TIDMXSG
RNS Number : 8965R
Xeros Technology Group plc
27 September 2017
Xeros Technology Group plc
Interim results
Xeros Technology Group plc (AIM: XSG, 'the Group', 'Xeros'), the
developer and provider of patented polymer based technologies with
multiple commercial applications, today publishes its results for
the six months to 30 June 2017.
Group highlights
-- Significant progress towards commercialising
our technology across all targeted applications
-- Developing relationships with significant
market incumbents to license technology
for scale commercialisation: IP-rich, capital-light
models
-- Working capital improvement through partnership
with Hitachi Capital to purchase portion
of existing lease portfolio and provision
of ongoing lease financing in US on premise
laundry
-- Group income GBP1.1m (2016: GBP0.8m). Continued
investment in application portfolio and
patented technologies resulting in adjusted
EBITDA(1) loss of GBP13.2m (2016: loss GBP7.4m).
Group cash of GBP16.2m at 30 June 2017
Cleaning Technologies
-- Total installed estate of commercial machines
increased by 36% to 378 machines (30 June
2016: 278)
-- Launch of smaller 16kg commercial washing
machine well received
-- Continued internationalisation of Forward
Channel Partners network providing access
to new markets
-- Plan to demonstrate domestic machine prototype
design at 2018 Consumer Electronics Show
in January
-- Post-period end acquisition of MarKen PPE
Restoration provides platform for rapid
growth in high-value high-performance workwear
market
-- Post-period end, first Symphony Project
development agreement for trialling Xeros'
technology with major global machine manufacturer
Tanning Technologies
-- First commercial tanning contract signed
with leading European tannery Wollsdorf
Leder - 10 year agreement to use Xeros'
technology in its retanning and dyeing operations
-- Successful trial programmes continuing in
four additional European tanneries with
three further tanneries to commence trials
in 2017.
Textile Technologies
-- Significant progress in trials to reduce
water, chemistry and effluent
-- Core patent filings aiding future protection
(1) Adjusted EBITDA is defined as loss on ordinary activities
before interest, tax, share-based payment expense, non-operating
exceptional costs, depreciation and amortisation
Mark Nichols, Chief Executive of Xeros, said:
"We have continued to make sound progress on the implementation
of our strategy to establish our unique polymer technology in three
world-scale industries: cleaning, tanning and textiles.
"We are developing IP-rich, capital-light business models to
licence our technology to world-leading market incumbents that will
provide Xeros with stable income streams with long term
visibility.
"In Cleaning, we are beginning to make allies of former
competitors through our Symphony Project and have developed what we
believe to be a breakthrough in the design of domestic washing
machines incorporating Xeros technology.
"In Tanning, we have signed our first commercial tanning
contract with Wollsdorf - a key milestone for this business and an
example of the IP-rich, capital-light model we are pursuing.
"In Textiles, we are also making good progress in developing our
technology for use in this sector with a number of key patent
applications being filed to protect our IP.
"We remain well positioned to deliver further progress on
commercialisation across all targeted applications in the current
year and into 2018."
Enquiries:
Xeros Technology Group plc Tel: 0114 321
Mark Nichols, Chief Executive 6328
Officer
Paul Denney, Chief Financial Officer
Jefferies International Limited Tel: 020 7029
(Nominated Adviser and Joint Broker) 8000
Simon Hardy / Will Soutar
Berenberg (Joint Broker) Tel: 020 3207
Chris Bowman / Ben Wright / Amritha 7800
Murali
Instinctif Partners Tel: 020 7457
Adrian Duffield / Helen Tarbet 2020
/ James Gray
Notes to Editors
Xeros Technology Group plc (LN: XSG) is a platform technology
company that is reinventing water intensive industrial and consumer
processes by reducing water and chemistry usage with its polymer
technologies. Its patented technologies have the capacity to
provide material economic, operational and sustainability
improvements that are unattainable with traditional processes. The
Group is currently exploiting its intellectual property in three
areas: Cleaning Technologies, Tanning Technologies and Textile
Technologies. Xeros has a number of agreements in place with such
international organisations as Hilton and Wollsdorf Leder.
