
Eden across the globe. I look forward to reporting further progress in the
coming months as we continue to work towards our strategic and financial
goals."
For further information contact:
Eden Research plc www.edenresearch.com (http://www.edenresearch.com/)
Sean Smith 01285 359 555
Alex Abrey
Cenkos Securities plc (Nominated advisor and broker)
Giles Balleny / Max Gould (corporate finance) 020 7397 8900
Michael Johnson (sales)
Hawthorn Advisors (Financial PR)
Victoria Ainsworth eden@hawthornadvisors.com (mailto:eden@hawthornadvisors.com)
Stephen Atkinson
Chief Executive Officer's Statement
The first of half of 2022 has represented a period of progress for Eden, and I
am delighted to say we are beginning to see the fruits of our commercial
efforts with stronger sales.
Executing on our strategic objectives
At our recent AGM, we laid out four key strategic areas that we are pursuing
to take the Company forward into its next phase of growth:
· Diversification of our product portfolio, geographic presence, target
markets, and product uses
· Enhancing our research, development and operations, and self-reliance,
through the expansion of our in-house capabilities, optimising our supply
chains, and reducing our time to market
· Growth through new partnerships and collaborations with major global
and regional partners, as well as regulatory clearance in new countries,
crops, and diseases
· Team expansion with added capacity in key strategic areas such as
development and commercial
Eden has been delivering against these objectives in the following ways:
1. Widening our global market opportunities
We are excited to be able to report federal approval from the EPA received
after the period end for distribution of our flagship products, Mevalone® and
Cedroz™, alongside our three associated active ingredients, in one of the
largest agricultural markets in the world. This has been the result of over
four years of effort by our experienced regulatory and commercial teams who
worked tirelessly to ensure that Eden addressed the EPA's extensive and
evolving list of strict requirements. We are the first British crop
protection company to receive such approval for a biopesticide, and we are, by
far, the smallest company to achieve the ambitious goal of registering three
active ingredients and two formulated products at once, thereby opening up one
of the world's most important markets for agricultural inputs.
Eden's naturally derived products represent a compelling proposition for
American farmers looking to navigate the increasingly restrictive landscape of
regulations whilst still maintaining or increasing food production in a
sustainable way. We estimate this one addressable market alone to be worth in
excess of $500 million per annum. The next step in the process will be to
focus on local regulatory approval in the key states of California and
Florida, where many of the country's high-value crops are grown. We expect
these regulatory processes to be relatively short, as we target the 2023
growing season.
Eden also received a label extension for Mevalone® in Italy which is sold
under the brand name "3logy®" by our commercial partner Sipcam Oxon. This
label extension has allowed Eden and Sipcam to target two new fungal pathogens
and add a wide range of new crop types to the label. We estimate that this
expansion of the label for 3logy adds thousands of hectares of high-value
crops to our addressable market.
We are currently hard at work to further optimise our distribution network,
and we anticipate announcing new partnerships in the coming months; all aimed
at adding new territories or expanding our market access in existing
countries.
2. Expanding our product line and applicable uses
Our product development pipeline continues to progress. Examples include our
forthcoming insecticide product which we have been conducting extensive field
trials on this year. We are now at the stage of receiving trial results and,
in the meantime, we have sent our product to a long list of third parties,
including several industry leaders, to undertake field trials of their own. We
look forward to sharing the outcome of these field trials in due course as we
prepare for registration and commercialisation.
In addition, field trials this growing season on our seed treatment product,
developed for commercialisation by Corteva, have so far proven successful. We
are looking to move forward with the regulatory process in key markets as
swiftly as possible. Our aspiration is to launch this important new product in
time for the 2024 growing season, although the process is subject to
regulatory approval by the relevant authorities across our targeted
geographies.
We are continually assessing applicable use of our biopesticide products
across crops outside our existing remit such as cannabis, as well as the use
of our proprietary technologies in the consumer products and animal health
industries.
3. New team additions to drive next phase of growth
Post-period, we welcomed Richard Horsman as a new Non-Executive Director.
Richard possesses an abundance of industry, commercial and corporate acumen
and expertise which will help drive Eden through our next phase of growth.
This not only applies to maximising the potential of our existing
opportunities, but also in driving new opportunities that share synergies with
our core business.
Strong revenue and sales performance against year-end guidance
Revenues for the first half of the year increased by approximately 32% to
£1.04m compared to £0.79m for H1 2021.
The focus for the business remains to grow revenue through product sales which
will ultimately provide a sustainable, consistent source of income for the
Company. Product sales increased by approximately 53% to £1.01m compared to
£0.66m for H1 2021.
