TIDMAXS
RNS Number : 1970T
Accsys Technologies PLC
23 November 2021
AIM: AXS
Euronext Amsterdam: AXS
23 November 2021
Accsys Technologies PLC
("Accsys", the "Group" or the "Company")
Interim Results for the six months ended 30 September 2021
Strong revenue growth - delivering on expansion strategy
Accsys, the fast-growing and eco-friendly company that combines
chemistry and technology to create high performance, sustainable
wood building products, announces its interim results for the six
months ended 30 September 2021 ("H1 FY 22").
H1 FY H1 FY Change
22 21
Total Group revenue EUR 56.2m EUR42.9m 31%
Underlying gross
profit EUR 17.2m EUR14.3m 20%
Accoya(R) Manufacturing
margin(1) 31.0% 33.5% (250bps)
Underlying EBITDA(2) EUR 4.5m EUR4.3m 5%
Underlying EBIT(3) EUR 1.5m EUR1.6m (6%)
Underlying (loss) ( EUR
before tax 0.3m) (EUR0.1m)
(Loss)/profit before ( EUR
tax 0.2m) EUR1.0m
Period end net cash/
(debt)(4) EUR 2.4m (EUR16.3m)
Accoya(R) sales volume 29,555m(3) 26,422m(3) 12%
Key highlights:
-- Group revenue and Accoya(R) sales volumes up 31% and 12%
respectively versus the prior year comparative period, which was
impacted by COVID-19.
-- Maintaining good profitability with underlying gross profit up 20%:
o Improvement in gross profit supported by Accoya(R) sales price
increases substantially offsetting higher raw material costs.
o 31% Accoya(R) manufacturing margin with 250bps decline due to
changes in product sales mix.
-- 5% growth in underlying EBITDA(2) with planned investment in
group organisation capability to support growth and the expected
production capacity increases in 2022.
-- Strategic growth projects under our '5x' production capacity
expansion target by 2025 are progressing well:
o World-first Tricoya(R) (Hull) plant - on track to commence
operations by July 2022.
o Accoya(R) (Arnhem) plant - addition of a fourth reactor (+33%
new capacity to 80,000m(3) ) on track to be complete by around the
end of Q1 calendar year 2022.
o Accoya(R) USA JV - further project work progressing; final
investment expected in coming months upon completion of financing
workstream.
-- 4% increase in operating cash flow(5) with continuing good
cash generation from Accoya(R) segment; Net cash of EUR2.4m
includes cash of EUR60.9m at period-end to fund expansion projects
including planned US JV investment; Recent Group debt refinance
improving debt cost and structure.
Notes
(1) Accoya(R) Manufacturing margin is defined as Accoya(R)
segmental underlying gross profit (excluding Licence income and
marketing services) divided by Accoya(R) segmental revenue
(excluding Licence income and marketing services) (See note 2 to
the financial statements)
(2) Underlying EBITDA is defined as Operating profit/(loss)
before Exceptional items and other adjustments, depreciation and
amortisation, and includes the Group's attributable share of our
USA joint venture's underlying EBITDA. (See note 2 to the financial
statements).
(3) Underlying EBIT is defined as Operating profit/(loss) before
Exceptional items and other adjustments, and includes the Group's
attributable share of our USA joint venture's underlying EBIT. (See
note 2 to the financial statements).
(4) Net cash/(debt) is defined as short term and long-term
borrowings (including lease obligations) less cash and cash
equivalents. (See note 12 to the financial statements).
(5) Group operating cashflow is Cash inflows from operating
activities before changes in working capital and exceptional
items.
Robert Harris, CEO, commented :
"We are pleased to report our first half results, delivering
strong growth in both revenue and gross profits. This performance
demonstrates further progress on our strategy and the hard work of
our employees to deliver for our customers.
There is continuing high demand for our Accoya(R) and Tricoya(R)
products as customers focus on higher performance materials as well
as on sustainability. It is this demand, which continues to exceed
supply, that has enabled us to substantially offset the wider
market pressures from raw materials costs and supply chain
disruption through price increases.
We are progressing our strategic growth projects to increase
production capacity five-fold by 2025. The construction of a fourth
Accoya(R) reactor in Arnhem is progressing well and our US
Accoya(R) JV with Eastman is approaching its final investment
decision. With Accsys now directly project-managing the completion
of our Hull Tricoya(R) facility, we have made good progress towards
the plant being commercially operational by July 2022. Our
expansion at Arnhem and the new Hull plant will together see Accsys
double its present operating production capacity of 60,000m(3) to
120,000m(3) by July 2022.
Looking ahead we remain confident in delivering on market
expectations. Longer term we believe there will be significant
further demand for Accsys' higher performance, lower maintenance
and more sustainable products as the world focuses on
decarbonisation."
Analyst presentation
There will be a presentation relating to these results for
analysts at 10:00am UK time (11:00am CET) today. The presentation
will take the form of a webcast and conference call, details of
which are below:
Webcast link (for audio and visual presentation):
Click on the link below or copy and paste ALL of the following
text into your browser:
https://edge.media-server.com/mmc/p/nbrgpb82
Conference call details (audio only - not recommended for use in
conjunction with the webcast link):
Event Passcode : 3673829
Local - United Kingdom: +44 (0) 2071 928338
National free phone - United Kingdom: 0800 279 6619
Local - Amsterdam, Netherlands: +31 (0) 207 956 614
National free phone - Netherlands: 0800 023 5015
Local - USA: +1 6467 413 167
National free phone - USA: 18 778 709 135
Ends
For further information, please contact:
Accsys Technologies PLC ir@accsysplc.com
Sarah Ogilvie, Investor Relations
======================================== ======================
Numis Securities (London)
Oliver Hardy (NOMAD), Ben Stoop +44 (0) 20 7260 1000
======================================== ======================
Investec Bank plc (London)
Carlton Nelson, Alex Wright +44 (0) 20 7597 5970
ABN Amro (Amsterdam)
Richard van Etten, Dennis van Helmond +31 20 344 2000
======================================== ======================
FTI Consulting (UK)
Matthew O'Keeffe, Alex Le May +44 (0) 20 3727 1340
======================================== ======================
Off the Grid (The Netherlands)
Frank Neervoort, Yvonne Derske +31 681 734 236
======================================== ======================
Notes to editors:
Accsys (Accsys Technologies PLC) is a fast-growing business with
a purpose: changing wood to change the world. The company combines
chemistry, technology and ingenuity to make Accoya(R) wood and
Tricoya(R) wood elements: high performance wood products that are
extremely durable and stable, opening new opportunities for the
built environment and giving the world a choice to build
sustainably. Accsys transforms fast-growing, certified sustainable
wood into building materials with an up to 50-year warranty,
locking carbon stored in the wood into useful products for decades,
with performance characteristics that match or better those of
non-renewable, resource-depleting and polluting alternatives.
Accsys is listed on the London Stock Exchange AIM market and on
Euronext Amsterdam, under the symbols 'AXS'. Visit
www.accsysplc.com
Accoya(R) solid wood is sustainable, durable, and stable with
exceptional performance, finish and sustainability. Accsys'
proprietary acetylation process makes the wood more dimensionally
stable and because it is no longer easily digestible, extremely
durable. It is one of very few building materials to be Cradle to
Cradle Certified(TM) at the Gold level, with a Platinum rating for
Material Health, confirming that no harmful or toxic additives or
chemicals are present to leach out into the environment. Primary
applications for Accoya(R) wood include windows, doors, cladding
and decking, where the combination of performance and
sustainability benefits compete favorably against hardwoods,
plastics, metals and concrete. Visit www.accoya.com
Tricoya(R) acetylated wood elements are produced for use in the
fabrication of panel products such as medium density fibreboard
(MDF). Panel products made with Tricoya(R) wood elements are truly
durable and stable enough for use outdoors and in wet environments,
unlocking new possibilities for design and construction. They have
been lauded as the first major innovation in the wood composites
industry in more than 30 years and bring the flexibility of
traditional panel products and sustainability benefits of wood to a
whole new range of applications. Visit www.tricoya.com
Any references in this announcement to agreements with Accsys
shall mean agreements with either Accsys or its subsidiary entities
unless otherwise specified. 'Accsys' and 'Accsys Technologies' are
trading names of Titan Wood Limited ("TWL"), a wholly-owned
subsidiary of Accsys Technologies PLC. Accoya (R) , Tricoya (R) and
the Trimarque Device are registered trademarks owned by TWL, and
may not be used or reproduced without written permission from TWL,
or in the case of the Tricoya (R) registered brand trademark, from
Tricoya Technologies Limited, a subsidiary of TWL with exclusive
rights to exploit the Tricoya(R) brand.
Accsys Technologies PLC
Chief executive's statement
Introduction
Accsys has delivered strong revenue growth in the first half of
the 2022 financial year, reflecting the continuing significant
demand for our products while also investing in our manufacturing
and organisational capability to deliver the growth opportunity
ahead of us.
In the period we have made good strategic progress under our
long-term plan to increase production capacity five-fold to 200,000
m(3) per annum in 2025. Work to expand our Arnhem plant capacity by
33% continued, and we successfully completed the equity funding and
made key preparations for our planned JV to build an Accoya(R)
production facility in North America. Despite challenges in the
completion of the Hull Tricoya(R) plant, we have successfully taken
control of the site, and are now directly managing the final
completion ourselves towards commercial operations by July
2022.
This has also been an important period of investing in our
business and people. New colleagues have joined bringing expertise
in functional areas to help lead and deliver our growth ambitions
and we have begun to increase our operating teams ready to operate
our new facilities. In H1 FY22 we have continued to develop our
safety culture and processes and were free of lost-time incidents
in the period.
Despite wider market pressures around raw materials and supply
chains across many industries in this period, Accsys has delivered
a robust performance and delivered further growth in underlying
EBITDA. While we have seen increases in raw material costs, we have
been able to substantially offset this through increased sales
prices. This resilience has been supported by the strength of our
supply contracts and nature of our raw materials with a partial
natural hedge created by the conversion back into acetic anhydride
or sale of valuable acetyl by-product.
Summary of results
The Group has delivered strong revenue and sales volume growth
while remaining capacity constrained at our Arnhem plant. Total
revenue for the 6 months ended 30 September 2021 increased by 31%
to EUR56.2m (H1 FY21: EUR42.9m). Accoya(R) sales volumes of 29,555
cubic metres represent a 12% increase compared to the equivalent
period last year which was impacted by COVID-19. We also grew
revenues through an increase in average selling prices for our
high-performance wood products.
In the period manufacturing margin was 31%, just above our
target 30% level, with good cash generation. Higher average sales
prices were the result of product price increases that took effect
during the period and in H2 FY21, which helped to substantially
offset increased raw material prices and reflect the continuing
strong demand in the market for our products. A change in the mix
of products sold year on year also impacted the percentage margin,
where sales of lower priced Accoya(R) for Tricoya(R) and tolling
(where we process the wood but are not responsible for the raw wood
purchase and as a result are lower priced) were higher in the prior
year due to the supply chain dislocation experienced in the early
stages of the pandemic.
Group underlying EBITDA increased 5% against the prior year to
EUR4.5m, despite higher Group operating costs in the period through
planned investment in Group organisational capabilities and people
with increased headcount to support our future growth. We have
closed the period with a robust balance sheet with EUR2.4m net
cash, with cash of EUR60.9m including the funds raised ready for
investment in our US Accoya(R) JV.
COVID-19
During the first 6 months of the 2022 financial year, we have
not seen the same level of direct impact from COVID-19 on our
revenue and sales as we did in the prior year. However, as with
many businesses, the pandemic continues to affect the business
indirectly. It has also contributed to the additional delay and
challenges in completing construction and bringing production
online at our Hull plant where the EPC lead contractor's agreement
was terminated as previously announced.
We are continuing to operate in a more COVID-safe way to protect
our people and those who we do business with. We continue to manage
some supply chain effects which have impacted industries more
broadly, which we detail later in these reports.
Last year during the 2021 financial year we received some
government support in the Netherlands and the UK for our operations
in the initial stages of the pandemic. At that time, Directors and
other senior staff accepted a 20% reduction in their pre-tax salary
for four months as part of our mitigation measures. Relative to
many other organisations around the world, the effects of the
pandemic on Accsys' financial performance has been limited by
virtue of the strong underlying demand for our products and the
rapid recovery in sales volumes. In H1 FY 22, after the scope of
impacts and resilience became clear, we paid back in full the
government grants received. In May 2021 while the Board and senior
management team retained the 20% salary reduction, we paid back the
salary difference to all employees below the senior-management team
level, reflecting their hard work throughout that challenging
period.
