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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Accsys Technologies Plc | LSE:AXS | London | Ordinary Share | GB00BQQFX454 | ORD EUR0.05 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.30 | -0.53% | 56.20 | 56.00 | 56.40 | 56.00 | 56.00 | 56.00 | 100,525 | 16:35:06 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Manufacturing Industries,nec | 162.02M | -69.86M | -0.3173 | -1.76 | 123.29M |
From Apr 2019 to Apr 2024
TIDMAXS
RNS Number : 1657X
Accsys Technologies PLC
22 November 2017
AIM: AXS
Euronext Amsterdam: AXS
22 November 2017
ACCSYS TECHNOLOGIES PLC ("Accsys" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER 2017
Accsys, the chemical technology group, focused on the acetylation of wood, today announces interim results for the consolidated group for the six months ended 30 September 2017.
Hot Features
Premium
6 months ended 30 6 months ended 30
Sept 2017 Sept 2016
Underlying* Statutory Underlying* Statutory
Total Revenue EUR28.3m EUR28.3m EUR25.1m EUR25.1m
EBITDA EUR(2.8m) EUR(4.9m) EUR(1.6m) EUR(1.3m)
Loss before taxation EUR(5.2m) EUR(6.8m) EUR(3.2m) EUR(2.9m)
Period end cash
balance EUR46.9m EUR7.9m
Net Debt EUR23.1m EUR5.7m
*Excludes exceptional costs and other adjustments. See note 4 for details and note 2 for reconciliation
Financial highlights
-- Accoya revenue growth of 16% reflects continued growth in demand worldwide; -- Sales volumes up 13% with Accoya plant running at full capacity;
-- Lower underlying EBITDA reflects one-off matters, during significant expansion of manufacturing capacity;
-- Net cash balance of EUR23.1m at 30 September 2017 reflects funds raised from shareholders and industry partners to fund expansion of manufacturing of both Accoya and Tricoya.
Operational highlights
-- Expansion of Arnhem Accoya plant progressing; 50% (20,000 cubic metres) of additional capacity operational from early in next financial year as expected;
-- With Arnhem plant currently operating at full capacity, we are working with customers to manage demand in the short term;
-- Accoya customer price increase in second half of the year reflecting demand and higher raw material costs;
-- Construction successfully underway of new Tricoya plant in Hull; -- Sales of Tricoya panels by Medite up by 24% compared to same period last year.
Paul Clegg, Chief Executive commented: "We continue to see good global demand for both Accoya and Tricoya in an important year for Accsys. We are making transformational changes to our manufacturing capacity to meet this demand, having secured significant support from shareholders and our industrial and financial partners."
There will be a presentation relating to these results at 10:00 GMT on 22 November 2017. The presentation will take the form of a web-based conference call, details of which are below:
Webcast link:
Click here or copy and paste ALL of the following text into your browser:
https://edge.media-server.com/m6/p/iynq8amw
Conference call details for participants:
Confirmation Code: 3742411
Local - London, United Kingdom: +44 (0)20 3427 1907
National free phone - United Kingdom: 0800 279 4977
Local - Amsterdam, Netherlands: +31 (0)20 716 8295
National free phone - Netherlands: 0800 020 2576
Participants will have to quote the above code when dialling into the conference.
For further information, please contact:
Accsys Technologies Paul Clegg, CEO Via MHP Communications
PLC Hans Pauli, Executive Director,
Corporate Development
Will Rudge, FD
Nominated Adviser: Oliver
Cardigan
Jamie Lillywhite
Corporate Broking: Christopher
Wilkinson +44 (0) 20 7260
Numis Securities Ben Stoop 1000
Tim Rowntree +44 (0) 20 3128
MHP Communications Kelsey Traynor 8100
Frank Neervoort +31 681 734 236
Off the Grid (The Netherlands) Yvonne Derkse +31 622 379 666
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report a solid first half of the financial year in which we have made significant progress in our ambition to take advantage of a potential global market in excess of 2.6 million cubic metres of Accoya and Tricoya annually. We have secured significant support from shareholders, our industry and financial partners to make transformational changes to our manufacturing capacity for both Accoya and Tricoya. We have two crucial capital projects underway in Arnhem and Hull, which will provide additional capacity to more than double revenue from today's level.
Our results for the period are underpinned by continued revenue growth around the world with Accoya sales volumes increasing by 13%. We are now operating at full capacity at our Accoya plant, as such further sales growth will be constrained until early in our next financial year once the additional capacity comes on stream. We have therefore had to put our customers on allocation until then and remain grateful for their patience, loyalty and commitment.
Summary of results and operations
Total revenue grew by 13% to EUR28.3m (2016: EUR25.1m) driven by the 13% increase in Accoya sales volumes to 19,826 cubic metres in the six months ended 30 September 2017 compared to the same period last year. Demand remains strong in all regions. We are working with our customers to manage demand until the Accoya manufacturing capacity expansion is completed later this financial year. As a result further growth will be constrained in the second half of the financial year.
Group underlying EBITDA loss of EUR2.8m compares to EUR1.6m loss last year due to lower licence income as expected and with the benefit of additional sales offset by a lower margin. The gross manufacturing margin decreased from 25% to 20%, more comparable to the second half of last year (21%). The reduction was due to a 5% increase in the proportion of lower priced sales to Medite and Rhodia reflecting our long term commitment to these strategic partners, an increase in raw material costs and an additional maintenance stop. We also took the opportunity in the period to significantly reduce our inventory of B grade raw material, which cost us EUR0.5m but will assist with the move into our new warehousing operation.
We have announced a price increase to be implemented in the second half of the financial year, which will pass on the increase in raw material prices. We expect a gross manufacturing margin of approximately 30% when we fully benefit from the current construction projects through increased capacity and meeting Tricoya demand from the Hull plant.
We have invested a total of EUR7.4m in the period in the Arnhem and Hull plants. We commenced construction work in respect of the new 30,000 metric tonne Tricoya plant in Hull and during the period ground clearance has been completed, extensive ground works and detailed engineering work are progressing and initial key equipment orders have been placed.
The first phase of the expansion of the Accoya plant in Arnhem to approximately 60,000 cubic metres annual capacity continues to progress well although the construction of the plant will be completed approximately three months later than previously expected due to the impact of delays in receiving some items of equipment. However, following a period of commissioning we continue to expect the benefit from the additional capacity to be available early in the next financial year.
Our cash balance increased to EUR46.9m at 30 September 2017 from EUR41.2m as at 31 March 2017, with net cash of EUR23.1m (March 2017: EUR18.0m). In addition to capital expenditure of EUR7.2m in the period, a EUR4.1m cash out-flow was attributable to the operating loss before changes in working capital. A further EUR5.0m cash out-flow was attributable to changes in working capital, primarily due to an increase in inventory which is in a large part expected to reverse in the second half of the year. We issued new shares to raise EUR23.8m with EUR12.3m net proceeds from the Firm Placing and Open Offer completed in April 2017 and EUR11.5m from BP Chemicals and Medite.
Outlook
The continued demand for our products means that we are very well positioned to take advantage of the new Accoya production capacity when it becomes available in the next financial year. I believe the overall increase in the Group's production capacity for Accoya and Tricoya from approximately 40,000 cubic metres now to the equivalent of approximately 100,000 cubic metres by the first half of 2019 represents a substantial and exciting opportunity for us.
I am confident that the increase in Accoya volumes coupled with price increases will result in an increase in our overall profitability when the capacity becomes available in the next financial year. Sales growth will be constrained until then and we will continue to work closely with our customers to manage this demand. Since the period end we have continued to make good progress with the expansion our Accoya plant, however we anticipate some limited additional costs associated with the ramp up of operations ahead of the additional capacity becoming available and the transition to our new warehouse facilities.
Overall we are in strong position for future growth and we look forward to taking advantage of our unique offering over the next few years.
Patrick Shanley
Chairman
21 November 2017
CHIEF EXECUTIVE'S STATEMENT
Introduction
We have made strong progress in creating significant additional manufacturing capacity, the need for which continues to be supported by the growth in demand for our products. The remainder of the financial year will be challenging as we work with our Accoya customers on an allocation basis ahead of the third reactor becoming fully available, which is expected from early in the new financial year.
Accoya - Global performance
Six months Six months
ended 30 September ended 30 Year ended
2017 September 31 March
2016 2017
----------------------------- -------------------- ----------- -------------
Accoya sales volume - cubic
metres 19,826 17,506 39,790
----------------------------- -------------------- ----------- -------------
Accoya production volume
- cubic metres 18,034 18,054 38,084
----------------------------- -------------------- ----------- -------------
Accoya sales EUR26.2m EUR22.5m EUR50.7m
----------------------------- -------------------- ----------- -------------
Licence income EURnil EUR0.5m EUR1.6m
----------------------------- -------------------- ----------- -------------
Manufacturing margin - % 20% 25% 23%
----------------------------- -------------------- ----------- -------------
Underlying EBITDA EUR1.2m EUR2.7m EUR6.0m
----------------------------- -------------------- ----------- -------------
Revenue from the sale of Accoya(R) increased by 16% to EUR26.2m in the first half of the year compared to the previous year. The increase was attributable to a 13% increase in Accoya volumes sold together with the impact of a small price increase implemented for some customers in the period.
