TIDMWPHO
RNS Number : 4425J
Windar Photonics PLC
22 December 2020
22 December 2020
Windar Photonics plc
("Windar" or the "Company")
Further Issue of Equity
Windar Photonics plc (AIM: WPHO), the technology group that has
developed a cost efficient and innovative LiDAR wind sensor for use
on electricity generating wind turbines, announces that, further to
the announcement on 21 December 2020, it has raised a further
GBP50,000 (before expenses) (the "Subscription") through the issue
of 444,444 ordinary shares of 1 pence each in the Company
("Subscription Shares") to an existing shareholder at 11.25 pence
per share (the "Issue Price") to satisfy additional, late demand,
taking the total amount raised to GBP545,000 (before expenses).
The Issue Price represents the mid-market closing price of 11.25
pence on 18 December 2020. The Subscription is not being
underwritten and is conditional only on admission of the
Subscription Shares to trading on AIM.
Application has been made to the London Stock Exchange for the
Subscription Shares to be admitted to trading on AIM and it is
expected that such Admission will occur at 8.00 a.m. on Tuesday, 29
December 2020. The Subscription Shares will be issued and credited
as fully paid and will rank pari passu in all respects with the
existing ordinary shares of 1 pence each of the Company ("Ordinary
Shares").
Following Admission, the Company will therefore have 54,595,524
Ordinary Shares in issue, none of which will be held in treasury.
This number may be used by shareholders in Windar as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of Windar under the FCA's Disclosure
Guidance and Transparency Rules.
For further information, please contact:
Windar Photonics plc Tel: +45 21689476
Jørgen Korsgaard Jensen, CEO
Cenkos Securities plc (Nomad & Broker) Tel: 0131 220 6939
Neil McDonald / Pete Lynch
Notes to Editors:
Windar Photonics is a technology group that develops
cost-efficient and innovative Light Detection and Ranging ("LiDAR")
optimisation systems for use on electricity generating wind
turbines. LiDAR wind sensors in general are designed to remotely
measure wind speed and direction.
http://investor.windarphotonics.com
Chairman's Statement
As outlined in the June trading update, 2019 was a difficult
year for Windar and the Company generated revenue of EUR1.2
million, a reduction of 66% compared to 2018 (EUR3.5 million). This
decline is mostly attributable to operations in the retro-fit
market whilst, more positively, sales in the OEM market were
relatively flat year-on-year. In particular, revenues were impacted
in 2019 as a result of delays and postponements of projects into
2020, leading to an increased EBITDA loss of EUR2.8 million (2018:
loss of EUR0.4 million).
However, the management team is confident that the order book,
whilst delayed in delivery, will support the business going forward
and there are encouraging signs that the OEM market is now starting
to adopt integration of Lidar systems for control purposes,
illustrated with the recently obtained OEM orders received in 2020
and ongoing test projects.
The retro-fit market operations were expected to develop through
2019 with the end user projects in the Asian region and the growth
outside this region as a result of our distribution agreement with
Vestas. Unfortunately, delays and postponements within the Asian
region impacted our development and this has been compounded by a
slower than anticipated build up in activity through the Vestas
distribution agreement.
The Company continues to focus on becoming the world's leading
LiDAR group for wind optimisation. Part of this strategy is a
continued effort to optimise the product suite, whilst continuing
our efforts to maintain cost leadership within the industry. In
2019 we were able to reduce our average production costs by around
15% and we expect to see a continued cost reduction in 2020.
In addition to the continued cost optimisation programme, the
Company did enter two major development projects, partly funded by
Eurostar, the Energy Technology Development and Demonstration
Program. The two projects are focused on further enhancing our
WindVision products for which OEMs form the target market.
Alongside the involvement of Windar and the Danish Technical
University, these projects include several of the major European
and Asian wind turbine manufactures.
Whilst we continue to believe that our WindVision(TM) product
offering to the OEM market will contribute substantial growth in
the coming years, the Company has evaluated the product offerings
to the retro-fit markets with the view of establishing a more
streamlined future growth path within these markets. Based on these
evaluations, the Company has decided to launch a new service
offering - Lidar as a Service ("LaaS") - to the retro-fit markets
generating more predictable recurring revenues rather than one-off
sales. This will be a cloud-based pay per use service, sold by
distributors such as larger wind turbine service companies. For
this new business, Windar has developed a new self-contained Lidar
unit connected to our central analysing control centre in
Copenhagen. The LaaS business unit is expected to generate first
revenue in 2020 and initial indications of interest provide the
board with confidence that this could provide a step change in
Windar's financial performance.
Financial Overview
Revenue during the year declined 66% to EUR1.2 million (2018:
EUR3.5 million). Gross profit was down 47% (2018: 50%) to EUR0.5
million (2018: EUR1.8 million).
Net loss for the year before taxes increased to EUR3.3 million
from EUR0.9 million, which included depreciation, amortisation and
warrant costs of EUR0.3 million (2018: EUR0.3 million). Among other
reasons, but also due to the Covid-19 situation, the Company has
experienced problems collecting outstanding receivables in Asia and
due to the ongoing uncertainties, the board has decided that it is
prudent to make a 100% provision for these outstanding receivables
at the end of 2019 of EUR0.8 million. However, the board considers
this an absolutely worst-case outcome and do expect to recover at
least some of these receivables.
The Group held cash balances at the end of the year of EUR0.8
million (2018: EUR1.7 million) excluding restricted cash balances
of EURNil (2018: EUR0.5 million).
Trade receivables were EUR0.1 million (2018: EUR0.6 million),
reflecting the impact of the abovementioned provision.
