leadf
logo-loader
RNS
viewXeros Technology Group PLC

Xeros Tech Grp plc - Interim Results

RNS Number : 7684Z
Xeros Technology Group plc
23 September 2020
 

23 September 2020

 

Xeros Technology Group plc

 

Interim results

 

Xeros Technology Group plc (AIM: XSG, 'the Group', 'Xeros'),  the developer and licensor of platform technologies which transform the sustainability and economics of clothing and fabrics during their lifetime, today publishes its interim results for the six months ended 30 June 2020.

 

Highlights

·       Licensed products close to market entry

Indian and Chinese licensees of Xeros' commercial laundry technology planning market launches in Q1 2021.

Indian licensee of garment finishing technology planning market launch in Q1 2021.

Planned market entry timing by Indian licensee of domestic laundry technology unchanged at mid-2021.

·       Microfibre filtration technology independently judged as vastly superior to existing products

University of Plymouth study of domestic washing machine filtration solutions published in July 2020 evaluated XFiltra as significantly more effective than all other devices.

JDA signed in March 2020 with leading global laundry equipment OEM to develop a filtration product for their commercial washing machines.

·       Transition to "Pure play" licensing model and organisation fully implemented

Completed exit from direct businesses with sale of Marken in June 2020.

Cash burn run rate down to less than £0.5m per month

Headcount reductions delivered in line with plans from 64 in December 2019 to 45 in August 2020

·       Adjusted EBITDA1 loss reduced by 59.8% to £3.0m (2019: loss £7.5m)

·       Net cash outflow from operations reduced by 55.4% to £4.1m (2019: £9.2m).

·       Cash of £6.2m as of 31st August 2020

·       Announcement today of intention to consolidate shares to reduce number of shares in issue. Further details to be published in due course.

 

 

Mark Nichols, Chief Executive of Xeros, said:

 

"Covid-19 has inevitably caused some delays in our licensees' programmes. Whilst we cannot rule out further disruption, our licensees are planning to place XDrumTM machines with affirmation customers in both commercial laundry and garment finishing markets in Q4 of this year ahead of full market launches early next. Our licensee's plans for entering the domestic washing machine market in India in mid-2021 remain unchanged. Following successful market penetration with these first contracts, our plans are to extend the geographic reach of our license portfolio.

 

The domestic version of XFiltraTM has now been independently judged as the leading solution for the abatement of the largest source of primary microplastic pollution which is created by the washing of our clothes at home. Our expectation is for our design to be licensed well in advance of European legislation deadlines, currently set at 2025. Our joint development programme with a world leading commercial laundry equipment company to create an industrial size filtration product is on track for completion at the end of the year.

 

The implementation of our current and future license contracts will deliver major improvements in the sustainability of clothing and fabrics during their manufacture including reductions in water, chemistry, energy, effluent and cost.  Extending the useful life of these essential items in the hands of consumers and businesses adds to the preservation of precious resources and furthers the protection of the environment.

 

1 Adjusted EBITDA is defined as loss on ordinary activities before interest, tax, share-based payment expense, exceptional costs, depreciation, and amortisation

 

Enquiries:

                                                                                                                                                                                                               

Xeros Technology Group plc

Mark Nichols, Chief Executive Officer

Paul Denney, Chief Financial Officer

Tel: 0114 321 6328

 

 

 

finnCap Limited (Nominated Adviser and Broker)

Julian Blunt/Teddy Whiley, Corporate Finance

Andrew Burdis/Sunila de Silva, ECM

Tel: 020 7220 0500

 

 

Notes to Editors

 

Xeros Technology Group plc develops and licenses platform technologies which transform the sustainability and economics of clothing and fabrics during their manufacture and over their lifetime of use.

Xeros' patented XOrb™ technologies significantly reduce the amount of water used in the dyeing, finishing or laundering of soft substrates such as garments and fabrics. They enable the remaining water to become far more efficient and effective in either affixing or removing molecules, the result being improvements in economic, operational, product and sustainability outcomes. The Group applies its XOrb technology in the fields of garment finishing and dyeing, tanning and commercial and domestic laundry.

Xeros' XDrum™ technology is a patented, simple, low cost machine drum design which enables XOrbs to be introduced into and subsequently removed from process cycles in Xeros' chosen fields. The design provides Original Equipment Manufacturers ('OEMs') with the ability to make simple and low-cost changes in their products to incorporate the Company's XOrb technology.

