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Windar Photonics PLC - Interim Results

RNS Number : 0489O
Windar Photonics PLC
30 September 2019
 

30 September 2019

 

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 2019

 

Windar Photonics plc (AIM:WPHO), the technology group that has developed a cost efficient and innovative LiDAR wind sensor for use on electricity generating wind turbines, is pleased to announce its unaudited interim results for the six months ended 30 June 2019.

 

Highlights for the first six months of 2019:

 

·     Revenue of €0.7 million (H1 2018: €1.7 million) due to the rescheduling of customer orders from H1 to H2 and decision to terminate the Company's relationship with a Chinese distributer, better positioning Windar for future OEM contracts

·     OEM discussions are progressing positively and Windar anticipates receiving first orders for LiDAR roll-out within the strategically important OEM market in the near future

·     Gross profit of €0.4 million (H1 2018: €0.8 million)

·     Gross margin for the period was consistent with prior period at 49.2% (H1 2018: 49.1%)

·    Operating costs increased to €1.5 million including depreciation, amortisation and warrant costs (H1 2018: €1.1 million)

·     Net loss of €1.0 million (H1 2018: €0.3 million)

·     Cash held at the end of the period amounted to €0.3 million (H1 2018: 0.3 million). In addition, the Company had restricted cash of €0.4 million (H1 2018: €0.3 million)

 

Jørgen Korsgaard Jensen, Chief Executive Officer of the Company, commented: "Although our results for the period have been affected by some customer rescheduling and a decision to position ourselves more strongly for OEM contracts currently under negotiation, we currently expect to achieve a revenue for the full year 2019 equal to or better than 2018. The traction we are experiencing with customers is pleasing and we look forward to updating the market regarding progress being made in relation to our OEM and IPP strategies in the coming months."

 

 

 

For further information:

 

Windar Photonics plc

Jørgen Korsgaard Jensen, CEO

+4524234930
 

Cantor Fitzgerald Europe         

Nominated Adviser and Broker

David Foreman (Corporate Finance)

Keith Dowsing (Sales)

+44 (0)20 7894 7000


 

Newgate Communications

Financial PR

Elisabeth Cowell

Adam Lloyd

Tom Carnegie

+44 (0)20 7680 6550

 

The person responsible for arranging the release of this announcement on behalf of Windar is Jørgen Korsgaard Jensen. 

 

About Windar:

Windar Photonics is a technology group that develops cost-efficient and innovative Light Detection and Ranging ("LiDAR") optimisation systems for use on electricity generating wind turbines. LiDAR wind sensors in general are designed to remotely measure wind speed and direction.

 

http://investor.windarphotonics.com 

 

CHAIRMAN'S STATEMENT

 

The results for the first six months of 2019 were impacted by two factors. Firstly, in relation to our retro-fit product, WindEYE, we saw a number of contracted orders in Asia re-scheduled for delivery in the second half of the financial year instead of the first half of 2019. Secondly, the Company decided to terminate one of its distributor relationships in China in order to better position itself strategically in this world leading OEM market. Certain provisions in the agreement with that distributer had the potential to compromise major OEM agreements that the Group is currently advancing. 

 

While the results for the first half of 2019 appear disappointing, these do not reflect the progress Windar is making in terms of securing volume sales in the OEM market. Pleasingly, the Company has expanded the number of OEM test projects underway and has achieved final approvals from some major OEMs. We expect to reach the important milestone of receiving first orders for LiDAR roll-out within the strategically important OEM market in the near future.

 

R&D remains an important part of our business and in the first half of 2019 two major projects were completed. New technology has been installed into our product offerings, enhancing our value proposition for customers. Accordingly, both our future OEM and retro-fit customers can now benefit from our wake technology, which both detects wake scenarios and demonstrates strategies for turbine optimisation in these scenarios. We have also expanded our WindTimizer retro-fit plug'n'play solution for yaw optimisation so that it handles analogue sensor interfaces. This will significantly expand the market opportunities for our retro-fit product in Asia and beyond.

 

Importantly, and whilst it has taken longer than the Board originally envisaged, we also expect to see deliveries through our distribution agreement with Vestas in H2 2019. These deliveries will strengthen the Group's revenue from the IPP retrofit market. 

 

Financial Overview

 

Overall, the Group realised a net loss of €1.0 million for the period (H1 2018: €0.3 million loss) after depreciation, amortisation and warrant costs of €0.14 million (H1 2018: €0.17 million).

