TIDMOHT
RNS Number : 0832M
Ocean Harvest Technology Group PLC
12 September 2023
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU No. 596/2014) which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
12 September 2023
Ocean Harvest Technology Group Plc ("Ocean Harvest" or "the
Company")
Interim Results for six months ended 30 June 2023
Ocean Harvest Technology Group Plc (AIM: OHT), specialists in
researching, developing and selling seaweed and ancillary products,
announces its unaudited results for the six month period ended 30
June 2023 ("the Period").
The Interim Report for the period ended 30 June 2023 will be
published on the Company's website today at
www.oceanharvesttechnology.com .
Financial Highlights
-- OHT successfully completed its initial public offering
raising gross proceeds of GBP6,000,000
o Funds raised allows the Company to focus on its strategic
growth objectives
-- 66% growth in product revenue to EUR1.6 million (H1 2022: EUR0.95 million)
-- 150% increase in gross margin to EUR0.56 million (H1 2022: EUR0.23 million)
o Substantial increase in gross margin to 36% (H1 2022: 24%)
o Margin improvements driven by an increase in average selling
prices, eliminating selling concessions post Covid-19 pandemic and
an improvement in processing yield
-- Well funded with no external debt and a period end cash
balance of EUR4.8 million (31 December 2022: EUR1.2 million)
Operational Highlights
-- Strong momentum with new customer wins, having onboarded over
10 new customers in the first six months. This includes a top five
swine producer in the US and one of the UK's largest feed
pre-mixers
-- Expanded seaweed supply chain in new regions such as east
Africa and the Philippines, giving access to materially larger
volumes of biomass. OHT has also secured a strategic relationship
with a producer of brown seaweed which provides price and volume
certainty of supply and is progressing similar arrangements with
other seaweed suppliers
-- Further improvement in operating efficiencies due to
investment in an additional grinding line in Vietnam, increasing
yield significantly
-- Completed Life Cycle Analysis of OceanFeed (TM) which
demonstrates that it has a materially lower CO(2) equivalent
footprint in its manufacture than other common ingredients in
animal feed.
o OceanFeed (TM) can be net-negative as one tonne used as an
additive can reduce CO(2) equivalent emissions from the feed chain
by over 10 tonnes
-- Completed further R&D trials which demonstrated the
strong efficacy of OceanFeed (TM) in a number of applications
-- The Company was awarded a patent which protects the claim
made by the Company that use of a seaweed blend as a feed
supplement improves the quantity and/or quality of eggs produced by
egg laying birds
Conclusion and Outlook
-- The Group has strong momentum and continues to onboard new
customers from its growing pipeline of customer trials.
-- The improvements achieved in gross margin year to date are
expected to continue due to the revised selling price levels and
the Company's developments in seaweed sourcing and processing.
-- The outlook for OHT's supply of seaweed remains strong and
supportive of continued growth in the Company's product sales.
-- Whilst the Group continues to see revenue growth in line with
expectations in Asia and the Americas, it is experiencing some
delays in onboarding new customers in Europe. This is resulting
from the direct impact of feed ingredient prices affecting customer
profitability as well as customers in this region having more
entrenched usage of other additives. This shortfall in Europe had
been expected to be compensated for in the second half by volume
from a recently onboarded new customer in another region which is
now opting for lower initial volumes before moving to full use in
future.
-- In addition, the strengthening of the Euro in 2023 will
impact the value of our reported revenue which is primarily sourced
in US dollars
o As a result, we now expect to report total revenue for the
year in excess of EUR 3.4 million
-- The Board continues to see supportive conditions for the
growth of OHT's products, with the market looking for more
sustainable feed ingredients which improve animal production
metrics and can replace existing additives such as antibiotics,
other synthetic additives and feed ingredients from land based
plants. The number of potential customers trialing OceanFeed(TM)
has increased significantly since the start of the year and the
potential sales value from those customers has more than doubled to
over EUR 10 million. The Board has strong visibility over FY24
revenues that support its forecast revenue growth rates.
Mark Williams, CEO of Ocean Harvest Technology Group,
commented:
"At our maiden set of interim results I am pleased to say that
OHT has begun to deliver on its objectives set out at its IPO in
April. We are continuing to strengthen our global sales team and
build out our supply chain. We will also continue to invest in
R&D to innovate and enhance our existing customer offering in
the markets the Group operates in. We will continue to manage some
of the short term onboarding delays and we look forward to
delivering on our long term growth strategy for our new and
existing shareholders."
