Advanced engineering materials specialist Versarien Plc (LON:VRS) is moving away from relying on its hardware division towards commercialising what it calls "disruptive" technologies, including graphene, it told investors in full year results.
Its tungsten carbide business took a hit from the downturn in the oil and gas sector, reporting sales for the year to end March of £3.1mln compared to £4.6mln in 2015, but it said all three of its divisions, hardware, thermal and graphene, had made progress.
"We have signed four MOUs to form partnerships with organisations that will allow us to accelerate the adoption of graphene into markets where this material is expected to be a game-changer: 3D printing, batteries, carbon fibre composites and aerospace.
"Each of these partnerships brings specialist scientific, manufacturing or target sector knowledge and will help us to penetrate these markets quicker whilst sharing development costs and knowledge," it told investors.
In thermal products, it has won its first original equipment manufacturer (OEM) contract for low profile copper foam heat sinks in consumer devices. Sales in this division came in at £1.3mln, a hefty increase from the £0.4mln seen in 2015.
The business also has a pipeline of enquiries of £1.4 million, the firm said.
Overall, the group loss before tax was £1.8mln compared to a loss of £0.9mln in 2015, on revenues of £4.4mln versus £4.98mln in 2015. Cash as at the end of March is £1.6mln against £3.5mln in 2015.
Only last month, the firm revealed it had teamed up with Airbus supplier CT Engineering to develop a new range of aerospace components using the ‘wonder’ substance graphene.
CT specialises in carbon fibre technology and will use Versarien’s expertise in graphene to formulate a new range.
Looking ahead, Versarien added: "The graphene business is experiencing renewed energy after a year of considerable preparation and planning.
"As anticipated, the depressed oil and gas market continues to affect the tungsten carbide business, but green shoots are emerging with new opportunities.
"In order to mitigate this period of transition between new and traditional technology, we continue to closely monitor all costs."
House broker WH IRELAND said the full year group revenue, underlying loss before tax and net cash position were all in line with the broker's expectations.
"Fundamentally, we believe that Versarien is extremely well positioned to capitalise on its highly disruptive technologies over the coming years through a management team with a proven track record. We maintain both our Buy stance and 25p share price target."
Analyst John Cummins added: "On the back of these results, we have reduced our two year revenue forecasts, principally driven by demand in the Oil & Gas markets.
"However, as a result of both advances being made at 2Dimensional Products and cost savings being achieved across the group, we leave our FY 2017E pre-tax loss expectation unchanged, whilst raising our FY 2018E PBT forecast from £0.5m to £0.6m.
"We expect Versarien to then grow rapidly as its products achieve wider adoption, assisted by recent distribution deals, increased scale and an enhanced product portfolio."
Sharese eased 6.38% to stand at 11p each.