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RNS Number : 9970P
Applied Graphene Materials PLC
16 October 2019
 

 

 

 

 

16 October 2019

 

Applied Graphene Materials plc

 

("Applied Graphene Materials", "the Group" or "the Company")

 

Full year results for the year ended 31 July 2019

 

Applied Graphene Materials, the producer of specialty graphene materials and dispersions, announces its full year results for the year ended 31 July 2019.

 

Operational and commercial highlights

  • Good commercial progress being made, albeit yet to lead to revenue growth due to time to introduce and test materials rigorously for customer product launch
  • Customer/AGM new product launches:
    • JBL formally launched its Hycote anti-corrosion primer
    • Alltimes launched its Advantage Graphene roof coating product for construction use
    • Applied Nano Surfaces is scaling up production of a low-friction aerosol-based coating product, Tricolit®
    • Thermal adhesive product launched by an independent high performance product specialist
    • AGM's water based application launched in July 2019
  • Two new distributors appointed  - CAME in Italy and Carst and Walker in South Africa following full launch of our Genable® standard dispersion product range
  • Strong technical data to demonstrate the efficacy of AGM's graphene dispersions presented at major coatings industry conferences
  • Manufacturing patent granted in key territory in May 2019

 

Financial overview

  • Total income              £0.12 million (2018: £0.20 million)
  • EBITDA*                     Loss of £4.83 million (2018: loss of £4.54 million)
  • Cash at bank              £6.13 million (2018: £10.44 million)
  • Basic EPS                  Loss of 7.9 pence per share (2018: loss of 8.2 pence)
  • Adjusted EPS             Loss of 7.9 pence per share (2018: loss of 7.5 pence)

* EBITDA comprises loss before interest, tax, exceptional costs, depreciation and amortisation.

 

Post year end

 

·      R&D tax credit of £0.62m received in August 2019 further strengthens the Company's cash position

·      On 9 October 2019 the Company entered into a consultation period with staff to re-align its resources which will reduce costs

·      The re-alignment will further extend the Company's cash runway

 

Adrian Potts, Chief Executive Officer, commented:

"This year we have continued to consolidate our industry-leading IP in the integration of graphene into coatings, in collaboration with our commercial partners. Our dispersion technology is critical to building the strong technical foundations that will support the success and long-term sustainability of our business.

 

As announced, revenue development this year has been slower to materialise than expected. The route to launch graphene-enhanced products takes time to realise full potential, due to the varied and often lengthy testing processes and the complexity of effectively transferring graphene's exceptional properties. The restructuring process we are implementing will re-align our business to focus on our core dispersion technology and will reduce our cost base to sustain the business while we focus on achieving conversion of our pipeline of approximately 100 active engagements, and in particular our core near term customers, into meaningful revenues.

 

Our commercial momentum continues to build, and we have been pleased to announce progress on a number of partnerships, as well as product launches by Alltimes Coatings, and James Briggs which are on schedule for this calendar year. Meanwhile, we are also progressing a large number of collaborations with customers under non-disclosure agreements, and look forward to updating the market on these in due course."

                                                                               

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

Applied Graphene Materials' results presentation, with audio commentary, is expected to be made available on its website at http://www.appliedgraphenematerials.com in due course.

 

For further information, please contact:

 

Applied Graphene Materials                                                                                            +44 (0) 1642 438 214

Adrian Potts, Chief Executive Officer

David Blain, Chief Financial Officer

 

N+1 Singer                                                                                                                           +44 (0) 207 496 3000

Richard Lindley / Justin McKeegan / Mia Gardner

 

Hudson Sandler                                                                                                                  +44 (0) 207 796 4133

Charlie Jack / Emily Dillon

Notes to Editors

Applied Graphene Materials works in partnership with its customers using its knowledge and expertise to provide bespoke graphene dispersions and formats to deliver enhancements and benefits for a wide range of applications. The Group's strategy is to target commercial applications in three core markets: coatings, composites and functional materials. 

The Group has developed proprietary bottom-up processes which are capable of producing high purity graphene nanoplatelets using a continuous process. The manufacturing process is based on sustainable, readily available raw materials and therefore does not rely on the supply of graphite, unlike a number of other graphene production techniques. Applied Graphene Materials owns the intellectual property and know-how behind this process.

Applied Graphene Materials was founded by Professor Karl Coleman in 2010 with its operations and processes based on technology that he initially developed at Durham University.  The Group was admitted to AIM in November 2013, raising £11 million, and is based at the Wilton Site on Teesside. In January 2016 the Group raised £8.5m to support its ongoing activities and in October 2017 the Group raised a further £9.8m.

Overview

 

This year the Company has made key technical progress with our commercial partners and on strengthening our graphene product offering. These are important foundations which will ultimately establish this business commercially for its sustainable future. Time to develop revenues continues to be significant, due mainly to the time that it takes to introduce and test materials rigorously for approval and adoption for eventual customer product launch.

 

The positive milestone momentum we are experiencing with our commercial partners gives us confidence in the outlook and commercialisation of further collaborations currently in our pipeline. The repeatable demonstration that our graphene dispersions, when correctly incorporated and used, produce substantial improvements in barrier performance in coatings, toughness in composites and thermal/mechanical performance in adhesives is encouraging - and we have seen this in product launches through the year as customers transition from testing to commercially viable products. Alongside these positive steps, we are seeing solid progress with customers who are still evaluating our products and going through scale up trials of their own and demonstrating strong results. 

 

We have also been able to fully launch our own new standardised products in the year which has enabled us to extend our route to market via third party distributors. We have purposely selected technically-based distributors to enable the technical-sell to work well and provide the best opportunity for success.

 

Technical progress in the coatings sector has been excellent. We have further extended our anti-corrosion and barrier technologies using our graphene nanoplatelet dispersions and established new water-based coating additives. Achieving the stable distribution of nanomaterials into water-based dispersions is a major breakthrough for the industry. We are now able to participate in the significant water-based coatings market which is expanding as a result of increasing regulation against environmentally detrimental solvent-based alternatives. The testing by customers in this sector tends to be to a shorter timeline, potentially giving our products a faster route to market. All participation in the coatings market requires performance data to prove products and to this end we have invested in further test equipment throughout the year to enable more efficient running of testing programmes. We have also applied industry standard accelerated testing methods to enable a faster, iterative approach to formulating optimised solutions.

