REG - Light Science Tech. - Interim Results
05/08/2022 07:00
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RNS Number : 0170V Light Science Tech. Holdings PLC 05 August 2022
05 August 2022
Light Science Technologies Holdings plc
("LSTH" or the "Company")
Interim Results
Light Science Technologies Holdings plc (AIM: LST), the controlled environment
agriculture ("CEA") technology and contract electronics manufacturing ("CEM")
group, is pleased to announce results for the six months ended 31 May 2022
(the "Period").
Highlights:
· Revenue for the Period, up by 4.2% to £3.6m (H1 2021: £3.4m)
· Margin reduced slightly to 20.9% (H1 2021: 23.6%)
· Loss before Tax of £1.3m (H1 2021: loss £0.9m), due primarily to
the CEA division's continued investment in both product research and
development and marketing of the Company's products and services
· Commencement of planned programme of investment
Post Period Highlights:
· Launch of SensorGROW SaaS (Software as Services): the range will
provide growers with business intelligence at their fingertips, facilitating
optimised plant performance in their crop growth and will help growers to
generate higher yields, lower energy usage and waste, to focus on
profitability. This product is sold on a 3-year subscription model.
· Launch of the 'slimline' low profile tuneable light: designed to
maximise growing space in Vertical farm applications, broadening the reach of
the Company's nurturGROW CEA lighting solutions. The tuneable element allows
growers to use different light wavelengths at different plant growth stages.
This sustainable product uses less energy, to help growers grow more with
less.
Commenting on the results and prospects, Simon Deacon, Chief Executive Officer
of Light Science Technologies, said:
"With Group revenue increasing by 4.2% for the six months to 31 May 2022,
alongside our forward order book and contracts worth £18 million*, we have
seen an increase in our pipeline of quoted business due to a demand for
reshoring manufacturing to the UK, as customers look to increase product
security and reduce risk.
"As much as the macro trends are challenging in the short term, we are
confident that the medium and long-term outlook for the Group is promising, as
the market continues to grow. With our experienced team, our technologies and
energy saving products feeding into the growing pipeline, we are in a strong
position to take advantage of the opportunities and achieve our objectives. We
remain confident in our ability to achieve our revised forecasts as announced
on 10 June 2022."
* Contracts are subject, inter alia, to certain milestones and conditions
as more fully described in the Company's announcement on 15 October 2021 and
mentioned in the Company's AIM Admission Document
For further 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
Turner Pope Investments (TPI) Ltd (Broker) Tel: +44 (0) 20 3657 0050
James Pope / Andy Thacker
Walbrook PR Ltd (Media & Investor Relations) Tel: +44 (0)20 7933 8780 or lst@walbrookpr.com (mailto:lst@walbrookpr.com)
Nick Rome / Paul McManus
About Light Science Technologies Holdings plc
(www.lightsciencetechnologiesholdings.com
(http://www.lightsciencetechnologiesholdings.com) )
Light Science Technologies Holdings plc is the holding company of the Group's
controlled environment agriculture ("CEA") division, Light Science
Technologies Ltd ("Light Science Technologies"), and its contract electronics
manufacturing ("CEM") division, UK Circuits and Electronics Solutions Limited
("UK Circuits").
Controlled Environment Agriculture
Light Science Technologies was founded in 2019 and is the Company's grow
lights and sensor technology business, providing bespoke recipes and
technologies tailored to customers' needs - with key targets including indoor,
vertical, glasshouses, polytunnels and medicinal farming markets. The
all-in-one CEA solution will include analysing customers' crop growing
requirements to provide bespoke, low-energy and sustainable equipment.
Market drivers include food and water shortages in many parts of the world;
growing global population; UK and other government policy encouraging
sustainable and efficient growth methods; increased scrutiny of the effect of
food production on climate change and the continuing transition away from
processed foods.
Contract Electronics Manufacturing
UK Circuits is the Company's CEM focussed division, with strong revenue and
cash generation. The Group designs, procures, and manufactures high-quality
CEM products, specialising in Printed Circuit Boards, which are used in a
range of sectors including audio, automotive, electronics, gas detection,
lighting, pest control, telecommunications and, more recently, the CEA market.
Chief Executive's Report
Financial & Operating review
I am pleased to announce Group revenue for the six months to 31 May 2022 is up
by 4.2% to £3.6m, compared to the equivalent period last year, in the
backdrop of very significant headwinds that continue to challenge the Group.
