07:00 Fri 04 Sep 2020
CyanConnode Holdings - Final Results
("CyanConnode" or "the Company")
Final Results for the Fifteen-Month Period Ended 31 March 2020
Financial and Operational Highlights
· Revenue of
· Orders received during the period totalled
o
o
o
o Follow-on orders from
·
· Launch of new Omnimesh Cellular products including Dual SIM Cellular Network Interface Card and In Meter Gateway for improved security and increased capacity
·
· Change of External Auditor to
· Change of financial year end to 31 March
Post Year End Highlights
· Resumption of previously delayed INR 1 billion Indian contract. Inspection, dispatch and cash received for first 20,000 units. Cash received for a further 20,000 units and Letter of Credit secured for remaining deliveries
· Commencement of rollout of recently announced projects in
· Continued rollout of
· A further 5,000 modules delivered to Larsen & Toubro for legacy projects
·
"In 2019 we were disappointed not to achieve the Board's expectations as a result of a delayed contract for the Indian Utility,
"CyanConnode has adapted to working under COVID-19 conditions and continues to remain on track with its current development plans. Nevertheless, the Company has encountered challenging circumstances in the markets in which it operates, which are reflected in these historical figures.
"During 2020, as existing contracts started to roll out, the Company began to utilise Letters of Credit to meet its working capital requirements, thereby mitigating the need to raise further funding. The Company is focused on delivering significant volumes of its products to customers and we are pleased to report that we are at an advanced stage of agreeing a significant contract for a large number of units.
"I would like to thank all employees for their hard work and commitment during this period, and all shareholders for their continued support."
- Ends -
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Enquiries:
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Tel: +44 (0) 1223 225 060 |
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Arden Partners plc (Nomad and Broker) |
Tel: +44 (0) 20 7614 5900
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Yellow Jersey PR (Financial PR) |
Tel: +44 (0) 20 3004 9512 |
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Chairman's Statement
Operational Review
15 months to
In
In
In
Further follow-on orders were received during the financial year, including orders for the projects previously deployed at
In
In
In
Additionally, a follow-on order from Toshiba worth approximately
During 2019, the
Under its SMIP contract, CyanConnode calculates that 2.3 million Toshiba RF Hubs will eventually connect to the DCC secure network, and it is now beginning to see a small amount of revenue from those connections. However, as CyanConnode's SMIP contract is still at a relatively early stage, it is still not possible for the Company to confirm whether its revenue forecasts from the SMIP contract are accurate.
APAC and
The smart metering market in the APAC and
In
In
In
During 2019 and into 2020, CyanConnode launched several exciting Omnimesh products. Omnimesh is an open standards platform which is currently being applied to the future-proofing of Advanced Metering Infrastructure (AMI) communications for Utilities. Omnimesh has offered market-leading RF Mesh Networks since its launch in
Omnimesh Long-Range RF Network Interface Card
The Omnimesh Long-Range RF Network Interface Card (LR-RFNIC) has a range of up to 12km and is designed to provide point-to-point communication in sparsely populated areas, providing resilient, cost-effective, RF Mesh Network coverage beyond the mainly urban rollouts deployed to date. The LR-RFNIC integrates into standard smart meters and enables long-range communication to be deployed alongside standard RF Mesh Networks built using the Omnimesh RF Network Interface Card (RFNIC).
Omnimesh Metering of District Heating
Omnimesh Smart Metering of District Heating has been designed to meter thermal energy consumption. District Heating is an environmentally friendly method of heating homes, schools and commercial premises from a central plant, which pumps heat to individual premises.
Omnimesh Dual SIM Cellular Network Interface Card
The new Omnimesh Dual SIM Cellular Network Interface Card (CNIC) delivers point-to-point Cellular connectivity and automatically selects the best available Cellular network. The CNIC integrates into standard smart meters, and enables Utilities to optimise their AMI programmes by choosing the right mix of RF Mesh and Cellular connectivity for their deployment environments and AMI requirements. A single Omnimesh Head End Server (HES) can simultaneously manage both CNIC and RF Mesh enabled smart meters. This cost-effective approach enables Utilities to collect meter data and control meters seamlessly through the integration of a single Omnimesh HES into a Meter Data Management System (MDMS).
