TIDMXSG
RNS Number : 7419N
Xeros Technology Group plc
27 September 2023
27 September 2023
Xeros Technology Group plc
('Xeros' or the 'Company' or the 'Group')
2023 INTERIM RESULTS
Sharper commercial focus driving momentum
Xeros Technology Group plc (AIM: XSG), the creator of
technologies that reduce the impact of clothing on the planet,
today announces its unaudited interim results for the six months
ended 30 June 2023, which show momentum building in all areas of
the business.
Operational highlights
-- Significant progress in all areas of the business with commercial momentum building:
Filtration (estimated addressable market GBP350m p.a.)
- Xeros now has multiple licensing agreements in place with approved manufacturers for XFilter
technology, covering all major global washing machine brands
- New external in-line filter, XF(3), launched successfully at IFA, the world's largest consumer
electronics and home appliances trade show in Berlin
- Legislation driving adoption of microplastic filtration technologies for washing machines
- First revenues expected in FY24
Finish (estimated addressable market GBP132m p.a.)
- New licensing agreement signed with global garment-finishing machine specialists, Yilmak,
and distributor, KRM, to provide denim processing technology, to minimise water, chemical,
and energy usage in the industry
- Revenue streams from both licensing agreement and ongoing supply of consumables - XOrb product
- Revenues expected FY23
Care (estimated addressable market GBP3bn p.a.)
- IFB Appliances' new domestic 9kg washing machine, featuring Xeros technology to save water
and prolong garment life, in progress for launch in India
- Progress with IFB and Indian Railways on commercial laundry partnership
- IFB / Xeros appoint 'Ecoprod' as new distributor for the UK
-- Awareness of Xeros' technologies is building, following successful launches at the two preeminent
industry trade shows, alongside ongoing leadership in engagement with global legislators
-- Meaningful conversations with four of the ten largest global domestic laundry OEMs and ongoing
engagement with another four of the top ten
Key financials
-- Revenue of GBP0.1m (H1 22: GBP0.04m) - increasing momentum towards revenue generation in Filtration
-- Administrative expenses at GBP2.6m down from GBP4.2m in same period last year
-- Significant reductions in costs with net cash outflow from operations reduced to GBP2.9m (H1
22: GBP3.9m) with cash at 31 August 2023 of GBP2.6m
Outlook
-- Commercial momentum gathering in target markets
-- New licensing agreements and progress made with pre-existing partnerships place us in a strong
position to deliver the successful commercialisation of our technologies
-- Month on month EBITDA and cash breakeven expected during the second half of FY24
Neil Austin, CEO said:
"Increasing climate awareness and conducive legislation is
creating a groundswell of opportunity for Xeros' technologies.
During the Period, the Group has signed three significant licensing
agreements taking our total to eight across all technology
platforms, as well as widening its product portfolio within
filtration."
Enquiries
Xeros Technology Group plc Tel: 0114 269 9656
Neil Austin, Chief Executive Officer
Alex Tristram, Director of Finance
Cavendish Capital Markets Limited (Nominated Adviser and Broker) Tel: 020 7220 0570
Julian Blunt/Teddy Whiley, Corporate Finance
Andrew Burdis/Sunila de Silva, ECM
Belvedere PR xeros@belvederepr.com
Cat Valentine Mob: 07715 769 078
Keeley Clarke Mob: 07967 816 525
About Xeros
Xeros Technology plc has developed patented and proven,
industry-leading technologies which reduce the environmental impact
of how industries make and care for clothes.
The traditional wet processing methods used in industrial and
domestic laundry and garment manufacturing consume billions of
litres of fresh water and large amounts of energy and chemicals, as
well as damaging and weakening clothing fibres and creating rising
levels of environmental pollution. It is estimated that washing
machines contribute 35% of the 171 trillion microplastic particles
in the ocean.
A range of actors, including consumers, the media NGOs and
regulators are exerting pressure on these industries, with
legislative action beginning to be taken.
Xeros' three main technologies, Filtration, Finish, and Care,
facilitate garment manufacturers, industrial laundries, domestic
washing machine manufacturers and consumers, to reduce their
environmental impact, whilst also significantly improving
efficiency in the process.
Xeros' model is to generate revenue from licensing its
technologies, generating royalties and the sale of consumables.
Currently there are 8 agreements in place. The addressable markets
in Filtration, Finish and Care are estimated to be valued at
GBP350m p.a., GBP132m p.a. and GBP3bn p.a. respectively.
