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LifeSafe Holdings Plc
Earnings Release • Sep 26, 2023
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Earnings Release
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National Storage Mechanism | Additional information 
RNS Number : 5755N
LifeSafe Holdings PLC
26 September 2023
| For immediate release | 26 September 2023 |
LifeSafe Holdings plc
('LifeSafe', the 'Group' or the 'Company')
Interim Results for the six months ended 30 June 2023
Strong revenue growth and first industrial agreement achieves a significant strategic milestone
LifeSafe (AIM:LIFS), a fire safety technology business with innovative fire extinguishing fluids and fire safety products, reports its unaudited Interim Results for the six months ended 30 June 2023 ('H1 2023' or 'the Period').
Financial highlights:
| · | Revenue more than doubled to £2.9 million (H1 2022: £1.3 million), already 72% of FY 2022 revenue and ahead of the Board's expectations |
| · | Gross profit of £1.7 million at 57.8% margin (H1 2022: £0.7 million at 55.5% margin) |
| · | Underlying loss before interest, tax, depreciation and amortisation1 ('underlying LBITDA') of £760,000 (H1 2022: underlying LBITDA of £681,000) |
| · | Capitalised product development spend of £161,000 (H1 2022: £184,000) |
| · | Cash and cash equivalents at 30 June 2023 of £24,000 (30 June 2022: £22,000); £1.21 million subsequently raised through the Company's placing, share subscription and retail offer in August 2023 |
| · | Net debt at 30 June 2023 of £440,000 (30 June 2022: net debt of £7,000) |
Operational highlights:
| · | Introduction of Lithium Thermal Runaway Fluid ('TRF') in January 2023 at Intersec, the world's leading event for emergency services, security and safety |
| · | Launched in the UK in April 2023 and in the US in July 2023 the StaySafe All-in-1 fire extinguisher, specifically designed to tackle ten different types of fire, replacing the successful StaySafe 5-in-1 fire extinguisher |
Post-period highlights:
| · | First industrial partnership with Wormald Fire & Security, Australia's biggest fire protection and safety business |
| · | StaySafe All-in-1 launched in Screwfix 850 store chain in the UK and online in September 2023 |
| · | Appointment to QBE Insurance Group's Solutions Panel in September 2023 as best-in-class supplier of choice to their global client network |
| · | On track to become EBITDA profitable on a monthly basis during Q4 2023 |
1 Underlying LBITDA represents loss for the period before finance expense, tax, depreciation and amortisation, and non-underlying items.
Commenting on the Interim Results, Dominic Berger, Chairman of LifeSafe, said:
"I am pleased to announce another positive set of financial results that reflect the continued growth and development of our business, driven by our dedicated team. Having listed on AIM just over 12 months ago, we have consistently outperformed our financial and strategic targets, all whilst ensuring that our potentially life-saving fire safety solutions are made increasingly available to customers globally. Our IPO occurred in the early stages of our growth and understanding of the market. It is safe to say we know more now than we did then, but nonetheless we have and will continue to learn and deliver on our journey.
"I am also delighted that we announced our first major partnership in the development of our industrial strategy with Wormald in Australia. This milestone is a long way ahead of our expectations even though we have been working and testing with Wormald for over 18 months. We are excited about how the partnership and endorsement of Wormald will now open a huge opportunity in the bulk supply of our fluids through similar partnerships globally.
"My thanks extend to the whole team at LifeSafe and the continued support of our shareholders, both new and old. We remain on course to deliver on our stated goals where every home should have a StaySafe and of being a global disruptor and leader in fire safety fluids."
Investor presentation
An in-person meeting for sell-side analysts will be held at 9.30am today at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London EC1A 4HD. Please contact FTI Consulting via [email protected] if you wish to join the meeting.
The Company will also be hosting an online presentation for retail investors to discuss the announcement on 27 September 2023 at 5.00pm. Please email [email protected] to register your interest.
This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
The person responsible for arranging the release of this announcement on behalf of the Company is Mike Stilwell, Chief Financial Officer of the Company.
