Interim results for the period ended 30 June 2020

RNS Number : 1489Y
Verditek PLC
07 September 2020
 

Verditek PLC

 

("Verditek" or the "Company" or the "Group")

 

Interim Report and Financial Statements for the six months to 30 June 2020

 

Verditek plc, (AIM:VDTK) the clean technology company is pleased to announce its interim results for the six months to 30 June 2020.

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

Enquiries:

 

Verditek plc   

RH Lord David Willetts FRS (Non-Executive Chairman)

Rob Richards (Chief Executive Officer)

 


Tel: +44 (0)20 7129 1110
enquiries@verditek.plc.uk

 

WH Ireland Limited (NOMAD and Broker)


 

Tel: +44 (0)20 7220 1666

Chris Hardie (Corporate Finance)

Chris.hardie@whirelandcb.com

 


 

 

 

 

 

CEO's Statement

 

Introduction

 

I am delighted to be presenting my first set of interim results as CEO of Verditek plc, a cleantech company with interests in Solar, Carbon Capture, and Filtration systems.

 

The last six-month period for Verditek has been a defining time for the Group, as Verditek's solar business has moved from the development phase into commercialisation. Production is now increasing in order to fulfil recent orders for its lightweight solar panels. Revenues from these orders together with the anticipated revenues from the new sales pipeline will flow into the second half of the year.

 

Solar Division

 

During the period a new sales strategy was implemented which has led to significant openings of new markets and geographies previously not targeted.

 

As a result of this, the mining and marine sectors in particular have become a major part of our efforts to drive the Groups 's growth, as these industry verticals come under increased pressure to substitute dry fuel for wet; both these areas are recent breakthroughs for us, representing a multi-year pipeline of potential business.

 

In mining an illustration of the scale of the opportunity for Verditek can be demonstrated through one of our partners, who are a specialist mining consultancy with a client base that controls some 4,000 individual mines. All of the mines are capable of switching to solar, each with a greater than 1-2 MW requirement. Even supplying a small proportion of these mines would lead to a significant revenue opportunity.

 

The requirement for solar power is equally compelling in the Oil & Gas sector, which is under enormous pressure to operate in a more environmentally friendly manner.  As a result, we have already started to actively engage with onshore facilities and with the next round of panel evolution, we expect to receive the certification required to offer this to the offshore market as well.

 

We continue to work on other verticals such as transportation, cellular telephone towers, carport charging, roof tiles and other applications of our flexible solar panels.

 

Currently, the sales team consists of 18 people geographically widely spread, along with a number of regional distributors which has resulted in promising leads across multiple continents and initial orders from Australia, Italy, Libya, Pakistan, Peru, Philippines, Sweden, Thailand and UK. 

 

The outbreak of COVID has certainly refocussed governments around the world to rethink their choice of electricity generation methods and their clean fuel focus, both of which have started to help Verditek.  However, some of the development programmes that we were involved with in Europe have been delayed due to the COVID pandemic and with a number of research and development facilities unable to operate some of the trials have been postponed.

 

On the product side of the business we continue to improve both the efficiency and technical specifications of the panels, allowing them to operate in differing verticals and achieve the required certification to drive into new markets.  Expanding into new vertical markets represent both opportunities and challenges that will require further development and time to broaden the product range.

 

We continue to work in partnership with Paragraf on the exciting opportunity to develop graphene technology for photovoltaic cells and will report more on these achievements in the coming months.

 

Other Group Interests

 

Verditek plc continues to maintain its minority interests in both BBR Filtration Ltd and Industrial Climate Solutions Inc., however the Group's focus is primarily on the solar business.

 

Management Changes

 

During the period under review the Board took the decision to restructure the senior management team and route to market resulting in my appointment as Chief Executive Officer on 1 May. 

 

Dr Geoff Nesbitt has become the Group's Chief Technology Officer (CTO) and continues to drive our products forward as well as leading our relationship with Paragraf.

