REG - Libertine Holdings - Final Results
28/09/2023 07:00
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RNS Number : 9128N Libertine Holdings PLC 28 September 2023
28 September 2023
Libertine Holdings PLC
("Libertine" the "Company" or the "Group")
Full year results for the twelve months ended 31 March 2023
Libertine Holdings PLC (LSE AIM: LIB), a developer of Linear Generator
technology, today announces its audited consolidated results for the twelve
months ended 31 March 2023.
Highlights
· Delivered £0.9m (FY22: £0.8m) of commercial revenues in the
financial period, predominantly with Hyliion Holdings Corp. (NYSE: HYLN,
"Hyliion").
· Completion of work with Hyliion for the integration of Libertine's
HEXAGEN™ hermetic linear generator technology into their first prototype
KARNO™ Hypertruck commercial vehicle demonstrator, exhibited at the ACT Expo
in Anaheim CA in May 2023.
· Completion of the design, manufacture and testing of Libertine's
intelliGEN™ performance validation prototype linear generator for heavy-duty
powertrain applications.
· Libertine has pre-funded the build of a small number of additional
intelliGEN™ prototype linear generators which are intended to support OEM
development programmes once the second phase of combustion performance
validation is complete.
· Memorandum of Understanding (MOU) entered into with Ashok Leyland to
evaluate the use of Libertine's intelliGEN™ technology platform and
prototype linear generators for its commercial vehicle powertrain development
and demonstration.
· Generated OEM commercial interest in our intelliGEN™ and HEXAGEN™
technology platforms for the decarbonisation of heavy-duty powertrain and
distributed power generation applications across several geographic regions.
· £2.5m of cash reserves at period end.
Outlook
As of 31 August 2023, the Group had cash reserves of £1.2m, in addition to
outstanding debtors of £0.2m and inventories of £0.6m. These cash reserves
provide the Group, absent any additional revenues, with the funds required to
maintain current operations through to May 2024.
The Company remains committed to developing its intelliGEN™ and HEXAGEN™
technology platforms which the Company provides to its OEM customers for their
development of Linear Generator and Linear Motor products.
The Company is presently engaged in commercial and technical dialogue under
NDA with prospective OEM customers across a number of different applications
and geographic regions.
Sam Cockerill, Chief Executive of Libertine, commented:
"We are pleased to have both intelliGEN™ and HEXAGEN™ platform hardware
generating positive test results through dyno testing on programmes in the US
and UK. The time taken and costs incurred to reach this stage have been
greater than anticipated, and the expected timing of the planned second phase
of intelliGEN™ combustion testing has been impacted by changes to test cell
infrastructure necessary for operation at higher power levels and for longer
durations. We are taking advantage of this downtime to implement a number of
performance and durability enhancements that are intended to satisfy
stage-gate performance requirements for entry into OEM new product development
programmes expected to commence in 2024.
"Commercial interest in our intelliGEN™ technology for the decarbonisation
of heavy-duty vehicles and distributed power generation continues to remain
robust and we are making good progress with a number of OEM and end product
customers who we anticipate will support the further development of the
technology."
Full year results presentation
Sam Cockerill, Chief Executive Officer, and Gareth Hague, Chief Financial
Officer, will be hosting an Investor Meet Company presentation
at 2pm (UK time) on 28 September 2023. Please sign up via the following
link https://www.investormeetcompany.com/libertine-holdings-plc/register-investor
(https://www.investormeetcompany.com/libertine-holdings-plc/register-investor)
.
For more information, please visit www.libertine.co.uk
(http://www.libertine.co.uk) or contact:
Libertine Holdings PLC via Tavistock
Sam Cockerill, Chief Executive Officer
Gareth Hague, Chief Financial Officer
Panmure Gordon (NOMAD and Broker) +44 20 7886 2500
John Prior
Dougie McLeod
Hugh Rich (Corporate Broking)
Tavistock (Public Relations and Investor Relations) +44 207 920 3150
Rebecca Hislaire libertine@tavistock.co.uk
Charles Baister
Notes to editors
Founded in 2009, Libertine provides technology platform solutions for Original
Equipment Manufacturers ("OEMs"), enabling efficient and clean power
generation from renewable fuels, and more effective energy storage devices and
gas compressor systems. Libertine was admitted to trading on the AIM market of
the London Stock Exchange in December 2021.
Libertine has created two technology platforms, each using the same core
technology elements, which the Company provides to its OEM customers for their
development of Linear Generator and Linear Motor products:
- The intelliGEN™ platform enables the creation of clean, highly
efficient and fuel-flexible Linear Generator products including:
• Heavy-duty hybrid powertrains of trucks, buses, tractors,
construction and mining equipment;
• Medium and light-duty hybrid powertrains of commercial vehicles
operating over longer distances;
• A proportion of the passenger automotive market where vehicle
use and recharging constraints are a barrier to battery electrification; and
• A wide range of off-grid, portable power and distributed power
generation applications.
