Haydale Haydale Haydale Haydale Haydale Haydale Haydale Haydale Haydale Haydale

Latest Results

Full Year Results

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

Haydale (AIM: HAYD), the global advanced materials group, is pleased to announce its full year results for the year ended 30 June 2018.

Download

The full results are available to
download in PDF format


Operational Highlights:

  • Sales to more than 50 customers for the Group's graphene related products and services in the year, almost double that of the prior year;
  • Signifcant advances in functionalisation capabilities achieved, increasing customer base; and
  • Two SBUs established that have increased sales across the Group leading to a united approach to grow sales.

Financial Highlights

  • Commercial revenues increased to £3.4 million (2017: £3.0 million);
  • Income of more than £1.0 million from graphene related products and services (2017: £1.0 million)
  • Revenues from Far East region starting to grow significantly, up to £0.3 million (2007: £0.1 million); and
  • New market in paints and coatings for the Group's SiC opened with sales to major US-based customer of £0.2 million in the year (2017: nil).

Post Period End Highlights:

  • New $3.3 million, 5 year contract extension signed to supply the Group's SiC;
  • Contract with the English Institute of Sport secured to develop advanced wearables incorporating Haydale's technologies for the 2020 Olympic and Paralympic Games, and
  • Board strengthened with the appointment of David Banks as Interim Executive Chairman and Keith Broadbent as Chief Operating Officer.

Commenting on the results David Banks, Interim Executive Chairman of Haydale, said:

"Overall progress for the Group this year has been solid, albeit we are disappointed that we did not achieve the revenue growth we had anticipated and we now believe that we have made the necessary changes to address those issues.

There are significant growth opportunities with our new and adapted approach of using our global footprint as one team, with cross-selling and cross R&D focus combined with a re-orientation to organic growth and cost monitoring. Business development surrounding the major advances we have seen in our core skills on inks, functionalisation and dispersion of graphene, in conjunction with the new market segment for SiC, sets Haydale up for the next phase of evolution and scale up."

 

CHAIRMAN'S STATEMENT

Introduction

I am pleased to present the Haydale Graphene Industries Plc's ("Haydale", the "Group" or the "Company") full year audited results to 30 June 2018 ("FY18").

The year under review has been a busy one for Haydale, building on the foundations of the previous year, integrating, investing in and growing the revenues of the two acquisitions made in the prior year, launching a specialist graphene ink operation facility in Taiwan and opening new markets for our advanced graphene and nanomaterials products. At the beginning of the year we split the Group's customer facing operations into two sales generating strategic business units (SBU) which has proved to be a beneficial stepping stone in our operational development, increasing our revenues across both SBUs from those generated in the prior year ended 30 June 2017 ("FY17").

Summary financials

Total income for FY18 of £4.23 million (FY17: £3.91 million), comprised commercial revenues of £3.40 million (FY17: £3.00 million) and grant income of £0.83 million (FY17: £0.90 million). We continued to invest in increasing our know-how, knowledge and understanding of mixing and dispersion techniques alongside our industry-leading collaboration partners; being the bedrock for successful commercial sales.

As a leader in the graphene industry, an important KPI for Haydale is the amount of income that we generate from the sale of our graphene-related products and services. In FY18, I'm pleased that this figure remained in excess of £1.0 million for the second successive year, but more importantly it was made up from sales to more than 50 different customers across our countries of operation, almost double that of the prior year. We expect to be able to build further on this figure in the coming years.

Operations

During the year under review we set up a graphene and specialty ink manufacturing facility in Taiwan, targeting the $15 billion biomedical screen-printed sensors for the self-monitoring blood glucose market. This now takes our international operating sites to six, with two in the UK and one in each of the USA, Thailand, South Korea and Taiwan. Our Thailand operation is going from strength to strength and expects to build further on its improving sales in the current financial year ending 30 June 2019 ("FY19"). In particular, following successful functionalisation trials, we are delighted to have secured the sale of one of our HT60 plasma reactors to one of Thailand's leading Petro-chemical processors (final commissioning is due in Q1 of FY19), as well as long-term consulting contracts. The customer intends to add value to certain bi-products arising from their manufacturing process using our functionalisation capabilities.

