REG - Xeros Tech Grp plc - Full Year Results 2024 and Trading Update
20/05/2025 07:00
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RNS Number : 2999J Xeros Technology Group plc 20 May 2025
20 May 2025
Xeros Technology Group plc
("Xeros" or the "Company" or the "Group")
Full Year Results 2024 and Trading Update
Progression from development to live commercial agreements
Xeros Technology Group plc (AIM: XSG), the creator of technologies that reduce
the impact of clothing on the planet, announces its full year results for the
year ended 31 December 2024, which show clear progression from development
agreements to commercial agreements.
Highlights
· IFB domestic 9kg washing machine on track to launch in the Indian market in
2025 with purchase orders for XOrbs and significant show of intent
· Yilmak Makina on track for major launch of Garment Finishing technology with
purchase order for XOrbs amid interest from significant global garment
manufacturers, brands and retailers
· Russell Hobbs named as first partner brand for XF3 pilot production
· XF3 external device ready for mass production in Q3 with growing interest from
three global washing machine brands and four of Europe's largest retailers
· Paid for tech verification for Laundry Care with European market leading
washing machine brand making good progress
· Installation of commercial laundry machine in the Marriott Heathrow Hotel, and
in the 5 Star ITC Mementos Hotel in Jaipur with further progression expected
through 2025
· Revenue of £0.2m (2023: £0.3m) reflecting position of ongoing contracts and
timing of orders
· Adjusted EBITDA* loss reduced by 5% to £4.4m (2023: loss £4.6m) due to focus
on tight cost control
· Net cash outflow from operations reduced by 4% to £4.5m (2023: £4.7m), with
cash at 30 April 2025 £1.4m and month on month cashflow breakeven 'in sight'
during 2025
Neil Austin, CEO said:
"At the time of writing, we have four of the world's largest washing machine
manufacturers undergoing a technical verification process for our Laundry Care
technology ahead of potential Joint Development Agreements (JDAs). We are also
in discussions with three major washing machine brands for our external
filter. Any one of these JDAs could be potentially transformational for Xeros.
Not only do they bring some immediate revenue, but they are also the pathway
to the scaling of our technology and subsequent royalty payments. While timing
of JDAs can be frustrating, we continue to make progress across our
discussions."
Enquiries
Xeros Technology Group plc Tel: 0114 269 9656
Neil Austin, Chief Executive Officer
Alex Tristram, Finance Director
Cavendish Capital Markets Limited (Nominated Adviser and Broker) Tel: 020 7220 0500
Julian Blunt/Teddy Whiley, Corporate Finance
Andrew Burdis/Sunila de Silva, ECM
Rawlings Financial PR Limited
Keeley Clarke Mob: 07967 816 525
Cat Valentine Email: Xeros@rfpr.co.uk
About Xeros
Xeros Technology plc has developed patented and proven, industry-leading
technologies which reduce the environmental impact of how industries make and
care for clothes.
The traditional wet processing methods used in industrial and domestic laundry
and garment manufacturing consume billions of litres of fresh water and large
amounts of energy and chemicals, as well as damaging and weakening clothing
fibres and creating rising levels of environmental pollution. It is estimated
that washing machines contribute 35% of the 171 trillion microplastic
particles in the ocean.
A range of actors, including consumers, the media NGOs and regulators are
exerting pressure on these industries, with legislative action beginning to be
taken.
Xeros' three main technologies, Microfibre Filter, Laundry Care, and Garment
Finishing, facilitate garment manufacturers, industrial laundries, domestic
washing machine manufacturers and consumers, to reduce their environmental
impact, whilst also significantly improving efficiency in the process.
Xeros' model is to generate revenue from licensing its technologies,
generating royalties and the sale of consumables. Currently there are eight
agreements in place. The addressable markets in Microfibre Filter, Laundry
Care, and Garment Finishing are estimated to be valued at £350m p.a., £3bn
p.a. and £132m p.a. respectively.
Chairman's Statement
As I write this introduction for the review of 2024, we are almost halfway
through 2025 so I am writing to you from that perspective.
The detailed review of the year and current trading are given in the CEO and
FD reports but I would like to highlight some key points.
I am excited to report on concrete evidence that the transition to a sales-led
organisation, under the leadership of Neil Austin, is translating into very
near-term revenues.
Across all our technologies we are making solid progress. We have XOrb orders
from both IFB for its domestic 9kg washing machine and Yilmak for its denim
processing machines, which signal that both machines are in the final stage
ahead of sales launch. Our external microfibre filter has a world leading
manufacturer in place and Russell Hobbs has been named as the first brand
partner. We are also seeing increased interest for our commercial laundry care
technology, with orders for machines from our partner in France, Georges, and
the installation of a Xeros enabled commercial laundry machine at the Marriot
Hotel at Heathrow.
Beyond these we continue to gain traction with global washing machine brands
and OEMs, who are interested in our laundry care and microfibre filtration
technologies, and with denim brands whose environmental goals are supported by
our garment processing technology.
Operationally, we have codified our experience gained from Joint Development
Agreements ("JDAs") to make improvements to the process. We have implemented a
milestone, time-bound process with defined deliverables to help reduce the
time it takes from JDA to market sales, which has been a delay factor in the
past.