For further enquiries:
| LifeSafe Holdings plc | Via FTI Consulting |
| Dominic Berger, Chairman | info@lifesafetechnologies.com |
| Neil Smith, Chief Executive Officer | |
| Mike Stilwell, Chief Financial Officer | |
| WH Ireland Limited (Nominated Adviser & Broker) | Tel: +44 (0) 20 7220 1666 |
| Chris Fielding | |
| Darshan Patel | |
| Isaac Hooper | |
| FTI Consulting (Financial Communications) | Tel: +44 (0) 20 3727 1000 |
| Tom Hufton | [email protected] |
| Harriet Jackson | |
| Liam Gerrard |
Notes to Editors
LifeSafe is a fire safety technology business that develops eco-friendly, novel and innovative fire extinguishing fluids and life-saving fire safety products. LifeSafe has developed a market disrupting range of eco-friendly fire safety protection products; a new patent-pending Thermal Runaway Fluid to combat lithium battery fires by permanently extinguishing and preventing re-ignition, and the StaySafe All-in-1, a handheld eco-friendly and fully recyclable extinguisher which is verified to extinguish ten different types of fire and the number one selling fire extinguisher on Amazon UK. LifeSafe is successfully creating new markets for the Group in fire safety through its innovative technologies, products, digital marketing and multi-channel sales; and is continuing to develop new fluid derivations for applications in various industrial market sectors.
LifeSafe was admitted to trading on AIM in July 2022 with the ticker LIFS.
For further information please visit: https://www.lifesafeholdingsplc.com.
LinkedIn: https://www.linkedin.com/company/lifesafe-technologies
Twitter: https://twitter.com/LifesafeT
Chairman's Statement
Business Review
I am delighted to report on the continued strong operational and strategic progress made by the Group in H1 2023. This progress is all the more significant considering it is just over a year since the Group was admitted to AIM and was able to access the funds required to progress the commercialisation of LifeSafe's core product containing its proprietary fire extinguishing fluid.
At almost £3 million, our revenue for H1 2023 represents 72% of that achieved in the whole of 2022 and is ahead of the Board's expectations. The StaySafe All-in-1 remains the number one best-selling fire extinguisher on Amazon UK.
What is particularly impressive, however, is at the same time as managing this considerable growth in the consumer channel, the LifeSafe team developed and launched the new StaySafe All-in-1 in the UK and US consumer markets and, subsequent to the Period end, achieved the significant strategic milestones of signing LifeSafe's first industrial partnership agreement with Wormald Fire & Security with the Group's new fluorine free lithium thermal runaway fluid and being appointed to QBE Insurance Group's Solutions Panel.
The industrial partnership with Wormald represents a key strategic development which could have only been achieved through the exceptional progress made in the consumer market and lays the foundations to access the enhanced margins of bulk fluid supply and international distribution agreements, which avoid many of the costs inherent in the direct consumer supply model.
I reaffirm that the Group remains firmly on track in executing its strategy to build a multi-channel, international fire safety business capable of delivering significant long-term value for our shareholders.
Results
LifeSafe's revenue for H1 2023 more than doubled to £2.9 million, compared with £1.3 million in the same period last year as the commercialisation of the Company's innovative, market disrupting eco-friendly fire extinguishing proposition continued ahead of the Board's expectations. Sales increased both in the UK, through the introduction of the StaySafe All-in-1 fire extinguisher, and in the US, with a full six months sales of the StaySafe 5-in-1 fire extinguisher since its introduction in the US market during H1 2022.
Gross profit for H1 2023 increased significantly to £1.7 million (H1 2022: £0.7 million) at a gross margin of 57.8% (H1 2022: 55.5%), in line with the Board's expectations despite the strengthening of sterling against the US dollar during the Period compared to the budgeted rate.
Underlying administrative expenses for H1 2023 increased to £2.5 million (H1 2022: £1.4 million) as the Group invested in digital marketing to drive sales with a corresponding increase in logistics costs, particularly in the US, and invested operationally in resource to address the increasing demands of supply chain, customer service and financial management.
The Group made an underlying loss before interest, tax, depreciation and amortisation1 ('LBITDA') of £760,000 (H1 2022: £681,000) before non-underlying share-based payment charges of £413,000 (H1 2022: non-underlying items of £895,000 comprising IPO costs and share-based payment charges).
