TIDMZED
RNS Number : 8194I
Zenova Group PLC
21 April 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
("MAR") WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN
21 April 2022
Zenova Group PLC
("Zenova", the "Company" or the "Group")
Annual Results for the period ended 30 November 2021
Zenova Group PLC (AIM: ZED) , a provider of innovative fire
safety and heat management technology and products, today announces
its results for the year ended 30 November 2021.
Highlights for the period
-- Loss for the year of GBP1.1 million mainly arising from costs
of research and development, testing and certification, staff cost,
and professional fees as Zenova Group Plc establishes its position
in the market.
-- Zenova Group Plc was incorporated on 14 May 2021 and acquired
the entire share capital of Zenova Limited on 20 May 2021.
-- On 22 July 2021 Zenova Group Plc was admitted to AIM, in
conjunction with raising GBP4.5 million before costs.
-- In September 2021 Keswick Enterprises Group Ltd was appointed
to distribute, warehouse, and provide logistics support for our
innovative insulation products globally, and to provide a complete
supply chain where required.
-- Announcement of newly developed Zenova WB wildfire barrier fluid (WB) in October 2021.
-- Major contract secured with Spark Global Australia Pty Ltd in
Victoria, Australia, a newly formed affiliate of a major Australian
construction company for the supply of Zenova products in Australia
with a minimum commitment of GBP2 million each year. Products being
supplied include Zenova IR thermal insulation render (IR), Zenova
IP thermal insulation paint (IP) and Zenova FP fire protection
paint (FP).
-- Major contract secured with a Spanish company that has become
an Authorised Distributor of Zenova products and will promote and
sell them to its clients in Spain, Germany, Austria, and
Switzerland. The Authorised Distributor is contracted to purchase a
minimum value of EUR9.8 million of Zenova's products over the next
three-years, with EUR1.8 million due in 2022.
Post period end highlights
-- Successful launch of 3 key products (all independently
certified and validated) into the market: FP, IP and IR.
-- Implementation of trials of IP and IR for Southdown Housing
Association in East Sussex with successful results which are
independently verified by a third-party using infrared imagery
testing.
-- An agreement entered with Omnis Panels LLC to distribute
Zenova products throughout the construction sector in the United
Stated of America.
-- Sales of IP, IR and FP made in the UK and Germany with
product shipped via Sub-Distributors appointed in these
territories.
-- Additional validation of WB and FP by Professor Claire
Belcher and her team from the University of Exeter wildFIRE Lab,
with further successful tests of FP conducted by the Dorset and
Wiltshire Fire Service under the supervision of Professor Belcher
and her team.
-- Scalable manufacturing partners put in place to ensure the
supply of all Zenova products can satisfy the expected growth in
demand for products across multiple geographies.
-- Trial agreed with the NHS Epsom and St Helier University
Hospitals Trust for FP, IP and IR with 'side-by-side' comparison
analysis to be independently verified.
-- Further testing underway including specific legislation tests
for the use of FP on structural steel.
Outlook
During Zenova's inaugural year as an AIM listed company it has
made good progress. It has developed, manufactured, and is
marketing and selling its first three products - Zenova FP fire
protection paint, Zenova IP thermal insulation paint, and Zenova IR
thermal insulation render, with three further products currently in
the testing phase, and expected to be brought to market later in
2022.
2022 will be a critical year for the Company but its client base
is developing well, and in line with current expectations. It is
the Company's objective to build on its positive momentum to date,
including through the addition of its new products, with the aim of
becoming cash flow positive, financially self-sustaining, and to be
operating profitably by 2023.
The year is unlikely to be without operational and other
challenges, but the Company believes that it is well placed to
manage these and is confident of its potential to deliver
significant returns to shareholders whilst also delivering safer
and more carbon friendly environments to those customers utilising
its unique range of products.
Tony Crawley, Chief Executive of Zenova Group PLC commented:
"Since listing on AIM in July 2021, Zenova has made significant
progress in the development of its products, in testing that meets
the highest standards and latest building regulations, and in sales
and marketing. We are experiencing significant global interest in
our products, and we expect our order books to grow at an
increasing rate over the next 12 months as we focus on delivering
sales in our target markets.
"Later in 2022 we expect to launch three further products into
our portfolio. They provide innovative solutions which are
underpinned by extensive testing, and they will help address the
ongoing global challenges surrounding heat management and fire
safety.
"Our success to date is in no small measure because of the hard
work and dedication of our employees and partners, who have
embraced our vision to establish Zenova as a trusted supplier of
effective and commercially viable heat management and fire safety
products. I would like to thank them for their support and
dedication, and I look forward to working with them as we help
Zenova fulfil its potential over the coming year, and beyond."
For further information please contact:
Zenova Group PLC
Tony Crawley, Chief Executive Officer Via Orana Corporate LLP:
Don Nicolson, Non-Executive Chairman Anthony Eastman
Tel: +44 20 3475 6834
SPARK Advisory Partners Limited (Nominated Adviser)
Matt Davis / Adam Dawes Tel: +44 20 3368 3550
SI Capital Limited (Broker)
Nick Emerson Tel: +44 1483 413 500
Redbine Ltd (Media Enquiries)
Paul Dulieu Tel: +44 203 093 9530
+44 7554 521 421
Email: paul@redbine.co.uk
Chairman's Statement
I am pleased to report that during our inaugural year quoted on
the AIM market your company has been making good progress. We now
have a fully functioning executive management team, which includes
a dynamic sales force, as well as technical and development
directors supervising those aspects of our operations.
Your company has developed, manufactured and is marketing and
selling its first three products - Zenova FP fire protection paint,
Zenova IP thermal insulation paint, and Zenova IR thermal
insulation render. The three products have been independently
tested and certified to the latest international standards, are in
the market and available for purchase. As a result of manufacturing
agreements that have been put in place, the Company is also ready
and able to fulfil demand as it develops across multiple
geographies.
Your company also has three other products which are currently
in the testing phase, and we expect to begin their roll out later
in 2022. These include our fire extinguishers which utilises our
very powerful fluid that can extinguish all types of fire,
obviating the need for multiple types of fire extinguisher in a
setting. We also have a sprinkler system that is retrofittable and,
unlike any other sprinkler system currently on the market, can be
utilised in kitchens, where the majority of domestic fires
start.
We believe that there is already a very big demand for these new
products.
The third product currently undergoing testing is our Zenova WB
wildfire barrier fluid, which prevents the ignition and spread of
wildfires in vegetation on which it has been applied.
As well as developing our own offices in the UK, Canada and
Japan, following admission to the AIM market we have secured a
number of sales contracts via appointed sub-distributors in various
territories around the world. These include Australia, Germany,
Spain, Austria, Switzerland and the USA. We are now seeing momentum
build as our effective products penetrate various markets
commencing with the UK.
Customers currently include local authorities who are focussed
on making their tower block social housing stock safe, as well as
complying with the newly understood requirement to insulate older
buildings to save money and reduce their carbon footprints. We have
many other sales leads and opportunities which we are pursuing.
The results for the year reflect the implementation of the
board's vision, as well as the costs of admission to AIM, the
rigorous testing and certification that has been conducted prior to
bringing the products to market, staffing up and developing our
logistics. At 30 November 2021, our cash balance was GBP2.95
million, which is broadly in line with our plans and, we believe,
is sufficient to fund capital expenditure and operating costs until
the business becomes cashflow positive and financially
self-sustaining.
Your board is responsible for ensuring that the company operates
to the highest standards of corporate governance, ethics, and
integrity. Your non-executive directors bring a wide range of
skills and common sense to our deliberations, particularly in
respect of relevant industry knowledge and experience, including
the all-important issue of health and safety. This is a key focus
area for the board as it relates to our products, their use in the
marketplace and the job they are deployed to do. There is a high
degree of constructive challenge at the board, and l believe your
board is working well.
The key to our success to date is our employees. They have
worked hard and embraced our vision to establish Zenova as a
trusted supplier of effective and commercially viable products that
will do the job they are designed to do, and provide security and
comfort in these very significant areas of importance. We are most
grateful for their support and dedication.
Looking forward, 2022 will be a critical year for your company.
Our order book is developing well, and in line with expectations,
and it is our objective is to build on our sales momentum to date,
including through the addition of new products, so as to become
cash flow positive, financially self-sustaining and to be operating
profitably by 2023.
The year is unlikely to be without operational and other
challenges, but l believe that we are well placed to manage these.
I am very excited about the potential of your company to deliver
significant returns to shareholders whilst at the same time
delivering safer and more carbon friendly environments to those
customers utilising our unique range of products.
Thank you for your ongoing support.