Across the Group, there has been a persistent shortage of certain electronic
components, primarily within the Contract Electronics Manufacturing ("CEM")
division. However, the business has managed to continue supporting clients'
orders through the Period.
Additionally, as detailed in the Company's trading update of 10 June 2022,
there has been an elongation of the sales cycle in the Controlled Environment
Agriculture ("CEA") division. This is due to a number of factors, including
government grant delays and input inflation experienced by growers, which
cannot fully be passed on to their customers, leading to capital expenditure
by growers being delayed.
As a result of general input price inflation and the forced use of alternative
supply sources, cost of sales has increased relative to sales, as it has not
always been possible to pass on these costs in full to the customer.
Therefore, margin has reduced slightly to 20.9% from 22.2% for the full prior
year.
Loss before Tax for the six months to 31 May 2022 was £1.3m, due primarily to
the CEA division's continued investment in both product research and
development and marketing of the Company's products and services.
Inventories increased further in the Period by £0.7m to £1.9m. This stock is
predominantly allocated to specific customer orders received, in order to
secure availability and pricing, due to the component shortages and
inflationary pressures that are persisting.
The Group began its planned programme of investment in the Period, utilising
part of the proceeds of the Company's placing of new Ordinary Shares,
following its IPO on AIM at the end of the previous year. 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.
Additionally, funds were utilised to continue product development and tooling,
particularly in respect of the SensorGROW product launched shortly after the
Period. Furthermore, investment has been channelled to marketing the Company's
innovative products and services, which includes collaborating with industry
bodies, such as Crop Health and Protection (CHAP) in their advanced greenhouse
facility, the Stockbridge Technology Centre, on a tomato trial showcasing the
energy efficiency of the nurturGROW range, whilst maximising yields.
The Zenith contract progressed through the Period and approached completion of
the first gateway by the end of the six months to 31 May 2022, as expected.
The project involves developing a cloche lighting and sensor technology system
to extend the growing season from 7 months to 12 months, this is part funded
by UKRI's Farming Innovation Pathway grant, accounting for the majority of the
£105,000 other operating income in the Period, and the corresponding research
and development expenditure within administrative expenses.
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 ongoing geopolitical uncertainties and the consequent
impacts on interconnected global supply chains, resulting in persisting
shortages in the worldwide availability of electronic components.
Additionally, the macroeconomic challenges from high input price inflation,
especially in the energy markets, with the impact that has on elongating
customers' decision-making processes in the CEA division. Whilst these factors
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 further
elongate the sales cycle and impact Group revenue and cash generation.
In consideration of these risks and uncertainties, the Company is implementing
a variety of actions to manage cash flows and discretionary spending,
including the accelerated roll out of enhancements to the stock management
system and procurement processes, targeted at reducing stock levels, and
working closely with our clients to pass on increased inventory costs.
Additionally, 20% of Directors' fees have been deferred on a contingent basis
from 1 August 2022 until such point as the Board considers it appropriate to
reinstate to previous levels.
There are no subsequent events requiring recognition and disclosure in the
financial statements. However, as detailed in the Company's announcements of
the 16th and 23rd June, the CEA division officially launched its SensorGROW
and 'slimline' Vertical farm range, including its tuneable products at
Greentech 2022 in Amsterdam and the Indoor AgTech Innovation Summit in New
York, respectively, after the end of the reporting Period.
The Directors do not recommend the payment of an interim dividend for the six
months ended 31 May 2022. No dividend has been paid in respects of the year
ended 30 November 2021.
Outlook
Growing pipeline and demand
With Group revenue increasing by 4.2% for the six months to 31 May 2022,
alongside our forward order book and contracts worth £18 million*, we have
seen an increase in our pipeline of quoted business due to a demand for
reshoring manufacturing to the UK, as customers look to increase product
security and reduce risk.
Focused on increasing recurring revenue and return on investment
We successfully launched two new products at two key industry trade events in
Amsterdam and New York very recently, with the primary focus on reducing
growers' energy usage and operating costs, without compromising their yields.
The SensorGROW SaaS (Software as a Service) range will provide growers with
business intelligence at their fingertips, facilitating optimised performance
in their crop growth. In these challenging times, from both commercial and
environmental perspectives, higher yields and profitability, with less energy
and waste, has never been more important.
We are seeing an increased demand for growing intelligence tools and expect a
high take-up as we roll out our SensorGROW products over the next 12 months.
With a low initial cost to the customer, we anticipate growers signing up to
three-year contracts based on a monthly subscription model.