During 2024 we raised £6.3m before fees of additional working capital from a
warrant exercise and fundraise to support the Group through to breakeven. With
net cash at 30 April 2025 of £1.4m, ongoing prudent cost controls, and
revenue, albeit dependent on our licensees, in sight, month on month cash flow
breakeven during 2025 remains achievable.
There were no changes to the Board during 2024, however, on 1 May 2025, Dr
Paul Jourdan resigned as a Board Observer following the change of fund manager
for Amati AIM VCT plc from Amati Global investors to Maven Capital Partners UK
LLP. Amati AIM VCT plc holds 12.8% of Xeros shares, which following the change
of fund manager has been renamed Maven Renovar VCT plc. On behalf of the
Board, I would like to thank Paul for his contribution as a Board Observer.
His support and insightful counsel have been very valuable and we wish him all
the very best.
The Nominations Committee will undertake a review of the composition of the
Board during the second half of 2025 to assess its ongoing suitability as it
transitions to a fully-fledged commercial enterprise. We continue to add to
our strategic advisory board, which extends our knowledge and reach to support
the management and sales team.
I would like to once again thank you, shareholders for your ongoing support,
especially as AIM stocks continue to suffer from wider issues such as
liquidity and low valuations. I also want to extend praise to the management
team and everyone at Xeros for their hard work and dedication to expanding and
scaling our technology.
Xeros is passing an inflection point. We have six companies going through
technical verification, this is the pre-JDA process, and each of them is a
significant global player. Alongside this, interest in our technologies
continues to increase, with particular near-term excitement for our microfibre
filtration and domestic laundry platforms. The Board remains both confident
and excited about Xeros' technology and the drivers for clean-tech solutions,
as well as the potential for global adoption of Xeros' technologies.
Klaas de Boer
Chairman
CEO Statement
I am pleased to report that in the year ended 31 December 2024, Xeros made
considerable progress towards the commercialisation of its technology.
When I joined Xeros in 2022, my goal was to refocus the business towards the
commercialisation of its innovative sustainable technologies that greatly
reduce the impact of laundry on the eco-system, and to progress the agreements
it had in place. I believe that 2024 was a pivotal moment, with the Group
moving closer to revenue generation and breakeven.
During 2024 we signed a hugely significant contract with Donlim Group
("Donlim"), the World's largest small domestic appliance manufacturer, to
manufacture our XF3 External Filter under licence. This partnership has
commenced in earnest post period end. We announced in January that a Letter of
Intent had been signed with a major electronics distributor and I am delighted
to report that Russell Hobbs has been named as the first brand partner for the
pilot production of the XF3. Russell Hobbs is owned by Spectrum brands and the
XF3 will be distributed by the Product Care Group.
Our licence agreement with IFB also took a huge step forward with the 9kg
domestic washing machine achieving positive feedback from its consumer trials
ahead of launch. I am pleased to report that IFB recently placed a purchase
order for XOrbs which provides more confidence than ever that the machines
will be going into production ahead of a retail launch later this year.
The year under review also saw the Group's denim finishing partner, Yilmak
Makina / KRM ("Yilmak"), launch a machine at ITM, the leading garment
manufacturing show. Although full roll out was delayed at the final stage of
cycle development, it is on track now to dispatch its first machines to
garment manufactures and accordingly Yilmak have placed a Purchase Order for
the initial XOrb requirement. Sales leads have been very encouraging, with
strong interest from manufacturers and retailers alike.
During the year we also made changes to the structure of the team to support
the commercialisation model. This has proved a good move evidenced by the
number of companies in our technical verification process. As I write this
stands at six, four in Domestic Laundry Care, one in Commercial Laundry Care,
and one for Microfibre Filtration, covering some of the world's largest
washing machine companies.
One of the Group's key strengths is that our technology not only significantly
improves the environmental impact of washing and making clothes, it also
offers real economic benefits to industry and consumers. It is this which has
buoyed interest for our IP during 2024; our technology can support the fashion
industry by helping it make clothes more sustainable, and it can provide
washing machine manufacturers with innovation not seen for over 40 years.
Operational review
In 2024 a key part of the personnel change was completed with the appointment
of Stephen Hayes as Category & Marketing Director. A veteran of the
Appliances Industry Stephen's knowledge of how to maximise appeal to our core
target customers has been manifest throughout the year. We are confidently and
succinctly projecting our expertise to washing machine manufacturers,
distributors and retailers, to showcase how we can help them improve their
offering and reap the commercial benefits that come from it.
In 2023 we established an advisory board consisting of high-quality
individuals with a lifetime of experience in some of the world's largest
organisations to bring additional strength to our core operational team. This
has been further strengthened with the addition of Juan Pillay and Joe Szeto
to the board. Juan has held leadership positions in several leading
appliance brands and is one of the most respected names in his industry. Joe
has an incredible network in South-East Asia, with several decades of
successful new business development particularly in B2B and licensing models
in consumer electronics.
Towards the end of the year we unveiled our new tagline, "The Future of
Laundry' at IFA (Europe's largest consumer electronics fair) in September.
This clear signalling of our technologies' purpose, allied with the Group's
ambition, was extremely well received with a significant level of engagement
from some of the World's largest players in the laundry and appliances
Industry.
Business update
Microfibre Filtration (XF1 - domestic, XF2 - commercial, XF3 - external)
We made a huge stride forward in Microfibre Filtration, with a contract to
manufacture XF3 our external filtration product for the domestic market
alongside a strategic partnership with Donlim, which we announced in Q3 2024.
