REG - Versarien PLC - Preliminary Results
RNS Number : 7513FVersarien PLC17 July 201917 July 2019
Versarien Plc
("Versarien" or the "Company" or the "Group")
Preliminary Results for the year ended 31 March 2019
Versarien Plc (AIM:VRS), the advanced engineering materials group, is pleased to announce its unaudited results for the year ended 31 March 2019.
Operational highlights
·
Thirteen new graphene application collaborations and MOU agreements secured during the year, with one entered into post period, with partners based in the UK and overseas
·
Versarien joined the Graphene Engineering Innovation Centre ("GEIC") as a tier one member gaining access to development and scale-up facilities worth c.£60 million
·
Continued investment in capital equipment as collaboration agreements progress
·
Acquisition of Gnanomat S.L. ("GNA"), a company based in Spain developing energy storage technology
·
Establishment of a US subsidiary, Versarien Graphene Inc., to exploit opportunities in North America
·
UK Government continues to support the Company's international expansion plans by seconding staff to Versarien, an 'Export Champion'
·
PolygreneTM launched, a new graphene enhanced polymer to improve thermal and electricity conductivity
·
Mature businesses showing steady financial performance providing stability for the emerging businesses
Financial highlights
·
Group revenues remained steady at £9.14 million (2018: £9.02 million)
·
Adjusted LBITDA* of £1.1 million (2018: £0.8 million)
·
Loss before tax of £2.8 million (2018: £1.6 million) after share based payments charge in the year of £0.7 million (2018: £0.1 million)
·
Cash at 31 March 2019 of £4.3 million (2018: £2.3 million)
·
Successful fundraising of £5.2 million gross in September 2018
·
Net assets increased by 66% to £13.3 million (2018: £8.0 million)
* Adjusted LBITDA (Loss before interest, tax, depreciation and amortisation) excludes exceptional items and share based payment charges.
Post Period Highlights
·
Versarien became the first company in the world to complete the US Graphene Council's 'Verified Graphene Producer' programme validating our technology to customers and collaborators
·
First graphene orders received from the USA and Japan
·
Term Sheet signed with the Beijing Institute of Graphene Technology ("BIGT") for China expansion
·
EU 'REACH' approval to produce up to 10 tonnes of graphene per annum received
·
Appointment of Susan Bowen as a Non-executive Director
Commenting on the results, Neill Ricketts, Chief Executive Officer of Versarien, said: "The year to 31 March 2019 has, again, been one of great progress for Versarien particularly in our emerging technologies businesses, globally and in the UK. The graphene businesses have delivered on our strategy of expansion into global markets and progress is being seen in our existing collaborations, as well as new collaborations being entered into. We look forward to showcasing our new technologies at future investor events.
"Having spent some time examining opportunities for expansion into China, the Board concluded that the best one lies with BIGT and consequently signed a term sheet with them in April 2019. A wholly owned foreign enterprise is being established and will be managed by BIGT on behalf of Versarien, with planned investment from a BIGT managed fund. BIGT will focus on both the manufacture and sale of our graphene in China using our patented technology.
"Opportunities in South Korea, Japan and India are emerging as a result of the support given to us by the UK Government seconded staff and we have established operations in North America, albeit they are at an early stage.
"New graphene production equipment has been installed in the UK and is now up and running at our Cheltenham manufacturing site which will enable us to meet the initial expected demands of our graphene based products. Testing of new equipment is underway which, if successful, would expand our production capacity to up to 30 tonnes per annum of high quality graphene. Manufacture and sale of graphene at these levels requires certain permissions under EU regulations and I am pleased to report that we have been successful in our registration and are now accredited to produce significant volumes of graphene under the EU rules for chemical production.
"Our mature businesses have focussed on efficiency gains and overall have returned acceptable results whilst also looking at opportunities for inclusion of graphene in their future products. This includes using graphene in headphones and mobile phone cases, through to producing Hexotene enhanced ceramics for use in satellite engines.
