We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Applied Graphene Materials Plc | LSE:AGM | London | Ordinary Share | GB00BFSSB742 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAGM
RNS Number : 9115U
Applied Graphene Materials PLC
03 April 2019
3 April 2019
Applied Graphene Materials plc
("Applied Graphene Materials", "the Group" or "the Company")
Interim results for the six months ended 31 January 2019
Applied Graphene Materials, the producer of specialty graphene materials, is pleased to announce its interim results for the six months ended 31 January 2019.
Highlights
Operational:
-- Finalising the terms of the Hycote product launch by James Briggs Limited (JBL)
-- Scale-up trials continuing with Applied Nano Systems (ANS) for a graphene-loaded coating system
-- New anti-corrosion data developed, widely presented and exhibited to ensure AGM remains a leader in innovation in coatings and maximises opportunities to establish new commercial collaborations. Positive feedback received from the sector
-- NATEP collaborative development programme focusing on enhancement of fire-retardant materials in aircraft and mass transit markets has seen positive progress in performance testing and manufacturability trials
-- Structural Ink trials producing useful performance gains in composites
-- Airbus Space and Defence (Airbus) qualification nearing completion and is close to first order commitment
-- Increase in presence as global graphene community member - signed a Memorandum of Understanding and developed links with the National Graphene Institute and the Graphene Engineering Innovation Centre and joined The Graphene Council and the Industry Council of The National Graphene Association
Strategic:
-- New Executive team in place focused on accelerating commercial momentum -- Extensive strategic review of the business completed and commercial strategy refined -- Pragmatic review of revenue pipeline against likelihood of success -- Focus on converting our 120 active engagements towards meaningful revenues -- Seeking to appoint distributors to increase channels to market for standard products -- Greater presence in the graphene market as a key influencer
Financial:
Hot Features
Premium
Loss of GBP2.2 million (2018: loss
-- EBITDA* of GBP2.0 million)
Loss of GBP2.4 million (2018: loss
-- Loss before tax of GBP2.3 million)
-- Cash at bank GBP8.2 million (2018: GBP12.0 million)
Loss of 4.4 pence per share (2018:
-- Basic and diluted EPS loss of 6.4 pence).
* EBITDA comprises loss on ordinary activities before interest, tax, exceptional costs, depreciation and amortisation.
Adrian Potts, Chief Executive Officer, commented:
"We continue to make positive progress with providing robust technology solutions for our key focus market of coatings technology. Whilst the pace of such progress is not always as rapid as we would like, this is reflective of the intensity, breadth and depth of engagement with multiple customers and the length of time it often takes to formulate a solution and then test it. This can often last six months or more in the case of an iterative effort. We are determined to provide robust, repeatable graphene-based technical solutions in conjunction with our customers as a key means of securing long term business opportunities and creating line-of-sight to revenue.
Our strategy and expected milestones in the next 12 months include:
- Significant sales development as a result of existing pipeline engagements transitioning to repeat customers;
- Launch of customer products containing AGM graphene dispersion solutions, principally in the coatings sector;
- Airbus completion of satellite builds with AGM thermal adhesives on board;
- Maturing pipeline customers completing their iterative testing, product reviews and launching products;
- Technology development efforts bringing forth platform solutions for customer engagement in the broader coatings space - both for ever-harsher conditions and in more environmentally friendly water-based coatings systems; and
- Increasing routes to market through distribution agreements for standard products.
I am pleased with the progress achieved over the last six months, albeit that the timing of certain revenues is behind our previous expectations and look forward to the future with confidence as we focus on increasing the momentum in the business."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Applied Graphene Materials' results presentation, with audio commentary, is expected to be made available on its website at http://www.appliedgraphenematerials.com in due course.
For further information, please contact:
Applied Graphene Materials Adrian Potts, Chief Executive Officer David Blain, Chief Financial Officer +44 (0) 1642 438 214 N+1 Singer Richard Lindley / Justin McKeegan / Mia Gardner +44 (0) 207 496 3000 Hudson Sandler Charlie Jack / Emily Dillon +44 (0) 207 796 4133
Notes to Editors
Applied Graphene Materials works in partnership with its customers using its knowledge and expertise to provide bespoke graphene dispersions and formats to deliver enhancements and benefits for a wide range of applications. The Group's strategy is to target commercial applications in three core markets: coatings, composites and functional materials.
The Group has developed proprietary bottom-up processes which are capable of producing high purity graphene nanoplatelets using a continuous process. The manufacturing process is based on sustainable, readily available raw materials and therefore does not rely on the supply of graphite, unlike a number of other graphene production techniques. Applied Graphene Materials owns the intellectual property and know-how behind this process.
Applied Graphene Materials was founded by Professor Karl Coleman in 2010 with its operations and processes based on technology that he initially developed at Durham University. The Group was admitted to AIM in November 2013, raising GBP11 million, and is based at the Wilton Site on Teesside. In January 2016 the Group raised GBP8.5m to support its ongoing activities and in October 2017 the Group raised a further GBP9.8m.
Business review
with Adrian Potts
Overview
I have now completed my first six months as CEO of AGM and I am pleased with the overall progress we have made during this period. David Blain joined AGM as CFO in mid-October 2018 and he has proved to be a valuable addition to the team. I split my time between the USA and UK allowing a deeper level of engagement with customers in both regions, with a strong focus on helping progress our collaborations towards commercial relationships. This is often an in-depth process and requires significant time to secure the best solution possible with the integration of graphene dispersions into customer formulations.