 

From 1 September, Tim Bowen has taken the position of Chief Financial Officer.  Tim has many years' experience as CFO of AIM quoted companies including a strong cleantech background. Tim has a proven track record in driving growth businesses from early stage commercialisation through to full scale operation.

 

Cash Position

 

During the period under review the Group successfully raised £1.45m of new equity. As of the 30 June 2020 Verditek had cash reserves of £0.58m. A further cash inflow of £0.3m was received in August from the conversion of a warrant issued at IPO. In addition, as the pipeline converts into further orders, additional cash will be received from invoicing customers.  The Group continues to maintain a tight rein on overheads.

 

Outlook

 

Overall, the Board believes Verditek has an excellent combination of an innovative, technologically advanced product and an increasing portfolio of opportunities ahead. We look forward to delivering profitable projects in the fast-growing green energy space.

 

 

 

Rob Richards

Chief Executive Officer

7 September 2020

 

 



 

Verditek plc

 

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2020

 

 



H1 2020

H1 2019

FY 2019



Unaudited

Unaudited

Audited


Note

£

£

£

Continuing operations   





Revenue 


-

-

-

Administrative expenses 


(843,354)

(826,512)

(1,660,719)

Operating loss   


(843,354)

(826,512)

(1,660,719)

Finance Income


52

180

185

Finance costs 


(74,875)

(72,316)

(203,779)

Loss before tax   


(918,177)

(898,648)

(1,864,313)

Income Tax 


-

-

-

Loss for the period   


(918,177)

(898,648)

(1,864,313)






Loss for the period attributable to: -





Owners of the Company 


(916,377)

(897,543)

(1,867,957)

Non-controlling interest 


(1,800)

(1,105)

3,644

 


(918,177)

(898,648)

(1,864,313)






Other comprehensive income 





Items that will or may be reclassified to profit or loss: 





Translation of foreign operations 


75,194

2,257

(43,942)

Total comprehensive loss for the period from continuing operations


(842,983)

(896,391)

(1,908,255)

 





Total comprehensive loss for the period attributable to: - 





Owners of the Company 


(837,898)

(900,671)

(1,906,855)

Non-controlling interest 


(5,086)

4,280

(1,370)

 


(842,983)

(896,391)

(1,908,255)






Loss per share  





Basic and diluted (£)

4

(0.004)

(0.004)

(0.009)

 

   


Condensed Consolidated Statement of Financial Position

For the 6 months ended 30 June 2020

 

 

 

As at 30 June 2020

As at 30 June 2019

  As at 31 December 2019


Note

Unaudited

Unaudited

Audited



£

£

£

Assets





Non-current assets





Investments


25,917

25,153

24,229

Property, plant and equipment


663,208

651,159

633,491

Right of use assets


239,277

-

249,706

Non-current assets


928,402

676,312

907,426






Current assets





Inventories


37,525

-

35,038

Trade and other receivables


492,497

473,811

437,075

Cash and cash equivalents 


221,274

107,243

Current assets


1,118,880

695,085

579,356

TOTAL ASSETS


2,047,282

1,371,397

1,486,782






Equity and liabilities





Non-current liabilities





Loans and borrowings


-

1,170,000

-

Lease liabilities


177,260

-

186,612

Non-current liabilities


177,260

1,170,000

186,612

Current liabilities





Trade and other payables


763,485

701,646

959,360

Loans and borrowings

5

700,017

502,152

668,319

Lease liabilities


43,601

-

37,526

Current liabilities


1,507,103

1,203,798

1,665,205

TOTAL LIABILITIES


1,684,363

2,373,798

1,851,817






Share capital

6

116,758

80,847

91,666

Share premium account

6

6,945,074

3,858,691

5,466,376

Share based payment reserve


88,850

15,167

21,703

Accumulated losses 


(6,795,093)

(4,921,930)

(5,878,716)

Translation reserve 


42,291

(390)

