REG - Ocean Harvest Tech. - Interim Results
12/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230912:nRSL0832Ma&default-theme=true
RNS Number : 0832M Ocean Harvest Technology Group PLC 12 September 2023
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU No.
596/2014) which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
12 September 2023
Ocean Harvest Technology Group Plc ("Ocean Harvest" or "the Company")
Interim Results for six months ended 30 June 2023
Ocean Harvest Technology Group Plc (AIM: OHT), specialists in researching,
developing and selling seaweed and ancillary products, announces its unaudited
results for the six month period ended 30 June 2023 ("the Period").
The Interim Report for the period ended 30 June 2023 will be published on the
Company's website today at www.oceanharvesttechnology.com
(http://www.oceanharvesttechnology.com) .
Financial Highlights
· OHT successfully completed its initial public offering raising
gross proceeds of £6,000,000
o Funds raised allows the Company to focus on its strategic growth
objectives
· 66% growth in product revenue to €1.6 million (H1 2022: €0.95
million)
· 150% increase in gross margin to €0.56 million (H1 2022:
€0.23 million)
o Substantial increase in gross margin to 36% (H1 2022: 24%)
o Margin improvements driven by an increase in average selling prices,
eliminating selling concessions post Covid-19 pandemic and an improvement in
processing yield
· Well funded with no external debt and a period end cash balance
of €4.8 million (31 December 2022: €1.2 million)
Operational Highlights
· Strong momentum with new customer wins, having onboarded over 10
new customers in the first six months. This includes a top five swine producer
in the US and one of the UK's largest feed pre-mixers
· Expanded seaweed supply chain in new regions such as east Africa
and the Philippines, giving access to materially larger volumes of biomass.
OHT has also secured a strategic relationship with a producer of brown seaweed
which provides price and volume certainty of supply and is progressing similar
arrangements with other seaweed suppliers
· Further improvement in operating efficiencies due to investment
in an additional grinding line in Vietnam, increasing yield significantly
· Completed Life Cycle Analysis of OceanFeed(TM) which demonstrates
that it has a materially lower CO(2) equivalent footprint in its manufacture
than other common ingredients in animal feed.
o OceanFeed(TM) can be net-negative as one tonne used as an additive can
reduce CO(2) equivalent emissions from the feed chain by over 10 tonnes
· Completed further R&D trials which demonstrated the strong
efficacy of OceanFeed(TM) in a number of applications
· The Company was awarded a patent which protects the claim made by
the Company that use of a seaweed blend as a feed supplement improves the
quantity and/or quality of eggs produced by egg laying birds
Conclusion and Outlook
· The Group has strong momentum and continues to onboard new
customers from its growing pipeline of customer trials.
· The improvements achieved in gross margin year to date are
expected to continue due to the revised selling price levels and the Company's
developments in seaweed sourcing and processing.
· The outlook for OHT's supply of seaweed remains strong and
supportive of continued growth in the Company's product sales.
· Whilst the Group continues to see revenue growth in line with
expectations in Asia and the Americas, it is experiencing some delays in
onboarding new customers in Europe. This is resulting from the direct impact
of feed ingredient prices affecting customer profitability as well as
customers in this region having more entrenched usage of other additives. This
shortfall in Europe had been expected to be compensated for in the second half
by volume from a recently onboarded new customer in another region which is
now opting for lower initial volumes before moving to full use in future.
· In addition, the strengthening of the Euro in 2023 will impact
the value of our reported revenue which is primarily sourced in US dollars
o As a result, we now expect to report total revenue for the year in excess
of €3.4 million
· The Board continues to see supportive conditions for the growth
of OHT's products, with the market looking for more sustainable feed
ingredients which improve animal production metrics and can replace existing
additives such as antibiotics, other synthetic additives and feed ingredients
from land based plants. The number of potential customers trialing
OceanFeed(TM) has increased significantly since the start of the year and the
potential sales value from those customers has more than doubled to over €10
million. The Board has strong visibility over FY24 revenues that support its
forecast revenue growth rates.
Mark Williams, CEO of Ocean Harvest Technology Group, commented:
"At our maiden set of interim results I am pleased to say that OHT has begun
to deliver on its objectives set out at its IPO in April. We are continuing to
strengthen our global sales team and build out our supply chain. We will also
continue to invest in R&D to innovate and enhance our existing customer
offering in the markets the Group operates in. We will continue to manage some
of the short term onboarding delays and we look forward to delivering on our
long term growth strategy for our new and existing shareholders."
