TIDMVDTK
RNS Number : 7898J
Verditek PLC
26 August 2021
Verditek plc
("Verditek" or the "Company" or the "Group")
Interim Report and Financial Statements for the six months to 30
June 2021
Verditek plc, (AIM:VDTK) the clean technology company is pleased
to announce its interim results for the six months to 30 June
2021.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Enquiries:
Verditek plc Tel: +44 (0)20 7129 1110
RH Lord David Willetts FRS (Non-Executive enquiries@verditek.com
Chairman)
Rob Richards (Chief Executive
Officer)
WH Ireland Limited (NOMAD and Tel: +44 (0)20 7220 1666
Broker) Chris.Hardie@whirelandcb.com
Chris Hardie (Corporate Finance) Ben.Good@whirelandcb.com
Ben Good (Corporate Finance)
CEO Statement
Overview
The six-month period to 30 June was both a challenging time for
Verditek as well as a period when several fresh seeds were sown.
Having hit high levels of production at the Group's factory in
Lainate, Milan towards the end of 2020, production was scaled back
at the start of 2021 as further projects in the pipeline were
either postponed or withdrawn due to the uncertainty brought about
by the global pandemic. With the economic uncertainty of the last
18-months starting to recede, we believe that the outlook for the
second half of the year is improving.
Strategy
The Group continues to focus all its efforts on becoming a
leader in the manufacture and supply of flexible, lightweight solar
panels. We continue to believe Verditek's product offering is very
well placed to take advantage of the shift away from
hydrocarbon-based energy production. In particular, the recent
publication of the IPPC report on global climate change continues
to drive the focus towards green energy solutions.
Operations
During the period under review, the Company designed its
second-generation solar panel which from a standard size panel of
60 cells now has a power output of 350W. This new version is now
undergoing rigorous testing as part of the certification process.
This process is expected to conclude in the second half of 2021 and
covers testing to International Standards for temperature, fire,
wind, and hail damage as well as durability under normal
conditions. Successful certification should allow our
second-generation panels to be sold in most countries.
Verditek also fulfilled its first PowerMat order during the
period to Intergroup Mining of Australia. The PowerMat is a
portable energy solution that houses up to 700 solar panels
offering up to 250kWp of power which are connected together on a
hinged system for easy roll out and reuse in rural locations. A
second PowerMat solution has been manufactured for demonstration
purposes in the Middle East.
Sales and Marketing
The Group continues to adjust its sales model which combines a
number of commission only sales agents, employed sales consultants
and distributor agents.
During the period, a number of smaller orders were received from
the UK roofing industry, distributors of boat power solutions, as
well as from clients in the Netherlands, Kenya, Italy, Belgium. It
is envisaged that these initial orders will lead to far larger
volumes in the second half of 2021.
We are delighted to report that we have delivered our first
integrated solar/roof panel system through our partnership with
Bradclad. We believe that this could become an important market for
the Company as pressure increases to legislate for minimum amounts
of solar to be incorporated at point of build.
We continue to work with a number of other partners to develop
innovative off-grid solutions which require lightweight solar
panels to be mobile and are optimistic that the volume of sales
will soon increase, given that we now have our panels incorporated
into integrated products.
Other Opportunities
We continue to discuss licencing our manufacturing technology to
a partner in building new plants and have two opportunities under
consideration at the moment, both in the Eastern Hemisphere.
In the 2020 Annual Report, we detailed the goals and outcomes of
the first and second joint development projects (JDP) with
Paragraf, the Cambridge based start-up which has developed world
leading graphene technology.
I am pleased to report that Verditek has now entered into an MOU
for a third JDP with Paragraf which will build on the foundation
block learnings from JDP 1 and 2 and will continue to develop
graphene solutions for the solar market. The first two projects
were solely based around Research and Development, whereas JDP 3
includes more Research and Development in a particular area plus a
commercialisation focus.
Finance
For the six-month period to 30 June 2021, the Group had revenues
of GBP105,000 and recorded a loss after tax of GBP1.2m. As
announced in June, the Group suffered a theft of stock at its plant
in Lainate, Italy. Whilst we remain hopeful that the stock might
still be recovered, a charge of approximately GBP300,000 has been
included in the interim accounts.
Cash balances as at 30 June were GBP919,000 which included
GBP250,000 raised from a two year bond issue via Crowd for Angels.
A further GBP103,253 was raised via this platform after the balance
sheet date.
Overhead spend remains tightly controlled to conserve cash as
the conversion time for prospects to become customers has taken
longer than expected.
Staff
During the period, a new UK sales manager was recruited as well
as a new operations manager at the plant in Lainate, Italy. Both
persons have extensive knowledge of the flexible solar panel
marketplace.
