EQTEC PLC (AIM:EQT) said it is looking for strategic investors of scale to back its transition from a project developer to a pure waste-to-value technology provider.
It made the comments alongside results for the first half of 2023, which showed the financial effects of this shift, with revenue of €0.145 million and an underlying loss on an EBITDA basis of €1.92 million compared to €2.98 million and €1.97 million respectively the year before.
There was just over €1 million of cash in the back at the end of June after a capital raising of €4.05 million (£3.5 million) in March, while borrowings were reduced to €2.6 million after existing lenders agreed to convert some debt into shares.
The company said it is “accelerating its transition toward its target business model of technology licensor and innovator” by recovering or releasing legacy projects, and qualifying and pursuing new opportunities in target markets, along with continuing trials for client projects and driving operational and organisational changes to cut costs.
But after the recent decline in the company’s market value, the board is conducting a review of available options for required investment.
Chairman Ian Pearson said: “To add momentum behind execution of its strategy, the company requires the sort of funding that only one or more strategic investors can bring. It is imperative that we respond to the AIM market's valuation of the company by finding investors of scale that understand and believe in EQTEC's direction and full potential."
Chief executive David Palumbo added that 2023 is the pivotal year in the company's transition and “now we can begin to see its impact: an increasing number of pre-funded projects held by larger, better funded clients and co-delivered with a more reliable cadre of partners”.
But at the same time, even after avoiding €18 million in costs last year, he said “hard choices” were still having to be made on whether to continue on legacy projects or leave them behind.
“Either way, the impact of managing through the legacy work is painful in financial terms, as our revenue and profit figures indicate.
“But it is also temporary,” he said, with engineering work currently being undertaken on the renewed portfolio expected to gradually convert to equipment sales and paid fees for engineering, licensing and maintenance support.
Likely cash requirements of the company show it will require additional external debt or equity funding going into the second half of 2024.