Given the importance of improving food security and reducing food miles, we
launched our new nurturGROW Vertical Farm lighting product with a focus on
delivering high quality crop yields at lower energy. Increased costs impacting
growing, such as fertiliser, labour, fuel, is driving a market need for more
efficient technology to safeguard the future of food production and to help
growers grow more with less.
As much as the macro trends are challenging in the short term, we are
confident that the medium and long-term outlook for the Group is promising, as
the market continues to grow. With our experienced team, our technologies and
energy saving products feeding into the growing pipeline, we are in a strong
position to take advantage of the opportunities and achieve our objectives. We
remain confident in our ability to achieve our revised forecasts as announced
on 10 June 2022.
Simon Deacon
Chief Executive Officer
* Contracts are subject, inter alia, to certain milestones and conditions
as more fully described in the Company's announcement on 15 October 2021 and
mentioned in the Company's AIM Admission Document
Consolidated statement of comprehensive income
For the six months ended 31 May 2022
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 May 2022 31 May 2021 30 November 2021
Notes £ £ £
Revenue 3 3,560,519 3,416,631 7,393,933
Cost of sales (2,814,757) (2,610,220) (5,750,782)
Gross profit 745,762 806,411 1,643,151
Administrative expenses (2,037,187) (1,252,359) (3,265,106)
Non-recurring administrative expenses 4 - (366,907) (512,436)
Other operating income 104,737 26,898 50,203
Operating loss (1,186,688) (785,957) (2,084,188)
Finance costs (91,397) (95,483) (262,620)
Loss on ordinary activities before taxation (1,278,085) (881,440) (2,346,808)
Income tax credit 5 86,075 36,021 202,423
Loss for the Period and total comprehensive income for the Period (1,192,010) (845,419) (2,144,385)
Attributable to:
The owners of the company (1,201,396) (861,116) (2,165,543)
Non-controlling interests 9,386 15,697 21,158
(1,192,010) (845,419) (2,144,385)
Loss per share
Basic and diluted (pence) 8 (0.72) (0.85) (1.98)
Consolidated balance sheet
As at 31 May 2022
Unaudited Unaudited Audited
as at 31 May as at 31 May as at 30 November
2022 2021 2021
Notes £ £ £
Assets
Non-current assets
Property, plant and equipment 863,211 803,818 822,803
Intangible assets 340,982 145,724 214,698
Right-of-use assets 623,951 579,455 551,532
1,828,144 1,528,997 1,589,033
Current assets
Inventories 1,899,391 937,740 1,199,749
Trade and other receivables 1,679,472 1,695,921 1,738,330
Corporation tax receivable 237,165 - 151,090
Cash and cash equivalents 1,779,817 130,247 3,860,430
5,595,845 2,763,908 6,949,599
Total assets 7,423,989 4,292,905 8,538,632
Liabilities
Current liabilities
Borrowings 6 (1,128,460) (1,238,700) (1,341,925)
Corporation tax payable - (1,216) -
Trade and other payables (2,134,381) (2,041,406) (2,049,089)
Lease liabilities (210,539) (172,324) (226,498)
(3,473,380) (3,453,646) (3,617,512)
Non-current liabilities
Deferred tax - (20,515) -
Borrowings 6 (505,555) (1,742,925) (613,889)
Trade and other payables (77,779) - (64,184)
Lease liabilities (353,181) (386,251) (325,878)
(936,515) (2,149,691) (1,003,951)
Total liabilities (4,409,895) (5,603,337) (4,621,463)
Net assets/ (liabilities) 3,014,094 (1,310,432) 3,917,169
Capital and reserves attributable to the owners of the company
Share capital 7 1,741,500 1,000,000 1,741,500
Share premium account 5,654,011 - 5,654,011
Share allotment reserve - 250,000 -
Merger reserve (3,478,435) (3,479,535) (3,478,435)
Share based payment reserve 509,298 - 220,363
Warrant reserve 159,593 - 159,593
Retained earnings (1,908,129) 597,694 (706,733)
2,677,838 (1,631,841) 3,590,299
Non-controlling interests 336,256 321,409 326,870
Total equity 3,014,094 (1,310,432) 3,917,169
Statements of changes in equity
For the six months ended 31 May 2022
Share premium Share allotment Share based payment
Share capital account reserve reserve
Consolidated £ £ £ £
At 30 November 2020 1,000,000 - 250,000
Comprehensive income -
Loss for the Period - - - -
Total comprehensive income - - - -
