REG - Trackwise Designs - Interim Results
30/09/2022 07:01
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RNS Number : 2525B Trackwise Designs PLC 30 September 2022
TRACKWISE DESIGNS PLC
("Trackwise" or the "Company")
Interim Results for the six months ended 30 June 2022
Trackwise Designs (AIM: TWD), a leading provider of specialist products using
printed circuit technology, is pleased to announce today its interim results
for the six months ended 30 June 2022.
Financial highlights
· Revenues of £3.8m (H1 2021: £4.1m)
· IHT revenues of £0.55m (H1 2021: £0.58m)
· Gross margin of 23.7% (H1 2021: 29.0%)
· Adjusted(1) EBITDA of £0.83m (H1 2021: £0.45m)
· Adjusted(2) operating profit of £0.09m (H1 2021: loss £0.13m)
· Reported loss after tax of £1.39m (H1 2021: loss £0.57m), after
exceptional costs of £2.0m
· Net debt(2) of £7.8m (cash of £2.4m) (31 December
2021: £2.1m, cash of £2.9m), following continued investment at the
Stonehouse facility
· Basic EPS - loss per share of 3.73 pence (H1 2021: loss per share
of 2.00 pence)
(1) Before share based payments and exceptional costs;
(2) Cash less borrowings, excluding IFRS16 right of use lease liabilities
Operational highlights
· Completion of equity raise of £7m to support growth, as announced in
December 2021
· Appointment of Paul Cook as Chief Financial Officer designate
· Continued progress made in preparing Stonehouse to become fully operational
later in FY22
· Installed and commissioned Double Belt Press
· Completion of £5.2m asset finance
· IHT total customers and opportunities across target markets of 97 as at 30
June 2022
· Development of plans for Phase 2 of Stonehouse facility, in response to
significant pipeline of demand for EV Cell Connection Systems (CCS) from UK
and EU OEMs and Tier 1s.
Philip Johnston, CEO of Trackwise, commented:
"The development of our third manufacturing site at Stonehouse continues,
and we expect to see this completed in 2022 to meet production demand from
our EV OEM customer.
It is inevitable that our performance is closely linked to that of our first
IHT production customer and the EV OEM announced on 11 August 2022 that it
expects lower production volumes in 2022 compared to previous estimates. As we
announced earlier this month, the announcement of the lower production volumes
has had a knock-on impact on the availability, to the Company, of the planned
asset-backed debt funding for the remaining pieces of capital expenditure at
the new Stonehouse facility and, in addition, increases the Company's
short-term cash requirements. Discussions with the EV OEM are progressing
towards agreeing a new contractual arrangement whereby the EV OEM will provide
an advance payment against future product deliveries, and such advance payment
is expected to be backed by security.
The wider impact of the lower production volumes is that additional funding
will be required and the Company is reviewing a number of options for
additional funding with its advisers and will provide further updates in due
course.
In addition, the Company is exploring longer term strategic investment
partnerships in order to support development and conversion of the very
significant pipeline of identified IHT sales opportunities, notably for EV
battery cell connection systems ("CCS") for UK and EU OEMs, Tier 1 suppliers,
and also for other Medical and Aerospace sales opportunities."
Enquiries
Trackwise Designs plc +44 (0)1684 299 930
Philip Johnston, CEO www.trackwise.co.uk (http://www.trackwise.co.uk/)
Paul Cook, CFO
finnCap Ltd +44 (0)20 7220 0500
NOMAD and Broker
Ed Frisby/Tim Harper - Corporate Finance
Andrew Burdis/Barney Hayward - ECM
Alma PR +44 (0)20 3405 0205
Financial PR and IR
David Ison/Caroline Forde/Josh Royston/Kieran Breheny
Notes to editors
Trackwise is a UK-based manufacturer of specialist products using printed
circuit technology.
The full suite includes: Improved Harness Technology™ ("IHT") and Advanced
PCBs - Microwave and Radio Frequency ("RF"), Short Flex, Flex Rigid and Rigid
Multilayer products.