 

Achieving consistent graphene performance in composite materials is a technical challenge, but we have again seen success in this area and are starting to gain further traction with two different product offerings. The direct use of Genable® dispersions has enabled companies like Infinite Composites Technologies to excel with composite structural integrity in the area of pressure vessel technology for use in space with NASA, while our Structural Ink technology has been demonstrated in composite structures for tooling. .

 

With specialty products such as our thermal adhesives, it has proven to be a long pathway to final qualification of the materials for use on satellites. However, the critical milestone of qualification is close and we have recently supplied trial materials for packaging in the final approved format.

 

We are currently in a consultation period with staff regarding this proposed restructuring. We are focused on the core strengths of the business of efficient dispersion manufacturing and development, technical strength and exceptional customer service.

 

Commercial progress

 

The graphene industry continues to develop as it seeks to integrate the nanoplatelet format of graphene into effective applications. We believe our strength in dispersion technology is our unique selling proposition and represents the keys to the successful technical adoption by customers seeking to realise the performance benefits which graphene as nanoplatelets has to offer.

 

Our technology group continues to focus on the effective realisation of graphene's remarkable performance characteristics through its application in coatings and composite materials technology development. Around three quarters of our activity is in the coatings space, which we regard as the key area to grow our  revenue going forward. This sits alongside long-standing projects such as our qualification effort with Airbus Space and Defence with our thermal paste adhesive formulated products.

 

In the coatings sector, we have purposely prioritised our focus on smaller companies to gain commercial traction, whilst continuing to maintain our engagement with the majors. We find these smaller, more agile entities, tend to be both hungry for innovation and also see the opportunity to integrate new technology into their market offerings in a relatively shorter timeline, notwithstanding that the product still needs testing iteratively and intensively in their own formulations. Our end-to-end technical service offering is a key enabler, often through use of our own facilities.

 

It clearly takes time to successfully integrate new technology to enable customer product launches and realise revenues. With coatings technology, the reality of revenue is directly tied to the time it takes to integrate graphene materials into complex coatings chemistries and then for customers to test them over many weeks and months. It is not uncommon for a test set to last for 3,000 hours (18 weeks) once a promising customer formulation has been determined and initially evaluated for a number of weeks prior to this formal testing process.

 

The key benefit that customers have in partnering with AGM is our integrated, end-to-end approach to customer engagement. I firmly believe we have the keys to this breakthrough technology, which are as follows:-

-       developing a deep understanding of each customer's objectives and formulation;

-       ensuring good clarity of the commercial viability of the product offering;

-       ensuring the optimal graphene appropriate for purpose is selected;

-       dispersing graphene correctly in an easy to use intermediate additive; 

-       active formulation effort in collaboration with the customer;

-       initial testing;

-       longer term testing; and

-       successful results and product launch to generate revenue streams.

 

This model of engagement reads across to all sectors that we are involved in and reflects the depth and quality of activity we have with each customer that wants to seriously engage with our innovative graphene technology offerings.   

 

With composite materials technology, we continue to develop the potential of graphene for mechanical performance enhancements and are also now seeing positive momentum with our innovative Structural Ink® technology. An outstanding example of mechanical performance improvements achieved with the addition of graphene has been seen in the area of mechanical damage limitation following extreme cyclic of composite parts for the space industry with our customer Infinite Composite Technologies.

 

We also remain absolutely committed to specialty materials development such as the qualification project we have ongoing with Airbus for thermal adhesives technologies. These materials are now at a level of maturity to be promoted further afield to other potential customers in the Space and Defence sector..

 

We are currently managing around 100 active customer engagements that we believe have prospects for ultimately generating revenues. We continue to manage the project count effectively and focus on those that are most likely to succeed. We selectively consider newer engagements, when they appear commercially and technically viable and where we believe there is genuine appetite from the customer to engage towards a commercially viable product.

 

Pipeline overview

 

The number of programs in the pipeline as at 31 July 2019 and the movements since 31 January 2019 are as follows:

 

At 31 July 2019

Stage of development

Approval time

Agreement on scope of sampling and engagement

Initial testing and interpretation of results

Repeat testing for consistency and review of results

Final product trials formulation and specification

Final commercial agreement

Total

Short

0

0

1

0

3

4

Medium

12

21

6

4

5

48

Long

5

21

5

3

0

34

Technology scouting or time frame unclear currently

4

9

2

0

0

15

Total

21

51

14

7

8

101

Change since 31 January 2019

 

 

 

 

 

 

Short

-11

-8

-4

-4

-1

-28

Medium

-6

-4

-7

2

2

-13

Long

-2

9

4

3

0

14

Technology scouting or time frame unclear currently

-2

8

1

0

0

7

Total

-21

5

-6

1

1

-20

 

As part of our ongoing assessment of these opportunities, the total number of active engagements has fallen during the last 6 months due to the elimination of early stage projects where success was deemed less likely allowing us to focus on projects with a greater chance of success.

 

Coatings sector

 

Our teams continue to work closely with customers to realise the barrier, chemical resistance and anti-corrosion performance benefits that the impermeable nature of graphene nanoplatelets offers in coatings formulations. Key to this technology generating long term success is AGM's unique expertise in dispersing graphene into the customer's often unique coating chemistry.

 

Making graphene materials easy for coatings customers to integrate through achieving appropriate dispersions typically in matrix resins, solvents and water is foundational to a successful outcome. The integration of such dispersions is the fundamental means of enabling the transfer of the particular graphene characteristics into the customer's host material. Our Genable® range of standard dispersions offers ease of selection and ease of use and ise supported with substantial data and "how-to" technical application information. We can also customise dispersions to suit their specific chemistry needs as required. The launch of the complete range of Genable® dispersions has enabled us to develop a new route to market through technical distributors. It was particularly pleasing to be able to sign up CAME (Italy) and Carst & Walker (South Africa and Australasia), both of whom operate in the coatings sector and are able to support the technical approach with novel materials. Whilst still in the early stages of the relationship, both of the new distributors have made an encouraging start with samples being issued to a range of potential new projects.  We are also look forward to announcing further distribution agreements in other territories with the expectation that these will be an additional route to revenue growth.