 

Cash flow from operations produced a net outflow of €1.7 million for the period compared to a net outflow of €0.8 million in H1 2018. The increased outflow during the period was primarily driven by the operational results combined with an increase in inventory of €0.4 million during the period, in anticipation of an increase in orders for our retro-fit WindEYE product.

 

Trade receivables (net of impairment provision) increased to €788k during the period, principally due to the timing of several deliveries in the second quarter. 

 

Outlook

 

Based upon current traction with our customers and our increased product offering, the Directors believe the Group is well positioned for substantial growth in the future. With our knowledge at present, we expect to recoup the ground lost in the first half and generate revenue for the full year 2019 equal to or better than 2018.  Consequently, the net result in the second half of 2019 is expected to show a substantial improvement to our H1 performance and combined with an anticipated reduction of the inventory as at 30 June 2019, the Board are expect the Group will generate positive operating cash flows in the second half of 2019 and an increase in net cash available at the full financial year end. 

 

 

 

Johan Blach Petersen

Chairman

 

 

 

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2019

 

 

 

Six months ended

30 June 2019

Six months ended 30 June 2018

Year ended

31 December 2018

 

 

(unaudited)

(unaudited)

(audited)

 

Note

 

 

 

 

 

Revenue

        

730,597

1,671,587         

3,499,867

Cost of goods sold

 

(371,218)       

(850,433)

(1,744,571)      

 

 

 

 

 

Gross profit

 

359,379

821,155      

1,755,296      

 

 

 

 

 

Administrative expenses

 

(1,451,745)

(1,102,849)

(2,391,798)

Impairment loss

 

-

-

(39,182)

Other operating income

 

16,075

34,326

32,201

 

 

 

 

 

Loss from operations

    

(1,076,291)  

(247,367)

   (643,483)

 

 

 

 

 

Finance expenses

        

(53,081)                 

(59,894)

          (269,925)

 

 

 

 

 

Loss before taxation

 

(1,129,372)  

(307,261)

   (913,408)

 

 

 

 

 

Taxation

        

90,437                 

 

12,763

                  120,436

 

 

 

 

 

Loss for the period

 

(1,038,935)  

(294,498)

   (792,972)

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that will or maybe reclassified to profit or loss:

 

 

 

 

Exchange losses arising on translation of foreign   operations

 

5,094

(6,207)

(2,125) 

Total comprehensive loss for the period

 

(1,033,841)   

 

(300,705)

    (795,097)

 

 

 

 

 

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

 

 

 

 

Basic and diluted, cents per share

       2

(2.3)          

(0.70)

(1.8)

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

 

 

 

 

As at
30 June 2019

As at
30 June 2018

As at
31 December 2018

 

 

(unaudited)

(unaudited)

(audited)

 

Notes

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

976,133

847,300

982,888

Property, plant & equipment

 

89,692

99,491

  110,788

Deposits

 

43,796

47,448                  

46,285                  

 Total non-current assets

 

1,109,621

994,238

1,139,961

 

 

 

 

 

 Current assets

 

 

 

 

 Inventory

3

1,088,878

654,500

726,999

 Trade receivables

4

787,696

951,793

             638,138

 Other receivables

4

378,062

275,366

       286,473

 Prepayments

 

65,412

55,971

83,763

 Restricted cash and cash equivalents

 

368,000

312,864

518,138

 Cash and cash equivalents

 

268,581     

260,606

      1,721,803

 Total current assets

 

2,956,629

2,511,100

   3,975,314

 

 

 

 

 

 Total assets

 

4,066,250

3,505,338

5,115,275

 

 

 

 

 

 Equity 

 

 

 

 

 Share capital

5

560,859

530,543  

560,859  

 Share premium

 

12,558,434

   10,281,073

   12,558,434

 Merger reserve

 

2,910,866

2,910,866

2,910,866

 Foreign currency reserve

 

(15,319)

   (25,797)

   (21,715)

 Accumulated loss

 

(14,297,994)

     (12,765,726)

     (13,287,757)

 Total equity

 

1,716,846

930,959

2,720,687

 

 

 

 

 

 Non-current liabilities

 

 

 

 

 Warranty provisions

 

78,461

74,659    

     78,422

Loans

6

1,193,867

           1,080,485

           1,135,744

 Total non-current liabilities

 

1,272,328

1,155,144

           1,214,166

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

7

523,745

815,532

492,822

Other liabilities

7

376,930

386,477

             588,456

Invoice discounting

7

143,532

205,717

10,735

Deferred revenue

7

27,473

6,709

83,169

Loans

7

5,396

4,800

5,240

 Total current liabilities

 