Finance expenses of £23,000 were recorded in the Period (H1 2022: £573,000, of which £569,000 related to non-underlying interest on convertible loan notes which subsequently converted to equity on Admission to AIM).
The Group made an underlying loss before tax2 of £849,000 (H1 2022: loss of £733,000). After charging £413,000 for non-underlying costs in relation to share-based payment charges (H1 2022: total non-underlying charges of £1,464,000), the consolidated loss before tax for the Period was £1.3 million (H1 2022: loss of £2.2 million).
The basic and diluted earnings per share were (£0.06) (H1 2022: (£0.14)).
Cash and cash equivalents as at 30 June 2023 were £24,000 (H1 2022: £22,000). £1.21 million was subsequently raised through the Company's placing, share subscription and retail offer in August 2023 (described below). Net debt at 30 June 2023 was £440,000 (30 June 2022: net debt of £7,000).
Inventory at 30 June 2023 amounted to £1.0 million (30 June 2022: £0.3 million) as stock was procured in advance of expected demand to ensure this could be satisfied during the seasonally-stronger second half of the year, particularly for stock shipping to the US market. In 2022, 68% of the Company's revenue was generated in H2 2022, highlighting the importance of front-loading inventory to maintain product availability. The inventory balance reduced to £0.9 million at 31 August 2023 as stock began to be worked through.
Trade and other receivables at 30 June 2023 amounted to £436,000 and included £154,000 in relation to taxation subsequently received after the Period end (30 June 2022: £3.2 million, of which £3.0 million were committed subscriptions to the Company's placing of shares and Admission to AIM on 6 July 2022).
Trade and other payables at 30 June 2023 amounted to £782,000 and included £515,000 of trade creditors reflecting stock delivered in advance of the expected seasonally higher demand in H2 2023 (30 June 2022: £1,583,000, including IPO costs of £984,000 which were paid subsequently).
Borrowings at 30 June 2023 amounted to £464,000 (30 June 2022: £29,000) and included balances of £22,000 in relation to a Coronavirus Bounce Back Loan, £142,000 in relation to a supplier invoice finance facility announced on 31 March 2023 and originally drawn at £250,000 with final repayments on 31 October 2023, and £250,000 in relation to a trade finance facility announced on 5 June 2023 repayable in full on 30 October 2023.
1 Underlying LBITDA represents loss for the period before finance expense, tax, depreciation and amortisation, and non-underlying items.
2 Underlying loss before tax represents loss for the year before tax and non-underlying items.
Post balance sheet placing, share subscription and retail offer of shares
On 3 August 2023, the Company announced a placing and share subscription at £0.37 per share to raise approximately £0.94 million and £0.14 million, respectively, and up to £0.25 million through a retail offer. The placing was conducted in two tranches and resulted in the issue of 1,637,565 shares on 9 August 2023 and 936,900 on 22 August 2023, raising gross proceeds of £0.95 million. The share subscription resulted in the issue of 378,378 shares on 9 August 2023 raising gross proceeds of £0.14 million. The retail offer resulted in the issue of 315,090 shares on 25 August 2023 raising gross proceeds of £0.12 million. In total 3,267,933 shares were issued through the placing, share subscription and retail offer, raising gross proceeds of £1.21 million and taking the number of shares in issue to 25,375,983. The costs of issue amounted to £0.13 million.
We are grateful for the support of both new and existing shareholders, whose investment will be used to maximise the business opportunity in front of us.
Research and development, technology and intellectual property
Since the beginning of 2023, the Company has made a number of significant announcements as a result of accelerating the development of its strong pipeline of innovative new products and fluid derivatives in response to industry demand.
LifeSafe's Lithium TRF was announced in December 2022 and introduced to the industry in January 2023 at Intersec Dubai, the world's leading event for emergency services, security and safety. Lithium TRF, a variant of the Group's core eco-friendly patented fluid, is a new non-toxic, non-hazardous and fluorine free fluid designed to permanently extinguish and prevent the re-ignition of lithium battery fires. The Group has submitted UK and international patent applications to protect its innovation.