Accoya (R) - Global performance
Six months Six months
Accoya (R) segment ended 30 ended 30 Change
- summary of results September September
2021 2020
Accoya (R) sales volume
- cubic metres 29,555 26,422 12%
----------- ----------- ----------
Underlying Accoya(R)
segmental revenue EUR55.4m EUR41.8m 33%
----------- ----------- ----------
Accoya (R) wood revenue EUR48.5m EUR38.7m 25%
----------- ----------- ----------
Licence income EURnil EUR0.4m -100%
----------- ----------- ----------
Acetic acid sales EUR6.8m EUR2.6m 162%
----------- ----------- ----------
Manufacturing margin
- % 31.0% 33.5% -2.5% pts
----------- ----------- ----------
Underlying EBITDA EUR10.3m EUR9.2m 12%
----------- ----------- ----------
Underlying EBIT EUR8.0m EUR7.0m 14%
----------- ----------- ----------
The Accoya(R) business delivered good growth in volumes in the
first half of FY22, despite remaining at capacity production levels
and with customer demand for our product continuing to exceed
supply. A 12% increase in sales volumes was the combined result of
our ongoing efficiency programme to improve productivity, lower
production volumes in the prior year in Q1 due to the initial
stronger effects of the COVID-19 pandemic, and the deferral of our
scheduled maintenance stop at Arnhem into the second half of FY22
to coincide with planned tie-ins for the fourth reactor
project.
Accoya(R) revenue growth of 33% reflects these same factors
driving the sales volume growth, and further supported by increased
average sales prices in the period. These price increases reflect
both the continuing strong demand from customers and higher raw
material and logistics costs in our supply chain in the period.
Price rises were implemented in the last financial year for all
customers and have continued to benefit the first half of the 2022
financial year. In addition, we have put through further price
increases in the period in June 2021 and September 2021. Average
prices were also higher than the prior year period due to changes
to the product mix, which included a lower proportion of material
sold to Tricoya(R) customers and lower tolling sales.
Overall, we have continued to see strong underlying demand for
Accoya(R) across our regions and with our Tricoya(R) panel
manufacturing partners.
Our H1 FY22 regional sales trend on a period-on-period basis,
primarily reflects the impact of the early stages of the pandemic
on prior year sales in our different regions in H1 FY21. The strong
growth in H1 FY22 sales to the UK & Ireland compares against
the significant negative decline in H1 FY21 sales volume to UK
& Ireland which was more acutely impacted by supply chain
dislocation in the early stages of the pandemic. By comparison H1
FY21 sales volumes were stronger in Europe as we redirected volume
around the UK disruption, and in this period's results this appears
as a negative movement in Rest of Europe. Excluding the one-off
nature of COVID-19 comparative impacts from the 2021 financial
year, over-all we believe that the regional demand and sales
volumes flow in our geographic markets is steady period-on-period.
The exception to this is the Americas, where we are actively
increasing our allocation of product volumes available to customers
as we develop this market ahead of our planned US capacity
expansion.
Sales volume by H1 FY22 H1 FY21 Increase
end-market
m3 m3 %
UK & Ireland 8,373 5,878 42%
Rest of Europe 5,780 7,102 (19%)
Tricoya(R) 7,092 7,275 (3%)
Americas 3,909 2,231 75%
Benelux 2,091 2,461 (15%)
Asia-Pacific 2,010 1,316 53%
RoW 300 159 89%
29,555 26,422 12%
============================= ============================= =========
Accoya (R) manufacturing gross margin was 31.0% (H1 FY21:
33.5%). Whilst this is 2.5% lower than the prior year, it remains
above our target range of 30% or higher. While the higher average
selling price in the period more than offset the effect from the
higher raw material costs, the margin also reflects a shift in the
mix of types of products sold within Accoya (R) against the prior
year period as explained above. In H1 FY21 we increased sales of
material for Tricoya (R) and of tolling sales due to the initial
supply chain disruption impacting certain geographies at the time
from COVID-19 effects. In H1 FY22 these sales reverted to a normal
level.
Accoya (R) strategic progress
In the period we made good progress in projects to expand our
Accoya (R) production capacity and business development projects in
the Netherlands, the USA, and the UK. Work continued to expand the
capacity of our existing Accoya(R) plant in Arnhem by adding a
fourth reactor, through which we expect to increase the site
capacity by 33% to an annual production capacity of 80,000 cubic
metres. Having 'broken ground' for the construction in February
2021, we received the new reactor on site in May 2021. The civil
works have now been completed and the main steel structure is
erected, with equipment and piping in the process of being
installed.
The broader expansion project also includes increased chemical
storage and an upgrade of our wood handling equipment, which will
benefit the entire Arnhem plant. The expansion remains on track to
be complete by around the end of Q1 calendar year 2022.
North America represents the largest potential regional market
for our product, with an achievable market for Accoya(R) there of
up to 948,500 cubic metres per annum within a wider addressable
market of up to approximately 9.6 million cubic metres. North
America is a market that Accoya(R) is already sold into, but in
which we are also significantly constrained by the volume of
product we can produce from our Arnhem facility. We have strong
foundations for growth in the region with a number of key
distributor customers in place and have rolled out our Approved
Manufacturers Programme for our distributors' customers, which has
been highly successful in Europe.
Under the joint venture with Eastman Chemical Company (NYSE:
EMN), a world leader in the production of acetyls, we are planning
to construct an Accoya(R) plant in USA with an initial
approximately 40,000 cubic metres capacity at Eastman's Kingsport,
Tennessee site, and replicate our existing Accoya(R) technology at
Arnhem. Under the JV, Accsys holds a 60% interest and Eastman a 40%
interest.
In the first half of the 2022 financial year, we have completed
a number of workstreams in the planning for the plant. The detailed
front-end engineering design ('FEED') of the plant has been
completed. The initial plant designs will target a two-reactor
40,000 cubic metres capacity plant, while the plans and site also
allow for further efficient expansion (subject to market
conditions) of up to eight reactors in total. Key commercial
agreements between the JV parties in relation to operational
support and supply agreements, for example in relation to raw
materials supply, support services, land and utilities have been
well advanced and are expected to be entered into on completion of
the financing work stream.
The project will be funded through a combination of equity
contributions from the JV partners, and project debt finance. In
May 2021, Accsys successfully completed the issuance of new shares
to fund Accsys' equity share of the project, through a placing and
open offer. Further details on this can be found in the Financial
Review. The workstream to complete the project debt finance is
continuing and we expect to finalise terms in the coming months in
line with our anticipated returns.
We expect that the plant will take approximately two years to
construct from the point of the final investment decision.
Following construction, sales are expected to ramp up over a
further two years to the plant's full production capacity. The
planning to date confirms the strong financial returns from the
plant itself, with a leveraged pre-tax IRR of over 20% targeted. In
addition, Accsys will licence its technology to the Accoya(R) USA
JV, with sales and marketing support also expected to be provided
by Accsys under a separate fee bearing agreement with the Accoya(R)
USA JV.
Accoya(R) Color combines the benefits of Accoya(R) wood with
colour all the way through the wood from surface to core, achieved
through a patented process. Since launching Accoya(R) Color in the
DACH region (Germany, Austria, and Switzerland) in Europe last
year, we have seen very strong demand from our customers, with a
present focus on the decking product category.
On 29 July 2021 we announced plans to expand our ability to
produce Accoya(R) Color, through the acquisition of assets of the
former Lignia Wood Company business in Wales, UK for consideration
of EUR1.2m. Through the acquisition, which included equipment, raw
wood inventory, and technology at the 50,000 square foot (4,650
square metre) manufacturing plant in Barry, Wales, Accsys has
increased its ability to convert Accoya(R) wood into its new
Accoya(R) Color product. The integration of the acquisition is
progressing well, we successfully repurposed the site for Accoya(R)
Color production and produced our first batch of Accoya(R) Color at
the site in the period.
The purchased assets will allow us to accelerate our plans to
grow Accoya(R) Color both in its current markets and into more
geographic markets and for more product applications as part of our
ongoing global growth strategy. Once integrated, the site will be
expected to be able to produce up to 12,500 cubic metres of
Accoya(R) Color per annum with expansion in future being possible.
We therefore expect increased Accoya(R) Color sales in the medium
term with its unique proposition proving attractive to customers in
our target markets. This will be supported by increased sales and
marketing activity overall to drive end consumer awareness and
demand.
Tricoya (R)
Strategic progress
Accsys and its consortium partners in Tricoya UK Limited ('TUK')
are building the world's first Tricoya (R) plant at Hull. During
the period and despite ongoing challenges in progressing the plant,
further progress has been made towards its completion. The plant,
which is in its final stages of construction, is due to become
operational by July 2022.
In April 2021 we updated our guidance and at that time we
expected a three-to-six month delay to the lead contractor's
schedule in completing the construction. Subsequently in early June
2021, we received a notice from the lead contractor responsible for
the delivery of the plant, purporting to terminate the engineering,
procurement, and construction ('EPC') agreement for the project by
reason of force majeure arising out of the COVID-19 pandemic. In
June 2021 Accsys took over the project to complete the final stages
of plant construction and conducted an extensive gap analysis to
review and validate the remaining works, costs, timeline, and
people required to complete the project.
On 23 August 2021 we provided an updated outlook for the
completion of the project. This included an updated timeline where
the plant is now anticipated to be commercially operational by July
2022. The remaining final stages of the works are being directly
project managed by TUK with experienced internal and recently-added
people and resources, without requiring the appointment of another
lead EPC contractor. Third-party expertise and support are being
brought in as and when required to complete works safely and
quickly. Since 23 August various workstreams have safely
re-commenced on the site with a significant increase in our own
project team, improvements to project governance, and the
engagement and remobilisation of key mechanical, electrical, and
civil contractors.
We also announced in August 2021 that TUK and the former lead
EPC contractor had entered into a settlement agreement where the
parties settled and released each other from liability for claims
against each other under the EPC contract, including any claims in
respect of COVID-19 and outstanding contractual payments.
At that time we also reported that the total project capital
cost is expected to be an additional EUR9m to EUR15m more than
previously anticipated. The additional costs are largely due to the
extended project duration, including the previously reported
engineering changes, delays due to COVID-19, and time and recovery
actions resulting from past management of, and demobilisation from,
the site. The costs also reflect the settlement agreement with the
former lead contractor. As a result, the total cumulative project
capital cost for the plant is anticipated to be EUR90m to
EUR96m.
In the process of taking over control of the site and
establishing the remaining works required for completion, TUK has
used third party experts to review the overall integrity of the
plant. These reports have not indicated any material issues with
the plant.
Recently on 8 November, after the end of the reported period,
Accsys agreed funding arrangements with our TUK consortium partners
relating to the anticipated costs to complete the plant. Accsys has
entered into a new loan
agreement with TUK under which Accsys will lend up to EUR17m to
TUK to be used towards the Hull plant construction project
alongside existing funding in place for TUK. The supply and offtake
agreements with TUK partners Medite (sale and purchase of
Tricoya(R) wood elements) and INEOS (acetic anhydride supply) have
also been updated and reflect the partners' ongoing commitment to
the project.
Recently in November we successfully ran our first batch of wood
chips through the first stage of the front of plant, as we begin to
test and commission parts of the plant once they are completed. The
introduction of wood chips is the first time that we have run the
equipment in this zone of the plant in combination with our raw
material wood chips, and we are looking forward to bringing more
zones into commissioning as we work through the remaining works to
completion.
Our planning for the plant continues to allow for the ramp-up of
production to full capacity over approximately three years
following start-up. This reflects that this is the first plant of
its type and that various modifications and operating improvements
may be identified once the plant is initially operational. Once at
capacity, we continue to expect that a gross margin of
approximately 40% should be achievable. Accsys remains committed to
the safe completion and operation of the plant to realise the
potential of the Tricoya(R) product with a large market
opportunity, and ongoing high demand.
Once the Hull plant is operational, we plan to expand Tricoya(R)
production in Malaysia. We have an on-going feasibility study with
PETRONAS Chemicals Group Berhad for the construction of a
Tricoya(R) plant in Malaysia. The full decision to progress with
the plant will only follow after the Hull Tricoya(R) plant has been
operational for a sufficient period to ensure that any engineering
learnings can be factored into the Malaysian plant design.
Group Strategic Development
Technology & IP
Accsys continues to invest in growing, researching, developing
and protecting its valuable portfolio of intellectual property and
confidential information. Our technology covers not only the
physical equipment and engineering that underpins our manufacturing
and production, but also the processes and methodology we follow in
our entire supply and production chain, from the way we prepare our
wood to the way we market and sell Accoya(R) and Tricoya(R) in the
market.
We continue to carry out research and development projects on
all aspects of our technology, including our process technology
where we continually aim for the best efficiency and best quality
for our products and production.
We have reviewed and implemented new improved procedures seeking
to safeguard as much as possible our proprietary information and
are working with teams across the Group to ensure better
understanding of, and training on, our confidentiality protocols.
In addition, enhanced procedures have been incorporated into our
project management process to capture protectable technology as
early as possible.
Accsys' patent portfolio totals 399 patent family members,
covering 27 distinct inventions in 45 countries with over 60% of
the patent family members now granted. The core technologies
associated with our current and future plants for the production of
Accoya(R) and Tricoya(R) wood products continue to be protected by
using a combination of patenting and trade secrets to maintain our
differentiation in the marketplace.
Our principal trademark portfolio covers our brands Accoya(R) ,
Tricoya(R) , the Trimarque device and Accsys(R) , protected by
registrations in over 60 countries, with continued activity focused
on increasing the strength of those brands.
Accsys continues to maintain an active watch on the commercial
and IP activity of third parties to ensure its IP rights are not
infringed, and to identify any IP which could potentially hinder
our commercial activity.