Unaudited balance at 31 May 2021 1,000,000 - 250,000 -
Transactions with shareholders
Combinations under common control - - - -
Advance share subscription - - 750,000 -
Shares and related warrants issued in the Period 741,500 5,654,011 (1,000,000) -
Share based payment - - - 220,363
Total transactions with shareholders 741,500 5,654,011 (250,000) 220,363
Comprehensive income
Loss for the Period - - - -
Total comprehensive income - - - -
Audited balance at 30 November 2021 1,741,500 5,654,011 - 220,363
Transactions with shareholders
Share based payment - - - 288,935
Total transactions with shareholders - - - 288,935
Comprehensive income -
Loss for the Period - - - -
Total comprehensive income - - - -
Unaudited balance at 31 May 2022 1,741,500 5,654,011 - 509,298
Warrant reserve Merger reserve Retained earnings Non- controlling interests Total equity
Consolidated £ £ £ £ £
At 30 November 2020 - (3,479,535) 1,458,810 305,712 (465,013)
Comprehensive income
Loss for the Period - - (861,116) 15,697 (845,419)
Total comprehensive income - - (861,116) 15,697 (845,419)
Unaudited balance at 31 May 2021 - (3,479,535) 597,694 321,409 (1,310,432)
Transactions with shareholders
Combinations under common control - 1,100 - - 1,100
Advance share subscription - - - - 750,000
Shares and related warrants issued in the Period 159,593 - - - 5,555,104
Share based payment - - - - 220,363
Total transactions with shareholders 159,593 1,100 - - 6,526,567
Comprehensive income
Loss for the Period - - (1,304,427) 5,461 (1,298,966)
Total comprehensive income - - (1,304,427) 5,461 (1,298,966)
Audited balance at 30 November 2021 159,593 (3,478,435) (706,733) 326,870 3,917,169
Transactions with shareholders
Share based payment - - - - 288,935
Total transactions with shareholders - - - - 288,935
Comprehensive income
Loss for the Period - - (1,201,396) 9,386 (1,192,010)
Total comprehensive income - - (1,201,396) 9,386 (1,192,010)
Unaudited balance at 31 May 2022 159,593 (3,478,435) (1,908,129) 336,256 3,014,094
Consolidated cash flow statement
For the Six months ended 31 May 2022
Unaudited Unaudited Audited
Six months ended 31 May Six months ended 31 May Year ended 30 November
2022 2021 2021
£ £ £
Cash flows from operating activities Loss after tax (1,192,010) (845,419) (2,144,385)
Adjustments for:
Depreciation of tangible assets 69,780 33,206 86,145
Depreciation of right-of-use assets 86,206 43,842 145,552
Interest payable 91,397 95,483 262,620
Taxation and RDEC credit (86,075) (36,021) (214,882)
Share based payment 288,935 - 220,363
Changes in working capital:
Increase in inventory (699,642) (348,269) (610,278)
Decrease / (increase) in trade and other receivables 58,858 (441,733) (484,141)
Increase in trade and other payables 98,887 715,983 732,269
Cash used in operations (1,283,664) (782,928) (2,006,737)
Tax paid / (received) - (7,399) 22,715
Net cash outflow from operating activities (1,283,664) (790,327) (1,984,022)
Cash flows from investing activities
Purchase of property, plant and equipment (126,587) (96,182) (168,106)
Purchase of intangible fixed assets (126,284) (67,972) (136,946)
Net cash outflow from investing activities (252,871) (164,154) (305,052)
Cash flows from financing activities
Capital issued (net of issue costs) - - 4,431,204
Advance share subscriptions - - 750,000
Proceeds from new loans - 50,000 310,000
Proceeds from new convertible loans - 1,125,000 1,125,000
Repayment of loans (108,333) (146,884) (679,805)
Lease payments (130,883) (97,793) (165,125)
Interest paid on leases (19,347) (27,654) (25,991)
Net drawdown on invoice discounting facility (213,465) 210,746 520,742
Interest paid on loans and borrowings (72,050) (67,829) (155,663)
Net cash (outflow) / inflow from financing activities (544,078) 1,045,586 6,110,362
Increase in cash and cash equivalents (2,080,613) 91,105 3,821,288
Cash and cash equivalents including overdrafts at the start of the Period 3,860,430 39,142 39,142
Cash and cash equivalents including overdrafts at the end of the Period 1,779,817 130,247 3,860,430
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 1 Lowman
Way, Hilton, Derby, England, DE65 5LJ.
