REG - Xeros Tech Grp plc - Business Update

Xeros TechnologyAnnouncement

27/01/2022 07:00

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RNS Number : 7577Z  Xeros Technology Group plc  27 January 2022

27 January 2022

 

Xeros Technology Group plc

 

Business Update

 

Xeros Technology Group plc (AIM: XSG, 'the Group', 'the Company', 'Xeros'),
the licensor of proprietary solutions improving the sustainability and
economics of garments and fabrics, today publishes a business update on the
commercialisation of its platform technologies.

 

Since the update provided at the time of the interim results in September, the
Company is pleased to report on the progress which has been made by the
Group's partners and licensees. There has been continued disruption in the
business development and sales activities of the Group's partners and
licensees in India and China as a result of intermittent travel and
operational restrictions being placed upon them in response to their local
Covid situations. In spite of this, they have continued to make positive
progress, as has the Company in its other commercialisation objectives:

 

·      Commercial discussions for XFiltra licensing have commenced
following successful tests by the Company's global scale development partners.
UK legislation progressing which mandates manufacturers fit microplastic
filtration to domestic and commercial washing machines by the beginning of
2025.

·      IFB have confirmed that they plan, subject to successful consumer
field trials, to enter the Indian domestic washing machine market with Xeros'
XTend technology at the end of Q2 this year. This follows on from the
successful completion by IFB and Xeros of machine designs and the development
of cycles which meet targets for water, chemistry and energy and fabric care
improvement.

·      Ramsons, supported remotely by the Xeros team, have completed the
development of a full suite of denim finishes for Aba Group, a leading
Bangladeshi denim manufacturer supplying some of the world's leading denim
brands, using XTend technology to address all styles required across the denim
industry. Supported by Xeros, Aba now intend to implement denim cycles to
serve one of the world's leading apparel brands.

·      SeaLion and IFB continue to sell XTend commercial washing
machines.

 

XFiltra

Draft UK legislation published on 24 January 2022 i  has specified that by 1
January 2025, all washing machines sold in the UK must have filters achieving
a minimum 90% efficacy in capturing the microplastics emitted from all wash
cycles (not just synthetics cycles only). The draft legislation also includes
a definition of a microplastic within a size range of between 1 micron and 5
millimetres. These standards being those which XFiltra meets.

Opposite the objective to become the chosen product solution for the industry,
the Company's testing programmes with Hanning and a leading global Asian OEM
are meeting the above specification with commercial discussions in progress
with one of them and shortly to start with the other. Since September, the
Company has commenced the negotiation of joint development agreements with
three additional major players.

In order to be capable of meeting the deadlines specified in the UK draft
legislation, which is consistent with that of France, domestic washing machine
manufacturers will need to have machines ready for sale in 2024 with
production planning for these commencing in late 2022. The Company expects
that OEMs wishing to take a lead in the field will look to have machines for
consumers available in 2023.

The launch, by Girbau, of the commercial version of XFiltra has been delayed
by the Omicron wave with the expectation that this will now occur later this
year.  Traction for XFiltra at this end of the market continues to increase
with another commercial laundry OEM in early-stage discussions with the
Company regarding XFiltra for a model that they plan to start selling in Q2
2023.

 

XTend

Domestic Laundry

In September, the Company announced that the impact of Covid in India had led
IFB to delay the launch of their Xeros-enabled domestic washing machine. At
the time, the Company's estimate was that this would be delayed until late Q2
of this year. This timing has since been confirmed by IFB who plan, subject to
successful consumer field trials, to enter the Indian domestic washing machine
market with Xeros' XTend technology at the end of Q2 this year.  Further
updates will be provided as appropriate.  This follows on from the successful
completion by IFB and Xeros of machine manufacture designs and the development
of cycles which meet targets for water, chemistry and energy reduction and
fabric care improvement.

 

Denim

The Company's team visited Aba Group, Ramsons' launch customer, in Bangladesh
late last year with the easing in travel restrictions.  Aba Group is a
leading Bangladeshi denim manufacturer supplying some of the world's leading
denim brands.  Prior to that visit however, the Company had been working
remotely with Aba and Ramsons (the Group's Indian license partner for XTend
enabled denim finishing machines) over the last 4 months to develop denim
cycles to meet the entire breadth of a global retailers' denim styles. This
has required the specification of a new XOrb which has now been successfully
used by Aba on a number of trials for this leading brand with the remainder
expected to be completed by the end of February 2022. The Company believes
this progress to be very positive and will make further announcements as
required.

