Interim Results

Windar Photonics PLC
25 September 2023
 

25 September 2023

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

Windar Photonics plc

 

("Windar", the "Company" or the "Group")

 

Unaudited interim report for the six months ended 30 June 2023

 

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, announces its unaudited interim results for the six months ended 30 June 2023.

 

Financial highlights

 

·      revenue increased by 220% to €1.3 million (H1 2022: €0.4 million)

·      gross profit increased by 290% to €0.74 million (H1 2022: €0.19 million)

·      EBITDA loss reduced to €0.27 million (H1 2022: €0.74 million)

 

Operational highlights

 

·      overall production capacity increased to 80-100 systems per month, despite supply chain challenges

·      new COO appointed in March to further strengthen the Company's production and logistics functions

·      relocated its China operations to a new facility in Shanghai

·      completed the test project on a GE 1.6MW platform in North America, demonstrating a potential increase of 3.2% in its annual energy production

 

For further information, please contact:

 

Windar Photonics plc

Jørgen Korsgaard Jensen, CEO

Tel: +45 24234930

WH Ireland Limited

Chris Fielding / James Bavister / Isaac Hooper

Tel: +44 20 7220 1666

 

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

 

 

The person responsible for arranging the release of this announcement on behalf of the Company is Jørgen Korsgaard Jensen, Chief Executive of the Company.

 

CHAIRMAN'S STATEMENT

 

The Board is delighted to report that revenue for the first half year of 2023 increased by 220% to €1.3 million (H1 2022: €0.4 million).

 

This was achieved despite revenue in the first 3 months of the year being negatively impacted by component shortages following the COVID pandemic and subsequent supply chain issues.

 

Besides navigating these component shortages during the first half year, the Company has been focused on increasing the overall production capacity, both internally and within our supply chain, and is pleased to announce that overall production capacity when entering the second half of 2023 has been doubled, since 2022, to approximately 80-100 systems per month.

 

The Gross profit for the period amounted to €0.74 million (H1 2022: €0.19 million), representing a Gross margin of 54.9% compared to a gross margin in the first half of 2022 of 46.3%. The increase was predominantly due to a more favorable product and customer mix, which are expected to continue going forward.

 

Due to the increased activity level, operational expenses, excluding amortisation, depreciation and warrant costs, increased by 7.2% to €1.02 million (H1 2022: €.96 million), as a result of which the Company reported a reduced EBITDA loss of €0.27 million (H1 2022: €0.74 million).

 

During the first half of 2023 the Board made some strategic decisions affecting the operational expenses. Firstly, it hired in March a new COO to further strengthen the performance of the Company's production and logistics functions. Secondly, in February the Company relocated its China operations to a new facility in Shanghai, as a result of which, the Company is better positioned to serve the growing demand from Chinese customers and in due course to have the flexibility to establish local assembly facilities.   

 

Project wise the Company completed the previously announced test project on a GE 1.6MW platform in North America. Overall the test demonstrated a potential increase of 3.2% in Annual Energy Production (AEP). Part of the improvement was due to identification of non-optimal turbine settings. This is an important result for the Company since it demonstrates the efficacy of our product in respect of an additional operating platform. The Board estimates that approximately 15,000 turbines of this type are currently installed globally.

 

The Company is currently discussing with this particular client a roll-out of our Lidar as a Service (LaaS) concept, whereby the revenue stream from this project will be more consultancy oriented. This consultancy service does require accurate Lidar-based data, as the existing wind turbine data was insufficiently accurate.      

 

 

Financial Overview

 

Overall, the Group reported increased revenues of €1.3 million (H1 2022: €0.4 million) and a reduced net loss of €0.37 million for the period (H1 2022: loss of €0.76 million) after depreciation, amortisation and warrant costs of €0.13 million (H1 2022: €0.09 million).

 

Due to primarily the depreciation of the Chinese currency of 6% against the euro during the first half of 2023, other comprehensive income amounted to €0.09 million (H1 2022: (€0.04 million)). Net equity at the end of the period amounted to €0.06 million (H1 2022: ((€1.54 million)).

 

Cash flow from operations produced a net outflow of €1.1 million for the period, compared to a net inflow of €0.1 million in H1 2022. Movements in working capital items amounted to a net outflow of €0.6 million for the period compared to a net inflow of €1.2 million in H1 2022.

 

 

Outlook

 

At the start of the second half, the Company had an order backlog of €3.8 million for delivery during the year. However, current customer delivery schedules for the second half now amount to approximately €5.2 million, of which €2.2 million has already been delivered .