For more information please contact:
Ocean Harvest Technology Group Plc Tel: +44 (0) 118 228 7612
Mark Williams, CEO
finnCap Ltd (Nominated Adviser and Sole Broker) Tel: +44 (0) 207 220 0500
Geoff Nash / Seamus Fricker / George Dollemore (Corporate Finance)
Charlotte Sutcliffe / Harriet Ward (ECM)
Camarco (Financial PR Adviser) Tel: +44 (0) 203 757 4991
oht@camarco.co.uk
Tom Huddart / Rosie Driscoll / Letaba Rimell
Notes to Editors
Ocean Harvest Technology Group plc is a global leader in the
development and commercialisation of value adding products from
multiple species of seaweed. The Company provides a range of
natural ingredients focused on improving animal performance whilst
protecting the environment, through its unique and proven
intellectual property portfolio. The Company's products are
produced in its facility in Vietnam from seaweeds soured from
multiple markets across the world.
For more information, please visit www.oceanharvesttechnology.com .
Chairman's Statement
Introduction
Ocean Harvest Technology is pleased to report its first set of
results following admission of the Company to the AIM market in
April.
Ocean Harvest Technology is one of the leading commercial scale
producers of seaweed blend ingredients for the animal feed
market.
The Group was founded in 2005 on the belief that an investment
in research and development would result in the ability to create
seaweed ingredients that would deliver a number of specific
benefits across multiple animal species based on the
polysaccharides and other bioactive ingredients present in
particular species of seaweeds.
Since its establishment, the Group, through its research and
development programme, continues to build a portfolio of
intellectual property and has had commercial success in selling its
products as ingredients to improve the efficiency, profitability
and sustainability of the animal feed chain by delivering
improvements in animal gut health.
Ocean Harvest Technology's ambition is to become the largest
supplier of proprietary blended seaweed ingredients to the global
animal feed industry.
Period Under Review
The Initial Public Offering was completed in April, successfully
raising funds to allow the Company to focus on its strategic growth
objectives of investing in sales and marketing, research and
development and our supply chain.
At the time of the IPO, additional expertise joined the board in
the form of non-executive directors David Tilston, Christine Maggs
and Stephen Walker.
The Board believes that Ocean Harvest Technology has enormous
potential to capitalise on the growing demand for sustainable and
natural ingredients which improve the profitability and
sustainability of feeding production animals. OceanFeed (TM) has
demonstrated benefits when used in multiple species of production
animals through improved growth rates and feed conversion
efficiency and lower mortality rates. OceanFeed (TM) also has a
lower carbon footprint than ingredients and additives produced from
land-based plants and generates economic benefits in the
communities where our seaweed raw material is harvested.
The Company anticipates upcoming R&D and trial data
demonstrating a range of benefits provided by its feed additives,
which the Directors believe will enable Ocean Harvest Technology to
attract new customers and access new markets within the animal feed
industry.
Conclusion
The Board remains focused on ensuring the Company delivers on
its long term growth opportunity and ensuring that its business is
run in a sustainable and socially responsible manner with a strong
level of governance oversight from the Board of Directors.
Ashley Head
Chairman
Chief Executive's Statement
Introduction
Ocean Harvest Technology is one of the leading producers of
seaweed based ingredients for use in the animal feed industry. The
business has achieved strong growth in the first six months driven
by the acquisition of new customers, the expansion of our supply
chain and continued investment in research and development.
Customer Trials
We continue to assist potential customers to run trials to
demonstrate the efficacy and application of the Company's OceanFeed
(TM) products. OHT currently has trials scheduled or in progress
with over 20 potential customers, which is a continued increase in
the size of our customer trial pipeline since the start of the
year.
The pipeline of customer trials represents potential annual
product revenue of over EUR10 million, which is an increase from
the EUR5 million pipeline at the start of the year.
Seaweed Sourcing and Processing
The Company has continued to expand its supply chain,
on-boarding new suppliers in new and existing markets for its key
seaweed species. We have commenced sourcing seaweed from east
Africa for the first time during H1 2023 and returned to sourcing
from the Philippines where we had not sourced from since before the
pandemic. We have onboarded new suppliers in Indonesia and
increased volumes from existing suppliers in that important market.
Our visibility and confidence of future seaweed supplies has grown
with these developments which will enable our continued growth.
In addition, the Company has recently entered into a strategic
arrangement with a supplier of brown seaweed which has guaranteed
its supply to the Company at favourable pricing for at least the
next two years. We are progressing the development of similar
arrangements with other seaweed suppliers.
Our Vietnam facility had the full use of the second grinding
line which was installed and commissioned in late 2022. In addition
to providing increased volume capacity to the facility, we have
observed that the efficiency of this new line has also contributed
to lower yield losses when processing the seaweed raw material.
This has been helpful in our margin improvement across the
business.
