Eden Research plc Half yearly Report

RNS Number : 1397F

Eden Research plc

23 September 2024

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

23 September 2024

 

Eden Research plc

("Eden" or "the Company")

 

Half Yearly Report

Eden Research plc (AIM: EDEN), a leader in sustainable biopesticide and biocontrol technology, announces its interim results for the six months ended 30 June 2024.

Financial highlights

·      Revenue for the period of £1.9m (H1 2023: £1.1m)

·      Product sales of £1.7m (H1 2023: £1.1m)

·      Operating loss for the period of £1.3m (H1 2023: £1.2m)

·      Cash and cash equivalents of £4.9m (H1 2023: £0.5m)

·      On track to meet 2024 market expectations for revenue and operating loss

Business highlights

 

Expanding regulatory approvals in key territories, including the US, new commercial agreement, and new product areas

 

·      Authorisation for Mevalone^® received in the key state of California

·      Mevalone^® authorised for use in new crops and fungal pathogens in Spain

·      140 insecticide field trials run by potential distribution partners so far in 2024, following significant interest in the evaluation of Eden's developmental insecticide

·      Authorisation for Mevalone^® received in Germany and Czechia (post period-end)

 

Corporate highlights

 

Strengthening of the Company's financial position and team to allow the business to grow apace

 

·      Eden named ESG Company of the Year at the prestigious 2024 Small Cap Network Awards in recognition of its commitment to environmental, social and governance matters and contribution to the green economy

·      Appointment of Derek McAllan as Non-executive Director and Chairman of the Audit Committee

·      Strengthening of the Commercial Team with the appointment of Humair Tariq as Global Commercial Lead and Daniel Mulas Garcia as Global Product and Marketing Lead

 

Lykele van der Broek, Chairman of Eden Research, commented:

 

"Eden continues to grow, as evidenced by increased sales of 65% compared to the first half of 2023 and product registrations received across target geographies. To support this growth and ensure the business can capture its significant future potential, we have expanded the team in the first half of the year, welcoming Humair Tariq as Global Commercial Lead, Daniel Mulas Garcia as Global Product and Marketing Lead and Ilshad Moulan as Head of Regulatory Affairs. We were also delighted to appoint Derek McAllan as Non-executive Director and Chairman of the Audit Committee.

 

In the background, the Company is working flat out developing novel formulations and commercialising products in order to fully exploit the vast bank of intellectual property and expertise that Eden has created over the past four years in particular, since it opened its laboratory facilities in mid-2020.

 

Be in no doubt, the potential for Eden is huge.

 

Aside from having a great team and a strong product portfolio, Eden is very much in the right place at the right time.

 

Regulators continue to restrict, or ban, existing chemistry, whilst at the same time making it increasingly difficult for new active ingredients and products to come into the market with ever-increasing regulatory requirements.

 

Farmers continue to demand choice and flexibility in their use of pesticides with an ever-reducing set of tools available to them, due to the diminution of old chemistry.

 

Consumers and supermarkets are increasingly demanding residue-free, organic produce, which Eden can help growers to deliver.

 

All of this means that demand for products like Eden's will continue to increase, something which is backed up by market forecasts that predict a Compound Annual Growth Rate of the global biopesticides market of 15.9% over the next seven years.

 

I remain very confident in the future success of Eden and would like to thank our shareholders for their continued support and belief in us."

 

 

 

For further information contact:

 

Eden Research plc	www.edenresearch.com
Sean Smith Alex Abrey	01285 359 555
Cavendish Capital Markets Limited (Nominated advisor and broker)
Giles Balleny / George Lawson (corporate finance) Charlie Combe (corporate broking) Michael Johnson (sales)	020 7397 1961
Hawthorn Advisors (Financial PR)
Victoria Ainsworth	[e-mail]

 

 

Chief Executive Officer's Statement

 

The first half of 2024 was characterised by strong regulatory momentum, including a number of significant approvals in key geographies, and also the expansion of our team to increase our capacity to capture future opportunities. These efforts have enabled us to meet our growth objectives, supported by increased product sales across our existing portfolio and our commercial partnerships with some of agriculture's largest players.

 

Financial performance

 

Revenue for the period increased by 65% to £1.9m from £1.1m in H1 2023, of which product sales made up £1.7m (H1 2023: £1.1m).

 

The Operating loss for the period was £1.3m, a slight increase on H1 2023 when it was £1.2m. This was a reflection of a reduction in gross margin (31% in H1, 2024 vs 37% in H1, 2023), as well as an increase in staff costs as the Company increased its headcount of both commercial and laboratory staff.

 

At 30 June 2024, Cash and cash equivalents stood at £4.9m, up from £0.5m at 30 June 2023 following completion of the last fundraise in the second half of 2023.

 

In the twelve months to 30 June 2024, Eden has invested £2.3m in intangible assets including development and regulatory costs.

 

Overall, the Company is pleased to report that it is on track to meet its 2024 market expectations for revenue and operating loss, the key financial metrics of the business.

 

 

Expanding territorial reach, growing the label

 

With the industry's regulators creating high barriers to entry, our approach to regulatory affairs and approvals is integral to Eden's growth proposition and offers a great potential reward to investors willing to back our innovative technology. Despite the high regulatory hurdles and long lead times for adoption, we have recently managed to successfully gain important approvals which expand both the geographies and the range of crop applications and addressable markets.

