REG - Sabien Technology - Half-year Report
31/03/2022 16:15
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RNS Number : 8312G Sabien Technology Group PLC 31 March 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310
31 March 2022
Sabien Technology Group Plc
("Sabien", the "Company" or the "Group")
Unaudited Interim Results for the six months ended 31 December 2021
Sabien Technology Group plc (AIM: SNT), a Company focussed on building a
portfolio of solutions, in the heating, cooling and transportation sectors,
that deliver immediate reductions in CO(2) emissions announces its unaudited
interim results for the six-month period ended 31 December 2021 (the "Period")
(comparative figures are shown for the comparable period in the previous
financial year unless otherwise stated):
Highlights in the Period
· Sales revenue £121k (2020: £412k)
· Sales orders received £278k (2020: £362k)
· M2G units sold 15 (2020: 175)
· M2G cloud solution packages sold 31 (2020: nil)
· Gross profit £75k (2020: £325k)
· Gross profit margin 62% (2020: 79%)
· Loss before tax £569k (2020: £310k loss)
· Net cash at the end of the period £624k (£229k
as at 31 December 2020)
· Overseas sales £6k (2020: £18k)
· Completion of significant initial £100k
investment in emerging green oil to hydrogen technology - Proton Technologies
Canada Inc ("Proton")
· Established a special purpose vehicle to develop
City Oil Field Inc. ("COF") installations internationally called b.grn Group
Ltd ("b.grn"), pronounced "Be Green"
· Signed a Memorandum of understanding ("MOU") with
COF and b.grn to formalise the purchase price of COF equipment and Sabien's
revenue model from the arrangement
Highlights since the period end
· Sales of £269k to 31 March 2022 (£560k for
three months ended 31 March 2021)
· Net cash balance of £325k to 31 March 2022.
(£1.76m to 24 March 2021)
· £264k Further Repeat Order 1 - order received
via a major facilities management contractor on behalf of a UK government
department, £206k has been recognised prior to 31 March 2022, the balance of
installation and cloud services revenue (total £58k) will be recognised in
FY22 and FY23 with timing not yet finalised.
· £264k Further Repeat Order 2 - confirmation has
been received that a further £264k repeat order from the same UK government
department via a different facilities management contractor will be placed
within the next two weeks. The revenue profile will be the same as the first
£264k order.
· Completion of significant £100k investment in
emerging green technology
· Completion of United Kingdom licence agreement
with Proton for the provision of an onshore 20 tonnes of hydrogen per day
processing facility
· Completion of option agreement with Proton to
establish a COF facility at Proton's site in Saskatchewan, Canada
· MOU signed with Irish Renewable Fuels Ltd in
relation to the potential establishment of a COF facility at a site in Ireland
· b.grn signed a framework agreement with a
subsidiary of Tate Group Limited ("Tate") for Tate to become Sabien and
b.grn's COF development manager
Chairman's statement
Since Sabien's last annual report in August 2021, much has happened on an
economic level and within Sabien's business that reinforces that Sabien is
well positioned to capitalise on the current "Green Economic" boom. We have
all watched the conflict in Ukraine in a state of horror, and the economic
knock-on impact will be significant. Oil prices recently hit a 14 year high
of $130 per barrel and gas prices recently hit an all-time high of over 500p
per therm. Coupled with this, the United Nations endorsed an historic
resolution on 2 March 2022 to end plastic pollution by addressing the whole
lifecycle of plastic, including its production, design and disposal.
Sabien's Green Aggregation Strategy has begun to focus on three key areas -
the existing Sabien CO2 mitigation device for commercial boilers - M2G, the UK
rollout of Proton's oil to hydrogen technology, and the COF plastic to oil
technology. Key updates on these areas are as follows.
M2G Business
The M2G business has been adversely impacted by the world semiconductor supply
shortage which has delayed Sabien's sales pipeline conversion. In addition
to this, there has been significant Covid related churn in personnel with
Sabien's key partners which has also delayed sales. Despite this, we consider
that the future for the M2G business is strong. While the sales were
disappointing during the first half, the order flow has not dropped
significantly, and the Board is hopeful of recovering the sales during 2022,
with the impact on Group profitability due to the delay in sales expected to
be materially neutral over a 12-month period providing supply chain
difficulties do not worsen.