The Group has signed multiple license agreements for its XDrum and XOrb products in major commercial and domestic markets.

XFiltra™ is a proprietary in-machine filtration technology which prevents harmful microfibres including microplastics, generated during washing cycles, from being released into the world's river and oceans.  Microplastics released from synthetic clothing during laundering is the largest source of primary microplastic pollution entering oceans every year.

For more information, please visit - http://www.xerostech.com/

 

Covid-19

The impacts of Covid-19 on our current and prospective licensees and their markets have become clearer as the year has progressed. Currently, the demand for consumer durables including domestic washing machines has not been materially impacted and as a result, we do not anticipate changes in our licensing strategy or plans for our domestic laundry and filtration technologies.

We do not believe there will be a permanent reduction in the clothing manufacturing industry which we address with our garment finishing and dyeing applications. The demands of consumers, retailers, brands and regulators for improved environmental performance will continue to increase and with it, the demand for our technologies. However, we do believe that manufacturers' capital replacement levels will be reduced for some time as a direct result of the pandemic. We have responded to this together with our licensee by developing a retrofit offering of our XDrum design for existing machines offering clothing manufacturers enhanced sustainability with a rapid economic payback.

Opposite our commercial laundry application, the greatest impact is currently being felt in the hospitality industry where broad immunisation with an effective vaccine is likely necessary before customer numbers return to previous levels. However, given the sustainability and economic credentials of Xeros' technologies, our licensees remain fully committed to entering their local markets as broadly as possible including segments beyond the hotel industry including specialist cleaning.

As regards our own operations, following disruptions to attendance at our technology centre in Sheffield in Q2, the Company is now operating as normal with staff working at home as appropriate, in accordance with UK government guidelines.

Whilst the understanding of the impacts of Covid-19 will continue to evolve, we strongly believe that the need for our technologies will continue to increase given the nature of the secular trends that they address. Our patent portfolio provides coverage through the mid to late 2030s.

Execution of license contracts and joint development agreements ('JDA')

During the period, SeaLion in China and IFB in India completed the design of XDrum machines for the commercial laundry markets in their respective countries with models to be trialed with selected customers in Q4 of this year ahead of product launches planned for early 2021. Due to Covid-19, these timings are approximately 3 months behind our original expectations. The initial machine size range for this market ranges from 25kg to 60kg per cycle. The XOrb specification for these machines has also been agreed and will be manufactured by BASF.

Ramsons who are initially addressing the denim finishing market, have a similar approach and are on a similar timeframe for their denim finishing solution which will include machine sales and retrofit offers. The sizes of these machines range from 80kg to 200kg with the XOrbs supplied by Xeros' nominated supplier.

Following these product launches and a sustained period of performance, our intention is to enter similar licensing arrangements with OEMs in other selected geographies.

Subject to any further disruption from Covid-19, IFB currently plans to launch a platform of Xeros enabled domestic washing machines late Q2 or early Q3 2021. Our JDA with Midea is over a longer timeframe with the target to have completed lifetime testing of a prototype by the end of the year 2020 ahead of commencing design for manufacture.

In July 2020, Xeros' XFiltra technology was independently evaluated by the University of Plymouth's Institute of Marine Litter as being the leading microfibre filtration design available. Following which, we are now engaged with multiple stakeholder groups including OEMs on the integration of a domestic version in washing machines in advance of legislation in Europe, expected in 2025. Our JDA for the development of an industrial sized product with a leading laundry equipment company is on track for market entry in 2021.

Intellectual Property

During the period, we continued to expand our intellectual property portfolio in the area of filtration. Our total patent portfolio currently comprises in excess of 30 patent families which are either approved or in application. The Group continues to carry significant patent defence and litigation insurance.

Operations

Since the beginning of the year, the Company has completed its planned migration to become a "pure play" licensing company. The last direct operation, Marken in the US, being sold in June 2020. Our team now comprises 45 personnel focused on successfully winning and executing license agreements in each of our applications within targeted geographies.

A consequence of exiting the direct business operations, which were necessary to prove our technologies ahead of pursuing a licensing model, is that Group turnover has reduced materially year on year. Going forward, our plan is to add high margin royalty income starting in 2021 as our licensees enter their respective markets.

