REG - MicroSalt PLC - Maiden Interim Results
27/09/2024 07:00
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RNS Number : 9027F MicroSalt PLC 27 September 2024
The information contained within this announcement is deemed by the Company
(Companies House registration number 08873361) to constitute inside
information as stipulated under the Market Abuse Regulations (EU) No. 596/2014
("MAR")s. With the publication of this announcement via a Regulatory
Information Service ("RIS"), this inside information is now considered to be
in the public domain.
MicroSalt PLC
("MicroSalt", the "Company" or, together with its subsidiary, the "Group")
Unaudited half-yearly results for the period ended 30 June 2024
27 September 2024
MicroSalt Plc, (AIM: SALT), a leading provider of full-flavour, natural salt
with approximately 50% less sodium, announces its maiden interim results for
the six-month period ended 30 June 2024 ("H1 2024"), following the successful
admission of the Company to the AIM market of the London Stock Exchange in
February 2024.
H1 2024 highlights
· Revenue of US$ 0.2m (H1 2023: US$0.3m)
· Net loss of US$2.5m (H1 2023: US$1.7m) reflects increased R&D
costs and preparation for the commercial roll out with two of the Group's
major B2B customers, Customer B and Customer C
· Gross cash of US$2.4m at 30 June 2024 (31 December 2023: US$0.1m)
· R&D projects significant progressed regarding three new
iterations of MicroSalt to expand its effectiveness across additional food
formulas and environments
· Strengthened IP with grant of Low Sodium Salt Composition patent
(patent no. 11,992,034)
· Operational team expanded in line with plan, with appointment of
a new UK sales manager, US based Group financial controller and US based
senior accountant
· New ERP system (NetSuite) successfully implemented
Post period end highlights
· Customer B, the Mexican business of one of the world's largest
food, soft drink and snack manufacturers, placed repeat orders for 58mT of
MicroSalt
· Bulk B2B business - MicroSalt has advanced its negotiations with
major food manufacturers, with volume commitments of approximately 92mT
received in Q3, and further progress expected in Q4 from companies in Mexico,
the UK and the US
· Ingredients Online is a B2B e-commerce marketplace for bulk and
wholesale ingredients. MicroSalt bulk will be sold direct to the customer from
the Ingredients Online warehouses in New Jesey and California by the end of
October
· B2C placement of shakers and SaltMe! low sodium crisps across
approximately 600 new US stores in Q3, with retailers including Winn Dixie,
Fresh Thyme, Sedano, Northwest Grocer, Cub Foods and Central Market stores.
Approximately 1,200 US stores now retail MicroSalt products
· Strong pipeline with significant volume customer prospects at
advanced stages with a range of national and multi-national companies with
scope for MicroSalt to be nominated as a supplier on larger product lines once
established with these key customers.
Rick Guiney, CEO of MicroSalt commented: "The first half continued Microsalt's
2023 momentum, with its successful IPO, operational and R&D progress, and
coupled with preparation for upcoming commercial B2B customer product
launches. In addition to progress made in North America, our geographic
outreach is expanding with inroads into Asia, Australia, South Africa, the UK,
Germany, Canada and Latin America with a resultant boost to our sales
pipeline. We look to the future with confidence in both our product range and
health proposition."
For more information, please visit www.microsaltinc.co
(http://www.microsaltinc.co/) , follow on X @microSaltPLC or contact:
MicroSalt plc Via Flagstaff PR
Rick Guiney, CEO
Zeus (Nominated Adviser and Broker) +44 (0)20 3829 5000
David Foreman / James Edis (Investment Banking)
Dom King (Corporate Broking), Rupert Woolfenden (Sales)
Flagstaff PR (Financial PR) +44 (0)20 7129 1474
Tim Thompson / Alison Allfrey / Anna Probert
microsalt@flagstaffcomms.com
Notes to Editors
MicroSalt® produces a patented full-flavour, low-sodium salt for food
manufacturers and consumers.
MicroSalt is a major potential disruptor in the food market, thanks to its
micron sized particles which deliver the same sense of saltiness to a wide
range of foods but with approximately 50% less sodium. Excess sodium
consumption is a significant contributor to cardiovascular disease and
MicroSalt's solution meets the rising demand for healthier alternatives to
traditional salt. The WHO has set a target for reducing global sodium intake
by 30% by 2025, which it estimates will save 7 million lives by 2030.