Our USA facility, which was successfully rebranded to Haydale Ceramic Technologies ("HCT") during the year, manufactures a range of our proprietary silicon carbide micro-fibres ("SiC") which add strength, toughness and anti-scratch properties to existing materials. Despite taking longer than we had expected, HCT has now signed a number of long-term supply contracts with world-wide businesses that incorporate HCT's SiC in the manufacture of their hard-edged cutting tools and, as of 10 September 2018, had a long-term order book of approximately £4.15 million ($5.46 million) for delivery over the coming years, providing excellent revenue visibility. HCT has been developing new markets for its products and has successfully integrated its SiC into a major US-based paint and coatings customer where sales commenced in October 2017 and were approximately £0.22 million in FY18. Pleasingly, sales volumes in current financial year to this customer are continuing at higher monthly rates than in FY18.

Our South Korean sales office has secured SiC orders of approximately £0.09 million from industrial giant, Taegu Tec Ltd, based in South Korea. that we expect to increase in FY19. We have received positive feedback from a major oil conglomerate on the benefits of our SiC as a structural enhancer of their catalysts, a crucial part in the petrochemical refining process. We have high hopes of developing this new market opportunity in FY19 as our product offers a real benefit to an industry-wide problem.

Rather than just sell SiC "powder", we took the decision in FY18 to add value to our SiC micro fibres by investing in our own in-house US manufacturing capabilities to address a growing market in selling our proprietary SiC cutting tools ("blanks"). We generated maiden sales of approximately £0.1 million in FY18, initially through selling third-party contract manufactured SiC blanks, but encountered supply chain issues from our European contractors which led to us deciding to accelerate our investment in our own capabilities. Our in-house manufacturing equipment is expected to be commissioned by the end of this calendar year with sales of product coming through in H2 of FY19.

During the year, we delivered phase 1 of a project to build a novel Automotive panel production line for Everpower in China. The sales value for phase 1 was approximately £0.28 million and phase 2 is expected to commence in Q3 of FY19, where the target application is initially focussed on internal car panels for the burgeoning Chinese auto industry.

The graphene teams in Loughborough and Ammanford have been working tirelessly during the year to enhance a number of customers' products through the appropriate functionalisation, mixing and dispersion of the correct commercially available graphene into their existing products. An excellent example of this was the strong commercial progress made over the last year with a global composite materials group to enhance mechanical properties for selected lines within their product range. The global customer paid approximately £0.11 million to Haydale in FY18 as we delivered various formulations of graphene enhanced masterbatches for trials.

In collaboration with GKN, Cobham and BAE Systems, we have successfully increased the electrical conductivity of an aircraft aileron by 600% to defeat lighting strike and potentially reduce the need for heavy "parasitic copper" in a composite built aircraft. Whilst we acknowledge that material revenues from the commercial aircraft market will be longer term, its application in the fast-growing drone market is potentially considerable. We were delighted to be involved with the University of Central Lancaster, to develop the world's first graphene skinned plane which was unveiled at the Farnborough Airshow in July 2018.

Management

As recently announced, Keith Broadbent, who has been with Haydale for just over a year as Managing Director of the Resins, Polymers and Composites business unit, has now stepped up and joined the Board of Directors as Chief Operating Officer. Keith brings extensive operational experience in driving sales and will have overall responsibility for delivery of the Group's budgets. This allows Ray Gibbs, formerly CEO and now President, Business Development, to concentrate on global sales opportunities and focus on our key markets of ceramics, composites, conductive inks and elastomers.

I have also taken on the role of Interim Executive Chairman during this important phase of the Group's development. All businesses face challenges as they grow and develop and we have not been immune to a number of these challenges, specifically around sales order delays caused by the actions outside of our control by multi-national corporates. However, we now believe that we have in place an improved management structure capable of minimising these types of issues in the future.

Outlook

We enter FY19 with cautious optimism. The recently announced five-year SiC contract extension with an existing cutting tool customer has provided even more sales visibility for our US operation and our steadily increasing graphene ink sales to several print houses for the bio-medical sensor market is an encouraging start to the financial year.

We are delighted to be a Tier-1 partner to the new Graphene Engineering Innovation Centre (GEIC) at the University of Manchester, where we will install and showcase one of our HT60 plasma reactors. The enhanced functionalisation now being generated from upgrades we have made to the reactor makes for exciting product improvement opportunities for the myriad of companies now looking at collaborating with the GEIC and its Tier-1 Graphene partners. The facility officially opens in December 2018.