 

2024 began with the welcome news of regulatory authorisation for Mevalone^® in California. To put this one approval into context, California is the US's largest wine region, accounting for approximately 84% of the nation's total production and, in comparison with the rest of the US, has much stricter agricultural regulations geared towards sustainable farming practices. Given the timing of this regulatory approval, we have been able to commence distributing to grape growers across the state via our commercial partner, Sipcam. We expect to make meaningful revenues in 2025 as we continue to develop the commercial and marketing strategy.

 

In June, Eden received notification from the Spanish regulators that Mevalone, marketed as Araw® in the region, had received a label expansion to include 22 new crops on 4 new fungal diseases. This newly expanded label makes our biofungicide one of the most versatile and reliable solutions available to Spanish farmers to prevent fungal diseases in many crops under both organic and conventional agriculture. The new approval extends to a large number of high-value crops that weren't previously on the label, but most notably, includes almonds which are the third largest tree crop in Spain after olives and grapes. Furthermore, Spain boasts the largest cultivated area of almond trees in the world and ranks third in terms of overall production.

 

Post-period end in August, we were delighted that Mevalone received regulatory authorisation in Germany, applicable for use on grape vines to control Botrytis and apples to prevent storage diseases. Germany is widely considered in the biocontrol markets as one of the strictest regulatory environments across the EU and more broadly, and our regulatory success here is a great validation of the strong efficacy of our product, as well as its flexible and environmentally friendly qualities.

 

In September, Cedroz was granted, according to Reg. EU/1107/2009, a temporary approval in Greece for use on potatoes against wireworms for the 2024 growing season.

 

New products, same technology

 

Eden's development pipeline remains active across a number of different projects, all using the same proprietary terpene technology and underlying microencapsulation technology, SustaineÒ. These products are based on a desire to replace, or work alongside, conventional pesticide chemistry with plant-derived alternatives. We have the capacity, capability, and flexibility with our in-house laboratory facilities and team to be able to adapt our development to meet the demands of the industry and to also pursue new market opportunities as they arise.

 

This in-house expertise has allowed us to accelerate the development of our new bioinsecticide which would have otherwise been a much longer process had we needed to contract the work. In June, we announced encouraging results of our new bioinsecticide which has involved more than 30 laboratory trials and more than 140 field trials conducted in Europe and the United States. Results show strong efficacy against all life stages of key pests such as aphids, spider mites and whiteflies and demonstrate equivalence or superior performance when compared with registered biological reference products produced by some of the world's leading biochemical companies.

 

Eden is now working towards regulatory submissions of our new bioinsecticide in the US and Europe, which we anticipate will happen in 2024 and 2025, respectively. Subject to authorisation, first sales of the product could be achieved as early as 2025 in the US, given our active ingredients have already been registered at a federal level.

 

We are also working towards including downy mildew on the Mevalone label for the first time with an application already submitted in France. With key competitor products being removed from the market, or in some cases, already withdrawn, we see a significant opportunity to address an unmet need. We anticipate a positive verdict in early 2025, subject to regulatory timelines.

 

Strengthening our team

 

Driving sustainable innovation through the development of new products using our unique, patented technologies is a fundamental aspect of creating value for shareholders. Since our move to Oxfordshire in 2020, we have benefited tremendously from the ability to bring our biopesticide and biocontrol development in-house and accelerate timelines that would have otherwise been significantly slower. To continue to accelerate growth, we have elected to make key hires across specific mandates.

 

The first of these key appointments came in June 2024, when we appointed Humair Tariq as our Global Commercial Lead. Humair joined Eden from Syngenta where he spent the past 12 years working across a number of remits across the firm's pesticide division. Humair assumes a new role which is specifically dedicated to fostering the Company's existing partnerships, developing new relationships with potential partners, and driving revenue growth through both the expansion of our existing business and the pursuit of new opportunities.

 

Since the end of the first half, we are also pleased to welcome Daniel Mulas García as the Company's new Global Product and Marketing Lead. Daniel holds a wealth of industry experience from his time working as a product manager of biostimulants and biocontrol for one of Eden's most important commercial partners, Sipcam Oxon. Daniel's focus at Eden is on ensuring that our current and future products are well-aligned with the needs of farmers in an ever-changing regulatory and commercial environment, as well as maximising revenue growth through the pursuit of ongoing expansions of the Company's product portfolio.

 

Finally, Ilshad Moulan joined Eden as our new Head of Regulatory Affairs last month. Ilshad worked at a specialist product registration consultancy where he led a team of nine, focusing on regulatory affairs. Ilshad succeeds Dr Mike Carroll who will retire at the end of a handover period. Mike has served as Eden's first-ever regulatory leader and played a key role in not only establishing Eden's in-house regulatory capabilities but also in successfully securing the many regulatory authorisations the Company now holds.

 

At a Board level, we saw the appointment of Derek McAllan as a new non-executive director and Chairman of the Audit Committee. He takes over from Robin Cridland who has undertaken this duty for the past nine years. Robin continues to advise the Board in his capacity as a non-executive director. At the start of the year, we also saw the departure of Richard Horsman who stepped down as a non-executive director following an 18-month stint, during which he made significant contributions to the Company at a pivotal time.