For more information please contact:
Ocean Harvest Technology Group Plc Tel: +44 (0) 118 228 7612
Mark Williams, CEO
finnCap Ltd (Nominated Adviser and Sole Broker) Tel: +44 (0) 207 220 0500
Geoff Nash / Seamus Fricker / George Dollemore (Corporate Finance)
Charlotte Sutcliffe / Harriet Ward (ECM)
Camarco (Financial PR Adviser) Tel: +44 (0) 203 757 4991
oht@camarco.co.uk (mailto:oht@camarco.co.uk)
Tom Huddart / Rosie Driscoll / Letaba Rimell
Notes to Editors
Ocean Harvest Technology Group plc is a global leader in the development and
commercialisation of value adding products from multiple species of seaweed.
The Company provides a range of natural ingredients focused on improving
animal performance whilst protecting the environment, through its unique and
proven intellectual property portfolio. The Company's products are produced in
its facility in Vietnam from seaweeds soured from multiple markets across the
world.
For more information, please visit www.oceanharvesttechnology.com
(http://www.oceanharvesttechnology.com/) .
Chairman's Statement
Introduction
Ocean Harvest Technology is pleased to report its first set of results
following admission of the Company to the AIM market in April.
Ocean Harvest Technology is one of the leading commercial scale producers of
seaweed blend ingredients for the animal feed market.
The Group was founded in 2005 on the belief that an investment in research and
development would result in the ability to create seaweed ingredients that
would deliver a number of specific benefits across multiple animal species
based on the polysaccharides and other bioactive ingredients present in
particular species of seaweeds.
Since its establishment, the Group, through its research and development
programme, continues to build a portfolio of intellectual property and has had
commercial success in selling its products as ingredients to improve the
efficiency, profitability and sustainability of the animal feed chain by
delivering improvements in animal gut health.
Ocean Harvest Technology's ambition is to become the largest supplier of
proprietary blended seaweed ingredients to the global animal feed industry.
Period Under Review
The Initial Public Offering was completed in April, successfully raising funds
to allow the Company to focus on its strategic growth objectives of investing
in sales and marketing, research and development and our supply chain.
At the time of the IPO, additional expertise joined the board in the form of
non-executive directors David Tilston, Christine Maggs and Stephen Walker.
The Board believes that Ocean Harvest Technology has enormous potential to
capitalise on the growing demand for sustainable and natural ingredients which
improve the profitability and sustainability of feeding production animals.
OceanFeed(TM) has demonstrated benefits when used in multiple species of
production animals through improved growth rates and feed conversion
efficiency and lower mortality rates. OceanFeed(TM) also has a lower carbon
footprint than ingredients and additives produced from land-based plants and
generates economic benefits in the communities where our seaweed raw material
is harvested.
The Company anticipates upcoming R&D and trial data demonstrating a range
of benefits provided by its feed additives, which the Directors believe will
enable Ocean Harvest Technology to attract new customers and access new
markets within the animal feed industry.
Conclusion
The Board remains focused on ensuring the Company delivers on its long term
growth opportunity and ensuring that its business is run in a sustainable and
socially responsible manner with a strong level of governance oversight from
the Board of Directors.
Ashley Head
Chairman
Chief Executive's Statement
Introduction
Ocean Harvest Technology is one of the leading producers of seaweed based
ingredients for use in the animal feed industry. The business has achieved
strong growth in the first six months driven by the acquisition of new
customers, the expansion of our supply chain and continued investment in
research and development.
Customer Trials
We continue to assist potential customers to run trials to demonstrate the
efficacy and application of the Company's OceanFeed(TM) products. OHT
currently has trials scheduled or in progress with over 20 potential
customers, which is a continued increase in the size of our customer trial
pipeline since the start of the year.
The pipeline of customer trials represents potential annual product revenue of
over €10 million, which is an increase from the €5 million pipeline at the
start of the year.
Seaweed Sourcing and Processing
The Company has continued to expand its supply chain, on-boarding new
suppliers in new and existing markets for its key seaweed species. We have
commenced sourcing seaweed from east Africa for the first time during H1 2023
and returned to sourcing from the Philippines where we had not sourced from
since before the pandemic. We have onboarded new suppliers in Indonesia and
increased volumes from existing suppliers in that important market. Our
visibility and confidence of future seaweed supplies has grown with these
developments which will enable our continued growth.