Overall progress for the Group this year has been solid, albeit we are disappointed that we did not achieve the revenue growth we had anticipated and we have previously updated the market on the reasons for this. We now believe that we have made the necessary changes to address those issues.

There are significant growth opportunities with the new and adapted approach of using our global footprint as one team, with cross-selling and cross R&D focus, and a re-orientation to organic growth and cost monitoring. Business development surrounding the major advances we have seen in the core skills on inks, functionalisation and dispersion of graphene, in conjunction with the new market segment of SiC, sets Haydale up for the next phase of evolution and scale up.

I would like to thank the staff, our advisors and my fellow Board members for their hard work and dedication in positioning the Group for the next stage of its growth. I would also like to thank our shareholders for their continued support.

 

David Banks
Interim Executive Chairman

17 September 2018

 

STRATEGIC REPORT

The directors present their Strategic Report for the year ended 30 June 2018.

PRINCIPAL ACTIVITIES

Haydale Graphene Industries Plc ("Haydale" or the "Group") is the AIM listed group that uses tailored advanced materials, including graphene and silicon carbide micro-fibre (SiC). The Group's vision is to use its knowledge of advanced materials and dispersion to become one of the World's foremost creators of material change, enabling its customers to improve the performance of their products.

The Group has developed regulatory approved proprietary graphene-based and other speciality inks and coatings for the print and biomedical sensor markets, as well as enhanced resins for the pre-preg carbon fibre market. In the USA, Haydale manufactures proprietary SiC micro-fibres and whiskers that strengthen ceramics and enable highly scratch and wear resistant coatings. Applications for SiC include corrosion barriers for oil and gas pipelines and hard-edged cutting tools for fashioning jet engine turbine blades from solid super alloy billets. The Group has operational activities in its six chosen geographies worldwide. In summary, these are:

Haydale subsidiary Location Principal activities
     
Haydale Limited Ammanford, Wales R&D operation, supporting the resins, polymers and composites strategic business unit, developing ink production capability
     
Haydale Composite Solutions Limited ("HCS") Loughborough, England Principally consulting on advanced composites and elastomers design, R&D and testing specialist, covering the full product development lifecycle
     
Haydale Technologies (Korea) Limited ("HTK") Seoul, South Korea Dedicated sales servicing the fast-moving Korean, Chinese and Japanese markets
     
Haydale Technologies (Thailand) Company Limited ("HTT") Bangkok, Thailand Provides low-cost, high-value R&D and plasma functionalisation facilities, servicing the APAC region and supporting the Far East sales teams.
     
Haydale Technologies, Inc. ("HTI") South Carolina, USA Haydale Ceramic Technologies (formerly ACM) is HTI's wholly owned operating subsidiary which produces and sells novel SiC micro fibres and whiskers
     
Haydale Technologies Taiwan Ltd ("HTW") Kaohsiung, Taiwan Established in July 2017 as the production facility and technical centre for sales of speciality inks initially into the biomedical sensor market

Evolution of Strategic Business Units

From 1 July 2017, we created two strategic business units (SBU's) within the Group, each with their own dedicated management teams to focus on and deliver our anticipated sales growth:

  1. Resins, Polymers and Composites ("RPC"); and
  2. Advanced Materials (including SiC and inks) ("AMAT")

The RPC SBU increased its commercial revenues in the year to £1.02 million from £0.87 million in FY17, whilst AMAT's revenue increased to £2.39 million from £2.13 million in the prior year. RPC's revenues include those generated by the three UK entities, whereas the revenue from AMAT is derived from the Group's operations in the US and the Far East.

The setting up of two business units, as detailed in last year's strategic report, has delivered some success and ensured growth in all areas of the global business, albeit it did not deliver on our expected sales targets for the year. Accordingly, the dynamic nature of the growth requirement has necessitated an evolution in this approach, and consequently performance reporting for FY19 will see the three regional areas of: (1) USA; (2) UK (and Europe); and (3) Far East being brought together as a team under the newly created position of Group's Chief Operating Officer, with Keith Broadbent, the UK's MD for Resins, Polymers & Composites, having recently been promoted into the role, and becoming an executive director of Haydale Graphene Industries Plc.

