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Windar Photonics PLC RNS Release

Final Results and Notice of Annual General Meeting


RNS Number : 1062P
Windar Photonics PLC
24 May 2018
 

24 May 2018

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")

Final Results and Notice of Annual General Meeting

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 final results for the year ended 31 December 2017.

 

FY2017 highlights

 

·        Revenue increased 85% to €2.2 million (2016: €1.2 million)

 

·        Gross Profit increased to €0.9 million (2016: €0.6 million)

 

·        Order intake increased four-fold to €5.9 million (2016: €1.4 million)

 

·        Order backlog at the end of 2017 for deliveries in 2018 increased to €3.9 million (2016: €0.2 million)

 

·        Reduced net loss for the year to €2.2 million (2016: €3.2 million) which included depreciation, amortisation and warrant costs of €0.8 million (2016: €0.7 million), as a result of higher gross profit and a continued reduction of operational costs

 

·        Cash at the end of 2017 of €1.1 million (2016: €0.8 million) excluding restricted cash holdings of €0.2 million (2016: €0.03 million)

 

·        Successfully completed further cost optimisations of our product lines and in parallel continued to add new innovative features like turbulence and wake detection

 

·        Ongoing OEM integration projects are at a record level going into 2018 and management expect Windar's LiDAR technology will to be awarded one or more design-in contracts in the near future

 

·        Successful equity fundraising during the year of £1.25 million

 

 

Post period highlights

 

·        Current trading is significantly ahead of the comparative period last year and in line with management expectations

 

Jørgen Korsgaard Jensen, CEO of Windar, said:

 

"Even though not fully reflected in our annual results for 2017, 2017 saw a record order intake level which, if delivered within one year, would have exceeded our financial breakeven point, and I am very pleased with the significant order backlog carried into 2018. Having reached this point without including any major OEM design-in wins/orders is very encouraging, and we expect to be awarded further by design-in wins in the near future.

 

With this market traction combined within our successful optimisation of our core product cost base and our operational cost levels, we have laid the foundation for further progress in 2018."

 

 

 

Notice of Annual General Meeting

 

Windar also today gives notice that its Annual General Meeting ("AGM") will be held at the offices of Cantor Fitzgerald Europe, One Churchill Place, Canary Wharf, London E14 5RB at 1.00 p.m. on 25 June 2018.

 

The Annual Report and Accounts and Notice of AGM will be posted to shareholders today and will be available shortly from the Company's website, www.windarphotonics.com.

For further information: 

Windar Photonics plc

Jørgen Korsgaard Jensen, CEO

+4524344930
 

Cantor Fitzgerald Europe

Nominated Adviser and Broker

David Foreman

Richard Salmond

+44 20 7894 7000

 

 

 

CHAIRMAN'S STATEMENT

 

 

Dear Shareholders,

 

For the year ended 31 December 2017, the Group achieved revenue of €2.2 million (2016: €1.2 million) an increase of 85% on 2016. The total order intake in 2017 amounted to €5.9 million (2016: €1.4 million) leaving the Group with a record order backlog of €3.9 million (2016: €1.4 million) at the end of the year.

 

We also achieved a reduction in our net loss for the year to €2.2 million (2016: €3.2 million) which included depreciation, amortisation and warrant costs of €0.8 million (2016: €0.7 million). The reduction in the net loss was achieved through a combination of increased revenue and a further reduction of the operational expenses due to the new sales and marketing approach toward the Independent Power Producers and wind farm owners ("IPPs") markets as discussed below.

 

The Group had cash at the end of the year of €1.1 million (2016: €0.8 million) excluding restricted cash balances of €0.2 million (2016: €0.03 million).

 

During the year the Group raised £1.25 million before expenses through the issue of new share capital. Besides using the factoring facility established in 2016 for financing of working capital, the Group is also pleased to have financed sales in 2017 of €1.3 million (2016: €0.3 million) with Denmark's export credit agency, Eksport Kredit Fonden ("EKF").  This enabled the Group to reduce trade receivables at the end of the year to €0.4 million (2016: €0.6 million) despite the revenue growth of 85%. 