The first fruit of this deal will be the production and distribution of the
filter under the Russell Hobbs brand as detailed above.
The XF3 has been well received, and we are in discussions with three of the
World's global washing machine brands and four of Europe's largest retailers
to bring the product to market.
This 'outside-of-machine' microplastic filtration device can be retrofitted to
the existing domestic install base with full flexibility of placement.
Following rigorous tests, we are confident that our product leads the market
in microfibre capture, preventing 99% of microplastics from our laundry
getting into the water systems. It has no requirement for replacement
cartridges and is lifetime of machine tested.
We are also in discussions with three washing machine brands interested in
having our integrated filter, the XF1, fitted into their machines. Whilst not
expected to reach conclusion in the near term, it is further evidence that
washing machine brands are actively looking for solutions to meet planned
legislation enforcing the inclusion of microfibre capture in their products.
Our prototype commercial scale version of the filter, the XF2, has been on
trial with our friends and partners Georges laundry in France and performed
incredibly well in the laundering of uniforms for the likes of SNCF, Air
France, etc. With this real world validation, we are now in discussions with
a leading European component manufacturer for the development of a device for
the hospitality and commercial laundry sector.
Laundry Care (XC1 - domestic and XC2 - commercial)
On XC1, an important milestone was reached with IFB; in anticipation of their
mass market 9kg domestic washing machine launch, they have placed the first
XOrb orders to support the initial sales period of the machine.
Our sales pipeline for XC1 grew strongly in 2024, and in January of this year
we announced a 'paid for' technical verification process with one of the
World's largest and best-known washing machine brands. This takes the total
number to four of the World's largest washing machine brands engaged in a
pre-JDA process.
Our long-standing partner in France, Georges, a leading commercial laundry
business that specialises in the cleaning and maintenance of workwear and PPE,
has extended its services into the firefighting industry, winning contracts
with a number of regional services. On the back of this expansion, they have
ordered three more Xeros enabled commercial laundry machines to facilitate
this new demand.
In the UK we were delighted to have reached an agreement with the Marriott
Group for the installation of a Xeros enabled commercial washing machine (XC2)
at their Heathrow site. Beyond the UK, Xeros and IFB have placed a machine
in the 5 Star ITC Mementos Hotel in Jaipur. These 'proof of concept'
installations are a showcase for future deployments.
Garment Finishing (XFN1 - Denim and XFN2 - Washing)
Following a successful launch at the ITM Trade show our technical team have
developed a bespoke 'pumice replacement' XOrb cycle with Yilmak. This provides
them with a market leading alternative to the ever increasing cost and
environmental impact generated by the use of pumice stone. Several
high-profile garment manufacturers around the World have expressed interest in
having machines placed in their facilities. Complemented by the significant
retail and brand 'pull' in the technology, a full-scale launch is on track for
2025.
Accordingly, Yilmak moved out of the development phase of our engagement and
into commercial readiness. This was signalled by the placing of its first XOrb
orders.
Our other licensing partner Ramsons, a leading full range supplier of
equipment solutions to the apparel industry in South and East Asia, is
performing consistently and anticipates further installations in Sri Lanka and
Pakistan.
We are of huge interest to Denim brands and continue to engage with them, and
retailers, who are keen to take advantage of the economic and environmental
benefits of our sustainable technology. In anticipation of further denim
processing machine installations in 2025, we look forward to making further
announcements in this space.
Strategy
Our strategy to become an IP-rich, capital-light licensor of proprietary
technology solutions to multiple scale industries, all of which deploy the
same Xeros core technologies remains.
Our technology provides cost-effective and sustainability solutions for
garment manufacture and clothing care within the $2.5 trillion fashion
industry and the $55 billion domestic washing machine market. The addressable
markets in Microfibre Filter, Laundry Care, and Garment Finishing are
estimated to be valued at £350m p.a., £3bn p.a. and £132m p.a.
respectively.
To achieve market penetration, we take a three-pronged approach:
· Commercial partnerships - We have commercial partnerships in place with IFB
for domestic and commercial laundry machines, with Ramsons and Yilmak/KRM for
garment finishing equipment, with three component manufacturers and Donlim on
XFilter.
· Direct engagement - We engage and work to influence major fashion and consumer
brands to showcase the benefits of our technology and to build a market for
it. We have significant engagement with leading global OEMs across all our
technology platforms.
· Drive influence - We are a global leader in sustainable textile technologies
and we work with legislators, industry groups and NGOs to show the scale of
the environmental challenges and to demonstrate the effectiveness of our
solutions.
Our focus over the last two years has been on commercial partnerships.
ESG
In September 2023 Xeros became a certified B Corp business. This means we have
to meet rigorous standards, that make us part of a global movement of
companies dedicated to using business as a force for good. We are proud to be
included in a network of over 6,000 mission-led businesses, committed to
meeting the rising standards for social and environmental performance.
Xeros develops innovative sustainable technologies that greatly reduce the
impact of laundry on the eco-system. Our technology achieves superior
performance, is cost effective and highly efficient all whilst minimising the
environmental impact of manufacturing and cleaning our clothes.
Our products reduce water use, chemical use, energy use, and can prevent
microfibres from our laundry entering the oceans. It is estimated that 35% of
all microplastic in the oceans come from washing our clothes.
