TIDMDCTA
RNS Number : 7504N
Directa Plus PLC
27 September 2023
27 September 2023
Directa Plus plc
("Directa Plus" or the "Company" or, together with its
subsidiaries, the "Group")
Half year Report for the Period Ended 30 June 2023
Improving margins with significant new contracts secured across
key verticals
Directa Plus (AIM: DCTA), a leading producer and supplier of
graphene-based products for use in consumer and industrial markets,
announces its half year results for the six months ended 30 June
2023, a period in which the Group has executed well against its
growth strategy, securing significant contracts and further
developing its strong pipeline of opportunities.
During the period, the Group has delivered improved margins with
selling price increases and a material reduction in production
costs alongside a further optimisation of overheads. Gross margins
improved by 4% to 46% resulting in a reduced EBITDA loss in the
first half, notwithstanding a reduction in revenue due to the
timing of the commencement of new contracts. Accordingly, the Board
remains confident in delivering a record second half performance
and expects full year revenue to be at least EUR12m with an EBITDA
loss of cEUR2.5m, representing significant progress year-on-year
(FY22: EBITDA loss of EUR3.6 million).
Financial highlights
-- Revenue EUR4.59m (H1 2022: EUR5.51m)
-- Total income EUR4.73m (H1 2022: EUR5.61m)
-- Gross margins improved to 46% (H1 2022 42%), with further improvement targeted
-- EBITDA loss* EUR1.25m (H1 2022: EUR1.40m)
-- Loss before tax EUR1.91m (H1 2022: EUR2.21m)
-- Cash at period end EUR4.24m (FY22: EUR5.73m), in-line with management expectations
* EBITDA loss represents results from operating activities
before tax, interest, depreciation and amortisation.
Target markets progress
Environmental remediation: 71% of period revenue (H1 2022:
76%)
-- Grafysorber(R) technology rapidly gaining commercial traction for water and oil decontamination,
evidenced by new contract wins and recurring customer business
-- Successful demonstration of pilot plant for the continuous treatment of produced water using
Grafysorber (R) , further broadening the range of potential applications of Grafysorber (R)
-- Post period-end, a EUR5.5m three-year contract signed with LIBERTY Galati for oily mill scale
produced in steel making, the largest single contract won to date with potential to expand
to EUR8m
Textiles: 29% of period revenue (H1 2022: 22%)
-- Signed an exclusive agreement in May 2023 with Grassi SpA, to
expand the use of Graphene Plus Planar Thermal Circuit(R) (PTC(R))
technology in the workwear and military markets
-- Launch of GRAPHITO, an eco-denim, in June 2023 with Candiani
Denim, an international textile producer that marks a significant
advancement in the sustainable fashion industry
-- Further orders received under an exclusive supply agreement with
MC Armour, based in Latin America, for printed PTC (R) textile
linings
Other
-- Growing market interest and commercial traction for GiPave(R),
a supermodifier incorporating G+ graphene technology, for sustainable,
high performant asphalt made with waste plastic
-- Positive initial discussions with major paint producers for Grafyshield
G+ with the support of partner, Pigmentsolution GmBH, a European
distributor of speciality chemicals and ingredients
-- Post period-end, signed a strategic collaboration with The SPECTRUM
Group, a US strategic advisory and government relations firm,
to explore the potential of G+ technologies in the US defence
sector
Giulio Cesareo, Founder & CEO of Directa Plus, said: "
Directa Plus has entered the second half in a strong position, with
improved margins and a growing business pipeline, providing
confidence in our future growth. We secured several meaningful wins
in the first half and, notably, our largest single contract win to
date with LIBERTY Galati post-period end, demonstrating the
increasing value of our technology.
"We are seeing increasing traction in graphene technology and
its applications, and as the market grows globally, we are
confident in our ability to capitalise on this growth with Directa
Plus well positioned to scale its activities. We are relentless in
our attention to delivering the best quality graphene at the best
possible price, and in the first half we achieved a further
significant reduction in our production costs.
"Our principal focus remains on developing sales in the Group's
core vertical markets, Environmental Remediation and Textiles, and
I am pleased with the initial progress we are making under our new
collaboration with The SPECTRUM Group to introduce our cutting-edge
G+ graphene-based products to the US defence sector. We remain
highly selective in addressing other opportunities in new markets
and in new geographical locations where prospects are encouraging,
that enable the business to build commercial momentum and broader
opportunities for growth."
