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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Windar Photonics Plc | LSE:WPHO | London | Ordinary Share | GB00BTFR4F17 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.50 | 1.39% | 36.50 | 35.00 | 38.00 | 36.50 | 36.50 | 36.50 | 52,327 | 08:00:07 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Meas & Controlling Dev, Nec | 1.85M | -1.08M | -0.0192 | -19.01 | 20.43M |
From Apr 2019 to Apr 2024
TIDMWPHO
RNS Number : 3423F
Windar Photonics PLC
13 November 2020
13 November 2020
Windar Photonics plc
("Windar" or the "Company")
Annual Results, Interim Reporting Timeline and Notice of AGM
Windar Photonics plc (AIM: WPHO), the technology group that has developed a cost efficient and innovative LiDAR wind sensor for use on electricity generating wind turbines, is pleased to announce its final audited results for the year ended 31 December 2019 ("FY19").
Notice of Annual General Meeting
Windar also confirms that its Annual General Meeting ("AGM") will be held at West Hill Corporate Finance Ltd, 85 Gresham Street, London, EC2V 7NQ at 1.00 p.m. on 10 December 2020.
In light of the Coronavirus (COVID-19) pandemic and the restrictions imposed by the UK Government, the Company will convene the AGM with the minimum necessary quorum of two shareholders (which the Company will facilitate), and further shareholders will not be permitted to attend the AGM in person. The Company will include all valid proxy votes (whether submitted electronically or in hard copy form) in its polls at the AGM and the Chair of the meeting will call for a poll on each resolution. The Company accordingly requests that shareholders submit their proxy votes in respect of the resolutions as set out in the Notice of the AGM, electronically or by post in advance, in accordance with the instructions set out in the Notice of the AGM.
Shareholders should submit their votes via proxy as early as possible, and shareholders are requested to appoint the Chair of the meeting as their proxy. If a shareholder appoints someone else as their proxy, that proxy will not be able to attend the AGM in person or cast the shareholder's vote.
Copies of the Annual Report and Accounts for the year ended 31 December 2019 and the Notice of the AGM will be posted to shareholders and are available from the Company's website - www.windarphotonics.com
Interim Results Reporting Timeline
The Company expects to publish its half yearly report for the six months ended 30 June 2020 during the week commencing 16 November 2020.
For further information, please contact:
Windar Photonics plc Tel: +45 21689476 Jørgen Korsgaard Jensen, CEO Cenkos Securities plc (Nomad & Broker) Tel: 0131 220 6939 Neil McDonald / Pete Lynch
Notes to Editors:
Windar Photonics is a technology group that develops cost-efficient and innovative Light Detection and Ranging ("LiDAR") optimisation systems for use on electricity generating wind turbines. LiDAR wind sensors in general are designed to remotely measure wind speed and direction.
http://investor.windarphotonics.com
Chairman's Statement
As outlined in the June trading update, 2019 was a difficult year for Windar and the Company generated revenue of EUR1.2 million, a reduction of 66% compared to 2018 (EUR3.5 million). This decline is mostly attributable to operations in the retro-fit market whilst, more positively, sales in the OEM market were relatively flat year-on-year. In particular, revenues were impacted in 2019 as a result of delays and postponements of projects into 2020, leading to an increased EBITDA loss of EUR2.8 million (2018: loss of EUR0.4 million).
However, the management team is confident that the order book, whilst delayed in delivery, will support the business going forward and there are encouraging signs that the OEM market is now starting to adopt integration of Lidar systems for control purposes, illustrated with the recently obtained OEM orders received in 2020 and ongoing test projects.
The retro-fit market operations were expected to develop through 2019 with the end user projects in the Asian region and the growth outside this region as a result of our distribution agreement with Vestas. Unfortunately, delays and postponements within the Asian region impacted our development and this has been compounded by a slower than anticipated build up in activity through the Vestas distribution agreement.
The Company continues to focus on becoming the world's leading LiDAR group for wind optimisation. Part of this strategy is a continued effort to optimise the product suite, whilst continuing our efforts to maintain cost leadership within the industry. In 2019 we were able to reduce our average production costs by around 15% and we expect to see a continued cost reduction in 2020.
In addition to the continued cost optimisation programme, the Company did enter two major development projects, partly funded by Eurostar, the Energy Technology Development and Demonstration Program. The two projects are focused on further enhancing our WindVision products for which OEMs form the target market. Alongside the involvement of Windar and the Danish Technical University, these projects include several of the major European and Asian wind turbine manufactures.
Whilst we continue to believe that our WindVision(TM) product offering to the OEM market will contribute substantial growth in the coming years, the Company has evaluated the product offerings to the retro-fit markets with the view of establishing a more streamlined future growth path within these markets. Based on these evaluations, the Company has decided to launch a new service offering - Lidar as a Service ("LaaS") - to the retro-fit markets generating more predictable recurring revenues rather than one-off sales. This will be a cloud-based pay per use service, sold by distributors such as larger wind turbine service companies. For this new business, Windar has developed a new self-contained Lidar unit connected to our central analysing control centre in Copenhagen. The LaaS business unit is expected to generate first revenue in 2020 and initial indications of interest provide the board with confidence that this could provide a step change in Windar's financial performance.
Financial Overview
Revenue during the year declined 66% to EUR1.2 million (2018: EUR3.5 million). Gross profit was down 47% (2018: 50%) to EUR0.5 million (2018: EUR1.8 million).