The increase in sales volumes was limited by production at the Arnhem manufacturing plant which is now running at full capacity as well as an additional maintenance stop in the period resulting in extra costs as well as loss of production. Demand remains strong and as a result in the second half of the financial year we are now working with our customers in respect of allocated volumes in order to manage demand until we are able to benefit from the additional capacity from the new reactor in the next financial year.
Sales growth was recorded in almost all regions, reflecting a global demand trend. In September we were delighted to host 49 out of our 61 global distributors at our Accoya conference in Arnhem which, focussed on future growth. A number of Accoya product developments programmes were highlighted including the production of colour impregnated boards and round fence posts which present further opportunities for developing new sales as we add additional manufacturing capacity.
The gross manufacturing margin of 20% represents a reduction compared to the same period last year (25%), but is comparable to the second half of the previous financial year (21%). The reduction in gross manufacturing margin was attributable to a number of largely one-off factors:
In May 2017 we carried out an extra maintenance stop, which was in addition to our annual maintenance stop completed in September 2017. The May stoppage related to the expansion however lasted longer than expected and resulted in EUR0.2m of additional costs. It also resulted in production volumes for the period being less than we had anticipated, although comparable to last year.
The proportion of sales to Medite and Rhodia increased to represent 42% of total sales volumes (2016: 40%). Lower priced and lower margin Accoya is sold to Medite reflecting our investment in the Tricoya market seeding ahead of the dedicated Tricoya plant becoming operational in 2019, and which is partly reflected by increased equity interest in the Tricoya consortium. Rhodia receives discounted prices reflecting their on-going commitment under their committed off-take agreement.
Raw material prices increased compared to last year. The cost of acetyls increased in the first quarter although has subsequently reduced. The cost of raw wood also increased compared to the same period last year. As a result, we are in the process of implementing a price increase for all of our customers in the second half of the financial year, which will take this cost increase into account.
We also reported a one-off cost attributable to a quantity of lower grade wood sold in the period which reduced gross margin by 1.5% (EUR0.5m), but which will assist in the relocation of inventory to our new warehousing facilities later in the year. Inventory levels had built up following some challenges in securing the right mix of raw wood from our suppliers in New Zealand. During the period we were able to sell much of this material, either as unprocessed wood to traders or as lower grade wood to our existing customers. However the value of the unprocessed wood was lower than its cost resulting in the one-off charge. Going forward, we have improved the balance of material being supplied from New Zealand and factored in the remaining related cost into the new customer prices being implemented in the second half of the financial year.
No licence income was reported in the period (2016: EUR0.5m) however this was expected and reflects the contractual milestones in place with our licensee Rhodia Acetow.
The expansion of the Arnhem plant has continued to progress well during the period and since. The vast majority of equipment is now on site and detailed construction work associated with the chemical plant is advancing broadly as planned however some equipment delays now mean we expect construction to be completed in the final quarter of the financial year. Following commissioning we continue to expect to be able to benefit from the 50% increase in capacity early in the next financial year.
In addition to the expansion of the chemical plant, Bruil, to whom we sold our land to last year, has completed the construction of our new warehouse and office facility under a sale and leaseback arrangement. We expect to start benefiting from this and the logistical efficiencies that it will bring in this calendar year.
Inventory levels increased in the period to EUR14.7m (31 March 2017: EUR11.8m), driven by an increase in raw materials, in part to provide us with the maximum flexibility in order to help manage demand while we are capacity constrained. In addition, inventory levels increased due to the lower than expected production due to the additional May maintenance stop and the lower than expected resulting sales. Inventory levels are expected to significantly decrease in the second half of the financial year.
Tricoya
Six months Six months
ended 30 ended 30 September Year ended
September 2016 31 March
2017 2017
--------------------------- ----------- -------------------- -------------
Sales of Medite Tricoya
panels,
by Medite - cubic metres 3,751 3,032 5,806
--------------------------- ----------- -------------------- -------------
Following the completion of the Tricoya consortium on 29 March 2017, I am pleased with the progress being made on multiple fronts.
Our site on the Saltend Chemicals Park in Hull, adjacent to BP's acetyls plant, has been remediated and cleared. Following taking possession of the site in June we have made significant progress with extensive ground works including piling being undertaken. Engie Fabricom, the EPC (Engineering, Procurement and Construction) contractor has also continued to develop the detailed engineering which in turn has allowed the initial key equipment orders to have been placed including for wood handling, the acetylation reactor and key system control equipment.
While still relatively early in the overall construction process, we continue to expect the plant to become operational during the first half of 2019 calendar year.
Medite has continued to develop the market and sales of Medite Tricoya panels by Medite have increased by 24% compared to the same period last year. Demand for Tricoya product continues to increase and growth is being limited as a result of the production capacity in Arnhem restricting the amount of Accoya that can be sold to Medite. As a result, we expect sales to increase further when the additional Accoya manufacturing capacity becomes available in the next financial year and further again when the dedicated Tricoya plant becomes operational in 2019.
As a consortium partner and committed off-take partner, Medite has been responsible for the majority of sales, however during the period we have commenced sales and marketing activities in regions outside of Medite's licensed region in order to further increase ultimate demand for the Hull plant and in order to seed new markets in respect of potential additional Tricoya licensees.
During the period a non-binding heads of terms has been signed with a large wood panel manufacturer in respect of a Tricoya user licence. This is the first stage of what we expect to be many long term and larger volume agreements concerning the sale of Tricoya wood chips from the Hull plant.
Costs incurred in Tricoya have largely related to the construction project, with EUR3.0m being capitalised in the period. Operating costs have remained consistent with the previous period however are expected to increase over time as activity levels also increase ahead of the completion of the Tricoya plant.
We agreed an acceleration of the remaining equity funding due from BP Chemicals and Medite into Tricoya Ventures UK. This enables us to better manage the foreign exchange risks associated with the project given much of the construction cost is denominated in pounds sterling. However as a result of holding pounds sterling, we have recorded some foreign exchange losses in the period.
Intellectual property
Accsys has increased its number of patent applications in the recent period by expanding its patent families to 24, including those relating to Tricoya(R) . Applications filed now number 280, in 43 countries. To date, 74 patents have been granted in various countries throughout the world. Significant attention has been given to the protection of new innovation associated with the Arnhem plant expansion and the Tricoya(R) plant, as well as on complementary technologies for use with Accoya(R) and Tricoya(R) wood products. Our principal trademark portfolio covers our brands Accoya(R) , Tricoya(R) , the Trimarque device and Accsys(R) , protected by registration in 56 countries, with recent trademark activity focussed on the creation of distinctive brands to support new product development.
The Company continues to invest in the generation and protection of valuable know-how relating to its products and processes.
Outlook
I expect production volumes to increase in the second half of the financial year compared to the first half. Together with the price increase this is expected to result in a higher gross margin in the second half of the year, however we also expect to incur some additional costs associated with the transition to the new warehouse facilities and ahead of the new capacity becoming available.
We continue to expect to benefit from the additional capacity from early in the next financial year. Profitability will then increase further as sales volumes are expected to increase more significantly.
I am confident that the demand from our existing and potential new customers, including for Tricoya, remains strong and sales will significantly increase next year.
Paul Clegg
Chief Executive
21 November 2017
FINANCIAL REVIEW
Statement of comprehensive income
Group revenue increased by 13% to EUR28.3m for the six months ended 30 September 2017 (2016: EUR25.1m). Accoya segment revenue increased by 13% to EUR28.3m with revenue from Accoya(R) wood increasing by 16% to EUR26.2m largely as a result of higher sales volumes and price increases early in the period. Included in this is sales revenue for wood products supplied to Medite for the manufacture of Tricoya(R) , which increased by 16% to EUR3.2m (2016: EUR2.7m) driven by of Medite's own sales of Medite Tricoya panels growth of 24% compared to the same period last year.
Licensing and business development revenue of EUR0.1m, included in other revenue (2016: EUR0.7m, including EUR0.5m licence revenue), was attributable to our Accoya licensee, Rhodia Acetow, in respect marketing services. The prior year included EUR0.5m in respect of licence fees from Rhodia Acetow as a result of the commencement of the Arnhem expansion, which was not repeated in the current period as expected given the milestone nature of the agreement. EUR2.1m of other revenue predominantly relates to the sale of acetic acid and remained consistent with prior year (EUR2.0m) given similar production levels.