CEO Statement
I am pleased to report on the significant operational and
commercial progress the Group has made in the six months to 30 June
2023.
The macro environment for our technologies continues to
strengthen in synchronicity with our commercialisation goals.
Global businesses are coming under increasing pressure to improve
their environmental practices, and governments are introducing new
regulations and legislation to protect against further ecological
damage and meet their global obligations.
In the Period under review, the Group signed new licensing
agreements in Filtration and Finish with the biggest brands in
their respective markets, which leave Xeros in prime position to
capitalise on demand for its micro-plastics filtration technology
and to lead the world on the delivery of ecological garment
processing technology in denim.
When I joined Xeros just over a year ago, I did so because the
Group's technologies were not only the right ones ecologically for
the planet but the right ones economically. Our technologies
actually reduce lifetime costs for the major appliance and garment
processing industries.
It is pleasing to note that our environmental contribution was
recognised in the Period, when we were awarded the much-prized
B-Corp accreditation. The application of this globally recognised
standard sets us apart. Xeros is the first in its peer group to
receive the accolade and only the second AIM listed company to
reach this standard.
The new management team, which has been put in place since I
joined, has focused on the singular goal of building commercial
partnerships, by promoting the benefits of our technologies to the
leading garment processing businesses globally, which can deliver
solutions at scale. Internally, there is a real sense of momentum
gathering and we look forward to the next 12 months with increasing
confidence in our technologies and strategy.
Summary of the results
As part of a sharpening of focus on commercial progression, it
was important to review costs within the business. To this end, we
reduced our rate of cash burn by GBP1m in the Period, while still
making significant progress on key licensing agreements. We take a
prudent and efficient approach, maintaining a keen eye on costs
throughout the business and will remain focused on ensuring
sufficient liquidity in the Group at all times.
At the time of our fundraising in September 2022, we stated that
we anticipated month on month EBITDA and cash breakeven during 2024
and stated that further clarity would emerge during the course of
2023. We believe the commercial progress made during the past 12
months and the significant inflection points expected to be
achieved during the second half of our financial year ended 31
December 2024 support this view and our guidance remains
unchanged.
Business update
Filtration
Even on an eco-setting, washing our clothes release 700,000
microfibres with every wash. Those tiny fibres can have a lasting
impact. They end up in our oceans, in our food chain and in our
water supply. Our filtration technology, XFilter, can be integrated
into a washing machine for the home or built at a large scale for
industry. It removes 99% of micro plastics from wastewater during a
washing machine cycle.
In the Period, we signed two further licensing agreements with
major European component manufacturers. These complement the
Hanning agreement, signed in June 2022, for the licensed
manufacture of Xeros' XF1 technology. We now have multiple approved
manufacturing options for all of the major global washing machine
brands, capable of delivering 99 million units per annum.
The legislative environment, which supports the take up of our
Filtration technology, continues to advance. There have been
further developments on legislative landscape in the Period, with
the mandated French deadline of 2025 set to be complemented by
movements, most notably, in the EU, the UK and California.
Post the Period end, we launched a new external filtration
product, called XF(3), for the domestic market. This is an
'outside-of-machine' microplastic filtration device, which can be
retrofitted to the existing domestic install base. The device
debuted at IFA Berlin, which is the largest OEM exhibition in the
world. The feedback from our customer base was excellent with clear
recognition of the product's ideal combination of price, efficacy,
and flexibility on positioning. XF(3) is the first product to come
from our Gen 2 XFilter platform, which is set to deliver new
propositions for the commercial laundry and Industrial
manufacturing sectors in future years.
Care
Our care technology uses XOrbs, reusable polymer spheres, to
wash and care for clothes. The technology is scalable for domestic
washes to heavy industrial use. It is designed to save tens of
millions of litres of water every year, use half the energy and
chemicals of traditional laundry processes and prolong the life of
fabrics.
IFB Appliances' new mass 9kg washing machine platform featuring
Xeros technology continues to progress for full scale launch for
domestic consumers across India. IFB is also continuing progress
with Indian Railways commercial laundry partnership.
Leading environmental solutions provider, Ecoprod, has been
appointed as a UK distributor for Xeros enabled products. Ecoprod
offers water management solutions to several thousand facilities in
five major industries - healthcare, hotels, the care market,
laundry companies and sports clubs.