Building organisational capability
In the period we have made good progress in developing our
people and organisational capabilities to manage our growth, with
Accsys' average headcount increasing from 190 to 241 people . Key
hires in place include new heads of departments hired last year,
whom now are developing platforms for supporting our growth and
ensuring that the Group can expand effectively including into new
locations. The areas in which we have added these senior leaders
include HSE, Technology, Engineering, IT, and Acetyls
management.
We have also increased our headcount through the recruitment of
new operating roles for our teams who will operate our expanded
capacity at Arnhem and new capacity at Hull as these become
operational and expanded our project management team at Hull in the
period to oversee the project construction as previously
mentioned.
In addition, we are increasing our focus on training and
development and have established leadership training programmes and
talent mapping, which is an ongoing but important process to ensure
we have the right skills and talent in place and a pipeline to
maintain this, during our growth journey.
Environment, Social and Governance
Accsys remains committed to growing and operating its business
in a sustainable way. In H1 FY22 we have continued to build on the
foundations we laid in November 2020 when we launched our first
sustainability report and new ESG strategy. In that report we
identified our 10 key material issues and impact areas and created
an ESG framework that aligns with our purpose, values, and
strategy, while also setting out how we contribute to five main UN
Sustainable Development goals, with additional impacts on seven
more.
Since November 2020, we have completed stage one of our
sustainability strategy roadmap. This has included reviewing and
developing our data and assessments, establishing baseline metrics,
and identifying initial actions for improvement in each of our
material issues. We are now working on stage two which is to set
the direction of ESG development we want to make in each of our key
areas.
In H1 FY22 we have made good progress in four key ESG material
issue areas.
Safety
Health & Safety (HSE) remains an absolute priority for the
Group and we are aiming to ensure zero harm in our operations and
increase our monitoring and awareness of our safety policies and
strategy as well as developing a safety-first culture across our
organisation. We are monitoring a number of metrics in FY 22 as we
implement this, which include increased safety observation
reporting, increased safety inspections and audits, increased
safety communication and awareness.
In H1 FY22 we have increased our focus on leading indicator
reporting, for example increasing our rate of safety inspection
tours made by our senior leadership teams on our sites and our
safety observation card (SOC) reporting. SOCs are also an important
tool in embedding a safety-focussed culture by increasing safety
awareness. Each month we also now communicate a HSE scorecard to
all staff, sharing our HSE performance and where we are against our
ambition to achieve zero lost time accidents, zero major injuries
whilst improving our leading HSE performance indicators. In the
2021 financial year we reported three lost time incidents (LTIs), a
lagging safety indicator. In the H1 FY 22 period we have had no
lost time incidents, which is a positive development, and our goal
remains zero LTIs.
Accsys has also established a Board HSE committee to provide
dedicated governance oversight of HSE at a Board level. Accsys
considers that good HSE performance is good for business and with
the continued support of our people we aim to continue to develop
our safety practices and zero-harm commitment.
Energy & Climate change
We are in the process of developing our specific Energy &
Climate change policy. This has included both developing the way
that we assess the impact of our operations on the environment,
which will lead to a robust approach and policy to reduce our
impacts.
Our approach to Energy & Climate includes a focus on energy
efficiency and process optimisation, assessing the carbon impact of
our products and integrated climate considerations and activities
(e.g. risks and opportunities) across multi-functions across the
business.
Society and Communities
In the period we have begun to implement our new Society and
Communities strategy, under which we have developed a more
structured approach to social and environmental impact through
tools such as charitable giving and employee engagement. We began
working with our official charity partners and to engage our
employees in our chosen charities' missions.
In September we completed a charitable employee initiative
called 'Step out, to help out!'. This saw colleagues across our
organisation collectively walk over 16,000km over two months in the
summer to promote wellbeing throughout Accsys and in our wider
society. The challenge was set up to boost employee wellbeing
particularly during the pandemic which has affected daily life over
the past year.
Recording their walks online and sharing photos and anecdotes
along the way, the Accsys team walked a distance to cover the
journey between Accsys' global office locations: from Arnhem in the
Netherlands, to Hull in the UK, via our Head Office in London and
on to our North American Sales Office in Dallas, USA - and then
back again. As colleagues
passed each milestone stage of the journey, this also triggered
Accsys to pledge donations to three charities which were chosen due
to their focus on improving wellbeing in Accsys' communities, with
a total of EUR10,000 donated.
Sustainable & Quality products
In the period we achieved a renewal of our Cradle to Cradle
(C2C) gold certification for Accoya(R) , where C2C certified(R) is
the global standard for products that are safe, circular and
responsibly made. Accoya(R) wood is one of the very few building
products to have acquired C2C certification on the stringent Gold
level. C2C assesses the safety, circularity and responsibility of
materials and products across five categories of sustainability
performance, including material health where Accoya(R) achieves a
platinum rating.
Outlook
In summary, we are pleased to report our first half results,
delivering strong growth in both revenue and gross profits. This
continued strong performance demonstrates further progress on our
strategy and the hard work of our employees to deliver for our
customers.
There is continuing high demand for our Accoya(R) and Tricoya(R)
products as customers focus on higher performance materials as well
as on sustainability. It is this demand, which continues to exceed
supply, that has enabled us to substantially offset the wider
market pressures from raw materials costs and supply chain
disruption through price increases.
We are progressing our strategic growth projects to increase
production capacity five-fold by 2025. The construction of a fourth
Accoya(R) reactor in Arnhem is progressing well and our US
Accoya(R) JV with Eastman is approaching final investment decision.
With Accsys now directly project-managing the completion of our
Hull Tricoya(R) facility, we have made good progress towards having
the plant commercially operational by July 2022. Our expansion at
Arnhem and the new Hull plant will together see Accsys double its
present operating production capacity of 60,000 cubic metres to
120,000 cubic metres by July 2022.
Looking ahead we remain confident in delivering on market
expectations. Longer term we believe there will be significant
further demand for Accsys' higher performance, lower maintenance
and more sustainable products as the world focuses on
decarbonisation.
We remain confident in the significant long-term growth
opportunities ahead and in our ability to execute our strategy in
pursuit of sustainable growth.
Rob Harris
Chief Executive
22 November 2021
Accsys Technologies PLC
Financial review
Introduction
Accsys has delivered a good financial performance in the first
half of the 2022 financial year. As our business grows, we are
seeing further growth in profit, while investing in capital
projects that will see us double our production capacity by July
2022. We have also increased our investment in our people and
organisation to be ready to effectively manage this growth as we
shift to have multi-site, global operations.
In the period we have not seen the same level of financial or
trading impact from COVID-19 as we did in the first quarter of
FY21, but we continue to take actions to remain defensive to wider
market conditions which are partial consequences of the
pandemic.
This includes, maintaining a close focus on working capital
management and debtor days, ensuring we remain less impacted by
energy and wood market volatility through good supply contracts and
leveraging our natural hedge from reselling our Acetic Acid
by-product. We are also rebuilding our inventory levels to maintain
a buffer against supply chain and shipping disruptions. Despite
wider market pressures in these areas in H1 FY22, Accsys has
continued to grow revenue, profit, and volumes, whilst remaining at
capacity-levels of production.
In H1 FY22 Accoya(R) sales volumes grew by 12%, with a 31%
increase in Revenue and 20% increase in underlying Gross Profit
which reflects an increase in the average sales price and a
stronger year-on-year performance against a COVID-impacted prior
year period. Group underlying EBITDA increased 5% to EUR4.5m with
planned increased investment in organisational capability and the
recruitment of operational teams ahead of the commercial start-up
of the Accoya(R) Reactor 4 expansion project in Arnhem and the
Tricoya(R) plant in Hull.
The Accoya(R) business continued to perform strongly, with
Accoya(R) underlying EBITDA increasing 12% to EUR10.3m, delivering
Group operating cashflow before working capital changes and
exceptional items of EUR5.0m (H1 FY21: EUR4.8m).
Net debt decreased EUR14.6m in the period to a Net cash position
of EUR2.4m, following the May 2021 equity capital raise with net
proceeds of EUR34.6m partially offset by investment in additional
production capacity in Hull and Arnhem.
Statement of comprehensive income
Group revenue increased by 31% to EUR56.2m for the six months
ended 30 September 2021 (H1 FY21: EUR42.9m).
Accoya(R) sales volumes were 12% higher, with the prior year
period impacted by COVID-19, particularly in the first quarter
(Accoya(R) sales volumes in H1 FY21 were 6% lower than in H1 FY20).
To optimise timing for the Reactor 4 expansion project in Arnhem,
the usual H1 annual maintenance stop has been moved to the second
half of the financial year. An increase in the average sales price
was driven by planned price increases in the period and prior year,
which together with the increase in sales volumes resulted in
revenue from Accoya(R) wood increasing by 25% to EUR48.5m.
Included within Accoya(R) wood revenue, in the Accoya(R)
segment, are sales for the manufacture of Tricoya(R) panels, which
increased to EUR8.5m (H1 FY21: EUR8.3m). These sales represent 24%
of Accoya(R) sales volumes (HY1 FY21: 28%), and are used to develop
the market for Tricoya(R) products ahead of the start-up of the
Tricoya(R) plant.
Tricoya(R) wood revenue of EUR0.9m (H1 FY21: EUR1.1m), in the
Tricoya(R) segment, represented sales of Tricoya(R) panels,
purchased from our Tricoya(R) licensees, to sell into other
geographies in order to provide initial market seeding material for
the global Tricoya(R) market.
Licence revenue of EUR9k was reflected in our Tricoya(R) segment
in the period. In the prior year period, EUR0.4m was reflected in
the Accoya(R) segment, principally attributable to the licence
agreement entered into with Accoya USA LLC, a company formed
together with Eastman Chemical Company (and accounted for as a
joint venture), with the intention to construct and operate an
Accoya(R) wood production plant to serve the North American
market.
Other revenue increased to EUR6.9m (H1 FY21: EUR2.7m) driven by
higher sales prices for the sale of our acetic acid by-product.
Higher input costs were also experienced during the first half,
with Anhydride pricing increasing on H1 FY21 average pricing due to
higher energy commodities pricing in the market. The sale of acetic
acid continued to act as a partial hedge, in the first half, to the
increase in Anhydride pricing, covering over half the financial
effect from the increase in Anhydride pricing. When considered as a
Net Acetyls cost, the net cost increased 26% compared to H1
FY21.
Raw wood input costs were also moderately higher, however
overall our pricing trend on this raw material remains more stable
than the wider lumber market as we purchase appearance-grade wood
under long term supply contracts with many of our partners.
Underlying Gross margin decreased from 33% to 31% compared to
the prior year period, with the Accoya(R) manufacturing gross
margin also decreasing by 2.5% to 31%. The decreases were
principally due to the sales mix in the period, with the effect of
the sales price increases, substantially offsetting the effect from
the higher raw material costs, mentioned above.
Underlying other operating costs excluding depreciation and
amortisation, increased from EUR10.0m to EUR12.6m. This increase
was due to an increase in staff costs with average Group headcount
increasing by 51 to 241 for the current year period and temporary
salary decreases implemented in the prior year period. This
increase in headcount includes the remainder of the Hull operating
team joining towards the end of H2 FY21, an increase in the Arnhem
operating team ahead of the 4th reactor starting up, the Group
investing in its Organisational capability with the hiring of
several heads of department and other related hires in the second
half of FY21, and the addition of 11 former Lignia employees who
joined Accsys following the purchase of assets in Wales, to grow
production of Accoya(R) Color.
Sales and marketing costs (excluding staff costs) also increased
by EUR0.5m compared to the prior year period.
Depreciation and amortisation charges and underlying finance
expenses were largely in line with the prior year.
Exceptional items include EUR0.1m for redundancy payments
related to the purchase of assets to be utilised to manufacture
Accoya(R) Color in Wales. In the prior year period, exceptional
items included COVID-19 related staff support funding from the
Netherlands and UK governments totalling EUR0.6m, which was
reversed in H2 FY21 and repaid earlier this year.
Other adjustments for the period include a foreign exchange gain
of EUR0.2m (H1 FY21: EUR0.5m) on loans held in pounds sterling with
BGF and Volantis and foreign exchange differences on cash held in
pounds sterling, which is used primarily to act as a cash flow
hedge against future sterling project expenditure on the new plant
being constructed in Hull and to a lesser extent, as a cashflow
hedge against future sterling corporate costs. The effective
portions of the cash flow hedges are recognised in other
comprehensive income.
Underlying loss before tax increased EUR0.2m to EUR0.3m. After
taking into account exceptional items and other adjustments, loss
before tax increased by EUR1.2m to EUR0.2m (H1 FY21: profit of
EUR1.0m).
The tax charge of EUR0.6m was in-line with the prior year period
(H1 FY21: EUR0.6m).
Cash flow
Cash flows generated from operating activities before changes in
working capital and exceptional items increased by 4% to EUR5.0m
compared to EUR4.8m in the prior year period reflecting the strong
operational cash flow being generated by the Group.
