TIDMSCE
RNS Number : 7462N
Surface Transforms PLC
27 September 2023
27 September 2023
Surface Transforms plc
("Surface Transforms" or the "Company")
Interim results for the six months ended 30 June 2023
Surface Transforms (AIM: SCE) manufacturers of carbon fibre
reinforced ceramic automotive brake discs, announces its unaudited
interims results for the six months ended 30 June 2023
("H1-2023").
Financial highlights:
-- Revenue increased 15% to GBP3.3m (H1-2022: GBP2.9m)
-- Gross profit increased 14% to GBP2.0m (H1-2022: GBP1.7m), with margin consistent at 60%
-- Operating loss(1) increased to GBP4.6m primarily due to
GBP2.5m of non-repeatable outlays to overcome technical challenges.
Investment in teams, R&D and depreciation also increased in
line with plan
-- Loss before tax increased to GBP5.5m (H1-2022: GBP2.5m)
-- Cash at 30 June 2023 was GBP4.5m (31 Dec 2022: GBP14.9.m)
-- Improving revenue post period end, with H2-2023 revenue
expected to be significantly ahead of H1-2023
(1) Before non-recurring items
Strategic highlights
-- Revenues lower than plan due to H1 technical challenges now overcome
-- Additional furnace capacity in place and increase in proprietary know how
-- Strengthened leadership team for next phase of growth, including new CFO and COO
-- Meeting customer demands with further OEM contract awards expected in H2-2023
-- Strategic investment programme for c.GBP75m capacity
progressing well, with capital expenditure of GBP4.8m (H1-2022:
GBP2.8m). Phase 2 target of GBP50m capacity will be available in
2024
-- Strong order book unchanged with lifetime value of contracts
at GBP290m across 11 contracted models
-- New product development for customers continues in line with the contract roadmap
-- Healthy prospective contract pipeline increased to GBP420m (31 Dec 2022: GBP393m)
-- Commenced planning for site expansion to c.GBP150m capacity
David Bundred (Chairman) said:
"The steady growth in production seen throughout 2023 is
expected to continue. Whilst H1-2023 has been operationally
challenging the Company has delivered considerable strategic
progress. We have engineered solutions to our technical problems
and brought in additional furnace capacity designed to our
know-how. Productivity efficiencies and capacity improvements are
expected to continue through 2023, a target break-even in the
second half of the year, with profitability in Q4.
We have continued to invest to reach, initially GBP50m sales
capacity in 2024 and GBP75m sales capacity in the following year.
Of greatest importance our customers have understood our issues,
including immersing themselves in our capacity plans, and remain
committed to awarding the Company further business. We are
appreciative of shareholders support through this learning curve
."
Financial review
Revenue increased by 15% to GBP3.3m with approximately 75%
represented by OEM customers and related development income. Near
OEM customer growth has also continued and demand from retrofit
customers remained strong.
Gross profit increased by 14% to GBP2.0m with margins remaining
consistent at 60%.
Our operating loss (before non-recurring items) was GBP4.6
million compared to GBP2.4 million in the same period last year.
This is due to a number of ramp-up issues we experienced as our
production capacity increased to meet growing demand. These ramp-up
issues resulted in lost contribution of GBP1.6m and costs of
GBP0.9m with equipment failures and scrapped production. We have
overcome these technical challenges and do not expect these outlays
to re-occur. Indeed, the work completed has resulted in improved
production processes and the design of proprietary equipment.
Administrative costs (excluding R&D) rose 52% to GBP2.5m
driven by additional headcount and increased depreciation, combined
with the actions to overcome production challenges. Research and
development ("R&D") expense increased 62% to GBP4.1m as new
product development continues in line with the contract roadmap and
the introduction of new machines and associated processes enabled
those significant technical challenges to be overcome.
Non-recurring expenditures
Management have identified non-recurring items of expenditures
in H1-2023, notably GBP0.5m of unprecedented energy costs from a
one -off period of being subject to a variable rate in H1-2023. The
Company has fixed energy costs until March 2024. A further GBP0.3m
of one-off restructuring costs as ramp up demanded temporary skills
sets during this transition.
