TIDMITX
RNS Number : 5728D
Itaconix PLC
27 June 2019
27 June 2019
Itaconix plc ("Itaconix" or "the Group")
Preliminary Results Announcement for the Year Ended 31 December
2018
Annual Report & Accounts
Itaconix (AIM: ITX), a leading innovator in sustainable
specialty polymers, announces its audited results for the year
ended December 2018 ("2018").
A copy of the Annual Report & Accounts is available for
download on Itaconix's website at www.itaconix.com.
2018 Financial Highlights
-- Total revenues of GBP0.66 m (FY17: GBP0.55 m)
-- Cash reserves at 31 December 2018 of c. GBP2.1m (FY17: c. GBP3.6m)
-- As part of the restructuring undertaken in 2018, operating
costs have been reduced by over GBP2m per annum
-- Equity raise in August 2018 with net proceeds of GBP3.3
million to fund commercial development and meet working capital
needs as the Group moves toward profitability
2018 Operational Highlights
-- The Group achieved important progress at establishing the
commercial value of its core products in their major application
areas:
o Success by Croda in geographic expansion of revenues and
projects for our odour control polymer
o Expanded our launch of our hairstyling polymer with use and
revenues in Europe, North America and Asia
o Developed a new auto dish detergent based on our new
Itaconix(R) CHT(TM) 122 polymer and licensed the formula to New
Wave for the marketing and sales of private-label detergent pods to
major retailers in North America
o Notified by Nouryon of interest in our detergent polymers
based on internal performance evaluation and market assessment
-- Restructuring of our operations in 2018 generated significant
change in our organisation, Executive Team, and Board of
Directors
Post Year End
-- Received first order for use of our new detergent polymer in
a European auto dish detergent product
-- Completed worldwide supply agreements with Nouryon for our
detergent and hair styling polymers, including the first purchase
order for the hair styling product
-- In May 2019, Itaconix completed its divestment of our
minority interest in Alkalon for a total cash consideration of c.
GBP242,000
-- Effective 24 May 2019, Michael Townend stepped down as a Non-Executive Director
John R. Shaw, CEO of Itaconix, stated: "We are positioned for
revenue growth and a focus on profitability with a reduced cost
base and global partners in place for our current major products.
While the ramp up in 2019 sales was initially delayed, revenue
growth is accelerating, with underlying pre-tax losses for the full
year decreasing and remaining in line with expectations."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR).
For further information please contact:
Itaconix plc +1 603 775-4400
John R. Shaw
N+1 Singer +44 (0) 207 496 3000
Richard Lindley / James Moat (Corporate
Finance)
Mia Gardner (Corporate Broking)
About Itaconix
Itaconix develops and produces bio-based functional ingredient
that improve the safety, performance or sustainability of consumer
and industrial products, with technology and market leadership
positions in non-phosphate detergents, odour control, and hair
styling.
www.itaconix.com
CHIEF EXECUTIVE OFFICER'S REPORT
Overview
I am pleased to deliver my first Chief Executive Officer's
Report to update shareholders on what was a critical year for
transforming Itaconix plc into a recognised leader in bio-based
functional ingredients. In June 2018, we began a restructuring to
reduce our cost base and focus on growing revenues for our current
products. In August 2018, we completed an equity placement with net
proceeds of GBP3.3 million to fund commercial development and meet
working capital needs as the Group moves toward profitability. Most
importantly, we now have global partners in place to take our
current products worldwide in our key markets of non-phosphate
detergents, odour control, and hair styling. Commercial momentum
continues to build in 2019.
Strategy
Consumers in many countries around the world are seeking or are
required by laws to purchase products that are more sustainable and
safer for the environment and human use. The Group uses its
proprietary technologies to create bio-based functional ingredients
that meet particular consumer needs. We then use our direct selling
efforts to acquire the first customers for a new ingredient,
establish initial sales, and commercially validate its value in
end-use products. Once we achieve first sales, we look to scale
demand globally through collaboration with a market leader for
ingredients in the particular application area. To date, we have
executed this strategy with Croda in odour control and Nouryon
(formerly AkzoNobel Specialty Chemicals) in hair styling and
non-phosphate detergents.
Operational and Commercial Progress
We made significant advances with our strategy in 2018. The
Group now has revenue growth and worldwide partners for current
products, a lower cost base, new cash resources, and a strong focus
on continued revenue growth and reaching profitability.
