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Windar Photonics PLC - Half-year Report

RNS Number : 5026F
Windar Photonics PLC
17 November 2020
 

17 November 2020

 

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 2020

 

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 2020.

 

Jørgen Korsgaard Jensen, CEO of Windar, commented:

 

"Firstly, I would like to personally apologize for the delays to the publication of our Annual Report & Accounts for 2019 and the release of our interims accounts for the six months to 30 June 2020.

 

This year has been an extraordinary and challenging year for our Company. After having enjoyed a very positive start to the year with the first ever larger scale orders from the OEM market segment, the subsequent period has been impacted by delays, postponement and other restrictions due to Covid-19 pandemic.

 

However, despite these challenges and the consequent reduction in revenue during the first half compared to last year, I am very pleased that the Company has, against that backdrop, managed to reduce the EBITDA loss and substantially improve on operating cash flow performance.

 

More importantly, our order intake in 2020 has now reached our net revenue break-even level of c.€3 million. Whilst we expect to be able to only execute approximately 40% of these orders in 2020 due to the ongoing Covid pandemic, the Board still expects to see an improvement in our overall financial results for 2020 compared to last year."

   

 

For further information, please contact:

 

  Windar Photonics plc

  Jørgen Korsgaard Jensen, CEO

Tel:  +45 21689476

 

 

  Cenkos Securities plc (Nomad & Broker)

  Neil McDonald / Pete Lynch

Tel:  0131 220 6939

 

 

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

 

 

 

 

 

CHAIRMAN'S STATEMENT

 

The year 2020 started very positively for the Company, achieving the first large volume orders from the OEM market. Moreover, we received the first orders under our Vestas distribution agreement and, in total, the Company received orders with a total value of €1.9 million of which €1.2 million were planned for delivery in the first half of 2020.

 

However, the Covid-19 pandemic has had a severe and negative impact on the timing of execution and delivery of these orders and consequently we were only able to realise revenue of €0.3 million, a decrease of 62% compared to the first six months of 2019 (H1 2019: €0.7 million).

 

The Company implemented various cost cutting initiatives in response to the pandemic and, despite the revenue decrease, this resulted in the EBITDA loss reducing slightly to €0.85 million compared to the same period last year (H1 2019: €0.94 million). Despite the gradual uptick in activity levels in the second half of 2020 due to the progressive lifting of the pandemic restrictions, the cost cutting initiatives have been further intensified in the second half of 2020.

 

However, it has been very encouraging that, after many years of focus on the OEM wind turbine market, we have now started to generate larger volume orders from OEM customers and have an expanded pipeline of additional OEMs who are undertaking turbine integration tests. Similarly, the Company is very pleased that, after significant delays, it has managed to deliver the first test installations to Vestas customers in Asia and North America. In North America, there is particular focus on V82 and MN82 wind turbines where initial test results are showing very encouraging results.

 

Despite the various challenges the Company is facing, our R&D activities remain an important part of our business and the next generation of both the WindVision™ and WindEye™ products are expected to be released at the end of 2020. In addition to many new advanced functionalities, an important feature of the new models is the reduction in unit costs by approximately 25% compared to current systems.

 

Regarding the Covid-19 pandemic in general, one of our initial reactions was to maintain our assembly line throughout the period given the positive order situation. Seen retrospectively, and given the prolonged effects of the pandemic, this decision has proven to further challenge the cash flow constraints the Company has experienced. As mentioned, the Company has seen an uptick in activity levels in the second half of 2020 with revenue in the third quarter surpassing the total revenue earned in the first half of 2020, but it is of course reliant on punctual payments from customers and other parties. Until now the Company has received only limited financial help from the various Government Covid support schemes. However, as stated in the recently released annual accounts, the Company has received a long-term Covid-loan of €0.4 million from Vaekstfonden, the Danish Business Growth fund, and an extension to repayment of instalments (totalling €0.15 million) due in 2021 on the existing Vaekstfonden loan.

 

Financial Overview

 

Overall, the Group realised revenues of €0.3 million (H1 2019: €0.7 million) and a net loss of €1.0 million for the period (H1 2019: loss of €1.0 million) after depreciation, amortisation and warrant costs of €0.18 million (H1 2019: €0.14 million).