 

Outlook

 

We anticipate the remainder of the year will provide plenty of reasons for excitement. Eden is exploring various options to reintroduce its sustainable seed treatment, Ecovelex, on an emergency authorisation basis following success in Italy in 2023. We anticipate full Ecovelex authorisation in the EU in 2025. We are also looking into the potential for deploying Ecovelex on other grain and cereal crops such as sweetcorn.

 

On the regulatory front, Eden is working closely with Sipcam towards submitting regulatory applications for Mevalone and Cedroz in new frontier markets such as Argentina, Brazil, and Chile. We expect to update the market with our progress in due course.

 

Ahead of the launch of our bioinsecticide, we expect to appoint a commercial partner to help prepare the product for regulatory submission in the coming months. This has been a highly competitive process which has so far involved more than 11 potential partners covering a range of global opportunities.

 

I'd like to take this opportunity to thank our team for all their effort so far this year in what has been a very busy period for the Company. I would also like to extend my gratitude to all our shareholders and the Board for their continued support.

 

 

 

Sean Smith

Chief Executive Officer

 

20 September 2024

 

Eden Research plc - Consolidated Statement of Comprehensive Income for the six months ended 30 June 2024
		Six months ended 30 June 2024 £ unaudited		Six months ended 30 June 2023 £ unaudited		Year ended 31 December 2023   £ audited
Revenue (note 18)		1,885,929		1,142,371		3,192,027
Cost of sales		(1,292,117)		(710,337)		(1,426,547)
Gross profit		593,812		432,034		1,765,480
Administrative expenses		(1,701,968)		(1,250,541)		(2,997,633)
Other operating income		4,199		-		20,689
Amortisation of intangible assets		(150,508)		(264,557)		(418,651)
Share based payments (note 17)		(79,666)		(119,083)		(236,576)
Operating loss		(1,334,131)		(1,202,147)		(1,866,691)
Investment revenues Finance costs Foreign exchange gains/(losses) Impairment of intangible assets (note 9) Share of loss of equity accounted investee, net of tax (note 10)		43,884 (6,068) (8,994) -   (3,350)		181          (9,539) 11,857 (4,968,529)   (25,111)		34,014          (17,207) (68,802) (4,968,529)   (33,047)
Loss before taxation		(1,308,659)		(6,193,288)		(6,920,262)
Income tax income		395,778		317,230		428,326
Loss for the financial period		(912,881)		(5,876,058)		(6,491,936)
Attributable to: Equity holder of the company		(916,128)		(5,887,194)		(6,491,936)
Non-controlling interest		3,247		11,136		2,313
Total Comprehensive Income		(912,881)		(5,876,058)		(6,491,936)
Earnings per share (note 7)
Basic (pence per share)		(0.17)		(1.54)		(1.54)

 

 

 

Eden Research plc - Consolidated Statement of Financial Position as at 30 June 2024

 

	30 June 2024		30 June 2023		31 Dec 2023
	£ unaudited		£ unaudited		£ audited
NON-CURRENT ASSETS
Intangible assets (note 9)	5,620,863		3,641,058		4,710,511
Property, plant & equipment (note 12)	231,997		167,175		230,091
Right of Use assets (note 13)	144,769		265,141		212,437
Investments in associate (note 10)	293,847		305,133		297,197
	6,291,476		4,378,507		5,450,236
CURRENT ASSETS
Inventories (note 14)	618,190		651,394		964,552
Trade and other receivables (note 15)	2,463,758		930,000		2,449,623
Taxation	712,978		640,946		317,201
Cash and cash equivalents	4,947,303		492,766		7,413,107
	8,742,229		2,715,106		11,144,483
CURRENT LIABILITIES
Trade and other payables (note 16)	2,161,728		1,818,582		2,819,153
Lease liabilities	139,773		138,808		142,849
	2,301,501		1,957,390		2,962,002
NET CURRENT ASSETS	6,440,728		757,716		8,182,481
NON-CURRENT LIABILITIES
Lease liabilities	19,622		147,780		86,920
	19,622		147,780		86,920
NET ASSETS	12,712,582		4,988,443		13,545,797
EQUITY
Called up share capital	5,333,529		3,811,089		5,333,529
Share premium account	6,413,652		39,308,529		6,413,652
Warrant reserve	664,892		640,741		758,234
Retained earnings	270,447		(38,807,554)		1,013,567
Non-controlling interest	30,062		35,638		26,815
TOTAL EQUITY	12,712,582		4,988,443		13,545,797

 

 

Eden Research plc - Consolidated Statement of Changes in Equity as at 30 June 2024        