In April 2023, the new StaySafe All-in-1 fire extinguisher was launched in the UK featuring the Group's next generation fluid. The StaySafe All-in-1 is specifically designed to tackle ten different types of fire, replacing the Group's successful debut product, the StaySafe 5-in-1. The StaySafe All-in-1 was launched in the US in July 2023 and in the Screwfix chain of 850 stores in the UK and on its website in September 2023. The Group has submitted UK and international patent applications to protect its innovation.
The Group's fluorine free derivatives of its existing fluids have been developed in response to European legislation which, from July 2025, will ban the use of fire-fighting foam containing perfluorooctanoic acid ('PFOA'). This follows similar legislation in North America and Australia. The global market for soon to be banned foam extinguishers is valued at $1 billion per year (source: Grandview Research) representing a significant opportunity for LifeSafe.
The Group's fluorine free fluids provide an environmentally friendly solution to future proof portable and fixed fire extinguishing solutions ahead of the 2025 deadline and have been endorsed and chosen by Wormald Fire & Security which entered into a distribution agreement in Australia for LifeSafe's TRF in September 2023. Wormald is a leading provider of fire protection services in Australia with a 130-year heritage and was valued at US$1bn in 1990 when bought by Tyco. In 2016, Wormald was acquired by Evergreen Capital, LP, a New York based investment firm.
Capitalised expenditure on technology development during the six-month period amounted to £161,000 (H1 2022: £184,000).
LifeSafe's intellectual property is protected through the grant of two patents and patent applications for eight further fluid derivations across the UK and internationally.
The Board recognises the importance of protecting its intellectual property and rigorously guards its innovation. The Group employs an intellectual property attorney to protect its interests and has intellectual property defence and pursuit insurance to protect its investments.
Strategic partnerships
The Group announced earlier today the significant strategic milestone of signing its first industrial partnership agreement with Wormald Fire & Security. Under the strategic partnership agreement, LifeSafe will supply its new fluorine free, lithium ion TRF fire extinguishing fluid exclusively in Australia to Wormald for use in their range of fire safety equipment. In addition to the expected revenue benefits from the distribution of the Group's fluids, Wormald has provided LifeSafe with crucial introductions and expertise in helping to access other geographies and market sectors.
LifeSafe has also recently been appointed to QBE Insurance Group's Solutions Panel. The appointment represents the culmination of 14 months assessment and testing of the Group's range of fire extinguishing fluids and products. As well as generating revenue directly from recommendations to its customer base, QBE's powerful endorsement of the Group's fluids will be invaluable in building trust and credibility in the conversion of LifeSafe's growing industrial sales pipeline.
Outlook
As previously communicated, our laser focus so far in 2023 has been in continuing to grow consumer market penetration across all territories using our tried and tested digital marketing strategies. I am delighted that our significant revenue growth in H1 2023 demonstrates this has been achieved. Our recent fundraise has provided the working capital to satisfy this greater than expected growth by ensuring that sufficient stock is available, and in the right place at the right time, to meet the expected seasonally-weighted demand in H2 2023.
We remain confident that we will achieve EBITDA profitability on a monthly basis during Q4 2023 despite the marketing and logistics costs required to deliver the sales growth. We are looking forward to further scaling the consumer business in 2024 and enhancing our margins by commencing production in the US. Given the seasonally-weighted second half of the year, management forecasts for 2023 year remain unchanged at this stage.
What is particularly exciting is the excellent progress we have made in achieving the strategic milestone of signing the first industrial partnership agreement with Wormald Fire & Security and our appointment to QBE Insurance Group's Solutions Panel. This lays the foundations to accessing the enhanced margins of bulk fluid supply and international distribution agreements, which achieve sales without the scale of marketing, commission or logistics costs inherent in the direct-to-consumer supply model. It is the evolution of LifeSafe as a recognised, leading fluid technology business which will unlock the highest long-term value for shareholders but would be impossible without the credibility and scale generated by the digital first consumer model which has resonated in the wider business-to-business fire safety market.
Notwithstanding the still huge and untapped addressable market in the consumer channel, the Board is very excited about these recent industry endorsements and expects them to be the first of many potential game-changing opportunities in the industrial supply of LifeSafe's fluids. As such, the Group is well placed to drive further growth and is confident of delivering shareholder value.