In addition, the Company has recently entered into a strategic arrangement
with a supplier of brown seaweed which has guaranteed its supply to the
Company at favourable pricing for at least the next two years. We are
progressing the development of similar arrangements with other seaweed
suppliers.
Our Vietnam facility had the full use of the second grinding line which was
installed and commissioned in late 2022. In addition to providing increased
volume capacity to the facility, we have observed that the efficiency of this
new line has also contributed to lower yield losses when processing the
seaweed raw material. This has been helpful in our margin improvement across
the business.
During the period we commissioned an independent party to conduct a Life Cycle
Analysis (LCA) of our OceanFeed(TM) product and calculate its carbon
footprint. This calculated that 1 tonne of OceanFeed(TM) generated total
CO(2) equivalent emissions of 596kg, comprised of direct emissions from the
product LCA of 433kg and 163kg of emissions from corporate overhead. These
direct carbon emissions of 433kg per tonne are over 30% lower (and in some
cases 90% lower) than the CO(2) equivalent emissions of other common
ingredients in animal feed such as wheat, corn and soy. This is mainly
because the seaweed we source uses no arable land, fresh water or
fertilisers.
The analysis goes on to demonstrate that OceanFeed(TM) can be a net-negative
carbon product in its own right across its whole cycle as i) seaweed absorbs
carbon prior to harvest and ii) using OceanFeed(TM) as an additive can result
in producers using less animal feed. Therefore, using one tonne of
OceanFeed(TM) can reduce total CO(2) equivalent emissions by over 10 tonnes.
Research and Development
We were very pleased during the period to announce the results of a number of
research and development trials which have demonstrated additional
applications of OceanFeed(TM) or provided additional evidence of previously
demonstrated applications of OceanFeed(TM). These results included:
· A laying hen trial confirmed improvements in both egg production
and feed efficiency when birds were fed an OceanFeed(TM) Poultry supplemented
diet. These performance improvements materially increased income per hen.
· A catfish trial demonstrated that fish fed with
OceanFeed(TM) Aqua in their diets had higher feed intake and weight gain,
leading to a substantial increase in final live weight.
· A trial with juvenile shrimp where OceanFeed(TM) Aqua improved
both weight gain and feed efficiency, thus reducing production costs.
OceanFeed(TM) Aqua also helped reduce mortality in a disease challenge trial
run in parallel.
· A commercial swine trial reported material improvements in feed
efficiency in piglets with OceanFeed(TM) Swine included in their diet.
OceanFeed(TM) Swine successfully replaced a combination of seven conventional
gut health additives.
In the period, the Company was also granted its first patent. Patent No: GB
2 594 432 is focused on the efficacy of OceanFeed(TM) in layer hens and
protects the claim made by the Company that use of a seaweed blend as a feed
supplement for egg laying birds improves the quantity and/or quality of eggs
produced. Other patent applications submitted by OHT have been progressing
with the relevant agencies.
Global Seaweed Market
The World Bank stated in its recently published Global Seaweed Report 2023
that it views seaweed as a high growth input to many developing industries.
In particular:
· The top four opportunities cited for new growth in seaweed
applications are Animal Feed, Pet Feed, Methane Reduction Additives and
Biostimulants
· In discussing the animal feed and pet feed opportunities the
report cites the pre-biotic effect of seaweed, and states the improvements in
feed efficiency, production economics and anti-biotic replacement ability of
seaweed
· The report cites OceanFeed(TM) as a product that delivers
specific benefits to animals, quoting the performance benefits of
OceanFeed(TM) Bovine and OceanFeed(TM) Swine
· It acknowledges the challenge in building supply chain but it
does go on to say that OHT is a company that has already built a supply chain
that gives it access to high volumes of seaweed
· The report cites the three key challenges in growing an industry
of seaweed ingredients for animal and pet feed as:
o having the R&D to demonstrate the product's efficacy
o having a new customer onboarding timeline
o building the supply chain
We believe that this independent analysis supports our conviction around the
major drivers for our business and our strategy to exploit them.
Conclusion and Outlook
In the period, we have delivered very substantial product revenue growth over
the same period of last year, and gross margins have increased significantly.