Inventory levels increased by EUR5.8m during the period from a
lower than optimal level at the start of the year, and are expected
to increase in the second half ahead of the Arnhem Reactor 4 and
Hull Tricoya(R) plant start-up.
In May 2021, Accsys completed a successful Placing and open
offer for an issue of shares in the Company, raising net proceeds
of approximately EUR34.6 million. The net proceeds are to be used
primarily to fund the Group's investment in expanding its Accoya(R)
business into North America through the construction of a new
Accoya(R) USA plant, through its joint venture with Eastman
Chemical Company ('Eastman'), as well as to provide additional
capital to support the Group's continued growth and ongoing
development.
At 30 September 2021, the Group held cash balances of EUR60.9m,
representing a EUR13.3m increase in the period from 31 March 2021.
The cash increase in the period is attributable to the successful
Placing and Open offer and cash flow generated from operating
activities referred to above, partially offset by investments in
tangible fixed assets of EUR17.2m, primarily reflecting the
construction progress made on the Arnhem plant expansion project
(EUR12.1m) and our Tricoya(R) plant construction in Hull (EUR3.7m)
and the increase in inventory referred to above.
In July 2021, Accsys entered into a sale and purchase agreement
with Lignia Wood Company Limited ('Lignia') and its administrators,
to acquire certain assets, equipment and technology for EUR1.2m,
including EUR0.5m for raw wood inventory. The purchased assets will
enable Accsys to grow production and availability of Accoya(R)
Color more rapidly, accelerating the launch of the product into
more geographic markets and for more product applications. The
acquired raw wood will be used for production of Accoya(R) at our
plant in the Netherlands.
Loan repayments and interest payments were EUR3.3m during the
period (H1 FY21: EUR1.9m), with the increase due to prior period
repayments of EUR0.5m relating to the ABN AMRO EUR14m term loan
being deferred to the end of the loan term, as a COVID-19 action
taken by ABN AMRO and the beginning of contractual principal
repayments on the Bruil loan from June 2021.
Financial position
Plant and machinery additions of EUR7.5m (H1 FY21: EUR9.9m) in
the period largely consisted of the construction of the 4th Reactor
expansion project in Arnhem (EUR12.1m), the purchase of certain
assets and equipment to be utilised to grow production of
manufacture Accoya(R) Color in Wales (EUR0.7m), and the Tricoya(R)
plant's net reversal of EUR6m following the reversal of
construction milestone related accruals (EUR11.1m) previously
accounted for, following the settlement agreement entered into
between Tricoya UK and Engie Fabricom UK Limited, Tricoya UK's
former EPC contractor, which is partially offset by further
progress costs on the project. The prior year period primarily
related to construction on the Tricoya(R) plant build in Hull and
initial costs related to the 4th Reactor expansion project in
Arnhem.
Trade and other receivables increased to EUR12.5m (H1 FY21:
EUR10.6m), primarily due to a EUR1.3m increase in VAT
receivables.
Total Inventory increased to EUR18.1m (H1 FY21: EUR15.7m) from a
lower than optimal level at the start of the year. Levels of
Accoya(R) inventory remain low, with the finished goods balance
representing approximately three weeks of sales.
The decrease in trade and other payables to EUR21.8m (H1 FY21:
EUR24.8m) is primarily due to the reversal of accruals associated
with the construction of the Tricoya(R) Hull plant following the
settlement agreement entered into between Tricoya UK and Engie
Fabricom UK Limited, offset by an increase in trade payables,
primarily related to the timing of construction contract related
payments.
Amounts payable under loan agreements decreased to EUR52.8m (H1
FY21: EUR54.5m) in line with contractual principal repayments.
Net debt decreased by EUR14.6m in the period to Net cash of
EUR2.4m (FY21: Net debt of EUR12.2m) due to the successful Placing
and Open offer (net proceeds of EUR34.6m) partially offset by Capex
investments of EUR17.2m.
In October 2021 (post period-end), Accsys completed the
refinance of its Group debt facilities through a new bilateral
agreement with ABN AMRO, one of Accsys' existing relationship
banks. The new EUR60m 3-year bilateral facilities agreement with
ABN AMRO comprises a EUR45m Term Loan Facility and a EUR15m
Revolving Credit Facility ('RCF'). The EUR45m Term Loan has been
(post period-end) fully utilised to repay all of the Group's
existing debt, with the exception of the NatWest facility held by
the Tricoya(R) consortium which remains in place. The new facility
significantly simplifies Accsys' debt structure, which previously
included five different debt providers and commercial partners. The
Term Loan is partially amortising, with 5% of the principal
repayable per annum after 18 months. This, together with the RCF,
will provide Accsys with greater liquidity to support the Group's
growth plans. The applicable interest rate for the Term Loan will
vary between an all-in cost of 1.75% and 3.25% depending on net
leverage, resulting in a significant improvement compared to the
previous facilities which had a weighted average cost of
approximately 6%. The RCF interest rate will similarly vary, but
between 2.0% and 3.5% above EURIBOR. The new facilities are secured
against the assets of the Group which are 100% owned by the Company
and include customary covenants such as net leverage and interest
cover.
Risks and uncertainties
As described on page 37 to 45 of the 2021 Annual report, the
business, financial condition or results of operations of the Group
could be adversely affected by a number of risks. The Group's
systems of control and protection are designed to help manage and
control risks to an appropriate level rather than to eliminate
them.
These specific principal risks and related mitigations (as
described in the 2021 Annual report) as currently identified by
Accsys' risk management process, have not changed significantly
since the publication of the last Annual Report.
These risks relate to the following areas:
Health, Safety & Environment; Hull plant; Supply of Raw
Materials; Sale of Products; Environmental, Social & Governance
(ESG) and Sustainability; Manufacturing; Expansion; IT;
Licensing/Partnering; Finance; Litigation & disputes;
Protection of Intellectual Property & trade secrets; Personnel;
Governance, Compliance & Law; and Investor & Public
relations.
Going concern
These condensed consolidated financial statements are prepared
on a going concern basis, which assumes that the Group will
continue in operational existence for the foreseeable future, and
at least 12 months from the date these financial statements are
approved.
As part of the Group's going concern review, the Directors have
assessed the Group's trading forecasts and working capital
requirements for the foreseeable future under a base scenario
taking into account the Group's financial resources including the
current cash position and banking and finance facilities which are
currently in place, including the refinance of debt facilities
shortly after the balance sheet date (See Notes 12 & 16 for
details of these facilities) and the possible further impact of
COVID-19.
The Directors have also assessed a severe but plausible downside
scenario with reduced sales volumes and lower gross margin. These
forecasts indicate that, in order to continue as a going concern,
the Group is dependent on achieving certain operating performance
measures relating to the production and sales of Accoya(R) wood
from the plant in Arnhem with the collection of on-going working
capital items in line with internally agreed budgets.
The Directors' have also considered the possible amount and
timing of capital expenditure required to complete the further
expansion of the Arnhem Accoya(R) plant and in particular the
Tricoya(R) plant in Hull, noting that should additional funding be
required beyond what has been committed by the Tricoya(R)
consortium partners to date, further consent would be required by
the Tricoya(R) consortium partners for funding to be contributed.
This has been considered together with the intended investment in
the USA, noting that the full forecast project costs have not yet
been committed to. There are a sufficient number of alternative
actions and measures within the control of the Group that can and
would be taken in order to ensure on-going liquidity including
reducing/deferring costs in some discretionary areas as well as
larger capital projects if necessary.
The Directors believe that while some uncertainty always
inherently remains in achieving the budget, in particular in
relation to market conditions outside of the Group's control, under
both the base scenario and severe but plausible downside scenario
(both scenarios include the commitment of funding for the intended
investment in the USA), there is sufficient liquidity and covenant
headroom such that there is no material uncertainty with respect to
going concern.
Therefore the Directors believe that the going concern basis is
the most appropriate on which to prepare the financial
statements.
William Rudge
Finance Director
22 November 2021
Accsys Technologies PLC
Directors responsibility statement
The Directors confirm to the best of their knowledge that:
-- the condensed set of financial statements has been prepared
in accordance with the AIM Rules for Companies and IAS 34 Interim
Financial Reporting as endorsed by the European Union and as
adopted for use in the United Kingdom and give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Group and its subsidiaries;
-- the interim management report for the six months ended 30
September 2021 gives a fair review of the information required
pursuant to section 5:25d, subsections 8 and 9 of the Dutch
Financial Markets Supervision Act.
By order of the Board
Angus Dodwell
Company Secretary
22 November 2021
Accsys Technologies PLC
Condensed consolidated statement of comprehensive income for the
six months ended 30 September 2021
Note Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
6 months 6 months 6 months 6 months 6 months 6 months Year Year Year
ended ended ended ended ended ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March 31 March
2021 2021 2021 2020 2020 2020 2021 2021 2021
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Underlying Exceptional Total Underlying Exceptional Total Underlying Exceptional Total
items items items
& other & other & other
adjustments* adjustments* adjustments*
Accoya(R) wood
revenue 48,465 - 48,465 38,676 - 38,676 91,095 - 91,095
Tricoya(R)
panel revenue 860 - 860 1,110 - 1,110 2,091 - 2,091
Licence revenue 9 - 9 402 - 402 419 - 419
Other revenue 6,901 - 6,901 2,745 - 2,745 6,198 - 6,198
----------------- ----- ----------- ------------- ---------- ----------- ------------- ---------- ----------- ------------- ----------
Total revenue 2 56,235 - 56,235 42,933 - 42,933 99,803 - 99,803
Cost of sales (39,032) - (39,032) (28,609) 230 (28,379) (66,714) - (66,714)
Gross profit 17,203 - 17,203 14,324 230 14,554 33,089 - 33,089
Other operating
costs 3 (15,655) (151) (15,806) (12,769) 347 (12,422) (28,559) 103 (28,456)
Operating
profit/(loss) 1,548 (151) 1,397 1,555 577 2,132 4,530 103 4,633
Finance income - - - 1 - 1 1 - 1
Finance expense (1,722) 231 (1,491) (1,657) 485 (1,172) (3,250) (900) (4,150)
Share of net
loss of joint
ventures
accounted
for using the
equity method 14 (91) - (91) - - - (144) - (144)
Profit/(loss)
before taxation (265) 80 (185) (101) 1,062 961 1,137 (797) 340
Tax expense 5 (622) - (622) (587) - (587) (1,251) - (1,251)
Profit/(loss)
for the period (887) 80 (807) (688) 1,062 374 (114) (797) (911)
----------- ------------- ---------- ----------- ------------- ---------- ----------- ------------- ----------
Items that may
be reclassified
to profit or loss
Gain/(loss)
arising on
translation
of foreign
operations 213 - 213 (153) - (153) 5 - 5
Gain/(loss)
arising on
foreign
currency
cash flow
hedges - 579 579 - (428) (428) - 192 192
Total other
comprehensive
income/(loss) 213 579 792 (153) (428) (581) 5 192 197
Total
comprehensive
(loss)/gain
for the period (674) 659 (15) (841) 634 (207) (109) (605) (714)
=========== ============= ========== =========== ============= ========== =========== ============= ==========
Total
comprehensive
loss for the
year is
attributable
to:
Owners of Accsys
Technologies
PLC 219 692 911 (266) 763 497 1,279 (605) 674
Non-controlling
interests (893) (33) (926) (575) (129) (704) (1,388) - (1,388)
Total
comprehensive
(loss)/gain
for the period (674) 659 (15) (841) 634 (207) (109) (605) (714)
=========== ============= ========== =========== ============= ========== =========== ============= ==========
Basic and
diluted
profit/(loss)
per ordinary
share 6 EUR0.00 EUR0.00 EUR(0.00) EUR0.01 EUR0.01 EUR0.00
The notes set out on pages 20 to 39 form an integral part of
these condensed financial statements.
* See note 4 for details of exceptional items and other
adjustments.
Accsys Technologies PLC
Condensed consolidated s tatement of financial position at 30
September 2021
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
Note 2021 2020 2021
EUR'000 EUR'000 EUR'000
Non-current assets
Intangible assets 8 10,962 10,882 10,865
Investment accounted for
using the equity method 14 1,421 470 326
Property, plant and equipment 9 145,206 130,273 139,557
Right of use assets 5,120 4,273 4,859
Financial asset at fair
value through profit or
loss - - -
162,709 145,898 155,607
----------- ----------- -----------
Current assets
Inventories 18,105 15,678 12,262
Trade and other receivables 12,540 10,560 12,314
Cash and cash equivalents 60,921 42,967 47,598
Corporation tax receivable 153 252 183
Derivative financial instrument 106 - 134
91,825 69,457 72,491
----------- ----------- -----------
Current liabilities
Trade and other payables (21,767) (24,803) (29,810)
Obligation under lease liabilities (1,108) (857) (948)
Short term borrowings 12 (16,269) (6,201) (9,664)
Corporation tax payable (2,514) (1,271) (1,863)
Derivative financial instrument - (129) -
(41,658) (33,261) (42,285)
----------- ----------- -----------
Net current assets 50,167 36,196 30,206
Non-current liabilities
Obligation under lease liabilities (4,630) (3,913) (4,584)
Other long term borrowing 12 (36,535) (48,298) (44,626)
(41,165) (52,211) (49,210)
----------- ----------- -----------
Total net assets 171,711 129,883 136,603
Equity
Share capital 10 9,619 8,213 8,466
Share premium account 223,035 186,383 189,598
Other reserves 11 115,214 112,928 114,635
Accumulated loss (212,642) (212,969) (213,263)
Own shares (5) (36) (36)
Foreign currency translation
reserve 250 (121) 37
Capital value attributable
to owners of Accsys Technologies
PLC 135,471 94,398 99,437
Non-controlling interest
in subsidiaries 36,240 35,485 37,166
Total equity 171,711 129,883 136,603
The notes set out on pages 20 to 39 form an integral part of
these condensed financial statements.
