REG - Versarien PLC - Interim Results
12/05/2022 07:00
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RNS Number : 1857L Versarien PLC 12 May 2022
12 May 2022
Versarien Plc
("Versarien", the "Company" or the "Group")
Interim Results for the twelve months ended 31 March 2022
Versarien Plc (AIM: VRS), the advanced engineering materials group, is pleased
to announce its unaudited interim results for the twelve months ended 31 March
2022. As announced on 24 February 2022, the Company's accounting reference
date has changed from 31 March to 30 September.
Financial Highlights
• Group revenues from continuing operations up 34% to £7.63 million (2021:
£5.69 million)*
• Graphene revenues up 170% to £1.89 million (2021: £0.70 million)
• Adjusted LBITDA** for continuing operations reduced by 45% to £1.04 million
(2021: £1.88 million)
• Reported loss before tax from continuing operations of £5.14 million (2021:
£8.08 million)
• Reported loss for the period of £5.20 million (2021: £8.07 million)
• Cash of £3.10 million at 31 March 2022 (31 March 2021: £2.36 million)
*Excludes discontinued revenues of £0.53 million (2021: £0.88 million)
**Adjusted LBITDA (Loss Before Interest, Tax, Depreciation and Amortisation)
excludes Exceptional items, Share-based payment charges and Other losses)
Operational/Manufacturing Highlights
• Relocation to new dedicated graphene production facility in Longhope,
Gloucestershire to significantly expand capacity
• 10,000 square foot floor slab laid for new Versarien innovation centre using
the Company's Cementene(TM) and Polygrene(TM) enhanced concrete
• Acquisition of Spanish graphene manufacturing assets transferred to Longhope
during the year and in process of commissioning to provide up to an additional
100 tonne powder capacity per annum
• Equipment to scale up graphene ink production capacity by an additional 12,000
litres per annum delivered and commissioned
Partnerships/Commercialisation Highlights
• Commercial agreement signed with Superdry to produce graphene enhanced
garments and discussions ongoing with multiple other garment suppliers
• Grant agreement signed and project completed to support the development of
Pseudo-Capacitor technology aimed at zero emissions for port-side
infrastructure
• Successful on-time delivery of Defence Science and Technology Laboratory
("DSTL") contract within specification
• Royalty agreement signed with Gerdau S.A. for the distribution of graphene
masks primarily in Latin America
• Collaboration signed with US-based Flux Footwear LLC, an adaptive footwear
company, to supply graphene enhanced elastomers
• Launch of 3D printed concrete "Lunar" lifestyle pods using Cementene™,
Versarien's graphene-enhanced cement
Funding Highlights
• £1.93 million strategic investment in Versarien by GrapheneLab Co. Ltd.,
South Korea, together with royalty and trademark agreements
Post Period Highlights
• Sports brand Umbro has announced it will integrate Versarien's
Graphene-Wear™ technology into its "Elite Pro-Training Kit" range for the
spring/summer collection 2023
• GoToGym in South America are launching active-wear incorporating Versarien's
Graphene-Wear(TM) technology
Neill Ricketts, CEO of Versarien, commented:
"The period has seen the financial benefits of the DSTL contract focussed on
understanding the benefits that graphene-loaded materials may bring to defence
applications with Group revenues from continuing operations up 34% and
reported losses significantly reduced. Alongside the expansion of our
production facilities in Longhope we continue to progress the applications in
which graphene can be used with a view to launching new graphene enhanced
products over the coming months. This is a natural follow on from the
successful finalisation of the DSTL contract and the near completion of the
GSCALE development projects.
"In parallel, customer testing continues to prove successful and we are seeing
increased interest from global companies in signing development agreements
that may, in time, lead to significant future revenues whilst at the same time
we are looking to expand our global footprint and enter into agreements with
the right strategic partners for the business, in part helped by having passed
the accreditation of the Graphene Council."
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
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For further information please contact:
Versarien Plc
Neill Ricketts - Chief Executive Officer +44 (0) 1594 887204
Chris Leigh - Chief Financial Officer
Dr Stephen Hodge - Chief Technology Officer
SP Angel Corporate Finance (Nominated Adviser and Joint Broker)
Matthew Johnson +44 (0) 20 3470 0470
Ewan Leggat
Adam Cowl
Berenberg (Joint Broker)
Mark Whitmore +44 (0) 20 3207 7800
Ciaran Walsh
IFC Advisory Limited (Financial PR & Investor Relations)
Tim Metcalfe +44 (0) 20 3934 6630
Zach Cohen
Notes to Editors:
The strategy of Versarien Plc (AIM:VRS) is to be a globally recognised
graphene company with a wide portfolio of high-quality verified materials
allied to the largest relevant IP portfolio supported by its own UK based
research and development centre driving recurring revenue growth through its
innovative graphene product applications.