Net loss for the year before taxes increased to EUR3.3 million from EUR0.9 million, which included depreciation, amortisation and warrant costs of EUR0.3 million (2018: EUR0.3 million). Among other reasons, but also due to the Covid-19 situation, the Company has experienced problems collecting outstanding receivables in Asia and due to the ongoing uncertainties, the board has decided that it is prudent to make a 100% provision for these outstanding receivables at the end of 2019 of EUR0.8 million. However, the board considers this an absolutely worst-case outcome and do expect to recover at least some of these receivables.
The Group held cash balances at the end of the year of EUR0.8 million (2018: EUR1.7 million) excluding restricted cash balances of EURNil (2018: EUR0.5 million).
Trade receivables were EUR0.1 million (2018: EUR0.6 million), reflecting the impact of the abovementioned provision.
The Group has capitalised its continued cost of investment in technology during the year. This amounts to EUR0.5 million in 2019 (2018: EUR0.4 million) before grants of EUR0.1 million (2018: EUR0.1 million).
During the year, the Group raised EUR1.6 million before expenses through the issue of share capital.
Outlook
After many years of test projects, it has been encouraging that, for the first year ever in our history, in 2020 the OEM market segment has now overtaken orders and revenue streams from the retro-fit market in both units and value. However, following the disappointing results in 2019, the Company has proactively changed the distribution network set-up in Asia in 2020, putting agreements in place that we believe could bring significant additional growth to the future orders and revenue streams.
Despite these encouraging developments, 2020 has also seen continued disruptions and delivery postponements, primarily due to the ongoing Covid-19 situation and the Company has also had difficulties in collecting certain outstanding receivables in Asia. Due to various quarantine rules and traveling restrictions, our installation process for products in the field has been particularly affected. As a consequence, parts of order intakes initially planned for delivery in 2020 are now expected to be delivered in 2021. Despite these challenges we still expect to see revenue in 2020 marginally increase compared to the disappointing result in 2019.
The factors outlined above have meant that the Company's cash flow situation has been negatively impacted and cash management is a critical consideration for the management team and is under active review. The Company was able to continue the production and the assembly line in Copenhagen throughout most of the first half of 2020, notwithstanding the impact of Covid-19. This has resulted in the Company being well positioned to satisfy the revised order delivery schedules but has also resulted in the cash flow position being under stress until payment for these deliveries is received. However, management believe that there are a number of actions available to them in order to manage the cash position even considering the current Covid-19 situation.
The Board is actively considering the alternative financing arrangements available to the Company, both to address the short-term working capital issues as a result of the various factors outlined above and to provide the longer-term liquidity required to allow the Company to adjust to longer order and delivery cycles. To this end, I am pleased to confirm that the company has agreed for a Covid-19 loan of EUR0.4 million from, Vækstfonden, the Danish Growth Fund and the postponement of repayments totalling EUR0.15 million due in 2021 in respect of the existing Growth Fund loan until the second part of 2025.
Despite the various challenges the Company is facing, our R&D activities remain an important part of our business and the next generation of both the WindVision(TM) and WindEye(TM) products are expected to be released at the end of 2020. Besides many new advanced functionalities, an important feature is to drive the unit costs down by approximately 25% compared to current systems.
Overall, our business strategy for the remainder of 2020 and 2021 is based on additional and substantial cost reduction of our products, reduction of staff and the development of the LaaS business model, which we expect will pave the way for a substantially improved financial performance. We believe that the implementation of this strategy will position the Company to take advantage of opportunities arising in the future. In particular, the establishment of the LaaS recurring revenue model will provide further stability to the financial performance of the business going forward and position the Company to take advantage of opportunities available in the market.
Positively, the total order inflow in 2020 has been encouraging at EUR2.9 million contractually for delivery in 2020. However, due to the ongoing Covid-19 pandemic, the Board expects only to convert approximately EUR1.3 million of these orders into realised revenue in 2020 with the remaining EUR1.6 million of the order back-log to be carried into 2021. The Board believe that this order book and outstanding project and customer pipeline stands the Company in a good position moving forward.
In these challenging times I would like to take the opportunity to thank the management and staff for their efforts in 2019.