The Company has strong momentum and continues to onboard new customers and the
improvements achieved in gross margin year to date are expected to continue
due to the revised selling price levels and OHT's developments in seaweed
sourcing. The outlook for OHT's supply of seaweed remains strong and
supportive of continued growth in the Company's end product sales.
Whilst OHT continues to see revenue growth in line with expectations in Asia
and the Americas, it is experiencing some delays in onboarding new customers
in Europe. This is resulting from the direct impact on feed ingredient prices
and customer profitability as well as customers in this region having more
entrenched usage of other feed additives. This shortfall in Europe had been
expected to be compensated for in the second half by volume from a recently
onboarded new customer in another region which is now opting for lower initial
volumes before moving to full use in future. In addition the strengthening
of the Euro in 2023 will impact the value of our reported revenue which is
primarily sourced in US dollars.
As a result, we now expect to report full year total revenue of not less than
€3.4 million.
Notwithstanding these revenue delays, the Board does not see any change in the
longer term outlook for the business and its revenue growth. The market
backdrop remains supportive of OHT's products with customers looking for more
sustainable feed ingredients which improve animal production metrics and can
replace existing additives such as antibiotics, other synthetic additives and
feed ingredients from land based plants. We have onboarded over 10 customers
in the first six months of the year and the pipeline of potential customers
trialling OHT's products continues to grow in terms of the number of customers
and has more than doubled in potential sales value since the start of the year
to over €10 million. This demonstrates the increasing interest and
acceptance of key players in the animal feed sector to include OceanFeed(TM)
blended seaweed ingredients to achieve production and sustainability benefits.
Financial Summary
The Company has prepared the following financial summary, in addition to the
attached financial statements, in the same format as previous announcements to
ensure consistency of approach and comparability. This summary shows our
product revenue and separates the other revenue we record which is a
reimbursement of shipping arranged by OHT on behalf of its customers and on
which we do not charge a margin. It also separates non-operating and IPO
related expenses to show an EBITDA and an adjusted earnings number.
Six months to Six months to Year ended
30-Jun-23 30-Jun-22 31-Dec-22
€ € €
Product revenue 1,576 952 2,513
Other revenue 177 279 495
Reported revenue 1,754 1,231 3,008
Cost of goods sold 1,190 1,003 2,229
Gross Margin 564 227 779
Gross Margin % 36% 24% 31%
Overheads excluding IPO costs, share based payments, depreciation and finance 1,784 1,434 3,121
costs
EBITDA (1,219) (1,206) (2,342)
Finance expense 77 44 50
Depreciation 35 25 52
Other - - 456
Adjusted Earnings (1,331) (1,276) (2,900)
IPO transaction costs 754 - -
Share based payments 97 - -
Profit (loss) before tax (2,182) (1,276) (2,900)
Revenue
Product revenue grew 66% to €1.58 million (H1 2022 €0.95 million.) driven
from new customer acquisition and an increase in average selling prices. The
Company sold significant volumes of its proprietary blended seaweed products
to over 40 customers, increasing from the circa 30 sold to during 2022. These
new customers include one of the largest UK animal feed pre-mix companies and
a top five swine producer in the US.
The Company has been able to increase average selling prices by demonstrating
the significant financial benefits of using its products to new customers and
through eliminating selling concessions which the Company had offered to
customers in previous years in response to the high shipping costs resulting
primarily from the Covid-19 pandemic.
Profitability
The Company recorded gross margin of €0.56 million in the first half vs
€0.23 million achieved in the first half of last year. Gross margins have
benefited from the increases in average selling prices but also from expanded
seaweed sourcing with improved quality, and therefore better production
yields. The gross margin of 36% on product revenue in H1 is a substantial
increase on the equivalent margin of 24% and 31% recorded in H1 and full year
2022 respectively. We believe that we will be able to further improve gross
margin as we scale the business further.
Administration expenses have increased by €0.4 million over the first half
of last year due to a number of factors in personnel expenses including
additional headcount and the making of incentive accruals throughout the
year. This led to an adjusted earnings loss of €1.3 million, consistent
with the same period last year.
The Company also recorded charges in the period of €0.8 million in IPO
transaction expenses including legal, professional and advisory costs. The
total reported loss for the period after these items has increased to a loss
of €2.2 million from €1.3 million in H1 2022 primarily due to these items.
