REG - Xeros Tech Grp plc - Interim Results 2024
30/09/2024 07:00
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RNS Number : 1229G Xeros Technology Group plc 30 September 2024
30 September 2024
XEROS TECHNOLOGY GROUP PLC
("Xeros" or the "Company" or the "Group")
AIM: XSG
INTERIM RESULTS 2024
Commercial momentum building
Xeros, the creator of technologies that reduce the impact of clothing on the
planet, announces its unaudited interim results for the six months ended 30
June 2024.
Commercial highlights
Care
· Working with three new global domestic, and one new commercial, laundry tier 1
OEMs to demonstrate the benefits of Xeros technology on their platforms
· Positive feedback on Xeros enabled 9kg domestic washing machine from IFB
Industries Limited's ("IFB") consumer trials; full market launch now expected
to take place in 2025 as announced earlier in September
Finish
· A range of Xeros-enabled denim finishing machines was launched successfully by
KRM Tekstil/Yilmak Makina ("Yilmak") at ITM 2024, a leading garment finishing
show
· Yilmak now working through sales leads with expectation of machines being in
full production and revenue generating in 2024
· In parallel, Xeros working with market-leading fashion brands to demonstrate
the specific benefits of its technology on their garments and finishes to
support Yilmak's market launch
Filtration
· Signed significant new licensing agreement and strategic partnership with
world-leading manufacturer, Donlim Group ("Donlim"), owner of the Morphy
Richards brand and ideally placed to support the commercialisation of the
Group's external, micro-fibre filtration solution for washing machines
· Showcase of Xeros technology and Donlim partnership at IFA Berlin, Europe's
largest consumer electronics show, in September 2024
· · Micro-fibre filtration industry still awaits clarification from the
French Government on standards and efficacies for its 2025 legislation and we
still expect that legislation will be implemented in major global markets in
the coming years
Key financials
· Revenue of £79k (H1 23: £113k)
· Lower administrative expenses at £2.6m (H1 23: £2.8m)
· Net cash outflow from operations of £2.6m (H1 23: £2.9m) with cash at 31
August 2024 of £4.0m
Outlook
· Revenues from Yilmak, the Group's denim finishing partner, expected to come
online in H2 FY24
· Viability of the successful commercialisation of Xeros technologies is as
strong as ever, as demonstrated by the increasing quality of the Group's
existing licensing agreements and quality of interest from a number of major
global laundry OEMs
· The Group's current financing sufficient to support the business through to
month-on-month cashflow breakeven, which is expected during FY25
· Xeros remains well placed to execute on the partnerships in hand and to win
significant new commercial contracts with current people and cost base
Neil Austin, CEO said:
"The drivers for clean-tech solutions are gaining momentum and we are on track
with the globalisation of our technologies. Our recent agreement with Donlim,
world-renowned for delivering domestic appliances on a global scale, clearly
demonstrates the potential for our technology and the quality of partner the
business is now able to attract. In addition to the commercialisation of our
technologies through existing licensees, we are in active discussion with some
of the world's best known brand manufacturers in laundry care. This is an
exciting time for Xeros, and we remain committed to delivering value to all
stakeholders."
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 Tel: 07715 769078
Cat Valentine cat@rfpr.co.uk (mailto:cat@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, Filtration, Finish, and Care, 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 Filtration, Finish and Care
are estimated to be valued at £350m p.a., £132m p.a. and £3bn p.a.
respectively.
CEO STATEMENT
I am pleased to report on the progress the Group has made in the six months to
30 June 2024 and to provide an update on the Group's commercial partners and
opportunities.
The societal and commercial pressure, being faced by companies across the
globe, to deliver effective environmental solutions is a reality. Consumer
awareness about the impact of their choices continues to grow, with the
negative impact of microplastics on the world becoming more apparent every
day. Xeros has the technologies to provide impactful solutions to some of the
biggest companies in the world and we continue to work to do so.
Earlier this month, Xeros signed a new licensing agreement with Donlim to
manufacture the Xeros' XF3 technology under license. Donlim, which is one of
the world's leading domestic appliance manufacturers and owner of the Morphy
Richards brand, is ideally placed to support the commercialisation of the
Group's external filtration device, XF3.
