TIDMAURR

RNS Number : 4389N

Aurrigo International PLC

25 September 2023

25 September 2023

Aurrigo International plc

Interim results for the six months to 30 June 2023

Aurrigo International plc (AIM: AURR, the "Company" or "Aurrigo"), a leading international provider of transport technology solutions, reports its interim results for the six months to 30 June 2023 ("H1 23").

Highlights

-- Autonomous and Aviation division making good progress following the announcement in February 2023 of a strategic partnership with Changi Airport Group ("CAG")

   --      Positive performance from the Automotive division with new customers added 
   --      Acquisition of GB Wiring Systems Limited ("GB Wiring") in June 2023, integrating well 

-- Continued progress against IPO objectives, including scaling headcount to 97 at H1 23 (FY 22: 70)

-- Sunderland Advanced Mobility Shuttle ("SAMS") project and grant funding announced in February 2023

   --      Revenue growth of 35% to GBP3.1m (H1 22: GBP2.3m) 
   --      Gross profit consistent with the prior year at GBP0.7m (H1 22: GBP0.7m) 

-- Adjusted EBITDA loss of GBP1.6m (H1 22 loss: GBP0.3m), reflects the scale up of the autonomous and aviation division

   --      Cash of GBP2.8m at period end 

Post period-end

-- Collaboration with UPS to develop and pilot Auto-Cargo(R) at East Midlands Airport, with GBP483k UK Government grant announced September 2023

-- European Institute of Innovation and Technology grant of EUR275k for project to deploy Auto-Shuttle(R) in Prague announced in September 2023

-- Auto-DollyTug(R) mk3 completed its extended development and will be delivered to market during 2023

David Keene, CEO of Aurrigo International plc, commented:

"We saw good progress during the first half of the year, engaging with both new and existing customers and partners. I believe that we have now developed in the Auto-DollyTug mk3 a vehicle that will revolutionise operations at airports internationally."

"Interest from aviation organisations and airport groups in our solutions and the ability to showcase the capabilities of our technologies on the ground has been invaluable. We are now seeing an accelerated level of interest in Aurrigo's innovative aviation solutions for future deployments within Europe and North America ."

For further enquiries:

 
 Aurrigo International plc 
  David Keene, Chief Executive Officer 
  Ian Grubb, Chief Financial Officer                +44 (0)2476 635818 
 Singer Capital Markets (Nominated Adviser 
  and Sole Broker) 
  Phil Davies, Rick Thompson, Alaina Wong, 
  Jalini Kalaravy                                   +44 (0)20 7496 3000 
 
 Instinctif Partners (Financial Communications)     +44 (0)20 7457 2020 
  Rozi Morris, Tim McCall, Isadora Pegler            aurrigo@instinctif.com 
 

About Aurrigo

Aurrigo is a leading international provider of transport technology solutions. Listed on the London Stock Exchange's AIM Market (AIM: AURR) and headquartered in Coventry, UK, it designs, engineers, manufactures and supplies OEM products and autonomous vehicles to the automotive and transport industries. It is highly regarded as a specialist in autonomous and semi-autonomous technology solutions for the aviation, ground handling and cargo industries.

Aurrigo has three divisions, Automotive, Autonomous and Aviation. For more information, see www.aurrigo.com

OPERATIONAL REVIEW

Summary

The first half of this year has been one of engaging with both new and existing customers and partners, with the Autonomous and Aviation divisions working hard with strategic partners. We have continued to operate live demonstrations whilst at the same time developing the new Auto-DollyTug mk3. Our marketing efforts are leading to increasing numbers of enquiries for our automated aviation technology and good levels of industry and new customer engagement.

The Sunderland Advanced Mobility Shuttle project, announced in February 2023, is progressing on schedule, building three automated, zero-emission Auto-Shuttles mk3 in partnership with Sunderland City Council .

The Automotive division has seen good growth and this has been augmented with the Company's acquisition in June this year of GB Wiring, specialist providers of electrical wiring harnesses and assemblies for the Automotive industry.