Earnings improved against H1 2021 with overall loss before tax of £1.3m (H1
2021: £1.8m loss), but were flat against H1 2021 Adjusted EBITDA (i.e. EBITDA
excluding Share Based Payments) with a loss of £0.8m (H1 2021: £0.8m loss).
The cash position at half-year was £1.9m (H1 2021: £5.8m) and £2.4m at 31
August 2022 following a tax refund and receipts from half-year end trade
debtors.
Our cash generation is supported by the material progress made along various
development lines, as well as the growing number of additional commercial
agreements and regulatory approvals in new territories.
We continue to aggressively manage our cash position and always aim to achieve
operational efficiencies. Much of the work that has been brought in-house
was previously contracted to third parties, and so many of our internal costs
have offset what were previously larger third-party expenditures. By bringing
certain strategic capabilities in-house, we have also been able to
significantly reduce development time whilst building internal know-how and
strengthening our strategic capabilities in support of future growth.
Dividend
At present, there is currently no near-term plan to pay a dividend. However,
the Board continues to review the company's dividend policy.
Maintaining a cautious approach against a promising outlook
The commercial foundations for the remainder of the year have been set in
place by the interim period and we remain on track to meet full year product
sales revenue market expectations of £1.4 million. As ever, we continue to
monitor conditions of the current growing season and any impact this may have
on our product sales. Generally dry weather conditions across the south of
Europe have, once again, reduced demand for botryticides and certain other
agrochemicals. Ultimately this can result in higher-than-desired inventory
levels.
Whilst it is premature to assess what impact this will have on the post-season
selling period, we are monitoring this situation closely as we are with
various supply chain-related issues, including increasing raw material prices.
The well-known potential impact of weather in the short-term, and climate
change in the longer term, further highlights the need to expand our product
range and the diseases and pests that we target in order to achieve a
diversification of risks across the product portfolio. We have made good
progress in this area in the last five years, and we will continue to focus
upon these efforts as a matter of priority.
On behalf of the Company, I'd like to thank our staff for their outstanding
efforts so far this year as well as our shareholders for their continued
interest and support.
Sean Smith
Chief Executive Officer
29 September 2022
Eden Research plc - Consolidated Statement of Comprehensive Income for the six
months ended 30 June 2022
Six Six Year ended 31 December 2021
months ended 30 June 2022 £ unaudited months ended 30 June 2021 £ unaudited £
audited
Revenue (note 16) 1,040,036 785,294 1,228,580
Cost of sales (626,342) (403,570) (667,343)
Gross profit 413,694 381,724 561,237
Administrative expenses (1,295,770) (1,272,825) (2,694,290)
Amortisation of intangible assets (246,325) (316,536) (434,630)
Share based payments (note 15) (152,135) (544,028) (640,597)
Operating loss (1,280,536) (1,751,665) (3,208,280)
28 82 98
Investment revenues (9,868) (18,320) (32,074)
Finance costs (33,351) (54,847) (97,247)
Foreign exchange gains/(losses)
Share of loss of equity accounted investee, net of tax (note 10) (9,849) (9,199) (58,177)
Loss before taxation (1,333,576) (1,833,949) (3,395,680)
Income tax income 345,424 261,020 618,137
Loss for the financial period (988,152) (1,572,929) (2,777,543)
Attributable to: (997,630) (1,583,887) (2,788,973)
Equity holder of the company
Non-controlling interest 9,478 10,958 11,430
Other Comprehensive Income net of tax - - -
Total Comprehensive Income (988,152) (1,572,929) (2,777,543)
Earnings per share (note 7)
Basic (pence per share) (0.26) (0.42) (0.73)
Eden Research plc - Consolidated Statement of Financial Position as at 30 June
2022
30 June 2022 30 June 2021 31 Dec 2021
£ £ £
unaudited unaudited audited
NON-CURRENT ASSETS
Intangible assets (note 9) 8,330,644 7,315,305 7,919,780
Property, plant & equipment (note 12) 222,712 259,484 232,278
Right of Use assets (note 13) 339,179 373,968 372,787
Investments in associate (note 10) 351,839 410,666 361,688
9,244,374 8,359,423 8,886,533
CURRENT ASSETS
Inventories 459,424 264,797 521,351
Trade and other receivables 1,564,652 1,495,898 886,587
Taxation 918,009 546,128 903,245
Cash and cash equivalents 1,852,019 5,748,840 3,829,369
4,794,104 7,770,555 6,140,552
CURRENT LIABILITIES
Trade and other payables 1,638,945 1,705,285 1,711,518
Lease liabilities 114,478 94,415 99,924
1,753,423 1,924,912 1,811,442