	Share capital		Share premium	Merger reserve	Warrant reserve	Retained earnings	Non-control-ling interest	Total
	£		£	£	£	£	£	£
Six months ended 30 June 2024
Balance at 1 January 2024 (audited)	5,333,529		6,413,652	-	758,234	1,013,567	26,815	13,545,797
(Loss) /profit and total comprehensive income	-		-	-	-	(916,128)	3,247	(912,881)
Transactions with owners
- Options granted	-		-	-	79,666	-	-	79,666
- Options exercised/ lapsed	-		-	-	(173,008)	173,008	-	-
Transactions with owners	-		-	-	(93,342)	173,008	-	-
Balance at 30 June 2024 (unaudited)	5,333,529		6,413,652	-	664,892	270,447	30,062	12,712,582
Six months ended 30 June 2023
Balance at 1 January 2023 (audited)	3,808,589		39,308,529	10,209,673	701,065	(43,309,440)	24,502	10,742,918
(Loss)/profit and total comprehensive income	-		-	-	-	(5,887,194)	11,136	(5,876,058)
Transactions with owners
- Transfer of merger reserve - Options granted	- -		- -	(10,209,673) -	- 119,083	10,209,673 -	- -	- 119,083
- Options exercised/lapsed	2,500		-	-	(179,407)	179,407	-	2,500
Transactions with owners	-		-	(10,209,673)	(60,324)	10,389,080	-	2,500
Balance at 30 June 2023 (unaudited)	3,811,089		39,308,529	-	640,741	(38,807,554)	35,638	4,988,443

Eden Research plc - Consolidated Statement of cash flows for the six months ended 30 June 2024

	Six months		Six months
	ended		ended		Year ended 31
	30 June 2024		30 June 2023		December 2023
	£		£		£
	unaudited		unaudited		audited
Cash flows from operating activities
Cash outflow from operations (note 8)	(1,306,694)		(1,018,716)		(2,130,252)
R&D tax credit received	1		-		434,841
Net cash used in operating activities	(1,306,693)		(1,018,716)		(1,695,411)
Cash flows from investing activities
Development of intangible assets	(1,060,860)		(426,918)		(1,650,465)
Purchase of property, plant and equipment	(48,649)		(1,875)		(102,391)
Interest received	43,884		181		34,014
Net cash used in investing activities	(1,065,625)		(428,612)		(1,718,842)
Cash flows from financing activities
Issue of shares	-		2,500		9,058,239
Payment of lease liabilities	(79,108)		(59,196)		(139,539)
Interest on lease liabilities	(5,383)		(9,539)		(17,009)
Net cash used in financing activities	(84,491)		(66,235)		8,901,690
Decrease in cash and cash equivalents	(2,456,810)		(1,513,563)		5,487,437
Cash and cash equivalents at
beginning of period Effect of exchange rate fluctuations on cash held	7,413,107   (8,994)		1,994,472   11,857		1,994,472   (68,802)
Cash and cash equivalents at
end of period	4,947,303		492,766		7,413,107

 

Cash and cash equivalents comprise bank account balances.

 

 

Notes to the Interim Results

 

1.         Reporting Entity

 

Eden Research plc is a public limited company incorporated in the United Kingdom under the Companies Act 1985. The Company is domiciled in the United Kingdom and is quoted on the Alternative Investment Market (AIM).

 

These condensed consolidated interim financial statements ('Interims') as at and for the six months ended 30 June 2024 comprise the Company and its Subsidiaries (together referred to as 'the Group'). The principal activities of the Group are the development and commercialisation of encapsulation, terpenes and environmentally friendly technologies to provide naturally occurring solutions for the global agrochemicals, animal health, and consumer product industries.

 

2.         Basis of Preparation

 

These Interims have been prepared in accordance with IAS 34 'Interim Financial Reporting' and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2023 which were approved by the Board of Directors on 2 May 2024 and have been delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

 

The Interims do not include all of the information required for a complete set of financial statements prepared under UK-adopted International Accounting Standards and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.

 

Comparative information in the Interims as at and for the year ended 31 December 2023 has been taken from the published audited financial statements as at and for the year ended 31 December 2023. All other periods presented are unaudited.

 

The Board of Directors and the Audit Committee approved the interims on 20 September 2024.

 

3.         Going Concern

 

The Directors have, at the time of approving the Interims, a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the approval of the financial statements. Thus, the Interim financial statements have been prepared on a going concern basis which contemplates the realisation of assets and the settlement of liabilities in the ordinary course of business.

 

The Group has reported a loss for the first half of the year after taxation of £912,881 (H1 2023: £5,876,058). Net current assets at that date amounted to £6,440,728 (H1 2023: £757,716). Cash at that date amounted to £4,947,303 (H1 2023: £492,766). The Group is reliant on its current cash balance to fund its working capital.

 

The Directors have prepared budgets and projected cash flow forecasts, based on forecast sales provided by Eden's distributors where available, for a period of at least 12 months from the date of approval of the Interims and they consider that the Company and Group will be able to operate with the cash resources that are available to it for this period. 

 

The forecasts adopted include only revenue derived from existing contracts. They do not include potential upside from on-going discussions and negotiations with other parties not yet contracted, as well as other 'blue sky' opportunities.

 

In addition, the Group has relatively low fixed running costs and, while mitigating actions are not forecast to be required to support the going concern basis, the Directors have previously demonstrated their ability to postpone certain other costs, such as Research and Development expenditure, in the event of unforeseen cash constraints and are willing and able to delay costs in the forecast period should the need arise.

 

Furthermore, in July 2023, Eden completed a firm Capital Raising of £1.1 million and Retail Offer of £0.4 million (July 2023) together with a Conditional Capital Raising of £7.9 million, all before expenses.

Consequently, the Directors are confident that the Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the half year report and therefore have prepared the half year report on a going concern basis.