For further information please visit
http://www.directa-plus.com/ or contact:
Directa Plus plc +39 02 36714458
Giulio Cesareo, CEO
Giorgio Bonfanti, CFO
Cavendish Securities plc ( Nominated Adviser
and Joint Broker ) +44 131 220 6939
Neil McDonald
Adam Rae
Singer Capital Markets (Joint Broker) +44 20 7496 3069
Rick Thompson
Phil Davies
Alma PR (Financial PR and Adviser) +44 20 3405 0205
Justin James directaplus@almapr.co.uk
Hannah Campbell
Kinvara Verdon
About Directa Plus
Directa Plus (www.directa-plus.com) is one of the largest
producers and suppliers of graphene-based products for use in
consumer and industrial markets. The Company's graphene
manufacturing capability uses proprietary patented technology based
on a plasma super expansion process. Starting from natural
graphite, each step of Directa Plus' production process -
expansion, exfoliation and drying - creates graphene-based
materials and hybrid graphene materials ready for a variety of uses
and available in various forms such as powder, liquid and
paste.
This proprietary production process uses a physical process,
rather than a chemical process, to process graphite into pristine
graphene nanoplatelets, which enables Directa Plus to offer a
sustainable, non-toxic product, without unwanted by-products.
Directa Plus' products are made of hybrid graphene materials and
graphene nano-platelets. The products (marketed as G+(R)) have
multiple applications due to its properties. These G+(R) products
can be categorised into various families, with different products
being suitable for specific practical applications.
Directa Plus was established in 2005 and is based in Lomazzo
(Como, Italy) and has been listed on the AIM market of the London
Stock Exchange since May 2016. The Company holds the Green Economy
Mark from London Stock Exchange which recognises companies that
contribute to the global green economy.
Chief Executive Officer's statement
Directa Plus made solid progress in the first half of the year,
successfully improving its margins and securing new contract wins
in our core verticals, Environmental Remediation and Textiles,
whilst also investing in technology and customer and partner
networks to advance the Group on its path to profitability.
We continue to deliver across all four pillars of our strategy -
Process, Product, Time to Market and Partnerships - in all key
verticals, with highlights including the Group's largest single
contract to date, post-period end, for a total of EUR5.5m with
LIBERTY Galati, with the potential for further expansion,
underpinning the Group's confidence to deliver in line with market
expectations for the full year. The success of our strategy is also
evident in our growing contract pipeline, setting the Group on a
growth trajectory.
Whilst revenue in the period is EUR4.59m vs EUR5.51m for the
prior comparable period, EBITDA loss has improved to EUR1.25m (vs
EUR1.40m in H1 2022). We have continued to improve the Group's
margins and the success of these efforts is reflected in the EBITDA
increase and reduced net loss. This has been achieved through
constructive contract renegotiations and price readjustments, and
various cost mitigation actions taken since FY22, in particular to
allay the impact of rising costs to help improve margins in
response to higher energy and raw material costs. The cost
reduction plan initiated in FY22 also included investment in new
milling equipment to reduce direct production costs for the
pre-exfoliation phase of production, and in certain cases we have
seen direct costs fall by up to 70%. We continue to assess pricing
for both products and long-term contracts to position the business
to withstand future headwinds by taking full advantage of the
technology platform we have developed.
Our mission remains to deliver the best quality graphene at the
best possible price in the most sustainable way, whilst supporting
the industrialisation of existing and new vertical applications.
Alongside this, we continuously monitor potential markets where we
believe that for a relatively small investment, we can develop
products that can generate high commercial traction, and which have
a fast time to market such as with paints and filtration. The Group
made good progress in these areas, securing new wins, grants and
expanding our partner network.
The new wins in the period highlight the increasing interest in
graphene technology and its applications from our partners to
support a more sustainable future. As the market grows globally, we
are confident in our ability to capitalise on this growth, through
our unique technology that supplies G+ graphene material into
several applications and products, created in close collaboration
with our partners and customers. Whilst our focus remains on
developing the Group's core verticals, Environmental remediation
and Textiles, the opportunities to expand into new markets in new
geographic locations are encouraging, enabling the business to
build strong commercial momentum.