After taking into account higher administrative, R&D costs,
the GBP2.5m one off costs associated with ramp up challenges as
well as the GBP0.9m of non-recurring expenditures the Company
reports a loss before tax of GBP5.5 million in H1-2023, compared to
a loss of GBP2.5 million in H1-2022.
Capital expenditure and cash
Planned capital expenditure of GBP4.8 million occurred in the
period, primarily aimed at delivering 2024 capacity, with full year
capex now expected to be in the region of GBP8m. This extra
capacity will provide resilience during the continuing ramp up in
the second half of 2023 and also underpins the projected further
near doubling of sales in 2024. In addition, the Company's
manufacturing capacity expansion programme remains on track to
deliver capacity equivalent to GBP75 million in 2025.
Cash at the end of the period was GBP4.5 million, down GBP10.4
million from the year-end. This was due to revenue loss whilst
overcoming ramp up challenges in H1 and continued capital
investments for 2024. Prudent cash management along with a
re-phasing of capital expenditure on the next phase of capacity
expansion has minimised the impact of one-off costs incurred
resolving the technical problems and delayed production ramp up.
Accordingly, year-end cash is expected to be within GBP1m of
previous management estimates.
Commercial progress:
Satisfying immediate customer demand whilst investing in
capacity and manufacturing resilience for strategic growth remains
the Board's over-riding priority.
Despite the production challenges in H1-2023, the Company is
addressing demand in H2-2023 for current in-series production.
Whilst we have experienced delays in shipping product owing to the
ramp-up challenges earlier this year, we have worked closely with
our customers throughout and are broadly meeting their
requirements.
Our contracted order book has risen in line with expectations,
from approximately GBP180 million to GBP290 million. Our
prospective contract pipeline is now approximately GBP420 million.
Near OEMs and Retrofit customers remain a valued and steady income
stream.
We currently have model contracts with 6 OEM manufacturers and
remain in discussions with other OEMs. Furthermore, and despite the
technical problems incurred in the period, our OEM customers have
been fully supportive and the Board expect to be awarded further
OEM contracts in H2-2023.
Operational progress
The technical problems incurred in Q1 constrained our production
and sales. These challenges were resolved in Q2 and the Company has
been increasing production rates ever since. Q3 is showing steady
progress, and the company expects to continue ramping up its growth
in Q4.
Supply chain challenges have caused production delays, impacting
customers and some capital investments, however we have developed
alternatives to minimise the risk.
Looking ahead to 2024, the Company's strategic focus is on:
o Installed capacity: capable of meeting demand and building
inventory headroom;
o Increasing capacity: expanding production capacity the focus
is now on phase 2 which is expected to come on stream in 2024;
o Advancing our plans for site expansion to scale up capacity to
GBP150 million;
o Site infrastructure: investing in new facilities and equipment
to support growth;
o Building talent and capability: attracting and retaining top
talent to support the Company's growth; and
o Maintaining margin: identifying opportunities to reduce
inefficiency to improve.
People
It is a pleasure to welcome Isabelle Maddock who joins as Chief
Financial Officer and Board Director after a 9- year tenure as CFO
with James Cropper PLC. It is also a pleasure to welcome Stephen
Easton to the team as (non-Board) Chief Operating Officer, Stephen
has joined after a 16-year tenure with SGL Carbon. Both these
senior appointments strengthen an already dynamic team focused on
delivering the manufacturing expansion and financial transformation
of the Company.
To support talent programmes, we work with key universities and
local colleges to secure a number of individuals on apprenticeships
and graduate programmes. These programmes help us to attract and
retain top talent, develop future leaders, reduce training costs,
improve productivity, and boost morale. Since the start of the
year, we have taken in three apprentices and have also secured nine
graduates primarily in IT, Engineering, Manufacturing Technology,
Human Resources, Finance and Sales roles. Approximately 26% of the
current workforce are graduates.