Each year, cardiovascular disease costs the UK £19 billion - if the average
salt intake was reduced by one gram per day, it has been estimated that 4,147
lives and £288 million would be saved each year in the UK. As a nation, the
UK consumes 183 million kilograms of salt each year, and 70% of the typical
person's sodium intake is hidden in processed foods.
Operational since 2018, MicroSalt uses a patent-protected technology which
helps create high barriers to entry within the reduced-sodium salt market.
The Directors believe that MicroSalt is well positioned to capture growth in
the low sodium market, which is expected to grow exponentially, and that there
is also scope to enter the larger salt market.
Chief Executive Officer's statement
Introduction
The Company's mission is to reduce excess sodium consumption which
significantly contributes to hypertension and heart disease, by providing a
full-flavour salt with approximately 50% less sodium than traditional salt for
food manufacturers and consumers.
To achieve this, the Group has developed a patent protected and scalable
manufacturing process that produces a salt crystal that is approximately 100
times smaller than traditional salt. Due to its micron sized particles,
MicroSalt has improved adhesion to food (compared with traditional salt
crystals) and dissolves much faster on the tongue, thereby delivering the same
sense of saltiness as traditional snacks but reducing sodium intake.
H1 2024 was an exciting period for MicroSalt, including the successful
admission of the Company to the AIM market of the London Stock Exchange in
February. Alongside our continued R&D efforts, infrastructure and staffing
improvements, we have made considerable customer and strategic progress.
Whilst acknowledging the rollout of MicroSalt across new and/or further B2B
product lines has been slower than anticipated during the current year to
date, recent customer engagement across both B2B and B2C give the Board
confidence that the short to medium term outlook remains highly encouraging.
We have strengthened our IP position with a grant of an additional patent,
added 600 new product placements in retail, progressed in new product
development and production techniques, and have a considerably wider and
deeper relationship with our two main B2B customers, who we refer to as
Customer B and Customer C (see below for further details), a UK blue chip
potential customer as well as increasing momentum with the number of US
retailers stocking SaltMe! crisps and MicroSalt shakers. I have no doubt that
we are well positioned to capitalise on our growing market.
Furthermore, as we promote our vision of a healthier future through reduced
sodium in today's diets, we are discovering more and more possibilities and
commercial opportunities. This is amplified by certain R&D programmes we
have been running, including for example, using alternate carrier particles
rather than maltodextrin and to expedite and streamline the reformulation
process.
Our leadership team's commitment has driven positive feedback, which
continually affirmed that our products are timely and essential. Our outreach
initiatives have extended across continents, with further inroads in Asia,
Australia, South Africa, the UK, Germany, Canada, and Latin America, all of
which have boosted our sales pipeline. Moreover, our consumer products,
including SaltMe! crisps and MicroSalt shakers, have successfully provided a
low-sodium alternative for households worldwide, as we begin to cement our
brand as an essential, generation-spanning choice. Relationships amongst the
largest global food manufacturers are strong, and discussions with them
include production execution and rollout timetables for the finished FMCG
market.
Financial summary
The Company's revenue of US$0.2m (H1 2023: US$0.3m) and net loss of US$2.5m
(H1 2023: US$1.7m) are both reflective of efforts focused on R&D and
preparation for the launch of the first two major food manufacturing customers
within the Company's B2B solution. Translation of our B2B pipeline of
opportunities was always going to take time, but additional commercial
purchase orders were received from Customer B, the Mexican business of one of
the largest beverage/snack food companies in the world (Customer C), with 58
mT of MicroSalt ordered and being delivered in Q3 and Q4 of 2024. Accordingly,
most of the revenue in H1 was D2C (Direct to Consumer). The Group made the
strategic decision to focus on B2B in 2024, and, with initial orders received
in the latter half of 2024 as well as multiple other B2B opportunities in
various stages of testing/customer acceptance procedures, that strategy is
starting to deliver revenue for MicroSalt, albeit we do acknowledge this has
been slower than we originally anticipated.
Cash as at 30 June 2024 wasUS$2.4m (31 December 2023: US$0.1m) benefitting
from the US$2.8m IPO (net) proceeds, as well as further cash injections of
$2.1m following the conversion of 3,497,096 warrants in the Company during the
period.