Gross margin decreased from 27% to 20% compared to the same period in the previous year due to lower licencing income and lower manufacturing margin. Gross Accoya manufacturing margin decreased from 25% to 20% (year ended 31 March 2017: 23%). The decrease in margin was due to a one off EUR0.5m loss on low grade wood, increased material costs for raw wood and acetyls, together with an additional maintenance stop in the period due to tie ins for the plant expansion in Arnhem. This was offset by with an increase in pricing as noted above. The Group has implemented a further price increase following the period end.
Other operating costs, increased from EUR10.2m to EUR12.0m. This increase is largely due to exceptional items and other adjustments of EUR2.1m (2016: EUR0.3m), with underlying operating costs remaining constant at EUR9.9m (2016: EUR9.9m).
Underlying operating cost adjustments include:
-- EUR1.4m annual bonus paid in the current year which was attributable to the year ended 31 March 2017. The accrual for the current year bonus is included in underlying operating costs. This double charge in the period results from a re-alignment of the timing of recognition of bonuses reflecting the more structured annual bonus scheme now in place compared to previous years. In addition the bonus paid in the current period relating to the year ended 31 March 2017 included one-off targets relating to the formation of the Tricoya consortium.
-- EUR0.2m of exceptional restructuring charge has been recorded following from staff changes necessary following the formation of the Tricoya consortium.
-- EUR0.5m foreign exchange loss arose from holding cash in pounds sterling which was held primarily as a cash flow hedging instrument to hedge future Sterling project expenditure on the new plant in Hull. This has been impacted by the volatility of the exchange rate post Brexit (see note 4).
Underlying operating costs remained constant at EUR9.9m (2016: EUR9.9m). Staff costs increased by EUR0.1m to EUR4.9m due to inflationary salary increases and an increase in headcount. This increase was mitigated as our UK cost base benefited from the strengthening of the Euro against Sterling during the period, with a EUR0.1m decrease relating to the changes in foreign exchange. Other costs benefitted from an additional EUR0.1m foreign exchange decrease, offset by small increases in facility and sales and marketing costs as the business prepares for the larger production capacity.
Research and development costs increased from EUR0.6m to EUR0.7m as a result of exceptional items (See note 4).
Finance expenses increased to EUR0.4m (2016: EUR0.1m) due to interest payable on loan notes with BGF and Volantis entered into at the end of the prior period together with finance charges attributable to our lease arrangements including those relating to the expansion project in Arnhem. This charge is after allowing for a gain of EUR0.6m relating to foreign exchange due to holding these loan notes in pounds sterling which has been reported as an other adjustment.
The increase in the loss before tax by EUR3.9m to EUR6.8m (2017: EUR2.9m) includes EUR1.9m attributable to changes in exceptional items and other adjustments. This is largely attributable to the decrease in gross margin as noted above.
The tax charge of EUR0.1m (2016: EUR0.4m) is based on our expected tax rate for the year and is attributable to the profits arising from manufacturing operations, offset by expected research and development tax credits. The decrease reflects the lower manufacturing profits arising in the period compared to the previous year.
Group average headcount increased to 135 in the period to 30 September 2017, from 125 in the period to 30 September 2016, with the increase predominantly attributable to temporary staff supporting the two major projects, in addition to management and administrative functions as the group continues to grow.
Full details of TTL's results have been included in note 6.
Cash flow
At 30 September 2017, the Group held cash balances of EUR46.9m, representing a EUR5.7m increase in the 6 months from 31 March 2017. The increase in cash in the 6 month period is largely attributable to the net proceeds from the issue of share capital in Accsys of EUR12.3m and issue of share capital in Tricoya Ventures UK Limited of EUR11.5m, offset by investment in tangible and intangible fixed assets of EUR7.2m, an increase in working capital of EUR5.0m, out-flows from operating activities of EUR4.1m and a foreign exchange loss on revaluation of EUR0.7m.
Cash out-flow from operating activities before changes in working capital of EUR4.1m represented an increase compared to EUR1.6m cash out-flow in the equivalent period in the previous year, reflecting the underlying decline in profits of the Group and exceptional items. The change in working capital in the six months to September 2017 of EUR5.0m (2016: EUR1.1m) included an increase relating to inventories of EUR2.9m in the period due to an expected increase in raw wood inventory to satisfy customer demands and increases arising from lower than expected production in the period. There was also a decrease in trade and other payables of EUR0.7m largely due to increased capital expenditure payments and an increase in trade and other receivables of EUR1.4m due to inventory prepayments. In the second half of the year the inventory balance is expected to decrease significantly resulting in a decrease in working capital.
Financial position
Tangible fixed assets additions of EUR7.4m (2016: EUR1.4m) in the last 6 months consisted predominantly of equipment and services in respect of the Accoya plant expansion and the Tricoya plant build in Hull. EUR0.3m of internal development costs were capitalised in respect of Tricoya Technologies Limited (2016: EUR0.2m).
Trade and other receivables increased to EUR9.0m (2016: EUR6.4m) largely as a result of a EUR1.0m increase in inventory prepayment, with the inventory received shortly after the period end in order to satisfy the expected continued higher sales in the second half of the year. Additionally trade receivables increased by EUR1.6m, noting only a EUR0.7m increase from March 2017, due to increased sales in the period. Inventory increased to EUR14.7m (2016: EUR10.2m) due to the expected high volume of raw wood receipts in the first half of the year in preparation for the expected increased sales and as a result of the lower than previously expected production and resulting sales. The inventory level is expected to unwind in the second half of the year.
The increase in trade and other payables to EUR11.5m (2016: EUR9.5m) includes the expenses associated with various projects currently being undertaken by the Group such as the Arnhem plant expansion and the Hull Plant construction.
Amounts payable under loan agreements increased to EUR20.5m (2016: EURnil), noting this has increased from EUR20.1m since March 2017. This balance represents the loan agreements entered into in the prior period, with accrued interest to date. EUR7.5m of the Rhodia loan facility remains available (31 March 2017: EUR7.5m) and this is expected to be utilised in the second half of the financial year as the Arnhem expansion is completed. EUR15.0m of the Royal Bank of Scotland loan facility remains available (31 March 2017: EUR15.0m), with the BGF and Volantis loans being fully drawn down in the prior period.
Risks and uncertainties
The business, financial condition or results of operations of the Group could be adversely affected by any of the risks set out below. The Group's systems of control and protection are designed to help manage and control risks to an appropriate level rather than to eliminate them.
The Directors consider that the principal risks to achieving the Group's objectives are those set out below.
(a) Economic and market conditions
The Group's operations comprise the manufacture of Accoya(R) wood and Tricoya(R) wood elements, technology and product development and licensing the technology to manufacture and sell Accoya(R) and Tricoya(R) wood elements to third parties. The cost and availability of key inputs affects the profitability of the Group's own manufacturing whilst also impacting the potential profitability of third parties interested in licensing the Group's technology. The price of key inputs and security of supply are managed by the Group, partly through the development of long term contractual supply agreements.
An element of the Group's strategy for growth envisages the Group selling new or existing products and services into other countries or into new markets. However, there can be no assurance that the Group will successfully execute this strategy for growth. The development of a mass market for a new product or process is affected by many factors, many of which are beyond the control of the Group, including the emergence of newer and more competitive products or processes and the future price of raw materials. If a mass market fails to develop or develops more slowly than anticipated, the Group may fail to achieve sustainable profitability.
(b) Regulatory, legislative and reputational risks
The Group's operations are subject to extensive regulatory requirements, particularly in relation to its manufacturing operations and employment policies. Changes in laws and regulations and their enforcement may adversely impact the Group's operations in terms of costs, changes to business practices and restrictions on activities which could damage the Group's reputation and brand.
(c) Employees
The Group's success depends on its ability to continue to attract, motivate and retain highly qualified employees. The highly qualified employees required by the Group in various capacities are sometimes in short supply in the labour market. There are risks associated with operating a chemical plant and accordingly the health and safety of our staff is made a priority. We continuously seek improvements to exceed industry expectations by challenging our methods, improving our reporting and continuing to learn
(d) Intellectual property
The Group's strategy of exploiting its technology via manufacturing, partnerships and licensing depends upon maintaining effective protection of its intellectual properties worldwide. Protection is afforded by a combination of trademarks, patents, confidentiality agreements and the structuring of legal contracts relating to key licensing, engineering and supply arrangements. Unauthorised use of the Group's intellectual property may adversely impact its ability to exploit the technology and lead to additional expenditure to enforce legal rights. The wide geographical spread of our products increases this risk due to the increasingly varied and complex laws and regulations in which we seek to protect the Group's intellectual property.