At the end of August 2021, Tim Bowen (CFO) will be moving on to
new ventures and he will be replaced by Vicki Johnson with effect
from 1 September. Vicki has a masters in Chemistry from University
of Oxford and qualified as a chartered accountant with Ernst and
Young in 2010. Vicki has worked for the last two years as Finance
Manager for the advisory firm CFPro and has knowledge of Verditek
already as CFPro deliver tax and accounting services to the
Company.
The Board would like to thank Tim for his significant input over
the past year. He has made a valuable contribution to the Company
and we wish him well in the future.
Outlook and conclusion
Despite recent headwinds, we continue to see positive
opportunities for Verditek and believe the significant investment
into the development of our flexible, lightweight solar panels will
soon bring about meaningful financial reward.
I would like to thank all members of the Verditek team, advisers
and shareholders for their ongoing support.
Rob Richards
Chief Executive Officer
25 August 2021
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
H1 2021 H1 2020 FY 20120
Unaudited Unaudited Audited
Note GBP GBP GBP
Continuing operations
Revenue 105,097 - 21,521
Direct costs (565,312) - (320,473)
----------------------------------- ----- ------------ ---------- ------------
Gross loss (460,215) - (298,952)
Administrative expenses (678,260) (843,354) (1,971,662)
----------------------------------- ----- ------------ ---------- ------------
Operating loss (1,138,475) (843,354) (2,270,614)
Finance Income 360 52 70
Finance costs (15,985) (74,875) (152,025)
----------------------------------- ----- ------------ ---------- ------------
Loss before tax (1,154,100) (918,177) (2,422,569)
Income Tax 45 - 98,448
----------------------------------- ----- ------------ ---------- ------------
Loss for the period (1,154,055) (918,177) (2,324,121)
----------------------------------- ----- ------------ ---------- ------------
Loss for the period attributable
to: -
Owners of the Company (1,169,834) (916,377) (2,231,105)
Non-controlling interest 15,779 (1,800) (93,016)
----------------------------------- ----- ------------ ---------- ------------
( 1,154,055
) (918,177) (2,324,121)
----------------------------------- ----- ------------ ---------- ------------
Other comprehensive income
Items that will or may be
reclassified to profit or
loss:
Translation of foreign operations (60,669) 75,194 38,656
Total comprehensive loss for
the period from continuing
operations (1,214,724) (842,983) (2,285,465)
----------------------------------- ----- ------------ ---------- ------------
Total comprehensive loss for
the period attributable to:
-
Owners of the Company (1,230,503) (837,898) (2,194,053)
Non-controlling interest 15,779 (5,086) (91,412)
----------------------------------- -----
(1,214,724) (842,983) (2,285,465)
----------------------------------- ----- ------------ ---------- ------------
Loss per share
Basic and diluted (GBP) 4 (0.003) (0.004) (0.008)
----------------------------------- ----- ------------ ---------- ------------
Condensed Consolidated Statement of Financial Position
As at 30 June 2021
As at 30 June As at 30 June As at 31 December
2021 2020 2020
Note Unaudited Unaudited Audited
GBP GBP GBP
Assets
Non-current assets
Investments 23,091 25,917 23,405
Property, plant and
equipment 471,892 663,208 586,612
Right of use assets 171,438 239,277 207,104
Non-current assets 666,421 928,402 817,121
------------------------------ ----- ---------------- ---------------- --------------------
Current assets
Inventories 555,729 37,525 636,041
Trade and other receivables 296,195 492,497 423,853
Cash and cash equivalents 919,179 588,858 1,711,761
Current assets 1,771,103 1,118,880 2,771,655
------------------------------ ----- ---------------- ---------------- --------------------
TOTAL ASSETS 2,437,524 2,047,282 3,588,776
------------------------------ ----- ---------------- ---------------- --------------------
Equity and liabilities
Non-current liabilities
Loans and borrowings 250,000 - -
Lease liabilities 117,941 177,260 149,051
Non-current liabilities 367,941 177,260 149,051
------------------------------ ----- ---------------- ---------------- --------------------
Current liabilities
Trade and other payables 471,286 763,485 585,359
Loans and borrowings 5 - 700,017 70,000
Lease liabilities 64,643 43,601 45,883
------------------------------ ----- ---------------- ---------------- --------------------
Current liabilities 535,929 1,507,103 701,242
------------------------------ ----- ---------------- ---------------- --------------------
TOTAL LIABILITIES 903,870 1,684,363 850,293
------------------------------ ----- ---------------- ---------------- --------------------
Share capital 6 136,470 116,758 136,470
Share premium account 6 10,733,073 6,945,074 10,733,073
Share based payment
reserve 109,079 88,850 99,184
Accumulated losses (9,279,655) (6,795,093) (8,109,821)
Translation reserve (59,805) 42,291 864
