REG - Saietta Group PLC - Unaudited Interim Results
29/12/2023 07:00
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RNS Number : 1233Y Saietta Group PLC 29 December 2023
29 December 2023
Saietta Group Plc
("Saietta", the "Company" or the "Group")
Unaudited Interim Results for the six months ended 30 September 2023
Saietta Group Plc (AIM: SED), the multi-national business which designs,
engineers and manufactures complete eDrive systems for electric
vehicles, today announces its unaudited interim results, covering the
six-month period ended 30 September 2023 (the "Period").
Financial Highlights for the Period
· Group income (including grants) of £1.4m compared to £1.3m in prior
Period
· Gross profit of £0.1m (H1 2022: £0.1m) with a gross margin of 9%
(H1 2022: 13%). The decline in gross margin reflects both the absence of
retrofit revenues in H1 2023 and high manufacturing costs prior to the Group's
recent automation of production.
· £0.2m of gain on disposal of fixed assets in the period, generated
through the restructuring of arrangements with ConMet.
· Loss from continuing operations, before tax, of £7.9m (H1
2022: £9.4m) largely reflecting a lower share option charge.
· Adjusted EBITDA(1) loss of £6.5m (H1 2022 £6.3m loss)
· Net cash at the end of the Period of £0.5m
Operational Highlights
· On 3(rd) April 2023, AYRO Inc. placed an order for 3,000 AFT eDrives
to be supplied from Saietta's Sunderland facility. Orders commenced shipment
in Q2 of the financial year 2023/24.
· On 1(st) August 2023, Saietta and ConMet agreed a restructuring of
the arrangements to develop an in-wheel motor and in-wheel generator for the
US truck market. The agreement resulted in a gain on disposal of fixed
assets in the period of €200k.
· In September 2023, production commenced in the Delhi factory
facility of Saietta's Indian joint venture, Saietta VNA, producing AFT (Axial
Flux Technology) motors for the OEM (Original Equipment Manufacturer) customer
announced on 27 September 2023, with initial five year volumes expected to be
for a minimum of 40,000 units.
Post-Period end
· On 13th November the Group announced that its Indian JV, Saietta VNA,
had secured an order for its new RFT (Radial Flux Technology) eDrive system,
from its major OEM customer in India. This validation of Saietta's proprietary
RFT motor opens up the huge electric 2-wheel market in India. Target volumes
indicated by the client, suggest this initial order will scale to an expected
minimum of 60,000 units over a 5 year period.
· In December 2023, Saietta announced it had completed a fundraising
of £7.14m before expenses. Proceeds of the fundraising will be used to
satisfy the Group's working capital requirements through to the end of March
2024 and to support growth of the Company's Indian joint venture, Saietta VNA.
Outlook
· Saietta and its Indian JV, Saietta VNA, have secured high volume
OEM relationships in India and the US which are set to utilise the production
capacity they have developed in Delhi and Sunderland. The Group is therefore
ready to enter the next stage of its evolution as a large-scale manufacturer.
David Woolley, Chief Executive of Saietta, said:
"The first half of the 23/24 financial year has been challenging but Saietta
has made significant strides towards its full transition from an R&D
company to a full-scale production manufacturer.
During the Period, Saietta reached operational readiness in its joint venture
facility in India and successfully commenced deliveries to its US customer,
AYRO Inc. The development of in-wheel motors and generators for trucks was
transferred to Consolidated Metco Inc. ("ConMet"), resulting in an upfront
payment to Saietta of €3.3 million and potential additional future license
payments of up to €20m. This allowed the Group to narrow its focus on the
lightweight EV opportunity in India.
Demonstrable evidence of the demand for Saietta's proprietary eDrives in India
has come from an initial AFT order from a global OEM which is one of the
largest producers of light commercial vehicles in that market.
Post the Period end, the benefits of the Group's focus were further realised
through an additional contract for Saietta VNA, namely, an order from its lead
OEM customer for Saietta's proprietary, all-new RFT motor, mated to a
bespoke Saietta controller, transmission, axle and vehicle control unit.
Saietta has now raised £7.14m of additional funds (before expenses) in the
market which, with tight control over costs, will meet its working capital
needs until the end of March 2024 and management continue to explore
alternative sources of funds to take the Company through to a cash positive
position thereafter.