The key metrics to note are the growth in sales of M2G Cloud Solutions (31 in
the period, with open forward orders to install a further 115 plus 103 from
Further Repeat Order 2) and that more than half of the customers having Cloud
Solutions installed have ongoing discussions to install to the customer's
wider worldwide, EMEA or UK estates. Customer feedback from the M2G Cloud
Solution to date has been very positive. In addition, our channel partner
strategy is developing with 56% of sales orders received in the period through
channel partners compared to 12% in the same period in FY21.
Consultancy is now an integral part of our solution and is included with all
new business. The efficiency insight analytics M2G Cloud connect delivers is
unique and well received by clients. The Energy Savings dashboard has an
annual renewal which is developing Sabien's recurring revenue streams.
It is also encouraging to see the forward order book of £404k (including
Further Repeat Order 2) of which at least £345k is expected to convert to
revenue before the end of the financial year. The next generation of the M2G
Cloud Solution - the M2G Evo - development is well advanced and will be market
ready before the end of 2022.
Proton UK Business
Discussions are ongoing with multiple UK oil field owners to identify suitable
sites. Owners are motivated to develop a hydrogen production facility on
their near to end of life fields, but the sites identified to date have not
been suitable for a Proton installation.
COF Business
In combination with Sabien's b.grn development partner, potential sites have
been identified in England, Ireland, Finland and also at Proton's site in
Saskatchewan Canada. B.grn has appointed a development manager - Tate Group
Ltd. Sabien's sales agency revenue model with COF has been contractually
agreed. Market analysis of the UK plastic waste market is underway to
identify the best input to be used in the COF process which is able to process
the majority of plastic waste types, as well as mixed or dirty waste streams.
Sabien working capital and director's loan
In order to support the ongoing development of Sabien's business and to
provide further working capital, I have agreed to provide a loan facility of
up to £209k to the Company through Parris Group Ltd (the "Loan"). The Loan,
which has an initial term of 12 months, can be repaid by any means, including
from the proceeds of the exercise of warrants I have in the Company which
expire in February 2023 (see the announcement of 3 February 2021 - the
"Warrants"). The key terms of the Loan are as follows:
· Up to £209,302.33 (the exercise value of the Warrants)
· Interest rate of 6%
· Interest payable quarterly
· Repayable on demand, after an initial period of 12 months unless
replaced by another debt facility
· Able to be repaid by the exercise of the Warrants or by way of
participation in a wider equity fundraising
· Unsecured
· For working capital purposes
· £100,000 has been immediately drawn down
In addition to the Loan, the £528k from Further Repeat Orders 1 and 2 will
provide additional working capital for the Group to continue for a period of
not less than 12 months from today's date. Approximately £150,000 of the
cash expended during the first half of the year was of a non-recurring
nature. The Company will review its longer-term working capital requirements
as part of the audit process for the current financial year.
In summary, the Board remains committed to Sabien's strategic direction and
expects the strategy to deliver value for shareholders in the near future.
Richard Parris
Executive Chairman
31 March 2021
Related Party Transaction
Parris Group Ltd is a Company controlled by Richard Parris, the Executive
Chairman of the Company, and his family. The Board, other than Mr Parris,
considers, having consulted with Allenby Capital Limited, the Company's
nominated adviser, that the terms of the Loan are fair and reasonable insofar
as its shareholders are concerned.