BY ORDER OF THE BOARD ON November 13, 2020
Johan Blach Petersen
Chairman
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Hot Features
Premium
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
Note
Revenue from contracts with customers 4 1,177,897 3,499,867
Cost of goods sold (629,560) (1,744,571)
Gross profit 548,337 1,755,296
Administrative expenses (3,680,990) (2,391,798)
Impairment loss - (39,182)
Other operating income 32,145 32,201
----------------------------------------- ------
Loss from operations (3,100,508) (643,483)
Finance expenses 6 (190,889) (269,925)
Loss before taxation (3,291,397) (913,408)
Taxation 7 212,488 120,436
Loss for the year attributable to
the ordinary equity holders of Windar
Photonics Plc (3,078,909) (792,972)
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Exchange gains/(losses) arising
on translation of foreign operations 3,085 (2,125)
----------------------------------------- ------
Total comprehensive loss for the
year attributable to the ordinary
equity holders of Windar Photonics
Plc (3,075,824) (795,097)
============= =========================
Loss per share attributable to the
ordinary equity holders of Windar
Photonics Plc
Basic and diluted, cents per share 8 (6.7) (1.8)
========================================= ====== ============= =========================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
31 December 31 December
2019 2018
EUR EUR
Note
Assets
Non-current assets
Intangible assets 10 1,192,607 982,888
Property, plant & equipment 11 61,800 110,788
Deposits 24,980 46,285
Total non-current assets 1,279,387 1,139,961
--------------------------------------- ------ ------------- -------------
Current assets
Inventory 12 1,019,564 726,999
Trade receivables 13 111,703 638,138
Other receivables 13 84,305 166,264
Tax credit receivables 13 212,428 120,209
Prepayments 44,857 83,763
Restricted cash and cash equivalents 14 - 518,138
Cash and cash equivalents 14 763,024 1,721,803
Total current assets 2,235,881 3,975,314
--------------------------------------- ------ ------------- -------------
Total assets 3,515,268 5,115,275
--------------------------------------- ------ ------------- -------------
Equity
Share capital 18 608,689 560,859
Share premium 18 13,692,119 12,558,434
Merger reserve 18 2,910,866 2,910,866
Foreign currency reserve 18 (18,630) (21,715)
Retained earnings 18 (16,338,796) (13,287,757)
Total equity 854,248 2,720,687
--------------------------------------- ------ ------------- -------------
Non-current liabilities
Warranty provisions 20 61,170 78,422
Loans 17 5,174 1,135,744
--------------------------------------- ------ ------------- -------------
Total non-current liabilities 66,344 1,214,166
Current liabilities
Trade payables 16 1,045,792 492,822
Other payables and accruals 16 211,879 588,456
Contract liabilities 16 69,954 83,169
Invoice discounting 16 1,992 10,735
Loans 16 1,265,059 5,240
------------- -------------
Total current liabilities 2,594,676 1,180,422
Total liabilities 2,661,020 2,394,588
--------------------------------------- ------ ------------- -------------
Total equity and liabilities 3,515,268 5,115,275
--------------------------------------- ------ ------------- -------------
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019
31 December 31 December
2019 2018
EUR EUR
Note
Assets
Non-current assets
Investments in subsidiaries 519,897 10,733,683
Total non-current assets 519,897 10,733,683
------------------------------- ----- ------------- ------------
Current assets
Other receivables 13 11,790 12,703
Prepayments 26,599 23,857
Intragroup receivables 13 43,088 974,624
Cash and cash equivalents 14 521,713 221,540
Total current assets 603,190 1,232,724
------------------------------- ----- ------------- ------------
Total assets 1,123,087 11,966,407
------------------------------- ----- ------------- ------------
Equity
Share capital 18 608,689 560,859
Share premium 18 13,692,119 12,558,434
Merger reserve 18 658,279 658,279
Foreign currency reserve 18 (7,746) (7,746)
Retained earnings 18 (14,046,739) (1,891,110)
Total equity 904,602 11,878,716
------------------------------- ----- ------------- ------------
Current liabilities
Trade payables 16 198,485 67,691
Other payables and accruals 16 20,000 20,000
Total liabilities 218,485 87,691
------------------------------- ----- ------------- ------------
Total equity and liabilities 1,123,087 11,966,407
------------------------------- ----- ------------- ------------
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEARED 31 DECEMBER 2019
Year ended Year ended
31 December 31 December
2019 2018
Notes EUR EUR
Loss for the period before taxation (3,291,397) (913,408)
Adjustments for:
Finance expenses 6 190,889 269,925
Amortisation 267,317 189,557
Depreciation 52,411 64,078
Received tax credit 120,186 66,095
Foreign exchange losses 3,085 (84,759)
Share option and warrant costs 27,868 26,443
-------------------------------------- ------ ------------- -------------
(2,629,641) (382,069)
Movements in working capital
Changes in inventory (292,565) 12,611
Changes in receivables 144,164 (285,731)
Changes in prepayments 38,905 -
Changes in deposits 21,305 -
Changes in trade payables 552,426 (552,147)
Changes in deferred revenue (13,214) 76,453
Changes in warranty provisions 20 (17,252) 6,218
Changes in other payables and
provisions 447,972 263,442
Cash flow from operations (1,747,900) (861,223)
-------------------------------------- ------ ------------- -------------
Investing activities
Payments for intangible assets 10 (528,278) (415,456)
Payments for tangible assets 11 (3,427) (68,125)
Grants received 10 50,824 108,779
-------------------------------------- ------ ------------- -------------
Cash flow from investing activities (480,881) (374,802)
-------------------------------------- ------ ------------- -------------
Financing activities
Proceeds from issue of share
capital 1,315,342 2,500,877
Costs associated with the issue
of share capital (133,827) (193,199)
Reduction from invoice discounting (8,743) (110,474)
(Decrease)/Increase in restricted
cash balances 158,138 (283,446)
Repayment of loans (5,240) (4,579)
Interest paid (55,878) (66,537)
Cash flow from financing activities 1,269,792 1,842,642
-------------------------------------- ------ ------------- -------------
Net increase/(decrease) in cash
and cash equivalents (958,989) 606,617
Exchange differences 210 (1,317)
Cash and cash equivalents at
the beginning of the year 1,721,803 1,116,503
Cash and cash equivalents at
the end of the year 14 763,024 1,721,803
-------------------------------------- ------ ------------- -------------
COMPANY CASH FLOW STATEMENT FOR THE YEARED 31 DECEMBER 2019
Year ended Year ended
31 December 31 December
Notes 2019 2018
EUR EUR
Loss for the period before taxation (12,183,497) (284,906)
Adjustments for:
Finance Income (30,953) (18,065)
Write down of investment in