"I would like to take this opportunity to thank our continually supportive investor base and our employees for their hard work as we look forward to the future with optimism and confidence."
For further information please contact:
Versarien Plc
Neill Ricketts - Chief Executive Officer
+44 (0) 1242 269122
Chris Leigh - Chief Financial Officer
Cannacord Genuity Group Inc (Nominated Adviser and Broker)
Bobbie Hilliam / Emma Gabriel
+44 (0)20 7523 8000
IFC Advisory (Financial PR and IR)
Tim Metcalfe / Graham Herring / Heather Armstrong
+44 (0) 20 3934 6630
Notes to Editors:
About Versarien
Versarien Plc (AIM:VRS), is an advanced engineering materials group. Leveraging proprietary technology, the Group creates innovative engineering solutions for its clients in a diverse range of industries. Versarien has six subsidiaries operating under two divisions:
Graphene and Plastics
2-DTech Limited, which specialises in the supply, characterisation and early stage development of graphene products. www.2-dtech.com
AAC Cyroma Limited, which specialises in the supply of vacuum-formed and injection-moulded products to the automotive, construction, utilities and retail industry sectors. Using Versarien's existing graphene manufacturing capabilities, AAC will have the ability to produce graphene-enhanced plastic products. www.aaccyroma.co.uk
Cambridge Graphene Ltd, supplies novel inks based on graphene and related materials, using patented processes to develop graphene materials technology.
Gnanomat S.L. ("GNA"), based in the Parque Cientifico Madrid, Spain, is a company capable of utilising Versarien's graphene products in an environmentally friendly, scalable production process for energy storage devices that offer high power density, fast recharging and long lifetime for use in electrical vehicles and portable electronics products. www.gnanomat.com
Hard Wear and Metallic Products
Versarien Technologies Limited has developed an additive process for creating advanced micro-porous metals targeting the thermal management industry and supplies extruded aluminium. www.versarien-technologies.co.uk
Total Carbide Limited, a leading manufacturer in sintered tungsten carbide for applications in arduous environments such as the oil and gas industry. www.totalcarbide.com
Chief Executive's Statement
Versarien consists of two main business segments; Graphene and Plastic Products focussed on delivering graphene solutions through plastics and carbon fibre composites, and Hard Wear and Metallic Products focussed on delivering aluminium and tungsten carbide products.
Graphene and Plastic Products
The graphene businesses continue to make significant progress. We are very proud to be the first company in the world to receive independent verification from the US based Graphene Council that has declared our Nanene graphene nano-platelets meet their standards. Not only is this a confirmation of the quality of our product, but also provides us with a competitive advantage.
With the launch of PolygreneTM, we have again increased our range of graphene-based products, providing a polymer which can improve thermal and electrical conductivity.
The UK Government continues to provide support to Versarien with seconded staff and has also entered into partnership with us as an 'Export Champion'. This support enables us to increase our global presence and succeed in our global strategy. In China we now have many MOUs (multiple with Fortune 500 companies) which are project related across a multitude of sectors, with work either currently on-going or with preliminary discussions and testing taking place. In South Korea we have two collaboration agreements now in place and discussions with around 20 companies which are on-going and we are engaging with JETRO, a core government organisation for attracting inward investment in Japan. In India we are looking at opportunities for a joint venture arrangement with a suitable partner.
I am pleased to provide an update on our current commercial collaborations:
Date entered into
Description
Current status
October 2017
Collaboration with Israel Aerospace Industries
Development of applications continuing with multiple partners, including GEIC and Warwick Manufacturing Group ("WMG").
November 2017
Collaboration with Global Consumer Goods Company
Blow moulded bottle samples were successfully produced at customer facility. Samples currently being tested and assessed at customer facility and WMG. A new agreement has also been signed with a separate division of this company. The agreement will focus on the development of flexible packaging solutions and seek to utilise graphene properties in new and existing packaging.
December 2017
Agreement with Global Chemical Major
Masterbatch testing completed with notable improvements in puncture resistance. Further tests underway with Graphinks and Hexotene.