For more information, please visit - www.xerostech.com
Operational review
Cleaning Technologies
The Group launched its Symphony Project in April, providing
manufacturers of conventional commercial washing machines with
'open source' access to Xeros' innovative polymer technology, with
a simple means of incorporating its technology at the end of their
production lines. The Group then successfully demonstrated a
working prototype at the Clean Show in early June.
Post-period end, in September, the Group signed its first
Symphony Project development agreement with a leading manufacturer
of commercial washing machines for technical validation and
testing. Following the testing phase, the parties anticipate the
commencement of commercial negotiations. In addition, discussions
are ongoing with a number of other manufacturers with the overall
objective of achieving broad penetration of Xeros' technology
through these existing incumbents and their channels to market.
Under the business model being developed, Xeros and its OEM
partners will share in the significant economic gains that our
technology delivers. We are planning a similar approach with
chemistry suppliers and discussions in this regard are also
ongoing.
In July, the Group signed an agreement to partner with Hitachi
to provide a range of lease financing packages to Xeros' commercial
laundry customers and future customers across its global
operations. The agreement also includes the sale of part of Xeros'
existing lease portfolio.
Hitachi will offer Xeros' customers greater flexibility by
providing a range of lease financing packages that will further
enhance the attractiveness of the Group's commercial laundry
proposition. Over time, the arrangement is expected to reduce the
Group's working capital needs pending migration to the Symphony
model.
In anticipation of the implementation of Symphony Project,
Xeros' own presence in the market place has continued towards an
indirect model whereby our own Forward Channel Partners provide
lifecycle services to customers.
As previously stated, the Group reduced the installation and
commissioning rates in Q4 2016 and Q1 2017 in order to work on
improving commissioning capacity to meet demand. The Group now has
10 Forward Channel Partners who are qualified to sell, commission
and service installations. We continue to see healthy demand for
Xeros machines, both directly and through our Forward Channel
Partners.
In the first six months of the year Forward Channel Partners
commissioned over half of all commissioned machines. 30% of all
machines commissioned were Xeros' increasingly popular 16kg
machine. The demand for the latter has proved to be significant and
has temporarily outstripped the Group's short term supply capacity,
which is being increased so as to be able to take and deliver
orders.
Total commercial washing machine installations and letters of
agreement with a high probability of becoming binding contracts
totalled 460 at 30 June 2017, (30 June 2016: 304).
The first of our machines supplied to our Forward Channel
Partner, Richard Jay Pty in Australia, was commissioned in early
September. Xeros has no physical presence in Australia. Similar
arrangements are anticipated in the near term to service Dubai and
Israel with all countries targeted based on water stress and
cost.
Xeros created a new business unit, High Performance Work Wear,
to serve the market for cleaning high performance protective
workwear. Xeros' technology cleans and decontaminates to a level
unachievable with conventional approaches whilst simultaneously
extending garment life. This unit has its own leadership team to
drive growth in this attractive market. The team is currently
developing plans for deploying Xeros' technology both
geographically and sectorally including in fire, military,
transport, mining and petrochemical markets.
In July the Group acquired MarKen PPE Restoration to accelerate
Xeros' penetration of this market and, since the acquisition,
MarKen has signed new contracts worth approximately $175,000per
annum.
In January 2018, Xeros plans to demonstrate its latest
breakthrough in domestic machine design at the Consumer Electronics
Show in Las Vegas. The design offers all OEMs the ability to
provide their customers with washing processes which are cheaper,
make their clothes and fabrics cleaner, last longer and look
better. The prototype machine that will be demonstrated involves a
simple and inexpensive change to conventional machines which
manufacturers can include at the end of their production lines.
Tanning Technologies
In July, the Group signed a 10-year contract with Wollsdorf
Leder in Austria to progressively convert re-tanning processes to
Xeros' technology.
In addition to the contract with Wollsdorf Leder, a further four
European tanneries have completed R&D trials with Xeros and are
now undertaking production scale trials. Results of which thus far
have confirmed the business case assumptions. These trials are due
to complete during the remainder of this year after which the Group
expects a number of them to move to contract stage.
Since the period end, Xeros has been approached by an additional
three European tanneries and trials are expected to start with
these tanneries before the end of the year.
A full commercialistion and deployment team is being established
to support the roll out of the Group's technology for Wollsdorf and
future contracts.
