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Windar Photonics PLC RNS Release

Interim Results


RNS Number : 7783B
Windar Photonics PLC
25 September 2018
 

25 September 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")

Unaudited interim report for the six months ended 30 June 2018

 

Windar Photonics plc (AIM:WPHO), the technology group that has developed a cost efficient and innovative LiDAR wind sensor which enhances the productivity of electricity generating wind turbines, is pleased to announce its unaudited interim results for the six months ended 30 June 2018.

 

Highlights for the first six months of 2018:

 

·       33% increase in revenue to €1.67 million (H1 2017: €1.25 million) notwithstanding 0.2 million of deferred revenue in H1 2017 (H1 2018 actual dispatched product value increased by 47% vs H1 2017)

 

·     44% increase in gross profit to €0.82 million (H1 2017: €0.57 million)

 

·       6% reduction in operating costs to €0.93 million (excluding depreciation, amortisation and warrant costs) (H1 2017: €0.99 million)

 

·      86% reduction in EBITDA loss to €0.07 million (H1 2017: €0.41 million)

 

·     Significantly enhanced future sales potential having entered into a global distribution agreement with Vestas Wind Systems A/S ("Vestas"), the world's largest maintenance provider in the wind industry with representation across 63 countries worldwide

 

·     Continued progress in OEM market with turbine integration projects with the majority of the top 20 wind turbine OEMs ongoing and some projects now in the final turbine type certification stages

 

·      Strengthened balance sheet and cash holdings post period with a £2.2 million fundraise

 

·     Further investment in sales and service organisation in Shanghai, China from 3 to 8 employees during the period

 

·     Board confident of continued growth in H2 2018 with expected full year revenues of €4.0 - 4.5 million and EBITDA broadly in line with market forecasts

 

 

Jørgen Korsgaard Jensen, Chief Executive Officer of the Company, commented: "Our revenues and gross profit have both increased substantially during the period, reflecting the market's increased recognition of the superior quality of our LiDAR based sensors for turbine optimisation in terms of cost, weight and output.

 

"This growth was achieved even before securing Vestas as a distribution partner post period end and this, together with the progress we continue to make in terms of securing an OEM contract, which could be transformational to our business, underpins our confidence that Windar is well positioned to show continued growth in the second half of 2018. Overall in 2019 we expect sales to the OEM market segment at least to match sales to the retrofit market segment and we therefore look forward to providing updates regarding our business during this exciting moment in our development."

 

Chairman's Statement

I am pleased to report that we have started 2018 with many positive developments. In particular I am very pleased with the Group's new global distribution agreement with Vestas, who, with more than 78 GW under service, is the world's largest maintenance provider in the wind industry.  Vestas' service network consists of more than 10,000 people across 63 countries worldwide.  This agreement, combined with our existing distribution agreements in China and India, means we have now reached our objective to establish a strong external distribution network servicing the Independent Power Producers (IPP) markets whilst the Group continues to service the OEM market segment directly.

 

We are also pleased to report strong continued revenue growth during the period of 33% compared to the same period in 2017. The actual order intake and order back-log was considerably higher, although delivery was constrained by a shortage of certain key long lead time components. Our post period end fundraise enables us to increase stock levels, particularly focusing on the longer lead-time components, and therefore execution on both our current order back-log and new orders is a key focus for the second half of 2018.  Additionally, we were able to increase gross profit margins to 49.1% (H1 2017: 45.5%), despite the constraints mentioned above, and total gross profit increased by 44% compared to the same period in 2017.

 

During the period we further lowered our operational costs (excluding depreciation, amortisation and warrant costs) by 6% compared to the same period in 2017. Notably, over the last two years, the overall the operational cost level in the Group has been reduced by more than 50%. 

 

Overall, the Group significantly reduced its net loss to €0.29 million for the period (H1 2017: €0.85 million loss) after depreciation, amortisation and warrant costs of €0.17 million (2016: €0.38 million).

 

The realised EBITDA loss in the first six months of 2018 was realised at a near break-even point of €0.07 million compared to EBITDA losses of €0.41 million and €1.4 million in the first six months of 2017 and 2016 respectively.