January 2018
Agreement with Global Apparel Manufacturer
First sample garments produced and independently tested to industry standards by a recognised UK based test house. The results show wide improvement in key areas when compared to a non-graphene garment. The key areas included abrasion resistance, moisture and air permeability, water vapour and thermal resistance, stretch, wicking and drying rate. A Second batch of garments is currently being produced and will go to other engagement partners for wearer trials.
February 2018
Medical Technology collaboration at Addenbrooke's hospital
Initial positive discussions have now been held with two leading global manufacturers of dressings and further multi-partner discussions will be held in the near future.
February 2018
Agreement with the shoemaker Vivobarefoot
Production relocation caused temporary delay to the project. Initial compounding of materials has now been successfully completed with different variations of materials and loadings. Further tests now underway and first samples to be produced. Commercial understanding over a launch product in place.
March 2018
Collaboration with Team Sky (now Team INEOS) for cycling equipment
Project held up due to change of sponsor. The parties will re-engage in September 2019.
March 2018
Collaboration with world leading aerospace group
Sample parts have been sent to us for initial evaluation.
April 2018
Agreement with Luxus
Active supply chain partner, who are working with us on various projects.
May 2018
Consumer goods collaboration for polymer structures in plastics
Initial testing at limited loadings showed a demonstrable improvement in potential use of plastics. Targets have now been set to achieve significant reductions in plastics use. Further development in bottle design and weight/percentage loadings has now commenced.
June 2018
Agreement with Arrow Green Tech
IP application submitted for initial water-soluble polymer. Engagement underway in India with multiple companies across various sectors.
June 2018
Commercial agreement with MediaDevil
First earphones launched into the market in December 2018, with next generation products now being designed. In addition, new accessories such as phone cases with graphene have now been tested, with launch dates currently being planned.
July 2018
Collaboration with ZapGo Ltd
Trials continue with different materials and loadings.
August-2018
Sporting goods collaboration
Initial trials of a new Polygrene mix show significant improvement in outer soles with further development now underway. In addition, work has commenced on a new design for another variation of football shoe. Confirmation that this partner will also feature in the wearer trials for the garments referred to in the update with the global apparel manufacturer.
August-2018
Collaboration with Axia Materials, South Korea
Consortium of companies exploring further funding opportunities and potential new partners.
August-2018
Construction materials collaboration with AECOM
Collaboration progressing well with additional collaboration agreement signed to investigate graphene enhanced concrete structures.
October-2018
Collaboration with Advanced Insulation
Testing underway at customer facility.
December 2018
Collaboration with Chinese Aerospace Company
Work plan created with involved multiple partners, including GEIC and WMG.
December 2018
MOU China Railway
Several projects are now underway including concrete projects which feature multiple partners, including GEIC.
December 2018
LOI/MOU Tungshu Optoelectronics
Our collaboration with Tungshu is continuing with a number of projects identified. These include flexible packaging, thermal interfaces for heat dissipation in electronics, thermoplastic components, various electrical devices and using graphene insole sensors in Tungshu's smart wearables.
March 2019
Further collaboration with Chinese Aerospace Company
Workplan created with involved multiple partners, including GEIC and WMG.
May 2019
Collaboration agreement with BP Polymers
Initial workflow plan agreed and being implemented.
The level of our graphene related sales is mainly dependent upon the rate at which our collaborations progress. The year under review has seen significant progress which is expected to validate our business model and provide future sales growth from the current minimal levels. Alongside the collaborations, we have seen an increase in interest following our Graphene Council verification with our first orders from partners in USA and Japan post period end.
During the year we have invested in new plant and equipment aimed at increasing annual production capacity to three tonnes of graphene and one tonne of Hexotene by the end of 2019. This should enable us to meet the expected demand for our high-quality graphene-based products.
We are now in discussions with many cities, provinces and companies in China, and have signed a Term Sheet with BIGT in April 2019. Final contracts have yet to be completed, so there cannot be certainty, but the intention is that other interested parties and regions will form tier two investment opportunities in joint ventures to be agreed.