IHT uses a proprietary, patented process that Trackwise has developed to
manufacture multilayer flexible printed circuits of unlimited length. While
the technology has many applications, the directors expect that one of its
primary uses will be to replace traditional wire harnesses in a variety of
industries.
The Company operates from three sites, located in Tewkesbury, Stonehouse and
Stevenage. It serves customers in Europe and North America.
Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker
TWD. For additional information please visit www.trackwise.co.uk
(http://www.trackwise.co.uk/)
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
Financial Review
Revenue for the period fell slightly to £3.8m (H1 2021:£4.1m), which
reflects the delay of an order at Stevenage Circuits Limited (SCL) and the
delayed start of production for the EV OEM. Profitability was held back by
lower sales, higher utility costs and the under-recovery of costs as a result
of lower than expected volumes.
The lower gross profit was offset by other income of £0.7m, which was the
partial recognition of the estimated compensation due as a result of the EV
OEM's order shortfall against the guaranteed minimum volumes set out in the
contract. The Company incurred further exceptional costs of £2.0m relating
to the set-up of the Stonehouse facility and the commencement of low volume
production for the EV OEM contract at Trackwise's Ashvale site. The loss
before taxation was £2.1m (H1 2021: loss £0.6m).
The outcome of the period is that losses per share were (3.73)p (H1 2021
losses per share: (2.00p)).
Capital expenditure in the first half was £6.4m. While this reflected
continued investment ahead of the EV OEM's start of production, it also
included the installation of the double-belt press. This is the Company's
largest ever single investment and allows us to fully exploit our Improved
Harness Technology patent and know-how.
The first half also saw an increase in working capital. Inventory increased
by £0.7m as a result of a build-up ahead of the expected start of production
for the EV OEM contract and a stock build of some materials with long lead
time at SCL. Debtors increased by £1.7m, primarily as a result of the other
income accrued on the EV OEM contract and up-front payments for the purchase
of nickel foil ahead of the expected ramp-up of the EV OEM contract.
These cash outflows were financed by from the £5.5m of proceeds from the
Placing and Open Offer launched in December 2021 and asset-backed funding of
£5.2m. In addition, in January 2022 a new invoice discount facility of
£1.0m was established for SCL and has subsequently been partially drawn down.
At 30 June 2021 the Company had net debt of £7.8m, reflecting the cash
movements above. Gross cash was £2.4m and there were unused invoice
discounting facilities, subject to the lender's draw down criteria, of £1.7m.
Going Concern Review
In our annual report for the year ended 31 December 2021, which was published
on 29 July 2022, we reported that there was a funding shortfall in our
downside scenario forecasts which, together with the risks surrounding some
assumptions within our forecast models, indicated that there were
circumstances that gave rise to a material uncertainty related to going
concern.
At the time the Company was in discussions for the provision of asset-backed
funding of £4.4m and a trade finance facility of £1.9m. As mentioned
above, on 11 August 2022 the EV OEM customer announced that it expects lower
production volumes in 2022 compared to previous estimates. This has had a
knock-on impact on the availability of the planned asset-backed debt funding
and the trade finance facility, which has impacted the Company's short-term
cash position.
In order to determine that the going concern assumption for the preparation of
these accounts continues to be correct the Directors have prepared a Base Case
forecast using the following major assumptions:
Ø The Company shortly agrees a new contractual arrangement whereby the EV OEM
will provide an advance payment against future product deliveries;
Ø the Group delivers its EV customer's revised orders in 2023. These
volumes are below the level of the current orders on hand and are
significantly below the guaranteed minimum volumes (GMV) set out in the
contract with the EV OEM customer;
Ø there are no further orders from the EV OEM customer for delivery after
June 2023;
Ø there is an improvement in the operating performance of Stevenage Circuits
Limited, the group's other trading subsidiary, compared to the year ended 31
December 2021;
Ø that our machinery suppliers have no further delivery delays and
consequently the capital expenditure programme for the Stonehouse facility is
completed in 2022;
Ø that the Group's bankers maintain the invoice discounting facilities that
are currently in place; and
Ø discussions for the provision of further funding are successfully
completed.