During the period we commissioned an independent party to
conduct a Life Cycle Analysis (LCA) of our OceanFeed (TM) product
and calculate its carbon footprint. This calculated that 1 tonne of
OceanFeed (TM) generated total CO(2) equivalent emissions of 596kg,
comprised of direct emissions from the product LCA of 433kg and
163kg of emissions from corporate overhead. These direct carbon
emissions of 433kg per tonne are over 30% lower (and in some cases
90% lower) than the CO(2) equivalent emissions of other common
ingredients in animal feed such as wheat, corn and soy. This is
mainly because the seaweed we source uses no arable land, fresh
water or fertilisers.
The analysis goes on to demonstrate that OceanFeed(TM) can be a
net-negative carbon product in its own right across its whole cycle
as i) seaweed absorbs carbon prior to harvest and ii) using
OceanFeed(TM) as an additive can result in producers using less
animal feed. Therefore, using one tonne of OceanFeed (TM) can
reduce total CO(2) equivalent emissions by over 10 tonnes.
Research and Development
We were very pleased during the period to announce the results
of a number of research and development trials which have
demonstrated additional applications of OceanFeed (TM) or provided
additional evidence of previously demonstrated applications of
OceanFeed (TM) . These results included:
-- A laying hen trial confirmed improvements in both egg
production and feed efficiency when birds were fed an OceanFeed(TM)
Poultry supplemented diet. These performance improvements
materially increased income per hen.
-- A catfish trial demonstrated that fish fed with OceanFeed(TM)
Aqua in their diets had higher feed intake and weight gain, leading
to a substantial increase in final live weight.
-- A trial with juvenile shrimp where OceanFeed(TM) Aqua
improved both weight gain and feed efficiency, thus reducing
production costs. OceanFeed(TM) Aqua also helped reduce mortality
in a disease challenge trial run in parallel.
-- A commercial swine trial reported material improvements in
feed efficiency in piglets with OceanFeed(TM) Swine included in
their diet. OceanFeed(TM) Swine successfully replaced a combination
of seven conventional gut health additives.
In the period, the Company was also granted its first patent.
Patent No: GB 2 594 432 is focused on the efficacy of OceanFeed
(TM) in layer hens and protects the claim made by the Company that
use of a seaweed blend as a feed supplement for egg laying birds
improves the quantity and/or quality of eggs produced. Other patent
applications submitted by OHT have been progressing with the
relevant agencies.
Global Seaweed Market
The World Bank stated in its recently published Global Seaweed
Report 2023 that it views seaweed as a high growth input to many
developing industries. In particular:
-- The top four opportunities cited for new growth in seaweed
applications are Animal Feed, Pet Feed, Methane Reduction Additives
and Biostimulants
-- In discussing the animal feed and pet feed opportunities the
report cites the pre-biotic effect of seaweed, and states the
improvements in feed efficiency, production economics and
anti-biotic replacement ability of seaweed
-- The report cites OceanFeed (TM) as a product that delivers
specific benefits to animals, quoting the performance benefits of
OceanFeed (TM) Bovine and OceanFeed (TM) Swine
-- It acknowledges the challenge in building supply chain but it
does go on to say that OHT is a company that has already built a
supply chain that gives it access to high volumes of seaweed
-- The report cites the three key challenges in growing an
industry of seaweed ingredients for animal and pet feed as:
o having the R&D to demonstrate the product's efficacy
o having a new customer onboarding timeline
o building the supply chain
We believe that this independent analysis supports our
conviction around the major drivers for our business and our
strategy to exploit them.
Conclusion and Outlook
In the period, we have delivered very substantial product
revenue growth over the same period of last year, and gross margins
have increased significantly. The Company has strong momentum and
continues to onboard new customers and the improvements achieved in
gross margin year to date are expected to continue due to the
revised selling price levels and OHT's developments in seaweed
sourcing. The outlook for OHT's supply of seaweed remains strong
and supportive of continued growth in the Company's end product
sales.
Whilst OHT continues to see revenue growth in line with
expectations in Asia and the Americas, it is experiencing some
delays in onboarding new customers in Europe. This is resulting
from the direct impact on feed ingredient prices and customer
profitability as well as customers in this region having more
entrenched usage of other feed additives. This shortfall in Europe
had been expected to be compensated for in the second half by
volume from a recently onboarded new customer in another region
which is now opting for lower initial volumes before moving to full
use in future. In addition the strengthening of the Euro in 2023
will impact the value of our reported revenue which is primarily
sourced in US dollars.
As a result, we now expect to report full year total revenue of
not less than EUR3.4 million.