Dominic Berger
Chairman
26 September 2023
Consolidated statement of profit or loss and other comprehensive income
For the six months ended 30 June 2023
| (Unaudited) | (Unaudited) | (Audited) | ||||||||
| Six months ended 30 June 2023 | Six months ended 30 June 2022 | Year ended 31 December 2022 | ||||||||
| Note | Before non-underlying items £000 |
Non-underlying items (note 5) £000 |
Total £000 |
Before non-underlying items £000 |
Non-underlying items (note 5) £000 |
Total £000 |
Before non-underlying items £000 |
Non-underlying items (note 5) £000 |
Total £000 |
|
| Revenue | 3 | 2,890 | - | 2,890 | 1,277 | - | 1,277 | 4,028 | - | 4,028 |
| Cost of sales | (1,220) | - | (1,220) | (568) | - | (568) | (1,732) | - | (1,732) | |
| Gross profit | 1,670 | - | 1,670 | 709 | - | 709 | 2,296 | - | 2,296 | |
| Administrative expenses | (2,496) | (413) | (2,909) | (1,438) | (895) | (2,333) | (3,676) | (1,415) | (5,091) | |
| Loss from operations | (826) | (413) | (1,239) | (729) | (895) | (1,624) | (1,380) | (1,415) | (2,795) | |
| Finance expense | 6,5 | (23) | - | (23) | (4) | (569) | (573) | (5) | (187) | (192) |
| Loss before tax | (849) | (413) | (1,262) | (733) | (1,464) | (2,197) | (1,385) | (1,602) | (2,987) | |
| Taxation | 7 | (52) | - | (52) | - | - | - | 173 | - | 173 |
| Loss for the period | (901) | (413) | (1,314) | (733) | (1,464) | (2,197) | (1,212) | (1,602) | (2,814) | |
| Other comprehensive income | ||||||||||
| Total other comprehensive income | - | - | - | - | - | - | - | - | - | |
| Total comprehensive expense | (901) | (413) | (1,314) | (733) | (1,464) | (2,197) | (1,212) | (1,602) | (2,814) | |
| Basic and diluted loss per share (£) | 8 | (0.06) | (0.14) | (0.15) |
All amounts relate to continuing activities.
Consolidated statement of financial position
As at 30 June 2023
| Note | (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Non-current assets | ||||
| Intangible assets | 580 | 302 | 483 | |
| Property, plant and equipment | 12 | 9 | 10 | |
| 592 | 311 | 493 | ||
| Current assets | ||||
| Inventories | 1,025 | 329 | 442 | |
| Trade and other receivables | 9 | 436 | 3,230 | 659 |
| Cash and cash equivalents | 10 | 24 | 22 | 1,166 |
| 1,485 | 3,581 | 2,267 | ||
| Total assets | 2,077 | 3,892 | 2,760 | |
| Current liabilities | ||||
| Trade and other payables | 11 | (782) | (1,583) | (1,002) |
| Convertible loan notes | 12 | - | (1,699) | - |
| Borrowings | 13 | (449) | (7) | (7) |
| Other provisions | (24) | (31) | (24) | |
| (1,255) | (3,320) | (1,033) | ||
| Non-current liabilities | ||||
| Borrowings | 13 | (15) | (22) | (19) |
| (15) | (22) | (19) | ||
| Total liabilities | (1,270) | (3,342) | (1,052) | |
| Net assets | 807 | 550 | 1,708 | |
| Equity attributable to equity holders of the Parent | ||||
| Called up share capital | 14 | 221 | 154 | 221 |
| Share premium account | 15 | 4,152 | 250 | 4,152 |
| Share-based payment reserve | 15 | 1,270 | 241 | 857 |
| Convertible loan note reserve | 15 | - | 354 | - |
| Shares to be issued reserve | 15 | - | 2,633 | - |
| Retained earnings | 15 | (4,836) | (3,082) | (3,522) |
| Total equity | 807 | 550 | 1,708 |
Consolidated statement of changes in equity
For the six months ended 30 June 2023
| Called up share capital £000 |
Share premium account £000 |
Share-based payment reserve £000 |
Convertible loan note reserve £000 | Retained earnings £000 |
Total equity £000 |
|
| Balance at 1 January 2022 (Audited) | 3 | 4,627 | 114 | 171 | (5,241) | (326) |
| Comprehensive income | ||||||
| Loss for the year | - | - | - | - | (2,814) | (2,814) |
| Share-based payments | - | - | 630 | - | - | 630 |
| Issue of warrants | - | (113) | 113 | - | - | - |
| Transactions with owners: | ||||||
| Bonus issue of shares | 151 | - | - | - | (151) | - |