 

Following extensive and rigorous testing, James Briggs Ltd (JBL) formally launched its Hycote anti-corrosion automotive aerosol primer at the Automechanika trade event earlier in 2019.  As a zinc-free primer system, the paint has positive environmental and performance features. We anticipate a sales ramp up through both their distribution channels and direct retail selling in the current financial year. Initial production orders have been fulfilled to support early inventory.

 

In July 2019, coatings innovator Alltimes Coatings Ltd (Stroud, UK) launched its Advantage Graphene roof coating product for construction use.  The Advantage Graphene system is the result of extensive product development and a rigorous testing programme and has ultimately produced a liquid roof coating system that delivers an industry-leading level of anti-corrosion performance and life expectancy. AGM's graphene technology has also helped enhance other key coating performance attributes and ultimately provides building contractors and owners with a cost-effective solution. Due to its exceptional corrosion resistance performance, Advantage Graphene is being offered with an unparalleled, industry leading 30-year product warranty, extended from 20 years with Alltimes Coatings' previous product. As part of the promotion of this new technology, one of the buildings at the Wilton site where AGM is located  is to have its roof repainted with the Alltimes Advantage Graphene paint - an early practical demonstration of the material in use.

  

We continue our intensive customer technical support across a large number of engagements in order to accelerate the number of products our customers can bring to market to create revenue for them and AGM. 

 

Further product launches are anticipated from UK coatings innovators Blocksil Ltd (Lichfield, UK) and HMG. Blocksil has developed a new product, 'Graphene Enhanced Top Coat MT', a ground-breaking high performance, anti-corrosion coating for applications across a broad range of harsh industrial environments. The new graphene-loaded coatings system delivers leading mechanical and physical properties in a single coat. Graphene Enhanced Top Coat MT is sustainable, VOC free and easily applied. Retaining full flexibility and adhesion, the enhanced product delivers excellent UV resistance alongside improved levels of toughness and fire resistance. Blocksil is actively engaged with end users and specifiers across industries with high value assets and infrastructure operating under harsh environmental conditions.

 

We continue our active engagement with HMG, collaboratively formulating and testing a new graphene enhanced product for the protective coatings sector. Again, this uses graphene's property of impermeability and AGM's dispersion technology to deliver the possibilities of enhanced product performance. Testing should run out to early 2020 and we look forward to a positive outcome and product launch accordingly.

 

We are collaborating with a significant number of further coatings companies involved in assessing the performance of our dispersions in their coatings systems. The level of testing and evaluation ranges from initial formulating through to full scale up trials on the production shop of a USA-based customer working on mitigation of aluminium corrosion. Real world use of our graphene dispersions has thus demonstrated that the materials can be added, mixed, sprayed and used practically, repeatedly and consistently which is vital proof of feasibility for customers seeking to confidently introduce this new platform technology. 

 

Away from the world of anti-corrosion, we have qualified our A-GNP10 nanoplatelets, supplied through a customised dispersion for Applied Nano Surfaces (Uppsala, Sweden) for their innovative graphene-fortified low friction coatings Tricolit®-GO. This coating features low friction and high abrasion resistance and is an aerosolised product. ANS Tricolit®-GO is part of the ANS Tricolit® range of thermoset surface coatings serving to reduce friction and wear. Materials can be sprayed, dipped or brushed and are suitable for treatment of nonferrous materials which cannot be tribo-conditioned. We are finalising scale up plans now that materials are ready to be promoted.

 

Product development continued apace in the year to support further adjacent opportunities in the coatings sector and to broaden the scope of our product range. We launched our innovative acrylic water-based technology to meet the expectations of the evolving environmental pressure on the coatings industry applicable to Direct-to-Metal (DTM) applications. We see water-based coating development remaining a focus for coatings industry formulators, with tightening of regulations brought in to lessen the detrimental impact that solvent-based coatings have on both worker health and the environment. Water-based coatings tend to inherently need improved anti-corrosion performance, and we believe this new product range has the potential to extend anti-corrosion performance, enabling broader industrial protective coating appeal. We are delighted to have presented this significant technological progress to our customers, reaffirming AGM as the leader in the development of cutting-edge graphene applications tailored to add significant value for paints and coatings manufacturers. We see good potential with a number of engagements with this new product package.

 

The market for coatings in the anti-corrosion general industrial sub-sector, is substantial and we see good opportunity to develop revenues through:-

-       Continuing proof of concept;

-       Continuing product launches from successful customer adoption;

-       Continuing presentations of our products and their positive advantages; and

-       Continuing in depth customer engagement to enable realisation.

 

Composites sector

 

Very low density, outstanding specific performance, and durability are key attributes necessary for the composite materials sector. The inclusion of graphene can improve these fundamentals without adding significant weight. As with the coatings industry, the real challenge to success is in creating a discrete array of nanoplatelets within the host material to enable the realisation of the performance of the graphene that has been added. AGM's dispersion technology using either our standard Genable® dispersions or a customised offering often in a specific matrix resin or such as a printable format, again provides the key to successful outcomes in the end product, with the combination of performance described above being achieved.

 

Recent traction with our products, and typical of the technical success we aspire to, is with USA-based customer Infinite Composites Technologies. AGM and Infinite Composite Technologies have a long-standing relationship in the development of innovative composite material for pressure vessel technology incorporating graphene technology. Working closely together to initially investigate the potential application of AGM's graphene materials, the technology has been progressively developed to its current advanced state.

 

After the period end we announced that Infinite Composites has successfully incorporated AGM's Graphene Nanoplatelets into two resin systems for cryogenic pressure vessels being considered for use in multiple NASA spaceflight missions, including Materials on the International Space Station Experiments (MISSE), Artemis, and Lunar Gateway. The addition of AGM's graphene nanoplatelets (GNPs) has enabled the tanks to complete their first liquid oxygen loading test at -300ºF pressurised to 600 psi. Analysis of the composite indicated that the addition of GNPs eliminated nearly all microfractures in resin samples after exposure to the cryogenic environment versus the control samples.  These results using AGM's graphene in real composites applications subject to extreme testing further underpin the performance and value of the use of GNPs for the effective management of attributes such as fracture toughness and robustness of composite structures for long-term durability. Whether into resin formulation directly for winding processing of pressure tanks or direct integration into composite prepregs, AGM's dispersion technology offers an appropriate solution that is easy to integrate into the resin mixing stage of the customer's process.