 

In 2017, the Group continued to refocus research and development resources towards developing new innovative features, like turbulence and wake detection, and not least cost optimisation programmes. The new and ongoing development of our wake detection functionality combined with our general features has created increasing interest within the Original Equipment Manufacturer for turbines ("OEMs") market with several new and important OEM projects started in 2017. With the cost reduction programmes successfully completed in 2017, we were once again able to reduce our product cost base in 2017 enabling the Group to win some of the higher volume orders at the end of 2017 at satisfactory margin levels.

 

Going into 2018, the Group has a strong product platform with the WindEye and WindVision product lines, and our refocused research and development focus will continue unchanged in 2018 on additional new features, turbine optimisation solutions and additional cost saving programmes.

The Group has capitalised its continued cost of investment in technology during the year. This amounts to approximately €333,000 (2016: €474,000) before grants of €152,000 (2016: €48,000).

Given our strong LiDAR product platforms, we believe we are well placed to further progress in both the OEM market and also within the IPP markets. Despite the often very long design-in cycle times within the OEM market, the Board expects to obtain one or more design-in wins of Windar's LiDAR technology in the near future.  As discussions move to a stage of regular supply, the Board expect this will significantly increase the Group's revenue and profits.

 

In 2017, the Group successfully refocused its sales and marketing approach towards the IPP markets whereby these markets will primarily be served by an external distribution network. Consequently, the Group has closed down our sales and representation offices in Denmark, Spain and Canada during 2017, and at the end of 2017 the Group now only has two facilities - our headquarters in Copenhagen, Denmark and our sales and service office in Shanghai, China. Besides reducing the Group's total operation expenses, the change has driven positive revenue and order intake realised in 2017. The Board expects to see the further positive results of this strategic change with increased IPP market penetration in 2018.

 

2018 has started well with total revenue level during the first four months of the year showing an accelerated growth over 2017.

 

Overall, the Group remains confident for 2018 and the future, and I would like to take the opportunity to thank the management, staff and my predecessor John Weston for their efforts in 2017.

 

 

 

Johan Blach Petersen

Chairman

 

Date May 24, 2018


CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME







Year ended

31 December 2017

Year ended

31 December 2016




 Note



 Revenue

4,5

2,213,664

1,196,037         

Cost of goods sold


(1,301,047)

(627,255)

 Gross profit


912,617      

568,782      





Administrative expenses


(2,996,457)

(3,804,798)





 Other operating income


78,067

69,074

 Loss from operations


(2,005,773)

(3,166,942)





Finance expenses

6

(286,348)

(106,882)

 Loss before taxation


(2,292,121)

(3,273,824)





 Taxation

7

                  66,246

                  128,109

 Loss for the year attributable to the ordinary equity holders of Windar Photonics plc


(2,225,875)

(3,145,715)





 Other comprehensive income




 Items that will or may be reclassified to profit or loss:




 Exchange gains/(losses) arising on translation of foreign operations


13,038 

(22,087) 

Total comprehensive loss for the year attributable to the ordinary equity holders of Windar Photonics plc


(2,212,837)

(3,167,802)





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




 Basic and diluted, cents per share

8

(5.4)

(8.1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017







31 December 2017

31 December 2016



 €

 €


 Note



Assets




Non-current assets




Intangible assets

10

868,594

1,183,675

Property, plant & equipment

11

107,084

119,421

Deposits


38,505

54,072

Total non-current assets


1,014,183

1,357,168





 Current assets




 Inventory

12

739,610

993,657

 Trade receivables

13

381,295

557,721

 Other receivables

13

216,710

258,900

 Prepayments


78,379

81,237

 Restricted cash and cash equivalents


234,692

30,609

 Cash and cash equivalents

14

1,116,503

783,166

 Total current assets


2,767,189

2,705,290





 Total assets


3,781,372

4,062,458









 Equity 




 Share capital

18

530,543

513,327

 Share premium

18

10,281,073

8,964,224

 Merger reserve

18

2,910,866

2,910,866

 Foreign currency reserve

18

(19,590)