Among others, the strategic partnership with The SPECTRUM Group,
a US strategic advisory and government relations firm, will be key
to exploring the potential of G+(R) technologies in the US defence
sector. Spectrum will leverage its expertise and extensive network
to support Directa Plus in driving its business expansion into the
military technology sector in the US.
The progress we made in the first half has laid the foundations
for a strong H2, where we expect to deliver even higher margins, to
build a highly scalable and profitable business.
Financials
These results show a solid performance, adeptly navigating the
cost pressures experienced in 2022. Amidst this backdrop, the Group
concentrated its attention on regaining and increasing its margins,
the success of which is showing through in H1 2023. Notwithstanding
the lower revenue in the period compared to H1 2022, as a result of
timings of contracts commencing, the Group successfully reduced its
EBITDA loss by 11% (EUR1.25m) and its Net Loss by 14% (EUR1.90m),
improving the financial sustainability of the Company with adequate
cash position of EUR4.24m in line with management expectations.
Our improved margins have been achieved via three main channels:
strong commercial activity supporting contract renegotiations and
price adjustments; specific investments in our production line in
order to reduce production costs, which has seen our costs fall by
70% in the last 12 months; and a general expenses mitigation plan,
formulated without detriment to the Group's specific investment
strategy.
We are pleased to report that the Group has a significant and
growing pipeline expected to commence in the second half of the
year. The EUR5.5m contract signed with LIBERTY Galati , the Group's
largest single contract to date, will commence in October. This
important milestone for the Group enriches our order portfolio and
signals our growth trajectory. Furthermore, the contract is
testament to the value placed in Directa Plus' technology.
Review of Operations
Environmental (71% of annual revenue)
Environmental remediation activities are principally carried out
through Setcar, a subsidiary company based in Romania, which
delivered promising results in the period, in line with
management's expectations.
Grafysorber(R) technology is a hybrid graphene-based solution
for treating water sludges and emulsions containing hydrocarbons.
It is at least five times more effective than current technologies
- absorbing more than 100 times its own weight of oil-based
pollutants. Grafysorber(R) technology is rapidly gaining commercial
traction for water and soil decontamination, evidenced by the new
business wins and repeat business from existing customers secured,
both locally and internationally.
Significantly, post-period end, Setcar secured Directa Plus'
largest contract to date. A EUR5.5m, three-year contract, with the
potential for further expansion up to a total value of EUR8.0m,
with LIBERTY Galati, the largest integrated steel producer in
Romania, to provide a solution for the treatment of oily mills
sludge produced in the manufacturing of steel. I am incredibly
proud of the team on this achievement which not only demonstrates
the increasing demand for Directa Plus' products and solutions, but
also our ability to support some of the largest businesses in the
world.
The Group also launched a pilot for a new concept for produced
water treatment using Grafysorber(R), through Setcar, which was
showcased at the Setcar Environmental division and is in line with
the Group's strategy to adopt new technologies that can
decontaminate and limit the waste of precious elements such as
water. Directa Plus is now working with an existing major customer
in Romania to utilise this new solution for treating produced water
in one of their oil production areas, with operations commencing as
soon as possible, before rolling out the solution to customers
globally.
Post period, the Group announced a strategic partnership with
The SPECTRUM Group, a US strategic advisory and government
relations firm, to explore the potential of G+(R) technologies in
the US defence sector. Spectrum will leverage its expertise and
extensive network to support Directa Plus in driving its business
expansion into the military technology sector. The collaboration
involves joint efforts in the development of cutting-edge products,
including G+(R) textile technologies (i.e thermal management,
antistatic, antimicrobial and thermal camouflage solutions), and
Grafysorber technology, with the aim to minimise the time to market
for the Group's G+ technologies in the US defence sector.
Textiles (29% of annual revenue)
The Group delivered good growth within the Textiles vertical in
H1, as it expands its range of applications. Our growing customer
base spans a variety of markets benefitting from the advantages of
G+(R) technology which is now incorporated into fabrics through
four different technologies:
-- G+(R) PLANAR THERMAL CIRCUIT(R): a functional print that can be applied to any type of fabrics,
creating a circuit.