While the recently announced delay to the launch timetable of our Indian
partner, IFB Industries Limited ("IFB"), not related to the Xeros technology,
was disappointing, the opportunities we have, to commercialise our
technologies at scale through multiple global partners, are significant. This
is demonstrated by the interest of a number of major global players in the
laundry and garment processing industries, as well as by our existing partner
agreements. Their engagement gives me comfort that the technology benefits of
our technologies are clear.
The Group has clear commercial objectives, in both the short and medium-term,
and remains well placed to execute on the partnerships in hand and to win new,
significant commercial contracts.
Summary of the results
The Group continued to focus on cost control during the Period, further
reducing its administrative costs and taking measures which it expects to
positively impact administrative expenses in future years. 2024 SG&A is
expected to be around 60% of the 2022 level, when I joined the Group. Revenue
remained static against the prior half year, with revenues from Yilmak, the
Group's denim finishing partner, expected to come online in H2 FY24.
The Group's ongoing cash requirement was impacted by the delays in revenue
from IFB. However, we continue to expect revenues from a number of partners in
the coming months, which will support our cash position. We continue to
monitor our cash requirement closely and believe that our existing resources
will enable us to reach break-even.
Business update
Care
Xeros' Laundry Care System uses reusable polymer spheres, known as XOrbs, to
wash and care for textiles, and is scalable from domestic wash to heavy
industrial and commercial use. Using the Xeros Laundry Care System drastically
reduces the amount of water, energy and chemistry required by the laundry
process, as well as increasing the life of the garments washed by up to 100%.
Xeros reported, earlier in 2024, that the technology transfer process with its
Indian licensee, IFB, was complete and that IFB was undergoing field trials
ahead of a 2024 mass market launch. The trials generated positive consumer
feedback, but IFB has initiated a further change to the specification of the
9kg machine, unrelated to Xeros technology, which has pushed back its expected
mass market launch into 2025. This situation has been compounded by the recent
announcement of a change in leadership in the Home Appliances Division of IFB.
While the delay to mass market launch is clearly disappointing, the progress
made by IFB, combined with the feedback received as part of this process,
provide compelling evidence of Xeros' technology in a domestic laundry
setting.
Xeros is in the process of demonstrating the benefits of its Care technology
to a number of global, tier 1 potential partners on both domestic and
commercial platforms and expects to be able to communicate the outcome of
these discussions in the coming months.
Filtration
The awareness from consumers and from brands of the impact of microfibres,
including microplastics, continues to rise, in the face of near-constant
environmental studies.
Domestic laundry is the second largest contributor, with up to 700,000 fibres
released in every wash. The Group's microfibre pollution filter can be fitted
as an accessory to washing machines at home (XF3) or integrated during
manufacture (XF1), removing 99% of microfibres from laundry wastewater for
safe disposal.
The Group's licensing and strategic partnership with the Donlim, signed after
the Period end, provides Xeros with a strong and heavyweight route to market
for the external device, the XF3. It also added a further licensee for the
internal XF1, increasing the Group's geographic supply coverage for potential
global laundry partners. Donlim is a world leader in the manufacture of
electrical appliances, with three manufacturing sites and over $2bn of
revenue, and ideally placed to support Xeros developing a new market for
microfibre filtration solutions.
The Group showcased its external filtration technology together with Donlim,
at IFA Berlin, Europe's largest consumer electronics fair, in September 2024.
The industry consensus at IFA was that the market for washing machine
filtration is coming in the short term, even without legislation, but that it
remains in development.
The awareness of the widening impacts of microplastics extends beyond
consumers and the media into global organisations and governments. The
filtration industry is still awaiting clarification from the French Government
as to the standards and efficacies required by its 2025-dated legislation.
Frustratingly, this has delayed previously expected demand for filtration
products, but the issue remains on the agenda across the globe, with progress
being made at both an EU and State level in the US, including California.
Finish
The finishing process undergone by denim garments is a process which uses
large amounts of water and chemistry and produces huge volumes of effluent,
often contaminated with chemicals. Xeros' Garment Finishing System allows
manufacturers to achieve equivalent finishes on their garments, while reducing
the energy, chemistry, and water needs of the process by up to 50%.