Other developments
During the first six months of the year, the Group expanded its
intellectual property portfolio with a further seven patent family
applications, taking the total to 48. A number of these new patents
address the application of the Group's technology in the Textiles
industry. Xeros is now focussing on scaling up the results achieved
in its Textiles trials to an industrial scale. Indications from
workshop trials are that Xeros' technology can deliver similar
levels of water, chemistry and energy savings to those already
achieved in our other applications.
Current trading & outlook
In the first six months, the Group has achieved a number of key
milestones in its transition from a designer and seller of polymer
technology commercial washing machines towards an IP-rich,
capital-light licenser of polymer-based technologies to multiple
scale industries.
These milestones amply demonstrate the attraction of Xeros to
global companies, whom we expect to become allies in
commercialising and distributing our technologies in the cleaning,
tanning and textile markets, to our mutual benefit.
We are greatly encouraged by the progress made to date in
achieving large-scale commercialisation for our industry-changing
technology. We look forward to making significant further progress
during the rest of this year.
Financial review
Group earned income was generated as follows:
Unaudited
Unaudited Unaudited 17 months
6 months 6 months ended
to to
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Machine sales 532 509 1,540
Service income 495 271 837
Consumable sales 6 - 16
Lease interest income 43 27 73
_____ _ __ ____ _ _____
Total earned income 1,076 807 2,466
Group earned income increased by 33.33% to GBP1,076,000 in the
six months ended 30 June 2017 when compared to the prior period
(2016: GBP807,000).
Notably, service income from the installed base of Commercial
Laundry machines has increased significantly during the six months
ended 30 June 2017, showing growth of 82.6%.
The point at which revenue and costs from machine sales can be
recognised is dependent on the completion of a number of stages.
These include the installation of the machine, commissioning of the
machine, acceptance of the machine by the customer, completion of
utility incentive formalities, where applicable, and then, in the
case of lease sales, finalisation of the lease agreement. The Group
does not recognise revenue and costs from a machine sale until all
of these aspects are complete.
The number of machines installed in the period is as
follows:
17 months
6 months 6 months ended
to to
30 June 30 June 31 December
2017 2016 2016
No. No. No.
Machines sold - revenue and
costs taken to P&L statement 21 29 76
Machines commissioned and
generating service revenue,
but machine sale revenues
and costs not yet recognised 90 15 64
Total Revenue generating
machines 111 44 140
Net machines installed but
not yet commissioned (49) 72 70
Machines installed in the
period 62 116 210
During the period the Group has focused on increasing its
commissioning capacity through the use of Forward Channel Partners
and this has resulted in an increase of 90 machines commissioned in
the six months. The total increase in revenue generating machines
was 111 machines in the six months to 30 June 2017 (30 June 2016:
44). At the start of the period the Group had 104 machines
installed but not yet commissioned and, due to the focus on
increasing commissioning capacity, this number was reduced to 55 at
the end of the period, representing a net reduction of 49 machines
during the period.
As at 30 June 2017 the total installed estate is 378 machines
and has grown by 36% over the year (30 June 2016: 278) and by 20%
in the period (31 December 2016: 316). The number of letters of
agreement with a high probability of becoming binding contracts as
at 30 June 2017 is 82 (30 June 2017: 26) and therefore the total
installed estate and letters of agreement as at 30 June 2017 is 460
(30 June 2016: 304).
As at 30 June 2017 contracted future revenues amount to GBP4.0m
(2016: GBP3.8m) and average contract length is 34 months (2016: 59
months).
Adjusted gross margin reduced to GBP139,000 (13% of revenue)
from GBP160,000 (19.8% of revenue). Sales and service margins
continue to be in line with expectations as the Group continues to
grow its market presence in the US.
The Group has continued to invest in both its R&D programme
and its commercialisation programme. The Group spent GBP2.8m on
R&D including staff and patent costs (2016: GBP2.3m) alongside
the Commercial Laundry working capital, in line with the Board's
expectations. The increase in R&D costs reflects the Group's
continued development of the Textiles applications and further
polymer development activity. As the scope of Xeros'
commercialisation activities has grown during the period headcount
at 30 June 2017 increased to 134 (30 June 2016: 108). Overall, this
has resulted in an Adjusted EBITDA loss of GBP13.2m (2016: loss
GBP7.4m).