Being a B Corp is a testament to our team and we remain dedicated to making a
positive difference in our communities and beyond.
Post Period End and Outlook
On the back of our progress in 2024, and the near-term revenue opportunities
progressed in 2025, month on month cash flow breakeven remains achievable in
the current financial year, albeit dependent on the timing of licensees.
At the time of writing, we have four of the world's largest washing machine
manufacturers undergoing a technical verification process for our Laundry Care
technology ahead of potential Joint Development Agreements (JDAs). We are also
in discussions with three major washing machine brands for our external
filter. Any one of these JDAs could be potentially transformational for Xeros.
Not only do they bring some immediate revenue, but they are also the pathway
to the scaling of our technology and subsequent royalty payments. While timing
of JDAs can be frustrating, we continue to make progress across our
discussions.
The XF3 external filter, retail sales of the 9kg IFB washing machine, the
signing of one JDA, and sales of Yilmak's denim processing machines, are our
near-term revenue generators underpinning our current expectations.
As well as the commercialisation opportunities we have in hand, we continue to
gain attention from the wider market about the potential of our technology to
help save money, generate new sales interest, meet upcoming environmental
legislation and aid the fashion industry in its need for more sustainable
fashion. This interest together with the belief that our technology is 'The
Future of Laundry' and the best solution for the industry's problems, gives us
confidence in the longer-term and global potential of the Group.
Neil Austin
Chief Executive Officer
Financial review
Group revenue was generated as follows:
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
Service revenue 50 82
Licensing revenue 63 138
Sale of goods 48 77
_______ _______
Total revenue 161 297
The financial results in 2024 reflect the continuation of the Group's shift to
a pure licensing business. While, as communicated previously, there were
delays in the commencement of the Group's anticipated licencing revenue, long
standing partners continued to value the Group's technology, and the Group
remains well positioned as contracts come online.
The Group's future revenue is based upon the anticipated commercial progress
made by its commercial partners as they market and sell products incorporating
Xeros technology into their respective markets. The Group has made further
progress in the year at setting an appropriate cost based, which can support
existing and attract new licence partners, with an expectation that this cost
base can support the Group in the medium term as it moves into profitability.
Further information on these financial results is provided below.
Group revenue decreased by 45.8% to £0.2m in the year ended 31 December 2024
(2023: £0.3m). The Group's revenue is derived from three principal sources:
· Service revenue: reflecting the servicing of existing estate, based
principally in Europe.
· Licensing revenue: reflecting royalty payments from licence partners,
milestone payments during the technology transfer process and advance fees for
access to Group intellectual property.
· Sale of goods: reflecting sales of XOrbs to licence partners and other
physical goods as necessary
The Group continues to receive service revenue related to the retained estate
of commercial laundry machines in the UK and Europe. As the licensing model
grows, this service revenue is expected to become a smaller part of the
overall revenue mix.
Licensing revenue in the period was £0.06m (2023: £0.14m), a decrease of
54.3%; revenue from sale of goods was £0.05m in the period (2023: £0.08m), a
decrease of 37.7%. Service revenue in the period decreased to £0.05m (2023:
£0.08m).
The decrease in revenue and the revenue mix recorded in the year led to a
decrease in gross margin for the period to £0.14m (2023: £0.25m), a decrease
of 43.3%, resulting in a gross margin percentage of 86.3% (2023: 82.5%).
The Group decreased its adjusted EBITDA loss by 5.2% to £4.4m (2023: loss
£4.6m) as a result of ongoing cost controls.
Gross profit/loss and adjusted EBITDA are considered the key financial
performance measures of the Group as they reflect the trading activities of
the Group, which are focused on core commercialisation activities. Adjusted
EBITDA is defined as the loss on ordinary activities before interest, tax,
share-based payments and warrant expense, depreciation and amortisation.
Administrative expenses, decreased by 4.8% to £4.7m (2023: £5.0m), following
a reduction in the Group's headcount and a continued focus on cost across the
business. The Group's average headcount fell by 10% in the year to 27 (2023:
30).
The Group reported an operating loss of £4.6m (2023: loss £4.7m), a decrease
of 2.8%. The loss per share was 0.98p (2023: loss 2.82p).
Net cash outflow from operations decreased by 3.7% to £4.5m (2023: £4.7m) as
a result of the Group's overall cost reduction, as shown in a reduction in
cash used in operations to £4.7m (2023: £5.2m), and the receipt of £0.2m
R&D tax credits from HMRC relating to 2023. Cash utilisation was in line
with the Board's expectations. Cash utilisation is not expected to increase
during 2025.
The Group had existing cash resources, including cash on deposit, as at 31
December 2024 of £2.8m (2023: £1.6m) and remains debt free. The Going
Concern statement within this announcement draws attention to the Directors'
views on the Group's ongoing prospects and the key assumptions behind the
preparation of the Group's Annual Report for the year ended 31 December 2024
on a going concern basis, including their views on the material uncertainty
contained within that statement.
