TIDMNTQ
RNS Number : 3756E
Enteq Upstream PLC
07 July 2021
Enteq Upstream plc
("Enteq")
Final results for the year ended 31 March 2021
and Investor Presentation
Enteq, the energy drilling technology company, today announces
its results for the year ended 31 March 2021.
Key features
-- Total revenue down from $10.9m to $5.1m due to COVID 19 impact:
o North America revenue down from $7.5m to $1.9m
o International revenue down from $3.4 to $3.2m but now up from
32% to 62% of total
-- Gross profit margin down from 61% to 53% due to product mix variances
-- Administrative expenses before amortisation reduced from $7.3m to $3.6m:
o Underlying overheads(1) reduced from $3.6m to $2.6m
o Depreciation on rental fleet down from $3.2m to $0.9m
o Depreciation on other fixed assets steady at $0.2m
-- Loss attributable to shareholders down from $7.8m to $1.1m
-- Breakeven adjusted EBITDA(2) on significantly reduced revenue
-- Continued investment in new technologies
Financial metrics
Years ended 31 March ($m):
2021 2020
* Revenue 5.1 10.9
* Gross profit margin 53% 61%
* Underlying overheads(1) 2.6 3.6
* Adjusted EBITDA(2) 0.1 3.1
* Exceptional items 0.1 7.3
* Total post tax loss 1.1 7.8
* Post tax loss per share (cents) 1.7 12.1
* Cash balance 8.1 10.2
* Investment in R&D 1.6 2.2
Outlook
-- Recent oil price stabilisation and increased US rig count
underpins optimism regarding US markets
-- Targeted focus on international opportunities
-- Ongoing investment in the development of new technologies
-- Continued emphasis on maintaining a strong balance sheet
Andrew Law, CEO of Enteq Upstream plc, commented:
"Despite the very challenging trading conditions seen in the
period under review, Enteq continues to be well positioned to
support current and future activities. Enteq will continue to
invest in the potentially game-changing SABER rotary steerable
technology, as well as the other technology driven engineering
projects. The post Covid-19 market for Enteq is currently evolving,
but the recent oil price stability, together with the steadily
increasing US rig count, gives the Board grounds for cautious
optimism regarding the short and medium-term outlook."
Investor Presentation
Please note that Andrew Law and David Steel, Chief Financial
Officer, will be providing a live presentation relating to these
results via the Investor Meet Company platform on 9th July 2021 at
10:30am BST.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via the Investor
Meet Company dashboard up until 9am the day before the meeting or
at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and
attend this presentation via the following link:
https://www.investormeetcompany.com/enteq-upstream-plc/register-investor
Investors who already follow Enteq on the Investor Meet Company
platform will automatically be invited.
(1) The reconciliation between Underlying overheads and
Administrative expenses before amortisation is follows:
Year to 31 March 2021 Year to 31 March 2020
$m $m
Underlying overheads 2.6 3.6
Depreciation - fixed assets 0.2 0.2
Depreciation - rental fleet 0.9 3,2
PSP Share charge 0.2 0.3
Administrative expenses before amortisation (including bad debt charge) 3.9
7.3
(2) The reconciliation between Loss attributable to shareholders
and Adjusted EBITDA is follows:
Year to 31 March 2021 Year to 31 March 2020
$m $m
Loss attributable to shareholders (1.1) (7.8)
Exceptional items - 7.3
Amortisation - 0.2
Depreciation - fixed assets 0.2 0.2
Depreciation - rental fleet 0.9 3.2
PSP Share charge 0.2 0.3
Interest (0.1) (0.3)
Other (FX & tax) - -
Adjusted EBITDA 0.1 3.1
Both the above alternative performance measures are shown as the
Board consider these to be key to the management of the business as
a whole
For further information, please contact:
Enteq Upstream plc +44 (0)1494 618739
www.enteq.com
Andrew Law, Chief Executive Officer
David Steel, Chief Financial Officer
finnCap Ltd (NOMAD and Broker) +44 (0)20 7220 0500
Ed Frisby, Emily Watts, Tim Harper (Corporate Finance)
Andrew Burdis, Barney Hayward (ECM)
Combined Chief Executive and Chairman's report
Review of the Year
As this year's financial results are fully explained in the
following Financial Review, this review will focus on Enteq's
response to the challenging market conditions faced during the year
to 31 March 2021.