Notwithstanding these revenue delays, the Board does not see any
change in the longer term outlook for the business and its revenue
growth. The market backdrop remains supportive of OHT's products
with customers looking for more sustainable feed ingredients which
improve animal production metrics and can replace existing
additives such as antibiotics, other synthetic additives and feed
ingredients from land based plants. We have onboarded over 10
customers in the first six months of the year and the pipeline of
potential customers trialling OHT's products continues to grow in
terms of the number of customers and has more than doubled in
potential sales value since the start of the year to over EUR10
million. This demonstrates the increasing interest and acceptance
of key players in the animal feed sector to include OceanFeed (TM)
blended seaweed ingredients to achieve production and
sustainability benefits.
Financial Summary
The Company has prepared the following financial summary, in
addition to the attached financial statements, in the same format
as previous announcements to ensure consistency of approach and
comparability. This summary shows our product revenue and separates
the other revenue we record which is a reimbursement of shipping
arranged by OHT on behalf of its customers and on which we do not
charge a margin. It also separates non-operating and IPO related
expenses to show an EBITDA and an adjusted earnings number.
Six months Six months Year ended
to to
30-Jun-23 30-Jun-22 31-Dec-22
EUR EUR EUR
----------- ----------- -----------
Product revenue 1,576 952 2,513
Other revenue 177 279 495
Reported revenue 1,754 1,231 3,008
Cost of goods sold 1,190 1,003 2,229
Gross Margin 564 227 779
Gross Margin % 36% 24% 31%
Overheads excluding IPO costs,
share based payments, depreciation
and finance costs 1,784 1,434 3,121
EBITDA (1,219) (1,206) (2,342)
Finance expense 77 44 50
Depreciation 35 25 52
Other - - 456
Adjusted Earnings (1,331) (1,276) (2,900)
IPO transaction costs 754 - -
Share based payments 97 - -
Profit (loss) before tax (2,182) (1,276) (2,900)
----------- ----------- -----------
Revenue
Product revenue grew 66% to EUR1.58 million (H1 2022 EUR0.95
million.) driven from new customer acquisition and an increase in
average selling prices. The Company sold significant volumes of its
proprietary blended seaweed products to over 40 customers,
increasing from the circa 30 sold to during 2022. These new
customers include one of the largest UK animal feed pre-mix
companies and a top five swine producer in the US.
The Company has been able to increase average selling prices by
demonstrating the significant financial benefits of using its
products to new customers and through eliminating selling
concessions which the Company had offered to customers in previous
years in response to the high shipping costs resulting primarily
from the Covid-19 pandemic.
Profitability
The Company recorded gross margin of EUR0.56 million in the
first half vs EUR0.23 million achieved in the first half of last
year. Gross margins have benefited from the increases in average
selling prices but also from expanded seaweed sourcing with
improved quality, and therefore better production yields. The gross
margin of 36% on product revenue in H1 is a substantial increase on
the equivalent margin of 24% and 31% recorded in H1 and full year
2022 respectively. We believe that we will be able to further
improve gross margin as we scale the business further.
Administration expenses have increased by EUR0.4 million over
the first half of last year due to a number of factors in personnel
expenses including additional headcount and the making of incentive
accruals throughout the year. This led to an adjusted earnings loss
of EUR1.3 million, consistent with the same period last year.
The Company also recorded charges in the period of EUR0.8
million in IPO transaction expenses including legal, professional
and advisory costs. The total reported loss for the period after
these items has increased to a loss of EUR2.2 million from EUR1.3
million in H1 2022 primarily due to these items.
EPS
Basic loss per share of EUR0.023 has increased from a loss of
EUR0.019 in June 2022.
Cash Flow
The IPO gross proceeds of EUR6.9 million have significantly
improved cash flow, with a cash balance of EUR4.8 million at 30
June 2023, however operating cash flow for H1 2023 is impacted by
working capital increases from inventory build, particularly of
semi-finished goods to support sales volume growth, and trade
debtors increased in line with sales growth. We have worked on the
efficiency of these balances with debtors days moving from 145 to
102 and inventory representing 189 days sales vs 213 days sales in
H1 2022.
Non current asset expenditure has also increased with investment
in the Vietnam manufacturing facility, R&D activity and systems
development costs.
As part of the IPO, all of the convertible loan notes which were
previously outstanding were converted into shares in the Company.
In addition the IPO proceeds were used to repay the working capital
facility that it had with one of its shareholders, hence the
Company is in a strong financial position and has no external
debt.