Through our research activities at our UK and U.S. operations
over the past several years, we have built a proprietary polymer
technology platform with broad potential to meet evolving market
needs. It became evident in early 2018 that the Group's generation
of new chemistries outpaced the commercial progress of our existing
products. Consequently, to rebalance the Group's efforts, the Board
acted in June 2018 to focus on revenue growth and reduce the
Group's cost base by consolidating research and administration
activities into the U.S. operations. In addition, the Board
installed a new management team in August 2018, and completed a
restructuring of the Board by the middle of December 2018.
In July 2018, a new placement of ordinary shares raised net
proceeds of GBP3.3 million from existing shareholders and new U.S.
investors. In May 2019, the Group generated an additional GBP0.24
million in cash resources through the sale of its minority interest
in Alkalon A/S, a Danish nicotine gum company.
The Group achieved important progress in 2018 at establishing
the commercial value of its core products in their major
application areas. Product revenues grew by 12.9% from GBP0.54m in
2017 to GBP0.61m in 2018. Although apparently small, I am
encouraged by the breadth of early-stage product use behind this
growth and the indications that our bio-based ingredients are
delivering key functional advantages to customers' end-products in
a wide range of applications.
Odour control
Based on our collaboration started in 2017, Croda continued to
expand its promotion of our ZINADOR(TM) odour neutralizing polymer
in homecare and industrial applications, with active development
projects in North America, Europe, Asia, Africa, and South America
and important successes for future growth with major brands in key
consumer application areas.
Non-phosphate detergents
Nouryon completed successful product performance evaluations and
notified Itaconix in May 2018 of its desire to market our detergent
polymers. The parties completed and announced an exclusive
worldwide supply agreement in January 2019, under which Nouryon
will market Itaconix detergent polymers to its customers in
household, institutional, and industrial detergent and cleaner
applications.
In December 2018, the Group also succeeded in securing future
detergent polymer demand by licensing a novel automatic dishwasher
detergent formula to New Wave Global Services ("New Wave"), a
leading Canadian supplier of innovative products to North American
retailers. Based on Itaconix(R) CHT(TM), New Wave is using the
formula to produce and supply a new triple-chamber detergent pod
for the private label brands at a growing list of major North
American retailers.
In May 2019, the Group achieved initial success for Itaconix(R)
CHT(TM) in Europe with its first order from a major producer of
non-phosphate automatic dishwashing detergents. We see this order
as a significant milestone in a key market for future growth based
on the demanding performance requirements in the European automatic
dishwashing detergent market.
Hair styling
Interest in our polymers at Nouryon expanded from detergents
into hair styling in 2018. From a small base of activity in 2017,
our direct selling efforts and distributor network generated
continued growth in revenues and active customer projects for our
RevCare(TM) NE 100S hair styling polymer. In addition to generating
123% growth in 2018 revenues from 2017, customer recognition of the
unique functionality of RevCare(TM) NE 100S created a global
collaboration opportunity with Nouryon, a worldwide leader in hair
styling polymers. The parties completed and announced an exclusive
worldwide supply agreement in February 2019. Nouryon launched the
polymer under its own Amaze(TM) SP brand in April 2019 at the
world's largest annual personal care ingredient show and has now
placed its first order with Itaconix. With this supply arrangement
in place, Itaconix is withdrawing the RevCare(TM) NE 100S brand
from the market, with accounts and projects being transitioned to
Nouryon.
Outlook
Presenting a new claim on end-product packaging often requires
extensive testing to substantiate the claim, especially the first
time a new ingredient is used. From automatic dishwashing
detergents and carpet cleaners to hair shampoos and aluminum-free
deodorants, our polymers have gained initial use or are under
evaluation in a broad range of potential consumer products. Through
our own work and the interest of our partners in the functional
advantages of our polymer ingredients, we expect a steady stream of
projects will advance to strong revenue growth for our current
products. As noted above, for example, we reported the first use of
our Itaconix(R) CHT(TM) polymer in a European automatic dishwashing
detergent. I look forward to reporting on other new customers
emerging from our project pipeline.
Beyond our key focus on higher revenues from current products,
we do have an extensive portfolio of novel chemistries with
potential for new products. We continue to assess these chemistries
for functional advantages that can meet major consumer needs. For
example, we have bio-based superabsorbents that may not necessarily
compete directly on cost and performance against current
petroleum-based superabsorbents, but may offer functional
advantages for use in certain hygiene applications. We are also
investigating functional additives that may improve the performance
and expand the market opportunities for biodegradable plastics. I
look forward to reporting on new products emerging from our
development pipeline.