Since its acquisition in October 2018, GNA has been awarded a patent by the Oficina Espanola de Patentes y Marcas, the Spanish patent office, covering a method of obtaining nanomaterials composed of carbonaceous material and metallic oxides. This has also been filed under the PCT regime.
GNA has also recruited a new Chief Technology Officer and successfully completed the testing of its pilot production plant. It has also entered into collaboration agreements with two supercapacitor manufacturers and is in dialogue with a further three global supercapacitor manufacturers, as well as participating in the European Battery Alliance.
AAC Cyroma, our plastics business, was principally a strategic purchase to allow us to incorporate graphene into plastic products as well as providing revenue and cash flow in its own right. Its revenues have remained stable and returned a reasonable result whilst working with the first mover collaborations, such as with Media Devil and its own customer base, with samples being provided for customer testing.
Hard Wear and Metallic Products
Our Hard Wear parts business has performed in line with the previous year and a recent review of operations has been conducted to improve operational efficiencies. It is particularly pleasing that it has seen an increase it its recent order books and is now involved in a project involving the use of Hexotene in ceramics. We have previously stated that the thermal/aluminum products business is non-core, but nonetheless recent restructuring has improved its business performance.
Key performance indicators
As a Group that consists of mature products supporting the development of early stage technology products, we concentrate on the following financial metrics:
2019
£'000
2018
£'000
Revenue
9,140
9,024
Gross margin percentage
27%
28%
Loss before interest, tax, depreciation, amortisation, exceptional costs and share based charges
(1,134)
(801)
Cash used by Graphene and Plastic Products
(1,305)
(1,090)
Cash used by Hard Wear and Metallic Products
(266)
(82)
Cash raised/(utilised) by parent (before loans to/from subsidiaries)
3,567
2,101
Net Cash raised and generated/(used) by the Group
1,996
929
Current trading and outlook
The Group has started the new financial year very positively, with pleasing levels of revenue and profit from its Plastics and Hard Wear and Metallic businesses. With the investment in operational efficiencies made in the year ended 31 March 2019, we anticipate a further positive impact to the results in the current financial year.
We have also seen progress in the US, with four new collaboration agreements having been recently entered into in North America, and were pleased to announce that we received our first order in June 2019 for 12kg of our graphene from a US based company, operating in the oil and gas exploration sector. We also look forward to working with potential new US based partners following the American Graphene Summit in May 2019, where Versarien was a leading participant.
We also look to the future with great excitement regarding our expansion into China, South Korea and Japan which could bring significant growth for the graphene businesses. We have already seen our first order from a North American corporate research and development centre of a Japanese headquartered company. This customer is a global automotive components company that has operations in over 40 countries, employing in excess of 250,000 people.
This current year we expect, with confidence, to see the benefits of the many achievements and progress that we have accomplished during the year ended 31 March 2019, and the continued trend of increased orders for our products.
Neill Ricketts
Chief Executive Officer
Financial Review
Versarien's revenue for the year ended 31 March 2019 was £9.1 million (2018: £9.0 million) with operating losses before exceptional costs, depreciation, amortisation and share based payment charges of £1.1 million (2018: £0.8 million).
Exceptional costs were £0.4 million (2018: £0.03 million) as a result of the Group's focus on global expansion and growth through acquisition. The loss before tax for the year was £2.8 million (2018: £1.6 million), after share based payment charges of £0.7 million in the year (2018: £0.1 million).
It is the Board's intention to continue to align shareholder and senior staff interests through the award of share options rather than just remuneration. IFRS 2 (share based payments) dictates the accounting treatment of such options using simulations such as Black Scholes or Monte Carlo to try and determine the fair value of such awards. These models contain many assumptions, but one which has a material impact on the valuation is share volatility. Versarien, in line with many other AIM quoted shares, has seen a high level of volatility since being admitted to AIM. The consequence of this is that such simulation models allow for large share price movements resulting in a high charge in the year of £0.7 million (2018: £0.1 million). This is a non-cash movement in the accounts and is simply an accounting transaction required under IFRS 2 to reflect the potential future value of the shares.