Mark Williams
CEO
Unaudited Condensed Consolidated Statement of Total
Comprehensive Income
for the interim period ended 30 June 2023
Six months Six months Year ended
to to 31 Dec 2022
30 Jun 30 Jun
Note 2023 2022
EUR EUR EUR
----------- ------------ -------------
Product revenue 1,576,332 951,913 2,513,068
Other revenue 177,478 278,978 495,227
----------- ------------ -------------
Total revenue 6 1,753,810 1,230,891 3,008,295
Cost of sales (1,189,624) (1,003,495) (2,229,108)
----------- ------------ -------------
Gross profit 564,186 227,396 779,187
Other operating income 19,930 2,602 9,004
Administrative expenses (1,935,142) (1,461,869) (3,476,495)
Operating loss (1,351,026) (1,231,871) (2,688,304)
Finance expense (77,074) (44,484) (212,380)
----------- ------------ -------------
IPO transaction costs (753,885) - -
----------- ------------ -------------
Loss before taxation (2,181,985) (1,276,355) (2,900,684)
Taxation - 51,188 64,817
----------- ------------ -------------
Loss for the period (2,181,985) (1,225,167) (2,835,867)
----------- ------------ -------------
Other comprehensive income
Item that may be subsequently reclassified
to profit or loss:
Currency translation differences 496 (596) 50,321
----------- ------------ -------------
Total comprehensive loss, net
of tax (2,181,489) (1,225,763) (2,785,546)
----------- ------------ -------------
Total comprehensive loss for the
period attributable to owners of
the parent (2,181,489) (1,225,763) (2,785,546)
=========== ============ =============
Loss per share - basic 5 (0.023) (0.019) (0.044)
=========== ============ =============
The above condensed consolidated statement of total
comprehensive income relates to continuing operations for the
Company.
Unaudited Condensed Consolidated Statement of Financial
Position
as at 30 June 2023
31 Dec
Note 30 Jun 2023 30 Jun 2022 2022
ASSETS EUR EUR EUR
------------- ------------- -------------
Non-current assets
Right of use asset 101,229 297,917 219,076
Intangible assets 7 109,962 8,923 20,617
Property, plant and equipment 373,999 129,121 346,521
------------- ------------- -------------
Total non-current assets 585,190 435,961 586,214
------------- ------------- -------------
Current assets
Trade and other receivables 8 1,290,706 3,525,560 1,251,026
Inventories 1,016,729 892,083 629,865
Corporation tax assets 72,537 96,709 62,412
Cash and cash equivalents 4,756,926 549,407 1,194,440
Total current assets 7,136,898 5,063,759 3,137,743
------------- ------------- -------------
Total assets 7,722,088 5,499,720 3,723,957
------------- ------------- -------------
EQUITY AND LIABILITIES
Equity
Share capital 9 1,477,482 761,448 761,448
Share premium 9 8,128,086 - -
Share-based payment reserve 10 206,406 - 109,456
Merger reserve 26,932,455 26,932,455 26,932,455
Foreign exchange reserve (47,343) (98,160) (47,839)
Retained losses (29,583,653) (25,790,969) (27,401,668)
Total equity 7,113,433 1,804,774 353,852
------------- ------------- -------------
Non-current liabilities
Lease liability 47,613 245,019 74,504
------------- ------------- -------------
Total non-current liabilities 47,613 245,019 74,504
------------- ------------- -------------
Current liabilities
Trade and other payables 493,265 438,556 436,534
Convertible loans 11 - 2,352,260 2,285,030
Lease liability 67,777 77,825 170,514
Borrowings 12 - 581,286 403,523
------------- ------------- -------------
Total current liabilities 561,042 3,449,927 3,295,601
------------- ------------- -------------
Total liabilities 608,655 3,694,946 3,370,105
------------- ------------- -------------
Total equity and liabilities 7,722,088 5,499,720 3,723,957
============= ============= =============
Unaudited Condensed Consolidated Statement of Changes in
Equity
for the interim period ended 30 June 2023
Share-based Foreign
Share Share payment Merger exchange Retained Total
capital premium reserve reserve reserve losses equity
EUR EUR EUR EUR EUR EUR EUR
--------- --------- ----------- ----------- ---------- -------------- -----------
As at 1 January 2023 761,448 - 109,456 26,932,455 (47,839) (27,401,668) 353,852
--------- --------- ----------- ----------- ---------- -------------- -----------
Loss for the period - - - - - (2,181,985) (2,181,985)
Other comprehensive loss:
Foreign currency exchange
difference - - - - 496 - 496
Total comprehensive loss
for the period 761,448 109,456 26,932,455 (47,343) (29,583,653) (2,181,489)
--------- --------- ----------- ----------- ---------- -------------- -----------
Transactions with owners
Issue of share capital 434,093 6,511,388 - - - - 6,945,481
Conversion of convertible
loan notes (Note 11) 281,941 2,220,658 - - - - 2,502,599
Cost of raising equity - (603,960) - - - - (603,960)
--------- --------- ----------- ----------- ---------- --------------
Share-based payment - - 96,950 - - - 96,950
--------- --------- ----------- ----------- ---------- --------------
Total transactions with
owners 716,034 8,128,086 96,950 - - - 8,941,070
As at 30 June 2023 1,477,482 8,128,086 206,406 26,932 ,455 (47,343) (29,583,653) 7,113,433