I am therefore delighted to be at the helm of Saietta as it enters this
exciting phase."
For any further enquiries, please contact:
Saietta Group (email : contact@saietta.com)
Anthony (Tony) Gott, Executive Chairman
David Woolley, Chief Executive Officer
David Wilkinson, Interim Chief Financial Officer
Canaccord Genuity (Nomad and Broker) (Tel : +44 (0) 20 7523 8000)
Henry Fitzgerald-O'Connor / Harry Pardoe
(1)Adjusted EBITDA above is a non-IFRS measure and is calculated as the
Group's earnings before interest, tax, depreciation, amortisation, impairment
and extraordinary items including share-based payment charges, costs related
to Saietta Group Plc's fund-raising, fees in respect of establishing new
staff pension scheme, write-off inventory acquired as part
of Sunderland lease transaction and legal fees in respect of the
incorporation of the equity accounted associate. See note 4 for more details.
About Saietta:
Listed on the London Stock Exchange's AIM, Saietta is a global business
that designs, develops and manufactures complete electric drivetrain (eDrive)
solutions for established manufacturers of a broad range of electric vehicles.
Saietta's breakthrough proprietary technologies include AFT (Axial Flux
Technology) and RFT (Radial Flux Technology) motors, power electronics,
powertrain controls, mechanical axles, transmissions and vehicle control
units. Considerable flexibility is built into the core design, meaning
solutions can be quickly and cost effectively tailored to a specific
application.
Saietta works in a highly collaborative way with clients, driven by the
belief that partnership is key to delivering world-class tailored solutions at
pace. Saietta's engineering team takes time to deeply understand a client's
brand, target market sector, competition and the services they require.
Then Saietta develops a bespoke suite of products and services to fast-track
the client to production with eDrive solutions which deliver a sustainable
competitive advantage.
Chairman's Review
Saietta recognised the need to re-focus on light duty eDrives ahead of the
Period and has delivered on that strategic pivot both in terms of
restructuring its operations and in securing initial purchase orders from
major OEMs.
We believe the Group is at an inflection point for growth, as evidenced by the
orders detailed in the post Period end section above. These achievements have
required a considerable transformation in the business and there have been
changes at Board and Operational levels as a consequence.
Outlook
Moving from an R&D-focused technology start-up to a manufacturer, selling
complex products internationally, has been a challenging transformation in a
relatively short time frame. However, with the foundations in place for
delivery to its major OEM customer, Saietta is able to look forward to a
sustained period of motor production and development that will enable it to
achieve its goal of making a positive, substantial difference to
electrification of light duty vehicles, particularly in areas with high
pollution levels such as major cities in India.
Financial Review
(NB: comparative figures are shown for the comparable period in the previous
financial year unless otherwise stated)
Revenue and expenditure both reflect a period of transition where hitherto
engineering design services have been complemented by motor sales from initial
production.
The ramp up of production had just commenced at the end of the Period, buoyed
in particular by the two significant orders obtained in the period for AYRO
inc, in the US and a major OEM in India.
Revenues were broadly in line with prior year with commercial activity split
between completing restructuring of the ConMet and Propel activities and
driving forward operational readiness for the India production launch.
Operational and administrative expenditure was below prior year
by £0.6m (6% decrease), reflecting a lower share option charge.
Excluding the impact of share option charges and fundraising costs, the
adjusted EBITDA was a loss of £6.5m (4% higher than prior period).
Interim condensed consolidated statement of comprehensive income and total
comprehensive income
Unaudited Unaudited
6 months to 30 September 2023 6 months to 30 September 2022*
Notes £ £
Revenue 977,229 753,517
Cost of sales (885,773) (653,231)
Gross profit 91,456 100,286
Other income 427,225 498,322
Administrative expenses (9,342,452) (9,916,916)
Charge for share options granted (456,635) (1,910,557)
Other administrative expenses (8,885,817) (8,006,359)
Operating loss (8,823,771) (9,318,308)
Finance income 9,263 9,996
Finance expense (131,353) (133,934)
Share of results of associate (1,285) -
Net increase in financial guarantees - (3,507)
Other gains and losses - reversal of impairment losses 1,036,137 -
Loss before taxation (7,911,009) (9,445,753)
Taxation 222,913 342,610
Loss for the period (7,688,096) (9,103,143)
Discontinued operations
Loss for the year from discontinued operations 5 (510,324) (1,032,078)
Loss for the year attributable to equity holders of the parent company (8,198,420) (10,135,221)
Other comprehensive income, net of income tax, to be reclassified to profit
and loss in subsequent periods
Exchange differences on translation of foreign operations
195,776 (23,224)
Total comprehensive loss for the period (8,002,644) (10,158,445)
Basic loss per share (pence) 3 (7.78) (11.66)
*Comparative figures have been restated to exclude income and expenditure
relating to discontinued operations. A reconciliation of the balances is
included in note 5.