The Group has capitalised its continued cost of investment in
technology during the year. This amounts to EUR0.5 million in 2019
(2018: EUR0.4 million) before grants of EUR0.1 million (2018:
EUR0.1 million).
During the year, the Group raised EUR1.6 million before expenses
through the issue of share capital.
Outlook
After many years of test projects, it has been encouraging that,
for the first year ever in our history, in 2020 the OEM market
segment has now overtaken orders and revenue streams from the
retro-fit market in both units and value. However, following the
disappointing results in 2019, the Company has proactively changed
the distribution network set-up in Asia in 2020, putting agreements
in place that we believe could bring significant additional growth
to the future orders and revenue streams.
Despite these encouraging developments, 2020 has also seen
continued disruptions and delivery postponements, primarily due to
the ongoing Covid-19 situation and the Company has also had
difficulties in collecting certain outstanding receivables in Asia.
Due to various quarantine rules and traveling restrictions, our
installation process for products in the field has been
particularly affected. As a consequence, parts of order intakes
initially planned for delivery in 2020 are now expected to be
delivered in 2021. Despite these challenges we still expect to see
revenue in 2020 marginally increase compared to the disappointing
result in 2019.
The factors outlined above have meant that the Company's cash
flow situation has been negatively impacted and cash management is
a critical consideration for the management team and is under
active review. The Company was able to continue the production and
the assembly line in Copenhagen throughout most of the first half
of 2020, notwithstanding the impact of Covid-19. This has resulted
in the Company being well positioned to satisfy the revised order
delivery schedules but has also resulted in the cash flow position
being under stress until payment for these deliveries is received.
However, management believe that there are a number of actions
available to them in order to manage the cash position even
considering the current Covid-19 situation.
The Board is actively considering the alternative financing
arrangements available to the Company, both to address the
short-term working capital issues as a result of the various
factors outlined above and to provide the longer-term liquidity
required to allow the Company to adjust to longer order and
delivery cycles. To this end, I am pleased to confirm that the
company has agreed for a Covid-19 loan of EUR0.4 million from,
Vækstfonden, the Danish Growth Fund and the postponement of
repayments totalling EUR0.15 million due in 2021 in respect of the
existing Growth Fund loan until the second part of 2025.
Despite the various challenges the Company is facing, our
R&D activities remain an important part of our business and the
next generation of both the WindVision(TM) and WindEye(TM) products
are expected to be released at the end of 2020. Besides many new
advanced functionalities, an important feature is to drive the unit
costs down by approximately 25% compared to current systems.
Overall, our business strategy for the remainder of 2020 and
2021 is based on additional and substantial cost reduction of our
products, reduction of staff and the development of the LaaS
business model, which we expect will pave the way for a
substantially improved financial performance. We believe that the
implementation of this strategy will position the Company to take
advantage of opportunities arising in the future. In particular,
the establishment of the LaaS recurring revenue model will provide
further stability to the financial performance of the business
going forward and position the Company to take advantage of
opportunities available in the market.
Positively, the total order inflow in 2020 has been encouraging
at EUR2.9 million contractually for delivery in 2020. However, due
to the ongoing Covid-19 pandemic, the Board expects only to convert
approximately EUR1.3 million of these orders into realised revenue
in 2020 with the remaining EUR1.6 million of the order back-log to
be carried into 2021. The Board believe that this order book and
outstanding project and customer pipeline stands the Company in a
good position moving forward.
In these challenging times I would like to take the opportunity
to thank the management and staff for their efforts in 2019.
BY ORDER OF THE BOARD ON November 13, 2020
Johan Blach Petersen
Chairman
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
Note
Revenue from contracts with customers 4 1,177,897 3,499,867
Cost of goods sold (629,560) (1,744,571)
Gross profit 548,337 1,755,296
Administrative expenses (3,680,990) (2,391,798)
Impairment loss - (39,182)
Other operating income 32,145 32,201
----------------------------------------- ------
Loss from operations (3,100,508) (643,483)
Finance expenses 6 (190,889) (269,925)
Loss before taxation (3,291,397) (913,408)
Taxation 7 212,488 120,436
Loss for the year attributable to
the ordinary equity holders of Windar
Photonics Plc (3,078,909) (792,972)
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Exchange gains/(losses) arising
on translation of foreign operations 3,085 (2,125)
----------------------------------------- ------
Total comprehensive loss for the
year attributable to the ordinary
equity holders of Windar Photonics
Plc (3,075,824) (795,097)
============= =========================
Loss per share attributable to the
ordinary equity holders of Windar
Photonics Plc
Basic and diluted, cents per share 8 (6.7) (1.8)
========================================= ====== ============= =========================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2019
31 December 31 December
2019 2018
EUR EUR
Note
Assets
Non-current assets
Intangible assets 10 1,192,607 982,888
Property, plant & equipment 11 61,800 110,788
Deposits 24,980 46,285
Total non-current assets 1,279,387 1,139,961
--------------------------------------- ------ ------------- -------------
Current assets
Inventory 12 1,019,564 726,999
Trade receivables 13 111,703 638,138
Other receivables 13 84,305 166,264
Tax credit receivables 13 212,428 120,209
Prepayments 44,857 83,763
Restricted cash and cash equivalents 14 - 518,138
Cash and cash equivalents 14 763,024 1,721,803
Total current assets 2,235,881 3,975,314