During the period Sterling has strengthened against the US$
thereby ensuring that the continuing working capital investment in
the US Cleaning Technologies business is proportionally less
expensive when translated into Sterling, the Group's functional
currency. As at 30 June 2017 the Group had forward contracts to buy
$3.5m US.
The Group reported a loss after tax of GBP15.1m (2016: loss
GBP6.1m). The loss per share was 17.36p (2016: loss 7.18p).
The Group expects cash utilisation to continue to accelerate
over the coming years, as we continue to fund our R&D programme
alongside the roll-out in Commercial Laundry.
The increase in net cash outflow from operations to GBP13.1m
(2016: GBP10.4m) reflects these activities and was in line with the
Board's expectations.
The Group had existing cash resources as at 30 June 2017 of
GBP16.2m (2016: GBP39.4m) and remains debt free.
Consolidated statement of profit or loss and other comprehensive
income
For the six months ended 30 June 2017
Unaudited Unaudited Unaudited
Six months Six months 17 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Note GBP'000 GBP'000 GBP'000
----------------------------------- ----- ----------- ----------- ------------
Earned income 1,076 807 2,466
Less: lease interest income (43) (27) (73)
----------------------------------- ----- ----------- ----------- ------------
Revenue 1,033 780 2,393
Cost of sales (937) (647) (2,103)
_______ _______ _______
Gross profit 96 133 290
----------------------------------- ----- ----------- ----------- ------------
Lease interest income 43 27 73
_______ _______ _______
Adjusted gross margin 139 160 363
----------------------------------- ----- ----------- ----------- ------------
Administrative expenses (14,558) (8,334) (22,640)
Adjusted EBITDA* (13,192) (7,434) (20,659)
Share-based payment expense (997) (654) (1,232)
Non-operating exceptional
costs ** - - (87)
Depreciation of tangible
fixed assets (273) (113) (372)
----------------------------------- ----- ----------- ----------- ------------
Operating loss (14,462) (8,201) (22,350)
Finance income 84 1,153 1,225
Finance expense (762) - -
_______ _______ _______
Loss before taxation (15,140) (7,048) (21,125)
Taxation 3 - 917 886
_______ _______ _______
Loss after tax (15,140) (6,131) (20,239)
_______ _______ _______
Other comprehensive income
Items that are or maybe
reclassified to profit or
loss:
Foreign currency translation
differences - foreign operations 833 (551) (1,720)
_______ _______ _______
Total comprehensive expense
for the period (14,307) (6,682) (21,959)
_______ _______ _______
Loss per ordinary share
Basic and diluted on loss
from continuing operations 5 (17.36)p (7.18)p (25.04)p
_______ _______ _______
(*) Adjusted EBITDA comprises loss on ordinary activities before
interest, tax, share-based payment expense, non-operating
exceptional costs, depreciation and amortisation.
(**) Non-operating exceptional costs are the costs of the
fundraising in November 2015.
Consolidated statement of changes in equity
For the six months ended 30 June 2017
Foreign
currency Retained
Share Share Merger translation earnings
capital premium reserve reserve deficit Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 August 2015 98 28,178 15,443 (22) (22,426) 21,271
----------------------- --------- --------- --------- ------------- ---------- ---------
Loss for the
period - - - - (20,239) (20,239)
Other comprehensive
expense - - - (1,720) - (1,720)
----------------------- --------- --------- --------- ------------- ---------- ---------
Loss and total
comprehensive
expense for the
period - - - (1,720) (20,239) (21,959)
----------------------- --------- --------- --------- ------------- ---------- ---------
Transactions
with Owners recorded
directly in equity:
Issue of shares 27 39,973 - - - 40,000
Exercise of share
options 4 281 - - - 285
Costs of share
issues (2,152) - - - (2,152)
Share based payment
expense - - - - 141 141
----------------------- --------- --------- --------- ------------- ---------- ---------
Total contributions
by and distributions
to owners 31 38,102 - - 141 38,274
----------------------- --------- --------- --------- ------------- ---------- ---------
At 31 December
2016 129 66,280 15,443 (1,742) (41,433) 38,677
----------------------- --------- --------- --------- ------------- ---------- ---------
At 1 January
2016 125 66,017 15,443 (93) (27,898) 53,594
Loss for the
period - - - - (6,131) (6,131)
Other comprehensive
expense - - - (551) - (551)
----------------------- --------- --------- --------- ------------- ---------- ---------
Loss and total
comprehensive
expense for the
period - - - (551) (6,131) (6,682)
----------------------- --------- --------- --------- ------------- ---------- ---------
Transactions
with Owners recorded