Yilmak launched a Xeros enabled range of denim finishing machines at ITM, a
leading garment finishing trade show, in July 2024. It is working through
the initial sales leads, with the expectation of machines being in full
production within the current calendar year. The company is a tier 1 OEM
within the global garment finishing market and represents a meaningful revenue
opportunity for the Group. Revenue generation for Xeros from this licensing
agreement remains on track to commence in the current financial year.
Strategy
The industries in which the Xeros technologies could have impact include the
$2.5 trillion fashion industry and the $55 billion domestic laundry market,
which are some of the largest markets in the world. Xeros considers that its
addressable markets within these industries total £350 million, £392
million, and £2.3 billion for Filtration, Finish, and Care respectively.
The Group's strength lies in its IP portfolio and the deep technology
transfer-knowhow with the business. The Group's strategy remains to license
this portfolio of proprietary solutions to multiple scale industries, all of
which are relevant for the Group's core technologies. It is through the
commercialization of the Group's technology, through those best placed to do
so, that the Group will generate revenue and return. The Group has partners
around the globe with the market position and the knowhow to maximise the
impact of its technology and is in active commercial processes with others
with the potential to do the same.
A number of these partners have successfully deployed Xeros-enabled products
into demanding markets and have shown the benefits in a real-world
environment. The Group's strategy over the coming months is to develop its
partnerships further to allow the Xeros technologies to be adopted on the
widest possible scale.
Drivers for growth
The industries in which the Xeros technologies are relevant have traditionally
been slow moving and slow to innovate. The conflict of this inertia with the
drive from consumers, industry bodies, and governments for environmental
progress means that the opportunities for our technologies remain significant.
The underlying demand for our products was highlighted at Europe's largest
consumer electronics show, IFA, in Berlin, at which Xeros exhibited. The
resounding message from laundry manufacturers and OEMS at the event was to
use less and prolonging the life of garments. However, the technical
innovations to support a step change was lacking. Against this background, we
[are approaching and engaging / can approach and engage] with some of the
largest companies in the world - with genuine innovation that the industry is
ready for.
The same is true of the fashion industry, which continues to come under the
microscope for the impact that its production has on the world. Fashion
retailers, and the garment producers that serve them, are grappling with the
need to keep costs down in an increasingly competitive market, whilst reducing
their carbon footprint and the waste they create. Some forward-thinking
producers are taking the lead and will be at the forefront of the coming
change to the industry, with a focus on sustainability, quality, and supply
chain transparency. We are working with a number of fashion brands to
demonstrate the impact of our garment finishing technology and are confident
that proving out the benefits to them, both from a cost and sustainability
point of view, is key in establishing the early market for Xeros enable
garment finishing machines.
The market for microplastic filtration continues to develop, albeit at a
slower pace than we previously expected, for the reasons mentioned above. It
is, however, clear from our interactions with the industry that legislation
will eventually compel filtration in washing machines, but this will take
time. We believe that consumers will take the first steps in tackling the
menace of microplastics, installing external filters to their machines. This
view is supported by the consumer insight studies that we have conducted and
the discussions we have held with other stakeholders.
Sales pipeline
We remain focused on mass-market adoption of Xeros' key technologies, and the
licences we have in hand. The high-quality, active discussions and processes
we are currently having, with global, tier 1 potential partners, provide
confidence that we are moving in the right direction.
The Company is currently working through a number of significant opportunities
on both its Care and Filtration technologies. We are in active processes with
three tier 1 OEMs in relation to our domestic care technology and with a
further tier 1 OEM in relation to commercial care technology. The Group's
recent licensing agreement with Donlim provides a short-term route to market
for the XF3 filter, as well as having the potential for longer-term strategic
alignment.
The full market launch of our denim finishing technology by Yilmak, alongside
the existing market development done by Ramsons, provides a meaningful revenue
opportunity, as well as allowing us to make connections with global fashion
brands who see the positive consumer perception impact of our technology and
the manufacturers who can ensure the supply of sustainable garments into the
market. IFB remain committed to the mass market launch of a Xeros enabled
domestic machine and we expect this to take place in 2025.
Outlook
We remain encouraged by the significant pipeline of opportunities in play for
Xeros, and by the breadth of interest in all the Group's core technologies.