(32,628)

 Retained earnings

18

(12,521,228)

(10,530,769)

 Total equity


1,181,664

1,825,020





 Non-current liabilities




 Warranty provisions

20

72,205

39,643

 Loans

17

1,023,809

921,751

 Total non-current liabilities


1,096,014

961,394





 Current liabilities




 Trade payables

16

1,045,516

603,950

 Other payables and provisions

16

325,674

201,038

 Deferred revenue

16

6,716

226,942

 Invoice discounting

16

121,209

239,528

 Loans

16

4,579

4,586

 Total current liabilities


1,503,694

1,276,044





 Total liabilities


2,599,708

2,237,438





 Total equity and liabilities


3,781,372

4,062,458





 

 

 

 

 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2017

 



Year ended

31 December 2017

Year ended

31 December 2016


Notes

 €

 €





 Loss for the period before taxation


(2,292,121)

(3,273,824)





 Adjustments for:




 Finance expenses

6

286,349

106,882

 Amortisation

10

494,709

366,784

 Depreciation

11

56,409

61,034

 Received tax credit


149,603

120,305

 Tax paid


-

(22,008)

 Foreign exchange differences


13,037

(25,898)

  Share option and warrant costs


235,416

317,069



(1,056,598)

(2,349,656)





 Movements in working capital




 Changes in inventory

12

254,047

(224,033)

 Changes in receivables

13

152,687

444,905

 Changes in trade payables

16

441,566

416,295

 Changes in deferred revenue

16

(220,226)

226,942

 Changes in warranty provisions

20

32,562

15,230

 Changes in other payables and provisions

16

124,628

(70,388)

 Cash flow from operations


(271,334)

(1,540,708)





 Investing activities




 Payments for intangible assets

10

(333,480)

(474,435)

 Payments for tangible assets

11

(44,312)

(35,635)

 Grants received

10

152,447

48,420

  Cash flow from investing activities


(225,345)

(461,650)





 Financing activities




 Proceeds from issue of share capital

18

1,443,605

2,252,920

 Costs associated with the issue of share capital

18

(109,540)

(257,703)

 Proceeds/(reduction) from invoice discounting

16

(118,319)

239,528

 Increase restricted cash balances

14

(204,083)

(30,609)

 Repayment of loans

16

(4,580)

(4,303)

 Foreign exchange rate losses

6

(142,331)

(3,737)

 Interest paid

6

(36,080)

(6,502)

 Cash flow from financing activities


828,672

2,189,594





 Net increase in cash and cash equivalents


331,993

187,239

 Exchange differences


1,344

2,020

Cash and cash equivalents at the beginning of the year


 

783,166

593,907





 Cash and cash equivalents at the end of the year

 

14

1,116,503

783,166

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2017

 


Share
Capital

Share
Premium

Merger reserve

Foreign currency reserve

Accumulated Losses

Total

 


 

Group















 

At 1 January 2016

     487,688

6,994,646

2,910,866

(10,541)

(7,702,123)

2,680,536

 

New shares issued

24,558 

2,228,362

-

-

-

2,252,920

 

Costs associated with capital raise

 

-

 

(376,629)

 

-

 

-

 

-

 

(376,629)

 

New shares issued in respect of services rendered

 

1,081

 

117,845

 

-

 

-

 

-

 

118,926

 

Share option and warrant costs

-

-

-

-

317,069

317,069

 

Transaction with owners

25,639

1,969,578

-

-

317,069

2,312,286

 

Comprehensive loss for the year

 

-

 

-

 

-

 

-

 

(3,145,715)

 

(3,145,715)

 

Other comprehensive losses

-

-

-

(22,087)

-

(22,087)

 

Total comprehensive loss

-

-

-

(22,087)

(3,145,715)

3,167,802

 








 

At 31 December 2016

513,327

8,964,224

2,910,866

(32,628)

(10,530,769)

1,825,020

 

New shares issued

17,216 

1,426,389

-

-

-

1,443,605

 