 

AGM's Structural Ink® technology platform as a means of selectively printing high quality formulated ink-based graphene where it is needed continues to demonstrate significant performance uplifts in composite fracture toughness. We are starting to see the benefits from the equipment investment we made last year for further product optimisation and process scale up. We are able to print graphene with high precision at very low added weight to enhance the interlaminar performance of composite structures. With potential application initially in sports and leisure applications where toughness is important, we are also investigating how to broaden the scope of applicability to other materials and sectors - building on, for example, the printing work completed in the Composites Tooling Engineering Services (CTES) tooling project discussed below.

 

CTES and Nano Enhanced Aerospace Interiors (NEAT) projects funded under the National Aerospace Technology Exploitation Programme (NATEP) were completed in the year and yielded positive results.

 

CTES, with industrial partners AGM, CTES Ltd, SHD Composites Ltd and GKN Aerospace investigated the use of graphene in composite tooling applications where carbon or glass fibre prepregs are used to create forming and curing fixtures for composite part manufacturing. Accuracy, quality of surface finish and longevity are key attributes required for composite tooling forming/curing fixtures used in the industry. The use of graphene inks printed into the tooling laminate as well as graphene in the prepreg structure have demonstrated enhanced performance for tooling applications and we anticipate further demonstration of this technology in the near future, again using graphene both in the prepreg and with using printing methods. Broader dissemination of the team's developments are now underway.

 

The 18 month NEAT project with partners Composites Evolution Ltd and Coventive Composites has yielded a prepreg product that can be used in aircraft interiors with enhanced mechanical performance as well as critical fire, smoke and toxicity performance. The customer is at the early stage of field trialling these innovative materials with end-users with a view to demonstrating a balance of performance advantage, optimised design, improved processing and enhanced surface finish.

 

Functional materials

 

As previously noted, the qualification of thermal paste adhesive product TP300 continues with Airbus Space and Defence, with anticipated completion and initial revenues now anticipated in calendar H1 2020. Following the four years of development effort, we are now offing materials engineers in the Space and Defence industries two unique thermally conductive epoxy paste adhesive systems, AGM TP300 and TP400.  These novel epoxy adhesive systems exhibit high levels of thermal conductivity (3 and 6 W/mK respectively), combined with excellent mechanical, adhesive and outgassing performance. Most significantly, these properties are achieved with cured resin density as low as 40% that of competitive conventional conductive adhesive systems on the market. TP300 and TP400 are therefore highly versatile, providing end users with significant savings in both mass and cost. The format of the materials makes them ideal for structural bonding and gap filling adhesive needs where payload weight is critical.

 

In April 2019, an independent high-performance product specialist launched a graphene filled epoxy system which offers high thermal conductivity and low density.  This product is ideal for bonding flat surfaces and where contact pressure can be applied. The product advantages are:

·      High thermal conductivity

·      Low co-efficient of thermal expansion

·      High compressive strength

·      Wide service temperature range

·      Superior dimensional stability

·      Thick non-drip consistency

   

Technological and manufacturing capabilities

 

We launched the Genable® standard dispersions product range during the early part of the year as a result of sustained formulating effort. This enabling technology, backed by testing data, means that customers can integrate our products with confidence into their complex formulations.

 

Our formulations team completed development of new stabilised water-based dispersion chemistry to meet the trend for improved environmentally friendly products in the coatings industry. Water-based formulating is a complex process in the dispersion of graphenes and I am pleased with the progress our technical team has made in overcoming this challenge to support this market opportunity. Initially with acrylics chemistry for opportunities such as the DTM (Direct-to-metal) coatings market, we look forward to the imminent further release of epoxy versions to enable a fuller dialogue with customers keen to assess our materials in this format.

 

We continue with the product development cycle to address the challenges of harsher environmental conditions and therefore more rigorous testing in the C4 / C5 categories (factories and bridges over water) for barrier technology. The testing regime is substantial, involving multi-faceted evaluation, but I am convinced that the quality of work and end results based on current performance will enable a strong opportunity to ensure a positive customer experience with our products and deliver revenue bearing engagements.

 

In recognition of the performance that the Genable® 3000 series product makes to anti-corrosion performance on steel coatings, AGM's product was nominated as a finalist in the Materials Performance Corrosion Innovation Awards for 2019, a programme run in parallel with the USA-based National Association of Corrosion Engineers (NACE). The product enables coatings performance enhancements in applications subject to high humidity and aggressive atmosphere, including inshore areas of medium to high salinity

 

Aware of the need to see products through to end product integration in a safe and reliable manner, AGM also made a substantial commitment to evaluate the performance of nano-materials in various coatings configurations to review the associated environmental, health and safety considerations. The results are positive thus far and again reflect the professional approach to address the regulatory requirements we are taking in the adoption of this class of materials technology into a coatings industry that is relatively conservative.  We continue to be leaders in the EU REACH consortium dealing with graphene nano-materials regulatory issues, having regular input to the evolving landscape.

 

Patent filings and IP protection continued in the year as we seek to protect the know-how we have generated.

 

Marketing our technical expertise

 

In the year we also made a commitment to disseminate our technical information to a much wider audience. We presented at multiple technical conferences including the European Coatings Show, the National Association of Corrosion Engineers (NACE) conference in USA etc, and this has created further positive dialogue at a detailed customer level to enable consideration of both the benefits of graphene additions and also the key of "how-to" integrate effectively. This quality of dialogue and information transfer is key to successful customer adoption of graphene in the future.

 

Re-alignment of resources

 

Whilst the Company has continued to make strong technical progress with its customers and remains well positioned in its focused sectors, revenue development takes time to realise in full. It remains challenging for the Group to predict the timing of larger-scale commercial orders as a result of the significant testing processes that AGM and its customers must undertake to enable long term adoption. During the year, the testing programmes of some of the Group's customer graphene enhanced products have been longer than anticipated.

 

Experience over recent years has clearly demonstrated that AGM's core expertise is in dispersion and application know-how to integrate the performance benefits of graphene nanoplatelets in an effective way in customer products. The Board has therefore decided to focus its resources and activities around meeting customer opportunities through the dispersion and end-use application of graphene as the best means of revenue growth.