As part of the expansion of our graphene businesses in the UK and overseas, we have continued to invest heavily in them. We are confident, that whilst revenues of any material amount have yet to be achieved, with the investment that we have made, the accreditations awarded and progress of our collaborations this year, significant future revenues will be achieved. Adjusted LBITDA for the graphene businesses was £1.1 million (2018: £0.9 million).
Our plastics business, AAC Cyroma has had a steady year, returning revenues of £4.7 million (2018: £4.6 million) and EBITDA of £0.2 million (2018: £0.4 million).
Our mature Hard Wear and Metallic businesses have provided stability to support the development of the emerging businesses, with Total Carbide returning revenues of £3.2 million (2018: £3.2million) and EBITDA of £0.5 million (2018: £0.5 million) and Versarien Technologies similarly returning revenues of £1.2 million (2018: £1.2 million) and adjusted LBITDA of £0.1 million (2018 £0.1 million).
Group net assets at 31 March 2019 were £13.3 million (2018: £8.0 million) following the acquisition of Gnanomat S.L. ("GNA"). The consideration for the acquisition was £2,647,000 settled by cash of £0.7 million, by way of GNA issuing new shares in its company to Versarien, and the issue of 1,316,278 new ordinary shares of 1 pence each in Versarien to existing GNA shareholders at an agreed price of 150 pence per share. In September 2018 the Group successfully raised £5.2 million before expenses, and at the year end the Group had cash of £4.3m (2018: £2.3 million), of which £0.6 million (2018: £1.1 million) had been drawn under the invoice finance facilities. As at period end the Company had £0.6 million of headroom in its invoice finance facilities (2018: £0.7 million). The Directors consider this sufficient for our current activities over the coming twelve months having made certain assumptions, further details of which are contained below.
Cash outflow from operating activities was £1.7 million (2018: £1.9 million). The Group invested £0.7 million, net of cash, in acquisitions (2018: £nil), £0.4 million (2018: £0.1 million) in capitalised development costs, and £0.5 million (2018: £0.3 million) in plant and machinery.
Going concern
The financial statements, which are not yet approved, have been prepared on a going concern basis, which the Directors believe to be appropriate for the following reasons:
● The Group meets its day-to-day working capital requirements through careful cash management and the use of its invoice discounting facilities; and
● As at 31 March 2019, the Group had cash balances totalling £4.3 million with £0.6 million of headroom on its invoice discounting facilities.
The Directors have prepared detailed projections of expected future cash flows for a period of twelve months from the date of issue of this preliminary statement. These show that the Group is expected to have sufficient cash available to meet its obligations as they fall due for the foreseeable future (at least twelve months). These projections assume modest sales growth in the mature revenue generating businesses and the continued utilisation of the invoice finance facilities.
After due consideration, the Directors have concluded that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future (at least twelve months). For this reason, they continue to adopt the going concern basis in preparing the consolidated financial statements.
Chris Leigh
Chief Financial Officer
Group statement of comprehensive Income (unaudited)
Year ended 31 March 2019
Notes
2019
£'000
2018
£'000
Continuing operations
Revenue
2
9,140
9,024
Cost of sales
(6,706)
(6,496)
Gross profit
2,434
2,528
Other operating income
148
63
Operating expenses (including exceptional items)
(5,345)
(4,102)
Loss from operations before exceptional items
(2,343)
(1,477)
Exceptional items
3
(420)
(34)
Loss from operations
(2,763)
(1,511)
Finance costs
(66)
(50)
Finance income
-
-
Loss before income tax
(2,829)
(1,561)
Income tax
117
63
Loss for the year
(2,712)
(1,498)
Loss attributable to:
- Owners of the parent company
(2,473)
(1,381)
- Non-controlling interest
(239)
(117)
(2,712)
(1,498)
Loss per share attributable to the equity holders of the Company:
Basic and diluted loss per share
5
(1.64)p
(1.00)p
There is no other comprehensive income for the year.