We have undertaken an extensive review of the business and its strategy and have a clear vision for the future of AGM. We are focused on accelerating the commercial momentum in the business.
There are now a growing number of graphene manufacturers around the world, each producing a product with a slightly different range of characteristics reflecting their specific manufacturing processes. AGM's graphene is particularly suited to our key target market, coatings technology, because of its particular set of physical properties which can impart barrier, anti-corrosion, conductivity and mechanical performance. We are focused on delivering revenue in this market as we engage and collaborate with customers and continue to generate increasingly compelling data proving our products' ability to improve the performance of their primary coatings and the life of the coated article.
We have now developed a range of graphene products with different specifications suited for coatings applications and are extending this range further to suit developing coatings chemistry solutions. We also remain focused on the composites market, where we have developed meaningful collaborations with industry players and continue to extend our offer. Our commercial engagements involve rigorous, extensive and lengthy testing by our partners as well as our own testing in house, and we are seeing promising results.
It is very challenging to effectively transfer the properties of graphene into a host material ensuring a high quality of dispersion to enable the desired enhancements - but it is something we are delivering on a repeatable basis:
-- resistance to diffusion (in a barrier system); -- resistance to corrosion (in a paint); -- enhanced strength (in a plastic or composite); or -- conductive qualities (in an adhesive or ink).
We have achieved an industry-leading position through a focus on developing our dispersion and application IP, and engaging closely with customers to ensure our dispersions truly work well in their resin systems, supported by data from our ongoing in house testing. This gives us a significant edge in the quality and depth of our technical engagement, in that we are able to clearly guide customers through the process of graphene integration into their process methodology - effectively making disruptive technology accessible. Customers can be wary of introducing new materials into their production lines and this results in extensive work programmes to check the performance of our graphene products and also means that customers can be in the development pipeline for considerable lengths of time. We believe that a number of testing programmes are nearing completion, with further commercial sales agreements expected in the near future, with a total of seven collaborations in the final commercial engagement stage of development.
We have worked with many companies over the last three to four years and the current pipeline of active customer programmes stands at over 120, following an in-depth review regarding opportunity for success. This extensive and wide-ranging work has led to AGM becoming a leader in the field of graphene-containing barrier coatings. This area is now our main focus of activity although we will not lose sight of our other areas of expertise and will continue to develop the collaborations we have in the composites and functional fluids industries. Our main focus is on converting our existing engagements into commercial supply agreements. Alignment to this purpose throughout our commercial, technical, manufacturing and quality groups gives us confidence that our substantial pipeline can deliver future revenue, although in some cases results may be slow given the nature of the testing.
In support of the coatings industry and to broaden the impact of our messaging to the industry, we have purposely presented at prestigious technical conferences including the European Coatings Show and Corrosion 2019 by the National Association of Corrosion Engineers in the USA. We will also present to the American Coatings Association Technical Conference and Aluminium 2000 World Congress in April. Presenting our solutions for both multi-layer coatings fully representative of real applications, as well as specific solutions for anti-corrosion primers using Genable(R) products, has been well received with positive feedback and further encouraging new customer engagement. It is this rigorous development and presentation of relevant data that creates the new opportunities to support future growth.
As part of our detailed review of the business during the period, we also assessed our routes to market. The introduction of the Genable(R) product range (standard dispersions to cater for the needs of the paints, coatings, composites and thermal pastes industries) in 2018 has now allowed us to decide to approach distributors to expand our channels to market and we are already in discussion with various potential distributors.
We are keen to ensure our investors and customers are kept updated about the positive progress we are making. We will use a broader range of platforms to do this including greater use of RNS Reach, trade press releases and social media to communicate more non-regulatory news items.
Commercial progress
Pipeline update overview
The number of programmes in the pipeline at 31 January 2019 and the movements since 31 July 2018 are as follows:
At 31 January
2019 Stage of development
Agreement Initial Repeat testing Final product Final commercial Total
on scope testing for consistency trials engagement
of sampling and and review formulation
and engagement interpretation of results and
Approval time of results specification
---------------- ----------------- ----------------- ----------------- ------
Short 11 8 5 4 4 32
Medium 18 25 13 2 3 61
Long 7 12 1 - - 20
Technology
scouting
or time frame
unclear
currently 6 1 1 - - 8
42 46 20 6 7 121
================ ================ ================= ================= ================= ======
Change since
31 July 2018
Short 6 (5) (5) 2 - (2)
Medium 1 (1) 3 (3) 1 1
Long (2) (3) (2) - - (7)
Technology
scouting
or time frame
unclear
currently 4 1 1 - - 6
9 (8) (3) (1) 1 (2)
================ ================ ================= ================= ================= ======
We have reviewed the overall pipeline of ongoing customer engagements, including an in-depth review of opportunity for success. Inevitably, these are at varying levels of technical maturity as we test our products in customer systems which have different levels of complexity. It is encouraging to see general progress across these engagements although, as noted above, the process of tailoring an application to ensure it achieves the desired performance gain as a cost-effective solution is an intensive process involving our Tech team as well as commercial engagement.