Further details of how risks and uncertainties relate to our strategy and performance in the year are set out in the Group's 2017 Annual Report. In addition, as described above, there is increased foreign exchange exposure relating to our pounds sterling expenditure for the new Hull plant. The Group has implemented its cash flow hedging strategy of using sterling cash holdings to hedge against foreign exchange rate changes in the expected sterling project expenditure.
Going concern
These condensed consolidated financial statements are prepared on a going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future, which is deemed to be at least 12 months from the date these interim results were approved. As part of the Group's going concern review, the Directors have reviewed the Group's trading forecasts and working capital requirements for the foreseeable future. These forecasts indicate that, in order to continue as a going concern, the Group is dependent on achieving certain operating performance measures relating to the production and sales of Accoya(R) wood from the plant in Arnhem and the collection of on-going working capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and performance measures and believe that appropriate controls and procedures are in place or will be in place to make sure that these are met. The Directors believe, while some uncertainty inherently remains in achieving the budget, in particular in relation to market conditions outside of the Group's control, that there are a sufficient number of alternative actions and measures that can be taken in order to achieve the Group's medium and long term objectives.
Therefore, the Directors believe that the going concern basis is the most appropriate basis on which to prepare the financial statements.
William Rudge
Finance Director
21 November 2017
DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm to the best of their knowledge:
-- That these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
-- The interim results include a fair review of the information required by DTR 4.2.7R being an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- The interim Management Report (Narrative) include a fair review of the information required by DTR 4.28R being disclosure of related party transactions and changes therein since the last annual report.
By order of the Board
Angus Dodwell
Company Secretary
Consolidated interim statement of comprehensive income for the six months ended 30 September 2017
Note Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
6 months 6 months 6 months 6 months 6 months 6 months Year Year Year
ended ended ended ended ended ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March 31 March
2017 2017 2017 2016 2016 2016 2017 2017 2017
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items Total items items Total items items Total
& other & other & other & other & other & other
adjustments* adjustments* adjustments* adjustments* adjustments* adjustments*
Accoya(R)
wood revenue 26,184 - 26,184 22,534 - 22,534 50,655 - 50,655
Licence revenue - - - 500 - 500 1,576 - 1,576
Other revenue 2,122 - 2,122 2,025 - 2,025 4,298 - 4,298
----------------- ----- ------------- ------------- ---------- ------------- ------------- ---------- ------------- ------------- ----------
Total revenue 2 28,306 - 28,306 25,059 - 25,059 56,529 - 56,529
Total cost
of sales (22,667) - (22,667) (18,236) - (18,236) (42,175) - (42,175)
Gross profit 5,639 - 5,639 6,823 - 6,823 14,354 - 14,354
Other operating
costs 3 (9,900) (2,141) (12,041) (9,873) (303) (10,176) (18,551) (343) (18,894)
Other gains 4 - - - - 601 601 - 635 635
Loss from
operations (4,261) (2,141) (6,402) (3,050) 298 (2,752) (4,197) 292 (3,905)
Finance income - - - 1 - 1 2 - 2
Finance expense (981) 564 (417) (104) - (104) (302) (258) (560)
Loss before
taxation (5,242) (1,577) (6,819) (3,153) 298 (2,855) (4,497) 34 (4,463)
Tax charge (81) 20 (61) (373) - (373) (666) - (666)
Loss for
the period (5,323) (1,557) (6,880) (3,526) 298 (3,228) (5,163) 34 (5,129)
------------- ------------- ---------- ------------- ------------- ---------- ------------- ------------- ----------
Loss arising
on
translation
of foreign
operations (52) - (52) - - - (108) - (108)
Gain arising
on
foreign
currency
hedging - 97 97 - - - - 104 104
Total other
comprehensive
income (52) 97 45 - - - (108) 104 (4)
Total
comprehensive
loss for
the period (5,375) (1,460) (6,835) (3,526) 298 (3,228) (5,271) 138 (5,133)
============= ============= ========== ============= ============= ========== ============= ============= ==========
Total
comprehensive
loss for
the year
is attributable
to:
Owners of
Accsys
Technologies
PLC (4,878) (1,393) (6,271) (3,484) 298 (3,186) (5,058) 68 (4,990)
Non-controlling
interests (497) (67) (564) (42) - (42) (213) 70 (143)
Total
comprehensive
loss for
the period (5,375) (1,460) (6,835) (3,526) 298 (3,228) (5,271) 138 (5,133)
============= ============= ========== ============= ============= ========== ============= ============= ==========
Basic and
diluted loss
per ordinary
share 5 EUR(0.04) EUR(0.06) EUR(0.04) EUR(0.04) EUR(0.05) EUR(0.06)
Prior year has been restated to reflect the adoption of IFRS 9 and to represent exceptional and other adjustments on a consistent basis (see note 4)
The notes set out on pages 17 to 28 form an integral part of these condensed financial statements.
* See note 4 for details of exceptional items and other adjustments
Consolidated interim statement of financial position at 30 September 2017
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended 31 March
30 Sept 30 Sept 2017
Note 2017 2016 (restated)
EUR'000 EUR'000 EUR'000
Non-current assets
Intangible assets 7 10,762 10,945 10,839
Property, plant and
equipment 8 27,953 16,914 21,681
38,715 27,859 32,520
---------- ---------- -----------
Current assets
Inventories 14,699 10,184 11,796
Trade and other receivables 9,019 6,441 7,612
Cash and cash equivalents 46,878 7,866 41,173
Corporation tax receivable 579 545 687
71,175 25,036 61,268
---------- ---------- -----------
Current liabilities
Trade and other payables (11,450) (9,455) (12,524)
Obligation under finance
lease (443) (347) (455)
Corporation tax payable (1,092) (1,929) (1,620)
(12,985) (11,731) (14,599)
---------- ---------- -----------
Net current assets 58,190 13,305 46,669
Non-current liabilities
Obligation under finance
lease (2,793) (1,868) (2,621)
Other long term borrowing (20,528) - (20,097)
(23,321) (1,868) (22,718)
---------- ---------- -----------
Total net assets 73,584 39,296 56,471
Equity and reserves
Share capital 9 5,568 4,531 4,531
Share premium account 140,028 128,792 128,792
Other reserves 10 110,241 107,421 113,460
Accumulated loss (209,101) (201,586) (202,944)
Own shares (15) (34) (33)
Foreign currency translation
reserve (7) 153 45
Capital value attributable
to owners of Accsys
Technologies PLC 46,714 39,277 43,851
Non-controlling interest
in subsidiary 26,870 19 12,620
Total equity 73,584 39,296 56,471
The notes set out on pages 17 to 28 form an integral part of these condensed financial statements.
Consolidated interim statement of changes in equity for the 6 months ended 30 September 2017
Total
equity
Foreign attributable
currency to equity
Share trans- shareholders
capital Share Other Own lation Accumulated of the Non-Controlling Total
Ordinary premium reserves Shares reserve loss company interests Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at
30 Sept 2016
(unaudited) 4,531 128,792 107,421 (34) 153 (201,586) 39,277 19 39,296
Total
comprehensive
(expense) for
the period - - 104 - (108) (1,800) (1,804) (101) (1,905)
Share based
payments - - - - - 442 442 - 442
Shares issued - - - 1 - - 1 - 1
Issue of
subsidiary
shares to
non-controlling
interests - - 6,511 - - - 6,511 12,702 19,213
Issue of
subsidiary
shares to Group
companies - - (576) - - - (576) - (576)
Balance at
31 March 2017 4,531 128,792 113,460 (33) 45 (202,944) 43,851 12,620 56,471
========= ======== ========= ======== ========= ============ ============== ================= ========
Total
comprehensive
expense for
the period - - 97 - (52) (6,316) (6,271) (564) (6,835)
Share based
payments - - - - - 159 159 - 159
Shares issued 1,037 - - 18 - - 1,055 - 1,055
Premium on
shares
issued - 13,007 - - - - 13,007 - 13,007
Share issue
costs - (1,771) - - - - (1,771) - (1,771)
Issue of
subsidiary
shares to
non-controlling
interests - - (3,316) - - - (3,316) 14,814 11,498
Balance at
30 Sept 2017
(unaudited) 5,568 140,028 110,241 (15) (7) (209,101) 46,714 26,870 73,584
========= ======== ========= ======== ========= ============ ============== ================= ========
See note 10 for details concerning other reserves.
Non-controlling interests relates to the investment of various parties into Tricoya Technologies Limited and Tricoya Ventures UK Limited (note 6)
The notes set out on pages 17 to 28 form an integral part of these condensed financial statements.