I believe the Group's polymer technology platform is set for
generating stronger revenue growth in 2019 and beyond from our
current customers, new customers gained through our worldwide
partners, and new products emerging from our development
pipeline.
People
The restructuring of our operations in 2018 generated
significant changes in our organisation, Executive Team, and Board
of Directors.
In June 2018, we announced the downsizing of our research,
development, marketing, and administrative operations in Deeside,
Wales, to focus on revenue growth and profitability in our three
core product areas. As of February 2019, the Group had no employees
at the facility.
Details on the development of the Executive Team and Board of
Directors in 2018 are outlined below in the Strategic Report.
The sum total of these changes leaves the Group with an
experienced Executive Team and Board of Directors aligned on
commercial efforts to grow revenues from its current customer
pipeline and focused on reaching profitability with a lower cost
base.
I wish to thank our former Chief Executive Kevin Matthews, our
former Chief Financial Officer Robin Cridland, and our former
Non-Executive Independent Director and Audit Chair Julian Heslop
for their dedication and contributions to transforming the Group
from a nicotine gum business into a leading innovator in
sustainable specialty polymers over the last four years.
Shareholder Engagement
The Notice of Annual General Meeting ("AGM") that accompanies
the Annual Report sets out the business for our forthcoming AGM on
19 July 2019 and we encourage all our shareholders to attend and
participate.
Corporate Governance
With effect from 28 September 2018, all AIM companies are
required to adopt a recognised corporate governance code and to
make additional corporate governance related disclosures on their
website. I am pleased to announce that the Company has adopted the
Quoted Companies Alliance's Corporate Governance Code (the "QCA
Code"). See www.itaconix.com www.itaconix.comfor our governance
disclosures.
Summary
After raising new funds and significantly reducing our cost base
in 2018, the pace of revenue growth from the uptake of our existing
polymers into customer formulations remains our primary focus and
the key dynamic to monitor for managing our costs and our cash to
reach profitability. The Board firmly believes that the products,
active customer projects, and global partnerships are in place to
increase overall use of our polymers, gain larger accounts, and
generate significant new revenue growth going forward.
John R. Shaw
Chief Executive Officer
STRATEGIC REPORT
Principal Activities
Itaconix plc is a leading innovator in bio-based functional
ingredients for improving the safety and performance of homecare,
personal care, and industrial products. Its proprietary polymer
technology generates a growing range of new ingredients with unique
functionalities that meet consumer demands for value and
sustainability.
The principal activities of the Group are the research and
production of proprietary specialty polymers that meet significant
customer needs, with a strategy of direct selling efforts to
establish initial use of new polymers, and partner development to
scale global demand.
Most of the Group's activities are focused toward homecare and
personal care applications where consumer interest and desires for
safer and more sustainable products are particularly high.
Proprietary Ingredients with Unique Functionality
The Group has completed many years of exploratory research and
holds an extensive patent portfolio related to the production and
use of polymers made from itaconic acid. The commercial potential
for these ingredients stems from the unique functionalities
available through the chemical structure of itaconic acid and its
derived polymers, and from the bio-based production of itaconic
acid through fermentation using renewable sugar sources.
Using the Group's process of identifying a market need and then
developing a product to meet that need, initial products from its
itaconate chemistry platform have gained commercial use in
non-phosphate detergents, odour control, and hair styling. As these
products generate more revenues, Itaconix expects to identify more
opportunities for additional new products within its itaconate
chemistry platform.
Progress in 2018
The need in 2018 was to rebalance the Group's research and
commercial activities to focus on revenue growth in its two core
markets, homecare and personal care, with the goal of reducing cash
use and reaching profitability sooner. Major rebalancing goals were
achieved by consolidating our major activities into our U.S.
operations and securing global partners to scale demand for our
core products.
In conjunction with the consolidation and reduction in our cost
base by over GBP1m per annum, the Group raised GBP3.3m in net
proceeds from a placing completed in August 2018.
As detailed in the Chief Executive Officer's Statement, the
Group entered 2019 with a strong cash position to grow revenues and
improve profitability with a full complement of marketing partners
for its core products.