Coatings sector
With our primary focus on coatings technology as the key opportunity to deliver revenue and where we have invested heavily in technical resources and generation of supporting data, the pipeline for coatings opportunities can be represented thus:-
At 31 January
2019 Stage of development
Agreement Initial Repeat testing Final product Final commercial
on scope testing for consistency trials engagement
of sampling and and review formulation
and engagement interpretation of results and
Approval time of results specification Total
---------------- ----------------- ----------------- ----------------- ------
Short 9 5 3 1 2 20
Medium 16 21 9 1 1 48
Long 7 10 1 - - 18
Technology
scouting
or time frame
unclear
currently 4 1 - - 5
36 36 14 2 3 91
================ ================ ================= ================= ================= ======
James Briggs Ltd (JBL)
We continue to finalise the terms of the Hycote product launch by JBL. As part of its range reformulation and upgrade to suit latest vehicle colours, the graphene-containing primer is expected to be launched in H2 FY19. This is a little behind previous guidance, which will have an impact on near term revenues from this project, although the longer term volume proposition remains strong. As recently noted by Jim Miller, JBL's Commercial Director, the two year development collaboration between JBL and AGM has resulted in JBL's first products coming to fruition for the automotive market. Initial feedback from the market has been very positive, with customers keen to see innovative products with genuine substantive performance improvements, which these products deliver through utilisation of AGM's graphene dispersion technology. Further sales potential is also expected beyond the Hycote launch, with uptake in the retail sector.
HMG
HMG is the UK's largest independent paint manufacturer. Initial performance testing and product release to HMG's customer Brit-Tipp resulted in excellent performance feedback regarding corrosion performance in their light commercial vehicles. Seeking a broader and deeper understanding of the performance possibilities for graphene in its coatings, HMG has elected to continue testing. AGM is engaged in a technical evaluation in HMG's commercial vehicle primer systems and this is expected to deliver a yet more robust technology solution for future product offerings towards the end of 2019.
Jonathan Falder from HMG Paints Ltd in Manchester said: "We have been pleased with initial performance results in our commercial vehicle applications. Since that time, we have been impressed with the potential for the use of graphene in anti-corrosion coating applications for Industrial and commercial vehicle business and have committed to a deeper programme with AGM to determine the extent of performance gains we can achieve with this technology. We continue to be excited by the prospects and are pleased to have AGM as our partner in this important product development project".
Positive engagements continue with a number of other customers for steel anti-corrosion applications, the majority of which are covered by NDA arrangements. Our recent technology sharing programme at Coatings conferences has yielded a positive number of new engagements.
We also continue to make significant strides forward in coatings technology in the aerospace sector at ten undisclosed accounts. Corrosion control of aluminium substrates is a highly complex matter requiring high performance and safe solutions, given the end-use is often the aerospace sector. The integration of graphene into aluminium primer coatings is yielding positive performance results with a number of these customers leading to next stages of the adoption testing process becoming apparent. In support of this industry sub-sector, we will also present our own Genable(R) solutions for aluminium corrosion in April 2019.
Applied Nano Systems (ANS) A development effort with ANS has led to a graphene-loaded aerosol spray product. In this application, the product offers clear advantages to the end user as a low-slip/low-friction coating. As a water-based solution, this product also represents a milestone in environmentally friendly coatings solutions. Scale-up trials are continuing with this customer. ANS, a Swedish company specialising in surface treatment methods for tribological applications, has started to deploy AGM graphene in their polymer-bonded coating systems. ANS Tricolit(R) GO is one of the first high-performance direct-to-metal water-based graphene-fortified coating systems on the market. This product also represents a milestone in environmentally friendly coatings solutions. ANS is also engaged in a development programme on the use of functionalised graphene as reactive cross-linker. Scale up trials are continuing.
AGM's Genable(R) range of dispersions is a key enabler for ease of integration of graphene into a host material - be it a paint formulation, a resin system or other polymer types. With a standardised range of dispersions, customers can confidently procure a repeatable product for batch to batch consistency. We also of course continue to produce custom dispersions to order to suit customer needs and to support the best opportunity for success in a customer's product. With an in-depth appreciation of both dispersion chemistry and application awareness for how to add graphene to the end formulation, we are well placed to see success in the markets we are operating in.
Composites sector
Fire retardant resins / Composites Evolution
Under a NATEP collaborative development programme focused on the mechanical properties enhancement of fire-retardant materials for interiors in aircraft and mass transit markets, we have seen positive progress in both performance testing and all-important manufacturability trials using prepreg methods. Anticipation is high that this graphene-enhanced solution will result in a deliverable practical solution for this important market.
Magna
Following very positive early engagement with Magna, including the demonstration of a tailgate fortified with AGM's graphene at the JEC conference and a growing confidence in the potential for success in its composite materials, coatings for composites and polymers technology, changes within Magna have slowed down the pace of further testing with it.
Structural Ink(R) Our graphene printing technology, which creates the possibility to selectively deposit graphene materials in a composite structure to maximise performance, whilst minimising weight, continues to produce outstanding gains in a key parameter - fracture toughness.
We continue to pursue a broad performance uplift in a range of materials and are engaged with customer testing of printed carbon fibre prepreg materials which are cured and tested in specific ways.
Further to this promising progress, we are reviewing scope to develop our printing platform to cover other market applications and potential with the technology. An example would be in the area of conductive inks to enable delivery of specific properties - either thermal or electrical enhancements to a broader range of materials through the specific placement of graphene materials where they are needed.