subsidiary 11,887,213 -
Share option and warrant costs 27,868 26,443
-------------------------------------- ------ ------------- -------------
(299,369) (276,528)
Movements in working capital
Changes in receivables 913 (523)
Changes in prepayments (2,743) 647
Changes in loans to subsidiary
entity 962,489 (680,259)
Changes in trade payables 130,795 28,970
Changes in other payables and
provisions - -
Cash flow from operations 792,085 (927,693)
-------------------------------------- ------ ------------- -------------
Investing activities
Additional investment in subsidiary
undertaking (1,673,427) (1,339,172)
Cash flow from investing activities (1,673,427) (1,339,172)
-------------------------------------- ------ ------------- -------------
Financing activities
Proceeds from issue of share
capital 1,315,342 2,500,877
Costs associated with the issue
of share capital (133,827) (193,199)
Cash flow from financing activities 1,181,515 2,307,678
-------------------------------------- ------ ------------- -------------
Net decrease in cash and cash
equivalents 300,173 40,813
Cash and cash equivalents at
the beginning of the year 221,540 180,727
Cash and cash equivalents at
the end of the year 14 521,713 221,540
-------------------------------------- ------ ------------- -------------
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARED 31 DECEMBER 2019
Foreign
Share Share Merger currency Accumulated
Capital Premium reserve reserve Losses Total
Group EUR EUR EUR EUR EUR EUR
At 1 January
2018 530,543 10,281,073 2,910,866 (19,590) (12,521,228) 1,181,664
New shares
issued 30,316 2,470,560 - - - 2,500,876
Costs
associated
with capital
raise - (193,199) - - - (193,199)
Share option
and
warrant costs - - - - 26,443 26,443
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Transaction
with
owners 30,316 2,277,361 - - 26,443 2,334,120
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Loss for the
year - - - - (792,972) (792,972)
Other
comprehensive
gains - - - (2,125) - (2,125)
---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Total
comprehensive
loss - - - (2,125) (792,972) (795,097)
---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
At 31 December
2018 560,859 12,558,434 2,910,866 (21,715) (13,287,757) 2,720,687
New shares
issued 47,830 1,267,512 - - - 1,315,342
Costs
associated
with capital
raise - (133,827) - - - (133,827)
Share option
and
warrant costs - - - - 27,870 27,870
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Transaction
with
owners 47,830 1,133,685 - - 27,870 1,209,385
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Loss for the
year - - - - (3,078,909) (3,078,909)
Other
comprehensive
gains/(loss) - - - 3,085 - 3,085
Total
comprehensive
loss - - - 3,085 (3,078,909) (3,075,824)
At 31 December
2019 608,689 13,692,119 2,910,866 (18,630) (16,338,796) 854,248
Company
At 1 January
2018 530,543 10,281,073 658,279 (7,746) (1,632,648) 9,829,501
New shares
issued 30,316 2,470,560 - - - 2,500,876
Costs
associated
with capital
raise - (193,199) - - - (193,199)
Share option
and
warrant costs - - - - 26,443 26,443
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Transaction
with
owners 30,316 2,277,361 - - 26,443 2,334,120
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Loss for the
year - - - - (284,905) (284,905)
-----------------------------------
Total
comprehensive
loss - - - - (284,905) (284,905)
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
At 31 December
2018 560,859 12,558,434 658,279 (7,746) (1,891,110) 11,878,716
New shares
issued 47,830 1,267,512 - - - 1,315,342
Costs
associated
with capital
raise - (133,827) - - - (133,827)
Share option
and
warrant costs - - - - 27,868 27,868
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Transaction
with
owners 47,830 1,133,685 - - 27,868 1,209,383
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
Loss for the
year - - - - (12,183,497) (12,183,497)
Total
comprehensive
loss - - - - (12,183,497) (12,183,497)
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
At 31
December
2019 608,689 13,692,119 658,279 (7,746) (14,046,739) 904,602
----------------------------------- ---------------------------- ------------------------------- ------------------------------ ----------------------------- --------------------------------- ---------------------------------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2018
1. General information
The Company is a public limited company domiciled in the United Kingdom and incorporated under registered number 09024532 in England and Wales. The Company's registered office is 3 More London Riverside, London, SE1 2AQ.
The Group was formed when the Company acquired on 29 August 2014 the entire share capital of Windar Photonics A/S, a company registered in Denmark though the issue of Ordinary Shares.
The financial information set out below does not constitute the company's statutory accounts for 2019 or 2018. Statutory accounts for the years ended 31 December 2019 and 31 December 2018 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for the years ended 31 December 2019 and 31 December 2018 were unqualified, drew attention to a material uncertainty related to going concern by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2018 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2019 will be delivered to the Registrar in due course.
2. Going Concern
The consolidated financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is anticipated to continue in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.
Based on the Group's latest trading expectations and associated cash flow forecasts, the directors have considered the cash requirements of the Group. The directors are confident that based on the Group's forecasts and projections, taking account of possible changes in trading performance, the EUR0.4m Covid loan approved post year end and the post year end share placing which is in progress. it is appropriate to continue to adopt the going concern basis of accounting in preparing these financial statements.
However, Management has noticed non-payments of customer receivables in 2020 primarily from customers in the Asian region due to what Management expect also to be related to the Covid-19 situation and project delays at our customer's end-user level. Combined with the general consequences described above such eventual non-payments illustrates the current uncertainties when projecting a 12 months outlook.
The current cash flow estimate for the coming 12 months does include the following important assumptions:
No cash in-flow from any of receivables written off in the 2019 accounts
Only revenue and payments from customers based upon confirmed written contracts and agreements
Unchanged operation cost base
However, Management highlight the risk that the non-payment by customers can have a severely negative impact both long term but also short term.
