Applied Graphene Materials PLC Operational update (3273P)
10 October 2019 - 12:00AM
UK Regulatory
TIDMAGM
RNS Number : 3273P
Applied Graphene Materials PLC
09 October 2019
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
9 October 2019
Applied Graphene Materials plc
("Applied Graphene Materials", "AGM", the "Company" or "the
Group")
Operational update
Applied Graphene Materials (LSE: AGM), the producer of specialty
graphene materials and dispersions, provides an operational update
ahead of the publication of its preliminary results on 16 October
2019 in respect of the year ended 31 July 2019.
AGM is to re-align its resources around its efficient dispersion
and application technology to better support the product
development of those customers that present the nearest-term
revenue opportunities, in order to focus on growing sales. This
re-alignment will reduce the Company's operating cost base, extend
AGM's cash runway to at least two years and place the Company in a
better position to deliver new products to the market place.
Background
This year, the Company has made important technical progress
with its commercial partners and has strengthened its graphene
dispersion product offerings which enable relative ease of use of
graphene materials by customers. The Board believes that AGM
remains extremely well positioned in its focused sectors as a
result of its strong IP and compelling graphene application and
integration technology. AGM's customer collaborations have
continued to progress and gain momentum. However, it continues to
take time to test products and build significant revenues. Further
information on progress with customers will be included in the full
year results.
Experience over recent years has clearly demonstrated that AGM's
core expertise is in dispersion and application know-how to
integrate the performance benefits of graphene nanoplatelets in an
effective way in customer products. The Board has therefore decided
to focus its resources and activities around meeting customer
opportunities through the dispersion and end-use application of
graphene as the best means of revenue growth.
As a result, today, the Board is entering a period of
consultation with its employees with a view to implementing a
re-alignment of its operations towards dispersion and application
know-how and customer support. The Company will focus its resources
on growing revenues from its significant pipeline of approximately
100 active engagements.
The Group will largely maintain its resources in its business
development and technical teams to support customers in product
development, rigorous testing and customer engagement whilst
streamlining its manufacturing operations.
Financial impact (subject to consultation)
The cash operating cost base of the Company of GBP4.3m
(unaudited) in the year to 31 July 2019 is expected to fall by
circa GBP0.9m and GBP1.1m for the years ending 31 July 2020 and
2021, respectively. The cost of implementation of these changes is
circa GBP0.2m. These actions will extend the Company's cash run-way
to at least Q4 2021.
Unaudited draft preliminary results for the year ended 31 July
2019
As noted above, the Company will announce its results on 16
October 2019. Unaudited revenues and other income for the year were
GBP0.12m with an unaudited EBITDA loss of GBP4.6m.
The Group had net cash of GBP6.1m as at 31 July 2019 and it
received an R&D tax credit of GBP0.6m in August 2019.
Commenting on the proposed re-alignment, Adrian Potts, Chief
Executive said:
"Our absolute priority and focus remains to support our
commercial partners in successfully incorporating graphene,
achieving product launches and growing revenues. We have built an
exceptional technology base around dispersion know-how and
practical end-use of our products. The Board strongly believes that
AGM is well placed in graphene and target market sectors and is
confident that, with the reduced cost base and existing cash
resources, the Company will have sufficient time to significantly
grow revenues in the emerging graphene market.
I personally thank all of those employees that will be affected
by this process for their hard work over the years and their
valuable contribution to the Company."
For further information please contact:
Applied Graphene Materials
+44 (0) 1642 438 214
Adrian Potts, Chief Executive Officer
David Blain, Chief Financial Officer
N+1 Singer
+44 (0) 207 496 3000
Richard Lindley / Justin McKeegan / Mia Gardner
Hudson Sandler
+44 (0) 207 796 4133
Charlie Jack / Emily Dillon
Notes to Editors:
About Applied Graphene Materials
Applied Graphene Materials works in partnership with its
customers using its knowledge and expertise to provide bespoke
graphene dispersions and formats to deliver enhancements and
benefits for a wide range of applications. The Group's strategy is
to target commercial application in three core markets: coatings,
composites and polymers and functional fluids.
The Group has developed proprietary bottom-up processes capable
of producing high purity graphene nanoplatelets using a continuous
process. The manufacturing processes are based on sustainable,
readily available raw materials and therefore do not rely on the
supply of graphite, unlike most other graphene production
techniques. Applied Graphene Materials owns the intellectual
property and know-how behind these processes.
Applied Graphene Materials was founded by Professor Karl Coleman
in 2010 with its operations and processes based on technology that
he initially developed at Durham University. The Group was admitted
to AIM in November 2013, raising GBP11 million, and is based at the
Wilton Site on Teesside.
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END
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