REG - Light Science Tech. - Half-year Report
31/07/2024 07:00
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RNS Number : 4732Y Light Science Tech. Holdings PLC 31 July 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) 596 / 2014 WHICH FORMS PART OF UNITED KINGDOM LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
Light Science Technologies Holdings plc
("LSTH", "Light Science", the "Company" or the "Group")
Interim Results
Continued Growth in Revenue & Margin
Light Science Technologies Holdings plc (AIM: LST), comprising three
divisions: controlled environment agriculture ("CEA"); contract electronics
manufacturing ("CEM") and passive fire protection ("PFP"), announces its
unaudited interim results for the six months ended 31 May 2024 (the "Period").
Financial Highlights
· Revenue of £5.2m for the Period, up 19.3% (H1 2023: £4.4m)
· Gross margins increased to 26.6%, a rise of 27.3% (H1 2023: 20.9%)
· Loss before tax reduced by 58.4% to £0.3m (H1 2023: £0.8m)
· Agreed new terms with Close Brothers for £850,000 Group debt
facility which will enable further growth capabilities
o Group cash at 31 May 2024 was £1.05m with additional undrawn funds
availability of approximately £0.5m under debt facilities with Close
Brothers.
Operational Highlights
· CEM division won key contract and expanded into new sector with
strong prospects of follow-on revenues
· CEA landscape materially improved
o Expansion of international reach with South African AgriLogiq distributor
agreement
o SensorGrow installed with Dyson Farming as part of its "TRIP" project
o Tomtech synergies being successfully leveraged
· First £600k PFP division, Injecta Fire Barrier contract commenced
o Strong margin and cash-generative operations expected to underpin short to
medium term revenue growth and balance sheet strength
· Graham Cooley and Richard Mills appointed to the Board, adding
significant City experience and international reach
Post-Period Highlights
· CEM division expects record breaking year in pest control following
recent committed orders received
· PFP division continues to progress rapidly
o Secured £750,000 contract with a blue-chip client
o Acquired new machinery to expand capacity
o Shaun Tasker appointed Divisional Managing Director
Online Analyst Briefing: 9.30am, Friday 2 August 2024
An online briefing for Analysts will be held at 9.30am on Friday 2 August
2024. Analysts interested in attending should contact Walbrook PR
on lst@walbrookpr.com or 020 7933 8780.
Investor Presentation: 4.00pm, Monday 5 August 2024
Management will be providing a presentation and hosting an investor Q&A
session on the Company's results and future prospects at 4.00pm on Monday 5
August 2024. Investors can sign up for free and register to meet LSTH via the
following link:
https://www.investormeetcompany.com/light-science-technologies-holdings-plc/register-investor
(https://www.investormeetcompany.com/light-science-technologies-holdings-plc/register-investor)
Questions can be submitted pre-event via the platform or by
emailing lst@walbrookpr.com, or in real time during the presentation via the
"Ask a Question" function.
Institutional Investor Meetings:
The Company will be in London for meetings during the week commencing 5 August
2024. If you would like to meet with management, please contact
aimeemccusker@oberoninvestments.com.
Simon Deacon, CEO of LSTH, commented: "In the first half of 2024, the
structural changes made in the business began to take hold and we are seeing
accelerated growth in both revenues and margins. With this progress, our
losses are narrowing and therefore we are confident of achieving break even
with continued progression across our divisions.
"Strategically, we are better positioned as a Group than we ever have been.
CEM continues to provide robust revenues and expands into new markets, PFP is
adding strong margin revenues in a large addressable market that benefits from
regulatory tailwinds, and we continue to establish a global footprint in CEA;
a market that we believe underpins exponential long-term growth opportunities
for LSTH.
"While some hurdles remain, the landscape for the Group is steadily improving.
CEM, recently positioned to handle larger volume projects, stands to benefit
from emerging market trends. PFP is targeting an enormous domestic market,
which is facing increasing governmental pressure, as the less invasive,
lower cost solution and within CEA we are increasingly reminded of the global
pressures that are forcing us to re-think how we approach food production. It
is the Board's view that both the short and long term prospects for the Group
are very positive."