Finish
Making one pair of jeans can use up to 10 years' worth of
drinking water for one person. Chemicals used in the process escape
with wastewater polluting our planet. Today, jeans are still made
using pumice stone, which constantly needs replacing and creates
chemically contaminated sludge. Our XFN1 technology uses patented
reusable XOrbs as a pumice alternative and reduces water and
chemistry use by up to 50%.
The new Xeros-enabled denim processing machine was launched by
our new partner Yilmak at ITMA, the foremost global garment
manufacturer trade show, in June 2023. We signed a licensing
agreement with Yilmak Makina / KRM, one of the World's largest and
best respected garment finishing manufacturers and distributors
respectively, in the Period. This complements our existing
licensing agreement with Ramsons, based in India. Trials of our
technology with multiple manufacturers are underway, making samples
and jeans for a number of high-street denim brands.
In denim finishing, Xeros has established its technology in
centres of excellence in Turkey, Bangladesh and the UK for regional
partner engagement in live production environment.
Multiple fashion brand collaborations using Xeros technology are
expected to develop further in the forthcoming period.
Strategy
Our technology provides cost-effective solutions for garment
manufacture and clothing care within the $2.5 trillion fashion
industry and the $55 billion domestic washing machine market. Our
annual addressable markets in Filtration, Finish and Care are
estimated to be GBP350 million, GBP132 million and GBP3 billion
respectively.
Our strategy to become an IP-rich, capital-light licensor of
proprietary technology solutions to multiple scale industries, all
of which deploy the same Xeros core technologies remains. We
identify and select partners across the globe with significant
market share, who are able to demonstrate a strategic intent to
deliver increased levels of sustainability, empowering them to
scale our innovations.
Our technologies are already in application in major global
industries through eight licensing and partner agreements, covering
commercial and home laundry, the cleaning of specialist workwear,
and garment manufacture. So far, our technology has saved millions
of litres of water and is proven to significantly increase the life
of clothes and fabrics. The implementation of our technologies
delivers major improvements in economic, operational, product and
environmental outcomes.
Drivers for growth
As the climate emergency continues to unfold, consumer sentiment
and demand for responsible products have never been stronger,
creating an urgency for manufacturers to react. A recent McKinsey
report stated: "The overall trend ... was clear ... products that
made ESG-related claims grew faster than those that didn't."
The realisation of the impact of clothing on the climate is
strong and growing. Garment production is a high energy and water
consumer, whilst also polluting air and water supplies during the
textile creation processes. "Fast fashion" is synonymous with
landfill problems and throw-away society, and narrative has shifted
towards sustainability and ethics, with a focus on slow fashion,
circular economy, transparency, and supply chain traceability. The
rental and second-hand fashion markets have grown and are predicted
to make up a significant percentage of apparel sales in the
future.
Xeros is actively involved with lobbying governments and
supporting NGOs lobbying for change in the UK, EU and US. Last year
we led the co-creation of a letter sent to the UK Environment
Secretary demanding legislation for filtration in washing machines.
This led to a direct discussion with the Minister and the
Department of Environment, Food and Rural Affairs and Xeros
continues to support a UK private members' bill on this topic. This
year we have provided evidence to coincide with the EU's
recommendations, currently scheduled to be published in Q4 2023, on
'Measures to Reduce the Impact of Microplastic Pollution on the
Environment'. This evidence is also being used to support a bill in
California to mandate microfibre filtration technology in washing
machines, and was introduced in February 2023 and has reached the
desk of Governor Gavin Newsom for approval. Xeros is working
closely with the NGO 5 Gyres, who co-authored the bill, to support
the filtration effectiveness and standards.
In addition, United Nations Environment Program is attempting to
bring about a global plastics treaty (initial draft published Sept
'23) in which: 'Nations should aim for the prevention, progressive
reduction and elimination of plastic pollution throughout the
lifecycle of plastic. Their approaches should be comprehensive and
cover all parts of the lifecycle.' which refers to the limitation
of microplastic pollution.
Xeros continues to be recognised for leading filtration
standards as highlighted by a Washington Post article earlier this
year that referenced the University of Plymouth study concluding
that XFilter is the most effective microfibre capture system for
the global laundry industry.
With France having established a precedent by mandating a
deadline of 1 January 2025 for a microfibre capture requirement for
all washing machines, the rest of the EU, the UK and California are
expected to follow suit. The Xeros view is that with XFilter
partnerships in place, we are well-positioned to respond to an
imminent need for five of the leading global washing machine
markets.