Autonomous and Aviation

Growth drivers

Technological developments continue to advance interest in Aurrigo's Autonomous and Aviation product and services, with both global airport groups, passenger and cargo airlines expressing interest in automation. The long-term structural growth drivers which are encouraging the adoption of automation and the efficiencies it can bring are beginning to be fuelled as air traffic and passenger demand return to normal levels following the global pandemic.

Workforce shortages and costs post pandemic continue to be an issue, whist the industry at the same time remains under pressure to reduce its environmental impact. This increases the demand for efficient and sustainable vehicles, smart airport planning software and autonomous solutions.

Aurrigo is making encouraging progress in engaging with airlines and other airport groups. As well as site visits and airside demonstrations, there has also been strong engagement with potential customers at key international conferences and trade shows such as Aviation Festival Asia, Ground Handling International and the IATA Ground Handling Conference.

Meanwhile, Aurrigo continues to build on its leadership position in aviation automation by working with aviation industry regulator IATA and the UK Government's Centre for Connected and Autonomous Vehicles (" CCAV") to set industry standards for automated vehicles.

Customers and partner programmes

The formal partnership agreement with CAG announced in February 2023 is focused on the continued joint development and testing of the Auto-Dolly (R) , Auto-DollyTug (R) and Auto-Sim (R) airport simulation software platform. The development and testing of Aurrigo's autonomous vehicles at CAG is partially funded by the Civil Aviation Authority of Singapore ("CAAS") through its Aviation Development Fund ("ADF"). The ADF supports initiatives to improve productivity in the Singapore aviation sector through the use of innovative solutions.

The ability to showcase the technology to airport groups and stakeholders is proving invaluable. Potential customers are responding positively to seeing the vehicles in a live operating environment and their full range of capabilities and the potential to revolutionise operations at airports internationally.

The Sunderland SAMS project continues and Aurrigo is on schedule to deliver three automated, zero-emission Auto-Shuttle mk3's to Sunderland City Council and their transport providers in the first quarter of 2024. The success of winning this project is resulting in conversations with other local authority transport providers.

Post period-end, in September 2023, the Company announced a collaboration with UPS. The project will receive GBP482,020 in grant funding from Innovate UK and the Centre for Connected and Autonomous Vehicles ("CCAV"). The two companies will develop and pilot Aurrigo's Auto-Cargo (R) over a 14-month period from September 2023 at East Midlands Airport, the UK's second-largest cargo terminal. If successful, it will then move to real-world driverless cargo movement operations with in-service aircraft.

On 19 September 2023, Aurrigo announced another grant project win for the deployment of its Auto-Shuttle autonomous passenger transport vehicle in Prague, Czech Republic. The grant of EUR 274,820 comes from the European Institute of Innovation and Technology (EIT) and the project has started immediately.

Automotive

Demand is ahead of expectations through both new and existing customers. Additionally the acquisition of GB Wiring has contributed by diversifying the customer base into new automotive and industrial customers. The acquisition has integrated well and the Aurrigo and GB Wiring teams are working together to target new customer opportunities.

R&D

The key focus for R&D during H1 23 has been completing the development of Auto-DollyTug, an autonomous electric baggage dolly which can also pull conventional baggage trailers. The design has had significant developments which are IP-protected. The first Auto-DollyTug mk3 has completed development and is expected to be delivered to market during 2023.

People

The Company's headcount continues to grow as it delivers on its strategy to scale the business. As of June 2023, the headcount was 97 FTEs, up from 70 at the end of December 2022. This includes new hires particularly in the Autonomous and Aviation engineering team, as well as the additional staff from GB Wiring.

Staff retention is currently strong, with formalised employee engagement programmes and staff incentives in place.

Recruitment is also assisted by work experience programmes at Aurrigo's HQ in Coventry for students at local schools and colleges, alongside a formal academic placement programme with Warwick, Coventry and Aston Universities.

Aurrigo also has a formal Knowledge Transfer Partnership with Aston University, helping students and researchers apply their academic knowledge to real-world commercial projects, enhancing their experience and skills as well as their job prospects.

The Company has also signed up to introduce apprentices across the business.