For additional information please contact:
Light Science Technologies Holdings plc www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com/)
Simon Deacon, Chief Executive Officer via Walbrook PR
Jim Snooks, Chief Financial Officer
Andrew Hempsall, Chief Operating Officer
Strand Hanson Limited (Nominated & Financial Adviser) Tel: +44 (0) 20 7409 3494
Ritchie Balmer / James Harris / Rob Patrick
Oberon Capital (Broker) Tel: +44 (0) 203 179 5300
Mike Seabrook / Nick Lovering
Walbrook PR Ltd (Media & Investor Relations) Tel: +44 (0)20 7933 8780 or lst@walbrookpr.com (mailto:lst@walbrookpr.com)
Nick Rome / Joe Walker
Notes to Editors:
About Light Science Technologies Holdings
plc (www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com/) )
Light Science Technologies Holdings plc operates through three divisions:
controlled environment agriculture ("CEA"); contract electronics manufacturing
("CEM"); and passive fire protection ("PFP"). The company is involved in the
design, manufacturing, and installation of products and customized solutions
spanning various industry sectors, including commercial horticulture, pest
control, lighting, audio, gas detection, and fire protection. With a focus on
addressing global challenges related to food security, climate change, and
fire protection, the Group is committed to developing robust solutions in
these rapidly growing market sectors.
LSTH is the holding company for Light Science Technologies Ltd ("Light Science
Technologies") and Tomtech (UK) Limited ("Tomtech") in the CEA division; UK
Circuits and Electronics Solutions Limited ("UK Circuits") in the CEM
division; and LSTH IFB Limited ("LSTH IFB") in the PFP division.
Controlled Environment Agriculture
The Group's tailored solutions encompass control systems, grow lights, sensor
technology, venting, and irrigation systems, catering to both UK and global
customers. Key markets include indoor, vertical, glasshouses, polytunnels, and
medicinal farming. Driving factors comprise global food and water shortages, a
growing population, government policies promoting sustainable growth methods,
heightened scrutiny of food production's impact on climate change, and a shift
away from processed foods. Key markets span the Americas, Australasia, and
select locations in the Middle East.
The sensorGROW technology enables real-time monitoring of essential air zone
growing factors such as carbon dioxide, air humidity, air pressure, air
temperature, and light. In development, it aims to extend monitoring to soil
temperature, soil moisture, and soil electroconductivity. This empowers
farmers to enhance resource management, saving costs on water, nutrients,
fertilizers, and energy, while simultaneously increasing yields and
cultivating healthier crops. Learn more here
https://lightsciencetech.com/sensorgrow/
(https://lightsciencetech.com/sensorgrow/) . The nurturGROW sustainable grow
lighting product range, applicable to greenhouses, vertical farming,
polytunnels, and medicinal plants, addresses a robust market with an
anticipated global worth exceeding US$6.5 billion by 2026. Explore solutions
here https://lightsciencetech.com/solutions/greenhouse/
(https://lightsciencetech.com/solutions/greenhouse/)
Through Tomtech, the Group stands out as a UK leader in control systems for
commercial greenhouses and polytunnels. Tomtech enables growers in optimizing
and automating cultivation environments, leading to superior crop growth. The
product range includes control systems, software, irrigation, lighting,
sensors, and venting, applicable across various crops, ultimately improving
yields and profitability. Discover more here https://www.tomtech.co.uk/
(https://www.tomtech.co.uk/)
Contract Electronics Manufacturing (https://www.ukcircuits.co.uk/
(https://www.ukcircuits.co.uk/) )
UK Circuits serves as the Group's profitable and revenue-strong CEM-focused
division. It excels in designing, procuring, and manufacturing high-quality
CEM products, with a specialization in Printed Circuit Boards. These products
find application across diverse sectors such as audio, automotive,
electronics, gas detection, lighting, pest control, telecommunications, and,
more recently, in the CEA market.
Passive Fire Protection (https://injectafirebarrier.com/
(https://injectafirebarrier.com/) )
LSTH IFB offers a practical and cost-effective solution to rectify
non-compliant public and private buildings, spanning residential, commercial,
and industrial sectors, with regard to fire safety regulations-a challenge
addressed by a £5.1 billion allocation from the UK government. Serving as the
UK's premier independent approved installer, LSTH IFB utilizes the
ground-breaking Injectaclad fire-resistant graphite barrier system. This
system is retroactively installed within building cavities, reinstating
fire-resistant performance and containing the spread of fire and smoke
compliant with regulatory requirements. This innovative solution stands out as
an appealing alternative to the more costly and disruptive method of removing
external facades and installing traditional fire barriers. With a proven track
record in the passive fire protection market and a robust sales pipeline, LSTH
IFB targets a UK market potentially valued at up to £50 billion*.
