TIDMAXS
RNS Number : 9627O
Accsys Technologies PLC
13 August 2014
AIM: AXS
NYSE Euronext Amsterdam: AXS
13 August 2014
ACCSYS TECHNOLOGIES PLC
("Accsys" or the "Company")
Interim Management Statement
Accsys, the chemical technology group, focused on the
acetylation of wood, today issues its Interim Management Statement
to 13 August, including the first quarter trading period.
Key points include:
-- Total revenue increased by 29 per cent to EUR10.1m in the
quarter to 30 June 2014 (2013: EUR7.9m); The previous year included
licence income of EUR0.5m compared to nil in the quarter to June
2014;
-- Revenue from sales of Accoya(R) increased by 37 per cent to
EUR9.2m in the quarter to 30 June (2013: EUR6.7m);
-- Significant increase in Accoya(R) orders received compared to
same time last year provides greater confidence that Accoya(R)
revenue growth will continue for remainder of the year;
-- Total Accoya(R) production volumes increased by 46 per cent
to 7,618 cubic meters in the quarter to 30 June 2014 (2013: 5,224
cubic meters);
-- Significant progress made with Solvay, our Accoya(R) licensee:
-- Freiburg confirmed as location of their first Accoya(R)
plant, expected to be operational in first half of 2016;
-- Entered binding term sheet for a global cooperation agreement;
-- Full agreements and approval of the plant construction are
expected to be approved by December 2014;
-- Arbitration tribunal issued an award in respect of the
Diamond Wood licence agreement which we sought to terminate in
August 2013:
-- Licence agreement is to continue in full force and effect;
-- Diamond Wood can only claim for limited damages up to a maximum of EUR250,000.
-- Accoya(R) distributor and agency agreements now in place
covering most of Europe, Australia, Canada, Chile, China, India,
Mexico, Morocco, New Zealand, South Africa, parts of South-East
Asia and the USA; and
-- Cash balance of EUR13.5m at 30 June 2014 (March 2014: EUR15.2m).
Trading update
Accoya sales and production
Revenue from sales of Accoya(R) increased by 37 per cent to
EUR9.2m in the quarter to 30 June 2014 compared to the same quarter
in the previous year. Within this, sales to Accoya(R) customers
(excluding sales to Medite) increased by 33 per cent to
EUR8.2m.
Demand for Accoya(R) continues to increase and is attributable
to both old and new distributors. We now have a significantly
greater level of forward orders compared to last year which gives
us greater confidence that sales will continue to grow for the
remainder of this year. This is also evident from our sales
recorded in July and so far in August. This level of growth is
likely to remain at a lower level than that achieved in the
comparative period in the prior year which benefitted from the
significant impact of sales to Medite combined with significantly
greater production levels at our Arnhem production facility.
We continue to increase production levels at our Arnhem plant,
producing 7,618 cubic meters in the quarter. This compares to the
previous financial year during which the first quarter production
volume of 5,224 cubic meters ultimately led to full year production
of 24,119 cubic meters. The increase in the most recent quarter has
been achieved as we have successfully optimised short term
production constraints. We are continuing to implement a number of
process and production changes which have been identified from
earlier R&D projects and which will help increase the
production capacity further.
The increased volumes, together with price increases implemented
towards the end of the last financial year has resulted in an
improvement in the profitability of our manufacturing facility.
The more significant increase in production volumes compared to
revenue is attributable to the higher proportion of material sold
to Medite and to our tolling customers.
Solvay
We were pleased to announce earlier this month that Solvay, the
Belgian chemical group, confirmed its intention to build a 63,000
cubic meters Accoya(R) wood production plant in Freiburg, Germany,
with operations expected to start in the first half of 2016.
As we stated previously, the two parties had been exploring
forms of further co-operation. As a result, Accsys was also pleased
to confirm that it entered into a binding term sheet with Solvay,
in respect of a three year non-exclusive global co-operation
agreement to develop Accoya(R) under which Solvay will engage
Accsys to carry out targeted marketing activities to develop the
Accoya(R) market outside of Europe.