1,077,076

1,419,235

1,180,422

 

 

 

 

 

 Total liabilities

 

2,349,404

2,574,379

2,394,588

 

 

 

 

 

Total equity and liabilities

 

4,066,250

3,505,338

5,115,275

 

 

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2019

 

 

 

 

Six months ended

30 June 2019

 

Six months ended

30 June 2018

Year ended

31 December 2018

 

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

 

 

 Loss for the period before tax

 

(1,129,372)

   (307,261)

   (913,408)

 

 

 

 

 

 Adjustments for:

 

 

 

 

 Finance expenses

 

53,081

59,894

269,925

 Amortisation

 

89,417

104,061

189,557

 Depreciation

 

21,164

20,141

64,078

 Received tax credit

 

-

-

66,095

 Foreign exchange difference

 

5,094

(6,207)

(84,759)

 Warrants expense

 

30,000

50,000

26,443

 

 

(930,616)

(79,372)

(382,069)

 

 

 

 

 

 Movements in working capital

 

 

 

 

 Changes in inventory

 

(361,880)

85,110

12,611

 Changes in receivables

 

(150,633)

(616,459)

(285,731)

 Changes in trade payables

 

30,376

(229,984)

(552,147)

 Changes in deferred revenue

 

(55,696)

(7)

76,453

 Changes in warranty provision

 

39

(74)

6,218

 Changes in other payables and provision

 

(190,529)

77,017

263,442

 Cash flow (used in) operations

 

(1,658,939)

(763,769)

(861,223)

 

 

 

 

 

 Investing activities

 

 

 

 

 Payments for intangible assets

 

(79,497)

(170,084)

(415,456)

 Grants received

 

-

78,172

108,779

 Payments for tangible assets

 

-

-

(68,125)

 Cash flow (used in) investing activities

 

(79,497)

(91,912)

(374,802)

 

 

 

 

 

 Financing activities

 

 

 

 

 Proceeds from issue of share capital

 

-

-

2,500,877

 Costs associated with the issue of share capital

 

-

-

(193,199)

 (Reduction) / proceeds from invoice discounting

 

(2,158)

84,508

(110,474)

 (Decrease)/ increase restricted cash balances

 

282,935

(78,172)

(283,446)

 Repayment of loans

 

(2,732)

(3,727)

(4,579)

 Foreign exchange rate gains/(losses)

 

-

22,886

-

 Interest (paid)

 

7,200

(22,377)

(66,537)

 Cash flow from financing activities

 

285,245

3,118

1,842,642

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(1,453,191)

(852,563)

606,617

Exchange differences

 

(31)

(3,334)

(1,317)

Cash and cash equivalents at the beginning of the period

 

1,721,803

1,116,503

1,116,503

Cash and cash equivalents at the end of the period

 

268,581

260,606

      1,721,803

 

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS

ENDED 30 JUNE 2019

 

Share
Capital

Share
Premium

Merger reserve

Foreign currency reserve

Accumulated Losses

Total

 

At 1 January 2018

530,543

10,281,073

2,910,866

(19,590)

(12,521,228)

1,181,664

Share option and warrant costs

-

-

-

-

50,000

50,000

Transaction with owners

-

-

-

-

50,000

50,000

 

 

 

 

 

 

 

Comprehensive loss for the period

-

                  -

-

-

(294,498)

(294,498)

Other comprehensive loss

-

-

-

(6,207)

-

(6,207)

Total comprehensive income

-

-

-

(6,207)

(294,498)

(300,705)

 

 

 

 

 

 

 

At 30 June 2018

530,543

10,281,073

2,910,866

(25,797)

(12,765,726)

930,959

 

 

 

 

 

 

 

New shares issued

30,316

2,470,560

-

-

-

2,500,876

Costs associated with capital raise

-

(193,199)

-

-

-

(193,199)

Share option and warrant costs

-

-

-

-

26,443

26,443

Transaction with owners

30,316

2,277,361

-

-

26,443

2,334,120

 

 

 

 

 

 

 

Comprehensive loss for the period

-

-

-

-

(548,474

(548,474)

Other comprehensive income

-

-

-

4,082

-

4,082

Total comprehensive income

-

-

-

4,082

(548,474)

(544,392)

 

 

 

 

 

 

 

At 31 December 2018

560,859

12,558,434

2,910,866

(21,715)

(13,287,757)

2,720,687

 