 

Cash flow from operations produced a net outflow of €0.7 million for the period compared to a net outflow of €1.7 million in H1 2019. The Company's current cash position, which has been assisted by the receipt of the new long-term Covid loan from Vaekstfonden and the receipt of certain outstanding customers payments, was €0.43 million as at 13 November 2020.

 

Outlook

 

As at the date of this announcement, the total order inflow in 2020 has been encouraging, standing at €3.0 million contractually to be delivered in 2020. However, due to the ongoing Covid-19 pandemic and the impact on timing of execution and delivery of these orders, the Board expects to convert only approximately €1.3 million of these orders into realised revenue in 2020 with the remaining €1.7 million of the order back-log to be carried into 2021. Despite the only marginally higher revenue expectation compared to 2019 and the general Covid implications in 2020, the Board expects the financial performance in 2020 to be substantially improved compared to 2019.

 

Moving into 2021 the level of uncertainty is, of course, high due to the Covid-19 pandemic. However, in view of the recently-announced new distribution agreements in Asia, the launch of our Lidar as a Service (LaaS) concept, which has already attracted very positive feedback from the market, and our Vestas distribution agreement, the Board believes the Group is well-positioned to pursue additional revenue streams in 2021. Further, the cost reductions implemented during the current year, which have been focussed on both operational expenses and manufacturing costs, have reduced the estimated revenue break-even level in the Company to approximately €3 million.

 

 

 

 

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2020

 

 

 

 

Six months ended

30 June 2020

Six months ended 30 June 2019

Year ended

31 December 2019

 

 

(unaudited)

(unaudited)

(audited)

 

Note

 

 

 

 

 

Revenue

 

274,752

730,597

1,177,897

Cost of goods sold

 

(151,445)

(371,218)

(629,560)

 

 

 

 

 

Gross profit

 

123,307

359,379

548,337

 

 

 

 

 

Administrative expenses

 

(1,172,592)

(1,451,745)

(3,680,990)

Other operating income

 

16,076

16,075

32,145

 

 

 

 

 

Loss from operations

 

(1,033,209)

(1,076,291)

(3,100,508)

 

 

 

 

 

Finance expenses

 

(47,465)

(53,081)

(190,889)

 

 

 

 

 

Loss before taxation

 

(1,080,674)

(1,129,372)  

  (3,291,397)

 

 

 

 

 

Taxation

 

67,194

90,437

212,488

 

 

 

 

 

Loss for the period

 

(1,013,480)

(1,038,935)  

(3,078,909)

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that will or maybe reclassified to profit or loss:

 

 

 

 

Exchange losses arising on translation of foreign   operations

 

14,932

5,094

3,085

Total comprehensive loss for the period

 

(998,548)

 

(1,033,841)

(3,075,824)

 

 

 

 

 

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

 

 

 

 

Basic and diluted, cents per share

       2

(2.1)

(2.3)

(6.7)

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020

 

 

 

 

As at
30 June 2020

As at
30 June 2019

As at
31 December 2019

 

 

(unaudited)

(unaudited)

(audited)

 

Notes

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

1,223,825

976,133

1,192,607

Property, plant & equipment

 

41,236

89,692

61,800

Deposits

 

24,957

43,796

24,980

 Total non-current assets

 

1,290,018

1,109,621

1,279,387

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

Inventory

3

1,062,398

1,088,878

1,019,564

Trade receivables

4

160,284

787,696

111,703

Other receivables

4

101,863

167,339

84,305

Tax credit receivables

4

67,303

210,723

212,428

 Prepayments

 

15,152

65,412

44,857

 Restricted cash and cash equivalents

 

-

368,000

-

 Cash and cash equivalents

 

268,174

268,581

763,024

 Total current assets

 

1,675,174

2,956,629

2,235,881

 

 

 

 

 

 Total assets

 

2,965,192

4,066,250

3,515,268

 

 

 

 

 

 Equity 

 

 

 

 

 Share capital

5

622,375

560,859

608,689

 Share premium

 

14,016,576

12,558,434

13,692,119

 Merger reserve

 

2,910,866

2,910,866

2,910,866

 Foreign currency reserve

 

(3,698)

(16,621)

(18,630)

 Accumulated loss

 

(17,352,276)

(14,296,692)

(16,338,796)

 Total equity

 

208,843

1,716,846

854,248

 