This change is designed to facilitate greater cross-selling and accountability across the Group, and success has already been seen with commercial activities on coatings with SiC now in progress in the UK, and graphene initiatives being targeted with major players in the US. The combination of our ink expertise in the UK with that in our Taiwan facility is also bearing fruit, not just on the technology side, but also sharing best operational practice on Health and Safety, Quality (ISO9001) and Production techniques. The Group's US MD, Trevor Rudderham, has very recently decided to step away from the business for family reasons and, whilst his contribution to Group's growth has been appreciated, his decision will allow the Group's transition from SBU focus to global focus. This position will not be replaced.

Plasma functionalisation and enhanced performance

During the year we have successfully completed several key research and development projects to enhance Haydale's capabilities and product offerings through the HDPlasTM process. We have made significant investments into capital equipment and our team's knowledge base to enhance our HT60 plasma reactors' performance and yield increased functionalisation levels to improve the concentration of bonded functional groups. Improving our product offering to compete in the advanced materials markets has been critical. Our ability to now offer enhanced functionalisation, including amines, means we can tailor functionalisation levels to further improve the dispersion characteristics of nanomaterials in wide ranging matrices. This has resulted in some significant graphene-related sales contracts being secured and delivered in the year under review.

The UK

In the UK, where RPC is principally situated, we have two operational facilities: Ammanford, South Wales; and Loughborough, East Midlands. We also opened a Group Head Office in Harwell Business Park, Oxfordshire in June 2018, to provide a central location for business development alongside significant potential customers operating in the aerospace and advanced materials sectors.  

Ammanford is primarily a R&D operation which also sources, handles, functionalises and processes nanomaterials using a suite of prototyping and analytical equipment, as well as its own patented plasma reactors (HT60s and HT200s). Ammanford is responsible for installing, commissioning and maintaining the plasma reactors used internally and by third parties. The aim is to provide the Group with sustainable commercially available graphene and other nanomaterials for both internal product development and third-party customers. In addition, we have recently recruited a dedicated technical sales person with a track record in growing conductive inks.

In Loughborough, we are focussed on producing applications engineering solutions in composite and elastomer materials to enhance their mechanical properties (strength and stiffness), electrically conductive properties, and their thermally conductive properties.

The USA

Our US operation delivered the bulk of AMAT's revenues for FY18, with sales of SiC at £2.11 million (FY17: £2.05 million). We rebranded the operation from Advanced Composite Materials ("ACM") to Haydale Ceramic Technologies ("HCT") during the year, having acquired ACM in the autumn of 2016. The SiC comparative sales figure for FY17 represents the sales generated in the period from acquisition to 30 June 2017, which is the same as that generated in the full 12 months to 30 June 2017. During the year, we began an investment programme to instal a new product line in HCT to add value to its proprietary SiC micro fibres by incorporating them with aluminium oxide to enable us to manufacture our own cutting tool blanks. Revenues from this new product line are expected to start in the second half of FY19.

We also successfully opened up new markets for our SiC in the powder-coating anti-corrosion market where we generated maiden sales of approximately £0.22 million in FY18 and which have continued into the current year. Although sales in this market are at a lower gross profit margin than sales into the cutting tools market, the market size is potentially significantly larger. We also received encouraging feedback from a major oil conglomerate that has tested our SiC as a structural enhancer of catalysts which are a crucial part in the petrochemical refining process.

HCT has a long-term sales order book for delivery of SiC which was added to post year end with a new five-year supply contract extension and, as at 10 September 2018, stood at approximately £4.15 million ($5.46 million).  

The Far East

We now have three operational sites in the Far East: a sales office in Seoul, South Korea (HTK); an R&D and consulting facility in Bangkok, Thailand (HTT); and an ink formulation and manufacturing facility in Kaohsiung, Taiwan (HTW).

HTT has quickly established itself as a technical and sales support service for our Korean and Taiwan activities. In FY18, HTT generated revenues of £0.23 million, up from £0.07 million in the prior year from a mixture of commercially funded contract research projects and the sale of an HT60 reactor to leading Thai petrochemical processor, IRPC, for functionalisation of some of its bi-products. Our high-class facility in the prestigious Thailand Science Park in Bangkok houses two of our patented plasma HT60 graphene functionalisation reactors, with one being owned by IRPC. The commissioning of IRPC's reactor straddled the end of the financial year so some revenues associated with its sale will fall into FY19.