Functional materials
Airbus
The qualification for our thermal paste adhesive, Genable(R) 4400, with Airbus Space and Defence is approaching completion and we have line of sight to first order commitment, which when fulfilled will put our product onto satellite platforms. Clearly, the approval process for such an application involves rigorous and lengthy testing to prove such an innovative new technology. The key application benefits with this material are found in a combination of high thermal conductivity, low density and good adhesion properties. Expected timeline to completion of work at the customer will put first orders in H2 FY19/H1 2020.
Genable(R) 4400 We are also seeing interest in the product outside of Airbus and are pleased to note the near term launch with an undisclosed customer of this product under its own branding - now intended for April 2019. It is pleasing to see a wider uptake with this product technology.
Technical and manufacturing capabilities
Alignment throughout the organisation
As we focus on the delivery of coatings technology, a key enabler is the transition from "development" to "standard" to "full production" dispersed materials. An active programme is in place to achieve this milestone across the breadth of the Genable(R) product range. Such activity enables a high level of production readiness. The technical and manufacturing arms of our business are fully focused on this objective in support of delivering commercial revenue.
Latest technology developments Application technology development is key to leadership in this emerging innovative technology space. Having invested heavily in the development of the Genable(R) stable dispersions range using our graphene and the generation of supporting data for the mid-range anti-corrosion market, we continue to focus on pushing the boundaries yet further whilst maximising engagement in this sub-sector. The objective is to create ease-of-use solutions to these technology opportunities such that the adoption of graphene is less of a challenge.
The launch of a truly environmentally friendly alternative to zinc-based additives for anti-corrosion primers represents a major achievement. Reflecting this, the Company secured a nomination as a finalist in the Materials Performance Corrosion Innovation Awards 2019 which acknowledges the leaders advancing understanding and development of global corrosion technology. It is run in parallel with NACE International where we recently presented our latest work.
Further development effort has been focused in three areas:
- Meeting the needs of the harsher "C4 and C5" anti-corrosion markets with novel graphene-based solutions.
This work is focused on real paint systems and uses a graphene "tie-coat" to control diffusion through the integral coating and extend the onset of corrosion. Applications for such technology represent significant volumes of paint. AGM is proud to have presented this technology at the prestigious European Coatings Conference in March 2019. We also presented our unique solutions at Corrosion 2019 in March, and will shortly present them at The American Coatings Association Technology conference and Aluminium 2000 World Congress (both in April 2019)
- Solutions for yet more harsh "CX" anti-corrosion environments. This will involve significant additional testing as we seek to access this market sector. Based on current outstanding performance trends from current testing we are confident that graphene has a central part to play in future coatings solutions for harsh environments.
- Developing solutions for environmentally friendly water-based paints and coatings for barrier performance enhancement. Significant challenges exist in this technology area related to the incorporation of graphene nanomaterials into water-based emulsions. In achieving a solution to this formulating challenge, the route to market is potentially faster, based on less onerous testing regimes.
Progress on patents
We continue to add value through our IP portfolio, principally in coatings and dispersions applications.
Taking a leading position
In seeking to engage on a broader footprint and to be in a more prominent leadership role in the graphene space given our unique and maturing technology platform, we are pleased to have signed a Memorandum of Understanding with the Graphene Engineering Innovation Centre (GEIC) at the University of Manchester. This is expected to significantly strengthen ties with the National Graphene Institute (NGI) and the University and further develop graphene technology in the UK. We are pleased to have the opportunity to work much more closely with these centres of excellence.
We have accepted an invitation to join the Industry Council of The National Graphene Association in the USA in order to be at the centre of development of international standards and overcoming challenges of mass-scale adoption of graphene in different industrial segments such as composites and coatings. We will be presenting at the NGA's Graphene Summit in May 2019 in Washington DC, and will have the opportunity to input to policy and environmental standards development for this new technology. We have also joined The Graphene Council and anticipate the opportunity to present webinars such as graphene solutions for anti-corrosion coatings to an ever widening audience, as well as benefitting from the broader networking opportunity within these organisations.
Regulatory
An area of significant focus, which again requires positive leadership in a new materials industry, is the development of regulatory control standards. We are lead partner in the EU REACH consortium on graphene and are well advanced in accreditation in Asia. TSCA registration is also being pursued as part of a broader platform of approval on a global basis. We are further engaged with the UK HSE on development of understanding of nanotechnology in the workplace.
Local community
We value our local community and we have agreed to become an ambassador for Redcar and Cleveland to promote it as a great place to live and do business.
Outlook
We continue to make positive progress in robust technology solutions for our key focus market of coatings technology. Whilst the pace of such progress is not always as rapid as we would like, this is reflective of the intensity, breadth and depth of engagement with multiple customers and the length of time it can take to formulate a solution and then test it, often for six months or more in the case of an iterative process.
Our strategy and expected milestones in the next twelve months are:
- significant sales development as a result of existing pipeline engagements transitioning to repeat customers;
- launch of customer products containing AGM graphene dispersion solutions; - Airbus completion of satellite builds with AGM thermal adhesives on board; - maturing pipeline customers completing their reviews and launching products;
- technology development efforts bringing forth platform solutions for customer engagement; and
- Increasing routes to market through distribution agreements for standard products.