Group statement of financial position (unaudited)
As at 31 March 2019
Notes
2019
£'000
2018
£'000
Assets
Non-current assets
Intangible assets
6
5,318
2,678
Property, plant and equipment
7
3,170
2,980
Deferred taxation
25
25
8,513
5,683
Current assets
Inventory
2,253
1,961
Trade and other receivables
2,141
2,437
Current tax
106
77
Cash and cash equivalents
4,292
2,296
8,792
6,771
Total assets
17,305
12,454
Equity
Called up share capital
8
1,536
1,486
Share premium account
8
19,776
12,529
Merger reserve
1,256
1,256
Share-based payment reserve
899
187
Retained losses
(9,698)
(7,225)
Equity attributable to owners of the parent company
13,769
8,233
Non-controlling interest
(493)
(254)
Total equity
13,276
7,979
Liabilities
Non-current liabilities
Trade and other payables
328
167
Deferred tax
69
64
Long-term borrowings
708
456
1,105
687
Current liabilities
Trade and other payables
1,528
1,849
Provisions
174
80
Current tax
257
284
Invoice discounting advances
603
1,117
Current portion of long-term borrowings
362
458
2,924
3,788
Total liabilities
4,029
4,475
Total equity and liabilities
17,305
12,454
Group statement of changes in equity (unaudited)
Year ended 31 March 2019
Share
capital
£'000
Share
premium
account
£'000
Merger
reserve
£'000
Share-based
payment
reserve
£'000
Accumulated losses
£'000
Non-controlling
Interest
£'000
Total
equity
£'000
At 1 April 2017
1,313
9,762
1,256
115
(5,844)
(137)
6,465
Issue of shares
173
2,767
-
-
-
-
2,940
Loss for the year
-
-
-
-
(1,381)
(117)
(1,498)
Share-based payments
-
-
-
72
-
-
72
At 31 March 2018
1,486
12,529
1,256
187
(7,225)
(254)
7,979
Issue of shares
50
7,247
-
-
-
-
7,297
Loss for the year
-
-
-
-
(2,473)
(239)
(2,712)
Share-based payments
-
-
-
712
-
-
712
At 31 March 2019
1,536
19,776
1,256
899
(9,698)
(493)
13,276
Statement of Group cash flows (unaudited)
Year ended 31 March 2019
Notes
2019
£'000
2018
£'000
Cash flows from operating activities
Cash used in operations
9
(1,737)
(1,907)
Interest paid
(66)
(50)
Corporation Tax paid
-
(9)
Net cash used in operating activities
(1,803)
(1,966)
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)
(673)
-
Purchase of intangible assets
(434)
(148)
Purchase of property, plant and equipment
(541)
(280)
Net cash used in investing activities
(1,648)
(428)
Cash flows from financing activities
Share issue
5,155
3,069
Share issue costs
(200)
(129)
Finance leases (net of repayments)
156
1
Invoice discounting loan (repayments)/proceeds
(514)
382
Net cash generated from financing activities
4,597
3,323
Increase/(decrease) in cash and cash equivalents
1,146
929
Cash acquired on acquisition
850
-
Cash and cash equivalents at beginning of year
2,296
1,367
Cash and cash equivalents at end of year
4,292
2,296
Notes to the Financial Statements (unaudited)
1. Basis of preparation
The consolidated financial statements consolidate the results of the Company and its subsidiaries (together referred to as the "Group").
The financial information included in this preliminary announcement does not constitute statutory accounts of the Group for the years ended 31 March 2019 or 31 March 2018. The financial information for the year ended 31 March 2018 is derived from statutory accounts upon which the auditors have reported. Their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The auditors work on the statutory accounts of the Group for the year ended 31 March 2019 is not yet complete.
Both the consolidated financial statements and the Company financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS").
