REG - Hydrogen Utopia Intl - Interim Results
29/09/2023 07:00
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RNS Number : 0877O Hydrogen Utopia International PLC 29 September 2023
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.
29 September 2023
Hydrogen Utopia International PLC
(the "Company" or "HUI")
Interim Results
Hydrogen Utopia International PLC, a company specialising in turning
non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels,
new materials or distributed renewable heat, is pleased to announce its
results for the six months to 30 June 2023.
CEO Shareholders' Letter
Dear Shareholders,
The world is currently experiencing exceptionally challenging times, from
which most of us are suffering. These are times of survival until
circumstances improve, and companies that are willing to look ahead and
attempt to address global issues are the ones that will thrive. It is a
formidable task to request people to contemplate the future when dealing with
the difficulties of the present. These are not times for traditional solutions
and conventional thinking. These are akin to wartime conditions. Maintaining
independence is crucial for the company's future growth and prosperity in the
current market environment.
HUI is the most significant project in my life, which is why I have decided to
take measures to help the company not only survive but also thrive in hostile
and unpredictable circumstances.
We have made an unconventional decision to seek a revenue stream outside of
our sector and have taken an option to purchase 49% of Ohrid Organics LTD, a
company that specialises in cultivating high-quality medical cannabis. The
option poses limited risk to HUI, as it would only be exercised if Ohrid
Organics meets our expectations. What I anticipate is a cash runway, which
translates into independence. Independence from reliance on shareholders'
contributions, protecting their value.
While composing this report, I am confident that if we exercise the option, we
will hopefully never be compelled to seek shareholders' funds at heavily
discounted rates, as we have witnessed in recent months with other companies.
During the course of 2024 Ohrid Organics will primarily target sales in
Israel, once EU- GMP certification is received, Germany and the UK. Subject to
meeting local specification requirements and quality standards Ohrid Organics
expects to achieve, based on the current market, pricing per gram in Israel of
between EUR 1,75 - 2.15, and between 2,50 and 4.0 for EU- GMP certified
product. The figures which I am providing are exceedingly conservative.
Watching the market, I expect Ohrid Organics to create very significant
shareholder value.
Our ultimate goal remains unchanged: to build the world's first
plastic-to-hydrogen plant. I believe that the revenue generated from the
medical cannabis facility will provide HUI with the necessary funds to sustain
its operations. We are advancing with all our projects at varying speeds,
actively exploring opportunities for expansion while keeping costs to the
company at a minimum. We are making steady progress with our joint venture
with Powerhouse Energy Group (AIM:PHE) in the Irish Midlands. HUI is in the
process of establishing a project pipeline in Poland, France, the Netherlands,
Greece, and Estonia, relying on limited funds and benefiting from the generous
assistance of embassies and chambers of commerce. The interest in our projects
is on the rise, driven by the ever-expanding issue of plastic production. We
are delighted to have received our first EU grant for 75% of expenditure of up
to €450,000 in Ireland. I believe it will open doors to more significant
funding in due course.
As previously mentioned, these are challenging times reminiscent of wartime
conditions. Therefore, I made the decision to appoint Mr. Simon Mann as the
Chairman of the Company during this period. Mr. Mann is a distinguished figure
within the British Establishment, former member of the SAS and the Scotts
Guards. Mr Mann's vast network of contacts across Europe and beyond will
greatly accelerate the Company's reach and advancement. Mr. Mann's wealth of
experience and his understanding of countries beyond the European continent
will enable us to expand our horizons, fulfilling a dream I've held since the
Company's inception. It is my utmost privilege to have successfully persuaded
Mr. Mann to join the Company's Board.
For more information about the Company, please refer to our website:
www.hydrogenutopia.eu (http://www.hydrogenutopia.eu)
For further information, please contact:
Hydrogen Utopia International PLC
Aleksandra Binkowska
+44 20 3811 8770
Alfred Henry Corporate Finance Limited (LSE Corporate Adviser)
Nick Michaels/Maya Klein
Wassink
+44 20 7309 2203
Novum Securities Limited (Broker)
Jon Belliss/Colin
Rowbury
+44 20 7399 9400
Interim Management Report
Commercial, technological and business development
During the period the Company commenced trading on the main market of the
London Stock Exchange under symbol HUI and ceased trading on the AQSE main
market.
Work continues on building a pipeline of HUI facilities in Europe. New markets
are keen to learn about the HUI technology and aid us in setting up a facility
in their locality.
Research and Development remains a key component of our work at this stage of
the Group's strategy. Shortly after the period for which these interim
statements cover the EU awarded a grant to one of the Company's Irish
subsidiaries. This will give a further boost to our R&D capabilities and
facilities in Ireland.