| Cancellation of share premium | - | (4,464) | - | - | 4,464 | - |
| Shares issued for cash | 40 | 3,047 | - | - | - | 3,087 |
| Share issue costs | - | (368) | - | - | - | (368) |
| Convertible loan notes issued | - | - | - | 183 | - | 183 |
| Convertible loan notes exercised | 27 | 1,423 | - | (354) | 220 | 1,316 |
| Balance at 31 December 2022 (Audited) | 221 | 4,152 | 857 | - | (3,522) | 1,708 |
| Balance at 1 January 2023 (Audited) | 221 | 4,152 | 857 | - | (3,522) | 1,708 |
| Comprehensive income | ||||||
| Loss for the period | - | - | - | - | (1,314) | (1,314) |
| Share-based payments | - | - | 413 | - | - | 413 |
| Balance at 30 June 2023 (Unaudited) | 221 | 4,152 | 1,270 | - | (4,836) | 807 |
Consolidated statement of cash flows
For the six months ended 30 June 2023
| Note | (Unaudited) Six months ended 30 June 2023 £000 |
(Unaudited) Six months ended 30 June 2022 £000 |
(Audited) Year ended 31 Dec 2022 £000 |
|
| Cash flows from operating activities | ||||
| Loss before taxation from continuing operations | (1,262) | (2,197) | (2,987) | |
| Adjustments for non-cash/non-operating items: | ||||
| Depreciation of property, plant and equipment | 1 | 1 | 2 | |
| Amortisation of intangible assets | 65 | 47 | 90 | |
| IPO costs | - | - | 727 | |
| Equity-settled share-based payments | 413 | 170 | 630 | |
| Finance expense | 22 | 569 | 192 | |
| Operating cash flows before movements in working capital |
(761) | (1,410) | (1,346) | |
| Increase in inventories | (520) | (139) | (252) | |
| Decrease/(increase) in trade and other receivables | 67 | (463) | (357) | |
| (Decrease)/increase in trade and other payables | (218) | 1,321 | 734 | |
| Cash used in operations | (1,432) | (691) | (1,221) | |
| Corporation tax received | 81 | - | - | |
| Net cash used in operating activities | (1,351) | (691) | (1,221) | |
| Cash flows used in investing activities | ||||
| Purchase of intangibles | (161) | (184) | (408) | |
| Purchase of property, plant and equipment | (4) | - | (1) | |
| Net cash used in investing activities | (165) | (184) | (409) | |
| Cash flows from financing activities | ||||
| Shares issued for cash (net of expenses) | - | 87 | 1,993 | |
| Proceeds from borrowings | 505 | - | - | |
| Repayment of borrowings | (118) | (4) | (7) | |
| Proceeds from issue of convertible loans | - | 750 | 750 | |
| Other interest paid | (13) | - | (4) | |
| Net cash generated by financing activities | 374 | 833 | 2,732 | |
| Net (decrease)/increase in cash and cash equivalents | (1,142) | (42) | 1,102 | |
| Cash and cash equivalents at the beginning of period | 1,166 | 64 | 64 | |
| Cash and cash equivalents at the end of period | 10 | 24 | 22 | 1,166 |
Notes to the unaudited condensed interim consolidated financial statements
1. General information
These consolidated interim financial statements were approved by the Board of Directors on 26 September 2023.
2. Basis of preparation
These unaudited consolidated interim financial statements of the Group are for the six months ended 30 June 2023.
The condensed consolidated interim financial statements for the six months to 30 June 2023 do not include all the information and disclosures required in the annual financial statements and have not been audited or reviewed by an auditor pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Group's financial position and performance in the period.
The condensed consolidated interim financial statements for the six months to 30 June 2023 have been prepared on the basis of the accounting policies expected to be adopted for the year ending 31 December 2023. These accounting policies are drawn up in accordance with adopted International Accounting Standards ('IAS') and International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board and adopted by the EU.