For further information please see: http://www.versarien.com
(http://www.versarien.com)
Chair's Statement
I am pleased to provide this, my first statement as Non-executive Chair of
Versarien, relating to the first twelve months of the extended 18-month
accounting period. In the interim report for the first six months we stated
that we would be concentrating our graphene activities on the construction and
textile sectors, utilising our ability to help improve the environment by
using graphene to reduce CO(2) emissions, reduce weight and improve recycling.
We continue to expand our production capability at Longhope, Gloucestershire,
and develop our international footprint and product portfolio with the
objective of being a global player in the graphene market. At the same time
monetisation of the technology remains a priority and the progress made since
my appointment a few months ago is pleasing to see.
We are engaging with a number of international textile brands to launch
garments in the coming seasons and have launched our Graphene-Wear(TM) website
to showcase what can be achieved.
Cementene(TM), our graphene admixture, has been used in a number of concrete
pours, providing validation for the technology. The next stage will be to
obtain the necessary accreditations to allow full-scale commercialisation, a
process which is underway.
Whilst we focus on our objective of monetisation it is also vital that we
maintain a pipeline of development opportunities that will provide future
revenues. Global packaging companies are now showing increased interest in how
graphene can aid sustainability and development agreements are in place.
Participating in the UK's Digital Roads for the Future programme also affords
greater opportunities in UK infrastructure projects.
In concluding, whilst we are pleased with the progress made we cannot ignore
the fact that the pandemic and recent macro-economic events have provided a
challenging environment, especially as we have a global footprint to our
operations. Whilst these factors have delayed certain near-term projects, it
has not affected our objectives and we remain acutely aware of our
shareholder's expectations.
I would like to thank all our staff for their continued endeavours and very
much look forward to reporting further progress.
Diane Savory OBE
Non-executive Chair
Chief Executive Officer's Review
I am pleased to report on the progress that the Group has made, particularly
in pursuit of solutions to the environmental challenges we all face. Reducing
CO(2) emissions, light-weighting, electrification and recycling are all
matters where Versarien's advanced material technology can play a significant
role.
The DSTL contract has been successfully delivered and we are having ongoing
dialogue with the UK defence sector. The development work under the GSCALE
project is nearing completion, and under the terms of the Innovate UK loan the
next two years will be focussed on commercialising the developed technology.
Monetisation of this and Versarien's portfolio of other opportunities remains
the focus both in the UK and globally. The highlights of our recent progress
are set out below.
Construction:
The global construction industry is one of the biggest contributors to CO(2)
production, accounting for c.39% of energy and process-related carbon dioxide
emissions with concrete alone contributing c.8% of the world's CO(2)
emissions. A small amount of graphene added to concrete can offer a way of
significantly reducing CO(2) emissions, as well as increasing the strength and
durability of the concrete, whilst reducing costs through less labour and
steel. With the UK and EU objectives of drastically reducing carbon emissions
by 2030 and for Europe to be a carbon neutral continent by 2050, the
development of Cementene(TM) and Polygrene(TM) products provides a valuable
societal and economic benefit.
The global ready-mix concrete market is forecast to reach US$1,375bn by 2028
and it is estimated that the global market for graphene included in cement
could be approximately £900 million per annum by 2030. Obtaining a
significant share of that market is a primary focus for us. At our facilities
at Longhope we conducted a 10,000 square foot pouring of our graphene-enhanced
concrete for the Company's new innovation centre. The graphene-enhanced
polypropylene fibres eliminated the need for steel rebar, thereby reducing
costs and CO(2) emissions.
We have also demonstrated the efficiency of using 3D printed graphene enhanced
cement with the production of the Lunar Pod, a 3D printed graphene enhanced
concrete dwelling which has uses from garden offices to humanitarian shelters.
The Lunar Pod was designed to showcase our technology and since its launch has
proved to be a valuable marketing tool.
Having demonstrated the technical viability of our graphene enhanced cement,
the next stage is to gain the required accreditations under BS EN 8500.
Further internal testing is underway to meet BS EN 934-2.
Textiles/footwear and leisure-wear:
Further to previous announcements regarding the collaboration with a prominent
global sports and fashion wear manufacturer, the customer, Umbro, has
confirmed, post period end, that they will launch a range of graphene-enhanced
garments as part of their Elite Pro-Training Kit range which will be available
for sale in the spring/summer collection in 2023. The garments will be
available in several countries around the world and will feature the Versarien
Graphene-Wear(TM) technology and trademark.