-- G+(R) MEMBRANES: G+(R) is incorporated into the polyurethane membrane that can be laminated
self-standing or combined with a PTFE membrane directly to a fabric.
-- G+(R) DYEING: The fabric is immersed in a water-based bath containing G+(R) yielding a completely
antimicrobial fabric.
-- G+(R) COATINGS: a special coating process, based on water, able to obtain high-performance
polyurethane, enhanced with G+(R).
Workwear
In May 2023, the Group signed an exclusive agreement with
longstanding customer, Grassi SpA ('Grassi'), to expand the use of
its Graphene Plus Thermal Planar Circuit(R) (PTC(R)) technology in
the workwear and military markets. Grassi is a leading Italian
workwear and outerwear manufacturer with a strong focus on
innovation and sustainability and was the first manufacturer in the
textiles vertical to integrate Directa Plus' G+(R) technologies
into its product line. Directa Plus has been working in partnership
with Grassi since 2017 to provide the workwear industry with
sustainable clothing and has already supplied over 250,000 linear
meters of graphene-treated lining to Italian public organisations.
This new contract will add to the Company's recurring revenue
stream on its Graphene Plus PTC(R) technology and demonstrates the
continuing appetite from end users across the textile industry for
garments which have no biological or environmental impact. Grassi,
following the allotment of a new public contract, will supply an
Italian institution with PTC(R) technology.
Luxury
Directa Plus has been involved in the luxury market since near
inception and continues to see interest from brands in the
development of innovative, technical new products to add to their
collections. A key highlight in the Period includes the launch of
GRAPHITO, in collaboration with Candiani Denim (Candiani), an
international textile producer based in Italy, focused on
innovation and sustainability. GRAPHITO is an eco-denim textile and
represents a significant advancement in the sustainable fashion
industry by addressing denim's environmental impact and extending
the lifespan of denim garments.
There is growing interest from well-known brands across the
luxury industry for future collaborations with Directa Plus which
continues to provide the Group with confidence in the exciting
opportunities ahead.
Air filters
Post-period end, the Group was awarded a new tender by the
Italian Region of Lombardy as part of its 'Ricerca & Innova'
programme to further develop Graphene Plus (G+) air filtration
applications. The project is for an 18-month period and has a total
value of c.EUR400,000 which includes a non-repayable grant of
EUR142,500 and a zero-interest loan EUR264,642 which will be repaid
over seven years. This award enables the Group to continue
investing in and developing our air filter applications, leveraging
the antiviral and antimicrobial properties of its G+
technologies.
Further textile applications
The Group secured its first exclusive supply agreement for
printed graphene textile Planar Thermal Circuit(R) (PTC(R)) in
Latin America with a Columbian based manufacturer of ballistic
protection clothing, CIA Miguel Caballero SAS in October 2022,
which continues to progress well. Within the military sector, the
Board is assessing the opportunities for Directa Plus with
potential new customers worldwide, with a particular focus on the
US market.
Directa Plus continues to collaborate with the soft goods
division of a major international developer and manufacturer of
consumer electronics and related services. The agreement covers the
potential application of G+(R) as a protective covering for
consumer devices, exploiting its antiviral-antibacterial properties
as well as its thermal and electrical conductivity. The partnership
has delivered exceptional results to date. This collaboration
continues to demonstrate the potential for significant volumes in
the coming years.
Additional industrial verticals
Composites
The asphalt applications of Directa Plus's G+ graphene
technology have great potential and the product developed with
Iterchimica, GiPave(R) provides exceptional results in terms of
increased durability and a reduced carbon footprint. Directa Plus
is now seeing growing market interest internationally for the
product, with current discussions in Italy, Brazil, US and Romania,
and it is gaining commercial traction. The product uses waste
plastics that would not normally be recycled and the asphalt
containing GiPave(R) can itself be entirely recycled - promoting
the 'circular economy,' which reduces waste and the need for new
materials.
Paints
Directa Plus' graphene-based paint solution provides enhanced
anti-flame and anti-corrosion properties compared to normal paints
which we have identified as another area with high-return
potential. We have hired a team of experienced people in the field
and initiated positive discussions with major international players
in Europe and Asia to accelerate commercialisation.