Board Changes
There were significant changes to the Executive Team and Board
of Directors in 2018.
John R. Shaw, President of Itaconix Corporation, was also
appointed as Chief Executive Officer and a Director of Itaconix
plc.
James Barber moved from Independent Non-Executive Director to
Non-Executive Chairman in December 2018.
John I. Snow III was appointed as an Independent Non-Executive
Director and Chairman of the Audit Committee in October 2018.
Bryan Dobson moved from Non-Executive Chairman to Independent
Non-Executive Director in August 2018.
Kevin Matthews moved from Chief Executive Officer to Executive
Chairman in August 2018, and then stepped off the Board in December
2018.
Robin Cridland resigned as Chief Financial Officer in August
2018.
Julian Heslop stepped down as a Non-Executive Independent
Director and Chairman of the Audit Committee in October 2018.
Michael Norris was appointed Interim Chief Financial Officer in
August 2018.
Subsequent to 2018, Mike Townend stepped down as a Non-Executive
Director in May 2019.
Financial Review
Results and Dividends
The Group results are stated in the Consolidated Income
Statement and are reviewed below. The Directors do not recommend
the payment of a dividend (2017: Nil).
Financial Performance
Revenue
Total revenues for the 12-month period ended 31 December 2018
were GBP0.66m, representing a 20.0% increase over 2017 revenues of
GBP0.55m. Revenue from the sale of products grew 12.9% in 2018 to
GBP0.61m from GBP0.54m in 2017, with the balance of revenue derived
from collaborative agreements. Revenues grew primarily from
increased demand for the Group's detergent and personal care
products.
Gross Profit and Loss after Tax
The gross profit fell from GBP0.22m in 2017 to GBP0.11m in 2018
primarily as a result of the scaling of capacity at the New
Hampshire, USA operations. A greater portion of overhead costs were
classified as production expenses in 2018 rather than development
expenses related to the construction of the new production line in
2017. Gross profit margins are expected to improve as these
overhead costs are absorbed through increased capacity utilization
from future anticipated business.
The Operating loss before exceptional items decreased from
GBP5.2m 2017 to GBP4.1m for 2018, significantly assisted by
administrative expenses declining from GBP5.5m in 2017 to GBP4.3m
in 2018. This 22% decrease derived mainly from the consolidation of
research and administrative activities into the New Hampshire, USA
operations.
Costs and Available Cash
The Group had net cash outflow from operations of GBP4.85m,
partially offset by net proceeds from an issue of shares of
GBP3.3m, giving an overall net cash outflow of GBP1.5m. Net cash
balances as at 31 December 2018 were GBP2.1m. Furthermore, while
our restructuring programme has reduced operating costs by over
GBP2m per annum, the Group continues to have net cash outflows from
operations. Subsequent to the year end, the Group received a
GBP0.3m R&D tax credit refund and GBP0.24m from the sale of its
minority interest in Alkalon A/S.
Revaluation of Deferred Consideration
As a result of revaluing deferred consideration with respect to
the acquisition of Itaconix Corporation in 2016, there is an
exceptional non-cash expense of GBP2.2m (excluding foreign
exchange), which partially offsets the GBP2.5m exceptional income
in 2017 reflecting a change in assumptions and terms of the
deferred consideration.
Organizational Restructuring
In 2018, there was an exceptional charge of GBP0.89m in relation
to organizational restructuring for the consolidation of the
Group's research and administration into its New Hampshire, USA
operations.
Financial Reporting
In the financial year commencing 1 January 2018 the Group
applied two new accounting standards.
IFRS 9 "Financial Instruments"
IFRS 9 has replaced IAS 39 Financial Instruments: Recognition
and Measurement, and has had an effect on the Group in the
following areas:
-- The impairment provision on financial assets measured at
amortised cost (such as trade and other receivables) has been
calculated in accordance with IFRS 9's expected credit loss model,
which differs from the incurred loss model previously required by
IAS 39.
-- Loans to subsidiaries measured at amortised cost have been
calculated in accordance with IFRS 9's expected credit loss model.
These loans were considered to be credit-impaired at the date of
initial adoption of the new standard. The directors have considered
cash flows that may be generated from the orderly sale of the
underlying business in order to establish the assessment of
lifetime expected credit losses at initial adoption and at year
end.
-- There were no material changes resulting from the adoption of IFRS 9.
