02:00 Thu 24 Sep 2020
Directa Plus PLC - Half-year Report
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN
Directa Plus plc
("Directa Plus" or the "Company" or, together with its subsidiaries, the "Group")
Half Year Report
Directa Plus (AIM: DCTA), a producer and supplier of graphene-based products for use in consumer and industrial markets, is pleased to announce its half year results for the six months ended
During the period the Group has continued to grow strongly in its key selected industrial verticals, securing important new contracts and new intellectual property rights and remains well positioned to capture significant growth opportunities. Progress in first half of 2020 was constrained by the ongoing Covid-19 pandemic, particularly in
Summary
Financial Highlights
· Total revenue increased by approximately 200% to
· EBITDA loss similar to comparable period at
· Adjusted loss after tax** of
· Loss after tax of
· Cash at period end
* Setcar S.A. ("Setcar"), a 51% owned subsidiary acquired in
** Excluding amortisation and depreciation relating to revaluation of acquired assets
Commercial Highlights
Environmental (80% of period revenue)
· Setcar fully integrated into the Group's operations with a significant opportunity pipeline
· Two significant contracts secured post-acquisition:
o a
o a
Textiles (19% of period revenue)
· Textile revenue reduced to
· Accelerated development, production and sale of a new facemask range, branded Co-mask™ incorporating G+® graphene
· Co-mask™ has been proven to possesses anti-bacterial and anti-viral (SARS-CoV-2 properties) that offer the wearer an enhanced level of protection from Covid-19*
· Significant and growing customer interest being shown in Co-mask™. Orders received to date with a value of over
· Receipt of an EU grant as part of the GREEN.TEX partnership for the development of environmentally friendly and high performance G+® graphene enhanced inks for digital printing
· Post-period collaboration agreement signed with Poltrona Frau S.p.A, a global leader in high-end furniture manufacture for residential, bespoke and commercial use, to develop G+® enhanced leather
* testing conducted by the Department of Neuroscience of the Catholic University of
Composites
· Increased commercial traction for Gipave®, a graphene enhanced asphalt developed in conjunction with Iterchimica
· Growing number of installations of Gipave®, continue to demonstrate a substantial market opportunity:
o a runway trial at
o a road trial in
o a permanent road surface at the new
· A 3-year exclusive supply agreement for G+® modifier ITC1 to be used in asphalts and bitumens was signed with Iterchimica in
· Agreement signed between Directa Plus and Comerio Ercole SpA to pursue joint research and development projects using the Company's G+® technology to develop products for the rubber, tyres, plastic and non-woven materials industries
Additional industrial verticals
· Post-period agreement signed in
Technology and IP
· Technology Innovation Award 2020 received from Frost & Sullivan in
· Three additional patents granted, including a sixth Chinese patent covering the use of the Company's G+® graphene technology for bicycle, motorcycle and passenger car tyres as well as truck and bus radial tyres
· Post-period granted a patent by the Italian Patent Office for the Company's G+® graphene to improve the performance of rubber-based shoe outsoles
· Current patent portfolio now comprises 37 granted patents plus 23 patents pending, grouped in 15 families, 4 covering G+ production and 12 covering G+® products and applications
"I am pleased to report that Directa has delivered over 200% growth in revenues in the first half of the year and has continued to make strong commercial progress, despite the impact of Covid-19. The Group has responded exceptionally well to the challenges with altered working patterns and changes to the use of office and laboratory space. We have been able to ensure the health and wellbeing of our employees, whilst fully engaging with customers and supporting our growth plans.
"During the period we have made strong advances across our key industrial verticals, with significant contract wins for Setcar and material progress in the commercialisation of the Gipave® with our partner, Iterchimica.
"Our strategy of partnering with leading Italian and European industrial partners to bring G+® graphene enhanced products to existing markets is working well. In addition, new collaboration agreements with globally recognised product design partners, often backed by leading multinational manufacturers, demonstrate that we have a strong pipeline of additional research and development options.
"The development of our new Co-mask™ from concept to production and sale in just a few months is something of which I am personally particularly proud. The recently announced testing showing the mask's efficacy against SARS-CoV-2 proves that our efforts have been worthwhile and that we can help fight against Covid-19 and its effects. Directa Plus Co-Mask™ now offers end users an upgrade from the basic functionality of a normal face mask, going beyond simply filtering droplets to providing antiviral qualities, improved thermal comfort and improved environmental sustainability.
"We are hopeful that we will be able to return to a more normal way of working soon, but in any event Directa Plus remains well positioned for further success with growing traction in a number of target markets offering substantial potential."