In H1 2023 the Group has been working with Pigmentsolution GmbH,
a European distributor of speciality chemicals and ingredients, to
support the development and distribution of Directa Plus's new
patented Graphene Plus (G+) product, Grafyshield G+, initially in
Germany, Austria, Switzerland and Poland, with the potential for
further expansion in Europe.
Intellectual Property
As at September 2023, the Group's patent portfolio comprises 85
patents granted and 37 patents pending. The patents are grouped
into 22 families, 4 covering G+(R) production and 18 covering G+(R)
products and applications.
-- June 2023 - two new Italian patents, the EP patent, which
relate to the 'apparatus for treating materials with plasma',
and the ET patent, which relates to the 'composition comprising
graphene for the treatment of textile articles'.
-- March 2023 - an Italian patent for its G+(R) graphene technology
for air-filtering applications.
We are focused on creating value from our wide IP portfolio.
Discussions on potential licensing contracts are ongoing with
potential for further patent applications and awards in H2
2023.
Outlook
I am proud of what the team has achieved in the first half of
the year to position the business for scale. We secured several
high-level wins in H1, bolstered in August with the award of our
largest single contract to date with LIBERTY, demonstrating that
our technology is not only valid, but valued by our customers. We
continue to grow our new business pipeline across Europe, with
expanding potential opportunities in the US and Asia, and the
investments we have made to date in our technology and partner and
customer networks, confirm we have the right strategy in place to
capture this growing opportunity as we progress on a path towards
profitability.
The Company has entered H2 in a strong position, where we will
continue to focus on growing the business and improving margins
over time.
Giulio Cesareo
Chief Executive Officer
26 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 20223
Unaudited Unaudited Audited
------------- -------------- --------------
In Euro 30-Jun-23 30-Jun-22 31-Dec-22
-------------------------------------------------------------- ------------- -------------- --------------
Continuing operations
Revenue 4,591,757 5,508,706 10,856,144
Other income 134,188 100,667 424,926
Changes in inventories of finished goods and WIP 80,604 174,084 (191,510)
Raw materials and consumables used (2,247,739) (2,984,979) (5,856,661)
Employee benefits expenses (2,236,100) (2,259,310) (4,424,087)
Depreciation and amortisation (624,757) (646,657) (1,403,933)
Other expenses (1,572,167) (1,943,883) (4,421,177)
Results from operating activities (1,874,214) (2,051,372) (5,016,298)
-------------------------------------------------------------- ------------- -------------- --------------
Finance income 52,901 1,009 5,904
Finance expenses (86,860) (161,513) (317,804)
--------------------------------------------------------------
Net finance costs (33,959) (160,504) (311,900)
-------------------------------------------------------------- ------------- -------------- --------------
Loss before tax (1,908,173) (2,211,876) (5,328,198)
-------------------------------------------------------------- ------------- -------------- --------------
Tax (expense)/income 4,969 (6,149) 53,197
Loss after tax from continuing operations (1,903,204) (2,218,025) (5,275,001)
-------------------------------------------------------------- ------------- -------------- --------------
Loss of the year (1,903,204) (2,218,025) (5,275,001)
-------------------------------------------------------------- ------------- -------------- --------------
Other Comprehensive income items that will not be
reclassified to profit or loss
Defined Benefit Plan re-measurement gains and losses (834) 1,350 (6,790)
Other comprehensive expense for the year (no tax impact) (834) 1,350 (6,790)
-------------------------------------------------------------- ------------- -------------- --------------
Total comprehensive expense for the year (1,904,038) (2,216,675) (5,281,791)
-------------------------------------------------------------- ------------- -------------- --------------
Loss attributable to
Owner of the Parent (1,851,444) (2,230,996) (4,822,044)
Non-controlling interests 51,760) 12,971 (452,957)
(1,903,204) (2,218,025) (5,275,001)
Total comprehensive expense attributable to:
Owners of the Company (1,852,278) (2,229,646) (4,828,834)
Non-controlling interests (51,760) 12,971 (452,957)
(1,904,038) (2,216,675) (5,281,791)