Other developing graphene-related opportunities include PATit, Haydale's software driven anti-counterfeiting device that "reads" our unique conductive transparent and opaque inks when printed onto a product label, proving the authenticity (or otherwise) of the goods. The specialist ink uses graphite block from our collaboration partner, Talga Resources. To date, we have signed a LOI with one of Thailand's leading security printers.

HTW was established in July 2017 and commenced providing graphene and other speciality inks samples principally to leading biomedical sensor printers in the diabetes testing market. The time that customers take to evaluate our graphene inks has proven to take longer than we originally anticipated yet, pleasingly, we are now receiving regular repeat orders from customers, albeit still in relatively small quantities. Once our existing facility is operating at maximum capacity and our commercial revenues are fully established, our intention is to relocate production to a larger 10,000sq ft unit.

OPERATING REVIEW

The Group's key objective now is to accelerate the transition of the business from an R&D focussed operation into a sales and marketing organisation.

The improvements in our analysis, testing and characterisation expertise, both in-house and in collaboration with external partners in academia and industry, have increased the pace at which customer solutions can be obtained as well as giving potential for additional IP owned products. We have invested heavily in our UK teams' understanding of dispersion technologies, developing our knowledge of dispersibility of Nano materials into a wide range of polymer systems. This has included equipment and personnel, and the sharing of best practice throughout our company turning Haydale into a learning organisation.

Haydale has been working with its key OEM, to plan and design the next generation of HDPlas™ reactors , which will provide the ability to meet commercial volumes in anticipation of the breakthrough driven by the increasing scope of the core and patented technology.

Following the sale of a HT60 reactor to the Centre for Process Innovation (CPI) in 2015, CPI continues to assist Haydale to be at the forefront of graphene enhanced development in a range of applications. Working closely with Haydale's technical team through grant funded projects, Haydale and CPI, have developed filter technology for oil/water separation, desalination and industrial waste water, evaluation of which will continue during the current financial year.

At the end of June 2018, we were pleased to have been selected as one of the core Tier-1 partners of the University of Manchester's recently completed £60 million Graphene Engineering Innovation Centre (GEIC) where one of our patented HT60 plasma reactors is to be housed. This will help further functionalisation and applications knowledge across a range of graphene and other 2D materials where correct chemical bonding is a key part ensuring graphene disperses uniformly within its host material.

In the UK, our work on inks over the past year has been focused on the commercialisation of our patented pressure sensor and screen printable inks. Over the next 12 months, Haydale will continue to focus on bringing innovative and novel printed solutions to the market and has invested in it sales team to realise this potential. Other ink applications include wearables, focussed around a contract with The English Institute of Sport, as announced today.

Non-regulated markets, such as sporting goods, provide potentially significant short-term revenue opportunities for Haydale. An example of which has been supply during the year of graphene-enhanced carbon fibre pre-preg to a high specification bespoke UK bicycle manufacturer, which has met with some success.

Progress on two other longer-term projects continues, albeit slower than originally anticipated. Testing by Flowtite A/S of graphene-enhanced resins for their glass reinforced pipe systems took longer than anticipated and, whilst it showed certain improvements, there remains the need for further testing. Importantly, progress has been made but the incorporation of lab-based improvements into a full-blown production process is the key challenge, with functionalisation and dispersion in harmony with the manufacturing process still requiring further work. The Haydale and Flowtite teams are regrouping next month to determine next steps.

Results from the work carried out with Huntsman has subsequently significantly benefited other trials carried out with specific applications for component pre-preg in less regulated markets such as sports goods (cycles) and low volume automotive components. We continue to work on improvements in incorporating Haydale's graphene dispersions into Huntsman specific high value, specialist applications.

Grant Funded Projects

During the year under review, the Group has been busy progressing R&D programmes with important commercial partners where development of commercially viable end products is a pre-requisite of securing each projects' funding. Income from such projects totalled £0.83 million for the year under review (FY17: £0.91 million) and, as at 10 September 2018, the Group had secured grant funded projects worth approximately £0.86 million for delivery over the coming years.