(36,190)

Non-controlling interests


(34,960)

(34,786)

(29,874)

Total shareholders' equity


(362,919)

(1,002,401)

(365,035)

TOTAL EQUITY AND LIABILITIES


2,047,282

1,371,397

1,486,782

 

 



 

Condensed Statement of Changes in Equity  

For the 6 months ended 30 June 2020

 

 

 


Issued share capital

Share Premium

Share based payment reserve

Accumulated losses

Translation reserve

Non-controlling interest

Total


 

 

£

 

 

 

 

As at 1 January 2019

80,847

3,858,691

8,727

(3,817,534)

749

(243,929)

(112,449)

Change in Accounting Policy IFRS 16 adjustment

-

-

-

24,189

-

-

24,189

Loss for the period

-

-

-

(897,543)

-

(1,105)

(898,648)

Translation of subsidiary

-

-

-

-

(3,129)

5,385

2,256

Total comprehensive loss for the period

-

-

-

(897,543)

(3,129)

4,280

(896,392)

Acquisition of NCI without a change in control

-

-

-

(206,853)

1,990

204,863

-

Total change in ownership interests

-

-

-

(206,853)

1,990

204,863

-

Share based payment reserve

-

-

6,440

-

-

-

6,440

Shareholders' equity at 30 June 2019

80,847

3,858,691

15,167

(4,897,741)

(390)

(34,786)

(978,212)









Loss for the period

-

-

-

(1,867,957)

-

3,644

(1,864,313)

Translation of subsidiary

-

-

-

-

(38,928)

(5,014)

(43,942)

Total comprehensive loss for the period

-

-

-

(1,867,957)

(38,928)

(1,370)

(1,908,255)

Acquisition of NCI without a change in control

-

-

-

(217,415)

1,990

215,425

-

Total change in ownership interests

-

-

-

(217,415)

1,990

215,425

-

Issue of shares net of expenses

10,819

1,607,685

-

-

-

-

1,618,504

Share based payment reserve

-

-

12,976

-

-

-

12,976

Shareholders' equity at 31 December 2019

91,666

5,466,376

21,703

(5,878,717)

(36,189)

(29,874)

(365,035)









Loss for the period

-

-

-

(916,377)

-

(1,800)

(918,177)

Translation of subsidiary

-

-

-

-

78,480

(3,286)

75,194

Total comprehensive loss for the period

-

-

-

(916,377)

78,480

(5,086)

(842,984)

Issue of shares net of expenses

25,092

1,478,698

-

-

-

-

1,503,790

Share based payment reserve

-

-

67,147

-

-

-

67,147

Shareholders' equity at 30 June 2020

116,758

6,945,074

88,850

(6,795,093)

42,291

(34,960)

(362,919)

 

 

 

 



 

Condensed Statement of Cash Flows

For the 6 months ended 30 June 2020

 

 


Note




 



H1 2020

H1 2019

FY 2019



Unaudited

Unaudited

Audited



£

£

£

Operating activities





Loss before tax from continuing operations


(918,177)

(898,648)

(1,864,313)

Adjustment for:





Depreciation


43,208

9,157

70,742

Loss on disposal of assets


-

-

1,119

Finance costs


74,875

72,316

203,779

Financial income


(52)

(180)

(185)

Share based payment expenses


67,147

6,440

12,976



(732,999)

(810,915)

(1,575,882)

Working capital adjustments





(Increase) / decrease in inventory


(2,487)

-

(35,038)

(Increase) / decrease in trade and other receivables


(55,422)

(42,713)

(24,961)

Increase / (decrease) in trade and other payables


(147,837)

92,955

311,596

Cash used in operations


(938,745)

(760,673)

(1,324,285)






Taxation


-

-

-

Net cash outflow from operating activities


(938,745)

(760,673)

(1,324,285)






Investing activities





Purchase of fixed assets


(2,568)

(164,042)

(156,399)