========= ========= =========== =========== ========== ============== ===========
Share-based Foreign
Share Share payment Merger exchange Retained Total
capital premium reserve reserve reserve losses equity
EUR EUR EUR EUR EUR EUR EUR
-------- -------- ----------- ---------- ---------- -------------- -----------
As at 1 January 2022 761,448 - - 26,932,455 (98,160) (24,565,802) 3,029,941
-------- -------- ----------- ---------- ---------- -------------- -----------
Loss for the period - - - - - (1,225,167) (1,225,167)
Other comprehensive loss:
Foreign currency exchange
difference - - - - (596) - (596)
Total comprehensive loss
for the period 761,448 - - 26,932,455 (98,756) (25,790,969) 1,804,178
-------- -------- ----------- ---------- ---------- -------------- -----------
As at 30 June 2022 761,448 - - 26,932,455 (98,756) (25,790,969) 1,804,178
======== ======== =========== ========== ========== ============== ===========
Unaudited Condensed Consolidated Statement of Changes in
Equity
for the interim period ended 30 June 2023 (continued)
Share-based Foreign
Share Share payment Merger exchange Retained Total
capital premium reserve reserve reserve losses equity
EUR EUR EUR EUR EUR EUR EUR
-------- -------- ----------- ---------- ---------- -------------- -----------
As at 1 January 2022 761,448 - - 26,932,455 (98,160) (24,565,802) 3,029,941
-------- -------- ----------- ---------- ---------- -------------- -----------
Loss for the year - - - - - (2,835,866) (2,835,866)
Other comprehensive loss:
Foreign currency exchange
difference - - - - 50,321 - 50,321
Total comprehensive loss
for the year 761,448 - - 26,932,455 (47,839) (27,401,668) 244,396
-------- -------- ----------- ---------- ---------- -------------- -----------
Transactions with owners
Share-based payment - - 109,456 - - - 109,456
-------- -------- ----------- ---------- ---------- --------------
Total transaction with owners - - 109,456 - - - 109,456
As at 31 December 2022
(Unaudited) 761,448 - 109,456 26,932,455 (47,839) (27,401,668) 353,852
======== ======== =========== ========== ========== ============== ===========
Unaudited Condensed Consolidated Statement of Cash Flows
Six months Six months Year end
to 30 Jun to 30 Jun to
2023 2022 31 Dec 2022
EUR EUR EUR
Cash flows from operating activities
Loss before taxation (2,181,985) (1,276,355) (2,900,684)
Adjustments for:
Depreciation of property, plant,
and equipment 32,413 25,381 51,685
Amortisation of right-of-use assets 71,589 76,616 153,232
Amortisation of intangible assets 6,485 - -
Finance expense 77,074 44,484 212,380
IPO transaction costs 753,885
Loss on disposal of property, plant
and equipment - - 1,426
Share based payment 96,950 - 109,456
(1,143,589) (1,129,874) (2,372,505)
Changes in working capital
(Increase)/decrease in inventories (386,864) (162,215) 100,003
Increase in trade and other receivables (49,805) (2,540,269) (210,953)
Increase in trade and other payables 56,731 211,402 210,959
----------- ----------- ------------
Cash used in operations (1,523,527) (3,620,956) (2,272,496)
Taxation credits received - 57,769 50,914
----------- ----------- ------------
Net cash used in operations (1,523,527) (3,563,187) (2,221,582)
----------- ----------- ------------
Cash flows from investing activities
Purchase of property, plant and
equipment (59,890) (30,290) (273,752)
Payments for development costs (76,209) - -
Purchase of intangibles (19,622) - (11,694)
----------- ----------- ------------
Net cash flow used in from investing
activities (155,721) (30,290) (285,446)
----------- ----------- ------------
Cash flow from financing activities
Proceeds from issue of share capital 6,945,481 - -
Cost of share issue (1,357,845) - -
Proceeds from convertible loan
notes - 2,352,260 2,160,030
(Repayments)/proceeds from related
parties (403,523) 166,927 (10,836)
Interest paid on borrowings (20,200) (22,819) (50,097)
Principal paid on lease liabilities (82,874) (61,131) (147,976)
Interest paid on lease liabilities (11,068) (21,665) (38,862)
----------- ----------- ------------
Net cash generated from financing
activities 5,069,971 2,413,572 1,912,259
----------- ----------- ------------
Increase/(decrease) in cash and
cash equivalents 3,390,723 (1,179,905) (594,769)
Cash and cash equivalents at beginning
of period 1,194,440 1,739,935 1,739,935
Effect of foreign exchange rate
movements 171,763 (10,624) 49,274
----------- ----------- ------------
Cash and cash equivalents at the
end of the period 4,756,926 549,406 1,194,440
=========== =========== ============
for the interim period ended 30 June 2023
Notes to the unaudited interim report for six months ended 30
June 2023
1. General Information
Ocean Harvest Technology Plc (the "Company") is a public limited
company which is listed on the AIM Market of the London Stock
Exchange and incorporated and domiciled in the UK. Its address of
its registered office is 1650 Waterside Drive Arlington Business
Park, Theale, Reading, England, RG7 4SA. The registered number of
the Company is 13411717.