The Company is discussing a new contractual arrangement whereby the EV OEM
will provide an advance payment against future product deliveries and the
Company is reviewing a number of options for additional funding with its
advisers.
Whilst the Base Case forecast represents, in the Board's view, the most likely
scenario there may be continuing impacts from all of the risks identified
above and so consequently there will be risks that performance will be below
our expectations. Therefore, the Directors have also prepared a severe but
plausible downside scenario which assumes the following:
Ø that the Company fails to agree the new contractual arrangement with the EV
OEM; and
Ø no further funds can be raised.
In these circumstances the Group would face a funding shortfall of £7.9m.
This, together with the risk surrounding some of the assumptions within the
models, indicates that there are circumstances that give rise to a material
uncertainty related to going concern.
On the basis of the Base Case assumptions noted above the Base Case forecast
shows that the Group will be able to continue as a going concern.
Board Change
At the company's Annual General Meeting on 22 August 2022 Mark Hodgkins
stepped down as a director and Paul Cook was appointed as CFO.
CEO's Statement
It remains a difficult time to be in business, with labour supply, inflation,
supply chain dislocation and Brexit-related customs issues all posing their
own challenges to the business. However, these challenges are being, can be,
and will be met by pro-active management of the issues across the three sites.
Beyond the contract with the UK EV OEM, we are actively pursuing the very
large market opportunity - which could total many £100m of business - in the
developing UK and European EV supply chain for battery CCS. Stonehouse Phase 2
will be - in our opinion - a unique and well-positioned resource to deliver
that opportunity. We are confident of further material developments,
regardless of the macro-economic situation.
The APCB division, where we have recently appointed a new Managing Director,
remains an important part of the business, but the principal growth will come
from IHT. The investments that we have made - the building for growth - are
and will continue to deliver, across the three principal IHT market verticals.
At the top end of our capability, Trackwise is one of, if not the, leading
supplier of long flex PCBs worldwide. I am very grateful for all stakeholders
for their part in helping the business towards achieving its potential.
Improved Harness Technology
Improved Harness Technology (IHT), the long-term growth driver for Trackwise,
is the patented technology which enables the manufacture of length-unlimited
multi-layer flexible printed circuit boards.
While IHT has a wide range of applications, we have set out the three markets
where we expect to see the greatest levels of growth for this technology.
These are:
1. Electric Vehicles
2. Medical
3. Aerospace
We remain confident in the applicability of our proprietary technology to
these markets and the significant revenues this has the potential to generate.
With the delivery and commissioning of the Double Belt Press (DBP), the
length-unlimited multilayer flex PCB manufacturing process envisaged in the
original IHT patent application in January 2012 has now been realised as an
in-house capability. This is a major milestone for the business.
The DBP is a key strategic asset, providing a state-of-the-art capability to
manufacture our own metal-clad laminates, as well as allowing us to bond
together individual circuit layers to form the patented length-unlimited
multilayer circuits. A number of customer developments had been held until
such time as we have this capability in-house, and, more generally, our rate
of development has the potential to speed up immeasurably.
Advanced PCBs
The Advanced PCBs division comprises Stevenage Circuits Limited.
The division delivered a disappointing first half, with sales down 10.6%, due
to an expected £250,000 outsourced order being deferred, now expected in the
second half. Sales of manufactured products increased by 7.6%, driven
largely by price increases.
We were delighted to welcome Christoph Boueke, as Managing Director of
Stevenage Circuits Limited in July 2022.
Current trading and outlook
Following the appointment of the new Managing Director of the APCB division,
we have already started to see improved operations within the business and
performance is expected to continue to improve in the medium term.
While delays from our EV OEM are disappointing and highly disruptive to the
business, the Company is working with the OEM and with other funders to allow
the roll-to-roll production capability at the Stonehouse site to begin
production in Q4 2022, to achieve full (single shift) production in Q1 2023,
thereby proving our ability to deliver "Quantity, Quality, Qualified", a key
milestone for the business.
Discussions with the EV OEM are progressing towards agreeing a new contractual
arrangement whereby the EV OEM will provide an advance payment against future
product deliveries, and such advance payment is expected to be backed by
security.