Accsys Technologies PLC
Condensed consolidated statement of changes in equity for the
six months ended 30 September 2021
Total
equity
Foreign attributable
currency to equity
Share trans- shareholders
capital Share Other Own lation Accumulated of the Non-Controlling Total
Ordinary premium reserves Shares reserve loss company interests Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at
31 March 2020 8,114 186,390 112,551 - 32 (214,394) 92,693 34,442 127,135
========= ======== ========= ======== ========= ============ ============== ================= ========
Total
comprehensive
(expense)/gain
for the period - - (428) - (153) 1,078 497 (704) (207)
Share based
payments - - - - - 410 410 - 410
Shares issued 99 - - (36) - (63) - - -
Premium on - - - - - - - - -
shares
issued
Share issue
costs - (7) - - - - (7) - (7)
Issue of
subsidiary
shares to
non-controlling
interests - - 805 - - - 805 1,747 2,552
Balance at
30 Sept 2020
(unaudited) 8,213 186,383 112,928 (36) (121) (212,969) 94,398 35,485 129,883
========= ======== ========= ======== ========= ============ ============== ================= ========
Total
comprehensive
(expense)/gain
for the period - - 620 - 158 (601) 177 (684) (507)
Share based
payments - - - - - 307 307 - 307
Shares issued 253 - - - - - 253 - 253
Premium on shares
issued - 3,215 - - - - 3,215 - 3,215
Share issue - - - - - - - - -
costs
Issue of
subsidiary
shares to
non-controlling
interests - - 1,087 - - - 1,087 2,365 3,452
Balance at
31 March 2021 8,466 189,598 114,635 (36) 37 (213,263) 99,437 37,166 136,603
========= ======== ========= ======== ========= ============ ============== ================= ========
Total
comprehensive
(expense)/gain
for the period - - 579 - 213 119 911 (926) (15)
Share based
payments - - - - - 533 533 - 533
Shares issued 1,153 - - 31 - (31) 1,153 - 1,153
Premium on shares
issued - 35,531 - - - - 35,531 - 35,531
Share issue
costs - (2,094) - - - - (2,094) - (2,094)
Issue of - - - - - - - - -
subsidiary
shares to
non-controlling
interests
Balance at
30 Sept 2021
(unaudited) 9,619 223,035 115,214 (5) 250 (212,642) 135,471 36,240 171,711
========= ======== ========= ======== ========= ============ ============== ================= ========
Share capital is the amount subscribed for shares at nominal
value (note 10).
Share premium account represents the excess of the amount
subscribed for share capital over the nominal value of these
shares, net of share issue expenses. Share issue expenses comprise
the costs in respect of the issue by the Company of new shares.
See note 11 for details concerning other reserves.
Non-controlling interests relates to the investment of various
parties into Tricoya Technologies Limited and Tricoya UK Limited
(note 7).
Foreign currency translation reserve arises on the
re-translation of the Group's USA subsidiary's net assets which are
denominated in a different functional currency, being US
dollars.
Accumulated losses represent the cumulative loss of the Group
attributable to the owners of the parent.
The notes set out on pages 20 to 39 form an integral part of
these condensed financial statements.
Accsys Technologies PLC
Condensed consolidated statement of cash flow for the six months
ended 30 September 2021
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
(Loss)/profit before taxation before exceptional
items and other adjustments (265) (101) 1,137
Adjustments for:
Amortisation of intangible assets 366 393 803
Depreciation of property, plant and equipment
and right of use assets 2,643 2,372 4,934
Net finance expense 1,722 1,656 3,352
Equity-settled share-based payment expenses 533 410 717
Accsys portion of Licence fee received from joint
venture - - 600
Share of net loss of joint venture 91 - 144
Currency translation (loss)/gain (93) 60 110
Cash inflows from operating activities before
changes in working capital and exceptional items 4,997 4,790 11,797
Exceptional Items in operating activities (see
note 4) (133) 595 -
Cash inflows from operating activities before
changes in working capital 4,864 5,385 11,797
========== ========== ==========
Decrease/(increase) in trade and other receivables 255 2,154 (159)
(Decrease) in deferred income - - (42)
(Increase)/decrease in inventories (5,843) 1,254 4,670
Increase in trade and other payables 1,186 809 3,864
Net cash from operating activities before tax 462 9,602 20,130
Tax received 59 76 71
Net cash from operating activities 521 9,678 20,201
========== ========== ==========
Cash flows from investing activities
Interest received - 2 5
Investment in property, plant and equipment (17,196) (3,700) (11,674)
Foreign exchange deal settlement related to hedging
of Hull capex - (392) (258)
Investment in intangible assets (463) (289) (682)
Investment in joint venture (1,186) - (1,070)
Net cash used in investing activities (18,845) (4,379) (13,679)
========== ========== ==========
Cash flows from financing activities
Other finance costs (36) (32) (80)
Proceeds from trade facility draw down - 827 -
Interest Paid (1,251) (1,058) (1,831)
Repayment of lease liabilities (504) (443) (1,308)
Repayment of loans/rolled up interest (2,097) (888) (2,474)
Proceeds from issue of share capital 36,684 - 3,468
Proceeds from issue of subsidiary shares to non-controlling
interests - 2,552 6,004
Share issue costs (2,094) (7) (7)
Net cash from financing activities 30,702 951 3,772
========== ========== ==========
Net increase in cash and cash equivalents 12,378 6,250 10,294
Effect of exchange gain/(loss) on cash and cash
equivalents 945 (521) 66
Opening cash and cash equivalents 47,598 37,238 37,238
Closing cash and cash equivalents 60,921 42,967 47,598
========== ========== ==========
The notes set out on pages 20 to 39 form an integral part of
these interim financial statements.
Accsys Technologies PLC
Notes to the financial statements for the six months ended 30
September 2021
1. Accounting policies
General Information
The principal activity of the Group is the production and sale
of Accoya(R) solid wood and exploitation of technology for the
production and sale of Accoya(R) wood and Tricoya(R) wood chips.
Manufactured through the Group's proprietary acetylation processes,
these products exhibit superior dimensional stability and
durability compared with alternative natural, treated and modified
woods as well as more resource intensive man-made materials.
The Company is a public limited company, which is listed on AIM
in the United Kingdom and Euronext in the Netherlands, and is
domiciled in the United Kingdom. The registered office is
Brettenham House, 19 Lancaster Place, London, WC2E 7EN.
The condensed consolidated financial statements were approved on
22 November 2021. These condensed consolidated financial statements
have been reviewed, not audited.
Basis of accounting
The Group's condensed consolidated financial statements in these
interim results have been prepared in accordance with IFRS issued
by the International Accounting Standards Board as endorsed by the
European Union and as adopted for use in the United Kingdom, in
particular International Accounting Standard (IAS) 34 "interim
financial reporting" and the AIM Rules for Companies and the Dutch
Financial Markets Supervision Act.
On 31 December 2020, IFRS as adopted by the European Union at
that date, was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted International Accounting Standards in
its consolidated financial statements on 1 April 2021. This change
constitutes a change in accounting framework. However, there is no
impact on recognition, measurement or disclosure in the period
reported as a result of the change in framework.
The financial information for the six months ended 30 September
2021 and the six months ended 30 September 2020 is unaudited. The
comparative financial information for the full year ended 31 March
2021 does not constitute the Group's statutory financial statements
for that period although it has been derived from the statutory
financial statements for the year then ended. A copy of those
statutory financial statements has been delivered to the Registrar
of Companies and which were approved by the Board of Directors on
21 June 2021. The auditors' report on those accounts was
unqualified and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006. This financial information is to be read
in conjunction with the annual report for the year ended 31 March
2021, which has been prepared in accordance with both International
Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union.
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements
for the year ended 31 March 2021.
Accounting policies
No new accounting standards, amendments or interpretations have
been adopted in the period which have any impact on these condensed
financial statements, or are expected to affect the Group's 2022
Annual Report. The accounting policies applied for preparation of
condensed consolidated financial statements are consistent with
those of the annual financial statements for the year ended 31
March 2021, as described in those financial statements.
Going concern
These condensed consolidated financial statements are prepared
on a going concern basis, which assumes that the Group will
continue in operational existence for the foreseeable future, and
at least 12 months from the date these financial statements are
approved.
As part of the Group's going concern review, the Directors have
assessed the Group's trading forecasts and working capital
requirements for the foreseeable future under a base scenario
taking into account the Group's financial resources including the
current cash position and banking and finance facilities which are
currently in place, including the refinance of debt facilities
shortly after the balance sheet date (See Notes 12 & 16 for
details of these facilities) and the possible further impact of
COVID-19.
The Directors have also assessed a severe but plausible downside
scenario with reduced sales volumes and lower gross margin. These
forecasts indicate that, in order to continue as a going concern,
the Group is dependent on achieving certain operating performance
measures relating to the production and sales of Accoya(R) wood
from the plant in Arnhem with the collection of on-going working
capital items in line with internally agreed budgets.
The Directors' have also considered the possible amount and
timing of capital expenditure required to complete the further
expansion of the Arnhem Accoya(R) plant and in particular the
Tricoya(R) plant in Hull, noting that should additional funding be
required beyond what has been committed by the Tricoya(R)
consortium partners to date, further consent would be required by
the Tricoya(R) consortium partners for funding to be contributed.
This has been considered together with the intended investment in
the USA, noting that the full forecast project costs have not yet
been committed to. There are a sufficient number of alternative
actions and measures within the control of the Group that can and
would be taken in order to ensure on-going liquidity including
reducing/deferring costs in some discretionary areas as well as
larger capital projects if necessary.
The Directors believe that while some uncertainty always
inherently remains in achieving the budget, in particular in
relation to market conditions outside of the Group's control, under
both the base scenario and severe but plausible downside scenario
(both scenarios include the commitment of funding for the intended
investment in the USA), there is sufficient liquidity and covenant
headroom such that there is no material uncertainty with respect to
going concern.
Therefore the Directors believe that the going concern basis is
the most appropriate on which to prepare the financial
statements.
2. Segmental reporting
The Group's business is the manufacturing of and development,
commercialisation and licensing of the associated proprietary
technology for the manufacture of Accoya(R) wood, Tricoya(R) wood
chips and related acetylation technologies. Segmental reporting is
divided between corporate activities, activities directly
attributable to Accoya (R) , to Tricoya (R) or research and
development activities. The Group's operating segments are reported
in a manner consistent with the internal reporting provided to the
executive committee, the chief operating decision-making body.
Accoya (R)
Accoya(R) Segment
---------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2021 2021 2021
2021 2021 2021 2020 2020 2020
Underlying Exceptional TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items
items items & Other
& Other & Other Adjustments
Adjustments Adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Accoya(R)
wood
revenue 48,465 - 48,465 38,676 - 38,676 91,095 - 91,095
Licence
revenue - - - 400 - 400 400 - 400
Other revenue 6,895 6,895 2,739 2,739 6,142 - 6,142
Total Revenue 55,360 - 55,360 41,815 - 41,815 97,637 - 97,637
Cost of sales (38,184) - (38,184) (27,550) 230 (27,320) (64,713) - (64,713)
Gross profit 17,176 - 17,176 14,265 230 14,495 32,924 - 32,924
Other
operating
costs (9,097) (133) (9,230) (7,233) 249 (6,983) (15,725) - (15,725)
Profit from
operations 8,079 (133) 7,946 7,032 479 7,512 17,199 - 17,199
Profit from
operations 8,079 (133) 7,946 7,032 479 7,512 17,199 - 17,199
Share of
Accoya(R)
USA EBITDA (91) - - - - - (144) - -
EBIT 7,988 (133) 7,946 7,032 479 7,512 17,055 - 17,199
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
Depreciation
and
amortisation 2,297 - 2,297 2,132 - 2,132 4,371 - 4,371
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
EBITDA 10,285 (133) 10,243 9,164 479 9,644 21,426 - 21,570
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
Revenue includes the sale of Accoya(R) , licence income and
other revenue, principally relating to the sale of acetic acid and
other licensing related income.
All costs of sales are allocated against manufacturing
activities in Arnhem and in Barry (Wales) unless they can be
directly attributable to a licensee. Other operating costs include
depreciation of the Arnhem and Barry property, plant and equipment
together with all other costs associated with the operation of the
Arnhem and Barry manufacturing site, including directly
attributable administration, sales and marketing costs.
See note 4 for explanation of Exceptional Items and other
adjustments.