 

In addition, at the end of August the Company had outstanding quotations with customers amounting to approximately €6.0 million, the vast majority of which are expected to be rolled over into 2024 in light of the timing of the final order and assembly capacity.

 

Regarding the above-mentioned US GE 1.6MW project, this project was initially planned for a full roll-out in 2023. However, this is now expected to be transformed into a consultancy contract with revenue in the order of €0.8-1.0 million primarily spread over 2024.

 

Given the above the Company expects to meet the current market expectations for 2023 including net revenue of approximately €6.5 million - an increase of approximately 260% compared to 2022 (2022: €1.8 million), and an EBITDA result of approximately €1.5-1.6 million compared to an EBITDA loss of €1.1 million realised in 2022. This would represent a record-breaking revenue for the Company and its maiden profit.

 

As the Company expects to see continued growth in China in 2024 a main focus for the second half of 2023 is to increase production capacity further to approximately 150 systems per month by the end of the year.

 

 

 

    

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2023


 

Six months

ended 30 June 2023

 

Six months ended 30

June 2022

 

Year ended 31 December

2022



(unaudited)

(unaudited)

(audited)


Note

Revenue


1,347,072

420,555

1,853,249

Cost of goods sold


(607,584)

(225,853)

(906,638)

Gross profit


739,488

194,702

946,611

Administrative expenses


(1,155,834)

(1,047,542)

(1,953,607)

Other operating income

Exceptional (expenses)/income


16,115

-

16,129

-

32,260

(89,038)

Loss from operations


(400,231)

(836,711)

(1,063,774)

Finance expenses


(87,658)

(43,606)

(230,734)

Loss before taxation


(487,889)

(880,317)

(1,294,508)

 

Taxation


 

117,818

 

124,997

 

218,837

Loss for the period


(370,071)

(755,320)

(1,075,671)

Other comprehensive income





Items that will or maybe reclassified to profit or loss:





Exchange losses arising on translation of foreign operations


 

90,240

 

(37,554)

 

22,817

 

Total comprehensive loss for the period


 

(279,831)

 

(792,874)

 

(1,052,854)

 

 

Loss per share for loss attributable to the ordinary equity holders of Windar Photonics plc





Basic and diluted, cents per share

2

(0,6)

(1.4)

(1,9)

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023

 



 

As at 30 June 2023

 

As at 30 June 2022

As at 31 December

2022



(unaudited)

(unaudited)

(audited)


Notes

Assets





Non-current assets





Intangible assets


1,182,304

1,215,454

1,196,996

Property, plant & equipment

Right of use asset


191,371

74,260

1,815

-

106,983

-

Deposits


38,837

26,601

28,994

Total non-current assets


1,486,772

1,243,870

1,332,973

 

 

 

Current assets





Inventory

3

885,751

858,407

699,236

Trade receivables

4

482,310

482,310

389,652

Other receivables

4

217,998

16,717

197,496

Tax credit receivables

4

337,722

373,853

218,928

  Prepayments


93,911

24,785

47,860

  Cash and cash equivalents


284,830

109,533

1,404,073

Total current assets


2,302,522

1,671,727

2,957,245






Total assets


3,789,294

2,915,597

4,290,218

 

Equity





Share capital

5

834,771

675,664

834,771

Share premium


16,479,150

14,502,837

16,479,150

Merger reserve


2,910,866

2,910,866

2,910,866

Foreign currency reserve


24,663

(126,248)

(65,577)

Accumulated loss


(20,188,163)

(19,505,475)

(19,818,092)

Total equity


61,287

(1,542,356)

341,118

 

Non-current liabilities





Warranty provisions

Holiday Allowance provision

Right of use liability

 

    6

45,696

135,987

41,134

42,858

131,829

-

45,774

134,734

-

Loans

6

1,500,663

1,318,842

1,690,462

Total non-current liabilities


1,723,480

1,361,700

1,870,970

 

Current liabilities





Trade payables

7

358,130

754,981

264,083

Other payables and accruals

7

347,620

758,713

451,402

Contract liabilities

Right of use liability

7

7

940,956

27,422

1,048,039

-

1,205,531

-

Loans

7

330,399

534,520

157,114

Total current liabilities


2,004,527

3,096,252

2,078,130






Total liabilities


3,728,007

4,457,953

3,949,100






Total equity and liabilities


3,789,294

2,915,597

4,290,218

 