-------------------------------------------------------------- ------------- -------------- --------------
Loss per share
Basic loss per share 2 (0.03) (0.03) (0.07)
Diluted loss per share 2 (0.03) (0.03) (0.07)
-------------------------------------------------------------- ------------- -------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Unaudited Unaudited Audited
------------- ------------- -------------
In Euro Note 30-Jun-23 30-Jun-22 31-Dec-22
------------------------------ ------ ------------- ------------- -------------
Assets
Intangible assets 1,556,023 1,829,204 1,664,666
Investments - - -
Property, plant and
equipment 3,445,149 3,769,629 3,861,151
Other receivables 69,352 553,904 69,720
-------------
Non-current assets 5,070,524 6,152,737 5,595,537
-------------------------------------- ------------- ------------- -------------
Inventories 1,437,610 1,597,476 1,121,912
Trade and other receivables 3,438,591 3,052,595 4,115,846
Cash and cash equivalent 4,241,161 7,776,689 5,727,768
-------------
Current assets 9,117,362 12,426,760 10,965,526
-------------------------------------- ------------- ------------- -------------
Total assets 14,187,886 18,579,497 16,561,063
-------------------------------------- ------------- ------------- -------------
Equity
Share capital 205,469 205,469 205,469
Share premium 39,181,789 39,181,789 39,181,789
Foreign Currency Translation
Reserve (45,151) (45,100) (39,161)
Retained Earnings (31,893,194) (27,569,021) (30,069,844)
-------------------------------------- ------------- ------------- -------------
Equity attributable
to owners of Group 7,448,913 11,773,137 9,278,253
-------------------------------------- ------------- ------------- -------------
Non-controlling interests 1,490,674 1,880,198 1,546,887
-------------------------------------- -------------
Total equity 8,939,587 13,653,335 10,825,140
-------------------------------------- ------------- ------------- -------------
Liabilities
Loans and borrowings 1,894,125 1,687,953 1,378,141
Lease liabilities 237,240 363,877 395,260
Employee benefits provision 389,702 519,055 554,444
Other payables 64,158 64,392 64,366
Deferred tax liabilities 28,050 73,332 33,095
-------------
Non-current liabilities 2,613,275 2,708,609 2,425,306
-------------------------------------- ------------- ------------- -------------
Loans and borrowings 418,875 137,434 767,677
Lease liabilities 265,506 204,868 239,068
Trade and other payables 1,950,643 1,875,251 2,112,875
Provision - - 190,997
Current liabilities 2,635,024 2,217,553 3,310,617
-------------------------------------- ------------- ------------- -------------
Total liabilities 5,248,299 4,926,162 5,735,923
-------------------------------------- ------------- ------------- -------------
Total equity and liabilities 14,187,886 18,579,497 16,561,063
-------------------------------------- ------------- ------------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023
CONSOLIDATED STATEMENT OF
CHANGES
IN EQUITY
================================= =========== =========================== ============ ================ ============
In Euro Share Share Foreign Retained Total Non-controlling Total
Capital Premium currency earnings interests Equity
translation
reserve
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Balance at 31
December
2021 205,393 39,159,027 (23,109) (25,352,139) 13,989,172 2,041,938 16,031,110
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Total
comprehensive
(expense)/income
for the period
Loss of the
Period - - - (2,230,996) (2,230,996) 12,971 (2,218,025)
Total other
comprehensive
(loss)/income - - - 1,350 1,350 - 1,350
Total
comprehensive
(expense)/income
for the period - - - (2,229,646) (2,229,646) 12,971 (2,216,675)
Capital raised 76 22,762 - - 22,838 - 22,838
Translation
reserve - - (21,991) (21,991) - (21,991)
Increase in share
capital
of Setcar - - - - - (174,711) (174,711)
Share-based
payment - - - 12,765 12,765 - 12,765
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Balance at 30
June 2022 205,469 39,181,789 (45,100) (27,569,021) 11,773,137 1,880,198 13,653,335
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Total
comprehensive
(expense)/income
for the period
Loss of the
Period - - - (2,591,048) (2,591,048) (465,928) (3,056,976)
Total other
comprehensive
(expense)/income - - - (8,140) (8,140) - (8,140)
Total
comprehensive
(expense)/income
for the period - - - (2,599,188) (2,599,188) (465,928) (3,065,116)
Capital raised - - - - - - -
Translation
reserve - - 5,939 - 5,939 - 5,939
Increase in share
capital