Management and Personnel

We have continued to invest in our people across the Group during the year, which now employs 79 people across five countries (FY17: 70).

In July 2017, David Banks replaced John Knowles as non-executive Chairman and, since the year end, has become the Group's Interim Executive Chairman. We further strengthened other key management with the recruitment in July 2017 of Keith Broadbent as MD of the RPC SBU. Keith has successfully demonstrated his operational and commercial capabilities during the past year such that, post year end, Keith has been promoted to the newly created role of the Group's Chief Operating Officer and as a director of the Company.

In June 2018, Ray Gibbs, who has served as the Company's Chief Executive Officer since 2013, informed the Board of his intention to step down as CEO in order to concentrate on the Group's business development activities. Ray was appointed to his new role as President, Business Development in early September 2018.

Patents, IP and Licensing

Our patents are process patents in key selected strategic territories where their use is as a blocking prior art tool. We are aware of one patent application by a third party where the examiner threw out their claims citing Haydale's patents as prior art. Our critical IP however, is our processing, mixing and dispersion knowledge and know-how derived from the work we have carried out in conjunction with Huntsman, together with the FDA approved ink formulations that have been developed in the Far East. We are in the process of documenting our knowledge and know-how IP, including ink recipes and masterbatching techniques.

The Group currently holds patents in the US, UK, Europe, China, Japan and Australia.

Key Performance Indicators ("KPIs")

The Group's KPIs are its financial metrics are its revenues, graphene related income, gross profit margin, grant income, adjusted EBITDA, cash position, total borrowings and long-term sales order book as follows:

  FY18 (£'000) FY17 (£'000)
Revenue 3,403 3,004
Gross profit margin 59% 70%
Income from graphene related products and services 1,070 1,020
Adjusted EBITDA (4,892) (4,193)
Cash position 5,092 2,091
Borrowings 896 1,270
Long-term sales order book* 4,674 5,400

* The figure increased to £5.19 million as at 10 September 2018

FINANCIAL REVIEW

Statement of Comprehensive Income

In the year under review, the Group's three principal areas of income were: (i) graphene-enhanced and advanced composite consulting services; (ii) sale of silicon carbide whiskers and fibres; and (iii) long-term graphene-related grant funded projects.

The Group's total income for the year ended 30 June 2018 of £4.23 million (FY17: £3.91 million), comprised commercial revenues of £3.40 million (FY17: £3.00 million) and grant income of £0.83 million (FY17: £0.90 million). Although the Group has made significant progress during the year, the 8 per cent. increase in income year-on-year was lower than management's expectations. The Group's income suffered in the second half of FY18 from a combination of specific customers requesting to defer shipment of product into the current financial year and longer than anticipated lead times by customers to reach commercial volumes.

The Group's gross profit, which excludes the income from grant funded projects was £2.0 million (FY17: £2.1 million) delivering a gross profit margin of 59% (FY17: 70%). The reduction in margin was primarily due to a different sales mix from the Group's US operations as it looks to expand the markets for its products. The Group's adjusted EBITDA (adjusted for share-based payment charges, profit/loss on disposal of property, plant and equipment and profit/loss on disposal of intangible assets) was a loss of £4.89 million (FY17: £4.19 million). The Directors consider that adjusted EBITDA is a more useful measure of the Group's performance and comparative performance than EBITDA because it is a closer measure to operating cashflow and it reduces the effects of one-off transactions and other non-cash items.

At the year end, the Group's contracted order book stood at £4.67 million (FY17: £5.40 million) and, since the year end, additional long term orders have been secured resulting in an order book as at 10 September 2018 of £5.19 million to be delivered over the coming years.

Total administrative costs increased approximately 6 per cent. In the year to £8.85 million (FY17: £8.35 million). During the year, we continued to invest in increasing our know-how, knowledge and understanding of mixing and dispersion techniques alongside our industry leading collaboration partners. Overall R&D spend for the year was £1.05 million (FY17: £1.15 million), of which £0.88 million was expensed during the year (FY17: £0.91 million), with the balance of £0.18 million being capitalised, (FY17: £0.24 million). This internal funded development expenditure is expected to lead to sales of new products in future financial years. The Group's other administrative costs for the year totaled £7.68 million (FY17: £7.09 million), the increase reflecting the investment in our Far East operations during the year, specifically in Taiwan. Overall, the loss from before tax for the year was £6.12 million (FY17: £5.64 million loss), and included non-cash items of £1.17 million (FY17: £1.14 million). The loss per share for the year reduced marginally to £0.22 (FY17: £0.28 loss).