Costs associated with capital raise

-

 (109,540)

-

-

-

 (109,540)

 

Share option and warrant costs

-

-

-

-

235,416

235,416

 

Transaction with owners

17,216

1,316,849

-

-

235,416

1,569,481

 

Comprehensive loss for the year

-

                  -

-

-

(2,225,875)

(2,225,875)

 

Other comprehensive gains

-

-

-

13,038

-

13,038

 

Total comprehensive income

-

-

-

13,038

(2,225,875)

(2,212,837)

 

At 31 December 2017

530,543

10,281,073

2,910,866

(19,590)

(12,521,228)

1,181,664

 

 

 

Company















 

At 1 January 2016

487,688

6,994,646

658,279

(7,746)

(787,034)

7,345,833

 

New shares issued

24,558 

2,228,362

-

-

-

2,252,920

 

Costs associated with capital raise

 

-

 

(376,629)

 

-

 

-

 

-

 

(376,629)

 

New shares issued in respect of services rendered

 

1,081

 

117,845

 

-

 

-

 

-

 

118,926

 

Share option and warrant costs

-

-

-

-

317,069

317,069

 

Transaction with owners

25,639

1,969,578

-

-

317,069

2,312,286

 

Comprehensive loss for the year

 

-

 

-

 

-

 

-

 

(984,082)

 

(984,082)

 

Total comprehensive loss

-

-

-

-

(984,082)

(984,082)

 

At 31 December 2016

513,327

8,964,224

658,279

(7,746)

(1,454,047)

8,674,037

 

New shares issued

17,216 

1,426,389

-

-

-

1,443,605

 

Costs associated with capital raise

 

-

 

(109,540)

 

-

 

-

 

-

 

(109,540)

 

Share option and warrant costs

-

-

-

-

235,416

235,416

 

Transaction with owners

17,216

1,316,849

-

-

235,416

1,569,481

 








 

Comprehensive loss for the year

-

                  -

-

-

(414,017)

(414,017)

 

Total comprehensive income

-

-

-

-

(414,017)

(414,017)

 

 

At 31 December 2017

530,543

10,281,073

658,279

(7,746)

(1,632,648)

9,829,501

 








 

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017

 

1.     General information

 

The Company is a public limited company domiciled in the United Kingdom and incorporated under registered number 09024532 in England and Wales. The Company's registered office is 3 More London Riverside, London, SE1 2AQ.

The Group was formed when the Company acquired on 29 August 2014 the entire share capital of Windar Photonics A/S, a company registered in Denmark though the issue of Ordinary Shares.

The financial information set out below does not constitute the company's statutory accounts for 2017 or 2016. Statutory accounts for the years ended 31 December 2017 and 31 December 2016 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for the years ended 31 December 2017 and 31 December 2016 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Statutory accounts for the year ended 31 December 2016 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2017 will be delivered to the Registrar in due course.

 

2.     Going Concern

 

The consolidated financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. Based on the Group's latest trading expectations and associated cash flow forecasts, the directors have considered the cash requirements of the Group. The directors are confident that based on the Group's forecasts and projections, taking account of possible changes in trading performance, no further funding will be required and are satisfied that the Group has adequate resources to continue in operation for the review period, namely 12 months from the date of approval of these financial statements. It is on that basis they continue to adopt the going concern basis of accounting in preparing these financial statements.

 

3.     Basis of preparation

 

The consolidated financial statements comprises the consolidated financial information of the Group as at 31 December 2017 and are prepared under the historic cost convention, except for the following:

· share based payments and share option and warrant costs


The principal accounting policies adopted in the preparation of the financial information are set out below. The policies have been consistently applied to all the periods presented.

The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRSs") issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("adopted IFRSs").

The acquisition of the subsidiary in 2014 was deemed to be a business combination under common control as the ultimate control before and after the acquisition was the same. As a result, the transaction is outside the scope of IFRS 3 and has been included under the principles of merger accounting by reference to UK GAAP.