directly in equity:
Issue of shares 4 262 - - - 266
Share based payment
expense - - - - 654 654
----------------------- --------- --------- --------- ------------- ---------- ---------
Total contributions
by and distributions
to owners 4 262 - - 654 920
----------------------- --------- --------- --------- ------------- ---------- ---------
At 30 June 2016 129 66,279 15,443 (644) (33,375) 47,832
----------------------- --------- --------- --------- ------------- ---------- ---------
- - -
At 1 January
2017 129 66,280 15,443 (1,742) (41,433) 38,677
Loss for the
period - - - - (15,140) (15,140)
Other comprehensive
income - - - 833 - 833
----------------------- --------- --------- --------- ------------- ---------- ---------
Loss and total
comprehensive
income for the
period - - - 833 (15,140) (14,307)
----------------------- --------- --------- --------- ------------- ---------- ---------
Transactions
with Owners recorded
directly in equity:
Issue of shares 3 410 - - - 413
Share based payment
expense - - - - 997 997
----------------------- --------- --------- --------- ------------- ---------- ---------
Total contributions
by and distributions
to owners 3 410 - - 997 1,410
----------------------- --------- --------- --------- ------------- ---------- ---------
At 30 June 2017 132 66,690 15,443 (909) (55,576) 25,780
----------------------- --------- --------- --------- ------------- ---------- ---------
Consolidated statement of financial position
As at 30 June 2017
Unaudited Unaudited Unaudited
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------ ---------- ---------- ------------
Assets
Non-current assets
Property, plant and
equipment 2,375 889 1,588
Trade and other receivables 1,682 1,295 1,656
------------------------------ ---------- ---------- ------------
4,057 2,184 3,244
------------------------------ ---------- ---------- ------------
Current assets
Inventories 7,281 5,389 7,005
Derivative financial
instruments - 900 705
Trade and other receivables 1,856 1,905 1,830
Current tax asset - 807 -
Investments - bank
deposits 9,983 21,553 9,959
Cash and cash equivalents 6,220 17,870 18,975
------------------------------ ---------- ---------- ------------
25,340 48,424 38,474
------------------------------ ---------- ---------- ------------
Total assets 29,397 50,608 41,718
------------------------------ ---------- ---------- ------------
Liabilities
Non-current liabilities
Deferred tax (39) (22) (39)
Current liabilities
Trade and other payables (3,521) (2,754) (3,002)
Derivative financial
instruments (57) - -
(3,578) (2,754) (3,002)
------------------------------ ---------- ---------- ------------
Total liabilities (3,617) (2,776) (3,041)
------------------------------ ---------- ---------- ------------
Net assets 25,780 47,832 38,677
------------------------------ ---------- ---------- ------------
Equity
Share capital 132 129 129
Share premium 66,690 66,279 66,280
Merger reserve 15,443 15,443 15,443
Foreign currency translation
reserve (909) (644) (1,742)
Accumulated losses (55,576) (33,375) (41,433)
------------------------------ ---------- ---------- ------------
Total equity 25,780 47,832 38,677
------------------------------ ---------- ---------- ------------
Consolidated statement of cash flows
For the six months ended 30 June 2017
Unaudited Unaudited Unaudited
6 months to 6 months to 17 months to
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
--------------------------------------------------------------------------- ------------ ------------ -------------
Operating activities
Loss before tax (15,140) (7,048) (21,125)
Adjustment for non-cash items:
Depreciation of property, plant and equipment 273 113 372
Share based payment 997 654 1,232
Increase in inventories (1,647) (302) (3,957)
Increase in trade and other receivables (171) (1,395) (2,424)
Increase/(decrease) in trade and other payables 1,890 (1,351) (663)
Finance income (84) (1,153) (1,225)
Finance expense 762 - -
Cash used in operations (13,120) (10,482) (27,790)
Taxes refunded - 110 1,380
Net cash outflow used in operations (13,120) (10,372) (26,410)
--------------------------------------------------------------------------- ------------ ------------ -------------
Investing activities
Finance income 85 253 520
Cash withdrawn from/(placed on) deposits with more than 3 months maturity (24) 9,992 (8,420)
Purchases of property, plant and equipment (69) (271) (811)
--------------------------------------------------------------------------- ------------ ------------ -------------
Net cash (outflow)/inflow from investing activities (8) 9,974 (8,711)
--------------------------------------------------------------------------- ------------ ------------ -------------
Financing activities
Proceeds from issue of share capital, net of costs 413 266 38,133