As a result, the Board announced it has entered a period of consultation with its employees with a view to implementing a re-alignment of its operations towards dispersion and application know-how and customer support. The Company will focus its resources on growing revenues from its significant pipeline of approximately 100 active engagements, in particular from its more advanced customer engagements.  The Group will therefore largely maintain its resources in business development and retain its strength in the technical team to support customers running product trials and in longer range product and dispersion technology development, whilst streamlining manufacturing. The objective here is to maintain an appropriate level of graphene manufacturing capability whilst focusing on our core strength of dispersion and application technology.

 

The cash operating cost base of the Company of £4.3m in the year to 31 July 2019 is, subject to consultation, expected to fall by circa £0.9m and £1.1m for the years ending 31 July 2020 and 2021, respectively.  The cost of implementation of these changes is, subject to consultation, circa £0.2m. These actions will extend the Company's cash run-way to at least Q4 2021.

 

The Group is well funded, with net cash of £6.1m as at 31 July 2019 and it received an R&D tax credit of £0.6m in August 2019 in respect of the year ended 31 July 2018.

 

The Company's absolute priority and focus remains to support its partners in successfully incorporating graphene nanoplatelets, achieving product launches and growing revenues.

The Company has built an exceptional technology base and the re-alignment will by no means impact its technical capabilities, nor its ability to scale up production at the appropriate time to meet future demand. 

 

Outlook

 

The Board believes that AGM is well placed and is confident that, with the reduced cost base and existing cash resources, the Company will have sufficient time to significantly grow revenues in the emerging graphene market.

 

The technical progress we are making in our customer collaborations continues to be absolutely critical to our success, in light of the complexity of transferring graphene's exceptional enhancement properties into a final customer product, which has remained a challenge for the industry. AGM remains well positioned thanks to its solid platform of graphene application and integration IP in its focused customer sectors.

 

The Board is encouraged by momentum in our commercial pipeline. We are seeing positive traction with the launches of graphene-enhanced products by customers in all three of our operating sectors.

 

We look forward to the emerging graphene market developing further and to delivering on the technical promise with our products.

 

 

Adrian Potts                                                                        

Chief Executive Officer     

 

 16 October 2019

Financial review

 

Revenue

Revenue for the year was £50,000 (2018: £77,000) arising from the supply of production orders and evaluation quantities of graphene to commercial partners. Sales in the prior year included £46,000 to Airbus, but this fell to nil in this financial year due to delays in the project.

 

Other income

Other income, which comprises grant income and RDEC revenue, was £74,000 (2018: £126,000). Grants received generally relate to funding for the development of new graphene applications or the creation of new jobs.

 

Cost of sales

Cost of sales of £472,000 (2018: £250,000) reflects the costs of producing graphene dispersions. We recognise the cost of production in the income statement as it is incurred. Cost of sales includes staff costs of £230,000 (2018: £187,000). Once the Group receives more production orders, this graphene will be recognised as stock.

 

Operating expenses

Operating expenses of £4,554,000 remained in line with the prior year costs of £4,555,000. This reflects an increase in personnel costs of £230,000 and other R&D costs, offset by a saving in exceptional costs.

 

Loss on ordinary activities before interest, tax, exceptional costs, depreciation and amortisation (EBITDA)

EBITDA for the Group increased from a loss of £3,984,000 in 2018 to a loss of £4,559,000 for the year ended 31 July 2019. The loss incurred reflects the ongoing costs of working with commercial partners and the significant efforts undertaken to support those customers.

 

Exceptional costs

Exceptional costs recognised in the year were £nil (2018: £307,000). The prior year costs principally relate to costs that were associated to the fundraise that were not specifically in relation to the issue of new shares (£185,000) and the disposal of licence fees and patents costs relating to a technology no longer being developed following the introduction of the A-GNP35 production facility (£122,000).

 

Net finance income

Net finance income for the year was £67,000 (2018: £57,000). The Group has benefited from interest earned on money raised from the placing that took place in the prior year.

 

Loss on ordinary activities before tax

A loss on ordinary activities before tax of £4,835,000 (2018: loss of £4,545,000) was recognised. The prior year includes exceptional costs of £307,000 mainly connected to payments made in relation to the issue of new shares.

 

Tax

The Group has not recognised any tax assets in respect of trading losses arising in the current financial year or accumulated losses in previous financial years.  There remains sufficient uncertainty that taxable profits will be available against which deductible temporary differences can be utilised.

 

The tax credit recognised in the current financial year of £908,000 is in relation to a calculation of R&D tax credits due for 2019 of £700,000 and the balance between the claim for R&D tax credits for 2018 which was £623,000 and the estimate which was recognised in the prior year of £415,000. The credit recognised in the prior financial year was in relation to the receipt of R&D tax credits for 2017 and an estimate of R&D tax credits due for 2018.

 

Earnings per share

Basic earnings per share was a loss of 7.9 pence per share (2018: loss of 8.2 pence per share). Basic diluted earnings per share (before exceptional costs) was a loss of 7.9 pence per share (2018: loss of 7.5 pence per share). 

 

Dividend

No dividend has been proposed for the year ended 31 July 2019 (2018: £nil).

 

Cash flow

Net cash used in operations was £4,184,000 (2018: £4,005,000). During the year, net working capital utilised reduced by £72,000 (2018: increase of £12,000).

 

 

Balance sheet

Net assets have reduced to £8,488,000 (2018: £12,121,000), principally reflecting the trading loss for the year.

 

The Group is well funded with cash at bank at 31 July 2019 of £6,135,000 (2018: £10,443,000).  Cash at bank is on deposit with a small number of financial institutions for time periods ranging between instant access and up to 95 days in maturity. The R&D tax credit of £623,000 for the year ended 31 July 2018 was received in August 2019.

 

Post balance sheet event

As set out in the CEO's statement, the Company has recently entered into a period of consultation with staff regarding a realigning of the Company's activities and reduction in costs.  Whilst the full financial effect of these changes will not be achieved immediately due to the costs of implementation, the cash operating cost base of the Company of £4.3m in the year to 31 July 2019 is forecast to fall by circa £0.9m and £1.1m for the years ending 31 July 2020 and 2021 respectively.  Subject to consultation, there is expected to be a cash cost of circa £0.2m to implement the restructuring. 