In addition to specific washing machine filtration legislation,
there are a number of other policies that highlight an accelerating
trend towards lower-impact goods and services, including extended
producer responsibility, consumer protection laws and environmental
labeling.
Sales pipeline
The Company's goal is mass implementation of its three
technologies and we have a clear strategy in place to help us
achieve this.
We are currently in active discussion with a number of retail
brands, garment manufacturers and OEMs, all of which have the
potential to lead to further agreements. Most recently, our
engagement with major domestic appliance washing machine brands has
escalated with active engagement with four of the 10 leading global
brands on both the Care and Filtration technologies.
We have plans to launch a domestic application in both Care
(XC1) and Filtration (XF(1) and XF(3) ) for the major markets in
Europe and Asia with several brands in the next 24-36 month
period.
Our manufacturing partnerships with Yilmak and Ramsons provide
the platform for the technology to permeate the market and our
extensive engagement and testing with multiple apparel brands
creates awareness and demand for the technology within the
industry. The expectation is that several of these brands will
prescribe that the Xeros Finish technology can be used for the
production of their core fashion ranges in the next 12-24
months.
Outlook
We are buoyed internally by the momentum gathering in our
markets. This, combined with the new licensing agreements and
progress made with pre-existing partnerships place us in a strong
position to deliver the successful commercialisation of our
technologies. The Group expects month on month EBITDA and cash
breakeven during the second half of our financial year to 2024.
Neil Austin
CEO
Financial review
Group revenue was generated as follows:
Unaudited Unaudited 12 months ended
6 months to 6 months to
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Licensing income 11 12 82
Service income 44 27 64
Sale of goods 57 - 18
Other revenue 1 1 -
Total revenue 113 40 164
The Group financial results for the six months ended 30 June
2023 reflect the reduction in costs over the previous 12 months,
alongside the periodic nature of the Group's contracts with
licensing partners, and remain in line with Board expectations,
reflecting Xeros' status as pre-revenue in its volume markets
pending the final stages of commercialisation. The Group recorded a
25.9% decrease in net cash outflow from operations to GBP2.9m in
the period (H1 2022: GBP3.9m). In the period the Group recorded an
adjusted EBITDA loss on continuing operations of GBP2.6m (2022:
loss GBP3.9m), a decrease of 32.2%.
Licensing income represents royalties from licence partners for
the sale of XDrum machines and revenue to Xeros for the sale of
XOrbs, which has remained broadly static against the previous
period. Service income and machine sales represents payments from
existing Xeros customers in the UK and Europe. The Group expects
that future revenues will be comprised mostly of licensing revenue
and revenue from the sale of goods, as it supplies XOrbs to
customers.
Gross profit for the six months ended 30 June 2023 rose to
GBP0.1m (2022: GBP0.0m) due to increased contribution from service
income and the sale of goods.
Administrative expenses decreased by 32.9% to GBP2.8m (2022:
GBP4.2m) reflecting a reduction in headcount alongside the timing
of the Group's major costs. Headcount fell in comparison with the
previous year, with 32 employees as of 31 August 2023 (2022:
42).
Adjusted EBITDA is considered one of the key financial
performance measures of the Group as it reflects the true nature of
our continuing trading activities. Adjusted EBITDA is defined as
the loss on ordinary activities before interest, tax, share-based
payment expense, non-operating exceptional costs, depreciation and
amortisation.
The Group decreased its operating loss to GBP2.7m (2022:
GBP4.2m), a decrease of 35.0%. The loss per share was 1.81p (2022:
loss 17.51p).
Net cash outflow from operations decreased to GBP2.9m (H1 2022:
GBP3.9m), a decrease of 25.8% in line with the decrease in adjusted
EBITDA in the period, with a small working capital outflow over the
prior period. The Group had existing cash resources (including cash
on deposit) as at 30 June 2023 of GBP3.5m (2022: GBP3.8m) and
remains debt free. Group cash as at 31 August 2023 is GBP2.6m.
Overall cash utilisation remains in line with the Board's
expectations at below GBP0.5m per month. The directors expect cash
utilisation to remain at the current level until such time as
higher licensing revenue is generated from our licence partners and
the Board will remain vigilant to ensure adequate liquidity in the
business until such time as the Group becomes cash generative
which, as stated above, we now believe will occur during the second
half of our financial year to 31 December 2024.