Net cash outflow from investing activities


(2,568)

(164,042)

(156,399)






Financing activities





Issue of ordinary share capital

6

1,456,791

-

521,469

Interest paid


-

(1,936)

(134)

Finance income


51

180

180

Loan received/ (repayable)


-

458,909

455,076

Payment of lease liabilities


(36,409)

-

(71,686)

Net cash inflow from financing activities


1,420,433

457,153

904,905






Net (decrease)/increase in cash and cash equivalents


479,120

(467,562)

(575,779)

Cash and cash equivalents at the beginning of the period


107,279

683,885

683,885



586,399

216,323

108,106






Exchange gains on cash and cash equivalents


2,459

4,951

(863)






Cash and cash equivalents at the end of the period


588,858

221,274

107,243



 

Notes to the Condensed Financial Statements

 

1.  General Information

 

The Interim Financial Statements are for the six months ended 30 June 2020 and are presented in British Pounds (£), which is the functional currency of the parent company. They have been prepared in accordance with IAS 34 'Interim Financial Reporting'. They do not include all of the information required in annual financial statements in accordance with IFRS and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2019.

 

Verditek plc ("Verditek", "Company") is a public limited company incorporated, registered and domiciled in England Wales (registration number 10114644), whose shares are quoted on the Alternative Investment Market on the London Stock Exchange. Its registered office is located at 29 Farm Street, London W1J 5RL.

 

Verditek is the holding company of a group of companies engaged in the clean technology sector.

 

The Interim Financial Statements have been approved for issue by the Board of Directors on 3rd September 2020.

 

2.  Basis of Preparation

 

The financial information presented in this condensed consolidated interim report for the half-year has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board, as adopted by the European Union.  The principal accounting policies adopted in the preparation of the financial information in this Interim Report are unchanged from those used in the company's financial statements for the year ended 31 December 2019.

 

The financial information for the year ended 31 December 2019 presented in this Interim Report does not constitute the company's statutory accounts for that period but has been derived from them.  The Annual Report and Accounts for the year ended 31 December 2019 were audited and have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Accounts for the year ended 31 December 2019 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006.  The financial information for the periods ended 30 June 2019 and 30 June 2020 is unaudited.

 

A copy of the audited consolidated financial statements for the year ended 31 December 2019 is available on the Company's website.

 

New Standards adopted as at 1 January 2020

 

Accounting pronouncements which have become effective from 1 January 2020 are:

 

·IFRS 3 Business Combinations - definition of a business

·IAS 1 and IAS 8 - definition of material

·IFRS 9, IFRS 7 and IAS 39 - interest rate benchmark

·IFRS 7 - Insurance contracts

 

These accounting pronouncements do not have a significant impact on the Group's financial results or position.

 

Going concern

 

The interim financial statements have been prepared under the going concern basis as the directors are satisfied that sufficient funds are or will become available to the group to meet its on-going working capital requirements. The Group's forecasts take account of ongoing impact from Covid-19, and appropriate steps have been taken to control costs. However, the Group has expanded its sales team and is actively pursuing new commercial opportunities. The Group has agreed several sales contracts in recent months in new sectors and geographies, including Pakistan and Libya.  The Group has also received further funding following the exercise of a warrant (granted at IPO) in August, which has raised a further £0.3m in funding. After considering the forecasts and the risks, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting.

 

 

Dividends

 

  The directors do not propose an interim dividend.

 

 

Material changes in accounting estimates or judgments

 

The preparation of unaudited interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses for the current and its corresponding financial period under review. Actual results may differ from these estimates.

In preparing the unaudited interim financial information, the significant judgements made by the management in applying the Group's accounting policies and the sources of estimates uncertainty were consistent with those applied to the audited financial statements for the year ended 31 December 2019.

3.  Segmental Information

 

The chief operating decision-maker is considered to be the Board of Directors of Verditek. The chief operating decision-maker allocates resources and assesses performance of the business and other activities at the operating segment level.