 

 

 

 

 Non-current liabilities

 

 

 

 

 Warranty provisions

 

61,310

78,461

61,170

Loans

6

1,164,431

1,193,867

5,174

 Total non-current liabilities

 

1,225,741

1,272,328

66,344

 

 

 

 

 

Current liabilities

 

 

 

 

Trade payables

7

950,015

523,745

1,045,792

Other payables and accruals

7

188,906

376,930

211,879

Invoice discounting

7

42,372

143,532

1,992

Contract liabilities

7

220,274

27,473

69,954

Loans

7

129,041

5,396

1,265,059

 Total current liabilities

 

1,530,608

1,077,076

2,594,676

 

 

 

 

 

 Total liabilities

 

2,756,349

2,349,404

2,661,020

 

 

 

 

 

Total equity and liabilities

 

2,965,192

4,066,250

3,515,268

 

 

 

 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2020

 

 

 

Six months ended

30 June 2020

Six months ended

30 June 2019

Year ended

31 December 2019

 

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

 

 

 Loss for the period before tax

 

(1,080,674)

(1,129,372)

(3,291,397)

 

 

 

 

 

 Adjustments for:

 

 

 

 

 Finance expenses

 

47,465

53,081

190,889

 Amortisation

 

143,254

89,417

267,317

 Depreciation

 

20,640

21,164

52,411

 Received tax credit

 

212,570

-

120,186

 Foreign exchange difference

 

14,932

5,094

3,085

 Warrants expense

 

15,000

30,000

27,868

 

 

(626,813)

(930,616)

(2,629,641)

 

 

 

 

 

 Movements in working capital

 

 

 

 

 Changes in inventory

 

(42,834)

(361,880)

(292,565)

 Changes in receivables

 

(66,139)

(150,633)

144,164

 Changes in prepayments

 

29,706

-

38,905

 Changes in deposits

 

23

-

21,305

 Changes in trade payables

 

(95,780)

30,376

552,426

 Changes in contract liabilities

 

150,320

(55,696)

(13,214)

 Changes in warranty provision

 

140

39

(17,252)

 Changes in other payables and provision

 

266

(190,529)

447,972

 Cash flow (used in) operations

 

(651,111)

(1,658,939)

(1,747,900)

 

 

 

 

 

 Investing activities

 

 

 

 

 Payments for intangible assets

 

(245,743)

(79,497)

(528,278)

 Grants received

 

74,055

-

50,824

 Payments for tangible assets

 

-

-

(3,427)

 Cash flow (used in) investing activities

 

(171,688)

(79,497)

(480,881)

 

 

 

 

 

 Financing activities

 

 

 

 

 Proceeds from issue of share capital

 

375,714

-

1,315,342

 Costs associated with the issue of share capital

 

(37,571)

-

(133,827)

 (Reduction) / proceeds from invoice discounting

 

40,380

(2,158)

(8,743)

 (Decrease)/ increase restricted cash balances

 

-

282,935

158,138

 Repayment of loans

 

-

(2,732)

(5,240)

 Interest (paid)/received

 

(47,465)

7,200

(55,878)

 Cash flow from financing activities

 

331,058

285,245

1,269,792

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(491,741)

(1,453,191)

(958,989)

Exchange differences

 

(3,109)

(31)

210

Cash and cash equivalents at the beginning of the period

 

763,024

1,721,803

1,721,803

Cash and cash equivalents at the end of the period

 

268,174

268,581

763,024

 

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS

ENDED 30 JUNE 2020

 

Share
Capital

Share
Premium

Merger reserve

Foreign currency reserve

Accumulated Losses

Total

 

At 1 January 2019

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 loss

-

-

-

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

 

 

 

 

 

 

 

New shares issued

47,830 

1,267,512

-

-

-

1,315,342

Costs associated with capital raise

-

 (133,827)

-

-

-

 (133,827)

Share option and warrant costs

-

-

-

-

(2,130)

(2,130)

Transaction with owners

47,830

1,133,685

-

-

(2,130)

1,179,385

 

 

 

 

 

 

 

Comprehensive loss for the period

-

-

-

-

(2,039,974)

(2,039,974)

Other comprehensive income

-

-

-

(2,009)

-

(2,009)

Total comprehensive income

-

-

-

(2,009)