Omnimesh Integrated Gateway with Cellular and RF Mesh Capability
The new Omnimesh Integrated Gateway (IGW) supports both Cellular and RF Mesh connectivity and acts as a gateway to the Omnimesh HES for a local population of smart meters. The IGW integrates into standard smart meters, which offers several advantages including: strengthened tamper-proofing, ease of integration, increased deployment efficiency, reduced total cost of ownership, and improved network coverage and resilience.
The new Omnimesh Cellular products deliver secure end-to-end communication across both public and private carrier networks. To meet a range of market requirements, the products are available in all cellular regions and bands, and support all the 2G, 3G, 4G, and emerging 5G standards, including NB-IoT and Cat-M1 IoT Cellular technologies.
Board Changes
Change of Auditor and Year End
The Company announced in
COVID-19 Update
In our interim results statement issued on
Outlook
In early 2020, the Indian Government stated a target of replacing 250 million conventional electricity meters with pre-paid smart meters within three years. Finance Minister
Since the end of the period, the Group has seen good progress on contracts and opportunities in the Indian market despite the COVID-19 lockdown. In
Key focus will be on the delivery of these projects along with the projects in
Finally, I would like to thank all employees for their hard work and commitment during this difficult time.
Executive Chairman
FINANCIAL REVIEW
The fifteen months to
A summary of the key financial results for the fifteen-month period, and details relating to its financing position at period end are set out in the table below and discussed in this section.
|
|
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
Revenue |
2,451 |
4,465 |
1,171 |
1,823 |
R&D expenditure (including staff costs) |
2,381 |
2,466 |
4,148 |
2,913 |
Operating loss |
(6,230) |
(6,320) |
(11,153) |
(7,939) |
Depreciation and amortisation |
773 |
472 |
489 |
256 |
LBITDA |
(5,457) |
(5,848) |
(10,664) |
(7,683) |
Stock impairment |
4 |
578 |
55 |
96 |
Share-based compensation |
267 |
445 |
689 |
2 |
Acquisition - related costs |
- |
- |
- |
1,564 |
Foreign exchange losses |
267 |
16 |
52 |
48 |
Adjusted LBITDA[1] |
(4,919) |
(4,809) |
(9,868) |
(5,973) |
Cash and cash equivalents |
1,172 |
4,564 |
5,394 |
3,893 |
Average monthly operating cash outflow |
(245) |
(487) |
(808) |
(588) |
|
FTE[2] |
FTE |
FTE |
FTE |
Average employee headcount |
50 |
52 |
44 |
31 |
Year-end headcount |
48 |
61 |
52 |
31 |
Included within the table above are two alternative performance measures ("APMs"): LBITDA and adjusted LBITDA. These are additional measures which are not required under IFRS. These measures are consistent with those used internally and are considered important to understanding the financial performance and the financial health of the Group.
LBITDA (Loss before Interest, Tax, Depreciation and Amortisation) is a measure of cash generated by operations before changes in working capital. Adjusted LBITDA is a measure of cash generated by operations before changes in working capital and after other items have been adjusted for as set out in the table above. It is used to achieve consistency and comparability between reporting periods.
Notably from the table on the previous page:
• Revenue for the 15 months to
• Operating loss for the 15 months to
• Cash at the end of
• Depreciation increased due to the implementation of IFRS16
• Share-based compensation charges reflect the fair value of share options granted to employees over the vesting period of these options.
Financial items of note during the period other than those set out above were:
· No cash has been raised from shareholders since
· Cash received from customers during the fifteen-month period was
· Trade and other receivables reduced by
· R&D tax credit at a similar level to 2018 (
· The implementation of IFRS 16 - Leases
· Change of auditor from
· Change of financial year end from 31 December to 31 March
During the period an advance against the R&D tax credit was received. This will be repaid out of the R&D tax credit funds when received from HMRC. In addition, letters of credit, invoice discounting and advance payments have been negotiated on recently won contracts to help with working capital requirements.