Alex Tristram
Finance Director
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2024
Year Year
ended ended
31 December 31 December
2024 2023
Notes £'000 £'000
Continuing operations
REVENUE 2 161 297
Cost of sales (22) (52)
GROSS PROFIT 139 245
Administrative expenses 3 (4,830) (4,982)
Adjusted EBITDA* (4,365) (4,606)
Share-based payment (expense)/credit (175) 20
Depreciation of tangible fixed assets (151) (151)
OPERATING LOSS (4,691) (4,737)
Net finance income/(expense) 23 (38)
LOSS BEFORE TAX (4,668) (4,775)
Taxation 4 183 520
LOSS FOR THE PERIOD (4,485) (4,255)
OTHER COMPREHENSIVE (EXPENSE)/INCOME:
Items that are or may be reclassified to profit or loss:
Foreign currency translation differences - foreign operations - 2,209
TOTAL COMPREHENSIVE EXPENSE FOR THE PERIOD (4,485) (2,046)
LOSS PER SHARE
Basic and diluted on loss from continuing operations 5 (1.08)p (2.82)p
Basic and diluted on total loss for the period 5 (1.08)p (2.82)p
* Adjusted EBITDA comprises loss on ordinary activities before interest, tax,
share-based payment expense, warrant expense, depreciation and amortisation.
Consolidated statement of changes in equity
For the year ended 31 December 2024
Share Share premium Deferred share capital Warrant reserve Merger reserve Foreign currency translation reserve Accumulated losses Total
capital
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2022 151 125,766 3,544 947 15,443 (2,209) (137,773) 5,869
Loss for the year - - - - - - (4,255) (4,255)
Other comprehensive expense 10 - 10
Reclassification of historical foreign exchange on the closure of overseas - - - - - 2,199 (2,199) -
subsidiaries
Loss and total comprehensive expense for the period - - - - - 2,209 (6,454) (4,245)
Transactions with owners, recorded directly in equity:
Share-based payment - - - - - - (20) (20)
Expense
Total contributions by and distributions to owners (restated) - - - - - - (20) (20)
At 31 December 2023 151 125,766 3,544 947 15,443 - (144,247) 1,604
Loss for the year - - - - - - (4,485) (4,485)
Loss and total comprehensive - - - - - - (4,485) (4,485)
expense for the year
Transactions with owners,
recorded directly in equity:
Issue of shares following placing and open offer 311 4,351 - - - - - 4,662
Exercise of share warrants 59 1,620 - - - - - 1,679
Cost of share issues - (517) - - - - - (517)
Share-based payment - - - - - - 175 175
Expense
Total contributions by and 370 5,454 - - - - 175 5,913
distributions to owners
At 31 December 2024 521 131,220 3,544 947 15,443 - (148,557) 3,118
Consolidated statement of financial position
For the year ended 31 December 2024
At
At
31 December 31 December
2024 2023
Notes £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 149 129
Right of use assets 664 772
Trade and other receivables - -
TOTAL NON-CURRENT ASSETS 813 901
Current assets
Inventories 154 159
Trade and other receivables 541 352
Bank deposits 4 4
Cash and cash equivalents 2,803 1,595
TOTAL CURRENT ASSETS 3,502 2,110
TOTAL ASSETS 4,315 3,011
LIABILITIES
Non-current liabilities
Right-of-use liabilities (558) (727)
Other payables (80) -
Deferred tax (38) (38)
TOTAL NON-CURRENT LIABILITIES (676) (765)
Current liabilities
Trade and other payables (521) (642)
TOTAL CURRENT LIABILITIES (521) (642)
TOTAL LIABILITIES (1,197) (1,407)
NET ASSETS 3,118 1,604
EQUITY
Share capital 6 521 151
Share premium 6 131,220 125,766
Deferred share capital 3,544 3,544
Warrant reserve 947 947
Merger reserve 15,443 15,443
Accumulated losses (148,557) (144,247)
TOTAL EQUITY 3,118 1,604
Consolidated statement of cash flows
For the year ended 31 December 2024
Year Year
ended ended
31 December 31 December
2024 2023
Notes £'000 £'000
Operating activities
Loss before tax (4,668) (4,775)
Adjustment for non-cash items:
Depreciation of property, plant and equipment 43 53
Amortisation of Right of Use assets 108 98
Share-based payment/(credit) 175 (20)
Finance income (59) (2)
Finance expense 36 39
Decrease in inventories 5 5
(Increase)/decrease in trade and other receivables (188) 40
Decrease in trade and other payables (88) (615)
Impairment (39) -
Cash used in operations (4,675) (5,177)
Tax receipts 183 520
Net cash outflow from operations (4,492) (4,657)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (68) (79)
Sale of property, plant and equipment 4 -
Finance income 59 1
Net cash inflow/(outflow) from investing activities (5) (78)
FINANCING ACTIVITIES
Proceeds from issue of share capital, net of costs 5,824 -
Payment of lease liabilities (83) (105)
Finance expense (36) (39)
Net cash inflow from financing activities 5,705 (144)
Increase/(decrease) in cash and cash equivalents 1,208 (4,879)
Cash and cash equivalents at start of year/period 1,595 6,469
Effect of exchange rate fluctuations on cash held - 5
CASH AND CASH EQUIVALENTS AT END OF YEAR 2,803 1,595
Notes to the consolidated financial information
For the year ended 31 December 2024
1) BASIS OF PREPARATION
The financial information has been prepared in accordance with the recognition
and measurement principles of International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and in accordance with the AIM
rules. The principal accounting policies of the Group have remained unchanged
from those set out in the Group's 2023 annual report.