NET CURRENT ASSETS 3,040,681 5,845,643 4,329,110
NON-CURRENT LIABILITIES - 125,212 87,740
Trade and other payables
Lease liabilities 247,742 305,016 298,428
247,742 430,228 386,168
NET ASSETS 12,037,313 13,900,050 12,829,475
EQUITY
Called up share capital 3,803,402 3,803,402 3,803,402
Share premium account 39,308,529 39,308,529 39,308,529
Warrant reserve 769,773 876,764 937,505
Merger reserve 10,209,673 10,209,673 10,209,673
Retained earnings (42,094,661) (40,328,965) (41,460,753)
Non-controlling interest 40,597 30,647 31,119
TOTAL EQUITY 12,037,313 13,900,050 12,829,475
Eden Research plc - Consolidated Statement of Changes in Equity as at 30 June
2022
Non-control-ling interest
Share capital Share premium Merger reserve Warrant reserve Retained earnings
Total
£ £ £ £ £ £ £
Six months ended 30 June 2022
Balance at 1 January 2022 (audited) 3,803,402 39,308,529 10,209,673 937,505 (41,460,753) 31,119 12,829,475
Loss and total comprehensive income - - - - (997,630) 9,478 (988,152)
Transactions with owners
- Xinova write off - - - - 43,855 - 43,855
- Options granted - - - 152,135 - - 152,135
- Options exercised/lapsed - - - (319,867) 319,867 - -
Transactions with owners - - - (167,732) 363,722 - 195,990
Balance at 30 June 2022 (unaudited) 3,803,402 39,308,529 10,209,673 769,773 (42,094,661) 40,597 12,037,313
Six months ended 30 June 2021
Balance at 1 January 2021 (audited) 3,803,402 39,308,529 10,209,673 429,915 (38,842,259) 19,689 14,928,949
Loss and total comprehensive income - - - - (1,583,887) 10,958 (1,572,929)
Transactions with owners
- Xinova write off - - - - - - -
- Options granted - - - 544,028 - - 544,028
- Options exercised/lapsed - - - (97,179) 97,179 - -
Transactions with owners - - - 446,849 97,179 - 544,028
Balance at 30 June 2021 (unaudited) 3,803,402 39,308,529 10,209,673 876,764 (40,328,965) 30,647 13,900,050
Eden Research plc - Consolidated Statement of cash flows for the six months
ended 30 June 2022
Six months Six months
ended ended Year ended 31
30 June 2022 30 June 2021 December 2021
£ £ £
unaudited unaudited audited
Cash flows from operating activities
Cash outflow from operations (note 8) (1,528,470) (420,027) (1,586,582)
Interest on lease liabilities (9,868) (18,320) (32,074)
Tax refunded 330,660 - -
Net cash used in operating activities (1,207,678) (438,347) (1,618,656)
Cash flows from investing activities
Purchase of intangible assets (657,189) (902,356) (1,624,927)
Purchase of property, plant and equipment (21,790) (98,458) (101,269)
Interest received 28 82 98
Net cash used in investing activities (678,951) (1,000,732) (1,726,098)
Cash flows from financing activities
Payment of lease liabilities (57,370) (43,737) (90,387)
Net cash used in financing activities (57,370) (43,737) (90,387)
(Decrease)/increase in cash and cash equivalents (1,943,999) (1,482,816) (3,435,141)
Cash and cash equivalents at
beginning of period 3,829,369 7,286,503 7,286,503
Effect of exchange rate fluctuations on cash held
(33,351) (54,847) (21,993)
Cash and cash equivalents at
end of period 1,852,019 5,748,840 3,829,369
Cash and cash equivalents comprise bank account balances.
Notes to the Interim Results
1. Reporting Entity
Eden Research plc is a public limited company incorporated in the United
Kingdom under the Companies Act 2006. The Company is domiciled in the United
Kingdom and is quoted on the Alternative Investment Market (AIM).
These condensed consolidated interim financial statements ('Interims') as at
and for the six months ended 30 June 2022 comprise the Company and its
Subsidiaries (together referred to as 'the Group'). The principal activities
of the Group are the development and commercialisation of encapsulation,
terpenes and environmentally friendly technologies to provide naturally
occurring solutions for the global agrochemicals, animal health, and consumer
product industries.
2. Basis of Preparation
These Interims have been prepared in accordance with IAS 34 'Interim Financial
Reporting', and should be read in conjunction with the Group's last annual
consolidated financial statements as at and for the year ended 31 December
2021 which were approved by the Board of Directors on 30 May 2022 and have
been delivered to the Registrar of Companies. The report of the auditors on
those financial statements was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under section 498 of the
Companies Act 2006.
The Interims do not include all of the information required for a complete set
of financial statements prepared under UK-adopted International Accounting
Standards and do not constitute statutory accounts within the meaning of
section 434 of the Companies Act 2006. However, selected explanatory notes are
included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance
since the last annual financial statements.