 

Accounting policies

The Group's consolidated financial information has been prepared in accordance with International Financial Reporting Standards as adopted in the EU. The accounting policies used in the consolidated financial information are consistent with those set out in the audited financial statements

 

Going concern

After making enquiries and producing cash flow forecasts, the Directors have reasonable expectations, as at the date of approving the financial statements, that the Company and the Group will have adequate resources to fund the activities of the Company and the Group for at least twelve months from the date of the approval of the financial statements. Although the business continued to make losses throughout the year to July 2019, meaningful commercial progress has been made during the year with the development of strong technical data to underpin the product offering, the launch of new water based coating applications and the new products launched by customers. The increased level of commercial products and engagements provides the Directors with reasonable expectations that the Group continues to demonstrate meaningful progress.

 

At 31 July 2019, the Company and Group had cash reserves of £5.8m and £6.1m respectively. The Directors have prepared cashflow forecasts which show that the Group has sufficient cash on hand to satisfy the continued development of the business until at least 2021 in line with the strategic plan. Furthermore, the Directors have had regard to the consequence of further delays in generating revenue beyond the next twelve months and in this scenario the Directors remain confident that adequate resources are available for the foreseeable future.

As part of the review process, following the year end, the Directors announced the implementation of a restructuring of its operations in order to manage the Group's cash resources effectively. Further information relating to the restructuring of the business is included in the Business review, the Financial review and note 23 to the financial statements.

 

Principal risks and uncertainties

Risk management forms an integral part of the business planning and review cycle.

 

As a business we strive to achieve the right balance between risk and reward. The Board reviews and updates risks within the business on a regular basis. Having identified a potential risk each risk is assessed individually both in terms of likelihood of occurrence and for the potential financial impact on the business. A further assessment is then made to ensure that the exposure to any risk is mitigated wherever feasible.

 

The Directors believe the following risks to be the most significant for potential investors. However, the risks listed do not necessarily comprise all of those associated with an investment in the Group and are not set out in any particular order or priority. Additional risks and uncertainties not currently known to the Directors, or which the Directors currently deem not to be significant, may also have an adverse effect on the Group and the information set out below does not purport to be an exhaustive summary of the risks affecting the Group. In particular, the Group's performance may be affected by changes in market or economic conditions and in legal, regulatory and tax requirements.

 

Broadly, risks are categorised into seven types: strategic and planning; financial and IT; operational and quality; technical; safety, health and environment (SHE) and regulatory; commercial and reputation; and people. Significant risks facing the Group are listed below.

 

·      Consistency of product - as the business begins to supply graphene in ever larger quantities it is essential that the quality of the product is maintained. Working with nanomaterials is extremely technical and if products are not produced to a consistently high quality there is a risk that the products will not deliver the potential benefits and customers may look for alternative suppliers. When the business looks to gear up its manufacturing capabilities to meet demand, it is essential that even at higher volumes the quality of material is maintained. In addition to working under strict operating procedures the business has implemented a series of quality control measures to ensure there is no drop off in product quality. Operating and quality procedures are continually reviewed and where appropriate improved, in order to ensure the highest quality is maintained at all times.

·      Intellectual property - the Group's business is based on a combination of patents granted, patent applications and know-how. The Group's success will depend in part on its ability to maintain adequate protection of its intellectual property and know-how. There is no certainty that patent applications will be granted, such applications and know-how will be a source of competitive advantage to the Group, or that others have not developed similar or better applications or know-how. Significant costs may be incurred in asserting intellectual property rights and there is no certainty that intellectual property could not become known in a manner (for example, cyber-attack) which provided the Group with no recourse. The Group takes protection of its intellectual property very seriously, with information restricted on a need to know basis. Confidentiality clauses are used extensively throughout the business in a variety of forms, and key files and documents are maintained separately in a secure manner.

·      Financial, operational and management information systems - the efficient operation and management of the Group depends on the proper operation and performance of financial, operational and management information systems. Any failure in such systems via a cyber-attack may result in a loss of control and adversely impact the Group's ability to operate effectively. The business takes a multi-faceted approach to ensuring its systems are able to support the business. This ranges from a series of back-up procedures, training and physical and virtual defence mechanisms. Regular reviews are undertaken to assess what additional precautions if any are required.

·      Safety, health and environment - the Group's operations are subject to numerous safety, health and environmental and regulatory requirements, both in the UK and overseas, which are likely to become more complicated, stringent and onerous as the Group grows or as time passes. Failure to comply in any way with SHE or regulatory requirements could result in the Group being unable to manufacture or supply graphene, incurring significant costs and liabilities, or being subject to claims and lawsuits, which could adversely affect its operations and financial condition. Graphene is also a relatively new material with a limited number of studies having been undertaken into its effects on biological systems. If evidence emerges that graphene has a deleterious effect then this may adversely impact the Group's business and financial position. The Group undertakes regular training programmes to ensure best operating practices are maintained. This is assessed through an extensive audit programme along with health and safety meetings, which are held on a monthly basis. Employees who work with the product in its raw form operate under strict operating procedures with designated protective clothing at all times. In addition, they are required to undertake regular health checks.

·      Key personnel - the Group has in place an experienced and motivated senior management team and is beginning to build strength in depth. If the Group is unable to retain and attract suitably skilled and qualified people, then the Group's performance and prospects may be adversely impacted. The loss of one or more key personnel could have an adverse impact on the Group's operations, reputation, relationships and future prospects. In order to both attract and retain individuals with the necessary skills and motivation, the Group has a range of incentives and support processes in place. In addition to a comprehensive financial package of both short and long term incentives, individuals receive regular updates in an open and transparent manner, both on an individual and team basis. Training and development programmes are tailored to meet the needs and aspirations of the individual.

·      Acceptance of the Group's products - early stage of operations and acceptance of graphene. The Group is at an early stage of development and the success of the Group will depend on the acceptance and attribution of value to graphene produced by the business. Timescales to the successful development of applications for graphene are significantly determined by the product development cycle of customers. There can be no guarantee that either acceptance of graphene or attribution of value will be forthcoming. The business remains focused on its core markets and applications where it believes graphene can offer real benefits as a high-end additive. In addition to continuing to invest in and develop in-house expertise, the technical teams look to maintain close working relationships with customers, to provide technical support and thereby reduce the time to market.