For further information: +44 20 7993 3700
Sabien Technology Group plc
Richard Parris, Executive Chairman
Allenby Capital Limited (Nominated Adviser)
John Depasquale / Nick Harriss / Vivek Bhardwaj +44 203 328 5656
Peterhouse Capital Limited (Broker) +44 207 469 0930
Duncan Vasey / Lucy Williams
Sabien Technology Group Plc
Unaudited Condensed Group Statement of Comprehensive Income for the period
ended 31 December 2021
Notes 6 months to 31 December 2021 6 months to 31 December 2020 Year to
30
June
2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Revenue 121 412 971
Cost of Sales (46) (87) (153)
Gross Profit 75 325 818
Administrative expenses (639) (522) (1,182)
Exceptional item (9) (132) (180)
Operating loss (573) (329) (544)
Other income 8 19 35
Finance expense (4) - -
Loss before tax (569) (310) (509)
Tax credit - - -
Loss for the period attributable to equity holders of the parent company (569) (310) (509)
Other comprehensive income for the period (1) - -
(570) (310) (509)
Total comprehensive income for the period
Loss per share in pence - basic 3 (3.90)p (8.55)p (6.40)p
Loss per share in pence - diluted 3 (3.90)p (8.55)p (6.40)p
Sabien Technology Group Plc
Unaudited Condensed Group Statement of Financial Position as at 31 December
2021
Notes 31 December 2021 31 December 2020 30 June
2021
Unaudited Unaudited Audited
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 2 29 35
Other intangible assets 83 80 57
Investments 200 - 100
Total non-current assets 285 109 192
Current assets
Inventories 27 42 24
Trade and other receivables 166 70 51
Cash and cash equivalents 624 229 1,399
Total current assets 817 341 1,474
TOTAL ASSETS 1,102 450 1,666
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 137 366 161
Borrowings 36 - 36
Total current liabilities 173 366 197
Non-current liabilities
Borrowings 127 181 145
Total non-current liabilities 127 181 145
EQUITY
Equity attributable to equity holders of the parent
Share capital 4 3,354 3,058 3,350
Other reserves 3,553 2,181 3,509
Translation reserve (1) - -
Retained earnings (6,104) (5,336) (5,535)
Total equity 802 (97) 1,324
TOTAL EQUITY AND LIABILITIES 1,102 450 1,666
Sabien Technology Group Plc
Unaudited Condensed Group Cash Flow Statement for the period ended 31 December
2021
6 months 6 months Year
to to to
31 December 2021 31 December 2020 30 June
2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash flows from operating activities
Loss before taxation (569) (310) (509)
Adjustments for:
Depreciation and amortisation 24 27 51
Finance expense 4 - -
Foreign currency reserve movement (1) - -
Loss on disposal of fixed assets - - 11
Decrease in trade and other receivables (114) 12 32
Decrease/(increase) in inventories 4 (1) 15
Decrease in trade and other payables (15) (262) (466)
Net cash outflow from operating activities (667) (534) (866)
Cash flows from investing activities
Investments acquired (100) - (100)
Purchase of property, plant and equipment and intangible assets - (15) (33)
Purchase of intangibles (24) - -
Net cash outflow from investing activities (124) (15) (133)
Cash flows from financing activities
Proceeds from share issues 48 - 1,700
Repayment of borrowings (32) - -
Share issue costs - - (80)
Net cash generated by financing activities 16 - 1,620
Net (decrease)/increase in cash and cash equivalents (775) (549) 621
Cash and cash equivalents at beginning of period 1,399 778 778
Cash and cash equivalents at end of period 624 229 1,399
Sabien Technology Group Plc
Unaudited Condensed Group Statement of Changes in Equity as at 31 December
2021
Share capital Share premium Share based payment reserve Translation reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2020 3,058 2,180 1 - (5,026) 213
- - - (310) (310)
Loss for the period
1 July 2020 to
31 December 2020 -
3,058 2,180 1 (5,336) (97)
Balance at 31 December 2020
-
- - - (199) (199)
Loss for the period
1 January 2021 to 30 June 2021
-
292 1,408 - - 1,700
Share issue -
Share issue expenses - (80) - - (80)
-
3,350 3,508 1 (5,535) 1,324
Balance at 30 June 2021
-
- - - (569) (569)
Loss for the period
1 July 2021 to
31 December 2021 -
Warrant issue - (28) 28 - -
-
Share issue 4 44 - - 48
-
- - - - (1)
Exchange difference on consolidation
(1)
3,354 3,524 29 (6,104) 802
Balance at 31 December 2021
(1)
Sabien Technology Group Plc
Notes to the Financial Statements for the period ended 31 December 2021
1. Accounting policies
The interim financial information has not been audited or reviewed by the
auditors and does not constitute statutory accounts for the purpose of
Sections 434 and 435 of the Companies Act 2006.
The financial information in this document has been prepared using accounting
principles generally accepted under International Financial Reporting
Standards and is consistent with those used in the preparation of the most
recent annual financial statements.
The following significant principal accounting policies have been used
consistently in the preparation of the consolidated financial information of
the Group. The consolidated information comprises the Company and its
subsidiaries (together referred to as "the Group").
a) Basis of Preparation: The financial information in this
document has been prepared using accounting principles generally accepted
under UK adopted International Financial Reporting Standards ("IFRS").
The directors expect to apply these accounting policies which are consistent
with UK adopted International Financial Reporting Standards in the Group's
Annual Report and Financial Statements for all future reporting periods.
The Directors believe that, despite the losses incurred in the past six month
period and the uncertainty as to the timing of future profitability, the Group
is a going concern and have accordingly prepared these financial statements on
a going concern basis.