--------------------------------------- ------ ------------- -------------
Total assets 3,515,268 5,115,275
--------------------------------------- ------ ------------- -------------
Equity
Share capital 18 608,689 560,859
Share premium 18 13,692,119 12,558,434
Merger reserve 18 2,910,866 2,910,866
Foreign currency reserve 18 (18,630) (21,715)
Retained earnings 18 (16,338,796) (13,287,757)
Total equity 854,248 2,720,687
--------------------------------------- ------ ------------- -------------
Non-current liabilities
Warranty provisions 20 61,170 78,422
Loans 17 5,174 1,135,744
--------------------------------------- ------ ------------- -------------
Total non-current liabilities 66,344 1,214,166
Current liabilities
Trade payables 16 1,045,792 492,822
Other payables and accruals 16 211,879 588,456
Contract liabilities 16 69,954 83,169
Invoice discounting 16 1,992 10,735
Loans 16 1,265,059 5,240
------------- -------------
Total current liabilities 2,594,676 1,180,422
Total liabilities 2,661,020 2,394,588
--------------------------------------- ------ ------------- -------------
Total equity and liabilities 3,515,268 5,115,275
--------------------------------------- ------ ------------- -------------
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER
2019
31 December 31 December
2019 2018
EUR EUR
Note
Assets
Non-current assets
Investments in subsidiaries 519,897 10,733,683
Total non-current assets 519,897 10,733,683
------------------------------- ----- ------------- ------------
Current assets
Other receivables 13 11,790 12,703
Prepayments 26,599 23,857
Intragroup receivables 13 43,088 974,624
Cash and cash equivalents 14 521,713 221,540
Total current assets 603,190 1,232,724
------------------------------- ----- ------------- ------------
Total assets 1,123,087 11,966,407
------------------------------- ----- ------------- ------------
Equity
Share capital 18 608,689 560,859
Share premium 18 13,692,119 12,558,434
Merger reserve 18 658,279 658,279
Foreign currency reserve 18 (7,746) (7,746)
Retained earnings 18 (14,046,739) (1,891,110)
Total equity 904,602 11,878,716
------------------------------- ----- ------------- ------------
Current liabilities
Trade payables 16 198,485 67,691
Other payables and accruals 16 20,000 20,000
Total liabilities 218,485 87,691
------------------------------- ----- ------------- ------------
Total equity and liabilities 1,123,087 11,966,407
------------------------------- ----- ------------- ------------
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEARED 31 DECEMBER
2019
Year ended Year ended
31 December 31 December
2019 2018
Notes EUR EUR
Loss for the period before taxation (3,291,397) (913,408)
Adjustments for:
Finance expenses 6 190,889 269,925
Amortisation 267,317 189,557
Depreciation 52,411 64,078
Received tax credit 120,186 66,095
Foreign exchange losses 3,085 (84,759)
Share option and warrant costs 27,868 26,443
-------------------------------------- ------ ------------- -------------
(2,629,641) (382,069)
Movements in working capital
Changes in inventory (292,565) 12,611
Changes in receivables 144,164 (285,731)
Changes in prepayments 38,905 -
Changes in deposits 21,305 -
Changes in trade payables 552,426 (552,147)
Changes in deferred revenue (13,214) 76,453
Changes in warranty provisions 20 (17,252) 6,218
Changes in other payables and
provisions 447,972 263,442
Cash flow from operations (1,747,900) (861,223)
-------------------------------------- ------ ------------- -------------
Investing activities
Payments for intangible assets 10 (528,278) (415,456)
Payments for tangible assets 11 (3,427) (68,125)
Grants received 10 50,824 108,779
-------------------------------------- ------ ------------- -------------
Cash flow from investing activities (480,881) (374,802)
-------------------------------------- ------ ------------- -------------
Financing activities
Proceeds from issue of share
capital 1,315,342 2,500,877
Costs associated with the issue
of share capital (133,827) (193,199)
Reduction from invoice discounting (8,743) (110,474)
(Decrease)/Increase in restricted
cash balances 158,138 (283,446)
Repayment of loans (5,240) (4,579)
Interest paid (55,878) (66,537)
Cash flow from financing activities 1,269,792 1,842,642
-------------------------------------- ------ ------------- -------------
Net increase/(decrease) in cash
and cash equivalents (958,989) 606,617
Exchange differences 210 (1,317)
Cash and cash equivalents at
the beginning of the year 1,721,803 1,116,503
Cash and cash equivalents at
the end of the year 14 763,024 1,721,803
-------------------------------------- ------ ------------- -------------
COMPANY CASH FLOW STATEMENT FOR THE YEARED 31 DECEMBER 2019
Year ended Year ended
31 December 31 December
Notes 2019 2018
EUR EUR
Loss for the period before taxation (12,183,497) (284,906)
Adjustments for:
Finance Income (30,953) (18,065)
Write down of investment in
subsidiary 11,887,213 -
Share option and warrant costs 27,868 26,443
-------------------------------------- ------ ------------- -------------
(299,369) (276,528)
Movements in working capital
Changes in receivables 913 (523)
Changes in prepayments (2,743) 647
Changes in loans to subsidiary
entity 962,489 (680,259)
Changes in trade payables 130,795 28,970
Changes in other payables and
provisions - -
Cash flow from operations 792,085 (927,693)
-------------------------------------- ------ ------------- -------------
Investing activities
Additional investment in subsidiary
undertaking (1,673,427) (1,339,172)
Cash flow from investing activities (1,673,427) (1,339,172)
-------------------------------------- ------ ------------- -------------
Financing activities
Proceeds from issue of share
capital 1,315,342 2,500,877
Costs associated with the issue
of share capital (133,827) (193,199)
Cash flow from financing activities 1,181,515 2,307,678
-------------------------------------- ------ ------------- -------------
Net decrease in cash and cash
equivalents 300,173 40,813
Cash and cash equivalents at
the beginning of the year 221,540 180,727
Cash and cash equivalents at
the end of the year 14 521,713 221,540
-------------------------------------- ------ ------------- -------------
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY FOR THE
YEARED 31 DECEMBER 2019
Share Share Merger Foreign Accumulated Total
Capital Premium reserve currency Losses
reserve
EUR EUR EUR EUR EUR EUR
Group
At 1 January