Key Performance Indicators (KPIs)
The financial key performance indicators for the Group are as set out in the key financial results table above. FY2020 revenues were 45% down on 2018 comparatives as a result of delays to contracts due to the Indian elections. Operating costs for the fifteen-month period reduced by 16% against twelve months for 2018, LBITDA by 7%, while adjusted LBITDA increased by 2% due to lower share-based compensation charges and stock provisions. The Group's average headcount reduced by 2.
The Group's long-term strategy is to deliver shareholder returns by generating revenue and moving into profitability. We seek to do this by focusing our investment on emerging but fast-growing markets where we believe we can reach a market leading position with our technology. Management use KPIs to track business performance, to understand general trends and to consider whether we are meeting our strategic objectives. As we grow, we intend to review these KPIs and adapt them as appropriate, in response to how our business and strategy evolves.
The Group's key focus for the financial year ending
Going concern
To assess the ability of
At
In addition, during 2020 the COVID-19 pandemic has affected the global economy and businesses around the world, particularly during the lockdowns in each country. At the time of writing this report, the effects continue to be seen.
To assist with working capital, the Group received an advance of
Notwithstanding the material uncertainties described above, on the basis of sensitivities applied to the cash flow forecast, the directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report.
Dividends
The directors do not recommend the payment of a dividend (2018: £nil). The Group has no plans to adopt a dividend policy in the immediate future and all funds generated by the Group will be invested in the further development of the business, as is normal for its industry sector and stage of its development.
Chief Financial Officer
CyanConnode Holdings plc
Consolidated income statement
For the 15-month period ended
|
Note |
|
15 months31 Mar 2020 |
|
Year |
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|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
2,451 |
|
4,465 |
|
|
|
|
|
|
Cost of sales |
|
|
(1,081) |
|
(1,724) |
|
|
|
|
|
|
Gross profit |
|
|
1,370 |
|
2,741 |
|
|
|
|
|
|
Other operating costs |
|
|
(6,827) |
|
(8,589) |
Amortisation and depreciation |
|
|
(773) |
|
(472) |
|
|
|
|
|
|
Total operating costs |
|
|
(7,600) |
|
(9,061) |
|
|
|
|
|
|
Operating loss |
|
|
(6,230) |
|
(6,320) |
|
|
|
|
|
|
Investment income |
|
|
17 |
|
13 |
Finance costs |
|
|
(30) |
|
(2) |
|
|
|
|
|
|
Loss before tax |
|
|
(6,243) |
|
(6,309) |
|
|
|
|
|
|
Tax |
|
|
576 |
|
927 |
|
|
|
|
|
|
Loss for the year |
|
|
(5,667) |
|
(5,382) |
|
|
|
|
|
|
Loss per share (pence) |
|
|
|
|
|
Basic |
2 |
|
(3.27) |
|
(4.60) |
Diluted |
2 |
|
(3.27) |
|
(4.60) |
CyanConnode Holdings plc
Consolidated Statement of Comprehensive Income
For the fifteen-month period ended 31 March 2020
Derived from continuing operations and attributable to the equity owners of the Company.