Alex Tristram
Director of Finance
Consolidated statement of profit or loss and other comprehensive
income
For the six months ended 30 June 2023
Unaudited Unaudited
Six months Six months 12 months
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Note GBP'000 GBP'000 GBP'000
Revenue 113 40 164
Cost of sales (28) (43) (80)
_______ _______ _______
Gross profit/(loss) 85 (3) 84
Administrative expenses (2,791) (4,160) (7,518)
Adjusted EBITDA* (2,642) (3,899) (7,368)
Share based payment expense 9 (184) 79
Depreciation of tangible fixed
assets (73) (80) (145)
------------------------------------------------ ---------- ---------- -----------
Operating loss (2,706) (4,163) (7,434)
Finance income - 9 16
Finance expense (19) (10) (30)
_______ _______ _______
Loss before taxation (2,725) (4,164) (7,448)
Taxation 3 (1) (1) 515
_______ _______ _______
Loss after tax (2,726) (4,165) (6,933)
_______ _______ _______
Other comprehensive loss
Items that are or maybe reclassified
to profit or loss:
Foreign currency translation differences
- foreign operations 9 (6) (3)
___ ____ __ _____ _______
Total comprehensive expense for
the period (2,717) (4,171) (6,936)
___ ____ ____ _ __ _______
Loss per ordinary share
Basic and diluted on loss from
continuing operations 6 (1.81)p (17.51)p (14.29)p
_______ _______ _______
*Adjusted EBITDA comprises loss on ordinary activities before
interest, tax, share-based payment expense, depreciation and
amortisation.
Consolidated statement of changes in equity
For the six months ended 30 June 2023
Foreign
Deferred currency Retained
Share Share share Merger Warrant translation earnings
capital premium capital reserve reserve reserve deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2022 3,568 121,018 - 15,443 - (2,206) (130,761) 7,062
Loss for the
year - - - - - - (6,933) (6,933)
Other comprehensive
expense - - - - - (3) - (3)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Loss and total
comprehensive
expense for the
period - - - - - (3) (6,933) (6,936)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Transactions
with Owners recorded
directly in equity:
Change in nominal
value of ordinary
shares (3,544) - 3,544 - - - - -
Issue of shares
following placing
and open offer 127 6,234 - - - - - 6,361
Costs of share
issues - (539) - - - - - (539)
Warrant expense - 947 - (947) - - -
Share based payment
expense - - - - - - (79) (79)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Total contributions
by and distributions
to owners (3,417) 6,642 3,544 - (947) - (79) 5,743
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
At 31 December
2022 151 127,660 3,544 15,443 (947) (2,209) (137,773) 5,869
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
At 1 January
2022 3,568 121,018 - 15,443 - (2,206) (130,761) 7,062
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Loss for the
period - - - - - - (4,165) (4,165)
Other comprehensive
expense - - - - - (6) - (6)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Loss and total
comprehensive
expense for the
period - - - - (6) (4,165) (4,171)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Transactions
with Owners recorded
directly in equity: -
Share based payment
expense - - - - - - 184 184
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Total contributions
by and distributions
to owners - - - - - - 184 184
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
At 30 June 2022 3,568 121,018 - 15,443 - (2,212) (134,742) 3,075
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Balance at 1
January 2023 151 127,660 3,544 15,443 (947) (2,209) (137,773) 5,869
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Loss for the
period - - - - - - (2,726) (2,726)
Other comprehensive
expense - - - - - 9 - 9
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Loss and total
comprehensive
income for the
period - - - - 9 (2,726) (2,717)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Transactions
with Owners recorded
directly in equity:
Share based payment
expense - - - - - - (9) (9)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Total contributions
by and distributions
to owners - - - - - (9) (9)
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
At 30 June 2023 151 127,660 3,544 15,443 (947) (2,200) (140,508) 3,143
---------------------- -------- -------- -------- -------- -------- ------------ --------- -------
Consolidated statement of financial position
As at 30 June 2023
Unaudited Unaudited
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------ --------- --------- -----------
Assets
Non-current assets
Property, plant and equipment 934 834 821
Trade and other receivables - 17 6
------------------------------ --------- --------- -----------
934 851 827
------------------------------ --------- --------- -----------
Current assets
Inventories 162 111 164
Trade and other receivables 262 363 387
Cash on deposit 4 970 4
Cash and cash equivalents 3,494 2,840 6,465
------------------------------ --------- --------- -----------
3,922 4,284 7,020
------------------------------ --------- --------- -----------
Total assets 4,856 5,135 7,847