Accsys has granted Solvay a non-exclusive global Accoya(R)
licence option for defined available regions, reflecting Solvay's
interest in Accoya(R) licensing outside of Europe, under conditions
that reflect the improved acceptance of Accoya(R) in the market. In
addition Solvay has granted Accsys the option to invest up to a
substantial minority share in both the European project and in any
future Accoya(R) production projects. This would allow Accsys to
benefit from future manufacturing profits of any Accoya(R)
manufacturing plants that Solvay may construct under licence.
Accsys and Solvay have agreed to work together to complete the
various full agreements, implementing the detail of the binding
term sheet. These agreements, including the final approval of the
plant construction, are subject to approval by both corporates and
are expected to be entered into by the end of December 2014.
Diamond Wood
As reported on 25 July, the arbitration tribunal (the
"Tribunal") delivered a 'First Partial Final Award' (the "Award")
and ruling that, in response to Diamond Wood's claim for damages in
excess of EUR100 million, Diamond Wood can only claim for limited
damages, if any, up to a maximum of EUR250,000.
However, the Tribunal also ruledthatthe Licence Agreement is to
continue in full force and effect.
As a result of the Award, and with immediate effect:
-- Diamond Wood has the responsibility for all Accoya(R) wood
promotion marketing and selling to all customers within the
licensed territories in the Far East (which excludes various
countries including Japan and South Korea, for which Accsys retains
rights); and
-- Diamond Wood is obliged to resume its endeavours towards the
construction of an Accoya(R) manufacturing facility in the Far
East.
The Tribunal has yet to make an award in respect of each party's
respective legal costs.
Tricoya Technologies Limited ('TTL')
The market evaluation of Medite Tricoya(R) continues to be
positive with increasing acceptance of the product leading to a
significant increase in sales to customers. This is partly
reflected by the sales of Accoya(R) to Medite for the manufacture
of Medite Tricoya(R) , prior to dedicated facilities for wood
acetylation being built. These sales increased by 73 per cent to
EUR991,000 in the quarter to June 2014 compared to EUR573,000 in
the same quarter in the prior year.
In May 2014 we reported TTL's relationship with its licence
option holder in Latin America, Masisa, took a step forward with
the extension of the option and agreement to carry out an
evaluation of Tricoya(R) including market testing, production
testing and development of finished end-products with the launch of
Masisa Tricoya(R) Super MDF.
Masisa has industrial facilities in Chile, Argentina, Brazil,
Venezuela and Mexico as well as commercial operations in over 40
countries. Its main panel products are MDP (medium density
particleboard), MDF (medium density fibreboard) and Melamine
boards. The option agreement, originally signed in April 2012, if
exercised, grants Masisa exclusive production and distribution
rights for Tricoya(R) for the Latin American market, excluding
Brazil, for which the sales and marketing rights are
non-exclusive.
Financial results
Total revenue for the quarter ended 30 June 2014 increased by 29
per cent to EUR10.1m (2013: EUR7.7m). Total revenue included
EUR1.0m of sales of Accoya to Medite (2013: EUR0.6m) to enable them
to produce Medite Tricoya(R) and licence income of nil (2013:
EUR0.6m).
The cash balance as at 30 June 2014 of EUR13.5m represents a
decrease of EUR1.7m since 31 March 2014 (2013: EUR2.0m cash
out-flow recorded in first quarter). The reduction included a cash
outflow from operating activities (before changes in working
capital) of EUR0.9m for the nine months ended 31 December 2013,
which represents a 10 per cent decrease compared to the
corresponding quarter in the previous year. This marginal
improvement in cash out-flow is attributable to an improvement in
the profitability of the Arnhem manufacturing facility, but offset
by a lower R&D tax receipt and further Accsys legal costs
associated with the Diamond Wood arbitration of approximately
EUR0.7m.