- The HEXAGEN™ platform enables more effective energy storage,
thermal power generation, waste heat recovery and gas compression products
including:
• Stirling Engine power generators and thermal energy storage
systems;
• Linear motor reciprocating compressor (LMRC) systems for
hydrogen refuelling stations; and
• Organic Rankine Cycle waste heat recovery systems.
These two platforms are a result of over a decade of development and
performance validation of Libertine's proprietary core technology elements
including its linear electrical machines, controls and developer tools.
The potential market for Linear Generator products goes well beyond the
distributed power generation applications where Linear Generators are already
in commercial use today, complementing intermittent renewable power with
clean, on-demand power generation. Linear Generators also have the potential
to complement battery electrification in hybrid powertrains, providing
on-board power generation to address the practical and economic barriers to
rapid adoption of clean electric propulsion using battery electric powertrain
technology alone.
Working with OEMs from an early stage in the development cycle ensures
Libertine's technology is effectively integrated into OEM products, maximising
the performance and economic benefits provided by Libertine's platform
technology. Libertine has developed a portfolio of over 30 granted patents in
addition to a significant body of technical know-how generated since the
Company's formation. The Company's senior management team and board includes
executives with decades of deep technical experience in the automotive and
energy industries.
Chief Executive's Statement
I am pleased to report on our strategic progress and business performance for
the financial year.
During the period, Libertine has supported the adoption and use of our Linear
Generator technology platforms by our OEM customers and strategic development
partners, in line with our strategy.
Our mission is to bring forward the widespread use of Linear Generators in
transport and distributed power applications.
Business Overview
Manufacturers of heavy-duty commercial vehicles have pledged to go "fossil
free" by 2040 through a combination of powertrain technologies that include
battery electrification, green hydrogen, renewable biofuels and synthetic low
carbon fuels. Achieving this will require the rapid deployment of fossil
fuel-free capable trucks by 2030; however, this can only happen if there is
large demand from transport operators based on the use case economics for such
trucks.
Battery electrification is not a universal solution to the problem of
decarbonising transport. A number of significant economic barriers prevent
trucks powered solely by battery electric powertrain technology from achieving
decarbonisation of the heavy goods transport industry, including:
· reduced payload, due to the size and weight of batteries required;
· unproductive miles and hours, to charge the batteries;
· few charging points, creating uncertainty for truck operators and the
need for off-route miles; and
· higher vehicle costs, predominantly due to the battery costs.
Libertine has developed the intelliGEN™ and HEXAGEN™ Linear Generator
technology platforms which have the potential to complement battery
electrification within hybrid powertrains, addressing the significant economic
barriers set out above.
Linear Generators are already in commercial use in distributed power
generation applications, displacing conventional generators due to their
favourable operating economics compared to today's less efficient internal
combustion engine generator technology.
Libertine's technology will help meet the global need for clean, reliable and
affordable transport and electrical power wherever it is needed, transforming
the lives of millions of people.
Strategic Priorities
Libertine's proposed technology licencing model supports stage-gated
development by OEM partners seeking to address key performance, technical,
economic and route-to-market risks and to develop their own proprietary
combustion systems and product integration IP. In the near term, in addition
to grants, Libertine expects to continue to generate a high proportion of its
revenue in engineering fees for developing and providing linear e-machine
hardware, controls and developer tools to power generator OEM customers.
Over time, as client development programmes result in the launch of commercial
Linear Generator products, Libertine expects to increase the proportion of
revenue generated from advance licence fees and from royalties charged per
unit on every Linear Generator product or system that uses
Libertine's technology.
During the year, Libertine has continued to support the integration of its
HEXAGEN™ electrical linear generator technology with Hyliion. We have
delivered a number of performance validation prototypes to Hyliion for dyno
and on-vehicle testing within their first KARNO™ Hypertruck demonstrator.
Libertine has also advanced its intelliGEN™ linear generator platform
through a grant funded program with BEIS. Having completed the design and
manufacture of a performance validation prototype Linear Generator, "LGN120",
we have completed a first phase of combustion testing at MAHLE Powertrain. In
addition to validating the exceptional efficiency and control performance
offered by Libertine's intelliGEN platform technology, a key objective of
combustion testing is to demonstrate fuel flexibility - an important
differentiator for Linear Generators - by running the same engine with both
hydrogen and compressed natural gas ("CNG"). This fuel flexibility has the
potential to accelerate the global adoption of electrified powertrains in
advance of the widespread deployment of hydrogen refuelling and battery
recharging infrastructure.