Current Trading and Outlook

The second half of the year has continued to perform well for the Automotive division which currently delivers the majority of the business' revenues. The strategic growth areas of autonomous vehicles and autonomous aviation technology continue to develop significant existing and potential new customer traction. The new partnership announced recently with UPS demonstrates an important milestone of the Company's autonomous technology development.

The ongoing product trials at CAG, as part of the partnership agreement announced in February 2023, have enabled substantial technical development of the vehicles. As a result of this the project phases have been replanned to take advantage of the increased capability, which consequently means the revenue streams will now be realised in 2024 and 2025.

Following visits and live demonstrations in Singapore to a number of aviation organisations, we are now seeing an accelerated level of interest in Aurrigo's innovative aviation solutions for future deployments within Europe and North America.

FINANCIAL REVIEW

Revenue

Revenue in the period was GBP3.1m (H1 22: GBP2.3m), an increase of GBP0.8m (34.8%) compared to H1 22. This increase represents a growth in Automotive revenues, including one month's contribution from newly acquired GB Wiring. While a significant proportion of the increase derives from the Company's largest customer in the period, the addition of GB Wiring and new actively engaged customers will help to dilute customer concentration for the remainder of the year and into 2024.

Revenue from the Autonomous segment has remained consistent with H1 22 at GBP0.3m. The sale of Autonomous Passenger products and services on an enquiry basis continued through the period but accounts for a lower proportion of the segmental revenues in H1 2023 compared to H1 2022 as Aviation revenues crystalise.

Gross profit

Gross profit for the period was GBP0.7m (H1 22: GBP0.7m). Gross profit margin was 22.3% (H1 22: 32.6%) which was lower than H1 22 due in part to a change in the sales mix with the proportion of Automotive revenues increasing compared to the prior period. Incremental lower margin Automotive product revenues have added to the effect of this.

Adjusted EBITDA

Adjusted EBITDA loss increased to GBP1.6m (H1 22: GBP0.9m), representing an increase of GBP0.7m (77.8%), compared to H1 22. H1 23 reflects the Company's first interim period as a public company in which it has incurred additional governance and related costs. Increased staff recruitment, primarily within R&D and the Autonomous division have been actioned according to the objectives set out at IPO, increasing the Company's cost base in preparation for future development and marketing within Aviation.

Depreciation and amortisation

The total charge for the period was GBP0.3m (H1 22: GBP0.1m), of which GBP0.15m (H1 22: GBP0.03m) related to the amortisation of intangible assets.

Share-based payments

The total charge for the period under IFRS 2 "Share-based payments" was GBP0.1m (H1 22: GBP0m). This charge related to the awards made under the 2022 Share Option Plan established on admission on 15 September 2022.

Cashflow

The Company's cash is position GBP2.8m (H1 22: GBP0.02m). The net cash used for operating activities was GBP1.9m (H1 22: GBP0.7m) with the increase reflecting the additional costs of operating as a public company as described above. The net cash outflow includes inflows from grants of GBP0.1m in the period (H1 2022: GBP0.5m) as the Company continues to take advantage of this form of funding.

The acquisition of GB Wiring Systems Limited reduced cash in the period by GBP0.1m.

Balance Sheet

The Group had net assets of GBP6.8m as at 30 June 2023 (H1 22: GBP3.2m). Property, plant and equipment increased reflecting the renewal of property related leases, capitalised in accordance with IFRS16.

FINANCIAL STATEMENTS

Consolidated Income Statement

For the period ended 30 June 2023

 
                                             Unaudited   Unaudited        Audited 
                                     Notes    6 months    6 months           Year 
                                                 ended       ended          ended 
                                               30 June     30 June    31 December 
                                                  2023        2022           2022 
                                               GBP'000     GBP'000        GBP'000 
--------------------------------  --------  ----------  ----------  ------------- 
 
 Revenue                              4          3,083       2,275          5,302 
 Cost of sales                                 (2,397)     (1,533)        (3,483) 
                                            ----------  ----------  ------------- 
 Gross profit                                      686         742          1,819 
                                            ----------  ----------  ------------- 
 
 Other operating income                            353         139            278 
 Administrative expenses 
  including non-recurring 
  expenses, share based 
  payment charges, depreciation 
  and amortisation                             (3,013)     (1,253)        (4,569) 
                                            ----------  ---------- 
 Operating loss                                (1,974)       (372)        (2,472) 
                                            ----------  ----------  ------------- 
 