We continue to be an employer of choice in the area offering
well paid employment opportunities and excellent prospects within a
growing and inclusive environment.
Environment
Brake dust is a major source of air pollution, and it is
becoming an increasingly talked-about problem. There are more
vehicles on the road than ever before, and newer models tend to
have more powerful and bigger brakes. Our carbon ceramic brake
discs significantly reduce brake pad wear and hence brake pad dust
emissions compared to traditional brake discs. They are also
lighter, last longer, do not corrode and cope better with high
accelerating, heavy vehicles, making them well-suited for electric
vehicles (EVs) that require brakes which are used less frequently,
but need higher energy braking performance, weight reduction and
lower brake pad dust emissions. Our research team is collaborating
with innovative automotive suppliers to develop new brake disc
technologies that can further reduce brake dust emissions and
improve the performance of EV's.
Reducing manufacturing energy and carbon footprint is a top
priority for the Company. All capital investments made this year
and for future furnaces and power plants are continually assessed
based on their potential to reduce energy and carbon costs.
Outlook
The steady growth in production seen throughout 2023 is expected
to continue. Whilst H1-2023 has been operationally challenging the
Company has delivered considerable strategic progress. We have
engineered a solution to our technical problems and brought in
additional furnace capacity designed to our know-how. Productivity
efficiencies and capacity improvements are expected to continue
through 2023, a target break-even in the second half of the year,
with profitability in Q4.
We have continued to invest to reach, initially GBP50m sales
capacity in 2024 and GBP75m sales capacity in the following year.
Of greatest importance our customers have understood our issues,
including immersing themselves in our capacity plans, and remain
committed to awarding the Company further business. We are
appreciative of shareholders support through this learning
curve.
For enquiries, please contact:
Surface Transforms plc +44 151 356 2141
David Bundred, Chairman
Kevin Johnson CEO
Zeus (Nominated Adviser and Joint Broker) +44 203 829 5000
David Foreman / Dan Bate / James Edis (Investment
Banking)
Dominic King (Corporate Broking)
Cavendish Capital Markets (Joint Broker) +44 20 7220 0500
Ed Frisby / Abigail Kelly (Corporate Finance)
Andrew Burdis / Barney Hayward (ECM)
About Surface Transforms
Surface Transforms plc. (AIM:SCE) develops and produces carbon
-- ceramic material automotive brake discs. The Company is the UK's
only manufacturer of carbon -- ceramic brake discs, and only one of
two mainstream carbon ceramic brake disc companies in the world,
serving customers that include major OEMs in the global automotive
markets.
The Company utilises its proprietary next generation Carbon
Ceramic Technology to create lightweight brake discs for high --
performance road and track applications for both internal
combustion engine cars and electric vehicles. While competitor
carbon -- ceramic brake discs use discontinuous chopped carbon
fibre, Surface Transforms interweaves continuous carbon fibre to
form a 3D matrix, producing a stronger and more durable product
with improved heat conductivity compared to competitor products;
this reduces the brake system operating temperature, resulting in
lighter and longer life components with superior brake performance.
These benefits are in addition to the benefits of all carbon --
ceramic brake discs vs. iron brake discs: weight savings of up to
70%, longer product life, consistent performance, reduced brake pad
dust and corrosion free.
The Company holds the London Stock Exchange's Green Economy
Mark.