Comparative information in the Interims as at and for the year ended 31
December 2021 has been taken from the published audited financial statements
as at and for the year ended 31 December 2021. All other periods presented are
unaudited.
The Board of Directors and the Audit Committee approved the interims on 29
September 2022.
3. Going Concern
The directors have, at the time of approving the Interims, a reasonable
expectation that the Group has adequate resources to continue in operational
existence for at least 12 months from the approval of the financial
statements. Thus, the Interim financial statements have been prepared on a
going concern basis which contemplates the realisation of assets and the
settlement of liabilities in the ordinary course of business.
The Group has reported a loss for the first half of the year after taxation of
£988,152 (H1 2021: £1,572,929). Net current assets at that date amounted to
£3,040,681 (H1 2021: £5,845,643). Cash at that date amounted to £1,852,019
(H1 2021: £5,748,840). The Group is reliant on its existing cash balance to
fund its working capital.
The Directors have prepared budgets and projected cash flow forecasts, based
on forecast sales provided by Eden's distributors where available, for a
period of at least 12 months from the date of approval of the Interims and
they consider that the Company will be able to operate with the cash resources
that are available to it for this period.
The forecasts adopted include only revenue derived from existing contracts.
They do not include potential upside from on-going discussions and
negotiations with other parties not yet contracted, as well as other 'blue
sky' opportunities.
The impact of COVID-19 has been considered in the forecasts. The Group has not
been significantly impacted by the pandemic although it has led to some delays
in product development processes and limited promotional activity. The
forecasts reflect this with the development expenditure timing based on the
latest experience with regulatory authorities and sales volumes on the latest
distributors' information which reflects their post-COVID-19 demand.
In addition, the Group has relatively low fixed running costs and, while
mitigating actions are not forecast to be required to support the going
concern basis, the Directors have previously demonstrated its ability to delay
certain other costs, such as Research and Development expenditure, in the
event of unforeseen cash constraints and are willing and able to delay costs
in the forecast period should the need arise.
Consequently, the directors are confident that the company will have
sufficient funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of the financial statements and
therefore have prepared the financial statements on a going concern basis
4. Adoption of new and revised standards and changes in accounting
policies
These condensed consolidated Interims have been prepared in accordance with
the accounting policies adopted in the last annual financial statements for
the year to 31 December 2021, except for the application of the following
standard at 1 January 2022:
· Amendments to IFRS 3, IAS 16, IAS 37 and the 2018-2020 IFRS Annual
Improvements cycle
The adoption of these new standards would not result in any material changes
to the Interims.
The accounting policies have been applied consistently for the purposes of
preparation of these condensed Interims.
5. Principal risks and uncertainties
The Company's prime risk is the on-going commercialisation of its intellectual
property, which involves testing of the Company's products, obtaining
regulatory approvals and reaching a commercially beneficial arrangement for
each product to be taken to market. This is measured by comparing actual
results with forecasts that have been agreed by the Company's Board of
Directors.
The Company's credit risk is primarily attributable to its trade receivables.
Credit risk is managed by running credit checks on customers and by monitoring
payments against contractual agreements.
The Company monitors cash flow as part of its day-to-day control procedures.
The Board considers cash flow projections at its meetings and ensures that the
Company has sufficient cash resources to meet its on-going cash flow
requirements.
Due to the nature of the business, there is inherent risk of infringement of
Eden's intellectual property rights by third parties. The risk of infringement
is managed by taking (and acting on) the relevant legal advice as and when
required.
There is also inherent uncertainty surrounding the regulatory approval of
products in terms of both timing and outcome. This risk is managed by
retaining appropriately experienced staff and contracting with expert
consultants as needed.
6. COVID-19 and Ukraine
COVID-19
As restrictions significantly eased in the first part of 2022, operationally
things are returning to normal.
Commercially, there has been some negative impact on the sales of our products
due to the on-going reduction in demand for wine grapes, a knock-on effect of
the substantive closure of the hospitality industry.
The Company has not seen a significant change on its toll manufacturing
operations, though supply of some raw materials continues to be somewhat
delayed.
Regulatory authorities were working at reduced capacity, which has impacted
on-going product approval applications that we have around the world, though
it is still difficult at this stage to assess what, if any, commercial and
financial impact there may be.
The Company has been careful to manage its cost-base and cash position given
the general uncertainties that currently exist due to the global COVID-19
pandemic.
Ukraine
Eden does not currently have any business activities in Russia or Ukraine and,
as such, does not expect any immediate, direct impact on its business.
The knock-on effect of the conflict on other countries is yet to be
understood, though we do not envisage significant disruption to the current
business in the short term.
