AI Terminal
EARNZ PLC
Quarterly Report • Sep 7, 2020
7609_ir_2020-09-07_b15ca8bd-0ad8-4eab-98be-0d02c1dc031b.html
Quarterly Report
Open in ViewerOpens in native device viewer
National Storage Mechanism | Additional information 
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 [email protected] |
|
| WH Ireland Limited (NOMAD and Broker) | Tel: +44 (0)20 7220 1666 | |
| Chris Hardie (Corporate Finance) [email protected] |
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 | 588,858 | 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR KKABPOBKDCCK