 

 

 

 

 

 

Share option and warrant costs

-

-

-

-

30,000

30,000

Transaction with owners

-

-

-

-

30,000

30,000

 

 

 

 

 

 

 

Comprehensive loss for the period

-

-

-

-

(1,038,935)

(1,038,935)

Other comprehensive Income

-

-

-

5,094

-

5,094

Total comprehensive income

-

-

-

5,094

(1,038,935)

(1,033,841)

 

 

 

 

 

 

 

At 30 June 2019

560,859

12,558,434

2,910,866

(16,621)

(14,296,692)

1,716,846

 

1. BASIS OF PREPARATION

The financial information for the six months ended 30 June 2019 and 30 June 2018 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 as endorsed by the European Union ("IFRS"). 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 2019 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2018, except for the adoption of IFRS 16. The comparative financial information for the year ended 31 December 2018 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2018 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2018 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 2019

Six months ended
30 June 2018

Year ended
31 December 2018

 

 

 

 

 

Loss for the period

(1,038,935)

   (294,498)

(792,972)

 

 

 

 

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

 

44,508,369

41,808,369

 

 

 

 

Basic loss and diluted, cents per share

(2.3)

(0.70)

(1.8)

 

 

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

 

 

 

3.     Inventory

 

 

As at
30 June 2019

As at
30 June 2018

As at
31 December 2018

 

Raw materials

544,439

297,347

364,090

Work in progress

446,440

333,004

311,420

Finished goods

97,999

24,149

51,489

Inventory

 

1,088,878

 

654,500

726,999

 

 

 

 

 

4.     Trade and other receivables

 

 

As at
30 June 2019

As at
30 June 2018

As at
31 December 2018

 

 

 

 

 

Trade receivables

835,2606

(999,428)3

685,679

Less; provision for impairment of trade receivables

(47,564)

(47,635)

(47,541)

Trade receivables - net

787,696

951,793

638,138

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

787,696

951,793

638,138

Tax receivables

210,723

78,932

120,209

Other receivables

167,339

196,502

166,264

Total other receivables

378,062

275,434

286,473

Total trade and other receivables

1,165,758

 

1,227,227

924,611

Classified as follows:

Current Portion

1,165,758

1,227,227

924,611

 

 

5.     Share capital

 

                                                                                                                                      Number of shares                         

 

 

Shares as 30 June 2018

 

41,808,369

530,543

 

 

 

 

Issue of shares for cash

 

2,700,000

30,316

 

Shares at 31 December 2017 and 31 December 2018

 

44,508,369

560,859

Shares at 30 June 2019

 

44,508,369

560,859

 

 

At 30 June 2019, the share capital comprises 44,508,369 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 2019

Six months ended
30 June 2018

Year ended
31 December 2018

 

 

 

 

 

Growth Fund (including accrued interest)

1,185,764

1,066,765

1,124,914

Nordea Ejendomme

8,103

13,720

10,830

Total financial assets other than cash and cash equivalents classified as loans and receivables

1,193,867

1,080,485

1,135,744

 

 

 

 

 

The Growth Fund borrowing from the Danish public institution, Vækstfonden, bears interest at a rate of 12 per cent. The borrowing is a bullet loan with maturity in June 2020. The Group may at any point in time either repay the loan in part or in full or initiate an annuity repayment scheme over four years. If an annuity repayment scheme is initiated, the interest rate will be reduced to 8 per cent in the repayment period.

 

The loan from Nordea Ejendomme is in respect of amounts included in the fitting out of the offices in Denmark. The loan is repayable over the 6 years and matures I November 2021 and carries a fixed interest rate of 6 per cent.

 

Both loans are denominated in Danish Kroner.

 

 

 

7.     Trade and other payables

 

 

 

As at
30 June 2019

As at
30 June 2018

As at
31 December 2018

 

Invoice discounting

143,532

205,717

10,735

Trade payables

523,746

815,532

492,822

Other payables and accruals

376,930

386,477

588,456

Current portion of Nordea Ejendomme loan

5,396

4,800

5,240

Total financial liabilities, excluding ´non-current´ loans and borrowings classified as financial liabilities measured at amortised cost

 

 

1,049,604

 

 

1,412,526

 

1,097,253

Deferred revenue

27,473

6,709

83,169

Total trade and other payables

1,077,076

1,419,235

1,182,422

Classified as follows:

Current Portion

1,077,076

1,419,235

1,182,422

 

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.

 


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.
 
END
 
 
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