 

Cash flow from operations showed a net outflow of €0.76 million for the period compared to a net outflow of €0.05 million in the first half of 2017. The increased outflow during the period was primarily driven by an increase in net receivables of €0.62 million due primarily to the increased revenue realised and two previous large overdue deliveries only being settled after the period under review in August 2018. Excluding restricted cash holdings of €0.31 million, the net cash holding at the end of the period amounted to €0.26 million (2017: €0.39 million), since which time the Company announced a £2.2 million fundraise (€2.4 million) before expenses, further strengthening its balance sheet and cash holdings.   

 

The majority of Windar's revenue is still primarily generated from the IPP retrofit market and we expect to show accelerated growth in the coming periods following the further strengthened distribution network. The next strategic milestone for Windar is to start volume deliveries to the OEM market segment for new turbine sales. We are working with the majority of the top 20 wind turbine OEMs on various integration projects for new wind turbine designs although it is not always possible to establish firm time lines for these projects and subsequent revenue generation due to the complexity of such turbine designs. However, we are pleased that we are now in a position where some of these OEM projects have moved from the development stages into the final turbine certification stages, and we expect sales to the OEM market segment to contribute to a significant growth in revenue in 2019 and the following years. Overall in 2019 we expect sales to the OEM market segment at least to match sales to the retrofit market segment coming from a very low percentages of our sales in both 2017 and 2018. 

 

Despite the overall reduction in general operational expenditure, we have again been able to increase expenditure in R&D, particularly within the Wind Analytics and Turbine Optimisation team. Our programme to develop new turbine control strategies based on our wake and turbulence measurements has showed good progress in the period and in line for field tests early next year.

 

Outlook

Based upon current traction with our customers and our increased product offering, the Directors believe the Group is well positioned to show continued growth in the second half of 2018 and expects to generate full year revenues of between 4.0 - 4.5 million. The Board expects to report full year profitability broadly in line with market expectations. 

 

Johan Blach Petersen

Chairman

 

For further information:

Windar Photonics plc

Jørgen Korsgaard Jensen, CEO

+45-24234930
 

Cantor Fitzgerald Europe        

Nominated Adviser and Broker

 

 

David Foreman

Richard Salmond

+44 (0)20 7894 7000

 


 

Newgate Communications

Financial PR

Elisabeth Cowell

Adam Lloyd

Tom Carnegie

+44 (0)20 7680 6550

 

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 

 

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

Six months ended

30 June 2018

Six months ended 30 June 2017

Year ended

31 December 2017

 

 

(unaudited)

(unaudited)

(audited)

 

Note

 

 

 

 

 

Revenue

        

1,671,587 

1,254,058

2,213,664 

Cost of goods sold

 

        (850,433)

(683,530)

       (1,301,047)

 

 

 

 

 

Gross profit

 

821,155 

570,528

912,617 

 

 

 

 

 

Administrative expenses

 

(1,102,849)

(1,366,398)

(2,996,457)

Other operating income

 

34,326

5,021

78,067

 

 

 

 

 

Loss from operations

    

   (247,367)

(790,849)

   (2,005,773)

 

 

 

 

 

Finance expenses

        

                  (59,894)

(79,150)

          (286,348)

 

 

 

 

 

Loss before taxation

 

   (307,261)

(869,999)

   (2,292,121)

 

 

 

 

 

Taxation

        

                  12,763

 

24,093

                  66,246

 

 

 

 

 

Loss for the period

 

   (294,498)

(845,906)

   (2,225,875)

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that will or maybe reclassified to profit or loss:

 

 

 

 

Exchange losses arising on translation of foreign   operations

 

(6,207)

3,836

13,038 

Total comprehensive loss for the period

 

    (300,705)

 

(842,070)

    (2,212,837)

 

 

 

 

 

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

 

 

 

 

Basic and diluted, cents per share

       2

           (0.70)

(2.10)

(5.40)

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

 

 

 

 

As at
30 June 2018

As at
30 June 2017

As at
31 December 2017

 

 

(unaudited)

(unaudited)

(audited)

 

Notes

Assets

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

847,300

1,043,610

  868,594

Property, plant & equipment

 

99,491

98,303

  107,084

Deposits

 

47,448 

50,519

38,505 

 Total non-current assets

 

994,238

1,192,432

1,014,183

 

 

 

 

 

 Current assets

 

 

 

 