The outcome of our current round of commercial discussions and processes will
be crucial for the future of the Group, and we look forward to providing
further updates in due course.
Neil Austin
CEO
FINANCIAL REVIEW
Group revenue was generated as follows:
Unaudited Unaudited 12 months ended
6 months to 6 months to
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Licensing income 23 11 82
Service income 43 44 138
Sale of goods 10 57 77
Other revenue 3 1 -
Total revenue 79 113 297
The Group financial results for the six months ended 30 June 2024 reflect
further consolidation of the Group's cost base, as we work towards a step
change in revenue driven by the mass-market launches of Xeros technologies.
The Group recorded a 6.6% decrease in operating loss to £2.5m (H1 2023:
£2.7m.)
Licensing income represents royalties from licence partners for the sale of
XDrum machines and revenue to Xeros for the sale of XOrbs, which has remained
broadly static against the H1 2023. Service income and machine sales
represents payments from existing Xeros customers in the UK and Europe. The
Group expects that future revenues will be comprised mostly of licensing
revenue and revenue from the sale of goods, as it supplies XOrbs to customers.
Gross profit for the six months ended 30 June 2024 remained static at £0.1m
(2023: £0.1m).
Administrative expenses decreased by 7.1% to £2.6m (H1 2023: £2.8m), driven
by further close management of the Group's cost base. Headcount fell in
comparison with the previous year, with 24 employees as of 31 August 2024
(2023: 32). As a consequence, the Group's adjusted EBIDTA fell by 8.2% to
£2.4m (H1 2023: £2.6m).
Adjusted EBITDA is considered one of the key financial performance measures of
the Group as it reflects the true nature of our continuing trading activities.
Adjusted EBITDA is defined as the loss on ordinary activities before interest,
tax, share-based payment expense, non-operating exceptional costs,
depreciation and amortisation.
The Group decreased its operating loss to £2.5m (H1 2023: £2.7m), a decrease
of 6.6%. The loss per share was 1.69p (2023: loss 1.81p).
Net cash outflow from operations decreased 8.5% to £2.6m (H1 2023: £2.9m),
reflecting the timing of some of the Group's significant invoices. The Group
had existing cash resources (including cash on deposit) as at 30 June 2024 of
£4.7m (2023: £3.5m) and remains debt free. Group cash as at 31 August 2023
was £4.0m.
Overall cash utilisation remains in line with the Board's expectations at
below £0.5m per month. The directors expect cash utilisation to be lower in
the second half of 2024 and 2025, and that these lower levels will continue as
the Group moves into full commercialisation with licence partners. The Board
considers the Group's current cash reserves to be sufficient to support the
Group through to month-on-month cashflow breakeven, expected in 2025.
Alex Tristram
Director of Finance
Consolidated statement of profit or loss and other comprehensive income
For the six months ended 30 June 2024
Unaudited Unaudited
Six months Six months 12 months
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Note £'000 £'000 £'000
Revenue 79 113 297
Cost of sales (14) (28) (52)
_______ _______ _______
Gross profit 65 85 245
Administrative expenses (2,593) (2,791) (4,982)
Adjusted EBITDA* (2,425) (2,642) (4,606)
Share based payment expense (23) 9 20
Depreciation of tangible fixed assets (80) (73) (151)
Operating loss (2,528) (2,706) (4,737)
Finance income - - 1
Finance expense (18) (19) (39)
_______ _______ _______
Loss before taxation (2,546) (2,725) (4,775)
Taxation 3 - (1) 520
_______ _______ _______
Loss after tax (2,546) (2,726) (4,255)
_______ _______ _______
Other comprehensive loss
Items that are or maybe reclassified to profit or loss:
Foreign currency translation differences - foreign operations - 9 2,209
___ ____ __ _____ _______
Total comprehensive expense for the period (2,546) (2,717) (2,046)
___ ____ ____ _ __ _______
Loss per ordinary share
Basic and diluted on loss from continuing operations 6 (1.69)p (1.81)p (2.82)p
_______ _______ _______
*Adjusted EBITDA comprises loss on ordinary activities before interest, tax,
share-based payment expense, depreciation and amortisation.