The key performance indicator for the Group is M2G unit sales which showed a
reduction in the six months to 15 units (2020: 175). In addition new M2G
Cloud sales were 31 units in the period (2020:nil). Despite this, the
Statement of Financial Position showed positive net assets of £802k at 31
December 2021 and cash reserves of £624k. The cashflow forecasts prepared by
the Directors confirm that the Group will have sufficient working capital to
settle its liabilities as they fall due for a period of not less than 12
months from the date of the approval of these financial statements.
The interim consolidated financial statements have been prepared on the
historical cost basis and are presented in £'000 unless otherwise stated.
b) Basis of consolidation: The condensed consolidated
financial statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries) at 31 December 2021.
Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefit from its
activities.
Except as noted below, the financial information of subsidiaries is included
in the condensed consolidated financial statements using the acquisition
method of accounting. On the date of acquisition the assets and liabilities of
the relevant subsidiaries are measured at their fair values.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
Accounting for the Company's acquisition of the controlling interest in Sabien
Technology Limited: The Company's controlling interest in its directly held
subsidiary, Sabien Technology Limited, was acquired through a transaction
under common control, as defined in IFRS 3 Business Combinations. The
directors note that transactions under common control are outside the scope of
IFRS 3 and that there is no guidance elsewhere in IFRS covering such
transactions.
IFRS contain specific guidance to be followed where a transaction falls
outside the scope of IFRS. This guidance is included at paragraphs 10 to 12 of
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. This
requires, inter alia, that where IFRS does not include guidance for a
particular issue, the directors may also consider the most recent
pronouncements of other standard setting bodies that use a similar conceptual
framework to develop accounting standards. In this regard, it is noted that
the UK standard FRS 6 addresses the question of business combinations under
common control.
In contrast to IFRS 3, FRS 6 sets out accounting guidance for transactions
under common control. The guidance contained in FRS 6 indicates that merger
accounting may be used when accounting for transactions under common control.
Having considered the requirements of IAS 8, and the guidance included in FRS
6, it is considered appropriate to use a form of accounting which is similar
to pooling of interest when dealing with the transaction in which the Company
acquired its controlling interest in Sabien Technology Limited.
In consequence, the condensed consolidated financial statements for Sabien
Technology Group Plc report the result of operations for the period as though
the acquisition of its controlling interest through a transaction under common
control had occurred at 1 October 2005. The effect of intercompany
transactions has been eliminated in determining the results of operations for
the year prior to acquisition of the controlling interest, meaning that those
results are on substantially the same basis as the results of operations for
the year after the acquisition of the controlling interest.
Similarly, the consolidated balance sheet and other financial information have
been presented as though the assets and liabilities of the combining entities
had been transferred at 1 October 2005.
Whilst FRS 6 is no longer effective similar requirements are set out in the
current UK Financial Reporting Standard, FRS 102, in respect of such
transactions.
The Group took advantage of Section 131 of the Companies Act 1985 and debited
the difference arising on the merger with Sabien Technology Limited to a
merger reserve.
c) Property, plant and equipment: Property, plant and
equipment are stated at cost less accumulated depreciation. Assets are written
off on a straight-line basis over their estimated useful life commencing when
the asset is brought into use. The useful lives of the assets held by the
Group are considered to be as follows:
Office equipment, fixtures and fittings
3-4 years
d) Intangible assets: Intellectual property, which is
controlled through custody of legal rights and could be sold separately from
the rest of the business, is capitalised where fair values can be reliably
measured.
Intellectual property is amortised on a straight line basis evenly over its
expected useful life of 20 years.
Impairment tests on the carrying value of intangible assets are undertaken:
· At the end of the first full financial year following
acquisition; and
· In other periods if events or changes in circumstances indicate
that the carrying value may not be fully recoverable.
If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of the fair value, less costs to sell, and
value in use. In assessing the value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not
been adjusted.
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately.
Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but only
in so far that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset in prior years. A reversal of an impairment loss is recognised
in income immediately.
e) Fixed asset investments: Fixed asset investments are stated
at cost less any provision for impairment in value.
f) Inventories: Inventories are valued at the lower of
average cost and net realisable value.
g) Financial Instruments
Financial Assets
The Group classifies its financial assets as financial assets at amortised
cost and cash. The classification depends on the purpose for which the
financial assets were acquired. Management determines the classification of
its financial assets at initial recognition.
Financial assets amortised cost are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non-current assets.
Trade receivables are classified as financial assets at amortised cost and are
recognised at fair value less provision for impairment. Trade receivables,
with standard payment terms of between 30 to 65 days, are recognised and
carried at the lower of their original invoiced and recoverable amount. Where
the time value of money is material, receivables are carried at amortised
cost.