of Setcar - - - - - 132,617 132,617
Share-based
payment - - - 98,365 98,365 - 98,365
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Balance at 31
December
2022 205,469 31,181,789 (39,161) (30,069,844) 9,278,253 1,546,887 10,825,140
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Total
comprehensive
(expense)/income
for the period
Loss of the
Period - - - (1,851,444) (1,851,444) (51,760) (1,903,204)
Total other
comprehensive
(loss)/income - - - (834) (834) - (834)
Total
comprehensive
(expense)/income
for the period - - - (1,852,278) (1,852,278) (51,760) (1,904,038)
Capital raised - - -
Translation
reserve - - (5,990) - (5,990) (4,453) (10,443)
Change of Setcar - - - - - - -
non-controlling
interests
Share-based
payment - - - 28,928 28,928 - 28,928
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
Balance at 30
June 2023 205,469 31,181,789 (45,151) (31,893,194) 7,448,913 1,490,674 8,939,587
------------------ ------------- ----------- ------------ ------------- ------------ ---------------- ------------
CONSOLIDATED STATEMENT OF CASH FLOW
For the six months ended 30 June 2023
(Unaudited) (Unaudited) Audited
In Euro 30 Jun 2023 30 Jun 2022 31 Dec 2022
------------ ------------ ------------
Cash flows from operating activities
Loss for the year before tax (1,908,173) (2,211,876) (5,328,198)
---------------------------------------- ------------ ------------ ------------
Adjustments for:
Depreciation 407,484 391,732 861,127
Amortisation of intangible assets 217,273 254,925 542,806
Disposal loss on tangible assets 27,889 - 20,508
Share-based payment expense 28,928 12,765 111,130
Finance income (52,901) (1,009) (5,904)
Finance expense 81,273 153,812 303,044
Interest of lease liabilities 5,587 7,702 14,760
Other provision (190,997) - 190,997
(1,383,637) (1,391,949) (3,289,730)
(Increase)/decrease in:
- inventories (315,698) (226,600) 248,963
- trade and other receivables,
prepayments 677,623 (115,384) (694,450)
- trade and other payables (178,957) (261,375) 120,918
- provisions and employee benefits (175,170) 11,360 28,819
---------------------------------------- ------------ ------------ ------------
Net cash used in operating activities (1,375,839) (1,983,948) (3,585,480)
---------------------------------------- ------------ ------------ ------------
Cash flows from investing activities
Interest received 10,698 1,009 5,904
Investment in intangible assets (97,569) (291,853) (415,195)
Acquisition of property, plant
and equipment (19,370) (178,395) (759,821)
---------------------------------------- ------------ ------------ ------------
Net cash used in investing activities (106,241) (469,239) (1,169,112)
---------------------------------------- ------------ ------------ ------------
Cash flows from financing activities
Proceeds from Capital raise and
exercise of share options - 22,838 22,838
Interest paid (71,886) (33,603) (97,456)
New borrowings 670,155 285,680 988,938
Repayment of borrowings (502,973) (930,013) (1,312,840)
Repayment of lease liabilities (131,582) (111,840) (223,197)
New lease liabilities - - 191,700
Net cash from (used in)/ financing
activities (36,286) (766,938) (430,017)
---------------------------------------- ------------ ------------ ------------
Net (decrease)/increase in cash
and cash equivalent (1,518,366) (3,220,125) (5,184,609)
Exchange (losses)/gains on cash
and cash equivalent 31,759 (133,654) (218,091)
Cash and cash equivalents at beginning
of the period 5,727,768 11,130,468 11,130,468
Cash and cash equivalents at end
of the period 4,241,161 7,776,689 5,727,768
---------------------------------------- ------------ ------------ ------------
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
For the 6 months ended 30 June 2023
1. Basis of preparation
(a) Statement of compliance
The financial information contained in this announcement does
not constitute statutory financial statements within the meaning of
Section 435 of the Companies Act 2006.
The financial information for the six months ended 30 June 2023
is unaudited. In the opinion of the Directors, the financial
information for the period fairly represents the financial position
of the Group. Results of operations and cash flows for the period
are in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006. The
accounting policies, estimates and judgements applied are
consistent with those disclosed in the Group's statutory financial
statements for the year ended 31 December 2022. The interim
condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the full annual
report for the year ended 31 December 2022.