In the previous financial year, Enteq responded quickly to the
major reduction in demand for all its product lines seen during the
spring of 2020. The US workforce was reduced by approximately 60%,
all US based contract staff were released and all discretionary
spend curtailed. This drive to reduce overheads continued
throughout this reporting period, with two senior US sales and
management focused posts being removed with their responsibilities
being reallocated to both the remaining US and UK senior management
team. Care was taken not to weaken the level of customer support
provided with some of the overhead savings re-allocated to
bolstering this function, which was further strengthened towards
the year end by the use of contract staff. A new Product Director
was recruited in November 2020 with a remit to successfully bring
the SABER rotary drilling system through both laboratory testing
and field trials, then onto full commercialisation in the shortest
time possible.
Following a strategic review, the Board decided to permanently
reduce the in-house capacity for manufacture of a range of low
margin mechanical components. Following this decision, all of the
related Houston based production equipment was sold during
February/March 2021. As this equipment was virtually fully written
down, this resulted in both net proceeds and the associated gain,
of approximately $0.5m. The cash proceeds will be applied to the
development of future products, such as the SABER system.
During this financial year the Group's US focussed rental fleet
continued to provide a significant proportion of the total group
revenue. However, the reduced demand in the US, coupled with the
planned expiry of existing rental contracts has resulted in a
reduction in the number of kits in the rental fleet from the 17 at
the start of the year, down to two minor items on hire as at 31
March 2021.
The positive gains in the international market share made over
the previous two years were maintained despite the price of a
barrel of oil being below $40 until the end of June 2020 only
rising to the current level of approximately $60 by the end of
February 2021. This was due to both repeat orders from existing,
primarily China based, customers as well as acquiring new customers
in this region. The latest update from Enteq's strategic partner in
the Kingdom of Saudi Arabia, Sawafi Aljazeera Oilfield Products and
Services Co. Ltd ("Sawafi") is that their client, Saudi Aramco,
have informed them that due to low drilling activity there is
currently no foreseeable need for the equipment that was placed in
Saudi Arabia on stand-by. The equipment will be redeployed to other
opportunities. Sawafi wish to continue with the partnership
arrangement with particular emphasis on the new technologies that
Enteq is developing, chiefly SABER.
The SABER product development, based on the exclusive IP and
Technology license agreement from Shell, has seen significant
progress during the year, with all the design work now completed
and field trial ready prototypes currently going through the
laboratory-based testing phase. The appointment of the experienced
Product Director has significantly focused the project on ensuring
that a fleet of commercially viable prototypes will be ready for
deployment with potential customers before the end of the current
financial year. Despite the oil price fluctuations seen this year,
the global market for rotary steerable related services in 2021 is
still estimated to be in the region of $2bn. This is significantly
greater than the addressable market for Enteq's current product
offerings. Other engineering projects currently on-going are
focussed on developing improved signal analysis and higher speed
up-hole telemetry systems, both of which could be sold as separate
product lines as well as integrating seamlessly into the SABER
system.
Board changes
On 29 September 2020, Andrew Law joined the Board as a
Commercial Director, having been employed by Enteq in January 2019
as Director of International Sales, a non-Board appointment. Andrew
has a background in the oilfield industry through Field Engineering
at Schlumberger and General Management within Weatherford. Andrew
has also worked in corporate finance at KPMG and is a Sloan Fellow
from London Business School. The Board changes announced on 12
November 2020, came into effect on 1 April 2021, with Andrew,
becoming the Chief Executive Officer and Martin Perry, the founder
of Enteq and previous CEO moving to the role of Non-Executive
Chairman. The other changes include Neil Hartley taking the role of
Senior Independent Non-Executive Director, with Iain Paterson, the
previous Chairman, continuing as a Non-Executive Director. David
Steel continues to serve on the Board as Chief Financial Officer.