I am pleased with the progress achieved over the last six months, albeit that the timing of certain revenues is behind our previous expectations and look forward to the future with confidence as we focus on increasing the momentum in the business.
Adrian Potts
Chief Executive Officer
3 April 2019
Financial review
with David Blain
Revenue
Revenue for the period was GBP26,000 (2018: GBP54,000) arising from the supply of production orders of graphene and evaluation quantities of graphene to commercial partners.
Other income
Other income, which comprises grant income, was GBP23,000 (2018: GBP30,000). Grants received related to funding for the development of new graphene applications, with a small amount for the creation of new jobs or the purchase of assets.
Cost of sales
Cost of sales has increased as a result of increased rent, labour and materials used in preparing the plant for commercial production.
Loss on ordinary activities before tax
A loss on ordinary activities before tax of GBP2,374,000 (2018: loss of GBP2,291,000) was recognised. The prior year loss includes exceptional costs of GBP205,000 mainly connected to fees paid in relation to the issue of new shares.
Loss on ordinary activities before interest, tax, exceptional costs, depreciation and amortisation (EBITDA)
EBITDA for the Group increased from a loss of GBP1,952,000 in 2018 to a loss of GBP2,233,000 for the period ended 31 January 2019. The losses incurred in the period relate to the day to day costs of the business and include the ongoing costs associated with the technical input provided to our commercial partners as they look to evaluate and incorporate graphene into their product lines.
Exceptional costs
Exceptional costs recognised in the period were GBPnil (2018: GBP205,000). The prior year costs principally relate to fees paid in relation to the issue of new shares in that period.
Net finance income
Net finance income for the period was GBP34,000 (2018: GBP20,000).
Loss on ordinary activities before tax, exceptional costs and amortisation (PBTA)
PBTA for the period increased from a loss of GBP2,086,000 in 2018 to a loss of GBP2,374,000 for the period ended 31 January 2019.
Tax
R&D tax credits for the current year are accrued on a monthly basis resulting in a credit of GBP200,000 for the period. In previous years the credit was recognised in full at the year end. The tax credit recognised in respect of the previous financial year arises from R&D tax credits.
Earnings per share
Basic earnings per share was a loss of 4.4 pence per share (2018: loss of 6.4 pence per share). Adjusted basic earnings per share (before exceptional costs) was a loss of 4.4 pence per share (2018: loss of 5.8 pence per share).
Dividend
No dividend has been proposed for the period ended 31 January 2019 (2018: GBPnil).
Cash flow
Net cash used in operations was GBP2,173,000 (2018: GBP1,998,000).
Capital expenditure of GBP57,000 (2018: GBP132,000) has been incurred in the period mainly relating to the development of the production process and related production assets. Net proceeds arising from the issue of shares totalled GBPnil (2018: GBP9,369,000).
Balance sheet
Net assets have reduced to GBP10,087,000 (2018: GBP13,284,000), principally reflecting the trading loss for the period.
Cash at bank at 31 January 2019 was GBP8,246,000 (2018: GBP11,961,000). Monies are on deposit with a small number of financial institutions for time periods ranging between instant access and up to 95 days in maturity.
Accounting policies
The Group's consolidated financial information has been prepared in accordance with International Financial Reporting Standards as adopted in the EU. The Group's significant accounting policies, which are consistent with those set out in the audited financial statements for the year ended 31 July 2018, have been applied consistently throughout the period. For this period, we have calculated the share based payment charge using the Monte Carlo method rather than the Black-Scholes model which has been used in prior years. This is to reflect that the option awards are subject to market based vesting conditions and therefore the Monte Carlo method is more accurate.
Principal risks and uncertainties
Risk management forms an integral part of the business planning and review cycle. The principal risks and uncertainties remain unchanged from those set out on pages 22 to 25 of the Annual Report for year ended 31 July 2018.
Forecasting timing and quantum of revenues at this stage of development continues to be a key difficulty faced by the Company as this is heavily dependent upon the product development cycle of our customers and, therefore, is not under our control.
Cautionary statement
The Business and Financial reviews have been prepared for the shareholders of the Company, as a body, and no other persons. Their purpose is to assist shareholders of the Company in assessing the strategies adopted by the Group and the potential for those strategies to succeed, and for no other purpose. The Business and Financial reviews contain forward-looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forward-looking statements in the Business and Financial reviews will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation.
David Blain
Chief Financial Officer
3 April 2019
Consolidated income statement and statement of comprehensive income
for the six months ended 31 January 2019
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
Note GBP'000 GBP'000 GBP'000
------------------------------------------- ---- ---------- ---------- ----------
Revenue 5 26 54 77
Other income 23 30 126
------------------------------------------- ---- ---------- ---------- ----------
49 84 203
Cost of sales (231) (120) (250)
------------------------------------------- ---- ---------- ---------- ----------
Gross loss (182) (36) (47)
Operating expenses (2,226) (2,275) (4,555)
------------------------------------------- ---- ---------- ---------- ----------
EBITDA (2,233) (1,952) (3,984)
Exceptional costs - (205) (307)
Depreciation of tangible fixed assets (175) (154) (311)
------------------------------------------- ---- ---------- ---------- ----------
Operating loss (2,408) (2,311) (4,602)
Net finance income 34 20 57
------------------------------------------- ---- ---------- ---------- ----------
PBTA (2,374) (2,086) (4,238)
Exceptional costs - (205) (307)
------------------------------------------- ---- ---------- ---------- ----------
Loss on ordinary activities before tax 5 (2,374) (2,291) (4,545)
Tax on loss on ordinary activities 3 200 - 1,046
------------------------------------------- ---- ---------- ---------- ----------
Loss for the period attributable to equity
shareholders (2,174) (2,291) (3,499)
Other comprehensive income - - -
------------------------------------------- ---- ---------- ---------- ----------
Total comprehensive loss (2,174) (2,291) (3,499)
------------------------------------------- ---- ---------- ---------- ----------
Earnings per share (pence per share)
Basic 6 (4.4) (6.4) (8.2) Diluted 6 (4.4) (6.4) (8.2) ------------------------------------------- ---- ---------- ---------- ----------
EBITDA comprises loss on ordinary activities before interest, tax, exceptional costs, depreciation and amortisation.