* Estimators price cladding replacement at 10 times government budget
(theconstructionindex.co.uk)
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.theconstructionindex.co.uk_news_view_estimators-2Dprice-2Dcladding-2Dreplacement-2Dat-2D10-2Dtimes-2Dgovernment-2Dbudget&d=DwMGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=k3ztxpiL9GaLwCCGU9fPymgPVcqvYBuqTjjYyTHwiDE&m=FkrfCU8L8JbNSpJy2iOqi_ufsIhPkBWqki20NIFJFw75Xk8uHWT1vpic2OJY0ioQ&s=PR1_EBbDTB9ZM08WpCO_9ThUQ0hELxP6lsaT57zpanA&e=)
Chief Executive's Report
Financial & Operating review
This was a positive period for the Company, with strong progress across all
divisions. The combination of new contracts, the bedding in of recent
acquisitions and current market trends underpinning solid revenue growth and
positive movement in all key metrics.
Group revenue for the six months to 31 May 2024 increased by 19.3% to £5.2m
(HY23: £4.4m). This has been achieved through a combination of organic and
acquisitive growth with £4.5m revenue contributed from the Contract
Electronics Manufacturing ("CEM") division, representing 4.2% growth, £0.3m
from the newly integrated Passive Fire Protection ("PFP") division and £0.4m
from the Controlled Environment Agriculture ("CEA") division.
Group performance has benefitted from the growth in the CEA division and
particularly the PFP division, both of these divisions typically commanding
higher margins than the CEM division, the latter of which has also seen a 4%
increase in its gross profit margin, when compared with the full prior year.
This has resulted in the Group gross profit margin increasing to 26.6% for the
reported period, from 20.9% for the first six month of FY23 and from 23.4% for
the full prior year.
The CEM division continues to deliver steadily improving revenues, with key
contracts won during the period including a new client in the sports
entertainment segment. An initial order of £130,000 was followed by another
of the same value post period end and there are very strong prospects of
follow-on revenues in this new sector.
The CEA division is now successfully leveraging the synergies of the
acquisition of Tomtech (UK) Limited in September 2023, and has made a
significant start to its strategy of signing global distribution partnerships
to expand its global reach. An exclusive distribution agreement with AgriLogiq
in South Africa was signed in May 2024, further enhancing the Company's global
reach and allowing the Company to focus on low cost and low risk entry into
expected high-growth markets with established partners. This strategy is
proving fruitful - with the Company already quoting for a significant sized
project in South Africa while the Company remains in advanced talks with a
number of potential partners globally.
Additionally, SensorGrow's first outdoor trials took place in open fields
in partnership with Dyson Farming as part of the Transformative Reduced Input
Potatoes ("TRIP") project - providing exposure to the open agriculture sensor
market, expected to be worth over $3.84 billion by 2028**, while also
providing scope for the Company to grow recurring revenues via hardware and
software sales.
The PFP division, formed following the acquisition of the trade and assets of
Injecta Fire Barrier in November 2023, has made a positive start with its
first contract valued at £600,000 and has secured a further contract worth
£750,000 from a blue-chip client, shortly after the end of the reported
period. Margins are strong and the near-term cash-generative nature of its
operations is expected to underpin short to medium term revenue growth and
balance sheet strength. To best position the division to capitalise on the
opportunity pipeline, Shaun Tasker was appointed Managing Director of LSTH IFB
Limited in June, bringing over 20 years of commercial experience.
The Board continues to carefully monitor overhead costs, such that despite the
additional costs derived from the acquired businesses, Group overheads remain
in line with the equivalent period last year. The continued drive for overhead
cost control coupled with increased gross profit generation, led to a positive
Group EBITDA* for the six months to 31 May 2024 of £28,000 (HY23: negative
EBITDA £494,000), being a very significant step towards achieving Group
profitability.
The Group has continued its planned programme of investment in the period.
Capital and other expenditure in the CEM division has been introduced to
automate and expand capacity at the Group's manufacturing site in Manchester
and progress to gaining further quality accreditations, to open new market
opportunities. Capital expenditure has been underlaid by finance leases.
In May 2024, the Group completed an enhancement of its debt facilities with
its long-standing lender, Close Brothers, to provide group-wide financing
underpinned by an additional £850,000 facility, which will be used amongst
other areas, to enable the Group to exploit future growth initiatives.
Group cash at 31 May 2024 is £1.05m with additional undrawn funds
availability of c£0.5m under debt facilities with Close Brothers.
Board Changes
In March 2024 Graham Cooley was appointed as Non-Executive Chairman, and
Richard Mills, previously a consultant to the Company, was appointed as
Independent Non-Executive Director. Myles Halley and Robert Naylor both
stepped down from their respective roles as Non-Executive Chairman and
Non-Executive Director.