Commercial interest in Libertine's technology platform within powertrain and
stationary power applications remains strong, and we expect to support the use
of our technology within further OEM product development programmes.
Market Overview
The addressable market for Linear Generators is significant, including over
twelve million heavy duty and light duty commercial vehicles, and more than
one million distributed power generator sets for energy storage, off-grid and
waste-to-energy applications. Libertine's technology platform is scalable
across multiple market segments and geographies, covering applications from
1-250 kilowatts of electrical power.
During the year, grant funded work with MAHLE Powertrain and work with Hyliion
has focused on the design and manufacture of performance validation prototypes
for heavy duty powertrain applications. We have also progressed commercial
interest across other application sectors, including distributed power for
telecom towers and hydrogen compression.
Technical Progress
Investment in core technology development has increased in-line with IPO
plans. During the period we are pleased to have delivered a number of
performance validation prototypes to customer / partner testing sites in the
UK and US, and have provided on-site support to these testing programmes. We
have achieved a number of technical milestones, including progressions across
durability, efficiency and power output metrics in line with our technology
roadmap expectations.
Core technical development in FY2023/24 will focus on specific changes
required to the first intelliGEN™ prototype to improve durability and
operations across a wider range of compression ratios for fuel flexibility,
cold start, transient and lean operation.
Financial Performance
During the year, Libertine has continued to support the integration of its
HEXAGEN™ technology platform with Hyliion Holdings Corp. (NYSE: HYLN,
"Hyliion") and develop its intelliGEN™ technology platform through grant
funded operations with the Department for Business, Energy and Industrial
Strategy ("BEIS"), alongside a number of other commercial projects.
The Group delivered £0.9m of commercial revenue and £0.4m of grant income.
The business has continued to deliver operational milestones across a number
of revenue and grant contracts and is gaining commercial traction and
increased interest from OEMs.
Commercial revenues of £0.9m (FY22: £0.8m) were delivered across a number of
engineering services contracts, predominantly with Hyliion.
As of 31 March 2023, the Group had cash reserves of £2.5m.
Outlook
Whilst strong technical progress has been made in the year with a number of
commercial and grant funded projects now in dyno and on-vehicle testing,
development to reach this stage has taken longer than previously expected
impacting the timing of follow-on revenues.
We have aligned our technology investment and operational scale up plans with
the pace of our commercial progress. We have also amended our go-to-market
strategy to focus on key manufacturing partners who have the ability to bring
product to market.
Management remains focused on partnering with OEMs to support the funding
requirements for bringing the technology to market.
Financial Review
During the period we have continued to deliver on commercial and grant funded
programmes for the development of the HEXAGEN™ and intelliGEN™ platforms.
In line with our plans set out at IPO, we have invested in our core technical
development and engineering capabilities, ahead of the conversion of
commercial interest.
We remain committed to delivering on our current customer programmes and
supporting the integration of our technology into the products of our OEM
customers.
Financial Performance
FY2022/23 FY2021/22
£m £m
Commercial revenue 0.9 0.8
Grant income 0.4 2.1
Total income 1.3 2.9
Cost of sales (1.8) (2.5)
Admin expenses (3.6) (1.3)
Adjusted EBITDA (4.1) (0.9)
Exceptional costs - (1.0)
Net interest charge (0.0) (1.4)
Loss before tax (4.1) (3.3)
Taxation 0.4 0.1
Loss after tax (3.7) (3.2)
Revenues and Grant Income
Commercial revenues in the year were generated from engineering services on a
number of customer programmes. The majority of the revenue came from the
engineering development with Hyliion (formerly GE) on the first phase of our
joint development agreement.
Grant income in the period relates to a new program which commenced with BEIS
in March 2022. The additional grant funding is supporting the further
development of the intelliGEN™ platform to demonstrate hydrogen and
compressed natural gas ("CNG") fuel flexibility.
Operating Expenses
Administrative expenses increased in the period, as a result of investment
into core technical development, scale up of the engineering team to support
customer contracts and a full year of post-IPO professional fees. In the
prior year, expenses included £1.0m of exceptional costs incurred as a result
of the IPO.
Share option charges in the current year relate to the Long-Term Incentive
Plan issued to all employees. In the prior year, share option charges related
to the Enterprise Management Incentive share schemes which had previously
been issued and which vested at IPO.
Adjusted EBITDA
The Adjusted EBITDA loss of £4.1m (FY2021/22: £0.9m) increased on the prior
year as a result of the planned investment in core technical development,
scale up of the engineering team to support customer contracts and a full year
of post-IPO professional fees.
Adjusted EBITDA is calculated after adding back operating costs of an
exceptional nature, which are not considered to form part of the underlying
performance. The reconciliation of adjusted EBITDA to the loss from operations
for the financial year is shown below.