2. Basis of preparation
The condensed consolidated interim financial statements include
the results of Company and its subsidiaries ("the Group") for the
six months ended 30 June 2023 and have not been audited. These
condensed consolidated interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006.
These condensed consolidated interim financial statements have
been prepared in accordance with the AIM rules and the recognition
and measurement requirements of UK-adopted International Accounting
Standards ("UK-IAS") and adopting the accounting policies that will
be applied in the 31 December 2023 annual financial statements and
consistent with those disclosed in the AIM admission document.
These condensed consolidated financial statements should be read
in conjunction with the historical financial information contained
within the AIM admission document, which is available on the
Group's website at: www.oceanharvesttechnology.com
The Group's statutory annual financial statements for the year
ended 31 December 2022 were prepared under FRS 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland and
delivered to the Registrar of Companies. The Group's auditors
reported on these accounts and their report was unqualified, did
not draw attention to any matters by way of emphasis and did not
contain any statements under section 498 (2) or (3) of the
Companies Act 2006.
These condensed consolidated interim financial statements were
approved by the Board of Directors on 11 September 2023.
3. Accounting policies
Going concern
The Directors believe that the Group has adequate resources to
continue trading for the at least 12 months from the date of
approval of these condensed consolidated interim financial
statements. Accordingly, the Directors continue to adopt the going
concern basis of accounting in preparing these financial
statements.
Summary of significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in the financial statements disclosed in the
AIM admission document.
4. Critical accounting judgements and estimates
The preparation of the condensed consolidated interim financial
statements requires Directors to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these judgements and estimates.
In preparing these condensed consolidated interim financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
audited consolidated financial statements for inclusion in the AIM
admission document.
5. Loss per share
The calculation of basic and diluted loss per share is based
upon the loss attributable to equity holders divided by the
weighted average number of shares in issue during the period.
The loss incurred by the Group means that the effect of any
outstanding options would be anti-dilutive and is ignored for the
purposes of the diluted loss per share calculation.
Six months Six months Year ended
to 30 Jun to 31 Dec
2023 30 Jun 2022 2022
EUR EUR EUR
----------- ------------ -----------
Loss for the period from continuing
activities (2,181,986) (1,225,167) (2,835,867)
----------- ------------ -----------
Six months Six months Year ended
to 30 Jun to 30 Jun 31 Dec
2023 2022 2022
No No No
----------- ------------ -----------
Weighted average number of ordinary
shares 94,073,289 63,999,883 63,999,883
----------- ------------ -----------
Six months Six months Year ended
to 30 Jun to 30 Jun 31 Dec
2023 2022 2022
EUR EUR EUR
----------- ------------ -----------
Basic and diluted loss per share (0.023) (0.019) (0.044)
=========== ============ ===========
6. Revenue
All of the Group's revenue was generated from the sale of goods
and was recognised at a point in time (rather than over time). The
Group considers the control over goods is transferred to the
customer at the point of shipment and recognises revenue at this
point in time.
Six months Year ended
to Six months 31 Dec 2022
30 Jun to
2023 30 Jun 2022
EUR EUR EUR
---------- ------------- -------------
Product revenue 1,576,332 951,913 2,513,068
Other revenue 177,478 278,978 495,227
---------- ------------- -------------
Total revenue 1,753,810 1,230,891 3,008,295
---------- ------------- -------------
7. Intangible assets
Patents Development
and licenses costs Total
EUR EUR EUR
Cost
At 1 January 2023 29,696 - 29,696
Additions 19,622 76,209 95,831
------------- ----------- -------
At 30 June 2023 49,318 76,209 125,527
------------- ----------- -------
Amortisation
At 1 January 2023 9,079 - 9,079
Charge for the period 2,226 4,259 6,485
------------- ----------- -------
At 30 June 2023 11,305 4,259 15,564
------------- ----------- -------
Net book
------------- ----------- -------
At 30 June 2023 38,013 71,950 109,963
------------- ----------- -------
At 31 December 2022 20,617 - 20,617
------------- ----------- -------
Development costs are internally generated intangible assets
associated with the development of Group's products.