7. Earnings per share
Six months ended Six months ended Year ended
30 June 2022 30 June 2021 31 December 2021
Pence unaudited Pence unaudited Pence
audited
(Loss)/profit per ordinary share (pence) - basic (0.26) (0.42) (0.73)
Loss per share - basic has been calculated on the net basis on the loss after
tax of £988,152 (30 June 2021: £1,572,929, 31 December 2021: £2,777,543)
using the weighted average number of ordinary shares in issue of 380,340,229
(30 June 2021: 380,340,229, 31 December 2021: 380,340,229).
Diluted earnings per share has not been presented as the Group is currently
loss making and as a result, any additional equity instruments have the effect
of being anti-dilutive.
8. Reconciliation of loss before income tax to cash used by
operations
Six months ended Six months ended
30 June 2022 30 June 2021 Year ended
£ £ 31 December 2021
unaudited unaudited £
audited
(Loss)/profit after tax (988,152) (1,572,929) (2,777,543)
Adjustments for:
Share of associate's losses 9,849 9,199 58,177
Amortisation charges 246,325 316,536 434,630
Share based payment charge 152,135 544,028 640,597
Xinova loan balance written off 43,855 - -
Depreciation of property, plant and equipment and right of use assets
88,159 75,601 155,341
Finance costs 9,868 18,320 122,311
Foreign exchange currency losses 33,351 54,847 21,993
Finance income (28) (82) (98)
Tax credit (345,424) (261,020) (618,137)
Movements in working capital:
(Increase)/decrease in trade and other receivables (678,066) 185,518 509,721
(Decrease)/ Increase in trade and other payables (162,269) 250,330 163,355
Decrease/(increase) in inventory 61,927 (40,375) (296,929)
Cash used by operations (1,528,470) (420,027) (1,586,582)
9. Intangible assets
Intellectual property Licences and trademarks Development Costs Total
£ £ £ £
COST
At 1 January 2021 9,316,281 448,896 6,624,406 16,389,583
Additions - - 902,356 902,356
At 30 June 2021 9,316,281 448,896 7,526,762 17,291,939
Additions 91,405 7,788 623,378 722,571
At 31 December 2021 9,407,686 456,684 8,150,140 18,014,510
Additions - - 657,189 657,189
At 30 June 2022 9,407,686 456,684 8,807,329 18,671,699
AMORTISATION
At 1 January 2021 6,716,681 448,896 2,494,523 9,660,100
Charge for the period 109,974 - 206,562 316,536
At 30 June 2021 6,826,655 448,896 2,701,085 9,976,636
Charge for the period 109,974 - 8,120 118,094
At 31 December 2021 6,936,629 448,896 2,709,205 10,094,730
Charge for the period 105,174 648 140,503 246,325
At 30 June 2022 7,041,803 449,544 2,849,708 10,341,055
CARRYING AMOUNT
At 30 June 2022 2,365,883 7,140 5,957,621 8,330,644
At 31 December 2021 2,471,057 7,788 5,440,935 7,919,780
At 30 June 2021 2,489,626 - 4,825,679 7,315,305
10. Investment in associate
Six months ended Six months ended Year ended
30 June 2022 30 June 2021 31 December 2021
GBP'000 GBP'000 GBP'000
unaudited unaudited audited
Percentage ownership interest
and proportion of voting rights 29.90% 29.90% 29.90%
£ £ £
Non-current assets 409,425 440,601 440,601
Current assets 310,173 333,532 287,576
Non-current liabilities (98,806) (98,806) (98,806)
Current liabilities (269,026) (253,558) (269,026)
Net assets (100%) 351,766 421,769 360,345
Company's share of net assets 105,178 149,437 107,743
Separable intangible assets 133,533 148,101 140,817
Goodwill 412,649 412,649 412,649
Impairment of investment in associate (299,521) (299,521) (299,521)
Carrying amount of interest in associate 351,839 410,666 361,688
Revenue 255,912 270,970 361,307
Profit/(loss) from continuing operations (8,579) (6,406) (145,849)
Post tax profit from discontinued operations - - -
100% of total post-tax profits (8,579) (6,406) (145,849)
29.9% of total post-tax profits (2,565) (1,915) (43,609)
Amortisation of separable intangible assets (7,284) (7,284) (14,568)
Company's share of loss including amortisation of separable intangible asset (9,849) (9,199) (58,177)
11. Subsidiaries
Details of the company's subsidiaries at 30 June 2022 are as follows:
Name of undertaking Country of incorporation Ownership interest (%) Voting power held (%) Nature of business
TerpeneTech Limited Republic of Ireland 50.00 50.00 Sale of biocide products
Eden Research Europe Limited Republic of Ireland Dormant
100.00 100.00
TerpeneTech Limited ("TerpeneTech (Ireland))", whose registered office is 108
Q House, Furze Road, Sandyford, Dublin, Ireland, was incorporated on 15
January 2019 and is jointly owned by both Eden Research Plc and TerpeneTech
(UK), the company's associate.