Outlook
The CEM division is benefiting from recent positioning to handle larger volume
projects and exploit wider market trends, including the move away from Far
East manufacturing - with the Company expecting to see increasing demand for
local manufacturing in the UK. Its current committed forward order book stands
at £4.3m. Whilst the CEM division has historically provided platform
revenue and gross profit generation for the Group, the Board expects to see a
re-balancing of divisional contributions through the second half of FY24 and
beyond.
As previously highlighted, the CEA landscape is materially improved, and the
Board is confident that it remains the most significant long-term growth
opportunity for the Group - with global trends and demand for localised and
sustainable growing solutions and food security becoming increasingly
prevalent while the Company's broadened product offering and scope for cross
selling provide scope for increased revenues from existing and new clients.
The focus is currently on growing the international reach of the division,
selling into the regions in most immediate need of innovative control systems
to combat declining global growing conditions. Negotiations with targeted
global partners are currently in progress and the Company expects to complete
further regional strategic distribution partnerships in due course. Current
committed forward order book stands at £143,000.
PFP represents the most immediate route to cash generation and significant
revenue growth, targeting the growing fire safety retrofit market in the UK,
which has been estimated to be valued up to a potential of £50 billion***.
Since the inclusion of the PFP division into the Group in November 2023, it
has secured contracts totalling over £1.35m and has an active quoted sales
pipeline of £6.9m with an opportunity for follow on work with its live
contracts. Current committed forward orders stand at £740,000. With our
recently strengthened team and expanded operational capacity as well as
growing Government pressure for remediation works, the division is well placed
to rapidly scale.
Furthermore, post period, in order to meet the increased levels of demand
within this division, the Company has invested in a third Injecta Pump -
enhancing capacity and its ability to service its growing customer base -
underpinning the potential to generate exponential revenues. The Company has
also strengthened its subcontractor team, which now consists of two site
managers and up to 12 operatives.
The Company aims to take advantage of growth drivers across all three of its
divisions. With a healthy, committed orderbook, growing revenues and strong
progress towards profitability, management looks forward to providing further
updates as it delivers on its growth strategy.
*EBITDA is not presented within the Company's financial statements but is
defined as Operating Profit/(Loss) add back Depreciation and Amortisation, see
note 3
** Agriculture Sensor Market Size, Share, Growth And Industry Forecast
2024-2034 (thebusinessresearchcompany.com)
(https://www.thebusinessresearchcompany.com/report/agriculture-sensor-global-market-report)
*** Estimators price cladding replacement at 10 times government budget
(theconstructionindex.co.uk)
(https://www.theconstructionindex.co.uk/news/view/estimators-price-cladding-replacement-at-10-times-government-budget)
Simon Deacon
Chief Executive Officer
30 July 2024
Consolidated statement of comprehensive income
For the six months ended 31 May 2024
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 May 2024 31 May 2023 30 November 2023
Notes £ £ £
Revenue 3 5,199,802 4,358,720 9,295,160
Cost of sales (3,818,354) (3,446,008) (7,122,419)
Gross profit 1,381,448 912,712 2,172,741
Administrative expenses (1,621,819) (1,634,438) (3,026,483)
Non-recurring administrative expenses - - (255,363)
Other operating income 53,743 41,406 249,197
Operating loss (186,628) (680,320) (859,908)
Finance costs (147,145) (128,961) (279,077)
Loss on ordinary activities before taxation (333,773) (809,281) (1,138,985)
Income tax credit 4 18,430 50,887 213,376
Loss for the period and total comprehensive income for the period (315,343) (758,394) (925,609)
Attributable to:
The owners of the company (332,327) (770,938) (953,164)
Non-controlling interests 16,984 12,544 27,555
(315,343) (758,394) (925,609)
Loss per share
Basic and diluted (pence) 7 (0.10) (0.38) (0.36)
Consolidated balance sheet
As at 31 May 2024
Unaudited Unaudited Audited
as at 31 May as at 31 May as at 30 November
2024 2023 2023
Notes £ £ £
Assets
Non-current assets
Goodwill 920,867 - 920,867
Intangible assets 1,616,064 836,033 1,560,130
Property, plant and equipment 778,096 718,296 854,512