The financial information has been prepared under the historical cost
convention and is presented in Sterling, rounded to the nearest thousand.
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined by section 434 of the Companies Act
2006. The financial information for the period ended 31 December 2024 was
approved by the Board on 19 May 2025 and has been extracted from the Group's
financial statements upon which the auditor's opinion is unmodified and does
not include a statement under section 498(2) or (3) of the Companies Act 2006,
but does include an emphasis of matter regarding the material uncertainty
related to going concern described below.
The statutory accounts for the period ended 31 December 2024 will be posted to
shareholders at least 21 days before the Annual General Meeting and made
available on our website www.xerostech.com (http://www.xerostech.com/) . In
due course, they will be delivered to the Registrar of Companies. The
statutory accounts for the period ended 31 December 2023 have been delivered
to the Registrar of Companies.
The preparation of financial statements in conformity with UK-adopted
International Accounting Standards requires management to make judgements,
estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income, and expenses. The estimates and
associated assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements about carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
In preparing the financial information, management are required to make
accounting assumptions and estimates. The assumptions and estimation methods
are consistent with those applied to the annual report and financial
statements for the year ended 31 December 2023. Additionally, the principal
risks and uncertainties that may have a material impact on activities and
results of the Group remain materially unchanged from those described in that
annual report.
Business combinations and basis of consolidation
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and are deconsolidated from the date control ceases.
Intercompany transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated.
Where the acquisition is treated as a business combination, the purchase
method of accounting is used to account for the acquisition of subsidiaries by
the Group.
The cost of an acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the date of
exchange. Acquisition costs are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition
date. The excess of the cost of acquisition over the fair value of the Group's
share of the identifiable net assets acquired is recorded as goodwill. If the
cost of the acquisition is less than the fair value of net assets of the
subsidiary acquired, the difference is recognised directly in the income
statement.
All intragroup balances and transactions, including unrealised profits arising
from intragroup transactions, are eliminated fully on consolidation.
Going concern
As at 31 December 2024, the Group had £2.8m of cash and cash equivalents. At
this stage of its development, the Group incurs operating cash outflows and is
reliant on existing cash resources to fund its operations. The Group has made
commercial progress in recent periods and expects to generate revenue within
2025. The Directors consider that the Group has and expects to generate
sufficient cash to meet its obligations as they fall due for at least 12
months following the date of this report. The Directors also believe that
these financial resources, alongside the Group's existing and anticipated
customer contracts, provide the Group with a platform to reach cash breakeven.
While the Group actively manages key customer stakeholders where appropriate,
the revenue anticipated to allow the Group to reach cash breakeven anticipated
to be generated by these contracts is reliant on the actions of third parties
and there remains risk that progress is not forthcoming in the timeframes
anticipated by the Directors. As a result of uncertainties over the timing of
commercialisation, the Directors consider there be a material uncertainty over
the going concern status of the Group. The Directors consider that they have a
number of options in place should there be delays in commercialisation,
including reductions in discretionary spending, that would allow the existing
cash resources to provide a longer runway. For these reasons, they continue to
adopt the going basis of accounting in preparing this financial information.
The Group is subject to a number of risks, including those as set out in the
strategic report within the Group's Annual Report. These risks include the
global macro-economic conditions, particularly in the global markets in which
the Group and its partners operate. The going concern assessment as carried
out by the Directors has taken the impact of these into account as far as
possible. While this inclusion does not change the assessment of the Directors
in respect of going concern, the Group remains reliant on the progress of
international licence partners in order for it to execute the
commercialisation strategy.
When making their going concern assessment the Directors assess available and
committed funds against all non-discretionary expenditure, and related cash
flows, as forecast for the period ended 31 December 2026. These forecasts
indicate that the Group is able to settle its liabilities as they fall due in
the forecast period. In these forecasts the Directors have considered
appropriate sensitivities, including the progress of the Group's commercial
contracts. Accordingly, whilst the Directors acknowledge the material
uncertainties mentioned above, they continue to believe that the going concern
assumption is appropriate for the Group and the financial statements have been
prepared on that basis.
2) SEGMENTAL REPORTING
The financial information by segment detailed below is frequently reviewed by
the Chief Executive Officer, who has been identified as the Chief Operating
Decision Maker ("CODM"). The Group considers that it currently has one
operating segment and reports revenue by type.
An analysis of revenues by type is set out below:
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
Sale of goods 48 77
Rendering of services 50 82
Licensing revenue 63 138
161 297
The Group's had two customers responsible for more than 10% of revenue, who
were responsible for 49% and 31% respectively.
During the year ended 31 December 2023 the Group's largest customer was
responsible for 32% of Group revenue.