Net cash inflow from financing activities 413 266 38,133
--------------------------------------------------------------------------- ------------ ------------ -------------
(Decrease)/increase in cash and cash equivalents (12,715) (132) 3,012
Cash and cash equivalents at start of year 18,975 17,961 15,913
Effect of exchange rate fluctuations on cash held (40) 41 50
Cash and cash equivalents at end of the period 6,220 17,870 18,975
--------------------------------------------------------------------------- ------------ ------------ -------------
Notes to the financial statements
For the six months ended 30 June 2017
1. General information
The principal activity of Xeros Technology Group plc ("the
Company") and its subsidiary companies (together "Xeros" or the
"Group") is the development and commercialisation of patented
polymer based technologies with multiple potential commercial
applications.
Xeros Technology Group plc is domiciled in the UK and
incorporated in England and Wales (registered number 8684474), and
its registered office address is Unit 2 Evolution, Advanced
Manufacturing Park, Whittle Way, Catcliffe, Rotherham, S60 5BL. The
Company's principal activity is that of a holding company.
The interim financial information was approved for issue on 26
September 2017.
2. Basis of preparation
The interim financial information has been prepared under the
historical cost convention and in accordance with the recognition
and measurement requirements of International Financial Reporting
Standards ("IFRS") as adopted by the European Union, IFRIC
interpretations, and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The interim financial information has been prepared on a going
concern basis and is presented in Sterling to the nearest
GBP'000.
The accounting policies used in the financial information are
consistent with those used in the prior year. The following adopted
IFRSs have been issued but have not been applied by the Group in
these financial statements. Their adoption is not expected to have
a material effect on the financial statements unless otherwise
indicated:
-- IFRS 2 Share-based Payment Amendments to
clarify the classification and measurement
of share-based payment transactions effective
1 January 2018
-- IFRS 9 Financial Instruments effective 1
January 2018
-- IFRS 15 Revenue from Contracts with Customers
effective 1 January 2018
-- IFRS 16 Leases effective 1 January 2019
-- IFRS 17 Insurance Contracts effective 1
January 2021
-- IAS 1 Presentation of Financial Statements
Amendments as result of the Disclosure initiative
effective 1 January 2017
-- IAS 7 Statement of Cash Flows Amendments
as result of the Disclosure initiative effective
1 January 2017
-- IAS 12 Income Taxes Amendments regarding
the recognition of deferred tax assets for
unrealised losses effective 1 January 2017
-- IAS 40 Investment Property Amendments to
clarify transfers or property to, or from,
investment property effective 1 January
2018
Further IFRS standards or interpretations may be issued that
could apply to the Group's financial statements for the year ending
31 December 2017. If any such amendments, new standards or
interpretations are issued then these may require the financial
information provided in this report to be changed. The Group will
continue to review its accounting policies in the light of emerging
industry consensus on the practical application of IFRS.
The preparation of financial information in conformity with the
recognition and measurement requirements of IFRS requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual events ultimately may differ from those
estimates.
The interim financial information does not include all financial
risk management information and disclosures required in annual
financial statements. There have been no significant changes in any
risk or risk management policies since 31 December 2016. The
principal risks and uncertainties are largely unchanged and are as
disclosed in the Annual Report for the 17-month period ended 31
December 2016.
The interim financial information for the six months ended 30
June 2017 and for the six months ended 30 June 2016 do not
constitute statutory financial statements as defined in Section 434
of the Companies Act 2006 and is unaudited. The comparative figures
for the 17-month period ended 31 December 2016 are not the Group's
consolidated statutory accounts for that financial year. Those
accounts have been reported on by the Group's auditor and delivered
to the Registrar of Companies. The report of the auditor was (i)
unqualified, (ii) did not include a reference to any matters to
which the auditor drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement
under Sections 498(2) or 498(3) of the Companies Act 2006.