 Inventory

3

654,500

616,282

739,610

 Trade receivables

4

951,793

400,221

             381,295

 Other receivables

4

275,366

317,655

       216,710

 Prepayments

 

55,971

109,509

78,379

 Restricted cash and cash equivalents

 

312,864

71,878

234,692

 Cash and cash equivalents

 

      260,606

390,876

      1,116,503

 Total current assets

 

2,511,100

1,906,421

   2,767,189

 

 

 

 

 

 Total assets

 

3,505,338

3,098,852

3,781,372

 

 

 

 

 

 Equity 

 

 

 

 

 Share capital

5

530,543  

513,327

530,543  

 Share premium

 

   10,281,073

8,964,224

   10,281,073

 Merger reserve

 

2,910,866

2,910,866

2,910,866

 Foreign currency reserve

 

   (25,797)

(28,792)

   (19,590)

 Accumulated loss

 

     (12,765,726)

(11,241,162)

     (12,521,228)

 Total equity

 

930,959

1,118,463

1,181,664

 

 

 

 

 

 Non-current liabilities

 

 

 

 

 Warranty provisions

 

74,659    

51,441

     72,205

Loans

6

            1,080,485

973,209

           1,023,809

 Total non-current liabilities

 

1,155,144

1,024,650

           1,096,014

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

7

815,532

629,520

1,045,516

Other liabilities

 

386,477

211,005

             325,674

Invoice discounting

 

205,717

100,580

121,209

Deferred revenue

 

6,709

10,007

6,716

Loans

 

4,800

4,626

4,579

 Total current liabilities

 

1,419,235

955,739

1,503,694

 

 

 

 

 

 Total liabilities

 

2,574,379

1,980,389

2,599,708

 

 

 

 

 

Total equity and liabilities

 

3,505,338

3,098,852

3,781,372

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

 

Six months ended

30 June 2018

 

Six months ended

30 June 2017

Year ended

31 December 2017

 

 

(unaudited)

(unaudited)

(audited)

 

 

 

 

 

 

 

 Loss for the period before tax

 

   (307,261)

(869,999)

   (2,292,121)

 

 

 

 

 

 Adjustments for:

 

 

 

 

 Finance expenses

 

59,894

79,150

286,349

 Amortisation

 

104,061

245,275

494,709

 Depreciation

 

20,141

24,643

56,409

 Received tax credit

 

-

-

149,603

 Foreign exchange difference

 

(6,207)

3,836

13,037

 Warrants expense

 

50,000

135,513

235,416

 

 

(79,372)

(381,582)

(1,056,598)

 

 

 

 

 

 Movements in working capital

 

 

 

 

 Changes in inventory

 

85,110

377,375

254,047

 Changes in receivables

 

(616,459)

98,076

152,687

 Changes in trade payables

 

(229,984)

25,570

441,566

 Changes in deferred revenue

 

(7)

(216,935)

(220,226)

 Changes in warranty provision

 

(74)

11,798

32,562

 Changes in other payables and provision

 

77,017

10,007

124,628

 Cash flow (used in) operations

 

(763,769)

(75,691)

(271,334)

 

 

 

 

 

 Investing activities

 

 

 

 

 Payments for intangible assets

 

(170,084)

(163,856)

(333,480)

 Grants received

 

78,172

58,292

152,447

 Payments for tangible assets

 

-

(3,704)

(44,312)

 Cash flow (used in) investing activities

 

(91,912)

(109,268)

(225,345)

 

 

 

 

 

 Financing activities

 

 

 

 

 Proceeds from issue of share capital

 

-

-

1,443,605

 Costs associated with the issue of share capital

 

-

-

(109,540)

 (Reduction) / proceeds from invoice discounting

 

84,508

(138,948)

(118,319)

 Increase restricted cash balances

 

(78,172)

(41,269)

(204,083)

 Repayment of loans

 

(3,727)

(2,573)

(4,580)

 Foreign exchange rate gains/( losses)

 

22,886

(1,443)

(142,331)

 Interest paid

 

(22,377)

(23,676)

(36,080)

 Cash flow from financing activities

 

3,118

(207,909)

828,672

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(852,563)

 

(392,868)

      331,993

Exchange differences

 

(3,334)

577

1,344

Cash and cash equivalents at the beginning of the period

 

1,116,503

 