In the early part of the Financial Year (April 2020), Raymond
Garcia, a founder and Board member left the company.
Staff
There were a total of 15 employees at the end of the year, down
from the 19 at the previous year end, primarily due to the overhead
positions being removed at the South Houston facility, as discussed
above. The Board would like to recognise the on-going loyalty,
dedication and support of the remaining personnel as Enteq
continues with its excellent reputation for the reliability of
equipment and commitment to customer support during these difficult
market conditions.
Potential change of name
The Board is considering a change of name to Enteq Technologies
plc as this name better reflects the core strategy of the group
which is to develop technologies that enable more efficient, and
hence cost effective, methods of drilling for all target resources.
These methods are as applicable to geothermal applications, as
shown by an increasing proportion of revenue coming from this
activity, up from just over 3% last year to just over 6% this year,
as well as improving the efficiency of drilling for hydrocarbons,
especially gas. A special resolution will be put to the forthcoming
AGM proposing this change of name.
Prospects
Despite the very challenging trading conditions seen in the
period under review, Enteq continues to be well positioned to
support current and future activities. Enteq will continue to
investment in the potentially game-changing SABER rotary steerable
technology, as well as the other technology driven engineering
projects. The post Covid-19 market for Enteq is currently evolving,
but the recent oil price stability, together with the steadily
increasing US rig count, gives the Board grounds for cautious
optimism regarding the short and medium-term outlook.
Financial Review
This review contains pro-forma statements which are different in
presentation to the statutory format shown on the following
pages.
Income Statement
2021 2020
Year to 31 March:
$ million $ million
Revenue 5.1 10.9
Cost of Sales (2.4) (4.3)
Gross profit 2.7 6.6
Overheads (2.6) (3.5)
----------------------------- ---------- ----------
Adjusted EBITDA 0.1 3.1
Depreciation & amortisation (1.1) (3.6)
Other income/(charges) (0.1) (0.3)
Ongoing operating loss (1.1) (0.8)
Exceptional items (0.1) (7.3)
Operating Loss (1.2) (8.1)
Interest 0.1 0.3
----------------------------- ---------- ----------
Loss before tax (1.1) (7.8)
Tax - -
----------------------------- ---------- ----------
Loss after tax (1.1) (7.8)
============================= ========== ==========
The North American market was extremely challenging during the
year, with the rig count falling from 790 at the end of February
2020 to 664 as at 31 March 2020, then down further to a low of 266
at the end of July 2020, an overall reduction of 68% from the
February level. Thereafter there was a steady month on month
increase to 430 active rigs by the end of March 2021. The price of
a barrel of WRT fell from $53 in February to a low of $16 at the
end of April; it then stabilized at approximately $40 for the
majority of the year, rising to approximately $60 for the last two
months of the year under review. The impact of the above was that
North American revenue fell from $7.5m last year to $1.9m this
year. Due to strong continued demand, primarily from China, the
international revenue at $3.2m was virtually unchanged from the
$3.4m of last year.
The full year gross margin was 53%, down from last year's 61%,
due to a combination of a lower proportion of the higher margin
rental revenue and a higher proportion of the lower margin
mechanical component sales this year.
Total operational overheads, at $2.6m, was down $0.9m on last
year's figure. This reflected the reduction in the headcount
numbers, primarily two senior posts in the US during the year, plus
a continued focus on cost control.
The combined depreciation and amortisation charge was
significantly down on the previous year due to the number of rental
kits falling from 17 at 31 March 2020 to just two minor components
on rental as at the end of this year.
The "Other charges" shown above relate, primarily, to the
non-cash cost associated with the Performance Share Plan.
The net exceptional item charge of $0.1m comprises severance
costs of $0.4m relating to the headcount reductions mentioned above
plus aborted transactions costs of $0.1m, offset by a $0.4m gain
following the sale of the mechanical component related production
machinery at the Houston facility.