The principal activity of the Group is the development and manufacturing of
electronic boards and the development and manufacturing of lighting and
technology products for the Controlled Environment Agriculture ("CEA") sector.
This condensed consolidated half-yearly financial information ("interim
results") was approved by the directors for issue on 4 August 2022.
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 2021, 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 2021 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 2022 and 31 May 2021
is unaudited.
2. Going concern
Working capital forecasts have been prepared for the period to 30 November
2024. Based on the forecasts, the Group can meet its day-to-day cash flow
requirements and operate within all the terms of its borrowing facilities.
As detailed in the Company's trading update of 10 June 2022, there are a
variety of factors, including government grant delays and input inflation
experienced by growers, which cannot be passed on to their customers, that
have resulted in an elongation of the sales cycle in the Company's CEA
division, and therefore the results of the Group. As a consequence of these
matters, there is a material uncertainty that potentially casts doubt upon the
Group's ability to continue as a going concern.
In response to these matters, the Group is implementing a variety of actions
to manage cash flows and discretionary spending, including the accelerated
roll out of enhancements to the stock management system and procurement
processes, targeted at reducing stock levels, and working closely with our
clients to pass on increased inventory costs. Additionally, 20% of Directors'
fees have been deferred on a contingent basis from 1 August 2022 until such
point as the Board considers it appropriate to reinstate to previous levels.
However, should the sales cycle elongate significantly outside of forecast for
the remainder of the period to 30 November 2022, it would likely be necessary
to raise additional funding to support Group requirements.
Although the success of these actions cannot be guaranteed, management has
determined that the measures it has taken are sufficient to mitigate the
uncertainty and continue as a going concern for at least 12 months from the
date of approval of the financial statements and has therefore prepared the
financial statements on a going concern basis.
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 is recognised at a point in
time at the point of customer collection or dispatch. Revenue in respect of
laboratory services is recognised at a point in time when project gateways are
completed. As new products and services are launched within the Controlled
Environment Agriculture segment, the revenue accounting policy and point of
recognition will develop.
During the six months to 31 May 2022 one customer represented 55.4% of total
revenue (HY21: 61.6%; 2021: 61.3%).
The Group has two operating segments 'Contract electronics manufacture'
relating to the development and manufacturing of electronic boards; and
'Controlled environment agriculture' relating to the development and
manufacturing of lighting and technology products for the Controlled
Environment Agriculture (CEA) sector. 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 two reportable
segments is based upon a review of profits and segmental assets/liabilities.
Contract Controlled
electronics environment
manufacture agriculture
31 May 2022 £ £ Total
Revenue 3,547,324 13,195 3,560,519
Depreciation (89,838) (66,148) (155,986)
Operating profit/(loss) 274,956 (1,502,728) (1,227,772)
Segment assets 4,584,630 2,839,359 7,423,989
Segment liabilities (3,870,632) (539,263) (4,409,895)
Contract Controlled
electronics environment
manufacture agriculture
30 November 2021 £ £ Total
Revenue 7,361,303 32,630 7,393,933
Depreciation (174,086) (57,611) (231,697)
Operating profit/(loss) 485,527 (2,569,715) (2,084,188)
Segment assets 4,426,947 4,111,685 8,538,632
Segment liabilities (4,153,852) (467,611) (4,621,463)
Contract Controlled
electronics environment
manufacture agriculture
31 May 2021 £ £ Total
Revenue 3,416,631 - 3,416,631
Depreciation (67,938) (9,110) (77,048)
Operating profit/(loss) 361,013 (1,146,970) (785,957)
Segment assets 3,577,152 715,753 4,292,905
Segment liabilities (3,679,213) (1,924,124) (5,603,337)
4. Non-recurring expenses
31 May 31 May 30 November
2022 2021 2021
£ £ £
Non-recurring costs - 366,907 512,436
Non-recurring costs relate to professional and other costs directly
attributable to preparing the Company for admission to the AIM market of the
London Stock Exchange.
5. Taxation
The tax credit is made up as follows:
31 May 31 May 30 November
2022 2021 2021
£ £ £
Current tax expense
UK corporation tax for the Period (86,075) (30,992) (109,285)
Adjustment in respect of prior periods - - (91,668)
Total current income tax (86,075) (30,992) (200,953)
Deferred tax
Origination and reversal of timing difference - (5,029) (1,470)
(86,075) (36,021) (202,423)
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.