The Board of Directors continue to monitor the Group's project pipeline, which
includes current and future projects, as well as Group cashflows for OPEX and
project specific funding. The current market conditions raise significant
challenges to raising capital which is why the board has sorted alternative
methods of income to assist the Groups' objectives in waste to energy.
Related party transactions
Ohrid Organics Limited ("OOL") is a company with a majority ownership by
Howard White, who is also a director of HUI PLC. Subsequent to the period end,
HUI PLC has signed an agreement on 3 July 2023 to provide a loan to OOL (full
details in note 6 below). This related party transaction is expected to result
in a cash runway for future operations of the Group.
Outlook
The outlook for the Group remains very positive and the board looks forward to
the second half of the
year with a high degree of confidence in the ongoing execution of its
strategy. Despite the macro-economic backdrop, the Group are moving forward
with current and future projects as expected.
Financial Performance
· Admin expenses for the half year of £0.9m (H1 2022: £0.6m)
· Gross Loss for period increased to £0.8m (H1 2022: £0.6m)
· Cash at bank as at 30 June 2023 of £2.1m (H1 2022: £3.2m)
Principal risks
The Directors consider that the principal risks and uncertainties which could
have a material effect on the Group's performance identified in the Annual
Report 2022 are also applicable for a period of six months from 31 December
2022.
The Directors continue to monitor the risks associated with currency
fluctuations and believe that the strategy put in place reduces this risk
significantly.
Unaudited Consolidated Statement of Comprehensive Income for the period ending
30 June 2023
Six months Six months Year ended December 31
ended ended
June 30 June 30
2023 2022 2022
Notes £ £ £
(Unaudited) (Unaudited) (Audited)
Administrative expenses (866,941) (583,878) (1,492,297)
Operating loss (866,941) (583,878) (1,492,297)
Other revenue 100,006
Investment revenues 99 4 4
Loss on ordinary activities before taxation (766,836) (583,874) (1,492,293)
Income tax expense - - -
Loss and total comprehensive income for the period (766,836) (583,874) (1,492,293)
Basic and Diluted Earnings per share from continuing operations (pence) 8 (0.20) (0.15) (0.48)
Unaudited Consolidated Statements of Financial Position as at 30 June 2023
Notes 30 June 2023 30 June 2022 31 December 2022
£ £ £
(Unaudited) (Unaudited) (Audited)
Non-Current assets
Property, plant and equipment 9 587,719 516,450 516,308
Investment in Financial Assets 425,315 425,315 425,315
1,013,034 941,765 941,623
Current assets
Trade and other receivables 262,712 106,604 97,855
Cash and bank balances 2,096,389 3,204,701 2,993,960
2,359,101 3,311,305 3,091,815
Current liabilities
Trade and other payables 78,348 104,822 108,540
Borrowings 584,312 - 570,175
662,660 104,822 678,715
Net current assets 1,696,441 3,206,483 2,413,100
Net assets 2,709,475 4,148,248 3,354,723
Equity
Share capital 7 385,520 384,320 384,320
Share premium 5,248,679 5,174,684 5,174,684
Other reserves 370,866 209,579 324,473
Retained earnings (3,295,590) (1,620,335) (2,528,754)
Total equity 2,709,475 4,148,248 3,354,723
Unaudited Consolidated Statement of Changes in Equity for the period ending 30
June 2023
Share Share premium Other reserves Retained profits Total equity
capital
£ £ £ £ £
Balance at 1 January 2022 (audited) 344,320 2,214,684 3,052,395 (1,036,461) 4,574,938
Loss for the six months ended 30 June 2022 - - - (583,874) (583,874)
Issue of share capital 40,000 2,960,000 (3,000,000) - -
Share based payment expense - - 157,184 - 157,184
Balance at 30 June 2022 (unaudited) 384,320 5,174,684 209,579 (1,620,335) 4,148,248
Loss for the six months ended 31 December 2022 - - - (908,419) (908,419)
Share based payment expense - - 114,894 - 114,894
Balance at 31 December 2022 (audited) 384,320 5,174,684 324,473 (2,528,754) 3,354,723
Loss for the six months ended 30 June 2023 - - - (766,836) (766,836)
Issue of share capital 1,200 88,800 - - 90,000
Share issue costs - (14,805) - - (14,805)
Share based payment expense - - 46,393 - 46,393
Balance at 30 June 2023 (unaudited) 385,520 5,248,679 370,866 (3,295,590) 2,709,475
Unaudited Consolidated Statement of Cash Flows for the period ended 30 June
2023
Six Months ended 30th June Six Months ended 30th June Year ended 31st December
2023 2022 2022
£ £ £
Notes (Unaudited) (Unaudited) (Audited)
Cash flow from operating activities
Profit/(loss) for the period (766,836) (583,874) (1,492,293)
Investment Income (99) (4) (4)
Depreciation, amortisation and impairment 247 104 277
Equity settled share based payment expense 46,393 157,184 272,078
(Increase)/decrease in trade and other receivables (164,856) 1,889,258 1,898,098