Statement of Financial Position
Enteq's net assets at the financial year-end comprised of the
following items:
As at 31 March: 2021 2020
$million $million
Intangible assets 1.7 0.1
Property, plant & equipment 2.3 2.4
Rental fleet - 1.0
Net working capital 3.9 3.0
Cash 8.1 10.2
----------------------------- ---------- ----------
Net assets 16.0 16.7
============================= ========== ==========
Both the closing balance and the increase in the year in the
intangible assets relate to the on-going spend on all the
engineering projects, predominately the SABER rotary steerable
system.
The net book value of property, plant & equipment at $2.3m
is only $0.1m lower than the previous year-end despite the disposal
of the mechanical component related production machinery due to
these items having been previously written down to a very low
carrying value due to the increasing use of sub-contractors to
provide these parts.
The decrease in the net book value of the rental fleet reflects
the net reduction of kits on hire during the year, as previously
mentioned.
The net working capital of $3.9m has increased $0.9m during the
year. This is due to an increase in debtors of $0.5m; a reduction
in creditors of $0.6m; and a decrease of inventory of $0.2m. The
debtor and inventory movements relate to the impact of the higher
level of trading seen in the last quarter of the financial year.
The creditor movement is due to timing differences between
incurring the cost and making the associated payments.
Cash flows
Overall, the Group saw a net cash outflow of $2.1m (2020: $1.7m)
reducing the Group's closing cash balance as at 31 March 2021 to
$8.1m. The majority of this reduction ($1.6m) related to the
on-going investment in the engineering projects, primarily the
SABER tool.
Year to 31 March: 2021 2020
$ million $ million
Adjusted EBITDA 0.1 3.1
Change in net operational working
capital (0.9) (2.2)
----------------------------------- ------------ ------------
Operational cash generated (0.8) 0.9
Investment in rental fleet - (0.7)
Investment in R&D (1.6) (2.2)
Disposal of fixed assets 0.5 -
CAPEX - (0.2)
Severance and transaction costs (0.5) -
Interest and share issues 0.3 0.5
Net cash movement (2.1) (1.7)
Opening cash balances 10.2 11.9
Closing cash balances 8.1 10.2
=================================== ============ ============
Financial Capital Management
Enteq's financial position continues to be robust. Enteq had no
bank borrowings, or other debt, and had a closing cash position of
$8.1m as at 31 March 2021. The impact of COVD 19 did not require
any changes to the way capital is managed within the group.
Enteq monitors its cash balances daily and operates under
treasury policies and procedures which are set by the Board.
The financial statements are presented in US dollars as the
Company's primary economic environment, in which it operates and
generates cash flows, is one of US dollars. Apart from its UK based
overhead costs, substantially all other transactions are transacted
in US dollars.
Enteq is subject to foreign exchange rate fluctuations to the
extent that it holds non-US Dollar cash deposits. The year-end GBP
denominated holdings are approximately 3% of total cash holdings,
down from the 11% of last year's balance. The decrease was due to
taking advantage of the favourable exchange rate during the
mid-March 2020 turmoil to sell $1.0m for GBP, a pattern not
repeated this year.
Annual Report and Accounts
The 2021 Annual Report and Accounts, together with the notice of
Annual General Meeting, have today been sent to shareholders and
are available on the Company's website, www.enteq.com .
Annual General Meeting
Unless the ongoing Government advice is not to hold this meeting
in person, the Company's Annual General Meeting will be held on 23
September 2021 at 12.00 noon at the offices of finnCap, 1
Bartholomew Close, London, EC1A 7BL.