Consolidated interim statement of cash flow for the six months ended 30 September 2017
Unaudited Unaudited Audited
6 months 6 months Year End
30 Sept 30 Sept 31 March
2017 2016 2017
(restated) (restated)
EUR'000 EUR'000 EUR'000
Loss before taxation before exceptional
items and other adjustments (5,242) (3,153) (4,497)
Adjustments for:
Amortisation of intangible assets 289 276 556
Depreciation of property, plant and
equipment 1,167 1,090 2,157
Net (gain)/loss on disposal of property,
plant and equipment - - 55
Net Finance expense 981 103 302
Equity-settled share-based payment
expenses 159 442 884
Currency translation (gains)/losses 180 (66) (129)
Cash outflows from operating activities
before changes in working capital and
before exceptional items and other
adjustments (2,466) (1,308) (672)
Exceptional Items in operating activities
(see note 4) (1,604) (303) (517)
Cash outflows from operating activities
before changes in working capital (4,070) (1,611) (1,189)
========== =========== ===========
(Increase) in trade and other receivables (1,392) (765) (2,936)
(Decrease) in deferred income - (23) -
(Increase) in inventories (2,904) (1,712) (3,322)
(Decrease)/Increase in trade and other
payables (733) 1,394 5,737
Net cash used in operating activities
before tax (9,099) (2,717) (1,710)
Tax (paid) (482) (2) (745)
Net cash absorbed by operating activities (9,581) (2,719) (2,455)
========== =========== ===========
Cash flows from investing activities
Interest (paid)/ received - 1 2
Disposal of property, plant and equipment - 4,223 4,223
Expenditure on property, plant and
equipment (6,957) (1,507) (6,416)
Expenditure on intangible assets (212) (244) (415)
Net cash used in investing activities (7,169) 2,473 (2,606)
========== =========== ===========
Cashflows from financing activities
Proceeds from loans - - 20,736
Other finance costs (325) - (954)
Interest Paid (223) (104) (250)
Repayment of finance lease (83) (86) (173)
Proceeds from issue of share capital 14,063 50 50
Proceeds from issue of subsidiary shares
to non-controlling interests 11,498 - 19,122
Share issue costs (1,771) - (805)
Net cash from financing activities 23,159 (140) 37,726
========== =========== ===========
Net increase/(decrease) in cash and
cash equivalents 6,409 (386) 32,665
Effect of exchange loss on cash and
cash equivalents (704) 66 322
Opening cash and cash equivalents 41,173 8,186 8,186
Closing cash and cash equivalents 46,878 7,866 41,173
========== =========== ===========
The notes set out on pages 17 to 28 form an integral part of these interim financial statements.
Notes to the financial statements for the 6 months ended 30 September 2017
1. Accounting policies
General Information
The principal activity of the Group is the production and sale of Accoya(R) solid wood and exploitation of technology for the production and sale of Accoya(R) wood and Tricoya(R) wood elements via the Company's 100% owned subsidiaries, Titan Wood Limited, Titan Wood B.V., Titan Wood Technology B.V., Titan Wood Inc. 75% owned subsidiary, Tricoya Technologies Limited (collectively the 'Group'), and the 46% owned subsidiary, Tricoya Ventures UK Limited. Manufactured through the Group's proprietary acetylation processes, these products exhibit superior dimensional stability and durability compared with alternative natural, treated and modified woods as well as more resource intensive man-made materials.
The Company is a public limited company, which is listed on AIM in the United Kingdom and Euronext in the Netherlands, and is domiciled in the United Kingdom. The registered office is Brettenham House, 19 Lancaster Place, London, WC2E 7EN.
The condensed consolidated interim financial statements were approved on 21 November 2017.
These condensed consolidated interim financial statements have been reviewed, not audited.
Basis of accounting
The Group's condensed financial statements in these interim results have been prepared in accordance with IFRS issued by the International Accounting Standards Board as endorsed by the European Union, in particular International Accounting Standard (IAS) 34 "interim financial reporting" and the disclosure and transparency rules of the Financial Conduct Authority. The financial information for the six months ended 30 September 2017 and the six months ended 30 September 2016 is unaudited. The comparative financial information for the full year ended 31 March 2017 does not constitute the group's statutory financial statements for that period although it has been derived from the statutory financial statements for the year then ended. A copy of those statutory financial statements has been delivered to the Registrar of Companies and which were approved by the Board of Directors on the 19 June 2017. The auditors' report on those accounts was unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 March 2017.
The accounting policies adopted are consistent with those of the previous financial year except for taxes on income in the interim periods which are accrued using the tax rate that would be applicable to the expected total annual profit or loss, and to reflect the adoption of IFRS9 and hedge accounting.
Changes in accounting policies
No new accounting standards, amendments or interpretations have been adopted in the period which have any impact on these condensed financial statements, or are expected to affect the Group's 2018 Annual Report other than as noted below.
The accounting policies and methods of computation are consistent with those applied in the 31 March 2017 annual financial statements, other than during the period IFRS9, Financial Instruments has been adopted together with hedge accounting in respect of the future currency exposures in respect of the Tricoya plant construction. The previous year's figures have been restated and represented accordingly. An assessment was carried out to identify all areas impacted under the adoption of IFRS 9 and currently there are no other impacts expected for the period year ending 30 September 2017.
Going concern
These condensed consolidated financial statements are prepared on a going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future, which is deemed to be at least 12 months from the date these interim results were approved. As part of the Group's going concern review, the Directors have reviewed the Group's trading forecasts and working capital requirements for the foreseeable future. These forecasts indicate that, in order to continue as a going concern, the Group is dependent on achieving certain operating performance measures relating to the production and sales of Accoya(R) wood from the plant in Arnhem and the collection of on-going working capital items in line with internally agreed budgets.
The Directors have considered the internally agreed budgets and performance measures and believe that appropriate controls and procedures are in place or will be in place to make sure that these are met. The Directors believe, while some uncertainty inherently remains in achieving the budget, in particular in relation to market conditions outside of the Group's control, that there are a sufficient number of alternative actions and measures that can be taken in order to achieve the Group's medium and long term objectives. Therefore, the Directors believe that the going concern basis is the most appropriate on which to prepare the financial statements.
2. Segmental reporting
The Group's business is the manufacturing of and development, commercialisation and licensing of the associated proprietary technology for the manufacture of Accoya(R) wood, Tricoya(R) wood elements and related acetylation technologies. Segmental reporting is divided between corporate activities, activities directly attributable to Accoya, to Tricoya or research and development activities. This note has been represented and restated following the formation of the Tricoya Consortium to more appropriately reflect costs associated with Accoya and Tricoya.
Accoya
Accoya Segment
----------------------------------------------------------------------------------------------------------
12
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months months
ending ending ending ending ending ending ending ending ending
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2017 2017 2017
2017 2017 2017 2016 2016 2016
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items items items items items
& other & Other & other & Other & other & Other
adjustments Adjustments TOTAL adjustments Adjustments TOTAL adjustments Adjustments TOTAL
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Accoya(R) wood
revenue 26,184 - 26,184 22,534 - 22,534 50,655 - 50,655
Licence
revenue - - - 500 - 500 1,576 - 1,576
Other revenue 2,122 - 2,122 2,002 - 2,002 4,268 - 4,268
Total Revenue 28,306 - 28,306 25,036 - 25,036 56,499 - 56,499
Cost of sales (22,667) - (22,667) (18,236) - (18,236) (42,175) - (42,175)
Gross profit 5,639 - 5,639 6,800 - 6,800 14,324 - 14,324
Other
operating
costs (5,643) (348) (5,991) (5,314) - (5,314) (10,648) - (10,648)
Other Gain - - - - 601 601 - 635 635
Profit/(Loss)
from
operations (4) (348) (352) 1,486 601 2,087 3,676 635 4,311
Profit/(Loss)
from
operations (4) (348) (352) 1,486 601 2,087 3,676 635 4,311
Depreciation
and
amortisation 1,248 - 1,248 1,250 - 1,250 2,357 - 2,357
------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ ---------
EBITDA 1,244 (348) 896 2,736 601 3,337 6,033 635 6,668
--------------- ------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ ---------
Revenue includes the sale of Accoya(R) , licence income and other revenue, principally relating to the sale of acetic acid and other licensing related income.
All costs of sales are allocated against manufacturing activities in Arnhem unless they can be directly attributable to a licensee. Other operating costs include depreciation of the Arnhem property, plant and equipment together with all other costs associated with the operation of the Arnhem manufacturing site, including directly attributable administration, sales and marketing costs.
See note 4 for explanation of Exceptional Items and other adjustments.
Headcount = 102 (2016: 94)
The below table shows details of reconciling items to show both Accoya EBITDA and Accoya Manufacturing gross profit, both including and excluding licence and licensing related income, which has been presented given the inclusion of items which can be more variable or one-off.