Non-controlling interests (105,508) (34,960) (121,287)
Total shareholders'
equity 1,533,654 362,919 2,738,483
------------------------------ ----- ---------------- ---------------- --------------------
TOTAL EQUITY AND LIABILITIES 2,437,524 2,047,282 3,588,776
------------------------------ ----- ---------------- ---------------- --------------------
Condensed Statement of Changes in Equity
As at 30 June 2021
Issued Share Share Accumulated Translation Non-controlling Total
share capital Premium based losses reserve interest
payment
reserve
GBP GBP GBP GBP GBP GBP GBP
As at 1 January
2020 91,666 5,466,376 21,703 (5,878,717) (36,189) (29,874) (365,035)
Loss for the
period - - - (916,377) - (1,800) (918,177)
Translation of
subsidiary - - - - 78,480 (3,286) 75,194
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Total
comprehensive
loss for the
period - - - (916,377) 78,480 (5,086) (842,982)
Issue of shares
net of expenses 25,092 1,478,698 - - - - 1,503,790
Share based
payment - - 67,147 - - - 67,147
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Shareholders'
equity at 30
June
2020 116,758 6,945,074 88,850 (6,795,093) 42,291 (34,960) 362,920
Loss for the
period - - - (1,314,728) - (91,216) (1,405,944)
Translation of
subsidiary - - - - (41,427) 4,889 (36,538)
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Total
comprehensive
loss for the
period - - - (1,314,728) (41,427) (86,327) (1,442,482)
Issue of shares
net of expenses 19,712 3,787,999 - - - - 3,807,711
Share based
payment - - 10,334 - - - 10,334
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Shareholders'
equity at 31
December
2020 136,470 10,733,073 99,184 (8,109,821) 864 (121,287) 2,738,483
Loss for the
period - - - (1,169,834) - 15,779 (1,154,055)
Translation of
subsidiary - - - - (60,669) - (60,669)
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Total
comprehensive
loss for the
period - - - (1,169,834) (60,669) 15,779 (1,214,724)
Share based
payment - - 9,895 - - - 9,895
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Shareholders'
equity at 30
June
2021 136,470 10,733,073 109,079 (9,279,655) (59,805) (105,508) 1,533,654
----------------- --------------- ----------- --------- ------------ ------------ ---------------- ------------
Condensed Statement of Cash Flows
For the 6 months ended 30 June 2021
Note
H1 2021 H1 2020 FY 2020
Unaudited Unaudited Audited
GBP GBP GBP
Operating activities
Loss before tax from continuing
operations (1,154,055) (918,177) (2,422,569)
Adjustment for:
Depreciation 120,115 43,208 164,566
Finance costs 15,985 74,875 152,025
Financial income (360) (52) (70)
Share based payment expenses 9,895 67,147 77,481
----------------------------------------- ------------ ---------- ------------
(1,008,420) (732,999) (2,028,567)
Working capital adjustments
(Increase) / decrease in
inventory 80,312 (2,487) (601,003)
(Increase) / decrease in
trade and other receivables 129,811 (55,422) 638,595
Increase / (decrease) in
trade and other payables (117,124) (147,837) (761,385)
------------ ---------- ------------
Net cash outflow from operating
activities (915,421) (938,745) (2,752,360)
----------------------------------------- ------------ ---------- ------------
Investing activities
Purchase of fixed assets (5,808) (2,568) (33,215)
----------------------------------------- ------------ ---------- ------------
Net cash outflow from investing
activities (5,808) (2,568) (33,215)
----------------------------------------- ------------ ---------- ------------
Financing activities
Issue of ordinary share
capital - 1,456,791 5,076,047
Loans issued 250,000 - -
Interest paid on loans (18,429) - (162,894)
Finance income 360 51 62
Repayments of loans (70,000) - (455,076)
Payment of lease liabilities (17,622) (36,409) (69,920)
------------ ---------- ------------
Net cash inflow from financing
activities 144,309 1,420,433 4,388,219
----------------------------------------- ------------ ---------- ------------
Net (decrease)/increase
in cash and cash equivalents (776,920) 479,120 1,602,644
Cash and cash equivalents
at the beginning of the
period 1,711,754 107,279 107,243
----------------------------------------- ------------ ---------- ------------
934,834 586,399 1,709,887
Exchange gains on cash and
cash equivalents (15,655) 2,459 1,874
Cash and cash equivalents
at the end of the period 919,179 588,858 1,711,761
----------------------------------------- ------------ ---------- ------------
Notes to the Condensed Financial Statements
1. General Information
The Interim Financial Statements are for the six months ended 30
June 2021 and are presented in British Pounds (GBP), which is the
functional currency of the parent company. They have been prepared
in accordance with IAS 34 'Interim Financial Reporting'. They do
not include all of the information required in annual financial
statements in accordance with IFRS, and should be read in
conjunction with the consolidated financial statements for the year
ended 31 December 2020.