·      Adequacy of financial resources- the available funding required to support the business through to profitability and cash generation may be insufficient.  Currently, it is expected that additional capital will be required in future to fund the business. The Group may be unable to access additional debt or equity capital, or to raise funds on acceptable terms. In the event that the resources available to the Group are inadequate then this could have a materially adverse impact on the implementation of the Group's strategy, its business, financial condition and operations.  In October 2019, the Group commenced a consultation process with its staff, with a view to extending the cash runway to at least Q4 2021.

 

Cautionary statement
The Business and Financial reviews have been prepared for the shareholders of the Company, as a body, and no other persons. Their purpose is to assist shareholders of the Company to assess the strategies adopted by the Group and the potential for those strategies to succeed and for no other purpose. The Business and Financial reviews, contain forward-looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forward-looking statements in the Business and Financial reviews will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation.

 

David Blain

Chief Financial Officer

16 October 2019

 

Consolidated income statement and statement of comprehensive income

for the year ended 31 July 2019

 

 

 

 

2019

 

2018

 

Note

£'000

£'000

Revenue

5

50

77

Other income

 

74

126

 

 

124

203

Cost of sales

 

(472)

(250)

Gross loss

 

(348)

(47)

Operating expenses

 

(4,554)

(4,555)

EBITDA

 

(4,559)

(3,984)

Exceptional costs

 

-

(307)

Depreciation of property, plant and equipment

 

(343)

(311)

Operating loss

 

(4,902)

(4,602)

Finance income

 

67

57

Loss before tax

 

(4,835)

(4,545)

Tax credit

3

908

1,046

Loss for the year attributable to equity shareholders

 

(3,927)

(3,499)

Other comprehensive income

 

-

-

Total comprehensive expense

 

(3,927)

(3,499)

Earnings per share (pence per share)

 

 

 

Basic

6

(7.9)

(8.2)

Diluted

6

(7.9)

(8.2)

EBITDA comprises loss before interest, tax, exceptional costs and depreciation.

 

 

Consolidated statement of changes in shareholders' equity

as at 31 July 2019

 

 

Called up

Share

 

 

 

 

share

premium

Merger

Accumulated

Total

 

capital

 account

reserve

losses

equity

 

£'000

£'000

£'000

£'000

£'000

As at 1 August 2017

446

18,641

1,231

(14,250)

6,068

Loss for the year and total comprehensive expense

-

-

-

(3,499)

(3,499)

IFRS 2 share based payments

-

-

-

177

177

Issue of shares (net)

543

8,832

-

-

9,375

As at 31 July 2018

989

27,473

1,231

(17,572)

12,121

Loss for the year and total comprehensive expense

-

-

-

(3,927)

(3,927)

IFRS 2 share based payments

-

-

-

294

294

Issue of shares (net)

-

-

-

-

-

As at 31 July 2019

989

27,473

1,231

(21,205)

8,488

 

 

Consolidated statement of financial position

as at 31 July 2019

 

 

 

Group

2019

Group

2018

 

Note

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

 

155

78

Property, plant and equipment

 

1,645

1,881

Investments

 

-

-

Trade & other receivables

 

-

-

 

 

1,800

1,959

Current assets

 

 

 

Inventories

 

52

56

Trade and other receivables

 

171

197

Corporation tax receivable

 

1,323

415

Cash

 

6,135

10,443

 

 

7,681

11,111

Total assets

 

9,481

13,070

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

(993)

(949)

Total liabilities

 

(993)

(949)

Net current assets

 

6,688

10,162

Net assets

 

8,488

12,121

Equity

 

 

 

Called up share capital

8

989

989

Share premium account

 

27,473

27,473

Merger reserve

 

1,231

1,231

Retained earnings

 

(21,205)

(17,572)

Total equity

 

8,488

12,121

 

 

 

Consolidated cash flow statement

for the year ended 31 July 2019

 

 

Group

2019

Group

2018

 

Note

£'000

£'000

Operating activities

 

 

 

Net cash used in operations

7

(4,184)

(4,005)

Corporation tax received

 

-

631

Finance income

 

69

53

Net cash used in operating activities

 

(4,115)

(3,321)

Investing activities

 

 

 

Purchase of intangible assets

 

(77)

(62)

Purchase of property, plant and equipment

 

(116)

(257)

Net cash used in investing activities

 

(193)

(319)

Financing activities

 

 

 

 

 

 

 

Net proceeds from issue of Ordinary shares

 

-

9,375

Net cash (used in)/generated from financing activities

 

-

9,375

Net (decrease)/increase in net cash and cash deposits

 

(4,308)

5,735

Net cash and cash deposits at 31 July 2018

 

10,443

4,708

Net cash and cash deposits at 31 July 2019

 

6,135

10,443

 

 

 

 

Net cash and cash deposits include:

 

 

 

Cash (maturity less than 95 days)

 

6,135

10,443

Net cash and cash deposits at 31 July 2019

 

6,135

10,443

 

 

 

Notes to the annual financial results

for the year ended 31 July 2019

 

1 General information

The principal activity of Applied Graphene Materials plc is the manufacture, dispersion and development of applications for graphene. The Group operates principally in the United Kingdom.

 

The Company is limited by shares, incorporated and domiciled in the United Kingdom and its registered number is 08708426. The address of the registered office is The Wilton Centre, Redcar, Cleveland, TS10 4RF. The Company was incorporated on 27 September 2013.

 

The consolidated financial information was approved for issue on 15 October 2019.

 

2 Basis of accounting

The consolidated financial information for the year ended 31 July 2019 has been presented under the historical cost accounting convention, as modified by financial assets and liabilities at fair value through the income statement and share based payments at fair value, and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRS IC interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial information has been prepared on a going concern basis.

 

The consolidated financial information included in this announcement has been extracted from the audited financial statements of the Group for the year ended 31 July 2019. The content of this announcement has been agreed with the Company's auditors. This announcement of financial results does not constitute the Group's financial statements. The Group's 2019 Annual report and financial statements, on which the Company's auditors, RSM UK Audit LLP, have given an unqualified opinion in accordance with the Companies Act 2006, are to be delivered to the Registrar of Companies following the Company's Annual General Meeting.

 

The accounting policies used in the consolidated financial information are consistent with those set out in the audited financial statements. If any new IFRS standards or interpretations are issued then these may impact on the financial statements of the Group in future years. The Group will continue to review its accounting policies in the light of emerging industry consensus on the practical application of IFRS.