Eden has the right to appoint a director as chairperson who will have a
casting vote, enabling the Group to exercise control over the Board of
Directors in the absence of an equivalent right for TerpeneTech (UK). Eden
owns 500 ordinary shares in TerpeneTech (Ireland).
Eden Research Europe Limited, whose registered office is 108 Q House, Furze
Road, Sandyford, Dublin, Ireland, was incorporated on 18 November 2020 and is
wholly owned by both Eden Research plc.
Non-controlling interests
The following table summarises the information relating to the Group's
subsidiary with material non-controlling interest, before intra-group
eliminations:
30 June 2022 30 June 2021 31 Dec 2021
£ £ £
unaudited unaudited audited
NCI percentage 50% 50% 50%
Non-current assets 99,563 112,835 106,199
Current assets - - -
Non-current liabilities - - -
Current liabilities (18,371) (55,542) (43,962)
Net assets 81,192 61,293 62,237
Carrying amount of NCI -
Revenue 25,591 28,551 36,131
Profit/(loss) 18,955 21,915 22,859
OCI - - -
Total comprehensive income 18,955 21,915 22,859
Cash flows from operating activities - - -
Cash flows from investment activities - - -
Cash flows from financing activities - - -
Net increase/(decrease) in cash and cash equivalents - - -
Dividends paid to non-controlling interests - - -
12. Property, plant and equipment
Land and buildings
Total
£ £
COST
At 1 January 2021 200,758 200,758
Additions 98,458 98,458
At 30 June 2021 299,216 299,216
Additions - owned 2,811 2,811
At 31 December 2021 302,027 302,027
Additions 21,790 21,790
At 30 June 2022 323,817 323,817
AMORTISATION
At 1 January 2021 12,693 12,693
Charge for the period 27,039 27,039
At 30 June 2021 39,732 39,732
Charge for the period 30,017 30,017
At 31 December 2021 69,749 69,749
Charge for the period 31,356 31,356
At 30 June 2022 101,105 101,105
CARRYING AMOUNT
At 30 June 2022 222,712 222,712
At 31 December 2021 232,278 232,278
At 30 June 2021 259,484 259,484
13. Right of use assets
Land and buildings
Vehicles Total
£ £ £
COST
At 1 January 2021 417,521 35,865 453,386
Additions - 27,920 27,920
At 30 June 2021 417,521 63,785 481,306
Additions 26,256 22,288 48,544
At 31 December 2021 443,777 86,073 529,850
Additions - 23,194 23,194
Disposals - (35,865) (35,865)
At 30 June 2022 443,777 73,402 517,179
AMORTISATION
At 1 January 2021 36,361 22,415 58,776
Charge for the period 41,752 6,810 48,562
At 30 June 2021 78,113 29,225 107,338
Charge for the period 41,752 7,973 49,725
At 31 December 2021 119,865 37,198 157,063
Charge for the period 45,438 11,364 56,802
Eliminated on disposal - (35,865) (35,865)
At 30 June 2022 165,303 12,697 178,000
CARRYING AMOUNT
At 30 June 2022 278,474 60,705 339,179
At 31 December 2021 323,912 48,875 372,787
At 30 June 2021 339,408 34,560 373,968
14. Trade and other receivables
30 June 31 December
30 June 2022 2021 2021
£ £ £
Trade receivables 1,166,042 780,215 693,948
VAT recoverable 231,407 164,026 104,760
Other receivables 66,410 319,259 65,957
Prepayments and accrued income 100,793 232,398 21,922
1,564,652 1,495,898 886,587
Trade receivables disclosed above are measured at amortised cost. The
Directors consider that the carrying amount of trade and other receivables
approximates their fair value.
15. Share based payments
Long-Term Incentive Plan ("LTIP")
Since September 2017 Eden has operated an option scheme for executive
directors, senior management and certain employees under an LTIP which allows
for certain qualifying grants to be HMRC approved. Details on options issued
in prior periods can be found in the annual report for the year ended 31
December 2021.
2022 Award
Options
Number of share options Weighted average exercise price (pence)
30 Jun 2022 30 Jun 2021 30 Jun 2022 30 Jun 2021
Outstanding at 1 January 18,680,0044 5,891,111 7 -
Granted during the period 2,006,939 10,500,000 6 6
Exercised during the period - - - -
Lapsed during the period - (5,891,111) - -
Exercisable at 30 June 20,686,943 10,500,000 7 -
The following information is relevant in the determination of the fair value
of options granted during the period under the LTIP Replacement Award.