Consolidated statement of changes in equity
For the six months ended 30 June 2024
Share Share Deferred Merger reserve Warrant reserve Foreign Retained Total
capital premium share currency earnings
capital translation deficit
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 (restated) 151 125,766 3,544 15,443 947 (2,209) (137,773) 5,869
Loss for the year - - - - - - (4,255) (4,255)
Other comprehensive expense - - - - - 10 - 10
Other comprehensive expense: Reclassification of historical foreign exchange - - - - - 2,199 (2,199) -
on the closure of overseas 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 expense - - - - - - (20) (20)
Total contributions by and distributions to owners - - - - - - (20) (20)
At 31 December 2023 151 125,766 3,544 15,443 947 - (144,247) 1,604
At 1 January 2023 (restated) 151 125,766 3,544 15,443 947 (2,209) (137,773) 5,869
Loss for the period - - - - - - (2,726) (2,726)
Other comprehensive expense - - - - - 9 - 9
Loss and total comprehensive expense for the period - - - - 9 (2,726) (2,717)
Transactions with Owners recorded directly in equity: -
Share based payment expense - - - - - - (9) (9)
Total contributions by and distributions to owners - - - - - - (9) (9)
At 30 June 2023 151 125,766 3,544 15,443 947 (2,200) (140,508) 3,143
Balance at 1 January 2024 151 125,766 3,544 15,443 947 - (144,247) 1,604
Loss for the period - - - - - - (2,545) (2,545)
Other comprehensive expense - - - - - (1) - (1)
Loss and total comprehensive income for the period - - - - - (1) (2,545) (2,546)
Transactions with Owners recorded directly in equity:
Issue of shares following placing and open offer 370 5,970 - - - - - 6,340
Cost of share issues - (517) - - - - - (517)
Share based payment expense - - - - - - 23 23
Total contributions by and distributions to owners 370 5,453 - - - - 23 5,846
At 30 June 2024 521 131,219 3,544 15,443 947 (1) (146,769) 4,904
Consolidated statement of financial position
As at 30 June 2024
Unaudited Unaudited
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 107 108 129
Right of use assets 718 826 772
Trade and other receivables - - -
825 934 901
Current assets
Inventories 160 162 159
Trade and other receivables 650 262 352
Cash on deposit 4 4 4
Cash and cash equivalents 4,711 3,494 1,595
5,525 3,922 2,110
Total assets 6,350 4,856 3,011
Liabilities
Non-current liabilities
Right of use liabilities (683) (689) (727)
Deferred tax (38) (38) (38)
(721) (727) (765)
Current liabilities
Trade and other payables (725) (986) (642)
(725) (986) (642)
Total liabilities (1,446) (1,713) (1,407)
Net assets 4,904 3,143 1,604
Equity
Share capital 521 151 151
Share premium 131,219 127,660 125,766
Deferred share capital 3,544 3,544 3,544
Merger reserve 15,443 15,443 15,443
Foreign currency translation reserve (1) (2,200) -
Accumulated losses (146,769) (140,508) (144,247)
Warrant reserve 947 (947) 947
Total equity 4,904 3,143 1,604
Consolidated statement of cash flows
For the six months ended 30 June 2024
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Operating activities
Loss before tax (2,546) (2,725) (4,775)
Adjustment for non-cash items:
Depreciation of property, plant and equipment 80 73 151
Share based (credit)/expense 23 (9) (20)
(Increase)/decrease in inventories (1) 2 5
(Increase)/decrease in trade and other receivables (298) 130 40
Increase/(decrease) in trade and other payables 80 (379) (615)
Finance income - - (2)
Finance expense 19 19 39
Cash used in operations (2,643) (2,889) (5,177)
Tax (payments)/receipts - (1) 520
Net cash outflow used in operations (2,643) (2,890) (4,657)
Investing activities
Finance income - - 1
Finance expense (19) (19) (39)
Cash withdrawn from/(placed on) deposit - - -
Purchases of property, plant and equipment (4) (38) (79)
Net cash inflow/(outflow) from investing activities (23) (57) (117)
Financing activities
Proceeds from issue of share capital, net of costs 5,824 - -
Payment of lease liabilities (41) (31) (105)
Net cash (outflow)/inflow from financing activities 5,783 (31) (105)
Increase/(decrease) in cash and cash equivalents 3,117 (2,978) (4,879)
Cash and cash equivalents at start of year 1,595 6,465 6,469
Effect of exchange rate fluctuations on cash held (1) 7 5
Cash and cash equivalents at end of the period 4,711 3,494 1,595
Notes to the interim financial information
for the six months ended 30 June 2024
1. General information
The principal activity of Xeros Technology Group plc ("the Company") and its
subsidiary companies (together "Xeros" or the "Group") is the development and
licensing of platform technologies which transform the sustainability and
economics of clothing and fabrics during their manufacture and over their
lifetime of use.