In the event, for the reasons stated above the timing of the forecast revenue and customer payments were not to be achieved in the periods expected, the Group may need to seek additional funding to cover those periods where there might be a potential shortfall.
Management has to highlight the very high levels of uncertainties given the various circumstances, which indicates the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.
Post year end, Management has actively sought alternative financing arrangements due primarily to the Covid pandemic situation, both to address the potential short-term working capital issues and to provide the longer-term liquidity required to allow the Company to adjust to longer order and delivery cycles. Consequently, the Company has been approved for a Covid-19 loan from the Danish Growth Fund for the amount of EUR0.4 million and postponements of repayments on the existing Growth Fund loan in 2021 of EUR0.15 million where repayments will now commence from January 2022. Management has further initiated a process of undertaking a share placing of GBP0.4m (before expenses) which is subject to shareholder approval and certain events or conditions.
3. Basis of preparation
The consolidated financial statements comprise the consolidated financial information of the Group as at 31 December 2019 and are prepared under the historic cost convention, except for the following:
-- share based payments and share option and warrant costs
The principal accounting policies adopted in the preparation of the financial information are set out below.
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRSs") issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("adopted IFRSs").
The acquisition of the subsidiary in 2014 was deemed to be a business combination under common control as the ultimate control before and after the acquisition was the same. As a result, the transaction is outside the scope of IFRS 3 and has been included under the principles of merger accounting by reference to UK GAAP.
4. Revenue
Revenue from contracts with Year ended Year ended
customers: 31 December 31 December
2019 2018
EUR EUR
Sale of product and installation 1,129,255 3,492,775
Rendering of services 48,642 7,092
------------- -------------
Revenue 1,177,897 3,499,867
============= =============
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
WindEye (TM) 1,070,231 3,272,525
WindVision (TM) 59,018 220,250
------------- -------------
Rendering of services 48,648 7,092
------------- -------------
Revenue 1,177,897 3,499,867
============= =============
Deferred revenue of EUR69,954 (2018: EUR83,169) relates to performance obligation under contracts that have not yet been completed and are expected to be met in 2020.
5.Segment information
Operation segments are reported as reported to the chief operation decision maker.
The Group has one reportable segment being the sale of LiDAR Wind Measurement and therefore segmental results and assets are disclosed in the consolidated income statement and consolidated statement of financial position.
In 2019, three customers accounted for more than 10 per cent of the revenue each (2018: two customers). The total amount of revenue from these customers amounted to EUR1,028,380, 88 per cent of the total revenue (2018: EUR3,145,168 or 90 per cent of the revenue)
Revenue by geographical location of customer:
Year Year
ended ended
31 December 31 December
2019 2018
EUR EUR
Europe 256,501 91,891
Americas - 85,437
China 919,658 3,293,434
Asia (excluding China) 1,738 29,105
Revenue 1,177,897 3,499,867
------------------------ ------------- -------------------------
Geographical information
The parent company is based in the United Kingdom. The information for the geographical area of non-current assets is presented for the most significant area where the Group has operations being Denmark.
As at 31 December As at 31 December
2019 2018
EUR EUR
Denmark 1,270,753 1,170,617
1,270,753 1,170,617
------------------ ------------------
Non-current assets for this purpose consist of property, plant and equipment and intangible assets.
6. Finance income and expense
Finance expense
Year Year
ended ended
31 December 31 December
2019 2018
EUR EUR
Foreign exchange losses (39,124) (82,634)
Interest expense on financial liabilities
measured at amortised cost (151,765) (187,291)
Finance expense (190,889) (269,925)
------------------------------------------------- -------------- ----------------
7. Income tax
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
The tax credit for the year:
(a) UK Corporation tax - -
Foreign tax credit (212,531) (120,436)
------------- -------------
Paid tax 43 -
------------- -------------
(212,488) (120,436)
------------- -------------
Tax reconciliation
Loss on ordinary activities before
(b) tax (3,291,397) (913,408)
============= =============
Loss on ordinary activities at
the UK standard rate of corporation
tax 19% (2018: 19%) (625,365) (173,548)
Effects of:
Expenses non-deductible for tax
purposes 3,108 14,141
Depreciation for the year (less
than)/in excess of capital allowances - (20,386)
Unrecognised tax losses 533,772 95,367
Different tax rates applied in
overseas jurisdictions (125,599) (36,010)
Exchange rate differences 1,596 -
Tax credit for the year (212,488) (120,436)
---------------------------------------------- ------------- -------------
The tax credit is recognised as 22 per cent. (2018: 22 per cent) of the company's deficit that relates to research and development costs. Companies in Denmark, who conduct research and development and accordingly experience deficits can apply to the Danish tax authorities for a payment equal to 22 per cent. (2018; 22 per cent) of deficits relating to research and development costs up to DKK 25 million.
(c) Deferred tax - Group
In view of the tax losses carried forward and other timing differences there is a deferred tax asset of approximately EUR2,549,025 (2018: EUR2,100,238) which has not been recognised in these Financial Statements, given uncertainty around timing and availability of sufficient taxable profits in the relevant Company.
(d) Deferred tax - Company
In view of the tax losses carried forward and other differences there is a deferred tax asset of approximately EUR281,199 (2018: EUR205,968) which has not been recognised in these Financial Statements, given uncertainty around timing and availability of future profit against which the losses will be able to be used.
All taxes recognized in the statement of Comprehensive income are denominated in DKK.