4.         Adoption of new and revised standards and changes in accounting policies

These condensed consolidated Interims have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2023.

The accounting policies have been applied consistently for the purposes of preparation of these condensed Interims.

5.         Principal risks and uncertainties

The Company's prime risk is the on-going commercialisation of its intellectual property, which involves testing of the Company's products, obtaining regulatory approvals and reaching a commercially beneficial arrangement for each product to be taken to market. This is measured by comparing actual results with forecasts that have been agreed by the Company's Board of Directors.

The Company's credit risk is primarily attributable to its trade receivables. Credit risk is managed by running credit checks on customers and by monitoring payments against contractual agreements.

The Company monitors cash flow as part of its day-to-day control procedures. The Board considers cash flow projections at its meetings and ensures that the Company has sufficient cash resources to meet its on-going cash flow requirements.

Due to the nature of the business, there is inherent risk of infringement of Eden's intellectual property rights by third parties. The risk of infringement is managed by taking (and acting on) the relevant legal advice as and when required.

There is also inherent uncertainty surrounding the regulatory approval of products in terms of both timing and outcome. This risk is managed by retaining appropriately experienced staff and contracting with expert consultants as needed.

Full details of the principal risks and uncertainties can be found in the Strategic Report in the Company's 2023 Annual Report.

6.         Ukraine

Eden does not currently have any business activities in Russia or Ukraine and, as such, has not experienced, nor does it expect, any direct impact on its business.

 

The knock-on effect of the conflict on other countries is still being understood, though we do not envisage significant disruption to the current business in the short term.

 

 

7.         Earnings per share

 

	Six months ended 30 June 2024 Pence unaudited		Six months ended 30 June 2023 Pence unaudited		Year ended 31 December 2023 Pence  audited
(Loss)/profit per ordinary share (pence) - basic	(0.17)		(1.54)		(1.54)

 

Loss per share - basic has been calculated on the net basis on the loss after tax of £912,881 (30 June 2023: £5,876,058, 31 December 2023: £6,491,936) using the weighted average number of ordinary shares in issue of 533,352,523 (30 June 2023: 380,912,474, 31 December 2023: 420,921,123).

 

Diluted earnings per share has not been presented as the Group is currently loss making and as a result, any additional equity instruments have the effect of being anti-dilutive.

 

 

8.          Reconciliation of loss before income tax to cash used by operations

 

	Six months ended 30 June 2024 £  unaudited		Six months ended 30 June 2023 £  unaudited		Year ended 31 December 2023 £  audited
(Loss)/profit after tax	(912,881)		(5,876,058)		(6, 491,936)
Adjustments for:
Share of associate's losses	3,350		25,111		33,047
Amortisation charges	150,508		264,557		5,387,180
Impairment of intangible assets	-		4,968,529		-
Share based payment charge	79,666		119,083		236,576
Depreciation of property, plant and equipment and right of use assets	114,411		101,159		206,426
Finance costs	5,383		-		17,009
Foreign exchange currency losses/(gains)	8,994		(11,857)		68,802
Finance income	(43,884)		(181)		(34,014)
Tax credit	(395,778)		(317,230)		(428,326)
Inventory provision	-		-		-
Doubtful debt provision	-		-		-
Movements in working capital:
(Increase)/decrease in trade and other receivables	(14,135)		(271,134)		(1,790,757)
(Decrease)/ Increase in trade and other payables	(648,690)		5,241		1,004,833
Decrease/(increase) in inventory	346,362		(25,936)		(339,094)
Cash used by operations	(1,306,694)		(1,018,716)		(2,130,252)

 

 

9.         Intangible assets

 

	Intellectual property	Licences and trademarks	Development Costs	Total
	£	£	£	£
COST
At 1 January 2023	9,507,057	456,684	9,074,031	19,037,772
Additions	-	-	426,918	426,918
At 30 June 2023	9,507,057	456,684	9,500,949	19,464,690
Additions	45,166	-	1,178,381	1,223,547
At 31 December 2023	9,552,223	456,684	10,679,330	20,688,237
Additions	-	-	1,060,860	1,060,860
At 30 June 2024	9,552,223	456,684	11,740,190	21,749,097
AMORTISATION
At 1 January 2023	7,146,975	450,192	2,993,379	10,590,546
Charge for the period	132,588	780	131,189	264,557
Impairment charge for the period	1,705,122	2,545	3,260,862	4,968,529
At 30 June 2023	8,984,685	453,517	6,385,430	15,825,242
Charge for the period	30,864	608	122,622	152,484
At 31 December 2023	9,015,549	454,125	6,508,052	15,977,726
Charge for the period	33,372	522	116,614	150,508
At 30 June 2024	9,048,921	454,647	6,624,666	16,128,234
CARRYING AMOUNT
At 30 June 2024	503,302	2,037	5,115,524	5,620,863
At 31 December 2023	536,674	2,559	4,171,278	4,710,511
At 30 June 2023	522,372	3,167	3,115,519	3,641,058

 

 

Impairment review

 

Full details of the impairment review and subsequent charge in 2023 can be found in the Company's 2023 Annual Report and Accounts.

 

Given that the Company has recently completed an impairment review as part of its 2023 audit and since there have been no indicators of impairment subsequent to that, as well as positive events, such as the authorisation of Mevalone in California, Germany and Czechia, and label extension for Mevalone in Spain, the Board is satisfied that an impairment review is not required at this point.