Inventories increased to US$0.8m (31 December 2023: US$0.6m), predominantly
due to an increase in raw materials, again in preparation for the expected
bulk orders from the Company's first two major food manufacturing B2B
customers.
Trade and other receivables decreased to US$0.8m (31 December 2023: US$1.3m),
predominantly due to the settlement of US$0.7m of deferred costs in relation
to the IPO included in prepayments at 31 December 2023.
Trade and other payables decreased to US$0.6m (31 December 2023: US$1.7m),
predominantly due to settlement of trade payables and related party
liabilities following the IPO fundraise.
Borrowings also increased to US$2.9m (31 December 2023: US$2.5m),
predominantly due to increases in convertible loan notes from Tekcapital plc,
the largest shareholder of the Company.
Operations summary
The key focus of the Group during H1 2024 was on our larger-volume B2B
opportunities with several multinational FMCG companies and food manufacturers
and on greatly expanding our R&D efforts to ensure that MicroSalt was
reactive to the requests of the market. These projects focused on three new
iterations of MicroSalt to expand its effectiveness across various additional
food formulas and environments. We expect this will lead to additional
markets, such as foodservice and healthcare, additional patented processes,
and other potential applications for MicroSalt in both the short and long
term.
The Group is now an approved supplier in North and South America for one of
the world's largest food manufacturers as well as the US, Canada, and the UK
for one of the world's largest spice and ingredient suppliers. Additional
placements within the e-commerce sales channel for both our bulk and retail
product lines will continue to bring in new customers and highlight our status
within the low sodium community.
Our B2C sales efforts for both SaltMe and MicroSalt shakers continue to gain
new distribution with placements in 1,200 stores, as well as engagement within
active e-commerce platforms such as Thrive, that specialise in "better for
you" products.
We have also completed the successful implementation of a new ERP system
(NetSuite) to provide better and more timely financial reporting and controls,
as well as inventory controls and approval processes.
Sales and marketing
MicroSalt attended several US based and international food shows, which has
been the core focus of its sales and outreach efforts. The Company also
invests actively into brand awareness and social media campaigns relevant to
its D2C business. The Company appointed the U.K. celebrity chef Jack Stein as
a brand ambassador, added a full-time bulk salesperson in the UK, expanded the
D2C broker network, improved its representation within Amazon, and added sales
growth into the Canadian market. The Company is negotiating a purchasing
agreement and joint development agreement with what we term Customer C, one of
the world's largest food manufacturers that is expected to be executed in late
2024. Discussions are also underway for two major private label opportunities
that should be announced by 31 December 2024.
Employees
New employees hired to support growth and to continue our sales outreach
efforts include:
- Placement of a new UK sales manager
- Placement of a US based group financial controller
- Placement of a US based Senior Accountant
Intellectual property
In May 2024 the United States Patent and Trademark Office granted and issued
MicroSalt's patent entitled 'Low Sodium Salt Composition'. As the Group's
R&D efforts continue to result in new formulations, the Company will
explore further patents to protect its IP.
Political/regulatory update
The World Health Organisation ("WHO") has set a target of reducing global
sodium intake by 30% by 2025, which it estimates will save 7 million lives by
2030. WHO research also found that every US$1 spent on sodium reduction
translates to US$12 in healthcare cost savings for treating cardiovascular
disease. Governmental pressure continues to increase with new regulations in
Canada for 2025. Additionally, local dieticians and purchasing authorities are
taking action, regardless of any legal mandates, to lower sodium.
New governmental pressures on HFSS regulation in the UK are also re-igniting
sales conversation for both bulk and private label customers. These political
pressures provide opportunities for growth in MicroSalt in both the short and
long term.
Current trading and outlook
MicroSalt made solid operational progress in H1 2024, however the rollout of
MicroSalt across new and/or further product lines has been slower than hoped.
However, positive trials have been undertaken during this year so far, as well
as deepening our knowledge of and relationships with our key B2B customers and
target customers. Furthermore, we are increasingly confident of announcing
further commercial volume orders before the end of 2024 in the US, Mexico and
the UK.