For additional information please visit www.surfacetransforms.com
Statement of total comprehensive
income
For the 6 months ended 30 Six months Six months
June 2023 ended ended Year ended
30-Jun-23 30-Jun-22 31-Dec-22
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------ ------------------------------ ------------------------
Revenue 3,282 2,857 5,121
Cost of Sales (1,323) (1,143) (2,039)
------------ ------------------------------ ------------------------
Gross Profit 1,958 1,714 3,082
Other Income 7 24 36
Administrative Expenses:
Before research and development
costs (2,475) (1,626) (3,365)
Research and development costs (4,125) (2,549) (5,625)
------------------------
Total administrative expenses (6,600) (4,175) (8,990)
------------ ------------------------------ ------------------------
Operating loss before non-recurring
items (4,636) (2,437) (5,872)
Non-recurring items (763) - -
Financial Income 2 1 6
Financial Expenses (87) (82) (180)
------------ ------------------------------ ------------------------
Loss before tax (5,484) (2,519) (6,046)
Taxation 643 348 1,264
------------ ------------------------------ ------------------------
Loss for the year after tax (4,840) (2,171) (4,782)
Total comprehensive loss for
the year attributable to members (4,840) (2,171) (4,782)
------------ ------------------------------ ------------------------
Loss per ordinary share
Basic and diluted (2.01)p (1.11)p (2.34)p
------------ ------------------------------ ------------------------
Statement of financial position As at As at As at
As at 30 June 2023 30-Jun-23 30-Jun-22 31-Dec-22
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
---------- ---------- ----------
Non-current assets
Property, plant and equipment 18,864 11,325 15,188
Intangibles 3,412 1,018 2,237
---------- ---------- ----------
22,277 12,343 17,425
Current assets
Inventories 4,023 2,315 3,376
Trade and other receivables 1,970 987 1,051
Other receivables 3,086 2,403 3,400
Current asset investment - 3,007 -
Cash and cash equivalents 4,506 3,712 14,924
13,585 12,424 22,750
---------- ---------- ----------
Total assets 35,862 24,767 40,175
Current liabilities
Other interest-bearing loans
and borrowings (211) (211) (211)
Lease liabilities (348) (299) (295)
Trade and other payables (4,058) (2,765) (3,710)
(4,617) (3,274) (4,216)
Non-current liabilities
Government grants (181) (194) (188)
Lease liabilities (1,290) (1,402) (1,335)
Other interest-bearing loans
and borrowings (783) (1,054) (887)
Total liabilities (6,872) (5,925) (6,626)
---------- ---------- ----------
Net assets 28,990 18,842 33,551
---------- ---------- ----------
Equity
Share capital 2,417 1,954 2,406
Share premium 58,375 41,469 58,215
Capital reserve 464 464 464
Retained loss (32,266) (25,044) (27,534)
Total equity attributable
to equity shareholders of
the Company 28,990 18,842 33,551
---------- ---------- ----------
Statement of Cash Flows
for the 6 months ended 30
June 2023
Six months Six months
ended ended Year ended
30-Jun-23 30-Jun-22 31-Dec-22
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------ --------------------------------- ------------------------------------
Cash flow from operating
activities
Loss after tax for the year (4,840) (2,171) (4,782)
Adjusted for:
Depreciation and amortisation
charge 591 441 969
Equity settled share-based
payment
expenses 108 95 216
Foreign exchange losses/(gains) 43 (210) (345)
Financial expense 87 82 180
Financial income (2) (1) (6)
Non-government grant
amortisation - - (12)
Taxation (643) (348) (1,264)
------------ --------------------------------- ------------------------------------
Changes in working capital (4,656) (2,112) (5,044)
Decrease/(increase) in
inventories (647) (977) (2,038)
Decrease/(increase) in trade
and other receivables (1,135) (951) (1,805)
Increase/(decrease) in trade
and other payables (80) 775 1,720
------------ --------------------------------- ------------------------------------
(6,518) (3,265) (7,167)
Taxation received 1,172 - 709
------------ --------------------------------- ------------------------------------
Net cash used in operating
activities (5,346) (3,265) (6,458)
------------ --------------------------------- ------------------------------------
Cash flows from investing
activities
Acquisition of tangible and
intangible assets (4,839) (2,751) (8,351)
Cash transfer (to)/from current
asset investments - - 3,007
Interest received 2 - 6
Net cash used in investing
activities (4,838) (2,751) (5,337)
------------ --------------------------------- ------------------------------------
Cash flows from financing
activities
Proceeds from issue of share
capital, net of expenses 171 24 18,051
Cost for issue of share capital - - (828)
Payment of finance lease
liabilities (85) (80) (153)
