Directa Plus PLC – Final Results

Directa Plus PLC – Final Results

Directa Plus (AIM: DCTA), a producer and supplier of graphene-based products for use in consumer and industrial markets, announces its final results for the 12 months ended 31 December 2019.  The Company’s focus remains on developing and delivering products and services in the Environmental Remediation and Textile industrial verticals, whilst continuing to progress graphene enhancements to products in other areas where Directa Plus can identify commercial opportunities.

Summary

Financial highlights

·   Product sales and service revenue increased to €2.63m (2018: €2.25m)

·   Total income (including grants) increased to €2.81m (2018: €2.50m)

·   Loss after tax €3.40m (2018: €3.96m), in line with market expectations

·   Successful placing to raise €8.52m (£7.41m) in October

·   Acquisition of a 51 per cent majority holding in Setcar S.A. completed in November and has been earnings accretive

·   Cash and cash equivalents at year end of €10.91m (2018: €5.50m), providing the Group with the financial capacity to support our growth ambitions and to withstand at least until the end of 2021 the uncertainties and challenges created by the COVID-19 pandemic

Proven, successful strategy maintained

·   Target existing products and markets that can be significantly improved with the addition of Directa Plus products

·   Working with established manufacturers and vendors worldwide, we are able to gain market insight and access, further develop our technologies, bring products to market faster, and capture maximum value from the supply chain by providing expertise, know-how and services as well as materials

·   Focus on those vertical markets in which the Company can gain strong traction – textiles, environmental remediation, elastomers and composites

COVID-19

·   The Company has been concerned first and foremost with the health and wellbeing of our employees as well as those of our industrial partners and the wider community

·   We have been able to maintain production and remain effective as a business through remote working

·   A new Emergency COVID-19 project, using G+® graphene, could offer the right balance of filtration and breathability in masks whilst providing similar anti-bacterial  performance to gowns and gloves. We are currently undertaking studies to investigate the potential of a new anti-viral molecule coupled with G+® graphene.

Target market progress

Textiles

·   New agreement signed with partner and customer Alfredo Grassi covering workwear and military outerwear in Europe and North Africa

·   Potential new alliances for the workwear and transportation markets on a worldwide basis under evaluation, with a specific focus on the UK and the US

·   Exclusive agreement with Loro Piana for the commercialisation of Loro Piana fabrics and garments enriched by G+® technology, with an initial duration of three years and a minimum value of €800,000

Environmental Remediation

·   Award of first Grafysorber® full service contract in July to treat sludges and by-products for an international oil and gas company operating European onshore wells

·   Transformational acquisition of a 51 per cent majority holding in Setcar S.A. completed in November and has been earnings accretive

a further 47 per cent was acquired by the parent company of our industrial partner GSP Group, a leading provider of offshore integrated services for the oil and gas industry with rigs operating in Romania, Turkey, Greece and Mexico

well regarded business, established in 1994, that fulfils our key strategic objective of fully integrating into the value chain in one of our most important verticals

·   Under the new partners’ ownership, Setcar gained its first contract in December to provide a suite of environmental decontamination services on the Trinity – 1X gas project in Block 30 offshore Romania for approximately US$1 million

·   In February 2020, Setcar gained a contract to supply environmental services to GSP Offshore, part of GSP, with a value of approximately €700,000 per annum over seven years

·   Grant of European patent in April 2020 covering the use of Grafysorber® to decontaminate water containing hydrocarbons resulting from the production of oil

Asphalt

·   Successful real world trials of G+® enhanced asphalt supermodifier, Gipave, developed with partner Iterchimica, on public roads in Rome and Oxfordshire in the UK

·   Post year end, in January 2020, six-month trial began on a high traffic taxiway used for intercontinental aircraft at Rome’s Fiumicino airport

·   Agreement signed in April 2020 covering the exclusive supply of G+® graphene to Iterchimica in the asphalt and bitumen sector worldwide for an initial duration of three years

Corporate

·   Current patent portfolio increased to 30 patents granted, seven of which were granted post year-end,  with important grants and filings in both the US and China in 2019

·   EU grant received in January 2020 to develop an environmentally sustainable technology to digitally print G+® graphene on fabrics

·   OEKO-TEX® independent non-toxic certification (an Eco Passport) received in February 2020 for our G+® printing paste technology

·   Frost and Sullivan Technology Innovation Award granted to the Company in May 2020 for unique Grafysorber performances in environmental remediation industry

Giulio Cesareo, Founder & CEO, said: “Without question 2019 was a landmark year for the Group in so many respects with the Group making great strides in our textile and environmental remediation verticals, as well as in the global asphalt market and with the acquisition of Setcar.

“Whilst we are well positioned in our key verticals with a growing recognition for Directa Plus and for the outstanding benefits of our G+ technology, we do not expect to be entirely immune from the effects of COVID-19 and hence have withdrawn forward guidance to stakeholders until the volatility in related markets reduces.

“April year to date revenues of €1.8m are almost treble those of the same period last year, we have a strong order book and attractive prospects including in, but not limited to, the COVID-19 related personal protective equipment markets. With this in mind, our COVID-19 scenario planning base case revenues, albeit a reduction against initial expectations, nonetheless show a notable near trebling of revenue for the year.

“We have a robust balance sheet with year-end net cash of €10.9m that provides us with the financial capacity therefore to support our growth ambitions and to withstand the uncertainties and challenges created by the COVID-19 pandemic.

“At Directa Plus we seek to be a farsighted Company, helping to build a better future and our ambition remains undimmed.  We do not intend to let Covid-19 prevent us from capturing new opportunities across all of our key markets.”

Key Performance Indicators and Financial Summary

2019

2018

Revenue from product and service sales (€’m)

2.63

2.25

Total Income* (€’m)

2.81

2.50

LBITDA** (€’m)

(2.71)

(3.24)

Loss after tax ***(€’m)

(3.40)

(3.96)

Cash and cash equivalents (€’m)

10.91

5.50

Total number of patents granted****

23

18

*Total Income comprises revenue from product and service sales (€2.63m), and other income including government grants (€ 0.06m) and RDEC – Research and Development Expenditure Credit (€0.10m).

** LBITDA represents results from operating activities before depreciation and amortisation of €0.84m (2018: €0.67m). Management believes that EBITDA provides a better reflection of operational performance by removing interest, tax, depreciation and amortisation. EBITDA is a non-GAAP measure.

*** The loss for the year of €3.40m is split between a €3.58m loss owned by the Company and a €0.18m profit in respect of non-controlling interests.

****Number of grants in portfolio at the end of the period

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