Following a period of collaboration, our strategic partner in South America,
GoToGym (a venture capital backed business), is launching a new range of
active wear garments featuring Versarien's Graphene-Wear(TM) technology and
trademark. GoToGym is working with retail partners in North and South America
with the garments to be manufactured in Brazil.
Following delays caused by the Covid pandemic in Sri Lanka, we are working
with our partner MAS Holdings on a number of projects, which involve the
commercial team, MAS Active, and the development team at Twinery, Innovations
by MAS. The projects are a result of further development work carried out at
The Royal College of Arts (Textile Division) which was able to further develop
the printed graphene ink technology in both ink designs and different fabric
compositions.
We are pushing forward with applying our Graphene-Wear(TM) ink technology to
Superdry's core fabrics that will be used to create garments for a 2023
launch. Print trials are underway with their supply chain partners and once
completed, it will scale up into production. We will be looking to establish a
trademark licence royalty agreement for the products sold which we expect to
be a framework for future projects with the company.
We are working closely with a niche fabric and garment manufacturer with
capabilities here in the UK and the Middle East. We will be applying our
Graphene-Wear(TM) ink technology to a range of their fabrics for them to
manufacture sportswear garments. They will be selling these garments to their
UK customers and also into the Middle East where the company has established
teamwear and retail supply channels.
We have developed several Graphene-Wear(TM) rubber compounds with our
customers, one of which has been used to create the outsole component of the
Flux AdaptMid athletic shoe. Flux has completed the prototyping stage and the
shoes are ready for mass production. Versarien is offering the first 500 pairs
off the production line in the autumn-winter 2022 season for the UK market
(available for pre-order now). Flux will be placing the shoe on sale in the
USA market immediately following this. We will be receiving a trademark
licence royalty on each pair sold.
We have supplied an initial 20kg of our Graphene-Wear(TM) rubber compound to a
major UK apparel manufacturer for them to mould into prototype outsoles and
outsole inserts, that they will be testing for performance parameters.
We have launched our Graphene-Wear(TM) website https://graphene-wear.com
(https://graphene-wear.com) to showcase the technologies that we offer.
Alongside this, the Company's recently published white paper shows the
scientific validation behind our technology and offers data points for our
customers to view and assess.
We have been working with Inspecs Group to develop graphene enhanced eyewear
products that improve frame strength and durability with initial technical
tests proving successful. Rollout is anticipated in 2023 and further
information will be announced in due course.
The graphene market for the textiles and footwear sector is estimated to be
approximately £400 million per annum by 2030 and consequently this sector
remains a high priority for Versarien.
Automotive
There are significant weight, structural and cost-saving benefits to using
graphene-enhanced carbon fibre reinforced polymers (CFRP) in the automotive
sector particularly with regard to vehicle weight reduction which improves
range for electric vehicles and fuel consumption for internal combustion
engined vehicles.
As stated in the first interim report for the period, the Lotus Evija bonnet
was successfully developed as part of the Technology Developer Accelerator
Programme and further development will continue as the parties look at
optimisation of the process for use in any body panel. This, together with the
results of the DSTL project are enabling further light-weighting development,
including a new bio-based resin with a reduced carbon footprint.
Graphene also has the potential to enhance the performance of tyres. It can
reduce the rolling resistance that, in turn, increases the fuel efficiency of
the vehicle or, in the case of an EV, offer increased range.
We are now coming to the end of the initial lab scale tests for Enso Tyres,
with. the next step to repeat the most promising lab scale tests with a second
independent test house to ensure we have robust test data to base any future
prototype tyres upon.
The graphene market in the automotive sector is forecast to be £300 million
per annum by 2030, so continues to be a focus for Versarien.
Aerospace
Graphene applications in the aerospace industry remain in the early stages of
research with light-weighting, fire retardancy, ice protection systems,
lightning strike protection and electrification among the applications
currently being explored.
We are at month 24 of 42 in the SpearHead 10 GICE project led by Airbus, with
a return to face-to-face meetings following Covid restrictions. Versarien has
been developing graphene heater mats to be integrated into several aircraft
demonstrators and has had the technology validated to Technology Readiness
Level 3 ("TRL") (Airbus internal TRL scale 1-6). These heater mats are due to
be integrated into the various aero foil structures and have been through
preliminary icing wind tunnel testing prior to a comprehensive icing wind
tunnel campaign later this year.