Interim condensed consolidated statements of financial position
Unaudited Audited
at 30 September 2023 At 31 March 2023
Notes £ £
Non-current assets
Intangible assets 6 12,178,523 10,916,016
Property, plant and equipment 9,531,582 8,113,009
Right-of-use assets 5,465,898 5,715,671
Investments in equity accounted associates - 1,285
Other financial assets 976,329 500,000
Other receivables 141,195 141,195
Prepayments and accrued income 92,586 129,016
Total non-current assets 28,386,113 25,516,192
Current assets
Inventories 1,068,118 498,407
Trade and other receivables 2,477,436 2,984,033
Prepayments and accrued income 977,976 3,209,304
Cash and cash equivalents 492,568 7,247,267
Assets of disposal groups held for sale 187,982 227,474
Total current assets 5,204,080 14,166,485
Total assets 33,590,193 39,682,677
Current liabilities
Trade and other payables 5,865,033 3,035,454
Lease liabilities 1,123,651 1,123,085
Contract liabilities 239,514 326,286
Liabilities of disposal groups held for sale 15,892 918,828
Total current liabilities 7,244,090 5,403,653
Non-current liabilities
Provisions 30,000 31,541
Lease liabilities 4,592,336 5,058,290
Total non-current liabilities 4,622,336 5,089,831
Total liabilities 11,866,426 10,493,484
Equity
Share capital 113,209 113,209
Share premium 56,670,326 56,670,326
Share options reserve 15,152,829 14,615,611
Foreign currency translation reserve (2,499) (157,537)
Translation reserves of disposal groups (65,436) (106,174)
Accumulated losses (50,144,662) (41,946,242)
Total equity 21,723,767 29,189,193
Total equity and liabilities 33,590,193 39,682,677
Interim condensed consolidated statements of changes in equity
Notes Share capital Share premium Share options reserve Translation reserve Accumulated losses Total
£ £ £ £ £ £
Balance at 1 April 2022 93,557 34,671,275 12,217,991 (27,939) (14,140,093) 32,814,791
Comprehensive income for the period
Loss for the period - - - (10,135,221) (10,135,221)
Exchange differences on translation of foreign operations - - (119,233) - (119,233)
Total comprehensive expense - - - (119,233) (10,135,221) (10,254,454)
Contributions by owners
Issue of shares 18,812 23,581,189 - - - 23,600,001
Share issue costs offset against share premium - (1,590,469) - - - (1,590,469)
Share-based payments - - 1,910,557 - - 1,910,557
Shares issued on exercise of employee share options 746 7,398 - - - 8,144
Balance at 30 September 2022 (unaudited) 113,115 56,669,393 14,128,548 (147,172) (24,275,314) 46,488,570
Balance at 1 April 2023 113,209 56,670,326 14,615,611 (263,711) (41,946,242) 29,189,193
Comprehensive income for the period
Loss for the period - - - - (8,198,420) (8,198,420)
Exchange differences on translation of foreign operations - - - 155,038 - 155,038
Translation reserves of disposal groups - - - 40,738 - 40,738
Total comprehensive expense - - - 195,776 (8,198,420) (8,002,644)
Share-based payments - - 537,218 - - 537,218
Balance at 30 September 2023 (unaudited) 113,209 56,670,326 15,152,829 (67,935) (50,144,662) 21,723,767
Unaudited Unaudited
6 months to 30 September 2023 6 months to 30 September 2022
Notes £ £
Operating activities
Losses after taxation (8,198,420) (10,135,221)
Adjustments for non-cash items
Taxation (222,913) -
Tax credits received 268,024 (53,535)
Depreciation of property, plant and equipment 229,792 439,778
Depreciation of right-of-use assets 421,208 553,594
Amortisation of intangible assets 152,894 147,809
Share-based payments 456,635 1,910,557
(Profit)/ loss on disposal of property, plant and equipment (32,497) 51,595
Profit on disposal of intangible assets (176,224) -
Currency translation differences 385,368 (218,835)
Interest income (9,263) (9,996)
Interest expense 131,353 138,909
Share of results of associate 1,285 -
Reversal of impairment losses (1,036,137)
Net decrease/ (increase) in financial liabilities - (76,178)
Cash used in operating activities before changes in working capital (7,628,895) (7,251,523)
Change in working capital
Increase in inventories (569,711) (442,291)
Decrease/ (increase) in debtors 2,772,158 (652,837)
Increase/ (decrease) in non-interest bearing liabilities 2,742,807 (3,232,121)
Decrease in provisions (1,541) (641,912)