8. Trade and other receivables
Due within one year 30-Jun-23 30-Jun-22 31 Dec 2022
EUR EUR EUR
---------- ---------- -------------
Trade receivables 957,444 941,595 915,912
---------- ---------- -------------
Other receivables 195,000 133,607 218,830
---------- ---------- -------------
Prepayments 138,262 98,098 116,285
---------- ---------- -------------
Cash in transit 2,352,260
---------- ---------- -------------
Total trade and other receivables 1,290,706 3,525,560 1,251,027
========== ========== =============
Trade receivables are amounts due from customers for services
performed in the ordinary course of business. The Group negotiates
the terms and payment conditions with each customer separately. The
amounts due from customers are generally due for settlement within
45 days, but the Group does offer extended credit terms to certain
customers. For new customers, the Group adopts a policy whereby 50%
of the payment is due before fulfilment of any order. Any amounts
received in advance are held as a contract liability and recognised
in revenue on dispatch.
The carrying amount of trade and other receivables approximates
fair value. Other receivables include deposits and VAT due.
Cash in transit relates to convertible loan note proceeds not
yet received into the Company's UK bank account.
9. Share capital and share premium
Number of Share capital Share premium Total
Ordinary Shares
No EUR EUR EUR
----------------- -------------- -------------- -----------
As at 1 January
2023 63,999,613 761,448 - 761,448
Share placing 37,500,000 434,093 6,511,388 6,945,481
Conversion of convertible
loan notes 24,356,084 281,941 2,220,6 58 2, 502,599
(603,96
Issue costs - - (603,96 0) 0)
As at 30 June
2023 125,855,697 1,477,482 8,12 8,086 9, 605,568
================= ============== ============== ===========
On 4 April 2023, the entire issued share capital of the Company
was admitted to trading on AIM and the Company successfully raised
GBP6,000,000 (EUR6,945,481) gross proceeds by placing 37,500,000
new Ordinary Shares at 16p per share. As part of the admission, the
convertible loan notes converted to 24,356,084 ordinary shares.
Further details on the conversion can be found in note 11.
10. Share-based payment schemes
The Group operates two employee share option schemes that are
accounted for as equity-settled share-based payments. The total
charge for the ended 30 June 2023 in respect of the two options
schemes was EUR96,950 and was recognised in profit or loss.
11. Convertible loan notes
30-Jun-23 30-Jun-22 31 Dec 2022
EUR EUR EUR
----------- ----------- -------------
2022 Redeemable Convertible
Loan - - 2,285,030
----------- ----------- -------------
Total Convertible loan notes - - 2,285,030
=========== =========== =============
In June 2022, the Group issued GBP2,025,000 (EUR2,352,260 on
conversion) of convertible loan notes ("CLNs") to existing
shareholders in order to fund the continuing operations and
development activities of the Group in advance of the Company's
listing.
The CLNs accrued interest on the principal amount at 10% per
annum from the date on which the CLN are issued up to and including
the 31 December 2022 and 6% per annum until the date at which the
CLNs were converted. Up to the point of conversion, the total
interest accrued was EUR158,499 (GBP136,923).
The CLN's converted into 24,356,084 fully paid shares in the
Company upon admission to trading on AIM on 4 April 2023 at a
discount of 30% and 45% to the issue price.
12. Borrowings
30-Jun-23 30-Jun-22 31 Dec 2022
EUR EUR EUR
----------- ---------- -------------
Current
----------- -------------
Amounts due to Heaton Holdings
Limited - 581,286 403,523
----------- ---------- -------------
Total borrowings - 581,286 403,523
=========== ========== =============
Related party loans
The Group had a working capital loan with Heaton Holdings
Limited, a related party in which Stuart Waring is a director.
Interest was charged at 10 per cent per annum upon amounts drawn
down. The loan was secured by a fixed charge over the Group's
assets.
During the period to 30 June 2023 the full balance of the loan
was repaid to Heaton Holdings Limited.
13. Significant events after the reporting date
There have been no significant events to report since 30 June
2023 and the date of approving this report on 11 September 2023
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END
IR FFFEIAIILLIV
(END) Dow Jones Newswires
September 12, 2023 02:00 ET (06:00 GMT)
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