------------------------------ --------- --------- -----------
Liabilities
Non-current liabilities
Right of use liabilities (689) (653) (624)
Deferred tax (38) (38) (38)
(727) (691) (662)
Current liabilities
Trade and other payables (986) (1,369) (1,316)
(986) (1,369) (1,316)
------------------------------ --------- --------- -----------
Total liabilities (1,713) (2,060) (1,978)
------------------------------ --------- --------- -----------
Net assets 3,143 3,075 5,869
------------------------------ --------- --------- -----------
Equity
Share capital 151 3,568 151
Share premium 127,660 121,018 127,660
Deferred share capital 3,544 - 3,544
Merger reserve 15,443 15,443 15,443
Foreign currency translation
reserve (2,200) (2,212) (2,209)
Accumulated losses (140,508) (134,742) (137,773)
Warrant reserve (947) - (947)
------------------------------ --------- --------- -----------
Total equity 3,143 3,075 5,869
------------------------------ --------- --------- -----------
Consolidated statement of cash flows
For the six months ended 30 June 2023
Unaudited Unaudited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------- ----------- ------------
Operating activities
Loss before tax (2,725) (4,164) (7,448)
Adjustment for non-cash items:
Depreciation of property, plant and equipment 73 80 145
Share based (credit)/expense (9) 184 (79)
(Increase)/decrease in inventories 2 (3) (56)
(Increase)/decrease in trade and other receivables 130 (3) (15)
Increase/(decrease) in trade and other payables (379) 5 (46)
Finance income - (9) (16)
Finance expense 19 10 30
Cash used in operations (2,889) (3,900) (7,485)
Tax (payments)/receipts (1) (1) 515
Net cash outflow used in operations (2,890) (3,901) (6,970)
---------------------------------------------------- ----------- ----------- ------------
Investing activities
Finance income - 9 15
Finance expense (19) (10) (30)
Cash withdrawn from/(placed on) deposit - 4,353 5,319
Purchases of property, plant and equipment (38) (12) (63)
Net cash inflow/(outflow) from investing activities (57) 4,340 5,241
---------------------------------------------------- ----------- ----------- ------------
Financing activities
Proceeds from issue of share capital, net of costs - - 5,821
Payment of lease liabilities (31) (86) (113)
Net cash (outflow)/inflow from financing activities (31) (86) 5,708
---------------------------------------------------- ----------- ----------- ------------
Increase/(decrease) in cash and cash equivalents (2,978) 353 3,979
Cash and cash equivalents at start of year 6,465 2,483 2,483
Effect of exchange rate fluctuations on cash held 7 4 3
Cash and cash equivalents at end of the period 3,494 2,840 6,465
---------------------------------------------------- ----------- ----------- ------------
Notes to the interim financial information
for the six months ended 30 June 2023
1. General information
The principal activity of Xeros Technology Group plc ("the
Company") and its subsidiary companies (together "Xeros" or the
"Group") is the development and licensing of platform technologies
which transform the sustainability and economics of clothing and
fabrics during their manufacture and over their lifetime of
use.
Xeros Technology Group plc is domiciled in the UK and
incorporated in England and Wales (registered number 8684474), and
its registered office address is Unit 2 Evolution, Advanced
Manufacturing Park, Whittle Way, Catcliffe, Rotherham, S60 5BL. The
Company's principal activity is that of a holding company.
The interim financial information was approved for issue on 27
September 2023.
2. Basis of preparation
The interim financial information has been prepared under the
historical cost convention and in accordance with the recognition
and measurement principles of UK-adopted International Accounting
Standards ("IFRSs").
The interim financial information has been prepared on a going
concern basis and is presented in Sterling to the nearest
GBP'000.
The accounting policies used in the interim financial
information are consistent with those used in the prior year.
The following adopted IFRSs have been issued but have not been
applied by the Group in this financial information. Their adoption
is not expected to have a material effect on the financial
information unless otherwise indicated:
-- Amendments to IAS 21, The Effects of Changes in Foreign Exchange
Rates, effective 1 January 2025
-- Amendments to IAS 7, Statements of Cashflows and IFRS 7, Financial
Instruments, Disclosures, effective 1 January 2024
-- Amendments to IAS 1, Presentation of Financial Statements,
effective 1 January 2024
-- Amendments to IFRS 16, Leases, effective 1 January 2024
Further IFRS standards or interpretations may be issued that
could apply to the Group's financial statements for the year ending
31 December 2023. If any such amendments, new standards or
interpretations are issued then these may require the financial
information provided in this report to be changed. The Group will
continue to review its accounting policies in light of emerging
industry consensus on the practical application of IFRS.