PBTA comprises loss on ordinary activities before tax, exceptional costs and amortisation.
Consolidated statement of changes in shareholders' equity
for the six months ended 31 January 2019
Share Share Merger Retained Unaudited
capital premium reserve earnings total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------- ------- ------- -------- ---------
As at 31 July 2017 446 18,641 1,231 (14,250) 6,068
Comprehensive loss - - - (2,291) (2,291)
IFRS 2 share based payments - - - 138 138
Issue of shares (net) 543 8,826 - - 9,369
---------------------------- ------- ------- ------- -------- ---------
As at 31 January 2018 989 27,467 1,231 (16,403) 13,284
Comprehensive loss - - - (1,208) (1,208)
IFRS 2 share based payments - - - 39 39
Issue of shares (net) - 6 - - 6
---------------------------- ------- ------- ------- -------- ---------
As at 31 July 2018 989 27,473 1,231 (17,572) 12,121
Comprehensive loss - - - (2,174) (2,174)
IFRS 2 share based payments - - - 140 140
Issue of shares (net) - - - - -
---------------------------- ------- ------- ------- -------- ---------
As at 31 January 2019 989 27,473 1,231 (19,606) 10,087
---------------------------- ------- ------- ------- -------- ---------
Consolidated balance sheet
as at 31 January 2019
Unaudited Unaudited Audited
31 January 31 January 31 July
2019 2018 2018
Note GBP'000 GBP'000 GBP'000
------------------------------ ---- ---------- ---------- --------
Assets
Non-current assets
Intangible assets 90 139 78
Property, plant and equipment 1,763 1,913 1,881
------------------------------ ---- ---------- ---------- --------
1,853 2,052 1,959
------------------------------ ---- ---------- ---------- --------
Current assets
Inventories 52 38 56
Trade and other receivables 743 168 612
Cash 8,246 11,961 10,443
------------------------------ ---- ---------- ---------- --------
9,041 12,167 11,111
------------------------------ ---- ---------- ---------- --------
Liabilities
Current liabilities
Trade and other payables (807) (935) (949)
------------------------------ ---- ---------- ---------- --------
(807) (935) (949)
------------------------------ ---- ---------- ---------- --------
Net assets 10,087 13,284 12,121
------------------------------ ---- ---------- ---------- --------
Shareholders' equity
Called up share capital 8 989 989 989
Share premium account 27,473 27,467 27,473
Merger reserve 1,231 1,231 1,231
Retained earnings (19,606) (16,403) (17,572)
------------------------------ ---- ---------- ---------- --------
Equity shareholders' funds 10,087 13,284 12,121
------------------------------ ---- ---------- ---------- --------
Consolidated cash flow statement
for the six months ended 31 January 2019
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
Note GBP'000 GBP'000 GBP'000
--------------------------------------------- ---- ---------- ---------- ----------
Operating activities
Net cash used in operations 7 (2,173) (1,998) (4,005)
Net finance income 45 15 53
Tax received - - 631
--------------------------------------------- ---- ---------- ---------- ----------
Net cash used in operating activities (2,128) (1,983) (3,321)
--------------------------------------------- ---- ---------- ---------- ----------
Investing activities
Purchase of intangible assets (12) (1) (62)
Purchase of property, plant and equipment (57) (132) (257)
--------------------------------------------- ---- ---------- ---------- ----------
Net cash used in investing activities (69) (133) (319)
--------------------------------------------- ---- ---------- ---------- ----------
Financing activities
Net proceeds from issue of Ordinary shares - 9,369 9,375
--------------------------------------------- ---- ---------- ---------- ----------
Net cash generated from financing activities - 9,369 9,375
--------------------------------------------- ---- ---------- ---------- ----------
Net (decrease)/increase in net cash and cash
deposits (2,197) 7,253 5,735
Net cash and cash deposits at 31 July 2018 10,443 4,708 4,708
--------------------------------------------- ---- ---------- ---------- ----------
Net cash and cash deposits at 31 January
2019 8,246 11,961 10,443
--------------------------------------------- ---- ---------- ---------- ----------
Net cash and cash deposits include:
---------------------------------------------- ----- ------ ------
Cash (maturity less than 95 days) 8,246 11,961 10,443
---------------------------------------------- ----- ------ ------
Net cash and cash deposits at 31 January 2019 8,246 11,961 10,443
---------------------------------------------- ----- ------ ------
Notes to the Interim Report
for the six months ended 31 January 2019
1 General information
The principal activity of Applied Graphene Materials plc is the manufacture, dispersion and development of applications for graphene. The Group operates principally in the United Kingdom.