The wider impact of the lower production volumes from our EV OEM is that
additional funding will be required and the Company is reviewing a number of
options for additional funding with its advisers and will provide further
updates in due course.
The Company is exploring longer term strategic investment partnerships in
order to support development and conversion of the very significant pipeline
of identified IHT sales opportunities, notably for EV battery cell connection
systems ("CCS") for UK and EU OEMs, Tier 1 suppliers, and also for other
Medical and Aerospace sales opportunities.
Interim Condensed Consolidated Statement of Comprehensive Income
Notes Unaudited Six months ended 30 June 2022 Unaudited Six months ended 30 June 2021 Audited
Year ended 31 December 2021
£'000 £'000 £'000
Revenue 3 3,781 4,090 8,011
Cost of sales (2,884) (2,904) (5,699)
Gross profit 897 1,186 2,312
Other operating income 4 729 - 57
Administrative expenses excluding exceptional costs and share based payment (1,540) (1,315) (2,953)
Exceptional and non-recurring costs 5 (2,013) (195) (941)
Share based payment charges (27) (149) (153)
Total administrative expenses (3,580) (1,659) (4,047)
Operating loss (1,954) (473) (1,678)
Finance income - - 3
Finance costs (175) (138) (301)
Loss before taxation (2,128) (611) (1,976)
Taxation 6 737 42 324
Loss and total comprehensive expense for the period
(1,392) (569) (1,652)
Loss per share (pence)
Basic and diluted 8 (3.73) (2.00) (5.78)
Interim Condensed Consolidated Statement of Financial Position
Notes Unaudited 30 June 2022 Unaudited 30 June 2021 Audited
31 December 2021
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 9 10,774 7,940 9,932
Property, plant and equipment 10 22,731 11,425 13,131
33,505 19,365 23,063
Current assets
Inventories 2,679 2,296 2,022
Trade and other receivables 5,538 5,498 7,795
Current tax receivable 1,147 1,146 858
Cash and cash equivalents 2,360 4,806 2,897
11,724 13,746 13,572
Total assets 45,229 33,111 36,635
LIABILITIES
Current liabilities
Trade and other payables (2,844) (2,501) (3,015)
Borrowings 11 (3,036) (887) (1,850)
(5,880) (3,388) (4,865)
Non-current liabilities
Deferred income - grants (1,090) (975) (1,067)
Borrowings 11 (9,397) (3,714) (5,514)
Deferred tax liabilities (153) (506) (623)
Provisions (115) (79) (115)
(10,755) (5,274) (7,319)
Total liabilities (16,635) (8,662) (12,184)
Net assets 28,594 24,449 24,451
EQUITY
Share capital 1,500 1,137 1,207
Share premium account 27,215 20,989 22,000
Retained earnings (191) 2,214 1,155
Revaluation reserve 70 109 89
Total equity 28,594 24,449 24,451
Interim Condensed Consolidated Statement of Changes in Equity
Share capital Share premium account Retained earnings Revaluation reserve Total equity
£'000 £'000 £'000 £'000 £'000
At 1 January 2021 1,137 20,989 2,615 128 24,869
Loss and total comprehensive expense for the period - - (569) - (569)
Share based payment - - 149 - 149
Revaluation realised in period - - 19 (19) -
At 30 June 2021 1,137 20,989 2,214 109 24,449
Loss and total comprehensive expense for the period - - (1,083) - (1,083)
Issue of shares 70 1,011 - - 1,081
Share based payment - - 4 - 4
Revaluation realised in period 20 (20)
At 31 December 2021 1,207 22,000 1,155 89 24,451
Loss and total comprehensive expense for the period - - (1,392) - (1,392)
Issue of shares 293 5,215 - - 5,508
Share based payment - - 27 - 27
Revaluation realised in period - - 19 (19) -
At 30 June 2022 1,500 27,215 (191) 70 28,594
Interim Condensed Consolidated Statement of Cash Flows
Unaudited Six months ended 30 June 2022 Unaudited Six months ended 30 June 2021 Audited
Year ended 31 December 2021
£'000 £'000 £'000
Cash flow from operating activities
Loss for the period before taxation (2,129) (611) (1,976)
Adjustment for:
Employee share-based payment charges 27 149 153
Depreciation of property, plant and equipment 585 524 965
Amortisation of intangible assets 273 181 426
Finance costs 175 138 298
Changes in working capital:
Increase in inventories (657) (286) (12)
Increase in trade and other receivables (1,660) (732) (375)
(Decrease)/increase in trade and other payables (204) (221) 1,003
Cash (used in)/from operations (3,590) (858) 482
Income tax (paid)/received (22) - 687
Net cash (used in)/from operating activities (3,612) (858) 1,169
Cash flow from investing activities