EPS
Basic loss per share of €0.023 has increased from a loss of €0.019 in June
2022.
Cash Flow
The IPO gross proceeds of €6.9 million have significantly improved cash
flow, with a cash balance of €4.8 million at 30 June 2023, however operating
cash flow for H1 2023 is impacted by working capital increases from inventory
build, particularly of semi-finished goods to support sales volume growth, and
trade debtors increased in line with sales growth. We have worked on the
efficiency of these balances with debtors days moving from 145 to 102 and
inventory representing 189 days sales vs 213 days sales in H1 2022.
Non current asset expenditure has also increased with investment in the
Vietnam manufacturing facility, R&D activity and systems development
costs.
As part of the IPO, all of the convertible loan notes which were previously
outstanding were converted into shares in the Company. In addition the IPO
proceeds were used to repay the working capital facility that it had with one
of its shareholders, hence the Company is in a strong financial position and
has no external debt.
Mark Williams
CEO
Unaudited Condensed Consolidated Statement of Total Comprehensive Income
for the interim period ended 30 June 2023
Note Six months to Six months to Year ended 31 Dec 2022
30 Jun 2023 30 Jun 2022
€ € €
Product revenue 1,576,332 951,913 2,513,068
Other revenue 177,478 278,978 495,227
Total revenue 6 1,753,810 1,230,891 3,008,295
Cost of sales (1,189,624) (1,003,495) (2,229,108)
Gross profit 564,186 227,396 779,187
Other operating income 19,930 2,602 9,004
Administrative expenses (1,935,142) (1,461,869) (3,476,495)
Operating loss (1,351,026) (1,231,871) (2,688,304)
Finance expense (77,074) (44,484) (212,380)
IPO transaction costs (753,885) - -
Loss before taxation (2,181,985) (1,276,355) (2,900,684)
Taxation - 51,188 64,817
Loss for the period (2,181,985) (1,225,167) (2,835,867)
Other comprehensive income
Item that may be subsequently reclassified to profit or loss:
Currency translation differences 496 (596) 50,321
Total comprehensive loss, net of tax (2,181,489) (1,225,763) (2,785,546)
Total comprehensive loss for the period attributable to owners of the parent (2,181,489) (1,225,763) (2,785,546)
Loss per share - basic 5 (0.023) (0.019) (0.044)
The above condensed consolidated statement of total comprehensive income
relates to continuing operations for the Company.
Unaudited Condensed Consolidated Statement of Financial Position
as at 30 June 2023
Note 30 Jun 2023 30 Jun 2022 31 Dec 2022
ASSETS € € €
Non-current assets
Right of use asset 101,229 297,917 219,076
Intangible assets 7 109,962 8,923 20,617
Property, plant and equipment 373,999 129,121 346,521
Total non-current assets 585,190 435,961 586,214
Current assets
Trade and other receivables 8 1,290,706 3,525,560 1,251,026
Inventories 1,016,729 892,083 629,865
Corporation tax assets 72,537 96,709 62,412
Cash and cash equivalents 4,756,926 549,407 1,194,440
Total current assets 7,136,898 5,063,759 3,137,743
Total assets 7,722,088 5,499,720 3,723,957
EQUITY AND LIABILITIES
Equity
Share capital 9 1,477,482 761,448 761,448
Share premium 9 8,128,086 - -
Share-based payment reserve 10 206,406 - 109,456
Merger reserve 26,932,455 26,932,455 26,932,455
Foreign exchange reserve (47,343) (98,160) (47,839)
Retained losses (29,583,653) (25,790,969) (27,401,668)
Total equity 7,113,433 1,804,774 353,852
Non-current liabilities
Lease liability 47,613 245,019 74,504
Total non-current liabilities 47,613 245,019 74,504
Current liabilities
Trade and other payables 493,265 438,556 436,534
Convertible loans 11 - 2,352,260 2,285,030
Lease liability 67,777 77,825 170,514
Borrowings 12 - 581,286 403,523
Total current liabilities 561,042 3,449,927 3,295,601
Total liabilities 608,655 3,694,946 3,370,105
Total equity and liabilities 7,722,088 5,499,720 3,723,957
Unaudited Condensed Consolidated Statement of Changes in Equity
for the interim period ended 30 June 2023
Share Share Share-based payment Merger Foreign exchange reserve Retained Total
€
capital premium reserve reserve losses equity
€ € € € € €
As at 1 January 2023 761,448 - 109,456 26,932,455 (47,839) (27,401,668) 353,852
Loss for the period - - - - - (2,181,985) (2,181,985)
Other comprehensive loss:
Foreign currency exchange difference - - - - 496 - 496
Total comprehensive loss for the period 761,448 109,456 26,932,455 (47,343) (29,583,653) (2,181,489)