8. Loss per share
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Year ended Year ended
31 December 31 December
2019 2018
EUR EUR
Loss for the year (3,078,909) (792,972)
------------- -------------
Weighted average number of ordinary
shares for the purpose of basic earnings
per share 47,614,917 43,002,600
Basic loss and diluted, cents per
share (6.7) (1.8)
------------- -------------
There is no dilutive effect of the warrants (note 18) as the dilution would reduce the loss per share.
9. Dividends
No dividends were proposed by the Group during the period under review (2018: EURNil).
10. Intangible assets
Development
projects
Group EUR
Cost
-------------------------- ------------
At 1 January 2018 2,691,069
---------------------------- ------------
Additions - internally
developed 415,456
Grants received (108,779)
Exchange differences (8,651)
At 31 December 2018 2,989,095
---------------------------- ------------
Additions - internally
developed 528,277
Grants received (50,824)
Exchange differences (1,190)
---------------------------- ------------
At 31 December 2019 3,465,358
---------------------------- ------------
Accumulated amortisation
At 1 January 2018 1,822,475
---------------------------- ------------
Charge for the year 189,557
Exchange differences (5,825)
---------------------------- ------------
At 31 December 2018 2,006,207
---------------------------- ------------
Charge for the year 267,317
Exchange differences (773)
---------------------------- ------------
At 31 December 2019 2,272,751
---------------------------- ------------
Net carrying value
-------------------------- ------------
At 1 January 2018 868,594
---------------------------- ------------
At 31 December 2018 982,888
---------------------------- ------------
At 31 December 2019 1,192,607
---------------------------- ------------
The Group has received Research and Development Grants from Energiteknologisk Udvikling og Demonstration Projekt of EUR81,216 (2018: EUR108,779) in respect of the capitalised research and development. At the end of the year a new EUDP project was granted in the amount of EUR508,722 which can be claimed in the coming three years (2018: EURNil).
The company's development projects relate to the development of improved performance and functionality, improved components etc. in the company's products.
Measurement of the development projects are based on realization of the company's business plan and budgets, particularly realization of expected growth in revenue.
11. Property, plant & equipment
Plant and
equipment
Group EUR
Cost
-------------------------- -----------
At 1 January 2018 294,048
---------------------------- -----------
Additions 68,125
Disposed (143,069)
Exchange differences (763)
At 31 December 2018 218,341
Additions 3,427
Disposed -
Exchange differences (79)
---------------------------- -----------
At 31 December 2019 221,689
---------------------------- -----------
Accumulated depreciation
At 1 January 2018 186,964
---------------------------- -----------
Charge for the year 64,078
Disposed (143,069)
Exchange differences (420)
At 31 December 2018 107,553
Charge for the year 52,411
Disposed -
Exchange differences (75)
---------------------------- -----------
At 31 December 2019 159,889
---------------------------- -----------
Net carrying value
-------------------------- -----------
At 1 January 2018 107,084
---------------------------- -----------
At 31 December 2018 110,788
---------------------------- -----------
At 31 December 2019 61,800
---------------------------- -----------
12. Inventory
Group
As at As at
31 December 31 December
2019 2018
EUR EUR
Raw material 417,481 364,090
Work in progress 392,374 311,420
Finished goods 209,709 51,489
------------------ ------------- -------------
Inventory 1,019,564 726,999
------------------ ------------- -------------
The cost of inventory sold and recognised as an expense during the year was EUR639,555 (2018: EUR1,268,040).
13. Trade and other receivables
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2019 2018 2019 2018
EUR EUR EUR EUR
Trade receivables 623,458 685,679 - -
-------------------------------- ------------- ------------- ------------- -------------
Less; provision for impairment
of trade receivables (511,755) (47,541) - -
Trade receivables - net 111,703 638,138 - -
Receivables from related
parties - - 43,088 974,624
-------------------------------- ------------- ------------- ------------- -------------
Total financial assets
other than cash and cash
equivalents classified at amortised costs 111,703 638,138 43,088 974,624 -------------------------------- ------------- ------------- ------------- ------------- Tax receivables 212,428 120,209 - - Other receivables 84,305 166,264 11,790 12,703 Total other receivables 296,733 286,473 11,790 12,703 Total trade and other receivables 408,436 924,611 54,878 987,327 -------------------------------- ------------- ------------- ------------- ------------- Classified as follows: Current Portion 408,436 924,611 54,878 987,327 -------------------------------- ------------- ------------- ------------- -------------
At the end of 2019 the group had debtors, primarily in China, where in 2020 there were non-payments from these customers. It has not been possible to obtain clarification of the possibility of collection of these receivables before approving the annual report.
Due to the general uncertainties, Management have made the judgement to take a worst case approach and made a full provision with the hope that at least part of the provision can be recovered in the future.
The carrying value of trade and other receivables classified at amortised cost approximates fair valu e.
More than More than More than Total
30 days 60 days 120 days
past due past due past due
EUR EUR EUR EUR
Gross carrying amount 0 0 127,320 127,320
Loss provision - - (93,694) (93,694)
Net carrying amount 0 0 33,326 33,326
Trade and other receivables represent financial assets and are considered for impairment on an expected credit loss model. These assets have historically had immaterial levels of bad debt and are with credit worthy customers, and as the Group trades with a concentrated number of customers and utilises export credit facilities the Group has reviewed trade receivables on an individual basis. Additionally, the Group continues to trade with the same customers and therefore the future expected credit losses have been considered in line with the past performance of the customers in the recovery of their receivables. The implementation of IFRS 9 has therefore not resulted in a change to the impairment provision in the current or prior year.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. The expected loss rates are based on the Group's historical credit losses experienced over the three year period prior to the period end. The historical loss rates are then adjusted for current and forward-looking information on factors affecting the Group's customers including the area of operations of those debtors and the advancing market for wind power and the Group's products. The assessment of the expected credit risk for the year has not increased, when looking at the factors affecting the risk noted above.