 

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2023

 


Six months

ended 30 June 2023

Six months

ended 30 June 2022

 

Year ended 31 December 2022


(unaudited)

(unaudited)

(audited)


Loss for the period before tax

(487,889)

(880,317)

(1,294,508)

Adjustments for:




Finance expenses

87,658

43,606

230,734

Amortisation

89,622

83,752

174,792

Depreciation

10,736

-

2,992

Received tax credit

-

-

265,510

Foreign exchange difference

90,240

(37,554)

22,817

Warrants expense

30,794

8,193

15,927


(178,839)

(782,320)

(581,736)

Movements in working capital




Changes in inventory

(186,515)

(163,439)

(4,268)

Changes in receivables

(113,160)

844,503

562,504

Changes in prepayments

(46,051)

9,170

(13,906)

Changes in deposits

(9,843)

(203)

(2,596)

Changes in trade payables

94,047

81,799

(280,247)

Changes in contract liabilities

(264,575)

96,433

253,926

Changes in warranty provision

(82)

6,708

9,620

Changes in other payables and provision

(103,781)

290,916

(306,832)

Cash flow (used in) operations

(808,799)

383,567

(363,535)

 

Investing activities




Payments for intangible assets

(192,953)

(221,298)

(297,540)

Grants received

115,971

130,078

121,019

Payments for tangible assets

(97,541)

-

(107,456)

Cash flow (used in) investing activities

(174,523)

(91,220)

(283,977)

 

Financing activities




Proceeds from issue of share capital

-

-

2,393,686

Costs associated with the issue of share capital

-

-

(258,266)

Proceeds from new long-term loans

 

-

373,055

Repayment of loans

(15,260)

(184,111)

(372,934)

Interest (paid)/received

(87,658)

(43,605)

(124,630)

Cash flow from financing activities

(102,918)

(227,716)

2,010,911

 

 

Net (decrease)/increase in cash and cash equivalents

 

 

(1,086,240)

 

 

64,631

 

 

1,363,399

Exchange differences

(33,003)

4,354

126

Cash and cash equivalents at the beginning of the period

1,404,073

40,548

40,548

 

Cash and cash equivalents at the end of the period

 

284,830

 

109,533

 

1,404,073

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2023

 


Share Capital

Share Premium

Merger reserve

Foreign currency reserve

Accumulated

Losses

 

Total


At 1 January 2022

 

New shares issued

675,664

 

          -

14,502,837

 

             -

2,910,866

 

-

    (88,394)

 

-

(18,758,348)

 

-

(757,375)

 

            -

Share option and warrant costs

-

-

-

-

8,193

8,193

Transaction with owners

-

-

-

-

8,193

8,193

 

Comprehensive loss for the period

 

-

 

-

 

-

 

-

 

(755,320)

 

(755,320)

Other comprehensive loss

-

-

-

(37,854)

-

(37,854)

Total comprehensive income

-

-

-

(37,854)

(755,320)

(793,174)








At 30 June 2022

675,664

14,502,837

2,910,866

(126,248)

(19,505,475)

(1,542,356)

 

New shares issued

 

159,107

 

2,234,579

 

-

 

-

 

-

 

2,393,686

Costs associated with capital raise

-

(258,266)

-

-

-

(258,266)

Share option and warrant costs

-

-

-

-

7,734

7,734

Transaction with owners

159,107

1,976,313

-

-

7,734

2,143,154

 

Comprehensive loss for the period

 

-

 

-

 

-

 

-

 

(320,351)

 

(320,351)

Other comprehensive income

-

-

-

60,671

-

60,671

Total comprehensive income

-

-

-

60,671

(320,351)

(259,680)








At 31 December 2022

834,771

16,479,150

2,910,866

(65,577)

(19,818,092)

341,118

New shares issued

-

-

-

-

-

-

Share option and warrant costs

-

-

-

-

-

-

Transaction with owners

-

-

-

-

-

-

 

Comprehensive loss for the period

 

-

 

-

 

-

 

-

 

(370,071)

 

(370,071)

Other comprehensive Income

-

-

-

90,240

-

90,240

Total comprehensive income

-

-

-

90,240

(370,071)

(344,831)








At 30 June 2023

834,771

16,479,150

2,910,866

24,663

(20,188,163)

61,287

 