Outlook

Covid-19 has caused incoming royalty streams to be delayed by approximately 3 months with market launches now to commence in Q1 2021. At present, it is not possible to predict if there will be further disruption to any of our licensees' operations.

The environmental and economic benefits case for our licensees' customers remain compelling and whilst the pandemic has caused our current licensees' significant disruption, their commitment to commercialising Xeros' technologies has not diminished.

Our filtration platform technology is materially advanced with an industrial sized product in development, and with our domestic version currently setting the industry standard.

The Board has decided to put proposals to shareholders during the second half of this year to reorganize the share capital of the Company, specifically to consolidate the number of shares in issue; the Board believes that reducing the number of shares in issue will narrow the bid-offer spread on the shares in percentage terms, reduce price volatility and generally improve the marketability of the shares.  Formal proposals are expected to be put to members in due course.

 

 

Group revenue was generated as follows:

 

 

 

Unaudited

6 months to

 

Unaudited

6 months to

 

12 months ended

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Machine sales

8

393

652

Service income

172

756

1,018

Consumable sales

-

9

21

Licensing income

35

76

123

 

_____ _

__   ____

_   _____

Total revenue

215

1,234

1,814

 

              

              

              

 

 

 

 

 

The Group financial results for the six months ended 30 June 2020 reflect the continuing progress of Xeros in transitioning from a direct operations business model to a licensing business model, with a 59.8% reduction in adjusted EBITDA loss on continuing operations to £3.0m (2019: loss £7.5m)

 

Group revenue from continuing operations reduced by 82.6% to £0.2m in the six months ended 30 June 2020 (2019: £1.2m). This reduction of £1.0m is as a result of the sale of the majority of the US Hydrofinity commercial washing machine contracts to third party channel partners, as previously reported. Gross profit on continuing operations was £0.1m (2019: £0.0m) following the sale of some underperforming Hydrofinity customer contracts in 2019 and the use of channel partners to service the remaining customer contracts.

 

On the 1st June, the Group announced the completion of the sale of the Marken specialist cleaning business in North America. As was the case for the year ended 31 December 2019, the revenue of £0.2m (2019: £0.4m) and the operating loss of £0.3m (2019: £0.8m) related to Marken has been shown as a discontinued operation.

 

In the period, the Group recognised £0.0m (2019 £0.1m) of license revenue arising from license partner contributions to development costs. The Group expects licensing revenue to grow as licensing partners launch products incorporating Xeros' technologies in their markets in 2021.

 

Administrative expenses, before exceptional items, reduced by 56.4% to £3.6m (2019: £8.2m) reflecting both the exit from direct operations as previously reported and planned reductions in headcount that were realised in the period. Whilst Covid-19 impacts have been felt in the pace of adoption of our technologies by our license partners, there has been minimal direct Covid-19 related impact upon the Group's cost base which is now solely centred on the Group's technology centre in Sheffield.

 

The Group reduced its adjusted EBITDA loss on continuing operations by 59.8% to £3.0m (2019: loss £7.5m) as a result of the factors described above.

 

Adjusted EBITDA is considered one of the key financial performance measures of the Group as it reflects the true nature of our continuing trading activities. Adjusted EBITDA is defined as the loss on ordinary activities before interest, tax, share-based payment expense, non-operating exceptional costs, depreciation and amortisation.

 

The Group reduced its operating loss to £3.5m (2019: £8.2m), a reduction of 57.8%. The loss per share was 0.00p (2019: loss 0.04p).

 

Net cash outflow from operations reduced to £4.1m (2019: £9.2m), a reduction of 55.4% in line with the reduction of adjusted EBITDA in the period. The Group had existing cash resources as at 30 June 2020 of £7.0m (2019: £6.4m) and remains debt free. Group cash as at 31 August 2020 is £6.2m. In May the Group raised £5.6m, net of costs, from shareholders.

 

Overall cash utilisation remains in line with the Board's expectations at less than £0.5m per month; the directors expect cash utilisation to remain at this level until such time as licensing revenue is generated from our license partners.