A loss allowance is recognised on initial recognition of financial assets held
at amortised cost, based on expected credit losses, and is re-measured
annually with changes appearing in profit or loss. Where there has been a
significant increase in credit risk of the financial instrument since initial
recognition, the loss allowance is measured based on lifetime expected losses.
In all other cases, the loss allowance is measured based on 12-month expected
losses. For assets with a maturity of 12 months or less, including trade
receivables, the 12-month expected loss allowance is equal to the lifetime
expected loss allowance.
Short term financial assets are measured at transaction price, less any
impairment. Loans receivable are measured at transaction price net of
transaction costs and measured subsequently at amortised cost using the
effective interest method, less any impairment.
Financial Liabilities
The Group classifies its financial liabilities as trade payables and other
short term monetary liabilities. Trade payables and other short term monetary
liabilities are recorded initially at their fair value and subsequently at
amortised cost. They are classified as non-current when the payment falls due
more than 12 months after the balance sheet date.
h) Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short term highly liquid investments with original maturities of
three months or less, and bank overdrafts.
i) Revenue recognition
Revenue is measured based on the consideration to which the Group expects to
be entitled in a contract with a customer and excludes amounts collected on
behalf of third parties. The Group recognises revenue when it transfers
control of a product or service to a customer.
Revenue from sale of goods is recognised upon delivery and installation at a
customer site or delivery to a customer's incumbent facilities manager which
subsequently carries out the installation itself. However, in this latter
case, where the Group is responsible for the project management of the
installations, revenue is recognised upon installation at the customer site.
Where goods are delivered to overseas distributors, revenue is recognised at
the time of shipment from the Company's warehouse.
Revenue from services generally arises from pilot projects for customers and
is recognised once the pilot has been completed and the results notified to
the customer. Pilot projects generally have a duration of between 1 and 3
months.
Revenue from operating lease services rendered to customers is recognised on a
straight-line basis.
Revenue is shown net of value-added tax, returns, rebates and discounts and
after eliminating sales within the Group.
Interest income is accrued on a time basis by reference to the principal
outstanding and at the effective interest rate applicable.
j) Share-based payments: The Group has applied the
requirements of IFRS2 Share-based Payments. The Group issues options to
certain employees. These options are measured at fair value (excluding the
effect of non-market based vesting conditions) at the date of grant. The fair
value determined at the grant date is expensed on a straight-line basis over
the vesting period based on the Group's estimate of the shares that will
eventually vest and adjusted for the effect of non-market based vesting
conditions.
Fair value is measured by use of the Black-Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate for
the effects of non-transferability, exercise restrictions and behavioural
conditions.
k) Operating leases (Group as lessee): At inception of a
contract, the Group assesses whether a contract is, or contains a lease. A
lease is defined as 'a contract, or part of a contract, that conveys the right
to use an asset (the underlying asset) for a period of time in exchange for
consideration'. At lease commencement date, the Group recognised a right of
use asset and a lease liability on the balance sheet. The right of use asset
is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Group, an estimate of any
costs to dismantle and remove the asset at the end of the lease and any lease
made in advance of the lease commencement date (net of any incentives
received).
The Group depreciates the right of use asset on a straight-line basis from the
lease commencement date to the earlier of the end of the useful like of the
right of use asset or the end of the lease term. The Group also assesses the
right of use asset for impairment when such indicators exist. At the
commencement date, the Group measures the lease liability at the present value
of the lease payments unpaid at the date, discounted using the interest rate
implicit in the lease if that rate is readily available or the Group's
incremental borrowing rate. Lease payments included in the measurement of the
lease liability are made up of fixed payments, variable payments based on an
index or rate, amounts expected to be payable under a residual value
guarantee, and payments arising from purchase and extension options reasonably
certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments
made and increased for interest. It is remeasured to reflect any reassessment
or modification, or if there are changes to fixed payments. When the lease
liability is remeasured, the corresponding adjustment is reflected in the
right of use asset, or profit and loss if the right of use asset is already
reduced to zero.