Finance Income and Expense
Net interest charges of £1.4m in the prior year predominantly related to the
movement in the fair value of the convertible loan note up to its conversion
at the IPO. No similar charges have been incurred, as expected, in the current
year.
Taxation
The tax credit for the current and prior year relates to research and
development tax credits. No corporation tax charge has been incurred in the
year as a result of the losses before taxation. The Group has £6.9m
(FY2021/22: £3.4m) of unutilised tax losses as at 31 March 2023.
Cash
The Group end of year cash balance for FY2022/23 was £2.5m (FY2021/22:
£6.7m). In line with our plans set out at IPO, we have invested during the
year in the development of our core technology platform and in the scale up
of our operational teams to support OEM customers.
Given the supply chain challenges experienced in the prior year, we have built
inventories to support expected sales of intelliGEN™ prototype hardware
during FY2023/24. Inventories have increased by £0.4m in the period.
Accounting Policies
The consolidated financial information has been prepared consistently
in accordance with UK-adopted International Accounting Standards.
Going Concern
The consolidated financial statements have been prepared on a going concern
basis.
The Directors have undertaken a comprehensive assessment to consider the Group
and the Company's ability to trade as a going concern for a period of twelve
months from the date of approving the financial statements. As of 31 August
2023, the Group had cash reserves of £1.2m, in addition to outstanding
debtors of £0.2m, inventories of £0.6m, corporation tax receivables due of
£0.4m and current liabilities of £0.2m.
The Directors have robustly tested the going concern assumption in preparing
these financial statements, taking into account the Group's liquidity position
as at 31 March 2023 and a number of severe but plausible downside scenarios,
which collectively would be considered remote. Absent of any additional
revenues, the Group has funds required to maintain current operations, through
to May 2024. The Group expects to secure new revenues and incomes within the
next 12 months which are more than sufficient to support approving the
financial statements as a going concern. The Directors acknowledge that
uncertainty may arise with respect to both the timing and quantum of
additional revenues and income. This indicates a material uncertainty which
may cast significant doubt upon the Group's and the Company's ability to
continue as a going concern.
The Directors do however remain confident in the business model and believe
the Group could be managed in a way to allow it to meet its ongoing
commitments and obligations through mitigating actions including cost saving
measures and securing alternative sources of funding should this be required.
On that basis, the Directors consider it is appropriate to prepare the
financial statements as a going concern and have not included the adjustments
that would result if the Group and Company were unable to continue as a going
concern.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2023
Year ended 31 March 2023 Year ended 31 March 2022
Note £'000 £'000
Revenue 4 921 824
Cost of sales (1,271) (664)
Gross (loss) / profit (350) 160
Other operating income 5 365 2,041
Administrative expenses (4,066) (4,100)
Loss from operations (4,051) (1,899)
Finance income 8 - 6
Finance expense 8 (5) (1,412)
Loss before taxation (4,056) (3,305)
Taxation 9 350 83
Loss for the year and total comprehensive loss for the year attributable to (3,706) (3,222)
the owners of the company
Basic and diluted loss per share (pence) 10 (2.7p) (3.3p)
The above results were derived from continuing operations.
There are no items of comprehensive income other than the loss for the period
and therefore, no statement of other comprehensive income is presented.
The accompanying notes form part of the financial statements.
Consolidated Statement of Financial Position
as at 31 March 2023
As at 31 March 2023 As at 31 March 2022
Note £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 144 54
Right-of-use assets 192 19
336 73
Current assets
Inventory 518 107
Trade and other receivables 11 1,285 1,192
Corporation tax receivable 478 128
Cash and cash equivalents 2,478 6,697
4,759 8,124
Total assets 5,095 8,197
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 14 139 139
Share premium account 15 10,421 10,414
Merger reserve 3,401 3,401
Share option reserve 450 351
Accumulated losses (10,862) (7,156)
Total equity 3,549 7,149
LIABILITIES
Non-current liabilities
Borrowings 13 - -
Lease liability, non-current 154 -
154 -
Current liabilities
Trade and other payables 12 1,203 886
Contract liability 153 150
Lease liability, current 36 12
1,392 1,048
Total liabilities 1,546 1,048
Total Equity and Liabilities 5,095 8,197
The accompanying notes form part of the financial statements.