2. Segmental reporting
At 31 March 2019 the Group was organised into two business segments. Central costs are reported separately.
Information reported to the Group's Chief Executive Officer for the purposes of resource allocation and assessment of performance is focused on the two principal business segments of Graphene and Plastic Products and Hard Wear and Metallic Products and, accordingly, the Group's reportable segments under IFRS 8 are based on these activities.
Segment profit/(loss) represents the profit/(loss) earned by each segment, including a share of central administration costs, which are allocated on the basis of actual use or pro rata to sales. This is the measure reported to the Chief Executive Officer for the purposes of resource allocation and assessment of segment performance.
The segment analysis for the period ended 31 March 2019 is as follows:
Central
£'000
Graphene and Plastic
Products
£'000
Hard Wear and Metallic
Products
£'000
Intra-group
adjustments
£'000
Total
£'000
Revenue
-
4,729
4,416
(5)
9,140
Gross profit
-
1,064
1,370
-
2,434
Other operating income
-
144
4
-
148
Operating expenses
(1,430)
(2,582)
(1,274)
(59)
(5,345)
(Loss) from operations
(1,430)
(1,374)
100
(59)
(2,763)
Finance income/(charge)
3
(43)
(26)
-
(66)
(Loss)/profit before tax
(1,427)
(1,417)
74
(59)
(2,829)
Total assets
16,058
5,536
4,780
(9,069)
17,305
Total liabilities
(1,107)
(6,963)
(4,068)
8,109
(4,029)
Net assets/(liabilities)
14,951
(1,427)
712
(960)
13,276
Capital expenditure
166
775
34
-
975
Depreciation/amortisation
13
245
207
32
497
The segment analysis for the period ended 31 March 2018 is as follows:
Central
£'000
Graphene and Plastic
Products
£'000
Hard Wear
And Metallic Products
£'000
Intra-group
adjustments
£'000
Total
£'000
Revenue
-
4,643
4,385
(4)
9,024
Gross profit
-
1,198
1,330
-
2,528
Other operating income
-
9
54
-
63
Operating expenses
(695)
(1,918)
(1,437)
(52)
(4,102)
(Loss) from operations
(695)
(711)
(53)
(52)
(1,511)
Finance income/(charge)
-
(21)
(29)
-
(50)
(Loss) before tax
(695)
(732)
(82)
(52)
(1,561)
Total assets
9,264
4,575
4,911
(6,296)
12,454
Total liabilities
(897)
(5,358)
(4,345)
6,125
(4,475)
Net assets/(liabilities)
8,367
(783)
566
(171)
7,979
Capital expenditure
2
373
53
-
428
Depreciation/amortisation and impairment
5
227
511
52
795
Geographical information
The Group's revenue from external customers and information about its segment assets by geographical location are detailed below:
Revenue from external customers
Non-current assets
2019
£'000
2018
£'000
2019
£'000
2018
£'000
United Kingdom
7,577
7,657
6,203
5,683
Rest of Europe
1,065
1,002
2,310
-
North America
306
2
-
-
Other
192
363
-
-
9,140
9,024
8,513
5,683
3. Exceptional items
2019
£'000
2018
£'000
Relocation and restructuring costs
59
31
Costs relating to expansion in China
271
-
Costs relating to setting up of the US subsidiary
28
-
Acquisition costs
29
-
Release of deferred consideration
-
(80)
Impairment of development costs (note 6) net of deferred grant income release
-
72
Other
33
11
420
34
4. Dividends
As stated in the Company's AIM Admission Document, the Board will not be declaring or proposing any dividends until such time as the commercialisation of its product portfolio has generated sufficient distributable reserves from which to do so.
5. Loss per ordinary share
The calculation of the basic loss per share for the period ended 31 March 2019 and 31 March 2018 is based on the losses attributable to the shareholders of Versarien Plc divided by the weighted average number of shares in issue during the year. The calculation of diluted loss per share is based on the basic loss per share adjusted to allow for the issue of shares on the assumed conversion of all dilutive options. However, in accordance with IAS 33 "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 2019 there were 14,985,100 (2018: 8,222,830) potential ordinary shares which have been disregarded in the calculation of diluted loss per share as they were considered non-dilutive at that date.