2018 530,543 10,281,073 2,910,866 (19,590) (12,521,228) 1,181,664
New shares
issued 30,316 2,470,560 - - - 2,500,876
Costs
associated
with capital
raise - (193,199) - - - (193,199)
Share option
and
warrant costs - - - - 26,443 26,443
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Transaction
with
owners 30,316 2,277,361 - - 26,443 2,334,120
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Loss for the
year - - - - (792,972) (792,972)
Other
comprehensive
gains - - - (2,125) - (2,125)
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Total
comprehensive
loss - - - (2,125) (792,972) (795,097)
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
At 31 December
2018 560,859 12,558,434 2,910,866 (21,715) (13,287,757) 2,720,687
New shares
issued 47,830 1,267,512 - - - 1,315,342
Costs
associated
with capital
raise - (133,827) - - - (133,827)
Share option
and
warrant costs - - - - 27,870 27,870
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Transaction
with
owners 47,830 1,133,685 - - 27,870 1,209,385
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Loss for the
year - - - - (3,078,909) (3,078,909)
Other
comprehensive
gains/(loss) - - - 3,085 - 3,085
Total
comprehensive
loss - - - 3,085 (3,078,909) (3,075,824)
At 31 December
2019 608,689 13,692,119 2,910,866 (18,630) (16,338,796) 854,248
Company
At 1 January
2018 530,543 10,281,073 658,279 (7,746) (1,632,648) 9,829,501
New shares
issued 30,316 2,470,560 - - - 2,500,876
Costs
associated
with capital
raise - (193,199) - - - (193,199)
Share option
and
warrant costs - - - - 26,443 26,443
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Transaction
with
owners 30,316 2,277,361 - - 26,443 2,334,120
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Loss for the
year - - - - (284,905) (284,905)
Total
comprehensive
loss - - - - (284,905) (284,905)
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
At 31 December
2018 560,859 12,558,434 658,279 (7,746) (1,891,110) 11,878,716
New shares
issued 47,830 1,267,512 - - - 1,315,342
Costs
associated
with capital
raise - (133,827) - - - (133,827)
Share option
and
warrant costs - - - - 27,868 27,868
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Transaction
with
owners 47,830 1,133,685 - - 27,868 1,209,383
----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- -----------------------------------------
Loss for the
year - - - - (12,183,497) (12,183,497)
Total
comprehensive
loss - - - - (12,183,497) (12,183,497)
At 31
December
2019 608,689 13,692,119 658,279 (7,746) (14,046,739) 904,602
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER
2018
1. General information
The Company is a public limited company domiciled in the United
Kingdom and incorporated under registered number 09024532 in
England and Wales. The Company's registered office is 3 More London
Riverside, London, SE1 2AQ.
The Group was formed when the Company acquired on 29 August 2014
the entire share capital of Windar Photonics A/S, a company
registered in Denmark though the issue of Ordinary Shares.
The financial information set out below does not constitute the
company's statutory accounts for 2019 or 2018. Statutory accounts
for the years ended 31 December 2019 and 31 December 2018 have been
reported on by the Independent Auditors. The Independent Auditors'
Reports on the Annual Report and Financial Statements for the years
ended 31 December 2019 and 31 December 2018 were unqualified, drew
attention to a material uncertainty related to going concern by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2018 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2019 will be delivered to the Registrar
in due course.
2. Going Concern
The consolidated financial statements have been prepared
assuming the Group will continue as a going concern. Under the
going concern assumption, an entity is anticipated to continue in
business for the foreseeable future with neither the intention nor
the necessity of liquidation, ceasing trading or seeking protection
from creditors pursuant to laws or regulations.
Based on the Group's latest trading expectations and associated
cash flow forecasts, the directors have considered the cash
requirements of the Group. The directors are confident that based
on the Group's forecasts and projections, taking account of
possible changes in trading performance, the EUR0.4m Covid loan
approved post year end and the post year end share placing which is
in progress. it is appropriate to continue to adopt the going
concern basis of accounting in preparing these financial
statements.
However, Management has noticed non-payments of customer
receivables in 2020 primarily from customers in the Asian region
due to what Management expect also to be related to the Covid-19
situation and project delays at our customer's end-user level.
Combined with the general consequences described above such
eventual non-payments illustrates the current uncertainties when
projecting a 12 months outlook.
The current cash flow estimate for the coming 12 months does
include the following important assumptions:
No cash in-flow from any of receivables written off in the 2019
accounts
Only revenue and payments from customers based upon confirmed
written contracts and agreements
Unchanged operation cost base
However, Management highlight the risk that the non-payment by
customers can have a severely negative impact both long term but
also short term.
In the event, for the reasons stated above the timing of the
forecast revenue and customer payments were not to be achieved in
the periods expected, the Group may need to seek additional funding
to cover those periods where there might be a potential
shortfall.
Management has to highlight the very high levels of
uncertainties given the various circumstances, which indicates the
existence of a material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern and
therefore it may be unable to realise its assets and discharge its
liabilities in the normal course of business. The financial
statements do not include the adjustments that would result if the
Group was unable to continue as a going concern.
Post year end, Management has actively sought alternative
financing arrangements due primarily to the Covid pandemic
situation, both to address the potential short-term working capital
issues and to provide the longer-term liquidity required to allow
the Company to adjust to longer order and delivery cycles.