Don Nicolson
Non-executive Chairman
Strategic Report by the Chief Executive
History
The founders of the Group, who are vastly experienced in the
fire safety and insulation industry, started research and
development in 2017. A significant driver behind the Group's
formation was a perceived lack of technological advancements in the
fire safety industry. In the Director's opinion, the landscape of
fire safety has seen little significant development for more than
fifty years, resulting in fire-fighters across the world using
archaic technology, that is not only resource exhaustive but can
also produce harmful by-products.
Realising an inherent gap in the market, the team, led by Tony
Crawley, the Company's Chief Executive Officer, developed effective
methods of deterrence, focusing first on fire extinguishing fluid
and associated hardware systems. Following encouraging test
results, the founders increased the range of products in
development to include paints and renders. By using innovative
mixes, and refining the formulation and development process, the
team were able to produce industry leading solutions to a number of
fire protection and temperature management problems. This was
achieved without compromising the sustainability of natural and
economical resources, including personal health and safety.
Zenova Ltd was formed on 20 January 2020 as a vehicle to
commercialise the intellectual property created by the
founders.
During 2021 in the lead up to the admission of Zenova onto the
AIM market in July, significant progress was made in the testing,
certification, and accreditation of the products brought to market
and available after July 2021.
These included Zenova FP fire protection paint, Zenova IP
thermal insulation paint and Zenova IR thermal insulation
render.
The innovative and very effective properties of these products
have resulted in significant interest globally and Zenova has
adopted a strategy of appointing sub-distributers in several
important territories where it believes the products can
successfully penetrate these markets. A number of these
sub-distributors have committed to achieve levels of annual sales
as indicated after each country below:
These territories include Australia (first year GBP2m), Germany,
Spain, Austria and Switzerland) (first year Eu1.8m); United States
of America (second year US$2m) as well as a number of
sub-distributors in the UK.
The company is currently conducting trials of various of its
products in key sectors with such organisations as The NHS (Epsom
and St Helier University Hospital NHS trust); The Southdown Housing
Association; Dorset & Wiltshire Fire Services; The University
of Exeter wildFIRE Lab, and Oxford City Council; all of which are
being independently monitored.
Zenova has had its Zenova FP fire protection paint specified for
use in protecting a 22-story social housing tower block by Enfield
Council, which has identified a further 15 tower blocks within its
jurisdiction that suffer from the same fire safety problems.
In addition, Redbridge Council has also specified Zenova FP fire
protection paint for use in a council owned mixed use building
which faces similar fire safety issues. In these, and other,
instances, Zenova's FP fire protection paint provides an effective
solution to a wide reaching problem, in that buildings are at risk
of fire as a result of previously applied protection being
inadequate, or there being no protection in place at all.
Zenova is also testing its insulation products with a number of
UK authorities in order to assist them in moving towards achieving
a much sought-after reduction in heat loss or cooling requirement
in older buildings, and working towards compliance with new
government directives on energy saving efficiency, insulation and
measurements to combat global warming.
The company is also benefitting from government initiatives
around the world as they legislate to combat the worst effects of
global warming, including the heightened risk of fire generally,
and the risks associated with large buildings they are responsible
for in which large numbers of people live. Zenova provides a
solution to address these problems and help tackle this very large
social issue.
By way of example, in London alone, the London fire Brigade has
identified over 1,000 multi-resident buildings, including tower
blocks, in which a significant fire risk exists.
Products
In 2021, the Group's strategy has focused on the launch of
Zenova paint product lines and insulating render, followed closely
by the introduction of fire extinguishers, fire suppressant fluids,
wildfire fluids and sprinklers.
ZENOVA FX - Fire Extinguisher
Zenova FX is a fire extinguisher like no other. It puts out
class A, B, F fires and will come with smart technology that
indicates when it has been used, its location, and pressure levels
via 24/7 automated remote monitoring. A Zenova FX unit can be
installed within 10 minutes.
ZENOVA CS - Ceiling Sprinkler
Zenova CS blends the best features of both detectors and
extinguishers while avoiding the drawbacks of each. It senses heat
rather than smoke, resulting in less false alarms, and it's an
automatic system that doesn't require a battery or a person to
operate it.
The modular Zenova CS unit expels 2.4 - 4.8 L of proprietary
Zenova FX suppression fluid at high-pressure to suppress the source
of a fire, yet maintains visibility that allows occupants to
evacuate quickly.
ZENOVA FP - Fire Protection Paint
Zenova FP is a water based, fire protection paint (also known as
a 'thermofoaming' or 'intumescent' paint), which can be used on any
surface.
When exposed to heat or flames, the paint expands and creates a
solid foam-like crust which will not burn and insulates the surface
it is painted on. This prevents surfaces from catching fire and
stops fire spreading
It has been tested by global fire industry experts and complies
with UK building regulations and the latest UK and European fire
safety standards.
ZENOVA IP - Thermal Insulation Paint
Zenova IP thermal insulation paint embeds the most modern
insulating technology in a thermos-like ultra-thin layer. Zenova IP
saves energy by increasing the thermal insulation level in
commercial and residential buildings. Solar heat can increase the
temperature within a building by 75% to 90%.
Zenova IP has been independently tested and validated to
deflect, absorb and dissipate up to 75% of this heat, thereby
reducing the inside temperature by up to 45%. Suitable for both
exterior and interior, on any type of surface.
ZENOVA IR - Thermal Insulation Render
Zenova IR is an insulation render that can be applied to
internal and external walls in commercial and residential buildings
to provide immediate insulation benefits.
ZENOVA WB - Wildfire Barrier Fluid
Zenova WB is a wildfire barrier fluid (applied via spray wands
or aerial drops), which provides a virtual barrier where fire
simply will not burn. Repeated tests on a variety of extremely dry
wildfire fuels (grasses, hays, brush) demonstrates the incredible
fire resistance Zenova WB provides, while remaining viable after
application for 30+ days in dry conditions.
By creating an effective fire stop, Zenova WB provides essential
property and personal protection for dwellings, buildings, people
or wildlife that find themselves in harm's way when these
devastating fires happen.
As more of Zenova's products reach the market, the Directors
believe there will be significant opportunities for cross-selling
amongst its existing customer bases.
Research and Development
The Group is committed to continuously developing and improving
its products in order to maintain competitive advantage. The Group
has a small research and development team, engaged under consulting
agreements, that is involved in product testing, development and
refining the formulas and processes used for production. It is
anticipated that in the short to medium term, the Group's R&D
efforts will primarily focus on the final stages of development for
new products and the requisite testing and certification processes
for new products to be taken to market. Once this has been
completed, the Group will continue to invest to increase its
portfolio of successful test results and certifications. The
Directors believe that this will maintain what they believe to be
the Group's significant competitive advantage.
New Products
Zenova is currently in testing phase with its Zenova WB wildfire
barrier fluid which is capable of preventing the ignition and
spread of wildfires in vegetation on which it has been sprayed.
This has been tested by the wildFIRE Lab research facility at the
University of Exeter. It is non-toxic and will last for 30 days in
situ (in the absence of rain) in any climate conditions. The
company expects to have the product ready for market before the end
of the current year.
Zenova is also currently testing its range of fire extinguishers
which utilise its unique fluid which is capable of extinguishing
all types of fires and is much more effective than existing fire
extinguishing methods, such as water, powder or foam. In tests, one
9 litre Zenova extinguisher was able to completely extinguish a car
fire. By comparison, an equivalent car fire required 1,800 litres
of water to be delivered by a fire truck, with all associated water
runoff becoming very toxic.
This product, once fully certificated to the latest standard of
EN3 certification, will come to market before the end of 2022. A
further mini extinguisher, the FX 600 will come to market by Q3
2022.
The final product currently in testing is the Zenova CS system,
a fully patented sprinkler (again powered by Zenova's unique
fluid). Approximately 75% of all residential fires in England start
in the kitchen. However, no current sprinkler can be legally fitted
in a kitchen as water applied onto various types of oil fire can
cause explosions. The Zenova CS sprinkler system can be fitted
retroactively in kitchens, as well as any location within a
building where fires may occur, or which form an escape route, and
can extinguish any type of fire. As it requires no piping or
storage tanks beyond the cylinders build into the individual units,
it is inexpensive, quick, and simple to install. In addition, risks
to health, such as from legionnaires disease, and the
practicalities and costs associated with the large tanks of water
required for a conventional sprinkler system are removed.
Zenova can supply the demand for its products because it
outsources the manufacture of these products to a small number of
trusted independent global manufacturers, that have the capacity to
increase production accordingly.