 

 

For the six months ended 30 June 2020

 

 

Unaudited

Unaudited

 

 

 

Six months

Six months

12 months

 

 

ended

ended

ended

 

 

30 June

30 June

31 December

 

 

2020

2019

2019

 

Note

£'000

£'000

£'000

 

 

 

 

 

Revenue

 

215

1,234

1,814

Cost of sales

 

(96)

(1,227)

(2,125)

 

 

_______

_______

_______

Gross profit/(loss)

 

119

7

(311)

 

 

 

 

 

Administrative expenses

 

(3,587)

(8,218)

(16,773)

 

 

 

 

 

Adjusted EBITDA*

 

(3,013)

(7,489)

(14,433)

Share based payment expense

 

(342)

(411)

(826)

Exceptional administrative expenses **

 

-

-

(1,252)

Depreciation of tangible fixed assets

 

(113)

(311)

(573)

 

 

 

 

 

Operating loss

 

(3,468)

(8,211)

(17,084)

Finance income

 

5

47

60

Finance expense

 

(3)

(23)

(1,502)

 

 

_______

_______

_______

Loss before taxation

 

(3,466)

(8,187)

(18,526)

Taxation

3

-

(7)

898

 

 

_______

_______

_______

Loss after tax from continuing operations

 

(3,466)

(8,194)

(17,628)

Loss from discontinued operations

 

(344)

(845)

(3,015)

 

 

 

 

 

Loss for the period

 

(3,810)

(9,039)

(20,643)

 

 

_______

_______

_______

Other comprehensive loss

 

 

 

 

Items that are or maybe reclassified to profit or loss:

 

 

 

 

Foreign currency translation differences - foreign operations

 

(10)

(63)

227

 

 

___ ____

 __ _____

_______

Total comprehensive expense for the period

 

(3,820)

(9,102)

(20,416)

 

 

___ ____

____ _ __

_______

Loss per ordinary share

 

 

 

 

Basic and diluted on loss from continuing operations

5

(0.00)p

(0.04)p

(5.57)p

Basic and diluted on loss from discontinued operations

 

(0.00)p

(0.00)p

(0.96)p

Basic and diluted on loss for the period

5

(0.00)p

(0.04)p

(6.53)p

 

 

_______

_______

_______

 

*Adjusted EBITDA comprises loss on ordinary activities before interest, tax, share-based payment expense, exceptional administrative expenses, depreciation and amortisation.

** Exceptional administrative expenses in 2019 represent the loss on sale of lease receivables in the US

 

 

 

For the six months ended 30 June 2020

 

 

Share

capital

Share

 premium

Merger reserve

Foreign

currency

translation

reserve

Retained

earnings

deficit

Total

 

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

At 1 January 2019

386

105,184

15,443

(2,473)

(98,568)

19,972

Impact of change in accounting policy

-

-

-

-

(83)

(83)

Adjusted balance 1 January 2019

386

105,184

15,443

(2,473)

(98,651)

19,889

Loss for the year

-

-

-

-

(20,643)

(20,643)

Other comprehensive expense

-

-

-

227

-

227

Loss and total comprehensive expense for the period

-

-

-

227

(20,643)

(20,416)

Transactions with Owners recorded directly in equity:

 

 

 

 

 

 

Issue of shares

790

4,477

-

-

-

5,267

Costs of share issues

 

(435)

-

-

-

(435)

Share based payment expense

-

-

-

-

826

826

Total contributions by and distributions to owners

790

4,042

-

-

826

5,658

At 31 December 2019

1,176

109,226

15,443

(2,246)

(118,468)

5,131

 

 

 

 

 

 

 

At 1 January 2019

386

105,184

15,443

(2,473)

(98,568)

19,972

Impact of change in accounting policy

-

-

-

-

(83)

(83)

Adjusted balance 1 January 2019

386

105,184

15,443

(2,473)

(98,651)

19,889

Loss for the period

-

-

-

-

(9,039)

(9,039)

Other comprehensive expense

-

-

-

(63)

-

(63)

Loss and total comprehensive expense for the period

-

-

-

(63)

(9,039)

(9,102)

Transactions with Owners recorded directly in equity:

 

 

 

 

 

 

Share based payment expense

-

-

-

-

411

411

Total contributions by and distributions to owners

-

-

-

-

411

411

At 30 June 2019

386

105,184

15,443

(2,536)

(107,279)

11,198

 

 

 

 

 

 

 

Balance at 1 January 2020

1,176

109,226

15,443

(2,246)

(118,468)

5,131

Loss for the period

-

-

-

-

(3,810)