David Steel
Chief Financial Officer
Enteq Upstream Plc
Consolidated Income Statement
and Loss
Year to Year to
31 March 31 March
2021 2020
Notes $ 000's $ 000's
Revenue 2 5,078 10,903
Cost of Sales (2,367) (4,256)
Gross Profit 2,711 6,647
Administrative expenses before
amortisation (3,851) (6,903)
Bad debt provision charge to income
statement (56) (366)
Amortisation of acquired intangibles 6 (19) (217)
Other exceptional items 3 (85) (7,286)
Foreign exchange profit on operating
activities 78 37
---------- ----------
Total Administrative expenses (3,933) (14,735)
Operating loss (1,222) (8,088)
Finance income 67 250
Loss before tax (1,155) (7,838)
Tax 4 46 -
Loss for the period (1,109) (7,838)
========== ==========
Loss attributable to:
---------- ----------
Owners of the parent (1,109) (7,838)
========== ==========
Loss per share (in US cents): 5
Basic (1.7) (12.1)
Diluted (1.7) (12.1)
There are no other items requiring disclosure as comprehensive
income.
Enteq Upstream Plc
Consolidated Statement of Financial Position
As at 31 As at 31
March 2021 March 2020
Notes $ 000's $ 000's
Assets
Non-current
Intangible assets 6 1,728 134
Property, plant and equipment 2,272 3,433
Trade and other receivables 168 -
Non-current assets 4,168 3,567
------------ ------------
Current
Trade and other receivables 2,405 2,025
Inventories 2,888 3,110
Cash and cash equivalents 8,059 10,183
Current assets 13,352 15,318
------------ ------------
Total assets 17,520 18,885
============ ============
Equity and liabilities
Equity
Share capital 1,056 1,027
Share premium 91,789 91,579
Share based payment reserve 455 1,048
Retained earnings (77,324) (76,943)
Total equity 15,976 16,711
------------ ------------
Liabilities
Current
Trade and other payables 1,544 2,174
Total liabilities 1,544 2,174
------------ ------------
Total equity and liabilities 17,520 18,885
============ ============
Enteq Upstream Plc
Consolidated Statement of Changes in Equity
Share
Called
up based
share Retained Share payment Total
capital earnings premium reserve equity
$ 000's $ 000's $ 000's $ 000's $ 000's
As at 1 April 2020 1,027 (76,943) 91,579 1,048 16,711
Issue of share capital 29 - 210 - 239
Transfers between reserves - 728 - (728) -
Share based payment charge - - - 135 135
Transactions with owners 29 728 210 (593) 374
Loss for the year - (1,109) - - (1,109)
Other comprehensive income
for the year - - - - -
Total comprehensive income - (1,109) - - (1,109)
-------- --------- -------- -------- --------
Total movement 29 (381) 210 (593) (735)
As at 31 March 2021 1,056 (77,324) 91,789 455 15,976
======== ========= ======== ======== ========
Called Share
up based
share Retained Share payment Total
capital earnings premium reserve equity
$ 000's $ 000's $ 000's $ 000's $ 000's
As at 1 April 2019 1,005 (69,105) 91,398 750 24,048
Issue of share capital 22 - 181 - 203
Share based payment charge - - - 298 298
Transactions with owners 22 - 181 298 501
-------- --------- -------- -------- --------
Loss for the year - (7,838) - - (7,838)
Other comprehensive income
for the year - - - - -
Total comprehensive income - (7,838) - - (7,838)
-------- --------- -------- -------- --------
Total movement 22 (7,838) 181 298 (7,337)
As at 31 March 2020 1,027 (76,943) 91,579 1,048 16,711
======== ========= ======== ======== ========
Enteq Upstream Plc
Consolidated Statement of Cash Flows
Year to 31 Year to 31
March 2021 March 2020
$ 000's $ 000's
Cash flows from operating activities
Loss for the year (1,109) (7,838)
Net finance income (67) (250)
Gain on disposal of fixed assets (455) -
Share-based payment non-cash items 135 298
Foreign exchange charge 78 (37)
Depreciation and Amortisation
charges 1,130 7,822
(288) (5)
Tax received 46 -
Decrease in inventory 222 1,402
(Increase)/decrease in trade and
other receivables (554) 329
Decrease in trade and other payables (820) (863)
Increase in rental fleet assets (17) (742)
Net cash from operating activities (1,411) 121
------------ ------------
Investing activities
Purchase of Property Plant and
Equipment (29) (208)
Disposal proceeds of tangible
fixed assets 511 -
Increase in intangible fixed assets (1,423) (2,150)
Interest received 67 250
Net cash from investing activities (874) (2,108)
------------ ------------
Financing activities
Share issue 239 203
Net cash from financing activities 239 203
------------ ------------
Decrease/(increase) in cash and
cash equivalents (2,046) (1,784)
Non-cash movements - foreign exchange (78) 37
Cash and cash equivalents at beginning
of period 10,183 11,930
Cash and cash equivalents at end
of period 8,059 10,183
============ ============
1. BASIS OF PREPARATION
The results for the year ended 31 March 2021 have been prepared
using the accounting policies and methods of computation consistent
with those used in the Group's annual report for the year ended 31
March 2020. The results have also been presented and prepared in a
form consistent with that which will be adopted in the Group's
annual report for the year ended 31 March 2021 and in accordance
with the recognition and measurement requirements of the
International Financial Reporting Standards as adopted by the
European Union.