The company is focussed on aggressively marketing and selling
its product throughout the world and meeting a very large need
which is being increasingly understood, as global warming threatens
property, livelihood and lives themselves. The need to remediate
older buildings, as well as provide proper effective protection for
new build properties in both the commercial and residential sphere,
has created an enormous potential market which Zenova is uniquely
placed to address.
Zenova has positioned itself to be a solutions provider on a B2B
basis, and is initially targeting local authorities, infrastructure
providers, warehousing, Health Authorities, social housing
providers and commercial real estate developers. Other industries
expressing interest in the company's products include shipping
companies, oil and gas companies and car manufacturers (with a
particular emphasis on electric vehicles with the identified
increased risk of battery fires).
Operations
Manufacturing is subcontracted to specialist manufacturers in
each category of product. The Group sources and approves the
manufacturing components and processes used by the manufacturers in
advance of first production. Zenova maintains responsibility for
ongoing manufacturing oversight and implementation of manufacturing
strategy based on forecasts and evident product supply and demand
levels. The manufacturing process for all products and the time
scale to produce finished goods is short. The Group has entered
into detailed manufacturing contracts with manufacturers to produce
the initial volumes of its paints, primers, render and firefighting
fluid.
The Group is in discussions with other manufacturers regarding
agreements to produce other products including fire extinguishers
and ceiling sprinklers.
Under the terms of the manufacturing contracts, all paints,
primers, and rendering solutions are manufactured and packaged in
appropriately sized tins and canisters in the UK, Canada and Europe
by the manufacturer.
Zenova brand labelling and packaging is also carried out by the
manufacturer under Zenova's guidance. The manufacturers will also
produce Zenova FX fluid which will be supplied in a range of
container sizes dependant on the end use. The Company is in
negotiations with additional manufacturers to support the Group's
growth in the short to medium term.
Zenova Group PLC has appointed The Keswick Enterprises Group Ltd
to distribute, warehouse and provide logistics support for its
insulation products globally, and to provide a complete supply
chain where required.
The Keswick Enterprises Group is a privately owned UK-based
business, with subsidiaries in the UK, Ireland and Central Europe,
and offers extensive global experience in sourcing, supply chain,
forwarding and fulfilment related activities. Led by John Harvey
and a group of former Tibbett and Britten Group PLC executives,
Keswick was set up in 2004, and brings a wealth of international
contacts and experience to Zenova.
Sales and Marketing
Sales is currently concentrated on large business-to-business
accounts in sectors such as construction, manufacturing, and
industrial and public sector bodies. The Group targets sales
directly to the end user, by appointing sub-distributors to make
sales on its behalf and engages with fire safety consultants that
advise the end user.
In the experience of the Directors, large businesses, and public
sector bodies in particular, engage the expertise of accredited
industry specific consultants to review their particular
requirements and provide recommendations on the most appropriate
approach.
The Group's outsourced manufacturers produce the required
products and Zenova arranges delivery to either the sub-distributor
or directly to the end user in pre-determined quantities. Zenova
also targets sales directly to the end user. In this case, the
manufacturers produce the necessary products and Zenova arranges
collection, warehousing and delivery to the end user.
Products are marketed via the following channels:
-- attending industry trade shows and providing demonstrations;
-- creating and distributing print marketing materials for each product line;
-- distributing product samples;
-- educational webinars, seminars, and training on a one-to-one
basis and via an e-platform); and
-- developing social media and specific industry focused
advertising campaigns. The Group intends to target sales in the UK,
Canada, and Australia initially, and will expand across Europe, the
USA, Middle East and other locations within the first twelve months
following Admission.
Since listing in July 2021, the Group has secured two new major
contracts for sales of its products.
Spark Global Australia Pty Ltd in Victoria, Australia, a newly
formed affiliate of a major Australian construction company has
signed an agreement for the supply of its products in Australia
with a minimum commitment of GBP2 million each year. Products being
supplied include Zenova IR thermal insulation render (IR), Zenova
IP thermal insulation paint (IP) and Zenova FP fire protection
paint (FP).
An additional major contract secured with a Spanish company that
has become an Authorised Distributor of Zenova products and will
promote and sell them to its clients in Spain, Germany, Austria,
and Switzerland. The Authorised Distributor has committed to
purchase a minimum value of EUR9.8 million of Zenova's products
over the next three-years, with EUR1.8 million due in 2022. Zenova
has entered into nine distribution and agency agreements to
date.
The Future
We anticipate that the next twelve months will be focussed on
launching the remaining portfolio of products and meeting our sales
targets. Zenova expects that its order book will grow at an
increasing pace as its distribution channels gear up and growth
takes place with the ever-developing sample dissemination and
trialling results are published.
Finally, I would like to thank our staff and our Board
colleagues for their unstinting efforts on behalf of Zenova Group
Plc.
Tony Crawley
Chief Executive Officer
Dividends
The Company has not declared or paid cash dividends on the
Existing Ordinary Shares during the current period or
subsequently.
The payment of any future dividends on the ordinary shares will
depend on the future earnings of the Company. The Board has no
current intention of paying a cash dividend to Shareholders as the
Board currently intends to invest the Company's cash reserves and
any cash generated into driving business growth but will consider
declaring a dividend only when prudent to do so and in the context
of the cash generated by the business.
Consolidated Statement of Comprehensive Income for the year
ended 30 November
314-day period
Year ended ended 30
30 November November
2021 2020
GBP'000 GBP'000
------------------------- ----- ------------- ---------------
Continuing operations Note
Revenue 6 -
Cost of sales 5 - -
------------- ===============
Gross profit 6 -
Administrative expenses 5 (1,147) (77)
------------- ---------------
Operating loss (1,141) (77)
============= ===============
Other comprehensive
income - -
Loss before taxation (1,141) (77)
============= ===============
Taxation 7 (15) 15
Loss after taxation (1,156) (62)
============= ===============
Basic loss per share 8 (2.72p) (62,000p)
Diluted loss per share 8 (2.72p) (62,000p)
Consolidated Statement of Financial Position
As at 30 As at 30
November November
Company Number: 13403221 Note 2021 2020
GBP'000 GBP'000
-------------------------------------- ----- ----------- -----------------------
ASSETS
NON-CURRENT ASSETS
Goodwill 10 2,346 -
Property, plant & equipment 11 8 -
Rights of use asset 12 149 -
Deferred tax - 15
----------- -----------------------
TOTAL NON-CURRENT ASSETS 2,503 15
----------- -----------------------
CURRENT ASSETS
Trade and other receivables 13 173 2
Cash and cash equivalents 2,936 201
----------- -----------------------
TOTAL CURRENTASSETS 3,109 203
-----------
TOTAL ASSETS 5,612 218
=========== =======================
LIABILITIES
NON-CURRENT LIABILITIES
Payables: Amounts falling due after
one year 14 50 50
Lease Liability 148 -
----------- -----------------------
TOTAL NON-CURRENT LIABILITIES 198 50
CURRENT LIABILTIES
Borrowings 15 - 200
Payables: Amounts falling due within
one year 14 135 30
----------- -----------------------
135 230
-----------
TOTAL LIABILITIES 333 280
=========== =======================
NET ASSETS 5,279 (62)
=========== =======================
EQUITY
Share capital 17 94 -
Share premium 17 6,310 -
Other reserves (68) -
Share based payment
reserve 18 161 -
Retained earnings (1,218) (62)
-----------
TOTAL EQUITY 5,279 (62)
=========== =======================
Consolidated Statement of Cash Flows
314 day
Period
Year ended ended 30
30 November November
2021 2020
GBP'000 GBP'000
----------------------------------------------- ------------- ----------
CASH FLOWS USED IN OPERATING ACTIVITIES
Loss for the period (1,156) (62)
Adjustments to cash flows from non-cash
items
Income tax expense 15 (15)
Share based payment
charge 161 -
Adjustments for changes in working
capital
Trade and other receivables (171) (2)
Rights of use asset (149) -
Trade and other payables 106 30
Lease Liability 148 -
NET CASH FLOW USED IN OPERATING ACTIVITIES (1,045) (49)
------------- ----------
CASH FLOW USED IN INVESTING ACTIVITIES
Expenditure on property plant and equipment (8) -
------------- ----------
NET CASH FLOW USED IN INVESTING ACTIVITIES (8) -
------------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Issue of share capital -
net of costs 3,609
Bank loan - 50
Issue of convertible
loan note 180 200
NET CASH FLOW FROM FINANCING ACTIVITIES 3,789 250
------------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,735 201
------------- ----------
CASH AND CASH EQUIVALENTS AT THE START OF THE
PERIOD 201 -
------------- ----------
CASH AND CASH EQUIVALENTS AT THE OF THE
PERIOD 2,936 201
============= ==========
In the period ended 30 November 2021 GBP2,415k was paid via a
non-cash transaction for the acquisition of Zenova Distribution
Limited. The consideration for this purchase was the issue of
shares in Zenova Group Plc. Further details can be found in note
10. In addition in the period ended 30 November 2021, GBP380k of
loan notes were settled via the issue of shares as part of the
Initial Public Offering.