Net cash flow used in operating activities (2,685,182) (12,220,684)
Investing activities
Purchases of intangible assets 6 (570,712) (102,776)
Capitalised internally generated development costs 6 (1,287,915) (3,103,728)
Proceeds on disposal of intangible assets 519,674 -
Purchase of property, plant and equipment (1,812,151) (1,725,614)
Proceeds on disposal of property, plant and equipment 145,960 -
Interest received 9,263 9,996
Loan advanced to associate (476,329) -
Acquisition of equity accounted investments - (267,784)
Net cash used in investing activities (3,472,210) (5,189,906)
Financing activities
Repayment of lease liabilities (465,954) (197,534)
Proceeds on issue of shares - 23,301,676
Share issue costs - (1,284,000)
Interest paid on lease liabilities (128,776) (136,024)
Interest paid (2,577) (2,885)
Net cash flow from financing activities (597,307) 21,681,233
Net change in cash and cash equivalents (6,754,699) 4,270,643
Cash and cash equivalents, beginning of period 7,247,267 18,402,055
Cash and cash equivalents
492,568 22,672,698
1. General information
Saietta Group plc is a public limited company, registered in England and
Wales. The address of its registered office is Riverbank, 2 Swan Lane,
London, EC4R 3TT.
The principal activity of the company is the provision of electric drive
solutions including the manufacture of prototype and production electric
motors for vehicles.
2. Basis of preparation and significant accounting policies
The interim condensed consolidated financial statements for the six-month
period ended 30 September 2023 do not include all the information and
disclosures required in the annual consolidated financial statements, and
should be read in conjunction with the Group´s annual consolidated financial
statements as at 31 March 2023. The Group has applied the same accounting
policies and methods of computation in its interim condensed consolidated
financial statements as in its annual consolidated financial statements as at
31 March 2023. The interim condensed consolidated financial statements are not
the statutory accounts of the Group.
The directors are responsible for the preparation of the financial statements
and to give a true and fair view. The interim condensed consolidated financial
statements are prepared on a going concern basis.
The interim condensed consolidated financial statements are presented in pound
sterling and all values are rounded to the pound sterling, except when
otherwise indicated.
Going concern
The condensed interim set of financial statements included in this half-yearly
financial report have been prepared on a going concern basis as the directors
consider that the Group has adequate resources to continue operating for the
foreseeable future.
The Group and Company operate in markets that are rapidly growing and has
strategic plans that respond to such growth. In delivering those plans, the
Group is mindful of the ultimate benefits from maintaining control over the
deployment of its intellectual property in applications with major OEMs and
within its joint venture arrangements. In order to do so, it recognises that
at times it will potentially need to co-invest or defer investment to its
partners to enhance the future value it can achieve from application of its
products. In such instances the commercial merits will be weighed in
determining whether funding is sought.
On 15(th) December 2023 the Group announced a fund raise of £7.14m before
expenses. At that time, the Group indicated that the fund raise would meet
the Group's working capital needs up to the end of March 2024. Thereafter
additional funding would thus be required. Whilst the Directors expect that
such additional funding can be raised this is not guaranteed and when
continuing with an accelerated expansion this presents a material uncertainty
which may cast significant doubt over the Group's and the Company's ability to
continue as a going concern and therefore its ability to realise its assets
and discharge its liabilities in the normal course of business. The financial
statements do not reflect any adjustments that would be required to be made if
they were prepared on a basis other than the going concern basis.