Consequently, the Company has been approved for a Covid-19 loan
from the Danish Growth Fund for the amount of EUR0.4 million and
postponements of repayments on the existing Growth Fund loan in
2021 of EUR0.15 million where repayments will now commence from
January 2022. Management has further initiated a process of
undertaking a share placing of GBP0.4m (before expenses) which is
subject to shareholder approval and certain events or
conditions.
3. Basis of preparation
The consolidated financial statements comprise the consolidated
financial information of the Group as at 31 December 2019 and are
prepared under the historic cost convention, except for the
following:
-- share based payments and share option and warrant costs
The principal accounting policies adopted in the preparation of
the financial information are set out below.
The financial statements have been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively "IFRSs")
issued by the International Accounting Standards Board (IASB) as
adopted by the European Union ("adopted IFRSs").
The acquisition of the subsidiary in 2014 was deemed to be a
business combination under common control as the ultimate control
before and after the acquisition was the same. As a result, the
transaction is outside the scope of IFRS 3 and has been included
under the principles of merger accounting by reference to UK
GAAP.
4. Revenue
Revenue from contracts with Year ended Year ended
customers: 31 December 31 December
2019 2018
EUR EUR
Sale of product and installation 1,129,255 3,492,775
Rendering of services 48,642 7,092
------------- -------------
Revenue 1,177,897 3,499,867
============= =============
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is
as follows:
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
WindEye(TM) 1,070,231 3,272,525
WindVision(TM) 59,018 220,250
------------- -------------
Rendering of services 48,648 7,092
------------- -------------
Revenue 1,177,897 3,499,867
============= =============
Deferred revenue of EUR69,954 (2018: EUR83,169) relates to
performance obligation under contracts that have not yet been
completed and are expected to be met in 2020.
5.Segment information
Operation segments are reported as reported to the chief
operation decision maker.
The Group has one reportable segment being the sale of LiDAR
Wind Measurement and therefore segmental results and assets are
disclosed in the consolidated income statement and consolidated
statement of financial position.
In 2019, three customers accounted for more than 10 per cent of
the revenue each (2018: two customers). The total amount of revenue
from these customers amounted to EUR1,028,380, 88 per cent of the
total revenue (2018: EUR3,145,168 or 90 per cent of the
revenue)
Revenue by geographical location of customer:
Year Year
ended ended
31 December 31 December
2019 2018
EUR EUR
Europe 256,501 91,891
Americas - 85,437
China 919,658 3,293,434
Asia (excluding China) 1,738 29,105
Revenue 1,177,897 3,499,867
------------------------ ------------- -------------------------
Geographical information
The parent company is based in the United Kingdom. The
information for the geographical area of non-current assets is
presented for the most significant area where the Group has
operations being Denmark.
As at 31 December As at 31 December
2019 2018
EUR EUR
Denmark 1,270,753 1,170,617
1,270,753 1,170,617
------------------ ------------------
Non-current assets for this purpose consist of property, plant
and equipment and intangible assets.
6. Finance income and expense
Finance expense
Year Year
ended ended
31 December 31 December
2019 2018
EUR EUR
Foreign exchange losses (39,124) (82,634)
Interest expense on financial liabilities
measured at amortised cost (151,765) (187,291)
Finance expense (190,889) (269,925)
--------------------------------------------- -------------- ----------------
7. Income tax
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
(a) The tax credit for the year:
UK Corporation tax - -
Foreign tax credit (212,531) (120,436)
------------- -------------
Paid tax 43 -
------------- -------------
(212,488) (120,436)
------------- -------------
(b) Tax reconciliation
Loss on ordinary activities before
tax (3,291,397) (913,408)
============= =============
Loss on ordinary activities at the
UK standard rate of corporation tax
19% (2018: 19%) (625,365) (173,548)
Effects of:
Expenses non-deductible for tax purposes 3,108 14,141
Depreciation for the year (less than)/in
excess of capital allowances - (20,386)
Unrecognised tax losses 533,772 95,367
Different tax rates applied in overseas
jurisdictions (125,599) (36,010)
Exchange rate differences 1,596 -
Tax credit for the year (212,488) (120,436)
------------------------------------------------ ------------- -------------
The tax credit is recognised as 22 per cent. (2018: 22 per cent)
of the company's deficit that relates to research and development
costs. Companies in Denmark, who conduct research and development
and accordingly experience deficits can apply to the Danish tax
authorities for a payment equal to 22 per cent. (2018; 22 per cent)
of deficits relating to research and development costs up to DKK 25
million.
(c) Deferred tax - Group
In view of the tax losses carried forward and other timing
differences there is a deferred tax asset of approximately
EUR2,549,025 (2018: EUR2,100,238) which has not been recognised in
these Financial Statements, given uncertainty around timing and
availability of sufficient taxable profits in the relevant
Company.
(d) Deferred tax - Company
In view of the tax losses carried forward and other differences
there is a deferred tax asset of approximately EUR281,199 (2018:
EUR205,968) which has not been recognised in these Financial
Statements, given uncertainty around timing and availability of
future profit against which the losses will be able to be used.
All taxes recognized in the statement of Comprehensive income
are denominated in DKK.
8. Loss per share
The loss and weighted average number of ordinary shares used in
the calculation of basic loss per share are as follows:
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
Loss for the year (3,078,909) (792,972)
------------- -------------
Weighted average number of ordinary
shares for the purpose of basic earnings
per share 47,614,917 43,002,600
Basic loss and diluted, cents per
share (6.7) (1.8)
------------- -------------
There is no dilutive effect of the warrants (note 18) as the
dilution would reduce the loss per share.