Discussions have recently commenced to license Xeros' technology in Turkey
which is another major production hub for denim. Xeros' plans are supported by
the above results and the benefits case which continues to be validated both
from an environmental and a financial perspective as well as the successful
tests recently completed with three major denim brands.

 

Commercial Laundry

China continues to experience city-wide, short-notice lockdowns with these
impairing SeaLion's supply chain and their ability to sell their products
including the XTend commercial laundry machines. Whilst this is a significant
hindrance to growth which could continue, since their launch, SeaLion's XTend
models are being well received including in the high-performance workwear
market.

India's approach to managing the pandemic is different to that of China and
the Company believes that IFB's growth in 2022 will be less impaired with
their first installations also meeting expectations. Whilst previously
delayed, their nationwide launch has now been completed and publicised.  ii 
 iii 

 

Financials

As at 31 December 2021 Xeros had cash of £7.8m, in line with previous
guidance. This cash position was achieved despite a shortfall in revenue for
the year, due to the delays in commercialisation referenced above, with
preliminary unaudited results showing revenue of £0.5m for the year ending 31
December 2021. 2021 financial results will be published at a later date and,
as usual, this date will be communicated in advance.

 

 

Mark Nichols, Chief Executive of Xeros, said:

 

 

"The pandemic continues to disrupt and impact people's health and livelihoods
across the world. Despite the ongoing challenge, and in alliance with our
partners, we continue to commercialize our technologies. The positive
ramifications these can deliver to lessen the impact of clothing production
and subsequent wear on water consumption and pollution delivers against the
growing focus within the apparel industry on how to reduce its footprint.

 

The evidence, created in 2021, demonstrates that our technology does what it
says it does and that we have the capacity to expand its deployment rapidly
through our licensing model. Over the last four months engagements with
prospective partners increased significantly and our expectation is that we
will see additional agreements signed during 2022, with some anticipated in
the near term."

 

 

Enquiries:

 

 Xeros Technology Group plc                       Tel: 0114 321 6328

 Mark Nichols, Chief Executive Officer

 Paul Denney, Chief Financial Officer

 finnCap Limited (Nominated Adviser and Broker)   Tel: 020 7220 0570

 Julian Blunt/Teddy Whiley, Corporate Finance

 Andrew Burdis/Sunila de Silva, ECM

Notes to Editors

 

With close to 40 patent families, Xeros' revolutionary platform technologies,
XTend™ and XFiltra™ set new standards for performance and sustainability
across our clothing's lifecycle. By reducing the consumption of valuable
natural resources and preventing microfibre and microplastic pollution,
Xeros greatly reduces the impact of our clothes on the planet.

Backed by science, we set new standards for significantly reduced water
consumption, lower carbon and effluent emissions, and improved garment
care/life at the manufacturing stage and throughout laundry processes, in
industry, and in the home. Xeros' technologies deliver a unique combination
of unbeatable sustainability outcomes, improving performance whilst reducing
costs.

The manufacture of clothes and their subsequent care consumes vast amounts of
our finite, valuable resources. Xeros licenses new technologies to enable us
all to consume less, helping to protect the world for our future.

For more information, please visit - http://www.xerostech.com/
(http://www.xerostech.com/)

 

 i  https://bills.parliament.uk/bills/3077
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbills.parliament.uk%2Fbills%2F3077&data=04%7C01%7Cpaul.denney%40xerostech.com%7Caa0d81dcb5dc4906e48f08d9df3f381e%7C00b642fa5db145b9bac05cc2c96d88e4%7C0%7C0%7C637786286002087630%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=m%2F%2FUH6n1yiTu643MFekjsJshPMwXbo4r89mtNU6DSWw%3D&reserved=0)

 

 ii  https://www.financialexpress.com/industry/ifb-home-appliances-partners-with-xeros-tech-launches-new-washing-machines-for-institutional-buyers/2415669/
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.financialexpress.com%2Findustry%2Fifb-home-appliances-partners-with-xeros-tech-launches-new-washing-machines-for-institutional-buyers%2F2415669%2F&data=04%7C01%7Cpaul.denney%40xerostech.com%7Cd8091282c6774c28d5c808d9e00329b3%7C00b642fa5db145b9bac05cc2c96d88e4%7C0%7C0%7C637787126557289801%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=gwG9tjngbaCJboKLW5NJgFzTJqj0gy7EkqWGZF7REX8%3D&reserved=0)

 

 iii  Link to IFB promotional video for XTend commercial laundry machine here
(https://www.xerostech.com/ifbvideo)

 

For the avoidance of doubt, the contents of the websites referred to above are
not incorporated into and do not form part of this announcement.

 

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