Consolidated Statement of Changes in Equity
Share Capital Share Premium Share based Other Reserve Accumulated
payment reserve losses Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------------- -------------- ----------------- -------------- ----------------- -------------
Balance at - - - - - -
20(th) January
2020
Loss and total
comprehensive
loss for the
period - - - - (62) (62)
Transactions
with owners
Balance at 30
November 2020
and 1 December
2021 - - - - (62) (62)
-------------- -------------- ----------------- -------------- ----------------- -------------
Loss and total
comprehensive
loss for the
period - - - - (1,156) (1,156)
Transactions
with owners
Merger reserve
arising on
acquisition of
Zenova Limited - - - (68) - (68)
Share options
charge - - 161 - - 161
Share capital
issued 94 6,310 - - - 6,403
-------------- -------------- ----------------- -------------- ----------------- -------------
Balance at 30
November 2021 94 6,310 161 (68) (1,218) 5,279
============== ============== ================= ============== ================= =============
Notes to consolidated and parent company financial
statements
1. General Information
The principal activity of Zenova Group plc and its subsidiary
and associate companies (collectively "Zenova Group" or "Group") is
development, manufacture and sale of fire-retardant systems.
Zenova Group plc is the Group's ultimate Parent Company ("the
parent company"). It is incorporated in England and Wales and
domiciled in England. The address of its registered office is 172
Arlington Road London NW1 7HL. Zenova Group plc shares are admitted
to trading on the London Stock Exchange's AIM market.
2. Basis of Preparation
The financial information set out herein does not constitute the
Group's statutory financial statements for the year ended 30
November 2021, but is derived from the Group's audited full
financial statements. The auditors have reported on the 2020
financial statements and their report was unqualified and did not
contain statements under s498(2) or (3) Companies Act 2006. The
2021 Annual Report was approved by the Board of Directors on 20
April 2022, and will be mailed to shareholders in due course. The
financial information in this statement is audited but does not
have the status of statutory accounts within the meaning of Section
434 of the Companies Act 2006.
The Group's consolidated financial statements, which form part
of the 2021 Annual Report, have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and the requirements of the
Companies Act applicable to companies reporting under IFRS. IFRS
includes Interpretations issued by the IFRS Interpretations
Committee (formerly - IFRIC).
The consolidated financial statements have been prepared under
the historical cost convention, apart from financial assets and
financial liabilities (including derivative instruments) which are
recorded at fair value through the profit and loss. The preparation
of consolidated financial statements under IFRS requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies.
The functional and presentation currency is the British Pound
Sterling.
The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires the Directors to exercise judgement in
applying the Zenova's accounting policies. The areas where
significant judgements and estimates have been made in preparing
the financial statements are disclosed in more detail und the
critical accounting judgement policies.
3. Significant accounting policies
Summary of significant accounting policies and key accounting
estimates
The principal accounting policies adopted in preparation of
these financial statements are set out below. These policies have
been consistently applied to all periods, unless otherwise
stated.
Going concern
The Group assesses at each reporting date whether it is a going
concern for the foreseeable future. In making this assessment
management considers:
(a) the current working capital position and operational
requirements;
(b) the timing of expected sales receipts and completion of
existing orders;
(c) the sensitivities of forecast sales figures over the next
two years;
(d) the timing and magnitude of planned expenditure; and
(e) the level of indebtedness of the company and timing of when
such liabilities may fall due, and accordingly the working capital
position over the next 18 months.
Management considers in detail the going concern assessment,
including the underlying assumptions, risks and mitigating actions
to support the assessment. The assessment is subject to estimation
uncertainty and there is judgement in determining underlying
assumptions
There are several scenarios which management have considered
that could impact the financial performance of the Group. These
include:
(a) Disruption of the supply chain, and any delays in the supply
of raw material that may impact the ability of the Group to produce
its products.
(b) Delays in testing and certification required for
geographical and sector specific expansion.
(c) Failure of the sales contracts to be realised, and expected
sales growth to fall below expectations.
(d) Changes in legislation that may increase lead times in
production or testing.
(e) Intellectual property on which the company may be reliant to
keep its competitive advantage could be challenged.
As at 31 March 2022 the Group had GBP2.05 million in cash.
If the cash receipts from sales are lower than anticipated the
Group has identified that it has available to it a number of
contingent actions, that it can take to mitigate the impact of
potential downside scenarios. These include seeking additional
financing, leveraging existing sale agreements, reviewing planned
expenditure and reducing overheads.
In conclusion having regard to the existing and future working
capital position and projected sales the Directors are of the
opinion that the application of the going concern basis is
appropriate.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions in the
preparation of financial statements. Estimates and judgements are
continually evaluated based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable that best reflects the conditions and
circumstances that exist and the reporting date.
The principal estimates are judgements that could have effect
upon the Group's financial results are the valuation of share based
payments, valuation of investments and the accounting for
acquisitions. Further details of these estimates and judgements are
set out in the related accounting policies for these items.
Revenue recognition
The Group recognises revenue on the transfer of goods and
services in accordance with the contractual terms entered into with
clients.
The Group has applied IFRS 15 - Revenue from Contracts with
Customers. IFRS 15 establishes the principle that an entity applies
when reporting information about the nature, amount, timing and
uncertainty of revenue and cash flows from contracts with
customers. Applying IFRS 15, an entity recognises revenue to depict
the transfer of promised goods and services to the customer in an
amount that reflects the consideration to which the entity expects
to be entitled in exchanges for those goods and/or services.
To recognise revenue under IFRS 15, management have taken the
following actions:
-- Identify the contracts(s) with a customer.
-- Identify the performance obligations in the contract.
Performance obligations are promises in a contract to transfer to
customer goods and/or services that are distinct.
-- Determine the transaction price. The transaction price is the
amount of consideration to which an entity expects to be entitled
in exchange for transferring promised goods and/or services to a
customer. If the consideration promised in a contract includes a
variable amount, an entity must estimate the amount of
consideration to which it expects to be entitled in exchange for
transferring the promised goods and/or services to a customer.
-- Allocate the transaction price to each performance obligation
on the basis of the relative stand-alone selling price of each
distinct good or service promised in the contract.
-- Recognize revenue when a performance obligation is satisfied
by transferring a promised good or service to a customer (which is
when the customer obtains control of that good or service). A
performance obligation may be satisfied at a point in time
(typically for promises to transfer goods to a customer) or over
time (typically for promises to transfer services to a customer).
For a performance obligation satisfied over time, an entity would
select an appropriate measure of progress to determine how much
revenue should be recognised as the performance obligation is
satisfied.
Having assessed the nature of contracts with customer, it has
been established that the standard will have no impact to the
Group's results.
Segment reporting
IFRS 8 requires that an entity disclose financial and
descriptive information about is reportable segments, which are
operating segments or aggregations of operating segments. Operating
segments are identified on the basis of international reports that
are regularly reviewed by the Board to allocate resources and to
assess performance. Using the Group's internal management reporting
as a starting point the single reporting segment set out in note 4
has been identified.
Foreign currency transaction and balances
In preparing the financial statements of the Group, transactions
in currencies other than the Group's functional currency (foreign
currencies) are recorded at the rates of exchange prevailing on the
dates of the transaction. At each reporting date, monetary assets
and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date.
Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items are included in
statement of total comprehensive income for the period in operation
expenses.
Tax
The tax expenses for the period represents the sum of the tax
currently payable and the deferred tax charge.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised.
The carrying amount of deferred tax assets are reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax is
calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset is realised.
Deferred tax assets and liabilities are offset where there is a
legally enforceable right to set of current tax assets against
current tax liabilities and when the relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Intangible assets
The value of the intangible assets relates to the goodwill
recognised on the acquisition of Zenova Distribution Limited
Goodwill arising on the acquisition of an entity represents the
excess of the cost of acquisition over the Group's interest in the
net fair value of the identifiable assets, liabilities and
contingent liabilities of the entity recognised at the date of
acquisition. Goodwill is initially recognised as an asset at cost
and is subsequently measured at cost less any accumulated
impairment losses. Goodwill is not subject to amortisation but is
tested for impairment annually or whenever there is evidence that
it may be impaired. Goodwill is denominated in the currency of the
acquired entity and revalued to the closing exchange rate at each
reporting period date. Negative goodwill arising on an acquisition
is recognised directly in the income statement. On disposal of a
subsidiary, the attributable amount of goodwill is included in the
determination of the profit or loss recognised in the statement of
comprehensive income on disposal.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any impairment losses. The cost of an
item of property, plant and equipment comprises its purchase price
and any directly attributable costs of bringing the asset to its
working condition and location for its intended use. Expenditure
incurred after items of property, plant and equipment have been put
into operation, such as repairs and maintenance, is normally
charged to profit or loss in the period in which it is incurred. In
situations where it can be clearly demonstrated that the
expenditure has resulted in an increase in the future economic
benefits expected to be obtained from the use of an item of
property, plant and equipment, and where the cost of the item can
be measured reliably, the expenditure is capitalised as an
additional cost of that asset or as a replacement.