 

The chief operating decision maker has determined that in the period ended 30 June 2020 Verditek had one operating segment, the development and commercialisation of clean technologies, although it is likely that in future periods the Group's segmental reporting will be expanded as different technologies are developed and commercialised. 

 

Geographical Segments

 

Apart from holding company activities in the UK the Group's had operations in Milan, in Italy in the period.  An analysis of non-current assets by geographical market is given below:

 


6 months ended 30 June 20

6 months ended 30 June 19

For the year ended 31 December 19


Unaudited

Unaudited

Audited


£

£

£

UK

26,460

27,981

24,994

Rest of Europe

901,942

648,331

882,431

Total

928,402

676,312

907,425

 

4.  Loss Per Share 

 

The calculation of loss per share is based on the following loss and number of shares:


6 months ended 30 June 20

6 months ended 30 June 19

For the year ended 31 December 19


Unaudited

Unaudited

Audited


£

£

£

Loss for the period from continuing operations (£)

(916,377)

(897,543)

(1,867,957)

Weighted average number of shares:  Basic

249,774,633

202,117,265

206,787,734

Loss per share (£)

(0.004)

(0.004)

(0.009)

 

Basic loss per share is calculated by dividing the loss for the period from continuing operations of the Group by the weighted average number of ordinary shares in issue during the period.

For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive options and warrants over ordinary shares. Potential ordinary shares resulting from the exercise of share options and warrants have an anti-dilutive effect due to the Group being in a loss position. As a result, diluted loss per share is disclosed as the same value as basic loss per share.

 

5.  Loans and Borrowings




6 months ended 30 June 20

6 months ended 30 June 19

For the year ended 31 December 19




Unaudited

Unaudited

Audited




£

£

£

Current






Interest free related party loan



43,243

43,243

43,243

Interest bearing related party secured loan



486,774

458,909

455,076

Convertible loans



170,000

-

170,000

Total Current loans and borrowings



700,017

502,152

668,319

 




6 months ended 30 June 20

6 months ended 30 June 19

For the year ended 31 December 19




Unaudited

Unaudited

Audited




£

£

£

Non - current






Convertible loans



-

1,170,000

-

Total Non-current loans and borrowings



-

1,170,000

-

 

Cashflow - net debt analysis

 


01-Jan-20

Debt Funding

Other cashflows

Finance costs

Foreign Exchange

30-Jun-20


£

£

£

£

£

£

Cash and cash equivalents

(107,243)

36,409

(515,529)

-

(2,495)

(588,858)

Related party loan

43,243

-

-

-

-

43,243

Convertible bonds

170,000

-

-

-

-

170,000

Secured loan

455,076

-

-

-

31,698

486,774

Lease liability

224,138

(36,409)

-

17,884

15,248

220,861


785,214

-

(515,529)

17,884

44,451

332,200

 

 

6.  Share capital and premium


Number of Shares

Share capital

Share premium


Par Value  £0.0004

£

£





At 31 December 2019

229,163,534

91,666

5,466,376

Shares issued (net of expenses) March 2020

20,230,000

8,092

493,405

Shares issued (net of expenses) May 2020

42,500,000

17,000

985,293

At 30 June 2020

291,893,534

116,758

6,945,074





 

On 9 March 2020, the company issued 20,230,000 ordinary shares of 0.04 pence each at 2.5 pence per share, raising £505,750 before expenses of £4,253. On 7 May 2020, the company issued 40,000,000 ordinary shares of 0.04 pence each at 2.5 pence per share, raising £1,000,000 before expenses. On 27 May 2020, the company issued 2,500,000 shares in satisfaction of outstanding debts with an advisor, valued at £47,000.

 

 

 

 

 

7.  Copies of the interim report

 

Copies of this interim report are available on the Company's website at www.verditek.plc.uk and from the Company's registered office, 29 Farm Street, London W1J 5RL.

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