Consolidated Statement of Changes in Equity
for the year ended 31 March 2023
Issued capital Share premium account Merger Share option reserve Accumulated losses Total
reserve
£'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 April 2021 - - 3,483 80 (3,934) (371)
Total comprehensive loss for the year - - (3,222) (3,222)
- -
Transactions with shareholders:
Share for share exchange 82 - (82) - - -
Issue of shares 57 11,094 - - - 11,151
Share issue costs - (680) - - - (680)
Share option charge - - - 271 - 271
As at 31 March 2022 139 10,414 3,401 351 (7,156) 7,149
Total comprehensive loss for the year - - (3,706) (3,706)
- -
Transactions with shareholders:
Issue of shares - 7 - - - 7
Share option charge - - - 99 - 99
As at 31 March 2023 139 10,421 3,401 450 (10,862) 3,549
Issued capital and share premium account reflect the shares issued by the
Company to date.
The merger reserve represents a reserve arising on consolidation, as a result
of accounting for the share for share exchange in December 2021.
Share option reserve relates to the cumulative charges for share options.
Accumulated losses reflects the cumulative comprehensive losses of the
Company.
Consolidated Statement of Cash Flows
for the year ended 31 March 2023
Year ended 31 March 2023 Year ended 31 March 2022
£'000 £'000
Cash flows from operating activities
Loss after tax for the year (3,706) (3,222)
Adjustments for:
Taxation (350) (83)
Depreciation of property, plant & equipment 38 9
Depreciation of right-of-use asset 36 32
Share option charge 99 271
Finance expense 5 1,412
Finance income - (6)
Equity settled transactions or services - 30
Tax credits received - 111
Changes in working capital:
Increase in inventories (411) (107)
Increase in trade and other receivables (93) (395)
Increase in trade and other payables 323 114
Net cash used in operating activities (4,059) (1,834)
Cash flows from investing activities
Purchase of property, plant and equipment (128) (53)
Finance income received - 6
Net cash used in investing activities (128) (47)
Cash flows from financing activities
Proceeds from borrowings - -
Payment of lease liabilities (34) (37)
Finance expense (5) -
Share issue (net of issue costs) 7 8,335
Net cash (used in) / generated from financing activities
(32) 8,298
Net (decrease) / increase in cash and cash equivalents (4,219) 6,417
Cash and cash equivalents at the beginning of the year 6,697 280
Cash and cash equivalents at the end of the year 2,478 6,697
Notes
1. General information and basis of preparation
Libertine Holdings PLC ("Libertine" or the "Company") is a company
incorporated and domiciled in the United Kingdom (registered number 13724783).
The Company was incorporated on 5 November 2021 in the United Kingdom and is a
public company limited by shares registered in England and Wales. The address
of the Company's registered office is 1 Coborn Avenue, Tinsley, Sheffield, S9
1DA.
The principal activity of the Company is that of investment holding. The
principal activity of the Group is the development of linear electrical
machines.
On 7 December 2021, the Company entered into agreements with all of the
shareholders of Libertine FPE Limited for a share for share exchange regarding
the Ordinary Shares in Libertine Holdings PLC and Ordinary Shares in Libertine
FPE Limited. As a result of this transaction, the ultimate shareholders in the
Company received shares in Libertine Holdings PLC in direct proportion to
their original shareholding in Libertine FPE Limited.
The transaction was accounted for as a capital reorganisation rather than a
reverse acquisition since it did not meet the definition of a business
combination under IFRS 3. In a capital reorganisation, the consolidated
financial statements of the Group reflect the predecessor carrying amounts of
Libertine FPE Limited with comparative information of Libertine FPE Limited
presented for all periods since no substantive economic changes have occurred.
The consolidated financial statements have been prepared in accordance with UK
adopted International accounting standards and UK Companies Act 2006.
The financial information for the year ended 31 March 2023 and the year ended
31 March 2022 does not constitute the Group's statutory accounts for those
periods. The statutory accounts for the period ended 31 March 2023 will be
delivered to the Registrar of Companies following the Group's Annual General
Meeting.
The auditors' report on the accounts for the year ended 31 March 2023 was
unqualified and did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006. The auditors' report highlighted the material uncertainty
described in note 2 below regarding going concern.
2. Going Concern
The consolidated financial statements have been prepared on a going concern
basis.
The Directors have undertaken a comprehensive assessment to consider the Group
and the Company's ability to trade as a going concern for a period of twelve
months from the date of approving the financial statements. As of 31 August
2023, the Group had cash reserves of £1.2m, in addition to outstanding
debtors of £0.2m, inventories of £0.6m, corporation tax receivables due of
£0.4m and current liabilities of £0.2m.
The Directors have robustly tested the going concern assumption in preparing
these financial statements, taking into account the Group's liquidity position
as at 31 March 2023 and a number of severe but plausible downside scenarios,
which collectively would be considered remote. Absent of any additional
revenues, the Group has funds required to maintain current operations, through
to May 2024. The Group expects to secure new revenues and incomes within the
next 12 months which are more than sufficient to support approving the
financial statements as a going concern. The Directors acknowledge that the
uncertainty may arise with respect to both the timing and quantum of
additional revenues and income. This indicates a material uncertainty which
may cast significant doubt upon the Group's and the Company's ability to
continue as going concern.