For further information please visit http://www.directa-plus.com/ or contact:
Directa Plus plc |
+39 02 36714458 |
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Cenkos Securities plc (Nomad & Joint Broker) |
+44 131 220 6939 |
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N+1 Singer (Joint Broker) |
+44 20 7496 3069 |
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Tavistock (Financial PR and IR) |
+44 20 7920 3150 |
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Review of Operations
Environmental
Directa Plus acquired a 51 per cent interest in Directa's subsidiary Setcar S.A. ("Setcar") on
Directa Plus's success in developing Grafysorber® was recognised in
Setcar signed another significant contract, announced post-period on
Textiles
As part of a partnership called GREEN.TEX, Directa Plus received a grant from the EU in
On
In response to the Covid-19 pandemic the Company announced on
Directa has had to adapt working patterns, including changes to the use of office and laboratory space, to help prevent the further spread of Covid-19. The Group's graphene manufacturing operations and headquarters are located in Lomazzo in the
By
The Company is proud to have been able to respond to a global crisis by quickly developing a product that we hope will help a large number of people. Therefore it was very pleasing that the anti-viral properties of the Co-mask™ were confirmed in
On
Composites and Elastomers
A six-month trial was announced on
January also saw the signing of an agreement between Directa Plus and Comerio Ercole SpA to pursue joint research and development projects using the Company's G+ technology to develop products in the rubber and tyres, plastic and non-woven materials industries.
Another road trial of Gipave® was announced on
On
Additional industrial verticals
Directa made its first move into automotive design, in
Intellectual Property
On
On
On
Post-period end, on
The Group's current patent portfolio is comprised of 37 patents granted plus 23 patents pending.
Directa Plus recently published a Scientific paper on Applied Polymer Science, certifying the G+® nanoplatelets morphology in compliance with ISO/TS80004-13:2017. One more paper covering the antiviral properties of G+® treated fabrics is about to be submitted.
Financial
Revenue from product and service sales for the six months to
Other expenses increased to
EBITDA loss was
EBITDA (€m) |
1H 2020 |
1H 2019 |
Result from operating activities |
(2.17) |
(1.82) |
Depreciation and amortisation |
0.70 |
0.37 |
EBITDA |
(1.47) |
(1.45) |
Depreciation and amortisation increased to
Net finance expenses at
Adjusted Loss after tax (as detailed in the table below)
Loss after tax was at
Adjusted Loss after tax (€m) |
1H 2020 |
1H 2019 |
Loss after tax |
(2.45) |
(1.78) |
Depreciation and amortisation referred to revaluation of acquired assets |
0.24 |
- |
Exchange rate variances |
0.26 |
(0.05) |
Adjusted Loss after tax (€m) |
(-1.95) |
(1.83) |
An investment in tangible and intangible assets of
Cash at period end was
Outlook
Directa Plus is continuing to make significant progress within each of its key verticals, as its commercialisation strategy increasingly proves to be the correct path. The Environmental vertical is an excellent example. Having developed industry leading technology and demonstrated the added value it generates, the Group then successfully identified an industrial partner and invested together to build a reliable and growing revenue stream.
The Group's work with Iterchimica on Gipave® is on a similar trajectory and, as the number of real world use cases increases, the Board is confident that customer orders and material revenue will follow.
This is the strategy that the Company will continue to adopt in other verticals and some of the partnership agreements Directa Plus has signed in this period alone are highly promising. Working with world leading companies to develop and bring to market world leading products is at the heart of what Directa Plus does.
The work on Co-Mask™ demonstrates that, leveraging the enabling properties of G+® Graphene and the Group's IP, it can quickly adapt to changing external circumstances and use its technology to rapidly bring new products through the design and fabrication to sale. While Directa Plus is not necessarily looking to repeat this immediately it shows the strengths of the Group's strategy and the versatility of employees.