An analysis of revenues by geographic location of customers is set out below:
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
Europe 139 161
North America 8 8
Rest of the World 14 128
161 297
3) LOSS FROM OPERATIONS
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
Loss from operations is stated after charging to
administrative expenses:
Foreign exchange losses 10 3
Depreciation of plant and equipment (note 151 151
10)
Short term and low value rentals 7 16
Staff costs (excluding share-based payment charge) 2,049 2,661
Research and development 591 222
Auditors remuneration:
- Audit of these financial statements 21 24
- Audit of financial statements of subsidiaries of the company 24 23
- Audit related assurance services 3 4
Total auditor's remuneration 48 51
4) TAXATION
Tax on loss on ordinary activities
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
Current tax:
UK Tax credits received in respect of prior periods (195) (521)
Foreign taxes paid 12 1
(183) (520)
Deferred tax:
Origination and reversal of temporary timing differences - -
Tax credit on loss on ordinary activities (183) (520)
The credit for the year can be reconciled to the loss before tax per the
statement of profit or loss and other comprehensive income as follows:
Factors affecting the current tax charges
The tax assessed for the year varies from the main company rate of corporation
tax as explained below:
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
The tax assessed for the period varies from the main company rate of
corporation tax as explained below:
Loss on ordinary activities before tax (4,668) (4,775)
Tax at the standard rate of corporation tax 25% (2023: 19%) (1,167) (907)
Effects of:
Expenses not deductible for tax purposes 22 (4)
Research and development tax credits receivable (195) (521)
Unutilised tax losses for which no deferred tax asset is 1,145 911
recognised
Employee share acquisition adjustment - -
Foreign taxes paid 12 1
Tax credit for the year (183) (520)
The Group accounts for Research and Development tax credits where there is
certainty regarding HMRC approval. The Group has received a tax credit in
respect of the year ended 31 December 2023. There is no certainty regarding
the claim for the year ended 31 December 2024 and as such no relevant credit
or asset is recognised.
5) LOSS PER SHARE (BASIC AND DILUTED)
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the parent by the weighted average number of ordinary shares in
issue during the year. Diluted loss per share is calculated by adjusting the
weighted average number of ordinary shares in issue during the period to
assume conversion of all dilutive potential ordinary shares.
Year Year
ended ended
31 December 31 December
2024 2023
£'000 £'000
Total loss from continuing operations (4,485) (4,255)
Total loss attributable to the equity holders of the parent (4,485) (4,255)
No. No.
Weighted average number of ordinary shares in issue during the year 414,109,299 150,982,728
Loss per share
Basic and diluted on loss from continuing operations (1.08)p (2.82)p
Basic and diluted on total loss for the year (1.08)p (2.82)p
The weighted average number of shares in issue throughout the period is as
follows.
Year Year
ended ended
31 December 31 December
2024 2023
Issued ordinary shares at 1 January 2024/1 January 2023 150,982,917 150,980,123
Effect of shares issued for cash 263,126,382 2,605
Weighted average number of shares at 31 December 414,109,299 150,982,728
The Company has issued employee options over 36,222,942 (31 December 2023:
9,557,130) ordinary shares which are potentially dilutive. There is, however,
no dilutive effect of these issued options as there is a loss for each of the
periods concerned.
6) SHARE CAPITAL AND WARRANTS
Share capital Share premium Deferred share capital Merger reserve Total
Number £'000 £'000 £'000 £'000 £'000
Total ordinary shares of 0.1p each as at 31 December 2022 150,980,123 151 125,766 3,544 15,443 144,904
Issue of ordinary shares as a result of warrants following placing and open 2,794 - - - - -
offer
Costs of share issues - - - - - -
Total ordinary shares of 0.1p each as at 31 December 2023 150,982,917 151 125,766 3,544 15,443 144,904
Issue of ordinary shares as a result of placing and open offer 310,789,561 311 4,351 - - 4,662
Issue of ordinary shares as a result of warrants 58,913,935 59 1,620 - - 1,679
Costs of share issues - - (518) - - (518)
Total ordinary shares of 0.1p each as at 31 December 2024 520,686,413 521 131,220 3,544 15,443 150,727
The Group undertook a share capital reorganisation exercise during the year
ended 31 December 2022, splitting the ordinary shares with a nominal value of
15p into ordinary shares of 0.1p and deferred shares of 14.9p. The new
deferred shares have no significant rights attached to them and carry no
right to vote or participate in distribution of surplus assets and have not
been admitted to trading on the AIM market of the London Stock Exchange plc,
nor will they in the future. Accordingly, deferred shares are excluded from
the calculation of earnings per share in note 9.
Number
Total deferred shares of 14.9p each as at 31 December 2022 23,784,483
Total deferred shares of 14.9p each as at 31 December 2023 23,784,483
Total deferred shares of 14.9p each as at 31 December 2024 23,784,483
As permitted by the provisions of the Companies Act 2006, the Company does not
have an upper limit to its authorised share capital.
The following is a summary of the changes in the issued share capital of the
Company during the period ended 31 December 2024:
a) On 18 January 2024, 1,502,405 ordinary shares of 0.1p per share were
allotted at a price of 2.85p per share, for total cash considerations of
£42,819 upon the exercise of warrants.
b) On 26 January 2024, 12,450,041 ordinary shares of 0.1p per share were
allotted at a price of 2.85p per share, for total cash considerations of
£354,826 upon the exercise of warrants.
c) On 29 January 2024, 2,732,434 ordinary shares of 0.1p per share were
allotted at a price of 2.85p per share, for total cash considerations of
£77,874 upon the exercise of warrants.
d) On 30 January 2024, 7,922,845 ordinary shares of 0.1p per share were
allotted at a price of 2.85p per share, for total cash considerations of
£225,801 upon the exercise of warrants.
e) On 31 January 2024, 10,315,622 ordinary shares of 0.1p per share were
allotted at a price of 2.85p per share, for total cash considerations of
£293,995 upon the exercise of warrants.
f) On 2 February 2024, 23,990,588 ordinary shares of 0.1p per share were
allotted at a price of 2.85p per share, for total cash considerations of
£683,732 upon the exercise of warrants.
g) On 5 April 2024, 15,098,290 ordinary shares of 0.1p per share were
allotted at a price of 1.50p per share, for total cash considerations of
£226,474 upon a placing
h) On 30 April 2024 295,691,271 ordinary shares of 0.1p per share were
allotted at a price of 1.50p per share, for total cash considerations of
£4,435,369 upon a placing and retail offer
At 31 December 2023, the Company had two classes of share, being ordinary
shares of 0.1p each and deferred shares of 14.9p each.