Average headcount = 159 (H1 FY21: 138)
The below table shows details of reconciling items to show both
Accoya (R) EBITDA and Accoya (R) Manufacturing gross profit, both
including and excluding licence and licensing related income, which
has been presented given the inclusion of items which can be more
variable or one-off.
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Accoya(R) segmental underlying EBITDA 10,285 9,164 21,426
-------------- -------------- ----------
Accoya(R) underlying Licence Income - (400) (400)
Accoya(R) segmental manufacturing
EBITDA (excluding licence income) 10,285 8,764 21,026
============== ============== ==========
Accoya(R) segmental gross profit 17,176 14,265 32,924
-------------- -------------- ----------
Accoya(R) Licence Income - (400) (400)
Accoya(R) Manufacturing gross profit 17,176 13,865 32,524
============== ============== ==========
Gross Accoya(R) Manufacturing Margin 31.0% 33.5% 33.4%
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2021 2020 2021
EUR EUR EUR
Accoya(R) Manufacturing gross profit
- EUR'000 17,176 13,865 32,524
Accoya(R) sales volume - m(3) 29,555 26,422 60,466
Accoya(R) manufacturing gross profit
per m(3) 581 525 538
============== ============== ==========
Tricoya(R)
Tricoya(R) Segment
--------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12
ended ended ended ended ended ended ended ended months
30 30 30 30 30 30 31 March 31 March ended
September September September September September September 2021 2021 31 March
2021 2021 2021 2020 2020 2020 2021
Underlying Exceptional
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items TOTAL
items items & Other
& Other & Other Adjustments
Adjustments Adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Tricoya(R)
panel
revenue 860 - 860 1,110 - 1,110 2,091 - 2,091
Licence
revenue 9 - 9 2 - 2 19 - 19
Other revenue 6 - 6 6 - 6 56 - 56
Total Revenue 875 - 875 1,118 - 1,118 2,166 - 2,166
Cost of sales (848) - (848) (1,059) - (1,059) (2,001) - (2,001)
Gross profit 27 - 27 59 - 59 165 - 165
Other
operating
costs (2,028) (18) (2,046) (1,490) 72 (1,418) (3,668) 103 (3,565)
Loss from
operations (2,001) (18) (2,019) (1,431) 72 (1,359) (3,503) 103 (3,400)
Loss from
operations (2,001) (18) (2,019) (1,431) 72 (1,359) (3,503) 103 (3,400)
Depreciation
and
amortisation 262 - 262 247 - 247 563 - 563
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ---------
EBITDA (1,739) (18) (1,757) (1,184) 72 (1,112) (2,940) 103 (2,837)
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ---------
Revenue and costs are those attributable to the business
development of the Tricoya(R) process and establishment of
Tricoya(R) Hull Plant.
See note 4 for explanation of Exceptional Items and other
adjustments.
Average headcount = 36 (H1 FY21: 18), noting a substantial
proportion of the costs to date have been incurred via recharges
from other parts of the Group or have resulted from
contractors.
Corporate
Corporate Segment
-------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2021 2021 2021
2021 2021 2021 2020 2020 2020
Underlying Exceptional TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items
items items & Other
& Other & Other Adjustments
Adjustments Adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross result - - - - - - - - -
Other
operating
costs (3,908) - (3,908) (3,548) 16 (3,532) (8,048) - (8,048)
Loss from
operations (3,908) - (3,908) (3,548) 16 (3,532) (8,048) - (8,048)
Profit/(Loss)
from
operations (3,908) - (3,908) (3,548) 16 (3,532) (8,048) - (8,048)
Depreciation
and
amortisation 416 - 416 345 - 345 715 - 715
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
EBITDA (3,492) - (3,492) (3,203) 16 (3,187) (7,333) - (7,333)
--------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
Corporate costs are those costs not directly attributable to
Accoya(R) , Tricoya(R) or Research and Development activities. This
includes management and the Group's corporate and general
administration costs including the head office in London.
See note 4 for explanation of Exceptional Items and other
adjustments.
Average headcount = 36 (H1 FY21: 26).
Research and Development
Research & Development Segment
-------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2021 2021 2021
2021 2021 2021 2020 2020 2020
Underlying Exceptional TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items
items items & Other
& Other & Other Adjustments
Adjustments Adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Total Revenue - - - - - - - - -
Cost of sales - - - - - - - - -
Gross result - - - - - - - - -
Other
operating
costs (621) - (621) (499) 10 (489) (1,118) - (1,118)
Loss from
operations (621) - (621) (499) 10 (489) (1,118) - (1,118)
Loss from
operations (621) - (621) (499) 10 (489) (1,118) - (1,118)
Depreciation
and
amortisation 34 - 34 41 - 41 88 - 88
----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
EBITDA (587) - (587) (458) 10 (448) (1,030) - (1,030)
-------------- ----------- ------------ ---------- ----------- ------------ ---------- ----------- ------------ ----------
Research and Development costs are those associated with the
Accoya(R) and Tricoya(R) processes. Costs exclude those which have
been capitalised in accordance with IAS 38. (see note 8).
See note 4 for explanation of Exceptional Items and other
adjustments.
Average headcount = 9 ( H1 FY21 : 8).
Total
TOTAL
-------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2021 2021 2021
2021 2021 2021 2020 2020 2020
Underlying Exceptional TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items
items items & Other
& Other & Other Adjustments
Adjustments Adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Accoya(R) wood
revenue 48,465 - 48,465 38,676 - 38,676 91,095 - 91,095
Tricoya(R)
panel
revenue 860 - 860 1,110 - 1,110 2,091 - 2,091
Licence
revenue 9 - 9 402 - 402 419 - 419
Other revenue 6,901 - 6,901 2,745 - 2,745 6,198 - 6,198
Total Revenue 56,235 - 56,235 42,933 - 42,933 99,803 - 99,803
Cost of sales (39,032) - (39,032) (28,609) 230 (28,379) (66,714) - (66,714)
Gross profit 17,203 - 17,203 14,324 230 14,554 33,089 - 33,089
Other
operating
costs (15,655) (151) (15,806) (12,769) 347 (12,422) (28,559) 103 (28,456)
Profit from
operations 1,548 (151) 1,397 1,555 577 2,132 4,530 103 4,633
Finance income - - - 1 - 1 1 - 1
Finance
expense (1,722) 231 (1,491) (1,657) 485 (1,172) (3,250) (900) (4,150)
Investment in
joint venture (91) - (91) - - - (144) - (144)
Profit/(Loss)
before
taxation (265) 80 (185) (101) 1,062 961 1,137 (797) 340
=========== ============ ========== =========== ============ ========== =========== ============ ==========
See note 4 for explanation of Exceptional Items and other
adjustments.
Reconciliation of underlying earnings
Reconciliation of underlying earnings
-------------------------------------------------------------------------------------------------------------------
6 months 6 months 6 months 6 months 6 months 6 months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
30 30 30 30 30 30 31 March 31 March 31 March
September September September September September September 2021 2021 2021
2021 2021 2021 2020 2020 2020
Underlying Exceptional TOTAL
Underlying Exceptional TOTAL Underlying Exceptional TOTAL items
items items & Other
& Other & Other Adjustments
Adjustments Adjustments
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Profit from
operations 1,548 (151) 1,397 1,555 577 2,132 4,530 103 4,633
Share of
Accoya(R)
USA EBITDA (91) - - - - - (144) - -
EBIT 1,457 (151) 1,397 1,555 577 2,132 4,386 103 4,633
Depreciation
and
amortisation 3,009 - 3,009 2,765 - 2,765 5,737 - 5,737
EBITDA 4,466 (151) 4,406 4,320 577 4,897 10,123 103 10,370
Segmental reporting continued
Assets and liabilities on a segmental basis:
Accoya(R) Tricoya(R) Corporate R&D TOTAL
Sept 2021 Sept 2021 Sept 2021 Sept 2021 Sept 2021
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current assets 78,153 79,895 4,399 262 162,709
---------- ----------- ---------- ---------- ----------
Current assets 44,766 9,425 34,194 3,440 91,825
---------- ----------- ---------- ---------- ----------
Current liabilities (19,198) (10,766) (11,599) (95) (41,658)
---------- ----------- ---------- ---------- ----------
Net current assets 25,568 (1,341) 22,595 3,345 50,167
Non-current liabilities (20,006) (10,188) (10,836) (135) (41,165)
---------- ----------- ---------- ---------- ----------
Net assets 83,715 68,366 16,158 3,472 171,711
Accoya(R) Tricoya(R) Corporate R&D TOTAL
Sept 2020 Sept 2020 Sept 2020 Sept 2020 Sept 2020
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current assets 61,915 79,278 4,634 71 145,898
Current assets 26,982 10,325 26,637 5,513 69,457
Current liabilities (8,604) (16,684) (7,941) (32) (33,261)
Net current assets 18,378 (6,359) 18,696 5,481 36,196
Non-current liabilities (23,730) (8,956) (19,525) - (52,211)
Net assets 56,563 63,963 3,805 5,552 129,883
Accoya(R) Tricoya(R) Corporate R&D TOTAL
March March March March
2021 2021 March 2021 2021 2021
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current assets 64,994 85,696 4,620 297 155,607
Current assets 34,752 13,134 19,567 5,038 72,491
Current liabilities (16,706) (18,933) (6,576) (70) (42,285)
Net current assets 18,046 (5,799) 12,991 4,968 30,206
Non-current liabilities (21,798) (9,990) (17,262) (160) (49,210)
Net assets 61,242 69,907 349 5,105 136,603
The segmental assets in the current year were predominantly held
in the UK and mainland Europe (Prior Year UK and mainland Europe).
Additions to property, plant, equipment and intangible assets in
the current year were predominantly incurred in the UK and mainland
Europe (Prior Year UK and mainland Europe). There are no
significant intersegment revenues.
Segmental reporting continued
Analysis of revenue by geographical destination:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
UK & Ireland 21,484 17,495 41,890
Rest of Europe 17,184 13,136 27,187
Benelux 5,372 4,458 13,170
Americas 7,940 4,926 9,701
Asia-Pacific 4,192 2,858 7,360
Rest of World 63 60 495
56,235 42,933 99,803
Sales to UK and Ireland include the sales to MEDITE.
3. Other operating costs
Other operating costs consist of the operating costs, other than
the cost of sales, associated with the operation of the plant in
Arnhem, the site in Barry, the offices in Dallas and London and
certain pre-operating costs associated with the plant in Hull:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Sales and marketing 2,483 1,476 3,847
Research and development 587 448 1,030
Other operating costs 3,907 2,743 6,013
Administration costs 5,669 5,567 11,932
Exceptional Items and
other adjustments 151 (577) (103)
Other operating costs excluding
depreciation and amortisation 12,797 9,657 22,719
Depreciation and amortisation 3,009 2,765 5,737
Total other operating
costs 15,806 12,422 28,456
Administrative costs include costs associated with Business
Development and Legal departments, Intellectual Property as well as
Human Resources, IT, Finance, Management and General Office and
include the costs of the Group's head office costs in London and
the US office in Dallas.
The total cost of EUR15.8m in the current period includes
EUR2.0m in respect of Tricoya(R) segment (H1 FY21: EUR1.4m).
Group average employee headcount increased to 241 in the period
to 30 September 2021, from 190 in the period to 30 September
2020.
During the period, EUR408,000 (H1 FY21: EUR289,000) of internal
development & patent related costs were capitalised and
included in intangible fixed assets, including EUR301,000 (H1 FY21:
EUR218,000) which were capitalised within Tricoya Technologies
Limited ('TTL'). In addition, EUR187,000 of internal costs have
been capitalised in relation to our Arnhem Accoya(R) plant
expansion project (H1 FY21: EUR102,000) and EUR349,000 of internal
costs have been capitalised in relation to our plant build in Hull,
UK (H1 FY21: EUR18,000). Both are included within tangible fixed
assets.
4. Exceptional Items and Other Adjustments
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Government grant income - 595 -
Redundancy costs in relation to purchase of
assets to grow Accoya(R) Color production (133) - -
Total exceptional items (133) 595 -
Foreign exchange differences arising on Tricoya(R)
cash held - Operating costs (loss)/profit (18) (18) 103
Foreign exchange differences arising on Loan
Notes - incl. in Finance expense profit/(loss) 231 485 (900)
Foreign exchange differences on cash held -
Other comprehensive profit/(loss) 607 (237) 18
Revaluation of FX forwards used for cash-flow
hedging - Other comprehensive (loss)/profit (28) (191) 174
Total other adjustments 792 39 (605)
Tax on exceptional items and other adjustments - - -
Total exceptional items and other adjustments 659 634 (605)
Exceptional Items
In July 2021, Accsys entered into a sale and purchase agreement
with Lignia Wood Company Limited and its administrators, to acquire
certain assets, equipment and technology along with its
manufacturing plant in Barry, Wales for a consideration of EUR1.2m,
including EUR0.5m for raw wood inventory (see note 15). The
purchased assets will enable Accsys to grow production and
availability of Accoya(R) Color more rapidly, accelerating the
launch of the product into more geographic markets and for more
product applications. As part of this purchase, redundancy costs of
EUR133,000 were incurred in relation to staff at the Barry
site.