Right-of-use assets 433,171 560,145 423,881
3,748,198 2,114,474 3,759,390
Current assets
Inventories 1,207,300 1,848,193 1,399,597
Trade and other receivables 3,003,537 2,071,314 2,154,961
Corporation tax receivable 49,394 237,927 37,897
Cash and cash equivalents 1,049,890 1,002,846 981,357
5,310,121 5,160,280 4,573,812
Total assets 9,058,319 7,274,754 8,333,202
Liabilities
Current liabilities
Borrowings 5 (1,711,373) (1,626,242) (1,779,712)
Trade and other payables (2,379,890) (2,158,789) (1,878,435)
Consideration payable (449,618) - (364,580)
Lease liabilities (115,213) (158,421) (101,240)
(4,656,094) (3,943,452) (4,123,967)
Non-current liabilities
Borrowings 5 (752,222) (288,889) (180,555)
Trade and other payables (321,813) (135,179) (240,017)
Consideration payable (871,313) - (1,017,406)
Lease liabilities (291,271) (275,354) (303,978)
(2,236,619) (699,422) (1,741,956)
Total liabilities (6,892,713) (4,642,874) (5,865,923)
Net assets 2,165,606 2,631,880 2,467,279
Capital and reserves attributable to the owners of the company
Share capital 6 3,330,055 3,330,055 3,330,055
Share premium account 5,520,243 5,520,243 5,520,243
Share based payment reserve 560,284 600,000 546,614
Warrant reserve 159,593 159,593 159,593
Merger reserve (3,478,435) (3,478,435) (3,478,435)
Retained earnings (4,312,972) (3,854,419) (3,980,645)
1,778,768 2,277,037 2,097,425
Non-controlling interests 386,838 354,843 369,854
Total equity 2,165,606 2,631,880 2,467,279
Statements of changes in equity
For the six months ended 31 May 2024
Share premium Share based payment Warrant
Share capital account reserve reserve
Consolidated £ £ £ £
At 30 November 2022 1,741,500 5,654,011 726,000 159,593
Transactions with shareholders
Shares issued during the period 1,588,555 (133,768) - -
Share based payment - lapsed options - - (126,000) -
Total transactions with shareholders 1,588,555 (133,768) (126,000) -
Comprehensive income
Loss for the period - - - -
Total comprehensive income - - - -
Unaudited balance at 31 May 2023 3,330,055 5,520,243 600,000 159,593
Transactions with shareholders
Share based payment - - 2,614 -
Share based payment - lapsed options - - (56,000) -
Total transactions with shareholders - - (53,386) -
Comprehensive income
Loss for the period - - - -
Total comprehensive income - - - -
Audited balance at 30 November 2023 3,330,055 5,520,243 546,614 159,593
Transactions with shareholders
Share based payment - - 13,670 -
Total transactions with shareholders - - 13,670 -
Comprehensive income
Loss for the period - - - -
Total comprehensive income - - - -
Unaudited balance at 31 May 2024 3,330,055 5,520,243 560,284 159,593
Merger reserve Retained earnings Non- controlling interests Total equity
Consolidated £ £ £ £
At 30 November 2022 (3,478,435) (3,209,481) 342,299 1,935,487
Transactions with shareholders
Shares issued during the period - - - 1,454,787
Share based payment - lapsed options - 126,000 - -
Total transactions with shareholders - 126,000 - 1,454,787
Comprehensive income
Loss for the period - (770,938) 12,544 (758,394)
Total comprehensive income - (770,938) 12,544 (758,394)
Unaudited balance at 31 May 2023 (3,478,435) (3,854,419) 354,843 2,631,880
Transactions with shareholders
Share based payment - - - 2,614
Share based payment - lapsed options - 56,000 - -
Total transactions with shareholders - 56,000 - 2,614
Comprehensive income
Loss for the period - (182,226) 15,011 (167,215)
Total comprehensive income - (182,226) 15,011 (167,215)
Audited balance at 30 November 2023 (3,478,435) (3,980,645) 369,854 2,467,279
Transactions with shareholders
Share based payment - - - 13,670
Total transactions with shareholders - - - 13,670
Comprehensive income
Loss for the period - (332,327) 16,984 (315,343)
Total comprehensive income - (332,327) 16,984 (315,343)
Unaudited balance at 31 May 2024 (3,478,435) (4,312,972) 386,838 2,165,606
Consolidated cash flow statement
For the six months ended 31 May 2024
Unaudited Unaudited Audited
Six months ended 31 May Six months ended 31 May Year ended 30 November
2024 2023 2023
£ £ £
Cash flows from operating activities Loss after tax (315,343) (758,394) (925,609)
Adjustments for:
Depreciation of tangible assets 80,189 60,475 115,371
Depreciation of right-of-use assets 52,730 110,025 187,318
Amortisation and impairment of intangible assets 81,991 15,757 245,618
(Profit)/Loss on disposal of tangible and right-of-use assets (2,771) - 30,278
Foreign exchange loss 2,766 - 2,185
Unwind of discount on consideration 13,945 - 7,496
Interest payable - loan and leases 47,593 128,961 103,219
Taxation and RDEC credit (54,223) (56,345) (266,112)
Share based payment 13,670 - 2,614
Changes in working capital:
Decrease / (increase) in inventory 192,297 (264,844) 207,925