Verditek plc ("Verditek" or the "Company" or the "Group") is a
public limited company incorporated, registered and domiciled in
England Wales (registration number 10114644), whose shares are
quoted on the Alternative Investment Market on the London Stock
Exchange. Its registered office is located at 29 Farm Street,
London W1J 5RL.
Verditek is the holding company of a group of companies engaged
in the clean technology sector.
The Interim Financial Statements have been approved for issue by
the Board of Directors on 25 August 2021.
2. Basis of Preparation
The financial information presented in this condensed
consolidated interim report for the half-year has been prepared in
accordance with the recognition and measurement requirements of
International Financial Reporting Standards ("IFRS") issued by the
International Accounting Standards Board, as adopted by the
European Union. The principal accounting policies adopted in the
preparation of the financial information in this Interim Report are
unchanged from those used in the Company's financial statements for
the year ended 31 December 2020.
The financial information for the year ended 31 December 2020
presented in this Interim Report does not constitute the Company's
statutory accounts for that period but has been derived from them.
The Annual Report and Accounts for the year ended 31 December 2020
were audited and have been filed with the Registrar of Companies.
The Independent Auditors' Report on the Annual Report and Accounts
for the year ended 31 December 2020 was unqualified and did not
draw attention to any matters by way of emphasis and did not
contain statements under s498(2) or (3) of the Companies Act 2006.
The financial information for the periods ended 30 June 2020 and 30
June 2021 is unaudited.
A copy of the audited consolidated financial statements for the
year ended 31 December 2020 is available on the Company's
website.
New Standards adopted as at 1 January 2021
Accounting pronouncements which have become effective from 1
January 2021 are:
-- IFRS 3 Business Combinations - definition of a business
-- IAS 1 and IAS 8 - definition of material
-- IFRS 9, IFRS 7 and IAS 39 - interest rate benchmark
-- IFRS 7 - Insurance contracts
These accounting pronouncements do not have a significant impact
on the Group's financial results or position.
Going concern
The interim financial statements have been prepared under the
going concern basis as the Directors are satisfied that sufficient
funds are or will become available to the Group to meet its
on-going working capital requirements. The Group's assessment takes
account of current cash resources, expected costs and expected
revenues. The Group has a substantial pipeline of commercial
opportunities, and is focussed on converting these into sales in
the next year. The Group has also secured GBP353,253 in funding
from an issue of corporate bonds, of which GBP250,000 was received
in the period, with the remainder received in August 2021.
After considering the forecasts and the risks, the Directors
have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future.
For these reasons, they continue to adopt the going concern basis
of accounting.
Dividends
The Directors do not propose an interim dividend.
Material changes in accounting estimates or judgments
The preparation of unaudited interim financial information
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses for the
current and its corresponding financial period under review. Actual
results may differ from these estimates.
In preparing the unaudited interim financial information, the
significant judgements made by the management in applying the
Group's accounting policies and the sources of estimates
uncertainty were consistent with those applied to the audited
financial statements for the year ended 31 December 2020.
3. Segmental Information
The chief operating decision-maker is considered to be the Board
of Directors of Verditek. The chief operating decision-maker
allocates resources and assesses performance of the business and
other activities at the operating segment level.
The chief operating decision maker has determined that in the
period ended 30 June 2021, Verditek had one operating segment, the
development and commercialisation of clean technologies, although
it is likely that in future periods the Group's segmental reporting
will be expanded as different technologies are developed and
commercialised.
Revenue and segmental information
6 months ended 6 months ended For the year
30 June 21 30 June 20 ended 31 December
20
Unaudited Unaudited Audited
GBP GBP GBP
-------------------------- --------------- --------------- -------------------
Sale of Goods 105,097 - 21,521
Total 105,097 - 21,521
-------------------------- --------------- --------------- -------------------
The Group had one customer that exceeded 10% of revenue in
2021.