The effects of Covid-19 are still unpredictable, and whether the global economy is through the worst is unclear but the Group remains in a strong position to grow and invest.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended
In euro |
Note |
(Unaudited) |
(Unaudited) |
Audited |
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Continuing operations |
|
|
|
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Revenue |
|
2,807,066 |
894,693 |
2,631,819 |
Other income |
|
53,462 |
52,879 |
183,033 |
Changes in inventories of finished goods and work in progress |
|
(68,693) |
90,350 |
87,537 |
Raw materials and consumables used |
|
(682,321) |
(612,532) |
(1,185,360) |
Employee benefits expenses |
|
(1,651,111) |
(980,007) |
(2,148,923) |
Depreciation and amortisation |
|
(702,406) |
(369,522) |
(837,055) |
Other expenses |
2 |
(1,929,054) |
(892,911) |
(2,286,054) |
Results from operating activities |
|
(2,173,057) |
(1,817,050) |
(3,555,002) |
Finance expenses income (expenses) |
|
(312,843) |
38,160 |
128,563 |
Net finance costs |
|
(312,843) |
38,160 |
128,563 |
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Loss before tax |
|
(2,485,900) |
(1,778,890) |
(3,426,439) |
Tax expense |
|
36,260 |
- |
25,225 |
Loss after tax |
|
(2,449,640) |
(1,778,890) |
(3,401,214) |
Loss from continuing operations |
|
(2,449,640) |
(1,778,890) |
(3,401,214) |
Loss of the period |
|
(2,449,640) |
(1,778,890) |
(3,401,214) |
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Other Comprehensive income items that will not be reclassified to profit or loss |
|
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Defined Benefit Plan remeasurement gains and losses |
|
7,965 |
3,585 |
(12,802) |
Other comprehensive income for the year (net of tax) |
|
7,965 |
3,585 |
(12,802) |
Total comprehensive income for the year |
|
(2,441,675) |
(1,775,305) |
(3,414,016) |
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Loss attributable to |
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Owner of the Parent |
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(2,321,885) |
(1,778,030) |
(3,585,215) |
Non-controlling interests |
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(127,755) |
(860) |
184,001 |
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(2,449,640) |
(1,778,890) |
(3,401,214) |
Total Comprehensive (expenses)/ income attributable to |
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Owner of the Parent |
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(2,313,920) |
(1,774,445) |
(3,598,017) |
Non-controlling interests |
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(127,755) |
(860) |
184,001 |
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(2,441,675) |
(1,775,305) |
(3,414,016) |
Loss per share |
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Basic loss per share |
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(0.04) |
(0.03) |
(0.07) |
Diluted loss per share |
|
(0.04) |
(0.03) |
(0.07) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
In euro |
Note |
(Unaudited) |
(Unaudited) |
Audited |
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Assets |
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Intangible assets |
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2,053,432 |
1,445,453 |
2,202,452 |
Property, plant and equipment |
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4,338,078 |
1,369,457 |
4,730,752 |
Trade and other receivables |
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112,306 |
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109,698 |
Non-current assets |
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6,503,816 |
2,814,910 |
7,042,902 |
Inventories |
|
1,022,425 |
952,634 |
1,095,936 |
Trade and other receivables |
|
2,446,221 |
1,099,246 |
2,943,286 |
Cash and cash equivalent |
|
7,491,014 |
4,760,951 |
10,906,076 |
Current assets |
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10,959,660 |
6,812,831 |
14,945,298 |
Total assets |
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17,463,476 |
9,627,741 |
21,988,200 |
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Equity |
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Share capital |
|
190,996 |
161,815 |
190,512 |
Share premium |
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31,395,612 |
23,426,027 |
31,395,612 |
Retained Earnings |
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(19,977,696) |
(15,795,062) |
(17,652,179) |
Equity attributable to owners of Group |
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11,608,912 |
7,792,780 |
13,933,946 |
Non-controlling interest |
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1,122,735 |
26,501 |
1,240,194 |
Total equity |
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12,731,647 |
7,819,281 |
15,174,140 |
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Liabilities |
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Loans and borrowings |
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- |
28,395 |
- |
Lease liabilities |
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376,495 |
348,878 |
439,690 |
Employee benefits |
|
426,683 |
364,372 |
416,095 |
Other payables |
|
65,763 |
- |
196,690 |
Deferred tax liabilities |
|
97,065 |
- |
135,059 |
Non-current liabilities |
|
966,006 |
741,645 |
1,187,534 |
Loans and borrowing |
|
1,131,901 |
110,142 |
484,701 |
Lease liabilities |
|
161,421 |
72,403 |
184,900 |