The Group has elected to account for short-term leases and leases of low value
assets using the practical expedients. Instead of recognising a right of use
assert and lease liability, the payment in relation these are recognised as an
expense in profit or loss on a straight-line basis over the lease term.
applicable to operating leases where substantially all of the benefits and
risks of ownership remain with the lessor are charged to profit and loss on
the straight-line basis over the lease term.
l) Operating leases (Group as lessor): Assets leased to
customers under operating leases are included in property, plant and equipment
and are depreciated over their lease term down to their anticipated realisable
value on a straight-line basis. Anticipated realisable values are regularly
reassessed and the impact upon the depreciation charge is adjusted
prospectively.
m) Taxation: The charge for current tax is based on the results
for the period as adjusted for items that are non-assessable or disallowed. It
is calculated using rates that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax basis used in the computation of taxable profit. In
principle, deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets and
liabilities in a transaction which affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interest in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated at the rates that are expected to apply when the
asset or liability is settled. Deferred tax is charged or credited in the
statement of comprehensive income, except when it relates to items credited or
charged directly to equity, in which case the deferred tax is also dealt with
in equity.
Deferred tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority and the Group intends to settle
its current tax assets and liabilities on a net basis.
n) Foreign currencies: Assets and liabilities in foreign
currencies are translated into sterling at the rates of exchange ruling at the
statement of financial position date. Transactions in foreign currencies are
translated into sterling at the rate of exchange ruling at the date of
transaction. Exchange differences are taken into account in arriving at the
operating result.
Profit and losses of overseas subsidiary undertakings are translated into
sterling at average rates for the year. The statements of financial position
of overseas subsidiary undertakings are translated at the rate ruling at the
statement of financial position date. Differences arising from the translation
of Group investments in overseas subsidiary undertakings are recognised as a
separate component of equity.
Net exchange differences classified as equity are separately tracked and the
cumulative amount disclosed as a translation reserve.
The principal place of business of the Group is the United Kingdom with
sterling being the functional currency.
2. Segmental reporting
Based on risks and returns, the directors consider that the primary reporting
business format is by business segment which is currently just the supply of
energy efficiency products, as this forms the basis of internal reports that
are regularly reviewed by the Company's chief operating decision maker in
order to allocate resources to the segment and assess its performance.
Therefore, the disclosures for the primary segment have already been given in
interim financial information. The secondary reporting format is by
geographical analysis by destination. Non-UK revenues amounted to £6k which
were 5% of total revenues for the period.
During the period, sales to the Group's largest customers were as follows:
Sales revenue % of total revenue
£'000
Customer 1 76 63
Customer 2 13 11
Customer 3 10 8
Customer 4 5 4
3. Loss per share
The calculation of the basic loss per share is based on the loss attributable
to the ordinary shareholders, divided by the weighted average number of shares
in issue in the period.
6 months to 31 December 2021 6 months to 31 December 2020 Year to
30
June
2021
Unaudited Unaudited Audited
£'000 £'000 £'000
Loss for the period (570) (310) (509)
Basic and Diluted:
Weighted average number of shares in issue 14,630,643 3,626,964 8,899,259
Loss per share - basic and diluted (3.90)P (8.55)p (5.73)p
4. Share capital
The Company's issued Ordinary share capital is:
Amount Number of New Ordinary Shares of 3p each Number of Ordinary Shares of 0.5p each Number of Deferred Shares of 4.5p each Number of New Deferred Shares of 0.49p each
Allotted, called up and fully paid:
At 31 December 2021 £3,354,074 14,720,168 - 44,004,867 190,254,867
At 30 June 2021 £3,349,697 14,574,451 - 44,004,867 190,254,867
At 31 December 2020 £3,057,836 4,845,577 - 44,004,867 190,254,867
5. Share based payments
The Company has issued warrants that entitles the holders to purchase shares
in the Company with the warrants exercisable at the price determined at the
date of granting the warrant. The terms and conditions of the grants issued
are summarised below.
Grant date Number of instruments Exercise price Contractual life of instruments
2 February 2021* 1,395,349 15p 19 February 2023
20 January 2021** 8,333,333 30p 19 January 2022
* Exercise of the warrants is subject to and conditional on the Company's
middle market share price for each of the five Business Days immediately
preceding the date of the warrant exercise notice being equal to or exceeding
60p per share.
** There are no vesting conditions to be met and all warrants are to be
settled by the issue of shares.
The Group has recognised a charge of £nil arising from the share based
payments noted above in profit and loss for the period ended 31 December 2021.
During the period 50,000 relevant share warrants were exercised at a price of
30 pence per share.
At the period end there were 9,678,799 warrants outstanding. Post period end,
the 8,333,333 20 January 2021 warrants expired.
6. Seasonality
The business of the Group is not seasonal.
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