AIM-listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.
3. Revenue from contracts with customers
| Geographic reporting | (Unaudited) Six months ended 30 June 2023 £000 |
(Unaudited) Six months ended 30 June 2022 £000 |
(Audited) Year ended 31 Dec 2022 £000 |
| Revenue | |||
| United Kingdom | 806 | 631 | 1,451 |
| North America | 2,067 | 561 | 2,372 |
| Europe | 17 | 85 | 180 |
| Rest of the World | - | - | 25 |
| 2,890 | 1,277 | 4,028 |
During H1 2023 the Group's supply chain resources were focussed on satisfying the increasing demand in the UK and the US. A new production partner for the European market has been sourced with increased sales expected in H2 2023.
4. Segmental reporting
The Chief Operating Decision Maker ('CODM') has been determined to be the Board of Directors. The CODM reviews the Group's internal reporting in order to assess performance and allocate resources. The CODM has determined that there is one single operating segment being the sale of fire extinguishing and related products. Information concerning geographical revenue is disclosed in note 3.
5. Non-underlying items
| (Unaudited) Six months ended 30 June 2023 £000 |
(Unaudited) Six months ended 30 June 2022 £000 |
(Audited) Year ended 31 Dec 2022 £000 |
|
| Share-based payment charges | 413 | 170 | 630 |
| IPO costs | - | 725 | 727 |
| Other non-underlying costs | - | - | 58 |
| Within administrative expenses | 413 | 895 | 1,415 |
| Convertible loan note interest | - | 569 | 187 |
| Within finance expense | - | 569 | 187 |
| 413 | 1,464 | 1,602 |
Share-based payment charges
The Group operates equity-settled share-based remuneration schemes for employees. The terms and conditions of the grants are detailed below:
| Date of grant | No. of options |
Exercise price (£) | Vesting conditions | Contractual life of options |
| 30 September 20211 | 1,495,650 | 0.48 | IPO | 10 years |
| 11 October 20211 | 1,645,200 | 0.48 | IPO/market capitalisation | 10 years |
| 29 March 20221 | 1,645,200 | 0.16 | 12 months from admission date | 10 years |
| 26 July 2022 | 1,167,301 | 0.75 | Total shareholder return | 10 years |
| 13 October 2022 | 974,965 | 0.75 | Total shareholder return | 10 years |
1 The number of share options granted, and the corresponding exercise price, are shown after the Company's 49 for 1 bonus issue of shares on 9 May 2022.
6. Finance expense
| (Unaudited) Six months ended 30 June 2023 £000 |
(Unaudited) Six months ended 30 June 2022 £000 |
(Audited) Year ended 31 Dec 2022 £000 |
|
| Interest on bank loans | 1 | 4 | 5 |
| Interest on convertible loan notes | - | 569 | 187 |
| Interest on other loans | 22 | - | - |
| 23 | 573 | 192 |
7. Income tax expense
No income has yet been recognised in H1 2023 in relation to R&D tax credits available from HMRC through the SME R&D relief scheme for 2023. The charge of £52,000 in the Period relates to an adjustment to the R&D tax credit estimate for 2022 recognised in the year ended 31 December 2022.
8. Loss per share
Loss per share is calculated as follows:
| (Unaudited) Six months ended 30 June 2023 |
(Unaudited) Six months ended 30 June 2022 |
(Audited) Year ended 31 Dec 2022 |
|
| Basic and diluted loss per share (£) | (0.06) | (0.14) | (0.15) |
The calculations of basic and diluted loss per share are based upon:
| Loss for the period attributable to owners of the Parent (£000) | (1,314) | (2,197) | (2,814) |
| Weighted average number of ordinary shares | 22,108,050 | 15,391,302 | 18,666,870 |
The calculation of the basic loss per share is based on the results attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.
The weighted average number of shares in issue is used as the denominator in calculating the basic loss per share. As the Group is loss making the effect of instruments that convert into ordinary shares is considered anti-dilutive, hence there is no difference between the diluted and non-diluted loss per share.