There is no material difference between the net book value and the fair values of trade and other receivables due to their short-term nature.
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
Of the net trade receivables EUR49,750 (2018: EUR13,096 ) was pledged as security for the invoice discounting facility. The Group is committed to underwrite any of the debts transferred and therefore continues to recognise the debts sold within trade receivables until the debtors repay or default. Since the trade receivables continue to be recognised, the business model of the Group is not affected. The proceeds from transferring the debts of are included in other financial liabilities until the debts are collected or the Group makes good any losses incurred by the service provider.
14. Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balances with original maturity less than 90 days:
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2019 2018 2019 2018
EUR EUR EUR EUR
------------- --------------- --------------- -------------
Cash at bank 763,024 1,721,803 521,713 221,540
------------- --------------- --------------- -------------
The Group has restricted cash balances of EUR360,000 (2018: EUR 518,138) but a provision of the full amount is made at the end of the year due to no payment from the customer in 2020. The restricted cash balances relate to transactions entered into between the Group and external financial parties. When EKF has credit approved a customer EKF, issues a non-recourse payment guarantee to an external financial party typically of 80% to 90% of the face value of the transaction. Upon shipment of the products the Group then sells the invoice to the external financial party at face value subject to depositing and pledging a cash amount equal to the difference between the face value of the invoice and the EKF guarantee. When the customer pays typically one year later, the full invoice amount to the financial party, the deposit is paid in full to the Group.
15. Notes supporting statement of cash flows
Non-current Current
loans loans and Invoice discounting Total
and borrowings borrowings EUR EUR
EUR EUR
As at 1 January 2018 1,023,809 4,579 121,208 1,149,596
Repayment of loans - (4,579) - (4,579)
Repayment of Invoice
Discounting (110,473) (110,473)
Accrued interests
on non-current loans 120,754 - 120,754
Loans and borrowings
classified as non-current
in previous period
becoming current in
this period (5,250) 5,250 - -
Foreign exchange rate
differences (3,569) (10) - (3,579)
As at 31 December
2018 1,135,744 5,240 10,735 1,151,719
---------------------------- ---------------- ------------ ---------------------- ------------
Repayment of loans - (5,240) - (5,240)
Repayment of Invoice
Discounting - - (8,743) (8,743)
Accrued interests
on non-current loans 135,011 - - 135,011
Loans and borrowings
classified as non-current
in previous period
becoming current in
this period (1,265,059) 1,265,059 - -
Foreign exchange rate
differences (522) - - (522)
---------------------------- ---------------- ------------ ---------------------- ------------
As at 31 December
2019 5,174 1,265,059 1,992 1,272,225
---------------------------- ---------------- ------------ ---------------------- ------------
16. Trade and other payables
Group Company
As at As at As at As at
31 December 31 December 31 December 31 December
2019 2018 2019 2018
EUR EUR EUR EUR
Invoice discounting 1,992 10,735 - -
Trade payables 1,045,792 492,822 198,485 67,691
Other payables and accruals 211,879 588,456 20,000 20,000
Current portion of Nordea
loan 1,265,059 5,240 - -
Total financial liabilities,
excluding 'non-current' 1,097,253 loans and borrowings 2,524,722 218,485 87,691 classified as financial liabilities measured at amortised cost ------------------------------ ------------- ----------------------------------------- ------------- ------------- Deferred revenue 69,954 83,169 - - ------------------------------ ------------- ----------------------------------------- ------------- ------------- Total trade and other payables 2,594,676 1,180,422 218,485 87,691 ------------------------------ ------------- ----------------------------------------- ------------- ------------- Classified as follows: Current Portion 2,594,676 1,180,422 218,485 87,691 ------------------------------ ------------- ----------------------------------------- ------------- -------------
The invoice discounting arrangement is secured upon the trade debtors to which the arrangement relates.
There is no material difference between the net book value and the fair values of current trade and other payables due to their short-term nature.
17. Borrowings
The carrying value and fair value of the Group's borrowings are as follows:
Group
Carrying and Fair
value
As at As at
31 December 31 December
2019 2018
Loans EUR EUR
Growth Fund 1,259,499 1,124,914
Current portion of Growth Fund (1,259,499) -
Nordea Ejendomme 10,734 16,070
Current portion of Nordea Loan (5,560) (5,240)
----------------------------------------- ------------- -------------
Total non-current financial liabilities
measured at amortised costs 5,174 1,135,744
----------------------------------------- ------------- -------------
The Growth Fund borrowing from the Danish public institution, Vækstfonden, initially bore interest at a fixed annual rate of 12 per cent with a full bullet repayment in June 2020. As announced on June 29, 2020 terms for the borrowing was renewed whereafter the interest rate was reduced to 7 percent p.a. and the loan to be repaid in equal quarterly instalments over the period from 1 July, 2021 until 1 July, 2025. The terms have been further amended in October 2020, whereby the instalments in the second half of 2021 have been extended to the second half of 2025 whereafter the quarterly instalments are due on 1 January 2022 until 1 January 2026.