6 months 6 months
ending ending Year Ended
30 September 30 September 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
-------------- -------------- -----------
Accoya segmental underlying EBITDA 1,244 2,736 6,033
-------------- -------------- -----------
Accoya Licence Income - (500) (1,576)
Other income, predominantly for
marketing services (133) (177) (338)
Accoya segmental underlying EBITDA
(excluding licence income) 1,111 2,059 4,118
============== ============== ===========
Accoya segmental gross profit 5,639 6,800 14,324
-------------- -------------- -----------
Accoya Licence Income - (500) (1,576)
Other income, predominantly for
marketing services (133) (177) (338)
Accoya Manufacturing gross profit 5,506 6,123 12,410
============== ============== ===========
Gross Accoya Manufacturing Margin 20% 25% 23%
Tricoya
Tricoya Segment
------------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months
ending ending ending ending ending ending ending ending 12 months
30 30 30 30 30 30 31 March 31 March ending
September September September September September September 2017 2017 31 March
2017 2017 2017 2016 2016 2016 2017
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items items items items items
& other & Other & other & Other & other & Other
adjustments Adjustments TOTAL adjustments Adjustments TOTAL adjustments Adjustments TOTAL
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Tricoya(R)
wood revenue - - - - - - - - -
Licence
revenue - - - - - - - - -
Other revenue - - - 23 - 23 30 - 30
Total Revenue - - - 23 - 23 30 - 30
Cost of sales - - - - - - - - -
Gross profit - - - 23 - 23 30 - 30
Other
operating
costs (1,238) (729) (1,967) (1,231) - (1,231) (1,795) 173 (1,622)
Profit/(Loss)
from
operations (1,238) (729) (1,967) (1,208) - (1,208) (1,765) 173 (1,592)
Profit/(Loss)
from
operations (1,238) (729) (1,967) (1,208) - (1,208) (1,765) 173 (1,592)
Depreciation
and
amortisation 96 - 96 84 - 84 171 - 171
------------ ------------ ---------- ------------ ------------ ---------- ---------------- ------------ --------
EBITDA (1,142) (729) (1,871) (1,124) - (1,124) (1,594) 173 (1,421)
--------------- ------------ ------------ ---------- ------------ ------------ ---------- ---------------- ------------ --------
Revenue and costs are those attributable to the business development of the Tricoya(R) process and establishment of Tricoya Hull Plant.
See note 4 for explanation of Exceptional Items and other adjustments.
Headcount = 4 (2016: 4), noting a substantial proportion of the costs to date have been incurred via recharges from other parts of the Group or have resulted from contractors.
Corporate
Corporate Segment
----------------------------------------------------------------------------------------------------------------------
12
months
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months ending
ending ending ending ending ending ending ending ending 31
30 30 30 30 30 30 31 March 31 March March
September September September September September September 2017 2017 2017
2017 2017 2017 2016 2016 2016
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items items items items items
& other & Other & other & Other & other & Other
adjustments Adjustments TOTAL adjustments Adjustments TOTAL adjustments Adjustments TOTAL
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross profit - - - - - - - - -
Other
operating
costs (2,332) (906) (3,238) (2,604) (303) (2,907) (4,343) (517) (4,860)
Profit/(Loss)
from
operations (2,332) (906) (3,238) (2,604) (303) (2,907) (4,343) (517) (4,860)
Profit/(Loss)
from
operations (2,332) (906) (3,238) (2,604) (303) (2,907) (4,343) (517) (4,860)
Depreciation
and
amortisation 85 - 85 65 - 65 133 - 133
------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ --------
EBITDA (2,247) (906) (3,153) (2,539) (303) (2,842) (4,210) (517) (4,727)
--------------- ------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ --------
Corporate costs are those costs not directly attributable to Accoya, Tricoya or Research and Development activities. This includes management and the Group's corporate and general administration costs including the head office in London.
Adjustments to other operating costs all relate to bonus payments made in the current year that were of an exceptional nature following the completion of the Tricoya consortium and Accsys fund raising. Underlying loss includes an accrual for bonuses relating to the current financial year, which were previously expensed upon payment in the following financial year.
Headcount = 19 (2016: 15)
Research and Development
Research & Development Segment
----------------------------------------------------------------------------------------------------------------------
12
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months months
ending ending ending ending ending ending ending ending ending
30 30 30 30 30 30 31 March 31 March 31
September September September September September September 2017 2017 March
2017 2017 2017 2016 2016 2016 2017
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items items items items items
& other & Other & other & Other & other & Other
adjustments Adjustments TOTAL adjustments Adjustments TOTAL adjustments Adjustments TOTAL
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross profit - - - - - - - - -
Other
operating
costs (685) (159) (844) (724) - (724) (1,763) - (1,763)
Profit/(Loss)
from
operations (685) (159) (844) (724) - (724) (1,763) - (1,763)
Profit/(Loss)
from
operations (685) (159) (844) (724) - (724) (1,763) - (1,763)
Depreciation
and
amortisation 27 - 27 26 - 26 52 - 52
------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ --------
EBITDA (658) (159) (817) (698) - (698) (1,711) - (1,711)
--------------- ------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ --------
Research and Development costs are those associated with the Accoya(R) and Tricoya(R) processes. Costs exclude those which have been capitalised in accordance with IFRS. (see note 7).
Adjustments to other operating costs all relate to bonus payments made in the current year that were of an exceptional nature following the completion of the Tricoya consortium and Accsys fund raising. Underlying loss includes an accrual for bonuses relating to the current financial year, which were previously expensed upon payment in the following financial year.
Headcount = 10 (2016: 12)
Total
TOTAL
-----------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12
ending ending ending ending ending ending ending ending months
30 30 30 30 30 30 31 March 31 March ending
September September September September September September 2017 2017 31 March
2017 2017 2017 2016 2016 2016 2017
Before Before Before
exceptional Exceptional exceptional Exceptional exceptional Exceptional
items items items items items items
& other & Other & other & Other & other & Other
adjustments Adjustments TOTAL adjustments Adjustments TOTAL adjustments Adjustments TOTAL
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Accoya(R)
wood revenue 26,184 - 26,184 22,534 - 22,534 50,655 - 50,655
Licence
revenue - - - 500 - 500 1,576 - 1,576
Other revenue 2,122 - 2,122 2,025 - 2,025 4,298 - 4,298
Total Revenue 28,306 - 28,306 25,059 - 25,059 56,529 - 56,529
Cost of sales (22,667) - (22,667) (18,236) - (18,236) (42,175) - (42,175)
Gross profit 5,639 - 5,639 6,823 - 6,823 14,354 - 14,354
Other
operating
costs (9,900) (2,141) (12,041) (9,873) (303) (10,176) (18,551) (343) (18,894)
Other Gain - - - - 601 601 - 635 635
Profit/(Loss)
from
operations (4,261) (2,141) (6,402) (3,050) 298 (2,752) (4,197) 292 (3,905)
Finance income - - - 1 - 1 2 - 2
Finance
expense (981) 564 (417) (104) - (104) (302) (258) (560)
Loss before
taxation (5,242) (1,577) (6,819) (3,153) 298 (2,855) (4,497) 34 (4,463)
============ ============ ========== ============ ============ ========== ============ ============ =========
Profit/(Loss)
from
operations (4,261) (2,141) (6,402) (3,050) 298 (2,752) (4,197) 292 (3,905)
Depreciation
and
amortisation 1,455 - 1,455 1,423 - 1,423 2,712 - 2,712
------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ ---------
EBITDA (2,806) (2,141) (4,947) (1,627) 298 (1,329) (1,485) 292 (1,193)
--------------- ------------ ------------ ---------- ------------ ------------ ---------- ------------ ------------ ---------
Adjustments to finance expense relate to the revaluation of the Accsys Technologies loan notes with Business Growth Fund ('BGF') and 1798 Volantis Catalyst Fund II ('Volantis'), which are denominated in pounds sterling. These relate to the pounds sterling held within the Tricoya segment, of which the corresponding foreign currency translation differences are shown as adjustments to other operating costs.
Assets and liabilities cannot be readily allocated to the four segments and therefore no additional segmental information has been disclosed.
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
UK and
Ireland 11,387 10,577 25,307
Rest of
Europe 7,113 5,924 12,984
Benelux 3,455 3,762 7,992
Americas 3,814 2,849 5,810
Asia-Pacific 2,333 1,814 4,009
Rest of
World 204 133 427
28,306 25,059 56,529
========== ========== =========
The segmental assets in the current and previous periods were predominantly held in Europe. Additions to property, plant, equipment and intangible assets in the current and previous periods were predominantly incurred in Europe. Sales to UK and Ireland included the sales to Medite.