Proceeds from long term loans - - -
Payments of long term loans (191) (303) (473)
Interest paid (87) (82) (180)
------------ --------------------------------- ------------------------------------
Net cash generated from
financing
activities (192) (441) 16,417
------------ --------------------------------- ------------------------------------
Net (decrease)/increase in cash
and cash equivalents (10,375) (6,457) 4,620
Foreign Exchange losses (43) 210 345
Cash and cash equivalents at
the beginning of the period 14,924 12,966 9,959
------------ --------------------------------- ------------------------------------
Cash and cash equivalents at
the end of the period 4,506 6,719 14,924
------------ --------------------------------- ------------------------------------
Statement of changes in equity
For the six months ended
30 June 2023
Share
Share premium Capital Retained
capital account reserve loss Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- --------- --------- --------
Balance as at 31 December
2022 2,406 58,215 464 (27,534) 33,551
Comprehensive income for
the period
Loss for the period - - - (4,840) (4,840)
-------------------------------- --------- --------- --------- ---------
Total comprehensive income
for the period - - - (4,840) (4,840)
-------------------------------- --------- --------- --------- --------- --------
Transactions with owners,
recorded directly to equity
Share options exercised 11 160 - - 171
Equity settled share based
payment transactions - - - 108 108
-------------------------------- --------- --------- --------- ---------
Total contributions by and
distributions to the owners 11 160 - 108 279
-------------------------------- --------- --------- --------- ---------
Balance at 30 June 2023 2,417 58,375 464 (32,266) 28,990
-------------------------------- --------- --------- --------- --------- --------
Notes
1. Accounting policies
The interim financial statements are the responsibility of the
Directors and were authorised and approved by the Board of
Directors for issuance on 27 September 2023.
Basis of preparation
The Company is a public limited liability Group incorporated and
domiciled in England & Wales. The financial information is
presented in Pounds Sterling (GBP) which is also the functional
currency. The Company's accounting reference date is 31
December.
These interim condensed financial statements are for the six
months to 30 June 2023. They have not been prepared in accordance
with IAS 34, Interim Financial Reporting that is not mandatory for
UK AIM listed companies, in the preparation of this half-yearly
financial report. While the financial information included has been
prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS), as
adopted by the European Union (EU), these interim results do not
contain sufficient information to comply with IFRS.
These interim results for the period ended 30 June 2023, which
are not audited; do not comprise statutory accounts within the
meaning of section 435 of the Companies Act 2006.
Full audited accounts of the Company in respect of the year
ended 31 December 2022, which received an unqualified audit opinion
and did not contain a statement under section 498(2) or (3)
(accounting record or returns inadequate, accounts not agreeing
with records and returns or failure to obtain necessary information
and explanations) of the Companies Act 2006 and have been delivered
to the Registrar of Companies.
The accounting policies used in the preparation of the financial
information for the six months ended 30 June 2023 are in accordance
with the recognition and measurement criteria of IFRS as adopted by
the EU and are consistent with those which will be adopted in the
annual statutory financial statements for the year ending 31
December 2022.
Going concern
The financial statements have been prepared on a going concern
basis which the Directors believe to be appropriate. The Company
incurred a net loss of GBP4.8 million during the period however the
Directors are satisfied, based on detailed cash flow projections
and after the consideration of reasonable sensitivities, that
sufficient cash is available to meet the Company's needs as they
fall due for the foreseeable future and at least 12 months from the
date of authorising the accounts. The detailed cash flow
assumptions are based on the Company's annual budget, prepared, and
approved by the Board, which reflects a number of key assumptions
including revenue growth, underpinned by current pipeline; customer
compliance with payment terms; other receipts of a value and timing
consistent with previous years.
The Directors believe that the Company is well placed to manage
its business risks successfully. The Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing the interim
report and accounts.