Within the Graphene Flagship, Versarien is also working with SpearHead 11
project SafeGraph, with the graphene heater mats a case study for
understanding the Lifecycle Analysis (LCA) and exposure to nanomaterials
during the various stages - e.g. graphene production, heater mat manufacture
and integration, during operation and at end-of-life.
Steve Hodge, the Company's CTO, also maintains an active role as part of the
Graphene Flagship's ECHA-REACH working group.
The graphene aerospace market is estimated to be approximately £70 million
per annum by 2030 so continues to be a focus for the Company.
DSTL Contract
The Company contracted with the UK's Defence Science and Technology Laboratory
(DSTL) in 2020 to undertake a package of work to better understand the
benefits that graphene-loaded materials may bring to defence applications.
This project completed successfully on schedule by 31 March 2022 with the
delivery of demonstrators in two areas of application with some final reports
to be delivered post-period end. The manufacture of the demonstrators has been
proven to be a realistic practical undertaking utilising the materials
developed on the project.
One of the project work streams involved military bridging, where a quarter
scale bridge designed by Versarien was modelled using finite element analysis
(FEA) and manufactured from graphene-enhanced carbon fibre polymer composite
with minimal metallic elements. The bridge underwent rigorous mechanical
testing to validate FEA models and will be housed at our Longhope facility.
Exploitation plans have been developed and there is now ongoing discussion
with DSTL and industry OEMs to explore and capture exploitation opportunities
in the short, medium and long terms. The project was a first for the Company
and while it has delivered on its technical requirements, the fruitful and
constructive relationship that has now been developed with DSTL has put the
Company on a firm footing for future engagements with the UK defence sector.
United States of America
We continue to make good progress in the US market, adding new customers,
signing new NDAs, entering into new projects, and selling samples. Our
long-term relationships are moving towards monetisation with Rust-Oleum, (a
coatings company), having now completed long term corrosion testing. We have
performed companion electrical corrosion testing in our UK labs, and the
results are good. The material is expected to be used in "professional grade"
corrosion inhibiting primer as soon as Versarien Graphene Inc. attains the
appropriate certification.
We have received our first order for sample material from NASA where our
graphene will be investigated for space-craft coating applications. We are
also working with a major fabric and yarn manufacturer to include Versarien's
graphene in ballistic protection, stab resistant, flame retardant and abrasion
resistant garments as well as a high-end bicycle chain lubrication
manufacturer where Versarien's graphene materials have performed exceptionally
well in preliminary tests.
Interest is being shown by various US universities in understanding more about
Cementene(TM) with a view to including us in their customer led concrete
projects where significant US Government funding for infrastructure is in
place.
South Korea
Good progress has been made at Versarien Korea Limited ("VKL") where strong
partnerships have been forged with academic and industrial partners. The core
focus has been on chemical vapour deposition ("CVD") growth optimisation with
a portfolio of CVD graphene products on different substrates to be launched
pending independent testing through the Graphene Flagship's characterisation
services. VKL is also looking at opportunities to sell Versarien Graphene
Limited's Cementene(TM) and Graphene-Wear(TM) products in Korea.
South America
Graphene enhanced masks for COVID protection continue to be of interest to the
Brazilian market where the licence agreement with Gerdau providing a royalty.
Gerdau is currently going through the process of getting the masks cleared by
the Brazilian Health Authorities after their initial order of 270,000 units.
Mature Businesses
Trading conditions for the mature businesses have improved over the last 12
months, but nonetheless remain challenging. Revenues were up 15% to £5.74
million (2021: £4.98 million), broadly the same in each half, but pressure on
margins has resulted in a small loss for the 12 months.
Current trading and outlook
Trading in the current period has started satisfactorily with order books at
the mature businesses showing signs of improvement. Our primary focus remains
on the opportunities we see in the construction and textile/leisure sectors
where the potential graphene markets are significant and within which we are
moving towards commercial product sales at the fastest rate. I look forward to
reporting further progress in due course.
Neill Ricketts
Chief Executive Officer
Chief Technology Officer's Review
The Innovate UK GSCALE programme has been running for over 18 months with the
£5 million loan supporting Versarien in advancing its graphene manufacturing
capabilities, progressing research and development of new graphene enhanced
materials, with the primary focus on commercial exploitation. This work is now
largely complete and now the focus will be on monetising the technology.
We have joined the Digital Roads of the Future (DRF) Partnership which has two
funding streams in place. The first being Digital Roads, an £8.6 million
project sponsored by the Engineering and Physical Sciences Research Council,
Costain, National Highways, the University of Cambridge; and the second being
Future Roads, a £5.8 million project sponsored by 2020 Marie
Skłodowska-Curie Actions COFUND (a European funding initiative), Costain and
National Highways. Being a partner in this programme offers Versarien the
ability to become an active player in a £14.5 million programme over five
years, developing direct links to National Highways (formerly Highways
England), developing stronger links with a major international Tier 1
construction company, Costain, gaining funded support for graphene material
and technology development, and delivering UK wide projects with graphene
materials and technologies on the road network.