 

 

4.     Revenue

Revenue arises from:


Year ended
31 December 2017

Year ended
31 December 2016


Sale of product

2,171,647

1,136,840

Sale of services

42,017

59,197





2,213,664

1,196,037

 

 

 

5.     Segment information

 

Operation segments are reported as reported to the chief operation decision maker.

 

The Group has one reportable segment being the sale of LiDAR Wind Measurement and therefore segmental results and assets are disclosed in the consolidated income statement and consolidated statement of financial position.

 

In 2017, three customers accounted for more than 10 per cent of the revenue (2016: two customers). The total amount of revenue from these customers amounted to €1,552,221, 70.5 per cent of total revenue (2016: €459,740 or 31 per cent of total revenue)

 

Revenue by geographical location of customer:

 


Year
ended
31 December 2017

Year
ended
31 December 2016

Europe

129,751

                   133,968

Americas

147,065

376,161

China

1,784,614

566,725

Asia (excluding China)

152,234

119,183

Revenue

2,213,664

1,196,037

 

 

Geographical information

The parent company is based in the United Kingdom. The information for the geographical area of non-current assets is presented for the most significant area where the group has operations being Denmark.

 



As at 31 December 2017

As at 31 December 2016







Denmark


972,148

1,303,096



972,148

1,303,096





 

Non-current assets for this purpose consist of property, plant and equipment and intangible assets.

 

 

 

 

 

 

 

6.     Finance income and expense




Finance expense




 Year
ended
31 December 2017

 Year
ended
31 December 2016

Foreign exchange gain/(losses)



(142,331)

3,737

 

Interest expense on financial liabilities measured at amortised cost

(144,007)

(103,145)

Finance expense

(286,338)

(106,882)

 

 

 

 

7.     Income tax



Year ended 31 December 2017

Year ended 31 December 2016


(a)

The tax credit for the year:




Corporation tax

(66,246)

(128,109)





(b)

Tax reconciliation



 


Loss on ordinary activities before tax

(2,292,121)

(3,273,824)

 


Loss on ordinary activities at the UK standard rate of corporation tax 19.25% (2016: 20%)



 


(441,943)

(654,765)

 


Effects of:



 


Expenses non-deductible for tax purposes

51,467

168,233

 


Depreciation for the year in excess of capital allowances

71,158

(9,920)

 


Unrecognised tax losses

390,352

434,825

 


Different tax rates applied in overseas jurisdictions

(71,034)

83,822

 


Tax credit on research and development

(66,246)

(150,304)

 


Tax credit for the year

(66,246)

(128,109)

 







The tax credit is recognised as 22 per cent. (2016: 22 per cent) of the company's deficit that relates to research and development costs. Companies in Denmark, who conduct research and development and accordingly experience deficits can apply to the Danish tax authorities for a payment equal to 22 per cent. (2016: 22 per cent) of deficits relating to research and development costs up to DKK 25 million.

 

 (c) Deferred tax - Group

 

In view of the tax losses carried forward there is a deferred tax on losses of approximately €2,106,853 (2016: €1,867,938) which has not been recognised in these Financial Statements. This contingent asset will be realised when the Group makes sufficient taxable profits in the relevant Company.

 

(d) Deferred tax - Company

 

In view of the tax losses carried forward there is a deferred tax on losses of approximately €190,485 (2016: €164,790) which has not been recognised in these Financial Statements. This contingent asset will be realised when the company can demonstrate future profit against which the losses will be able to be used.

 

 

 

 

 

 

 

8.     Loss per share


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


Year ended
31 December
2017

Year ended
31 December
2016


Loss for the year

(2,225,875)

(3,145,347)




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

41,050,362

38,950,108

Basic loss and diluted, cents per share

(5.4)

(8.1)

 

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

 

 

9.     Dividends

 

No dividends were proposed by the Group during the period under review (2016: €Nil).