 

The Board will continue to assess the carrying value of its intangible assets on a regular basis to check for any indications of impairment.

 

 

10.       Investment in associate

		Six months ended		Six months ended		Year ended
		30 June 2024		30 June 2023		31 December 2023
		unaudited		unaudited		audited
Percentage ownership interest
and proportion of voting rights		29.90%		29.90%		29.90%
		£		£		£
Non-current assets		284,742		347,094		315,918
Current assets		360,750		340,873		311,599
Non-current liabilities		(468)		(57,155)		(23,819)
Current liabilities		(328,661)		(386,531)		(309,349)
Net assets (100%)		316,363		244,281		294,349
Company's share of net assets		94,593		73,040		88,010
Separable intangible assets		86,126		118,965		96,059
Goodwill		412,649		412,649		412,649
Impairment of investment in associate		(299,521)		(299,521)		(299,521)
Carrying amount of interest in associate		293,847		305,133		297,197
Revenue		434,230		297,304		515,647
Profit/(loss) from continuing operations		13,158		(59,620)		(61,802)
Post tax profit from discontinued operations		-		-		-
100% of total post-tax profits		13,158		(59,620)		(61,802)
29.9% of total post-tax profits		(3,934)		(17,827)		(18,479)
Amortisation of separable intangible assets		(7,284)		(7,284)		(14,568)
Company's share of loss including amortisation of separable intangible asset		(3,350)		(25,111)		(33,047)

 

 

 

 

11.        Subsidiaries

 

Details of the company's subsidiaries at 30 June 2023 are as follows:
Name of undertaking	Country of incorporation	Ownership interest (%)	Voting power held (%)	Nature of business
TerpeneTech Limited   Eden Research Europe Limited	Republic of Ireland   Republic of Ireland	50.00     100.00	50.00     100.00	Sale of biocide products   Dormant

 

TerpeneTech Limited ("TerpeneTech (Ireland))", whose registered office is 108 Q House, Furze Road, Sandyford, Dublin, Ireland, was incorporated on 15 January 2019 and is jointly owned by both Eden Research Plc and TerpeneTech (UK), the company's associate.   Eden has the right to appoint a director as chairperson who will have a casting vote, enabling the Group to exercise control over the Board of Directors in the absence of an equivalent right for TerpeneTech (UK). Eden owns 500 ordinary shares in TerpeneTech (Ireland).   Eden Research Europe Limited, whose registered office is 108 Q House, Furze Road, Sandyford, Dublin, Ireland, was incorporated on 18 November 2020 and is wholly owned by both Eden Research plc.

Non-controlling interests

 

The following table summarises the information relating to the Group's subsidiary with material non-controlling interest, before intra-group eliminations:

 

		30 June 2024	30 June 2023		31 Dec 2023
		£	£		£
		unaudited	unaudited		audited
NCI percentage		50%	50%		50%
Non-current assets		73,019	86,291		79,655
Current assets		100,310	34,983		56,887
Non-current liabilities		-	-		-
Current liabilities		(197,208)	-		(166,914)
Net assets/(liabilities)		(23,879)	121,274		(30,372)
Carrying amount of NCI					-
	Revenue	43,423	28,907		50,811
	Profit/(loss)	6,493	22,271		4,625
	OCI	-	-		-
Total comprehensive income		6,493	22,271		4,625
Share of NCI (50% of net Total comprehensive income)		3,247	11,136		2,313
Cash flows from operating activities		-	-		-
Cash flows from investment activities		-	-		-
Cash flows from financing activities		-	-		-
Net increase/(decrease) in cash and cash equivalents		-	-		-
Dividends paid to non-controlling interests		-	-		-

 

 

 

12.       Property, plant and equipment

 

	Land and buildings		Total
	£		£
COST
At 1 January 2023	332,956		332,956
Additions	1,875		1,875
At 30 June 2023	334,831			334,831
Additions - owned	100,516		100,516
At 31 December 2023	435,347		435,347
Additions	48,649		48,649
At 30 June 2024	483,996		483,996
AMORTISATION
At 1 January 2023	134,170		134,170
Charge for the period	33,486		33,486
At 30 June 2023	167,656		167,656
Charge for the period	37,600		37,600
At 31 December 2023	205,256		205,256
Charge for the period	46,743		46,743
At 30 June 2024	251,999		251,999
CARRYING AMOUNT
At 30 June 2024	231,997		231,997
At 31 December 2023	230,091		230,091
At 30 June 2023	167,175		167,175

 

 

 

 

13.       Right of use assets

 

	Land and buildings	Vehicles		Total
	£	£		£
COST
At 1 January 2023	443,777	137,436		581,213
Additions	-	-		-
At 30 June 2023	443,777	137,436		581,213
Additions	-	14,963		14,963
Disposals	-	(22,282)		(22,282)
At 31 December 2023	443,777	130,117		573,894
At 30 June 2024	443,777	130,117		573,894
AMORTISATION
At 1 January 2023	210,741	37,658		248,399
Charge for the period	45,438	22,235		67,673
Eliminated on disposal	-	-		-
At 30 June 2023	256,179	59,893		316,072
Charge for the period Eliminated on disposal	45,438 -	22,229 (22,282)		67,667 (22,282)
At 31 December 2023	301,617	59,840		361,457
Charge for the period	45,438	22,230		67,668
At 30 June 2024	347,055	82,070		429,125
CARRYING AMOUNT
At 30 June 2024	96,722	48,047		144,769
At 31 December 2023	142,160	70,277		212,437
At 30 June 2023	187,598	77,543		265,141