Purchase of property, plant and equipment (6,358) (6,266) (10,649)
Purchase of intangible assets (1,030) (1,478) (3,553)
Grant funding 56 92 214
Interest received - - 3
Net cash used in investing activities (7,566) (7,652) (13,985)
Cash flow from financing activities
Share capital issued 5,855 - 1,230
Expenses relating to share capital issue (347) - (149)
Interest paid (171) (138) (301)
Lease payments (141) (106) (187)
Bank loan advanced - - 1,960
Bank loan repayments (35) - (23)
Advance of hire purchase finance against assets already purchased
5,166 135 -
Cash inflow from invoice discounting and other short-term financing 490 - 184
Repayment of short-term financing - (128) (128)
Repayment of capital element of lease contracts (410) (377) (801)
Net cash from/(used in) financing activities 10,771 (614) 1,785
Decrease in cash and cash equivalents (537) (9,124) (11,033)
Net cash and cash equivalents at beginning of the period
2,897 13,930 13,930
Net cash and cash equivalents at end of period (all cash balances) 4,806
2,360 2,897
Notes to the condensed interim financial statements
1. Corporate information
Trackwise Designs plc is a public company incorporated in the United Kingdom.
The registered address of the Company is 1 Ashvale, Alexandra Way, Ashchurch,
Tewkesbury, Gloucestershire, GL20 8NB.
The principal activity of the Company and the Group is the development,
manufacture and sale of printed circuit boards.
2. Accounting policies
Basis of preparation
This unaudited consolidated interim financial information has been prepared in
accordance with IFRS as adopted by the United Kingdom including IAS 34
'Interim Financial Reporting'. The principal accounting policies used in
preparing the interim results are those it expects to apply in its financial
statements for the year ending 31 December 2022. These are unchanged from
those applied in the 31 December 2021 Company financial statements
The financial information does not contain all of the information that is
required to be disclosed in a full set of IFRS financial statements. The
financial information for the six months ended 30 June 2022 and 30 June 2021
is unreviewed and unaudited and does not constitute the Group or Company's
statutory financial statements for those periods.
The comparative financial information for the full year ended 31 December 2021
has, however, been derived from the audited statutory financial statements for
that period. A copy of those statutory financial statements has been delivered
to the Registrar of Companies.
Going Concern
The auditor's report on those accounts was unqualified, but includes reference
to a material uncertainty in respect of the going concern basis without
qualifying its report and did not contain a statement under section 498(2)-(3)
of the Companies Act 2006.
The Directors have considered the principal risks and uncertainties facing the
business. In making this assessment the Directors have prepared cash flows for
the foreseeable future. These forecasts show that the Company should be able
to manage its working capital and existing resources to enable it to meet its
liabilities as they fall due. These forecasts have considered the risks that
the Company faces, notably:
Ø The Company shortly agrees a new contractual arrangement whereby the EV OEM
will provide an advance payment against future product deliveries;
Ø that the EV OEM places a replacement order at higher prices than those
currently being charged;
Ø the Group delivers its EV customer's replacement order in full in H1
2023. These volumes are below the level of the current orders on hand and
are significantly below the guaranteed minimum volumes (GMV) set out in the
contract with the EV OEM customer;
Ø there are no further orders from the EV OEM customer for delivery after
June 2023;
Ø there is an improvement in the operating performance of Stevenage Circuits
Limited, the group's other trading subsidiary, compared to the year ended 31
December 2021;
Ø that our machinery suppliers have no further delivery delays and
consequently the capital expenditure programme for the Stonehouse facility is
completed in 2022;
Ø that the Group's bankers maintain the invoice discounting facilities that
are currently in place; and
Ø discussions for the provision of further funding are successfully
completed.