Grant date 30/06/2022
Number of awards 2,006,939
Share price £0.04 - £0.05
Exercise price £0.01 - £0.06
Expected dividend yield -%
Expected volatility 63%
Risk free rate 0.95%
Vesting period One year
Expected Life (from date of grant) 3 years
The exercise price of options outstanding at the end of the period ranged
between 1p and 10p (H1 2021: 6p) and their weighted average contractual life
was 2.1 years (H1 2021: 1.5 years).
The share-based payment charge for the period, in respect of options, was
£152,135 (H1 2021: £544,028), £119,083 of which related to options granted
in 2021 and £33,052 of which related to options granted in the period.
Warrants
Number of share options Weighted average exercise price (pence)
30 Jun 2022 30 Jun 2021 30 Jun 2022 30 Jun 2021
Outstanding at 1 January 2,989,865 2,989,865 19 19
Granted during the period - - - -
Exercised during the period - - - -
Lapsed during the period (400,000) - 25 -
Exercisable at 30 June 2,589,865 2,989,865 15 15
The exercise price of warrants outstanding at the end of the period ranged
between 12p and 30p (H1 2021: 12p and 30p) and their weighted average
contractual life was 0.0 years (H1 2021: 1.0 year.) None of the warrants
have vesting conditions.
The share-based payment charge for the period, in respect of warrants, was
£nil (H1 2021: £nil). The weighted average fair value of each warrant
granted during the period was £nil (2020: £nil).
Xinova liability
In September 2015, the Company entered into a Collaboration and Licence
agreement with Invention Development Management Company LLC (part of
Intellectual Ventures, now called Xinova LLC). As part of this agreement,
upon successful completion of a number of different tasks, Xinova became
entitled to a payment which is calculated using a percentage (initially 3.17%,
reduced to 1.6% following the fundraise in March 2020) of the fully diluted
equity value, reduced by cash and cash equivalents, of the Company on the date
on which payment becomes due which is expected to be 30 September 2025. This
has been accounted for as a cash-settled share-based payment under IFRS 2.
An amount of £67,462, being the estimated fair value of the liability due to
Xinova, was recognised during 2016 and included as a non-current liability.
It is not believed that the value of the services provided by Xinova can be
reliably measured, and so this amount was calculated based on the Company's
market capitalisation at 31 December 2016, adjusted to reflect the percentage
of work completed by Xinova at that date based on a pre-determined schedule of
tasks.
At 31 December 2021, an amount of £87,704 (30 June 2021: £125,212) was owed
to Xinova and is shown as non-current other liabilities.
During the period, Eden was informed that Xinova had begun to wind down its
operations.
As a consequence, Eden began communications with an agent acting on behalf of
Xinova to effect the wind down in respect of the liability owed to Xinova by
Eden.
On 22 April 2022, Eden signed a 'full and final' settlement agreement with
Xinova which resulted in Eden paying an amount of £43,855, which represented
a c. 50% discount to the liability of £87,740 as at 31 December 2021, in line
with the then existing contract.
16. Segmental Reporting
IFRS 8 requires operating segments to be reported in a manner consistent with
the internal reporting provided to the chief operating decision-maker. The
chief operating decision-maker, who is responsible for the resource allocation
and assessing performance of the operating segments has been identified as the
Executive Directors as they are primarily responsible for the allocation of
the resources to segments and the assessment of performance of the segments.
The Executive Directors monitor and then assess the performance of segments
based on product type and geographical area using a measure of adjusted
EBITDA. This is the result of the segment after excluding the share-based
payment charges, other operating income and the amortisation of intangibles.
These items, together with interest income and expense are not allocated to a
specific segment.