Whilst acknowledging the uncertainties described above, the Board have
concluded, on the basis of all scenarios and related expected cashflows and
available sources of finance, that the Group and Company will be able to
continue as a Going Concern for at least twelve months from the date of
signing these financial statements and therefore it remains appropriate to
prepare the Group and Company's results on the basis of a going concern.
3. Loss per share
The calculation of the basic loss per share is based upon the net loss after
tax attributable to ordinary shareholders and weighted average number of
shares in issue for the year.
Unaudited Unaudited
6 months to 30 September 2023 6 months to 30 September 2022
Basic Loss per share (pence) (7.78) (11.66)
Loss attributable to equity shareholders (£) (8,002,644) (10,158,445)
Weighted average number of shares in issue 102,917,675 87,115,466
The basic loss per share set out above is based on the average number of
shares in place across the year.
The Company was loss making for all periods presented, therefore the dilutive
effect of share options has not been taken into account in the calculation of
diluted earnings per share, since this would decrease the loss per share for
each reporting period.
4. Alternative Performance Measures ("APM")
In reporting financial information, the Group presents alternative performance
measures ("APMs") that are not defined or specified under the requirements of
IFRS. The Group believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, provide stakeholders with
additional helpful information on the performance of the business. The APMs
used within these results are defined below.
Alternative performance measure Definition
Adjusted EBITDA Adjusted EBITDA above is a non-IFRS measure and is calculated as the Group's
earnings before interest, tax, depreciation, amortisation, impairment and
extraordinary items including share-based payment charges, costs related to
Saietta Group Plc's fund-raising, fees in respect of establishing new staff
pension scheme, write-off inventory acquired as part of Sunderland lease
transaction and legal fees in respect of the incorporation of the equity
accounted associate.
The Group uses adjusted EBITDA as an APM to review and measure the underlying
profitability of the Group on an ongoing basis for comparability as it
recognises that increased capital expenditure year on year will lead to a
corresponding increase in depreciation and amortisation expense recognised
within the consolidated income statement.
Reconciliations between these alternative performance measures and statutory
reported measures are shown below:
Unaudited Unaudited
6 months to 30 September 2023 6 months to 30 September 2022
£ £
Adjusted EBITDA (6,539,668) (6,312,792)
Depreciation and amortization (1,107,164) (1,167,687)
Finance income 9,263 9,996
Finance expense (131,353) (138,909)
Share-based payment charges (456,635) (1,910,557)
M&A support fees - (99,482)
Costs related to the issue of shares - (513,125)
Costs related to the acquisition of e-Traction Europe B.V. - (39,932)
Costs related to the co-operation with Padmini VNA - (59,925)
IPO-dependent staff expenses - (61,165)
Net increase in financial liabilities - (3,507)
Fees in respect of employee pension scheme set-up - (70,000)
Write-off of inventory acquired as part of Sunderland transaction -
(133,970)
Loss before taxation (8,225,557) (10,501,055)
Taxation 222,913 342,610
Loss for the period (8,002,644) (10,158,445)
5. Discontinued operations
6 months to 30 September 2023 6 months to 30 September 2022
£ £
Revenue 120 -
Cost of sales (7,533) -
Other income 188,954 20,318
Expenses (691,865) (1,052,396)
Net loss attributable to discontinued operations (attributable to owners of (510,324) (1,032,078)
the Company)
6. Intangible fixed assets
Patents and licences Development costs
Software Total
£ £ £ £
COST 990,878 9,462,881 707,484 11,161,243
At 1 April 2023 (audited)
Additions 223,151 1,625,123 10,353 1,858,627
Disposals - (343,450) - (343,450)
Currency translation differences - (79,732) (662) (80,394)
At 30 September 2023 (unaudited) 1,214,029 10,664,822 717,175 12,596,026
ACCUMULATED AMORTISATION 120,594 - 124,633 245,227
At 1 April 2023 (audited)
Additions 54,436 - 117,863 172,299
Currency translation differences - - (23) (23)
At 30 September 2023 (unaudited) 175,030 - 242,473 417,503
Net book value at 30 September 2023 (unaudited) 1,038,999 10,664,822 474,702 12,178,523
Net book value at 31 March 2023 (audited) 870,284 9,462,881 582,851 10,916,016
-ENDS-
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