9. Dividends
No dividends were proposed by the Group during the period under
review (2018: EURNil).
10. Intangible assets
Development
projects
Group EUR
Cost
-------------------------- ------------
At 1 January 2018 2,691,069
---------------------------- ------------
Additions - internally
developed 415,456
Grants received (108,779)
Exchange differences (8,651)
At 31 December 2018 2,989,095
---------------------------- ------------
Additions - internally
developed 528,277
Grants received (50,824)
Exchange differences (1,190)
---------------------------- ------------
At 31 December 2019 3,465,358
---------------------------- ------------
Accumulated amortisation
At 1 January 2018 1,822,475
---------------------------- ------------
Charge for the year 189,557
Exchange differences (5,825)
---------------------------- ------------
At 31 December 2018 2,006,207
---------------------------- ------------
Charge for the year 267,317
Exchange differences (773)
---------------------------- ------------
At 31 December 2019 2,272,751
---------------------------- ------------
Net carrying value
-------------------------- ------------
At 1 January 2018 868,594
---------------------------- ------------
At 31 December 2018 982,888
---------------------------- ------------
At 31 December 2019 1,192,607
---------------------------- ------------
The Group has received Research and Development Grants from
Energiteknologisk Udvikling og Demonstration Projekt of EUR81,216
(2018: EUR108,779) in respect of the capitalised research and
development. At the end of the year a new EUDP project was granted
in the amount of EUR508,722 which can be claimed in the coming
three years (2018: EURNil).
The company's development projects relate to the development of
improved performance and functionality, improved components etc. in
the company's products.
Measurement of the development projects are based on realization
of the company's business plan and budgets, particularly
realization of expected growth in revenue.
11. Property, plant & equipment
Plant and
equipment
Group EUR
Cost
-------------------------- -----------
At 1 January 2018 294,048
---------------------------- -----------
Additions 68,125
Disposed (143,069)
Exchange differences (763)
At 31 December 2018 218,341
Additions 3,427
Disposed -
Exchange differences (79)
---------------------------- -----------
At 31 December 2019 221,689
---------------------------- -----------
Accumulated depreciation
At 1 January 2018 186,964
---------------------------- -----------
Charge for the year 64,078
Disposed (143,069)
Exchange differences (420)
At 31 December 2018 107,553
Charge for the year 52,411
Disposed -
Exchange differences (75)
---------------------------- -----------
At 31 December 2019 159,889
---------------------------- -----------
Net carrying value
-------------------------- -----------
At 1 January 2018 107,084
---------------------------- -----------
At 31 December 2018 110,788
---------------------------- -----------
At 31 December 2019 61,800
---------------------------- -----------
12. Inventory
Group
As at As at
31 December 31 December
2019 2018
EUR EUR
Raw material 417,481 364,090
Work in progress 392,374 311,420
Finished goods 209,709 51,489
------------------ ------------- -------------
Inventory 1,019,564 726,999
------------------ ------------- -------------
The cost of inventory sold and recognised as an expense during
the year was EUR639,555 (2018: EUR1,268,040).
13. Trade and other receivables
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2019 2018 2019 2018
EUR EUR EUR EUR
Trade receivables 623,458 685,679 - -
-------------------------------- ------------- ------------- ------------- -------------
Less; provision for impairment
of trade receivables (511,755) (47,541) - -
Trade receivables - net 111,703 638,138 - -
Receivables from related
parties - - 43,088 974,624
-------------------------------- ------------- ------------- ------------- -------------
Total financial assets
other than cash and cash
equivalents classified
at amortised costs 111,703 638,138 43,088 974,624
-------------------------------- ------------- ------------- ------------- -------------
Tax receivables 212,428 120,209 - -
Other receivables 84,305 166,264 11,790 12,703
Total other receivables 296,733 286,473 11,790 12,703
Total trade and other
receivables 408,436 924,611 54,878 987,327
-------------------------------- ------------- ------------- ------------- -------------
Classified as follows:
Current Portion 408,436 924,611 54,878 987,327
-------------------------------- ------------- ------------- ------------- -------------
At the end of 2019 the group had debtors, primarily in China,
where in 2020 there were non-payments from these customers. It has
not been possible to obtain clarification of the possibility of
collection of these receivables before approving the annual
report.
Due to the general uncertainties, Management have made the
judgement to take a worst case approach and made a full provision
with the hope that at least part of the provision can be recovered
in the future.
The carrying value of trade and other receivables classified at
amortised cost approximates fair valu e.
More than More than More than Total
30 days 60 days 120 days
past due past due past due
EUR EUR EUR EUR
Gross carrying amount 0 0 127,320 127,320
Loss provision - - (93,694) (93,694)
Net carrying amount 0 0 33,326 33,326
Trade and other receivables represent financial assets and are
considered for impairment on an expected credit loss model. These
assets have historically had immaterial levels of bad debt and are
with credit worthy customers, and as the Group trades with a
concentrated number of customers and utilises export credit
facilities the Group has reviewed trade receivables on an
individual basis. Additionally, the Group continues to trade with
the same customers and therefore the future expected credit losses
have been considered in line with the past performance of the
customers in the recovery of their receivables. The implementation
of IFRS 9 has therefore not resulted in a change to the impairment
provision in the current or prior year.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses using a lifetime expected credit loss
provision for trade receivables. The expected loss rates are based
on the Group's historical credit losses experienced over the three
year period prior to the period end. The historical loss rates are
then adjusted for current and forward-looking information on
factors affecting the Group's customers including the area of
operations of those debtors and the advancing market for wind power
and the Group's products. The assessment of the expected credit
risk for the year has not increased, when looking at the factors
affecting the risk noted above.