9. Trade and other receivables
| (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Amounts falling due within one year: | |||
| Trade receivables | 24 | 19 | 17 |
| Other receivables | 119 | 3,061 | 160 |
| Taxation and social security | 154 | 140 | 326 |
| Prepayments and accrued income | 139 | 10 | 156 |
| 436 | 3,230 | 659 |
Other receivables at 30 June 2022 included £3,000,000 of committed subscriptions to the Company's placing of shares and Admission to AIM on 6 July 2022. The committed subscriptions were in the form of irrevocable placing letters held by the Company's Broker and Nominated Adviser.
10. Cash and cash equivalents
| (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Cash at bank available on demand | 24 | 22 | 1,166 |
| 24 | 22 | 1,166 |
11. Trade and other payables
| (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Trade payables | 515 | 513 | 665 |
| Other payables | 2 | 110 | 61 |
| Accruals and deferred income | 113 | 896 | 181 |
| Other taxation and social security | 152 | 64 | 95 |
| 782 | 1,583 | 1,002 |
Trade payables and accruals and deferred income at 30 June 2022 included £984,000 of IPO costs paid after that date.
12. Convertible loan notes
| (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Amounts falling due within one year: | |||
| Convertible loan notes | - | 1,699 | - |
| - | 1,699 | - |
On Admission to AIM on 6 July 2022, all outstanding convertible loans converted to equity with the Company issuing 2,716,550 ordinary shares to the providers of all convertible loans outstanding at 30 June 2022.
13. Borrowings
| (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Current: | |||
| Bank loans | 7 | 7 | 7 |
| Other loans | 442 | - | - |
| Non-current: | |||
| Bank loans | 15 | 22 | 19 |
| 464 | 29 | 26 |
Bank loans comprise a Coronavirus Bounce Back Loan Scheme loan provided by HSBC. The loan was taken out in May 2020 and matures five years after this date.
Other loans include £142,000 in relation to a supplier invoice finance facility announced on 31 March 2023 and originally drawn at £250,000 with final repayments on 31 October 2023, and £250,000 in relation to a trade finance facility announced on 5 June 2023 repayable in full on 30 October 2023.
14. Share capital
| (Unaudited) 30 June 2023 £000 |
(Unaudited) 30 June 2022 £000 |
(Audited) 31 Dec 2022 £000 |
|
| Allotted, called up and fully paid | |||
| Ordinary shares of £0.01 each | 221 | 154 | 221 |
| 221 | 154 | 221 |
Called up share capital
Called up share capital represents the nominal value of shares that have been issued.
All classes of shares have full voting, dividends, and capital distribution rights.
Further to the Period end, the Company issued 3,267,933 ordinary shares taking the number of shares in issue to 25,375,983 (see note 16).
15. Reserves
Share premium account
This represents the excess value recognised from the issue of ordinary shares above nominal value.
Share-based payment reserve
This represents the cumulative fair value of share options charged to the consolidated statement of comprehensive income net of the transfers to the profit and loss reserve on exercised and cancelled/lapsed options.
Retained earnings
This represents cumulative net gains and losses less distributions made.
16. Post balance sheet events
On 3 August 2023, the Company announced a proposed placing and share subscription at £0.37 per share to raise approximately £0.94 million and £0.14 million respectively, and up to £0.25 million through a retail offer.
The proposed placing was conducted in two tranches and resulted in the issue of 1,637,565 shares on 9 August 2023 and 936,900 on 22 August 2023, raising gross proceeds of £0.95 million. The share subscription resulted in the issue of 378,378 shares on 9 August 2023 raising gross proceeds of £0.14 million. The retail offer resulted in the issue of 315,090 shares on 25 August 2023 raising gross proceeds of £0.12 million.
In total 3,267,933 shares were issued through the placing, share subscription and retail offer, raising gross proceeds of £1.21 million and taking the number of shares in issue to 25,375,983. The costs of issue amounted to £0.13 million.
On 22 August 2023, a General Meeting of the Company was held in which the Directors obtained authority to allot certain of the placing and retail offer shares. In addition to this specific authority, the Board also obtained the approval of shareholders to give the Directors the additional general authority to freely allot up to 10% of the enlarged share capital.
17. Availability
Further copies of this interim announcement are available on the LifeSafe Holdings plc investor relations website, www.lifesafeholdingsplc.com.
- Ends -
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