Depreciation of items of property, plant and equipment, is
calculated on the straight-line basis to write off the cost of each
item of property, plant and equipment to its residual value over
its estimated useful life.
The estimated useful lives of property, plant and equipment are
as follows:
-- Office equipment - 3-5 years
Where parts of an item of property and equipment have different
useful lives, the cost of that item is allocated on a reasonable
basis among the parts and each part is depreciated separately
Residual values, useful lives and the depreciation method are
reviewed, and adjusted if appropriate, at least at the end of each
reporting period.
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss on disposal or retirement
recognised in profit or loss in the year the asset is derecognised
is the difference between the net sales proceeds and the carrying
amount of the relevant asset.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value. Such investments are those
with original maturities of three months or less.
Receivables
Trade and other receivables are recognised initially at fair
value. They are subsequently measured at amortised cost using the
effective interest method, less provision for impairment. A
provision for the impairment of trade receivables is based on the
lifetime expected credit loss, based on past and forward-looking
information.
Payables
Payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business. Trade and other
payables are measured at initial recognition at fair value and are
subsequently measured at amortised cost using the effective
interest rate method.
Leases
The Group recognises a right-of-use asset and corresponding
liability at the date at which a leased asset is made available for
use by the Group, except for short-term leases (defined as leases
with a lease term of 12 months or less) and leases of low-value
assets. For these leases, the Group recognises the lease payments
as an operating expense on a straight-line basis over the term of
the lease.
Lease liabilities are measured at the present value of the
future lease payments, excluding any payments relating to non-lease
components. Future lease payments include fixed payments,
in-substance fixed payments, and variable lease payments that are
based on an index or a rate, less any lease incentives receivable.
Lease liabilities also take into account amounts payable under
residual value guarantees and payments to exercise options to the
extent that it is reasonably certain that such payments will be
made.
The payments are discounted at the rate implicit in the lease
or, where that cannot be readily determined, at an incremental
borrowing rate.
Right-of-use assets are measured initially at cost based on the
value of the associate lease liability, adjusted for any payments
made before inception, initial direct costs and an estimate of the
dismantling, removal and restoration costs required in the terms of
the lease.
The Group presents right-of-use assets in 'non-current assets'
in the consolidated statement of financial position. Subsequent to
initial recognition, the lease liability is reduced for payments
made and increased to reflect interest on the lease liability
(using the effective interest method).
The related right-of-use asset is depreciated over the term of
the lease or, if shorter, the useful economic life of the leased
asset. The lease term shall include the period of an extension
option where it is reasonably certain that the option will be
exercised. Where the lease contains a purchase option the asset is
written off over the useful life of the asset when it is reasonably
certain that the purchase option will be exercised.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever: -
-- The lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
-- The lease payments change due to changes in an index or rate
or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate (unless the
lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
-- A lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the lease
liability is remeasured by discounting the revised lease payments
using a revised discount rate. Leases for which the Group is a
lessor are classified as finance or operating leases.
A lease is classified as a finance lease if it transfers
substantially all the risks and rewards of ownership to the lessee
and classified as an operating lease if it does not.
Financial instruments
The Group has adopted IFRS 9 in respect of financial
instruments.
Financial assets, including trade and other receivables and cash
and bank balances are initially recognized at transaction price,
unless the arrangement constitutes a financing transaction, where
the transaction is measured at the present value of the future
receipts discounted at a market rate of interest. Such assets are
subsequently carried at amortised cost using the effective interest
method. At the end of each reporting period financial assets
measured at amortised cost are assessed for lifetime expected
credit losses based on past and forward-looking information. If an
asset is impaired the impairment loss is the difference between the
carrying amount and the present value of the estimated cash flows
discounted at the asset's original effective interest rate. The
impairment loss is recognised in the Statement of Comprehensive
Income. If there is a decrease in the impairment loss arising from
an event occurring after the impairment was recognised, the
impairment is reversed. The reversal is such that the current
carrying amount does not exceed what the carrying amount would have
been had the impairment not previously been recognised. The
impairment reversal is recognized in the Statement of Comprehensive
Income.
Financial assets are derecognised when (a) the contractual
rights to the cash flows from the asset expire or are settled, or
(b) substantially all the risks and rewards of the ownership of the
asset are transferred to another party or (c) despite having
retained some significant risks and rewards of ownership, control
of the asset has been transferred to another party who has the
practical ability to unilaterally sell the asset to an unrelated
third party without imposing additional restrictions.
Basic financial liabilities, including trade and other payables,
bank loans, loans from fellow group companies and preference shares
that are classified as debt, are initially recognised at
transaction price, unless the arrangement constitutes a financing
transaction, where the debt instrument is measured at the present
value of the future receipts discounted at a market rate of
interest.
Debt instruments are subsequently carried at amortised cost,
using the effective interest rate method.
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities. Trade payables are recognised
initially at transaction price and subsequently measured at
amortised cost using the effective interest method. Financial
liabilities are derecognised when the liability is extinguished,
that is when the contractual obligation is discharged, cancelled or
expires.
Measurement of fair value
The inputs used to measure fair value are categorised into
different levels of the fair value hierarchy, the fair value
measurement is categorised in its entirety in the level of the
lowest level input that is significant to the entire measurement
(based on the application of judgement).
Level 1 inputs
Level 1 inputs are quoted prices in active markets for identical
assets or liabilities that the entity can access at the measurement
date.
A quoted market price in an active market provides the most
reliable evidence of fair value and is used without adjustment to
measure fair value whenever available, with limited exceptions.
Level 2 inputs
Level 2 inputs are inputs other than quoted market prices
included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 2 inputs include:
-- quoted prices for similar assets or liabilities in active
markets quoted prices for identical or similar assets or
liabilities in markets that are not active inputs other than quoted
prices that are observable for the asset or liability, for
example
-- interest rates and yield curves observable at commonly quoted
intervals implied volatilities credit spreads
-- inputs that are derived principally from or corroborated by
observable market data by correlation or other means
('market-corroborated inputs').
Level 3 inputs
Level 3 inputs are unobservable inputs for the asset or
liability.
Unobservable inputs are used to measure fair value to the extent
that relevant observable inputs are not available, thereby allowing
for situations in which there is little, if any, market activity
for the asset or liability at the measurement date. An entity
develops unobservable inputs using the best information available
in the circumstances, which might include the entity's own data,
taking into account all information about market participant
assumptions that is reasonably available.
Reserves
-- Share capital
Ordinary shares are classified as equity. Equity instruments are
measured at the fair value of the cash or other resources received
or receivable, net of the direct costs of issuing the equity
instruments. If payment is deferred and the time value of money is
material, the initial measurement is on a present value basis.
-- Share premium
Share premium represents the premium over nominal value at which
shares are issued less costs associated with the issue of
shares.
-- Other reserves
Other reserves represent the reserve created on consolidation of
Zenova Limited as part of the share reorganisation. Further
information can be found in note 9.
-- Retained earnings
Retained earnings represents the company's profits and losses
which have accumulated year on year since the Company began
trading.
Equity settled transactions
The Group has applied the requirements of IFRS 2 Share-Based
Payments for all grants of equity instruments.
The Group has entered into equity settled share-based payments
as consideration for services received. Equity settled share-based
payments are measured at fair value at the date of issue.
The Group has measured the fair value by reference to the equity
instruments issued as it is not possible to measure reliably the
fair value of the services received. In the absence of market
prices, fair value has been based on the Directors' valuation of
the Company as at the issue date.
Accounting for business combinations
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the:
-- fair values of the assets transferred;
-- liabilities incurred to the former owners of the acquired business;
-- equity interests issued by the group;
-- fair value of any asset or liability resulting from a
contingent consideration arrangement; and
-- fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the
acquisition date.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and the acquisition
date fair value of any previous equity interest in the acquired
entity, over the fair value of the net identifiable assets acquired
is recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the business acquired, the
difference is recognised directly in profit or loss as a bargain
purchase.
Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the
entity's incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent financier
under comparable terms and conditions.
Acquisitions costs are included in the profit and loss unless
they specifically relate to the issue of shares in connection with
a business combination.
Basis of consolidation
The Group financial statements consolidate those of Zenova Group
Plc (the Company) and its subsidiaries. The parent company
financial statements present information about the Company as a
separate entity and not about its group.
The consolidated financial statements incorporate the financial
information of Zenova Group Plc and its subsidiaries Zenova Limited
and Zenova Distribution Limited.
Subsidiaries are all entities (including structured entities)
over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and can affect those returns
through its power over the entity. Further to this, subsidiaries
are entities for which the Group has the power to govern the
financial and operating policies and consistent accounting policies
have been adopted across the Group. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for
business combinations by the Group.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated, unless the transaction provides
evidence of an impairment of the transferred asset. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
4. Segmental Information
At present the company is considered to have only one segment
within the United Kingdom. As the company develops the directors
will review this judgement.
5. Expenses by nature
Period ended 314-day period
30 November ended 30 November
2021 2020
GBP'000
GBP'000
------------------------------------ -------------------- ------------------------------
Operating loss is stated after
charging/(crediting):
Fees payable to Company's auditors - 12
Professional fees 292 -
Admin Expenses 7 -
Other costs 6 19
Consultancy fees 204 -
Travel & entertainment 26 -
Staff Costs 228 -
IT, Telephones and Communication 14 -
Marketing & Material 29 32
Rent & Rates 22 -
R&D 142 14
Depreciation 9 -
Other staff costs 7 -
Share based payment charge 161 -
-------------------- ------------------------------
Cost of sales, administrative
and operational expenses 1,147 77
==================== ==============================
The analysis of auditors' remunerations is as follows:
Period ended 314-day period
30 November 2021 ended 30 November
2020
GBP'000 GBP'000
--------------------------------- ------------------ -------------------
Fees payable to the Company's
auditors and its associates
for services to the group
Audit of parent company 9 -
Audit of consolidated financial 9 -
statements
Audit of subsidiaries 18 12
Total audit services 37 12
================== ===================
In addition to the above GBP62,000 was paid to the auditors for
their work as reporting
accountants as part of the IPO.
6. Directors and employees
The employee benefit expenses during the year were as
follows:
Period ended 314-day period
30 November ended 30 November
2021 2020
GBP'000
GBP'000
----------------------- ------------- -------------------
Wages and salaries 212 7
Social Security costs 18
------------- -------------------
230 7
============= ===================
Company Period ended 314-day period
30 November ended 30 November
2021 2020
GBP'000
GBP'000
------------------------ ------------- -------------------
Wages and salaries 67 -
Social Security costs 9 -
------------- -------------------
77 -
============= ===================
The monthly average number employed during the year were as
follows:
Period ended 314-day period
30 November 2021 ended 30 November
2020
---------------- ------------------ -------------------
Directors 2 1
Administration 2
------------------ -------------------
4 1
================== ===================
Key management personnel, as defined by IAS 24" Related party
disclosures" have been identified as the Board of Directors.
Detailed disclosures of Directors remuneration, Directors'
transactions, and Directors interests and share options for those
Directors who served during the year are set out below:
Period ended 314-day period
30 November ended 30 November
2021 2020
GBP'000
GBP'000
--------------------------------- ------------- -------------------
Salary 143 7
Consultancy Fees 15 -
Aggregate emoluments payable to
directors 158 7
============= ===================
The highest paid director's emoluments were as follows:
Period ended 314-day period
30 November ended 30 November
2021 2020
GBP'000
GBP'000
------------------------------------ ------------- -------------------
Salary 50 7
Total amount of emoluments payable 50 7
============= ===================
Remuneration in respect of the Directors was as follows:
Period ended Salary Consultancy Benefits Share Total
30 November 2021 Fees Options
GBP`000 GBP`000 GBP`000 GBP`000 GBP`000
--------------------- --------- ------------ --------- --------- ---------
Executive Directors
Tony Crawley 45 - 2 - 47
Thomas Melchior - 15 - - 15
Etrur Albani 37 - - - 37
--------- ------------ --------- --------- ---------
84 15 2 - 101
--------- ------------ --------- --------- ---------
Non-Executive
Directors
Don Nicolson 30 - - 5 35
Alain Gottesman 13 - - - 13
Fiona Rodford 13 - - - 13
--------- ------------ --------- --------- ---------
56 - - 5 61
--------- ------------ --------- --------- ---------
140 15 2 5 162
========= ============ ========= ========= =========
314-day period Salary Consultancy Benefits Options Total
ended 30 November Fees
2020
GBP`000 GBP`000 GBP`000 GBP`000 GBP`000
--------------------- --------- ------------ --------- --------- ---------
Executive Directors
Tony Crawley 7 - - - 7
Thomas Melchior - - - - -
Etrur Albani - - - - -
--------- ------------ --------- --------- ---------
7 - - - 7
--------- ------------ --------- --------- ---------
Non-Executive
Directors
Don Nicolson - - - - -
Alain Gottesman - - - - -
Fiona Rodford - - - - -
--------- ------------ --------- --------- ---------
- - - - -
--------- ------------ --------- --------- ---------
7 - - - 7
========= ============ ========= ========= =========
7. Taxation
The tax on the Group's loss before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to losses of the Group as follows:
Period ended 314-day period
30 November 2021 ended 30 November
2020
GBP'000 GBP'000
----------------------------- ------------------ -------------------
Reconciliation of effective
tax rate
Loss before income tax 1,141 77
Tax calculated at domestic
tax rates applicable to
profits in the respective
countries at a weighted
average rate of 19% (2020
19%). 216 15
Tax effect of expenses (35) -
that are not deductible
in determining taxable
profit
Deferred tax asset not (196) -
recognised in respect of
losses
Total tax (credit)/charged
for the year (15) 15
================== ===================
The standard rate of corporation tax in the UK is 19% with
effect from 1 April 2017. Accordingly, the Company's losses for
this accounting year are taxed at an effective rate of 19% (2020 -
19%).
The tax computations of Zenova Group Plc show it has tax losses
carried forward of GBP1,034,690 (2020 - GBP77,000). However due to
the uncertainty of the timing of future profits, no deferred tax
asset has been recognised in these financial statements.
8. Earnings per share
Period ended 314-day period
30 November 2021 ended 30 November
2020
GBP'000 GBP'000
-------------------------------- ------------------ -------------------
Loss for the year used
for the calculation of
basic EPS 1,156 62
Number of shares
Weighted average number
of ordinary shares for
the purpose of basic EPS 42,408,348 100
Effect of potentially dilutive - -
ordinary shares
------------------ -------------------
Weighted average number
of ordinary shares for
the purpose of diluted
EPS 42,408,348 100
------------------ -------------------
Loss per share
Basic (2.72p) (62,000p)
Diluted (2.72p) (62,000p)
Basic earnings per share is calculated by dividing the loss
attributable to owners of the Group by the weighted average number
or ordinary shares in issue during the year.
9. Group reorganisation
On the 20 May 2021 Zenova Group Plc acquired 100% of the share
capital of Zenova Ltd (Company number 12412411), whose registered
office is at The Hermitage, 15a Shenfield Road, Brentwood, Essex
CM15 8AG. The consideration for the acquisition was a share
exchange whereby the shareholders of Zenova Ltd exchanged their
shares in Zenova Ltd for shares in the Company pursuant to the
Share Exchange Agreement.
The effective shareholdings in Zenova Group Plc subsequent to
the transaction were identical to those of Zenova Ltd prior to the
transaction. The purpose of the group reorganisation was to add a
new parent company to the Zenova Group ahead of the Initial Public
Offering and admission of the Company to AIM.
The acquisition has been treated in the financial statements as
a group reorganisation by entities under common control. The
transaction has been accounted for in these financial statements
using the principles of merger accounting as if Zenova Limited had
been owned and controlled by Zenova Group Plc throughout the years
ended 30 November 2021 and 2020.
The consideration for the acquisition has been recognised at
book value, transferred assets and liabilities have been recognised
at book value and no goodwill has been reorganised.
Further the Group Financial statements have retroactively
adjusted as if the new group structure had been in place since
beginning of the prior period. The results and cash flows of Zenova
Limited and Zenova Group Plc have been brought into the Group
Financial Statements of the combined entity from 20 January 2020
when Zenova Limited was incorporated. Loss for the year to 30
November 2021 includes GBP501k in respect of losses incurred by
Zenova Limited. (2020 - GBP62k)
In the company's financial statements, Zenova Group Plc
investment in Zenova Limited is stated at the nominal value of the
shares issued. On consolidation the difference between the nominal
value of the shares issued and the aggregate share capital, share
premium and other reserves of Zenova Limited at the date of the
transaction has been included in equity within other reserves. The
balance on this reserve at 30 November 2021 was GBP68k (2020 -
nil).