Statement of Financial Position and Cashflows

As at 30 June 2018, net assets amounted to £12.54 million (2017: £8.91 million), including cash balances of £5.09 million (2017: £2.10 million). Other current assets decreased to £2.56 million at the year end (2017: £2.89 million), and current liabilities reduced to £2.51 million as at 30 June 2018 (2017: £2.89 million). Deferred consideration of £0.47 million was settled during the year, being amounts due to the vendors following the acquisition of ACM in 2016. Net cash outflow from operating activities, before working capital movements for the year was £4.86 million (2017: £4.19 million), the principal contributing factor being the loss from operations activities of £6.02 million (2017: £5.34 million). Expenditure on capital equipment again utilised a significant portion of cash during the year at £0.72 million (FY17: £0.42 million).

Capital Structure and Funding

As at 30 June 2018, the Company had 27,328,773 ordinary shares in issue (2017: 19,597,713). During the year, the Company issued 7,731,060 new ordinary shares, in connection with the Company's placing and offer for subscription which raised £9.28 million (before expenses) and was completed on 30 October 2017. No options were exercised into ordinary shares during the year (FY17: 39,500).

The Group repaid borrowings of £0.47 million during the year (FY17: £2.82 million), principally in relation to the Group's US borrowing facilities which are secured on the Group's US based tangible assets. This in turn reduced Haydale's financing costs in the year to £0.1 million from £0.3 million in the prior year. The Group's total borrowings at the year end were £0.90 million (2017: £1.27 million), all of which were held by the Group's US subsidiaries.

Haydale's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide return to equity holders of the Company and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group manages this objective through tight control of its cash resources to meet its forecast future cash requirements.

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2018

  Note Year
ended
30 June
2018
£'000
  Year
ended
30 June
2017
£'000
         
REVENUE 5 3,403   3,004
Cost of sales   (1,403)   (894)
         
Gross profit   2,000   2,110
Other operating income 5 831   901
Administrative expenses        
   Research and development expenditure   (878)   (908)
   Share based payment expense   (291)   (351)
   Other administrative expenses   (7,684)   (7,090)
    (8,853)   (8,349)
         
LOSS FROM OPERATIONS   (6,022)   (5,338)
Finance costs   (95)   (297)
         

LOSS BEFORE TAXATION

6 (6,117)   (5,635)
Taxation 7 850   883
         
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS   (5,267)   (4,752)
Other comprehensive income:        
Items that may be reclassified to profit or loss:        
Exchange differences on translation of foreign operations   (47)   (74)
Remeasurements of defined benefit pension schemes   (99)   (36)
         
TOTAL COMPREHENSIVE LOSS FOR THE YEAR FROM CONTINUING OPERATIONS   (5,413)   (4,862)
         
Loss for the year attributable to:        
Owners of the parent   (5,413)   (4,862)
Non-controlling interest   -   -
         
    (5,413)   (4,862)
         
Total comprehensive loss attributable to:        
Owners of the parent   (5,413)   (4,862)
Non-controlling interest   -   -
         
    (5,413)   (4,862)
         
Loss per share attributable to owners of the Parent        
Basic (£) 8 (0.22)   (0.28)
Diluted (£) 8 (0.22)   (0.28)
         

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018

Company Registration No. 07228939 Note 30 June
2018
£'000
  30 June
2017
£'000
ASSETS        
Non-current assets        
Goodwill 9 2,087   2,115
Intangible assets 9 2,130   2,152
Property, plant and equipment 10 5,061   5,074
Deferred tax asset   550   679
         
    9,828   10,020
         
Current assets        
Inventories 11 1,022   1,212
Trade receivables 13 705   798
Other receivables 14 362   535
Corporation tax   473   345
Cash and bank balances   5,092   2,091
         
    7,654   4,981
         
TOTAL ASSETS   17,482   15,001
         

LIABILITIES

       
Non-current liabilities        
Bank loans 14 640   911
Deferred tax   675   1,234
Pension Obligation   1,120   969
         