3. Other operating costs
Other operating costs consist of the operating costs, other than the cost of sales, associated with the operation of the plant in Arnhem and the offices in Dallas and London.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
Sales and marketing 2,083 2,006 3,773
Research and development 685 571 1,711
Depreciation and amortisation 1,455 1,423 2,713
Other operating
costs 2,072 2,259 3,243
Administration
costs 3,605 3,614 7,111
Exceptional Items and other
adjustments 2,141 303 343
12,041 10,176 18,894
========== ========== =========
Administrative costs include costs associated with Business Development and Legal departments, Intellectual Property as well as Human Resources, IT, Finance, Management and General Office and include the costs of the Group's head office costs in London and the US office in Dallas.
The total cost of EUR12,041k in the current period includes EUR1,967k in respect of Tricoya segment, compared to EUR1,231k in the previous period.
Group average headcount decreased from 125 in the period to 30 September 2016, to 124 in the period to 31 March 2017 and then increased to 135 in the period to 30 September 2017.
During the period EUR212k of costs were capitalised and are included within intangible fixed assets (2016: EUR241k). In addition EUR260k of development costs have been capitalised and are included within tangible fixed assets (2016: EUR286k) in relation to the expansion of the manufacturing facility in Arnhem.
4. Exceptional Items and Other Adjustments
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
Bonuses paid relating to year
ending 31 March 2017 (1,373) - -
Restructuring costs (231) - -
Gain from disposal of land - 601 635
Business Development advisory
fees - (303) (517)
Total exceptional items (1,604) 298 118
---------- ---------- ---------
Foreign exchange differences arising on
Tricoya cash held - Operating costs (537) - 174
Foreign exchange differences arising on
Loan Notes - incl. in Finance expense 564 - (258)
Foreign exchange differences on Tricoya
cash held - Other comprehensive income 97 - 104
Total other adjustments 124 - 20
---------- ---------- ---------
Tax on exceptional items and
other adjustments 20 - -
Total exceptional items and
other adjustments (1,460) 298 138
========== ========== =========
Prior year has been restated to reflect the adoption of IFRS 9 and to represent exceptional and other adjustments on a consistent basis.
Exceptional Items
EUR1,373k annual bonus paid in the current year which was attributable to the year ended 31 March 2017 with the accrual for the current year bonus included in underlying operating costs. This double charge in the period results from a re-alignment of the timing of recognition of bonuses reflecting the more structured annual bonus scheme now in place compared to previous years. In addition the bonus paid in the current period relating to the year ended 31 March 2017 included one-off targets relating to the formation of the Tricoya consortium. This is split between all segments, including EUR293k in Accoya, EUR124k in Tricoya, EUR889k Corporate and EUR67k in R&D.
Other restructuring costs relate to changes required following the completion of the Tricoya consortium in March 2017. This is split between all segments, including EUR54k in Accoya, EUR67k Tricoya, EUR18k Corporate and EUR92k R&D.
Agreements were reached in August 2016 for the sale and leaseback for the land in Arnhem resulting in proceeds of EUR4.2m received in the prior period. A resulting gain of EUR635k was recognised in the previous year as a result of the book value of the land being lower than the sale price. The full amount relates to the Accoya segment.
Business Development advisory fees were incurred during the prior year as the Group pursued a one-off long-term opportunity. The full amount relates to the corporate segment.
Other Adjustments
Foreign exchange differences in the Tricoya segment have occurred due to pounds sterling held within the consortium in preparation for the Hull Plant build. The Group has mitigated this currency exchange risk by adopting hedge accounting in respect of the Tricoya plant construction under IFRS 9, Financial Instruments. The prior year has also been represented and restated to highlight the comparative impact in the prior year.
Foreign exchange differences also arise on the pounds sterling denominated loan notes, entered into in the prior period. These exchange rate differences are included as finance expenses. The prior year has also been represented to reflect the comparative impact in the prior year.
5. Loss per share
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
Basic and diluted 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March
loss per share 2017 2017 2016 2016 2017 2017
(restated) (restated) (restated) (restated)
Before Before Before Exceptional
Exceptional Exceptional Items
Items Total Items Total Total
Weighted average
number of
Ordinary shares
in issue ('000) 111,083 111,083 90,248 90,248 90,442 90,442
Loss for the period
(EUR'000) (4,827) (6,316) (3,483) (3,186) (4,950) (4,986)
Basic and diluted EUR
loss per share EUR (0.04) EUR (0.06) EUR (0.04) EUR (0.04) EUR (0.05) (0.06)
============= ============ ============= ============ =================== ===========
Basic and diluted losses per share are based upon the same figures. Share options are considered anti-dilutive as these would decrease the loss per share.
6. Tricoya Technologies Limited
Tricoya Technologies Limited ("TTL") was incorporated in order to develop and exploit the Group's Tricoya(R) technology for use within the worldwide panel products market, which is estimated to be worth more than EUR60 billion annually.
On 29 March 2017 the Group announced the entry into and successful completion of its agreements for the financing, construction and operation of the world's first Tricoya wood elements acetylation plant in Hull with its TTL consortium investors, being BP, Medite, BGF and Volantis.
The Hull plant will have an initial production capacity of 30,000 tonnes per annum (sufficient to manufacture 40,000 cubic meters of panels) and scope to expand.
Structurally, Accsys, BP Ventures, Medite, BGF and Volantis have invested into TTL. TTL has then invested, alongside BP Chemicals and Medite, in Tricoya Ventures UK Limited ("TVUK"), a special purpose subsidiary of TTL that will construct, own and operate the Hull Plant.
BP will invest EUR20.3 million in the Tricoya Project, including EUR13.7 million as equity in TVUK by BP Chemicals and EUR6.6 million as equity in TTL by BP Ventures. All funding was received by 30 September 2017, except for EUR2.3 million received from BP Chemicals in October 2017.
Medite will invest EUR11 million in the Tricoya Project, including EUR7 million as equity in TTL and EUR4 million as equity in TVUK. All funding was received by 30 September 2017, except for EUR0.6 million received in October 2017.
The Group is expected to increase its total equity interest in TTL to 75.9% over the next two years as a result of its continued supply of lower priced Accoya(R) to Medite to enable continued market development ahead of the completion of the Hull Plant. During the period the Group increased its shareholding from 74.6% to 74.8% from the issue of 284,716 shares related to this market seeding activity.
BGF and Volantis have invested an aggregate of GBP19 million as financial investors into both the Group and TTL. BGF and Volantis invested on similar terms but are investing separately, with BGF accounting for 65% of the GBP19 million total.
In addition, TVUK has entered a six-year EUR17.2 million (EUR15 million net) finance facility agreement with The Royal Bank of Scotland Plc in respect of the construction and operation of the Hull Plant. As at 30 September 2017 the Group have utilised EUR161k of the facility in relation to fees incurred.
The Group has consolidated the results of TTL and TVUK as subsidiaries, as it exercises the power to govern the entities in accordance with IFRS 10 guidance. The non-controlling interests in both entities have been recognised in these Group financial statements.
The "TTL Group" income statement and balance sheet, consisting of TTL and its subsidiary TVUK, are set out on the following page:
TTL Group income statement:
Consolidated Consolidated Consolidated
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
Licence revenue - - -
Other income - 23 -
Total revenue - 23 -
============= ============= =============
Costs:
Staff costs (946) (814) (1,145)
Research & development (excluding
staff costs) (103) (108) (200)
Intellectual Property (105) (338) (606)
Other (294) (26) (289)
Exceptional Items (440) - 277
Depreciation and Amortisation (96) (84) (171)
EBIT (1,984) (1,347) (2,134)
============= ============= =============
EBIT attributable to Accsys shareholders (1,420) (1,305) (1,991)
============= ============= =============
Exceptional items include foreign exchange differences relating to pounds sterling balances held by the Group (see note 4).