Further narrative in respect to the going concern evaluation performed by
management is disclosed within the Going Concern section of the Financial
Review above.
The risk surrounding some of the assumptions within the forecasts indicates
that there are circumstances that give rise to a material uncertainty related
to going concern. However, the directors remain confident that the group
remains a going concern and as such have prepared the Financial Statements on
a going concern basis.
The financial information in the Interim Report is presented in Sterling.
3. Segmental reporting
IFRS 8, Operating Segments, requires operating segments to be identified on
the basis of internal reports that are regularly reviewed by the company's
chief operating decision maker. The chief operating decision maker is
considered to be the Board of Directors.
The operating segments are monitored by the chief operating decision maker and
strategic decisions are made on the basis of adjusted segment operating
results. From January 2018 the APCB and IHT activities began to be separately
reviewed and monitored, initially in respect of revenue.
All assets, liabilities and revenues are located in, or derived in, the United
Kingdom. The material assets and liabilities relate to overall activity with
the exception of the intangible development costs and deferred grants which
are solely in respect of IHT.
In the six months ended 30 June 2022 the group had one major IHT customer who
represented 11.2% and one APCB customer who represented 9.6% of total revenue
(30 June 2021: one major customer who represented 11% of total revenue, and
full year ended 31 December 2021:one APCB customer representing 12.7% of total
revenue and one IHT customer representing 9.5% of total revenue).
Revenue by product and geographical destination was as follows:
Unaudited Six months ended 30 June 2022 Unaudited Six months ended 30 June 2021 Audited
Year ended 31 December 2021
£'000 £'000 £'000
IHT 546 581 1,480
APCB 3,235 3,509 6,531
3,781 4,090 8,011
UK 2,706 3,053 6,065
Europe 592 732 1,309
Other 483 305 637
3,781 4,090 8,011
4. Other operating income
There have been delays in orders from a major new customer contract which are
subject to compensatory income for the Company. Other operating income
includes £698,000 which is an estimate of this income and is subject to a
significant degree of judgement in respect of the overall commercial
negotiations as the production is set up and commences.
5. Exceptional and non-recurring items
Non-recurring amounts disclosed in administrative expenses are as follows:
Unaudited Six months ended 30 June 2022 Unaudited Six months ended 30 June 2021 Audited
Year ended 31 December 2021
£'000 £'000 £'000
New facility set up costs 1,219 141 941
Additional production and set-up costs 794 - -
Integration and other costs - 54 -
2,013 195 941
The new facility and production contract requirements have resulted in costs
relating to the Stonehouse site during preparation and set up ready for
production. In addition there have been ongoing additional costs of
production and inefficiencies at Ashvale in order to meet orders on a
temporary basis whilst all new plant is set up and commissioned. At the new
facility, costs arise from employing staff that have been engaged in
refurbishment and installation work rather than volume production. There are
also the property running costs including utilities, rates and professional
fees arising in this non-productive phase.
6. Income tax
Taxation is provided at the estimated rate of tax for the period, applying the
enacted rate of 25% (2021:25%) to deferred tax balances as applicable to the
expected reversal dates after March 2023, and including the benefit of
enhanced allowances for research and development costs in tax losses used to
claim a credit payable as cash to the group.
The overall credits have been impacted by both the change in deferred tax rate
following enactment of the Finance Act 2021 and by movements in the period end
share price directly affecting deferred tax in respect of future deductions
from the exercise of share options. These non-recurring items have been
analysed in the elements of the tax credit shown below.
Unaudited Six months ended 30 June 2022 Unaudited Six months ended 30 June 2021 Audited
Year ended 31 December 2021
£'000 £'000 £'000
Development expenditure tax credits 267 342 740
Deferred tax in respect of share options (58) (141) (252)
Deferred tax change in rate - (121) (168)
Deferred tax from other timing differences 528 (38) 4
737 42 324
7. Dividends paid and proposed
No dividends have been paid or proposed in the period ended 30 June 2022 or
year ended 31 December 2021.
8. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Unaudited Unaudited Six months ended 30 June 2021 Audited
Six months ended 30 June 2022 Year ended 31 December 2021
£'000 £'000 £'000
Loss for the purpose of basic and diluted earnings per share being net loss (1,392) (569)
attributable to the shareholders
(1,652)
Number Number Number
Weighted average number of ordinary shares for the purposes of basic and 37,305,605 28,426,122 28,597,901
diluted loss per share
There are options which remain exercisable over 1,528,912 ordinary shares at
30 June 2022 and which are potentially dilutive shares. There is no dilution
of a loss for the period or comparative periods.
9. Intangible fixed assets
Development costs
£'000
Cost
At 1 January 2021 6,815
Additions 1,548
As at 30 June 2021 8,363
Additions 2,236
As at 31 December 2021 10,599
Additions 1,107
As at 30 June 2022 11,706
Amortisation
At 1 January 2021 523
Charge 175
As at 30 June 2021 698
Charge 227
As at 31 December 2021 925
Charge 259
As at 30 June 2022 1,184
Carrying amount
As at 30 June 2021 7,665
As at 31 December 2021 9,674
As at 30 June 2022 10,522
The capitalised development project costs relate to the significant continuing
investment in respect of the Company's Improved Harness Technology ('IHT')
process for unlimited length printed circuit boards and know-how which is
being developed by the Company with amortisation on the initial development
projects commencing in 2018.
The remainder of intangible assets is represented by software assets and an
unchanged amount of goodwill in respect of the initial technology.
10. Tangible fixed assets
Freehold property Leasehold improvements Plant and machinery Right of use asset -buildings Assets under construction Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
As at 1 January 2021 - 480 7,239 2,728 - 10,447
Additions 3,002 4 302 - 625 3,933
As at 30 June 2021 3,002 484 7,541 2,728 625 14,380
Additions - 8 656 36 1,611 2,311
Disposals - (62) (47) - - (109)
As at 31 December 2021 3,002 430 8,150 2,764 2,236 16,582
Additions - - 6,379 - 3,894 10,273
As at 30 June 2022 3,002 430 14,529 2,764 6,130 26,855
Depreciation
At 1 January 2021 - 161 1,771 340 - 2,272
Charge - 21 513 149 683
As at 30 June 2021 - 182 2,284 489 2,955
Charge - 21 434 150 - 605
Disposals - (62) (47) - - (109)
As at 31 December 2021 - 141 2,671 639 - 3,451
Charge - 18 502 153 - 673
As at 30 June 2022 - 159 3,173 792 - 4,124
Carrying amount
As at 30 June 2021 3,002 302 5,257 2,239 625 11,425
As at 31 December 2021 3,002 289 5,479 2,125 2,236 13,131
As at 30 June 2022 3,002 271 11,356 1,972 6,130 22,731
The group has continued to invest in the freehold production facility at
Stonehouse with the fit out of the property and new plant being commissioned.
11. Borrowings
New hire purchase agreements have been drawn on in the period ended 30 June
2022 in order to finance the new plant and equipment at the Stonehouse
facility. Other short-term financing represents advances against equipment
which is expected to be converted to a term agreement when the equipment is
fully in place.
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Amounts falling due within one year:
Lease liabilities 290 187 274
Hire purchase contract obligations 1,452 700 772
Bank loan 71 - 71
Invoice financing 840 - 184
Other short-term financing 383 - 549
3,036 887 1,850
Amounts falling due between one and five years:
Lease liabilities 1,362 1,289 1,308
Hire purchase contract obligations 4,639 1,485 1,557
Bank loan 1,831 - 1,866
7,832 2,774 4,731
Amounts falling due in more than five years:
Lease liabilities 572 940 783
Hire purchase contract obligations 993 - -
1,565 940 783
Total borrowings 12,433 4,601 7,364
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