Loss
attributable to
shareholders
£'000
Weighted
average
number of
shares
£'000
Basic loss
per share
pence
Year ended 31 March 2019
(2,473)
151,129
(1.64)
Year ended 31 March 2018
(1,381)
138,208
(1.00)
6. Intangible assets
Goodwill
£'000
Other
intangibles
£'000
Total
£'000
Cost
At 1 April 2017
2,167
1,395
3,562
Additions
-
148
148
At 1 April 2018
2,167
1,543
3,710
Additions
-
434
434
Disposals
-
(21)
(21)
Acquisitions
2,264
20
2,284
At 31 March 2019
4,431
1,976
6,407
Accumulated amortisation and impairment
At 1 April 2017
-
639
639
Impairment
191
191
Amortisation charge
-
202
202
At 1 April 2018
-
1,032
1,032
Disposals
(13)
(13)
Amortisation charge
-
70
70
At 31 March 2019
-
1,089
1,089
Carrying value
At 31 March 2019
4,431
887
5,318
At 31 March 2018
2,167
511
2,678
The impairment of Other Intangibles in 2018 relates to development costs in Versarien Technologies Limited as per exceptional items, note 3.
Other intangible assets
31 March 2019
£'000
31 March 2018
£'000
Customer relationships/order books
81
113
Development costs
600
235
Licence
48
33
Intellectual property
158
130
Total
887
511
7. Property, plant and equipment
Group
Plant and
equipment
£'000
Leasehold
improvements
£'000
Total
£'000
Cost
At 1 April 2017
9,024
488
9,512
Additions
250
30
280
Disposals
(27)
-
(27)
At 1 April 2018
9,247
518
9,765
Additions
541
-
541
Acquisitions
76
-
76
Disposals
(2)
-
(2)
At 31 March 2019
9,862
518
10,380
Accumulated depreciation
At 1 April 2017
6,386
20
6,406
Charge for the year
372
30
402
Disposals
(23)
-
(23)
At 1 April 2018
6,735
50
6,785
Charge for the year
393
34
427
Disposals
(2)
-
(2)
At 31 March 2019
7,126
84
7,210
Net book value
At 31 March 2019
2,736
434
3,170
At 31 March 2018
2,512
468
2,980
Plant and equipment include the following amounts where the Group is a lessee under finance leases and hire purchase contracts:
Group
2019
£'000
Group
2018
£'000
Cost
4,453
3,889
Accumulated depreciation
(2,567)
(2,326)
Net book value
1,886
1,563
8. Called up share capital and share premium
Number
of shares
'000
Ordinary
shares
£'000
Share
premium
£'000
Total
£'000
At 1 April 2017
131,331
1,313
9,762
11,075
Issue of shares
17,334
173
2,767
2,940
At 31 March 2018
148,665
1,486
12,529
14,015
Issue of shares
4,959
50
7,247
7,297
At 31 March 2019
153,624
1,536
19,776
21,312
9. Cash used in operations
2019
£'000
2018
£'000
Loss before tax
(2,829)
(1,561)
Adjustments for:
Share-based payments
712
72
Depreciation
427
402
Amortisation
70
202
Impairment
-
191
Disposal of non-current assets
8
4
R&D tax credit repayment
117
72
Finance cost
66
50
Decrease/(increase) in trade and other receivables
424
(569)
Increase in inventories
(292)
(73)
Decrease in trade and other payables
(440)
(697)
Cash flows from operating activities
(1,737)
(1,907)
10. Report and accounts
Copies of the 2019 Annual Report and Accounts will be posted to shareholders in due course once they are finalised and approved. Further copies may be obtained by contacting the Company Secretary at the registered office. In addition, the 2019 Annual Report and Accounts will be available to download from the investor relations section on the Company's website www.versarien.com.
- Ends -
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