Trade payables and other payables |
|
2,472,501 |
884,270 |
4,956,926 |
Current liabilities |
|
3,765,823 |
1,066,815 |
5,626,527 |
Total liabilities |
|
4,731,829 |
1,808,460 |
6,814,061 |
Total equity and liabilities |
|
17,463,476 |
9,627,741 |
21,988,200 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
|
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Share |
Share |
Retained Earnings |
Total |
Non-controlling |
Total |
In euro |
Capital |
premium |
|
|
interests |
Equity |
Balance at |
154,465 |
22,104,240 |
(14,044,656) |
8,214,049 |
27,361 |
8,241,410 |
Total comprehensive (expense)/income for the year |
|
|
|
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|
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Loss of the Period |
- |
- |
(1,778,030) |
(1,778,030) |
(860) |
(1,778,890) |
Total other comprehensive (expense)/income |
- |
- |
3,585 |
3,585 |
|
3,585 |
Total comprehensive (expense)/income for the period |
|
|
(1,774,445) |
(1,774,445) |
(860) |
(1,775,305) |
Capital raised |
7,350 |
1,462,727 |
- |
1,470,077 |
- |
1,470,077 |
Expenditure related to the issuance of shares |
- |
(140,940) |
- |
(140,940) |
- |
(140,940) |
Share-based payment |
- |
- |
24,039 |
24,039 |
- |
24,039 |
Balance at |
161,815 |
23,426,027 |
(15,795,062) |
7,792,780 |
26,501 |
7,819,281 |
Total comprehensive (expense)/income for the year |
|
|
|
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|
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Loss of the Period |
- |
- |
(1,807,186) |
(1,807,186) |
184,862 |
(1,622,324) |
Total other comprehensive (expense)/income |
- |
- |
(16,387) |
(16,387) |
- |
(16,387) |
Total comprehensive (expense)/income for the period |
- |
- |
(1,823,573) |
(1,823,573) |
184,862 |
(1,638,711) |
Capital raised |
28,697 |
8,580,393 |
|
8,609,090 |
|
8,609,090 |
Expenditure related to the issuance of shares |
- |
(610,808) |
- |
(610,808) |
- |
(610,808) |
Setcar non controlling interest of acquisition |
- |
- |
- |
- |
1,028,831 |
1,028,831 |
Translation reserve |
- |
- |
4,147 |
4,147 |
- |
4,147 |
Share-based payment |
- |
- |
(37,690) |
(37,690) |
- |
(37,690) |
Balance at |
190,512 |
31,395,612 |
(17,652,178) |
13,933,946 |
1,240,194 |
15,174,140 |
Total comprehensive (expense)/income for the year |
|
|
|
|
|
|
Loss of the Period |
- |
- |
(2,321,885) |
(2,321,885) |
(127,755) |
(2,449,640) |
Total other comprehensive (expense)/income |
- |
- |
7,965 |
7,965 |
- |
7,965 |
Total comprehensive (expense)/income for the period |
|
|
(2,313,920) |
(2,313,920) |
(127,755) |
(2,441,675) |
Capital raised |
484 |
- |
- |
484 |
- |
484 |
Translation reserve |
- |
- |
(11,598) |
(11,598) |
- |
(11,598) |
Acquisition of Directa textile Solutions non controlling interest |
- |
- |
- |
- |
10,296 |
10,296 |
Balance at |
190,996 |
31,395,612 |
(19,977,694) |
11,608,912 |
1,122,735 |
12,731,647 |
CONSOLIDATED STATEMENT OF CASH FLOW
For the six months ended
|
(Unaudited) |
(Unaudited) |
Audited |
|
|
|
|
Loss for the year before tax |
(2,485,900) |
(1,778,890) |
(3,426,439) |
Adjusted for: |
|
|
|
Depreciation |
406,674 |
211,322 |
452,309 |
Amortisation of intangible assets |
295,529 |
158,200 |
384,746 |
Share based option payment cost |
- |
24,039 |
(13,652) |
Finance income |
(1,808) |
(1,968) |
(164,535) |
Finance expense |
314,624 |
(36,193) |
35,829 |
Operating cash flow before working capital changes |
(1,470,881) |
(1,423,490) |
(2,731,742) |
Decrease / (Increase) in inventories |
68,693 |
(90,350) |
(79,451) |
Decrease / (Increase) in trade and other receivables, prepayments |
496,235 |
959,971 |
240,963 |
(Decrease) / Increase in trade and other payables |
(722,081) |
(1,276,236) |
(714,799) |
Increase / (decrease) in provisions and employee benefits |
15,404 |
28,874 |
59,342 |
Net cash used in operating activities |
(1,612,630) |
(1,801,231) |
(3,225,687) |
Cash flows from investing activities |
|
|
|
Interest received |
1,808 |
1,968 |
2,874 |
Investment in intangible assets |
(146,872) |
(107,498) |
(232,546) |
Net cash arisen from business acquisition |
- |
- |
(137,345) |
Dividend paid (as part of the consideration of Setcar acquisition) |
(1,902,381) |
- |
- |
Acquisition of property, plant and equipment |
(67,303) |
(24,620) |
(161,589) |
Net cash used in investing activities |
(2,114,748) |
(130,150) |
(528,606) |
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|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from Capital raise |
23,006 |
1,470,077 |
10,079,167 |
Expenditure related to the issuance of shares |
- |
(140,940) |
(751,747) |
Interest Paid |
(18,586) |
(11,736) |
(9,773) |
New Borrowings |
872,250 |
- |
- |
Repayment of borrowings |
(217,288) |
(180,833) |
(190,193) |
Interest of lease liabilities |
(7,143) |
- |
(16,124) |
Repayment of lease liabilities |
(80,477) |
- |
(115,133) |
Net cash generated from financing activities |
571,762 |
1,136,568 |
8,996,197 |
Net increase in cash and cash equivalent |
(3,155,616) |
(794,813) |
5,241,904 |
Effect of exchange rate changes |
(259,446) |
51,880 |
160,548 |
Cash and cash equivalents at beginning of the period |
10,906,076 |
5,503,884 |
5,503,884 |
Cash and cash equivalents at end of the period |
7,491,014 |
4,760,951 |
10,906,076 |
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the 6 months ended
1. Basis of preparation
(a) Statement of compliance
The financial information contained in this announcement does not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006.