IFRS 15 "Revenue from Contracts with Customers"
IFRS 15 has replaced IAS 18 Revenue and IAS 11 Construction
Contracts as well as various Interpretations previously issued by
the IFRS Interpretations Committee.
(a) Sale of goods
Purchase orders with customers in respect of the sale of
polymers (GBP0.61m) continue to be recognised when goods are
delivered to the customer, and as such control of the asset is
transferred to the customer. IFRS 15 has therefore had no impact on
this revenue stream.
(b) Collaborative research
Contracts with customers in which collaborative research
(GBP0.05m) on development stage products are completed are
recognized in agreement with milestones as identified in the
contractual agreement. IFRS 15 has therefore had no impact on this
revenue stream.
Key Performance Indicators (KPI's)
The Group considers its' three key performance indicators to
be:
-- Revenue
-- Profits before interest, tax, & non-cash expenses
-- Cash
The Directors consider that revenue and profits are KPI's in
measuring Group performance. The Group seeks to commercialise its
existing and new technologies, and generate revenues from a growing
number of commercial agreements with users of the products. The
performance of the group is set out in the Chief Executive
Officer's Report.
The Directors believe that a further important performance
measure is the Group's rate of cash expenditure and its effect on
Group cash resources. Net cash outflows for the period to 31
December 2018 were GBP1.5m (2017: GBP5.2m). Further details of cash
flows in 2018 (and 2017) are set out in the Group's Consolidated
Cash Flow Statement.
Going Concern
Analysis of Itaconix's going concern position is detailed in
Note 2.
Shareholdings and Earnings per Share
Itaconix had 269,130,071 shares in issue as at 31 December 2018.
The undiluted weighted average number of shares for the period to
31 December 2018 was 157,492,765. The difference in the two numbers
is the result of the issuance of new shares in August 2018. The
undiluted weighted average number of shares was used to calculate
the earnings per share.
Principal Risks and Uncertainties
Commercialisation Activities
Ultimately, it is uncertain whether our range of Itaconix
products will be purchased in sufficient quantity for the Group to
be successful in the commercial market. Progress in 2018 has been
made to address costs whilst looking to fill unused capacity
through developing existing and new commercial partnerships.
Management of risk: The Group has sought to manage this risk by
partnering with market leaders for the worldwide promotion of our
leading products, the appointment of a new Chief Executive Officer,
and the reorganization of its research and administrative
activities.
Dependence on Key Personnel
The Group depends on its ability to attract and retain a limited
number of highly qualified managerial and scientific personnel, the
competition for whom is intense. While the Group has entered into
conventional employment arrangements with key personnel aimed at
securing their services for minimum terms, their retention cannot
be guaranteed.
Management of risk: The Group has a share incentive agreement,
and service contracts in place for John R. Shaw as Chief Executive
Officer and Dr. Yvon Durant as Chief Technology Officer. In
addition, the Group is seeking shareholder approval at the
forthcoming AGM for an Equity Incentive Plan for potential share
option grants to other key personnel at its New Hampshire, US
operations.
Customer Retention
The ability to retain key customers is critical to maintaining
revenue streams. The loss of key customers could adversely impact
business results.
Management of risk: Acceptance of our products in our customers'
end-product formulations is closely monitored and managed. Our
customer service includes regular engagement on the performance of
both our products and the end-products to ensure our ingredients
are delivering the desired value to our customers and
end-users.
Regulatory and Legislation
Regulatory bans on the use of phosphates as ingredients in
detergents have transformed the consumer detergent markets in
Europe and North America over the last ten years. Phosphates are
known to enter waterways through detergent effluent and act as a
nutrient for algae growth that subsequently cuts oxygen levels in
water and harms aquatic life. We believe that phosphates are likely
to be phased out in other jurisdictions around the world over time.
Itaconix polymers can act as effective replacements for phosphates
in detergent formulations and are used in numerous detergent
products in North America and Europe for this purpose.
Management of risk: The Group closely monitors regulatory
developments in the use of ingredients in consumer and industrial
products to assure compliance and find new revenue potential for
Itaconix polymers. Further, the Group regularly assesses the
relative performance and cost efficacy of Itaconix polymers to
current and emerging phosphate replacements to identify revenue
risks and opportunities.
Competition and Technology
The production and use of Itaconix polymers are subject to
technological change over time. There can be no assurance that
developments by others will not render the Group's product
offerings and research activities obsolete or otherwise
uncompetitive.