The preparation of financial information in conformity with the
recognition and measurement requirements of IFRS requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual events ultimately may differ from those
estimates.
The interim financial information does not include all financial
risk management information and disclosures required in annual
financial statements. There have been no significant changes in any
risk or risk management policies since 31 December 2022. The
principal risks and uncertainties are materially unchanged and are
as disclosed in the Annual Report for the year ended 31 December
2022.
The interim financial information for the six months ended 30
June 2023 and for the six months ended 30 June 2022 does not
constitute statutory financial statements as defined in Section 434
of the Companies Act 2006 and is neither reviewed nor audited. The
comparative figures for the year ended 31 December 2022 are not the
Group's consolidated statutory accounts for that financial year.
Those accounts have been reported on by the Group's auditor and
delivered to the Registrar of Companies. The report of the auditor
was (i) unmodified, (ii) did not contain a statement under Sections
498(2) or 498(3) of the Companies Act 2006. The report did contain
an emphasis of matter paragraph in relation to a material
uncertainty in respect of the going concern status of the Group as
at 31 December 2022. The circumstances that gave rise to this
emphasis of matter paragraph are unchanged as at the date of this
report.
The half year condensed consolidated financial statements do not
include all of the information and disclosures required for full
annual financial statements and should be read in conjunction with
the group's annual financial statements as at 31 December 2022,
which have been prepared in accordance with UK adopted
International Accounting Standards (IFRS).
IAS 34 'Interim financial reporting' is not applicable to these
half year condensed consolidated financial statements and has
therefore not been applied.
3. Taxation
Unaudited Unaudited
6 months
to 6 months to Year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Current tax:
UK tax credits received in respect
of prior periods - - (517)
Foreign taxes paid 1 1 2
Total tax charge/(credit) 1 1 (515)
----------------------------------- ---------- ----------- -----------
The Group accounts for Research and Development tax credits
where there is certainty regarding HMRC approval. There is no
certainty regarding the claim for the year ended 31 December 2022
and as such no relevant credit or asset is recognised.
4. Trade and other receivables
Unaudited Unaudited
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Due within 12 months:
Trade receivables 4 54 24
Other receivables 40 65 134
Prepayments and accrued income 218 244 229
262 363 387
-------------------------------- --------- --------- -----------
Due after more than 12 months
Other receivables - 17 6
-------------------------------- --------- --------- -----------
There is no material difference between the lease receivable
amounts as in other receivables noted above and the minimum lease
payments or gross investments in the lease as defined by IFRS
16.
The minimum lease payment is receivables as follows:
Unaudited Unaudited
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Not later than one year 17 27 25
Later than one year not later
than five years - 17 6
17 44 31
------------------------------ --------- --------- -----------
Contractual payment terms with the Group's customers are
typically 30 to 60 days. The Directors believe that the carrying
value of trade and other receivables represents their fair value.
In determining the recoverability of trade receivables the
Directors consider and change in the credit quality of the
receivable from the date credit was granted up to the reporting
date.
5. Trade and other payables
Unaudited Unaudited
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
----------------------------- --------- --------- -----------
Trade payables 211 368 528
Taxes and social security 115 120 98
Other creditors 26 34 33
Accruals and deferred income 554 793 600
Right of use liabilities 769 707 57
1,675 2,022 1,316
----------------------------- --------- --------- -----------
Current 986 1,369 1,316
Non-current 689 653 624
1,675 2,022 1,940
------------ ----- ----- -----
6. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders by the weighted average number of
shares in issue during the period. The Group was loss-making for
the 6-month periods ended 30 June 2023 and 30 June 2022 and also
for the year ended 31 December 2022. Therefore, the dilutive effect
of share options has not been taken account of in the calculation
of diluted earnings per share, since this would decrease the loss
per share reported for each of the periods reported.
The calculation of basic and diluted loss per ordinary share is
based on the loss for the period, as set out below. Calculations of
loss per share are calculated to two decimal places.