3. Taxation
Unaudited Unaudited Unaudited
6 months 6 months Period
to to ended
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Current tax:
Foreign taxes paid - 6 20
R & D tax credits - (923) (923)
Deferred tax charge - - 17
Total tax credit - (917) (886)
-------------------- --------- --------- -----------
The Group has not recognised a deferred tax asset in the
consolidated statement of financial position in respect of
accumulate trading losses due to the uncertainty in the timing of
their crystallisation.
The Group accounts for Research and Development Tax Credits
where there is certainty regarding HMRC approval.
4. Segmental analysis
The Group currently has one operating segment. Revenue and
losses arising from that segment are the same as presented on the
face of the consolidated statement of profit or loss and other
comprehensive income.
5. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders by the weighted average number of
shares in issue during the period. The Group was loss-making for
the 6-month periods ended 30 June 2017 and 30 June 2016 and also
for the 17-month period ended 31 December 2016. Therefore, the
dilutive effect of share options has not been taken account of in
the calculation of diluted earnings per share, since this would
decrease the loss per share reported for each of the periods
reported.
The calculation of basic and diluted loss per ordinary share is
based on the loss for the period, as set out below.
Loss Weighted Loss
for the average per
number
period of share
shares
GBP'000 in issue (pence)
Six months ended 30 June
2017 (15,140) 87,218,501 (17.36)p
Six months ended 30 June
2016 (6,131) 85,377,365 (7.18)p
17 months ended 31 December
2016 (20,239) 80,839,504 (25.04)p
---------------------------- -------- ---------- --------
The weighted average number of shares in issue throughout the
period is as follows:
6 months 6 months 17 months
to to to
30 June 30 June 31 December
2017 2016 2016
Number Number Number
of of of
shares shares shares
Issued ordinary shares
at beginning of period 86,021,911 83,403,990 65,504,879
Effect of shares issued
for cash during the period 1,192,590 1,973,375 15,334,625
Weighted average number
of shares for the period 87,218,501 85,377,365 80,839,504
---------------------------- ---------- ---------- -----------
6. Details of events occurring after the reporting period
On the 11 July 2017, the Group announced the acquisition of
MarKen PPE Restoration which provides personal protection equipment
cleaning, inspection and repair services from a facility in Nevada,
USA. MarKen was acquired for an initial cash consideration of
US$750,000 with a further contingent cash consideration of up to
US$250,000, subject to certain growth targets.
For the year ended 30 April 2017, MarKen generated revenues of
US$686,000, generating an EBITDA loss of US$72,000. As at 30 April
2017 gross assets were US$89,000. Management believe that as a
result of Xeros' ownership the MarKen business will be profitable
going forwards.
7. Seasonality
The Group experiences no material variations due to
seasonality.
8. Availability of interim statement
This interim statement will be available on Xeros' website at
www.xerostech.com.
Forward-looking statements
This announcement may include certain forward-looking
statements, beliefs or opinions, including statements with respect
to Xeros' business, financial condition and results of operations.
These forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believes",
"estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology. These statements are made by the
Xeros Directors in good faith based on the information available to
them at the date of this announcement and reflect the Xeros
Directors' beliefs and expectations. By their nature these
statements involve risk and uncertainty because they relate to
events and depend on circumstances that may or may not occur in the
future. A number of factors could cause actual results and
developments to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
developments in the global economy, changes in government policies,
spending and procurement methodologies, and failure in health,
safety or environmental policies.
No representation or warranty is made that any of these
statements or forecasts will come to pass or that any forecast
results will be achieved. Forward-looking statements speak only as
at the date of this announcement and Xeros and its advisers
expressly disclaim any obligations or undertaking to release any
update of, or revisions to, any forward-looking statements in this
announcement. No statement in the announcement is intended to be,
or intended to be construed as, a profit forecast or to be
interpreted to mean that earnings per Xeros share for the current
or future financial years will necessarily match or exceed the
historical earnings. As a result, you are cautioned not to place
any undue reliance on such forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFLDAAIRFID
(END) Dow Jones Newswires
September 27, 2017 02:00 ET (06:00 GMT)
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