 

 

14.	Inventories
						30 June		31 December
				30 June 2024		2023		2023
				£		£		£
	Raw materials			355,348		533,227		149,644
	Goods in transit			-		-		27,736
	Finished goods			262,842		118,167		787,172
				618,190		651,394		964,552
	Inventory above is shown net of a provision off
	Provision for obsolete inventory			-		76,250		-
				-		76,250		-
15.	Trade and other receivables
						30 June		31 December
				30 June 2024		2023		2023
				£		£		£
	Trade receivables			1,609,698		479,311		1,788,151
	VAT recoverable			361,566		252,336		386,684
	Other receivables			160,328		99,140		112,375
	Prepayments and accrued income			332,166		99,213		162,413
				2,463,758		930,000		2,449,623
	Trade receivables are shown net of a provision for doubtful debt of:
	Provision for doubtful debt			-		107,188		-
				-		107,188		-
	Trade receivables disclosed above are measured at amortised cost. The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
16.	Trade and other payables
						30 June		31 December
				30 June 2024		2023		2023
				£		£		£
	Trade payables			1,720,027		1,171,433		1,925,559
	Accruals and deferred income			184,157		420,310		640,342
	Social security and other taxation			62,911		55,434		56,841
	Other payables			194,633		171,405		196,411
				2,161,728		1,818,582		2,819,153

 

17.	Share based payments

 

Long-Term Incentive Plan ("LTIP")

 

Since September 2017 Eden has operated an option scheme for Executive Directors, senior management and certain employees under an LTIP which allows for certain qualifying grants to be HMRC approved. Details on options issued in prior periods can be found in the annual report for the year ended 31 December 2023.

 

Options
		Number of share options				Weighted average exercise price (pence)
		30 Jun 2024		30 Jun 2023		30 Jun 2024		30 Jun 2023
	Outstanding at 1 January		23,486,534		16,312,649		8		7
	Granted during the period		-		-		-		-
	Exercised during the period		-		(250,000)		-		1
	Lapsed during the period		(3,596,432)		(3,500,000)		6		6
	Exercisable at 30 June		19,890,102		12,562,649		6		8

 

 

The exercise price of options outstanding at the end of the period ranged between 6p and 10.4p (H1 2023: 6p and 10.4p) and their weighted average contractual life was 2.0 years (H1 2023: 1.4 years).   The share-based payment charge for the period, in respect of options, was £79,666 (H1 2023: £119,083). The charge in H1, 2024 is in respect of the options granted in 2023 under a LTIP Award.   During the period, 3,596,432 of options lapsed and £173,008 (H1 2023: £171,251) was transferred from the warrant reserve to retained earnings.   There were no warrants outstanding at 30 June 2024.

 

18.       Segmental Reporting

 

IFRS 8 requires operating segments to be reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-makers, who are responsible for the resource allocation and assessing performance of the operating segments have been identified as the Executive Directors as they are primarily responsible for the allocation of the resources to segments and the assessment of performance of the segments.

 

The Executive Directors monitor and then assess the performance of segments based on product type and geographical area using a measure of adjusted EBITDA. This is the result of the segment after excluding the share-based payment charges, other operating income and the amortisation of intangibles. These items, together with interest income and expense are not allocated to a specific segment.

 

 

 

The segmental information for the six months ended 30 June 2024 is as follows:

 

	Agrochemicals	Consumer products	Total
Revenue	£	£	£
Milestone payments	165,245	-	165,245
R & D charges	-	2,309	2,309
Royalties	-	43,423	43,423
Product sales	1,674,952	-	1,674,952
Total revenue	1,840,197	45,732	1,885,929
EBITDA	(991,394)	45,732	(945,662)
Share Based Payments	(79,666)	-	(79,666)
Adjusted EBITDA	(1,071,060)	45,732	(1,025,328)
Amortisation	(143,872)	(6,636)	(150,508)
Impairment	-	-	-
Depreciation	(114,411)	-	(114,411)
Finance costs, foreign exchange and investment revenues	(15,062)	-	(15,062)
Income Tax	395,778	-	395,778
Share of Associate's loss	-	(3,350)	(3,350)
(Loss)/Profit for the Period	(916,231)	35,746	(912,881)
Total Assets	14,860,376	173,329	15,033,705
Total assets includes:
Additions to Non-Current Assets	1,109,509	-	1,109,509
Total Liabilities	2,123,915	197,208	2,321,123

 

 

 

The segmental information for the six months ended 30 June 2023 is as follows:

 