The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 March 2021 and
the year ended 31 March 2020, but is derived from those accounts.
Statutory accounts for 2020 have been delivered to Companies House.
Those for the year ended 31 March 2021 will be delivered following
the Company's Annual General Meeting on 23 September 2021.
The financial information has been extracted from the Group's
Annual Report for the year ended 31 March 2021. The auditors have
reported on these accounts; their reports were unqualified and did
not contain statements under s498(2) or (3) Companies Act 2006. The
Group published its 2021 Annual Report and Accounts on 7 July
2021.
2. SEGMENTAL REPORTING
For management purposes, the Group is currently organised into a
single business unit, the Drilling Tools division, which is
currently based solely in the USA.
The principal activities of the group is the design, manufacture
and selling of specialised parts and products for Directional
Drilling and Measurement While Drilling operations for use in the
energy exploration and services sector of the Oil and Gas industry.
Revenue is only generated by the selling activity.
At present, there is only one operating segment and the
information presented to the board is consistent with the
consolidated profit and loss statement and the consolidated
statement of financial position.
The revenues, net assets and non-current assets of the Group can
be analysed by geographic location (post-consolidation adjustments)
as follows:
Revenues
31 March 31 March
2021 2020
$ 000's $ 000's
United States of America 1,939 7,461
China 2,735 3,013
Holland 323 359
Rest of the world 81 70
Total Group revenue 5,078 10,903
------------- ---------
31 March 31 March
2021 2020
$ 000's $ 000's
Contracts with customers 3,930 6,112
Operating lease income 1,148 4,791
Total Group revenue 5,078 10,903
--------- ---------
Net Assets
31 March 31 March
2021 2020
$ 000's $ 000's
Europe (UK) 6,674 8,712
United States 9,302 7,999
Total Group net assets 15,976 16,711
--------- ---------
Non-current Assets
31 March 31 March
2021 2020
$ 000's $ 000's
Europe (UK) - -
United States 4,168 3,567
Total Group non-current
assets 4,168 3,567
--------- ---------
All of the Group's revenue arises from the sale and rental of
specialised parts and products for Directional Drilling and
Measurement While Drilling operations. The Group had 3 customers
that contributed in excess of 10% of the Group's total sales for
the year (2020: 2). These customers contributed $ 2,088k, $1,020k
and $572k respectively. (2020: $3,948k and $1,279k). No revenue
relates to customers based in the UK (2020: none).
3. EXCEPTIONAL ITEMS
The exceptional items can be analysed as follows:
31 March 31 March
2021 2020
$ 000's $ 000's
Write down of intangible assets
(note 6) - 4,192
Write down of inventory - 2,700
Aborted project costs incurred 147 296
Severance payments and other
plant closure costs 397 98
Gain on sale of fixed assets (455) -
Other (4) -
--------- ---------
Total exceptional items 85 7,286
========= =========
The write down of inventory in 2020 has been classified as an
exceptional item due to the nature of change in the oil and gas
market resulting from both the impact of the COVID-19 and the
reductions in the price of oil during March 2020.
4. INCOME TAX
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities
for the period.