6. Borrowings
31 May 31 May 30 November
2022 2021 2021
£ £ £
Current
Bank overdraft - - -
Interest bearing loans 216,667 312,918 216,667
Convertible loan instrument - 125,000 -
Invoice discounting facility 911,793 800,782 1,125,258
1,128,460 1,238,700 1,341,925
Repayable between one
and five years
Convertible loan instrument - 1,000,000 -
Interest-bearing loans 505,555 742,925 613,889
505,555 1,742,925 613,889
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). As such, the first 12 months of interest are
covered by the Government's business interruption payment grant paid directly
to the lender. The loan with Close Brothers is secured by fixed and floating
charges over the Group, including all freehold property, goodwill 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 2022 was
£722,222 (HY21: £914,689; 2021: £830,556).
The Group also entered into invoice discounting facility arrangements provided
by Close Brothers, for an initial term of 3 years. Interest is payable on the
invoice discounting facility at 2% plus base rate. This facility was also
provided under the CBILS scheme, as such the first 12 months of interest is
partly covered by the Government's business interruption payment grant paid
directly to the lender. The invoice discounting facility with Close Brothers
is secured by fixed and floating charges over the Group, including all
freehold property, goodwill and intellectual property, as well as the trade
receivables of the subsidiary, UK Circuits and Electronics Solutions Limited.
During the prior year, there were convertible loan instruments of £1,125,000
which have since been settled. Loan notes were issued to certain prospective
shareholders and Directors of the Company. Interest accrued on £1,000,000 of
the loan notes received from a shareholder at a rate of 7.25%, and the
interest of £56,557 was paid in full in cash on Admission to AIM on 15
October 2021. The loan notes were converted to 12,500,000 Ordinary Shares
immediately prior to Admission, at 20% discount. Interest accrued on the other
£125,000 of convertible loan notes received from directors at a rate of 5.5%.
Interest totalling £3,805 was settled in full in cash on Admission. The
convertible loan notes were converted to 1,250,000 Ordinary Shares immediately
prior to Admission, at no discount.
7. Issued equity capital
Total no. of
Nominal Ordinary Total
Company value shares £
At 1 December 2020 and 31 May 2021 £1.00 1,000 1,000
Corporate restructure £1.00 999,000 999,000
£1.00 1,000,000 1,000,000
Sub-division of each £1.00 share into 100 £0.01 shares (£0.99) 99,000,000 -
Share issue £0.01 74,150,000 741,500
At 30 November 2021 and 31 May 2022 £0.01 174,150,000 1,741,500
For the purposes of the consolidated accounts, because the predecessor value
method has been used to account for this corporate restructuring, the share
capital issued for the purposes of the business combination have been shown as
at the previous reporting date as if they had always been outstanding.
On 23 June 2021, a corporate restructuring took place where the entire share
capital of UK Circuits and Electronics Solutions Holdings Ltd and Light
Science Technologies Ltd were purchased in consideration for the issue of
999,000 shares at nominal value of £1.00, attracting no premium. Thereafter,
the entire ordinary share capital was subdivided, with each £1.00 ordinary
share divided into 100 £0.01 shares.
On 15 October 2021, 74,150,000 shares were issued pursuant to convertible loan
notes and advance subscription agreements outstanding immediately prior to
issuance; and pursuant to the placing of shares on the Company's admission to
AIM and in lieu of fees associated with that. The share premium account is
shown net of £669,049 of share issuance costs
8. 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 £1,192,010 and on 165,250,000
ordinary shares, being the weighted number in issue during the year 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. There have been no changes to share options since
the end of the last financial statements.
For 2021, the share numbers used have been calculated consistently, to take
into account the 2021 share reorganisation, i.e. by assuming the various steps
of the share reorganisation had been in effect throughout 2021.
31 May 2022 31 May 2021
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 174,150,000 100,000,000
Adjusted for the effect of own shares held by EBT (8,900,000) -
Earnings attributable to ordinary shareholders of the Company (1,192,010) 165,250,000 (0.72) (845,419) 100,000,000 (0.85)
30 November 2021
Basic and Diluted EPS Earnings Weighted average number of shares Per share amount (pence)
£
Weighted average number of ordinary shares 109,344,932
Adjusted for the effect of own shares held by EBT (1,292,329)
Earnings attributable to ordinary shareholders of the Company (2,144,385) 108,052,603 (1.98)
Diluted Earnings Per Share
Basic and diluted earnings per share are equal for the six months ended 31 May
2022 and the year ended 30 November 2021, since 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. For the six
months ended 31 May 2021, there were no share options and warrants issued, so
no dilutive effect.
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