Assets of Zenova Limited at acquisition Provisional
fair value
GBP'000
----------------------------------------- ------------
ASSETS
Non-Current Assets
Assets acquired
PP&E 3
Deferred tax 15
------------
18
------------
Current Assets
Cash 207
Debtors 37
------------
244
------------
Total Assets 262
------------
LIABILITIES
NON-CURRENT LIABILTIES
Payable: Amounts falling due after
one year 50
------------
50
------------
CURRENT LIABILITIES
Payable: Amounts falling due within
one year 37
Borrowings 380
------------
417
------------
Total Liabilities 467
------------
Net Liabilities (205)
============
10. Acquisition of Zenova Distribution Limited
On 22 July 2021, the Company acquired Zenova Distribution
limited (Company number 12884314), whose registered office is at
160 Camden High Street, London NW1 0NE, its sole distributor, for a
total consideration of approximately GBP2.4 million satisfied by
the issue of Ordinary Shares.
The acquisition has been accounted for under IFRS 3 'Business
Combinations' using the acquisition method.
Provisional
fair value
GBP'000
-------------------------------------------- ------------
Fair value of consideration issued 2,346
------------
2,346
============
The assets and liabilities recognised as a Provisional
result of the acquisition are as follows: fair value
GBP'000
---------------------------------------------- ------------
Goodwill 2,346
Net assets acquired 2,346
============
Fair value of the consideration issued was calculated by
reference to the market value of the shares issued as consideration
on the date of acquisition.
Goodwill relates to the sales contracts negotiated and in
negotiation by Zenova Distribution Limited at the date of
acquisition, as well as the additional margin that would be
retained by the Group, as a result of consolidating the
distribution business within the group
As permitted by IFRS 3 Business Combinations, the business
combination is accounted for using provisional amounts. Any
adjustments to the provisional amounts will be made within the
measurement period to reflect new information obtained about fact
and circumstances that were in existence at the acquisition date.
The measurement period cannot exceed one year from the acquisition
date.
11. Property Plant and Equipment
Office Equipment Total Property,
GBP`000 Plant and Equipment
GBP`000
------------------------- ----------------- ---------------------
Cost
As at 20 January 2020, - -
30 November 2020 and 1
December 2020
Additions 9 9
----------------- ---------------------
As at 30 November 2021 9 9
----------------- ---------------------
Depreciation
As at 20 January 2020, - -
30 November 2020 and 1
December 2020
Charge for the year 1 1
----------------- ---------------------
As at 30 November 2021 1 1
----------------- ---------------------
Net book value
As at 20 January 2020, - -
30 November 2020 and 1
December 2020
----------------- ---------------------
As at 30 November 2021 8 8
================= =====================
12. Rights of use asset
Rights of use
asset
GBP'000
----------------------------------------- --------------
Cost
As at 20 January 2020, 30 November 2020 -
and 1 December 2020
Additions 157
--------------
As at 30 November 2021 157
--------------
Depreciation
As at 20 January 2020, 30 November 2020 -
and 1 December 2020
Charge for the year 8
--------------
As at 30 November 2021 8
--------------
Net book value
As at 20 January 2020, 30 November 2020 -
and 1 December 2020
--------------
As at 30 November 2021 149
==============
13. Trade and other receivables
As at 30 November As at 30 November
2021 2020
GBP'000 GBP'000
-------------------------------- ------------------ ------------------
Current assets
Trade receivable 6
Less: provision for impairment - -
on receivables
------------------ ------------------
Trade receivables (net) 6 -
------------------ ------------------
VAT Recoverable 160 2
Other receivables 7 -
------------------ ------------------
Total current receivables 173 2
================== ==================
Details about the Group's impairment policies and the
calculation of the loss allowance are provided in note 3.
Information about the impairment of trade receivables and the
Group's exposure to credit risk, foreign currency risk and
liquidity risk can be found in note 19.
Trade receivables are disclosed net of a provision for bad and
doubtful debts. The provision for bad and doubtful debts is based
on specific risk assessment and reference to past default
experience. Further details are included in note 19 .
Included in receivables for the Group are receivables
denominated in Canadian Dollars of GBP7k (2020 - nil). All foreign
currency denominated receivables have been translated to GBP at the
exchange rate prevailing at 30 November 2021. All other receivables
are GBP denominated. The Directors consider that the carrying
amount of trade and other receivables approximates their fair
value.
14. Trade and other payables
As at 30 November As at 30 November
2021 2020
GBP'000 GBP'000
---------------------------- ------------------ ------------------
Amounts falling due after
one year
Bank Loan 50 50
50 50
================== ==================
Amounts falling due within
one year
Trade Payables 64 -
Accruals 58 30
Other payables 13 -
------------------ ------------------
135 30
================== ==================
All trade and other payables are GBP denominated. All foreign
currency denominated payables have been translated to Euro at the
exchange rate prevailing at 30 November 2021.
The directors consider that the carrying amount of trade and
other payables approximates their fair value.
15. Borrowings
As at 30 November As at 30 November
2021 2020
GBP'000 GBP'000
----------------------- ------------------- ------------------
Convertible Loan Note - 200
------------------ ------------------
- 200
=========================================== ==================
Between 01 May 2020 and 30 April 2021 and the Group issued
GBP380,000 of unsecured convertible loan notes.
On the 22 July 2021 Convertible loan notes with a face value of
GBP380,000 were converted to 2,999,850 shares of the Company at a
33.33% discount to the placing price of 12.73p.
16. Leases
Set out below are the carrying amount of the lease liabilities
and the movements in the period.
As at 30 November 314-day period
2021 ended 30 November
2020
GBP'000 GBP'000
--------------------------- ------------------ -------------------
At start of the period - -
Additions 145 -
Interest expense 3 -
Rent payments made in year - -
------------------ -------------------
At 30 November 148 -
================== ===================
As at 30 November Carrying Contractual 6 months 6-12 1-2 2-5
2021 amount cash flows or less months years years
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- ------------ --------- --------- --------- ---------
Lease liability 148 181 19 19 38 105
As at 30 November Carrying Contractual 6 months 6-12 1-2 2-5
2020 amount cash flows or less months years years
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- ------------ --------- --------- --------- ---------
Lease liability - - - - - -
17. Share capital
2021 Number 2020 Number Share Share Share Share
capital capital premium premium
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
---------------- ------------ ------------ --------- --------- --------- ---------
Issued called up and fully paid ordinary shares
of GBP0.01 each
At 1 December - - - - -
Issued in the
year 93,384,053 - 94 - 6,310 -
------------ ------------ --------- --------- --------- ---------
At 30 November 93,384,053 - 94 - 6,310 -
============ ============ ========= ========= ========= =========
On 20 May 2021, the Company issued in aggregate 49,999,998
Ordinary Shares to the shareholders in Zenova Ltd in connection
with the Share Exchange.
On 30 June 2021, the Company issued in aggregate 4,350,000
Ordinary Shares to Rockmasters Limited in consideration for
services rendered by Christopher Gilbert to the Group prior to
Admission.
On the 22 July 2021 the Company issued 12,350,000 shares at an
issue price of 19p per share for the purchase of Zenova
Distribution Limited.
On the 22 July 2021 the Company issued 23,684,203 shares as part
of its initial public offering at an issue price of 19p per
share.
On the 22 July 2021 Convertible loan notes with a face value of
GBP380,000 were converted to 2,999,850 shares of the Company at a
33.33% discount to the placing price.
In connection with the placing on the 22 July 2021, the company
recognised GBP915k of costs against share premium.
18. Share based payment reserve
As at 30 November 314-day period
2021 ended 30 November
2020
GBP'000 GBP'000
--------------------------- ------------------ -------------------
At 1 December - -
Equity settled share-based 161 -
payment charge
------------------ -------------------
At 30 November 161 -
================== ===================
As at 30 November 314-day period ended
2021 30 November 2020
---------------- -------------------------------- ------------------------
Average exercise Number Average Number
price of options exercise of options
GBP price
GBP
At 1 December GBP0.001 9,338,405 - -
Granted GBP0.181 9,756,389 GBP0.001 9,338,405
----------------- ------------ ---------- ------------
At 30 November GBP0.093 19,094,794 GBP0.001 9,338,405
================= ============ ========== ============
Of the 19,094,279 outstanding options (2020: 9,338,405 options),
11,097,240 options (2020: nil) were exercisable.
No share options were exercised in the period (2020 - nil). No
options lapsed or were cancelled in the year (2020 - nil).