Leases and right of use assets
The Company assesses whether a contract is or contains a lease
at inception of the contract. A lease conveys the right to direct
the use and obtain substantially all the economic benefits of an
identified asset for a period of time in exchange for
consideration.
A right of use asset and corresponding lease liability are
recognised at commencement of the lease. The lease liability is
measured at the present value of the lease payments, discounted at
the rate implicit in the lease, or if that cannot be readily
determined, at the lessee's incremental borrowing rate specific to
the term, country, currency and start date of the lease.
The lease liability is subsequently measured at amortised cost
using the effective interest rate method. The right of use asset is
initially measured at cost, comprising: the initial lease
liability; any lease payments already made less any lease
incentives received; initial direct costs. The right of use asset
is subsequently depreciated on a straight-line basis over the
shorter of the lease term or the useful life of the underlying
asset. The right of use asset is tested for impairment if there are
any indicators of impairment.
Leases of low value assets and short-term leases of 12 months or
less are expensed to the income statement, as are variable payments
dependent on performance or usage, 'out of contract' payments and
non-lease service components.
Segmental reporting
Due to the nature of the business the Company is currently
focused on building revenue streams from a variety of different
customer markets. As there is only one manufacturing facility, and
as this has capacity above and beyond the current levels of trade,
there is no requirement to allocate resources to or discriminate
between specific markets or products. As a result, the Company's
chief operating decision maker, the Chief Executive, reviews
performance information for the Company as a whole and does not
allocate resources based on products or markets. In addition, all
products manufactured by the Company are produced using similar
processes. Having considered this information in conjunction with
the requirements of IFRS 8, as at the reporting date the board of
Directors have concluded that the Company has only one reportable
segment that being the manufacture and sale of carbon fibre
materials and the development of technologies associated with
this.
The Company considers it offers product technology namely carbon
fibre re-enforced ceramic material, which is machined into
differing shapes depending on the intended purpose of the end
user.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with
adopted IFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income, and expenses. In
considering key judgements, management have considered revenue
recognised over time as judgement however this is not material in
current period. See revenue recognition accounting policy for
further details.
Key judgements assessed by management are as follows:
Research and development expenditure
The Board considers the definitions of R&D costs as outlined
in IAS 38: Intangible Assets when determining the correct treatment
of costs incurred. Where such expenditure is technically and
commercially feasible, the Company intends and has the technical
ability and sufficient resources to complete development, future
economic benefits are probable and if the Company can measure
reliably the expenditure attributable to the intangible asset it is
treated as development expenditure and capitalised on the statement
of financial position.
In considering whether an item of expenditure meets these
criteria, the Board applies judgement in determining when the items
are technically and commercially feasible.
Deferred tax
Judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and
level of future taxable profits together with an assessment of the
effect of future tax planning strategies. At present management
have not recognised deferred tax assets above the value of the
deferred tax liability recognised, on the basis that future taxable
profits are possible, not probable.
Management do not consider there to be any significant estimates
included in the accounts which have a significant risk of causing a
material adjustment to carrying amount of assets and liabilities
within the next financial year.
Revenue recognition
Revenue arises primarily from the provision of carbon ceramic
brake discs.
To determine whether to recognise revenue, the company follows a
5-step process:
1. Identify the existence of a contract with a customer
2. Identify the separable performance obligations
3. Determine an appropriate transaction price for the contract
4. Allocate the transaction price to the performance obligations
5. Recognise revenue either at a point in time, or over time,
dependent on how the obligation is satisfied.
The majority of revenue is currently recognised at a point in
time, when the control of the goods has passed to the buyer
(usually on dispatch of the goods). These contracts contain only
one performance obligation being the provision of the specified
goods.
The Company has entered contracts which have a number of
separable elements included as part of the provision of
pre-production services to the customers. For such contracts where
it has been determined that a good or service is being transferred,
the performance obligations which are capable of being distinct
must first be identified and then an assessment made of whether the
identified performance obligations are distinct in the context of
the contract. Judgement is exercised in making this assessment and
is driven by what the customers expectation of goods and services
to be received are.