Management of risk: The Group employs experienced and
highly-trained polymer chemists to develop and protect the Group's
intellectual property. These efforts include continuous work on the
performance and cost advantages of Itaconix polymers. In addition,
the staff monitors technologies and patents through publications,
scientific conferences, and collaborations with other organisations
to identify new risks and opportunities.
Liquidity Risk
Itaconix seeks to manage financial risk by ensuring adequate
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably. Short-term flexibility is achieved by
holding significant cash balances in Itaconix's main operational
currencies, notably UK Sterling and US Dollars.
Credit Risk
The principal credit risk for Itaconix arises from its trade
receivables. To manage credit risk, new customers are subject to
credit review and all customer accounts are regularly reviewed for
debt ageing and collection history. As at 31 December 2018, there
were no credit risk balances.
Foreign Exchange Risk
Itaconix has operations in the UK and US, and trades with
customers internationally. Revenue and costs are exposed to
variations in exchange rates and therefore reported losses.
Although there is some natural hedging of transactional foreign
exchange risk, Itaconix remains subject to translation exchange
risk.
Government Risk
US trade tariffs with China have caused increases to certain raw
material costs, and may continue to create volatility. These
increases have not caused any major issues with profitability to
date. Itaconix is assessing alternative supply channels, and is
prepared to pass cost increases through to customers if needed. The
resolution or lack of resolution of Brexit has potential risks for
a macroeconomic downturn in the UK and contagion more widely to
other global economies. Itaconix has its main operations in the US,
generates a small percentage of revenues in the UK, and partners
with global companies. As such we do not currently anticipate a
material impact of Brexit on the business.
James Barber John R. Shaw
Chairman Chief Executive Officer
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2018
2018 2017
Notes GBP'000 GBP'000
---------------------------------------------------- ----- ------- --------
Continuing operations
Revenue 3 660 553
Cost of sales (555) (332)
---------------------------------------------------- ----- ------- --------
Gross profit 105 221
Other operating income 96 112
Administrative expenses (4,310) (5,507)
---------------------------------------------------- ----- ------- --------
Group operating loss before exceptional
items (4,109) (5,174)
Exceptional (expense) income on revaluation
of contingent consideration (2,489) 2,511
Exceptional expense on organizational restructuring (891) -
Exceptional expense on impairment of intangible
assets - (8,992)
Finance income 3 1
Share of profit (loss) of associate 90 (214)
---------------------------------------------------- ----- ------- --------
Operating Loss before tax from continuing
operations (7,396) (11,868)
---------------------------------------------------- ----- ------- --------
Release of previously recognised deferred
tax liability - 1,229
Taxation credit 140 465
---------------------------------------------------- ----- ------- --------
Loss for the year from continuing operations (7,256) (10,174)
Profit after tax for the year from discontinued
operations - 33
---------------------------------------------------- ----- ------- --------
Loss for the year (7,256) (10,141)
---------------------------------------------------- ----- ------- --------
Basic loss per share 4 (4.6)p (12.9)p
---------------------------------------------------- ----- ------- --------
Diluted loss per share 4 (4.6)p (12.9)p
---------------------------------------------------- ----- ------- --------
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
--------------------------------- ---- ------- ---------
Loss for the year (7,256) (10,141)
Items that will be reclassified
subsequently to profit or loss
Exchange (losses) in translation
of foreign operations (357) (543)
--------------------------------------- ------- ---------
Total comprehensive loss for
the year, net of tax (7,613) (10,684))
--------------------------------------- ------- ---------
Attributable to:
Equity holders of parent (7,613) (10,684)
--------------------------------------- ------- ---------
CONSOLIDATED BALANCE SHEET
At 31 December 2018
2018 2017
GBP'000 GBP'000
-------------------------------------- -------- --------
Non-current assets
Property, plant and equipment 719 980
Trade and other receivables - -
Investment in subsidiary undertakings - -
Investment in associate undertakings 131 -
--------------------------------------- -------- --------
850 980
-------------------------------------- -------- --------
Current assets
Inventories 303 271
Trade and other receivables 711 706
Cash and cash equivalents 2,083 3,606
--------------------------------------- -------- --------
3,097 4,583
-------------------------------------- -------- --------
Total assets 3,947 5,563
--------------------------------------- -------- --------
Financed by
Equity shareholders' funds
Equity share capital 2,686 787
Equity share premium 30,301 28,603
Own shares reserve (3) (4)