(3,810)

Other comprehensive (loss) /

-

-

-

(10)

-

(10)

Loss and total comprehensive income for the period

-

-

-

(10)

(3,810)

(3,820)

Transactions with Owners recorded directly in equity:

 

 

 

 

 

 

Issue of shares

1,800

4,200

-

-

-

6,000

Cost of share issues

-

(427)

-

-

-

(427)

Share based payment expense

-

-

-

-

342

342

Total contributions by and distributions to owners

1,800

3,773

-

-

342

5,915

At 30 June 2020

2,976

112,999

15,443

(2,256)

(121,936)

7,226

 

 

 

As at 30 June 2020

 

 

Unaudited

Unaudited

 

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

-

1,186

-

Property, plant and equipment

366

2,500

640

Trade and other receivables

87

-

143

 

453

3,686

783

Current assets

 

 

 

Inventories

316

890

341

Trade and other receivables

698

3,037

584

Assets classified as held for sale

-

-

252

Cash and cash equivalents

7,045

6,448

5,625

 

8,059

10,375

6,802

 

 

 

 

Total assets

8,512

14,061

7,585

 

 

 

 

Liabilities

 

 

 

Non-current liabilities

 

 

 

Right of use liabilities

(55)

-

(287)

Deferred tax

(38)

(38)

(38)

 

(93)

(38)

(325)

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

(1,193)

(2,825)

(2,129)

 

(1,193)

(2,825)

(2,129)

 

 

 

 

Total liabilities

(1,286)

(2,863)

(2,454)

 

 

 

 

Net assets

7,226

11,198

5,131

 

Equity

 

 

 

Share capital

2,976

386

1,176

Share premium

112,999

105,184

109,226

Merger reserve

15,443

15,443

15,443

Foreign currency translation reserve

(2,256)

(2,536)

(2,246)

Accumulated losses

(121,936)

(107,279)

(118,468)

Total equity

7,226

11,198

5,131

 

 

 

 

 

 

For the six months ended 30 June 2020

 

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

12 months to

 

30 June

30 June

31 December

 

2020

2019

2019

 

£000

£000

£000

Operating activities

 

 

 

Loss before tax

(3,466)

(8,187)

(18,526)

Adjustment for non-cash items:

 

 

 

  Depreciation of property, plant and equipment

113

388

573

  Share based payment

342

411

826

Decrease in inventories

25

67

546

(Increase)/decrease in trade and other receivables

(123)

642

2,850

Decrease in trade and other payables

(879)

(1,605)

(2,090)

Impairment of fixed assets

-

-

583

Finance income

(5)

(47)

(60)

Finance expense

3

23

1,502

Cash used in operations

(3,990)

(8,308)

(13,796)

Tax (payments)/receipts

-

(7)

898

Cashflow from discontinued operations

(119)

(900)

(1,183)

Net cash outflow used in operations

(4,109)

(9,215)

(14,081)

 

 

 

 

Investing activities

 

 

 

Finance income

5

47

60

Finance expense

(3)

(23)

(1,502)

Acquisition of subsidiary undertaking

-

-

(642)

Purchases of property, plant and equipment

-

(132)

(147)

Sale of property, plant and equipment

-

-

127

Cashflow from discontinued operations

-

(23)

(23)

Net cash inflow/(outflow) from investing activities

2

(131)

(1,485)

 

 

 

 

Financing activities

 

 

 

Proceeds from issue of share capital, net of costs

5,573

-

4,833

Payment of lease liabilities

(34)

(211)

-

Net cash inflow/(outflow) from financing activities

5,539

(211)

4,833

 

 

 

 

Increase/(decrease) in cash and cash equivalents

1,432

(9,557)

(10,733)

Cash and cash equivalents at start of year

5,625

16,001

16,001

Effect of exchange rate fluctuations on cash held

(12)

4

357

Cash and cash equivalents at end of the period

7,045

6,448

5,625

 

 

 

 

 

Notes to the financial statements

for the six months ended 30 June 2020

 

1. General information

 

The principal activity of Xeros Technology Group plc ("the Company") and its subsidiary companies (together "Xeros" or the "Group") is the development and licensing of platform technologies which transform the sustainability and economics of clothing and fabrics during their manufacture and over their lifetime of use.