 Costs of admission to 
  AIM                                                -           -          1,010 
 Share based payments                              121           -            143 
 Depreciation                                      131          95            208 
 Amortisation                                      147          26            172 
                                            ----------  ----------  ------------- 
 Adjusted EBITDA *                             (1,575)       (251)          (939) 
--------------------------------  --------  ----------  ----------  ------------- 
 
 Finance income                                     49           -              2 
 Finance costs                                    (21)        (10)           (26) 
                                            ----------  ----------  ------------- 
 Loss before taxation                          (1,946)       (382)        (2,496) 
                                            ----------  ----------  ------------- 
 
 Income tax (charge)/income                       (43)          59            301 
                                            ----------  ----------  ------------- 
 Loss for the period 
  attributable to equity 
  shareholders of the parent                   (1,989)       (323)        (2,195) 
                                            ----------  ----------  ------------- 
 
 Other comprehensive income: 
  Items that will not be reclassified 
  to profit or loss 
  Currency translation differences                   6           -            (2) 
 Total other comprehensive 
  income                                             6           -            (2) 
                                            ----------  ----------  ------------- 
 
   Total comprehensive loss for 
   the period attributable to 
   equity shareholders of the 
   parent                                      (1,983)       (323)        (2,197) 
                                            ----------  ----------  ------------- 
 
 
 Basic EPS (GBP per share)            5         (0.05)      (0.27)         (0.12) 
                                            ----------  ----------  ------------- 
 
 Diluted EPS (GBP per 
  share)                              5         (0.05)      (0.27)         (0.12) 
                                            ----------  ----------  ------------- 
 
 

* Adjusted EBITDA refers to earnings before interest, tax, depreciation and amortisation and impairment. Share based payments and one-off costs of admission to the AIM are also excluded.

All results were derived from continuing operations.

Consolidated Statement of Financial Position

For the period ended 30 June 2023

 
                                            Unaudited   Unaudited        Audited 
                                              30 June     30 June    31 December 
                                    Notes        2023        2022           2022 
                                              GBP'000     GBP'000        GBP'000 
 Non-current assets 
 Intangible assets                    6         5,681       5,358          5,403 
 Goodwill                             7           122           -              - 
 Property, plant and equipment        8           721         155            306 
 Deferred tax asset                                 -         151              - 
 
 Total non-current assets                       6,524       5,664          5,709 
                                           ----------  ----------  ------------- 
 
 Current assets 
 Inventories                                      959         843            931 
 Trade and other receivables                    1,839       2,402          1,532 
 Current tax receivable                           264         268            174 
 Cash and cash equivalents                      2,797         179          5,386 
 
 Total current assets                           5,859       3,692          8,023 
                                           ----------  ----------  ------------- 
 
 Total assets                                  12,383       9,356         13,732 
                                           ----------  ----------  ------------- 
 
 Current liabilities 
 Trade and other payables                     (1,341)     (1,795)        (1,143) 
 Borrowings                                      (30)        (30)           (30) 
 Lease liabilities                              (187)       (107)           (79) 
 Deferred grant income                          (217)           -          (217) 
 Deferred consideration                          (50)           -              - 
 
 Total current liabilities                    (1,825)     (1,932)        (1,469) 
                                           ----------  ----------  ------------- 
 
 Net current assets                             4,034       1,760          6,554 
                                           ----------  ----------  ------------- 
 
 Total assets less current liabilities         10,558       7,424         12,263 
                                           ----------  ----------  ------------- 
 
 Non-current liabilities 
 Borrowings                                      (40)        (70)           (55) 
 Lease liabilities                              (383)           -          (132) 
 Deferred tax liabilities                           -       (385)              - 
 Deferred grant income                        (3,333)     (3,768)        (3,442) 
 
 Total non-current liabilities                (3,756)     (4,223)        (3,629) 
                                           ----------  ----------  ------------- 
 
 Total liabilities                            (5,581)     (6,155)        (5,098) 
                                           ----------  ----------  ------------- 
 