1. BASIS OF PREPARATION

The financial information for the six months ended 30 June 2023 and 30 June 2022 does not constitute the Groups statutory financial statements for those periods with the meaning of Section 434(3) of the Companies Act 2006 and has neither been audited or reviewed pursuant to guidance issued by the Auditing Practices Board. The annual financial statements of Windar Photonics plc are prepared in accordance with International Financial Reporting Standards. The principal accounting policies used in preparing the Interim financial statements are those that the Group expects to apply in its financial statements for the year ended 31 December 2023 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2022. The comparative financial information for the year ended 31 December 2022 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2022 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2022 was unqualified but included a reference to the material uncertainty related to going concern in respect of the timing of future revenues without qualifying their report and did not contain a statement under section 498(2)-498(3) of the Companies Act 2006. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue operating for the next 12 months. Accordingly, they continue to adopt the going concern basis in preparing the half yearly condensed consolidated financial statements. This interim report was approved by the directors.

 

 

2.     Loss per share

 

The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:


Six months

ended 30 June 2023

Six months

ended 30 June 2022

Year ended 31 December

2022


Loss for the period

            (370,071)  

(755,320)            

(1,075,671)

Weighted average number of ordinary shares for the purpose of basic earnings per share

 

55,963,110

 

54,595,522

 

55,963,110

Basic loss and diluted, cents per share

                    (0,6)  

(1.4)                    

(1.9)

 

There is no dilutive effect of the warrants as the dilution would reduce the loss per share.

 

3.     Inventory


 

As at 30 June 2023

 

As at 30 June 2022

As at 31 December

2022


Raw materials

705,287

489,292

382,027

Work in progress

115,464

71,677

294,852

Finished goods

-

297,438

22,357

Inventory

820,751

858,407

699,236

 

 

4.     Trade and other receivables


 

As at 30 June 2023

 

As at 30 June 2022

As at 31 December

2022


Trade receivables

482,310

1,161,721

389,652

Less; provision for impairment of trade receivables

-

(873,289)

-

Trade receivables - net

482,310

288,432

389,652

Total financial assets other than cash and cash equivalents classified at amortised costs

 

482,310

 

288,432

 

389,652

Tax receivables

337,722

373,853

218,928

Other receivables

205,631

16,717

197,496

Total other receivables

543,353

390,570

416,424

 

Total trade and other receivables

 

1,025,663

 

679,002

 

806,076

Classified as follows: Current Portion

 

1,025,663

 

679,002

 

806,076

 

 

5.     Share capital

 


Number of

shares

 

Shares as 30 June 2022

54,595,524

675,664

Issue of shares for cash

1,367,586

159,107

 

Shares at 31 December 2022

 

55,963,110

 

834,771

 

Issue of shares for cash

 

-

 

-

 

Shares at 30 June 2023

 

55,963,110

 

834,771

 

At 30 June 2023, the share capital comprises 55,963,110 shares of 1 pence each.

 

 

6.     Borrowings

 

The carrying value and fair value of Group's borrowings are as follows:


Six months

ended 30 June 2023

Six months

ended 30 June 2022

Year ended 31 December

2022


 

Growth Fund Loans (including accrued interest)

 

1,831,062

 

1,721,533

 

1,847,576

Current portion of Growth Fund Loans

(330,399)

(534,520)

(157,114)

Holiday Accruals

135,987

131,829

134,734

Total non-current financial liabilities measured at amortised cost

 

1,636,650

 

1,318,842

 

1,825,196

 

The Growth Fund Loans include two separate loans. All conditions for the loans are unchanged to the position at the end of year 2022.

 

All loans are denominated in Danish Kroner.

 

 

 

7.     Trade and other payables

 


 

As at 30 June 2023

 

As at 30 June 2022

As at 31 December

2022



 



Trade payables

358,130

754,981

264,083

Other payables and accruals

Payables to Directors

347,620

-

758,713

-

410,600

40,802

Right of use liability

27,422

-

-

Current portion of loans

330,399

534,520

157,114

Total  financial  liabilities,  excluding  ´non-

current´ loans and borrowings classified as financial liabilities measured at amortised cost

 

1,063,571

 

2,048,214

 

872,599

Contract liabilities

 

940,956

 

1,048,039

 

1,205,531

Total trade and other payables

 

2,004,527

 

3,096,253

 

2,078,130

Classified as follows: Current Portion

 

2,004,527

 

3,096,253

 

2,078,130

 

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.

 

8.     Availability of Interim Report

 

Copies of the Interim Report will not be sent to shareholders but will be available from the Group's website www.investor.windarphotonics.com.

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