Increase/(decrease) in trade and other payables (16,056) (400,249) (396,531)
Net cash generated for/(absorbed in) operating activities (901,207) 1,062,419 281,625
Cash flows from investing activities
Purchase of unincorporated business - (89)
Purchase of property, plant and equipment 9 (71,658) (130,019) (130,052)
Investment in Financial Assets - (425,315) (425,315)
Interest received 99 4 4
Net cash generated for/(absorbed in) investing activities (71,559) (555,330) (555,452)
Cash flows from financing activities
Proceeds from issue of shares 75,195 -
Proceeds from shares to be issued - -
Proceeds from borrowings - - 570,175
Net cash generated for/(absorbed in) financing activities 75,195 - 570,175
Net increase in cash & cash equivalents (897,571) 507,089 296,348
Cash and equivalent at beginning of period 2,993,960 2,697,612 2,697,612
Cash and equivalent at end of period 2,096,389 3,204,701 2,993,960
Notes to the Interim Financial Information
1. General information
Hydrogen Utopia International Plc is a company incorporated and domiciled in
England and Wales. The Company's registered office is C/O Laytons Llp, 3(rd)
Floor Pinners Hall, 105-108 Old Broad Street, London, EC2N 1ER. The Company is
listed on the LSE main market (ticker: HUI).
The unaudited consolidated financial information comprises the financial
information of Hydrogen Utopia International Plc, HU2021 International UK
Limited, Hydropolis United Sp.Z.O.O., Plastic Gold IKE, Alister Future
Technologies (AFT) Limited, Eranova Longford Limited and HU Future B.V. (the
"Group").
The principal activities of the entities in the Group are as follows: -
Name of company Country of incorporation Principal activities
Hydrogen Utopia International plc England and Wales Holding company
HU2021 International UK Limited England and Wales SPV
Hydropolis United Sp.Z.O.O. Poland Energy producer
Plastic Gold I.K.E Greece Energy producer
Alister Future Technologies (AFT) Ltd Ireland SPV
Eranova Longford Limited Ireland Energy producer
HU Future B.V. The Netherlands SPV
On 7 April 2023 a company called HU Future B.V., incorporated in the
Netherlands, was set up which is a wholly owned subsidiary of HUI PLC.
There have been no significant changes in these activities during the relevant
financial periods.
The consolidated interim financial information has been prepared in accordance
with UK adopted International Accounting Standards (IFRSs). The interim
financial information does not constitute full financial statements within the
meaning of Section 435 of the Companies Act 2006. The interim results have not
been audited or reviewed by the Company's auditors. The unaudited interim
results have been prepared under the historical cost convention, in accordance
with the Companies Act 2006 and applicable accounting standards in the United
Kingdom.
The comparative figures for the year ended 31(st) December 2022 for the
Company are extracted from the audited financial statements which contained an
unqualified audit report and did not contain statements under Sections 498 to
502 of the Companies Act 2006.
The Directors have considered all available information about future events
when considering going concern. The Directors have prepared and reviewed cash
flow forecasts for 12 months following the date of these Financial Statements.
The projections show that the Company will have sufficient funding to be able
to continue as a going concern on the basis of its cash balances as at 30 June
2023.
2. Presentational currency
The financial information has been presented in sterling ("£")
the Group's presentational currency. The functional currency of the Group is
sterling ("£").
3. Summary of significant accounting policies
The same accounting policies and methods are used in the Interims as compared
with the most recent financial statements, the year ended 31(st) December
2022, these Interims should be read in conjunction with them, which can be
found here https://www.hydrogenutopia.eu/investors
(https://www.hydrogenutopia.eu/investors)
Investment in Financial Assets are measured at fair value, any interest or
dividend income are recognised in profit and loss.
The tax charge on profits assessable has been calculated at the rates of tax
prevailing, based on existing legislation, interpretation and practices in
respect thereof.
4. Segmental reporting
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Operating Group that are regularly reviewed by
the chief operating decision maker (which takes the form of the Board of
Directors) as defined in IFRS 8, in order to allocate resources to the segment
and to assess its performance.
Based on management information there is one operating segment. Revenues are
reviewed based on the services provided.
No single customer has accounted for more than 10% of total revenue during the
periods presented.