Share options outstanding at the end of the period have the
following expiry dates and exercise prices:
Warrant Holder Total number Exercise Date of Expiry date
of warrants Price issue
------------------------ ------------- --------- ----------- ------------
Rockmasters Ltd 9,338,405 GBP0.001 18/09/2020 18/09/2027
Donald Nicolson 526,315 GBP0.19 04/03/2021 04/03/2024
Four Grant Investments 131,578 GBP0.19 08/03/2021 30/04/2023
Ltd
John Harvey 526,315 GBP0.19 08/03/2021 30/04/2023
Andy Muir 78,947 GBP0.19 08/03/2021 30/04/2023
Nigel Luckett 263,157 GBP0.19 08/03/2021 30/04/2023
Spark Advisory Partners 466,920 GBP0.001 08/03/2021 22/07/2023
Limited
Brandon Hill Capital 1,184,210 GBP0.19 22/07/2021 22/07/2024
Limited
Amati Global Investors 6,578,947 GBP0.19 22/07/2021 22/03/2022
Ltd
The weighted average fair value of options granted during the
period was determined using the Black-Scholes valuation model. The
significant inputs into the model were the share price at the grant
date, the exercise price shown above, volatility of 32.93%,
dividend yield of nil, option life as set out above, and an annual
risk-free interest rate of 1.9%.
19. Capital and Financial risk management
Capital risk management
The group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and bene ts for other stakeholders
and to maintain an optimal capital structure to reduce the cost of
capital.
The capital structure of the Group consists of equity
attributable to equity holders comprising issued share capital,
reserves and retained earnings as disclosed in the Statement of
Changes in Equity.
In order to maintain or adjust the capital structure, the group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debt.
Consistent with others in the industry, the Group monitors
capital based on the gearing ratio and net debt/cash. This ratio is
calculated as total borrowings divided by total capital. Net debt
is calculated as total borrowings less cash and cash equivalents.
Total capital is calculated as 'equity' as shown in the
consolidated statement of financial position plus total
borrowings.
The gearing ratios at 30 November 2021 and 30 November 2020 are
as follows:
As at ended 314 day period
30 November ended 30 November
2021 2020
GBP'000
GBP'000
-------------------------------- ------------- -------------------
Total borrowings (note 15) - (200)
Less cash and cash equivalents 2,936 201
Net cash 2,936 1
Total equity 5,292 (62)
Total capital 5,292 (262)
------------- -------------------
Gearing ratio - 76%
============= ===================
Financial risk management
The Group is exposed to several financial risks through its
normal operations, the most significant of which are credit,
foreign exchange and liquidity risks.
The Group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise the
potential adverse effects on the Group's financial performance.
Risk management is carried out by the board of directors. The Board
has established polices and principles for overall risk management
covering specific areas such as foreign exchange risk, credit risk
and investment of excess liquidity.
Credit risk
Credit risk is managed on a group basis. The Group is
responsible for managing and analysing the credit risk for each of
their new clients before standard payment and delivery terms and
conditions are offered. Credit risk arises from cash and cash
equivalents, and deposits with banks and nancial institutions, as
well as credit exposures to wholesale and retail customers,
including outstanding receivables and committed transactions. For
banks and nancial institutions, only independently rated parties
with a minimum rating of 'A' are accepted. If wholesale customers
are independently rated, these ratings are used. If there is no
independent rating, risk control assesses the credit quality of the
customer, considering its nancial position, past experience and
other factors. Sales to retail customers are settled in cash.
Management does not expect any losses from non-performance by these
counterparties.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was GBP2,936k (2020 - GBP201k). Financial assets are
assessed for impairment annually and a provision for bad debt of
nil has been recognised in 2021 (2020-nil).
The Group has two types of financial assets that are subject to
the expected credit loss model:
-- trade receivables for sales of inventory
-- cash and cash equivalents
The Group was required to revise its impairment methodology
under IFRS 9 for each of these classes of assets.
While cash and cash equivalents are subject to the impairment
requirements of IFRS 9, the identified impairment loss was
immaterial.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables.
Trade receivables are written off when there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a
debtor to engage in a repayment plan with the group, and a failure
to make contractual payments for a period of greater than 120 days
past due. At present the value of trade receivables is highly
immaterial and as such no provision has been recognised.
Impairment losses on trade receivables are presented as net
impairment losses within operating profit. Subsequent recoveries of
amounts previously written off are credited against the same line
item.
The Group mitigates banking sector credit risk through the use
of banks with no lower than a single A rating.
Foreign exchange risk
The Group operates primarily in the United Kingdom and is only
exposed to very limited amounts of foreign exchange risk arising
from various currency exposures.
There is no cash denominated in non-GBP currency as at 30
November 2021 or 2020.
Liquidity risk
Cash ow forecasting is performed in the operating entities of
the group and aggregated by group nance. Group nance monitors
rolling forecasts of the Group's liquidity requirements to ensure
it has suf cient cash to meet operational needs.
Surplus cash held by the operating entities over and above the
balance required for working capital management is transferred to
the group treasury.
The table below analyses the Group's non-derivative nancial
liabilities into relevant maturity groupings based on the remaining
period at the balance sheet date to the contractual maturity
date.
The following are the contractual maturities of financial
liabilities for the Group as at 30 November 2021 and 30 November
2020 based upon contractual cash flows:
As at 30 November Carrying Contractual 6 months 6-12 1-2 2-5
2021 amount cash flows or less months years years
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- ------------ --------- --------- --------- ---------
Trade and other
payables 137 137 137 - - -
--------- ------------ --------- --------- --------- ---------
137 137 137 - - -
========= ============ ========= ========= ========= =========
As at 30 November Carrying Contractual 6 months 6-12 1-2 2-5
2020 amount cash flows or less months years years
GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- ------------ --------- --------- --------- ---------
Trade and other
payables 30 30 30 - - -
Borrowings 200 200 - 200 - -
--------- ------------ --------- --------- --------- ---------
230 230 30 200 - -
========= ============ ========= ========= ========= =========
Ultimate responsibility for liquidity risk management rests with
the board of directors, which has established an appropriate
liquidity risk management framework for the management of the
Group's short-, medium-, long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual
cashflows, and by matching the maturity profiles of financial
assets and liabilities.
Fair Values
The directors have reviewed the financial statements and have
concluded that, there are no significant differences between the
book values and the fair values of the financial assets and
financial liabilities of the Group and Company as at 30 November
2021 and 30 November 2020.
20. Interests in other undertakings
Ownership Date acquired/ Registered Place of Principal
incorporated office incorporation Activity
Zenova 100% 20 May 2021 The Hermitage, England and Operating
Limited 15a Shenfield Wales Company
Road, Brentwood,
Essex,
England,
CM15 8AG
Zenova 100% 22 July 2021 172 Arlington England and Distribution
Distribution Road, London, Wales Company
Limited England,
NW1 7HL
Zenova Limited and Zenova Distribution Limited are exempt from
the requirements of the Companies Act 2006 relating to the audit of
individual accounts by virtue of s479A of the Companies Act 2006
for the year ended 30 November 2021.
21. Related party transactions
The executive directors are also considered key management as
defined by IAS 24 'Related Party Disclosures (revised 2009)'. The
remuneration of key management is considered in note 6.
The Company only financial statements of Zenova Group Plc
include amounts receivable from its subsidiary undertakings Zenova
Limited and Zenova Distribution Limited of GBP220k (2020 - Nil) and
amounts payable of GBP23k (2020 - Nil). Amounts provided to Zenova
Limited relate to the provision of funding for operations and
capital expenditure.
As at 30 November 2021 the Group had GBP360 payable to Directors
(2020 - GBP3,500), representing unpaid corporate expenses.
As at 30 November 2021 the Group had GBP6,152 payable to Motus
Distribution Limited (2020 - nil), representing unpaid invoices for
rent.
22. Commitments
Capital expenditure contracted for but not yet incurred at the
end of the reporting year was nil (2020 - Nil). Lease commitments
are considered in note 15.
23. Controlling parties
In the opinion of the Directors, there is no single ultimate
controlling party.
24. Post Balance Sheet Events
There are no post balance sheet events for the period ended 30
November 2021.
25. Information
Copies of the Annual Report and Financial Statements will be
posted to shareholders in due course. Further copies will be
available from Zenova Group plc's registered office at 172
Arlington Road High Street, NW1 7HL or on the Company's website at
www. zenovagroup . com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR SEWFUSEESEFL
(END) Dow Jones Newswires
April 21, 2022 02:01 ET (06:01 GMT)
Zenova (LSE:ZED)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Zenova (LSE:ZED)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