In addition to our focus on B2B sales of MicroSalt® to food manufacturing
companies, MicroSalt continues to expand its low sodium saltshakers during
2024. Approximately 800 supermarkets now carry these shakers.
The combination of our strategic, commercial, sales and R&D efforts
provide a strong pipeline with significant volume customer prospects at
advanced stages. These include a range of national and multi-national
companies with scope for MicroSalt to be nominated as a supplier on larger
product lines once established with these key customers. The impact of our
efforts will also reach across several sectors including not only bulk and
SaltMe! crisps, but also foodservice, QSR/FSR (Quick service restaurants /
Fast service restaurants), and health care, amongst others. As a result, we
approach the future with confidence and anticipate near-term commercial
successes.
Finally, I must recognise, on behalf of the Board, our sincere thanks to all
stakeholders in the business who have supported us and are making possible the
achievement of our mission and objectives. In our opinion, the support of our
shareholders is justified, and although I would have liked to have announced
further commercial volume orders during the year to date, we are excited about
the remainder of 2024 as we anticipate MicroSalt receiving recurring
commercial volume purchase orders for its bulk product.
Rick Guiney
Chief Executive Officer
27 September 2024
Condensed consolidated statement of profit or loss and other comprehensive income
Note Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
US$'000 US$'000 US$'000
Revenue 220 257 574
Cost of sales (199) (259) (724)
Gross profit/(loss) 21 (2) (150)
Other operating income 3 - 120
Administrative expenses (1,790) (1,655) (3,318)
IPO Costs (641) - -
Operating loss (2,407) (1,657) (3,348)
Finance expense (140) (35) (131)
Loss before taxation (2,547) (1,692) (3,479)
Taxation - - -
Loss for the year (2,547) (1,692) (3,479)
Loss for the year attributable to:
Owners of the parent (2,547) (1,317) (3,479)
Non-controlling interests - (375) -
(2,547) (1,692) (3,479)
Other comprehensive income
Items that may or may not be recognised in profit or loss:
Foreign currency translation differences (251) 14 6
Total comprehensive income (2,798) (1,678) (3,473)
Total comprehensive loss attributable to:
Owners of the parent (2,798) (1,303) (3,473)
Non-controlling interests - (375) -
(2,798) (1,678) (3,473)
Loss per share for loss attributable to the owners
Basic and diluted loss per share (US$) 5 (0.22) 0.00 (0.39)
Condensed consolidated statement of financial position
Note As at As at
30 June 31 December 2023
2024 Audited
Unaudited
US$'000 US$'000
Assets
Current assets
Inventories 826 568
Trade and other receivables 817 1,259
Cash and cash equivalents 2,419 117
Total current assets 4,062 1,944
Non-current assets
Property, plant & equipment 7 8
Intangible assets 385 321
Total non-current assets 392 329
Total assets 4,454 2,273
Liabilities
Current liabilities
Trade and other payables 649 1,745
Total current liabilities 649 1,745
Non-current liabilities
Borrowings 2,931 2,524
Total non-current liabilities 2,931 2,524
Total liabilities 3,580 4,269
Net assets/(liabilities) 874 (1,996)
Equity
Share capital 6 96 73
Share premium 5,526 -
Share-based payment reserve 1,185 1,060
Capital contribution reserve 500 500
Accumulated losses (6,182) (3,635)
Translation reserve (251) 6
874 (1,996)
Non-controlling interests - -
Total equity 874 (1,996)
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2024
Note Share capital Share premium Share based payment reserve Capital contribution reserve Accumulated losses Translation reserve Total attributable to the company Non - controlling interests Total
equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 31 December 2022 - 1,121 488 2,452 (3,999) - 62 270 332
Loss for the year - - - - (1,318) - (1318) (374) (1,692)
Other comprehensive loss 14 14 14
Transactions with owners
Capital contribution from ultimate controlling party - - - 500 - - 500 - 500
Share-based payments - - 372 - - - 372 - 372
At 30 June 2023 (unaudited) - 1,121 860 2,952 (5,317) 14 (370) (104) (474)
Balance as at 31 December 2023 73 - 1,060 500 (3,635) 6 (1,996) - (1,996)
Loss for the year - - - - (2,547) - (2,547) - (2,547)
Other comprehensive income - - - - - (257) (257) - (257)
Transactions with owners
Issue of ordinary share capital 6 23 6,228 - - - - 6,251 - 6,251
Share issue costs - (702) - - - - (702) - (702)
Share-based payments - - 125 - - - 125 - 125
At 30 June 2024 (unaudited) 96 5,526 1,185 500 (6,182) (251) 874 - 874
Condensed consolidated statement of cash flows