(2,039,974)

(2,041,983)

 

 

 

 

 

 

 

At 31 December 2019

608,689

13,692,119

2,910,866

(18,630)

(16,338,796)

854,248

 

 

 

 

 

 

 

New shares issued

13,686

324,457

-

-

-

338,143

Share option and warrant costs

-

-

-

-

15,000

15,000

Transaction with owners

13,686

324,457

-

-

15,000

353,143

 

 

 

 

 

 

 

Comprehensive loss for the period

-

-

-

-

(1,013,480)

(1,013,480)

Other comprehensive Income

-

-

-

14,932

-

14,932

Total comprehensive income

-

-

-

14,932

(1,013,480)

(998,548)

 

 

 

 

 

 

 

At 30 June 2020

622,375

14,016,576

2,910,866

(3,698)

(17,352,276)

208,843

 

1. BASIS OF PREPARATION

The financial information for the six months ended 30 June 2020 and 30 June 2019 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 2020 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2019. The comparative financial information for the year ended 31 December 2019 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2019 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2019 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 2020

Six months ended
30 June 2019

Year ended
31 December 2019

 

 

 

 

 

(1,013,480)

(1,038,935)

(3,078,909)

 

 

 

 

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

49,167,898

 

44,508,369

 

45,639,729

 

 

 

 

Basic loss and diluted, cents per share

(2.1)

(2.3)

(6.7)

 

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

 

3.     Inventory

 

 

As at
30 June 2020

As at
30 June 2019

As at
31 December 2019

 

Raw materials

358,827

544,439

417,481

Work in progress

337,247

446,440

392,374

Finished goods

366,324

97,999

209,709

Inventory

1,062,398

1,088,878

1,019,564

 

4.     Trade and other receivables

 

 

As at
30 June 2020

As at
30 June 2019

As at
31 December 2019

 

Trade receivables

672,039

835,2606

623,458

Less; provision for impairment of trade receivables

(511,755)

(47,564)

(511,755)

Trade receivables - net

160,284

787,696

111,703

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

160,284

787,696

111,703

Tax receivables

67,303

210,723

212,428

Other receivables

101,863

167,339

84,305

Total other receivables

169,166

378,062

296,733

Total trade and other receivables

329,450

1,165,758

408,436

Classified as follows:

Current Portion

329,450

1,165,758

408,436

 

 

5.     Share capital

                                                                                                                                                                   

 

 

Number of shares

 

Shares as 30 June 2019

 

44,508,369

560,859

 

 

 

 

Issue of shares for cash

 

4,076,348

47,830

 

Shares at 31 December 2019

 

48,584,717

608,689

 

Issue of shares for cash

 

1,166,361

13,686

Shares at 30 June 2020

 

49,751,078

622,375

 

At 30 June 2020, the share capital comprises 49,751,078 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 2020

Six months ended
30 June 2019

Year ended
31 December 2019

 

 

 

 

 

Growth Fund (including accrued interest)

1,285,457

1,185,764

1,259,499

Nordea Ejendomme

8,015

8,103

10,734

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

1,293,472

1,193,867

1,270,233

 

 

 

 

The Growth Fund borrowing from the Danish public institution, Vækstfonden, initially bore interest at a fixed annual rate of 12 per cent with a full bullet repayment in June 2020. Terms for the borrowing were amended in June 2020, and November 2020, pursuant to which the interest rate was reduced to 7 percent p.a. and the loan is to be repaid in equal quarterly instalments over the period from 1 January 2022 until 1 January 2026. In November 2020 the Company has received an offer on an additional Covid loan of €400,000 at an annual interest rate of Cibor + 5% to be repaid over a 5 year period starting from January 2022 The cash proceeds has been received post reporting 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 in 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 2020

As at
30 June 2019

As at
31 December 2019

 

Invoice discounting

42,372

143,532

1,992

Trade payables

950,015

523,746

1,045,792

Other payables and accruals

188,906

376,930

211,879

Current portion of loans

129,041

5,396

1,265,059

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

1,310,334

 

 

1,049,604

 

2,524,722

Contract liabilities

220,274

27,473

69,954

Total trade and other payables

1,530,608

1,077,076

2,594,676

Classified as follows:

Current Portion

1,530,608

1,077,076

2,594,676

 

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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