|
15 months 31 Mar 2020 |
|
Year 31 Dec 2018 |
|
£'000 |
|
£'000 |
Loss for the period
|
(5,667) |
|
(5,382) |
Exchange differences on translation of foreign operations |
56 |
|
54 |
|
|
|
|
Total comprehensive income for the year |
(5,611) |
|
(5,328) |
|
|
|
|
|
|
|
|
|
|
CyanConnode Holdings plc
Consolidated statement of financial position
As at
|
Note |
|
31 Mar2020£'000 |
|
31 Dec 2018 £'000 |
Non-current assets |
|
|
|
|
|
Intangible assets |
|
|
4,558 |
|
5,048 |
|
|
|
1,930 |
|
1,930 |
Investments |
|
|
93 |
|
44 |
Property, plant and equipment |
|
|
43 |
|
73 |
Right of use asset |
|
|
274 |
|
- |
|
|
|
6,898 |
|
7,095 |
Current assets |
|
|
|
|
|
Inventories |
|
|
308 |
|
319 |
Trade and other receivables |
|
|
3,676 |
|
4,827 |
Cash and cash equivalents |
|
|
1,172 |
|
4,564 |
|
|
|
5,156 |
|
9,710 |
Total assets
|
|
|
12,054 |
|
16,805 |
Current liabilities |
|
|
|
|
|
Trade and other payables |
|
|
(1,491) |
|
(1,994) |
Short-term borrowings |
|
|
(560) |
|
- |
Lease liabilities |
|
|
(121) |
|
- |
Total current liabilities |
|
|
(2,172) |
|
(1,994) |
Net current assets |
|
|
2,984 |
|
7,716 |
Non-current liabilities |
|
|
|
|
|
Lease liability |
|
|
(153) |
|
- |
Deferred tax liability |
|
|
(912) |
|
(690) |
|
|
|
|
|
|
Total non-current liabilities |
|
|
(1,065) |
|
(690) |
|
|
|
|
|
|
Total liabilities |
|
|
(3,237) |
|
(2,684) |
|
|
|
|
|
|
Net assets
|
|
|
8,817 |
|
14,121 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
3 |
|
3,656 |
|
3,648 |
Share premium account |
|
|
69,547 |
|
69,515 |
Own shares held |
|
|
(3,253) |
|
(3,253) |
Share option reserve |
|
|
2,028 |
|
1,761 |
Translation reserve |
|
|
(20) |
|
(76) |
Retained losses |
|
|
(63,141) |
|
(57,474) |
Total equity being equity attributable to owners of the Company |
|
|
8,817 |
|
14,121 |
|
|
|
|
|
|
CyanConnode Holdings plc
Consolidated Statement of Changes in Equity
For the 15-month period ended
|
|
Share Capital |
Share Premium |
Own shares held |
Share Option Reserve |
Translation Reserve |
Retained Losses |
Total Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at |
2,559 |
65,565 |
(3,253) |
1,316 |
(130) |
(52,092) |
13,965 |
|
Loss for the year |
- |
- |
- |
- |
- |
(5,382) |
(5,382) |
|
Other comprehensive income for the year |
- |
- |
- |
- |
54 |
- |
54 |
|
Total comprehensive income for the year |
- |
- |
- |
- |
54 |
(5,382) |
(5,328) |
|
Issue of share capital |
1,089 |
3,950 |
- |
- |
- |
- |
5,039 |
|
Credit to equity for share options |
- |
- |
- |
445 |
- |
- |
445 |
|
Total transactions with owners |
1,089 |
3,950 |
- |
445 |
- |
- |
5,484 |
|
Balance at |
3,648 |
69,515 |
(3,253) |
1,761 |
(76) |
(57,474) |
14,121 |
|
Loss for the period |
- |
- |
- |
- |
- |
(5,667) |
(5,667) |
|
Other comprehensive income for the period |
- |
- |
- |
- |
56 |
- |
56 |
|
Total comprehensive income for the period |
- |
- |
- |
- |
56 |
(5,667) |
(5,611) |
|
Issue of share capital |
8 |
32 |
- |
- |
- |
- |
40 |
|
Credit to equity for share options |
- |
- |
- |
267 |
- |
- |
267 |
|
Total transactions with owners |
8 |
32 |
- |
267 |
- |
- |
307 |
|
Balance at |
3,656 |
69,547 |
(3,253) |
2,028 |
(20) |
(63,141) |
8,817 |
CyanConnode Holdings plc
Consolidated cash flow statement
For the 15-month period ended
|
Notes |
15 months 31 Mar 2020 |
|
Year 31 Dec 2018 |
|
|
£'000 |
|
£'000 |
Net cash outflow from operating activities |
4 |
(3,677) |
|
(5,843) |
|
|
|
|
|
Investing activities |
|
|
|
|
Interest received |
|
17 |
|
13 |
Purchases of property, plant and equipment |
|
(20) |
|
(41) |
Capitalisation of research and development costs |
|
(36) |
|
- |
(Purchase) / disposal of investments |
|
(49) |
|
4 |
Net cash used in investing activities
|
|
(88) |
|
(24) |
|
|
|
|
|
Financing activities |
|
|
|
|
Interest paid |
|
(4) |
|
(2) |
Cash inflow from borrowing |
|
560 |
|
- |
Capital repayments of lease liabilities |
|
(197) |
|
- |
Interest paid on lease liabilities |
|
(26) |
|
- |
Proceeds on issue of shares |
|
40 |
|
5,467 |
Share issue costs |
|
- |
|
(428) |
Net cash from financing activities |
|
373 |
|
5,037 |
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(3,392) |
|
(830) |
Cash and cash equivalents at beginning of period |
|
4,564 |
|
5,394 |
Cash and cash equivalents at end of period
|
|
1,172
|
|
4,564
|
Notes to the Financial Statements
For the fifteen-month period ended 31 March 2020
1. General information
The final results announcement is based on the financial statements which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the
The financial information set out in the announcement does not constitute the company's statutory accounts for the periods ended
Going concern
To assess the ability of
At
In addition, during 2020 the COVID-19 pandemic has affected the global economy and businesses around the world, particularly during the lockdowns in each country. At the time of writing this report, the effects continue to be seen.
