Versarien plc (AIM: VRS), the advanced engineering materials group, is pleased to announce its interim results for the six months ended 30 September 2019, a period in which the Company made further progress with its graphene commercialisation strategy.
· Group revenues of £4.38 million (H1 2018: £5.22 million)
· Adjusted LBITDA* of £0.90 million (H1 2018: £0.36 million)
· Loss before tax of £2.12 million (H1 2018: £0.79 million)
· Cash of £2.64 million at 30 September 2019 (30 September 2018: £6.07 million)
· Net assets of £11.87 million (30 September 2018: £12.32 million)
*Adjusted LBITDA (Loss Before Interest, Tax, Depreciation and Amortisation) excludes exceptional items and share-based payment charges
· First graphene company in the world to complete the US Graphene Council’s “Verified Graphene Producer” programme
· Continued progress in international expansion, including receiving the first graphene orders in the US and Japan
· Large-scale industrial prototype to improve rail transportation infrastructure, using Versarien’s graphene enhanced polymer technology showcased and successfully in test to date.
· Successfully incorporated wholly foreign owned enterprise in China (Beijing Versarien Technology Company Limited) with a business license granted by the relevant Chinese authorities
· Receipt of EU REACH approval to manufacture up to ten tonnes of graphene per annum
· Significant improvement in financial performance compared to H1 2018 for the Group’s hard wear and metallic products businesses
Post Period Highlights
· Commercial partnership agreement signed with the Company’s textile sector collaboration partner, MAS Innovation (Private) Limited, the first demonstration of Versarien’s graphene commercialisation strategy with a major global partner
· Further global success with a collaboration agreement signed with Refractory Solutions Insertec S.L.U. a Company headquartered in Spain
· Non-binding heads of terms signed with Jinan Bo Guan Building Engineering Co., Ltd (“JBG”) to form a manufacturing joint venture located in Zhucheng City, Shangdong, providing further opportunities in China in addition to the ongoing discussions and progress with Beijing Institute of Graphene Technology Co. Ltd (“BIGT”) and the China International Graphene Industry Union (“CIGIU”)
· Graphene incubation facility being established in Fangshan with CIGIU/BIGT in line with AGM statement and contractual negotiations continuing
Neill Ricketts, CEO of Versarien, commented:
“Over the period under review and subsequently, we have been progressing our business both in the UK and globally. The focus remains on our graphene commercialisation strategy and we are now actively working on 40 mainstream projects with our commercial partners, have a further 24 projects underway and active research ongoing on another 17. We continue to focus on the projects most likely to produce near-term significant revenue streams. These include graphene-enhanced transportation arches, 3D printing of concrete, aircraft interior parts, parts for down hole drilling in the oil and gas sector and graphene enhanced textiles.
“The Company has scaled up its manufacturing capacity to be able to produce three tonnes of graphene per annum and with the award of Graphene REACH registration, we are now in a position to be able to supply product as we near commercialisation. The large-scale industrial prototype arch showcased clearly demonstrates the significant benefits graphene technology can bring. We are also looking at opportunities to secure long term supply agreements with high quality graphite mines.
“Discussions with the Beijing Institute of Graphene Technology Co. Ltd and the China International Graphene Industry Union are still ongoing, aided by having been granted a business license for our Wholly Foreign Owned Enterprise (“WFOE”) in China. In line with the AGM statement, we have collaborated with CIGIU/BIGT and have registered the WFOE at the recently publicised Beijing Graphene Industry Innovation Centre Seed Incubation Park. We continue to maintain our primary position which is to ensure, so far as reasonably possible, that we protect our IP and therefore continue to assess other opportunities for factory location which are put to us in addition to any that may be proposed under the BIGT/CIGIU process.
“We have also signed a non-binding term sheet with the intention of setting up manufacturing in Shangdong. under a joint venture between Versarien and Jinan Bo Guan Building Engineering Co., Ltd with controlling ownership residing with Versarien. JBG would, together with associates, be responsible for the construction of a graphene valley park over a three-year period and JBG have expressed an interest in taking a strategic investment stake in Versarien as part of any transaction. Legally binding contracts have yet to be signed and updates on progress will be made in due course.
“As well as progressing our technology base it is pleasing to note that our hard wear and metallic products business has shown a significant increase in profitability on stable sales following the efficiency improvements that were implemented in the last financial year.
“We continue to use the cash received from our placing last year to develop application IP through our collaborations, to expand into Europe, the USA, China and South Korea as well as to develop new products such as Biogrene. Together with our accreditation as a verified graphene producer we are confident for the future ahead and look forward to reporting further success over the coming months.”