    2,435   3,114
Current liabilities        
Bank loans 14 256   359
Trade and other payables 13 2,172   2,305
Deferred income   78   253
Corporation tax   -   65
         
    2,506   2,982
         
TOTAL LIABILITIES   4,941   6,096
         
TOTAL NET ASSETS   12,541   8,905
         

EQUITY

       

Capital and reserves attributable to equity holders of the parent

       
Share capital 12 547   392
Share premium account 12 27,539   18,936
Share-based payment reserve   1,298   1,007
Foreign exchange reserve   (160)   (113)
Retained earnings   (16,683)   (11,317)
         
TOTAL EQUITY   12,541   8,905

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2018

  Share
capital
£'000
  Share
premium
£'000
  Share-based
payment
reserve
£'000
  Foreign
Exchange
Reserve
£'000
  Retained
profits
£'000
  Other
reserves
£'000
  Total
Equity
£'000
                           
At 1 July 2016 305   11,840   656   (39)   (6,117)   (44)   6,601
                           
Total comprehensive loss for the year -   -   -   (74)   (4,787)   -   (4,861)
Recognition of share-based payments -   -   351   -   -   -   351
Issue of ordinary share capital 87   7,253   -   -   -   -   7,340
Repurchase of NCI -   -   -   -   (413)   44   (369)
Transaction costs in respect of share issues -   (157)   -   -   -   -   (157)
                           
At 30 June 2017 392   18,936   1,007   (113)   (11,317)   -   8,905
                           
Total Comprehensive loss for the year -   -   -   (47)   (5,366)   -   (5,413)
Recognition of share-based payments -   -   291   -   -   -   291
Issue of ordinary share capital 155   9,123   -   -   -   -   9,278
Transaction costs in respect of share issues -   (520)   -   -   -   -   (520)
                           
                           
At 30 June 2018 547   27,539   1,298   (160)   (16,683)   -   12,541
                           

 

CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2018

   

Note

Year
ended
30 June
2018
£'000
  Year
ended
30 June
2017
£'000
         
Cash flow from operating activities        
Loss before taxation   (6,117)   (5,635)
Adjustments for:-        
Amortisation of intangible assets 9 149   157
(Profit)/Loss on disposal of intangible assets   75   -
Capitalised loan costs written off   -   77
Depreciation of property, plant and equipment 10 675   560
(Profit)/Loss on disposal of property, plant and equipment   (60)   -
Share-based payment charge   291   351
Finance costs   95   297
Pension - net interest expense   37   -
         
Operating cash flow before working capital changes   (4,855)   (4,193)
         
Decrease/(Increase) in inventories   190   (12)
Decrease/(Increase) in trade and other receivables   266   (596)
(Decrease)/Increase in payables and deferred income   159   260
         
Cash used in operations   (4,240)   (4,541)
         
Income tax received   269   412
         
Net cash used in operating activities   (3,971)   (4,129)
         

Cash flow used in investing activities

       
Purchase of property, plant and equipment   (723)   (415)
Purchase of Intangible Assets   (175)   (245)
Proceeds from disposal of property, plant and equipment   83   -
Acquisition of subsidiary - deferred consideration   (444)   4
Purchase of non-controlling shareholding   -   (413)
         
Net cash used in investing activities   (1,259)   (1,069)
         

Cash flow used in financing activities

       
Finance costs   (95)   (297)
Proceeds from issue of share capital (net of share issue costs)   8,757   6,058
New bank loans raised   -   1,408
Repayments of borrowings   (446)   (2,817)
         
Net cash flow from financing activities   8,216   4,352
         
Effects of exchange rates changes   15   75
         
Net increase / (decrease) in cash and cash equivalents   3,001   (771)
         
Cash and cash equivalents at beginning of the financial year   2,091   2,862
         
Cash and cash equivalents at end of the financial year   5,092   2,091

 

Notes

The full results including the notes to the financial statements are available in the PDF Download.

 

Page last updated: 18 September 2018

 

Important Dates

  • 18SepFinal Results
  • 01MarInterim Results
Visit our Share Price page

Latest Share Price

Sign up for Investor Alerts

Investor Alert

Sign up for Email Alerts