We have excellent relationships with both the University of Cambridge and
Costain and by using our graphene admixture for cementitious materials,
Cementene(TM), we can offer significant advantages to new concrete material
structures including approximate 20% cost savings on ground bearing slab,
reduction of CO(2) emissions of up to 50%, use up to 30% less material
(reduction in thickness), removal/ significant reduction in steel rebar
requirements, no visible or microscopic cracking and highly workable concrete.
We are in phase 2 of a development programme for graphene-based packaging
applications for a European based multi-national food products company.
Similar interest is being shown by the leading global packaging and paper
producer in Brazil with a development contract also now in place. The
objective is to improve sustainability as well as cost effective performance.
In Spain, Gnanomat continues to upgrade its pilot plant and manufacturing
capabilities as part of the INNPRESSME project. It has also signed a research
contract with a global petrochemical company to evaluate the use of metal
oxide/activated carbon black nanocomposites, inter alia, in active anode
materials of lithium ion batteries. It is making advances in its biocide
materials whilst developing prototypes for energy storage and developing new
ink formulations in conjunction with Cambridge Graphene. Gnanomat materials
have been utilised in the SUPPORTIVE project by 2-DTech and two supercapacitor
products have been developed with associated datasheets. We are engaging with
UK cell manufacturers to take forward optimised devices.
Dr Stephen Hodge
Chief Technology Officer
Chief Financial Officer's review
As stated in previous reports, the aluminium business based at Cheltenham has
now ceased and consequently these results are split between continuing and
discontinued operations and the segmental analysis between the technology and
mature businesses. Details of the discontinued operations are given in note 2
and include some additional minor revenues and costs in the run-off period
since the last interim report.
The revenue from the continuing businesses increased by 34% to £7.63 million
up from £5.69 million. Revenue from graphene, including that recognised under
the DSTL contract, was up 170% to £1.89 million from £0.70 million in the
comparative period of which DSTL accounted for £1.47 million (2021: £ 0.25
million).
The loss from continuing operations was £4.74 million (2021: £7.93 million).
This was after charging £1.15 million in respect of the valuation of the
Lanstead Sharing Agreements (2021: £3.28 million).
The adjusted LBITDA for continuing operations was £1.04million compared to
£1.88 million, an improvement of 45%, calculated as follows:
12 months ended 12 months ended
31 March 2022 31 March 2021
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations Discontinued operations TOTAL Continuing operations Discontinued operations TOTAL
(Loss)/profit from operations (4,738) (130) (4,868) (7,930) 22 (7,908)
Depreciation and Amortisation 1,396 41 1,437 1,135 98 1,233
Share based payments 1,156 - 1,156 1,193 - 1,193
Exceptional items - 64 64 441 - 441
Other losses 1,148 - 1,148 3,280 - 3,280
Adjusted LBITDA (1,038) (25) (1,063) (1,881) 120 (1,761)
The reported loss before tax for continuing operations was £5.14 million
(2021: £8.08 million). Group net assets at 31 March 2022 were £14.4 million
(31 March 2021: £16.5 million) with cash at the period end of £3.1 million
(31 March 2021: £2.4 million).
Net cash used in operating activities was £2.15 million (2021: £0.89
million) with trade and other payables reducing by £1.2 million as the HMRC
Covid payment plans unwound and trade creditor payment terms returned to
normal. Investment in development costs and equipment was £3.57 million
(2021: £1.68 million) and net principal lease payments were £0.63 million
(2021: £0.99 million) giving total cash outflows of £6.35 million (2021:
£3.56 million).
These activities were financed by net funds received from the Lanstead sharing
agreements of £3.17 million (2021: £2.34 million), net loans received of
£2.10 million (2021: £2.45 million) and net funds received from the share
issue to GrapheneLab Co Ltd. of £1.90 million (2021: £Nil) totalling £7.17
million (2021: £4.79 million).
The surplus of £0.82 million (2021: £1.23 million) resulted in reduced
drawings on the invoice finance facilities of £0.08 million (2021: £0.53
million) thus increasing cash at the period-end by £0.74 million (2021:
£0.70 million). As we progress our GSCALE project we continue to draw on the
£5 million Innovate UK loan facility, repayment of which is due to commence
in 2024.