Merger reserve 20,361 20,361
Share based payment reserve 6,632 6,404
Foreign translation reserve 539 896
Retained earnings (60,333) (53,077)
--------------------------------------- -------- --------
Total equity 183 3,970
--------------------------------------- -------- --------
Non-current liabilities
Contingent consideration 3,052 607
Current liabilities
Trade and other payables 712 986
--------------------------------------- -------- --------
Total liabilities 3,764 1,593
--------------------------------------- -------- --------
Total equity and liabilities 3,947 5,563
--------------------------------------- -------- --------
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
At 31 December 2018
Share
Equity Equity based Foreign
share share Own shares Merger payment translation Retained
capital premium reserve reserve reserve reserve deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- ---------- -------- -------- ------------ -------- --------
At 1 January 2017 787 28,588 (5) 20,361 6,220 1,439 (42,936) 14,454
Loss for the year - - - - - - (10,141) (10,141)
Exchange differences
on translation of foreign
operations - - - - - (543) - (543)
Exercise of share options - 15 1 - - - - 16
Share based payments - - - - 184 - - 184
--------------------------- -------- -------- ---------- -------- -------- ------------ -------- --------
At 31 December 2017 787 28,603 (4) 20,361 6,404 896 (53,077) 3,970
Loss for the year - - - - - - (7,256) (7,256)
Share issuance, net
of expenses 1,899 1,698 - - - - - 3,597
Exchange differences
on translation of foreign
operations - - - - - (357) - (357)
Exercise of share options - _ 1 - - - - 1
Share based payments - - - - 228 - - 228
--------------------------- -------- -------- ---------- -------- -------- ------------ -------- --------
At 31 December 2018 2,686 30,301 (3) 20,361 6,632 539 (60,333) 183
--------------------------- -------- -------- ---------- -------- -------- ------------ -------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2018
2018 2017
GBP'000 GBP'000
------------------------------------------- ------- -------
Net cash outflow from operating activities (4,850) (4,659)
-------------------------------------------- ------- -------
Interest received - 1
Proceeds from property, plant and
equipment 56 -
Purchase of property, plant and equipment - (436)
Investment in associate undertaking (26) (60)
Cash loaned to subsidiary undertakings - -
Cash loaned to associate undertaking - (44)
-------------------------------------------- ------- -------
Net cash inflow / (outflow) from investing
activities 30 (540)
-------------------------------------------- ------- -------
Cash received from issue of shares 3,497 16
Transactions costs paid on the issue
of shares (200) -
-------------------------------------------- ------- -------
Net cash inflow from financing activities 3,297 16
-------------------------------------------- ------- -------
Net (outflow) in cash and cash equivalents (1,523) (5,183)
Cash and cash equivalents at beginning
of year 3,606 8,789
-------------------------------------------- ------- -------
Cash and cash equivalents at end of
year 2,083 3,606
-------------------------------------------- ------- -------
NOTES TO THE FINANCIAL INFORMATION
1. Accounting Basis
The financial information set out in this document does not
constitute the Group's statutory accounts for the years ended 31
December 2017 or 31 December 2018. Statutory accounts for the years
ended 31 December 2017 and 31 December 2018, which were approved by
the directors on 26 June 2019, have been reported on by the
Independent Auditors. The Independent Auditor's report on the
Annual Report and Financial Statements for years ended 31 December
2017 and 31 December 2018 were unqualified, did draw attention to a
matter by way of emphasis, being going concern and did not contain
a statement under 498(2) or 498(3) of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2018 will
be delivered to the Registrar of Companies in due course and will
be posted to shareholders shortly, and thereafter will be available
from the Group's registered office at Fieldfisher Riverbank House,
2 Swan Lane, London, United Kingdom, EC4R 3TT and from the Group's
website http://itaconix.com/investors/
The financial information set out in these results has been
prepared using the recognition and measurement principles of
International Accounting Standards, and International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively Adopted IFRSs). The accounting
policies adopted in these results have been consistently applied to
all the years presented and are consistent with the policies used
in the preparation of the financial statements for the year ended
31 December 2017, except for those that relate to new standards and
interpretations effective for the first time for periods beginning
on (or after) 1 January 2018. New standards impacting the Group
that have be adopted in the annual financial statements for the
year ended 31 December 2018 are IFRS 9 Financial Instruments and
IFRS 15 Revenue from contracts with customers. Other new standards,
amendments and interpretations to existing standards, which have
been adopted by the Group have not been listed, since they have no
material impact on the financial statements.