All financial information is presented in Euro, unless otherwise
disclosed.
The Directors of the Company approved the financial information
included in these Interim condensed consolidated financial
statements on 26 September 2023.
(b) Basis of measurement
The financial statements have been prepared on the historical
cost basis unless otherwise stated.
(c) Functional and presentation currency
These financial statements are presented in Euro ('EUR') and is
considered by the Directors to be the most appropriate presentation
currency to assist the users of the financial statements. The
functional currency of the Company and Italian operating subsidiary
is Euro ('EUR'). The functional currency of the Romanian subsidiary
is RON.
(d) Going concern
The Group meets its working capital requirements through the
receipt of revenues from the provision of its services and sale of
products mainly in Europe, the management of capital and operating
expenditure, from the working capital and other borrowing
facilities available to it and from the issue of equity
capital.
As of 30 June 2023, the Group had net assets of EUR8.94m
(31/12/2022: EUR10.83m) and cash and cash equivalent of EUR4.24m
(31/12/2022: EUR5.73m).
The Directors are aware that there is an ongoing need to monitor
closely the cash flow requirements of the Company and Group,
particularly in light of the recent developments in the markets due
to the COVID-19 pandemic, the war in Ukraine, inflation trends and
raises in interest rates, which have had a significant impact on
global economies and could affect the business. In this regard, the
Group prepares annual budgets and forecasts in order to ensure that
there is sufficient liquidity to meet liabilities and commitments
as they fall due. The Directors regularly review updates to the
scenario planning such that the Board can put in place appropriate
mitigating actions that are within their control.
The Directors prepare annual budgets and forecasts in order to
ensure that they have sufficient liquidity in place in the
business.
The forecasts prepared by the Directors show that the Group has
sufficient liquidity in place to support the plan and strategy for
the future developments of the business over the next 12
months.
The Directors also modelled reasonably plausible downside
scenarios. These include scenarios which reflect the loss of major
contracts, reduction in margin and delays contracts being executed.
Each of these scenarios could adversely impact the Group.
Management also modelled the impact of mitigating factors within
their control, including delaying capital expenditure and
additional reductions in costs in order to maintain sufficient
liquidity. Under these reasonably plausible downsides, the Group
would utilise its cash resources before December 2024 and require
additional funding. While the Group successfully raised GBP7m in
2021 that was fully subscribed by existing and new investors, there
is no certainty that the Group will be able to raise further funds
through the issue of equity in the future. As a consequence, this
represents a material uncertainty that may cast significant doubt
on the Group and Parent Company's ability to continue as a going
concern and therefore the Group may be unable to realise its assets
and discharge its liabilities in the normal course of business.
Based on the analysis above, the Directors have a reasonable
expectation that the Group has adequate resources to support the
Group's activities for the foreseeable future and have concluded it
is appropriate to adopt the going concern basis of accounting in
the preparation of the financial statements.
2. Earnings Per Share
The earnings per share have been calculated using the weighted
average of ordinary shares. The Company was loss making for all
periods presented. 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
for each of the period reported .
Change in Total number Days Weighted number
number of ordinary of ordinary of ordinary
shares shares shares
---------------------- -------------------- ------------- ----- ----------------
At 31 December 2020 63,624 61,174,587 365 61,087,158
---------------------- -------------------- ------------- ----- ----------------
-At 31 December 2021 4,857,539 66,032,126 365 61,380,599
---------------------- -------------------- ------------- ----- ----------------
-At 31 December 2022 25,523 66,057,649 365 66,053,593
---------------------- -------------------- ------------- ----- ----------------
At 30 June 2023 - 66,057,649 181 66,057,649
---------------------- -------------------- ------------- ----- ----------------
Earnings per share
30 Jun 2023 30 Jun 2022 31 Dec 2022
Loss for the year (1,851,444) (2,230,996) (4,822,044)
Weighted average number
of shares:
- Basic 66,057,649 66,049,470 66,053,593
- Diluted 67,473,141 67,044,295 67,189,085
Loss per share
- Basic (0.03) (0.03) (0.07)
- Diluted (0.03) (0.03) (0.07)
-ends-
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END
IR NKABNCBKDPCB
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September 27, 2023 02:00 ET (06:00 GMT)
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