 Net assets                                     6,802       3,201          8,634 
                                           ----------  ----------  ------------- 
 
 Equity attributable to equity holders of 
  the Group 
 Share capital                                     83           -             83 
 Share premium account                          7,103           -          7,103 
 Share option reserve                             264           -            143 
 Retained earnings                              (648)       3,201          1,305 
 
 Total equity                                   6,802       3,201          8,634 
                                           ----------  ----------  ------------- 
 
 

Consolidated Statement of Changes in Equity

For the period ended 30 June 2023

 
                                              Share       Share      Share    Retained     Total equity 
                                            capital     Premium     option    earnings     attributable 
                                                        account    reserve                    to owners 
                                                                                          of the parent 
                                            GBP'000     GBP'000    GBP'000     GBP'000          GBP'000 
 
 At 1 January 2022 (audited)                      -           -          -       3,524            3,524 
 Loss for the six month period 
  ended 30 June 2022                              -           -          -       (323)        (177,228) 
 
 At 30 June 2022 (unaudited)                      -           -          -       3,201            3,201 
                                          ---------  ----------  ---------  ----------  --------------- 
 
 Loss for the six month period 
  ended 31 December 2022                          -           -          -     (1,872)          (1,872) 
 Currency translation differences                 -           -          -         (2)              (2) 
 
  Transactions with owners in their 
   capacity as owners: 
   Issue of share capital                        33       8,133          -           -            8,166 
   Costs of issue set against share 
   premium                                        -     (1,030)          -           -          (1,030) 
   Share option expense                           -           -        143           -              143 
   Deferred tax on share based payment 
   transactions                                   -           -          -          28               28 
   Issue of share capital from reserves          50           -          -        (50)                - 
 
 At 31 December 2022 (audited)                   83       7,103        143       1,305            8,634 
                                          ---------  ----------  ---------  ----------  --------------- 
 
 Loss for the six month period 
  ended 30 June 2023                              -           -          -     (1,989)          (1,989) 
 Currency translation differences                 -           -          -           6                6 
 Transactions with owners in their 
  capacity as owners: 
  Share option expense                            -           -        121           -              121 
   Deferred tax on share based payment 
    transactions                                  -           -          -          30               30 
 
 At 30 June 2023 (unaudited)                     83       7,103        264       (648)            6,802 
                                          ---------  ----------  ---------  ----------  --------------- 
 
 

Consolidated Statement of Cash Flows

For the period ended 30 June 2023

 
                                                 Unaudited       Unaudited         Audited 
                                                  6 months        6 months            Year 
                                                     ended           ended           ended 
                                                   30 June         30 June     31 December 
                                                      2023            2022            2022 
                                                   GBP'000         GBP'000         GBP'000 
 
 Cash flow from operating activities 
 Loss for the period                               (1,989)           (323)         (2,195) 
 Adjustments for: 
 Tax charge/(credit)                                    43            (59)           (301) 
 Finance costs                                          21               9              26 
 Investment income                                    (49)               -             (2) 
 RDEC grant income                                   (103)               -           (107) 
 Amortisation of intangible assets                     131              26             172 
  Depreciation of tangible assets                      147              95             208 
 Equity settled share based payment 
  expense                                              121               -             143 
                                                ----------  --------------  -------------- 
                                                   (1,678)           (252)         (2,056) 
 Changes in working capital: 
 Increase in inventories                              (28)            (65)           (153) 
 Increase in trade and other receivables             (307)            (15)           (367) 
 Increase/(decrease) in trade 
  and other payables                                   163           (366)              58 
                                                ----------  --------------  -------------- 
 Cash used in operations                           (1,850)           (698)         (2,518) 
 
 Interest paid                                         (4)               -             (2) 
 Income taxes refunded                                   -               1             238 
 
 Net cash used in operating activities             (1,854)           (697)         (2,282) 
                                                ----------  --------------  -------------- 
 