The Group's Share Capital reserve represents the nominal value of the ordinary
shares in issue. The Group's Share Premium Reserve represents the premium the
Group received on issue if its shares. The Group's Deferred Share Capital
reserve represents the nominal value of the deferred shares in issue. The
Merger Reserve arose on the combination of companies within the Group prior to
the flotation on AIM.
As part of the placing completed in October 2022 the Group issued warrants to
purchase ordinary shares of 0.1p for a fixed fee of 5p per share. Following
consultation with warrant holders, the outstanding warrants were repriced to
2.85p per share in December 2023. In addition, the warrant exercise lapse date
was amended to 31 January 2024. The warrant charge as calculated based on this
reprice was lower than the initial warrant charge recognised on issue and
hence no adjustment to the warrant charge has been recognised in these
financial statements.
Number of warrants Weighted average exercise price (p) Weighted average contractual life (years)
At 31 December 2022 127,195,640 5 1.5
Exercised in the period (2,794) 5 1.5
Effect of warrant reprice - (2.15) (1.4)
At 31 December 2023 127,192,846 2.85 0.1
Exercised in the period (58,913,935) 2.85 -
Expired warrants (68,278,911) 2.85 -
At 31 December 2024 - - -
7) RELATED PARTY TRANSACTIONS
During the year, the Group entered into transactions, in the ordinary course
of business, with other related parties. Those transactions with directors are
disclosed below. Transactions entered into, along with trading balances
outstanding at each period end with other related parties, are as follows:
Purchases from related party Amounts owed to related party
Purchases from related party Amounts owed to related party
31 December 31 December 31 December 31 December
2024 2024 2023 2023
Related party Relationship £000 £000 £000 £000
IP Group plc Fund manager for certain shareholders (note 1) - - (4) -
Cofra London Limited Shareholder (note 2) - - 15 15
Amati Global Investors Limited Shareholder (note 3) 13 - - -
Note: IP Group plc provided the services of David Baynes, who was a director
of the Company until 31 December 2022, and invoice the Group for related fees.
David Baynes was a Director of both the Company and of IP Group plc.
Note2: Cofra London Limited provided the services of Donald Brenninkmeijer as
a strategic advisor to the Board, and invoice the Group for related fees.
Note3: Amati Global provide a board observer to the Board and invoice the
group for related fees.
Terms and conditions of transactions with related parties
Purchases between related parties are made on an arm's length basis.
Outstanding balances are unsecured, interest free and cash settlement is
expected within 60 days of invoice.
Transactions with Key Management Personnel
The Company's key management personnel comprise only the Directors of the
Company. During the period, the Company entered into the following
transactions in which the Directors had an interest:
Directors' remuneration:
Remuneration received by the Directors from the Company is set out below.
Further detail is provided within the Directors' remuneration report:
Year Year
ended Ended
31 December 31 December
2024 2023
£000 £000
Short-term employment benefits* 446 453
*In addition, certain Directors hold share options in the Company for which a
fair value share based charge of £175,000 has been recognised in the
consolidated statement of profit or loss and other comprehensive income (year
ended 31 December 2023: (£20,000)).
The highest-paid Director in the year received a total remuneration of
£221,000 (year ended 31 December 2023: £221,000). During the year ended 31
December 2024, the Company entered into numerous transactions with its
subsidiary companies which net off on consolidation - these have not been
shown above.
Forward-looking statements
This announcement may include certain forward-looking statements, beliefs or
opinions, including statements with respect to Xeros' business, financial
condition and results of operations. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would", "could" or
"should" or, in each case, their negative or other various or comparable
terminology. These statements are made by the Xeros Directors in good faith
based on the information available to them at the date of this announcement
and reflect the Xeros Directors' beliefs and expectations. By their nature
these statements involve risk and uncertainty because they relate to events
and depend on circumstances that may or may not occur in the future. A number
of factors could cause actual results and developments to differ materially
from those expressed or implied by the forward-looking statements, including,
without limitation, developments in the global economy, changes in government
policies, spending and procurement methodologies, and failure in health,
safety or environmental policies.
No representation or warranty is made that any of these statements or
forecasts will come to pass or that any forecast results will be achieved.
Forward-looking statements speak only as at the date of this announcement and
Xeros and its advisers expressly disclaim any obligations or undertaking to
release any update of, or revisions to, any forward-looking statements in this
announcement. No statement in the announcement is intended to be, or intended
to be construed as, a profit forecast or to be interpreted to mean that
earnings per Xeros share for the current or future financial years will
necessarily match or exceed the historical earnings. As a result, you are
cautioned not to place any undue reliance on such forward-looking statements.
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