The Directors do however remain confident in the business model and believe
the Group could be managed in a way to allow it to meet its ongoing
commitments and obligations through mitigating actions including cost saving
measures and securing alternative sources of funding should this be required.
On that basis, the Directors consider it is appropriate to prepare the
financial statements as a going concern and have not included the adjustments
that would result if the Group and Company were unable to continue as a going
concern.
3. Accounting policies
The principal accounting policies adopted in preparation of the consolidated
financial statements of the Group have been applied consistently to all period
presented.
4. Revenue
Revenue arises from:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
North America 915 798
EMEA 6 26
921 824
In the year ended 31 March 2023, one customer generated more than 10% of total
revenue (31 March 2022: one). Revenue attributable to the customer was
£915,000 (31 March 2022: £798,000).
Revenue by category:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Engineering Services 921 824
921 824
The table below shows how much revenue recognised in the current year relates
to carried forward contract liabilities and unsatisfied performance
obligations resulting from the long-term contract with customers:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Grant income recognised that was included in the contract liability balance at
the beginning of the year
- 640
Aggregated amount of transaction price allocated to unsatisfied performance
obligation during in the year
153 150
5. Other Operating Income
Other operating income by category:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Grant income 365 2,041
365 2,041
Government Grants
Grant income relates to government grant schemes aimed at supporting
industrial research and development to bring new products and technologies to
market and support the long-term sustainable growth of businesses. The Group
enters into grant schemes to provide funding towards the further development
of its technology platform.
6. Operating segments
IFRS 8 requires that operating segments be identified on the basis of internal
reporting and decision-making. The Company is operated as one business by its
executive team, with key decisions being taken by the same leaders
irrespective of the geography where work for clients is carried out.
Management therefore consider that the Company has one operating segment. As
such, no additional disclosure has been presented under IFRS 8.
7. Reconciliation of GAAP to non-GAAP measures
The Group uses a number of 'non-GAAP' figures as comparable key performance
measures, as they exclude the impact of items that are non-cash items and also
items that are not considered part of ongoing underlying trade. The Group's
'non-GAAP' measures are not defined performance measures in IFRS. The Group's
definition of the reporting measures may not be comparable with similar titled
performance measures in other entities.
Adjusted earnings before interest, tax, depreciation and amortisation
("EBITDA") is calculated as follows:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Loss from operations (4,051) (1,899)
Add back:
Depreciation of property, plant and equipment 38 9
Deprecation of lease asset 36 32
EBITDA (3,977) (1,858)
Add back:
Operating costs of exceptional nature - 984
Adjusted EBITDA (3,977) (874)
Operating costs of an exceptional nature have been excluded as they are not
considered part of the underlying trade. Operating costs of an exceptional
nature in the prior year include professional fees of £753,000 in connection
with the IPO and share-based payment charges of £231,000 on acceleration of
the schemes as a result of them vesting at the IPO date.
Adjusted operating loss is calculated as follows:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Loss from operations (4,051) (1,899)
Add back:
Operating costs of exceptional nature - 984
Adjusted loss from operations (4,051) (915)
Adjusted loss after tax is calculated as follows:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Loss after tax (3,706) (3,222)
Add back:
Operating costs of exceptional nature - 984
Movement in fair value of convertible loan note (note 8) - 1,410
Adjusted loss after tax (3,706) (828)
Free cash flow conversion is calculated as follows:
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Adjusted loss from operations (4,051) (915)
Adjusted for:
Depreciation of property, plant and equipment 38 9
Deprecation of lease asset 36 32
Share option charges 99 40
Net working capital change (182) (390)
Purchase of PPE (128) (53)
Underlying cash flow from operations (4,188) (1,277)
Underlying operating cash flow conversion 103% 140%
Net interest paid (5) 6
Income tax received - 111
Payment of lease liabilities (34) (37)
Free cash flow (4,227) (1,197)
Adjusted EBITDA (3,977) (874)
Free Cash Flow Conversion 106% 137%
8. Finance income and expense
Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Interest receivable - 6
Interest payable:
Movement in fair value of convertible loan note - (1,410)
Interest on lease liability (5) (2)
(5) (1,412)
(5) (1,406)
9. Taxation
Income taxes recognised in profit or loss Year to 31 March 2023 Year to 31 March 2022
£'000 £'000
Current tax
UK tax credit for the year 350 83
Deferred tax - -
Total income tax credit recognised 350 83
Loss on ordinary activities before tax (4,056) (3,305)
Loss on ordinary activities multiplied by normal rate of tax (19%) 771 628
Effects of:
Non-deductible expenses (18) (413)
R&D tax credit 350 83
Share based payments (19) 51
Deferred tax asset not recognised (734) (266)
Tax credit for the year 350 83
The Group was not liable for corporation tax during the past two years due to
taxable losses being sustained in each of the years reported.