 

The preparation of consolidated financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amounts, events or actions, actual events ultimately may differ from those estimates.

 

The consolidated financial information does not include all financial risk management information and disclosures required in the annual financial statements.

 

3 Taxation

The Group has not recognised any tax assets in respect of trading losses arising in either the current financial year or accumulated losses in previous financial years. The tax credits recognised arise from the actual and anticipated receipt of R&D tax credits.

 

4 Dividends

No dividend has been proposed for the year ended 31 July 2019 (2018: £nil).

 

5 Segmental analysis

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance. The Group's Chief Executive Officer has been identified as the CODM. The Group has one operating segment: the manufacture, dispersion and development of applications for graphene. Revenue and profits arising from that operating segment are the same as presented on the face of the consolidated income statement and statement of comprehensive income.

The Group currently has one operating segment, as reported revenue for the year is not considered to be of sufficient magnitude to warrant identifying different operating segments. As the business evolves this is an area that will be assessed on a regular basis and additional segmental reporting will be provided at the appropriate time.

There were two material customers who generated revenue of £9,000 and £5,000 (2018: £46,000 and £4,000).

 

 

The Group's revenue per geographic segment based on the customer's location is as follows:

 

 

2019

2018

 

£'000

£'000

UK

12

54

Europe

18

12

Rest of World

20

11

 

50

77

 

6 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to Ordinary shareholders by the weighted average number of shares in issue during each year. The weighted average number of shares in issue during the year used in the calculation of basic earnings per share was as follows:

 

2019

2018

 

million

million

Weighted average number of shares for basic earnings per share

49.4

42.7

 

Diluted earnings per share is the basic earnings per share adjusted for the effect of the conversion into fully paid shares of the weighted average number of share options outstanding during the year.

Adjusted earnings per share has been calculated so as to exclude the effect of exceptional costs including related tax charges and credits. Adjusted earnings used in the calculation of basic and diluted earnings per share reconciles to basic earnings as follows:

 

2019

2018

 

£'000

£'000

Basic earnings

(3,927)

(3,499)

Exceptional costs

-

307

Adjusted earnings

(3,927)

(3,192)

Earnings per share (pence per share)

 

 

Basic

(7.9)

(8.2)

Diluted

(7.9)

(8.2)

Adjusted earnings per share (pence per share)

 

 

Basic

(7.9)

(7.5)

Diluted

(7.9)

(7.5)

 

The Group was loss making for the years ended 31 July 2018 and 31 July 2019, therefore, the dilutive effect of share options has not been taken account of in the calculation of diluted earnings per share or adjusted diluted earnings per share, since this would decrease the loss per share for each of the years reported.

 

 

7 Notes to the cash flow statement

 

Group

2019

Group

2018

 

£'000

£'000

Continuing operations

 

 

Loss for the year attributable to equity shareholders

(3,927)

(3,499)

Tax credit

(908)

(1,046)

Finance income

(67)

(57)

Depreciation of property, plant and equipment

343

311

Exceptional costs

-

307

EBITDA

(4,559)

(3,984)

Depreciation of property, plant and equipment

(343)

(311)

Exceptional costs

-

(307)

Operating loss

(4,902)

(4,602)

Depreciation of property, plant and equipment

343

311

Disposal of property, plant and equipment

9

-

Disposal of intangible assets

-

121

IFRS 2 share based payments

294

177

Impairment of intercompany loan

-

-

Increase/(decrease) in inventories

4

(10)

(Increase)/decrease in receivables

24

(96)

Increase/(decrease) in payables

44

94

Net cash used in operations

(4,184)

(4,005)

 

8 Share capital

 

Number of

Total

 

Ordinary shares

£'000

Allotted, called up and fully paid

 

 

At 1 August 2018 - Ordinary shares of 2 pence each

49,429,380

989

Issue of shares

-

-

At 31 July 2019 - Ordinary shares of 2 pence each

49,429,380

989

 

 

9 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

 

Transactions with shareholders

The following purchases with shareholders and companies controlled by former Directors of the Group were recorded, excluding VAT, during the year:

 

2019

2018

 

£'000

£'000

Durham University (shareholder)

 

 

Staff secondment, consultancy and other fees

33

(4)

Top Technology Limited (controlled by shareholder)

 

 

Non-Executive Director fees

15

15

IP2IPO (shareholder)

 

 

Non-Executive Director expenses

1

1

 

 

 

 

The following balances were owed by the Group at the end of the year in respect of the transactions set out above:

 

2019

2018

 

£'000

£'000

Durham University

10

10

Top Technology Limited

5

5

 

Remuneration of key management personnel

The remuneration of the Directors and the key management personnel of the Group is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures:

 

2019

2018

 

£'000

£'000

Short term employee benefits (excluding bonuses)

746

705

Bonuses

181

100

National insurance contributions

103

82

Pension contributions

47

48

Payments to third parties

15

15

IFRS 2 share based payments

167

84

 

1,259

1,034

 

Remuneration of key management includes remuneration paid by subsidiary undertakings in the current and prior financial years.

 

At 31 July 2019, £1,000 was owed to Adrian Potts in respect of business expenses incurred.

 

10 Seasonality

The Group experiences no material variations in performance arising due to seasonality.

 

11 Availability of Annual Report

It is anticipated that the Annual Report will be sent to all shareholders on 11 November 2019. Electronic copies of the report and this announcement will also be available on Applied Graphene Materials' website at www.appliedgraphenematerials.com.

 

12 Annual General Meeting

The 2019 Annual General Meeting is to be held at The Farndale Room, The Wilton Centre, Redcar, Cleveland, TS10 4RF on 17 December 2019 at 11.00am.

 

13 Post balance sheet events

As set out in the CEO's statement, the Company has recently entered into a period of consultation with staff regarding a realigning of the Company's activities and reduction in costs.  Whilst the full financial effect of these changes will not be achieved immediately due to the costs of implementation, the cash operating cost base of the Company of £4.3m in the year to 31 July 2019 is forecast to fall by circa £0.9m and £1.1m for the years ending 31 July 2020 and 2021 respectively. Subject to consultation, there is expected to be a cash cost of circa £0.2m to implement the restructuring.

 


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 [email protected] or visit www.rns.com.
 
END
 
 
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