REG - Sabien Technology - Trading Update

Sabien TechnologyAnnouncement

07/07/2022 07:16

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RNS Number : 6041R  Sabien Technology Group PLC  07 July 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION
11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

7 July 2022

 

Sabien Technology Group plc

("Sabien", the "Company", or the "Group")

Trading Update

Sabien Technology Group plc (AIM:SNT), the company focused on a green
aggregation strategy, announces today a trading update ahead of the
publication of its final results for the year ended 30 June 2022.

During the year ended 30 June 2022, Sabien's Green Aggregation Strategy has
focussed on three principal technology-led initiatives. M2G, the existing
Sabien CO2 mitigation device for commercial boilers, the UK rollout of
Proton's oil to hydrogen technology, and the COF plastic to oil technology.

M2G Business

Despite the world semiconductor supply shortage and its impact on the
completion of sales during the second half of the 2022 financial year, the
Board is very pleased with the growth of the new M2G Cloud business.

During the 2022 financial year, 293 M2G Cloud Solutions were sold (2021: nil)
of which 262 (89.4% of the annual total) occurred in the second half of the
year.  In addition, the Company has deferred revenue of £175k, and open
orders of £91k, that will carry over into FY23 as well as £23k of recurring
revenue from the M2G Cloud Solutions sold to date to be recognised in FY23. In
total, M2G has 2023 revenue identified and charged, but not yet booked, of
£289k (July 2021 forward revenue: £43k)

The Board is encouraged that despite the supply chain problems affecting many
companies, it has secured revenue which, had it fallen in the year to June
2022 would have resulted in a stable performance year-on-year. It is
encouraged, further, that the momentum of revenue is growing through the first
half of the Company's financial year to June 2023.

Proton UK Business

Discussions are ongoing with multiple UK oil field owners to identify suitable
sites on which to deploy the Proton Technologies Canada Inc. ("Proton")
proprietary hydrogen capture technology.  In the long term, owners are
motivated to develop such hydrogen production facility on their near to end of
life fields. The Board believes that this motivation is secular and is likely
to grow as the global fuel portfolio adapts to the clear trends in hydrocarbon
demand. In the short term, reflecting the current high level of oil prices in
the market, field owners have focussed on maximising short term oil
production.  This has not impacted the momentum behind discussions adversely.
The Proton project continues to hold strong prospects for the Group.

COF / b.grn Business

During the financial year to 30 June 2022, the City Oil Field Inc. ("COF")
business has been developed in combination with Sabien's development partner
b.grn Group Ltd ("b.grn").  Key milestones have been reached including the
establishment of a range of partner relationships with funding partners and
professional advisors. The latter includes development managers, ESG advisors,
and real estate advisors.  In consultation with advisers, b.grn has assessed
a range of potential sites in England and Wales for the first European COF
installation.  As previously announced, exclusivity was agreed on a site near
Northampton; discussions were held in relation to a site on the Humber
Estuary; and most recently an indicative bid was submitted to acquire the
ex-Anglesey Aluminium in Anglesey, supported by b.grn funding partners, from
the site's administrators.

Through this work, the Board has developed a strong understanding of the
emerging real estate market in key locations in the UK. Within this, the
Company and b.grn have developed an advanced assessment of the most efficient
sites for the deployment of COF. From this emerging knowledge, the Company and
b.grn are now considering actively a number of sites in the UK, and beyond,
where b.grn could deploy COF without, necessarily, acquiring the underlying
real estate.  Investigations into potential sites continue with b.grn's
partners. It is likely that the first active deployment will be an initial 24t
per day plastic to oil proof of concept plant.

As a result, the Northampton site's exclusivity has been allowed to lapse.
b.grn is not pursuing actively the Humber Estuary site which would have
required considerable capital and time investment to make it ready for
deployment. Finally, it is b.grn's understanding that it is not one of the
leading bidders for the Anglesey Aluminium site on the basis of prices
indicated.  b.grn awaits any further developments in relation to this site.

Discussions continue in relation to the Group's option to install a COF site
in Saskatchewan on Proton's site. This site has the potential to produce
additional benefits in relation to options for the use of offtake oil.

During the year, Sabien charged management fees of £0.15m to b.grn (2021:
nil).

Consolidated trading update

The Group's full year consolidated 2022 revenue of £0.83m compares to £0.97m
for 2021, a reduction of less than 15%.   Sabien has generated consolidated
revenue of £0.71m in the second six months of the year under review. This is
an increase of 25% on the £0.56m recorded in the same period of 2021. Sabien
is also carrying combined revenue of £0.29m into 2023, circa 30% of the total
reported in the year to June 2021.  A significant component of this carry
forward is retained income, giving the Board confidence in the forward
visibility of revenue.

As at the balance sheet date, 30 June 2022, Sabien had cash in hand of £0.55m
(2021: £1.40m).

Commenting on the 2022 financial year, Richard Parris, Chairman of Sabien,
stated:

"During the year under review, despite a challenging supply chain environment,
the Company has achieved a solid result for the M2G business once supply chain
timing issues are resolved, in addition much development of the COF/b.grn
business has been achieved and a fundable business model developed. The Board
looks forward to the coming year with considerable confidence.

It is important to remember that the year on which the Board is reporting
encompasses two very different trading periods. It is clear to the Board that
momentum has accelerated and is building still, notably within M2G and Proton.
While COF's development remains more nascent, the Board's knowledge of the
available market and the requirements to address it successfully are now well
advanced. Sabien enters the year to June 2023 with a confidence backed by
results and experience."

 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

 

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