The Group has not recognised the deferred tax assets as the business is
developing its products. When there is clear visibility of profits, the Group
will recognise the deferred tax assets to the extent that sufficient taxable
income will be available. Accumulated tax losses carried forward were £6.9m
(31 March 2022: £3.4m).
On 3 March 2021, the 2021 UK Budget announced an increase to the corporation
tax rate from 19% to 25% effective from April 2023. This was substantively
enacted on 24 May 2021.
10. Earnings per share
Year to 31 March 2023 Year to 31 March 2022
Basic loss per share
Loss attributable to equity shareholders of the parent (£'000) (3,706) (3,222)
Weighted average number of shares in issue 139,182,846 97,417,339
Basic loss per share (pence) (2.7p) (3.3p)
Basic loss per share is based on the weighted average number of ordinary
shares in issue during the period. Diluted loss per share would assume
conversion of all potentially dilutive ordinary shares arising from the share
schemes detailed in note 14. Due to the losses in both periods there are no
potentially dilutive ordinary shares, and therefore there is no difference
between the basic and diluted loss per share.
The weighted average number of shares uses the number of shares in issue on
admission to AIM on 23 December 2021. This has been applied retrospectively to
the number of shares in issue at 31 March 2022 and the metric has been
restated to ensure that the adjusted earnings per share figures
are comparable over the two periods.
Adjusted earnings per share
The calculation of adjusted earnings per share is based on the adjusted loss
after tax, as presented in note 7. Adjusted loss per share figures are given
to exclude the effects of exceptional items and pre-reorganisation finance
costs, all net of taxation, and are considered to show the underlying
performance of the Group.
Year to 31 March 2023 Year to 31 March 2022
Adjusted loss per share
Adjusted loss after tax (note 7) (£'000) (3,706) (828)
Weighted average number of shares in issue 139,182,846 97,417,339
Basic loss per share (pence) (2.7p) (0.8p)
11. Trade and other receivables
As at 31 March 2023 As at 31 March 2022
£'000 £'000
Current
Trade receivables - gross 507 637
Provision for impairment of trade receivables - -
507 637
Other Debtors 53 32
VAT Debtor 203 205
Accrued income 288 -
Prepayments 234 318
1,285 1,192
The Group had no past due trade receivables as at 31 March 2023 (31 March
2022: £nil).
Trade receivables are non-interest bearing and receivable under normal
commercial terms. The Directors consider that the carrying amount of trade and
other receivables approximates to their fair value and that no impairment is
required at the reporting dates. Trade and other receivables represent
financial assets and are assessed for impairment on an expected credit loss
model. Therefore, there is no expected credit loss provision for impairment at
31 March 2023 (31 March 2022: £nil).
The impairment loss recognised in the income statement for the period in
respect of expected credit losses was £nil (2022: £nil).
12. Trade and other payables
As at 31 March 2023 As at 31 March 2022
£'000 £'000
Trade payables 773 426
Tax and social security payable 40 30
Accruals and provisions 390 430
1,203 886
The fair values of the Group's trade and other payables are considered to
equate to their carrying amounts. Accruals and provisions include an onerous
contract provision of £109,000 (31 March 2022: £nil) in respect of expected
losses on contracts entered into by the Group.
13. Borrowings
Movement in net borrowings:
As at 31 March 2023 As at 31 March 2022
£'000 £'000
Borrowings at 1 April - 694
Convertible loan notes issued - -
Movement in fair value of convertible loan note - 1,410
Conversion of loan notes - (2,104)
- -
In July 2020 the Group issued £600,000 convertible loan notes to four
investors with a nominal value of £600,000. The loan notes had a term until
July 2023 and a coupon rate of 8%. The loan notes automatically convert to
shares in the Company upon a Listing. Had conversion not occurred the loan
notes were repayable in full in July 2023. The loan notes were treated as
non-current borrowings to match the financial instrument.
On 23 December 2021, the Company issued 10,523,630 Ordinary Shares in
Libertine Holdings PLC in settlement of the convertible loan note.
14. Share Capital
Ordinary Shares (£0.001)
Number £
At 1 April 2021 - -
Share for share exchange 82,411,310 82,411
Issued 56,407,700 56,408
At 31 March 2022 138,819,010 138,819
Issued 400,000 400
At 31 March 2023 139,219,010 139,219
On 7 December 2021, the Group underwent a reorganisation in which Libertine
Holdings PLC became the ultimate parent undertaking of the Group. The
reorganisation was performed via a share for share exchange, whereby each
previous Ordinary Share in Libertine FPE Limited was exchanged for an Ordinary
Share in Libertine Holdings PLC.