Decrease / (increase) in trade and other receivables (812,781) 498,337 492,087
(Decrease) / increase in trade and other payables 580,485 103,047 (209,934)
Cash used in operations (119,452) (162,981) (7,544)
Tax (paid) / received 6,932 (3,787) 183,111
Net cash outflow from operating activities (112,520) (166,768) 175,567
Cash flows from investing activities
Purchase of property, plant and equipment (4,467) (853) (18,809)
Proceeds from disposal of property, plant and equipment 3,465 - 27,456
Acquisition of subsidiaries, net of cash acquired - - 142,507
Payment of deferred consideration (75,000) - -
Purchase of intangible fixed assets (137,924) (143,447) (592,405)
Purchase of right-of-use assets (7,862) - (16,172)
Net cash outflow from investing activities (221,788) (144,300) (457,423)
Cash flows from financing activities
Capital issued (net of issue costs) - 1,454,787 1,454,787
Proceeds from new loans 850,000 - -
Repayment of loans (108,333) (108,333) (216,667)
Lease payments (52,892) (112,547) (234,126)
Interest paid on leases (13,411) (16,118) (33,155)
Net drawdown on working capital facilities (238,339) (381,705) (228,235)
Interest paid on loans and borrowings (34,184) (112,843) (70,064)
Net cash inflow/(outflow) from financing activities 402,841 723,241 672,540
Increase in cash and cash equivalents 68,533 412,173 390,684
Cash and cash equivalents including overdrafts at the start of the period 981,357 590,673 590,673
Cash and cash equivalents including overdrafts at the end of the period 1,049,890 1,002,846 981,357
Notes to the financial statements
1. General Information
Light Science Technologies Holdings plc was incorporated in England on 13
January 2020 as a private company limited by shares. On 8 July 2021, the
Company re-registered as a public limited company. The company's equity is
admitted to trading on AIM. The address of its registered office is The
Mills, Canal Street, Derby, DE1 2RJ.
The principal activity of the Group is the development and manufacturing of
electronic boards; the development and manufacturing of lighting and
technology products for the Controlled Environment Agriculture ("CEA") sector;
and the installation of retrospective cavity barriers in wall and floor
constructions.
This condensed consolidated half-yearly financial information ("interim
results") was approved by the directors for issue on 30 July 2024.
The financial information in these interim results is that of the holding
company and all of its subsidiaries. It has been prepared in accordance with
UK-adopted international accounting standards. The accounting policies applied
by the Group in the preparation of these consolidated financial statements are
consistent with those applied by the Group in its latest audited financial
statements for the year ended 30 November 2023, a copy of which can be found
here: https://lightsciencetechnologiesholdings.com/investors/
(https://lightsciencetechnologiesholdings.com/investors/) . These policies
have been applied consistently to all periods presented.
The financial information presented herein does not constitute full statutory
accounts under section 434 of the Companies Act 2006 and was not subject to a
formal review by the auditors. The financial information in respects of the
year ended 30 November 2023 has been extracted from the statutory accounts
which have been delivered to the Registrar of Companies. The Group's
Independent Auditor's report on those accounts was unqualified and did not
contain a statement under section 498(2) or 498(3) of the Companies Act 2006.
The financial information for the six months ended 31 May 2024 and 31 May 2023
is unaudited.
As further detailed in the Company's Annual report, the Directors believe the
principal risks and uncertainties facing the Group over the final 6 months of
the year to be the continuing macroeconomic challenges from high input
inflation becoming embedded and rising interest rates to combat it.
Additionally, the ongoing and potential for new geopolitical uncertainties,
especially with a considerable number of global elections including in the
Group's country of domicile, could impact upon the regional and global
economies the businesses operate in, and so remain a risk. Whilst these
factors also present the Group with opportunities in the medium to longer term
(with the trend to grow more locally, sustainably and energy efficiently), in
the shorter term the Directors see these risks could have the potential to
impact Group revenue and cash generation. In consideration of these risks and
uncertainties, the Company continues implementation and careful monitoring of
various actions to manage cash flows and discretionary spending.