To assist with working capital, the Group received an advance of
Notwithstanding the material uncertainties described above, on the basis of sensitivities applied to the cash flow forecast, the directors have a reasonable expectation that the company can continue to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of this report.
The 2020 statutory financial statements were approved by the Board of Directors on
2. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
|
2020 |
|
2018 |
|
|
|
£'000 |
|
£'000 |
|
|
Loss for the purposes of basic loss per share being net loss attributable to equity holders of the parent |
|
|
|
|
|
|
(5,667) |
|
(5,382) |
||
Number of shares
|
|
2020 |
|
2018 |
|
|
No. |
|
No. |
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share (including own shares held) |
173,047,934 |
|
116,975,780 |
The weighted average number of shares and the loss for the year for the purposes of calculating diluted loss per share are the same as for the basic loss per share calculation. This is because the outstanding share options would have the effect of reducing the loss per share and would not, therefore, be dilutive under the terms of IAS 33.
3. Share capital
|
|
2020 |
|
2018 |
|
|
£'000 |
|
£'000 |
Issued and fully paid: |
|
|
|
|
182,798,523 ordinary shares of 2.0 pence each (2018: 182,398,523 ordinary shares of 2.0 pence each) |
|
3,656 |
|
3,648 |
4. Reconciliation of operating loss to net cash outflow from operating activities
|
|
|
2020 |
2018 |
|
|
£'000 |
£'000 |
|
|
Operating loss for the period |
|
(6,230) |
(6,320) |
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
Depreciation of property, plant and equipment |
|
247 |
51 |
|
Amortisation of intangible assets |
|
526 |
421 |
|
Foreign exchange |
|
59 |
55 |
|
Share-based payment expense |
|
267 |
445 |
|
|
|
|
|
Operating cash flows before movements in working capital |
|
(5,131) |
(5,348) |
|
|
|
|
|
|
|
Decrease in inventories |
|
11 |
809 |
|
Decrease / (increase) in receivables |
|
1,124 |
(2,377) |
|
Decrease in payables
|
|
(503) |
(253) |
Cash reduction from operating activities |
|
(4,499) |
(7,169) |
|
|
|
|
|
|
|
Income taxes received |
|
822 |
1,326 |
|
|
|
|
|
Net cash outflow from operating activities |
|
(3,677) |
(5,843) |
|
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with maturity of three months or less.
5. Annual Report and Accounts and Notice of Annual General Meeting
The Notice of AGM and Proxy Form will be sent to shareholders on 4 September 2020 and made available on the Company's website shortly thereafter. The full colour Annual Report and accounts will be sent to shareholders by 8 September 2020 and made available on the Company's website shortly thereafter. The AGM will be held on 30 September 2020 at 4.00 p.m. at the Company's Registered office at
[1] Where Adjusted LBITDA is LBITDA after stock impairment, share-based compensation, acquisition-related costs and foreign exchange losses
[2] Where FTE is the number of full-time equivalents
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