 Cash flow from investing activities 
 Capitalised development costs                       (395)           (982)         (1,155) 
 Grant income on capitalised research 
  and development                                        -             826             715 
 Purchase of intangible assets                        (30)             (6)            (24) 
 Purchase of property, plant and 
  equipment                                           (92)             (4)            (62) 
 Acquisition of subsidiary (net 
  of cash acquired)                                  (138)               -               - 
 Interest received                                      49               4               2 
                                                ----------  --------------  -------------- 
 Net cash used in investing activities               (606)           (162)           (524) 
                                                ----------  --------------  -------------- 
 
 Cash flow from financing activities 
 Interest paid                                        (21)            (10)            (21) 
 (Costs of) / proceeds from issue 
  of shares                                              -           (146)           7,136 
 Repayments of bank loans and 
  borrowings                                          (15)            (15)            (30) 
 Payment of lease liabilities                         (91)            (83)           (182) 
 
 Net cash (used in) / generated 
  from financing activities                          (127)           (254)           6,903 
                                                ----------  --------------  -------------- 
 
 (Decrease) / increase in cash 
  and cash equivalents                             (2,587)         (1,113)           4,097 
 
 Cash and cash equivalents at 
  beginning of the period                            5,386           1,292           1,290 
 Effect of foreign exchange rates                      (2)               -             (1) 
 
 Cash and cash equivalents at 
  end of period                                      2,797             179           5,386 
                                                ----------  --------------  -------------- 
 
 

Notes to the Interim Financial Statements

For the period ended 30 June 2023

   1.    Company information 

Aurrigo International Plc is a public limited company domiciled and incorporated in England and Wales. The registered office is Unit 33, Bilton Industrial Estate, Humber Avenue, Coventry, United Kingdom, CV3 1JL. These consolidated interim financial statements comprise Aurrigo International Plc and all of its subsidiaries, collectively the "Group".

The principal activity of the Group is that of the supply of electrical components to the automotive industry and the development of electric autonomous vehicles.

   2.    Significant accounting policies 

2.1 Basis of preparation

The financial information set out in these interim consolidated financial statements for the six months ended 30 June 2023 is unaudited. The financial information presented are not statutory accounts prepared in accordance with the Companies Act 2006, and are prepared only to comply with AIM requirements for interim reporting. Statutory accounts for the year ended 31 December 2022, on which the auditors gave an audit report which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.

These financial statements have been prepared in accordance with international accounting standards ("IFRS") as adopted by the United Kingdom ("UK") insofar as these apply to interim financial statements.

The interim consolidated financial statements have been prepared using consistent accounting policies as those adopted in the financial statements for the year ended 31 December 2022.

The interim consolidated financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these interim consolidated financial statements are rounded to the nearest GBP1,000.

The financial statements have been prepared on the historical cost basis, modified to include the revaluation of certain financial instruments at fair value.

   2.2   Basis of consolidation 

The interim consolidated Group financial statements consist of the financial statements of the parent company Aurrigo International Plc together with all entities controlled by the parent company (its subsidiaries) and the Group's share of its interests in joint ventures and associates.

All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the Group's financial statements from the date that control commences until the date that control ceases.

   2.3   Going concern 

As at 30 June 2023 the Group had net assets of GBP6,802k and cash and cash equivalents of GBP2,797k.

Management has prepared detailed financial projections for a period of at least twelve months from the date of signing these interim financial statements. These projections have been subject to various sensitivity analysis and stress-testing, so as to estimate the impact of severe but plausible risks. The board challenged the underlying assumptions of the projections and the stress-test models.

Having considered the Group's cashflow forecasts, the Directors believe that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.

Accordingly, these interim financial statements have been prepared on a going concern basis. The interim financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

   2.4   Use of estimates and judgements 

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods.

Critical judgements: Autonomous vehicles

The directors make a judgement as to the appropriate classification of each autonomous vehicle constructed during a period. Where vehicles are constructed for sale, autonomous vehicles are classified as inventory and are measured at the lower of cost and estimated selling price less costs to complete and sell. Where vehicles are intended for use on a continuing basis in the Group's activities they are classified as tangible fixed assets and are measured at depreciated cost.

In addition there are estimation uncertainties around determining labour and overheads absorbed during the construction of vehicles as well as estimating likely selling price less costs to complete and sell.