There are no subsequent events requiring recognition and disclosure in the
financial statements.
The Directors do not recommend the payment of an interim dividend for the six
months ended 31 May 2024. No dividend has been paid in respects of the year
ended 30 November 2023.
2. Going concern
Working capital forecasts have been prepared by management which show that the
Group can meet its day-to-day cash flow requirements and operate within all
the terms of its borrowing facilities.
The Directors are satisfied that the Group has sufficient financing in place
to continue to meet its liabilities as they fall due for a period of at least
12 months from the date of approval of this report and hence have prepared the
financial statements on a going concern basis.
The Directors acknowledge that there is uncertainty on the level and timing of
revenues especially in the Controlled Environment Agriculture and Passive Fire
Protection divisions, and there would be a probable need to raise additional
funding, should the Group's expectations for revenue generation not
materialise as expected. The Directors note that this material uncertainty may
cast significant doubt on the group's ability to continue as a going concern.
In response to these matters the Group is continuing to manage cash flows and
discretionary spending.
The financial statements do not include any adjustments that would result if
the group were unable to continue as a going concern.
3. Revenue and segmental reporting
The total revenue of the Group for the period has been derived from its
principal activity wholly undertaken in the United Kingdom.
Revenue is in respect of supply of hardware and project services is recognised
at a point in time either at the point of customer collection, dispatch or
project completion. Revenue in respect of services is recognised over time
evenly over the number of months supported or as measured by the number of
linear meters installed.
31 May 31 May 30 November
2024 2023 2023
£ £ £
Revenue by products and services:
Supply of hardware (CEM) 4,536,305 4,354,788 9,085,484
Supply of hardware (CEA) 124,208 3,932 67,681
Supply of project services (CEA) 178,742 - 142,321
Supply of maintenance services (CEA) 81,814 - 12,306
Supply of installation services (PFP) 300,481 - -
Intercompany eliminations (21,748) - (12,632)
5,199,802 4,358,720 9,295,160
During the six months to 31 May 2024 one customer represented 55.8% of total
revenue (HY23: 60.2%; 2023: 58.3%).
The Group has three operating segments 'Contract electronics manufacture'
relating to the development and manufacturing of electronic boards;
'Controlled environment agriculture' relating to the development and
manufacturing and installation of lighting, technology and other products for
the Controlled Environment Agriculture (CEA) sector; and 'Passive fire
protection' relating to the installation of a retrospective cavity barrier in
wall and floor constructions. Corporate refers to the Group's centralised
resources used by the segments. This is consistent with the presentation in
the last financial statements. The Chief Operating Decision Maker (CODM) has
been determined to be the Board. The performance of the three reportable
segments is based upon a review of profits and segmental assets/liabilities.
Contract Controlled Passive Corporate and
electronics environment fire intercompany
manufacture agriculture protection eliminations
31 May 2024 £ £ £ £ Total
Revenue 4,536,305 384,764 300,481 (21,748) 5,199,802
Depreciation and amortisation (94,158) (73,852) (46,264) (636) (214,910)
Operating profit/(loss) 294,014 (126,170) (1,740) (352,732) (186,628)
Segment assets 5,518,638 2,127,095 1,337,493 75,093 9,058,319
Segment liabilities (4,551,459) (608,586) (1,257,633) (475,035) (6,892,713)
Contract Controlled Passive Corporate and
electronics environment fire intercompany
manufacture agriculture protection eliminations
30 November 2023 £ £ £ £ Total
Revenue 9,085,484 222,308 - (12,632) 9,295,160
Depreciation and amortisation (176,610) (366,727) (23) (4,947) (548,307)
Operating profit/(loss) 594,029 (789,724) (31,112) (633,101) (859,908)
Segment assets 4,331,514 2,269,204 1,193,586 538,898 8,333,202
Segment liabilities (3,539,171) (672,835) (1,204,911) (449,006) (5,865,923)
Contract Controlled Passive Corporate and
electronics environment fire intercompany
manufacture agriculture protection eliminations
31 May 2023 £ £ £ £ Total
Revenue 4,354,788 3,932 - - 4,358,720
Depreciation and amortisation (84,279) (99,139) - (2,839) (186,257)
Operating profit/(loss) 265,105 (583,274) - (362,151) (680,320)
Segment assets 4,853,052 1,439,663 - 982,039 7,274,754
Segment liabilities (3,662,264) (265,078) - (715,532) (4,642,874)
4. Taxation
The tax credit is made up as follows:
31 May 31 May 30 November
2024 2023 2023
£ £ £
Current tax expense
UK corporation tax for the period - (50,887) (15,896)
Adjustment in respect of prior periods - - (53,445)
Total current income tax - (50,887) (69,341)
Deferred tax
Origination and reversal of timing difference (18,430) - (138,949)
Adjustment in respect of prior year - - (5,086)
(18,430) - (144,035)
(18,430) (50,887) (213,376)
The tax charge in the six month periods have been calculated based on the
estimated tax rate that is expected to apply to the full year.