There is no material difference between the net book value and
the fair values of trade and other receivables due to their
short-term nature.
Other classes of financial assets included within trade and
other receivables do not contain impaired assets.
Of the net trade receivables EUR49,750 (2018: EUR13,096) was
pledged as security for the invoice discounting facility. The Group
is committed to underwrite any of the debts transferred and
therefore continues to recognise the debts sold within trade
receivables until the debtors repay or default. Since the trade
receivables continue to be recognised, the business model of the
Group is not affected. The proceeds from transferring the debts of
are included in other financial liabilities until the debts are
collected or the Group makes good any losses incurred by the
service provider.
14. Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash
equivalents comprise the following balances with original maturity
less than 90 days:
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2019 2018 2019 2018
EUR EUR EUR EUR
------------- ------------- ------------- -------------
Cash at bank 763,024 1,721,803 521,713 221,540
------------- ------------- ------------- -------------
The Group has restricted cash balances of EUR360,000 (2018: EUR
518,138) but a provision of the full amount is made at the end of
the year due to no payment from the customer in 2020. The
restricted cash balances relate to transactions entered into
between the Group and external financial parties. When EKF has
credit approved a customer EKF, issues a non-recourse payment
guarantee to an external financial party typically of 80% to 90% of
the face value of the transaction. Upon shipment of the products
the Group then sells the invoice to the external financial party at
face value subject to depositing and pledging a cash amount equal
to the difference between the face value of the invoice and the EKF
guarantee. When the customer pays typically one year later, the
full invoice amount to the financial party, the deposit is paid in
full to the Group.
15. Notes supporting statement of cash flows
Non-current Current
loans loans and Invoice discounting Total
and borrowings borrowings EUR EUR
EUR EUR
As at 1 January 2018 1,023,809 4,579 121,208 1,149,596
Repayment of loans - (4,579) - (4,579)
Repayment of Invoice
Discounting (110,473) (110,473)
Accrued interests
on non-current loans 120,754 - 120,754
Loans and borrowings
classified as non-current
in previous period
becoming current in
this period (5,250) 5,250 - -
Foreign exchange rate
differences (3,569) (10) - (3,579)
As at 31 December
2018 1,135,744 5,240 10,735 1,151,719
---------------------------- ---------------- ------------ ---------------------- ------------
Repayment of loans - (5,240) - (5,240)
Repayment of Invoice
Discounting - - (8,743) (8,743)
Accrued interests
on non-current loans 135,011 - - 135,011
Loans and borrowings
classified as non-current
in previous period
becoming current in
this period (1,265,059) 1,265,059 - -
Foreign exchange rate
differences (522) - - (522)
---------------------------- ---------------- ------------ ---------------------- ------------
As at 31 December
2019 5,174 1,265,059 1,992 1,272,225
---------------------------- ---------------- ------------ ---------------------- ------------
16. Trade and other payables
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2019 2018 2019 2018
EUR EUR EUR EUR
Invoice discounting 1,992 10,735 - -
Trade payables 1,045,792 492,822 198,485 67,691
Other payables and accruals 211,879 588,456 20,000 20,000
Current portion of Nordea
loan 1,265,059 5,240 - -
Total financial liabilities,
excluding 'non-current' 1,097,253
loans and borrowings 2,524,722 218,485 87,691
classified
as financial liabilities
measured at amortised cost
------------------------------ ------------- ----------------------------------------- ------------- -------------
Deferred revenue 69,954 83,169 - -
------------------------------ ------------- ----------------------------------------- ------------- -------------
Total trade and other
payables 2,594,676 1,180,422 218,485 87,691
------------------------------ ------------- ----------------------------------------- ------------- -------------
Classified as follows:
Current Portion 2,594,676 1,180,422 218,485 87,691
------------------------------ ------------- ----------------------------------------- ------------- -------------
The invoice discounting arrangement is secured upon the trade
debtors to which the arrangement relates.
There is no material difference between the net book value and
the fair values of current trade and other payables due to their
short-term nature.
17. Borrowings
The carrying value and fair value of the Group's borrowings are
as follows:
Group
Carrying and Fair
value
As at As at
31 December 31 December
2019 2018
Loans EUR EUR
Growth Fund 1,259,499 1,124,914
Current portion of Growth Fund (1,259,499) -
Nordea Ejendomme 10,734 16,070
Current portion of Nordea Loan (5,560) (5,240)
----------------------------------------- ------------- -------------
Total non-current financial liabilities
measured at amortised costs 5,174 1,135,744
----------------------------------------- ------------- -------------
The Growth Fund borrowing from the Danish public institution,
Vækstfonden, initially bore interest at a fixed annual rate of 12
per cent with a full bullet repayment in June 2020. As announced on
June 29, 2020 terms for the borrowing was renewed whereafter the
interest rate was reduced to 7 percent p.a. and the loan to be
repaid in equal quarterly instalments over the period from 1 July,
2021 until 1 July, 2025. The terms have been further amended in
October 2020, whereby the instalments in the second half of 2021
have been extended to the second half of 2025 whereafter the
quarterly instalments are due on 1 January 2022 until 1 January
2026.
The loan from Nordea Ejendomme is in respect of amounts included
in the fitting out of the offices in Denmark. The loan is repayable
over the 6 years and matures in November 2021 and carries a fixed
interest rate of 6 per cent.
Both loans are denominated in Danish Kroner.
The Company had no borrowings.