2. Going Concern
The financial statements have been prepared on a going concern
basis. The directors have reviewed the Group's going concern
position taking account its current business activities, budgeted
performance and the factors likely to affect its future
development, set out in the Annual Report, and including the
Group's objectives, policies and processes for managing its working
capital, its financial risk management objectives and its exposure
to credit and liquidity risks.
The Group made a loss for the year of GBP7,256k, had Net Current
Assets at the period end of GBP2,385k and a Net Cash Outflow from
Operating Activities of GBP4,850k. Primarily, the Group meets its
day to day working capital requirements through existing cash
resources and had on hand cash, cash equivalents and short term
deposits at the balance sheet date of GBP2,083k (2017:
GBP3,606k).
During the year, the Group reduced its expenditures,
restructured its operations and successfully raised net funding of
GBP3,296k.
The Directors have reviewed the Group's cash flow forecasts
covering a period of at least 12 months from the date of approval
of the financial statements, which foresee that the Group will be
able to meet its liabilities as they fall due. However, the success
of the business is dependent on customer adoption of our products
in order to increase revenue and profits growth. Inability to
deliver this could result in the requirement to raise additional
funds.
The Directors have concluded that the circumstances set forth
above represent a material uncertainty, which may cast significant
doubt about the Group's ability to continue as a going concern.
However, they believe that taken, as a whole, the factors described
above enable the Group to continue as a going concern for the
foreseeable future. The financial statements do not include the
adjustments that would be required if the Group were unable to
continue as a going concern.
3. Revenue and Segment Information
Revenue recognised in the Group income statement is analysed as
follows:
2018 2017
GBP'000 GBP'000
Sale of goods 660 553
------- -------
660 553
------- -------
Geographical information
2018 2017
GBP'000 GBP'000
Europe 176 249
North America 477 296
Asia 7 8
------- -------
660 553
------- -------
The revenue information is based on the location
of the customer.
Segmental information
The revenue information above is derived from the continuing
operations and excludes the Nicotine Gum segment that was disposed
of during the previous year.
The Group therefore has one segment - the Specialty Chemicals
segment which designs and manufactures proprietary specialty
polymers to meet customers' needs in the home care and industrial
markets and in personal care. This segment makes up the continuing
operations above.
Net assets of the Group are attributable to geographical
location as at 31 December 2018.
2018 2017
GBP'000 GBP'000
Europe 39 2,717
North America 124 1,253
Asia - -
------- -------
183 3,970
------- -------
4. Loss per Share
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year.
Continuing Discontinued
operations operations Total
2018 2017 2017 2017
Loss GBP'000 GBP'000 GBP'000 GBP'000
Loss for the purposes of
basic and diluted loss
per share (GBP'000) (7,256) (10,174) 33 (10,141)
------- ----------- ------------ --------
Weighted average number
of ordinary shares for
the purposes of basic and
diluted loss per share
('000) 157,494 78,715 78,715 78,715
------- ----------- ------------ --------
Basic and diluted loss
per share (4.6p) (12.9p) 0.0p (12.9p)
------- ----------- ------------ --------
The loss for the period and the weighted average number of
ordinary shares for calculating the diluted earnings per share for
the period to 31 December 2018 are identical to those used for the
basic earnings per share. This is because the outstanding share
options would have the effect of reducing the loss per ordinary
share and would therefore not be dilutive.
5. Cautionary Statement
Itaconix has made forward-looking statements in this press
release, including statements about the market for and benefits of
its products and services; financial results; product development
plans; the potential benefits of business relationships with third
parties and business strategies. These statements about future
events are subject to risks and uncertainties that could cause
Itaconix's actual results to differ materially from those that
might be inferred from the forward-looking statements, Itaxonix can
make no assurance that any forward-looking statements will prove
correct.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UNOARKRANUUR
(END) Dow Jones Newswires
June 27, 2019 02:01 ET (06:01 GMT)
Itaconix (LSE:ITX)
Historical Stock Chart
From Apr 2024 to May 2024
Itaconix (LSE:ITX)
Historical Stock Chart
From May 2023 to May 2024