The loan from Nordea Ejendomme is in respect of amounts included in the fitting out of the offices in Denmark. The loan is repayable over the 6 years and matures in November 2021 and carries a fixed interest rate of 6 per cent.
Both loans are denominated in Danish Kroner.
The Company had no borrowings.
18. Share capital
On December 12 2019 the company issued 4,076,348 ordinary shares of 1 pence each for a cash consideration at GBP0.275 per share. On 12 July 2018 the Company issued 2,700,000 ordinary shares of 1 pence each for cash consideration at GBP0.82 per share.
Authorised EUR Authorised EUR
2019 2019 2018 2018
Shares at beginning
of reporting period 44,508,369 560,859 41,808,369 530,543
------------------------------- ------------ --------- ----------- --------
Issue of share capital 4,076,348 47,830 2,700,000 30,316
------------------------------- ------------ --------- ----------- --------
Shares at end of reporting
period 48,584,717 608,689 44,508,369 560,859
------------------------------- ------------ --------- ----------- --------
On 3 January and 8 January in 2020 the company completed the 12 December, 2019 capital raise by issuing an additional 1,166,363 ordinary shares of 1 pence each for a cash consideration at GBP0.275 per share.
Number of Number of
shares issued shares issued
and fully and fully
paid EUR paid EUR
2019 2019 2018 2018
Shares at 1 January
2019 44,508,369 560,859 41,808,369 530,543
----------------------- --------------- --------- --------------- ---------
Issue of shares for
cash 4,076,348 47,830 2,700,000 30,316
Shares at 31 December
2019 48,584,717 608,689 44,508,369 560,859
----------------------- --------------- --------- --------------- ---------
At 31 December 2019 the share capital comprises 49,626,080 shares of 1 pence each.
Warrants and share options
Warrants and share options are granted to Directors and employees.
195,000 new share options or warrants were granted in 2019. The options were issued at a strike price of GBP1 a third vesting on each anniversary for the first three years. The options have a 10-year life. The price of the share at the time of issue was GBP0.24. The risk-free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.
The share options issued in 2017 are valued using the Black-Scholes pricing model and no performance conditions are included in the fair value calculations. The options were issued at a strike price of GBP1 a third vesting on each anniversary for the first three years whereafter, the options have a 10-year life. The price of the share at the time of issue was GBP0.88. The risk-free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.
The average share price during the year was 50.00 pence (2018: 88.25 pence). At the year end the Company had the following warrants and options outstanding:
Number of warrants
and options
---------------------------
At At
31 December 31 December Exercise
price
2018 Granted Lapsed 2019 (GBP Exercise
pence) date
31/12/19
Warrants 1,520,956 - - 1,520,956 39.07 to 31/12/21
16/11/18
Options 362,500 195,000 - 557,500 100.00 to 01/03/32
1,883,456 - - 1,883,456
=========== ============= ======== ========== ===============
The number of options and warrants exercisable at 31 December 2019 is warrants 1,520,956 (2018: 1,520,956) and options 241,666 (2018: 120,833).
The weighted average remaining contractual life for the options outstanding as at 31 December 2019 is 10.76 years (2018: 11.01 years). The warrants have a remaining life of two years (2018: 1 years).
19. Operating Leases
The total future value of the minimum lease payment is due as follows:
2019 2018
EUR EUR
Not later than one year 75,967 64,485
Later than one year and - -
not later than five years
75,967 64,485
------- -------
All leasing commitments are in respect of property and cars leased by the Group. The terms of property leases vary from country to country, although they all tend to be tenant repairing with rent reviews every 2 to 5 years. The Company has not entered any leases in 2020 with maturity longer than 6 months.
20. Warranty provision
2019 2018
EUR EUR
Provision at the beginning
of reporting period 78,422 72,205
Provision charged to the
profit and loss account (9,995) 9,439
Utilised in year (7,240) (2,991)
Foreign exchange rate movements (196) (231)
-------- --------
61,170 78,422
-------- --------
The Group typically provides a two-year warranty period to customers on products sold. Warranty expenses/(income) charged to the Statement of Comprehensive Income amounted to EUR(9,995) (2018: EUR9,439) corresponding to a warranty cost percentage of (0.4)% (2018: 0.2%) relative to the prior two years revenue. However, d ue to the early business stage of the Group and the uncertainty following this the Group has adopted a policy to accrue a 4% provision based on the prior two years deliveries calculated with the cost of goods sold at the end of the period.
21. Related Party Transactions
Jørgen Korsgaard Jensen and Johan Blach Petersen are directors and shareholders of Wavetouch Denmark A/S (Wavetouch) and OPDI Technologies A/S (OPDI). Wavetouch has during the year rented office space from Windar Photonics A/S, the amount payable during the year to Windar was EUR32,145 (2018: EUR32,196). There were amounts outstanding at the year end to Wavetouch EUR167,527 (2018: EUR72,853). At the end of the year there were amounts outstanding to OPDI of EUR Nil (2018: EUR 31,426).
Intercompany transactions
At 31 December 2019 there exist an intercompany loan between Windar Photonics PLC and its subsidiary Windar Photonics A/S. Windar Photonics PLC has a receivable at EUR 43,088 (2018: EUR974,624). Interest added during 2019 amounts to EUR35,396 (2018: EUR28,512). The interest rate for 2019 is Libor 0.5% + 2.5% - equal to 3% p.a. (2018: Libor 0.5% + 2.5% - equal to 3% p.a.).
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END
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November 13, 2020 13:32 ET (18:32 GMT)
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