The segmental information for the six months ended 30 June 2022 is as follows:
Agrochemicals Consumer products Animal health Total
Revenue £ £ £ £
Milestone payments - - - -
R & D charges - 3,232 - 3,232
Royalties - 25,591 - 25,591
Product sales 1,011,213 - - 1,011,213
Total revenue 1,011,213 28,823 - 1,040,036
EBITDA (822,740) 28,823 - (793,917)
Share Based Payments (152,135) - - (152,135)
Adjusted EBITDA (974,875) 28,823 - (946,052)
Amortisation (239,689) (6,636) - (246,325)
Depreciation (88,159) - - (88,159)
Finance costs, foreign exchange and investment revenues (43,191) - - (43,191)
Income Tax 345,424 - - 345,424
Share of Associate's loss - (9,849) - (9,849)
(Loss)/Profit for the Year (1,000,490) 12,338 - (988,152)
Total Assets 13,931,631 99,563 - 14,038,478
Total assets includes:
Additions to Non-Current Assets 702,173 - - 702,173
Total Liabilities 1,982,793 18,371 - 2,001,164
The segmental information for the six months ended 30 June 2021 is as follows:
Agrochemicals Consumer products Animal health Total
Revenue £ £ £ £
Milestone payments 95,025 - - 95,025
R & D charges - 3,218 - 3,218
Royalties - 28,551 - 28,551
Product sales 658,500 - - 658,500
Total revenue 753,525 31,769 - 785,294
EBITDA (843,969) 28,551 - (815,418)
Share Based Payments (544,028) - - (544,028)
Adjusted EBITDA (1,387,997) 28,551 - (1,359,446)
Amortisation (309,900) (6,636) - (316,536)
Depreciation (75,601) - - (75,601)
Finance costs, foreign exchange and investment revenues (73,167) - - (73,167)
Income Tax 261,020 - - 261,020
Share of Associate's loss - (9,199) - (9,199)
(Loss)/Profit for the Year (1,585,645) 12,716 - (1,572,929)
Total Assets 16,017,143 112,835 - 16,129,978
Total assets includes:
Additions to Non-Current Assets 1,028,734 - - 1,028,734
Total Liabilities 2,303,598 51,542 - 2,355,140
The segmental information for the year ended 31 December 2021 is as follows:
Agrochemicals Consumer products Animal health Total
Revenue £ £ £ £
Milestone payments 5,250 - - 5,250
R & D charges - 7,760 - 7,760
Royalties 57,170 36,131 - 93,301
Product sales 1,122,269 - - 1,122,269
Total revenue 1,184,689 43,891 - 1,228,580
Adjusted EBITDA (2,021,602) 43,891 - (1,977,711)
Share Based Payments (640,597) - - (640,597)
EBITDA (2,662,199) 43,891 - (2,618,308)
Amortisation (421,358) (13,272) - (434,630)
Depreciation (155,342) - - (155,342)
Finance costs, foreign exchange and investment revenues (129,223) - - (129,223)
Impairment of investment in associate - - - -
Income Tax 618,137 - - 618,137
Share of Associate's loss - (58,177) - (58,177)
(Loss)/Profit for the Year (2,749,985) (27,558) - (2,777,543)
Total Assets 15,004,888 22,197 - 15,027,085
Total assets includes:
Additions to Non-Current Assets 1,802,660 - - 1,802,660
Total Liabilities 2,153,649 43,961 - 2,197,610
Geographical Reporting
Six months ended 30 June 2022 Six months ended 30 June 2021 Year ended 31 December 2021
£ £ £
UK 28,823 31,769 83,891
Europe 1,011,213 753,525 1,144,689
1,040,036 785,294 1,228,580
The revenue derived from Milestone Payments relates to agreements which cover
a number of countries both in the EU and the rest of the world.
All of the non-current assets are in the UK.
Notes to Editors:
Eden Research is the only UK-listed company focused on biopesticides for
sustainable agriculture. It develops and supplies innovative biopesticide
products and natural microencapsulation technologies to the global crop
protection, animal health and consumer products industries.
Eden's products are formulated with terpene active ingredients, based on
natural plant defence metabolites. To date, they have been primarily used on
high-value fruits and vegetables, improving crop yields and marketability,
with equal or better performance when compared with conventional pesticides.
Eden has two products currently on the market:
Based on plant-derived active ingredients, Mevalone® is a foliar
biofungicide which initially targets a key disease affecting grapes and other
high-value fruit and vegetable crops. It is a useful tool in crop defence
programmes and is aligned with the requirements of integrated pest management
programmes. It is approved for sale in a number of key countries whilst Eden
and its partners pursue regulatory clearance in new territories thereby
growing Eden's addressable market globally.
Cedroz™( )is a bio-nematicide that targets free living nematodes which are
parasitic worms that affect a wide range of high-value fruit and vegetable
crops globally. Cedroz is registered for sale on two continents and Eden's
commercial collaborator, Eastman Chemical, is pursuing registration and
commercialisation of this important new product in numerous countries
globally.
Eden's Sustaine(®)( )encapsulation technology is used to harness the
biocidal efficacy of naturally occurring chemicals produced by plants
(terpenes) and can also be used with both natural and synthetic compounds to
enhance their performance and ease-of-use. Sustaine microcapsules are
naturally-derived, plastic-free, biodegradable micro-spheres derived from
yeast. It is one of the only viable, proven and immediately registerable
solutions to the microplastics problem in formulations requiring
encapsulation.
Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol
EDEN. It was awarded the London Stock Exchange Green Economy Mark in January
2021, which recognises London-listed companies that derive over 50% of their
total annual revenue from products and services that contribute to the global
green economy. Eden derives 100% of its total annual revenues from sustainable
products and services.
For more information about Eden, please visit: www.edenresearch.com
(http://www.edenresearch.com/) .
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