On 16 December 2021, the Company issued 154,070 Ordinary Shares in Libertine
Holdings PLC for an equity settled transaction valued at £30,000.
On 23 December 2021, the Company issued 10,523,630 Ordinary Shares in
Libertine Holdings PLC in settlement of the convertible loan note. On the same
day the Company issued 45,000,000 Ordinary Shares in Libertine Holdings PLC
for £0.20 per share as part of its admission to AIM.
On 4 March 2022, the Company issued 730,000 Ordinary Shares in Libertine
Holdings PLC for £0.02 per share to settle share options. On 3 May 2022, the
Company issued 400,000 Ordinary Shares in Libertine Holdings PLC to settle
share options.
15. Share Premium Account
£'000
At 1 April 2021 -
Issued 11,094
Share issue costs (680)
At 31 March 2022 10,414
Issued 7
Share issue costs -
At 31 March 2023 10,421
Share premium is the amount subscribed for share capital in excess of nominal
value.
Details of the share transactions are included in note 14. The Company
incurred £680,000 of professional fees in connection with its share issue.
16. Share-based payments
Since 2017, before the incorporation of Libertine Holdings PLC, options have
been granted by Libertine FPE Limited to Directors, employees and suppliers to
purchase Ordinary Shares. Libertine FPE Limited has issued both EMI and
unapproved share options. The options were due to vest over a period of up to
ten years from grant date and were exercisable in the event of a listing.
All options had an exercise price of £0.20 when issued. In December 2021, all
outstanding options in Libertine FPE Limited were replaced by options in
Libertine Holdings PLC as part of the Group reorganisation ahead of the IPO.
In advance of the share for share exchange and to ensure parity of the share
options with Ordinary Shares in issue, the number of options in issue were
increased by a factor of ten, with the exercise price reducing to £0.02 per
share. All other option terms remained the same and as such there was no
difference in fair value at the options replacement date.
In February 2023, Libertine Holdings PLC implemented a new Long Term Incentive
Plan ("LTIP") for all employees. The initial number of options issued to all
employees of 7,182,314 are subject to the achievement of performance
conditions in respect of the three financial years to 31 March 2025.
Performance conditions are aligned to shareholder value creation and focus on
key financial and operational metrics, consistent with the Group's investment
case. The number of options achieved under the scheme will be determined by
the Remuneration Committee at the end of each financial year, and a maximum of
one third of the allocation can be achieved each year. The scheme is subject
to both good leaver / bad leaver provisions and malus / clawback provisions. A
one-year retention period for 50% of vesting options applies at the vesting
date.
The LTIP was issued as an EMI scheme. The EMI scheme is open to all qualifying
employees who are an employee within the Group working 25 hours per week, or
if less, at least 75% of their working time.
Details of the option plans are as follows:
As at 31 March 2023 As at 31 March 2022
Outstanding at beginning of year 6,908,120 482,812
Granted 7,182,314 536,000
Forfeited - (255,000)
Unachieved (1,844,397) -
12,246,037 763,812
December 2021 share reorganisation - 6,874,308
12,246,037 7,638,120
Exercised (400,000) (730,000)
Outstanding at end of year 11,846,037 6,908,120
The weighted average exercise price on outstanding options at 31 March 2023 is
£0.01 (31 March 2022: £0.02).
The expected volatility is based on the historical volatility (based on the
share price) of comparator companies with publicly available share prices. The
risk-free interest rate is based on the average return on ten-year UK gilts.
Assumed retention of the options was 100%.
The fair value of each option granted was estimated on the grant date using
the Black-Scholes option-pricing model with the following assumptions:
LTIP Scheme Pre-IPO EMI Scheme Pre-IPO Unapproved Scheme
Fair values at grant dates (per share) £0.18 £0.28 - £0.55 £0.28 - £0.46
Share price at grant dates £0.195 £0.47 - £0.64 £0.47 - £0.64
Exercise price £0.001 £0.02 £0.02
Expected volatility 67% 70% 70%
Option life (expected weighted average life) 3 years 1 - 10 years 0 - 2.8 years
Expected dividend 0% 0% 0%
Risk-free interest rate (based on government bonds)
1.61% 1.12% 1.12%
The total share option charge in the period was £99,000 (FY22: £271,000).
£231,000 of the charge in the prior period was on acceleration of options on
vesting, as a result of the IPO. This charge has been accounted for as an
operating cost of an exceptional nature.
17. Events after the balance sheet date
No matters have arisen since the balance sheet date.
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