5. Borrowings
31 May 31 May 30 November
2024 2023 2023
£ £ £
Current
Interest bearing loans 386,667 216,667 216,667
Invoice discounting facility 1,324,706 1,229,575 1,383,045
Stock loan facility - 180,000 180,000
1,711,373 1,626,242 1,779,712
Repayable between one
and five years
Interest-bearing loans 752,222 288,889 180,555
752,222 288,889 180,555
In October 2020, the Group entered into a term loan with a principal of
£975,000 payable in 54 equal instalments of £18,056 and interest payable at
5.5% plus base rate with the first six months payment free. The loan was
provided by Close Brothers under the Government backed Coronavirus Business
Interruption Loan Scheme (CBILS). The loan with Close Brothers is secured by
fixed and floating charges over the Group, including all property and
intellectual property. This is linked to the Group's invoice discounting
facility noted below. The balance for the CBILS term loan at 31 May 2024 was
£288,889 (HY23: £505,556; 2023: £397,222).
The Group has in place ongoing invoice discounting facility arrangements
provided by Close Brothers. Interest is payable on the invoice discounting
facility at 2% plus base rate. The invoice discounting facility with Close
Brothers is secured by fixed and floating charges over the Group, including
all property and intellectual property, as well as the trade receivables of
the subsidiary, UK Circuits and Electronics Solutions Limited.
The Group agreed a stock loan facility in December 2022 with Close Brothers.
Interest is payable on the stock loan facility at 3.25% plus base rate. This
facility provides up to £500,000 working capital secured by fixed and
floating charges over the Group, including all property and intellectual
property, as well as the inventories of the subsidiary, UK Circuits and
Electronics Solutions Limited.
Further, in May 2024, the Group entered into a further term loan with a
principal of £850,000 payable in 60 equal instalments of £14,167 and
interest payable at 5.99% plus base rate. The loan was provided by Close
Brothers under the Government backed Recovery Loan Scheme (RLS). Security by
fixed and floating charges were extended to include the new subsidiaries. The
balance for the RLS term loan at 31 May 2024 was £850,000.
6. Issued equity capital
Total no. of
Nominal Ordinary Total
Company value shares £
At 1 December 2022 £0.01 174,150,000 1,741,500
Share issue £0.01 158,855,500 1,588,555
At 31 May 2023, 30 November 2023 and 31 May 2024 £0.01 333,005,500 3,330,055
During the month of April 2023, an aggregated total of 158,855,500 new
ordinary shares were issued at a price of £0.01 per share equating to the
nominal value of those shares.
The share premium account is shown net of £133,768 of share issuance costs in
connection with this.
7. Loss per share
Basic loss per share is calculation on the loss for the period after taxation
attributable to the owners of the parent of £332,327 and on 324,105,500
ordinary shares, being the weighted number in issue during the period
excluding shares held by the Employee Benefit Trust (EBT). Unexercised options
over the ordinary shares are not included in the calculation of diluted loss
per share as they are anti-dilutive.
31 May 2024 31 May 2023
Basic and Diluted EPS Earnings Weighted average number of shares Per share amount (pence) Earnings Weighted average number of shares Per share amount (pence)
£ £
Weighted average number of ordinary shares 333,005,500 209,524,470
Adjusted for the effect of own shares held by EBT (8,900,000) (8,900,000)
Earnings attributable to ordinary shareholders of the Company (332,327) 324,105,500 (0.10) (770,938) 200,624,470 (0.38)
30 November 2023
Basic and Diluted EPS Earnings Weighted average number of shares Per share amount (pence)
£
Weighted average number of ordinary shares 271,434,137
Adjusted for the effect of own shares held by EBT (8,900,000)
Earnings attributable to ordinary shareholders of the Company (953,164) 262,534,137 (0.36)
Diluted Earnings Per Share
Basic and diluted loss per share are equal as where a loss is incurred the
effect of outstanding share options and warrants is considered anti-dilutive
and is ignored for the purpose of the loss per share calculation.
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