Xeros Technology Group plc is domiciled in the UK and incorporated in England and Wales (registered number 8684474), and its registered office address is Unit 2 Evolution, Advanced Manufacturing Park, Whittle Way, Catcliffe, Rotherham, S60 5BL. The Company's principal activity is that of a holding company.

 

The interim financial information was approved for issue on 23 September 2020.

 

2. Basis of preparation

 

The interim financial information has been prepared under the historical cost convention and in accordance with the recognition and measurement requirements of International Financial Reporting Standards ("IFRS") as adopted by the European Union, IFRIC interpretations, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

The interim financial information has been prepared on a going concern basis and is presented in Sterling to the nearest £'000.

 

The accounting policies used in the financial information are consistent with those used in the prior year. The following adopted IFRSs have been issued but have not been applied by the Group in these financial statements. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated:

 

·       IFRS 17 Insurance Contracts, including Amendments to IFRS 17, effective 1 January 2023

·       Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities and Current or Non-Current, effective 1 January 2022

·       Amendments to IFRS 3 Business Combinations, IFRS 16 Property, Plant and Equipment, IAS 37 Contingent Liabilities and Contingent Assets, and Annual Improvements 2018 - 2020, all effeci3 1 January 2022

 

Further IFRS standards or interpretations may be issued that could apply to the Group's financial statements for the year ending 31 December 2020. If any such amendments, new standards or interpretations are issued then these may require the financial information provided in this report to be changed. The Group will continue to review its accounting policies in the light of emerging industry consensus on the practical application of IFRS.

 

The preparation of financial information in conformity with the recognition and measurement requirements of IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.

 

The interim financial information does not include all financial risk management information and disclosures required in annual financial statements. There have been no significant changes in any risk or risk management policies since 31 December 2019. The principal risks and uncertainties are materially unchanged and are as disclosed in the Annual Report for the year ended 31 December 2019.

 

The interim financial information for the six months ended 30 June 2020 and for the six months ended 30 June 2019 does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006 and is neither reviewed nor audited. The comparative figures for the year ended 31 December 2019 are not the Group's consolidated statutory accounts for that financial year.  Those accounts have been reported on by the Group's auditor and delivered to the Registrar of Companies.  The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006.  

 

3. Taxation

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

Year ended

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Current tax:

 

 

 

Foreign taxes paid

-

7

-

R & D tax credits

-

-

(898)

Total tax (charge)/credit

-

7

(898)

 

The Group accounts for Research and Development tax credits where there is certainty regarding HMRC approval. There is no certainty regarding the claim for the year ended 31 December 2019 and as such no relevant credit or asset is recognised.

 

4. Segmental analysis

 

The financial information by segment detailed below is frequently reviewed by the Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"). The segments are distinct due to the markets they serve. The all other activities segment contained supporting functions and activities in respect of applications that have not yet been fully commercialised.

 

The Marken segment is classified as a discontinued operation for the six months ended 30 June 2020 and as such is not included in the below analysis.

 

Unaudited six months ended 30 June 2020:

 

 

Hydrofinity

All Other

Activities

Total

 

£'000

£'000

£'000

Revenue

180

35

215

Gross profit

84

35

119

Adjusted EBITDA

(498)

(2,515)

(3,013)

Operating loss

(414)

(3,054)

(3,468)

Net finance income/(expense)

 

5

 

(3)

 

2

Loss before tax

(409)

(3,057)

(3,466)

 

Segmental net assets

 

792

 

6,434

 

7,226

 

Other segmental information:

 

 

 

Depreciation

-

113

113

 

 

 

Unaudited six months ended 30 June 2019:

 

 

Hydrofinity

All Other

Activities

Total

 

£'000

£'000

£'000

Revenue

1,158

76

1,234

Gross (loss)/profit

(69)

76

7

Adjusted EBITDA

(1,456)

(5,971)

(7,427)

Operating loss

(1,532)

(6,679)

(8,211)

Net finance income/(expense)

 

47

 

(23)

 

24

Loss before tax

(1,485)

(6,702)

(8,187)

 

Segmental net assets

 

2,435

 

20,476

 

22,911

 

Other segmental information:

 

 

 

Capital expenditure

-

1,303

1,303

Depreciation

-

352

352

 

 

Year ended 31 December 2019:

 

 

Hydrofinity

All Other

Activities

Total

 