 

 

10.   Intangible assets

Group



Development projects

Cost




At 1 January 2016



2,079,857

Additions - internally developed



474,435

Grants received



(48,420)

Exchange differences



7,862

At 31 December 2016



2,513,734

Additions - internally developed



333,480

Grants received



(152,447)

Exchange differences



(3,698)

At 31 December 2017



2,691,069

Accumulated amortisation




At 1 January 2016



959,648

Charge for the year



366,784

Exchange differences



3,627

At 31 December 2016



1,330,059

Charge for the year



494,709

Exchange differences



(2,293)

At 31 December 2017



1,822,475

Net carrying value




At 1 January 2016



1,120,209

At 31 December 2016



1,183,675

At 31 December 2017



868,594

 

 

The Group received Research and Development Grants from Energiteknologisk Udvikling og Demonstration Projekt of €152,447 (2016: €48,420) in respect of the capitalised research and development. The Group has the ability to claim a further €174,342 (2016: €388,393) of grants in future years in respect of on-going Research and Development.

 

 

 

 

 

 

11.   Property, plant & equipment

 

Group



Plant and equipment

Cost




At 1 January 2016



226,428

Additions



35,635

Exchange differences



870

At 31 December 2016



262,933

Additions



44,312

Disposed



(12,703)

Exchange differences



(494)

At 31 December 2017



294,048

Accumulated depreciation




At 1 January 2016



82,153 

Charge for the year



61,034

Exchange differences



325

At 31 December 2016



143,512

Charge for the year



56,409

Disposed



(12,703)

Exchange differences



(254)

At 31 December 2017



186,964

Net carrying value




At 1 January 2016



144,275

At 31 December 2016



119,421

At 31 December 2017



107,084

 

 

 

12.   Inventory


Group


As at
31 December 2017

As at
31 December 2016


Raw material

335,653

496,442

Work in progress

340,535

110,654

Finished goods

63,421

386,561

Inventory

739,609

993,657




 

The cost of inventory sold and recognised as an expense during the year was €1,301,047, (2016: €627,255).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.   Trade and other receivables

 

 

Group

Company


As at
31 December
2017

As at
31 December
2016

As at
31 December
2017

As at
31 December
2016

Trade receivables

428,979

585,257

-

-

Impairment allowance beginning of period

(27,536)

-

-

-

Provision utilised during the year

-

-

-

-

Provision charge during the year

(20,148)

(27,536)

-

-

Impairment allowance end of period

(47,684)

(27,536)

-

-

Trade receivables - net

381,295

557,721

-

-

Intragroup receivables

-

-

276,299

813,237






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

381,295

557,721

276,299

813,237






Tax receivables

66,169

150,336

-

-

Other receivables

150,541

108,564

12,180

20,922

Total other receivables

216,710

258,900

12,180

20,922   

Total trade and other receivables

598,005

816,621

288,479

834,159






Classified as follows:





Current Portion

598,005

816,621

288,479

  834,159






The ageing of the trade receivables as at 31 December 2017 is detailed below:

 


Group


2017

2016





Neither past due nor impaired:

216,591

407,616

Past due but not impaired:



0 to 30 days

-

21,261

30 to 60 days

1,306

8,601

60 to 90 days

13,453

-

Over 90 days

149,943

120,243


381,295

557,721




There is no material difference between the net book value and the fair values of trade and other receivables due to their short-term nature.

Other classes of financial assets included within trade and other receivables do not contain impaired assets.

 

Of the net trade receivables €152,407 (2016: €521,226) was pledged as security for the invoice discounting facility. 

 

Maturity analysis of the financial assets, including trade debtors, restricted cash and other receivables, classified as financial assets measured at amortised cost, is as follows (the amounts shown are undiscounted and represent the contractual cash-flows):

 


Group

Company


As at

31 December
2017

As at

31 December
2016

As at

31 December
2017

As at

31 December
2016






Up to 3 months

381,295

557,721

12,180

-

Within 12 months

216,710

258,900

276,299

834,159


598,005

816,621

288,479

834,159

 

 

14.   Cash and cash equivalents

 

For the purpose of the cash flow statement, cash and cash equivalents comprise the following balances with original maturity less than 90 days:







Group

Company


As at
31 December
2017

As at
31 December
2016

As at
31 December
2017

As at
31 December
2016






Cash at bank

1,116,503

783,166

180,727

251,310

 

The Group has restricted cash balances of €234,692 (2016: €30,609) which are not part of cash balances for the cash flow statement. The restricted cash balances relate to transactions entered into between the Group and external financial parties. When EKF has credit approved a customer EKF issues a non-recourse payment guaranties to an external financial party typically of 80% to 90% of the face value of the transaction. Upon shipment of the products the Group then sells the invoice to the external financial party at face value subject to depositing and pledging a cash amount equal to the difference between the face value of the invoice and the EKF guaranties. When the customer typically one year later pays the full invoice amount to the financial party, the deposit is paid in full to the Group.

 

15.   Notes supporting statement of cash flows


Non-current loans and borrowings

Current loans and borrowings


Total

As at Beginning of period

921,751

4,586

926,337

Repayment of loans

-

(4,580)

(4,580)

Accrued interests on non-current loans

107,937

-

107,937

Loans and borrowings classified as non-current in previous period becoming current in this period

(4,579)

4,579

-

Foreign exchange rate differences

(1,300)

(6)

(1,306)

 

 

As at End of period

 

 

1,023,809

 

4,579

 

 

1,028,388

 

16.   Trade and other payables


Group

Company


As at
31 December
2017

As at
31 December
2016

As at
31 December
2017

As at
31 December
2016

Invoice discounting

121,209

239,528

-

-

Trade payables

1,045,516

603,950

38,720

98,210

Other payables and provisions

325,675

201,038

20,000

-

Current portion of Nordea loan

4,579

4,586

-

-

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

 

 

1,496,979

 

1,049,102

 

 

58,720

 

 

98,210

Deferred revenue

6,716

226,942

-

-

Total trade and other payables

1,503,695

1,276,044

58,720

98,210






Classified as follows:





Current Portion

1,503,695

1,276,044

58,720

98,210

16.Trade and other payables (continued)

 





 

The invoice discounting arrangement is secured upon the trade debtors to which the arrangement relates.

 

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.

 

Maturity analysis of the financial liabilities, classified as financial liabilities measured at amortised cost, is as follows (the amounts shown are undiscounted and represent the contractual cash-flows):

 


Group

Company


As at

31 December
2017

As at

31 December
2016

As at

31 December
2017

As at

31

December
2016






Up to 3 months

1,174,653

1,143,039

38,720

98,210

Within 12 months

329,042

172,648

20,000

-


1,503,695

1,315,687

58,720

98,210

 

 

17.          Borrowings

 

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


Group

Book and fair value

Loans

As at
31 December
2017

As at
31 December
2016

1,007,410

900,743

20,978

25,594

Current portion of Nordea Loan

(4,579)

(4,586)

Total non-current financial liabilities measured at amortised costs

1,023,809

921,751

 

The Growth Fund borrowing from the Danish public institution, Vækstfonden, bears interest at a fixed annual 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 a fixed annual rate of 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 in November 2021 and carries a fixed interest rate of 6 per cent.

 

Both Loans are denominated in Danish Kroner.

 

The Company had no borrowings.

 

 

18.     Share capital

 

On 12 July 2017, the Company issued 1,524,390 ordinary shares of 1 pence each for cash consideration at £0.82 per share. On 26 September 2016, the Company issued 710,018 ordinary shares of 1 pence for cash consideration at 67.5 pence per share.  On 19 December 2016, the Company issued 522,082 ordinary shares of 1 pence for cash consideration at 94 pence per share.