TTL Group balance sheet at 30 September 2017:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
Non-current assets
Intangible assets 3,334 3,192 3,246
Property, Plant and Equipment 4,418 - 1,440
7,752 3,192 4,686
---------- ---------- ---------
Current assets
Trade and other receivables 865 160 612
Cash and cash equivalents 42,492 298 36,386
43,357 458 36,998
---------- ---------- ---------
Current liabilities
Trade and other payables (2,817) (1,794) (3,306)
Intercompany balance non TTL/TVUK (833) (610) (594)
(3,650) (2,404) (3,900)
---------- ---------- ---------
Non-current liabilities
Long term borrowing (161) - -
(161) - -
---------- ---------- ---------
Net current assets 39,707 (1,946) 33,098
---------- ---------- ---------
Net assets 47,298 1,246 37,784
========== ========== =========
Value attributable to Accsys Technologies 20,428 1,209 25,164
========== ========== =========
7. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost
At 31 March 2016 5,528 73,292 4,231 83,051
Additions 241 - - 241
At 30 September 2016 5,769 73,292 4,231 83,292
Additions 173 - - 173
At 31 March 2017 5,942 73,292 4,231 83,465
============ ============= ========= ========
Additions 212 - - 212
At 30 September 2017 6,154 73,292 4,231 83,677
============ ============= ========= ========
Accumulated amortisation
At 31 March 2016 607 71,464 - 72,071
Amortisation 138 138 - 276
At 30 September 2016 745 71,602 - 72,347
Amortisation 142 137 - 279
At 31 March 2017 887 71,739 - 72,626
============ ============= ========= ========
Amortisation 151 138 - 289
At 30 September 2017 1,038 71,877 - 72,915
============ ============= ========= ========
Net book value
At 30 September 2017 5,116 1,415 4,231 10,762
At 31 March 2017 5,055 1,553 4,231 10,839
At 30 September 2016 5,024 1,690 4,231 10,945
8. Property, plant and equipment
Land and Plant Office
buildings and machinery equipment Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost or valuation
At 31 March 2016 5,251 30,725 1,238 37,214
Additions - 1,343 53 1,396
Disposals (3,606) (64) - (3,670)
Foreign currency translation
gain - - 2 2
At 30 September 2016 1,645 32,004 1,293 34,942
Additions - 5,759 79 5,838
Disposals - (7) - (7)
Foreign currency translation
gain - - 7 7
At 31 March 2017 1,645 37,756 1,379 40,780
=========== =============== =========== ========
Additions - 7,360 71 7,431
Foreign currency translation
(loss) - - (5) (5)
At 30 September 2017 1,645 45,116 1,445 48,206
=========== =============== =========== ========
Depreciation
At 31 March 2016 541 15,568 833 16,942
Charge for the period 59 947 84 1,090
Disposals - (6) - (6)
Foreign currency translation
gain - - 2 2
At 30 September 2016 600 16,509 919 18,028
Charge for the period 58 922 86 1,066
Disposals - (3) - (3)
Foreign currency translation
gain - - 8 8
At 31 March 2017 658 17,428 1,013 19,099
Charge for the period 59 1,005 103 1,167
Disposals - - - -
Foreign currency translation
(loss) - - (13) (13)
At 30 September 2017 717 18,433 1,103 20,253
=========== =============== =========== ========
Net book value
At 30 September 2016 1,045 15,495 374 16,914
At 31 March 2017 987 20,328 366 21,681
At 30 September 2017 928 26,683 342 27,953
Included within property, plant and equipment are assets with an initial cost of EUR7,787,000 and a net book value at 30 September 2017 of EUR4,477,000 which has been accounted for as a finance lease. Assets with a net book value of EUR22.4m are subject to security agreements associated with the Rhodia Acetow loan facility.
Included within property, plant and equipment are also assets under construction of EUR14,649,000 which are not being depreciated (2016: EUR2,266,000)
9. Share capital
In the period ended 30 September 2016:
Own shares represents 673,355 Ordinary Shares issued to the Employee Benefit Trust ('EBT') at nominal value on 4 July 2016.
In addition, of the Ordinary Shares which had been issued to the EBT in the previous year, 938,449 Ordinary Shares vested on 15 July 2016. Of these beneficiaries elected to sell 498,318 Ordinary Shares in the market.
On 15 August 2016, a total of 63,909 Ordinary Shares were issued and released to various employees under the terms of the Employee Share Participation Plan.
In the period ended 31 March 2017:
On 9 February 2017, a total of 16,302 Ordinary Shares were issued and released to various employees under the terms of the Employee Share Participation Plan.
In the period ended 30 September 2017:
On 24 April 2017, following the publication of a prospectus for the Firm Placing and Open Offer, the Company issued a total of 20,323,986 Ordinary Shares for EUR0.69 each to a combination of new and existing shareholders. Proceeds of EUR14,024,000 were received net of expenses of EUR1,757,000.
Own shares represents 97,720 Ordinary Shares issued to the EBT at nominal value on 23 June 2017 and 198,154 Ordinary Shares issued to the EBT at nominal value on 27 September 2017..
In addition, of the Ordinary Shares which had been issued to the EBT in the previous year, 679,435 Ordinary Shares vested on 11 July 2017. Of these beneficiaries elected to sell 405,169 Ordinary Shares in the market.
On 27 September 2017, the Company issued a total of 106,189 Ordinary Shares were issued and released to an employee following the exercise of options granted in a prior year.
10. Other Reserves
Capital
redemp- Hedging Total
tion Merger Effective-ness Other Other
reserve reserve reserve reserve reserves
EUR000 EUR000 EUR000 EUR000 EUR000
Balance at 30 September 2016 (171) 106,707 - 885 107,421
========== ========= ================ ========= ==========
Issue of subsidiary shares
to non-controlling interests 319 - - 6,192 6,511
Issue of subsidiary shares
to Group companies - - - (576) (576)
Other Comprehensive Income - - 104 - 104
Balance at 31 March 2017 148 106,707 104 6,501 113,460
========== ========= ================ ========= ==========
Issue of subsidiary shares
to non-controlling interests - - - (3,316) (3,316)
Other Comprehensive Income - - 97 - 97
Balance at 30 September 2017 148 106,707 201 3,185 110,241
The closing balance of the capital redemption reserve represents the amounts transferred from share capital on redemption of deferred shares in a previous period. The movement in the Year ending 31(st) March 2017 reflects an obligation which ceased following investment by BP Ventures into Tricoya Technologies Limited upon the finalisation of the full consortium.
The merger reserve arose prior to transition to IFRS when merger accounting was adopted.
The hedging effectiveness reserve reflects the total accounted for under IFRS 9 in relation to the Tricoya segment (note 1).
The other reserve represents the amounts received for subsidiary share capital from non-controlling interests (note 11).
11. Transactions with non-controlling interests
In the period ended 31 March 2017:
On 29 March 2017 and earlier in the prior financial year, TTL issued Series A Preference shares and transferred Ordinary shares to non-controlling interests for consideration of EUR15.79 million, resulting in the following non-controlling shareholdings:
BP Ventures (9.0%), Medite (12.1%), BGF, (2.8%), Volantis (1.5%)
On 29 March 2016, Tricoya Ventures UK Limited ('TVUK') issued Ordinary shares to non-controlling interests for consideration of EUR3.26 million, resulting in the following shareholdings:
BP Chemicals (30%), Medite (8.2%)
The total carrying amount of the non-controlling interests in TTL and TVUK at 31 March 2017 was EUR12.62 million.
In the period ended 30 September 2017:
On 5 September 2017, TTL issued 284,716 shares to Titan Wood Limited. As a result the non-controlling interests shareholdings were amended to:
BP Ventures (8.9%), Medite (12.0%), BGF, (2.8%), Volantis (1.5%)
On 20 September 2017, Tricoya Ventures UK Limited ('TVUK') issued Ordinary shares to non-controlling interests for consideration of EUR11.50 million, resulting in no change to shareholdings.
The total carrying amount of the non-controlling interests in TTL and TVUK at 30 September 2017 was EUR22.57 million.
The Group recognised an increase in other reserves as summarised below.
Transactions with non-controlling Unaudited Unaudited Audited
interests
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2017 2016 2017
EUR'000 EUR'000 EUR'000
Opening balance 7,077 - 885
Carrying amount of non-controlling
interests issued (14,814) 885 (12,702)
Consideration paid by non-controlling
interests 11,498 - 19,123
Share issue costs relating
to non-controlling interests - - (229)
Excess of consideration paid
recognised in Group's equity 3,761 885 7,077
12. Events occurring after the reporting period
On 6 October 2017, TVUK issued further shares for the consideration of EUR7.6m. EUR4.7m was contributed by TTL with EUR2.3m contributed by BP Chemicals and EUR0.6m contributed by Medite (see note 6).
Independent review report to Accsys Technologies PLC
Report on the consolidated interim financial statements
Our conclusion
We have reviewed Accsys Technologies PLC's consolidated interim financial statements (the "interim financial statements") in the interim results for the six months ended 30 September 2017 of Accsys Technologies Plc for the 6 month period ended 30 September 2017. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.
What we have reviewed
The interim financial statements comprise:
-- the consolidated interim statement of financial position as at 30 September 2017; -- the consolidated interim statement of comprehensive income for the period then ended; -- the consolidated interim statement of cash flows for the period then ended; -- the consolidated interim statement of changes in equity for the period then ended; and -- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim results for the six months ended 30 September 2017 have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.
As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim results for the six months ended 30 September 2017, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim results for the six months ended 30 September 2017 in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements.
Our responsibility is to express a conclusion on the interim financial statements in the interim results for the six months ended 30 September 2017 based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the AIM Rules for Companies and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim results for the six months ended 30 September 2017 and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
21 November 2017
a) The maintenance and integrity of the Accsys Technologies PLC website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim financial statements since they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGGPUGUPMPPG
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November 22, 2017 02:01 ET (07:01 GMT)
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