Ends
For further information, please contact:
Accsys Technologies Paul Clegg, CEO via Blytheweigh
PLC Hans Pauli, COO
Will Rudge, FD
Nominated Adviser: Oliver
Cardigan
Corporate Broking: Christopher
Wilkinson +44 (0) 20 7260
Numis Securities Ben Stoop 1000
+44 (0) 20 7138
3204
+44 (0) 7816 924626
Tim Blythe +44 (0) 7989 394
Blytheweigh Alex Shilov 027
Frank Neervoort +31 681 734 236
Off the Grid (The Netherlands) Giedo Van Der Zwan +31 624 212 238
Notes to editors:
Accsys Technologies PLC(www.accsysplc.com) is an environmental
science and technology company whose primary focus is on the
production of Accoya(R) wood and technology licensing via its
subsidiary, Titan Wood Limited, which has manufacturing operations
in Arnhem, the Netherlands (through its subsidiary Titan Wood
B.V.), a European office in Windsor, United Kingdom, and an
American office in Dallas, Texas (via its subsidiary Titan Wood,
Inc). All group subsidiaries are ultimately 100% owned by Accsys
and trade as Accsys Technologies. Any references in this
announcement to agreements with Accsys shall mean agreements with
either Accsys or its subsidiary entities unless otherwise
specified. Accsys Technologies PLC is listed on the London Stock
Exchange AIM market and on Euronext Amsterdam by NYSE Euronext,
under the symbols 'AXS'. Accsys' operations comprise three
principal business units: (i) Accoya(R) wood production; (ii)
technology development, focused on a programme of continuous
development of and improvements to the process engineering and
operating protocols for the acetylation of solid wood and the
development of technology for the acetylation of wood elements; and
(iii) the licensing of technology for the production of Accoya(R)
wood and Tricoya(R) wood elements across the globe.
Accoya(R) wood (www.accoya.com) is produced using Accsys'
proprietary patented acetylation technology, that effectively
converts sustainably grown softwoods and non-durable hardwoods into
what is best described as a "high technology wood". Distinguished
by its durability, dimensional stability and, perhaps most
importantly of all, its reliability (in terms of consistency of
both supply and quality), Accoya(R) wood is particularly suited to
exterior applications where performance and appearance are valued.
Unlike most tropical and European hardwoods, its colour does not
degrade when exposed to ultraviolet light. Moreover, the Accoya(R)
wood production process does not compromise the wood's strength or
machinability. The combination of UV resistance, dimensional
stability, durability and retained strength means that Accoya(R)
wood offers a wealth of new opportunities to architects, designers
and specifiers. These benefits result in lower maintenance and
total cost of ownership while using a higher sustainable and
environmental responsible building material. For a full archive of
Accoya(R) news, visit www.accoya.com/news.asp.
Tricoya(R) Wood Elements(www.tricoya.com) are produced using
Accsys' proprietary technology for the acetylation of wood chips,
and particles for use in the fabrication of wood based composites,
including panel products. These composites demonstrate enhanced
durability and dimensional stability which allow them to be used in
a variety of applications that were once limited to solid wood or
man-made products. Exploitation of Accsys' proprietary technology
relating to Tricoya(R) Wood Elements is carried out through Tricoya
Technologies Limited, a joint venture between Accsys and INEOS
Industries Holdings Limited. Tricoya(R) Wood Elements are lauded as
the first major innovation in the wood composites industry in more
than 30 years.
Wood Acetylation is a process which increases the amount of
'acetyl' molecules in wood, thereby changing its physical
properties. When carried out to a sufficient level throughout the
wood, this process protects wood from rot by making it "inedible"
to most micro-organisms and fungi, without - unlike conventional
treatments - making it toxic. It also greatly reduces the wood's
tendency to swell and shrink, making it less prone to cracking and
ensuring that, when painted, it requires dramatically reduced
maintenance.
Accsys Technologies is the trading name of Titan Wood Limited.
ACCOYA(R), TRICOYA(R) and the Trimarque Device are registered
trademarks owned by Titan Wood Limited ("TWL"), a wholly owned
subsidiary of Accsys Technologies PLC, and may not be used or
reproduced without written permission from TWL, or in the case of
the Tricoya(R) registered trademark, from Tricoya Technologies
Limited, a joint venture between TWL and INEOS Industries Holdings
Limited with exclusive rights to exploit the Tricoya(R) brand.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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