The mature business segment, whilst seeing increased revenues, has incurred a
loss of £0.1 million; however the current order books are showing encouraging
signs of improvement.
Chris Leigh
Chief Financial Officer
Consolidated Interim Financial Statements
Group statement of comprehensive income
For the 12 months ended 31 March 2022
31 March 31 March
2022 2021
Unaudited Audited
Restated***
£'000 £'000
Notes
Continuing operations
Revenue 3 7,633 5,685
Cost of sales (5,179) (4,498)
Gross profit 2,454 1,187
Other operating income 195 103
Other losses* (1,148) (3,280)
Operating expenses (including exceptional items) (6,239) (5,940)
Loss from operations before exceptional items (4,738) (7,489)
Exceptional items 4 - (441)
Loss from operations (4,738) (7,930)
Finance charge (398) (148)
Loss before income tax (5,136) (8,078)
Income Tax 5 81 -
Loss from continuing operations (5,055) (8,078)
(Loss)/profit from discontinued operations** 2 (141) 10
Loss for the period (5,196) (8,068)
Loss attributable to:
- Owners of the parent company (5,083) (7,779)
- Non-controlling interest (113) (289)
(5,196) (8,068)
Loss per share attributable to the equity holders of the Company:
Basic and diluted loss per share 6 (2.62)p (4.45)p
There is no other comprehensive income for the year.
* The other losses in the period relates to the fair value assessment of the
Lanstead sharing agreements at the balance sheet date.
** Details of the components of the discontinued operations are given in note
2.
*** The audited results have been restated in accordance with the required
disclosure of discontinued operations.
Group statement of financial position
As at 31 March 2022
Note 31 March 31 March
2022 2021
Unaudited Audited
£'000 £'000
Assets
Non-current assets
Intangible Assets 7 11,555 9,706
Property, plant and equipment 4,673 4,119
Deferred taxation 25 25
Trade and other receivables 38 772
16,291 14,622
Current assets
Inventory 1,901 1,814
Trade and other receivables 2,558 6,449
Cash and cash equivalents 3,095 2,359
7,554 10,622
Total assets 23,845 25,244
Equity
Called up share capital 1,941 1,899
Share premium 34,948 33,003
Merger reserve 1,256 1,256
Share-based payment reserve 4,405 3,249
Accumulated losses (26,708) (21,625)
Equity attributable to owners of the parent company 15,842 17,782
Non-controlling interest (1,401) (1,288)
Total equity 14,441 16,494
Liabilities
Non-current liabilities
Trade and other payables 1,187 1,222
Deferred taxation 67 67
Innovate Loan 4,371 2,260
Long-term borrowings 396 356
6,021 3,905
Current liabilities
Trade and other payables 2,532 3,748
Provisions 53 119
Invoice discounting advances 549 631
Current portion of long-term borrowings 249 347
3,383 4,845
Total liabilities 9,404 8,750
Total equity and liabilities 23,845 25,244
Group statement of changes in equity
For 12 months ended 31 March 2022
Share Share Merger Share-based Accumulated Non- Total
capital premium reserve payment losses controlling equity
£'000 account £'000 reserve £'000 interest £'000
£'000 £'000 £'000
At 1 April 2020 (audited) 1,697 25,497 1,256 2,056 (13,846) (999) 15,661
Issue of shares 202 7,506 - - - - 7,708
Loss for the year - - - - (7,779) (289) (8,068)
Share-based payments - - - 1,193 - - 1,193
At 31 March 2021 (audited) 1,899 33,003 1,256 3,249 (21,625) (1,288) 16,494
Issue of shares 42 1,945 - - - - 1,987
Loss for the period - - - - (5,083) (113) (5,196)
Share-based payments - - - 1,156 - - 1,156
At 31 March 2022 (unaudited) 1,941 34,948 1,256 4,405 (26,708) (1,401) 14,441
Included within the merger reserve is £53,000 in respect of the merger with
Versarien Technologies Limited (now Versarien Graphene Limited) and £964,000
in respect of the acquisition of Total Carbide Limited and £239,000 in
respect of the acquisition of AAC Cyroma Limited.