Key sources of estimation uncertainty

Development costs

Development costs included within intangible fixed assets are amortised over their estimated useful life of 10 years, once they are brought into use. The selection of estimated lives requires the exercise of management judgement. Useful lives are regularly reviewed and should management's assessment of useful lives shorter or increase then amortisation charges in the financial statements would increase or decrease and carrying amounts of the assets would change accordingly.

The Group is required to consider, on an annual basis, whether indications of impairment relating to such assess exist and if so, perform an impairment test. The recoverable amount is determined based on the higher of value in use calculations or fair value less costs to sell. The use of value in use method requires the estimation of future cash flows and the chose of a discount rate in order to calculate the present value of the cash flows. The Directors are satisfied that all recorded asests will be fully recovered from expected future cash flows.

Capitalisation of development costs

The Group recognises as intangible fixed assets development costs that are considered to meet the relevant capitalisation criteria. The measurement of such costs and assessment of their eligibility in line with the appropriate capitalisation criteria requires judgement and estimation around the time spent by eligible staff on development, expectation around the ability to generate future economic benefit in excess of cost and the point at which technical feasibility is established. the costs incurred on the intangible fixed assets were the key growth areas for the Group's admission to AIM which helps to justify the capitalisation and demonstrates the Group's ability to capitalise these assets.

   3.     Revenue 

IFRS 8 'Operating Segments' requires operating segments to be identified on the basis of internal reports of the Group that are regularly reviewed by the Group's chief operating decision maker. The chief operating decision maker of the Group is considered to be the Board of Directors. The Group has considered the overriding core principles of IFRS 8 'Operating segments' as well as its internal reporting framework, management and operating structure. The conclusion is that the Group has two operating segments as follows:

-- Automotive components - the supply of electrical components for use in the automotive sector and across other industrial applications, as well as trim and design components.

-- Autonomous - the design, development and manufacture of autonomous vehicles and associated autonomous design and consultancy services.

The Group applies IFRS 15 'Revenue from contracts with customers'. Under IFRS 15, the Group applies the 5-step method to identify contracts with its customers, determine performance obligations arising under those contracts, set an expected transaction price, allocate that price to the performance obligations, and then recognises revenues as and when those obligations are satisfied.

   4.     Segmental analysis of revenue 
 
                                 Unaudited   Unaudited        Audited 
                                  6 months    6 months           Year 
                                     ended       ended          ended 
                                   30 June     30 June    31 December 
 
                                      2023        2022           2022 
                                   GBP'000     GBP'000        GBP'000 
 Automotive components               2,771       1,951          4,803 
 Autonomous                            312         324            499 
 Total revenue from contracts 
  with customers                     3,083       2,275          5,302 
                                ----------  ----------  ------------- 
 

Revenue from customers who individually accounted for more than 10% of total Group revenue was as follows:

 
               Unaudited   Unaudited        Audited 
                6 months    6 months           Year 
                   ended       ended          ended 
                 30 June     30 June    31 December 
                    2023        2022           2022 
                 GBP'000     GBP'000        GBP'000 
 Customer 1          696         716          1,454 
 Customer 2        1,796         720          2,597 
              ----------  ----------  ------------- 
                   2,492       1,436          4,051 
              ----------  ----------  ------------- 
 
   5.     Earnings per share 

The calculation of the basic and diluted earnings per share is based on the following data:

 
                                          Unaudited   Unaudited        Audited 
 
                                            30 June     30 June    31 December 
 
                                               2023        2022           2022 
 
 Earnings used in calculation 
  (GBP'000)                                 (1,989)       (323)        (2,195) 
 Weighted average number of ordinary 
  shares                                 41,666,667   1,208,215     18,721,737 
 Basic EPS (GBP)                             (0.05)      (0.27)         (0.12) 
 Weighted average number of dilutable 
  shares                                 41,666,667   1,208,215     18,721,737 
 Diluted EPS (GBP)                           (0.05)      (0.27)         (0.12) 
 

On 27 July 2022 the Group reorganised its share capital and issued new shares in anticipation of the AIM floatation. The EPS disclosures presented for June 2022 were not restated to include any necessary adjustments for this reorganisation.