 

 

 

 

 

 

 

 

18.     Share capital

 

 


Authorised

 

2017

 

2017

Authorised

 

2016

 

 2016






Shares at beginning of reporting period

 40,283,979

 513,327

 38,166,377

 487,688

Issue of share capital on 2 July 2018

1,524,979

17,216

2,032,102

24,558

Shares at end of reporting period

41,808,369

530,543

40,283,979

513,327

 

 


Number of shares issued and fully paid

2017

2017

Number of shares issued and fully paid

2016

2016






Shares at 1 January 2017

 40,283,979

 513,327

 38,166,377

 487,688






Issue of shares for cash

1,524,390

17,216

2,032,102

24,558

Issue of shares for cash for the satisfaction of fees

-

-

85,500

1,081






Shares at 31 December 2017

41,808,369

530,543

40,283,979

513,327

 

 

At 31 December 2017, the share capital comprises 41,808,369 shares of 1 pence each.

 

Warrants and share options

Warrants are granted to Directors and employees.

 

A total of 75,000 warrants issued in 2014 lapsed on 31 December 2017. A further 1,520,956 warrants issued in 2014 were extended until 31 December 2019 on unchanged terms except for the strike price being increased by 5% if exercised in 2018 and by 10% if exercised in 2019.

 

On 16 November 2017, 420,000 options were issued to certain employees at a strike price of £1.

 

The 2014 warrants are valued using the Black-Scholes pricing model and no performance conditions are included in the fair value calculations. The risk free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.

 

The 2017 options are valued using the Black-Scholes pricing model and no performance conditions are included in the fair value calculations. The options were issued at a strike price of £1 a third vesting on each anniversary for the first three years. The option have a 10 year life. The price of the share at the time of issue was £0.87. The risk free rate was 1.15%. The expected volatility is based on historical volatility of the AIM market over the last two years and is estimated to be 40%.

 

The average share price during the year was 89.8 pence (2016:100 pence). At the year end the Company had the following warrants and options outstanding:

 

 

 

 

 

 

Number of warrants and options

 

 

 

 

At
31 December

 

 

At
 31 December


Exercise price

 

 

 

2016

Granted

Lapsed

2017

(£ pence)

Exercise date

 

 

 

 

 

 

 

 

 

Warrants

1,520,956

-

-

1,520,956

39.07

29/08/14 to 31/12/19

 

Warrants

75,000

-

(75,000)

-

100.00

Expired

 

Options

-

420,000

-

420,000

100.00

16/11/18 to 16/11/27

 

 

1,595,956

420,000

(75,000)

1,940,956

 

 

 

 

 

 

 

 

 

 

 

19.   Operating Leases

 

The total future value of the minimum lease payment is due as follows:

 

 

 

 

2017

2016

 

 

 

Not later than one year

 

 

102,744

11,743

Later than one year and not later than five years

 

 

50,721

245,494

Later than five years

 

 

-

-

 

 

 

153,465

257,237

 

 

 

 

 

 

All leasing commitments are in respect of property and cars leased by the Group. The terms of property leases vary from country to country, although they all tend to be tenant repairing with rent reviews every 2 to 5 years and many have break clauses.

 

 

 

 

20.   Warranty provision

 

 

 

 

2017

2016

 

 

 

 

 

Provision at the beginning of reporting period

 

 

39,643

24,413

 

Provision charged to the profit and loss account

 

 

49,068

30,421

Utilised in year

 

 

(16,181)

(15,425)

Foreign exchange rate movements

 

 

(325)

234

 

 

 

72,205

39,643

 

 

The Group typically provides a two-year warranty period to customers on products sold. Actual booked warranty expenses charged to the Statement of Profit or Loss and Other Comprehensive Income amounted to €16,181 (2016: €15,425) corresponding to a warranty cost percentage of 0.6% (2016: 0.8%) relative to the prior two years revenue. However, due to the early business stage of the Group and the uncertainty following this the Group has adopted a policy to accrue a 2% warranty provision based on the prior two years revenue. 

 

 

 

21.   Related Party Transactions

 

Jørgen Korsgaard Jensen and Johan Blach Petersen are directors and shareholders of O-Net Wavetouch Denmark A/S (Wavetouch). Wavetouch has during the year rented office space from Windar Photonics A/S, the amount payable during the year to Windar was €36,512 (2016: €22,565). There were no amounts outstanding at the year end from Wavetouch (2016:€ Nil).

 


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
 
 
FR AJMBTMBITTLP



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