Statement of Group cash flows
For the 12 months ended 31 March 2022
12 months ended
31 March Year ended
2022 31 March
Unaudited 2021
£'000 Audited
£'000
Cash flows from operating activities
Cash used in operations (1,911) (734)
Interest paid (242) (160)
Net cash used in operating activities (2,153) (894)
Cash flows from investing activities
Purchase/capitalisation of intangible assets (2,190) (1,638)
Purchase of property, plant and equipment (1,377) (42)
Net cash used in investing activities (3,567) (1,680)
Cash flows from financing activities
Share issue 1,926 -
Share issue costs (23) (134)
Funds received from Innovate UK 2,111 2,260
Funds received from sharing agreements 3,171 2,479
Net funds (paid)/received from CBILS (13) 186
Principal payment of leases under IFRS 16 (634) (990)
Net invoice discounting advances (82) (525)
Net cash generated from financing activities 6,456 3,276
736 702
Increase in cash and cash equivalents
Cash and cash equivalents at start of period 2,359 1,657
Cash and cash equivalents at end of period 3,095 2,359
Note to the statement of Group cash flows
For the 12 months ended 31 March 2022
12 months ended
31 March Year ended
2022 31 March
Unaudited 2021
£'000 Audited
£'000
Loss before income tax (5,277) (8,068)
Adjustments for:
Share-based payments 1,156 1,193
Depreciation 1,096 1,081
Amortisation 341 152
Disposal of tangible assets 86 -
Finance cost 409 160
R&D Tax credit received 81 -
Loss on FV movement of share agreement 1,148 3,280
Increase/(Decrease) in trade and other receivables and investments 306 (211)
(Increase)/Decrease in inventories (87) 438
(Decrease)/Increase in trade and other payables (1,170) 1,241
Cash used in operations (1,911) (734)
Discontinued operations 12months ended Year ended
31 March 31 March
2022 2021
Unaudited Unaudited
£'000 £'000
Net cash generated/(used) in operating activities 122 34
Net cash used in investing activities (3) -
Net cash generated/(used) from financing activities (118) (37)
Increase in cash and cash equivalents from discontinued operations 1 (3)
Notes to the unaudited interim statements
For the 12 months ended 31 March 2022
1. Basis of preparation
Versarien Plc is an AIM quoted company incorporated and domiciled in the
United Kingdom under the Companies Act 2006. The Company's registered office
is Units 1A-D, Longhope Business Park, Monmouth Road,
Longhope, Gloucestershire, GL17 0QZ.
The interim financial statements were prepared by the Directors and approved
for issue on 12 May 2022. These interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 March 2021 were approved by the
Board of Directors on 16 August 2021 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified and
did not contain statements under sections 498 (2) or (3) of the Companies Act
2006.
As permitted, these interim financial statements have been prepared in
accordance with UK AIM Rules and UK-adopted IAS 34, "Interim Financial
Reporting". They should be read in conjunction with the annual financial
statements for the year ended 31 March 2021, which have been prepared in
accordance with UK-adopted international accounting standards, consistent with
the IFRS framework adopted in UK law. The accounting policies applied are
consistent with those of the annual financial statements for the year ended 31
March 2021, as described in those annual financial statements. Where new
standards or amendments to existing standards have become effective during the
year, there has been no material impact on the net assets or results of the
Group.
These interim financial statements have been prepared on a going concern basis
making the following assumptions:
• The Group meets its day-to-day working capital requirements through careful
cash management and the use of its invoice discounting facilities which are
expected to continue;
• As at 31 March 2022, the Group had cash balances totalling £3.10
million with £0.44 million of headroom on its invoice discounting
facilities;
• The Group was awarded a £5 million loan by Innovate UK to fund certain of
its activities, of which £0.6 million remains to be drawn;
• The Group receives monthly settlements from its sharing agreements with
Lanstead, the quantum of which is dependent upon share price; but which will
cease in July;
• The Group has unused authority to issue 29 million shares without pre-emption
rights until the next AGM due by 30 September 2022 and expects the placing
authority to be renewed; and
• That there are a number of mitigating actions the Group could implement, such
as reducing the funds spent on development of its technologies and overheads
to concentrate solely on GSCALE commercial opportunities.
The Directors have prepared detailed projections of expected future cash flows
for a period of twelve months from the date of issue of this interim
statement. These indicate that the Group will need to raise additional funding
in the following financial year. The Board remains confident that the Group
will be able to secure the required funding through strategic investment,
equity issue or other financial instruments. However, the timing and
availability of funding sources is currently outside of the control of the
Board and none of this funding is committed at the date of these interim
statements. Whilst noting this, the Directors continue to adopt the going
concern basis in preparing the consolidated financial statements.
Certain statements within this report are forward looking. The expectations
reflected in these statements are considered reasonable. However, no assurance
can be given that they are correct. As these statements involve risks and
uncertainties the actual results may differ materially from those expressed or
implied by these statements. The interim financial statements have not been
audited.