Xeros Technology Group plc is domiciled in the UK and incorporated in England
and Wales (registered number 8684474), and its registered office address is
Unit 2 Evolution, Advanced Manufacturing Park, Whittle Way, Catcliffe,
Rotherham, S60 5BL. The Company's principal activity is that of a holding
company.
The interim financial information was approved for issue on 30 September 2024.
2. Basis of preparation
The interim financial information has been prepared under the historical cost
convention and in accordance with the recognition and measurement principles
of UK-adopted International Accounting Standards ("IFRSs").
The interim financial information has been prepared on a going concern basis
and is presented in Sterling to the nearest £'000.
The accounting policies used in the interim financial information are
consistent with those used in the prior year.
The following adopted IFRSs have been issued but have not been applied by the
Group in this financial information. Their adoption is not expected to have a
material effect on the financial information unless otherwise indicated:
· Amendments to IAS 21, The Effects of Changes in Foreign Exchange Rates,
effective 1 January 2025
· Amendments to IAS 7, Statements of Cashflows and IFRS 7, Financial
Instruments, Disclosures, effective 1 January 2024
· Amendments to IAS 1, Presentation of Financial Statements, effective 1 January
2024
· Amendments to IFRS 16, Leases, effective 1 January 2024
Further IFRS standards or interpretations may be issued that could apply to
the Group's financial statements for the year ending 31 December 2024. If any
such amendments, new standards or interpretations are issued then these may
require the financial information provided in this report to be changed. The
Group will continue to review its accounting policies in light of emerging
industry consensus on the practical application of IFRS.
The preparation of financial information in conformity with the recognition
and measurement requirements of IFRS requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual events
ultimately may differ from those estimates.
The interim financial information does not include all financial risk
management information and disclosures required in annual financial
statements. There have been no significant changes in any risk or risk
management policies since 31 December 2023. The principal risks and
uncertainties are materially unchanged and are as disclosed in the Annual
Report for the year ended 31 December 2023.
The interim financial information for the six months ended 30 June 2024 and
for the six months ended 30 June 2023 does not constitute statutory financial
statements as defined in Section 434 of the Companies Act 2006 and is neither
reviewed nor audited. The comparative figures for the year ended 31 December
2023 are not the Group's consolidated statutory accounts for that financial
year. Those accounts have been reported on by the Group's auditor and
delivered to the Registrar of Companies. The report of the auditor was (i)
unmodified, (ii) did not contain a statement under Sections 498(2) or 498(3)
of the Companies Act 2006. The report did contain an emphasis of matter
paragraph in relation to a material uncertainty in respect of the going
concern status of the Group as at 31 December 2023. The circumstances that
gave rise to this emphasis of matter paragraph are unchanged as at the date of
this report.
The half year condensed consolidated financial statements do not include all
of the information and disclosures required for full annual financial
statements and should be read in conjunction with the group's annual financial
statements as at 31 December 2023, which have been prepared in accordance with
UK adopted International Accounting Standards (IFRS).
IAS 34 'Interim financial reporting' is not applicable to these half-year
condensed consolidated financial statements and has therefore not been
applied.
3. Taxation
Unaudited Unaudited
6 months to 6 months to Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Current tax:
UK tax credits received in respect of prior periods - - (521)
Foreign taxes paid - 1 1
Total tax charge/(credit) - 1 (520)
The Group accounts for Research and Development tax credits where there is
certainty regarding HMRC approval. There is no certainty regarding the claim
for the year ended 31 December 2023 and as such no relevant credit or asset is
recognised.