When transferring a good or service to the customer the revenue
recognition point is determined based on whether the control of the
good or service is transferred over time or at a point in time.
Where the customer receives and consumes benefits simultaneously
over the period of the performance revenue is recognised over time
whereas when the service is transferring a good at a point in time
the revenue is recognised at that time. Where revenue is recognised
on an over time basis, the Company uses a percentage of completion
model to recognise the appropriate revenue in the year. This
percentage of completion is a judgement based on time booked to the
contract.
2. Taxation
Analysis of credit in the period
Six months Six months Year
ended ended ended
30-Jun-23 30-Jun-22 31-Dec-22
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited)
UK Corporation tax
Adjustment in respect of prior
years' R&D tax allowance (33) - 59
R&D tax allowance for current
period 676 348 1,205
643 348 1,264
-------------- -------------- ----------------
The effective rate of tax for the period/year is lower than the
standard rate of corporation tax in the UK of 20%, principally due
to losses incurred by the Company.
The potential deferred tax asset relating to losses has not been
recognised in the financial statements because it is not possible
to assess whether there will be suitable taxable profits from which
the future reversal of the underlying timing differences can be
deducted.
3. Loss per share
Loss per ordinary
share
Six months ended 30 Year ended 31 December
June
Basic 2023 2022 2022 2021
-------------------
Loss after tax
(GBP) (4,840,000) (2,171,000) (4,782,00) (3,952,000)
------------------- ------------ ------------ ------------ ------------
Weighted average
number of shares
(No. of shares) 240,979,421 195,311,933 204,340,456 190,215,345
------------------- ------------ ------------ ------------ ------------
Loss per share
(pence) (2.01p) (1.11p) (2.34p) (2.08p)
------------------- ------------ ------------ ------------ ------------
Loss per ordinary share is based on the Company's loss for the
financial period of GBP4,840k (30 June 2022: GBP2,171k loss; 31
December 2022: GBP4,782k loss). The weighted average number of
shares used in the basic calculation is 240,979,421 (30 June 2022:
195,311,933; 31 December 2022: 204,340,456).
The calculation of diluted loss per ordinary share is identical
to that used for the basic loss per ordinary share. This is because
the exercise of share options would have the effect of reducing the
loss per ordinary share and is therefore not dilutive under the
terms of International Accounting Standard 33 "Earnings per
share".
4. Segment reporting
Due to the start-up nature of the business the Company is
currently focused on building revenue streams from a variety of
different customer markets. As there is only one manufacturing
facility, and as this has capacity above and beyond the current
levels of trade, there is no requirement to allocate resources to
or discriminate between specific markets or products. As a result,
the Company's chief operating decision maker, the Chief Executive,
reviews performance information for the Company as a whole and does
not allocate resources based on products or markets. In addition,
all products manufactured by the Company are produced using similar
processes. Having considered this information in conjunction with
the requirements of IFRS 8, as at the reporting date the Board of
Directors has concluded that the Company has only one reportable
segment that being the manufacture and sale of carbon fibre
materials and the development of technologies associated with
this.
The Company considers it offers product technology namely carbon
fibre re-enforced ceramic material which is machined into different
shapes depending on the intended purpose of the end user.
Revenue by geographical destination is analysed as follows:
Revenue by Geographical Six months ended 30 Year ended
Destination June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------- ---------- ---------- -------------
United Kingdom 418 1,167 1,623
Germany 291 136 349
Netherlands 300 - -
Sweden 33 84 354
Rest of Europe 39 212 341
United States of America 2,148 1,157 2,254
Rest of World 53 102 200
--------------------------
3,282 2,857 5,121
-------------------------- ---------- ---------- -------------
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END
IR PPUUCBUPWGMQ
(END) Dow Jones Newswires
September 27, 2023 02:00 ET (06:00 GMT)
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