In the current, prior period and prior year the group has incurred losses and as such has not presented any dilutive shares in accordance with IAS 33 'Earnings per share'. The diluted earnings per share is therefore the same as the basic earnings.

   6.     Intangible assets 
 
                                    Patents           Research      Total 
                                               and development 
                                    GBP'000            GBP'000    GBP'000 
  Cost 
  At 1 January 2022                      71              4,331      4,402 
  Additions                               6                982        988 
  At 30 June 2022                        77              5,313      5,390 
                                  ---------  -----------------  --------- 
 
  Additions                              19                173        192 
  At 31 December 2022                    96              5,486      5,582 
                                  ---------  -----------------  --------- 
 
  Additions                              30                395        425 
  At 30 June 2023                       126              5,881      6,007 
                                  ---------  -----------------  --------- 
 
  Amortisation and impairment 
  At 1 January 2022                       6                  -          6 
  Amortisation charged for the 
   period                                 2                 24         26 
  At 30 June 2022                         8                 24         32 
                                  ---------  -----------------  --------- 
 
  Amortisation charged for the 
   period                                 3                144        147 
  At 31 December 2022                    11                168        179 
                                  ---------  -----------------  --------- 
 
  Amortisation charged for the 
   period                                 3                144        147 
  At 30 June 2023                        14                312        326 
                                  ---------  -----------------  --------- 
 
  Carrying amount 
  At 30 June 2023 (unaudited)           112              5,569      5,681 
                                  ---------  -----------------  --------- 
 
  At 31 December 2022 (audited)          85              5,318      5,403 
                                  ---------  -----------------  --------- 
 
  At 30 June 2022 (unaudited)            69              5,289      5,358 
                                  ---------  -----------------  --------- 
 
   7.     Business combinations 

On 31 May 2023, Aurrigo International Plc acquired 100% of the ordinary share capital of GB Wiring Systems Limited. In accordance with IFRS 3 Business Combinations, goodwill of GBP122k arising from the acquisition has been provisionally recognised, subject to final completion accounts being provided. The Group expects to provide a finalised business combinations calculation in the financial statements for the year ended 31 December 2023.

The following amounts of assets, liabilities and contingent liabilities have been provisionally recognised at the date of acquisition, based on book value:

 
                                                 Provisional 
                                                  Book value 
 
                                                     GBP'000 
  Assets and liabilities acquired: 
   Inventory                                              11 
   Trade and other receivables                           159 
   Cash and cash equivalents                              81 
   Trade and other payables                            (104) 
  Provisional identifiable assets                        147 
                                                ------------ 
 
   Goodwill                                              122 
   Total provisional purchase consideration              269 
                                                ------------ 
 
 
 
                               Provisional 
 
                                   GBP'000 
  Consideration: 
   Cash                                219 
   Deferred consideration               50 
                                       269 
                              ------------ 
 
 

The deferred consideration is payable by 31 May 2024 and included within current liabilities. There is no contingent element pertaining to the deferred consideration.

Additional cash payments may be due upon receipt of the completion accounts, although the impact of this is not expected to be material to the financial statements.

The June 2023 results for GB Wiring Systems Limited have been consolidated with those of the pre-existing Group members in these financial statements from the date of acquisition.

   8.     Property, plant and equipment 
 
                                       Unaudited   Unaudited        Audited 
                                         30 June     30 June    31 December 
                                            2023        2022           2022 
                                         GBP'000     GBP'000        GBP'000 
 
     Property, plant and equipment           165          59            101 
     Right of use assets                     556          96            205 
                                             721         155            306 
                                      ----------  ----------  ------------- 
 
 

The Group has lease contracts for buildings and vehicles used in its operations.

During the period, property leases were renewed at three locations each for a duration of 3 years. As a result, additions amounting to GBP455k (year ended 31 December 2022: GBP215k; 6 months period ended 30 June 2021: GBP8k) have been recorded within right of use assets. The depreciation charge relating to right of use assets for the period was GBP102k (year ended 31 December 2022: GBP176k; 6 months period ended 30 June 2021: GBP78k).

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END

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September 25, 2023 02:00 ET (06:00 GMT)

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