In the previous year, the Group received government grants
relating to the COVID-19 response, of which EUR460,000 was received
in the Netherlands (Netherlands NOW scheme), and EUR135,000 in the
UK (UK Coronavirus Job Retention Scheme). In the interim results,
these amounts were recognised as Exceptional income. It was decided
before the March 21 reporting date, given the overall performance
of the Group in the year, to repay both of the government grants
received, with the exceptional income reversed in the second half
of the financial year ended 31 March 2021 and repaid earlier this
year.
Other Adjustments
Foreign exchange differences in the Tricoya(R) segment have
occurred due to pounds sterling held within the consortium for the
ongoing Hull plant build, US dollars held within the Corporate
segment for the equity investment into Accoya USA for the USA plant
build and to a lesser extent, pounds sterling held within the
Corporate segment for future sterling corporate costs.
The Group has mitigated these currency exchange risks by
adopting hedge accounting under IFRS 9, Financial Instruments. The
effective portion of the foreign exchange movement is recognised in
other comprehensive income, with the ineffective portion recognised
in Operating costs. Foreign exchange differences also arise on the
pounds sterling denominated loan notes, entered into in a prior
period. These exchange rate differences are included as finance
expenses.
5. Tax expense
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
(a) Tax recognised in the statement
of comprehensive income comprises:
Current tax expense/(credit)
UK Corporation tax on losses for the
period - - -
Research and development tax (credit)/expense
in respect of current period (31) (45) 24
(31) (45) 24
Overseas tax at rate of 15% 9 4 11
Overseas tax at rate of 25% 644 628 1,216
Deferred Tax
Utilisation of deferred tax asset - - -
Total tax expense reported in the statement
of comprehensive income 622 587 1,251
6. Basic and diluted profit/ (loss) per ordinary share
Unaudited Unaudited Unaudited Unaudited Audited Audited
6 months 6 months 6 months 6 months Year Year
ended ended ended ended ended ended
30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March
2021 2021 2020 2020 2021 2021
Basic earnings per share Underlying Total Underlying Total Underlying Total
Weighted average number of
Ordinary shares in issue ('000) 188,322 188,322 163,823 163,823 164,890 164,890
Profit/(Loss) for the period attributable
to owners of Accsys Technologies PLC
(EUR'000) 6 119 (113) 1,078 1,274 477
EUR EUR EUR EUR EUR EUR
Basic profit/(loss) per share 0.00 0.00 (0.00) 0.01 0.01 0.00
Diluted earnings per share
Weighted average number of Ordinary shares
in issue ('000) 188,322 188,322 163,823 163,823 164,890 164,890
Equity options attributable to Volantis - - 4,656 4,656 - -
Equity options attributable to BGF 8,449 8,449 8,449 8,449 8,449 8,449
Weighted average number of Ordinary shares
in issue and potential ordinary shares
('000) 196,771 196,771 176,927 176,927 173,339 173,339
Profit/(Loss) for the year attributable
to owners of Accsys Technologies PLC
(EUR'000) 6 119 (113) 1,078 1,274 477
EUR EUR EUR EUR EUR EUR
Diluted profit/(loss) per share 0.00 0.00 (0.00) 0.01 0.01 0.00
7. Tricoya Technologies Limited
Tricoya Technologies Limited ("TTL") was incorporated in order
to develop and exploit the Group's Tricoya(R) technology for use
within the worldwide panel products market, which is estimated to
be worth more than EUR60 billion annually.
On 29 March 2017 the Group announced the entry into and
successful completion of its agreements for the financing,
construction and operation of the world's first Tricoya(R) wood
elements acetylation plant in Hull with its TTL consortium
investors, being INEOS (previously BP), MEDITE, BGF and
Volantis.
The Hull plant will have a targeted production capacity of
30,000 metric tonnes per annum (sufficient to manufacture 40,000
cubic metres of panels) and scope to expand.
Structurally, Accsys, INEOS (previously BP Ventures), MEDITE,
BGF and Volantis have invested into TTL. TTL has then invested,
alongside INEOS (previously BP Chemicals) and MEDITE, in Tricoya UK
Limited ("Tricoya UK"), a special purpose subsidiary of TTL that
will construct, own and operate the Hull Plant.
INEOS Acetyls Investments Limited ("INEOS") acquired BP
Ventures' share capital of TTL and BP Chemicals share capital of
Tricoya UK on 31 December 2020.
INEOS (through acquiring BP's share of TTL & Tricoya UK)
have invested EUR31.8 million in the Tricoya(R) Project, including
EUR23.3 million as equity in Tricoya UK and EUR8.5 million as
equity in TTL. All funding was received by 31 March 2021.
MEDITE have invested EUR15.0 million in the Tricoya(R) Project,
including EUR8.4 million as equity in TTL and EUR6.6 million as
equity in Tricoya UK. All funding was received by 31 March
2021.
In the period to 30 September 2021, the group's shareholding in
TTL remained unchanged at 76.5%.
In the year ended 31 March 2017, BGF and Volantis invested an
aggregate of GBP19.0 million as financial investors into both the
Group and TTL. BGF and Volantis invested on similar terms but are
investing separately, with BGF accounting for 65% of the GBP19.0
million total. Both of these loans have been repaid in October 2021
following the Group debt refinance (see note 16).
In the year ended 31 March 2017, Tricoya UK entered a six-year
EUR17.2 million finance facility agreement with Natwest Bank PLC in
respect of the construction and operation of the Hull Plant. As at
30 September 2021, the Group have utilised EUR9.6m (FY21: EUR9.3m)
of the facility.
The Group has consolidated the results of TTL and Tricoya UK as
subsidiaries, as it exercises the power to govern the entities in
accordance with IFRS 10. The non-controlling interests in both
entities have been recognised in these Group financial
statements.
The "TTL Group" income statement and balance sheet, consisting
of TTL and its subsidiary Tricoya UK Ltd, are set out below:
TTL Group income statement:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Revenue 875 1,118 2,178
Cost of Sales Tricoya(R) panel (848) (1,059) (1,999)
Gross profit 27 59 179
Costs:
Staff costs (1,440) (902) (2,582)
Research & development (excluding
staff costs) (115) (108) (217)
Intellectual Property (106) (77) (255)
Other Operating costs (256) (131) (122)
Depreciation & Amortisation (262) (247) (563)
EBIT (2,152) (1,406) (3,560)
EBIT attributable to Accsys shareholders (1,226) (704) (2,172)
Tricoya(R) panel revenue represents panels purchased by Tricoya
Technologies Ltd from MEDITE, sold to customers in other regions as
market seeding.
TTL Group balance sheet at 30 September 2021:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Non-current assets
Intangible assets 4,517 4,263 4,376
Property, Plant and Equipment 74,106 74,187 79,999
Right of use assets 1,271 829 1,321
79,894 79,279 85,696
Current assets
Trade and other receivables 687 772 1,232
Inventories - 151 -
Cash and cash equivalents 7,900 9,561 11,464
Derivative financial instrument 106 - 134
8,693 10,484 12,830
Current liabilities
Trade and other payables (12,208) (17,094) (20,159)
Derivative financial instrument - (129) -
(12,208) (17,223) (20,159)
Non-current liabilities
Other long term borrowing (9,306) (8,586) (8,955)
(9,306) (8,586) (8,955)
Net assets 67,073 63,954 69,412
Value attributable to Accsys Technologies 30,832 28,469 32,246
Value attributable to Non-controlling
interest 36,241 35,485 37,166
TTL Group cash flows at 30 September 2021:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Cash flows (used in)/ from operating
activities 863 755 (841)
Cash flows (used in)/ from investing
activities (4,299) (2,621) (6,400)
Cash flows (used in)/ from financing
activities (127) 3,028 10,306
Net (decrease)/increase in cash and
cash equivalents (3,563) 1,162 3,065
8. Intangible assets
Internal Intellectual
Development property
costs rights Goodwill Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost
At 31 March 2020 7,187 74,051 4,231 85,469
Additions 95 194 - 289
At 30 September 2020 7,282 74,245 4,231 85,758
Additions 182 211 - 393
At 31 March 2021 7,464 74,456 4,231 86,151
Additions 118 345 - 463
At 30 September 2021 7,582 74,801 4,231 86,614
Accumulated amortisation
At 31 March 2020 2,146 72,337 - 74,483
Amortisation 180 213 - 393
At 30 September 2020 2,326 72,550 - 74,876
Amortisation 184 226 - 410
At 31 March 2021 2,510 72,776 - 75,286
Amortisation 321 45 - 366
At 30 September 2021 2,831 72,821 - 75,652
Net book value
At 31 March 2020 5,041 1,714 4,231 10,986
At 30 September 2020 4,956 1,695 4,231 10,882
At 31 March 2021 4,954 1,680 4,231 10,865
At 30 September 2021 4,751 1,980 4,231 10,962
Refer to note 9 for the recoverability assessment of these
intangible assets.
9. Property, plant and equipment
Land and Plant Office
buildings and machinery equipment Total
EUR'000 EUR'000 EUR'000 EUR'000
Cost or valuation
Opening balance at 31
March 2020 17,976 125,691 3,243 146,910
Additions - 9,904 198 10,102
Foreign currency translation
(loss) - - (9) (9)
At 30 September 2020 17,976 135,595 3,432 157,003
Additions - 10,838 453 11,291
Foreign currency translation
(loss) - - - -
At 31 March 2021 17,976 146,433 3,885 168,294
Additions - 7,491 324 7,815
Foreign currency translation
(loss) - - 2 2
At 30 September 2021 17,976 153,924 4,211 176,111
Depreciation
---------- -------------- ---------- --------
Opening balance at 31
March 2020 637 22,696 1,454 24,787
Charge for the period 179 1,604 168 1,951
Foreign currency translation
gain - - (8) (8)
At 30 September 2020 816 24,300 1,614 26,730
Charge for the period 179 1,645 183 2,007
Foreign currency translation
(loss) - - - -
At 31 March 2021 995 25,945 1,797 28,737
Charge for the period 179 1,730 257 2,166
Foreign currency translation
gain - - 2 2
At 30 September 2021 1,174 27,675 2,056 30,905
Net book value
At 31 March 2020 17,339 102,995 1,789 122,123
At 30 September 2020 17,160 111,295 1,818 130,273
At 31 March 2021 16,981 120,488 2,088 139,557
At 30 September 2021 16,802 126,249 2,155 145,206
Plant and machinery assets with a net book value of
EUR75,068,000 relating to the Hull Plant and EUR17,910,000 relating
to the further expansion of the Arnhem Plant are held as assets
under construction and are not depreciated, (31 March 2021:
EUR80,853,000 relating to the Hull Plant and EUR5,716,000 relating
to the further expansion of the Arnhem Plant).
In July 2021, Accsys entered into a sale and purchase agreement
with Lignia Wood Company Limited and its administrators to acquire
certain assets, equipment and technology along with its
manufacturing plant in Barry, Wales for a consideration of EUR1.2m.
See note 15 for further details. This purchase included equipment
of EUR695,000 which is reflected in the additions line above.
The carrying value of the property, plant and equipment,
internal development costs and intellectual property rights are
split between two cash generating units (CGUs), representing the
Accoya(R) and Tricoya(R) segments and the carrying value of
Goodwill is allocated to the Accoya(R) segment. The recoverable
amount of these CGUs are determined based on a value-in-use
calculations which uses cash flow projections based on latest
financial budgets and discounted at a pre-tax discount rate of
10.5% (31 March 2021: 10.5%) to determine their present value.
The key assumptions used in the value in use calculations
are:
-- the manufacturing revenues, operating margins and future
licence fees estimated by management;
-- the completion of construction of additional facilities on
time (and associated output);
-- the long term growth rate; and
-- the discount rate.
The Directors have determined that there has been no impairment
to either CGU. The Directors have considered whether a reasonably
possible change in assumptions may result in an impairment. The CGU
most susceptible to an impairment given a change in assumptions is
the Tricoya(R) CGU. Key assumptions applied to this CGU were as
follows:
-- a discount rate of 10.5%;
-- a long-term sales growth rate of 1.8%; and
-- Gross margin of approximately 40%.
The headroom in the value-in-use model for this CGU would be
reduced to nil if the following adverse changes to those key
assumptions were made in isolation:
-- a 2.5% increase to the discount rate;
-- a 1.7% reduction in the long-term sales growth rate;
-- a 6% decrease to Gross margin; and
-- an increase of 150% above assumed remaining costs to complete
the plant.
10. Share capital
In the period ended 30 September 2020:
1,259,449 Shares were issued on 12 May 2020 following the
exercise of nil cost options, granted under the Company's 2013 Long
Term Incentive Plan ("LTIP").
727,250 shares were issued to an Employee Benefit Trust (EBT) on
29 June 2020 at nominal value, in lieu of cash bonuses for the year
ended 31 March 2020. These shares will vest on 1 July 2021, subject
to the employees continuing employment within the Group.
In the period ended 31 March 2021:
In February 2021, following the subscription by employees in the
prior year for shares under the Employee Share Participation Plan
(the 'Plan'), 198,219 shares were issued as 'Matching Shares' at
nominal value under the Plan.