The Company is incorporated and domiciled in the United Kingdom and its registered number is 8708426. The address of the registered office is The Wilton Centre, Redcar, Cleveland TS10 4RF. The Company was incorporated on 27 September 2013.
The interim financial information was approved for issue on 3 April 2019.
2 Basis of accounting
The consolidated interim financial information for the period ended 31 January 2019 has been presented under the historical cost accounting convention, as modified by financial assets and liabilities at fair value through the income statement and share based payments at fair value, and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, IFRIC interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated interim financial information has been prepared on a going concern basis.
The accounting policies used in the consolidated interim financial information are consistent with those set out in the audited financial statements for the year ended 31 July 2018, other than the method of calculation of the share based payment charge. For this period, we have calculated the share based payment charge using the Monte Carlo method rather than the Black-Scholes model which has been used in prior years. This is to reflect that the option awards are subject to market based vesting conditions and therefore the Monte Carlo method is more accurate.
The Group has adopted IFRS 15 "Revenue from Customer Contracts" and IFRS 9 "Financial Instruments" in preparing this Interim Report and will also apply these standards in preparing the financial statements for the year ending 31 July 2019. Neither standard has a material impact on the Group's financial statements.
Further IFR standards or interpretations may be issued that could apply to the Group's financial statements for the year ending July 2019. If any such amendments, new standards or interpretations are issued, then these may require the consolidated financial information provided in this report to be changed. The Group will continue to review its accounting policies in light of emerging industry consensus on the practical application of IFRS.
The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, events or actions, actual events ultimately may differ from those estimates.
The consolidated interim financial information does not include all financial risk management information and disclosures required in the annual financial statements.
The consolidated interim financial information for the six months ended 31 January 2019 and for the six months ended 31 January 2018 contained within the Interim Report does not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006 and is unaudited. The comparative figures for the year ended 31 July 2018 have been extracted from the audited financial statements, on which the Company's auditors have given an unqualified opinion.
3 Taxation
The Group has not recognised any tax assets in respect of trading losses arising in either the current financial year or accumulated losses in previous financial years. Research and development tax credits for the period up to January 2019 have been accrued after having taken into account the anticipated level of research and development work carried out in the period. The tax credit recognised in respect of the previous financial year arises from the receipt of R&D tax credits for the year up to July 2017 and an accrual for the year up to July 2018 taking into account the level of research and development work carried out during the year.
4 Dividends
No dividend has been proposed for the period ended 31 January 2019 (2018: GBPnil).
5 Segmental analysis
The Group currently has one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance. The Group's Chief Executive Officer has been identified as the CODM. Revenue and profits arising from that operating segment are the same as presented on the face of the consolidated income statement and statement of comprehensive income.
6 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during each period. The weighted average number of shares in issue during the period used in the calculation of basic earnings per share was as follows:
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
'm 'm 'm
----------------------------------------------------- ---------- ---------- ----------
Weighted average number of shares for basic earnings
per share 49.4 36.0 42.7
----------------------------------------------------- ---------- ---------- ----------
Adjusted earnings per share has been calculated so as to exclude the effect of exceptional costs including related tax charges and credits. Adjusted earnings used in the calculation of basic earnings per share reconciles to basic earnings as follows:
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------- ---------- ---------- ----------
Basic earnings (2,274) (2,291) (3,499)
Exceptional costs - 205 307
---------------------------------------------- ---------- ---------- ----------
Adjusted earnings (2,274) (2,086) (3,192)
---------------------------------------------- ---------- ---------- ----------
Earnings per share (pence per share)
Basic (4.4) (6.4) (8.2)
---------------------------------------------- ---------- ---------- ----------
Adjusted earnings per share (pence per share)
Basic (4.4) (5.8) (7.5)
---------------------------------------------- ---------- ---------- ----------
The Group was loss making for the periods ended 31 January 2019 and 31 January 2018 and also for the year ended 31 July 2018. Diluted loss per share has not been presented above as the effect of share options issued is anti-dilutive.
7 Notes to the cash flow statement
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
-------------------------------------------------------- ---------- ---------- ----------
Loss for the period attributable to equity shareholders (2,174) (2,291) (3,499)
Tax on loss (200) - (1,046)
Net finance income (34) (20) (57)
Depreciation of property, plant and equipment 175 154 311
Exceptional costs - 205 307
-------------------------------------------------------- ---------- ---------- ----------
EBITDA (2,233) (1,952) (3,984)
Depreciation of property, plant and equipment (175) (154) (311)
Exceptional costs - (205) (307)
-------------------------------------------------------- ---------- ---------- ----------
Operating loss (2,408) (2,311) (4,602)
Depreciation of tangible fixed assets 175 154 311
Disposal of intangible assets - - 121
IFRS 2 share based payments charge 140 138 177
(Increase)/decrease in net working capital (80) 21 (12)
-------------------------------------------------------- ---------- ---------- ----------
Net cash used within operations (2,173) (1,998) (4,005)
-------------------------------------------------------- ---------- ---------- ----------
8 Share capital
Unaudited Unaudited
number
of total
Ordinary
shares GBP'000
--------------------------------------------------- ---------- ---------
Allotted, called up and fully paid
At 31 July 2017 Ordinary shares of 2 pence each 22,290,763 446
Issued on 31 October 2017 27,138,617 543
--------------------------------------------------- ---------- ---------
At 31 July 2018 Ordinary shares of 2 pence each 49,429,380 989
At 31 January 2019 Ordinary shares of 2 pence each 49,429,380 989
--------------------------------------------------- ---------- ---------
On 31 October 2017, 27,138,617 Ordinary shares of 2 pence each were issued at a price of GBP0.36 per share to institutional and other investors.