	Agrochemicals	Consumer products	Total
Revenue	£	£	£
Milestone payments	-	-	-
R & D charges	-	4,943	4,943
Royalties	-	28,907	28,907
Product sales	1,108,521	-	1,108,521
Total revenue	1,108,521	33,850	1,142,371
EBITDA	(751,178)	33,850	(717,328)
Share Based Payments	(119,083)	-	(119,083)
Adjusted EBITDA	(870,261)	33,850	(836,411)
Amortisation	(257,941)	(6,636)	(264,577)
Impairment	(4,968,529)	-	(4,968,529)
Depreciation	(101,159)	-	(101,159)
Finance costs, foreign exchange and investment revenues	2,499	-	2,499
Income Tax	317,230	-	317,230
Share of Associate's loss	-	(25,111)	(25,111)
(Loss)/Profit for the Year	(5,878,161)	2,103	(5,876,058)
Total Assets	6,971,889	121,274	7,093,613
Total assets includes:
Additions to Non-Current Assets	428,793	-	428,793
Total Liabilities	2,085,170	20,000	2,105,170

 

 

 

The segmental information for the year ended 31 December 2023 is as follows:

 

	Agrochemicals	Consumer products	Total
Revenue	£	£	£
Milestone payments	-	-	-
R & D charges	501,324	9,133	510,457
Royalties	17,391	50,811	68,202
Product sales	2,613,368	-	2,613,368
Total revenue	3,132,083	59,944	3,192,027
Adjusted EBITDA	(1,064,982)	59,944	(1,005,038)
Share Based Payments	(236,576)	-	(236,576)
EBITDA	(1,301,558)	59,944	(1,241,614)
Amortisation	(405,379)	(13,272)	(418,651)
Depreciation	(206,426)	-	(206,426)
Finance costs, foreign exchange and investment revenues	(51,995)	-	(51,995)
Impairment of investment in associate	(4,968,529)	-	(4,968,529)
Income Tax	428,326	-	428,326
Share of Associate's loss	-	(33,047)	(33,047)
(Loss)/Profit for the Year	(6,505,561)	13,625	(6,491,936)
Total Assets	16,458,177	136,542	16,594,719
Total assets includes:
Additions to Non-Current Assets	1,730,280	37,539	1,767,819
Total Liabilities	3,048,922	-	3,048,922

 

 

 

Geographical Reporting

 

	Six months ended 30 June 2024		Six months ended 30 June 2023		Year ended 31 December 2023
	£		£		£
UK	43,423		33,850		59,944
Europe	1,842,506		1,108,521		3,132,083
	1,885,929		1,142,371		3,192,027

The above analysis represents sales to the Group's direct customers who further distribute these products to their end markets.

 

All of the non-current assets are in the UK.

 

19.       Subsequent Events

 

 

LTIP grant

 

On 4 July 2024, the Company has made a grant to the Executive Directors, in respect of 2023 in order to ensure continuity of long term incentive, of options over 11,918,901 new Ordinary Shares in Eden ("the Options"), at a strike price of 6.5p each, representing a premium of 48% to the current share price, in the amounts of 6,805,852 awarded to Sean Smith and 5,113,049 awarded to Alex Abrey.

 

The Options expire on 30 June 2028 and vest as follows:

 

1/3 12 months from the date of grant

1/3 24 months from the date of grant

1/3 36 months from the date of grant

 

 

Notes to Editors:

 

Eden Research is the only UK-listed company focused on biopesticides for sustainable agriculture. It develops and supplies innovative biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries. 

 

Eden's products are formulated with terpene active ingredients, based on natural plant defence metabolites. To date, they have been primarily used on high-value fruits and vegetables, improving crop yields and marketability, with equal or better performance when compared with conventional pesticides. Eden has two products currently on the market: 

 

Based on plant-derived active ingredients, Mevalone^® is a foliar biofungicide which initially targets a key disease affecting grapes and other high-value fruit and vegetable crops.  It is a useful tool in crop defence programmes and is aligned with the requirements of integrated pest management programmes. It is approved for sale in a number of key countries whilst Eden and its partners pursue regulatory clearance in new territories thereby growing Eden's addressable market globally.

 

Cedroz™ is a bionematicide that targets free living nematodes which are parasitic worms that affect a wide range of high-value fruit and vegetable crops globally.  Cedroz is registered for sale on two continents and Eden's commercial collaborator, Eastman Chemical, is pursuing registration and commercialisation of this important new product in numerous countries globally.

 

Eden's seed treatment product, EcovelexÔ was developed to safely tackle crop destruction caused by birds - a major cause of losses in maize and other crops. Ecovelex works by creating an unpleasant taste or odour that repels birds, leaving the seeds safely intact and the birds unaffected and free to find alternative food sources. The product is based on Eden's plant-derived chemistry, registered in the EU, U.S. and elsewhere, and formulated using Eden's Sustaine® microencapsulation system.

 

Eden's Sustaine^® encapsulation technology is used to harness the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can also be used with both natural and synthetic compounds to enhance their performance and ease-of-use. Sustaine microcapsules are naturally-derived, plastic-free, biodegradable micro-spheres derived from yeast. It is one of the only viable, proven and immediately registerable solutions to the microplastics problem in formulations requiring encapsulation.

 

Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN. It was awarded the London Stock Exchange Green Economy Mark in January 2021, which recognises London-listed companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy. Eden derives 100% of its total annual revenues from sustainable products and services. 

 

For more information about Eden, please visit:  www.edenresearch.com.

 

Follow Eden on LinkedIn, Twitter and YouTube. 

 

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