Factors affecting the tax charge
The tax assessed for the period is different from the standard
rate of corporation tax in the UK. The difference is explained
below:
31 March 31 March
2021 2020
$ 000's $ 000's
Loss on ordinary activities before tax (1,109) (7,838)
--------- ----------
Loss on ordinary activities multiplied
by the
standard rate of corporation tax in
the UK of 19% (2020: 19%): (211) (1,489)
Effects of:
Items not subject to corporation tax 136 2,198
Tax losses to carry forward 75 (709)
R&D tax credit 46 -
Total income tax 46 -
========= ==========
There has been no deferred taxation recognised in these
financial statements due to the uncertainty surrounding the timing
of the recovery of these amounts. The total losses available to the
Group in the relevant tax jurisdictions are as follows: UK $1.4m;
United States $20.3m (2020: UK $0.5m; United States $21.0 NB: both
these figures have been re-stated). There were no significant
deferred tax liabilities. These tax loses have no expiry date.
5. EARNINGS PER SHARE AND DIVIDS
Basic earnings per share
Basic earnings per share is calculated by dividing the loss
attributable to ordinary shareholders for the year of $1,109k (31
March 2020: loss of $7,838k) by the weighted average number of
ordinary shares in issue during the year of 67,065k (31 March 2020:
64,900k).
As the Group is loss making, any potential ordinary shares have
the effect of being anti-dilutive. Therefore, the diluted EPS is
the same as the basic EPS. As the year end share price is below the
weighted average option price of all the options issued, the
adjusted diluted EPS is the same as adjusted EPS.
The number of outstanding share options that are not included in
the above figures are as follows:
31 March 31 March
2021 2020
000's 000's
EMI plan 398 672
PSP plan 3,825 4,934
--------- ---------
Total 4,223 5,606
========= =========
The adjusted diluted earnings per share information are
considered to provide a fairer representation of the Group's
trading performance. A reconciliation between basic earnings and
adjusted earnings is shown below.
March 2021: EPS Weighted
average number Per-share
Earnings of shares amount
$ 000's 000's US cents
Loss attributable to ordinary
shareholders (1,109) 67,065 (1.7)
========== =============== =========
March 2020: EPS Weighted
average number Per-share
Earnings of shares amount
$ 000's 000's US cents
Loss attributable to ordinary
shareholders (7,838) 64,900 (12.1)
========== =============== =========
During the year Enteq Upstream Plc did not pay any dividends
(2020: nil).
6. INTANGIBLE ASSETS
a) Other Intangible Assets
Developed IPR&D Brand Customer Total
technology technology names relationships
$ 000's $ 000's $ 000's $ 000's $ 000's
Cost:
As at 1 April 2020 12,823 11,454 1,240 20,586 46,103
Capitalised in
period 19 1,594 - - 1,613
------------ ------------ -------- --------------- --------
As at 31 March
2021 12,842 13,048 1,240 20,586 47,716
------------ ------------ --------
Amortisation/Impairment:
As at 1 April 2020 12,823 11,320 1,240 20,586 45,969
Charge for the
year 19 - - - 19
As at 31 March
2021 12,842 11,320 1,240 20,586 45,988
------------ ------------ -------- --------------- --------
Net Book Value:
------------ ------------ -------- --------------- --------
As at 1 April 2020 - 134 - - 134
============ ============ ======== =============== ========
As at 31 March
2021 - 1,728 - - 1,728
============ ============ ======== =============== ========
Developed IPR&D Brand Customer Total
technology technology names relationships
$ 000's $ 000's $ 000's $ 000's $ 000's
Cost:
As at 1 April 2019 12,823 9,305 1,240 20,586 43,954
Capitalised in
period - 2,149 - - 2,149
------------ ------------ -------- --------------- --------
As at 31 March
2020 12,823 11,454 1,240 20,586 46,103
------------ ------------ --------
Amortisation/Impairment:
As at 1 April 2019 12,626 7,108 1,240 20,586 41,560
Charge for the
year 197 20 - - 217
Impairment - 4,192 - - 4,192
As at 31 March
2020 12,823 11,320 1,240 20,586 45,969
------------ ------------ -------- --------------- --------
Net Book Value:
============ ============ ======== =============== ========
As at 1 April 2019 197 2,197 - - 2,394
============ ============ ======== =============== ========
As at 31 March
2020 - 134 - - 134
============ ============ ======== =============== ========
The main categories of Intangible Assets are as follows:
Developed technology:
This is technology which is currently commercialised and
embedded within the current product offering.