783,166

783,166

Cash and cash equivalents at the end of the period

 

260,606

 

390,876

      1,116,503

 

 

 

 

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS

ENDED 30 JUNE 2018

 

Share
Capital

Share
Premium

Merger reserve

Foreign currency reserve

Accumulated Losses

Total

 

At 1 January 2017

513,327

8,964,224

2,910,866

(32,628)

(10,530,769)

1,825,020

Share option and warrant costs

-

-

-

-

135,513

135,513

Transaction with owners

-

-

-

-

135,513

135,513

 

 

 

 

 

 

Comprehensive loss for the period

-

                  -

-

-

(845,906)

Other comprehensive Income

-

-

-

3,836

3,836

Total comprehensive income

-

-

-

3,836

(710,394)

(842,070)

 

 

 

 

 

 

 

At 30 June 2017

513,327

8,964,224

2,910,866

(28,792)

(11,241,162)

1,118,463

 

 

 

 

 

 

 

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

-

-

-

-

99,903

99,903

Transaction with owners

17,216

1,316,849

-

-

99,903

1,433,968

 

 

 

 

 

 

Comprehensive loss for the period

-

                  -

-

-

(1,379,969)

Other comprehensive loss

-

-

-

9,202

9,202

Total comprehensive income

-

-

-

9,202

(1,379,969)

(1,370,767)

 

 

 

 

 

 

 

At 31 December 2017

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)

Other comprehensive Income

-

-

-

(6,207)

(6,207)

Total comprehensive income

-

-

-

(6,207)

(294,498)

(300,705)

 

 

 

 

 

 

 

At 30 June 2018

513,327

10,281,073

2,910,866

(25,797)

(12,765,726)

930,959

 

 

 

 

 

 

 

 

1.             BASIS OF PREPARATION

 

The financial information for the six months ended 30 June 2018 and 30 June 2017 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 2018 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2017.

 

The comparative financial information for the year ended 31 December 2017 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2017 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2017 was unqualified, did not include references to any matters which the auditors drew attention to by

way of emphasis 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 2018

Six months ended
30 June 2017

Year ended
31 December 2017

 

 

 

 

 

Loss for the period

   (294,498)

(845,906)

(2,225,875)

 

 

 

 

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

 

41,808,369

 

40,283,979

 

41,050,362

 

 

 

 

Basic loss and diluted, cents per share

(0.70)

(2,10)

(5,40)

 

 

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

 

 

 

3.     Inventory

 

 

As at
30 June 2018

As at
30 June 2017

As at
31 December 2017

 

Raw materials

297,347

Goods in progress

333,004

Finished goods

24,149

Inventory

 

654,500

616,282

739,609

 

 

 

 

 

4.     Trade and other receivables

 

 

As at
30 June 2018

As at
30 June 2017

As at
31 December 2017

 

 

 

 

 

Trade receivables

951,793

400,221

381,295

 

 

 

 

Tax receivables

78,932

174,572

66,169

Other receivables

196,502

143,083

150,541

Total other receivables

275,434

317,655

216,710

Total trade and other receivables

 

1,227,227

717,876

598,005

 

 

5.     Share capital

 

                                                                                                                                       Number of shares                         

 

 

Shares as 30 June 2017

 

40,283,979

513,327

 

 

 

 

Issue of shares for cash

 

1,524,390

17,216

 

Shares at 31 December 2016 and 31 December 2017

 

41,808,369

530,543

Shares at 30 June 2017

 

41,808,369

530,543

 

 

At 30 June 2018, the share capital comprises 41,808,369 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 2018

Six months ended
30 June 2017

Year ended
31 December 2017

 

 

 

 

 

Growth Fund (including accrued interest)

1,066,765

 

954,507

1,007,410

Nordea Ejendomme

13,720

18,702

16,399

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

1,080,485

 

973,209

1,023,809

 

 

 

 

 

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 2018

As at
30 June 2017

As at
31 December 2017

 

Invoice discounting

205,717

100,580

121,209

Trade payables

815,532

680,919

1,045,516

Other payables

386,477

211,005

325,675

Current portion of Nordea loan

4,800

4,626

4,579

Total financial liabilities classified as financial liabilities measured at amortised cost

 

 

1,412,526

 

 

996,730

 

1,496,979

 

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 websitewww.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.
 
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