Six months ended Six months ended
30 June 2024 30 June 2023
Unaudited Unaudited
Note US$'000 US$'000
Cash flows from operating activities
Loss before income tax (2,547) (1,692)
Depreciation of property, plant and equipment 1 1
Amortisation of intangible assets 4 2
Share based payment expense 125 372
Finance expense 140 35
(2,277) (1,282)
(Increase) / decrease in inventories (257) (366)
Decrease / (increase) in trade and other receivables 442 (285)
(Increase) / decrease in trade and other payables (1,097) 353
Net cash used in operating activities (3,189) (1,580)
Cash flows from investing activities
Purchase of intangible assets (68) (76)
Payments to acquire property, plant and equipment - (20)
Net cash used in investing activities (68) (96)
Cash flows from financing activities
Issue of shares 6,251 -
Proceeds from borrowings 267 1,678
Payment of share issue costs (702) -
Net cash from financing activities 5,816 1,678
Increase in cash and cash equivalents 2,559 2
Cash and cash equivalents at beginning of year 117 91
Effect of foreign exchange rate changes (257) 14
Cash and cash equivalents at end of year 2,419 107
Notes to the consolidated financial statements
1. General information
MicroSalt Plc (the "Company") is registered and incorporated in England and
Wales. The registered office is 12 New Fetter Lane, London, United Kingdom,
EC4A 1JP. The Company is a public limited company, which has been quoted on
the AIM market of the London Stock Exchange since 2024.
The principal activity of the Company together with its subsidiary undertaking
(the "Group") is that of the development and sale of low sodium salt and snack
foods.
2. Basis of preparation
The financial information for the six months ended 30 June 2024 set out in
this interim financial information is unaudited and does not constitute
statutory financial statements. The interim condensed financial information
has been presented in US Dollars ("$") and is rounded to the nearest dollar.
3. Accounting policies
The accounting policies applied by the Group and its subsidiaries in these
unaudited half year results are consistent with those applied in the annual
financial statements for the year ended 31 December 2023.
The financial statements of MicroSalt Plc Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC) as adopted by the United Kingdom and the
Companies Act 2006. The financial statements have been prepared under the
historical cost convention.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgment or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 2 of the FY 2023 accounts.
4. Going concern
The 2024 interim financial information has been prepared on a going concern
basis.
The Group meets its day to day working capital requirements through financing
coming primarily via cash raised pursuant to the Company's IPO on the AIM
Market of London of London Stock Exchange plc.
Furthermore, the Directors are not aware of any material uncertainties that
may cast significant doubt upon the Group's ability to continue as a going
concern. They are mindful of the geo-political environment, including rising
inflation but are confident they have appropriate plans in place to mitigate
any such risk in relation to this. Therefore, the financial statements
continue to be prepared on the going concern basis.
5. Basic and diluted loss per share
Basic and diluted loss per share is calculated by dividing the result
attributable to equity holders by the weighted average number of ordinary
shares in issue. Loss per share is presented based on the number of shares
outstanding in the Company.
30 June 31 December
2024 2023
Loss used in calculating basic and diluted loss per share (US$) (2,547,000) (3,479,000)
Weighted average number of shares 11,589,197 8,895,498
Basic and diluted loss per share (US$) (0.22) (0.39)
The diluted earnings per share is identical to the basic loss per share as the
exercise of warrants and options would be anti-dilutive.
6. Share capital
30 June 30 June 31 December 31 December
2024 2024 2023 2023
Shares US$ Shares US$
Allotted, called up and fully paid
Opening number of £0.001625 ordinary shares 35,245,729 72,926 - -
Opening number of £0.01 ordinary shares - - 1,892 26
Subdivision into £0.000003125 ordinary shares - - 6,052,508 -
Issue of ordinary share - - 1 -
Consolidation of shares into £0.001625 ordinary shares - - (6,042,758) -
Issue of ordinary shares 11,268,879 22,903 35,234,086 72,900
Closing number of £0.001625 ordinary shares 46,514,608 95,829 35,245,729 72,926
All issues are for cash unless otherwise stated.
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