£'000

£'000

£'000

Revenue

1,691

123

1,814

Gross (loss)/profit

(433)

122

(311)

Adjusted EBITDA

(4,274)

(10,159)

(14,433)

Operating loss

(4,306)

(12,778)

(17,084)

Net finance income/(expense)

 

59

 

(1,501)

 

(1,442)

Loss before tax

(4,247)

(14,279)

(18,526)

 

Segmental net assets

 

560

 

4,571

 

5,131

 

Other segmental information:

 

 

 

Capital expenditure

-

147

147

Depreciation

-

573

573

 

 

5. Loss per share

 

Basic loss per share is calculated by dividing the loss attributable to equity holders by the weighted average number of shares in issue during the period.  The Group was loss-making for the 6-month periods ended 30 June 2020 and 30 June 2019 and also for the year ended 31 December 2019.  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 reported for each of the periods reported.

 

The calculation of basic and diluted loss per ordinary share is based on the loss for the period, as set out below. Calculations of loss per share are calculated to two decimal places.

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

Year ended

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Total loss from continuing operations

(3,466)

(8,194)

(17,268)

Total loss from discontinued operations

(344)

(845)

(3,015)

Total loss attributable to the equity holders of the parent

(3,810)

(9,039)

(20,643)

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

Year ended

 

30 June

30 June

31 December

 

2020

2019

2019

 

£'000

£'000

£'000

Issued ordinary shares at the start of the period

783,762,131

257,035,719

257,039,151

Effect of shares issued for cash

309,890,692

1,140

59,167,152

Weighted average number of shares at the end of the period

1,093,652,823

257,036,859

316,206,303

 

 

 

 

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

Year ended

 

30 June

30 June

31 December

 

2020

2019

2019

Basic and diluted on loss from continuing operations

(0.00)p

(0.04)p

(5.57)p

Basic and diluted on loss from discontinued operations

(0.00)p

(0.00)p

(0.95)p

Basic and diluted on loss from total loss for the period

(0.00)p

(0.04)p

(6.53)p

 

 

6. Discontinued operations

 

During the period ended 30 June 2020, the Group disposed of the Marken operating segment which was classified as held for sale as at the 31 December 2019 in accordance with IFRS 5.

 

The results of the discontinued operations are shown below for the 6 months ended 30 June 2020, 6 months ended 30 June 2019 and the year ended 31 December 2019.

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

Year ended

 

30 June

30 June

31 December

 

2020

2019

2019

Revenue

238

360

754

Expenses

(413)

(1,205)

(3,242)

Impairment of assets held for sale

(99)

-

(527)

Loss before and after income tax from discontinued operations

(274)

(845)

(3,015)

 

 

The following assets were held for sale in relation to the discontinued operation as at reporting period ends. There were no liabilities classified as held for sale at any period end.

 

 

Unaudited

Unaudited

 

 

6 months to

6 months to

Year ended

 

30 June

30 June

31 December

 

2020

2019

2019

Assets classified as held for sale

 

 

 

- Property, plant and equipment

-

-

180

- Inventories

-

-

72

Total assets held for sale

-

-

252

 

7. Seasonality

 

The Group experiences no material variations due to seasonality.

 

 

8. Availability of interim statement

 

This interim statement will be available on Xeros' website at www.xerostech.com.

 

 

Forward-looking statements

 

This announcement may include certain forward-looking statements, beliefs or opinions, including statements with respect to Xeros' business, financial condition and results of operations.  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other various or comparable terminology. These statements are made by the Xeros Directors in good faith based on the information available to them at the date of this announcement and reflect the Xeros Directors' beliefs and expectations. By their nature these statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, developments in the global economy, changes in government policies, spending and procurement methodologies, and failure in health, safety or environmental policies.

 

No representation or warranty is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements speak only as at the date of this announcement and Xeros and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any forward-looking statements in this announcement. No statement in the announcement is intended to be, or intended to be construed as, a profit forecast or to be interpreted to mean that earnings per Xeros share for the current or future financial years will necessarily match or exceed the historical earnings. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.

 

2 Hydrofinity is the Commercial Laundry business of Xeros

 

 

 

 

 

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 rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR SEUFLEESSEDU

Quick facts: Xeros Technology Group PLC

Price: 1.515

Market: AIM
Market Cap: £30.05 m
Follow

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

44 min read