Transactions with owners
Issue of share capital 434,093 6,511,388 - - - - 6,945,481
Conversion of convertible loan notes (Note 11) 281,941 2,220,658 - - - - 2,502,599
Cost of raising equity - (603,960) - - - - (603,960)
Share-based payment - - 96,950 - - - 96,950
Total transactions with owners 716,034 8,128,086 96,950 - - - 8,941,070
As at 30 June 2023 1,477,482 8,128,086 206,406 26,932,455 (47,343) (29,583,653) 7,113,433
Share Share Share-based payment Merger Foreign exchange reserve Retained Total
€
capital premium reserve reserve losses equity
€ € € € € €
As at 1 January 2022 761,448 - - 26,932,455 (98,160) (24,565,802) 3,029,941
Loss for the period - - - - - (1,225,167) (1,225,167)
Other comprehensive loss:
Foreign currency exchange difference - - - - (596) - (596)
Total comprehensive loss for the period 761,448 - - 26,932,455 (98,756) (25,790,969) 1,804,178
As at 30 June 2022 761,448 - - 26,932,455 (98,756) (25,790,969) 1,804,178
Unaudited Condensed Consolidated Statement of Changes in Equity
for the interim period ended 30 June 2023 (continued)
Share Share Share-based payment Merger Foreign exchange reserve Retained Total
€
capital premium reserve reserve losses equity
€ € € € € €
As at 1 January 2022 761,448 - - 26,932,455 (98,160) (24,565,802) 3,029,941
Loss for the year - - - - - (2,835,866) (2,835,866)
Other comprehensive loss:
Foreign currency exchange difference - - - - 50,321 - 50,321
Total comprehensive loss for the year 761,448 - - 26,932,455 (47,839) (27,401,668) 244,396
Transactions with owners
Share-based payment - - 109,456 - - - 109,456
Total transaction with owners - - 109,456 - - - 109,456
As at 31 December 2022 (Unaudited) 761,448 - 109,456 26,932,455 (47,839) (27,401,668) 353,852
Unaudited Condensed Consolidated Statement of Cash Flows
Six months to 30 Jun 2023 Six months to 30 Jun 2022 Year end to
31 Dec 2022
€ € €
Cash flows from operating activities
Loss before taxation (2,181,985) (1,276,355) (2,900,684)
Adjustments for:
Depreciation of property, plant, and equipment 32,413 25,381 51,685
Amortisation of right-of-use assets 71,589 76,616 153,232
Amortisation of intangible assets 6,485 - -
Finance expense 77,074 44,484 212,380
IPO transaction costs 753,885
Loss on disposal of property, plant and equipment - - 1,426
Share based payment 96,950 - 109,456
(1,143,589) (1,129,874) (2,372,505)
Changes in working capital
(Increase)/decrease in inventories (386,864) (162,215) 100,003
Increase in trade and other receivables (49,805) (2,540,269) (210,953)
Increase in trade and other payables 56,731 211,402 210,959
Cash used in operations (1,523,527) (3,620,956) (2,272,496)
Taxation credits received - 57,769 50,914
Net cash used in operations (1,523,527) (3,563,187) (2,221,582)
Cash flows from investing activities
Purchase of property, plant and equipment (59,890) (30,290) (273,752)
Payments for development costs (76,209) - -
Purchase of intangibles (19,622) - (11,694)
Net cash flow used in from investing activities (155,721) (30,290) (285,446)
Cash flow from financing activities
Proceeds from issue of share capital 6,945,481 - -
Cost of share issue (1,357,845) - -
Proceeds from convertible loan notes - 2,352,260 2,160,030
(Repayments)/proceeds from related parties (403,523) 166,927 (10,836)
Interest paid on borrowings (20,200) (22,819) (50,097)
Principal paid on lease liabilities (82,874) (61,131) (147,976)
Interest paid on lease liabilities (11,068) (21,665) (38,862)
Net cash generated from financing activities 5,069,971 2,413,572 1,912,259
Increase/(decrease) in cash and cash equivalents 3,390,723 (1,179,905) (594,769)
Cash and cash equivalents at beginning of period 1,194,440 1,739,935 1,739,935
Effect of foreign exchange rate movements 171,763 (10,624) 49,274
Cash and cash equivalents at the end of the period 4,756,926 549,406 1,194,440
for the interim period ended 30 June 2023
Notes to the unaudited interim report for six months ended 30 June 2023
1. General Information
Ocean Harvest Technology Plc (the "Company") is a public limited company which
is listed on the AIM Market of the London Stock Exchange and incorporated and
domiciled in the UK. Its address of its registered office is 1650 Waterside
Drive Arlington Business Park, Theale, Reading, England, RG7 4SA. The
registered number of the Company is 13411717.