18. Share capital
On December 12 2019 the company issued 4,076,348 ordinary shares
of 1 pence each for a cash consideration at GBP0.275 per share. On
12 July 2018 the Company issued 2,700,000 ordinary shares of 1
pence each for cash consideration at GBP0.82 per share.
Authorised EUR Authorised EUR
2019 2019 2018 2018
Shares at beginning
of reporting period 44,508,369 560,859 41,808,369 530,543
----------------------------- ------------ --------- ----------- --------
Issue of share capital 4,076,348 47,830 2,700,000 30,316
----------------------------- ------------ --------- ----------- --------
Shares at end of reporting
period 48,584,717 608,689 44,508,369 560,859
----------------------------- ------------ --------- ----------- --------
On 3 January and 8 January in 2020 the company completed the 12
December, 2019 capital raise by issuing an additional 1,166,363
ordinary shares of 1 pence each for a cash consideration at
GBP0.275 per share.
Number of Number of
shares issued shares issued
and fully and fully
paid EUR paid EUR
2019 2019 2018 2018
Shares at 1 January
2019 44,508,369 560,859 41,808,369 530,543
----------------------- --------------- --------- --------------- ---------
Issue of shares for
cash 4,076,348 47,830 2,700,000 30,316
Shares at 31 December
2019 48,584,717 608,689 44,508,369 560,859
----------------------- --------------- --------- --------------- ---------
At 31 December 2019 the share capital comprises 49,626,080
shares of 1 pence each.
Warrants and share options
Warrants and share options are granted to Directors and
employees.
195,000 new share options or warrants were granted in 2019. The
options were issued at a strike price of GBP1 a third vesting on
each anniversary for the first three years. The options have a
10-year life. The price of the share at the time of issue was
GBP0.24. The risk-free rate was 1.15%. The expected volatility is
based on historical volatility of the AIM market over the last two
years and is estimated to be 40%.
The share options issued in 2017 are valued using the
Black-Scholes pricing model and no performance conditions are
included in the fair value calculations. The options were issued at
a strike price of GBP1 a third vesting on each anniversary for the
first three years whereafter, the options have a 10-year life. The
price of the share at the time of issue was GBP0.88. The risk-free
rate was 1.15%. The expected volatility is based on historical
volatility of the AIM market over the last two years and is
estimated to be 40%.
The average share price during the year was 50.00 pence (2018:
88.25 pence). At the year end the Company had the following
warrants and options outstanding:
Number of warrants
and options
------------------------------------
At At
31 December 31 December Exercise
price
2018 Granted Lapsed 2019 (GBP Exercise
pence) date
31/12/19
Warrants 1,520,956 - - 1,520,956 39.07 to 31/12/21
16/11/18
Options 362,500 195,000 - 557,500 100.00 to 01/03/32
1,883,456 - - 1,883,456
========== ============= =========== ======== =============
The number of options and warrants exercisable at 31 December
2019 is warrants 1,520,956 (2018: 1,520,956) and options 241,666
(2018: 120,833).
The weighted average remaining contractual life for the
options outstanding as at 31 December 2019 is 10.76 years
(2018: 11.01 years).
The warrants have a remaining life of two years (2018: 1
years).
19. Operating Leases
The total future value of the minimum lease payment is due as
follows:
2019 2018
EUR EUR
Not later than one year 75,967 64,485
Later than one year and - -
not later than five years
75,967 64,485
------- -------
All leasing commitments are in respect of property and cars
leased by the Group. The terms of property leases vary from country
to country, although they all tend to be tenant repairing with rent
reviews every 2 to 5 years. The Company has not entered any leases
in 2020 with maturity longer than 6 months.
20. Warranty provision
2019 2018
EUR EUR
Provision at the beginning
of reporting period 78,422 72,205
Provision charged to the
profit and loss account (9,995) 9,439
Utilised in year (7,240) (2,991)
Foreign exchange rate movements (196) (231)
-------- --------
61,170 78,422
-------- --------
The Group typically provides a two-year warranty period to
customers on products sold. Warranty expenses/(income) charged to
the Statement of Comprehensive Income amounted to EUR(9,995) (2018:
EUR9,439) corresponding to a warranty cost percentage of (0.4)%
(2018: 0.2%) relative to the prior two years revenue. However, d ue
to the early business stage of the Group and the uncertainty
following this the Group has adopted a policy to accrue a 4%
provision based on the prior two years deliveries calculated with
the cost of goods sold at the end of the period.
21. Related Party Transactions
Jørgen Korsgaard Jensen and Johan Blach Petersen are directors
and shareholders of Wavetouch Denmark A/S (Wavetouch) and OPDI
Technologies A/S (OPDI). Wavetouch has during the year rented
office space from Windar Photonics A/S, the amount payable during
the year to Windar was EUR32,145 (2018: EUR32,196). There were
amounts outstanding at the year end to Wavetouch EUR167,527 (2018:
EUR72,853). At the end of the year there were amounts outstanding
to OPDI of EUR Nil (2018: EUR 31,426).
Intercompany transactions
At 31 December 2019 there exist an intercompany loan
between Windar Photonics PLC and its subsidiary Windar
Photonics A/S.
Windar Photonics PLC has a receivable at EUR 43,088
(2018: EUR974,624). Interest added during 2019 amounts
to EUR35,396 (2018: EUR28,512).
The interest rate for 2019 is Libor 0.5% + 2.5% - equal
to 3% p.a. (2018: Libor 0.5% + 2.5% - equal to 3% p.a.).
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END
IOEBFLLLBLLEFBF
(END) Dow Jones Newswires
December 22, 2020 02:00 ET (07:00 GMT)
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