9 Related party transactions
Transactions between Applied Graphene Materials plc and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Transactions with shareholders
The following transactions with shareholders of the Group were recorded, excluding VAT, during the period:
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
--------------------------------------------------- ---------- ---------- ----------
University of Durham (shareholder)
Staff secondment, consultancy and other fees 17 20 (4)
--------------------------------------------------- ---------- ---------- ----------
Top Technology Limited (controlled by shareholder)
Non-Executive fees and expenses 8 8 15
Corporate finance fees - 20 -
--------------------------------------------------- ---------- ---------- ----------
IP2IPO (shareholder)
Non-Executive Director expenses - - 1
--------------------------------------------------- ---------- ---------- ----------
Remuneration of key management personnel
The remuneration of the Directors and the key management personnel of the Group is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures:
Unaudited Unaudited Audited
6 months 6 months
to to year ended
31 January 31 January 31 July
2019 2018 2018
GBP'000 GBP'000 GBP'000
------------------------------------------------- ---------- ---------- ----------
Short term employee benefits (excluding bonuses) 357 338 705
Payments to third parties 8 8 15
IFRS 2 share based payments charge 140 138 84
------------------------------------------------- ---------- ---------- ----------
505 484 804
------------------------------------------------- ---------- ---------- ----------
10 Seasonality
The Group experiences no material variations in performance arising due to seasonality.
11 Availability of Interim Report
It is anticipated that the Interim Report will be sent to all shareholders on 10 April 2019. Electronic copies of the report will also be available on Applied Graphene Materials' website at www.appliedgraphenematerials.com.
Glossary of terms
Term Meaning
Anti-corrosion A type of coating made with neutral or slightly alkaline
pigments and a water resisting vehicle for use as a
primer on steel and other metals to prevent or inhibit
corrosion
--------------------------------------------------------------
Barrier system A method of preventing corrosion by using barrier materials
within the coating that restrict the movement of water
and other chemicals towards the metal surface
--------------------------------------------------------------
Coat/coating When used as a verb, "coat" means to cover or apply;
as a noun, the word signifies the amount of finishing
material applied to a surface during one or more applications
without a drying period between applications
--------------------------------------------------------------
Composites A material made up of resin and reinforcement
--------------------------------------------------------------
Conductive inks An ink that results in a printed object which conducts
electricity
--------------------------------------------------------------
Conductivity - electrical The degree to which a specified material conducts electricity,
calculated as the ratio of the current density in the
material to the electric field which causes the flow
of current
--------------------------------------------------------------
Conductivity - thermal The rate at which heat passes through a specified material,
expressed as the amount of heat that flows per unit
time through a unit area with a temperature gradient
of one degree per unit distance
--------------------------------------------------------------
Dispersion A mixture in which very small pieces of one substance
are scattered within another substance
--------------------------------------------------------------
Elasticity The property of a film that allows it to stretch or
otherwise change size or shape and return to its original
condition without breaking or rupturing
--------------------------------------------------------------
Fracture toughness Resistance to cracks, crazing or delamination resulting
from physical damage
--------------------------------------------------------------
Functional fluids Sustainable base oil products - enhanced with graphene
nanoplatelets - offer exceptional performance, and
friction and wear protection, especially for lubricants
and machining fluids used in automotive and industrial
applications
--------------------------------------------------------------
Mechanical Strength, hardness, toughness, elasticity, plasticity,
brittleness, ductility and malleability are mechanical
properties used as measurements of how materials behave
under a load
--------------------------------------------------------------
NATEP National Aerospace Technology Programme
--------------------------------------------------------------
Polymer A long-chain molecule, consisting of many repeat units
--------------------------------------------------------------
Prepreg A factory-made combination of reactive resins and reinforcing
fibres, plus other necessary additive chemicals, ready
to be moulded
--------------------------------------------------------------
Primer A substance used as a preparatory coat on wood, metal
or canvas, especially to prevent the absorption of
subsequent layers of paint or the development of rust
--------------------------------------------------------------
Resin system A polymer with indefinite and often high molecular
weight and a softening or melting range that exhibits
a tendency to flow when subjected to stress
--------------------------------------------------------------
Substrate A material which provides the surface on which something
is deposited or inscribed
--------------------------------------------------------------
Thermal paste adhesive A thermally conductive paste applied to mating surfaces
to bond them together by surface attachment in order
to transfer heat across the materials
--------------------------------------------------------------
Tie coat Paint specifically formulated for situations and conditions
to provide a transition from a primer or undercoat
to a finish coat. Tie coats are used to seal the surface
of a zinc-rich primer, to bond generically different
types of coatings, or to improve the adhesion of a
succeeding coating
--------------------------------------------------------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR UURKRKKASRAR
(END) Dow Jones Newswires
April 03, 2019 02:00 ET (06:00 GMT)
1 Year Applied Graphene Materials Chart |
1 Month Applied Graphene Materials Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