2. Discontinued operations
On 5 August, within the preliminary results statement, the Group announced its
decision to exit the non-core aluminium business of Versarien Technologies
Limited based in Cheltenham. The company has been re-named Versarien Graphene
Limited and will be used as the revenue generating entity for UK graphene
sales whilst 2-DTech Limited and Cambridge Graphene Limited will continue as
the UK research and development arms of the graphene business. Financial
information relating to the discontinued operation is set out below.
Notes 12 months ended
31 March 2022
Unaudited Year ended
£'000 31 March
2021
Unaudited
£'000
Revenue 3 534 882
Cost of sales (427) (614)
Gross profit 107 268
Other operating income 1 4
Operating expenses (including exceptional items) (238) (250)
Profit from operations before exceptional items (66) 22
Exceptional items 4 (64) -
(Loss)/Profit from operations (130) 22
Finance charge (11) (12)
Profit before income tax (141) 10
Income Tax 5 - -
Profit from discontinued operations (141) 10
3. Segmental information
The segment analysis for the twelve months to 31 March 2022 is as follows:
Central Technology Businesses Mature Businesses Discontinued Operations Intra-group TOTAL
Adjustments
£'000 £'000 £'000 £'000 £'000 £'000
Revenue - 1,891 5,742 534 - 8,167
Gross Margin - 933 1,521 107 - 2,561
Other gains/(losses) (1,148) - - - - (1,148)
Other operating income - 191 4 1 - 196
Operating expenses (2,041) (2,672) (1,552) (238) 26 (6,477)
(Loss)/ profit from operations (3,189) (1,548) (27) (130) 26 (4,868)
Finance income/(charge) (283) (41) (74) (11) - (409)
(Loss)/profit before tax (3,472) (1,589) (101) (141) 26 (5,277)
The segment analysis for the twelve months to 31 March 2021 is as follows:
Central Technology Businesses Mature Businesses Discontinued Operations Intra-group TOTAL
Adjustments
£'000 £'000 £'000 £'000 £'000 £'000
Revenue - 703 4,982 882 - 6,567
Gross Margin - 91 1,096 268 - 1,455
Other gains/(losses) (3,280) - - - - (3,280)
Other operating income - 103 - 4 - 107
Operating expenses (2,686) (1,638) (1,584) (250) (32) (6,190)
(Loss)/ profit from operations (5,966) (1,444) (488) 22 (32) (7,908)
Finance income/(charge) (44) (33) (71) (12) - (160)
(Loss)/profit before tax (6,010) (1,477) (559) 10 (32) (8,068)
4. Exceptional items
12 months ended 12 months ended
31 March 31 March
2021 2021
Unaudited Audited
£'000 £'000
Continuing operations:
Relocation and restructuring costs - 53
Costs relating to expansion in Asia - 137
Acquisition costs - 186
Other - 65
- 441
Discontinued operations:
Relocation and restructuring costs 64 -
64 -
5. Taxation
The tax charge on the results for the period has been estimated at £nil
(2021: £nil). At the last year end the Group had £19.4 million of trading
losses carried forward to set-off against future trading profits. Taxation
received in the year relates to R&D tax credit.
6. Loss per share
The loss per share has been calculated by dividing the loss after taxation of
£5,083,000 (2021: £7,779,000) by the weighted average number of shares in
issue of 193,997,352 (2021: 174,660,000) during the period.
The calculation of the diluted earnings per share is based on the basic
earnings per share adjusted to allow for the issue of shares on the assumed
conversion of all dilutive options. However, in accordance with IAS33
"Earnings per Share", potential Ordinary shares are only considered dilutive
when their conversion would decrease the profit per share or increase the loss
per share. As at 31 March 2022 there were 14,677,130 (2021: 14,677,130)
potential Ordinary shares that have been disregarded in the calculation of
diluted earnings per share as they were considered non-dilutive at that date.
7. Intangible assets
31 March 31 March
2022 2021
Unaudited Audited
£'000 £'000
Goodwill 3,555 3,555
Customer relationships/order books - 27
Development costs 4,535 2,453
Licence 48 58
Intellectual property 3,417 3,613
Total 11,555 9,706
8. Dividends
As stated in the 2013 AIM Admission document, the Board's objective is to
continue to grow the Group's business and it is expected that any surplus cash
resources will, in the short to medium term, be re-invested into the research
and development of the Group's products. Consequently, the Directors will not
be recommending a dividend for the foreseeable future. However, the Board
intends that the Company will recommend or declare dividends at some future
date once they consider it commercially prudent for the Company to do so,
bearing in mind its financial position and the capital resources required for
its development.
9. Interim Report
This interim announcement is available on the Group's website at
www.versarien.com (http://www.versarien.com)
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