The financial information for the six months ended
All financial information is presented in Euro, unless otherwise disclosed.
The Directors of the Company approved the financial information included in these Interim condensed consolidated financial statements on
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis unless otherwise stated.
(c) Functional and presentation currency
These financial statements are presented in Euro ('€') and is considered by the Directors to be the most appropriate presentation currency to assist the users of the financial statements. The functional currency of the Company and operating subsidiary is Euro ('€'). The functional currency of the Romanian subsidiary is RON.
(d) Going concern
The Group meets its working capital requirements through the receipt of revenues from the provision of its services and sale of products mainly in
The COVID-19 pandemic has had a significant, immediate impact on the global economies and on the operations and operational funding of participants in international supply chains.
The COVID-19 pandemic has not, to date, had a significant adverse impact on the Group's operations but the directors are aware that if the infection rate were to increase sharply again and the lockdown being prolonged then this may change.
Management believes that the Group has the systems and protocols in place to address these challenges. At the date of approval of interim results it is not clear how long the current circumstances are likely to last and what the long-term impact will be.
As at
The directors prepare annual budgets and forecasts in order to ensure that they have sufficient liquidity in place in the business. The Group is projected to have the financial capacity to support its viability, following the uncertainties and challenges created by the COVID-19 pandemic, until at least the end of 2021.
Having regard to the above, and based on their latest assessment of the budgets and forecasts for the business of the company, the directors consider that there are sufficient funds available to the Group to enable it to meet its liabilities as they fall due for a period of not less than twelve months from the date of approval of the financial statements. The directors therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.
2. Results from operating activities
Other expenses include:
€ |
|
|
|
Technical Consultancies |
103,815 |
239,165 |
427,362 |
General Consultancies |
591,340 |
362,539 |
762,122 |
G&A |
132,677 |
93,612 |
192,506 |
Travel and marketing |
96,215 |
106,731 |
264,679 |
Rent and Lease |
47,596 |
33,337 |
77,153 |
Operating expenses |
957,411 |
57,527 |
562,232 |
Total |
1,929,054 |
892,911 |
2,286,054 |
As at
Operating expenses are referred mainly to Setcar's third parties services such as disposal of non-hazardous waste and transportation.
3. Earnings Per Share
The earnings per share have been calculated using the weighted average of ordinary shares. The Company was loss making for all periods presented. Therefore the dilutive effect of share options has not been taken account of in the calculation of diluted earnings per share, since this would decrease the loss per share for each of the period reported.
|
Change in |
Total |
|
Weighted |
|
number of |
number of |
|
number of |
|
ordinary |
ordinary |
|
ordinary |
|
shares |
shares |
Days |
shares |
At |
- |
44,212,827 |
182 |
44,212,827 |
At |
- |
44,212,827 |
366 |
44,212,827 |
At |
- |
44,212,827 |
182 |
44,212,827 |
At |
4,256,000 |
48,468,827 |
365 |
44,376,071 |
At |
2,647,609 |
51,116,436 |
182 |
50,970,963 |
At |
12,530,156 |
60,998,983 |
365 |
52,973,511 |
At |
111,980 |
61,110,963 |
182 |
60,999,598 |
Earnings per share |
|
|
|
|
|
|
|
Loss for the year |
(2,321,885) |
(1,778,890) |
(3,585,215) |
Weighted average number of shares: |
|
|
|
- Basic |
60,999,598 |
50,970,963 |
52,973,511 |
- Diluted |
60,999,598 |
50,970,963 |
52,973,511 |
Loss per share |
|
|
|
- Basic |
(0.04) |
(0.03) |
(0.07) |
- Diluted |
(0.04) |
(0.03) |
(0.07) |
-ends-
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