IPR&D technology:
This is technology which is in the final stages of field
testing, has demonstrable commercial value and is expected to be
launched within the foreseeable future.
Brand names:
The value associated with the various trading names used within
the Group.
Customer relationships:
The value associated with the on-going trading relationships
with the key customers acquired.
Impairment
Due to the severe downturn in the price of oil seen since the
start of March 2020, all intangible assets were assessed as to
their future commercial viability. The conclusion was that only the
development of the rotary steerable project, whose licence was
obtained from Shell Global Solutions in September 2019, could be
justified as having future economic value. As a consequence of this
evaluation an impairment charge of $4,192k was recognised in the
consolidated profit and loss statement for the year ended 31 March
2020.
There are now considered to be two cash generating units
("CGU"). The recoverable amount of each CGU is determined from
value in use calculations both where the asset is currently in use
or will be in the future. The key assumptions for the value in use
calculations are those regarding the future revenues, discount
rates, growth rates and expected changes to selling prices and
direct costs during the period. Management estimates discount rates
using pre-tax rates that reflect current market assessment of the
time value of money and the risks specific to the CGU. The growth
rates are based on management forecasts for the five years to March
2026. Cash flow forecasts are prepared from the most recent
financial plans approved by the Board.
Currently the SABER project is in the development phase and has
not generated any revenue. On the assumption that the SABER project
is launched successfully, the longer-term forecast assumes annual
growth rates between 5% and 3%. The remaining assets impairment
test within the separate CGU assumes annual growth rates of 69% in
the year to March 2023, 58% in the year to March 2024, 25% in the
year to March 2025, 20% in the year to March 2026, followed by 3%
thereafter.
The pre-tax rate used to discount both cash flow forecasts is
12.8% (2020: 12.1%). Management have based this rate on the
following factors: a Risk Free Rate of 2.3%; a levered equity beta
of 1.5; a market risk premium of 5.5%; a small cap premium of 3.8%
and an implied cost of debt of 4.5%.
Intangible assets
The intangible assets acquired during the year comprise both
externally procured services from specialist suppliers, which is
shown at the purchase cost, and internally generated costs which is
shown at the cash cost of the items acquired, primarily payroll
related costs.
Amortisation
All categories of intangible assets, apart from the IPR&D
technology, are being amortised over their respective useful lives,
on a straight-line basis. The rotary steerable project will have
its useful life assessed once the field trial have been completed
which will give a better estimate of the useful of this asset.
7. RESPONSIBILITY STATEMENT OF THE DIRECTORS
To the best of the knowledge of the Directors (whose names and
functions are set out below), the final results announcement has
been prepared using accounting policies and methods of computation
consistent with those used in the Group's annual report for the
year ended 31 March 2020 and adopted for the financial year ended
31 March 2021, gives a true and fair view of the assets,
liabilities, financial position and profit for the Company and the
undertakings included in the consolidation taken as a whole;
and
Pursuant to Disclosure Guidance and Transparency Rules, Chapter
4, the Directors' Report of the Company's annual report will
include a fair review of the development and performance of the
business taken, together with a description of the principal risks
and uncertainties faced by the business.
Executive Directors
Andrew Law Chief Executive Officer
David Steel Chief Financial Officer
Non-Executive Directors
Martin Perry Chairman
Iain Paterson
Neil Hartley
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 FQLLBFDLLBBD
(END) Dow Jones Newswires
July 07, 2021 02:00 ET (06:00 GMT)
Enteq Technologies (LSE:NTQ)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Enteq Technologies (LSE:NTQ)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