2. Basis of preparation
The condensed consolidated interim financial statements include the results of
Company and its subsidiaries ("the Group") for the six months ended 30 June
2023 and have not been audited. These condensed consolidated interim financial
statements do not comprise statutory accounts within the meaning of section
434 of the Companies Act 2006.
These condensed consolidated interim financial statements have been prepared
in accordance with the AIM rules and the recognition and measurement
requirements of UK-adopted International Accounting Standards ("UK-IAS") and
adopting the accounting policies that will be applied in the 31 December 2023
annual financial statements and consistent with those disclosed in the AIM
admission document.
These condensed consolidated financial statements should be read in
conjunction with the historical financial information contained within the AIM
admission document, which is available on the Group's website at:
www.oceanharvesttechnology.com (http://www.oceanharvesttechnology.com)
The Group's statutory annual financial statements for the year ended 31
December 2022 were prepared under FRS 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland and delivered to the Registrar of
Companies. The Group's auditors reported on these accounts and their report
was unqualified, did not draw attention to any matters by way of emphasis and
did not contain any statements under section 498 (2) or (3) of the Companies
Act 2006.
These condensed consolidated interim financial statements were approved by the
Board of Directors on 11 September 2023.
3. Accounting policies
Going concern
The Directors believe that the Group has adequate resources to continue
trading for the at least 12 months from the date of approval of these
condensed consolidated interim financial statements. Accordingly, the
Directors continue to adopt the going concern basis of accounting in preparing
these financial statements.
Summary of significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
interim financial statements are the same as those applied by the Group in the
financial statements disclosed in the AIM admission document.
4. Critical accounting judgements and estimates
The preparation of the condensed consolidated interim financial statements
requires Directors to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
judgements and estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the audited consolidated financial statements for inclusion in
the AIM admission document.
5. Loss per share
The calculation of basic and diluted loss per share is based upon the loss
attributable to equity holders divided by the weighted average number of
shares in issue during the period.
The loss incurred by the Group means that the effect of any outstanding
options would be anti-dilutive and is ignored for the purposes of the diluted
loss per share calculation.
Six months to 30 Jun 2023 Six months to Year ended
€
30 Jun 2022
31 Dec 2022
€
€
Loss for the period from continuing activities (2,181,986) (1,225,167) (2,835,867)
Six months to 30 Jun 2023 Six months to 30 Jun 2022 Year ended
No
No
31 Dec 2022
No
Weighted average number of ordinary shares 94,073,289 63,999,883 63,999,883
Six months to 30 Jun 2023 Six months to 30 Jun 2022 Year ended
€
€
31 Dec 2022
€
Basic and diluted loss per share (0.023) (0.019) (0.044)
6. Revenue
All of the Group's revenue was generated from the sale of goods and was
recognised at a point in time (rather than over time). The Group considers the
control over goods is transferred to the customer at the point of shipment and
recognises revenue at this point in time.
Six months to Six months to Year ended 31 Dec 2022
30 Jun 2023 30 Jun 2022
€ € €
Product revenue 1,576,332 951,913 2,513,068
Other revenue 177,478 278,978 495,227
Total revenue 1,753,810 1,230,891 3,008,295
7. Intangible assets
Patents and licenses Development costs Total
€
€
€
Cost
At 1 January 2023 29,696 - 29,696
Additions 19,622 76,209 95,831
At 30 June 2023 49,318 76,209 125,527
Amortisation
At 1 January 2023 9,079 - 9,079
Charge for the period 2,226 4,259 6,485
At 30 June 2023 11,305 4,259 15,564
Net book
At 30 June 2023 38,013 71,950 109,963
At 31 December 2022 20,617 - 20,617
Development costs are internally generated intangible assets associated with
the development of Group's products.