4. Trade and other receivables
Unaudited Unaudited
30 June 30 June 31 December
2024 2023 2023
£'00 £'000 £'000
Due within 12 months:
Trade receivables 13 4 10
Other receivables 261 40 11
Prepayments and accrued income 376 218 331
650 262 352
Due after more than 12 months
Other receivables - - -
There is no material difference between the lease receivable amounts as in
other receivables noted above and the minimum lease payments or gross
investments in the lease as defined by IFRS 16.
The minimum lease payment is receivables as follows:
Unaudited Unaudited
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Not later than one year 2 17 7
Later than one year not later than five years - - -
2 17 7
Contractual payment terms with the Group's customers are typically 30 to 60
days. The Directors believe that the carrying value of trade and other
receivables represents their fair value. In determining the recoverability of
trade receivables the Directors consider and change in the credit quality of
the receivable from the date credit was granted up to the reporting date.
5. Trade and other payables
Unaudited Unaudited
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Trade payables 383 211 206
Taxes and social security 62 115 76
Other creditors 29 26 44
Accruals and deferred income 246 554 233
Right of use liabilities 688 769 83
1,408 1,675 642
Current 725 986 642
Non-current 683 689 727
1,408 1,675 1,369
6. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity
holders by the weighted average number of shares in issue during the period.
The Group was loss-making for the 6-month periods ended 30 June 2024 and 30
June 2023 and also for the year ended 31 December 2023. Therefore, the
dilutive effect of share options has not been taken account of in the
calculation of diluted earnings per share, since this would decrease the loss
per share reported for each of the periods reported.
The calculation of basic and diluted loss per ordinary share is based on the
loss for the period, as set out below. Calculations of loss per share are
calculated to two decimal places.
Unaudited Unaudited
6 months to 6 months to Year ended
30 June 30 June 31 December
2024 2023 2023
£'00 £'000 £'000
Total loss attributable to the equity holders of the parent (2,546) (2,726) (4,255)
Unaudited Unaudited
6 months to 6 months to Year ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Issued ordinary shares at the start of the period 150,982,917 150,982,535 150,980,123
Effect of shares issued for cash 160,853,651 2,412 2,605
Weighted average number of shares at the end of the period 311,836,568 150,984,947 150,982,728
Unaudited Unaudited
6 months to 6 months to Year ended
30 June 30 June 31 December
2024 2023 2023
Basic and diluted on loss for the period (0.82)p (1.81)p (2.82)p
7. Leases
The Group has leases for office buildings and associated warehousing and
operational space. With the exception of short-term leases and leases of
low-value underlying assets, each lease is reflected on the statement of
financial position as a right-of-use asset and a lease liability. The Group
classifies its right-of-use-assets in a manner consistent with its property,
plant and equipment.
Each lease generally imposes and restriction that, unless there is a
contractual right for the Group to sublet the asset to another party, the
right-of-use-asset can only be used by the Group. Leases are either
non-cancellable or may only be cancelled by incurring a substantive
termination fee. The Group is prohibited from selling of pledging the
underlying leased assets as security. For leases over office buildings and
warehousing and operations space, the Group must keep those properties in a
good state of repair and return the properties in their original condition at
the end of the lease. Further, the Group must insure items of property, plant
and equipment and incur maintenance fees on such items in accordance with the
lease contracts.
The table below describes the nature of the Group's leasing activities by type
of right-of-use asset recognised on the statement of financial position:
No. of right-of-use assets leased Remaining range Average remaining No. of leases with termination options
of term lease term
Land and buildings 2 46 - 93 70 months 2
Right-of-use assets
Additional information on the right-of-use assets by class is as follows:
Land and buildings
£'000
Balance as at 31 December 2022 718
Additions in the period 154
Depreciation charged in the period (64)
Balance as at 30 June 2023 808
Depreciation charged in the period (34)
Balance as at 31 December 2023 772
Depreciation charged in the period (54)
Balance as at 30 June 2024 718
Lease liabilities
Lease liabilities are presented in the statement of financial position as
follows:
Unaudited Unaudited
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Current 86 80 83
Non-current 602 689 647
688 769 730
8. Seasonality
The Group experiences no material variations due to seasonality.
9. Availability of interim statement
This interim statement will be available on Xeros' website at
www.xerostech.com
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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