Geographical Segments
Apart from holding company activities in the UK, the Group had
operations in Milan, Italy, in the period. An analysis of revenue,
operating loss and non-current assets by geographical market is
given below:
6 months ended 6 months ended For the year
30 June 21 30 June 20 ended 31 December
20
Unaudited Unaudited Audited
GBP GBP GBP
--------------------------- --------------- --------------- -------------------
Revenue
UK - - -
Rest of Europe 105,097 - 21,521
105,097 - 21,521
--------------------------- --------------- --------------- -------------------
Operating loss
UK (412,202) (641,734) (1,336,955)
Rest of Europe (726,273) (201,620) (933,659)
--------------------------- --------------- --------------- -------------------
(1,138,475) (843,354) (2,270,614)
--------------------------- --------------- --------------- -------------------
Non-current assets
UK 23,964 26,460 24,623
Rest of Europe 642,457 901,942 792,498
--------------------------- --------------- --------------- -------------------
666,421 928,402 817,121
--------------------------- --------------- --------------- -------------------
During the period there was a theft of inventory from the
factory in Milan, resulting in a charge to direct costs of
approximately GBP300,000.
4. Loss Per Share
The calculation of loss per share is based on the following loss
and number of shares:
For the year
6 months ended 6 months ended ended 31 December
30 June 21 30 June 20 20
Unaudited Unaudited Audited
GBP GBP GBP
-------------------------- --------------- --------------- -------------------
Loss for the period from
continuing operations
(GBP) (1,169,834) (916,377) (2,231,105)
-------------------------- --------------- --------------- -------------------
Weighted average number
of shares: Basic 341,172,443 249,774,633 280,609,258
Loss per share (GBP) (0.003) (0.004) (0.008)
-------------------------- --------------- --------------- -------------------
Basic loss per share is calculated by dividing the loss for the
period from continuing operations of the Group by the weighted
average number of ordinary shares in issue during the period.
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potential dilutive options and warrants over ordinary shares.
Potential ordinary shares resulting from the exercise of share
options and warrants have an anti-dilutive effect due to the Group
being in a loss position. As a result, diluted loss per share is
disclosed as the same value as basic loss per share.
5. Loans and Borrowings
For the year
6 months ended 6 months ended ended 31 December
30 June 21 30 June 20 20
Unaudited Unaudited Audited
GBP GBP GBP
-------------------------- ---------------- --------------- -------------------
Current
Interest free related
party loan - 43,243 -
Interest bearing related
party secured loan - 486,774 -
Convertible loans - 170,000 70,000
Total Current loans and
borrowings 700,017 70,000
-------------------------------------------- --------------- -------------------
For the year
6 months ended 6 months ended ended 31 December
30 June 21 30 June 20 20
Unaudited Unaudited Audited
GBP GBP GBP
------------------------- --------------- --------------- -------------------
Non - current
Convertible bonds issued
to related party 25,000 - -
Convertible bonds 225,000 - -
Total Non-current loans
and borrowings 250,000 - -
------------------------- --------------- --------------- -------------------
On 1 June 2021, Verditek issued a corporate "green" bond to
raise up to GBP500,000.
The bond, yielding 7%, is being issued through crowdfunding
platform Crowd for Angels, which has underwritten the first
GBP225,000. The bond term is two years and interest will be paid
quarterly. Security will be by way of a floating charge on the
assets of the Company. The Company also issued to Crowd for Angels
10 warrants for each GBP1 invested for a term of 36 months to
subscribe for new ordinary shares at the closing bid price
immediately prior to the date of the Loan Note agreement, which was
3.1p. In addition, one of Verditek's non-executive Directors has
entered into a bond with similar terms for GBP25,000 directly with
the Company.
Cashflow - net debt analysis
Other
cash Foreign Other non-cash
01-Jan-21 Debt Funding outflows Exchange movement 30-Jun-21
GBP GBP GBP GBP GBP GBP
--------------------------- ---------- ------------- ---------- ---------- --------------- ----------
Cash and cash equivalents 1,711,754 162,378 (939,298) (15,655) - 919,179
Convertible bonds (70,000) 70,000 - - - -
Secured bonds - (225,000) - - - (225,000)
Secured bonds issued
to related party - (25,000) - - - (25,000)
Lease liability (194,934) 17,622 - 8,916 (14,188) (182,584)
--------------------------- ---------- ------------- ---------- ---------- --------------- ----------
1,446,820 - (939,298) (6,739) (14,188) 486,595
--------------------------- ---------- ------------- ---------- ---------- --------------- ----------
6. Events after the reporting date
Following the close of the corporate bond offer in July 2021, a
further GBP103,253 has been raised through crowdfunding platform
Crowd for Angels.
7. Copies of the interim report
Copies of this interim report are available on the Company's
website at www.verditek.com and from the Company's registered
office, 29 Farm Street, London W1J 5RL.
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