In addition, various employees newly subscribed under the Plan
for 195,524 shares at an acquisition price of EUR1.43 per share,
with these shares issued to a trust, to be released to the
employees after one year, together with an additional share on a
matched basis (subject to continuing employment within the
Group).
On 26 March 2021, the Company announced that Lombard Odier Asset
Management (USA) Corp on behalf of 1798 Volantis Catalyst Fund II
Ltd ('Volantis') exercised options over a total of 4,655,667
ordinary shares in the Company for a total consideration of
GBP2,779,899 (exercise price of GBP0.5971 per ordinary share)
In the period ended 30 September 2021:
In May 2021, 20,005,325 Placing Shares and 2,418,918 Open Offer
Shares were issued as part of the capital raise to fund the
Company's investment in expanding its Accoya(R) business into North
America through the construction of a new Accoya(R) plant in the
USA through its joint venture, Accoya USA LLC, with Eastman
Chemical Company (see note 14), as well as to provide additional
capital to support the Company's continued growth. The Shares were
issued at a price of EUR1.65 (GBP1.40) per ordinary share, raising
gross proceeds of EUR36.7 million (before expenses).
629,460 Shares were issued between June to September 2021 for
the benefit of current and former employees following the exercise
of nil cost options, granted under the Company's 2013 Long Term
Incentive Plan ("LTIP").
11. Other Reserves
Capital
redemp- Hedge Total
tion Merger Effective-ness Other Other
reserve reserve reserve reserve reserves
EUR000 EUR000 EUR000 EUR000 EUR000
Balance at 30 September 2020 148 106,707 (391) 6,464 112,928
Issue of subsidiary shares to
non-controlling interests - - - 1,087 1,087
Total Comprehensive income for
the period - - 620 - 620
Balance at 31 March 2021 148 106,707 229 7,551 114,635
Issue of subsidiary shares to - - - -
non-controlling interests -
Total Comprehensive (expense)
for the period - - 579 - 579
Balance at 30 September 2021 148 106,707 808 7,551 115,214
The closing balance of the capital redemption reserve represents
the amounts transferred from share capital on redemption of
deferred shares in a prior period.
The merger reserve arose prior to transition to IFRS when merger
accounting was adopted.
The hedge effectiveness reserve reflects the total accounted for
under IFRS 9 in relation to the Tricoya(R) and Corporate
segments.
The other reserve represents the amounts received for subsidiary
share capital from non-controlling interests net with the carrying
amount of non-controlling interests issued.
12. Commitments under loan agreements
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
Amounts payable under
loan agreements:
Within one year 17,358 6,703 12,012
In the second to fifth
years inclusive 40,726 56,336 49,714
In greater than five years - 223 -
Less future finance charges (5,280) (8,763) (7,436)
Present value of loan obligations 52,804 54,499 54,290
The decrease in total borrowings in the period since 31 March
2021 of EUR1.5m consisted of scheduled repayments on the ABN
(EUR0.5m), Bruil (EUR0.5m) & Cerdia loans (EUR0.4m), repayment
on the ABN lease loan (EUR0.7m) and EUR0.2m foreign exchange gain
arising on the loan notes with BGF & Volantis, offset by
EUR0.8m of accrued finance charges.
Facilities relating to purchase of Arnhem land and
buildings*:
On 1 August 2018 the Group entered into a package of facilities
to fully finance the purchase of the land and buildings in Arnhem.
The partially amortising package of loans includes the
following:
- EUR14.0m loan with ABN Amro Bank. The loan is partially
repayable over a five year term with a final payment of EUR9.25m.
Interest is fixed at 3% and the loan is secured on the land and
buildings. During the prior year, repayments totalling EUR0.5m were
deferred by ABN Amro Bank, as a COVID-19 action, to the end of the
loan term.
- EUR5.0m lease loan with ABN Asset Based Finance is repayable
over a five year term with an implied interest rate of
approximately 3%. The loan is secured on the first two Accoya(R)
reactors.
- EUR4.0m loan with Bruil, the seller and previous landlord. The
balance is repayable from July 2021 to July 2023 with interest
fixed at 5%. The loan is unsecured.
Loan Notes*:
On 29 March 2017 the Group issued GBP16.3 million (EUR18.4
million) of unsecured fixed rate loan notes. GBP10.5 million of
Loan Notes in principal were issued to Business Growth Fund
('BGF'), with GBP5.8 million in principal issued to Volantis. The
BGF loan notes are subject to a 7% fixed interest rate for the
duration of their term and the Volantis loan notes are subject to a
7% fixed interest rate until 31 December 2018, with the interest
rate fixed at 9% thereafter. Interest is rolled up until 31
December 2018 on both loans, with further roll up of interest on
the Volantis loan until six-monthly redemption payments of both
loans commence on 31 December 2021 and end on 30 June 2023.
BGF is an investment company that provides long-term equity
funding to growing UK companies to enable them to execute their
strategic plans. Volantis is a global asset management firm
specialising in alternative investment strategies and is owned by
Lombard Odier.
Cerdia Production Facility*:
The EUR9.5 million term loan facility with Cerdia Production
GmBH was used to design, procure and build the Arnhem plant's third
reactor. This facility is secured against the third reactor of the
Arnhem chemical plant and associated assets and is subject to
interest at 7.5% per annum. At 30 September 2021, the Group had
EUR3.8m (31 March 2021: EUR4.2m) borrowed under this facility.
Quarterly repayments of the loan commenced on 21 December 2018 and
continue until November 2025.
Tricoya(R) facility:
On 29 March 2017 the Company's subsidiary, Tricoya UK Limited
entered into a six-year EUR17.2 million finance facility agreement
with the Natwest Bank plc in respect of the construction and
operation of the Hull Plant. The facility is secured by fixed and
floating charges over all assets of Tricoya UK Limited. At 30
September 2021, the Group had EUR9.6m (31 March 2021: EUR9.3m)
borrowed under the facility. The facility is to be drawn down as
required, and facility repayments will commence 12 months after
practical completion of the Hull Plant. Interest will accrue at
Euribor plus a margin, with the margin ranging from 325 to 475
basis points.
Trade receivable and inventory facilities*:
Working capital facility*
The facility is a EUR6.0m credit facility with ABN Commercial
Finance secured upon the receivables and inventory of the Accoya(R)
manufacturing business committed for a period of 5 years. At 30
September 2021, the facility was undrawn (31 March 2021:
undrawn).
Bank guarantee facility*
The EUR1.5m bank guarantee facility is held with ABN AMRO Bank
N.V. enabling the Group to issue bank guarantees in order to
support the working capital and other operational commitments of
the Group.
Both facilities are subject to interest at 2% above the ABN AMRO
base rate.
* In October 2021, Accsys completed the refinance of its Group
debt facilities through a new bilateral agreement with ABN AMRO,
one of Accsys' existing relationship banks. The loans in place at
30 September 2021 held with ABN Amro, Cerdia, Bruil, BGF and
Volantis reflected above were fully repaid in October 2021. See
note 16.
Reconciliation to net (debt)/cash:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
Cash and cash equivalents 60,921 42,967 47,598
Less:
Amounts payable under loan
agreements (52,804) (54,499) (54,290)
Amounts payable under lease
liabilities (5,738) (4,770) (5,532)
Net (debt)/cash 2,379 (16,302) (12,224)
13. Transactions with non-controlling interests
In the period ended 30 September 2020:
TTL issued 372,875 shares to Titan Wood Limited for a
consideration of EUR0.7m. 484,774 shares were issued to
non-controlling interests for a consideration of EUR0.9m and an
additional 495,311 shares were issued to MEDITE in consideration
for continuing to seed the market with Tricoya(R) panels ensuring
continued market development ahead of the completion of the Hull
Plant. As a result the non-controlling interests' shareholdings
were amended to:
BP Ventures (8.5%), MEDITE (11.4%), BGF (2.6%), Volantis
(1.2%).
Tricoya UK Ltd issued 486,572 Ordinary shares to Tricoya
Technologies Ltd for a consideration of EUR1.0m. 1,600,530 shares
were issued to non-controlling interests for consideration of
EUR1.6 million. As a result the non-controlling interests'
shareholdings were amended to:
BP Chemicals (30.0%, MEDITE 8.2%).
In the period ended 31 March 2021:
On 29 October 2020, TTL issued 1,862,356 shares to Titan Wood
Limited for a consideration of EUR3.7m. An additional 498,987
shares were issued to non-controlling interests for a consideration
of EUR1.0m. On 31 December 2020, BP Ventures' share capital of TTL
was acquired by INEOS Acetyls Investments Limited ("INEOS"). As a
result the non-controlling interests' shareholdings were amended
to:
INEOS (8.5%), MEDITE (11.3%), BGF (2.6%), Volantis (1.1%)
On 29 October 2020, Tricoya UK issued 3,972,686 Ordinary shares
to Tricoya Technologies Ltd for a consideration of EUR4.0m. An
additional 2,452,798 shares were issued to non-controlling
interests for consideration of EUR2.5m. On 31 December 2020, BP
Chemicals' share capital of Tricoya UK was acquired by INEOS. As a
result the non-controlling interests' shareholdings were amended
to:
INEOS (30.0%, MEDITE 8.2%)
In the period ended 30 September 2021:
No shares were issued in the period to 30 September 2021.
The total carrying amount of the non-controlling interests in
TTL and Tricoya UK at 30 September 2021 was EUR36.24m (2020:
EUR34.42m).
Transactions with non-controlling Unaudited Unaudited Audited
interests
6 months 6 months Year
ended ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Opening balance 8,127 6,235 6,235
Carrying amount of non-controlling
interests issued - (1,747) (4,112)
Consideration paid by non-controlling
interests - 2,552 6,004
Excess of consideration paid
recognised in Group's equity 8,127 7,040 8,127
14. Investment in Joint Venture
On 11 August 2020, Accsys together with Eastman Chemical Company
formed a company, Accoya USA LLC, with the intention to construct
and operate an Accoya(R) wood production plant to serve the North
American market.
The plant is being designed to initially produce approximately
40,000 cubic metres (17 million board feet) of Accoya(R) per annum
and to allow for cost-effective expansion.
The carrying amount of the equity-accounted investment is as
follows:
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended
30 Sept 30 Sept 31 March
2021 2020 2021
EUR'000 EUR'000 EUR'000
Opening balance 326 - -
Investment in Accoya(R) USA 1,186 1,070 1,070
Less: Accsys proportion (60%)
of Licence fee received - (600) (600)
Loss for the year (91) - (144)
Closing balance 1,421 470 326
15. Purchase of assets to grow Accoya(R) Color production
In July 2021, Accsys entered into a sale and purchase agreement
with Lignia Wood Company Limited and its administrators, to acquire
certain assets, equipment and technology along with its
manufacturing plant in Barry, Wales. The purchased assets will
enable Accsys to grow production and availability of Accoya(R)
Color more rapidly, accelerating the launch of the product into
more geographic markets and for more product applications. The
following assets were purchased:
Unaudited
6 months
ended
30 Sept
2021
EUR'000
Intellectual property 55
Equipment 695
Inventory 486
1,236
16. Post Balance Sheet Events
In October 2021, Accsys completed the refinance of its Group
debt facilities through a new bilateral agreement with ABN AMRO,
one of Accsys' existing relationship banks. The new EUR60m 3-year
bilateral facilities agreement with ABN AMRO comprises a EUR45m
Term Loan Facility and a EUR15m Revolving Credit Facility ('RCF').
The EUR45m Term Loan has been (post period-end) fully utilised to
repay all of the Group's existing debt, with the exception of the
NatWest facility held by the Tricoya(R) consortium which remains in
place. The new facility significantly simplifies Accsys' debt
structure, which previously included five different debt providers
and commercial partners. The Term Loan is partially amortising,
with 5% of the principal repayable per annum after 18 months. This,
together with the RCF, will provide Accsys with greater liquidity
to support the Group's growth plans. The applicable interest rate
for the Term Loan will vary between an all in cost of 1.75% and
3.25% depending on net leverage, resulting in a significant
improvement compared to the previous facilities which had a
weighted average cost of approximately 6%. The RCF interest rate
will similarly vary, but between 2.0% and 3.5% above EURIBOR. The
new facilities are secured against the assets of the Group which
are 100% owned by the Company and include customary covenants such
as net leverage and interest cover.
In November 2021, Accsys agreed new funding arrangements with
our Tricoya UK Limited ('Tricoya UK') consortium partners relating
to the anticipated costs to complete the plant. Under the
arrangements:
-- Accsys has entered into a new loan agreement with Tricoya UK
under which Accsys will lend up to EUR17m to Tricoya UK to be used
towards the Hull plant construction project alongside existing
funding in place for Tricoya UK.
-- The loan will accrue interest and be rolled up at a rate
which is expected to be between 5.25 and 6.75% above EURIBOR. The
loan is secured and is repayable by 30 September 2023. The supply
and offtake agreements with consortia partners Medite (sale and
purchase of Tricoya(R) wood elements) and INEOS (acetic anhydride
supply) have been updated and reflect the partners' ongoing
commitment to the project.
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END
IR PPGBUGUPGPPP
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November 23, 2021 02:00 ET (07:00 GMT)
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