5. Related Party Disclosure
As at 30 June 2023 the group was owed £250 by Plastic Power Limited (A
Binkowska) and £403 by The Plastic Neutrality Pledge (A Binkowska).
6. Significant events during the period
On 9 January 2023 the Company's Ordinary shares commences trading on the main
market of the London Stock Exchange under symbol HUI.
On 11 January 2023, Executive Director, Howard White, purchased an additional
350,000 Ordinary Shares from the market previously in issue at an average
price of 16.1277p per Ordinary Share, bringing his total interest in Ordinary
Shares to 15,310,834.
On 23 January 2023 Novum Securities Limited exercised all of their warrants to
subscribe for 1,200,000 new Ordinary Shares of 0.1p bringing the total number
of Ordinary Shares/voting rights in the Company to 385,520,000.
On 14 February 2023 the Company's Ordinary Shares ceased to be traded on the
AQSE main market.
On 21 March 2023 Heads of Terms were signed between HUI PLC and Powerhouse
Energy PLC (PHE) in relation to a joint venture (JV) at Longford, Ireland.
On 22 March 2023 the board of directors agreed to a corporate restructure of
expenses incurred under HU2021 during 2020 and 2021 to be recharged to HUI PLC
as group expenses. Additionally, the board agreed to transfer the ownership of
the Assets under construction to HUI.
On 3 April 2023 Harold Tillman CBE was granted options over up to 6,666,666
HUI ordinary shares at an exercise price of 15p per share exercisable over
different periods of time in the 4 years following his appointment.
On 26 May 2023 Keith Riley resigned as an Executive Director.
During the period, HUI PLC entered into negotiations with Carbon Capture and
Sequestration Limited ("CCS" subsequently renamed Ohrid Organics Limited
("OOL")) to provide a loan of £500,000. This resulted in an agreement signed
off on 3 July 2023 subsequent to the period end. Under the agreement HUI PLC
was granted the option to acquire 49% of OOL in return for the issue of 49
million ordinary shares of £0.001 each in HUI PLC (the "Option"). The Option
is exercisable at any time in the period ending 31 October 2024.
7. Called up share capital
Authorised Nominal value 30 Jun 22 30 Jun 22 31 Dec 22
(Unaudited) (Unaudited) (Audited)
£ £ £
385,520,000 Ordinary £0.001 385,520 384,320 384,320
8. Basic and diluted earnings per share
The calculation of earnings per share is based on the following earnings and
number of shares.
Six months Six months Year ended 31 December 2022
Ended 30 June 2022 Ended 30 June 2022
(Unaudited) (Unaudited) (Audited)
£ £ £
Total comprehensive loss (766,836) (583,874) (1,492,293)
Weighted average number of ordinary shares 385,367,514 382,994,033 312,852,798
Earnings per share
Basic and diluted earnings per share (pence) (0.20) (0.15) (0.48)
9. Property, plant and equipment
Assets under construction Computers Total
£ £ £
Cost
At 1 January 2022 384,862 1,694 386,556
Additions 128,975 1,045 130,020
At 30 June 2022 513,837 2,739 516,576
Additions - 32 32
At 31 December 2022 513,837 2,771 516,608
Additions 70,749 909 71,658
At 30 June 2023 584,586 3,680 588,266
Accumulated depreciation and impairment
At 1 January 2022 - 23 23
Charge for the period - 104 104
At 30 June 2022 - 127 127
Charge for the period - 173 173
At 31 December 2022 - 300 300
Charge for the period - 247 247
At 30 June 2023 - 547 547
Carrying amount
At 1 January 2022 384,862 1,671 386,533
At 30 June 2022 513,837 2,613 516,450
At 31 December 2022 513,837 2,471 516,308
At 30 June 2023 584,586 3,133 587,719
10. Related party transactions
OOL is a company with majority ownership by Howard White, who is also a
director of HUI PLC and as such the loan to OOL (as discussed in note 6) is a
related party transaction. All other Group related parties transactions are
unchanged from the 6 months ended 31 December 2022. For further information on
the Group's related parties, please refer to the Group's Annual Report 2022.
11. Events after the reporting period
On 3 July 2023 HUI signed the loan agreement with OOL (as discussed in note 6)
and enacted the payment of £500,000 to OOL on 11 July 2023.
On 4 July 2023 HUI PLC's Irish subsidiary, Alister Future Technologies (AFT)
Limited ("AFT") was successfully awarded an EU grant for 75% of expenditure of
up to €450,000 in Ireland.
On 21 August 2023 Simon Mann was appointed as non-executive Chairman of the
Company. Simon was granted share options over 2 million ordinary shares at an
exercise price of £0.05 per share and will vest over a period of 2 years.
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