8. Trade and other receivables
Due within one year 30-Jun-23 30-Jun-22 31 Dec 2022
€ € €
Trade receivables 957,444 941,595 915,912
Other receivables 195,000 133,607 218,830
Prepayments 138,262 98,098 116,285
Cash in transit 2,352,260
Total trade and other receivables 1,290,706 3,525,560 1,251,027
Trade receivables are amounts due from customers for services performed in the
ordinary course of business. The Group negotiates the terms and payment
conditions with each customer separately. The amounts due from customers are
generally due for settlement within 45 days, but the Group does offer extended
credit terms to certain customers. For new customers, the Group adopts a
policy whereby 50% of the payment is due before fulfilment of any order. Any
amounts received in advance are held as a contract liability and recognised in
revenue on dispatch.
The carrying amount of trade and other receivables approximates fair value.
Other receivables include deposits and VAT due.
Cash in transit relates to convertible loan note proceeds not yet received
into the Company's UK bank account.
9. Share capital and share premium
Number of Ordinary Shares Share capital Share premium Total
No € € €
As at 1 January 2023 63,999,613 761,448 - 761,448
Share placing 37,500,000 434,093 6,511,388 6,945,481
Conversion of convertible loan notes 24,356,084 281,941 2,220,658 2,502,599
Issue costs - - (603,960) (603,960)
As at 30 June 2023 125,855,697 1,477,482 8,128,086 9,605,568
On 4 April 2023, the entire issued share capital of the Company was admitted
to trading on AIM and the Company successfully raised £6,000,000
(€6,945,481) gross proceeds by placing 37,500,000 new Ordinary Shares at 16p
per share. As part of the admission, the convertible loan notes converted to
24,356,084 ordinary shares. Further details on the conversion can be found in
note 11.
10. Share-based payment schemes
The Group operates two employee share option schemes that are accounted for as
equity-settled share-based payments. The total charge for the ended 30 June
2023 in respect of the two options schemes was €96,950 and was recognised in
profit or loss.
11. Convertible loan notes
30-Jun-23 30-Jun-22 31 Dec 2022
€ € €
2022 Redeemable Convertible Loan - - 2,285,030
Total Convertible loan notes - - 2,285,030
In June 2022, the Group issued £2,025,000 (€2,352,260 on conversion) of
convertible loan notes ("CLNs") to existing shareholders in order to fund the
continuing operations and development activities of the Group in advance of
the Company's listing.
The CLNs accrued interest on the principal amount at 10% per annum from the
date on which the CLN are issued up to and including the 31 December 2022 and
6% per annum until the date at which the CLNs were converted. Up to the point
of conversion, the total interest accrued was €158,499 (£136,923).
The CLN's converted into 24,356,084 fully paid shares in the Company upon
admission to trading on AIM on 4 April 2023 at a discount of 30% and 45% to
the issue price.
12. Borrowings
30-Jun-23 30-Jun-22 31 Dec 2022
€ € €
Current
Amounts due to Heaton Holdings Limited - 581,286 403,523
Total borrowings - 581,286 403,523
Related party loans
The Group had a working capital loan with Heaton Holdings Limited, a related
party in which Stuart Waring is a director. Interest was charged at 10 per
cent per annum upon amounts drawn down. The loan was secured by a fixed charge
over the Group's assets.
During the period to 30 June 2023 the full balance of the loan was repaid to
Heaton Holdings Limited.
13. Significant events after the reporting date
There have been no significant events to report since 30 June 2023 and the
date of approving this report on 11 September 2023
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFFEIAIILLIVRecent news on Ocean Harvest Technology
See all newsREG - Ocean Harvest Tech. - Strong growth in Q1 and minimal US Tariff Exposure
AnnouncementREG - Ocean Harvest Tech. - Trading Update
AnnouncementREG - Ocean Harvest Tech. - Result of General Meeting
AnnouncementREG - Ocean Harvest Tech. - Secured Loan Notes & Warrants and Notice of GM
AnnouncementREG - Ocean Harvest Tech. - Interim Results
Announcement