Unaudited Unaudited
6 months
to 6 months to Year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
------------------------------- --------- ----------- -----------
Total loss attributable to the
equity holders of the parent (2,726) (4,165) (6,933)
------------------------------- --------- ----------- -----------
Unaudited Unaudited
6 months
to 6 months to Year ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Issued ordinary shares at the
start of the period 150,982,535 23,784,483 23,784,483
Effect of shares issued for cash 2,412 - 24,742,166
---------------------------------- ----------- ----------- -----------
Weighted average number of shares
at the end of the period 150,984,947 23,784,483 48,526,649
---------------------------------- ----------- ----------- -----------
Unaudited Unaudited
6 months
to 6 months to Year ended
30 June 30 June 31 December
2023 2022 2022
------------------------------ --------- ----------- -----------
Basic and diluted on loss for
the period (1.81)p (17.51)p (14.29)p
------------------------------ --------- ----------- -----------
7. Leases
The Group has leases for office buildings and associated
warehousing and operational space. With the exception of short-term
leases and leases of low-value underlying assets, each lease is
reflected on the statement of financial position as a right-of-use
asset and a lease liability. The Group classifies its
right-of-use-assets in a manner consistent with its property, plant
and equipment.
Each lease generally imposes and restriction that, unless there
is a contractual right for the Group to sublet the asset to another
party, the right-of-use-asset can only be used by the Group. Leases
are either non-cancellable or may only be cancelled by incurring a
substantive termination fee. The Group is prohibited from selling
of pledging the underlying leased assets as security. For leases
over office buildings and warehousing and operations space, the
Group must keep those properties in a good state of repair and
return the properties in their original condition at the end of the
lease. Further, the Group must insure items of property, plant and
equipment and incur maintenance fees on such items in accordance
with the lease contracts.
The table below describes the nature of the Group's leasing
activities by type of right-of-use asset recognised on the
statement of financial position:
Remaining Average No. of leases
No. of right-of-use range remaining with termination
assets leased of term lease term options
Land and buildings 2 57 -104 months 81 months 2
------------------- ------------------- -------------- ----------- -----------------
Right-of-use assets
Additional information on the right-of-use assets by class is as
follows:
Land and buildings
GBP'000
Balance as at 31 December 2021 14
----------------------------------- ------------------
Additions in the period 775
----------------------------------- ------------------
Depreciation charged in the period (34)
----------------------------------- ------------------
Balance as at 30 June 2022 755
----------------------------------- ------------------
Depreciation charged in the period (37)
----------------------------------- ------------------
Balance as at 31 December 2022 718
----------------------------------- ------------------
Additions in the period 154
----------------------------------- ------------------
Depreciation charged in the period (64)
----------------------------------- ------------------
Balance as at 30 June 2023 808
----------------------------------- ------------------
Lease liabilities
Lease liabilities are presented in the statement of financial
position as follows:
Unaudited Unaudited
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
Current 80 54 57
Non-current 689 653 624
769 707 681
------------ --------- --------- -----------
8. Seasonality
The Group experiences no material variations due to
seasonality.
9. Availability of interim statement
This interim statement will be available on Xeros' website at
www.xerostech.com .
Forward-looking statements
This announcement may include certain forward-looking
statements, beliefs or opinions, including statements with respect
to Xeros' business, financial condition and results of operations.
These forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believes",
"estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology. These statements are made by the
Xeros Directors in good faith based on the information available to
them at the date of this announcement and reflect the Xeros
Directors' beliefs and expectations. By their nature these
statements involve risk and uncertainty because they relate to
events and depend on circumstances that may or may not occur in the
future. A number of factors could cause actual results and
developments to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
developments in the global economy, changes in government policies,
spending and procurement methodologies, and failure in health,
safety or environmental policies.
No representation or warranty is made that any of these
statements or forecasts will come to pass or that any forecast
results will be achieved. Forward-looking statements speak only as
at the date of this announcement and Xeros and its advisers
expressly disclaim any obligations or undertaking to release any
update of, or revisions to, any forward-looking statements in this
announcement. No statement in the announcement is intended to be,
or intended to be construed as, a profit forecast or to be
interpreted to mean that earnings per Xeros share for the current
or future financial years will necessarily match or exceed the
historical earnings. As a result, you are cautioned not to place
any undue reliance on such forward-looking statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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Policy.
END
IR PPUCABUPWGQQ
(END) Dow Jones Newswires
September 27, 2023 02:00 ET (06:00 GMT)
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